Document:

Exhibit 10.1

 

FIRST AMENDMENT TO LEASE

 

THIS
FIRST AMENDMENT  TO LEASE (“Amendment”) is made and entered into by the
undersigned parties on the 16th day of December, 2008, effective as
of the 1st day of November, 2008, by and between NATOMAS
MEADOWS, LLC, a California limited liability company (“Landlord”),
and OVERSTOCK.COM, INC., a Delaware
corporation (“Tenant”).

 

RECITALS

 

A.  On or about April 8, 2008, Landlord and
Tenant entered into that certain Lease Agreement for Landmark Industrial Park
(the “Lease”) for space in a warehouse facility located at approximately 1862
South 4800 West, Salt Lake City, Utah. The amount of space occupied by Tenant
and for which Tenant will pay Base Rent will increase incrementally from
232,900 square feet to 686,865 square feet.

 

B.         Pursuant to Section 5.5 of the Lease,
Landlord has constructed for Tenant a call center and related facilities and
improvements in the Premises (the “Call Center”) at a cost of Two Million Seven
Hundred Thirty-Three Thousand Seven Hundred Thirty-Three Dollars and Sixty-Two
Cents ($2,733,733.62). Tenant will reimburse Landlord for these costs as
provided in this Amendment.

 

C.         The Call Center contains 39,787 sq. ft. and
was delivered to and accepted by Tenant as of November 1, 2008. The
parties desire and intend to amend the Lease to reflect Tenant’s occupancy of
the Call Center and the corresponding adjustments in Base Rent owing to these
improvements.

 

D.         The Call Center is a unique facility designed
for Tenant’s specific requirements and is not expected to have utility or value
to any subsequent tenant of the Premises.

 

E.         The parties also desire and intend to amend
the Term of the Lease and to amend certain other provisions of the Lease as
provided below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the circumstances described above
and for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Landlord and Tenant agree as follows:

 

1.                    Definitions. Capitalized terms used herein but not
defined herein shall have the

meanings provided in the
Lease.

 

 

2.             Call Center Improvements. The
parties agree that the amounts expended by Landlord to construct the Call
Center as set forth above will be reimbursed by Tenant as follows:

 

a.            Concurrently with the execution of this
Amendment Tenant shall pay to Landlord the sum of One Million Dollars ($
1,000,000.00) in immediately available funds.

 

b.           The balance of One Million Seven Hundred
Thirty-Three Thousand Seven Hundred Thirty-Three Dollars and Sixty-Two Cents
($1,733,733.62), together with interest thereon at the rate of nine percent
(9%) per annum will be paid by means of an increase in Base Rent in the amount
of Twenty Seven Thousand Four Hundred Twenty- Eight Dollars and Twenty-Six
Cents ($27,428.26) per month commencing January 1, 2009, and continuing
through February28, 2016.

 

c.            As a result of the addition of the Call
Center to the Premises and the increase in Base Rent described in Section 2(b),
it is necessary to amend Section 3.1 of the Lease. Consequently, the
charts appearing in Section 3.1(a) of the Lease arc hereby deleted in
their entirety and replaced by the charts appearing in Exhibit 1 and
Exhibit 2 attached hereto.

 

d.           To partially secure payment of the additional Base Rent provided in Section 2(b),
Tenant will obtain and provide to Landlord within two business days after
execution of this Amendment, a letter of credit issued by Wells Fargo Bank or
another financial institution acceptable to Landlord, and in a form acceptable
to Landlord, in the original amount of One Million Dollars ($1,000,000.00).
Landlord shall have the right to draw upon the letter of credit in the event
that (i) Tenant fails to make any payment of Base Rent when due or within
the cure period provided in the Lease, or (ii) Tenant fails to replace the
letter of credit at least thirty (30) days prior to its expiration date with
another letter of credit meeting the requirements of this Section 2(d).
The letter of credit may be reduced annually by Tenant provided, that Tenant is
not in default under the lease, and provided further that such reduced amount
of the letter of credit shall be no less than sixty percent (60%) of the
remaining applicable unpaid principal balance set forth on the amortization
schedule attached as Exhibit 3 hereto.      .

 

c.            Given the unique nature of the Call Center
and the fact that it is not expected to have value or utility to any successor
tenant of the Premises, the parties agree that in the event of the termination
of the Lease due to the default of Tenant, Landlord shall be entitled to receive as liquidated
damages the unamortized principal amount of the additional rent provided in Section 2(b) as
shown on Exhibit 3. Such liquidated damages are in addition to and not in limitation of all damages to which Landlord
is otherwise entitled under the Lease (but shall be exclusive of damages in the
form of lost rents to the extent of the additional rent provided in Section 2(b)).
Sums received by Landlord from the letter of credit pursuant to Section 2(d) shall
be credited against the liquidated damages provided in this Section 2(e).

 

3.           Short Term Loan to Landlord. Concurrently with the execution of this Amendment
Tenant shall advance to Landlord in immediately available funds Seven Hundred
Fifty Thousand Dollars ($750,000.00). Landlord shall repay such sum to Tenant,
without

 

2

 

interest, on or before December 30,
2008. If Landlord fails to repay such sum by December 30, 2008, such sum, together with interest from the date of this Amendment until paid at the rate of
24  % per annum, shall be immediately due and
payable and Tenant shall be entitled to immediate collection and may recover
any costs of collection, including attorneys fees.

 

4.           Rent Credit. For the period
beginning on the Rent Credit Effective Date (as defined below) through May 31,
2010, Tenant shall be entitled to deduct from the monthly Base Rent the
appropriate rent credit amount shown on Exhibit 2.
Tenant shall be eligible for the
rent credit beginning on the first business day after it vacates the premises
it is currently leasing from Landlord in the building commonly known as
Landmark 1 (the “Rent Credit Effective Date”).

 

5.           Commencement Date and Fixed Expiration Date. The parties agree that the Commencement Date
was October 15, 2008. Section 2.1
of the Lease is deleted and the
following substituted therefor:

 

2.1  TERM: This Lease shall be for a term of approximately seven (7) years and
two months (the “Term”) commencing on the Commencement Date , as hereafter
defined, and ending on February 28, 2016 (the “Fixed Expiration Date”), or
any earlier date upon which the Term shall sooner or later end
pursuant to any of the terms,
conditions or covenants of this
Lease or pursuant to law (the “Expiration Date”).

 

6.           Additional Tenant Improvements.
Landlord and Tenant acknowledge that the parties anticipate that Tenant will
want to construct in the future certain additional improvements to the Leased
Premises at Tenant’s expense for an office/corporate headquarters. The specific
nature of those improvements has not been identified, and there is no current
agreement between the parties with respect to the improvements or the costs or
financing thereof, In the event that Tenant determines to proceed with such improvements the parties will
cooperate again in good faith as
provided in Section 5.5 of the Lease as they have in the construction of
the Call Center.

 

7.           Lease in Effect.
Except as specifically amended herein, all provisions of the Lease shall remain
unchanged and in full force and effect.

 

8.           Counterparts;  Telefacsimile
Execution. This Amendment may be executed in any number
of counterparts, each of which, when so executed, shall be deemed an original, but all of which shall
constitute but one and the same instrument.
Delivery of an executed counterpart of this  Amendment by telefacsimile shall be equally
as effective as delivery of a manually executed counterpart of this Amendment.
Any party delivering an executed counterpart of this Amendment by telefacsimile
shall also deliver a manually executed counterpart of this Amendment, but the
failure to deliver a manually executed counterpart shall not affect the
validity, enforceability or binding effect of this Amendment.

 

[signatures
follow on next page]

 

3

 

IN WITNESS WHEREOF the parties have executed this Amendment:

 

	
   

  	
  LANDLORD:

  
	
   

  
	
   

  	
  NATOMAS
  MEADOWS, LLC, a
  California

  limited liability company

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Its:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT

  
	
   

  	
   

  
	
   

  	
  OVERSTOCK.COM,  INC., a Delaware

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Its:

  	
  President

  

 

4

 

EXHIBIT “1”

 

Base Rent Schedule

 

	
  PERIOD

  	
   

  	
  SQUARE

  FOOTAGE

  	
   

  	
  MONTHLY BASE

  RENT

  	
   

  
	
  Commencement Date (October 15, 2008) –
  October 31, 2008

  	
   

  	
  232,900

  	
   

  	
  $

  	
  76,857.00

  	
   

  
	
  November 1, 2008 – December 31,
  2009

  	
   

  	
  272,687

  	
   

  	
  $

  	
  89,986.71
  

  	
   

  
	
  January 1, 2009 – January 31, 2009

  	
   

  	
  272,687

  	
   

  	
  $

  	
  117,414.97

  	
   

  
	
  February 1, 2009 – May 31, 2009

  	
   

  	
  475,187

  	
   

  	
  $

  	
  184,239.97

  	
   

  
	
  June 1, 2009 – August 31, 2009

  	
   

  	
  565,187

  	
   

  	
  $

  	
  213,939.97

  	
   

  
	
  September 1, 2009 – August 31,
  2010

  	
   

  	
  686,865

  	
   

  	
  $

  	
  261,031.04

  	
   

  
	
  September 1, 2010 – August 31,
  2011

  	
   

  	
  686,865

  	
   

  	
  $

  	
  268,105.75

  	
   

  
	
  September 1, 2011 – August 31, 2012

  	
   

  	
  686,865

  	
   

  	
  $

  	
  275,455.21

  	
   

  
	
  September 1, 2012 – August 31,
  2013

  	
   

  	
  686,865

  	
   

  	
  $

  	
  285,002.63

  	
   

  
	
  September 1, 2013 – August 31, 2014

  	
   

  	
  686,865

  	
   

  	
  $

  	
  290,772.30

  	
   

  
	
  September 1, 2014 – February 28,
  2016

  	
   

  	
  686,865

  	
   

  	
  $

  	
  298,739.93

  	
   

  

 

5

 

EXHIBIT “2”

 

Rent Credit Summary

 

	
  PERIOD

  	
   

  	
  MONTHLY RENT CREDIT

  AVAILABLE

  	
   

  
	
  Rent Credit Effective Date –
  August 31, 2009

  	
   

  	
  $

  	
  12,474.00

  	
   

  
	
  September 1, 2009 – May 31, 2010

  	
   

  	
  $

  	
  14,574.00

  	
   

  

 

 

6

 

Exhibit 3

 

Tenant Improvement Allowance Amortization Schedule

 

	
  Loan Size

  	
   

  	
  $

  	
  1,733,734

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rate

  	
   

  	
  9.00

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Term

  	
   

  	
  86

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payment

  	
   

  	
  $

  	
  (27,428.26

  	
  )

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  Period

  	
   

  	
  Outstanding Principal

  Balance

  	
   

  	
  Payment

  	
   

  	
  Interest

  	
   

  	
  Principal Reduction

  	
   

  	
  End of Period

  Principal Balance

  	
   

  
	
  0

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,733,733.62

  	
   

  
	
  1

  	
   

  	
  $

  	
  1,733,733.62

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  13,003.00

  	
   

  	
  $

  	
  14,425.25

  	
   

  	
  $

  	
  1,719,308.37

  	
   

  
	
  2

  	
   

  	
  $

  	
  1,719,308.37

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  12,894.81

  	
   

  	
  $

  	
  14,533.44

  	
   

  	
  $

  	
  1,704,774.92

  	
   

  
	
  3

  	
   

  	
  $

  	
  1,704,774.92

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  12,785.81

  	
   

  	
  $

  	
  14,642.45

  	
   

  	
  $

  	
  1,690,132.48

  	
   

  
	
  4

  	
   

  	
  $

  	
  1,690,132.48

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  12,675.99

  	
   

  	
  $

  	
  14,752.26

  	
   

  	
  $

  	
  1,675,380.21

  	
   

  
	
  5

  	
   

  	
  $

  	
  1,675,380.21

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  12,565.35

  	
   

  	
  $

  	
  14,862.91

  	
   

  	
  $

  	
  1,660,517.31

  	
   

  
	
  6

  	
   

  	
  $

  	
  1,660,517.31

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  12,453.88

  	
   

  	
  $

  	
  14,974.38

  	
   

  	
  $

  	
  1,645,542.93

  	
   

  
	
  7

  	
   

  	
  $

  	
  1,645,542.93

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  12,341.57

  	
   

  	
  $

  	
  15,086.69

  	
   

  	
  $

  	
  1,630,456.24

  	
   

  
	
  8

  	
   

  	
  $

  	
  1,630,456.24

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  12,228.42

  	
   

  	
  $

  	
  15,199.84

  	
   

  	
  $

  	
  1,615,256.41

  	
   

  
	
  9

  	
   

  	
  $

  	
  1,615,256.41

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  12,114.42

  	
   

  	
  $

  	
  15,313.83

  	
   

  	
  $

  	
  1,599,942.57

  	
   

  
	
  10

  	
   

  	
  $

  	
  1,599,942.57

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  11,999.57

  	
   

  	
  $

  	
  15,428.69

  	
   

  	
  $

  	
  1,584,513.89

  	
   

  
	
  11

  	
   

  	
  $

  	
  1,584,513.89

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  11,883.85

  	
   

  	
  $

  	
  15,544.40

  	
   

  	
  $

  	
  1,568,969.48

  	
   

  
	
  12

  	
   

  	
  $

  	
  1,568,969.48

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  11,767.27

  	
   

  	
  $

  	
  15,660.99

  	
   

  	
  $

  	
  1,553,308.50

  	
   

  
	
  13

  	
   

  	
  $

  	
  1,553,308.50

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  11,649.81

  	
   

  	
  $

  	
  15,778.44

  	
   

  	
  $

  	
  1,537,530.05

  	
   

  
	
  14

  	
   

  	
  $

  	
  1,537,530.05

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  11,531.48

  	
   

  	
  $

  	
  15,896.78

  	
   

  	
  $

  	
  1,521,633.27

  	
   

  
	
  15

  	
   

  	
  $

  	
  1,521,633.27

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  11,412.25

  	
   

  	
  $

  	
  16,016.01

  	
   

  	
  $

  	
  1,505,617.27

  	
   

  
	
  16

  	
   

  	
  $

  	
  1,505,617.27

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  11,292.13

  	
   

  	
  $

  	
  16,136.13

  	
   

  	
  $

  	
  1,489,481.14

  	
   

  
	
  17

  	
   

  	
  $

  	
  1,489,481.14

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  11,171.11

  	
   

  	
  $

  	
  16,257.15

  	
   

  	
  $

  	
  1,473,223.99

  	
   

  
	
  18

  	
   

  	
  $

  	
  1,473,223.99

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  11,049.18

  	
   

  	
  $

  	
  16,379.08

  	
   

  	
  $

  	
  1,456,844.91

  	
   

  
	
  19

  	
   

  	
  $

  	
  1,456,844.91

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  10,926.34

  	
   

  	
  $

  	
  16,501.92

  	
   

  	
  $

  	
  1,440,342.99

  	
   

  
	
  20

  	
   

  	
  $

  	
  1,440,342.99

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  10,802.57

  	
   

  	
  $

  	
  16,625.68

  	
   

  	
  $

  	
  1,423,717.31

  	
   

  
	
  21

  	
   

  	
  $

  	
  1,423,717.31

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  10,677.88

  	
   

  	
  $

  	
  16,750.38

  	
   

  	
  $

  	
  1,406,966.93

  	
   

  
	
  22

  	
   

  	
  $

  	
  1,406,966.93

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  10,552.25

  	
   

  	
  $

  	
  16,876.01

  	
   

  	
  $

  	
  1,390,090.92

  	
   

  
	
  23

  	
   

  	
  $

  	
  1,390,090.92

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  10,425.68

  	
   

  	
  $

  	
  17,002.58

  	
   

  	
  $

  	
  1,373,088.35

  	
   

  
	
  24

  	
   

  	
  $

  	
  1,373,088.35

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  10,298.16

  	
   

  	
  $

  	
  17,130.09

  	
   

  	
  $

  	
  1,355,958.25

  	
   

  
	
  25

  	
   

  	
  $

  	
  1,355,958.25

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  10,169.69

  	
   

  	
  $

  	
  17,258.57

  	
   

  	
  $

  	
  1,338,699.68

  	
   

  
	
  26

  	
   

  	
  $

  	
  1,338,699.68

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  10,040.25

  	
   

  	
  $

  	
  17,388.01

  	
   

  	
  $

  	
  1,321,311.67

  	
   

  
	
  27

  	
   

  	
  $

  	
  1,321,311.67

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  9,909.84

  	
   

  	
  $

  	
  17,518.42

  	
   

  	
  $

  	
  1,303,793.26

  	
   

  
	
  28

  	
   

  	
  $

  	
  1,303,793.26

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  9,778.45

  	
   

  	
  $

  	
  17,649.81

  	
   

  	
  $

  	
  1,286,143.45

  	
   

  
	
  29

  	
   

  	
  $

  	
  1,286,143.45

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  9,646.08

  	
   

  	
  $

  	
  17,782.18

  	
   

  	
  $

  	
  1,268,351.27

  	
   

  
	
  30

  	
   

  	
  $

  	
  1,268,361.27

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  9,512.71

  	
   

  	
  $

  	
  17,915.55

  	
   

  	
  $

  	
  1,250,445.72

  	
   

  
	
  31

  	
   

  	
  $

  	
  1,250,445.72

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  9,378.34

  	
   

  	
  $

  	
  18,049.91

  	
   

  	
  $

  	
  1,232,395.80

  	
   

  
	
  32

  	
   

  	
  $

  	
  1,232,395.80

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  9,242.97

  	
   

  	
  $

  	
  18,185.29

  	
   

  	
  $

  	
  1,214,210.52

  	
   

  
	
  33

  	
   

  	
  $

  	
  1,214,210.52

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  9,106.58

  	
   

  	
  $

  	
  18,321.68

  	
   

  	
  $

  	
  1,195,888.84

  	
   

  
	
  34

  	
   

  	
  $

  	
  1,195,888.84

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  8,969.17

  	
   

  	
  $

  	
  18,459.09

  	
   

  	
  $

  	
  1,177,429.75

  	
   

  
	
  35

  	
   

  	
  $

  	
  1,177,429.75

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  8,830.72

  	
   

  	
  $

  	
  18,597.53

  	
   

  	
  $

  	
  1,158,832.21

  	
   

  
	
  36

  	
   

  	
  $

  	
  1,158,832.21

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  8,691.24

  	
   

  	
  $

  	
  18,737.02

  	
   

  	
  $

  	
  1,140,095.20

  	
   

  
	
  37

  	
   

  	
  $

  	
  1,140,095.20

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  8,550.71

  	
   

  	
  $

  	
  18,877.54

  	
   

  	
  $

  	
  1,121,217.65

  	
   

  
	
  38

  	
   

  	
  $

  	
  1,121,217.65

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  8,409.13

  	
   

  	
  $

  	
  19,019.12

  	
   

  	
  $

  	
  1,102,198.53

  	
   

  
	
  39

  	
   

  	
  $

  	
  1,102,198.53

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  8,266.49

  	
   

  	
  $

  	
  19,161.77

  	
   

  	
  $

  	
  1,083,036.76

  	
   

  
	
  40

  	
   

  	
  $

  	
  1,083,036.76

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  8,122.78

  	
   

  	
  $

  	
  19,305.48

  	
   

  	
  $

  	
  1,063,731.28

  	
   

  
	
  41

  	
   

  	
  $

  	
  1,063,731.28

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  7,977.98

  	
   

  	
  $

  	
  19,450.27

  	
   

  	
  $

  	
  1,044,281.01

  	
   

  
	
  42

  	
   

  	
  $

  	
  1,044,281.01

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  7,832.11

  	
   

  	
  $

  	
  19,596.15

  	
   

  	
  $

  	
  1,024,684.86

  	
   

  
	
  43

  	
   

  	
  $

  	
  1,024,684.86

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  7,685.14

  	
   

  	
  $

  	
  19,743.12

  	
   

  	
  $

  	
  1,004,941.74

  	
   

  
	
  44

  	
   

  	
  $

  	
  1,004,941.74

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  7,537.06

  	
   

  	
  $

  	
  19,891.19

  	
   

  	
  $

  	
  985,050.54

  	
   

  
	
  45

  	
   

  	
  $

  	
  985,050.54

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  7,387.88

  	
   

  	
  $

  	
  20,040.38

  	
   

  	
  $

  	
  965,010.17

  	
   

  

 

7

 

Exhibit 3

 

Tenant Improvement Allowance Amortization Schedule

 

	
  Period

  	
   

  	
  Outstanding Principal

  Balance

  	
   

  	
  Payment

  	
   

  	
  Interest

  	
   

  	
  Principal Reduction

  	
   

  	
  End of Period

  Principal Balance

  	
   

  
	
  46

  	
   

  	
  $

  	
  965,010.17

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  7,237.58

  	
   

  	
  $

  	
  20,190.68

  	
   

  	
  $

  	
  944,819.48

  	
   

  
	
  47

  	
   

  	
  $

  	
  944,819.48

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  7,086.15

  	
   

  	
  $

  	
  20,342.11

  	
   

  	
  $

  	
  924,477.37

  	
   

  
	
  48

  	
   

  	
  $

  	
  924,477.37

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  6,933.58

  	
   

  	
  $

  	
  20,494.68

  	
   

  	
  $

  	
  903,982.70

  	
   

  
	
  49

  	
   

  	
  $

  	
  903,982.70

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  6,779.87

  	
   

  	
  $

  	
  20,648.39

  	
   

  	
  $

  	
  883,334.31

  	
   

  
	
  50

  	
   

  	
  $

  	
  883,334.31

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  6,625.01

  	
   

  	
  $

  	
  20,803.25

  	
   

  	
  $

  	
  862,531.06

  	
   

  
	
  51

  	
   

  	
  $

  	
  862,531.06

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  6,468.98

  	
   

  	
  $

  	
  20,959.27

  	
   

  	
  $

  	
  841,571.79

  	
   

  
	
  52

  	
   

  	
  $

  	
  841,571.79

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  6,311.79

  	
   

  	
  $

  	
  21,116.47

  	
   

  	
  $

  	
  820,455.32

  	
   

  
	
  53

  	
   

  	
  $

  	
  820,455.32

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  6,153.41

  	
   

  	
  $

  	
  21,274.84

  	
   

  	
  $

  	
  799,180.47

  	
   

  
	
  54

  	
   

  	
  $

  	
  799,180.47

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  5,993.85

  	
   

  	
  $

  	
  21,434.40

  	
   

  	
  $

  	
  777,746.07

  	
   

  
	
  55

  	
   

  	
  $

  	
  777,746.07

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  5,833.10

  	
   

  	
  $

  	
  21,595.16

  	
   

  	
  $

  	
  756,150.91

  	
   

  
	
  56

  	
   

  	
  $

  	
  756,150.91

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  5,671.13

  	
   

  	
  $

  	
  21,757.13

  	
   

  	
  $

  	
  734,393.78

  	
   

  
	
  57

  	
   

  	
  $

  	
  734,393.78

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  5,507.95

  	
   

  	
  $

  	
  21,920.30

  	
   

  	
  $

  	
  712,473.48

  	
   

  
	
  58

  	
   

  	
  $

  	
  712,473.48

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  5,343.55

  	
   

  	
  $

  	
  22,084.71

  	
   

  	
  $

  	
  690,388.77

  	
   

  
	
  59

  	
   

  	
  $

  	
  690,388.77

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  5,177.92

  	
   

  	
  $

  	
  22,250.34

  	
   

  	
  $

  	
  668,138.43

  	
   

  
	
  60

  	
   

  	
  $

  	
  668,138.43

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  5,011.04

  	
   

  	
  $

  	
  22,417.22

  	
   

  	
  $

  	
  645,721.21

  	
   

  
	
  61

  	
   

  	
  $

  	
  645,721.21

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  4,842.91

  	
   

  	
  $

  	
  22,585.35

  	
   

  	
  $

  	
  623,135.87

  	
   

  
	
  62

  	
   

  	
  $

  	
  623,135.87

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  4,673.52

  	
   

  	
  $

  	
  22,754.74

  	
   

  	
  $

  	
  600,381.13

  	
   

  
	
  63

  	
   

  	
  $

  	
  600,381.13

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  4,502.86

  	
   

  	
  $

  	
  22,925.40

  	
   

  	
  $

  	
  577,455.73

  	
   

  
	
  64

  	
   

  	
  $

  	
  577,455.73

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  4,330.92

  	
   

  	
  $

  	
  23,097.34

  	
   

  	
  $

  	
  554,358.39

  	
   

  
	
  65

  	
   

  	
  $

  	
  554,358.39

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  4,157.69

  	
   

  	
  $

  	
  23,270.57

  	
   

  	
  $

  	
  531,087.82

  	
   

  
	
  66

  	
   

  	
  $

  	
  531,087.82

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  3,983.16

  	
   

  	
  $

  	
  23,445.10

  	
   

  	
  $

  	
  507,642.72

  	
   

  
	
  67

  	
   

  	
  $

  	
  507,642.72

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  3,807.32

  	
   

  	
  $

  	
  23,620.94

  	
   

  	
  $

  	
  484,021.79

  	
   

  
	
  68

  	
   

  	
  $

  	
  484,021.79

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  3,630.16

  	
   

  	
  $

  	
  23,798.09

  	
   

  	
  $

  	
  460,223.69

  	
   

  
	
  69

  	
   

  	
  $

  	
  460,223.69

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  3,451.68

  	
   

  	
  $

  	
  23,976.58

  	
   

  	
  $

  	
  436,247.11

  	
   

  
	
  70

  	
   

  	
  $

  	
  436,247.11

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  3,271.85

  	
   

  	
  $

  	
  24,156.40

  	
   

  	
  $

  	
  412,090.71

  	
   

  
	
  71

  	
   

  	
  $

  	
  412,090.71

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  3,090.68

  	
   

  	
  $

  	
  24,337.58

  	
   

  	
  $

  	
  387,753.13

  	
   

  
	
  72

  	
   

  	
  $

  	
  387,753.13

  	
   

  	
  $

  	
  27,426.26

  	
   

  	
  $

  	
  2,908.15

  	
   

  	
  $

  	
  24,520.11

  	
   

  	
  $

  	
  363,233.02

  	
   

  
	
  73

  	
   

  	
  $

  	
  363,233.02

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  2,724.25

  	
   

  	
  $

  	
  24,704.01

  	
   

  	
  $

  	
  338.529.01

  	
   

  
	
  74

  	
   

  	
  $

  	
  338,529.01

  	
   

  	
  $

  	
  27,428,26

  	
   

  	
  $

  	
  2,538.97

  	
   

  	
  $

  	
  24,889.29

  	
   

  	
  $

  	
  313,639.72

  	
   

  
	
  75

  	
   

  	
  $

  	
  313,639.72

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  2,352.30

  	
   

  	
  $

  	
  25,075.96

  	
   

  	
  $

  	
  288,563.77

  	
   

  
	
  76

  	
   

  	
  $

  	
  288,563.77

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  2,164.23

  	
   

  	
  $

  	
  25,264.03

  	
   

  	
  $

  	
  263,299.74

  	
   

  
	
  77

  	
   

  	
  $

  	
  263,299.74

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  1,974.75

  	
   

  	
  $

  	
  25,453.51

  	
   

  	
  $

  	
  237,846.23

  	
   

  
	
  78

  	
   

  	
  $

  	
  237,846.23

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  1,783.85

  	
   

  	
  $

  	
  25,644.41

  	
   

  	
  $

  	
  212,201.82

  	
   

  
	
  79

  	
   

  	
  $

  	
  212,201.82

  	
   

  	
  $

  	
  21,428.26

  	
   

  	
  $

  	
  1,591.51

  	
   

  	
  $

  	
  25,836.74

  	
   

  	
  $

  	
  186,365.07

  	
   

  
	
  80

  	
   

  	
  $

  	
  186,365.07

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  1,397.74

  	
   

  	
  $

  	
  26,030.52

  	
   

  	
  $

  	
  160,334.55

  	
   

  
	
  81

  	
   

  	
  $

  	
  160,334.55

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  1,202.51

  	
   

  	
  $

  	
  26,225.75

  	
   

  	
  $

  	
  134,108.81

  	
   

  
	
  82

  	
   

  	
  $

  	
  134,108.81

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  1,005.82

  	
   

  	
  $

  	
  26,422.44

  	
   

  	
  $

  	
  107,686.37

  	
   

  
	
  83

  	
   

  	
  $

  	
  107,686.37

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  807.65

  	
   

  	
  $

  	
  26,620.61

  	
   

  	
  $

  	
  81,065.76

  	
   

  
	
  84

  	
   

  	
  $

  	
  81,065.76

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  607.99

  	
   

  	
  $

  	
  26,820.26

  	
   

  	
  $

  	
  54,245.49

  	
   

  
	
  85

  	
   

  	
  $

  	
  54,245.49

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  406.84

  	
   

  	
  $

  	
  27,021.42

  	
   

  	
  $

  	
  27,224.08

  	
   

  
	
  86

  	
   

  	
  $

  	
  27,224.08

  	
   

  	
  $

  	
  27,428.26

  	
   

  	
  $

  	
  204.18

  	
   

  	
  $

  	
  27,224.08

  	
   

  	
  $

  	
  0.00

  	
   

  

 

8Exhibit 10.1

 

AMENDMENT
TO EMPLOYMENT AGREEMENT

 

This Amendment, effective as
of December 17, 2008, is made by and between George W. Buckley
(“Executive”) and 3M Company (“3M” or the “Company”) and amends that certain
employment agreement, dated December 6, 2005, between Executive and 3M, as
amended by a letter agreement dated August 16, 2006 (collectively, the
“Employment Agreement”).  Except as so
amended, the Employment Agreement otherwise remains in full force and effect.

 

WHEREAS, the parties
previously entered into the Employment Agreement to provide for Executive’s
services as President, Chief Executive Officer and Chairman of the Board of the
Company;

 

WHEREAS, Executive and the
Company further desire to amend Executive’s Employment Agreement on the terms
set forth herein to:  (i) comply
with Section 409A of the Internal Revenue Code of 1986 (the “Code”) (added
by the American Jobs Creation Act of 2004), and (ii) to make other
appropriate changes in the terms and conditions of such Agreement;

 

NOW, THEREFORE, in
consideration of the representations, warranties, covenants and agreements
contained in this Agreement and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

 

1.             REVISED DEFINITION OF CAUSE.  Section 1.15(a) of the Employment
Agreement is hereby amended by restating the paragraph immediately following
clause (ii) as follows:

 

provided, however, that notwithstanding the
foregoing, if Executive shall not both (1) be indicted or otherwise
charged with the above described felony or misdemeanor within 12 months
following the Executive’s Termination for Cause (an “Indictment”) and (2) be
convicted of, or plead guilty or nolo contendere
to such crime or another crime described above based on the same operative
facts (collectively a “Crime”) (a “Conviction”), such termination shall be a
Termination without Cause as of the Date of the Termination.  In the event that the Board determines in good
faith that Executive has committed a felony or misdemeanor as described above,
and terminates Executive ostensibly for Cause pursuant to this Section 1.15(a) prior
to an Indictment and Conviction, all unvested Options, unvested Initial RSUs,
unvested Make-Whole Restricted Stock Units, unvested Initial Performance Units
and unvested Subsequent Performance Units (collectively, for this purpose, the
unvested Initial RSUs, unvested Make-Whole Restricted Stock Units, unvested
Initial Performance Units and unvested Subsequent Performance Units are referred
to as the “Unit Awards”) shall be forfeited unless Executive files a written
claim with the Company, no later than 90 days after termination, that Executive
was ostensibly terminated without Cause. 
Upon the timely filing of a claim, the vesting of unvested Options (and
the exercise period for vested Options) and the vesting of unvested Initial
RSUs, unvested Make-Whole Restricted Stock Units, unvested Initial Performance
Units and unvested Subsequent Performance Units (collectively, for this purpose,
the unvested Initial RSUs, unvested Make-Whole Restricted Stock Units, unvested
Initial Performance Units and unvested Subsequent Performance Units are
referred to as the “Unit Awards”) shall be suspended until either (X) the
lapse of such 12-month period without Indictment or (Y) if there is a
timely Indictment, the end of the criminal proceeding relating to such 

 

 

Indictment. 
If there is both a timely Indictment and a Conviction, then such
suspended unvested Options and unvested Unit Awards shall be forfeited.  If such termination becomes a Termination
Without Cause, Options shall vest and be exercisable in accordance with
Sections 5.3(c) and 5.4, and either (i) all Options shall remain
exercisable until two years after the date on which (X) or (Y) above
shall occur, regardless of whether such two year period extends beyond the
Option Term, or (ii) the Company shall provide Executive with the economic
equivalent in a lump sum in cash of that described in clause (i).  In addition, if such termination becomes a
Termination without Cause, unvested Unit Awards shall immediately vest in
accordance with Sections 5.3(d), 5.6(b), 5.7 and 5.8(a) and within 15 days
thereof, the Company shall deliver to Executive the number of Common Shares
equal to the number of vested Unit Awards. 
In addition, if such termination becomes a Termination without Cause,
the Company shall within 15 days thereof pay to Executive the compensation and
benefits (or value thereof) in accordance with Section 8.3, together with
interest thereon (as determined under Section 8.5(a)) from the Date of
Termination to the date of payment.

 

2.             REVISED DEFINITION OF CHANGE OF
CONTROL.  The last sentence in
Section 1.16 of the Employment Agreement is hereby deleted and replaced
with the following:

 

Notwithstanding the foregoing, solely for
purposes of determining whether the Initial Options become vested upon a Change
of Control under Section 5.3(c), there shall not be a Change of Control
if, in advance of such event, Executive agrees in writing that such event shall
not constitute a Change of Control.  In
addition, for purposes of determining whether the Common Shares or other
remuneration with respect to Executive’s Initial RSUs, Initial Performance
Units and Make Whole Restricted Stock Units are to be delivered to Executive
upon a Change of Control, and for purposes of determining whether Executive’s
severance under Section 8.3(c) shall be paid in a lump sum (in lieu
of installments) on account of a Termination without Cause or a Termination for
Good Reason upon or prior to the second anniversary of a Change of Control,
there shall not be a Change of Control unless such event constitutes a “change
in the ownership of 3M,” “change in effective control of 3M,” and/or a “change
in the ownership of a substantial portion of 3M’s assets” as defined under
Treasury Regulation § 1.409A-3(i)(5) or such other regulation or guidance
issued under Section 409A of the Code.

 

3.             ADDITION OF DEFINITION OF SEPARATION FROM SERVICE.  Article I of the Employment Agreement is
amended by the addition of the following new Section 1.50A:

 

                1.50A      “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
Executive reasonably anticipated that no further services would be performed
after a certain date or that the level of bona fide services Executive 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).

 

4.             ADDITION OF DEFINITION OF SPECIFIED EMPLOYEE.  Article I of the Employment Agreement is
amended by the addition of the following new Section 1.53A:

 

 

                1.53A      “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.

 

5.             PAYMENT OF INITIAL RESTRICTED STOCK UNITS.  The last sentence in Section 5.3(d) of
the Employment Agreement is hereby amended to read as follows:

 

Within 15 days after Initial RSU’s become
vested in accordance with the foregoing, the Company shall deliver to Executive
the number of Common Shares equal to the number of vested Initial RSUs
(including dividends thereon); provided, however, that Executive agrees not to
sell or otherwise dispose of such Common Shares (except as required to pay
withholding taxes) prior to the Date of Termination of his employment without
the consent of the Committee. 
Notwithstanding the foregoing, with respect to Initial RSUs that become
vested on account of a Termination of Employment by reason of Disability, a
Termination Without Cause, a Termination for Good Reason or a Change of Control
that does not constitute a “change in the ownership of 3M”, “change in
effective control of 3M”, and/or a “change in the ownership of a substantial
portion of 3M’s assets” as defined under Treasury Regulation §1.409A-3(i)(5) or
such other regulation or guidance issued under Section 409A of the Code,
the Company shall deliver to Executive such Common Shares (and dividends
thereon) within 15 days of Executive’s Separation from Service (subject to any
required delay under Section 8.5(a)).

 

6.             PAYMENT OF MAKE WHOLE RESTRICTED STOCK UNITS.  Section 5.8(c) of the Employment
Agreement is hereby amended to read as follows:

 

                (c)           Within 15 days after Make Whole
Restricted Stock Units become vested in accordance with the foregoing, the
Company shall deliver to the Executive the number of Common Shares equal to the
number of vested Make Whole Restricted Stock Units; provided, however, that
Executive agrees not to sell or otherwise dispose of such Common Shares (except
as required to pay withholding taxes) prior to the Date of Termination of his
employment without the consent of the Committee.  Notwithstanding the foregoing, with respect
to Make Whole Restricted Stock Units that become vested on account of a
Termination of Employment by reason of Disability, a Termination Without Cause,
a Termination for Good Reason or a Change of Control that does not constitute a
“change in the ownership of 3M”, “change in effective control of 3M”, and/or a
“change in the ownership of a substantial portion of 3M’s assets” as defined
under Treasury Regulation §1.409A-3(i)(5) or such other regulation or
guidance issued under Section 409A of the Code, the Company shall deliver
to Executive such Common Shares within 15 days of Executive’s Separation from
Service (subject to any required delay under Section 8.5(a)).

 

 

7.             TAX GROSS-UP PAYMENT.  Section 6.7 of the Employment Agreement
is hereby amended by the addition of the following sentence at the end thereof:

 

Such Tax Gross-Up Payment shall be made at
the same time that payment of the corresponding  excise taxes or similar
taxes becomes due.

 

8.             PAYMENT OF SUPPLEMENTAL RETIREMENT BENEFIT.  Section 7.2
of the Employment Agreement shall be amended to read as follows:

 

                7.2.          Payment.  The
single life annuity that becomes payable under this Article VII, if any,
shall commence as of the first day of the calendar month coincident with or
next following Executive’s Separation from Service (the “annuity starting
date”) and continue in monthly installments to Executive for his life.  In lieu of a single life annuity, Executive
may choose, in accordance with the requirements of the 3M Employee Retirement
Income Plan, to elect payment in an alternative Joint and Spouse Beneficiary
Survivor Annuity form or a Joint and Nonspouse Beneficiary Survivor Annuity
form available under the 3M Employee Retirement Income Plan (i.e., 50%, 75% or 100%), as the same may be amended from
time to time.  As of Executive’s annuity
starting date, the Company shall determine the Actuarial Equivalent lump sum
present value of the annuity (the “Total Pension Value”).  If Executive and all joint annuitants, if
any, die before receiving the Total Pension Value, the remaining balance of the
Total Pension Value shall be paid to Executive’s Beneficiary (or if such
Beneficiary is deceased, to Executive’s estate) in a single lump sum.

 

9.             CASH
SEVERANCE PAYMENT, BENEFIT CONTINUATION AND OTHER AMOUNTS.  Sections 8.3(c), (d) and (e) of the
Employment Agreement shall be deleted and replaced with the following:

 

                (c)           from the date of Executive’s
Separation from Service through the end of the Severance Period, an amount
equal to two (2) times Executive’s Annualized Total Compensation payable
in 24 equal monthly installments commencing on the fifteenth day of the
calendar month after Executive’s Separation from Service; provided that if Executive
has a Termination without Cause or a Termination for Good Reason upon or prior
to the second anniversary of a Change of Control, the foregoing amount shall be
paid immediately after Executive’s Separation from Service in a lump sum cash
amount in immediately available funds (subject to any required delay under Section 8.5(a)).

 

                (d)           from the date of Executive’s
Separation from Service through the end of the Severance Period, continued
health (including, for avoidance of doubt, medical, prescription, dental and
vision coverage), basic employee life, dependent life, disability, travel and
accidental death and dismemberment insurance coverage on the same terms as if
Executive were a senior executive of the Company during such period (subject to
any required delay under Section 8.5(a)); provided, that any such coverage
(or reimbursements for the cost of such coverage) shall be reduced by any
similar coverage provided by a subsequent employer or under any retiree benefit
plan of the Company.  If Executive is not
eligible for continued group insurance coverage in accordance with the terms of
one or more of the Company’s group plans for current or former employees, or if
the Company determines that the inclusion of Executive in one or more of its
group plans would jeopardize the tax-qualified status of such plans, the
Company shall assist Executive in finding comparable alternative individual
coverage for the remainder of the Severance Period, and the Company shall pay
for the cost of such coverage in excess of the amount, if 

 

 

any, that Executive would have paid for such
coverage as a senior executive of the Company.

 

                (e)           Deleted.

 

10.           409A
PROVISION.  Section 8.5(a) of
the Employment Agreement is hereby amended to read as follows:

 

                (a)           Notwithstanding anything herein to
the contrary, this Agreement is intended to be interpreted and operated so that
the payment of the compensation and benefits set forth herein either shall
either be exempt from the requirements of Section 409A of the Code or
shall comply with the requirements of such provision.  If on the date of Executive’s Separation from
Service, Executive is a Specified Employee, then:

 

                (1)           with respect to the Initial RSUs and
the Make Whole Restricted Stock Units that become vested and payable on account
of a Termination of Employment by reason of Disability, a Termination Without
Cause or a Termination for Good Reason, delivery of the Common Shares shall be
delayed until the earlier of the first day of the seventh month following
Executive’s Separation from Service or the date of his death;

 

                (2)           commencement of the annuity payments
under Section 7.2 shall be delayed until the earlier of the first day of
the seventh month following Executive’s Separation from Service or the date of
his death, at which time Executive shall receive a lump sum “catch up” payment
equal to the cumulative payments missed on account of the delay, together with
interest, compounded annually, equal to the prime rate (as published in The
Wall Street Journal) in effect as of the Separation from Service (accordingly,
the single life annuity shall be calculated based on the annuity starting date
as of the first day of the calendar month following separation without regard
to the delay);

 

                (3)           commencement of the cash severance
under Section 8.3(c) shall be delayed until the earlier of the first
day of the seventh month following Executive’s Separation from Service or the
date of his death, at which time Executive shall receive a lump sum “catch up”
payment equal to the cumulative payments missed on account of the delay,
together with interest, compounded annually, equal to the prime rate (as
published in The Wall Street Journal) in effect as of the Separation from
Service;

 

                (4)           if any of the continued benefits or
insurance coverage under Section 8.3(d) (or reimbursements for the
cost of such benefits or coverage, as applicable) is taxable to Executive, then
to the extent necessary to avoid a violation of section 409A of the Internal
Revenue Code, Executive shall pay for such benefits or coverage for the first
six months following his Separation from Service and shall be reimbursed for
such payments on the first day of the seventh month following his Separation
from Service, together with interest, compounded annually, equal to the prime
rate (as published in The Wall Street Journal) in effect as of the Separation
from Service;

 

                (5)           if any of the continued benefits or
life insurance coverage under Sections 6.9, 6.10 and 6.11 (or reimbursements
for the cost of such benefits or 

 

 

coverage, as applicable) is taxable to Executive,
then to the extent necessary to avoid a violation of section 409A of the
Internal Revenue Code, Executive shall pay for such benefits or coverage for
the first six months following his Separation from Service and shall be
reimbursed for such payments on the first day of the seventh month following
his Separation from Service, together with interest, compounded annually, equal
to the prime rate (as published in The Wall Street Journal) in effect as of the
Separation from Service; and

 

                (6)           any other payment made under this
Agreement upon Executive’s Separation from Service that constitutes a “deferral
of compensation” subject to Section 409A of the Code shall be delayed
until the earlier of the first day of the seventh month following Executive’s
Separation from Service or the date of his death, at which time Executive shall
receive a lump sum “catch up” payment equal to the cumulative payments missed
on account of the delay, together with interest, compounded annually, equal to
the prime rate (as published in The Wall Street Journal) in effect as of the
Separation from Service.

 

11.           REIMBURSEMENT OF FEES. 
Section 10.4(b) of the Employment Agreement is hereby amended
to read as follows:

 

                (b)           If Executive and the Company have a dispute regarding
Executive’s entitlement to compensation and benefits under this Agreement, and
if Executive shall prevail in such dispute, the Company shall reimburse
Executive’s reasonable legal fees and other expenses incurred in such effort.  Executive shall remit to the Company within
75 days of receipt all invoices for fees and expenses so incurred, and the
Company shall reimburse Executive no later than 15 days thereafter.

 

12.           RETIREE BENEFITS.  Section 10.6
of the Employment Agreement is hereby amended to read as follows:

 

                10.6         Retiree Benefits.  If the Executive remains continuously
employed by the Company from the Commencement Date to the date of attainment of
age 62 and thereafter has a Termination of Employment for any reason other than
for Cause, the Executive shall be deemed retiree eligible for purposes of all
of the Company’s equity and employee benefit plans, programs and practices as
such plans, programs and practices may be amended from time to time, except to
the extent inconsistent with the provisions of, or the benefits provided under,
this Agreement.  If the Company determines that the inclusion
of Executive in one or more of its retiree group plans would jeopardize the
tax-qualified status of such plans, the Company shall assist Executive in
finding comparable alternative individual coverage, and the Company shall pay
for the cost of such coverage in excess of the amount, if any, that Executive
would have paid for such coverage under the Company’s group plan.

 

13.           REVISED
DEFINITION OF OTHER ACCRUED BENEFITS.  Section 1.46 of the Employment Agreement
is hereby amended to read as follows:

 

                1.46         “Other Accrued Benefit” means any right to benefits or
payments (other than any deferred compensation subject to Section 409A of the
Code) not expressly provided herein under the terms of the governing policy or
program which has irrevocably accrued as of the Date of Termination.

 

 

14.           GRANTS
SUBJECT TO 2005 MANAGEMENT STOCK OWNERSHIP PROGRAM.  The first sentence of Section 5.1 of the
Employment Agreement is hereby amended to read as follows:

 

                5.1           Initial Grants. 
On the Commencement Date, the Company shall grant to Executive, subject
to the terms of the Company’s 2005 Management Stock Ownership Program (“Stock
Ownership Program”), an Option to purchase 250,000 Common Shares (the “Initial
Option”) and 50,000 Restricted Stock Units (the “Initial RSUs”).

 

15.           MAKE
WHOLE RESTRICTED STOCK UNIT GRANT SUBJECT TO 2005 MANAGEMENT STOCK OWNERSHIP
PROGRAM.  The first sentence
of Section 5.8(a) of the Employment Agreement is hereby amended to
read as follows:

 

                (a)           On the Commencement Date, the Company
shall grant to Executive 157,808 Restricted Stock Units (“Make Whole Restricted
Stock Units”), which Make Whole Restricted Stock Units shall be subject to the
terms of the Company’s 2005 Management Stock Ownership Program.

 

IN WITNESS WHEREOF, this
Amendment to Employment Agreement has been signed by the parties hereto on the
date set forth below.

 

	
  3M COMPANY

  	
   

  	
  GEORGE W. BUCKLEY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Vance D. Coffman

  	
   

  	
  /s/ George W. Buckley

  
	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
   December 16,
  2008

  	
   

  	
  Date 

  	
  December 17, 2008

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