DESCRIPTION OF ECOLAB INC.
MANAGEMENT INCENTIVE PLAN
The Ecolab Inc. Management Incentive Plan ("MIP") is not set forth in a formal plan document. Set forth below is
a description of the MIP as it applies to the executive officers of Ecolab Inc. (the "Company").
The MIP is a cash-based annual incentive plan that focuses executives' attention on achieving competitive annual
business goals. The Compensation Committee of the Company's Board of Directors (the "Committee"), with
input from management, sets specific performance goals at the beginning of each year and communicates them to
the Company's executives. The Committee also establishes median awards, which are set at a level which
approximates median annual incentive targets expressed as a percentage of base salary of a comparator group
consisting of a broad range of United States manufacturing and service companies. Achievement of median
performance goals will result in a median award, while achievement of performance levels below or above the
median performance goal will result in minimum, premium or maximum awards.
Executives with corporate-wide responsibility earn awards based primarily on the achievement of Earnings Per
Share ("EPS") goals. The Committee establishes annual EPS levels that must be achieved to receive minimum,
median, premium and maximum awards. Economic projections and historical compounded annual EPS growth,
measured over three-year periods for the Standard & Poor's 500 Index, are the basis for the EPS goals.
Executives with business-unit responsibility earn MIP awards by meeting unit-specific operating income goals.
Other financial or strategic factors including, but not limited to, sales, cash flow and management of assets,
working capital and inventory, may also affect the size of the awards provided that the operating income
thresholds are met. The weight of each performance measure varies among business units. Notwithstanding the
above, the performance measures for certain executives with busin