Exhibit 10.7 to 3M Company Form 10-K (12-31-03)








EXHIBIT 10.7 



3M COMPANY 



Executive Profit
Sharing Plan 



(Including amendments
through February 11, 2002) 



     	1. 	
          Key Definitions: 



          



	  	
“Economic
Profit.” Economic Profit for the purpose of this Plan is defined as the
difference between the Quarterly Net Operating Income and the Quarterly Capital Charge,
as defined below.  






	  	
“Quarterly
Net Operating Income.” Net Operating Income for the purpose of this Plan is
defined as the consolidated operating income of the Company and its domestic and foreign
subsidiaries, reduced by a charge for taxes based on the Company’s effective tax
rate.  






	  	
“Quarterly
Capital Charge.” The Quarterly Capital Charge will be one-fourth of the Company’s
Cost of Capital multiplied by the amount of Operating Capital as of the close of such
calendar quarter.  






	  	
“Cost
of Capital.” The Cost of Capital is a weighted average of the Company’s
cost of funding, including both equity and debt financing.  






	  	
“Operating
Capital.” Operating Capital for the purpose of this Plan is defined as the total
assets of the Company, reduced by the amount of any other securities and the adjusted
current liabilities (total current liabilities minus short-term debt), and adjusted for
any deferred taxes.  






	  	
“Quarterly
Profit Sharing Earnings Per Share.” The quarterly Economic Profit divided by the
fixed number One Hundred Million (100,000,000) will determine the Quarterly Profit
Sharing Earnings Per Share.  






	  	
“Quarterly
Gross Profit Sharing Amount.” The number of shares of profit sharing assigned to
an individual, multiplied by the Quarterly Profit Sharing Earnings Per Share, will
determine that individual’s Quarterly Gross Profit Sharing Amount.  






	2. 	Participation. Such
executive officers of the Company as determined by the Compensation Committee of
the Board of Directors (the “Committee”) will be eligible to receive
payments under the Plan. The Committee shall determine from time to time what
portion of the shares of profit sharing assigned to an individual will be based
on the Economic Profit of the Company as a whole and what portion will be based
on the Economic Profit of a relevant business unit thereof. To the extent that
shares of profit sharing are based on the Economic Profit of a relevant business
unit of the Company, the terms “Economic Profit”, “Quarterly Net
Operating Income”, “Quarterly Capital Charge”, “Cost of
Capital” and “Operating Capital” shall be appropriately modified
to reflect the operations and performance of such business unit.








 








     	3. 	
          Year-To-Date Calculation. At the close of each quarter following
          the first quarter, the Quarterly Gross Profit Sharing Amount and the limits of
          full profit sharing participation will be accumulated for the year-to-date for
          the purpose of calculated individual profit sharing payments on a year-to-date
          basis. The Profit Sharing Payment for the current quarter will be the difference
          between the year-to-date amount and the sum of the Profit Sharing Payments to
          the individual in the prior quarters of the calendar year. 



          



     	4. 	
          Date of Payment. Profit Sharing Payments will be made within sixty
          days after the close of each calendar quarter. 



          



     	5. 	
          Manner of Payment. Profit Sharing Payments may be made in cash,
          common stock, or a combination of cash and stock as determined by the Committee. 



          



     	6. 	
          Maximum Payments. The total paid under this Plan for the
          Company’s five most highly compensated executive officers will never exceed
          one-half percent (0.5%) of the consolidated net income of the Company for any
          respective period, and no individual participant will ever receive more than
          one-third (33 1/3%) of this total Plan limit. 



          



     	7. 	
          Administration. The Plan will be administered by the Committee,
          none of whom shall be eligible to participate. The Committee is authorized to
          adopt rules and policies concerning the administration and interpretation of the
          Plan, but the Committee will have no discretion with regard to the basic
          criteria for the determination of Quarterly Gross Profit Sharing Amounts and may
          not, in any event, alter the units or the Quarterly Profit Sharing Earnings Per
          Share formula after the commencement of a quarterly performance period. If
          required for compliance with legal or tax guidelines with regard to its role in
          administering the Plan, the Committee may act through a subcommittee comprised
          of at least two of its members, none of whom shall be eligible to participate in
          the Plan. 



          



     	8. 	
          Plan Amendment. The Board of Directors may at any time terminate
          or amend the Plan, except that no amendment shall be made, without prior
          approval by the Company’s stockholders, which would (i) alter the method
          for determination of the Quarterly Profit Sharing Earnings Per Share, or (ii)
          materially alter the maximum participation limits for individuals. 



          



     	9. 	
          Plan Duration. The Plan is intended to be indefinite in duration,
          but may be amended or terminated at any time by the Board of Directors as
          provided herein. The Plan shall continue until so terminated.