REG - 3M Company - Annual Financial Report <Origin Href="QuoteRef">MMM.N</Origin> - Part 13
01/04/2016 14:49
- Part 13: For the preceding part double click ID:nRSO0010Pl
this 2005 Program and to such other terms, conditions
and restrictions as may be established by the Committee.
(b) "Board of Directors" shall mean the Board of Directors of 3M Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it may be amended from time to time. For purposes of
this 2005 Program, references to sections of the Code shall be deemed to include references to any applicable regulations
thereunder and any successor or similar provisions.
(d) "Committee" shall mean the Compensation Committee established by the Board of Directors acting without the
participation of any member who may have received a grant or award under the 2005 Program or any other similar plan or
program of the Company (except those limited to participation by directors) during the previous one year period, or such
other committee of disinterested administrators established by the Board of Directors to comply with Rule 16b-3 promulgated
by the Securities and Exchange Commission, as amended from time to time.
(e) "Common Stock" shall mean the common stock, with a par value of $0.01 per share, of 3M Company.
(f) "Company" shall mean 3M Company and such subsidiaries or affiliates as may be designated by the Board of
Directors from time to time.
(g) "Conditions" shall mean the condition that the Restricted Period stipulated by the Committee at the time of
grants of Restricted Stock or Restricted Stock Units shall have expired or terminated and that any other conditions
prescribed by the Committee regarding a Participant's continued employment by the Company or the Company's performance
during the Restricted Period shall have been satisfied, or any other conditions stipulated by the Committee with respect to
Stock Awards.
(h) "Disqualifying Termination" shall mean a termination of a Participant's employment with the Company (i) due
to a material violation of any Company policy, including, without limitation, any policy contained in the Company's
Business Conduct Manual, or (ii) due to embezzlement from or theft of property belonging to the Company.
(i) "Dividend Equivalents" shall mean that sum of cash or Common Stock of equivalent value equal to the amount
of cash or stock dividends paid upon Common Stock subject to any Awards under the 2005 Program, prior to such time as the
Participant otherwise becomes entitled thereto as a holder of record.
(j) "Fair Market Value" shall mean the closing price for a share of Common Stock as reported on the New York
Stock Exchange Composite Transactions.
(k) "Grant Date" shall mean the effective date of an Award granted to a Participant under the 2005 Program.
(l) 'Incentive Stock Option" shall mean an Option granted to a Participant under the 2005 Program which
satisfies the requirements of section 422 of the Code and is so designated in the written or electronic documents
evidencing such Option.
(m) "MSOP Administrator" shall mean the entity retained by the Company to administer the 2005 Program.
(n) "Nonqualified Stock Option" shall mean an Option granted to a Participant under the 2005 Program which is not
an Incentive Stock Option.
(o) "Option" shall mean a Participant's right to purchase the number of shares of Common Stock approved by the
Company, subject to the terms and conditions of the 2005 Program, and the term shall include both Incentive Stock Options
and Nonqualified Options.
(p) "Participant" shall mean any employee of the Company who is designated as a Participant by the Committee.
(q) "2002 Program" shall mean the Company's 2002 Management Stock Ownership Program.
(r) "2005 Program" shall mean the Company's 2005 Management Stock Ownership Program.
(s) "Progressive Stock Option" shall mean an Option granted to a Participant under the 2005 Program upon the
exercise of a Nonqualified Stock Option granted under the 2002 Program or its predecessors where such Participant makes
payment for all or part of the purchase price and withholding taxes in shares of Common Stock.
(t) "Restricted Period" shall mean that period of time determined by the Committee during which a Participant
shall not be permitted to sell or transfer shares of Restricted Stock granted under the 2005 Program, or prior to the time
when a Participant's interest in Restricted Stock Units granted under this 2005 Program shall have vested.
(u) "Restricted Stock" shall mean that Common Stock granted to a Participant subject to the Conditions
established by the Committee.
(v) "Restricted Stock Unit" shall mean a stock unit granted to a Participant with a value equal to the value of a
share of Common Stock, subject to the Conditions established by the Committee.
(w) "Retires" or "Retirement" shall mean the termination of a Participant's employment with the Company (i) after
attaining age 55 with at least five years of employment service or after attaining age 65, or (ii) if the Participant is
covered by a retirement plan of the Company which enables such Participant to retire before attaining age 55 with at least
five years of employment service or age 65, after meeting the requirements for retirement under a retirement plan of the
Company.
(x) "Stock Appreciation Right" shall mean a Participant's right to receive an amount of cash or shares of Common
Stock equal to the excess of the Fair Market Value of a specified number of shares of Common Stock on the date the right is
exercised over the Fair Market Value of such number of shares of Common Stock on the Grant Date.
(y) "Stock Award" shall mean any award of Common Stock under the Program and may include Restricted Stock awards
or other awards of Common Stock as determined appropriate by the Committee.
SECTION 3 SHARES AVAILABLE FOR AWARDS
The number of shares of Common Stock that may be issued or delivered as a result of Options, Restricted Stock, Restricted
Stock Units or other Stock Awards granted during the term of the 2005 Program, or made subject to Stock Appreciation Rights
granted during the term of the 2005 Program, is 36,750,000. Of this total, no more than 36,750,000 shares may be granted
as Incentive Stock Options. Any shares issued or delivered as a result of Awards granted during the term of this 2005
Program other than Options or Stock Appreciation Rights settled exclusively in Common Stock shall be counted against the
36,750,000 share limit described above as 2.45 shares for every one share issued in connection with such Award or by which
the Award is valued by reference. Any shares of Common Stock made subject to Stock Appreciation Rights granted during the
term of this 2005 Program and settled exclusively in Common Stock shall be counted in full against the 36,750,000 share
limit regardless of the number of shares of Common Stock actually issued upon the exercise of such Stock Appreciation
Rights. The necessary shares shall be made available at the discretion of the Board of Directors from authorized but
unissued shares, treasury shares, or shares reacquired by the Company under corporate repurchase programs. The payment of
stock dividends and dividend equivalents settled in Common Stock in conjunction with outstanding Awards shall not be
counted against the shares available for issuance.
SECTION 4 ADMINISTRATION
The 2005 Program shall be administered by the Committee, which shall have full power and authority to select the
Participants, interpret the Program, continue, accelerate or suspend the exercisability or vesting of an Award, and adopt
such rules and procedures for operating the Program as it may deem necessary or appropriate. Its power and authority shall
include, but not be limited to, making any amendments to or modifications of the 2005 Program which may be required or
necessary to make such Program comply with the provisions of any laws or regulations of any country or unit thereof in
which the Company operates. To do so, the Committee may establish different terms and conditions for Awards made to
Participants who live in or are subject to taxation in one or more countries other than the United States in order to
accommodate the tax or other relevant laws of such countries. The Committee may adopt one or more supplements or sub-plans
under the Program to implement these different terms and conditions.
SECTION 5 DELEGATION OF AUTHORITY
To the extent permitted by Delaware law, the Committee may delegate to officers of the Company any or all of its duties,
power and authority under the 2005 Program subject to such conditions or limitations as the Committee may establish;
provided, however, that no officer shall have or obtain the authority to grant Awards to (i) himself or herself, or (ii)
any person subject to section 16 of the Securities Exchange Act of 1934.
SECTION 6 TERMS OF AWARDS
The Committee shall determine the type or types of Awards to be granted to each Participant, which shall be evidenced by
such written or electronic documents as the Committee shall authorize. No Participant shall be granted Awards under the
2005 Program with respect to more than 3,000,000 shares of Common Stock. The following types of Awards may be granted
under this 2005 Program:
(a) Incentive Stock Options - Incentive Stock Options granted hereunder shall have a purchase price equal to one
hundred percent (100%) of the Fair Market Value of a share of Common Stock on the Grant Date. Incentive Stock Options
granted hereunder shall become exercisable at such time as shall be established by the Committee and reflected in the
documents evidencing such Options, and unless sooner terminated shall expire on the tenth anniversary of the Grant Date.
(b) Nonqualified Stock Options - Nonqualified Stock Options granted hereunder shall have a purchase price equal
to no less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the Grant Date.
Nonqualified Stock Options granted hereunder shall become exercisable and shall expire at such time or times as shall be
established by the Committee and reflected in the documents evidencing such Options; provided, however, that no
Nonqualified Stock Option shall expire later than ten years after the Grant Date (except that the Committee may extend the
exercise period for Nonqualified Stock Options granted to Participants in any country or countries for an additional period
of up to one year if and to the extent necessary to prevent adverse tax consequences to such Participants under the laws of
such country).
Notwithstanding anything to the contrary in this Section, the vested and exercisable portion of an Option or Stock
Appreciation Right that remains outstanding immediately prior to the expiration of its full term on or after April 1, 2016
(or, if applicable, the expiration of the limited post-termination exercise window occurring on or after April 1, 2016)
shall be deemed to have been exercised by the Participant at such time if (i) the Participant has accepted the Option or
Stock Appreciation Right, (ii) the Fair Market Value of one share of Common Stock exceeds the applicable exercise price per
share, and (iii) either (A) such Option or Stock Appreciation Right remains outstanding on the last day of its full term or
(B) the Participant's Option or Stock Appreciation Right otherwise would terminate prior to the last day of its full term
as a result of the Participant's death. For the avoidance of doubt, an Option or Stock Appreciation Right that terminates
upon the expiration of its limited post-termination exercise window shall not be deemed to have remained outstanding on the
last day of its full term for purposes of clause (iii) in the preceding sentence. In the event an Option or Stock
Appreciation Right is exercised pursuant to this Section, the Company shall deliver to the Participant the number of shares
of Common Stock for which the Option or Stock Appreciation Right was deemed exercised, less the number of shares of Common
Stock withheld for the payment of the total purchase price and withholding taxes.
(c) Progressive Stock Options - Whenever a Participant exercises a Nonqualified Stock Option granted under the
2002 Program or its predecessors and makes payment of all or part of the purchase price and withholding taxes, if any, in
Common Stock, the Committee may in its discretion grant such Participant a Progressive Stock Option. The number of shares
subject to such Progressive Stock Option shall be equal to the number of shares of Common Stock utilized by the Participant
to effect payment of the purchase price and withholding taxes, if any, for such Nonqualified Stock Option. Each
Progressive Stock Option granted hereunder shall have a purchase price equal to one hundred percent (100%) of the Fair
Market Value of a share of Common Stock on the date of exercise of the Nonqualified Stock Option, which shall be the Grant
Date of such Progressive Stock Option. Each Progressive Stock Option granted hereunder shall be exercisable six months
after the Grant Date, and shall expire at the same time the Nonqualified Option exercised by the Participant would have
expired.
(d) Stock Appreciation Rights - The term of a Stock Appreciation Right shall be fixed by the Committee and set
forth in the documents evidencing such right, but no Stock Appreciation Right shall be exercisable more than ten years
after the Grant Date. Each Stock Appreciation Right shall become exercisable at the time or times determined by the
Committee and set forth in the documents evidencing such right. Each Stock Appreciation Right granted hereunder shall have
a grant price equal to one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the Grant Date.
(e) Restricted Stock - At the time a grant of Restricted Stock is made, the Committee, in its sole discretion,
shall establish a Restricted Period and such additional Conditions as may be deemed appropriate for the incremental lapse
or complete lapse of restrictions with respect to all or any portion of the shares of Common Stock represented by the
Restricted Stock. The Committee may also, in its sole discretion, shorten or terminate the Restricted Period or waive any
Conditions with respect to all or any portion of the shares of Common Stock represented by the Restricted Stock. The
Participant shall generally have the rights and privileges of a stockholder as to such Restricted Stock, including the
right to vote such Restricted Stock, except that the following restrictions shall apply: (i) the Participant shall not be
entitled to delivery of the shares of such Restricted Stock until the expiration or termination of the Restricted Period
and the satisfaction of any other Conditions prescribed by the Committee, if any; (ii) none of the Restricted Stock may be
sold, transferred, assigned, pledged, or otherwise encumbered or disposed of during the Restricted Period and until the
satisfaction of other Conditions prescribed by the Committee, if any; and (iii) all of the Restricted Stock shall be
forfeited and all rights of the Participant shall terminate without further obligation on the part of the Company unless
the Participant shall have remained a regular full-time employee of the Company or any of its subsidiaries or affiliates
until the expiration or termination of the Restricted Period and the satisfaction of the other Conditions prescribed by the
Committee, if any. During the Restricted Period, at the sole discretion of the Committee, Dividend Equivalents may be
either currently paid or withheld by the Company for the Participant's account, and interest may be paid on the amount of
cash dividends withheld at a rate and under such terms as determined by the Committee. Cash or stock dividends so withheld
by the Committee shall not be subject to forfeiture. Upon the forfeiture of any Restricted Stock, such shares of Common
Stock represented by the Restricted Stock shall be transferred to the Company without further action by the Participant.
(f) Restricted Stock Units - At the time a grant of Restricted Stock Units is made, the Committee, in its sole
discretion, shall establish a Restricted Period and such additional Conditions as may be deemed appropriate for the
incremental lapse or complete lapse of restrictions with respect to all or any portion of such Restricted Stock Units. The
Committee may also, in its sole discretion, shorten or terminate the Restricted Period or waive any Conditions with respect
to all or any portion of the Restricted Stock Units. During the Restricted Period, the Participant will not have the
rights and privileges of a stockholder as to such Restricted Stock Units; provided, however, that at the sole discretion of
the Committee, Dividend Equivalents may be either currently paid in cash or shares or withheld by the Company for the
Participant's account and reinvested in additional Restricted Stock Units. Each grant of Restricted Stock Units shall be
subject to the following restrictions: (i) the Participant shall not be entitled to delivery of the shares of Common Stock
corresponding to such Restricted Stock Units until the expiration or termination of the Restricted Period and the
satisfaction of any other Conditions prescribed by the Committee, if any; (ii) none of the Restricted Stock Units may be
sold, transferred, assigned, pledged, or otherwise encumbered or disposed of during the Restricted Period and until the
satisfaction of other Conditions prescribed by the Committee, if any; and (iii) all of the Restricted Stock Units shall be
forfeited and all rights of the Participant shall terminate without further obligation on the part of the Company unless
the Participant shall have remained a regular full-time employee of the Company or any of its subsidiaries or affiliates
until the expiration or termination of the Restricted Period and the satisfaction of the other Conditions prescribed by the
Committee, if any.
(g) Other Stock Awards - The Committee may, in its sole discretion, grant Stock Awards other than Restricted
Stock grants or Restricted Stock Units, and such Stock Awards may be granted singly, in combination or in tandem with, in
replacement of, or as alternatives to grants or rights under this Program or any other employee benefit or compensation
plan of the Company, including the plan of any acquired entity. If the Committee shall stipulate Conditions with respect
to such Stock Awards, the Conditions will be set forth in documents evidencing the grant. If Conditions with respect to
such Stock Awards shall require the surrender or forfeiture of other grants or rights under this Program or any other
employee benefit or compensation plan of the Company, then the Participant shall not have any rights under such Stock
Awards until the grants or rights exchanged have been fully and effectively surrendered or forfeited.
SECTION 7 SETTLEMENT OF AWARDS
(a) Payment of Awards may be in the form of cash, Common Stock or combinations thereof as the Committee shall
determine, and with such other restrictions as it may impose. The Committee may also require or permit Participants to
elect to defer the issuance of shares or the settlement of Awards in cash under such rules and procedures as it may
establish under the 2005 Program. It may also provide that deferred settlements include the payment or crediting of
interest on the deferral amounts denominated in cash or the payment or crediting of Dividend Equivalents on deferred
settlements denominated in shares.
(b) No shares of Common Stock shall be issued to any Participant upon the exercise of an Option until full
payment of the purchase price has been made to the Company and the Participant has remitted to the Company the required
federal and state withholding taxes, if any. A Participant shall obtain no rights as a stockholder until certificates for
such stock are issued to the Participant or delivered to the MSOP Administrator for credit to the account of the
Participant. Payment of the purchase price or applicable withholding taxes, if any, may be made in whole, or in part, in
shares of Common Stock, pursuant to such terms and conditions as may be established from time to time by the Committee. If
payment is made in shares of Common Stock, such stock shall be valued at one hundred percent (100%) of their Fair Market
Value on the day the Participant exercised his or her Option or, as regards a withholding tax, such other date when the tax
withholding obligation becomes due. A Participant need not surrender shares of Common Stock as payment; and the Company
may, upon the giving of satisfactory evidence of ownership of said Common Stock by Participant, deliver the appropriate
number of additional shares of Common Stock reduced by the number of shares required to pay the purchase price and any
applicable withholding taxes. Such form of evidence shall be determined by the Committee.
SECTION 8 DELIVERY OF STOCK CERTIFICATES
(a) Within sixty (60) days after completion of the exercise of an Option or Stock Appreciation Right, or the
complete satisfaction of Conditions applicable to a Stock Award, the Company will have delivered to the Participant or to
the MSOP Administrator for credit to the account of the Participant certificates representing all shares of Common Stock
purchased or received thereunder. The Company shall not, however, be required to issue or deliver any certificates for its
Common Stock prior to the admission of such stock to listing on any stock exchange on which stock may at that time be
listed or required to be listed, or prior to registration under the Securities Act of 1933. The Participant shall have no
interest in Common Stock until certificates for such stock are issued or transferred to the Participant or to the MSOP
Administrator for credit to the account of the Participant and the Participant becomes the holder of record.
(b) Upon the expiration or termination of the Restricted Period and the satisfaction of other Conditions
prescribed by the Committee, if any, the restrictions applicable to a grant of Restricted Stock or Restricted Stock Units
shall lapse and a stock certificate for the number of shares of Common Stock represented by the Restricted Stock or
Restricted Stock Units shall be delivered to the Participant or the Participant's beneficiary, representative, or estate,
as the case may be, free of all restrictions, except any that may be imposed by law. Unless otherwise instructed by a
Participant by an irrevocable, written instruction received by the Company at least six months prior to the date that
applicable restrictions lapse, the Company shall automatically withhold as payment the number of shares of Common Stock,
determined by the Fair Market Value at the date of the lapse, required to pay withholding taxes, if any.
(c) In no event will the Company be required to deliver any fractional share of Common Stock in connection with
any Award. In the event that a Participant shall be entitled to receive a fraction of a share of Common Stock in
connection with an Award granted under this 2005 Program, the Company shall pay in cash, in lieu thereof, the Fair Market
Value of such fractional share.
SECTION 9 TAX WITHHOLDING
Prior to the payment or settlement of any Award, the Participant must pay, or make arrangements satisfactory to the Company
for the payment of, any and all tax withholding that in the opinion of the Company is required by law. The Company shall
have the right to deduct applicable taxes from any Award payment, to withhold from the shares of Common Stock being issued
or delivered in connection with an Award an appropriate number of shares for the payment of taxes required by law, or to
take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the withholding of
such taxes.
SECTION 10 TRANSFERABILITY
Except as permitted in this Section 10, no Award granted under this 2005 Program may be assigned, transferred (other than a
transfer by will or the laws of descent and distribution as provided in Section 11), pledged, or hypothecated (whether by
operation of law or otherwise). Awards granted under this 2005 Program shall not be subject to execution, attachment, or
similar process. The Committee may, in its sole discretion, permit individual Participants to transfer the ownership of
all or any of their Nonqualified Options granted under this 2005 Program to (i) the spouse, former spouse, children or
grandchildren of such Participant ("Immediate Family Members"), (ii) a trust or trusts for the exclusive benefit of such
Immediate Family Members, or (iii) a partnership in which such Immediate Family Members are the only partners, provided
that (x) there may be no consideration for any such transfer, and (y) subsequent transfers of transferred Nonqualified
Options shall be prohibited except those in accordance with Section 11 (by will or the laws of descent and distribution).
The Committee may, in its sole discretion, create further conditions and requirements for the transfer of Nonqualified
Options. Following transfer, any such Nonqualified Options shall continue to be subject to the same terms and conditions
as were applicable immediately prior to transfer, provided that for purposes of Sections 7, 8 and 14 hereof the term
"Participant" shall be deemed to refer to the transferee. The events causing termination of Awards in accordance with
Section 11 hereof shall continue to be applied with respect to the original Participant, following which the Nonqualified
Options shall be exercisable by the transferee only to the extent, and for the periods specified in Section 11.
SECTION 11 TERMINATION OF AWARDS
(a) If a Participant's employment with the Company is terminated for any reason other than (i) a Disqualifying
Termination, (ii) Retirement, (iii) a termination in connection with which the Participant executes a written release of
employment-related claims in favor of the Company that provides (with the approval of the Company) for the nonforfeiture of
Options and Stock Appreciation Rights, (iv) a physical or mental disability as recognized under a benefit plan maintained
by the Company, or (v) death, and prior to the date of termination the Participant has not fully exercised an Option or
Stock Appreciation Right granted under this 2005 Program, such Participant may exercise the Option or Stock Appreciation
Right within ninety (90) days following the date of termination (but not beyond the expiration date of such Option or
Right) for the number of shares which the Participant could have purchased or received a payment on the date of
termination. At the conclusion of such ninety-day period (with respect to the Participant's Options and Stock Appreciation
Rights, and at the time of termination with respect to any other Awards), participation hereunder shall cease and all of
the Participant's Awards granted under this 2005 Program shall be automatically forfeited unless the documents evidencing
such Options or Stock Appreciation Rights provide otherwise.
(b) If a Participant Retires, terminates employment with the Company and in connection with such termination the
Participant executes a written release of employment-related claims in favor of the Company that provides (with the
approval of the Company) for the nonforfeiture of Options and Stock Appreciation Rights, or changes employment status as a
result of a physical or mental disability as recognized under a benefit plan maintained by the Company, without having
fully exercised an Option or Stock Appreciation Right, the Participant shall be entitled, within the remaining term of the
Option or Stock Appreciation Right (but not beyond the expiration date of such Option or Right), to exercise such Option or
Stock Appreciation Right (provided, however, that in the event of a termination in connection with which the Participant
executes a written release of employment-related claims in favor of the Company that provides (with the approval of the
Company) for the nonforfeiture of Options and Stock Appreciation Rights, the additional time to exercise Options and Stock
Appreciation Rights shall apply only to those Options and Stock Appreciation Rights which have vested prior to the date of
termination of employment). If a Participant who has thus Retired dies, without having fully exercised an Option or Stock
Appreciation Right, the Option or Stock Appreciation Right (including any portion thereof not already exercisable at the
time of the Participant's death) may be exercised within two years after the date of his or her death (but not beyond the
expiration date of such Option or Right) by the Participant's estate or by a person who acquired the right to exercise such
Option or Stock Appreciation Right by bequest or inheritance or by reason of the death of the Participant.
(c) If a Participant, prior to Retirement, dies without having fully exercised an Option or Stock Appreciation
Right, the Option or Stock Appreciation Right (including any portion thereof not already exercisable at the time of the
Participant's death) may be exercised within two years following his or her death (but not beyond the expiration date of
such Option or Right) by the Participant's estate or by a person who acquired the right to exercise such Option or Stock
Appreciation Right by bequest or inheritance or by reason of the death of the Participant.
(d) Notwithstanding paragraph (a) of this section, if a Participant's employment with the Company is terminated
before he or she has fully exercised an Option or Stock Appreciation Right under circumstances which the Committee believes
to warrant special consideration and the Committee has determined that the Participant's rights should not be forfeited at
the time or times specified in paragraph (a), the Option or Stock Appreciation Right (including any portion thereof not
already exercisable at the time of termination) may be exercised within two years following his or her termination of
employment (but not beyond the expiration date of such Option or Right).
(e) 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 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.
(f) If a Participant's employment with the Company is terminated due to a Disqualifying Termination,
participation hereunder shall cease and all of the Participant's Awards granted under this 2005 Program shall be
automatically forfeited.
(g) If the Committee or the officers to whom it delegates the necessary authority receive or have reason to
believe that the Company has received credible evidence that a Participant may have engaged in activity described in the
term "Disqualifying Termination" in Section 2(h) of this 2005 Program, the Committee or such officers may suspend the
exercise, delivery or settlement of all or any portion of such Participant's outstanding Awards granted under this 2005
Program pending an investigation of the matter.
SECTION 12 ADJUSTMENTS
In the event of any change in the outstanding Common Stock of the Company by reason of a stock split, stock dividend,
combination or reclassification of shares, recapitalization, merger or similar event, the Committee shall adjust
proportionately: (a) the number of shares of Common Stock (i) available for issuance or delivery under the 2005 Program in
accordance with Section 3, (ii) for which Awards may be granted to a single Participant in accordance with Section 6, and
(iii) subject to outstanding Awards granted under the 2005 Program; (b) the purchase prices of outstanding Awards; and (c)
the appropriate Fair Market Value and other price determinations for such Awards. In the event of any other change
affecting the Common Stock or any distribution (other than normal cash dividends) to holders of Common Stock, such
adjustments in the number or kind of shares and the purchase prices, Fair Market Value and other price determinations of
the affected Awards as the Committee shall, in its sole discretion, determine are equitable, shall be made and shall be
effective and binding for all purposes of such outstanding Awards. In the event of a corporate merger, consolidation,
acquisition of assets or stock, separation, reorganization or liquidation, the Committee shall be authorized to cause the
Company to issue or assume stock options, whether or not in a transaction to which section 424(a) of the Code applies, by
means of substitution of new stock options for previously issued stock options or an assumption of previously issued stock
options. In such event, the aggregate number of shares of Common Stock available for issuance or delivery under the 2005
Program in accordance with Section 3 will be increased to reflect such substitution or assumption, and such shares
substituted or assumed shall not be counted against the individual Participant maximum set forth in Section 6.
SECTION 13 TERM, AMENDMENT, AND
TERMINATION OF THE 2005 PROGRAM
The 2005 Program shall become effective on the date it is approved by the requisite vote of the stockholders of 3M Company,
and shall expire (unless it is terminated before then) on the third anniversary of such effective date. Such expiration
shall not adversely affect Awards granted under the 2005 Program prior to such expiration date. The Committee may at any
time amend or terminate the 2005 Program, except that no amendment or termination shall adversely affect Awards granted
under the 2005 Program prior to the effective date of such amendment or termination; provided, however, that no amendment
shall be made without the prior approval of the Board of Directors and the holders of a majority of the issued and
outstanding shares of Common Stock represented and entitled to vote on such amendment which would (i) increase the
aggregate number of shares of Common Stock available for issuance or delivery under the 2005 Program in accordance with
Section 3 (except for adjustments made in accordance with Section 12), (ii) permit the granting of Awards with purchase
prices lower than those specified in Section 6, or (iii) be a material amendment for which stockholder approval is required
by applicable law, regulation or stock exchange rule.
SECTION 14 CHANGE IN CONTROL
(a) For purposes of this Section 14, the following words and phrases shall have the meanings indicated below,
unless the context clearly indicates otherwise:
(i) "Person" shall have the meaning associated with that term as it is used in Sections 13(d) and 14(d) of the
Act.
(ii) "Affiliates and Associates" shall have the meanings assigned to such terms in Rule 12b-2 promulgated under
Section 12 of the Act.
(iii) "Act" means the Securities Exchange Act of 1934.
(iv) "Continuing Directors" shall have the meaning assigned to such term in Article Thirteenth of the Restated
Certificate of Incorporation of 3M Company.
(b) Notwithstanding any other provision of this 2005 Program to the contrary. all outstanding Options and Stock
Appreciation Rights shall (i) become immediately exercisable in full for the remainder of their respective terms upon the
occurrence of a Change in Control of the Company, and (ii) remain exercisable in full for a minimum period of six months
following the Change in Control; provided, however, that in no event shall any Option or Stock Appreciation Right be
exercisable beyond the original expiration date.
(c) Similarly, all restrictions regarding the Restricted Period or the satisfaction of other Conditions
prescribed by the Committee, if any, with respect to grants of Restricted Stock or other Stock Awards, shall automatically
lapse, expire, and terminate and the Participant shall be immediately entitled to receive a stock certificate for the
number of shares of Common Stock represented by the Restricted Stock or Stock Awards upon the occurrence of a Change in
Control.
(d) For purposes of this Section 14, a Change in Control of the Company shall be deemed to have occurred only if
a "change in the ownership" or a "change in effective control" and/or a "change in the ownership of a substantial portion
of the assets" of the Company has taken place (as those terms are defined in Treasury Regulations §1.409A-3(i)(5) or such
other regulation or guidance issued under section 409A of the Code).
(e) In the event that the provisions of this Section 14 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.
(f) 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 14, 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 14, 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 14. 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 such fees and expenses have been incurred.
SECTION 15 MISCELLANEOUS
(a) Unless otherwise specifically determined by the Committee, settlements of Awards received by Participants
under the 2005 Program shall not be deemed a part of any Participant's compensation for purposes of determining such
Participant's payments or benefits under any Company benefit plan, severance program, or severance pay law of any country.
Nothing in this 2005 Program shall prevent the Company from adopting other or additional compensation programs, plans, or
arrangements as it deems appropriate or necessary.
(b) The 2005 Program shall be unfunded. The Company does not intend to create any trust or separate fund in
connection with the 2005 Program. The Company shall not have any obligation to set aside funds or segregate assets to
ensure the payment of any Award. The 2005 Program shall not establish any fiduciary relationship between the Company and
any Participant or other person. To the extent any person holds any rights by virtue of an Award under the 2005 Program,
such right (unless otherwise determined by the Committee) shall be no greater than the right of an unsecured general
creditor of the Company.
(c) No person shall have any claim or right to be granted an Award under the 2005 Program, and the Participants
shall have no rights against the Company except as may otherwise be specifically provided herein. Nothing in this 2005
Program shall be deemed to give any Participant the right to be retained in the employ of the Company, or to interfere with
the right of the Company to discipline or discharge such Participant at any time for any reason whatsoever.
(d) The provisions of this 2005 Program and the documents evidencing Awards granted under this 2005 Program shall
be construed and interpreted according to the laws of the State of Minnesota.
(e) In case any provision of this 2005 Program shall be ruled or declared invalid for any reason, said illegality
or invalidity shall not affect the remaining provisions, and the remainder of the 2005 Program shall be construed and
enforced as if such illegal or invalid provision had never been included herein.
EXHIBIT 12
3M COMPANY AND SUBSIDIARIES
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Millions)
Year Year Year Year Year
2015 2014 2013 2012 2011
EARNINGS
Income before income taxes $ 6,823 $ 7,026 $ 6,562 $ 6,351 $ 6,031
Add:
Interest expense (including amortization of capitalized interest) 171 164 166 191 206
Portion of rent under operating leases representative of the interest component 101 104 103 92 85
Less:
Equity in undistributed income of 20-50% owned companies 5 (1) (1) 3 4
TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES $ 7,090 $ 7,295 $ 6,832 $ 6,631 $ 6,318
FIXED CHARGES
Interest on debt (including capitalized interest) 162 159 166 194 206
Portion of rent under operating leases representative of the interest component 101 104 103 92 85
TOTAL FIXED CHARGES $ 263 $ 263 $ 269 $ 286 $ 291
RATIO OF EARNINGS TO FIXED CHARGES 27.0 27.7 25.4 23.2 21.7
EXHIBIT 18
February 11, 2016
Board of Directors
3M Company
3M Center
St. Paul, MN 55144
Dear Directors:
We are providing this letter to you for inclusion as an exhibit to your Form 10-K filing pursuant to Item 601 of Regulation
S-K.
We have audited the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2015 and issued our report thereon dated February 11, 2016. Note 1 to the financial statements
describes a change in accounting principle from a method which classifies marketable securities on the consolidated balance
sheet based on management's intended holding period to a method which classifies marketable securities based on the nature
of the securities and their availability for use in current operations. It should be understood that the preferability of
one acceptable method of accounting over another for the classification of marketable securities has not been addressed in
any authoritative accounting literature, and in expressing our concurrence below we have relied on management's
determination that this change in accounting principle is preferable. Based on our reading of management's stated reasons
and justification for this change in accounting principle in the Form 10-K, and our discussions with management as to their
judgment about the relevant business planning factors relating to the change, we concur with management that such change
represents, in the Company's circumstances, the adoption of a preferable accounting principle in conformity with Accounting
Standards Codification 250, Accounting Changes and Error Corrections.
Very truly yours,
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
EXHIBIT 21
3M COMPANY AND CONSOLIDATED SUBSIDIARIES (PARENT AND SUBSIDIARIES)
AS OF DECEMBER 31, 2015
Name of Company Organized Under Law of
Registrant - 3M Company Delaware
Consolidated subsidiaries of the Registrant:
3M Cogent, Inc. Delaware
3M Electronic Monitoring, Inc. Delaware
3M Financial Management Company Delaware
3M Global Channel Services, Inc. Delaware
3M Innovative Properties Company Delaware
3M Investment Management Corporation Delaware
3M Occupational Safety LLC Delaware
3M Purification Inc. Delaware
Aearo Holding LLC Delaware
Aearo Technologies LLC Delaware
Capital Safety North America Holdings, Inc. Delaware
Ceradyne, Inc. Delaware
3M Unitek Corporation California
Ivera Medical LLC California
Meguiar's, Inc. California
3M Health Information Systems, Inc. Maryland
3M Touch Systems, Inc. Massachusetts
GTA-NHT, Inc. Massachusetts
DB Industries LLC Minnesota
Two Harbors Insurance Company South Carolina
3M Argentina S.A.C.I.F.I.A Argentina
3M Australia Pty. Ltd. Australia
3M Purification Pty Limited Australia
3M Osterreich GmbH Austria
Rappold Winterthur Technologie GmbH Austria
3M Belgium BVBA/SPRL Belgium
3M do Brasil Limitada Brazil
3M Manaus Ind. Prods. Quims. LTDA Brazil
3M Canada Company Canada
Capital Safety Group Canada ULC Canada
3M Chile S.A. Chile
3M China Limited China
3M International Trading (Shanghai) Co., Ltd. China
3M International Trading (Shenzhen) Co., Ltd. China
3M Investments (China) Co., Ltd. China
3M Material Technology (Guangzhou) Co., Ltd. China
3M Material Technology (Hefei) Co., Ltd. China
3M Material Technology (Suzhou) Co., Ltd. China
3M Optical Systems Manufacturing Co., (Shanghai) Ltd. China
3M Speciality Materials (Shanghai) Co., Ltd. China
3M Colombia, S.A. Colombia
3M A/S Denmark
Suomen 3M Oy Finland
3M Purification France
3M France S.A.S. France
EMFI SAS France
3M Bricolage & Batiment France
3M Deutschland GmbH Germany
3M Real Estate GmbH & Co. KG Germany
Dyneon GmbH Germany
Name of Company Organized Under Law of
Wendt GmbH Germany
3M Hong Kong Limited Hong Kong
3M India Limited India
3M Electronic Monitoring Ltd Israel
3M ITALIA srl Italy
3M Japan Limited Japan
3M Japan Holdings Company Japan
3M Japan Products Limited Japan
3M Korea Health and Safety Limited Korea
3M Korea High Technology Limited Korea
3M Korea Limited Korea
3M Asset Management S.a.r.l. Luxembourg
3M Attenti Holdings S.a.r.l. Luxembourg
3M Global Capital S.a.r.l. Luxembourg
Capital Safety Group Sarl Luxembourg
3M Malaysia Sdn. Bhd. Malaysia
3M Mexico, S.A. de C.V. Mexico
3M Nederland B.V. Netherlands
3M New Zealand Limited New Zealand
3M Norge A/S Norway
3M Panama Pacifico S. de R.L. Panama
3M Peru Industrial S.A. Peru
3M Poland Sp. z.o.o. Poland
3M Wroclaw Sp. z.o.o. Poland
3M Puerto Rico, Inc. Puerto Rico
3M Romania S.R.L. Romania
3M Russia, LLC Russia
3M Innovation Singapore Pte Ltd Singapore
3M Singapore Private Limited Singapore
3M Technologies (S) Pte Ltd Singapore
CUNO Filtration Asia Pte. Ltd. Singapore
3M South Africa (Propriety) Limited South Africa
3M Espana S.L. Spain
3M Svenska AB Sweden
3M EMEA, GmbH Switzerland
3M (East) A.G. Switzerland
3M (Schweiz) GmbH Switzerland
3M Taiwan Limited Taiwan
3M Taiwan Optronics Corp. Taiwan
Alpha Beta Global Tapes & Adhesives Co., Ltd. Taiwan
3M Thailand Limited Thailand
3M Sanayi Ve Ticaret A.S. Turkey
3M Gulf Ltd. United Arab Emirates
3M Health Care Limited United Kingdom
3M UK Holdings Limited United Kingdom
3M United Kingdom PLC. United Kingdom
Capital Safety Acquisition Limited United Kingdom
Capital Safety ROW Ltd United Kingdom
3M Manufacturera Venezuela, S.A. Venezuela
NOTE: Subsidiary companies excluded from the above listing, if considered in the aggregate, would not constitute a
significant subsidiary.
EXHIBIT 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Registration Nos.
333-30689, 333-30691, 333-44760, 333-73192, 333-101727, 333-109282, 333-128251, 333-130150, 333-151039, 333-156626,
333-156627, 333-166908, 333-174562, 333-181269, and 333-181270) and Form S-3 (Registration Nos. 333-196003, 33-48089,
333-42660, and 333-109211) of 3M Company of our report dated February 11, 2016 relating to the financial statements and the
effectiveness of internal control over financial reporting, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
February 11, 2016
EXHIBIT 24
POWER OF ATTORNEY
Each of the undersigned Directors and the Principal Executive, Principal Financial and Principal Accounting Officers of 3M
COMPANY, a Delaware corporation (the "Company"), hereby constitute and appoint Inge G. Thulin, Nicholas C. Gangestad, Gregg
M. Larson, Eric D. Hammes, Ivan K. Fong, and Matthew J. Ginter, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full and several power of substitution and resubstitution, for him or her and in his or
her name, place and stead in any and all capacities, to sign one or more Annual Reports for the Company's fiscal year ended
December 31, 2015, on Form 10-K under the Securities Exchange Act of 1934, as amended, any amendments thereto, and all
additional amendments thereto, each in such form as they or any one of them may approve, and to file the same with all
exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done so that such Annual Report or Annual Reports shall comply with the Securities
Exchange Act of 1934, as amended, and the applicable Rules and Regulations adopted or issued pursuant thereto, as fully and
to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or their substitute or resubstitute, may lawfully do or cause to be done by
virtue hereof.
The undersigned have signed this Power of Attorney this 2nd day of February 2016.
/s/ Inge G. Thulin /s/ Nicholas C. Gangestad
Inge G. Thulin, Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer and Director) Nicholas C. Gangestad, Senior Vice President and Chief Financial Officer (Principal Financial Officer)
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