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Inaddition,theCompanyisnotabletoestimateapossiblelossorrangeoflossinexcessoftheestablishedaccrualsatthistime.
NOTE15.Stock-BasedCompensation
The3M2008Long-TermIncentivePlanprovidesfortheissuanceordeliveryofupto100millionsharesof3Mcommonstock
(includingadditionalshareholderapprovalssubsequentto2008)pursuanttoawardsgrantedundertheplan.Awardsunderthisplan
maybeissuedintheformofincentivestockoptions,nonqualifiedstockoptions,progressivestockoptions,stockappreciationrights,
restrictedstock,restrictedstockunits,otherstockawards,andperformanceunitsandperformanceshares.Awardsdenominatedin
sharesofcommonstockotherthanoptionsandstockappreciationrights,perthe2008Plan,countagainstthe100millionsharelimit
as3.38sharesforeveryonesharecoveredbysuchaward(forfullvalueawardswithgrantdatespriortoMay11,2010),as2.87
sharesforeveryonesharecoveredbysuchaward(forfullvalueawardswithgrantdatesonorafterMay11,2010,andpriorto
May8,2012),oras3.50sharesforeveryonesharecoveredbysuchaward(forfullvalueawardswithgrantdatesofMay8,2012or
later).Theremainingtotalsharesavailableforgrantunderthe2008LongTermIncentivePlanProgramare20,328,681asof
December31,2015.Therewereapproximately9,200participantswithoutstandingoptions,restrictedstock,orrestrictedstockunits
atDecember31,2015.
TheCompany’sannualstockoptionandrestrictedstockunitgrantismadeinFebruarytoprovideastrongandimmediatelink
betweentheperformanceofindividualsduringtheprecedingyearandthesizeoftheirannualstockcompensationgrants.Thegrant
toeligibleemployeesusestheclosingstockpriceonthegrantdate.Accountingrulesrequirerecognitionofexpenseunderanon-
substantivevestingperiodapproach,requiringcompensationexpenserecognitionwhenanemployeeiseligibletoretire.Employees
areconsideredeligibletoretireatage55andafterhavingcompletedfiveyearsofservice.Thisretiree-eligiblepopulationrepresents
35percentofthe2015annualstock-basedcompensationawardexpensedollars;therefore,higherstock-basedcompensationexpense
isrecognizedinthefirstquarter.3Malsohasgrantedprogressive(reload)options.Theseoptionsarenonqualifiedstockoptionsthat
weregrantedtocertainparticipantsunderthe1997or2002ManagementStockOwnershipProgram,butforwhichthereloadfeature
waseliminatedin2005(onaprospectivebasisonly).
Inadditiontotheannualgrants,theCompanymakesotherminorgrantsofstockoptions,restrictedstockunitsandotherstock-based
grants.TheCompanyissuescashsettledrestrictedstockunitsandstockappreciationrightsincertaincountries.Thesegrantsdonot
resultintheissuanceofcommonstockandareconsideredimmaterialbytheCompany.
Amountsrecognizedinthefinancialstatementswithrespecttostock-basedcompensationprograms,whichincludestockoptions,
restrictedstock,restrictedstockunits,performanceshares,andtheGeneralEmployees’StockPurchasePlan(GESPP),areprovided
inthefollowingtable.Capitalizedstock-basedcompensationamountswerenotmaterialfortheyearsended2015,2014and2013.
Stock-BasedCompensationExpense
YearsendedDecember31
(Millions) 2015 2014 2013
Costofsales $ 46 $ 47 $ 27
Selling,generalandadministrativeexpenses 185 192 183
Research,developmentandrelatedexpenses 45 41 30
Stock-basedcompensationexpenses $ 276 $ 280 $ 240
Incometaxbenefits $ (87) $ (79) $ (71)
Stock-basedcompensationexpenses,netoftax $ 189 $ 201 $ 169
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