Exhibit 10.1

March 13, 2007

Richard F. Ziegler

Senior Vice President, Legal Affairs and

General Counsel

3M Center, Building 220-14W-07

St. Paul, MN 55144

Dear Richard:

First, let me thank you for your able service to 3M.  You have provided strong
leadership of the Company’s legal function during an important period in the
Company’s history, serving with three chief executive officers.  Your presence
during Bob Morrison’s interim leadership and during my first year at 3M has
added an important element of continuity in a period of change.  Based on our
discussions in recent months, in which you have expressed an interest in
retiring from the Company, we have agreed that this is a sensible time for you
to transition to retirement and facilitate our selection of your successor.  The
purpose of this letter is to formalize our understandings concerning the
transition period and your retirement thereafter, which are as follows:

1.     As we have discussed, you will retire from the Company on January 1, 2008
and cease to serve as Senior Vice President, Legal Affairs and General Counsel
effective March 31, 2007.

2.     3M has requested and you have agreed that during the period between April
1, 2007 and your retirement on January 1, 2008 (the “Transition Period”) you
will assist in an orderly transition of your prior job responsibilities, as well
as perform such special projects as you and I may mutually agree upon.  3M will
provide you with reasonable administrative and other support during the
Transition Period.

3.     During the Transition Period you will continue as an active status
employee, but may pursue your other interests, whether personal or professional,
as long as your other obligations do not prevent you from providing reasonable
assistance in the orderly transition of your prior job responsibilities.  During
the Transition Period, you will continue to receive your current base salary and
benefits at all times subject to the terms of 3M’s benefit plans. In addition,
you will remain eligible to receive annual incentive compensation for 2007 under
the Executive Annual Incentive Plan with a target amount of $480,000 and with
the actual amount to be determined solely by the performance of 3M during 2007
without any adjustment for individual performance.   Payment of such annual
incentive compensation will be made at the same time and in the same form that
3M pays such annual incentive compensation to the other participants in such
Plan.  You understand that in view of your decision to retire as of January 1,
2008, you will not receive grants during 2007 under either the 3M Performance
Unit Plan or the Management Stock Ownership Program, as both of those are
intended as incentives for future long-term performance.

1

--------------------------------------------------------------------------------

4.     Following (and of course during) the Transition Period, you agree to
reasonably cooperate with and provide assistance to 3M, with due regard for your
other commitments, with respect to claims, threatened claims and legal
proceedings arising out of matters that occurred during your employment with the
Company as to which you have knowledge as a result of your employment.  3M will
reimburse you for any expenses you reasonably incur in the course of providing
such assistance.

5.     As of January 1, 2008, your employment with 3M shall end, and as a
retiree you will be entitled to receive the following compensation and benefits
pursuant to your employment agreement of November 19, 2002 (“2002 Employment
Agreement”) as well as the provisions of 3M’s compensation and benefit plans, at
all times subject to the terms of such compensation and benefit plans except
insofar as the 2002 Employment Agreement or this letter agreement modifies such
plans.

A.    Your outstanding 2005 and 2006 performance units under the 3M Performance
Unit Plan will continue to earn out and will ultimately be paid following the
completion of each respective performance period, in accordance with the terms
of the PUP plan document.

B.    Your outstanding stock option grants under the Management Stock Ownership
Program will continue to vest and be exercisable during the remainder of their
10-year terms, subject to the terms of the MSOP plan document.

C.    You will have coverage under the Portfolio II Retiree Medical Plan with an
opening account balance of 54,000 retiree medical credits (i.e. the 39,000
retiree medical credits granted to you under the 2002 Employment Agreement and
an additional 15,000 credits earned for your service through your retirement
date) and an equivalent balance for your spouse.

D.    You will receive benefits under 3M’s qualified and nonqualified pension
plans and the supplemental retirement benefit provided for in your 2002
Employment Agreement beginning immediately upon your retirement.  As provided in
that Agreement, the sum of these supplemental retirement benefit payments (which
will be based on a total of five years of 3M employment) and the pension
benefits you receive pursuant to 3M’s qualified and nonqualified pension plans,
will not be less than $300,000 per year.  This amount of at least $300,000 will
be paid each year following your retirement irrespective of the method by which
you elect upon retirement to receive your pension and supplemental retirement
benefit payments, including if you elect to receive payments in the form of a
100% joint and survivor annuity.

E.     The 4,000 restricted shares of 3M common stock granted to you pursuant to
your 2002 Employment Agreement will vest on January l, 2008 and will be
delivered to you shortly thereafter. The remaining 4,000 shares of restricted
stock granted to you

2

--------------------------------------------------------------------------------

pursuant to such agreement will be subject to forfeiture upon your retirement
date.

F.     You will continue to be covered by a universal life insurance policy
obtained pursuant to the Executive Life Insurance Plan, which shall be designed
to provide a death benefit equal to approximately 1.5 times your final annual
planned cash compensation of $1,199,000. 3M will continue to pay directly on
your behalf the premiums payable with respect to such policy for as long as
necessary to produce such coverage, subject to the provisions of such Executive
Life Insurance Plan.    You shall continue to own that policy and are free to
surrender it in exchange for the then-applicable surrender value whenever you
wish in accordance with the policy’s terms, but in that event 3M’s obligations
to pay any additional premiums shall cease.

G.    You will also receive the other retirement benefits and privileges for
which other retired senior executives of 3M are generally eligible.

6.     In accordance with our usual practice, 3M has requested and you have
agreed with the following:

A.    Immediate Release of Claims.  In consideration for the payments and
benefits provided to you under the terms of this letter agreement, you agree to
fully release and discharge 3M from liability for any and all claims,
complaints, and liabilities of any kind, known or unknown, based on any action,
decision, or event occurring prior to your signing this letter (each a
“Claim”).  For purposes of this release, “3M” means:  3M Company including any
3M division or operating unit; any 3M subsidiary, 3M joint venture, or 3M
affiliate (collectively “3M Affiliate”); each and every one of the officers,
agents, directors, supervisors, employees, representatives of 3M or any 3M
Affiliate; and any successor or assign of 3M or any 3M Affiliate.   This release
specifically includes without limitation, all Claims relating to the terms and
conditions of your employment with 3M and the ending of your employment,
including any Claim based upon THE AGE DISCRIMINATION IN EMPLOYMENT ACT, 29
U.S.C. §§621, ET SEQ.; any federal, state or local employment discrimination
laws, regulations or requirements, including, but not limited to Title VII of
the Civil Rights Act, 42 U.S.C. §§2000e, et seq.; the Americans with
Disabilities Act, 42 U.S.C. §§12101, et seq.; and the Minnesota Human  Rights
Act, Minn. Stat. Ch. 363; any law, statute, ordinance or regulation enforceable
in any other State relating to employment and/or employment discrimination; any
other statute, ordinance, or regulation; any contract, quasi-contract or
promissory estoppel; any tort, including wrongful discharge, misrepresentation,
fraud, infliction of emotional distress, or defamation; or any other legal or
equitable theory.

i.  Although by signing this letter agreement you are giving

3

--------------------------------------------------------------------------------

up each and every Claim you might have against 3M in any way relating to your
employment, you are not giving up your right under federal law to file a charge
of employment discrimination with the Equal Employment Opportunity Commission
(EEOC) and/or participate in or cooperate with the EEOC in any EEOC proceeding. 
You are also not giving up any right you may have under a state law to file a
charge of employment discrimination under state law with a state agency
concerned with employment discrimination, such as a state human rights
commission, and/or participate in or cooperate with the state agency in any
proceeding relating to a charge of employment discrimination.  However, even
though you are not giving up the rights described in the two immediately
preceding sentences regarding charges of discrimination, by signing this letter
agreement you are giving up the right to personally collect any money damages
and your right to personally receive any other non-monetary remedies that may
result from any EEOC or other government agency proceeding relating to a charge
of employment discrimination, unless a court holds that your release of all
Claims in this letter agreement is invalid.

ii. You acknowledge that you have 21 days to consider whether to sign this
letter agreement and accept its terms, including its release of Claims, but you
have advised that you have carefully considered this agreement, including the
release, and have exercised your right to waive the 21-day consideration
period.  3M has advised and encouraged you to consult with counsel about the
terms of this letter agreement.  You may rescind this letter agreement within 15
calendar days after signing it, which rescission may be done only by notifying
3M of that rescission in a writing delivered to 3M personally or by certified
mail, return receipt requested, prior to the end of the 15-day period.  If
mailed, the notice of rescission must be addressed as follows: Gregg M. Larson,
Associate General Counsel and Secretary, 3M Company, P. O. Box 33428, St. Paul,
MN 55133-3428.  If you do not sign and return this letter agreement to 3M by the
end of the 21-day period, or if you rescind the letter agreement, neither 3M nor
you will have any rights or obligations under this letter agreement.

Provided, however, that anything to the contrary notwithstanding, the foregoing
release is not intended to, and does not, release any of your rights under this
letter agreement, or to compensation and benefits (including without limitation
retirement benefits) referred to in this letter agreement or any rights that you
have to indemnification under your 2002 Employment Agreement, the 3M by-laws, or
otherwise.

4

--------------------------------------------------------------------------------

B.    Release at Time of Retirement.  Within 21 days of your retirement on
January 1, 2008, you will sign a General Release of Claims in the form attached
as Exhibit A.  The consideration for this General Release is described in this
letter agreement.  Should you fail to sign the General Release within this
21-day period or should you rescind such General Release, then this letter
agreement shall be deemed void ab initio and 3M shall have no obligations to you
under this letter agreement and you agree to repay to 3M the total amount of any
payments and benefits previously received pursuant to this letter agreement that
you would not have been entitled to receive in the absence of this letter
agreement.

C.    Termination prior to Retirement.  3M reserves the right to terminate your
employment at any time prior to January 1, 2008 but only for Cause as defined in
Section 9(e) of your 2002 Employment Agreement; provided, however, that (i)
references to the term “Agreement” in your Employment Agreement’s definition of
Cause shall include both that Employment Agreement and this letter agreement,
and (ii) in the case of any alleged material breach of this letter agreement,
including without limitation an alleged material breach of paragraph 6.D, you
shall be entitled to notice and an opportunity to cure as provided in section
9(e) of your 2002 Employment Agreement.   In the event your employment is
properly terminated for Cause, you will forfeit all remaining compensation or
benefits that would otherwise have been paid or provided under the terms of this
letter agreement other than the compensation or benefits you would have received
or retained upon a termination for Cause in the absence of this letter
agreement.

D.    Nondisparagement.    You will not (i) engage in or make any negative or
disparaging act or statement (written or verbal) relating to 3M or any of its
employees. officers or directors, or any of its products; (ii) engage in any act
or make any statement that will be damaging to 3M’s business reputation; or
(iii) cause or attempt to cause any other person to engage in any such act or
make any such statement (written or verbal).

E.     Nonsolicitation.  Without the consent in writing of 3M, you will not, for
a period of one year from the date you cease to be Senior Vice President, Legal
Affairs, and General Counsel, acting alone or in conjunction with others,
directly or indirectly: (i) hire or solicit any employee of 3M, or (ii) induce
or attempt to induce any employee of 3M or any of its subsidiaries to terminate
employment, provided that the foregoing provisions do not prevent you or an
organization with which you become affiliated from offering employment to any
employee of 3M or its subsidiaries who responds to a general solicitation not
specifically directed at employees of 3M or who initiates a request to be
considered for employment without any prior solicitation or inducement on your
part.

5

--------------------------------------------------------------------------------

7.     Your retirement on January 1, 2008 is voluntary on your part and for
purposes of your 2002 Employment Agreement will be considered a termination by
you other than for Good Reason. As a result, you expressly acknowledge and agree
that you will not be entitled to receive any severance pay or severance benefits
of any kind whatsoever on account of your retirement. While your 2002 Employment
Agreement has expired, those of its provisions that by their terms survive the
expiration remain in effect and will continue in effect during the Transition
Period and thereafter.  This includes sections 1, 4, 5, 7, 8, 9 (Section 9
applies only during the Transition Period) and 10 of your 2002 Employment
Agreement.  Also, nothing in this letter agreement is intended to supersede or
release you from your obligations to 3M under the 3M Employee Agreement that you
signed when you joined the Company. This Employee Agreement remains in full
force and effect in accordance with its terms.  In particular, you acknowledge
that you are still bound by the non-competition provisions of paragraph 3(F) of
such Employee Agreement. All of your rights of indemnification and with respect
to director and officer liability insurance shall also remain in full force and
effect.

8.     This letter agreement, including Exhibit A, contains the entire
understanding between you and 3M relating to the ending of your employment with
3M and it may be modified, amended or terminated only by a writing signed by you
and 3M.  Nothing in this letter agreement, including 3M’s willingness to provide
the compensation and benefits described above, is an admission by 3M that it
violated your rights, or any statute or law, and 3M expressly denies any such
violation.  This letter agreement is made under and shall be governed by and
construed in accordance with the laws of the State of Minnesota without regard
to its or any other forum’s choice of law principles.  The parties agree that
any litigation in any way relating to this letter agreement will be governed by
Section 10 of your 2002 Employment Agreement.  You may not assign your rights
and obligations under this letter agreement without the prior written consent of
the Company.  It is expressively understood and agreed by the parties that this
letter agreement and all of its terms shall be binding upon each party’s
representatives, heirs, executors, administrators, successors and assigns.

6

--------------------------------------------------------------------------------

Richard, let me thank you again for your service to 3M.  I hope the arrangements
described in this letter agreement are consistent with your understanding of our
discussions.  If so, please sign in the space provided below to accept this
proposal.

Sincerely,

 

 

/s/ George W. Buckley

 

 

George W. Buckley

Chairman of the Board, President and

Chief Executive Officer

 

 

 

Accepted and Agreed:

 

 

/s/ Richard F. Ziegler

 

 

Richard F. Ziegler

 

 

Date: March 14, 2007

 

7

--------------------------------------------------------------------------------

EXHIBIT A

GENERAL RELEASE OF CLAIMS

[To be signed no later than January 22, 2008]

I, RICHARD F. ZIEGLER, voluntarily agree to execute this General Release of All
Claims (the “Release”).  For purposes of this Release, the term “3M” includes
past, present and future divisions, subsidiaries, joint ventures and affiliates
of 3M Company and their officers, directors, employees, agents, insurers and
legal counsel.

I am signing this Release in exchange for the benefits provided to me pursuant
to the – M arch 14, 2007 letter agreement between 3M and me (the “Letter
Agreement”).

I understand that I have at least 21 days to consider whether to sign this
Release.  I understand that I may knowingly and voluntarily agree to waive the
21-day consideration period by electing to sign the Release before the 21 days
have passed.  I understand, however, that I may not sign this Release before
January 1, 2008.

What I Am Releasing

In consideration for the payments and benefits provided to me under the Letter
Agreement, I fully release and discharge 3M from liability for any and all
claims, complaints, and liabilities of any kind, known or unknown, based on any
action, decision, or event occurring prior to my signing this Release (each a
“Claim”). This specifically includes without limitation, all Claims relating to
the terms and conditions of my employment with 3M, and the ending of my
employment.

My release includes any Claim based upon:

1.             THE AGE DISCRIMINATION IN EMPLOYMENT ACT, 29 U.S.C. §§621, ET
SEQ.; and

2.             Federal, state or local employment discrimination laws,
regulations or requirements, including, but not limited to Title VII of the
Civil Rights Act, 42 U.S.C. §§2000e, et seq.; the Americans with Disabilities
Act, 42 U.S.C. §§12101, et seq.; the Minnesota Human Rights Act, Minn. Stat. Ch.
363; any law, statute, ordinance or regulation enforceable in any other State
relating to employment and/or employment discrimination; any other statute,
ordinance, or regulation; any contract, quasi-contract or promissory estoppel;
any tort, including wrongful discharge, misrepresentation, fraud, infliction of
emotional distress, or defamation; or any other legal or equitable theory.

Although by signing this Release I am giving up each and every Claim I might
have against 3M in any way relating to my employment, I am not giving up my
right under federal law to file a charge of employment discrimination with the
Equal Employment Opportunity Commission (EEOC) and/or participate in or
cooperate with the EEOC in any EEOC proceeding.  I also am not giving up any
right I may have under a state law to file a charge of employment discrimination
under state law with a state agency concerned with employment discrimination,
such as a state human rights commission, and/or participate in or cooperate with
the state agency in any proceeding relating to a charge of employment
discrimination.  However, even though I am not giving up the rights described in
the two immediately preceding sentences regarding charges of discrimination,
signing this Release means that I have given up my right to personally collect
any money damages and my right to personally receive any other non-monetary
remedies

8

--------------------------------------------------------------------------------

that may result from any EEOC or other government agency proceeding relating to
a charge of employment discrimination, unless a court holds that my release of
all Claims in this Release is invalid.

What I Am Not Releasing or Otherwise Giving Up.

I am not releasing any of my rights under the letter agreement, or to
compensation and benefits (including without limitation retirement benefits)
referred to in the letter agreement, or any rights that I may have to
indemnification under my November 19, 2002 employment agreement, the 3M by-laws,
or otherwise.  I also am not waiving any rights I have with regard to events
that occur after the date on which I sign this Release or with regard to claims
the law does not permit to be waived or released.

Other Agreements.

This Release binds me and also binds my heirs, executors, administrators,
assigns, agents, partners and successors in interest, and I confirm that no
Claim covered by this Release has been assigned or given to someone else.

This Release and 3M’s agreement to provide me the benefits under the Letter
Agreement is not an admission by 3M of any violation of my rights or of any
statutory violation, and 3M expressly denies having violated any of my rights or
any law.

I understand and agree that:  I have read this Release carefully; I have been
given a fair opportunity to discuss the terms of this Release; I understand its
provisions; prior to signing this Release, I was advised and encouraged to
consult an attorney, and I understand I am hereby being advised and encouraged
again to consult an attorney regarding the terms of this Release; I have
determined that it is in my best interest to sign this Release; I have not based
my decision to sign this Release on any statement or representation by 3M that
is not contained in this Release or the Letter Agreement; and I have entered
into this Release knowingly and voluntarily.

I may revoke this Release within 15 calendar days after signing it, by
delivering a written notice of revocation, either personally or by certified
mail, postmarked within the 15-day period, to:  Gregg M. Larson, Associate
General Counsel and Secretary, 3M Company, P. O. Box 33428, St. Paul, MN
55133-3428.

THE ABOVE IS UNDERSTOOD,

 

AGREED AND ACCEPTED THIS

 

       DAY OF JANUARY 2008

 

 

 

 

 

 

 

 

RICHARD F. ZIEGLER

 

9

--------------------------------------------------------------------------------