Ecolab Supplemental Executive Retirement Plan, as amended and restated, effective as of January 1, 2022
Exhibit (10.7)
ECOLAB SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(As Amended and Restated Effective as of January 1, 2022)
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 Plan was amended and restated in its entirety, effective as of January 1, 2014, and
WHEREAS, the Plan, as so amended and restated, was further amended by Amendment No. 1, adopted May 6, 2015, and Amendment No. 2, adopted December 2, 2020; and
WHEREAS, the Company wishes to restate the Plan in its entirety to incorporate Amendments No. 1 and 2 and to make certain additional changes;
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, 2022, to read as follows:
PREFACE
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 with initial capital letters shall have the following respective meanings, unless the context clearly indicates otherwise:
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The term “Death Beneficiary” shall mean the beneficiary designated under this Plan and the Mirror Pension Plan. The designation of a Death Beneficiary shall be made in accordance with the Administrative Document; provided that 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.
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SERP BENEFITS
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(1) = | 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 |
(2) = | 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). |
(i) | In General. An Executive’s SERP Benefit shall be paid or commence to be paid within ninety (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 |
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paid as soon as practicable after the end of such ninety (90)-day period, and the first payment hereunder shall include any SERP Benefits not paid as a result of the delay in payment. |
(ii) | Early Commencement. Notwithstanding the provisions of Subsection (a)(i) 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. |
(i) | In General. Except as provided in subsection (ii), 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(b)(iv), and Section 3.4(b)(iv) (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. |
(ii) | 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(b)(iv) and Section 3.4(b)(iv) (as applicable). |
(iii) | Certain Transition Distributions to Terminated Executives. |
(1) | 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 |
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retroactively adjusted pursuant to Section 1.1 on January 1, 2009, in the same form and at the same time as the Executive’s Grandfathered benefit, subject to Section 3.3(b)(iv). Notwithstanding the foregoing, a Cash Balance Participant’s Non-Grandfathered SERP Benefit shall be paid on March 1, 2009, subject to Section 3.3(b)(iv). |
(2) | 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. |
(iv) | 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(b)(i), (iii) or (iii), (ii) the date specified in Section 3.4(b)(iv)(1), 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 six (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). |
(v) | Actuarial Adjustment for Delay on Account of Election Under Section 3.4(b)(iv)(1). If an Executive’s election under Section 3.4(b)(iv)(1) 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 (7½%). |
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(i) | In General. An Executive who does not want his SERP Benefit to be paid in the form of the fifteen (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. |
(ii) | Lump Sum Payment. |
(1) | Notwithstanding the provisions of Subsection (a)(i) of this Section, an Executive may elect to receive the SERP Benefit in the form of a single lump sum payment. |
(2) | 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 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 (iii) of this Section. |
(3) | 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. |
(iii) | 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 2.4), 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 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 |
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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%). |
(i) | Normal Payment Form. Unless an Executive makes an election pursuant to Section 3.4(b)(ii) or (v), 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. |
(ii) | 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: |
(1) | A single life annuity payable monthly to the Executive during the Executive’s life and ending on the date of the Executive’s death. |
(2) | 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 fifty percent (50%), seventy-five percent (75%) or one hundred percent (100%) (as the Executive elects) of such reduced lifetime monthly amount. |
(3) | 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 five (5)- or ten (10)- year period, payable in the same reduced amount for the remainder of such five (5)- or ten (10)-year period, to the Death Beneficiary designated by the Executive. |
(4) | Annual installment payments payable to the Executive over a period of five (5) or ten (10) years, as elected by the Executive. |
(5) | A single lump sum payment. |
(iii) | 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 |
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form of a single lump sum payment on the date of distribution determined under Section 3.3(b). |
(iv) | 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: |
(1) | Except as provided in Section 3.4(b)(v), if an Executive wishes to elect an optional form of payment under Section 3.4(b)(iii) above (other than the normal form of payment) or wishes to change his election made under Section 3.4(b)(v) (other than an election change described in Section 3.4(b)(iv)(2)), the election will be considered made when it becomes irrevocable, which occurs when a properly completed form is received and accepted by the Administrator (but not later than fifteen (15) days following receipt), subject to the following: |
(A) | the election may not take effect until at least twelve (12) months after the date on which the election is made; |
(B) | the election must be made not less than twelve (12) months before the date the payment is scheduled to be paid; and |
(C) | the payment (except in the case of death) pursuant to an election made under this Section 3.4(b)(iv)(1) shall be made or commence on the first day of the month coincident with or immediately following the fifth anniversary of the date the payment was otherwise scheduled to be paid (or for annuity or installment payments treated as a single payment, the date the first amount was otherwise scheduled to be paid). |
(2) | An Executive who elected, pursuant to Section 3.4(b)(iv)(1) or 3.4(b)(v), a life annuity form of payment (within the meaning of the 409A Guidance) described in Section 3.4(b)(ii)(1), (2) or (3), may, at any time before the date of the first payment under the annuity, 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(b)(iv)(1) or Section 3.4(b)(v), remains unchanged. |
(v) | 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(b)(ii), commencing on the date |
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specified in Section 3.3(b)(i) or(ii) (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(b)(iii). 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 (v) 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. |
(vi) | 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(b)(ii) of the Plan or Section 3.3(b)(ii) of the Mirror Pension Plan, the most recent election made under either this Plan or the Mirror Pension Plan that has become effective will govern the form and time of payment under the Plan. In the event of conflicting elections made simultaneously under this Plan and the Mirror Pension Plan, the election filed under this Plan shall govern. Notwithstanding the foregoing, no election made under the Mirror Pension Plan shall apply to the Non-Grandfathered SERP Benefit unless the election satisfies the requirements of Section 3.4(b)(iv). |
(i) | 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 |
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(ii) | Each annual installment due on or after January 1, 2011 will be adjusted to include the increase resulting from the recalculation. |
SERP PRE-RETIREMENT BENEFITS
(i) | 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 (3rd) month after the |
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later of the date on which the Executive would have attained age 55 or the date of the Executive’s death. |
(ii) | 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: |
(1) | 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 (3rd) 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 fifty percent (50%) survivor annuity form of payment described in Section 3.4(b)(ii)(2), survived to age 55 and died on the date following the payment commencement date. |
(2) | 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 (1st) day of the of the third (3rd) 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 one hundred percent (100%) survivor annuity form of payment described in Section 3.4(b)(ii)(2). |
(iii) | Notwithstanding the foregoing, (i) if the SERP Pre-Retirement Benefit under this Subsection (b) 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 ninety (90) days after the Executive’s death, and (ii) if the present value of the SERP Pre-Retirement Benefit under this Subsection (b) 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 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. |
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VESTING
(i) | Notwithstanding the provisions of Subsection (a) hereof, but subject to the requirements of paragraph (ii) 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 by a preponderance of the evidence that one of the foregoing events has occurred. |
(ii) | 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. |
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MISCELLANEOUS
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(i) | 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. |
(ii) | 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: |
(1) | the trustee of the Trust Fund shall be a third party corporate or institutional trustee; |
(2) | the Trust Fund shall satisfy the requirements of a grantor trust under the Code; and |
(3) | 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 |
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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 in proportion to the present value of their vested SERP Benefits 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. |
(iii) | 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). |
(iv) | In January of each year following a funding of the Trust Fund pursuant to paragraph (iii) 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-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. |
(v) | 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. |
(vi) | 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. |
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(vii) | To the extent any benefits are paid directly by an Employer, the obligation of the Trust to pay such benefits shall be discharged and the Employer may be reimbursed from the assets of the Trust. |
(viii) | Notwithstanding any provision of the Plan or the Administrative Document to the contrary, the provisions of this Section 6.4(b) 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. |
IN WITNESS WHEREOF, Ecolab Inc. has executed this Supplemental Executive Retirement Plan and has caused its corporate seal to be affixed this 16th day of December, 2021.
| | | ECOLAB INC. | |||
(Seal) | | | ||||
| | | By: | /s/ Laurie M. Marsh | ||
| | | | Laurie M. Marsh | ||
| | | | EVP Human Resources | ||
Attest: | | | ||||
| | | | |||
By: | /s/ Michael C. McCormick | | | |||
| Michael C. McCormick | | | |||
| EVP & General Counsel | | |
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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 ten (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(a)(ii) or 3.3(b)(i).
A-1
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:
B-1
(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.
B-2
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).
C-1