EMPLOYMENT AGREEMENT
                      Minnesota Mining and Manufacturing Company
                               W. James McNerney, Jr.
                            EMPLOYMENT AGREEMENT
This  EMPLOYMENT AGREEMENT (the "Agreement") dated as of December 4, 2000
(the   "Agreement  Date")  between  Minnesota  Mining  and  Manufacturing
Company, a corporation incorporated under the laws of Delaware, with  its
corporate  headquarters  in  St.  Paul, Minnesota  (the  "Company"),  and
W. James McNerney, Jr. ("Executive").
WHEREAS,  the Company desires to employ Executive to serve as  its  Chief
Executive  Officer and Chairman of its Board, upon the terms and  subject
to the conditions set forth herein;
NOW,   THEREFORE,  in  consideration  of  the  premises  and  the  mutual
agreements  contained herein, the Company and Executive hereby  agree  as
                                   Article I.
The  terms set forth below have the following meanings (such meanings  to
be  applicable  to  both  the  singular and plural  forms,  except  where
otherwise expressly indicated):
1.1   "Accrued Annual Bonus" means the amount of any Annual Bonus  earned
but  not yet paid with respect to the Fiscal Year ended prior to the Date
of Termination.
1.2   "Accrued Base Salary" means the amount of Executive's  Base  Salary
which is accrued but not yet paid as of the Date of Termination.
1.3  "Actual Company Pension Benefits" means a single life annuity amount
commencing at age 62 and payable in monthly installments to Executive for
his  life  of the Actuarial Equivalent of the amounts that the  Executive
has  actually  received, or is entitled to receive,  from  the  Company's
Pension Plans.
1.4  "Actual Prior Employer Pension Benefits" means a single life annuity
amount  commencing  at  age  62 and payable in  monthly  installments  to
Executive  for his life of the Actuarial Equivalent of the  amounts  that
the  Executive has actually received, or is entitled to receive, from the
Prior Employer's Pension Plans.
1.5   "Actuarial  Equivalent"  of  any  amount  shall  be  determined  in
accordance  with generally accepted actuarial principles  using  interest
rate,  mortality  and  other  methods and assumptions  that  the  Pension
Benefit Guaranty Corporation ("PBGC") would use in determining the  value
of an immediate annuity payment of benefits, or if such interest rate and
mortality assumptions are no longer published by the PBGC, interest  rate
and   mortality  assumptions  determined  in  a  manner  as  similar   as
practicable to the manner by
<PAGE> 58
which the PBGC's interest rate and mortality assumptions were determined
immediately prior to the PBGC's cessation of publication of such assumptions.
1.6   "Affiliate"  means  any Person directly or indirectly  controlling,
controlled by, or under direct or indirect common control with,  Company.
For  the  purposes of this definition, the term "control" when used  with
respect to any Person means the power to direct or cause the direction of
management  or  policies of such Person, directly or indirectly,  whether
through the ownership of voting securities, by contract or otherwise.
1.7   "Agreement" -- see the recitals to this Agreement.
1.8   "Agreement Date" means the date specified in the recitals  to  this
1.9   "Anniversary Date" means any annual anniversary of the Commencement
1.10 "Annual Bonus" -- see Section 4.2(a).
1.11  "Annualized Total Compensation" means, as of any date, the  sum  of
Executive's  Base  Salary  as of such date and the  Target  Annual  Bonus
applicable to the year that includes such date.
1.12 "Base Salary" -- see Section 4.1.
1.13 "Beneficiary" -- see Section 10.5.
1.14 "Board" means the Company's Board of Directors.
1.15 "Cause" means any of the following:
      (a) Executive's conviction of:
          (i)  a felony, or
         (ii)  a  misdemeanor  excluding a petty  misdemeanor  (as
               defined in Minnesota or a comparable misdemeanor  under
               the laws of another state) involving fraud, dishonesty
               or moral turpitude,
      other  than  Limited  Vicarious  Liability  or  a  routine  traffic
       (b)  Executive's material breach of this Agreement, provided  that
such breach is not cured within 10 days after delivery to Executive of  a
notice from the Board requesting cure,
       (c) the willful or intentional material misconduct by Executive in
the performance of his duties under this Agreement, or
       (d)  the willful or intentional failure by Executive to materially
comply (to the best of his ability) with a specific, written direction of
the  Board  that  is  consistent with normal business  practice  and  not
inconsistent   with  this  Agreement  and  Executive's   responsibilities
hereunder, provided that such refusal or failure (i) is not cured to  the
best of Executive's ability within 10 days after the delivery thereof  to
Executive  and  (ii) is not based on Executive's good  faith  belief,  as
expressed by written notice to the Board given within such 10-day period,
that  the implementation of such direction of the Board would be unlawful
or unethical.
For  purposes  of  the preceding sentence, "Limited Vicarious  Liability"
shall mean any liability which is (i) based on acts of the Company for which
<PAGE> 59
Executive is responsible solely as a result of his office(s)  with
the  Company  and (ii) provided that (x) he was not directly involved  in
such  acts and either had no prior knowledge of such intended actions  or
promptly  acted  reasonably and in good faith to attempt to  prevent  the
acts causing such liability or (y) he did not have a reasonable basis  to
believe that a law was being violated by such acts.
For purposes of clause (b) and (c) above, Cause shall not include any one
or more of the following:
(i)  bad judgment,
(ii) negligence,
(iii)  any act or omission that Executive believed in good faith to  have
been in or not opposed to the interest of the Company (without intent  of
Executive to gain therefrom, directly or indirectly, a profit to which he
was not legally entitled), or
(iv)      any act or omission of which any member of the Board who is not
a party to such act or omission has had actual knowledge for at least six
1.16  "Change of Control" means any of the following events:
  (a)  any  person (as such term is used in Rule 13d-5 under the Exchange
Act)  or  group (as such term is defined in Sections 3(a)(9) and 13(d)(3)
of  the  Exchange  Act), other than a Subsidiary or any employee  benefit
plan  (or  any  related  trust) of Company or a Subsidiary,  becomes  the
beneficial owner of 20% or more of the Common Shares or of securities  of
Company  that are entitled to vote generally in the election of directors
of Company ("Voting Securities") representing 20% or more of the combined
voting power of all Voting Securities of Company;
 (b) individuals who, as of the Agreement Date, constitute the Board (the
"Incumbent Directors") cease for any reason to constitute at least 50% of
the  members  of the Board; provided that any individual  who  becomes  a
director  after  the  Agreement Date whose  election  or  nomination  for
election  by  Company's shareholders was approved by a  majority  of  the
members  of the Incumbent Board (other than an election or nomination  of
an individual whose initial assumption of office is in connection with an
actual  or threatened "election contest" relating to the election of  the
directors  of  Company (as such terms are used in Rule 14a-11  under  the
Exchange  Act), "tender offer" (as such term is used in Section 14(d)  of
the  Exchange  Act)  or a proposed Merger (as defined  below))  shall  be
deemed to be members of the Incumbent Board;
 (c) approval by the stockholders of Company of either of the following:
     (i)  a  merger, reorganization, consolidation or similar transaction
(any  of  the foregoing, a "Merger") as a result of which the individuals
and  entities who were the respective beneficial owners of Common  Shares
and  Voting Securities of Company immediately before such Merger are  not
expected to beneficially own, immediately after such Merger, directly  or
indirectly,  more  than 50% of, respectively, the common  stock  and  the
combined  voting  power  of  the  Voting Securities  of  the  corporation
resulting  from  such  Merger in substantially the  same  proportions  as
immediately before such Merger, or
    (ii) a plan of liquidation of Company or a plan or agreement for  the
sale  or  other disposition of all or substantially all of the assets  of
Company,  other  than such a sale or disposition to an entity  which  is,
directly or indirectly more than 50% owned by the Company or an entity of
which  the  individuals  and entities who were the respective  beneficial
owners  of  Common
<PAGE> 60
Shares and Voting Securities of  Company  immediately
before  such  sale  or other disposition beneficially  owned  immediately
after such sale or other disposition directly or indirectly more than 50%
of,  respectively, the common stock and the combined voting power of  the
Voting  Securities  of  the  corporation to  which  such  sale  or  other
disposition was made.
Notwithstanding the foregoing, there shall not be a Change in Control if,
in  advance  of such event, Executive agrees in writing that  such  event
shall not constitute a Change in Control.
1.17   "Code"  means the Internal Revenue Code of 1986, as  amended  from
time to time.
1.18 "Commencement Date" means January 1, 2001.
1.19 "Committee" means the Compensation Committee of the Board.
1.20  "Common Shares" means the common shares, par value $0.01 per share,
of Company.
1.21 "Company" -- see the recitals to this Agreement.
1.22 "Competitor" -- see Section 9.1(b).
1.23 "Confidential Information" -- see Section 9.1(d).
1.24  "Date of Termination" means the effective date of a Termination  of
Employment for any reason, including death or Disability, whether by  the
Company or by Executive.
1.25 "Disability" means a mental or physical condition which, in the good
faith   opinion   of  the  Board,  renders  Executive,  with   reasonable
accommodation,  unable  or  incompetent to carry  out  the  material  job
responsibilities  which Executive held or the material  duties  to  which
Executive was assigned at the time the disability was incurred, which has
existed for at least three months and which in the opinion of a physician
mutually  agreed  upon  by Company and Executive (provided  that  neither
party  shall  unreasonably withhold such agreement)  is  expected  to  be
permanent  or to last for an indefinite duration or a duration in  excess
of six months.
1.26 "Employment Period" -- see Section 3.1.
1.27  "Exchange Act" means the United States Securities Exchange  Act  of
1.28 "Executive" -- see the recitals to this Agreement.
1.29 "Expiration Date" -- see Section 3.1.
1.30 "Expiration Notice" -- see Section 3.1.
1.31  "Fair  Market Value" of a Common Share means, as of any  date,  the
average of the high and low prices of such security on such date reported
on the New York Stock Exchange Composite Transactions, rounded upwards to
the  nearest  $0.05,  or if not so reported for the specified  date,  the
immediately preceding date for which the average is reported.
1.32  "Fiscal  Year" means the calendar year period ending each  December
"Good  Reason"  means the occurrence of any one of the  following  events
unless Executive specifically agrees in writing that such event shall not
be Good Reason:
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  (a) any material breach of the Agreement by the Company, including:
    (i) the material failure of the Company to comply with the provisions
of Articles II, III, IV, V, VI or VII of this Agreement;
    (ii)  any material adverse change in the status, responsibilities  or
perquisites of Executive;
   (iii)  any  failure to nominate or elect Executive as Chief  Executive
Officer of the Company or as Chairman of the Company's Board;
   (iv) causing or requiring Executive to report to anyone other than the
     (v)  assignment of duties materially inconsistent with his positions
and duties described in this Agreement; or
   (vi) the Company giving an Expiration Notice pursuant to Section 3.1,
provided,  however,  that  no  act or omission  described  in  Subsection
1.33(a)  shall constitute Good Reason unless Executive gives  Company  30
days'  prior written notice of such act or omission and the Company fails
to  cure  such  act  or  omission within the 30-day period  (except  that
Executive  shall  not  be  required to provide such  notice  in  case  of
intentional acts or omissions by the Company),
  (b)  the failure of the Company to assign this Agreement to a successor
to  the  Company or failure of a successor to the Company  to  explicitly
assume and agree to be bound by the Agreement, or
  (c) the requiring of Executive to be principally based at any office or
location more than 30 miles from the current corporate offices of Company
in St. Paul, Minnesota.
1.34  "Hypothetical  Prior  Employer Pension Benefits"  means  a  benefit
payable in the form of a single life annuity amount commencing at age  62
and  payable in monthly installments to Executive for his life  equal  to
one-twelfth (1/12th) multiplied by 50% of the Executive's highest average
annual  compensation, where "highest average annual compensation" is  the
annual  average of the Executive's compensation for the three consecutive
calendar  years out of the last ten calendar years preceding  Termination
of  Employment during which such average is the highest.  For purposes of
determining Executive's highest average annual compensation, compensation
paid  to  Executive by the Company or the Prior Employer shall  be  taken
into  account to the same extent such compensation would have been  taken
into   account  for  purposes  of  such  determination  under  the  Prior
Employer's  Pension Plans if such compensation were with or paid  by  the
Prior  Employer.   In  addition, solely for purposes of  calculating  the
Executive's  compensation for this purpose, in the event of a Termination
Without  Cause  or  a  Termination for Good Reason,  Executive  shall  be
treated as having earned the Severance Payment ratably over the course of
the Severance Period.
1.35 "Including" means including without limitation.
1.36 "Incumbent Directors" -- see Section 1.16(b).
1.37 "Initial Option" -- see Section 5.1.
1.38 "Initial Performance Units" -- see Section 5.5.
1.39 "Limited Vicarious Liability" -- see Section 1.15.
<PAGE> 62
1.40 "Make Whole Option" -- see Section 5.1.
1.41 "Make Whole Restricted Stock" -- see Section 5.8.
1.42 "Maximum Annual Bonus" -- see Section 4.2(b).
1.43 "Maximum Annual Goals" -- see Section 4.2(b).
1.44 "Merger" -- see Section 1.16(c).
1.45 "Notice of Consideration" -- see Section 8.1(b).
1.46 "Option" means an option to purchase Common Shares.
1.47 "Option Term" -- see Section 5.3(b).
1.48 "Other Accrued Benefit" means any right to benefits or payments  not
expressly  provided  herein under the terms of the  governing  policy  or
program which has irrevocably accrued as of the Date of Termination.
1.49 "PBGC" -- see Section 1.5.
1.50  "Pension  Plan" means a defined benefit plan which is  a  qualified
retirement  plan  under Code Section 401(a) or a nonqualified  retirement
plan or arrangement.
1.51  "Person"  means  any individual, sole proprietorship,  partnership,
joint   venture,   trust,   unincorporated   organization,   association,
corporation,   institution,  public  benefit   corporation,   entity   or
government instrumentality, division, agency, body or department.
1.52 "Prior Employer" means General Electric Company.
1.53 "Pro Rata Annual Bonus" means an amount payable in cash equal to the
product  of (a) the amount of the Target Annual Bonus to which  Executive
would  have been entitled if he had been employed by the Company  on  the
last day of the Fiscal Year that includes the Date of Termination and  if
Executive  had  achieved his Target Annual Goals for  such  Fiscal  Year,
multiplied  by  (b) a fraction of which the numerator is the  numbers  of
days  which  have  elapsed  in  such Fiscal  Year  through  the  Date  of
Termination and the denominator is 365.
1.54 "Pro Rata Retirement Benefit" -- see Section 7.1(b).
1.55  "Severance  Multiple"  means, if  Executive  receives  a  Severance
Payment  under  Section  8.3, the number by which Executive's  Annualized
Total Compensation is multiplied under Section 8.3(b).
1.56  "Severance Payment" means the payment of a multiple of  Executive's
Annualized Total Compensation pursuant to Section 8.3(b).
1.57  "Severance Period" means the number of years equal to the Severance
1.58 "Stock Ownership Program" -- see Section 5.1.
1.59 "Subsequent Options" -- see Section 5.2.
1.60 "Subsequent Performance Units" -- see Section 5.7.
<PAGE> 63
1.61  "Subsidiary" means, with respect to any Person, (a) any corporation
of  which  more than 50% of the outstanding capital stock having ordinary
voting  power  to  elect a majority of the board  of  directors  of  such
corporation  (irrespective of whether, at the time, stock  of  any  other
class  or  classes  of such corporation shall have or might  have  voting
power  by  reason of the happening of any contingency) is  at  the  time,
directly or indirectly, owned by such Person, and (b) any partnership  in
which such Person has a direct or indirect interest (whether in the  form
of  voting or participation in profits or capital contribution)  of  more
than 50%.
1.62 "Supplemental Retirement Benefit" -- see Section 7.1.
1.63 "Target Annual Bonus" -- see Section 4.2(b).
1.64 "Target Annual Goals" -- see Section 4.2(b).
1.65 "Taxes" means the incremental United States federal, state and local
income, excise and other taxes (including interest and penalties) payable
by Executive with respect to any applicable item of income.
1.66  "Tax  Gross-Up Payment" means an amount payable to  Executive  such
that  after  payment  of  Taxes on such amount there  remains  a  balance
sufficient to pay the Taxes being reimbursed.
1.67  "Termination For Good Reason" means a Termination of Employment  by
Executive  for  a  Good  Reason, whether during or after  the  Employment
1.68 "Termination of Employment" means a termination by the Company or by
Executive of Executive's employment by the Company.
1.69  "Termination Without Cause" means a Termination  of  Employment  by
Company  for  any  reason  other  than  Cause  or  Executive's  death  or
Disability, whether during or after the Employment Period.
1.70 "2001 Option" -- see Section 5.2.
1.71 "Voting Securities" -- see Section 1.16(a).
1.72  "Withholding Taxes" means any federal, state, provincial, local  or
foreign  withholding taxes and other deductions required to  be  paid  in
accordance  with  applicable  law  by  reason  of  compensation  received
pursuant to this Agreement.
1.73  "Year of Service" shall mean the 12-month period beginning  on  the
Commencement Date and each 12-month period beginning on each  Anniversary
Date  thereafter in which Executive remains continuously employed by  the
Company.   In  the event of a Termination Without Cause or a  Termination
for  Good  Reason  (whether  during  or  after  the  Employment  Period),
Executive  shall  also be credited with the number of  Years  of  Service
equal to the Severance Period.
                                  Article II.
2.1   Duties.   The Company shall employ Executive during the  Employment
Period as its Chief Executive Officer.  Executive shall also be nominated
for  election  as a director of the Company at the earliest  opportunity,
and  upon such election the Board shall elect Executive to serve  as  its
Chairman  effective  January  1,  2001.  During  the  Employment  Period,
excluding  any  periods of disability, vacation, or sick leave  to  which
Executive  is  entitled,
<PAGE> 64
Executive shall  perform  the  duties  properly
assigned to him hereunder, shall devote substantially all of his business
time,  attention and effort to the affairs of the Company and  shall  use
his reasonable best efforts to promote the interests of the Company.
2.2   Other  Activities.   Executive may serve  on  corporate,  civic  or
charitable  boards  or  committees, deliver  lectures,  fulfill  speaking
engagements  or  teach at educational institutions,  or  manage  personal
investments, provided that such activities do not individually or in  the
aggregate materially interfere with the performance of Executive's duties
under this Agreement.
                          Article III.
                        EMPLOYMENT PERIOD
3.1    Employment   Period.    Subject  to  the  termination   provisions
hereinafter  provided,  the  term of Executive's  employment  under  this
Agreement (the "Employment Period") shall begin on the Commencement  Date
and  end  on  the Anniversary Date which is three years after such  date,
provided  that  for  the  period  from  the  Agreement  Date  until   the
Commencement Date, Executive shall be a part-time employee of the Company
providing the Company with such services as Executive determines  he  can
provide  consistent with Executive's obligations to the  Prior  Employer.
Notwithstanding  the  preceding  sentence,  commencing   on   the   first
Anniversary Date the Employment Period shall be extended each day by  one
day  to  create a new two year term until, at any time at  or  after  the
first  Anniversary Date, the Company or the Executive delivers a  written
notice  (an  "Expiration Notice") to the other party that  the  Agreement
shall  expire  on  a  date  specified  in  the  Expiration  Notice   (the
"Expiration  Date") that is not less than 24 months after  the  date  the
Expiration  Notice  is delivered by one party to the  other  party.   The
employment of Executive by the Company shall not be terminated other than
in accordance with Article VIII.
                           Article 4.
4.1   Salary.   The  Company shall pay Executive in accordance  with  the
normal  payroll  practices of the Company (but not less  frequently  than
monthly)  an  annual  salary  at a rate of  $1,300,000  per  year  ("Base
Salary")  beginning  on  the Commencement Date.   During  the  Employment
Period,  the Base Salary shall be reviewed at least annually and  may  be
increased  from  time to time as shall be determined  by  the  Committee,
after consultation with Executive.  Any increase in Base Salary shall not
limit  or  reduce any other obligation of the Company to Executive  under
this Agreement.  Base Salary shall not be reduced at any time without the
express written consent of Executive.
4.2  Annual Bonus.
    (a)  The  Company  shall pay to Executive an  annual  bonus  ("Annual
Bonus")  for each Fiscal Year which begins during the Employment  Period.
Executive shall be eligible for an Annual Bonus ranging from zero to  the
Maximum  Annual Bonus. Except as noted below, the Annual Bonus  shall  be
paid and otherwise subject to the terms of the Company's Executive Profit
Sharing Plan, as may be amended, and any successor to such plan.
    (b)  If  Executive achieves his target performance goals (the "Target
Annual  Goals"), as determined by the Committee on an annual basis  after
consulting with Executive, such Annual Bonus shall be designed to realize
$2,200,000 (the "Target Annual Bonus").  Such performance goals shall  be
set by the Committee
<PAGE> 65
within 90 days after the first day of the applicable
Fiscal  Year.   The actual amount of any Annual Bonus may fluctuate  with
the Company's performance.
    (c)  The  Company  shall pay the Annual Bonus in a payment  of  cash,
Common  Shares  (including restricted shares), or a  combination  thereof
determined  by  the  Committee at such times and in  such  manner  as  is
consistent  with the treatment of other senior executives of the  Company
and with the provisions of the Company's Executive Profit Sharing Plan or
its successor plan.
    (d)  Notwithstanding the above provisions of this  Section  4.2,  the
minimum  Annual  Bonus for the 2001 Fiscal Year shall  be  $2,400,000  of
which amount $1,440,000 shall be paid in cash and $960,000 shall be  paid
in nonforfeitable unrestricted or restricted Common Shares.
                           Article V.
5.1   Initial  and  Make  Whole Option Grants.  Company  has  granted  to
Executive,  effective  as of the Agreement Date, an  Option  to  purchase
400,000  Common Shares (the "Initial Option") and an option  to  purchase
200,000 Common Shares ("Make Whole Option"), subject to the terms of  the
Company's  1997  Management  Stock Ownership  Program  ("Stock  Ownership
5.2   Subsequent  Option Grants.  In May 2001 the Committee  shall  grant
Executive  an  Option ("2001 Option") to purchase such number  of  Common
Shares as shall result in the 2001 Option having a Black-Scholes value of
$7,000,000  as of the date of grant, subject to the terms and  conditions
of  the  Stock Ownership Program.  The Committee shall in its  discretion
consider Executive for possible future annual or other grants of  Options
("Subsequent  Options")  for  Fiscal  Year  2002  and  each  Fiscal  Year
thereafter  during the Employment Period, as determined by the  Committee
in  its  discretion based on Executive's performance and consistent  with
the treatment of other senior executives of the Company.  Such Subsequent
Options  shall be subject to the terms of the Stock Ownership Program  or
applicable successor program.
5.3  Terms and Conditions of Options.
   (a)  The exercise price of each Initial Option, Make Whole Option  and
2001  Option, respectively, shall be the Fair Market Value  of  a  Common
Share  as  of the Agreement Date (in the case of the Initial  Option  and
Make  Whole Option) and as of the date of grant (in the case of the  2001
   (b)  Each Initial Option, Make Whole Option and 2001 Option (i)  shall
have a term (the "Option Term") equal to 10 years commencing on its grant
date,  and  (ii)  shall  not  be transferable  by  Executive  during  his
lifetime, except as permitted by the Stock Ownership Program.
  (c) The Initial Option shall become exercisable in increments of 20% on
each of the first five Anniversary Dates, and the Make Whole Option shall
become exercisable in increments of one-third on each of the first  three
Anniversary  Dates,  if Executive remains continuously  employed  by  the
Company  from  the Commencement Date to each such applicable  Anniversary
Date;  provided that such Options shall each become exercisable  in  full
before  such applicable Anniversary Dates, immediately upon a Termination
of  Employment  by  reason  of the death or Disability  of  Executive,  a
Termination Without Cause, a Termination for Good Reason, or a Change  of
Control.   The 2001 Option shall become exercisable at the time or  times
specified  by the Committee at the date of grant in accordance  with  the
terms  and conditions of the Stock Ownership Program and consistent  with
the treatment of other senior executives of the Company.
<PAGE> 66
   (d)  Each  Initial Option, Make Whole Option and 2001  Option  may  be
exercised after a Termination of Employment, to the extent exercisable as
of  the  Date  of  Termination (whether by reason of the proviso  to  the
preceding sentence or otherwise), as follows:
    (i) in the event of a Termination of Employment by reason of death or
Disability of Executive, until two years after the Date of Termination,
    (ii) in the event of a Termination Without Cause or a Termination for
Good Reason, until two years after the Date of Termination,
  (iii) in the event of a Termination for Cause, such Option shall expire
on the Date of Termination, and
    (iv) in the event of a Termination of Employment by Executive without
Good  Reason  (other than as a result of death or Disability),  until  90
days after the Date of Termination,
provided, however, that in no event shall any Option be exercisable after
the expiration of the applicable Option Term.
   (e)  Each  Subsequent  Option (other than the 2001  Option)  shall  be
exercisable  at  times  and on terms and conditions  established  by  the
Committee  in  the  grant  of  such Subsequent  Option  under  the  Stock
Ownership Program or applicable successor program.
5.4   Manner of Exercise of Options.  An Option or any part thereof shall
be  exercised  by Executive or, if after his death, a Beneficiary,  by  a
written  notice  to  Company stating the number  of  Common  Shares  with
respect  to  which  the  Option is being exercised  and  payment  of  the
exercise price of the Option and any Withholding Taxes in connection with
such  exercise  in  accordance  with  the  Stock  Ownership  Program   or
applicable successor program.  Company shall deliver the purchased Common
Shares promptly after its receipt of notice of exercise and payment.
5.5   Initial  Performance Units.  Company has granted to Executive  with
respect  to the performance period commencing January 1, 2001 and  ending
December  31,  2003,  ten thousand (10,000) performance  units  ("Initial
Performance  Units"),  subject to the terms of the Company's  Performance
Unit Plan.  The Initial Performance Units shall have a payment value  per
unit  at  target equal to $100 per unit, a guaranteed minimum of  $100.00
per  unit and a maximum of $200.00 per unit.  The unit value (subject  to
the  minimum  guaranteed value) shall depend upon  the  degree  to  which
performance goals are achieved over the performance period.
5.6  Terms and Conditions of Initial Performance Units.
   (a)  Except  as  provided in (b) below, the Initial Performance  Units
shall  be  subject  in all respects to the terms and  conditions  of  the
Company's Performance Unit Plan, as amended from time to time.
   (b)  The Executive shall vest in the Initial Performance Units at  the
end  of  the initial performance period (December 31, 2003) if  Executive
remains  continuously employed by the Company from the Commencement  Date
to  the  end  of  the  initial  performance  period;  provided,  however,
Executive  shall  immediately become vested in  the  Initial  Performance
Units in the event of Executive's Termination of Employment by reason  of
death or Disability, a Termination Without Cause, a Termination for  Good
Reason,  or  a  Change  of  Control prior  to  the  end  of  the  initial
performance period.  In the event of such accelerated vesting, the  value
of  the  Initial Performance Units shall be an amount equal
<PAGE> 67
to the number
of Initial Performance Units, valued at target, multiplied by a fraction,
the  numerator  of  which  is  the number  of  days  which  have  elapsed
commencing  January  1,  2001 and ending on the Date  of  Termination  or
Change  of  Control and the denominator of which is the total  number  of
days from January 1, 2001 through December 31, 2003.
5.7  Subsequent Performance Units.  The Committee shall in its discretion
consider  Executive  for  possible  future  annual  or  other  grants  of
performance units ("Subsequent Performance Units") during the  Employment
Period,  as  determined  by the Committee in its  discretion  based  upon
Executive's performance and consistent with the treatment of other senior
executives  of the Company.  Such Subsequent Performance Units  shall  be
subject to the terms of the Performance Unit Plan, as may be amended,  or
applicable successor plan.
5.8   Make  Whole Restricted Stock.  The Company has granted to Executive
110,000  shares  of  Restricted  Stock ("Make  Whole  Restricted  Stock")
subject  to  the  terms of the Stock Ownership Program.  The  Make  Whole
Restricted Stock grant shall become vested in increments of 10%  on  each
of  the first ten Anniversary Dates if the Executive remains continuously
employed  by  the  Company  from  the  Commencement  Date  to  each  such
Anniversary  Date;  provided, however, that upon  a  Termination  Without
Cause  or a Termination for Good Reason on or after the third Anniversary
Date,  the  vesting percentage determined under the preceding  clause  of
this  sentence  shall be increased by 30 percentage points  (but  not  in
excess of 100%); provided, further, that upon a Termination Without Cause
or a Termination for Good Reason prior to the third Anniversary Date, the
aggregate vesting percentage for the Make Whole Restricted Stock shall be
50%;  and  provided,  further, that Executive  shall  immediately  become
vested  in  all  of  the  Make Whole Restricted Stock  in  the  event  of
Executive's  Termination of Employment by reason of death or  Disability,
or  a Change of Control.  Executive shall be paid in cash an amount equal
to  the  dividends payable in respect of the Make Whole Restricted  Stock
(whether  or not vested) as and when dividends are paid on Common  Shares
generally.  If Executive has a Termination of Employment (other  than  by
reason of death or Disability) prior to vesting in all of the Make  Whole
Restricted Stock, the shares of Make Whole Restricted Stock which are not
vested  as of the Date of Termination shall be forfeited (and the payment
of  dividends in respect of such shares shall cease) unless the Committee
in  its  sole  discretion determines to vest all or any  portion  of  the
unvested shares.
                           Article VI.
                         OTHER BENEFITS
6.1  Incentive, Savings and Retirement Plans.  In addition to Base Salary
and  an  Annual Bonus, Executive shall be entitled to participate  during
the  Employment  Period in all incentive, savings and  retirement  plans,
practices, policies and programs that are from time to time applicable to
other senior executives of the Company in accordance with their terms  as
in effect from time to time.
6.2   Welfare  Benefits.  During the Employment Period, Executive  and/or
his  family,  as the case may be, shall be eligible for participation  in
and  shall  receive all benefits under welfare benefit plans,  practices,
policies  and  programs  provided  by  the  Company  (including  medical,
prescription,  dental,  disability, salary  continuance,  employee  life,
group   life,  dependent  life,  accidental  death  and  travel  accident
insurance  plans and programs) applicable to other senior  executives  of
the  Company  in accordance with their terms as in effect  from  time  to
<PAGE> 68
6.3  Fringe Benefits.  During the Employment Period, Executive  shall  be
entitled to fringe benefits applicable to other senior executives of  the
6.4  Vacation.  During the Employment Period, Executive shall be entitled
to  paid vacation time in accordance with the plans, practices, policies,
and programs applicable to other senior executives of the Company, but in
no  event  shall such vacation time be less than four weeks per  calendar
6.5  Expenses.  During the Employment Period, Executive shall be entitled
to  receive  prompt  reimbursement for all reasonable  employment-related
expenses  incurred  by Executive upon the receipt by the  Company  of  an
accounting   in  accordance  with  practices,  policies  and   procedures
applicable to other senior executives of the Company.
6.6   Office;  Support  Staff.  During the Employment  Period,  Executive
shall  be entitled to an office or offices of a size and with furnishings
and other appointments, and to personal secretarial and other assistance,
appropriate to his position and duties under this Agreement.
6.7  Tax Gross-Up Payment.  If it shall be determined that any payment to
Executive pursuant to this Agreement or any other payment or benefit from
the  Company, any Affiliate, or any other person would be subject to  the
excise tax imposed by Section 4999 of the Code or any similar tax payable
under  any  United  States  federal, state,  local  or  other  law,  then
Executive shall receive a Tax Gross-Up Payment with respect to  all  such
excise taxes and similar taxes.
6.8   Relocation  Expenses.   Company shall  pay  Executive's  reasonable
expenses  related  to  the  relocation of his primary  residence  to  the
Minneapolis  -  St.  Paul, Minnesota area, in accordance  with  Company's
relocation policy applicable to senior executives, including expenses  of
periodic  travel  between  Executive's  current  primary  residence   and
Minneapolis-St.  Paul and reasonable temporary living  expenses  for  the
Executive  and  his family for a period not to exceed one year  from  the
Agreement Date.  The relocation payments shall also include provision for
the  Company  to  purchase  Executive's current  principal  residence  as
provided  below.   If  any  payment of relocation  expenses  (other  than
payments with respect to the purchase of Executive's principal residence)
is  subject  to  Taxes, the Company shall pay Executive  a  Tax  Gross-Up
Payment  with respect to such Taxes.  From the Commencement Date  through
March  31,  2001,  the  Company  shall have  no  obligation  to  purchase
Executive's  current  principal  residence.   During  such  period,   the
Executive shall take such steps as are practicable to sell such residence
at  then-prevailing  value.  In the event Executive  does  not  sell  his
current  principal residence on or prior to March 31, 2001,  as  soon  as
practicable  after  such  date  the  Company  shall  purchase,  or  cause
Executive's  current principal residence to be purchased,  at  the  then-
prevailing  value as determined by an appraiser mutually agreed  upon  by
the Company and the Executive for this purpose.  The purchase shall be on
such  terms and conditions as are generally contained in transactions  of
such nature.
                          Article VII.
7.1  Supplemental Retirement Benefit.  Executive shall be entitled to the
following  supplemental retirement benefit (the "Supplemental  Retirement
Benefit") in accordance with the terms of this Article VII:
<PAGE> 69
  (a)  Upon Completion of 10 Years of Service.  Upon the completion of at
least  10  Years  of  Service,  Executive shall  receive  a  Supplemental
Retirement Benefit equal to:
      (i) the Hypothetical Prior Employer Pension Benefits,
      (ii)  the sum of the Actual Prior Employer Pension Benefits, Actual
Company Pension Benefits, and benefits paid or payable to Executive under
any  other employer's Pension Plan with respect to service prior  to  the
Commencement Date.
If  the  remainder is zero or less, no amount shall be payable by Company
   (b) Upon Completion of Less Than 10 Years of Service.  Upon completion
of  less  than  10 Years of Service, Executive shall receive  a  prorated
Supplemental  Retirement  Benefit (the  "Pro  Rata  Retirement  Benefit")
determined  by multiplying the Supplemental Retirement Benefit  described
in  Section 7.1(a) above by a fraction (not to exceed 1.0), the numerator
of  which is the number of Executive's whole and partial Years of Service
as  of  the date of the Termination of Employment and the denominator  of
which is 10.
7.2   Payment.  Any benefits payable under this Article VII shall be paid
as  of the Date of Termination or, if earlier, the first date of a Change
of  Control in a lump sum equal to the Actuarial Equivalent present value
of  an annuity described in Subsection 7.1(a) or (b) above.  In the event
of a Termination of Employment by reason of Executive's death, the amount
of  such  lump  sum payment to the Beneficiary shall equal the  lump  sum
payment that would have been payable to Executive if he had been alive on
the  Date of Termination and had been fully vested as to the Supplemental
Retirement  Benefit or, if applicable, Pro Rata Retirement Benefit.   The
benefit  may also be paid in the form of a commercially available annuity
or life insurance contract that is mutually agreeable to the parties.
7.3   Vesting.  Executive shall become fully vested in the benefits under
this  Article  VII on the fifth Anniversary Date provided  the  Executive
remains  continuously employed by the Company from the Commencement  Date
to  such fifth Anniversary Date, except that, in the event of Executive's
Termination of Employment by reason of death or Disability, a Termination
Without  Cause,  a Termination for Good Reason, or a Change  of  Control,
Executive  shall immediately be vested as to such benefits.  If Executive
shall  have  a  Termination of Employment for any other reason  prior  to
completion  of  five Years of Service or prior to the  first  date  of  a
Change  of  Control, Executive shall forfeit and shall  not  receive  any
portion of the Supplemental Retirement Benefit.
7.4   Other Retirement Benefits.  Executive shall participate in, and  be
entitled  to  benefits under, any other retirement plans of  the  Company
which  are not qualified under Section 401(a) of the Code, to the  extent
provided in such plan or arrangement.
                          Article VIII.
                      TERMINATION BENEFITS
8.1  Termination for Cause or Other Than for Good Reason, etc.
  (a) If Company terminates Executive's employment for Cause or Executive
terminates  his  employment  other  than  for  Good  Reason,   death   or
<PAGE> 70
Company shall pay to Executive immediately after the Date  of
Termination  an  amount  equal  to the sum of  Executive's  Accrued  Base
Salary,  Accrued Annual Bonus, and Other Accrued Benefits  and  Executive
shall not be entitled to receive any Severance Payment.
  (b) Company may not terminate Executive's employment for Cause unless:
      (i) no fewer than 30 days prior to the Date of Termination, Company
provides Executive with written notice (the "Notice of Consideration") of
its  intent to consider termination of Executive's employment for  Cause,
including a detailed description of the specific reasons which  form  the
basis for such consideration;
     (ii) after providing Notice of Consideration, the Board may, by  the
affirmative vote of a majority of its members (excluding for this purpose
Executive if he is a member of the Board, any other management member  of
the  Board and any other member of the Board reasonably believed  by  the
Board   to   be  involved  in  the  events  leading  to  the  Notice   of
Consideration),  suspend Executive with pay until a  final  determination
pursuant to this Section has been made;
    (iii) on a date designated in the Notice of Consideration, which date
shall  be at least 30 days following the date the Notice of Consideration
is  provided, Executive shall have the opportunity to appear  before  the
Board, with or without legal representation, at Executive's election,  to
present arguments and evidence on his own behalf; and
     (iv)  following the presentation to the Board as provided  in  (iii)
above  or Executive's failure to appear before the Board at the date  and
time  specified  in  the  Notice  of  Consideration,  Executive  may   be
terminated  for Cause only if the Board, by the two-thirds  vote  of  its
members  (excluding Executive if he is a member of the Board,  any  other
management  member  of  the  Board and any  other  member  of  the  Board
reasonably believed by the Board to be involved in the events leading the
Board  to consider terminating Executive for Cause), determines that  the
actions  or inactions of Executive specified in the Notice of Termination
occurred,  that  such  actions or inactions constitute  Cause,  and  that
Executive's employment should accordingly be terminated for Cause.
8.2   Termination for Death or Disability.  If, before  the  end  of  the
Employment Period, Executive's employment terminates due to his death  or
Disability, Company shall pay to Executive or his Beneficiaries,  as  the
case may be, immediately after the Date of Termination an amount which is
equal  to  the  sum  of Executive's Accrued Base Salary,  Accrued  Annual
Bonus, Pro Rata Annual Bonus, and Other Accrued Benefits.
8.3   Termination Without Cause or for Good Reason.  In the  event  of  a
Termination  Without  Cause or a Termination  for  Good  Reason  (whether
during  or after the Employment Period), subject to Section 8.5 Executive
shall receive the following:
   (a)  immediately after the Date of Termination, a lump sum cash amount
in  immediately  available funds equal to the sum of Executive's  Accrued
Base  Salary,  Accrued  Annual Bonus, Pro Rata Annual  Bonus,  and  Other
Accrued Benefits;
   (b)  immediately after the Date of Termination, a lump sum cash amount
in  immediately  available  funds equal to three  (3)  times  Executive's
Annualized Total Compensation;
   (c)  the  benefits (or, if such benefits are not available, the  value
thereof)  specified in Section 6.2 to which Executive is entitled  as  of
the  Date  of
<PAGE> 71
Termination for the Severance Period, provided  that  such
benefits  shall  be  reduced  by  any  similar  benefits  provided  by  a
subsequent  employer;  provided further that  (i)  with  respect  to  any
benefit  to  be  provided on an insured basis, such value  shall  be  the
present value of the premiums expected to be paid for such coverage,  and
with respect to other benefits, such value shall be the present value  of
the expected net cost to Company of providing such benefits and (ii) from
and after the Date of Termination, Executive shall not become entitled to
any additional awards under Section 6.1 or any plans, practices, policies
or programs of the Company; and
   (d)  immediately after the Date of Termination, a lump-sum  amount  in
immediately  available  funds of any amount  then  payable  to  Executive
pursuant to Section 6.7.
8.4   Other  Termination  Benefits  or  Remedies.   The  amounts  payable
hereunder  are in lieu of any other termination or severance payments  or
benefits entitlement of Executive, including under any other programs  of
the  Company,  any Subsidiary or their Affiliates.  The  amounts  payable
hereunder  shall  reduce  and be in full satisfaction  of  any  statutory
entitlement  (including  notice  of  termination,  termination  pay   and
severance  pay) of Executive upon a Termination of Employment, and  shall
constitute  Executive's exclusive remedy for any damages  relating  to  a
Termination of Employment for any reason.
8.5   General  Release.  Executive's rights to payment under Section  8.3
shall  be contingent upon the Executive's execution of a general  release
of  any  and  all claims Executive may have, whether known or not  known,
against  Company, the Subsidiaries, Affiliates and their past and present
directors,  officers, and employees and agents, for events or  causes  of
action occurring through the date of the release, including those arising
from Executive's employment or Termination of Employment hereunder.   The
release  shall be substantially the form attached hereto as Attachment  A
as may be required by Company.
                           Article IX
                      RESTRICTIVE COVENANTS
9.1  Non-Solicitation of Employees; Confidentiality; Non-Competition.
(a) Executive covenants and agrees that, during the Employment Period and
during  the  one-year  period immediately following  any  Termination  of
Employment, Executive will not:
    (i)  directly  or  indirectly employ or seek  to  employ  any  person
employed  at that time by Company or any of its Subsidiaries or otherwise
encourage or entice any such person to leave such employment;
   (ii)  become employed by, enter into a consulting arrangement with  or
otherwise agree to perform personal services for a Competitor (as defined
in Section 9.1(b));
 (iii) acquire an ownership interest in a Competitor, other than not more
than a 2% equity interest in a publicly-traded Competitor; or
  (iv) solicit any customers or vendors of Company or its Subsidiaries on
behalf of or for the benefit of a Competitor.
(b)  For  purposes of this Section, "Competitor" means any  Person  which
sells  goods  or services in the geographic area described  below,  which
goods  or  services  are the same or similar to (or  may  be  used  as  a
substitute  therefore)  those  sold by  a  business  that  (i)  is  being
conducted by Company or any
<PAGE> 72
Subsidiary in the geographic area at the time
in  question and (ii) was being conducted by Company or any Subsidiary in
the geographic area on the date of Executive's Termination of Employment.
(c)  Executive covenants and agrees that at no time during the Employment
Period  nor  at  any  time following any Termination of  Employment  will
Executive communicate, furnish, divulge or disclose in any manner to  any
Person  any  Confidential  Information (as  defined  in  Section  9.1(d))
without   the  prior  express  written  consent  of  Company.   After   a
Termination of Employment, Executive shall not, without the prior written
consent  of the Company, or as may otherwise be required by law or  legal
process,  communicate or divulge such Confidential Information to  anyone
other than the Company and those designated by it.
(d)  For purposes of this Section, "Confidential Information" shall  mean
financial information about the Company, contract terms with vendors  and
suppliers, customer and supplier lists and data, trade secrets  and  such
other  competitively-sensitive information to which Executive has  access
as  a  result of his positions with the Company, except that Confidential
Information  shall  not  include any information  which  was  or  becomes
generally  available  to the public (i) other  than  as  a  result  of  a
wrongful  disclosure  by  Executive, (ii) as a result  of  disclosure  by
Executive  during the Employment Period which he reasonably and  in  good
faith  believes is required by the performance of his duties  under  this
Agreement,  or  (iii)  any  information  compelled  to  be  disclosed  by
applicable law or administrative regulation; provided that Executive,  to
the   extent  not  prohibited  from  doing  so  by  applicable   law   or
administrative  regulation,  shall give Company  written  notice  of  the
information to be so disclosed pursuant to clause (iii) of this  sentence
as far in advance of its disclosure as is practicable.
9.2   Injunction.  Executive acknowledges that monetary damages will  not
be  an  adequate  remedy for Company in the event of  a  breach  of  this
Article  IX,  and  that  it would be impossible for  Company  to  measure
damages in the event of such a breach.  Therefore, Executive agrees that,
in addition to other rights that Company may have, Company is entitled to
an injunction preventing Executive from any breach of this Article IX.
                           Article X.
10.1  Public Announcement.  The Company shall give Executive a reasonable
opportunity  to review and comment on any public announcement  (including
any filing with a governmental agency or stock exchange) relating to this
Agreement or Executive's employment by the Company.
10.2 Approvals.  The Company represents and warrants to Executive it  has
taken all corporate action necessary to authorize this Agreement.
10.3  No  Mitigation.  In no event shall Executive be obligated  to  seek
other employment or take any other action to mitigate the amounts payable
to Executive under any of the provisions of this Agreement, nor shall the
amount of any payment hereunder be reduced by any compensation earned  as
result  of  Executive's employment by another employer, except  that  any
continued welfare benefits provided for by Section 6.2 and 8.3 shall  not
duplicate  any benefits that are provided to Executive and his family  by
such  other  employer and shall be secondary to any coverage provided  by
such other employer to the extent permitted by law.
<PAGE> 73
10.4  Enforcement.  If Executive and the Company have a dispute regarding
Executive's   entitlement  to  compensation  and  benefits   under   this
Agreement,  and if Executive shall prevail in such dispute,  the  Company
shall  reimburse  Executive's reasonable legal fees  and  other  expenses
incurred in such effort.
10.5  Beneficiary.   If  Executive dies prior to  receiving  all  of  the
amounts  payable  to him in accordance with the terms and  conditions  of
this   Agreement,   such  amounts  shall  be  paid  to  the   beneficiary
("Beneficiary") designated by Executive in writing to Company during  his
lifetime, or if no such Beneficiary is designated, to Executive's estate.
Such  payments shall be made in a lump sum to the extent so payable  and,
to  the extent not payable in a lump sum, in accordance with the terms of
this Agreement.  Executive, without the consent of any prior Beneficiary,
may change his designation of Beneficiary or Beneficiaries at any time or
from  time  to  time  by  a submitting to Company a  new  designation  in
writing.  Notwithstanding the preceding provisions of this Section  10.5,
with  respect  to  the  Stock Ownership Program, the Company's  Executive
Profit  Sharing  Plan  or Performance Unit Plan, the  term  "Beneficiary"
shall have the meanings set forth therein.
10.6  Assignment;  Successors.  Company may not  assign  its  rights  and
obligations  under  this Agreement without the prior written  consent  of
Executive  except to a successor of Company's business.   This  Agreement
shall  be binding upon and inure to the benefit of Executive, his  estate
and  Beneficiaries, the Company and the successors and permitted  assigns
of the Company.
10.7  Nonalienation.  Except as is otherwise expressly  provided  herein,
benefits payable under this Agreement shall not be subject in any  manner
to   anticipation,   alienation,  sale,  transfer,  assignment,   pledge,
encumbrance,  charge, garnishment, execution or levy of any kind,  either
voluntary  or involuntary, prior to actually being received by Executive,
and  any  such  attempt  to  dispose of any  right  to  benefits  payable
hereunder shall be void.
10.8  Severability.  If all or any part of this Agreement is declared  by
any  court  or  governmental authority to be unlawful  or  invalid,  such
unlawfulness or invalidity shall not serve to invalidate any  portion  of
this Agreement not declared to be unlawful or invalid.  Any provision  so
declared to be unlawful or invalid shall, if possible, be construed in  a
manner  which  will  give effect to the terms of such  provision  to  the
fullest extent possible while remaining lawful and valid.
10.9  Amendment; Waiver.  This Agreement shall not be amended or modified
except  by written instrument executed by the parties.  A waiver  of  any
term,  covenant  or condition contained in this Agreement  shall  not  be
deemed  a waiver of any other term, covenant or condition, and any waiver
of  any  default  in any such term, covenant or condition  shall  not  be
deemed  a  waiver  of  any later default thereof or of  any  other  term,
covenant or condition.
10.10  Notices.  All notices hereunder shall be in writing and  delivered
by  hand,  by  nationally-recognized  delivery  service  that  guarantees
overnight  delivery,  or by first-class, registered  or  certified  mail,
return receipt requested, postage prepaid, addressed as follows:
If to Company, to:  Minnesota Mining and Manufacturing Company
                    3M Center
                    St. Paul, MN 55144
                    Attention: General Counsel
With copy to:       Roger C. Siske
                    Sonnenschein Nath & Rosenthal
                    8000 Sears Tower
                    Chicago, IL 60606
<PAGE> 74
If to Executive, to:    James McNerney
                        At the most recent home address on file with
                        the Company
     With copy to:  Robert Stucker
                    Vedder Price Kaufman & Kammholz
                    222 North La Salle Street
                    Chicago, Illinois 60601-1003
Either  party  may  from time to time designate a new address  by  notice
given  in  accordance with this Section.  Notice shall be effective  when
actually received by the addressee.
10.11  Currency.   All  monetary amounts stated  in  this  Agreement  are
expressed in, and shall be payable in, United States dollars.
10.12   Counterparts.   This  Agreement  may  be  executed   in   several
counterparts, each of which shall be deemed to be an original but all  of
which together will constitute one and the same instrument.
10.13  Entire  Agreement.   This Agreement  forms  the  entire  agreement
between the parties hereto with respect to any severance payment and with
respect  to  the  subject  matter contained in the  Agreement  and  shall
supersede  all  prior agreements, promises and representations  regarding
employment,  compensation, severance or other  payments  contingent  upon
termination of employment, whether in writing or otherwise.
10.14  Applicable Law.  This Agreement shall be interpreted and construed
in  accordance with the laws of the State of Delaware, without regard  to
its choice of law principles.
10.15 Survival of Executive's Rights and Obligations.  All of Executive's
rights hereunder, including his rights to compensation and benefits,  and
his obligations under Article IX hereof, shall survive the termination of
Executive's employment and/or the termination of this Agreement.
10.16  Indemnification.  Executive shall be indemnified  by  the  Company
against  liability  as an officer and director of  the  Company  and  any
Subsidiary or Affiliate of the Company to the maximum extent permitted by
applicable  law.  The Executive's rights under this Section  10.16  shall
continue  so long as Executive may be subject to such liability,  whether
or not this Agreement may have terminated prior thereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
written below.
Minnesota Mining and Manufacturing Company
By: /s/ Edward A. Brennan
Its: Director
Date: _____________________________
/s/ W. James McNerney, Jr.
W. James McNerney, Jr.
Date: _____________________________
<PAGE> 75
      This RELEASE ("Release") dated as of this ____________________  day
between   Minnesota  Mining  and  Manufacturing  Company,  a  corporation
incorporated  under  the  laws  of Delaware  ("Company"),  and  W.  James
McNerney, Jr. ("Executive").
      WHEREAS, the Company and the Executive previously entered  into  an
Employment  Agreement dated December 4, 2000 under  which  Executive  was
employed to serve as the Company's Chief Executive Officer;
      WHEREAS,  the  Executive's employment with the Company  (has  been)
(will be) terminated effective __________________; and
      WHEREAS,  pursuant  to  Section 8.3 of  the  Employment  Agreement,
Executive  is  entitled to certain compensation and  benefits  upon  such
termination, contingent upon the execution of this Release.
      NOW,  THEREFORE,  in  consideration  of  the  premises  and  mutual
agreements contained herein and in the Employment Agreement, the  Company
and Executive agree as follows:
     1.   Executive, on his own behalf and on behalf of his heirs, estate
and  beneficiaries,  does  hereby release the Company,  and  any  of  its
Subsidiaries  or Affiliates (as such terms are defined in the  Employment
Agreement), and each past or present officer, director, agent,  employee,
shareholder,  and insurer of any such entities, from any and  all  claims
made,  to  be  made,  or which might have been made of  whatever  nature,
whether  known  or unknown, from the beginning of time,  including  those
that arose as a consequence of his employment by Company, or arising  out
of  the severance of such employment relationship, or arising out of  any
act committed or omitted during or after the existence of such employment
relationship, all up through and including the date on which this Release
is  executed, including, but not limited to, those which were, could have
been  or could be the subject of an administrative or judicial proceeding
filed  by  Executive or on his behalf under federal, state or local  law,
whether  by statute, regulation, in contract or tort, and including,  but
not limited to, every claim for front pay, back pay, wages, bonus, fringe
benefit, any form of discrimination (including but not limited to,  every
claim  of race, color, sex, religion, national origin, disability or  age
discrimination),  wrongful  termination,  emotional  distress,  pain  and
suffering,   breach  of  contract,  compensatory  or  punitive   damages,
interest,  attorney's fees, reinstatement or reemployment. If  any  court
rules  that  such waiver of rights to file, or have filed on his  behalf,
any  administrative  or  judicial charges or complaints  is  ineffective,
Executive  agrees not to seek or accept any money damages  or  any  other
relief upon the filing of any such administrative or judicial charges  or
complaints.  Executive  relinquishes any right to  future  employment  by
Company and Company shall have the right to refuse to re-employ Executive
without  liability. Executive acknowledges and agrees  that  even  though
claims  and facts in addition to those now known or believed  by  him  to
exist may subsequently be discovered, it is his intention to fully settle
and  release  all claims he may have against the Company and the  persons
and entities described above, whether known, unknown or suspected.
<PAGE> 76
      2.    The  Company  and Executive acknowledge and  agree  that  the
release contained in Paragraph 1 does not, and shall not be construed to,
release or limit the scope of any existing obligation of Company  (i)  to
indemnify Executive for his acts as an officer or director of Company  in
accordance with the bylaws of Company and the policies and procedures  of
Company  that  are  presently in effect including Section  10.16  of  the
Employment   Agreement,   or  (ii)  to  Executive   and   his   eligible,
participating  dependents  or  beneficiaries  under  any  existing  group
welfare  or  retirement  plan of Company in which Executive  and/or  such
dependents are participants.
[Applicable Required ADEA waiver provisions to be inserted]
      IN  WITNESS WHEREOF, the parties have executed this Release on  the
date first above written.
W. James McNerney, Jr.
Minnesota Mining and Manufacturing Company