Document:

Exhibit 10.2

 

AMENDMENT OF VIP PLUS —

Compliance with Section 409A
and

Closing of Plan to New
Contributions

 

                WHEREAS, 3M has adopted and maintains the 3M VIP Plus
(the “Plan”), which Plan is intended to offer eligible highly compensated
employees with the opportunity to earn additional retirement benefits by
deferring the receipt of a portion of their compensation on a tax-favored
basis;

 

                WHEREAS, the Company wishes to
amend the Plan to ensure that the Plan document complies with the requirements
of Section 409A of the Internal Revenue Code of 1986, as amended, and the
regulations issued thereunder; and

 

                WHEREAS, since the Company
intends to adopt a new 401(k) supplement plan which is designed to be a
true “excess” plan for tax purposes, to be effective January 1, 2009, the
Company also wishes to close the Plan to new contributions following the
completion of all contributions previously elected for the 2008 Plan Year;

 

                RESOLVED, that pursuant to the
authority contained in Section 10.1 of the Plan, the plan document of the
Plan shall be and it hereby is amended as follows, effective January 1,
2009:

 

                1)             Article I
is amended by adding the following new paragraph at the end thereof:

 

Effective
January 1, 2009, this Plan was amended. 
The purposes of the amendment were to (a) bring the plan document
into compliance with the requirements of section 409A of the Code, including
the regulations issued thereunder, and (b) close the Plan to new
contributions effective upon the receipt of all contributions made pursuant to
elections with respect to the 2008 Plan Year. 
From October 3, 2004 (the date section 409A was added to the Code)
through December 31, 2008, the Plan was operated in good faith compliance
with the requirements of section 409A including the special transition rules issued
by the Internal Revenue Service and the U.S. Department of Treasury in
connection with the implementation of section 409A.  For avoidance of doubt, this amendment was
intended to apply both to deferred compensation subject to section 409A of the
Code (i.e., deferred compensation credited
under the Plan which related all or in part to services performed on or after January 1,
2005), as well as deferred compensation credited under the Plan which 

 

 

relates
entirely to services performed on or before December 31, 2004 that is
eligible to be “grandfathered” from application of section 409A of the Code.

 

                2)             Section 2.15
is amended to read as follows:

 

2.15                           RETIRE OR RETIREMENT.  “Retire” or “Retirement” means an Employee’s
Separation from Service with the Company after attaining age 55 with at least
five years of employment service or after attaining age 65.

 

                3)             Section 2.16
is amended to read as follows:

 

2.16                           UNFORESEEABLE FINANCIAL EMERGENCY.  “Unforeseeable Financial Emergency” means an “unforeseeable
emergency” (as defined in Treas. Reg. Section 1.409A-3(i)(3)) or such
other regulation or guidance issued under section 409A of the Code of the
Participant.

 

                4)             The
following new Section 2.18 is included in the Plan at the end of Article 2
thereof:

 

2.18                           SEPARATION
FROM SERVICE.  “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 3M
and the Participant reasonably anticipated that no further services would be
performed after a certain date or that the level of bona fide services the
Participant 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).  A
Separation from Service shall not be deemed to occur while the Participant is
on military leave, sick leave or other bona fide leave of absence if the period
does not exceed six (6) months or, if longer, so long as the Participant
retains a right to reemployment with 3M or an affiliate under an applicable
statute or by contract.  For this
purpose, a leave is bona fide only if, and so long as, there is a reasonable
expectation that the Participant will return to perform services for 3M or an
affiliate.  Notwithstanding the
foregoing, a 29 month period of absence will be substituted for such 6 month
period if the leave is due to any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of no less than 6 

 

 

months and that causes
the Participant to be unable to perform the duties of his or her position of
employment.

 

                5)             The
following new Section 2.19 is included in the Plan at the end of Article 2
thereof:

 

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

 

6)             Section 4.1 is amended by
adding the following new paragraph at the end thereof:

 

Notwithstanding
anything to the contrary in this Plan, no Employee shall be eligible to
participate in the Plan by making contributions for any period after the end of
the 2008 Plan Year (the Plan Year that ends on December 31, 2008).

 

7)             Section 5.1 is amended by
adding the following new paragraph at the end thereof:

 

Notwithstanding
anything to the contrary in this Plan, no Participant shall be permitted to
make contributions to this Plan for any period after the end of the 2008 Plan
Year (the Plan Year that ends on December 31, 2008).

 

                8)             Section 5.2
is amended by adding the following new paragraph at the end thereof:

 

Notwithstanding
anything to the contrary in this Plan, the Company shall not make any matching
contributions to this Plan for any period after the end of the 2008 Plan Year
(the Plan Year that ends on December 31, 2008).

 

                9)             Section 7.1
is amended to read as follows:

 

7.1                                 GENERAL RULES.  Except as provided in Sections 7.5, 10.2 and
12.2, no distribution of a Participant’s Accounts hereunder shall be made prior
to such Participant’s death or Separation from Service with the Company.  All distributions of a Participant’s Accounts

 

 

shall be made in
cash.  When the Plan makes a distribution
of less than the entire balance of a Participant’s Account, the distribution
shall be charged pro rata against each of the investment funds to which the
Account is then allocated.

 

10)                                Section 7.2 is amended to read as
follows:

 

7.2                                 DISTRIBUTION FOLLOWING SEPARATION FROM
SERVICE.  If a Participant incurs a
Separation from Service with the Company for any reason other than death or
Retirement, the entire balance of such Participant’s Accounts shall be paid to
the Participant in a single lump sum distribution in the month of July in
the Plan Year following the Plan Year in which such Participant’s Separation
from Service occurred.

 

11)                                Section 7.3 is amended to read as
follows:

 

7.3                                 DISTRIBUTION FOLLOWING RETIREMENT.  If a Participant Retires from employment with
the Company, the Participant’s Account (i) for all Plan Years prior to
2005 shall be paid commencing at the time and in one of the following methods
of payment selected by such Participant no later than the December 31st
of the Plan Year in which such Participant Retires, and (ii) for each Plan
Year after 2004, shall be paid commencing at the time and in one of the
following methods of payment selected by such Participant at the time such
Participant elected to make contributions to the Plan for such Plan Year
pursuant to Section 4.2:

 

(a)                                  A single lump sum distribution; or

 

(b)                                 Ten or fewer annual installments, with
the amount of each installment payment being determined by multiplying the
balance in the Participant’s Account on the payment date by a fraction having a
numerator of one and a denominator equal to the remaining number of scheduled
installment payments.

 

 

All
lump sum and installment payments shall be made in the month of July in
the Plan Year or Years selected by the Participant; provided, however, that no
payments shall be made before the month of July in the Plan Year following
the Plan Year in which such Participant incurs a Separation from Service with
the Company, and provided further that no method of payment and commencement
date selected by a Participant shall require the Plan to make any payment more
than 10 years after the end of the Plan Year in which such Participant Retires.

 

12)           Section 7.4 is amended to read
as follows:

 

7.4                                 DISTRIBUTION FOLLOWING DEATH.  If a Participant dies before distribution of
his or her Account has begun, the entire balance of such Participant’s Account
shall be paid to the Participant’s Beneficiary in a single lump sum
distribution in the month of July in the Plan Year following the Plan Year
in which such Participant died.  If a
Participant dies after distribution of his or her Account has begun, the
remaining balance of his or her Account (if any) shall be paid to the
Participant’s Beneficiary in accordance with the method of payment chosen by
the Participant.

 

13)           Section 10.2 is amended to read
as follows:

 

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 termination of the Plan,
and to the extent permitted by section 409A of the Code, all elections to
contribute to the Plan shall be revoked and the Plan shall immediately
distribute in cash to the respective Participants and Beneficiaries the entire
remaining balances of the Accounts.

 

14)                                Section 12.3 is amended to read as
follows:

 

12.3                           DEFINITION OF CHANGE IN CONTROL.  For purposes of this Article 12, a
Change in Control of 3M shall be deemed to have occurred if there is a “change
in the ownership of 3M,” “change in effective control of 3M,” and/or a “change
in the ownership of a substantial 

 

 

portion of 3M’s assets”
as defined under Treas. Reg. Section 1.409A-3(i)(5) or such other
regulation or guidance issued under section 409A of the Code.

 

15)                                Section 12.4 is amended to read as
follows:

 

12.4                           GROSS UP FOR EXCISE TAX.  In the event that the payments made pursuant
to this Article 12 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 Account balance distributed to such Participant pursuant to this Article 12.  Such tax gross-up payment shall be made no
later than the end of the recipient’s taxable year following the taxable year
in which the recipient remits the related taxes.  If a Participant is a Specified Employee and
such gross-up payment is made on account of the Participant’s Separation from
Service, payment shall not be made prior to the first day of the seventh month
following the Participant’s Separation from Service.

 

16)                                Section 12.5 is amended to read as
follows:

 

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 or her rights under this Article 12
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 12, 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
incurred by such Participant in connection with such Participant’s receipt of
payments pursuant to this Article 12. 
Such payment or reimbursement shall be made no later than the end of the
recipient’s taxable year following the taxable year in which the recipient
incurs the related expenses.  If a
Participant is a Specified Employee and such payment or reimbursement is made
on account of the Participant’s Separation from Service, payment or
reimbursement shall not be made prior to the first day of the seventh month
following the Participant’s Separation from Service.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.

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