What is the purpose of the new 3M VIP Excess Plan?

The 3M VIP Excess Plan is designed to attract and incentivize eligible highly compensated employees to remain with 3M by offering them the opportunity to earn additional retirement benefits by deferring a portion of their current cash compensation on a tax-favored basis. It replaces the previous VIP Plus plan.

How does the new VIP Excess Plan differ from the old VIP Plus plan?

The VIP Excess Plan is structured as a true 'excess' plan for tax purposes, meaning participants can only begin deferring compensation once their compensation or their contributions to the company's qualified 401(k) plan exceed applicable tax law limits. It also makes company matching contributions available to all participants and increases the amount of these matches compared to the VIP Plus plan, which limited matching to only a portion of participants.

What is the 3M Nonqualified Pension Plan III?

The 3M Nonqualified Pension Plan III is a new plan, effective January 1, 2009, designed to provide supplemental retirement benefits to a select group of employees whose benefits under the company's qualified pension plan are limited by federal tax law. It aims to provide additional retirement income that supplements the qualified plan benefits.

Why were several stock ownership and incentive plans amended?

Most of the amendments to the 1997, 2002, and 2005 Management Stock Ownership Programs, the 2008 Long-Term Incentive Plan, the Performance Unit Plan, and director compensation plans were technical in nature, intended to ensure compliance with Section 409A of the Internal Revenue Code. Amendments to the Management Stock Ownership Programs also introduced a single global definition of 'Retirement'.

Are the benefits from these new and amended plans guaranteed?

No, these plans are unfunded. All amounts payable under the VIP Excess Plan and the Nonqualified Pension Plan III are paid from 3M Company's general assets. The rights of any participant under these plans are no greater than those of a general unsecured creditor of the company.

MMM 8-K: Leadership Changes

Summary

This 8-K filing from 3M Company primarily details changes and new plans related to executive compensation and retirement benefits, effective January 1, 2009. The company is introducing the "3M VIP Excess Plan," replacing the "VIP Plus" plan, to allow highly compensated employees to defer a portion of their compensation on a tax-advantaged basis. This new plan aims to be a true "excess" plan for tax purposes, restricting contributions until certain compensation or 401(k) limits are met, while also expanding company matching contributions to all participants and increasing the match amounts for some. Additionally, 3M is implementing "3M Nonqualified Pension Plan III" to supplement its qualified pension plans for employees whose benefits are capped by federal tax law limits. The filing also outlines various technical amendments made to several existing stock ownership and incentive plans, largely to ensure compliance with Section 409A of the Internal Revenue Code. These changes reflect a strategic effort to enhance executive retention and provide competitive retirement benefits while adhering to evolving tax regulations.

Key Highlights

1Introduction of the 3M VIP Excess Plan, effective January 1, 2009, replacing the VIP Plus plan for deferring executive compensation.
2The new VIP Excess Plan is designed as a true 'excess' plan for tax purposes, with new rules on when participants can contribute.
3Expanded and potentially increased company matching contributions under the new VIP Excess Plan.
4Establishment of the 3M Nonqualified Pension Plan III, also effective January 1, 2009, to supplement qualified pension benefits for certain employees.
5Numerous technical amendments made to various stock ownership programs (1997, 2002, 2005) and incentive plans (2008 Long-Term Incentive Plan, Performance Unit Plan) primarily for Section 409A compliance.
6Amendments to the 3M Deferred Compensation Plan and the 3M Compensation Plan for Nonemployee Directors, also including technical updates for Section 409A and, for directors, a one-time election change opportunity.
7All deferred compensation and supplemental pension benefits are unfunded and are general unsecured obligations of 3M.

3M CO 8-K Report, Executive Changes (Nov 14, 2008)

Summary

Key Highlights

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