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                                                                   EXHIBIT 10.16








                               DEERE & COMPANY


                NONEMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN






                       EFFECTIVE DATE: 01 JANUARY 1997

                           REVISED:  26 MAY 1999

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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


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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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