Exhibit 10.3

 

AMENDMENT OF THE

3M 1997, 2002 and 2005

MANAGEMENT STOCK OWNERSHIP PROGRAMS —

Single global definition of Retirement

 

                WHEREAS, 3M has adopted and maintains the 3M 1997, 2002 and 2005
Management Stock Ownership Programs (referred to hereinafter as the “Program”),
under which Program the Company provided (prior to its expiration) stock-based
compensation to certain employees of the Company and its Affiliates; and

 

                WHEREAS, in order to improve the consistency and accuracy of the
Program’s administration with respect to the continued exercisability of stock
options and the continued vesting of stock options, restricted stock and
restricted stock units following the retirement of employees, the Company wishes
to amend the Program to include a single global definition of retirement;

 

                RESOLVED, pursuant to the authority contained in Section 13 of
the Program (Section 14 in the case of the 1997 Program), the plan documents of
such Program shall be and they hereby are amended as follows, effective
immediately:

 

1)                             Section 2(u) of the 1997 Program is amended to
read as follows:

 

                (u)               “Retires” or “Retirement” shall mean the
termination of a Participant’s employment with the Company (i) after attaining
age 55 with at least five years of employment service or after attaining age 65,
or (ii) if the Participant is covered by a retirement plan of the Company which
enables such Participant to retire before attaining age 55 with at least five
years of employment service or age 65, after meeting the requirements for
retirement under a retirement plan of the Company.

 

2)                          Section 10 of the 1997 Program is amended to read as
follows:

 

(a)           Participation hereunder shall cease and all rights under the 1997
Program are automatically forfeited by the Participant upon the date of
termination of employment for any cause other than: (1) Retirement, (ii) a
termination in connection with which the Participant executes a written release
of employment-related claims in favor of the Company that provides (with the
approval of the Company)

 

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for the nonforfeiture of vested Options and Stock Appreciation Rights,
(iii) because of physical or mental disability as recognized under a plan
maintained by the Company, or (iv) death.

 

(b)           If a Participant Retires or changes employment status as a result
of physical or mental disability, without having fully exercised an Option or
Stock Appreciation Right, the Participant shall be entitled, within the
remaining Option Period or term of the Stock Appreciation Right, as provided in
the applicable Agreement, (but not more than ten years from the date of
Agreement), to exercise his or her Option or Stock Appreciation Right and, in
case of Options, to purchase (i) the number of shares which could have been
purchased on the date of Retirement or date of changed employment status, plus
(ii) the number of additional shares which the Participant would be entitled to
purchase on the next Anniversary Date; or, in the case of Stock Appreciation
Rights, to receive the full amount of appreciation for all issued Stock
Appreciation Rights, regardless of whether yet exercisable.  Incentive Stock
Options, if not exercised within three months (one year in the case of a
participant who was disabled at Retirement) following Participant’s date of
Retirement, shall fail to qualify for treatment under Section 422 of the Code,
except in the case where a Participant dies within the three month period
(one-year period in the case of a disabled person) following such date of
Retirement, in which event Participant’s estate or representative shall have two
years to exercise Options as Incentive Stock Options.  If a Participant who has
thus Retired dies prior to the end of such remaining Option Period or term of
the Stock Appreciation Right, without having yet fully exercised an Option or
Stock Appreciation Right, the Option or Stock Appreciation Right may be
exercised within two years after the date of his or her death (not more than ten
years from the date of the Agreement) by the Participant’s estate or by a person
who acquired the right to exercise such Option or Stock Appreciation Right by
bequest or inheritance or by reason of the death of the Participant.

 

(c)           If a Participant terminates employment with the Company and in
connection with such termination the Participant executes a written release of
employment-related claims in favor of the Company that provides (with the
approval of the Company) for the nonforfeiture of vested Options and Stock
Appreciation Rights, the Participant shall be entitled, within the remaining
Option Period or term of the Stock Appreciation Right, as provided in the
applicable Agreement, to exercise his or her vested Nonqualified Options and
Stock Appreciation Rights.  Unless extended pursuant to Section 10(e) herein,
any Incentive Stock Options granted to a Participant described in this paragraph
(c) shall expire and all of the Participant’s rights with respect thereto shall
be forfeited upon the date of termination of such Participant’s employment with
the Company.

 

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(d)           If the Participant, prior to Retirement, dies without having fully
exercised an Option or Stock Appreciation Right, the Option or Stock
Appreciation Right may be exercised within two years following his or her death
(but not more than ten years from the date of the Agreement) by the
Participant’s estate or by a person who acquired the right to exercise such
Option or Stock Appreciation Right by bequest or inheritance or by reason of the
death of the Participant, and such representative may, in the case of Options,
purchase (1) the number of shares which the decedent could have purchased on the
date of death, plus (ii) the number of additional shares which the decedent
would have been entitled to purchase on the next Anniversary Date, or, in the
case of Stock Appreciation Rights, may receive the full amount of appreciation
for all issued Stock Appreciation Rights at the date of Participant’s death,
regardless of whether yet exercisable.

 

(e)           Notwithstanding paragraph (a) of this section, if the Participant
is terminated without having fully exercised an Option or Stock Appreciation
Right under circumstances which the Committee believes to warrant special
consideration and the Committee has determined that the Participant’s rights
will not be forfeited at the date of termination, the Option or Stock
Appreciation Right may be exercised within two years following his or her
termination of employment (but not more than ten years from the date of the
Agreement) for (i) the number of shares which the Participant could have
purchased or received on the date of termination of employment, plus (ii) the
number of additional shares which the Participant would have been entitled to
purchase on the next Anniversary Date, or, in the case of Stock Appreciation
Rights, the full amount of appreciation for all issued Stock Appreciation
Rights, regardless of whether yet exercisable.

 

(f)            If the Participant dies, either prior to or following Retirement,
or becomes totally disabled because of a physical or mental disability and has
not yet received the stock certificate for the shares of Common Stock
represented by the grant of Restricted Stock or other Stock Award, then all
restrictions imposed by the Restricted Period or other Conditions prescribed by
the Committee, if any, shall automatically lapse and a stock certificate shall
be delivered to the Participant or the Participant’s beneficiary,
representative, or estate, as the case may be, as provided in
Section 6(g) herein.

 

3)          Section 2(t) of the 2002 Program is amended to read as follows:

 

               (t)                “Retires” or “Retirement” shall mean the
termination of a Participant’s employment with the Company (i) after attaining
age 55 with at least five years of employment

 

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service or after attaining age 65, or (ii) if the Participant is covered by a
retirement plan of the Company which enables such Participant to retire before
attaining age 55 with at least five years of employment service or age 65, after
meeting the requirements for retirement under a retirement plan of the Company.

 

4)          Section 2(w) of the 2005 Program is amended to read as follows:

 

               (w)              “Retires” or “Retirement” shall mean the
termination of a Participant’s employment with the Company (i) after attaining
age 55 with at least five years of employment service or after attaining age 65,
or (ii) if the Participant is covered by a retirement plan of the Company which
enables such Participant to retire before attaining age 55 with at least five
years of employment service or age 65, after meeting the requirements for
retirement under a retirement plan of the Company.

 

AMENDMENT OF THE 3M 2005

MANAGEMENT STOCK OWNERSHIP PROGRAM —

Compliance with Section 409A

 

                WHEREAS, 3M has adopted and maintains the 3M 2005 Management
Stock Ownership Program (referred to hereinafter as the “Program”), under which
Program the Company provided (prior to its expiration) stock-based compensation
to certain employees of the Company and its Affiliates; and

 

                WHEREAS, the Company wishes to amend the Program to ensure that
its plan document complies with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended, and the regulations issued thereunder;

 

                RESOLVED, pursuant to the authority contained in Section 13 of
the Program, the plan document of such Program shall be and it hereby is amended
as follows, effective January 1, 2009:

 

1)            Paragraph (e) of Section 11 is amended to read as follows:

 

(e)          If a Participant dies, either prior to or following Retirement, or
becomes “disabled” within the meaning of section 409A(a)(2)(C) of the Code, and
has not yet received the stock certificate for the shares of Common Stock
represented by a grant of Restricted Stock, Restricted Stock Units or other

 

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Stock Award, then all restrictions imposed during the Restricted Period and any
other Conditions prescribed by the Committee, if any, shall automatically lapse
and a stock certificate shall be delivered to the Participant or the
Participant’s beneficiary, representative, or estate, as the case may be upon
the Participant’s demonstration to the satisfaction of the Committee that such
Participant is considered “disabled” for purposes of section 409A(a)(2)(C) of
the Code.

 

2)            Paragraph (d) of Section 14 is amended to read as follows:

 

(d)          For purposes of this Section 14, a Change in Control of the Company
shall be deemed to have occurred only if a “change in the ownership” or a
“change in effective control” and/or a “change in the ownership of a substantial
portion of the assets” of the Company has taken place (as those terms are
defined in Treasury Regulations §1.409A-3(i)(5) or such other regulation or
guidance issued under section 409A of the Code).

 

3)            Paragraph (e) of Section 14 is amended to read as follows:

 

(e)          In the event that the provisions of this Section 14 result in
“payments” that are finally determined to be subject to the excise tax imposed
by section 4999 of the Code, the Company shall pay to each Participant an
additional amount sufficient to fully satisfy such excise tax and any additional
federal, state, and local income taxes payable on the additional amount. 
Payment of this additional amount shall be made as soon as administratively
feasible, but no later than two and one-half months following the end of the
Participant’s taxable year in which the amount of the excise tax payable has
been determined.

 

4)            Paragraph (f) of Section 14 is amended to read as follows:

 

(f)           The Company shall pay to each Participant the amount of all
reasonable legal and accounting fees and expenses incurred by such Participant
in seeking to obtain or enforce his or her rights under this Section 14, or in
connection with any income tax audit or proceeding to the extent attributable to
the application of section 4999 of the Code to the payments made pursuant to
this Section 14, unless a lawsuit commenced by the Participant for such purposes
is dismissed by the court as being frivolous or otherwise improper under
applicable court rules.  The Company shall also pay to each Participant the
amount of all reasonable tax and financial planning fees and expenses incurred
by such Participant in connection with such Participant’s receipt of payments
pursuant to this Section 14.  Payment of these legal and accounting fees and
expenses, as well as these tax and financial planning fees and expenses, shall
be made as soon as administratively feasible, but no later than two and one-half
months following the end of the Participant’s taxable year in which such fees
and expenses have been incurred.

 

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