Document:

Exhibit 10.24

 

3M Deferred
Compensation Excess Plan

 

ARTICLE 1

 

Purpose

 

The purpose of this Plan
is to attract and incent eligible highly compensated employees to remain with
3M by offering them an opportunity to earn additional retirement benefits by deferring
the receipt of a portion of their compensation, with the belief that such
opportunity will permit those employees to increase their long-term financial
security.

 

ARTICLE 2

 

Definitions

 

For the purposes of this
Plan, the following words and phrases shall have the meanings indicated, unless
the context clearly indicates otherwise:

 

2.1                                 ACCOUNT. 
“Account” or “Accounts” means the record of the amounts credited to a
Participant under the Plan pursuant to Article 6.

 

2.2                                 BENEFICIARY.  “Beneficiary” means the person, persons or
entity designated by the Participant, or as provided in Article 8, to
receive any unpaid balance in such Participant’s Accounts following his or her
death.

 

2.3                                 CLASS YEAR.  “Class Year” means the calendar year in
respect of which Eligible Compensation is deferred under this Plan.  The first Class Year shall begin on January 1,
2010.

 

2.4                                 CODE. 
“Code” means the Internal Revenue Code of 1986, as amended.

 

2.5                                 COMMITTEE.  “Committee” means the Compensation Committee
of the Board of Directors of 3M.

 

2.6                                 COMPANY. 
“Company” means 3M Company (“3M”), its U.S. affiliates and subsidiaries
and any successor to the business thereof.

 

2.7                                 EFFECTIVE DATE.  “Effective Date” means January 1, 2010,
the effective date of this Plan.

 

2.8                                 ELIGIBLE COMPENSATION.  “Eligible Compensation” of a Participant for
any Class Year means base pay plus any variable pay (including annual
incentive (AIP), sales commissions and management objective, but excluding any
portion of such variable pay that is payable in restricted stock units and also
excluding any such variable pay in the form of performance units or performance
shares granted under the 2008 Long-Term Incentive Plan) earned by the
Participant during such Class Year that exceeds the Indexed Compensation Limit
for such Class Year (whether paid during or following such Class Year).  Eligible Compensation does not include
incentives, awards, foreign service premiums and allowances, income arising
from stock options, separation pay, employer contributions to employee benefit
plans, reimbursements or payments in lieu thereof, or lump sum payouts of a
Participant’s unused vacation benefits.

 

2.9                                 EMPLOYEE. 
“Employee” means any person employed by the Company as an active regular
common-law employee who is recognized as such on 3M’s human resources/payroll
systems; including such persons who are United States citizens but on
assignment outside of this country and resident aliens employed in the United
States; but excluding any person covered by a collective bargaining agreement
to which the Company is a party.

 

2.10                           GROWTH FACTOR.  For those Participants who allocate all or a
portion of their Accounts to the investment fund based on the return of the
Growth Factor, unless and until changed by the Committee, the “Growth Factor”
applied during each Class Year will be the average Citigroup 10 Year AAA
Industrial Corporate Bond Rating for New Issues for the four-week period ending
with the last week ending in October of the previous year.

 

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2.11                           INDEXED COMPENSATION LIMIT.  “Indexed Compensation Limit” means the annual
amount of compensation that may be recognized by a qualified retirement plan
under section 401(a)(17) of the Code (as adjusted annually for increases in the
cost of living).

 

2.12                           PARTICIPANT.  “Participant” means any Employee who has
elected to make contributions to this Plan after satisfying the eligibility
requirements of Section 4.1.

 

2.13                           PLAN. 
“Plan” means the plan described in this document, as it may be amended
from time to time.  The official name of
the Plan shall be the 3M Deferred Compensation Excess Plan.

 

2.14                           PLAN ADMINISTRATOR.  “Plan Administrator” means the person to whom
the Committee has delegated the authority and responsibility for administering
the Plan.  Unless and until changed by
the Committee, the Plan Administrator of the Plan shall be 3M’s Vice President,
Compensation and Benefits or his or her successor.

 

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.

 

2.16                           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.

 

2.17                           SPECIFIED EMPLOYEE.  “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.

 

2.18                           3M. 
“3M” means 3M Company, a Delaware corporation.

 

2.19                           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).

 

2.20                           VALUATION DATE.  “Valuation Date” means each day that all or
substantially all of the U.S. and international financial markets in which the
VIP’s assets are invested are open for trading.

 

2.21                           VIP. 
“VIP” means the 3M Voluntary Investment Plan and Employee Stock
Ownership Plan, as it may be amended from time to time.

 

ARTICLE 3

 

Effective Date

 

The provisions of the
Plan shall take effect on January 1, 2010. 
This Plan shall continue in operation and effect until 3M terminates it
in accordance with the provisions of Section 10.2.

 

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ARTICLE 4

 

Eligibility and Participation

 

4.1                                 ELIGIBILITY.  An Employee subject to U.S. income taxation
shall be eligible to participate in the Plan for a Class Year if as of the
November 1st immediately prior to such Class Year:

 

(a)                                  such Employee is employed by the Company;

 

(b)                                 such Employee is eligible for and covered
by one or more of the sales commission, management objective or annual
incentive plans of 3M; and

 

(c)                                  such Employee had estimated annual
planned total cash compensation (base pay plus variable pay, including annual
incentive, sales commission and management objective) that exceeds the Indexed
Compensation Limit in effect for the calendar year including such November 1st.

 

The eligibility of
Employees to participate in this Plan shall be determined each Class Year,
and no Employee shall have any right to make contributions for any Class Year
by virtue of having an Account as a result of making contributions for any
prior Class Year.

 

4.2                                 ELECTION TO CONTRIBUTE.  In order to make contributions under the Plan
for any Class Year, an Employee who meets the eligibility requirements of Section 4.1
must elect to participate via the Plan’s Internet site or via such other method
as shall be established by the Plan Administrator.  To be effective, an Employee’s election to
participate for a Class Year must specify the percentage of his or her
Eligible Compensation to be deferred, select the time and form of payment of
the amount deferred and the earnings thereon, specify the investment fund or
funds in which such deferred amounts are to be treated as being invested, and
provide such other information as the Plan Administrator may require.  The time period during which elections to
participate will be accepted for each Class Year will be established by
the Plan Administrator, but in no event will any election be accepted after the
beginning of the Class Year to which such election relates.

 

4.3                                 DURATION OF CONTRIBUTION ELECTION.  Each eligible Employee’s election to make
contributions to the Plan made in accordance with the requirements of Section 4.2
shall expire as of the end of the Class Year to which it relates, although
it shall apply to any Eligible Compensation paid after the end of such Class Year
if such Eligible Compensation was earned during such Class Year.  Participants may not change or revoke their
contribution elections for a Class Year after the enrollment period for
the Class Year has ended.

 

4.4                                 DURATION OF PARTICIPATION.  A Participant’s participation in the Plan
shall continue until all amounts credited to his or her Accounts have been
distributed, or until the Participant’s death, if earlier.

 

4.5                                 WAIVER OF ELECTION.  The Committee may, in its sole discretion,
grant a waiver or suspension of a Participant’s election to make contributions
for a Class Year, for such time as the Committee may deem necessary, upon
a finding that the Participant has suffered an Unforeseeable Financial
Emergency.

 

ARTICLE 5

 

Contributions

 

5.1                                 PARTICIPANT CONTRIBUTIONS.  A Participant may contribute (defer) any
whole percentage (but no more than 50 percent of base salary and no more than
90 percent of variable pay) of his or her Eligible Compensation earned during
the Class Year to which such Participant’s election relates; provided,
however, that the maximum amount of any Eligible Compensation payment that may
be deferred by a Participant shall be limited to the amount otherwise payable
to such Participant after the deduction of the appropriate withholding
taxes.  The percentage the Participant
elects to contribute (defer) shall be deducted from each payment of such
Participant’s Eligible Compensation earned during such Class Year, whether
paid during or following such Class Year.

 

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5.2                                 AMOUNTS CREDITED TO ACCOUNT.  For each Participant and each Class Year
that the Participant elects to defer Eligible Compensation hereunder the Company
shall establish on its books an Account, to which the amounts deferred in
accordance with Section 5.1 shall be credited at such times as are in
accordance with the standard payroll procedures of the Company.  The amount credited to a Participant’s Account
shall equal the amount deferred, except that the amount credited may be
reduced, at the discretion of the Committee, to the extent that the Company is
required to withhold any taxes or other amounts from the Participant’s deferred
compensation pursuant to any federal, state or local law.

 

ARTICLE 6

 

Accounts

 

6.1                                 EARNINGS ON ACCOUNTS.  Each Participant’s Accounts shall be credited
with investment earnings or losses based on the performance of the investment
funds selected by such Participant.  The
investment funds available to the Participants in this Plan shall be the same
as the investment funds available to the participants in the VIP, excluding the
3M Stock Fund and the VIP’s brokerage window, but shall also include a fund
based on the return of the Growth Factor. 
Participants may allocate the amounts credited to their Accounts among
such investment funds in whole percentages of from one percent to one hundred
percent.  The deemed investment earnings
or losses on such VIP funds for purposes of this Plan shall equal the actual
rate of return on such funds in the VIP net of any fees or expenses chargeable
thereto, including but not limited to management fees, trustee fees,
recordkeeping fees and other administrative expenses.  In the event that a Participant fails to
select the investment fund or funds in which his or her Accounts are deemed to
be invested, such Participant will be deemed to have allocated the entire
amount credited to his or her Accounts to the LifePath Portfolio fund with the
target retirement year closest to the year in which such Participant will
attain age 65.

 

6.2                                 CHANGES IN INVESTMENT FUND
ALLOCATIONS.  Participants may change the
investment funds among which their Account balances or future contributions are
allocated at any time, subject to such rules as may be established by the
Plan Administrator.  Allocation changes
may only be made using the Plan’s Internet site or by speaking with a
representative of the Plan’s recordkeeper.

 

6.3                                 VALUATION OF ACCOUNTS.  The Accounts of all Participants shall be
revalued as of each Valuation Date following the Effective Date of this
Plan.  As of each Valuation Date, the
value of a Participant’s Account shall consist of the balance of such Account
as of the immediately preceding Valuation Date, increased by the amount of any
contributions made and credited thereto since the immediately preceding
Valuation Date, increased or decreased (as the case may be) by the amount of
deemed investment earnings or losses credited to the investment funds selected
by the Participant since the immediately preceding Valuation Date, and
decreased by the amount of any distributions made from such Account since the
immediately preceding Valuation Date.

 

6.4                                 VESTING OF ACCOUNTS.  A Participant shall always be 100% vested in
the value of his or her Accounts (including any earnings thereon).

 

6.5                                 STATEMENT OF ACCOUNT.  As soon as administratively feasible
following the end of each Class Year, the Plan shall deliver to each
Participant a statement of his or her Accounts in the Plan.

 

ARTICLE 7

 

Distribution of Accounts

 

7.1                                 DISTRIBUTION DATE AND METHOD.  As part of the election to participate herein
for each Class Year, the Participant shall specify the date (hereinafter
referred to as the “Distribution Date”) upon which the Company will commence
payment of the amounts credited to the respective Account and the method of
paying such amounts.  A Participant must
select one of the following Distribution Dates:

 

(a)                                  During the month of January of
any calendar year following the end of the year following the Class Year
to which such Participant’s election to defer Eligible Compensation relates;

 

(b)                                 During the month of January of any
one of the first through the tenth calendar years following the Participant’s
Retirement from service with the Company.

 

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A participant must also select one of the
following methods of payment in each election to participate herein:

 

(c)                                  A single lump sum distribution.

 

(d)                                 Ten or fewer annual installments
(the amount of such installment payments shall be computed by multiplying the
balance in the Account on each date of payment by a fraction, the numerator of
which is one and the denominator of which equals the remaining number of
scheduled annual installment payments).

 

No Participant’s election to participate
for any Class Year shall require the Plan to make any payment more than 10
years after the month of January of the calendar year following the
Participant’s Retirement from service with the Company.  Each payment from a Participant’s Account
shall be made in cash, and shall be charged against the balance in such
Account.  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.

 

7.2                                 DISTRIBUTION WHILE STILL AN
EMPLOYEE.  If a Participant is still
employed by the Company at the Distribution Date specified in Section 7.1(a) for
any Account, the entire balance of such Account at the Distribution Date (plus
any deemed investment earnings or losses credited to such Account thereafter)
shall be paid to the Participant commencing on such date and in accordance with
the method of payment chosen by the Participant.

 

7.3                                 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 value of such Participant’s Accounts shall be paid to the
Participant in a single lump sum distribution in the month of July in the
calendar year following the calendar year in which such Participant’s
Separation from Service occurred (or in the month of January in the
calendar year following the calendar year in which such Participant’s
Separation from Service occurred if such Separation from Service occurred prior
to July 1 of such calendar year).

 

7.4                                 DISTRIBUTION FOLLOWING RETIREMENT.  If a Participant Retires from service with
the Company prior to the Distribution Date for any Account, the entire balance
of such Account at the Distribution Date (plus any deemed investment earnings
or losses credited to such Account thereafter) shall be paid to the Participant
(or Beneficiary) commencing on such Distribution Date and in accordance with
the method of payment chosen by the Participant; provided, however, that, in
the event such Distribution Date would be less than six months following the
date of the Participant’s Retirement from service with the Company, such
Participant’s Distribution Date shall be and payment of such Account shall
begin during the month of July of the calendar year following the year in
which such Participant Retires from service with the Company.

 

7.5                                 DISTRIBUTION FOLLOWING DEATH.  If a Participant dies before distribution of
one or more of his or her Accounts has begun, the entire balance of such
Accounts shall be paid to the Participant’s Beneficiary in a single lump sum
distribution in the month of July in the calendar year following the
calendar year in which such Participant died (or in the month of January in
the calendar year following the calendar year in which the Participant died if
the Participant died before July 1 of such calendar year).  If a Participant dies after distribution of
one or more of his or her Accounts has begun, the remaining balance of such
Accounts (if any) shall be paid to the Participant’s Beneficiary in accordance
with the method of payment chosen by the Participant.

 

7.6                                 UNFORESEEABLE FINANCIAL EMERGENCY
DISTRIBUTION.  Upon finding that a
Participant has suffered an Unforeseeable Financial Emergency, the Committee
may, in its sole discretion, permit the Participant to withdraw an amount from
his or her Account(s) sufficient to alleviate the emergency.

 

7.7                                 WITHHOLDING; PAYROLL TAXES.  To the extent required by the laws in effect
at the time any payment is made, the Plan shall withhold from any payment made
hereunder any taxes required to be withheld for federal, state or local
government purposes.

 

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ARTICLE 8

 

Designation of Beneficiaries

 

8.1                                 BENEFICIARY DESIGNATION.  Each Participant shall have the right at any
time to designate any person, persons, or entity, as Beneficiary or
Beneficiaries to whom payment of the Participant’s Accounts shall be made in
the event of the Participant’s death. 
Any designation made under the Plan may be revoked or changed by a new
designation made prior to the Participant’s death.  Any such designation or revocation must be
made in accordance with the rules established by the Plan Administrator,
and will not be effective until received by the Plan.

 

8.2                                 BENEFICIARY PREDECEASES PARTICIPANT.  If a Participant designates more than one
Beneficiary to receive such Participant’s Accounts and any Beneficiary shall
predecease the Participant, the Plan shall distribute the deceased Beneficiary’s
share to the surviving Beneficiaries proportionately, as the portion designated
by the Participant for each bears to the total portion designated for all
surviving Beneficiaries.

 

8.3                                 ABSENCE OF EFFECTIVE DESIGNATION.  If a Participant makes no designation or
revokes a designation previously made without making a new designation, or if
all persons designated shall predecease the Participant, the Plan shall
distribute the balance of the deceased Participant’s Account in the manner
determined in accordance with the Participant’s designation in effect under the
VIP.  In the event such Participant has
no effective designation under the VIP, the Plan shall distribute the balance
of the deceased Participant’s Account to the first of the following survivors:

 

(a)                                  The Participant’s spouse;

 

(b)                                 Equally to the Participant’s children;

 

(c)                                  Equally to the Participant’s parents;

 

(d)                                 Equally to the Participant’s brothers and
sisters; or

 

(e)                                  The Participant’s estate executors or
administrators.

 

8.4                                 DEATH OF BENEFICIARY.  If a Beneficiary to whom payments hereunder
are to be made pursuant to the foregoing provisions of this Article 8
survives the Participant but dies prior to complete distribution to the
Beneficiary of the Beneficiary’s share:

 

(a)                                  unless the Participant has otherwise
specified in his or her designation, the Plan shall distribute the
undistributed portion of such Beneficiary’s share to such person or persons,
including such Beneficiary’s estate, as such Beneficiary shall have designated
in a designation made with the Plan prior to such Beneficiary’s death (which
designation shall be subject to change or revocation by such Beneficiary at any
time); or

 

(b)                                 if the Participant’s designation
specifies that such Beneficiary does not have the power to designate a
successor Beneficiary or if such Beneficiary is granted such power but fails to
designate a successor Beneficiary prior to such Beneficiary’s death, the Plan
shall distribute the undistributed portion of such Beneficiary’s share to such
Beneficiary’s estate.

 

8.5                                 BENEFICIARY DISCLAIMER.  Notwithstanding the foregoing provisions of
this Article 8, in the event a Beneficiary, to whom payments hereunder
would otherwise be made, disclaims all or any portion of that Beneficiary’s
interest in such payments, such disclaimed portion of such Beneficiary’s
interest in such payments shall pass to the person or persons specified by the
Participant to take such disclaimed interest. 
In the event the Participant did not specify a person or persons to take
disclaimed interests, such disclaimed portion of such Beneficiary’s interest in
such payments shall pass to the person or persons who would be entitled thereto
pursuant to the Participant’s designation or the designation made with respect
to the VIP referenced above, whichever is applicable pursuant to the foregoing
provisions of this Article 8, if such Beneficiary had died immediately
preceding the death of the Participant.

 

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ARTICLE 9

 

Unfunded Plan

 

9.1                                 NO
TRUST.  This Plan is intended to be an “unfunded”
plan of deferred compensation for the Participants.  As such, the benefits payable under this Plan
will be paid solely from the general assets of the Company.  The Company does not intend to create any
trust in connection with this Plan.  The
Company shall not have any obligation to set aside funds or make investments in
the investment funds referred to in Article 6.  The Company’s obligations under this Plan
shall be merely that of an unfunded and unsecured promise to pay money in the
future.

 

9.2                                 UNSECURED
GENERAL CREDITOR.  No Participant or
Beneficiary shall have any right to receive any benefit payments from this Plan
except as provided in Articles 7 and 8. 
Until such payments are received, the rights of each Participant and
Beneficiary under this Plan shall be no greater than the rights of a general
unsecured creditor of the Company.

 

ARTICLE 10

 

Amendment and Termination of the
Plan

 

10.1                           RIGHT TO AMEND.  3M may at any time amend or modify the Plan
in whole or in part; provided, however, that no amendment or modification shall
adversely affect the rights of any Participant or Beneficiary acquired under
the terms of the Plan as in effect prior to such action.  The consent of any Participant, Beneficiary,
employer or other person shall not be a requisite to such amendment or
modification of the Plan.

 

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 the 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.

 

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ARTICLE 11

 

General Provisions

 

11.1                           NONASSIGNABILITY.  Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt the amounts, if any, payable hereunder. 
All payments and the rights to all payments are expressly declared to be
nonassignable and nontransferable.  No
part of the amounts payable hereunder shall, prior to actual payment, be
subject to seizure or sequestration for the payment of any debts, judgments or
decrees, or transferred by operation of law in the event of a Participant’s or
any Beneficiary’s bankruptcy or insolvency. 
No part of any Participant’s Account may be assigned or paid to such
Participant’s spouse in the event of divorce pursuant to a domestic relations
order.

 

11.2                           NOT A CONTRACT OF EMPLOYMENT.  The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between the Company and
any Participant, and the Participants (or their Beneficiaries) shall have no
rights against the Company except as may otherwise be specifically provided
herein.  Moreover, nothing in this Plan
shall be deemed to give any Participant the right to be retained in the
employment of the Company or to interfere with the right of the Company to
discipline or discharge such Participant at any time for any reason whatsoever.

 

11.3                           TERMS. 
Wherever any words are used herein in the singular or in the plural,
they shall be construed as though they were used in the plural or in the
singular, as the case may be, in all cases where they would so apply.

 

11.4                           CAPTIONS. 
The captions of the articles and sections of this Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.

 

11.5                           GOVERNING LAW.  The provisions of this Plan shall be
construed and interpreted according to the laws of the State of Minnesota.

 

11.6                           VALIDITY. 
In case any provision of this Plan shall be ruled or declared invalid
for any reason, said illegality or invalidity shall not affect the remaining
parts hereof, but this Plan shall be construed and enforced as if such illegal
or invalid provision had never been inserted herein.

 

11.7                           CLAIMS PROCEDURE.  Any Participant or Beneficiary who disagrees
with any decision regarding his or her benefits under this Plan shall submit a
written request for review to the Plan Administrator.  The Plan Administrator shall respond in
writing to such a request within 60 days of his or her receipt of the request.  The Plan Administrator may, however, extend
the reply period for an additional 60 days for reasonable cause.  The Plan Administrator’s response shall be
written in a manner calculated to be understood by the Participant or
Beneficiary, and shall set forth:

 

(a)                                  the specific reason or reasons for any
denial of benefits;

 

(b)                                 specific
references to the provision or provisions of this Plan on which the denial is
based;

 

(c)                                  a description
of any additional information or material necessary for the Participant or
Beneficiary to improve his or her claim, and an explanation of why such
information or material is necessary; and

 

(d)                                 an explanation
of the Plan’s claims review procedure and other appropriate information as to
the steps to be taken if the Participant or Beneficiary wishes to appeal the
Plan Administrator’s decision.

 

If the Participant or Beneficiary
disagrees with the decision of the Plan Administrator, he or she shall file a
written appeal with the Committee within 120 days after receiving the Plan
Administrator’s response. The Committee shall respond in writing to such an
appeal within 90 days of its receipt of the appeal.  The Committee may, however, extend the reply
period for an additional 90 days for reasonable cause.  The Committee’s response shall be written in
a manner calculated to be understood by the Participant or Beneficiary, and
shall both set forth the specific reasons for its decision and refer to the
specific provision or provisions of the Plan on which its decision is based.

 

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11.8                           SUCCESSORS.  The provisions of this Plan shall bind and
inure to the benefit of the Company and its successors and assigns.  The term successors as used herein shall
include any corporation or other business entity which shall, whether by
merger, consolidation, purchase or otherwise, acquire substantially all of the
business and assets of the Company, and successors of any such corporation or
other business entity.

 

11.9                           INCOMPETENT.  In the event that it shall be found upon
evidence satisfactory to the Plan Administrator that any Participant or
Beneficiary to whom a benefit is payable under this Plan is unable to care for
his or her own affairs because of illness or accident, any payment due (unless
prior claim therefore shall have been made by a duly authorized guardian or other
legal representative) may be paid, upon appropriate indemnification of the
Plan, to the spouse or other person deemed by the Plan Administrator to have
accepted responsibility for such Participant or Beneficiary.  Any such payment made pursuant to this Section 11.9
shall be in complete discharge of any liability therefore under this Plan.

 

11.10                     INDEMNIFICATION.  To the extent permitted by law, the Company
shall indemnify the Plan Administrator and the members of the Committee against
any and all claims, losses, damages, expenses and liability arising from their
responsibilities or the performance of their duties in connection with the Plan
which is not covered by insurance paid for by the Company, unless the same is
determined to be due to gross negligence or intentional misconduct.

 

ARTICLE 12

 

Change in Control

 

12.1                           TERMINATION UPON CHANGE IN CONTROL.  This Plan shall terminate and the Plan shall
immediately distribute in cash to the respective Participants the amounts
credited to all Accounts upon the occurrence of a Change in Control of 3M.

 

12.2                           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 in Treas.
Reg. section 1.409A-3(i)(5) or such other regulation or guidance issued
under section 409A of the Code.

 

12.3                           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
and expenses incurred by such Participant in connection with such Participant’s
receipt of payments pursuant to this Article 12.  Payment of these legal and accounting fees,
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 the Participant
incurs these fees and expenses.  If a
Participant is a Specified Employee and such 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.

 

9Exhibit 10.25

 

3M Performance
Awards Deferred Compensation Plan

 

ARTICLE 1

 

Purpose and History

 

The purpose of this Plan
is to attract and incent eligible management employees to remain with 3M by
providing those management employees an opportunity to defer the receipt of all
or a portion of certain long-term incentive compensation, with the belief that
such opportunity will permit those employees to increase their long-term
financial security.

 

3M originally adopted
this non-qualified voluntary deferred compensation plan effective September 1,
1985.  The Plan was most recently amended
and restated effective March 1, 2008 under a document titled “3M Deferred
Compensation Plan”, and has been most recently amended effective January 1,
2009.  The purpose of the amendment was
to bring the plan document into compliance with the requirements of section
409A of the Code, including the regulations issued thereunder.  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.

 

From the time of the Plan’s
original adoption through December 31, 2009, the Plan permitted
Participants to make elective deferrals of base salary and variable pay,
including profit sharing, annual incentive (AIP), sales commissions and
management objective, Performance Unit Plan benefits and other incentive
payments that the Committee may include from time to time, earned by a
Participant during a Class Year. 
With respect to Class Periods beginning on and after January 1,
2010, 3M has created the “3M Deferred Compensation Excess Plan” to provide for
voluntary deferrals of base salary and variable pay (other than performance
shares and performance units granted under the 2008 Long-Term Incentive Plan
and other long-term incentive compensation) that is strictly in excess of the
compensation limit under section 401(a)(17) of the Code.

 

Effective for Class Periods
beginning on and after January 1, 2010, this Plan is hereby restated under
this document entitled “3M Performance Awards Deferred Compensation Plan.”  This restated Plan permits voluntary
deferrals of performance shares and performance units granted under the 2008
Long-Term Incentive Plan.  Effective for Class Periods
beginning on and after January 1, 2010, voluntary deferrals of base salary
and other variable pay shall no longer be made under this Plan, but rather,
shall be made exclusively under the 3M Deferred Compensation Excess Plan, the
3M VIP Excess Plan and the 3M VIP. 
Because this Plan is not intended to be an “excess plan,” Eligible
Compensation shall be determined under this Plan without regard to the
compensation limit under section 401(a)(17) of the Code.

 

All deferrals made under
this Plan with respect to Class Year 2009 and prior Class Years
(including deferrals of base salary, annual variable pay and Performance Unit
Plan benefits) shall continue to be accounted for under this Plan.

 

ARTICLE 2

 

Definitions

 

For the purposes of this
Plan, the following words and phrases shall have the meanings indicated, unless
the context clearly indicates otherwise:

 

2.1           ACCOUNT. 
“Account” or “Accounts” means the record of the amounts credited to a
Participant under the Plan pursuant to Article 6.  “Accounts” shall consist of Deferred Income
Accounts and Deferred Share Accounts.  A
separate Deferred Share Account shall be maintained for each Participant for
each Class Year or Class Period for which such Participant elects to
defer the receipt of Performance Unit Plan awards payable in the form of shares
of 3M common stock or performance shares granted under the 3M 2008 Long-Term
Incentive Plan.  A separate Deferred
Income Account shall be maintained for each Participant for each Class Year
or Class Period for which such Participant elects to defer the receipt of
any other Compensation 

 

1

 

(for Class Year
2009 and Class Years prior thereto) or Eligible Compensation (for Class Periods
beginning in 2010 or later).

 

2.2           BENEFICIARY.  “Beneficiary” means the person, persons or
entity designated by the Participant, or as provided in Article 8, to
receive any unpaid balance in such Participant’s Accounts following his or her
death.

 

2.3           CLASS PERIOD.  “Class Period” means a performance
period beginning on or after January 1, 2010 for the respective
performance shares or performance units granted under the 2008 Long-Term
Incentive Plan, as determined by the Committee.

 

2.4           CLASS YEAR.  “Class Year” means 2009 and any prior
calendar year in respect of which Eligible Compensation (or Compensation, as
defined under prior Plan documents) was deferred under this Plan.

 

2.5           CODE. 
“Code” means the Internal Revenue Code of 1986, as amended.

 

2.6           COMMITTEE.  “Committee” means the Compensation Committee
of the Board of Directors of 3M.

 

2.7           COMPANY. 
“Company” means 3M Company (“3M”), its U.S. affiliates and subsidiaries
and any successor to the business thereof.

 

2.8           EFFECTIVE DATE.  “Effective Date” means January 1, 2010,
the effective date of this restated Plan.

 

2.9           ELIGIBLE COMPENSATION.  “Eligible Compensation” of a Participant for
any Class Period means performance shares and performance units granted
under the 3M 2008 Long-Term Incentive Plan and the amounts payable as a result
of such performance shares and performance units, or other incentive payments
that the Committee may include from time to time, earned by a Participant
during a Class Period.

 

2.10         EMPLOYEE. 
“Employee” means any person employed by the Company as an active regular
common-law employee who is recognized as such on 3M’s human resources/payroll
systems; including such persons who are United States citizens but on
assignment outside of this country and resident aliens employed in the United
States; but excluding any person covered by a collective bargaining agreement
to which the Company is a party.

 

2.11         GROWTH FACTOR.  “Growth Factor” is the annual rate at which
interest will be credited to (i) Participants’ Accounts for Class Year
2004 and all Class Years prior thereto in accordance with the provisions
of Article 6, and (ii) that portion of each Participant’s Accounts
for Class Year 2005 and all Class Years and Class Periods
thereafter which such Participant elects to allocate to the investment fund
whose rate of return is based on such Growth Factor. Unless and until changed
by the Committee, the Growth Factor applied during each calendar year will be
the average Citigroup 10 Year AAA Industrial Corporate Bond Rating for New
Issues for the four week period ending with the last week ending in October of
the previous year.

 

2.12         PARTICIPANT.  “Participant” means any Employee who has
elected to make contributions to this Plan after satisfying the eligibility
requirements of Section 4.1.

 

2.13         PLAN. 
“Plan” means the plan described in this document, as it may be amended
from time to time.  The official name of
the Plan shall be the 3M Performance Awards Deferred Compensation Plan.

 

2.14         PLAN ADMINISTRATOR.  “Plan Administrator” means the person to whom
the Committee has delegated the authority and responsibility for administering
the Plan.  Unless and until changed by
the Committee, the Plan Administrator of the Plan shall be 3M’s Vice President,
Compensation and Benefits or his or her successor.

 

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.

 

2.16         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 

 

2

 

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.

 

2.17         SPECIFIED EMPLOYEE.  “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.

 

2.18         3M. 
“3M” means 3M Company, a Delaware corporation.

 

2.19         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).

 

2.20         VALUATION DATE.  “Valuation Date” means each day that all or
substantially all of the U.S. and international financial markets in which the
VIP’s assets are invested are open for trading.

 

2.21         VIP. 
“VIP” means the 3M Voluntary Investment Plan and Employee Stock
Ownership Plan, as it may be amended from time to time.

 

ARTICLE 3

 

Effective Date

 

The original effective
date of this Plan was September 1, 1985 (with calendar year 1986 as the
first Class Year for which voluntary deferrals were permitted under the
Plan).  The provisions of this restated
Plan shall take effect for Class Periods beginning on and after January 1,
2010.  This Plan shall continue in
operation and effect until 3M terminates it in accordance with the provisions
of Section 10.2.

 

ARTICLE 4

 

Eligibility and Participation

 

4.1           ELIGIBILITY.  Each management employee of the Company
subject to U.S. income taxation shall be eligible to participate in the Plan
for a Class Period if immediately prior to such Class Period such
employee is both employed in a Leadership (L2, L1 or CEO) job level position
and eligible to receive long-term performance awards under the 3M 2008
Long-Term Incentive Plan.

 

4.2           ELECTION TO CONTRIBUTE.  In order to make contributions under the Plan
for any Class Period, an Employee who meets the eligibility requirements
of Section 4.1 must elect to participate via the Plan’s Internet site or
via such other method as shall be established by the Plan Administrator.  To be effective, an Employee’s election to
participate for a Class Period must specify the percentage of his or her
Eligible Compensation to be deferred, select the time and form of payment of
the amount deferred and the earnings thereon, specify the investment fund or
funds in which such deferred amounts are to be treated as being invested, and
provide such other information as the Plan Administrator may require.  The time period during which elections to
participate will be accepted for each Class Period will be established by
the Plan Administrator, but in no event will any election be accepted after the
effective date of the long-term performance awards (which are intended to be “performance-based
compensation” within the meaning of Treas. Reg. section 1.409A-1(e)(1)) to
which such election relates.

 

4.3           DURATION OF CONTRIBUTION ELECTION.  Each eligible Employee’s election to make
contributions to the Plan made in accordance with the requirements of Section 4.2
shall apply solely to Eligible 

 

3

 

Compensation
earned for the Class Period to which it relates, and not to Eligible
Compensation earned for any other Class Period; provided, however, that
such election shall apply to any Eligible Compensation paid after the end of a Class Period
if such Eligible Compensation was earned during such Class Period.  Participants may not change or revoke their
contribution elections for a Class Period after the enrollment period for
the Class Period has ended.

 

4.4           DURATION OF PARTICIPATION.  A Participant’s participation in the Plan
shall continue until all amounts credited to his or her Accounts have been
distributed, or until the Participant’s death, if earlier.

 

4.5           WAIVER OF ELECTION.  The Committee may, in its sole discretion,
grant a waiver or suspension of a Participant’s election to make contributions
for a Class Period, for such time as the Committee may deem necessary,
upon a finding that the Participant has suffered an Unforeseeable Financial
Emergency.

 

ARTICLE 5

 

Contributions

 

5.1           PARTICIPANT CONTRIBUTIONS.  A Participant may contribute (defer) up to
100 percent (but only a whole percentage) of his or her Eligible Compensation
earned during the Class Period to which such Participant’s election
relates; provided, however, that the maximum amount of any Eligible
Compensation payment that may be deferred by a Participant shall be limited to
the amount otherwise payable to such Participant after the deduction of the
appropriate withholding taxes.  The percentage
the Participant elects to contribute (defer) shall be deducted from each
payment of such Participant’s Eligible Compensation earned during such Class Period,
whether paid during or following such Class Period.

 

5.2           AMOUNTS CREDITED TO ACCOUNT.  For each Participant and each Class Period
that the Participant elects to defer Eligible Compensation hereunder the
Company shall establish on its books an Account (a Deferred Share Account if
the Eligible Compensation consists of performance shares granted under the 3M
2008 Long-Term Incentive Plan, or a Deferred Income Account if the Eligible
Compensation consists of performance units granted under the 3M 2008 Long-Term
Incentive Plan), to which the amounts deferred in accordance with Section 5.1
shall be credited at such times as are in accordance with the standard payroll
procedures of the Company.  The amount
credited to a Participant’s Account shall equal the amount deferred, except
that the amount credited may be reduced, at the discretion of the Committee, to
the extent that the Company is required to withhold any taxes or other amounts
from the Participant’s deferred compensation pursuant to any federal, state or
local law.

 

ARTICLE 6

 

Accounts

 

6.1           EARNINGS ON ACCOUNTS.  (a) Each Participant’s Deferred Income
Accounts shall be credited with investment earnings or losses based on the
performance of (i) for Class Year 2004 and Class Years prior
thereto, the Growth Factor, and (ii) for Class Year 2005 and Class Years
and Class Periods subsequent thereto, the Growth Factor and the VIP
investment funds selected by such Participant at the time he or she elected to
participate in the Plan or subsequent thereto. 
The investment funds available to the Participants in the Plan with
respect to Deferred Income Accounts for Class Years and Class Periods
beginning with 2005 and thereafter will be the Growth Factor and the same
investment funds available to the participants in the VIP, excluding the 3M
Stock Fund and the VIP’s brokerage window. 
Participants may allocate the amounts credited to their Deferred Income
Account(s) for Class Years and Class Periods beginning with 2005
and thereafter among such investment funds in whole percentages of from one
percent to one hundred percent.  The
deemed investment earnings or losses on such VIP funds for purposes of this
Plan shall equal the actual rate of return on such funds in the VIP net of any
fees or expenses chargeable thereto, including but not limited to management
fees, trustee fees, recordkeeping fees and other administrative expenses.  In the event that a Participant fails to
select the investment fund or funds in which his or her Deferred Income
Accounts are deemed to be invested, such Participant will be deemed to have
allocated the entire amount credited to his or her Deferred Income Accounts to
the LifePath Portfolio fund with the target retirement year closest to the year
in which such Participant will attain age 65.

 

(b)  Each
Participant’s Deferred Share Account(s) shall be credited with the return
on shares of 3M common stock, including reinvested dividends.

 

4

 

6.2           CHANGES IN INVESTMENT FUND
ALLOCATIONS.  For Class Years and Class Periods
beginning with 2005 and thereafter, Participants may change the investment
funds among which their Deferred Income Account balances or future
contributions are allocated at any time, subject to such rules as may be
established by the Plan Administrator. 
Allocation changes may only be made using the Plan’s Internet site or by
speaking with a representative of the Plan’s recordkeeper.  No investment fund changes may be made at any
time with respect to Deferred Income Accounts for Class Year 2004 or Class Years
prior thereto, or with respect to Deferred Share Accounts.

 

6.3           VALUATION OF ACCOUNTS.  The Accounts of all Participants shall be
revalued as of each Valuation Date.  As
of each Valuation Date, the value of a Participant’s Account shall consist of
the balance of such Account as of the immediately preceding Valuation Date,
increased by the amount of any contributions made and credited thereto since
the immediately preceding Valuation Date, increased or decreased (as the case
may be) by the amount of deemed investment earnings or losses credited to the
investment funds selected by the Participant (or to the Growth Factor, in the
case of Deferred Income Accounts for Class Year 2004 and Class Years
prior thereto, or to the return on shares of 3M common stock, including
reinvested dividends, in the case of Deferred Share Accounts) since the
immediately preceding Valuation Date, and decreased by the amount of any
distributions made from such Account since the immediately preceding Valuation
Date.

 

6.4           VESTING OF ACCOUNTS.  A Participant shall always be 100% vested in
the value of his or her Accounts (including any earnings thereon).

 

6.5           STATEMENT OF ACCOUNTS.  As soon as administratively feasible
following the end of each calendar year, the Plan shall deliver to each
Participant a statement of his or her Accounts in the Plan.

 

ARTICLE 7

 

Distribution of Accounts

 

7.1           DISTRIBUTION DATE AND METHOD.  As part of the election to participate herein
for each Class Period, the Participant shall specify the date (hereinafter
referred to as the “Distribution Date”) upon which the Company will commence
payment of the amounts credited to the respective Account and the method of
paying such amounts.  A Participant must
select one of the following Distribution Dates:

 

(a)           During
the month of January of any calendar year following the end of the year
following the end of the Class Period to which such Participant’s election
to defer Eligible Compensation relates; or

 

(b)           During
the month of January of any one of the first through the tenth calendar
years following the Participant’s Retirement from service with the Company.

 

A participant must also select one of the
following methods of payment in each election to participate herein:

 

(c)           A
single lump sum distribution; or

 

(d)           Ten or fewer
annual installments (the amount of such installment payments shall be computed
by multiplying the balance in the Account on each date of payment by a
fraction, the numerator of which is one and the denominator of which equals the
remaining number of scheduled annual installment payments).

 

No Participant’s election to participate
for any Class Period shall require the Plan to make any payment more than
10 years after the month of January of the calendar year following the
Participant’s Retirement from service with the Company.  Each payment from a Participant’s Deferred
Income Account shall be made in cash, and shall be charged against the balance
in such Deferred Income Account.  Each
payment from a Participant’s Deferred Share Account shall be made in whole
shares of 3M common stock and cash for any fractional share, and shall be
charged against the balance in such Deferred Share Account.  When the Plan makes a distribution of less
than the entire balance of a Participant’s Deferred Income Account attributable
to Class Year 2005 or any Class Year or Class Period thereafter,
the distribution shall be charged pro rata against each of the investment funds
to which the Deferred Income Account is then allocated.

 

5

 

7.2           DISTRIBUTION WHILE STILL AN
EMPLOYEE.  If a Participant is still
employed by the Company at the Distribution Date for any Account, the entire
balance of such Account at the Distribution Date (plus any deemed investment
earnings or losses credited to such Account thereafter) shall be paid to the
Participant commencing on such date and in accordance with the method of
payment chosen by the Participant.

 

7.3           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 value of such Participant’s Accounts shall be determined no
later than the Valuation Date immediately following the date of the Separation
from Service and shall be paid to the Participant in a lump sum distribution
within 90 days following the Separation from Service date; provided however, that
for Deferred Income Accounts and Deferred Share Accounts attributable to Class Year
2002 and all Class Years and Class Periods thereafter, no
distribution shall be made prior to the six-month anniversary of the date of
the Participant’s Separation from Service.

 

7.4           DISTRIBUTION FOLLOWING RETIREMENT.  If a Participant Retires from service with
the Company prior to the Distribution Date for any Account, the entire balance
of such Account at the Distribution Date (plus any deemed investment earnings
or losses credited to such Account thereafter) shall be paid to the Participant
(or Beneficiary) commencing on such Distribution Date and in accordance with
the method of payment chosen by the Participant; provided, however, that, in
the event such Distribution Date would be less than six months following the
date of the Participant’s Retirement from service with the Company, such
Participant’s Distribution Date shall be and payment of such Account shall
begin during the month of July of the calendar year following the year in
which such Participant Retires from service with the Company; and provided
further, that in no event shall the portion of any Participant’s Deferred
Income Account(s) or Deferred Share Account(s) attributable to
deferred performance units or deferred performance shares be paid before the
corresponding payment date for such units or shares under the provisions of the
3M Performance Unit Plan or the 3M 2008 Long-Term Incentive Plan.

 

7.5           DISTRIBUTION FOLLOWING DEATH.  Upon the death of a Participant prior to the
Distribution Date for any Account, such Account shall be paid to the
Participant’s Beneficiary in accordance with Section 7.2 as if the
Participant had selected a Distribution Date of the day before the Participant’s
death.  Upon the death of a Participant
after the Distribution Date for any Account, the remaining balance of such
Account (if any) shall be paid to the Participant’s Beneficiary in accordance
with the method of payment chosen by the Participant.

 

7.6           UNFORESEEABLE FINANCIAL EMERGENCY
DISTRIBUTION.  Upon finding that a
Participant has suffered an Unforeseeable Financial Emergency, the Committee
may, in its sole discretion, permit the Participant to withdraw an amount from
his or her Account(s) sufficient to alleviate the emergency.

 

7.7           WITHHOLDING; PAYROLL TAXES.  To the extent required by the laws in effect
at the time any payment is made, the Plan shall withhold from any payment made
hereunder any taxes required to be withheld for federal, state or local
government purposes.

 

7.8           ONE-TIME OPPORTUNITY TO REVISE PAYMENT
ELECTIONS.  Prior to the end of 2008 and
during the time period established by the Plan Administrator, Participants who
have one or more Accounts under the Plan from which payments have not commenced
and who are still active employees of the Company may revise their elections
concerning the Distribution Date and method of paying their Account or Accounts
for any or all Class Years subject to the following conditions:

 

(a)           each
revised election must be consistent with the requirements of Section 7.1,
in terms of both the method of payment and the Distribution Date for payments
to commence;

 

(b)           no
revised election may result in the deferral of payments that would otherwise
have commenced in 2008; and

 

(c)           no
revised election may result in the commencement of payments during 2008 that
would not otherwise have commenced during such year.

 

6

 

ARTICLE 8

 

Designation of Beneficiaries

 

8.1           BENEFICIARY DESIGNATION.  Each Participant shall have the right at any
time to designate any person, persons, or entity, as Beneficiary or
Beneficiaries to whom payment of the Participant’s remaining Accounts shall be
made in the event of the Participant’s death. 
Any designation made under the Plan may be revoked or changed by a new
designation made prior to the Participant’s death.  Any such designation or revocation must be
made in accordance with the rules established by the Plan Administrator,
and will not be effective until received by the Plan.

 

8.2           BENEFICIARY PREDECEASES PARTICIPANT.  If a Participant designates more than one
Beneficiary to receive such Participant’s Account(s) and any Beneficiary
shall predecease the Participant, the Plan shall distribute the deceased
Beneficiary’s share to the surviving Beneficiaries proportionately, as the
portion designated by the Participant for each bears to the total portion
designated for all surviving Beneficiaries.

 

8.3           ABSENCE OF EFFECTIVE DESIGNATION.  If a Participant makes no designation or
revokes a designation previously made without making a new designation, or if
all persons designated shall predecease the Participant, the Plan shall
distribute the balance of the deceased Participant’s Account(s) in the
manner determined in accordance with the Participant’s designation in effect
under the VIP.  In the event such
Participant has no effective designation under the VIP, the Plan shall
distribute the balance of the deceased Participant’s Account(s) to the
first of the following survivors:

 

(a)           The Participant’s spouse;

 

(b)           Equally to the Participant’s children;

 

(c)           Equally to the Participant’s parents;

 

(d)           Equally to the Participant’s brothers and
sisters; or

 

(e)           The Participant’s estate executors or
administrators.

 

8.4           DEATH OF BENEFICIARY.  If a Beneficiary to whom payments hereunder
are to be made pursuant to the foregoing provisions of this Article 8
survives the Participant but dies prior to complete distribution to the
Beneficiary of the Beneficiary’s share:

 

(a)           unless
the Participant has otherwise specified in his or her designation, the Plan
shall distribute the undistributed portion of such Beneficiary’s share to such
person or persons, including such Beneficiary’s estate, as such Beneficiary
shall have designated in a designation made with the Plan prior to such
Beneficiary’s death (which designation shall be subject to change or revocation
by such Beneficiary at any time); or

 

(b)           if
the Participant’s designation specifies that such Beneficiary does not have the
power to designate a successor Beneficiary or if such Beneficiary is granted
such power but fails to designate a successor Beneficiary prior to such
Beneficiary’s death, the Plan shall distribute the undistributed portion of
such Beneficiary’s share to such Beneficiary’s estate.

 

8.5           BENEFICIARY DISCLAIMER.  Notwithstanding the foregoing provisions of
this Article 8, in the event a Beneficiary, to whom payments hereunder
would otherwise be made, disclaims all or any portion of that Beneficiary’s
interest in such payments, such disclaimed portion of such Beneficiary’s
interest in such payments shall pass to the person or persons specified by the
Participant to take such disclaimed interest. 
In the event the Participant did not specify a person or persons to take
disclaimed interests, such disclaimed portion of such Beneficiary’s interest in
such payments shall pass to the person or persons who would be entitled thereto
pursuant to the Participant’s designation or the designation made with respect
to the VIP referenced above, whichever is applicable pursuant to the foregoing
provisions of this Article 8, if such Beneficiary had died immediately
preceding the death of the Participant.

 

7

 

ARTICLE 9

 

Unfunded
Plan

 

9.1           NO
TRUST.  This Plan is intended to be an “unfunded”
plan of deferred compensation for the Participants.  As such, the benefits payable under this Plan
will be paid solely from the general assets of the Company.  The Company does not intend to create any
trust in connection with this Plan.  The
Company shall not have any obligation to set aside funds or make investments in
the investment funds referred to in Article 6.  The Company’s obligations under this Plan
shall be merely that of an unfunded and unsecured promise to pay money in the
future.

 

9.2           UNSECURED
GENERAL CREDITOR.  No Participant or
Beneficiary shall have any right to receive any benefit payments from this Plan
except as provided in Articles 7 and 8. 
Until such payments are received, the rights of each Participant and
Beneficiary under this Plan shall be no greater than the rights of a general
unsecured creditor of the Company.

 

ARTICLE 10

 

Amendment and Termination of the
Plan

 

10.1         RIGHT TO AMEND.  3M or the Committee may at any time amend or
modify the Plan in whole or in part; provided, however, that no amendment or
modification shall adversely affect the rights of any Participant or
Beneficiary acquired under the terms of the Plan as in effect prior to such
action.  The consent of any Participant,
Beneficiary, employer or other person shall not be a requisite to such
amendment or modification of the Plan.

 

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 the 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 or shares of 3M common stock to the respective Participants
and Beneficiaries the entire remaining balances of the Accounts.

 

8

 

ARTICLE 11

 

General Provisions

 

11.1         NONASSIGNABILITY.  Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate or convey in advance of
actual receipt the amounts, if any, payable hereunder.  All payments and the rights to all payments
are expressly declared to be nonassignable and nontransferable.  No part of the amounts payable hereunder
shall, prior to actual payment, be subject to seizure or sequestration for the
payment of any debts, judgments or decrees, or transferred by operation of law
in the event of a Participant’s or any Beneficiary’s bankruptcy or
insolvency.  No part of any Participant’s
Account(s) may be assigned or paid to such Participant’s spouse in the
event of divorce pursuant to a domestic relations order.

 

11.2         NOT A CONTRACT OF EMPLOYMENT.  The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between the Company and
any Participant, and the Participants (or their Beneficiaries) shall have no
rights against the Company except as may otherwise be specifically provided
herein.  Moreover, nothing in this Plan
shall be deemed to give any Participant the right to be retained in the
employment of the Company or to interfere with the right of the Company to
discipline or discharge such Participant at any time for any reason whatsoever.

 

11.3         TERMS. 
Wherever any words are used herein in the singular or in the plural,
they shall be construed as though they were used in the plural or in the
singular, as the case may be, in all cases where they would so apply.

 

11.4         CAPTIONS. 
The captions of the articles and sections of this Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.

 

11.5         GOVERNING LAW.  The provisions of this Plan shall be
construed and interpreted according to the laws of the State of Minnesota.

 

11.6         VALIDITY. 
In case any provision of this Plan shall be ruled or declared invalid
for any reason, said illegality or invalidity shall not affect the remaining
parts hereof, but this Plan shall be construed and enforced as if such illegal
or invalid provision had never been inserted herein.

 

11.7         CLAIMS PROCEDURE.  Any Participant or Beneficiary who disagrees
with any decision regarding his or her benefits under this Plan shall submit a
written request for review to the Plan Administrator.  The Plan Administrator shall respond in
writing to such a request within 60 days of his or her receipt of the
request.  The Plan Administrator may,
however, extend the reply period for an additional 60 days for reasonable
cause.  The Plan Administrator’s response
shall be written in a manner calculated to be understood by the Participant or
Beneficiary, and shall set forth:

 

(a)           the
specific reason or reasons for any denial of benefits;

 

(b)           specific
references to the provision or provisions of this Plan on which the denial is
based;

 

(c)           a description
of any additional information or material necessary for the Participant or
Beneficiary to improve his or her claim, and an explanation of why such
information or material is necessary; and

 

(d)           an explanation
of the Plan’s claims review procedure and other appropriate information as to
the steps to be taken if the Participant or Beneficiary wishes to appeal the
Plan Administrator’s decision.

 

If the Participant or Beneficiary
disagrees with the decision of the Plan Administrator, he or she shall file a
written appeal with the Committee within 120 days after receiving the Plan
Administrator’s response. The Committee shall respond in writing to such an
appeal within 90 days of its receipt of the appeal.  The Committee may, however, extend the reply
period for an additional 90 days for reasonable cause.  The Committee’s response shall be written in
a manner calculated to be understood by the Participant or Beneficiary, and
shall both set forth the specific reasons for its decision and refer to the
specific provision or provisions of the Plan on which its decision is based.

 

9

 

11.8         SUCCESSORS.  The
provisions of this Plan shall bind and inure to the benefit of the Company and
its successors and assigns.  The term
successors as used herein shall include any corporation or other business
entity which shall, whether by merger, consolidation, purchase or otherwise,
acquire substantially all of the business and assets of the Company, and
successors of any such corporation or other business entity.

 

11.9         INCOMPETENT.  In the event that it shall be found upon
evidence satisfactory to the Plan Administrator that any Participant or
Beneficiary to whom a benefit is payable under this Plan is unable to care for
his or her own affairs because of illness or accident, any payment due (unless
prior claim therefore shall have been made by a duly authorized guardian or
other legal representative) may be paid, upon appropriate indemnification of
the Plan, to the spouse or other person deemed by the Plan Administrator to
have accepted responsibility for such Participant or Beneficiary.  Any such payment made pursuant to this Section 11.9
shall be in complete discharge of any liability therefore under this Plan.

 

11.10       INDEMNIFICATION.  To the extent permitted by law, the Company
shall indemnify the Plan Administrator and the members of the Committee against
any and all claims, losses, damages, expenses and liability arising from their
responsibilities or the performance of their duties in connection with the Plan
which is not covered by insurance paid for by the Company, unless the same is
determined to be due to gross negligence or intentional misconduct.

 

ARTICLE 12

 

Change in Control

 

12.1         TERMINATION UPON CHANGE IN CONTROL.  This Plan shall terminate and the Plan shall
immediately distribute in cash or shares of 3M common stock to the respective
Participants the amounts credited to all Accounts upon the occurrence of a
Change in Control of 3M.

 

12.2         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 in Treas.
Reg. section 1.409A-3(i)(5) or such other regulation or guidance issued
under section 409A of the Code.

 

12.3         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
and expenses incurred by such Participant in connection with such Participant’s
receipt of payments pursuant to this Article 12.  Payment of these legal and accounting fees,
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 the Participant
incurs these fees and expenses.  If a
Participant is a Specified Employee and such 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.

 

10

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