DESCRIPTION OF ECOLAB INC.
MANAGEMENT INCENTIVE PLAN
Ecolab Inc. (the “Company”) maintains annual cash incentive plans for executives that are designed to motivate
executives to achieve annual business and individual goals. These plans are referred to as the Management
Incentive Plan (“MIP”) and the Management Performance Incentive Plan (the “MPIP”). The MPIP is a
stockholder-approved plan designed and administered in a manner intended to preserve the Company’s federal
income tax deductions. It is set forth in a plan document filed with other management agreements as an exhibit to
the Company’s Annual Report on Form 10-K. The MIP is not set forth in a formal plan document. Set forth
below is a summary of the MIP as it applies to the executive officers of the Company who do not otherwise
receive awards under the MPIP.
Target Award Opportunities — Under the MIP, the Compensation Committee of the Company’s Board of
Directors establishes the annual target award opportunities expressed as a percentage of base salary paid during
the fiscal year, and threshold and maximum award payment limits expressed as a percentage of the target award
for each executive officer.
Performance Measures — Under the MIP, performance is measured using a mix of overall corporate,
business unit, and individual measures to foster cross-divisional cooperation and to assure that executives have a
reasonable measure of control over the factors that affect their awards. This performance measure mix varies by
Performance Goals — Under the MIP, overall corporate performance is based on pro forma diluted earnings
per share goals. In establishing the goals the Company takes into consideration prior year results, expected
economic and market influences, other large companies’ performance expectations and anticipated business
opportunities, investment requirements and competitive situation.
Under the MIP, business unit performance is generally measured based on