EXHIBIT 10.9
DEERE & COMPANY
VOLUNTARY DEFERRED COMPENSATION PLAN
ADOPTED 28 AUGUST 1985
AMENDED 11 DECEMBER 1986
AMENDED 26 MAY 1993 - EFFECTIVE 1 JULY 1993
AMENDED 7 DECEMBER 1994 - EFFECTIVE 1 JANUARY 1995
AMENDED 4 DECEMBER 1996 - EFFECTIVE 1 JANUARY 1997
TABLE OF CONTENTS
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DEERE & COMPANY
VOLUNTARY DEFERRED COMPENSATION PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE
1.1 ESTABLISHMENT. Deere & Company, a Delaware corporation, hereby
establishes, effective as of November 1, 1985, a deferred compensation
plan for executives as described herein, which shall be known as the
DEERE & COMPANY VOLUNTARY DEFERRED COMPENSATION PLAN (hereinafter called
the "Plan").
1.2 PURPOSE. The purpose of this Plan is to provide a means whereby
short-term incentive awards, including performance bonus, cash bonus and
profit sharing awards, and base salary payable by the Company to key
personnel may be deferred for a specified period.
SECTION 2. DEFINITIONS
2.1 DEFINITIONS. Whenever used hereinafter, the following terms shall have
the meaning set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means the Board Committee on Compensation of the
Board.
(c) "Company" means DEERE & COMPANY, a Delaware corporation.
(d) "Employee" means a regular salaried key employee (including
officers and directors who are also employees) of the Company or its
Subsidiaries, or any branch or division thereof.
(e) "Participant" means an Employee designated by the Committee to
participate in this Plan.
(f) "Subsidiary" means any corporation, a majority of the total
combined voting power of all classes of stock of which is directly or
indirectly owned by the Company.
(g) "Fiscal Year" means the 12-month period beginning November 1 and
ending October 31.
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2.2 GENDER AND NUMBER. Except when otherwise indicated by the context, any
masculine terminology when used in the Plan shall also include the
feminine gender, and the definition of any term herein in the singular
shall also include the plural.
SECTION 3. ELIGIBILITY FOR PARTICIPATION
3.1 ELIGIBILITY. Participation in the Plan shall be limited to those
Employees of the Company or any Subsidiary who are key to the Company's
growth and success and who are designated as Participants by the
Committee. In the event an Employee no longer meets the requirements for
Participation in this Plan, he shall become an inactive Participant,
retaining all the rights described under this Plan, except the right to
make any further deferrals, until the time that he again becomes an
active Participant.
SECTION 4. ELECTION TO DEFER
4.1 DEFERRAL AMOUNT
(a) Any Participant may elect to defer any part (in 5% increments up
to 95%) of an award to be paid under the provisions of the John
Deere Performance Bonus Plan. Such election must be made in
writing prior to the beginning of the Fiscal Year upon which the
award is based. Notwithstanding the Participant's election,
enough of the award must be paid in cash to cover all withholding
taxes. If not, the Company shall be authorized to reduce the
Participant's elected deferral in 5% increments until the
withholding taxes are covered.
(b) Any Participant may elect to defer any part (in 5% increments up
to 95%) of base salary. Such election must be made in writing
prior to the beginning of the calendar quarter in which the
deferrals are to commence and shall remain in effect for all
remaining calendar quarters of the calendar year. The deferral
percent may be increased in subsequent calendar quarters, but may
not be decreased. Notwithstanding the Participant's election,
enough salary must be paid in cash to cover all withholding taxes
and Participant payroll elections, such as health care premiums,
Deere PAC, United Way, Optional Life Insurance, etc. If not, the
Company shall be authorized to reduce the Participant's elected
deferral in 5% increments until the withholding taxes and the
Participant's payroll elections are covered, and the reduced
deferral percent shall remain in effect until the beginning of the
next calendar quarter, at which
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time it shall revert to the Participant's stated deferral percent
subject to the same reduction potential.
Notwithstanding amounts elected by the Participant for deferral
from the John Deere Performance Bonus Plan award, the total
deferred portion shall not be less than $1,000 in any given
calendar year. In the event the total deferred amount is less
than $1,000, it shall be paid pursuant to the normal payout
schedule for the John Deere Performance Bonus Plan.
Amounts of less than $1,000 per calendar quarter shall not be
deferred from salary.
4.2 DEFERRAL PERIOD AND PAYMENT METHOD. If the Participant defers any amount
pursuant to Section 4.1, the Participant shall also designate the period
and payment method for the deferral in the election. Payments of the
deferral amounts, plus any growth additions thereon, shall be made on the
date or dates specified by the Participant in the election. However, if
death, total and permanent disability, or termination (other than
retirement) occurs before retirement, all remaining deferrals plus any
growth additions, shall be distributed as a single lump sum payment in
January of the calendar year following the date of such death, disability
or termination.
In all other cases, the distribution must begin on a date specified by
the Participant in the election (whether the distribution is scheduled to
begin before or after the date of retirement) but no later than ten years
following the date of retirement. The Participant may elect to have
distribution made in up to ten annual installments from the date
distribution is to begin, but such distribution must be completed within
ten years following retirement.
If the Participant wishes to designate a distribution after retirement,
the Participant may designate in the election that distribution shall
begin at retirement or begin at a specified point in time, or during a
specified month, following the date of retirement, (Example #1:
Distribution to begin three months after retirement. Example #2:
Distribution to begin the January of the year following retirement.)
4.3 IRREVOCABLE ELECTIONS. The elections in Sections 4.1 and 4.2 are
irrevocable and may not be modified or terminated by the Participant or
his beneficiary.
SECTION 5. DEFERRED ACCOUNTS
5.1 PARTICIPANT ACCOUNTS. The Company shall establish and maintain a
bookkeeping account for each Participant, to be credited as of the date
the John Deere
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Performance Bonus Plan award or salary is actually deferred. While the
John Deere Performance Bonus Plan deferral will be credited to the
Participant's account when deferred as stated above, it will not begin
earning growth additions, under Section 5.2, until the first day of the
succeeding calendar quarter following the date of deferral.
5.2 GROWTH ADDITIONS. Each Participant's account shall be credited on the
first day of each calendar quarter with a growth addition computed on the
balance in the account as of the last day of the immediately preceding
quarter. The growth addition shall be equal to said account balance
multiplied by a growth increment. The method for determining the growth
increment shall be determined from time to time by the Committee. The
method of determining the growth increment, as stated on the election
form, that is in effect on the first date a growth addition is added to a
Participant's account will remain in effect for that deferral until that
entire deferral, and growth additions attributable to it, have been
distributed for a given deferral.
5.3 EFFECT ON OTHER COMPANY BENEFITS. Salary or bonus is deferred pursuant to
Section 4.1 of this Plan shall not decrease in any way benefits provided
under any other Company sponsored benefit plan. In the event deferrals
under this Plan decrease benefits payable under any qualified retirement
plan or limit deferrals under any qualified defined contribution plan,
such decrease or limit shall be restored by immediate participation in
the John Deere Supplementary Pension Plan or the Defined Contribution
Restoration Plan.
5.4 CHARGES AGAINST ACCOUNTS. There shall be charged against each
Participant's account any payments made to the Participant or to his
beneficiary in accordance with Section 6 hereof.
5.5 CONTRACTUAL OBLIGATION. It is intended that the Company is under a
contractual obligation to make payments from a Participant's account when
due. Account balances shall not be financed through a trust fund or
insurance contracts or otherwise unless owned by the Company. Payment of
account balances shall be made out of the general funds of the Company.
5.6 UNSECURED INTEREST. No Participant or beneficiary shall have any
interest whatsoever in any specific asset of the Company. To the extent
that any person acquires a right to receive payments under this Plan,
such right shall be no greater than the right of any unsecured general
creditor of the Company.
SECTION 6. PAYMENT OF DEFERRED AMOUNTS
6.1 PAYMENT OF DEFERRED AMOUNTS. Payment of a Participant's deferred salary,
or short-term incentive John Deere Performance Bonus Plan award plus
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accumulated growth additions attributable thereto, shall be paid in a
lump sum or in approximately equal annual installments, in the manner
elected by the Participant under Sections 4.1 and 4.2 of this Plan.
6.2 FINANCIAL HARDSHIP. 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:
(a) provide that all or a portion of the amount previously deferred by
the Participant shall be paid immediately in a lump sum cash
payment,
(b) provide that all or a portion of the installments payable over a
period of time shall be paid immediately in a lump sum, or
(c) provide for such other installment payment schedules as it deems
appropriate under the circumstances,
as long as 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, a dependent's long and serious
illness, 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.
SECTION 7. BENEFICIARY
7.1 BENEFICIARY. A Participant may designate a beneficiary or beneficiaries
who, upon his death, are to receive the distributions that otherwise
would have been paid to him. All designations shall be in writing and
shall be effective only if and when delivered to the Secretary of the
Company during the lifetime of the Participant. If a Participant
designates a beneficiary without providing in the designation that the
beneficiary must be living at the time of such distribution, the
designation shall vest in the beneficiary all of the distributions
whether payable before or after the beneficiary's death, and any
distributions remaining upon the beneficiary's death shall be made to the
beneficiary's estate.
A Participant may from time to time during his lifetime change his
beneficiary or beneficiaries by a written instrument delivered to the
Secretary of the Company. In the event a Participant shall not designate
a beneficiary or beneficiaries
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pursuant to this Section, or if for any reason such designation shall be
ineffective, in whole or in part, the distribution that otherwise would
have been paid to such Participant shall be paid to his estate and in
such event, the term "beneficiary" shall include his estate.
SECTION 8. RIGHTS OF EMPLOYEES, PARTICIPANTS
8.1 EMPLOYMENT. Nothing in this Plan shall interfere with or limit in any
way the right of the Company or any of its Subsidiaries to terminate any
Employee's or Participant's employment at any time, nor confer upon any
Employee or Participant any right to continue in the employ of the
Company or any of its Subsidiaries.
8.2 NONTRANSFERABILITY. No right or interest of any Participant in this Plan
shall be assignable or transferable, or subject to any lien, directly, by
operation of law, or otherwise, including execution, levy, garnishment,
attachment, pledge and bankruptcy. In the event of a Participant's
death, payment of any amounts due under this Plan shall be made to the
Participant's designated beneficiary, or in the absence of such
designation, to the Participant's estate.
SECTION 9. ADMINISTRATION
9.1 ADMINISTRATION. The Committee shall be responsible for the
administration of the Plan. The Committee is authorized to interpret the
Plan, to prescribe, amend, and rescind rules and regulations relating to
the Plan, provide for conditions and assurances deemed necessary or
advisable to protect the interest of the Company, and to make all other
determinations necessary or advisable for the administration of the Plan,
but only to the extent not contrary to the express provisions of the
Plan. The Committee shall determine, within the limits of the express
provisions of the Plan, the Employees to whom, and the time or times at
which, participation shall be extended, and the amount which may be
deferred. In making such determinations, the Committee may take into
account the nature of the services rendered by such Employees or classes
of Employees, their present and potential contributions to the Company's
or its Subsidiaries' success and such other factors as the Committee in
its discretion shall deem relevant. The determination of the Committee,
interpretation or other action made or taken pursuant to the provisions
of the Plan, shall be final and shall be binding and conclusive for all
purposes and upon all persons.
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SECTION 10. AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN
10.1 AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN. The Board, upon
recommendation of the Committee, at any time may terminate, and at any
time and from time to time and in any respect, may amend or modify the
Plan, provided, however, that no such action of the Board, without
approval of the Participant, may adversely affect in any way any amounts
already deferred pursuant to Section 4.1 of this Plan.
SECTION 11. MERGER OR CONSOLIDATION
11.1 MERGER OR CONSOLIDATION. If the Company shall be involved in a
dissolution, liquidation, merger, or consolidation in which the Company
and its Subsidiaries are not the surviving corporation, the Committee
may:
(a) terminate the Plan, and all amounts deferred, plus interest
additions shall become immediately payable in full, not
withstanding any other provisions to the contrary, or
(b) permit the Plan to continue, making any necessary adjustments or
modifications to reflect any impact of the dissolution,
liquidation, merger, or consolidation, as determined by the
Committee.
Amounts calculated under either (a) or (b) above shall be paid in full as
soon as practicable following any termination of the Plan.
SECTION 12. REQUIREMENTS OF LAW
12.1 REQUIREMENTS OF LAW. The payment of cash pursuant to this Plan shall be
subject to all applicable laws, rules, and regulations, and shall not be
made except upon approval of proper government agencies as may be
required.
12.2 GOVERNING LAW. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of
Illinois.
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SECTION 13. WITHHOLDING TAXES
13.1 WITHHOLDING TAXES. The Company shall have the right to deduct from all
payments under this Plan an amount necessary to satisfy any Federal,
state, or local withholding tax requirements.
SECTION 14. EFFECTIVE DATE OF THE PLAN
14.1 EFFECTIVE DATE. The Plan shall become effective as of November 1, 1985.
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