Document:

EXHIBIT 10.6

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

Amended:  26 August 1998

Amended by Supplement: 30 August 2006

(For special rules applicable to deferrals after
2004 see the supplement beginning on page 12)

 65
 

 

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
  Page

  
	
  SECTION
  1. ESTABLISHMENT AND PURPOSE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Establishment

  	
   

  	
  68

  
	
  1.2

  	
  Purpose

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2. DEFINITIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Definitions

  	
   

  	
  68

  
	
  2.2

  	
  Gender
  and Number

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  3. ELIGIBILITY FOR PARTICIPATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Eligibility

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4. ELECTION TO DEFER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Deferral
  Amount

  	
   

  	
  69

  
	
  4.2

  	
  Deferral
  Period and Payment Method

  	
   

  	
  70

  
	
  4.3

  	
  Irrevocable
  Elections

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5. DEFERRED ACCOUNTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Participant
  Accounts

  	
   

  	
  71

  
	
  5.2

  	
  Growth
  Additions

  	
   

  	
  71

  
	
  5.3

  	
  Effect
  on other Company Benefits

  	
   

  	
  71

  
	
  5.4

  	
  Charges
  Against Accounts

  	
   

  	
  72

  
	
  5.5

  	
  Contractual
  Obligation

  	
   

  	
  72

  
	
  5.6

  	
  Unsecured
  Interest

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  6. PAYMENT OF DEFERRED AMOUNTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Payment
  of Deferred Amounts

  	
   

  	
  72

  
	
  6.2

  	
  Financial
  Hardship

  	
   

  	
  72

  

 

 66
 

 

 

	
  

  	
   

  	
   

  	
  Page

  
	
  SECTION 7. BENEFICIARY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Beneficiary

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  8. RIGHTS OF EMPLOYEES, PARTICIPANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Employment

  	
   

  	
  73

  
	
  8.2

  	
  Nontransferability

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  9. ADMINISTRATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Administration

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10. AMENDMENT, MODIFICATION AND TERMINATION OF
  THE PLAN

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Amendment, Modification and Termination of the Plan

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11. MERGER OR CONSOLIDATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Merger or Consolidation

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12. REQUIREMENTS OF LAW

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Requirements of Law

  	
   

  	
  75

  
	
  12.2

  	
  Governing Law

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13. WITHHOLDING TAXES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Withholding Taxes

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14. EFFECTIVE DATE OF THE PLAN

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  Effective Date

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  SUPPLEMENT
  APPLICABLE TO DEFERRALS AFTER 2004

  	
   

  	
  76

  

 

 67
 

 

 

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 cash  incentive
awards, including performance bonus, cash bonus and profit sharing awards, or
any other compensation determined by the Committee to be subject hereto, 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.

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(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.

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

 69
 

 

 

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 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.

(c)                                  Any Participant may elect to defer any part (in
5% increments up to 95%) of a Bonus Award to be paid in cash under the
provisions of the John Deere Equity Incentive Plan and any other cash incentive
award that is authorized by the Committee to be deferred pursuant hereto.  Such election must be in writing prior to the
beginning of the calendar year in which such award would otherwise become
payable.  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.

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

 70
 

 

 

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 cash incentive award or salary
is actually deferred.  While the John
Deere Performance Bonus Plan or John Deere Equity Incentive 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, cash incentive awards or bonus 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.

 71
 

 

 

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 cash incentive award plus 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

 72
 

 

 

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 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.

 73

 

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.

Section
10.  Amendment, Modification and
Termination of the Plan

10.1                           Amendment, Modification and Termination of the
Plan.  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 Committee, 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

 74
 

 

 

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.

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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SUPPLEMENT TO

DEERE
& COMPANY

VOLUNTARY
DEFERRED COMPENSATION PLAN

APPLICABLE TO AMOUNTS DEFERRED AFTER DECEMBER 31,
2004

The
following provisions will apply only to amounts deferred under the Plan after
December 31, 2004 and not to amounts deferred under the Plan that were both
earned and vested before January 1, 2005. Amounts deferred under the Plan prior
to January 1, 2005 will be subject to the terms of the Plan without regard to
this supplement. Except to the extent amended hereby, the terms of the Plan
shall continue to apply to amounts deferred pursuant to the Plan.

1.               The following definitions are added to Section 2 (Definitions).

2.1(d)                  “Disability”
means a participant is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months or is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less than 3 months
under a disability or an accident and health plan covering employees of the
Company.

2.1(i)                      “Section
409A” means Section 409A of the Internal Revenue Code and the regulations and
other guidance thereunder.

2.1(j)                      “Unforeseeable
Emergency” means a severe financial hardship to the Participant or his
beneficiary resulting from an illness or accident of the Participant or his
beneficiary, the Participant’s or beneficiary’s spouse, or a dependent of the
Participant or beneficiary, loss of the Participant’s or his beneficiary’s
property due to casualty (including the need to rebuild a home following damage
to a home not otherwise covered by insurance, for example, not as a result of a
natural disaster), or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant or his beneficiary.

2.               Subsections 2.1(d) through (g) are renumbered as 2.1(e) through (h),
respectively.

3.               Section 4 (Election to Defer) is restated in its entirety as follows:

4.1                                 Deferral Amount

(a)                                  Any
Participant may elect to defer any part (in 5% increments up to

 76
 

 

 

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.

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.

(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 year in which the deferrals are to
commence and shall remain in effect for the remainder of the calendar year.
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 time it shall
revert to the Participant’s stated deferral percent subject to the same
reduction potential.

Amounts
of less than $1,000 per calendar quarter shall not be deferred from salary.

(c)                                  Any Participant may elect to defer any part (in
5% increments up to 95%) of any other cash incentive award that is authorized
by the Committee to be deferred pursuant hereto.  Such election must be in writing (i) in the
case of non-performance-based compensation or compensation for services
performed for less than 12 months, not later than the close of the Participant’s
taxable year preceding the taxable year in which services related to the award
are performed; or (ii) in the case of performance-based compensation (as
determined by the Committee pursuant to Section 409A) based on services
performed over a period of at least 12 months, prior to the close of the Fiscal
Year immediately preceding the calendar year of payment but in

 77
 

 

 

no
event later than 6 months before the end of the performance period.  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.

The
total deferred portion of any cash incentive award shall not be less than
$1,000 otherwise it shall be paid pursuant to the normal payout schedule for
the award.

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 first business
day of the calendar quarter specified by the Participant in the election.  However, if death, Disability, or separation
from service  (as determined by the
Secretary of the United States Treasury for purposes of Section 409A) 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 separation from service.

In
all other cases, the distribution must begin on the first business day of the
calendar quarter 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
the year of retirement.

If
the Participant wishes to designate a distribution after retirement, the
Participant may designate in the election that distribution shall begin on the
first business day of the third or later calendar quarter following retirement.

Notwithstanding
anything to the contrary herein, no distribution upon separation from service
(including upon retirement or other termination)  may be made before the first business day of
the calendar quarter that is six (6) months after such Participant’s date of
separation from service, or, if earlier, the date of the Participant’s death,
and any distribution that would be made but for application of this provision
shall instead be aggregated with, and paid together with, the first
distribution scheduled to be made after the end of such six-month period (or,
if earlier, the date of the Participant’s death).

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4.3                                 Irrevocable Elections.  The
elections in Sections 4.1 and 4.2 are irrevocable when made and may not be
modified or terminated thereafter by the Participant or his beneficiary.

4.               Subsection 5.1  (Deferred Accounts - Participant Accounts) is
amended by changing the phrase “John Deere Equity Incentive Plan” to “John
Deere Mid-Term Incentive Bonus Plan”.

5.               Subsection 6.2 (Payment of
Deferred Amounts - Unforeseeable
Emergency) is restated in its entirety as follows:

6.2                                 Unforeseeable Emergency.  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 Committee, the occurrence of an Unforeseeable
Emergency.  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, as determined under regulations of the Secretary of the United States
Treasury, the amount distributed shall not be in excess of that amount which is
reasonably necessary to satisfy the Unforeseeable Emergency (which may include
amounts necessary to pay taxes reasonably anticipated as a result of such
distribution(s)), after taking into account the extent to which such hardship
is or may be relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the Participant’s assets.

The
Committee’s decision in passing on the occurrence of an Unforeseeable Emergency
for 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.

6.             Subsection 8.3 (Rights of
Employees, Participants - No
Acceleration of Distributions) is added as follows:

8.3                                 No Acceleration of Distributions. Notwithstanding anything to the contrary

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herein,
this Plan does not permit the acceleration of the time or schedule of any
distribution under the Plan, except as permitted by Section 409A.

7.               Section 10.1 (Amendment,
Modification and Termination of the Plan) is amended by adding thereto:

“Notwithstanding
termination of the Plan, deferral amounts and growth additions shall be paid at
the times and in the manner provided for herein and shall not be accelerated,
unless (i) all arrangements sponsored by the Company that would be aggregated
with the Plan under Section 409A if the same Participant participated in all
such arrangements are terminated, (ii) no payments other than payments that
would be payable under the terms of such arrangements if the termination had
not occurred are made within 12 months of the termination of such arrangements,
(iii) all payments are made within 24 months of the termination of the
arrangements and (iv) the Company does not adopt a new arrangement that would
be aggregated with the Plan under Section 409A if the same Participant
participated in both arrangements, at any time within the five years following
the date of Plan termination.”

In addition, there is added immediately following
Section 10.1 a new Section 10.2 (Section 409A
Amendments) as follows:

“Section
409A Amendments.  Notwithstanding any
provision in this Plan to the contrary the Board,  the Committee or the Vice President of Human
Resources of the Company shall have the unilateral right to amend or modify (i)
this Plan, (ii) any Participant elections under this Plan and (iii) the time
and manner of any payment of benefits under this Plan in accordance with
Section 409A, in each case, without the consent of any Participant, to the
extent that the Board, the Committee or the Vice President of Human Resources
deems such action to be necessary or advisable to avoid the imposition on any
Participant of adverse or unintended tax consequences under Section 409A,
including recognition of income in respect of any benefits under this Plan
before such benefits are paid or imposition of interest or penalties.  Any determinations made by the Board,  the Committee or the Vice President under this
Section shall be final, conclusive and binding on all persons.”

8.               Section 11 (Merger or
Consolidation) is restated
in its entirety as follows:

Section 11.  Change in Control

11.1                           Change in Control.  If the
Company shall experience a “Change in Control Event” as defined under Section
409A, the Committee may:

(a)                                  terminate the Plan within the twelve months
following the Change in Control Event, and all amounts deferred, plus interest
additions shall be distributed in full as soon as practicable, but in no event
later than twelve

 80
 

 

 

months
following, the date the Plan is terminated, notwithstanding 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 Change in Control
Event, as determined by the Committee

 81EXHIBIT 10.19

DEERE
& COMPANY

NONEMPLOYEE
DIRECTOR DEFERRED COMPENSATION PLAN

 

EFFECTIVE
DATE: 01 JANUARY 1997

REVISED:  26 MAY 1999

AMENDED BY SUPPLEMENT: 30 AUGUST
2006

AMENDED:
29 NOVEMBER 2006

(For special rules applicable to deferrals after 2004 see the
supplement beginning on page 12)

 82
 

 

 

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

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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”).

(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

 84
 

 

 

would otherwise be payable to him or her during the remainder of such
calendar quarter and each succeeding calendar quarter 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 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

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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 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.

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(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.

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

 87
 

 

 

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;

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

 88
 

 

 

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 _ 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

 89
 

 

 

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).

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

 90
 

 

 

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 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

 

 91

 

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 shall also be made in the
number and type of Units credited to the Participant’s Deferred Account to
prevent dilution or enlargement of rights. The Committee’s or Board’s
determination as to what adjustments shall be made, and the extent thereof,
shall be final.

(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.

 92
 

 

 

(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.

 93
 

 

 

SUPPLEMENT
TO

DEERE
& COMPANY

NONEMPLOYEE
DIRECTOR DEFERRED COMPENSATION PLAN

APPLICABLE TO AMOUNTS DEFERRED AFTER DECEMBER 31,
2004

The
following provisions will apply only to amounts deferred under the Plan after
December 31, 2004 and not to amounts deferred under the Plan that were both
earned and vested before January 1, 2005. Amounts deferred under the Plan prior
to January 1, 2005 will be subject to the terms of the Plan without regard to
this supplement. Except to the extent amended hereby, the terms of the Plan
shall continue to apply to amounts deferred pursuant to the Plan.

1.     The following definitions are added to Section III (Definitions).

(k)                                  Section
409A.  Section 409A of the Internal
Revenue Code and the regulations and other guidance thereunder

(l)                                     Unforeseeable
Emergency.  A severe financial
hardship to the Participant or his beneficiary resulting from an illness or
accident of the Participant or his beneficiary, the Participant’s or beneficiary’s
spouse, or a dependent of the Participant or beneficiary, loss of the
Participant’s or his beneficiary’s property due to casualty (including the need
to rebuild a home following damage to a home not otherwise covered by
insurance, for example, not as a result of a natural disaster), or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant or his beneficiary.

2.               Section VI(a) (Elective
Deferral) is restated in its
entirety as follows:

(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 close of the calendar year
preceding the calendar year in which the deferrals are to commence.  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, may elect, before or within 30 days after 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, except that no such election shall be available to a
Nonemployee Director if prior to becoming eligible to participate in the Plan,
the Nonemployee Director was eligible to participate in any other arrangement
of the Company or its subsidiaries or affiliates that is an “account balance”
plan (as such term is

 94
 

 

 

defined for purposes of Section 409A) for directors or
independent contractors, other than a separation pay arrangement.  A Participant may discontinue or modify
deferrals, or may change his or her investment choices, for future calendar
years by providing a written election delivered to the Company not later than
the close of the calendar year preceding the calendar year in which the changes
are to commence.  These changes will
become effective on the first day of the following calendar year.

3.               Subsection VIII (Payment of
Benefits) is restated in its
entirety as follows:

(a)                                  The
value of a Participant’s Deferred Account attributable to amounts deferred in
respect of any calendar year (including related investment returns) 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 for which
the services to the Company are rendered. 
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
separation from service as Director as determined by the Secretary of the
United States Treasury for purposes of Section 409A.

(b)                                 Notwithstanding anything else herein to the
contrary, to the extent that a Participant is a “key employee” (as defined by
Section 416(i) of the Internal Revenue Code) of the Company, no distribution
upon separation from service (including upon retirement or other
termination)  may be made before the
first business day of the calendar quarter that is six (6) months after such
Participant’s date of separation from service, or, if earlier, the date of the
Participant’s death, and any distribution that would be made but for
application of this provision shall instead be aggregated with, and paid together
with, the first distribution scheduled to be made after the end of such
six-month period (or, if earlier, the date of the Participant’s death).

(c)                                  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.

(d)                                 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.

(e)                                  The
Committee, at its sole discretion, may alter the timing or manner of payment of
Deferred Amounts in the event that the Participant

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establishes, to the satisfaction of the Board, that
there has occurred an Unforeseeable Emergency. 
In such event, the Committee may:

(i)                                     provide
that all or a portion of the amount previously deferred by the Participant
shall be paid immediately in a lump-sum cash payment;

(ii)                                  provide
that all or a portion of the installments payable over a period of time shall
be paid immediately in a lump sum; or

(iii)                               provide
for such other installment payment schedules as it deems appropriate under the
circumstances.

It is expressly provided that, as determined under regulations of the
Secretary of the United States Treasury, the amount distributed shall not be in
excess of that amount which is reasonably necessary to satisfy the Unforeseeable Emergency (which may include
amounts necessary to pay taxes reasonably anticipated as a result of such
distribution(s)), after taking into account the extent to which such hardship
is or may be relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the Participant’s assets.  The Committee’s decision in passing on the
occurrence of an Unforeseeable Emergency for 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.

(f)                                    Notwithstanding
anything to the contrary herein, this Plan does not permit the acceleration of
the time or schedule of any distribution under the Plan, except as permitted by
Section 409A.

4.     Section X (Change in Control) is restated in its entirety as follows:

The following acceleration and
valuation provisions shall apply in the event of a “Change in Control Event” as
defined under Section 409A.

(a)                                  In the event that a “Change in Control Event”
occurs, then the value of all Units credited to a Participant’s Deferred
Account shall be converted to cash based on the “Change in Control Price” (as
defined in paragraph X(b)) 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 in Control Event occurs, but in no
event more than 90 days after such date.

(b)                                 For purposes of this Section X, “Change in
Control Price” means the price established pursuant to Section 409A and related
regulations in effect at the time of the Change in Control Event, and absent
such rules and regulations, the

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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
Change in Control Event of the Company at: (i) the date the Change in Control
Event occurs; or (ii) such other date as the Committee may determine before the
Change in Control Event occurs.

(c)                                  Notwithstanding anything to the contrary in the
Plan, in the event of a Change in Control Event (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).

5.     Subsection XI(b) (Miscellaneous) is amended by adding the following after the
initial sentence thereof:

“No Participant or beneficiary shall have any interest whatsoever in
any specific asset of the Company.

6.     Subsection XI(d) (Miscellaneous) is amended by replacing each occurrence of the
term “Change in Control” with “Change in Control Event”.

7.     Subsection XI(e) (Miscellaneous) is amended by adding thereto:

“Notwithstanding termination of the Plan, Deferred Accounts will be
paid at the times and in the manner provided for herein and shall not be
accelerated, unless (i) all arrangements sponsored by the Company that would be
aggregated with the Plan under Section 409A if the same Participant
participated in all such arrangements are terminated, (ii) no payments other
than payments that would be payable under the terms of such arrangements if the
termination had not occurred are made within 12 months of the termination of
such arrangements, (iii) all payments are made within 24 months of the
termination of the arrangements and (iv) the Company does not adopt a new
arrangement that would be aggregated with the Plan under Section 409A if the
same Participant participated in both arrangements, at any time within the five
years following the date of Plan termination.

Notwithstanding any provision in this Plan to the contrary the
Board,  the Committee or the Vice
President of Human Resources of the Company shall have the unilateral right to
amend or modify (i) this Plan, (ii) any Participant elections under this Plan
and (iii) the time and manner of any payment of benefits under this Plan in
accordance with Section 409A, in each case, without the consent of any
Participant, to the extent that the Board,

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the Committee or the Vice President of Human Resources deems such
action to be necessary or advisable to avoid the imposition on any Participant
of adverse or unintended tax consequences under Section 409A, including
recognition of income in respect of any benefits under this Plan before such
benefits are paid or imposition of interest or penalties.  Any determinations made by the Board,  the Committee or the Vice President under
this Section shall be final, conclusive and binding on all persons.”

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