Company Name: Ecolab Inc.
Public Availability Date: January 23, 2004
Document Sections:INQUIRY LETTER
APPENDIX 1
INQUIRY LETTER
APPENDIX 2
APPENDIX 3
INQUIRY LETTER [INQUIRY LETTER]
January 21, 2004 VIA FACSIMILE AND FEDERAL EXPRESS
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, DC 20549
Re: Ecolab Inc. - Stockholder Proposal Submitted by the United Association S&P
500 Fund Ladies and Gentlemen: Per our letter dated December 23, 2003, we requested that the Staff concur in
our opinion that our client, Ecolab Inc. (the "Company"), may omit from its
proxy statement and form of proxy for the Company's 2004 Annual Meeting of
Stockholders (collectively, the "2004 Proxy Materials") a stockholder proposal
and statement in support thereof (collectively, the "Proposal") received from
United Association S&P 500 Fund (the "Fund").
On January 20, 2004, the Company received a letter, a copy of which is attached
hereto, from the Fund formally withdrawing the Proposal. Given the Fund has now voluntarily withdrawn the submission and therefore has
rendered the matter moot, we are informing you that it is unnecessary for the
Staff to respond to our request for Staff concurrence regarding the exclusion of
the Proposal from the Company's 2004 Proxy Materials. Please withdraw our
request. If you have any questions regarding this matter, please feel free to call me at
(612) 607-7267. Very truly yours, /s/
Bruce A. Machmeier BAM:pjp
Attachments [APPENDIX 1]
January 19, 2004 VIA FACSIMILE: 651-293-2471
Mr. Lawrence T. Bell
Senior Vice PresidentLaw, General Counsel and Secretary
Ecolab Inc.
Ecolab Center
370 Wabasha St. N
St. Paul, MN 55102
Re: Shareholder Proposal Dear Mr. Bell:
I am writing to inform you that the United Association S&P 500 Index Fund hereby
withdraws its shareholder proposal at Ecolab Inc. Thank you.
Sincerely, /s/
Mr. William Zitelli
Vice President
On behalf of the Fund cc: Mr. Sean O'Ryan, United Association
Mr. Craig Rosenberg, ProxyVote Plus [INQUIRY LETTER]
December 23, 2003 VIA FEDERAL EXPRESS
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, DC 20549
Re: Ecolab Inc. - Stockholder Proposal Submitted by the United Association S&P
500 Fund Ladies and Gentlemen: This letter is to advise you that it is the intention of our client, Ecolab Inc.
(the "Company"), to omit from its proxy statement and form of proxy for the
Company's 2004 Annual Meeting of Stockholders (collectively, the "2004 Proxy
Materials") a stockholder proposal and statement in support thereof
(collectively, the "Proposal") received from the United Association S&P 500 Fund
(the "Fund"), by facsimile on November 25, 2003. Copies of the Proposal and
accompanying cover letter, dated November 25, 2003, are attached hereto as
Attachment A. On behalf of the Company, we hereby respectfully request that the staff of the
Division of Corporation Finance (the "Staff") concur in our opinion that the
Proposal may be excluded from the 2004 Proxy Materials. We believe that the
Proposal may be properly excluded from the 2004 Proxy Materials pursuant to the
following rules:
Item 1 (Salary) may be excluded under Rule 14a-8(i)(3) and 14a-8(i)(6) because
it is so vague and indefinite that the stockholders and Company would be unable
to determine what further action should be taken (section IV below).
Item 2 (Annual Bonus) may be excluded under Rule 14a-8(i)(9) because the bulk
of it conflicts with a proposal the Company intends to submit at the 2004 Annual
Meeting (section I below), under Rule 14a-8(i)(10) because a portion of it has
already been substantially implemented (section II below) and under Rule
14a-8(i)(3) and 14a-8(i)(6) because it is so vague and indefinite that the
stockholders and Company would be unable to determine what further action should
be taken (section IV below).
Item 3 (Long-Term Equity Compensation) may be excluded under Rule 14a-8(i)(3)
and 14a-8(i)(6) because it is so vague and indefinite that the stockholders and
Company would be unable to determine what further action should be taken
(section IV below).
Item 4 (Severance) may be excluded under Rule 14a-8(i)(9) because it conflicts
with a proposal the Company intends to submit at the 2004 Annual Meeting
(section I below).
Item 5 (Disclosure) may be excluded under Rule 14a-8(i)(10) because it has
already been substantially implemented (section II below).
The sentence of the Proposal immediately after Item 5 may be excluded under
Rule 14a-8(i)(3) because it constitutes a materially false and misleading
statement. Pursuant to Rule 14a-8(j), enclosed are six (6) copies of this letter and its
attachments. Also in accordance with Rule 14a-8(j), a copy of this letter and
its attachments is being mailed on this date to the Fund, informing it of the
Company's intention to omit the Proposal from the 2004 Proxy Materials.
THE PROPOSAL The resolution portion of the Proposal states:
"Resolved: That shareholders of Ecolab Inc. ("Company") request that the
Company's Board of Directors and its Executive Compensation Committee replace
the current system of compensation for senior executives with the following
`Commonsense Executive Compensation' program including the following features:
(1) Salary - The chief executive officer's salary should be targeted at the mean
of salaries paid at peer group companies, not to exceed $1,000,000 annually. No
senior executive should be paid more than the CEO. (2) Annual Bonus - The annual bonus paid to senior executives should be based on
well-defined quantitative (financial) and qualitative (non-financial)
performance measures. The maximum level of the annual bonus should be a
percentage of the executive's salary level, capped at 100% of salary.
(3) Long-Term Equity Compensation - Long-term equity compensation to senior
executives should be in the form of restricted shares, not stock options. The
restricted share program should utilize justifiable performance criteria and
challenging performance benchmarks. It should contain a vesting requirement of
at least three years. Executives should be required to hold all shares awarded
under the program for the duration of their employment. The value of the
restricted share grant should not exceed $1,000,000 on the date of grant.
(4) Severance - The maximum severance payment to a senior executive should be no
more than one year's salary and bonus. (5) Disclosure - Key components of the executive compensation plan should be
outlined in the Compensation Committee's report to shareholders, with variances
from the Commonsense program explained in detail. The Commonsense compensation program should be implemented in a manner that does
not violate any existing employment agreement or equity compensation plans."
REASONS FOR OMISSION I. The Proposal may be excluded under Rule 14a-8(i)(9) because it conflicts with
a Company proposal The Proposal may be properly omitted from the 2004 Proxy Materials pursuant to
Rule 14a-8(i)(9) because it directly conflicts with a proposal that the Company
intends to submit to its stockholders at the Company's 2004 Annual Meeting.
Specifically, at the Company's 2004 Annual Meeting the Company intends to submit
a proposal to its stockholders to approve a Management Performance Incentive
Plan, a current draft and copy of which is attached hereto as Attachment B (the
"2004 Plan"), which will replace the Company's 1999 Management Performance
Incentive Plan that remains in effect through the plan year ending on December
31, 2003, a copy of which is attached hereto as Attachment C (the "1999 Plan").
The 2004 Plan will permit a committee of the Board of Directors to grant cash
awards to selected executive officers of the Company upon the attainment of one
or more pre-established, objective performance goals in a fiscal year and it is
intended to qualify for the performance-based exception to the $1 million
deduction limitation under Section 162(m) of the Internal Revenue Code. Under
the terms of the 2004 Plan (and consistent with the terms of the 1999 Plan),
each cash award will be expressed as threshold, maximum and intermediate
percentages of the base salary of a participant to the extent the performance
goals are achieved, provided that such cash award does not exceed $2.5 million1.
In addition, the 2004 Plan provides that in the event that a participant's
employment with the Company is terminated by reason of death, disability or
retirement, the participant shall be paid a pro-rata portion of any award earned
through that termination date. The Proposal and 2004 Plan directly conflict in a number of ways. First, Item 2
of the Proposal proposes capping a senior executive's annual bonus at 100% of
base salary. This item of the Proposal actually proposes a $1 million annual
bonus cap, as a result of Item 1 of the Proposal which proposes capping a senior
executive's annual salary at $1 million. In contrast, the 2004 Plan provides for
a cash award up to $2.5 million. Second, Item 4 of the Proposal proposes capping
maximum severance payments to senior executives at no more than one year's
salary and bonus. This also conflicts with the 2004 Plan, which under certain
circumstances in connection with the termination of a participant's employment
provides for a severance payment of up to $2.5 million, in excess of the
proposed aggregate $2 million cap for salary and annual bonus. Finally, Item 2
of the Proposal states that the annual bonus should be based on "well-defined
quantitative (financial) and qualitative (non-financial) performance measures."
The 2004 Plan provides for "objective" performance goals, financial in nature,
including (without limitation) diluted earnings per share,operating income, net
sales, days sales outstanding, capital expenditures, inventory days on hand,
controllable expenses, return on beginning equity, and return on net assets. By
asking that annual bonuses also be based on "qualitative (non-financial)"
performance measures, this item of the Proposal is asking for annual bonus
criteria that would be in conflict with those proposed by the 2004 Plan.
Under Rule 14a-8(i)(9), the Staff has consistently found that a company may omit
a stockholder proposal if there is some basis for concluding that an affirmative
vote on both the stockholder proposal and the company's proposal would lead to
an inconsistent, ambiguous or inconclusive result. See, e.g., Mattel, Inc.
(January 1999) (allowing exclusion of a proposal that discontinued all bonuses,
options, rights, SAR's, etc. because the company intended to submit a long-term
incentive plan at the same meeting); AOL Time Warner Inc. (March 3, 2003)
(allowing exclusion of a proposal that prohibited future stock option grants to
senior executives because it conflicted with a proposal from the company for a
new stock option plan); First Niagara Financial Group, Inc. (March 7, 2002)
(stockholder proposal that consideration be given to replacing stock option
grants with cash bonuses was excludable under Rule 14a-8(i)(9) because it
conflicted with a stock option plan which specifically permitted the granting of
stock options to officers, directors and employees); Osteotech, Inc. (April 24,
2000) (stockholder proposal requesting discontinuance of stock option grants to
executive officers and directors of the company excludable because it conflicted
with a company proposal to adopt a new stock option plan which granted broad
discretion to a committee to determine the identity of the recipients of the
stock option awards); and Eastman Kodak Co. (avail. February 1, 1999, recon.
March 1, 1999) (allowing exclusion of a proposal requesting the discontinuance
of all bonuses, options, rights and SARS after termination because the company
intended to submit a proposal to approve a long-tem compensation plan at the
same meeting). The result of stockholder approval of both the Proposal and 2004 Plan would
provide competing limitations on annual bonuses, irreconcilable severance
compensation limitations and conflicting types of performance measures. Because
of each of these conflicts, including both the Proposal and 2004 Plan would
present alternative and conflicting decisions for the Company's stockholders and
affirmative stockholder votes on both the Proposal and the 2004 Plan would lead
to an inconsistent and inconclusive mandate from the Company's stockholders.
Accordingly, the Proposal may be omitted from the Company's 2004 Proxy Materials
pursuant to Rule 14a-8(i)(9). II. The Proposal may be excluded under Rule 14a-8(i)(10) because significant
portions have been substantially implemented Certain portions of the Proposal may be excluded because they have been
substantially implemented by the Company, as permitted pursuant to Rule
14a-8(i)(10). A. Annual Bonus Item 2 of the Proposal calls for the Company to base annual bonuses to senior
executives on "well-defined quantitative (financial) and qualitative
(non-financial) performance measures." As indicated above, the portion of Item 2
of the Proposal calling for annual bonuses to be based on qualitative measures
is in conflict with the 2004 Plan. At the same time, the portion of Item 2 of
the Proposalrequesting that annual bonuses be based on quantitative performance
measures has already been substantially implemented by the Company. The
Company's 1999 Plan, like the 2004 Plan, provides for "objective performance
goals" in determining executive annual bonuses, including (without limitation),
diluted earnings per share, operating income, net sales, days sales outstanding,
capital expenditures, inventory days on hand, controllable expenses, return on
beginning equity and return on net assets. These measures are clearly defined in
the 1999 Plan, and are both quantitative and financial in nature. These
performance measures in the 1999 Plan compare favorably with the guidelines of
the Proposal. The Staff has found previously that a proposal need not be
implemented in full or precisely as presented for it to be excludable under Rule
14a-8(i)(10). See Masco Corporation (March 29, 1999) (allowing exclusion of
proposal that was similar, but not identical, to the Company's current policy).
Accordingly, this portion of the Proposal has been substantially implemented by
the Company and may be excluded under Rule 14a-8(i)(10). B. Disclosure
Item 5 of the Proposal requests that "Key components of the executive
compensation plan should be outlined in the Compensation Committee's report to
shareholders, with variances from the Commonsense program explained in detail."
The Company may exclude this item of the Proposal because it also has been
substantially implemented. Item 402(k) of Regulation S-K requires a registrant
to disclose in its compensation committee report the registrant's compensation
policies applicable to the registrant's executive officers, including the
specific relationship of corporate performance to executive compensation. The
Company has regularly complied with this disclosure requirement, most recently
in its proxy statement, dated March 31, 2003, distributed in connection with its
2003 annual stockholders meeting, under the heading "Executive
CompensationReport of the Compensation Committee on Executive Compensation."
This disclosure includes substantially all of the matters requested in the
Proposal. Accordingly, this item of the Proposal is excludable pursuant to Rule
14a-8(i)(10) because it has already been substantially implemented by the
Company. See Eastman Kodak Co. (February 1, 1991) (where company was allowed to
omit proposal requesting the company to publish "the costs of all fines paid for
violations of environmental laws and regulations" in its annual report, where
the company fully complied with Item 103 of Regulation S-K).
III. The Proposal may be excluded under Rule 14a-8(i)(3) because it contains
false or misleading statements The Proposal may be excluded from the 2004 Proxy Materials pursuant to Rule
14a-8(i)(3) because it contains materially false or misleading statements. A
stockholder proposal or supporting statement may be excluded under Rule
14a-8(i)(3) when it is contrary to any of the proxy rules, including Rule 14a-9,
which prohibits misleading statements in proxy soliciting materials.
The sentence in the Proposal immediately after Item 5 indicates that the
Proposal should be implemented "in a manner that does not violate any existing
employment agreement or equity compensation plan." This statement is inserted to
address the conflict between the Proposal and the current contractual
obligations and equity compensation plans that the Company has in place
and,ultimately, in order to prevent exclusion of the Proposal by the Company
under Rule 14a-8(i)(2) (violation of law) and Rule 14a-8(i)(6) (lack of power or
authority). As the Proposal is drafted, this language is misleading to
stockholders because it implies that the Proposal can, and will be, implemented
immediately without violating existing agreements, which is not the case.
In fact, existing contractual obligations of the Company will prevent the Board
of Directors from implementing the Proposal on a widespread basis any time soon.
The Company's current Change in Control Severance Compensation Policy, which
applies to officers of the Company, provides for a lump sum cash payment of an
amount equal to two times base pay plus the officer's target annual bonus under
the Company's incentive plan, a pro rata portion of the officer's projected
annual bonus for the year of termination and certain other benefits in the event
of severance in connection with a change in control. This plan by its terms
"establishes and vests in each Participant a contractual right to the benefits
which he or she is entitled to" under the plan. The Company cannot terminate
this benefit at will. This benefit can only be terminated by a Board resolution
and notice provided to each participant two years in advance of any termination
date. The payment of benefits under this plan could potentially violate several
provisions of the Proposal, including Item 1 (an executive could be entitled to
be paid more than the Company's chief executive officer in the year of
severance), Item 2 (an executive could be entitled to be paid an annual bonus in
excess of 100% of the executive's salary) and Item 4 (an executive could be
entitled to a severance payment substantially in excess of one year's salary and
bonus). In addition, the Company has option awards currently outstanding under
its 2002 Stock Incentive Plan, which have been granted pursuant to contractual
arrangements, that will continue to vest and be exercisable for up to ten years.
The existence of these options, which cannot be terminated without the consent
of each individual optionee, will prevent the Board of Directors from
implementing Item 3 of the Proposal (which calls for long-term equity
compensation to senior executives to be in the form of restricted shares rather
than stock options) any time soon. Thus, the statement that the Proposal should
be implemented "in a manner that does not violate any existing employment
agreement or equity compensation plan" is materially false and misleading.
Existing contractual obligations of the Company prevent it from implementing
substantial portions of the Proposal. The Proposal should be excluded in its entirety because it will require
substantial revision before it can be implemented in a manner that will not
violate existing employment agreements or equity compensation plans. The Staff
has stated that "when a proposal and supporting statement will require detailed
and extensive editing in order to bring the into compliance with the proxy
rules, [the Staff] may find it appropriate for companies to exclude the entire
proposal, supporting statement, or both, as materially false or misleading."
Staff Legal Bulletin No. 14, Section E.1 (July 13, 2001). IV. The Proposal may be excluded under Rules 14a-8(i)(3) and 14a-8(i)(6) because
it is vague and indefinite The Staff has consistently taken the position that a company may exclude a
proposal pursuant to Rule 14a-8(i)(3) if the proposal is "vague, indefinite and,
therefore, potentially misleading." See Eastman Kodak Company (March 3, 2003);
Pfizer, Inc. (February 18, 2003). A proposal is sufficiently vague and
indefinite to the point of misleading to justify exclusion where "neither the
stockholders voting on the proposal, nor the company in implementing the
proposal (if adopted), would be able todetermine with reasonable certainty
exactly what measures or actions the proposal requires." Philadelphia Electric
Co. (July 30, 1992). See also Bristol-Meyers Squibb Co. (February 1, 1999) (the
Staff concurred in the omission of a stockholder proposal under Rule 14a-8(i)(3)
because the proposal's vagueness, in requesting that stockholders refer certain
plans to the board, precluded the stockholders from determining with reasonable
certainty either the meaning of the resolution or the consequences of its
implementation). In addition, a proposal may be excluded pursuant to Rule
14a-8(i)(6) if the company would lack the power or authority to implement the
proposal. The Staff has indicated that "a matter may be considered beyond a
registrant's power to effectuate where a proposal is so vague and indefinite
that a registrant would be unable to determine what action should be taken."
Int'l Business Machines Corp. (January 14, 1992). A. Peer Group Companies
The Proposal is vague, indefinite and misleading because in Item 1 of the
Proposal it calls for the Company commit itself to a chief executive officer's
salary targeted at the mean of salaries paid at "peer group companies," but does
not fairly describe or define such companies for the Company's stockholders. The
Company currently uses a peer group to determine whether the Company's chief
executive officer's salary is in line with industry standards, but there is no
indication whether the Proposal is calling for the use of this current peer
group (in which case the Proposal has been implemented already) or whether the
use of some other peer group is being requested. B. Performance Measures
The Proposal is vague, indefinite and misleading because in Item 2 it requires
the Company commit itself to "well-defined quantitative (financial) and
qualitative (non-financial) performance measures" for annual bonuses and in Item
3 it states that the Company's restricted share program should use "justifiable
performance criteria and challenging performance benchmarks," but in neither
case does the Proposal fairly describe or define such performance measures for
the Company's stockholders. The Proposal gives no indication of what is
considered an appropriate performance measure and does not address whether the
current performance standards used by the Company are in concert with or in
conflict with the Proposal. C. Restricted Share Grant
The Proposal is vague, indefinite and misleading because in Item 3 it states
that the value of "the restricted share grant should not exceed $1,000,000 on
the date of grant." The Proposal does not clarify whether this limit should be
applied to each individual grant, should constitute an annual limit (like the
other requirements of the Proposal) or should be an aggregate limit on grants
for the duration of employment. Without additional guidance, this provision of
the Proposal is too ambiguous for stockholders to properly evaluate.
As a result of the ambiguity surrounding each of these statements, the Company
will be unable to determine the criteria to use in determining its chief
executive officer's salary pursuant to Item 1, the performance measures for
annual bonuses and restricted shares called for by Items 2 and 3 and the nature
of the $1 million limitation on restricted share grants called for by Item 3.
The Companysimply will not know whether or not it has implemented these elements
of the Proposal. At the same time, the Company's stockholders will be unable to
assess whether the Company has complied with the Proposal in these areas, and
different stockholders presumably will have different views on whether the
Company has complied with the Proposal. Therefore, for all of these reasons we
believe that the Proposal is so vague and indefinite that it is potentially
misleading and should be excluded. CONCLUSION
For all of the reasons discussed above, we believe that the Proposal may be
excluded from the 2004 Proxy Materials. Accordingly, we hereby respectfully
request that the Staff confirm that it will not recommend enforcement action if
the Proposal is excluded from the Company's 2004 Proxy Materials. Should you
disagree with the conclusions set forth in this letter, we would appreciate the
opportunity to confer with you prior to the issuance of the Staff's Rule
14a-8(d) response. Please do not hesitate to call me at (612) 607-7267 if you require additional
information or wish to discuss this submission further. Please acknowledge
receipt of this letter by stamping the enclosed additional copy of this letter
and returning it in the enclosed self-addressed stamped envelope.
Thank you for your attention to this matter.
Very truly yours, /s/
Bruce A. Machmeier BAM:pjp
Attachments -----FOOTNOTES-----
1 Subject to change, but in any event to exceed $1 million. [APPENDIX 2]
Commonsense Executive Compensation Proposal Resolved, that the shareholders of Ecolab Inc. ("Company") request that the
Company's Board of Directors and its Executive Compensation Committee replace
the current system of compensation for senior executives with the following
"Commonsense Executive Compensation" program including the following features:
(1) Salary - The chief executive officer's salary should be targeted at the mean
of salaries paid at peer group companies, not to exceed $1,000,000 annually. No
senior executive should be paid more than the CEO. (2) Annual Bonus - The annual bonus paid to senior executives should be based on
well-defined quantitative (financial) and qualitative (non-financial)
performance measures. The maximum level of annual bonus should be a percentage
of the executive's salary level, capped at 100% of salary.
(3) Long-Term Equity Compensation - Long-term equity compensation to senior
executives should be in the form of restricted shares, not stock options. The
restricted share program should utilize justifiable performance criteria and
challenging performance benchmarks. It should contain a vesting requirement of
at least three years. Executives should be required to hold all shares awarded
under the program for the duration of their employment. The value of the
restricted share grant should not exceed $1,000,000 on the date of grant.
(4) Severance - The maximum severance payment to a senior executive should be no
more than one year's salary and bonus. (5) Disclosure - Key components of the executive compensation plan should be
outlined in the Compensation Committee's report to shareholders, with variances
from the Commonsense program explained in detail. The Commonsense compensation program should be implemented in a manner that does
not violate any existing employment agreement or equity compensation plans.
Supporting Statement: We believe that compensation paid to senior executives at
most companies, including ours, is excessive, unjustified, and contrary to the
interests of the Company, its shareholders, and other important corporate
constituents. CEO pay has been described as a "wasteland that has not been
reformed." (Institutional Shareholder Services senior vice-president, Wall
Street Journal, "Executive Pay Keeps Rising, Despite Outcry," October 3, 2003).
As of 2002, the CEO-worker pay gap of 282-to-1 was nearly seven times as large
as the 1982 ratio of 42-to-1 according to the United for a Fair Economy's Tenth
Annual CEO Compensation Survey ("Executive Excess 2003 - CEO's Win, Workers and
Taxpayers Lose.") We believe that it is long past time for shareholders to be proactive and
provide companies clear input on the parameters of what they consider to be
reasonable and fair executive compensation. We believe that executive
compensation should be designed to promote the creation of long-term corporate
value. The Commonsense executive compensation principles seek to focus senior
executives, not on quarterly performance numbers, but on long-term corporate
value growth, which should benefit all the important constituents of the
Company. We challenge our Company's leadership to embrace the ideas embodied in
the Commonsense proposal, which still offers executives the opportunity to build
personal long-term wealth but only when they generate long-term corporate value.
[APPENDIX 3]
November 25, 2003 VIA FACSIMILE: 651-293-2471
Mr. Lawrence T. Bell
Senior Vice PresidentLaw, General Counsel and Secretary
Ecolab Inc.
Ecolab Center
370 Wabasha St. N
St. Paul, MN 55102
Re: Shareholder Proposal Dear Mr. Bell:
On behalf of the United Association S&P 500 Index Fund, I hereby submit the
enclosed shareholder proposal ("Proposal") for inclusion in the Ecolab Inc.
("Company") proxy statement to be circulated to Company shareholders in
conjunction with the next annual meeting of shareholders. The Proposal is
submitted under Rule 14(a)-8 (Proposals of Security Holders) of the U.S.
Securities and Exchange Commission's proxy regulations. The Proposal is being
submitted in order to promote an enhanced corporate governance system at the
Company. The Fund is the beneficial owner of Company stock valued in excess of $2,000 in
market value that it has held continuously for more than a year prior to this
date of submission. The Fund intends to hold the shares through the date of the
Company's next annual meeting of shareholders. The record holder of the stock
will provide the appropriate verification of the Fund's beneficial ownership by
separate letter. If you have any questions or wish to discuss the Proposal, please contact Mr.
Sean O'Ryan, 202-628-5823, United Association of Journeymen and Apprentices of
the Plumbing and Pipe Fitting Industry of the United States and Canada, 901
Massachusetts Avenue. N.W., Washington, D.C. 20001. Copies of correspondence
should be forwarded to Mr. Sean O'Ryan and Mr. Craig Rosenberg, ProxyVote Plus,
Two Northfield Plaza, Suite 211. Northfield IL 60093. Thank you.
Sincerely, /s/
Mr. William Zitelli
Vice President
On behalf of the Fund cc: Mr. Sean O'Ryan, United Association
Mr. Craig Rosenberg, ProxyVote Plus [INQUIRY LETTER]
January 23, 2004 Bruce A. Machmeier
Oppenheimer Wolff & Donnelly LLP
Plaza VII, Suite 3300
45 South Seventh Street
Minneapolis, MN 55402-1609 Re: Ecolab Inc.
Dear Mr. Machmeier: This is in regard to your letter dated January 21, 2004 concerning the
shareholder proposal submitted by the United Association S&P 500 Fund for
inclusion in Ecolab's proxy materials for its upcoming annual meeting of
security holders. Your letter indicates that the proponent has withdrawn the
proposal, and that Ecolab therefore withdraws its December 23, 2003 request for
a no-action letter from the Division. Because the matter is now moot, we will
have no further comment. Sincerely, /s/
Grace K. Lee
Special Counsel
cc: William Zitelli
Vice President
United Association S&P 500 Fund
1 Freedom Valley Drive
Oaks, PA 19456
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