Document:

Exhibit 10.2

 

AMENDMENT OF THE

3M 2008 LONG-TERM INCENTIVE PLAN

 

WHEREAS, 3M has adopted
and maintains the 3M 2008 Long-Term Incentive Plan (hereinafter referred to as
the “Plan”), which Plan is intended to provide long-term incentive compensation
to certain employees of the Company and its Affiliates as well to the
nonemployee members of the 3M Board of Directors;

 

WHEREAS, the Company
wishes to include in the Plan language prohibiting the repricing or exchange of
stock options without stockholder approval;

 

WHEREAS, the Company
wishes to revise the Plan’s change in control provisions to remove language
permitting the payment of tax gross-ups for excise taxes, and to replace the
single trigger for vesting of equity awards with a double trigger effective for
awards made on or after February 9, 2010;

 

WHEREAS, the Company also
wishes to make several other minor changes in the language of the Plan for the
purpose of clarifying or conforming the Plan provision’s with its current
operation, or to reflect current best practices for equity compensation plans;
and

 

WHEREAS, Section 16
of the Plan provides that such Plan may be amended at any time by the Board of
Directors;

 

RESOLVED, that the Plan
be and it hereby is amended as follows, effective immediately:

 

1)             Section 2(g) is amended to read
as follows:

 

(g)                                 “Disqualifying Termination” means a
termination of a Participant’s employment with the Company or an Affiliate due
to (i) a material violation of any policy of the Company or such
Affiliate, including, without limitation, any of the Company’s Business Conduct
Policies, or (ii) embezzlement from or theft of property belonging to the
Company or such Affiliate.

 

2)             Section 2(q) is amended to read
as follows:

 

(q)                                 “Performance Period” means a period of
three years, unless determined otherwise by the Committee in its discretion,
during which period or any portion thereof the Performance Criteria shall be
measured for purposes of calculating the payment with respect to each
Performance Unit or Performance Share.

 

3)             The following Section 4(e) is
deleted:

 

(e)           The payment of stock dividends and
Dividend Equivalents settled in shares of Common Stock in conjunction with
outstanding Awards shall not be counted against the total number of shares
available for issuance or delivery under the Plan.

 

4)             Section 5(h) is amended to read
as follows:

 

(h)           Performance Units and Performance
Shares — At the time it approves each grant of Performance Units or Performance
Shares, the Committee shall determine the number of Performance Units or
Performance Shares granted to each Participant, the proration, if any, of such
Performance Units or Performance Shares if the Participant retires prior to the
completion of the relevant Performance Period, the commencement and expiration
of the relevant Performance Period, and the Performance Criteria by which the
payment value of the Performance Units or Performance Shares will be
determined.  Payment of each Performance
Unit and Performance Share shall occur no later than the March 15 of the
year immediately following the completion of the respective Performance Period,
unless a Participant shall have made an effective election to defer the receipt
of such payment pursuant to the terms of an applicable deferred compensation
plan and all applicable laws.  The amount
payable with respect to each Performance Unit and Performance Share shall be
contingent upon the attainment of the Performance Criteria selected by the

 

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Committee during the
respective Performance Period, and upon the continued employment of the
Participant throughout such Performance Period (or upon the Participant’s
Retirement prior to the end of such Performance Period).

 

5)             The following new sentence is included at
the end of Section 9:

 

Except for adjustments
made in accordance with Section 11, no Options granted under this Plan may
be repriced or exchanged for another Award granted under this Plan without the
prior approval of the Company’s stockholders.

 

6)             Section 17 is amended to read as
follows:

 

17.          Change in Control.

 

For purposes of this Section 17,
the following words and phrases shall have the meanings indicated below, unless
the context clearly indicates otherwise:

 

(a)           “Person” shall have the meaning
associated with that term as it is used in Sections 13(d) and 14(d) of
the Act.

 

(b)           “Affiliates and Associates” shall
have the meanings assigned to such terms in Rule 12b-2 promulgated under Section 12
of the Act.

 

(c)           “Act” means the Securities Exchange
Act of 1934.

 

(d)           “Continuing Directors” shall have the
meaning assigned to such term in Article Thirteenth of the Restated
Certificate of Incorporation of 3M Company.

 

(e)           “Cause” means (i) a material
violation of any policy of the Company or the Affiliate employing the Participant,
including, without limitation, any of the Company’s Business Conduct Policies,
or (ii) embezzlement from or theft of property belonging to the Company or
the Affiliate employing the Participant.

 

(f)            “Good Reason” means (i) a
material diminution in the Participant’s position, authority, duties or
responsibilities as in effect immediately prior to the Change in Control, (ii) a
material diminution in the Participant’s base salary or annual planned cash
compensation, or (iii) a material change in the geographic location at
which the Participant is required to perform services for the Company or the
Affiliate employing such Participant.

 

Notwithstanding any other
provision of this Plan to the contrary, all outstanding Options and Stock
Appreciation Rights with a Grant Date prior to February 9, 2010 shall (i) become
immediately exercisable in full for the remainder of their respective terms
upon the occurrence of a Change in Control of the Company, and (ii) remain
exercisable in full for a minimum period of six months following the Change in
Control; provided, however, that in no event shall any Option or Stock
Appreciation Right be exercisable beyond the original expiration date.  Similarly, all restrictions regarding the
Restricted Period or the satisfaction of other terms and conditions prescribed
by the Committee, if any, with respect to grants of Restricted Stock,
Restricted Stock Units or other Stock Awards with a Grant Date prior to February 9,
2010, shall automatically lapse, expire, and terminate and the Participant
shall be immediately entitled to receive a stock certificate for the number of
shares of Common Stock represented by the Restricted Stock, Restricted Stock
Units or Stock Awards upon the occurrence of a Change in Control.

 

Notwithstanding any other
provision of this Plan to the contrary, if a Participant’s employment with the
Company or an Affiliate is terminated without Cause or if the Participant
resigns for a Good Reason within eighteen months following a Change in Control
of the Company, then all of such Participant’s outstanding Options and Stock
Appreciation Rights with a Grant Date of February 9, 2010 or later shall
become immediately exercisable in full for the remainder of their respective
terms and shall remain exercisable in full for a minimum of six months
following the date of such termination or resignation; provided, however, that
in no event shall any Option or Stock Appreciation Right be exercisable beyond
the original expiration date.  Similarly,
all restrictions regarding the Restricted Period or the satisfaction of other
terms and conditions prescribed by the Committee, if 

 

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any, with respect to
grants of Restricted Stock, Restricted Stock Units or other Stock Awards with a
Grant Date of February 9, 2010 or later, shall automatically lapse, expire
and terminate and the Participant shall be immediately entitled to receive a
stock certificate for the number of shares of Common Stock represented by the
Restricted Stock, Restricted Stock Units or Stock Awards upon the termination
without Cause of the Participant’s employment with the Company or an Affiliate
or the Participant’s resignation for Good Reason within eighteen months
following a Change in Control of the Company.

 

Notwithstanding any other
provision of this Plan to the contrary, all outstanding Options and Stock
Appreciation Rights shall become immediately exercisable in full and remain
exercisable in full for a minimum period of six months following a Change in
Control in which the individuals or entities acquiring control of the Company
do not assume or otherwise provide for the continuation of such Options and
Rights for at least such six-month period; provided, however, that in no event
shall any Option or Stock Appreciation Right be exercisable beyond the original
expiration date.  Similarly, all
restrictions regarding the Restricted Period or the satisfaction of other terms
and conditions prescribed by the Committee, if any, with respect to grants of
Restricted Stock, Restricted Stock Units or other Stock Awards shall
automatically lapse, expire, and terminate and the Participant shall be
immediately entitled to receive a stock certificate for the number of shares of
Common Stock represented by the Restricted Stock, Restricted Stock Units or
Stock Awards upon the occurrence of a Change in Control in which the
individuals or entities acquiring control of the Company do not assume or
otherwise provide for the continuation of such Restricted Stock, Restricted
Stock Units and other Stock Awards.

 

Notwithstanding any other
provision of this Plan to the contrary, upon the occurrence of a Change in
Control of the Company each Performance Period shall end and the Company shall
immediately distribute in cash or shares of Common Stock, as appropriate, to
the respective Participants the value of all outstanding Performance Shares and
Performance Units granted under this Plan with a Grant Date prior to February 9,
2010, as determined in accordance with the following rules:

 

(w)  With respect to
those Performance Shares or Performance Units for which the Performance Period
had not been completed prior to the Change in Control of the Company, the value
of such Shares or Units for purposes of this Section 17 shall be equal to
the product of a fraction, where the numerator of such fraction is the number
of full calendar months completed during the respective Performance Period and
prior to the Change in Control and the denominator of such fraction is the
total number of months in such Performance Period, multiplied by the largest
of:

 

•                                        the value of such Performance Shares or
Performance Units computed as if the Company’s performance during the remainder
of the Performance Period following the Change in Control equaled its
performance during those full calendar quarters completed during the respective
Performance Period and prior to the date of the Change in Control;

 

•                                        the value of such Performance Shares or
Performance Units computed as if the Performance Period for such Shares or
Units was the three consecutive calendar year period ending immediately prior
to the year in which the Change in Control occurs; or

 

•                                        any other amount approved, in its
discretion, by the Committee.

 

(x)  With respect to
those Performance Shares or Performance Units for which the Performance Period
has been completed at the time of a Change in Control of the Company, the value
of such Shares or Units for purposes of this Section 17 shall be the
actual value as adjusted to reflect the actual Company performance during the
Performance Period.

 

Notwithstanding any other
provision of this Plan to the contrary, if a Participant’s employment with the
Company or an Affiliate is terminated without Cause or if the Participant
resigns for a Good Reason within eighteen months following a Change in Control
of the Company, then with respect to such Participant each Performance Period
shall end and the Company shall immediately distribute in cash or shares of
Common Stock, as appropriate, to such Participant the value of all outstanding 

 

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Performance Shares and
Performance Units granted under this Plan with a Grant Date of February 9,
2010 or later, as determined in accordance with the following rules:

 

(y)  With respect to
those Performance Shares or Performance Units for which the Performance Period
had not been completed prior to the Participant’s termination or resignation,
the value of such Shares or Units for purposes of this Section 17 shall be
equal to the product of a fraction, where the numerator of such fraction is the
number of full calendar months completed during the respective Performance
Period and prior to the termination or resignation and the denominator of such
fraction is the total number of months in such Performance Period, multiplied
by the largest of:

 

•                                        the value of such Performance Shares or
Performance Units computed as if the Company’s performance during the remainder
of the Performance Period following the termination or resignation equaled its
performance during those full calendar quarters completed during the respective
Performance Period and prior to the date of the termination or resignation;

 

•                                        the value of such Performance Shares or
Performance Units computed as if the Performance Period for such Shares or
Units was the three consecutive calendar year period ending immediately prior
to the year in which the termination or resignation occurs; or

 

•                                        any other amount approved, in its
discretion, by the Committee.

 

(z)  With respect to
those Performance Shares or Performance Units for which the Performance Period
has been completed by the time of the Participant’s termination or resignation,
the value of such Shares or Units for purposes of this Section 17 shall be
the actual value as adjusted to reflect the actual Company performance during
the Performance Period.

 

For purposes of this Section 17,
a Change in Control of the Company shall be deemed to have occurred only if a “change
in the ownership” or a “change in effective control” and/or a “change in the
ownership of a substantial portion of the assets” of the Company has taken
place (as those terms are defined in Treasury Regulations §1.409A-3(i)(5) or
such other regulation or guidance issued under section 409A of the Code.

 

The Company shall pay to
each Participant the amount of all reasonable legal and accounting fees and
expenses incurred by such Participant in seeking to obtain or enforce his or
her rights under this Section 17, or in connection with any income tax
audit or proceeding to the extent attributable to the application of section
4999 of the Code to the payments made pursuant to this Section 17, unless
a lawsuit commenced by the Participant for such purposes is dismissed by the
court as being frivolous or otherwise improper under applicable court
rules.  The Company shall also pay to
each Participant the amount of all reasonable tax and financial planning fees
and expenses incurred by such Participant in connection with such Participant’s
receipt of payments pursuant to this Section 17.  Payment of these legal and accounting fees
and expenses, as well as these tax and financial planning fees and expenses,
shall be made as soon as administratively feasible, but no later than two and
one-half months following the end of the Participant’s taxable year in which
these fees and expenses have been incurred.

 

4Exhibit 10.4

 

This document constitutes part of a prospectus
covering securities that 

have been registered under the Securities Act of 1933.

 

3M COMPANY

3M 2008 LONG-TERM INCENTIVE PLAN

 

STOCK OPTION AGREEMENT

FOR U.S. EMPLOYEES

 

[PARTICIPANT NAME]

 

1.  Grant of Option.  This Agreement confirms that on [GRANT DATE] (the “Grant
Date”), 3M Company (the “Company”) granted you
a Nonqualified Stock Option (the “Option”) to purchase [NUMBER OF SHARES
GRANTED] shares of Common Stock of the Company at the exercise price of [GRANT
PRICE] per share (the “Exercise Price”), subject to the terms and conditions of
this Agreement and the 2008 Long-Term Incentive Plan (the “2008 Plan”).

 

2.  Definitions.  Capitalized terms used and not
defined herein shall have the same meaning as in the 2008 Plan.

 

3.  Vesting and Term of Option.  Your Option will vest over three years, as
long as you remain continuously employed by the Company or an Affiliate from
the Grant Date until each vesting date or if you die or Retire before any such
date.  This means that you may exercise
the first one-third of the shares subject to this Option on or after the first
anniversary of the Grant Date, the second one-third of these shares on or after
the second anniversary of the Grant Date, and the remaining one-third of these
shares on or after the third anniversary of the Grant Date, assuming continued
employment.  However, you will be
required to accept this Option as well as this Agreement before being permitted
to exercise the Option.  This Option will
expire on and may not be exercised after the earlier of the tenth anniversary
of the Grant Date or the 90th day following the end of your 3M employment,
except in cases of Retirement, death, disability, Disqualifying Termination or
a termination in connection with which you execute a written release of
employment-related claims in favor of the Company that provides (with the
approval of the Company) for the nonforfeiture of stock options (but only to
the extent this Option has vested prior to the date of the termination of your
employment).

 

4.  Nature of Grant. 
In accepting the grant of this Option, you acknowledge that:

 

(a)           the 2008 Plan is established
voluntarily by the Company, it is discretionary in nature and it may be
modified, amended, suspended or terminated by the Company at any time, unless
otherwise provided in the 2008 Plan;

 

(b)           the grant of the Option is voluntary
and occasional and does not create any contractual or other right to receive
future grants of options, or benefits in lieu of options, even if options have
been granted repeatedly in the past;

 

(c)           all decisions with respect to future
option grants, if any, will be at the sole discretion of the Compensation
Committee of the 3M Board of Directors;

 

(d)           your participation in the 2008 Plan
shall not create a right to further employment with your employer and shall not
interfere with the ability of your employer to terminate your employment
relationship at any time with or without cause;

 

1

 

This document constitutes part of a prospectus
covering securities that 

have been registered under the Securities Act of 1933.

 

(e)           the Option is not part of your
regular or expected compensation for any purpose, including, but not limited
to, calculating any severance payments, bonuses, life insurance, disability,
pension or retirement benefits or similar payments;

 

(f)            the Company is not providing any
tax, legal or financial advice, nor is the Company making any recommendations
regarding your participation in the 2008 Plan, or your acquisition or sale of
the underlying shares of Common Stock;

 

(g)           this
Option may only be exercised during a time when the New York Stock Exchange (or
any successor thereto) is open for trading; and

 

(h)           you
are hereby advised to consult with your own personal tax, legal and financial advisors
regarding your participation in the 2008 Plan before taking any action related
to the 2008 Plan.

 

5.  Transferability. 
This Option is not transferable except in the event of your death, in
accordance with the provisions of Section 13 of the 2008 Plan.

 

6.  Governing Law. 
This Option and the provisions of this Agreement are governed by, and
subject to, the laws of the State of Delaware, as provided in the 2008 Plan.

 

For purposes of
litigating any dispute that arises concerning the grant of this Option or this
Agreement, you and the Company agree and consent to the jurisdiction of the
State of Minnesota, and agree that such litigation shall be conducted in the
courts of Ramsey County, Minnesota, or the federal courts for the United States
for the District of Minnesota, where this grant is made and/or to be performed.

 

7.  Entire Agreement.  The 2008 Plan and this Agreement constitute the
entire agreement of the parties and supersede all prior undertakings and
agreements with respect to the subject matter contained herein.

 

By
accepting the grant of this Option, you agree to all of the terms and
conditions described above and in the 2008 Plan.

 

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