SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MINNESOTA MINING AND MANUFACTURING COMPANY
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid: n/a
(2) Form, schedule or registration statement no.: Proxy materials per Rule 14a
(3) Filing party: Minnesota Mining and Manufacturing Company
(4) Date filed: 3/23/95
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
NOTICE OF
1995 ANNUAL
MEETING OF
STOCKHOLDERS
AND PROXY
STATEMENT
Recycled Paper
40% Pre-consumer paper
10% Post-consumer paper
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD MAY 9, 1995
To the Stockholders of
Minnesota Mining and Manufacturing Company:
The Annual Meeting of Stockholders of Minnesota Mining and Manufacturing
Company will be held on Tuesday, May 9, 1995, at 10 a.m. at the St. Paul
Civic Center, 143 West Fourth Street, St. Paul, Minnesota, for the following
purposes:
1. To elect four directors of the Company to the 1998 Class and one
director to the remaining term of the 1997 Class (see page 1 of the
Proxy Statement).
2. To ratify the appointment of Coopers & Lybrand L.L.P., independent
certified public accountants, to audit the books and accounts of the
Company for the year 1995 (page 22).
3. To act upon a stockholder proposal pertaining to the nomination
process for directors (page 23).
4. To act upon a stockholder proposal pertaining to reincorporation
(page 24).
5. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed March 10, 1995, as the record date for the
determination of stockholders entitled to vote at the Annual Meeting and to
receive notice thereof. The transfer books of the Company will not be closed.
Examination of the list of stockholders entitled to vote can be arranged at
the office of Arlo D. Levi, Vice President and Secretary, 3M Center, St.
Paul, Minnesota, during the period of ten days prior to the meeting.
STOCKHOLDERS ARE ENCOURAGED TO DATE, SIGN, AND RETURN THE ENCLOSED PROXY IN
THE ENCLOSED ENVELOPE, TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES. IF YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE MARK THE
BOX ON THE ENCLOSED PROXY CARD INDICATING YOUR PLANS TO ATTEND THE MEETING.
ARLO D. LEVI
Vice President and Secretary
March 27, 1995
LIVIO D. DESIMONE
Chairman of the Board and
Chief Executive Officer
March 27, 1995
Dear Stockholder:
You are invited to attend the 1995 Annual Meeting of Stockholders which will
be held on Tuesday, May 9, 1995, at 10 a.m. at the St. Paul Civic Center, 143
West Fourth Street, St. Paul, Minnesota.
The notice of the meeting and the proxy statement on the following pages
cover the formal business of the meeting. The meeting will consider the
election of directors, the appointment of auditors for the coming year, and
two stockholder proposals. I will also report on current operations and on
our future plans. There will be a period during which your questions and
comments will be welcome.
The fine attendance of our stockholders at the annual meetings over the years
has been very helpful in maintaining communications and understanding. We
sincerely hope you will be able to be with us.
Please date, sign, and return the enclosed proxy in the envelope provided. If
you can be with us, PLEASE MARK THE APPROPRIATE BOX ON THE ENCLOSED PROXY
CARD.
Cordially,
Livio D. DeSimone
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144
March 27, 1995
PROXY STATEMENT FOR 1995 ANNUAL MEETING OF STOCKHOLDERS
This proxy statement is furnished to stockholders by the Board of Directors
for solicitation of proxies for use at the Annual Meeting of Stockholders on
Tuesday, May 9, 1995, at 10 a.m., and at all adjournments thereof, for the
purposes set forth in the attached Notice of Annual Meeting of Stockholders.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised in any of the following ways:
(1) by a written instruction to the Office of the Secretary reasonably
indicating the stockholder's desire to revoke an existing proxy; (2) by
signing and returning to the Company a proxy with a more recent date than
that of the proxy first given; or (3) by signing and returning a floor ballot
at the meeting of stockholders.
The Company will bear the cost of preparing, printing, and mailing material
in connection with this solicitation of proxies. In addition to the use of
the mails, solicitations may be made by regular employees of the Company
personally and by telephone. The Company intends to reimburse brokerage
firms, banks, and others for their reasonable out-of-pocket expenses,
including clerical expenses, in forwarding proxy material to beneficial
owners of stock or otherwise in connection with this solicitation of proxies.
The Company has retained Georgeson & Co., Inc. to assist in the solicitation
at a cost of approximately $15,000, plus reasonable out-of-pocket expenses.
The Company anticipates that the proxy statement and the form of proxy
enclosed will first be sent to its stockholders on or about March 27, 1995.
The Company's Board of Directors has adopted a policy that all stockholder
meeting proxies, ballots, and tabulations that identify stockholders are to
be maintained in confidence, and no such document shall be available for
examination, nor shall the identity and vote of any stockholder be disclosed,
except as may be necessary to meet applicable legal requirements and to allow
the inspectors of election to certify the results of the stockholder vote.
The policy also provides that inspectors of election for stockholder votes
shall be independent and shall not be employees of the Company.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on March 10, 1995 are
entitled to vote at the Annual Meeting. As of February 28, 1995, the Company
had outstanding and entitled to vote 419,700,423 shares of common stock
without par value.
DIVIDEND REINVESTMENT PLAN
Shares held for the account of persons participating in the Company's
dividend reinvestment plan will be voted automatically in accordance with the
vote indicated by the stockholder of record on the proxy and, if no choice is
indicated, both record shares and shares held in the Company's dividend
reinvestment plan will be voted FOR Items 1 and 2 and AGAINST Items 3 and 4.
If the stockholder does not vote the shares held of record, the individual's
shares held in the dividend reinvestment account will not be voted.
ITEM 1. ELECTION OF DIRECTORS
NUMBER OF NOMINEES AND CLASSIFICATION
The Restated Certificate of Incorporation of the Company, as amended, and the
Bylaws of the Company, as amended, provide that the Board of Directors shall
consist of such number of directors as shall be fixed from time to time by
resolution of the Board of Directors. At its meeting of February 13, 1995,
the Board of Directors fixed the number of directors constituting the entire
Board at 13, effective as of the date of the 1995 Annual Meeting.
The Restated Certificate of Incorporation divides the Board into three
classes. Four directors have terms of office that expire at the 1995 Annual
Meeting, and these four directors are standing for reelection for a
three-year term as members of the 1998 Class. These directors are Messrs.
Brennan, DeSimone, Murray, and Smith. Mr. Junkins is standing for election
for the first time and is standing for election to the 1997 Class, in order
to more nearly equalize the number of directors in the respective classes.
The remaining five directors in the 1996 Class are continuing to serve until
the 1996 Annual Meeting; and the three present directors in the 1997 Class
are continuing to serve until the 1997 Annual Meeting.
All nominees for election to the Board of Directors to the 1998 Class at the
1995 Annual Meeting will be elected for a term of three years and shall serve
until their terms expire at the 1998 Annual Meeting or until their successors
are duly elected and have qualified. Mr. Junkins will be elected for a term
of two years and shall serve until his term expires at the 1997 Annual
Meeting or until his successor is duly elected and has qualified.
The persons named as proxies intend to vote the proxies for the election of
the three nominees to the Board of Directors or, if any of the nominees
should be unavailable to serve as a director, an event which is not
anticipated, the persons named as proxies reserve full discretion to vote for
any other persons who may be nominated.
INFORMATION AS TO NOMINEES AND INCUMBENT DIRECTORS
The nominees and incumbent directors, their age, principal occupation or
position with the Company (shown in italics), experience, the year first
elected as a director, and common stock beneficially owned on February 28,
1995 are shown on the following pages.
"Shares held" include: stock held in joint tenancy, stock owned as tenants in
common, stock owned or held by spouse or other members of the nominee's
household, and stock in which the nominee either has or shares voting and/or
investment power, even though the nominee disclaims any beneficial interest
in such stock. Options exercisable within 60 days after February 28, 1995 are
shown separately.
"Shares held as deferred stock" by nonemployee directors represent the number
of shares of the Company's common stock, as of December 31, 1994, which the
directors will receive upon termination of membership on the Board of
Directors for any reason. These shares result from the voluntary election by
the nonemployee directors to defer the payment of directors fees otherwise
payable in cash into such deferred stock. No shares of common stock have as
yet been issued, and the directors have neither voting nor investment powers
in these shares of deferred stock.
As of February 28, 1995, executive officers and directors as a group
"beneficially owned" 419,880 shares and held options exercisable within 60
days after that date for 870,654 shares. All officers and directors as a
group owned beneficially less than five-tenths of one percent (0.5%) of the
outstanding common stock of the Company.
None of the nominees or incumbent directors is related to any other nominee
or to any executive officer of the Company or its subsidiaries by blood,
marriage, or adoption. Except for current employees of the Company and Mr.
Jacobson, no nominee or incumbent director has been an employee of the
Company within the past five years.
During 1994, the Company retained the law firm of Gibson, Dunn & Crutcher
with regard to various legal matters. Mrs. Peters is a partner in this firm.
NOMINEES FOR ELECTION TO THE 1998 CLASS:
[PHOTO] EDWARD A. BRENNAN, 61, Chairman of the Board, President, and Chief
Executive Officer, Sears, Roebuck and Co., a diversified company
engaged in merchandising, insurance, and real estate, Chicago,
Illinois; Chairman of the Compensation and Member of the Public
Issues Committees. Mr. Brennan has been a director of Sears, Roebuck
and Co. since 1978. He joined Sears in 1956; was an Executive Vice
President, 1978 to 1980; President and Chief Operating Officer for
merchandising, 1980; Chairman and Chief Executive Officer, Sears
Merchandise Group, 1981 to 1984; President and Chief Operating
Officer, 1984 through 1985; and was elected Chairman and Chief
Executive Officer of Sears, Roebuck and Co. in 1986. He is a
director of The Allstate Corporation, Dean Witter, Discover & Co.,
and AMR Corporation. He is also a trustee of DePaul University and
Marquette University; and a member of The Business Roundtable and
The Business Council.
Director since 1986 Shares Held 4,573
Shares Held as Deferred Stock 1,794
[PHOTO] LIVIO D. DESIMONE, 58, Chairman of the Board and Chief Executive
Officer; Chairman of the Board Organization, Executive, and Finance
Committees. Mr. DeSimone joined 3M as a process engineer with 3M
Canada in 1957. He served in various international and subsidiary
capacities until his appointment in 1971 as Managing Director of 3M
Brazil. In 1975, he served as General Manager, Building Service and
Cleaning Products Division, before being appointed Area Vice
President, Latin America. Mr. DeSimone was elected Vice President,
Abrasives, Adhesives, Building Service and Chemicals Group, in 1979;
Executive Vice President, Life Sciences Sector, in 1981; Executive
Vice President, Industrial and Consumer Sector, in 1984; Executive
Vice President, Industrial and Electronic Sector, in 1987; Executive
Vice President, Information and Imaging Technologies Sector, in
1989; and Chairman of the Board and Chief Executive Officer, in
1991. He is a director of Cargill, Incorporated, Dayton Hudson
Corporation, General Mills, Inc., and Vulcan Materials Company. He
is also Chairman of National Junior Achievement Inc. and a trustee
of the University of Minnesota Foundation.
Director since 1986 Shares Held 108,699 *
*Includes 53,369 shares of Profit Sharing Stock held by the Company
and subject to forfeiture. Not included are options exercisable within
60 days: 3,138 shares at $31.85 per share; 2,764 shares at $36.18 per
share; 2,486 shares at $40.20 per share; 2,260 shares at $44.23 per
share; 2,088 shares at $47.88 per share; 17,785 shares at $51.95 per
share; 48,556 shares at $52.55 per share; and 45,400 shares at $56.63.
[PHOTO] ALLEN E. MURRAY, 66, Retired Chairman of the Board and Chief
Executive Officer, Mobil Corporation, petroleum exploration and
manufacturing and marketing of petroleum and petroleum-based
products, Fairfax, Virginia; Chairman of the Audit and Member of the
Board Organization Committees. Mr. Murray has been a director of
Mobil Corporation from 1977, was Chairman of the Board, President,
and Chief Executive Officer from 1986 until 1993, and Chairman and
Chief Executive Officer until March 1994. He retired from Mobil in
1994. He is a director of Metropolitan Life Insurance Company,
Martin Marietta Corporation, Morgan Stanley Group, Inc., and St.
Francis Hospital. He is also an honorary director of the American
Petroleum Institute, a trustee of New York University, and a member
of the Chase Manhattan Bank International Advisory Committee, The
Business Council, The Business Roundtable, the Council on Foreign
Relations, and the Trilateral Commission.
Director since 1985 Shares Held 2,821
Shares Held as Deferred Stock 10,819
[PHOTO] F. ALAN SMITH, 63, Retired Executive Vice President and Director,
General Motors Corporation, manufacturer and seller of automobiles
and automotive products, Detroit, Michigan; Member of the Audit and
Board Organization Committees. Mr. Smith had been a director of
General Motors Corporation from 1981 until his retirement during
1992. He joined General Motors in 1956; was Treasurer, 1973 to 1975;
Vice President, Finance, 1975 to 1978; Vice President of General
Motors Corporation and President and General Manager of General
Motors of Canada Limited, 1978 to 1981, when he was elected
Executive Vice President, Finance. In 1988, he was elected Executive
Vice President, Operating Staffs and Public Affairs and Marketing
Staffs. He is a Trustee of the Cranbrook Educational Community,
Bloomfield Hills, Michigan.
Director since 1986 Shares Held 5,221
Shares Held as Deferred Stock 5,039
NOMINEE FOR ELECTION TO THE 1997 CLASS:
[PHOTO] JERRY R. JUNKINS, 57, Chairman of the Board, President, and Chief
Executive Officer, Texas Instruments Incorporated, manufacturer and
seller of electronics and related products, Dallas, Texas; Member of
the Audit and Board Organization Committees. Mr. Junkins joined
Texas Instruments in 1959 as an engineer. In 1977, he became a vice
president of the company; in 1982, executive vice president; in
1985, president and chief executive officer; and in 1988, he also
became chairman of the board. Mr. Junkins is a director of
Caterpillar Inc. and The Procter & Gamble Company. He is a member of
the National Academy of Engineering, The Business Roundtable and The
Business Council, and a member of the board of trustees of Southern
Methodist University.
New Nominee Shares Held 620
INCUMBENT DIRECTORS IN THE 1996 CLASS:
[PHOTO] HARRY A. HAMMERLY, 61, Executive Vice President, International
Operations; Member of the Executive and Finance Committees. Mr.
Hammerly joined 3M in 1955 as an accountant in the Controller's
organization. He was named Managing Director of 3M Far East in Hong
Kong in 1973; Senior Managing Director of Sumitomo 3M, Limited in
1975; and in 1979, he was appointed Area Vice President, Latin
America. In 1981, Mr. Hammerly was elected Vice President,
Australia, Asia, Canada; in 1982, Vice President, Finance; in 1987,
Vice President, Europe; in 1989, Executive Vice President,
Industrial and Electronic Sector; in 1991, Executive Vice President,
International Operations and Corporate Services; in 1994, Executive
Vice President, Life Sciences Sector and International Operations;
and in 1995, Executive Vice President, International Operations. Mr.
Hammerly is a director of Apogee Enterprises, Inc., Cincinnati
Milacron, Inc., The Geon Company, and the National Association of
Manufacturers; and a member of the Board of Trustees of the
University of St. Thomas and the Manufacturers Alliance for
Productivity and Innovation.
Director since 1990 Shares Held 47,725*
*Includes 12,501 shares of Profit Sharing Stock held by the Company
and subject to forfeiture. Not included are options exercisable within
60 days: 885 shares at $47.88 per share; 19,668 shares at $54.23 per
share; 26,326 shares at $54.45 per share; and 22,600 shares at $56.63
per share.
[PHOTO] RONALD A. MITSCH, 60, Executive Vice President, Industrial and
Consumer Sector and Corporate Services; Member of the Executive and
Finance Committees. Dr. Mitsch joined 3M in 1960 as a senior chemist
in the central research laboratories and served in several
laboratory assignments until he was named Managing Director of 3M
Netherlands in 1979, and in 1981, Dr. Mitsch was appointed Research
and Development Vice President for the Life Sciences Sector. He was
elected Group Vice President for the Traffic and Personal Safety
Products Group in 1985; Senior Vice President, Research and
Development in 1990; and Executive Vice President, Industrial and
Consumer Sector and Corporate Services in 1991. Dr. Mitsch is a
director of Lubrizol Corporation, Shigematsu Works, Inc., Ltd., and
the SEI Center for Advanced Studies in Management; and a member of
the Board of Trustees of Hamline University.
Director since 1993 Shares Held 25,662*
*Includes 4,551 shares of Profit Sharing Stock held by the Company and
subject to forfeiture. Not included are options exercisable within 60
days: 3,394 shares at $29.45 per share; 3,138 shares at $31.85 per
share; 2,764 shares at $36.18 per share; 2,486 shares at $40.20 per
share; 2,260 shares at $44.23 per share; 7,227 shares at $47.88 per
share; 10,524 shares at $52.55 per share; 11,754 shares at $54.23 per
share; and 22,600 shares at $56.63 per share.
[PHOTO] ROZANNE L. RIDGWAY, 59, Co-Chair, The Atlantic Council of the United
States, an association to promote better understanding of major
international security, political, and economic problems,
Washington, D.C.; Member of the Board Organization and Compensation
Committees. Ambassador Ridgway served in the U.S. Foreign Service
from 1957 to 1989, including assignments as Ambassador for Oceans
and Fisheries Affairs, Ambassador to Finland, Counselor of the
Department of State, Ambassador to the German Democratic Republic,
and from 1985 and until her retirement in 1989, Assistant Secretary
of State for European and Canadian Affairs. She became President of
the Atlantic Council of the United States in 1989 and was named
Co-Chair in 1993. She is a director of Bell Atlantic Corporation,
The Boeing Company, Citicorp and Citibank, Emerson Electric Company,
RJR Nabisco, Sara Lee Corporation, and Union Carbide; a member of
the International Advisory Board of the New Perspective Fund; a
trustee of Hamline University, the National Geographic Society, and
The CNA Corporation; Vice Chairman, the American Academy of
Diplomacy; a director of the Council on Ocean Law; and a Fellow, the
National Academy of Public Administration.
Director since 1989 Shares Held 903
Shares Held as Deferred Stock 4,887
[PHOTO] FRANK SHRONTZ, 63, Chairman of the Board and Chief Executive
Officer, The Boeing Company, manufacturer and seller of aircraft and
related products; Member of the Compensation and Public Issues
Committees. Mr. Shrontz joined The Boeing Company in 1958. In 1973,
he took leave of absence from Boeing to serve as Assistant Secretary
of the Air Force and became Assistant Secretary of Defense in 1976.
In 1977, Mr. Shrontz returned to Boeing. After several assignments,
he was named President and a member of the Board of Directors of
Boeing in 1985. In 1986, he was named Chief Executive Officer and,
in 1988, Chairman of the Board. Mr. Shrontz is a director of Boise
Cascade Corporation and Citicorp and a citizen regent on the
Smithsonian Institution's Board of Regents. He is a member of the
Washington Roundtable and Vice Chairman of the New American Schools
Development Corporation. He is also a member of the Defense Policy
Advisory Committee on Trade (DPACT), The Business Council, and the
Policy Committee of The Business Roundtable.
Director since 1992 Shares Held 2,688
[PHOTO] LOUIS W. SULLIVAN, 61, President, Morehouse School of Medicine,
Atlanta, Georgia; Member of the Audit and Public Issues Committees.
Since completion of his medical training, Dr. Sullivan has held both
professional and administrative positions in health care facilities
and medical training institutions. He joined Morehouse College as
Professor of Biology and Medicine in 1975 and was the founding dean
and director of the Medical Education Program at the college. He was
named President of Morehouse School of Medicine in 1981. He served
as Secretary, United States Department of Health and Human Services,
from 1989 to 1993. He returned to Morehouse School of Medicine in
1993. Dr. Sullivan is a director of Bristol-Myers Squibb Company,
CIGNA Corporation, General Motors Corporation, Household
International, and Medical Review Systems, Inc. He is also a
director of the Boy Scouts of America and the Friends of the
National Library of Medicine; and a member of the Little League
Foundation and the National Medical Foundation.
Director since 1993 Shares Held 946
INCUMBENT DIRECTORS IN THE 1997 CLASS:
[PHOTO] LAWRENCE E. EATON, 57, Executive Vice President, Information,
Imaging and Electronic Sector and Corporate Services; Member of the
Executive and Finance Committees. Mr. Eaton joined 3M in 1960 as an
engineer in the Reflective Products Division laboratory and served
in several engineering and manufacturing assignments until he was
named Department Manager of the Pavement Markings Products
Department. In 1981, Mr. Eaton was appointed General Manager of the
Safety and Security Systems Division; in 1982, Division Vice
President of the Safety and Security Systems Division and, later
that year, Division Vice President of the Traffic Control Materials
Division; in 1984, Executive Vice President of Sumitomo 3M, Limited.
He was elected Group Vice President, Memory Technologies Group in
1986, and Executive Vice President, Information, Imaging and
Electronic Sector and Corporate Services in 1991. Mr. Eaton is a
director of Cray Research, Inc.
Director since 1993 Shares Held 28,385*
*Includes 3,732 shares of Profit Sharing Stock held by the Company and
subject to forfeiture. Not included are options exercisable within 60
days: 2,462 shares at $36.18 per share; 2,486 shares at $40.20 per
share; 2,260 shares at $44.23 per share; 8,964 shares at $47.88 per
share; 22,400 shares at $52.55 per share; 16,534 shares at $54.23 per
share; and 22,600 shares at $56.63 per share.
[PHOTO] ALLEN F. JACOBSON, 68, Director of various companies; Member of the
Board Organization and Compensation Committees. Mr. Jacobson joined
3M in 1947 and served in several capacities until he was elected
Chairman of the Board and Chief Executive Officer, in 1986. He
served in this capacity until his retirement from 3M in 1991. Mr.
Jacobson is a director of Abbott Laboratories, Deluxe Corporation,
Guthrie Theater, Mobil Corporation, Northern States Power Company,
Potlatch Corporation, Prudential Insurance Company, Sara Lee
Corporation, Silicon Graphics, Inc., U.S. West, Inc., and Valmont
Industries, Inc. He is also a member of the National Academy of
Engineering.
Director since 1983 Shares Held 81,878*
*Not included are options exercisable within 60 days: 10,506 shares at
$36.18 per share; 44,154 shares at $37.10 per share; 57,100 shares at
$39.08 per share; 42,914 shares at $40.20 per share; and 43,140 shares
at $44.23 per share.
[PHOTO] AULANA L. PETERS, 53, Partner, Gibson, Dunn & Crutcher, a law firm,
Los Angeles, California; Member of the Audit and Public Issues
Committees. Mrs. Peters joined Gibson, Dunn & Crutcher as an
Associate in 1973. In 1980, she was named a Partner in the firm and
continued in the practice of law until 1984, when she accepted an
appointment as Commissioner of the Securities and Exchange
Commission. In 1988, after serving four years as Commissioner, she
returned to the private practice of law as Partner in the Gibson,
Dunn & Crutcher firm. Mrs. Peters is a member of the American and
Los Angeles County Bar Associations; a director of the New York
Stock Exchange, Mobil Corporation, and Northrop Grumman.
Director since 1990 Shares Held 821
Shares Held as Deferred Stock 4,203
INFORMATION AS TO EXECUTIVE OFFICERS
On the same basis as the "shares held" information provided above for
nominees and incumbent directors, the following represents shares of the
Company's common stock held by the five executive officers named in the
Summary Compensation Table on page 12. Options exercisable within 60 days
after February 28, 1995 are shown separately.
OPTIONS
NAME AND PRINCIPAL POSITION SHARES HELD (1) EXERCISABLE (2)
Livio D. DeSimone,
Chairman of the Board and
Chief Executive Officer 108,699 124,477
Harry A. Hammerly,
Executive Vice President 47,725 69,479
Ronald A. Mitsch,
Executive Vice President 25,662 66,147
Lawrence E. Eaton,
Executive Vice President 28,385 77,706
Giulio Agostini
Senior Vice President 9,149 41,400
(1) The "shares held" include shares of Profit Sharing Stock held by the
Company and subject to forfeiture, as more fully described in Footnote 3 on
page 13 of this Proxy Statement.
(2) Option prices range for all of these named executive officers from $29.45
to $56.63 per share.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report was prepared at the direction of the Compensation Committee of
the Board of Directors (the "Committee") which is composed entirely of
nonemployee directors of the Company. The Committee establishes and
periodically reviews compensation levels and policies for the Chief Executive
Officer ("CEO") and other executive officers, and authorizes short and
long-term compensation in the form of cash or stock. The current members of
the Committee are Edward A. Brennan, who serves as Chairman, Allen F.
Jacobson, Rozanne L. Ridgway, and Frank Shrontz.
In determining the amount and type of executive compensation, the Committee
seeks to achieve the following objectives: (1) attract, motivate, and retain
talented, competent, and resourceful executive officers by providing
competitive compensation; (2) encourage executives to hold significant
amounts of stock; and (3) require that a substantial portion of executive
compensation is variable and "at risk" by being tied to quantifiable
short-term and long-term measures of the Company's performance. Executive
compensation is based on performance of the Company against a combination of
financial and non-financial criteria, ranging from achieving earnings and
sales growth targets to upholding the Company's Statement of Corporate Values
(which include customer satisfaction through superior quality and value,
attractive investor return, ethical business conduct, respecting the
environment, and fostering employee pride in the Company).
The Committee begins the process of establishing the amount of compensation
for the CEO and other executive officers by reviewing compensation surveys of
selected peer companies. The surveys are primarily conducted by independent
consultants specializing in executive compensation. The peer companies
included in the compensation surveys are selected by the independent
consultants. These peer companies consist of large industrial companies which
are most likely to be competitors for executive talent. Several different
surveys have been utilized which include groups of thirteen (13) to
(seventy-five (75)) different companies. The objective of the Committee is to
use the survey data to establish the amount of total compensation at a
competitive level. The Committee does not target any specific quartile of the
survey data for total compensation or any component of total compensation
(e.g., Base Salary, Profit Sharing, Performance Unit Plan, or Stock Options).
The Committee's objective of achieving the total compensation at a
competitive level has resulted in short-term compensation (base salary and
profit sharing) being slightly below the median and long-term compensation
(performance unit plan and stock options) being at or slightly above the
median. The Committee believes that the Company's most direct competitors for
executive talent are not necessarily all of the companies that would be
included in a peer group established to compare shareholder returns. Thus,
the peer group for purposes of the compensation surveys is not the same as
the peer group index in the Comparison of Five Year Cumulative Total Return
graph included on page 21 of this Proxy Statement.
After the Committee has established the amount of total compensation for the CEO
and other executive officers, the Committee next determines what percent of the
total compensation for a particular individual should be allocated to short-term
compensation in the form of base salary and profit sharing, and long-term
compensation in the form of the performance unit plan and stock options. This
determination is subjective but is based on information from the compensation
surveys and the objectives for executive compensation referred to above. It is
the Committee's long-standing policy that variable, at risk compensation, both
short and long-term, should make up a significant portion of executive
compensation. Depending upon the level of the executive, the Committee targets
between forty-five percent (45%) and seventy percent (70%) of executive
compensation to be variable and at risk by being tied to quantifiable measures
of the Company's performance. Because performance-based compensation is such a
significant part of executive compensation, it is the policy of the Committee to
maximize the deductibility of the performance-based compensation (e.g., profit
sharing, performance unit plan, and stock options) paid to the CEO and other
executive officers under Section 162(m) of the Internal Revenue Code. Each of
the components of short- and long-term executive compensation is described in
greater detail below.
BASE SALARY
The Committee establishes base salaries annually in relation to base salaries
paid by the selected peer companies from the compensation surveys. Base
salaries may be adjusted from time to time according to guidelines
established for all employees to reflect increased salary levels within the
peer group, increased responsibilities, or individual performance. The
Committee does not use financial performance factors, such as earnings per
share, in establishing Base Salary. This is the only component of executive
compensation that is not variable.
PROFIT SHARING
Profit sharing is variable compensation based on the quarterly consolidated
net income of the Company and is used to focus management attention on
profits and the effective use of assets. The number of profit sharing units
granted to the CEO and executive officers is determined by the Committee as
part of the overall compensation. The number of profit sharing units
allocated to each of the named executive officers is established by the
Committee, in the exercise of its collective judgment, to achieve the
appropriate ratio between short-term performance-based compensation and other
forms of compensation and to reflect the level of responsibility of the
respective executive officer. The amount payable with respect to each profit
sharing unit is determined by dividing the Company's consolidated quarterly
net income, less a quarterly reserve of two and one-half percent (21/2%) of
stockholders' equity (or approximately ten percent (10%) on an annual basis),
by the number of outstanding shares of the Company's common stock. Because of
the required minimum return on stockholder equity, the amount of compensation
paid under the profit sharing plan tends to rise and fall relatively more
sharply than changes in net income. No amount will be payable under the
profit sharing plan if the Company's quarterly net income is equal to or less
than the quarterly reserve of two and one-half percent (21/2%) return on
stockholders' equity. Profit sharing payments are subject to limitations when
individual amounts exceed specified relationships to Base Salary. For the
executive officers listed in the Summary Compensation Table, a portion of
profit sharing is paid in cash and a portion is paid in stock which is held
by the Company for ten years or until age 65, whichever occurs first. The
ratio between that portion of profit sharing paid in cash and the portion
paid in stock to the named executive officers for 1994 is subjective and
varies from year to year and among executive officers. However, the more
senior executive officers have generally been paid a larger portion of profit
sharing in stock than less senior executive officers. (More details about the
Company's Profit Sharing Plan are available on page 13 of this Proxy
Statement.)
PERFORMANCE UNIT PLAN
The Performance Unit Plan is variable compensation based on the Company's
long-term performance. The number of performance units allocated to each of
the named executive officers is established by the Committee, in the exercise
of its collective judgment, to achieve the appropriate ratio between
long-term performance-based compensation and other forms of compensation. The
number of performance units granted to the CEO and executive officers is
determined by the Committee as part of the overall compensation. The amount
payable with respect to each performance unit granted is determined by and is
contingent upon attainment of the performance criteria described below over
the performance period 1994-1996 (each year weighted equally). The
performance criteria have been selected to focus management attention on the
quality of future earnings and assets and on global real sales growth. (More
details about the Company's Performance Unit Plan are available on pages 18
and 19 of this Proxy Statement.)
Performance Criteria:
(1) "Relative ROCE" - is the percentage determined by dividing the Company's
average return on capital employed by the average return on capital employed
of the companies included, at the end of each year of the performance period,
in the Standard and Poor's Industrial Index ("S&P 400 ROCE"); and
(2) "Sales Growth" - is the percentage amount by which the Company's real
sales growth (sales growth adjusted for inflation and currency effects)
exceeds the weighted average of real growth reflected by the Industrial
Production Index for seven major industrial countries (the "Big 7 IPI").
Performance Unit Plan Payments:
The amount payable with respect to each performance unit is $100 if both the
Relative ROCE and Sales Growth targets are achieved and is payable on January
1, 2000 in the form (at the discretion of the Committee) of cash, stock or a
combination of cash and stock. The maximum amount payable with respect to
each performance unit is $200. No amount will be payable under the
performance unit plan if either the Company's cumulative ROCE is less than
one hundred fifty percent (150%) of the S&P 400 ROCE or if Sales Growth (as
defined above) is less than zero percent (0%).
STOCK OPTIONS
The Company's Stock Option plan is also variable compensation based on the
market appreciation of the Company's Common Stock and is designed to increase
ownership of the Company's stock. The Company makes stock option grants
annually at one hundred percent (100%) of the market price on the date of
grant. The options may be exercised after one year and have a ten year life.
The number of shares under options to be granted to the CEO and executive
officers is determined by the Committee as part of the overall compensation.
The awards are designed to keep total compensation competitive with awards
made by companies in the survey group, and as such require subjective
judgment as to the value of the award. The number of option shares currently
held by each executive is not considered in determining awards. Stock options
encourage executives to become owners of the Company which further aligns
their interests with the shareholders. Options have no value unless the price
of the Company's stock increases.
CHIEF EXECUTIVE OFFICER COMPENSATION
The compensation of Livio D. DeSimone, Chairman of the Board and Chief
Executive Officer, is determined by the same process and consists of the same
short- and long-term components as for the other executive officers listed in
the Summary Compensation Table, namely base salary, profit sharing,
performance unit plan, and stock options. The only difference is that a
higher portion of Mr. DeSimone's total compensation is variable and at risk
by being tied to quantifiable measures of the Company's performance. These
measures are quarterly net income, Relative ROCE and Sales Growth, as those
terms are defined above, and appreciation in the value of 3M stock. In
addition, the compensation paid to Mr. DeSimone is also based on performance
against non-financial measures, such as upholding the Company's Statement of
Corporate Values (which include customer satisfaction through superior
quality and value, attractive investor return, ethical business conduct,
respecting the environment and fostering employee pride in their company),
management succession planning, and the general overall perception of the
Company by financial and business leaders. In order to keep Mr. DeSimone's
total compensation competitive, the Committee increased his base salary in
1992 and again in 1994, which is reflected in the Summary Compensation Table
on page 12 of this Proxy Statement as higher base salaries for both 1993 and
1994. Because of increased earnings in 1994, Mr. DeSimone's profit sharing
cash and profit sharing stock was greater in 1994 than in 1993. The Committee
awarded Mr. DeSimone the same number of performance units (7,700) and stock
options (45,400) as it awarded him in 1993.
The Compensation Committee
Edward A. Brennan, Chairman
Allen F. Jacobson
Rozanne L. Ridgway
Frank Shrontz
EXECUTIVE COMPENSATION
The following tabulation shows compensation for services rendered in all
capacities to the Company and its subsidiaries during 1994, 1993, and 1992 by
the Chief Executive Officer and the next four highest-paid executive
officers.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION (1)
PROFIT SHARING OTHER ANNUAL
NAME AND PRINCIPAL SALARY CASH (BONUS) COMPENSATION
POSITION YEAR ($) ($)(2) ($)(4)
Livio D. DeSimone, 1994 $799,500 $362,308 $64,306
Chairman of the Board and 1993 759,600 248,130 --
Chief Executive Officer 1992 742,400 225,524 52,170
Harry A. Hammerly, 1994 460,800 238,278 --
Executive Vice President 1993 441,600 161,009 --
1992 441,600 154,876 --
Ronald A. Mitsch, 1994 420,000 238,278 --
Executive Vice President 1993 393,000 187,476 --
1992 375,400 163,007 --
Lawrence E. Eaton, 1994 408,000 233,544 --
Executive Vice President 1993 390,000 186,925 --
1992 375,200 159,678 --
Giulio Agostini, 1994 345,025 199,223 --
Senior Vice President 1993 315,600 174,036 --
1992 313,800 167,408 --
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION (1)
AWARDS PAYOUTS
PROFIT SHARING
STOCK OPTIONS PERFORMANCE
(RESTRICTED GRANTED UNIT PLAN ALL OTHER
NAME AND PRINCIPAL STOCK AWARDS) (# - NUMBER (LTIP) COMPENSATION
POSITION ($)(2)(3) OF SHARES)(5) PAYOUTS ($)(6) ($)(7)
Livio D. DeSimone, $377,773 93,956 $970,200 $62,028
Chairman of the Board and 330,013 84,566 456,120 67,052
Chief Executive Officer 317,444 80,930 507,500 34,414
Harry A. Hammerly, 120,717 48,926 466,200 63,542
Executive Vice President 105,455 42,268 456,120 68,651
101,439 41,292 507,500 22,781
Ronald A. Mitsch, 105,410 33,124 466,200 38,238
Executive Vice President 55,953 34,354 228,060 34,650
38,040 31,438 130,500 9,275
Lawrence E. Eaton, 89,315 45,000 466,200 33,945
Executive Vice President 51,931 39,134 120,365 35,702
37,114 33,544 130,500 9,275
Giulio Agostini, 64,067 15,000 226,800 14,832
Senior Vice President 35,841 11,600 -- 15,572
34,476 11,600 -- --
(1) The amounts shown in the Summary Compensation Table do not include
amounts expensed for financial reporting purposes under the Company's pension
plan. The plan is a defined benefit plan. The amounts shown in the Table do,
however, include those amounts voluntarily deferred by the named individuals
under the Company's Deferred Compensation Plan. The Deferred Compensation
Plan allows management personnel to defer portions of current base salary,
profit sharing, and performance unit compensation otherwise payable during
the year.
(2) The amounts shown under the headings "Profit Sharing Cash (Bonus)" and
"Profit Sharing Stock (Restricted Stock Awards)" are payments received under
the Profit Sharing Plan. The terms "(Bonus)" and "(Restricted Stock Awards)"
are included to satisfy the requirements of the Securities and Exchange
Commission ("SEC"). These payments are based upon the Company's performance
and are variable in accordance with a predetermined formula. The Compensation
Committee does not view these payments as bonus payments or restricted stock
awards as these terms are most often used. The Committee views bonus plans as
plans which provide for annual (as opposed to quarterly) payments from a pool
rather than based on a strict formula related to earnings per share, and
restricted stock awards are generally outright grants of stock as opposed to
payment in the form of stock held in the custody of the company (restricted
period) in lieu of cash under a formula based profit sharing plan.
Generally, profit sharing is paid in cash; however, senior executive
management, as determined by the Compensation Committee, receive a portion of
their profit sharing in shares of the Company's common stock (see footnote 3
on this page).
The Company's profit sharing plan provides for quarterly payments based upon
net income after deducting an allowance for a predetermined 10% annual rate
of return on stockholder equity and is determined by multiplying the number
of profit sharing units awarded to an individual by this quarterly net income
after deduction divided by the number of the outstanding shares of the
Company's Common Stock.
Because of the required minimum return on stockholder equity, profit sharing
tends to rise and fall relatively more sharply than changes in net income.
The number of profit sharing units awarded to the individuals named is
determined by the Compensation Committee and is intended to reflect the level
of responsibility of the respective individual. Profit sharing payments are
subject to limitations when individual amounts exceed specified relationships
to base salary. Approximately 4,200 management employees currently
participate in profit sharing, including the five individuals in the summary
compensation table.
(3) The amount shown under the heading "Profit Sharing Stock (Restricted
Stock Awards)" represents the portion of profit sharing issued as common
stock to the named individuals, valued at 100% of the fair market value at
the end of the quarterly profit sharing performance period. The number of
shares is determined by the Company's quarterly net income performance.
However, payment is deferred and conditional upon continued employment by the
Company. Therefore, pursuant to SEC rules, it is included under the headings
of "Long Term Compensation."
The shares are held in the custody of the Company for a period of ten years
or until age 65, whichever occurs first. Any termination of employment, prior
to that time, without the consent of the Compensation Committee or the Board
of Directors, other than upon death or permanent disability, will result in
forfeiture of the Profit Sharing Stock. The recipient is entitled to receive
dividends and vote these shares in the same manner as any other holder of the
Company's common stock during the period of custody by the Company.
From the time of issuance throughout the Restricted Period, Profit Sharing
Stock rises or falls in value in direct relationship to the Company's common
stock market performance. Consequently, Profit Sharing Stock reflects both
short-term and long-term performance elements.
The named individuals have accumulated, in several cases over seven years,
the following shares of the Company's common stock under the Company's profit
sharing plan as of December 31, 1994, valued for these purposes at the fair
market value of such stock on December 31, 1994, and also on the respective
dates when the shares were issued into the custody of the Company:
VALUE VALUE
NAME SHARES AT 12/31/94 WHEN ISSUED
L.D. DeSimone 53,369 $2,848,570 $2,308,300
H.A. Hammerly 12,501 667,241 581,804
R.A. Mitsch 4,551 242,910 229,861
L.E. Eaton 3,732 199,196 191,121
G. Agostini 2,612 139,416 134,348
(4) "Other Annual Compensation" includes the following, to the extent that
the aggregate thereof exceeds $50,000: personal benefits received by the
named individuals, amounts reimbursed the individuals during the year for
payment of taxes, and that portion of interest above market rates (as
determined by the Securities and Exchange Commission) earned on that
compensation voluntarily deferred by the individuals. The personal benefits
included in these numbers represent the amount of personal financial planning
services, an amount paid on behalf of the individual for the term portion of
insurance under the Company's Senior Executive Split Dollar Plan, and
personal air travel on corporate aircraft imputed to the individual as income
for tax purposes. In the case of Mr. DeSimone, nearly all of the "Other
Annual Compensation" received in 1992 and 1994 was a result of income imputed
to him for travel.
(5) The number of stock options shown in this column includes both annual
grants of incentive and nonqualified stock options and Progressive Stock
Options, which are described more fully in footnote 1 on page 16.
(6) "LTIP Payouts" reflects the value of the total grant for each individual
under the Company's Performance Unit Plan after the three year performance
period (e.g., for 1994, the performance period is 1992-1994), but no amount
will be paid to these individuals under the grant for an additional three
years pursuant to the terms of the grant. The numbers shown represent
estimates based upon information available as of February 28, 1995. During
this additional three year period, interest will be paid at a rate determined
by the Company's ROCE performance. More specific information about the
Performance Unit Plan is set forth on pages 18 and 19.
(7) "All Other Compensation" includes: (a) that amount of Performance Unit
Plan earnings allocated during the year to the base amounts determined after
the three-year performance periods of each respective grant, to the extent
that such earnings are in excess of market interest rates (as determined by
the Securities and Exchange Commission); and (b) that amount deemed to be
compensation to the individuals under the Company's Senior Executive Split
Dollar Plan in accordance with rules developed by the Securities and Exchange
Commission. The Senior Executive Split Dollar Plan provides insurance to all
of the Company's executive officers under split dollar life insurance, which
is part term insurance and part whole life insurance with a cash value. Under
this Plan, the Company is reimbursed for the premium costs of the non-term
portion of coverage and a possible return when the arrangement terminates
either by insurance proceeds incident to the death of the individual or by
cash value after 15 years of participation in the Plan. During 1994, amounts
deemed compensation under the Plan to the named executive officers in the
Summary Compensation Table were $11,854 for Mr. DeSimone; $13,368 for Mr.
Hammerly; $19,853 for Dr. Mitsch; $20,891 for Mr. Eaton; and $14,832 for Mr.
Agostini. These amounts were determined by treating the non-term portion of
the coverage as an interest-free loan.
STOCK OPTIONS TABLE
The following tabulation shows for each person named in the Summary
Compensation Table the specified information with respect to option grants
during 1994.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
% OF TOTAL GRANT DATE
OPTIONS/ OPTIONS/SARS VALUE
SARS GRANTED EXERCISE OR GRANT DATE
GRANTED (#) TO EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE ($)
NAME (1) FISCAL YEAR ($/SH) (2) DATE (4)
L.D. DeSimone 45,400 1.090% $50.20 5-10-2004 $ 349,580
1,522 0.037 52.55 5-12-1995 8,691
2,458 0.059 52.55 5-10-1996 14,035
7,560 0.182 52.55 5-09-1997 43,168
11,636 0.279 52.55 5-08-1998 66,442
9,900 0.238 52.55 5-07-1999 56,529
1,656 0.040 52.55 5-05-2000 9,456
13,824 0.332 52.55 5-10-2002 78,935
H.A. Hammerly 22,600 0.543 50.20 5-10-2004 174,020
4,571 0.110 54.45 5-09-1997 27,655
3,675 0.088 54.45 5-07-1999 22,234
18,080 0.434 54.45 5-11-2001 109,384
R.A. Mitsch 22,600 0.543 50.20 5-10-2004 174,020
1,094 0.026 52.55 5-09-1997 6,247
4,288 0.103 52.55 5-08-1998 24,484
3,410 0.082 52.55 5-07-1999 19,471
1,732 0.042 52.55 5-05-2000 9,890
L.E. Eaton 22,600 0.543 50.20 5-10-2004 174,020
3,730 0.090 52.55 5-08-1998 21,298
5,914 0.142 52.55 5-05-2000 33,769
12,756 0.306 52.55 5-10-2002 72,837
G. Agostini 15,000 0.360 50.20 5-10-2004 115,500
All Optionees (4,374
Participants) 4,164,597 100.000% $50.20(2) 5-10-2004(3) $31,634,341
(1) The Company does not grant any stock appreciation rights ("SARs"). The
options shown for each individual include both annual grants of Incentive
Stock Options and nonqualified stock options and grants of Progressive Stock
Options ("PSO"). Nonqualified options are subject to a reload feature when
exercised with the payment of the option price in the form of previously
owned shares of the Company's common stock. Such an exercise results in
further grants of PSOs. The first grant shown for each individual is the
annual grant. The remaining lines are PSOs. The PSO grants for each
individual were made on a single date, but are, pursuant to SEC rules, shown
in multiple lines because of different expiration dates.
PSO grants were made to participants who exercised nonqualified stock options
and who made payment of the purchase price using shares of previously owned
Company common stock. The PSO grant is for the number of shares equal to the
shares utilized in payment of the purchase price and tax withholding, if any.
The option price for the PSO is equal to 100% of the market value of the
Company's common stock on the date of the exercise of the primary option or,
alternatively, on the date of the PSO grant to the five named individuals in the
Table, all of whom are subject to the requirements of Section 162(m). The option
period is equal to the remaining period of the options exercised.
Company common stock used for payment must have been owned by the participant
for at least six months, and only one exercise of nonqualified options per
participant per calendar year will be eligible for PSO grants by the Committee.
The presence of PSOs encourages early exercise of nonqualified stock options,
without foregoing the opportunity for further appreciation, and promotes
retention of the Company stock acquired.
In any event, a participant receiving an annual grant of nonqualified stock
options can never acquire more shares of Company common stock through successive
exercises of the initial and subsequent PSO grants than the number of shares
covered by the initial annual grant from the Committee.
(2) All options granted during the period were granted at the market value on
the date of grant if initial grants, or at the fair market values discussed
in footnote 1 above in the case of Progressive Stock Options, as calculated
from the average of the high and low prices reported on the New York Stock
Exchange Composite Index. The option price shown for the "All Optionees" line
is $50.20 since the vast majority of options granted during 1994 carried that
price.
(3) The expiration date for the "All Optionees" line is shown as May 10,
2004, since that is the applicable date for the vast majority of options
granted during 1994.
(4) Pursuant to the rules of the Securities and Exchange Commission, the
Company has elected to provide a grant date present value for these option
grants determined by a modified Black-Scholes or binomial option pricing
model. Among key assumptions utilized in this pricing model were: (i) that
the time of exercise of Incentive Stock Options would be four years, and of
PSOs would be two years, into the term of the option, which could be for
terms as long as ten years, in recognition of the historical exercise
patterns at the Company for these types of options; (ii) expected volatility
of 17.3%; (iii) risk-free rate of return of 3.5% for two years, and 5% for
four years; and (iv) dividend growth rate of 8.6%. No adjustments for
non-transferability or risk of forfeiture have been made. The Company voices
no opinion that the present value will, in fact, be realized and expressly
disclaims any representation to that effect.
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following tabulation shows for each person named in the Summary
Compensation Table the specified information with respect to option exercises
during 1994 and the value of unexercised options at the end of 1994.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION VALUE
SHARES VALUE OF UNEXERCISED
ACQUIRED NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ON EXERCISE VALUE REALIZED OPTIONS AT FY-END (#) AT FY-END ($)(1)
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
L.D. DeSimone 53,764 $356,198 174,562 45,400 $433,745 $144,145
H.A. Hammerly 37,676 360,697 76,492 48,926 203,658 71,755
R.A. Mitsch 11,534 82,559 86,174 22,600 419,701 71,755
L.E. Eaton 24,400 147,084 77,706 22,600 163,560 71,755
G. Agostini -- -- 41,400 15,000 281,585 47,625
(1) The "Value Realized" or the unrealized "Value of Unexercised In-the-Money
Options at FY-End " represents the aggregate difference between the market value
on the date of exercise or at December 31, 1994, in the case of the unrealized
values, and the applicable exercise prices. These differences accumulate over
what may be, in many cases, several years. These stock options all have option
periods of ten years when first granted, and Progressive Stock Options have
option periods equal to the remaining option period of the initial nonqualified
options resulting in Progressive Stock Options.
LONG-TERM INCENTIVE PLAN AWARDS TABLE
The following tabulation shows for each person in the Summary Compensation
Table the specified information with respect to awards during 1994 under the
Company's Performance Unit Plan.
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE BASED PLANS(3)
PERFORMANCE OR
NUMBER OF OTHER PERIOD
SHARES, UNITS UNTIL
OR OTHER MATURATION
NAME RIGHTS (#)(1) OR PAYOUT (2) THRESHOLD ($) TARGET ($) MAXIMUM ($)
L.D. DeSimone 7,700 6 years $0 $770,000 $1,540,000
H.A. Hammerly 3,700 6 years 0 370,000 740,000
R.A. Mitsch 3,700 6 years 0 370,000 740,000
L.E. Eaton 3,700 6 years 0 370,000 740,000
G. Agostini 2,400 6 years 0 240,000 480,000
(1) The Company's Performance Unit Plan provides long-term compensation to
approximately 150 key management personnel based upon the Company's
attainment of long-term performance and growth criteria.
It is administered by the Compensation Committee, none of the members of
which are current employees of the Company. The Committee has sole discretion
in the selection of participants, performance criteria, size of awards,
performance period, and the timing and form of payment, as well as all other
conditions regarding awards.
To date, the Committee has established the performance goals based on
criteria of return on capital employed and sales growth. More detail about
current performance goals is available in the Compensation Committee Report
on page 8. Performance units awarded to date have been assigned a face value
of $100 each. However, the actual amount of the payments is based upon the
Company's attainment of the performance goals. If the targets established by
the Committee are attained during the performance periods, the performance
unit will have a value of $100 at the end of the performance period. If the
target is not attained, the value will be less than $100 and, if exceeded,
will be more than $100. The ultimate value of the performance unit can vary
from no value to $200, depending upon actual performance.
Payment is contingent upon continued employment to the payment date or
earlier retirement under the Company's pension plan. Participants receiving
awards during 1994, including the five executive officers in the Summary
Compensation Table, will receive payment in 2000, provided that such
individuals continue employment with the Company until such payment date
(except in the event of death, retirement, or disability). Payment under the
Plan may be made in cash, shares of the Company's common stock, or any
combination of cash and stock, at the discretion of the Compensation
Committee. In the past, payment has only been made in cash.
(2) The awards granted during 1994 will be determined by the Company's
attainment of return on capital employed and sales growth criteria during a
three-year performance period of 1994, 1995, and 1996. More detail about
current performance goals is available in the Compensation Committee Report
on pages 8 and 9. However, there will be an additional three-year involuntary
holding period thereafter during which the base amounts determined during the
performance period will earn interest and remain subject to forfeiture if the
participant discontinues employment for any reason other than death,
disability, or retirement.
(3) The estimated future payouts do not include any interest factor which
would be earned annually during the three-year involuntary holding period
following the performance period. Interest during the involuntary holding
period would accrue annually at a rate equal to 50% of the return on capital
employed of the Company during the three years and would be payable, together
with the base award, in 2000.
PENSION PLAN TABLE
The following table sets forth the estimated annual benefits payable to the
Company's executive officers upon retirement in specified remuneration and
years of service classifications.
ANNUAL RETIREMENT BENEFITS
WITH YEARS OF SERVICE
INDICATED (2)
AVERAGE
ANNUAL EARNINGS
DURING THE HIGHEST
FOUR CONSECUTIVE
YEARS OF SERVICE 30 35 40 45
(1) YEARS YEARS YEARS YEARS
$ 800,000 $357,278 $416,825 $ 462,825 $ 508,825
1,000,000 447,278 521,825 579,325 636,825
1,200,000 537,278 626,825 695,825 764,825
1,400,000 627,278 731,825 812,325 892,825
1,600,000 717,278 836,825 928,825 1,020,825
1,800,000 807,278 941,825 1,045,325 1,148,825
(1) Earnings include base salary, profit sharing cash, and the value of
Profit Sharing Stock (at the time of award) actually earned by the
participant and does not include any other forms of remuneration. The
benefits are computed on the basis of straight-life annuity amounts, and are
not subject to any deduction for social security or other offset amounts.
(2) To provide for the retirement security of its employees, the Company has
defined benefit pension plans for U.S. employees. These plans are fully paid
by the Company, and employees become vested after five years of service.
Under the plans, a participant may retire with an unreduced pension at age
60, and if the participant's age and service total at least 90, he or she
would receive a social security bridge to age 62.
The five individuals listed in the Summary Compensation Table are presently
entitled to the respective years of service credit set opposite their names:
L.D. DeSimone 38
H.A. Hammerly 40
R.A. Mitsch 35
L.E. Eaton 35
G. Agostini 29
DIRECTORS' FEES
Directors who are not employed by the Company receive an annual fee of
$38,000, of which $13,000 is paid only in common stock of the Company, if, at
the time of payment, the nonemployee director owned less than 13,000 shares
of the Company's common stock. Committee chairmen, not employed by the
Company, receive an additional fee of $5,500 per year. Nonemployee directors
are paid $1,800 for attendance at meetings of the Board of Directors and
$1,200 for attendance at meetings of Committees of the Board. No directors'
fees are paid to directors who were also employees of the Company. During the
last full fiscal year, there were five meetings of the Board of Directors,
and all nonemployee directors had four scheduled meetings of Committees of
the Board.
All incumbent Directors and nominees for reelection attended 75 percent or
more of Board and Committee meetings. The average attendance was in excess of
90 percent of all Board and Committee meetings.
Pursuant to the terms of the Company's 1992 Directors Stock Ownership
Program, nonemployee directors may elect to defer payment of all or a portion
of the foregoing fees payable in cash through a deferred cash or common stock
equivalents account. This permits nonemployee directors to build identity of
interest with stockholders generally through the deferred stock which is
equivalent to the Company's common stock, except that shares of deferred
stock may neither be voted or disposed. In addition, nonemployee directors,
who serve more than one year as such, are paid retirement income equal to the
annual retainer in effect at the time of their retirement for a period equal
to their length of service on the Board as a nonemployee director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Committee are Messrs. Brennan, Chairman, Jacobson,
Shrontz, and Ambassador Ridgway.
Mr. Jacobson retired on November 1, 1991, as Chairman of the Board and Chief
Executive Officer of the Company. The Securities and Exchange Commission
requires that Mr. Jacobson's participation on the Committee be characterized
as "insider participation" based upon his former employment with 3M. The
Board of Directors believes that Mr. Jacobson's participation in the
deliberations of the Committee provides continuity and specific knowledge
about individual performances and, further, that no conflicts of interest
exist. Mr. Jacobson did not participate in any grant or award decisions of
the Committee during the one-year period following his retirement or with
regard to any matter that might affect him personally.
3M STOCK PERFORMANCE GRAPH
The graph below compares the Company's cumulative total shareholder return,
overall stock market performance with reinvested dividends, during the five
fiscal years preceding December 31, 1994, against the Standard & Poor's 500
Stock Index and the Dow Jones Industrial Average, both of which are
well-known and published industry indices. The Company is included in both
the S&P 500 Stock Index and the Dow Jones Industrial group of 30 companies.
The Company, as a highly diversified manufacturer and seller of a broad line
of products, is not easily categorized with other more specific industry
indices.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
3M, S&P 500 INDEX AND DOW JONES INDUSTRIAL AVERAGE
1989 1990 1991 1992 1993 1994
3M 100.00 111.55 128.17 139.93 155.96 158.36
DJIA 100.00 99.44 123.49 132.64 155.11 162.96
S&P500 100.00 96.89 126.28 135.89 149.52 151.55
TRANSACTIONS WITH MANAGEMENT
During 1994, seven executive officers and directors had loans outstanding
with the Eastern Heights State Bank of Saint Paul, a subsidiary of the
Company. These loans were made in the ordinary course of business on
substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons
of comparable circumstances and did not involve more than normal risk of
collectibility or present other unfavorable features.
AUDIT, COMPENSATION, AND BOARD ORGANIZATION COMMITTEES OF THE BOARD OF DIRECTORS
The Audit, Compensation, and Board Organization Committees are standing
Committees of the Board.
AUDIT COMMITTEE
Members of the Audit Committee are Mr. Murray (Chairman), Mr. Junkins, Mrs.
Peters, Mr. Smith, and Dr. Sullivan. The Committee met four times during
1994. Its primary functions are to recommend independent certified public
accountants; review the scope of the audit examination, including fees and
staffing; review the independence of the auditors; review and approve
nonaudit services provided by the auditors; review findings and
recommendations of auditors and management's response; review the internal
audit and control function; and review compliance with the Company's ethical
business practices policy.
COMPENSATION COMMITTEE
Members of the Compensation Committee are Messrs. Brennan (Chairman),
Jacobson, and Shrontz, and Ambassador Ridgway. The Committee met four times
during 1994. Its primary functions are to review management compensation
programs, approve compensation changes for senior executive officers, review
compensation changes for senior management, and administer management stock
option plans (acting without any person who may be a participant under any
such plans).
BOARD ORGANIZATION COMMITTEE
Members of the Board Organization Committee are Messrs. DeSimone (Chairman),
Jacobson, Junkins, Murray, Smith, and Ambassador Ridgway. The Committee met
four times during 1994. The Committee acts to select and recommend candidates
to the Board of Directors to be submitted for election at the Annual Meeting.
The Board of Directors has adopted criteria with respect to its membership
and the Committee will consider candidates recommended by stockholders or
others in light of these criteria. A stockholder may submit the name of a
proposed nominee by writing to the Office of the Secretary, Minnesota Mining
and Manufacturing Company, 3M Center, St. Paul, Minnesota 55144. The
Committee also reviews and makes recommendations to the Board of Directors
concerning the composition and size of the Board and its committees,
frequency of meetings, directors' fees, and similar subjects; reviews and
makes recommendations concerning retirement and tenure policy for Board
membership; recommends proxies for meetings at which directors are elected;
and audits programs for senior management succession.
SECTION 16 COMPLIANCE
The rules of the Securities and Exchange Commission require disclosure of
late Section 16 filings by 3M directors and executive officers. To the best
of the Company's knowledge and belief, there were no late filings during
1994.
ITEM 2. INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee recommended and the Board of Directors appointed the firm
of Coopers & Lybrand L.L.P., independent certified public accountants, to
audit the books and accounts of the Company and its subsidiaries for the year
1995. In accordance with the Bylaws of the Company, this appointment is being
presented to the stockholders for ratification. If the stockholders do not
ratify the selection of Coopers & Lybrand L.L.P., the selection will be
reconsidered by the Board of Directors.
Coopers & Lybrand L.L.P. has audited the Company's books since 1975. The firm
has offices and affiliates in most localities throughout the world where the
Company has operations. Audit services provided by the firm in 1994 included:
audit of consolidated financial statements of the Company and its
subsidiaries; limited reviews of interim reports; reviews of filings with the
Securities and Exchange Commission; consultations on matters related to
accounting and financial reporting; assisting the Audit Committee in the
review of compliance with the Company's ethical business practices policy;
audits of statutory financial statements for certain foreign subsidiaries;
and audits of the financial statements of the Company's benefit plans.
Coopers & Lybrand L.L.P. also provided a number of nonaudit services during
1994, all of which were approved or reviewed by the Audit Committee. The
aggregate fees for these nonaudit services constituted approximately 17
percent of the fees for audit services performed by Coopers & Lybrand L.L.P.
A representative of Coopers & Lybrand L.L.P. is expected to be present at the
stockholders meeting and available to respond to appropriate questions and
will be given an opportunity to make a statement, if the representative
chooses to do so.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF COOPERS & LYBRAND L.L.P., INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS, TO AUDIT THE BOOKS AND ACCOUNTS FOR 1995. PROXIES SOLICITED BY
THE BOARD OF DIRECTORS WILL BE VOTED FOR RATIFICATION UNLESS A CONTRARY VOTE
IS SPECIFIED.
ITEM 3. STOCKHOLDER PROPOSAL REGARDING ELECTION OF DIRECTORS
The following stockholder proposal was submitted pursuant to Rule 14a-8 of
the Securities Exchange Act of 1934 by Richard A. Dee, 115 East 89th Street,
New York, New York 10128, holder of record of 100 shares of the Company's
common stock. The affirmative vote of holders of a majority of all shares of
common stock of the Company entitled to vote and cast with respect thereto
shall be required for the adoption of this proposal regarding the election of
the Company's directors.
PROPOSAL AND SUPPORTING STATEMENT
"Stockholders of publicly-owned companies do not 'elect' directors. Directors
are selected by incumbent directors and managements - stockholders merely
'ratify' or approve those selections much as they ratify selections of
auditors.
"The term 'Election of Directors' is misused in proxy materials to refer to
the process by which directors are empowered. The term is inappropriate - and
misleading. With no choice of candidates, there is no election.
"Approval of this Corporate Governance proposal will provide 3M stockholders
a choice of director candidates - and an opportunity to elect those whose
qualifications and stated intentions they favor. Its approval will provide
stockholders with properly or 'duly' elected representatives.
"In 1979 and 1980, I sponsored at 3M the first Corporate Governance proposals
submitted by a stockholder to a publicly-owned company. The proposals called
for 3M to reconstitute its board of directors with a majority of independent
"outside directors". The board was management-dominated and, based on my
experiences, its few outside directors were ineffective window dressing.
"3M campaigned actively against the proposals. On average, under 5% of shares
were voted for an outside director majority. Institutional investors
controlled over 54% of 3M shares; almost all voted against the proposals - as
the Company requested. In spite of its vehement opposition to the proposals,
not long after their defeat 3M quietly reconstituted its board - with an
outside director majority!
"Outside director board majorities now are standard at virtually all major
publicly-owned companies, institutional investors have become well-publicized
sponsors of many Corporate Governance proposals - and such fiduciaries rarely
invest in publicly-owned companies that lack outside director majorities.
"Providing stockholders a choice of directors and a true election is an idea
whose time has come - as it came for outside director majorities.
Understandably, incumbent directors are anxious to protect their absolute
power over corporate activities. Control of corporate governance through
control of board composition assures that power.
"Public office-holders are duly (and democratically) elected - and are held
accountable. Continuing in office requires satisfying constituents, not
simply nominators. Corporate directors take office unopposed and answer only
to fellow directors.
"It is impossible, realistically, for stockholders to utilize successfully
their purported right to nominate and to elect directors; no practical means
will exist for them to cause director turnover - until this or a similar
proposal is approved.
"It is hereby proposed that the Board of Directors, at its next regular
meeting, adopt a resolution requiring the Board Organization Committee to
nominate two candidates for each directorship to be filled by voting of
stockholders at annual meetings. In addition to customary personal
backgrounds, Proxy Statements shall include a statement by each candidate as
to why he or she believes they should be elected.
"Although Delaware law enables incumbents to select all nominees, approval of
this proposal will permit stockholders to replace any or all directors if
they become dissatisfied with them or the results of corporate policies
and/or performance. Not a happy prospect even for those able to nominate
their possible successors.
"Please vote FOR this proposal."
COMPANY'S STATEMENT IN OPPOSITION TO THE PROPOSAL
Your Company is an economic enterprise. As such, a primary objective of its
Board of Directors is to ensure that the Company provides an attractive
economic return to its stockholders, while fulfilling its responsibilities to
customers, employees, competitors, the environment, and the communities in
which it operates. Attracting and retaining the most highly qualified
candidates, in view of the composite backgrounds of the total membership of
the Board of Directors, is critical to achieving its business objectives.
The Board Organization Committee carefully reviews and brings forward to the
full membership of the Board candidates who can best fit the current and
future needs of the Company. The Board of Directors then recommends nominees
for election by you, the Company's stockholders.
The Board of Directors does not believe that the process by which "public
office-holders" are elected is a better method to select nominees. The Board
of Directors does not believe it can best discharge its responsibilities to
you, its stockholders, by proposing alternate candidates for each
directorship.
Further, it is possible that many of the most qualified candidates would not
consent to stand for election to the Company's Board under the condition of
this political process.
This proposal is not in the best interest of the Company or your interests as
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE STOCKHOLDER PROPOSAL
RELATING TO THE NOMINATION PROCESS FOR DIRECTORS. PROXIES SOLICITED BY THE
BOARD OF DIRECTORS WILL BE VOTED AGAINST THIS PROPOSAL UNLESS A CONTRARY VOTE
IS SPECIFIED.
ITEM 4. STOCKHOLDER PROPOSAL REGARDING REINCORPORATION IN MINNESOTA
The following stockholder proposal was submitted pursuant to Rule 14a-8 of
the Securities Exchange Act of 1934 by Aaron Belk, Trustee of the
International Brotherhood of Teamsters Affiliates Pension Fund, 25 Louisiana
Avenue N.W., Washington, D.C. 20001, which Fund is the beneficial owner of
12,600 shares of the Company's common stock. The affirmative vote of holders
of a majority of all shares of common stock of the Company entitled to vote
and cast with respect thereto shall be required for the adoption of this
proposal regarding reincorporation of the Company in the State of Minnesota.
PROPOSAL
RESOLVED: That shareholders urge the Board of Directors of Minnesota Mining
and Manufacturing Co. take the steps necessary to reincorporate our Company
from Delaware to Minnesota.
SUPPORTING STATEMENT
While Minnesota Mining and Manufacturing was founded in Two Harbors, Minn.,
is headquartered in Minnesota, and remains one of the leading corporate
citizens of Minnesota, the state that oversees our company's corporate rules
is Delaware.
For 3M, Delaware offers corporate governance law friendly to management. In
1986, for example, the state removed the financial penalty for directors who
violate the fiduciary duty of care (if shareholders approve).
For Delaware, such management-friendly rules attract incorporations. And
incorporations mean fees -- enough fees so that Delaware has no sales tax and
relatively low property taxes. Delaware lawmakers make no secret of this
scheme and the motives behind it.
In fact, 54 of the 100 largest American companies are incorporated in
Delaware, and only one of these -- DuPont -- is headquartered here.
But what serves management and Delaware, however, doesn't necessarily serve
shareholders. As another example, Delaware law tolerates any supermajority
vote requirements. Some companies have locked up simple governance rules such
as a classified board with an 80% supermajority vote requirement to amend it
- -- disenfranchising 79% of the shareholders who might seek reform.
Most problematic is the "race to the bottom" among the states. For example,
following Delaware's action to limit director liability led first to a flood
of reincorporation proposals. Then, 26 other states subsequently adopted
similar laws "in an attempt to keep their in-state companies from moving to
Delaware," explained IRRC.
Reincorporating the 3M to Minnesota won't immediately solve all corporate
governance deficiencies because the "race to the bottom" has already taken
its toll. Still, state lawmakers have become increasingly restless with this
"race." A recent report from the National Conference of State Legislatures
calls on lawmakers to pay close attention to matters of corporate governance.
With diligence, these lawmakers can make good on this resolve. It's then up
to shareholders to bring corporations back from Delaware.
By reincorporating the 3M in Minnesota, shareholders can bring our company
back home and help end the race to the bottom.
COMPANY'S STATEMENT IN OPPOSITION TO THE PROPOSAL
The Company's operations began in 1902 as a Minnesota corporation. In 1929,
the Company was reincorporated in Delaware for reasons unrelated to the
issues raised in this proposal. A separate court system devoted to corporate
and business matters remains unique to the State of Delaware. That court
system and a large body of law result in a high degree of predictability in
legal matters affecting business corporations.
Of the top 100 industrial corporations in the United States, more than 60
percent are incorporated in the State of Delaware. Another 15 percent are
incorporated in jurisdictions other than the jurisdiction of their principal
business location. Less than 25 percent are actually incorporated in the
jurisdiction of their principal business location, as suggested should be the
case for the Company in this proposal.
The Board of Directors does not believe that any particular effect on the
governance of the Company would result solely as a result of reincorporation
in Minnesota.
The act of reincorporation through liquidation and dissolution or merger
would necessitate extensive efforts and expenses that would run in the
millions of dollars, for no particular advantage. The transfer of properties
and assets, the assignment of all contracts, the cancellation and reissuance
of all outstanding shares of the Company, and similar tasks incidental to
such reincorporation would clearly distract attention from primary business
objectives of the Company. As an example, all outstanding common stock of the
Company in the possession of or controlled by its stockholders would
necessarily be surrendered in return for new certificates of a new
corporation.
This proposal is not in the best interest of the Company or your interests as
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE STOCKHOLDER PROPOSAL
RELATING TO REINCORPORATION IN THE STATE OF MINNESOTA. PROXIES SOLICITED BY
THE BOARD OF DIRECTORS WILL BE VOTED AGAINST THIS PROPOSAL UNLESS A CONTRARY
VOTE IS SPECIFIED.
OTHER MATTERS
The Management knows of no other matters which may properly be presented at
the Annual Meeting, but if other matters do properly come before the meeting,
it is intended that the persons named in the proxy will vote according to
their best judgment.
Stockholders are encouraged to date, sign, and return the enclosed proxy in
the enclosed envelope, to which no postage need be affixed if mailed in the
United States. If you attend the Annual Meeting, you may revoke your proxy at
that time and vote in person if you desire; otherwise, your proxy will be
voted for you. If you plan to attend the meeting in person, please mark the
appropriate box on the enclosed proxy card. An attendance card will then be
mailed to you. This will be helpful in making proper arrangements for the
meeting.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Any proposal submitted for inclusion in the Company's proxy statement and
form of proxy for the 1996 Annual Meeting of Stockholders must be received at
the Company's principalexecutive offices in St. Paul, Minnesota, on or before
December 1, 1995.
By Order of the Board of Directors.
ARLO D. LEVI
Vice President and Secretary
TO PARTICIPANTS IN THE 3M VOLUNTARY INVESTMENT PLAN
AND THE 3M EMPLOYEE STOCK OWNERSHIP PLAN
State Street Bank and Trust Company is Trustee of the Trusts established in
connection with the 3M Employee Stock Ownership Plan (the "ESOP") and the 3M
Voluntary Investment Plan (the "VIP"). As Trustee, it is the record owner of the
shares of common stock of Minnesota Mining and Manufacturing Company ("3M") held
in the ESOP and the Company Contribution Accounts of the VIP for the benefit of
participants. Since the portion of the 3M Payroll-Based Employee Stock Ownership
Plan ("PAYSOP") applicable to union-free employees was merged into the ESOP
during 1990, the shares of 3M common stock held in the PAYSOP Trust have now
been transferred to the ESOP Trust.
The ESOP and the VIP each permit participants to instruct the respective
Trustees how to vote the number of shares of 3M common stock allocated to the
participants' respective accounts. The number of shares of 3M common stock held
in your individual accounts in the ESOP and the VIP are indicated at the top of
the enclosed voting instruction card.
We enclose (1) a Notice of Annual Meeting of 3M Stockholders to be held on May
9, 1995, and Proxy Statement, (2) a card for giving voting instructions, and (3)
a return envelope. If you complete the card and return it in the enclosed return
envelope to Norwest Bank Minnesota, N.A., acting as tabulation agent for the
Trustee, by May 2, 1995, the Trustee will vote, in accordance with your
instructions, the shares of 3M common stock allocated to your respective
accounts.
The Trustee remains at all times the record owner of the 3M common stock held in
the ESOP and VIP accounts. The ability to instruct the Trustee how to vote
confers no right on participants to vote directly at the Annual Meeting of
Stockholders.
The enclosed instruction card must be properly completed if voting instructions
are to be honored. If the card is not received by May 2, 1995, or if the voting
instructions are invalid, the shares held in your ESOP Trust Account will be
voted by State Street Bank and Trust Company in the same proportion that the
other participants in the ESOP direct the Trustee to vote the shares held in
their ESOP accounts, and the shares held in your VIP account shall be voted by
State Street Bank and Trust Company as directed by the Public Issues Committee
of the 3M Board of Directors.
Please complete, date, sign, and promptly return the enclosed voting
instruction card.
TO PARTICIPANTS IN THE 3M SAVINGS PLAN
State Street Bank and Trust Company is Trustee of the Trust established in
connection with the 3M Savings Plan (the "Savings Plan"). As Trustee, it is the
record owner of the shares of common stock of Minnesota Mining and Manufacturing
Company ("3M") held in the Savings Plan for the benefit of participants. Since
the portion of the 3M Payroll-Based Employee Stock Ownership Plan ("PAYSOP")
applicable to employees eligible to participate in the Savings Plan was merged
into the Savings Plan during 1993, the shares of 3M common stock held in the
PAYSOP Trust have now been transferred to the Savings Plan.
The Savings Plan permits participants to instruct the Trustee how to vote the
number of shares of 3M common stock allocated to the participants' respective
accounts. The number of shares of 3M common stock held in your individual
account in the Savings Plan are indicated at the top of the enclosed voting
instruction card.
We enclose (1) a Notice of Annual Meeting of 3M Stockholders to be held on May
9, 1995, and Proxy Statement, (2) a card for giving voting instructions, and (3)
a return envelope. If you complete the card and return it in the enclosed return
envelope to Norwest Bank Minnesota, N.A., acting as tabulation agent for the
Trustee, by May 2, 1995, the Trustee will vote, in accordance with your
instructions, the shares of 3M common stock allocated to your account.
The Trustee remains at all times the record owner of the 3M common stock held in
the Savings Plan accounts. The ability to instruct the Trustee how to vote
confers no right on participants to vote directly at the Annual Meeting of
Stockholders.
The enclosed instruction card must be properly completed if voting instructions
are to be honored. If the card is not received by May 2, 1995, or if the voting
instructions are invalid, the shares held in your Savings Plan account shall be
voted by State Street Bank and Trust Company, as directed by the Public Issues
Committee of the 3M Board of Directors.
Please complete, date, sign, and promptly return the enclosed voting instruction
card.
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144 PROXY
3M VOLUNTARY INVESTMENT PLAN
AND 3M EMPLOYEE STOCK OWNERSHIP PLAN VOTING INSTRUCTIONS TO TRUSTEE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL
MEETING ON TUESDAY, MAY 9, 1995.
I hereby direct State Street Bank and Trust Company, as Trustee of the 3M
Employee Stock Ownership Plan Trust (the "ESOP Trust"), and as Trustee of the 3M
Voluntary Investment Plan Trust (the "VIP Trust"), to vote at the Annual Meeting
of Stockholders of Minnesota Mining and Manufacturing Company ("3M") to be held
on May 9, 1995 (or at any adjournment thereof) the shares of 3M common stock
allocated to my respective accounts in these two Plans as specified on this
instruction card.
I understand that this card must be received by the Norwest Bank Minnesota,
N.A., acting as tabulation agent for the Trustee, by May 2, 1995. If it is not
or if the voting instructions are invalid because not properly signed and dated,
the shares held in my ESOP Trust Account will be voted by State Street Bank and
Trust Company in the same proportion that the other participants in the ESOP
direct the Trustee to vote shares held in their ESOP Trust Accounts, and the
shares held in my VIP Trust Account will be voted by State Street Bank and Trust
Company as directed by the Public Issues Committee of the 3M Board of Directors.
PLEASE COMPLETE, SIGN, DATE, AND PROMPTLY RETURN THIS CARD.
(continued, and to be signed, on the other side)
VIP SHARES ESOP SHARES
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2 AND AGAINST
ITEMS 3 AND 4.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
ITEM 1. Election of directors
--Nominees to 1998 Class: (A) Edward A. Brennan (B) Livio D. DeSimone (C)
Allen E. Murray (D) F. Alan Smith
--Nominee to 1997 Class: (E) Jerry R. Junkins
[ ] Vote FOR all nominees
[ ] Vote FOR ALL EXCEPT
(use letter before nominee's name to indicate exceptions):
[ ] Vote WITHHELD from all nominees
ITEM 2. Ratification of auditors [ ] For [ ] Against [ ] Abstain
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 3 AND 4.
ITEM 3. Stockholder proposal regarding nomination process for directors
[ ] For [ ] Against [ ] Abstain
ITEM 4. Stockholder proposal regarding reincorporation
[ ] For [ ] Against [ ] Abstain
ITEM 5. In their discretion, to vote upon other matters properly coming before
the meeting
Signature
Signature
Date
I plan to attend the Annual Meeting. [ ]
Please sign exactly as your name(s) appear above. If held in joint tenancy, all
persons must sign. Trustees, administrators, etc. should include title and
authority. Corporations should provide full name of corporation and title of
authorized officer signing the proxy.
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144 PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON TUESDAY, MAY 9, 1995.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify on the reverse side of this card.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2 AND
"AGAINST" ITEMS 3 AND 4.
By signing the proxy, you revoke all prior proxies and appoint L.D. DeSimone,
A.E. Murray, and A.F. Jacobson, and each of them, with full power of
substitution, to vote your shares on the matters shown on the reverse side and
any other matters which may come before the Annual Meeting and all adjournments.
(continued, and to be signed, on the other side)
SHARES
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2 AND AGAINST
ITEMS 3 AND 4.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
ITEM 1. Election of directors
--Nominees to 1998 Class: (A) Edward A. Brennan (B) Livio D. DeSimone (C)
Allen E. Murray (D) F. Alan Smith
--Nominee to 1997 Class: (E) Jerry R. Junkins
[ ] Vote FOR all nominees
[ ] Vote FOR ALL EXCEPT
(use letter before nominee's name to indicate exceptions):
[ ] Vote WITHHELD from all nominees
ITEM 2. Ratification of auditors [ ] For [ ] Against [ ] Abstain
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 3 AND 4.
ITEM 3. Stockholder proposal regarding nomination process for directors
[ ] For [ ] Against [ ] Abstain
ITEM 4. Stockholder proposal regarding reincorporation
[ ] For [ ] Against [ ] Abstain
ITEM 5. In their discretion, to vote upon other matters properly coming before
the meeting
Signature
Signature
Date
I plan to attend the Annual Meeting. [ ]
Please sign exactly as your name(s) appear above. If held in joint tenancy, all
persons must sign. Trustees, administrators, etc. should include title and
authority. Corporations should provide full name of corporation and title of
authorized officer signing the proxy.
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144 PROXY
3M SAVINGS PLAN VOTING INSTRUCTIONS TO TRUSTEE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON TUESDAY, MAY 9, 1995.
I hereby direct State Street Bank and Trust Company, as Trustee of the 3M
Savings Plan Trust (the "Savings Plan Trust"), to vote at the Annual Meeting of
Stockholders of Minnesota Mining and Manufacturing Company ("3M") to be held on
May 9, 1995 (or at any adjournment thereof) the shares of 3M common stock
allocated to my account in this Plan as specified on this instruction card.
I understand that this card must be received by the Norwest Bank Minnesota,
N.A., acting as tabulation agent for the Trustee, by May 2, 1995. If it is not
or if the voting instructions are invalid because not properly signed and dated,
the shares held in my Savings Plan Trust Account will be voted by State Street
Bank and Trust Company, as directed by the Public Issues Committee of the 3M
Board of Directors.
PLEASE COMPLETE, SIGN, DATE, AND PROMPTLY RETURN THIS CARD.
(continued, and to be signed, on the other side)
SAVINGS PLAN SHARES
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2 AND AGAINST
ITEMS 3 AND 4.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
ITEM 1. Election of directors
--Nominees to 1998 Class: (A) Edward A. Brennan (B) Livio D. DeSimone (C)
Allen E. Murray (D) F. Alan Smith
--Nominee to 1997 Class: (E) Jerry R. Junkins
[ ] Vote FOR all nominees
[ ] Vote FOR ALL EXCEPT
(use letter before nominee's name to indicate exceptions):
[ ] Vote WITHHELD from all nominees
ITEM 2. Ratification of auditors [ ] For [ ] Against [ ] Abstain
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 3 AND 4.
ITEM 3. Stockholder proposal regarding nomination process for directors
[ ] For [ ] Against [ ] Abstain
ITEM 4. Stockholder proposal regarding reincorporation
[ ] For [ ] Against [ ] Abstain
ITEM 5. In their discretion, to vote upon other matters properly coming before
the meeting
Signature
Signature
Date
Please sign exactly as your name(s) appear above. If held in joint tenancy, all
persons must sign. Trustees, administrators, etc. should include title and
authority. Corporations should provide full name of corporation and title of
authorized officer signing the proxy.
I plan to attend the Annual Meeting. [ ]
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144 PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON TUESDAY, MAY 9, 1995.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify on the reverse side of this card.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2 AND
"AGAINST" ITEMS 3 AND 4.
By signing the proxy, you revoke all prior proxies and appoint L.D. DeSimone,
A.E. Murray, and A.F. Jacobson, and each of them, with full power of
substitution, to vote your shares on the matters shown on the reverse side and
any other matters which may come before the Annual Meeting and all adjournments.
(continued, and to be signed, on the other side)
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2 AND AGAINST
ITEMS 3 AND 4.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
ITEM 1. Election of directors
--Nominees to 1998 Class: (A) Edward A. Brennan (B) Livio D. DeSimone (C)
Allen E. Murray (D) F. Alan Smith
--Nominee to 1997 Class: (E) Jerry R. Junkins
[ ] Vote FOR all nominees
[ ] Vote FOR ALL EXCEPT
(use letter before nominee's name to indicate exceptions):
[ ] Vote WITHHELD from all nominees
ITEM 2. Ratification of auditors [ ] For [ ] Against [ ] Abstain
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 3 AND 4.
ITEM 3. Stockholder proposal regarding nomination process for directors
[ ] For [ ] Against [ ] Abstain
ITEM 4. Stockholder proposal regarding reincorporation
[ ] For [ ] Against [ ] Abstain
ITEM 5. In their discretion, to vote upon other matters properly coming before
the meeting
Signature Date
Signature Date
Please sign exactly as your name(s) appear above. If held in joint tenancy, all
persons must sign. Trustees, administrators, etc. should include title and
authority. Corporations should provide full name of corporation and title of
authorized officer signing the proxy.