EXHIBIT 10.14
JOHN DEERE SUPPLEMENTAL PENSION BENEFIT PLAN
AS AMENDED 1 NOVEMBER 1987
AND FURTHER AMENDED:
24 FEBRUARY 1988
28 FEBRUARY 1990
27 FEBRUARY 1991
29 MAY 1991
26 AUGUST 1992
9 DECEMBER 1992
AMENDED MAY 1993 - EFFECTIVE 1 JULY 1993
AMENDED 8 DECEMBER 1993 - EFFECTIVE 1 JULY 1993
AMENDED 7 DECEMBER 1994
AMENDED MAY 1995 - EFFECTIVE 1 JANUARY 1995
AMENDED 13 DECEMBER 1995 - EFFECTIVE 1 JANUARY 1995
AMENDED 4 DECEMBER 1996 - EFFECTIVE 1 JANUARY 1997
AMENDED 7 JANUARY 1998 -- EFFECTIVE 1 JANUARY 1998
AMENDED 26 MAY 1999 -- EFFECTIVE 26 MAY 1999
AMENDED 19 JULY 1999 -- EFFECTIVE 1 JULY 1999
AMENDED 6 AUGUST 1999 - EFFECTIVE 1 AUGUST 1999
AMENDED - 2 NOVEMBER 1999 - EFFECTIVE 1 NOVEMBER 1999
JOHN DEERE SUPPLEMENTAL PENSION BENEFIT PLAN
TABLE OF CONTENTS
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JOHN DEERE SUPPLEMENTAL PENSION BENEFIT PLAN
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SECTION 1. PURPOSE AND ESTABLISHMENT
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1.1 ESTABLISHMENT AND AMENDMENT OF THE PLAN. Deere & Company (the
"Company") established and presently maintains the John Deere
Supplemental Pension Benefit Plan (the "Plan"), an unfunded
supplemental retirement plan for the benefit of its eligible
employees, on 1 November 1978. Said plan is hereby further amended
and restated as set forth herein effective as of 1 January 1997.
1.2 PURPOSE. The purpose of this Plan is to promote the mutual interests
of Deere & Company and its Officers and Executives.
1.3 COST OF BENEFITS. Cost of providing benefits under the Plan will be
borne by the Company.
1.4 APPLICATION OF PLAN. The provisions of this Plan as set forth herein
are applicable only to the employees of the Company in current
employment on or after 1 November 1987, except as specifically
provided herein. Except as so provided, any person who was covered
under the Plan as in effect on 31 October 1987 and who was entitled
to benefits under the provisions of the Plan shall continue to be
entitled to the same amount of benefits without change under this
Plan. Any person covered under the Plan as in effect 1 November 1987
who is age 55 or above on 1 November 1987 shall be entitled to the
larger of the benefit amount in Section 3.2 below or the benefit
provided under the John Deere Supplemental Pension Benefit Plan
effective prior to 1 November 1987.
1.5 ADMINISTRATION AND TERMINATION. The Plan is administered by and
shall be interpreted by the Company. The Board of Directors of the
Company or the Pension Plan Oversight Committee of the Board may at
any time amend or modify this Plan in their sole discretion. In
addition, the Deere & Company Compensation Committee shall have the
authority to approve all amendments or modifications that:
a. in the Compensation Committee's judgment are procedural,
technical or administrative, but do not result in changes in
the control and management of the Plan assets; or
b. in the Compensation Committee's judgment are necessary or
advisable to comply with any changes in the laws or
regulations applicable to the Plan; or
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c. in the Compensation Committee's judgment are necessary or
advisable to implement provisions conforming to a collective
bargaining agreement which has been approved by the Board of
Directors; or
d. in the Compensation Committee's judgment will not result in
changes to benefit levels exceeding $5 million dollars per
amendment or modification during the first full fiscal year
that such changes are effective for the Plan; or
e. are the subject of a specific delegation of authority from
the Board of Directors.
Provided, however, that this Plan shall not be amended or modified so as to
reduce or diminish the benefit then currently being paid to any employee or
surviving spouse of any former employee without such person's consent. The
power to terminate this Plan shall be reserved to the Board of Directors of
Deere & Company. The procedure for amendment or modification of the Plan by
either the Board of Directors, or, to the extent so authorized, the Pension
Plan Oversight Committee, as the case may be, shall consist of: the lawful
adoption of a written amendment or modification to the Plan by majority vote
at a validly held meeting or by unanimous written consent, followed by the
filing of such duly adopted amendment or modification by the Secretary with
the official records of the Company.
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1.6 NONENCUMBRANCE OF BENEFITS. No employee, retired employee, or other
beneficiary hereunder shall have any right to assign, alienate,
pledge, hypothecate, anticipate, or in any way create a lien upon any
part of this Plan, nor shall the interest of any beneficiary or any
distributions due or accruing to such beneficiary be liable in any
way for the debts, defaults, or obligations of such beneficiary,
whether such obligations arise out of contract or tort, or out of
duty to pay alimony or to support dependents, or otherwise.
1.7 EMPLOYMENT RIGHTS. Establishment of this Plan shall not be construed
to give any Participant the right to be retained by the Company or to
any benefits not specifically provided by the Plan.
1.8 SEVERABILITY. In the event any provision of the Plan shall be held
invalid or illegal for any reason, any invalidity or illegality shall
not affect the remaining parts of the Plan, but the Plan shall be
construed and enforced as if the invalid or illegal provision had
never been inserted, and the Company shall have the privilege and
opportunity to correct and remedy such questions of invalidity or
illegality by amendment as provided in the Plan.
1.9 APPLICABLE LAW. This Plan is fully exempt from Titles II, III, and
IV of ERISA. The Plan shall be governed and construed in accordance
with Title I of ERISA and the laws of the State of Illinois.
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SECTION 2. DEFINITIONS
2.1 DEFINITIONS. Whenever used in this Plan, it is intended that the
following terms have the meanings set forth below:
(a) "AVERAGE PENSIONABLE PAY" of the Traditional Pension Option
means the average for each year of the following:
(1) all straight-time salary payments, plus the larger of
(i) or (ii) through 31 December 2000 and as of 1 January 2001
plus the larger of (i) or (iii) below:
(i) the amounts paid under the John Deere Profit Sharing
Plan and the John Deere Short-Term Incentive Plan
prior to 1991 plus the sum of the bonuses paid under
the John Deere Performance Bonus Plan for Salaried
Employees, the John Deere Health Care,Inc. Annual
Performance Award Plan or the John Deere Credit
Company Profit Sharing Plan.
(ii) the amount paid prior to 1989 under the John Deere
Long-Term Incentive Plan, the John Deere Restricted
Stock Plan through 1998, or after 1998 the Pro-rated
Yearly Vesting Amount under the John Deere Equity
Incentive Plan.
(iii) the target amount under the John Deere Performance
Bonus Plan for Salaried Employees, the John Deere
Health, Inc. Annual Performance Award Plan or the
John Deere Credit Company Profit Sharing Plan.
(2) The ANNUAL AVERAGE of such amounts shall be based on the five
(5) highest years, not necessarily consecutive, during the
ten (10) years immediately preceding the earliest of the
Participant's retirement, total and permanent disability, or
death. The greater of any such short or long-term awards as
defined in 2.1(a)(1)(i) or (ii) above paid or vested during
the twelve months immediately following the Participant's
retirement, shall be substituted for the lowest such annual
short or long-term bonus award used to calculate Average
Pensionable Pay, if the result would be a higher pension
benefit. All amounts used in calculating the Average
Pensionable Pay will be determined before the effect of any
salary or bonus deferral or reduction resulting from an
election by the Employee under any Company sponsored plan or
program, but excluding any matching and/or growth factor,
Company contribution, and/or flexible credits provided by the
Company under any such plan or program.
(b) "AVERAGE MONTHLY PENSIONABLE PAY" means the Average
Pensionable Pay divided by twelve (12).
(c) "BOARD" means the Board of Directors of the Company.
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(d.1) CAREER AVERAGE PAY of the Contemporary Pension Option means the
following for those Officers listed in Exhibit 1:
(1) The highest five calendar years of the last ten not
necessarily consecutive as of 31 December 1996 plus
the greater of short-term bonus or long-term
incentive pay received in each of those years as
defined in section 2.1(a)(1)(i) or (ii) above.
plus
(2) Base pay and short-term bonuses as defined in Section
2.1(a)(1)(i) above paid beginning 1 January 1997 and
thereafter (excluding any long-term incentives as
defined in section 2.1(a)(1)(ii) above).
The amounts of all salary, short-term bonus, or other pay received as
described in (1) and (2) above will be divided by the number of pay
periods in which base pay was received to determine the Career
Average Pay.
(d.2) "CAREER AVERAGE PAY" of the Contemporary Pension Option means
the following for newly eligible Participants effective the
latter of 1 January 1997 or entering Base Salary Grade 13 or
above:
(1) The highest five consecutive of the last ten
anniversary years or the last 60 months of straight
time pay if higher as of 31 December 1996 for
Participants with five or more years of continuous
employment.
plus
(2) Restorable short-term performance bonuses earned and
paid during the years 1992-1996 credited at the rate
of 1/120th for each pay period of continuous
employment beginning 1 January 1997. Short-term
performance bonuses are defined in 2.1(a)(1)(i) of
this Plan.
plus
(3) All straight time pay plus short-term performance
bonuses paid on or after 1 January 1997 (excluding
any long-term incentives such as stock options).
The amounts of salary and bonus derived from (d.2)(1) plus (2) plus
(3) above are divided by the number of pay periods in which base pay
was received to determine the career average pay. This amount
multiplied times 2 transforms career average pay to a monthly
equivalent.
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(e) "COMPANY" means Deere & Company, a Delaware corporation.
(f) "CONTEMPORARY PENSION OPTION" means the benefit provided to
Officers Listed in Exhibit 1 who elect the Contemporary
Pension Option on or before 15 November 1996, and all other
Executives who become Participants on or after 1 January 1997.
(g) "DISABILITY" shall have the same meaning as under the
Qualified Retirement Plan or John Deere Long Term Disability
Plan for Salaried Employees
(h) "EXECUTIVE" means an employee base salary grade 13 or above
who on 1 January 1997 is a non-officer, or an employee who
attains base salary grade 13 or above after 1 January 1997.
(i) "OFFICER" means employees listed in Exhibit I and by way of
their election under the John Deere Pension Plan for Salaried
Employees may choose between this Traditional or Contemporary
Supplemental Plan option.
(j) "NON-OFFICER" means any employee of the Company who is not an
elected officer and does not hold one of the elected
positions listed in (i) above.
(k) "PARTICIPANT" means an Officer as defined in (i) above who
has served in such capacity for 36 months or Salary Grade 13
and above Executives who are eligible for participation under
the Contemporary Supplemental Plan option on the latter of 1
January 1997 or attainment of base Salary Grade 13.
(l) "PLAN YEAR" means the 12-month period beginning each November 1.
(m) "PRO-RATED YEARLY VESTING AMOUNT UNDER THE JOHN DEERE EQUITY
INCENTIVE PLAN" means for the purposes of calculating a long
term incentive amount under Section 2.1 (a) (1) (ii) of this
Plan is one-quarter of each bi-annual EIP Grant allocated to
each year following the Grant date multiplied times the Grant
Price. In the event an EIP Grant vests and bonus shares are
payable during the 12 months immediately following a
Participant's retirement, the actual value of the Grant will
be redetermined and allocated equally in one-quarter
increments to each of the years following the Grant date
which were used to calculate Average Pensionable Pay, if the
result would be a higher pension benefit.
(n) "QUALIFIED RETIREMENT PLAN" means the John Deere Pension Plan
for Salaried Employees which is a qualified plan under
Section 401(a) of the Internal Revenue Code. Provisions
under this Plan shall in no way alter provisions under the
Qualified Retirement Plan.
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(o) "RETIREMENT BENEFIT" shall be a single-life annuity or lump
sum amount as provided under Section 3 subject to provisions
of Section 5.
(p) "SECTION 162(m) PARTICIPANT" means a participant who is the
CEO or the four highest paid Executives, as reported in the
proxy, who is employed on the last day of the fiscal year.
(q) "SERVICE" shall have the same meaning in this Plan as
"service credit" in the Qualified Retirement Plan. Service
credit for benefit purposes in this plan for those Executives
NOT listed in Exhibit I will begin on the latter of 1 January
1997 or attainment of base salary grade 13 or above whichever
is later.
(r) "SURVIVING SPOUSE" shall mean the legally married spouse of a
deceased participant.
(s) "TRADITIONAL PENSION OPTION" means the benefit under this
Plan for Officers who (1) are listed in Exhibit 1, and (2)
are or become Participants, and (3) who elect the Traditional
Pension Option on or before 15 November 1996.
2.2 GENDER AND NUMBER. Except when otherwise indicated by the context,
any masculine term used herein shall also include the feminine, and
the singular shall also include the plural.
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SECTION 3. SUPPLEMENTAL PENSION BENEFIT
3.1 ELIGIBILITY. A Participant shall be eligible for benefits under the
provisions of this Plan who has attained age 60 under the Traditional
Pension Option or age 55 under the Contemporary Pension Option or at
any age if eligible to retire on 1 January 1997 and retires under the
provisions of the Qualified Retirement Plan.
3.2 AMOUNT. Upon termination and election to retire pursuant to 3.1
above, the Participant shall be entitled to a monthly Retirement
Benefit as follows:
(1) Traditional Pension Option equals (a) plus (b) below:
(a) 2% of average monthly pensionable pay for each year of
service as an Officer.
(b) 1 1/2% of average monthly pensionable pay for each year
of service as a non-Officer.
or
(2) Contemporary Pension Option equals (a) plus (b) below:
(a) 2% of career average pay for each year of service as an
Officer or Participant.
(b) 1 1/2% of career average pay for each year of service
as a non-Officer prior to the latter of 1 January
1997 or attainment of base salary grade 13 or above,
whichever is later.
This amount shall be subject to any reductions for
(1) Early retirement under the Contemporary Pension Option as
provided in Section 3.4 of this plan.
(2) Any formula used to calculate the reduction in the retiree's
monthly benefit under the Qualified Retirement Plan.
(3) Survivor benefits described in Section 6.
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(4) Provisions shown in Section 3.3 which follows and shall be
further reduced by the sum of
(i) the benefit earned under the Qualified Retirement Plan
and
(ii) the benefit provided under the John Deere Supplementary
Pension Plan.
3.3 LIMITATIONS.
(a) The total monthly Retirement Benefit paid under the
Traditional Pension Option of this Plan, the Qualified
Retirement Plan and the John Deere Supplementary Pension Plan
may not exceed 66-2/3% of the Average Monthly Pensionable
Pay. If such number is exceeded the amount payable under
this Plan shall be reduced.
(b) That part of the retired employee's monthly benefit which is
based on service credit prior to 1 July 1993 (1 January 1994
for employees of John Deere Credit Company, John Deere Health
Care, Inc. and John Deere Insurance Group) shall be reduced
by 1/2% for each full year in excess of 10 years that the
spouse is younger than the employee.
3.4 REDUCTION FOR EARLY RETIREMENT UNDER CONTEMPORARY PENSION OPTION.
The amount determined in 3.2 above shall be reduced 1/3% per month
from the unreduced full benefit age provided in the Contemporary
Pension Option of the Qualified Retirement Plan as of the date
benefits commence.
3.5 COMMENCEMENT AND DURATION. Payment of monthly retirement benefits
provided under this Plan shall commence on the first day of any
calendar month following the date of retirement as elected under the
Qualified Retirement Plan. Benefit payments will be made on the
first day of each calendar month thereafter. The last payment will
be made the first day of the calendar month in which the Participant
dies, subject to the provisions of Section 5.
Alternatively, the Participant may elect to receive a lump sum
payment for all or a portion (in 10% increments from 10% to 90%) of
the Retirement Benefits payable under this Plan including the 55%
joint and survivor annuity equal to 11% of the supplemental benefit
payable, adjusted for service accrued through 30 June 1993, or 31
December 1993 in the case of employees of John Deere Credit Company,
John Deere Health Care, Inc., or John Deere Insurance Group. Written
notice of the Participant's election to receive a lump sum payment
shall be irrevocable, and must be received by the Company within the
twelve (12) months prior to payment, but in no event subsequent to
the Participant's date of retirement. The lump sum payment shall be
made to Participant twelve (12) months after receipt of notice by the
Company but in no event prior to the Participant's retirement.
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Notwithstanding the above, a Section 162(m) Participant whose
retirement date coincides with the Company's fiscal year-end date
will not be paid the previously elected lump-sum payment until he is
no longer a Section 162(m) Participant.
Effective for Plan Years beginning 1 November 1999 and thereafter,
the lump sum will be calculated using an interest rate assumption
equal to the average yield in September of the preceding Plan Year on
30-year Treasury Constant Maturities (as published in October by the
Internal Revenue Service) and the mortality table shall be based upon
a fixed blend of 50% male mortality rates and 50% female mortality
rates from the GAM, as set forth in Revenue Ruling 95-6, in effect at
the beginning of the plan year in which payment is made. The age
used in the calculation will be the age of the Participant or, in the
case of Participant's death, the surviving spouse's age on the date
payment is made.
Monthly retirement benefits will be redetermined as soon as practicable and
increased benefits paid retroactive to the Participant's date of retirement for:
(a) any eligible long or short-term bonus paid after retirement
replacing an earlier bonus award used to calculate average
pensionable pay under the Traditional Pension Option
or
(b) any eligible short-term bonus paid after retirement added to
career average earnings used to calculate pension benefits
under the Contemporary Pension Option.
3.6 DEATH PRIOR TO RECEIPT OF LUMP SUM. If an active Participant or a
Participant on Permanent and Total Disability dies after receipt of
notice by the Company pursuant to Section 3.5 of Participant's
irrevocable election to receive a lump sum payment, but before the
expiration of twelve (12) months after receipt by the Company of such
election, a Surviving Spouse of the Participant who is eligible for a
survivor benefit under Section 6 will receive a lump sum survivor's
benefit under Section 6.1 of this Plan. The 55% surviving spouse
lump sum benefit will be payable no earlier than twelve (12) months
following receipt of notice by the Company of the deceased
Participant's irrevocable election but not before the first day of
the month following eligibility for a surviving spouse benefit under
the Qualified Retirement Plan.
If a retired Participant or a Participant on Permanent and Total
Disability subsequently retires under Normal Retirement and dies
after receipt of notice by the Company pursuant to Section 3.5 of
Participant's irrevocable election to receive a lump sum payment, but
before the expiration of twelve (12) months after receipt by the
Company of such election, a Surviving Spouse of the Participant who
is eligible for a survivor benefit under Section 6 will receive the
Participant's full lump sum benefit under Section 3.5 of this Plan in
lieu of Surviving Spouse benefits under Section 6. In the event the
retired Participant is unmarried at the date of
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death or the Surviving Spouse of the deceased Participant is not
eligible for survivor benefits under Section 6, the Participant's
full lump sum benefit will be paid to the deceased Participant's
estate. The lump sum benefit will be payable no earlier than twelve
(12) months following receipt of notice by the Company of the
deceased Participant's irrevocable election.
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SECTION 4. DISABILITY BENEFIT
4.1 ELIGIBILITY. An employee who qualifies for a total and permanent
disability benefit in accordance with the provisions of the Qualified
Retirement Plan or John Deere Long Term Disability Plan for Salaried
Employees shall be entitled to a benefit under this Plan upon retirement
under a normal retirement under the Qualified Retirement Plan.
4.2 AMOUNT. The amount shall be determined in accordance with 3.2 except
that service as an Officer shall be determined for the period of time
prior to total and permanent disability as defined in the Qualified
Retirement Plan or John Deere Long Term Disability Plan for Salaried
Employees.
4.3 COMMENCEMENT AND DURATION. In the event of Disability, the payment
method shall be the same as that elected pursuant to Section 3.5 of this
Plan. In the event of Disability, payments of Retirement Benefits
provided under this section shall be made or commence on the same date
as Retirement Benefits commence under the normal Retirement Provisions
under the Qualified Retirement Plan.
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SECTION 5. CHANGE IN CONTROL OF COMPANY
5.1 ELIGIBILITY. If a Change in Control of the Company (as defined in 5.2
below) shall have occurred, and a participant who has not attained age
60 ceases to be an employee of the Company, such participant shall be
eligible for benefits under the provisions of this plan notwithstanding
his age at the time of such cessation of employment, unless such
cessation of employment is (i) by the Company for "Cause" (as defined in
5.3 below), or (ii) by the participant for other than Good Reason (as
defined in 5.4 below). If the participant's cessation of employment is
by reason of Death or Permanent Disability, the participant's rights
under this Plan shall be governed by Section 4 and 6 of this Plan,
despite the occurrence of a change in control.
5.2. CHANGE IN CONTROL OF THE COMPANY. A change in control of the Company
shall mean a change in control of a nature that would be required to be
reported in response to Schedule 14A of Regulation 14A promulgated under
the Securities Exchange Act of 1934, as now or hereafter amended (the
"Exchange Act"), whether or not the Company is then subject to such
reporting requirement; provided, that, without limitation, such a Change
in Control shall be deemed to have occurred if:
(i) any "person" (as defined in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in
Rule 13(d-3) under the Exchange Act), directly or indirectly, of
securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company's then
outstanding securities;
(ii) during any period of two (2) consecutive years (not including any
period prior to December 9, 1987) there shall cease to be a
majority of the Board comprised as follows: individuals who at
the beginning of such period constitute the Board and any new
director(s) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved; or
(iii) the shareholders of the Company approve a merger or consolidation
of the Company with any other company, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 80% of
the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such
merger or consolidation.
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(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the
Company's assets.
5.3 CAUSE. Termination of employment by the Company for "Cause" shall mean
termination pursuant to notice of termination setting out the reason for
termination upon (i) the willful and continued failure by the
participant to substantially perform his duties with the Company after a
specific, written demand is developed; (ii) the willful engaging by the
participant in conduct which is demonstrably and materially injurious to
the Company, monetarily or otherwise or (iii) the participant's
conviction of a felony which impairs the participant's ability
substantially to perform his duties with the Company.
An act, or failure to act, shall be deemed "willful" if it is done, or
omitted to be done, not in good faith and without reasonable belief that
the action or omission was in the best interest of the Company.
5.4 GOOD REASON. "Good Reason" shall mean the occurrence, without the
participant's express written consent, within 24 months following a
Change in Control of the Company, of any one or more of the following:
(i) the assignment to the participant of duties materially
inconsistent with the participant's duties, responsibilities and
status prior to the Change in Control or a material reduction or
alteration in the scope of the participant's responsibilities
from those in effect prior to the Change in Control;
(ii) a reduction by the Company in the participant's base salary or
profit sharing award as in effect prior to the Change in Control;
(iii) the Company requiring the participant to be based at a location in
excess of twenty-five (25) miles from the location where the
participant is currently based;
(iv) the failure by the Company or any successor to the Company to
continue in effect any other Pension Plans, or its Profit Sharing
Plan for Salaried Employees, Short-Term Incentive Bonus Plan,
Deferred Compensation Plan, Long-Term Incentive Plan, the John
Deere Stock Option Plan or any other of the Company's employee
benefit plans, policies, practices or arrangements applying to
the participant or the failure by the Company to continue the
participant's participation therein on substantially the same
basis, both in terms of the amount of benefits provided and the
level of his or her participation relative to other participants,
as existed prior to the Change in Control;
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If Good Reason exists, the participant's right to terminate his or her
employment pursuant to this Subsection shall not be affected by
temporary or subsequent incapacity due to physical or mental illness.
Continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason
hereunder. Retirement at less than "normal retirement age" as defined
in the John Deere Pension Plan for Salaried Employees constitutes a
"termination" for purposes of this Subsection.
5.5 AMOUNT. The amount of the benefit payable under this section shall be
determined in accordance with Section 3.2.
5.6 COMMENCEMENT AND DURATION. Retirement Benefits provided under this
section shall be made in a lump sum on the first day of the calendar
month following the date the Participant ceases employment with the
Company, except as noted in Section 3.5. Calculation of the lump sum
payment shall be made in accordance with the terms set forth in Section
3.5.
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SECTION 6. SURVIVOR BENEFITS
6.1 In the event of the death of an active Participant or a Participant on
Permanent and Total Disability, notwithstanding Section 3.1 of this
Plan, the surviving spouse shall be eligible for a monthly survivor
benefit provided the Participant:
(a) was married and eligible to retire on the date of death
under early or normal retirement provisions of the
Qualified Retirement Plan or
(b) had been married for at least one year prior to death and
was on Total and Permanent Disability as provided in the
Qualified Retirement Plan or
(c) was married for at least one year prior to death and
Participant had elected the Contemporary Pension Option and
was vested under the Qualified Retirement Plan or
(d) was married for at least one year prior to death and the
Participant elected the Traditional Pension Option and had
three years or more of service as an Officer. The benefit
will be reduced 1/3% of 1% for each month the Officer would
have been under age 60 at the date this surviving spouse
benefit commences.
The surviving spouse benefit under this Plan for a Participant who died
prior to retirement as specified in 6.1 will be in the same proportion
of the Participant's benefit under Section 3 of this Plan as the
surviving spouse benefit under the Qualified Retirement Plan bears to
the Participant's benefit under Article IV, Section 1 of the Qualified
Retirement Plan. The surviving spouse benefit will be payable as a
monthly annuity or as a lump sum as of the first of the month following
eligibility for a surviving spouse benefit under the Qualified
Retirement Plan.
6.2 DEATH OF A RETIRED PARTICIPANT. The surviving spouse shall be eligible
for a monthly survivor benefit provided:
(a) the Participant is eligible for a retirement benefit under this
Plan and
(b) the Participant had not received the lump sum payment provided
under Section 3.5 of this Plan and
(c) the surviving spouse and Participant were either:
(1) continuously married before the Participant's early or
normal retirement or
(2) the Participant had elected a surviving spouse benefit
under section
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6.4 below.
The survivor benefit option elected by the retired Participant under
Article IV, Section 1 of the Qualified Retirement Plan shall apply to
the survivor benefit payable under this Plan. Any formula used to
calculate the reduction in the retiree's monthly benefit under the
Qualified Retirement Plan shall also apply under this Plan.
6.3 COMMENCEMENT AND DURATION. Payment of monthly death benefits provided
under this section shall commence on the same date that surviving spouse
benefits commence under the Qualified Retirement Plan. The last payment
will be made on the first day of the month of the Surviving Spouse's
death.
6.4 SURVIVOR BENEFIT ELECTION AFTER RETIREMENT. A Participant who retired
and is receiving benefits under this Plan, for whom no survivor benefit
is in effect, may elect a survivor benefit by filing a written
application with the Company provided:
(1) The Participant was not married at retirement and has subsequently
married, or
(2) The Participant has had a Survivor Benefit provision in effect
and has remarried, and
(3) The Participant had not received a lump sum payment provided in
Section 3.5 of this Plan.
The Survivor Benefit under this paragraph and any applicable reduction to
the retired Participant's benefit shall be effective with respect to
benefits falling due for months commencing with the first day of the
month following the month in which the Company receives an application,
but in no event before the first day of the month following the month in
which the retired Participant has been married to the designated spouse
for one year.
On or after 1 July 1999, if the Company is notified of a designated
spouse following the first day of the month in which the retired
employee has been married to the designated spouse for one year,
retroactive reductions and benefit adjustments will be made to the
retired Participant's pension benefit or the survivor's benefit, in the
event of a retired Participant's death for such late notice. These
retroactive reductions will become payable for the period of time based
on the date the survivor benefit would have become effective (the first
day of the month following the month in which the retired Participant
had been married to the designated spouse for one year).
Any surviving spouse benefit election by the retired Participant under
Article IV, Section 1 of the Qualified Retirement Plan shall apply to
the survivor benefit payable under this Plan. Any formula used to
calculate the reduction in the retired Participant's monthly benefit
under the Qualified Retirement Plan and Sections 3.2, 3.3, and 3.4 of
this Plan will also apply.
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SECTION 7. FINANCING OF BENEFITS
7.1 CONTRACTUAL OBLIGATION. It is intended that the Company is under a
contractual obligation to make the payments under this Plan when due.
No benefits under this Plan shall be financed through a trust fund
or insurance contracts or otherwise. Benefits shall be paid out of
the general funds of the Company.
7.2 UNSECURED GENERAL CREDITOR. Neither the Participant nor the
Surviving Spouse shall have any interest whatsoever in any specific
asset of the Company on account of any benefits provided under this
Plan. The Participant's (or Surviving Spouse's) right to receive
benefit payments under this Plan shall be no greater than the right
of any unsecured general creditor of the Company.
7.3 FUNDING. All amounts paid under this Plan shall be paid in cash from
the general assets of the Company. Such amounts shall be reflected
on the accounting records of the Company, but shall not be construed
to create, or require the creation of, a trust, custodial or escrow
account. No Participant shall have any right, title or interest
whatever in or to any investment reserves, accounts or funds that the
Company may purchase, establish or accumulate to aid in providing the
benefits under this Plan. Nothing contained in this Plan, and no
action taken pursuant to its provisions, shall create a trust or
fiduciary relationship of any kind between the Company and a
Participant or any other person. Neither shall an employee acquire
any interest greater than that of an unsecured creditor.
7.4 VESTING. Benefits under this Plan shall become nonforfeitable at the
earlier of disability, or retirement under the Traditional Pension
Option of the Qualified Retirement Plan after reaching age 60 or
after five years of service credit and termination of employment or
retirement under the Qualified Retirement Plan Contemporary Pension
Option. Notwithstanding the preceding sentence, a Participant or his
beneficiary shall have no right to benefits hereunder if the Company
determines that he engaged in a willful, deliberate or gross act of
commission or omission which is substantially injurious to the
finances or reputation of the Company.
7.5 ADMINISTRATION. This Plan shall be administered by the Company which
shall have, to the extent appropriate, the same powers, rights,
duties and obligations with respect to this Plan as it does with
respect to the Qualified Retirement Plan; provided, however, that the
determination of the Company as to any questions arising under this
Plan, including questions of construction and interpretation shall be
final, binding, and conclusive upon all persons.
7.6 EXPENSES. The expenses of administering the Plan shall be borne by
the Company.
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7.7 INDEMNIFICATION AND EXCULPATION. The agents, officers, directors,
and employees of the Company and its affiliates shall be indemnified
and held harmless by the Company against and from any and all loss,
cost, liability, or expenses that may be imposed upon or reasonably
incurred by them in connection with or resulting from any claim,
action, suit, or proceeding to which they may be a party or in which
they may be involved by reason of any action taken or failure to act
under this Plan and against and from any and all amounts paid by them
in settlement (with the Company's written approval) or paid by them
in satisfaction of a judgment in any such action, suit, or
proceeding. The foregoing provision shall not be applicable to any
person if the loss, cost, liability, or expense is due to such
person's gross negligence of willful misconduct.
7.8 EFFECT ON OTHER BENEFIT PLANS. Amounts credited or paid under this
Plan shall not be considered to be compensation for the purposes of a
qualified pension plan or any other benefit plan maintained by the
Company. The treatment of such amounts under other employee benefit
plans shall be pursuant to the provisions of such plans.
7.9 TAX LIABILITY. The Company may withhold from any payment of benefits
hereunder any taxes required to be withheld and such sum as the
Company may reasonably estimate to be necessary to cover any taxes
for which the Company may be liable and which may be assessed with
regard to such payment.
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EXHIBIT I
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