Exhibit 10.5

 

This document constitutes part of a prospectus covering securities that
have been registered under the Securities Act of 1933.

 

3M COMPANY

3M 2008 LONG-TERM INCENTIVE PLAN

 

RESTRICTED STOCK UNIT AGREEMENT

FOR U.S. EMPLOYEES

 

[PARTICIPANT NAME]

 

1.  Grant of Restricted Stock Units.  This Agreement confirms that on [GRANT
DATE] (the “Grant Date”), 3M Company (the “Company”) granted you Restricted
Stock Units (the “Restricted Stock Units”) with respect to [NUMBER OF SHARES
GRANTED] shares of Common Stock of the Company, subject to the terms and
conditions of this Agreement and the 2008 Long-Term Incentive Plan (the “2008
Plan”).

 

2.  Definitions.  Capitalized terms used and not defined herein shall have the
same meaning as in the 2008 Plan.

 

3.  Vesting of Restricted Stock Units.  Your Restricted Stock Units will vest
over three years, as long as you remain continuously employed by the Company or
an Affiliate from the Grant Date until each vesting date or if you Retire before
any such date; provided that such Restricted Stock Units will vest immediately
in the event of your death or “disability” within the meaning of section
409A(a)(2)(C) of the Code (upon your demonstration to the satisfaction of the
Committee that you are so “disabled”) before such date.  Assuming you have met
the conditions for vesting described above, this means that the first one-third
of your Restricted Stock Units will vest on the first anniversary of the Grant
Date, the second one-third of your Restricted Stock Units will vest on the
second anniversary of the Grant Date, and the remaining one-third of your
Restricted Stock Units will vest on the third anniversary of the Grant Date. 
Once the Restricted Stock Units have vested, the Company will issue in your name
and promptly deliver to you the number of shares of Common Stock equal to the
number of your vested Restricted Stock Units (less any amounts required to be
withheld for tax purposes).  Until your Restricted Stock Units have vested and
resulted in the issuance to you of actual shares of 3M Common Stock, they may
not be sold, transferred, assigned, pledged or otherwise encumbered or disposed
of.

 

4.  Dividend Equivalents.  During the Restricted Period of these Restricted
Stock Units, the Company will credit to an account on your behalf Dividend
Equivalents equal to the amount of dividends that would have been paid on these
Restricted Stock Units had you actually owned the same number of shares of
Common Stock of the Company.  On each vesting date of these Restricted Stock
Units, the Company will pay you in cash the amount of the accumulated Dividend
Equivalents attributable to the number of Restricted Stock Units that vest on
such date; provided, however, that in the event any or all of these Restricted
Stock Units are forfeited prior to such date then the accumulated Dividend
Equivalents attributable to such forfeited Restricted Stock Units will be
forfeited as well.

 

5.  Responsibility for Taxes.  As a condition of the vesting of these Restricted
Stock Units (as well as the Dividend Equivalents attributable to such Restricted
Stock Units), you agree to assist the Company and/or your employer in satisfying
all withholding and payment on account obligations resulting from such vesting. 
In this regard, you authorize the Company and/or your employer to withhold all
applicable income, payroll or other taxes legally payable by you from your wages
or other cash compensation paid to you by the Company and/or your employer or

 

This document constitutes part of a prospectus covering securities that
have been registered under the Securities Act of 1933.

 

from proceeds of the sale of shares of Common Stock.  Alternatively, the Company
may (1) sell or arrange for the sale of shares of Common Stock that you acquire
to meet the withholding obligation for these taxes, and/or (2) withhold in
shares of Common Stock, provided that the Company only withholds the amount of
shares of Common Stock necessary to satisfy the minimum withholding amount.  If
the Company or your employer satisfies the obligation for these taxes due in
connection with Restricted Stock Units by withholding a number of shares of
Common Stock as described herein, you will be deemed to have been issued the
full number of shares of Common

 

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Stock subject to these Restricted Stock Units, notwithstanding that a number of
the shares of Common Stock are held back solely for the purpose of paying the
taxes due as a result of the vesting of the Restricted Stock Units.

 

6.  Nature of Grant.  In accepting the grant of these Restricted Stock Units,
you acknowledge that:

 

(a)           the 2008 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, unless otherwise provided in the 2008 Plan;

 

(b)           the grant of the Restricted Stock Units is voluntary and
occasional and does not create any contractual or other right to receive future
grants of restricted stock units, or benefits in lieu of restricted stock units,
even if restricted stock units have been granted repeatedly in the past;

 

(c)           all decisions with respect to future restricted stock unit grants,
if any, will be at the sole discretion of the Compensation Committee of the 3M
Board of Directors;

 

(d)           your participation in the 2008 Plan shall not create a right to
further employment with your employer and shall not interfere with the ability
of your employer to terminate your employment relationship at any time with or
without cause;

 

(e)           the Restricted Stock Units are not part of your regular or
expected compensation for any purpose, including, but not limited to,
calculating any severance payments, bonuses, life insurance, disability, pension
or retirement benefits or similar payments;

 

(f)            the Company is not providing any tax, legal or financial advice,
nor is the Company making any recommendations regarding your participation in
the 2008 Plan, or your acquisition or sale of the underlying shares of Common
Stock; and

 

(g)           you are hereby advised to consult with your own personal tax,
legal and financial advisors regarding your participation in the 2008 Plan
before taking any action related to the 2008 Plan.

 

7.  Governing Law.  These Restricted Stock Units and the provisions of this
Agreement are governed by, and subject to, the laws of the State of Delaware, as
provided in the 2008 Plan.

 

For purposes of litigating any dispute that arises concerning the grant of these
Restricted Stock Units or this Agreement, you and the Company agree and consent
to the jurisdiction of the State of Minnesota, and agree that such litigation
shall be conducted 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.

 

8.  Entire Agreement.  The 2008 Plan and this Agreement constitute the entire
agreement of the parties and supersede all prior undertakings and agreements
with respect to the subject matter contained herein.

 

By accepting the grant of these Restricted Stock Units, you agree to all of the
terms and conditions described above and in the 2008 Plan.

 

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