Document:

EXHIBIT
(10)N(ii)

 

AMENDMENT NO. 1

TO THE ECOLAB INC.

ADMINISTRATIVE DOCUMENT FOR NON-QUALIFIED BENEFIT PLANS

(As Amended and Restated effective January 1, 2003)

WITH RESPECT TO

THE AMERICAN JOBS CREATION ACT OF 2004

 

WHEREAS,
Ecolab Inc. (the “Company”) amended and restated the Ecolab Inc. Administrative
Document for Non-Qualified Benefit Plans (the “Administrative Document”)
effective January 1, 2003; and

 

WHEREAS,
the Administrative Document provides for the administration of the
non-qualified benefit plans listed on Exhibit A thereto, one or more of which
is classified as a “nonqualified deferred compensation plan” under the Code
(each a “Non-Qualified Plan”); 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 a Non-Qualified Plan after December 31, 2004; and

 

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

 

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

 

WHEREAS,
to the fullest extent permitted by Section 409A of the Code and the AJCA
Guidance, the Company wants to protect the “grandfathered” status of the
benefits that are accrued under the Non-Qualified Plans prior to January 1,
2005;

 

NOW
THEREFORE, pursuant to Section 5.1 of the Administrative Document, the
Company hereby adopts this Amendment No. 1 to the Administrative Document,
which amendment is intended to (1) allow amounts deferred under the
Non-Qualified Plans prior to January 1, 2005 to qualify for “grandfathered”
status and to continue to be governed by the law applicable to nonqualified
deferred compensation prior to the addition of Code Section 409A (as
specified in the Non-Qualified Plans as in effect before the adoption of this
Amendment No. 1) and (2) cause amounts deferred under the Non-Qualified Plans
after December 31, 2004 to be deferred in compliance with the requirements
of Code Section 409A.

 

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

 

Section 1

 

Article IV
of the Administrative Document is hereby amended by the addition of the
following new Section 4.6 at the end thereof, to read as follows:

 

“Section 4.6           American Jobs Creation Act (AJCA).

 

(a)           To the extent applicable, it is intended that
each Non-Qualified Plan (including all amendments thereto) comply with the
provisions of Section 409A of the Code, as enacted by the AJCA, so as to
prevent the inclusion in gross income of any amount of 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.  Each Non-Qualified
Plan shall be administered in a manner that will comply with Section 409A
of the Code, including proposed, temporary or final regulations or any other
guidance issued by the Secretary of the Treasury and the Internal Revenue
Service with respect thereto (collectively with the AJCA, the “AJCA Guidance”).  Any provisions of this Administrative
Document that would cause any Non-Qualified Plan to fail to satisfy Section 409A
of the Code (including, without limitation, those added or amended by this
Amendment No. 1) shall have no force and effect until amended to comply with
Code Section 409A (which amendment may be retroactive to the extent
permitted by the AJCA Guidance).

 

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

 

(c)           The effective date of this Amendment No. 1 is
December 31, 2004.  In furtherance
thereof, but without limiting the foregoing, any benefit under a Non-Qualified
Plan that is deemed to have been deferred prior to January 1, 2005 and
that qualifies for “grandfathered status” under Section 409A of the Code
shall continue to be governed by the law applicable to nonqualified deferred
compensation prior to the addition of Section 409A to the Code and shall
be subject to the terms and conditions specified in the Administrative Document
as in effect prior to January 1, 2005.”

 

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

 

	
   

  	
  ECOLAB INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven L. Fritze

  
	
   

  	
  Steven L. Fritze

  
	
   

  	
  Executive Vice President and

  
	
   

  	
  Chief Financial Officer

  
	
   

  
	
  (Seal)

  
	
   

  
	
  Attest:

  
	
   

  
	
   

  
	
   

  
	
  /s/
  Lawrence T. Bell

  	
   

  
	
  Lawrence
  T. Bell

  
	
  Senior
  Vice President,

  
	
  General
  Counsel and Secretary

  
				

 

2EXHIBIT
(10)O(ii)

 

AMENDMENT
NO. 1

TO THE ECOLAB INC. MANAGEMENT PERFORMANCE INCENTIVE PLAN

(as amended and restated on February 28, 2004)

 

 

WHEREAS, Ecolab Inc. (the “Company”) adopted an amended and restated
Management Incentive Plan (the “Plan”) effective as of February 28, 2004;
and

 

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

 

WHEREAS, pursuant to the AJCA, the Secretary of the Treasury and the
Internal Revenue Service has issued guidance with respect to the provisions of
new Section 409A of the Code; and

 

WHEREAS, the Company intends for the benefits provided under the Plan
to not be subject to the requirements of Section 409A of the Code;

 

NOW THEREFORE, pursuant to Section 10 of the Plan, the Board of
Directors of the Company hereby adopts this Amendment No. 1 to the Plan,
effective as of January 1, 2005, which amendment is intended to cause all
amounts paid under the Plan to satisfy certain exceptions from being subject to
the requirements of Section 409A of the Code.

 

Section 1

 

Section 6 of
the Plan is amended to read as follows:

 

6.             Payment
of Awards.

 

As soon as practicable after the Committee has received the appropriate
financial and other data after the end of a Plan Year, the Committee will for
each Participant certify in writing the extent to which the applicable
Performance Goals for such Participant have been met and the corresponding
amount of the Award earned by such Participant. 
Payment of each Award in a cash lump sum, less applicable withholding
taxes pursuant to Section 8 of the Plan, shall be made as soon as
practicable thereafter, but no later than 21⁄2 months after the end of the Plan
Year.  Notwithstanding anything in the
Plan to the contrary, no payment made pursuant to any Award in respect of any Performance
Period shall exceed $3 million.   If the
Committee determines in good faith that there is a reasonable likelihood that
any compensation paid or payable to a Participant by the Company or a
Subsidiary pursuant to the Plan for a Plan Year would not be deductible by the
Company or the Subsidiary solely by reason of the limitation under Section

 

 

162(m) of the Code, the Committee may reduce all or a portion of the
amounts otherwise payable pursuant to the Plan to the extent deemed necessary
by the Committee to ensure that the entire amount of any distribution to such
Participant is deductible.

 

Section 2

 

Section 7.2
of the Plan is amended to read as follows

 

7.2        Termination
for Reasons Other than Death, Disability or Retirement.  In the event a Participant’s employment is
terminated with the Company and all Subsidiaries prior to the end of the
Performance Period for any reason other than death, Disability or Retirement,
or a Participant is in the employ of a Subsidiary and the Subsidiary ceases to be
a Subsidiary of the Company (unless the Participant continues in the employ of
the Company or another Subsidiary), the Participant’s Award for such
Performance Period shall be immediately forfeited and the Participant shall
have no right to any payment thereafter; provided, however, that under such
circumstances the Committee may pay the Participant an amount not to exceed a
percentage of the amount earned according to the terms of the Award equal to
the portion of the Performance Period through the Participant’s
termination.  Any amount paid to the
Participant shall be made no later than 21⁄2 months after the end of the Plan
Year of such Performance Period.EXHIBIT (10)T

 

NAMED EXECUTIVE OFFICER

SALARY, STOCK OPTIONS AND BONUS TABLE

NEO Table

 

The table
below sets forth (i) base salaries established for the 2005 fiscal year for the
individuals who served as the Company’s Chief Executive Officer during 2004 (Allan
L. Schuman was CEO from January 1, 2004 to June 30, 2004, and Douglas M. Baker,
Jr. from July 1, 2004 to December 31, 2004) and the next four most-highly
compensated executive officers who were serving in those capacities at December
31, 2004 (the “NEOs”); (ii) stock options granted for the 2005 fiscal year for
the NEOs, which are listed in the table as 2004 grants; and (iii) bonuses paid
to the NEOs for the 2004 fiscal year. 
Although the reload feature was eliminated for option grants subsequent
to 2002, certain past grants provided for a one-time automatic grant of a
reload stock option if the optionee exercises the original stock option by
tendering shares of previously owned Common Stock of the Company.  The reload option (i) is for the same number
of shares tendered to exercise the original stock option and the number of
shares required to be withheld to satisfy minimum statutory tax obligations,
(ii) has an exercise price equal to the fair market value of the Company’s
Common Stock on the reload grant date, and (iii) is immediately exercisable at
any time during the remaining exercise term of the original stock option.

 

	
   

  	
   

  	
  Salary

  	
   

  	
  Option Grant

  	
   

  	
  Bonus

  	
   

  
	
  Name and Principal Position

  	
   

  	
  Year

  	
   

  	
  Amount

  	
   

  	
  Year

  	
   

  	
  Initial

  	
   

  	
  Reloads

  	
   

  	
  Year

  	
   

  	
  Amount

  	
   

  
	
  Allan L. Schuman,

  Chairman of the Board and retired Chief Executive Officer

  	
   

  	
  2005

  	
   

  	
  $

  	
  500,000

  	
  (1)

  	
  2004

  	
   

  	
  310,000 

  	
  (1)

  	
  711,162

  	
   

  	
  2004

  	
   

  	
  $

  	
  1,500,000

  	
  (1)

  
	
   

  	
  2004

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  2003

  	
   

  	
  650,000

  	
   

  	
  0

  	
   

  	
  2003

  	
   

  	
  $

  	
   1,662,500

  	
   

  
	
   

  	
  2003

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  2002

  	
   

  	
  640,000

  	
   

  	
  0

  	
   

  	
  2002

  	
   

  	
  $

  	
   1,500,000

  	
   

  
	
  Douglas M. Baker, Jr.,

  President and Chief Executive Officer

  	
   

  	
  2005

  	
   

  	
  $

  	
  700,000

  	
   

  	
  2004

  	
   

  	
  314,000

  	
   

  	
  0

  	
   

  	
  2004

  	
   

  	
  $

  	
   850,000

  	
   

  
	
   

  	
  2004

  	
   

  	
  $

  	
  625,000

  	
   

  	
  2003

  	
   

  	
  220,000

  	
   

  	
  0

  	
   

  	
  2003

  	
   

  	
  $

  	
   400,000

  	
   

  
	
   

  	
  2003

  	
   

  	
  $

  	
  475,000

  	
   

  	
  2002

  	
   

  	
  220,000

  	
   

  	
  0

  	
   

  	
  2002

  	
   

  	
  $

  	
   400,000

  	
   

  
	
  John P. Spooner,

  President — International

  	
   

  	
  2005

  	
   

  	
  $

  	
  485,000

  	
   

  	
  2004

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  2004

  	
   

  	
  $

  	
   400,000

  	
   

  
	
   

  	
  2004

  	
   

  	
  $

  	
  485,000

  	
   

  	
  2003

  	
   

  	
  100,000

  	
   

  	
  0

  	
   

  	
  2003

  	
   

  	
  $

  	
   330,000

  	
   

  
	
   

  	
  2003

  	
   

  	
  $

  	
  470,000

  	
   

  	
  2002

  	
   

  	
  100,000

  	
   

  	
  0

  	
   

  	
  2002

  	
   

  	
  $

  	
   402,000

  	
   

  
	
  Stephen D. Newlin,

  President — Industrial Sector

  	
   

  	
  2005

  	
   

  	
  $

  	
  475,000

  	
   

  	
  2004

  	
   

  	
  54,100

  	
   

  	
  0

  	
   

  	
  2004

  	
   

  	
  $

  	
   375,000

  	
   

  
	
   

  	
  2004

  	
   

  	
  $

  	
  457,000

  	
   

  	
  2003

  	
   

  	
  100,000

  	
   

  	
  0

  	
   

  	
  2003

  	
   

  	
  $

  	
   112,500

  	
   

  
	
   

  	
  2003

  	
   

  	
  $

  	
  225,000

  	
   

  	
  2002

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  2002

  	
   

  	
  N/A

  	
   

  
	
  Steven L. Fritze, Executive

  Vice President and Chief Financial Officer

  	
   

  	
  2005

  	
   

  	
  $

  	
  380,000

  	
   

  	
  2004

  	
   

  	
  88,200

  	
   

  	
  0

  	
   

  	
  2004

  	
   

  	
  $

  	
   371,000

  	
   

  
	
   

  	
  2004

  	
   

  	
  $

  	
  345,500

  	
   

  	
  2003

  	
   

  	
  100,000

  	
   

  	
  0

  	
   

  	
  2003

  	
   

  	
  $

  	
   250,000

  	
   

  
	
   

  	
  2003

  	
   

  	
  $

  	
  320,000

  	
   

  	
  2002

  	
   

  	
  140,000

  	
   

  	
  0

  	
   

  	
  2002

  	
   

  	
  $

  	
   258,200

  	
   

  
	
  Lawrence T. Bell,

  Senior Vice President, General Counsel and Secretary

  	
   

  	
  2005

  	
   

  	
  $

  	
  330,000

  	
   

  	
  2004

  	
   

  	
  54,100

  	
   

  	
  0

  	
   

  	
  2004

  	
   

  	
  $

  	
   307,500

  	
   

  
	
   

  	
  2004

  	
   

  	
  $

  	
  315,000

  	
   

  	
  2003

  	
   

  	
  70,000

  	
   

  	
  0

  	
   

  	
  2003

  	
   

  	
  $

  	
   202,800

  	
   

  
	
   

  	
  2003

  	
   

  	
  $

  	
  300,000

  	
   

  	
  2002

  	
   

  	
  117,000

  	
   

  	
  0

  	
   

  	
  2002

  	
   

  	
  $

  	
   228,600

  	
   

  

 

(1) Amount of
compensation established pursuant to the terms of transition arrangements dated
February 28, 2004 between the Company and Mr. Schuman relating to Mr. Schuman’s
retirement on December 31, 2004.

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