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Change in Control Agreement for

Change of Control Agreement

Change in Control Agreement for | Document Parties: DEERE & CO | Deere & Company You are currently viewing:
This Change of Control Agreement involves

DEERE & CO | Deere & Company

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Title: Change in Control Agreement for
Date: 2/28/2008
Industry: Constr. and Agric. Machinery     Sector: Capital Goods

Change in Control Agreement for, Parties: deere & co , deere & company
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Exhibit 10.8

 

Personal & Confidential

 

 

Change in Control Agreement

for                    

 

 

Deere & Company

 

                     2008

 



 

 

Contents

 

Article 1. Establishment, Term, and Purpose

1

 

 

Article 2. Definitions

2

 

 

Article 3. Severance Benefits

6

 

 

Article 4. Form and Timing of Severance Benefits

9

 

 

Article 5. Excise Tax Equalization Payment

9

 

 

Article 6. The Company’s Payment Obligation

11

 

 

Article 7. Covenants of the Executive

12

 

 

Article 8. Legal Remedies

12

 

 

Article 9. Successors and Assignment

13

 

 

Article 10. Miscellaneous

13

 



 

Deere & Company
Change in Control Agreement

 

THIS AGREEMENT is made and entered into as of the     day of                  ,  2008, by and between Deere & Company (hereinafter referred to as the “Company”) and                   (hereinafter referred to as the “Executive”).

 

WHEREAS, the Board of Directors of the Company has approved the Company entering into change in control agreements with certain key executives of the Company;

 

WHEREAS, the Executive is a key executive of the Company;

 

WHEREAS, should the possibility of a Change in Control of the Company arise, the Board believes it is imperative that the Company and the Board should be able to rely upon the Executive to continue in his position, and that the Company should be able to receive and rely upon the Executive’s advice, if requested, as to the best interests of the Company and its shareholders without concern that the Executive might be distracted by the personal uncertainties and risks created by the possibility of a Change in Control; and

 

WHEREAS, should the possibility of a Change in Control arise, in addition to his regular duties, the Executive may be called upon to assist in the assessment of such possible Change in Control, advise management and the Board as to whether such Change in Control would be in the best interests of the Company and its shareholders, and to take such other actions as the Board might determine to be appropriate.

 

NOW THEREFORE, to assure the Company that it will have the continued dedication of the Executive and the availability of his advice and counsel notwithstanding the possibility, threat, or occurrence of a Change in Control of the Company, and to induce the Executive to remain in the employ of the Company, and for other good and valuable consideration, the Company and the Executive agree as follows:

 

Article 1. Establishment, Term, and Purpose

 

This Agreement will commence on the Effective Date and shall continue in effect for two (2) full years.  However, at the end of such two (2) year period and, if extended, at the end of each additional year thereafter, the term of this Agreement shall be extended automatically for one (1) additional year, unless the Committee delivers written notice six (6) months prior to the end of such term, or extended term, to the Executive, that the Agreement will not be extended.  In such case, the Agreement will terminate at the end of the term, or extended term, then in progress.  Provided, a notice that the Agreement will not be extended shall not be given within six (6) months following a Potential Change in Control, and provided further, that in the event a Change in Control occurs during the original or any extended term, this Agreement will remain in effect for the

 

1



 

longer of: (i) twenty-four (24) months beyond the month in which such Change in Control occurred; or (ii) until all obligations of the Company hereunder have been fulfilled, and until all benefits required hereunder have been paid to the Executive.

 

Article 2. Definitions

 

Whenever used in this Agreement, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized.

 

(a)         Base Salary ” means the salary of record paid to the Executive as annual salary, excluding amounts received under incentive or other bonus plans, whether or not deferred.

 

(b)         Beneficial Owner ” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

 

(c)         Beneficiary ” means the persons or entities deemed designated by the Executive pursuant to Section 10.2 herein.

 

(d)         Board ” means the Board of Directors of the Company.

 

(e)         Bonus ” means the greater of:  (a) the arithmetic mean of the bonuses paid to the Executive pursuant to the Performance Bonus Plan, or its successor plan as approved by the Committee, of the Company for the three complete fiscal years immediately preceding the Executive’s Effective Date of Termination; and (b) the target bonus amount for the Executive for the fiscal year in which the Effective Date of Termination occurs.  For purposes of this Agreement, the term “Bonus” shall not be deemed to include any payments made pursuant to the Company’s Mid-Term Incentive Plan, or its successor plan.

 

(f)          Cause ” means (a) the Executive’s willful and continued failure to substantially perform his duties with the Company (other than any such failure resulting from Disability or occurring after issuance by the Executive of a Notice of Termination for Good Reason), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has willfully failed to substantially perform his duties, and after the Executive has failed to resume substantial performance of his duties on a continuous basis within thirty (30) calendar days of receiving such demand; (b) the Executive’s willfully engaging in conduct (other than conduct covered under (a) above) which is demonstrably and materially injurious to the Company, monetarily or otherwise; or (c) the Executive’s having been convicted of a felony. For purposes of this subparagraph, no act, or failure to act, on the Executive’s

 

2



 

part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the action or omission was in the best interests of the Company.

 

(g)         Change in Controlmeans a change in control of a nature that would be required to be reported in response to Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act  of 1934 (the “Exchange Act”) whether or not the Company is then subject to such reporting requirement, provided that, without limitation, such a Change in Control shall be deemed to have occurred if:

 

(i)           any “person” (as defined in Sections 13(d) and 14(d) of the Exchange Act) (other than a Participant or group of Participants, the Company or a subsidiary, any employee benefit plan of the Company including its trustee, or any corporation or similar entity which becomes the Beneficial Owner of securities of the Company in connection with a transaction excepted from the provisions of clause (iii) below) is or becomes the “beneficial owner” (as defined in Rule 13(d-3) under the Exchange Act), directly or indirectly, of securities of the Company (not including the securities beneficially owned or any securities acquired directly from the Company) representing thirty percent (30%) or more of the combined Voting Power of the Company’s then outstanding securities;

 

(ii)          the following individuals shall cease to constitute a majority of the Board:  individuals who on the Effective Date constitute the Board and any new director(s) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the Effective Date or whose appointment or election or nomination for election was previously so approved but excluding, for this purpose, any such new director whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board;

 

(iii)         there is consummated a merger, consolidation or similar business combination transaction of the Company (including, for the avoidance of doubt, any business combination structured as a forward or reverse triangular merger involving any direct or indirect subsidiary of the Company) with any other company, other than a merger, consolidation or similar business combination transaction which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least sixty percent (60%) of the combined Voting Power of the voting securities of the

 

3



 

Company or such surviving entity or parent thereof outstanding immediately after such merger, consolidation or similar business combination transaction; or

 

    (iv)       the stockholders of the Company approve a plan of complete liquidation of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.

 

(h)         Code ” means the United States Internal Revenue Code of 1986, as amended, and any successors thereto.

 

(i)          Committee ” means the Board Committee on Compensation or any other committee appointed by the Board to perform the functions of the Compensation and Organization Committee.

 

(j)          Company ” means Deere & Company, a Delaware corporation, or any successor thereto as provided in Article 9 herein.

 

(k)         Date of Termination Share Price ” means the average of the high and low prices per share paid in transactions reported on the New York Stock Exchange Composite Tape at the Effective Date of Termination.

 

(l)          Disability ” means complete and permanent inability by reason of illness or accident to perform the duties of the occupation at which the Executive was employed when such disability commenced.

 

(m)        Effective Date ” means the date of this Agreement set forth above.

 

(n)         Effective Date of Termination ” means the date on which a Qualifying Termination occurs which triggers the payment of Severance Benefits hereunder.

 

(o)         Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

 

(p)         Good Reason ” shall mean, without the Executive’s express written consent, the occurrence of any one or more of the following:

(i)             The assignment of the Executive to duties materially inconsistent with the Executive’s authorities, duties, responsibilities, and status (including offices and reporting requirements) as an employee of the Company, or a reduction or alteration in the nature or status of the Executive’s authorities, duties, or responsibilities from the greater of (i) those in effect on the Effective Date; (ii) those in effect during the fiscal

 

4



 

year immediately preceding the year of the Change in Control; or (iii) those in effect immediately preceding the Change in Control;

(ii)            The Company’s requiring the Executive to be based at a location which is at least fifty (50) miles further from the current primary residence than is such residence from the Company’s current headquarters, except for required travel on the Company’s business to an extent substantially consistent with the Executive’s business obligations as of the Effective Date;

(iii)           A reduction by the Company in the Executive’s Base Salary as in effect on the Effective Date or as the same shall be increased from time to time;

(iv)           A material reduction in the Executive’s level of participation in any of the Company’s short- and/or long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices, or arrangements in which the Executive participates from the levels in place during the fiscal year immediately preceding the Change in Control; provided, however, that reductions in the levels of participation in any such plans shall not be deemed to be “Good

                Reason” if the Executive’s reduced level of participation in each such program remains substantially consistent with the average level of participation of other executives who have positions commensurate with the Executive’s position;

(v)            The failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform this Agreement, as contemplated in Article 9 herein; or

(vi)           Any termination of Executive’s employment by the Company that is not effected pursuant to a Notice of Termination.

 

              The existence of Good Reason shall not be affected by the Executive’s temporary incapacity due to physical or mental illness not constituting a Disability. The Executive’s Retirement shall constitute a waiver of the Executive’s rights with respect to any circumstance constituting Good Reason. The Executive’s continued employment shall not constitute a waiver of the Executive’s rights with respect to any circumstance constituting Good Reason.

 

(q)         Notice of Termination ” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

 

(r)          Person ” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as provided in Section 13(d).

 

5



 

          (s)     Potential Change in Control ” of the Company means the happening of any of the following:

 

(i)   the entering into an agreement by the Company, the consummation of which would result in a Change of Control of the Company as defined in paragraph (g) of this Article 2; or

 

(ii) the acquisition of beneficial ownership, directly or indirectly, by any entity, person or group (other than a Participant or group of Participants, the Company or a subsidiary, or any employee benefit plan of the Company including its trustee) of securities of the Company representing fifteen percent (15%) or more of the combined voting power of the Company’s outstanding securities and the adoption by the Board of Directors of a resolution to the effect that a Potential Change of Control of the Company has occurred for purposes of the Plan.

 

(t)          










 
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