EXHIBIT 10.13
DEERE & COMPANY
NONEMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
EFFECTIVE DATE: 01 JANUARY 1997
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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 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").
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(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 year, at which time they
become irrevocable. Notwithstanding the preceding sentence, any
person who first becomes a Nonemployee Director during a calendar year
and who was not a Nonemployee Director on the preceding December 31,
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 year and each succeeding
calendar year until such election is modified or terminated as
provided herein. A Participant may discontinue deferrals, or may
change his or her investment choices, for future years 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 year.
(b) If the amount of a Participant's Compensation is changed during a
calendar year, the deferral percentage and investment alternative
elections for the calendar year shall continue to be applied to the
new Compensation amount after the change.
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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 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
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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 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.
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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
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;
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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
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 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;
(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.
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(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 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).
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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 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
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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.
(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.
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(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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