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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
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Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
DEERE & COMPANY
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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DEERE & COMPANY
One John Deere Place
Moline, Illinois 61265
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
February 24, 1999
The annual meeting of stockholders of Deere & Company will be held at the
principal office of the Company, at One John Deere Place, near Moline, Rock
Island County, Illinois, on Wednesday, February 24, 1999 at 10 a.m. to:
1. Elect directors.
2. Transact such other business as may properly come before the meeting.
Stockholders of record at the close of business on December 31, 1998 are
entitled to vote at the meeting.
To be sure that your shares are represented at the meeting, please vote, sign,
date and promptly mail the enclosed proxy card in the envelope provided for
this purpose.
For the Board of Directors,
[Signature Logo Appears Here]
Frank S. Cottrell
Secretary
Moline, Illinois
January 20, 1999
[John Deere Logo Appears Here]
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PROXY STATEMENT
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TO THE STOCKHOLDERS: The Board of Directors of Deere & Company solicits your
proxy, and asks that you vote, sign, date and promptly mail the enclosed proxy
card for use at the annual meeting of stockholders to be held February 24,
1999, and at any adjournment of such meeting. Whether you own few or many
shares, your proxy is important in helping to achieve good representation at
the meeting. Please note that if your shares are held through the Company's
Savings and Investment Plan or Tax Deferred Savings Plan For Hourly and
Incentive Paid Employees, your proxy instruction card must be received by
Fidelity Management Trust Company by February 17, 1999, or the shares
represented by the card will not be voted. If you wish, at any time before
your proxy is voted, you may revoke it by written notice to the Company, or by
delivery of a later dated proxy, or by voting in person at the meeting. The
shares represented by all properly executed proxies will be voted as specified
by you. In the absence of direction, properly executed proxies will be voted
for the nominees to the Board set forth below.
The holders of a majority of the Company's outstanding shares, present in
person or by proxy, are required for a quorum at the meeting. Abstentions and
broker non-votes are counted as present for purposes of determining the
presence or absence of a quorum for the transaction of business. The Company
had 231,713,158 shares of common stock outstanding on December 31, 1998. Each
share has one vote on each matter to be voted on at the meeting and one vote
for each directorship to be filled on the Board of Directors.
If any nominee is unable or declines to accept nomination or election for
any reason, the persons designated in your proxy may vote for a substitute.
A plurality of the votes cast at the meeting is required to elect directors.
Abstentions and broker non-votes will have no effect on the outcome of the
election of directors.
It is the policy of the Company that shareholders be provided privacy in
voting. All proxy cards and ballots that identify votes of stockholders are
held confidential, except: (i) as may be necessary to meet applicable legal
requirements; (ii) to allow independent third-parties to solicit, receive,
tabulate, and certify the results of the vote; (iii) in cases where
shareholders write comments on their proxy cards; and (iv) in contested proxy
solicitations in which the opposing party does not also agree to comply with
this policy. The tabulator of the votes and at least one of the inspectors of
the election are independent of the Company, its officers and directors. The
tabulator, the Company's proxy solicitation agent and the inspectors of the
election, including those who are Company employees, are required to comply
with the Company's confidentiality guidelines which prohibit disclosure of
votes to the Company.
Stockholders of record at the close of business on December 31, 1998 are
entitled to vote. This notice of meeting, proxy statement and proxy card are
being mailed to stockholders on or about January 20, 1999.
ELECTION OF DIRECTORS
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Three directors are to be elected for terms expiring at the annual meeting
in 2002. The persons named below were recommended by the Corporate Governance
Committee and nominated by the Board of Directors. The nominees' principal
occupations during the past five or more years, positions with the Company,
directorships in other companies, ages, and beneficial ownership of shares and
share units of the Company at December 31, 1998 appear in that order after
their names. As used below "restricted stock" refers to non-transferable
stock, issued pursuant to the Nonemployee
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Director Stock Ownership Plan, which is subject to risk of forfeiture if
certain conditions are not met. "Share units" represent director compensation
and earnings thereon deferred pursuant to the Nonemployee Director Deferred
Compensation Plan and valued as if invested in shares of the Company. No
nominee owned beneficially more than .1% of the shares outstanding on December
31, 1998.
NOMINEES FOR TERMS EXPIRING AT ANNUAL MEETING IN 2002
Mr. John R. Block President of Food Distributors International (formerly the
National-American Wholesale Grocers' Association) since 1986; prior thereto,
United States Secretary of Agriculture. Director of Deere & Company since
1986; Chair of Audit Review Committee and member of Executive and Pension Plan
Oversight Committees. Director of Archer-Daniels-Midland Company and Hormel
Foods Corporation. Age 63. Shares owned, 4,200 (includes 3,600 shares of
restricted stock). Share units owned 6,182.
Prof. Regina E. Herzlinger Nancy R. McPherson Professor of Business
Administration at the Harvard Business School since 1971. Director of Deere &
Company since 1993; member of Audit Review Committee. Director of Cardinal
Health, Inc., C. R. Bard, Inc., Schering-Plough Corporation and Total Renal
Care Holdings, Inc. Age 55. Shares owned, 3,600 (includes 3,600 shares of
restricted stock). Share units owned 5,157.
Dr. Arnold R. Weber President Emeritus of Northwestern University, Evanston,
Illinois since 1998; Chancellor 1995-1998; prior thereto, President. Director
of Deere & Company since 1994; member of Committee on Compensation, Special
Subcommittee of Committee on Compensation and Pension Plan Oversight
Committee. Director of Aon Corporation, Burlington Northern Santa Fe
Corporation, Inland Steel Industries, Inc., Pepsico, Inc. and Tribune Company.
Age 69. Shares owned, 3,300 (includes 2,700 shares of restricted stock). Share
units owned 668.
DIRECTORS CONTINUING IN OFFICE
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The eight persons named below are now serving as directors of the Company
for terms expiring at the annual meetings in 2000 and 2001 as indicated. Their
principal occupations during the past five or more years, positions with the
Company, directorships in other companies, ages and beneficial ownership of
shares, including restricted shares, share units, and of exercisable options
to purchase shares of the Company at December 31, 1998 appear in that order
after their names. As used below "restricted stock" refers to non-transferable
stock issued pursuant to the John Deere Equity Incentive Plan or the
Nonemployee Director Stock Ownership Plan, which is subject to risk of
forfeiture if certain conditions are not met. "Share units" represent director
compensation and earnings thereon deferred pursuant to the Nonemployee
Director Deferred Compensation Plan and valued as if invested in shares of the
Company. No director continuing in office owned beneficially more than .4% of
the shares outstanding on December 31, 1998.
TERMS EXPIRING AT ANNUAL MEETING IN 2000
Mr. Leonard A. Hadley Chairman and Chief Executive Officer of Maytag
Corporation (appliances) since 1992; prior thereto, President and Chief
Operating Officer. Director of Deere & Company since 1994; member of Audit
Review and Pension Plan Oversight Committees. Director of Maytag Corporation,
Norwest Bank Iowa, N.A. and Snap-on Incorporated. Age 64. Shares owned, 3,300
(includes 3,300 shares of restricted stock). Share units owned 7,756.
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Mr. Samuel C. Johnson Chairman of S. C. Johnson & Son, Inc. (home care and
specialty products) since 1988. Director of Deere & Company since 1973; member
of Committee on Compensation and Corporate Governance Committee. Director of
H.J. Heinz Company, Johnson Worldwide Associates, Inc. and Mobil Corporation.
Age 70. Shares owned, 61,800 (includes 4,200 shares of restricted stock).
Mr. Arthur L. Kelly Managing Partner of KEL Enterprises L.P. (holding and
investment partnership) since 1983. Director of Deere & Company since 1993;
Chair of Pension Plan Oversight Committee and member of Audit Review and
Executive Committees. Director of Bayerische Motoren Werke (BMW) A.G., Nalco
Chemical Company, The Northern Trust Corporation, Snap-on Incorporated and
Thyssen Industries A.G. Age 61. Shares owned, 10,089 (includes 3,999 shares of
restricted stock). Share units owned 2,216.
Mr. William A. Schreyer Chairman Emeritus of Merrill Lynch & Co., Inc.
(securities and investment banking) since 1993; prior thereto, Chairman of
Merrill Lynch & Co., Inc. Director of Deere & Company since 1994; Chair of
Corporate Governance Committee and member of Committee on Compensation,
Special Subcommittee of Committee on Compensation and Executive Committee.
Director of Callaway Golf Company, Iridium World Communications Ltd. and
Schering-Plough Corporation. Age 70. Shares owned, 6,600 (includes 3,600
shares of restricted stock). Share units owned 8,330.
TERMS EXPIRING AT ANNUAL MEETING IN 2001
Mr. Hans W. Becherer Chairman and Chief Executive Officer of Deere & Company
since 1990; prior thereto, President. Director of Deere & Company since 1986;
Chair of Executive Committee. Director of AlliedSignal Inc., The Chase
Manhattan Corporation and Schering-Plough Corporation. Age 63. Shares owned,
230,974 (includes 75,626 shares of restricted stock); and shares under
exercisable option, 542,787.
Mr. Antonio Madero B. Chairman, President and Chief Executive Officer of
SANLUIS Corporacion, S.A. de C.V. (automotive components manufacturing and
mining) since 1979. Director of Deere & Company since 1997; member of Audit
Review Committee and Pension Plan Oversight Committee. Director of Federal-
Mogul Corporation, a variety of corporations in Mexico and a member of the
International Advisory Council of The Chase Manhattan Corporation. Age 61.
Shares owned, 2,099 (includes 2,099 shares of restricted stock). Share units
owned 1,666.
Mr. John R. Stafford Chairman, President and Chief Executive Officer of
American Home Products Corporation (pharmaceuticals, consumer health care and
agricultural products) since 1986. Director of Deere & Company since 1997;
member of Committee on Compensation, Special Subcommittee of Committee on
Compensation and Corporate Governance Committee. Director of AlliedSignal
Inc., American Home Products Corporation, Bell Atlantic Corporation and The
Chase Manhattan Corporation. Age 61. Shares owned, 6,250 (includes 2,250
shares of restricted stock). Share units owned 1,064.
Mr. John R. Walter President and Chief Operating Officer of AT&T Corp.
(telecommunications) from November 1996 to July 1997; prior thereto, Chairman
and Chief Executive Officer of R. R. Donnelley & Sons Company (print and
digital information management, reproduction and distribution). Director of
Deere & Company since 1991; Chair of Committee on Compensation and member of
Special Subcommittee of Committee on Compensation, Corporate Governance and
Executive Committees. Director of Abbott Laboratories, Celestica Inc., LaSalle
Partners Incorporated and Prime Capital Corporation. Age 51. Shares owned,
5,700 (includes 4,800 shares of restricted stock).
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NAMED EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
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The four persons named below are executive officers named in the Summary
Compensation Table who are not directors of the Company. Their positions with
the Company during the past five or more years, ages and beneficial ownership
of shares, including restricted shares and of exercisable options to purchase
shares of the Company at December 31, 1998 appear in that order after their
names. As used below "restricted stock" refers to non-transferable stock,
issued pursuant to the John Deere Restricted Stock Plan or the John Deere
Equity Incentive Plan, which is subject to risk of forfeiture if certain
conditions are not met. No named executive officer owned beneficially more
than .2% of the shares outstanding on December 31, 1998.
Mr. Bernard L. Hardiek President, Worldwide Agricultural Equipment Division
since May 1995; Executive Vice President 1994-1995; prior thereto, Senior Vice
President. Age 58. Shares owned, 132,964 (includes 71,378 shares of restricted
stock and 33,372 shares over which Mr. Hardiek shares the power over voting
and disposition); and shares under exercisable option 261,700.
Mr. Pierre E. Leroy President, Worldwide Construction Equipment Division
since January 1996; Senior Vice President and Chief Financial Officer 1994-
1996; prior thereto, Vice President and Treasurer. Age 50. Shares owned,
105,868 (includes 67,626 shares of restricted stock); and shares under
exercisable option 197,100.
Mr. Fred F. Korndorf President, Worldwide Commercial and Consumer Equipment
Division and Deere Power Systems Group since January 1996; President,
Worldwide Industrial Equipment Division 1995-1996; prior thereto, Senior Vice
President. Age 49. Shares owned, 88,155 (includes 67,239 shares of restricted
stock); and shares under exercisable option 236,660.
Mr. Joseph W. England Senior Vice President since 1981. Age 58. Shares
owned, 70,011 (includes 21,999 shares of restricted stock and 5,412 shares
over which Mr. England shares the power over voting and disposition); and
shares under exercisable option 194,037.
At December 31, 1998, directors and executive officers as a group (20
persons), had a beneficial interest in an aggregate of 2,965,331 shares
(1.28%) of common stock of the Company. This total includes: 410,118 shares
held with sole power over voting and disposition; 66,112 shares held with
shared power over voting or disposition; 246,270 shares of restricted stock
under the John Deere Restricted Stock Plan; 249,262 shares of restricted stock
under the John Deere Equity Incentive Plan; 34,148 shares of restricted stock
under the Nonemployee Director Stock Ownership Plan; and 1,959,421 shares
represented by exercisable stock options.
PRINCIPAL HOLDERS OF VOTING SECURITIES
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Listed below are certain persons who, to the knowledge of the Company, own
beneficially more than five percent of the Company's Common Stock. This
information is based on information supplied by such persons in reports of
institutional investment managers filed with the Securities and Exchange
Commission.
As of September 30, 1998, The Capital Group Companies, Inc. and its
investment management company subsidiaries, which include a bank and several
registered investment advisers, 333 South Hope Street, Los Angeles, California
90071 ("Capital"), held 17,435,800 shares (or approximately 7.4%) of the
Company. Capital is not the ultimate owner of these shares, but holds them on
behalf of institutional investors. Capital disclaims beneficial ownership of
such shares and has no voting power with respect to such shares. Capital has
the sole power to dispose or direct the disposition of such shares.
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COMMITTEES
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The Board of Directors of the Company, which met five times during the 1998
fiscal year, has delegated some of its authority to six committees of the
Board. These are the Executive Committee, the Committee on Compensation, the
Special Subcommittee of the Committee on Compensation, the Corporate
Governance Committee, the Audit Review Committee and the Pension Plan
Oversight Committee. During the 1998 fiscal year, all of the directors, except
Mr. Madero, attended 75% or more of the meetings of the Board of Directors and
Committees on which they served.
The Committee on Compensation, which met four times during the 1998 fiscal
year, currently consists of John R. Walter (Chair), Samuel C. Johnson, William
A. Schreyer, John R. Stafford and Dr. Arnold R. Weber. The Committee has
responsibility with respect to compensation matters involving senior officers
of the Company.
The Special Subcommittee of the Committee on Compensation, which met four
times during the 1998 fiscal year, currently consists of William A. Schreyer,
John R. Stafford, John R. Walter and Dr. Arnold R. Weber. The Subcommittee was
established to assure continued compliance with regulations regarding
executive compensation approval and consists of directors who are independent
of the Company. The Subcommittee has responsibility for reviewing and
approving compensation plans, grants, and awards involving officers of the
Company. The Subcommittee also may consider such other matters as are referred
to it by the Committee on Compensation.
The Corporate Governance Committee, which met twice during the 1998 fiscal
year, currently consists of William A. Schreyer (Chair), Samuel C. Johnson,
John R. Stafford and John R. Walter. The responsibilities of the Corporate
Governance Committee are to recommend and monitor policies and procedures
relating to corporate governance, to recommend to the Board individuals for
nomination or election to the Board, to ensure that the Chair periodically
reviews the Company's plans regarding succession of senior management with the
Committee and with all other independent directors, and to make
recommendations concerning the size, composition, committee structure and fees
for the Board and criteria relating to tenure and retention of directors. The
Committee will consider individuals recommended for nomination by stockholders
in accordance with the procedures described under "Stockholder Proposals And
Nominations."
The Pension Plan Oversight Committee, which met twice during the 1998 fiscal
year, currently consists of Arthur L. Kelly (Chair), John R. Block, Leonard A.
Hadley, Antonio Madero B. and Dr. Arnold R. Weber. The Committee reviews asset
allocation, funding policies, and the performance of trustees, investment
managers and actuaries, for the Company's pension and retirement plans. The
Committee also has authority to make substantive amendments and modifications
to the pension and retirement plans. The Committee reports to the Board on its
activities.
The Audit Review Committee, which met twice during the 1998 fiscal year,
currently consists of John R. Block (Chair), Leonard A. Hadley, Regina E.
Herzlinger, Arthur L. Kelly and Antonio Madero B. The Committee recommends to
the Board a firm of independent certified public accountants to audit the
annual financial statements, approves in advance the scope of the audit,
reviews with the independent auditors the financial statements and their audit
report, consults with the internal audit staff and reviews management's
administration of the system of internal accounting controls, and reviews the
Company's procedures relating to business ethics. The Committee reports to the
Board on its activities and findings.
In accordance with the recommendation of the Audit Review Committee, the
firm of Deloitte & Touche llp has been appointed by the Board of Directors as
independent certified public accountants to examine the financial statements
of the Company for the 1999 fiscal year. A representative of Deloitte & Touche
llp is expected to be present at the stockholders' meeting; this individual
will have an opportunity to make a statement and will be available to respond
to appropriate questions.
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COMPENSATION OF DIRECTORS
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Directors who are not employees of the Company receive a single annual
retainer of $60,000 for serving as directors. There are no additional
committee retainers or meeting fees. Directors may elect to defer a part or
all of their annual retainers pursuant to the Company's Nonemployee Director
Deferred Compensation Plan. Deferrals are invested in an interest-bearing
account or in a Company stock equivalent investment alternative at the
election of the director.
At the 1993 annual meeting, stockholders approved the adoption of the
Nonemployee Director Stock Ownership Plan. Pursuant to such plan, upon
election and each re-election to the Board, non-employee directors are awarded
1,800 restricted shares of common stock of the Company for each three-year
term. A person who becomes a non-employee director between annual meetings or
who serves a partial term will receive a prorated grant. The restricted shares
may not be sold, pledged, assigned, gifted, or otherwise alienated or
hypothecated and are subject to forfeiture until the expiration of the
restriction period, which ends upon the nonemployee directors' retirement from
the Board, permanent and total disability, death or a change in control of the
Company. While the restrictions are in effect, the nonemployee directors are
entitled to vote the shares and receive dividends.
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The report of the Committee on Compensation and the performance graph that
follow shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporates the information by
reference, and shall not otherwise be deemed filed under such Acts.
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COMMITTEE ON COMPENSATION
REPORT ON EXECUTIVE COMPENSATION
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Compensation Philosophy
The Committee on Compensation of the Board (the "Committee") is committed to
providing a total compensation program that supports the Company's business
strategy and culture, and creates a commonality of interest with the Company's
shareholders. The Committee is responsible for the oversight of executive
compensation and reviews the Company's compensation program on an ongoing
basis. No member of the Committee is a former or current officer of the
Company or any of its subsidiaries.
The overall philosophy of the Committee regarding executive compensation can
be summarized as follows:
. Provide a target total reward opportunity that is sufficiently
competitive to attract and retain high caliber executives. In general,
this involves a target total pay structure that is between the median
and 75th percentile of pay levels available at a comparable group of
large, diversified companies;
. Link a meaningful portion of the total compensation opportunity to
performance-based incentives consistent with the creation of shareholder
value and the Company's long-term strategic goals;
. Provide for meaningful risk as well as reward in order to penalize
substandard performance while encouraging superior performance and
recognizing the cyclical nature of the Company's core businesses; and
. Structure the program to be positively regarded by the Company's
shareholders, employees, the financial community and the public in
general, as well as by the eligible executive management.
The Revenue Reconciliation Act of 1993 placed certain limits on the tax
deductibility of non-performance-based executive compensation. The Committee
intends that, to the extent practicable, executive compensation be deductible
for federal income tax purposes provided doing so would be consistent with the
other compensation objectives. One of the requirements for tax deductibility
is shareholder approval. For this reason, at the 1995 annual meeting
shareholders approved the John Deere Performance Bonus Plan (the "Bonus Plan")
and the John Deere Equity Incentive Plan (the "Equity Incentive Plan") and at
the 1996 annual meeting shareholders approved amendments to the 1991 John
Deere Stock Option Plan (the "Option Plan") and the John Deere Restricted
Stock Plan (the "Restricted Stock Plan"). Each of these plans was designed to
meet the compensation objectives and, in the case of the Bonus Plan, Equity
Incentive Plan and Option Plan, to comply with the requirements for tax
deductibility.
The specific practices surrounding each component of the Company's executive
compensation program are described in the following paragraphs.
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Base Salary
It is the Committee's policy to position the base salaries of the Company's
executives at approximately the median level of base salaries provided to
comparable positions within a peer group of companies which share some
combination of the following characteristics with the Company: comparable
sales volumes; similar products and services; a similar commitment to
manufacturing as a core activity; and a comparable global presence. Currently,
this peer group consists of 32 companies, three of which are also included
among the ten companies that comprise the S&P Diversified Machinery Group
Index used in the performance graph following this report. It is the
Committee's view that this larger peer group provides a more appropriate and
reliable benchmark for assessing competitive levels of compensation than the
limited number of companies within the S&P Diversified Machinery Group Index.
The Committee annually reviews the base salary of each executive officer of
the Company, including Mr. Becherer, the Chief Executive Officer (CEO). In
determining salary adjustments for the Company's executives (including Mr.
Becherer and the other executive officers named in the Summary Compensation
Table), the Committee takes into consideration various factors, including
individual performance; the financial and operational performance of the
activities directed by the executive (including profitability under prevailing
business conditions, performance against budget, customer satisfaction, and
innovation); experience; time in position; future potential; responsibility;
and the executive's current salary in relation to the executive's salary range
and the median salary practices of the peer group. These factors are
considered subjectively in the aggregate and none of the factors is accorded a
specific weight. In selected cases, other factors may also be considered. Peer
group salary data for comparable-level positions are provided annually to the
Committee by an outside compensation consultant.
For fiscal 1998, the base salaries of Mr. Becherer and the other executive
officers named in the Summary Compensation Table were essentially equal to the
peer group median and generally consistent with the base salary philosophy
established by the Committee. Mr. Becherer received a base salary of $921,558
for fiscal 1997 and $1,042,313 for fiscal 1998.
Short-Term Incentives
A substantial portion of the Company's executive compensation package is
contingent upon the Company attaining preestablished financial goals under the
Bonus Plan. Each year in which these goals are achieved, the compensation of
all salaried employees (including Mr. Becherer and the other executive
officers named in the Summary Compensation Table) is supplemented by fiscal
year-end payments under the Bonus Plan. The amount of these payments (if any)
depends upon the Company's pre-bonus and pre-extraordinary item return on
average assets for the year and the position and salary of the employee. In
addition, the Committee can decrease or eliminate awards to designated senior
officers of the Company, and can increase or decrease awards to other salaried
employees.
When added to base salary, target awards under the Bonus Plan for the
Company's executives are structured to provide median annual cash compensation
relative to the peer group companies. The target award for the CEO is 75% of
base salary. The maximum annual performance bonus for executive officers under
the Bonus Plan is available when the return on assets is 11.5% or more; no
bonus payment is available when the return on assets is below 5%. For 1998,
the Company's return on average assets calculated in accordance with the Bonus
Plan was 13.14%. Accordingly, for 1998, Mr. Becherer received a maximum annual
performance bonus payment of $1,487,511, or approximately 150% of his base
salary.
In addition to the above performance Bonus Plan payments, the CEO is
authorized to grant discretionary bonuses to selected employees in recognition
of outstanding achievement. Such bonuses may not exceed 20% of annual base
salary except in highly unusual circumstances. No such discretionary bonuses
were granted in fiscal 1998.
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Long-Term Incentives
The Company's long-term incentives for executive officers currently are
comprised of annual grants of market-priced and premium-priced stock options
under the Option Plan and biennial grants of equity incentive restricted
shares under the Equity Incentive Plan. Grants under these plans are intended
to promote the creation of sustained shareholder value, encourage ownership of
Company stock, foster teamwork and retain high caliber executives.
Under the Equity Incentive Plan, approved by shareholders in 1995,
executives receive periodic grants of Company stock subject to vesting and
forfeiture provisions based on Company achievement of long-term performance
goals established by the Committee. It is the Committee's view that the
addition of performance features to the executive stock grants in the Equity
Incentive Plan will serve to promote greater focus on actions that enhance
shareholder value.
Under each plan, grants to executives are based on criteria established by
the Committee, including responsibility level, base salary, current market
practice and the market price of the Company's stock at the time of grant.
Grant guidelines for market-priced options and equity incentive shares are
established for all participants (including Mr. Becherer) with the objective
of providing a target total compensation opportunity, including base salary
and the target annual profit sharing bonus, equal to the median of the peer
group. Depending on stock price performance and Company performance, actual
total compensation for any given year could be at, above or below the median
of the peer group. The number of options or restricted shares previously
granted to or held by an executive is not a factor in determining individual
grants.
The Committee made the initial award of equity incentive shares to executive
officers early in fiscal 1995. Vesting of these shares was conditioned on the
Company satisfying performance goals based on revenue growth and return on
assets over the four fiscal years commencing November 1, 1994 and any
additional performance periods established by the Committee. For the four
years ending October 31, 1998, the Company's revenue growth relative to other
New York Stock Exchange listed companies and the annual average return on
assets resulted in an award equal to 176.6% of the target award. Accordingly,
in December 1998 the equity incentive shares awarded in fiscal 1995 vested and
the Committee awarded bonus equity incentive shares to executive officers
equal to 76.6% of their initial grants. Executives who have satisfied their
stock ownership guideline could elect to take such bonus in cash. Mr. Becherer
received the equivalent of 40,996 bonus equity incentive shares. No additional
target equity incentive shares were awarded during fiscal 1998 to the current
executive officers.
In fiscal 1995, to further sharpen the focus on strengthening the
commonality of interest between senior management and the Company
shareholders, the "core" compensation program for the Company's senior
officers was supplemented with grants by the Committee of premium-priced stock
options with exercise prices in excess of the market price of the Company's
stock on the date of grant. Grants of premium-priced options are structured to
provide a target total compensation opportunity for participants approximately
equal to the 60th to 70th percentile of the peer group when added to the
median peer group level of the other components of compensation. It is the
Committee's view that this above-market positioning is justified by the nature
of the premium-priced grants under which no value is generated unless the
stock appreciates meaningfully above its price on the date of grant. Moreover,
exercise of the premium-priced options granted in fiscal 1995 prior to an
extended future date depends on the Company's achievement of a sustained
median total shareholder return exceeding the median of companies traded on
the New York Stock Exchange. The Committee certified that the performance
objective had been satisfied and these premium-priced options became
exercisable in December 1998. At the time of the 1995 grant, it was
anticipated that there would be no additional grants of premium-priced options
prior to fiscal 1998.
9
<PAGE>
During fiscal 1998, grants of stock options to senior officers were
comprised of approximately one-fourth market-priced stock options and three-
fourths premium-priced stock options. The market-priced stock options are not
exercisable until one year after grant and have a ten-year term. The premium
exercise price was set at 150% of the 90 day average price for the Company's
shares prior to the grant. The premium-priced options have a ten year term and
their exercise prior to an extended future date depends on the Company's
shares achieving a market price equal to or greater than the premium exercise
price for ten consecutive trading days within five years from grant. If any of
the premium-priced options granted in fiscal 1998 are not exercisable within
five years of the grant, such options become exercisable for three months,
then they terminate. During fiscal 1998, Mr. Becherer was awarded 47,787
market-priced options and 143,362 premium-priced options.
In order to continue to achieve the grant guidelines for market-priced
options, during fiscal 1999 grants of stock options to senior officers were
comprised of approximately one-half market-priced stock options and one-half
premium-priced stock options. In anticipation of his retirement in
approximately 2000, Mr. Becherer received in fiscal 1999 a final front-loaded
grant of market-priced options and premium-priced options. It is anticipated
that there will be no additional grants of options or salary increases to Mr.
Becherer. The terms of the option grants in fiscal 1999 are similar to terms
described above for those granted during fiscal 1998.
In addition to the long-term incentives for executive officers described
above, the Committee has approved a one-time grant in December 1998 of 46,111
shares of restricted stock under the Restricted Stock Plan to each of the five
senior operating officers of the Company other than Mr. Becherer. The grant is
intended as a combination retention plan and communication of the importance
to the Company of their continued service to ensure a smooth transition in
Company leadership. The restricted shares vest in four equal annual increments
beginning in December 2000 and are subject to possible forfeiture in the event
of termination or resignation from the Company prior to vesting.
Finally, during fiscal 1998, the Committee introduced revised stock
ownership guidelines for members of the Company's senior management team to
encourage the retention of stock acquired through the Company's various equity
incentive plans. These guidelines are based on a multiple of each officer's
base salary.
CEO Compensation
Mr. Becherer has been Chairman and CEO of the Company since May 1990. Mr.
Becherer's base salary, annual performance bonus and option and equity
incentive stock grants have been targeted to provide total compensation,
assuming achievement of targeted levels of Company performance, approximately
equal to the 65th percentile of CEO compensation of the peer group companies.
In fiscal 1998, Mr. Becherer's compensation exceeded this level due to the
continued record financial performance of the Company. As explained above, the
fiscal 1998 profit sharing payments and equity incentive awards were based
exclusively on return on assets, relative revenue growth, and payout levels
established by the Committee at the beginning of the performance periods, as
determined by actual results. It is the Committee's view that this
relationship between pay and performance is appropriate and serves
shareholders' interests.
Committee on Compensation
John R. Walter (Chair)
Samuel C. Johnson
William A. Schreyer
John R. Stafford
Dr. Arnold R. Weber
10
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNAMONG DEERE & COMPANY, THE S&P
500 INDEXAND THE S&P DIVERSIFIED MACHINERY GROUP INDEX
- --------------------------------------------------------------------------------
The following performance graph compares cumulative total return for Company
stockholders over the past five fiscal years against the cumulative total
return of the Standard & Poor's 500 Stock Index, and against the Standard &
Poor's Diversified Machinery Group Index. The graph assumes $100 is invested in
Company stock and each of the other two indices at the closing market quotation
on October 31, 1993 and that dividends are reinvested. The stock price
performance shown on the graph is not necessarily indicative of future price
performance.
[DEERE PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Deere & Co. 100.00 95.35 122.47 175.86 225.53 155.00
- -----------------------------------------------------------------------------------------
S&P Mach. 100.00 104.07 109.96 139.56 192.71 159.40
- -----------------------------------------------------------------------------------------
S&P 500 100.00 103.87 131.33 162.98 215.32 262.67
</TABLE>
[PERFORMANCE GRAPH LEGEND APPEARS HERE]
11
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
- -------------------------------------------------------------------------------
The following table shows the remuneration from the Company and its
subsidiaries during the past three fiscal years to the Company's Chief
Executive Officer (the "CEO") and each of the four most highly compensated
executive officers of the Company other than the CEO:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------- -------------------------------------
Awards Payouts
-------------------------- ----------
Restricted Securities
Stock Underlying LTIP All Other
Name and Fiscal Salary(1) Bonus(2) Awards(3) Options/SARs(4) Payouts(5) Compensation(6)
Principal Position Year ($) ($) ($) (#) ($) ($)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Hans W. Becherer, 1998 $1,042,313 $1,487,511 $ 0 191,149 $1,333,600 $71,352
Chairman & Chief 1997 $ 921,558 $1,342,500 $1,254,388 75,000 $ 0 $42,637
Executive Officer 1996 $ 864,091 $1,255,001 $ 0 56,255 $ 0 $14,628
Bernard L. Hardiek, 1998 $ 449,822 $ 477,184 $ 0 66,726 $ 424,289 $18,838
President, Worldwide 1997 $ 416,583 $ 429,878 $ 409,912 20,000 $ 0 $11,083
Agricultural Division 1996 $ 376,164 $ 399,880 $ 0 20,100 $ 0 $ 9,457
Pierre E. Leroy, 1998 $ 393,341 $ 403,604 $ 0 54,792 $ 368,955 $34,234
President, Worldwide 1997 $ 355,300 $ 348,381 $ 361,378 19,000 $ 0 $18,667
Construction Division 1996 $ 325,690 $ 328,950 $ 0 20,100 $ 0 $11,857
Fred F. Korndorf, 1998 $ 388,231 $ 402,272 $ 0 53,792 $ 318,143 $42,197
President, Worldwide 1997 $ 352,335 $ 338,436 $ 344,930 19,000 $ 0 $30,919
Commercial and 1996 $ 307,709 $ 310,850 $ 0 20,100 $ 0 $20,740
Consumer Division
Joseph W. England, 1998 $ 386,882 $ 401,944 $ 0 51,397 $ 444,783 $25,410
Senior Vice President 1997 $ 373,812 $ 370,260 $ 397,502 18,000 $ 0 $18,637
1996 $ 363,373 $ 363,495 $ 0 20,688 $ 0 $13,901
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Amounts shown include cash and non-cash compensation earned and received
by the executive officer as well as amounts earned but deferred at the
election of the officer.
(2) Each year in which earnings goals are reached, the compensation of
salaried employees is supplemented by fiscal year-end cash bonus payments. The
amount of the bonus (if any) depends upon the pre-bonus and pre-extraordinary
item return on average assets for the year, the position and salary of the
employee and any other performance goals established by the employee's
division.
(3) The 1997 amounts reported in the table represent grants under the John
Deere Equity Incentive Plan approved by shareholders at the 1995 annual
meeting. The vesting of such shares is conditioned on satisfying performance
goals based on growth of the Company's revenues and return on the Company's
assets over the performance periods established by the Committee. No
restricted stock awards were made to the named executive officers during
fiscal 1996 or fiscal 1998. The amounts in the table represent the closing
market value of the shares granted on the date of grant, without giving effect
to the diminution in value attributable to the restrictions and performance
conditions on such stock. Dividends are paid on the restricted shares at the
same time and rate as dividends paid to shareholders of unrestricted shares.
At October 31, 1998, the total number and market value (based on the closing
market price on October 30, 1998) of shares of restricted stock, including the
Equity Incentive shares reported above, held by each of the named executive
officers were as follows: Mr. Becherer (83,035; $2,958,122); Mr. Hardiek
(26,673; $950,226); Mr. Leroy (23,311; $830,454); Mr. Korndorf (20,884;
$743,992); and Mr. England (27,203; $969,107).
12
<PAGE>
(4) The amounts for 1998 represent the total of market-priced options and
premium-priced options granted in December 1997. Additional details on the
fiscal 1998 grant are included in the "Option/SAR Grants In Last Fiscal Year"
table that follows. The amounts for 1997 and 1996 represent market-priced
options granted in December 1996 and December 1995 respectively.
(5) The payouts for 1998 represent the award of bonus shares under the John
Deere Equity Incentive Plan approved by shareholders at the 1995 annual
meeting. Under the Equity Incentive Plan, if the Company exceeds the
performance goals established by the Committee at the beginning of a
performance period, participants may receive bonus stock awards based on the
percentage over the performance target achieved by the Company for the
performance period. For the four year performance period ending October 31,
1998 pertaining to the equity incentive share grant in fiscal 1995, the
Company's revenue growth and return on assets resulted in an award equal to
176.6% of the target award. Based on such performance, the equity incentive
shares reported in fiscal 1995 vested and the committee awarded in December
1998 bonus equity incentive shares equal to 76.6% of the initial target grant.
The amounts in the table represent the average of the high and low market
values of the bonus shares on the date of grant.
(6) Amounts shown for 1998 consist of: (i) vested Company contributions to the
Company 401(k) Savings and Investment Plan during the fiscal year for each of
the named executive officers of $10,000; and (ii) above-market earnings on
deferred compensation for Mr. Becherer $61,352, Mr. Hardiek $8,838, Mr. Leroy
$24,234, Mr. Korndorf $32,917 and Mr. England $15,410. The contribution to the
Company's 401(k) Savings and Investment Plan for all employees during the past
fiscal year was $43,368,658.
The following table shows information concerning individual grants of stock
options made during fiscal 1998 to each of the named executive officers of the
Company and the potential realizable values of the grants assuming annually
compounded stock price appreciation rates of five and ten percent per annum
respectively, over the option term. The five and ten percent rates of
appreciation are set by the rules of the Securities and Exchange Commission
and are not intended to forecast possible future appreciation, if any, of the
Company's stock price.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation For
Individual Grants Option Term(6)
---------------------------------------------- -----------------------------
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration 5% 10%
Name Granted(1)(#) Fiscal Year ($/Sh) Date(4) ($) ($)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hans W. Becherer........ 47,787(2) 2.18% $56.50 12/10/07 $ 1,697,994 $ 4,303,050
143,362(3) 6.53% $82.19 (5) $ 1,411,047 $ 9,226,269
Bernard L. Hardiek...... 20,000(2) 0.91% $56.50 12/10/07 $ 710,651 $ 1,800,929
46,726(3) 2.13% $82.19 (5) $ 459,903 $ 3,007,119
Pierre E. Leroy......... 15,500(2) 0.71% $56.50 12/10/07 $ 550,754 $ 1,395,720
39,292(3) 1.79% $82.19 (5) $ 386,733 $ 2,528,694
Fred F. Korndorf........ 14,500(2) 0.66% $56.50 12/10/07 $ 515,222 $ 1,305,674
39,292(3) 1.79% $82.19 (5) $ 386,733 $ 2,528,694
Joseph W. England....... 12,849(2) 0.58% $56.50 12/10/07 $ 456,558 $ 1,157,007
38,548(3) 1.75% $82.19 (5) $ 379,410 $ 2,480,812
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Subject to plan restrictions, the exercise price and tax withholding
obligations related to exercises of options granted in the period may be paid
by delivery of already owned shares or by offset of the underlying shares. No
stock appreciation rights (SARs) were granted during the fiscal year.
13
<PAGE>
(2) The market-priced options are exercisable between one and ten years after
the date of grant.
(3) In December 1997, senior executive officers were granted options with an
exercise price set at 150% of the prior 90 day average closing price for the
Company's shares. The options become exercisable when the price of the
Company's shares on the New York Stock Exchange equals or exceeds the premium
exercise price during each of ten consecutive trading days prior to December
10, 2002. If the price target is not achieved, the options become exercisable
on December 10, 2002.
(4) The options expire if employment by the Company of the option holder
terminates during the term of the option for any reason other than for death,
disability, or retirement pursuant to disability or retirement plans of the
Company.
(5) If the price target described in footnote (3) above is achieved, the
options expire on December 10, 2007. If the price target is not achieved, the
options expire on March 10, 2003.
(6) The total potential realizable value for all shareholders as a group based
on 232,310,026 outstanding shares as of October 31, 1998 would be
$8,254,566,781 and $20,918,692,907 at the 5% and 10% assumed annual rate of
appreciation, respectively. Mr. Becherer's total potential realizable value is
0.04% and 0.06% of the potential realizable value of all shareholders at the
5% and 10% assumed annual rates of appreciation, respectively. The total
potential realizable value of all the named executives to that of all
shareholders is 0.08% and 0.14% at the 5% and 10% assumed annual rates of
appreciation, respectively.
The following table shows information for the named executives concerning
exercises of options and SARs during fiscal 1998 and the number and value of
unexercised options (and tandem SARs) held at October 31, 1998:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
underlying Unexercised Value of Unexercised In-the-
Options/SARs at Money Options/SARs at Fiscal
Shares Fiscal Year-End(1) (#) Year-End(2) ($)
Acquired on Value ------------------------- -----------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hans W. Becherer........ 0 $ 0 75,000 611,149 $ 0 $ 1,845,900
Bernard L. Hardiek...... 0 $ 0 76,700 231,726 $ 564,592 $ 725,175
Pierre E. Leroy......... 0 $ 0 39,100 197,292 $ 30,050 $ 626,288
Fred F. Korndorf........ 0 $ 0 79,660 196,292 $ 597,130 $ 626,288
Joseph W. England....... 0 $ 0 38,688 193,897 $ 30,929 $ 626,288
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Market-priced options and SARs awarded by the Company are not exercisable
until one year after grant and have a ten-year term. Premium-priced options
granted in December 1994 may not be exercised until four or more years after
the date of grant depending on the Company's total shareholder return from the
date of grant relative to that of the group composed of New York Stock
Exchange listed companies. The Committee certified in December 1998 that such
conditions had been met and such options then became exercisable. Premium-
priced options granted in December 1997 may not be exercised until one year or
more after the date of grant depending on if the price of the Company's shares
on the New York Stock Exchange equals or exceeds the premium exercise price
during each of ten consecutive trading days prior to December 10, 2002. If
such price target is achieved, the options expire on December 10, 2007. If the
price target is not achieved, the options become exercisable on December 10,
2002 and expire on March 10, 2003.
(2) Represents the difference between the option exercise price and the
closing market price for the Company's stock on October 31, 1998. The in-the-
money options at October 31, 1998 pertain to the
14
<PAGE>
market-priced option grants in December of 1993, 1994, and 1995 with exercise
prices of $23.56, $21.02 and $34.13, respectively and the premium-priced
option grant in December of 1994 with exercise prices of $28.39, $31.23 and
$34.07. The closing market price for the Company's stock at the end of the
1998 fiscal year was $35.625.
PENSION BENEFITS
Under the Company's pension program, employees in executive salary grades
("executives") are entitled to receive an annual pension determined by adding
the amount obtained by multiplying 1.5% times the employee's number of years
of non-executive service times average pensionable pay to the amount obtained
by multiplying 2.0% times the number of years served as an executive times
average pensionable pay, with a maximum annual pension of 66 2/3% of average
pensionable pay. Average pensionable pay for employees participating in the
executive program prior to 1997 is based on one of the following two options,
as elected by the executive: (1) the executive's compensation for the five
highest years, not necessarily consecutive, during the 10 years immediately
prior to the date of retirement where compensation is calculated by adding the
executive's salary to the larger of (a) the sum of short-term bonuses, or (b)
any payments under the Company's long-term incentive plan or awards under the
restricted stock plan; or (2) the executive's compensation over his entire
career with the Company where compensation is calculated by adding the
executive's salary to any short-term bonuses. In addition, for salaried
employees hired prior to 1997, career average compensation under the executive
pension program generally will include the average of compensation from the
five anniversary years prior to 1997 plus all future compensation until
retirement with bonuses paid in 1992 through 1996 phased into the computation
over five years. Effective January 1, 1997, for new participants in the
executive program, average pensionable pay is based exclusively on the career
average compensation formula described above. All amounts used in calculating
average pensionable pay are determined before giving effect to any salary or
bonus deferral under any plan sponsored by the Company.
Salaried employees not entitled to the executive pension receive annual
pension benefits determined by multiplying 1.5% times the employee's number of
years of service times average pensionable pay. Average pensionable pay for
employees hired prior to 1997 is based on one of the following two options, as
elected by the employee: (1) the employee's salary for the five highest years
during the 10 years immediately prior to the date of retirement; or (2) the
employee's compensation over his entire career with the Company where
compensation is calculated by adding the employee's salary to any bonus
awarded under the Company's performance bonus plan. In addition, for employees
hired prior to 1997, career average compensation generally will include the
average of compensation from the five anniversary years prior to 1997 plus all
future compensation until retirement with bonuses paid in 1992 through 1996
phased into the computation over five years. Effective January 1, 1997,
average pensionable pay for new salaried employees not entitled to the
executive pension is based exclusively on career average salary and
performance bonuses. For salaried employees participating in the career
average earning option, enhanced Company contributions to the employee's
401(k) retirement savings account will be made and, depending on the
employee's years of service as of January 1, 1997, the minimum age to
retirement with full benefits may be increased.
The estimated annual pensions payable upon retirement at normal retirement
age for each of the named executive officers of the Company is: Mr. Becherer,
$1,294,824; Mr. Hardiek, $371,542; Mr. Leroy $395,085; Mr. Korndorf, $395,085;
and Mr. England, $443,687. The estimated annual pensions shown are on a
straight-life annuity basis and have been computed assuming (i) that the
Company's pension plans are continued without further amendment; (ii) that
each of the named officers continues as an executive of the Company until
retirement at age 65; (iii) that salaries continue at 1998 levels; and (iv)
that bonuses are paid at target earnings goals. Pension benefits are not
subject to deductions for social security benefits or other offset amounts.
15
<PAGE>
CHANGE IN CONTROL ARRANGEMENTS
The Company's Bonus Plan provides that employees as of the date of a change
in control will be entitled to the greater of a bonus based on actual
performance results to such date or their target bonus. The Equity Incentive
Plan and Restricted Stock Plan provide that in the event of a change in
control, unless otherwise determined by the Board, the value of restricted
shares will be cashed out in an amount determined under the plans. The
Supplemental Pension Benefit Plan provides that, in the event of a change in
control, participants who cease being Company employees will be eligible for
benefits under such plan notwithstanding their age at termination of
employment. In the event of certain changes in control, amounts deferred under
the Company's Deferred Compensation Plan may become payable immediately or
such plan may be modified to reflect the impact of the change in control.
OTHER MATTERS
- -------------------------------------------------------------------------------
After the deadline for inclusion of stockholder proposals in the Company's
proxy statement established by Rule 14a-8 ("Rule 14a-8") under the Securities
Exchange Act of 1934, Mr. Melroy Buhr submitted a proposal that the Company
establish an ombudsman's office in addition to the Company's current after-
market service staff to resolve customer complaints. Mr. Andrew Grober
submitted a nomination of Mr. Melroy Buhr for election to the Board of
Directors. If properly brought before the meeting, the persons named in the
proxy will vote against the proposal and against the nomination.
The Board of Directors is not aware of any other matters that will come
before the meeting. However, if any other proper business should come before
the meeting, your proxy, if signed and returned will give to the persons
designated in it discretionary authority to vote according to their best
judgement.
STOCKHOLDER PROPOSALS AND NOMINATIONS
- -------------------------------------------------------------------------------
Proposals of stockholders submitted pursuant to Rule 14a-8 for inclusion in
the proxy statement for the annual meeting of stockholders to be held February
23, 2000 must be received by the Company at its principal executive offices
not later than September 22, 1999. This notice of the annual meeting date also
serves as the notice by the Company under the advance notice Bylaw described
below.
Under the Company's Bylaws, a stockholder must give timely written notice to
the Secretary of the Company of a nomination or before bringing any business
before any annual or special meeting of stockholders. Stockholder proposals
submitted other than pursuant to Rule 14a-8 for the annual meeting to be held
February 23, 2000 must be received by the Secretary not earlier than October
26, 1999 and not later than November 25, 1999. The notice shall set forth for
each matter a brief description of the business to be brought before the
meeting, the reasons therefore, the name, address, class and number of shares
beneficially owned by, and any material interest of the shareholder making the
proposal. Notice of a nomination shall set forth the name, address and the
class and number of shares owned by the shareholder making the nomination; the
name, age, business and residence addresses and principal occupation of the
nominee and the number of shares beneficially owned by, and such other
information concerning, the nominee as would be required to be disclosed in
the solicitation of proxies for election of directors under Regulation 14A
under the Securities Exchange Act of 1934, as amended. The recommendation must
also be accompanied by the consent of the individual to be nominated, to be
elected and to serve. The Company may require any nominee to furnish such
other information as may reasonably be required to determine the eligibility
of the nominee. Persons who are age 70 or older are not eligible for election
to the Board.
16
<PAGE>
Stockholder proposals and recommendations for nomination as a director
should be submitted in writing to the Secretary of the Company, Deere &
Company, One John Deere Place, Moline, Illinois 61265, who will submit them to
the Board or the Corporate Governance Committee, as applicable, for its
consideration.
COST OF SOLICITATION
- -------------------------------------------------------------------------------
The cost of soliciting proxies in the form enclosed is being borne by the
Company. In addition to solicitation by mail, arrangements have been made with
brokerage houses, nominees and other custodians and fiduciaries to send proxy
material to their principals and the Company will reimburse them for their
expenses in doing so. The Company has engaged Georgeson & Co., Inc. to solicit
proxies held by brokers and nominees at a cost of $9,000 plus out-of-pocket
expenses. Proxies also may be solicited personally or by telephone or
telegraph by directors, officers, and a few regular employees of the Company
in addition to their usual duties. They will not be specially compensated for
these services.
For the Board of Directors,
[SIGNATURE OF FRANK S. COTTRELL]
Frank S. Cottrell
Secretary
Moline, Illinois
January 20, 1999
17
<PAGE>
[JOHN DEERE LOGO APPEARS HERE]
[RECYCLE LOGO APPEARS HERE]
Printed on Recycled Paper
<PAGE>
- --------------------------------------------------------------------------------
[LOGO OF DEERE & COMPANY]
DEERE & COMPANY
PROXY -- ANNUAL MEETING / 24 FEBRUARY 1998
Solicited by the Board of Directors for use at the Annual Meeting of
Stockholders of Deere & Company on February 24, 1998.
The undersigned appoints each of Hans W. Becherer and Frank S. Cottrell attorney
and proxy, with full power of substitution, on behalf of the undersigned and
with all powers the undersigned would possess if personally present, to vote all
shares of Common Stock of Deere & Company that the undersigned would be entitled
to vote at the above Annual Meeting and any adjournment thereof. The shares
represented by this proxy will be voted as specified and in the discretion of
the proxies on all other matters. If not otherwise specified, shares will be
voted in accordance with the recommendations of the Directors.
Please mark, date and sign your name exactly as it appears on this proxy and
return this proxy in the enclosed envelope. When signing as attorney, executor,
administrator, trustee, guardian or officer of a corporation, please give your
full title as such. For joint accounts, each joint owner should sign.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
Deere & Company
P.O. Box 11012
New York, N.Y. 10203-0012
<PAGE>
[LOGO OF DEERE & COMPANY]
Dear Stockholders:
It is a pleasure to invite you to the 1999 Annual Meeting of Stockholders of
Deere & Company. The meeting will be held at 10 A.M. on Wednesday, February 24,
1999 at the Deere & Company Administrative Center, on John Deere Road, Moline,
Illinois.
The Notice of the meeting and the Proxy Statement enclosed cover the formal
business of the meeting, which includes election of Directors, and any other
business to properly come before the meeting. The rules of conduct for the
meeting include the following:
1. No cameras, sound equipment or recording devices may be brought into the
auditorium.
2. There will be a discussion period at the end of the meeting. If you wish to
present a question or comment, please wait for an attendant to provide a
microphone, then begin by stating your name, indicating the city and state
where you reside, and confirming that you are a stockholder.
3. The Chairman is authorized to impose reasonable time limits on the remarks
of individual stockholders and has discretion to rule on any matters which
arise during the meeting. Personal grievances or claims are not appropriate
subjects for the meeting.
4. Voting results announced at the meeting by the Inspectors of Election are
preliminary. Final results will be included in the Quarterly Report on Form
10-Q filed with the Securities and Exchange Commission for the second
quarter of fiscal 1999.
Detach Proxy Card Here
- --------------------------------------------------------------------------------
[ ]
PLEASE MARK YOUR CHOICE
LIKE THIS IN BLUE OR BLACK INK [X]
- --------------------------------------------------------------------------------
The Directors Recommend a Vote FOR all Nominees.
- --------------------------------------------------------------------------------
Election as Directors of John R. Block, Prof. Regina E. Herzlinger and Dr.
Arnold R. Weber.
VOTE FOR ALL WITHHOLD VOTE FOR EXCEPTIONS VOTE FOR ALL EXCEPT WITHHOLD
NOMINEES ALL NOMINEES VOTE FROM THE FOLLOWING
NOMINEE(S):
[_] [_] [_] -----------------------------
- --------------------------------------------------------------------------------
If you are submitting a
change of address and or
comments mark here. [_]
Date
-------------------------
-----------------------------
Signature
-----------------------------
Signature
(Please sign, date and return this proxy in the enclosed postage prepaid
envelope.)
