EXHIBIT 10.16
DEERE & COMPANY
NONEMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
EFFECTIVE DATE: 01 JANUARY 1997
REVISED: 26 MAY 1999
DEERE & COMPANY
NONEMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
I. PURPOSE
The purposes of the Deere & Company Nonemployee Director Deferred Compensation
Plan ("Plan") are to attract and retain highly qualified individuals to serve as
Directors of Deere & Company ("Company") and to relate Nonemployee Directors'
interests more closely to the Company's performance and its shareholders'
interests.
II. ELIGIBILITY
Each member of the Board of Directors ("Board") of the Company who is not an
employee of the Company or any of its subsidiaries ("Nonemployee Director") is
eligible to participate in the Plan.
III. DEFINITIONS
(a) COMMITTEE. The Nominating Committee of the Board or any
successor committee of the Board.
(b) COMMON STOCK. The publicly traded $1 par value common
stock of the Company or any successor.
(c) COMPENSATION. Amounts payable for services as a
Nonemployee Director, excluding reimbursed expenses.
(d) DEFERRED ACCOUNT. The bookkeeping account maintained for
each participating Nonemployee Director which will be
credited with Deferred Amounts pursuant to the terms hereof.
(e) DEFERRED AMOUNTS. All amounts credited to a Nonemployee
Director's Deferred Account pursuant to the Plan.
(f) ELECTIVE DEFERRALS. Compensation voluntarily deferred by a
Nonemployee Director under the Plan after 31 December 1996
(other than Lump-Sum Deferral defined below).
(g) LUMP-SUM DEFERRAL. A one-time lump-sum amount for each
Nonemployee Director serving on 31 December 1996, which
amount is
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deferred under the Plan as described in Section V, below, as a
result of the termination of the John Deere Pension Benefit
Plan for Directors ("Retirement Plan").
(h) PARTICIPANT. A Nonemployee Director for whom a Lump-Sum
Deferral occurs on the Effective Date, or who elects to
participate in the Plan.
(i) PRE-1997 ELECTIVE DEFERRALS. Compensation deferred by a
Nonemployee Director prior to 1 January 1997 under the
predecessor Directors' Deferred Compensation Plan approved
30 January 1973, as amended from time to time.
(j) SECRETARY. The Secretary of the Company.
IV. EFFECTIVE DATE
The effective date of the Plan is 1 January 1997 ("Effective Date").
V. LUMP-SUM DEFERRAL
As of the Effective Date, the Retirement Plan will be eliminated and the present
value of the life annuity offered under the Retirement Plan for each Nonemployee
Director who is both a participant in the Retirement Plan and a member of the
Board on the Effective Date will be deposited into the Deferred Account of such
Nonemployee Director. The present value will be determined by using a discount
factor which shall be the rate for 10-year treasury stripped bonds in effect as
of 31 December 1996 and by using the 1984 Unisex Pension Mortality tables
published in the Pension Benefit Guaranty Corporation Regulation 2619, Appendix
A.
VI. ELECTIVE DEFERRAL
(a) Participants may elect to defer a part or all of their
annual Compensation by making an irrevocable deferral
election in writing on a form provided by the Company and
delivered to the Company not later than the Company may
direct. Elective Deferrals will become effective on the
first day of the following calendar quarter, at which time
they become irrevocable. Notwithstanding the preceding
sentence, any person who first becomes a Nonemployee
Director during a calendarquarter, may elect, before his or
her term begins, to defer a part or all of his or her
compensation that would otherwise be payable to him or her
during the remainder of such calendar quarter and each
succeeding calendar quarter until such election
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is modified or terminated as provided herein. A Participant
may discontinue deferrals, or may change his or her
investment choices, for future quarters by providing a
written election delivered to the Company not later than the
Company may direct. These changes will become effective on
the first day of the following calendar quarter.
(b) If the amount of a Participant's Compensation is changed,
the deferral percentage and investment alternative elections
shall continue to be applied to the new Compensation amount
after the change.
VII. DEFERRED ACCOUNT
(a) The Company shall establish a separate Deferred Account for
each Participant.
(b) Pre-1997 Elective Deferrals and the interest earned thereon
shall be credited to the Deferred Account and will continue
to be invested in the interest-bearing investment
alternative described below.
(c) Two investment alternatives will be available, as of the
Effective Date: an interest-bearing alternative and an
equity alternative denominated in units of Deere Common
Stock. Additional investment alternatives may be added by
subsequent amendment of the Plan.
(d) At the time of Elective Deferral, Participants may direct
their deferrals into either investment alternative, or a
combination of the two, in increments of 5%.
(e) Deferred amounts credited into the interest-bearing
investment alternative will be credited with interest at the
end of each calendar quarter at the interest rate identified
in the U.S. Federal Reserve Statistical Release, "bank prime
loan" rate for the second month of each calendar quarter,
plus 2%.
(f) Deferred Amounts credited into the equity alternative shall
be expressed and credited to each Participant's Deferred
Account in units ("Units") determined as hereinafter
provided. As of each date on which Deferred Amounts are
credited into the equity investment alternative, the Company
shall credit to such Deferred Account a number of Units and
fractional Units, rounded to three decimal places,
determined by dividing such Deferred Amounts by the Unit
Value (as defined below) of one share of Common Stock. The
"Unit Value" of one share of Common Stock shall be the
closing price of the Common Stock on the New York Stock
Exchange
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on the date on which Deferred Amounts are credited to the
Deferred Account or a payment is to be valued under Section
VIII (b) below, as the case may be; or if there were no
sales on that day, then Unit Value shall be the closing
price on the New York Stock Exchange Composite Tape on the
most recent preceding day on which there were sales. The
Lump-Sum Deferral shall be credited as of the Effective Date.
(g) When dividends are paid with respect to the Company's Common
Stock, the Company shall calculate the amount which would
have been payable on the Units in each Participant's
Deferred Account on each dividend record date as if each
Unit represented one issued and outstanding share of the
Company's Common Stock. The applicable number of Units and
fractional Units equal to the amount of such dividends
(based on the Unit Value of one share of the Company's
Common Stock on the dividend payment date) shall be credited
to each Participant's Deferred Account. In the event of any
capital stock adjustment to the Company's Common Stock or
other similar event, the number of Units or fractional Units
credited to Deferred Accounts shall be adjusted to
appropriately reflect such event.
(h) Participants credited with Units hereunder shall not have
any voting rights in respect thereof.
VIII. PAYMENT OF BENEFITS
(a) The value of a Participant's Deferred Account shall be
payable solely in cash, either in (i) a lump sum, or (ii) in
up to ten equal annual installments, in accordance with an
election made by the Participant by written notice delivered
to the Company prior to the calendar year in which payments
are to be made or commence. Such payment or payments shall
be made or commence, as the case may be, on the first
business day of the calendar year following the year of the
termination of service as Director.
(b) Any lump sum payment shall be valued as of the end of the
most recent calendar month prior to the payment date. The
amount of each installment payment shall be determined by
dividing the aggregate value credited to the Participant's
Deferred Account (as of the end of the most recent calendar
month prior to the payment date) by the remaining number of
unpaid installments; provided, however, that the Committee
may, in its absolute discretion, approve any other method of
determining the amount of each installment payment in order
to achieve approximately equal installment payments over the
installment period.
(c) The Company shall have the right to deduct from all payments
under this
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Plan the amount necessary to satisfy any Federal, state, or
local withholding tax requirements.
(d) The Committee, at its sole discretion, may alter the timing
or manner of payment of Deferred Amounts in the event that
the Participant establishes, to the satisfaction of the
Board, severe financial hardship. In such event, the
Committee may:
(1) provide that all or a portion of the amount
previously deferred by the Participant shall be
paid immediately in a lump-sum cash payment;
(2) provide that all or a portion of the installments
payable over a period of time shall be paid
immediately in a lump sum; or
(3) provide for such other installment payment
schedules as it deems appropriate under the
circumstances.
It is expressly provided that the amount distributed shall
not be in excess of that amount which is necessary for the
Participant to meet the financial hardship. Severe
financial hardship will be deemed to have occurred in the
event of the Participant's impending bankruptcy, the long
and serious illness of Participant or a dependent, other
events of similar magnitude, or the invalidation of a
deferral election by the Internal Revenue Service. The
Committee's decision in passing on the severe financial
hardship of the Participant and the manner in which, if at
all, the payment of Deferred Amounts shall be altered or
modified shall be final, conclusive and not subject to
appeal.
IX. DEATH OF PARTICIPANT
(a) In the event of the death of a Participant, any amounts
remaining in the Deferred Account will be paid to the
Participant's designated beneficiary in accordance with the
distribution choices (e.g., lump sum or installments)
elected by the Participant. These payments will commence on
the first business day of the calendar year following the
Participant's death. Amounts unpaid after the death of both
the Participant and the designated beneficiary will be paid
in a lump sum to the executor or administrator of the estate
of the last of them to die. In the event that a Participant
had not properly filed a beneficiary designation with the
Company prior to his or her death or, in the event a
beneficiary predeceases the Participant, any unpaid
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deferrals will be paid in a lump sum to the Participant's
estate.
(b) No 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.
X. CHANGE OF CONTROL
The following acceleration and valuation provisions shall apply in the event of
a "Change of Control" or "Potential Change of Control," as defined in this
Section X.
(a) In the event that:
(i) a "Change of Control" as defined in paragraph (b) of
this Section X occurs; or
(ii) a "Potential Change of Control" as defined in
paragraph (c) of this Section X occurs and the
Committee or the Board determines that the
provisions of this paragraph (a) should be invoked;
then, unless otherwise determined by the Committee or the
Board in writing prior to the occurrence of such Change of
Control, the value of all Units credited to a Participant's
Deferred Account shall be converted to cash based on the
"Change of Control Price" (as defined in paragraph X(d)) and
the aggregate amount credited to the Participant's Deferred
Account under the Plan shall be paid in one lump-sum payment
as soon as practicable following the date the Change of
Control or Potential Change of Control occurs, but in no
event more than 90 days after such date.
(b) For purposes of paragraph (a) of this Section X, a "Change
of Control" means 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 ("Exchange Act") whether or not the Company is then
subject to such reporting requirement, provided that,
without limitation, such a Change of Control shall be deemed
to have occurred if:
(i) any "person" (as defined in Sections 13(d) and
14(d) of the
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Exchange Act), other than a Participant in the Plan
or group of Participants in the Plan, 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 30% or more
of the combined voting power of the Company's then
outstanding securities;
(ii) during any period of two consecutive years, 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 _
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;
(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 of consolidation; or
(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 of the Company's assets.
(c) For purposes of paragraph (a) of this Section X, a "Potential
Change of Control" means the happening of any of the
following:
(i) the entering into an agreement by the Company
(other than with a Participant in the Plan or group
of Participants in the Plan), the consummation of
which would result in a Change of Control of the
Company as defined in paragraph (b) of this Section
X; or
(ii) the acquisition of beneficial ownership, directly
or indirectly, by any entity, person or group
(other than a Participant or group of Participants,
the Company or a majority owned subsidiary of the
Company, or any of the Company's employee benefit
plans including its trustee) of securities of the
Company representing 5% or more of the combined
voting power of the Company's
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outstanding securities and the adoption by the
Board of a resolution to the effect that a
Potential Change of Control of the Company has
occurred for purposes of the Plan.
(d) For purposes of this Section X, "Change of Control Price"
means the highest price per share of the Common Stock paid
in any transaction reported on the New York Stock Exchange
Composite Tape, or offered in any transaction related to a
Potential or actual Change of Control of the Company at:
(i) the date the Change of Control occurs;
(ii) the date the Potential Change of Control is
determined to have occurred; or
(iii) such other date as the Committee may determine
before the Change of Control occurs, or before or
at the time the Potential Change of Control is
determined to have occurred or the Committee or the
Board determines that the provisions of paragraph
X(a) shall be invoked, or at any time selected by
the Committee during the 60 day period preceding
such date.
(e) Notwithstanding anything to the contrary in the Plan, in the
event of a Change of Control (i) the Plan may not be amended
to reduce the formulas contained in paragraph VII(e) which
determine the rate at which amounts equivalent to interest
accrue with respect to cash amounts credited to a
Participant's Deferred Account, including cash amounts
attributable to the conversion of Units in a Participant's
Deferred Account pursuant to paragraph X(a), and (ii) the
successor Plan Administrator referred to in paragraph XI(d)
shall determine the rates under the interest formulas
contained in paragraph VII(e).
XI. MISCELLANEOUS
(a) The right of a Participant to receive any amount credited to
the Participant's Deferred Account shall not be transferable
or assignable by the Participant, in whole or in part,
either directly or by operation of law or otherwise,
including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy, or in any other
manner, and no right or interest established herein shall be
liable for, or subject to, any obligation or liability of
the Participant, except by will or by the laws of descent
and distribution. To the extent that any person acquires a
right to receive any amount credited to a Participant's
Deferred Account hereunder, such right shall be no greater
than that of an unsecured
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general creditor of the Company. Except as expressly
provided herein, any person having an interest in any amount
credited to a Participant's Deferred Account under the Plan
shall not be entitled to payment until the date the amount
is due and payable. No person shall be entitled to
anticipate any payment by assignment, alienation, sale,
pledge, encumbrance or transfer in any form or manner prior
to actual or constructive receipt thereof.
(b) The amounts credited to the Deferred Account shall constitute
an unsecured claim against the general funds of the Company.
The Company shall not be required to reserve or otherwise
set aside funds or shares of Common Stock for the payment of
its obligations hereunder. The Plan is unfunded, and the
Company will make Plan benefit payments solely from the
general assets of the Company as benefit payments come due
from time to time.
(c) Except as herein provided, this Plan shall be binding upon
the parties hereto, their designated beneficiaries, heirs,
executors, administrators, successors (including but not
limited to successors resulting from any corporate merger,
purchase, consolidation or otherwise of all or substantially
all of the business or assets of the Company) or assigns.
(d) In the event of a Change in Control, the Committee shall
interpret the Plan and make all determinations, construe any
ambiguity, supply any omission, and reconcile any
inconsistency, deemed necessary or desirable for the Plan's
implementation. The determination of the Committee shall be
conclusive. The Committee may obtain such advice or
assistance as it deems appropriate from persons not serving
on the Committee. The Secretary or other appropriate
officer of the Company shall, in the event of any Change in
Control, name as successor Plan Administrator any person or
entity (including, without limitation, a bank or trust
company). Following a Change in Control, the successor Plan
Administrator shall interpret the Plan and make all
determinations deemed necessary or desirable for the Plan's
implementation. The determination of the successor Plan
Administrator shall be conclusive. The Company shall
provide the successor Plan Administrator with such records
and information as are necessary for the proper
administration of the Plan. The successor Plan
Administrator shall rely on such records and other
information as the successor Plan Administrator shall in its
judgment deem necessary or appropriate in determining the
eligibility of a Participant and the amount payable to a
Participant under the Plan.
(e) The Board, upon recommendation of the Committee, may at any
time amend or terminate the Plan provided that no amendment
or termination shall impair the rights of a Participant with
respect to amounts then credited to the Participant's
Deferred Account, except with his or her consent.
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(f) Each Participant will receive a quarterly statement
indicating the amounts credited to the Participant's
Deferred Account as of the end of the preceding calendar
quarter.
(g) If adjustments are made to outstanding shares of Common Stock
as a result of stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations
and other changes in the corporate structure of the Company
affecting the Common Stock, an appropriate adjustment will
also be made in the number of Units credited to the
Participant's Deferred Account.
(h) This Plan and all elections hereunder shall be construed in
accordance with and governed by the laws of the State of
Illinois.
(i) Except where otherwise indicated by the context, any term
used herein connoting gender also shall include both the
masculine and feminine; the plural shall include the
singular, and the singular shall include the plural.
(j) In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Plan, and the
Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.
(k) Nothing in the Plan shall be deemed to create any obligation
on the part of the Board to nominate any Nonemployee
Director for reelection by the Company's shareholders, or
rights to any benefits not specifically provided by the Plan.
(l) The crediting of Units and the payment of cash under the
Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental
agencies as may be required.
(m) The Company may impose such other restrictions on any Units
credited pursuant to the Plan as it may deem advisable
including, without limitation, restrictions intended to
achieve compliance with the Securities Act of 1933, as
amended, Section 16 of the Securities Exchange Act of 1934,
as amended, with the requirements of any stock exchange upon
which Common Stock is listed, and with any blue sky or other
securities laws applicable to such Units.
(n) With respect to any Participants subject to Section 16 of
the Securities Exchange Act, transactions under the Plan are
intended to comply with all applicable conditions of Rule
16b-3 or its successors. To the extent any provision of the
Plan or action by the Board fails to so comply, it shall be
deemed null and void to the extent permitted by law and
deemed advisable by the Board.
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