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)



 

















 


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.


 

















 


(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 


 

















 


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 


 

















 


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.