Document:

EXHIBIT 10.4

 

FORM OF AWARD AGREEMENT FOR NON-QUALIFIED
STOCK OPTIONS

GRANTED UNDER THE 2002 MANAGEMENT STOCK
OWNERSHIP PROGRAM

 

	
  Time:

  	
   

  	
  3M Company

  
	
  Notice
  of Grant of Stock Options

  and Option Agreement

  	
   

  	
  ID:
  41-0417775

  
	
  3M CENTER

  
	
   

  	
   

  	
  ST. PAUL, MN 55144-1000

  

 

	
  [Name]

  	
   

  	
  Option Number:

  
	
  c/o [Name]

  	
   

  	
  Plan:

  
	
  3M Center

  	
   

  	
   

  
	
  224-2W-15

  	
   

  	
   

  
	
  St. Paul, MN US 55144-1000

  	
   

  	
  ID:

  

 

 

Effective [date], you have been granted a(n) Non-Qualified Stock Option
to buy [number] shares of 3M Company (the Company) stock at $[price] per share.

 

The total option price of the shares granted is $[number].

 

Shares in each period will become fully vested on the date shown.

 

	
   

  	
   

  	
  Shares

  	
   

  	
  Vest
  Type

  	
   

  	
  Full
  Vest

  	
   

  	
  Expiration

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [number]

  	
   

  	
  On Vest Date

  	
   

  	
  [date]

  	
   

  	
  [date]

  	
   

  	
   

  

 

1EXHIBIT 10.5

 

3M 1997 GENERAL EMPLOYEES STOCK PURCHASE PLAN

(as amended through November 8,
2004)

 

SECTION 1  DEFINITIONS

 

For the purpose of this Plan:

 

1.01.        Plan.  The term “Plan” shall mean the
1997 General Employees Stock Purchase Plan, the terms and provisions of which
are set forth herein.

 

1.02.        Company.
The term “Company” shall mean 3M Company and such subsidiaries as
may be designated by the Board of Directors from time to time.

 

1.03.        Stock.  The term “Stock” shall mean the
common stock, without par value, of Minnesota Mining and Manufacturing Company.

 

1.04.        Participant.  The term “Participant” shall mean
an employee who has authorized payroll deductions in the manner set forth in
the Plan.  Each Participant shall have
the same rights and privileges as every other Participant.

 

1.05.        Current
Compensation.  The term “Current
Compensation” shall mean the actual gross earnings of each Participant for each
pay period applicable to such Participant before any deductions have been made.

 

1.06         Regular Employee.   The term “Regular Employee” shall mean an
individual recognized as such in the employment records and information systems
of the Company.  Such term shall not
include individuals recognized in the employment records and information
systems of the Company as temporary employees, nor shall it include independent
contractors or leased employees of the Company.

 

1.07         Voice
Response System.   The term “Voice
Response System” shall mean a telephone answering service or Internet-based
website by which eligible employees and Participants may elect to participate
in the Plan, give instructions and make elections by electronic communication
to the Company or by speaking with a representative of the Company.

 

1.08         1992 Plan.   The term “1992 Plan” shall mean the 1992
General Employees Stock Purchase Plan.

 

1.09         Effective
Date.      The term “Effective
Date” shall mean the date upon which this Plan becomes effective, determined in
accordance with Section 12.01.

 

SECTION 2  ELIGIBLE EMPLOYEES

 

Any Regular Employee of the Company shall be eligible to participate in
the Plan in the month following the month in which he or she completes two
months of service.

 

SECTION 3  ELECTION TO
PARTICIPATE

 

3.01.        An eligible employee
may participate in the Plan only by voluntary payroll deductions from Current
Compensation.

 

3.02.        Unless and until the
Company implements a Voice Response System, an eligible employee may elect to
participate in this Plan by completing and returning to Employee Administrative
Services of the Company a form known as “Stock Authorization” which authorizes
regular payroll deductions from the employee’s Current Compensation beginning
no later than the first pay period commencing in the month following receipt of
the form by Employee Administrative Services and continuing until the employee
withdraws from the Plan or his or her option is terminated for any reason.  If and when the Company implements a Voice
Response System, both initial elections to participate in the Plan and changes
in elections will be made by using such Voice Response System in accordance
with uniform procedures established by the Company.

 

1

 

3.03.        With the following
exceptions, all elections made by participants under the 1992 Plan and outstanding
as of 11:59 PM CT on June 30, 1997 shall be transferred to and remain in effect
under this Plan (until changed by the respective Participant) from and after
12:01 AM CT on July 1, 1997.  Elections
to participate by making elections under the 3M Flexible Benefits Program which
result in unutilized flex dollars being credited to participants’ stock option
accounts will not be recognized by the Plan. 
Elections to purchase Stock in five, fifteen or fifty share units will
be recognized simply as elections to participate under this Plan without regard
to such block size.

 

SECTION 4  GRANTING OF OPTION

 

4.01.        An option for as many
shares of Stock as may be purchased with each Participant’s Stock Option
Account balance as of the last business day of each calendar month shall be
granted to such Participant on the first trading day on the New York Stock
Exchange of such month.

 

4.02.        No Participant may be
granted options which would permit his or her right to purchase Stock under the
Plan (and, for 1997, under the 1992 Plan) to accrue at a rate which would
exceed $25,000 of fair market value (determined at the time the option is
granted) for each calendar year in which such options are outstanding at any
time.

 

SECTION 5  OPTION PRICE

 

The option price for each share of Stock shall be eighty-five percent
(85%) of the fair market value of such shares on the New York Stock Exchange on
the date the option is granted, rounded up to the next higher even cent. The
fair market value shall be the mean between the high and low sales price for
such shares on the New York Stock Exchange.

 

SECTION 6  PAYROLL DEDUCTIONS

 

6.01.        A Participant may
elect payroll deductions in whole percentages from three to ten percent of
Current Compensation, subject to the individual limit set forth in Section 4.02
herein.  With the exception of account
balances carried over from the 1992 Plan, no deductions shall commence prior to
the granting of the option.

 

6.02.        A Participant may at
any time increase or reduce the amount of his or her payroll deduction within
the limitations of Section 6.01 by completing a “Payroll Data Record.” The
change shall become effective not later than the next pay period commencing
after receipt of the form by Employee Administrative Services of the Company.

 

6.03.        Payroll deductions
will be credited to each Participant’s Stock Option Account on the last
business day of each month for deductions withheld from payrolls and received
at the Company’s payroll bank account on or prior to that date.

 

SECTION 7  STOCK OPTION ACCOUNT

 

All funds withheld from a Participant’s Current Compensation in
accordance with his or her authorization shall be credited to the Participant’s
Stock Option Account.  Unless required by
law, a Participant may not make any separate cash payment into his or her Stock
Option Account.  Unused funds remaining
in a participant’s stock option account under the 1992 Plan following the
termination of such plan will be transferred and credited to the Participant’s
Stock Option Account under this Plan as of the Effective Date.

 

2

 

SECTION 8  EXERCISE OF OPTIONS

 

8.01.        On the last business
day of each month during which a Participant has a Stock Option Account
balance, the Participant’s option shall automatically be exercised at the
option price for that month, unless the Participant withdraws from the Plan
prior to such day.

 

8.02.        If on the exercise
date the fair market value of a share of Stock on the New York Stock Exchange
is lower than the Participant’s option price, the option will be exercised at
the fair market value of such shares on the New York Stock Exchange on the
exercise date.

 

8.03         As soon as
practicable after the exercise of a Participant’s option, the shares purchased
upon the exercise of such option will be credited to the Participant’s book
entry account established by the Company with its stock transfer agent.

 

SECTION 9  TERMINATION OF
PARTICIPATION

 

9.01.        A Participant who is
participating through voluntary payroll deductions may at any time, by written
notice on a Payroll Data Record, cease making any further payroll
deductions.  In such event, the Company
shall refund within 45 days, the entire balance in the Participant’s Stock
Option Account (if any).  A Participant
may, however, make only one election to withdraw from or to re-enter the Plan
in any one calendar month.

 

9.02.        Participation under
the Plan shall automatically cease upon the date of a Participant’s death or
termination of employment for reasons other than retirement, and the amount
credited to the Participant’s Stock Option Account (if any) shall be refunded
within 45 days to him or her or to his or her estate.

 

9.03.        When a Participant
retires, the Participant’s option for the month immediately preceding his or
her retirement will be automatically exercised on the last business day of such
month to the extent of the funds in his or her Stock Option Account.  Following such exercise, the Participant’s
participation in this Plan will end.

 

9.04.        Approved leave of
absence or layoff shall not be deemed a termination of employment for purposes
of Section 9.

 

SECTION 10  TRANSFERABILITY

 

10.01.      The options may not be
assigned, transferred, pledged, or hypothecated (whether by operation of law or
otherwise), and shall not be subject to execution, attachment, or similar
process.  Any attempted assignment,
transfer, pledge, hypothecation, other disposition of the option, or levy of
attachment or similar process upon the option shall be null and void and
without effect.  The option may be exercised
only by the Participant.

 

10.02.      The funds accumulated
in the Stock Option Account may not be assigned, transferred, pledged, or
hypothecated in any way, and any attempted assignment, transfer, pledge,
hypothecation or other disposition of the funds accumulated in the Stock Option
Account shall be null and void and without effect.

 

SECTION 11  ISSUANCE AND SALE OF
SHARES

 

11.01.      Effective for shares
purchased on or after January 1, 2005, a Participant may not sell or otherwise
transfer the shares of Stock purchased upon the exercise of an option granted
under this Plan during the one-year period following the date on which the
option was exercised; provided, however, that this prohibition will not apply
and such shares may be transferred or sold following the death of the
Participant; and provided further, that such shares may be sold (subject to the
provisions of Section 11.02) following the retirement or termination of
employment of the Participant.

 

11.02.      Effective for shares
purchased on or after January 1, 2005, a Participant subject to U.S. income
taxes may not sell or otherwise transfer the shares of Stock purchased upon the
exercise of an option granted under this Plan, except for sales through the
designated broker selected by the Company, during the one-year period following
the first anniversary of the date on which the option was exercised; provided,
however, that this prohibition will not apply and such shares may be
transferred or sold following the death of the Participant.

 

11.03.      Any attempt by a
Participant to sell or transfer shares of Stock at a time or in a manner that
is inconsistent with the provisions of Sections 11.01 or 11.02 will be
considered null and void and of no effect.

 

3

 

11.04.      After the restrictions
on sale or transfer of shares of Stock described in Sections 11.01 and 11.02
have expired or become inapplicable, a Participant may receive certificates for
the shares of Stock purchased upon the exercise of options granted under this
Plan only by furnishing an appropriate written or electronic request to the
Company or its agent in accordance with its instructions.

 

11.05.      The Company shall not
be required to issue or deliver any certificate for Stock purchased upon the
exercise of options granted hereunder (i) prior to the admission of such Stock
to listing on any stock exchange on which Stock may at that time be listed or
required to be listed, or (ii) prior to registration under the Securities Act
of 1933, or registrations under any state or foreign laws, if such registration
is required.  The Company will use its
best efforts to accomplish such listing or registration not later than a
reasonable time following each exercise of such options, and delivery of Stock
by the Company may be deferred until listing or registration is accomplished.

 

11.06.      A Participant shall
have no interest in the Stock covered by the options until the shares purchased
in accordance with Section 8 are credited to the Participant’s book entry
account.

 

SECTION 12  EFFECTIVE DATE AND
AMENDMENT

OR TERMINATION OF PLAN

 

12.01.      The Plan shall become
effective on the date fixed by the Board of Directors after approval by the
stockholders.

 

12.02.      The Plan shall
automatically terminate five years from the Effective Date unless extended by
the Board of Directors.  The Board of
Directors may by resolution extend the Plan for one or more additional periods
of one year each.

 

12.03.      The Board of Directors
may at any time terminate or amend the Plan except that no amendment shall be
made without prior approval of the stockholders which would (i) authorize the
issuance of more than 30,000,000 unissued shares of Stock (after adjustment for
stock splits), (ii) permit the issuance of Stock before payment thereof in full,
(iii) increase the rate of payroll deductions above ten percent of Current
Compensation, (iv) reduce the price per share at which the Stock may be sold,
or (v) authorize the sale of more than an aggregate of 30,000,000 shares of
Stock (after adjustment for stock splits).

 

12.04.      Upon termination of
the Plan, the Participant’s option shall be exercised for the number of whole
and fractional shares which can be purchased with the funds credited to the
Participant’s Stock Option Account on the date of termination.  Any balance remaining after said exercise
shall be refunded to the Participant.

 

SECTION 13  ADMINISTRATION

 

The Plan shall be administered under the direction of the Compensation
Committee of the Board of Directors.  In
administering the Plan, it will be necessary to follow various laws and
regulations.  It may be necessary from
time to time to change or waive requirements of the Plan to conform with the
law, to meet special circumstances not anticipated or covered in the Plan, or
to carry on successful operations of the Plan. 
Therefore, it is necessary for the Company to reserve the right to make
variations in the provisions of the Plan and to determine any questions which
may arise regarding interpretation and application of the Plan’s provisions.  The Committee’s determinations as to the
interpretation and operation of this Plan shall be final and conclusive.

 

SECTION 14  STOCK DIVIDEND, STOCK
SPLIT, REDUCTION IN

SHARES, MERGER, OR CONSOLIDATION

 

If a record date for a stock dividend, split, or reduction in the
number of shares of Stock should occur during the option period, appropriate
adjustments in numbers of shares and option prices shall be made to give effect
thereto on an equitable basis.

 

If the Company is merged into or consolidated with one or more
corporations during the option period, appropriate adjustments shall be made to
give effect thereto on an equitable basis in terms of issuance of shares of the
corporation surviving the merger or the consolidated corporation, as the case
may be.

 

4

 

SECTION 15  STOCK TO BE SOLD

 

The aggregate number of shares of Stock which may be optioned and sold
under the Plan shall not exceed 30,000,000 shares, all or any portion of which
may be treasury shares, shares reacquired from time to time, or authorized but
unissued shares.  In the event of a
reclassification or stock split of the Stock, the foregoing number of shares
shall be appropriately adjusted.

 

SECTION 16  FUNDS IN STOCK OPTION
ACCOUNT

 

The funds deducted and retained from the Participants shall be
accounted for in U.S. dollars and shall be remitted to 3M Company as directed
by the Company.  The funds in the Stock
Option Account, after receipt by 3M Company, shall be under the direction of 3M
Company and applied to the payment for Stock at the time the Participant’s
options are exercised.

 

No interest will be accumulated or paid by the Company on funds held in
the Stock Option Account.

 

SECTION 17  NOTICES

 

Notices to the Committee shall be addressed as follows:

 

Compensation Committee

c/o 3M Secretary

P. O. Box 33428

St. Paul, MN 55144-1000

 

SECTION 18  OTHER COMPANY BENEFIT
AND

COMPENSATION PROGRAMS

 

Unless otherwise specifically determined by the Committee, the receipt
by Participants of options under the Plan shall not be deemed a part of a
Participant’s regular, recurring compensation for purposes of calculating
payments or benefits from any Company benefit plan, severance program, or
severance pay law of any country. 
Further, the Company may adopt other compensation programs, plans, or
arrangements as it deems appropriate or necessary.

 

SECTION 19  FUTURE RIGHTS

 

No participant shall have any rights under the Plan to be retained in
the employ of the Company.

 

5

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