Document:

EXHIBIT (10)L(ii)

 

AMENDMENT NO. 1

TO

THE ECOLAB MIRROR SAVINGS PLAN

(As Amended and Restated Effective as of March 1, 2002)

WITH RESPECT TO

THE AMERICAN JOBS CREATION ACT OF 2004

 

WHEREAS, Ecolab Inc. (the “Company”) adopted an
amended and restated Ecolab Mirror Savings Plan (the “Plan”) effective as of
March 1, 2002; and

 

WHEREAS, the Plan is classified as a “nonqualified
deferred compensation plan” under the Internal Revenue Code of 1986, as amended
(the “Code”); and

 

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

 

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

 

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

 

WHEREAS, pursuant to Article V of the Plan, all Mirror
Savings Plan Benefits under the Plan are 100% vested (subject to certain
non-service related forfeiture provisions); and

 

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

 

NOW THEREFORE, pursuant to Section 1.3 of the Plan and
Section 5.1 of the Administrative Document, the Company hereby adopts this
Amendment No. 1 to the Plan, which amendment is intended to (1) allow amounts
deferred prior to January 1, 2005 to qualify for “grandfathered” status and 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
Plan as in effect before the adoption of this Amendment No. 1) and (2) cause
amounts deferred after December 31, 2004 to be deferred in compliance with the
requirements of Code Section 409A.

 

Words used herein with initial capital letters that are defined in the
Plan are used herein as so defined.

 

Section 1

 

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

 

“SECTION 1.4       American
Jobs Creation Act (AJCA).

 

(1)           It is
intended that the Plan (including any 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 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 be administered in a manner that will comply with
Section 409A of the Code, including proposed, temporary or final regulations or
any other guidance issued by the Secretary of the Treasury and the Internal
Revenue Service with respect thereto (collectively with the AJCA, the “AJCA
Guidance”).  Any Plan provision that
would cause the Plan to fail to satisfy Section 409A of the Code (including any
provision added by Amendment No. 1 thereto) 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).

 

(2)           The
Administrator shall not take any action hereunder that would violate any
provision of Section 409A of the Code. 
It is intended that all Executives’ elections hereunder will comply with
Code Section 409A and the AJCA 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 AJCA
Guidance.

 

(3)           The
effective date of Amendment No. 1 to this Plan is January 1, 2005.  Amendment No. 1 creates two separate
Sub-Accounts for each Executive’s Mirror Savings Benefits hereunder — (a) the “Pre-2005
Sub-Account” for amounts that are “deferred” (as such terms is defined in the
AJCA Guidance) as of December 31, 2004 (and earnings thereon) and (b) the “Post-2004
Sub-Account” for amounts that are deferred after December 31, 2004 (and
earnings thereon).  Amendment No. 1 also
modifies the distribution elections and provisions for the Post-2004
Sub-Accounts to comply with the requirements of Code Section 409A.

 

(4)           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 the effective date of Amendment No.
1 thereto.  In particular, to the extent
permitted under AJCA Guidance, (a) 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 and (b) the forfeiture provisions of Section
5.1(2) hereof shall not result in amounts that are allocated the Executive’s
Pre-2005 Sub-Account losing their grandfathered status under Section 409A of
the Code.”

 

Section 2

 

Section 2.1 of the Plan is hereby amended by adding
the following sentence to the end thereof, to read as follows:

 

“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
AJCA 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).”

 

Section 3

 

Section 2.5 of the Plan is hereby amended in its
entirety to read as follows:

 

“SECTION 2.5.      “Disability”
or “Disabled.”  With respect to an
Executive’s Post-2004 Sub-Account, an Executive shall be deemed to have a “Disability”
or be “Disabled” if the Executive (1) is unable to engage

 

2

 

in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than
twelve months, or (2) is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than twelve months, receiving
income replacement benefits for a period of not less than three months under an
Employer-sponsored accident and health plan. 
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 active
employment with an Employer ceased 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.”

 

Section 4

 

Section 2.15 of the Plan is hereby amended in its
entirety to read as follows:

 

“SECTION 2.15.    “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 or a
dependent within the meaning of Code Section 152, (2) loss of the Executive’s
property due to casualty 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.”

 

Section 5

 

Article II of the Plan is hereby amended by adding the
following new Sections to the end thereof, to read as follows:

 

“SECTION 2.16.    “Key
Employees” shall mean a key employee, 
as defined in Section 416(i) of the Code (without regard to paragraph
(5) thereof) of an Employer so long as the Employer is a corporation, any stock
in which is publicly traded on an established securities market or otherwise.

 

SECTION 2.17.      “Termination of
Employment” means a separation of service as defined in the AJCA Guidance
issued under Code Section 409A.

 

SECTION 2.18.      “Total Salary Deferrals” means the sum of Salary Deferrals, as defined in
Section 3.1(1), plus the maximum before-tax savings contributions required to
be allocated to the Executive’s account under the Savings Plan to attract the
maximum matching contribution thereunder, based on the Executive’s Base Salary
for the Plan Year.”

 

Section 6

 

Article III of the Plan is hereby amended in its
entirety to read as follows:

 

“ARTICLE III

 

3

 

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
prior to the first day of any Plan year thereafter, 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 (i) by a specified dollar amount or percentage, and/or (ii)
by an amount, determined by the Administrator, that is equal to five percent of
the 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 during the Plan Year (i) by a specified
dollar amount or percentage, and/or (ii) 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) for the Plan Year (limited to a maximum Bonus Deferral
of 25% of the Executive’s Bonus) (the “Bonus Deferrals”), and

 

(3)           to
credit the amounts described in paragraphs (a) and (b) of this Subsection
(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 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 such direction made in accordance with
Section 3.1 shall remain in effect for subsequent periods described in Section
3.1 unless terminated by the Executive by written notice to the Administrator,
on a form provided by the Administrator, prior to the first day of such
subsequent period.  Notwithstanding the
foregoing, all Executives shall be required to make a deferral election for the
2005 Plan Year 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)           To
the extent permitted by Code Section 409A, an Executive’s direction pursuant to
Section 3.1 shall automatically terminate on (i) the date the Executive ceases
employment with the Employers, (ii) the date on which the Executive’s Employer
is deemed Insolvent, or (iii) the date the Plan is terminated.

 

(b)           To
the extent permitted by Code Section 409A, an Executive’s direction pursuant to
Section 3.1 shall automatically be suspended from the first day of the first
payroll period in which the Executive receives a hardship distribution under
the Savings Plan until the six-month anniversary date of such hardship
distribution but will automatically be reinstated thereafter (unless otherwise
changed in accordance with Subsection (1) hereof).

 

4

 

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 Executive’s Total Salary
Deferrals which do not exceed 3% of the Executive’s Base Salary and (2) 50% of
the Executive’s Total 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 his 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 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 to the Plan Year in which the Bonus was earned (excluding
severance) over the maximum compensation which could be 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

 

5

 

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; and

 

(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 Code Section 409A.

 

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.

 

Section 7

 

Section 4.1(1)(a) of the Plan is hereby amended in its
entirety to read as follows:

 

“(a)         An Executive
shall be entitled to receive his Account upon the earlier of (i) his becoming
Disabled or (ii) his 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, upon his Termination of
Employment); provided, however, in no event shall distribution be made, or
commence to be made, with respect to a Key Employee before the date that is six
months after the date of Termination of Employment of the Key Employee (or, if
earlier, the date of death), to the extent that Code Section 409A(a)(2)(B)(i)
is applicable.”

 

Section 8

 

The last sentence of Section 4.1(1)(b) of the Plan is
hereby amended in its entirety to read as follows:

 

“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 Code Section 409A, by cessation of the
Executive Deferrals under this Plan.”

 

Section 9

 

Section 4.1(1)(c) of the Plan is hereby amended by
adding the following clause to the end thereof: 
“; to the extent permitted by Code Section 409A.”

 

Section 10

 

Section 4.2(2)(b) of the Plan is hereby amended by
changing the parenthetical therein to read as follows:

 

“(or the remaining installments thereof from an
Executive’s Pre-2005 Sub-Account if payment to the Executive had commenced).”

 

Section 11

 

Section 4.2(2)(c) of the Plan is hereby amended in its
entirety to read as follows:

 

6

 

“(c)         Small
Benefits.  Notwithstanding any
provision of the Plan to the contrary, in the event that an Executive’s Mirror
Savings Benefit does not exceed $25,000 (or such lesser amount required to
comply with the requirements of Code Section 409A), such Benefit shall be paid
to the Executive in the form of a single lump sum payment.”

 

Section 12

 

Section 4.2(3)(a) of the Plan is hereby amended by
adding the following new clause to the end thereof, to read as follows:

 

“; provided, however, the election provided by this
Section 4.2(3) shall apply only to the Executive’s Pre-2005 Sub-Account (other
than the Executive’s Minimum Benefit), and shall not apply to the Executive’s
Post-2004 Sub-Account.”

 

Section 13

 

The first sentence of Section 6.1(2) of the Plan is
hereby amended in its entirety to read as follows:

 

To the extent permitted by Code Section 409A, 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, as in effect
on December 31, 2004.”

 

Section 14

 

Section 7.1 of the Plan is hereby amended by adding
the following new clause to the end thereof, to read as follows:

 

“; 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 Code Section 409A and the AJCA Guidance.”

 

Section 15

 

The last three sentences of Section 7.2 of the Plan
are amended in their entirety to read as follows:

 

“To the extent permitted by Code Section 409A, in the
event that any payment or benefit intended to be provided under this Plan or
otherwise is required to be reduced pursuant to this Section, the Executive (in
his or her sole discretion) shall be entitled to designate the payments and/or
benefits to be so reduced in order to give effect to this Section.  The Company shall provide the Executive with
all information reasonably requested by the Executive to permit the Executive
to make such designation.  In the event
that the Executive fails to make such designation within ten (10) business days
of receiving such information, the Company may effect such reduction in any
manner it deems appropriate, to the extent permitted by Code Section 409A.”

 

Section 16

 

Section 7.3(2)(b)(iii) of the Plan is amended it its
entirety to read as follows:

 

“to the extent permitted by Code Section 409A, 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

 

7

 

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 Sections 451 or 409A or any successor provisions 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 assets shall revert to the Company.”

 

Section 17

 

Section 7.3(2)(g) of the Plan is amended by adding the
following new clause to the end thereof, to read as follows”

 

“; 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 Code
Section 409A and the AJCA Guidance.”

 

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

  
				

 

8EXHIBIT (10)M(ii)

 

AMENDMENT NO. 1 AND INSTRUMENT OF
BENEFIT FREEZE

TO THE ECOLAB MIRROR PENSION PLAN

(As Amended and Restated effective January 1, 2003)

WITH RESPECT TO

THE AMERICAN JOBS CREATION ACT OF 2004

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

Section 1

 

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

 

“Section 1.4           American
Jobs Creation Act (AJCA).

 

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

 

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

 

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

 

Section 2

 

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

 

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

 

2

 

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

 

Section 3

 

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

 

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

 

Section 4

 

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

 

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

 

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

 

	
   

  	
  ECOLAB INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steven L. Fritze

  
	
   

  	
  Steven L. Fritze

  
	
   

  	
  Executive Vice
  President and

  
	
   

  	
  Chief Financial Officer

  
	
   

  
	
  (Seal)

  
	
   

  
	
  Attest:

  
	
   

  
	
   

  
	
  /s/ Lawrence T.
  Bell

  	
   

  
	
  Lawrence T. Bell

  
	
  Senior Vice President,

  
	
  General Counsel and Secretary

  
				

 

3

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