Exhibit 10.6 to 3M Company Form 10-K (12-31-03)









EXHIBIT 10.6  



(Including Amendments through February 9, 2004) 



3M 

DEFERRED COMPENSATION PLAN



ARTICLE I

Purpose 



The purpose of this Plan is to
attract talented, competent and resourceful managers to 3M, and to provide a strong
incentive for such management employees to remain with 3M by providing those management
employees an opportunity to defer the receipt of a portion of their compensation, with the
belief that such opportunity will permit those employees to increase their long-term
financial security. 



ARTICLE II

Definitions 



For the purposes of this Plan, the
following words and phrases shall have the meanings indicated, unless the context clearly
indicates otherwise: 



	2.1  	  	BENEFICIARY.
“Beneficiary” means the person, persons or entity designated by the
Participant, or as provided in Article VIII, to receive any death benefits payable under
the Plan.  






	2.2  	  	CLASS
YEAR.  “Class Year” means the calendar year in respect of which Compensation is deferred
under this Plan. 






	2.3  	  	COMMITTEE.
 “Committee” means the Compensation Committee of the Board of Directors of 3M. 






	2.4  	  	 COMPENSATION.
“Compensation” means the base salary, profit sharing, Performance Unit Plan
benefits or other incentive payments that the Committee may include from time to time,
earned by a Participant during a Class Year before reduction for compensation deferred
pursuant to the Plan. However, “Compensation” shall exclude awards (except
performance awards), foreign service premiums and allowances, stock option benefits,
employer contributions to employee benefit plans, reimbursements or payments in lieu
thereof and like payments.  
















	2.5  	  	DEFERRAL
ELECTION AGREEMENT. “Deferral Election Agreement" means the agreement filed with
the Committee by a Participant prior to the beginning of any Class Year for
which the Participant's Compensation is to be deferred pursuant to the Plan.







	2.6  	  	DEFERRED INCOME
ACCOUNT. “Deferred Income Account" means the accounts maintained on the books of
the Employer for each Participant pursuant to Article V. A separate Deferred
Income Account shall be maintained for each Participant for each Class Year.







	2.7  	  	EMPLOYER.
“Employer” means 3M Company (“3M”), its affiliates and subsidiaries and any
successor to the business thereof. 






	2.8  	  	GROWTH
FACTOR. “Growth Factor” is the rate at which interest will be credited
to Participants’ Deferred Income Accounts in accordance with the provisions
of Article VI. Unless and until changed by the Committee, the Growth Factor
applied during each calendar year will be the average Salomon Brothers, Inc. 10
Year AAA Industrial Corporate Bond Rating for New Issues for the four-week
period ending with the last week ending in October of the previous year.







	2.9  	  	PARTICIPANT.
“Participant” means any management employee employed by an Employer
and who is required to file a U.S. tax return and who is within the class of
eligible employees designated by the Committee and who elects to participate in
this Plan by filing a Deferral Election Agreement in accordance with the
requirements of paragraph 4.2. 






	2.10  	  	PLAN.
 “Plan” means the 3M Deferred Compensation Plan. 






	2.11  	  	UNFORESEEABLE
FINANCIAL EMERGENCY. “Unforeseeable Financial Emergency” means an
unexpected extreme financial emergency beyond the control of the Participant
(e.g., severe illness of a dependent, impending bankruptcy), which results in
the Participant's extreme need for cash. 






	2.12  	  	VALUATION DATE.
“Valuation Date” means the dates on which the value of a
Participant’s Deferred Income Account for each Class Year is determined as
provided in Article VI hereof. Unless and until changed by the Committee,
the Valuation Date shall be the last day of each calendar year. 






ARTICLE III

Effective Date 



The provisions of this Plan shall
take effect on September 1, 1985. Calendar year 1986 shall be the first Class Year during
which the Employer will defer the payment of any Compensation that may be earned while a
Participant’s Deferral Election Agreement is in effect hereunder. This Plan shall
continue in operation and effect until 3M terminates it in accordance with the
provisions of paragraph 10.2.  











ARTICLE IV

Participation 



	4.1  	  	ELIGIBILITY.
Each management employee of the Employer who is within the class of employees designated
for such purpose by the Committee shall be eligible to participate in the Plan.  






	4.2  	  	ELECTION
TO PARTICIPATE. Each employee who meets the eligibility requirements of paragraph 4.1 may
elect to participate in the Plan by filing a Deferral Election Agreement with the
Committee not later than thirty (30) days prior to the beginning of the applicable Class
Year. The election to participate shall be effective upon receipt by the Committee of a
Deferral Election Agreement that is properly completed and executed in accordance with
the terms of the Plan. The Committee may, in its sole discretion, waive the thirty-day
filing requirement, provided that the Deferral Election Agreement is filed with the
Committee before the commencement of the applicable Class Year.  






	4.3  	  	PERIOD
OF PARTICIPATION. Each employee’s election to participate made in accordance with
the provisions of paragraph 4.2 will remain in effect for the one-year period which
begins on the first day of the respective Class Year and ends on the last day of such
Class Year. Each employee who has elected to participate in this Plan and on whose behalf
Compensation has been deferred and credited to a Deferred Income Account shall continue
to be a Participant until all amounts credited to all of the Participant’s Deferred
Income Accounts have been distributed, or until the Participant’s death, if earlier.  






	4.4  	  	WAIVER
OF DEFERRAL. The Committee may, in its sole discretion, grant a waiver or
suspension of a Participant’s Deferral Election Agreement, for such time as
the Committee may deem necessary, upon a finding that the Participant has
suffered an Unforeseeable Financial Emergency.






ARTICLE V

Deferred Compensation 



	5.1 	  	 AMOUNTS
DEFERRED. For any Class Year, a Participant may defer any whole percentage (but
no more than 50% of base salary) of all or any portion of the Compensation
earned by such Participant during the Class Year; provided, however, that the
maximum amount of any Compensation payment that may be deferred by a Participant
shall be limited to the amount otherwise payable to such Participant after the
deduction of the appropriate withholding taxes. 














	  	 The minimum
amount that may be deferred by any Participant shall be $1,000 per Class Year.
If the amount deferred does not reach the $1,000 minimum, the Deferral Election
Agreement for that Class Year will be voided and any amounts deferred paid to
the Participant. 






	5.2 	  	
AMOUNTS CREDITED TO ACCOUNT. For each Participant and each Class Year that the
Participant elects to defer Compensation hereunder the Employer shall establish on its
books a Deferred Income Account, to which the amounts deferred in accordance with
paragraph 5.1 shall be credited at such times as are in accordance with the standard
payroll procedures of the Participant’s Employer. The amount credited to a
Participant’s Deferred Income Account shall equal the amount deferred, except that
the amount credited may be reduced, at the discretion of the Committee, to the extent that
the Employer is required to withhold any taxes or other amounts from the
Participant’s deferred compensation pursuant to any federal, state or local law. 






	5.3  	  	VESTING
OF DEFERRED INCOME ACCOUNT.  A Participant shall always be 100% vested in the value of
his or her Deferred Income Account(s). 








ARTICLE VI

Deferred Income Accounts 



	6.1 	  	 PERIODIC
ADJUSTMENTS. The Deferred Income Accounts of each Participant shall be revalued
as of each Valuation Date. As of each Valuation Date, the value of each Deferred
Income Account shall consist of the balance of such Deferred Income Account as
of the immediately preceding Valuation Date, plus (i) amounts deferred and
credited thereto since the immediately preceding Valuation Date pursuant to
paragraph 5.2, and (ii) the interest credited thereto since the preceding
Valuation Date, minus the amount of all distributions, if any, made from such
Deferred Income Account since the preceding Valuation Date. Interest shall be
credited to all Deferred Income Accounts immediately prior to each Valuation
Date, and also to each Deferred Income Account from which distributions are made
immediately prior to each distribution. The amount of interest credited
hereunder shall be calculated by applying the Growth Factor for the year in
which the interest will be credited to the average daily balance of the
respective Deferred Income Account since the immediately preceding Valuation
Date. 






	6.2  	  	STATEMENT
OF ACCOUNTS.  As soon as  administratively  feasible following the end of each Class
Year, the Committee shall submit to each Participant a statement of such Participant's
 Deferred Income Account(s) in the Plan. 














ARTICLE VII

Distribution of Accounts 



	7.1 	  	 DISTRIBUTION
DATE AND METHOD. As part of the Deferral Election Agreement for each Class Year,
the Participant shall specify the date (hereinafter referred to as the
“Distribution Date”) upon which the Employer will commence payment of
the amounts credited to the respective Deferred Income Account and the method of
paying such amounts. A Participant must select one of the following Distribution
Dates: 






	  	(a)  	  	The second
business day of any calendar year following the Class Year during which deferred
Compensation is credited to such Deferred Income Account. 






	  	(b)  	  	The second
business day of any one of the first through the tenth calendar years following
the Participant’s retirement from service with the Employer. 






	  	 A participant
must also select one of the following methods of payment in each Deferral
Election Agreement: 






	  	(c)  	  	A
single lump sum distribution.  






	  	(d)  	  	Ten or fewer
annual installments (the amount of such installment payments shall be computed
by multiplying the balance in the Deferred Income Account on each date of
payment by a fraction, the numerator of which is one and the denominator of
which equals the remaining number of scheduled annual installment payments).







	  	 No Deferral
Election Agreement shall require the Plan to make any payment more than 10 years
after the second business day of the calendar year following the
Participant’s retirement from service with the Employer. Each payment from
a Participant’s Deferred Income Account shall be made in cash, and shall be
charged against the balance in such Deferred Income Account. 






	7.2 	  	DISTRIBUTION
WHILE STILL AN EMPLOYEE. If a Participant is still employed by the Employer at
the Distribution Date for any Deferred Income Account, the entire balance of
such Deferred Income Account at the Distribution Date (plus any interest
credited to such Account thereafter) shall be paid to the Participant commencing
on such date and in accordance with the method of payment chosen by the
Participant. 






	7.3 	  	DISTRIBUTION
FOLLOWING TERMINATION OF EMPLOYMENT. If a Participant’s employment with the
Employer is terminated for any reason other than death or retirement, the value
of such Participant’s Deferred Income Accounts shall be determined no later
than the Valuation Date immediately following the date of termination and shall
be paid to the Participant in a lump sum as soon as administratively feasible.














	7.4 	  	DISTRIBUTION
FOLLOWING RETIREMENT. If a Participant retires from service with the Employer
prior to the Distribution Date for any Deferred Income Account, the entire
balance of such Account at the Distribution Date (plus any interest credited to
such Account thereafter) shall be paid to the Participant (or Beneficiary)
commencing on such Distribution Date and in accordance with the method of
payment chosen by the Participant; provided, however, that in no event shall the
portion of any Participant’s Deferred Income Account(s) attributable to
deferred Performance Unit Plan benefits be paid before the corresponding Payment
Date(s) for such benefits under the provisions of the 3M Performance Unit Plan.







	7.5 	  	DISTRIBUTION
FOLLOWING DEATH. Upon the death of a Participant prior to the Distribution Date
for any Deferred Income Account, such Account shall be paid to the
Participant’s Beneficiary in accordance with paragraph 7.2 as if the
Participant had selected a Distribution Date of the day before the
Participant’s death. Upon the death of a Participant after the Distribution
Date for any Deferred Income Account, the remaining balance (if any) of such
Deferred Income Account shall be paid to the Participant’s Beneficiary in
accordance with the method of payment chosen by the Participant. 






	7.6 	  	UNFORESEEABLE
FINANCIAL EMERGENCY DISTRIBUTION. Upon finding that a Participant has suffered
an Unforeseeable Financial Emergency, the Committee may, in its sole discretion,
permit the Participant to withdraw an amount from his or her Deferred Income
Account(s) sufficient to alleviate the emergency. 






	7.7 	  	
WITHHOLDING; PAYROLL TAXES. To the extent required by the laws in effect at the
time payments are made, the Employer shall withhold from payments made hereunder
any taxes required to be withheld for federal, state or local government
purposes. 






ARTICLE VIII

Designation of Beneficiaries 



	8.1 	  	BENEFICIARY
DESIGNATION. Each Participant shall have the right at any time to designate any
person, persons, or entity, as Beneficiary or Beneficiaries to whom payment of
the Participant’s remaining Deferred Income Accounts shall be made in the
event of the Participant’s death. Any designation filed under the Plan may
be revoked or changed by written instrument so signed and filed prior to the
Participant’s death. 






	8.2 	  	BENEFICIARY
PREDECEASES PARTICIPANT. If a Participant designates more than one person to
receive such Participant’s death benefit and any Beneficiary shall
predecease the Participant, the Committee shall distribute the deceased
Beneficiary’s share to the surviving designee or designees proportionately,
as the portion designated by the Participant for each bears to the total portion
designated for all survivors. 












	8.3  	  	ABSENCE
OF EFFECTIVE DESIGNATION. If a Participant files no designation or revokes a
designation previously filed without filing a new designation, or if all persons
designated shall predecease the Participant, the Committee shall distribute the
balance of the Participant’s respective Deferred Income Account(s) in the
manner determined in accordance with the Participant’s designation in
effect with respect to the Participant’s non-optional life insurance
benefits provided for 3M salaried and union-free hourly employees or, in the
event there is no effective designation with respect to such non-optional life
insurance benefits or all persons designated thereunder predecease the
Participant, in accordance with the provisions of the non-optional life
insurance benefits plan which apply to such contingencies. 






	8.4  	  	DEATH OF
BENEFICIARY. If a Beneficiary to whom payments hereunder are to be made pursuant
to the foregoing provisions of this Article VIII survives the Participant but
dies prior to complete distribution to the Beneficiary of the Beneficiary’s
share, 






	  	(a)  	  	unless the
Participant has otherwise specified in his or her designation, the Committee
shall distribute the undistributed portion of such Beneficiary’s share to
such person or persons, including such Beneficiary’s estate, as such
Beneficiary shall have designated in a writing signed by such Beneficiary and
filed with the Committee prior to such Beneficiary’s death (which
designation shall be subject to change or revocation by such Beneficiary at any
time); or 






	  	(b)  	  	if the
Participant’s designation specifies that such Beneficiary does not have the
power to designate a successor Beneficiary or if such Beneficiary is granted
such power but fails to designate a successor Beneficiary prior to such
Beneficiary’s death, the Committee shall distribute the undistributed
portion of such Beneficiary’s share to such Beneficiary’s estate.







	8.5 	  	BENEFICIARY
DISCLAIMER. Notwithstanding the foregoing provisions of this Article VIII, in
the event a Beneficiary, to whom payments hereunder would otherwise be made,
disclaims all or any portion of that Beneficiary’s interest in such
payments, such disclaimed portion of such Beneficiary’s interest in such
payments shall pass to the person or persons specified by the Participant to
take such disclaimed interest. In the event the Participant did not specify a
person or persons to take disclaimed interests, such disclaimed portion of such
Beneficiary’s interest in such payments shall pass to the person or persons
who would be entitled thereto pursuant to the Participant’s designation or
the designation made with respect to the non-optional life insurance benefits
plan referenced above, whichever is applicable pursuant to the foregoing
provisions of this Article VIII, if such Beneficiary had died immediately
preceding the death of the Participant. 












ARTICLE IX

Administration 



This Plan shall be
administered under the supervision and direction of the Committee. The Committee
shall have full power to formulate additional details and regulations for
carrying out this Plan. The Committee shall also be empowered to make any and
all other determinations not herein specifically authorized which may be
necessary or desirable for the effective administration of the Plan. Any
decision or interpretation of any provision of this Plan adopted by the
Committee shall be final and conclusive. 



ARTICLE X

Amendment and Termination of Plan 



	10.1 	  	 RIGHT TO AMEND.
3M or the Committee may at any time amend or modify the Plan in whole or in
part; provided, however, that no amendment or modification shall adversely
affect the rights of any Participant or Beneficiary acquired under the terms of
the Plan as in effect prior to such action. The consent of any Participant,
Beneficiary, Employer or other person shall not be a requisite to such amendment
or modification of the Plan. 






	10.2 	  	 TERMINATION.
While it expects to continue this Plan indefinitely, 3M reserves the right to
terminate the Plan at any time and for any reason. Upon the termination of the
Plan, all elections to participate in the Plan and defer Compensation hereunder
will be revoked, and the amounts already credited to existing Deferred Income
Accounts will be distributed to the Participants in accordance with the
provisions of Article VII. 






ARTICLE XI

General Provisions 



	11.1 	  	 UNSECURED
GENERAL CREDITOR. No Employer shall have any obligation to set aside funds, or
otherwise make any special provision for its liability, with respect to amounts
that are credited to any Deferred Income Accounts, prior to the time that it is
required to distribute such amounts pursuant to Articles V and VII.
Employer’s obligation under the Plan shall be merely that of an unfunded
and unsecured promise to pay money in the future. Each Participant (or
Beneficiary) shall be an unsecured general creditor of the Participant’s
Employer with respect to amounts credited to the Participant’s Deferred
Income Accounts. 






	11.2 	  	NONASSIGNABILITY.
Neither a Participant nor any other person shall have any right to commute,
sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey in advance of actual receipt the amounts, if
any, payable hereunder. All payments and the rights to all payments are
expressly declared to be nonassignable and nontransferable. No part of the
amounts payable hereunder shall, prior to actual payment, be subject to seizure
or sequestration for the payment of any debts, judgments or decrees, or
transferred by operation of law in the event of a Participant’s or any
Beneficiary’s bankruptcy or insolvency. 












	11.3 	  	 NOT A CONTRACT
OF EMPLOYMENT. The terms and conditions of this Plan shall not be deemed to
constitute a contract of employment between the Employer and any Participant,
and the Participants (or their Beneficiaries) shall have no rights against the
Employer except as may otherwise be specifically provided herein. Moreover,
nothing in this Plan shall be deemed to give any Participant the right to be
retained in the service of the Employer or to interfere with the right of the
Employer to discipline or discharge such Participant at any time for any reason
whatsoever. 






	11.4  	  	TERMS. Wherever
any words are used herein in the singular or in the plural, they shall be
construed as though they were used in the plural or in the singular, as the case
may be, in all cases where they would so apply. 






	11.5  	  	CAPTIONS. The
captions of the articles and paragraphs of this Plan are for convenience only
and shall not control or affect the meaning or construction of any of its
provisions. 






	11.6  	  	GOVERNING LAW.
The provisions of this Plan shall be construed and interpreted according to the
laws of the State of Minnesota. 






	11.7 	  	 VALIDITY. In
case any provision of this Plan shall be ruled or declared invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal or
invalid provision had never been inserted herein. 






	11.8 	  	 NOTICE. Any
notice or filing required or permitted to be given to the Committee under this
Plan shall be sufficient if in writing and hand delivered, or sent by registered
or certified mail, to the Committee at the principal office of 3M Company. Such
notice shall be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark on the receipt for registration or
certification. 






	11.9 	  	 SUCCESSORS. The
provisions of this Plan shall bind and inure to the benefit of the Employer and
its successors and assigns. The term successors as used herein shall include any
corporation or other business entity which shall, whether by merger,
consolidation, purchase or otherwise, acquire all or substantially all of the
business and assets of the Employer, and successors of any such corporation or
other business entity. 






	11.10 	  	 INCOMPETENT. In
the event that it shall be found upon evidence satisfactory to the Committee
that any Participant or Beneficiary to whom a benefit is payable under this Plan
is unable to care for his or her affairs because of illness or accident, any
payment due (unless prior claim therefore shall have been made by a duly
authorized guardian or other legal representative) may be paid, upon appropriate
indemnification of the Committee, to the spouse or other person deemed by the
Committee to have accepted responsibility for such Participant or Beneficiary.
Any such payment made pursuant to this paragraph 11.10 shall be in complete
discharge of any liability therefore under the Plan. 












ARTICLE XII

Change in Control 



	12.1  	  	DEFINITIONS. For
purposes of this Article XII, the following words and phrases shall have the
meanings indicated below, unless the context clearly indicates otherwise:







	  	(a)  	  	“Person”
shall have the meaning associated with that term as it is used in Sections 13(d)
and 14(d) of the Act. 






	  	(b)  	  	“Affiliates
and Associates” shall have the meanings assigned to such terms in Rule 12b-2
promulgated under Section 12 of the Act. 






	  	(c)  	  	“Act”
means the Securities Exchange Act of 1934. 






	  	(d)  	  	“Continuing
Directors” shall have the meaning assigned to such term in Article
Thirteenth of the Company’s Restated Certificate of Incorporation.







	  	(e)  	  	“Code”
means the Internal Revenue Code of 1986, as amended. 






	  	(f)  	  	“Company”
means 3M Company, a Delaware corporation.







	12.2 	  	 TERMINATION
UPON CHANGE IN CONTROL. This Plan shall terminate and the Company shall
immediately distribute in cash to the respective Participants the amounts
credited to all existing Deferred Income Accounts upon the occurrence of a
Change in Control of the Company. 






	12.3  	  	DEFINITION
OF CHANGE IN CONTROL.  For purposes of this Article XII, a Change in Control of the
Company shall be deemed to have occurred if: 






	  	(a)  	  	any Person
(together with its Affiliates and Associates), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company, is
or becomes the “beneficial owner” (as that term is defined in
Rule 13d-3 promulgated under the Act), directly or indirectly, of
securities of the Company representing thirty percent (30%) or more of the
combined voting power of the Company’s then outstanding securities, unless
a majority of the Continuing Directors of the Company’s Board of Directors
prior to that time have determined in their sole discretion that, for purposes
of this Plan, a Change in Control of the Company has not occurred; or







	  	(b) 	  	the Continuing
Directors of the Company’s Board of Directors shall at any time fail to
constitute a majority of the members of such Board of Directors. 












	12.4 	  	 GROSS UP FOR
EXCISE TAX. In the event that the payments made pursuant to this
Article XII 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 such that the net amount retained by such Participant, after
allowing for the amount of such excise tax and any additional federal, state and
local income taxes paid on the additional amount, shall be equal to the value of
the Deferred Income Accounts distributed to such Participant pursuant to this
Article XII.







	12.5 	  	 REIMBURSEMENT
OF FEES AND EXPENSES. 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 rights under this Article XII 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 Article XII, unless a lawsuit commenced by the Participant for such
purposes is dismissed by the court as being spurious or frivolous. 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 Article XII.