EXHIBIT 10.8

 

3M COMPANY
2016 LONG-TERM INCENTIVE PLAN

DEFERRED STOCK UNIT AWARD AGREEMENT

Pursuant to the 3M Company 2016 Long-Term Incentive Plan (as amended from time
to time, the “Plan”), 3M Company (the “Company”) granted to the nonemployee
member of the Company’s Board of Directors (the “Board”) listed below
(“Participant”) the Deferred Stock Units described below (the “DSUs”).  The DSUs
are subject to the terms and conditions set forth in this Deferred Stock Unit
Award Agreement (this “Agreement”) and the Plan.  The Plan is incorporated into
this Deferred Stock Unit Award Agreement by reference.

 

 

Participant:

 

Grant Date:

 

Number of DSUs:

 

Vesting Schedule:

The DSUs shall be fully vested upon grant.

 

 

 

ACCEPT” box on the “Grant Terms and Agreement” page, you agree to be bound by
the terms and conditions of this Agreement and the Plan.  You acknowledge that
you have reviewed and fully understand all of the provisions of this Agreement
and the Plan, and have had the opportunity to obtain advice of counsel prior to
accepting the grant of the DSUs pursuant to this Agreement.  You hereby agree to
accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or relating to the DSUs.

 

ELECTRONIC Acceptance of Award:

 

By clicking on the “ACCEPT” box on the “Grant Terms and Agreement” page, you
agree to be bound by the terms and conditions of this Agreement and the
Plan.  You acknowledge that you have reviewed and fully understand all of the
provisions of this Agreement and the Plan, and have had the opportunity to
obtain advice of counsel prior to accepting the grant of the DSUs pursuant to
this Agreement.  You hereby agree to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions arising
under the Plan or relating to the DSUs.

 

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Article I.
Award of DSUs and dividend equivalents; SETTLEMENT

1.1 DSUs and Dividend Equivalents. 

 

(a) Effective as of the Grant Date specified above, the Company irrevocably
grants to Participant an award of the number of DSUs specified above.  Each DSU
represents the right to receive one Share on the terms, and subject to the
conditions, set forth in this Agreement and the Plan.    

(b) Effective as of the Grant Date, the Company hereby grants to Participant a
Dividend Equivalent for each DSU evidenced by this Agreement.  Each Dividend
Equivalent represents the right to receive additional DSUs for each ordinary
cash dividend paid on the outstanding shares of Common Stock that has a record
date after the Grant Date set forth above and prior to the settlement date of
the DSU to which such Dividend Equivalent relates.  The aggregate number of
additional DSUs issued pursuant to this Agreement on all Dividend Equivalents
for any ordinary cash dividend shall equal the product, rounded up to the
nearest thousandth of a DSU, of (A) the aggregate number of DSUs evidenced by
this Agreement on the record date for such dividend (including additional DSUs
issued prior to the relevant record date pursuant to this Section 1.1(b), but
excluding DSUs settled prior to the relevant record date), multiplied by (B) the
per Share dollar amount of such dividend, divided by (C) the closing sales price
(rounded to the nearest whole cent) for a Share, as quoted on the New York Stock
Exchange for the last trading day immediately preceding the payment date of such
dividend.  All additional DSUs issued pursuant to this Section 1.1(b) shall be
subject to the same terms and conditions as the original DSUs to which they
relate.  The addition of DSUs pursuant to this Section 1.1(b) shall continue
until all of the DSUs evidenced by this Agreement have been settled or otherwise
expires.

1.2 Settlement.

 

(a) All of Participant’s DSUs and any related Dividend Equivalents will be paid
in Shares in a single lump sum in the first year following Participant’s
Separation from Service (as such term is defined for purposes of the 3M
Compensation Plan for Nonemployee Directors).

(b) Notwithstanding anything to the contrary in Section 1.2(a), if Participant
completed and timely submitted to the Company an election to defer receipt (the
“Payment  Election”) of all or any of the Shares underlying the DSUs in a form
acceptable to the Company, then the Shares underlying the DSUs shall be
distributable to Participant in accordance with the terms of the Payment
Election.

(c) Notwithstanding anything to the contrary in this Agreement or the Plan, no
DSUs or Dividend Equivalents shall be distributed to Participant pursuant to
this Section 1.2 during the six-month period following Participant’s separation
from service if the Company determines that distributing such DSUs and Dividend
Equivalents at the time or times indicated in this Agreement would be a
prohibited distribution under Section 409A(a)(2)(B)(i) of the Code.  If the
distribution of all or any of Participant’s DSUs and Dividend Equivalents is
delayed as a result of the previous sentence, then such portion of the DSUs and
Dividend Equivalents shall be paid to Participant during the thirty (30)-day
period beginning on the first business day following the end of such six-month
period (or such earlier date upon which such DSUs and Dividend Equivalents can
be distributed under Section 409A without resulting in a prohibited
distribution, including as a result of Participant’s death).

(d) Notwithstanding any provisions of this Agreement or the Plan to the
contrary, the time of distribution of the DSUs and the Dividend Equivalents
under this Agreement may not be changed except as may be permitted by the
Administrator in accordance with Section 409A and the applicable Treasury
Regulations promulgated thereunder.

Article II.

TAXATION AND TAX WITHHOLDING

2.1 Responsibility for Taxes.

 

(a) Participant acknowledges that, regardless of any action taken by the
Company, the ultimate liability for all income tax, social insurance, payroll
tax, fringe benefit tax, payment on account or other tax-related items

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related to Participant's participation in the Plan and legally applicable to
Participant or deemed by the Company in its discretion to be an appropriate
charge to Participant even if legally applicable to the Company (“Tax-Related
Items”) is and remains Participant’s responsibility and may exceed the amount
actually withheld by the Company.  Participant further acknowledges that the
Company (i) makes no representations or undertakings regarding the treatment of
any Tax-Related Items in connection with any aspect of the DSUs, including, but
not limited to, the grant of the DSUs or any related Dividend Equivalents, the
subsequent sale of Shares acquired pursuant to the DSUs or any related Dividend
Equivalents, and the receipt of any dividends; and (ii) does not commit to and
is under no obligation to structure the terms of the grant or any aspect of the
DSUs to reduce or eliminate Participant’s liability for Tax-Related Items or
achieve any particular tax result.  Further, if Participant is subject to
Tax-Related Items in more than one jurisdiction, Participant acknowledges that
the Company may be required to withhold or account for Tax-Related Items in more
than one jurisdiction.

(b) Prior to the relevant taxable or tax withholding event, as applicable,
Participant agrees to assist the Company in satisfying any applicable
withholding obligations for Tax-Related Items.  In this regard, the Company, or
their respective agents, at their discretion, may satisfy, or allow Participant
to satisfy, the withholding obligation with regard to all Tax-Related Items by
any of the following, or a combination thereof:

(i) By cash, check or wire transfer of immediately available funds; provided
that the Company may limit the use of one of the foregoing methods if one or
more of the methods below is permitted;

(ii) Delivery (including telephonically to the extent permitted by the Company)
of a notice that Participant has placed a market sell order with a broker
acceptable to the Company with respect to Shares then issuable upon settlement
of the DSUs, and that the broker has been directed to deliver promptly to the
Company funds sufficient to satisfy the obligation for Tax-Related Items;
provided that such amount is paid to the Company at such time as may be required
by the Company;

(iii) To the extent permitted by the Administrator, surrendering Shares then
issuable upon settlement of the DSUs valued at their Fair Market Value on such
date; or

(iv) By the deduction of such amount from other compensation payable to
Participant.

(c) The Company has the right and option, but not the obligation, to treat
Participant’s failure to provide timely payment of any Tax-Related Items as
Participant's election to satisfy all or any portion of the Tax-Related Items
pursuant to Section 2.1(b)(iii) or (iv) above, or a combination of such
sections. 

(d) Depending on the withholding method, the Company may withhold or account for
Tax-Related Items by considering applicable minimum statutory withholding
amounts or other applicable withholding rates, including maximum applicable
rates, in which case Participant may receive a refund of any over-withheld
amount in cash through the Company’s normal payment processes for members of the
Board and will have no entitlement to the Common Stock equivalent.  If the
obligation for Tax-Related Items is satisfied by surrendering Shares, solely for
tax purposes and not intended to modify or restrict in any way Section 4.2 of
the Plan, Participant is deemed to have been issued the full number of Shares
subject to the DSU, notwithstanding that a number of Shares are surrendered for
the purpose of paying the Tax-Related Items.

(e) Finally, Participant agrees to pay to the Company any amount of Tax-Related
Items that the Company may be required to withhold or account for as a result of
Participant's participation in the Plan that cannot be satisfied by the means
previously described.  The Company may refuse to issue or deliver the Shares or
the proceeds from the sale of the Shares if Participant fails to comply with
Participant's obligations in connection with the Tax-Related Items.

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Article III.

other provisions

3.1 Nature of Grant.  In accepting the DSUs, Participant understands,
acknowledges, and agrees that:

(a) the Plan is established voluntarily by the Company, it is discretionary in
nature and it may be modified, amended, suspended or terminated by the Company
at any time in accordance with its terms;

(b) all decisions with respect to future DSU or other grants, if any, will be at
the sole discretion of the Administrator;

(c) nothing in the Plan or this Agreement shall in any way be construed or
interpreted to adversely affect or otherwise impair the right of the Company or
its stockholders to remove Participant from the Board at any time in accordance
with the provisions of applicable law;

(d) Participant is voluntarily participating in the Plan;

(e) the future value of the Shares underlying the DSUs is unknown,
indeterminable and cannot be predicted with certainty;

(f) unless otherwise provided in the Plan or by the Administrator, the DSUs and
the benefits evidenced by this Agreement do not create any entitlement to have
the DSUs or any such benefits transferred to, or assumed by, another company,
nor to be exchanged, cashed out or substituted for, in connection with any
corporate transaction affecting the Common Stock; and

(g) the following provision shall not apply if Participant resides in the State
of California: In consideration of the grant of the DSUs, and to the extent
permitted by applicable law, Participant agrees not to institute any claim
against the Company or any Subsidiary, to waive Participant's ability, if any,
to bring such claim, and release the Company and its Subsidiaries from any such
claim; if, notwithstanding the foregoing, any such claim is allowed by a court
of competent jurisdiction, then, by participating in the Plan, Participant shall
be deemed irrevocably to have agreed not to pursue such claim and agrees to
execute any and all documents necessary to request dismissal or withdrawal of
such claim.

3.2 Relationship to Other Plans.  The grant of DSUs and Dividend Equivalents
under this Agreement constitutes payment of fees for services as a member of the
Board in accordance with the terms of the 3M Compensation Plan for Nonemployee
Directors.

3.3 No Advice Regarding Grant.  The Company is not providing any tax, legal or
financial advice, nor is the Company making recommendations regarding
participation in the Plan, or Participant's acquisition or sale of the
underlying Shares.  Participant understands and agrees that Participant should
consult with Participant's own personal tax, legal and financial advisors
regarding participation in the Plan before taking any action related to his or
her Award(s).

3.4 Data Privacy.  Participant hereby explicitly and unambiguously consents to
the collection, use and transfer, in electronic or other form, of Participant's
personal data as described in this Agreement and any other grant materials by
and among, as applicable, the Company and its other Subsidiaries for the purpose
of implementing, administering and managing the Plan.

Participant understands that the Company may hold certain personal information
about Participant, including, but not limited to, Participant's name, home
address, email address and telephone number, date of birth, passport, social
insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in the Company, details of all stock
options, deferred stock units or any other entitlement to shares of stock
awarded, canceled, exercised, vested, unvested or outstanding in Participant's
favor (“Data”), for the purpose of implementing, administering and managing the
Plan.

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Participant understands that Data will be transferred to Fidelity Investments,
or such other stock plan service provider as may be selected by the Company in
the future, which is assisting the Company with the implementation,
administration and management of the Plan.  Participant understands that the
recipients of the Data may be located in the United States or elsewhere, and
that the recipients’ country (e.g., the United States) may have different data
privacy laws and protections than Participant's country.  Participant
understands that if Participant resides outside the United States Participant
may request a list with the names and addresses of any potential recipients of
the Data by contacting Participant's local human resources
representative.  Participant authorizes the Company, Fidelity Investments and
any other possible recipients which may assist the Company (presently or in the
future) with implementing, administering and managing the Plan to receive,
possess, use, retain and transfer the Data, in electronic or other form, for the
purpose of implementing, administering and managing the Plan.  Participant
understands that Data will be held only as long as is necessary to implement,
administer and manage the Plan.  Participant understands that if Participant
resides outside the United States, Participant may, at any time, view Data,
request information about the storage and processing of Data, require any
necessary amendments to Data or refuse or withdraw the consents herein, in any
case without cost, by contacting in writing Participant's local human resources
representative.  Further, Participant understands that Participant is providing
the consents herein on a purely voluntary basis.  If Participant does not
consent, or if Participant later seeks to revoke Participant's consent,
Participant's service with the Company will not be affected; the only
consequence of refusing or withdrawing Participant's consent is that the Company
may not be able to grant additional shares of Common Stock or other equity
awards to Participant or administer or maintain such awards.  Therefore,
Participant understands that refusing or withdrawing Participant's consent may
affect Participant's ability to participate in the Plan.  For more information
on the consequences of Participant's refusal to consent or withdrawal of
consent, Participant understands that Participant may contact Participant's
local human resources representative.

3.5 Transferability. The DSUs are not transferable, except by will or the laws
of descent and distribution or as permitted by the Administrator in accordance
with the terms of the Plan.

3.6 Adjustments.  Participant acknowledges that the DSUs, the Shares subject to
the DSUs and the Dividend Equivalents are subject to adjustment, modification
and termination in certain events as provided in this Agreement and the Plan.

 

3.7 Defined Terms; Titles.  Capitalized terms not defined in this Agreement have
the meanings given to them in the Plan. Titles are provided herein for
convenience only and are not to serve as a basis for interpretation or
construction of this Agreement.

 

3.8 Conformity to Applicable Laws.  Participant acknowledges that the Plan and
this Agreement are intended to conform to the extent necessary with all
Applicable Laws and, to the extent Applicable Laws permit, will be deemed
amended as necessary to conform to Applicable Laws.

 

3.9 Successors and Assigns.  The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement will inure to the
benefit of the successors and assigns of the Company.  Subject to the transfer
provisions set forth in the Plan, this Agreement will be binding upon and inure
to the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.

 

3.10 Entire Agreement and Imposition of Other Terms.  The Plan and this
Agreement constitute the entire agreement of the parties and supersede in their
entirety all prior undertakings and agreements of the Company and Participant
with respect to the subject matter hereof.  Nonetheless, the Company reserves
the right to impose other requirements on Participant’s participation in the
Plan, on the DSUs and on any Shares acquired under the Plan, to the extent the
Company determines it is necessary or advisable for legal or administrative
reasons, and to require Participant to sign any additional agreements or
undertakings that may be necessary to accomplish the foregoing.  In the event of
any inconsistency between the Plan and this Agreement, the terms of the Plan
will control.

 

3.11 Severability.  In the event that any provision of this Agreement is held
illegal or invalid, the provision will be severable from, and the illegality or
invalidity of the provision will not be construed to have any effect on, the
remaining provisions of this Agreement.

 

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3.12 Waiver.  Participant acknowledges that a waiver by the Company of breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other provision of this Agreement, or of any subsequent breach by
Participant or any other person.

 

3.13 Limitation on Participant’s Rights.  Participation in the Plan confers no
rights or interests other than as herein provided.  This Agreement creates a
contractual arrangement between the Company and Participant only and shall not
be construed as creating a trust for the benefit of Participant.  Neither the
Plan nor any underlying program, in and of itself, has any assets.  Participant
will have only the rights of a general unsecured creditor of the Company with
respect to amounts credited and benefits payable, if any, with respect to the
DSUs and Dividend Equivalents, and rights no greater than the right to receive
the Shares as a general unsecured creditor with respect to the DSUs and Dividend
Equivalents, as and when settled pursuant to the terms hereof.

 

3.14 Electronic Delivery and Acceptance.  The Company may, in its sole
discretion, decide to deliver any documents related to current or future
participation in the Plan by electronic means.  Participant hereby consents to
receive such documents by electronic delivery and agrees to participate in the
Plan through an on-line or electronic system established and maintained by the
Company or a third party designated by the Company.

 

3.15 Insider Trading Restrictions/Market Abuse Laws. Participant acknowledges
that, depending on Participant’s country, or broker’s country, or the country in
which the Shares are listed, Participant may be subject to insider trading
restrictions and/or market abuse laws in applicable jurisdictions, which may
affect Participant’s ability to, directly or indirectly, accept, acquire, sell,
or attempt to sell or otherwise dispose of Shares or rights to Shares under the
Plan during such times when Participant is considered to have “inside
information” regarding the Company (as defined by the laws or regulations in the
applicable jurisdictions or Participant’s country).  Local insider trading laws
and regulations may prohibit the cancellation or amendment of orders placed by
Participant before possessing inside information.  Furthermore, Participant
understands that he or she may be prohibited from (i) disclosing the inside
information to any third party, including Company employees (other than on a
“need to know” basis) and (ii) “tipping” third parties or causing them to
otherwise buy or sell securities.  Any restrictions under these laws or
regulations are separate from and in addition to any restrictions that may be
imposed under any applicable insider trading policy of the Company.  Participant
acknowledges that Participant is responsible for ensuring compliance with any
applicable restrictions and should consult Participant’s personal legal advisor
on these matters.

 

3.16 Section 409A.   The intent of the parties is that the payments and benefits
under this Agreement comply with Section 409A and the regulations and guidance
promulgated thereunder and, accordingly, to the maximum extent permitted, this
Agreement shall be interpreted to be in compliance therewith.  For purposes of
Section 409A, each payment that Participant may be eligible to receive under
this Agreement shall be treated as a separate and distinct payment.

 

3.17 Governing Law and Venue. This Agreement and the DSUs and the Dividend
Equivalents will be governed by and interpreted in accordance with the laws of
the State of Delaware, disregarding the choice-of-law principles of the State of
Delaware and any other state requiring the application of a jurisdiction’s laws
other than the State of Delaware. For purposes of litigating any dispute
concerning the grant of the DSUs, the Dividend Equivalents or this Agreement,
Participant consents to the jurisdiction of the State of Minnesota and agrees
that such litigation shall be conducted exclusively in the courts of Ramsey
County, Minnesota, or the federal courts for the United States for the District
of Minnesota, where this grant is made and/or to be performed.

 

 

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