REG - 3M Company - Annual Financial Report <Origin Href="QuoteRef">MMM.N</Origin> - Part 11
01/04/2016 14:49
- Part 11: For the preceding part double click ID:nRSO0010Pj
fair value of restricted stock and restricted stock units that vested during the
years ended December 31, 2015, 2014 and 2013 was $166 million, $145 million and $114 million, respectively. The Company's
actual tax benefits realized for the tax deductions related to the vesting of restricted stock and restricted stock units
for the years ended December 31, 2015, 2014 and 2013 was $62 million, $54 million and $43 million, respectively.
Restricted stock units granted under the 3M 2008 Long-Term Incentive Plan generally vest three years following the grant
date assuming continued employment. Dividend equivalents equal to the dividends payable on the same number of shares of 3M
common stock accrue on these restricted stock units during the vesting period, although no dividend equivalents are paid on
any of these restricted stock units that are forfeited prior to the vesting date. Dividends are paid out in cash at the
vest date on restricted stock units, except for performance shares which do not earn dividends. Since the rights to
dividends are forfeitable, there is no impact on basic earnings per share calculations. Weighted average restricted stock
unit shares outstanding are included in the computation of diluted earnings per share.
Performance Shares
Instead of restricted stock units, the Company makes annual grants of performance shares to members of its executive
management. The 2015 performance criteria for these performance shares (organic volume growth, return on invested capital,
free cash flow conversion, and earnings per share growth) were selected because the Company believes that they are
important drivers of long-term stockholder value. The number of shares of 3M common stock that could actually be delivered
at the end of the three-year performance period may be anywhere from 0% to 200% of each performance share granted,
depending on the performance of the Company during such performance period. Non-substantive vesting requires that expense
for the performance shares be recognized over one or three years depending on when each individual became a 3M executive.
Performance shares do not accrue dividends during the performance period. Therefore, the grant date fair value is
determined by reducing the closing stock price on the date of grant by the net present value of dividends during the
performance period.
The following table summarizes performance share activity for the years ended December 31:
2015 2014 2013
Weighted Weighted Weighted
Average Average Average
Number of Grant Date Number of Grant Date Number of Grant Date
Awards Fair Value Awards Fair Value Awards Fair Value
Undistributed balance -
As of January 1 1,099,752 $ 102.65 895,635 $ 88.12 1,089,084 $ 79.27
Granted 227,798 158.88 305,225 124.89 353,734 96.87
Distributed (323,938) 83.08 (277,358) 84.74 (507,083) 75.16
Performance change (106,760) 127.70 212,461 109.74 (6,949) 77.01
Forfeited (25,660) 125.33 (36,212) 109.44 (33,151) 91.34
As of December 31 871,192 $ 120.89 1,099,752 $ 102.65 895,635 $ 88.12
As of December 31, 2015, there was $17 million of compensation expense that has yet to be recognized related to performance
shares. This expense is expected to be recognized over the remaining weighted-average earnings period of 10 months. During
the years ended December 31, 2015, 2014 and 2013, the total fair value of performance shares that were distributed were $54
million, $35 million and $52 million, respectively. The Company's actual tax benefits realized for the tax deductions
related to the distribution of performance shares for the years ended December 31, 2015, 2014 and 2013 was $15 million, $11
million and $16 million, respectively.
General Employees' Stock Purchase Plan (GESPP):
As of December 31, 2015, shareholders have approved 60 million shares for issuance under the Company's GESPP. Substantially
all employees are eligible to participate in the plan. Participants are granted options at 85% of market value at the date
of grant. There are no GESPP shares under option at the beginning or end of each year because options are granted on the
first business day and exercised on the last business day of the same month.
General Employees' Stock Purchase Plan
2015 2014 2013
Weighted Weighted Weighted
Average Average Average
Shares Exercise Price Shares Exercise Price Shares Exercise Price
Options granted 1,007,669 $ 133.52 1,073,956 $ 118.73 1,259,247 $ 93.46
Options exercised (1,007,669) 133.52 (1,073,956) 118.73 (1,259,247) 93.46
Shares available for grant - December 31 28,104,335 29,112,004 30,185,960
The weighted-average fair value per option granted during 2015, 2014 and 2013 was $23.56, $20.95 and $16.49, respectively.
The fair value of GESPP options was based on the 15% purchase price discount. The Company recognized compensation expense
for GESSP options of $24 million in 2015, $22 million in 2014 and $21 million in 2013.
NOTE 16. Business Segments
3M's businesses are organized, managed and internally grouped into segments based on differences in markets, products,
technologies and services. 3M manages its operations in five business segments: Industrial; Safety and Graphics; Health
Care; Electronics and Energy; and Consumer. 3M's five business segments bring together common or related 3M technologies,
enhancing the development of innovative products and services and providing for efficient sharing of business resources.
Transactions among reportable segments are recorded at cost. 3M is an integrated enterprise characterized by substantial
intersegment cooperation, cost allocations and inventory transfers. Therefore, management does not represent that these
segments, if operated independently, would report the operating income information shown. The difference between operating
income and pre-tax income relates to interest income and interest expense, which are not allocated to business segments.
Effective in the third quarter of 2015, within the Health Care business segment, the Company formed the Oral Care Solutions
Division, which combined the former 3M ESPE and 3M Unitek divisions.
Business Segment Products
Business Segment Major Products
Industrial Tapes, coated, nonwoven and bonded abrasives, adhesives, advanced ceramics, sealants, specialty materials, filtration products, closure systems for personal hygiene products, acoustic systems products, automotive components, abrasion-resistant films, structural adhesives and paint finishing and detailing products
Safety and Graphics Personal protection products, traffic safety and security products, commercial graphics systems, commercial cleaning and protection products, floor matting, roofing granules for asphalt shingles, and fall protection products
Health Care Medical and surgical supplies, skin health and infection prevention products, drug delivery systems, dental and orthodontic products, health information systems and food safety products
Electronics and Energy Optical films solutions for electronic displays, packaging and interconnection devices, insulating and splicing solutions for the electronics, telecommunications and electrical industries, touch screens and touch monitors, renewable energy component solutions, and infrastructure protection products
Consumer Sponges, scouring pads, high-performance cloths, consumer and office tapes, repositionable notes, indexing systems, construction and home improvement products, home care products, protective material products, and consumer and office tapes and adhesives
Business Segment Information
Net Sales Operating Income
(Millions) 2015 2014 2013 2015 2014 2013
Industrial $ 10,328 $ 10,990 $ 10,657 $ 2,263 $ 2,389 $ 2,307
Safety and Graphics 5,515 5,732 5,584 1,305 1,296 1,227
Health Care 5,420 5,572 5,334 1,724 1,724 1,672
Electronics and Energy 5,220 5,604 5,393 1,102 1,115 954
Consumer 4,422 4,523 4,435 1,046 995 945
Corporate and Unallocated 1 4 8 (355) (251) (321)
Elimination of Dual Credit (632) (604) (540) (139) (133) (118)
Total Company $ 30,274 $ 31,821 $ 30,871 $ 6,946 $ 7,135 $ 6,666
Assets Depreciation & Amortization Capital Expenditures
(Millions) 2015 2014 2013 2015 2014 2013 2015 2014 2013
Industrial $ 9,203 $ 8,508 $ 8,833 $ 374 $ 383 $ 373 $ 317 $ 395 $ 511
Safety and Graphics 7,564 4,939 5,122 245 234 255 199 221 207
Health Care 4,403 4,344 4,329 179 181 171 168 169 120
Electronics and Energy 4,815 5,116 5,336 291 271 260 211 232 261
Consumer 2,393 2,434 2,516 108 108 106 124 111 128
Corporate and Unallocated 4,340 5,868 7,168 238 231 206 442 365 438
Total Company $ 32,718 $ 31,209 $ 33,304 $ 1,435 $ 1,408 $ 1,371 $ 1,461 $ 1,493 $ 1,665
Corporate and unallocated operating income includes a variety of miscellaneous items, such as corporate investment gains
and losses, certain derivative gains and losses, certain insurance-related gains and losses, certain litigation and
environmental expenses, corporate restructuring charges and certain under- or over-absorbed costs (e.g. pension,
stock-based compensation) that the Company may choose not to allocate directly to its business segments. Because this
category includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.
3M business segment reporting measures include dual credit to business segments for certain U.S. sales and related
operating income. Management evaluates each of its five business segments based on net sales and operating income
performance, including dual credit U.S. reporting to further incentivize U.S. sales growth. As a result, 3M provides
additional ("dual") credit to those business segments selling products in the U.S. to an external customer when that
segment is not the primary seller of the product. For example, certain respirators are primarily sold by the Personal
Safety Division within the Safety and Graphics business segment; however, the Industrial business segment also sells this
product to certain customers in its U.S. markets. In this example, the non-primary selling segment (Industrial) would also
receive credit for the associated net sales it initiated and the related approximate operating income. The assigned
operating income related to dual credit activity may differ from operating income that would result from actual costs
associated with such sales. The offset to the dual credit business segment reporting is reflected as a reconciling item
entitled "Elimination of Dual Credit," such that sales and operating income for the U.S. in total are unchanged.
NOTE 17. Geographic Areas
Geographic area information is used by the Company as a secondary performance measure to manage its businesses. Export
sales and certain income and expense items are generally reported within the geographic area where the final sales to 3M
customers are made.
Property, Plant and
Net Sales Operating Income Equipment - net
(Millions) 2015 2014 2013 2015 2014 2013 2015 2014
United States $ 12,049 $ 11,714 $ 11,151 $ 2,647 $ 2,540 $ 2,210 $ 4,838 $ 4,619
Asia Pacific 9,041 9,418 9,047 2,580 2,487 2,386 1,647 1,798
Europe, Middle East and Africa 6,228 7,198 7,085 1,017 1,234 1,168 1,531 1,502
Latin America and Canada 2,982 3,504 3,611 706 867 908 499 570
Other Unallocated (26) (13) (23) (4) 7 (6) - -
Total Company $ 30,274 $ 31,821 $ 30,871 $ 6,946 $ 7,135 $ 6,666 $ 8,515 $ 8,489
Asia Pacific included China/Hong Kong net sales to customers of $2.945 billion in 2015, which approached 10 percent of
consolidated worldwide sales. China/Hong Kong net property, plant and equipment (PP&E) was $584 million at December 31,
2015.
NOTE 18. Quarterly Data (Unaudited)
(Millions, except per-share amounts) First Second Third Fourth Year
2015 Quarter Quarter Quarter Quarter 2015
Net sales $ 7,578 $ 7,686 $ 7,712 $ 7,298 $ 30,274
Cost of sales 3,821 3,858 3,877 3,827 15,383
Net income including noncontrolling interest 1,201 1,303 1,298 1,039 4,841
Net income attributable to 3M 1,199 1,300 1,296 1,038 4,833
Earnings per share attributable to 3M common shareholders - basic 1.88 2.06 2.09 1.69 7.72
Earnings per share attributable to 3M common shareholders - diluted 1.85 2.02 2.05 1.66 7.58
(Millions, except per-share amounts) First Second Third Fourth Year
2014 Quarter Quarter Quarter Quarter 2014
Net sales $ 7,831 $ 8,134 $ 8,137 $ 7,719 $ 31,821
Cost of sales 4,031 4,184 4,205 4,027 16,447
Net income including noncontrolling interest 1,225 1,283 1,311 1,179 4,998
Net income attributable to 3M 1,207 1,267 1,303 1,179 4,956
Earnings per share attributable to 3M common shareholders - basic 1.83 1.94 2.02 1.85 7.63
Earnings per share attributable to 3M common shareholders - diluted 1.79 1.91 1.98 1.81 7.49
Gross profit is calculated as net sales minus cost of sales.
Refer to Note 4 for discussion of "Restructuring Actions", which reduced diluted earnings per share by $0.14 in the fourth
quarter of 2015.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
a. The Company carried out an evaluation, under the supervision and with the participation of its management, including the
Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's
"disclosure controls and procedures" (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by
this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective.
b. The Company's management is responsible for establishing and maintaining an adequate system of internal control over
financial reporting, as defined in the Exchange Act Rule 13a-15(f). Management conducted an assessment of the Company's
internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations
of the Treadway Commission in Internal Control - Integrated Framework (2013). Based on the assessment, management concluded
that, as of December 31, 2015, the Company's internal control over financial reporting is effective. Management's
assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2015 excluded
Capital Safety Group S.A.R.L. and Polypore International, Inc.'s Separation Media Business, which were both acquired by the
Company in August 2015 in purchase business combinations. These acquired businesses' total assets and total net sales, in
the aggregate, represented less than 2 percent and less than 1 percent, respectively, of the Company's consolidated
financial statement amounts as of and for the year ended December 31, 2015. Companies are allowed to exclude acquisitions
from their assessment of internal control over financial reporting during the first year of acquisition while integrating
the acquired company under guidelines established by the Securities and Exchange Commission. The Company's internal control
over financial reporting as of December 31, 2015 has been audited by PricewaterhouseCoopers LLP, an independent registered
public accounting firm, as stated in their report which is included herein, which expresses an unqualified opinion on the
effectiveness of the Company's internal control over financial reporting as of December 31, 2015.
c. There was no change in the Company's internal control over financial reporting that occurred during the Company's most
recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
The Company is implementing an enterprise resource planning ("ERP") system on a worldwide basis, which is expected to
improve the efficiency of certain financial and related transaction processes. The gradual implementation is expected to
occur in phases over the next several years. The implementation of a worldwide ERP system will likely affect the processes
that constitute our internal control over financial reporting and will require testing for effectiveness.
The Company completed implementation with respect to elements of certain processes/sub-processes in limited
subsidiaries/locations and will continue to roll-out the ERP system over the next several years. As with any new
information technology application we implement, this application, along with the internal controls over financial
reporting included in this process, was appropriately considered within the testing for effectiveness with respect to the
implementation in these instances. We concluded, as part of our evaluation described in the above paragraphs, that the
implementation of ERP in these circumstances has not materially affected our internal control over financial reporting.
Item 9B. Other Information.
None.
PART III
Documents Incorporated by Reference
In response to Part III, Items 10, 11, 12, 13 and 14, parts of the Company's definitive proxy statement (to be filed
pursuant to Regulation 14A within 120 days after Registrant's fiscal year-end of December 31, 2015) for its annual meeting
to be held on May 10, 2016, are incorporated by reference in this Form 10-K.
Item 10. Directors, Executive Officers and Corporate Governance.
The information relating to directors and nominees of 3M is set forth under the caption "Proposal No. 1" in 3M's proxy
statement for its annual meeting of stockholders to be held on May 10, 2016 ("3M Proxy Statement") and is incorporated by
reference herein. Information about executive officers is included in Item 1 of this Annual Report on Form 10-K. The
information required by Items 405, 407(c)(3), (d)(4) and (d)(5) of Regulation S-K is contained under the captions "Section
16(a) Beneficial Ownership Reporting Compliance," "Corporate Governance At 3M - Identification, Evaluation, and Selection
of Nominees,," "-Nominees Proposed By Stockholders For Consideration By the Committee," "-Stockholder Nominations" and
"-Role of the Nominating and Governance Committee" and "Corporate Governance At 3M -- Board and Committee Information -
Audit Committee" of the 3M Proxy Statement and such information is incorporated by reference herein.
Code of Ethics. All of our employees, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting
Officer and Controller, are required to abide by 3M's long-standing business conduct policies to ensure that our business
is conducted in a consistently legal and ethical manner. 3M has posted the text of such code of ethics on its website
(http://www.3M.com/businessconduct). At the same website, any future amendments to the code of ethics will also be posted.
Any person may request a copy of the code of ethics, at no cost, by writing to us at the following address:
3M Company
3M Center, Building 220-11W-09
St. Paul, MN 55144-1000
Attention: Vice President, Compliance and Business Conduct
Item 11. Executive Compensation.
The information required by Item 402 of Regulation S-K is contained under the captions "Executive Compensation" (excluding
the information under the caption "- Compensation Committee Report") and "Director Compensation and Stock Ownership
Guidelines" of the 3M Proxy Statement. Such information is incorporated by reference.
The information required by Items 407(e)(4) and (e)(5) of Regulation S-K is contained in the "Executive Compensation"
section under the captions "Compensation Committee Report" and "Compensation Committee Interlocks and Insider
Participation" of the 3M Proxy Statement. Such information (other than the Compensation Committee Report, which shall not
be deemed to be "filed") is incorporated by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information relating to security ownership of certain beneficial owners and management is set forth under the
designation "Security Ownership of Management" and "Security Ownership of Certain Beneficial Owners" in the 3M Proxy
Statement and such information is incorporated by reference herein.
Equity compensation plans information as of December 31, 2015 follows:
Equity Compensation Plans Information (1)
A B C
Number of Weighted- Number of securities
securities to be average exercise remaining available for
issued upon price of future issuance under
exercise of outstanding equity compensation
outstanding options, plans (excluding
options, warrants warrants and securities reflected in
Plan Category and rights rights column (A))
Equity compensation plans approved by security holders
Stock options 38,522,445 $ 102.01 -
Restricted stock units 2,441,088 -
Performance shares 871,192 -
Non-employee director deferred stock units 241,156 -
Total 42,075,881 20,328,681
Employee stock purchase plan - 28,104,335
Subtotal 42,075,881 48,433,016
Total 42,075,881 48,433,016
(1) In column B, the weighted-average exercise price is only applicable to stock options. In column C, the number of
securities remaining available for future issuance for stock options, restricted stock units, and stock awards for
non-employee directors is approved in total and not individually with respect to these items.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
With respect to certain relationships and related transactions as set forth in Item 404 of Regulation S-K, no matters
require disclosure with respect to transactions with related persons. The information required by Item 404(b) and Item
407(a) of Regulation S-K is contained under the section "Corporate Governance at 3M" under the captions "Director
Independence" and "Related Person Transaction Policy and Procedures" of the 3M Proxy Statement and such information is
incorporated by reference herein.
Item 14. Principal Accounting Fees and Services.
The information relating to principal accounting fees and services is set forth in the section entitled "Audit Committee
Matters" under the designation "Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of the
Independent Accounting Firm" and "Fees of the Independent Accounting Firm" in the 3M Proxy Statement and such information
is incorporated by reference herein.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a) (1) Financial Statements. The consolidated financial statements filed as part of this report are listed in the index to
financial statements on page 47 as follows:
Page Number
Report of Independent Registered Public Accounting Firm 49
Consolidated Statement of Income for the years ended December 31, 2015, 2014 and 2013 50
Consolidated Statement of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013 51
Consolidated Balance Sheet at December 31, 2015 and 2014 52
Consolidated Statement of Changes in Equity for the years ended December 31, 2015, 2014 and 2013 53
Consolidated Statement of Cash Flows for the years ended December 31, 2015, 2014 and 2013 54
Notes to Consolidated Financial Statements 55-117
(a) (2) Financial Statement Schedules. Financial statement schedules are omitted because of the absence of the conditions
under which they are required or because the required information is included in the Consolidated Financial Statements or
the notes thereto. The financial statements of unconsolidated subsidiaries are omitted because, considered in the
aggregate, they would not constitute a significant subsidiary.
(a) (3) Exhibits. The exhibits are either filed with this report or incorporated by reference into this report. Exhibit
numbers 10.1 through 10.29 are management contracts or compensatory plans or arrangements. See (b) Exhibits, which follow.
(b) Exhibits.
(3) Articles of Incorporation and bylaws
(3.1) Certificate of incorporation, as amended as of May 11, 2007, is incorporated by reference from our Form 8-K dated May 14, 2007.
(3.2) Amended and Restated Bylaws, as adopted as of November 10, 2015, are incorporated by reference from our Form 8-K dated November 10, 2015.
(4) Instruments defining the rights of security holders, including indentures:
(4.1) Indenture, dated as of November 17, 2000, between 3M and The Bank of New York Mellon Trust Company, N.A., as successor trustee, with respect to 3M's senior debt securities, is incorporated by reference from our Form 8-K dated December 7, 2000.
(4.2) First Supplemental Indenture, dated as of July 29, 2011, to Indenture dated as of November 17, 2000, between 3M and The Bank of New York Mellon Trust Company, N.A., as successor trustee, with respect to 3M's senior debt securities, is incorporated by reference from our Form 10-Q for the quarter ended June 30, 2011.
(10) Material contracts and management compensation plans and arrangements:
(10.1) 3M 2008 Long-Term Incentive Plan (including amendments through February 2, 2016) is filed herewith.
(10.2) Form of Agreement for Stock Option Grants to Executive Officers under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated May 13, 2008.
(10.3) Form of Stock Option Agreement for options granted to Executive Officers under the 3M 2008 Long-Term Incentive Plan, commencing February 9, 2010, is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.4) Form of Restricted Stock Unit Agreement for restricted stock units granted to Executive Officers under the 3M Long-Term Incentive Plan, effective February 9, 2010, is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.5) Form of 3M 2010 Performance Share Award under the 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 8-K dated March 4, 2010.
(10.6) Form of Stock Option Agreement for U.S. Employees under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2008.
(10.7) Form of Restricted Stock Unit Agreement for U.S. Employees under 3M 2008 Long-Term Incentive Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2008.
(10.8) 3M 2005 Management Stock Ownership Program (including amendments through February 2, 2016) is filed herewith.
(10.9) Form of award agreement for non-qualified stock options granted under the 2005 Management Stock Ownership Program, is incorporated by reference from our Form 8-K dated May 16, 2005.
(10.10) 3M VIP Excess Plan is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.11) Amendment of 3M VIP Excess Plan is incorporated by reference from our Form 8-K dated November 24, 2009.
(10.12) 3M VIP (Voluntary Investment Plan) Plus is incorporated by reference from Registration Statement No. 333-73192 on Form S-8, filed on November 13, 2001.
(10.13) Amendment of 3M VIP Plus is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.14) 3M Deferred Compensation Plan, as amended through February 2008, is incorporated by reference from our Form 8-K dated February 14, 2008.
(10.15) Amendment of 3M Deferred Compensation Plan is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.16) 3M Deferred Compensation Excess Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.17) 3M Performance Awards Deferred Compensation Plan is incorporated by reference from our Form 10-K for the year ended December 31, 2009.
(10.18) 3M Executive Annual Incentive Plan is incorporated by reference from our Form 8-K dated May 14, 2007.
(10.19) Description of changes to 3M Compensation Plan for Non-Employee Directors is incorporated by reference from our Form 8-K dated August 8, 2005.
(10.20) 3M Compensation Plan for Non-Employee Directors, as amended, through November 8, 2004, is incorporated by reference from our Form 10-K for the year ended December 31, 2004.
(10.21) Amendment of 3M Compensation Plan for Non-Employee Directors is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.22) Amendment of 3M Compensation Plan for Non-Employee Directors as of August 12, 2013, is incorporated by reference from our Form 10-Q for the quarter ended September 30, 2013.
(10.23) 3M Executive Life Insurance Plan, as amended, is incorporated by reference from our Form 10-K for the year ended December 31, 2003.
(10.24) Summary of Personal Financial Planning Services for 3M Executives is incorporated by reference from our Form 10-K for the year ended December 31, 2003.
(10.25) 3M policy on reimbursement of incentive payments is incorporated by reference from our Form 10-K for the year ended December 31, 2006.
(10.26) Amended and Restated 3M Nonqualified Pension Plan I is incorporated by reference from our Form 8-K dated December 23, 2008.
(10.27) Amended and Restated 3M Nonqualified Pension Plan II is incorporated by reference from our Form 8-K dated December 23, 2008.
(10.28) 3M Nonqualified Pension Plan III is incorporated by reference from our Form 8-K dated November 14, 2008.
(10.29) Policy on Reimbursement of Incentive Compensation (effective May 11, 2010) is incorporated by reference from our Form 10-Q dated August 4, 2010.
(10.30) Amended and restated five-year credit agreement as of August 5, 2014, is incorporated by reference from our Form 8-K dated August 8, 2014.
(10.31) Registration Rights Agreement as of August 4, 2009, between 3M Company and State Street Bank and Trust Company as Independent Fiduciary of the 3M Employee Retirement Income Plan, is incorporated by reference from our Form 8-K dated August 5, 2009.
Filed herewith, in addition to items, if any, specifically identified above:
(12) Calculation of ratio of earnings to fixed charges.
(18) Preferability letter regarding change in accounting principles.
(21) Subsidiaries of the Registrant.
(23) Consent of independent registered public accounting firm.
(24) Power of attorney.
(31.1) Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(31.2) Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(32.1) Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(32.2) Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
(95) Mine Safety Disclosures.
(101) The following financial information from 3M Company's Annual Report on Form 10-K for the period ended December 31, 2015, filed with the SEC on February 11, 2016, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statement of
Income for the years ended December 31, 2015, 2014 and 2013, (ii) the Consolidated Statement of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013, (iii) the Consolidated Balance Sheet at December 31, 2015 and 2014, (iv) the
Consolidated Statement of Changes in Equity for the years ended December 31, 2015, 2014 and 2013, (v) the Consolidated Statement of Cash Flows for the years ended December 31, 2015, 2014 and 2013, and (vi) Notes to Consolidated Financial Statements.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
3M COMPANY
By /s/ Nicholas C. Gangestad
Nicholas C. Gangestad,
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
February 11, 2016
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities indicated on February 11, 2016.
Signature Title
Inge G. Thulin Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer and Director)
Eric D. Hammes Vice President, Controller and Chief Accounting Officer
(Principal Accounting Officer)
Linda G. Alvarado Director
Sondra L. Barbour Director
Thomas K. Brown Director
Vance D. Coffman Director
David B. Dillon Director
Michael L. Eskew Director
Herbert L. Henkel Director
Muhtar Kent Director
Edward M. Liddy Director
Gregory R. Page Director
Robert J. Ulrich Director
Nicholas C. Gangestad, by signing his name hereto, does hereby sign this document pursuant to powers of attorney duly
executed by the other persons named, filed with the Securities and Exchange Commission on behalf of such other persons, all
in the capacities and on the date stated, such persons constituting a majority of the directors of the Company.
By /s/ Nicholas C. Gangestad
Nicholas C. Gangestad, Attorney-in-Fact
EXHIBIT 10.1
(Including amendments
through February 2, 2016)
3M 2008 LONG-TERM INCENTIVE PLAN
1. Purposes.
The purposes of this plan are to help 3M attract, retain and motivate outstanding employees to increase shareholder value
by contributing to the long-term growth and success of its business; to more closely align the financial interests of these
employees with those of 3M's other shareholders by linking a significant portion of their compensation to the performance
of the Company and its stock price; to encourage employees to acquire an equity stake in the Company; to help 3M attract
and retain well-qualified individuals to serve as nonemployee members of its Board of Directors; and to promote the
alignment of interests of these nonemployee directors with those of 3M's other shareholders by providing all or a portion
of their compensation for serving as directors in the form of 3M common stock.
This plan is intended to replace and succeed the 2005 Management Stock Ownership Program, the 3M Performance Unit Plan, and
the 1992 Directors Stock Ownership Program.
2. Definitions.
(a) "Affiliate" means any entity that is directly or indirectly controlled by the Company or in which the Company
has a significant equity interest, as determined by the Committee.
(b) "Award" means any Incentive Stock Option, Nonqualified Stock Option, Progressive Stock Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Unit, Performance Share or other Stock Award
granted to a Participant under this Plan.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Compensation Committee of 3M's Board of Directors.
(e) "Common Stock" means the common stock of 3M Company with a par value of $0.01 per share.
(f) "Company" means 3M Company, a Delaware corporation.
(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.
(h) "Dividend Equivalents" means, on any dividend record date, that amount of cash or shares equal in value to
the dividend payable on shares of Common Stock as declared by 3M's Board of Directors with respect to such dividend record
date.
(i) "Fair Market Value" means the closing price for a share of Common Stock as reported on the New York Stock
Exchange Composite Transactions.
(j) "Full Value Award" means any Award denominated or paid in shares of Common Stock other than an Option or
Stock Appreciation Right.
(k) "Grant Date" means the effective date of an Award granted to a Participant under this Plan.
(l) "Incentive Stock Option" means an Option granted under this Plan which satisfies the requirements of section
422 of the Code and is so designated in the written or electronic documents evidencing such Option.
(m) "Nonqualified Stock Option" means an Option granted under this Plan which is not an Incentive Stock Option.
(n) "Option" means a Participant's right to purchase a specified number of shares of Common Stock at a specified
price for a specified period of time.
(o) "Participant" means an employee of the Company or an Affiliate whose participation in the Plan has been
approved by the Committee, or a nonemployee member of 3M's Board of Directors.
(p) "Performance Criteria" means such internal performance criteria for the Company or any business segment
thereof as determined by the Committee with respect to each Performance Unit or Performance Share and may include any one
or more of several criteria, such as, but not limited to, return on capital employed, return on assets or net assets, net
sales, sales growth, sales or sales growth from new products, market share, cash flow or cash flow conversion, earnings per
share, return on equity, stock price, gross margin or income, operating margin or income, total shareholder return,
stockholders' equity, retained earnings, economic value added, economic profit (after-tax operating income, excluding
non-recurring items, less the cost of capital), earnings before interest and taxes, EBITDA, operating income, improvements
in certain asset or financial measures (including working capital, the ratio of sales to net working capital and the ratio
of debt to equity or to EBITDA), reductions in certain asset or cost areas (including reductions in inventories or accounts
receivable or reductions in laboratory, engineering, sales or administrative costs) or in debt, net income or variations of
income criteria in varying time periods, adjusted net income, employee diversity, employee engagement or satisfaction,
customer satisfaction, or general comparisons with other peer companies or industry groups or classifications with regard
to one or more of these criteria. The criteria may measure performance on the basis of either the amount of a particular
item during the Performance Period or on increases or decreases in the amount of such item during the Performance Period.
Such criteria shall include a target for payment of the Performance Unit or Performance Share at full face value and upper
and lower limits for the measurement of payment to Participants.
(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.
(r)
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