Exhibit 10.1


 


AMENDMENT
TO EMPLOYMENT AGREEMENT


 


This Amendment, effective as
of November 11, 2008, is made by and between Patrick D. Campbell (“Executive”)
and 3M Company (“3M” or the “Company”) and amends that certain employment
agreement, dated January 21, 2002, between Executive and 3M (the “Employment
Agreement”).  Except as so amended, the
Employment Agreement otherwise remains in full force and effect.


 


WHEREAS, the parties
previously entered into the Employment Agreement to provide for Executive’s services
as Senior Vice President Chief Financial Officer of the Company;


 


WHEREAS, Executive and the
Company desire to amend Executive’s Employment Agreement on the terms set forth
herein to:  (i) comply with Section 409A
of the Internal Revenue Code of 1986 (the “Code”) (added by the American Jobs
Creation Act of 2004), and (ii) to make other appropriate changes in the
terms and conditions of such Agreement;


 


NOW, THEREFORE, in
consideration of the representations, warranties, covenants and agreements contained
in this Agreement and other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:


 


1.                                       RETIREE
MEDICAL BENEFITS.  Section 8(a) of
the Employment Agreement is hereby amended to read as follows:


 


(a)  Retiree Medical Benefits.  The Company shall establish an opening
account balance for Executive under its retiree medical program equal to 36,000
retiree medical credits.  Such credits
will become available to you upon your retirement (specifically, your
Separation from Service with the Company (i) after attaining age 55 with
at least five years of employment service or (ii) after attaining age 65);
provided, however, that if you are a Specified Employee at the time of your
Separation from Service, such credits will become available to you on the first
day of the seventh month following your Separation from Service.  The entire balance of the 36,000 credits will
be imputed as income to you when such credits become available for use,
regardless of when or whether you actually use the credits.


 


In
recognition of such opening account balance, Executive will be eligible to earn
additional retiree medical credits under such program only for up to an
additional ten years of employment with the Company.


 


2.                                       GROSS UP
FOR EXCISE TAXES.  Section 8(c) of
the Employment Agreement is hereby amended by the addition of the following
sentence at the end thereof:


 


The
payment of this additional amount shall be made at the same time that payment
of the corresponding excise taxes or similar taxes becomes due.


 


3.                                       FORMULA FOR SUPPLEMENTAL RETIREMENT BENEFIT.  Paragraph (i) of Section 9(a) of
the Employment Agreement is hereby amended to read as follows:


 


(i)                                     One-twelfth of 45% of his highest average (4 years) annual earnings (base
salary plus annual incentive or profit sharing), multiplied by the following 


 


 

















 


                                                fraction, where the numerator is the number of years Executive has been
employed by the Company (up to 10) and the denominator is 10,


 


4.                                       PAYMENT OF SUPPLEMENTAL RETIREMENT BENEFIT.  Section 9(c) of the
Employment Agreement is hereby amended to read as follows:


 


(c)                                  Payment.  Payment of the Supplemental Retirement
Benefit shall be made in the form of a single lump sum cash amount equal to the
Actuarially Equivalent present value of the annuity described in Section 9(a);
provided, however, that the amount of such monthly annuity payments shall
be Actuarially Adjusted in the event payment begins before Executive has
attained age 60.  Payment of this lump
sum shall occur within 60 days following Executive’s Separation from Service
with the Company, subject to the provisions of Section 11(i) below.  In the event Executive will not receive any
benefits under the Company’s pension plans (due to his death or termination of
employment prior to vesting in such benefits), the Company shall still pay the
Actuarial Equivalent of such Supplemental Retirement Benefit in a single lump
payment within 60 days following Executive’s Separation from Service, subject
to the provisions of Section 11(i) below.  For purposes of this Supplemental Retirement
Benefit, the terms “Actuarially Equivalent” or “Actuarially Adjusted” shall
mean making one benefit of equivalent value to another benefit using the
interest rate and mortality assumptions then in effect under the Company’s
nonqualified pension plans.  Payments of
the Supplemental Retirement Benefit will be made from the Company’s general
assets, and not from any trust funding the Company’s pension plans.


 


5.                                       PAYMENT OF TERMINATION BENEFITS.  Section 10(a) of the Employment
Agreement is hereby amended to read as follows:


 


(a)                                  Termination without Cause or for Good Reason.  The Company may terminate
Executive’s employment without Cause or Executive may terminate his employment
for Good Reason.  In such event, the
Company shall pay to Executive no later than the fifteenth day of the calendar
month following Executive’s Separation from Service, subject to the provisions
of Section 11(i) below, a lump sum cash amount equal to (a) two
times his then current annual Base Salary and annual planned profit sharing or
annual incentive if such termination occurs during the first five years
following the Commencement Date, or (b) one times his then current annual
Base Salary and annual planned profit sharing or annual incentive if such
termination occurs more than five but no more than ten years following the
Commencement Date.  Executive’s right to
the payment described in the preceding sentence will be contingent upon his
execution of a general release of all claims against the Company, in a form
mutually acceptable to Executive and the Company.


 


The lump sum cash payment described in the foregoing
paragraph is intended to qualify as an involuntary separation arrangement that
is exempt from section 409A of the Code under the “short-term deferral”
exception in section 1.409A-1(b)(4) of the Treasury regulations.  If such payment does not qualify as an
involuntary separation payment, then such payment shall (to the extent 


 


 

















 


not otherwise exempt under Treasury regulations) be
delayed until 6 months after your Separation from Service if you are a
Specified Employee at the time of your Separation from Service.  In the event that a six month delay of the
payment is required, on the first day of the seventh month following your
Separation from Service, you shall receive a lump sum payment of this cash
amount together with interest, compounded annually, equal to the prime rate (as
published in The Wall Street Journal) in effect as of the Separation from Service
for the period between Executive’s Separation from Service and the payment
date.


 


6.                                       OTHER TEMINATION EVENTS.  Section 10(b) of the Employment
Agreement is hereby amended to read as follows:


 


(b)                                 Termination for Cause, upon Disability or other than for Good Reason.  During the Employment Period and
thereafter, the Company may terminate Executive’s employment for Cause or in
the event of Executive’s Disability, and Executive may terminate his employment
for other than Good Reason.  In such
event, Executive shall only be entitled to receive the Base Salary, profit
sharing or annual incentive and other benefits he has accrued through the date
of termination and Executive shall not be entitled to receive any severance
payment.


 


7.                                       TERMINATION UPON DEATH.  Section 10(c) of the Employment
Agreement is hereby amended to read as follows:


 


(c)                                  Termination upon Death.  Executive’s employment will automatically
terminate in the event of his death.  In
such event, Executive shall only be entitled to receive the Base Salary, profit
sharing or annual incentive and other benefits he has accrued through the date
of termination and Executive shall not be entitled to receive any severance
payment.


 


8.                                       DEFINITION
OF GOOD REASON.  Paragraph (iii) of
Section 10(e) of the Employment Agreement is hereby amended to read
as follows:


 


(iii)                               The term “Good Reason” means
any one of the following events unless Executive otherwise agrees in writing:


 


(A)                              the Company reduces
Executive’s total annual planned compensation (Base Salary plus profit sharing
or annual incentive) by more than 15%;


 


(B)                                Executive is relocated to a
primary work site located outside of a 50-mile radius of his then current work
site; or


 


(C)                                Executive is reassigned to a
position having primary responsibilities which are significantly less than
those of his immediately prior position;


 


provided,
however, that none of the above events will constitute Good Reason if the
Company cures such event within 10 days after delivery of a written notice from
Executive specifying the Good Reason.  If
one of the above events occurs, Executive must deliver a written notice to the
Company specifying the Good Reason within 90 days following the first
occurrence of the event.


 


 

















 


9.                                       ADDITION
OF DEFINITION OF SEPARATION FROM SERVICE.  Section 10(e) of the Employment
Agreement is hereby amended by the addition of the following new paragraph
(iv):


 


(iv)                              The term “Separation from
Service” means a “separation from service” as defined in Treas. Reg. Section 1.409A-1(h)(1) or
such other regulation or guidance issued under Section 409A of the
Code.  Whether a Separation from Service
has occurred depends on whether the facts and circumstances indicate that the
Company and Executive reasonably anticipated that no further services would be
performed after a certain date or that the level of bona fide services
Executive would perform after such date (whether as an employee or independent
contractor) would permanently decrease to no more than twenty percent (20%) of
the average level of bona fide services performed (whether as an employee or an
independent contractor) over the immediately preceding thirty-six (36) month
period).


 


10.                                 ADDITION OF DEFINITION OF
SPECIFIED EMPLOYEE.  Section 10(e) of
the Employment Agreement is hereby amended by the addition of the following new
paragraph (v):


 


(v)                                 The term “Specified Employee”
means a “specified employee” as defined in Treas. Reg. Section 1.409-1(i) or
such other regulation or guidance issued under Section 409A of the Code.


 


11.                                 ADDITION OF DEFINITION OF CODE.  Section 10(e) of the Employment
Agreement is hereby amended by the addition of the following new paragraph
(vi):


 


(vi)                              The term “Code” means the Internal Revenue Code of 1986, as amended from
time to time.


 


12.                                 409A PROVISION.  Section 11 of the Employment Agreement
is hereby amended to include the following new Section 11(i) at the
end thereof:


 


(i)                                     Notwithstanding anything herein to the contrary, this Agreement is
intended to be interpreted and operated so that the payment of the compensation
and benefits set forth herein either shall either be exempt from the
requirements of Section 409A of the Code or shall comply with the
requirements of such provision.  If on
the date of Executive’s Separation from Service, Executive is a Specified
Employee, then:


 


                                                (1)                                  payment of the Supplemental Retirement Benefit under Section 9(c) shall
be delayed until the earlier of the first day of the seventh month following
Executive’s Separation from Service or the date of his death, at which time
Executive shall receive the lump sum amount together with interest, compounded
annually, equal to the prime rate (as published in The Wall Street Journal) in
effect as of the Separation from Service for the period between the Executive’s
Separation from Service and the payment date; and


 


                                                (2)                                  any other payment made under this Agreement upon Executive’s Separation
from Service that constitutes a “deferral of compensation” shall be  delayed until the earlier of the first day of
the seventh month following Executive’s Separation from Service or the date of
his death, at which time Executive shall receive a lump sum “catch up” payment
equal to the cumulative payments missed on account of the delay, together with
interest for the period of delay, compounded annually, equal to the prime rate
(as published in The Wall Street Journal) in effect as of the Separation from
Service.


 


IN WITNESS WHEREOF, this
Amendment to Employment Agreement has been signed by the parties hereto on the
date set forth below.


 


	
  3M COMPANY

  	
   

  	
  PATRICK D. CAMPBELL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Angela S. Lalor

  	
   

  	
  /s/ Patrick D. Campbell

  
	
  Date  November 12,
  2008

  	
   

  	
  Date  November 12,
  2008