EXHIBIT (10)N
ECOLAB INC.
ADMINISTRATIVE DOCUMENT FOR
NON-QUALIFIED BENEFIT PLANS
(As Amended and Restated
Effective as of January 1, 2005)
Ecolab Inc. (the
“Company”) hereby amends and completely restates this
Administrative Document (the “Administrative Document”)
which provides for the administration of the non-qualified benefit
plans listed on Exhibit A hereto (collectively, the
“Plans” and individually, a “Plan”) which
have been established by the Company for purposes of providing
benefits to certain management and highly compensated employees who
perform management and professional functions for the Company and
certain related entities. This Administrative Document is
incorporated by reference in and is a part of each of the
Plans.
ARTICLE I
DEFINITIONS
Words and phrases used in this
Administrative Document and in the Plans with initial capital
letters which are defined in the Pension Plan are used in this
Administrative Document and in the Plans as so defined, unless
otherwise specifically defined herein or in the Plans or the
context clearly indicates otherwise. Words and phrases used
in this Administrative Document with initial capital letters which
are defined in the Plans are used herein as so defined. The
following words and phrases when used in this Administrative
Document or in the Plans with initial capital letters shall have
the following respective meanings, unless the context clearly
indicates otherwise or a particular Plan provides differently with
respect to its own provisions:
Section 1.1
“ Administrator ” shall mean the person
authorized to perform the administrative duties under the Plans
pursuant to Section 4.1.
Section 1.2
“ Annual Compensation ” for a Plan Year shall
mean the sum of (1) the Executive’s base salary,
commission and annual incentive bonuses paid in cash (but not long
term incentive bonuses) which are reportable by the Employer for
federal income tax purposes as “wages” for such Plan
Year, (2) any salary reductions caused as a result of
participation in an Employer-sponsored plan which is governed by
Section 401(k), 132(f)(4) or 125 of the Code, and
(3) any salary reductions caused as a result of participation
in the Ecolab Mirror Savings Plan or its precessor plan , and
(4) severance pay (not in excess of 52 weeks’ duration
effective as of January 1, 2002) which will be deemed to have
been paid in regular, payroll dates at the Executive’s
regular rate of compensation in effect prior to his termination of
employment even if such severance pay is, in fact, paid in a lump
sum or other accelerated manner.
Section 1.3
“ Benefit ” shall mean a Mirror Pension Benefit,
a Mirror Pre-Retirement Pension Benefit, a SERP Benefit, a SERP
Pre-Retirement Benefit, a Mirror Savings Benefit, an Executive
Death Benefit or an Executive Disability Benefit, as
applicable.
Section 1.4
“Change in Control .” A “Change in
Control “ shall be deemed to have occurred if the event set
forth in any one of the following Subsections shall have
occurred:
(1)
any “person” as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (“Exchange Act”) (other than the Company,
any trustee or
other fiduciary holding securities under any
employee benefit plan of the Company, or any corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of
the Company), is or becomes, including pursuant to a tender or
exchange offer for shares of the common stock of the Company
(“Common Stock”) pursuant to which purchases are made,
the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Company representing 25% or more of the combined voting power
of the Company’s then outstanding securities, other than in a
transaction arranged or approved by the Board of Directors of the
Company (the “Board”) prior to its occurrence;
provided, however, that if any such person will become the
beneficial owner, directly or indirectly, of securities of the
Company representing 34% or more of the combined voting power of
the Company’s then outstanding securities, a Change in
Control will be deemed to occur whether or not any or all of such
beneficial ownership is obtained in a transaction arranged or
approved by the Board prior to its occurrence, and other than in a
transaction in which such person will have executed a written
agreement with the Company (and approved by the Board) on or prior
to the date on which such person becomes the beneficial owner of
25% or more of the combined voting power of the Company’s
then outstanding securities, which agreement imposes one or more
limitations on the amount of such person’s beneficial
ownership of shares of Common Stock, if, and so long as, such
agreement (or any amendment thereto approved by the Board provided
that no such amendment will cure any prior breach of such agreement
or any amendment thereto) continues to be binding on such person
and such person is in compliance (as determined by the Board in its
sole discretion) with the terms of such agreement (including such
amendment); provided, however that if any such person will become
the beneficial owner, directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power of
the Company’s then outstanding securities, a Change in
Control will be deemed to occur whether or not such beneficial
ownership was held in compliance with such a binding agreement, and
provided further that the provisions if this Subsection
(1) shall not be applicable to a transaction in which a
corporation becomes the owner of all the Company’s
outstanding securities in a transaction which complies with the
provisions of Subsection (3) of this Section (e.g., a
reverse triangular merger); or
(2)
during any thirty-six consecutive calendar months, individuals who
constitute the Board on the first day of such period or any new
director (other than a director whose initial assumption of office
is in connection with an actual or threatened election contest
including, but not limited to, a consent solicitation, relating to
the election of directors of the Company) whose appointment or
election by the Board or nomination for election by the
Company’s stockholders was approved or recommended by a vote
of at least two-thirds (2/3) of the directors then still in office
who were either directors on the first day of such period, or whose
appointment, election or nomination for election was previously so
approved or recommended, shall cease for any reason to constitute
at least a majority thereof; or
(3)
there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent
thereof) more than 50% of the combined voting power of the
securities of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger or
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consolidation, and in which no
“person” (as defined under Subsection (1) above)
acquires 50% or more of the combined voting power of the securities
of the Company or such surviving entity or parent thereof
outstanding immediately after such merger or consolidation;
or
(4)
the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated
an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale
or disposition by the Company of all or substantially all of the
Company’s assets to an entity, more than 50% of the combined
voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions
as their ownership of the Company immediately prior to such
sale.
Section 1.5
“ Code ” shall mean the Internal Revenue Code of
1986, as amended.
Section 1.6
“ Company ” shall mean Ecolab Inc., a Delaware
corporation or its successor(s).
Section 1.7
“ Controlled Group ” shall mean the Company and
any other corporation or entity, the employees of which, together
with employees of the Company, are required by subsection
(b) or (c) of Code Section 414 to be treated as if
they were employed by a single employer. For purposes of
determining whether a “Separation from Service” has
occurred, members of the Controlled group will be identified in
accordance with Code Section 414(b) or (c), except that
in applying Code Section 1563(a)(1), (2), and (3) for
purposes of Code Section 414(b) or in applying Treas.
Reg. §1.414(c)-2 for purposes of Code Section 414(c), the
language “at least 50 percent” shall be used instead of
the language “at least 80 percent” each place it
appears in such Code and regulations sections.
Section 1.8
“ Employee ” shall mean any person who is
designated by an Employer as a common-law employee and who is
employed on a full-time or substantially full-time
basis.
Section 1.9
“ Employer ” shall mean the Company and any
other member of the Controlled Group that adopts or has adopted one
or more of the Plans pursuant to Section 6.3.
Section 1.10
“ 409A Guidance ” means Section 409A of the
Code and proposed, temporary or final regulations or any other
guidance issued thereunder.
Section 1.11
“ Pension Plan ” shall mean the Ecolab Pension
Plan, as such plan may be amended from time to time.
Section 1.12
“ Plans ” shall mean those non-qualified benefit
plans listed on Exhibit A hereto, as they may be amended from
time to time.
Section 1.13
“ Plan Year ” shall mean a calendar
year.
Section 1.14
“ 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 an Employee (1) is on
military leave, sick leave, or other bona fide leave of absence
that does not
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exceed six (6) months
(or, in the case of disability, twelve (12) months), or if longer,
the period during which the Employee’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 (whether as an employee or as an independent
contractor) 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 Employee provided
services if the Employee 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 Employee to
be unable to perform the duties of his or her position of
employment or any substantially similar position of
employment. Whether an Employee has incurred a Separation
from Service shall be determined in accordance with the 409A
Guidance.
Section 1.15
“ Specified Employee ” shall have the meaning
set forth in Section 6.8.
ARTICLE II
PAYMENT OF BENEFITS
Section 2.1
Special Offset Provision . Notwithstanding any
provision of the Plans to the contrary, if the Administrator (in
his or her sole discretion) determines that an Executive or Death
Beneficiary is indebted to the Controlled Group at the time of a
Benefit payment, the Administrator (in his or her sole discretion)
may reduce any such Benefit by the amount of the indebtedness,
provided, however, that such reduction does not exceed $5,000 in
any Plan Year and the reduction is made at the same time and in the
same amount as the debt otherwise would have been due from the
Executive. An election by the Administrator not to reduce any
such Benefit shall not constitute a waiver of the Controlled
Group’s claim for such indebtedness.
Section 2.2
Withholding/Taxes . To the extent required by
applicable law, the Company shall withhold (or cause to be
withheld) from the Benefit payments any taxes required to be
withheld by any federal, state or local government.
Section 2.3
Adjustments . Notwithstanding any provision of the
Plans to the contrary, if an Executive or Death Beneficiary
receives Benefits for any period that exceed the aggregate Benefits
properly payable for such period, the Administrator (in his or her
sole discretion) may, to the extent permitted by the 409A Guidance,
make any adjustment he or she deems advisable to future Benefits
due to the Executive or Death Beneficiary under the Plans until the
aggregate amount of such adjustments equals the aggregate amount of
the excess Benefits paid. The provisions of this
Section shall not be construed to provide the exclusive means
of recovering excess payments to an Executive or Death Beneficiary,
and the Administrator may take such other action as he or she deems
advisable to recover the amount of excess Benefits that were paid
to the Executive or Death Beneficiary.
Section 2.4
Death Beneficiary Designations .
(1)
Absence of Designation . If the Executive fails to
designate a Death Beneficiary under the Plans, or at any other time
when there is no existing Death Beneficiary
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designated by the Executive,
the Executive’s Death Beneficiary shall be his surviving
spouse or, if none, his estate.
(2)
Ambiguous Death Beneficiary Designation . In the event
that the most recent Death Beneficiary designation filed prior to
the Executive’s death is ambiguous or incapable of reasonable
construction,
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