ECOLAB MIRROR PENSION PLAN by ECOLAB INC
Company: ECOLAB INC
SEC CIK: 31462
SEC Type: EX-10.15
SIC Code: 2840
SIC Industry: SOAP, DETERGENT, CLEANING PREPARATIONS, PERFUMES, COSMETICS
Date Filed: 2012-02-28
ECOLAB MIRROR PENSION PLAN
(As Amended and Restated Effective January 1, 2011)
ECOLAB MIRROR PENSION PLAN
(As Amended and Restated Effective as of January 1, 2011)
WHEREAS, Ecolab Inc. (the Company) has established the Ecolab Pension Plan (the Pension Plan), a qualified defined benefit pension plan; and
WHEREAS, Sections 401(a)(17) and 415 of the Code place certain limitations on the amount of benefits that would otherwise be made available under the Pension Plan for certain participants; and
WHEREAS, the Company previously established the Ecolab Mirror Pension Plan (the Plan) to provide the benefits which would otherwise have been payable to such participants under the Pension Plan except for such limitations, in consideration of services performed and to be performed by such participants for the Company and certain related corporations; and
WHEREAS, the American Jobs Creation Act of 2004, PX. 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, before the issuance by the U.S. Treasury and the Internal Revenue Service (the IRS) of interpretive guidance with respect to Code Section 409A, the Company amended the Plan to temporarily freeze the accrual of Mirror Pension Benefits hereunder as of December 31, 2004; and
WHEREAS, the IRS and U.S. Treasury subsequently issued regulations and other guidance regarding the requirements of and compliance with Code Section 409A; and
WHEREAS, the Board of Directors of the Company directed and authorized appropriate officers of the Company to amend the Plan to (a) reinstate the accrual of Mirror Pension Benefits, effective retroactively as of January 1, 2005 and (b) comply, with respect to the Non-Grandfathered Mirror Pension Benefits thereunder, with the requirements of Code Section 409 and guidance issued thereunder; and
WHEREAS, the Plan was amended and restated in its entirety, effective as of January 1, 2005; and
WHEREAS, the Board of Directors of the Company authorized the appropriate officers of the Company to amend the Plan (i) to use the lump sum actuarial factors to determine the annual installment payment amount (including an increase in installment payments that were commenced prior to January 1, 2011), and (ii) to include an actuarial increase in the non-grandfathered portion of any Standard Mirror Pension Benefit payments that are required to be deferred as a result of the five (5) year redeferral rule to a date that is after the later of termination of employment or age 62; and
WHEREAS, the Plan was amended and restated in its entirety, effective as of December 31, 2010; and
WHEREAS, the Company wishes to clarify ambiguous language in the Plan document.
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, 2011, to read as follows:
Section 1.1 Effective Date.
(1) The effective date of this amended and restated Plan is January 1, 2011.
(2) The benefit, if any, payable with respect to a former Executive who Retired or died prior to January 1, 2005 (and who is not rehired by a member of the Controlled Group thereafter) shall be determined by, and paid in accordance with, the terms and provisions of the Plan as in effect prior to January 1, 2005, subject to Section 1.4 and 3.2(2)(c). Notwithstanding any provision of the Plan to the contrary, an Executives Mirror Pension Benefit (which was temporarily frozen from December 31, 2004 through December 31, 2008) shall be retroactively adjusted on January 1, 2009 to reflect the benefit that would have been accrued by the Executive under the Plan, in accordance with Section 3.1, during the period commencing on January 1, 2005 and ending on the earlier of December 31, 2008 or the date on which the Executive terminates his services with all Employers as an employee.
Section 1.2 Purpose of the Plan. The purpose of this Plan is to provide additional retirement benefits for certain management and highly compensated employees of the Company who perform management and professional functions for the Company and certain related entities.
Section 1.3 Administrative Document. This Plan includes the Ecolab Inc. Administrative Document for Non-Qualified Benefit Plans (the Administrative Document), which is incorporated herein by reference.
Section 1.4 American Jobs Creation Act of 2004 (AJCA).
(1) To the extent applicable, it is intended that the Plan (including all Amendments thereto) comply with the provisions of Code Section 409A, as enacted by the American Jobs Creation Act of 2004, P.L. 108-357 (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 Code Section 409A, including 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 409A Guidance). All Plan provisions shall be interpreted in a manner consistent with the 409A Guidance.
(2) The Administrator shall not take any action hereunder that would violate any provision of Code Section 409A. The Administrator is authorized to adopt rules or regulations deemed necessary or appropriate in connection with the 409A Guidance to anticipate and/or comply with the requirements thereof (including any transition or grandfather rules thereunder).
(3) Notwithstanding any provision of the Plan, any Grandfathered Mirror Pension Benefits (including any Mirror Pre-Retirement Pension Benefits attributable thereto) 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, except as otherwise provided herein. Notwithstanding any provision of the Plan to the contrary, neither the Company nor the Administrator guarantee to any Executive or Death Beneficiary any specific tax consequences of participation in or entitlement to or receipt of benefits from, the Plan, and each Executive or the Executives Death Beneficiary shall be solely responsible for payment of any taxes or penalties incurred in connection with his participation in the Plan.
Words and phrases used herein with initial capital letters which are defined in the Administrative Document or the Pension Plan 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:
Section 2.1 Actuarial Equivalent or Actuarially Equivalent. A benefit is the Actuarial Equivalent of another benefit if, on the basis of Actuarial Factors, the present values of such benefits are equal.
Section 2.2 Actuarial Factors shall mean the actuarial assumptions set forth in Exhibit A which is attached to and forms a part of this Plan.
Section 2.3 Code Limitations shall mean the limitations imposed by Code Sections 401(a)(17) and 415, or any successor(s) thereto, on the amount of the benefits which may be payable to or with respect to an Executive from the Pension Plan.
Section 2.4 Death Beneficiary shall mean the beneficiary designated under this Plan and the SERP. The designation of a Death Beneficiary may be made, and may be revoked or changed only by an instrument (in form prescribed by Administrator) signed by the Executive and delivered to the Administrator during the Executives lifetime. 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. Any Mirror Pension Benefits remaining to be paid after the death of a Death Beneficiary (or a contingent Death Beneficiary, to the extent designated by the Executive) shall be paid to the Death Beneficiarys estate. If no Death Beneficiary is designated by the Executive or all designated Death Beneficiaries predecease the Executive, the Executives Death Beneficiary shall be his spouse, and if there is no surviving spouse, then the Executives estate. The most recent Death Beneficiary designation on file with the Administrator will be given effect, and in the event of conflicting forms files simultaneously under this Plan and the SERP, the Death Beneficiary designation under the SERP will govern.
Section 2.5 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 Executive to be unable to perform the duties of his position of employment or any substantially similar position of employment.
Section 2.6 Executive shall mean an Employee of an Employer (1) whose Annual Compensation from the Employers for the preceding Plan Year exceeds the dollar limitation described in Code Section 401(a)(17), (2) who is a Participant in the Pension Plan, and (3) who is selected by the Administrator to participate in the Plan. Once an Employee has satisfied the requirements of an Executive and commenced participation in the Plan, his participation may continue, notwithstanding the fact that his Annual Compensation is reduced below the limitation described in Code Section 401(a)(17), until the Administrator determines, in his sole discretion, that the Employee would fail to satisfy the requirements of a management or highly compensated employee under ERISA.
Section 2.7 Grandfathered Mirror Pension Benefit shall mean the portion of an Executives Mirror Pension Benefit that is deemed to have been deferred (within the meaning of the 409A Guidance)
under the Plan before January 1, 2005 and that is equal to the present value as of December 31, 2004 of the vested Mirror Pension Benefit to which the Executive would be entitled under the Plan, as in effect on October 3, 2004, if the Executive voluntarily terminated employment with the Controlled Group without cause on December 31, 2004, and received a payment, on the earliest possible date allowed under the Plan, of his Mirror Pension Benefit in the form with the maximum value (increased in subsequent years to equal the present value of the benefit the Executive actually becomes entitled to receive, in the form and at the time actually paid, determined under the terms of the Plan as in effect on October 3, 2004, without regard to any services rendered or Compensation increases applicable after December 31, 2004).
Section 2.8 Mirror Savings Plan shall mean the Ecolab Mirror Savings Plan, as such plan may be amended from time to time.
Section 2.9 Mirror Pension Benefit shall mean the retirement benefit determined under Article III.
Section 2.10 Mirror Pre-Retirement Pension Benefit shall mean the pre-retirement benefit determined under Article IV.
Section 2.11 Non-Grandfathered Mirror Pension Benefit shall mean any Mirror Pension Benefit that is not a Grandfathered Mirror Pension Benefit.
Section 2.12 Plan shall mean this Ecolab Mirror Pension Plan, as it may be amended from time to time.
Section 2.13 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 the Executive (1) is on military leave, sick leave, or other bona fide leave of absence that does not exceed six (6) months (or, in the case of Disability, twelve (12) months), or if longer, the period during which the Executives 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 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 Executive provided services (whether as an employee or as an independent contractor) if the Executive has been providing services for less than 36 months). With respect to the terms of the Plan affecting Non-Grandfathered Mirror Pension Benefits, any reference to termination of employment in the Plan shall mean Separation from Service as defined in this Section. Whether an Executive has incurred a Separation from Service shall be determined in accordance with the 409A Guidance.
Section 2.14 SERP shall mean the Ecolab Supplemental Executive Retirement Plan, as in effect from time to time.
Section 2.15 SERP Benefit shall mean an Executives benefit accrued under the SERP.
Section 2.16 Specified Employee shall mean Specified Employee as defined in the Administrative Document.
MIRROR PENSION BENEFITS
Section 3.1 Amount of Mirror Pension Benefits.
(1) In General. Each Executive whose benefits under the Pension Plan payable on or after the Effective Date are reduced due to the Code Limitations shall be entitled to a Mirror Pension Benefit, which shall be determined as hereinafter provided.
(2) Standard Mirror Pension Benefits. The Standard Mirror Pension Benefit shall be a monthly retirement benefit calculated using the final average pay benefit formula specified in Article 4 of the Pension Plan equal to the difference between (a) and (b), where:
(a) = the amount of the monthly benefit payable to the Executive under the Pension Plan calculated on a single life annuity basis commencing at age 65, determined under the Pension Plan as in effect on the date of the Executives termination of employment with the Controlled Group but calculated as if (i) the Pension Plan did not contain the Code Limitations, and (ii) the definition of Annual Compensation under the Pension Plan included the Executives deferrals under the Mirror Savings Plan or its predecessor plan; and
(b) = the amount of the monthly benefit which would be payable to the Executive under the Pension Plan calculated on a single life annuity basis commencing at age 65, determined under the Pension Plan as in effect on the date of the Executives termination of employment with the Controlled Group.
As a consequence of the freezing of benefit accruals under Section 4 of