Exhibit 10.1

 

3M COMPANY
2016 LONG-TERM INCENTIVE PLAN

 

The Plan’s purpose is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities.  The Plan succeeds the 3M 2008 Long-Term Incentive Plan.

 

ARTICLE I.
DEFINITIONS

 

As used in the Plan, the following words and phrases will have the meanings specified below, unless the context clearly indicates otherwise:

 

1.1                                “ Administrator ” means the Board or a Committee to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee.  With reference to the Board’s or a Committee’s powers or authority under the Plan that have been delegated to one or more officers pursuant to Section 3.2, the term “Administrator” shall refer to such person(s) unless and until such delegation has been revoked.

 

1.2                                “ Applicable Law ” means any applicable law, including without limitation:  (a) provisions of the Code, the Securities Act, the Exchange Act and any rules or regulations thereunder; (b) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether U.S. or non-U.S. federal, state or local; and (c) rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded.

 

1.3                                “ Award ” means an Option, Stock Appreciation Right, Restricted Stock award, Restricted Stock Unit award, Performance Bonus Award, Performance Share award or Other Stock or Cash Based Award granted to a Participant under the Plan.

 

1.4                                “ Award Agreement ” means a written agreement evidencing an Award, which may be electronic, that contains such terms and conditions as the Administrator determines, consistent with and subject to the terms and conditions of the Plan.

 

1.5                                “ Board ” means the Board of Directors of the Company.

 

1.6                                “ Change in Control ” means the occurrence of a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5) or such other regulation or guidance issued under Section 409A.  The Administrator shall have full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.  Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if its sole purpose is to (i) change the jurisdiction of the Company’s incorporation, or (ii) create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

 

 

1.7                                “ Code ” means the U.S. Internal Revenue Code of 1986, as amended, and all regulations, guidance, compliance programs and other interpretative authority issued thereunder.

 

1.8                                “ Committee ” means one or more committees or subcommittees of the Board, which may include one or more Company directors or executive officers, to the extent Applicable Laws permit.  To the extent required to comply with the provisions of Rule 16b-3, it is intended that each member of the Committee will be, at the time the Committee takes any action with respect to an Award that is subject to Rule 16b-3, a “non-employee director” within the meaning of Rule 16b-3; however, a Committee member’s failure to qualify as a “non-employee director” within the meaning of Rule 16b-3 will not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.

 

1.9                                “ Common Stock ” means the common stock of the Company.

 

1.10                         “ Company ” means 3M Company, a Delaware corporation, or any successor.

 

1.11                         “ Designated Beneficiary ” means the beneficiary or beneficiaries the Participant designates, in a manner the Company permits and determines, to receive amounts due or exercise the Participant’s rights if the Participant dies.  Without a Participant’s effective designation, “Designated Beneficiary” will mean the Participant’s estate or legal heirs.

 

1.12                         “ Director ” means a Board member.

 

1.13                         “ Disability ” means a permanent and total disability under Section 22(e)(3) of the Code.

 

1.14                         “ Dividend Equivalents ” means a right granted to a Participant to receive the equivalent value (in cash or Shares) of dividends paid on a specified number of Shares. Such Dividend Equivalents shall be converted to cash or additional Shares, or a combination of cash and Shares, by such formula and at such time and subject to such limitations as may be determined by the Administrator.

 

1.15                         “ Effective Date ” has the meaning set forth in Section 10.3.

 

1.16                         “ Employee ” means any employee of the Company or any of its Subsidiaries.

 

1.17                         “ Equity Restructuring ” means a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split (including a reverse stock split), spin-off or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other Company securities) or the share price of Common Stock (or other Company securities) and causes a change in the per share value of the Common Stock underlying outstanding Awards.

 

1.18                         “ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended, and all regulations, guidance and other interpretative authority issued thereunder.

 

1.19                         “ Fair Market Value ” means, as of any date, the value of a Share determined as follows: (i) if the Common Stock is listed on any established stock exchange, the value of a Share will be the closing sales price for a Share as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which a sale occurred,

 

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as reported in The Wall Street Journal or another source the Company deems reliable; (ii) if the Common Stock is not listed on an established stock exchange but is quoted on a national market or other quotation system, the value of a Share will be the closing sales price for a Share on such date, or if no sales occurred on such date, then on the last date preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; or (iii) if the Common Stock is not listed on any established stock exchange or quoted on a national market or other quotation system, the value of a Share will be established by the Administrator in its sole discretion.

 

1.20                         “ Full Value Award ” shall mean any Award that is settled in Shares other than: (a) an Option, (b) a Stock Appreciation Right or (c) any other Award for which the Participant pays the intrinsic value existing as of the date of grant (whether directly or by forgoing a right to receive a payment from the Company or any Subsidiary).

 

1.21                         “ Greater Than 10% Stockholder ” means an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any parent corporation or subsidiary corporation of the Company, as determined in accordance with in Section 424(e) and (f) of the Code, respectively.

 

1.22                         “ Incentive Stock Option ” means an Option that meets the requirements to qualify as an “incentive stock option” as defined in Section 422 of the Code.

 

1.23                         “ Misconduct ” will have the meaning assigned to such term in the applicable Award Agreement or, if not defined therein, (A) the Participant’s willful failure to substantially perform the Participant’s duties (other than a failure resulting from the Participant’s Disability); (B) the Participant’s willful failure to carry out, or comply with any lawful and reasonable directive of the Board or the Participant’s immediate supervisor; (C) the occurrence of any act or omission by the Participant that could reasonably be expected to result in (or has resulted in) the Participant’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or indictable offense or crime involving moral turpitude; (D) the Participant’s commission of an act of fraud, embezzlement, misappropriation, misconduct, or breach of fiduciary duty against the Company or any of its Subsidiaries or affiliates or any of their officers, directors, employees, customers, suppliers, insurers or agents; (E) the Participant’s material breach of any material provision of any written agreement with the Company or any Subsidiary; or (F) any other intentional misconduct by the Participant significantly affecting the business or affairs of the Company or any Subsidiary in an adverse manner.  The Committee shall have the authority to determine conclusively whether a Participant has committed Misconduct pursuant to the above definition, the date of the occurrence of such Misconduct and any incidental matters relating thereto; provided, however, that the Company’s Chief Executive Officer may establish a committee of two or more officers of the Company (at least one of whom shall be the Company’s Chief Executive Officer or Senior Vice President, Human Resources) to make any and all such determinations with respect to any Participant who is not then, and was not previously, subject to Section 16 of the Exchange Act with respect to the Company. The foregoing definition shall not in any way preclude or restrict the right of the Company or any Subsidiary to discharge or dismiss any Participant or other person in the service of the Company or any Subsidiary for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan, to constitute Misconduct.

 

1.24                         “ Nonqualified Stock Option ” means an Option that is not an Incentive Stock Option.

 

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1.25                         “ Option ” means a right granted under Article V to purchase a specified number of Shares at a specified price per Share during a specified time period.  An Option may be either an Incentive Stock Option or a Nonqualified Stock Option.

 

1.26                         “ Other Stock or Cash Based Awards ” means cash awards, awards of Shares, and other awards valued wholly or partially by referring to, or are otherwise based on, Shares or other property.

 

1.27                         “ Overall Share Limit ” means the sum of (i) 23,965,000 Shares; (ii) the aggregate number of Shares that remain available for future awards under the Prior Plans as of immediately prior to the Effective Date and (iii) the number of Shares that are subject to Prior Plan Awards that become available for issuance under the Plan pursuant to Article IV.

 

1.28                         “ Participant ” means a Service Provider who has been granted an Award.

 

1.29                         “ Performance-Based Award ” means an Award (other than an Option or SAR) granted pursuant to Article VI or VII, but which is subject to the terms and conditions set forth in Section 10.18.  All Performance-Based Awards are intended to qualify as Performance-Based Compensation.

 

1.30                         “ Performance-Based Compensation ” means any compensation that is intended to qualify as “performance-based compensation” as described in Section 162(m)(4)(C) of the Code or any successor provision.

 

1.31                         “ Performance Bonus Award ” has the meaning set forth in Section 7.3.

 

1.32                         “ Performance Criteria ” mean the criteria (and adjustments) that the Administrator, in its sole discretion, may select to establish one or more performance goals for an Award for a specified Performance Period; provided that:

 

(a)                                  The Performance Criteria that will be used to establish performance goals for Performance-Based Awards intended to qualify as Performance-Based Compensation are limited to the following:  (i) net earnings or losses (either before or after one or more of (A) interest, (B) taxes, (C) depreciation, (D) amortization, and (E) non-cash equity-based compensation expense); (ii) gross or net sales or revenue or sales or revenue growth; (iii) gross or net organic sales volume or organic sales volume growth, (iv) net income (either before or after taxes) or adjusted net income; (v) sales from one or more products (or categories of products) as a percentage of total sales or revenue; (vi) profits (including but not limited to gross profits, net profits, profit growth, net operation profit or economic profit), profit return ratios or operating margin; (vii) operating earnings (either before or after taxes or before or after allocation of corporate overhead and bonus); (viii) cash flow (including operating cash flow, free cash flow, free cash flow conversion or cash flow return on capital); (ix) return on assets; (x) return on capital or invested capital; (xi) cost of capital; (xii) return on stockholders’ equity; (xiii) total stockholder return; (xiv) return on sales; (xv) costs, reductions in costs and cost control measures; (xvi) expenses; (xvii) working capital; (xviii) earnings or loss per share (“EPS”) or EPS growth; (xix) adjusted earnings or loss per share; (xx) price per share or dividends per share (or appreciation in or maintenance of such price or dividends); (xxi) regulatory achievements or compliance; (xxii) implementation, completion or attainment of objectives relating to research, development, regulatory, commercial, or strategic milestones or developments; (xxiii) market share; (xxiv) economic value or economic value added models; (xxv) division, group or corporate financial goals; (xxvi) customer satisfaction/growth; (xxvii)

 

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customer service; (xxviii) employee satisfaction; (xxix) recruitment and maintenance of personnel; (xxx) human resources management; (xxxi) supervision of litigation and other legal matters; (xxxii) strategic partnerships and transactions; (xxxiii) financial ratios (including those measuring liquidity, activity, profitability or leverage); (xxxiv) debt levels or reductions; (xxxv) sales-related goals; (xxxvi) financing and other capital raising transactions; (xxxvii) cash on hand; (xxxviii) acquisition activity; (xxxix) investment sourcing activity; and (xl) marketing initiatives, any of which may be measured in absolute terms or as compared to any incremental increase or decrease. Such performance goals also may be expressed in terms of the Company’s performance or the performance of a Subsidiary, division, business segment or business unit of the Company or a Subsidiary, or may be expressed in terms of performance relative to performance of one or more other companies or by comparisons of any of the indicators of performance relative to performance of other companies.  Any performance goals that are financial metrics may be determined in accordance with U.S. Generally Accepted Accounting Principles (“ GAAP ”), in accordance with accounting principles established by the International Accounting Standards Board (“ IASB Principles ”), or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP or under IASB Principles.

 

(b)                                  The Committee, in its sole discretion, may provide for exclusion of the impact of an event or occurrence which the Committee determines should appropriately be excluded, including (i) restructurings, discontinued operations, special items, and other unusual, infrequently occurring or non-recurring charges, events or items; (ii) asset sales or write-downs; (iii) litigation or claim judgments or settlements; (iv) acquisitions or divestitures; (v) reorganization or change in the corporate structure or capital structure of the Company; (vi) an event either not directly related to the operations of the Company, Subsidiary, division, business segment or business unit or not within the reasonable control of management; (vii) foreign exchange gains and losses; (viii) a change in the fiscal year of the Company; (ix) the refinancing or repurchase of bank loans or debt securities; (x) unbudgeted capital expenditures; (xi) the issuance or repurchase of equity securities and other changes in the number of outstanding shares; (xii) conversion of some or all of convertible securities to Common Stock; (xiii) any business interruption event; (xiv) changes in pricing; (xv) changes in foreign currency exchange rates; (xvi) the cumulative effects of tax or accounting changes in accordance with U.S. generally accepted accounting principles; (xvii) unusual tax transactions; or (xviii) the effect of changes in other laws or regulatory rules affecting reported results.

 

1.33                         “ Performance Period ” means one or more periods of time, which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more performance goals will be measured for the purpose of determining a Participant’s right to, and the payment of, a Performance-Based Award.

 

1.34                         “ Performance Share ” means a right granted to a Participant pursuant to Section 7.1 and subject to Section 7.2, to receive Shares, the payment of which is contingent upon achieving certain performance goals or other performance-based targets established by the Administrator.

 

1.35                         “ Plan ” means this 3M Company 2016 Long-Term Incentive Plan.

 

1.36                         “ Prior Plans ” means, collectively, the 3M 2005 Management Stock Ownership Program, the 3M 2008 Long-Term Incentive Plan and any prior equity incentive plans of the Company or its predecessor.

 

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1.37                         “ Prior Plan Award ” means an award outstanding under the Prior Plans as of the Effective Date.

 

1.38                         “ Restricted Stock ” means Shares awarded to a Participant under Article VI, subject to certain vesting conditions and other restrictions.

 

1.39                         “ Restricted Stock Unit ” means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator to be of equal value as of such settlement date, subject to certain vesting conditions and other restrictions.

 

1.40                         “ Retires ” or Retirement ” will have the meaning assigned to such term in the applicable Award Agreement or, if not defined therein, a Participant’s Termination of Service after attaining age 55 with at least 10 years of employment service.

 

1.41                         “ Rule 16b-3 ” means Rule 16b-3 promulgated under the Exchange Act.

 

1.42                         “ Section 409A ” means Section 409A of the Code.

 

1.43                         “ Securities Act ” means the U.S. Securities Act of 1933, as amended, and all regulations, guidance and other interpretative authority issued thereunder.

 

1.44                         “ Service Provider ” means an Employee or Director.

 

1.45                         “ Shares ” means shares of Common Stock.

 

1.46                         “ Stock Appreciation Right ” or “ SAR ” means a right granted under Article V to receive a payment equal to the excess of the Fair Market Value of a specified number of Shares on the date the right is exercised over the exercise price set forth in the applicable Award Agreement.

 

1.47                         “ Subsidiary ” means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting power of all classes of securities or interests in one of the other entities in such chain or any other entity in which the Company has a significant equity interest, as determined by the Administrator.

 

1.48                         “ Substitute Awards ” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company or other entity acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

 

1.49                         “ Termination of Service ” means:

 

(a)                                  As to an Employee, the time when the employee-employer relationship between a Participant and the Company or any Subsidiary is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Participant simultaneously commences or remains in employment with the Company or any Subsidiary.

 

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(b)                                  As to a non-employee Director, the time when a Participant who is a non-employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding terminations where the Participant simultaneously commences employment with the Company or any Subsidiary.

 

The Company, in its sole discretion, shall determine the effect of all matters and questions relating to any Termination of Service, including, without limitation, whether a Termination of Service has occurred, whether a Termination of Service resulted from a discharge for Misconduct and all questions of whether particular leaves of absence constitute a Termination of Service.  For purposes of the Plan, a Participant’s employee-employer relationship shall be deemed to be terminated in the event that the Subsidiary employing or contracting with such Participant ceases to remain a Subsidiary following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off), even though the Participant may subsequently continue to perform services for that entity.

 

ARTICLE II.
ELIGIBILITY

 

Service Providers are eligible to be granted Awards under the Plan, subject to the limitations described herein.  No Service Provider shall have any right to be granted an Award pursuant to the Plan.

 

ARTICLE III.
ADMINISTRATION AND DELEGATION

 

3.1                                Administration .  The Plan is administered by the Administrator.  The Administrator has authority to determine which Service Providers receive Awards, grant Awards and set Award terms and conditions, subject to the conditions and limitations in the Plan.  The Administrator also has the authority to take all actions and make all determinations under the Plan, to interpret the Plan and Award Agreements and to adopt, amend and repeal Plan administrative rules, guidelines and practices as it deems advisable.  The Administrator may correct defects and ambiguities, supply omissions, reconcile inconsistencies in the Plan or any Award and make all other determinations that it deems necessary or appropriate to administer the Plan and any Awards.  The Administrator’s determinations under the Plan are in its sole discretion and will be final and binding on all persons having or claiming any interest in the Plan or any Award.

 

3.2                                Appointment of Committees .  To the extent Applicable Laws permit, the Board or any Committee may delegate any or all of its powers under the Plan to one or more Committees or officers of the Company or any of its Subsidiaries.  Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation or that are otherwise included in the applicable organizational documents of the Company, and the Board or Committee, as applicable, may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 3.2 shall serve in such capacity at the pleasure of the Board or the Committee, as applicable, and the Board or the Committee may abolish any Committee to which authority has been delegated at any time and re-vest in itself any previously delegated authority.

 

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ARTICLE IV.
STOCK AVAILABLE FOR AWARDS

 

4.1                                Number of Shares .  Subject to adjustment under Article VIII and the terms of this Article IV, Awards may be made under the Plan covering up to the Overall Share Limit.  As of the Effective Date, the Company will cease granting awards under the Prior Plans; however, Prior Plan Awards will remain subject to the terms of the applicable Prior Plan. Shares issued or delivered under the Plan may consist of authorized but unissued Shares, Shares purchased on the open market or treasury Shares. Notwithstanding the foregoing, the aggregate number of Shares available for issuance under the Plan shall be reduced by 2.5 Shares for each Share delivered in settlement of any Full Value Award, and by one share for every one share granted that is subject to Options or Stock Appreciation Rights.

 

4.2                                Share Recycling .  If all or any part of an Award or Prior Plan Award expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised or forfeited, in any case, in a manner that results in the Company acquiring Shares covered by the Award or Prior Plan Award at a price not greater than the price (as adjusted to reflect any Equity Restructuring) paid by the Participant for such Shares or not issuing any Shares covered by the Award or Prior Plan Award, the unused Shares covered by the Award or Prior Plan Award will, as applicable, become or again be available for Awards under the Plan.  Further, Shares delivered (either by actual delivery or attestation) to the Company by a Participant to satisfy the applicable exercise or purchase price of an Award or Prior Plan Award and/or to satisfy any applicable tax withholding obligation (including Shares retained by the Company from the Award or Prior Plan Award being exercised or purchased and/or creating the tax obligation) will, as applicable, become or again be available for Award grants under the Plan.  The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards or Prior Plan Awards shall not count against the Overall Share Limit.  Any Shares that again become available for Awards under the Plan pursuant to this Section shall be added as (i) one Share for every one Share subject to Options or Stock Appreciation Rights granted under the Plan or options or stock appreciation rights granted under any Prior Plan, and (ii) as 2.5 Shares for every one Share subject to Full Value Awards granted under the Plan or awards other than options or stock appreciation rights granted under any Prior Plan.

 

4.3                                Incentive Stock Option Limitations .  Notwithstanding anything to the contrary herein, no more than 34,000,000 Shares (as adjusted to reflect any Equity Restructuring) may be issued pursuant to the exercise of Incentive Stock Options.

 

4.4                                Substitute Awards .  In connection with an entity’s merger or consolidation with the Company or any Subsidiary or the Company’s or any Subsidiary’s acquisition of an entity’s property or stock, the Administrator may grant Awards in substitution for any options or other stock or stock-based awards granted before such merger or consolidation by such entity or its affiliate.  Substitute Awards may be granted on such terms and conditions as the Administrator deems appropriate, notwithstanding limitations on Awards in the Plan.  Substitute Awards will not count against the Overall Share Limit (nor shall Shares subject to a Substitute Award be added to the Shares available for Awards under the Plan as provided above), except that Shares acquired by exercise of substitute Incentive Stock Options will count against the maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options under the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-

 

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existing plan (as appropriately adjusted to reflect the transaction) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan (and Shares subject to such Awards (which, for the avoidance of doubt excludes Substitute Awards) may again become available for Awards under the Plan as provided under Section 4.2 above); provided that Awards using such available shares (or any Shares that again become available for issuance under the Plan under Section 4.2 above) shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or any of its Subsidiaries prior to such acquisition or combination.

 

4.5                                Non-Employee Director Compensation .  Notwithstanding any provision to the contrary in the Plan or in any policy of the Company regarding non-employee Director compensation, the Administrator may establish compensation for non-employee Directors from time to time, subject to the limitations in the Plan.  The Administrator will from time to time determine the terms, conditions and amounts of all such non-employee Director compensation in its sole discretion and pursuant to the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time, provided that the sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of Awards granted to a non-employee Director as compensation for services as a non-employee Director during any calendar year may not exceed $600,000.

 

ARTICLE V.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

 

5.1                                General .  The Administrator may grant Options or Stock Appreciation Rights to one or more Service Providers, subject to such terms and conditions not inconsistent with the Plan as the Administrator shall determine.  The Administrator will determine the number of Shares covered by each Option and Stock Appreciation Right, the exercise price of each Option and Stock Appreciation Right and the conditions and limitations applicable to the exercise of each Option and Stock Appreciation Right.  A Stock Appreciation Right will entitle the Participant (or other person entitled to exercise the Stock Appreciation Right) to receive from the Company upon exercise of the exercisable portion of the Stock Appreciation Right an amount determined by multiplying the excess, if any, of the Fair Market Value of one Share on the date of exercise over the exercise price per Share of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right is exercised, subject to any limitations of the Plan or that the Administrator may impose and payable in cash, Shares valued at Fair Market Value on the date of exercise or a combination of the two as the Administrator may determine or provide in the Award Agreement.

 

5.2                                Exercise Price .  The Administrator will establish each Option’s and Stock Appreciation Right’s exercise price and specify the exercise price in the Award Agreement.  The exercise price will not be less than 100% of the Fair Market Value on the grant date of the Option or Stock Appreciation Right.

 

5.3                                Duration of Options .  Each Option or Stock Appreciation Right will be exercisable at such times and as specified in the Award Agreement, provided that the term of an Option or Stock Appreciation Right will not exceed ten years.

 

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5.4                                Exercise .

 

(a)                                  Exercise Procedure .  Options and Stock Appreciation Rights may be exercised by delivering to the Company a notice of exercise, in a form and manner the Company approves (which may be electronic or telephonic), signed or authenticated by the person authorized to exercise the Option or Stock Appreciation Right, together with, as applicable, payment in full of (i) the exercise price for the number of Shares for which the Option is exercised in a manner specified in Section 5.5 and (ii) all applicable taxes in a manner specified in Section 9.5.

 

(b)                                  Limited Automatic Exercise .  Notwithstanding anything to the contrary in Section 5.4(a), unless otherwise determined in the Award Agreement, the vested and exercisable portion of an Option or Stock Appreciation Right that remains outstanding immediately prior to the expiration of its full term (or, if applicable, the limited post-termination exercise window) shall be deemed to have been exercised by the Participant at such time if (i) the Participant has accepted the Option or Stock Appreciation Right, (ii) the Fair Market Value of one Share exceeds the applicable exercise price per Share, and (iii) either (A) such Option or Stock Appreciation Right remains outstanding on the last day of its full term or (B) the Participant’s Option or Stock Appreciation Right otherwise would terminate prior to the last day of its full term as a result of the Participant’s death.  For the avoidance of doubt, an Option or Stock Appreciation Right that terminates upon the expiration of its limited post-termination exercise window shall not be deemed to have remained outstanding on the last day of its full term for purposes of clause (iii) in the preceding sentence.  In the event an Option or Stock Appreciation Right is exercised pursuant to this Section 5.4(b), the Company shall deliver to the Participant the number of Shares for which the Option or Stock Appreciation Right was deemed exercised, less the number of Shares required to be withheld for the payment of the total purchase price and required withholding taxes.  Unless the Company otherwise determines, an Option or Stock Appreciation Right may not be exercised for a fraction of a Share.

 

5.5                                Payment Upon Exercise .  The Administrator shall determine the methods (or combination of methods) by which payment of the exercise price of an Option shall be made, including, without limitation:

 

(a)                                  cash, check or wire transfer of immediately available funds; provided that the Company may limit the use of one of the foregoing methods if one or more of the methods below is permitted;

 

(b)                                  if there is a public market for Shares at the time of exercise, unless the Company otherwise determines, (A) delivery (including telephonically to the extent permitted by the Company) of a notice that the Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise of the Option and that the broker has been directed to deliver promptly to the Company funds sufficient to pay the exercise price, or (B) the Participant’s delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company an amount sufficient to pay the exercise price by cash, check or wire transfer of immediately available funds; provided that such amount is paid to the Company at such time as may be required by the Company;

 

(c)                                   to the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by the Participant valued at their Fair Market Value on the date of delivery (or such other date determined by the Administrator);

 

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(d)                                  to the extent permitted by the Administrator, surrendering Shares then issuable upon the Option’s exercise valued at their Fair Market Value on the exercise date; or

 

(e)                                   to the extent permitted by the Administrator, delivery of a promissory note or any other lawful consideration.

 

5.6                                Additional Terms of Incentive Stock Options .  The Administrator may grant Incentive Stock Options only to employees of the Company, any of its present or future parent or subsidiary corporations, as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code.  If an Incentive Stock Option is granted to a Greater Than 10% Stockholder, the exercise price will not be less than 110% of the Fair Market Value on the Option’s grant date, and the term of the Option will not exceed five years.  All Incentive Stock Options will be subject to and construed consistently with Section 422 of the Code.  By accepting an Incentive Stock Option, the Participant agrees to give prompt notice to the Company of dispositions or other transfers (other than in connection with a Change in Control) of Shares acquired under the Option made within (i) two years from the grant date of the Option or (ii) one year after the transfer of such Shares to the Participant, specifying the date of the disposition or other transfer and the amount the Participant realized, in cash, other property, assumption of indebtedness or other consideration, in such disposition or other transfer.  Neither the Company nor the Administrator will be liable to a Participant, or any other party, if an Incentive Stock Option fails or ceases to qualify as an “incentive stock option” under Section 422 of the Code.  Any Incentive Stock Option or portion thereof that fails to qualify as an “incentive stock option” under Section 422 of the Code for any reason, including becoming exercisable with respect to Shares having a fair market value exceeding the $100,000 limitation under Treasury Regulation Section 1.422-4, will be a Nonqualified Stock Option.

 

ARTICLE VI.
RESTRICTED STOCK; RESTRICTED STOCK UNITS

 

6.1                                General .  The Administrator may grant Restricted Stock, or the right to purchase Restricted Stock, to any Service Provider, subject to forfeiture or the Company’s right to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant if conditions the Administrator specifies in the Award Agreement are not satisfied before the end of the applicable restriction period or periods that the Administrator establishes for such Award.  In addition, the Administrator may grant to Service Providers Restricted Stock Units, which may be subject to vesting and forfeiture conditions during the applicable restriction period or periods, as set forth in an Award Agreement.  The Award Agreement for each Restricted Stock and Restricted Stock Unit Award shall set forth the terms and conditions not inconsistent with the Plan as the Administrator shall determine.

 

6.2                                Restricted Stock .

 

(a)                                  Dividends .  Subject to any limitations approved by the Administrator and set forth in the Award Agreement, Participants holding shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such Shares.  In addition, unless the Administrator provides otherwise and subject to the provisions of this Section 6.2(a) below, if any dividends or distributions are paid in Shares, or consist of a dividend or distribution to holders of Common Stock of cash or property other than an ordinary cash dividend, the Shares or other cash or property will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid.

 

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Notwithstanding anything to the contrary herein, dividends with respect to an Award of Restricted Stock with performance-based vesting shall be accumulated and subject to vesting to the same extent as the related shares of Restricted Stock. All such dividends shall be paid as soon as administratively practicable following the time the applicable Restricted Stock vests and becomes non-forfeitable or such later time as may be set forth in the Award Agreement.

 

(b)                                  Stock Certificates .  The Company may require that the Participant deposit in escrow with the Company (or its designee) any stock certificates issued in respect of shares of Restricted Stock, together with a stock power endorsed in blank.

 

6.3                                Restricted Stock Units .  The Administrator may provide that settlement of Restricted Stock Units will occur upon or as soon as reasonably practicable after the Restricted Stock Units vest or will instead be deferred, on a mandatory basis or at the Participant’s election.

 

ARTICLE VII.
OTHER TYPES OF AWARDS

 

7.1                                General .  The Administrator may grant Performance Share awards, Performance Bonus Awards, Dividend Equivalents or Other Stock or Cash Based Awards, to one or more Service Providers, in such amounts and subject to such terms and conditions not inconsistent with the Plan as the Administrator shall determine.

 

7.2                                Performance Share Awards .  Each Performance Share award shall be denominated in a number of Shares or in unit equivalents of Shares and/or units of value (including a dollar value of Shares) and may be linked to any one or more of the Performance Criteria or other specific criteria, including service to the Company or Subsidiaries, determined to be appropriate by the Administrator, in each case on a specified date or dates or over any Performance Period.  In making such determinations, the Administrator may consider (among such other factors as it deems relevant in light of the specific type of Award) the contributions, responsibilities and other compensation of the particular Participant.

 

7.3                                Performance Bonus Awards .  Each right to receive a bonus granted under this Section 7.3 shall be denominated in the form of cash and shall be initially payable in cash (but may, in the discretion of the Administrator, be payable in Shares or a combination of cash and Shares) (a “ Performance Bonus Award ”) and shall be payable upon the attainment of performance goals that are established by the Administrator and relate to one or more of the Performance Criteria or other specific criteria, including service to the Company or Subsidiaries, in each case on a specified date or dates or over any Performance Period.

 

7.4                                Dividend Equivalents .  If the Administrator provides, an Award (other than an Option or Stock Appreciation Right) may provide a Participant with the right to receive Dividend Equivalents.  Dividend Equivalents may be paid currently or credited to an account for the Participant, settled in cash or Shares and subject to the same restrictions on transferability and forfeitability as the Award with respect to which the Dividend Equivalents are granted and subject to other terms and conditions as set forth in the Award Agreement.  Notwithstanding anything to the contrary herein, Dividend Equivalents with respect to an Award with performance-based vesting shall either (i) to the extent permitted by Applicable Law, not be paid or credited or (ii) be accumulated and subject to vesting to the same extent as the related Award.  All such Dividend Equivalents shall be paid at such time as the Administrator shall specify in the applicable Award Agreement.

 

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7.5                                Other Stock or Cash Based Awards .  Other Stock or Cash Based Awards may be granted to Participants, including Awards entitling Participants to receive Shares to be delivered in the future and including annual or other periodic or long-term cash bonus awards (whether based on specified Performance Criteria or otherwise), in each case subject to any conditions and limitations in the Plan. Such Other Stock or Cash Based Awards will also be available as a payment form in the settlement of other Awards, as standalone payments and as payment in lieu of compensation to which a Participant is otherwise entitled.  Other Stock or Cash Based Awards may be paid in Shares, cash or other property, as the Administrator determines.  Subject to the provisions of the Plan, the Administrator will determine the terms and conditions of each Other Stock or Cash Based Award, including any purchase price, performance goal (which may be based on the Performance Criteria), transfer restrictions, and vesting conditions, which will be set forth in the applicable Award Agreement.

 

ARTICLE VIII.
ADJUSTMENTS FOR CHANGES IN COMMON STOCK
AND CERTAIN OTHER EVENTS

 

8.1                                Equity Restructuring .  In connection with any Equity Restructuring, notwithstanding anything to the contrary in this Article VIII the Administrator will equitably adjust the terms of the Plan and each outstanding Award as it deems appropriate to reflect the Equity Restructuring, which may include (i) adjusting the number and type of securities subject to each outstanding Award and/or with respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Article IV hereof on the maximum number and kind of shares that may be issued); (ii) adjusting the terms and conditions of (including the grant or exercise price), and the performance goals or other criteria included in, outstanding Awards; and (iii) granting new Awards or making cash payments to Participants.  The adjustments provided under this Section 8.1 will be nondiscretionary and final and binding on all interested parties, including the affected Participant and the Company; provided that the Administrator will determine whether an adjustment is equitable.

 

8.2                                Corporate Transactions .  In the event of any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), reorganization, merger, consolidation, split-up, spin off, combination, amalgamation, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, Change in Control, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, other similar corporate transaction or event, other unusual or nonrecurring transaction or event affecting the Company or its financial statements or any change in any Applicable Laws or accounting principles, the Administrator, on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event (except that action to give effect to a change in Applicable Law or accounting principles may be made within a reasonable period of time after such change) and either automatically or upon the Participant’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to (x) prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award granted or issued under the Plan, (y) to facilitate such transaction or event or (z) give effect to such changes in Applicable Laws or accounting principles:

 

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(a)                                  To provide for the cancellation of any such Award in exchange for either an amount of cash or other property with a value equal to the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights under the vested portion of such Award, as applicable; provided that, if the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights, in any case, is equal to or less than zero, then the Award may be terminated without payment;

 

(b)                                  To provide that such Award shall vest and, to the extent applicable, be exercisable as to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Award;

 

(c)                                   To provide that such Award be assumed by the successor or survivor corporation or entity, or a parent or subsidiary thereof, or shall be substituted for by awards covering the stock of the successor or survivor corporation or entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and/or applicable exercise or purchase price, in all cases, as determined by the Administrator;

 

(d)                                  To make adjustments in the number and type of shares of Common Stock (or other securities or property) subject to outstanding Awards and/or with respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Article IV hereof on the maximum number and kind of shares which may be issued) and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards;

 

(e)                                   To replace such Award with other rights or property selected by the Administrator; and/or

 

(f)                                    To provide that the Award will terminate and cannot vest, be exercised or become payable after the applicable event.

 

8.3                                Administrative Stand Still .  In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other extraordinary transaction or change affecting the Shares or the share price of Common Stock (including any Equity Restructuring or any securities offering or other similar transaction) or for reasons of administrative convenience or to facilitate compliance with any Applicable Laws, the Company may refuse to permit the exercise or settlement of one or more Awards for such period of time as the Company may determine to be reasonably appropriate under the circumstances.

 

8.4                                General .  Except as expressly provided in the Plan or the Administrator’s action under the Plan, no Participant will have any rights due to any subdivision or consolidation of Shares of any class, dividend payment, increase or decrease in the number of Shares of any class or dissolution, liquidation, merger, or consolidation of the Company or other corporation.  Except as expressly provided with respect to an Equity Restructuring under Section 8.1 above or the Administrator’s action under the Plan, no issuance by the Company of Shares of any class, or securities convertible into Shares of any class, will affect, and no adjustment will be made regarding, the number of Shares subject to an Award or the Award’s grant or exercise price.  The existence of the Plan, any Award Agreements and the Awards granted hereunder will not affect or restrict in any way the Company’s right or power to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure

 

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or its business, (ii) any merger, consolidation, spinoff, dissolution or liquidation of the Company or sale of Company assets or (iii) any sale or issuance of securities, including securities with rights superior to those of the Shares or securities convertible into or exchangeable for Shares. The Administrator may treat Participants and Awards (or portions thereof) differently under this Article VIII.

 

ARTICLE IX.
PROVISIONS APPLICABLE TO AWARDS

 

9.1                                Transferability .  Except as the Administrator may determine or provide in an Award Agreement or otherwise for Awards other than Incentive Stock Options, Awards may not be sold, assigned, transferred, pledged or otherwise encumbered, either voluntarily or by operation of law, except by will or the laws of descent and distribution, or, subject to the Administrator’s consent, pursuant to a domestic relations order, and, during the life of the Participant, will be exercisable only by the Participant.  References to a Participant, to the extent relevant in the context, will include references to a transferee approved by the Administrator.

 

9.2                                Documentation .  Each Award will be evidenced in an Award Agreement, which may be written or electronic, as the Administrator determines. Each Award may contain such terms and conditions as are not inconsistent with those set forth in the Plan.

 

9.3                                Discretion .  Except as the Plan otherwise provides, each Award may be made alone or in addition or in relation to any other Award.  The terms of each Award to a Participant need not be identical, and the Administrator need not treat Participants or Awards (or portions thereof) uniformly.

 

9.4                                Changes in Participant’s Status .  The Company will determine how the disability, death, retirement, authorized leave of absence or any other change or purported change in a Participant’s Service Provider status affects an Award and the extent to which, and the period during which, the Participant, the Participant’s legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award, if applicable.  Except to the extent otherwise required by Applicable Law or expressly authorized by the Company or by the Company’s written policy on leaves of absence, no service credit shall be given for vesting purposes for any period the Participant is on a leave of absence.

 

9.5                                Withholding .  Each Participant must pay the Company, or make provision satisfactory to the Administrator for payment of, any taxes required by law to be withheld in connection with such Participant’s Awards by the date of the event creating the tax liability.  The Company may deduct an amount sufficient to satisfy such tax obligations based on the minimum statutory withholding rates (or such other rate as may be determined by the Company after considering any accounting consequences or costs) from any payment of any kind otherwise due to a Participant.  Subject to any Company insider trading policy (including blackout periods) and the terms of the applicable Award Agreement, Participants may satisfy such tax obligations (i) in cash, by wire transfer of immediately available funds, by check made payable to the order of the Company; provided that the Company may limit the use of one of the foregoing methods if one or more of the exercise methods below is permitted, (ii) to the extent permitted by the Administrator, in whole or in part by delivery of Shares, including Shares delivered by attestation and Shares retained from the Award creating the tax obligation, valued at their Fair Market Value on the date of delivery (or such other date determined by the Administrator), (iii) if there is a public market for Shares at the time the tax obligations are satisfied, unless the Company otherwise determines, (A) delivery (including telephonically to the

 

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extent permitted by the Company) of a notice that the Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise of the Award and that the broker has been directed to deliver promptly to the Company funds sufficient to satisfy the tax obligations, or (B) the Participant’s delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company an amount sufficient to satisfy the tax withholding by cash, check or wire transfer of immediately available funds; provided that such amount is paid to the Company at such time as may be required by the Company, (iv) to the extent permitted by the Administrator, delivery of a promissory note or any other lawful consideration or (v) any combination of the foregoing payment forms approved by the Administrator.  If any tax withholding obligation will be satisfied under clause (ii) of the immediately preceding sentence by the Company’s retention of Shares from the Award creating the tax obligation and there is a public market for Shares at the time the tax obligation is satisfied, the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on the applicable Participant’s behalf some or all of the Shares retained and to remit the proceeds of the sale to the Company or its designee, and each Participant’s acceptance of an Award under the Plan will constitute the Participant’s authorization to the Company and instruction and authorization to such brokerage firm to complete the transactions described in this sentence.

 

9.6                                Amendment of Award; Prohibition on Repricing .  The Administrator may amend, modify or terminate any outstanding Award, including by substituting another Award of the same or a different type, changing the exercise or settlement date, converting an Incentive Stock Option to a Nonqualified Stock Option and providing for cash settlement of an outstanding award.  The Participant’s consent to such action will be required unless (i) the action, taking into account any related action, does not materially and adversely affect the economic benefits to be delivered under the Award as of the date of such amendment, modification or termination, or (ii) the change is permitted under Article VIII or pursuant to Sections 10.5 or 10.6.  Other than pursuant to Sections 8.1 and 8.2, the Administrator shall not without the approval of the Company’s stockholders (a) lower the exercise price per Share of an Option or Stock Appreciation Right after it is granted, (b) cancel an Option or Stock Appreciation Right when the exercise price per Share exceeds the Fair Market Value of one Share in exchange for cash or another Award, or (c) take any other action with respect to an Option or Stock Appreciation Right that the Company determines would be treated as a repricing under the rules and regulations of the principal U.S. national securities exchange on which the Shares are listed.

 

9.7                                Conditions on Delivery of Stock .  The Company will not be obligated to deliver any Shares under the Plan or remove restrictions from Shares previously delivered under the Plan until (i) all Award conditions have been met or removed to the Company’s satisfaction, (ii) as determined by the Company, all other legal matters regarding the issuance and delivery of such Shares have been satisfied, including any applicable securities laws and stock exchange or stock market rules and regulations, (iii) any approvals from governmental agencies that the Company determines are necessary or advisable have been obtained, and (iv) the Participant has executed and delivered to the Company such representations or agreements as the Company deems necessary or appropriate to satisfy any Applicable Laws.  The inability or impracticability of the Company to obtain or maintain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained, and shall constitute circumstances in which the Administrator may determine to amend or cancel Awards pertaining to such Shares, with or without consideration to the Participant.

 

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9.8                                Acceleration .  The Administrator may at any time provide that any Award will become immediately vested and fully or partially exercisable, free of some or all restrictions or conditions, or otherwise fully or partially realizable.

 

9.9                                Fractional Shares .  No fractional shares of Stock shall be issued and the Company shall determine, in its sole and absolute discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding down.

 

ARTICLE X.
MISCELLANEOUS

 

10.1                         No Right to Employment or Other Status .  No person will have any claim or right to be granted an Award, and the grant of an Award will not be construed as giving a Participant the right to continue employment or any other relationship with the Company or a Subsidiary.  The Company and its Subsidiaries expressly reserve the right at any time to dismiss or otherwise terminate their relationship with a Participant free from any liability or claim under the Plan or any Award, except as expressly provided in an Award Agreement.

 

10.2                         No Rights as Stockholder; Certificates .  Subject to the Award Agreement, no Participant or Designated Beneficiary will have any rights as a stockholder with respect to any Shares to be distributed under an Award until becoming the record holder of such Shares.  Notwithstanding any other provision of the Plan, unless the Company otherwise determines or Applicable Laws require, the Company will not be required to deliver to any Participant certificates evidencing Shares issued in connection with any Award and instead such Shares may be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).  The Company may place legends on any share certificate or book entry to reference restrictions applicable to the Shares (including, without limitation, restrictions applicable to Restricted Stock).

 

10.3                         Effective Date and Term of Plan .  The Plan will become effective on the date it is approved by the Company’s stockholders (the “ Effective Date ”).  The Plan will expire on, and no Award may be granted pursuant to the Plan after the tenth anniversary of the Effective Date, but Awards previously granted may extend beyond that date and shall remain in force according to the terms of the Plan and the applicable Award Agreement.  If the Plan is not approved by the Company’s stockholders, the Plan will not become effective, no Awards will be granted under the Plan and the Prior Plans will continue in full force and effect in accordance with their terms.

 

10.4                         Amendment of Plan .  The Board or the Compensation Committee of the Board may amend, suspend or terminate the Plan at any time and from time to time; provided that (a) no amendment requiring stockholder approval to comply with Applicable Laws shall be effective unless approved by the Board and the Company’s stockholders, and (b) no amendment, other than an increase to the Overall Share Limit, may materially and adversely affect the economic benefits to be delivered under any outstanding award as of the date of such amendment without the affected Participant’s consent.  No Awards may be granted under the Plan during any suspension period or after Plan termination.  Awards outstanding at the time of any Plan suspension or termination will continue to be governed by the Plan and the Award Agreement, as in effect before such suspension or termination.  The Board will obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.

 

10.5                         Provisions for Foreign Participants .  The Administrator may modify Awards granted to Participants who are foreign nationals employed or residing outside the United States

 

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or establish subplans or procedures under the Plan to address differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.

 

10.6                         Section 409A .

 

(a)                                  General .  The Company intends that all Awards be structured to comply with, or be exempt from, Section 409A, such that no adverse tax consequences, interest, or penalties under Section 409A apply.  Notwithstanding anything in the Plan or any Award Agreement to the contrary, the Administrator may, without a Participant’s consent, amend the Plan or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and retroactive actions) as are necessary or appropriate to preserve the intended tax treatment of Awards, including any such actions intended to (A) exempt the Plan or any Award from Section 409A, or (B) comply with Section 409A, including regulations, guidance, compliance programs and other interpretative authority that may be issued after an Award’s grant date.  The Company makes no representations or warranties as to an Award’s tax treatment under Section 409A or otherwise.  The Company will have no obligation under this Section 10.6 or otherwise to avoid the taxes, penalties or interest under Section 409A with respect to any Award and will have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute noncompliant “nonqualified deferred compensation” subject to taxes, penalties or interest under Section 409A.

 

(b)                                  Separation from Service .  If an Award constitutes “nonqualified deferred compensation” under Section 409A, any payment or settlement of such Award upon a Participant’s Termination of Service will, to the extent necessary to avoid taxes under Section 409A, be made only upon the Participant’s “separation from service” (within the meaning of Section 409A), whether such “separation from service” occurs upon or after the Participant’s Termination of Service.  For purposes of the Plan or any Award Agreement relating to any such payments or benefits, references to a “termination,” “termination of employment” or like terms mean a “separation from service.”

 

(c)                                   Payments to Specified Employees .  Notwithstanding any contrary provision in the Plan or any Award Agreement, any payment(s) of “nonqualified deferred compensation” required to be made under an Award to a “specified employee” (as defined under Section 409A and as the Company determines) due to his or her “separation from service” will, to the extent necessary to avoid taxes under Section 409A(a)(2)(B)(i) of the Code, be delayed for the six-month period immediately following such “separation from service” (or, if earlier, until the specified employee’s death) and will instead be paid (as set forth in the Award Agreement) on the day immediately following such six-month period or as soon as administratively practicable thereafter (without interest).  Any payments of “nonqualified deferred compensation” under such Award payable more than six months following the Participant’s “separation from service” will be paid at the time or times the payments are otherwise scheduled to be made.

 

10.7                         Limitations Applicable to Section 16 Persons .  Notwithstanding any other provision of the Plan, the Plan and any Award granted or awarded to any Participant who is then subject to Section 16 of the Exchange Act shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 under the Exchange Act or any successor rule) that are requirements for the application of such exemptive rule.  To the extent permitted by applicable law, the Plan

 

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and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

 

10.8                         Limitations on Liability .  Notwithstanding any other provisions of the Plan, no individual acting as a director, officer or other employee of the Company or any Subsidiary will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan or any Award, and such individual will not be personally liable with respect to the Plan because of any contract or other instrument executed in his or her capacity as an Administrator, director, officer or other employee of the Company or any Subsidiary.  The Company will indemnify and hold harmless each director, officer or other employee of the Company or any Subsidiary that has been or will be granted or delegated any duty or power relating to the Plan’s administration or interpretation, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Company’s approval) arising from any act or omission concerning the Plan unless arising from such person’s own fraud or bad faith; provided that he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.

 

10.9                         Data Privacy .  As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Section by and among the Company and its Subsidiaries and affiliates exclusively for implementing, administering and managing the Participant’s participation in the Plan.  The Company and its Subsidiaries and affiliates may hold certain personal information about a Participant, including the Participant’s name, address and telephone number; birthdate; social security, insurance number or other identification number; salary; nationality; job title(s); any Shares held in the Company or its Subsidiaries and affiliates; and Award details (the “ Data ”), to implement, manage and administer the Plan and Awards.  The Company and its Subsidiaries and affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Participant’s participation in the Plan, and the Company and its Subsidiaries and affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management.  These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country may have different data privacy laws and protections than the recipients’ country.  By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participant’s participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares.  The Company may cancel Participant’s ability to participate in the Plan and, in the Company’s sole discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents in this Section 10.9.

 

10.10                  Severability .  If any portion of the Plan or any action taken under it is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.

 

10.11                  Governing Documents .  If any contradiction occurs between the Plan and any Award Agreement or other written agreement between a Participant and the Company (or any Subsidiary), the Plan will govern, unless such Award Agreement or other written agreement was approved by the Administrator and expressly provides that a specific provision of the Plan will not apply.

 

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10.12                  Governing Law .  The Plan and all Awards will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding the choice-of-law principles of the State of Delaware and any other state requiring the application of a jurisdiction’s laws other than the State of Delaware.

 

10.13                  Clawback Provisions .  All Awards (including the gross amount of any proceeds, gains or other economic benefit the Participant actually or constructively receives upon receipt or exercise of any Award or the receipt or resale of any Shares underlying the Award) will be subject to recoupment by the Company to the extent required to comply with Applicable Laws or any policy of the Company providing for the reimbursement of incentive compensation.

 

10.14                  Titles and Headings .  The titles and headings in the Plan are for convenience of reference only and, if any conflict, the Plan’s text, rather than such titles or headings, will control.

 

10.15                  Conformity to Applicable Laws .  Participant acknowledges that the Plan is intended to conform to the extent necessary with Applicable Laws.  Notwithstanding anything herein to the contrary, the Plan and all Awards will be administered only in a manner intended to conform with Applicable Laws.  To the extent Applicable Laws permit, the Plan and all Award Agreements will be deemed amended as necessary to conform to Applicable Laws.

 

10.16                  Relationship to Other Benefits .  No payment under the Plan will be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary, except as expressly provided in writing in such other plan or an agreement thereunder.

 

10.17                  Broker-Assisted Sales . In the event of a broker-assisted sale of Shares in connection with the payment of amounts owed by a Participant under or with respect to the Plan or Awards, including amounts to be paid under the final sentence of Section 9.5: (a) any Shares to be sold through the broker-assisted sale will be sold on the day the payment first becomes due, or as soon thereafter as practicable; (b) such Shares may be sold as part of a block trade with other Participants in the Plan in which all participants receive an average price; (c) the applicable Participant will be responsible for all broker’s fees and other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the Company or its designee receives proceeds of such sale that exceed the amount owed, the Company will pay such excess in cash to the applicable Participant as soon as reasonably practicable; (e) the Company and its designees are under no obligation to arrange for such sale at any particular price; and (f) in the event the proceeds of such sale are insufficient to satisfy the Participant’s applicable obligation, the Participant may be required to pay immediately upon demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participant’s obligation.

 

10.18                  Section 162(m) Limitations .

 

(a)                                  Individual Award Limitations .  Notwithstanding any provision in the Plan to the contrary, and subject to adjustment as provided in Article VIII, (i) the maximum aggregate number of Shares with respect to all Options and Stock Appreciation Rights that may be granted to any one person during any calendar year shall be 500,000; (ii) the maximum aggregate number of Shares that may be earned with respect to all Awards of Restricted Stock, Restricted Stock Units, Performance Shares and Other Stock or Cash Based Awards that are intended to

 

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qualify as Performance-Based Compensation and are denominated in Shares that may be granted to any one person during any calendar year shall be 500,000; and (iii) the maximum aggregate amount that may become payable (in cash, Shares or any combination thereof) pursuant to all Performance Bonus Awards that may be granted to any one person during any calendar year shall be U.S. $10,000,000; provided , however, that in no event will more than the Overall Share Limit be granted to any one person during any calendar year of the Company with respect to one or more Award denominated in Shares. To the extent required by Section 162(m) of the Code, Shares subject to Awards that are canceled shall continue to be counted against the award limits above. For purposes of this Section 10.18(a), each Share subject to an Award (including a Full Value Award) shall be counted as one Share against the specified limit.  Each of the limitations in this Section, other than the Overall Share Limit, shall be multiplied by two (2) with respect to Awards granted to a Participant during the calendar year in which the Participant commences employment with the Company and/or its Subsidiaries.

 

(b)                                  Committee Composition .  To the extent an Award is intended to qualify as Performance-Based Compensation, the Administrator with respect to such Awards shall be a Committee comprised solely of two or more Directors, each of whom is intended to be an “outside director” within the meaning of Section 162(m) of the Code; provided that a Committee member’s failure to qualify as an “outside director” within the meaning of Section 162(m) will not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.

 

(c)                                   Performance-Based Compensation. The Administrator, in its sole discretion, may determine at the time an Award is granted or at any time thereafter whether such Award is intended to qualify as Performance-Based Compensation.  For the avoidance of doubt, nothing herein shall require the Administrator to structure any Awards in a manner intended to constitute Performance-Based Compensation and the Administrator shall be free, in its sole discretion, to grant Awards that are not intended to be Performance-Based Compensation. Notwithstanding any other provision of the Plan and except as otherwise determined by the Administrator, any Award that is intended to qualify as Performance-Based Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code that are requirements for qualification as Performance-Based Compensation, and the Plan and the applicable Award Agreement shall be deemed amended to the extent necessary to conform to such requirements.  In addition, Awards of Restricted Stock, Restricted Stock Units, Performance Shares, Performance Bonus Awards and Other Stock or Cash Based Awards that are intended to qualify as Performance-Based Compensation shall be subject to the following provisions, which shall control over any conflicting provision in the Plan or any Award Agreement:

 

(i)                                      To the extent necessary to comply with the requirements of Section 162(m)(4)(C) of the Code, no later than 90 days following the commencement of any performance period or any designated fiscal period or period of service (or such earlier time as may be required under Section 162(m) of the Code), the Administrator shall, in writing, (a) designate the Participant to receive such Award, (b) select the Performance Criteria applicable to the performance period, which Performance Criteria shall be limited to the specific performance goals set forth in the definition of Performance Criteria, (c) establish the performance goals (and any exclusions), and amounts of such Awards, as applicable, which may be earned for such performance period based on the Performance Criteria, and (d) specify the relationship between Performance Criteria and the performance goals and the amounts of such Awards, as applicable, to be earned by each Participant for such performance period.

 

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(ii)                                   Following the completion of each performance period, the Administrator shall certify in writing whether and the extent to which the applicable performance goals have been achieved for such performance period. In determining the amount earned under such Awards, the Administrator shall have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Administrator may deem relevant, including the assessment of individual or corporate performance for the performance period.

 

(iii)                                Unless otherwise specified by the Administrator at the time of grant, the Performance Criteria with respect to an Award intended to be Performance-Based Compensation payable to a Participant shall be determined on the basis of Applicable Accounting Standards.  For this purpose, “ Applicable Accounting Standards ” means the U.S. Generally Accepted Accounting Principles, International Financial Reporting Standards or other accounting principles or standards applicable to the Company’s financial statements under U.S. federal securities laws.

 

(iv)                               No adjustment or action described in Article VIII or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause such Award to fail to so qualify as Performance-Based Compensation, unless the Administrator determines that the Award should not so qualify.

 

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Exhibit 10.2

 

3M COMPANY
2016 LONG-TERM INCENTIVE PLAN

 

STOCK OPTION AWARD AGREEMENT

 

Pursuant to the 3M Company 2016 Long-Term Incentive Plan (as amended from time to time, the “ Plan ”), 3M Company (the “ Company ”) granted to the participant listed below (“ Participant ”) the stock option described below (the “ Option ”).  The Option is subject to the terms and conditions set forth in this Stock Option Award Agreement, any special terms and conditions for Participant’s country set forth in Appendix A hereto (the “ Appendix ”) and the Plan.  This Stock Option Award Agreement and the Appendix are referred to, collectively, as this “ Agreement .”  The Plan and the Appendix are incorporated into this Stock Option Award Agreement by reference.

 

Participant:
Grant Date:
Exercise Price per Share:		US$
Shares Subject to the Option:
Final Expiration Date:
Type of Option:		Nonqualified Stock Option
Vesting Schedule:		Subject to the terms and conditions of this Agreement and the Plan , the Option shall vest and become exercisable as follows:
		Vesting Date			Percentage of Shares Subject to the Option Becoming Vested and Exercisable
		[Vesting terms to be determined.]
		Except as provided in Sections 1.2 and 1.5 of this Stock Option Award Agreement, in the Appendix, or as otherwise provided by the Administrator, in no event shall the Option vest and become exercisable for any additional Shares following Participant’s Termination of Service.

 

ELECTRONIC ACCEPTANCE OF AWARD:

 

By clicking on the “ ACCEPT ” box on the “ Grant Terms and Agreement ” page, you agree to be bound by the terms and conditions of this Agreement and the Plan.  You acknowledge that you have reviewed and fully understand all of the provisions of this Agreement and the Plan, and have had the opportunity to obtain advice of counsel prior to accepting the grant of the Option pursuant to this Agreement.  You hereby agree to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or relating to the Option.

 

 

ARTICLE I.
PERIOD OF EXERCISABILITY

 

1.1                                Commencement of Exercisability .  The Option will vest and become exercisable according to the vesting schedule set forth above (the “ Vesting Schedule ”), except that any fraction of a Share as to which the Option would be vested or exercisable will be accumulated and will vest and become exercisable only when a whole Share has accumulated.  Except as otherwise provided by the Administrator (or its delegate) or as otherwise provided for in the Plan or this Agreement with respect to Participant’s Termination of Service by reason of Participant’s Disability[ or Retirement], the Option will immediately expire and be forfeited as to any portion that is not vested and exercisable as of Participant’s Termination of Service.

 

For purposes of this Article I, the term “ Disability ” shall have the meaning given to such term in Treasury Regulation section 1.409A-3(i)(4).

 

1.2                                Special Vesting Provisions .  Notwithstanding anything to the contrary in Section 1.1 or the Vesting Schedule, the Option shall continue to vest and become exercisable, or vest and become exercisable on an accelerated basis, under the following circumstances:

 

(a)                                  If Participant’s Termination of Service occurs by reason of Participant’s Disability[ or Retirement], the Option shall continue to vest and become exercisable pursuant to the Vesting Schedule, as if Participant had not incurred a Termination of Service, subject to accelerated vesting pursuant to clause (b) of this Section 1.2.  [Notwithstanding the preceding sentence, if the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in Participant’s jurisdiction that likely would result in the favorable Retirement treatment that otherwise would apply to the Option pursuant to this Section 1.2(a) being deemed unlawful and/or discriminatory, then the Company will not apply this favorable Retirement treatment at the time of Participant’s Termination of Service and the Option will be treated as it would under the rules that otherwise would have applied if Participant’s Termination of Service did not qualify as a Retirement.]

 

(b)                                  If Participant’s Termination of Service occurs by reason of death or Participant dies following the date of Participant’s Termination of Service by reason of Participant’s Disability[ or Retirement], the Option shall vest and become fully exercisable as of the date of death.

 

1.3                                Duration of Exercisability .  The Vesting Schedule is cumulative.  Any portion of the Option which vests and becomes exercisable will remain vested and exercisable until the termination of the Option.  The Option will be forfeited immediately upon its termination.

 

1.4                                Termination of Option .  The Option may not be exercised to any extent by anyone after, and will terminate and cease to be exercisable on, the first of the following to occur:

 

(a)                                  The Final Expiration Date set forth on the first page of this Agreement;

 

(b)                                  The expiration of ninety (90) days following the date of Participant’s Termination of Service, unless Participant’s Termination of Service is for Misconduct or by reason of Participant’s death, Disability[ or Retirement];

 

(c)                                   The expiration of two (2) years following the date of Participant’s death (whether such death occurs before or after Participant’s Termination of Service); or

 

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(d)                                  The execution of a written determination by the Administrator or an authorized representative of the Company that Participant engaged in an act of Misconduct (whether the execution of such written determination occurs before or after Participant’s Termination of Service).

 

1.5                                Effect of Change in Control .  Notwithstanding anything to the contrary in the Vesting Schedule or Sections 1.1 through 1.4 (except Section 1.4(a), which shall remain applicable), in the event of a Change in Control, the following provisions shall apply:

 

(a)                                  In the event of Participant’s Termination of Service (i) by the Company or any Subsidiary other than as a result of Participant’s Misconduct or (ii) by Participant for Good Reason, in either case, within eighteen (18) months following a Change in Control, the Option shall become fully exercisable as of the date of such Termination of Service and shall expire on the first to occur of (x) the Final Expiration Date and (y) the date that is six (6) months following such Termination of Service.

 

(b)                                  In the event that the Option is not assumed or continued, or an equivalent award substituted for the Option, by the successor corporation or a parent or subsidiary of the successor corporation in a Change in Control, the Option shall become fully vested and exercisable immediately prior to the consummation of such Change in Control and shall remain outstanding until the Change in Control, subject to the Administrator’s discretion to take any action with respect to the Option permitted under the Plan.

 

For purposes of this Section 1.5, “ Good Reason ” means (i) a material diminution in Participant’s position, authority, duties or responsibilities as in effect immediately prior to the Change in Control, (ii) a material diminution in Participant’s base salary or annual planned cash compensation, or (iii) a material change in the geographic location at which Participant is required to perform services for the Company or its Subsidiaries.

 

ARTICLE II.
EXERCISE OF OPTION

 

2.1                                Person Eligible to Exercise .  During the life of Participant, only Participant or a permitted transferee may exercise the Option. References to Participant, to the extent relevant in the context, will include references to any such transferee approved by the Administrator pursuant to the Plan. After Participant’s death, any exercisable portion of the Option may, prior to the time the Option expires, be exercised by Participant’s Designated Beneficiary to the extent permitted by the Company in accordance with the terms of the Plan.

 

2.2                                Exercise .

 

(a)                                  Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised, in whole or in part, according to the procedures in the Plan at any time prior to the time the Option or portion thereof expires, except that the Option may only be exercised for whole Shares.

 

(b)                                  Participant acknowledges that, except as otherwise provided in the Appendix or determined by the Administrator, the Option may be exercised automatically immediately prior to the expiration of its full term under certain circumstances as set forth in Section 5.4(b) of the Plan.

 

2.3                                Payment of Exercise Price . Payment of the exercise price shall be by any of the following, or a combination thereof:

 

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(a)                                  By cash, check or wire transfer of immediately available funds; provided that the Company may limit the use of one of the foregoing methods if one or more of the methods below is permitted;

 

(b)                                  Delivery (including telephonically to the extent permitted by the Company) of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to deliver promptly to the Company funds sufficient to pay the exercise price; provided that such amount is paid to the Company at such time as may be required by the Company;

 

(c)                                   To the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by Participant valued at their Fair Market Value on the date of delivery (or such other date determined by the Administrator) and held by Participant for such period of time (if any) as may be necessary to avoid adverse accounting consequences; or

 

(d)                                  To the extent permitted by the Administrator, surrendering Shares then issuable upon the Option’s exercise valued at their Fair Market Value on the exercise date.

 

2.4                                Responsibility for Taxes .

 

(a)                                  Participant acknowledges that, regardless of any action taken by the Company or, if different, Participant’s employer (the “ Employer ”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items related to Participant’s participation in the Plan and legally applicable to Participant or deemed by the Company or the Employer in its discretion to be an appropriate charge to Participant even if legally applicable to the Company or the Employer (“ Tax-Related Items ”) is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the subsequent sale of Shares acquired upon exercise, and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result.  Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

 

(b)                                  Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to assist the Company and/or the Employer in satisfying any applicable withholding obligations for Tax-Related Items.  In this regard, the Company and/or the Employer, or their respective agents, at their discretion, may satisfy, or allow Participant to satisfy, the withholding obligation with regard to all Tax-Related Items by any of the following, or a combination thereof:

 

(i)                                      By cash, check or wire transfer of immediately available funds; provided that the Company may limit the use of one of the foregoing methods if one or more of the methods below is permitted;

 

(ii)                                   Delivery (including telephonically to the extent permitted by the Company) of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise of the Option, and that the broker has been

 

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directed to deliver promptly to the Company funds sufficient to satisfy the tax obligation; provided that such amount is paid to the Company at such time as may be required by the Company;

 

(iii)                                To the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by Participant valued at their Fair Market Value on the date of delivery (or such other date determined by the Administrator);

 

(iv)                               To the extent permitted by the Administrator, surrendering Shares then issuable upon the Option’s exercise valued at their Fair Market Value on the exercise date; or

 

(v)                                  By the deduction of such amount from other compensation payable to Participant.

 

(c)                                   The Company and/or the Employer has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment of any tax withholding with regard to all Tax-Related Items as Participant’s election to satisfy all or a portion of the tax withholding pursuant to Section 2.4(b) (iv) or (v) above, or a combination of such sections.

 

(d)                                  Depending on the withholding method, the Company and/or the Employer may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates, in which case Participant may receive a refund of any over-withheld amount in cash through the Employer’s normal payroll processes and will have no entitlement to the Common Stock equivalent.  If the obligation for Tax-Related Items is satisfied by surrendering Shares, solely for tax purposes and not intended to modify or restrict in any way Section 4.2 of the Plan, Participant is deemed to have been issued the full number of Shares subject to the exercised Option, notwithstanding that a number of Shares are surrendered for the purpose of paying the Tax-Related Items.

 

(e)                                   Finally, Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to honor the exercise of the Option and/or refuse to issue or deliver the Shares or the proceeds from the sale of the Shares if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.

 

ARTICLE III.
OTHER PROVISIONS

 

3.1                                Nature of Grant .  In accepting the Option, Participant understands, acknowledges, and agrees that:

 

(a)                                  the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time in accordance with its terms;

 

(b)                                  the grant of the Option is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past;

 

(c)                                   all decisions with respect to future options or other grants, if any, will be at the sole discretion of the Administrator;

 

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(d)                                  the Option grant and participation in the Plan shall not create a right to employment or be interpreted as forming or amending an employment or service contract with the Company, the Employer, or any other Subsidiary and shall not interfere with the ability of the Company, the Employer or any other Subsidiary, as applicable, to terminate Participant’s employment or service relationship (if any) at any time with or without cause;

 

(e)                                   Participant is voluntarily participating in the Plan;

 

(f)                                    the Option and any Shares acquired under the Plan, and the income and value of same, are not intended to replace any pension rights or compensation;

 

(g)                                   the Option and any Shares acquired under the Plan, and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits, welfare benefits or other similar payments;

 

(h)                                  the future value of the Shares underlying the Option is unknown, indeterminable and cannot be predicted with certainty;

 

(i)                                      if the underlying Shares do not increase in value, the Option will have no value;

 

(j)                                     if Participant exercises the Option and acquires Shares, the value of such Shares may increase or decrease in value, even below the exercise price;

 

(k)                                  no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from Participant’s Termination of Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any);

 

(l)                                      for purposes of this Option, Termination of Service will be deemed to have occurred as of the date Participant is no longer actively providing services to the Company or any of its Subsidiaries (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by the Administrator, (i) Participant’s right to vest in the Option, if any, will terminate as of such date and will not be extended by any notice period (e.g., Participant’s period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any); and (ii) the period (if any) during which Participant may exercise the Option after such Termination of Service will commence on the date Participant ceases to actively provide services and will not be extended by any notice period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any; the Administrator shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of the Option (including whether Participant may still be considered to be providing services while on a leave of absence);

 

(m)                              unless otherwise agreed with the Company, the Option and the Shares subject to the Option, and the income and value of same, are not granted as consideration for, or in connection with, any services Participant may provide as a director of a Subsidiary;

 

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(n)                                  unless otherwise provided in the Plan or by the Administrator, the Option and the benefits evidenced by this Agreement do not create any entitlement to have the Option or any such benefits transferred to, or assumed by, another company, nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Common Stock;

 

(o)                                  the following provision shall not apply to Employees in the State of California: In consideration of the grant of the Option, and to the extent permitted by Applicable Law, Participant agrees not to institute any claim against the Company, the Employer, or any other Subsidiary, to waive Participant’s ability, if any, to bring such claim, and release the Company, the Employer, and any other Subsidiary from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed (i) not to pursue such claim and (ii) to execute any and all documents necessary to request dismissal or withdrawal of such claim; and

 

(p)                                  the following provisions apply if Participant is providing services outside the United States:

 

(i)                                      the Option and any Shares acquired under the Plan, and the income and value of same, are not part of normal or expected compensation or salary for any purpose; and

 

(ii)                                   neither the Company, the Employer nor any other Subsidiary shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the Option or any amounts due to Participant pursuant to the exercise of the Option or the subsequent sale of any Shares acquired upon such exercise.

 

3.2                                No Advice Regarding Grant .  The Company is not providing any tax, legal or financial advice, nor is the Company making recommendations regarding participation in the Plan, or Participant’s acquisition or sale of the underlying Shares.  Participant understands and agrees that Participant should consult with Participant’s own personal tax, legal and financial advisors regarding participation in the Plan before taking any action related to his or her Award(s).

 

3.3                                Data Privacy .   Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other Option grant materials by and among, as applicable, the Employer, the Company and its Subsidiaries for the purpose of implementing, administering and managing the Plan.

 

Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address, email address and telephone number, date of birth, passport, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all stock options, restricted stock units or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

 

Participant understands that Data will be transferred to Fidelity Investments, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan.  Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country.  Participant understands that if Participant resides outside the United States Participant may request a list with the names and addresses of any potential recipients of the

 

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Data by contacting Participant’s local human resources representative.  Participant authorizes the Company, Fidelity Investments and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purpose of implementing, administering and managing the Plan.  Participant understands that Data will be held only as long as is necessary to implement, administer and manage the Plan.  Participant understands that if Participant resides outside the United States, Participant may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant’s local human resources representative.  Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis.  If Participant does not consent, or if Participant later seeks to revoke Participant’s consent, Participant’s employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company may not be able to grant options or other equity awards to Participant or administer or maintain such awards.  Therefore, Participant understands that refusing or withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan.  For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that Participant may contact Participant’s local human resources representative.

 

3.4                                Transferability .  The Option is not transferable, except by will or the laws of descent and distribution or as permitted by the Administrator in accordance with the terms of the Plan.

 

3.5                                Adjustments .  Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

 

3.6                                Defined Terms; Titles .  Capitalized terms not defined in this Agreement have the meanings given to them in the Plan.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

3.7                                Conformity to Applicable Laws .  Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.

 

3.8                                Successors and Assigns .  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company.  Subject to the transfer provisions set forth in the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

3.9                                Entire Agreement and Imposition of Other Terms . The Plan and this Agreement (including all exhibits and appendices hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.  Nonetheless, the Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Option and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

 

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3.10                         Severability .  In the event that any provision of this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of this Agreement.

 

3.11                         Waiver .  Participant acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Participant or any other person.

 

3.12                         Limitation on Participant’s Rights .  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates a contractual arrangement between the Company and Participant only and shall not be construed as creating a trust for the benefit of Participant.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the Option, as and when exercised pursuant to the terms hereof.

 

3.13                         Electronic Delivery and Acceptance .  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

3.14                         Language . If Participant receives this Agreement or any other document relating to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.

 

3.15                         Foreign Asset/Account and Exchange Control and Tax Reporting . Participant acknowledges that, depending on Participant’s country, Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the acquisition, holding and/or transfer of Shares or cash (including dividends received or the proceeds arising from the sale of Shares) derived from participation in the Plan, in, to and/or from a brokerage/bank account or legal entity located outside Participant’s country.  The Applicable Laws of Participant’s country may require that Participant report such accounts, assets, the balances therein, the value thereof and/or the transactions related thereto to the applicable authorities in such country.  Participant acknowledges that Participant is responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements and should consult Participant’s personal legal advisor on these matters.

 

3.16                         Insider Trading Restrictions/Market Abuse Laws .  Participant acknowledges that, depending on Participant’s country, Participant may be subject to insider trading restrictions and/or market abuse laws, which may affect Participant’s ability to acquire or sell Shares or rights to Shares under the Plan during such times when Participant is considered to have “inside information” regarding the Company (as defined by the laws in Participant’s country).  Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company.  Participant acknowledges that Participant is responsible for ensuring compliance with any applicable restrictions and should consult Participant’s personal legal advisor on these matters.

 

3.17                         Appendix .  Notwithstanding any provisions in this Stock Option Award Agreement, the Option shall be subject to any special terms and conditions set forth in the Appendix.  Specifically, in the event Participant resides or relocates to one of the countries included in the Appendix, the terms and conditions for such country will apply to Participant to the extent the Company determines that the

 

9

 

application of such terms and conditions is necessary or advisable for legal or administrative reasons.  The Appendix constitutes a part of this Stock Option Award Agreement.

 

3.18                         Governing Law and Venue.   This Agreement and the Option will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding the choice-of-law principles of the State of Delaware and any other state requiring the application of a jurisdiction’s laws other than the State of Delaware. For purposes of litigating any dispute concerning the grant of the Option or this Agreement, Participant consents to the jurisdiction of the State of Minnesota and agrees that such litigation shall be conducted in the courts of Ramsey County, Minnesota, or the federal courts for the United States for the District of Minnesota, where this grant is made and/or to be performed.

 

* * * * *

 

10

 

APPENDIX A

TO

STOCK OPTION AWARD AGREEMENT

 

Certain capitalized terms used but not defined in this Appendix A have the meanings set forth in the Stock Option Award Agreement (the “ Award Agreement ”) or, if not defined therein, the Plan.

 

Terms and Conditions

 

This Appendix includes additional terms and conditions that govern the Option granted to Participant under the Plan if Participant resides in one of the countries listed below.   If Participant is a citizen or resident of a country other than the one in which Participant resides, is considered a resident of another country for local law purposes or transfers employment and/or residency between countries after the Grant Date, the Company shall determine, in its sole discretion, to what extent the terms and conditions contained herein shall apply to Participant.

 

Notifications

 

This Appendix also includes information regarding exchange controls and certain other issues of which Participant should be aware with respect to Participant’s participation in the Plan.  The information is based on the securities, exchange control and other laws in effect in the respective countries as of April 2016.  Such laws are often complex and change frequently.  As a result, the Company strongly recommends that Participant not rely on the information in this Appendix as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may become out of date in the future.

 

In addition, the information contained herein is general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result.  Accordingly, Participant is advised to seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to Participant’s situation.

 

Finally, if Participant is a citizen or resident of a country other than the one in which Participant is currently working, transfers employment and/or residency to another country after the Grant Date, or is considered a resident of another country for local law purposes, the information contained herein may not be applicable to Participant.

 

ARGENTINA

 

Notifications

 

Securities Law Information.   Neither this Option nor the underlying Shares are publicly offered or listed on any stock exchange in Argentina.  The offer is private and not subject to the supervision of any Argentine governmental authority.

 

Exchange Control Information. Depending upon the method of exercise chosen for the Option, Participant may be subject to restrictions with respect to the purchase and/or transfer of U.S. dollars pursuant to Argentine currency exchange regulations. The Company reserves the right to restrict the methods of exercise if required under Argentine laws.

 

Under current regulations adopted by the Argentine Central Bank (the “ BCRA ”), Participant may purchase and remit foreign currency with a value of up to a certain maximum per month for the purpose

 

 

of acquiring foreign securities, including Shares under the Plan, without prior approval from the BCRA. However, Participant must register the purchase with the BCRA and execute and submit an affidavit to the entity selling the foreign currency confirming that Participant has not purchased and remitted funds in excess of the maximum during the relevant month.

 

Please note that exchange control regulations in Argentina are subject to frequent change.  Participant should consult with his or her personal legal advisor regarding any exchange control obligations that Participant may have prior to exercising the Option or receiving proceeds from the sale of Shares or dividends. Participant must comply with any and all Argentine currency exchange restrictions, approvals and reporting requirements in connection with his or her participation in the Plan.

 

AUSTRALIA

 

Notifications

 

Australian Tax Treatment .  The Plan is a plan to which Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies (subject to the conditions in that Act).

 

Exchange Control Information.  Exchange control reporting is required for cash transactions exceeding a certain threshold and international fund transfers.  Participant understands that the Australian bank assisting with the transaction may file the report on Participant’s behalf.  If there is no Australian bank involved in the transfer, Participant will be required to file the report.  Participant should consult with his or her personal advisor to ensure proper compliance with applicable reporting requirements in Australia.

 

AUSTRIA

 

Notifications

 

Exchange Control Information.  If Participant holds Shares acquired under the Plan outside Austria (even if held outside of Austria with an Austrian bank), Participant understands that Participant may need to submit an annual report to the Austrian National Bank using the form “ Standmeldung/Wertpapiere .”  Exemptions apply if the value of the Shares held outside Austria as of December 31 does not exceed certain thresholds.  If the thresholds are exceeded, annual or quarterly reporting obligations are imposed.  If applicable, the deadline for filing the annual report is January 31 of the following year and the deadline for the quarterly report is the 15th of the month following the end of the respective quarter.

 

When the Shares are sold or dividends are paid on such Shares, there may be exchange control obligations if the cash received is held outside Austria, as a separate reporting requirement applies to any non-Austrian cash accounts.  If the transaction volume of all of Participant’s cash accounts abroad exceeds a certain threshold, the movements and the balance of all accounts must be reported monthly, as of the last day of the month, on or before the 15th day of the following month, using the form “ Meldungen SI-Forderungen und/oder SI-Verpflichtungen. ”

 

BELGIUM

 

Notifications

 

Foreign Asset/Account Reporting Information.   Belgian residents are required to report any security ( e.g. , Shares acquired under the Plan) or bank account held outside of Belgium on their annual tax return.  In a separate report, they will be required to provide the National Bank of Belgium with certain details

 

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regarding such foreign accounts (including the account number, bank name and country in which any such account was opened).

 

BRAZIL

 

Terms and Conditions

 

Compliance with Law.  By accepting the Option, Participant acknowledges and agrees to comply with applicable Brazilian laws and to pay any and all applicable taxes associated with the exercise of the Option, the receipt of any dividends, and the sale of the Shares acquired under the Plan.

 

Labor Law Acknowledgment.  By accepting and/or exercising the Option, Participant agrees that Participant is (i) making an investment decision, (ii) Participant may exercise the Option only if the vesting conditions are met and (iii) the value of the underlying Shares is not fixed and may increase or decrease in value without compensation.

 

Notifications

 

Exchange Control Information .  If Participant is a Brazilian resident, Participant must submit an annual or quarterly declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights exceeds certain thresholds.  Assets and rights that must be reported include Shares acquired under the Plan.

 

Tax on Financial Transaction (IOF) .  Payments to foreign countries (including the payment of the exercise price) and repatriation of funds into Brazil and the conversion between BRL and USD associated with such fund transfers may be subject to the Tax on Financial Transactions.  It is Participant’s responsibility to comply with any applicable Tax on Financial Transactions arising from Participant’s participation in the Plan.  Participant should consult with his or her personal tax advisor for additional details.

 

BULGARIA

 

Notifications

 

Exchange Control Information .  If Participant exercises the Option through a cash exercise method, in order to remit funds out of Bulgaria, he or she will need to declare the purpose of the remittance to the local bank that is transferring the funds abroad.  If the amount Participant wishes to transfer exceeds a certain threshold, he or she will need to complete a standard form statistical declaration and provide it to the bank involved in the money transfer.  Participant should check with his or her local bank on the requirements for the information or documents that have to be provided.

 

If Participant exercises the Option by way of a cashless exercise method, the declaration described in the preceding paragraph will not be required because no funds will be remitted out of Bulgaria.

 

CANADA

 

Terms and Conditions

 

Language Consent .  If Participant is a resident of Quebec, the following provision will apply to Participant:

 

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The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

 

Consentement relatif à la langue utilisée .  Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention, ainsi que de tous documents, avis et procédures judiciaires, exécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à, la présente convention.

 

Data Privacy.  This provision supplements Section 3.3 of the Award Agreement:

 

If Participant is a resident of Quebec, Participant authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel (professional or not), involved in the administration and operation of the Plan.  Participant further authorizes the Company and the Employer to disclose and discuss Participant’s participation in the Plan with their advisors.  Participant also authorizes the Company and the Employer to record such information and to keep such information in Participant’s employee file.

 

Form of Payment.  This provision supplements Sections 2.3 and 2.4 of the Award Agreement:

 

Notwithstanding any discretion in the Plan, if Participant is a resident of Canada, Participant is prohibited from paying the exercise price or any Tax-Related Items by the method set forth in Section 2.3(c) or (d) or Section 2.4(c) of the Award Agreement.

 

Exercise of Option.  Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply to Participants resident in Canada, unless otherwise determined by the Administrator.

 

Notifications

 

Securities Law Information.  Participant understands that Participant is permitted to sell Shares acquired pursuant to the Plan through the designated broker appointed under the Plan, if any, provided the sale of the Shares acquired pursuant to the Plan takes place outside of Canada through the facilities of a stock exchange on which the Shares are listed ( i.e. , the New York Stock Exchange).

 

Foreign Asset/Account Reporting Information.  If Participant is a Canadian resident, Participant may be required to report his or her foreign property on form T1135 (Foreign Income Verification Statement) if the total cost of the foreign property exceeds a certain threshold at any time in the year.  Foreign property includes Shares acquired under the Plan and may include the Option.  The Option must be reported—generally at a nil cost—if the cost threshold is exceeded because of other foreign property Participant holds.  If Shares are acquired, their cost generally is the adjusted cost base (“ ACB ”) of the Shares.  The ACB ordinarily would equal the fair market value of the Shares at the time of acquisition, but if Participant owns other Shares, this ACB may have to be leveraged with the ACB of the other shares.  The form T1135 generally must be filed by April 30 of the following year.  Participant should consult with his or her personal advisor to ensure compliance with the applicable reporting requirements.

 

CHILE

 

Terms and Conditions

 

Labor Law Acknowledgment.  The Option and any Shares acquired under the Plan, and the income and value of same, shall not be considered as part of Participant’s remuneration for purposes of determining

 

A- 4

 

the calculation base of future indemnities, whether statutory or contractual, for years of service (severance) or in lieu of prior notice, pursuant to Article 172 of the Chilean Labor Code.

 

Notifications

 

Securities Law Information.  This offer of the Option constitutes a private offering of securities in Chile effective as of the Grant Date.  This offer of the Option is made subject to general ruling n° 336 of the Chilean Superintendence of Securities and Insurance (“ SVS ”).  The offer refers to securities not registered at the securities registry or at the foreign securities registry of the SVS, and, therefore, such securities are not subject to oversight of the SVS.  Given that the Option and the underlying Shares are not registered in Chile, the Company is not required to provide public information about the Option or the Shares in Chile.  Unless the Option and/or the Shares are registered with the SVS, a public offering of such securities cannot be made in Chile.

 

Esta oferta de las Opciones constituye una oferta privada en Chile y se inicia en la Fecha de la Oferta.  Esta oferta de las Opciones se acoge a las disposiciones de la Norma de Carácter General N° 336 de la Superintendencia de Valores y Seguros de Chile (“ SVS ”).  Esta oferta versa sobre valores no inscritos en el Registro de Valores o en el Registro de Valores Extranjeros que lleva la SVS, por lo que tales valores no están sujetos a la fiscalización de ésta.  Por tratarse las Opciones de valores no registrados en Chile, no existe obligación por parte de la Compañía de entregar en Chile información pública respecto de las Opciones o sus Acciones.  Estos valores no podrán ser objeto de oferta pública en Chile mientras no sean inscritos en el Registro de Valores correspondiente.

 

Exchange Control Information. Exchange control regulations will apply if Participant remits more than a certain amount upon exercise of the Option or if Participant’s aggregate investments abroad exceed a certain maximum amount.

 

Please note that exchange control regulations in Chile are subject to change.  Participant should consult with his or her personal legal advisor regarding any exchange control obligations that Participant may have prior to exercising the Option or receiving proceeds from the sale of Shares acquired under the Plan.

 

Tax Reporting and Registration Information. Participant must file Tax Form 1851 “Annual Sworn Statement Regarding Investments Held Abroad” in relation to any Shares acquired under the Plan that are held abroad. In addition, if Participant wishes to receive credit in Chile for any tax paid abroad on any dividends received pursuant to the Shares, Participant must register the purchase of Shares with the Chilean Internal Revenue Service (the “ CIRS ”) and also file Tax Form 1853 “Annual Sworn Statement Regarding Credits for Taxes Paid Abroad.” These forms must be submitted through the CIRS web page at www.sii.cl.

 

Registration of the purchase of Shares with the CIRS will also provide evidence of the acquisition price of the Shares, which Participant will need when the Shares are sold. It may also be possible for Participant to provide other evidence in the form of the Agreement or a report of the exercise price and the number of Shares purchased and sold; however, neither the Company nor Fidelity Investments is under any obligation to provide Participant with such a report. Participant should consult with his or her personal legal and tax advisors regarding how to register with the CIRS (if desired).

 

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CHINA

 

Terms and Conditions

 

Form of Payment.  This provision supplements Section 2.3 of the Award Agreement:

 

Any Shares that Participant acquires at exercise of the Option (less amounts required to be withheld to satisfy Tax-Related Items) will be credited to Participant’s account in Participant trust or other account established under the Plan.  Participant understands that these Shares must remain in such Participant trust or other account until such time as Participant decides or is required to sell them.

 

Forfeiture Upon Termination of Employment.   Notwithstanding anything to the contrary in this Agreement, and to the extent not earlier exercised, forfeited, expired, canceled or otherwise extinguished, the Option shall be forfeited on the date that is six (6) months from the date of Termination of Service (for any reason[, including Retirement]) and thereafter Participant shall have no entitlement to the underlying Shares.

 

Immediate Sale of Shares Upon Termination of Employment.  Participant understands and agrees that upon Participant’s Termination of Service, including death, Disability[ or Retirement], Participant is required to and will promptly sell all Shares acquired upon the exercise of the Option.  Any Shares not sold at Participant’s direction within a reasonable period of time following the termination of Participant’s employment, as determined by the Company in its sole discretion, will be sold on Participant’s behalf pursuant to this authorization.  In this case, the Company will be under no obligation to arrange for such sale at any particular price.

 

Responsibility for Taxes .  Notwithstanding Section 2.4(c) of the Award Agreement, if Participant fails to provide timely payment of any Tax-Related Items, such failure shall be viewed as Participant’s express authorization (without further action on Participant’s part) for the Company and/or the Employer to satisfy all or any portion of the Tax-Related Items pursuant to Section 2.4(b)(ii) of the Award Agreement or, if such withholding method is deemed to be not in accordance with Applicable Laws, pursuant to 2.4(b)(v) of the Award Agreement.

 

Repatriation of Sale Proceeds and Dividends (applies only to Employees subject to exchange control restrictions in the People’s Republic of China, as determined by the Company in its sole discretion). Participant understands and agrees that, due to exchange control laws in China, Participant will be required to immediately repatriate to the Approved Account described below the proceeds from the sale of Shares that Participant acquires upon exercise of the Option.  Participant also understands and agrees that this repatriation requirement also applies to any dividends that are paid on such Shares, which must be repatriated to China at the time and in the manner established by the Company.  Participant further agrees that such proceeds and dividends must be transferred directly from Participant trust or other account established under the Plan to the dedicated foreign exchange account established by the Company or a Subsidiary in China and approved by the State Administration of Foreign Exchange or its local counterpart under applicable exchange control rules (the “ Approved Account ”) before such proceeds and dividends can be remitted to Participant.  Participant further agrees not to instruct or cause the Administrator to transfer such cash proceeds and dividends to any person, broker or entity other than the Approved Account.  Participant further agrees to cooperate with and comply with any other requests made by the Company, the Employer or the Administrator in the future in order to facilitate compliance with the exchange control requirements in China. Participant undertakes to reimburse the Company and its Subsidiaries for any penalties or other charges that they may incur resulting from any failure by Participant to ensure compliance with the requirements set forth in this paragraph.  Participant understands that, due to exchange control requirements in China, the funds held on Participant’s behalf in

 

A- 6

 

the Approved Account may be converted from U.S. dollars into local currency only once per calendar quarter, and that these funds may not be remitted to Participant until this conversion occurs.  Finally, Participant understands and agrees that neither the Company nor the Employer assume any liability for any fluctuations in the U.S. dollar exchange rate between the time that Participant acquires Shares upon the exercise of the Option, the time that dividends are received with respect to such Shares, or the time Participant sells Shares acquired under the Plan, either through a voluntary sale or a mandatory sale arranged by the Company, and the time Participant receives the cash proceeds in China through the Approved Account.

 

Exercise of Option .  Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply to Participants resident in China, unless otherwise determined by the Administrator.

 

COLOMBIA

 

Terms and Conditions

 

Labor Law Acknowledgment. Participant acknowledges that pursuant to Article 128 of the Colombian Labor Code, the Plan and related benefits do not constitute a component of “salary” for any legal purpose.

 

Notifications

 

Securities Law Information. The Shares subject to the Option are not and will not be registered in the Colombian registry of publicly traded securities ( Registro Nacional de Valores y Emisores ) and therefore the Shares may not be offered to the public in Colombia. Nothing in this document should be construed as the making of a public offer of securities in Colombia.

 

Exchange Control Information.  Investments in assets located abroad (including Shares) are subject to registration with the Bank of the Republic if Participant’s aggregate investments held abroad (as of December 31 of the applicable calendar year) equal or exceed a certain amount.  If funds are remitted from Colombia through an authorized local financial institution, the authorized financial institution will automatically register the investment.  However, if Participant does not remit funds through an authorized financial institution when Participant exercises the Option ( e.g ., because Participant uses a cashless method of exercise), then Participant must register the investment (assuming Participant’s accumulated financial investments held abroad at year-end are equal to or exceed the threshold amount).  If Participant immediately sells the Shares acquired through a cashless sell-all method of exercise, then no registration is required because no funds are remitted from Colombia and no Shares are held abroad.

 

COSTA RICA

 

There are no country-specific terms and conditions.

 

CZECH REPUBLIC

 

Notifications

 

Exchange Control Information.   The Czech National Bank (“ CNB ”) may require Participant to fulfill certain notification duties in relation to the acquisition of Shares and the opening and maintenance of a foreign account.  Even in the absence of a request from the CNB Participant may need to report foreign direct investments with a value exceeding a certain aggregate amount and/or other foreign financial assets with a value in excess of a certain maximum.  However, because exchange control regulations change frequently and without notice, Participant should consult with his or her personal legal advisor prior to the

 

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exercise of the Option and the sale of Shares to ensure compliance with current regulations.  It is Participant’s responsibility to comply with any applicable Czech exchange control laws.

 

DENMARK

 

Terms and Conditions

 

Danish Stock Option Act.  In accepting the Option, Participant acknowledges that he or she has received an Employer Statement translated into Danish, which is being provided to comply with the Danish Stock Option Act.  To the extent more favorable to Participant and required to comply with the Stock Option Act, the terms set forth in the Employer Statement will apply to Participant’s participation in the Plan.

 

Notifications

 

Foreign Asset/Account Reporting Information .  If Participant establishes an account holding Shares or an account holding cash outside Denmark, he or she must report the account to the Danish Tax Administration.  The form which should be used in this respect can be obtained from a local bank.  (These obligations are separate from and in addition to the obligations described below.)

 

Securities/Tax Reporting Information .  If Participant holds Shares acquired under the Plan in a brokerage account with a broker or bank outside Denmark (this likely includes the participant trust), he or she is required to inform the Danish Tax Administration about the account.  For this purpose, Participant must file a Form V ( Erklaering V ) with the Danish Tax Administration.  The Form V must be signed both by Participant and by the applicable broker or bank where the account is held.  By signing the Form V, the broker or bank undertakes to forward information to the Danish Tax Administration concerning the Shares in the account without further request each year.  By signing the Form V, Participant authorizes the Danish Tax Administration to examine the account.  In the event that the applicable broker or bank with which the account is held does not wish to, or, pursuant to the laws of the country in question, is not allowed to assume such obligation to report, Participant acknowledges that he or she is solely responsible for providing certain details regarding the foreign brokerage account and Shares deposited therein to the Danish Tax Administration as part of his or her annual income tax return.

 

In addition, if Participant opens a brokerage account (or a deposit account with a U.S. bank) for the purpose of holding cash outside Denmark, he or she is also required to inform the Danish Tax Administration about this account.  To do so, Participant must file a Form K ( Erklaering K ) with the Danish Tax Administration.  The Form K must be signed both by Participant and by the applicable broker or bank where the account is held.  By signing the Form K, the broker/bank undertakes an obligation, without further request each year, to forward information to the Danish Tax Administration concerning the content of the account.  By signing the Form K, Participant authorizes the Danish Tax Administration to examine the account.  In the event that the applicable financial institution (broker or bank) with which the account is held, does not wish to, or, pursuant to the laws of the country in question, is not allowed to assume such obligation to report, Participant acknowledges that he or she is solely responsible for providing certain details regarding the foreign brokerage or bank account to the Danish Tax Administration as part of Participant’s annual income tax return.

 

DOMINICAN REPUBLIC

 

There are no country-specific terms and conditions.

 

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ECUADOR

 

There are no country-specific terms and conditions.

 

EGYPT

 

There are no country-specific terms and conditions.

 

EL SALVADOR

 

There are no country-specific terms and conditions.

 

ESTONIA

 

Terms and Conditions

 

Vesting Schedule .  This provision supplements the Vesting Schedule in the Award Agreement:

 

Notwithstanding anything contrary in this Agreement, the Option will not vest and become exercisable until the third anniversary of the Grant Date.

 

FRANCE

 

[Provisions to be included for grants not intended to be French-Qualified Options):

 

Terms and Conditions

 

Consent to Receive Information in English.   By accepting the Agreement providing for the terms and conditions of Participant’s grant, Participant confirms having read and understood the documents relating to this grant (the Plan and this Agreement) which were provided in English language.  Participant accepts the terms of those documents accordingly.

 

En acceptant le Contrat d’Attribution décrivant les termes et conditions de l’attribution, le participant confirme ainsi avoir lu et compris les documents relatifs à cette attribution (le Plan U.S. et ce Contrat d’Attribution) qui ont été communiqués en langue anglaise.  Le participant accepte les termes en connaissance de cause.

 

Notifications

 

Foreign Asset/Account Reporting Information .  If Participant is a French resident and holds Shares outside of France or maintains a foreign bank account, Participant is required to report such to the French tax authorities when filing Participant’s annual tax return.  Failure to comply could trigger significant penalties.]

 

[Provisions to be included for grants intended to be French-Qualified Options):

 

Terms and Conditions

 

Type of Grant .  The Option is granted as a French-Qualified Option and is intended to qualify for the special tax and social security treatment in France under Section L. 225-177 to L. 225-186-1 of the French Commercial Code, as amended.  The French-Qualified Option is granted subject to the terms and conditions of the French Sub-Plan to the Plan (the “ French Sub-Plan ”).

 

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Certain events may affect the status of the Option as a French-Qualified Option or the underlying Shares, and the French-Qualified Option or the underlying Shares may be disqualified in the future.  The Company does not make any undertaking or representation to maintain the qualified status of the French-Qualified Option or of the underlying Shares.

 

Capitalized terms not defined herein, in the Award Agreement or the Plan shall have the meanings ascribed to them in the French Sub-Plan.

 

Holding Periods for Managing Corporate Officers.   If on the Date of Grant the French Participant qualifies as a managing corporate officer under French law (“mandataires sociaux”) or any similar official capacity of the Company or a Subsidiary, the French Participant may not sell 20% of the Shares acquired upon exercise of the French-Qualified Option until the termination of such official capacity, as long as this restriction is applicable to French-Qualified Options.

 

No Transfer of French-Qualified Option .  The French-Qualified Option may not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner during a French Participant’s lifetime and upon death only in accordance with Section 7 of the French Sub-Plan, and only to the extent required by Applicable Laws (including the provisions of L. 225-177 to L. 225-186-1 of the French Commercial Code, as amended).

 

Term of the Option .  Notwithstanding anything in the Plan or Award Agreement, the French-Qualified Option will expire nine years and six months from the Date of Grant, unless sooner terminated, forfeited, or canceled in accordance with the provisions of the Plan or Award Agreement.

 

Termination of Service Due to Death .  Notwithstanding anything in the Plan or Award Agreement, in the event of Participant’s Termination of Service due to death prior to the satisfaction of the vesting conditions set forth in the Vesting Schedule of the Award Agreement, any portion of the French-Qualified Option that has not vested as of such date will immediately vest and Participant’s right under the French-Qualified Option may be exercised by Participant’s legal heirs within six months of the date of death.  If Participant’s heirs do not exercise the unexercised portion of the French-Qualified Option within six months of the date of death, the unexercised portion of the French-Qualified Option will terminate and be forfeited.

 

Consent to Receive Information in English.   By accepting the Agreement providing for the terms and conditions of Participant’s grant, Participant confirms having read and understood the documents relating to this grant (the Plan and this Agreement) which were provided in English language.  Participant accepts the terms of those documents accordingly.

 

En acceptant le Contrat d’Attribution décrivant les termes et conditions de l’attribution, le participant confirme ainsi avoir lu et compris les documents relatifs à cette attribution (le Plan U.S. et ce Contrat d’Attribution) qui ont été communiqués en langue anglaise.  Le participant accepte les termes en connaissance de cause.

 

Notifications

 

Foreign Asset/Account Reporting Information .  If Participant is a French resident and holds Shares outside of France or maintains a foreign bank account, Participant is required to report such to the French tax authorities when filing Participant’s annual tax return.  Failure to comply could trigger significant penalties.]

 

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FINLAND

 

There are no country-specific terms and conditions.

 

GERMANY

 

Notifications

 

Exchange Control Information.   Cross-border payments in excess of a certain threshold must be reported monthly to the German Federal Bank ( Bundesbank ).  In case of payments in connection with securities (including proceeds realized upon the sale of Shares or the receipt of dividends), the report must be made by the 5th day of the month following the month in which the payment was received.  The report must be filed electronically and the form of report (“ Allgemeine Meldeportal Statistik ”) can be accessed via the Bundesbank’s website (www.bundesbank.de), in both German and English.  Participant is responsible for making this report.

 

GREECE

 

There are no country-specific terms and conditions.

 

GUATEMALA

 

Terms and Conditions

 

Language Consent.   By participating in the Plan, Participant acknowledges that he or she is proficient in reading and understanding English and fully understands the terms of the Plan and the Agreement.

 

HONG KONG

 

Terms and Conditions

 

Sale of Shares.  In the event the Option vests within six months of the Grant Date, Participant agrees not to sell any Shares acquired upon exercise of the Option prior to the six-month anniversary of the Grant Date.

 

Securities Law Notice.  WARNING :  The contents of this document have not been reviewed by any regulatory authority in Hong Kong. Participant should exercise caution in relation to the offer.  If Participant is in doubt about any of the contents of this Agreement, or the Plan, Participant should obtain independent professional advice.  Neither the Option nor the Shares acquired upon exercise of the Option constitute a public offering of securities under Hong Kong law and are available only to employees of the Company and its Subsidiaries.  The Agreement, the Plan and other incidental materials (i) have not been prepared in accordance with and are not intended to constitute a “prospectus” for a public offering of securities under applicable securities legislation in Hong Kong and (ii) are intended only for the personal use of each eligible employee of the Company and its Subsidiaries and may not be distributed to any other person.

 

Nature of Scheme.  The Company specifically intends that the Plan will not be an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance.

 

HUNGARY

 

There are no country-specific terms and conditions.

 

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INDIA

 

Terms and Conditions

 

Cash Settlement.  The Company reserves the right to restrict Participant from acquiring Shares at exercise of the Option.  Instead, the Company reserves the right to require the Employer to make a payment to Participant in cash or its equivalent of an amount equal to the difference between the value of Shares subject to the Option at exercise and the Exercise Price.  Any references to the issuance of Shares in any documents related to the Option shall not be applicable in these circumstances.

 

Exercise of Option .  Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply to Participants resident in India, unless otherwise determined by the Administrator.

 

Notifications

 

Exchange Control Information . Due to Indian exchange control restrictions, Indian residents are required to repatriate the proceeds from the sale of Shares to India within ninety (90) days of receipt and any dividends received in relation to the Shares within one hundred eighty (180) days of payment. Participant should maintain any foreign inward remittance certificate received from the bank where the foreign currency is deposited following any repatriation of proceeds in the event that the Reserve Bank of India or the Employer requests proof of repatriation. It is Participant’s responsibility to comply with applicable exchange control laws in India.

 

Foreign Account/Asset Reporting Information .  Indian residents are required to declare any foreign bank accounts and assets (including Shares acquired under the Plan) on their annual tax returns.  Participant should consult with his or her personal tax advisor to determine Participant’s reporting requirements.

 

INDONESIA

 

Notifications

 

Exchange Control Information.   If Participant remits funds into or out of Indonesia, the Indonesian bank through which the transaction is made will submit a report on the transaction to the Bank of Indonesia for statistical reporting purposes.  For transactions of exceeding a certain threshold, a description of the transaction must be included in the report.  Although the bank through which the transaction is made is required to make the report, Participant must complete a “Transfer Report Form.” The Transfer Report Form will be provided to Participant by the bank through which the transaction is to be made.

 

IRELAND

 

There are no country-specific terms and conditions.

 

ISRAEL

 

Terms and Conditions

 

The following provisions apply to Participants who are or are deemed to be residents of the State of Israel for tax purposes or are otherwise subject to taxation in Israel with respect to the Option on the Grant Date.

 

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Capitalized terms used but not defined in these provisions or the Plan or the Agreement shall have the meanings ascribed to them in the Israeli Sub-Plan to the Plan (the “ Israeli Sub-Plan ”).

 

Trust Arrangement .  The Option is offered to Participant subject to, and in accordance with, the terms of the Plan, the Israeli Sub-Plan, this Agreement and the Trust Agreement .

 

The Option is intended to be a 102 Capital Gains Track Grant and qualify for 102 Capital Gains Track tax treatment.  Certain events may affect the status of the Option and the Shares subject to the Option as qualified under Section 102 and the Option and the Shares subject to the Option may be disqualified in the future.  The Company does not make any undertaking or representation to maintain the 102 Capital Gains Track status of the Option and the Shares subject to the Option.

 

Participant agrees that, upon request of the Company or the Employer, he or she will execute the 102 Capital Gains Track Grant acceptance prescribed by the Company or the Trustee, according to the procedures and timeline set forth by the Company and the Trustee (which may include executing this Agreement in writing).  If Participant does not comply with any such request, the qualified status of the Option and the Shares under Section 102 may not apply.

 

Nature of Grant .  The following provision supplements Section 3.1 (Nature of Grant) of the Award Agreement:

 

By accepting the Option, Participant (a) acknowledges receipt of and represents that he or she has read and is familiar with the Plan, the Israeli Sub-Plan, and this Agreement; (b) accepts the Option subject to all of the terms and conditions of Plan, the Israeli Sub-Plan, and this Agreement; and (c) agrees that the Option, the Shares and any rights issued pursuant to the Option and the Shares (other than cash dividends) will be issued to and deposited with the Trustee and shall be held in trust for Participant’s benefit for the Required Holding Period and as otherwise required by the ITO, the Rules and any ruling or approval of the ITA pursuant to the terms of the ITO, the Rules and the Trust Agreement.

 

Furthermore, by accepting the Option, Participant confirms that he or she is familiar with the terms and provisions of Section 102, particularly the 102 Capital Gains Track described in subsection (b)(2) and (b)(3) thereof, and agrees that he or she will not require the Trustee to release the Option or the Shares to Participant, or to sell the Option or the Shares to a third party, during the Required Holding Period, unless permitted to do so by the Company and the ITO or the Rules.

 

The Company may in its sole discretion replace the Trustee from time to time and instruct the transfer of all Option and Shares held or administered by such Trustee at such time to its successor and the provisions of this Agreement shall apply to the new Trustee.

 

Responsibility for Taxes .  The following provision supplements Section 2.4 of the Award Agreement:

 

In the event the Option is exercised and Shares are to be issued to Participant after the expiration of the Required Holding Period, the Shares issued upon exercise shall either be (a) issued to and deposited with the Trustee to be held in trust for Participant’s benefit, or (b) transferred to Participant directly upon Participant’s request, provided that Participant first complies with his or her obligations with respect to Tax-Related Items.  In the event that Participant elects to have the Shares transferred to him or her without selling such Shares, Participant shall become liable to pay taxes immediately in accordance with the provisions of the ITO and Section 2.4 of the Award Agreement, as supplemented by this provision.

 

The following provisions apply to Participants who permanently transfer to Israel after the Grant Date who do not hold 102 Capital Gains Track Grants.

 

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Exercise Procedure; Responsibility for Taxes .  This provision supplements Section 2.2 (Exercise) and 2.4 (Responsibility for Taxes) of the Award Agreement:

 

To facilitate compliance with tax withholding obligations in Israel, the Company reserves the right to require Participant to exercise the Option by means of a “cashless-sell-all” method of exercise, whereby Participant delivers irrevocable and unconditional instructions to Fidelity Investments, or such other stock plan service provider as may be selected by the Company in the future (the “ Designated Broker ”) to sell all Shares subject to the Option and deliver promptly to the Company an amount sufficient to pay the exercise price and any Tax-Related Items.

 

Alternatively, the Company reserves the right to (a) require Participant to sell all Shares issued under this Agreement upon Participant’s Termination of Service, or (b) maintain the Shares issued under this Agreement in an account with the Designated Broker, until the Shares are sold.  By accepting this Agreement, Participant authorizes the Company to instruct the Designated Broker, to assist with the mandatory sale of such Shares (on Participant’s behalf pursuant to this authorization) and Participant expressly authorizes the Designated Broker to complete the sale of such Shares.  Participant agrees to sign any forms and/or consents required by the Company or the Designated Broker to effectuate the sale of the Shares.  Participant acknowledges that the Designated Broker is under no obligation to arrange for the sale of the Shares at any particular price.  Upon the sale of the Shares, the cash proceeds from the sale of the Shares, less any brokerage fees or commissions and any Tax-Related Items, will be delivered to Participant.

 

Notifications

 

Securities Law Information . This grant does not constitute a public offering under the Securities Law, 1968.

 

ITALY

 

Terms and Conditions

 

Data Privacy.  The following provision replaces Section 3.3 of the Award Agreement.

 

Participant understands that the Employer, the Company and any Subsidiary may hold certain personal information about Participant, including, but not limited to, name, home address, email address and telephone number, date of birth, social insurance, passport or other identification number, salary, nationality, job title, any Shares or directorships held in the Company or any Subsidiary, details of all stock options, restricted stock units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

 

Participant also understands that providing the Company with Data is necessary for the performance of the Plan and that Participant’s refusal to provide such Data would make it impossible for the Company to perform its contractual obligations and may affect Participant’s ability to participate in the Plan. The Controller of personal data processing is 3M Company, with registered offices at 3M Center, St. Paul, Minnesota, United States of America, and pursuant to Legislative Decree no. 196/2003, its Representative in Italy is Dario Caspani with registered offices at 3M ITALIA S.p.A. — via S.BOVIO, 3 — 20090 SEGRATE — MILANO, ITALY.

 

Participant understands that Data will not be publicized, but it may be transferred to Fidelity Investments and such other banks, financial institutions or brokers involved in the management and

 

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administration of the Plan.  Participant understands that Data may also be transferred to the Company’s independent registered public accounting firm.  Participant further understands that the Company and/or any Subsidiary will transfer Data among themselves as necessary for the purpose of implementing, administering and managing the Plan, and that the Company and/or any Subsidiary may each further transfer Data to Fidelity Investments or any other third parties assisting the Company in the implementation, administration and management of the Plan, including any requisite transfer of Data to a broker or other third party with whom Participant may elect to deposit any Shares acquired under the Plan.  Such recipients may receive, possess, use, retain and transfer Data in electronic or other form, for the purposes of implementing, administering and managing the Plan.  Participant understands that these recipients may be located in or outside the European Economic Area, such as in the United States, or elsewhere.  Should the Company exercise its discretion in suspending all necessary legal obligations connected with the management and administration of the Plan, it will delete Data as soon as it has completed all the necessary legal obligations connected with the management and administration of the Plan.

 

Participant understands that Data processing related to the purposes specified above shall take place under automated or non-automated conditions, anonymously when possible, that comply with the purposes for which Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to Legislative Decree no. 196/2003. The processing activity, including communication, the transfer of Data abroad, including outside of the European Economic Area, as herein specified and pursuant to applicable laws and regulations, does not require Participant’s consent hereto as the processing is necessary to the performance of contractual obligations related to the implementation, administration and management of the Plan.  Participant understands that, pursuant to Section 7 of the Legislative Decree no. 196/2003, Participant has the right to, including but not limited to, access, delete, update, correct or terminate for legitimate reason, the Data processing.  Furthermore, Participant is aware that Data will not be used for direct marketing purposes.  In addition, Data provided can be reviewed and questions or complaints can be addressed by contacting Participant’s local human resources representative.

 

Plan Document Acknowledgment.   By accepting the grant of the Option, Participant acknowledges that he or she has received a copy of the Plan and the Agreement and has reviewed the Plan and the Agreement in their entirety and fully understands and accepts all provisions of the Plan and the Agreement.  Participant further acknowledges that he or she has read and expressly approve the following sections of the Agreement: “Termination of Option”; “Responsibility for Taxes”; “Nature of Grant”; “Data Privacy” as replaced by the above provision; and “Governing Law and Venue”.

 

Notifications

 

Foreign Asset/Account Reporting Information .  Italian residents who, at any time during the fiscal year, hold foreign financial assets (such as cash, Shares or options) which may generate income taxable in Italy are required to report such assets on their annual tax returns or on a special form if no tax return is due.  The same reporting duties apply to Italian residents who are beneficial owners of the foreign financial assets pursuant to Italian money laundering provisions, even if they do not directly hold the foreign asset abroad.  Participant is advised to consult a personal legal advisor to ensure compliance with applicable reporting requirements.

 

Foreign Asset Tax Information .  The value of the financial assets held outside of Italy (including Shares) by Italian residents is subject to a foreign asset tax.  The taxable amount will be the fair market value of the financial assets ( e.g. , Shares acquired under the Plan) assessed at the end of the calendar year.

 

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JAPAN

 

Notifications

 

Exchange Control Information.  If Participant acquire Shares valued at more than a certain threshold in a single transaction, Participant must file a Securities Acquisition Report with the Ministry of Finance through the Bank of Japan within 20 days of the acquisition of the Shares.

 

In addition, if Participant pays more than a certain amount in a single transaction for the acquisition of Shares when exercising the Option, Participant must file a Payment Report with the Ministry of Finance through the Bank of Japan within 20 days of the date that the payment is made.  The precise reporting requirements vary depending on whether or not the relevant payment is made through a bank in Japan.

 

Please note that a Payment Report is required independently from a Securities Acquisition Report; therefore, Participant must file both a Payment Report and a Securities Acquisition Report if the total amount that Participant pays in a single transaction for exercising the Option and purchasing Shares exceeds certain thresholds.

 

Foreign Asset/Account Reporting Information .  Japanese residents are required to report details of any assets held outside of Japan as of December 31, including Shares acquired under the Plan, to the extent such assets have a total net fair market value exceeding a certain threshold.  Such report will be due by March 15 each year.  Participant is responsible for complying with this reporting obligation if applicable to Participant and Participant should consult Participant’s personal tax advisor in this regard.

 

KAZAKHSTAN

 

There are no country-specific terms and conditions.

 

KOREA

 

Notifications

 

Exchange Control Information.  If Participant remits funds out of South Korea to pay the exercise price, Participant agrees to comply with any exchange control requirements, including any necessary confirmation of the remittance of funds with a foreign exchange bank in South Korea.  The foreign exchange bank may require that Participant submit the following supporting documents evidencing the nature of the remittance to the bank together with the confirmation application: (i) the Agreement; (ii) the Plan; and (iii) Participant’s certificate of employment.

 

Further, Korean residents who realize certain amounts from the sale of Shares or the receipt of any dividends in a single transaction must repatriate the proceeds to Korea within three years of the sale or receipt.

 

Foreign Asset/Account Reporting Information.  Korean residents must declare all foreign financial accounts ( i.e. , non-Korean bank accounts, brokerage accounts, etc.) to the Korean tax authority and file a report with respect to such accounts if the monthly balance of such accounts exceeds a certain threshold on any month-end during a calendar year.  Participant should consult with his or her personal tax advisor to determine his or her personal reporting obligations.

 

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LATVIA

 

Terms and Conditions

 

Vesting Schedule .  This provision supplements the Vesting Schedule in the Award Agreement:

 

Notwithstanding anything contrary in this Agreement, the Option will not vest and become exercisable until the third anniversary of the Grant Date.

 

LITHUANIA

 

There are no country-specific terms and conditions.

 

MALAYSIA

 

Terms and Conditions

 

The following provision replaces Section 3.3 of the Award Agreement:

 

Data Privacy .   Participant hereby explicitly, voluntarily and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other Option grant materials by and among, as applicable, the Company and the Employer for the purpose of implementing, administering and managing the Plan.

 

Participant may have previously provided the Company and Participant’s Employer, and the same may hold certain personal information about Participant, including, but not limited to, name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, the fact and condition of Participant’s participation in the Plan, details of all awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

 

Participant also authorizes any transfer of Data to Fidelity Investments, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan.  Participant acknowledges that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country, which may not provide the same level of protection to Data.  Participant understands that if Participant resides outside the United States, Participant may request a list with the names and addresses of any potential recipients of the Data by contacting Participant’s local human resources representative.  Participant authorizes the Company, Fidelity Investments and any other possible recipients which may assist the Company (presently or in the future) with the implementation, administration and management of the Plan, and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan.  Participant understands that Data will be held only as long as is necessary to implement, administer and manage the Plan.  Participant understands that if Participant resides outside the United States, Participant may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant’s local human resources representative, Maniarasu Muniandy, whose contact details are

 

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(phone number 603 7884 2840) and (email address mmuniandy@mmm.com).  Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis.  If Participant does not consent, or if Participant later seeks to revoke Participant’s consent, Participant’s service and career with the Employer will not be affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant options or other equity awards to Participant or administer or maintain such awards.  Therefore, Participant understands that refusing or withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan.  For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that Participant may contact Participant’s local human resources representative.

 

Bahasa Malaysia Translation

 

Anda dengan ini secara eksplicit, secara sukarela dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadi anda seperti yang dinyatakan dalam Perjanijiandan apa-apa Perjanjian Opsyen Saham dan bahan geran yang lain oleh dan di antara, sebagaimana yang berkenaan, Syarikat dan Majikan anda untuk tujuan membantu dalam pelaksanaan, pentadbiran dan pengurusan Pelan tersebut.

 

Sebelum ini, anda mungkin telah membekalkan Syarikat dan Majikan anda yang mungkin memegang, maklumat peribadi tertentu tentang anda, termasuk, tetapi tidak terhad kepada, namanya , alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa syer dalam saham atau jawatan pengarah yang dipegang dalam Syarikat, fakta dan syarat-syarat penyertaan anda dalam Pelan , butir-butir semua Anugerah atau apa-apa hak lain untuk syer dalam saham yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun yang belum dijelaskan bagi faedah anda, untuk tujuan melaksanakan, mentadbir dan menguruskan Pelan tersebut (“Data”) .

 

Anda juga memberi kuasa untuk membuat apa-apa pemindahan Data kepada Fidelity Investments, atau pembekal perkhidmatan pelan saham lain yang dipilih oleh Syarikat pada masa depan untuk membantu Syarikat dalam pelaksanaan, pentadbiran dan pengurusan Pelan. Anda mengakui bahawa penerima-penerima Data ini mungkin berada di Amerika Syarikat atau di tempat lain, dan bahawa negara penerima (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara anda, yang mungkin tidak boleh memberi tahap perlindungan yang sama kepada Data. Anda fahami bahawa sekiranya anda menetap di luar Amerika Syarikat, anda boleh meminta senarai nama dan alamat mana-mana penerima Data dengan menghubungi wakil sumber manusia tempatan anda. Anda memberi kuasa kepada Syarikat, Fidelity Investments dan mana-mana penerima lain yang mungkin membantu Syarikat (pada masa kini atau masa depan) untuk melaksanakan, mentadbir dan menguruskan Pelan, dan mana-mana penerima lain yang mungkin membantu Syarikat (pada masa kini atau masa depan) untuk melaksanakan, mentadbir dan menguruskan Pelan untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, dengan tujuan untuk melaksanakan, mentadbir dan menguruskan Pelan tersebut. Anda fahami bahawa Data akan dipegang hanya untuk tempoh yang diperlukan untuk melaksanakan, mentadbir dan menguruskan Pelan tersebut. Anda fahami bahawa sekiranya anda menetap di luar Amerika Syarikat, anda boleh, pada bila-bila masa, melihat data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatan anda, Maniarasu Muniandy, di mana butir-butir hubungannya adalah (phone number 603 7884 2840) and (email address mmuniandy@mmm.com) . Selanjutnya, anda memahami bahawa anda memberikan persetujuan di sini secara sukarela. Jika anda tidak bersetuju, atau jika anda kemudian membatalkan persetujuan anda,

 

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perkhidmatan dan kerjaya anda dengan Majikan anda tidak akan terjejas; satunya akibat jika anda tidak bersetuju atau menarik balik persetujuan anda adalah bahawa Syarikat tidak akan dapat memberikan Anugerah atau anugerah ekuiti lain kepada anda atau mentadbir atau mengekalkan anugerah tersebut. Oleh itu, anda fahami bahawa keengganan atau penarikan balik persetujuan anda boleh menjejaskan keupayaan anda untuk mengambil bahagian dalam Pelan tersebut. Untuk maklumat lanjut mengenai akibat keengganan anda untuk memberikan keizinan atau penarikan balik keizinan, anda fahami bahawa anda boleh menghubungi wakil sumber manusia tempatan anda.

 

Director Notification Obligation.   If Participant is a director of a Malaysian Subsidiary, Participant is subject to certain notification requirements under the Malaysian Companies Act 1965.  Among these requirements is an obligation to notify the Malaysian Subsidiary in writing when Participant receives or disposes of an interest ( e.g. , Options or Shares) in the Company or any related company.  This notification must be made within 14 days of receiving or disposing of any interest in the Company or any related company.

 

MEXICO

 

Terms and Conditions

 

Acknowledgment of the Agreement .   By participating in the Plan, Participant acknowledges that he or she has received a copy of the Plan, has reviewed the Plan in its entirety and fully understands and accepts all provisions of the Plan.  Participants further acknowledges that he or she has read and expressly approves the terms and conditions set forth in the Nature of Grant paragraph of the Award Agreement, in which the following is clearly described and established: (i) Participant’s participation in the Plan does not constitute an acquired right; (ii) the Plan and Participant’s participation in the Plan are offered by the Company on a wholly discretionary basis; (iii) Participant’s participation in the Plan is voluntary; and (iv) the Company and its Subsidiaries are not responsible for any decrease in the value of the Option granted and/or the Shares issued under the Plan.

 

Labor Law Policy and Acknowledgment .  By participating in the Plan, Participant expressly recognizes that 3M Company, with registered offices at 3M Center, St. Paul, Minnesota 55144, USA, is solely responsible for the administration of the Plan and that Participant’s participation in the Plan and acquisition of Shares does not constitute an employment relationship between Participant and the Company since Participant is participating in the Plan on a wholly commercial basis.  Based on the foregoing, Participant expressly recognizes that the Plan and the benefits that Participant may derive from participation in the Plan do not establish any rights between Participant and the Company and do not form part of the employment conditions and/or benefits provided by the Company and any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of Participant’s employment.

 

Participant further understands that Participant’s participation in the Plan is as a result of a unilateral and discretionary decision of the Company; therefore, the Company reserves the absolute right to amend and/or discontinue Participant’s participation at any time without any liability to Participant.

 

Finally, Participant hereby declares that Participant does not reserve any action or right to bring any claim against the Company for any compensation or damages regarding any provision of the Plan or the benefits derived under the Plan, and Participant therefore grants a full and broad release to the Company, its Subsidiaries, branches, representation offices, its shareholders, officers, agents or legal representatives with respect to any claim that may arise.

 

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Términos y Condiciones

 

Reconocimiento del Contrato.   Al participar en el Plan, usted reconoce que ha recibido una copia del Plan, que ha revisado el Plan en su totalidad, y que entiende y acepta en su totalidad, todas y cada una de las disposiciones del Plan.  Asimismo reconoce que ha leído y aprueba expresamente los términos y condiciones señalados en el párrafo titulado Naturaleza de la Oferta en el Convenio, en lo que claramente se describe y establece lo siguiente: (i) su participación en el Plan no constituye un derecho adquirido; (ii) el Plan y su participación en el Plan son ofrecidos por la Compañía sobre una base completamente discrecional; (iii) su participación en el Plan es voluntaria; y (iv) la Compañía y sus Afiliadas no son responsables de ninguna por la disminución en el valor de la Opción ofrecida y/o las Acciones distribuidas bajo el Plan.

 

Política de Legislación Laboral y Reconocimiento.   Al participar en el Plan, usted reconoce expresamente que 3M Company, con oficinas registradas en 3M Center, St. Paul, Minnesota 55144, Estados Unidos de América, es la única responsable por la administración del Plan, y que su participación en el Plan, así como la adquisición de las Acciones, no constituye una relación laboral entre usted y la Compañía, debido a que usted participa en el plan sobre una base completamente mercantil.  Con base en lo anterior, usted reconoce expresamente que el Plan y los beneficios que pudiera obtener por su participación en el Plan, no establecen derecho alguno entre usted y la Compañía, y no forman parte de las condiciones y/o prestaciones laborales que la Compañía ofrece, y que las modificaciones al Plan o su terminación, no constituirán un cambio ni afectarán los términos y condiciones de su relación laboral.

 

Asimismo usted entiende que su participación en el Plan es el resultado de una decisión unilateral y discrecional de la Compañía; por lo tanto, la Compañía se reserva el derecho absoluto de modificar y/o suspender su participación en cualquier momento, sin que usted incurra en responsabilidad alguna.

 

Finalmente, usted declara que no se reserva acción o derecho alguno para interponer reclamación alguna en contra de la Compañía, por concepto de compensación o daños relacionados con cualquier disposición del Plan o de los beneficios derivados del Plan, y por lo tanto, usted libera total y ampliamente de toda responsabilidad a la Compañía, a sus Afiliadas, sucursales, oficinas de representación, sus accionistas, funcionarios, agentes o representantes legales, con respecto a cualquier reclamación que pudiera surgir.

 

MOROCCO

 

Terms and Conditions

 

Cash Settlement.  The Company reserves the right to restrict Participant from acquiring Shares at exercise of the Option.  Instead, the Company reserves the right to require the Employer to make a payment to Participant in cash or its equivalent of an amount equal to the difference between the value of Shares subject to the Option at exercise and the exercise price.  Any references to the issuance of Shares in any documents related to the Option shall not be applicable in these circumstances.  In addition, in these circumstances, Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply.

 

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NETHERLANDS

 

Terms and Conditions

 

Cash Settlement.  The Company reserves the right to restrict Participant from acquiring Shares at exercise of the Option.  Instead, the Company reserves the right to require the Employer to make a payment to Participant in cash or its equivalent of an amount equal to the difference between the value of Shares subject to the Option at exercise and the exercise price.  Any references to the issuance of Shares in any documents related to the Option shall not be applicable in these circumstances.  In addition, in these circumstances, Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply.

 

Notifications

 

 

NEW ZEALAND

 

Terms and Conditions

 

Shares Issued Upon Exercise.  Any Shares issued upon exercise of the Option shall be Shares acquired by the Company on the New York Stock Exchange or otherwise ( i.e., treasury shares).

 

NORWAY

 

There are no country-specific terms and conditions.

 

PAKISTAN

 

Terms and Conditions

 

Cash Settlement.  The Company reserves the right to restrict Participant from acquiring Shares at exercise of the Option.  Instead, the Company reserves the right to require the Employer to make a payment to Participant in cash or its equivalent of an amount equal to the difference between the value of Shares subject to the Option at exercise and the exercise price.  Any references to the issuance of Shares in any documents related to the Option shall not be applicable in these circumstances.  In addition, in these circumstances, Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply.

 

PANAMA

 

Terms and Conditions

 

Securities Law Notice.  The grant of the Option and the issuance of Shares at exercise are not subject to registration under Panamanian law as they are not intended for the public, but solely for Participant’s benefit.

 

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PERU

 

Terms and Conditions

 

Securities Law Notice. The grant of the Option is considered a private offering in Peru; therefore, it is not subject to registration in Peru.

 

Labor Law Acknowledgment.  By accepting the Option, Participant acknowledges that the Option is being granted ex gratia with the purpose of rewarding Participant.

 

PHILIPPINES

 

Terms and Conditions

 

Cash Settlement.  The Company reserves the right to restrict Participant from acquiring Shares at exercise of the Option.  Instead, the Company reserves the right to require the Employer to make a payment to Participant in cash or its equivalent of an amount equal to the difference between the value of Shares subject to the Option at exercise and the exercise price.  Any references to the issuance of Shares in any documents related to the Option shall not be applicable in these circumstances.  In addition, in these circumstances, Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply.

 

POLAND

 

Notifications

 

Foreign Asset/Account Reporting Information.   If Participant maintains bank or brokerage accounts holding cash and foreign securities (including Shares) outside of Poland, Participant will be required to report information to the National Bank of Poland on transactions and balances in such accounts if the value of such cash and securities exceeds a certain threshold.  If required, such reports must be filed on a quarterly basis on special forms available on the website of the National Bank of Poland.

 

Exchange Control Information.  The transfer of funds in excess of a certain amount into or out of Poland must be made through a bank account in Poland.  Participant understands that he or she is required to store all documents connected with any foreign exchange transactions for a period of five years, as measured from the end of the year in which such transaction occurred.

 

Participant should consult with his or her personal legal advisor to determine what he or she must do to fulfill any applicable reporting/exchange control duties.

 

PORTUGAL

 

Terms and Conditions

 

Consent to Receive Information in English.   Participant hereby expressly declares that Participant has full knowledge of the English language and has read, understood and fully accepted and agreed with the terms and conditions established in the Plan and Agreement.

 

Conhecimento da Lingua.  Por meio do presente, eu declaro expressamente que tem pleno conhecimento da língua inglesa e que li, compreendi e livremente aceitei e concordei com os termos e condições estabelecidas no Plano e no Acordo.

 

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ROMANIA

 

Notifications

 

Exchange Control Information.   Any transfer of funds exceeding a certain amount (whether via one transaction or several transactions that appear to be linked to each other) must be reported to the National Office for Prevention and Control of Money Laundering on specific forms by the relevant bank or financial institution.  If Participant deposits proceeds from the sale of Shares or the receipt of dividends in a bank account in Romania, Participant may be required to provide the Romanian bank assisting with the transaction with appropriate documentation explaining the source of the income.  Participant should consult with his or her legal advisor to determine whether Participant will be required to submit such documentation to the Romanian bank.

 

RUSSIA

 

Terms and Conditions

 

Cash Settlement.  The Company reserves the right to restrict Participant from acquiring Shares at exercise of the Option.  Instead, the Company reserves the right to require Participant’s Employer to make a payment to Participant in cash or its equivalent of an amount equal to the difference between the value of Shares subject to the Option at exercise and the Exercise Price.  Any references to the issuance of Shares in any documents related to the Option shall not be applicable in these circumstances.  In addition, in these circumstances, Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply.

 

Notifications

 

Securities Law Information.  This Agreement, the Plan and all other materials Participant may receive regarding participation in the Plan do not constitute advertising or an offering of securities in Russia.  Any issuance of Shares under the Plan has not and will not be registered in Russia and hence the Shares described in any Plan-related documents may not be offered or placed in public circulation in Russia. In no event will Shares issued to Participant under the Plan be delivered to Participant in Russia.

 

Exchange Control Information.  Under current exchange control regulations, Participant must repatriate the cash proceeds resulting from sale of the Shares acquired under the Plan to Russia.  Such proceeds must be initially credited to Participant through a foreign currency account opened in Participant’s name at an authorized bank in Russia.  After the funds are initially received in Russia, they may be further remitted to a foreign bank in accordance with Russian exchange control laws.  However, dividends can be held in a foreign currency account at a foreign individual bank account opened in certain countries (including the United States).

 

Participant is strongly advised to contact his or her personal advisor regarding his or her obligations resulting from participation in the Plan as significant penalties may apply in the case of non-compliance with exchange control requirement and because such exchange control requirements may change.

 

Foreign Asset/Account Reporting Information.  Russian residents will be required to notify the Russian tax authorities within one month of opening or closing a foreign bank account or of changing any account details.  Russian residents are also required to file with the Russian tax authorities reports of the transactions in their foreign bank accounts.  Participant should consult with his or her personal tax advisor for additional information about these reporting obligations.

 

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Anti-Corruption Information.  Anti-corruption laws prohibit certain public servants, their spouses and their dependent children from owning any foreign source financial instruments (e.g., shares of foreign companies such as the Company).  Accordingly, Participant should inform the Company if he or she is covered by these laws because Participant should not hold Shares acquired under the Plan.

 

Labor Law Information.  If Participant continues to hold Shares acquired at exercise of the Option after an involuntary Termination of Service, Participant may not be eligible to receive unemployment benefits in Russia.

 

SAUDI ARABIA

 

Terms and Conditions

 

Cash Settlement.  The Company reserves the right to restrict Participant from acquiring Shares at exercise of the Option.  Instead, the Company reserves the right to require the Employer to make a payment to Participant in cash or its equivalent of an amount equal to the difference between the value of Shares subject to the Option at exercise and the exercise price.  Any references to the issuance of Shares in any documents related to the Option shall not be applicable in these circumstances.  In addition, in these circumstances, Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply.

 

SINGAPORE

 

Terms and Conditions

 

Securities Law Notice.  The offer of the Plan, the grant of the Option, and the issuance of the underlying Shares at exercise are being made pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”).  The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore.  Participant should note that the Option is subject to section 257 of the SFA and Participant will not be able to make any subsequent offer to sell or sale of the Shares in Singapore, unless such offer or sale is made (1) after six (6) months from the Grant Date or (2) pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA.

 

Chief Executive Officer and Director Notification.  Participant understands and acknowledges that if Participant is the Chief Executive Officer (“ CEO ”), director, associate director or shadow director of a Singapore Subsidiary, Participant is subject to certain notification requirements under the Singapore Companies Act, regardless of whether Participant is a Singapore resident or employed in Singapore.  Among these requirements is an obligation to notify the Singapore Subsidiary in writing when Participant receives an interest (e.g., Options or Shares) in the Company.  In addition, Participant must notify the Singapore Subsidiary when Participant sells Shares (including when Participant sells Shares acquired under the Plan).  These notifications must be made within two days of acquiring or disposing of any interest in the Company.  In addition, a notification must be made of Participant’s interests in the Company within two days of becoming the CEO, director, associate director or shadow director.

 

SOUTH AFRICA

 

Terms and Conditions

 

Cash Settlement.  The Company reserves the right to restrict Participant from acquiring Shares at exercise of the Option.  Instead, the Company reserves the right to require the Employer to make a

 

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payment to Participant in cash or its equivalent of an amount equal to the difference between the value of Shares subject to the Option at exercise and the exercise price.  Any references to the issuance of Shares in any documents related to the Option shall not be applicable in these circumstances.  In addition, in these circumstances, Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply.

 

Notifications

 

Exchange Control Information.   Under current South African exchange control policy, Participant understands that if Participant is a South African resident, Participant may invest only a certain maximum amount per annum in offshore investments, including in Shares.  This limit does not apply to non-resident employees.  An annual discretionary allowance requires no prior authorization but Participant understands that Participant must obtain tax clearance for the amount exceeding the allowance up to the maximum threshold.  It is Participant’s responsibility to ensure that Participant not exceed this limit and obtain the necessary tax clearance for remittances exceeding the discretionary allowance.  This limit is a cumulative allowance; therefore, Participant’s ability to remit funds for a cash exercise will be reduced if Participant’s foreign investment limit is utilized to make a transfer of funds offshore that is unrelated to the Plan.  Participant acknowledge that if the limit will be exceeded as a result of a cash exercise under the Plan, Participant may still participate in the Plan; however, Participant will be required to immediately sell the Shares acquired under the Plan and repatriate the proceeds to South Africa in order to ensure that Participant not hold assets outside South Africa with a value in excess of the permitted offshore investment allowance amount.

 

SPAIN

 

Terms and Conditions

 

Labor Law Acknowledgment.  The following provision supplements Section 3.1 of the Award Agreement:

 

In accepting the Option, Participant acknowledges that Participant consents to participation in the Plan and has received a copy of the Plan.

 

Except as provided in the Agreement or in the Plan, a Termination of Service for any reason (including for the reasons listed below) will automatically result in the forfeiture of any unvested Option; in particular, Participant understands and agrees that, except as provided in the Agreement and the Plan, the Option will be forfeited without entitlement to the underlying Shares or to any amount as indemnification in the event of a Termination of Service prior to vesting by reason of, including, but not limited to, resignation, disciplinary dismissal with or without cause, individual or collective layoff with or without cause, material modification of employment under Article 41 of the Worker’s Statute, relocation under Article 40 of the Worker’s Statute, Article 50 of the Worker’s Statute, Article 10.3 of Royal Decree 1382/1985 and unilateral withdrawal by the Employer.

 

Furthermore, Participant understands that the Company has unilaterally, gratuitously, and in its sole discretion decided to grant options under the Plan to individuals who may be Employees throughout the world.  The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not bind the Company or any Subsidiary, other than to the extent set forth in the Agreement.  Consequently, Participant understands that the Option is offered on the assumption and condition that the Option and any Shares acquired under the Plan are not part of any employment contract (either with the Company or any Subsidiary), and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation), or any other right whatsoever.  In addition, Participant

 

A- 25

 

understands that this offer would not be made but for the assumptions and conditions referred to above; thus, Participant acknowledges and freely accepts that, should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any grant of or right to the Option shall be null and void.

 

Notifications

 

Securities Law Information. The Option does not qualify under Spanish regulations as securities.  No “offer of securities to the public”, as defined under Spanish law, has taken place or will take place in the Spanish territory. The Agreement has not been nor will it be registered with the Comisión Nacional del Mercado de Valores , and does not constitute a public offering prospectus.

 

Exchange Control Information.  Participant must declare the acquisition, ownership and disposition of stock in a foreign company (including Shares acquired under the Plan) to the Spanish Dirección General de Comercio e Inversiones (the “ DGCI ”), the Bureau for Commerce and Investments, which is a department of the Ministry of Economy and Competitiveness, for statistical purposes.  Participant must also declare ownership of any Shares by filing a Form D-6 with the Directorate of Foreign Transactions each January while the Shares are owned.  In addition, the sale of Shares must also be declared on Form D-6 filed with the DGCI in January, unless the sale proceeds exceed the applicable threshold, or Participant holds 10% or more of the share capital of the Company or other such amount that would entitle Participant to join the Board, in which case the filing is due within one month after the sale.

 

Foreign Asset/Account Reporting Information.  Participant is required to electronically declare to the Bank of Spain any security accounts (including brokerage accounts held abroad), as well as the securities (including Shares acquired under the Plan) held in such accounts, and any transactions carried out with non-residents, if the value of the transactions for all such accounts during the prior year or the balances in such accounts as of December 31 of the prior year exceeds a certain threshold.  More frequent reporting is required if such transaction value or account balance exceeds a higher threshold.  If neither the total balances nor the total transactions with non-residents during the relevant period exceeds a separate threshold, a summarized form of declaration may be used.

 

In addition, to the extent Participant holds Shares and/or has bank accounts outside of Spain with a value in excess of a certain amount (for each type of asset) as of December 31, Participant will be required to report information on such assets on his or her tax return for such year.  After such Shares and/or accounts are initially reported, the reporting obligation will apply for subsequent years only if the value of any previously reported Shares or accounts increases by more than a certain amount as of each subsequent December 31.

 

SRI LANKA

 

Terms and Conditions

 

Cash Settlement.  The Company reserves the right to restrict Participant from acquiring Shares at exercise of the Option.  Instead, the Company reserves the right to require the Employer to make a payment to Participant in cash or its equivalent of an amount equal to the difference between the value of Shares subject to the Option at exercise and the exercise price.  Any references to the issuance of Shares in any documents related to the Option shall not be applicable in these circumstances.  In addition, in these circumstances, Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply.

 

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SWEDEN

 

There are no country-specific terms and conditions.

 

SWITZERLAND

 

Terms and Conditions

 

Securities Law Notice.  The grant of the Option is not intended to be a public offer in Switzerland.  Because this is a private offering in Switzerland, the Shares are not subject to registration in Switzerland.  Neither this document nor any materials relating to the Shares constitute a prospectus as such term is understood pursuant to article 652a of the Swiss Code of Obligations, and neither this document nor any materials relating to the Shares may be publicly distributed or otherwise made publicly available in Switzerland.  Neither this document no any other offering or marketing material relating to the Option has been or will be filed with, approved or supervised by any Swiss regulatory authority (in particular, the Swiss Financial Supervisory Authority (FINMA)).

 

TAIWAN

 

Terms and Conditions

 

Securities Law Notice .  The offer of participation in the Plan is available only for Employees.  The offer of participation in the Plan is not a public offer of securities by a Taiwanese company.

 

Data Privacy.  The following provision supplements Section 3.3 of the Award Agreement:

 

Participant hereby acknowledges having read and understood the terms regarding the collection, processing and transfer of Data contained in Section 3.3 of the Award Agreement and, by participating in the Plan, agrees to such terms.  In this regard, upon request of the Company or the Employer, Participant agrees to provide any executed data privacy consent form (or any other agreements or consents that may be required by the Employer or the Company) that the Company and/or the Employer may deem necessary under applicable data privacy laws, either now or in the future.  Participant understands that he or she will not be able to participate in the Plan if he or she fails to execute any such consent or agreement.

 

Notifications

 

Exchange Control Information.  Taiwanese residents may acquire and remit foreign currency (including proceeds from the sale of Shares) into and out of Taiwan up to a certain amount per year.  Participant understands that if he or she is a Taiwanese resident, and the transaction amount is exceeds a certain amount in a single transaction, Participant may need to submit a foreign exchange transaction form and provide supporting documentation to the satisfaction of the remitting bank.

 

THAILAND

 

Notifications

 

Exchange Control Information .  If Participant remits funds out of Thailand to exercise the Option, it is Participant’s responsibility to comply with applicable exchange control laws.  Under current exchange control regulations, Participant may remit funds out of Thailand up to a certain amount per year to purchase Shares (and otherwise invest in securities abroad) by submitting an application to an authorized

 

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agent, ( i.e. , a commercial bank authorized by the Bank of Thailand to engage in the purchase, exchange and withdrawal of foreign currency).  The application includes the Foreign Exchange Transaction Form, a letter describing the Option, a copy of the Plan and related documents, and evidence showing the nexus between the Company and the Employer.  If Participant uses a method of exercise that does not involve remitting funds out of Thailand, this requirement does not apply.

 

Further, Participant acknowledges that he or she is required to immediately repatriate the proceeds from the sale of Shares or from any dividends paid on such Shares to Thailand if the funds received in a single transaction exceed a certain threshold.  Participant also will be required to either convert such repatriated proceeds to Thai Baht or deposit the proceeds into a foreign currency deposit account within 360 days of repatriation.  Participant must specifically report the inward remittance to the Bank of Thailand on a foreign exchange transaction form.  If Participant fails to comply with these obligations, Participant may be subject to penalties assessed by the Bank of Thailand.  Participant acknowledges that he or she should consult his or her personal legal advisor prior to taking any action with respect to remittance of proceeds related to the Plan into Thailand.  Participant is responsible for ensuring compliance with all exchange control laws in Thailand.

 

TRINIDAD AND TOBAGO

 

Terms and Conditions

 

Cash Settlement.  The Company reserves the right to restrict Participant from acquiring Shares at exercise of the Option.  Instead, the Company reserves the right to require the Employer to make a payment to Participant in cash or its equivalent of an amount equal to the difference between the value of Shares subject to the Option at exercise and the exercise price.  Any references to the issuance of Shares in any documents related to the Option shall not be applicable in these circumstances.  In addition, in these circumstances, Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply.

 

TURKEY

 

Terms and Conditions

 

Securities Law Notice.  Under Turkish law, Participant is not permitted to sell any Shares acquired under the Plan in Turkey.  The Shares are currently traded on the New York Stock Exchange, which is located outside of Turkey, under the ticker symbol “MMM” and the Shares may be sold through this exchange.

 

Financial Intermediary Obligation.  Participant acknowledges that any activity related to investments in foreign securities ( e.g., the sale of Shares) should be conducted through a bank or financial intermediary institution licensed by the Turkey Capital Markets Board and should be reported to the Turkish Capital Markets Board.  Participant is solely responsible for complying with this requirement and should consult with a personal legal advisor for further information regarding any obligations in this respect.

 

UNITED ARAB EMIRATES

 

Terms and Conditions

 

Securities Law Notice.  The Option is granted under the Plan only to select Employees and is in the nature of providing employee equity incentives in the United Arab Emirates.  The Plan and the Agreement are intended for distribution only to such Employees and must not be delivered to, or relied on by, any other person.  Prospective purchasers of the securities offered should conduct their own due

 

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diligence on the securities.  If Participant does not understand the contents of the Plan and the Agreement, Participant should consult an authorized financial adviser.  The Emirates Securities and Commodities Authority has no responsibility for reviewing or verifying any documents in connection with the Plan.  Neither the Ministry of Economy nor the Dubai Department of Economic Development have approved the Plan or the Agreement nor taken steps to verify the information set out herein, and have no responsibility for such documents.

 

UNITED KINGDOM

 

Terms and Conditions

 

Responsibility for Taxes.   This provision supplements Sections 2.3 and 2.4 of the Award Agreement:

 

If payment or withholding of the income tax due in connection with the Option is not made within ninety (90) days of the end of the tax year in which the event giving rise to the income tax liability occurs or such other period specified in Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003 (the “ Due Date ”), the amount of any uncollected income tax will constitute a loan owed by Participant to the Employer, effective on the Due Date.  Participant agrees that the loan will bear interest at the then-current Official Rate of Her Majesty’s Revenue and Customs (“ HMRC ”), it will be immediately due and repayable, and the Company or the Employer may recover it at any time thereafter by any of the withholding methods referred to in Section 2.4 of the Award Agreement.

 

Notwithstanding the foregoing, if Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the Act), Participant will not be eligible for such a loan to cover the income tax liability.  In the event that Participant is such a director or executive officer and the income tax is not collected from or paid by Participant by the Due Date, the amount of any uncollected income tax may constitute a benefit to Participant on which additional income tax and national insurance contributions may be payable.  Participant is responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying the Company or the Employer (as applicable) for the value of any employee national insurance contribution due on this additional benefit, which may be collected from Participant by any of the withholding methods referred to in Section 2.4 of the Award Agreement.

 

VENEZUELA

 

Terms and Conditions

 

Securities Law Notice.  The grant of the Option is personal, private, exclusive and non-transferable and does not constitute a public offering under local law.

 

VIETNAM

 

Terms and Conditions

 

Cash Settlement.  The Company reserves the right to restrict Participant from acquiring Shares at exercise of the Option.  Instead, the Company reserves the right to require the Employer to make a payment to Participant in cash or its equivalent of an amount equal to the difference between the value of Shares subject to the Option at exercise and the exercise price.  Any references to the issuance of Shares in any documents related to the Option shall not be applicable in these circumstances.  In addition, in these circumstances, Section 2.2(b) of the Award Agreement and Section 5.4(b) of the Plan shall not apply.

 

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Exhibit 10.3

 

3M COMPANY
2016 LONG-TERM INCENTIVE PLAN

 

STOCK APPRECIATION RIGHT AWARD AGREEMENT

 

Pursuant to the 3M Company 2016 Long-Term Incentive Plan (as amended from time to time, the “ Plan ”), 3M Company (the “ Company ”) granted to the participant listed below (“ Participant ”) the stock appreciation right described below (the “ SAR ”).  The SAR is subject to the terms and conditions set forth in this Stock Appreciation Right Award Agreement, any special terms and conditions for Participant’s country set forth in Appendix A hereto (the “ Appendix ”) and the Plan.  This Stock Appreciation Right Award Agreement and the Appendix are referred to, collectively, as this “ Agreement .”  The Plan and the Appendix are incorporated into this Stock Appreciation Right Award Agreement by reference.

 

Participant:
Grant Date:
Exercise Price per Share:		US$
Shares Subject to the SAR:
Final Expiration Date:
Vesting Schedule:		Subject to the terms and conditions of this Agreement and the Plan, the SAR shall vest and become exercisable as follows:
		Vesting Date		Percentage of Shares  Subject to the SAR Becoming  Vested and Exercisable
		[Vesting terms to be determined.]
		Except as provided in Sections 1.2 and 1.5 of this Stock Appreciation right Award Agreement, in the Appendix, or as otherwise provided by the Administrator, in no event shall any unvested portion of the SAR vest and become exercisable following Participant’s Termination of Service.

 

ELECTRONIC ACCEPTANCE OF AWARD:

 

By clicking on the “ ACCEPT ” box on the “Grant Terms and Agreement” page, you agree to be bound by the terms and conditions of this Agreement and the Plan.  You acknowledge that you have reviewed and fully understand all of the provisions of this Agreement and the Plan, and have had the opportunity to obtain advice of counsel prior to accepting the grant of the SAR pursuant to this Agreement.  You hereby agree to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or relating to the SAR.

 

 

ARTICLE I.
PERIOD OF EXERCISABILITY

 

1.1                                Commencement of Exercisability .  The SAR will vest and become exercisable according to the vesting schedule set forth above (the “ Vesting Schedule ”), except that any fraction of a Share as to which the SAR would be vested or exercisable will be accumulated and will vest and become exercisable only when a whole Share has accumulated.  Except as otherwise provided by the Administrator (or its delegate) or as otherwise provided for in the Plan or this Agreement with respect to Participant’s Termination of Service by reason of Participant’s Disability[ or Retirement], the SAR will immediately expire and be forfeited as to any portion that is not vested and exercisable as of Participant’s Termination of Service.

 

For purposes of this Article I, the term “ Disability ” shall have the meaning given to such term in Treasury Regulation section 1.409A-3(i)(4).

 

1.2                                Special Vesting Provisions .  Notwithstanding anything to the contrary in Section 1.1 or the Vesting Schedule, the SAR shall continue to vest and become exercisable, or vest and become exercisable on an accelerated basis, under the following circumstances:

 

(a)                                  If Participant’s Termination of Service occurs by reason of Participant’s Disability[ or Retirement], the SAR shall continue to vest and become exercisable pursuant to the Vesting Schedule, as if Participant had not incurred a Termination of Service, subject to accelerated vesting pursuant to clause (b) of this Section 1.2.  [Notwithstanding the preceding sentence, if the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in Participant’s jurisdiction that likely would result in the favorable Retirement treatment that otherwise would apply to the SAR pursuant to this Section 1.2(a) being deemed unlawful and/or discriminatory, then the Company will not apply this favorable Retirement treatment at the time of Participant’s Termination of Service and the SAR will be treated as it would under the rules that otherwise would have applied if Participant’s Termination of Service did not qualify as a Retirement.]

 

(b)                                  If Participant’s Termination of Service occurs by reason of death or Participant dies following the date of Participant’s Termination of Service by reason of Participant’s Disability[ or Retirement], the SAR shall vest and become fully exercisable as of the date of death.

 

1.3                                Duration of Exercisability .  The Vesting Schedule is cumulative.  Any portion of the SAR which vests and becomes exercisable will remain vested and exercisable until the termination of the SAR.  The SAR will be forfeited immediately upon its termination.

 

1.4                                Termination of SAR .  The SAR may not be exercised to any extent by anyone after, and will terminate and cease to be exercisable on, the first of the following to occur:

 

(a)                                  The Final Expiration Date set forth on the first page of this Agreement;

 

(b)                                  The expiration of ninety (90) days following the date of Participant’s Termination of Service, unless Participant’s Termination of Service is for Misconduct or by reason of Participant’s death, Disability[ or Retirement];

 

(c)                                   The expiration of two (2) years following the date of Participant’s death (whether such death occurs before or after Participant’s Termination of Service); or

 

2

 

(d)                                  The execution of a written determination by the Administrator or an authorized representative of the Company that Participant engaged in an act of Misconduct (whether the execution of such written determination occurs before or after Participant’s Termination of Service).

 

1.5                                Effect of Change in Control .  Notwithstanding anything to the contrary in the Vesting Schedule or Sections 1.1 through 1.4 (except Section 1.4(a), which shall remain applicable), in the event of a Change in Control, the following provisions shall apply:

 

(a)                                  In the event of Participant’s Termination of Service (i) by the Company or any Subsidiary other than as a result of Participant’s Misconduct or (ii) by Participant for Good Reason, in either case, within eighteen (18) months following a Change in Control, the SAR shall become fully exercisable as of the date of such Termination of Service and shall expire on the first to occur of (x) the Final Expiration Date and (y) the date that is six (6) months following such Termination of Service.

 

(b)                                  In the event that the SAR is not assumed or continued, or an equivalent award substituted for the SAR, by the successor corporation or a parent or subsidiary of the successor corporation in a Change in Control, the SAR shall become fully vested and exercisable immediately prior to the consummation of such Change in Control and shall remain outstanding until the Change in Control, subject to the Administrator’s discretion to take any action with respect to the SAR permitted under the Plan.

 

For purposes of this Section 1.5, “ Good Reason ” means (i) a material diminution in Participant’s position, authority, duties or responsibilities as in effect immediately prior to the Change in Control, (ii) a material diminution in Participant’s base salary or annual planned cash compensation, or (iii) a material change in the geographic location at which Participant is required to perform services for the Company or its Subsidiaries.

 

ARTICLE II.
EXERCISE OF SAR

 

2.1                                Person Eligible to Exercise .  During the life of Participant, only Participant or a permitted transferee may exercise the SAR. References to Participant, to the extent relevant in the context, will include references to any such transferee approved by the Administrator pursuant to the Plan. After Participant’s death, any exercisable portion of the SAR may, prior to the time the SAR expires, be exercised by Participant’s Designated Beneficiary to the extent permitted by the Company in accordance with the terms of the Plan.

 

2.2                                Exercise .

 

(a)                                  Any exercisable portion of the SAR or the entire SAR, if then wholly exercisable, may be exercised, in whole or in part, according to the procedures in the Plan at any time prior to the time the SAR or portion thereof expires, except that the SAR may only be exercised with respect to whole Shares.

 

(b)                                  Participant acknowledges that, except as otherwise provided in the Appendix or determined by the Administrator, the SAR may be exercised automatically immediately prior to the expiration of its full term under certain circumstances as set forth in Section 5.4(b) of the Plan.

 

2.3                                Settlement of SAR .  Upon exercise of all or a specified portion of the SAR, Participant (or such other person entitled to exercise the SAR pursuant to this Agreement and the Plan) shall be entitled to receive from the Company cash in the amount (the “ SAR Amount ”) determined by multiplying (a) the

 

3

 

amount (if any) by which the Fair Market Value per Share on the date of exercise of the SAR exceeds the exercise price per Share of the SAR, by (b) the number of Shares with respect to which the SAR is exercised.  The SAR Amount shall be paid within thirty (30) days following the date of exercise.

 

2.4                                Responsibility for Taxes .

 

(a)                                  Participant acknowledges that, regardless of any action taken by the Company or, if different, Participant’s employer (the “ Employer ”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items related to Participant’s participation in the Plan and legally applicable to Participant or deemed by the Company or the Employer in its discretion to be an appropriate charge to Participant even if legally applicable to the Company or the Employer (“ Tax-Related Items ”) is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the SAR, including, but not limited to, the grant, vesting or exercise of the SAR; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the SAR to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result.  Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

 

(b)                                  Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to assist the Company and/or the Employer in satisfying any applicable withholding obligations for Tax-Related Items.  In this regard, the Company and/or the Employer, or their respective agents, at their discretion, may satisfy, or allow Participant to satisfy, the withholding obligation with regard to all Tax-Related Items by any of the following, or a combination thereof:

 

(i)                                      By cash, check or wire transfer of immediately available funds; provided that the Company may limit the use of one of the foregoing methods if one or more of the methods below is permitted;

 

(ii)                                   By the deduction of such amount from the SAR Amount;

 

(iii)                                By the deduction of such amount from compensation payable to Participant.

 

(c)                                   The Company and/or the Employer has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment of any tax withholding with regard to all Tax-Related Items as Participant’s election to satisfy all or a part of the tax withholding pursuant to Section 2.4(ii) or (iii) above, or a combination of such sections.

 

(d)                                  Depending on the withholding method, the Company and/or the Employer may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates, in which case Participant may receive a refund of any over-withheld amount in cash through the Employer’s normal payroll processes.

 

(d)                                  Finally, Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means previously described.

 

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The Company may refuse to honor the exercise of the SAR and/or refuse to deliver the SAR Amount if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.

 

ARTICLE III.
OTHER PROVISIONS

 

3.1                                Nature of Grant .  In accepting the SAR, Participant understands, acknowledges, and agrees that:

 

(a)                                  the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time in accordance with its terms;

 

(b)                                  the grant of the SAR is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of stock appreciation rights, or benefits in lieu of stock appreciation rights, even if stock appreciation rights have been granted in the past;

 

(c)                                   all decisions with respect to future stock appreciation rights or other grants, if any, will be at the sole discretion of the Administrator;

 

(d)                                  the SAR grant and participation in the Plan shall not create a right to employment or be interpreted as forming or amending an employment or service contract with the Company, the Employer, or any other Subsidiary and shall not interfere with the ability of the Company, the Employer or any other Subsidiary, as applicable, to terminate Participant’s employment or service relationship (if any) at any time with or without cause;

 

(e)                                   Participant is voluntarily participating in the Plan;

 

(f)                                    the SAR, and the income and value of same, are not intended to replace any pension rights or compensation;

 

(g)                                   the SAR, and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits, welfare benefits or other similar payments;

 

(h)                                  the future value of the Shares underlying the SAR is unknown, indeterminable and cannot be predicted with certainty;

 

(i)                                      if the underlying Shares do not increase in value, the SAR will have no value;

 

(j)                                     no claim or entitlement to compensation or damages shall arise from forfeiture of the SAR resulting from Participant’s Termination of Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any);

 

(k)                                  for purposes of this SAR, Termination of Service will be deemed to have occurred as of the date Participant is no longer actively providing services to the Company or any of its Subsidiaries (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any), and unless otherwise expressly provided in this Agreement

 

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or determined by the Administrator, (i) Participant’s right to vest in the SAR, if any, will terminate as of such date and will not be extended by any notice period (e.g., Participant’s period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any); and (ii) the period (if any) during which Participant may exercise the SAR after such Termination of Service will commence on the date Participant ceases to actively provide services and will not be extended by any notice period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any; the Administrator shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of the SAR (including whether Participant may still be considered to be providing services while on a leave of absence);

 

(l)                                      unless otherwise agreed with the Company, the SAR, and the income and value of same, are not granted as consideration for, or in connection with, any services Participant may provide as a director of a Subsidiary;

 

(m)                              unless otherwise provided in the Plan or by the Administrator, the SAR and the benefits evidenced by this Agreement do not create any entitlement to have the SAR or any such benefits transferred to, or assumed by, another company, nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Common Stock;

 

(n)                                  the following provision shall not apply to Employees in the State of California: In consideration of the grant of the SAR, and to the extent permitted by Applicable Law, Participant agrees not to institute any claim against the Company, the Employer, or any other Subsidiary, to waive Participant’s ability, if any, to bring such claim, and release the Company, the Employer, and any other Subsidiary from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed (i) not to pursue such claim and (ii) to execute any and all documents necessary to request dismissal or withdrawal of such claim; and

 

(o)                                  the following provisions apply if Participant is providing services outside the United States:

 

(i)                                      the SAR, and the income and value of same, are not part of normal or expected compensation or salary for any purpose; and

 

(ii)                                   neither the Company, the Employer nor any other Subsidiary shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the SAR or any amounts due to Participant pursuant to the exercise of the SAR.

 

3.2                                No Advice Regarding Grant .  The Company is not providing any tax, legal or financial advice, nor is the Company making recommendations regarding participation in the Plan.  Participant understands and agrees that Participant should consult with Participant’s own personal tax, legal and financial advisors regarding participation in the Plan before taking any action related to his or her Award(s).

 

3.3                                Data Privacy .   Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other SAR grant materials by and among, as applicable, the Employer, the Company and its Subsidiaries for the purpose of implementing, administering and managing the Plan.

 

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Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address, email address and telephone number, date of birth, passport, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all stock options, stock appreciation rights , restricted stock units or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

 

Participant understands that Data will be transferred to Fidelity Investments, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan.  Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country.  Participant understands that if Participant resides outside the United States Participant may request a list with the names and addresses of any potential recipients of the Data by contacting Participant’s local human resources representative.  Participant authorizes the Company, Fidelity Investments and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purpose of implementing, administering and managing the Plan.  Participant understands that Data will be held only as long as is necessary to implement, administer and manage the Plan.  Participant understands that if Participant resides outside the United States, Participant may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant’s local human resources representative.  Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis.  If Participant does not consent, or if Participant later seeks to revoke Participant’s consent, Participant’s employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company may not be able to grant stock appreciation rights or other equity-based awards to Participant or administer or maintain such awards.  Therefore, Participant understands that refusing or withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan.  For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that Participant may contact Participant’s local human resources representative.

 

3.4                                Transferability .  The SAR is not transferable, except by will or the laws of descent and distribution or as permitted by the Administrator in accordance with the terms of the Plan.

 

3.5                                Adjustments .  Participant acknowledges that the SAR is subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

 

3.6                                Defined Terms; Titles .  Capitalized terms not defined in this Agreement have the meanings given to them in the Plan.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

3.7                                Conformity to Applicable Laws .  Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.

 

3.8                                Successors and Assigns .  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors

 

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and assigns of the Company.  Subject to the transfer provisions set forth in the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

3.9                                Entire Agreement and Imposition of Other Terms .  The Plan and this Agreement (including all exhibits and appendices hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.  Nonetheless, the Company reserves the right to impose other requirements on Participant’s participation in the Plan and on the SAR, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

 

3.10                         Severability .  In the event that any provision of this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of this Agreement.

 

3.11                         Waiver .  Participant acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Participant or any other person.

 

3.12                         Limitation on Participant’s Rights .  Participation in the Plan confers no rights or interests other than as herein provided.  Specifically, Participant acknowledges that Participant does not have any of the rights or privileges of a stockholder of the Company by reason of the award of the SAR and is entitled only to a cash payment upon exercise of the SAR.  This Agreement creates a contractual arrangement between the Company and Participant only and shall not be construed as creating a trust for the benefit of Participant.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the SAR, and rights no greater than the right to receive cash as a general unsecured creditor with respect to the SAR, as and when exercised pursuant to the terms hereof.

 

3.13                         Electronic Delivery and Acceptance .  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

3.14                         Language . If Participant receives this Agreement or any other document relating to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.

 

3.15                         Foreign Asset/Account and Exchange Control and Tax Reporting . Participant acknowledges that, depending on Participant’s country, Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the acquisition, holding and/or transfer of cash derived from participation in the Plan, in, to and/or from a brokerage/bank account or legal entity located outside Participant’s country.  The Applicable Laws of Participant’s country may require that Participant report such accounts, assets, the balances therein, the value thereof and/or the transactions related thereto to the applicable authorities in such country.  Participant acknowledges that Participant is responsible for ensuring compliance with any applicable foreign asset/account, exchange

 

8

 

control and tax reporting requirements and should consult Participant’s personal legal advisor on these matters.

 

3.16                         Appendix .  Notwithstanding any provisions in this Stock Appreciation Right Award Agreement, the SAR shall be subject to any special terms and conditions set forth in the Appendix.  Specifically, in the event Participant resides or relocates to one of the countries included in the Appendix, the terms and conditions for such country will apply to Participant to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.  The Appendix constitutes a part of this Stock Appreciation Right Award Agreement.

 

3.17                         Governing Law and Venue .  This Agreement and the SAR will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding the choice-of-law principles of the State of Delaware and any other state requiring the application of a jurisdiction’s laws other than the State of Delaware. For purposes of litigating any dispute concerning the grant of the SAR or this Agreement, Participant consents to the jurisdiction of the State of Minnesota and agrees that such litigation shall be conducted in the courts of Ramsey County, Minnesota, or the federal courts for the United States for the District of Minnesota, where this grant is made and/or to be performed.

 

* * * * *

 

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APPENDIX A

TO
STOCK APPRECIATION RIGHT AWARD AGREEMENT

 

Certain capitalized terms used but not defined in this Appendix A have the meanings set forth in the Stock Appreciation Right Award Agreement (the “ Award Agreement ”) or, if not defined therein, the Plan.

 

Terms and Conditions

 

This Appendix includes additional terms and conditions that govern the SAR granted to Participant under the Plan if Participant resides in one of the countries listed below.  If Participant is a citizen or resident of a country other than the one in which Participant resides, is considered a resident of another country for local law purposes or transfers employment and/or residency between countries after the Grant Date, the Company shall determine, in its sole discretion, to what extent the terms and conditions contained herein shall apply to Participant.

 

Notifications

 

This Appendix also includes information regarding exchange controls and certain other issues of which Participant should be aware with respect to Participant’s participation in the Plan.  The information is based on the securities, exchange control and other laws in effect in the respective countries as of April 2016.  Such laws are often complex and change frequently.  As a result, the Company strongly recommends that Participant not rely on the information in this Appendix as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may become out of date in the future.

 

In addition, the information contained herein is general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result.  Accordingly, Participant is advised to seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to Participant’s situation.

 

Finally, if Participant is a citizen or resident of a country other than the one in which Participant is currently working, transfers employment and/or residency to another country after the Grant Date, or is considered a resident of another country for local law purposes, the information contained herein may not be applicable to Participant.

 

AUSTRALIA

 

There are no country-specific terms and conditions.

 

INDIA

 

Terms and Conditions

 

Settlement of SAR.  The following provision supplements Section 2.3 of the Award Agreement:

 

The SAR Amount due to Participant upon exercise of the SAR shall be paid by the Employer through local payroll.

 

 

MOROCCO

 

Terms and Conditions

 

Settlement of SAR.  The following provision supplements Section 2.3 of the Award Agreement:

 

The SAR Amount due to Participant upon exercise of the SAR shall be paid by the Employer through local payroll.

 

NETHERLANDS

 

Terms and Conditions

 

Settlement of SAR.  The following provision supplements Section 2.3 of the Award Agreement:

 

The SAR Amount due to Participant upon exercise of the SAR shall be paid by the Employer through local payroll.

 

PAKISTAN

 

There are no country-specific terms and conditions..

 

PHILIPPINES

 

There are no country-specific terms and conditions.

 

RUSSIA

 

Terms and Conditions

 

Settlement of SAR.  The following provision supplements Section 2.3 of the Award Agreement:

 

The SAR Amount due to Participant upon exercise of the SAR shall be paid by the Employer through local payroll.

 

SAUDI ARABIA

 

There are no country-specific terms and conditions.

 

SOUTH AFRICA

 

Terms and Conditions

 

Settlement of SAR.  The following provision supplements Section 2.3 of the Award Agreement:

 

The SAR Amount due to Participant upon exercise of the SAR shall be paid by the Employer through local payroll.

 

A- 2

 

SRI LANKA

 

Terms and Conditions

 

Settlement of SAR.  The following provision supplements Section 2.3 of the Award Agreement:

 

The SAR Amount due to Participant upon exercise of the SAR shall be paid by the Employer through local payroll.

 

TRINIDAD AND TOBAGO

 

Terms and Conditions

 

Settlement of SAR.  The following provision supplements Section 2.3 of the Award Agreement:

 

The SAR Amount due to Participant upon exercise of the SAR shall be paid by the Employer through local payroll.

 

VIETNAM

 

Terms and Conditions

 

Settlement of SAR.  The following provision supplements Section 2.3 of the Award Agreement:

 

The SAR Amount due to Participant upon exercise of the SAR shall be paid by the Employer through local payroll.

 

A- 3

Exhibit 10.4

 

3M COMPANY
2016 LONG-TERM INCENTIVE PLAN

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

Pursuant to the 3M Company 2016 Long-Term Incentive Plan (as amended from time to time, the “ Plan ”), 3M Company (the “ Company ”) granted to the participant listed below (“ Participant ”) the restricted stock units described below (the “ RSUs ”).  The RSUs are subject to the terms and conditions set forth in this Restricted Stock Unit Award Agreement, any special terms and conditions for Participant’s country set forth in Appendix A hereto (the “ Appendix ”) and the Plan.  This Restricted Stock Unit Award Agreement and the Appendix are referred to, collectively, as this “ Agreement .”  The Plan and the Appendix are incorporated into this Stock Option Award Agreement by reference.

 

Participant:
Grant Date:
Number of RSUs:
Vesting Schedule:		Subject to the terms and conditions of this Agreement and the Plan, the RSUs shall vest as follows:
		Vesting Date		Percentage of  Total Number of RSUs  Becoming Vested
		[Vesting terms to be determined.]
		For purposes of this Agreement, the date on which an RSU vests pursuant to the schedule set forth above shall be referred to as its “ Scheduled Vesting Date ”.
		Except as provided in Sections 1.3 and 1.5 of this Restricted Stock Unit Award Agreement, in the Appendix, or as otherwise provided by the Administrator, in no event shall the RSUs vest following Participant’s Termination of Service.

 

ELECTRONIC ACCEPTANCE OF AWARD:

 

By clicking on the “ ACCEPT ” box on the “ Grant Terms and Agreement ” page, you agree to be bound by the terms and conditions of this Agreement and the Plan.  You acknowledge that you have reviewed and fully understand all of the provisions of this Agreement and the Plan, and have had the opportunity to obtain advice of counsel prior to accepting the grant of the RSUs pursuant to this Agreement.  You hereby agree to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or relating to the RSUs.

 

 

ARTICLE I.
AWARD; VESTING; FORFEITURE AND SETTLEMENT

 

1.1                          RSUs and Dividend Equivalents .

 

(a)                                  Each RSU represents the right to receive one Share on the terms, and subject to the conditions, set forth in this Agreement.  Participant will have no right to the distribution of any Shares until the time (if ever) the RSUs have vested.

 

(b)                                  The Company hereby grants to Participant, with respect to each RSU, a Dividend Equivalent for ordinary cash dividends paid to substantially all holders of outstanding Shares with a record date after the Grant Date and prior to the date the applicable RSU is settled, forfeited or otherwise expires.  Each Dividend Equivalent entitles Participant to receive the equivalent value of any such ordinary cash dividends paid on a single Share.  The Company will establish a separate Dividend Equivalent bookkeeping account (a “ Dividend Equivalent Account ”) for each Dividend Equivalent and credit the Dividend Equivalent Account (without interest) on the applicable dividend payment date with the amount of any such cash paid.

 

For purposes of this Article I, the term “ Disability ” shall have the meaning given to such term in Treasury Regulation section 1.409A-3(i)(4).

 

1.2                          Vesting; Forfeiture .  The RSUs will vest according to the vesting schedule set forth above (the “ Vesting Schedule ”), except that any fraction of an RSU that would otherwise be vested will be accumulated and will vest only when a whole RSU has accumulated. Except as otherwise provided by the Administrator (or its delegate) or as otherwise provided for in the Plan[ or this Agreement with respect to Participant’s Termination of Service by reason of Participant’s Retirement], the RSUs will immediately and automatically be cancelled and forfeited as to any portion that is not vested as of Participant’s Termination of Service.  In addition, the RSUs will immediately and automatically be cancelled and forfeited (including any portion that is then vested) upon the execution of a written determination by the Administrator or an authorized representative of the Company that Participant engaged in an act of Misconduct (whether the execution of such written determination occurs before or after Participant’s Termination of Service).  Dividend Equivalents (including any Dividend Equivalent Account balance) will vest or be forfeited, as applicable, upon the vesting or forfeiture of the RSU with respect to which the Dividend Equivalent (including the Dividend Equivalent Account) relates.

 

1.3                          Special Vesting Provisions .  Notwithstanding anything to the contrary in Section 1.2 or the Vesting Schedule, the RSUs shall continue to vest, or vest on an accelerated basis, under the following circumstances (provided that none of the following events shall constitute the “Scheduled Vesting Date” for purposes of this Agreement):

 

(a)                                  [If Participant’s Termination of Service occurs by reason of Participant’s Retirement, the RSUs shall remain eligible to vest on the Scheduled Vesting Date as if Participant had not incurred a Termination of Service, subject to accelerated vesting pursuant to Section 1.3(b) and Section 1.5.  Notwithstanding the preceding sentence, if the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in Participant’s jurisdiction that likely would result in the favorable Retirement treatment that otherwise would apply to the RSUs pursuant to this Section 1.3(a) being deemed unlawful and/or discriminatory, then the Company will not apply this favorable Retirement treatment at the time of Participant’s Termination of Service and the RSUs will be treated as they would under the rules that otherwise would have applied if Participant’s Termination of Service did not qualify as a Retirement.]

 

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(b)                                  If Participant’s Termination of Service occurs by reason of death or Disability or Participant dies[ or incurs a Disability following the date of Participant’s Termination of Service by reason of Retirement], the RSUs shall fully vest as of the date of death or Disability, as applicable.

 

1.4                          Settlement .

 

(a)                                  All of Participant’s RSUs which are then vested pursuant to Sections 1.2, 1.3 or 1.5 will be paid in Shares, and any related Dividend Equivalents (including any Dividend Equivalent Account balance) will be paid in cash, in each case, during the thirty (30)-day period beginning with the earliest to occur of the following events:

 

(i)                                      the Scheduled Vesting Date;

 

(ii)                                   the date of Participant’s death;

 

(iii)                                the date of Participant’s Disability; or

 

(iv)                               subject to Section 1.4(b), Participant’s Termination of Service following a Change in Control [(provided that, if Participant is or will be eligible for Retirement at any time on or after the Grant Date and prior to the Scheduled Vesting Date and to the extent required by Section 409A of the Code, such Termination of Service must constitute a “separation from service” from the Company (within the meaning of Section 409A(a)(2)(A)(i) of the Code and Treasury Regulation Section 1.409A-1(h))].  Notwithstanding anything to the contrary in this Agreement or the Plan, no RSUs or Dividend Equivalents shall be distributed to Participant pursuant to this Section 1.4(a)(iv) during the six-month period following Participant’s separation from service if the Company determines that distributing such RSUs and Dividend Equivalents at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code.  If the distribution of any of Participant’s RSUs and Dividend Equivalents is delayed as a result of the previous sentence, then such RSUs and Dividend Equivalents (including any Dividend Equivalent Account balance) shall be paid to Participant during the thirty (30)-day period beginning on the first business day following the end of such six-month period (or such earlier date upon which such RSUs and Dividend Equivalents can be distributed under Section 409A without resulting in a prohibited distribution, including as a result of Participant’s death).

 

(b)                                  Notwithstanding anything to the contrary in Section 1.4(a) above, in the event that the vesting of the RSUs accelerates pursuant to Section 1.5(b), Shares shall be distributed to Participant in settlement of such RSUs and any related Dividend Equivalents (including any Dividend Equivalent Account balance) shall be paid to Participant immediately prior to the consummation of such Change in Control.

 

(c)                                   Notwithstanding any provisions of this Agreement or the Plan to the contrary, the time of distribution of the RSUs and the Dividend Equivalents under this Agreement may not be changed except as may be permitted by the Administrator in accordance with Section 409A and the applicable Treasury Regulations promulgated thereunder.

 

1.5                          Effect of Change in Control . Notwithstanding anything to the contrary in the Vesting Schedule or Sections 1.2 and 1.3, in the event of a Change in Control, the following provisions shall apply:

 

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(a)                                  In the event of Participant’s Termination of Service (i) by the Company or any Subsidiary other than as a result of Participant’s Misconduct or (ii) by Participant for Good Reason, in either case, within eighteen (18) months following a Change in Control, the RSUs shall become fully vested as of the date of such Termination of Service.

 

(b)                                  In the event that the RSUs are not assumed or continued, or an equivalent award substituted for the RSUs, by the successor corporation or a parent or subsidiary of the successor corporation in a Change in Control, the RSUs shall become fully vested immediately prior to the consummation of such Change in Control.

 

For purposes of this Section 1.5, “ Good Reason ” means (i) a material diminution in Participant’s position, authority, duties or responsibilities as in effect immediately prior to the Change in Control, (ii) a material diminution in Participant’s base salary or annual planned cash compensation, or (iii) a material change in the geographic location at which Participant is required to perform services for the Company or its Subsidiaries.

 

ARTICLE II.
TAXATION AND TAX WITHHOLDING

 

2.1                          Responsibility for Taxes .

 

(a)                                  Participant acknowledges that, regardless of any action taken by the Company or, if different, Participant’s employer (the “ Employer ”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items related to Participant’s participation in the Plan and legally applicable to Participant or deemed by the Company or the Employer in its discretion to be an appropriate charge to Participant even if legally applicable to the Company or the Employer (“ Tax-Related Items ”) is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer.  Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including, but not limited to, the grant or vesting of the RSUs or any related Dividend Equivalents, the subsequent sale of Shares acquired upon vesting, and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the RSUs to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result.  Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

 

(b)                                  Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to assist the Company and/or the Employer in satisfying any applicable withholding obligations for Tax-Related Items.  In this regard, the Company and/or the Employer, or their respective agents, at their discretion, may satisfy, or allow Participant to satisfy, the withholding obligation with regard to all Tax-Related Items by any of the following, or a combination thereof:

 

(i)                                      By cash, check or wire transfer of immediately available funds; provided that the Company may limit the use of one of the foregoing methods if one or more of the methods below is permitted;

 

(ii)                                   Delivery (including telephonically to the extent permitted by the Company) of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon settlement of the RSUs, and that the broker has been

 

4

 

directed to deliver promptly to the Company funds sufficient to satisfy the obligation for Tax-Related Items; provided that such amount is paid to the Company at such time as may be required by the Company;

 

(iii)                                To the extent permitted by the Administrator, surrendering Shares then issuable upon settlement of the RSUs valued at their Fair Market Value on such date; or

 

(iv)                               By the deduction of such amount from other compensation payable to Participant.

 

(c)                                   The Company and/or the Employer has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment of any Tax-Related Items as Participant’s election to satisfy all or any portion of the Tax-Related Items pursuant to Section 2.1(b)(iii) or (iv) above, or a combination of such sections.

 

(d)                                  Depending on the withholding method, the Company and/or the Employer may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates, in which case Participant may receive a refund of any over-withheld amount in cash through the Employer’s normal payroll processes and will have no entitlement to the Common Stock equivalent.  If the obligation for Tax-Related Items is satisfied by surrendering Shares, solely for tax purposes and not intended to modify or restrict in any way Section 4.2 of the Plan, Participant is deemed to have been issued the full number of Shares subject to the vested RSU, notwithstanding that a number of Shares are surrendered for the purpose of paying the Tax-Related Items.

 

(e)                                   Participant understands and agrees that certain tax withholding amounts may be due prior to any issuance of Shares or payment of cash under Section 1.4 if the RSUs are at any time not subject to a substantial risk of forfeiture for purposes of Section 83 of the Code prior to such date.  If Shares are issued or cash is paid on an accelerated basis to satisfy the Federal Insurance Contributions Act tax imposed under Sections 3101, 3121(a) or 3121(v)(2) of the Code (the “ FICA Tax ”) as provided in this Section 2.1(e) as a result of the lapse of the substantial risk of forfeiture for purposes of Section 83 of the Code prior to the issuance of Shares or payment of cash under Section 1.4, then Participant may have income tax at source on wages imposed under Section 3401 of the Code or the corresponding withholding provisions of applicable state, local or foreign tax laws (together with the FICA Tax, the “ FICA-Related Taxes ”).  Participant’s FICA-Related Taxes shall be satisfied by the deduction of such amount from other compensation payable to Participant.  To the extent the other compensation payable to Participant is determined by the Company to be insufficient to satisfy Participant’s FICA-Related Taxes, Participant’s acceptance of the RSUs hereunder constitutes Participant’s instruction and authorization to the Company to satisfy the FICA-Related Taxes through the accelerated issuance and withholding of Shares otherwise issuable pursuant to the RSUs having a then-current Fair Market Value not exceeding the amount necessary to satisfy the FICA-Related Taxes of the Company and its affiliates based on the minimum applicable statutory withholding rates.

 

(f)                                    Finally, Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to honor the vesting of the RSUs and/or refuse to issue or deliver the Shares or the proceeds from the sale of the Shares if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.

 

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ARTICLE III.
OTHER PROVISIONS

 

3.1                                Nature of Grant .  In accepting the RSUs, Participant understands, acknowledges, and agrees that:

 

(a)                                  the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time in accordance with its terms;

 

(b)                                  the grant of the RSUs is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs, or benefits in lieu of RSUs, even if RSUs have been granted in the past;

 

(c)                                   all decisions with respect to future RSU or other grants, if any, will be at the sole discretion of the Administrator;

 

(d)                                  the RSU grant and participation in the Plan shall not create a right to employment or be interpreted as forming or amending an employment or service contract with the Company, the Employer, or any other Subsidiary and shall not interfere with the ability of the Company, the Employer or any other Subsidiary, as applicable, to terminate Participant’s employment or service relationship (if any) at any time with or without cause;

 

(e)                                   Participant is voluntarily participating in the Plan;

 

(f)                                    the RSUs and any Shares acquired under the Plan, and the income and value of same, are not intended to replace any pension rights or compensation;

 

(g)                                   the RSUs and any Shares acquired under the Plan, and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits, welfare benefits or other similar payments;

 

(h)                                  the future value of the Shares underlying the RSUs is unknown, indeterminable and cannot be predicted with certainty;

 

(i)                                      no claim or entitlement to compensation or damages shall arise from forfeiture of the RSUs resulting from Participant’s Termination of Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any);

 

(j)                                     for purposes of the RSUs, Termination of Service will be deemed to have occurred as of the date Participant is no longer actively providing services to the Company or any of its Subsidiaries (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by the Administrator, Participant’s right to vest in the RSUs, if any, will terminate as of such date and will not be extended by any notice period (e.g., Participant’s period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any); the Administrator shall have the exclusive discretion to determine when

 

6

 

Participant is no longer actively providing services for purposes of the RSUs (including whether Participant may still be considered to be providing services while on a leave of absence);

 

(k)                                  unless otherwise agreed with the Company, the RSUs and the Shares underlying the RSUs, and the income and value of same, are not granted as consideration for, or in connection with, any services Participant may provide as a director of a Subsidiary;

 

(l)                                      unless otherwise provided in the Plan or by the Administrator, the RSUs and the benefits evidenced by this Agreement do not create any entitlement to have the RSUs or any such benefits transferred to, or assumed by, another company, nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Common Stock;

 

(m)                              the following provision shall not apply to Employees in the State of California: In consideration of the grant of the RSUs, and to the extent permitted by applicable law, Participant agrees not to institute any claim against the Company, the Employer or any other Subsidiary, to waive Participant’s ability, if any, to bring such claim, and release the Company, the Employer and any other Subsidiary from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim; and

 

(n)                                  the following provisions apply if Participant is providing services outside the United States:

 

(i)                                      the RSUs and any Shares acquired under the Plan, and the income and value of same, are not part of normal or expected compensation or salary for any purpose; and

 

(ii)                                   neither the Company, the Employer nor any other Subsidiary shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the RSUs or any amounts due to Participant pursuant to the vesting of the RSUs or the subsequent sale of any Shares acquired upon such vesting.

 

3.2                                No Advice Regarding Grant .  The Company is not providing any tax, legal or financial advice, nor is the Company making recommendations regarding participation in the Plan, or Participant’s acquisition or sale of the underlying Shares.  Participant understands and agrees that Participant should consult with Participant’s own personal tax, legal and financial advisors regarding participation in the Plan before taking any action related to his or her Award(s).

 

3.3                                Data Privacy .   Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other RSU grant materials by and among, as applicable, the Employer, the Company and its other Subsidiaries for the purpose of implementing, administering and managing the Plan.

 

Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address, email address and telephone number, date of birth, passport, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all stock options, RSUs or any other entitlement to shares of stock awarded, canceled, exercised,

 

7

 

vested, unvested or outstanding in Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

 

Participant understands that Data will be transferred to Fidelity Investments, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan.  Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country.  Participant understands that if Participant resides outside the United States Participant may request a list with the names and addresses of any potential recipients of the Data by contacting Participant’s local human resources representative.  Participant authorizes the Company, Fidelity Investments and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purpose of implementing, administering and managing the Plan.  Participant understands that Data will be held only as long as is necessary to implement, administer and manage the Plan.  Participant understands that if Participant resides outside the United States, Participant may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant’s local human resources representative.  Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis.  If Participant does not consent, or if Participant later seeks to revoke Participant’s consent, Participant’s employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company may not be able to grant RSUs or other equity awards to Participant or administer or maintain such awards.  Therefore, Participant understands that refusing or withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan.  For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that Participant may contact Participant’s local human resources representative.

 

3.4                          Transferability . The RSUs are not transferable, except by will or the laws of descent and distribution or as permitted by the Administrator in accordance with the terms of the Plan.

 

3.5                          Adjustments .  Participant acknowledges that the RSUs, the Shares subject to the RSUs and the Dividend Equivalents are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

 

3.6                          Defined Terms; Titles .  Capitalized terms not defined in this Agreement have the meanings given to them in the Plan. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

3.7                          Conformity to Applicable Laws .  Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.

 

3.8                          Successors and Assigns .  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company.  Subject to the transfer provisions set forth in the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

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3.9                          Entire Agreement and Imposition of Other Terms .  The Plan and this Agreement (including all exhibits and appendices hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.  Nonetheless, the Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the RSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

 

3.10                   Severability .  In the event that any provision of this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of this Agreement.

 

3.11                   Waiver .  Participant acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Participant or any other person.

 

3.12                   Limitation on Participant’s Rights .  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates a contractual arrangement between the Company and Participant only and shall not be construed as creating a trust for the benefit of Participant.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs and Dividend Equivalents, and rights no greater than the right to receive the Shares or cash as a general unsecured creditor with respect to the RSUs and Dividend Equivalents, as and when settled pursuant to the terms hereof.

 

3.13                   Electronic Delivery and Acceptance .  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

3.14                   Language . If Participant receives this Agreement or any other document relating to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.

 

3.15                   Foreign Asset/Account and Exchange Control and Tax Reporting . Participant acknowledges that, depending on Participant’s country, Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the acquisition, holding and/or transfer of Shares or cash (including upon settlement of Dividend Equivalents, from dividends received or the proceeds arising from the sale of Shares) derived from participation in the Plan, in, to and/or from a brokerage/bank account or legal entity located outside Participant’s country.  The Applicable Laws of Participant’s country may require that Participant report such accounts, assets, the balances therein, the value thereof and/or the transactions related thereto to the applicable authorities in such country.  Participant acknowledges that Participant is responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements and should consult Participant’s personal legal advisor on these matters.

 

3.16                   Insider Trading Restrictions/Market Abuse Laws .  Participant acknowledges that, depending on Participant’s country, Participant may be subject to insider trading restrictions and/or

 

9

 

market abuse laws, which may affect Participant’s ability to acquire or sell Shares or rights to Shares under the Plan during such times when Participant is considered to have “inside information” regarding the Company (as defined by the laws in Participant’s country).  Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company.  Participant acknowledges that Participant is responsible for ensuring compliance with any applicable restrictions and should consult Participant’s personal legal advisor on these matters.

 

3.17                   Section 409A . The intent of the parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A and the regulations and guidance promulgated thereunder and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  For purposes of Section 409A, each payment that Participant may be eligible to receive under this Agreement shall be treated as a separate and distinct payment.

 

3.18                   Appendix .  Notwithstanding any provisions in this Restricted Stock Unit Award Agreement, the RSUs and the Dividend Equivalents shall be subject to any special terms and conditions set forth in the Appendix.  Specifically, in the event Participant resides or relocates to one of the countries included in the Appendix, the terms and conditions for such country will apply to Participant to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.  The Appendix constitutes a part of this Restricted Stock Unit Award Agreement.

 

3.19                   Governing Law and Venue .  This Agreement and the RSUs and the Dividend Equivalents will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding the choice-of-law principles of the State of Delaware and any other state requiring the application of a jurisdiction’s laws other than the State of Delaware. For purposes of litigating any dispute concerning the grant of the RSUs, the Dividend Equivalents or this Agreement, Participant consents to the jurisdiction of the State of Minnesota and agrees that such litigation shall be conducted in the courts of Ramsey County, Minnesota, or the federal courts for the United States for the District of Minnesota, where this grant is made and/or to be performed.

 

* * * * *

 

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APPENDIX A
TO
RESTRICTED STOCK UNIT AWARD AGREEMENT

 

Certain capitalized terms used but not defined in this Appendix A have the meanings set forth in the Restricted Stock Unit Award Agreement (the “ Award Agreement ”) or, if not defined therein, the Plan.

 

Terms and Conditions

 

This Appendix includes additional terms and conditions that govern the RSUs granted to Participant under the Plan if Participant resides in one of the countries listed below.  If Participant is a citizen or resident of a country other than the one in which Participant resides, is considered a resident of another country for local law purposes or transfers employment and/or residency between countries after the Grant Date, the Company shall determine, in its sole discretion, to what extent the terms and conditions contained herein shall apply to Participant.

 

Notifications

 

This Appendix also includes information regarding exchange controls and certain other issues of which Participant should be aware with respect to Participant’s participation in the Plan.  The information is based on the securities, exchange control and other laws in effect in the respective countries as of April 2016.  Such laws are often complex and change frequently.  As a result, the Company strongly recommends that Participant not rely on the information in this Appendix as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may become out of date in the future.

 

In addition, the information contained herein is general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result.  Accordingly, Participant is advised to seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to Participant’s situation.

 

Finally, if Participant is a citizen or resident of a country other than the one in which Participant resides, is considered a resident of another country for local law purposes or transfers employment and/or residency to another country after the Grant Date, or, the information contained herein may not be applicable to Participant.

 

ARGENTINA

 

Notifications

 

Securities Law Information.  Neither the RSUs nor the underlying Shares are publicly offered or listed on any stock exchange in Argentina.  The offer is private and not subject to the supervision of any Argentine governmental authority.

 

Exchange Control Information. Please note that exchange control regulations in Argentina are subject to frequent change.  Participant should consult with his or her personal legal advisor regarding any exchange control obligations that Participant may have prior to receiving proceeds from Dividend Equivalents, the sale of Shares or dividends.  Participant must comply with any and all Argentine currency exchange restrictions, approvals and reporting requirements in connection with his or her participation in the Plan.

 

 

AUSTRALIA

 

Notifications

 

Cash Settlement.  Notwithstanding any provision in the Award Agreement to the contrary, any vested RSUs shall be settled by payment in cash or its equivalent of an amount equal in value to Shares subject to the vested RSUs.  Any references to the issuance of Shares in any documents related to the RSUs shall not be applicable.  Notwithstanding the foregoing, the Company reserves the right to settle RSUs in Shares, in its discretion.

 

Exchange Control Information.  Exchange control reporting is required for cash transactions exceeding a certain threshold and international fund transfers.  Participant understands that the Australian bank assisting with the transaction may file the report on Participant’s behalf.  If there is no Australian bank involved in the transfer, Participant will be required to file the report.  Participant should consult with his or her personal advisor to ensure proper compliance with applicable reporting requirements in Australia.

 

AUSTRIA

 

Notifications

 

Exchange Control Information.  If Participant holds Shares acquired under the Plan outside Austria (even if held outside of Austria with an Austrian bank), Participant understands that Participant may need to submit an annual report to the Austrian National Bank using the form “ Standmeldung/Wertpapiere .”  Exemptions apply if the value of the Shares held outside Austria as of December 31 does not exceed certain thresholds.  If the thresholds are exceeded, annual or quarterly reporting obligations are imposed.  If applicable, the deadline for filing the annual report is January 31 of the following year and the deadline for the quarterly report is the 15th of the month following the end of the respective quarter.

 

When Dividend Equivalents are settled, Shares are sold or dividends are paid on such Shares, there may be exchange control obligations if the cash received is held outside Austria, as a separate reporting requirement applies to any non-Austrian cash accounts.  If the transaction volume of all of Participant’s cash accounts abroad exceeds a certain threshold, the movements and the balance of all accounts must be reported monthly, as of the last day of the month, on or before the 15th day of the following month, using the form “ Meldungen SI-Forderungen und/oder SI-Verpflichtungen. ”

 

BELGIUM

 

Terms and Conditions

 

Vesting of RSUs. Participant may not sell the Shares received upon the vesting of Participant’s RSUs before the second anniversary of the Scheduled Vesting Date.

 

Notifications

 

Foreign Asset/Account Reporting Information.   Belgian residents are required to report any security ( e.g. , Shares acquired under the Plan) or bank account held outside of Belgium on their annual tax return.  In a separate report, they will be required to provide the National Bank of Belgium with certain details regarding such foreign accounts (including the account number, bank name and country in which any such account was opened).

 

A- 2

 

BRAZIL

 

Terms and Conditions

 

Compliance with Law.  By accepting the RSUs, Participant acknowledges and agrees to comply with applicable Brazilian laws and to pay any and all applicable taxes associated with the vesting of the RSUs and Dividend Equivalents, the receipt of any dividends, and the sale of the Shares acquired under the Plan.

 

Labor Law Acknowledgment.  By accepting the RSUs, Participant agrees that Participant is (i) making an investment decision, (ii) Shares will be issued to Participant only if the vesting conditions are met and (iii) the value of the underlying Shares is not fixed and may increase or decrease in value over the vesting period without compensation to Participant.

 

Notifications

 

Exchange Control Information.  If Participant is a Brazilian resident, Participant must submit an annual or quarterly declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights exceeds certain thresholds.  Assets and rights that must be reported include Shares acquired under the Plan.

 

Tax on Financial Transaction (IOF) .  Repatriation of funds into Brazil and the conversion between BRL and USD associated with such fund transfers may be subject to the Tax on Financial Transactions.  It is Participant’s responsibility to comply with any applicable Tax on Financial Transactions arising from Participant’s participation in the Plan.  Participant should consult with his or her personal tax advisor for additional details.

 

BULGARIA

 

There are no country-specific terms and conditions.

 

CANADA

 

Terms and Conditions

 

Cash Settlement.  Notwithstanding any provision in the Award Agreement to the contrary, any vested RSUs shall be settled by payment in cash or its equivalent of an amount equal in value to Shares subject to the vested RSUs.  Any references to the issuance of Shares in any documents related to the RSUs shall not be applicable.  Notwithstanding the foregoing, the Company reserves the right to settle RSUs in Shares, in its discretion.

 

Language Consent .  If Participant is a resident of Quebec, the following provision will apply to Participant:

 

The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

 

Consentement relatif à la langue utilisée .  Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention, ainsi que de tous documents, avis et procédures judiciaires, exécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à, la présente convention.

 

A- 3

 

Data Privacy.  This provision supplements Section 3.3 of the Award Agreement:

 

If Participant is a resident of Quebec, Participant authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel (professional or not), involved in the administration and operation of the Plan.  Participant further authorizes the Company and the Employer to disclose and discuss Participant’s participation in the Plan with their advisors.  Participant also authorizes the Company and the Employer to record such information and to keep such information in Participant’s employee file.

 

Notifications

 

Securities Law Information.  Participant understands that Participant is permitted to sell Shares acquired pursuant to the Plan through the designated broker appointed under the Plan, if any, provided the sale of the Shares acquired pursuant to the Plan takes place outside of Canada through the facilities of a stock exchange on which the Shares are listed ( i.e. , the New York Stock Exchange).

 

Foreign Asset/Account Reporting Information.  If Participant is a Canadian resident, Participant may be required to report his or her foreign property on form T1135 (Foreign Income Verification Statement) if the total cost of the foreign property exceeds a certain threshold at any time in the year.  Foreign property includes Shares acquired under the Plan and may include the RSUs.  The RSUs must be reported—generally at a nil cost—if the cost threshold is exceeded because of other foreign property Participant holds.  If Shares are acquired, their cost generally is the adjusted cost base (“ ACB ”) of the Shares.  The ACB ordinarily would equal the fair market value of the Shares at the time of acquisition, but if Participant owns other Shares, this ACB may have to be leveraged with the ACB of the other shares.  The form T1135 generally must be filed by April 30 of the following year.  Participant should consult with his or her personal advisor to ensure compliance with the applicable reporting requirements.

 

CHILE

 

Terms and Conditions

 

Labor Law Acknowledgment.  The RSUs and Shares underlying the RSUs, and the income and value of same, shall not be considered as part of Participant’s remuneration for purposes of determining the calculation base of future indemnities, whether statutory or contractual, for years of service (severance) or in lieu of prior notice, pursuant to Article 172 of the Chilean Labor Code.

 

Notifications

 

Securities Law Information.  This grant of RSUs constitutes a private offering of securities in Chile effective as of the Grant Date.  This offer of RSUs is made subject to general ruling n° 336 of the Chilean Superintendence of Securities and Insurance (“SVS”).  The offer refers to securities not registered at the securities registry or at the foreign securities registry of the SVS, and, therefore, such securities are not subject to oversight of the SVS.  Given that the RSUs are not registered in Chile, the Company is not required to provide public information about the RSUs or the Shares in Chile.  Unless the RSUs and/or the Shares are registered with the SVS, a public offering of such securities cannot be made in Chile.

 

Esta Oferta de Unidades de Acciones Restringidas constituye una oferta privada de valores en Chile y se inicia en la Fecha de la Oferta.  Esta oferta de Unidades de Acciones Restringidas se acoge a las disposiciones de la Norma de Carácter General Nº 336 (“NCG 336”) de la Superintendencia de Valores y Seguros de Chile (“SVS”).  Esta oferta versa sobre valores no inscritos en el Registro de Valores o en el Registro de Valores Extranjeros que lleva la SVS, por lo que tales valores no están sujetos a la fiscalización de ésta.  Por tratarse de valores no inscritos en Chile no existe la obligación por parte de la

 

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Compañía de entregar en Chile información pública respecto de los mismos.  Estos valores no podrán ser objeto de oferta pública en Chile mientras no sean inscritos en el Registro de Valores correspondiente.

 

Exchange Control Information. Exchange control regulations will apply if Participant’s aggregate investments abroad exceed a certain maximum amount.

 

Please note that exchange control regulations in Chile are subject to change.  Participant should consult with his or her personal legal advisor regarding any exchange control obligations that Participant may have prior to receiving proceeds from the sale of Shares acquired under the Plan.

 

Tax Reporting and Registration Information. Participant must file Tax Form 1851 “Annual Sworn Statement Regarding Investments Held Abroad” in relation to any Shares acquired under the Plan that are held abroad. In addition, if Participant wishes to receive credit in Chile for any tax paid abroad on any dividends received pursuant to the Shares, Participant must register the acquisition of Shares with the Chilean Internal Revenue Service (the “ CIRS ”) and also file Tax Form 1853 “Annual Sworn Statement Regarding Credits for Taxes Paid Abroad.” These forms must be submitted through the CIRS web page at www.sii.cl.

 

Registration of the acquisition of Shares with the CIRS will also provide evidence of the acquisition price of the Shares, which Participant will need when the Shares are sold. It may also be possible for Participant to provide other evidence in the form of the Agreement or a report of the vesting and the number of Shares acquired and sold; however, neither the Company nor Fidelity Investments is under any obligation to provide Participant with such a report.  Participant should consult with his or her personal legal and tax advisors regarding how to register with the CIRS (if desired).

 

CHINA

 

Terms and Conditions

 

Forfeiture Upon Termination of Employment.   Notwithstanding anything to the contrary in this Agreement, to the extent not earlier vested, forfeited, canceled or otherwise extinguished, the RSUs shall be forfeited on the date that is six (6) months from the date of Termination of Service (for any reason[, including Retirement]) and thereafter Participant shall have no entitlement to the underlying Shares.

 

Immediate Sale of Shares Upon Termination of Employment.  Participant understands and agrees that upon Participant’s Termination of Service for any reason, including death, Disability[, or Retirement], Participant is required to and Participant will sell all Shares acquired upon vesting of the RSUs; provided, however, that if Participant Retires no more than six months before the vesting date of the RSUs, this requirement to sell all Shares acquired upon vesting of the RSUs will apply as soon as reasonably possible following such vesting date.  Any Shares not sold at Participant’s direction within a reasonable period of time following Participant’s Termination of Service (or upon the vesting date, if applicable), as determined by the Company in its sole discretion, will be sold on Participant’s behalf pursuant to this authorization.  In this case, the Company will be under no obligation to arrange for such sale at any particular price.

 

Responsibility for Taxes.   Notwithstanding Section 2.1(c) of the Award Agreement, if Participant fails to provide timely payment of any Tax-Related Items, such failure shall be viewed as Participant’s express authorization (without further action on Participant’s party) for the Company and/or the Employer to satisfy all or any portion of the Tax-Related Items pursuant to Section 2.1(b)(ii) of the Award Agreement or, if such withholding method is deemed to be not in accordance with Applicable Laws, pursuant to Section 2.1(b)(iv) of the Award Agreement.

 

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Repatriation of Sale Proceeds and Dividends (applies only to citizens of the People’s Republic of China). Participant understands and agrees that, due to exchange control laws in China, Participant will be required to immediately repatriate to the Approved Account described below the proceeds from the sale of Shares that Participant acquires upon the vesting of the RSUs.  Participant also understands and agrees that this repatriation requirement also applies to any dividends that are paid on such Shares and the Dividend Equivalents paid with respect to the RSUs, which must be repatriated to China at the time and in the manner established by the Company.  Participant further agrees that such proceeds and dividends must be transferred directly from the participant trust or other account established under the Plan to the dedicated foreign exchange account established by the Company or a Subsidiary in China and approved by the State Administration of Foreign Exchange or its local counterpart under applicable exchange control rules (the “ Approved Account ”) before such proceeds and dividends can be remitted to Participant.  Participant further agrees not to instruct or cause the Administrator to transfer such cash proceeds and dividends to any person, broker or entity other than the Approved Account.  Participant further agrees to cooperate with and comply with any other requests made by the Company, the Employer or the Administrator in the future in order to facilitate compliance with the exchange control requirements in China.  Participant undertakes to reimburse the Company and its Subsidiaries for any penalties or other charges that they may incur resulting from any failure by Participant to ensure compliance with the requirements set forth in this paragraph.  Participant understands that, due to exchange control requirements in China, the funds held on Participant’s behalf in the Approved Account may be converted from U.S. dollars into local currency only once per calendar quarter, and that these funds may not be remitted to Participant until this conversion occurs.  Finally, Participant understands and agrees that neither the Company nor the Employer assumes any liability for any fluctuations in the U.S. dollar exchange rate between the time that Participant acquires Shares upon the vesting of the RSUs, the time that dividends or Dividend Equivalents are received with respect to such Shares or RSUs, or the time Participant sells Shares acquired under the Plan, either through a voluntary sale or a mandatory sale arranged by the Company, and the time Participant receives the cash proceeds in China through the Approved Account.

 

COLOMBIA

 

Terms and Conditions

 

Labor Law Acknowledgment. Participant acknowledges that pursuant to Article 128 of the Colombian Labor Code, the Plan and related benefits do not constitute a component of “salary” for any legal purpose.

 

Notifications

 

Securities Law Information. The Shares subject to the RSUs are not and will not be registered in the Colombian registry of publicly traded securities ( Registro Nacional de Valores y Emisores ) and therefore the Shares may not be offered to the public in Colombia. Nothing in this document should be construed as the making of a public offer of securities in Colombia.

 

Exchange Control Information.  Investments in assets located abroad (including Shares) are subject to registration with the Banco de la República if Participant’s aggregate investments held abroad (as of December 31 of the applicable calendar year) equal or exceed a certain amount.  Further, when Shares (or other investments) held abroad are sold, Participant may either choose to keep the resulting sums abroad, or to repatriate them to Colombia. If Participant chooses to repatriate funds to Colombia and has not registered the investment with Banco de la República , Participant will need to file with Banco de la República Form No. 5 upon conversion of funds into local currency, which should be duly completed to reflect the nature of the transaction.  If Participant has registered the investment with Banco de la República , then Participant will need to file with Banco de la República Form No. 4 upon conversion of funds into local currency, which should be duly completed to reflect the nature of the transaction.

 

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Participant should obtain proper legal advice in order to ensure compliance with applicable Colombian regulations .

 

COSTA RICA

 

There are no country-specific terms and conditions.

 

CZECH REPUBLIC

 

Notifications

 

Exchange Control Information.   The Czech National Bank (“ CNB ”) may require Participant to fulfill certain notification duties in relation to the acquisition of Shares and the opening and maintenance of a foreign account.  Even in the absence of a request from the CNB, Participant may need to report foreign direct investments with a value exceeding a certain aggregate amount and/or other foreign financial assets with a value in excess of a certain maximum.  However, because exchange control regulations change frequently and without notice, Participant should consult with his or her personal legal advisor prior to the vesting of the RSUs and the sale of Shares to ensure compliance with current regulations.  It is Participant’s responsibility to comply with any applicable Czech exchange control laws.

 

DENMARK

 

Terms and Conditions

 

Danish Stock Option Act.  In accepting the RSUs, Participant acknowledges that Participant has received an Employer Statement translated into Danish, which is being provided to comply with the Danish Stock Option Act.  To the extent more favorable to Participant and required to comply with the Stock Option Act, the terms set forth in the Employer Statement will apply to Participant’s participation in the Plan.

 

Notifications

 

Foreign Asset/Account Reporting Information .  If Participant establishes an account holding Shares or an account holding cash outside Denmark, he or she must report the account to the Danish Tax Administration.  The form which should be used in this respect can be obtained from a local bank.  (These obligations are separate from and in addition to the obligations described below.)

 

Securities/Tax Reporting Information .  If Participant holds Shares acquired under the Plan in a brokerage account with a broker or bank outside Denmark (this likely includes the participant trust), he or she is required to inform the Danish Tax Administration about the account.  For this purpose, Participant must file a Form V ( Erklaering V ) with the Danish Tax Administration.  The Form V must be signed both by Participant and by the applicable broker or bank where the account is held.  By signing the Form V, the broker or bank undertakes to forward information to the Danish Tax Administration concerning the Shares in the account without further request each year.  By signing the Form V, Participant authorizes the Danish Tax Administration to examine the account.  In the event that the applicable broker or bank with which the account is held does not wish to, or, pursuant to the laws of the country in question, is not allowed to assume such obligation to report, Participant acknowledges that he or she is solely responsible for providing certain details regarding the foreign brokerage account and Shares deposited therein to the Danish Tax Administration as part of his or her annual income tax return.

 

In addition, if Participant opens a brokerage account (or a deposit account with a U.S. bank) for the purpose of holding cash outside Denmark, he or she is also required to inform the Danish Tax

 

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Administration about this account.  To do so, Participant must file a Form K ( Erklaering K ) with the Danish Tax Administration.  The Form K must be signed both by Participant and by the applicable broker or bank where the account is held.  By signing the Form K, the broker/bank undertakes an obligation, without further request each year, to forward information to the Danish Tax Administration concerning the content of the account.  By signing the Form K, Participant authorizes the Danish Tax Administration to examine the account.  In the event that the applicable financial institution (broker or bank) with which the account is held, does not wish to, or, pursuant to the laws of the country in question, is not allowed to assume such obligation to report, Participant acknowledges that he or she is solely responsible for providing certain details regarding the foreign brokerage or bank account to the Danish Tax Administration as part of Participant’s annual income tax return.

 

DOMINICAN REPUBLIC

 

There are no country-specific terms and conditions.

 

ECUADOR

 

There are no country-specific terms and conditions.

 

EGYPT

 

There are no country-specific terms and conditions.

 

EL SALVADOR

 

There are no country-specific terms and conditions.

 

ESTONIA

 

There are no country-specific terms and conditions.

 

FINLAND

 

There are no country-specific terms and conditions.

 

FRANCE

 

Terms and Conditions

 

Type of Grant .  The RSUs are granted as French-Qualified RSUs and are intended to qualify for the special tax and social security treatment applicable to shares granted for no consideration under Sections L. 225-197 to L. 225-197-6 of the French Commercial Code, as amended.  The French-Qualified RSUs are granted subject to the terms and conditions of the French Sub-Plan to the Plan (the “ French Sub-Plan ”).

 

Certain events may affect the status of the RSUs as French-Qualified RSUs or the underlying Shares, and the French-Qualified RSUs or the underlying Shares may be disqualified in the future.  The Company does not make any undertaking or representation to maintain the qualified status of the French-Qualified RSUs or of the underlying Shares.

 

Capitalized terms not defined herein, in the Award Agreement or the Plan shall have the meanings ascribed to them in the French Sub-Plan.

 

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Restrictions on Sale or Transfer of Shares.

 

(a)          Minimum Mandatory Holding Period .  Participant may not sell or transfer any Shares issued at vesting until the second anniversary of the Grant Date, or such other period as is required to comply with the minimum mandatory holding period applicable to Shares underlying French-Qualified RSUs under Section L. 225-197-1 of the French Commercial Code, as amended, or by the French Tax Code or the French Social Security Code, as amended, to benefit from the special tax and social security regime in France.

 

(b)          Closed Periods .  Participant may not sell any Shares issued upon vesting of the French-Qualified RSUs during certain Closed Periods, to the extent applicable to the Shares underlying the French-Qualified RSUs granted by the Company, as described in the French Sub-Plan.

 

(c)           Effect of Termination of Service .  Except in the case of Participant’s Termination of Service due to death or Disability, the restrictions described in provisions (a) and (b) above will continue to apply even if Participant is no longer an Employee or managing corporate officer of the Company or a French Entity.

 

Holding Periods for Managing Corporate Officers .  If on the Grant Date the French Participant qualifies as a managing corporate officer under French law (“ mandataires sociaux ”) or any similar official capacity of the Company or a Subsidiary, the French Participants may not sell 20% of the Shares acquired upon vesting of the French-Qualified RSUs until the termination of such official capacity, as long as this restriction is applicable to French-Qualified RSUs.

 

No Transfer of French-Qualified RSUs .  French-Qualified RSUs may not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner during a French Participant’s lifetime and upon death only in accordance with Section 7 of the French Sub-Plan, and only to the extent required by Applicable Laws (including the provisions of Sections L. 225-197 to L. 225-197-6 of the French Commercial Code, as amended).

 

Termination of Service Due to Death .  Notwithstanding anything in the Plan or Award Agreement, in the event of Participant’s Termination of Service due to death prior to the satisfaction of the vesting conditions set forth in the Vesting Schedule, any French-Qualified RSUs that have not vested as of such date may be requested by Participant’s legal heirs within six months of the date of death and, if so requested, the Shares subject to the French-Qualified RSUs will be issued to Participant’s legal heirs.

 

Consent to Receive Information in English.   By accepting the Agreement providing for the terms and conditions of Participant’s grant, Participant confirms having read and understood the documents relating to this grant (the Plan and this Agreement) which were provided in English language.  Participant accepts the terms of those documents accordingly.

 

En acceptant le Contrat d’Attribution décrivant les termes et conditions de l’attribution, le participant confirme ainsi avoir lu et compris les documents relatifs à cette attribution (le Plan U.S. et ce Contrat d’Attribution) qui ont été communiqués en langue anglaise.  Le participant accepte les termes en connaissance de cause.

 

Notifications

 

Foreign Asset/Account Reporting Information .  If Participant is a French resident and holds Shares outside of France or maintains a foreign bank account, Participant is required to report such to the French tax authorities when filing Participant’s annual tax return.  Failure to comply could trigger significant penalties.

 

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GERMANY

 

Notifications

 

Exchange Control Information.   Cross-border payments in excess of a certain threshold must be reported monthly to the German Federal Bank ( Bundesbank ).  In case of payments in connection with securities (including proceeds realized from the settlement of Dividend Equivalents, upon the sale of Shares or the receipt of dividends), the report must be made by the 5th day of the month following the month in which the payment was received.  The report must be filed electronically and the form of report (“ Allgemeine Meldeportal Statistik ”) can be accessed via the Bundesbank’s website (www.bundesbank.de), in both German and English.  Participant is responsible for making this report.

 

GREECE

 

There are no country-specific terms and conditions.

 

GUATEMALA

 

Terms and Conditions

 

Language Consent.   By participating in the Plan, Participant acknowledges that he or she is proficient in reading and understanding English and fully understands the terms of the Plan and the Agreement.

 

HONG KONG

 

Terms and Conditions

 

Sale of Shares.  In the event the RSUs vest within six months of the Grant Date, Participant agrees not to sell any Shares acquired upon vesting of the RSUs prior to the six-month anniversary of the Grant Date.

 

Securities Law Notice.  WARNING :  The contents of this document have not been reviewed by any regulatory authority in Hong Kong. Participant should exercise caution in relation to the offer.  If Participant is in doubt about any of the contents of this Agreement or the Plan, Participant should obtain independent professional advice.  Neither the grant of the RSUs nor the issuance of Shares upon vesting constitutes a public offering of securities under Hong Kong law and is available only to employees of the Company and its Subsidiaries.  The Agreement, the Plan and other incidental materials (i) have not been prepared in accordance with and are not intended to constitute a “prospectus” for a public offering of securities under applicable securities legislation in Hong Kong and (ii) are intended only for the personal use of each eligible employee of the Company and its Subsidiaries and may not be distributed to any other person.

 

Nature of Scheme.  The Company specifically intends that the Plan will not be an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance.

 

HUNGARY

 

There are no country-specific terms and conditions.

 

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INDIA

 

Terms and Conditions

 

Cash Settlement.  Notwithstanding any provision in the Award Agreement to the contrary, any vested RSUs shall be settled by payment in cash or its equivalent of an amount equal in value to Shares subject to the vested RSUs.  Any references to the issuance of Shares in any documents related to the RSUs shall not be applicable.  Notwithstanding the foregoing, the Company reserves the right to settle RSUs in Shares, in its discretion.

 

Notifications

 

Exchange Control Information . Due to Indian exchange control restrictions, Indian residents are required to repatriate the proceeds from the sale of Shares to India within ninety (90) days of receipt and any payment received upon settlement of Dividend Equivalents or dividends received in relation to the Shares within one hundred eighty (180) days of payment. Participant should maintain any foreign inward remittance certificate received from the bank where the foreign currency is deposited following any repatriation of proceeds in the event that the Reserve Bank of India or the Employer requests proof of repatriation. It is Participant’s responsibility to comply with applicable exchange control laws in India.

 

Foreign Account/Asset Reporting Information .  Indian residents are required to declare any foreign bank accounts and assets (including Shares acquired under the Plan) on their annual tax returns.  Participant should consult with his or her personal tax advisor to determine Participant’s reporting requirements.

 

INDONESIA

 

Notifications

 

Exchange Control Information.   If Participant remits funds into Indonesia, the Indonesian bank through which the transaction is made will submit a report on the transaction to the Bank of Indonesia for statistical reporting purposes.  For transactions of exceeding a certain threshold, a description of the transaction must be included in the report.  Although the bank through which the transaction is made is required to make the report, Participant must complete a “Transfer Report Form.” The Transfer Report Form will be provided to Participant by the bank through which the transaction is to be made.

 

ISRAEL

 

Terms and Conditions

 

The following provisions apply to Participants who are or are deemed to be residents of the State of Israel for tax purposes or are otherwise subject to taxation in Israel with respect to the RSUs on the Grant Date.

 

Capitalized terms used but not defined in these provisions or the Plan or the Agreement shall have the meanings ascribed to them in the Israeli Sub-Plan to the Plan (the “ Israeli Sub-Plan ”).

 

Trust Arrangement .  The RSUs are offered to Participant subject to, and in accordance with, the terms of the Plan, the Israeli Sub-Plan, this Agreement and the Trust Agreement.

 

The RSUs are intended to be 102 Capital Gains Track Grants and qualify for 102 Capital Gains Track tax treatment.  Certain events may affect the status of the RSUs and the Shares subject to the RSUs as qualified under Section 102 and the RSUs and the Shares subject to the RSUs may be disqualified in the

 

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future.  The Company does not make any undertaking or representation to maintain the 102 Capital Gains Track status of the RSUs and the Shares subject to the RSUs.

 

Participant agrees that, upon request of the Company or the Employer, he or she will execute the 102 Capital Gains Track Grant acceptance prescribed by the Company or the Trustee, according to the procedures and timeline set forth by the Company and the Trustee (which may include executing this Agreement in writing).  If Participant does not comply with any such request, the qualified status of the RSUs and the Shares under Section 102 may not apply.

 

Nature of Grant .  The following provision supplements Section 3.1 (Nature of Grant) of the Award Agreement:

 

By accepting the RSUs, Participant (a) acknowledges receipt of and represents that he or she has read and is familiar with the Plan, the Israeli Sub-Plan, and this Agreement; (b) accepts the RSUs subject to all of the terms and conditions of Plan, the Israeli Sub-Plan, and this Agreement; and (c) agrees that the RSUs, the Shares and any rights issued pursuant to the RSUs and the Shares (other than cash dividends and cash payments made pursuant to Dividend Equivalents) will be issued to and deposited with the Trustee and shall be held in trust for Participant’s benefit for the Required Holding Period and as otherwise required by the ITO, the Rules and any ruling or approval of the ITA pursuant to the terms of the ITO, the Rules and the Trust Agreement.

 

Furthermore, by accepting the RSUs, Participant confirms that he or she is familiar with the terms and provisions of Section 102, particularly the 102 Capital Gains Track described in subsection (b)(2) and (b)(3) thereof, and agrees that he or she will not require the Trustee to release the RSUs or the Shares to Participant, or to sell the RSUs or the Shares to a third party, during the Required Holding Period, unless permitted to do so by the Company and the ITO or the Rules.

 

The Company may in its sole discretion replace the Trustee from time to time and instruct the transfer of all RSUs and Shares held or administered by such Trustee at such time to its successor and the provisions of this Agreement shall apply to the new Trustee.

 

Responsibility for Taxes .  The following provision supplements Section 2.1 of the Award Agreement:

 

In the event the RSUs vest and Shares are to be issued to Participant after the expiration of the Required Holding Period, the Shares issued upon vesting shall either be (a) issued to and deposited with the Trustee to be held in trust for Participant’s benefit, or (b) transferred to Participant directly upon Participant’s request, provided that Participant first complies with his or her obligations with respect to Tax-Related Items.  In the event that Participant elects to have the Shares transferred to him or her without selling such Shares, Participant shall become liable to pay taxes immediately in accordance with the provisions of the ITO and Section 2.1 of the Award Agreement, as supplemented by this provision.

 

The following provisions apply to Participants who permanently transfer to Israel after the Grant Date who do not hold 102 Capital Gains Track Grants.

 

Vesting/Sale of Shares .  This provision supplements Section 1.2 (Vesting; Forfeiture) of the Award Agreement:

 

To facilitate compliance with tax withholding obligations in Israel, the Company reserves the right to (a) require Participant to sell all Shares issued under this Agreement either (i) as soon as practicable upon receipt of such Shares, or (ii) upon Participant’s Termination of Service, or (b) to maintain the Shares issued under this Agreement in an account with Fidelity Investments, or such other stock plan service provider as may be selected by the Company in the future (the “ Designated Broker ”), until the Shares are

 

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sold.  By accepting this Agreement, Participant authorizes the Company to instruct the Designated Broker, to assist with the mandatory sale of such Shares (on Participant’s behalf pursuant to this authorization) and Participant expressly authorizes the Designated Broker to complete the sale of such Shares.  Participant agrees to sign any forms and/or consents required by the Company or the Designated Broker to effectuate the sale of the Shares.  Participant acknowledges that the Designated Broker is under no obligation to arrange for the sale of the Shares at any particular price.  Upon the sale of the Shares, the cash proceeds from the sale of the Shares, less any brokerage fees or commissions and any Tax-Related Items, will be delivered to Participant.

 

Notifications

 

Securities Law Information . This grant does not constitute a public offering under the Securities Law, 1968.

 

IRELAND

 

There are no country-specific terms and conditions.

 

ITALY

 

Terms and Conditions

 

Data Privacy.  The following provision replaces Section 3.3 of the Award Agreement.

 

Participant understands that the Employer, the Company and any Subsidiary may hold certain personal information about Participant, including, but not limited to, name, home address, email address and telephone number, date of birth, social insurance, passport or other identification number, salary, nationality, job title, any Shares or directorships held in the Company or any Subsidiary, details of all RSUs or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

 

Participant also understands that providing the Company with Data is necessary for the performance of the Plan and that Participant’s refusal to provide such Data would make it impossible for the Company to perform its contractual obligations and may affect Participant’s ability to participate in the Plan. The Controller of personal data processing is 3M Company, with registered offices at 3M Center, St. Paul, Minnesota, United States of America, and pursuant to Legislative Decree no. 196/2003, its Representative in Italy is Dario Caspani with registered offices at 3M ITALIA S.p.A. — via S.BOVIO, 3 — 20090 SEGRATE — MILANO, ITALY.

 

Participant understands that Data will not be publicized, but it may be transferred to Fidelity Investments and such other banks, financial institutions or brokers involved in the management and administration of the Plan.  Participant understands that Data may also be transferred to the Company’s independent registered public accounting firm.  Participant further understands that the Company and/or any Subsidiary will transfer Data among themselves as necessary for the purpose of implementing, administering and managing the Plan, and that the Company and/or any Subsidiary may each further transfer Data to Fidelity Investments or any other third parties assisting the Company in the implementation, administration and management of the Plan, including any requisite transfer of Data to a broker or other third party with whom Participant may elect to deposit any Shares acquired at vesting of the RSUs.  Such recipients may receive, possess, use, retain and transfer Data in electronic or other form, for the purposes of implementing, administering and managing the Plan.  Participant understands that these recipients may be located in or outside the European Economic

 

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Area, such as in the United States, or elsewhere.  Should the Company exercise its discretion in suspending all necessary legal obligations connected with the management and administration of the Plan, it will delete Data as soon as it has completed all the necessary legal obligations connected with the management and administration of the Plan.

 

Participant understands that Data processing related to the purposes specified above shall take place under automated or non-automated conditions, anonymously when possible, that comply with the purposes for which Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to Legislative Decree no. 196/2003.

 

The processing activity, including communication, the transfer of Data abroad, including outside of the European Economic Area, as herein specified and pursuant to applicable laws and regulations, does not require Participant’s consent hereto as the processing is necessary to the performance of contractual obligations related to the implementation, administration and management of the Plan.  Participant understands that, pursuant to Section 7 of the Legislative Decree no. 196/2003, Participant has the right to, including but not limited to, access, delete, update, correct or terminate for legitimate reason, the Data processing.  Furthermore, Participant is aware that Data will not be used for direct marketing purposes.  In addition, Data provided can be reviewed and questions or complaints can be addressed by contacting Participant’s local human resources representative.

 

Plan Document Acknowledgment.   By accepting the grant of these RSUs, Participant acknowledges that Participant has received a copy of the Plan and the Agreement and has reviewed the Plan and the Agreement, in their entirety and fully understands and accepts all provisions of the Plan and the Agreement.  Participant further acknowledges that Participant has read and expressly approves the following sections of the Agreement: “Responsibility for Taxes”; “Nature of Grant”; “Data Privacy” as replaced by the above provision; and “Governing Law and Venue”.

 

Notifications

 

Foreign Asset/Account Reporting Information .  Italian residents who, at any time during the fiscal year, hold foreign financial assets (such as cash, Shares or RSUs) which may generate income taxable in Italy are required to report such assets on their annual tax returns or on a special form if no tax return is due.  The same reporting duties apply to Italian residents who are beneficial owners of the foreign financial assets pursuant to Italian money laundering provisions, even if they do not directly hold the foreign asset abroad.  Participant is advised to consult a personal legal advisor to ensure compliance with applicable reporting requirements.

 

Foreign Asset Tax Information .  The value of the financial assets held outside of Italy (including Shares) by Italian residents is subject to a foreign asset tax.  The taxable amount will be the fair market value of the financial assets ( e.g. , Shares acquired under the Plan) assessed at the end of the calendar year.

 

JAPAN

 

Notifications

 

Foreign Asset/Account Reporting Information .  Japanese residents are required to report details of any assets held outside of Japan as of December 31, including Shares acquired under the Plan, to the extent such assets have a total net fair market value exceeding a certain threshold.  Such report will be due by March 15 each year.  Participant is responsible for complying with this reporting obligation if applicable to Participant and Participant should consult Participant’s personal tax advisor in this regard.

 

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KAZAKHSTAN

 

There are no country-specific terms and conditions.

 

KOREA

 

Notifications

 

Exchange Control Information.  Korean residents who realize certain amounts from the settlement of Dividend Equivalents, the sale of Shares or the receipt of any dividends in a single transaction must repatriate the proceeds to Korea within three years of the sale or receipt.

 

Foreign Asset/Account Reporting Information.  Korean residents must declare all foreign financial accounts ( i.e. , non-Korean bank accounts, brokerage accounts, etc.) to the Korean tax authority and file a report with respect to such accounts if the monthly balance of such accounts exceeds a certain threshold on any month-end during a calendar year.  Participant should consult with his or her personal tax advisor to determine his or her personal reporting obligations.

 

LATVIA

 

There are no country-specific terms and conditions.

 

LITHUANIA

 

There are no country-specific terms and conditions.

 

MALAYSIA

 

Terms and Conditions

 

Data Privacy .  The following provision replaces Section 3.3 of the Award Agreement:

 

Participant hereby explicitly, voluntarily and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other Restricted Stock Unit grant materials by and among, as applicable, the Company and the Employer for the purpose of implementing, administering and managing the Plan.

 

Participant may have previously provided the Company and the Employer, and the same may hold certain personal information about Participant, including, but not limited to, name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, the fact and condition of Participant’s participation in the Plan, details of all awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

 

Participant also authorizes any transfer of Data to Fidelity Investments, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan.  Participant acknowledges that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country, which may not provide the same level of protection to Data.  Participant understands that if Participant resides outside the United States, Participant may request a list with the names and addresses of any potential recipients of the Data by contacting Participant’s local human resources

 

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representative.  Participant authorizes the Company, Fidelity Investments and any other possible recipients which may assist the Company (presently or in the future) with the implementation, administration and management of the Plan, and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan.  Participant understands that Data will be held only as long as is necessary to implement, administer and manage the Plan.  Participant understands that if Participant resides outside the United States, Participant may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant’s local human resources representative, Maniarasu Muniandy, whose contact details are (phone number 603 7884 2840) and (email address mmuniandy@mmm.com).  Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis.  If Participant does not consent, or if Participant later seeks to revoke Participant’s consent, Participant’s service and career with the Employer will not be affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant Participant RSUs or other equity awards or administer or maintain such awards.  Therefore, Participant understands that refusing or withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan.  For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that Participant may contact Participant’s local human resources representative.

 

Bahasa Malaysia Translation

 

Anda dengan ini secara eksplicit, secara sukarela dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadi anda seperti yang dinyatakan dalam Perjanijiandan apa-apa Unit Saham Terbatas dan bahan geran yang lain oleh dan di antara, sebagaimana yang berkenaan, Syarikat dan Majikan anda untuk tujuan membantu dalam pelaksanaan, pentadbiran dan pengurusan Pelan tersebut .

 

Sebelum ini, anda mungkin telah membekalkan Syarikat dan Majikan anda yang mungkin memegang, maklumat peribadi tertentu tentang anda, termasuk, tetapi tidak terhad kepada, namanya , alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa syer dalam saham atau jawatan pengarah yang dipegang dalam Syarikat, fakta dan syarat-syarat penyertaan anda dalam Pelan , butir-butir semua Anugerah atau apa-apa hak lain untuk syer dalam saham yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun yang belum dijelaskan bagi faedah anda, untuk tujuan melaksanakan, mentadbir dan menguruskan Pelan tersebut (“Data”) .

 

Anda juga memberi kuasa untuk membuat apa-apa pemindahan Data kepada Fidelity Investments, atau pembekal perkhidmatan pelan saham lain yang dipilih oleh Syarikat pada masa depan untuk membantu Syarikat dalam pelaksanaan, pentadbiran dan pengurusan Pelan. Anda mengakui bahawa penerima-penerima Data ini mungkin berada di Amerika Syarikat atau di tempat lain, dan bahawa negara penerima (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara anda, yang mungkin tidak boleh memberi tahap perlindungan yang sama kepada Data. Anda fahami bahawa sekiranya anda menetap di luar Amerika Syarikat, anda boleh meminta senarai nama dan alamat mana-mana penerima Data dengan menghubungi wakil sumber manusia tempatan anda. Anda memberi kuasa kepada Syarikat, Fidelity Investments dan mana-mana penerima lain yang mungkin membantu Syarikat (pada masa kini atau masa depan) untuk melaksanakan, mentadbir dan menguruskan Pelan, dan mana-mana penerima lain yang mungkin membantu Syarikat (pada masa kini atau masa depan) untuk melaksanakan, mentadbir dan

 

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menguruskan Pelan untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, dengan tujuan untuk melaksanakan, mentadbir dan menguruskan Pelan tersebut. Anda fahami bahawa Data akan dipegang hanya untuk tempoh yang diperlukan untuk melaksanakan, mentadbir dan menguruskan Pelan tersebut. Anda fahami bahawa sekiranya anda menetap di luar Amerika Syarikat, anda boleh, pada bila-bila masa, melihat data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatan anda, Maniarasu Muniandy, di mana butir-butir hubungannya adalah (phone number 603 7884 2840) and (email address mmuniandy@mmm.com) . Selanjutnya, anda memahami bahawa anda memberikan persetujuan di sini secara sukarela. Jika anda tidak bersetuju, atau jika anda kemudian membatalkan persetujuan anda, perkhidmatan dan kerjaya anda dengan Majikan anda tidak akan terjejas; satunya akibat jika anda tidak bersetuju atau menarik balik persetujuan anda adalah bahawa Syarikat tidak akan dapat memberikan Anugerah atau anugerah ekuiti lain kepada anda atau mentadbir atau mengekalkan anugerah tersebut. Oleh itu, anda fahami bahawa keengganan atau penarikan balik persetujuan anda boleh menjejaskan keupayaan anda untuk mengambil bahagian dalam Pelan tersebut. Untuk maklumat lanjut mengenai akibat keengganan anda untuk memberikan keizinan atau penarikan balik keizinan, anda fahami bahawa anda boleh menghubungi wakil sumber manusia tempatan anda.

 

Director Notification Obligation.   If Participant is a director of a Malaysian Subsidiary, Participant is subject to certain notification requirements under the Malaysian Companies Act 1965.  Among these requirements is an obligation to notify the Malaysian Subsidiary in writing when Participant receives or disposes of an interest ( e.g. , RSUs or Shares) in the Company or any related company.  This notification must be made within 14 days of receiving or disposing of any interest in the Company or any related company.

 

MEXICO

 

Terms and Conditions

 

Acknowledgment of the Agreement .   By participating in the Plan, Participant acknowledges that Participant has received a copy of the Plan, has reviewed the Plan in its entirety and fully understands and accepts all provisions of the Plan.  Participant further acknowledges that Participant has read and expressly approves the terms and conditions set forth in the Nature of Grant paragraph of the Award Agreement, in which the following is clearly described and established: (i) Participant’s participation in the Plan does not constitute an acquired right; (ii) the Plan and Participant’s participation in the Plan are offered by the Company on a wholly discretionary basis; (iii) Participant’s participation in the Plan is voluntary; and (iv) the Company and its Subsidiaries are not responsible for any decrease in the value of the underlying Shares.

 

Labor Law Policy and Acknowledgment .  By participating in the Plan, Participant expressly recognizes that 3M Company, with registered offices at 3M Center, St. Paul, Minnesota 55144, USA, is solely responsible for the administration of the Plan and that Participant’s participation in the Plan and acquisition of Shares does not constitute an employment relationship between Participant and the Company since Participant is participating in the Plan on a wholly commercial basis.  Based on the foregoing, Participant expressly recognizes that the Plan and the benefits that Participant may derive from participation in the Plan do not establish any rights between Participant and the Company and do not form part of the employment conditions and/or benefits provided by the Company and any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of Participant’s employment.

 

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Participant further understands that Participant’s participation in the Plan is as a result of a unilateral and discretionary decision of the Company; therefore, the Company reserves the absolute right to amend and/or discontinue Participant’s participation at any time without any liability to Participant.

 

Finally, Participant hereby declares that Participant does not reserve any action or right to bring any claim against the Company for any compensation or damages regarding any provision of the Plan or the benefits derived under the Plan, and Participant therefore grants a full and broad release to the Company, its Subsidiaries, branches, representation offices, its shareholders, officers, agents or legal representatives with respect to any claim that may arise.

 

Términos y Condiciones

 

Reconocimiento del Contrato.   Al participar en el Plan, usted reconoce que ha recibido una copia del Plan, que ha revisado el Plan en su totalidad, y que entiende y acepta en su totalidad, todas y cada una de las disposiciones del Plan.  Asimismo reconoce que ha leído y aprueba expresamente los términos y condiciones señalados en el párrafo titulado Naturaleza de la Oferta en el Convenio, en lo que claramente se describe y establece lo siguiente: (i) su participación en el Plan no constituye un derecho adquirido; (ii) el Plan y su participación en el Plan son ofrecidos por la Compañía sobre una base completamente discrecional; (iii) su participación en el Plan es voluntaria; y (iv) la Compañía y sus Afiliadas no son responsables de ninguna por la disminución en el valor de las Acciones subyacentes.

 

Política de Legislación Laboral y Reconocimiento.   Al participar en el Plan, usted reconoce expresamente que 3M Company, con oficinas registradas en 3M Center, St. Paul, Minnesota 55144, Estados Unidos de América, es la única responsable por la administración del Plan, y que su participación en el Plan, así como la adquisición de las Acciones, no constituye una relación laboral entre usted y la Compañía, debido a que usted participa en el plan sobre una base completamente mercantil.  Con base en lo anterior, usted reconoce expresamente que el Plan y los beneficios que pudiera obtener por su participación en el Plan, no establecen derecho alguno entre usted y la Compañía, y no forman parte de las condiciones y/o prestaciones laborales que la Compañía ofrece, y que las modificaciones al Plan o su terminación, no constituirán un cambio ni afectarán los términos y condiciones de su relación laboral.

 

Asimismo usted entiende que su participación en el Plan es el resultado de una decisión unilateral y discrecional de la Compañía; por lo tanto, la Compañía se reserva el derecho absoluto de modificar y/o suspender su participación en cualquier momento, sin que usted incurra en responsabilidad alguna.

 

Finalmente, usted declara que no se reserva acción o derecho alguno para interponer reclamación alguna en contra de la Compañía, por concepto de compensación o daños relacionados con cualquier disposición del Plan o de los beneficios derivados del Plan, y por lo tanto, usted libera total y ampliamente de toda responsabilidad a la Compañía, a sus Afiliadas, sucursales, oficinas de representación, sus accionistas, funcionarios, agentes o representantes legales, con respecto a cualquier reclamación que pudiera surgir.

 

MOROCCO

 

Terms and Conditions

 

Cash Settlement.  Notwithstanding any provision in the Award Agreement to the contrary, any vested RSUs shall be settled by payment in cash or its equivalent of an amount equal in value to Shares subject to the vested RSUs.  Any references to the issuance of Shares in any documents related to the RSUs shall not be applicable.  Notwithstanding the foregoing, the Company reserves the right to settle RSUs in Shares, in its discretion.

 

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NETHERLANDS

 

Terms and Conditions

 

Cash Settlement.  Notwithstanding any provision in the Award Agreement to the contrary, any vested RSUs shall be settled by payment in cash or its equivalent of an amount equal in value to Shares subject to the vested RSUs.  Any references to the issuance of Shares in any documents related to the RSUs shall not be applicable.  Notwithstanding the foregoing, the Company reserves the right to settle RSUs in Shares, in its discretion.

 

Notifications

 

 

NEW ZEALAND

 

Terms and Conditions

 

Shares Issued Upon Vesting.  Any Shares issued upon vesting of the RSUs shall be shares acquired by the Company on the New York Stock Exchange or otherwise ( i.e., treasury shares).

 

NORWAY

 

There are no country-specific terms and conditions.

 

PAKISTAN

 

Terms and Conditions

 

Cash Settlement.  Notwithstanding any provision in the Award Agreement to the contrary, any vested RSUs shall be settled by payment in cash or its equivalent of an amount equal in value to Shares subject to the vested RSUs.  Any references to the issuance of Shares in any documents related to the RSUs shall not be applicable.  Notwithstanding the foregoing, the Company reserves the right to settle RSUs in Shares, in its discretion.

 

PANAMA

 

Terms and Conditions

 

Securities Law Notice.  The RSUs and the underlying Shares issued at vesting are not subject to registration under Panamanian law as they are not intended for the public, but solely for Participant’s benefit.

 

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PERU

 

Terms and Conditions

 

Securities Law Notice. The grant of RSUs is considered a private offering in Peru; therefore, it is not subject to registration in Peru.

 

Labor Law Acknowledgment. By accepting the RSUs, Participant acknowledges that the RSUs are being granted ex gratia with the purpose of rewarding Participant.

 

PHILIPPINES

 

Terms and Conditions

 

Cash Settlement.  Notwithstanding any provision in the Award Agreement to the contrary, any vested RSUs shall be settled by payment in cash or its equivalent of an amount equal in value to Shares subject to the vested RSUs.  Any references to the issuance of Shares in any documents related to the RSUs shall not be applicable.  Notwithstanding the foregoing, the Company reserves the right to settle RSUs in Shares, in its discretion.

 

POLAND

 

Notifications

 

Foreign Asset/Account Reporting Information.   If Participant maintains bank or brokerage accounts holding cash and foreign securities (including Shares) outside of Poland, Participant will be required to report information to the National Bank of Poland on transactions and balances in such accounts if the value of such cash and securities exceeds a certain threshold.  If required, such reports must be filed on a quarterly basis on special forms available on the website of the National Bank of Poland.

 

Exchange Control Information.  The transfer of funds in excess of a certain amount into Poland must be made through a bank account in Poland.  Participant understands that he or she is required to store all documents connected with any foreign exchange transactions for a period of five years, as measured from the end of the year in which such transaction occurred.

 

Participant should consult with his or her personal legal advisor to determine what he or she must do to fulfill any applicable reporting/exchange control duties.

 

PORTUGAL

 

Terms and Conditions

 

Consent to Receive Information in English.  Participant hereby expressly declares that Participant has full knowledge of the English language and has read, understood and fully accepted and agreed with the terms and conditions established in the Plan and Agreement.

 

Conhecimento da Lingua.  Por meio do presente, eu declaro expressamente que tem pleno conhecimento da língua inglesa e que li, compreendi e livremente aceitei e concordei com os termos e condições estabelecidas no Plano e no Acordo.

 

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ROMANIA

 

Notifications

 

Exchange Control Information.   Any transfer of funds exceeding a certain amount (whether via one transaction or several transactions that appear to be linked to each other) must be reported to the National Office for Prevention and Control of Money Laundering on specific forms by the relevant bank or financial institution.  If Participant deposits proceeds from the settlement of Dividend Equivalents, the sale of Shares or the receipt of dividends in a bank account in Romania, Participant may be required to provide the Romanian bank assisting with the transaction with appropriate documentation explaining the source of the income.  Participant should consult with his or her legal advisor to determine whether Participant will be required to submit such documentation to the Romanian bank.

 

RUSSIA

 

Terms and Conditions

 

Cash Settlement.  Notwithstanding any provision in the Award Agreement to the contrary, any vested RSUs shall be settled by payment in cash or its equivalent of an amount equal in value to Shares subject to the vested RSUs.  Any references to the issuance of Shares in any documents related to the RSUs shall not be applicable.  Notwithstanding the foregoing, the Company reserves the right to settle RSUs in Shares, in its discretion.

 

Notifications

 

Securities Law Information.  This Agreement, the Plan and all other materials Participant may receive regarding participation in the Plan do not constitute advertising or an offering of securities in Russia.  Any issuance of Shares under the Plan has not and will not be registered in Russia and hence the Shares described in any Plan-related documents may not be offered or placed in public circulation in Russia. In no event will Shares issued to Participant under the Plan be delivered to Participant in Russia.

 

Exchange Control Information.  Under current exchange control regulations, Participant must repatriate the cash proceeds resulting from the settlement of Dividend Equivalents or the sale of the Shares acquired under the Plan to Russia.  Such proceeds must be initially credited to Participant through a foreign currency account opened in Participant’s name at an authorized bank in Russia.  After the funds are initially received in Russia, they may be further remitted to a foreign bank in accordance with Russian exchange control laws.  However, dividends can be held in a foreign currency account at a foreign individual bank account opened in certain countries (including the United States).

 

Participant is strongly advised to contact his or her personal advisor regarding his or her obligations resulting from participation in the Plan as significant penalties may apply in the case of non-compliance with exchange control requirement and because such exchange control requirements may change.

 

Foreign Asset/Account Reporting Information.  Russian residents will be required to notify the Russian tax authorities within one month of opening or closing a foreign bank account or of changing any account details.  Russian residents are also required to file with the Russian tax authorities reports of the transactions in their foreign bank accounts.  Participant should consult with his or her personal tax advisor for additional information about these reporting obligations.

 

Anti-Corruption Information.  Anti-corruption laws prohibit certain public servants, their spouses and their dependent children from owning any foreign source financial instruments (e.g., shares of foreign

 

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companies such as the Company).  Accordingly, Participant should inform the Company if he or she is covered by these laws because Participant should not hold Shares acquired under the Plan.

 

Labor Law Information.  If Participant continues to hold Shares acquired at vesting of the RSUs after an involuntary Termination of Service, Participant may not be eligible to receive unemployment benefits in Russia.

 

SAUDI ARABIA

 

Terms and Conditions

 

Cash Settlement.  Notwithstanding any provision in the Award Agreement to the contrary, any vested RSUs shall be settled by payment in cash or its equivalent of an amount equal in value to Shares subject to the vested RSUs.  Any references to the issuance of Shares in any documents related to the RSUs shall not be applicable.  Notwithstanding the foregoing, the Company reserves the right to settle RSUs in Shares, in its discretion.

 

SINGAPORE

 

Terms and Conditions

 

Securities Law Notice.  The offer of the Plan, the grant of the RSUs, and the issuance of the underlying Shares at vesting are being made pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”).  The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore.  Participant should note that the RSUs are subject to section 257 of the SFA and Participant will not be able to make any subsequent offer to sell or sale of the Shares in Singapore, unless such offer or sale is made (1) after six (6) months from the Grant Date or (2) pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA.

 

Chief Executive Officer and Director Notification.  Participant understands and acknowledges that if Participant is the Chief Executive Officer (“CEO”), director, associate director or shadow director of a Singapore Subsidiary, Participant is subject to certain notification requirements under the Singapore Companies Act, regardless of whether Participant is a Singapore resident or employed in Singapore.  Among these requirements is an obligation to notify the Singapore Subsidiary in writing when Participant receives an interest (e.g., RSUs or Shares) in the Company.  In addition, Participant must notify the Singapore Subsidiary when Participant sells Shares (including when Participant sells Shares acquired under the Plan).  These notifications must be made within two days of acquiring or disposing of any interest in the Company.  In addition, a notification must be made of Participant’s interests in the Company within two days of becoming a CEO, director, associate director or shadow director.

 

SOUTH AFRICA

 

Terms and Conditions

 

Cash Settlement.  Notwithstanding any provision in the Award Agreement to the contrary, any vested RSUs shall be settled by payment in cash or its equivalent of an amount equal in value to Shares subject to the vested RSUs.  Any references to the issuance of Shares in any documents related to the RSUs shall not be applicable.  Notwithstanding the foregoing, the Company reserves the right to settle RSUs in Shares, in its discretion.

 

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