-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LcngozllWNp/4t9tNwibRkxQkJMmRfBODNo8NhFuV6tmakW5JK7emnQ0XeTXKvlJ 5HaVSBjgoMPKMnB5iNR7QA== 0001047469-98-025803.txt : 19980630 0001047469-98-025803.hdr.sgml : 19980630 ACCESSION NUMBER: 0001047469-98-025803 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980629 SROS: NYSE SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ECOLAB INC CENTRAL INDEX KEY: 0000031462 STANDARD INDUSTRIAL CLASSIFICATION: SOAP, DETERGENT, CLEANING PREPARATIONS, PERFUMES, COSMETICS [2840] IRS NUMBER: 410231510 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-09328 FILM NUMBER: 98656801 BUSINESS ADDRESS: STREET 1: ECOLAB CTR STREET 2: 370 N WABASHA ST CITY: ST PAUL STATE: MN ZIP: 55102 BUSINESS PHONE: 6122932233 FORMER COMPANY: FORMER CONFORMED NAME: ECONOMICS LABORATORY INC DATE OF NAME CHANGE: 19861203 11-K 1 FORM 11-K FORM 11-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------- --------- Commission file numbers 2-90702, 33-18202, 33-55986 AND 33-56101 ---------------------------------------- A. Full title of the plan and the address of the plan, if different from that of the issuer name below: ECOLAB SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: ECOLAB INC. 370 N. Wabasha St. Saint Paul, Minnesota 55102-1390 ECOLAB SAVINGS PLAN ---------------- REPORT ON AUDITS OF FINANCIAL STATEMENTS As of December 31, 1997 and 1996 and for each of the three years in the period ended December 31, 1997 AND SUPPLEMENTAL SCHEDULES as of December 31, 1997 and for the year then ended INDEX ------------
Page(s) ------- Report of Independent Accountants 2 Financial Statements: Statements of Net Assets Available for Plan Benefits as of December 31, 1997 and 1996 3 Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information, for the year ended December 31, 1997 4 - 5 Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information, for the year ended December 31, 1996 6 - 7 Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information, for the year ended December 31, 1995 8 - 9 Notes to Financial Statements 10 - 20 Supplemental Schedules: Line 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1997 21 Line 27d - Schedule of Reportable Transactions for the year ended December 31, 1997 22
1 REPORT OF INDEPENDENT ACCOUNTANTS To the Plan Administrator Ecolab Savings Plan We have audited the financial statements of the Ecolab Savings Plan as listed in the accompanying index on page 1. These financial statements are the responsibility of the Plan Administrator. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Plan Administrator, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Ecolab Savings Plan as of December 31, 1997 and 1996, and the changes in net assets available for plan benefits for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules as listed in the accompanying index on page 1 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the Statements of Changes in Net Assets Available for Plan Benefits is presented for purposes of additional analysis rather than to present the changes in net assets available for plan benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. /s/Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Saint Paul, Minnesota June 12, 1998 2 ECOLAB SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS as of December 31, 1997 and 1996
(in thousands) 1997 1996 ------- ------- ASSETS Investments: Fidelity mutual funds: Retirement Money Market Portfolio $ 8,300 $ 7,855 Government Securities Fund 13,835 13,020 Puritan Fund 32,128 27,297 Spartan U.S. Equity Index 38,935 25,598 Magellan Fund 31,100 24,167 Small Cap Selector 13,209 9,906 Overseas Fund 11,594 10,395 -------- -------- 149,101 118,238 Common/Collective trust funds: Managed Income Fund 39,860 39,803 Ecolab Stock Fund 230,208 148,184 -------- -------- 270,068 187,987 Participant loans 15,195 13,679 -------- -------- Total investments 434,364 319,904 -------- -------- Receivables: Employer contributions 1,255 Dividends 778 619 -------- -------- Total receivables 778 1,874 -------- -------- Total Assets 435,142 -------- -------- LIABILITIES Accrued distributions 77 -------- -------- Total Liabilities 77 -------- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $435,065 $321,778 -------- -------- -------- --------
The accompanying notes are an integral part of the financial statements. 3 ECOLAB SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION for the year ended December 31, 1997
Spartan Retirement U.S. Money Government Equity (in thousands) Market Securities Puritan Index Portfolio Fund Fund Fund ---------- ---------- ---------- ---------- Additions: Interest Dividends $ 427 $ 828 $ 2,568 $ 865 Net appreciation in the fair value of investments 298 3,236 8,457 Increase (decrease) in Plan's interest in common/ collective trust funds ---------- ---------- ---------- ---------- Total investment income 427 1,126 5,804 9,322 Plan expenses (10) (5) (11) (8) ---------- ---------- ---------- ---------- 417 1,121 5,793 9,314 Employee contributions 643 1,386 1,807 2,489 Employer contributions Transfers from other Plans (Note 6) 136 379 662 2,240 ---------- ---------- ---------- ---------- Total additions 1,196 2,886 8,262 14,043 Deductions: Distributions and withdrawals (814) (778) (3,999) (1,880) ---------- ---------- ---------- ---------- Net increase (decrease) before loan activity and interfund transfers 382 2,108 4,263 12,163 Loans granted (241) (326) (549) (834) Loan principal and interest repayments 231 355 526 684 Interfund transfers 73 (1,322) 591 1,324 ---------- ---------- ---------- ---------- Net increase (decrease) 445 815 4,831 13,337 Net assets available for plan benefits: Beginning of year 7,855 13,020 27,297 25,598 ---------- ---------- ---------- ---------- End of year $ 8,300 $ 13,835 $ 32,128 $ 38,935 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Magellan Small Cap Overseas Fidelity Fund Selector Fund Subtotal ---------- ---------- ---------- ---------- Additions: Interest Dividends $ 1,989 $ 972 $ 575 $ 8,224 Net appreciation in the fair value of investments 4,418 1,680 608 18,697 Increase (decrease) in Plan's interest in common/ collective trust funds ---------- ---------- ---------- ---------- Total investment income 6,407 2,652 1,183 26,921 Plan expenses (5) (5) (1) (45) ---------- ---------- ---------- ---------- 6,402 2,647 1,182 26,876 Employee contributions 3,014 1,409 1,445 12,193 Employer contributions Transfers from other Plans (Note 6) 3,417 ---------- ---------- ---------- ---------- Total additions 9,416 4,056 2,627 42,486 Deductions: Distributions and withdrawals (1,450) (582) (605) (10,108) ---------- ---------- ---------- ---------- Net increase (decrease) before loan activity and interfund transfers 7,966 3,474 2,022 32,378 Loans granted (897) (296) (306) (3,449) Loan principal and interest repayments 842 318 369 3,325 Interfund transfers (978) (193) (886) (1,391) ---------- ---------- ---------- ---------- Net increase (decrease) 6,933 3,303 1,199 30,863 Net assets available for plan benefits: Beginning of year 24,167 9,906 10,395 118,238 ---------- ---------- ---------- ---------- End of year $ 31,100 $ 13,209 $ 11,594 $ 149,101 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
The accompanying notes are an integral part of the financial statements. (Continued) 4 ECOLAB SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION for the year ended December 31, 1997 (Continued)
Managed Ecolab (in thousands) Fidelity Income Stock Participant Subtotal Fund Fund Loans Other Total ----------- ----------- ----------- ----------- ----------- ----------- Additions: Interest $ 2,933 $ 1,069 $ 4,002 Dividends $ 8,224 $ 2,563 $ 159 10,946 Net appreciation in the fair value of investments 18,697 18,697 Increase (decrease) in Plan's interest in common/ collective trust funds (508) 72,785 72,277 ----------- ----------- ----------- ----------- ----------- ----------- Total investment income 26,921 2,425 75,348 1,069 159 105,922 Plan expenses (45) (32) (51) (128) ----------- ----------- ----------- ----------- ----------- ----------- 26,876 2,393 75,297 1,069 159 105,794 Employee contributions 12,193 2,110 6,078 20,381 Employer contributions 8,468 (1,255) 7,213 Transfers from other Plans (Note 6) 3,417 1,522 110 5,049 ----------- ----------- ----------- ----------- ----------- ----------- Total additions 42,486 6,025 89,843 1,179 (1,096) 138,437 Deductions: Distributions and withdrawals (10,108) (3,289) (10,919) (757) (77) (25,150) ----------- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) before loan activity and interfund transfers 32,378 2,736 78,924 422 (1,173) 113,287 Loans granted (3,449) (1,013) (3,305) 7,767 Loan principal and interest repayments 3,325 1,016 2,332 (6,673) Interfund transfers (1,391) (2,682) 4,073 ----------- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) 30,863 57 82,024 1,516 (1,173) 113,287 Net assets available for plan benefits: Beginning of year 118,238 39,803 148,184 13,679 1,874 321,778 ----------- ----------- ----------- ----------- ----------- ----------- End of year $ 149,101 $ 39,860 $ 230,208 $ 15,195 $ 701 $ 435,065 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
The accompanying notes are an integral part of the financial statements. 5 ECOLAB SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION for the year ended December 31, 1996
Spartan Retirement U.S. Money Government Equity (in thousands) Market Securities Puritan Index Portfolio Fund Fund Fund ---------- ---------- ---------- ---------- Additions: Interest $ 15 Dividends $ 350 $ 863 3,136 $ 606 Net appreciation (depreciation) in the fair value of investments (581) 526 3,759 Increase in Plan's interest in common/ collective trust funds ---------- ---------- ---------- ---------- Total investment income 350 282 3,677 4,365 Plan expenses (8) (6) (10) (7) ---------- ---------- ---------- ---------- 342 276 3,667 4,358 Employee contributions 503 1,295 1,628 1,856 Employer contributions Transfers from other Plans (Note 6) 263 271 15,335 623 ---------- ---------- ---------- ---------- Total additions 1,108 1,842 20,630 6,837 Deductions: Distributions and withdrawals (454) (315) (1,871) (631) ---------- ---------- ---------- ---------- Net increase before loan activity and interfund transfers 654 1,527 18,759 6,206 Loans granted (198) (316) (1,023) (630) Loan principal and interest repayments 163 380 449 523 Interfund transfers 1,113 (991) (3,017) 2,521 ---------- ---------- ---------- ---------- Net increase 1,732 600 15,168 8,620 Net assets available for plan benefits: Beginning of year 6,123 12,420 12,129 16,978 ---------- ---------- ---------- ---------- End of year $ 7,855 $ 13,020 $ 27,297 $ 25,598 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Magellan Small Cap Overseas Fidelity Fund Selector Fund Subtotal ---------- ---------- ---------- ---------- Additions: Interest $ 15 Dividends $ 3,733 $ 368 $ 627 9,683 Net appreciation (depreciation) in the fair value of investments (1,215) 691 468 3,648 Increase in Plan's interest in common/ collective trust funds ---------- ---------- ---------- ---------- Total investment income 2,518 1,059 1,095 13,346 Plan expenses (5) (8) (1) (45) ---------- ---------- ---------- ---------- 2,513 1,051 1,094 13,301 Employee contributions 2,945 1,325 1,272 10,824 Employer contributions Transfers from other Plans (Note 6) 1,333 122 17,947 ---------- ---------- ---------- ---------- Total additions 6,791 2,376 2,488 42,072 Deductions: Distributions and withdrawals (449) (179) (178) (4,077) ---------- ---------- ---------- ---------- Net increase before loan activity and interfund transfers 6,342 2,197 2,310 37,995 Loans granted (832) (286) (303) (3,588) Loan principal and interest repayments 838 332 326 3,011 Interfund transfers (2,641) 239 733 (2,043) ---------- ---------- ---------- ---------- Net increase 3,707 2,482 3,066 35,375 Net assets available for plan benefits: Beginning of year 20,460 7,424 7,329 82,863 ---------- ---------- ---------- ---------- End of year $ 24,167 $ 9,906 $ 10,395 $ 118,238 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
The accompanying notes are an integral part of the financial statements. (Continued) 6 ECOLAB SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION for the year ended December 31, 1996 (Continued)
Managed Ecolab (in thousands) Fidelity Income Stock Participant Subtotal Fund Fund Loans Other Total ----------- ----------- ----------- ----------- ----------- ----------- Additions: Interest $ 15 $ 2,102 $ 1 $ 958 $ 120 $ 3,196 Dividends 9,683 2,078 11,761 Net appreciation (depreciation) in the fair value of investments 3,648 3,648 Increase in Plan's interest in common/ collective trust funds 29,304 29,304 ----------- ----------- ----------- ----------- ----------- ----------- Total investment income 13,346 2,102 31,383 958 120 47,909 Plan expenses (45) (27) (41) (113) ----------- ----------- ----------- ----------- ----------- ----------- 13,301 2,075 31,342 958 120 47,796 Employee contributions 10,824 2,054 4,504 17,382 Employer contributions 6,276 1,255 7,531 Transfers from other Plans (Note 6) 17,947 391 18,338 ----------- ----------- ----------- ----------- ----------- ----------- Total additions 42,072 4,520 42,122 958 1,375 91,047 Deductions: Distributions and withdrawals (4,077) (2,161) (4,434) (483) (11,155) ----------- ----------- ----------- ----------- ----------- ----------- Net increase before loan activity and interfund transfers 37,995 2,359 37,688 475 1,375 79,892 Loans granted (3,588) (1,084) (2,201) 6,873 Loan principal and interest repayments 3,011 961 1,789 (5,761) Interfund transfers (2,043) (10) 2,053 ----------- ----------- ----------- ----------- ----------- ----------- Net increase 35,375 2,226 39,329 1,587 1,375 79,892 Net assets available for plan benefits: Beginning of year 82,863 37,577 108,855 12,092 499 241,886 ----------- ----------- ----------- ----------- ----------- ----------- End of year $ 118,238 $ 39,803 $ 148,184 $ 13,679 $ 1,874 $ 321,778 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
The accompanying notes are an integral part of the financial statements. 7 ECOLAB SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION for the year ended December 31, 1995
Spartan Retirement U.S. Money Government Equity (in thousands) Market Securities Puritan Index Portfolio Fund Fund Fund ---------- ---------- ---------- ---------- Additions: Interest $ 33 Dividends $ 285 $ 615 $ 600 407 Net appreciation in the fair value of investments 899 1,149 4,826 Increase in Plan's interest in common/ collective trust funds ---------- ---------- ---------- ---------- Total investment income 285 1,514 1,749 5,266 Plan expenses (8) (10) (9) 7 ---------- ---------- ---------- ---------- 277 1,504 1,740 5,273 Employee contributions 391 1,334 1,211 1,448 Employer contributions Other ---------- ---------- ---------- ---------- Total additions 668 2,838 2,951 6,721 Deductions: Distributions and withdrawals (470) (353) (356) (380) ---------- ---------- ---------- ---------- Net increase before loan activity and interfund transfers 198 2,485 2,595 6,341 Loans granted (159) (464) (276) (569) Loan principal and interest repayments 195 376 325 375 Interfund transfers 5,889 10,023 9,485 10,831 ---------- ---------- ---------- ---------- Net increase (decrease) 6,123 12,420 12,129 16,978 Net assets available for plan benefits: Beginning of year - - - - ---------- ---------- ---------- ---------- End of year $ 6,123 $ 12,420 $ 12,129 $ 16,978 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Magellan Small Cap Overseas Fidelity Fund Selector Fund Subtotal ---------- ---------- ---------- ---------- Additions: Interest $ 33 Dividends $ 1,159 $ 465 $ 167 3,698 Net appreciation in the fair value of investments 2,951 717 674 11,216 Increase in Plan's interest in common/ collective trust funds ---------- ---------- ---------- ---------- Total investment income 4,110 1,182 841 14,947 Plan expenses (12) (4) (5) (41) ---------- ---------- ---------- ---------- 4,098 1,178 836 14,906 Employee contributions 2,229 920 1,184 8,717 Employer contributions Other ---------- ---------- ---------- ---------- Total additions 6,327 2,098 2,020 23,623 Deductions: Distributions and withdrawals (399) (199) (273) (2,430) ---------- ---------- ---------- ---------- Net increase before loan activity and interfund transfers 5,928 1,899 1,747 21,193 Loans granted (765) (241) (277) (2,751) Loan principal and interest repayments 564 217 313 2,365 Interfund transfers 14,733 5,549 5,546 62,056 ---------- ---------- ---------- ---------- Net increase (decrease) 20,460 7,424 7,329 82,863 Net assets available for plan benefits: Beginning of year - - - - ---------- ---------- ---------- ---------- End of year $ 20,460 $ 7,424 $ 7,329 $ 82,863 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
The accompanying notes are an integral part of the financial statements. (Continued) 8 ECOLAB SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION for the year ended December 31, 1995 (Continued)
Common Managed Fidelity Income Stock Income (in thousands) Subtotal Fund Fund Fund ---------- ---------- ---------- ---------- Additions: Interest $ 33 $ 2,407 Dividends 3,698 Net appreciation in the fair value of investments 11.216 Increase in Plan's interest in common/ collective trust funds ---------- ---------- Total investment income 14,947 2,407 Plan expenses (41) 4 ---------- ---------- 14,906 2,411 Employee contributions 8,717 2,325 Employer contributions Other ---------- ---------- Total additions 23,623 4,736 Deductions: Distributions and withdrawals (2,430) (2,578) ---------- ---------- Net increase before loan activity and interfund transfers 21,193 2,158 Loans granted (2,751) (1,270) Loan principal and interest repayments 2,365 821 Interfund transfers 62,056 $(63,258) $(24,496) 35,868 ---------- ---------- ---------- ---------- Net increase (decrease) 82,863 (63,258) (24,496) 37,577 Net assets available for plan benefits: Beginning of year - 63,258 24,496 - ---------- ---------- ---------- ---------- End of year $ 82,863 $ - $ - $ 37,577 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Ecolab Stock Participant (in thousands) Fund Loans Other Total ----------- ----------- ----------- ----------- Additions: Interest $ 703 $ 3,143 Dividends $ 1,269 $ 499 5,466 Net appreciation in the fair value of investments 11,216 Increase in Plan's interest in common/ collective trust funds 32,977 32,977 ----------- ----------- ----------- ----------- Total investment income 34,246 703 499 52,802 Plan expenses (41) (78) ----------- ----------- ----------- ----------- 34,205 703 499 52,724 Employee contributions 4,059 15,101 Employer contributions 5,837 5,837 Other 527 527 ----------- ----------- ----------- ----------- Total additions 44,101 1,230 499 74,189 Deductions: Distributions and withdrawals (3,920) (178) (9,106) ----------- ----------- ----------- ----------- Net increase before loan activity and interfund transfers 40,181 1,052 499 65,083 Loans granted (2,170) 6,191 Loan principal and interest repayments 1,332 (4,518) Interfund transfers (10,170) ----------- ----------- ----------- ----------- Net increase (decrease) 29,173 2,725 499 65,083 Net assets available for plan benefits: Beginning of year 79,682 9,367 - 176,803 ----------- ----------- ----------- ----------- End of year $ 108,855 $ 12,092 $ 499 $ 241,886 ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
The accompanying notes are an integral part of the financial statements. 9 ECOLAB SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS ---------- 1. DESCRIPTION OF PLAN: The following brief description of the Ecolab Savings Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Plan document for complete information regarding the Plan's definitions, benefits, eligibility and other matters. GENERAL AND ELIGIBILITY: The Plan is a qualified defined contribution plan available to employees of Ecolab Inc. (the "Company") and certain of its subsidiaries. Employees regularly scheduled to work at least 20 hours per week may participate immediately in the Plan provided they are not subject to a collective bargaining agreement which does not provide for their inclusion. Part-time employees working less than 20 hours a week must have been employed for a twelve consecutive month period during which they have worked at least 1,000 hours to be eligible to participate. Employee participation in the Plan is voluntary. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and the Internal Revenue Code of 1986, as amended (the "Code"). Effective January 1, 1997, employees who were previously participating in the Huntington Laboratories, Inc. Savings and Retirement Plan became participants of the Plan. Effective January 1, 1996, employees who were previously participating in the Profit Sharing Retirement Plan of Kay Chemical Company and the Kay Chemical Company Section 401(k) Savings Plan became participants of the Plan. Also effective January 1, 1996, employees who were previously participating in the Profit Sharing Plan and Trust for Employees of Western Water Management, Inc. became participants of the Plan (see Note 6). Assets transferred into the Plan as these employees became participants are shown separately in the Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information. CONTRIBUTIONS: Contributions are made to the Plan as "before-tax savings contributions," "after-tax savings contributions," "employer matching contributions" or "employer profit sharing contributions." (Continued) 10 ECOLAB SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, (Continued) ---------- 1. DESCRIPTION OF PLAN, (Continued): Before-tax savings contributions are contributions made by the Company on behalf of participants who have agreed to have their taxable compensation reduced. Participants may reduce their compensation up to 10% (subject to a statutory annual maximum of $9,500 in 1997 and 1996 and $9,240 in 1995) for the purpose of making before-tax savings contributions to the Plan. After-tax savings contributions are contributions made by the Company on behalf of participants through after-tax payroll deductions. The total of before-tax savings contributions made on behalf of a participant and a participant's after-tax savings contributions cannot exceed 16% of a participant's compensation. Employer matching contributions are made by the Company in an amount equal to 50% of the total before-tax savings contributions and after-tax savings contributions for a payroll period which do not exceed 6% of a participant's eligible compensation for that period, as defined. Employer matching contributions are invested entirely in the Ecolab Stock Fund. Employer profit sharing contributions are discretionary and are determined annually by the Company's Board of Directors. Profit sharing contributions are divided among employees who are not eligible for a management incentive or equivalent bonus and are invested entirely in the Ecolab Stock Fund. The levels of contributions made by or on behalf of participants who are "highly compensated," as defined in the Code, are subject to limitations under the Code based on the level of contributions made by employees who are not considered highly compensated. VESTING: Before-tax savings contributions, after-tax savings contributions, employer profit sharing contributions and investment income thereon are always 100% vested. Participants become vested in the employer matching contributions and investment income thereon at a rate of 25% each year, after two years of continuous service, until fully vested after five years of continuous service. Participants also become fully vested in those contributions in the event of death or total disability while employed by the Company or retirement at or after age 65. (Continued) 11 ECOLAB SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, (Continued) ---------- 1. DESCRIPTION OF PLAN, (Continued): PLAN BENEFITS: Benefits to participants are limited to the amount vested in each participant's account. Upon retirement, death, disability or separation from service, a distribution may be made to the participant or beneficiary equal to the vested portion of the participant's account. An employee distribution or withdrawal from the Plan may be subject to federal income tax. Forfeitures of nonvested employer matching contributions and related investment income are used to reduce future employer contributions. PARTICIPANT LOANS: Participants and beneficiaries are permitted to borrow from their accounts. The total amount of a participant's loan may not exceed the lesser of (a) $50,000 minus the participant's highest outstanding loan balance for the previous twelve-month period, or (b) 50% of the participant's vested interest in his or her account. When a loan is granted, the appropriate account balances are reduced and a separate loan account is created. Loan payments, together with interest at a market rate determined by the Plan Administrator, are repaid generally over 5 or 10 years. PARTICIPANT ACCOUNTS AND ALLOCATION: Fidelity Institutional Retirement Services Company ("Fidelity"), a division of Fidelity Investments Institutional Services Company, Inc., provides investment management, recordkeeping and trustee services for the Plan directly or through one or more of its subsidiaries. Each participant's account is credited with the participant's contributions, the employer matching contributions, any employer profit sharing contributions and investment income thereon. (Continued) 12 ECOLAB SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, (Continued) ---------- 1. DESCRIPTION OF PLAN, (Continued): Except for employer matching and profit sharing contributions which are invested entirely in the Ecolab Stock Fund, participants are allowed to allocate their entire account balance and/or future before-tax and after-tax savings contributions in any combination of nine investment options. Participants can transfer their account balances among the investment options and/or change the investment of their future contributions and earnings thereon daily, as desired. These transfers and changes must be made in whole dollar amounts of at least $250 and/or in whole percent increments. All contributions made under the Plan are paid to and invested by Fidelity in one or more of the available investment options as directed by the participants. Seven of the nine investment options are mutual funds of Fidelity, managed by Fidelity Management and Research Company. The remaining investment options include a fund invested primarily in investment contracts and a fund invested primarily in Ecolab Inc. common stock, both managed by Fidelity Management Trust Company. The nine investment funds available to participants are: Fidelity Retirement This portfolio invests in short-term Money Market money market securities of U.S. and Portfolio foreign issuers. Fidelity Government This fund invests primarily in securities Securities Fund issued by the U.S. government agencies or instrumentalities. Fidelity Puritan Fund This fund invests in a broadly diversified portfolio of domestic and foreign common stocks, preferred stocks and bonds, including high-yield debt securities. (Continued) 13 ECOLAB SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, (Continued) ---------- 1. DESCRIPTION OF PLAN, (Continued): Fidelity Spartan U.S. This fund (formerly called the Fidelity Equity Index Fund U.S. Equity Index Portfolio) invests primarily in the common stocks of the 500 companies that make up the Standard & Poor's Daily Stock Price Index. Fidelity Magellan Fund This fund invests in common stocks of both well-known and lesser known companies with potentially above-average growth potential and a correspondingly higher level of risk. Fidelity Small Cap This fund (formerly called the Fidelity Selector Small Cap Stock Fund) invests primarily in stocks of small market capitalization companies. Fidelity Overseas Fund This fund invests primarily in common stocks and securities convertible into common stock of issuers whose principal business activities are outside of the U.S. Managed Income Fund This fund is a common/collective trust fund comprised of investment contracts which were purchased before 1995 by the former investment manager, U.S. Treasury and other synthetics and units in a commingled trust fund, the Managed Income Portfolio II ("MIPII") of the Fidelity Group Trust for Employee Benefit Plans. MIPII invests primarily in contracts issued by major insurance companies and other approved financial institutions. Ecolab Stock Fund This fund is a common/collective trust fund that invests primarily in Ecolab common stock with a small portion in money market securities. (Continued) 14 ECOLAB SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, (Continued) ---------- 1. DESCRIPTION OF PLAN, (Continued): As of December 31, 1997, approximately 7,800 employees were participating in the Plan. At December 31, 1997, 1996 and 1995, the approximate number of participants in each investment fund was as follows:
1997 1996 1995 ------ ------ ------ Fidelity Retirement Money Market Portfolio 900 900 700 Fidelity Government Securities Fund 1,800 1,800 1,700 Fidelity Puritan Fund 2,500 2,300 1,700 Fidelity Spartan U.S. Equity Index Fund 3,200 2,900 2,500 Fidelity Magellan Fund 3,500 3,200 2,800 Fidelity Small Cap Selector 2,200 2,100 1,800 Fidelity Overseas Fund 2,400 2,200 1,900 Managed Income Fund 4,200 3,500 2,900 Ecolab Stock Fund 7,800 6,400 5,800
PLAN TERMINATION: Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants would become 100% vested in their accounts. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The financial statements are prepared in conformity with generally accepted accounting principles and use the following significant accounting policies. VALUATION OF INVESTMENTS: Investments in the Managed Income Fund, a common/collective trust fund, are recorded at the underlying net asset value per unit as determined by the Plan's trustee, which approximates fair value. Investments in the Ecolab Stock Fund, a common/collective trust fund, are recorded at the underlying net asset value per unit as determined by the Plan's trustee, which approximates fair value based on the quoted market price of the Company's common stock. Fidelity mutual funds are recorded at the underlying net asset value per unit, which approximates fair value based on the publicly quoted market price of these funds. (Continued) 15 ECOLAB SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, (Continued) ---------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued): The Loan Accounts of participants are recorded at the principal value of outstanding loans, plus accrued interest, which approximates fair value. As of December 31, 1996 and 1995, approximately $3.6 million of assets invested in the Managed Income Fund were with an insurance company which was taken over in 1994 by regulators. As a result, the assets were segregated as of August 12, 1994 and were unavailable for investment transfers, loans, distributions or withdrawals by participants. During 1997, a settlement was reached for all of the insurance company's contract-holders and participants to receive 100% of the principal balance plus approximately 15%, or $561,000, as an additional interest credit. The principal and interest credit related to these assets were automatically invested into the Managed Income Fund, at which time participants could transfer their respective balances to any of the Plan's other investment options in accordance with regular Plan terms. INTEREST AND DIVIDENDS: Interest income is recorded as earned on an accrual basis and dividend income is recorded on the ex-dividend date. NET APPRECIATION (DEPRECIATION) IN THE FAIR VALUE OF INVESTMENTS: The Plan presents in the Statements of Changes in Net Assets Available for Plan Benefits, With Fund Information, the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. (Continued) 16 ECOLAB SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, (Continued) ---------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued): CONTRIBUTIONS: Participant before-tax and after-tax savings contributions are recorded in the period the employer makes the payroll deductions. Employer matching contributions are accrued based on participant contributions. For the 1996 Plan year, the Company's Board of Directors declared a profit sharing contribution amounting to $1,255,000 to be divided among eligible participants. No employer profit sharing contributions were made for the 1997 or 1995 Plan years. USE OF ESTIMATES: The preparation of the Plan's financial statements in conformity with generally accepted accounting principles requires the Plan Administrator to make significant estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and, when applicable, disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. RISKS AND UNCERTAINTIES: The Plan provides for various investment options in various combinations of investment funds. Investment funds are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the Statement of Net Assets Available for Plan Benefits in future periods. DISTRIBUTIONS TO PARTICIPANTS: Distributions to participants are recorded when the distribution is made. PLAN EXPENSES: A portion of the administrative expenses of the Plan are paid by the Company. Certain asset management and administrative fees of the Plan are charged against the Plan's investment income. (Continued) 17 ECOLAB SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, (Continued) ---------- 3. INVESTMENTS: Investments that represent 5 percent or more of the Plan's net assets available for Plan benefits at December 31, 1997 and 1996 are summarized as follows:
Fair Value Cost ----------------------- ----------------------- (in thousands) 1997 1996 1997 1996 -------- -------- -------- -------- Fidelity Puritan Fund $ 32,128 $ 27,297 $ 28,139 $ 26,016 Fidelity Spartan U.S. Equity Index Fund 38,935 25,598 25,209 18,921 Fidelity Magellan Fund 31,100 24,167 25,947 22,782 Managed Income Fund 39,860 39,803 40,368 39,803 Ecolab Stock Fund 230,208 148,184 95,889 77,324
At December 31, 1997, the fair value of non-participant-directed investments in the Ecolab Stock Fund approximated $143,604,000. 4. TAX STATUS: The Plan constitutes a qualified trust under Section 401(a) of the Code and therefore is exempt from federal income taxes under provisions of Section 501(a). The Plan also complies with the provisions of Section 401(k) of the Code. A tax qualification letter, dated October 26, 1994, was received from the Internal Revenue Service. The letter stated that the Plan, as then designed, was in compliance with the applicable requirements of the Code. The Plan has been amended since receiving the determination letter in connection with the change in its trustee and investment managers along with other modifications (see Note 6). However, the Plan Administrator believes the Plan is currently designed and being operated in compliance with the applicable requirements of the Code and therefore believes the Plan is qualified and tax-exempt, as described above. Therefore, no provision for income taxes has been included in the Plan's financial statements. (Continued) 18 ECOLAB SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, (Continued) ---------- 5. RELATED PARTY AND PARTY-IN-INTEREST TRANSACTIONS: The trustee is authorized under contract provisions, or by ERISA regulations providing an administrative or statutory exemption, to invest in funds under its control and in securities of the Company. As of December 31, 1997, 1996 and 1995, investments in funds managed by Fidelity totaled 43%, 49% and 50% of Plan assets, respectively. Participant contributions are invested in the Managed Income Fund and mutual funds under the trustee's control. In addition, participant and employer matching contributions are invested in the Ecolab Stock Fund consisting of primarily Ecolab Inc. common stock and also short-term investment funds under the trustee's control. In 1997, 1996 and 1995, the number and dollar value of such purchases and sales of funds managed by the trustee and funds consisting of Company stock were as follows (dollars in thousands):
1997 ------------------------------------------------------ # of # of Purchases Sales Purchases Sales --------- --------- --------- --------- Fidelity funds 2,658 2,031 $ 85,593 $ 72,863 Ecolab Stock Fund 334 273 $ 42,393 $ 33,154 1996 ------------------------------------------------------ # of # of Purchases Sales Purchases Sales --------- --------- --------- --------- Fidelity funds 2,691 1,968 $ 81,625 $ 47,738 Ecolab Stock Fund 342 270 $ 29,760 $ 19,735 1995 ------------------------------------------------------ # of # of Purchases Sales Purchases Sales --------- --------- --------- --------- Fidelity funds 2,469 1,624 $ 115,034 $ 68,422 Ecolab Stock Fund 318 229 $ 22,029 $ 25,729
(Continued) 19 ECOLAB SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS, (Continued) ---------- 6. PLAN AMENDMENTS: The Plan was amended, effective in 1998, to incorporate various legislative changes relating to discrimation testing and benefits distribution, and to incorporate changes in Securities and Exchange Commission requirements relating to the Ecolab Stock Fund. The amendment also included other minor modications necessary to allow for efficient and equitable Plan administration. To the extent required to maintain qualification of the Plan under Code section 401(a), this amendment was effective retroactively as of January 1, 1997. A Declaration of Transfer was adopted, effective 12/1/97, to transfer the assets and liabilities of the Plan attributable to the accounts of all participants who become employed by Century Products, Inc. to the trustee of the trust established under the Century Products, Inc. 401(k) Plan. The amounts transferred for these participants in 1997 are included with distributions and withdrawals on the Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information. A Declaration of Merger was adopted by the Company, effective January 1, 1997, to merge the assets of the Huntington Laboratories, Inc. Savings and Retirement Plan into the Plan. A Declaration of Merger was adopted by the Company, effective January 1, 1996, to merge the assets of the Profit Sharing Retirement Plan and Trust Agreement of Kay Chemical Company and the Kay Chemical Company Section 401(k) Savings Plan into the Plan. A Declaration of Merger was also adopted by the Company, effective June 1, 1996, to merge the assets of the Profit Sharing Plan and Trust for Employees of Western Water Management, Inc. into the Plan. The assets transferred into the Plan as a result of these mergers in the Plan years 1997 and 1996 were invested in similar investment options as under the prior plans until participants were able to direct their accounts into one or more of the Plan's available investment options. The Plan was amended, effective in 1995, to provide for the change in its trustee and investment managers to Fidelity. As a result of these changes, the Plan increased its investment options available to Plan participants from three to nine, provided for daily processing and valuation of accounts and the ability to handle the majority of participant transactions by telephone. 20 SUPPLEMENTAL SCHEDULES ECOLAB SAVINGS PLAN LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES as of December 31, 1997 -------------- EIN 41-0231510 Plan Number: 003
(Dollars in thousands) (c) Description of Investment, (b) Including Maturity Date, (e) Identity of Issue, Borrower, Rate of Interest, Collateral, (d) Current (a) Lessor or Similar Party Par or Maturity Value Cost Value - --- ---------------------------------- ------------------------------------ ---------- ---------- * Fidelity Management and Fidelity Retirement Money Research Co. Market Portfolio, 8,300,004 units $ 8,300 $ 8,300 * Fidelity Management and Fidelity Government Research Co. Securities Fund, 1,396,038 units 13,350 13,835 * Fidelity Management and Fidelity Puritan Fund, Research Co. 1,657,803 units 28,139 32,128 * Fidelity Management and Fidelity Spartan U.S. Research Co. Equity Index Fund, 1,113,069 units 25,209 38,935 * Fidelity Management and Fidelity Magellan Fund, Research Co. 326,435 units 25,947 31,100 * Fidelity Management and Fidelity Small Cap Selector, Research Co. 829,230 units 10,681 13,209 * Fidelity Management and Fidelity Overseas Fund, Research Co. 356,293 units 10,514 11,594 * Fidelity Management Managed Income Fund, Trust Co. 40,367,789 units 40,368 39,860 * Ecolab Inc. Ecolab Stock Fund, 8,753,154 units 95,889 230,208 * Participant loans Participant loans due 1/1998-12/2007 (stated interest rates ranging from 6.0% to 11.5%) 15,195 ---------- ---------- $ 258,397 $ 434,364 ---------- ---------- ---------- ----------
* Party-in-interest 21 ECOLAB SAVINGS PLAN LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS for the year ended December 31, 1997 -------------- EIN 41-0231510 Plan Number: 003
(Dollars in thousands) (h) Value of (b) (c) (d) (g) Asset on (i) (a) Description Purchase Selling Cost of Transaction Net Gain Identity of Party Involved of Asset Price Price Asset Date (Loss) - -------------------------- -------------------------- ----------- ----------- ----------- ----------- ----------- SERIES OF TRANSACTIONS: Fidelity Management Trust Company Fidelity Retirement Money Market Portfolio $ 16,732 $ 16,732 $ 16,732 $ 16,287 16,287 16,287 $ - Fidelity Puritan Fund 9,785 9,785 9,785 8,190 7,662 8,190 528 Fidelity Spartan U.S. Equity Index Fund 16,149 16,149 16,149 11,269 9,861 11,269 1,408 Managed Income Fund 19,636 19,636 19,636 19,071 19,071 19,071 - Ecolab Inc./Fidelity Management Trust Co. Ecolab Stock Fund 42,393 42,393 42,393 33,154 23,828 33,154 9,326
NOTE (1): The following columns of Schedule 27d were excluded as they are not applicable: (e) - Lease Rental and (f) - Expenses Incurred with Transaction. 22 ECOLAB SAVINGS PLAN EXHIBITS The following documents are filed as exhibits to this Report: Exhibit No. Document - ----------- -------- (23) Consent of Independent Accountants. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. ECOLAB SAVINGS PLAN DATE June 29, 1998 By: /s/ Diane A. Wigglesworth -------------------- --------------------------------------------- Diane A. Wigglesworth Compensation Vice President, Ecolab Inc. (Plan Administrator) 23 EXHIBIT INDEX Exhibit No. Document Method of Filing - ----------- -------- ---------------- (23) Consent of Independent Accountants. Filed herewith electronically EX-23 2 EXHIBIT 23 Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statements of Ecolab Inc. on Form S-8 (Registration Nos. 2-90702, 33-18202, 33-55986 and 33-56101) of our report dated June 12, 1998 on our audits of the financial statements of the Ecolab Savings Plan as of December 31, 1997 and 1996 and for each of the three years in the period ended December 31, 1997, and related supplemental schedules as of and for the year ended December 31, 1997, which report is included in this Annual Report on Form 11-K. We also consent to the reference to our firm under the caption "Interests of Named Experts and Counsel" in Registration No. 33-56101, as it relates to the financial statements and related supplemental schedules referred to above and included in this Annual Report on Form 11-K. /s/Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Saint Paul, Minnesota June 29, 1998 -----END PRIVACY-ENHANCED MESSAGE-----