In the event a Named Executive Officer’s payments under the Severance Plan would be subject to an excise tax on
“parachute payments” in connection with a change in control of the Company due to the application of Section 280G of the
Internal Revenue Code, the Named Executive Officer will not be entitled to a “gross-up.” Instead, the Named Executive
Officer’s “parachute payments” may be reduced if such reduction would provide the Named Executive Officer with a
greater post-tax benefit than he or she would receive if the excise taxes were to apply.
For purposes of the Severance Plan, the terms “Misconduct” and “Good Reason” mean the following:
“Misconduct” means (i) the employee’s willful failure to substantially perform his or her duties (other than a failure resulting
from his or her disability); (ii) the employee’s willful failure to carry out, or comply with any lawful and reasonable directive
of the Board or his or her immediate supervisor; (iii) the occurrence of any act or omission by the employee that could
reasonably be expected to result in (or has resulted in) his or her conviction, plea of no contest, plea of nolo contendere,
or imposition of unadjudicated probation for any felony or indictable offense or crime involving moral turpitude; (iv) the
employee’s commission of an act of fraud, embezzlement, misappropriation, misconduct, or breach of fiduciary duty
against the Company or any of its subsidiaries or affiliates or any of their officers, directors, employees, customers,
suppliers, insurers or agents; (v) the employee’s material breach of any material provision of any written agreement with
the Company or any subsidiary; (vi) any action (or inaction) by the employee that 3M reasonably determines constitutes
gross negligence or misconduct in the performance of his or her duties and responsibilities, including in relation to the
core business conduct principles and expectations set forth in the Company’s Code of Conduct; or (vii) any other
intentional misconduct by the Named Executive Officer that significantly affects the business or affairs of the Company or
any subsidiary in an adverse manner.
“Good Reason” means, with respect to a voluntary termination occurring within 18 months following a change in control of
the Company, (i) a material diminution in the employee’s position, authority, duties or responsibilities as in effect
immediately prior to the change in control, (ii) a material diminution in the employee’s base salary or annual planned cash
compensation, or (iii) a material change in the geographic location at which the employee is required to perform services
for his or her employer. If the voluntary termination does not occur within 18 months following a change in control, “Good
Reason” means (i) a material diminution in the employee’s base salary or annual planned cash compensation, other than
an across-the-board reduction that applies to all comparable positions, or (ii) a change in excess of 100 miles in the
primary work location at which the employee is required to perform services for his or her employer. For terminations that
do not occur within 18 months following a change in control, the employee will be required to provide written notice to the
Company of the grounds for a Good Reason termination within 30 days of the initial existence of such grounds, and the
Company has 30 days from the date of such notice to cure such circumstances. An employee must terminate employment
for Good Reason within 60 days after the first occurrence of the applicable grounds.
If Mr. Maheshwari’s or Ms. Bauer’s employment is terminated by the Company other than for Misconduct (as defined
above), then, subject to his or her execution and non-revocation of a release of claims, any portion of the make-whole 3M
RSU awards that each received in connection with the commencement of their employment that remains unvested at the
time of his or her separation will vest in full.
Rights and payments upon a qualifying termination in connection with a
change in control
If the Company terminates a Named Executive Officer’s employment for reasons other than Misconduct or if a Named
Executive Officer resigns for Good Reason, in any such case within 18 months following a “change in control event” of the
Company (as defined for purposes of Section 409A of the Internal Revenue Code), then the Named Executive Officer will
be eligible to receive the benefits provided under the Severance Plan. In addition, the treatment of the Named Executive
Officer’s outstanding equity awards will differ from the treatment otherwise provided under the Severance Plan as follows:
•all outstanding unvested stock options and restricted stock units granted under the Company’s stock plans will vest
immediately;
•performance share awards granted before January 1, 2025 will vest on a prorated basis, based on the portion of the
applicable performance period completed prior to the qualifying termination, and will be settled in accordance with the
terms of the plan; and
•performance share awards granted on or after January 1, 2025 will vest at the target number of shares (or such greater
amount as the plan administrator may determine) without proration and will be settled shortly following the executive’s
separation date (or such later date as may be required to comply with Section 409A of the Internal Revenue Code).
