Exhibit 10
ECOLAB INC.
MANAGEMENT PERFORMANCE INCENTIVE
PLAN
(as amended and restated on
February 27, 2009)
1.
Purpose of Plan.
The purpose of the Ecolab Inc.
Management Performance Incentive Plan, as amended (the
“Plan”) is to advance the interests of Ecolab Inc. (the
“Company”) and its stockholders by enabling the Company
and its Subsidiaries to attract and retain key executives of
outstanding ability, by focusing such key executives on
pre-established, objective performance goals and by providing such
key executives with opportunities to earn financial rewards based
on the achievement of such performance goals. The Plan is
intended to constitute a qualified performance-based compensation
plan under Section 162(m)(4)(C) of the Internal Revenue
Code of 1986, as amended (the “Code”) and shall be
administered and interpreted so as to ensure such compliance. In
addition, the Plan is intended to be exempt from the requirements
of Section 409A of the Code by reason of the short term
deferral exception under Treas. Reg. Sec.
1.409A-1(b)(4).
2.
Definitions.
For the purposes of the Plan, the
following terms will have the meanings set forth below, unless the
context clearly otherwise requires:
2.1
“Award”
means a right granted to a
Participant pursuant to Section 5 of the Plan to receive a
cash payment from the Company (or a Subsidiary) based upon the
extent to which the Participant’s Performance
Goal(s) are achieved during the relevant Performance Period
and subject to the Committee’s discretion pursuant to
Section 3.1.
2.2
“Board”
means the Board of Directors of the
Company.
2.3
“Code”
is defined in Section 1 of the
Plan.
2.4
“Committee” is defined in Section 3 of the
Plan.
2.5
“Company”
is defined in Section 1 of the
Plan.
2.6
“Covered
Employee” means an
individual who with respect to a Performance Period is a
“covered employee” within the meaning of
Section 162(m)(3) of the Code.
2.7
“Disability” means the disability of the Participant such as
would entitle the Participant to receive disability income benefits
pursuant to the long-term disability plan of the Company or
Subsidiary then covering the Participant or, if no such plan exists
or is applicable to the Participant, a determination by the
Committee that the Participant is permanently and totally disabled
within the meaning of Section 22(e)(3) of the
Code.
2.8
“Executive
Officer” means an
executive officer of the Company within the meaning of
Rule 3b-7 under the Securities Exchange Act of 1934, as
amended.
2.9
“GAAP”
means generally accepted accounting
principles set forth in the opinions, statements and pronouncements
of the Financial Accounting Standards Board, United States (or
predecessors or successors thereto or agencies with similar
functions), or in such other statements by such other entity as may
be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the
date of determination and in any event applied in a manner
consistent with the application thereof used in the preparation of
the Company’s financial statements.
2.10
“Participant”
means an Executive Officer of the
Company to whom an Award is granted by the Committee under the
Plan.
2.11
“Performance
Goal” means a
performance objective established by the Committee for a particular
Participant for a Performance Period pursuant to Section 5 of
the Plan for the purpose of determining the extent to which an
Award has been earned for such Performance Period. Each
Performance Goal will consist of (a) “Performance
Criteria,” as defined in Section 5.2 of the Plan,
which are one or more objectively determinable measures related to
individual, business unit or Company performance, and (b) a
“Performance Target,” which is the level at
which the relevant Performance Criteria must be achieved for
purposes of determining whether a cash payment is to be made under
an Award, which may be stated as a threshold level below which no
payment will be made, a maximum level at or above which full
payment will be made and intermediate targets which will result in
payment between such threshold and maximum level.
2.12
“Performance
Period” means a
Plan Year or, for an Executive Officer who is first hired as,
or first becomes eligible for this Plan as, an Executive Officer
after the first day of the Plan Year and who becomes a Participant
during the Plan Year, such portion of the Plan Year as determined
by the Committee.
2.13
“Plan”
is defined in Section 1 of the
Plan.
2.14
“Plan
Year” means the
fiscal year of the Company.
2.15
“Retirement” means termination of employment at an age and
length of service such that the Participant would be eligible to an
immediate commencement of benefit payments under the final average
compensation formula of the Company’s defined benefit pension
plan available generally to its employees, whether or not such
individual actually elects to commence such payments (provided
that, (i) if the Participant is not covered by the
Company’s defined benefit pension plan, or (ii) if the
Participant is covered under the cash balance formula of such plan,
then the Participant will be deemed to be covered by the final
average compensation formula of such plan for purposes of this
Plan).
2.16
“Subsidiary” means any entity that is directly or indirectly
controlled by the Company, as determined by the
Committee.
3.
Plan
Administration.
3.1
The Committee
. The Plan will be
administered by a committee appointed by the Board consisting
solely of two or more directors, each of whom is an “outside
director” within
2
the meaning of
Section 162(m)(4)(C)(i) of the Code (the
“Committee”). In accordance with and subject to
the provisions of the Plan, the Committee will have full authority
and discretion with respect to Awards made under the Plan,
including without limitation the following:
(a) selecting the Executive Officers to be Participants;
(b) establishing the terms of each Award; (c) determining
the time or times when Awards will be granted; and
(d) establishing the restrictions and other conditions to
which the payment of Awards may be subject. The Committee
will have no authority under the Plan to amend or modify, in any
manner, the terms of any outstanding Award; provided, however, that
(x) the Committee shall have the authority provided for in
Section 3.2 of the Plan; and (y) the Committee shall have
the authority to reduce or eliminate the compensation or other
economic benefit due pursuant to an Award upon the attainment of
one or more Performance Goals included in such Award. Each
determination, interpretation or other action made or taken by the
Committee pursuant to the provisions of the Plan will be conclusive
and binding for all purposes and on all persons, and no member of
the Committee will be liable for any action or determination made
in good faith with respect to the Plan or any Award granted under
the Plan.
3.2
Adjustments
. In the event of (a) any
merger, reorganization, consolidation, recapitalization,
liquidation, reclassification, stock dividend, stock split,
combination of shares, rights, offering, extraordinary dividend
(including a spin-off) or other similar change affecting the
Company’s shares, (b) any purchase, acquisition, sale or
disposition of a significant amount of assets other than in the
ordinary course of business, or of a significant business,
(c) any change resulting from the accounting effects of
discontinued operations, extraordinary income or loss, changes in
accounting as determined under GAAP, or restatement of earnings or
(d) any charge or credit resulting from an item which is
classified as “non-recurring,”
“restructuring,” or similar unusual item on the
Company’s audited annual Statement of Income which, in the
case of (a) — (d), results in a change in the components
of the calculations of any of the Performance Criteria, as
established by the Committee, in each case with respect to the
Company or any other entity whose performance is relevant to the
achievement of any Performance Goal included in an Award, the
Committee (or, if the Company is not the surviving corporation in
any such transaction, a committee of the board of directors of the
surviving corporation consisting solely of two or more
“outside directors” within the meaning of
Section 162(m)(4)(C)(i) of the Code) shall, without the
consent of any affe
