Document:

EXHIBIT (10.13)

 

ECOLAB SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

(As Amended and Restated Effective January 1, 2011)

 

 

ECOLAB SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(As Amended and Restated Effective as of January 1, 2011)

 

WHEREAS, the Company previously established the Ecolab Supplemental Executive Retirement Plan (the “Plan”) to provide additional retirement benefits in consideration of services performed and to be performed by certain participants for the Company and certain related corporations; and

 

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

 

WHEREAS, before the issuance by the U.S. Treasury and the Internal Revenue Service (the “IRS”) of interpretive guidance with respect to Code Section 409A, the Company amended the Plan to temporarily freeze the accrual of SERP Benefits hereunder as of December 31, 2004; and

 

WHEREAS, the IRS and U.S. Treasury subsequently issued regulations and other guidance regarding the requirements of and compliance with Code Section 409A; and

 

WHEREAS, the Board of Directors of the Company directed and authorized appropriate officers of the Company to amend the Plan to (a) reinstate the accrual of SERP Benefits, effective retroactively as of January 1, 2005 and (b) comply, with respect to the Non-Grand fathered SERP Benefits, with the requirements of Code Section 409 and guidance issued thereunder; and

 

WHEREAS, the Plan was amended and restated in its entirety, effective as of January 1, 2005; and

 

WHEREAS, the Board of Directors of the Company authorized the appropriate officers of the Company to amend the Plan (i) to use the lump sum actuarial factors to determine the annual installment payment amount (including an increase in installment payments that were commenced prior to January 1, 2011), and (ii) to include an actuarial increase in the non-grandfathered portion of any payments that are required to be deferred as a result of the five (5) year redeferral rule to a date that is after the later of Separation from Service or age 62; and

 

WHEREAS, the Plan was amended and restated in its entirety effective as of December 31, 2010; and

 

WHEREAS, the Company wishes to clarify ambiguous language in the Plan document.

 

NOW, THEREFORE, pursuant to Section 1.3 of the Plan and Section 5.1 of the Ecolab Inc. Administrative Document for Non-Qualified Benefit Plans, the Company hereby amends and restates the Plan in its entirety, effective as of January 1, 2011, to read as follows:

 

ARTICLE I

PREFACE

 

Section 1.1            Effective Date.

 

(1)           The effective date of this amended and restated Plan is January 1, 2011.

 

 

(2)           The benefit, if any, payable with respect to a former Executive who Retired or died prior to January 1, 2005 (and who is not rehired by a member of the Controlled Group thereafter) shall be determined by, and paid in accordance with, the terms and provisions of the Plan as in effect prior to January 1, 2005, subject to Sections 1.4 and 3.3(2)(c).  Notwithstanding any provision of the Plan to the contrary, an Executive’s SERP Benefit (which was temporarily frozen from December 31, 2004 through December 31, 2008) shall be retroactively adjusted on January 1, 2009 to reflect the benefit that would have been accrued by the Executive under the Plan, in accordance with Section 3.2, during the period commencing on January 1, 2005 and ending on the earlier of December 31, 2008 or the date on which the Executive terminated his services with the Employers as an employee.

 

Section 1.2            Purpose of the Plan.  The purpose of this Plan is to provide additional retirement benefits for certain management and highly compensated employees of the Company who perform management and professional functions for the Company and certain related entities.

 

Section 1.3            Administrative Document.  This Plan includes the Ecolab Inc. Administrative Document for Non-Qualified Benefit Plans (the “Administrative Document”), which is incorporated herein by reference.

 

Section 1.4            American Jobs Creation Act of 2004 (AJCA).

 

(1)           To the extent applicable, it is intended that the Plan (including all Amendments thereto) comply with the provisions of Code Section 409A, as enacted by the American Jobs Creation Act of 2004, P.L. 108-357 (the “AJCA”), so as to prevent the inclusion in gross income of any amount of SERP Benefit accrued hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise be actually distributed or made available to the Executives.  The Plan shall be administered in a manner that will comply with Code Section 409A, including regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto (collectively with the AJCA, the “409A Guidance”).  All Plan provisions shall be interpreted in a manner consistent with the 409A Guidance.

 

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

 

(3)           Notwithstanding any provision of the Plan, any Grandfathered SERP Benefits (including any Pre-Retirement SERP Benefits attributable thereto) shall continue to be governed by the law applicable to nonqualified deferred compensation prior to the addition of Section 409A to the Code and shall be subject to the terms and conditions specified in the Plan as in effect prior to January 1, 2005, except as otherwise provided herein.  Notwithstanding any provision of the Plan to the contrary, neither the Company nor the Administrator guarantee to any Executive or Death Beneficiary any specific tax consequences of participation in or entitlement to or receipt of benefits from, the Plan, and each Executive or the Executive’s Death Beneficiary shall be solely responsible for payment of any taxes or penalties incurred in connection with his participation in the Plan.

 

ARTICLE II

DEFINITIONS

 

Words and phrases used herein with initial capital letters which are defined in the Pension Plan or the Administrative Document are used herein as so defined, unless otherwise specifically defined herein or the context clearly indicates otherwise.  The following words and phrases when used in this Plan

 

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with initial capital letters shall have the following respective meanings, unless the context clearly indicates otherwise:

 

Section 2.1            “Actuarial Equivalent” or “Actuarially Equivalent.”  A benefit is the “Actuarial Equivalent” of another benefit if, on the basis of Actuarial Factors, the present values of such benefits are equal.

 

Section 2.2            “Actuarial Factors” shall mean the actuarial assumptions set forth in Exhibit A which is attached to and forms a part of this Plan.

 

Section 2.3            “Cash Balance Participant” shall mean an Executive for whom a Retirement Account is maintained under the Pension Plan.

 

Section 2.4            “Death Beneficiary.”

 

The term “Death Beneficiary” shall mean the beneficiary designated under this Plan and the Mirror Pension Plan.  The designation of a Death Beneficiary may be made, and may be revoked or changed only by an instrument (in form prescribed by Administrator) signed by the Executive and delivered to the Administrator during the Executive’s lifetime.  If the Executive is married on the date of his death and has been married to such spouse throughout the one-year period ending on the date of his death, his designation of a Death Beneficiary other than, or in addition to, his spouse under the Plan shall not be effective unless such spouse has consented in writing to such designation.  Any Mirror Pension Benefits remaining to be paid after the death of a Death Beneficiary (or a contingent Death Beneficiary, to the extent designated by the Executive) shall be paid to the Death Beneficiary’s estate.  If no Death Beneficiary is designated by the Executive or all the designated Death Beneficiaries predeceased the Executive, the Executive’s Death Beneficiary shall be his spouse, and if there is no surviving spouse, then the Executive’s estate.  The most recent Death Beneficiary designation on file with the Administrator will be given effect, and in the event of conflicting forms files simultaneously under this Plan and Mirror Pension Plan, the Death Beneficiary designation under this Plan will govern.

 

Section 2.5            “Disability” or “Disabled” shall mean any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Executive to be unable to perform the duties of his position of employment or any substantially similar position of employment.

 

Section 2.6            “Executive” shall mean an Employee who is an elected corporate officer of an Employer and who is selected by the Administrator to participate in the Plan or such other Employee who is selected by the Chief Executive Officer of the Company to participate in the Plan.

 

Section 2.7            “Final Average Compensation” shall mean the average of an Executive’s Annual Compensation (as defined in the Administrative Document but as modified by the next sentence) for the five (5) consecutive Plan Years of employment with the Employers preceding the date on which the Executive terminated his services with all Employers as an employee or death (including the year in which the Executive so terminated his service or death) which yields the highest average compensation.  Notwithstanding the foregoing, for purposes of calculating the Final Annual Compensation of a Disabled Executive, the rules applicable for determining the Final Annual Compensation for persons who accrue benefits under the Final Average Compensation formula specified in Section 4.6 of the Pension Plan shall apply.  If an Executive has been employed by the Employers for a period of less than five (5) Plan Years preceding the date on which the Executive terminated his services with all Employers or death, Final Average Compensation shall be calculated using the Executive’s total period of employment with the Employers (calculated using complete months of employment).

 

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Section 2.8            “Grandfathered SERP Benefit” shall mean the portion of an Executive’s SERP Benefit that is deemed to have been deferred (within the meaning of the 409A Guidance) under the Plan before January 1, 2005 and that is equal to the present value as of December 31, 2004 of the vested SERP Benefit to which the Executive would be entitled under the Plan, as in effect on October 3, 2004, if the Executive voluntarily terminated employment with the Controlled Group without cause on December 31, 2004 and received a payment, on the earliest possible date allowed under the Plan, of his SERP Benefit in the form with the maximum value.  A Grandfathered SERP Benefit shall be increased in subsequent years to equal the present value of the benefit the Executive actually becomes entitled to receive, in the form and at the time actually paid, determined under the terms of the Plan as in effect on October 3, 2004, without regard to any services rendered or Compensation increases applicable after December 31, 2004.

 

Section 2.9            “Mirror Pension Benefit” shall mean one-twelfth (l/12th) of the annual total benefit payable to an Executive under the Ecolab Mirror Pension Plan calculated on a single life annuity basis commencing at age 65, as determined by the Administrator.

 

Section 2.10          “Non-Grandfathered SERP Benefit” shall mean any SERP Benefit that is not a Grandfathered SERP Benefit.

 

Section 2.11          “Pension Benefit” shall mean one-twelfth (1/12th) of the annual total pensions paid or payable to the Executive under any pension plan (other than the Ecolab Savings Plan, as such plan may be amended from time to time) sponsored by a member of the Controlled Group which satisfies the qualification requirements of the Code calculated on a single life annuity basis commencing at age 65, as determined by the Administrator including (a) projected payments from any former pension plan or former profit sharing plan which reduces the pension payable under the Pension Plan, or (b) payments of Retirement Account benefits under the Pension Plan.

 

Section 2.12          “Plan” shall mean this Ecolab Supplemental Executive Retirement Plan, as it may be amended from time to time.

 

Section 2.13          “Primary Insurance Amount” shall mean the monthly primary social security benefit to which the Executive will be entitled at age 65, determined in accordance with Exhibit B which is attached to and forms a part of this Plan.

 

Section 2.14          “Retirement” or “Retired.”  The Retirement of an Executive shall occur upon his termination of employment for any reason other than death or Disability on or after (1) his attainment of age 55 and the completion of at least 10 Years of Eligibility Service, or (2) his attainment of age 65.  For purposes of determining Retirement under this Plan, the employment of a Disabled Executive shall be deemed to have terminated “for reasons other than Disability” twelve months after the Executive becomes Disabled, provided he does not resume active employment with the Controlled Group before such date.

 

Section 2.15          “Savings Plan Benefit” shall mean the benefit payable to the Executive calculated as of July 1, 1994 in accordance with Exhibit C which is attached to and forms a part of this Plan.

 

Section 2.16          “Separation from Service” or to “Separate from Service” shall mean any termination of employment with the Controlled Group due to retirement, death, disability or other reason; provided, however, that no Separation from Service is deemed to occur while the Executive (1) is on military leave, sick leave, or other bona fide leave of absence that does not exceed six (6) months (or, in the case of Disability, twelve (12) months), or if longer, the period during which the Executive’s right to reemployment with the Controlled Group is provided either by statute or by contract, or (2) continues to perform services for the Controlled Group at an annual rate of fifty percent (50%) or more of the average

 

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level of services performed over the immediately preceding 36-month period (or the full period in which the Executive provided services (whether as an employee or as an independent contractor) if the Executive has been providing services for less than 36 months).  With respect to the terms of the Plan affecting Non-Grandfathered SERP Benefits, any reference to “termination of employment” in the Plan shall mean Separation from Service as defined in this Section.  Whether an Executive has incurred a Separation from Service shall be determined in accordance with the 409A Guidance.

 

Section 2.17          “SERP Benefit” shall mean the retirement benefit determined under Article III.

 

Section 2.18          “SERP Pre-Retirement Benefit” shall mean the pre-retirement benefit determined under Article IV.

 

Section 2.19          “Specified Employee” shall mean “Specified Employee” as defined in the Administrative Document.

 

Section 2.20          “Year of Benefit Service.”

 

(1)           An Executive shall be credited with one Year of Benefit Service for each year of “Credited Service” (or such other defined term which is used to determine service for benefit accrual purposes) as defined by and credited to the Executive under the Pension Plan.  Notwithstanding the foregoing, for purposes of calculating Years of Benefit Service for a Cash Balance Participant, the rules applicable for determining Credited Service under the Pension Plan for persons who accrue benefits under the Final Average Compensation formula specified in Article 4 of the Pension Plan shall apply.

 

(2)           A Disabled Executive shall continue to accrue Years of Benefit Service during the period of twelve months following the date on which he becomes Disabled for purposes of determining the amount of his SERP Benefit hereunder.

 

(3)           In no event shall an Executive’s Years of Benefit Service under the Plan exceed thirty (30) years.

 

Section 2.21          “Year of Eligibility Service.”

 

(1)           An Executive shall be credited with one Year of Eligibility Service for each year of “Continuous Service” (or such other defined term which is used to determine service for vesting purposes) as defined by and credited to the Executive under the Pension Plan.

 

(2)           A Disabled Executive shall continue to accrue Years of Eligibility Service during the first twelve months of his Disability for purposes of determining his vested interest in of his SERP Benefit hereunder.

 

Section 2.22          “Year of Past Service Credit” means the excess, if any, of the thirty (30) Years of Benefit Service required to earn the maximum SERP Benefit hereunder over the number of Years of Benefit Service it would be possible for the Executive to accumulate by his attainment of age 65 or, if later, the date of his Retirement.

 

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ARTICLE III
 SERP BENEFITS

 

Section 3.1            Participation.

 

(1)           Commencement of Participation.  Any Employee who as of the Effective Date is a participant in the Plan, shall continue to participate, subject to Subsection (2).  Any other Employee shall become a participant in the Plan as of the first date on or after the Effective Date on which he is an Executive.

 

(2)           Termination of Participation.  An Executive shall cease to be a participant in the Plan on the earliest to occur of (a) the date the Executive ceases to be employed by the Controlled Group or dies before becoming vested in his SERP Benefit, or (b) the date on which the Executive’s SERP Benefit is distributed from the Plan.

 

Section 3.2            Amount of SERP Benefits.  Each vested Executive shall, upon termination of employment (Separation from Service with respect to the Non-Grandfathered SERP Benefit), be entitled to a SERP Benefit which shall be determined as hereinafter provided.

 

(1)           The SERP Benefit shall be a monthly retirement benefit payable in the form of a fifteen-year (15) certain benefit commencing upon the Executive’s attainment of age 65 equal to the sum of (a) and (b), where:

 

(a)   =                 one-twelfth (1/12th) of the Executive’s Final Average Compensation, multiplied by two percent (2%) for each of the Executive’s Years of Benefit Service (up to a maximum of thirty (30)), reduced by (i) the Pension Benefit, (ii) the Mirror Pension Benefit, (iii) fifty percent (50%) of the Primary Insurance Amount, and (iv) the Savings Plan Benefit; and

 

(b)   =                 the difference between (i) one-twelfth (1/12th) of the Executive’s Final Average Compensation, and (ii) one-twelfth (1/12th) of the Executive’s Annual Compensation for the Plan Year in which the Executive commenced employment with the Controlled Group, such difference multiplied by one percent (1%) for each of the Executive’s Years of Past Service Credit (if any).

 

(2)           For purposes of Subsection (l)(b)(ii), if the Executive was not an Employee for the entire Plan Year, his Annual Compensation for such Plan Year shall be annualized based on the number of days employed by the Controlled Group out of a Plan Year of 365 days.

 

(3)           Notwithstanding anything in this Section 3.2 to the contrary, in no event will any Executive’s SERP Benefit be less than such Executive’s Grandfathered SERP Benefit.

 

(4)           Notwithstanding the foregoing provisions of this Section 3.2, the SERP Benefit shall be frozen as of December 31, 2020.  In connection with the freezing of benefit accruals under the SERP as of December 31, 2020, in applying the formula in Section 3.2(1), an Executive’s Final Average Compensation, Years of Benefit Service, Pension Benefit, Mirror Pension Benefit, Primary Insurance Amount and Savings Plan Benefit will each be determined as of December 31, 2020 (or if earlier, as of the Executive’s termination of employment (Separation from Service with respect to the Non-Grandfathered SERP Benefit)).

 

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Section 3.3            Time of Payment.

 

(1)           Grandfathered SERP Benefit.  The provisions of this Section 3.3(1) shall apply solely with respect to the portion of an Executive’s SERP Benefit that is a Grandfathered SERP Benefit.  Payment of any portion of an Executive’s SERP Benefit that is a Non-Grandfathered SERP Benefit shall be made in accordance with Section 3.3(2).

 

(a)           In General.  An Executive’s SERP Benefit shall be paid or commence to be paid within 90 days after the later of the date the Executive attains age 65 or the date of the Executive’s Retirement.  Notwithstanding the foregoing, if payment at such time is prevented due to reasons outside of the Administrator’s control, the SERP Benefits shall commence to be paid as soon as practicable after the end of such 90-day period, and the first payment hereunder shall include any SERP Benefits not paid as a result of the delay in payment.

 

(b)           Early Commencement.  Notwithstanding the provisions of Subsection (1)(a) of this Section, upon the written request of the Executive (on a form prescribed by the Administrator) which is filed with the Administrator prior to the Executive’s termination of employment with the Controlled Group because of involuntary termination, death or Disability or at least one (1) year prior to the Executive’s voluntary Retirement, the Administrator may, in its complete and sole discretion, commence payment of the SERP Benefits to the Executive at a specified date which is after the Executive’s Retirement but prior to the Executive’s attainment of age 65; provided, however, that the amount of the SERP Benefit shall be reduced by one/two hundred and eightieth (1/280th) for each month that the date of the commencement of the SERP Benefits precedes the date on which the Executive will attain age 62.

 

(2)           Non-Grandfathered SERP Benefits.  The provisions of this Section 3.3(2) shall apply solely with respect to the portion of an Executive’s vested SERP Benefit that is a Non-Grandfathered SERP Benefit.  Payment of any portion of an Executive’s SERP Benefit that is a Grandfathered SERP Benefit shall be made in accordance with Section 3.3(1).

 

(a)           In General.  Except as provided in subsection (b), an Executive’s vested Non-Grandfathered SERP Benefit shall be paid or commence to be paid on the first day of the third month following the month in which occurs the later of the date on which the Executive (i) attains age 55 or (ii) Separates from Service, subject to Section 3.3(2)(d), and Section 3.4(2)(d) (as applicable).  The amount of any such SERP Benefit paid before the Executive’s attainment of age 65 shall be reduced by one/two hundred and eightieth (l/280th) for each month that the date of the commencement of the SERP Benefits precedes the date on which the Executive will attain age 62.

 

(b)           Cash Balance Participant.  A Cash Balance Participant’s Non-Grandfathered SERP Benefit shall be paid or commence to be paid on the first day of the third month following the month in which the Executive Separates from Service, subject to Section 3.3(2)(d) and Section 3.4(2)(d) (as applicable).

 

(c)           Certain Transition Distributions to Terminated Executives.

 

(i)            An Executive who Separated from Service after December 31, 2004 and before December 31, 2008 and has commenced payments of his Grandfathered SERP Benefits at any time before December 31, 2008, shall receive his Non-Grandfathered SERP Benefit (if any), for which the Executive’s SERP Benefit is retroactively adjusted pursuant to Section 1.1 on January 1, 2009, in the same form and at the same time as the

 

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Executive’s Grandfathered benefit, subject to Section 3.3(2)(d).  Notwithstanding the foregoing, a Cash Balance Participant’s Non-Grandfathered SERP Benefit shall be paid on March 1, 2009, subject to Section 3.3(2)(d).

 

(ii)           An Executive who Separated from Service after December 31, 2004 and before December 31, 2008 and has not before December 31, 2008 commenced payments of his Non-Grandfathered SERP Benefit, shall receive his Non-Grandfathered SERP Benefit, for which the Executive’s SERP Benefit is retroactively adjusted pursuant to Section 1.2 on January 1, 2009, in a single lump sum on March 1, 2009.

 

(d)           Payment Delay for Specified Employees.  Notwithstanding any provision of the Plan, payments to a Specified Employee shall be made or commence on the first day of the month coincident with or immediately following the latest of (i) the date specified in Section 3.3(2)(a), (b) or (c), (ii) the date specified in Section 3.4(2)(d)(i), if the Executive made an election pursuant to such section, or (iii) the date that is six (6) months after the Specified Employee’s Separation From Service; provided, however, that if the Executive dies before the date specified in (i), (ii) or (iii), the Executive’s benefit shall be paid or commence on the date specified in Section 4.2.  The first payment made to the Specified Employee following the 6-month delay shall include any SERP Benefit payments that were not made as a result of the delay in payment pursuant to this paragraph (d), with interest at an annual rate of five percent (5%) compounded annually.  Notwithstanding the foregoing, this paragraph (d) shall not apply to any Executive if on the date of his Separation from Service, the stock of the Company and Controlled Group members is not publicly traded on an established securities market (within the meaning of the 409A Guidance).

 

(e)           Actuarial Adjustment for Delay on Account of Election Under Section 3.4(2)(d)(i).  If an Executive’s election under Section 3.4(2)(d)(i) delays the commencement of benefits beyond the later of the Executive’s Separation from Service or the date on which the Executive attains age 62, then such benefit will be actuarially increased using the Actuarial Factors for lump sum calculations, as in effect on the date the benefit payments were originally scheduled to be paid or commenced to be paid, provided, however, in no event will the interest rate exceed seven and one-half percent (71⁄2%).

 

Section 3.4            Form of Payment.

 

(1)           Grandfathered SERP Benefit.  The provisions of this Section 3.4(1) shall apply solely with respect to the portion of an Executive’s SERP Benefit that is a Grandfathered SERP Benefit.

 

(a)           In General.  An Executive who does not want his SERP Benefit to be paid in the form of the 15-year certain benefit described in Section 3.2 may elect to receive his SERP Benefit in any of the optional forms of benefit payment which are permitted under the Pension Plan.  Any such optional form of benefit shall be the Actuarial Equivalent of the SERP Benefit payable to the Executive in the form specified in Section 3.2.

 

(b)           Lump Sum Payment.

 

(i)            Notwithstanding the provisions of Subsection (l)(a) of this Section, an Executive may elect to receive the SERP Benefit in the form of a single lump sum payment.

 

(ii)           The lump sum payment described in paragraph (b)(i) of this Subsection shall be calculated by converting the Executive’s SERP Benefit (calculated in accordance

 

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with the provisions of Section 3.2) at the time of the commencement of such Benefit into a lump sum amount of equivalent actuarial value when computed using the Actuarial Factors specified in Exhibit A for this purpose, and then applying the ten percent (10%) reduction, if applicable, provided for in Subsection (c) of this Section.

 

(iii)          Notwithstanding any provision of the Plan to the contrary, in the event the equivalent actuarial value of the Executive’s SERP Benefit, when computed using the Actuarial Factors specified in Exhibit A for this purpose, does not exceed $25,000, such Benefit shall be paid in the form of a single lump sum payment.

 

(c)           Form/Timing of Election.  Any election of an optional form of benefit must be in writing (on a form provided by the Administrator) and filed with the Administrator prior to the Executive’s termination of employment with the Controlled Group because of involuntary termination, death or Disability or at least one (1) year prior to the Executive’s voluntary Retirement.  Any such election may be changed at any time and from time to time without the consent of any existing Death Beneficiary or any other person (except as described in Section 2.2), by filing a later signed written election with the Administrator; provided that any election made less than one (1) year prior to the Executive’s voluntary Retirement shall not be valid, and in such case, payment shall be made in accordance with the latest valid election of the Executive.  Notwithstanding the foregoing, an Executive shall be permitted to make an election to receive his SERP Benefit in the form of a lump sum payment within the one (1) year period prior to his voluntary termination if (and only if) the amount of the SERP Benefit payable to the Executive is reduced by ten percent (10%).

 

(2)           Non-Grandfathered SERP Benefits.  The provisions of this Section 3.4(2) shall apply solely with respect to the portion of an Executive’s SERP Benefit that is a Non-Grandfathered SERP Benefit.

 

(a)           Normal Payment Form.  Unless an Executive makes an election pursuant to Section 3.4(2)(b) or (e), the Executive’s Non-Grandfathered SERP Benefit will be paid to the Executive in the form of annual installment payments payable over a period often (10) years, the amount of which is Actuarially Equivalent to the SERP Benefit calculated under Section 3.2.

 

(b)           Optional Forms of Benefit.  In lieu of the normal form of payment, an Executive may make or change an election to receive his Non-Grandfathered SERP Benefit in one of the following Actuarially Equivalent optional forms of benefit:

 

(i)            A single life annuity payable monthly to the Executive during the Executive’s life and ending on the date of the Executive’s death.

 

(ii)           A reduced joint and survivor annuity payable monthly to the Executive during the Executive’s life, and after the Executive’s death, payable monthly to the Executive’s spouse who survives the Executive in the amount equal to 50%, 75% or 100% (as the Executive elects) of such reduced lifetime monthly amount.

 

(iii)          A reduced life and period certain annuity payable monthly to the Executive during the Executive’s life, with payment thereof guaranteed to be made for a period of five (5) or ten (10) years, as elected by the Executive, and, in the event of the Executive’s death before the end of such 5- or 10- year period, payable in the same reduced amount for the remainder of such 5- or 10-year period, to the Death Beneficiary designated by the Executive.

 

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(iv)          Annual installment payments payable to the Executive over a period of five (5) or ten (10) years, as elected by the Executive.

 

(v)           A single lump sum payment.

 

(c)           Mandatory Lump Sum.  Notwithstanding any provision of the Plan to the contrary, in the event that the present value of the Executive’s Non-Grandfathered SERP Benefit does not exceed $25,000 at the time of distribution, such Non-Grandfathered SERP Benefit shall be paid in the form of a single lump sum payment on the date of distribution determined under Section 3.3(2).

 

(d)           Election of Optional Form of Payment.  An election of an optional form of payment must be in writing (on a form provided by the Administrator) and must satisfy the following requirements:

 

(i)            Except as provided in Section 3.4(2)(e), if an Executive wishes to elect an optional form of payment under Section 3.4(2)(b) above (other than the normal form of payment) or wishes to change his election made under Section 3.4(2)(e) (other than an election change described in Section 3.4(2)(d)(ii)), the election must be filed with the Administrator at least twelve (12) months before the Executive’s Separation from Service.  The most recent election on file with the Administrator (that was filed at least twelve (12) months before the Executive’s Separation from Service and that remains on file with the Administrator as of the date of Separation from Service) shall be given effect and become irrevocable on the date of the Executive’s Separation from Service.  No election filed less than twelve (12) months before the Executive’s Separation from Service shall have any force or effect, except as provided in Section 3.4(2)(d)(ii).  The payment pursuant to an election made under this Section 3.4(2)(d)(i) shall be made or commence on the first day of the month coincident with or immediately following the fifth anniversary of the original commencement date specified in Section 3.3(2)(a) or (b) (as applicable).

 

(ii)           An Executive who elected, pursuant to Section 3.4(2)(d)(i) or 3.4(2)(e), a life annuity form of payment (within the meaning of the 409A Guidance) described in Section 3.4(2)(b)(i), (ii) or (iii), may, at any time before the date of Separation from Service, change that annuity form of payment to an Actuarially Equivalent life annuity form of payment, provided the commencement date for such annuity, as specified in, respectively, Section 3.4(2)(d)(i) or Section 3.4(2)(e), remains unchanged.

 

(e)           Transition Elections.  Notwithstanding any provision of the Plan, any Executive who is an active employee of the Company or a member of the Controlled Group during the election period designated by the Administrator, ending no later than December 31, 2008, may make an election to receive his Non-Grandfathered SERP Benefit in one of the optional forms specified in Section 3.4(2)(b), commencing on the date specified in Section 3.3(2)(a) or(b) (as applicable); provided, however, that such election shall not apply if the Executive Separates from Service on or before December 31, 2008 and is subject to the provision of Section 3.3(2)(c).  The transition election must be made in writing, on a form provided by the Administrator and filed with the Administrator within the designated transition election period.  The transition election made pursuant to this paragraph (e) may not cause any amount to be paid in 2008 if not otherwise payable and may not delay payment of any amount that is otherwise payable in 2008.

 

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(f)            Coordination of Payment Elections with Mirror Pension Plan.  If an Executive is also a participant in the Mirror Pension Plan, the Executive’s Non-Grandfathered Mirror Pension Benefit and the Non-Grandfathered SERP Benefit will be paid in the same form and at the same time.  If an Executive makes an election of an optional payment form pursuant to Section 3.4(2)(b) of the Plan or Section 3.3(2)(b) of the Mirror Pension Plan, the most recent election filed with the Administrator under either this Plan or the Mirror Pension Plan at least twelve (12) months before the Separation from Service (or, if applicable, at a date specified in paragraph (d)(ii) of this Subsection) that remains on file with the Administrator on the date of Separation from Service will govern the form and time of payment under the Plan.  In the event of conflicting election forms filed simultaneously under this Plan and the Mirror Pension Plan, the election filed under this Plan shall govern.

 

Section 3.5             Death After Commencement of Non-Grandfathered SERP Benefits.  If an Executive dies after commencing payment of his Non-Grandfathered SERP Benefit under the Plan but before his entire Non-Grandfathered SERP Benefit is distributed, payments to the Executive’s Death Beneficiary (if any) will be made (a) in accordance with the elected optional form of payment described in Section 3.4(2)(b)(ii) or (iii) (if elected), or (b) ninety (90) days after the Executive’s death in the form of a single lump sum, calculated using the Actuarial Factors in effect on the date of distribution, if the Executive elected one of the optional forms of payment described in Section 3.4(b)(iv).

 

Section 3.6             Adjustment to Annual Installment Payments Commencing Prior to January 1, 2011.  If payment of an Executive’s Non-Grandfathered SERP Benefit commenced after January 1, 2005 but prior to January 1, 2011 in the form of annual installment payments over a period of five (5) or ten (10) years, then

 

(1)           The Executive’s annual installment payments will be recalculated as of the original payment commencement date using the Plan’s Actuarial Factors for lump sum calculations and any increase in the amount of each such installment will be paid as follows:

 

(a)           The increase in the annual installments that were payable prior to January 1, 2011 will be paid in a single lump sum amount during the calendar quarter beginning January 1, 2011 and ending March 31, 2011; and

 

(b)           Each annual installment due on or after January 1, 2011 will be adjusted to include the increase resulting from the recalculation.

 

ARTICLE IV
 SERP PRE-RETIREMENT BENEFITS

 

Section 4.1             Eligibility.  The Death Beneficiary of an Executive who dies after becoming vested in his SERP Benefits (including the Death Beneficiary of an Executive who dies while he is Disabled) but prior to commencing to receive SERP Benefits hereunder shall be entitled to receive the SERP Pre-Retirement Benefits described in Section 4.2 in lieu of any other benefits described in the Plan.

 

Section 4.2             Amount, Form and Timing of SERP Pre-Retirement Benefits.

 

(1)           Grandfathered SERP Benefit.  A Death Beneficiary who is eligible for a SERP Pre-Retirement Benefit hereunder shall receive the portion of such SERP Pre-Retirement Benefit that is based on the Executive’s Grandfathered SERP Benefit in accordance with this Subsection (1).  The SERP Pre-Retirement Benefit that is based on the Executive’s Grandfathered SERP Benefit shall be calculated in accordance with, and payable at the same time and (except as provided in Section 3.4(l)(b)) in the same

 

11

 

manner as, the pre-retirement death benefits and (if applicable) the optional death benefits described in the Pension Plan, as determined by the Administrator.  Notwithstanding the foregoing, the Death Beneficiary of a Cash Balance Participant who is eligible for a SERP Pre-Retirement Benefit, shall receive such Benefit in the form of a lump sum payment.

 

(2)           Non-Grandfathered SERP Benefit.  A Death Beneficiary who is eligible for a SERP Pre-Retirement Benefit hereunder shall receive the portion of such SERP Pre-Retirement Benefit that is based on the Executive’s vested Non-Grandfathered SERP Benefit as follows.

 

(a)           If an Executive (i) is not married on the date of his death, (ii) has been married for less than one year prior to his death and designates a Death Beneficiary other than his spouse, or (iii) has been married for at least one year prior to his death and the Executive’s spouse consents to the Executive’s designation of a Death Beneficiary other than the spouse, the Executive’s Death Beneficiary shall receive his benefit in an amount Actuarially Equivalent to the survivor benefit determined as if the Executive had Separated from Service on the earlier of the date of his actual Separation from Service or the date of his death, elected to receive his Non-Grandfathered SERP Benefit in the form of a monthly life annuity with (A) a five (5) year certain survivor benefit if the Executive had Separated from Service before attaining age 55, or (B) a ten (10) year certain survivor benefit, if the Executive had attained age 55 while an Employee, had survived to age 55 and had died immediately following his payment commencement date.  The Non-Grandfathered SERP Pre-Retirement Benefit shall be paid in the form of an Actuarially Equivalent single lump sum payment on the first day of the third month after the later of the date on which the Executive would have attained age 55 or the date of the Executive’s death.

 

(b)           If an Executive who dies after becoming vested in his SERP Benefit is married on the date of his death and paragraph (a) does not apply to him, then the Executive’s surviving spouse shall receive the SERP Pre-Retirement Benefit as follows:

 

(i)            If the Executive had Separated from Service before attaining age 55, the Executive’s spouse shall receive a reduced annuity payable monthly to the Executive’s spouse during his life, commencing on the first day of the third month following the later of the date on which the Executive would have attained age 55 or the date of the Executive’s death and ending on the date of the Executive’s spouse’s death, calculated as if the Executive had Separated from Service on the earlier of the date of the Executive’s death or actual Separation from Service, elected a joint and 50% survivor annuity form of payment described in Section 3.4(2)(b)(ii), survived to age 55 and died on the date following the payment commencement date.

 

(ii)           If the Executive had attained age 55 while an Employee, the Executive’s spouse shall receive a reduced annuity payable monthly to the Executive’s spouse during his life, commencing on the first day of the of the third month after the date of the Executive’s death, calculated as if the Executive had died immediately after commencing payments in the form of an immediate joint and 100% survivor annuity form of payment described in Section 3.4(2)(b)(ii).

 

(c)           Notwithstanding the foregoing, (i) if the SERP Pre-Retirement Benefit under this Subsection (2) is payable to a Cash-Balance Participant, such benefit will be distributed to the Executive’s Death Beneficiary in the form of an Actuarially Equivalent single lump sum 90 days after the Executive’s death, and (ii) if the present value of the SERP Pre-Retirement Benefit under this Subsection (2) payable to any Executive not described in (i) does not exceed $25,000, such benefit will be distributed to the Executive’s Death Beneficiary in the form of an Actuarially

 

12

 

Equivalent single lump sum on the first day of the third month following the later of the date on which the Executive would have attained age 55 of the date of the Executive’s death.

 

ARTICLE V

VESTING

Section 5.1             Vesting.

 

(1)           In General.  Except as provided in Subsections (2) and (3) of this Section, an Executive shall become vested in the SERP Benefits upon (a) his attainment of age 65 while in the employ of the Controlled Group, (b) his attainment of age 55 while in the employ of the Controlled Group and his completion of 10 Years of Eligibility Service, or (c) his attainment of age 55 during the first twelve-month period of his Disability and his completion of 10 Years of Eligibility Service.

 

(2)           Forfeiture Provision.

 

(a)           Notwithstanding the provisions of Subsection (1) hereof, but subject to the requirements of paragraph (b) of this Subsection, the Employers shall be relieved of any obligation to pay or provide any future SERP Benefits or SERP Pre-Retirement Benefits under this Plan and shall be entitled to recover amounts already distributed if, without the written consent of the Company, the Executive, whether before or after termination with the Controlled Group (i) participates in dishonesty, fraud, misrepresentation, embezzlement or deliberate injury or attempted injury, in each case related to the Company or a Controlled Group member, (ii) commits any unlawful or criminal activity of a serious nature, (iii) commits any intentional and deliberate breach of a duty or duties that, individually or in the aggregate, are material in relation to the Executive’s overall duties or (iv) materially breaches any confidentiality or noncompete agreement entered into with the Company or a Controlled Group member.  The Employers shall have the burden of proving that one of the foregoing events have occurred.

 

(b)           Notwithstanding the foregoing, an Executive shall not forfeit any portion of his SERP Benefits or SERP Pre-Retirement Benefits under paragraph (a) of this Subsection unless (i) the Executive receives reasonable notice in writing setting forth the grounds for the forfeiture, (ii) if requested by the Executive, the Executive (and/or the Executive’s counsel or other representative) is granted a hearing before the full Board of Directors of the Company (the “Board”) and (iii) a majority of the members of the full Board determine that the Executive violated one or more of the provisions of paragraph (a) of this Subsection.

 

(3)           Acceleration of Vesting.  Notwithstanding the provisions of Subsection (1) hereof, the SERP Benefits of the Executives (a) who are employed by the Controlled Group on the date of a Change in Control or (b) whose employment with the Company was terminated prior to a Change in Control but the Executive reasonably demonstrates that the termination occurred at the request of a third party who has taken steps reasonably calculated to effect the Change in Control, shall become immediately one hundred percent (100%) vested upon the occurrence of such Change in Control.

 

(4)           Vesting Service After December 31, 2020.  Notwithstanding Section 3.2(4) concerning the freeze of benefit accruals after December 31, 2020, an Executive is eligible to accrue Years of Eligibility Service and attain age 55 while in the employ of the Controlled Group for continued employment after December 31, 2020.

 

13

 

ARTICLE VI

MISCELLANEOUS

 

Section 6.1             Effect of Amendment and Termination.  Notwithstanding any provision of the Plan (including the Administrative Document) to the contrary, no amendment or termination of the Plan shall, without the consent of the Executive (or, in the case of his death, his Death Beneficiary), adversely affect the vested SERP Benefit or vested SERP Pre-Retirement Benefit under the Plan of any Executive or Death Beneficiary as such Benefit exists on the date of such amendment or termination; provided, however, that this limitation shall not apply to the extent deemed necessary by the Company to comply with the requirements of the 409A Guidance.

 

Section 6.2             Protective Provisions.  Notwithstanding any provision of the Plan to the contrary, if an Executive commits suicide during the two-year period beginning on the date of his commencement of participation in the Plan or makes any material misstatement or nondisclosure of medical history, then, in the Administrator’s sole and absolute discretion, no SERP Benefits or SERP Pre-Retirement Benefits shall be payable hereunder or such Benefits may be paid in a reduced amount (as determined by the Administrator).

 

Section 6.3             Limitation on Payments and Benefits.  Notwithstanding any provision of this Plan to the contrary, if any amount or benefit to be paid or provided under this Plan or any other plan or agreement between the Executive and a Controlled Group member would be an “Excess Parachute Payment,” within the meaning of Code Section 280G, or any successor provision thereto, but for the application of this sentence, then the payments and benefits to be paid or provided under this Plan shall be reduced to the minimum extent necessary (but in no event to less than zero) so that no portion of any such payment or benefit, as so reduced, constitutes an Excess Parachute Payment; provided, however, that the foregoing reduction shall be made only if and to the extent that such reduction would result in an increase in the aggregate payment and benefits to be provided to the Executive, determined on an after-tax basis (taking into account the excise tax imposed pursuant to Code Section 4999, or any successor provision thereto, any tax imposed by any comparable provision of state law, and any applicable federal, state and local income taxes).  If requested by the Executive or the Company, the determination of whether any reduction in such payments or benefits to be provided under this Plan or otherwise is required pursuant to the preceding sentence shall be made by the Company’s independent accountants, at the expense of the Company, and the determination of the Company’s independent accountants shall be final and binding on all persons.  The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 6.3 shall not of itself limit or otherwise affect any other rights of the Executive pursuant to this Plan.  The Executive’s benefit will be reduced only to the extent that the reduction in any cash payments due to the Executive is insufficient to reduce or eliminate Excess Parachute Payment as described in this Section.  The Executive’s Non-Grandfathered SERP Benefit (if any) shall be reduced if required by this section before any Grandfathered SERP Benefit is reduced.

 

Section 6.4             Establishment of Trust Fund.

 

(1)           In General.  The Plan is intended to be an unfunded, non-qualified retirement plan.  However, the Company may enter into a trust agreement with a trustee to establish a trust fund (the “Trust Fund”) and to transfer assets thereto (or cause assets to be transferred thereto), subject to the claims of the creditors of the Employers, pursuant to which some or all of the SERP Benefits and SERP Pre-Retirement Benefits shall be paid.  Payments from the Trust Fund shall discharge the Employers’ obligation to make payments under the Plan to the extent that Trust Fund assets are used to satisfy such obligations.

 

14

 

(2)           Upon a Change in Control.

 

(a)           Within thirty (30) business days of the occurrence of a Change in Control, to the extent it has not already done so, the Company shall be required to establish an irrevocable Trust Fund for the purpose of paying SERP Benefits and SERP Pre-Retirement Benefits.  Except as described in the following sentence, all contributions to the Trust Fund shall be irrevocable and the Company shall not have the right to direct the trustee to return to the Employers, or divert to others, any of the assets of the Trust Fund until after satisfaction of all liabilities to all of the Executives and their Death Beneficiaries under the Plan.  Any assets deposited in the Trust Fund shall be subject to the claims of the creditors of the Employers and any excess assets remaining in the Trust Fund after satisfaction of all liabilities shall revert to the Company.

 

(b)           In addition to the requirements described in paragraph (a) above, the Trust Fund which becomes effective on the Change in Control shall be subject to the following additional requirements:

 

(i)            the trustee of the Trust Fund shall be a third party corporate or institutional trustee;

 

(ii)           the Trust Fund shall satisfy the requirements of a grantor trust under the Code; and

 

(iii)          the Trust Fund shall automatically terminate (A) in the event that it is determined by a final decision of the United States Department of Labor (or, if an appeal is taken therefrom, by a court of competent jurisdiction) that by reason of the creation of, and a transfer of assets to, the Trust, the Trust is considered “funded” for purposes of Title I of ERISA or (B) in the event that it is determined by a final decision of the Internal Revenue Service (or, if an appeal is taken therefrom, by a court of competent jurisdiction) that (I) a transfer of assets to the Trust is considered a transfer of property for purposes of Code Section 83 or any successor provision thereto, or (II) pursuant to Code Section 451 or 409A or any successor provision thereto, amounts are includable as compensation in the gross income of a Trust Fund beneficiary in a taxable year that is prior to the taxable year or years in which such amounts would otherwise be actually distributed or made available to such beneficiary by the trustee.  Upon such a termination of the Trust, all of the assets in the Trust Fund attributable to the accrued SERP Benefits and SERP Pre-Retirement Benefits shall be immediately distributed to the Executives and the remaining assets, if any, shall revert to the Company; provided, however, that distributions to the Executives will be made only to the extent and in the manner permitted by the 409A Guidance.

 

(c)           Within five (5) days following establishment of the Trust Fund, the Company shall transfer (or cause the Employers to transfer) to the trustee of such Trust Fund an amount equal to the equivalent actuarial present value of the SERP Benefits and SERP Pre-Retirement Benefits which have been accrued as of the date of the Change in Control on behalf of all of the Executives under the Plan (using the Actuarial Factors specified in Exhibit A for this purpose).

 

(d)           In January of each year following a funding of the Trust Fund pursuant to paragraph (c) above, the Company shall cause to be deposited in the Trust Fund such additional amount (if any) by which the aggregate equivalent actuarial present value (determined using the Actuarial Factors specified in Exhibit A) of the sum of the SERP Benefits and SERP Pre-

 

15

 

Retirement Benefits for all Executives under the Plan as of December 31 of the preceding year exceeds the fair market value of the assets of the Trust Fund as of such date.

 

(e)           Notwithstanding the foregoing, an Employer shall not be required to make any contributions to the Trust Fund if the Employer is insolvent at the time such contribution is required.

 

(f)            The Administrator shall notify the trustee of the amount of SERP Pension Benefits and SERP Pre-Retirement Benefits to be paid to or on behalf of the Executive from the Trust Fund and shall assist the trustee in making distribution thereof in accordance with the terms of the Plan.

 

(g)           Notwithstanding any provision of the Plan or the Administrative Document to the contrary, the provisions of this Section 6.4(2) hereof (i) may not be amended following a Change in Control and (ii) prior to a Change in Control may only be amended (A) with the written consent of each of the Executives or (B) if the effective date of such Amendment is at least two (2) years following the date the Executives were given written notice of the adoption of such amendment; provided, however, that this limitation shall not apply to any amendment that is deemed necessary or reasonable (as determined in the sole discretion of the Committee) to comply with the requirements of the 409A Guidance.

 

Section 6.5             Delay of Payments Subject to Code Section 162(m).  The Company may delay the distribution of any amount otherwise required to be distributed under the Plan if, and to the extent that, the Company reasonably anticipates that the Company’s deduction with respect to such distribution otherwise would be limited or eliminated by application of Code Section 162(m).  In such event, (1) if any payment is delayed during any year on account of Code Section 162(m), then all payments that could be delayed on account of Code Section 162(m) during such year must also be delayed; (2) such delayed payments must be paid either (i) in the first year in which the Company reasonably anticipates the payment to be deductible, or (ii) the period beginning on the date of the Executive’s Separation from Service and ending on the later of the end of the Executive’s year of separation or the fifteenth (15th) day of the third month after such separation; and (3) if payment is delayed to the date of Separation from Service with respect to an Executive who is a Specified Employee, such payment shall commence after such Executive’s Separation from Service on the date immediately following the six-month anniversary of the Separation from Service, or if earlier, on the date of the Executive’s death.

 

IN WITNESS WHEREOF, Ecolab Inc. has executed this Supplemental Executive Retirement Plan and has caused its corporate seal to be affixed this 21st  day of  December, 2011.

 

16

 

	
 
    	
ECOLAB   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/Steven   L. Fritze
    
	
 
    	
 
    	
Steven   L. Fritze
    
	
 
    	
 
    	
Chief   Financial Officer
    

 

(Seal)

 

 

	
Attest:
    
	
 
    
	
By:   
    	
/s/James   J. Seifert
    	
 
    
	
James J. Seifert
    
	
General Counsel and Secretary
    

 

17

 

EXHIBIT A

ACTUARIAL ASSUMPTIONS

FOR SERP BENEFITS AND

SERP PRE-RETIREMENT BENEFITS

 

	
1.     Interest Rate:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
A.   For   Lump Sum
    	
 
    	
The   interest rate will be 125% of the 10-year Treasury rate for the month of   October preceding the Plan Year (i.e., January 1) (1) in which   the retirement or other termination of employment is effective if the SERP   Benefit is to commence immediately following such retirement or termination   of employment or (2) in which the distribution becomes payable if the   payment is to be deferred.
    
	
 
    	
 
    	
 
    
	
B.   Annual   Installments
    	
 
    	
Same   as for lump sum.
    
	
 
    	
 
    	
 
    
	
C.   General Actuarial Equivalence
    	
 
    	
7.5%   except as provided in item 4 below.
    
	
 
    	
 
    	
 
    
	
2.     Mortality — General Actuarial Equivalence
    	
 
    	
1971   Group Annuity Table.
    
	
 
    	
 
    	
 
    
	
3.     Annuity Values Weighted - General   Actuarial Equivalence
    	
 
    	
75%   male, 25% female.
    
	
 
    	
 
    	
 
    
	
4.     Early Commencement:
    	
 
    	
If   payment is in the form of a single lump sum, the lump sum amount shall be   based on the lump sum interest rate defined in item 1 above, and the “early   retirement benefit” immediate annuity amount as determined under   Section 3.3(l)(b) or 3.3(2)(a).
    

 

 

EXHIBIT B 

PRIMARY SOCIAL SECURITY BENEFITS

 

(A)          For purposes of the Plan, an Executive’s monthly primary social security benefit is the estimated social security benefit amount, under the Old Age and Survivors Insurance Benefit Act of the United States in effect on the first day of the calendar year during which the Executive terminates employment, which the Executive is receiving, or would be entitled to receive, commencing at his attainment of age 65, whether or not he applies for, or actually receives, such benefits.

 

(B)           The amounts determined under section (A) hereof shall be based upon the following assumptions:

 

(1)           except as otherwise provided in Subsection (5) hereof, the Executive is assumed to have participated in social security starting at the later of age 22 or January 1, 1951;

 

(2)           except as otherwise provided in Subsection (5) hereof, the Executive’s compensation on which his social security benefit is based shall be assumed to be that resulting from applying a decrease for years prior to the mid-year of the years on which the Executive’s Final Average Compensation is based, and an increase for years following such mid-year, at the same rates as the national average total wages for adjusting earnings as used in computing social security benefits, as published by the Social Security Administration for each such year, with the rate for the last published year being used for any years subsequent to such last published year;

 

(3)           except as otherwise provided in Subsection (5) hereof, the taxable wage base, the factors for indexing wages, and the table or formula used to determine the estimated monthly primary social security benefit amount will be assumed to remain constant following the Executive’s termination of employment;

 

(4)           except as otherwise provided in Subsection (5) hereof, for an Executive whose employment terminates prior to his attainment of age 65, it shall be assumed that he earned no compensation from the date of termination of his employment to his attainment of age 65;

 

(5)           for an Executive whose benefit is based, in whole or part, upon the continuing accrual of Years of Benefit Service during the period of his Disability, it shall be assumed that, during the period for which he accrues Years of Benefit Service under those sections, he continued to earn Annual Compensation at the same rate as during the Plan Year in which he became Disabled; provided, however, that, in the event the Executive is receiving, or is entitled to receive, a primary social security disability benefit, the amount of such benefit shall be deemed to be his “primary social security benefit” for purposes of the Plan, in lieu of the amount otherwise determined under this Exhibit B;

 

(C)           an Executive who, for any reason, is not a participant in the United States social security benefit program shall be deemed to participate fully in such program for purposes of determining the Executive’s primary social security benefit.

 

(D)          An Executive’s primary social security benefit may be determined by reference to a schedule based upon pay brackets, provided such schedule is prepared in accordance with the foregoing provisions of this Exhibit B.

 

 

EXHIBIT C 

SAVINGS PLAN BENEFIT

 

The Savings Plan Benefit shall be one-twelfth (l/12th) of the annual benefit, determined by the Administrator, that would be provided by Employer Contributions to the Ecolab Savings Plan (formerly the EL Thrift Plan) (hereafter the “Savings Plan”) made on or prior to July 1, 1994, if the Executive’s benefit under the Savings Plan as of July 3, 1994 were paid commencing at the Executive’s attainment of age 65 on a straight life annuity basis (based on an interest rate of 4.25% and the 1984 Unisex Pension Mortality Table shifted forward one year) and assuming (1) that the Employers contributed to the Savings Plan on the Executive’s behalf from (a) the later of January 1, 1977 or the date of the Executive’s first eligibility for participation in the Savings Plan until (b) the earlier of the Executive’s Retirement or July 1, 1994, an annual amount equal to three percent (3%) of the Executive’s actual Annual Compensation; provided, however, that the three percent (3%) shall be reduced by the amount, if any, which could not be contributed in each year by reason of the maximum contributions limitations of Code Section 415 and the maximum compensation limitations of Code Section 401(a)(17), and (2) that such Employer contributions to the Savings Plan on behalf of the Executive accumulated earnings at an annual rate of eight percent (8%) for all periods prior to January 1, 1991, and for each calendar year thereafter until the earlier of the Executive’s attainment of age 65 or December 31, 1993, at an interest rate established annually by the Administrator based on the PBGC’s immediate annuity rate as of the December 31 of the immediately preceding year, and for the period from January 1, 1994 until the attainment of age 65, at an interest rate of 4.25% (the December 1993 PBGC immediate rate).

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I PREFACE
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.1
    	
Effective Date
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.2
    	
Purpose of the Plan
    	
2
    
	
 
    	
 
    	
 
    
	
Section 1.3
    	
Administrative Document
    	
2
    
	
 
    	
 
    	
 
    
	
Section 1.4
    	
American Jobs Creation Act of   2004 (AJCA)
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE II DEFINITIONS
    	
2
    
	
 
    	
 
    	
 
    
	
Section 2.1
    	
“Actuarial Equivalent” or   “Actuarially Equivalent.”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.2
    	
“Actuarial Factors”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.3
    	
“Cash Balance Participant”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.4
    	
“Death Beneficiary.”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.5
    	
“Disability” or “Disabled”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.6
    	
“Executive”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.7
    	
“Final Average Compensation”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.8
    	
“Grandfathered SERP Benefit”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.9
    	
“Mirror Pension Benefit”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.10
    	
“Non-Grandfathered SERP Benefit”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.11
    	
“Pension Benefit”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.12
    	
“Plan”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.13
    	
“Primary Insurance Amount”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.14
    	
“Retirement” or “Retired.”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.15
    	
“Savings Plan Benefit”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.16
    	
“Separation from Service” or to   “Separate from Service”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.17
    	
“SERP Benefit”
    	
5
    
	
 
    	
 
    	
 
    
	
Section 2.18
    	
“SERP Pre-Retirement Benefit”
    	
5
    
	
 
    	
 
    	
 
    
	
Section 2.19
    	
“Specified Employee” shall mean   “Specified Employee”
    	
5
    
	
 
    	
 
    	
 
    
	
Section 2.20
    	
“Year of Benefit Service.”
    	
5
    
	
 
    	
 
    	
 
    
	
Section 2.21
    	
“Year of Eligibility Service.”
    	
5
    
	
 
    	
 
    	
 
    
	
Section 2.22
    	
“Year of Past Service Credit”
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE III SERP BENEFITS
    	
6
    
	
 
    	
 
    	
 
    
	
Section 3.1
    	
Participation
    	
6
    
	
 
    	
 
    	
 
    
	
Section 3.2
    	
Amount of SERP Benefits
    	
6
    
	
 
    	
 
    	
 
    

 

i

 

	
Section 3.3
    	
Time of Payment
    	
7
    
	
 
    	
 
    	
 
    
	
Section 3.4
    	
Form of Payment
    	
8
    
	
 
    	
 
    	
 
    
	
Section 3.5
    	
Death After Commencement of Non-Grandfathered   SERP Benefits
    	
11
    
	
 
    	
 
    	
 
    
	
Section 3.6
    	
Adjustment to Annual Installment   Payments Commencing Prior to January 1, 2011
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE IV SERP PRE-RETIREMENT BENEFITS
    	
11
    
	
 
    	
 
    	
 
    
	
Section 4.1
    	
Eligibility
    	
11
    
	
 
    	
 
    	
 
    
	
Section 4.2
    	
Amount, Form and Timing of   SERP Pre-Retirement Benefits
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE V VESTING
    	
13
    
	
 
    	
 
    	
 
    
	
Section 5.1
    	
Vesting
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE VI MISCELLANEOUS
    	
14
    
	
 
    	
 
    	
 
    
	
Section 6.1
    	
Effect of Amendment and   Termination
    	
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Section 6.2
    	
Protective Provisions
    	
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Section 6.3
    	
Limitation on Payments and   Benefits
    	
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Section 6.4
    	
Establishment of Trust Fund
    	
14
    
	
 
    	
 
    	
 
    
	
Section 6.5
    	
Delay of Payments Subject to Code   Section 162(m)
    	
16
    

 

iiEXHIBIT (10.14)

 

ECOLAB MIRROR SAVINGS PLAN

 

 

(As Amended and Restated Effective January 1, 2012)

 

 

ECOLAB MIRROR SAVINGS PLAN

 

(As Amended and Restated Effective as of January 1, 2012)

 

WHEREAS, the Company previously established the Ecolab Mirror Savings Plan (the “Plan”) to provide additional deferred compensation benefits for certain management and highly compensated employees who perform management and professional functions for the Company and certain related entities; and

 

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

 

WHEREAS, the IRS and U.S. Treasury subsequently issued regulations and other guidance regarding the requirements of and compliance with Code Section 409A; and

 

WHEREAS, the Board of Directors of the Company directed and authorized appropriate officers of the Company to amend the Plan to comply, with respect to the Executives’ Post-2004 Sub-Accounts, with the requirements of Code Section 409 and guidance issued thereunder; and

 

WHEREAS, the Company desires to bifurcate the Plan into an “excess plan” (referred to in the Plan as “Primary Deferrals”) and a deferred savings plan (referred to in the Plan as “Secondary Deferrals”), with the former constituting an “excess plan” for purposes of Minnesota state income tax; and

 

WHEREAS, on December 19, 2008 the Plan was amended and restated in its entirety, effective as of January 1, 2005; and

 

WHEREAS, the Company wishes to clarify ambiguous language in the Plan document.

 

NOW, THEREFORE, pursuant to Section 5.1 of the Ecolab Inc. Administrative Document for Non-Qualified Benefit Plans, Ecolab Inc. (the “Company”) hereby amends and restates the Plan in its entirety to read as follows:

 

ARTICLE I
 PREFACE

 

SECTION 1.1                       Effective Date.  The effective date of this amendment and restatement of the Plan is January 1, 2012, except as otherwise provided in this amendment and restatement.  The benefit, if any, payable with respect to a former Executive who terminated employment prior to the Effective Date (and who is not rehired by a member of the Controlled Group thereafter) shall be determined by, and paid in accordance with, the terms and provisions of the Plan as in effect prior to the Effective Date, subject to Section 1.4.

 

SECTION 1.2                       Purpose of the Plan.  The purpose of this Plan is to provide additional deferred compensation benefits for certain management and highly compensated employees who perform management and professional functions for the Company and certain related entities.

 

 

SECTION 1.3                       Administrative Document.  This Plan includes the Ecolab Inc. Administrative Document for Non-Qualified Benefit Plans (the “Administrative Document”), which is incorporated herein by reference.

 

SECTION 1.4                       American Jobs Creation Act (AJCA).

 

(1)           It is intended that the Plan (including all Amendments thereto) comply with the provisions of Section 409A of the Code, as enacted by the AJCA, to prevent the inclusion in gross income of any amount credited to an Executive’s Account hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise be actually distributed or made available to the Executive.  It is intended that the Plan shall be administered in a manner that will comply with Section 409A of the Code, including proposed, temporary or final regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto (collectively with the AJCA, the “409A Guidance”).  All Plan provisions shall be interpreted in a manner consistent with the 409A Guidance.

 

(2)           The Administrator shall not take any action hereunder that would violate any provision of the 409A Guidance.  It is intended that all Executives’ elections hereunder will comply with the 409A Guidance.  The Administrator is authorized to adopt rules or regulations deemed necessary or appropriate in connection therewith to anticipate and/or comply with the requirements thereof (including any transition or grandfather rules thereunder).  In this regard, the Administrator is authorized to permit Executive elections with respect to amounts deferred after December 31, 2004 and is also permitted to give the Executives the right to amend or revoke such elections in accordance with the 409A Guidance.  Notwithstanding the foregoing, neither the Company nor the Administrator guarantee any tax consequences of any Participant’s participation in, deferrals or contributions under, or payments from, the Plan, and each Participant shall be solely responsible for payment of any tax obligations of such Participant incurred in connection with participation in the Plan.

 

(3)           In furtherance of, but without limiting the foregoing, any Executive Deferrals and Matching Contributions (and the earnings thereon) that are deemed to have been deferred prior to January 1, 2005 and that qualify for “grandfathered status” under Section 409A of the Code shall continue to be governed by the law applicable to nonqualified deferred compensation prior to the addition of Section 409A to the Code and shall be subject to the terms and conditions specified in the Plan as in effect prior to January 1, 2005.  In particular, to the extent permitted under the 409A Guidance, the Bonus Deferrals relating to a Bonus that is earned during 2004, but paid in 2005, shall be allocated to the Executive’s Pre-2005 Sub-Account hereunder.

 

SECTION 1.5                       Excess Plan.  Effective January 1, 2009, (a) all Account balances under the Plan that are attributable to Executive and Company contributions to the Plan made with respect to Plan Years beginning on and after January 1, 2009 (as adjusted for earnings, losses, expenses and distributions) that were not permitted under the Savings Plan due to contribution limitations imposed on “qualified plans” by the Internal Revenue Code, specifically including Code Sections 401(a)(17), 401(k), 401(m), 402(g) and 415, shall be accounted for separately and shall be, for purposes of any applicable federal and state tax law, an “excess plan” (the “Primary Deferrals”); and (b) all Account balances other than the Primary Deferrals Account balances shall be accounted for separately and shall be a deferred savings plan (the “Secondary Deferrals”).

 

ARTICLE II
 DEFINITIONS

 

Words and phrases when used herein with initial capital letters which are defined in the Savings Plan or the Administrative Document are used herein as so defined, unless otherwise

 

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specifically defined herein or the context clearly indicates otherwise.  The following words and phrases when used in this Plan with initial capital letters shall have the following respective meanings, unless the context clearly indicates otherwise:

 

SECTION 2.1                       “Account” shall mean the record maintained in accordance with Section 3.4 by the Company for each Executive’s Mirror Savings Benefit.  The Executive’s Account shall be further divided into the following two Sub-Accounts:  (a) the “Pre-2005 Sub-Account” for amounts that are “deferred” (as such term is defined in the 409A Guidance) as of December 31, 2004 ( and earnings thereon), which includes the Minimum Benefit, and (b) the “Post-2004 Sub-Account” for amounts that are deferred after December 31, 2004 (and earnings thereon).  Effective as of January 1, 2009, each Executive’s Pre-2005 Sub-Account shall be part of the Secondary Deferrals.  Effective as of January 1, 2009, the Administrator shall establish, under the Executive’s Post-2004 Sub-Account, (i) the Primary Deferrals Sub-Account consisting of (A) the Executive’s Deferrals with respect to Base Salary and Bonus earned in Plan Years beginning on and after January 1, 2009 (and earnings thereon) that the Executive was precluded from deferring under the Savings Plan due to contribution limitations imposed on “qualified plans” by the Code, and (B) Matching Contributions made on the Executive’s behalf with respect to Plan Years beginning on or after January 1, 2009 (and earnings thereon), and (ii) the Secondary Deferrals Sub-Account consisting of the Executive’s Post-2004 Sub-Account balances other than the Primary Deferrals Sub-Account balances.

 

SECTION 2.2                       “Base Salary” shall mean an Executive’s base salary for the Plan Year (including, for this purpose, any salary reductions caused as a result of participation (1) in an Employer-sponsored plan which is governed by Sections 401(k), 132(f)(4) or 125 of the Code or (2) in this Plan).

 

SECTION 2.3                       “Bonus.” An Executive’s Bonus for a Plan Year is equal to the sum of (1) the annual cash incentive bonus under the Company’s Management Incentive Plan and/or, if applicable, the Company’s Management Performance Incentive Plan, and (2) any similar annual cash incentive bonus under any other equivalent Employer-sponsored bonus program (as determined by the Administrator), which, in either case, is earned with respect to services performed by the Executive during such Plan Year, whether or not such Bonus is actually paid to the Executive during such Plan Year.  An election to defer a Bonus under this Plan must be made before the period in which the service is performed which gives rise to such Bonus.

 

SECTION 2.4                       “Death Beneficiary.”

 

(1)           The term “Death Beneficiary” shall mean the person or persons designated by the Executive to receive Mirror Savings Benefits hereunder in the event of his death.  The designation of a Death Beneficiary under the Plan may be made, and may be revoked or changed only by an instrument (in form prescribed by Administrator) signed by the Executive and delivered to the Administrator during the Executive’s lifetime.  If the Executive is married on the date of his death and has been married to such spouse throughout the one-year period ending on the date of death, his designation of a Death Beneficiary other than, or in addition to, his spouse under the Plan shall not be effective unless such spouse has consented in writing to such designation.

 

(2)           Any Mirror Savings Benefits remaining to be paid after the death of a Death Beneficiary shall be paid to the Death Beneficiary’s estate, except as otherwise provided in the Executive’s Death Beneficiary designation.

 

SECTION 2.5                       “Disability” or “Disabled.”  With respect to an Executive’s Pre-2005 Sub-Account, an Executive shall be deemed to have a “Disability” or be “Disabled” if the Executive’s employment with an Employer terminates due to a disability that entitles the Executive to benefits under (1) any long-term disability plan sponsored by the Company, or (2) in the event that the Executive is not a participant in any such plan, the Social Security Act of the United States.

 

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SECTION 2.6                       “Executive” shall mean an Employee (1) whose annualized Annual Compensation (excluding severance pay) and target bonus for any Plan Year exceeds the limitation described in Code Section 401(a)(17), and (2) who is selected by the Administrator to participate in the Plan.  Once an Employee has satisfied the requirements of an Executive and commenced participation in the Plan, his participation may continue, notwithstanding the fact that his Annual Compensation is reduced below the limitation described in Code Section 401(a)(17), until the Administrator determines, in his or her sole discretion, that the Employee would fail to satisfy the requirements of a “management or highly compensated employee” under ERISA.

 

SECTION 2.7                       “Executive Deferrals” shall mean the amounts described in Section 3.1.

 

SECTION 2.8                       “Hypothetical Investment Fund” shall mean the investment funds designated by the Company pursuant to Section 6.1.

 

SECTION 2.9                       “Insolvent.” For purposes of this Plan, an Employer shall be considered Insolvent at such time as it (1) is unable to pay its debts as they mature, or (2) is subject to a pending voluntary or involuntary proceeding as a debtor under the United States Bankruptcy Code.

 

SECTION 2.10                     “Matching Contributions” shall mean the amounts described in Section 3.3.

 

SECTION 2.11                     “Minimum Benefit” shall mean the sum of the portions of the Executive’s Account attributable to amounts credited under a prior plan (the “Prior Plan”), including (1) his or her Account balance as of September 1, 1994, and (2) any deferral of his Bonus payable with respect to calendar 1994 and the Matching Contribution thereon.

 

SECTION 2.12                     “Mirror Savings Benefit.” An Executive’s Mirror Savings Benefit at any particular time shall be equal to the vested amounts credited to his Account at such time, as determined under Articles III and V.

 

SECTION 2.13                     “Plan” shall mean the Ecolab Mirror Savings Plan, as described herein and as it may be amended from time to time.

 

SECTION 2.14                     “Savings Plan” shall mean the Ecolab Savings Plan and ESOP, as such plan may be amended from time to time.

 

SECTION 2.15                     “Separation from Service” or to “Separate from Service” shall mean any termination of employment with the Controlled Group due to retirement, death, disability or other reason; provided, however, that no Separation from Service is deemed to occur while the Executive (1) is on military leave, sick leave, or other bona fide leave of absence that does not exceed six (6) months (or, in the case of disability, twelve (12) months), or if longer, the period during which the Executive’s right to reemployment with the Controlled Group is provided either by statute or by contract, or (2) continues to perform services for the Controlled Group at an annual rate of fifty percent (50%) or more of the average level of services performed over the immediately preceding 36-month period (or the full period in which the Executive provided services (whether as an employee or as an independent contractor) if the Executive has been providing services for less than 36 months).  For purposes of this Section, “disability” shall mean any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Executive to be unable to perform the duties of his or her position of employment or any substantially similar position of employment.  Whether an Executive has incurred a Separation from Service shall be determined in accordance with the 409A Guidance.

 

SECTION 2.16                     “Specified Employee” shall mean “Specified Employee” as defined in the Administrative Document.

 

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SECTION 2.17                     “Unforeseeable Emergency.” With respect to an Executive’s Post-2004 Sub-Account, “Unforeseeable Emergency” shall mean an event which results in a severe financial hardship to the Executive as a consequence of (1) an illness or accident of the Executive, the Executive’s spouse, Death Beneficiary or a dependent (as defined in Section 152(a) of the Code, without regard to Section 152(b)(1), (b)(2), and (d)(1)(B)), (2) loss of the Executive’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster) or (3) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Executive.  With respect to an Executive’s Pre-2005 Sub-Account, “Unforeseeable Emergency” shall mean an event which results (or will result) in severe financial hardship to the Executive as a consequence of an unexpected illness or accident or loss of the Executive’s property due to casualty or other similar extraordinary or unforeseen circumstances out of the control of the Executive, determined in accordance with Treas. Reg. § 1.409A-2(i)(3).

 

ARTICLE III
 MIRROR SAVINGS BENEFIT

 

SECTION 3.1                       Amount of Executive Deferrals.  Each Executive may, within 30 days after the Plan becomes effective as to him and, thereafter, prior to the first day of any subsequent Plan Year, by written notice to the Administrator on a form provided by the Administrator, direct his Employer:

 

(1)           to reduce (in accordance with rules established by the Administrator) the Executive’s Base Salary for the balance of the Plan Year in which the Plan becomes effective as to him (but only with respect to Base Salary payable for periods of service commencing after the Executive so directs) or for any following Plan Year (a) by a specified dollar amount or percentage, and/or (b) by an amount determined by the Administrator that is equal to five percent of Executive’s Base Salary in excess of the limitation described in Code Section 401(a)(17) for the Plan Year (limited to a maximum Salary Deferral of 25% of the Executive’s Base Salary in the deferral period) (the “Salary Deferrals”), and

 

(2)           to reduce (in accordance with rules established by the Administrator) the Executive’s Bonus which is earned with respect to services performed by the Executive for the balance of the Plan Year in which the Plan becomes effective as to him (but only with respect to Bonus payable for period of service commencing after the Executive’s direction becomes irrevocable) or for any following Plan Year (a) by a specified dollar amount or percentage, and/or (b) by an amount determined by the Administrator, that is equal to five percent of the portion of the Executive’s Bonus earned during the deferral period which, when added to the Executive’s Base Salary for the deferral period, is in excess of the limitation described in Code Section 401(a)(17) of the Plan Year (up to a maximum of 100% of the net amount of the Executive’s Bonus after payment of applicable FICA and related federal and state income tax withholdings) (the “Bonus Deferrals”), and

 

(3)           to credit the amounts described in Subsections (1) and (2) of this Section (collectively, the “Executive Deferrals”) to the Account described in Section 3.4 at the times described therein.

 

SECTION 3.2                       Effect and Duration of Direction Pursuant to Section 3.1.

 

(1)           Plan Year to Plan Year.  Any direction by an Executive to make Executive Deferrals under Section 3.1 shall be effective with respect to the Base Salary and Bonus otherwise earned by the Executive with respect to the period to which the direction relates, and the Executive shall not be eligible to receive such Executive Deferrals.  Instead, such Executive Deferrals shall be credited to the Executive’s Account as provided in Section 3.4.  Any direction made in accordance with Section 3.1 shall remain in effect until changed or revoked, except that such direction shall become

 

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irrevocable on the last day of the Plan Year immediately preceding the Plan Year with respect to which the Base Salary and Bonus subject to such direction are earned (or, with respect to the first period of eligibility, such direction shall be irrevocable on the last day of the 30-day election period with respect to Base Salary and Bonus earned during the same Plan Year after the election).  An Executive may change or revoke a direction with respect to the deferral of Base Salary and Bonus earned in a subsequent Plan Year at any time prior to such direction becoming irrevocable.  Notwithstanding the foregoing, all Executives shall be required to make a deferral election for the 2005 Plan Year by December 31, 2004, and prior elections shall not be given any further force or effect (except that the Executive’s Bonus Deferral election for the Bonus that is earned in the 2004 Plan Year shall continue in effect in accordance with its terms).

 

(2)           Automatic Termination/Suspension of Deferral Election.

 

(a)        An Executive Deferral direction pursuant to Section 3.1 shall automatically terminate on the date of the Executive’s Separation from Service and with respect to any compensation for services performed after such Executive’s Separation from Service or, to the extent permitted by the 409A Guidance, on the date the Plan is terminated.

 

(b)        An Executive’s direction pursuant to Section 3.1 shall automatically be cancelled from the first day of the first payroll period in which the Executive receives a hardship distribution under the Savings Plan or a distribution due to an Unforeseeable Emergency under this Plan through the last day of the Plan Year containing the six-month anniversary date of such hardship distribution or a distribution due to an Unforeseeable Emergency but will automatically be reinstated thereafter (unless otherwise changed in accordance with Subsection (1) hereof).

 

SECTION 3.3                       Matching Contributions.

 

(1)           Matching Contributions With Respect to Salary Deferrals.

 

(a)        The Employers shall credit the Account of an Executive with an amount (the “Matching Contributions”) equal to the sum of (1) 100% of the Salary Deferrals which do not exceed 3% of the Executive’s Base Salary and (2) 50% of the Salary Deferrals which exceed 3% of the Executive’s Base Salary but do not exceed 5% of the Executive’s Base Salary; provided, however, that such Matching Contributions shall be reduced by the maximum amount (as determined by the Administrator) of matching contributions that could be made to the Executive’s account under the Savings Plan for such Plan Year based on the Executive’s Base Salary for such Plan Year, assuming that the Executive has elected to contribute five percent of this Base Salary to the Savings Plan.

 

(b)        The Employers shall also credit the Account of an Executive with an additional Matching Contribution in an amount determined by the Administrator, which amount is equal to the amount of matching contributions (plus earnings allocable thereto) which the Executive is required to forfeit under the Savings Plan due to the application of the before-tax nondiscrimination requirements of the Code (the “True-Up Matching Contributions”).

 

(2)           Matching Contributions With Respect to Bonus Deferrals.  The Employers shall credit the Account of an Executive with a Matching Contribution equal to 100% of the first 3% of the Executive’s Bonus and 50% of the next 2% of the Executive’s Bonus, provided, however, the amount of the Executive’s Bonus that shall be taken into account under this Section 3.3(2) shall not exceed the excess of the Executive’s Base Salary and Bonus in respect of the Plan Year in which the Bonus was earned (excluding severance) over the maximum compensation which could be

 

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considered under the Savings Plan in such Plan Year under Section 401(a)(17) of the Code, and further provided that an Executive’s Bonus shall be taken into account under this Section 3.3(2) only to the extent the Executive has elected to defer payment of such Bonus under Section 3.1(2) for the Plan Year.

 

SECTION 3.4                       Executives’ Accounts.  Each Employer shall establish and maintain on its books an Account for each Executive which shall contain the following entries:

 

(1)           Credits for the Executive Deferrals described in Section 3.1, which Executive Deferrals shall be credited to the Executive’s Account at the time such Executive Deferrals would otherwise have been paid to the Executive;

 

(2)           Credits for the Matching Contributions described in Section 3.3(1)(a), which Matching Contributions shall be credited to the Executive’s Account at the same time as the underlying Salary Deferrals are credited thereto; but no earlier than when the Executive has received (or has been deemed to receive) the maximum Matching Contribution available under the Savings Plan (as determined by the Administrator);

 

(3)           Credits for the True-Up Matching Contributions described in Section 3.3(1)(b) at the time designated by the Administrator following the end of the Plan Year when the nondiscrimination test results under the Savings Plan are known;

 

(4)           Credits for the Matching Contributions described in Section 3.3(2), which Matching Contributions shall be credited to the Executive’s Account at the same time as the underlying Bonus Deferrals are credited thereto;

 

(5)           Credits or charges (including income, expenses, gains and losses) equal to the amounts which would have been attributable to the Executive Deferrals and Matching Contributions if such amounts had been invested on a tax deferred basis in the Hypothetical Investment Fund(s) in which such amounts are deemed to have been invested under Section 6.1.  The entries provided by this Subsection (5) shall continue to be made until the Executive’s entire vested Account has been distributed pursuant to Article IV;

 

(6)           Debits for any distributions made from the Account pursuant to Article IV;

 

(7)           The Employers shall make the above-described credits and debits to the Executive’s Pre-2005 Sub-Account or the Post-2004 Sub-Account, as applicable, in accordance with the 409A Guidance; and

 

(8)           Effective as of January 1, 2009, separate debits and credits shall be made to the Primary Deferrals Sub-Account and the Secondary Deferrals Sub-Account of each Participant.

 

SECTION 3.5                       Statement of Account.  The Company shall deliver to each Executive a written statement of his Account not less frequently than annually as of the end of each Plan Year.

 

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ARTICLE IV
 PAYMENT OF MIRROR SAVINGS BENEFITS

 

SECTION 4.1                       Time of Payment.

 

(1)           Payment to Executives.

 

(a)        An Executive shall be entitled to receive his Account upon the earlier of (i) with respect to the Executive’s Pre-2005 Sub-Account, the date on which his or her employment terminates due to Disability or (ii) the date of his or her termination of employment with the Controlled Group for any reason, including retirement (or, with respect to amounts that are allocated to an Executive’s Post-2004 Sub-Account, thirty (30) days after the date of his or her Separation from Service (or, in the case of the Executive’s election pursuant to Section 4.2(3)(b)(ii)(B), on the date specified in such Section); provided, however, that distribution made on account of Separation from Service shall be made, or commence to be made, with respect to a Specified Employee on the first day of the month coincident with or next following the  date that is six months after the date of the Separation from Service of the Specified Employee (or, if earlier, the date of death), to the extent that Code Section 409A(a)(2)(B)(i) is applicable, except that where the Executive makes an election pursuant to Section 4.2(3)(b)(ii)(B), payment will be made on the date specified in such Section).  In the case of installment payments, the first payment made to the Specified Employee following the 6-month delay shall be made on the first day of the seventh month following the Separation from Service and shall include any Mirror Savings Benefit payments that were not made as a result of the delay in payment pursuant to this paragraph (a).

 

(b)        Notwithstanding the foregoing, the Company may at any time, upon written request of the Executive, cause to be paid to such Executive an amount equal to all or any part of the Executive’s vested Account, other than the portion of his or her Account attributable to Matching Contributions, if the Administrator determines, in its sole and absolute discretion based on such reasonable evidence as it may require, that such a payment or payments is necessary for the purpose of alleviating the consequences of an Unforeseeable Emergency.  Payments made on account of an Unforeseeable Emergency shall be permitted only to the extent the amount does not exceed the amount reasonably necessary to satisfy the emergency need (plus, with respect to payments made from an Executive’s Post-2004 Sub-Account, an amount necessary to pay taxes reasonably anticipated as a result of the distribution) and may not be made to the extent such Unforeseeable Emergency is or may be relieved through reimbursement or compensation by insurance or otherwise, by liquidation of the Executive’s assets (to the extent such liquidation would not itself cause severe financial hardship) or, to the extent permitted by the 409A Guidance, by cessation of the Executive Deferrals under this Plan.  However, the determination of amounts reasonably necessary to satisfy the emergency need is not required to take into account any additional compensation that due to the Unforeseeable Emergency is available under another nonqualified deferred compensation plan but has not actually been paid.

 

(c)         Notwithstanding any provision of the Plan to the contrary, if the payment of all or any portion of an Executive’s Account would, in the sole opinion of the Company on the advice of its counsel, result in a profit recoverable by the Company under Section 16(b) of the Securities Exchange Act of 1934, but for the operation of this paragraph, then such payment (or portion thereof) shall be deferred and made at the earliest time that such payment (or portion thereof) would no longer be subject to Section 16(b), to the extent permitted by the 409A Guidance.

 

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(2)           Payment to Death Beneficiaries.  The Death Beneficiary of a deceased Executive shall be entitled to receive the vested Account of the Executive upon the death of the Executive.  The Executive’s vested Account shall be distributed to the Death Beneficiary on the sixtieth (60th) day after the Executive’s death.

 

SECTION 4.2                       Form of Payment.

 

(1)           Payment in Cash.  All distributions under the Plan shall be made in the form of cash.

 

(2)           Normal Forms of Payment.

 

(a)        Payments to Executives.

 

(i)            Pre-2005 Sub-Accounts.  Unless otherwise elected pursuant to Section 4.2(3), an Executive’s Pre-2005 Sub-Account shall be distributed to the Executive in the form of a single lump sum payment.

 

(ii)           Post-2004 Sub-Accounts.  Unless otherwise elected pursuant to Section 4.2(3), an Executive’s Post-2004 Sub-Account shall be distributed to the Executive in the form of annual installment payments payable over a period of ten (10) years.

 

(b)        Payments to Death Beneficiaries.  An Executive’s Mirror Savings Benefit (or the remaining installments thereof if payment to the Executive had commenced) shall be distributed to his or her Death Beneficiary in the form of a single lump sum payment.

 

(c)         Small Benefits.  Notwithstanding any provision of the Plan to the contrary, in the event that (i) an Executive’s Pre-2005 Sub-Account does not exceed $25,000, such Sub-Account shall be paid to the Executive in the form of a single lump sum payment at termination of employment with the Controlled Group, and (ii) an Executive’s Post-2004 Sub-Account does not exceed $25,000, such Sub-Account shall be paid to the Executive in the form of a single lump sum payment at Separation from Service.

 

(d)        Payment of Minimum Benefits.  Notwithstanding the foregoing, an Executive’s Minimum Benefit shall be paid in the form previously elected by the Executive under the Prior Plan, and such election shall remain in full force and effect through the date of distribution.

 

(3)           Optional Forms of Payment for Executives.

 

(a)        In General.  An Executive who does not want his or her Mirror Savings Benefit to be paid in the normal form of benefit described in Section 4.2(2)(a) may elect to receive his Pre-2005 Sub-Account in the form of annual installment payments payable over a period not exceeding ten years (as elected by the Executive) and may elect to receive his Post-2004 Sub-Account in the form of a single lump sum payment or in the form of annual installment payments payable over a period of five (5) or ten (10) years (as elected by the Executive); provided, however, the election provided by this Section 4.2(3) shall not apply to the Executive’s Minimum Benefit.  The amount of each installment payment will be determined by dividing the balance of the Executive’s Mirror Savings Benefit as of the distribution date for such installment payment by the total number of remaining payments (including the current payment).  Effective as of January 1, 2009, an Executive may make separate payment elections under this Section 4.2(3) with respect to the Executive’s Primary Deferrals Sub-Account and Secondary Deferrals Sub-Account.

 

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(b)           Form/Timing of Election.

 

(i)            Pre-2005 Sub-Accounts.  Any election of an optional form of benefit made with respect to the Pre-2005 Sub-Account must be in writing (on a form provided by the Administrator) and filed with the Administrator prior to the Executive’s termination of employment with the Controlled Group because of involuntary termination, death or Disability or at least one (1) year prior to the Executive’s voluntary termination of employment or retirement.  Any such election may be changed at any time and from time to time without the consent of any other person (except as described in Section 2.4), by filing a later signed written election with the Administrator; provided that any election made less than one (1) year prior to the Executive’s voluntary termination of employment shall not be valid, and in such case, payment shall be made in the normal form as provided in Section 4.2(2).

 

(ii)           Post-2004 Sub-Accounts.

 

(A)          In General.  Any election of an optional form of benefit made with respect to the Post-2004 Sub-Account must be in writing (on a form provided by the Administrator) and filed with the Administrator at the time the Executive first becomes eligible to participate in the Plan and makes his initial Executive Deferral election pursuant to Section 3.1.  Effective as of January 1, 2009, an Executive may make separate payment elections under this Section 4.2(3)(b)(ii) with respect to the Executive’s Primary Deferrals Sub-Account and Secondary Deferrals Sub-Account.

 

(B)           Subsequent Elections.  An Executive may change his election of an optional form of benefit made pursuant to Section 4.2(3)(b)(ii)(A) at any time and from time to time at least twelve (12) months before the Executive’s Separation from Service.  The most recent election on file with the Administrator (that was filed at least twelve (12) months before the Executive’s Separation from Service and that remains on file with the Administrator on the date of the Executive’s Separation from Service) shall be given effect and shall become irrevocable on the date of the Executive’s Separation from Service.  No prior or subsequent election shall have any force or effect.  The payment of the Executive’s Post-2004 Sub-Account (or, effective January 1, 2009, the Executive’s Primary Deferrals Sub-Account and Secondary Deferrals Sub-Account) pursuant to such subsequent election shall be made or commence to be made on the date that is five (5) years after the originally scheduled date of payment.

 

(C)           Transition Elections.  Notwithstanding any provision of the Plan to the contrary, an Executive may elect, without regard to the five-year delay (as would be required under Section 4.2(3)(b)(ii)(B)), to receive each of his or her Primary Deferrals Sub-Account and Secondary Deferrals Sub-Account in a lump sum payment or in the form of five-year or ten-year annual installment payments, to be made or commence on the date of his or her Separation from Service.  The transition election made under this clause (C) must be made no later than December 31, 2008 and may not cause any amount to be paid in 2008 if not otherwise payable and may not delay beyond 2008 payment of any amount that is otherwise payable in 2008.

 

10

 

ARTICLE V
 VESTING

 

SECTION 5.1                         Vesting.

 

(1)           In General.  An Executive shall always be 100% vested in both his Executive Deferrals and his Minimum Benefit under the Plan.  Subject to the provisions of Subsection (2) of this Section, an Executive who is credited with an Hour of Service on or after March 1, 2002 shall be immediately 100% vested in all Matching Contributions hereunder.

 

(2)           Forfeiture Provisions.

 

(a)           Notwithstanding the provisions of Subsection (1) hereof, but subject to the requirements of paragraph (b) of this Subsection, the Employers shall be relieved of any obligation to pay or provide any future Mirror Savings Plan Benefits under this Plan and shall be entitled to recover amounts already distributed if, without the written consent of the Company, the Executive, whether before or after termination with the Controlled Group (i) participates in dishonesty, fraud, misrepresentation, embezzlement or deliberate injury or attempted injury, in each case related to the Company or a Controlled Group member, (ii) commits any unlawful or criminal activity of a serious nature, (iii) commits any intentional and deliberate breach of a duty or duties that, individually or in the aggregate, are material in relation to the Executive’s overall duties or (iv) materially breaches any confidentiality or noncompete agreement entered into with the Company or a Controlled Group member.  The Employers shall have the burden of proving that one of the foregoing events has occurred.  Notwithstanding the foregoing, the provisions of this Subsection 2(a) shall not apply to an Executive’s Minimum Benefit or the portion of the Executive’s Account which is attributable to his Executive Deferrals.

 

(b)           Notwithstanding the foregoing, an Executive shall not forfeit any portion of his Mirror Savings Plan Benefits under paragraph (a) of this Subsection unless (i) the Executive receives reasonable notice in writing setting forth the grounds for the forfeiture, (ii) if requested by the Executive, the Executive (and/or the Executive’s counsel or other representative) is granted a hearing before the full Board of Directors of the Company (the “Board”) and (iii) a majority of the members of the full Board determine that the Executive violated one or more of the provisions of paragraph (a) of this Subsection.

 

ARTICLE VI
 INVESTMENT OF ACCOUNTS

 

SECTION 6.1                         Hypothetical Investment Funds.

 

(1)           Hypothetical Investment Fund for Matching Contributions on or after January 1, 2006.  Matching Contributions made on or after January 1, 2006 shall be deemed to be made in cash and invested in accordance with the Hypothetical Investment Fund election(s) in effect from time to time for Executive Deferrals under Subsection (2) below.

 

(2)           Hypothetical Investment Funds for Executive Deferrals.  To the extent permitted by the 409A Guidance, the Hypothetical Investment Funds for purposes of the portion of an Executive’s Account which is attributable to his Executive Deferrals shall be those same Investment Funds designated by the Company under the Savings Plan, provided, however that effective January 1, 2006, the Ecolab Stock Fund will not be a Hypothetical Investment Fund with respect to the investment of Executive Deferrals made on or after January 1, 2006.  Each Executive (or his Death Beneficiary) may elect, in a manner prescribed by the Administrator from time to time, one or more

 

11

 

Hypothetical Investment Funds in which his Executive Deferrals are deemed to have been invested for purposes of crediting earnings and losses to the portion of the Executive’s Account which is attributable to Executive Deferrals, provided, however, that effective January 1, 2006, no Executive or Death Beneficiary may elect the Ecolab Stock Fund as a Hypothetical Investment Fund with respect to Executive Deferrals.  The Company may deem an Executive’s Executive Deferrals to have been invested in the Hypothetical Investment Fund elected by the Executive, if any, or may instead, in its sole discretion, deem such Executive Deferrals to have been invested in one or more Hypothetical Investment Funds selected by the Company.  Earnings on any amounts deemed to have been invested in any Hypothetical Investment Fund shall be deemed to have been reinvested in such Hypothetical Investment Fund.  Notwithstanding the foregoing, any Executive who is subject to Section 16(b) of the Securities Exchange Act of 1934 may not elect and shall not be deemed to have directed any Executive Deferrals to the Ecolab Stock Fund.  An Executive shall be deemed, on the day prior to becoming subject to Section 16(b) or at such other time as he is subject to Section 16(b), to have elected to have Executive Deferrals then deemed to be invested in the Ecolab Stock Fund invested in the Hypothetical Investment Fund that under the Savings Plan is designated as a default investment fund, unless another permitted election is in place.

 

(3)           Expenses of Hypothetical Investment Funds.  The Hypothetical Investment Funds shall bear and be charged with actual or hypothetical expenses to the same extent that the corresponding Ecolab Stock Fund and other Investment Funds in the Savings Plan bear and are charged with such expenses, as determined by the Administrator.

 

ARTICLE VII
 MISCELLANEOUS

 

SECTION 7.1                         Effect of Amendment and Termination.  Notwithstanding any provision of the Plan (including the Administrative Document) to the contrary, no amendment or termination of the Plan shall, without the consent of the Executive (or, in the case of his death, his Death Beneficiary), adversely affect the vested Account under the Plan of any Executive or Death Beneficiary as such Account exists on the date of such amendment or termination; provided, however, that this limitation shall not apply to any amendment or termination that is deemed necessary or reasonable (as determined in the sole discretion of the Committee) to comply with the requirements of the 409A Guidance.

 

SECTION 7.2                         Limitation on Payments and Benefits.  Notwithstanding any provision of this Plan to the contrary, if any amount or benefit to be paid or provided under this Plan or any other plan or agreement between the Executive and a Controlled Group member would be an “Excess Parachute Payment,” within the meaning of Section 280G of the Code, or any successor provision thereto, but for the application of this sentence, then the payments and benefits to be paid or provided under this Plan shall be reduced to the minimum extent necessary (but in no event to less than zero) so that no portion of any such payment or benefit, as so reduced, constitutes an Excess Parachute Payment; provided, however, that the foregoing reduction shall be made only if and to the extent that such reduction would result in an increase in the aggregate payment and benefits to be provided to the Executive, determined on an after-tax basis (taking into account the excise tax imposed pursuant to Section 4999 of the Code, or any successor provision thereto, any tax imposed by any comparable provision of state law, and any applicable federal, state and local income taxes).  If requested by the Executive or the Company, the determination of whether any reduction in such payments or benefits to be provided under this Plan or otherwise is required pursuant to the preceding sentence shall be made by the Company’s independent accountants, at the expense of the Company, and the determination of the Company’s independent accountants shall be final and binding on all persons.  The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 7.2 shall not of itself limit or otherwise affect any other rights of the Executive pursuant to this Plan.  The Executive’s Mirror Savings Benefit will be reduced only to the extent that the reduction in any cash payments due to the Executive, the Executive’s SERP Benefits (if any) and the Executive’s Mirror Pension Plan Benefits is insufficient to reduce or eliminate Excess Parachute Payment as described in this

 

12

 

Section.  The Executive’s Post-2004 Sub-Account (if any) shall be reduced if required by this section before any Pre-2005 Sub-Account is reduced.

 

SECTION 7.3                         Establishment of a Trust Fund.

 

(1)           In General.  The Plan is intended to be an unfunded, non-qualified retirement plan.  However, the Company may enter into a trust agreement with a trustee to establish a trust fund (the “Trust Fund”) and to transfer assets thereto (or cause assets to be transferred thereto), subject to the claims of the creditors of the Employers, pursuant to which some or all of the Mirror Savings Plan Benefits shall be paid.  Payments from the Trust Fund shall discharge the Employers’ obligation to make payments under the Plan to the extent that Trust Fund assets are used to satisfy such obligations.

 

(2)           Upon a Change in Control.

 

(a)           Within thirty (30) business days of the occurrence of a Change in Control, to the extent it has not already done so, the Company shall be required to establish an irrevocable Trust Fund for the purpose of paying Mirror Savings Plan Benefits.  Except as described in the following sentence, all contributions to the Trust Fund shall be irrevocable and the Company shall not have the right to direct the trustee to return to the Employers, or divert to others, any of the assets of the Trust Fund until after satisfaction of all liabilities to all of the Executives and their Death Beneficiaries under the Plan.  Any assets deposited in the Trust Fund shall be subject to the claims of the creditors of the Employers and any excess assets remaining in the Trust Fund after satisfaction of all liabilities shall revert to the Company.

 

(b)           In addition to the requirements described in paragraph (a) above, the Trust Fund which becomes effective on the Change in Control shall be subject to the following additional requirements:

 

(i)            the trustee of the Trust Fund shall be a third party corporate or institutional trustee;

 

(ii)           the Trust Fund shall satisfy the requirements of a grantor trust under the Code; and

 

(iii)          the Trust Fund shall automatically terminate (A) in the event that it is determined by a final decision of the United States Department of Labor (or, if an appeal is taken therefrom, by a court of competent jurisdiction) that by reason of the creation of, and a transfer of assets to, the Trust, the Trust is considered “funded” for purposes of Title I of ERISA or (B) in the event that it is determined by a final decision of the Internal Revenue Service (or, if an appeal is taken therefrom, by a court of competent jurisdiction) that (I) a transfer of assets to the Trust is considered a transfer of property for purposes of Code Section 83 or any successor provision thereto, or (II) pursuant to Code Section 451 or 409A or any successor provision thereto, amounts are includable as compensation in the gross income of a Trust Fund beneficiary in a taxable year that is prior to the taxable year or years in which such amounts would otherwise be actually distributed or made available to such beneficiary by the trustee.  Upon such termination of the Trust, all of the assets in the Trust Fund attributable to the accrued Mirror Savings Plan Benefits shall be immediately distributed to the Executives (but only to the extent and in the manner permitted by the 409A Guidance), and the remaining assets, if any, shall revert to the Company.

 

13

 

(c)           Within five (5) days following establishment of the Trust Fund, the Company shall transfer (or cause the Employers to transfer) to the trustee of such Trust Fund an amount equal to all 100% of the Account balances of all of the Executives under the Plan.

 

(d)           Following the funding of the Trust Fund pursuant to paragraph (a) above, the Company shall cause to be deposited in the Trust Fund additional Executive Deferrals and Matching Contributions, as such amounts are credited to the Accounts of the Executives pursuant to Section 3.4 hereof.

 

(e)           Notwithstanding the foregoing, an Employer shall not be required to make any contributions to the Trust Fund if the Employer is Insolvent at the time such contribution is required.

 

(f)            The Administrator shall notify the trustee of the amount of Mirror Savings Plan Benefits to be paid to the Executive (or his Death Beneficiary) from the Trust Fund and shall assist the trustee in making distribution thereof in accordance with the terms of the Plan.

 

(g)           Notwithstanding any provision of the Plan or the Administrative Document to the contrary, the provisions of this Section 7.3(2) hereof (i) may not be amended following a Change in Control and (ii) prior to a Change in Control may only be amended (A) with the written consent of each of the Executives or (B) if the effective date of such Amendment is at least two years following the date the Executives were given written notice of the adoption of such amendment; provided, however, that this limitation shall not apply to any amendment that is deemed necessary or reasonable (as determined in the sole discretion of the Committee) to comply with the requirements of the 409A Guidance.

 

SECTION 7.4                         Delay of Payments Subject to Code Section 162(m).  The Company may delay the distribution of any amount otherwise required to be distributed under the Plan if, and to the extent that, the Company reasonably anticipates that the Company’s deduction with respect to such distribution otherwise would be limited or eliminated by application of Section 162(m) of the Code.  In such event, (1) if any payment is delayed during any year on account of Code Section 162(m), then all payments that could be delayed on account of Code Section 162(m) during such year must also be delayed; (2) such delayed payments must be paid either (a) in the first year in which the Company reasonably anticipates the payment to be deductible, or (b) the period beginning on the date of the Executive’s Separation From Service and ending on the later of the end of the Executive’s year of separation or the fifteenth (15th) day of the third month after such separation; and (3) if payment is delayed to the date of Separation from Service with respect to an Executive who is a Specified Employee, such payment shall commence after such Executive’s Separation from Service on the date immediately following the six-month anniversary of the Separation from Service, or if earlier, on the date of the Executive’s death.

 

14

 

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:
    	
December 21, 2011
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ECOLAB INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Steven L. Fritze
    
	
 
    	
 
    	
Steven L. Fritze
    
	
 
    	
 
    	
Chief Financial Officer
    

 

	
(Seal)
    	
 
    
	
Attest:
    	
 
    
	
 
    	
 
    
	
/s/James J. Seifert
    	
 
    
	
James J. Seifert
    	
 
    
	
General Counsel and Secretary
    	
 
    

 

15

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I
    	
PREFACE
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.1
    	
Effective Date
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.2
    	
Purpose of the Plan
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.3
    	
Administrative Document
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.4
    	
American Jobs Creation Act (AJCA)
    	
2
    
	
 
    	
 
    	
 
    
	
Section 1.5
    	
Excess Plan
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    	
DEFINITIONS
    	
2
    
	
 
    	
 
    	
 
    
	
Section 2.1
    	
“Account”
    	
2
    
	
 
    	
 
    	
 
    
	
Section 2.2
    	
“Base Salary”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.3
    	
“Bonus.”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.4
    	
“Death Beneficiary.”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.5
    	
“Disability” or “Disabled.”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.6
    	
“Executive”
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.7
    	
“Executive Deferrals”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.8
    	
“Hypothetical Investment Fund”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.9
    	
“Insolvent.”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.10
    	
“Matching Contributions”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.11
    	
“Minimum Benefit”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.12
    	
“Mirror Savings Benefit.”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.13
    	
“Plan”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.14
    	
“Savings Plan”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.15
    	
“Separation from Service” or to “Separate   from Service”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.16
    	
“Specified Employee”
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.17
    	
“Unforeseeable Emergency.”
    	
4
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    	
MIRROR SAVINGS BENEFIT
    	
5
    
	
 
    	
 
    	
 
    
	
Section 3.1
    	
Amount of Executive Deferrals
    	
5
    
	
 
    	
 
    	
 
    
	
Section 3.2
    	
Effect and Duration of Direction Pursuant to   Section 3.1
    	
5
    
	
 
    	
 
    	
 
    
	
Section 3.3
    	
Matching Contributions
    	
6
    
	
 
    	
 
    	
 
    
	
Section 3.4
    	
Executives’ Accounts
    	
7
    
	
 
    	
 
    	
 
    
	
Section 3.5
    	
Statement of Account
    	
7
    
				

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    	
PAYMENT OF MIRROR SAVINGS BENEFITS
    	
7
    
	
 
    	
 
    	
 
    
	
Section 4.1
    	
Time of Payment
    	
7
    
	
 
    	
 
    	
 
    
	
Section 4.2
    	
Form of Payment
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    	
VESTING
    	
11
    
	
 
    	
 
    	
 
    
	
Section 5.1
    	
Vesting
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE VI
    	
INVESTMENT OF ACCOUNTS
    	
11
    
	
 
    	
 
    	
 
    
	
Section 6.1
    	
Hypothetical Investment Funds
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    	
MISCELLANEOUS
    	
12
    
	
 
    	
 
    	
 
    
	
Section 7.1
    	
Effect of Amendment and Termination
    	
12
    
	
 
    	
 
    	
 
    
	
Section 7.2
    	
Limitation on Payments and Benefits
    	
12
    
	
 
    	
 
    	
 
    
	
Section 7.3
    	
Establishment of a Trust Fund
    	
13
    
	
 
    	
 
    	
 
    
	
Section 7.4
    	
Delay of Payments Subject to Code   Section 162(m)
    	
14
    
				

 

ii

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