No-Act: 3M Co 2.17.04

Company Name: 3M Co.
Public Availability Date: February 17, 2004

Document Sections:

INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
APPENDIX 3
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER

[INQUIRY LETTER]

January 7, 2004

Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, DC 20549

Re: 3M Company
Stockholder Proposal Submitted by Nick Rossi

Ladies and Gentlemen:

Under Rule 14a-8(j) under the Securities Exchange Act of 1934, this letter notifies you that 3M intends to omit from its proxy statement and form of proxy for 3M's 2004 Annual Meeting of stockholders (collectively, the "2004 Proxy Materials") a stockholder proposal (the "Proposal") submitted by Nick Rossi (the "Proponent"). A copy of the Proposal and accompanying cover letter, dated October 7, 2003, is attached as Attachment A. The cover letter states that Mr. John Chevedden is representing Mr. Rossi with regard to the Proposal and is Mr. Rossi's proxy for all purposes in connection with the Proposal.

In accordance with Rule 14a-8(j) of the Exchange Act, enclosed are six copies of this letter and the attachments to this letter. By copy of this letter, 3M notifies Mr. Rossi and Mr. Chevedden of its intention to omit the Proposal (including the resolution and supporting statement) from its proxy materials. Also pursuant to Rule 14a-8(j), this letter is being submitted to the staff of the Division of Corporation Finance (the "Staff") not fewer than 80 days before 3M intends to file its definitive proxy statement and form of proxy with the Securities and Exchange Commission.

3M requests the concurrence of the Staff that it will not recommend enforcement action if 3M omits the Proposal (including the supporting statement) from the 2004 Proxy Materials, under Rule 14a-8(i)(10), on the basis that 3M has already substantially implemented the Proposal. To the extent that the reasons for omitting the Proposal are based on matters of law, this letter also constitutes an opinion of counsel that Rule 14a-8(j)(2)(iii) requires.

Analysis

The Proposal requests 3M's Board of Directors: (1) seek shareholder approval at the earliest subsequent shareholder election, for the adoption, maintenance or extension of any current or future poison pill; and (2) once adopted, submit any removal or dilution of this proposal to a shareholder vote at the earliest subsequent election. See Attachment A.

In 2002 and again last year, Mr. Rossi and Mr. Chevedden submitted similar proposals relating to rights plans, or "poison pills," notwithstanding the fact that 3M does not have and has never adopted a rights plan. The Rossi proposal submitted at the 2003 Annual Meeting of Stockholders requested that the Board of Directors "redeem any poison pill previously issued (if applicable) and not adopt or extend any poison pill unless such adoption or extension has been submitted to a shareholder vote."

Following the vote on that proposal, 3M's Board of Directors adopted and reaffirmed the policy originally adopted in 2002 (the "3M Policy") in a Board resolution. Under the 3M Policy, 3M will submit any poison pill to a stockholder vote unless the Board, exercising its fiduciary duties under Delaware law, determines that such a submission would not be in the interests of stockholders under the circumstances. The full text of the 3M Policy is as follows:

The Board's policy is that it will only adopt a rights plan if either (1) stockholders have approved adoption of the rights plan or (2) the Board in its exercise of its fiduciary responsibilities, including a majority of the independent members of the Board, makes a determination that, under the circumstances existing at the time, it is in the best interests of 3M's stockholders to adopt a rights plan without the delay in adoption that would come from the time reasonably anticipated to seek stockholder approval.

The Board has also directed 3M's Nominating and Governance Committee to review this policy statement on an annual basis and to report to the Board on any recommendations it may have concerning the 3M Policy. The terms of the 3M Policy will be included in 3M's published Corporate Governance Guidelines and its proxy statement.

Rule 14a-8(i)(10) permits the omission of a shareholder proposal if "the company has already substantially implemented the proposal." The "substantially implemented" standard replaced the predecessor rule allowing omission of a proposal that was "moot", and reflects the Staff's interpretation of the predecessor rule that the proposal need not be "fully effected" by the company to meet the mootness test, so long as it was substantially implemented. See SEC Release No. 34-20091 (August 16, 1983).

Last month, the Staff issued a favorable no action letter to Hewlett-Packard Company ("HP") under Rule 14a-8(i)(10) with respect to a similar proposal submitted to HP by Messrs. Rossi and Chevedden requesting that HP submit any poison pill to a shareholder vote. Hewlett-Packard Company (avail. Dec. 24, 2003). In July 2003, HP had adopted a policy similar to the 3M Policy, providing that:

HP shall submit adoption or extension of any poison pill to a shareholder vote before it acts to adopt any poison pill; provided, however, that the Board may act on its own to adopt a poison pill without first submitting such matter to a shareholder vote if, under the circumstances then existing, the Board in the exercise of its fiduciary responsibilities deems it to be in the best interest of HP and its shareowners to adopt a poison pill without the delay in adoption that would come from the time reasonably anticipated to seek a shareowner vote.

In light of this policy, HP argued that it had already substantially implemented the Rossi and Chevedden proposal. HP stated that the proviso to its policy, permitting a "fiduciary out" to the policy, was necessary under Delaware law, and submitted a legal opinion of Delaware counsel supporting that position. The Staff concurred that it would not recommend enforcement action if HP omitted the proposal under Rule 14(a)(i)(10).

The circumstances with respect to the Proposal and the 3M Policy are virtually identical. The 3M Policy substantially implements the Proposal, in that it implements the Proposal to the greatest extent permitted under Delaware law. Just as the fiduciary out was a required element of HP's policy, the similar fiduciary out contained in the 3M Policy is required under Delaware law. Under Delaware law, a board of directors may not abdicate its right and ability to manage the corporation and act in accordance with its fiduciary responsibilities, including the ability to adopt and maintain a rights plan without the requirement of having to seek shareholder approval either before or after adoption of the plan. This view is supported by the legal opinion of Richards, Layton & Finger, attached to this letter as Attachment B, which states in pertinent part that:

A requirement that the Board of Directors submit the "adoption, maintenance or extension" of a stockholder rights plan to a stockholder vote in all cases and without exception, whether before or after adoption of the plan by the Board of Directors, and thereby subjecting the plan's efficacy to such stockholder approval, effectively removes from the Company's directors the discretion to utilize a powerful and effective tool in reacting to unfair or inequitable takeover tactics, even if the Board of Directors determines in the good faith exercise of its fiduciary duties that a rights plan would be in the best interests of stockholders and the most effective means of dealing with such a threat. Since submitting the question of whether to adopt or maintain a rights plan to a stockholder vote in such circumstances could impose substantial delay and loss of control, the Board of Directors could have a significantly diminished ability to respond as necessary to protect the interests of the Company and its stockholders. When the Company faces a significant threat such as inequitable takeover tactics, the directors' ability to negotiate effectively and to react expeditiously could be critical to discharging their fiduciary duties.

* * *

[I]t is our opinion that it would be impermissible under the laws of the State of Delaware for the Board of Directors to purport to bind itself (or any future board of directors of the Company) with respect to the adoption, maintenance, termination or amendment of a stockholder rights plan, or to require in all cases prior or subsequent stockholder approval for its efficacy, without excepting from any such commitment or requirement actions which are necessary to be taken in order for the Board of Directors (or any future board of directors, as the case may be) to act in a manner required by its fiduciary duties to the Company and its stockholders.

It is well established in Staff no-action letters that a company need not be compliant with every detail of a proposal to exclude it under Rule 14a-8(i)(10). Differences between a company's actions and the proposal are permitted so long as a company's actions satisfactorily address the underlying concerns of the proposal. See, e.g., Masco Corporation (Mar. 29, 1999) (permitting the company to exclude a proposal seeking the independence of directors on "substantially implemented" grounds after the company adopted a version of the proposal that included some slight modifications and a clarification as to one of the terms). Proposals have been considered substantially implemented where the companies had implemented part, but not all, of a multi-pronged proposal. See, e.g., Columbia/HCA Healthcare Corp. (Feb. 18, 1998) (permitting the company to exclude a proposal on "substantially implemented" grounds after it took steps to implement, partly or fully, three of the four actions requested by the proposal). In 3M's case, as in the case of HP, the 3M Policy implements the Proposal as fully as it can consistent with Delaware law and, therefore, meets the "substantially implemented" test under Rule 14a-8(i)(10).

In addition to the Hewlett-Packard letter, the no-action letter the Staff issued last year to AutoNation, Inc., permitting the exclusion of a similar poison pill proposal from Mr. Chevedden on the grounds that it had been substantially implemented, also supports the conclusion that the Proposal may be excluded under Rule 14a-8(i)(10). See AutoNation, Inc. (avail. Mar. 5, 2003). AutoNation adopted the following policy: "The Board of Directors will not adopt or extend any poison pill unless such adoption or extension has been submitted to a shareholder vote." In response to Mr. Chevedden's argument that AutoNation's policy could be revoked at any time by AutoNation's board of directors, the company responded as follows:

The revocability of the Policy is consistent with other Company policies and the well-settled principal of corporate governance that current directors may not irreversibly bind future directors from discharging their fiduciary duties. Of course, the Board would only revoke or change the Policy if, in the future in the good faith exercise of its fiduciary duties, the Board determines that the revocation or change of the Policy is in the best interests of the Company and its shareholders. Proponent's argument is disingenuous in implying that "substantial implementation" of the Proposal, which would not be binding on the Company even if approved by the Company's stockholders, requires irrevocable action by the Board.

The explicit "fiduciary out" contained in the 3M Policy is virtually identical to the implicit "fiduciary out" contained in AutoNation's policy.

Last year, the Staff declined to issue a favorable no-action letter to 3M with respect to the omission under Rule 14a-8(i)(10) of a similar proposal submitted by Messrs. Rossi and Chevedden. The no-action request last year, however, was not based on the legal opinion of Delaware counsel. In light of the opinion of Delaware counsel submitted this year, and the Hewlett-Packard letter issued last month, 3M believes that it is clear that the 3M Policy substantially implements the Proposal and that 3M may therefore omit the Proposal under Rule 14a-8(i)(10).

Request

Based on the foregoing analysis, 3M requests the concurrence of the Staff that it will not recommend enforcement action if 3M omits the Proposal from the 2004 Proxy Materials.

Please acknowledge receipt of the enclosed materials by date-stamping the enclosed receipt copy of this letter and returning it in the enclosed return envelope. I would be happy to provide you with any additional information and answer any questions. If the Staff disagrees with the conclusions set forth in this letter, I respectfully request the opportunity to confer with you before the determination of the Staff's final position. Please call me at 651-733-2204 if I can be of any further assistance in this matter.

Sincerely,

/s/

Gregg M. Larson

cc: Mr. Nick Rossi
Mr. John Chevedden

[APPENDIX 1]

Attachment A

Nick Ross;
P.O. Box 249
Boonville, CA 95415

Mr. W. James McNerney, Jr.
Chairman
3M Company (MMM)
3M Center
St. Paul, MN 55144
Phone: (651) 733-1110
Fax: (651) 737-3061, 733-2782

Dear Mr. McNerney,

This Rule 14a-8 proposal is respectfully submitted for the next annual shareholder meeting. This proposal is submitted in support of the long-term performance of our company. Rule 14a-8 requirements are intended to be met including ownership of the required stock value until after the date of the applicable shareholder meeting. This submitted format, with the shareholdersupplied emphasis, is intended to be used for definitive proxy publication. This is the proxy for Mr. John Chevedden and/or his designee to act on my behalf in shareholder matters, including this shareholder proposal for the forthcoming shareholder meeting before, during and after the forthcoming shareholder meeting. Please direct all future communication to Mr. Chevedden at:

2215 Nelson Ave., No. 205
Redondo Beach, CA 90278
PH: 310-371-7872

Your consideration and the consideration of the Board of Directors is appreciated.

Sincerely,

/s/

Oct 7-03

cc: Gregg M. Larson
FX: 651/736-9469

[APPENDIX 2]

3Shareholder Voting Right on a Poison Pill

RESOLVED: That the shareholders of our company request that our Board of Directors seek shareholder approval at the earliest subsequent shareholder election, for the adoption, maintenance or extension of any current or future poison pill. Once adopted, removal of this proposal or any dilution of this proposal, would consistently be submitted to shareholder vote at the earliest subsequent shareholder election.

We as shareholders voted in support of this topic:

Year........Rate of Support

2002........58%

2003........60%

This percentage is based on yes and no votes cast. I believe this level of shareholder support is more impressive because the 60% support followed our Directors' objection to the proposal. I believe that there is a greater tendency for shareholders, who more closely follow our company, to vote in favor of this proposal topic. I do not see how our Directors object to this proposal because it gives our Directors the flexibly to override our shareholder vote if our Directors seriously believes they have a good reason. This topic also won an overall 60% yes-vote at 79 companies in 2003.

Nick Rossi, P.O. Box 249, Boonville, Calif. 95415 submitted this proposal.

Shareholders' Central Role

Putting poison pills to a vote is a way of affirming the central role that shareholders should play in the life of a corporation. An anti-democratic scheme to flood the market with diluted stock is not a reason that a tender offer for our stock should fail.

Source: The Motley Fool

The key negative of poison pills is that pills can preserve management deadwood instead of protecting investors.

Source: Moringstar.com

The Potential of a Tender Offer Can Motivate Our Directors

Hectoring directors to act more independently is a poor substitute for the bracing possibility that shareholders could turn on a dime and sell the company out from under its present management.

Wall Street Journal, Feb. 24, 2003

Akin to a Dictator

Poison pills are akin to a dictator who says, "Give up more of your freedom and I'll take care of you.

"Performance is the greatest defense against getting taken over. Ultimately if you perform well you remain independent, because your stock price stays up."

Source: T.J. Dermot Dunphy, CEO of Sealed Air (NYSE) for more than 25 years

I believe our board may be tempted to partially implement this proposal to gain points in the new corporate governance scoring systems. I do not believe that a partial implementation, which could still allow our directors to give us a poison pill on short notice, would be a substitute for complete implementation.

Council of Institutional Investors Recommendation

The Council of Institutional Investors www.cii.org, an organization of 130 pension funds investing $2 trillion, called for shareholder approval of poison pills. Based on the 60% overall yes-vote in 2003 many shareholders believe companies should allow their shareholders a vote.

Shareholder Voting Right on a Poison Pill Yes on 3

Notes:

The above format is the format submitted and intended for publication.

Please advise if there is any typographical question.

The company is requested to assign a proposal number (represented by "3" above) based on the chronological order in which proposals are submitted. The requested designation of "3" or higher number allows for ratification of auditors to be item 2.

References:

The Motley Fool, June 13, 1997
Moringstar.com, Aug. 15, 2003
Mr. Dunphy's statements are from The Wall Street Journal, April 28, 1999.
IRRC Corporate Governance Bulletin, June - Sept. 2003
Council of Institutional Investors, Corporate Governance Policies, March 25, 2002

Please advise within 14 days if the company requests help to locate these or other references.

[INQUIRY LETTER]

February 13, 2004

Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: 3M Company - Stockholder Proposal Submitted by Nick Rossi

Dear Sir or Madam:

This letter is in response to a letter from John Chevedden dated January 23, 2004, which the Company received on February 12, 2004, a copy of which is enclosed.

In a letter to 3M dated October 7, 2003 and received by the Company on October 11, 2003, Nick Rossi submitted a shareholder proposal with respect to shareholder voting on rights plans, and designated Mr. Chevedden to act on his behalf with respect to the proposal. On November 14, 2003, Mr. Chevedden resubmitted Mr. Rossi's letter to 3M (the same letter dated October 7, 2003), but attached a slightly modified version of the proposal submitted on October 11, 2003. None of the modifications submitted in the November letter change what this proponent is seeking. The proposal submitted on October 11, including the modifications to that proposal submitted on November 14, seeks shareholder approval of the "adoption, maintenance or extension" of any poison pill.

The Company responded to this proponent in its no-action letter dated January 7, 2004 by seeking exclusion of his proposal on the grounds the Company has already substantially implemented the proposal by the Board's policy of submitting any poison pill to a stockholder vote unless the Board, exercising its fiduciary duties under Delaware law, determines that such a submission would not be in the interests of stockholders under the circumstances. The full text of the 3M Policy is as follows:

The 3M Policy substantially implements what this proponent is seeking to the greatest extent permitted under Delaware law, a view supported by the opinion of counsel submitted with the Company's January 7, 2003 no-action request, and may therefore be excluded under Rule 14a-8(i)(10).

Please call me if you have any questions.

Sincerely,

/s/

Gregg M. Larson

cc: Mr. Nick Rossi
Mr. John Chevedden

Enclosure

[INQUIRY LETTER]

January 23, 2004

6 Copies
7th copy for date-stamp return

Via Airbill

Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
Mail Stop 0402
450 Fifth Street, NW
Washington, DC 20549

Rebuttal to $5.11 No Action Request
3M Company (MMM)
Poison Pill Proposal
Nick Rossi

Ladies and Gentlemen:

In rebuttal to the company no action request, the numbers preceding the brackets below correspond approximately to the pages of the company letter. Please also see the attachments for:

Separate Ballot Item

Not Substantially (Extensively) Implemented

1] The company apparently gives low priority to this no action request by forwarding it by mail ($5.11) to arrive 7-days after the letter date.

2] The company failed to address the proposal faxed to the company on November 14, 2003. A print-out of the November 14, 2003 fax date, time and duration is enclosed. Thus this specific company no action request does not apply to the proposal submitted to the company on November 14, 2003. The company did not relay any question to the shareholder party on the November 14, 2003 proposal within the mandated 14-day period.

The shareholder proposal states:

RESOLVED: Shareholders request that our Directors increase shareholder voting rights and submit the adoption, maintenance or extension of any poison pill to a shareholder vote as a separate ballot item on the next shareholder ballot. Also once this proposal is adopted, any dilution or removal of this proposal is requested to be submitted to a shareholder vote as a separate ballot item at the earliest possible shareholder election.

The company policy states:

Instead of addressing the submitted proposal the company policy seems to address a proposal which would read:

Although this proposal calls for a shareholder vote on a poison pill, this vote can be bundled with a number of other items as an all-or-nothing vote. Additionally the board can adopt a poison pill without shareholder vote at any time the board feels it is in the best interest to do so. If such a pill is adopted it can have a 10-year term and no vote would be required during the 10-year term. The board can repeal this entire foundational policy at any time without notice.

The company inconsistently provides for an annual forum to allow a quick reversion to the existing company practice by stating: "The Board has also directed 3M's Nominating and Governance Committee to review this policy statement on an annual basis and to report to the Board on any recommendations it may have concerning the 3M policy."

Oxymoron Opinion

The legal opinion of Richard, Layton & Finger is an oxymoron and paradox: It states that submitting a poison pill plan to a stockholder vote after the pill plan is adopted "could impose substantial delay ...." Thus this opinion is in the position of touting an illogical claim: That a vote after a pill adoption delays the pill adoption. This may be a key defect in similar Richard, Layton & Finger opinions in the no action process regarding other companies. This may subject such opinions on the pill topic to credibility questions.

There is no point-by-point analysis in the opinion to explain this reversal of logic.

4] The company fails to note that the proposal submitted to AutoNation did not have the second sentence of this proposal: "Also once this proposal is adopted, any dilution or removal of this proposal is requested to be submitted to a shareholder vote as a separate ballot item at the earliest possible shareholder election."

I do not believe the company has met its burden of proof obligation according to rule 14a-8.

For the above reasons this is to respectfully request non-concurrence with the company no action request on each point.

Additionally, this specific company no action request does not apply to the proposal submitted to the company on November 14, 2003.

Sincerely,

/s/

John Chevedden

cc: Nick Rossi
W. James McNerney, Jr.

[INQUIRY LETTER]

January 23, 2004

6 Copies
7th copy for date-stamp return

Via Airbill

Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
Mail Stop 0402
450 Fifth Street, NW
Washington, DC 20549

Poison Pill Proposals and Not Substantially (Extensively) Implemented
Separate Ballot Item Issue

Ladies and Gentlemen:

Separate Ballot Item

The company has made no claim that its policy calls for a vote as a separate ballot item. The company has cited no precedent where a called-for vote was determined substantially implemented by a policy allowing a vote as only a small part of a larger bundle of provisions.

The 2003 company policy can also make a vote nearly meaningless by bundling the vote on the poison pill with 5 other items as an all-or-nothing vote proposition. And one of the 5 other items could be a big-ticket item.

There is no point-by-point company analysis particularly focused on the separate ballot item provision.

Sincerely,

/s/

John Chevedden

[INQUIRY LETTER]

January 23, 2004

6 Copies

7th copy for date-stamp return

Via Airbill

Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
Mail Stop 0402
450 Fifth Street, NW
Washington, DC 20549

Poison Pill Proposals and Not Substantially (Extensively) Implemented

Ladies and Gentlemen:

The company has not made any analogous claim that a Board of Directors, which permits ratification of auditors, has abdicated its responsibility for the selection of auditors.

Element - An Essential Component

The following is additional material which applies to a poison pill proposal for a two-element single-concept policy calling for:

1) A shareholder vote policy regarding a poison pill Plus

2) A shareholder vote if the foundational policy is repealed after adoption.

This letter addressees the substantially implemented issue.

The two-element policy calls for a vote at each of two points. There is no substantial implementation if the company sets up a condition:

1) Where the company has complete control

2) And the company can avoid a vote at both element-one and element-two

SEC Release No. 34-20091 (attached) said "The Commission proposed an interpretative change to permit the omission of proposals that have been `substantially implemented by the issuer.'" The key phrase is "substantially implemented by the issuer."

The proposal does not seem to be substantially implemented if the foundational policy of the proposal can be repealed at will or at whim by the board without a corresponding non-binding vote.

The second element of the proposal is arguably of greater importance because without it the first element of the proposal could be moot.

The company is in the inscrutable position of claiming that adopting the first half of the two-element policy compares favorably with adopting the whole policy. It is like half the baby is as good as the whole baby. Nordstrom Inc., claimed a favorable 12-for-12 match in Nordstrom Inc., 1995 SEC No-Act. LEXIS 226 (Feb. 8, 1995). Yet the company now claims that one-for-two is as favorable 12-for-12 when addressing the poison pill topic.

In Nordstrom Inc., the staff allowed a company to exclude a proposal where the company demonstrated that it already had adopted policies or taken actions to address each of 12 points of the proposal.

In Nordstrom a 12-for-12 match at a detail level of the company was apparently established in order to obtain concurrence.

At the highest level of the company the company claims a one-for-two match compares favorably. A key principle of rule 14a-8 and corporate governance is that shareholder voices are intended to be heard more at the macro level of the company because the managers are responsible for the details. Thus if 12-for-12 is the standard for detailed items in Nordstrom, the standard should at least approach 100% at a much higher level of a company - not 50%.

For shareholders the greater importance of macro issues is supported by text in rule 14a-8:

i. Question 9: If I have complied with the procedural requirements, on what other bases may a company rely to exclude my proposal? ...

7. Management functions: If the proposal deals with a matter relating to the company's ordinary business operations.

In Nordstrom Inc., the company argued:

A comparison of the Proponent's "code of conduct" and the Guidelines reveals that the Guidelines include each form of prohibited supplier conduct listed in the Proposal and include the means to verify compliance as requested in the Proposal. The Proponent, for example, requests that under the code of conduct the Company will not do business with suppliers which:

(1) utilize forced or prison labor;

(2) employ children under compulsory school age or legal working age;

(3) fail to follow prevailing practice and local laws regarding wages and hours;

(4) fail to maintain a safe and healthy working environment; or

(5) contribute to local environmental degradation.

In addition, the Proponent requests that the Company verify its suppliers' compliance through certification, regular inspections and/or other monitoring processes.

Under the Guidelines, the Company's vendors are expected to refrain from:

(1) utilizing prison or forced labor;

(2) utilizing child labor;

(3) failing to offer wages, hours and overtime consistent with prevailing local industry standards;

(4) failing to provide safe and healthy work environments for their workers;

(5) failing to demonstrate a commitment to the environment;

(6) failing to comply with all applicable legal requirements; or

(7) discriminating.

In Texaco Inc., 2001 SEC No-Act. LEXIS 136 (Jan. 30, 2001) a shareholder proposal, which urged this company's board of directors to adopt, implement and enforce a workplace code of conduct based upon the International Labor Organization's conventions on workplace human rights, including the five principles set forth in the proposal, may not be omitted from the company's proxy material under rule 14a-8(i)(10).

The company argued that the proposal had been substantially implemented because the company already had endorsed the Sullivan Principles. The proponent noted that the Sullivan Principles did not cover all of the subjects addressed by the International Labor Organization's Principles nor were the Sullivan Principles co-extensive with them.

In PPG Industries, Inc., 2001 SEC No-Act. LEXIS 124 (Jan. 22, 2001) the company was required to include a proposal asking the board to adopt the International Labor Organization's conventions on workplace human rights, including the five principles set forth in the proposal. The company argued that it had substantially implemented the proposal because it had adopted various policies, such as its EEO and Global Code of Ethics policies, or was subject to certain laws, including the National Labor Relations Act and the ILO's Convention 105 regarding forced labor which had been ratified by the U.S., relating to concerns raised in the proposal. The proponent countered by pointing out precisely how the measures cited by the company fell short of substantial implementation. The proponent also argued that the heart of the proposal was to create a single document that explicitly and in one place committed the company to the enumerated principles.

A vote is consistent with fiduciary duty

A vote gives the board greater incentive to meet its fiduciary duty

The second part of this poison pill proposal emphasizes the importance of shareholder opportunity to vote. This is reinforced by company response statements to shareholder proposals which repeatedly state that companies carefully evaluate precatory shareholder votes.

For instance The Boeing Company 2003 response statement to the poison pill shareholder proposal specifically noted the 50% vote the proposal topic received at the company 2003 annual meeting and added, "... the Board of Directors and its Governance and Nominating Committee have carefully considered and evaluated the proposal, after being briefed on the proposals' historical, policy, economic and legal implications." The Boeing Company seems to have arranged a special briefing for the Board as a result of the shareholder vote.

It appears from The Boeing Company 2003 response statement that the non-binding shareholder vote gave the board added incentive to consider its position on the proposal topic. Giving the board added incentive to consider the merits of a key governance topic gives the board greater incentive to meet its fiduciary duty to shareholders under state law.

The two-element policy calls for a vote at each of the two points. If the company sets up a condition where it can avoid a vote at, particularly at the foundational element then there is no substantial (extensive) implementation.

The board can take a false sense of security in knowing it can remove the policy at any time without any shareholder vote at any time. This false sense of security can impact shareholder value. It can also lead to management complacency and to the board marginally meeting fiduciary duty or less.

The company has not provided a precedent where a proposal which called for a shareholder vote under two circumstances was substantially implemented by a policy that enabled the company to avoid both such votes.

Hewlett Packard (December 24, 2003) essentially said that half the baby was as good as the whole baby on poison pills and shareholder votes. One possible interpretation of Hewlett Packard is that it gives a company the power to repeal a poison pill policy as soon as it receives a no action letter based on adopting that very policy.

The company has not claimed that the company would lack the power in this instance to take the Office of Chief Council Response letter, issued on the substantially implemented issue, on dayone and on day-two repeal the policy which was the linchpin to obtaining the day-one Response letter.

The key point of this poison pill proposal is a shareholder vote. It does not seem credible that a policy is substantially implemented when the company has the power to take a December 24, 2003 Response letter and on December 26, 2003 repeal the policy that was the linchpin to the December 24, 2003 Response. Furthermore there would be no shareholder vote before or after.

The company has not provided a precedent where a Staff Response of substantial implementation allowed the repeal of the policy critical to the staff Response. Thus the repeal could be timed to the very minute after the fax arrival of the Staff Response letter. The company has provided no argument rebutting the ability of the board to pass a resolution now that repeals the policy once the Response letter comes through on the company fax machine.

Pfizer Inc. (PFE) in 2003 had the transparency to adopt this same half-baby policy with more detail to reveal the limitations (from a shareholder viewpoint) of such a policy: "This policy may be revised or repealed without prior public notice and the Board may thereafter determine to act on its own to adopt a poison pill"

The enclosed Dow Chemical Company Adoption of Stockholder Rights (Poison Pill) Policy, adopted February 13, 2003, prior to the company policy, added two key provisions beyond what one company called its "as far as it can go" company policy:

1) Any stockholder rights plan so adopted by the Board without prior stockholder approval will be submitted to a non-binding vote of stockholders as a separate ballot item at the next subsequent meeting of Dow stockholders.

2) The Board shall not repeal this Policy without first submitting it to a non-binding vote of Dow shareholders.

The company has not argued that the Dow Policy is contrary to state law.

The company has not submitted an argument stating that item 1) and 2) above are inconsistent with a fiduciary out.

CII Alerts, Council Research Service, November 13, 2003 establishes concern regarding meaningless poison pill policies. It stated:

SO FAR, WE'VE TRACKED 62 majority votes on poison pill proposals submitted in 2003. Only seven have adopted policies terminating their pills or amending their policies.

3M, Hewlett-Packard and JP Morgan Chase, which also don't have poison pills, responded to the majority votes by approving policies to get shareholder approval before adopting any poison pills. But their policies include a huge loophole giving their boards the right to adopt pills without prior shareholder approval if, as fiduciaries, they decide a pill would be in the best interests of shareholders. These clauses effectively render the policies meaningless.

The following are precedents where substantially implement was not concurred with.

Alaska Air Group, Inc. (March 31, 2003)

A shareholder proposal, which recommends that this company's board of directors redeem any poison pill previously issued and not adopt or extend any poison pill unless such adoption or extension has been submitted to a shareholder vote, may not be omitted under rule 14a-8(i)(10).

AMR Corp. (April 4, 2003)

A shareholder proposal, which requests that this company annually submit to a shareholder vote any poison pill adopted since the company's previous annual meeting and/or currently in place, may not be omitted from the company's proxy material under rule 14a-8(i)(10).

3M Co. (Jan. 28, 2003)

A shareholder proposal, which requests that this company's board of directors "redeem any poison pill previously issued (if applicable) and not adopt or extend any poison pill unless such adoption or extension has been submitted to a shareholder vote," may not be omitted from the company's proxy material under rule 14a-8(i)(10).

Sabre Holdings Corp. (March 20, 2003)

A shareholder proposal, which requests that this company's board of directors redeem any poison pill previously issued and not adopt or extend any poison pill unless such adoption or extension has been submitted to a shareholder vote, may not be omitted from the company's proxy material under rule 14a-8(i)(10).

UST Inc. (Dec. 26, 2003)

The proposal here goes beyond each of the above proposals in calling for a precatory vote if the board repeals the foundational pill policy itself.

Fiduciary Out

A non-binding vote on the second part of this two-element proposal regarding the removal of the proposal once adopted is consistent with a fiduciary out.

Not all proposals with a fiduciary out are substantially identical

A non-binding vote on repealing a policy is consistent with a fiduciary out

Not all poison pill proposals with a fiduciary out are substantially identical. Both a two-point policy and a one-point policy can have a fiduciary out. The fiduciary out of the two-point policy does not force it to be substantially implemented by a one-point policy.

Oxymoron Opinion

Legal opinions of Richard, Layton & Finger are an oxymoron and paradox: They state that submitting a poison pill plan to a stockholder vote after the plan is adopted would impose "substantial delay" or similar text. Thus these opinions are in the position of touting an illogical claim: That a vote after a pill adoption delays the pill adoption itself. This may be a key defect in a number of Richard, Layton & Finger opinions in the no action process and may subject such opinion to credibility questions.

There is no point-by-point analysis in these opinions to explain this reversal of logic.

I do not believe that the company has met its burden of proof obligation according to rule 14a-8 on substantially implement in regard to a half-baby poison pill policy.

For the above reasons this is to respectfully request non-concurrence with the company no action requests on this issue in particular.

Sincerely,

/s/

John Chevedden

[APPENDIX 3]

CERTIFIED RESOLUTION

Adoption of Stockholder Rights Policy

RESOLVED, upon the recommendation of the Committee on Directors and Governance that the Board of Directors adopt the following Stockholder Rights Policy for the Company:

The Board of Directors shall obtain stockholder approval prior to adopting any stockholder rights plan; provided, however, that the Board may act on its own to adopt a stockholder rights plan if, under the then current circumstances, the Board in the exercise of its fiduciary responsibilities, deems it to be in the best interest of Dow's stockholders to adopt a stockholder rights plan without the delay in adoption that would come from the time reasonably anticipated for stockholder approval. Any stockholder rights plan so adopted by the Board without prior stockholder approval will be submitted to a non-binding vote of stockholders as a separate ballot item at the next subsequent meeting of Dow stockholders. The Board shall not repeal this Policy without first submitting it to a non-binding vote of Dow stockholders.

Certification

I. Thomas E. Moran, Assistant Secretary of The Dow Chemical Company (the "Company"), do hereby certify that the foregoing is a full, true and correct copy of a resolution adopted at a meeting of the Board of Directors of the Company, held at the offices of the Company in Midland, Michigan, on the 13^thday of February, 2003, at which meeting a quorum of the Board of Directors was present, and that, as of the date below, such resolution has not been revoked, annulled or modified in any manner whatsoever, and is in full force and effect.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of the Company this 13* day of February, 2003.

/s/

Thomas E. Moran, Assistant Secretary

[INQUIRY LETTER]

January 31, 2004

6 Copies
7th copy for date-stamp return

Via Airbill

Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
Mail Stop 0402
450 Fifth Street, NW
Washington, DC 20549

Rebuttal to $5.11 No Action Request
3M Company (MMM)
Poison Pill Proposal
Nick Rossi

Ladies and Gentlemen:

This is in further support of the January 23, 2004 letter.

The shareholder proposal states:

The company policy states:

The following provisions are thus not implemented in the company policy:

1. A vote is not needed to adopt a pill ("if ... the Board ... makes a determination").

2. Since no vote is required to adopt a pill then the first "shareholder vote as a separate ballot item" is not implemented.

3. No vote ever is required to repeal the entire policy

4. Since no vote is required to repeal the entire policy then the second "shareholder vote as a separate ballot item" is not implemented.

5. Since no vote is required to repeal the entire policy then "earliest election date" is not implemented.

Thus all shareholder vote provisions in this proposal are waived by a Board "determination" based vaguely on "fiduciary responsibilities."

Instead of addressing the submitted proposal the company policy seems to address a proposal which would read:

Although this proposal calls for a shareholder vote on a poison pill, this vote can be bundled with a number of other items of greater value as an all-or-nothing vote. Additionally the board can adopt a poison pill without a shareholder vote at any time the board feels it is in the best interest to do so. If such a pill is adopted it can have a 10-year term and no vote would be required during the 10-year term. The board can repeal this entire foundational policy at any time without notice.

I do not believe the company has met its burden of proof obligation according to rule 14a-8.

For the above reasons this is to respectfully request non-concurrence with the company no action request.

Sincerely,

/s/

John Chevedden

cc: Nick Rossi
W. James McNerney, Jr.

[INQUIRY LETTER]

January 31, 2004

6 Copies
7th copy for date-stamp return

Via Airbill

Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
Mail Stop 0402
450 Fifth Street, NW
Washington, DC 20549

Poison Pill Proposals and Not Substantially (Extensively) Implemented

Ladies and Gentlemen:

The company has not claimed that the company would lack the power in this instance to take the Office of Chief Council Response letter, issued on the substantially implemented issue, on day-one and on day-two repeal the policy which was the linchpin to obtaining the day-one Response letter.

The company has not provided a precedent where a Staff Response of substantial implementation allowed the repeal of the policy critical to the staff Response the instant that the company received the staff Response.

Thus the repeal could be timed to the very minute after the fax arrival of the Staff Response letter. The company has provided no argument rebutting the ability of the board to pass a resolution now that repeals the policy once the Response letter comes through on the company fax machine.

Pfizer Inc. (PFE) in 2003 had the transparency to adopt this same half-baby policy with more detail to reveal the limitations (from a shareholder viewpoint) of such a policy:

"This policy may be revised or repealed without prior public notice and the Board may thereafter determine to act on its own to adopt a poison pill"

The Dow Chemical Company Adoption of Stockholder Rights (Poison Pill) Policy, adopted February 13, 2003, prior to the company policy, added two key provisions beyond what one company called its "as far as it can go" company policy:

2) The Board shall not repeal this Policy without first submitting it to a non-binding vote of Dow shareholders.

The company has not argued that the Dow Policy is contrary to state law.

The company has not submitted an argument stating that item 1) and 2) above are inconsistent with a fiduciary out.

The company has not made any analogous claim that a Board of Directors, which permits ratification of auditors, has abdicated its responsibility for the selection of auditors.

ElementAn Essential Component

The following is additional material which applies to a poison pill proposal for a two-element single-concept policy calling for:

1) A shareholder vote policy regarding a poison pill Plus

2) A shareholder vote if the foundational policy is repealed after adoption.

The ability to have a vote on repealing the foundational policy is critical to the underlying policy having any meaning.

This letter addressees the substantially implemented issue.

The two-element policy calls for a vote at each of two points. There is no substantial implementation if the company sets up a condition:

1) Where the company has complete control

2) And the company can avoid a vote at both element-one and element-two

In many proposals 6-elements are missing such as:

The following provisions are thus not implemented in the company policy:

1. A vote is not needed to adopt a pill ("unless the Board ...").

2. Since no vote is required to adopt a pill then the first "shareholder vote as a separate ballot item" is not implemented.

3. No vote whatsoever is needed for a pill with a 364-day term ("within one year").

a. If the pill "expires" after 364-days a new pill can be adopted.

b. This expire-and-adopt-again cycle can be repeated year after year.

4. No shareholder vote ever applies to repealing the entire policy.

5. Since no vote is required to repeal the entire policy then the second "as a separate ballot item" is not implemented.

6. Since no vote is required to repeal the entire policy then "earliest election date" is not implemented.

SEC Release No. 34-20091 said "The Commission proposed an interpretative change to permit the omission of proposals that have been `substantially implemented by the issuer.'" The key phrase is "substantially implemented by the issuer."

The proposal does not seem to be substantially implemented if the foundational policy of the proposal can be repealed at will or at whim by the board without a corresponding non-binding vote.

The second element of the proposal is arguably of greater importance because without it the first element of the proposal could be moot.

In Nordstrom Inc., the staff allowed a company to exclude a proposal where the company demonstrated that it already had adopted policies or taken actions to address each of 12 points of the proposal.

In Nordstrom a 12-for-12 match at a detail level of the company was apparently established in order to obtain concurrence.

For shareholders the greater importance of macro issues is supported by text in rule 14a-8:

i. Question 9: If I have complied with the procedural requirements, on what other bases may a company rely to exclude my proposal? ...

7. Management functions: If the proposal deals with a matter relating to the company's ordinary business operations.

In Nordstrom Inc., the company argued:

(1) utilize forced or prison labor;

(2) employ children under compulsory school age or legal working age;

(3) fail to follow prevailing practice and local laws regarding wages and hours;

(4) fail to maintain a safe and healthy working environment; or

(5) contribute to local environmental degradation.

In addition, the Proponent requests that the Company verify its suppliers' compliance through certification, regular inspections and/or other monitoring processes.

Under the Guidelines, the Company's vendors are expected to refrain from:

(1) utilizing prison or forced labor;

(2) utilizing child labor;

(3) failing to offer wages, hours and overtime consistent with prevailing local industry standards;

(4) failing to provide safe and healthy work environments for their workers;

(5) failing to demonstrate a commitment to the environment;

(6) failing to comply with all applicable legal requirements; or

(7) discriminating.

Cll Alerts, Council Research Service, November 13, 2003 establishes concern regarding meaningless poison pill policies. It stated:

SO FAR, WE'VE TRACKED 62 majority votes on poison pill proposals submitted in 2003. Only seven have adopted policies terminating their pills or amending their policies.

These clauses effectively render the policies meaningless.

The following is a recent precedent where substantially implement was not concurred with.

Continental Airlines, Inc. (January 28, 2004)

"The Proposal requests that the board submit any adoption, maintenance or extension of a poison pill to a shareholder vote and further requests that once adopted, any material change or discontinuing of this proposal be submitted to a shareholder vote at the earliest possible shareholder ballot.

"We are unable to concur in your view that Continental may exclude the proposal under rule 14a-8(i)(10). Accordingly, we do not believe that Continental may omit the proposal from its proxy material in reliance on rule 14a-8(i)(10)."

I do not believe that the company has met its burden of proof obligation according to rule 14a-8 on substantially implement in regard to a half-baby poison pill policy.

For the above reasons this is to respectfully request non-concurrence with the company no action requests on this issue in particular.

Sincerely,

/s/

[INQUIRY LETTER]

February 7, 2004

6 Copies
7th copy for date-stamp return

Via Airbill

Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
Mail Stop 0402
450 Fifth Street, NW
Washington, DC 20549

Rebuttal to $5.11 No Action Request
3M Company (MMM)
Poison Pill Proposal
Nick Rossi

Ladies and Gentlemen:

This is in further support of the January 23, 2004 and January 31, 2004 rebuttal letters.

Non-Functional Policy due to Lack of Transparency

The company claims that a shareholder proposal which calls for the transparency of a vote can be substantially implemented by a policy that lacks transparency:

1. No announcement of policy adoption confirmed.

2. No announcement if policy repealed.

Policy which allows no vote implements a proposal calling for a vote?

The company purports that a shareholder proposal which calls for a vote can be substantially implemented by a policy that allows for no vote. According to the company policy a new poison pill following a certain Board "determination" is not subject to any vote whatsoever.

The shareholder proposal states:

The company policy states:

The following provisions are thus not implemented in the company policy:

1. A vote is not needed to adopt a pill ("if ... the Board ... makes a determination").

2. Since no vote is required to adopt a pill then the first "shareholder vote as a separate ballot item" is not implemented.

3. No vote ever is required to repeal the entire policy

4. Since no vote is required to repeal the entire policy then the second "shareholder vote as a separate ballot item" is not implemented.

5. Since no vote is required to repeal the entire policy then "earliest election date" is not implemented.

Thus all shareholder vote provisions in this proposal are waived by a Board "determination" based vaguely on "fiduciary responsibilities."

Instead of addressing the submitted proposal the company policy seems to address a proposal which would read:

Precedent: 3M Company (Jan. 28, 2003)

"We are unable to concur in your view that 3M may exclude the proposal under rule 14a-8(i)(10)."

The 2002 and current company policy states:

December 30, 2002 proponent letter stated:

Weak Company Policy Lacks Authority

The company policy is too vague to have any or much authority to impact poison pills.

There is no definition of key terms of "best interests." The policy appears to grant an almost unlimited exception power to adopt a poison pillto apply under any "circumstance existing at the [any] time."

No Company Provision for Shareholder Vote

A shareholder vote is a key part of the proposal. There is no provision for a shareholder vote in the "3M Policy." Also there is no provision that the majority of the board would need to be independent to adopt a poison pill.

Circular Policy?

This substitute company policy could be largely moot because it can apparently be reversed next month or later without a shareholder vote. It can probably be reversed with a conference call.

The company may be attempting to set a precedent that this established proposal topic can be suppressed by a circular policy that rotates in a weak poison pill policy any year in which a related shareholder proposal topic is submitted. And then rotates the policy out after a no action determination favorable to suppression of a related shareholder proposal.

I do not believe the company has met its burden of proof obligation according to rule 14a-8.

For the above reasons this is to respectfully request non-concurrence with the company no action request.

Sincerely,

/s/

John Chevedden

cc: Nick Rossi

W. James McNerney, Jr.

[STAFF REPLY LETTER]

February 17, 2004

Response of the Office of Chief Counsel Division of Corporation Finance

Re: 3M Company

Incoming letter dated January 7, 2004

The proposal requests that the board submit the adoption, maintenance, or extension of any poison pill to a shareholder vote and further requests that once adopted, removal or dilution of the proposal be submitted to a shareholder vote at the earliest possible shareholder election. The proposal gives directors the "flexibility of discretion" in scheduling the vote and in responding to shareholder votes.

There appears to be some basis for your view that 3M may exclude the proposal under rule 14a-8(i)(10). We note 3M's representation that it has adopted and reaffirmed a policy that requires shareholder approval in adopting any poison pills. Accordingly, we will not recommend enforcement action to the Commission if 3M omits the proposal from its proxy materials in reliance on rule 14a-8(i)(10).

Sincerely,

/s/

Daniel Greenspan
Attorney-Advisor

Top

// This display the document title in the html page document.write(document.title);

Company Name: 3M Co. Public Availability Date: February 17, 2004

[INQUIRY LETTER]

[APPENDIX 1]

[APPENDIX 2]

[INQUIRY LETTER]

[INQUIRY LETTER]

[INQUIRY LETTER]

[INQUIRY LETTER]

[APPENDIX 3]

[INQUIRY LETTER]

[INQUIRY LETTER]

[INQUIRY LETTER]

Company Name: 3M Co.
Public Availability Date: February 17, 2004