EXHIBIT 10.5
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
09 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
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TABLE OF CONTENTS
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SECTION 1. PURPOSE AND ESTABLISHMENT
1.1 Establishment and Amendment of the Plan 69
1.2 Purpose 69
1.3 Cost of Benefits 69
1.4 Application of Plan 69
1.5 Administration and Termination 69
1.6 Nonencumbrance of Benefits 69
1.7 Employment Rights 70
1.8 Severability 70
1.9 Applicable Law 70
SECTION 2. DEFINITIONS
2.1 Definitions 70
2.2 Gender and Number 73
SECTION 3. SUPPLEMENTAL PENSION BENEFIT
3.1 Eligibility 73
3.2 Amount 73
3.3 Limitations 74
3.4 Reduction for Early Retirement under Contemporary Option 74
3.5 Commencement and Duration 74
3.6 Death Prior to Receipt of Lump Sum 75
SECTION 4. DISABILITY RETIREMENT BENEFIT
4.1 Eligibility 76
4.2 Amount 76
4.3 Commencement and Duration 76
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SECTION 5. CHANGE IN CONTROL OF COMPANY
Page
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5.1 Eligibility 76
5.2 Change in Control of the Company 76
5.3 Cause 77
5.4 Good Reason 77
5.5 Amount 78
5.6 Commencement and Duration 78
SECTION 6. SURVIVOR BENEFITS
6.1 Death of an active Participant or a
Participant Retired on Permanent & Total Disability Pension 78
6.2 Death of a Retired Participant 79
6.3 Commencement and Duration 79
6.4 Survivor Benefit Election After Retirement 79
SECTION 7. FINANCING OF BENEFITS
7.1 Contractual Obligation 80
7.2 Unsecured General Creditor 80
7.3 Funding 80
7.4 Vesting 80
7.5 Administration 80
7.6 Expenses 81
7.7 Indemnification and Exculpation 81
7.8 Effect on Other Benefit Plans 81
7.9 Tax Liability 81
EXHIBIT I 82
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JOHN DEERE SUPPLEMENTAL PENSION BENEFIT PLAN
SECTION 1. PURPOSE AND ESTABLISHMENT
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, provided 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.
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.
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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.
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)
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 Insurance Group Short-Term
Incentive Compensation Plan, 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.
(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
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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.
(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
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(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.
(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.
(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) "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.
(n) "RETIREMENT BENEFIT" shall be a single-life annuity or lump sum amount
as provided under Section 3 subject to provisions of Section 5.
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(o) "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.
(p) "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.
(q) "SURVIVING SPOUSE" shall mean the legally married spouse of a deceased
participant.
(r) "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.
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.
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(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.
(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.
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Alternatively, the Participant may elect to receive a lump sum payment for
all 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.
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.
The lump sum will be calculated using a discount rate of 100 percent of the
Pension Benefit Guaranty Corporation interest rates in effect at the
beginning of the plan year in which payment is made. The mortality table
used in the calculation shall be the 1984 Unisex Pension Mortality Table.
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 the Participant 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 Participant who is eligible for a survivor
benefit under Section 6 will receive a lump sum survivor's benefit under
this Plan bearing the same proportion to the Participant's lump sum payment
calculated under Section 3.5 as the Surviving Spouse's benefit under the
Qualified Retirement Plan bears to the Participant's benefit under the
Qualified Retirement Plan. Such lump sum shall be payable at the time
provided in Section 3.5.
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SECTION 4. DISABILITY RETIREMENT BENEFIT
4.1 ELIGIBILITY. An employee who qualifies for a total and permanent
disability retirement benefit in accordance with the provisions of the
Qualified Retirement Plan shall be entitled to a benefit under this Plan
upon redetermination to 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 retirement as defined in the Qualified
Retirement Plan.
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, redetermined to a normal Retirement Benefit under the Qualified
Retirement Plan, commence.
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
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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.
(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;
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(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;
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.
SECTION 6. SURVIVOR BENEFITS
6.1 Death of an active Participant or a Participant Retired on Permanent and
Total Disability Pension. 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 retired
under the Total and Permanent provisions of 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.
The survivor 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 survivor
spouse benefit under the Qualified Retirement Plan bears to the
Participant's benefit under Article IV, Section 1 of the Qualified
Retirement Plan.
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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 3.4 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 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 3.4 of this Plan.
The Survivor Benefit under this paragraph 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 provided the Participant is still living at that time.
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This Survivor Benefit election shall not become effective in any event if
the application is received after the first day of the month following the
month in which the retired employee has been married to the designated
spouse for one year.
Any survivor 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 retiree's monthly benefit under the Qualified
Retirement Plan and Section 3.2 of this Plan will also apply.
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
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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.
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.
81
EXHIBIT I
TITLES AS OF
1 NOVEMBER 1996 OFFICER SINCE
Hans W. Becherer Chairman & COO & CEO 26 Apr 1977
Bernard L. Hardiek President, Worldwide 26 Aug 1987
Ag. Equipment Division
Ferdinand F. Korndorf President, Worldwide 23 Sep 1991
Commercial & Consumer
Equipment Division
John K. Lawson Sr. VP, Engineering, 27 Feb 1985
Information & Technology
Eugene L. Schotanus Executive VP 29 Jan 1974
Financial Services
Joseph W. England Sr. VP, Worldwide Parts 29 Jan 1974
& Corp. Administration
Pierre E. Leroy President, Worldwide 12 Dec 1985
Industrial Equipment Div.
Michael S. Plunkett Sr., VP, Engineering, 29 Jan 1980
Technology & HR
Frank S. Cottrell VP, General Counsel 26 Aug 1987
& Corporate Secretary
Robert W. Lane Sr. VP & CFO 16 Jan 1996
John S. Gault former VP, Engr., Info, & Tech. 01 Jan 1994
GM, Harvester
Glen D. Gustafson former Comptroller 28 Jul 1981
Dir., Bus. Planning
Robert W. Porter Sr. VP, North American 16 Nov 1994
Ag. Marketing
82
EXHIBIT I (CONTINUED)
TITLES AS OF
1 NOVEMBER 1996 OFFICER SINCE
Adel A. Zakaria Sr. VP, Worldwide 01 Apr 1992
Ag Engr. & Mfg.
James D. White Sr. VP, Manufacturing 26 Aug 1987
Mark C. Rostvold Sr. VP, Worldwide 26 Aug 1987
Commercial & Consumer
Equip. Division
Dennis E. Hoffmann President 05 Dec 1990
John Deere Insurance
Michael P. Orr President 05 Dec 1990
John Deere Credit Company
Richard J. VanBell President 16 Jan 1994
John Deere Health Care
83