Exhibit 10.18
EARLY RETIREMENT AGREEMENT
--------------------------
This Early Retirement Agreement is between Xxxxxxxxx X. Xxxxxxxx, an
individual, and Deere & Company, a Delaware corporation (the "Company").
WHEREAS, Xx. Xxxxxxxx has requested through the use of his deferred,
accrued, newly earned, and unused vacation, to conclude his active employment
beginning 01 August 2001 and thereafter to retire, effective 28 February 2002,
under the terms and conditions of the Xxxx Deere Pension Plan for Salaried
Employees, the undersigned parties have agreed to settle any actual or potential
dispute now and forever with respect to Xx. Xxxxxxxx'x employment or election to
retire.
NOW THEREFORE, in consideration for the promises above and the
covenants and undertakings expressed below and those expressed in the
Non-Competition Agreement executed contemporaneously and attached and
incorporated by reference herein, the undersigned parties agree as follows:
1. In consideration for:
(A) cash payment. The payment of $1,139,010.00 as a lump sum payment
------------
(less applicable withholdings) on 1 March 2002;
(B) insurance benefits. The continuation of health, accident, and life
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insurance benefits, at the employee-contributory rate through 31
August 2004 (as provided under and subject to the terms,
conditions, restrictions, and limitations of the applicable
benefit plans), said employee-contributory payments to be made by
Xx. Xxxxxxxx to the Company by the first calendar day of each of
the 30 months;
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(C) Performance Bonus. The continuation of eligibility for
-----------------
payment of a Performance Bonus, if such a Bonus is paid for
fiscal year 2001, and on a prorated basis through 28
February 2002 if one is paid for fiscal year 2002, and
thereafter from 01 March 2002 through 31 August 2004
calculated and paid on a prorated basis at the higher of the
target percentage rate of 70% of current base salary or
actual award for each of those years, payable in January
following the close of each fiscal year 2002, 2003 and 2004
in accordance with the plan's terms and conditions;
(D) long term incentive award. Eligibility for the December 2001
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long term incentive award delivered at Xx. Xxxxxxxx'x choice
as either (a) stock options equal to eight times current
annual base salary divided by the share price on the date of
grant or (b) a lump sum cash payment equal to the
Black-Scholes value of the same number of stock options as
in (a) above, with a default to choice (a) unless Xx.
Xxxxxxxx'x notification of his choice being (b) is delivered
in writing or via e-mail to the Company on or before 05
December 2001, and with a lump sum cash payment, if elected,
delivered to Xx. Xxxxxxxx on 15 January 2002;
(E) relocation allowance. Payment of expenses for the sale of
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Xx. Xxxxxxxx'x residence located at 0000 Xxxxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxx and for the costs associated with
relocation, including, purchase, if necessary, by the
Company of said residence, movement of
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household goods to a new primary residence more than fifty miles
outside the Quad Cities metropolitan area, for the time period
beginning 01 August 2001 and ending on 31 August 2004, for
relocation within the continental United States, unless
re-employment occurs during that period and Xx. Xxxxxxxx'x new
employer provides the same relocation benefits, in which case,
this provision becomes null and void. Xx. Xxxxxxxx shall provide
the Company a summary of the relocation benefits provided by such
new employer;
(F) executive career continuation. Career continuation services,
-----------------------------
including coverage of reasonable and necessary travel expenses to
and from Chicago for that purpose, for up to twelve months from
the date on which Xx. Xxxxxxxx shall engage such services, but in
no event commencing later than 1 March 2002;
(G) life insurance benefits. Payment upon Xx. Xxxxxxxx'x death
-----------------------
between 28 February 2002 and 31 August 2009, of a supplemental
amount equal to $715,608.00, representing the difference between
his retirement life insurance benefit and two times his present
base annual salary, unless re-employment occurs during that
period and Xx. Xxxxxxxx'x new employer provides the same level of
coverage, in which case this provision becomes null and void. Xx.
Xxxxxxxx shall provide the Company a summary of the life
insurance benefits coverage provided by such new employer. Said
payment to be made to Xx. Xxxxxxxx'x beneficiaries designated
herein as follows: to
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Xxxxxxxxxx Xxxxxxxx, his wife, as his primary beneficiary
("Beneficiary"), unless she should predecease him, in which case
to his then living descendents, per stirpes, as his contingent
beneficiaries, with the foregoing designation of beneficiaries
remaining subject to change upon written notice by Xx. Xxxxxxxx
to the Company;
(H) restricted stock. Eligibility, in accordance with the terms and
----------------
conditions of the applicable Committee on Compensation of the
Board of Directors Resolution, for the December 1998 retention
grant of 11,528 shares of restricted stock vesting in December
2001 and on a prorated basis through 28 February 2002, the
retention grant of 11,528 shares of stock vesting in December
2002, forfeiture of the remaining portion of the grant vesting in
December 2002 and all of the grant vesting in December 2003
unless the forfeiture is otherwise reversed by the Committee on
Compensation during the September 2001 meeting, in line with the
agreement between Xx. Xxxxxxxx and Mr. Xxxxxx Xxxx, Chief
Executive Officer of the Company, for review and consideration of
Xx. Xxxxxxxx'x request for waiver of the retention requirements
set forth by the Committee at the time of the grant, said
agreement being memorialized in the correspondence from Xxxxxx
Xxxx to Xx. Xxxxxxxx, a true and accurate copy of said
correspondence being attached to this Agreement and incorporated
herein by reference;
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(I) company equipment loan program. Eligibility for continued
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participation in the Xxxx Deere Executive Equipment Loan Program
through 31 August 2004, at which point the loaned equipment in
Xx. Xxxxxxxx'x possession will be returned to the Company, unless
Xx. Xxxxxxxx chooses to purchase the equipment under the same
terms as those offered other participants in the Program at the
time of their retirement, which is at a predetermined discount
based on the age of said equipment at the time of purchase.
Should Xx. Xxxxxxxx sell his Apple River Lake residence, where he
utilizes the loaned equipment, prior to 31 August 2004, such
equipment will be returned to the Company at that time, with the
same purchase provision;
(J) use of Company computer equipment. At the Company's sole
---------------------------------
election, through 28 February 2002, continued use of Company
computer equipment, currently in Xx. Xxxxxxxx'x possession, and
access to Company e-mail, at which time both access shall cease
and the aforementioned property shall be returned to the Company.
A listing of said Company equipment applying to this provision is
attached to this Agreement and incorporated herein by reference,
and;
(K) miscellaneous. The other items set forth in this Agreement; Mr.
-------------
Korndorf, his heirs, representatives, successors, and assigns
hereby fully and forever release and discharge the Company, its
subsidiary and affiliated companies, and their respective
officers,
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directors, employees, successors and assigns from any
and all demands, claims, charges, or suits, known or
unknown, which he, his heirs, representatives,
successors, or assigns have or may have against the
Company, its subsidiary or affiliated companies, their
respective officers, directors, employees, successors or
assigns relating in any manner whatsoever to Xx.
Xxxxxxxx'x employment or election to retire, regardless
of what the claims are based upon and whether such
claims arise or could arise under common law, contract,
tort, the labor laws or employment discrimination laws,
such as Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Age Discrimination
in Employment Act, the Illinois Civil Rights Act, ERISA,
or under any other statute, rule, ordinance, or
administrative regulation, whether of federal, state or
local origin.
This provision means that Xx. Xxxxxxxx, his heirs,
representatives, successors and assigns agree not to
file a claim, charge, or lawsuit against the Company,
its subsidiary or affiliated companies, or their
respective officers, directors, employees, successors,
or assigns as a result of his employment or election to
retire from employment with the Company.
2. The Company, its subsidiary and affiliated companies, and
their respective officers, directors, employees, successors
and assigns, hereby fully and forever release and discharge
Xx. Xxxxxxxx, his heirs, representatives, successors, and
assigns from any and all demands,
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claims, charges, or suits, known or unknown, which the
Company, its subsidiary and affiliated companies, and their
respective officers, directors, employees, successors and
assigns have or may have against Xx. Xxxxxxxx, his heirs,
representatives, successors and assigns relating in any
manner whatsoever to Xx. Xxxxxxxx'x employment or election
to retire, regardless of what the claims are based upon and
whether such claims arise or could arise under common law,
contract, tort, or under any other statute, rule, ordinance,
or administrative regulation, whether of federal, state or
local origin. The Company further agrees to indemnify Xx.
Xxxxxxxx in the future for any claim arising out of his
employment by the Company to the same extent that it would
have indemnified him during his employment.
3. Neither the Company nor Xx. Xxxxxxxx is prohibited from filing
a claim, charge, or lawsuit for rights or claims that arise or
occur after the date this document is signed by the parties,
including but not limited to, claims to enforce any of the
terms of this Agreement.
4. Nothing contained in this Agreement shall bar Xx. Xxxxxxxx
from pursuing any claim, charge or lawsuit relating to any
employee and/or retirement benefits of the Company referred to
in this Agreement or to which he is otherwise entitled,
including, but not limited to, claims arising under ERISA.
5. Xx. Xxxxxxxx agrees to return within eight (8) days of
signing this Agreement all of the following property now in
his possession and
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belonging to the Company: including Company Identification
and building access card, the Company-issued American
Express Corporate card, AT&T Corporate card, Company-issued
cell phone, executive garage door opener and Company
documents (other than communiques and benefit plan documents
provided to employees). Company property listed in the
section 1 (J) attachment shall be returned under the terms
of the language in that provision.
6. Xx. Xxxxxxxx agrees that he will not use or give to others,
any trade secrets or confidential information belonging to the
Company or others with whom the Company does business.
Examples of what may be considered as trade secrets or
confidential information are designs, processes, systems,
computer programs, writing, research and development
information, financial data and marketing strategies. This
provision is not intended and shall not be construed so as to
prevent Xx. Xxxxxxxx from seeking and obtaining gainful
employment so long as such employment does not violate the
Non-Competition Agreement executed by Xx. Xxxxxxxx
contemporaneous with this Agreement.
Xx. Xxxxxxxx, and his agents and representatives, agree not
to make or publish in any public medium any disparaging
allegations, remarks, or statements about the Company, its
subsidiary and/or affiliated companies, their respective
products or services, or their current or former officers,
directors, or employees. Likewise, the Company, its agents
and representatives, agree not to make or publish in any
public medium any
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disparaging allegations, remarks, or statements about Xx.
Xxxxxxxx. Neither party shall be prohibited from making truthful
statements when required by a court or other regulatory body of
competent jurisdiction. Reference statements made by the Company,
its agents or representatives to prospective employers of Xx.
Xxxxxxxx shall be consistent with Company policy regarding former
employees, which is restricted to confirming dates of employment,
last position and title held and in the case of retirees,
retirement.
8. For a period of two (2) years following the date of his
retirement, Xx. Xxxxxxxx, and his agents and representatives,
agree not to solicit, hire, or attempt to hire any employee of
the Company, its subsidiary or affiliated companies (hereinafter,
collectively, "employee(s) of the Company"), nor interfere with
or attempt to interfere with the employment relationship between
the Company and any employee(s) of the Company, nor cause any
employee(s) of the Company to quit, resign, or leave their
employment with the Company for any reason or purpose whatsoever,
except in those instances in which the application for employment
by or recruitment of employee(s) of the Company by an employer of
Xx. Xxxxxxxx'x shall be initiated without his involvement.
Nothing in this Agreement shall bar Xx. Xxxxxxxx from providing
personal references for employee(s) of the Company.
9. The parties agree that any violation of this Agreement by Xx.
Xxxxxxxx or by any agent or representative of his shall
constitute a material breach
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and will cause irreparable damage to the Company and that it
would be exceedingly difficult, if not impossible, to ascertain
with certainty the monetary damages the Company would suffer as a
result of such breach. Therefore, if a violation occurs, Xx.
Xxxxxxxx shall be liable for liquidated damages in the amount of
$10,000 for each such breach. The Company shall be entitled to
injunctive relief to restrain Xx. Xxxxxxxx or anyone acting on
his behalf from violating this Agreement.
10. In the event that it shall become necessary for either the
Company or Xx. Xxxxxxxx to pursue legal action to enforce the
terms of this Agreement or a dispute arises with respect to an
alleged breach or the interpretation of any of the terms of this
Agreement, the prevailing party in any such litigation shall be
entitled to recover from the non-prevailing party all costs of
the litigation, including the prevailing party's reasonable
attorney's fees incurred in prosecuting or defending the
litigation.
11. The parties agree that the terms of this Agreement shall remain
confidential and shall not be disclosed by either party without
the express written consent of the other party. This does not
prevent Xx. Xxxxxxxx, however from disclosing the terms and
conditions of the Agreement to his immediate family, legal
counsel, tax preparers, financial institutions (including, but
not limited, to lenders) or accountants; provided, however, that
such persons agree to be bound by the confidentiality provisions
of this Agreement. It shall not be a violation of this Agreement
for a party to reveal the terms of this Agreement if required to
do so by legal process,
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rule or regulation. Nor shall it be a violation of this Agreement
for a party to reveal the terms of this Agreement by order of any
court or government agency or instrumentality thereof or in an
action either to enforce the terms of this Agreement or to
recover damages for the breach or violation of a provision or
terms of this Agreement.
12. Xx. Xxxxxxxx acknowledges and agrees that he has read and fully
understands and appreciates the legal consequences of executing
this Agreement; that he was given a copy of this Agreement and
afforded a reasonable period of time to consider this Agreement
before signing it; that he has consulted with legal counsel of
his own choice, or at least has had ample opportunity to do so,
before signing this Agreement; and that the Company has suggested
that he consult such legal counsel before executing this
Agreement.
13. Xx. Xxxxxxxx understands that he may change his mind and may
revoke this Agreement for a period of eight (8) days following
the day he signs it. Revocation must be in writing and mailed,
hand-delivered or e-mailed to the Company to the attention of:
Xxxxxx Xxxxxx, Manager, Human Resources, Deere & Company, Xxx
Xxxx Xxxxx Xxxxx, Xxxxxx, XX 00000-0000. This Agreement may not
be enforced until after the revocation period has expired. Return
of Company property and required contact on Xx. Xxxxxxxx'x part
as noted in this agreement are also to be with Xxxxxx Xxxxxx and
her successors and assignees.
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14. Should Xx. Xxxxxxxx die before 31 August 2004, all benefits and
provisions provided to Xx. Xxxxxxxx in this Agreement shall
transfer to his designated Beneficiary herein, with the exception
of the prorated, short-term, Bonus payment as specified in
Section 1 (C), which shall be payable to his designated
Beneficiary through 31 January 2005. Xx. Xxxxxxxx agrees to
maintain all beneficiary designations under the applicable
benefit plans consistent with the current designated beneficiary
and/or any modified beneficiary designation (s) under this
agreement.
15. Provisions of the Equity Incentive Plan, Premium Priced Options,
the Savings and Investment Plan, Voluntary Deferred Compensation,
and other normal retirement benefits not specified within this
Agreement, are summarized in the Attachment to this Agreement,
which is incorporated herein by reference. Copies of the
foregoing plan and benefits documentation have been previously
provided to Xx. Xxxxxxxx for his review prior to execution of
this Agreement.
16. This Agreement, including the three (3) attachments hereto and
incorporated herein by reference ((1) the letter of agreement
from Xxxxxx Xxxx to Xx. Xxxxxxxx referenced in section 1(H),
above, (2) the list of Company equipment referenced in section
1(J), above, and (3) the summary of retirement benefits,
referenced in section 15, above) contains all of the terms and
conditions agreed upon, and supersedes all other agreements, oral
or otherwise, regarding the subject matters set forth in this
Agreement. If any part of this Agreement other than Section 1 is
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deemed invalid or unenforceable, if shall be considered severed
and deleted from this Agreement entirely without affecting any of
the other terms and conditions of this Agreement, which shall
remain in full force and effect as written. Section 1 shall at
all times be considered an essential provision of this Agreement
in all respects.
IN WITNESS WHEREOF, the parties have knowingly and voluntarily executed
this Agreement on the date so indicated.
DEERE & COMPANY
/s/ Xxxxxxxxx X. Xxxxxxxx
---------------------------- By /s/ Mertroe X. Xxxxxxxxxx
Xxxxxxxxx X. Xxxxxxxx -----------------------------------
Print Name Mertroe X. Xxxxxxxxxx
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Title Vice President, Human Resources
--------------------------------
Date August 10, 2001 Date August 10, 2001
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THE COMPANY SUGGESTS THAT YOU CONSULT WITH AN ATTORNEY OF YOUR OWN CHOICE BEFORE
SIGNING THIS EARLY RETIREMENT AGREEMENT AND RELEASE.
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Attachment to the Early Retirement Agreement
Xxxxxxxxx X. Xxxxxxxx
Based on your election to retire effective 28 February 2002 and defer
commencement of your pension benefit until age 55, 31 August 2004, the following
summary information pertaining to your retirement benefits is provided:
Pension Benefits
Your pension benefits have been calculated and are presented below. As
indicated, you are entitled to pension payments from three Plans. The Xxxx Deere
Pension Plan for Salaried Employees is a qualified plan with limitations on
benefits as required by the Internal Revenue Code. The Xxxx Deere Senior
Supplementary Pension Benefit Plan is an unfunded plan providing the "excess
benefits" limited in the qualified plan. The Xxxx Deere Supplemental Pension
Benefit Plan is another unfunded plan providing additional benefits based on
your years of service as an executive and on your incentive compensation. Full
surviving spouse coverage is provided under all three Plans. You may choose to
receive the Supplemental and/or Supplementary Pension Plan benefits in a lump
sum, in which case survivor coverage for Xxxxxxxxxx Xxxxxxxx would be limited to
your pension benefit from the qualified plan. The value of survivor benefits
provided under the Supplemental and Supplementary Pension Plans will be included
in the lump sum payment, assuming you choose the Reduced Level benefit option on
the date you elect to begin receiving retirement payments.
The following is an estimate of your monthly payments you will receive from the
Xxxx Deere Pension Plan for Salaried Employees; the Supplementary and
Supplemental benefit plans deferred to your age 55.
Qualified Plan Reduced for 55% Surviving Spouse benefits: $4,848.00
Supplementary Plan Reduced for 55% Surviving Spouse benefits: $6,759.46 or an
estimated Lump Sum present value of $1,187,327.34
Supplemental Plan Reduced for 55% Surviving Spouse benefits: $1,353.64 or an
estimated Lump Sum present value of $237,772.51
Payment of a Performance Bonus award in December 2001 and any prorated
Performance Bonus earned through February 2002 will be credited to your career
average earnings and may increase the payment from the Supplemental Plan shown
above. Additionally, any changes in IRS limitations and interest rates can
impact the lump sum values shown above.
Should you not wish to defer receipt of your pension until 31 August 2004, the
following benefits are payable beginning 1 March 2002:
Attachment to the Early Retirement Agreement
Xxxxxxxxx X. Xxxxxxxx
Page 2
Qualified Plan Reduced for 55% Surviving Spouse benefits: $4,012.00
Supplementary Plan Reduced for 55% Surviving Spouse benefits: $6,176.66 or an
estimated Lump Sum present value of $1,124,260.69
No Supplemental Plan benefits are payable since you do not meet the early
retirement eligibility requirement under the Contemporary Option. For this same
reason, Performance Bonus payments will not affect any pension benefit.
Medicare FICA Tax
Benefits payable from the Supplemental and Supplementary Pension Plans are
subject to 1.45% Medicare FICA Tax. The tax due on the Supplementary and
Supplemental Plan lump sum payments are due at retirement or when you elect to
receive payment, whichever is later, whether or not you choose to take the
payments in lump sum or as an annuity.
Equity Incentive Plan
Effective with your retirement, the grant made in 1998 will be reduced pro-rata
based on the time elapsed in the performance period and continue without
modification. The pro-rated grant will then vest or be forfeited at the end of
the performance period based on company performance in accordance with the terms
of the Plan, including bonus award eligibility. The number of shares is as
follows:
Grant Date Original Grant Reduced Grant
---------- -------------- -------------
1998 13,012 Shares 10,843 Shares
Premium Priced Options
Effective with your retirement, the grants made in 1997 and 1998 will continue
without modification. If the 50% premium is not achieved in the first five
years, the options will vest on 10 December 2002 and 9 December 2003,
respectively and expire three months later.
If the 50% premium is achieved in the first five years, the performance cycle
continues in retirement and the above options will become exercisable until
expiration five years
Attachment to the Early Retirement Agreement
Xxxxxxxxx X. Xxxxxxxx
Page 3
subsequent to your 28 February 2002 retirement, on 28 February 2007. Vested
shares have the shorter of five years or the remaining period to expiration at
retirement.
Stock Option Grant for Fiscal 2002
You will receive (a) the maximum grant of stock options equal to eight times
current annual base salary divided by the share price on the date of grant, or
(b) you may elect a payment equal to the Black-Scholes value of the same number
of stock options as in (a) above to be delivered in a lump sum cash payment on
15 January 2002. You must advise the Company of your choice of the lump sum cash
payment by 5 December 2001, or you will receive the stock options.
Restricted Stock
You will remain eligible, in accordance with the terms and conditions of the
applicable Committee on Compensation of the Board of Directors Resolution, for
the December 1998 retention grant of 11,528 restricted shares vesting in
December 2001, and on a prorated basis through 28 February 2002, for the
retention grant of 11,528 shares vesting in December 2002. As of your
retirement, forfeiture of the remaining portion of the grant vesting in December
2002 and all of the grant vesting in December 2003 will occur unless the
forfeiture is otherwise reversed by the Committee on Compensation during the
September 2001 meeting, in line with the agreement between Xx. Xxxxxxxx and Mr.
Xxxxxx Xxxx, Chief Executive Officer of the Company, for review and
consideration of Xx. Xxxxxxxx'x request for waiver of the retention requirements
set forth by the Committee at the time of the grant.
Voluntary Deferred Compensation
Compensation and Performance Bonus deferred under the Voluntary Deferred
Compensation program will be paid based on your irrevocable elections as a
result of your retirement.
Attachment to the Early Retirement Agreement
Xxxxxxxxx X. Xxxxxxxx
Page 4
Savings and Investment Plan
Contributions to your Savings and Investment Plan will terminate as of 28
February 2002. You may retain your account balance until such time as you elect
to take a distribution. You must begin taking a "minimum required distribution"
(MRD) no later than 30 April following the year in which you reach age 70-1/2.
You will be notified by Fidelity Investments when your MRD is due and the
necessary documents will be mailed to you. Information on other SIP distribution
options is available by calling the Xxxx Deere Savings Plan Service Center at
0-000-000-0000.
Stock Transactions When You Have Material Undisclosed Information
As a reminder, the Securities and Exchange Commission prohibitions against
purchasing or selling Deere stock (including shares acquired through benefit
plans) or advising or influencing others to do so when you are aware of material
undisclosed information continue to apply following your active employment and
retirement. Any current or former insider aware of information that would affect
a decision to buy or sell stock that is not generally available to the public
must abstain from trading until the information is disclosed. The prohibition
will continue until you are no longer aware of material undisclosed information
and it applies to all Deere stock owned or controlled by you, members of your
family living with you and by entities which you or a member of your immediate
family control.
