Document:

Exhibit 10.1

 

REGISTRATION RIGHTS AGREEMENT

 

by and among

 

IGNITE RESTAURANT GROUP, INC.

 

and

 

J.H. WHITNEY VI, L.P.

 

and

 

THE STOCKHOLDERS SET FORTH ON SCHEDULE I ATTACHED HERETO

 

Dated as of May 16, 2012

 

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT, dated as of May 16, 2012, is made and entered into by and between Ignite Restaurant Group, Inc., a Delaware corporation (the “Company”), J.H. Whitney VI, L.P., a Delaware limited partnership (“Whitney”) and certain persons listed on Schedule I hereto (such persons, together with Whitney, in their capacity as holders of Registrable Shares, the “Holders” and each a “Holder”).

 

RECITALS

 

WHEREAS, the Company has prepared a registration statement on Form S-1 (File No. 333-175878) with respect to the issuance and sale of its common stock, par value $0.01 per share (the “Common Stock”), with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), for an underwritten initial public offering of shares of the Company’s Common Stock (the “IPO”);

 

WHEREAS, in connection with the IPO, JCS Holdings, LLC, a Delaware limited liability company (“Parent”), the Company’s direct parent and sole stockholder, plans to distribute substantially all of the shares of the Common Stock then held by it to the holders of its Series A preferred units and its common units in accordance with the provisions then in effect of the Third Amended and Restated Limited Liability Company Agreement, as amended, of Parent;

 

WHEREAS, Whitney and the other Holders are the holders of such Series A preferred units and common units of Parent; and

 

WHEREAS, the Company has agreed to provide to the Holders the registration rights set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

Section 1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

 

“Agreement” shall mean this Registration Rights Agreement as originally executed and as amended, supplemented or restated from time to time.

 

“Board” shall mean the Board of Directors of the Company.

 

“Business Day” shall mean Monday, Tuesday, Wednesday, Thursday, and Friday that is not a day on which banking institutions in New York or other applicable places where such act is to occur are authorized or obligated by applicable law, regulation or executive order to close.

 

“Common Stock” shall have the meaning set forth in the Recitals hereof. 

 

“Commission” shall have the meaning set forth in the Recitals hereof.

 

 

“Company” shall have the meaning set forth in the introductory paragraph hereof. 

 

“Controlling Person” shall have the meaning set forth in Section 5(a) of this Agreement. 

 

“Demand Notice” shall have the meaning set forth in Section 2(a)(i) of this Agreement.

 

“Demand Registration” shall have the meaning set forth in Section 2(b)(i) of this Agreement.

 

“Demand Registration Statement” shall have the meaning set forth in Section 2(b)(i) of this Agreement.

 

“Depositary” shall mean The Depository Trust Company, or any other depositary appointed by the Company.

 

“End of Suspension Notice” shall have the meaning set forth in Section 3(b) of this Agreement.

 

“Equity Securities” of any Person means (i) any capital stock, partnership, membership, joint venture or other ownership or equity interest, participation or securities in or of such Person (whether voting or non voting, whether preferred, common or otherwise, and including any stock appreciation, contingent interest or similar right) and (ii) any option, warrant, security or other right (including debt securities) directly or indirectly convertible into or exercisable or exchangeable for, or otherwise to acquire directly or indirectly, any stock, interest, participation or security described in clause (i) above.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended (or any corresponding provision of succeeding law) and the rules and regulations thereunder.

 

“FINRA” shall mean the Financial Industry Regulatory Authority.

 

“Holder” shall mean each holder of the Common Stock, listed in Schedule I attached hereto, in his, her or its capacity as a holder of Registrable Shares and their direct and indirect transferees. For purposes of this Agreement, the Company may deem and treat the registered holder of a Registrable Share as the Holder and absolute owner thereof, unless notified to the contrary in writing by the registered Holder thereof.

 

“Initiating Holders” shall have the meaning set forth in Section 2(b)(i) of this Agreement. 

 

“IPO” shall have the meaning set forth in the Recitals hereof.

 

“Liabilities” shall have the meaning set forth in Section 5(a)(i) of this Agreement.

 

“Maximum Threshold” shall have the meaning set forth in Section 2(b)(ii) of this Agreement.

 

“Non-Holder Securities” shall have the meaning set forth in Section 2(c)(iii) of this Agreement.

 

 

“Parent” shall have the meaning set forth in the Recitals hereof;

 

“Person” shall mean any individual, partnership, corporation, limited liability company, joint venture, association, trust, unincorporated organization or other governmental or legal entity.

 

“Piggyback Registration” shall have the meaning set forth in Section 2(c)(i) of this Agreement.

 

“Prospectus” means the prospectus or prospectuses included in any Registration Statement (including without limitation, any prospectus subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act and any term sheet filed pursuant to Rule 434 under the Securities Act), as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Shares covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference or deemed to be incorporated by reference in such prospectus or prospectuses.

 

“Registrable Shares” with respect to any Holder, shall mean at any time the Common Stock (with the initial amount of Common Stock shares held by each Holder being as forth opposite such Holder’s name on Schedule I hereto), together with any class of equity securities of the Company or of a successor to the entire business of the Company which are issued in exchange for the Common Stock; provided,  however,  that such Registrable Shares shall cease to be Registrable Shares with respect to any Holder upon the earliest to occur of (A) the date on which a Registration Statement with respect to the sale of such Holder’s Registrable Shares shall have been declared effective under the Securities Act and all of such Holder’s Registrable Shares shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (B) the date on which such securities shall have ceased to be outstanding; and (C) the date on which the Registrable Shares may be sold without restriction pursuant to Rule 144 under the Securities Act in a single transaction.

 

“Registration Expenses” shall mean (i) the fees and disbursements of counsel and independent public accountants for the Company incurred in connection with the Company’s performance of or compliance with this Agreement, including the expenses of any special audits or “comfort” letters required by or incident to such performance and compliance, and any premiums and other costs of policies of insurance obtained by the Company against liabilities arising out of the sale of any securities, (ii) all registration, filing and stock exchange fees, all fees and expenses of complying with securities or “blue sky” laws, all fees and expenses of custodians, transfer agents and registrars,  all printing expenses, messenger and delivery expenses and any fees and disbursements of one common counsel retained by a majority of the Registrable Shares, (iii) expenses relating to any analyst or investor presentations or any “road shows” undertaken in connection with the registration, marketing or selling of the Registrable Securities, (iv) fees and expenses in connection with any review by the Financial Industry Regulatory Authority,  Inc. (“FINRA”) of the underwriting arrangements or other terms of the offering,  and all fees and expenses of any “qualified independent underwriter,” including the reasonable fees

 

 

and expenses of any counsel thereto, (v) costs of printing and producing any agreements among underwriters, underwriting agreements, any “blue sky” or legal investment memoranda and any selling agreements and other documents in connection with the offering, sale or delivery of the Registrable Securities; provided, however, that “Registration Expenses” shall not include any out-of-pocket expenses of the Holders (other than as set forth in clause (ii) above), transfer taxes, underwriting or brokerage commissions or discounts associated with effecting any sales of Registrable Shares that may be offered, which expenses shall be borne by each Holder of Registrable Shares on a pro rata basis with respect to the Registrable Shares so sold.

 

“Registration Statement” means any registration statement of the Company filed with the Commission under the Securities Act which covers any of the Registrable Shares pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference or deemed to be incorporated by reference in such Registration Statement.

 

“Sale Expenses”  shall mean other than in connection with a Registration Statement, (i) the fees and disbursements of counsel and independent public accountants for the Company incurred in connection with the Company’s performance of or compliance with this Agreement, including the expenses of any special audits or “comfort” letters required by or incident to such performance and compliance, and any premiums and other costs of policies of insurance obtained by the Company against liabilities arising out of the sale of any securities and (ii) all registration, filing and stock exchange fees, all fees and expenses of complying with securities or “blue sky” laws, all fees and expenses of custodians, transfer agents and registrars, all printing expenses, messenger and delivery expenses and any fees and disbursements of one common counsel retained by a majority of the Registrable Shares; provided, however, that “Sale Expenses” shall not include any out-of-pocket expenses of the Holders (other than as set forth in clause (ii) above), transfer taxes, underwriting or brokerage commissions or discounts associated with effecting any sales of Registrable Shares that may be offered, which expenses shall be borne by each Holder of Registrable Shares on a pro rata basis with respect to the Registrable Shares so sold.

 

“Securities Act” shall have the meaning set f01ih in the Recitals hereof.

 

“Selling Holders’ Counsel” shall mean counsel for the Holders that is selected by the Holders holding a majority of the Registrable Shares included in a Registration Statement and that is reasonably acceptable to the Company.  In the absence of en election, such counsel shall be Kirkland & Ellis LLP.

 

“Shelf Registration Statement” shall have the meaning set forth in Section 2(a) of this Agreement.

 

“Suspension Event” shall have the meaning set forth in Section 3(b) of this Agreement. 

 

“Suspension Notice” shall have the meaning set f01ih in Section 3(a) of this Agreement. 

 

“Underwritten Offering” shall mean a sale of securities of the Company to an underwriter or underwriters for reoffering to the public.

 

 

“Withdrawn Demand Registration” shall have the meaning set forth in Section 2(b)(v) of this Agreement.

 

Section 2. Shelf Registrations and Piggy Back Registrations.  

 

(a) Shelf Registration.

 

(i) At any time that the Company is eligible to use Form S-3, upon the written request of Whitney, the Company shall use reasonable best efforts to file with the Commission following the receipt of such written request (the “Demand Notice”), one or more registration statements with respect to the Registrable Shares under the Securities Act for the offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (the “Shelf Registration Statement”). If such Shelf Registration Statement is not automatically declared effective by the Commission or does not automatically become effective, the Company shall use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective by the Commission as soon as practicable after the filing thereof. The Shelf Registration Statement shall be on an appropriate form and the registration statement and any form of prospectus included therein (or prospectus supplement relating thereto) shall reflect the plan of distribution or method of sale as the Holders may from time to time notify the Company of.  Following the receipt by the Company of any Demand Notice, all of the Registrable Shares of any Whitney shall be included in the Shelf Registration Statement without any further action unless a smaller number is requested or a dollar amount is registered.  If not all of Whitney’s Registrable Shares are included, Whitney may submit subsequent Demand Notices.  Other Holders shall be afforded 7 days to decide to include Registrable Shares in proportion to the Registrable Shares of Whitney that are included.

 

(ii) Effectiveness. The Company shall use commercially reasonable efforts to keep any Shelf Registration Statement continuously effective for the period beginning on the date on which such Shelf Registration Statement is declared effective and ending on the date that all of the Registrable Shares registered under the Shelf Registration Statement cease to be Registrable Shares. During the period that such Shelf Registration Statement is effective, the Company shall supplement or make amendments to the Shelf Registration Statement, if required by the Securities Act or if reasonably requested by the Holders (whether or not required by the form on which the securities are being registered), including to reflect any specific plan of distribution or method of sale, and shall use its commercially reasonable best efforts to have such supplements and amendments declared effective, if required, as soon as practicable after filing.

 

(iii) Selection of Underwriters. If any offering pursuant to a Shelf Registration Statement is an underwritten offering, a majority-in-interest of the Holders participating in such underwritten offering shall have the right to select the managing underwriter or underwriters to administer any such offering.

 

(iv) The priority of inclusion of Registrable Shares in a Shelf Registration Statement and any underwritten sale thereunder shall be consistent with Section 2(b)(ii) hereof.

 

 

(b) Demand Registrations.

 

(i) Right to Request Registration. So long as the Company does not have an effective Shelf Registration Statement with respect to the Registrable Shares, Whitney may request registration under the Securities Act of all or part of its Registrable Shares (“Demand Registration”) with an anticipated aggregate offering price of at least $10.0 million at any time and from time to time.

 

Within ten (10) Business Days after receipt of any such request for Demand Registration, the Company shall give written notice of such request to all other Holders of Registrable Shares, if any, and shall, subject to the provisions of Section 2(b)(iii) hereof, include in such registration all such Registrable Shares with respect to which the Company has received written requests for inclusion therein within seven (7) Business Days after the receipt of the Company’s notice. The Company shall use commercially reasonable best efforts to file with the Commission following receipt of any such request for Demand Registration one or more registration statements with respect to the Registrable Shares under the Securities Act (the “Demand Registration Statement”). The Company shall use commercially reasonable best efforts to cause such Demand Registration Statement to be declared effective by the Commission as soon as practicable after the filing thereof. The Demand Registration Statement shall be on an appropriate form and the Registration Statement and any form of prospectus included therein (or prospectus supplement relating thereto) shall reflect the plan of distribution or method of sale as the Holders may from time to time notify the Company. Following the receipt by the Company of any request for Demand Registration, subject to Section 2(b)(ii), all of the Registrable Shares of any Holder shall be included in the Demand Registration Statement without any further action by any Holder.

 

(ii) Priority on Demand Registrations. If the managing underwriters of a requested Demand Registration advise the Company in writing that, in their opinion, the number of Registrable Shares requested to be included in such Registration Statement exceeds the number that can be sold in such offering and/or that the number of Registrable Shares proposed to be included in any such registration would adversely affect the price per share of the Company’s equity securities to be sold in such offering (such maximum number of securities or Registrable Shares, as applicable, the “Maximum Threshold”), the underwriting shall be allocated among the Company and all Holders as follows: (A) first, the Registrable Shares, as to which registration has been requested pursuant to the applicable written contractual demand registration rights of Whitney that can be sold without exceeding the Maximum Threshold; (B) second, to the extent that the Maximum Threshold has not been reached under the foregoing clause (A), the shares of Common Stock or other securities, if any, for the account of other Holders desiring to participate in such registration, pro rata, based on the amount of such Common Stock or other securities initially requested to be registered by such Holders or as such Holders may otherwise agree, that can be sold without exceeding the Maximum Threshold.

 

(iii) Restrictions on Demand Registrations. The Company shall not be obligated to effect any Demand Registration within sixty (60) days after the effective date of a previous Demand Registration or a previous registration under which any Holder or

 

 

Holders (the “Initiating Holders”) had piggyback rights pursuant to Section 2(c) hereof wherein the Initiating Holders were permitted to register, and sold, at least 50% of the shares of Registrable Shares requested to be included therein. In addition, the Company shall not be obligated to effect any Demand Registration after the Company has effected three (3) Demand Registrations and all such registrations effected by the Company have been declared and ordered effective in any twelve (12) month period.

 

(iv) Selection of Underwriters. If any of the Registrable Shares covered by a Demand Registration hereof is to be sold in an underwritten offering, a majority-in-interest of the Holders participating in such underwritten offering shall have the right to select the managing underwriter or underwriters to administer any such offering.

 

(v) Effective Period of Demand Registrations. After any Demand Registration Statement filed pursuant to this Agreement has become effective, the Company shall use its commercially reasonable best efforts to keep such Demand Registration Statement effective for a period equal to one hundred eighty (180) days from the date on which the SEC declares such Demand Registration Statement effective (or if such Demand Registration Statement is not effective during any period within such one hundred eighty (180) days, such 180-day period shall be extended by the number of days during such period when such Demand Registration Statement is not effective), or such shorter period that shall terminate when all of the Registrable Shares covered by such Demand Registration Statement have been sold pursuant to such Demand Registration. If the Company shall withdraw or reduce the number of shares of Registrable Shares that is subject to any Demand Registration pursuant to Section 2(b)(ii) (a “Withdrawn Demand Registration”), the Initiating Holders of the Registrable Shares remaining unsold and originally covered by such Withdrawn Demand Registration shall be entitled to a replacement Demand Registration that (subject to the provisions of this Section 2(b)) the Company shall use its commercially reasonable best efforts to keep effective for a period commencing on the effective date of such Demand Registration and ending on the earlier to occur of the date (i) that is one hundred eighty (180) days from the effective date of such Demand Registration and (ii) on which all of the Registrable Shares covered by such Demand Registration has been sold. Such additional Demand Registration otherwise shall be subject to all of the provisions of this Agreement.

 

(c) Piggyback Registrations.

 

(i) Right to Piggyback. Whenever the Company proposes to register any of its common equity securities under the Securities Act (other than a registration statement on F01m S-8  or on Form S-4 or any similar successor forms thereto), whether for its own account or for the account of one or more stockholders of the Company, and the registration form to be used may be used for any registration of Registrable Shares (a “Piggyback Registration”), the Company shall give prompt written notice to all Holders of its intention to effect such a registration and, subject to Sections 2(c)(ii) and 2(c)(iii), shall include in such registration all Registrable Shares with respect to which the Company has received written requests for inclusion therein within seven (7) days after

 

 

the receipt of the Company’s notice. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion.

 

(ii) Priority on Primary Registrations.  If a Piggyback Registration is an underwritten primary registration on behalf of the Company, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the Maximum Threshold, the underwriting shall be allocated among the Company and all Holders as follows (A) first, the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Threshold; (B) second, to the extent that the Maximum Threshold has not been reached under the foregoing clause (A), the shares of Common Stock or other securities, if any, comprised of Registrable Shares, as to which registration has been requested pursuant to the applicable written contractual piggy-back registration rights of such Holders, pro rata, among the Holders who have elected to participate in such offering that can be sold without exceeding the Maximum Threshold; (C) third, to the extent that the Maximum Threshold has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other securities for the account of other Persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such Persons and that can be sold without exceeding the Maximum Threshold.

 

(iii) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of a holder of the Company’s securities other than Registrable Shares (“Non-Holder Securities”), and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number that can be sold in such offering and/or that the number of Registrable Shares proposed to be included in any such registration would adversely affect the price per share of the Company’s equity securities to be sold in such offering, the underwriting shall be allocated among the holders of Non-Holder Securities and all Holders electing to participate in such offering pro rata on the basis of the Non-Holder Securities and Registrable Shares offered for such registration by the holder of Non-Holder Securities and each Holder, respectively, electing to participate in such registration.

 

(iv) Withdrawal. Any Holder may elect to withdraw such Holder’s request for inclusion of Registrable Shares in any Piggyback Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration Statement. The Company (whether on its own determination or as the result of a withdrawal by Persons making a demand pursuant to written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of the Registration Statement without thereby incurring any liability to the Holders of Registrable Shares. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the Holders in connection with such Piggyback Registration as provided in Section 8(c).

 

 

Section 3. Black-Out Periods.

 

(a) Notwithstanding Section 2, and subject to the provisions of this Section 3, the Company shall be permitted, in limited circumstances, to suspend the use, from time to time, of the Prospectus that is part of a Shelf Registration Statement (and therefore suspend sales of the Registrable Shares under such Shelf Registration Statement), by providing written notice (a “Suspension Notice”) to the Selling Holders’ Counsel, if any, and the Holders, for such times as the Company reasonably may determine is necessary and advisable (but in no event for more than an aggregate of ninety (90) days in any rolling twelve (12) month period commencing on the date of this Agreement or more than forty-five (45) consecutive days, except as a result of a refusal by the Commission to declare any post-effective amendment to the Shelf Registration Statement effective after the Company has used all commercially reasonable best efforts to cause the post-effective amendment to be declared effective by the Commission, in which case, the Company must terminate the black-out period immediately following the effective date of the post-effective amendment) if any of the following events shall occur: (i) a majority of the Board determines in good faith that (A) the offer or sale of any Registrable Shares would materially impede, delay or interfere with any proposed financing, offer or sale of securities, acquisition, corporate reorganization or other material transaction involving the Company, (B) after the advice of counsel, the sale of Registrable Shares pursuant to the Shelf Registration Statement would require disclosure of non-public material information not otherwise required to be disclosed under applicable law, and (C) (x) the Company has a bona fide business purpose for preserving the confidentiality of such transaction, (y) disclosure would have a material adverse effect on the Company or the Company’s ability to consummate such transaction, or (z) such transaction renders the Company unable to comply with Commission requirements, in each case under circumstances that would make it impractical or inadvisable to cause the Shelf Registration Statement (or such filings) to become effective or to promptly amend or supplement the Shelf Registration Statement on a post effective basis, as applicable; or (ii) a majority of the Board determines in good faith, upon the advice of counsel, that it is in the Company’s best interest or it is required by law, rule or regulation to supplement the Shelf Registration Statement or file a post-effective amendment to the Shelf Registration Statement in order to ensure that the prospectus included in the Shelf Registration Statement (1) contains the information required under Section 10(a)(3) of the Securities Act; (2) discloses any facts or events arising after the effective date of the Shelf Registration Statement (or of the most recent post-effective amendment) that, individually or in the aggregate, represents a fundamental change in the information set forth therein; or (3) discloses any material information with respect to the plan of distribution that was not disclosed in the Shelf Registration Statement or any material change to such information. Upon the occurrence of any such suspension, the Company shall use its commercially reasonable efforts to cause the Shelf Registration Statement to become effective or to promptly amend or supplement the Shelf Registration Statement on a post effective basis or to take such action as is necessary to make resumed use of the Shelf Registration Statement as soon as possible.

 

(b) In the case of an event that causes the Company to suspend the use of a Shelf Registration Statement as set forth in paragraph (a) above (a “Suspension Event”), the Company shall give a Suspension Notice to the Selling Holders’ Counsel, if any, and the Holders to suspend sales of the Registrable Shares and such notice shall state generally the basis for the notice and that such suspension shall continue only for so long as the Suspension Event or its effect is continuing and the Company is using its commercially reasonable efforts and taking all reasonable steps to terminate suspension of the use of the Shelf Registration Statement as

 

 

promptly as possible. A Holder shall not effect any sales of the Registrable Shares pursuant to such Shelf Registration Statement (or such filings) at any time after it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice (as defined below). If so directed by the Company, each Holder will deliver to the Company (at the expense of the Company) all copies other than permanent file copies then in such Holder’s possession of the prospectus covering the Registrable Shares at the time of receipt of the Suspension Notice. The Holders may recommence effecting sales of the Registrable Shares pursuant to the Shelf Registration Statement (or such filings) following further written notice to such effect (an “End of Suspension Notice”) from the Company, which End of Suspension Notice shall be given by the Company to the Holders and to the Selling Holders’ Counsel, if any, promptly following the conclusion of any Suspension Event and its effect.

 

(c) Notwithstanding any provision herein to the contrary, if the Company shall give a Suspension Notice with respect to any Shelf Registration Statement pursuant to this Section 3, the Company agrees that it shall extend the period of time during which such Shelf Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from the date of receipt by the Holders of the Suspension Notice to and including the date of receipt by the Holders of the End of Suspension Notice and provide copies of the supplemented or amended prospectus necessary to resume sales, with respect to each Suspension Event; provided that such period of time shall not be extended beyond the date that Common Stock covered by such Shelf Registration Statement are no longer Registrable Shares.

 

Section 4. Registration Procedures.

 

(a) In connection with the filing of any Registration Statement or sale of Registrable Shares as provided in this Agreement, the Company shall use commercially reasonable best efforts to, as expeditiously as reasonably practicable:

 

(i) prepare and file with the Commission the Registration Statement, within the relevant time period specified in Section 2, on the appropriate form under the Securities Act, which form (1) shall be selected by the Company, (2) shall be available for the registration and sale of the Registrable Shares by the selling Holders thereof, (3) shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the Commission to be filed therewith or incorporated by reference therein, and (4) shall comply in all respects with the requirements of Regulation S-T under the Securities Act, and otherwise comply with its obligations under Section 2 hereof;

 

(ii) prepare and file with the Commission such amendments and post-effective amendments to each Registration Statement as may be necessary under applicable law to keep such Registration Statement effective for the applicable period; and cause each prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the Securities Act and comply with the provisions of the Securities Act, the Exchange Act and the rules and regulations thereunder applicable to them with respect to the disposition of all securities covered by each Registration Statement during the

 

 

applicable period in accordance with the intended method or methods of distribution by the selling Holders thereof;

 

(iii) (1) notify each Holder of Registrable Shares, at least five (5) Business Days after filing, that a Registration Statement with respect to the Registrable Shares has been filed and advising such Holders that the distribution of Registrable Shares will be made in accordance with any method or combination of methods legally available by the Holders of any and all Registrable Shares; (2) furnish to each Holder of Registrable Shares and to each underwriter of an Underwritten Offering of Registrable Shares, if any, without charge, as many copies of each prospectus, including each preliminary prospectus, and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request, including financial statements and schedules in order to facilitate the public sale or other disposition of the Registrable Shares; and (3) hereby consent to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders of Registrable Shares in connection with the offering and sale of the Registrable Shares covered by the prospectus or any amendment or supplement thereto;

 

(iv) use its commercially reasonable best efforts to register or qualify the Registrable Shares under all applicable state securities or “blue sky” laws of such jurisdictions as any Holder of Registrable Shares covered by a Registration Statement and each underwriter of an Underwritten Offering of Registrable Shares shall reasonably request by the time the applicable Registration Statement is declared effective by the Commission, and do any and all other acts and things which may be reasonably necessary or advisable to enable each such Holder and underwriter to consummate the disposition in each such jurisdiction of such Registrable Shares owned by such Holder; provided, however, that the Company shall not be required to (1) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 4(a)(iv), or (2) take any action which would subject it to general service of process or taxation in any such jurisdiction where it is not then so subject;

 

(v) notify promptly each Holder of Registrable Shares under a Registration Statement and, if requested by such Holder, confirm such advice in writing promptly at the address determined in accordance with Section 8(e) of this Agreement (1) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (2) of any request by the Commission or any state securities authority for post-effective amendments and supplements to a Registration Statement and prospectus or for additional information after the Registration Statement has become effective, (3) of the issuance by the Commission or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (4) if, between the effective date of a Registration Statement and the closing of any sale of Registrable Shares covered thereby, the representations and warranties of the Company contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be true and correct in all material respects, (5) of the happening of any event or the discovery of any facts during the period a Registration

 

 

Statement is effective as a result of which such Registration Statement or any document incorporated by reference therein contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading or, in the case of the prospectus, contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (which information shall be accompanied by an instruction to suspend the use of the Registration Statement and the prospectus (such instruction to be provided in the same manner as a Suspension Notice)  until the requisite changes have been made, at which time notice of the end of suspension shall be delivered in the same manner as an End of Suspension Notice), (6) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Shares, for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (7) of the filing of a post-effective amendment to such Registration Statement;

 

(vi) furnish Selling Holders’ Counsel,  if any, copies of any comment letters relating to the selling Holders received from the Commission or any other request by the Commission or any state securities authority for amendments or supplements to a Registration Statement and prospectus or for additional information relating to the selling Holders;

 

(vii) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment;

 

(viii) furnish to each Holder of Registrable Shares, and each underwriter, if any, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto, including financial statements and schedules (without documents incorporated therein by reference and all exhibits thereto,  unless requested);

 

(ix) cooperate with the selling Holders to facilitate the timely preparation and delivery of certificates representing Registrable Shares to be sold and not bearing any restrictive legends; and enable such Registrable Shares to be in such denominations and registered in such names as the selling Holders or the underwriters, if any, may reasonably request at least three (3) Business Days prior to the closing of any sale of Registrable Shares;

 

(x) upon the occurrence of any event or the discovery of any facts, as contemplated by Sections 4(a)(v)(5) and 4(a)(v)(6) hereof, as promptly as practicable after the occurrence of such an event, use its commercially reasonable best efforts to prepare a supplement or post-effective amendment to the Registration Statement or the related prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Shares, such prospectus will not contain at the time of such delivery any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or will remain so qualified,  as applicable. At such time as such public disclosure is otherwise made or

 

 

the Company determines that such disclosure is not necessary, in each case to correct any misstatement of a material fact or to include any omitted material fact, the Company agrees promptly to notify each Holder of such determination and to furnish each Holder such number of copies of the prospectus as amended or supplemented, as such Holder may reasonably request;

 

(xi) within a reasonable time prior to the filing of any Registration Statement, any prospectus, any amendment to a Registration Statement or amendment or supplement to a prospectus, provide copies of such document to the Selling Holders’ Counsel, if any, on behalf of such Holders, and make representatives of the Company as shall be reasonably requested by the Holders of Registrable Shares available for discussion of such document;

 

(xii) obtain a CUSIP number for the Registrable Shares not later than the effective date of a Registration Statement, and provide the Company’s transfer agent with printed certificates for the Registrable Shares, in a form eligible for deposit with the Depositary, in each case, to the extent necessary or applicable;

 

(xiii) enter into agreements (including underwriting agreements) and take all other customary appropriate actions in order to expedite or facilitate the disposition of such Registrable Shares whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration:

 

(A) make such representations and warranties to the Holders of such Registrable Shares and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in similar Underwritten Offerings as may be reasonably requested by them;

 

(B) obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to any managing underwriter(s) and their counsel) addressed to the underwriters, if any (and in the case of an underwritten registration, each selling Holder), covering the matters customarily covered in opinions requested in Underwritten Offerings and such other matters as may be reasonably requested by the underwriter(s);

 

(C) obtain “comfort” letters and updates thereof from the Company’s independent registered public accounting firm (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements are, or are required to be, included in the Registration Statement) addressed to the underwriter(s), if any, and use reasonable efforts to have such letter addressed to the selling Holders in the case of an underwritten registration (to the extent consistent with Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accounts), such letters to be in customary form and covering matters of the type customarily covered in “comfort” letters to underwriters in connection with similar Underwritten Offerings;

 

 

(D) enter into a securities sales agreement with the Holders and an agent of the Holders providing for, among other things, the appointment of such agent for the selling Holders for the purpose of soliciting purchases of Registrable Shares, which agreement shall be in form, substance and scope customary for similar offerings;

 

(E) if an underwriting agreement is entered into, cause the same to set forth indemnification provisions and procedures substantially equivalent to the indemnification provisions and procedures set forth in Section 5 hereof with respect to the underwriters and all other parties to be indemnified pursuant to said Section or, at the request of any underwriters, in the form customarily provided to such underwriters in similar types of transactions; and

 

(F) deliver such documents and certificates as may be reasonably requested and as are customarily delivered in similar offerings to the Holders of a majority in principal amount of the Registrable Shares being sold and the managing underwriters, if any;

 

(xiv) make available for inspection by any underwriter participating in any disposition pursuant to a Registration Statement, Selling Holders’ Counsel and any accountant retained by a majority in principal amount of the Registrable Shares being sold, all financial and other records, pertinent corporate documents and properties or assets of the Company reasonably requested by any such persons, and cause the respective officers, directors, employees, and any other agents of the Company to supply all information reasonably requested by any such representative, underwriter, counsel or accountant in connection with a Registration Statement, and make such representatives of the Company available for discussion of such documents as shall be reasonably requested by the Company; provided, however, that the Selling Holders’ Counsel, if any, and the representatives of any underwriters will use commercially reasonable best efforts, to the extent reasonably practicable, to coordinate the foregoing inspection and information gathering and to not materially disrupt the Company’s business operations;

 

(xv) a reasonable time prior to filing any Registration Statement, any prospectus forming a part thereof, any amendment to such Registration Statement, or amendment or supplement to such prospectus, provide copies of such document to the underwriter(s) of an Underwritten Offering of Registrable Shares; within five (5) Business Days after the filing of any Registration Statement, provide copies of such Registration Statement to Selling Holders’  Counsel; make such changes in any of the foregoing documents prior to the filing thereof, or in the case of changes received from Selling Holders’ Counsel by filing an amendment or supplement thereto, as the underwriter or underwriters, or in the case of changes received from Selling Holders’  Counsel relating to the selling Holders or the plan of distribution of Registrable Shares, as Selling Holders’ Counsel, reasonably requests; not file any such document in a form to which any underwriter shall not have previously been advised and furnished a copy of or to which the Selling Holders’ Counsel, if any, on behalf of the Holders of Registrable Shares, or any underwriter shall reasonably object; not include in any amendment or supplement to such documents any information about the selling Holders or any change to the plan of distribution of 

 

 

Registrable Shares that would limit the method of distribution of the Registrable Shares unless Selling Holders’ Counsel has been advised in advance and has approved such information or change; and make the representatives of the Company available for discussion of such document as shall be reasonably requested by the Selling Holders’ Counsel, if any, on behalf of such Holders, Selling Holders’ Counsel or any underwriter;

 

(xvi) furnish to each Holder, if it has a due diligence defense under the Securities Act, and to each underwriter, if any, a signed counterpart, addressed to such Holder or underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) if eligible under SAS 72, a comfort letter or comfort letters from the Company’s independent public accountants, each in customary form and covering such matters of the type customarily covered by opinions or comfort letters, as the case may be, as the Holders of a majority of the Registrable Shares included in such offering or the managing underwriter or underwriters therefor reasonably requests;

 

(xvii) use its commercially reasonable best efforts to cause all Registrable Shares to be listed on any national securities exchange on which the Company’s common stock is then listed;

 

(xviii) otherwise comply with all applicable rules and regulations of the Commission and make available to its security holders, as soon as reasonably practicable, an earnings statement covering at least twelve (12) months which shall satisfy the provisions of Section ll(a) of the Securities Act and Rule 158 thereunder;

 

(xix) cooperate and assist in any filings required to be made with the FINRA and in the performance of any due diligence investigation by any underwriter and its counsel (including any “qualified independent underwriter” that is required to be retained in accordance with the rules and regulations of the FINRA);

 

(xx) the Company may (as a condition to a Holder’s participation in a Shelf Registration, Demand Registration or Piggyback Registration) require each Holder of Registrable Shares to furnish to the Company such information regarding the Holder and the proposed distribution by such Holder of such Registrable Shares as the Company may from time to time reasonably request in writing.

 

(xxi)   if Registrable Securities are to be sold in a Underwritten Offering, to include in the registration statement, or in the case of a Shelf Registration, a prospectus supplement, to be used all such information as may be reasonably requested by the underwriters for the marketing and sale of such Registrable Securities;

 

(xxii) cause the appropriate officers of the Company to (i) prepare and make presentations at any “road shows” and before analysts and rating agencies, as the case may be, (ii) take other actions to obtain ratings for any Registrable Securities and (iii) use their reasonable best efforts to cooperate as reasonably requested by the underwriters in the offering, marketing or selling of the Registrable Securities.

 

Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event or the discovery of any facts of the type described in Section 4(a)(v) hereof, such

 

 

Holder will forthwith discontinue disposition of Registrable Shares pursuant to a Registration Statement relating to such Registrable Shares until such Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 4(a)(v) hereof, and, if so directed by the Company, such Holder will deliver to the Company (at the Company’s expense) all copies in such Holder’s possession, other than permanent file copies then in such Holder’s possession, of the prospectus covering such Registrable Shares current at the time of receipt of such notice. 

 

Section 5. Indemnification.

 

(a) Indemnification by the Company. The Company agrees to indemnify and hold harmless each Holder, and the respective officers, directors, partners, employees, representatives and agents of any such Person, and each Person (a “Controlling Person”), if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any of the foregoing Persons, as follows:

 

(i) against any and all loss, liability, claim, damage, judgment, actions, other liabilities and expenses whatsoever (the “Liabilities”), as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto) pursuant to which Registrable Shares were registered under the Securities Act, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact contained in any prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom at such date of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

(ii) against any and all Liabilities, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 5(d) below) any such settlement is effected with the written consent of the Company; and

 

(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by any indemnified party), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above;

 

provided, however, that this indemnity agreement shall not apply to any Liabilities to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by

 

 

the Holder expressly for use in a Registration Statement (or any amendment thereto) or any prospectus (or any amendment or supplement thereto).

 

(b) Indemnification by the Holders.  Each Holder severally, but not jointly, agrees to indemnify and hold harmless the Company and the other selling Holders, and each of their respective officers, directors, partners, employees, representatives and agents, and each of their respective Controlling Persons, against any and all Liabilities described in the indemnity contained in Section 5(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or any prospectus included therein (or any amendment or supplement thereto) in reliance upon and in conformity with written information with respect to such Holder furnished to the Company by such Holder expressly for use in the Registration Statement (or any amendment thereto) or such prospectus (or any amendment or supplement thereto); provided, however, that no such Holder shall be liable for any claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Registrable Shares pursuant to such Registration Statement.

 

(c) Notices of Claims, etc. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure so to notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying pmty or parties be liable for the fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whosoever in respect of which indemnification or contribution could be sought under this Section 5 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

(d) Indemnification Payments. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 5(a)(ii) effected without its written consent if (i) such settlement is entered into more than forty-five (45) days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least thirty (30) days prior to such settlement being entered into and (iii) such indemnifying party shall not

 

 

have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

 

(e) Contribution. If the indemnification provided for in this Section 5 is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any Liabilities referred to therein, then each indemnifying party shall contribute to the aggregate amount of such Liabilities incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative fault of the Company, on the one hand, and the Holders, on the other hand, in connection with the statements or omissions which resulted in such Liabilities, as well as any other relevant equitable considerations.

 

The relative fault of the Company on the one hand and the Holders on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Holders and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 5. The aggregate amount of Liabilities incurred by an indemnified party and referred to above in this Section 5 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

 

No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

For purposes of this Section 5, each Person, if any, who controls the a Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as a Holder, and each director of the Company, and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company.

 

Section 6. Holdback Agreement.

 

(a)                                      Each Holder agrees not to effect any sale, transfer, or other actual or pecunimy transfer (including heading and similar arrangements) of any Registrable Shares or of any other equity securities of the Company, or any securities convertible into or exchangeable or exercisable for such stock or securities, during the period beginning seven days prior to, and ending 90 days (subject to a 17 day extension is requested by the managing underwriter) after (or for such shorter period as to which the managing underwriter(s) may agree), the date of the underwriting agreement of each underwritten offering made pursuant to a Registration Statement

 

 

other than Registrable Securities sold pursuant to such underwritten offering; and (b) the Company agrees not to effect any public sale or distribution of its equity securities (or any securities convertible into or exchangeable or exercisable for such securities) during the seven days prior to and during the 90-day period beginning on the effective date of any underwritten Demand Registration (or for such shorter period as to which the managing underwriter or underwriters may agree), except as part of such Demand Registration or in connection with any employee benefit or similar plan, any dividend reinvestment plan, or a business acquisition or combination and to use all reasonable efforts to cause each holder of at least 5% (on a fully­ diluted basis) of its equity securities (or any securities convertible into or exchangeable or exercisable for such securities) which are or may be purchased from the Company at any time after the date of this Agreement (other than in a registered offering) to agree not to effect any sale or distribution of any such securities during such period (except as part of such underwritten offering, if otherwise permitted).  Each Holder agrees to enter into any agreements reasonably requested by any managing underwriter reflecting the terms of this Section 6.

 

(b) Notwithstanding anything contained herein, after December 31, 2013 no Holder shall have any obligations under this Section 6 (except with respect to an agreement signed with any managing underwriter prior to December 31, 2013) or rights under Section 2 hereof if such Holder is an individual that was an employee of the Company but no longer is an employee of the Company.

 

Section 7. Termination; Survival. The rights of each Holder under this Agreement shall terminate upon the date that all of the Registrable Shares cease to be Registrable Shares. Notwithstanding the foregoing, the obligations of the parties under Sections 5 and 2 of this Agreement shall remain in full force and effect following such time. 

 

Section 8. Miscellaneous.

 

(a) Covenants Relating To Rule 144. For so long as the Company is subject to the reporting requirements of Section 13 or 15 of the Securities Act, the Company covenants that it will file the rep01is required to be filed by it under the Securities Act and Section 13(a) or 15(d) of the Exchange Act and the rules and regulations adopted by the Commission thereunder. If the Company ceases to be so required to file such reports, the Company covenants that it will upon the request of any Holder of Registrable Shares (a) make publicly available such information as is necessary to permit sales pursuant to Rule 144 under the Securities Act, (b) deliver such information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under the Securities Act and it will take such further action as any Holder of Registrable Shares may reasonably request, and (c) take such further action that is reasonable in the circumstances, in each case, to the extent required, from time to time, to enable such Holder to sell its Registrable Shares without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, (ii) Rule 144A under the Securities Act, as such rule may be amended from time to time, or (iii) any similar rules or regulations hereafter adopted by the Commission. Upon the request of any Holder of Registrable Shares, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements (at any time after ninety (90) days after the effective date of the first Registration Statement filed by the Company for an offering of its Common Stock to the general public) and of the Securities Act and the Exchange

 

 

Act (at any time after it has become subject to the reporting requirements of the Exchange Act), a copy of the most recent annual and quarterly report(s) of the Company, and such other reports, documents or stockholder communications of the Company, and take such further actions consistent with this Section 8(a), as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such Registrable Shares without registration.

 

(b)                                          The Company shall cooperate with Whitney in any sale and or transfer of Registrable Securities including by means not involving a registration statement.

 

(c) No Inconsistent Agreements. The Company has not entered into and the Company will not after the date of this Agreement enter into any agreement which is inconsistent with the rights granted to the Holders of Registrable Shares pursuant to this Agreement or otherwise conflicts with the provisions of this Agreement. The rights granted to the Holders hereunder do not and will not for the term of this Agreement in any way conflict with the rights granted to the holders of the Company’s other issued and outstanding securities under any such agreements.

 

(d) Expenses. All Registration Expenses or Sale Expenses of any Holder shall be borne by the Company, whether or not any Registration Statement related thereto becomes effective or other Sale takes place.

 

(e) Amendments and Waivers. The provisions of this Agreement may be amended or waived at any time only by the written agreement of the Company and the Holders of a majority of the Registrable Shares.  Any waiver, permit, consent or approval of any kind or character on the part of any such Holders of any provision or condition of this Agreement must be made in writing and shall be effective only to the extent specifically set fmih in writing. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each Holder of Registrable Shares and the Company.

 

(f)  Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, facsimile or any courier guaranteeing overnight delivery (a) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 8(e) and (b) if to the Company, to Ignite Restaurant Group, Inc., 9900 Westpark Drive, Suite 300, Houston, Texas 77063, Attention: Edward W. Engel (facsimile: (832) 369-7297).

 

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; two (2) Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) and on the next Business Day if timely delivered to an air courier guaranteeing overnight delivery.

 

(g) Successor and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. In addition, Whitney may assign its rights hereunder to subsequent Holders. If any transferee of any Holder shall acquire Registrable Shares, in any manner, whether by operation of law or otherwise, such Registrable Shares shall

 

 

be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Shares such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement, and such person shall be entitled to receive the benefits hereof.

 

(h) Specific Enforcement. Without limiting the remedies available to the Holders, the Company acknowledges that any failure by the Company to comply with its obligations under Section 2 hereof may result in material irreparable injury to the Holders for which there is no adequate remedy at law, that it would not be possible to measure damages for such injuries precisely and that, in the event of any such failure, a Holder may obtain such relief as may be required to specifically enforce the Company’s obligations under Section 2 hereof.

 

(i) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

(j) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(k) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(1) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, I have affixed my signature hereto this          day of May 2012.

 

 

	
 
    	
IGNITE   RESTAURANT GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Jeffrey   L. Rager
    
	
 
    	
Title:
    	
Senior   Vice President and Chief
    
	
 
    	
 
    	
Financial   Officer
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
J.H.   WHITNEY VI, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Zane   Leshner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Richard   P. Bermingham
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
James   W. Kuhn
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
James.   F. Mazany
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Edward   W. Engel
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Ed   McGraw
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Sean   Rea
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Victor   Runge
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Jim   Quinn
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Raymond   Blanchette, III
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Luis   Oliveira
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Robin   Ahearn
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Jeffrey   L. Rager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Ellen   Clarry
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
Jim   Fike
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
John   Gilbert
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Registration Rights Agreement]Exhibit 4.3

 

ECOLAB SAVINGS PLAN AND ESOP

FOR TRADITIONAL BENEFIT EMPLOYEES

ADOPTION

 

Ecolab Inc. adopts the attached Ecolab Savings Plan and ESOP for Traditional Benefit Employees effective as of January 1, 2013.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its authorized officers and its corporate seal to be affixed, on the date written below.

 

Dated:  October 19, 2012

 

	
 
    	
ECOLAB   INC.
    
	
 
    	
 
    
	
(Seal)
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/Daniel J. Schmechel
    
	
 
    	
 
    	
Daniel J. Schmechel
    
	
 
    	
 
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
Attest:
    	
/s/James   J. Seifert
    	
 
    	
 
    
	
 
    	
James   J. Seifert
    	
 
    
	
 
    	
Executive   Vice President, General 
   Counsel and Secretary
    	
 
    
					

 

 

ECOLAB SAVINGS PLAN AND ESOP

FOR TRADITIONAL BENEFIT EMPLOYEES

 

 

ECOLAB SAVINGS PLAN AND ESOP

FOR TRADITIONAL BENEFIT EMPLOYEES

 

Table of Contents

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE 1 DESCRIPTION AND   PURPOSE
    	
1
    
	
 
    	
 
    	
 
    
	
1.1.
    	
Plan Name
    	
1
    
	
1.2.
    	
Plan Description
    	
1
    
	
1.3.
    	
Plan Purposes
    	
1
    
	
1.4.
    	
Transfer from Ecolab Savings Plan
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE 2 ELIGIBILITY
    	
1
    
	
 
    	
 
    	
 
    
	
2.1.
    	
Eligibility
    	
1
    
	
2.2.
    	
Transfer among Participating Employers
    	
2
    
	
2.3.
    	
Multiple Employment
    	
2
    
	
2.4.
    	
Termination or Cessation to be a Qualified Employee
    	
2
    
	
2.5.
    	
Condition of Participation
    	
2
    
	
2.6.
    	
Termination of Participation
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE 3 CONTRIBUTIONS
    	
3
    
	
 
    	
 
    	
 
    
	
3.1.
    	
Elective Deferral Contributions
    	
3
    
	
3.2.
    	
Catch-Up Contributions
    	
4
    
	
3.3.
    	
Matching Contributions
    	
5
    
	
3.4.
    	
Rollovers
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE 4 TRUSTEE’S ACCOUNTS   AND VALUATION
    	
7
    
	
 
    	
 
    
	
4.1.
    	
Establishment of Accounts
    	
7
    
	
4.2.
    	
Valuation and Account Adjustment
    	
8
    
	
4.3.
    	
Allocations Do Not Create Rights
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE 5 PARTICIPANT   INVESTMENT DIRECTION
    	
8
    
	
 
    	
 
    	
 
    
	
5.1.
    	
Establishment of Investment Funds
    	
8
    
	
5.2.
    	
Contribution Investment Directions
    	
9
    
	
5.3.
    	
Transfer Among Investment Funds
    	
10
    
	
5.4.
    	
Investment Direction Responsibility Resides With   Participants
    	
10
    
	
5.5.
    	
Ecolab Stock Fund Rules
    	
10
    
	
5.6.
    	
Voting Ecolab Inc. Stock
    	
11
    
	
5.7.
    	
Special Restrictions
    	
12
    
	
5.8.
    	
Default Investments
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE 6 WITHDRAWALS DURING   EMPLOYMENT AND LOANS
    	
12
    
	
 
    	
 
    
	
6.1.
    	
Non-Hardship Withdrawals
    	
12
    
	
6.2.
    	
Hardship Withdrawals from Elective Deferral Funds
    	
13
    
	
6.3.
    	
Withdrawals from Merged Accounts
    	
14
    
	
6.4.
    	
Rules for Withdrawals
    	
15
    
	
6.5.
    	
Plan Loans
    	
15
    
	
6.6.
    	
ESOP Dividend Distributions
    	
18
    

 

i

 

Table of Contents

(continued)

 

	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 7 VESTING AND FORFEITURES
    	
19
    
	
 
    	
 
    	
 
    
	
7.1.
    	
Vesting
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE 8 DISTRIBUTIONS   AFTER TERMINATION
    	
19
    
	
 
    	
 
    	
 
    
	
8.1.
    	
Distribution Events
    	
19
    
	
8.2.
    	
Form of Distribution
    	
20
    
	
8.3.
    	
Beneficiary Designation
    	
21
    
	
8.4.
    	
Assignment, Alienation of Benefits
    	
22
    
	
8.5.
    	
Payment in Event of Incapacity
    	
22
    
	
8.6.
    	
Payment Satisfies Claims
    	
22
    
	
8.7.
    	
Disposition if Distributee Cannot Be Located
    	
23
    
	
8.8.
    	
Direct Rollovers
    	
23
    
	
8.9.
    	
Minimum Required Distributions
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE 9 CONTRIBUTION   LIMITATIONS
    	
25
    
	
 
    	
 
    	
 
    
	
9.1.
    	
Elective Deferral Contribution Dollar Limitation
    	
25
    
	
9.2.
    	
Earnings on Excess Contributions
    	
25
    
	
9.3.
    	
Aggregate Defined Contribution Limitations
    	
26
    
	
9.4.
    	
Exclusion of Catch-Up Contributions
    	
27
    
	
9.5.
    	
Administrator’s Discretion
    	
27
    
	
 
    	
 
    	
 
    
	
ARTICLE 10 ADOPTION,   AMENDMENT AND TERMINATION
    	
27
    
	
 
    	
 
    	
 
    
	
10.1.
    	
Adoption by Affiliated Organizations
    	
27
    
	
10.2.
    	
Authority to Amend and Procedure
    	
27
    
	
10.3.
    	
Authority to Terminate and Procedure
    	
28
    
	
10.4.
    	
Vesting Upon Termination, Partial Termination or   Discontinuance of Contributions
    	
28
    
	
10.5.
    	
Distribution Following Termination, Partial Termination or   Discontinuance of Contributions
    	
28
    
	
 
    	
 
    	
 
    
	
ARTICLE 11 DEFINITIONS,   CONSTRUCTION AND INTERPRETATIONS
    	
28
    
	
 
    	
 
    
	
11.1.
    	
Account
    	
29
    
	
11.2.
    	
Active Participant
    	
29
    
	
11.3.
    	
Administrator
    	
29
    
	
11.4.
    	
Affiliated Organization
    	
29
    
	
11.5.
    	
After-Tax Savings Contributions
    	
29
    
	
11.6.
    	
After-Tax Savings Contribution Account
    	
29
    
	
11.7.
    	
Before-Tax Savings Contributions
    	
29
    
	
11.8.
    	
Before-Tax Savings Contribution Account
    	
29
    
	
11.9.
    	
Beneficiary
    	
30
    
	
11.10.
    	
Code
    	
30
    
	
11.11.
    	
Company
    	
30
    
	
11.12.
    	
Consent of Spouse
    	
30
    
	
11.13.
    	
Disabled
    	
30
    

 

ii

 

Table of Contents

(continued)

 

	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
11.15.
    	
Ecolab Savings Plan
    	
31
    
	
11.16.
    	
Elective Deferral Contributions
    	
31
    
	
11.17.
    	
Eligible Earnings
    	
32
    
	
11.18.
    	
Eligible Rollover Distribution
    	
32
    
	
11.19.
    	
Employee
    	
33
    
	
11.20.
    	
ERISA
    	
33
    
	
11.21.
    	
ESOP
    	
33
    
	
11.22.
    	
ESOP Account
    	
33
    
	
11.23.
    	
Fund
    	
33
    
	
11.24.
    	
Governing Law
    	
34
    
	
11.25.
    	
Headings
    	
34
    
	
11.26.
    	
Highly Compensated Employee
    	
34
    
	
11.27.
    	
Hour of Service
    	
35
    
	
11.28.
    	
Leased Employee
    	
37
    
	
11.29.
    	
Limitation Year
    	
37
    
	
11.30.
    	
Loan Account
    	
37
    
	
11.31.
    	
Matching Account
    	
37
    
	
11.32.
    	
Matching Contributions
    	
37
    
	
11.33.
    	
Normal Retirement Date
    	
37
    
	
11.34.
    	
Number and Gender
    	
38
    
	
11.35.
    	
Participant
    	
38
    
	
11.36.
    	
Participating Employer
    	
38
    
	
11.37.
    	
Plan
    	
38
    
	
11.38.
    	
Plan Rule
    	
38
    
	
11.39.
    	
Plan Year
    	
38
    
	
11.40.
    	
Profit Sharing Account
    	
38
    
	
11.41.
    	
Profit Sharing Contributions
    	
38
    
	
11.42.
    	
Qualified Employee
    	
38
    
	
11.43.
    	
Required Beginning Date
    	
39
    
	
11.44.
    	
Rollover Account
    	
40
    
	
11.45.
    	
Roth 401(k) Account
    	
40
    
	
11.46.
    	
Roth 401(k) Contribution
    	
40
    
	
11.47.
    	
Section 415 Wages
    	
40
    
	
11.48.
    	
Spouse
    	
41
    
	
11.49.
    	
Termination of Employment
    	
41
    
	
11.50.
    	
Testing Wages
    	
41
    
	
11.51.
    	
Treasury Regulations
    	
42
    
	
11.52.
    	
Trust
    	
42
    
	
11.53.
    	
Trustee
    	
42
    
	
11.54.
    	
Valuation Date
    	
42
    
	
 
    	
 
    	
 
    
	
ARTICLE 12 ADMINISTRATION OF   PLAN
    	
42
    
	
 
    	
 
    	
 
    
	
12.1.
    	
Administrator, Named Fiduciary
    	
42
    
	
12.2.
    	
Compensation and Expenses
    	
42
    

 

iii

 

Table of Contents

(continued)

 

	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
12.3.
    	
Adoption of Rules
    	
43
    
	
12.4.
    	
Administrator’s Discretion
    	
43
    
	
12.5.
    	
Indemnification
    	
43
    
	
12.6.
    	
Benefit Claim Procedure
    	
43
    
	
12.7.
    	
Correction of Errors
    	
44
    
	
12.8.
    	
Reliance on Information
    	
44
    
	
12.9.
    	
Funding Policy
    	
45
    
	
12.10.
    	
Board of Directors Actions
    	
45
    
	
12.11.
    	
Officers
    	
45
    
	
12.12.
    	
Qualified Domestic Relations Order Expenses
    	
45
    
	
 
    	
 
    	
 
    
	
ARTICLE 13 MISCELLANEOUS
    	
46
    
	
 
    	
 
    
	
13.1.
    	
Merger, Consolidation, Transfer of Assets
    	
46
    
	
13.2.
    	
Limited Reversion of Fund
    	
46
    
	
13.3.
    	
Top-Heavy Provisions
    	
47
    
	
13.4.
    	
No Employment Rights Created
    	
49
    
	
13.5.
    	
Priority of Trust Agreement
    	
50
    
	
13.6.
    	
Uniformed Service
    	
50
    
	
13.7.
    	
Limitation on Actions
    	
51
    

 

iv

 

ECOLAB SAVINGS PLAN AND ESOP

FOR TRADITIONAL BENEFIT EMPLOYEES

 

ARTICLE 1
 DESCRIPTION AND PURPOSE

 

1.1.                            Plan Name

 

The name of the Plan is the “Ecolab Savings Plan and ESOP for Traditional Benefit Employees.”

 

1.2.                            Plan Description

 

The Plan is a single plan consisting of a profit sharing portion and stock bonus portion.  The stock bonus portion of the Plan constitutes an employee stock ownership plan within the meaning of Code section 4975(e)(7).  Salary reduction cash or deferred contributions and matching contributions are made to the profit sharing portion of the Plan.  All amounts invested in the Ecolab Stock Fund are transferred to the stock bonus portion of the Plan.  The Plan is intended to qualify under Code section 401(a) and to satisfy the requirements of Code sections 401(k) and 401(m).  It will be a safe harbor plan described in Code section 401(k)(12), and employer matching contributions will satisfy the requirements of Code section 401(m)(11).  Notwithstanding the designation of the Plan as a profit sharing plan, a Participating Employer may make contributions to the Plan even though such employer has no current or accumulated earnings and profits.

 

1.3.                            Plan Purposes

 

The purposes of the Plan are to promote effort and cooperation on the part of participating employees; to provide a measure of economic security to each such employee by accumulating contributions for distribution upon retirement, as a supplement to other resources then available; and to permit participating employees to share in the profits and growth of the Participating Employer.

 

1.4.                            Transfer from Ecolab Savings Plan

 

This Plan is established on January 1. 2013, by transfer of Participants’ interests in the Ecolab Savings Plan.  For all purposes of this Plan, including Participant contribution and investment elections, withdrawals, loans, limitations and other matters, this Plan will be treated as a continuation of the Ecolab Savings Plan, and all activity under the Ecolab Savings Plan will be considered to have occurred under this Plan.

 

ARTICLE 2
 ELIGIBILITY

 

2.1.                            Eligibility

 

(A)                              Each Qualified Employee who is determined by the Plan Administrator, as of December 31, 2012, to be entitled to accrue benefits under the final average pay formula or the 

 

1

 

5% cash balance formula of the Ecolab Pension Plan, by reason of participation in that plan on or before January 1, 2007, will be a Participant in this Plan.

 

(B)                                No other individual will become a Participant.

 

2.2.                            Transfer among Participating Employers

 

A Participant who transfers from one Participating Employer to another Participating Employer as a Qualified Employee will continue to participate in the Plan as a Qualified Employee of such other Participating Employer.  During the Plan Year in which such transfer occurs, the Participant will participate based on his or her separate Eligible Earnings received from each Participating Employer for such Plan Year.

 

2.3.                            Multiple Employment

 

A Participant who is simultaneously employed as a Qualified Employee with more than one Participating Employer will participate in the Plan as a Qualified Employee of all such Participating Employers on the basis of his or her separate Eligible Earnings from each such Participating Employer.

 

2.4.                            Termination or Cessation to be a Qualified Employee

 

No contribution will be made by or on behalf of a Participant after the Participant

 

(A)                              terminates employment with all Participating Employers,

 

(B)                                transfers to an Affiliated Organization that has not adopted the Plan,

 

(C)                                transfers to an employment classification excluded from the definition of “Qualified Employee,” or

 

(D)                               ceases to be a Participant in the Ecolab Pension Plan accruing benefits under the final average pay formula or the 5% cash balance formula,

 

except for any Participating Employer contribution due on account of the portion of the Plan Year preceding the Participant’s termination or transfer.

 

2.5.                            Condition of Participation

 

Each eligible Qualified Employee, as a condition of participation, will be bound by all of the terms and conditions of the Plan and will furnish to the Administrator such pertinent information and execute such instruments as the Administrator may require.

 

2.6.                            Termination of Participation

 

A person will cease to be a Participant as of the date on which his or her employment has terminated and all benefits, if any, to which he or she is entitled under this Plan have been distributed.

 

2

 

ARTICLE 3
 CONTRIBUTIONS

 

3.1.                            Elective Deferral Contributions

 

(A)                              Subject to the limitations of Article 9, for each Plan Year the Participating Employer of each Participant will make Elective Deferral Contributions to the Trust on behalf of such Participant in the amount by which the Participant’s Eligible Earnings have been reduced in accordance with the succeeding provisions of this section.  Elective Deferral Contributions will be paid to the Trustee as soon as administratively practicable after the date on which the Participant would have otherwise received the Eligible Earnings with respect to which such contribution is made.

 

(B)                                Subject to the succeeding provisions of this section, a Participant may elect to reduce his or her Eligible Earnings by any one percent increment from one percent to 50 percent.  The percentage so elected will automatically apply to the Participant’s Eligible Earnings as adjusted from time to time.  A Participant’s election will be applied to his or her Eligible Earnings determined without regard to the limitation of Code section 401(a)(17), but will not, for any Plan Year, exceed the specified maximum percentage of his or her Eligible Earnings determined with regard to such limitation.

 

(C)                                Elections for Eligible Earnings reductions will be made in accordance with the election procedures established by the Administrator and in accordance with the following rules.

 

(1)                                  A Participant’s Eligible Earnings reductions will commence on the first payday that follows the processing of the Participant’s election.  A Participant’s Eligible Earnings reductions will cease as of the end of the month in which the Participant terminates employment, transfers employment to an Affiliated Organization that has not adopted the Plan or transfers employment classification to a classification not covered under this Plan.

 

(2)                                  After such date as the Plan Administrator may prescribe by Plan Rule, a Participant may elect to have any portion or all of his or her future Eligible Earnings reductions designated as Roth 401(k) Contributions.  Such election will remain in effect with respect to all Eligible Earnings reductions until changed by a new Participant election.

 

(3)                                  A Participant may change the rate at which Eligible Earnings reductions will be made for the first payday that follows the processing of the Participant’s request for such a change.  The Participant’s Eligible Earnings reductions will continue at such changed rate until a further change by the Participant is processed.  Any such change must be to a percentage increment allowed under Subsection (B).

 

(4)                                  A Participant may, at any time, elect automatic increases in the rate at which Eligible Earnings reductions will be made.  The increases will occur each Plan Year at the time specified by the Participant.  The rate of the Participant’s Eligible Earnings reductions will continue to increase until the rate reaches the maximum specified by the Participant or the Participant’s election to change or cease such increases 

 

3

 

is processed.  Any such increase must be to a percentage or dollar increment allowed for the initial election.

 

(5)                                  A Participant may suspend Eligible Earnings reductions as of the first payday that follows the processing of the Participant’s request for the suspension.  A Participant who has suspended Eligible Earnings reductions may resume such reductions as of the first payday that follows the processing of the Participant’s request for such resumption.

 

(6)                                  Eligible Earnings reductions for a Participant who has terminated employment, transferred employment to an Affiliated Organization that has not adopted the Plan or transferred employment classification to a classification not covered under this Plan, and who is reemployed with a Participating Employer or transfers to an employment classification that is covered under this Plan, as the case may be, will not be resumed unless the Participant again enrolls in the Plan following the occurrence of such event.

 

(7)                                  Participants on a leave of absence, other than a short-term disability leave or military service leave during which the Participant continues to receive Eligible Earnings, will be deemed to have suspended Eligible Earnings reductions as of the payday which next follows the date on which the Administrator processes the appropriate suspension following receipt of notification of the commencement of the leave of absence.  A Participant’s Eligible Earnings reductions will be resumed upon the Participant’s return from a leave of absence of less than six months’ duration at the rate in effect prior to the leave unless the Participant changes the rate pursuant to paragraph (B).  After a Participant returns from a leave of six months’ duration or more, Eligible Earnings reductions will be resumed as of the first payday that follows the processing of the Participant’s request for such resumption.

 

(8)                                  Participants’ Eligible Earnings reductions may be made only on a continuing payroll period basis and in accordance with Plan Rules.  If any election or notice submitted by a Participant to the Administrator is not processed on a timely basis, no retroactive adjustments shall be made to take into account the effect of any such delay unless required by Treasury Regulations.

 

(9)                                  Elective Deferral Contributions for a Participant who makes a hardship withdrawal pursuant to Section 6.2 will be automatically suspended for the six-month period beginning on the date of the withdrawal distribution.  Following the suspension period the Participant may again elect Eligible Earnings reductions in accordance with this subsection.

 

3.2.                            Catch-Up Contributions

 

(A)                              Each Participant who has attained age 49 before the first day of a taxable year may elect for such taxable year Catch-Up Contributions, which consist of Eligible Earnings reductions and corresponding Elective Deferral Contributions in excess of any of the limitations of Article 9 or of a percentage limitation of Section 3.1.

 

4

 

(B)                                Catch-Up Contributions elected by a Participant for any taxable year may not exceed the lesser of

 

(1)                                  the applicable dollar amount specified in Code section 414(v) and

 

(2)                                  the excess of the Participant’s Eligible Earnings over the amount of other Elective Deferral Contributions made on the Participant’s behalf for such taxable year.

 

(C)                                Catch-Up Contributions will be elected in accordance with the procedures prescribed by the Administrator.

 

(D)                               Catch-Up Contributions will be allocated to the Participant’s Before-Tax Savings Contribution Account or, when permitted under Plan Rules, Roth 401(k) Account in accordance with the Participant’s contribution election.

 

3.3.                            Matching Contributions

 

(A)                              Subject to the limitations of Article 9, each Participating Employer will contribute to the Trust on behalf of each Participant who is a Qualified Employee of such Participating Employer an amount equal to the sum of the following amounts:

 

(1)                                  the amount of Elective Deferral Contributions, including Catch Up Contributions, made for such Participant that does not exceed three percent of such Participant’s Eligible Earnings, and

 

(2)                                  one-half of the amount of the Elective Deferral Contributions, including Catch Up Contributions, made for such Participant that exceeds three percent of such Participant’s Eligible Earnings but does not exceed five percent of such Participant’s Eligible Earnings.

 

(B)                                Matching Contributions for a Participant will be determined for each payroll period on the basis of the Participant’s Eligible Earnings paid and Elective Deferral Contributions, including Catch Up Contributions, made for such payroll period.  All Matching Contributions made with respect to an Elective Deferral Contribution during a calendar quarter will be paid to the Trustee on such date or dates as the Participating Employer may elect not later than the last day of the succeeding calendar quarter.

 

(C)                                As of the end of each Plan Year, each Participating Employer will contribute to the Trust on behalf of each Participant who was a Qualified Employee of such Participating Employer during such Plan Year an additional Matching Contribution equal to the excess, if any, of

 

(1)                                  the Matching Contribution that would have been made on behalf of the Participant had contributions under Subsection (A) been determined on the basis of the Participant’s Elective Deferral Contributions, including Catch Up Contributions, for the entire Plan Year, over

 

5

 

(2)                                  the aggregate Matching Contributions made on such Participant’s behalf pursuant to Subsection (B) for such Plan Year.

 

(D)                               No Matching Contribution will be made with respect to any portion of a Participant’s Elective Deferral Contributions that is forfeited or returned to the Participant pursuant to Article 9.  (For this purpose all such forfeitures and distributions will be deemed to be made first from any Elective Deferral Contributions with respect to which no Matching Contribution was made.)  Any Matching Contribution that is, by reason of errors in projecting the amount of a Participant’s Elective Deferral Contributions or otherwise, allocated to a Participant’s Account and subsequently determined to violate the foregoing provision will be subtracted from such Account as soon as practicable, increased by fund earnings and decreased by fund losses attributable to such Matching Contribution.

 

(E)                                 Matching Contributions will be invested in accordance with the Participant’s most recent investment directions for future contributions.

 

3.4.                            Rollovers

 

(A)                              A Participant may, with the prior consent of the Administrator, contribute to the Trust, within 60 days of receipt,

 

(1)                                  an Eligible Rollover Distribution, excluding after-tax contributions, from a plan qualified under Code section 401(a), an annuity plan under Code section 403(b), an annuity contract under Code section 403(a), or an eligible deferred compensation plan under Code section 457(a) maintained by a governmental employer described in Code section 457 (e)(1)(A); or

 

(2)                                  the balance of an individual retirement account to which the only contributions have been one or more Eligible Rollover Distributions described in clause (1), excluding after-tax contributions.

 

(B)                                Any contribution to the Trust pursuant to Subsection (A) must be made in cash; provided, however, that to the extent and subject to the conditions prescribed by the Administrator, a rollover contribution made in conjunction with a business acquisition may include a Participant’s loans from the prior plan or other in kind assets.

 

(C)                                Any funds received by the Trust under this Section will be credited to the Participant’s Rollover Account.

 

(D)                               After the date Plan Rules permit Participants to elect Roth 401(k) Contributions, the Plan will accept a rollover contribution to a Participant’s Roth 401(k) Rollover Account, but only if it is a direct rollover from another Roth elective deferral account under an applicable retirement plan described in Code section 402A(e)(1) and only to the extent the rollover is permitted under the rules of Code section 402(c).

 

6

 

ARTICLE 4
 TRUSTEE’S ACCOUNTS AND VALUATION

 

4.1.                            Establishment of Accounts

 

The following Accounts will be established and maintained for each Participant in each of the portions of the Plan that constitute a profit sharing plan and the ESOP, a stock bonus plan:  Amounts transferred to the Plan from accounts under the Ecolab Savings Plan will be credited to the account under this Plan corresponding to the account from which they were transferred.

 

(A)                              Before-Tax Savings Contribution Account, to which there will be credited the amount of Elective Deferral Contributions and Catch-Up Contributions other than Roth 401(k) Contributions the Participating Employer has made on the Participant’s behalf.

 

(B)                                Roth 401(k) Account, to which Roth 401(k) Contributions will be credited.  Contributions and withdrawals of Roth 401(k) Contributions will be credited and debited to the Participant’s Roth 401(k) Account.  Gains, losses, and other credits or charges must be separately allocated on a reasonable and consistent basis to the Participant’s Roth 401(k) Account and the Participant’s other Accounts under the Plan.  No amounts other than Roth 401(k) Contributions and properly attributable earnings will be credited to a Participant’s Roth 401(k) Account.

 

(C)                                After-Tax Savings Contribution Account, to which there will be credited the amount of After-Tax Savings Contributions made under prior provisions of the Plan.  Within such Account, contributions made prior to January 1, 1987, and earnings on such contributions will be separately identified.

 

(D)                               Matching Account, to which there will be credited the amount of Matching Contributions made on the Participant’s behalf.

 

(E)                                 Profit Sharing Contribution Account, to which there will be credited Profit Sharing Contributions made prior to March 1, 2002, on the Participant’s behalf under the prior provisions of the Ecolab Savings Plan.

 

(F)                                 Rollover Account, to which there will be credited the amount of any rollover contribution.  Any rollover from a Roth 401(k) account will be separately accounted for.

 

(G)                                Loan Account, in which there shall be evidenced the then outstanding principal and interest amounts due from the Participant to the Trust because of a loan to the Participant.

 

(H)                               One or more additional accounts or subaccounts may be established and maintained for any Participant or group of similarly situated Participants in connections with the merger of another plan into the Plan, in which case, provisions applicable solely to such accounts or subaccounts will be set forth in an amendment to the Plan.

 

(I)                                    To the extent that a Participant elects to invest any of the Participant’s Accounts in the Ecolab Stock Fund, such investment in the Ecolab Stock Fund will be transferred to the Participant’s ESOP Account while so invested.  Any portion of a Participant’s Accounts 

 

7

 

transferred to the Participant’s ESOP Account pursuant to a prior provision of the Plan will remain allocated to the Participant’s ESOP Account except to the extent the Participant elects to transfer the Account out of the Ecolab Stock Fund.

 

4.2.                            Valuation and Account Adjustment

 

As of the close of business on each Valuation Date, each Participant’s Accounts within each investment fund established pursuant to Section 5.1 will be separately adjusted for income, expense, gains and losses of the investment fund since the last prior adjustment in a manner determined by the Administrator to be uniform and equitable.

 

4.3.                            Allocations Do Not Create Rights

 

The fact that allocations are made and credited to the Accounts of a Participant will not vest in the Participant any right, title or interest in or to any portion of the Fund except at the time or times and upon the terms and conditions expressly set forth in the Plan.  Notwithstanding any allocation or credit to the Account of any Participant, the issuance of any statement to the Participant or the distribution of all or any portion of a Participant’s Account balance, the Administrator may direct the Participant’s Account to be adjusted to the extent necessary to correct any error in such Account, whether caused by a misapplication of any provision of the Plan or otherwise, and may recover from the Participant or the Participant’s Beneficiary the amount of any excess distribution.  Any such adjustment will be made within a reasonable time after the error is discovered.

 

ARTICLE 5
 PARTICIPANT INVESTMENT DIRECTION

 

5.1.                            Establishment of Investment Funds

 

(A)                              In order to allow each Participant to determine the manner in which his or her Accounts will be invested, the Trustee will maintain, within the Trust, such separate investment Funds of such nature and possessing such characteristics as the Company may from time to time direct.  Each Participant’s Accounts will be invested in the investment Funds in accordance with the procedures set forth in the succeeding provisions of this article.  Except as provided in Section 5.1(B), the Company or its delegate may, from time to time, direct the Trustee to establish additional investment Funds or to terminate any existing investment Fund.  Investment elections in effect under the Ecolab Savings Plan as of December 31, 2012, will be carried over to this Plan effective as of January 1, 2013, and will remain in effect until changed by the Participant under this Plan.

 

(B)                                Notwithstanding Section 5.1(A), the investment Funds maintained by the Trustee will include the Ecolab Stock Fund, which will be invested exclusively (other than for the purpose of maintaining sufficient liquidity to provide for distributions, withdrawals, and transfers under the Plan) in common stock of Ecolab Inc. without regard to (1) the diversification of assets of the Plan and Trust, (2) the risk profile of Ecolab stock, (3) the amount of income provided by Ecolab stock, or (4) the fluctuation in the fair market value of Ecolab stock, unless the Company or its delegate determines that there is a serious question concerning the short-term viability of 

 

8

 

the Company as a going concern.  The Ecolab Stock Fund is intended as a permanent feature of the Plan.

 

(C)                                Notwithstanding any provision of the Plan or Trust, the Company or its delegate shall be the “named fiduciary” of the Ecolab Stock Fund with sole authority and responsibility for the following duties:

 

(1)                                  to impose any limitation or restriction on the investment of Participant Accounts in the Ecolab Stock Fund;

 

(2)                                  to direct the sale or other disposition of all or any portion of the Ecolab stock held in the Ecolab Stock Fund;

 

(3)                                  to direct the reinvestment of the proceeds from any sale or other disposition of Ecolab stock in short-term cash equivalent investments in the Ecolab Stock Fund, until the Participants redirect the investment of such proceeds;

 

(4)                                  to instruct the Trustee with respect to the foregoing matters; and

 

(5)                                  to communicate with Participants from time to time with respect to the duties listed in this subsection.

 

In exercising the powers set forth in Section 5.1(C), the Company or its delegate will take into account the statement of intent set forth in Section 5.1(B) to the fullest extent permitted by ERISA.  In addition, the Company or its delegate shall evaluate the prudence of maintaining the Ecolab Stock Fund not on the basis of the risk associated with the Ecolab Stock Fund standing alone but in light of the availability of other investment options under the Plan and the ability of Participants to construct a diversified portfolio of investments consistent with their individual desired level of risk and return.

 

5.2.                            Contribution Investment Directions

 

(A)                              Each Participant may direct the manner in which future contributions made by or for him or her will be invested among the Funds established pursuant to Section 5.1, in one percent increments.  Investment selections must be made in the aggregate with respect to all of the Participant’s Accounts, except that a separate investment selection may be made with respect to the investment of a Rollover Contribution, which separate investment selection will apply until the Participant directs a change in the manner in which current Account balances are invested, at which time the Rollover Account shall become subject to the same rules, with respect to investment selections, as the Participant’s other Accounts.  Each such direction will first be made in accordance with the investment selection procedures established by the Administrator in conjunction with the Participant’s enrollment in the Plan or rollover, as the case may be.

 

(B)                                A Participant may direct a change in the manner in which future contributions to his or her Accounts will be invested among the investment Funds.  Such a direction will be subject to the rules set forth in Subsection (A), and will be effective for contributions received by 

 

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the Trustee after the Participant requests such change in accordance with the investment selection procedures established by the Administrator.

 

5.3.                            Transfer Among Investment Funds

 

(A)                              Subject to Subsection (B), a Participant may direct the transfer of his or her Accounts among the investment Funds in any one percent increment of the aggregate of his or her Accounts or in any dollar amount not less than the minimum specified by Plan Rules.

 

(B)                                A Participant’s right to transfer investments will be subject to, and limited by, restrictions imposed by the managers of the investment funds involved in the transfer.

 

(C)                                Each transfer direction will be given effect not later than the close of the first banking business day following the Trustee’s receipt of the Participant’s transfer direction made in accordance with the investment selection procedures established by the Administrator; provided that if the Trustee, for any reason, is unable to complete the transfer by such time, it will complete the transfer as soon as practicable.

 

(D)                               Any transfer from the Ecolab Stock Fund to another investment fund will constitute a transfer out of the Participant’s ESOP Account to the non-ESOP portion of the Plan.

 

(E)                                 A Participant may, in accordance with Plan Rules, direct the investment of his or her Account in specified proportions among two or more of the available investment funds with instructions that, at intervals determined by the Trustee, investment fund transfers will be made, without further direction from the Participant, to rebalance the investment funds in the proportions specified by the Participant.  Such a direction may be cancelled or modified at any time in accordance with Plan Rules.

 

5.4.                            Investment Direction Responsibility Resides With Participants

 

Neither the Administrator nor the Trustee will have any authority, discretion, responsibility or liability with respect to a Participant’s selection of the investment funds in which his or her Accounts will be invested, the entire authority, discretion and responsibility for, and any results attributable to, the selection being that of the Participant.

 

5.5.                            Ecolab Stock Fund Rules

 

(A)                              Each Participant’s Account will be invested in accordance with the Participant’s investment direction.  A Participant may change the investment form of an amount held in an ESOP Account in accordance with the terms of Section 5.3.

 

(B)                                Any proceeds from a tender of Ecolab Inc. stock will be allocated among the Accounts of the Participants and Beneficiaries to which the tendered stock was attributable.  Such proceeds will be held in a subaccount of the Ecolab Stock Fund and invested in the manner prescribed by Plan Rules.

 

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5.6.                            Voting Ecolab Inc. Stock

 

(A)                              Each Participant and Beneficiary with an interest in the Ecolab Stock Fund will be afforded the opportunity to direct the manner in which shares of Ecolab Inc. common stock in the Fund will be voted in connection with all stockholder actions of Ecolab Inc.  In the event of a public tender or exchange offer for shares of common stock of Ecolab Inc., each Participant and Beneficiary will be entitled to direct whether or not the shares in the Fund will be tendered for sale or exchange in connection with such offer.  Solely for purposes of the preceding sentence, each Participant and Beneficiary is designated as a “named fiduciary” within the meaning of section 403(a)(1) of ERISA.  Each Participant’s or Beneficiary’s direction will apply to the number of shares in the Fund that bears the same ratio to the total shares in the Fund as the value of the Participant’s or Beneficiary’s Account investments in the Fund bears to the total value of the Fund.

 

(B)                                The Administrator will, prior to each meeting of Ecolab Inc. stockholders, cause to be furnished to each such Participant and Beneficiary a copy of any proxy solicitation material prepared by Ecolab Inc., together with a form requesting confidential directions on how the shares of Ecolab Inc. stock attributable to the Participant’s or Beneficiary’s Account will be voted on each matter to be brought before such meeting.  The Administrator will use his or her best efforts to ensure that each Participant and Beneficiary receives such information as will be distributed to stockholders of Ecolab Inc. in connection with any public tender or exchange offer for shares of Ecolab Inc. common stock and that each receives instructions for giving confidential directions to the Trustee.

 

(C)                                The Trustee will hold all directions received from Participants and Beneficiaries pursuant to this subsection in strict confidence and will not disclose any such direction to any person, including any officer or employee of the Company or of an Affiliated Organization, except as may be required to allow independent inspectors of election to certify voting results or to satisfy the requirements of law.

 

(D)                               The Trustee will vote the number of full and fractional shares attributable to each Participant’s and Beneficiary’s Account as directed by the Participant or Beneficiary if the direction is received in time for the direction to be processed.  In the case of a public tender or exchange offer, the Trustee will tender the shares attributable to a Participant’s or Beneficiary’s Account if so directed by the Participant or Beneficiary, and will not tender shares attributable to the Account of a Participant or Beneficiary who either directs that such shares not be tendered or does not furnish a timely direction to the Trustee.

 

(E)                                 The Trustee will vote any Ecolab Inc. stock with respect to which it does not receive timely directions so that the proportion of such stock voted in any particular manner on any matter is the same as the proportion of the stock with respect to which the Trustee has received timely directions which is so voted.  If a public tender or exchange offer is made and the Trustee holds any Ecolab Inc. stock that is not attributable to any Participant’s or Beneficiary’s share of the Ecolab Stock Fund, the Trustee will tender a portion of such stock so that the proportion of such stock that is tendered is the same as the proportion of the stock attributable to Participants’ and Beneficiaries’ Accounts for which the Trustee has received instructions is tendered.

 

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5.7.                            Special Restrictions

 

Notwithstanding any contrary provision of this Plan, in the event of significant unanticipated changes in the value or character of any investment fund or of any asset held in a fund, a change of investment manager, record keeper or trustee, or other similar event, the Company may, in its discretion, take such action as it deems necessary to prevent inequities, losses to the Plan or Participants or other adverse consequences or for the proper administration of the Plan and Trust, including but not limited to the following:

 

(a)                                  segregate any assets of an investment fund in a separate fund in which each Participant’s and Beneficiary’s interest is proportionate to his or her interest in the original investment fund and prescribe special rules with respect to such segregated fund;

 

(b)                                 limit or prohibit any withdrawal, loan or transfer from any one or more of the investment funds;

 

(c)                                  limit or prohibit any transfer of funds to or the investment of contributions in any one or more of the investment funds;

 

(d)                                 suspend distributions from the Plan or from any investment fund for a period permitted by law.

 

5.8.                            Default Investments

 

(A)                              If a Participant or Beneficiary fails to give instructions with respect to the investment of his or her Accounts in connection with a change in the Trustee or other termination of an investment Fund in which the Accounts are invested, the Accounts will be invested in the investment Fund or Funds then available under the Plan that the Administrator determines to have investment characteristics most similar to the Fund or Funds in which the Accounts were previously invested.

 

(B)                                If a Participant or Beneficiary fails to give instructions with respect to the investment of a contribution to his or her Accounts, other than the proceeds from a tender of Ecolab Inc. stock, the contribution or proceeds will be invested in the Fund specified by Plan Rules.

 

ARTICLE 6
 WITHDRAWALS DURING EMPLOYMENT AND LOANS

 

6.1.                            Non-Hardship Withdrawals.

 

(A)                              Subject to the provisions of Section 6.4, an Active Participant may withdraw amounts from the Participant’s:

 

(1)                                  After-Tax Savings Contribution Account (For federal income tax purposes, all withdrawals will be deemed to be made from contributions made before 1987 until the aggregate withdrawals equal the After-Tax Savings Contributions made 

 

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before 1987 and then proportionately from the remaining contributions and earnings.); and

 

(2)                                  Rollover Account.

 

(B)                                Subject to the provisions of Section 6.4, an Active Participant who has attained age 59-1/2 may withdraw amounts from the Participant’s:

 

(1)                                  Roth 401(k) Account; or

 

(2)                                  Accounts other than the Roth 401(k) Account.  Withdrawals under this clause will be charged in the following order:  Before-Tax Savings Contribution Account; After-Tax Savings Contribution Account; Rollover Account; Matching Account; and Profit Sharing Account.

 

6.2.                            Hardship Withdrawals from Elective Deferral Funds

 

(A)                              Subject to the provisions of Section 6.4, an Active Participant may withdraw from his or her Before-Tax Savings Contribution and Roth 401(k) Contribution Accounts an amount not in excess of the amount of Elective Deferral Contributions made on the Participant’s behalf on or prior to the date of distribution, reduced by the amount of Elective Deferral Contributions previously distributed from such Accounts, and further reduced by the total outstanding balance of all loans to the Participant charged to such Accounts.  Such withdrawal will be made only if the Administrator determines that the distribution is made on account of an immediate and heavy financial need of the Participant and is necessary to satisfy such financial need.

 

(B)                                The amount subject to withdrawal will include any earnings credited to the Participant’s Before-Tax Savings Contribution Account on or before December 31, 1988, to the extent not previously withdrawn or distributed, and will exclude any Matching Contributions redesignated as Elective Deferral Contributions.

 

(C)                                A distribution will be deemed to be made on account of an immediate and heavy financial need only if the Participant establishes that the withdrawal is made on account of a purpose specified in Treasury Regulations as constituting as deemed financial hardship.  Such purposes include:

 

(1)                                  expenses for medical care, described in section 213(d) of the Code, incurred or to be incurred by the Participant, the Participant’s Spouse, the Participant’s dependent (as described in Code Section 152) or the Participant’s Beneficiary;

 

(2)                                  costs directly related to the purchase (excluding mortgage payments) of a principal residence of the Participant;

 

(3)                                  payment of tuition and related educational expenses for the next year of post-secondary education for the Participant or his or her Spouse, child or other dependent, or the Participant’s Beneficiary;

 

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(4)                                  payments necessary to prevent the eviction of the Participant from his or her principal residence or foreclosure of the mortgage on the Participant’s principal residence;

 

(5)                                  payment of funeral or burial expenses for the Participant’s Spouse, child, parent or dependent or the Participant’s Beneficiary; and

 

(6)                                  payment of expenses of repair of damage to the Participant’s principal residence from storm, fire, flood and similar casualties.

 

(D)                               A distribution will be deemed to be necessary to satisfy the immediate and heavy financial need of the Participant only if the Administrator determines that each of the following requirements is satisfied.

 

(1)                                  The distribution is not in excess of the sum of the amount of the immediate and heavy financial need of the Participant plus, if elected by the Participant, the amount of taxes required to be withheld from the distribution.

 

(2)                                  The Participant has received all withdrawals, has elected distribution of all available dividends under the ESOP, and has taken all nontaxable loans available under all qualified plans maintained by any Affiliated Organization.

 

(3)                                  All Elective Deferral Contributions and all elective deferrals and after-tax employee contributions under any plan maintained by any Affiliated Organization by or on behalf of the Participant will be suspended for a period of at least six months following the date of the distribution.

 

(E)                                 The Administrator’s determination of the existence of a Participant’s financial hardship and the amount that may be withdrawn to satisfy the need created by such hardship will be made in accordance with Treasury Regulations and will be final and binding on the Participant. Such withdrawal distribution will be made as soon as administratively practicable following the Administrator’s determination that a financial hardship exists and will be based on the amount of the balances of the Participant’s Before-Tax Savings Contribution and Roth 401(k) Accounts on the date of the distribution.  The Administrator will not be obligated to supervise or otherwise verify that amounts withdrawn are applied in the manner specified in the Participant’s withdrawal application.

 

6.3.                            Withdrawals from Merged Accounts.

 

If a portion of a Participant’s Account is attributable to a merger of another plan into this Plan and such other plan permitted in-service withdrawals, the rules of the prior plan will continue to apply to such portion of the Accounts.  No withdrawal from the Rollover Account will be made without the consent of the Participant’s Spouse if such account contains any amount transferred directly from a merged plan required by Code section 401(a)(11) to provide annuity distributions.

 

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6.4.                            Rules for Withdrawals

 

(A)                              Except as required under Section 6.3, no Participant may make more than two withdrawals during any Plan Year under this article; provided that this rule will not limit hardship withdrawals under Section 6.2.

 

(B)                                A withdrawal request other than a hardship withdrawal under Section 6.2 may not be made in an amount less than the lesser of Two Hundred Dollars or the balance of the Accounts from which the withdrawal is made.

 

(C)                                No withdrawal from an Account may exceed the balance of such Account reduced by any outstanding loan from the Account.

 

(D)                               A withdrawal distribution will be made only upon the Participant’s application in the manner prescribed by the Administrator.

 

(E)                                 The provisions of Section 8.8 will apply to any withdrawal distribution that constitutes an Eligible Rollover Distribution.

 

(F)                                 Amounts withdrawn will be taken ratably from the investment funds, other than a loan account, in which the Accounts from which the withdrawal is made are invested.

 

6.5.                            Plan Loans

 

(A)                              Each Participant and Beneficiary who is employed by an Affiliated Organization or is otherwise a “party in interest” within the meaning of ERISA is entitled to borrow funds from the Trust, by loan application to the Administrator in the manner prescribed by Plan Rule, subject, however, to the succeeding provisions of this section.  Any loan under the Ecolab Savings Plan will be considered under these provisions to have been made under this Plan.

 

(1)                                  The amount of the loan may not cause the aggregate amount of outstanding loans to the borrower to exceed the lesser of:

 

(a)                                  $50,000, reduced by the excess of

 

(i)                                           the borrower’s highest outstanding loan balance during the 12-month period ending on the date of the loan over

 

(ii)                                        the loan balance outstanding immediately prior to the loan; and

 

(b)                                 50% of the borrower’s vested interest in the Accounts under the Plan on the date of the loan, determined, in the case of a Participant who is actively employed with a Participating Employer, as if the Participant had terminated employment on such date.

 

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(2)                                  The borrower’s outstanding loan balance on a given date will include any loan that is deemed distributed and that has not been repaid, but will not include any loan amount that is repaid by an offset or acceleration of the borrower’s distribution.

 

(3)                                  No individual loan will be made in an amount less than $500.

 

(4)                                  No borrower may have outstanding at any time more than one loan with a maturity date more than five years from the date of the loan or more than one loan with a maturity date five years or less from the date of the loan; provided that this limitation will not prohibit a rollover contribution to the Plan that includes loans exceeding this limitation.

 

(5)                                  No loan will be made to any person who fails to satisfy uniform, commercially reasonable standards, related solely to ability to repay, established by Plan Rules.

 

(6)                                  No loan will be made to a Beneficiary, and the Administrator will not commence processing a Beneficiary’s loan application, prior to the Administrator’s determination of the identity of and amount distributable to such Beneficiary.

 

(B)                                A loan will be charged against the borrower’s Accounts in the order below.

 

(1)                                  Rollover Account;

 

(2)                                  After-Tax Savings Contribution Account;

 

(3)                                  Before-Tax Savings Contribution Account;

 

(4)                                  Profit Sharing Contribution Account;

 

(5)                                  Matching Account; and

 

(6)                                  Roth 401(k) Account.

 

(C)                                No loan will be charged against any contribution type until the funds available for loans in any prior contribution type in such order have been exhausted.  The loan proceeds will be obtained on a substantially pro rata basis from the investment fund or funds in which the Account or Accounts from which the loan is to be made are invested.

 

(D)                               Each loan will bear interest on the unpaid principal balance at the rate charged for a loan for a similar term with similar security by the commercial lending institution designated by the Administrator from time to time as of the first banking day of the last month of the calendar quarter preceding the quarter in which the loan is made.

 

(E)                                 The borrower must execute a form of promissory note that:

 

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(1)                                  Creates in the Trust a valid first lien against one-half of the borrower’s entire right, title and interest in and to his or her Accounts in the Plan as of the date of the loan;

 

(2)                                  Provides for a maturity date not exceeding five years from the date of the loan or, if the Administrator determines at the time the loan is made that the proceeds of the loan are to be used to purchase a house, town home, apartment, condominium or mobile home used, or intended to be used within a reasonable time after the loan is made, as the borrower’s principal residence, not exceeding fifteen years from the date of the loan;

 

(3)                                  Provides for payments of principal and interest in equal installments of such frequency, not less frequently than quarterly, in such minimum amounts and for such maximum period as the Plan Rules prescribe;

 

(4)                                  Provides that upon default in payment or otherwise, and upon the borrower’s death, that (i) the unpaid indebtedness will be accelerated and satisfied from any distribution then due and from the vested balance of the borrower’s Accounts that could then be distributed to the borrower or any Beneficiary with a corresponding reduction in the borrower’s Account balance; and (ii) if any unpaid indebtedness remains, then the entire outstanding balance of the loan will be deemed a distribution as of the last day of the calendar quarter following the calendar quarter in which the required installment payment was due.

 

(F)                                 Each Participant who is employed by a Participating Employer must authorize the Participating Employer to deduct from the Participant’s pay the amount of payments due under the terms of any such loan, and each borrower must provide such documents as may from time to time be required by Plan Rules.

 

(G)                                Each loan will be a loan by the Trust Fund, but for trust accounting purposes the loan will be deemed made from the borrower’s own Accounts, and the note executed by the borrower will be deemed to be an asset of such Accounts.  Upon making a loan, the borrower’s Account or Accounts and the investment fund or funds from which the loan is made will be reduced by an amount equal to the principal balance of the loan, and a Loan Account will be established for the borrower with an initial balance equal to the principal amount of such loan.  All such Loan Accounts will be excluded for purposes of determining and allocating the net earnings (or losses) of the Trust.  A borrower’s repayments of principal and payments of interest will be credited to the Accounts from which the loan proceeds were obtained in reverse of the order in which the loan amount was taken from such Accounts until the amount borrowed from each such Account has been fully replaced by principal repayments.  Upon the Trustee’s receipt of a loan payment, the Loan Account of the borrower will be reduced by the amount of the principal payment credited to such borrower’s Accounts.  Repayments of loan principal and payments of interest will be invested among the investment funds in accordance with the borrower’s most recent investment directions with respect to new contributions under the Plan, but if no contributions are currently being made to the borrower’s Accounts and the borrower does not file a new investment direction, such repayments will be invested in the Fund specified by Plan Rules.

 

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(H)                               The Administrator will establish a means pursuant to which a borrower may make loan repayments by payroll deduction or other periodic payments.  The outstanding balance of any loan, including any accrued interest, may be prepaid at any time prior to the maturity date without penalty, but partial prepayments are not allowed.

 

(I)                                    A loan will not be considered to be in default during a period, not exceeding one year, in which the Participant is on a leave of absence for disability or another reason specified in Plan Rules and does not receive pay (after withholding for income and employment taxes) at least equal to the amount of the installment payments required under the terms of the loan.  The outstanding loan balance may be reamortized over a period not exceeding five years (fifteen years in the case of a home loan) from the original date of the loan, and payments must resume immediately after the leave of absence ends or, if earlier, after the first year of the leave.  Payments, as reamortized, must not be less than those under the terms of the original loan.

 

(J)                                   A Participant who takes a leave of absence for the purpose of performing service in the uniformed services of the United States, within the meaning of Code section 414(u), will not be considered in default on a loan payment solely because payments are not made or are reduced during the period of such service.  The loan payments must resume immediately after the period of uniformed service ends.  The balance of the loan will be payable over the remaining original term, not taking into account the period during which payments were suspended.  The resumed payments must be equal to or greater than those under the terms of the original loan.

 

(K)                               Any fee imposed by the Trustee or another third party for initiating or maintaining a Participant’s loan will be charged against the Participant’s accounts as a special expense of administration.

 

(L)                                 By borrowing from the Trust, the Participant waives any right he or she may have to require the Trustee to produce an original copy of any document related to the loan, including the Participant’s note, and agrees that the Trustee may enforce the Participant’s obligation by producing a copy of any such document produced by microfilm, digital storage or similar method.

 

(M)                            Plan Rules may specify such other terms and conditions as the Administrator may deem necessary or desirable for the administration of loans.

 

6.6.                            ESOP Dividend Distributions.

 

(A)                              Each Participant will elect, in the manner prescribed by the Administrator, whether to receive from the ESOP the dividends paid by the Company to the ESOP with respect to its stock attributable to such Participant’s vested interest in the ESOP.  A Participant who fails to make an election will be deemed to have elected not to receive distribution of such dividends.

 

(B)                                A Participant’s election will be effective with respect to all dividends paid to the ESOP after the date of the election until a new election takes effect.  A Participant may make a new election at any time except during the blackout period designated by the Administrator before and after the date the Company’s dividend is paid.

 

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(C)                                The aggregate amount of dividends received by the ESOP during a calendar year that a Participant has elected to receive will be paid to the Participant in a single lump sum payment following the Company’s last dividend payment of the year, and in all events not later than 90 days after the close of such year.  Notwithstanding the Participant’s election, if the total amount the Participant would receive for a year is less than the minimum dividend distribution amount specified by Plan Rules, the Participant shall be deemed to have elected not to receive distribution of any dividends for such year.

 

(D)                               Dividends received by the Trustee that Participants have elected to receive will be invested in an investment fund specified by Plan Rule pending distribution to Participants following the final dividend payment of the year.  The amount distributed to each Participant shall not be increased by earnings of such investment fund but will be reduced by any investment loss.  Any dividends in such investment fund that are not distributed to a Participant because of the minimum distribution rule will be reinvested in the Ecolab Stock Fund and credited to such Participant’s ESOP Account at the time dividends in such investment account are distributed to Participants.  Any earnings in such investment fund will not be distributed but will be credited to the Participant’s ESOP Account investment in the Ecolab Stock Fund as earnings.

 

(E)                                 To the extent that a Participant does not elect to receive a distribution of dividends paid with respect to the Participant’s ESOP Account, the dividends so paid shall be credited to the Participant’s ESOP Account and reinvested in the Ecolab Stock Fund.

 

(F)                                 A Participant’s election to receive distribution of dividends paid with respect to the Participant’s ESOP Account will become irrevocable with respect to a Company dividend at the time of the election blackout period preceding the dividend payment.  Any distribution made to the Participant following the date an election has become irrevocable will, to the extent it includes dividends to which the election applied, be deemed to constitute a distribution of such dividends.  Such distribution of dividends will not be an Eligible Rollover Distribution.

 

(G)                                No dividends will be distributed from a Participant’s ESOP Account to the extent attributable to the portion of such Account that is not vested.

 

ARTICLE 7
 VESTING AND FORFEITURES

 

7.1.                            Vesting

 

Each Participant will have a fully vested, nonforfeitable interest in each of his or her Plan Accounts.

 

ARTICLE 8
 DISTRIBUTIONS AFTER TERMINATION

 

8.1.                            Distribution Events

 

(A)                              If the aggregate balance of the Participant’s vested interest in his or her Accounts under the Plan at the time of the distribution is not more than $5,000, distribution will be made in a lump sum as soon as practicable following termination of the Participant’s employment and, in 

 

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any event, not later than one year following the end of the Plan Year in which the Participant’s employment terminates.

 

(B)                                If the aggregate balance of the Participant’s vested interest exceeds $5,000, distribution following termination of the Participant’s employment will be made on or as soon as administratively practicable following such date as the Participant elects in accordance with Plan Rules.  If the Participant does not otherwise elect, distribution will be made not later than the earlier of:

 

(1)                                  the sixtieth day following the close of the Plan Year during which there occurs the latest of:

 

(a)                                  the date the Participant terminates employment;

 

(b)                                 the Participant’s Normal Retirement Date; and

 

(c)                                  the tenth anniversary of the Participant’s commencement of participation in the Plan; and

 

(2)                                  April 1 of the calendar year following the calendar year during which the Participant attains the Required Distribution Age.

 

(C)                                A Participant who is entitled to elect the time of distribution may, by written notice to the Administrator, defer distribution to a date not later than April 1 of the calendar year following the calendar year during which the Participant attains the Required Distribution Age.  The notice must be delivered to the Administrator not later than 30 days prior to the date distribution would occur without a deferral election and must specify the date on which and, if more than one form of distribution is available, the form in which, distribution is to be made.

 

(D)                               Any distribution to the Participant’s Beneficiary will be made not later than the last day of the year following the year in which the Participant’s death occurs.

 

(E)                                 Any distribution of the balance of the Participant’s Account attributable to a contribution credited to the Account after distribution of the Account following the Participant’s termination of employment will, unless the Participant otherwise elects in the manner prescribed by the Administrator, be made in the same manner as the original distribution of such Account.

 

8.2.                            Form of Distribution.

 

(A)                              Except as provided in Section 8.9(B)(1), all distributions will be made in a lump sum.

 

(B)                                To the extent that the Participant’s Account is invested in the Ecolab Stock Fund, distribution will be made in shares of Ecolab Inc. common stock or cash, whichever the Participant or Beneficiary, as the case may be, elects; provided that, first, only a whole number of shares may be distributed in kind and the balance of any distribution will be paid in cash; and second, if the Participant or Beneficiary does not make an election, any distribution will be made in cash.

 

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(C)           If the value of the Participant’s Accounts exceeds $1,000 but does not exceed $5,000 and the Participant does not elect another form of distribution, the Accounts will, following notice to the Participant, be distributed as a direct rollover to an individual retirement account selected by the Administrator in accordance with Code section 401(a)(31)(B).

 

8.3.                            Beneficiary Designation

 

(A)          Each Participant may designate, on forms furnished by the Administrator, one or more persons to be primary Beneficiaries or alternative Beneficiaries for all or a specified fractional part of his or her aggregate Accounts and may change or revoke any such designation from time to time.  No such designation, change or revocation will be effective unless executed by the Participant and received by the Administrator during the Participant’s lifetime.  Except as provided in Subsection (D), no such change or revocation will require the consent of any person.

 

(B)           If a Participant

 

(1)           fails to designate a Beneficiary, or

 

(2)           revokes a Beneficiary designation without naming another Beneficiary, or

 

(3)           designates as Beneficiaries one or more persons none of whom survives the Participant,

 

for all or any portion of the Participant’s Accounts, such Accounts or portion will be distributed to the first class of the following classes of automatic Beneficiaries that includes a member surviving the Participant:

 

Participant’s Spouse;

Participant’s Domestic Partner;

Participant’s issue, per stirpes and not per capita;

Representative of Participant’s estate.

 

(C)           When used in this section and, unless the designation otherwise specifies, when used in a Beneficiary designation:  the term “per stirpes” means in equal shares among living children and the issue (taken collectively) of each deceased child, with such issue taking by right of representation; “children” means issue of the first generation; and “issue” means all persons who are descended from the person referred to, either by legitimate birth or legal adoption.  The automatic Beneficiaries specified above and, unless the designation otherwise specifies, the Beneficiaries designated by the Participant, will become fixed as of the Participant’s death so that, if a Beneficiary survives the Participant but dies before the receipt of all payments due such Beneficiary, any remaining payments will be made to the representative of such Beneficiary’s estate.  Any designation of a Beneficiary by name that is accompanied by a description of relationship to the Participant will be given effect without regard to whether the relationship to the Participant exists either at the time the designation is made or at the Participant’s death.  Any designation of a Beneficiary only by statement of relationship to the Participant will be effective only to designate the person or persons standing in such relationship to the Participant at the Participant’s death.  Unless the designation otherwise provides, if two or more beneficiaries are designated and not all of them survive the Participant, the portion to which a deceased

 

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beneficiary would have been entitled will be divided among the surviving beneficiaries in proportion to the share each was designated to receive.  If the designation does not otherwise provide, each beneficiary will be entitled to an equal share.

 

(D)          Notwithstanding Subsection (A), if the Participant and his or her Spouse have been married throughout the one-year period ending on the date of the Participant’s death, no designation of a Beneficiary other than the Participant’s Spouse will be effective unless such Spouse consents to the designation.  Any such consent will be effective only with respect to the Beneficiary or class of Beneficiaries so designated and only with respect to the Spouse who so consented.

 

8.4.                            Assignment, Alienation of Benefits

 

(A)          Except as required under a qualified domestic relations order, by the terms of any loan from the Trust or by an order or settlement described in Code section 401(a)(13), no benefit under the Plan may in any manner be anticipated, alienated, sold, transferred, assigned, pledged, encumbered or charged, and any attempt to do so will be void; and no such benefit will in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of the person entitled to such benefit.

 

(B)           To the extent provided in a qualified domestic relations order, distribution of benefits assigned to an alternate payee by such order may be distributed to the alternate payee prior to the Participant’s earliest retirement age.  An assignment pursuant to a qualified domestic relations order will, unless the order expressly provides otherwise, be given effect as of the account division date specified in the order notwithstanding the death of the Participant or the Alternate Payee prior to actual division of the Account.  Any portion of an Alternate Payee’s Account not distributed prior to his or her death will, except as the order expressly provides otherwise, be paid to the Alternate Payee’s estate as soon as practicable following his or her death.  The terms “qualified domestic relations order,” “alternate payee” and “earliest retirement age” have the meanings given in Code section 414(p).

 

8.5.                            Payment in Event of Incapacity

 

If any person entitled to receive any payment under the Plan is physically, mentally, or legally incapable of receiving or acknowledging receipt of the payment, and no legal representative has been appointed for such person, the Administrator in his discretion may (but will not be required to) cause any sum otherwise payable to such person to be paid to any one or more as may be chosen by the Administrator from the following: the Beneficiaries, if any, designated by such person, the institution maintaining such person, a custodian for such person under the Uniform Transfers to Minors Act of any state or such person’s spouse, children, parents or other relatives by blood or marriage.  Any payment so made will be a complete discharge of all liability under the Plan with respect to any such payment.

 

8.6.                            Payment Satisfies Claims

 

Any payment to or for the benefit of any Participant, legal representative or Beneficiary in accordance with the provisions of the Plan will, to the extent of such payment, be in full satisfaction of all claims against the Trustee, the Administrator and the Participating Employer,

 

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any of whom may require the payee to execute a receipted release as a condition precedent to such payment.

 

8.7.                            Disposition if Distributee Cannot Be Located

 

If the Administrator is unable to locate a Participant or Beneficiary to whom a distribution is due, the Participant’s Accounts will continue to be held in the Fund until such time as the Administrator has located the Participant or Beneficiary or the Participant or Beneficiary makes a proper claim for the benefit, as the case may be.  If the Administrator is unable to locate a person to whom a distribution is required under Section 8.1(C) or Section 8.9 and distribution cannot be made as an automatic direct rollover, the person’s entire Account will be forfeited as of the date such distribution is required to be made.  The Account will be restored and distributed, without any adjustment for interest, earnings or losses, upon a subsequent claim by the person or persons entitled to the Account.  A check issued as a distribution or loan that is not cashed within six months after the date of issue will be cancelled, and the amount of the check will, if the payee has an Account balance, be restored to the Account without interest or, if the payee has no Account balance, be forfeited in accordance with this section.

 

8.8.                            Direct Rollovers

 

(A)          To the extent a distribution is an Eligible Rollover Distribution, the Administrator will, if so instructed by the distributee in accordance with Plan Rules, direct the Trustee to make the distribution to an eligible retirement plan.  The foregoing provision will not apply if the aggregate taxable distributions to be made to the distributee during the calendar year are less than $200 or, if the portion of the distribution to be distributed to the eligible retirement plan is less than $500 and is less than the entire taxable portion of the distribution.

 

(B)           Eligible retirement plan. The term “eligible retirement plan” means—

 

(1)           an individual retirement account described in Code section 408(a),

 

(2)           an individual retirement annuity described in Code section 408(b) (other than an endowment contract),

 

(3)           a Roth IRA described in Code section 408A,

 

(4)           a qualified trust,

 

(5)           an annuity plan described in Code section 403(a),

 

(6)           an eligible deferred compensation plan described in Code section 457(b) which is maintained by an eligible employer described in Code section 457(e)(1)(A), and

 

(7)           an annuity contract described in Code section 403(b).

 

(C)           To the extent the Participant’s Account constitutes a Roth 401(k) Account, a direct rollover will only be made to another Roth elective deferral account under an applicable

 

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retirement plan described in Code section 402A(e)(1) or to a Roth IRA described in Code section 408A, and only to the extent the rollover is permitted Code section 402(c).

 

8.9.                            Minimum Required Distributions

 

(A)          General Rules

 

(1)           The requirements of this section will take precedence over any inconsistent provisions of the Plan.

 

(2)           All distributions required under this section will be determined and made in accordance with the Treasury Regulations under Code section 401(a)(9), including the incidental death benefit rule of Code Section 401(a)(9)(G).

 

(3)           Notwithstanding the other provisions of this section, distributions may be made under a designation made before January 1, 1984, in accordance with section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to section 242(b)(2) of TEFRA.

 

(B)           Time and Manner of Distribution.

 

(1)           If the Participant’s entire interest has not been distributed to the Participant prior to the Participant’s required beginning date, minimum required distributions shall commence as of the Participant’s Required Beginning Date.  The Participant may, at any time after the Required Beginning Date, elect distribution of the balance of his or her account in a single lump sum payment.  Minimum required distributions will be determined as follows.

 

(a)           During the Participant’s lifetime and for the year in which the Participant dies, the minimum amount that will be distributed for each distribution calendar year is:

 

(i)              the quotient obtained by dividing the Participant’s account balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s age as of the Participant’s birthday in the distribution calendar year; or

 

(ii)             if less and if the Participant’s sole designated beneficiary for the distribution calendar year is the Participant’s Spouse, the quotient obtained by dividing the Participant’s account balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s and Spouse’s attained ages as of the Participant’s and Spouse’s birthdays in the distribution calendar year.

 

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(b)           The balance of the Participant’s account will be distributed in a single lump sum not later than the last day of the year following the year in which the Participant’s death occurs.

 

(2)           If the Participant dies before distributions begin, the Participant’s entire interest will be distributed in a single lump sum not later than the last day of the year following the year in which the Participant’s death occurs.

 

(C)           Definitions. The following definitions apply to this section.

 

(1)           Designated beneficiary.  The individual who is the designated beneficiary under section 1.401(a)(9)-4 of the Treasury Regulations.

 

(2)           Participant’s account balance.  The account balance as of the last valuation date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date.  The account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year.

 

ARTICLE 9
 CONTRIBUTION LIMITATIONS

 

9.1.                            Elective Deferral Contribution Dollar Limitation

 

The aggregate amount of Elective Deferral Contributions and other “elective deferrals” (within the meaning of the Code section 402(g)(3)) under any other qualified plan maintained by any Affiliated Organization with respect to a Participant for any taxable year of the Participant may not exceed $15,000 (automatically adjusted for increases in the cost of living in accordance with Treasury Regulations).  If the foregoing limitation is exceeded for any taxable year of the Participant, the amount of Elective Deferral Contributions in excess of such limitation, increased by Fund earnings or decreased by Fund losses attributable to the excess, will be returned to the Participant.  Such distribution may be made at any time after the excess contributions are received, but not later than April 15 of the taxable year following the taxable year to which such limitation relates.  The amount returned to a Participant who has made elective deferrals for the calendar year other than under this Plan or another qualified plan maintained by an Affiliated Organization will, to the extent of such other elective deferrals, be determined in accordance with written allocation instructions received by the Administrator from the Participant not later than March 1 of the taxable year following the taxable year with respect to which the Elective Deferral Contributions were made.

 

9.2.                            Earnings on Excess Contributions

 

(A)          The amount of Fund earnings or losses with respect to the excess amount of contributions returned to a Participant pursuant to the foregoing provisions of this article will be

 

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the sum of the earnings or losses attributable to such excess amount for the Plan Year with respect to which the determination is being made, as determined in accordance with Subsection (B).

 

(B)           The earnings or losses attributable to such excess amount for the Plan Year is the product of the total earnings or losses for the Participant’s Account to which the excess contributions were credited for the Plan Year, multiplied by a fraction, the numerator of which is the excess amount of contributions made on the Participant’s behalf to such Account for the Plan Year, and the denominator of which is the closing balance of such Account for the Plan Year, decreased by the amount of earnings credited to that Account, or increased by the amount of losses debited to that Account, for the Plan Year.

 

9.3.                            Aggregate Defined Contribution Limitations

 

(A)          Notwithstanding any contrary provisions of this Plan, there will not be allocated to any Participant’s Accounts for a Limitation Year any amount that would cause the aggregate “annual additions,” with respect to the Participant for the Limitation Year to exceed the lesser of:

 

(1)           $40,000, as adjusted for increases in the cost-of-living under Code section 415(d); and

 

(2)           100 percent of the Participant’s Section 415 Wages for the Limitation Year.  The compensation limit referred to in this clause will not apply to any contribution for medical benefits after separation from service (within the meaning of Code section 401(h) or 419A(f)(2)) that is otherwise treated as an annual addition.

 

(B)           For purposes of Subsection (A), the “annual additions” with respect to a Participant for a Limitation Year are the sum of:

 

(1)           the aggregate amount of Elective Deferral Contributions and Matching Contributions and forfeitures allocated to the Participant’s Accounts under the Plan for the Limitation Year (excluding any Elective Deferral Contributions in excess of the limitation of Section 9.1 that are distributed to the Participant by the April 15 following the Plan Year to which such contributions relate) and employer contributions, employee contributions and forfeitures allocated to the Participant’s accounts under any other qualified defined contribution plan maintained by any Affiliated Organization for the Limitation Year; plus

 

(2)           the amount, if any, attributable to post-retirement medical benefits that is allocated to a separate account for the Participant as a “key employee” (as defined in Section 13.3(C)), to the extent required under Code section 419A(d)(1).

 

(C)           If the Administrator, in his or her discretion, determines that the limitation under Subsection (A) would otherwise be exceeded:

 

(1)           to the extent necessary to prevent such excess from occurring, the amount of a Participant’s Eligible Earnings reductions and Elective Deferral Contributions will be prospectively reduced; and

 

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(2)           if, in spite of such reductions and as a result of reasonable error in estimating the amount of the Participant’s Eligible Earnings, Elective Deferral Contributions, other elective deferrals within the meaning of Code section 402(g)(3), or Section 415 Wages, the limitation would otherwise be exceeded, then, such excess will be corrected in accordance with Revenue Procedure 2008-50.

 

9.4.                            Exclusion of Catch-Up Contributions

 

Catch-Up Contributions made pursuant to Section 3.2 will be excluded from operation of the limitations of this article.

 

9.5.                            Administrator’s Discretion

 

Notwithstanding the foregoing provisions of this article, the Administrator may, in his or her discretion, apply the preceding provisions of this article in any manner permitted by Treasury Regulations that will cause the Plan to satisfy the limitations of the Code incorporated in such sections, and the Administrator’s good faith application of Treasury Regulations will be binding on all Participants and Beneficiaries.

 

ARTICLE 10
 ADOPTION, AMENDMENT AND TERMINATION

 

10.1.                     Adoption by Affiliated Organizations

 

An Affiliated Organization may adopt this Plan and become a Participating Employer with the prior approval of the Administrator by furnishing a certified copy of a resolution of its Board of Directors adopting the Plan.  Any adoption of the Plan by an Affiliated Organization, however, must either be authorized by the Board of Directors of the Company in advance or be ratified by such Board prior to the end of the fiscal year of such Affiliated Organization in which it adopts the Plan.

 

10.2.                     Authority to Amend and Procedure

 

(A)          The Company reserves the right to amend the Plan at any time, to any extent that it may deem advisable.  Each amendment will be stated in a written instrument, executed in the name of the Company by its authorized officer; with the corporate seal affixed, attested by its Secretary or an Assistant Secretary.  Upon the execution of such instrument, the Plan will be deemed to have been amended as set forth in the instrument, and all Participants and Participating Employers will be bound by the amendment; provided, first, that no amendment will increase the duties or liabilities of the Trustee without its written consent; and, second, that no amendment will have any retroactive effect so as to deprive any Participant, or any Beneficiary of a deceased Participant, of any benefit already accrued, except that any amendment that is required to conform the Plan with government regulations so as to qualify the Trust for income tax exemption may be made retroactively to the date the Plan was established or to any later date.

 

(B)           If the schedule for determining the extent to which benefits under the Plan are vested is changed, whether by amendment or on account of the Plan’s becoming or ceasing to be

 

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a top-heavy plan, each Participant may elect to have his or her vested benefits determined without regard to such change by giving written notice of such election  to the Administrator within the period beginning on the date such change was adopted (or the Plan’s top heavy status changed) and ending 60 days after the latest of (a) the date such change is adopted, (b) the date such change becomes effective or (c) the date the Participant is issued notice of such change by the Administrator or the Trustee.  To the extent provided by Treasury Regulations, if an optional form of benefit payment protected under Code section 411(d)(6) is eliminated, each Participant may elect to have that portion of the value of his or her Accounts that was accrued as of the date of such elimination distributed in the optional form of benefit payment that was eliminated.

 

(C)           The provisions of the Plan in effect at the termination of a Participant’s employment will, except as specifically provided otherwise by a subsequent amendment, continue to apply to such Participant.

 

10.3.                     Authority to Terminate and Procedure

 

The Company expects to continue the Plan indefinitely but reserves the right to terminate the Plan in its entirety at any time.  Each Participating Employer expects to continue its participation in the Plan indefinitely but reserves the right to cease its participation in the Plan at any time.  The Plan will terminate in its entirety or with respect to a particular Participating Employer as of the date specified by the Company or such Participating Employer, as the case may be, to the Trustee in a written notice executed in the manner of an amendment.

 

10.4.                     Vesting Upon Termination, Partial Termination or Discontinuance of Contributions

 

Upon termination of the Plan or upon the complete discontinuance of contributions by all Participating Employers, the Accounts of each Participant who is an Employee of a Participating Employer or another Affiliated Organization will, to the extent funded, vest in full.  Upon a partial termination of the Plan, the Accounts of each Participant as to whom the Plan has been partially terminated will, to the extent funded, vest in full.

 

10.5.                     Distribution Following Termination, Partial Termination or Discontinuance of Contributions

 

After termination or partial termination of the Plan or the complete discontinuance of contributions under the Plan, the Trustee will continue to hold and distribute the Fund at the times and in the manner provided by Article 8 as if such event had not occurred or, if the Administrator so directs in accordance with Treasury Regulations, will distribute to each Participant the entire balance of his or her Accounts.

 

ARTICLE 11
 DEFINITIONS, CONSTRUCTION AND INTERPRETATIONS

 

The definitions and the rules of construction and interpretations set forth in this article will be applied in construing this instrument unless the context otherwise indicates.

 

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11.1.                     Account

 

An “Account” with respect to a Participant is any or all of the accounts maintained on his or her behalf pursuant to Section 4.1, as the context requires.

 

11.2.                     Active Participant

 

An “Active Participant” is a Participant who is a Qualified Employee.

 

11.3.                     Administrator

 

The “Administrator” of the Plan is the Vice President-Human Resources of the Company or the person to whom administrative duties are delegated pursuant to Section 12.1, as the context requires.

 

11.4.                     Affiliated Organization

 

An “Affiliated Organization” is the Company and: any corporation that is a member of a controlled group of corporations (within the meaning of section 1563(a) of the Code without regard to Code sections 1563(a)(4) and 1563(e)(3)(C)) that includes the Company; any trade or business (whether or not incorporated) that is controlled (within the meaning of Code section 414(c)) by the Company; any member of an “affiliated service group” (within the meaning of Code section 414(m)) of which the Company is a member; or any other organization that, together with the Company, is treated as a single employer pursuant to Code section 414(o) and Treasury Regulations; provided, that, for purposes of applying the limitations of Code section 415 in Article 9, Code section 1563(a) will be applied by substituting the phrase “more than 50 percent” for the phrase “at least 80 percent” wherever it appears in such Code section.

 

11.5.                     After-Tax Savings Contributions

 

“After-Tax Savings Contributions” are contributions made by Participants on an after-tax basis under prior provisions of the Ecolab Savings Plan.

 

11.6.                     After-Tax Savings Contribution Account

 

The “After-Tax Savings Contribution Account” is the Account established under Section 4.1 to evidence a Participant’s After-Tax Savings Contributions.

 

11.7.                     Before-Tax Savings Contributions

 

“Before-Tax Savings Contributions” are Elective Deferral Contributions made by Participants pursuant to Section 3.1 that are not Roth 401(k) Contributions.

 

11.8.                     Before-Tax Savings Contribution Account

 

The “Before-Tax Savings Contribution Account” is the Account established under Section 4.1 to evidence a Participant’s Before-Tax Savings Contributions.

 

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11.9.                     Beneficiary

 

A “Beneficiary” is a person designated under the provisions of Section 8.3 as the distributee of benefits payable after the death of a Participant; provided that such a person will not become a Beneficiary, and will have no interest in or rights under the Plan, until the Participant has died.  Solely for purposes of hardship withdrawals, a Participant’s Beneficiary is an individual who is designated at the time of the hardship withdrawal as a primary beneficiary to receive part or all of the Participant’s Account at the Participant’s death.

 

11.10.              Code

 

The “Code” or “Internal Revenue Code” is the Internal Revenue Code of 1986, as amended.  Any reference to a specific provision of the Code will include a reference to such provision as it may be amended from time to time and to any successor provision.

 

11.11.              Company

 

The “Company” is Ecolab Inc. and any successor.

 

11.12.              Consent of Spouse

 

Whenever the consent of a Participant’s Spouse is required with respect to any act of the Participant, such consent will be deemed to have been obtained only if:

 

(a)           the Participant’s Spouse executes a written consent to such act, which consent acknowledges the effect of such act and is witnessed by the Administrator or a notary public; or

 

(b)           the Administrator determines that no such consent can be obtained because the Participant has no Spouse, because the Participant’s Spouse cannot be located, or because of such other circumstances as may, under Treasury Regulations, justify the lack of such consent.

 

Any such consent by the Participant’s Spouse or such determination by the Administrator that such Spouse’s consent is not required will be effective only with respect to the particular Spouse of the Participant who so consented or with respect to whom such determination was made.  Any such consent by the Participant’s Spouse to an act of the Participant under the Plan will be irrevocable with respect to that act.

 

11.13.              Disabled

 

A Participant will be considered to be “Disabled” only if the Administrator determines that, by reason of illness, bodily injury or disease, he or she is entitled to receive disability income benefits under the Ecolab Long Term Disability Plan or, if he or she is not a participant in that plan, under the Social Security Act.

 

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11.14.              Domestic Partner

 

A Participant’s “Domestic Partner” is, as established by such documentation as the Administrator may from time to time request:

 

(A)          an individual of the same gender as the Participant who, as of the Participant’s death, is with the Participant a party to a:

 

(1)           marriage,

 

(2)           civil union,

 

(3)           registered domestic partnership, or

 

(4)           similar, legally-recognized arrangement

 

under the laws of a state or of a jurisdiction outside the United States, which has not been dissolved or revoked; or

 

(B)           an individual of the same or opposite gender as the Participant who, as of the relevant date, is with the Participant a party to a domestic partnership where such individual and the Participant:

 

(1)           are at least 18 years old and legally competent to contract;

 

(2)           are neither married nor a member of another domestic partnership;

 

(3)           are jointly responsible for each other’s well-being and financial obligations;

 

(4)           are not related by blood to a degree that would prohibit their marriage in the state of their residence; and

 

(5)           have lived together in the same principal residence for at least six months and intend to continue to do so indefinitely.

 

11.15.              Ecolab Savings Plan

 

“Ecolab Savings Plan” means the Ecolab Savings Plan and ESOP, from which Participants’ Accounts were transferred when this Plan was established.

 

11.16.              Elective Deferral Contributions

 

“Elective Deferral Contributions” are Before-Tax Savings Contributions and Roth 401(k) Contributions made by a Participant pursuant to Section 3.1.

 

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11.17.              Eligible Earnings

 

(A)          Except as provided below, the “Eligible Earnings” of a Participant for any period are the sum of the amounts paid for that period for service as an Employee as base salary and wages, overtime pay, shift differential premium, commissions, annual incentive bonuses paid in the form of cash (but not long-term incentive bonuses), vacation pay, personal leave pay, “differential wage payment,” as defined in Code section 3401(h), and short-term disability benefits paid by the Participating Employer, increased by the amount of Elective Deferral Contributions made on behalf of the Participant for that period and by the net amount of compensation reductions experienced by the Participant during such Plan Year under any Code section 125 cafeteria plan or Code section 132(f)(4) qualified transportation fringe maintained by the Participating Employer.  Eligible Earnings will not include severance pay, executive perquisite allowance, any remuneration paid after the end of the month following the month in which the Participant’s employment terminated, amounts deferred or paid under an agreement between the Participating Employer and the Participant that is not a plan qualified under Internal Revenue Code Section 401(a), any Matching Contributions or Profit Sharing Contributions, contributions made by the Participating Employer under any other employee benefit plan, or amounts realized by the Participant upon the exercise of a nonqualified stock option, the lapse of restrictions applicable to restricted stock or any disposition of stock acquired under a qualified or incentive stock option.

 

(B)           Notwithstanding Subsection (A), in no event will a Participant’s Eligible Earnings for any Plan Year be taken into account to the extent they exceed $200,000; provided, that the dollar limitation for each Plan Year will be adjusted for cost of living increases to such larger amount as may be in effect for such Plan Year under Code section 401(a)(17).

 

(C)           Notwithstanding Subsection (A), to the extent that a payment in the nature of back pay is required to be included in Eligible Earnings for purposes of this Plan, such payment will be taken into account, in the manner prescribed by the Administrator, as Eligible Earnings for the period or periods in which such payment is made and not for the period to which the back pay may relate.

 

11.18.              Eligible Rollover Distribution.

 

(A)          An “Eligible Rollover Distribution” means any distribution to a Participant, to a Participant’s surviving Spouse or to an Alternate Payee who is the Participant’s Spouse or former Spouse; except that such term does not include:

 

(1)           any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made:

 

(a)           for the life (or life expectancy) of the Participant or the joint lives (or joint life expectancies) of the Participant  and a Beneficiary, or

 

(b)           for a specified period of 10 years or more,

 

(2)           any distribution to the extent it is required by Code section 401(a)(9),

 

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(3)           any elective distribution of Company stock dividends from the ESOP, or

 

(4)           any distribution made on account of the hardship of the Participant.

 

(B)           A portion of a distribution shall not fail to be an Eligible Rollover Distribution merely because the portion consists of after-tax employee contributions that are not includible in gross income.  Such after-tax portion may be transferred only to an individual retirement account or annuity described in section 408(a) or (b) of the Code, a Roth IRA described in Code section 408A, or a qualified defined contribution plan described in section 401(a) or 403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution that is includible in gross income and the portion of such distribution that is not so includible.

 

(C)           “Eligible Rollover Distribution” will include a distribution described in this section that is made to a non-Spouse Beneficiary, but only if the rollover distribution is made in accordance with Code section 402(c)(11) to an individual retirement account or annuity described in Code section 402(c)(8)(B) (i) or (ii) that is identified as an inherited IRA for the Beneficiary.

 

11.19.              Employee

 

An “Employee” is an individual who performs services as a common-law employee for a Participating Employer or another Affiliated Organization.

 

11.20.              ERISA

 

“ERISA” is the Employee Retirement Income Security Act of 1974, as amended.  Any reference to a specific provision of ERISA will include a reference to such provision as it may be amended from time to time and to any successor provision.

 

11.21.              ESOP

 

The “ESOP” is the portion of the Plan constituting an employee stock ownership plan described in Code section 4975.

 

11.22.              ESOP Account

 

The “ESOP Account” includes all Accounts established pursuant to Section 4.1 to evidence those amounts invested in the Ecolab Stock Fund by Participants.

 

11.23.              Fund

 

The “Fund” is the total of all of the assets of every kind and nature, both principal and income, held in the Trust at any particular time or, if the context so requires, one or more of the investment funds described in Section 5.1.

 

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11.24.              Governing Law

 

To the extent that state law is not preempted by provisions of ERISA or any other laws of the United States, this Plan will be administered, construed, and enforced according to the internal, substantive laws of the State of Minnesota, without regard to its conflict of laws rules.  In determining the existence of a particular relationship between two individuals, the Administrator will apply principles of Minnesota law.

 

11.25.              Headings

 

The headings of articles and sections are included solely for convenience.  If there exists any conflict between such headings and the text of the Plan, the text will control.

 

11.26.              Highly Compensated Employee.

 

(A)          If, for any purpose under this Plan, it is necessary to determine which employees are “highly compensated employees” within the meaning of Code section 414(p), a “Highly Compensated Employee” for any Plan Year is any employee of an Affiliated Organization who:

 

(1)           at any time during such Plan Year or the preceding Plan Year, owns or owned (or is considered as owning or having owned within the meaning of Code section 318) more than five percent of the outstanding stock of any Affiliated Organization or stock possessing more than five percent of the total combined voting power of all outstanding stock of any Affiliated Organization; or

 

(2)           during the Plan Year preceding such Plan Year:

 

(a)           received Testing Wages in excess of $80,000 (or such dollar amount, adjusted to reflect increases in the cost of living, as in effect under Code section 414(q)(1)(B) for the calendar year during which the Plan Year in question begins), and

 

(b)           whose Testing Wages exceeded the Testing Wages of at least 80 percent of all employees of the Participating Employer and other Affiliated Organizations, excluding, for purposes of determining the number of employees in such group but not for purposes of determining the specific employees comprising the group, all employees of the Participating Employer and other Affiliated Organizations who:

 

(i)            have completed less than six months of service with the Participating Employer and other Affiliated Organizations;

 

(ii)           normally work fewer than 17-1/2 hours per week for the Participating Employer and other Affiliated Organizations;

 

(iii)          normally work for the Participating Employer and other Affiliated Organizations during not more than six months during any calendar year;

 

34

 

(iv)          have not attained age 21; or

 

(v)           except to the extent provided in Treasury Regulations, are members of a collective bargaining unit subject to an agreement with an Affiliated Organization, and

 

excluding for purposes of determining both the number of employees in such group and the specific employees comprising the group, all of such employees who are non-resident aliens with no income from sources within the United States.

 

(B)           For purposes of this definition, an “employee” is any individual who:

 

(1)           during the Plan Year for which the determination is being made performs services as a common law employee for a Participating Employer or another Affiliated Organization;

 

(2)           is a self-employed individual treated as an employee pursuant to Code section 401(c)(1); or

 

(3)           is a Leased Employee who is treated as an employee of the Company or another Affiliated Organization pursuant to Code section 414(n)(2) or 414(o)(2).

 

11.27.              Hour of Service

 

(A)          Subject to the remaining subsections of this section, the term “Hour of Service,” with respect to an Employee, includes and is limited to:

 

(1)           each “Hour of Actual Service,” which is an hour for which the Employee is paid, or entitled to payment, for the performance of duties for a Participating Employer or another Affiliated Organization;

 

(2)           each hour for which the Employee is paid, or entitled to payment, by a Participating Employer or another Affiliated Organization on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness (including disability), layoff, jury duty, military duty or leave of absence;

 

(3)           each hour for which the Employee is not paid or entitled to payment but which is required by federal law to be credited to the Employee on account of his or her military service or similar duties; and

 

(4)           each hour for which backpay, irrespective of mitigation of damages, is either awarded or agreed to by a Participating Employer or another Affiliated Organization; provided, first, that Hours of Service taken into account under clause (1) or (2) will not also be taken into account under this clause (4); and second, that Hours of Service taken into account under this clause (4) that relate to periods specified in clause (2) will be subject to the rules under Subsection (B).

 

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(B)           The following rules will apply for purposes of determining the Hours of Service completed by an Employee under Subsection (A)(2).

 

(1)           No more than 501 hours will be credited to the Employee on account of any single continuous period during which the Employee performs no duties (whether or not such period occurs in a single Plan Year or other computation period).

 

(2)           No more than the number of hours regularly scheduled for the performance of duties for the period during which no duties are performed will be credited to the Employee for such period.

 

(3)           The Employee will not be credited with hours for which payments are made or due under a plan maintained solely for the purpose of complying with workers’ compensation, unemployment compensation or disability insurance laws, or for which payments are made solely to reimburse medical or medically related expenses.

 

(4)           A payment will be deemed to be made by or due from a Participating Employer or another Affiliated Organization, regardless of whether such payment is made by or due from the Participating Employer or another Affiliated Organization directly or indirectly through a trust fund or insurer to which the Participating Employer or another Affiliated Organization contributes or pays premiums.

 

(5)           If the payment made or due is calculated on the basis of units of time, the number of Hours of Service to be credited will be the number of regularly scheduled working hours included in the units of time on the basis of which the payment is calculated.

 

(6)           If the payment made or due is not calculated on the basis of units of time, the number of Hours of Service to be credited will be equal to the amount of the payment, divided by the Employee’s most recent hourly rate of compensation before the period during which no duties are performed.

 

(C)           Hours of Service will be credited:

 

(1)           in the case of Hours of Service described in Subsection (A)(1), to the computation period in which the duties are performed; provided that if a payroll period spans two such computation periods, the Hours of Service performed in such payroll period will be credited to the computation period within which the payroll period ends;

 

(2)           in the case of Hours of Service described in Subsection (A)(2), to the computation period or periods in which the period during which no duties are performed occurs; provided, that, if the payment is not calculated on the basis of units of time, the Hours of Service will not be allocated between more than the first two computation periods of such period;

 

(3)           in the case of Hours of Service described in Subsection (A)(4), to the computation period or periods to which the award or agreement for backpay pertains.

 

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(D)          For purposes of determining the number of Hours of Service completed by an Employee during a particular period of time, except where this Plan expressly provides otherwise,

 

(1)           subject to Subsection (B), an Employee who is not subject to the overtime provisions of the Fair Labor Standards Act of 1938, as amended, will be credited with 45 Hours of Service for each seven consecutive days, or fraction thereof, during which he or she completes at least one Hour of Service as an Employee;

 

(2)           each other Employee shall be credited with the number of Hours of Service he or she actually completes during such period of time.

 

11.28.              Leased Employee.

 

A “Leased Employee” is any person (other than an employee of an Affiliated Organization) who performs services for an Affiliated Organization (or for the Affiliated Organization and related persons determined in accordance with Code Section 414(n)(6)):

 

(a)           pursuant to an agreement between an Affiliated Organization and any other person;

 

(b)           under the Affiliated Organization’s primary direction or control; and

 

(c)           on a substantially full-time basis for a period of at least one year.

 

11.29.              Limitation Year

 

The Limitation Year is the Plan Year.

 

11.30.              Loan Account

 

The “Loan Account” is the bookkeeping account established pursuant to Section 6.5(G) to reflect the outstanding balance of any loan to the Participant.

 

11.31.              Matching Account

 

The “Matching Account” is the Account established pursuant to Section 4.1 to evidence a Participant’s Matching Contributions.

 

11.32.              Matching Contributions

 

“Matching Contributions” means contributions made pursuant to Section 3.2.

 

11.33.              Normal Retirement Date

 

The “Normal Retirement Date” of a Participant is the date on which he or she attains age 62.

 

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11.34.              Number and Gender

 

Wherever appropriate, the singular number may be read as the plural, the plural may be read as the singular, and the masculine gender may be read as the feminine gender.

 

11.35.              Participant

 

A “Participant” is a current or former Qualified Employee who has satisfied the eligibility requirements of Article 2, following initial hire or rehire, as the case may be, with respect to whom contributions to the Plan have been made and whose Account balances have not yet been fully distributed.

 

11.36.              Participating Employer

 

A “Participating Employer” is the Company and any other Affiliated Organization that has adopted the Plan, or all of them collectively, as the context requires, and their respective successors.  An Affiliated Organization will cease to be a Participating Employer upon a termination of the Plan as to its Employees or upon its ceasing to be an Affiliated Organization.

 

11.37.              Plan

 

The “Plan” is that set forth in this instrument as it may be amended from time to time.

 

11.38.              Plan Rule

 

A “Plan Rule” is a rule adopted by the Administrator by formal instrument, by pronouncement or by practice.  Each Plan Rule will be uniform and nondiscriminatory with respect to similarly situated Employees.

 

11.39.              Plan Year

 

A “Plan Year” is the 12 month period beginning on January 1 of each calendar year and ending on December 31 of such calendar year.

 

11.40.              Profit Sharing Account

 

The “Profit Sharing Account” is the Account established pursuant to Section 4.1 to evidence a Participant’s Profit Sharing Contributions.

 

11.41.              Profit Sharing Contributions

 

“Profit Sharing Contributions” means profit sharing contributions made under prior provisions of the Ecolab Savings Plan.

 

11.42.              Qualified Employee

 

(A)          A “Qualified Employee” is any individual who performs services for a Participating Employer and:

 

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(1)           is classified under the Participating Employer’s payroll practices and procedures as a common-law employee;

 

(2)           any such individual who is a United States citizen or tax resident and who is regularly employed on a full-time, permanent basis in the service of a foreign subsidiary of a Participating Employer, with respect to which subsidiary such Participating Employer has entered into an agreement under Section 3121(1) of the Code, will be deemed to be an Employee of such Participating Employer for the purpose of continuing participation in the Plan, but only if contributions under a funded plan of deferred compensation, which is sponsored by such foreign subsidiary, are not provided for such person by such foreign subsidiary or by any other employer with respect to the remuneration paid to him or her by such foreign subsidiary.

 

(B)           An individual is not a Qualified Employee during any period that the individual is:

 

(1)           rendering services to the Participating Employer pursuant to an agreement between the Participating Employer and a third party;

 

(2)           a person covered by a collective bargaining agreement, for whom retirement benefits were the subject of good faith bargaining between such person’s representative and the Participating Employer, and who is not, as a result of such bargaining, specifically covered by this Plan;

 

(3)           a nonresident alien who receives no earned income (within the meaning of Code section 911(d)(2)) from a Participating Employer that constitutes income from sources within the United States (within the meaning of Code section 861(a)(3));

 

(4)           classified by a Participating Employer as an independent contractor or as any other status in which the person is not classified as a common law employee of a Participating Employer for purposes of withholding of taxes, regardless of the actual status of the individual; or

 

(5)           covered by a contract or other written agreement that provides that the individual is not to be a Participant in this Plan.

 

(C)           No judicial or administrative reclassification, or reclassification by the Participating Employer, of an individual as a common-law employee or otherwise as a Qualified Employee, will be applied to grant retroactive eligibility to any individual under this Plan.

 

11.43.              Required Beginning Date

 

(A)          A Participant’s “Required Beginning Date” is

 

(1)           in the case of a Participant who is a 5% owner, age 70-1/2 or, if later, the date the Participant becomes a 5% owner, or

 

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(2)           in the case of a Participant who is not a 5% owner, the later of age 70-1/2 or the Termination of the Participant’s employment.

 

(B)           For this purpose, a 5% owner is an individual who owns (or is considered as owning within the meaning of Code section 318) more than five percent of the outstanding stock of the Participating Employer or another Affiliated Organization or stock possessing more than five percent of the total combined voting power of all outstanding stock of the Participating Employer or another Affiliated Organization.

 

11.44.              Rollover Account

 

The “Rollover Account” is the Account established pursuant to Subsection (E) of Section 4.1 to evidence the amounts, if any, rolled over from an individual retirement arrangement or another qualified plan.

 

11.45.              Roth 401(k) Account.

 

A “Roth 401(k) Account” is the Account established pursuant to Section 4.1 to evidence Roth 401(k) Contributions made on behalf of a Participant.

 

11.46.              Roth 401(k) Contribution.

 

A “Roth 401(k) Contribution” is an Elective Deferral that is:

 

(A)          designated irrevocably by the Participant at the time of the Elective Deferral election as a Roth 401(k) Contribution; and

 

(B)           treated by the Employer as includible in the Participant’s income at the time the Participant would have received that amount if the Participant had not made an Elective Deferral Contribution election.

 

11.47.              Section 415 Wages

 

(A)          A person’s “Section 415 Wages” for any period is the sum of all remuneration received by such person during such period from a Participating Employer or other Affiliated Organization that constitutes “compensation” within the meaning of Code section 415(c)(3) and Treasury Regulations section 1.415(c)-2, including the amount by which a Participant’s wages or salary is reduced pursuant to a plan under Code section 125, 132(f)(4) or 401(k).  Section 415 Wages will not include severance pay or amounts paid after the later of 2-1/2 months after the Participant’s severance from employment and the end of the Plan Year in which such severance occurs.

 

(B)           The Administrator may, in his or her discretion, for any Plan Year, determine the items of remuneration that, in accordance with Treasury Regulations, will be included in Section 415 Wages for such Plan Year; provided that for each purpose under this Plan, the Administrator’s determination will be uniform throughout any Plan Year.

 

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11.48.              Spouse

 

A Participant’s “Spouse” is the person of the opposite gender as the Participant who, at the relevant time, is married to the Participant under a marriage recognized as valid under the laws of the United States.

 

11.49.              Termination of Employment

 

For purposes of determining entitlement to a distribution under this Plan, a Participant will be deemed to have terminated employment only if he or she has terminated his or her employment relationship with all Participating Employers and other Affiliated Organizations or if he or she becomes Disabled.  Neither transfer of employment among Participating Employers and other Affiliated Organizations nor absence from active service by reason of short-term disability leave or any other leave of absence will constitute a termination of employment.  A Participant’s change in status from an Employee to a Leased Employee will not constitute a termination of employment.  The following rules will apply notwithstanding the preceding sentences.

 

(a)           A Participant who (i) is absent from active service with all Affiliated Organizations by reason of a military leave or (ii) transfers employment on a permanent basis outside of the United States and is not, or ceases to be, a resident alien for tax purposes will be deemed to have terminated employment for such purpose if he or she has attained age 59 1/2.

 

(b)           A Participant who transfers employment on a temporary basis to a foreign subsidiary of a Participating Employer or other Affiliated Organization will be deemed not to have terminated employment.

 

11.50.              Testing Wages

 

(A)          A person’s “Testing Wages” for any period is the sum of all remuneration paid to such person by Participating Employers and other Affiliated Organizations that is reportable in box 1 of Internal Revenue Service Form W-2 or such other amount determined by the Administrator that satisfies the definition of “compensation” under Treasury Regulation section 414(s).

 

(B)           In no event will a person’s Testing Wages for any Plan Year be taken into account to the extent they exceed $200,000, as adjusted for cost-of-living increases in accordance with Code section 401(a)(l7)(B). The cost-of-living adjustment in effect for a calendar year applies to Testing Wages for the determination period that begins with or within such calendar year.

 

(C)           The Administrator may, in its discretion, for any Plan Year, determine the items of remuneration that, in accordance with Treasury Regulations, will be included in Testing Wages for such Plan Year; provided, that for each purpose under this Plan, the Administrator’s determination will be uniform throughout any Plan Year.

 

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11.51.              Treasury Regulations

 

“Treasury Regulations” mean regulations, rulings, notices and other promulgations issued under the authority of the Secretary of the Treasury that apply to, or may be relied upon in the administration of this Plan.

 

11.52.              Trust

 

The “Trust” is that created by the Company, as grantor, for purposes of implementing benefits under the Plan, and may, as from time to time amended, be referred to as the “Ecolab Savings Trust.”

 

11.53.              Trustee

 

The “Trustee” is the corporation and/or individual or individuals who from time to time is or are the duly appointed and acting trustee or trustees of the Trust.

 

11.54.              Valuation Date

 

A “Valuation Date” is each day on which the Trustee and the New York Stock Exchange are open for business.

 

ARTICLE 12
 ADMINISTRATION OF PLAN

 

12.1.                     Administrator, Named Fiduciary

 

The general administration of the Plan and the duty to carry out its provisions will  be vested in the Company, which will be the “named fiduciary” of the Plan for purposes of ERISA.  The Vice President-Human Resources of the Company will perform such duty on behalf of the Company and may delegate all or any portion of such duty to a named person and may from time to time revoke such authority and delegate it to another person.  Each such delegation to a person who is not an employee of the Company will be in writing, and a copy will be furnished to the person to whom the duty is delegated. Such person will file a written acceptance with such Vice President.  Such person’s duty will terminate upon withdrawal of such authority by such Vice President or upon withdrawal of such acceptance by the person to whom the duty was delegated.  Any such withdrawal will be in writing, and will be effective upon delivery of a copy to the person to whom the duty was delegated or to such Vice President, as the case may be.  Any delegation to an employee of the Company will terminate when such person ceases to be an employee or upon its earlier revocation by the Vice President-Human Resources.

 

12.2.                     Compensation and Expenses

 

An employee of a Participating Employer or another Affiliated Organization performing administrative duties in connection with the Plan will receive no compensation from the Fund for such services, but will be entitled to reimbursement from the Fund for all sums reasonably and necessarily expended in the performance of such duties.  The Administrator may retain such independent accounting, legal, clerical and other services as may reasonably be required in the

 

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administration of the Plan and may pay reasonable compensation from the Fund for such services.  Any such reimbursement or compensation and all other costs of administering the Plan will be paid by the Trustee from the Fund except to the extent paid by the Participating Employers.

 

12.3.                     Adoption of Rules

 

The Administrator has the discretionary power to make and enforce such Plan Rules as he or she deems to be required or advisable for the effective administration of the Plan.

 

12.4.                     Administrator’s Discretion

 

The Administrator has the power and discretion to make all determinations necessary for administration of the Plan, except those determinations that the Plan requires others to make, and to construe, interpret, apply and enforce the provisions of the Plan, including the power to remedy ambiguities, inconsistencies, omissions and erroneous account balances.  In the exercise of discretionary powers, the Administrator will treat all similarly situated Participants and Beneficiaries uniformly.

 

12.5.                     Indemnification

 

The Participating Employers jointly and severally agree to indemnify and hold harmless, to the extent permitted by law, each director, officer, and employee of any Affiliated Organization against any and all liabilities, losses, costs and expenses (including legal fees) of every kind and nature that may be imposed on, incurred by, or asserted against such person at any time by reason of such person’s services in connection with the Plan, but only if such person did not act with gross negligence, dishonestly or in bad faith or in willful violation of the law or regulations under which such liability, loss, cost or expense arises.  The Participating Employers will have the right, but not the obligation, to select counsel and control the defense and settlement of any action for which a person may be entitled to indemnification under this provision.

 

12.6.                     Benefit Claim Procedure

 

(A)          The Administrator will notify a Participant in writing, within 90 days of the Participant’s written application for benefits, of the Participant’s eligibility or noneligibility for benefits under the Plan.  If the Administrator determines that a Participant is not eligible for benefits or full benefits, the notice will:

 

(1)           state the specific reasons for the denial of any benefits;

 

(2)           provide a specific reference to the provision of the Plan on which the denial is based;

 

(3)           provide a description of any additional information or material necessary for the claimant to perfect the claim, and a description of why it is needed;

 

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(4)           state that the claimant will be provided, on request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim;

 

(5)           state the claimant’s right to bring a civil action under ERISA Section 502(a) following a continued denial of a claim after appeal review; and

 

(6)           provide an explanation of the Plan’s claims review procedure and other appropriate information as to the steps to be taken if the Participant wishes to have the claim reviewed.  If the Administrator determines that there are special circumstances requiring additional time to make a decision, the Administrator will notify the Participant of the special circumstances and the date by which a decision is expected to be made, and may extend the time for up to an additional 90-day period.

 

(B)           If a Participant is determined by the Administrator not to be eligible for benefits or if the Participant believes that he or she or she is entitled to greater or different benefits, the Participant will be provided the opportunity to have his or her claim reviewed by the Administrator by filing a petition for review with the Administrator within 60 days after the Participant receives the notice issued by the Administrator.  The petition must state the specific reasons the Participant believes he or she or she is entitled to benefits or greater or different benefits.  Within 60 days after the Administrator receives the petition, the Administrator  will give the Participant (and his or her counsel, if any) an opportunity to present his or her position to the Administrator in writing, and the Participant (or his or her counsel) may review the pertinent documents, and the Administrator will notify the Participant of its decision in writing within such 60-day period, stating specifically the basis of the decision written in a manner calculated to be understood by the Participant and the specific provisions of the Plan on which the decision is based.  If because of special circumstances requiring additional time to make a decision, the 60-day period is not sufficient, the decision may be deferred for up to another 60-day period at the election of the Administrator, but notice of this deferral must be given to the Participant.

 

(C)           The same procedure applies to the Beneficiary of a deceased Participant.

 

(D)          A claimant must exhaust the procedure described in this section before pursuing the claim in any other proceeding.

 

12.7.                     Correction of Errors

 

If the Administrator determines that, by reason of administrative error or other cause attributable to a Participating Employer, the Account of any Participant has incurred a loss, the Administrator may enter into an agreement with such Participating Employer under which the Account is fully restored and may, upon such restoration, release the Participating Employer from further responsibility.

 

12.8.                     Reliance on Information

 

(A)          The Administrator and any other person having fiduciary responsibilities under the Plan is entitled to rely upon all tables, valuations, certificates and reports furnished by any

 

44

 

duly appointed independent qualified public accountant (under the terms of ERISA), and upon all opinions given by legal counsel.  The Administrator and any such person will be fully protected in respect of any action taken or suffered in good faith in reliance upon all such tables, valuations, certificates, reports, opinions or other advice.

 

(B)           The Administrator is entitled to rely upon any data or information furnished by a Participating Employer or by a Participant as to age, service or compensation of any person, and as to any other information pertinent to any calculation or determination to be made under the provisions of the Plan and, as a condition to payment of any benefit under the Plan, may request any Participant to furnish such information as the Administrator deems necessary or desirable in administering the Plan.  The Administrator may accept as valid and act in reliance on any communication or instruction that reasonably appears to have been made by the Participant or Beneficiary or by a person authorized to act for the  Participant or Beneficiary.

 

12.9.                     Funding Policy

 

At least annually, the Company will determine the Plan’s funding policy.

 

12.10.              Board of Directors Actions

 

For purposes of this Plan, unless the context otherwise requires, the act of the Board of Directors or its delegate will constitute the act of the Company.  Any action which is required to be taken by the Board of Directors of the Company or which such Board of Directors is authorized to take, may be taken by any committee of such Board of Directors appointed in accordance with the corporation law of the state in which such corporation is incorporated.  The Board of Directors may, by resolution, delegate to the Company’s Benefits Finance Committee, a successor to such committee or the Company’s Chief Financial Officer as the Board deems advisable any one or more of the powers reserved to the Board under the Plan, subject to the revocation of such delegation by the Board at any time.  To the extent that the Board of Directors delegates its authority to direct the Trustee under Article 5, to select an investment manager for the Fund, to select investment Funds, to direct investments within the Fund or to remove or appoint a Trustee, the person or persons to whom such authority is delegated will be a “named fiduciary” within the meaning of section 403(a)(1) of ERISA.

 

12.11.              Officers

 

Any reference to a specific officer of the Company will include a reference to the officer of the Company who succeeds to the relevant functions of such officer if the title or duties of the specific office change.

 

12.12.              Qualified Domestic Relations Order Expenses.

 

Any expenses incurred by the Administrator in connection with a domestic relations order relating to a Participant will be charged against the Participant’s Account.  If any part of a Participant’s Account is assigned to an alternate payee pursuant to a qualified domestic relations order, the expenses not previously charged to the Participant’s Account will, except as the qualified domestic relations order otherwise provides, be charged equally against the Participant’s Account and the portion allocated to the alternate payee; provided that if either

 

45

 

portion of the Account is insufficient to pay the expense so allocated or has been distributed prior to the time the expense is charged, the insufficiency will be charged against the other portion.

 

ARTICLE 13
 MISCELLANEOUS

 

13.1.                     Merger, Consolidation, Transfer of Assets

 

If this Plan is merged or consolidated with, or its assets or liabilities are transferred to, any other plan, each Participant will be entitled to receive a benefit immediately after such merger, consolidation or transfer (if such other plan were then terminated) that is equal to or greater than the benefit he or she would have been entitled to receive immediately before such merger, consolidation or transfer (if this Plan had then terminated).  Any amounts so transferred that were subject to distribution limitations of Code section 401(k)(2)(B) in this Plan will continue to be subject to such limitations in the transferee plan. If any other plan is merged into this Plan, any provisions unique to the Accounts resulting from such merger may be set forth in an exhibit, which will be appended to this instrument.  No such transfer will be made unless the Administrator has determined that the other plan will apply the Code section 401(k) distribution restrictions to the transferred 401(k) accounts.

 

13.2.                     Limited Reversion of Fund

 

(A)          Except as provided in Subsection (B), no corpus or income of the Trust will at any time revert to any Participating Employer or be used other than for the exclusive benefit of Eligible Employees, Participants and Beneficiaries by paying benefits and, if applicable, administrative expenses of the Plan.

 

(B)           Notwithstanding any contrary provision in the Plan:

 

(1)           all contributions made by a Participating Employer to the Trustee prior to the initial determination of the Internal Revenue Service as to qualification of the Plan under section 401(a) of the Code and the tax exempt status of the Trust under Code section 501(a) will be repaid by the Trustee to such Participating Employer, upon the Participating Employer’s written request, if the Internal Revenue Service rules that the Plan, as adopted by that Participating Employer, is not qualified or the Trust is not tax exempt; provided, that the Participating Employer requests such determination within a reasonable time after adoption of the Plan, and the repayment by the Trustee to such Participating Employer is made within one year after the date of denial of qualification of the Plan; and

 

(2)           to the extent a contribution is made by a Participating Employer by a mistake of fact or a deduction is disallowed a Participating Employer under Code section 404, the Trustee will repay the contribution to such Participating Employer upon the Participating Employer’s written request; provided, that such repayment is made within one year after the mistaken payment is made or the deduction is disallowed, as the case may be.  The amount returned to the Participating Employer will not include any investment gains or earnings but will be reduced by any investment losses.  Each contribution to the Plan by a Participating Employer is expressly conditioned on such

 

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contribution’s being fully deductible by the Participating Employer under Code section 404.

 

13.3.                     Top-Heavy Provisions

 

(A)          If the Plan becomes a “top-heavy plan,” the following provisions will apply to, and control the operation and administration of, the Plan for those Plan Years during which the Plan is a top-heavy plan; provided, however, that the top-heavy requirements of this section will not apply in any year beginning after December 31, 2001, in which the Plan consists solely of a cash or deferred arrangement that meets the requirements of Code section 401(k)(12) and matching contributions with respect to which the requirements of Code section 401(m)(11) are met.

 

(1)           Notwithstanding the provisions of Article 3, the amount of contributions (excluding Elective Deferral Contributions) made and allocated for such Plan Year on behalf of each Active Participant who is not a key employee and who is employed with a Participating Employer or another Affiliated Organization on the last day of the Plan Year (whether or not such Participant completed at least 1,000 Hours of Service during the Plan Year), expressed as a percentage of the Participant’s Section 415 Wages for the Plan Year, will be at least equal to the lesser of:

 

(a)           three percent; and

 

(b)           the largest percentage of such Section 415 Wages at which contributions (including Elective Deferral Contributions) are made and allocated on behalf of any key employee for such Plan Year.

 

(2)           If, in addition to this Plan, the Participating Employer or another Affiliated Organization maintains another qualified defined contribution plan or one or more qualified defined benefit pension plans during a Plan Year, the provisions of clause (1) will be applied for such Plan Year:

 

(a)           by taking into account the Participating Employer contributions (other than elective contributions for a non-key employee) on behalf of the Participant under all such defined contribution plans; and

 

(b)           without regard to any Participant who is not a key employee and whose accrued benefit, expressed as a single life annuity, under a defined benefit pension plan maintained by the Participating Employer or another Affiliated Organization for such Plan Year is not less than the product of:

 

(i)              the Participant’s average Section 415 Wages for the period of consecutive years not exceeding the period of consecutive years (not exceeding five) when the Participant had the highest aggregate Section 415  Wages, disregarding years in which the Participant completed less than 1,000 Hours of Service, multiplied by

 

47

 

(ii)             the lesser of (A) two percent per year of service, disregarding years of service beginning after the close of the last Plan Year in which such defined benefit plan was a top heavy plan, or (B) 20 percent.

 

(B)           For purposes of Subsection (A):

 

(1)           The Plan will be a “top-heavy plan” for a particular Plan Year if, as of the last day of the initial Plan Year or, with respect to any other Plan Year, as of the last day of the preceding Plan Year, the aggregate of the Account balances of key employees is greater than 60% of the aggregate of the Account balances of all Participants.  The following rules will apply for purposes of calculating the aggregate Account balances for both key employees and employees who are not key employees.

 

(a)           The present values of accrued benefits and the amounts of account balances of an employee as of the determination date shall be increased by the distributions made with respect to the employee under the Plan and any plan aggregated with the Plan under Code section 416(g)(2) during the 1-year period ending on the determination date.  The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Code section 416(g)(2)(A)(i).  If a distribution is made for a reason other than severance from employment, death, or disability, this provision shall be applied by substituting “5-year period” for “1-year period.”

 

(b)           Amounts transferred or rolled over from a plan not maintained by a Participating Employer or another Affiliated Organization at the initiation of the Participant will be excluded.

 

(c)           The accrued benefits and accounts of any individual who has not performed services for the employer during the 1-year period ending on the determination date shall not be taken into account.

 

(d)           The terms “key employee” and “employee” will include the Beneficiaries of such persons who have died.

 

(2)           Notwithstanding the provisions of clause (1), this Plan will not be a top-heavy plan if it is part of either a “required aggregation group” or a “permissive aggregation group” and such aggregation group is not top-heavy.  An aggregation group will be top-heavy if the sum of the present value of accrued benefits and account balances of key employees is more than 60% of the sum of the present value of accrued benefits and account balances for all Participants, such accrued benefits and account balances being calculated in each case in the same manner as set forth in clause (1).  Each plan in a required aggregation group will be top-heavy if the group is top-heavy.  No plan in a required aggregation group will be top-heavy if the group is not top-heavy.  If a permissive aggregation group is top-heavy, only those plans that are part of an underlying

 

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top-heavy, required aggregation group will be top-heavy. No plan in a permissive aggregation group will be top-heavy if the group is not top-heavy.

 

(3)           The “required aggregation group” consists of (i) each plan of an Affiliated Organization in which a key employee participates, and (ii) each other plan of an Affiliated Organization that enables a plan in which a key employee participates to meet the nondiscrimination requirements of Code sections 401(a)(4) and 410.

 

(4)           A “permissive aggregation group” consists of those plans that are required to be aggregated and one or more plans (providing comparable benefits or contributions) that are not required to be aggregated, which, when taken together, satisfy the requirements of Code sections 401(a)(4) and 410.

 

(5)           For purposes of applying clauses (2), (3) and (4) of this Subsection, any qualified defined contribution plan maintained by a Participating Employer or another Affiliated Organization at any time within the five-year period preceding the Plan Year for which the determination is being made which, as of the date of such determination, has been formally terminated, has ceased crediting service for benefit accruals and vesting and has been or is distributing all plan assets to participants or their beneficiaries, will be taken into account to the extent required or permitted under such clauses and under Code section 416.

 

(C)           The term “key employee” means any employee or former employee (including any deceased employee) who, at any time during the Plan Year that includes the determination date, was an officer of the employer having annual compensation greater than $130,000 (as adjusted under Code section 416(i)(1) for Plan Years beginning after December 31, 2002), a 5-percent owner of the employer, or a 1- percent owner of the employer having annual compensation of more than $150,000.  For this purpose, annual compensation means compensation within the meaning of Code section 415(c)(3).  The determination of key employees will be made in accordance with Code section 416(i)(1) of the Code and Treasury Regulations.

 

(D)          Matching Contributions will be taken into account for purposes of satisfying the minimum contribution requirements of Code section 416(c)(2) and the Plan.  The preceding sentence shall apply with respect to Matching Contributions under the Plan or, if the Plan provides that the minimum contribution requirement shall be met in another plan, such other plan. Matching Contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of Code section 401(m).

 

13.4.                     No Employment Rights Created

 

The establishment and maintenance of the Plan neither give any employee a right to continuing employment nor limit the right of a Participating Employer to discharge any employee or otherwise deal with the employee without regard to the effect such action might have on his or her initial or continued participation in the Plan.

 

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13.5.                     Priority of Trust Agreement

 

If there is any conflict between the provisions of this instrument and the provisions of the agreement governing the Ecolab Savings Trust, the provisions of the trust agreement will take precedence over the provisions of this instrument.

 

13.6.                     Uniformed Service

 

(A)          The provisions of this section apply only to an Employee who is reemployed on or after December 12, 1994 and whose reemployment rights are protected under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) and are intended to comply with the requirements of Code section 414(u).

 

(B)           Notwithstanding any other provisions of the Plan to the contrary, a Qualified Employee who leaves the employ of a Participating Employer for qualified military service and returns to employment with a Participating Employer will be entitled to the restoration of benefits under the Plan which would have accrued but for the Qualified Employee’s absence due to qualified military service.

 

(C)           The following additional rules and conditions apply with respect to qualified military service notwithstanding any contrary provision of the Plan:

 

(1)           an Employee will not be treated as having incurred a Break in Service by reason of his or her qualified military service;

 

(2)           any period of qualified military service will be counted as Vesting Service;

 

(3)           for purposes of determining the Qualified Employee’s Eligible Earnings and Section 415 Wages, the Qualified Employee will be treated as receiving compensation from the Participating Employer with whom he or she was employed immediately before the period of qualified military service during the period of qualified military service in an amount equal to the compensation he or she would have received during such period if he or she were not in qualified military service determined based on the rate of pay the Qualified Employee would have received from the Participating Employer but for the absence due to qualified military service; provided, however, if the compensation the Qualified Employee would have received from the Participating Employer is not reasonably certain, then the Qualified Employee’s rate of compensation will be equal to his or her average compensation for the 12-month period preceding the qualified military service (or, if shorter, the period of employment immediately preceding the qualified military service);

 

(4)           contributions on behalf or by the Qualified Employee will be subject to the limitations in Section 4.1 with respect to the Plan Years to which such contributions relate in accordance with Treasury Regulations;

 

(5)           the Qualified Employee will not be entitled to any crediting of earnings on contributions for any period prior to actual payment to the Trust; and

 

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(6)           the Qualified Employee will not be entitled to restoration of any forfeitures which were not allocated to his or her Account as a result of his or her qualified military service.

 

(D)          For purposes of this section, “qualified military service” means any service in the uniformed services as defined in USERRA by a Qualified Employee who is entitled to reemployment rights with a Participating Employer under USERRA.

 

(E)           The survivors of a Participant who dies while performing qualified military service (as defined in Code section 414(u)) are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) that would have been provided under the Plan had the Participant resumed employment with the Employer and then terminated employment on account of death.

 

13.7.                     Limitation on Actions

 

Notwithstanding any statutory limitations period or conflict of law provision to the contrary, no action with respect to any benefit offered under this Plan may be brought more than one year following the date of mailing or delivery of the decision in the final appeal brought pursuant to the claim and appeal procedure set forth in Section 12.6 of this Plan.

 

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