Document:

Exhibit 10.4

 

AMENDMENT OF 3M DEFERRED COMPENSATION PLAN —

409A Compliance

 

                WHEREAS, 3M has adopted and maintains the 3M Deferred
Compensation Plan (the “Plan”), which Plan is intended to allow management
employees of the Corporation to increase their long-term financial security by
deferring the receipt of a portion of their compensation;

 

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

 

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

 

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

 

Effective
January 1, 2009, this Plan was amended. 
The 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.

 

2)                                     Paragraph
2.5 is amended to read as follows:

 

2.5                               COMPENSATION.  “Compensation” means the base salary, profit
sharing, annual incentive (excluding any portion of such annual incentive
payable in restricted stock units), Performance Units, Performance Shares or
other incentive payments that the Committee may include from time to time,
earned by a Participant during a Class Year before reduction for
compensation deferred pursuant to the Plan. 
With respect to Performance Units or Performance Shares granted under a
long-term 

 

 

                                                incentive
plan of 3M, a Participant shall be considered for purposes of this Plan to have
earned such Units or Shares during the Class Year that includes the first
year of the Performance Period for such Units or Shares.  However, “Compensation” shall exclude awards
(except Performance Units or Performance Shares), foreign service premiums and
allowances, stock option benefits, employer contributions to employee benefit
plans, reimbursements or payments in lieu thereof and like payments.

 

3)                                     Paragraph
2.13 is amended to read as follows:

 

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

 

4)                                     The
following new paragraph 2.16 is included in the Plan at the end of Article II
thereof:

 

2.16                        CODE.  “Code” means the Internal Revenue Code of
1954, as amended.

 

5)                                     The
following new paragraph 2.17 is included in the Plan at the end of Article II
thereof:

 

2.17                        RETIRE
OR RETIREMENT.  “Retire” or “retirement”
means an employee’s Separation from Service with the Employer after attaining the
age of 55 with at least five years of employment service or after attaining age
65.

 

6)                                     The
following new paragraph 2.18 is included in the Plan at the end of Article II
thereof:

 

2.18                        SEPARATION
FROM SERVICE.  “Separation from Service”
means a “separation from service” as defined in Treas. Reg. Section 1.409A-1(h)(1) or
such other regulation or guidance issued under section 409A of the Code.  Whether a Separation from Service has
occurred depends on whether the facts and circumstances indicate that 3M and
the Participant reasonably anticipated that no further services would be
performed after a certain date or that the level of bona fide services the
Participant would perform after such date (whether as an employee or
independent contractor) would permanently decrease to no more than twenty
percent (20%) of the average level of bona fide services performed (whether as
an employee or an independent contractor) over the immediately preceding
thirty-six (36) month period).  A
Separation from Service shall not be deemed to occur while the Participant is
on military leave, sick leave or other bona fide leave of absence if the period
does not exceed six (6) months or, if longer, so long as the Participant
retains a right to reemployment with 3M or an affiliate under an applicable
statute or by contract.  For this
purpose, a leave is bona fide only if, and so long as, there is a reasonable
expectation that the Participant will return to perform services for 3M or an
affiliate.  Notwithstanding the
foregoing, a 29 month 

 

 

                                                period
of absence will be substituted for such 6 month period if the leave is due to
any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of no
less than 6 months and that causes the Participant to be unable to perform the
duties of his or her position of employment.

 

7)                                     Paragraph
7.1(a) is amended to read as follows:

 

(a)                                 During
the month of January of any calendar year following the end of the year following
the Class Year during which deferred Compensation is credited to such
Account; provided, however, that with respect to elections to defer the payment
of Performance Unit or Performance Share awards, the available Distribution
Dates under this paragraph 7.1(a) shall be the month of January of
any calendar year following the end of the year following the end of the
Performance Period for the respective Performance Units or Performance Shares.

 

8)                                     Paragraph
7.3 is amended to read as follows:

 

7.3                               DISTRIBUTION
FOLLOWING SEPARATION FROM SERVICE.  If a
Participant incurs a Separation from Service 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 as soon as
administratively feasible; provided, however, that for Deferred Income Accounts
and Deferred Share Accounts attributable to Class Year 2002 and all Class Years
thereafter, no distribution shall be made prior to the six-month anniversary of
the date of the Participant’s Separation from Service.

 

9)                                     Paragraph
10.2 is amended to read as follows:

 

10.2                        TERMINATION.  While it expects to continue this Plan indefinitely,
3M reserves the right to terminate the Plan at any time and for any
reason.  Upon the termination of the
Plan, and to the extent permitted by section 409A of the Code, all elections to
participate in the Plan and defer Compensation hereunder will be revoked, and
the amounts already credited to existing Accounts will be distributed to the
Participants in accordance with the provisions of Article VII.

 

10)                              Paragraph
12.1 is amended to read as follows:

 

12.1                        DEFINITIONS.  For purposes of this Article XII, the
following words and phrases shall have the meanings indicated below, unless the
context clearly indicates otherwise:

 

(a)                                 “Code”
means the Internal Revenue Code of 1954, as amended.

 

(b)           “Company”
means 3M Company, a Delaware corporation.

 

 

11)                              Paragraph
12.3 is amended to read as follows:

 

12.3                        DEFINITION OF CHANGE IN CONTROL.  For purposes of this Article XII, a
Change in Control of the Company shall be deemed to have occurred only if there
is a “change in the ownership of the Company”, “change in the effective control
of the Company”, and/or a “change in the ownership of a substantial portion of
the Company’s assets” as defined under Treas. Reg. Section 1.409A-3(i)(5) or
such other regulation or guidance issued under section 409A of the Code.

 

12)                              Paragraph
12.4 is amended to read as follows:

 

12.4                        GROSS UP FOR EXCISE TAX.  In the event that the payments made pursuant
to this Article XII are finally determined to be subject to the excise tax
imposed by Section 4999 of the Code, the Company shall pay to each
Participant an additional amount such that the net amount retained by such
Participant, after allowing for the amount of such excise tax and any
additional federal, state and local income taxes paid on the additional amount,
shall be equal to the value of the Accounts distributed to such Participant
pursuant to this Article XII. 
Payment of this additional amount shall be made as soon as
administratively feasible, but no later than two and one-half months following
the end of the Participant’s taxable year in which the Participant remits the
related taxes.

 

13)                              Paragraph
12.5 is amended to read as follows:

 

12.5                        REIMBURSEMENT OF FEES AND EXPENSES.  The Company shall pay to each Participant the
amount of all reasonable legal and accounting fees and expenses incurred by
such Participant in seeking to obtain or enforce his rights under this Article XII
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 XII, 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 XII.  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.Exhibit 10.5

 

AMENDMENT OF THE

3M 2008
LONG-TERM INCENTIVE PLAN —

Compliance
with Section 409A

 

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; and

 

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

 

THEREFORE,
pursuant to the authority contained in Section 16 of the Plan, the plan
document of such Plan shall be and it hereby is amended as follows, effective January 1,
2009:

 

1)             The
fifth paragraph of Section 7 is amended to read as follows:

 

If a Participant dies, either prior to or following
Retirement, or becomes “disabled” within the meaning of section 409A(a)(2)(C) of
the Code, and has not yet received the stock certificate for the shares of
Common Stock represented by a grant of Restricted Stock, Restricted Stock Units
or other Stock Award, then all restrictions imposed during the Restricted
Period and any other terms and conditions prescribed by the Committee, if any,
shall automatically lapse and a stock certificate shall be delivered to the
Participant or the Participant’s beneficiary, representative, or estate, as the
case may be upon the Participant’s demonstration to the satisfaction of the
Committee that such Participant is considered “disabled” for purposes of
section 409A(a)(2)(C) of the Code.

 

2)             The
last three paragraphs of Section 17 are amended to read as follows:

 

 

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 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).

 

In the event that the provisions of this Section 17,
when considered together with the other compensation provided by the Company,
result in “payments” that are finally determined to be subject to the excise
tax imposed by section 4999 of the Code, the Company shall pay to each
Participant an additional amount sufficient to fully satisfy such excise tax
and any additional federal, state, and local income taxes payable on the
additional amount.  Payment of this
additional amount shall be made as soon as administratively feasible, but no
later than two and one-half months following the end of the Participant’s
taxable year in which the amount of the excise tax payable has been determined.

 

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.

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