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
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
MINNESOTA MINING AND MANUFACTURING COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] 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. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
LIVIO D. DESIMONE
Chairman of the Board and
Chief Executive Officer
March 25, 1998 [LOGO]
Dear Stockholder:
We cordially invite you to attend the 1998 Annual Meeting of Stockholders,
which will be held on Tuesday, May 12, 1998, at 10 a.m., at the RiverCentre
(formerly the St. Paul Civic Center), 175 West Kellogg Boulevard, 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 and the ratification of the appointment of independent auditors for
1998. I will report on current operations and discuss our plans for growth. We
also will leave plenty of time for your questions and comments.
The fine attendance of our stockholders at annual meetings over the years has
been very helpful in maintaining good communications and understanding. We
sincerely hope you will be able to be with us.
Please vote your proxy by telephone as described in the enclosed telephone
voting instructions or date, sign and return the enclosed proxy in the
envelope provided. Two attendance cards to the 1998 Annual Meeting are
enclosed.
Cordially,
/s/ L. DeSimone
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD MAY 12, 1998
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 12, 1998, at 10 a.m., at the RiverCentre
(formerly the St. Paul Civic Center), 175 West Kellogg Boulevard, St. Paul,
Minnesota, for the following purposes:
1. To elect three directors of the Company to the 2001 Class and one
director of the Company to the 1999 Class (see page 4 of the proxy
statement).
2. To ratify the appointment of Coopers & Lybrand L.L.P., independent
auditors, to audit the consolidated financial statements of the
Company for the year 1998 (page 20).
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed March 13, 1998, 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 Roger P. Smith, Secretary, 3M Center, St. Paul, Minnesota, during the
period of ten days prior to the meeting.
STOCKHOLDERS ARE ENCOURAGED TO VOTE THEIR PROXY BY TELEPHONE AS DESCRIBED
IN THE ENCLOSED TELEPHONE VOTING INSTRUCTIONS OR DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, TO WHICH NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES. TWO ATTENDANCE CARDS TO THE 1998 ANNUAL MEETING ARE
ENCLOSED.
/s/ Roger P. Smith
ROGER P. SMITH
SECRETARY
March 25, 1998
<PAGE>
CONTENTS
Notice of Annual Meeting of Stockholders ....................... i
Proxy Statement ................................................ 1
*Item 1 Election of Directors ................................... 2
Directors' Compensation ........................................ 7
Committees of the Board of Directors ........................... 8
Information as to Executive Officers ........................... 9
Compensation Committee Report on Executive Compensation......... 9
Executive Compensation -- Summary Compensation Table ........... 13
Stock Options Table ............................................ 15
Option Exercises and Year-End Value Table ...................... 17
Long-Term Incentive Plan Awards Table .......................... 17
Pension Plan Table ............................................. 18
3M Stock Performance Graph ..................................... 20
Transactions with Management ................................... 20
Section 16(a) Beneficial Ownership Reporting Compliance......... 20
*Item 2 Ratification of Independent Auditors .................... 20
Other Matters .................................................. 21
Submission of Stockholder Proposals for 1999 Annual Meeting .... 21
*To be voted on at the meeting
<PAGE>
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144
March 25, 1998
PROXY STATEMENT FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 12, 1998
The Board of Directors is soliciting proxies to be used at the Annual
Meeting of Stockholders on Tuesday, May 12, 1998, at 10 a.m., and at all
adjournments thereof for the purposes set forth in the attached Notice of Annual
Meeting of Stockholders. The Company anticipates that the proxy statement and
the form of proxy enclosed will first be sent to its stockholders on or about
March 25, 1998.
WHO CAN VOTE
Only stockholders of record at the close of business on March 13, 1998, are
entitled to vote at the Annual Meeting. As of February 27, 1998, the Company had
outstanding and entitled to vote 404,241,778 shares of common stock with par
value of $0.50 per share. The 67,774,750 shares of common stock in the Company's
treasury on that date will not be voted.
HOW YOU CAN VOTE BY PROXY
You may vote by one of the following methods:
* PROXY CARD: If you return your signed proxy card before the Annual
Meeting, we will vote your shares as you direct. You have three
choices on each matter to be voted upon. For the election of
directors, you may vote for (1) all of the nominees, (2) none of the
nominees, or (3) all of the nominees except those you designate. For
each of the other items, you may vote "FOR," "AGAINST," or "ABSTAIN"
from voting.
If you do not specify on your proxy card how you want to vote your
shares, we will vote them "FOR" the election of all nominees for
director, "FOR" ratification of independent auditors and as otherwise
recommended by the named proxies on the proxy card on any other matter
properly before the meeting.
* TELEPHONE VOTING: If you elect to vote your proxy by telephone as
described in the enclosed telephone voting instructions, we will vote
your shares as you direct. Your telephone vote authorizes the named
proxies to vote your shares in the same manner as if you marked,
signed and returned your proxy card.
HOW YOU MAY REVOKE OR CHANGE YOUR VOTE
You can revoke your proxy at any time before it is voted at the Annual
Meeting by:
(1) submitting another proxy with a more recent date than that of the
proxy first given (i) by using the telephone voting procedures,
or (ii) by signing and returning a proxy card to the Company;
(2) attending the Annual Meeting and voting in person; or
(3) sending written notice of revocation to the Secretary.
Another person at the meeting may also represent you by executing a proper
proxy designating that person.
VOTES REQUIRED/VOTING PROCEDURES
The nominees for election as directors at the Annual Meeting will be
elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting. All other matters submitted to the
stockholders will require the affirmative vote of a majority of the shares of
the Company's common stock present or represented and entitled to vote at the
Annual Meeting.
Abstentions and broker non-votes (described below) will be counted as
present or represented at the Annual Meeting for purposes of determining whether
a quorum exists. Because abstentions with respect to any matter are treated as
shares present or represented and entitled to vote for the purposes
<PAGE>
of determining whether that matter has been approved by the stockholders,
abstentions have the same effect as negative votes. Broker non-votes and shares
as to which proxy authority has been withheld with respect to any matter are not
deemed to be present or represented and entitled to vote for purposes of
determining whether stockholder approval of that matter has been obtained and
therefore will have no effect on the outcome of the vote on any such matter.
Proxies submitted by brokers that do not indicate a vote for some of the
proposals because the brokers don't have discretionary voting authority and
haven't received instructions from the beneficial owners on how to vote on those
proposals are called "broker non-votes."
DIVIDEND REINVESTMENT PLAN AND SAVINGS PLANS
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. 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. 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.
If a stockholder is a participant in the Company's Savings Plan, Voluntary
Investment Plan or Employee Stock Ownership Plan, separate proxy cards will be
mailed permitting participants to direct the trustee how to vote the number of
shares allocated to the participant's account.
The trustee of the Employee Stock Ownership Plan also votes allocated
shares of common stock for which it has not received direction, as well as
shares not allocated to individual participant accounts, in the same proportion
as directed shares are voted. If voting instructions are invalid or if the proxy
card is not returned by the specified date, the trustee will vote the shares
held in the stockholder's Savings Plan and Voluntary Investment Plan accounts as
directed by the Public Issues Committee of 3M's Board of Directors.
COSTS OF SOLICITATION
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, regular employees of the Company may make solicitations 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.
CONFIDENTIAL VOTING
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. 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.
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 9, 1998, the
Board of Directors fixed the number of directors constituting the entire Board
at twelve, effective as of the date of the 1998 Annual Meeting.
The Restated Certificate of Incorporation divides the Board into three
classes. Four directors have terms of office that expire at the 1998 Annual
Meeting, and three of the four directors are standing for reelection for a
three-year term as members of the 2001 Class. These are Edward A. Brennan, Livio
D. DeSimone and F. Alan Smith. Allen E. Murray, the fourth director in the 1998
Class, reaches normal
<PAGE>
retirement age in 1999 and is standing for election to the 1999 Class. The four
incumbent directors in the 1999 Class are continuing to serve until the 1999
Annual Meeting. The four directors in the 2000 Class are continuing to serve
until the 2000 Annual Meeting.
All nominees for election to the Board of Directors to the 2001 Class at
the 1998 Annual Meeting will be elected for a term of three years and shall
serve until their terms expire at the 2001 Annual Meeting or until their
successors are duly elected and have been qualified. The nominee for election to
the Board of Directors to the 1999 Class at the 1998 Annual Meeting will be
elected for a term of one year and shall serve until his term expires at the
1999 Annual Meeting or until his successor is duly elected and has been
qualified.
The persons named as proxies intend to vote the proxies for the election of
the four nominees to the Board of Directors. 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 27, 1998, 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 27, 1998, 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, 1997, 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 director's 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 27, 1998, executive officers and directors as a group
"beneficially owned" 639,342 shares. Executive officers held options exercisable
within 60 days after that date for 742,420 shares. All officers and directors as
a group owned beneficially less than one-half 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, no nominee
or incumbent director has been an employee of the Company within the past five
years.
During 1997, the Company retained the law firm of Gibson, Dunn & Crutcher
LLP, with regard to various legal matters. Mrs. Peters is a partner in this
firm.
<PAGE>
NOMINEES FOR ELECTION TO THE 2001 CLASS:
[PHOTO]
EDWARD A. BRENNAN, 64, RETIRED CHAIRMAN OF THE BOARD, PRESIDENT, AND CHIEF
EXECUTIVE OFFICER, SEARS, ROEBUCK AND CO., A DIVERSIFIED COMPANY ENGAGED IN
MERCHANDISING, CHICAGO, ILLINOIS; CHAIRMAN OF THE COMPENSATION AND MEMBER OF THE
BOARD ORGANIZATION COMMITTEES. Mr. Brennan joined Sears in 1956. He 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 of the Board and Chief Executive Officer of Sears,
Roebuck and Co. in 1986. Mr. Brennan retired from Sears in 1995. He is a
director of The Allstate Corporation, Morgan Stanley, Dean Witter, Discover &
Co., AMR Corporation, Unicom Corporation, Dean Foods Company and The SABRE Group
Holdings, Inc. He also is Chairman of the Board of Trustees of DePaul University
and Vice Chairman of Trustees of Rush-Presbyterian-St. Luke's Medical Center,
and a member of The Business Council.
DIRECTOR SINCE 1986 SHARES HELD..................... 4,817
SHARES HELD AS DEFERRED STOCK... 8,191
[PHOTO]
LIVIO D. DESIMONE, 61, 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 a director of National
Junior Achievement Inc., a trustee of the University of Minnesota Foundation,
and a member of the Board of Governors of The Nature Conservancy.
DIRECTOR SINCE 1986 SHARES HELD.................... 195,999*
* INCLUDES 58,436 SHARES OF PROFIT SHARING STOCK HELD BY THE COMPANY AND
SUBJECT TO FORFEITURE. NOT INCLUDED ARE OPTIONS EXERCISABLE WITHIN 60 DAYS:
1,745 SHARES AT $57.27 PER SHARE; 36,864 AT $63.04 PER SHARE; 41,439 SHARES
AT $66.73 PER SHARE; AND 70,897 AT $83.95 PER SHARE.
[PHOTO]
F. ALAN SMITH, 66, CHAIRMAN OF ADVANCED ACCESSORY SYSTEMS, INC., SUPPLIER OF
AUTOMOTIVE ACCESSORIES; RETIRED EXECUTIVE VICE PRESIDENT AND DIRECTOR, GENERAL
MOTORS CORPORATION, MANUFACTURER AND SELLER OF AUTOMOBILES AND AUTOMOTIVE
PRODUCTS, DETROIT, MICHIGAN; CHAIRMAN OF THE AUDIT AND MEMBER OF THE PUBLIC
ISSUES COMMITTEES. Mr. Smith was a director of General Motors Corporation from
1981 until his retirement in 1992. He joined General Motors in 1956. He 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; Executive Vice President, Finance, 1981
to 1988. In 1988, he was elected Executive Vice President, Operating Staffs and
Public Affairs and Marketing Staffs. He is a director of TransPro, Inc. and a
trustee of the Florida Institute of Technology.
DIRECTOR SINCE 1986 SHARES HELD..................... 5,715
SHARES HELD AS DEFERRED STOCK... 12,352
<PAGE>
NOMINEE FOR ELECTION TO THE 1999 CLASS:
[PHOTO]
ALLEN E. MURRAY, 69, RETIRED CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER,
MOBIL CORPORATION, PETROLEUM EXPLORATION, MANUFACTURING AND MARKETING OF
PETROLEUM AND PETROLEUM-BASED PRODUCTS, FAIRFAX, VIRGINIA; MEMBER OF THE
COMPENSATION AND PUBLIC ISSUES COMMITTEES. Mr. Murray has been a director of
Mobil Corporation since 1977. He was Chairman of the Board, President, and Chief
Executive Officer from 1986 until 1993; and Chairman of the Board and Chief
Executive Officer until March 1994. He retired from Mobil in 1994. He is a
director of Metropolitan Life Insurance Company, Lockheed Martin Corporation,
Morgan Stanley, Dean Witter, Discover & Co., and St. Francis Hospital
Foundation. He is also an honorary director of the American Petroleum Institute;
a trustee of New York University; and a member of The Business Council and the
Council on Foreign Relations.
DIRECTOR SINCE 1985 SHARES HELD..................... 3,065
SHARES HELD AS DEFERRED STOCK... 14,430
INCUMBENT DIRECTORS IN THE 2000 CLASS:
[PHOTO]
RONALD O. BAUKOL, 60, EXECUTIVE VICE PRESIDENT, INTERNATIONAL OPERATIONS; MEMBER
OF THE EXECUTIVE AND FINANCE COMMITTEES. Mr. Baukol joined 3M as an engineer in
the Medical Products Division laboratory in 1966 and served there until 1970, at
which point he took leave to serve as a White House Fellow and later with the
Environmental Protection Agency in Washington, D.C. Upon his return to 3M in
1972, he served in several general management capacities in 3M's health care
businesses until being appointed General Manager of Riker Laboratories, Inc. in
1982. In 1984, Mr. Baukol was appointed Vice President and General Manager,
Riker Laboratories, Inc. and in 1986, Chairman and Chief Executive, 3M United
Kingdom PLC. He was elected Group Vice President, Pharmaceutical and Dental
Products Group in 1989; Group Vice President, Medical Products Group in 1990;
Vice President, Asia Pacific in 1991; Vice President, Asia Pacific, Canada and
Latin America in 1994; and Executive Vice President, International Operations in
1995. Mr. Baukol is a director of Graco, Inc. and The Toro Company. He is a
trustee of the United States Council for International Business, a member of the
Board of Overseers of the Executive Council on Diplomacy, and a Governor of the
Iowa State University Foundation.
DIRECTOR SINCE 1996 SHARES HELD..................... 36,653*
* INCLUDES 2,873 SHARES OF PROFIT SHARING STOCK HELD BY THE COMPANY AND
SUBJECT TO FORFEITURE. NOT INCLUDED ARE OPTIONS EXERCISABLE WITHIN 60 DAYS:
1,551 SHARES AT $42.50 PER SHARE; 2,172 SHARES AT $46.00 PER SHARE; 2,073
SHARES AT $48.24 PER SHARE; 1,837 SHARES AT $54.41 PER SHARE; 1,745 SHARES
AT $57.27 PER SHARE; 23,519 SHARES AT $63.04 PER SHARE; 11,905 SHARES AT
$66.74 PER SHARE; AND 15,062 SHARES AT $83.95 PER SHARE.
[PHOTO]
EDWARD R. MCCRACKEN, 54, FORMER CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
OFFICER, SILICON GRAPHICS, INC., SUPPLIER OF SYSTEMS AND COMPONENTS FOR HIGH
PERFORMANCE COMPUTING SOLUTIONS. Mr. McCracken was employed for sixteen years at
Hewlett-Packard Company prior to joining Silicon Graphics, Inc. in 1984 as its
President and Chief Executive Officer. In 1994, he was elected Chairman and
Chief Executive Officer. He is a director of National Semiconductor Corporation
and Tularik, Inc. He is Chairman of PRASAD American, a charitable foundation;
former co-chair of The United States Advisory Council on the Information
Infrastructure and Silicon Valley Network, Inc.; and a Governor of the Iowa
State University Foundation.
DIRECTOR SINCE 1997 SHARES HELD..................... 320
SHARES HELD AS DEFERRED STOCK... 822
<PAGE>
[PHOTO]
W. GEORGE MEREDITH, 54, EXECUTIVE VICE PRESIDENT, CORPORATE SERVICES AND SUPPLY
CHAIN MANAGEMENT; MEMBER OF THE EXECUTIVE AND FINANCE COMMITTEES. Mr. Meredith
joined 3M United Kingdom PLC in 1967 as a research supervisor and served in
several materials control, distribution, and manufacturing capacities in Europe
and the United Kingdom before being appointed Managing Director, Riker, United
Kingdom, in 1980. In 1983, Mr. Meredith was appointed Managing Director, 3M
Health Care, United Kingdom; in 1986, General Manager, Riker Laboratories, Inc.;
and in 1989, Division Vice President, Pharmaceuticals Division. He was elected
Group Vice President, Pharmaceutical and Dental Products Group in 1990; Group
Vice President, Pharmaceuticals, Dental and Disposable Products Group in 1991;
and Executive Vice President, Life Sciences Sector and Corporate Services in
1995. Mr. Meredith is a trustee of Battelle Memorial Institute.
DIRECTOR SINCE 1996 SHARES HELD..................... 26,313*
* INCLUDES 1,844 SHARES OF PROFIT SHARING STOCK HELD BY THE COMPANY AND
SUBJECT TO FORFEITURE. NOT INCLUDED ARE OPTIONS EXERCISABLE WITHIN 60 DAYS:
687 SHARES AT $38.63 PER SHARE; 2,351 SHARES AT $42.50 PER SHARE; 2,172
SHARES AT $46.00 PER SHARE; 2,073 SHARES AT $48.24 PER SHARE; 1,837 SHARES
AT $54.41 PER SHARE; 17,209 SHARES AT $57.27 PER SHARE; 23,519 SHARES AT
$63.04 PER SHARE; 6,532 SHARES AT $65.77 PER SHARE; AND 9,229 SHARES AT
$83.95 PER SHARE.
[PHOTO]
AULANA L. PETERS, 56, PARTNER, GIBSON, DUNN & CRUTCHER LLP, A LAW FIRM, LOS
ANGELES, CALIFORNIA; MEMBER OF THE AUDIT AND BOARD ORGANIZATION 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, and the Regulatory Advisory Committee of the
New York Stock Exchange. She is also a director of Merrill Lynch & Co., Inc.,
Mobil Corporation, Northrop Grumman Corp. and Callaway Golf Company.
DIRECTOR SINCE 1990 SHARES HELD..................... 865
SHARES HELD AS DEFERRED STOCK... 8,989
INCUMBENT DIRECTORS IN THE 1999 CLASS:
[PHOTO]
RONALD A. MITSCH, 63, VICE CHAIRMAN OF THE BOARD AND EXECUTIVE VICE PRESIDENT,
INDUSTRIAL AND CONSUMER MARKETS; CHAIRMAN OF THE PUBLIC ISSUES COMMITTEE AND
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. In 1981, Dr. Mitsch was appointed Research and Development Vice President,
Life Sciences Sector. He was elected Group Vice President, 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. He was elected Vice Chairman of the Board in 1995.
Dr. Mitsch is a director of Lubrizol Corporation; NCR; Shigematsu Works, Inc.,
Ltd., Tokyo, Japan; the National Association of Manufacturers; and the SEI
Center for Advanced Studies in Management associated with The Wharton School of
Business of the University of Pennsylvania. He is also a member of the Board of
Trustees of Hamline University.
DIRECTOR SINCE 1993 SHARES HELD..................... 56,694*
* INCLUDES 10,390 SHARES OF PROFIT SHARING STOCK HELD BY THE COMPANY AND
SUBJECT TO FORFEITURE. NOT INCLUDED ARE OPTIONS EXERCISABLE WITHIN 60 DAYS:
2,587 SHARES AT $38.63 PER SHARE; 2,351 SHARES AT $42.50 PER SHARE; 2,172
SHARES AT $46.00 PER SHARE; 2,073 SHARES AT $48.24 PER SHARE; 4,856 SHARES
AT $54.41 PER SHARE; 23,519 SHARES AT $57.27 PER SHARE; 37,569 SHARES AT
$63.04 PER SHARE; 22,386 SHARES AT $66.73 PER SHARE; AND 22,502 SHARES AT
$83.95 PER SHARE.
<PAGE>
[PHOTO]
ROZANNE L. RIDGWAY, 62, FORMER ASSISTANT SECRETARY OF STATE FOR EUROPE AND
CANADA; 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 and to the German Democratic Republic, and from 1985 and until her
retirement in 1989, Assistant Secretary of State for European and Canadian
Affairs. Ambassador Ridgway served as President until 1992 and Co-Chair until
1996 of the Atlantic Council of the United States, an association to promote
better understanding of major foreign policy issues. She is a director of Bell
Atlantic Corporation, The Boeing Company, Citicorp and Citibank, Emerson
Electric Co., RJR Nabisco, Sara Lee Corporation and Union Carbide Corporation.
She is also chair of The Baltic-American Enterprise Fund.
DIRECTOR SINCE 1989 SHARES HELD..................... 1,241
SHARES HELD AS DEFERRED STOCK... 10,485
[PHOTO]
FRANK SHRONTZ, 66, CHAIRMAN EMERITUS, 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 left 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 retired
from Boeing in 1997. Mr. Shrontz is a director of Boise Cascade Corporation,
Chevron Corporation, and Citicorp and a citizen regent on the Smithsonian
Institution's Board of Regents. He is also a member of The Business Council.
DIRECTOR SINCE 1992 SHARES HELD..................... 3,031
SHARES HELD AS DEFERRED STOCK... 4,251
[PHOTO]
LOUIS W. SULLIVAN, 64, 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, Equifax, Inc.,
General Motors Corporation, Georgia-Pacific Corporation and Household
International. He is also a director of the Boy Scouts of America; a trustee of
the Little League Foundation; and a member of the National Medical Foundation.
DIRECTOR SINCE 1993 SHARES HELD..................... 1,672
SHARES HELD AS DEFERRED STOCK... 2,676
DIRECTORS' COMPENSATION
Directors who are not employed by the Company received in 1997 an annual
fee of $60,000 and Messrs. Brennan and Smith received additional fees of $5,500
per year for serving as Committee chairman. 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.
Pursuant to the terms of the Company's 1992 Directors Stock Ownership
Program, nonemployee directors received $35,000 of the total annual retainer of
$60,000 in common stock of the Company. 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 and fees payable in stock
through a deferred common stock equivalents account. The nonemployee directors
also may elect to receive common stock of the Company, on a current basis, at
current fair market value, in lieu of cash retainer and meeting fees.
Information regarding accumulated deferred stock is set forth in the director
biographical materials on pages 4 through 7.
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
During 1997, the Board of Directors met six times and various Committees of
the Board met as indicated below. The Audit, Compensation and Board Organization
Committees are standing Committees of the Board.
AUDIT COMMITTEE
Members: Mr. Smith (Chairman), Mr. McCracken, Mrs. Peters and Dr. Sullivan.
Number of meetings in 1997: Four.
Functions:
* Oversees internal controls, audits and financial reporting;
Recommends the appointment of independent auditors, subject to
stockholder approval, and oversees their independence;
* Consults with the independent auditors and reviews and approves
the scope of the annual audit, including fees and staffing, and
approves nonaudit services provided by the auditors;
* Reviews findings and recommendations of the independent auditors
and management's response; and
* Reviews compliance with the Company's ethical business practices
policy.
COMPENSATION COMMITTEE
Members: Mr. Brennan (Chairman), Mr. Murray, Ambassador Ridgway and Mr.
Shrontz.
Number of meetings in 1997: Four.
Functions:
* Reviews compensation policies of the Company to ensure they
provide appropriate motivation for corporate performance and
increased shareholder value; and
* Determines compensation policy for executive officers and
approves compensation changes for senior executive officers, and
administers management stock option plans and performance based
executive compensation plans.
BOARD ORGANIZATION COMMITTEE
Members: Mr. DeSimone (Chairman), Mr. Brennan, Mr. McCracken, Mrs. Peters,
and Ambassador Ridgway.
Number of meetings in 1997: Three.
Functions:
* Selects and recommends 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. Subject to the
notice requirements in the Bylaws, 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;
* 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; audits programs for
senior management succession; and
* Deals with corporate governance issues.
<PAGE>
INFORMATION AS TO EXECUTIVE OFFICERS
On the same basis as the "shares held" information provided on the previous
pages 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 13. Options exercisable within 60 days after
February 27, 1998, are shown separately.
- --------------------------------------------------------------------------------
OPTIONS
NAME AND PRINCIPAL POSITION SHARES HELD (1) EXERCISABLE (2)
--------------------------- --------------- ---------------
Livio D. DeSimone,
Chairman of the Board and
Chief Executive Officer 195,999 150,945
Ronald A. Mitsch,
Vice Chairman of the Board
and Executive Vice President 56,694 120,015
Ronald O. Baukol,
Executive Vice President 36,653 59,864
Giulio Agostini,
Senior Vice President 20,269 83,053
W. George Meredith,
Executive Vice President 26,313 65,609
- --------------------------------------------------------------------------------
(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 14 of
this proxy statement.
(2) Option prices for these shares range from $38.63 to $83.95 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-term 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 E. Murray, Rozanne L.
Ridgway and Frank Shrontz.
COMPENSATION OBJECTIVES
The executive compensation program is designed to align total compensation
with the Company's strategic objectives and ensure that payouts are driven by
Company performance and employee contribution to the Company. Executive
compensation is linked to Company performance compared to specific financial and
non-financial objectives. These objectives range 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).
In determining the amount and type of executive compensation, the Committee
seeks to achieve the following objectives:
* To attract, motivate and retain talented, competent and resourceful
executive officers by providing competitive compensation.
* To encourage executives to hold significant amounts of Company stock.
* To require that a substantial portion of executive compensation is "at
risk" by being tied to quantifiable short-term and long-term measures
of the Company's performance.
PROCESS OF ESTABLISHING COMPENSATION
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. Independent
<PAGE>
consultants specializing in executive compensation primarily conduct the
surveys. The Company, in consultation with the independent consultants, selects
the peer companies included in the compensation surveys. These peer companies
consist of large industrial companies that are most likely to be competitors for
executive talent. The objective of the Committee is to use the survey data to
establish a competitive level of total compensation. 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 20 of this proxy
statement.
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 maintaining the total compensation at a competitive level has
resulted in short-term compensation (base salary and profit sharing cash) and
long-term compensation (performance unit plan, profit sharing stock and stock
options) being at or very close to the median.
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 should be allocated to short-term compensation in the
form of base salary and profit sharing cash and long-term compensation in the
form of the performance unit plan, profit sharing stock 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 45 percent and 75 percent of executive compensation to be variable and
at risk by being tied to quantifiable measures of the Company's performance.
ELEMENTS OF THE COMPENSATION PROGRAM
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. This is the only component
of executive compensation that is not variable. The Committee does not use
financial performance factors, such as earnings per share, in establishing base
salary.
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 Committee as part of the overall
compensation determines the number of profit sharing units granted to the CEO
and executive officers 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 of stockholders' equity (or approximately
ten percent 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
return on stockholders' equity. Profit sharing payments are subject to
limitations when individual amounts exceed specified relationships to base
salary.
<PAGE>
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 three 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 1997 is subjective and varies
from year to year and among executive officers. However, the more senior
executive officers generally have 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 provided 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 Committee establishes the number of performance units
allocated to the CEO and executive officers to achieve the appropriate ratio
between long-term, performance-based compensation and other forms of
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 applicable three-year performance period (each year
weighted equally).
In 1997, the stockholders approved amendments to the Performance Unit Plan
to include additional Performance Criteria. The additional Performance Criteria
are economic profit, return on capital employed, sales growth, return on equity,
total shareholder return, reductions in certain asset or cost areas including
reductions in inventories or accounts receivable or laboratory, engineering,
sales or administrative costs, net income or variations of income criteria in
varying time periods, or general comparisons with other peer companies or
industry groups or classifications across a spectrum of these criteria. (More
details about the Company's Performance Unit Plan are provided on page 17 of
this proxy statement.)
The performance criteria have been selected to focus management attention
on two key drivers that create shareholder value: Real Growth and Economic
Profit.
PERFORMANCE CRITERIA:
(1) "Real Growth" is the percentage amount by which the Company's worldwide
unit sales growth as reported in the Company's Annual Report exceeds the
weighted average of the Industrial Production Index (IPI) of the top seven
industrial nations in which the Company does business (the "Big 7 IPI"); and
(2) "Economic Profit" is the Company's net operating income less the cost
of capital utilized (average operating capital x the cost of capital).
PERFORMANCE UNIT PLAN PAYMENTS:
The amount payable with respect to each performance unit granted in 1997 is
linked to the performance criteria of Real Growth and Economic Profit. The
payout can vary from $0 to $200 per unit. The payout can be reached by either
performance criteria alone, or by both in combination. The payout for the 1997
Award is payable on May 1, 2000, in the form (at the discretion of the
Committee) of cash, stock or a combination of cash and stock. The payout may be
deferred by the participant for three additional years and earn interest at a
specified rate. No amount will be payable under the Amended Performance Unit
Plan if the Company's Real Growth is less than the Big 7 IPI and if Economic
Profit is less than 75 percent of the Economic Profit of the previous three
years.
STOCK OPTIONS
The Company's Stock Option plan is also variable compensation. It is 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 100 percent 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
<PAGE>
determining awards. Stock options encourage executives to become owners of the
Company, which further aligns their interests with the stockholders. 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. 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, Sales Growth, Real Growth and Economic Profit, 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. These non-financial measures include
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), management succession planning and the general overall
perception of the Company by financial and business leaders. To keep Mr.
DeSimone's total compensation competitive, the Committee increased his base
salary in 1997, which is reflected in part in the Summary Compensation Table on
page 13 of this proxy statement. Because of increased performance in 1997, Mr.
DeSimone's profit sharing cash and profit sharing stock was greater in 1997 than
in 1996. The Committee awarded Mr. DeSimone 9,000 performance units in 1997
under the Performance Unit Plan (the same number he received in 1996). Mr.
DeSimone deferred a portion of his base salary in 1997 under the Company's
Deferred Compensation Plan.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
It is the Company's policy to take reasonable steps to obtain the corporate
tax deduction for compensation paid to its executive officers by qualifying for
the exemptions from limitation on such deductibility under Section 162(m) of the
Internal Revenue Code of 1986.
CONCLUSION
The Committee is satisfied that the short- and long-term compensation paid
to the executive officers of the Company create alignment with the Company's
strategic objectives and ensure that payouts are driven by Company performance
and employee contribution to the Company.
The Compensation Committee
Edward A. Brennan, Chairman
Allen E. Murray
Rozanne L. Ridgway
Frank Shrontz
<PAGE>
EXECUTIVE COMPENSATION
The following table shows compensation for services rendered in all
capacities to the Company and its subsidiaries during 1997, 1996 and 1995 by the
Chief Executive Officer and the next four highest-paid executive officers.
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION (1)
-----------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- ---------------------------------- -----------
PROFIT SHARING PERFORMANCE
PROFIT SHARING OTHER ANNUAL STOCK(RESTRICTED OPTIONS GRANTED UNIT PLAN ALL OTHER
SALARY CASH (BONUS) COMPENSATION STOCK AWARDS) NUMBER OF (LTIP) COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($)(1) ($)(2) ($)(4) ($)(2)(3) SHARES (5) PAYOUTS ($)(6) ($)(7)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Livio D. DeSimone, 1997 $1,047,600 $551,270 $95,298 $574,799 160,897 $770,000 $162,429
Chairman of the Board and 1996 971,100 502,594 59,224 524,047 131,384 694,540 137,068
Chief Executive Officer 1995 903,600 366,901 61,293 382,561 118,658 678,370 62,838
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald A. Mitsch, 1997 619,200 362,551 59,692 199,283 72,502 370,000 91,189
Vice Chairman of the Board 1996 552,000 330,539 52,671 181,687 60,414 333,740 79,418
and Executive Vice President 1995 474,000 241,298 -- 132,634 41,463 325,970 41,161
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald O. Baukol, 1997 468,900 314,531 50,548 96,040 37,662 95,000 41,718
Executive Vice President 1996 419,400 227,656 -- 77,710 39,377 85,690 41,970
1995 333,800 166,192 -- 39,192 31,570 83,695 33,373
- ------------------------------------------------------------------------------------------------------------------------------------
Giulio Agostini, 1997 398,400 303,126 67,221 148,142 15,000 240,000 54,056
Senior Vice President 1996 396,200 276,361 -- 96,316 21,888 216,480 37,236
1995 369,975 201,748 -- 70,312 15,000 158,580 21,739
- ------------------------------------------------------------------------------------------------------------------------------------
W. George Meredith, 1997 438,600 313,811 -- 72,030 31,829 95,000 36,193
Executive Vice President 1996 403,150 224,373 -- 38,308 30,051 85,690 36,196
1995 289,050 163,795 -- 27,965 27,400 83,695 26,157
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The amounts shown in the Summary Compensation Table do not include amounts
expensed for financial reporting purposes under the Company's pension plan. This
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 earned 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. 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
page 14).
The Company's Profit Sharing Plan provides for quarterly payments based
upon net income after deducting an allowance for a predetermined ten percent
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.
<PAGE>
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 4,000 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 percent of the fair market value of the
Company's common stock 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 three
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. In 1998, the
Company distributed a portion of these shares to Messrs. DeSimone, Mitsch and
Agostini.
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 as of December 31, 1997, in one case
over ten years, the following shares of the Company's common stock under the
Company's Profit Sharing Plan. The Profit Sharing Stock is valued for these
purposes at the fair market value of such stock on December 31, 1997, and also
on the respective dates when the shares were issued into the custody of the
Company:
- --------------------------------------------------------------------------------
VALUE VALUE
NAME SHARES AT 12/31/97 WHEN ISSUED
- ---- ------ ----------- -----------
L.D. DeSimone.... 76,225 $6,255,214 $3,968,545
R.A. Mitsch ..... 11,907 977,118 766,262
R.O. Baukol ..... 2,873 235,766 216,396
G. Agostini ..... 6,991 573,699 461,764
W. G. Meredith... 1,844 151,323 140,356
- --------------------------------------------------------------------------------
(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) paid 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 1995,
1996 and 1997 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. The number and price of all
outstanding options were adjusted at the spin-off of Imation Corp. in order to
preserve the intrinsic value of the options. The number of stock options shown
in this column for 1997 reflects this adjustment.
(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., the payout earned in 1997 covers
<PAGE>
the performance period from 1995-1997). Under the 1997 award, the payout will be
paid to these individuals in 2000, unless the participant elects to defer the
payout for three additional years. The numbers shown represent estimates based
upon information available as of February 27, 1998. More specific information
about the Performance Unit Plan is set forth on pages 11 and 17.
(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); (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; and (c) all
amounts contributed to the account of each named executive under the Company's
401(k) plan. The Senior Executive Split Dollar Plan provides insurance to all of
the Company's executive officers under split dollar life insurance, which is
partly term insurance and partly 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 1997, amounts deemed
compensation under the Plan to the named executive officers in the Summary
Compensation Table were $8,306 for Mr. DeSimone; $13,996 for Dr. Mitsch; $17,415
for Mr. Baukol; $10,412 for Mr. Agostini; and $11,890 for Mr. Meredith. These
amounts were determined by treating the non-term portion of the coverage as an
interest-free loan.
STOCK OPTIONS TABLE
The following table shows specified information with respect to option
grants during 1997 for each person named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------------
% OF TOTAL GRANT DATE
OPTIONS/SARs VALUE
OPTIONS/ GRANTED EXERCISE OR --------------------
SARs TO EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED (#)(1) FISCAL YEAR ($/Sh)(1)(2) DATE PRESENT VALUE ($)(4)
---- -------------- ----------- ------------ ---- --------------------
<S> <C> <C> <C> <C> <C>
L.D. DeSimone 90,000 1.607% $91.70 5-13-2007 $ 1,962,810
8,920 0.159 83.95 5-07-1999 109,814
13,299 0.238 83.95 5-05-2000 163,724
14,199 0.254 83.95 5-11-2001 174,804
32,287 0.577 83.95 5-10-2002 397,485
2,192 0.039 83.95 5-09-2003 26,986
R.A. Mitsch 50,000 0.893 91.70 5-13-2007 1,090,450
3,359 0.060 83.95 5-08-1998 41,353
2,959 0.053 83.95 5-07-1999 36,428
4,719 0.084 83.95 5-05-2000 58,096
11,465 0.205 83.95 5-10-2002 141,146
R.O. Baukol 22,600 0.404 91.70 5-13-2007 492,883
758 0.014 83.95 5-08-1998 9,332
4,090 0.073 83.95 5-07-1999 50,352
6,373 0.114 83.95 5-09-2003 78,458
3,841 0.069 83.95 5-06-2005 47,287
G. Agostini 15,000 0.268 91.70 5-13-2007 327,135
W.G. Meredith 22,600 0.404 91.70 5-13-2007 492,883
1,273 0.023 83.95 5-07-1999 15,672
1,095 0.020 83.95 5-05-2000 13,481
1,047 0.019 83.95 5-10-2002 12,890
5,814 0.104 83.95 5-07-2004 71,576
- ---------------------------------------------------------------------------------------------------------
All Optionees
(10,057 Participants) 5,598,761 100.000% 91.25 5-13-2007(3) $115,647,674
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
(1) The Company has not granted any stock appreciation rights ("SARs"), except
in limited circumstances to employees of certain subsidiaries who are not
subject to the tax laws of the United States where SARs have less onerous tax
consequences than stock options. 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 paid 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 percent 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) of the
Internal Revenue Code. The option period is equal to the remaining period of the
options exercised.
The participant must have owned Company common stock used for payment 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 $91.25
and represents the weighted average exercise price of the options granted in
1997.
(3) The expiration date for the "All Optionees" line is shown as May 13, 2007,
since that is the applicable date for the vast majority of options granted
during 1997.
(4) Pursuant to the rules of the Securities and Exchange Commission, the Company
has elected to provide a grant date present value for these option grants
determined by a modified Black-Scholes pricing model. Among key assumptions
utilized in this pricing model were: (i) that the time of exercise of stock
options would be 67 months (26 months for PSOs) into the term of the option,
which could be for terms as long as ten years, in recognition of the historical
exercise patterns at the Company for these types of options; (ii) expected
volatility of 15 percent (18.29 percent for PSOs); (iii) risk-free rate of
return of 6.60 percent (5.99 percent for PSOs); and (iv) dividend growth rate of
5.83 percent. No adjustments for non-transferability or risk of forfeiture have
been made. The Company voices no opinion that the present value will, in fact,
be realized and expressly disclaims any representation to that effect.
<PAGE>
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table shows specified information with respect to option
exercises during 1997 and the value of unexercised options at the end of 1997
for each person named in the Summary Compensation Table.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION/SAR VALUE
- ---------------------------------------------------------------------------------------------------------------------
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS/SARs
SHARES AT FY-END (#) AT FY-END ($)(1)
ACQUIRED VALUE ----------------------------- -----------------------------
NAME ON EXERCISE (#) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
L.D. DeSimone 109,165 $3,640,754 311,001 90,000 $5,164,340 $0
R.A. Mitsch 37,370 1,299,578 146,919 50,000 2,891,926 0
R.O. Baukol 26,787 970,908 90,140 22,600 1,647,068 0
G. Agostini 2,200 130,464 83,053 15,000 2,212,249 0
W.G. Meredith 19,563 830,934 86,618 22,600 1,857,685 0
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The "Value Realized" or the unrealized "Value of Unexercised In-the-Money
Options at FY-End" represents the aggregate difference between the market value
on the date of exercise or at December 31, 1997, in the case of the unrealized
values, and the applicable exercise prices. These differences accumulate over
what may be, in many cases, several years. These stock options all have option
periods of ten years when first granted, and Progressive Stock Options have
option periods equal to the remaining option period of the initial nonqualified
options resulting in Progressive Stock Options.
LONG-TERM INCENTIVE PLAN AWARDS TABLE
The following table shows specified information with respect to awards
during 1997 under the Company's Performance Unit Plan for each person in the
Summary Compensation Table.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
-------------------------------------------------------------------------------------
NUMBER OF PERFORMANCE OR ESTIMATED FUTURE PAYOUTS
SHARES, UNITS OTHER PERIOD UNDER NON-STOCK PRICE BASED PLANS (3)
OR OTHER UNTIL MATURATION -------------------------------
NAME RIGHTS (#)(1) OR PAYOUT (2) THRESHOLD ($) TARGET ($) MAXIMUM ($)
---- ------------- ------------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
L.D. DeSimone 9,000 3 years $0 $900,000 $1,800,000
R.A. Mitsch 5,500 3 years 0 550,000 1,100,000
R.O. Baukol 3,700 3 years 0 370,000 740,000
G. Agostini 2,400 3 years 0 240,000 480,000
W.G. Meredith 3,700 3 years 0 370,000 740,000
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Company's Performance Unit Plan provides long-term compensation to 94
key management personnel based upon the Company's attainment of long-term
performance and growth criteria.
The Compensation Committee, none of the members of which are current
employees of the Company, administers it. 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.
In 1997, the stockholders approved amendments to the Performance Unit Plan
to include additional Performance Criteria. The additional Performance Criteria
are economic profit, return on capital employed, sales growth, return on equity,
total shareholder return, reductions in certain asset or cost areas including
reductions in inventories or accounts receivable or laboratory, engineering,
sales or administrative costs, net income or variations of income criteria in
varying time periods, or general comparisons with other peer companies or
industry groups or classifications across a spectrum of these criteria.
Awards made in 1997 under the Amended Performance Unit Plan are based on
performance criteria that focus management attention on two key drivers that
create shareholder value: Real Growth
<PAGE>
and Economic Profit. The payout can vary from $0 to $200 per unit. The payout
can be reached by either performance criteria alone, or by both in combination.
The payout may be deferred by the participant for three additional years and
earn interest at a specified rate. No amount will be payable under the Amended
Performance Unit Plan if the Company's Real Growth is less than the Big 7 IPI
and if Economic Profit is less than 75 percent of the Economic Profit of the
previous three years. More detail about current performance goals is available
in the Compensation Committee Report on page 11.
Payment is contingent upon continued employment to the payment date or
earlier retirement under the Company's pension plan. Participants receiving
awards during 1997, 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
been made only in cash.
(2) The value of awards granted for 1997 will be determined by the Company's
attainment of Real Growth and Economic Profit performance criteria during a
three-year performance period of 1997, 1998 and 1999. More detail about current
performance goals is available in the Compensation Committee Report on page 11.
At the beginning of every performance period, participants may elect to defer
the payout for three years (for the 1997 award, the payout will be made the
beginning of 2003). Participants will earn interest during the deferral period.
The deferred amount will be 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 that would
be earned annually during the optional three-year deferral period following the
performance period. Interest during the optional three-year deferral period
would accrue annually at a rate equal to the annualized yield to maturity of a
five-year Treasury note as of the last business day of the preceding year (for
1996, that rate was 6.2 percent) plus an amount based on the Company's Economic
Profit for the preceding year as a percentage of the average operating capital
(for 1996, that rate was 6.6 percent). The interest would be payable, together
with the base award, in 2003.
PENSION PLAN TABLE
The following table shows estimated annual benefits payable to the
Company's executive officers upon retirement in specified remuneration and years
of service classifications.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETIREMENT BENEFITS
ANNUAL EARNINGS WITH YEARS OF SERVICE
DURING THE INDICATED (2)
HIGHEST ----------------------------------------------------
FOUR CONSECUTIVE 30 35 40 45
YEARS OF SERVICE (1) YEARS YEARS YEARS YEARS
- --------------------------------------------------------------------------------
$800,000 $ 356,731 $ 416,186 $ 462,186 $ 508,186
1,200,000 536,731 626,186 695,186 764,186
1,600,000 716,731 836,186 928,186 1,020,186
2,000,000 896,731 1,046,186 1,161,186 1,276,186
2,400,000 1,076,731 1,256,186 1,394,186 1,532,186
- --------------------------------------------------------------------------------
(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 (61 or 62
for employees born after 1942) and if the participant's age and years of service
total at least 90 (91 or 92 for employees born after 1942) he or she would
receive a Social Security bridge to age 62.
<PAGE>
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 ..................... 41
R.A. Mitsch ....................... 38
R.O. Baukol ....................... 31
G. Agostini ....................... 32
W. George Meredith................. 30
- --------------------------------------------------------------------------------
3M STOCK PERFORMANCE GRAPH
The following compares the Company's cumulative and annualized total
shareholder return, overall stock market performance with reinvested dividends*,
during the five fiscal years preceding December 31, 1997, 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.
The annual changes for the five-year period shown in the graph are based on
the assumption that $100 had been invested in the Company's stock and each index
on December 31, 1992 (as required by SEC rules), and that all quarterly
dividends were reinvested at the average of the closing stock prices at the
beginning and end of the quarter. The total cumulative dollar returns shown on
the graph represents the value that such investments would have had on December
31, 1997.
*The Company's interest in Imation Corp. was distributed to stockholders as
a special stock dividend payable in shares of Imation Corp. stock on July 15,
1996. The following graph accounts for this distribution as though it was paid
in cash and reinvested in common shares of the Company.
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE AND ANNUALIZED TOTAL RETURN AMONG
3M, S&P 500 INDEX AND DOW JONES INDUSTRIAL AVERAGE
3M STOCK PERFORMANCE
(WITH DIVIDEND REINVESTMENT)
[GRAPH]
Cumulative Return (per graph)
- -----------------------------
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
3M 100.0 111.5 113.2 145.3 195.4 197.8
DJIA 100.0 116.9 122.8 168.0 216.5 270.4
S&P 500 100.0 110.0 111.5 153.3 188.4 251.1
Annualized Return
- -----------------
3M 9.2% 11.5% 1.5% 28.3% 34.5% 1.2%
DJIA 7.4% 16.9% 5.0% 36.8% 28.9% 24.9%
S&P 500 7.6% 10.0% 1.4% 37.4% 22.9% 33.3%
TRANSACTIONS WITH MANAGEMENT
During 1997, ten executive officers had loans outstanding with the Eastern
Heights Bank, 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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require disclosure of
late Section 16 filings by 3M directors and executive officers. A purchase of
common stock by Mr. McCracken was inadvertently not reported until several days
after the deadline for filing Form 4. Company staff responsible for Section 16
reporting inadvertently failed to file Form 4 for the sale of stock by a family
member of Mr. Nelson of previously gifted stock.
ITEM 2. RATIFICATION OF INDEPENDENT AUDITORS
The Audit Committee recommended and the Board of Directors appointed the
firm of Coopers & Lybrand L.L.P., independent auditors, to audit the
consolidated financial statements of the Company and its subsidiaries for the
year 1998. 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 Board of Directors will
reconsider the selection.
Coopers & Lybrand L.L.P. has audited the Company's consolidated financial
statements 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 1997 included: audit of consolidated financial
<PAGE>
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; 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
1997, all of which were approved or reviewed by the Audit Committee.
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 AUDITORS, TO AUDIT THE
CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR 1998. PROXIES SOLICITED BY
THE BOARD OF DIRECTORS WILL BE VOTED "FOR" RATIFICATION UNLESS A CONTRARY VOTE
IS SPECIFIED.
OTHER MATTERS
The Bylaws of the Company contain requirements relating to the timing and
content of the notice which stockholders must provide to the Secretary of the
Company for any matter (including nominations for director and stockholder
proposals) to be properly presented at a stockholders meeting. A copy of the
Bylaws may be obtained by writing to the Secretary.
The enclosed proxy confers upon the person or persons entitled to vote the
shares represented thereby discretionary authority to vote such shares in
accordance with their best judgment with respect to all matters which may
properly come before the meeting in addition to the scheduled items of business.
It is intended that proxies solicited by the Board of Directors, unless
otherwise specified therein, will be voted in accordance with the
recommendations of the Board of Directors.
The Management knows of no other matters that 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 vote their proxy by telephone as described
in the enclosed telephone voting instructions or 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. Two attendance cards are enclosed.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any proposal submitted for inclusion in the Company's proxy statement and
form of proxy for the 1999 Annual Meeting of Stockholders must be sent CERTIFIED
MAIL -- RETURN RECEIPT REQUESTED and received at the Company's principal
executive offices in St. Paul, Minnesota, on or before November 25, 1998.
Proposals should be addressed to Roger P. Smith, Secretary, Minnesota Mining and
Manufacturing Company, 3M Center, St. Paul, MN 55144.
By Order of the Board of Directors.
/s/ Roger P. Smith
ROGER P. SMITH
SECRETARY
<PAGE>
[LOGO]
Recycled Paper
40% Pre-consumer paper
10% Post-consumer paper
<PAGE>
[LOGO]
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144 PROXY
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR USE AT THE ANNUAL MEETING ON
TUESDAY, MAY 12, 1998.
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.
By signing the proxy, I appoint L. D. DeSimone, A. E. Murray, and E. A. Brennan,
together and separately, as proxies to vote all shares of common stock which I
have power to vote at the Annual Meeting, and at any adjournment thereof, in
accordance with the instructions on the reverse side of this card and with the
same effect as though I were present in person and voting such shares. The
proxies are authorized in their discretion to vote upon such other business as
may properly come before the meeting and they may name others to take their
place.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
<PAGE>
ATTENDANCE CARD
[LOGO]
Annual Meeting
of Stockholders
- ---------------
MAY 12, 1998
RIVERCENTRE
175 WEST KELLOGG BLVD.
ST. PAUL, MINNESOTA
This is your ticket to the 1998 Annual Meeting. Please show it upon arrival and
keep it with you during the day. Annual Meeting activities begin at 8:30 a.m.
with product demonstrations and displays. The meeting starts at 10:00 a.m. After
the meeting, lunch will be served and the 3M store will open.
The meeting will be held in the Roy Wilkins Auditorium. Hosts and hostesses
will show you the way after you enter the RiverCentre.
Since parking space is limited, you are urged to consider carpooling or
public transportation.
- --------------------------------------------------------------------------------
ATTENDANCE CARD
[LOGO]
Annual Meeting
of Stockholders
- ---------------
MAY 12, 1998
RIVERCENTRE
175 WEST KELLOGG BLVD.
ST. PAUL, MINNESOTA
This is your ticket to the 1998 Annual Meeting. Please show it upon arrival and
keep it with you during the day. Annual Meeting activities begin at 8:30 a.m.
with product demonstrations and displays. The meeting starts at 10:00 a.m. After
the meeting, lunch will be served and the 3M store will open.
The meeting will be held in the Roy Wilkins Auditorium. Hosts and hostesses
will show you the way after you enter the RiverCentre.
Since parking space is limited, you are urged to consider carpooling or
public transportation.
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE --------------
CALL TOLL FREE *** ON A TOUCH TONE TELEPHONE COMPANY#
1-800-240-6326 -- ANYTIME CONTROL#
--------------
- --------------------------------------------------------------------------------
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card. The deadline for
telephone voting is noon (ET), one business day prior to the annual meeting
date.
1. Using a touch-tone telephone, dial 1-800-240-6326. You may dial this toll
free number at your convenience 7 days/week, 24 hrs/day.
2. When prompted, enter the 3 digit Company Number located in the box on the
upper right hand corner of the proxy card.
3. When prompted, enter your 7 digit numeric Control Number that follows the
company number.
OPTION #1: TO VOTE AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS: PRESS 1
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 -- THANK YOU FOR
VOTING
OPTION #2: IF YOU CHOOSE TO VOTE ON EACH ITEM SEPARATELY, PRESS 0. YOU WILL HEAR
THESE INSTRUCTIONS:
ITEM 1. Election of Directors: To vote FOR ALL nominees, press 1;
to WITHHOLD AUTHORITY TO VOTE FOR ALL
nominees, press 9;
to WITHHOLD AUTHORITY TO VOTE FOR AN
INDIVIDUAL nominee, press 0 and listen
to the instructions.
ITEM 2. Ratification of Independent Auditors: To vote FOR Item 2,
press 1; to vote AGAINST Item 2,
press 9; to ABSTAIN, press 0.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 -- THANK YOU FOR VOTING
IF YOU VOTE BY TELEPHONE, DO NOT MAIL BACK YOUR PROXY
PLEASE DETACH HERE
- --------------------------------------------------------------------------------
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
ITEM 1. Election of Directors
* Nominees to 2001 Class: (01) Edward A. Brennan (02) Livio D. DeSimone
(03) F. Alan Smith
* Nominee to 1999 Class: (04) Allen E. Murray
[ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
To withhold authority to vote for any nominees, write the ---------------------
number(s) of the nominee(s) in the box to the right. ---------------------
ITEM 2. Ratification of Independent Auditors [ ] For [ ] Against [ ] Abstain
ITEM 3. In their discretion, to vote upon other matters properly coming before
the meeting.
Address Change? Mark Box [ ] Indicate change below:
Date _____________________________________________
--------------------------------------------------
--------------------------------------------------
Signature(s) in Box
Please sign exactly as your name(s) appear hereon.
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.
<PAGE>
[LOGO]
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144 PROXY
- --------------------------------------------------------------------------------
3M SAVINGS PLAN VOTING DIRECTIONS TO TRUSTEE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON TUESDAY, MAY 12, 1998.
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 12, 1998 (or at any adjournment thereof), the shares of 3M common stock
allocated to my account in this Plan as specified by using one of two
alternative methods. I may give voting directions to the Trustee by (i)
telephone as described on the enclosed telephone voting instructions or (ii)
completing and returning this proxy card.
THE DEADLINE FOR PROVIDING VOTING DIRECTIONS TO THE TRUSTEE BY TELEPHONE IS
12:00 P.M. (ET) ONE BUSINESS DAY PRIOR TO THE ANNUAL MEETING DATE. I understand
that if I decide to provide voting directions to the Trustee by using this proxy
card, the card must be completed, signed, dated and returned so that it is
received no later than May 7, 1998, by Norwest Bank Minnesota, N.A., acting as
tabulation agent for the Trustee. If the deadlines for providing voting
directions to the Trustee by either telephone or this proxy card are not met or
if the voting directions are invalid because the proxy card is not properly
signed and dated, or if the telephone voting instructions are not followed (if I
elect to vote using the telephone voting system), 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.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
<PAGE>
ATTENDANCE CARD
[LOGO]
Annual Meeting
of Stockholders
- ---------------
MAY 12, 1998
RIVERCENTRE
175 WEST KELLOGG BLVD.
ST. PAUL, MINNESOTA
This is your ticket to the 1998 Annual Meeting. Please show it upon arrival and
keep it with you during the day. Annual Meeting activities begin at 8:30 a.m.
with product demonstrations and displays. The meeting starts at 10:00 a.m. After
the meeting, lunch will be served and the 3M store will open.
The meeting will be held in the Roy Wilkins Auditorium. Hosts and hostesses
will show you the way after you enter the RiverCentre.
Since parking space is limited, you are urged to consider carpooling or
public transportation.
- --------------------------------------------------------------------------------
ATTENDANCE CARD
[LOGO]
Annual Meeting
of Stockholders
- ---------------
MAY 12, 1998
RIVERCENTRE
175 WEST KELLOGG BLVD.
ST. PAUL, MINNESOTA
This is your ticket to the 1998 Annual Meeting. Please show it upon arrival and
keep it with you during the day. Annual Meeting activities begin at 8:30 a.m.
with product demonstrations and displays. The meeting starts at 10:00 a.m. After
the meeting, lunch will be served and the 3M store will open.
The meeting will be held in the Roy Wilkins Auditorium. Hosts and hostesses
will show you the way after you enter the RiverCentre.
Since parking space is limited, you are urged to consider carpooling or
public transportation.
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE --------------
CALL TOLL FREE *** ON A TOUCH TONE TELEPHONE COMPANY#
1-800-240-6326 -- ANYTIME CONTROL#
--------------
- --------------------------------------------------------------------------------
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card. The deadline for
telephone voting is noon (ET), one business day prior to the annual meeting
date.
1. Using a touch-tone telephone, dial 1-800-240-6326. You may dial this toll
free number at your convenience 7 days/week, 24 hrs/day.
2. When prompted, enter the 3 digit Company Number located in the box on the
upper right hand corner of the proxy card.
3. When prompted, enter your 7 digit numeric Control Number that follows the
company number.
OPTION #1: TO VOTE AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS: PRESS 1
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 -- THANK YOU FOR
VOTING
OPTION #2: IF YOU CHOOSE TO VOTE ON EACH ITEM SEPARATELY, PRESS 0. YOU WILL HEAR
THESE INSTRUCTIONS:
ITEM 1. Election of Directors: To vote FOR ALL nominees, press 1;
to WITHHOLD AUTHORITY TO VOTE FOR ALL
nominees, press 9;
to WITHHOLD AUTHORITY TO VOTE FOR AN
INDIVIDUAL nominee, press 0 and listen
to the instructions.
ITEM 2. Ratification of Independent Auditors: To vote FOR Item 2,
press 1; to vote AGAINST Item 2,
press 9; to ABSTAIN, press 0.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 -- THANK YOU FOR VOTING
IF YOU VOTE BY TELEPHONE, DO NOT MAIL BACK YOUR PROXY
PLEASE DETACH HERE
- --------------------------------------------------------------------------------
SAVINGS PLAN
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
ITEM 1. Election of Directors
* Nominees to 2001 Class: (01) Edward A. Brennan (02) Livio D. DeSimone
(03) F. Alan Smith
* Nominee to 1999 Class: (04) Allen E. Murray
[ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
To withhold authority to vote for any nominees, write the ---------------------
number(s) of the nominee(s) in the box to the right. ---------------------
ITEM 2. Ratification of Independent Auditors [ ] For [ ] Against [ ] Abstain
ITEM 3. In their discretion, to vote upon other matters properly coming before
the meeting.
Address Change? Mark Box [ ] Indicate change below:
Date _____________________________________________
--------------------------------------------------
--------------------------------------------------
Signature(s) in Box
Please sign exactly as your name(s) appear hereon.
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.
<PAGE>
[LOGO
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144 PROXY
- --------------------------------------------------------------------------------
3M VOLUNTARY INVESTMENT PLAN
AND 3M EMPLOYEE STOCK OWNERSHIP PLAN VOTING DIRECTIONS TO TRUSTEE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON TUESDAY, MAY 12, 1998.
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 12, 1998 (or at any adjournment thereof), the shares of 3M common stock
allocated to my respective accounts in these two Plans as specified by using one
of two alternative methods. I may give voting directions to the Trustee by (i)
telephone as described in the enclosed telephone voting instructions or (ii)
completing and returning this proxy card.
THE DEADLINE FOR PROVIDING VOTING DIRECTIONS TO THE TRUSTEE BY TELEPHONE IS
12:00 P.M. (ET) ONE BUSINESS DAY PRIOR TO THE ANNUAL MEETING DATE. I understand
that if I decide to provide voting directions to the Trustee by using this proxy
card, the card must be completed, signed, dated and returned so that it is
received no later than May 7, 1998, by Norwest Bank Minnesota, N.A., acting as
tabulation agent for the Trustee. If the deadlines for providing voting
directions to the Trustee by either telephone or this proxy card are not met or
if the voting directions are invalid because the proxy card is not properly
signed and dated, or if the telephone voting instructions are not followed (if I
elect to vote using the telephone voting system), the shares held in my ESOP
Trust Accounts 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.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
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<PAGE>
ATTENDANCE CARD
[LOGO]
Annual Meeting
of Stockholders
- ---------------
MAY 12, 1998
RIVERCENTRE
175 WEST KELLOGG BLVD.
ST. PAUL, MINNESOTA
This is your ticket to the 1998 Annual Meeting. Please show it upon arrival and
keep it with you during the day. Annual Meeting activities begin at 8:30 a.m.
with product demonstrations and displays. The meeting starts at 10:00 a.m. After
the meeting, lunch will be served and the 3M store will open.
The meeting will be held in the Roy Wilkins Auditorium. Hosts and hostesses
will show you the way after you enter the RiverCentre.
Since parking space is limited, you are urged to consider carpooling or
public transportation.
- --------------------------------------------------------------------------------
ATTENDANCE CARD
[LOGO]
Annual Meeting
of Stockholders
- ---------------
MAY 12, 1998
RIVERCENTRE
175 WEST KELLOGG BLVD.
ST. PAUL, MINNESOTA
This is your ticket to the 1998 Annual Meeting. Please show it upon arrival and
keep it with you during the day. Annual Meeting activities begin at 8:30 a.m.
with product demonstrations and displays. The meeting starts at 10:00 a.m. After
the meeting, lunch will be served and the 3M store will open.
The meeting will be held in the Roy Wilkins Auditorium. Hosts and hostesses
will show you the way after you enter the RiverCentre.
Since parking space is limited, you are urged to consider carpooling or
public transportation.
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE --------------
CALL TOLL FREE *** ON A TOUCH TONE TELEPHONE COMPANY#
1-800-240-6326 -- ANYTIME CONTROL#
--------------
- --------------------------------------------------------------------------------
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card. The deadline for
telephone voting is noon (ET), one business day prior to the annual meeting
date.
1. Using a touch-tone telephone, dial 1-800-240-6326. You may dial this toll
free number at your convenience 7 days/week, 24 hrs/day.
2. When prompted, enter the 3 digit Company Number located in the box on the
upper right hand corner of the proxy card.
3. When prompted, enter your 7 digit numeric Control Number that follows the
company number.
OPTION #1: TO VOTE AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS: PRESS 1
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 -- THANK YOU FOR
VOTING
OPTION #2: IF YOU CHOOSE TO VOTE ON EACH ITEM SEPARATELY, PRESS 0. YOU WILL HEAR
THESE INSTRUCTIONS:
ITEM 1. Election of Directors: To vote FOR ALL nominees, press 1;
to WITHHOLD AUTHORITY TO VOTE FOR ALL
nominees, press 9;
to WITHHOLD AUTHORITY TO VOTE FOR AN
INDIVIDUAL nominee, press 0 and listen
to the instructions.
ITEM 2. Ratification of Independent Auditors: To vote FOR Item 2,
press 1; to vote AGAINST Item 2,
press 9; to ABSTAIN, press 0.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 -- THANK YOU FOR VOTING
IF YOU VOTE BY TELEPHONE, DO NOT MAIL BACK YOUR PROXY
PLEASE DETACH HERE
- --------------------------------------------------------------------------------
VIP ESOP
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
ITEM 1. Election of Directors
* Nominees to 2001 Class: (01) Edward A. Brennan (02) Livio D. DeSimone
(03) F. Alan Smith
* Nominee to 1999 Class: (04) Allen E. Murray
[ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
To withhold authority to vote for any nominees, write the ---------------------
number(s) of the nominee(s) in the box to the right. ---------------------
ITEM 2. Ratification of Independent Auditors [ ] For [ ] Against [ ] Abstain
ITEM 3. In their discretion, to vote upon other matters properly coming before
the meeting.
Address Change? Mark Box [ ] Indicate change below:
Date _____________________________________________
--------------------------------------------------
--------------------------------------------------
Signature(s) in Box
Please sign exactly as your name(s) appear hereon.
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.
<PAGE>
[LOGO]
MINNESOTA MINING AND MANUFACTURING COMPANY
3M CENTER, ST. PAUL, MINNESOTA 55144 PROXY
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR USE AT THE ANNUAL MEETING ON
TUESDAY, MAY 12, 1998.
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.
By signing the proxy, you revoke all prior proxies and appoint L.D. DeSimone,
A.E. Murray and E.A. Brennan, 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)
<PAGE>
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
ITEM 1. Election of directors
- --Nominees to 2001 Class: (01) Edward A. Brennan (02) Livio D. DeSimone
(03) F. Alan Smith
- --Nominee to 1999 Class: (04) Allen E. Murray
[ ] Vote FOR all nominees [ ] Vote FOR ALL EXCEPT
[ ] Vote WITHHELD from all nominees (use number before nominee's name to
indicate exceptions):
ITEM 2. Ratification of Independent Auditors [ ] For [ ] Against [ ] Abstain
- --------------------------------------------------------------------------------
ITEM 3. 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.
<PAGE>
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 direct 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 proxy card.
We enclose (1) a Notice of Annual Meeting of 3M Stockholders to be held on May
12, 1998, and Proxy Statement, (2) instructions for giving voting directions to
the Trustee by telephone or by mail through use of the enclosed proxy card, and
(3) a return envelope. The Trustee will vote, in accordance with your
directions, the shares of 3M common stock allocated to your account if you give
voting directions by (i) telephone as described in the enclosed telephone voting
instructions or (ii) completing the enclosed proxy card and returning it in the
enclosed envelope so that it is received no later than May 7, 1998 by Norwest
Bank Minnesota, N.A., acting as tabulation agent for the Trustee.
The Trustee remains at all times the record owner of the 3M common stock held in
the Savings Plan accounts. The ability to direct the Trustee how to vote confers
no right on participants to vote directly at the Annual Meeting of Stockholders.
Telephone voting instructions must be properly followed or the enclosed proxy
card must be properly completed if voting directions are to be honored. If the
telephone voting instructions are not followed or if the card is not received by
May 7, 1998, or if the voting directions 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 provide voting directions to the Trustee by telephone in accordance with
the enclosed telephone voting instructions, or complete, date, sign, and
promptly return the enclosed proxy card.
<PAGE>
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 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, as Named Fiduciaries, to
direct the respective Trustees how to vote the number of shares of 3M common
stock allocated to the participants' respective accounts. Additionally, as a
Named Fiduciary of the ESOP, you are entitled to direct the Trustee how to vote
a proportionate number of shares which have not been allocated to participants
or for which no voting directions have been received. 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 proxy card.
We enclose (1) a Notice of Annual Meeting of 3M Stockholders to be held on May
12, 1998, and Proxy Statement, (2) instructions for giving voting directions to
the Trustee by telephone or by mail through use of the enclosed proxy card, and
(3) a return envelope. The Trustee will vote, in accordance with your
directions, the shares of 3M common stock allocated to your respective accounts
if you give voting directions by (i) telephone as described in the enclosed
telephone voting instructions or (ii) completing the enclosed proxy card and
returning it in the enclosed return envelope so that it is received no later
than May 7, 1998 by Norwest Bank Minnesota, N.A., acting as tabulation agent for
the Trustee.
The Trustee remains at all times the record owner of the 3M common stock held in
the ESOP and VIP accounts. The ability to direct the Trustee how to vote confers
no right on participants to vote directly at the Annual Meeting of Stockholders.
Telephone voting instructions must be properly followed or the enclosed proxy
card must be properly completed if voting directions are to be honored. If the
telephone voting instructions are not followed or if the card is not received by
May 7, 1998, or if the voting directions are invalid, the shares held in your
ESOP accounts 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 provide voting directions to the Trustee by telephone in accordance with
the enclosed telephone voting instructions, or complete, date, sign, and
promptly return the enclosed proxy card.
