10-K405/A

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1

TO

FORM 10-K 405/A

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999

Commission file number 1-4121

DEERE & COMPANY

(Exact name of registrant as specified in its charter)

Delaware		36-2382580
(State of incorporation)		(IRS Employer Identification No.)
One John Deere Place, Moline, Illinois	61265	(309) 765-8000
(Address of principal executive offices)	(Zip Code)	(Telephone Number)

SECURITIES REGISTERED PURSUANT
TO SECTION 12(b) OF THE ACT

Title of each class	Name of each exchange on which registered
Common stock, $1 par value	New York Stock Exchange Chicago Stock Exchange Frankfurt (Germany) Stock Exchange
51/2% Convertible Subordinated
Debentures Due 2001	New York Stock Exchange
8.95% Debentures Due 2019	New York Stock Exchange
81/2% Debentures Due 2022	New York Stock Exchange
6.55% Debentures Due 2028	New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  X  No   

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. /x/

The aggregate quoted market price of voting stock of registrant held by nonaffiliates at December 31, 1999 was $10,108,854,792. At December 31, 1999, 233,936,562 shares of common stock, $1 par value, of the registrant were outstanding. Documents Incorporated by Reference. Portions of the proxy statement for the annual meeting of stockholders to be held on February 23, 2000 are incorporated by reference in Part III.

PART I

ITEM 1.    BUSINESS.

Products

    Deere & Company (Company) and its subsidiaries (collectively called John Deere) have operations which are categorized into four major business segments.

The worldwide agricultural equipment segment manufactures and distributes a full line of farm equipment—including tractors; combine, cotton and sugarcane harvesters; tillage, seeding and soil preparation machinery; sprayers; hay and forage equipment; materials handling equipment; and integrated precision farming technology.

The worldwide construction equipment segment manufactures and distributes a broad range of machines used in construction, earthmoving and forestry—including backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; scrapers; motor graders; log skidders; and forestry harvesters.

The worldwide commercial and consumer equipment segment manufactures and distributes equipment for commercial and residential uses—including small tractors for lawn, garden, commercial and utility purposes; riding and walk-behind mowers; golf course equipment; snowblowers; handheld products such as chain saws, string trimmers and leaf blowers; skid-steer loaders; utility vehicles; and other outdoor power products.

The products produced by the equipment segments are marketed primarily through independent retail dealer networks and major retail outlets.

The credit segment primarily finances sales and leases by John Deere dealers of new and used agricultural, construction, and commercial and consumer equipment and sales by non-Deere dealers of recreational products. In addition, it provides wholesale financing to dealers of the foregoing equipment and finances retail revolving charge accounts.

    John Deere's worldwide agricultural, construction, and commercial and consumer equipment and special technologies operations are sometimes referred to as the "Equipment Operations." The credit, health care and insurance operations are sometimes referred to as "Financial Services."

    In response to a recent accounting pronouncement, the Company's segments have been redefined to coincide with internal organizational structure, the way the operations are managed and evaluated by management and materiality considerations. The manufacture and distribution of engines and drivetrain components for the original equipment manufacturer market, previously aggregated with the construction equipment segment, are now allocated to all three major equipment segments. In addition, the operations of certain units involved in the development and marketing of special technologies, which were previously aggregated with the agricultural equipment and the commercial and consumer equipment segments, have been aggregated and included with the health care and insurance operations in the "Other" category, as they do not meet the materiality threshold included in the new accounting standard. The insurance operations were sold in 1999. Additional information is presented in the discussion of business segment and geographic area results on pages 25, 26 and 31 through 33. The John Deere enterprise has manufactured agricultural machinery since 1837. The present Company was incorporated under the laws of Delaware in 1958.

Market Conditions and Outlook

    Agricultural Equipment.  As a result of continued weakness in farm commodity prices, industry retail sales of farm machinery in North America are currently expected to be off by 5 to 10 percent next year. Declines of a similar nature are expected in other major markets. At the same time, farmers are in relatively good financial condition due to higher government payments. In light of this outlook, the Company has adopted a cautious approach, expecting sales and production volumes to trail prior-year levels early in 2000, but to be higher for the full year. The anticipated rise in sales is due to production being increased to track more closely with retail demand than in 1999. Sales are also expected to benefit from a positive response to several important new products.

    Construction Equipment.  Although higher interest rates and lower housing starts are expected to result in a moderate slowdown in industry sales of construction equipment next year, the Company expects to have higher sales in the year 2000 due largely to an expanded product line. Company sales in the early part of the year, however, are expected to be lower as a result of a continuation of dealer inventory adjustments. Made in conjunction with the Estimate to Cash initiative, these reductions should place the Company in a favorable inventory position going into the following year. Industry inventory levels, however, are a source of concern with respect to price realization.

    Commercial and Consumer Equipment.  Following strong gains this year, retail demand for the Company's commercial and consumer equipment is expected to achieve further growth next year, assuming normal weather patterns and a continuation of current economic conditions. These operations are expected to benefit from market-share growth, positive customer response to new products and continued international expansion.

    Credit Operations.  Credit should continue to benefit from a larger receivable and lease portfolio next year. However, higher growth expenditures, lower gains on the sale of retail notes and a weakened agricultural economy are expected to keep pressure on margins and bring about a sizeable reduction in overall results.

    Based on these conditions, the Company's worldwide physical volume of sales is currently expected to increase by approximately 10 percent for the year 2000. First-quarter physical volumes are expected to be slightly higher than in the comparable 1999 period. However, the mix of sales is expected to deteriorate and put significant downward pressure on profits for the first quarter.

    Despite the lower 1999 results, the Company has put itself in position to benefit from an upturn in the farm economy, whenever it occurs. At the same time, the Company remains on track with its product development plans, and numerous growth, quality, technology and Internet-related initiatives. In addition, the Company fulfilled its 1999 goal of generating strong cash flow and is setting the stage for markedly better results once the agricultural economy starts moving ahead and as other business opportunities take shape.

1999 Consolidated Results Compared with 1998

    Deere & Company net income in 1999 totaled $239 million, or $1.02 per share diluted ($1.03 basic), compared with last year's net income of $1,021 million, or $4.16 per share diluted ($4.20 basic). The decline in profits was largely due to a continuation of weak demand for agricultural equipment caused by depressed farm commodity prices. Cash flow from operations, however, was higher due to a reduction in agricultural equipment receivables of approximately $800 million, and a decline in construction equipment receivables of approximately $200 million. During the year, the Company implemented aggressive production schedule reductions in order to help balance receivables and inventories with forecasted levels of demand.

    Net sales and revenues decreased 15 percent to $11,751 million in 1999 compared with $13,822 million in 1998. Net sales of the Equipment Operations decreased 19 percent in 1999 to $9,701 million from $11,926 million last year. Overseas net sales were $2,678 million for the year, compared with $3,049 million in 1998. Overall, the Company's worldwide physical volume of sales decreased 18 percent for the year.

    The Company's Equipment Operations, which exclude the Financial Services operations, had operating profit of $272 million in 1999 compared with $1,476 million in 1998.

    Net income of the Company's Financial Services operations improved in 1999, totaling $187 million compared with $175 million in 1998. Finance and interest income increased to $1,027 million in 1999, compared with $887 million last year. Additional information is presented in the discussion of credit operations on pages 28 and 29.

EQUIPMENT OPERATIONS

Agricultural Equipment

    Sales of agricultural equipment, particularly in the United States and Canada, are affected by total farm cash receipts, which reflect levels of farm commodity prices, acreage planted, crop yields and government payments. Sales are also influenced by general economic conditions, farm land prices, farmers' debt levels, interest rates, agricultural trends and the levels of costs associated with farming. Weather and climatic conditions can also affect buying decisions of equipment purchasers.

    Innovations to machinery and technology also influence buying. Reduced tillage practices have been adopted by many farmers to control soil erosion and lower production costs. John Deere has responded to this shift by delivering leading edge planters, drills and tillage equipment. Additionally, the Company has developed a precision farming approach using advanced technology and satellite positioning that should enable farmers to better control input costs and yields and to improve environmental management.

    Large, cost-efficient, highly-mechanized agricultural operations account for an important share of total North American and Australian farm output. The large-size agricultural equipment used on such farms has been particularly important to John Deere. A large proportion of the Equipment Operations' total agricultural equipment sales in the United States is comprised of tractors over 100 horsepower, self-propelled combines and self-propelled cotton pickers.

    Seasonal patterns in retail demand for agricultural equipment result in substantial variations in the volume and mix of products sold to retail customers during various times of the year. Seasonal demand must be estimated in advance, and equipment must be manufactured in anticipation of such demand in order to achieve efficient utilization of manpower and facilities throughout the year. For certain equipment, the Company offers early order discounts to retail customers. Production schedules are based, in part, on these early order programs. The Equipment Operations incur substantial seasonal indebtedness with related interest expense to finance production and inventory of equipment, and to finance sales to dealers in advance of seasonal demand. The Equipment Operations often encourage early retail sales decisions for both new and used equipment, by waiving retail finance charges or offering low-rate financing, during off-season periods and in early order promotions.

    An important part of the competition within the agricultural equipment industry during the past decade has come from a diverse variety of short-line and specialty manufacturers with differing manufacturing and marketing methods. Because of industry conditions, especially the merger of certain large integrated competitors, the competitive environment is undergoing significant change.

Construction Equipment

    The construction equipment industry is broadly defined as including construction, earthmoving and forestry equipment, as well as some materials handling equipment and a variety of machines for specialized construction applications, including uses in the mining industry. The Equipment Operations provide types and sizes of equipment that compete for approximately two-thirds of the estimated total United States market for all types and sizes of construction equipment (other than the market for cranes and specialized mining equipment). Retail sales of John Deere construction equipment are influenced by prevailing levels of residential, industrial and public construction and the condition of the forest products industry. Sales are also influenced by general economic conditions and the level of interest rates.

    John Deere construction equipment falls into three broad categories: smaller earthmoving equipment; medium capacity construction and earthmoving equipment; and forestry machines. The Equipment Operations' construction equipment business began in the late 1940s with wheel and crawler tractors of a size and horsepower range similar to agricultural tractors, utilizing common components. Through the years, the Equipment Operations have substantially increased production capacity for construction equipment, adding to the line larger machines such as crawler loaders and dozers, log skidders, motor graders, hydraulic excavators and four-wheel-drive loaders. During 1999, the division added articulated dump trucks, larger excavators and mini-excavators to its product line. The division's products incorporate technology and many major components similar to those used in agricultural equipment, including diesel engines, transmissions and sophisticated hydraulics and electronics. In addition to the construction equipment manufactured by the construction equipment division, certain products are purchased from other manufacturers for resale by John Deere.

    The Company and Hitachi Construction Machinery Co., Inc. of Japan ("Hitachi") have a joint venture for the manufacture of hydraulic excavators in the United States and Mexico and for the distribution of excavators in North, Central and South America. The Company also has supply agreements with Hitachi under which a broad range of construction products manufactured by John Deere in the United States, including four-wheel-drive loaders and small crawler dozers, are distributed by Hitachi in Japan and other Far East markets. The Company also has an agreement with Bell Equipment of South Africa to distribute articulated dump tucks in North America.

    The division has also taken a number of initiatives in the rental equipment market for construction machinery including specially designed rental programs for Deere dealers, expanded cooperation with major national equipment rental companies, and direct participation in the rental market, through the Company's minority ownership in Sunstate Equipment Co., LLC. After the end of the fiscal year, the Company announced the pending acquisition, subject to regulatory approval, of the Timberjack Group, a producer of forestry equipment headquartered in Helsinki, Finland. Additional information on the pending acquisition appears on page 42.

Commercial and Consumer Equipment

    John Deere commercial and consumer equipment includes rear-engine riding mowers, front-engine lawn tractors, lawn and garden tractors, compact utility tractors, utility tractors, skid steer loaders, front mowers, small utility vehicles, handheld products such as chain saws, string trimmers and leaf blowers, and a broad line of associated implements for mowing, tilling, snow and debris handling, aerating, and many other residential, commercial, golf and sports turf care applications. The product line also includes walk-behind mowers, snow throwers and other outdoor power products. Retail sales of commercial and consumer equipment products are influenced by weather conditions, consumer spending patterns and general economic conditions.

    The division sells entry-level lawn, yard and garden tractors and walk-behind mowers under the name "Sabre by John Deere" in North America. The division also sells consumer products under the Homelite and Green Machine brand names and sells walk-behind mowers in Europe under the SABO brand name and commercial mowing equipment under the Roberine brand name. The division also builds products for sale by others. Beginning in 1999, the Company has built products under the Scott's™ brand for sale through Home Depot stores.

    In addition to the equipment manufactured by the commercial and consumer division, certain products are purchased from other manufacturers for resale by John Deere.

Engineering and Research

    John Deere makes large expenditures for engineering and research to improve the quality and performance of its products, and to develop new products. Such expenditures were $458 million, or 4.7 percent of net sales of equipment in 1999, and $444 million, or 3.7 percent in 1998.

Manufacturing

    Manufacturing Plants.  In the United States and Canada, the Equipment Operations own and operate 22 factory locations, which contain approximately 30.2 million square feet of floor space. Seven of the factories are devoted primarily to the manufacture of agricultural equipment, eight to commercial and consumer equipment, two to construction equipment, one to engines, one to hydraulics and power train components, two to special technology equipment, and one to power train components manufactured mostly for OEM markets. Overseas, the Equipment Operations own and operate tractor factories in Germany, Mexico and Brazil; agricultural equipment factories in France, Germany, Mexico, Brazil, the Netherlands and South Africa; engine factories in France, Mexico and Argentina; a component factory in Spain; and commercial and consumer facilities in Germany, Mexico and the Netherlands. These overseas facilities contain approximately 8.5 million square feet of floor space. The Equipment Operations also have financial interests in other manufacturing organizations, which include agricultural equipment manufacturers in China and the United States and a joint venture that builds construction excavators in the United States.

    John Deere's facilities are well maintained, in good operating condition and are suitable for their present purposes. These facilities, together with planned capital expenditures, are expected to meet John Deere's manufacturing needs in the foreseeable future.

    The Equipment Operations manufacture many of the components included in their products. The principal raw materials required for the manufacture of products are purchased from numerous suppliers. Although the Equipment Operations depend upon outside sources of supply for a substantial number of components, manufacturing operations are extensively integrated. Similar or common manufacturing facilities and techniques are employed in the production of components for agricultural, construction, and commercial and consumer equipment.

    The physical volume of sales in 1999 was 18 percent lower than in 1998. Capacity is adequate to satisfy anticipated retail demand. The Equipment Operations' manufacturing strategy involves the implementation of appropriate levels of technology and automation, so that manufacturing processes can remain viable at varying production levels and can be flexible enough to accommodate many of the product design changes required to meet market requirements.

    In order to utilize manufacturing facilities and technology more effectively, the Equipment Operations pursue continuous improvements in manufacturing processes. These include steps to streamline manufacturing processes and enhance customer responsiveness. The Company has implemented flexible assembly lines that can handle a wider product mix and deliver products at the times when dealers and customers require them. Additionally, considerable effort is being directed to manufacturing cost reduction through process improvement, product design, advanced manufacturing technology, enhanced environmental management systems, supply management and compensation incentives related to productivity and organizational structure. The Equipment Operations also pursue the sale to other companies of selected parts and components that can be manufactured and supplied to third parties on a competitive basis.

    Capital Expenditures.  The agricultural, construction, and commercial and consumer operations' capital expenditures totaled $291 million in 1999 compared with $425 million in 1998 and $479 million in 1997. Provisions for depreciation applicable to these operations' property, plant and equipment during these years were $268 million, $267 million and $253 million, respectively. Capital expenditures for these operations in 2000 are currently estimated to approximate $500 million. The 2000 expenditures will be associated with new products, operations improvement programs and the manufacture and marketing of products in new markets such as Mexico, India, China, Brazil and the former Soviet Union. Future levels of capital expenditures will depend on business conditions.

Patents and Trademarks

    John Deere owns a significant number of patents, licenses and trademarks which have been obtained over a period of years. The Company believes that, in the aggregate, the rights under these patents, licenses and trademarks are generally important to its operations, but does not consider that any patent, license, trademark or related group of them (other than its house trademarks) is of material importance in relation to John Deere's business.

Marketing

    In the United States and Canada, the Equipment Operations, excluding certain consumer product lines, distribute equipment and service parts through one agricultural equipment sales and administration office supported by seven agricultural equipment sales branches, one construction equipment sales and administration office and one commercial and consumer equipment sales and administration office (collectively called sales branches). In addition, the Equipment Operations operate a centralized parts distribution warehouse in coordination with several regional parts depots in the United States and Canada and have an agreement with a third party to operate a high-volume parts warehouse in Indiana.

    The sales branches in the United States and Canada market John Deere products at approximately 3,380 dealer locations, all of which are independently owned. 1,675 sell agricultural equipment, while 420 sell construction equipment. Smaller construction equipment is sold by nearly all of the construction equipment dealers and larger construction equipment, forestry equipment and a line of light construction equipment are sold by most of these dealers. Commercial and consumer equipment is sold by most John Deere agricultural equipment dealers, a few construction equipment dealers, and about 1,285 commercial and consumer equipment dealers, many of whom also handle competitive brands and dissimilar lines of products. In addition, the Sabre, Homelite, Green Machine and Scott's™ product lines are sold through independent dealers and various general and mass merchandisers.

    Outside North America, John Deere agricultural equipment is sold to distributors and dealers for resale in over 110 countries by sales branches located in five European countries, South Africa, Mexico, Brazil, Argentina, Uruguay and Australia, by export sales branches in Europe and the United States, and by associated companies doing business in the former Soviet Union and China. Commercial and consumer equipment sales overseas occur primarily in Europe and Australia. Outside North America, construction equipment is sold primarily by an export sales branch located in the United States.

Wholesale Financing

    The Equipment Operations provide wholesale financing to dealers in the United States for extended periods, to enable dealers to carry representative inventories of equipment and to encourage the purchase of goods by dealers in advance of seasonal retail demand. Down payments are not required, and interest is not charged for a substantial part of the period for which the inventories are financed. A security interest is retained in dealers' inventories, and periodic physical checks are made of dealers' inventories. Generally, terms to dealers require payments as the equipment which secures the indebtedness is sold to retail customers. Variable market rates of interest are charged on balances outstanding after certain interest-free periods, which currently are one to twelve months for agricultural tractors, one to five months for construction equipment, and two to 24 months for most other equipment. Financing is also provided to dealers on used equipment accepted in trade, on repossessed equipment, and on approved equipment from other manufacturers. A security interest is obtained in such equipment. Dealer defaults in recent years have not been significant.

    In Canada, John Deere products (other than service parts and commercial and consumer equipment) in the possession of dealers are inventories of the Equipment Operations that are consigned to the dealers. Dealers are required to make deposits on consigned equipment remaining unsold after specified periods.

    Sales to overseas dealers are made by the Equipment Operations' overseas and export sales branches and are, for the most part, financed by John Deere in a manner similar to that provided for sales to dealers in the United States, although maturities tend to be shorter overseas and a security interest is not always retained in the equipment sold.

    Receivables from dealers, which largely represent dealer inventories, were $3.3 billion at October 31, 1999 compared with $4.1 billion at October 31, 1998 and $3.3 billion at October 31, 1997. At those dates, the ratios of worldwide net dealer receivables to fiscal year net sales, were 34 percent, 34 percent and 30 percent, respectively. The highest month-end balance of such receivables during each of the past two fiscal years was $4.3 billion at April 30, 1999 and $4.4 billion at April 30, 1998. Wholesale financing is also provided by the Company's credit segment. See "Financial Services—Credit Operations" below.

FINANCIAL SERVICES

Credit Operations

    United States, Canada, Mexico, Australia, New Zealand, Germany, France and the United Kingdom.  The Company's credit subsidiaries provide and administer financing for retail purchases of new and used John Deere agricultural, construction, and commercial and consumer equipment. The credit operations also provide wholesale financing for wholesale inventories of John Deere agricultural and John Deere construction equipment owned by dealers of those products. The Company's credit subsidiaries include John Deere Credit Company, John Deere Capital Corporation (Capital Corporation) and its subsidiaries (Deere Credit, Inc., Farm Plan Corporation, Deere Credit Services, Inc., John Deere Receivables, Inc., John Deere Funding Corporation, Senstar Capital Corporation, Arrendadora John Deere, S.A. de C.V., John Deere Credit Group, Plc and John Deere Credit Limited—United Kingdom, and John Deere Credit Limited— Australia, among others), and John Deere Credit Inc. (Canada) (collectively referred to as the Credit Companies). Deere & Company and John Deere Construction Equipment Company are referred to as the "sales companies." The Capital Corporation purchases retail installment sales and loan contracts (retail notes) from the sales companies. These retail notes are acquired by the sales companies through John Deere retail dealers in the United States and Mexico. John Deere Credit Inc. purchases and finances retail notes acquired by John Deere's equipment sales branches in Canada. The terms of retail notes and the basis on which the Credit Companies acquire retail notes from the sales companies are governed by agreements with the sales companies. During the year, the Credit Companies also purchased and financed retail notes unrelated to John Deere, representing primarily recreational product notes acquired from independent dealers of recreational vehicles. The Credit Companies also finance and service revolving charge accounts through merchants or leading farm input providers in the agricultural, construction, and lawn and grounds care retail markets and, additionally, provide wholesale financing for wholesale inventories of recreational vehicles, manufactured housing units, yachts and John Deere engines.

    Retail notes acquired by the sales companies have been immediately sold to the Credit Companies. The Equipment Operations have been the Credit Companies' major source of business, but in some cases, retail purchasers of John Deere products finance their purchases outside the John Deere organization.

    The Credit Companies' terms for financing equipment retail sales (other than smaller items purchased through unsecured revolving charge accounts) provide for retention of a security interest in the equipment financed. The Credit Companies' guidelines for minimum down payments, which vary with the types of equipment and repayment provisions, are generally not less than 20 percent on agricultural and construction equipment, 10 percent on lawn and grounds care equipment used for personal use, and 10 percent for recreational vehicles. Finance charges are sometimes waived for specified periods or reduced on certain John Deere products sold or leased in advance of the season of use or in other sales promotions. The Credit Companies generally receive compensation from the Equipment Operations equal to a competitive interest rate for periods during which finance charges are waived or reduced on the retail notes or leases. The cost is accounted for as a deduction in arriving at net sales by the Equipment Operations.

    Retail leases are offered to equipment users in the United States, Mexico, France, the United Kingdom, Australia and New Zealand. A small number of leases are executed with units of local government. Leases are usually written for periods of one to six years, and frequently contain an option permitting the customer to purchase the equipment at the end of the lease term. Retail leases are also offered in a generally similar manner to customers in Canada through John Deere Credit Inc. and the Company's Canadian subsidiary, John Deere Limited.

    The Company has an agreement with the Capital Corporation to make income maintenance payments to the Capital Corporation such that its ratio of earnings before fixed charges to fixed charges is not less than 1.05 to 1 for each fiscal quarter. For 1999 and 1998, the Capital Corporation's ratios were 1.64 to 1 and 1.63 to 1, respectively. The Company has also committed to own at least 51 percent of the voting shares of capital stock of the Capital Corporation and to maintain the Capital Corporation's consolidated tangible net worth at not less than $50 million. These arrangements are not intended to make the Company responsible for the payment of any indebtedness, obligation or liability of the Capital Corporation or any of its direct or indirect subsidiaries. No payments were necessary under this agreement in 1998 or 1999. Additional information on the Credit Companies appears under the caption "Credit Operations" on pages 28 and 29.

    Overseas.  John Deere Credit Limited (United Kingdom) offers equipment financing products within the United Kingdom. Arrendadora John Deere, S.A. de C.V. offers equipment financing products within Mexico. John Deere Credit-Germany, a partnership, offers equipment financing within Germany. John Deere Credit Limited (Australia) offers equipment financing products within Australia and New Zealand. John Deere Credit S.A.S., a joint venture, offers equipment financing in France. Banco John Deere (Brazil) offers equipment financing products within Brazil. Retail sales financing outside of the United States and Canada is affected by a diversity of customs and regulations.

Health Care

    In 1985, the Company formed John Deere Health Care, Inc. to commercialize the Company's expertise in the field of health care, which had been developed from efforts to control its own health care costs. John Deere Health Care currently provides health management programs and related administrative services, through its health maintenance organization subsidiaries, John Deere Family Healthplan, Inc. and John Deere Health Plan, Inc., for companies located in Illinois, Iowa, South Carolina, Tennessee and Virginia. At October 31, 1999, approximately 414,000 individuals were enrolled in these programs, of which approximately 70,800 were John Deere employees, retirees and their dependents. During the fiscal year, John Deere Health Care dissolved its subsidiary, John Deere Healthplan of Georgia, Inc., and exited the Georgia market for commercial insured business. In addition, John Deere Health Care's subsidiary, Heritage National Healthplan, Inc., changed its name to John Deere Health Plan, Inc. In December 1999, John Deere Health Care's other subsidiary, John Deere Family Healthplan, Inc., was merged into John Deere Health Plan, Inc., effectively creating one health maintenance subsidiary.

Insurance

    The Company's insurance subsidiaries, consisting of John Deere Insurance Group, Inc. and its subsidiaries, were sold during 1999. The insurance group marketed commercial property/casualty insurance coverages and services to selected market segments, including agricultural equipment, construction equipment and automobile dealerships, trucking operations, and specialty insurance.

Environmental Matters

    The Company is subject to a wide variety of state, federal and international environmental laws, rules and regulations. These laws, rules and regulations may affect the way the Company conducts its operations and failure to comply with these regulations could lead to fines and other penalties. The Company is also involved in the evaluation and clean-up of a limited number of sites currently owned and the evaluation of a limited number of sites that may be acquired in pending acquisitions, including the pending acquisition of the Timberjack Group. Additional information on the pending acquisition appears on page 42. Management does not expect that these matters will have a material adverse effect on the consolidated financial position or results of operations of the Company.

Employees

    At October 31, 1999, John Deere had approximately 38,700 full-time employees, including approximately 25,900 employees in the United States and Canada. From time to time, John Deere also retains consultants, independent contractors, and temporary and part-time workers. Unions are certified as bargaining agents for approximately 45 percent of John Deere's United States employees. Most of the Company's United States production and maintenance workers are covered by a collective bargaining agreement with the United Auto Workers (UAW), with an expiration date of September 30, 2003.

    The majority of employees at John Deere facilities in Canada and overseas are also represented by unions.

EXECUTIVE OFFICERS OF THE REGISTRANT

    Following are the names and ages of the executive officers of the Company, their positions with the Company and summaries of their backgrounds and business experience. All executive officers are elected or appointed by the Board of Directors and hold office until the annual meeting of the Board of Directors following the annual meeting of stockholders in each year.

Name, age and office (at December 31, 1999), and year elected to office				Principal occupation during last five years other than office of the Company currently held
Hans W. Becherer	64	Chairman	1990	1990 and prior, President
Ferdinand F. Korndorf(1)	50	Division President	1995	1994-95 Senior Vice President; 1991-94 Vice President
Robert W. Lane(1)	50	Division President	1999	1998-99 Senior Vice President, Ag Division, and Managing Director, Region II; 1996-98 Senior Vice President and Chief Financial Officer; 1995-96 Senior Vice President, Ag Division; 1992-95 Director Latin America, the Far East, Australia and South Africa
Pierre E. Leroy	51	Division President	1996	1994-96 Senior Vice President and Chief Financial Officer; 1994 and prior, Vice President and Treasurer
Michael P. Orr	52	Division President	1997	1997 and prior, President, John Deere Credit
Nathan J. Jones	43	Senior Vice President and Chief Financial Officer	1998	1995-98 Vice President and Treasurer; 1994 and prior, Assistant Treasurer
John K. Lawson	59	Senior Vice President	1996	1995-96 Division President; 1992-95 Senior Vice President
Frank S. Cottrell	57	Senior Vice President and General Counsel	1998	1993-98, Vice President, Secretary and General Counsel

(1)

On January 12, 2000, Mr. Lane was named President and Chief Operating Officer and Mr. Korndorf was named Division President for agricultural equipment.

ITEM 2. PROPERTIES.

    See "Manufacturing" in Item 1.

    The Equipment Operations also own and occupy buildings housing seven sales branches, one centralized parts depot, five regional parts depots and several transfer houses and warehouses throughout the United States and Canada. These facilities contain approximately 5.0 million square feet of floor space. The Equipment Operations also own and occupy buildings housing sales branches, one centralized parts depot and regional parts depots in Europe and Australia. These facilities contain approximately 1.1 million square feet of floor space.

    Deere & Company administrative offices, research facilities and certain facilities for health care activities, all of which are owned by John Deere, together contain about 2.1 million square feet of floor space and miscellaneous other facilities total 0.5 million square feet. John Deere also leases space in various locations totaling about 2.9 million square feet.

ITEM 3. LEGAL PROCEEDINGS.

    The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability, retail credit, software licensing, patent and trademark matters. On August 13, 1999 the Federal District Court in Chicago granted a motion for summary judgment in favor of the Company in a lawsuit entitledCaterpillar Inc. v. Deere & Company in which Caterpillar had charged Deere & Company with infringement of a patent on rubber tracked tractors. In granting the motion for summary judgment filed by Deere & Company, the District Court Judge determined there was no infringement. Caterpillar has appealed the case. Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss, the Company believes these unresolved legal actions will not have a material effect on its financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

    None.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

    The Company's common stock is listed on the New York Stock Exchange, the Chicago Stock Exchange and the Frankfurt (Germany) Stock Exchange. See the information concerning quoted prices of the Company's common stock and the number of stockholders in the second table and the third paragraph, and the data on dividends declared and paid per share in the first table, under the caption "Supplemental Information (Unaudited)" on page 42.

ITEM 6. SELECTED FINANCIAL DATA.

    Financial Summary

(Millions of dollars except per share amounts)	1999		1998		1997		1996		1995
For the Year Ended October 31:
Total net sales and revenues	$	11,751	$	13,822	$	12,791	$	11,229	$	10,291
Net income	$	239	$	1,021	$	960	$	817	$	706
Net income per share—basic	$	1.03	$	4.20	$	3.78	$	3.14	$	2.71
Net income per share—diluted	$	1.02	$	4.16	$	3.74	$	3.11	$	2.69
Dividends declared per share	$	.88	$	.88	$	.80	$	.80	$	.75
At October 31:
Total assets	$	17,578	$	18,002	$	16,320	$	14,653	$	13,847
Long-term borrowings	$	3,806	$	2,792	$	2,623	$	2,425	$	2,176

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

    See the information under the caption "Management's Discussion and Analysis" on pages 25 through 30.

Year 2000 Status Update

    No public infrastructure problems or any facilities related problems were encountered by John Deere locations during the rollover to the year 2000. After extensive system verification and testing the Company's systems are operating normally. The Company is not aware of any significant issues related to the Year 2000 problem.

    John Deere manufactured products do not contain microprocessors with date-related functions so therefore are unaffected by Year 2000 rollover concerns.

    The Company continues to monitor the status of our operations, suppliers and distribution channels to ensure no significant business interruptions.

    The Company took a multi-faceted approach to minimize business interruption arising from the rollover to the Year 2000 and approached Year 2000 readiness as an enterprise-wide project. The Company's Year 2000 Program addressed the eight major assessment areas identified by Automotive Industry Action Group. These areas include business information systems, mainframe and personal computers, the distributed network and purchased software, the shop floor, facilities systems, the Company's products and product research and development facilities, and the readiness of the Company's suppliers and distribution network.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

    The Company is exposed to a variety of market risks, including interest rates and currency exchange rates. The Company attempts to actively manage these risks. See the information under "Management's Discussion and Analysis" on page 30, the "Financial Instruments" note on page 41 and the supplementary data under "Financial Instrument Risk Information" on page 43.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

    See the consolidated financial statements and notes thereto and supplementary data on pages 18 through 24 and 31 through 43.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

    None.

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

    The information regarding directors in the proxy statement dated January 19, 2000 (the "proxy statement"), under the captions "Election of Directors" and "Directors Continuing in Office", is incorporated herein by reference. Information regarding executive officers is presented in Item 1 of this report under the caption "Executive Officers of the Registrant".

ITEM 11.  EXECUTIVE COMPENSATION.

    The information in the proxy statement under the captions "Compensation of Executive Officers" and "Compensation of Directors" is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

(a)

Security ownership of certain beneficial owners.




The information on the security ownership of certain beneficial owners in the proxy statement under the caption "Principal Holders of Voting Securities" is incorporated herein by reference.

(b)

Security ownership of management.




The information on shares of common stock of the Company beneficially owned by, and under option to (i) each director, (ii) certain named executive officers and (iii) the directors and officers as a group, contained in the proxy statement under the captions "Election of Directors", "Directors Continuing in Office", "Named Executive Officers Who Are Not Directors", "Summary Compensation Table" and "Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Values" is incorporated herein by reference.

(c)

Change in control.




None.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

    The information in the proxy statement under the caption "Certain Business Relationships" is incorporated herein by reference.

PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

		Page
(a) (1)	Financial Statements
	Statement of Consolidated Income for the years ended October 31, 1999, 1998 and 1997	18
	Consolidated Balance Sheet, October 31, 1999 and 1998	20
	Statement of Consolidated Cash Flows for the years ended October 31, 1999, 1998 and 1997	22
	Statement of Changes in Consolidated Stockholders' Equity for the years ended October 31, 1999, 1998 and 1997.	24
	Notes to Consolidated Financial Statements	31
(a) (2)	Schedule to Consolidated Financial Statements
	Schedule II—Valuation and Qualifying Accounts for the years ended October 31, 1999, 1998 and 1997	48
(a) (3)	Exhibits
	See the "Index to Exhibits" on pages 49 and 50 of this report.
	Certain instruments relating to long-term borrowings, constituting less than 10 percent of registrant's total assets, are not filed as exhibits herewith pursuant to Item 601(b)4(iii)(A) of Regulation S-K. Registrant agrees to file copies of such instruments upon request of the Commission.
(b)	Reports on Form 8-K.
	Current reports on Form 8-K dated August 17, 1999 (Item 7).
	Financial Statement Schedules Omitted
	The following schedules for the Company and consolidated subsidiaries are omitted because of the absence of the conditions under which they are required: I, III, IV and V.

DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME

	CONSOLIDATED (Deere & Company and Consolidated Subsidiaries)								EQUIPMENT OPERATIONS (Deere & Company with Financial Services on the Equity Basis)							FINANCIAL SERVICES
	Year Ended October 31								Year Ended October 31							Year Ended October 31
	1999			1998		1997			1999		1998		1997			1999			1998		1997
	(in millions of dollars except per share amounts)
Net Sales and Revenues
Net sales of equipment	$	9,701.2		$	11,925.8	$	11,081.7		$	9,701.2	$	11,925.8	$	11,081.7
Finance and interest income		1,104.4			1,007.1		867.4			92.5		131.1		114.8		$	1,027.1		$	887.0	$	757.6
Insurance and health care premiums		716.1			692.9		668.1										741.9			720.8		697.2
Investment income		61.4			73.1		67.2			1.1							60.3			73.1		67.2
Other income		167.8			122.6		107.0			86.1		40.4		47.6			110.2			85.9		63.1
Total		11,750.9			13,821.5		12,791.4			9,880.9		12,097.3		11,244.1			1,939.5			1,766.8		1,585.1
Costs and Expenses
Cost of goods sold		8,177.5			9,233.7		8,481.1			8,193.1		9,252.7		8,499.3
Research and development expenses		458.4			444.4		412.3			458.4		444.4		412.3
Selling, administrative and general expenses		1,362.1			1,309.4		1,320.7			953.6		932.5		940.3			411.4			382.8		388.9
Interest expense		556.6			519.4		422.2			161.9		128.0		80.8			409.9			402.3		346.4
Insurance and health care claims and benefits		594.9			579.0		554.0										602.8			585.8		560.2
Other operating expenses		236.3			175.6		94.0			28.6		50.4		19.5			235.6			125.2		74.4
Total		11,385.8			12,261.5		11,284.3			9,795.6		10,808.0		9,952.2			1,659.7			1,496.1		1,369.9
Income of Consolidated Group before Income Taxes		365.1			1,560.0		1,507.1			85.3		1,289.3		1,291.9			279.8			270.7		215.2
Provision for income taxes		134.7			553.9		550.9			42.1		458.1		475.2			92.6			95.8		75.7
Income of Consolidated Group		230.4			1,006.1		956.2			43.2		831.2		816.7			187.2			174.9		139.5
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Credit		(.3	)		.1		(1.4	)		174.9		162.8		147.2			(.3	)		.1		(1.4	)
Other		9.1			15.2		5.3			21.1		27.4		(3.8	)		.1			.2
Total		8.8			15.3		3.9			196.0		190.2		143.4			(.2	)		.3		(1.4	)
Net Income	$	239.2		$	1,021.4	$	960.1		$	239.2	$	1,021.4	$	960.1		$	187.0		$	175.2	$	138.1
Per Share Data
Net income—basic	$	1.03		$	4.20	$	3.78
Net income—diluted	$	1.02		$	4.16	$	3.74
Dividends declared	$	.88		$	.88	$	.80

The "Consolidated" (Deere & Company and Consolidated Subsidiaries) data in this statement conform with the requirements of FASB Statement No. 94. In the supplemental consolidating data in this statement, "Equipment Operations" (Deere & Company with Financial Services on the Equity Basis) reflect the basis of consolidation described on page 31 of the notes to the consolidated financial statements. The consolidated group data in the "Equipment Operations" income statement reflect primarily the results of the agricultural equipment, construction equipment and commercial and consumer equipment operations. The supplemental "Financial Services" consolidating data in this statement includes primarily Deere & Company's credit operations. Transactions between the "Equipment Operations" and "Financial Services" have been eliminated to arrive at the "Consolidated" data.

The notes to consolidated financial statements on pages 31 through 43 are an integral part of this statement.

DEERE & COMPANY
CONSOLIDATED BALANCE SHEET

	CONSOLIDATED (Deere & Company and Consolidated Subsidiaries)						EQUIPMENT OPERATIONS (Deere & Company with Financial Services on the Equity Basis)						FINANCIAL SERVICES
	October 31						October 31						October 31
	1999			1998			1999			1998			1999			1998
	(In millions of dollars except per share amounts)
ASSETS
Cash and short-term investments	$	295.5		$	309.7		$	111.7		$	68.3		$	183.8		$	241.5
Cash deposited with unconsolidated subsidiaries								117.4			139.6
Cash and cash equivalents		295.5			309.7			229.1			207.9			183.8			241.5
Marketable securities		315.5			867.3			205.3						110.1			867.3
Receivables from unconsolidated subsidiaries and affiliates		30.2			36.2			266.0			95.5			4.8
Trade accounts and notes receivable—net		3,251.1			4,059.2			3,251.1			4,059.2
Financing receivables—net		6,742.6			6,332.7			118.4			85.8			6,624.2			6,246.9
Other receivables		273.9			536.8			129.4			139.4			144.5			397.3
Equipment on operating leases—net		1,654.7			1,209.2			2.6			218.6			1,652.2			990.6
Inventories		1,294.3			1,286.7			1,294.3			1,286.7
Property and equipment—net		1,782.3			1,700.3			1,738.8			1,653.9			43.5			46.4
Investments in unconsolidated subsidiaries and affiliates		151.5			172.0			1,362.8			1,620.4			9.9			20.3
Intangible assets—net		295.1			217.6			294.8			210.1			.3			7.6
Prepaid pension costs		619.9			674.3			619.9			674.3
Other assets		185.5			109.7			95.7			78.3			89.8			31.4
Deferred income taxes		598.1			396.3			592.9			372.6			5.2			23.7
Deferred charges		88.0			93.5			80.8			63.3			7.2			30.1
Total	$	17,578.2		$	18,001.5		$	10,281.9		$	10,766.0		$	8,875.5		$	8,903.1
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Short-term borrowings	$	4,488.2		$	5,322.1		$	642.2		$	1,512.4		$	3,846.0		$	3,809.7
Payables to unconsolidated subsidiaries and affiliates		15.5			31.1			15.5			43.0			358.1			187.0
Accounts payable and accrued expenses		2,432.8			2,853.2			1,891.9			2,098.1			540.8			755.1
Insurance and health care claims and reserves		55.4			411.3									55.4			411.3
Accrued taxes		144.8			144.9			138.1			142.1			6.8			2.8
Deferred income taxes		63.0			19.7			7.2			19.7			55.8
Long-term borrowings		3,806.2			2,791.7			1,036.1			552.9			2,770.1			2,238.8
Retirement benefit accruals and other liabilities		2,478.0			2,347.7			2,456.6			2,318.0			21.3			29.7
Total liabilities		13,483.9			13,921.7			6,187.6			6,686.2			7,654.3			7,434.4
STOCKHOLDERS' EQUITY
Common stock, $1 par value (authorized—600,000,000 shares; issued—265,760,670 shares in 1999 and 263,852,871 shares in 1998), at stated value		1,850.4			1,789.8			1,850.4			1,789.8			229.1			237.1
Common stock in treasury, 31,995,775 shares in 1999 and 31,542,845 shares in 1998, at cost		(1,469.4	)		(1,467.6	)		(1,469.4	)		(1,467.6	)
Unamortized restricted stock compensation		(21.3	)		(7.2	)		(21.3	)		(7.2	)
Retained earnings		3,855.3			3,839.5			3,855.3			3,839.5			1,005.6			1,223.2
Total		4,215.0			4,154.5			4,215.0			4,154.5			1,234.7			1,460.3
Minimum pension liability adjustment		(18.9	)		(18.7	)		(18.9	)		(18.7	)
Cumulative translation adjustment		(107.4	)		(80.5	)		(107.4	)		(80.5	)		(15.0	)		(16.1	)
Unrealized gain on marketable securities.		5.6			24.5			5.6			24.5			1.5			24.5
Accumulated other comprehensive income (loss)		(120.7	)		(74.7	)		(120.7	)		(74.7	)		(13.5	)		8.4
Total stockholders' equity		4,094.3			4,079.8			4,094.3			4,079.8			1,221.2			1,468.7
Total	$	17,578.2		$	18,001.5		$	10,281.9		$	10,766.0		$	8,875.5		$	8,903.1

The "Consolidated" (Deere & Company and Consolidated Subsidiaries) data in this statement conform with the requirements of FASB Statement No. 94. In the supplemental consolidating data in this statement, "Equipment Operations" (Deere & Company with Financial Services on the Equity Basis) reflect the basis of consolidation described on page 31 of the notes to the consolidated financial statements. The supplemental "Financial Services" consolidating data in this statement includes primarily Deere & Company's credit operations. Transactions between the "Equipment Operations" and "Financial Services" have been eliminated to arrive at the "Consolidated" data.

The notes to consolidated financial statements on pages 31 through 43 are an integral part of this statement.

DEERE & COMPANY
STATEMENT OF CONSOLIDATED CASH FLOWS

	CONSOLIDATED (Deere & Company and Consolidated Subsidiaries)									EQUIPMENT OPERATIONS (Deere & Company with Financial Services on the Equity Basis)									FINANCIAL SERVICES
	Year Ended October 31									Year Ended October 31									Year Ended October 31
	1999			1998			1997			1999			1998			1997			1999			1998			1997
	(in millions of dollars)
Cash Flows from Operating Activities
Net income	$	239.2		$	1,021.4		$	960.1		$	239.2		$	1,021.4		$	960.1		$	187.0		$	175.2		$	138.1
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for doubtful receivables		73.5			57.0			51.0			5.6			6.4			12.8			67.9			50.6			38.2
Provision for depreciation		513.3			418.0			365.6			269.9			282.6			272.0			243.4			135.4			93.5
Undistributed earnings of unconsolidated subsidiaries and affiliates		(3.7	)		(9.7	)		(.3	)		(115.3	)		(127.9	)		(3.0	)		(.4	)		(.2	)		1.5
Provision (credit) for deferred income taxes		(162.4	)		141.9			(6.9	)		(203.2	)		115.3			(4.6	)		40.8			26.6			(2.4	)
Changes in assets and liabilities:
Receivables		802.3			(724.6	)		(175.2	)		802.4			(739.1	)		(232.8	)					14.4			57.7
Inventories		50.7			(192.6	)		(255.2	)		50.7			(192.6	)		(255.2	)
Accounts payable and accrued expenses		(170.8	)		(40.7	)		186.3			(172.1	)		(70.0	)		198.2			1.3			29.3			(11.9	)
Insurance and health care claims and reserves		(8.5	)		(3.5	)		(22.9	)											(8.5	)		(3.5	)		(22.9	)
Retirement benefit accruals		215.7			(84.9	)		41.0			222.0			(82.9	)		26.7			(6.3	)		(2.1	)		14.2
Other		(114.8	)		(165.4	)		13.2			(24.1	)		(101.3	)		31.7			(90.7	)		(63.9	)		(18.4	)
Net cash provided by operating activities		1,434.5			416.9			1,156.7			1,075.1			111.9			1,005.9			434.5			361.8			287.6
Cash Flows from Investing Activities
Collections of financing receivables		6,017.1			5,685.3			5,324.1			23.0			36.1			55.4			5,994.1			5,649.2			5,268.7
Proceeds from sales of financing receivables		2,481.6			1,859.9			968.0									.1			2,481.6			1,859.9			967.9
Proceeds from maturities and sales of marketable securities		115.4			187.3			226.0												115.4			187.3			226.0
Proceeds from sales of equipment on operating leases		191.3			154.5			101.9						65.7			48.8			191.3			88.8			53.1
Proceeds from sale of a business		179.1									179.1
Cost of financing receivables acquired		(8,186.2	)		(7,521.5	)		(6,805.0	)		(50.8	)		(41.0	)		(36.4	)		(8,135.4	)		(7,480.5	)		(6,768.6	)
Purchases of marketable securities		(92.9	)		(224.9	)		(166.7	)											(92.9	)		(224.9	)		(166.7	)
Purchases of property and equipment		(315.5	)		(434.8	)		(484.9	)		(304.4	)		(421.6	)		(473.8	)		(11.1	)		(13.1	)		(11.2	)
Cost of operating leases acquired		(833.5	)		(752.3	)		(540.8	)		(2.7	)		(123.5	)		(111.4	)		(830.8	)		(628.8	)		(429.4	)
Acquisitions of businesses		(215.8	)		(103.0	)		(45.7	)		(151.9	)		(95.9	)		(37.2	)		(63.9	)		(7.2	)		(8.5	)
Other		7.6			27.6			39.0			19.7			13.3			2.0			(12.2	)		15.6			8.0
Net cash used for investing activities		(651.8	)		(1,121.9	)		(1,384.1	)		(288.0	)		(566.9	)		(552.5	)		(363.9	)		(553.7	)		(860.7	)
Cash Flows from Financing Activities
Increase (decrease) in short-term borrowings		(1,650.7	)		802.3			524.5			(961.9	)		1,184.8			(2.8	)		(688.8	)		(382.5	)		527.3
Change in intercompany receivables/payables											(32.5	)		(15.0	)		55.5			10.2			(195.4	)		(250.4	)
Proceeds from long-term borrowings		2,902.1			2,067.6			1,150.0			499.8			199.4						2,402.3			1,868.2			1,150.0
Principal payments on long-term borrowings		(1,796.2	)		(1,106.4	)		(816.8	)		(19.1	)		(38.9	)		(128.0	)		(1,777.0	)		(1,067.5	)		(688.8	)
Proceeds from issuance of common stock		4.2			22.7			34.8			4.2			22.7			34.8									29.0
Repurchases of common stock		(49.0	)		(885.9	)		(419.1	)		(49.0	)		(885.9	)		(419.1	)
Dividends paid		(205.4	)		(212.4	)		(204.3	)		(205.4	)		(212.4	)		(204.3	)		(75.0	)		(56.8	)		(136.8	)
Other		(.1	)		(1.2	)		(.2	)		(.2	)		(1.1	)		(.2	)					(1.3	)
Net cash provided by (used for) financing activities		(795.1	)		686.7			268.9			(764.1	)		253.6			(664.1	)		(128.3	)		164.7			630.3
Effect of Exchange Rate Changes on Cash		(1.8	)		(2.0	)		(3.0	)		(1.8	)		(1.9	)		(2.9	)					(.1	)
Net Increase (Decrease) in Cash and Cash Equivalents		(14.2	)		(20.3	)		38.5			21.2			(203.3	)		(213.6	)		(57.7	)		(27.3	)		57.2
Cash and Cash Equivalents at Beginning of Year		309.7			330.0			291.5			207.9			411.2			624.8			241.5			268.8			211.6
Cash and Cash Equivalents at End of Year	$	295.5		$	309.7		$	330.0		$	229.1		$	207.9		$	411.2		$	183.8		$	241.5		$	268.8

The "Consolidated" (Deere & Company and Consolidated Subsidiaries) data in this statement conform with the requirements of FASB Statement No. 94. In the supplemental consolidating data in this statement, "Equipment Operations" (Deere & Company with Financial Services on the Equity Basis) reflect the basis of consolidation described on page 31 of the notes to the consolidated financial statements. The supplemental "Financial Services" consolidating data in this statement includes primarily Deere & Company's credit operations. Transactions between the "Equipment Operations" and "Financial Services" have been eliminated to arrive at the "Consolidated" data.

The notes to consolidated financial statements on pages 31 through 43 are an integral part of this statement.

DEERE & COMPANY
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY

	Total Equity			Common Stock		Treasury Stock			Unamortized Restricted Stock*			Retained Earnings			Other Comprehensive Income (Loss)
	(in millions of dollars)
Balance October 31, 1996	$	3,557.2		$	1,770.1	$	(265.9	)	$	(11.1	)	$	2,299.5		$	(235.4	)
Comprehensive income (loss)
Net income		960.1											960.1
Other comprehensive income
Minimum pension liability adjustment		221.4														221.4
Cumulative translation adjustment		(43.4	)													(43.4	)
Unrealized gain on marketable securities		8.2														8.2
Total comprehensive income		1,146.3
Repurchases of common stock		(419.1	)				(419.1	)
Treasury shares reissued		71.9					71.9
Dividends declared		(202.1	)										(202.1	)
Other stockholder transactions		(7.0	)		8.4					(6.3	)		(9.1	)
Balance October 31, 1997		4,147.2			1,778.5		(613.1	)		(17.4	)		3,048.4			(49.2	)
Comprehensive income (loss)
Net income		1,021.4											1,021.4
Other comprehensive income
Minimum pension liability adjustment		(4.7	)													(4.7	)
Cumulative translation adjustment		(23.1	)													(23.1	)
Unrealized gain on marketable securities		2.3														2.3
Total comprehensive income		995.9
Repurchases of common stock		(885.9	)				(885.9	)
Treasury shares reissued		31.4					31.4
Dividends declared		(213.3	)										(213.3	)
Other stockholder transactions		4.5			11.3					10.2			(17.0	)
Balance October 31, 1998		4,079.8			1,789.8		(1,467.6	)		(7.2	)		3,839.5			(74.7	)
Comprehensive income (loss)
Net income		239.2											239.2
Other comprehensive income
Minimum pension liability adjustment		(.2	)													(.2	)
Cumulative translation adjustment		(26.9	)													(26.9	)
Unrealized loss on marketable securities		(18.9	)													(18.9	)
Total comprehensive income		193.2
Repurchases of common stock		(49.0	)				(49.0	)
Treasury shares reissued		47.2					47.2
Dividends declared		(204.2	)										(204.2	)
Other stockholder transactions		27.3			60.6					(14.1	)		(19.2	)
Balance October 31, 1999	$	4,094.3		$	1,850.4	$	(1,469.4	)	$	(21.3	)	$	3,855.3		$	(120.7	)

The notes to consolidated financial statements on pages 31 through 43 are an integral part of this statement.

*Unamortized restricted stock includes restricted stock issued at market price net of amortization to compensation expense.

MANAGEMENT'S DISCUSSIONAND ANALYSIS (Unaudited)

RESULTS OF OPERATIONS FOR THE YEARS ENDED OCTOBER 31, 1999, 1998 AND 1997

    Deere & Company and its subsidiaries manufacture, distribute and finance a full line of agricultural equipment; a broad range of equipment for construction and forestry; a variety of commercial and consumer equipment; and other technological products and services. The company also provides credit services and managed health care plans. Additional information on these business segments is presented beginning on page 31.

1999 COMPARED WITH 1998

CONSOLIDATED RESULTS

    Net income in 1999 totaled $239 million, or $1.02 per share diluted ($1.03 basic), compared with $1,021 million, or $4.16 per share diluted ($4.20 basic), in 1998. The decline in profits was largely due to a continuation of weak demand for agricultural equipment caused by depressed farm commodity prices. Cash flow from operations, however, was higher due to a reduction in agricultural equipment receivables of approximately $800 million, and a decline in construction equipment receivables of approximately $200 million. During the year, the company implemented aggressive production schedule reductions in order to help balance receivables and inventories with forecasted levels of demand.

    Net sales and revenues decreased 15 percent to $11,751 million in 1999, compared with $13,822 million in 1998. Net sales of the Equipment Operations decreased 19 percent in 1999 to $9,701 million from $11,926 million last year. Overseas net sales were $2,678 million for the year, compared with $3,049 million in 1998. Overall, the company's worldwide physical volume of sales decreased 18 percent for the year.

    The company's Equipment Operations, which exclude the Financial Services operations, had operating profit of $272 million in 1999, compared with $1,476 million in 1998. Lower sales and production volumes of agricultural and construction equipment, an adverse sales mix and the cost of early-retirement programs affected the 1999 results. Largely due to the reduction in agricultural and construction trade receivables, equipment operations' assets ended the year at $8,702 million, 4 percent below the previous year.

    Net income of the company's Financial Services operations improved in 1999 totaling $187 million, compared with $175 million in 1998. Finance and interest income increased to $1,027 million in 1999, compared with $887 million last year. Additional information for the credit operations is presented on pages 28 and 29.

BUSINESS SEGMENT AND GEOGRAPHIC AREA RESULTS

    In 1999, the company adopted FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information. Consequently, the operating segments have been redefined to coincide with internal management reporting and previously reported operating results have been restated. The following discussion of operating results by reportable segment and geographic area relates to information beginning on page 31. Operating profit is income before interest expense, foreign exchange gains and losses, income taxes and corporate expenses. However, operating profit of the credit segment includes the effect of interest expense.

1999 NET SALES AND REVENUES BY BUSINESS SEGMENT
[PIE CHART APPEARS HERE]

Agricultural Equipment 44%
Commercial and Consumer Equipment 23%
Construction Equipment 16%
Credit 10%
Other 7%

WORLDWIDE AGRICULTURAL EQUIPMENT
[BAR CHART APPEARS HERE]

	97		98		99			97		98		99
Net Sales (in billions)	$	7.3	$	7.5	$	5.1	Operating Profit (Loss) (in millions)	$	1,048	$	941	$	(51	)

     The agricultural equipment segment incurred an operating loss of $51 million in 1999, compared with an operating profit of $941 million in 1998. Lower sales and production volumes, especially of high-horsepower, high-margin agricultural equipment, were primary reasons for the loss as sales decreased 31 percent in 1999, compared with 1998. Lower production volumes, however, have helped achieve a substantial reduction in trade receivables and improved cash flow. Results were also affected by the $68 million pretax cost of early-retirement programs and higher sales incentive costs, with an emphasis on used goods. Overseas operations, which experienced a more moderate decline in sales than in North America, continued to be positive contributors to the segment's results. These operations, as well, are benefitting from increased market shares and strong response to innovative products.

WORLDWIDE CONSTRUCTION EQUIPMENT
[BAR CHART APPEARS HERE]

	97		98		99			97		98		99
Net Sales (in billions)	$	2.0	$	2.3	$	1.9	Operating Profit (in millions)	$	245	$	326	$	149

     The construction equipment segment had an operating profit of $149 million in 1999, compared to $326 million in 1998. Sales decreased 18 percent in 1999, compared to last year. During the early part of 1999, the segment began implementation of its Estimate to Cash order-fulfillment initiative, which is aimed at better matching product availability with customer requirements, while reducing field inventories. Although retail sales remained at favorable levels, company sales and production volumes declined as dealers reduced field inventories largely due to this initiative. The reduction, however, also reflects a weaker business outlook. In addition, the 1999 results were affected by higher sales incentive costs.

WORLDWIDE COMMERCIAL AND CONSUMER EQUIPMENT
[BAR CHART APPEARS HERE]

	97		98		99			97		98		99
Net Sales (in billions)	$	1.8	$	2.2	$	2.6	Operating Profit (in millions)	$	115	$	213	$	213

     The commercial and consumer equipment segment had an operating profit of $213 million in 1999 and 1998. The 1999 results benefited from a 21 percent increase in sales and higher production volumes driven by strong retail demand and market-share gains, offset by higher expenses for the development and introduction of new products and the start-up of new facilities.

WORLDWIDE CREDIT OPERATIONS
[BAR CHART APPEARS HERE]

	97		98		99			97		98		99
Revenues (in billions)	$	.8	$	1.0	$	1.1	Operating Profit (in millions)	$	232	$	256	$	274

     The operating profit of the credit operations improved to $274 million in 1999, compared with $256 million in 1998. Additional credit operations information is discussed on pages 28 and 29.

    The company's other operations had an aggregate operating loss of $33 million for the year, compared with an operating profit of $11 million in 1998. These results reflected start-up costs and goodwill amortization at the newly formed John Deere Special Technologies Group, which encompasses communications, electronics, software and Internet-related products and services. Additionally, losses were incurred in the insurance subsidiaries, which were sold during the year. Partly offsetting these factors were higher earnings from the company's health care operations.

UNITED STATES AND CANADA EQUIPMENT OPERATIONS
[BAR CHART APPEARS HERE]

	97		98		99			97		98		99
Net Sales (in billions)	$	8.0	$	8.9	$	7.0	Operating Profit (in millions)	$	1,101	$	1,177	$	48

    The United States and Canadian equipment operations had an operating profit of $48 million in 1999, compared with $1,177 million last year. The decrease was primarily due to significantly lower sales and production volumes of agricultural and construction equipment, and early-retirement program costs. Sales decreased 21 percent in 1999 and the physical volume of sales decreased 19 percent, compared with last year.

OVERSEAS EQUIPMENT OPERATIONS
[BAR CHART APPEARS HERE]

	97		98		99			97		98		99
Net Sales (in billions)	$	3.1	$	3.0	$	2.7	Operating Profit (in millions)	$	301	$	299	$	224

    The overseas equipment operations had an operating profit of $224 million in 1999, compared with $299 million last year, primarily due to lower sales and production volumes. As previously mentioned, the decline in overseas sales has been more moderate than in North America. In addition, these operations benefited from increased market shares and strong customer reception to innovative products. Overseas sales were 12 percent lower than last year, while the physical volume of sales decreased 13 percent in 1999, compared with 1998.

MARKET CONDITIONS AND OUTLOOK

Agricultural Equipment

    As a result of continued weakness in farm commodity prices, industry retail sales of farm machinery in North America are currently expected to be off by 5 to 10 percent next year. Declines of a similar nature are expected in other major markets. At the same time, farmers are in relatively good financial condition due to higher government payments. In light of this outlook, the company has adopted a cautious approach, expecting sales and production volumes to trail prior-year levels early in 2000, but to be higher for the full year. The anticipated rise in sales is due to production being increased to track more closely with retail demand than in 1999. Sales are also expected to benefit from a positive response to several important new products.

Construction Equipment

    Although higher interest rates are expected to result in a moderate slowdown in industry sales next year, the company expects to have higher sales in the year 2000 due largely to an expanded product line. Company sales in the early part of the year, however, are expected to be lower as a result of a continuation of dealer inventory adjustments. Made in conjunction with the Estimate to Cash initiative, these reductions place the company in a favorable inventory position going into the following year. Industry inventory levels, however, are a source of concern with respect to price realization.

Commercial and Consumer Equipment

    Following strong gains this year, retail demand for the company's commercial and consumer equipment is expected to achieve further growth next year, assuming normal weather patterns and a continuation of current economic conditions. These operations are expected to benefit from market-share growth, positive customer response to new products and continued international expansion.

Credit Operations

    Credit should continue to benefit from a larger receivable and lease portfolio next year. However, higher growth expenditures, lower gains on the sale of retail notes and a weakened agricultural economy are expected to keep pressure on margins and bring about a sizeable reduction in overall results.

    Based on these conditions, the company's worldwide physical volume of sales is currently expected to increase by approximately 10 percent for the year 2000. First-quarter physical volumes are expected to be slightly higher than in the comparable 1999 period. However, the mix of sales is expected to deteriorate and put significant downward pressure on profits for the quarter.

    Despite the lower 1999 results, the company has put itself in position to benefit from an upturn in the farm economy, whenever it occurs. At the same time, the company remains on track with its product development plans, and numerous growth, quality, technology and Internet-related initiatives. In addition, the company fulfilled its 1999 goal of generating strong cash flow and is setting the stage for markedly better results once the agricultural economy starts moving ahead and as other business opportunities take shape.

YEAR 2000

    The company established a global program (the "Year 2000 Program") to address the inability of certain computer and infrastructure systems to process dates in the Year 2000 and later. The major assessment areas included information systems, mainframe and personal computers, software, the distributed network, the shop floor, facilities systems, the company's products, product research and development facilities, and the readiness of the company's suppliers and distribution network.

    All of the company's systems identified as being mission critical have been tested and verified as being Year 2000 ready. The company also assessed the Year 2000 readiness of its product suppliers and dealers and developed contingency plans for its mission critical suppliers. Although there could be some inconveniences, the company believes the dealers will be able to service their customers without any significant disruptions. The total cost of the modifications and upgrades including internal costs has been approximately $43 million pretax since the beginning of 1997. The future costs to complete the Year 2000 Program are expected to be approximately $4 million. These costs are expensed as incurred and do not include the cost of software replaced in the ordinary course of business. Other major systems projects have not been deferred due to the Year 2000 compliance projects.

    Although no assurances can be given as to the company's readiness at the time of this report, particularly as it relates to third-parties, based upon the progress to date, the company does not expect the consequences of any of the company's unanticipated or unsuccessful modifications to have a material adverse effect on its financial position or results of operations. However, the failure to correct a material Year 2000 problem could result in lost sales or profits. The company believes that its "most reasonably likely worst case scenario" may involve the Year 2000 noncompliance of a critical third party causing that third party to fail to deliver, with the result that production is interrupted at one or more facilities. The company believes this risk is greater outside North America and Europe. The company has developed contingency plans in all of the assessment areas noted above that it believes will mitigate the impact of any interruptions related to the Year 2000.

EURO CONVERSION

    The company is well advanced in the process of identification, implementation and testing of its systems to adopt the euro currency in its operations. The transition period for this change is January 1, 1999 through January 1, 2002. The company's affected suppliers, distribution network and financial institutions have been contacted and to date the currency change has not had a significant impact on these relationships. The cost of information systems modifications, effects on product pricing and purchase contracts, and the impact on foreign currency financial instruments, including derivatives, are not expected to be material.

SAFE HARBOR STATEMENT

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements under the "Market Conditions and Outlook", "Year 2000" and "Euro Conversion" headings, the "Supplemental Information (Unaudited)" on pages 42 and 43 and other statements herein that relate to future operating periods are subject to important risks and uncertainties that could cause actual results to differ materially. Forward-looking statements relating to the company's businesses involve certain factors that are subject to change, including: the many interrelated factors that affect farmers' confidence, including worldwide demand for agricultural products, world grain stocks, commodities prices, weather conditions, real estate values, animal diseases, crop pests, harvest yields, and government farm programs; general economic conditions and housing starts; legislation, primarily legislation relating to agriculture, the environment, commerce and government spending on infrastructure; actions of competitors in the various industries in which the company competes; levels of new and used field inventories, production difficulties, including capacity and supply constraints; dealer practices; labor relations; interest and currency exchange rates (including conversion to the euro); technological difficulties (including Year 2000 readiness); accounting standards; and other risks and uncertainties. Economic difficulties in various parts of the world could continue to adversely affect North American grain and meat exports. The number of housing starts is especially important to sales of construction equipment. Sales of commercial and consumer equipment during the winter are affected by the amount and timing of snowfall. The company's outlook is based upon assumptions relating to the factors described above, which are sometimes based upon estimates and data prepared by government agencies. Such estimates and data are often revised. Further information, including factors that potentially could materially affect the company's financial results, is included in the company's filings with the Securities and Exchange Commission.

1998 COMPARED WITH 1997

CONSOLIDATED RESULTS

    Deere & Company achieved record net income in 1998, totaling $1,021 million, or $4.16 per share diluted ($4.20 basic), compared with income of $960 million, or $3.74 per share diluted ($3.78 basic) in 1997. The Equipment Operations and the Financial Services operations both contributed to the higher level of earnings.

    Net sales and revenues increased 8 percent to a record $13,822 million in 1998, compared with $12,791 million in 1997. Net sales of the Equipment Operations increased 8 percent in 1998 to $11,926 million from $11,082 million in 1997. Export sales from the United States totaled $1,970 million for 1998, compared with $2,013 million in 1997. Overseas sales, which were affected by weaker economic conditions and adverse currency fluctuations, were slightly lower in 1998. Overall, the company's worldwide physical volume of sales increased 8 percent in 1998.

    The company's Equipment Operations, which exclude income from the Financial Services operations and unconsolidated affiliates, had income of $831 million in 1998, compared with $817 million in 1997. The strong performances of the commercial and consumer equipment and construction equipment operations led to the record results. Overall, the improvement was due to higher sales and production volumes, partially offset by higher sales incentive costs, growth expenditures, interest expense and unfavorable currency fluctuations. Operating profit of the Equipment Operations represented 12.4 percent of net sales in 1998, compared to 12.6 percent in 1997.

    Net income of the company's Financial Services operations improved in 1998 totaling $175 million, compared with $138 million in 1997. Finance and interest income increased to $887 million in 1998, compared with $758 million in 1997. Additional information for the credit operations is presented on pages 28 through 29.

BUSINESS SEGMENT RESULTS

    Operating profit of the agricultural equipment segment decreased to $941 million in 1998, compared with $1,048 million in 1997, as a result of higher sales incentive costs, an unfavorable sales mix and inefficiencies associated with production cuts, partially offset by an increase in sales. Agricultural equipment sales increased 2 percent in 1998, compared with 1997. However, during the fourth quarter of 1998, sales of agricultural equipment decreased 18 percent compared with the fourth quarter of 1997, as lower farm commodity prices and weaker farm economic conditions adversely affected retail demand. As a result, the company reduced production of large tractors and combines in order to keep inventories in balance.

    The construction equipment operations generated a significantly higher operating profit of $326 million in 1998, compared to $245 million in 1997. The increased operating profit in 1998 reflected higher sales and production volumes, lower operating expenses and improved operating efficiencies, partially offset by higher sales incentive costs and production start-up expenses at the engine facility in Torreon, Mexico. In 1998, construction equipment sales increased 14 percent, compared with 1997.

    The commercial and consumer equipment segment's operating profit increased significantly to $213 million in 1998, compared with $115 million in 1997, as a result of higher sales and production volumes driven by strong retail demand for the company's products, as well as improved operating efficiencies. Partially offsetting these benefits were higher expenses for the promotion of new products and the start-up of new facilities. The results in 1997 were adversely affected by write-offs related to the Homelite product line. Commercial and consumer equipment sales increased 22 percent in 1998, compared with 1997.

    The operating profit of the credit operations improved to $256 million in 1998, compared with $232 million in 1997. The credit operations are discussed on pages 28 and 29.

CREDIT OPERATIONS

    The credit operations primarily finance sales and leases by John Deere dealers of new and used agricultural, construction and commercial and consumer equipment, and sales by non-Deere dealers of recreational products. In addition, these operations provide wholesale financing to dealers of the foregoing equipment and finance retail revolving charge accounts.

    Condensed combined financial information of the credit operations in millions of dollars follows:

	October 31
Financial Position
	1999		1998
Cash and cash equivalents	$	149	$	191
Financing receivables and leases:
Equipment retail notes		3,962		3,658
Recreational product retail notes		253		684
Revolving charge accounts		918		764
Wholesale notes		1,052		894
Financing leases		532		336
Equipment on operating leases		1,652		991
Total financing receivables and leases		8,369		7,327
Less allowance for credit losses		93		90
Total—net		8,276		7,237
Other receivables		108		173
Net property and other assets		125		73
Total assets	$	8,658	$	7,674
Short-term borrowings	$	3,846	$	3,810
Payables to Deere & Company		318		144
Deposits withheld from dealers and merchants		139		176
Other liabilities		433		288
Long-term borrowings		2,770		2,239
Stockholder's equity		1,152		1,017
Total liabilities and stockholder's equity	$	8,658	$	7,674

	Year Ended October 31
Summary of Operations
	1999		1998		1997
Revenues	$	1,137	$	973	$	820
Expenses:
Interest		408		400		346
Selling, administrative and general		152		142		129
Provision for credit losses		68		50		38
Depreciation and other		234		125		74
Total		862		717		587
Income of consolidated group before income taxes		275		256		233
Provision for income taxes		100		93		85
Income of consolidated group		175		163		148
Equity in losses of unconsolidated affiliates						(1	)
Net income	$	175	$	163	$	147
Ratio of earnings to fixed charges		1.66		1.63		1.67

    Acquisition volumes of financing receivables and leases increased 8 percent in 1999, compared with 1998. The volumes of revolving charge accounts, wholesale notes, leases and retail notes increased 13 percent, 11 percent, 8 percent and 5 percent, respectively, driven primarily by the growth in construction equipment leasing and retail notes and agricultural revolving charge accounts. The credit operations also sold retail notes receiving proceeds of $2,482 million during 1999, compared with $1,860 million last year. At October 31, 1999 and 1998, net financing receivables and leases administered, which include receivables previously sold but still administered, were $10,992 million and $9,625 million, respectively. The discussion of "Financing Receivables" on pages 36 and 37 presents additional information.

    Net income of the credit operations was $175 million in 1999, compared with $163 million in 1998 and $147 million in 1997. Net income in 1999 was higher than in 1998 due primarily to higher earnings from a larger average receivable and lease portfolio, a reduction in leverage and a gain on the sale of the yacht retail note portfolio and related intangibles, partially offset by higher receivable write-offs, lower financing spreads and higher operating expenses. Total revenues of the credit operations increased in 1999, reflecting the larger average portfolio, compared with 1998. The average balance of receivables and leases financed was 6 percent higher in 1999, compared with 1998. Higher average borrowings in 1999 resulted in a small increase in interest expense, compared with 1998.

    Net income in 1998 was higher than in 1997 due primarily to higher earnings from a larger average receivable and lease portfolio and higher gains from the sales of retail notes, partially offset by higher operating expenses. Total revenues of the credit operations increased 19 percent in 1998, reflecting the larger average portfolio, compared with 1997. The average balance of receivables and leases financed was 13 percent higher in 1998, compared with 1997. Higher average borrowings in 1998 resulted in a 16 percent increase in interest expense, compared with 1997.

CAPITAL RESOURCES AND LIQUIDITY

    The discussion of capital resources and liquidity has been organized to review separately, where appropriate, the company's Equipment Operations, Financial Services operations and the consolidated totals.

EQUIPMENT OPERATIONS

    The company's equipment businesses are capital intensive and are subject to large seasonal variations in financing requirements for receivables from dealers and inventories. Accordingly, to the extent necessary, funds provided by operations are supplemented from external borrowing sources.

[BAR CHART APPEARS HERE]

	97		98		99
Equipment Operations
(in millions)
Cash Provided by Operations	$	1,006	$	112	$	1,075
Purchases of Property and Equipment	$	474	$	422	$	304
Repurchases of Common Stock	$	419	$	886	$	49

    Cash provided by operating activities during 1999 was $1,075 million, primarily resulting from the significant decrease in trade receivables and from net income. The operating cash flows and proceeds from the sale of a business of $179 million were used primarily to fund a decrease in borrowings of $481 million, purchases of property and equipment of $304 million, the payment of dividends to stockholders of $205 million, acquisitions of businesses for $152 million and an increase in cash and cash equivalents.

    Over the last three years, operating activities have provided an aggre gate of $2,193 million in cash. In addition, borrowings increased $733 million and cash and cash equivalents decreased $396 million. The aggregate amount of these cash flows was used mainly to fund repurchases of common stock of $1,354 million, purchases of property and equipment of $1,200 million, stockholders' dividends of $622 million and acquisitions of businesses for $285 million.

    Trade accounts and notes receivable result mainly from sales to dealers of equipment that is being carried in their inventories. Trade receivables decreased by $808 million during 1999. North American agricultural equipment trade receivables decreased $753 million and construction equipment receivables decreased $206 million, while commercial and consumer equipment receivables increased $182 million and other equipment receivables increased $12 million. Total overseas equipment receivables were $43 million lower than one year ago. Agricultural equipment receivables decreased significantly in 1999 due to the aggressive production schedule reductions implemented by the company in order to help balance the levels of receivables with forecasted demand. Construction equipment receivables declined due to the Estimate to Cash order-fulfillment initiative. Commercial and consumer equipment receivables are higher than a year ago to support increased retail sales. The ratios of worldwide trade accounts and notes receivable at October 31 to fiscal year net sales were 34 percent in 1999, compared with 34 percent in 1998 and 30 percent in 1997. Although receivables decreased significantly in 1999, the ratio was also affected by the decrease in net sales.

    The collection period for trade receivables averages less than 12 months. The percentage of receivables outstanding for a period exceeding 12 months was 12 percent at October 31, 1999, compared with 8 percent at October 31, 1998 and 5 percent at October 31, 1997.

    Company-owned inventories were approximately the same in 1999 as in 1998.

    Total interest-bearing debt of the Equipment Operations was $1,678 million at the end of 1999, compared with $2,065 million at the end of 1998 and $711 million at the end of 1997. The ratio of total debt to total capital (total interest-bearing debt and stockholders' equity) at the end of 1999, 1998 and 1997 was 29.1 percent, 33.6 percent and 14.6 percent, respectively.

    During 1999, Deere & Company issued $250 million of 6.55% notes due in 2004 and $250 million of medium-term notes.

FINANCIAL SERVICES

    The Financial Services' credit operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. Their primary sources of funds for this purpose are a combination of borrowings and equity capital. Additionally, the credit operations periodically sell substantial amounts of retail notes.

    Cash flows from the company's Financial Services operating activities were $435 million in 1999. The cash provided by operating activities was used primarily to increase total receivables and leases. Cash used for investing activities totaled $364 million in 1999, primarily due to acquisitions of receivables and leases exceeding collections by $2,972 million, which was partially offset by proceeds of $2,482 million from the sale of receivables and $191 million from the sale of equipment on operating leases. Acquisitions of businesses also totaled $64 million in the current year. Cash used for financing activities totaled $128 million in 1999, representing mainly a decrease in total borrowings of $53 million and $75 million of dividends paid to the Equipment Operations.

    Over the past three years, the Financial Services operating activities have provided $1,084 million in cash. In addition, the sale of receivables and an increase in borrowings have provided $5,309 million and $908 million, respectively. These amounts have been used mainly to fund receivable and lease acquisitions, which exceeded collections by $7,362 million.

    Marketable securities held by Financial Services decreased $757 million during 1999 primarily due to the sale of the insurance subsidiaries and the transfer of securities to Deere & Company before the sale. The remaining portfolio consists of the securities held by the Financial Services' health care subsidiaries and those transferred to Deere & Company. Additional information is presented on pages 35 and 36.

    Financing receivables and leases increased by $1,039 million in 1999, compared with 1998. The discussion of "Credit Operations" on pages 28 and 29 provides further information.

    Total outside interest-bearing debt of the credit operations was $6,616 million at the end of 1999, compared with $6,049 million at the end of 1998 and $5,686 million at the end of 1997. The credit subsidiaries' ratio of total interest-bearing debt to total stockholder's equity was 6.0 to 1 at the end of 1999, compared with 6.1 to 1 at the end of 1998 and 6.6 to 1 at the end of 1997.

    During 1999, the credit operations issued $300 million of 6% notes due in 2009 and $300 million of 7% notes due in 2002. These operations also retired $150 million of 9⁵/8% subordinated notes, $97 million of 5% Swiss franc bonds, $200 million of 6% notes, $200 million of 6.3% notes and $99 million of other miscellaneous notes all due in 1999. The credit operations also issued $1,804 million and retired $1,031 million of medium-term notes in 1999.

CONSOLIDATED

    The company maintains unsecured lines of credit with various United States and foreign banks. The discussion of "Short-Term Borrowings" on page 38 provides further information.

    The company is naturally exposed to various interest rate and foreign currency risks. As a result, the company enters into derivative transactions to hedge certain of these exposures that arise in the normal course of business, and not for the purpose of creating speculative positions or trading. Similar to other large credit companies, the company's credit operations actively manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate fluctuations, while responding to favorable financing opportunities. Accordingly, from time to time, these operations enter into interest rate swap agreements to hedge their interest rate exposure. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling and financing in currencies other than the local currencies. The company has entered into agreements related to the management of these currency transaction risks. The credit and market risks under these interest rate and foreign currency agreements are not considered to be significant. Additional detailed financial instrument information is included on pages 41 through 43.

    Stockholders' equity was $4,094 million at October 31, 1999, compared with $4,080 million and $4,147 million at October 31, 1998 and 1997, respectively. The increase in 1999 was caused primarily by net income of $239 million, partially offset by cash dividends declared of $204 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    The consolidated financial statements represent the consolidation of all companies in which Deere & Company has a majority ownership. Deere & Company records its investment in each unconsolidated affiliated company (20 to 50 percent ownership) at its related equity in the net assets of such affiliate. Other investments (less than 20 percent ownership) are recorded at cost. Consolidated retained earnings at October 31, 1999 include undistributed earnings of the unconsolidated affiliates of $58 million. Dividends from unconsolidated affiliates were $6 million in 1999, $6 million in 1998 and $4 million in 1997.

    The company's consolidated financial statements and some information in the notes and related commentary are presented in a format which includes data grouped as follows:

Equipment Operations—These data include the company's agricultural equipment, construction equipment, commercial and consumer equipment and special technologies operations with Financial Services reflected on the equity basis. Data relating to the above equipment operations, including the consolidated group data in the income statement, are also referred to as "Equipment Operations" in this report.

Financial Services—These data include the company's credit, insurance and health care operations The insurance operations were sold in the fourth quarter of 1999.

Consolidated—These data represent the consolidation of the Equipment Operations and Financial Services in conformity with Financial Accounting Standards Board (FASB) Statement No. 94. References to "Deere & Company" or "the company" refer to the entire enterprise.

    The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates.

    Sales of equipment and service parts are generally recorded by the company when they are shipped to independent dealers. Provisions for sales incentives and product warranty costs are recognized at the time of sale or at the inception of the incentive programs and are based on certain estimates the company believes are appropriate.

    In 1999, the company adopted FASBStatements No. 130, Reporting Comprehensive Income, No. 131, Disclosures about Segments of an Enterprise and Related Information, and No. 132, Employers' Disclosures about Pensions and Other Postretirement Benefits. See information beginning on pages 24, 31, and 33, respectively. These Statements had no effect on the company's financial position or net income. In 1998, the FASB issued Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. Under the new standard, all derivatives will be recorded at fair value in the financial statements. The company will adopt this statement in fiscal year 2001. The effect on the company's financial position or net income is not expected to be material. In 1998, the AICPA issued Statement of Position (SOP) 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. This SOP requires the capitalization of costs for software developed for internal use, which were previously expensed. The SOP will be adopted in fiscal year 2000 and the effect on the company's financial position or net income is not expected to be material.

    In 1999, the company completed the following acquisitions and dispositions. The company purchased the remaining 60 percent interest in SLC-John Deere, a Brazilian farm equipment manufacturer of combines, tractors and planters. The acquisition cost was $174 million, including $42 million of goodwill, which will be amortized over 20 years. The company purchased the remaining 50 percent interest in InterAg Technologies, Inc., a developer of electronic controls and agribusiness software, headquartered in Atlanta, Georgia for $55 million. The acquisition cost included 1.5 million shares of Deere & Company common stock valued at $49 million with the remainder in cash. The company purchased a 32 percent interest in Bell Equipment Company, a manufacturer of articulated dump trucks, located in Richards Bay, South Africa for $29 million. The company's subsidiary, John Deere Capital Corporation, purchased Senstar Capital Corporation, located in Pittsburgh, Pennsylvania, for $41 million and the remaining 50 percent interest in John Deere Credit Limited located in Gloucester, England for $18 million. The company sold John Deere Insurance Group, Inc. (JDIG), which provides certain lines of property and casualty coverages. JDIG had a net loss of $.4 million in the first eleven months of 1999 compared with net income of $8.9 million and $29.6 million during the years 1998 and 1997, respectively. The gain on the sale was immaterial. Neither the acquisitions nor the sale had a material effect on the company's financial position or results of operations.

    Certain amounts for prior years have been reclassified to conform with 1999 financial statement presentations.

SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 1999, 1998 AND 1997

    In 1999, the company adopted FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information. Consequently, the segments have been redefined to coincide with internal organizational structure, the way the operations are managed and evaluated by management and materiality considerations. The manufacture and distribution of engines and drivetrain components for the original equipment manufacturer market, previously aggregated with the construction equipment segment, are now allocated to all three major equipment segments. In addition, the operations of certain units involved in the development and marketing of special technologies, which were previously aggregated with the agricultural equipment and the commercial and consumer equipment segments, have been aggregated and included with the health care and insurance operations in the "Other" category, as they do not meet the materiality threshold of FASB Statement No. 131. The insurance operations were sold in 1999. Prior periods have been restated for the adoption of the Statement. The company's operations are now organized and reported in four major business segments described as follows.

    The company's worldwide agricultural equipment segment manufactures and distributes a full line of farm equipment—including tractors; combine, cotton and sugarcane harvesters; tillage, seeding and soil preparation machinery; sprayers; hay and forage equipment; materials handling equipment; and integrated precision farming technology.

    The company's worldwide construction equipment segment manufactures and distributes a broad range of machines used in construction, earthmoving and forestry—including backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; scrapers; motor graders; log skidders and forestry harvesters.

    The company's worldwide commercial and consumer equipment segment manufactures and distributes equipment for commercial and residential uses—including small tractors for lawn, garden, commercial and utility purposes; riding and walk-behind mowers; golf course equipment; snowblowers; handheld products such as chain saws, string trimmers and leaf blowers; skid-steer loaders; utility vehicles; and other outdoor power products.

    The products produced by the equipment segments are marketed primarily through independent retail dealer networks and major retail outlets.

    The company's credit segment primarily finances sales and leases by John Deere dealers of new and used agricultural, construction and commercial and consumer equipment and sales by non-Deere dealers of recreational products. In addition, it provides wholesale financing to dealers of the foregoing equipment and finances retail revolving charge accounts.

    Corporate assets are primarily the Equipment Operations' prepaid pension costs, deferred income tax assets, other receivables and cash and short-term investments as disclosed in the financial statements, net of certain minor intercompany eliminations.

    Because of integrated manufacturing operations and common administrative and marketing support, a substantial number of allocations must be made to determine operating segment and geographic area data. Intersegment sales and revenues represent sales of components and finance charges which are generally based on market prices. Overseas operations are defined to include all activities of divisions, subsidiaries and affiliated companies conducted outside the United States and Canada.

    Information relating to operations by operating segment in millions of dollars follows with related comments included in Management's Discussion and Analysis. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 1999, 1998, and 1997 were as follows: agricultural equipment net sales of $106 million, $132 million and $103 million and credit revenues of $1 million, $2 million and $2 million, respectively.

OPERATING SEGMENTS

	1999			1998			1997
Net sales and revenues
Unaffiliated customers:
Agricultural equipment net sales	$	5,138		$	7,463		$	7,289
Construction equipment net sales		1,880			2,281			1,998
Commercial and consumer equipment net sales		2,648			2,182			1,795
Other net sales		35
Total net sales		9,701			11,926			11,082
Credit revenues		1,136			971			818
Other revenues		914			925			891
Total	$	11,751		$	13,822		$	12,791
Operating profit (loss)
Agricultural equipment*	$	(51	)	$	941		$	1,048
Construction equipment		149			326			245
Commercial and consumer equipment		213			213			115
Credit**		274			256			232
Other**		(33	)		11			(24	)
Total operating profit		552			1,747			1,616
Interest income		24			13			4
Investment income		1
Interest expense		(161	)		(126	)		(79	)
Foreign exchange gain (loss)		(7	)		(24	)		7
Corporate expenses—net		(35	)		(35	)		(37	)
Income taxes		(135	)		(554	)		(551	)
Total		(313	)		(726	)		(656	)
Net income	$	239		$	1,021		$	960

*

Includes $68 million of early-retirement cost in 1999.

**

Operating profit of the credit business segment includes the effect of interest expense, which is the largest element of its operating costs. Operating profit of the "other" category includes insurance and health care investment income.

Interest income
Agricultural equipment	$	51		$	43		$	39
Construction equipment		9			11			13
Commercial and consumer equipment		8			8			8
Credit		685			697			652
Corporate		24			13			4
Intercompany		(15	)		(11	)		(5	)
Total	$	762		$	761		$	711
Interest expense
Agricultural equipment	$	1		$	2		$	2
Credit		408			400			346
Other		2			2
Corporate		161			126			79
Intercompany		(15	)		(11	)		(5	)
Total	$	557		$	519		$	422
Depreciation* and amortization expense
Agricultural equipment	$	193		$	214		$	195
Construction equipment		46			52			50
Commercial and consumer equipment		71			57			59
Credit		208			129			79
Other		24			11			11
Total	$	542		$	463		$	394

*

Includes depreciation for equipment on operating leases.         

Equity in income (loss) of unconsolidated affiliates
Agricultural equipment	$	2		$	2
Construction equipment		10			15		$	11
Commercial and consumer equipment					1			1
Credit								(1	)
Other		(3	)		(3	)		(7	)
Total	$	9		$	15		$	4
Identifiable assets
Agricultural equipment	$	4,244		$	5,324		$	4,369
Construction equipment		757			950			956
Commercial and consumer equipment		1,948			1,574			1,253
Credit		8,658			7,674			7,365
Other		327			1,236			1,235
Corporate		1,644			1,244			1,142
Total	$	17,578		$	18,002		$	16,320
Capital additions
Agricultural equipment	$	170		$	261		$	291
Construction equipment		42			71			71
Commercial and consumer equipment		80			97			117
Credit		5			9			6
Other		12			4			7
Total	$	309		$	442		$	492
Investment in unconsolidated affiliates
Agricultural equipment	$	23		$	57		$	55
Construction equipment		116			92			77
Commercial and consumer equipment		2			1			5
Credit		9			20			13
Other		2			2
Total	$	152		$	172		$	150

    The company views and has historically disclosed its operations as consisting of two geographic areas, the United States and Canada, and overseas, shown below in millions of dollars. Operating income for these areas has been disclosed in addition to the requirements under FASB Statement No. 131. No individual foreign country's net sales and revenues were material for disclosure purposes. The percentages shown in the captions for net sales and revenues indicate the approximate proportion of each amount that relates to the United States only. The percentages are based upon a three-year average for 1999, 1998 and 1997. GEOGRAPHIC AREAS

	1999		1998		1997
Net sales and revenues
Unaffiliated customers:
United States and Canada:
Equipment operations net sales (91%)	$	7,023	$	8,877	$	8,018
Financial Services revenues (93%)		1,873		1,737		1,554
Total		8,896		10,614		9,572
Overseas:
Equipment operations net sales		2,678		3,049		3,064
Financial Services revenues*		40
Total		2,718		3,049		3,064
Other revenues		137		159		155
Total	$	11,751	$	13,822	$	12,791

*

Overseas Financial Services were not significant in 1998 and 1997.

Operating profit
United States and Canada:
Equipment operations	$	48	$	1,177	$	1,101
Financial Services		277		271		214
Total		325		1,448		1,315
Overseas:
Equipment operations		224		299		301
Financial Services*		3
Total		227		299		301
Total	$	552	$	1,747	$	1,616

*

Overseas Financial Services were not significant in 1998 and 1997.         

Property and equipment
United States	$	1,267	$	1,253	$	1,123
Mexico		194		176		131
Germany		137		156		163
Other countries		184		115		107
Total	$	1,782	$	1,700	$	1,524

REINSURANCE     The company's insurance subsidiaries, which were sold in 1999, utilized reinsurance to limit their losses and reduce their exposure to large claims. Insurance and health care premiums earned consisted of the following in millions of dollars:

	1999			1998			1997
Premiums earned:
Direct from policyholders	$	766		$	739		$	711
Reinsurance assumed		4			7			5
Reinsurance ceded		(28	)		(25	)		(19	)
Financial Services premiums		742			721			697
Intercompany premiums		(26	)		(28	)		(29	)
Premiums	$	716		$	693		$	668

    The difference between premiums earned and written was not material. Reinsurance recoveries on ceded reinsurance contracts during 1999, 1998 and 1997 totaled $14 million, $31 million and $13 million, respectively. PENSION AND OTHER POSTRETIREMENT BENEFITS     The following disclosure has been revised in 1999 for the adoption of FASB Statement No. 132, Employers' Disclosures About Pensions and Other Postretirement Benefits. The company has several defined benefit pension plans covering its United States employees and employees in certain foreign countries. The company also has several defined benefit health care and life insurance plans for retired employees in the United States and Canada.     The worldwide components of net periodic pension cost and the significant assumptions consisted of the following in millions of dollars and in percents:

	1999			1998			1997
Pensions
Service cost	$	117		$	102		$	97
Interest cost		396			386			366
Expected return on assets		(497	)		(456	)		(411	)
Amortization of actuarial loss		33			29			41
Amortization of prior service cost		44			43			46
Amortization of net transition asset		(8	)		(11	)		(12	)
Special termination benefits		29			5			5
Settlements/curtailments		(2	)		2			2
Net cost	$	112		$	100		$	134
Weighted-average Assumptions
Discount rates for obligations		7.4%			7.0%			7.5%
Discount rates for expenses		7.0%			7.5%			7.5%
Assumed rates of compensation increases		4.9%			4.9%			4.9%
Expected long-term rates of return		9.7%			9.7%			9.7%

    The worldwide components of net periodic postretirement benefits cost and the significant assumptions consisted of the following in millions of dollars and in percents:

	1999			1998			1997
Health Care and Life Insurance
Service cost	$	85		$	74		$	72
Interest cost		188			172			166
Expected return on assets		(35	)		(31	)		(27	)
Amortization of actuarial loss		23			2			2
Amortization of prior service cost		(4	)		(6	)		(11	)
Special termination benefits		5
Settlement		3
Net cost	$	265		$	211		$	202
Weighted-average Assumptions
Discount rates for obligations		7.75%			7.26%			7.76%
Discount rates for expenses		7.26%			7.76%			7.76%
Expected long-term rates of return		9.7%			9.7%			9.7%

    In addition to the special termination benefits included in the pension and postretirement benefit plans shown above, the company provided $34 million of other special early-retirement benefits to certain employees in 1999. These benefits and the special termination benefits included in the benefit plans totaled $68 million in 1999.     The annual rates of increase in the per capita cost of covered health care benefits (the health care cost trend rates) used to determine 1999, 1998 and 1997 costs were assumed to be 6.0 percent for 2000, decreasing gradually to 4.5 percent by the year 2003, 9.1 percent for 1999, decreasing gradually to 4.5 percent by the year 2003 and 9.0 percent for 1998, decreasing gradually to 4.5 percent by the year 2003, respectively. An increase of one percentage point in the assumed health care cost trend rate would increase the accumulated postretirement benefit obligations at October 31, 1999 by $269 million and the net periodic postretirement benefits cost for that year by $35 million. A decrease of one percentage point would decrease the postretirement benefit obligations by $241 million and the cost by $31 million for the same period.     A worldwide reconciliation of the funded status of the benefit plans at October 31 in millions of dollars follows:

	Pensions						Health Care and Life Insurance
	1999			1998			1999			1998
Change in benefit obligations
Beginning of year balance	$	(5,830	)	$	(5,343	)	$	(2,517	)	$	(2,308	)
Service cost		(117	)		(102	)		(85	)		(74	)
Interest cost		(396	)		(386	)		(188	)		(172	)
Actuarial gain (loss)		188			(336	)		(37	)		(106	)
Amendments		(6	)		(8	)
Benefits paid		364			351			164			141
Settlements/curtailments		2			(2	)		(3	)
Special termination benefits		(29	)		(5	)		(5	)
Foreign exchange and other		29			1			4			2
End of year balance		(5,795	)		(5,830	)		(2,667	)		(2,517	)
Change in plan assets (fair value)
Beginning of year balance		5,661			5,451			359			316
Actual return on plan assets		1,143			344			76			20
Employer contribution		23			233			168			164
Benefits paid		(364	)		(351	)		(158	)		(141	)
Foreign exchange and other		9			(16	)
End of year balance		6,472			5,661			445			359
Plan obligation (more than) less than plan assets		677			(169	)		(2,222	)		(2,158	)
Unrecognized actuarial (gain) loss		(638	)		231			295			330
Unrecognized prior service (credit) cost		186			222			(8	)		(12	)
Remaining unrecognized transition asset		(17	)		(23	)
Net amount recognized in the balance sheet	$	208		$	261		$	(1,935	)	$	(1,840	)
Amounts recognized in balance sheet
Prepaid benefit cost	$	620		$	674
Accrued benefit liability		(463	)		(461	)	$	(1,935	)	$	(1,840	)
Intangible asset		25			22
Accumulated pretax charge to other comprehensive income		26			26
Net amount recognized	$	208		$	261		$	(1,935	)	$	(1,840	)

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with the accumulated benefit obligations greater than plan assets at October 31, 1999 were $425 million, $385 million and $14 million, respectively, and at October 31, 1998 were $411 million, $374 million and $12 million, respectively.

INCOME TAXES

    The provision for income taxes by taxing jurisdiction and by significant component consisted of the following in millions of dollars:

	1999			1998			1997
Current:
United States:
Federal	$	115		$	216		$	434
State		13			30			37
Foreign		166			164			88
Total current		294			410			559
Deferred:
United States:
Federal		(143	)		138			(22	)
State		(13	)		10
Foreign		(3	)		(4	)		14
Total deferred		(159	)		144			(8	)
Provision for income taxes	$	135		$	554		$	551

    Based upon location of the company's operations, the consolidated income before income taxes in the United States in 1999, 1998 and 1997 was $21 million, $1,158 million and $1,057 million, respectively, and in foreign countries was $344 million, $402 million and $450 million, respectively. Certain foreign operations are branches of Deere & Company and are, therefore, subject to United States as well as foreign income tax regulations. The pretax income by location and the preceding analysis of the income tax provision by taxing jurisdiction are, therefore, not directly related.

    A comparison of the statutory and effective income tax provision and reasons for related differences in millions of dollars follows:

	1999			1998			1997
United States federal income tax provision at a statutory rate of 35 percent	$	128		$	546		$	527
Increase (decrease) resulting from:
State and local income taxes, net of federal income tax benefit					25			25
Taxes on foreign income which differ from the United States statutory rate		22			3			12
Benefit of Foreign Sales Corporation		(11	)		(20	)		(15	)
Other adjustments—net		(4	)					2
Provision for income taxes	$	135		$	554		$	551

    Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax reporting purposes. An analysis of the deferred income tax assets and liabilities at October 31 in millions of dollars follows:

	1999					1998
	Deferred Tax Assets			Deferred Tax Liabilities		Deferred Tax Assets			Deferred Tax Liabilities
Deferred installment sales income				$	317				$	429
Tax over book depreciation					138					123
Deferred lease income					72					30
Accrual for retirement and postemployment benefits	$	619				$	546
Accrual for sales allowances		262					259
Accrual for vacation pay		54					51
Allowance for doubtful receivables		48					47
Tax loss and tax credit carryforwards		12					19
Minimum pension liability adjustment		10					10
Other items		115			56		124			95
Less valuation allowance		(2	)				(2	)
Deferred income tax assets and liabilities	$	1,118		$	583	$	1,054		$	677

    At October 31, 1999, accumulated earnings in certain overseas subsidiaries totaled $797 million for which no provision for United States income taxes or foreign withholding taxes has been made, because it is expected that such earnings will be reinvested overseas indefinitely. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practical.

    Deere & Company files a consolidated federal income tax return in the United States, which includes the wholly-owned Financial Services subsidiaries. These subsidiaries account for income taxes generally as if they filed separate income tax returns.

    At October 31, 1999, certain foreign tax loss and tax credit carryforwards for $12 million were available with an unlimited expiration date.

MARKETABLE SECURITIES

    Marketable securities are held by Deere & Company and its health care subsidiaries. The securities held by Deere & Company at October 31, 1999 are those transferred from John Deere Insurance Group, Inc. (JDIG) prior to the sale of the subsidiary (see page 31). All marketable securities are classified as available-for-sale under FASB Statement No. 115, with unrealized gains and losses shown as a component of stockholders' equity. Realized gains or losses from the sales of marketable securities are based on the specific identification method.

    The amortized cost and fair value of marketable securities in millions of dollars follow:

	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
October 31, 1999
Equity securities	$	86	$	18	$	9	$	95
U.S. government and agencies		33		1				34
Corporate		129		1		2		128
Mortgage-backed securities		59		1		1		59
Marketable securities	$	307	$	21	$	12	$	316
October 31, 1998
Equity securities	$	99	$	5	$	7	$	97
U.S. government and agencies		125		8				133
States and municipalities		175		11				186
Corporate		226		11				237
Mortgage-backed securities		203		10				213
Other		1						1
Marketable securities	$	829	$	45	$	7	$	867

    The contractual maturities of debt securities at October 31, 1999 in millions of dollars follow:

	Amortized Cost		Fair Value
Due in one year or less	$	34	$	34
Due after one through five years		79		79
Due after five through 10 years		50		49
Due after 10 years		58		59
Debt securities	$	221	$	221

    Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations. Proceeds from the sales of available-for-sale securities were $19 million in 1999, $105 million in 1998 and $114 million in 1997. Gross realized gains and losses on those sales were not significant. In addition, $502 million of marketable securities were included in the sale of JDIG in 1999. The increase (decrease) in the net unrealized holding gain after income taxes was $(19) million, $3 million and $8 million during 1999, 1998 and 1997, respectively.

TRADE ACCOUNTS AND NOTES RECEIVABLE

    Trade accounts and notes receivable at October 31 consisted of the following in millions of dollars:

	1999		1998
Trade accounts and notes:
Agricultural	$	1,951	$	2,756
Construction		104		322
Commercial and consumer		958		784
Total		3,013		3,862
Other receivables		272		228
Total		3,285		4,090
Less allowance for doubtful receivables		34		31
Trade accounts and notes receivable-net	$	3,251	$	4,059

    At October 31, 1999 and 1998, dealer notes included above were $856 million and $955 million, respectively.

    Trade accounts and notes receivable arise from sales to dealers of John Deere agricultural, construction and commercial and consumer equipment. The company generally retains as collateral a security interest in the equipment associated with these receivables. Generally, terms to dealers require payments as the equipment which secures the indebtedness is sold to retail customers. Interest is charged on balances outstanding after certain interest-free periods, which range from one to 12 months for agricultural tractors, one to five months for construction equipment, and from two to 24 months for most other equipment. Trade accounts and notes receivable have significant concentrations of credit risk in the agricultural, construction and commercial and consumer business sectors as shown in the previous table. On a geographic basis, there is not a disproportionate concentration of credit risk in any area.

FINANCING RECEIVABLES

    Financing receivables at October 31 consisted of the following in millions of dollars:

	1999		1998
Retail notes:
Equipment:
Agricultural	$	3,397	$	3,030
Construction		854		953
Commercial and consumer		457		351
Recreational products		333		1,044
Total		5,041		5,378
Revolving charge accounts		918		764
Financing leases		633		387
Wholesale notes		1,052		894
Total financing receivables		7,644		7,423
Less:
Unearned finance income:
Equipment notes		626		590
Recreational product notes		80		360
Financing leases		102		50
Total		808		1,000
Allowance for doubtful receivables		93		90
Financing receivables—net	$	6,743	$	6,333

    Financing receivables have significant concentrations of credit risk in the agricultural, construction, commercial and consumer, and recreational product business sectors as shown in the previous table. On a geographic basis, there is not a disproportionate concentration of credit risk in any area. The company retains as collateral a security interest in the equipment associated with retail notes, wholesale notes and financing leases.

    Financing receivable installments, including unearned finance income, at October 31 are scheduled as follows in millions of dollars:

	1999		1998
Due in months:
0—12	$	3,432	$	2,954
13—24		1,670		1,585
25—36		1,066		1,100
37—48		781		722
49—60		485		451
Thereafter		210		611
Total	$	7,644	$	7,423

    The maximum terms for retail notes are generally eight years for agricultural equipment, five years for construction equipment, six years for commercial and consumer equipment and 15 years for recreational products. The maximum term for financing leases is generally five years, while the maximum term for wholesale notes is generally 12 months.

    The company's United States and Canadian credit subsidiaries received proceeds of $2,482 million in 1999, $1,860 million in 1998 and $968 million in 1997 from the sale of retail notes. At October 31, 1999 and 1998, the unpaid balances of retail notes previously sold were $2,716 million and $2,388 million, respectively. The company's maximum exposure under all retail note recourse provisions at October 31, 1999 and 1998 was $176 million and $193 million, respectively. There is no anticipated credit risk related to nonperformance by the counterparties. The retail notes sold are collateralized by security interests in the related equipment sold to customers. At October 31, 1999 and 1998, worldwide financing receivables administered, which include financing receivables previously sold but still administered, totaled $9,459 million and $8,721 million, respectively.

    Total financing receivable amounts 60 days or more past due were $35 million at October 31, 1999 compared with $29 million at October 31, 1998. These past-due amounts represented .52 percent of the receivables financed at October 31, 1999 and .44 percent at October 31, 1998. The allowance for doubtful financing receivables represented 1.36 percent and 1.40 percent of financing receivables outstanding at October 31, 1999 and 1998, respectively. In addition, at October 31, 1999 and 1998, the company's credit subsidiaries had $139 million and $176 million, respectively, of deposits withheld from dealers and merchants available for potential credit losses. An analysis of the allowance for doubtful credit receivables follows in millions of dollars:

	1999			1998			1997
Balance, beginning of the year	$	90		$	94		$	93
Provision charged to operations		68			50			38
Amounts written off		(44	)		(36	)		(31	)
Transfers related to retail note sales		(21	)		(18	)		(6	)
Balance, end of the year	$	93		$	90		$	94

OTHER RECEIVABLES

    Other receivables at October 31 consisted of the following in millions of dollars:

	1999		1998
Insurance and health care premiums receivable	$	42	$	94
Reinsurance receivables				94
Receivables relating to asset backed securitizations		89		162
Taxes receivable		115		129
Other		28		58
Other receivables	$	274	$	537

    The credit subsidiaries' receivables related to asset backed securitizations are equal to the present value of payments to be received for retained interests and deposits made with other entities for recourse provisions under the retail note sales agreements.

EQUIPMENT ON OPERATING LEASES

    Operating leases arise from the leasing of John Deere equipment to retail customers in the United States and Canada. Initial lease terms generally range from 36 to 60 months. The net value of equipment on operating leases was $1,655 million and $1,209 million at October 31, 1999 and 1998, respectively. Of these leases, at October 31, 1999, $3 million was financed by the Equipment Operations and $1,652 million by the credit subsidiaries. The equipment is depreciated on a straight-line basis over the terms of the leases. The accumulated depreciation on this equipment was $352 million and $226 million at October 31, 1999 and 1998, respectively. The corresponding depreciation expense was $204 million in 1999, $146 million in 1998 and $95 million in 1997.

    Future payments to be received on operating leases totaled $648 million at October 31, 1999 and are scheduled as follows: 2000—$260, 2001—$189, 2002—$102, 2003—$69 and 2004—$28.

INVENTORIES

    Substantially all inventories owned by Deere & Company and its United States equipment subsidiaries are valued at cost, on the "last-in, first-out" (LIFO) basis. Remaining inventories are generally valued at the lower of cost, on the "first-in, first-out" (FIFO) basis, or market. The value of gross inventories on the LIFO basis represented 77 percent and 84 percent of worldwide gross inventories at FIFO value on October 31, 1999 and 1998, respectively. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 31 in millions of dollars would have been as follows:

	1999		1998
Raw materials and supplies	$	257	$	250
Work-in-process		370		475
Finished machines and parts		1,721		1,612
Total FIFO value		2,348		2,337
Adjustment to LIFO basis		1,054		1,050
Inventories	$	1,294	$	1,287

PROPERTY AND DEPRECIATION

    A summary of property and equipment at October 31 in millions of dollars follows:

	1999		1998
Land	$	59	$	56
Buildings and building equipment		1,124		1,042
Machinery and equipment		2,318		2,206
Dies, patterns, tools, etc		682		654
All other		602		566
Construction in progress		105		164
Total at cost		4,890		4,688
Less accumulated depreciation		3,108		2,988
Property and equipment—net	$	1,782	$	1,700

    Leased property under capital leases amounting to $5 million at both October 31, 1999 and 1998 is included primarily in machinery and equipment.

    Property and equipment additions in 1999, 1998 and 1997 were $309 million, $442 million and $492 million and depreciation was $281 million, $279 million and $265 million, respectively. Property and equipment expenditures for new and revised products, increased capacity and the replacement or major renewal of significant items of property and equipment are capitalized. Expenditures for maintenance, repairs and minor renewals are generally charged to expense as incurred. Most of the company's property and equipment is depreciated using the straight-line method for financial accounting purposes. Depreciation for United States federal income tax purposes is computed using accelerated depreciation methods.

    It is not expected that the cost of compliance with foreseeable environmental requirements will have a material effect on the company's financial position or results of operations.

INTANGIBLE ASSETS

    Net intangible assets totaled $295 million and $218 million at October 31, 1999 and 1998, respectively. The balance at October 31, 1999 consisted primarily of unamortized goodwill, which resulted from the purchase cost of assets acquired exceeding their fair value, and an intangible asset of $25 million related to the additional minimum pension liability required by FASB Statement No. 87.

    Intangible assets, excluding the intangible pension asset, are being amortized over 25 years or less, and the accumulated amortization was $89 million and $66 million at October 31, 1999 and 1998, respectively. The intangible pension asset is remeasured and adjusted annually. The unamortized goodwill is reviewed periodically for potential impairment.

SHORT-TERM BORROWINGS

    Short-term borrowings at October 31 consisted of the following in millions of dollars:

	1999		1998
Equipment Operations
Commercial paper	$	316	$	1,268
Notes payable to banks		121		44
Long-term borrowings due within one year		205		200
Total		642		1,512
Financial Services
Commercial paper		1,699		2,124
Notes payable to banks		9		7
Long-term borrowings due within one year		2,138		1,679
Total		3,846		3,810
Short-term borrowings	$	4,488	$	5,322

    The weighted average interest rates on total short-term borrowings, excluding current maturities of long-term borrowings, at October 31, 1999 and 1998 were 5.3 percent and 5.4 percent, respectively. All of the Financial Services' short-term borrowings represent obligations of the credit subsidiaries.

    Unsecured lines of credit available from United States and foreign banks were $5,815 million at October 31, 1999. Some of these credit lines are available to both the Equipment Operations and certain credit subsidiaries. At October 31, 1999, $3,647 million of the worldwide lines of credit were unused. For the purpose of computing the unused credit lines, total short-term borrowings, excluding the current maturities of long-term borrowings, were considered to constitute utilization.

    Included in the above lines of credit is a long-term committed credit agreement expiring in February 2003 for $3,500 million. The agreement is mutually extendable and the annual facility fee is not significant. The credit agreement has various requirements of John Deere Capital Corporation, including the maintenance of its consolidated ratio of earnings to fixed charges at not less than 1.05 to 1 for each fiscal quarter and the ratio of senior debt to total stockholder's equity plus subordinated debt at not more than 8 to 1 at the end of any fiscal quarter. The credit agreement also contains a provision requiring Deere & Company to maintain consolidated tangible net worth of $500 million according to United States generally accepted accounting principles in effect at October 31, 1994. Under this provision, $3,299 million of the company's retained earnings balance was free of restriction at October 31, 1999.

    Deere & Company has a contractual agreement to conduct business with the John Deere Capital Corporation on such terms that the Capital Corporation will continue to satisfy the ratio requirement discussed above for earnings to fixed charges, the Capital Corporation's tangible net worth will be maintained at not less than $50 million and Deere & Company will own at least 51 percent of Capital Corporation's voting capital stock. These arrangements are not intended to make Deere & Company responsible for the payment of obligations of this credit subsidiary.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

    Accounts payable and accrued expenses at October 31 consisted of the following in millions of dollars:

	1999		1998
Equipment operations
Accounts payable:
Trade payables	$	804	$	913
Dividends payable		51		52
Other		42		45
Accrued expenses:
Employee benefits		189		177
Dealer commissions		173		217
Other		633		694
Total		1,892		2,098
Financial Services
Accounts payable:
Deposits withheld from dealers and merchants		139		176
Other		233		161
Accrued expenses:
Unearned premiums		5		141
Unpaid loss adjustment expenses				85
Interest payable		39		57
Other		125		135
Total		541		755
Accounts payable and accrued expenses	$	2,433	$	2,853

LONG-TERM BORROWINGS

    Long-term borrowings at October 31 consisted of the following in millions of dollars:

	1999		1998
Equipment Operations
Notes and debentures:
Medium-term notes due 2001—2006:
Average interest rate of 8.0% as of year end 1999 and 8.9% as of year end 1998	$	181	$	134
6.55% notes due 2004		250
8.95% debentures due 2019*		200
81/2% debentures due 2022		200		200
6.55% debentures due 2028		200		200
Other		5		19
Total		1,036		553

*

Reclassified to short-term borrowings in 1998 because the obligation was callable by creditors in 1999.

Financial Services

Notes and debentures:
Medium-term notes due 2000—2007:
Average interest rate of 6.1% as of year end 1999 and 6.4% as of year end 1998		1,373		1,549
5.85% notes due 2001		200		200
5.35% notes due 2001		200		200
7% notes due 2002: Swapped to variable interest rate of 6.5% as of year end 1999		300
6.125% U.S. dollar notes due 2003: Swapped to Canadian dollars and a variable interest rate of 5.1% as of year end 1999 and 6.3% as of year end 1998		147		140
Fixed rate notes due up to 2008: Average rate of 7.2% as of year end 1999		100
6% notes due 2009: Swapped to variable interest rate of 5.5% as of year end 1999		300
Total notes and debentures		2,620		2,089
Subordinated debt:
85/8% subordinated debentures due 2019		150		150
Total		2,770		2,239
Long-Term Borrowings	$	3,806	$	2,792

    All of the Financial Services' long-term borrowings represent obligations of the credit subsidiaries.

    The approximate amounts of the Equipment Operations' long-term borrowings maturing and sinking fund payments required in each of the next five years in millions of dollars are as follows: 2000—$205, 2001—$68, 2002—$72, 2003—$3 and 2004—$250. The approximate amounts of the credit subsidiaries' long-term borrowings maturing and sinking fund payments required in each of the next five years in millions of dollars are as follows: 2000—$2,138, 2001—$1,226, 2002—$768, 2003—$227 and 2004—$1.

LEASES

    At October 31, 1999, future minimum lease payments under capital leases totaled $4 million. Total rental expense for operating leases during 1999 was $73 million compared with $73 million in 1998 and $61 million in 1997. At October 31, 1999, future minimum lease payments under operating leases amounted to $151 million as follows: 2000—$45, 2001—$34, 2002—$21, 2003—$13, 2004—$21 and later years $17.

COMMITMENTS AND CONTINGENT LIABILITIES

    On October 31, 1999, the company's maximum exposure under all credit receivable recourse provisions was $176 million for retail notes sold by the Financial Services subsidiaries. Also, at October 31, 1999, the company had commitments of approximately $57 million for construction and acquisition of property and equipment.

    The company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability, retail credit, software licensing, patent and trademark matters. Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss, the company believes these unresolved legal actions will not have a material effect on its financial position or results of operations.

CAPITAL STOCK

    Changes in the common stock account in 1997, 1998 and 1999 in millions were as follows:

	Number of Shares Issued	Amount
Balance at October 31, 1996	263.8	$	1,770
Other			9
Balance at October 31, 1997	263.8		1,779
Other	.1		11
Balance at October 31, 1998	263.9		1,790
Acquisition of a business	1.5		49
Other	.4		11
Balance at October 31, 1999	265.8	$	1,850

    The number of common shares the company is authorized to issue is 600 million and the number of authorized preferred shares, none of which has been issued, is 9 million.

    The company has previously announced it would repurchase up to $1,500 million of Deere & Company common stock. The stock repurchased under the program to date totals $1,308 million. In 1999, repurchases of 1.2 million shares of common stock at a cost of $46 million were related to the repurchase program.

    A reconciliation of basic and diluted net income per share follows in millions, except per share amounts:

	1999		1998		1997
Net income	$	239.2	$	1,021.4	$	960.1
Average shares outstanding		232.9		243.3		253.7
Basic net income per share	$	1.03	$	4.20	$	3.78
Average shares outstanding		232.9		243.3		253.7
Effect of dilutive securities:
Stock options		1.5		2.1		2.7
Other				.3		.2
Total potential shares outstanding		234.4		245.7		256.6
Diluted net income per share	$	1.02	$	4.16	$	3.74

    Stock options to purchase 4.2 million shares, .5 million shares and none during 1999, 1998 and 1997 were outstanding, but not included in the preceding diluted per share computation because the options' exercise prices were greater than the average market price of the company's common stock during the related periods.

STOCK OPTION AND RESTRICTED STOCK AWARDS

    The company issues stock options and restricted stock to key employees under plans approved by stockholders. Restricted stock is also issued to nonemployee directors. Options are generally awarded with the exercise price equal to the market price and become exercisable in one year. Certain other options are awarded with the exercise prices greater than the market price and become exercisable in one year or longer, depending on the achievement of company performance goals. Options generally expire 10 years after the date of grant. The periods of restriction for restricted stock issued to employees range up to eight years, generally depending on the achievement of company performance goals. If the company exceeds these goals, additional shares could be granted at the end of the restricted periods. According to these plans at October 31, 1999, the company is authorized to grant stock options and restricted stock for an additional 8.1 million and 2.8 million shares, respectively.

    The company has retained the intrinsic value method of accounting for its plans in accordance with APB Opinion No. 25, and no compensation expense for stock options was recognized under this method. For disclosure purposes only under FASB Statement No. 123, Accounting for Stock Based Compensation, the Black-Scholes option pricing model was used to calculate the "fair values" of stock options on the date the options were awarded. Based on this model, the weighted-average fair values of stock options awarded during 1999, 1998 and 1997 with the exercise price equal to the market price were $7.96, $19.84 and $13.70 per option, respectively. Stock options awarded during 1999 and 1998 with the exercise price greater than the market price were valued at $4.26 and $14.81 per option, respectively.

    Pro forma net income and earnings per share, as if the fair value method in FASB Statement No. 123 had been used to account for stock-based compensation, and the assumptions used are as follow:

	1999	1998	1997
Net income (in millions)
As reported	$ 239	$1,021	$ 960
Pro forma	$ 216	$ 997	$ 948
Net income per share
As reported—basic	$1.03	$ 4.20	$3.78
Pro forma—basic	$.93	$ 4.10	$3.74
As reported—diluted	$1.02	$ 4.16	$3.74
Pro forma—diluted	$.92	$ 4.06	$3.70
Black-Scholes assumptions*
Risk-free interest rate	4.6%	5.8%	6.2%
Dividend yield	2.7%	1.6%	1.9%
Stock volatility	27.9%	34.7%	30.0%
Expected option life	5.0 years	5.3 years	5.3 years

*

Weighted-averages

    The pro forma stock-based compensation expense included in net income above may not be representative of future years since only awards of stock options and restricted stock after November 1, 1995 have been included in accordance with FASB Statement No. 123.

    During the last three fiscal years, changes in shares under option in millions were as follows:

	1999				1998				1997
	Shares		Exercise Price*		Shares		Exercise Price*		Shares		Exercise Price*
Outstanding at beginning of year	7.6		$	39.95	6.2		$	30.90	6.3		$	26.54
Granted—at market	3.9			32.75	1.7			56.50	1.5			42.69
Granted—at premium	.7			50.97	.5			82.19
Exercised	(.2	)		21.35	(.7	)		29.55	(1.5	)		24.23
Expired or forfeited	(.1	)		40.62	(.1	)		48.67	(.1	)		28.70
Outstanding at end of year	11.9			38.59	7.6			39.95	6.2			30.90
Exercisable at end of year	6.8			37.36	3.8			30.52	3.1			24.70

*

Weighted-averages

    Options outstanding and exercisable in millions at October 31, 1999 were as follows:

	Options Outstanding			Options Exercisable
Range of Exercise Prices	Shares	Remaining Contractual Life (yrs)*	Exercise Price*	Shares	Exercise Price*
$13.63—$23.56	1.5	4.21	19.91	1.5	19.91
$28.39—$34.13	6.0	7.68	32.50	2.4	32.44
$38.47—$47.36	1.5	7.23	42.42	1.2	42.69
$50.97—$56.50	2.4	8.39	54.80	1.7	56.50
$82.19	.5	8.08	82.19
Total	11.9			6.8

*

Weighted-averages

    In 1999, 1998, and 1997, the company granted 703,914, 33,239 and 292,681 shares of restricted stock with weighted-average fair values of $32.85, $55.60 and $43.14 per share, respectively. The total compensation expense for the restricted stock plans, which are being amortized over the restricted periods, was $10 million, $2 million and $15 million in 1999, 1998 and 1997, respectively.

EMPLOYEE STOCK PURCHASE AND SAVINGS PLANS

    The company maintains the following significant plans for eligible employees:

    John Deere Savings and Investment Plan, for salaried employees

    John Deere Stock Purchase Plan, for salaried employees

    John Deere Tax Deferred Savings Plan, for hourly and incentive paid employees

    Company contributions under these plans were $51 million in 1999, $45 million in 1998 and $41 million in 1997.

OTHER COMPREHENSIVE INCOME ITEMS

    Other comprehensive income items under FASB Statement No. 130 are transactions recorded in stockholders' equity during the year, excluding net income and transactions with stockholders. Following are the items included in other comprehensive income (loss) and the related tax effects in millions of dollars:

	Before Tax Amount			Tax (Expense) Credit			After Tax Amount
1997
Minimum pension liability adjustment	$	350		$	(129	)	$	221
Cumulative translation adjustment		(37	)		(6	)		(43	)
Unrealized gain on marketable securities:
Holding gain		13			(4	)		9
Reclassification of realized gain to net income		(1	)					(1	)
Net unrealized gain		12			(4	)		8
Total other comprehensive income	$	325		$	(139	)	$	186
1998
Minimum pension liability adjustment	$	(8	)	$	3		$	(5	)
Cumulative translation adjustment		(21	)		(3	)		(24	)
Unrealized gain on marketable securities:
Holding gain		11			(4	)		7
Reclassification of realized gain to net income		(7	)		3			(4	)
Net unrealized gain		4			(1	)		3
Total other comprehensive loss	$	(25	)	$	(1	)	$	(26	)
1999
Cumulative translation adjustment	$	(24	)	$	(3	)	$	(27	)
Unrealized loss on marketable securities:
Holding loss		(28	)		10			(18	)
Reclassification of realized gain to net income		(1	)					(1	)
Net unrealized loss		(29	)		10			(19	)
Total other comprehensive loss	$	(53	)	$	7		$	(46	)

FINANCIAL INSTRUMENTS

    The fair values of financial instruments which do not approximate the carrying values in the financial statements at October 31 in millions of dollars follow:

	1999					1998
	Carrying Value			Fair Value		Carrying Value			Fair Value
Financing receivables	$	6,743		$	6,702	$	6,333		$	6,344
Long-term borrowings and related swaps:
Equipment Operations borrowings	$	1,036		$	1,045	$	553		$	604
Financial Services borrowings		2,773			2,748		2,249			2,307
Interest rate and foreign currency swaps		(3	)		19		(10	)		(30	)
Total	$	3,806		$	3,812	$	2,792		$	2,881

Fair Value Estimates

    Fair values of the long-term financing receivables with fixed rates were based on the discounted values of their related cash flows at current market interest rates. The fair values of the remaining financing receivables approximated the carrying amounts.

    Fair values of long-term borrowings with fixed rates were based on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings of the credit operations have been swapped to current variable interest rates. Fair values of these swaps were also based on discounted values of their related cash flows at current market interest rates.

    Fair values and carrying values of the company's other interest rate swaps associated with short-term borrowings, foreign exchange forward contracts and options were not material.

Derivatives

    The company enters into derivative transactions only to hedge exposures arising in the normal course of business, and not for the purpose of creating speculative positions or trading. The following notional or contract amounts do not represent amounts exchanged by the parties and, therefore, are not representative of the company's risk. The net amounts exchanged are calculated on the basis of the notional amounts and other terms of the derivatives such as interest rates and exchange rates, and represent only a small portion of the notional amounts. The credit and market risks under these agreements are not considered to be significant since the counterparties have high credit ratings and the fair values and carrying values are not material.

Interest Rate Swaps

    The company's credit operations enter into interest rate swap agreements related to their borrowings and certain asset backed securitizations. These swaps are utilized to more closely match the type of interest rates of the borrowings to those of the assets being funded or to hedge interest rate exposures from securitizations. The differential to be paid or received on all swap agreements is accrued as interest rates change and is recognized over the lives of the agreements in interest expense. The fair value adjustments for swap agreements related to securitizations are recognized in other income.

    At October 31, 1999 and 1998, the total notional principal amounts of interest rate swap agreements related to short-term borrowings were $1,037 million and $1,063 million, having rates of 4.7 to 6.8 percent and 4.0 to 6.4 percent, terminating in up to 59 months and 58 months, respectively.

    The credit operations have entered into interest rate swap agreements with independent parties that change the effective rate of interest on certain long-term borrowings. The "Long-Term Borrowings" table on page 39 reflects the effective year-end variable interest rates relating to these swap agreements. The notional principal amounts and maturity dates of these swap agreements are the same as the principal amounts and maturities of the related borrowings. The credit operations also have interest rate swap agreements associated with medium-term notes. The "Long-Term Borrowings" table reflects the interest rates relating to these swap agreements. At October 31, 1999 and 1998, the total notional principal amounts of these swap agreements were $540 million and $375 million, terminating in up to 92 months and 104 months, respectively.

    At October 31, 1999, the total notional principal amount of interest rate swap agreements related to asset backed securitizations was $361 million, having rates of 4.7 percent to 5.9 percent, terminating in up to 68 months.

Foreign Exchange Forward Contracts, Swaps and Options

    The company has entered into foreign exchange forward contracts, swaps and purchased options in order to hedge the currency exposure of certain receivables, liabilities, expected inventory purchases and equipment sales. The foreign exchange forward contract and swap gains or losses are accrued as foreign exchange rates change for hedges of receivables and liabilities or deferred until expiration of the contract for hedges of future commitments. The contract gains or losses and premiums are recognized in other operating expenses, cost of sales or interest expense, and the premiums are either amortized or deferred over the terms of the contracts depending on the items being hedged. The foreign exchange purchased option premiums and any gains are deferred and recognized in cost of sales for future inventory purchases or sales for future sales of equipment. At October 31, 1999 and 1998, the company had foreign exchange forward contracts of $778 million and $697 million maturing in up to 19 months and 12 months, respectively, and foreign currency swap agreements for $147 million and $237 million maturing in up to 43 months and 55 months, respectively. At October 31, 1999 and 1998, the company had purchased options for $131 million and $215 million maturing in up to 23 months and 27 months, respectively. The total deferred gains or losses on these foreign exchange hedges were not material at October 31, 1999 and 1998.

CASH FLOW INFORMATION

    For purposes of the statement of consolidated cash flows, the company considers investments with original maturities of three months or less to be cash equivalents. Substantially all of the company's short-term borrowings mature within three months or less.

    Cash payments for interest and income taxes consisted of the following in millions of dollars:

	1999			1998			1997
Interest:
Equipment Operations	$	151		$	126		$	83
Financial Services		428			414			366
Intercompany eliminations		(15	)		(11	)		(5	)
Consolidated	$	564		$	529		$	444
Income taxes:
Equipment Operations	$	135		$	449		$	522
Financial Services		55			80			112
Intercompany eliminations		(43	)		(63	)		(97	)
Consolidated	$	147		$	466		$	537

SUPPLEMENTAL INFORMATION (UNAUDITED)

    Quarterly information with respect to net sales and revenues and earnings is shown in the following schedule. Such information is shown in millions of dollars except for per share amounts.

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
1999
Net sales and revenues	$	2,459	$	3,468	$	3,036	$	2,788
Income (loss) before income taxes		76		231		125		(67	)
Net income (loss)		50		150		69		(30	)
Net income (loss) per share—basic		.21		.65		.30		(.13	)
Net income (loss) per share—diluted		.21		.65		.29		(.13	)
Dividends declared per share		.22		.22		.22		.22
Dividends paid per share		.22		.22		.22		.22
1998
Net sales and revenues	$	2,846	$	4,070	$	3,694	$	3,212
Income before income taxes		321		567		437		235
Net income		203		365		291		162
Net income per share—basic		.81		1.48		1.20		.71
Net income per share—diluted		.81		1.45		1.19		.71
Dividends declared per share		.22		.22		.22		.22
Dividends paid per share		.20		.44		*		.22

*

The payment date was included in the second quarter.

    Common stock per share sales prices from New York Stock Exchange composite transactions quotations follow:

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
1999 Market Price
High	$	40.19	$	45.94	$	45.25	$	43.44
Low	$	29.44	$	31.56	$	35.13	$	35.13
1998 Market Price
High	$	59.88	$	64.13	$	59.50	$	43.56
Low	$	49.38	$	53.38	$	39.69	$	28.38

    At October 31, 1999, there were 34,692 holders of record of the company's $1 par value common stock and 13 holders of record of the company's ⁵¹/2% convertible subordinated debentures due 2001.

Dividend and Other Events

    A quarterly cash dividend of $.22 per share was declared at the board of directors' meeting held on December 1, 1999, payable on February 1, 2000.

    On December 13, 1999, the company announced an agreement to acquire Timberjack Group, headquartered in Helsinki, Finland for approximately $600 million. Subject to regulatory approvals, the transaction is expected to close in year 2000. Timberjack Group, a leading manufacturer of forestry equipment, reported annual sales of $580 million in 1998. This acquisition will broaden the forestry product line and customer base for the company's construction equipment segment.

FINANCIAL INSTRUMENT RISK INFORMATION (UNAUDITED)

Sensitivity Analysis

    The following is a sensitivity analysis for the company's derivatives and other financial instruments which have interest rate risk. These instruments are held for other than trading purposes. The gains or losses in the following table represent the changes in the financial instruments' fair values which would be caused by decreasing the interest rates by 10 percent of the current market rates at October 31,1999 and increasing the interest rates by 10 percent of the current market rates at October 31, 1998. The fair values were determined based on the discounted values of their related cash flows. The gains or losses in fair values would have been as follows in millions of dollars:

	Fair Value Gains (Losses)
	1999			1998
Marketable securities	$	10		$	(13	)
Financing receivables		40			(37	)
Long-term borrowings and related swaps:
Equipment Operations borrowings		(48	)		28
Financial Services borrowings		(39	)		24
Interest rate and foreign currency swaps		23			(7	)
Total	$	(14	)	$	(5	)

Tabular Information

    The following foreign exchange forward contracts were held by the company to hedge certain currency exposures. Substantially all contracts have maturity dates of less than one year. The notional amounts and fair values in millions of dollars follow:

	Average Contractual Rate*	Notional Amount		Fair Value Gains (Losses)
October 31, 1999
Buy Deutsche Mark / Sell US$	1.8513	$	157	$	(1.3	)
Buy US$ / Sell British Pound	.6314		133		1.2
Buy US$ / Sell Brazilian Real	1.9633		132		.7
Buy US$ / Sell Deutsche Mark	1.8404		120		1.8
Buy US$ / Sell Canadian dollar	1.4694		76
Buy US$ / Sell Australian dollar	1.5475		47		(.4	)
Other contracts		113		(.6		)
Total		$	778	$	1.4
October 31, 1998
Buy US$ / Sell Canadian dollar	1.5390	$	240	$	2.2
Buy Deutsche Mark / Sell US$	1.6233		187		(1.7	)
Buy US$ / Sell Australian dollar	1.6189		86		(1.1	)
Buy British Pound / Sell US$	.5956		37		(.1	)
Buy French Franc / Sell US$	5.6281		34		.5
Buy Spanish Peseta / Sell US$	140.44		28		(1.9	)
Other contracts		85		(3.1		)
Total		$	697	$	(5.2	)

*

Currency per United States dollar (US$)

    At October 31, 1999 and 1998, the company had $131 million and $215 million of foreign exchange purchased options with a deferred premium of $5 million in both years. The premium is the maximum potential loss on these options, which are primarily held as hedges of expected inventory purchases. See pages 30 and 41 through 43 for further discussion of financial instruments including derivatives.

[LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

Deere & Company:

    We have audited the accompanying consolidated balance sheets of Deere & Company and subsidiaries as of October 31, 1999 and 1998 and the related statements of consolidated income, changes in consolidated stockholders' equity and consolidated cash flows for each of the three years in the period ended October 31, 1999. Our audits also included the financial statement schedule listed in the Index under Part IV, Item 14(a)(2). These financial statements and the financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

    We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Deere & Company and subsidiaries at October 31, 1999 and 1998 and the results of their operations and their cash flows for each of the three years in the period ended October 31, 1999 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Deloitte & Touche LLP

Chicago, Illinois
November 23, 1999

SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

    Each person signing below also hereby appoints Hans W. Becherer, Nathan J. Jones and Michael A. Harring, and each of them singly, his or her lawful attorney-in-fact with full power to execute and file any and all amendments to this report together with exhibits thereto and generally to do all such things as such attorney-in-fact may deem appropriate to enable Deere & Company to comply with the provisions of the Securities Exchange Act of 1934 and all requirements of the Securities and Exchange Commission.

DEERE & COMPANY
By:	/s/ HANS W. BECHERER Hans W. Becherer Chairman and Chief Executive Officer

Date: 25 January 2000

    Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Signature	Title	Date
/s/ HANS W. BECHERER Hans W. Becherer	Chairman, Director and Chief Executive Officer
/s/ JOHN R. BLOCK John R. Block	Director
/s/ C. C. BOWLES C. C. Bowles	Director
/s/ LEONARD A. HADLEY Leonard A. Hadley	Director	25 January 2000
/s/ REGINA E. HERZLINGER Regina E. Herzlinger	Director
/s/ SAMUEL C. JOHNSON Samuel C. Johnson	Director

Signature	Title	Date
/s/ NATHAN J. JONES Nathan J. Jones	Senior Vice President, Principal Financial Officer and Principal Accounting Officer
/s/ ARTHUR L. KELLY Arthur L. Kelly	Director
/s/ ANTONIO MADERO B. Antonio Madero B.	Director
/s/ WILLIAM A. SCHREYER William A. Schreyer	Director	25 January 2000
/s/ JOHN R. STAFFORD John R. Stafford	Director
/s/ JOHN R. WALTER John R. Walter	Director
/s/ ARNOLD R. WEBER Arnold R. Weber	Director

SCHEDULE II

DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended October 31, 1999, 1998 and 1997
(in thousands of dollars)

Column A	Column B		Column C					Column D			Column E
			Additions
					Charged to other accounts			Deductions
Description	Balance at beginning of period		Charged to costs and expenses								Balance at end of period
					Description	Amount		Description	Amount
YEAR ENDED OCTOBER 31, 1999
Allowance for doubtful receivables:
Equipment Operations
Dealer receivable allowances	$	31,339	$	5,604	Bad debt recoveries	$	3,149	Dealer receivable write-offs	$	6,065	$	34,027
Financial Services								Transfers related to retail note sales		20,901
Credit receivable allowances		89,800		67,947				Credit receivable write-offs		43,627		93,219
Consolidated receivable allowances	$	121,139	$	73,551		$	3,149		$	70,593	$	127,246
YEAR ENDED OCTOBER 31, 1998
Allowance for doubtful receivables:
Equipment Operations
Dealer receivable allowances	$	34,801	$	6,347	Bad debt recoveries	$	1,840	Dealer receivable write-offs	$	11,649	$	31,339
Financial Services								Transfers related to retail note sales		18,572
Credit receivable allowances		93,656		50,500				Credit receivable write-offs		35,784		89,800
Consolidated receivable allowances	$	128,457	$	56,847		$	1,840		$	66,005	$	121,139
YEAR ENDED OCTOBER 31, 1997
Allowance for doubtful receivables:
Equipment Operations
Dealer receivable allowances	$	34,850	$	12,768	Bad debt recoveries	$	1,419	Dealer receivable write-offs	$	14,236	$	34,801
Financial Services								Transfers related to retail note sales		6,157
Credit receivable allowances		93,498		38,206				Credit receivable write-offs		31,891		93,656
Consolidated receivable allowances	$	128,348	$	50,974		$	1,419		$	52,284	$	128,457

INDEX TO EXHIBITS

2.	Not applicable
3.1	Certificate of incorporation, as amended
3.2	Certificate of Designation Preferences and Rights of Series A Participating Preferred Stock (Exhibit 3.2 to Form 10-K of registrant for the year ended October 31, 1998*)
3.3	By-laws, as amended
4.1	Indenture dated October 1, 1998 between registrant and The Chase Manhattan Bank, as Trustee (Exhibit 4.1 to Form 10-K of registrant for the year ended October 31, 1998*)
4.2	Credit agreements among registrant, John Deere Capital Corporation, various financial institutions, and Chemical Bank, The Chase Manhattan Bank (National Association), Bank of America National Trust and Savings Association, Deutsche Bank AG, and The Toronto Dominion Bank, as Managing Agents, dated as of April 5, 1995 (Exhibit 4.1(a) and 4.1(b) to Form 10-Q of registrant for the period ended April 30, 1995*)
4.3	Credit agreements among John Deere Limited, John Deere Finance Limited, various financial institutions and The Toronto-Dominion Bank as agent, dated as of April 5, 1995 (Exhibit 4.2(a) and 4.2(b) to Form  10-Q of registrant for the quarter ended April 30, 1995*)
4.4	Amended and restated credit agreements among the registrant, John Deere Capital Corporation, various financial institutions and The Chase Manhattan Bank, Bank of America National Trust and Savings Association, Deutsche Bank AG New York Branch, The Toronto-Dominion Bank, Morgan Guaranty Trust Company of New York, NationsBank, N.A. and The First National Bank of Chicago as Managing Agents dated as of February 24, 1998 (Exhibit 4.1 to Form  10-Q of the registrant for the quarter ended April 30, 1998*)
4.5	Third Amending Agreements to Loan Agreements among John Deere Limited, John Deere Credit Inc., various financial institutions and The Toronto-Dominion Bank as agent, dated as of February 24, 1998 (Exhibit 4.2 to Form 10-Q of the registrant for the quarter ended April 30, 1998*)
4.6	Amended and restated credit agreement among registrant, John Deere Capital Corporation, various financial institutions, and The Chase Manhattan Bank, Bank of Americas National Trust and Savings Association, Deutsche Bank  AG New York Branch, and The Toronto-Dominion Bank, as Managing Agents, dated as of February 23, 1999 (Exhibit 4 to Form 8-K of registrant dated May 18, 1999*)
4.7	Form of common stock certificate (Exhibit 4.6 to Form 10-K of registrant for the year ended October 31, 1998*)
4.8	Rights Agreement dated as of December 3, 1997 between registrant and The Bank of New York (Exhibit 1 to the registration statement on Form 8-A of registrant filed December 10, 1997*)
Certain instruments relating to long-term debt constituting less than 10% of the registrant's total assets, are not filed as exhibits herewith pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. The registrant will file copies of such instruments upon request of the Commission.
9.	Not applicable
10.1	Agreement as amended November 1, 1994 between registrant and John Deere Capital Corporation concerning agricultural retail notes (Exhibit 10.1 to Form 10-K of registrant for the year ended October 31, 1998*)
10.2	Agreement as amended November 1, 1994 between registrant and John Deere Capital Corporation relating to lawn and grounds care retail notes (Exhibit 10.2 to Form 10-K of registrant for the year ended October  31, 1998*)
10.3	Agreement as amended November 1, 1994 between John Deere Construction Equipment Company, a wholly-owned subsidiary of registrant and John Deere Capital Corporation concerning construction retail notes (Exhibit  10.3 to Form 10-K of registrant for the year ended October 31, 1998*)
10.4	Agreement dated July 14, 1997 between the John Deere Construction Equipment Company and John Deere Capital Corporation concerning construction retail notes (Exhibit 10.8 to John Deere Capital Corporation Form  10-K for the year ended October 31, 1997 Securities and Exchange Commission file number 1-6458*)
10.5	Agreement dated October 15, 1996 between registrant and John Deere Capital Corporation relating to fixed charges ratio, ownership and minimum net worth of John Deere Capital Corporation. (Exhibit 10.7 to John Deere Capital Corporation Form 10-K for the year ended October 31, 1996 Securities and Exchange Commission file number 1-6458*)
10.6	Deere & Company Voluntary Deferred Compensation Plan (Exhibit 10.9 to Form 10-K405 of registrant for the year ended October 31, 1998*) **
10.7	John Deere Performance Bonus Plan (Exhibit B to Notice and Proxy Statement of registrant for the annual shareholder meeting on February 23, 2000*) **
10.8	1986 John Deere Stock Option Plan (Exhibit 10.7 to Form 10-K of registrant for the year ended October 31, 1998*) **
10.9	1991 John Deere Stock Option Plan **
10.10	John Deere Restricted Stock Plan (Appendix to Notice and Proxy Statement of registrant for the annual shareholder meeting on February 28, 1996*) **
10.11	John Deere Equity Incentive Plan (Exhibit C to Notice and Proxy Statement of registrant for the annual shareholder meeting on February 23, 2000*) **
10.12	John Deere Omnibus Equity and Incentive Plan (Exhibit A to Notice and Proxy Statement of registrant for the annual shareholder meeting on February 23, 2000*) **
10.13	John Deere Defined Contribution Restoration Plan (Exhibit 10.15 to Form 10-K of the registrant for the year ended October 31, 1997*) **
10.14	John Deere Supplemental Pension Benefit Plan, as amended November 1, 1999 **
10.15	1993 Nonemployee Director Stock Ownership Plan as amended August 25, 1999 **
10.16	Deere & Company Nonemployee Director Deferred Compensation Plan as amended May 26, 1999 **
12.	Computation of ratio of earnings to fixed charges
13.	Not applicable
16.	Not applicable
18.	Not applicable
21.	Subsidiaries
22.	Not applicable
23.	Consent of Deloitte & Touche LLP
24.	Not applicable
27.	Financial Data Schedule

*

Incorporated by reference. Copies of these exhibits are available from the Company upon request.

**

Compensatory plan or arrangement filed as an exhibit pursuant to Item 14(c) of Form 10-K.

QuickLinks

PART III
PART IV

EX-3.1

                                                                    EXHIBIT 3.1
                               DEERE & COMPANY
                         CERTIFICATE OF INCORPORATION
                    RESTATED CERTIFICATE OF INCORPORATION

                         As Adopted February 27, 1985
                        (As Amended February 25, 1987)
                        (As Amended November 17, 1995)

(The original certificate was filed with the Secretary of State of Delaware on
April 25, 1958, under the original name of John Deere & Company)


        FIRST. The name of the corporation is Deere & Company.

        SECOND. The registered office of the corporation in the State of
Delaware is located at 1209 Orange Street in the City of Wilmington, County
of New Castle. The name of the registered agent of the corporation is The
Corporation Trust Company.

        THIRD. The purpose of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.

        FOURTH. The stock that the corporation shall have authority to issue
is 609,000,000 shares, of which 600,000,000 shares shall be common stock, $1
par value (common stock), and 9,000,000 shares shall be preferred stock, $1
par value (preferred stock), issuable in series.

                          1. COMMON STOCK PROVISIONS

        1.1  DIVIDEND RIGHTS. Subject to provisions of law and the
preferences of the preferred stock, the holders of the common stock shall be
entitled to receive dividends at such time and in such amounts as may be
determined by the board of directors.

        1.2  VOTING RIGHTS. Except as provided in the final two paragraphs of
section 2.6, the holders of the common stock shall have one vote for each
share on each matter submitted to a vote of the stockholders of the
corporation. Except as otherwise provided by law, or by the provisions of the
certificate of incorporation or any amendment thereto, or by resolutions of
the board of directors providing for the issue of any series of preferred
stock, the holders of the common stock shall have sole voting power.

        1.3  LIQUIDATION RIGHTS. In the event of any liquidation, dissolution
or winding up of the corporation, whether voluntary or involuntary, after
payment or provision for payment of the debts and other liabilities of the
corporation and the preferential amounts to which the holders of the
preferred stock shall be entitled, the holders of the common stock shall be
entitled to share ratably in the remaining assets of the corporation.



                        2. PREFERRED STOCK PROVISIONS

        2.1  AUTHORITY OF THE BOARD OF DIRECTORS TO ISSUE IN SERIES. The
preferred stock may be issued from time to time in one or more series.
Subject to the provisions of the certificate of incorporation or any
amendment thereto, authority is expressly granted to the board of directors
to authorize the issue of one or more series of preferred stock, and to fix
by resolutions providing for the issue of each such series the voting powers,
designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations and restrictions thereof
(sometimes referred to as powers, preferences and rights), to the full extent
now or hereafter permitted by law, including but not limited to the following:

                2.11  The number of shares of such series (which may
subsequently be increased by resolutions of the board of directors) and the
distinctive designation thereof;

                2.12  The dividend rate of such series and any limitations,
restrictions or conditions on the payment of such dividends;

                2.13  The price or prices at which, and the terms and
conditions on which, the shares of such series may be redeemed;

                2.14  The amounts which the holders of the shares of such
series are entitled to receive upon any liquidation, dissolution or winding
up of the corporation;

                2.15  The terms of any purchase, retirement or sinking fund
to be provided for the shares of such series;

                2.16  The terms, if any, upon which the shares of such series
shall be convertible into or exchangeable for shares of any other series,
class or classes, or other securities, and the terms and conditions of such
conversion or exchange;

                2.17  The voting powers, if any, of such series in addition
to the voting powers provided in this article.

                The preferred stock of each series shall rank on a parity
with the preferred stock of every other series in priority of payment of
dividends and in the distribution of assets in the event of any liquidation,
dissolution or winding up of the corporation, whether voluntary or
involuntary, to the extent of the preference to which the preferred stock of
the respective series shall be entitled under the provisions of the
certificate of incorporation or any amendment thereto or the resolutions of
the board of directors providing for the issue of such series. All shares of
any one series of preferred stock shall be identical except as to the dates
of issue and the dates from which dividends on shares of the series issued on
different dates shall accumulate (if cumulative).

        2.2  DEFINITIONS

                2.21  The term "arrearages," whenever used in connection with
dividends on any share of preferred stock, shall refer to the condition that
exists as to dividends, to the extent that they are cumulative (either
unconditionally, or conditionally to the extent that

                                       2


the conditions have been fulfilled), on such share which shall not have been
paid or declared and set apart for payment to the date or for the period
indicated; but the term shall not refer to the condition that exists as to
dividends, to the extent that they are non-cumulative, on such share which
shall not have been paid or declared and set apart for payment.

                2.22  The term "stock junior to the preferred stock,"
whenever used with reference to the preferred stock, shall mean the common
stock and other stock of the corporation over which the preferred stock has
preference or priority in the payment of dividends or in the distribution of
assets on any dissolution, liquidation or winding up of the corporation.

                2.23  The term "subsidiary" shall mean any corporation,
association or business trust, the majority of whose outstanding shares (at
the time of determination) having voting power for the election of directors
or trustees, either at all times or only so long as no senior class of shares
has such voting power because of arrearages in dividends or because of the
existence of some default, is owned directly or indirectly by the corporation.

        2.3  DIVIDEND RIGHTS

                2.31  The holders of the preferred stock of each series shall
be entitled to receive, when and as declared by the board of directors,
preferential dividends in cash payable at such rate, from such date, and on
such quarterly dividend payment dates and, if cumulative, cumulative from
such date or dates, as may be fixed by the resolutions of the board of
directors providing for the issue of such series. The holders of the
preferred stock shall not be entitled to receive any dividends thereon other
than those specifically provided for by the certificate of incorporation or
any amendment thereto, or such resolutions of the board of directors, nor
shall any arrearages in dividends on the preferred stock bear any interest.

                2.32  So long as any of the preferred stock is outstanding,
no dividends (other than dividends payable in stock junior to the preferred
stock or in options, rights or warrants to purchase or acquire such stock
junior to the preferred and cash in lieu of fractional shares in connection
with any such dividend) shall be paid or declared in cash or otherwise, nor
shall any other distribution be made, on any stock junior to the preferred
stock, unless

                        2.321  there shall be no arrearages in dividends on
preferred stock for any past quarterly dividend period, and dividends in full
for the current quarterly dividend period shall have been paid or declared on
all preferred stock (cumulative and non-cumulative); and

                        2.322  the corporation shall have paid or set aside
all amounts, if any, then or theretofore required to be paid or set aside for
all sinking funds, if any, for the preferred stock of any series; and

                        2.323  the corporation shall not be default on any of
its obligations to redeem any of the preferred stock.

                                       3


                2.33  So long as any of the preferred stock is outstanding,
no shares of any stock junior to the preferred stock shall be purchased,
redeemed or otherwise acquired by the corporation or by any subsidiary except
in connection with a reclassification or exchange of any stock junior to the
preferred stock through the issuance of other stock junior to the preferred
stock (or of options, rights or warrants to purchase or acquire such stock
junior to the preferred), or the purchase, redemption or other acquisition of
any stock junior to the preferred stock with proceeds of a reasonably
contemporaneous sale of other stock junior to the preferred stock (or of
options, rights or warrants to purchase or acquire such stock junior to the
preferred), nor shall any funds be set aside or made available for any
sinking fund for the purchase or redemption of any stock junior to the
preferred stock, unless

                        2.331  there shall be no arrearages in dividends on
preferred stock for any past quarterly dividend period; and

                        2.332  the corporation shall have paid or set aside
all amounts, if any, then or theretofore required to be paid or set aside for
all sinking funds, if any, for the preferred stock of any series; and

                        2.333  the corporation shall not be in default on any
of its obligations to redeem any of the preferred stock.

                2.34  Subject to the foregoing provisions and not otherwise,
such dividends (payable in cash, property or stock junior to the preferred
stock or in options, rights or warrants to purchase or acquire such stock
junior to the preferred) as may be determined by the board of directors may
be declared and paid on the shares of any stock junior to the preferred stock
from time to time, and in the event of the declaration and payment of any
such dividends, the holders of such stock junior to the preferred shall be
entitled, to the exclusion of holders of the preferred stock, to share
ratably therein according to their respective interests.

                2.35  Dividends in full shall not be declared or paid or set
apart for payment on any series of preferred stock, unless there shall be no
arrearages in dividends on preferred stock for any past quarterly dividend
period and dividends in full for the current quarterly dividend period shall
have been paid or declared on all preferred stock to the extent that such
dividends are cumulative, and any dividends paid or declared when dividends
are not so paid or declared in full shall be shared ratably by the holders of
all series of preferred stock in proportion to such respective arrearages and
unpaid and undeclared current quarterly cumulative dividends.

        2.4  LIQUIDATION RIGHTS

                2.41  In the event of any liquidation, dissolution or winding
up of the corporation, whether voluntary or involuntary, the holders of
preferred stock of each series shall be entitled to receive the full
preferential amount fixed by the certificate of incorporation or any
amendment thereto, or by the resolutions of the board of directors providing
for the issue of such series, including any arrearages in dividends thereon
to the date fixed for the payment in liquidation, before any distribution
shall be made to the

                                       4


holders of any stock junior to the preferred stock. After such payment in
full to the holders of the preferred stock, the remaining assets of the
corporation shall then be distributable exclusively among the holders of any
stock junior to the preferred stock outstanding, according to their
respective interests.

                2.42  If the assets of the corporation are insufficient to
permit the payment of the full preferential amounts payable to the holders of
the preferred stock of the respective series in the event of a liquidation,
dissolution or winding up, then the assets available for distribution to
holders of the preferred stock shall be distributed ratably to such holders
in proportion to the full preferential amounts payable on the respective
shares.

                2.43  A consolidation or merger of the corporation with or
into one or more other corporations or a sale of all or substantially all of
the assets of the corporation shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary.

        2.5  REDEMPTION

                2.51  The provisions of this section 2.5 shall apply only to
those series of preferred stock to which such provisions are expressly made
applicable by resolutions of the board of directors providing for the issue
of such series.

                2.52  At the option of the board of directors, the
corporation may redeem the whole or any part of the preferred stock, or of
any series thereof, at any time or from time to time within the period during
which such stock is by its terms redeemable at the option of the board of
directors, by paying such redemption price thereof as shall have been fixed
by the resolutions of the board of directors providing for the issue of the
preferred stock to be redeemed, including an amount in the case of each share
so to be redeemed equal to any arrearages in dividends thereon to the date
fixed for redemption (the total amount so to be paid being hereinafter called
the "redemption price").

                2.53  Unless expressly provided otherwise in the resolutions
of the board of directors providing for the issue of the preferred stock to
be redeemed, (i) notice of each such redemption shall be mailed not less than
thirty days nor more than ninety days prior to the date fixed for redemption
to each holder of record of shares of the preferred stock to be redeemed, at
his address as the same may appear on the books of the corporation, and (ii)
in case of a redemption of a part only of any series of the preferred stock,
the shares of such series to be redeemed shall be selected pro rata or by lot
or in such other manner as the board of directors may determine. The board of
directors shall have full power and authority, subject to the limitations and
provisions contained in the certificate of incorporation or any amendment
thereto or in the resolutions of the board of directors providing for the
issue of the preferred stock to be redeemed, to prescribe the manner in which
and the terms and conditions upon which the preferred stock may be redeemed
from time to time.

                2.54  If any such notice of redemption shall have been duly
given, then on and after the date fixed in such notice of redemption (unless
default shall be made by the corporation in the payment or deposit of the
redemption price pursuant to such notice) all arrearages in dividends, if
any, on the shares of preferred stock so called for redemption shall cease to
accumulate, and on such date all rights of the holders of the preferred stock

                                       5


so called for redemption shall cease and terminate except the right to
receive the redemption price upon surrender of their certificates for
redemption and such rights, if any, of conversion or exchange as may exist
with respect to such preferred stock under the resolutions of the board of
directors providing for the issue of such preferred stock.

                2.55  If, before the redemption date specified in any notice
of the redemption of any preferred stock, the corporation shall deposit the
redemption price with a bank or trust company in Chicago, Illinois or New
York, New York having a capital and surplus of at least $5,000,000 according
to its last published statement of condition, in trust for payment on the
redemption date to the holders of the preferred stock to be redeemed, from
and after the date of such deposit all rights of the holders of the preferred
stock so called for redemption shall cease and terminate except the right to
receive the redemption price upon surrender of their certificates for
redemption and such rights, if any, of conversion or exchange as may exist
with respect to such preferred stock under the resolutions of the board of
directors providing for the issue of such preferred stock. Any funds so
deposited which are not required for such redemption because of the exercise
of any such right of conversion or exchange subsequent to the date of such
deposit shall be returned to the corporation forthwith. The corporation shall
be entitled to receive from the depositary, from time to time, the interest,
if any allowed on such funds deposited with it, and the holders of the shares
so redeemed shall have no claim to any interest. Any funds so deposited and
remaining unclaimed at the end of six years from the redemption date shall,
if thereafter requested by the board of directors, be repaid to the
corporation.

                2.56  Shares of preferred stock of any series may also be
subject to redemption through operation of any sinking fund created therefor,
in the manner hereinabove prescribed under section 2.5, at the redemption
prices and under the terms and provisions contained in the resolutions of the
board of directors providing for the issue of such series.

                2.57  The corporation shall not be required to register a
transfer of any share of preferred stock (i) within fifteen days preceding a
selection for redemption of shares of the series of preferred stock of which
such share is a part or (ii) which has been selected for redemption.

                2.58  During the continuance of any arrearages in dividends
for any past quarterly dividend period or a failure in fulfillment of any
sinking fund or redemption obligation on any series of preferred stock, the
corporation shall not purchase or redeem any shares of preferred stock or of
any other stock ranking on a parity with the preferred stock as to dividends
or upon liquidation, nor permit any subsidiary to do so, without the consent
given in writing or affirmative vote given in person or by proxy at a meeting
called for the purpose, by the holders of at least 66-2/3 percent of all the
shares of preferred stock then outstanding; provided that (i) to meet the
requirements of any purchase, retirement or sinking fund provisions with
respect to any series, the corporation may use shares of such series acquired
by it prior to such arrearages in dividends or failure of payment and then
held by it as treasury stock, valued at redemption price, and (ii) the
corporation may complete the purchase or redemption of shares of preferred
stock for which a purchase contract was entered into for any purchase,
retirement or sinking fund purposes, or the notice of redemption of which was
initially mailed, prior to such arrearages in dividends or failure of payment.

                                       6


                2.59  If any obligation to retire shares of preferred stock
is not paid in full on all series as to which such obligation exists, the
number of shares of each such series to be retired pursuant to any such
obligation shall be in proportion to the respective amounts which would be
payable if all amounts payable for the retirement of all such series were
discharged in full.

        2.6  RESTRICTIONS ON CERTAIN ACTION AFFECTING PREFERRED STOCK. The
corporation will not, without the consent given in writing or affirmative
vote given in person or by proxy at a meeting called for the purpose,

                2.61  by the holders of at least 66-2/3 percent of all the
shares of preferred stock then outstanding, (i) create any other class or
classes of stock ranking prior to the preferred stock, either as to dividends
or upon liquidation, or create any stock or other security convertible into
or exchangeable for or evidencing the right to purchase any such stock so
ranking prior to the preferred stock, or increase the authorized number of
shares of any such other class of stock or other security, (ii) amend, alter
or repeal any of the provisions of the certificate of incorporation or any
amendment thereto so as to affect adversely the powers, preferences or rights
of the holders of the preferred stock; or

                2.62  by the holders of at least 66-2/3 percent of the shares
of any series of preferred stock then outstanding, amend, alter or repeal any
of the provisions of the certificate of incorporation or any amendment
thereto or of the resolutions of the board of directors providing for the
issue of such series so as to affect adversely the powers, preferences or
rights of the holders of the preferred stock of such series; or

                2.63  by the holders of at least a majority of all the shares
of preferred stock then outstanding, (i) increase the authorized amount of
the preferred stock, or (ii) create any other class or classes of stock
ranking on a parity with the preferred stock, either as to dividends of upon
liquidation, or create any stock or other security convertible into or
exchangeable for or evidencing the right to purchase any such stock ranking
on a parity with the preferred stock, or increase the authorized number of
shares of any such other class of stock or other security.

                If an amendment described in clause (ii) of subsection 2.61
would in no way affect adversely the powers, preferences or rights of the
holders of any stock of the corporation other than the preferred stock, such
amendment may be made effective by the adoption and filing of an appropriate
amendment to the certificate of incorporation of the corporation without
obtaining the consent or vote of the holders of any stock of the corporation
other than the preferred stock.

                If an amendment described in subsection 2.62 would in no way
affect adversely the powers, preferences or rights of the holders of any
stock of the corporation other than the preferred stock of such series, such
amendment may be made effective by the adoption and filing of an appropriate
amendment to the certificate of incorporation of the corporation without
obtaining the consent or vote of the holders of any stock of the corporation
other than the preferred stock of such series.


                                       7


        2.7  ELECTION OF DIRECTORS BY HOLDERS OF CERTAIN PREFERRED STOCK IN
                EVENT OF NON-DECLARATION OF DIVIDENDS.

                2.71  The provisions under section 2.7 shall apply only to
those series of preferred stock (applicable preferred stock) to which such
provisions are expressly made applicable by resolutions of the board of
directors providing for the issue of such series.

                2.72  Whenever declarations of dividends (including
non-cumulative dividends) on any share of any series of applicable preferred
stock shall be omitted in an aggregate amount equal to six quarterly
dividends on such share the holders of the applicable preferred stock shall
have the exclusive and special right (in addition to any other voting
rights), voting separately as a class and without regard to series, to elect
at an annual meeting of stockholders or special meeting held in place
thereof, or at a special meeting of the holders of the applicable preferred
stock called as hereinafter provided, two members of the board of directors,
until four consecutive quarterly dividends shall have been paid on or
declared and set apart for payment on such share, if the share is
non-cumulative, or until all arrearages in dividends and dividends in full
for the current quarterly period shall have been paid or declared and set
apart for payment on the share, if the share is cumulative, whereupon all
voting rights as a class provided for under section 2.7 shall be divested
from the applicable preferred stock (subject, however, to being at any time
or from time to time similarly revived if declarations of dividends for
subsequent quarterly periods shall be omitted).

                2.73  At any time after the holders of the applicable
preferred stock shall have thus become entitled to elect two members of the
board of directors, the secretary of the corporation may, and upon written
request of holders of record of at least 10 percent of the shares of the
applicable preferred stock then outstanding addressed to him at the principal
office of the corporation shall, call a special meeting of the holders of the
applicable preferred stock for the purpose of electing such directors, to be
held at the place of annual meetings of shareholders of the corporation as
soon as practicable after the receipt of such request upon the notice
provided  by law and the bylaws of the corporation for the holding of special
meetings of shareholders; provided, however, that the secretary need not call
any such special meeting if the next annual meeting of stockholders is to
convene within ninety days after the receipt of such request. If such special
meeting shall not be called by the secretary within thirty days after receipt
of such request (not including, however, a request falling within the proviso
to the foregoing sentence), then the holders of record of at least 10 percent
of the shares of the applicable preferred stock then outstanding may
designate in writing one of their number to call such a meeting at the place
and upon the notice above provided, and any person so designated for that
purpose shall have access to the stock records of the corporation for such
purpose.

                2.74  At any meeting at which the holders of the applicable
preferred stock shall be entitled to vote for the election of such two
directors as above provided, the holders of 33-1/3 percent of the applicable
preferred stock then outstanding present in person or by proxy shall
constitute a quorum for the election of such two directors and for no other
purpose, and the vote of the holders of a majority of the applicable
preferred stock so present at any such meeting at which there shall be such a
quorum shall be sufficient to elect two directors. The election of such
directors or one such director shall


                                       8


automatically increase the number of members of the board of directors by the
number of directors so elected. The classes in which such directors serve, as
provided by article sixth, may be designated by the holders of the applicable
preferred stock, unless such classes have been previously designated by the
board of directors. The persons so elected as directors by the holders of the
applicable preferred stock shall hold office until their successors shall
have been elected by such holders or until the right of the holders of the
applicable preferred stock to vote as a class in the election of directors
shall be divested as provided in subsection 2.72. Upon divestment of the
right to elect directors as above provided, any directors so elected by the
holders of the applicable preferred stock shall forthwith cease to be
directors of the corporation, and the number of directorships shall
automatically be reduced accordingly. If a vacancy occurs in a directorship
elected by the holders of the applicable preferred stock voting as a class, a
successor may be appointed by the remaining director so elected by the
holders of the applicable preferred stock.

                2.75  At any such meeting or any adjournment thereof, (i) the
absence of a quorum of the holders of the applicable preferred stock shall
not prevent the election of the directors other than those to be elected by
the holders of the applicable preferred stock voting as a class, and the
absence of a quorum of holders of the shares entitled to vote for directors
other than those to be elected by the holders of the applicable preferred
stock voting as a class, shall not prevent the election of the directors to
be elected by the holders of the applicable preferred stock voting as a
class, and (ii) in the absence of a quorum of the holders of the applicable
preferred stock, the holders of a majority of the applicable preferred stock
present in person or by proxy shall have power to adjourn from time to time
the meeting for the election of the directors which they are entitled to
elect voting as a class, without notice other than announcement at the
meeting, until a quorum shall be present, and in the absence of a quorum of
the holders of the shares entitled to vote for directors other than those
elected by the holders of the applicable preferred stock voting as a class,
the holders of a majority of such stock present in person or by proxy shall
have power to adjourn from time to time the meeting for the election of the
directors which they are entitled to elect, without notice other than
announcement at the meeting, until a quorum shall be present.

        3. OTHER PROVISIONS

        3.1  AUTHORITY FOR ISSUANCE OF SHARES. The board of directors shall
have authority to authorize the issuance, from time to time without any vote
or other action by the stockholders, of any or all shares of stock of the
corporation of any class at any time authorized, and any securities
convertible into or exchangeable for any such shares, and any options, rights
or warrants to purchase or acquire any such shares, in each case to such
persons and on such terms (including as a dividend or distribution on or with
respect to, or in connection with a split or combination of, the outstanding
shares of stock of the same or any other class) as the board of directors
from time to time in its discretion lawfully may determine; provided,
however, that the consideration for the issuance of shares of stock of the
corporation having par value (unless issued as such a dividend or
distribution or in connection with such a split or combination) shall not be
less than such par value. Shares so issued, shall be full paid stock, and the
holders of such stock shall not be liable to any further call or assessments
thereon.


                                       9


        3.2  ABANDONMENT OF DIVIDENDS AND DISTRIBUTIONS. Anything herein
contained to the contrary notwithstanding, any and all right, title,
interest, and claim in or to any dividends declared, or other distributions
made, by the corporation, whether in cash, stock or otherwise, which are
unclaimed by the stockholder entitled thereto for a period of six years after
the close of business on the payment date, shall be and be deemed to be
extinguished and abandoned; and such unclaimed dividends or other
distributions in the possession of the corporation, its transfer agents or
other agents or depositaries, shall at such time become the absolute property
of the corporation, free and clear of any and all claims of any persons
whatsoever.

        FIFTH. The board of directors shall have authority to adopt, make,
alter and repeal the bylaws of the corporation.

        SIXTH. The business and affairs of the corporation shall be managed
by or under the direction of a board of directors consisting of not less than
three nor more than eighteen directors. The exact number shall be determined
from time to time by resolution adopted by the affirmative vote of a majority
of the directors in office at the time of adoption of such resolution.

                The directors shall be divided into three classes, each class
consisting, as nearly as may be possible, of one-third of the total number of
directors constituting the entire board of directors. At each annual meeting
of stockholders, successors to the class of directors whose term expires at
that annual meeting shall be elected for a three-year term. If the number of
directors is changed, any increase or decrease shall be apportioned among the
classes by the board of directors so as to maintain the number of directors
in each class as nearly equal as possible, and any additional director of any
class elected to fill a vacancy resulting from an increase in such class
shall hold office for a term that shall coincide with the remaining term of
that class. In no case will a decrease in the number of directors shorten the
term of any incumbent director even though such decrease may result in an
inequality of the classes until the expiration of such term. A director shall
hold office until the annual meeting for the year in which his term expires
and until his successor shall be elected and shall qualify, subject, however,
to prior death, resignation, retirement or removal from office. No director
may be removed except for cause. Any vacancy on the board of directors that
results from an increase in the number of directors may be filled by a
majority of the board of directors then in office, and any other vacancy
occurring on the board of directors may be filled by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. Any director elected to fill a vacancy not resulting from an
increase in the number of directors shall have the same remaining term as
that of his predecessor.

                Notwithstanding the foregoing, whenever the holders of any
one or more classes or series of preferred stock issued by the corporation
shall have the right, voting separately by class or series, to elect
directors at an annual or special meeting of stockholders, the election, term
of office, filling of vacancies and other features of such directorships
shall be governed by the terms of this certificate of incorporation
applicable thereto, and such directors so elected shall not be divided into
classes pursuant to this article sixth unless expressly provided by such
terms.


                                      10


        SEVENTH. Each person who is or was a director or officer of the
corporation, and each person who serves or served at the request of the
corporation as a director or officer (or equivalent) of another enterprise,
shall be indemnified by the corporation to the fullest extent authorized by
the General Corporation Law of Delaware as it may be in effect from time to
time, except as to any action, suit or proceeding brought by or on behalf of
a director or officer without prior approval of the board of directors.

        EIGHTH. No stockholder action required to be taken or which may be
taken at any annual or special meeting of stockholders of the corporation may
be taken without a meeting, and the power of stockholders to consent in
writing without a meeting to the taking of any action is specifically denied.

        NINTH. No director shall be personally liable to the corporation or
its stockholders for monetary damages for any breach of fiduciary duty by
such director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law (i) for
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to
Section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which the director derived an improper personal benefit. No
amendment to or repeal of this Article NINTH shall apply to or have any
effect on the liability or alleged liability of any director of the
corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment.


                                      11

EX-3.3

                                                                    EXHIBIT 3.3
                                    BYLAWS
                                      of
                               DEERE & COMPANY
              (Adopted July 30, 1958; Amended December 1, 1999 )

                          ARTICLE I - IDENTIFICATION

SECTION 1.  NAME.  The name of the Company is Deere & Company (hereinafter
referred to as the "Company").

SECTION 2.  OFFICES.  The principal office of the Company in Delaware shall
be in the City of Wilmington, County of New Castle, State of Delaware. The
Company may maintain, change or discontinue its other offices, including its
principal business office in the County of Rock Island, State of Illinois,
and may have such other offices both within and outside of the State of
Delaware as its business may require.

SECTION 3.  SEAL.  The seal of the Company shall be circular in form and
mounted upon a metal die, suitable for impressing the same upon paper. About
the upper periphery of the seal shall appear the words "Deere & Company" and
about the lower periphery thereof the word "Delaware". In the center of the
seal shall appear a representation of a leaping deer.

SECTION 4.  FISCAL YEAR.  The fiscal year of the Company shall begin on the
first day of November in each calendar year and end on the last day of
October in the following calendar year.

                        ARTICLE II - THE STOCKHOLDERS

SECTION 1.  PLACE OF MEETINGS.  Annual meetings of the stockholders for the
election of directors shall be held at the principal business office of the
Company in Rock Island County, State of Illinois. Meetings of the
stockholders for any other purpose may be held at such place within the State
of Delaware or the State of Illinois as may be specified by the Chairman or
the Board of Directors.

SECTION 2.  ANNUAL MEETING.  The annual meeting of the stockholders, at which
they shall elect directors by ballot and by plurality vote and may transact
such other business as may properly be brought before the meeting in
accordance with Section 3 of Article II of these Bylaws, shall be held at ten
o'clock in the morning, local time, on the last Wednesday in February of each
year or on such business day and at such time and at such place as may be
designated by the Board of Directors. If the date designated for the annual
meeting is a legal holiday then the annual meeting shall be held on the first
following day that is not a legal holiday.

SECTION 3.  NOMINATION OF DIRECTORS AND OTHER BUSINESS.

(a)     Only persons who are nominated in accordance with the following
        procedures shall be eligible for election as directors. Nominations of
        persons for election as directors may be made at a meeting of
        stockholders only (i) by or at the direction of the Board of Directors,
        (ii) by any person or persons authorized to do so by the Board or (iii)
        by any stockholder of the Company entitled to vote for the election of
        directors at the meeting who complies with the notice procedures set
        forth in this Section 3. Such nomination, other than those made by or at
        the direction of the Board or by persons authorized by the Board, shall
        be made pursuant to timely notice in writing to the Secretary of the


                                       1


        Company. Such stockholder's notice to the Secretary of a proposed
        nomination shall set forth, as to each person whom the stockholder
        proposes to nominate for election or re-election as a director, (i) the
        name, age, business address and residence address of the person, (ii)
        the principal occupation or employment of the person, (iii) the class
        and number of shares of capital stock of the Company which are
        beneficially owned by the person, and (iv) any other information
        relating to the person that is required to be disclosed in solicitations
        for proxies for election of directors pursuant to Regulation 14A under
        the Securities Exchange Act of 1934, as now or hereafter amended; such
        notice shall further set forth, as to the stockholder giving the notice,
        (i) the name and record address of such stockholder and (ii) the class
        and number of shares of the Company which are beneficially owned by such
        stockholder. The Company may require any proposed nominee to furnish
        such other information as may reasonably be required by the Company to
        determine the eligibility of such proposed nominee to serve as director.
        No person shall be eligible for election as a director of the Company
        unless nominated in accordance with the procedures set forth herein and
        unless qualified under the other provisions of these bylaws. If the
        Chairman of the meeting determines that a nomination was not made in
        accordance with the foregoing procedure, he shall so declare to the
        meeting and the defective nomination shall be disregarded.

(b)     To be properly brought before any annual or special meeting of
        stockholders, business must be either (i) specified in the notice of
        meeting (or any supplement thereto) given by or at the direction of the
        Board, (ii) otherwise properly brought before the meeting by or at the
        direction of the Board, or (iii) otherwise properly brought before the
        meeting by a stockholder. In addition to any other applicable
        requirements, for business to be properly brought before a meeting by
        a stockholder, the stockholder must have given timely notice thereof in
        writing to the Secretary of the Company. A stockholder's notice to the
        Secretary shall set forth with respect to each matter the stockholder
        proposes to bring before the meeting (i) a brief description of the
        business desired to be brought before the meeting and the reasons for
        conducting such business at the meeting, (ii) the name and record
        address of the stockholder proposing such business, (iii) the class and
        number of shares of the Company which are beneficially owned by the
        stockholder, and (iv) any material interest of the stockholder in such
        business. Notwithstanding anything in these bylaws to the contrary, no
        business shall be conducted at any meeting of stockholders except in
        accordance with the procedures set forth in this Section 3, PROVIDED,
        HOWEVER, that nothing in this Section 3 shall be deemed to preclude
        discussion by any stockholder of any business properly brought before
        the meeting. If the Chairman of the meeting determines that such
        business was not properly brought before the meeting in accordance with
        the foregoing procedure, he shall so declare to the meeting, any such
        business not properly brought before the meeting shall not be
        transacted.

(c)     To be timely, a stockholder's notice of nomination or other business
        must be delivered to, or mailed and received at, the principal executive
        offices of the Company, not less than 90 days nor more than 120 days
        prior to the meeting; PROVIDED, HOWEVER, that in the event that less
        than 105 days' notice or prior public disclosure of the date of the
        meeting is given or made to stockholders, notice by the stockholder to
        be timely must be so received not later than the close of business on
        the 15th day following the day on which such notice of the date of the
        annual meeting was mailed or such public disclosure was made, whichever
        first occurs.

SECTION 4.  SPECIAL MEETINGS.  Special meetings of the stockholders may be
called by the Chairman or the Board of Directors. The business transacted at
any special meeting of the stockholders shall be limited to the purposes
stated in the notice for the meeting.

                                       2


SECTION 5.  NOTICE OF MEETINGS.  Written notice of each meeting of
stockholders, stating the place, day and hour of the meeting and, in case of
a special meeting, the purpose or purposes for which the meeting is called,
shall be delivered not less than ten nor more than sixty days before the date
of the meeting, either personally or by mail, by or at the direction of the
Chairman or the Secretary to each stockholder of record entitled to vote at
such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail addressed to the stockholder at his
address as it appears on the stock transfer books of the Company, with
postage thereon prepaid.

SECTION 6.  FIXING OF RECORD DATES.  In order that the Company may determine
the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, the Board of Directors may
fix, in advance, a record date, which shall not be more than sixty nor less
than ten days before the date of such meeting, nor more than sixty days prior
to any other action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors
may fix a new record date for the adjourned meeting.

SECTION 7.  VOTING LIST.  The Secretary shall prepare and make, or cause to
be prepared and made, at least ten days before every meeting of stockholders,
a complete list of the stockholders entitled to vote at such meeting,
arranged in alphabetical order, showing the address of and the number of
shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to
the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of meeting, or, if not so
specified, at the place where the meeting is to be held, and the list shall
be produced and kept at the time and place of the meeting during the whole
time thereof, and subject to the inspection of any stockholder who may be
present.

SECTION 8.  QUORUM AND ADJOURNED MEETINGS.  The holders of a majority of the
shares entitled to vote at any meeting of stockholders, present in person or
by proxy, shall constitute a quorum at such meeting except as otherwise
provided by statute. Whenever a quorum shall be present at any meeting all
matters shall be decided by vote of the holders of a majority of the shares
present, unless otherwise provided by statute, the certificate of
incorporation, or by these bylaws.

Meetings of stockholders may be adjourned from time to time for any reason
and, if a quorum shall not be present, the holders of the shares entitled to
vote present in person or by proxy, may so adjourn the meeting. When a
meeting is adjourned to another time or place, unless the bylaws otherwise
require, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken
except that, if the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting. At the adjourned meeting the Company may transact any
business which might have been transacted at the original meeting. If a
quorum shall not be present at any meeting of the Board of Directors the
directors present thereat may adjourn the meeting from time to time, without
notice other than at the meeting, until a quorum shall be present.

SECTION 9.  VOTING AT MEETINGS.  Unless otherwise required by law, the
certificate of incorporation or these bylaws, each stockholder shall at every
meeting of the stockholders be entitled to one vote in person or by proxy for
each share of the capital stock having voting power

                                       3


held by such stockholder, but no proxy shall be voted after three years from
its date, unless the proxy provides for a longer period.

SECTION 10.  ORGANIZATION.  The Chairman shall preside at all meetings of the
stockholders. In the absence or inability to act of the Chairman, the Vice
Chairman, the President or an Executive Vice President (in that order) shall
preside, and in their absence or inability to act another person designated
by one of them shall preside. The Secretary of the Company shall act as
secretary of each meeting of the stockholders. In the event of his absence or
inability to act, the chairman of the meeting shall appoint a person who need
not be a stockholder to act as secretary of the meeting.

SECTION 11.  INSPECTORS OF VOTING.  Except as otherwise provided by statute,
the Chairman or in his absence the chairman of the meeting, shall appoint
inspectors of voting for each meeting of stockholders.

SECTION 12.  MEETING PROCEDURES.  Meetings of the stockholders shall be
conducted in a fair manner but need not be governed by any prescribed rules
of order. The presiding officer's rulings on procedural matters shall be
final. The presiding officer is authorized to impose reasonable time limits
on the remarks of individual stockholders and may take such steps as such
officer may deem necessary or appropriate to assure that the business of the
meeting is conducted in a fair and orderly manner.

                     ARTICLE III - THE BOARD OF DIRECTORS

SECTION 1.  NUMBER AND QUALIFICATIONS.  The business and affairs of the
Company shall be under the direction of or managed by a Board of Directors
who need not be residents of the State of Delaware or stockholders of the
Company. The number of directors may be increased or decreased from time to
time by resolution of the Board of Directors, provided no decrease shall have
the effect of shortening the term of any incumbent director.

Persons who are or have been officers of the Company, other than persons who
hold or have held either or both of the office of Chairman and Chief
Executive Officer and the office of President, shall not be elected directors
of the Company for terms beginning after the date they retire from active
employment with the Company. No candidate shall be elected director of the
Company for a term beginning after his or her 70th birthday.

SECTION 2.  ELECTION.  Directors shall be elected by class for three year
terms as specified in the Certificate of Incorporation at the annual meeting
of stockholders, except as provided in Section 3 of this Article and except
as required under the terms of any preferred shares, and each director
elected shall hold office during the term for which he is elected and until
his successor is elected and qualified. A director may be removed only for
cause.

SECTION 3.  VACANCIES.  Any vacancies occurring in the Board of Directors and
newly created directorships resulting from any increase in the authorized
number of directors may be filled by a majority of the remaining directors
though less than a quorum of the Board of Directors, or by the sole remaining
director, and any director so chosen shall hold office until the next
election of the class for which he was chosen and until his successor is duly
elected and qualified.

SECTION 4.  REGULAR MEETINGS.  Regular meetings of the Board of Directors
shall be held at nine-thirty o'clock in the morning, local time, or at such
other time as may be established from time to time by resolution of the Board
of Directors, on the last Wednesday of May and August, and the first
Wednesday in December, and immediately following the adjournment of the
Annual Meeting of stockholders on the last Wednesday in February in each
year. Should any of such days be a legal holiday, the meeting shall be held
at the same time on the first following day that

                                       4


is not a legal holiday. The February meeting shall be held at the same place
as the annual meeting of stockholders. All other regular meetings shall be
held at the principal business office of the Company in Rock Island County,
Illinois, or at any other place either within or outside the State of
Delaware approved in writing not less than ten days in advance of the meeting
by a majority of the number of directors then in office or approved at the
last preceding regular meeting of the Board of Directors.

SECTION 5.  SPECIAL MEETINGS.  Special meetings of the Board of Directors may
be held upon call of the Chairman at any time; special meetings also shall be
called by the Chairman or by the Secretary whenever requested by one-third of
the directors then in office. Such meetings shall be held at the principal
business office of the Company in Rock Island County, Illinois, or at any
other place either within or outside the State of Delaware as is designated
in the call and notice for the meeting.

SECTION 6.  NOTICE OF MEETINGS.  No notice of any kind shall be necessary for
regular meetings of the Board of Directors to be held at the principal
business office of the Company in Rock Island County, Illinois.

Notice of special meetings of the Board of Directors wherever held in the
United States other than Alaska or Hawaii, and notice of regular meetings of
the Board of Directors to be held at a place in the United States other than
at the principal business office of the Company and other than in Alaska or
Hawaii shall be given by letter, telegram, cable or radiogram addressed to
each director's regular business office and delivered for transmission not
later than during the second day immediately preceding the day for such
meeting. One day personal, telegraphic or telephonic notice given by the
Chairman, Secretary or any other officer, shall be sufficient notice of the
calling of a special meeting; provided that such persons may give shorter
notice if that is deemed necessary or appropriate under the circumstances
provided that the shorter notice is actually received by the director prior
to the meeting and provision is made at the meeting for participation by
means of telecommunication, as permitted by Section 10 of this Article.

Notice of special meetings and of regular meetings of the Board of Directors
to be held at a place in Alaska or Hawaii or outside the United States shall
be given by letter, telegram, cable or radiogram addressed to each director's
regular business office and delivered for transmission not later than during
the tenth day immediately preceding the day for such meeting.

Notice of any meeting of the Board of Directors for which a notice is
required may be waived in writing signed by the person or persons entitled to
such notice, whether before or after the time of such meeting, and such
waiver shall be equivalent to the giving of such notice. Attendance of a
director at any such meeting shall constitute a waiver of notice thereof,
except where a director attends a meeting for the express purpose of
objecting to the transaction of any business because such meeting is not
lawfully convened. Neither the business to be transacted at nor the purpose
of any meeting of the Board of Directors for which a notice is required need
be specified in the notice, or waiver of notice, of such meeting.

SECTION 7.  QUORUM.  A majority of the number of directors in office shall
constitute a quorum for the transaction of business. The act of a majority of
the directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors except as otherwise provided by law or these
bylaws. [During an emergency period following a national catastrophe, due to
enemy attack, a majority of the surviving members of the Board of Directors who
have not been rendered incapable of acting as the result of physical or mental
incapacity or the difficulty of transportation to the place of the meeting shall
constitute a quorum for the purpose of filling vacancies in the Board of
Directors and among the elected officers of the Company.]

                                       5


SECTION 8.  ORGANIZATION.  The Chairman shall preside at all meetings of the
Board of Directors. In the absence or inability to act of the Chairman, the
Vice Chairman, the President or an Executive Vice President (in that order)
shall preside, and in their absence or inability to act another director
designated by one of them shall preside.

SECTION 9.  ACTIONS BY WRITTEN CONSENT.  Any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if prior to such action a written consent
thereto is signed by all members of the Board or of such committee as the
case may be, and such written consent is filed with the minutes of
proceedings of the Board or such committee.

SECTION 10.  MEETINGS BY MEANS OF TELECOMMUNICATION.  Members of the Board of
Directors of the Company, or any committee designated by the Board of
Directors, may participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this Section 10 shall
constitute presence in person at such meeting.

SECTION 11.  INTERESTED DIRECTORS:  QUORUM.

(a)     No contract or transaction between the Company and one or more of its
        directors or officers, or between the Company and any other corporation,
        partnership, association or other organization in which one or more of
        its directors or officers are directors or officers, or have a financial
        interest, shall be void or voidable solely for this reason, or solely
        because the director or officer is present at or participates in the
        meeting of the Board or committee thereof which authorizes the contract
        or transaction, or solely because his or their votes are counted for
        such purpose, if:

        (1)     The material facts as to his relationship or interest and as to
                the contract or transaction are disclosed or are known to the
                Board of Directors or the committee, and the Board or committee
                in good faith authorizes the contract or transaction by the
                affirmative votes of a majority of the disinterested directors,
                even though the disinterested directors be less than a quorum;
                or

        (2)     The material facts as to his relationship or interest and as to
                the contract or transaction are disclosed or are known to the
                shareholders entitled to vote thereon, and the contract or
                transaction is specifically approved in good faith by vote of
                the shareholders; or

        (3)     The contract or transaction is fair as to the Company as of the
                time it is authorized, approved, or ratified by the Board of
                Directors, a committee thereof or the shareholders.

(b)     Common or interested directors may be counted in determining the
        presence of a quorum at a meeting of the Board of Directors or of a
        committee which authorizes the contract or transaction.

SECTION 12.  COMPENSATION.  The Board of Directors, by the affirmative vote
of a majority of the whole Board, and irrespective to any personal interest
of its members, shall provide reasonable compensation of all directors for
services, ordinary or extraordinary, to the Company as directors, officers or
otherwise. Directors shall be paid their actual expenses of attendance at
each meeting of the Board of Directors and committees thereof.

                                       6


                       ARTICLE IV - EXECUTIVE COMMITTEE

SECTION 1.  DESIGNATION AND MEMBERS.  During the intervals between meetings
of the Board of Directors and subject to such limitations as may be imposed
by law and these bylaws, an Executive Committee shall have and may exercise
all of the authority of the Board of Directors in the management of the
business and affairs of the Company. The membership of such Executive
Committee shall include the Chairman and such other directors as are
designated by the Board of Directors at the recommendation of the Chairman.

This designation of the Executive Committee and the delegation of authority
granted to it shall not operate to relieve the Board of Directors, or any
director, of any responsibility imposed upon it or him by law. No member of
the Executive Committee shall continue to be a member thereof after he ceases
to be a director of the Company.

SECTION 2.  LIMITATION OF POWERS.  Neither the Executive Committee, nor any
other Board Committee, shall have the authority of the Board of Directors in
reference to amending the certificate of incorporation; adopting an agreement
of merger or consolidation with another corporation or corporations;
amending, altering or repealing the bylaws; electing or removing the
Chairman, Vice Chairman, President, any Executive Vice President or any
Senior Vice President; declaring dividends; or amending, altering or
repealing any resolution of the Board of Directors which by its terms
provides that it shall not be amended, altered or repealed by the Executive
Committee. Nor, unless specifically authorized by the Board of Directors,
shall the Executive Committee have the authority of the Board of Directors in
reference to incurring indebtedness for a term of longer than one year except
that this limitation shall not apply to indebtedness of up to five years
which (i) do not involve registration with the Securities & Exchange
Commission and (ii) do not result in a total of indebtedness of $50,000,000
for a term longer than one year to any one lender, nor shall this limitation
apply to the guaranty of an indebtedness which runs longer than one year.

In any resolution of the Board of Directors providing for action to be taken
or approval to be given by, or a report to be made to, the Board, the term
"Board of Directors" standing alone shall not be deemed to mean the Executive
Committee.

All minutes of meetings of the Executive Committee shall be submitted to the
next succeeding meeting of the Board of Directors, provided that no rights
other than those of the Company shall be affected by any revision or
alteration by the Board of Directors of actions of the Executive Committee.

SECTION 3.  PROCEDURE, MEETINGS, QUORUM.  The Chairman shall preside at all
meetings of the Executive Committee. In the absence or inability to act of
the Chairman, the Vice Chairman, the President or an Executive Vice President
(in that order) shall preside, and in their absence or inability to act
another member designated by one of them shall preside.

The Executive Committee shall keep a record of its acts and proceedings.

Meetings of the Executive Committee shall be called at the request of any
member of the Committee with the concurrence of the Chairman, or in the event
of his absence or inability to act, the Vice Chairman, or in the event of the
Vice Chairman's absence or inability to act, the President or an Executive
Vice President of the Company, in the order of their availability. Such
meeting shall be held at such location as shall be stated in the notice for
such meetings.

Meetings of the Executive Committee may be held upon notice given by word of
mouth or written notice delivered during regular business hours to the office
of each member or at other times to his residence. In the case of a meeting
held at the principal business office of the

                                       7


Company in Rock Island County, Illinois, such notice may be given at any time
prior to said meeting. In the case of a meeting held at any place in the
United States other than the principal business office and other than Alaska
or Hawaii, such notice may be given 48 hours prior to said meeting. In the
case of a meeting held in Alaska or Hawaii or elsewhere outside the United
States, such notice may be given four days prior to said meeting.

A majority of the members of the Executive Committee shall constitute a
quorum for the transaction of any business, and the act of a majority of the
members present at a meeting at which a quorum is present shall be the act of
the Executive Committee.

        ARTICLE V - BOARD COMMITTEES OTHER THAN THE EXECUTIVE COMMITTEE

SECTION 1.  GENERAL PROVISIONS.  The Board of Directors may from time to time
establish such committees of the Board as it shall deem appropriate in
addition to the Executive Committee. The resolution establishing each such
committee shall state its powers and duties and the number of directors who
shall be members. The membership of and committee chairman of each such
committee shall be designated by the Board of Directors upon the
recommendation of the Chairman. No such committee of the Board shall exercise
any of the powers of the Board other than those set forth in such resolution
establishing the committee, as such resolution may be amended from time to
time.

SECTION 2.  PROCEDURES, MEETINGS, QUORUM.  Meetings of such Board committees
may be held on call of the Chairman of the committee or upon call issued by
the Secretary of the Company at the request of a majority of the committee.

Unless stated otherwise in the resolution establishing a committee, a
majority of the members shall constitute a quorum for the conduct of business.

Meetings of such Board committees may be held at such place as may be
designated in the notice of meeting. Notice of meetings shall be given by the
Secretary of the Company and shall be by word of mouth delivered to the
office of the committee member not later than the third day before the
meeting or in writing or by telegram mailed or sent not later than the fourth
day before the meeting. The notice need not specify the business to be
conducted at a meeting.

                           ARTICLE VI - THE OFFICERS

SECTION 1.  NUMBER AND QUALIFICATIONS.  The principal corporate officers of
the Company shall consist of a Chairman, a President, a Secretary, and a
Treasurer; and the Company may have a Vice Chairman, one or more Executive
Vice Presidents, one or more Senior Vice Presidents, one or more Vice
Presidents, a General Counsel, a Comptroller and such other corporate
officers and assistant officers as may be elected or appointed pursuant to
these Bylaws. The Chairman and Vice Chairman  shall be chosen from among the
directors, but no other officer need be a director. The Company may also have
such divisional officers as may be elected or appointed pursuant to these
Bylaws. Any number of offices may be held by the same person.

SECTION 2.  GENERAL DUTIES.  All corporate and any divisional officers so
designated by the Board of Directors or the Chairman ("Designated Divisional
Officers"), shall have such authority and perform such duties as officers of
the Company as may be provided by or delegated in accordance with Sections 7
through 16 of these Bylaws, or as may be determined by resolution of the
Board of Directors not inconsistent with these bylaws. All agents and
employees of the Company not elected by the Board of Directors may be
appointed by the Chairman or by persons authorized by him to do so, to serve
for such time and to have such duties as the appointing authority may
determine from time to time.

                                       8


SECTION 3.  ELECTION AND TERM OF OFFICE.  All corporate officers and each
Designated Divisional Officer shall be elected annually by the Board of
Directors at its regular meeting in February of each year. Each such
corporate and divisional officer shall hold office for one year and until his
successor is elected and qualified, or until he shall have resigned, or shall
have been removed in the manner provided in Section 4.

SECTION 4.  REMOVAL.  Any corporate or divisional officer may be removed by
the Board of Directors, and any corporate officer below the rank of Senior
Vice President or divisional officer other than a Designated Divisional
Officer may be removed by the Chairman, whenever in the judgment of the Board
or the Chairman, respectively, the interests of the Company will be served
thereby. Such removal shall be without prejudice to the contract rights, if
any, of the person removed. Election of an officer shall not of itself create
contract rights.

SECTION 5.  RESIGNATIONS.  Any officer may resign at any time by giving
written notice to the Board of Directors or to the Chairman. Such resignation
shall take effect at the time specified therein and, unless specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.

SECTION 6.  VACANCIES.  The Board of Directors may at any time create and
fill new offices and may at any time fill the unexpired portion of the term
of any vacant office. In addition, as to any corporate office below the rank
of Senior Vice President, or any divisional office below the rank of
Designated Divisional Officer, the Chairman may at any time create and fill
new offices and may at any time fill the unexpired term of any such office.

SECTION 7.  CHAIRMAN.  The Chairman shall be the chief executive officer of
the Company and as such shall have the active executive management of the
operations of the Company, and shall see that the orders and resolutions of
the Board of Directors and of the Executive Committee are carried into
effect. He shall have power to execute in the name of the Company all bonds,
contracts, other obligations and property conveyances which are duly
authorized, and he shall have all the powers and perform all duties devolving
upon him by law and as head of the Company. He may call special meetings of
the stockholders and of the Board of Directors. From time to time he shall
bring to the attention of the Board of Directors such information or
recommendations concerning the business and affairs of the Company as he may
deem necessary or appropriate. When present he shall preside at all meetings
of the stockholders, of the Board of Directors and of the Executive Committee.

SECTION 8.  VICE CHAIRMAN.  The Vice Chairman shall be the second ranking
officer of the Company. He shall have such powers and perform such duties as
the Board of Directors may from time to time prescribe or as the Chairman may
from time to time delegate to him. In the absence or inability to act of the
Chairman, the Vice Chairman shall act as the chief executive officer of the
Company and shall perform the duties of the Chairman.

SECTION 9.  PRESIDENT.  The President shall have such powers and perform such
duties as the Board of Directors may from time to time prescribe or as the
Chief Executive Officer may from time to time delegate to him. In the absence
or inability to act of the Chairman and the Vice Chairman, the President
shall perform the duties of Chairman.

SECTION 10.  EXECUTIVE VICE PRESIDENTS.  Each Executive Vice President shall
have such powers and perform such duties as the Board of Directors may from
time to time prescribe or as the Chairman may from time to time delegate to
him. In the absence or inability to act of the Chairman, the Vice Chairman
and the President, an Executive Vice President present shall act as the chief
executive officer of the Company and shall perform the duties of the
Chairman.

                                       9


SECTION 11.  SENIOR VICE PRESIDENTS.  Each Senior Vice President shall have
such powers and perform such duties as the Board of Directors may from time
to time prescribe or as the Chairman may from time to time delegate to him.
In the absence or inability to act of the Chairman, the Vice Chairman, the
President and Executive Vice Presidents, the duties of the Chairman shall be
performed by a Senior Vice President present, acting in such order of
priority as shall be designated by the Chairman.

SECTION 12.  VICE PRESIDENTS.  Each Vice President shall have such powers and
perform such duties as the Board of Directors may from time to time prescribe
or as the Chairman may from time to time delegate to him.

SECTION 13.  SECRETARY.  The Secretary shall act as secretary of all meetings
of the stockholders, the Board of Directors and the Executive Committee. He
shall prepare and keep or cause to be kept in books provided for the purpose
minutes of all meetings of the stockholders, the Board of Directors and the
Executive Committee; shall see that all notices are duly given in accordance
with the provisions of these bylaws and as required by law, shall be
custodian of the records and of the seal of the Company and see that the seal
is affixed to all documents, the execution of which on behalf of the Company
under its seal is duly authorized and, in general, he shall perform all
duties incident to the office of Secretary and as required by law and such
other duties as may be assigned to him from time to time by the Board of
Directors or by the Chairman.

Each Assistant Secretary (if one or more Assistant Secretaries be elected)
shall assist the Secretary in his duties and shall perform such other duties
as the Board of Directors may prescribe from time to time, or the Chairman or
the Secretary may delegate to him from time to time. In the event of the
absence or inability to act of the Secretary, his duties shall be performed
by an Assistant Secretary designated by the Chairman.

SECTION 14.  TREASURER.  The Treasurer shall have charge and custody of, and
be responsible for, all moneys, notes and securities in the possession of the
Company, and deposit all funds in the name of the Company in such banks,
trust companies or other depositories as he may select; shall receive, and
give receipts for, moneys due and payable to the Company from any source
whatsoever; and, in general, he shall perform all the duties incident to the
office of Treasurer and as required by law and such other duties as may be
assigned to him from time to time by the Board of Directors or by the
Chairman.

Each Assistant Treasurer (if one or more Assistant Treasurers be elected)
shall assist the Treasurer in his duties and shall perform such other duties
as the Board of Directors may prescribe from time to time, or the Chairman or
the Treasurer may delegate to him from time to time. In the event of the
absence or inability to act of the Treasurer, his duties shall be performed
by an Assistant Treasurer designated by the Chairman.

SECTION 15.  GENERAL COUNSEL.  The General Counsel shall be the chief legal
advisor of the Company as to all matters affecting the Company and its
business and, in general, he shall perform all the duties incident to the
office of General Counsel and such other duties as may be assigned to him
from time to time by the Board of Directors or by the Chairman.

SECTION 16.  COMPTROLLER.  The Comptroller shall direct the preparation and
maintenance, on a current basis, of such accounting books, records and
reports as may be necessary to permit the directors, officers and executives
of the Company to exercise adequate planning and control of the business of
the Company or as may be required by law; and in general, he shall perform
all the duties incident to the office of Comptroller and such other duties as
may be assigned to him from time to time by the Board of Directors or by the
Chairman.

                                      10


              ARTICLE VII - ACTS WITH RESPECT TO SECURITIES OWNED

SECTION 1.  ACTS WITH RESPECT TO SECURITIES OWNED.  Subject always to the
specific directions of the Board of Directors, the Chairman, the Vice
Chairman, the President, an Executive Vice President, a Senior Vice
President, a Vice President, or the Treasurer on behalf of the Company may
exercise all the rights, powers and privileges of ownership, including the
right to vote, by proxy or otherwise, any security or securities owned by the
Company (including reacquired shares of capital stock of the Company). The
endorsement of such officers may be attested by the Secretary or an Assistant
Secretary either with or without affixing thereto the corporate seal.

                        ARTICLE VIII - OTHER PROVISIONS

SECTION 1.  CERTIFICATES OF STOCK.  The shares of the corporation may be
represented by a certificate or may be uncertificated. Certificates to
evidence ownership of stock of the Company shall be in such form as the Board
of Directors shall from time to time approve. The Chairman, President, Chief
Financial Officer or the Treasurer is authorized to appoint a transfer agent
and registrar for the stock of the Company and to make all other appointments
of agents related to the stock of the Company. The Chairman, President, Chief
Financial Officer or the Treasurer may adopt such regulations concerning the
authority and duties of the transfer agent and registrar, the transfer and
registration of certificates of stock and the substitution or replacement of
lost, stolen, destroyed or mutilated certificates as such officer shall see
fit.

SECTION 2.  LOANS.  The Company may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
Company or of any of its subsidiaries, including any officer or employee who
is a director of the Company or of any of its subsidiaries, whenever, in the
judgment of the Board of Directors, such loan, guaranty or assistance may
reasonably be expected to benefit the Company. The loan, guaranty or other
assistance may be with or without interest and may be unsecured or secured in
such manner as the Board of Directors shall approve including, without
limitation, a pledge of shares of stock of the Company.

SECTION 3.  AMENDMENT OF BYLAWS.  In addition to such power of amendment as
is vested by law in the shareholders, the Board of Directors is authorized to
alter, amend or repeal the bylaws at any meeting of the Board of Directors by
the affirmative vote of a majority of the number of directors then in office.

                                    ******


                                      11

EX-10.9

                                                                    EXHIBIT 10.9

                        1991 JOHN DEERE STOCK OPTION PLAN

        1.     PURPOSE - The purpose of the Plan (Plan) is to increase
personal participation in the continued growth and financial success of Deere
& Company (Company) and its subsidiaries (the Company and its subsidiaries
being sometimes collectively called Deere corporations) by certain key
employees holding higher executive, administrative or professional positions.

        2.     ADMINISTRATION - The Plan shall be administered by and under
the direction of the Board Committee on Compensation (Committee), whose
interpretations of its terms and provisions shall be final and conclusive.
The Committee shall consist of two or more "outside directors" of the
Company, within the meaning of Section 162(m) of the Internal Revenue Code of
1986, as amended (Code) and each of whom are "disinterested persons" within
the meaning of Rule 16b-3(c)(2)(i) under the Securities Exchange Act of 1934.

        3.     GRANT OF OPTIONS AND STOCK APPRECIATION RIGHTS - The
Committee may from time to time on or prior to December 31, 2000 grant to key
employees (including employees who are directors or officers of the Company
or both) options to purchase common stock of the Company (sometimes called
options) exercisable at an option price fixed by the Committee but not less
than the fair market value of the shares on the date of grant.

               The options and stock appreciation rights granted hereunder
may be either one or both of two series of options:

        i.     "A" OPTIONS -    "A" options are intended to be incentive
stock options under Section 422 of the Code.

        ii.    "B" OPTIONS -   All other options shall be deemed to be "B"
options and are intended to be non-statutory options not subject to Section
422 of the Code.

               The Committee may also grant stock appreciation rights in
connection with any option under this Plan but not separately, either
concurrently with the grant of options or subsequently, subject to such
terms, conditions, limitations and restrictions as may be attached to a
particular stock appreciation right upon grant, exercisable in lieu of
exercise of all or part of the related option, without payment to the
Company, to receive (i) a number of shares equal in value (determined at the
date of exercise) to the amount by which the fair market value at the date of
exercise of the option shares for which the stock appreciation right is
exercised exceeds the option exercise price of such shares, or (ii) cash in
the amount of such value or (iii) a combination of both. The fair market
value of a fractional interest in a share shall be satisfied by payment of
cash.

               All references to stock options under the Plan shall be
construed to include such stock appreciation rights, if any, as may be
granted in connection with a particular option.

        4.     NUMBER OF SHARES - The aggregate number of shares for which
options and stock appreciation rights may be granted under the Plan shall not
exceed 30,000,000, subject to adjustment as provided in Section 8. No
individual shall be granted more than 900,000 options in the aggregate under
the Plan during any calendar year. To the extent of an exercise of a stock
appreciation right, the related option shall be deemed, for purposes of the
Plan, to have been exercised for the entire number of option shares as to
which the stock appreciation right is exercised. Shares for which options and
stock appreciation rights are no



longer exercisable as a result of expiration, termination or cancellation
shall be available for subsequent grants.

               Shares delivered upon exercise of options or stock
appreciation rights may be either authorized but unissued shares, or treasury
shares, or both, and all shares issued under the Plan shall be fully paid and
non-assessable.

        5.     DURATION AND EXERCISE - The term of each option and stock
appreciation right shall be determined by the Committee, but shall not extend
later than ten years after the date of grant of the option, and in the case
of a stock appreciation right, in no event later than the date of expiration
of the related option.

               An option or stock appreciation right granted under this Plan
shall not be exercisable until one year from date of grant. Subject to any
conditions, limitations or restrictions included therein at time of grant, an
option or stock appreciation right shall thereafter be exercisable for the
full amount or any part thereof from time to time during its term. An option
or stock appreciation right may be exercised by delivering written notice to
the Company to the attention of the Committee at the principal executive
office of the Company, or at such other office as the Company may designate,
accompanied by payment in cash or in shares of the Company at their fair
market value on the date of exercise or both in full for any shares purchased
by exercise of the options.

               Whenever an amount is required to be withheld by the Company
under applicable income tax laws or under the Federal Insurance Contributions
Act in connection with the exercise of an option, the optionee may satisfy
this obligation in whole or in part by electing (Election) to have the
Company withhold shares, provided that the amount withheld may not exceed the
maximum total of federal, state and local rates applicable to individuals.
The value of each withheld share shall be the fair market value on the date
that the amount of tax to be withheld shall be determined (Tax Date). Each
Election is irrevocable and must be made prior to, or on, the Tax Date. The
Committee may disapprove of any election or may suspend or terminate the
right to make Elections.

               If the optionee is, or at any time within a period of less
than the preceding six months was, a director or an officer of the Company
than (1) no Election shall be effective for a Tax Date which occurs within
six months of the grant of the option, and (2) the Election must be made
either six months prior to the Tax Date or must be made during a period
beginning on the third business day and ending on the twelfth business day
following the date of the first release for publication of each quarterly or
annual summary statement of sales and earnings of the Company.

        6.     NON-TRANSFERABILITY - Except as provided below, no option or
stock appreciation right shall be transferable by the holder otherwise than
by will or the laws of descent and distribution, and each option or stock
appreciation right shall be exercisable during the holder's lifetime only by
him or her. Except as permitted by the preceding sentence, no option or stock
appreciation right shall be transferred, assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise) or be subject to
execution, attachment, or similar process. Upon any attempt to so transfer,
assign, pledge, hypothecate or otherwise dispose of, or subject to execution,
attachment or similar process, any option, stock appreciation right, or any
right thereunder, contrary to the provisions hereof, the option or stock
appreciation right shall immediately become null and void.

               Notwithstanding the foregoing, the Committee may, in its
discretion, authorize all or a portion of the options granted or to be
granted to an optionee to be on terms which permit transfer by gift or
domestic relations orders (i) by such optionee to family members, (ii) by
family members to other family members, and (iii) to such other persons or
entities as the Securities Act of 1933 and the rules and forms thereunder, as
amended from time to time, may permit. Following transfer, any such options
shall continue to

                                       2



be subject to the same terms and conditions as were applicable immediately
prior to transfer. The events of termination of employment of Section 7
hereof shall continue to be applied with respect to the employee, following
which the options shall be exercisable by the transferee only to the extent,
and for the periods specified in Section 7.

               Notwithstanding anything to the contrary herein, each option
holder under the Plan may from time to time name any beneficiary or
beneficiaries to whom any benefit under the Plan is to be paid in the event
of his or her death.  Each designation will revoke all prior designations for
the Plan by the same option holder, and will be effective only when executed
by the option holder and delivered during his or her lifetime to the Company
at such address specified on the beneficiary designation form.  In the
absence of any such designation, options and stock appreciation rights
outstanding and benefits remaining unpaid at the option holder's death shall
be paid to the option holder's estate.

        7.     TERMINATION OF EMPLOYMENT - If the employment of the holder
of an option or stock appreciation right by the Deere corporations should be
terminated for any reason other than for death, or for disability or
retirement pursuant to applicable disability or retirement plans of the Deere
corporations, such holder's options, stock appreciation rights or both shall
expire, and all rights to acquire shares or cash or both pursuant thereto
shall terminate immediately.

               In the event of termination of employment because of death,
the option or stock appreciation right may be exercised by the heirs,
legatees or legal representatives of the holder, as the case may be, within
twelve months after such death. Such exercise shall be upon the same terms at
the time of exercise as would have been available to the original holder, had
he or she remained in the continuous employ of the Company, except that such
heirs, legatees or legal representatives may exercise any option or stock
appreciation right held at the date of such holder's death without regard to
the one-year holding period set forth in Section 5 above.

               In the event of termination of employment of the holder of an
option because of disability or full retirement pursuant to applicable
disability or retirement plans of the Deere corporations, an option or stock
appreciation right may be exercised by such holder, within five years after
such termination, to the same extent and upon the same terms (including among
other things, the holding period requirement set forth in Section 5 above) at
the time of exercise as would have been available had such holder remained in
the continuous employ of the Company. In the event of the death of a holder
of an option who has retired prior to the expiration of the five-year period
specified in the preceding sentence, an option or stock appreciation right
held at death by such holder may be exercised by the holder's heirs, legatees
or legal representatives, as the case may be, (without regard to the holding
period requirement set forth in Section 5 above) within one year after death
or within five years following retirement, whichever is later, but only if
and to the extent the option would have been exercisable by the retired
holder of the option at the date of death.

               In the event of a termination of employment of the holder of
an option because of disability or full retirement pursuant to applicable
disability or retirement plans of the Deere corporations, the Committee in
its sole discretion may elect to accelerate the date on which certain of the
options issued to such holder become exercisable, which acceleration may be
conditioned on the forfeiture of other options issued to such holder. It is
expressly provided, however, that no such acceleration may permit the
exercise of any option in less than one year from the date of grant, or
represent a material increase in benefits.

               Nothing contained in the Plan, or in any option or stock
appreciation right granted pursuant to the Plan, shall confer upon any
employee any right to continuance of employment, nor interfere in any way
with the right of the employing Deere corporation to terminate the employment
of such employee at any time.

                                       3



        8.     ADJUSTMENT OF SHARES - In case of a dividend in, or a
split-up or combination of, common stock of the Company, the number of shares
issuable pursuant to the Plan and the number of shares covered by outstanding
options and stock appreciation rights granted under the Plan shall be
adjusted proportionately without change in the aggregate exercise price or
the aggregate cash receivable. In case of a merger or consolidation of the
Company with another corporation, a reorganization of the Company, a
reclassification of the common stock of the Company, a spin-off of a
significant asset, or other changes in the capitalization of the Company,
appropriate provision shall be made for the protection and continuation of
any outstanding options or stock appreciation rights by either (i) the
substitution, on any equitable basis, of appropriate stock or other
securities to which holders of common stock of the Company will be entitled
pursuant to such transaction or succession of such transactions, or (ii) by
appropriate adjustment in the number of shares issuable pursuant to the Plan
and the number of shares and purchase price thereof covered by outstanding
options or stock appreciation rights, as deemed appropriate by the Committee.

        9.     LISTING AND REGISTRATION OF SHARES - Each option and stock
appreciation right shall be subject to the requirement that, if at any time
that the Committee determines, in its discretion, that the listing,
registration or qualification of the shares subject thereto upon any
securities exchange or under any federal or state law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the delivery of shares thereunder, the
option or stock appreciation right may not be exercised in whole or in part
unless such listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Committee.

        10.    DEFINITIONS - For purposes of the Plan, the following
definitions shall apply.

               FAIR MARKET VALUE is the mean between the reported high and
low prices of sales of the common stock of the Company as reported by the
Consolidated Tape Association or a successor thereto on the relevant date,
or, if there were no such reported sales, on the last preceding day on which
there were sales.

               SUBSIDIARY has the same meaning as expressed in Section
424(f) of the Code.

               An EMPLOYEE is a person who is in the employment of a Deere
corporation and on a salary payroll.

               FAMILY MEMBER has the meaning expressed in the instructions
to Form S-8 under the Securities Act of 1933, as amended from time to time.

     11.       AMENDMENT OF PLAN - The Committee or the Board of Directors
may amend or discontinue the Plan at any time; provided, however, that no
such amendment that must be approved by the stockholders of the Company in
order to continue the qualification of the Plan under Rule 16b-3 of the
Securities Exchange Act of 1934, as amended and Section 162(m) of the Code,
or to comply with other applicable law or the rules and regulations of any
stock exchange or quotation system on which the common stock is traded shall
be effective unless and until such stockholder approval is obtained in
compliance with such applicable law, rule or regulations. No such amendment
or discontinuance shall impair any outstanding option or stock appreciation
right without the consent of the holder of such option or right.

        12.    EFFECTIVE DATE - The Plan shall be effective when it has been
approved by the affirmative vote of the holders of a majority of the shares
of common stock of the Company present, or represented, and entitled to vote
at a meeting of stockholders.

                                       4

EX-10.14

                                                                  EXHIBIT 10.14


                   JOHN DEERE SUPPLEMENTAL PENSION BENEFIT PLAN


                            AS AMENDED 1 NOVEMBER 1987



                               AND FURTHER AMENDED:

                                24 FEBRUARY 1988
                                28 FEBRUARY 1990
                                27 FEBRUARY 1991
                                  29 MAY 1991
                                 26 AUGUST 1992
                                9 DECEMBER 1992
                     AMENDED MAY 1993 - EFFECTIVE 1 JULY 1993
                  AMENDED 8 DECEMBER 1993 - EFFECTIVE 1 JULY 1993
                            AMENDED 7 DECEMBER 1994
                    AMENDED MAY 1995 - EFFECTIVE 1 JANUARY 1995
                AMENDED 13 DECEMBER 1995 - EFFECTIVE 1 JANUARY 1995
                 AMENDED 4 DECEMBER 1996 - EFFECTIVE 1 JANUARY 1997
                 AMENDED 7 JANUARY 1998 -- EFFECTIVE 1 JANUARY 1998
                   AMENDED 26 MAY 1999 -- EFFECTIVE 26 MAY 1999
                   AMENDED 19 JULY 1999 -- EFFECTIVE 1 JULY 1999
                  AMENDED 6 AUGUST 1999 - EFFECTIVE 1 AUGUST 1999
              AMENDED -  2 NOVEMBER 1999 - EFFECTIVE  1 NOVEMBER 1999



                JOHN DEERE SUPPLEMENTAL PENSION BENEFIT PLAN

                              TABLE OF CONTENTS
                              -----------------




Section                                                                    Page
- -------                                                                    ----
                                                                        
I.        PURPOSE AND ESTABLISHMENT

          1.1       Establishment and Amendment of the Plan                   1
          1.2       Purpose                                                   1
          1.3       Cost of Benefits                                          1
          1.4       Application of Plan                                       1
          1.5       Administration and Termination                            1
          1.6       Nonencumbrance of Benefits                                3
          1.7       Employment Rights                                         3
          1.8       Severability                                              3
          1.9       Applicable Law                                            3

II.       DEFINITIONS

          2.1       Definitions                                               4
          2.2       Gender and Number                                         7

III.      SUPPLEMENTAL PENSION BENEFIT

          3.1       Eligibility                                               8
          3.2       Amount                                                    8
          3.3       Limitations                                               9
          3.4       Reduction for Early Retirement under Contemporary Option  9
          3.5       Commencement and Duration                                 9
          3.6       Death Prior to Receipt of Lump Sum                       10

IV.       DISABILITY BENEFIT

          4.1       Eligibility                                              12
          4.2       Amount                                                   12
          4.3       Commencement and Duration                                12

V.        CHANGE IN CONTROL OF COMPANY

          5.1       Eligibility                                              13
          5.2       Change in Control of the Company                         13
          5.3       Cause                                                    14
          5.4       Good Reason                                              14
          5.5       Amount                                                   15


                                       i






Section                                                                    Page
- -------                                                                    ----
                                                                        
          5.6       Commencement and Duration                                15

VI.       SURVIVOR BENEFITS

          6.1       Death of an active Participant or a Participant
                    on Permanent & Total Disability                          16
          6.2       Death of a Retired Participant                           16
          6.3       Commencement and Duration                                17
          6.4       Survivor Benefit Election After Retirement               17

VII.      FINANCING OF BENEFITS

          7.1       Contractual Obligation                                   19
          7.2       Unsecured General Creditor                               19
          7.3       Funding                                                  19
          7.4       Vesting                                                  19
          7.5       Administration                                           19
          7.6       Expenses                                                 19
          7.7       Indemnification and Exculpation                          20
          7.8       Effect on Other Benefit Plans                            20
          7.9       Tax Liability                                            20

EXHIBIT I                                                                    21



                                      ii



                   JOHN DEERE SUPPLEMENTAL PENSION BENEFIT PLAN
                   --------------------------------------------

                      SECTION 1.  PURPOSE AND ESTABLISHMENT
                      -------------------------------------

1.1     ESTABLISHMENT AND AMENDMENT OF THE PLAN.  Deere & Company (the
        "Company") established and presently maintains the John Deere
        Supplemental Pension Benefit Plan (the "Plan"), an unfunded
        supplemental retirement plan for the benefit of its eligible
        employees, on 1 November 1978.  Said plan is hereby further amended
        and restated as set forth herein effective as of 1 January 1997.

1.2     PURPOSE.  The purpose of this Plan is to promote the mutual interests
        of Deere & Company and its Officers and Executives.

1.3     COST OF BENEFITS.  Cost of providing benefits under the Plan will be
        borne by the Company.

1.4     APPLICATION OF PLAN.  The provisions of this Plan as set forth herein
        are applicable only to the employees of the Company in current
        employment on or after 1 November 1987, except as specifically
        provided herein.  Except as so provided, any person who was covered
        under the Plan as in effect on 31 October 1987 and who was entitled
        to benefits under the provisions of the Plan shall continue to be
        entitled to the same amount of benefits without change under this
        Plan.  Any person covered under the Plan as in effect 1 November 1987
        who is age 55 or above on 1 November 1987 shall be entitled to the
        larger of the benefit amount in Section 3.2 below or the benefit
        provided under the John Deere Supplemental Pension Benefit Plan
        effective prior to 1 November 1987.

1.5     ADMINISTRATION AND TERMINATION.  The Plan is administered by and
        shall be interpreted by the Company.  The Board of Directors of the
        Company or the Pension Plan Oversight Committee of the Board may at
        any time amend or modify this Plan in their sole discretion.  In
        addition, the Deere & Company Compensation Committee shall have the
        authority to approve all amendments or modifications that:

        a.       in the Compensation Committee's judgment are procedural,
                 technical or administrative, but do not result in changes in
                 the control and management of the Plan assets; or

        b.       in the Compensation Committee's judgment are necessary or
                 advisable to comply with any changes in the laws or
                 regulations applicable to the Plan; or


                                       1



        c.       in the Compensation Committee's judgment are necessary or
                 advisable to implement provisions conforming to a collective
                 bargaining agreement which has been approved by the Board of
                 Directors; or

        d.       in the Compensation Committee's judgment will not result in
                 changes to benefit levels exceeding $5 million dollars per
                 amendment or modification during the first full fiscal year
                 that such changes are effective for the Plan; or

        e.       are the subject of a specific delegation of authority from
                 the Board of Directors.

Provided, however, that this Plan shall not be amended or modified so as to
reduce or diminish the benefit then currently being paid to any employee or
surviving spouse of any former employee without such person's consent.  The
power to terminate this Plan shall be reserved to the Board of Directors of
Deere & Company.  The procedure for amendment or modification of the Plan by
either the Board of Directors, or, to the extent so authorized, the Pension
Plan Oversight Committee, as the case may be, shall consist of:  the lawful
adoption of a written amendment or modification to the Plan by majority vote
at a validly held meeting or by unanimous written consent, followed by the
filing of such duly adopted amendment or modification by the Secretary with
the official records of the Company.

                                       2



1.6     NONENCUMBRANCE OF BENEFITS.  No employee, retired employee, or other
        beneficiary hereunder shall have any right to assign, alienate,
        pledge, hypothecate, anticipate, or in any way create a lien upon any
        part of this Plan, nor shall the interest of any beneficiary or any
        distributions due or accruing to such beneficiary be liable in any
        way for the debts, defaults, or obligations of such beneficiary,
        whether such obligations arise out of contract or tort, or out of
        duty to pay alimony or to support dependents, or otherwise.

1.7     EMPLOYMENT RIGHTS.  Establishment of this Plan shall not be construed
        to give any Participant the right to be retained by the Company or to
        any benefits not specifically provided by the Plan.

1.8     SEVERABILITY.  In the event any provision of the Plan shall be held
        invalid or illegal for any reason, any invalidity or illegality shall
        not affect the remaining parts of the Plan, but the Plan shall be
        construed and enforced as if the invalid or illegal provision had
        never been inserted, and the Company shall have the privilege and
        opportunity to correct and remedy such questions of invalidity or
        illegality by amendment as provided in the Plan.

1.9     APPLICABLE LAW.  This Plan is fully exempt from Titles II, III, and
        IV of ERISA.  The Plan shall be governed and construed in accordance
        with Title I of ERISA and the laws of the State of Illinois.


                                       3



                            SECTION 2.  DEFINITIONS


2.1     DEFINITIONS.  Whenever used in this Plan, it is intended that the
        following terms have the meanings set forth below:

        (a)     "AVERAGE PENSIONABLE PAY" of the Traditional Pension Option
                 means the average for each  year of the following:

                (1)     all straight-time salary payments, plus the larger of
                (i) or (ii) through 31 December 2000 and as of 1 January 2001
                plus the larger of (i) or (iii) below:

                (i)     the amounts paid under the John Deere Profit Sharing
                        Plan and the John Deere Short-Term Incentive Plan
                        prior to 1991 plus the sum of the bonuses paid under
                        the John Deere Performance Bonus Plan for Salaried
                        Employees, the John Deere Health Care,Inc. Annual
                        Performance Award Plan or the John Deere Credit
                        Company Profit Sharing Plan.

                (ii)    the amount paid prior to 1989 under the John Deere
                        Long-Term Incentive Plan, the John Deere Restricted
                        Stock Plan through 1998, or after 1998 the Pro-rated
                        Yearly Vesting Amount under the John Deere Equity
                        Incentive Plan.

                (iii)   the target amount under the John Deere Performance
                        Bonus Plan for Salaried Employees, the John Deere
                        Health, Inc. Annual Performance Award Plan or the
                        John Deere Credit Company Profit Sharing Plan.

        (2)     The ANNUAL AVERAGE of such amounts shall be based on the five
                (5) highest years, not necessarily consecutive, during the
                ten (10) years  immediately preceding the earliest of the
                Participant's retirement, total and permanent disability, or
                death.  The greater of any such short or long-term awards as
                defined in 2.1(a)(1)(i) or (ii) above paid or vested during
                the twelve months immediately following the Participant's
                retirement, shall be substituted for the lowest such annual
                short or long-term bonus award used to calculate Average
                Pensionable Pay, if the result would be a higher pension
                benefit.  All amounts used in calculating the Average
                Pensionable Pay will be determined before the effect of any
                salary or bonus deferral or reduction resulting from an
                election by the Employee under any Company sponsored plan or
                program, but excluding any matching and/or growth factor,
                Company contribution, and/or flexible credits provided by the
                Company under any such plan or program.

        (b)     "AVERAGE MONTHLY PENSIONABLE PAY" means the Average
                Pensionable Pay divided by twelve (12).

        (c)     "BOARD" means the Board of Directors of the Company.


                                       4



        (d.1)   CAREER AVERAGE PAY of the Contemporary Pension Option means the
                following for those Officers listed in Exhibit 1:

                (1)     The highest five calendar years of the last ten not
                        necessarily consecutive as of 31 December 1996 plus
                        the greater of short-term bonus or long-term
                        incentive pay received in each of those years as
                        defined in section 2.1(a)(1)(i) or (ii) above.

                        plus

                (2)     Base pay and short-term bonuses as defined in Section
                        2.1(a)(1)(i) above paid beginning 1 January 1997 and
                        thereafter (excluding any long-term incentives as
                        defined in section 2.1(a)(1)(ii) above).

        The amounts of all salary, short-term bonus, or other pay received as
        described in (1) and (2) above will be divided by the number of pay
        periods in which base pay was received to determine the Career
        Average Pay.

        (d.2)   "CAREER AVERAGE PAY" of the Contemporary Pension Option means
                the following for newly eligible Participants effective the
                latter of 1 January 1997 or entering Base Salary Grade 13 or
                above:

                (1)     The highest five consecutive of the last ten
                        anniversary years or the last 60 months of straight
                        time pay if higher as of 31 December 1996 for
                        Participants with five or more years of continuous
                        employment.

                        plus

                (2)     Restorable short-term performance bonuses earned and
                        paid during the years 1992-1996 credited at the rate
                        of 1/120th for each pay period of continuous
                        employment beginning 1 January 1997.  Short-term
                        performance bonuses are defined in 2.1(a)(1)(i) of
                        this Plan.

                        plus

                (3)     All straight time pay plus short-term performance
                        bonuses paid on or after 1 January 1997 (excluding
                        any long-term incentives such as stock options).

        The amounts of salary and bonus derived from (d.2)(1) plus (2) plus
        (3) above are divided by the number of pay periods in which base pay
        was received to determine the career average pay.  This amount
        multiplied times 2 transforms career average pay to a monthly
        equivalent.


                                       5



        (e)     "COMPANY" means Deere & Company, a Delaware corporation.

        (f)     "CONTEMPORARY PENSION OPTION" means the benefit provided to
                Officers Listed in Exhibit 1 who elect the Contemporary
                Pension Option on or before 15 November 1996, and all other
                Executives who become Participants on or after 1 January 1997.

        (g)     "DISABILITY" shall have the same meaning as under the
                Qualified Retirement Plan or John Deere Long Term Disability
                Plan for Salaried Employees

        (h)     "EXECUTIVE" means an employee base salary grade 13 or above
                who on 1 January 1997 is a non-officer, or an employee who
                attains base salary grade 13 or above after 1 January 1997.

        (i)     "OFFICER" means employees listed in Exhibit I and by way of
                their election under the John Deere Pension Plan for Salaried
                Employees may choose between this Traditional or Contemporary
                Supplemental Plan option.

        (j)     "NON-OFFICER" means any employee of the Company who is not an
                elected officer and does not hold one of the elected
                positions listed in (i) above.

        (k)     "PARTICIPANT"  means an Officer as defined in (i) above who
                has served in such capacity for 36 months or Salary Grade 13
                and above Executives who are eligible for participation under
                the Contemporary Supplemental Plan option on the latter of 1
                January 1997 or attainment of base Salary Grade 13.

        (l)     "PLAN YEAR" means the 12-month period beginning each November 1.

        (m)     "PRO-RATED YEARLY VESTING AMOUNT UNDER THE JOHN DEERE EQUITY
                INCENTIVE PLAN" means for the purposes of calculating a long
                term incentive amount under Section 2.1 (a) (1) (ii) of this
                Plan is one-quarter of each bi-annual EIP Grant allocated to
                each year following the Grant date multiplied times the Grant
                Price.  In the event an EIP Grant vests and bonus shares are
                payable during the 12 months immediately following a
                Participant's retirement, the actual value of the Grant will
                be redetermined and allocated equally in one-quarter
                increments to each of the years following the Grant date
                which were used to calculate Average Pensionable Pay, if the
                result would be a higher pension benefit.

        (n)     "QUALIFIED RETIREMENT PLAN" means the John Deere Pension Plan
                for Salaried Employees which is a qualified plan under
                Section 401(a) of the Internal Revenue Code.  Provisions
                under this Plan shall in no way alter provisions under the
                Qualified Retirement Plan.


                                       6



        (o)     "RETIREMENT BENEFIT" shall be a single-life annuity or lump
                sum amount as provided under Section 3 subject to provisions
                of Section 5.

        (p)     "SECTION 162(m) PARTICIPANT" means a participant who is the
                CEO or the four highest paid Executives, as reported in the
                proxy, who is employed on the last day of the fiscal year.

        (q)     "SERVICE" shall have the same meaning in this Plan as
                "service credit" in the Qualified Retirement Plan.  Service
                credit for benefit purposes in this plan for those Executives
                NOT listed in Exhibit I will begin on the latter of 1 January
                1997 or attainment of base salary grade 13 or above whichever
                is later.

        (r)     "SURVIVING SPOUSE" shall mean the legally married spouse of a
                deceased participant.

        (s)     "TRADITIONAL PENSION OPTION" means the benefit under this
                Plan for Officers who (1) are listed in Exhibit 1, and (2)
                are or become Participants, and (3) who elect the Traditional
                Pension Option on or before 15 November 1996.

2.2     GENDER AND NUMBER.  Except when otherwise indicated by the context,
        any masculine term used herein shall also include the feminine, and
        the singular shall also include the plural.


                                       7



                   SECTION 3.  SUPPLEMENTAL PENSION BENEFIT


3.1     ELIGIBILITY.  A Participant shall be eligible for benefits under the
        provisions of this Plan who has attained age 60 under the Traditional
        Pension Option or age 55 under the Contemporary Pension Option or at
        any age if eligible to retire on 1 January 1997 and retires under the
        provisions of the Qualified Retirement Plan.

3.2     AMOUNT.  Upon termination and election to retire pursuant to 3.1
        above, the Participant shall be entitled to a monthly Retirement
        Benefit as follows:

        (1)     Traditional Pension Option equals (a) plus (b) below:

                (a)     2% of average monthly pensionable pay for each year of
                        service as an Officer.

                (b)     1 1/2% of average monthly pensionable pay for each year
                        of service as a non-Officer.

                or

        (2)     Contemporary Pension Option equals (a) plus (b) below:

                (a)     2% of career average pay for each year of service as an
                        Officer or Participant.

                (b)     1 1/2% of career average pay for each year of service
                        as a non-Officer prior to the latter of 1 January
                        1997 or attainment of base salary grade 13 or above,
                        whichever is later.

        This amount shall be subject to any reductions for

        (1)     Early retirement under the Contemporary Pension Option as
                provided in Section 3.4 of this plan.

        (2)     Any formula used to calculate the reduction in the retiree's
                monthly benefit under the Qualified Retirement Plan.

        (3)     Survivor benefits described in Section 6.


                                       8



        (4)     Provisions shown in Section 3.3 which follows and shall be
                further reduced by the sum of

                (i)     the benefit earned under the Qualified Retirement Plan
                        and

                (ii)    the benefit provided under the John Deere Supplementary
                        Pension Plan.

3.3     LIMITATIONS.

        (a)     The total monthly Retirement Benefit paid under the
                Traditional Pension Option of  this Plan, the Qualified
                Retirement Plan and the John Deere Supplementary Pension Plan
                may not exceed 66-2/3% of the Average Monthly Pensionable
                Pay.  If such number is exceeded the amount payable under
                this Plan shall be reduced.

        (b)     That part of the retired employee's monthly benefit which is
                based on service credit prior to 1 July 1993 (1 January 1994
                for employees of John Deere Credit Company, John Deere Health
                Care, Inc. and John Deere Insurance Group) shall be reduced
                by 1/2% for each full year in excess of 10 years that the
                spouse is younger than the employee.

3.4     REDUCTION FOR EARLY RETIREMENT UNDER CONTEMPORARY PENSION OPTION.
        The amount determined in 3.2 above shall be reduced 1/3% per month
        from the unreduced full benefit age provided in the Contemporary
        Pension Option of the Qualified Retirement Plan as of the date
        benefits commence.

3.5     COMMENCEMENT AND DURATION.  Payment of monthly retirement benefits
        provided under this Plan shall commence on the first day of any
        calendar month following the date of retirement as elected under the
        Qualified Retirement Plan.  Benefit payments will be made on the
        first day of each calendar month thereafter.  The last payment will
        be made the first day of the calendar month in which the Participant
        dies, subject to the provisions of Section 5.

        Alternatively, the Participant may elect to receive a lump sum
        payment for all or a portion (in 10% increments from 10% to 90%) of
        the Retirement Benefits payable under this Plan including the 55%
        joint and survivor annuity equal to 11% of the supplemental benefit
        payable, adjusted for service accrued through 30 June 1993, or 31
        December 1993 in the case of employees of John Deere Credit Company,
        John Deere Health Care, Inc., or John Deere Insurance Group.  Written
        notice of the Participant's election to receive a lump sum payment
        shall be irrevocable, and must be received by the Company within the
        twelve (12) months prior to payment, but in no event subsequent to
        the Participant's date of retirement.  The lump sum payment shall be
        made to Participant twelve (12) months after receipt of notice by the
        Company but in no event prior to the Participant's retirement.


                                       9



        Notwithstanding the above, a Section 162(m) Participant whose
        retirement date coincides with the Company's fiscal year-end date
        will not be paid the previously elected lump-sum payment until he is
        no longer a Section 162(m) Participant.

        Effective for Plan Years beginning 1 November 1999 and thereafter,
        the lump sum will be calculated using an interest rate assumption
        equal to the average yield in September of the preceding Plan Year on
        30-year Treasury Constant Maturities (as published in October by the
        Internal Revenue Service) and the mortality table shall be based upon
        a fixed blend of 50% male mortality rates and 50% female mortality
        rates from the GAM, as set forth in Revenue Ruling 95-6, in effect at
        the beginning of the plan year in which payment is made.  The age
        used in the calculation will be the age of the Participant or, in the
        case of Participant's death, the surviving spouse's age on the date
        payment is made.

Monthly retirement benefits will be redetermined as soon as practicable and
increased benefits paid retroactive to the Participant's date of retirement for:

        (a)     any eligible long or short-term bonus paid after retirement
                replacing an earlier bonus award used to calculate average
                pensionable pay under the Traditional Pension Option

        or

        (b)     any eligible short-term bonus paid after retirement added to
                career average earnings used to calculate pension benefits
                under the Contemporary Pension Option.

3.6     DEATH PRIOR TO RECEIPT OF LUMP SUM.  If an active Participant or a
        Participant on Permanent and Total Disability dies after receipt of
        notice by the Company pursuant to Section 3.5 of Participant's
        irrevocable election to receive a lump sum payment, but before the
        expiration of twelve (12) months after receipt by the Company of such
        election, a Surviving Spouse of the Participant who is eligible for a
        survivor benefit under Section 6 will receive a lump sum survivor's
        benefit under Section 6.1 of this Plan.  The 55% surviving spouse
        lump sum benefit will be payable no earlier than twelve (12) months
        following receipt of notice by the Company of the deceased
        Participant's irrevocable election but not before the first day of
        the month following eligibility for a surviving spouse benefit under
        the Qualified Retirement Plan.

        If a retired Participant or a Participant on Permanent and Total
        Disability subsequently retires under Normal Retirement and dies
        after receipt of notice by the Company pursuant to Section 3.5 of
        Participant's irrevocable election to receive a lump sum payment, but
        before the expiration of twelve (12) months after receipt by the
        Company of such election, a Surviving Spouse of the Participant who
        is eligible for a survivor benefit under Section 6 will receive the
        Participant's full lump sum benefit under Section 3.5 of this Plan in
        lieu of Surviving Spouse benefits under Section 6.  In the event the
        retired Participant is unmarried at the date of


                                       10



        death or the Surviving Spouse of the deceased Participant is not
        eligible for survivor benefits under Section 6, the Participant's
        full lump sum benefit will be paid to the deceased Participant's
        estate.  The lump sum benefit will be payable no earlier than twelve
        (12) months following receipt of notice by the Company of the
        deceased Participant's irrevocable election.


                                       11


                        SECTION 4.  DISABILITY BENEFIT


4.1    ELIGIBILITY.  An employee who qualifies for a total and permanent
       disability benefit in accordance with the provisions of the Qualified
       Retirement Plan or John Deere Long Term Disability Plan for Salaried
       Employees shall be entitled to a benefit under this Plan upon retirement
       under a normal retirement under the Qualified Retirement Plan.

4.2    AMOUNT.  The amount shall be determined in accordance with 3.2 except
       that service as an Officer shall be determined for the period of time
       prior to total and permanent disability as defined in the Qualified
       Retirement Plan or John Deere Long Term Disability Plan for Salaried
       Employees.

4.3    COMMENCEMENT AND DURATION.  In the event of Disability, the payment
       method shall be the same as that elected pursuant to Section 3.5 of this
       Plan.  In the event of Disability, payments of Retirement Benefits
       provided under this section shall be made or commence on the same date
       as Retirement Benefits commence under the normal Retirement Provisions
       under the Qualified Retirement Plan.


                                      12



                       SECTION 5.  CHANGE IN CONTROL OF COMPANY


5.1    ELIGIBILITY.  If a Change in Control of the Company (as defined in 5.2
       below) shall have occurred, and a participant who has not attained age
       60 ceases to be an employee of the Company, such participant shall be
       eligible for benefits under the provisions of this plan notwithstanding
       his age at the time of such cessation of employment, unless such
       cessation of employment is (i) by the Company for "Cause" (as defined in
       5.3 below), or (ii) by the participant for other than Good Reason (as
       defined in 5.4 below).  If the participant's cessation of employment is
       by reason of Death or Permanent Disability, the participant's rights
       under this Plan shall be governed by Section 4 and 6 of this Plan,
       despite the occurrence of a change in control.

5.2.   CHANGE IN CONTROL OF THE COMPANY.  A change in control of the Company
       shall mean 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, as now or hereafter amended (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) is or becomes the "beneficial owner" (as defined in
              Rule 13(d-3) under the Exchange Act), directly or indirectly, of
              securities of the Company representing thirty percent (30%) or
              more of the combined voting power of the Company's then
              outstanding securities;

       (ii)   during any period of two (2) consecutive years (not including any
              period prior to December 9, 1987) there shall cease to be a
              majority of the Board comprised as follows:  individuals who at
              the beginning of such period constitute the Board and any new
              director(s) whose election by the Board or nomination for
              election by the Company's stockholders was approved by a vote of
              at least two-thirds (2/3) of the directors then still in office
              who either were directors at the beginning of the period or whose
              election or nomination for election was previously so approved; or

       (iii)  the shareholders of the Company approve a merger or consolidation
              of the Company with any other company, other than a merger or
              consolidation which would result in the voting securities of the
              Company outstanding immediately prior thereto continuing to
              represent (either by remaining outstanding or by being converted
              into voting securities of the surviving entity) at least 80% of
              the combined voting power of the voting securities of the Company
              or such surviving entity outstanding immediately after such
              merger or consolidation.


                                      13



       (iv)   the shareholders of the Company approve a plan of complete
              liquidation of the Company or an agreement for the sale or
              disposition by the Company of all or substantially all the
              Company's assets.

5.3    CAUSE.  Termination of employment by the Company for "Cause" shall mean
       termination pursuant to notice of termination setting out the reason for
       termination upon (i) the willful and continued failure by the
       participant to substantially perform his duties with the Company after a
       specific, written demand is developed;  (ii) the willful engaging by the
       participant in conduct which is demonstrably and materially injurious to
       the Company, monetarily or otherwise or (iii) the participant's
       conviction of a felony which impairs the participant's ability
       substantially to perform his duties with the Company.

       An act, or failure to act, shall be deemed "willful" if it is done, or
       omitted to be done, not in good faith and without reasonable belief that
       the action or omission was in the best interest of the Company.

5.4    GOOD REASON.  "Good Reason" shall mean the occurrence, without the
       participant's express written consent, within 24 months following a
       Change in Control of the Company, of any one or more of the following:


       (i)    the assignment to the participant of duties materially
              inconsistent with the participant's duties, responsibilities and
              status prior to the Change in Control or a material reduction or
              alteration in the scope of the participant's responsibilities
              from those in effect prior to the Change in Control;

       (ii)   a reduction by the Company in the participant's base salary or
              profit sharing award as in effect prior to the Change in Control;

       (iii)  the Company requiring the participant to be based at a location in
              excess of twenty-five (25) miles from the location where the
              participant is currently based;

       (iv)   the failure by the Company or any successor to the Company to
              continue in effect any other Pension Plans, or its Profit Sharing
              Plan for Salaried Employees, Short-Term Incentive Bonus Plan,
              Deferred Compensation Plan, Long-Term Incentive Plan, the John
              Deere Stock Option Plan or any other of the Company's employee
              benefit plans, policies, practices or arrangements applying to
              the participant or the failure by the Company to continue the
              participant's participation therein on substantially the same
              basis, both in terms of the amount of benefits provided and the
              level of his or her participation relative to other participants,
              as existed prior to the Change in Control;


                                      14



       If Good Reason exists, the participant's right to terminate his or her
       employment pursuant to this Subsection shall not be affected by
       temporary or subsequent incapacity due to physical or mental illness.
       Continued employment shall not constitute consent to, or a waiver of
       rights with respect to, any circumstance constituting Good Reason
       hereunder.  Retirement at less than "normal retirement age" as defined
       in the John Deere Pension Plan for Salaried Employees constitutes a
       "termination" for purposes of this Subsection.

5.5    AMOUNT.  The amount of the benefit payable under this section shall be
       determined in accordance with Section 3.2.

5.6    COMMENCEMENT AND DURATION.  Retirement Benefits provided under this
       section shall be made in a lump sum on the first day of the calendar
       month following the date the Participant ceases employment with the
       Company, except as noted in Section 3.5.  Calculation of the lump sum
       payment shall be made in accordance with the terms set forth in Section
       3.5.


                                       15



                          SECTION 6.  SURVIVOR BENEFITS


6.1    In the event of the death of an active Participant or a Participant on
       Permanent and Total Disability, notwithstanding Section 3.1 of this
       Plan, the surviving spouse shall be eligible for a monthly survivor
       benefit provided the Participant:

              (a)   was married and eligible to retire on the date of death
                    under early or normal retirement provisions of the
                    Qualified Retirement Plan or

              (b)   had been married for at least one year prior to death and
                    was on Total and Permanent Disability as provided in the
                    Qualified Retirement Plan or

              (c)   was married for at least one year prior to death and
                    Participant had elected the Contemporary Pension Option and
                    was vested under the Qualified Retirement Plan or

              (d)   was married for at least one year prior to death and the
                    Participant elected the Traditional Pension Option and had
                    three years or more of service as an Officer.  The benefit
                    will be reduced 1/3% of 1% for each month the Officer would
                    have been under age 60 at the date this surviving spouse
                    benefit commences.

       The surviving spouse benefit under this Plan for a Participant who died
       prior to retirement as specified in 6.1 will be in the same proportion
       of the Participant's benefit under Section 3 of this Plan as the
       surviving spouse benefit under the Qualified Retirement Plan bears to
       the Participant's benefit under Article IV, Section 1 of the Qualified
       Retirement Plan.  The surviving spouse benefit will be payable as a
       monthly annuity or as a lump sum as of the first of the month following
       eligibility for a surviving spouse benefit under the Qualified
       Retirement Plan.

6.2    DEATH OF A RETIRED PARTICIPANT.  The surviving spouse shall be eligible
       for a monthly survivor benefit provided:

       (a)    the Participant is eligible for a retirement benefit under this
              Plan and

       (b)    the Participant had not received the lump sum payment provided
              under Section 3.5 of this Plan and

       (c)    the surviving spouse and Participant were either:

              (1)   continuously married before the Participant's early or
                    normal retirement or

              (2)   the Participant had elected a surviving spouse benefit
                    under section


                                       16



                    6.4 below.

       The survivor benefit option elected by the retired Participant under
       Article IV, Section 1 of the Qualified Retirement Plan shall apply to
       the survivor benefit payable under this Plan.  Any formula used to
       calculate the reduction in the retiree's monthly benefit under the
       Qualified Retirement Plan shall also apply under this Plan.

6.3    COMMENCEMENT AND DURATION.  Payment of monthly death benefits provided
       under this section shall commence on the same date that surviving spouse
       benefits commence under the Qualified Retirement Plan.  The last payment
       will be made on the first day of the month of the Surviving Spouse's
       death.

6.4    SURVIVOR BENEFIT ELECTION AFTER RETIREMENT.  A Participant who retired
       and is receiving benefits under this Plan, for whom no survivor benefit
       is in effect, may elect a survivor benefit by filing a written
       application with the Company provided:

       (1)    The Participant was not married at retirement and has subsequently
              married, or

       (2)    The Participant has had a Survivor Benefit provision in effect
              and has remarried, and

       (3)    The Participant had not received a lump sum payment provided in
              Section 3.5 of this Plan.

       The Survivor Benefit under this paragraph and any applicable reduction to
       the retired Participant's benefit shall be effective with respect to
       benefits falling due for months commencing with the first day of the
       month following the month in which the Company receives an application,
       but in no event before the first day of the month following the month in
       which the retired Participant has been married to the designated spouse
       for one year.

       On or after 1 July 1999, if the Company is notified of a designated
       spouse following the first day of the month in which the retired
       employee has been married to the designated spouse for one year,
       retroactive reductions and benefit adjustments will be made to the
       retired Participant's pension benefit or the survivor's benefit, in the
       event of a retired Participant's death for such late notice.  These
       retroactive reductions will become payable for the period of time based
       on the date the survivor benefit would have become effective (the first
       day of the month following the month in which the retired Participant
       had been married to the designated spouse for one year).

       Any surviving spouse benefit election by the retired Participant under
       Article IV, Section 1 of the Qualified Retirement Plan shall apply to
       the survivor benefit payable under this Plan.  Any formula used to
       calculate the reduction in the retired Participant's monthly benefit
       under the Qualified Retirement Plan and Sections 3.2, 3.3, and 3.4 of
       this Plan will also apply.


                                       17



                       SECTION 7.  FINANCING OF BENEFITS


7.1     CONTRACTUAL OBLIGATION.  It is intended that the Company is under a
        contractual obligation to make the payments under this Plan when due.
        No benefits under this Plan shall be financed through a trust fund
        or insurance contracts or otherwise.  Benefits shall be paid out of
        the general funds of the Company.

7.2     UNSECURED GENERAL CREDITOR.  Neither the Participant nor the
        Surviving Spouse shall have any interest whatsoever in any specific
        asset of the Company on account of any benefits provided under this
        Plan.  The Participant's (or Surviving Spouse's) right to receive
        benefit payments under this Plan shall be no greater than the right
        of any unsecured general creditor of the Company.

7.3     FUNDING.  All amounts paid under this Plan shall be paid in cash from
        the general assets of the Company.  Such amounts shall be reflected
        on the accounting records of the Company, but shall not be construed
        to create, or require the creation of, a trust, custodial or escrow
        account.  No Participant shall have any right, title or interest
        whatever in or to any investment reserves, accounts or funds that the
        Company may purchase, establish or accumulate to aid in providing the
        benefits under this Plan.  Nothing contained in this Plan, and no
        action taken pursuant to its provisions, shall create a trust or
        fiduciary relationship of any kind between the Company and a
        Participant or any other person.  Neither shall an employee acquire
        any interest greater than that of an unsecured creditor.

7.4     VESTING.  Benefits under this Plan shall become nonforfeitable at the
        earlier of disability, or retirement under the Traditional Pension
        Option of the Qualified Retirement Plan after reaching age 60 or
        after five years of service credit and termination of employment or
        retirement under the Qualified Retirement Plan Contemporary Pension
        Option.  Notwithstanding the preceding sentence, a Participant or his
        beneficiary shall have no right to benefits hereunder if the Company
        determines that he engaged in a willful, deliberate or gross act of
        commission or omission which is substantially injurious to the
        finances or reputation of the Company.

7.5     ADMINISTRATION.  This Plan shall be administered by the Company which
        shall have, to the extent appropriate, the same powers, rights,
        duties and obligations with respect to this Plan as it does with
        respect to the Qualified Retirement Plan; provided, however, that the
        determination of the Company as to any questions arising under this
        Plan, including questions of construction and interpretation shall be
        final, binding, and conclusive upon all persons.

7.6     EXPENSES.  The expenses of administering the Plan shall be borne by
        the Company.


                                       18



7.7     INDEMNIFICATION AND EXCULPATION.  The agents, officers, directors,
        and employees of the Company and its affiliates shall be indemnified
        and held harmless by the Company against and from any and all loss,
        cost, liability, or expenses that may be imposed upon or reasonably
        incurred by them in connection with or resulting from any claim,
        action, suit, or proceeding to which they may be a party or in which
        they may be involved by reason of any action taken or failure to act
        under this Plan and against and from any and all amounts paid by them
        in settlement (with the Company's written approval) or paid by them
        in satisfaction of a judgment in any such action, suit, or
        proceeding.  The foregoing provision shall not be applicable to any
        person if the loss, cost, liability, or expense is due to such
        person's gross negligence of willful misconduct.

7.8     EFFECT ON OTHER BENEFIT PLANS.  Amounts credited or paid under this
        Plan shall not be considered to be compensation for the purposes of a
        qualified pension plan or any other benefit plan maintained by the
        Company.  The treatment of such amounts under other employee benefit
        plans shall be pursuant to the provisions of such plans.

7.9     TAX LIABILITY.  The Company may withhold from any payment of benefits
        hereunder any taxes required to be withheld and such sum as the
        Company may reasonably estimate to be necessary to cover any taxes
        for which the Company may be liable and which may be assessed with
        regard to such payment.


                                       19



                                   EXHIBIT I




                                TITLES AS OF
                               1 NOVEMBER 1996                 OFFICER SINCE
                               ---------------                 -------------
                                                         
Hans W. Becherer               Chairman & COO & CEO            26 Apr 1977

Bernard L. Hardiek             President, Worldwide            26 Aug 1987
                               Ag. Equipment Division

Ferdinand F. Korndorf          President, Worldwide            23 Sep 1991
                               Commercial & Consumer
                               Equipment Division

John K. Lawson                 Sr. VP, Engineering,            27 Feb 1985
                               Information & Technology

Eugene L. Schotanus            Executive VP                    29 Jan 1974
                               Financial Services              (Retired)

Joseph W. England              Sr. VP, Worldwide Parts         29 Jan 1974
                               & Corp. Administration

Pierre E. Leroy                President, Worldwide            12 Dec 1985
                               Industrial Equipment Div.

Michael S. Plunkett            Sr., VP, Engineering,           29 Jan 1980
                               Technology & HR                 (Retired)

Frank S. Cottrell              VP, General Counsel             26 Aug 1987
                               & Corporate Secretary

Robert W. Lane                 Sr. VP & CFO                    16 Jan 1996

John S. Gault                  former VP, Engr., Info,         01 Jan 1994
                               & Tech. GM, Harvester

Glen D. Gustafson              former Comptroller              28 Jul 1981
                               Dir., Bus. Planning             (Retired)

Robert W. Porter               Sr. VP, North American          16 Nov 1994
                               Ag. Marketing


                                       20





EXHIBIT I (CONTINUED)

                               TITLES AS OF
                               1 NOVEMBER 1996                 OFFICER SINCE
                               ---------------                 -------------
                                                         
Adel A. Zakaria                Sr. VP, Worldwide               01 Apr 1992
                               Ag Engr. & Mfg.

James D. White                 Sr. VP, Manufacturing           26 Aug 1987

Mark C. Rostvold               Sr. VP, Worldwide               26 Aug 1987
                               Commercial & Consumer
                               Equip. Division

Dennis E. Hoffmann             President                       05 Dec 1990
                               John Deere Insurance            (Retired)

Michael P. Orr                 President                       05 Dec 1990
                               John Deere Credit Company

Richard J. VanBell             President                       16 Jan 1994
                               John Deere Health Care          (Retired)




                                       21

EX-10.15

                                                                   EXHIBIT 10.15





                                DEERE & COMPANY





                           1993 NONEMPLOYEE DIRECTOR
                              STOCK OWNERSHIP PLAN



                                      LOGO






                                                               FEBRUARY 24, 1993
                                                            AMENDED MAY 25, 1994
                                                       RESTATED FEBRUARY 1, 1996
                                                         AMENDED AUGUST 25, 1999



ARTICLE 1.  ESTABLISHMENT, PURPOSE, AND DURATION

1.1     ESTABLISHMENT OF THE PLAN

Deere & Company, a Delaware corporation, hereby establishes an incentive
compensation plan to be known as the "1993 Deere & Company Nonemployee
Director Stock Ownership Plan" (the "Plan"), as set forth in this
document. The Plan provides for the grant of Restricted Stock to
Nonemployee Directors, subject to the terms and provisions set forth
herein.

Upon approval by the Board of Directors of the Company, subject to
ratification within six (6) months by an affirmative vote of a majority
of Shares, the Plan shall become effective as of February 24, 1993 (the
"Effective Date"), and shall remain in effect as provided in Section 1.3
herein. Each amendment to the Plan shall become effective as of the date
set forth in such amendment.

1.2     PURPOSE OF THE PLAN

The purpose of the Plan is to further the growth, development, and
financial success of the Company by strengthening the Company's ability
to attract and retain the services of experienced and knowledgeable
Nonemployee Directors by enabling them to participate in the Company's
growth and by linking the personal interests of Nonemployee Directors to
those of Company shareholders.

1.3     DURATION OF THE PLAN

The Plan shall commence on the Effective Date and shall remain in effect,
subject to the right of the Board of Directors to terminate the Plan at
any time pursuant to Article 8 herein, until all Shares subject to it
have been acquired according to the Plan's provisions. However, in no
event may an Award be granted under the Plan on or after February 28,
2002.

ARTICLE 2.  DEFINITIONS

2.1     DEFINITIONS

Whenever used in the Plan, the following terms shall have the meaning set
forth below:

(a)      "Award" means a grant of Restricted Stock under the Plan.

(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)      "Board" or "Board of Directors" means the Board of Directors of the
         Company, and includes a committee of the Board of Directors designated
         by the Board to administer part or all of the Plan.

(d)      "Change in Control" of the Company shall be deemed to have occurred as
         of the first day that any one or more of the following conditions shall
         have been satisfied:

         (1)      Any person as the term is defined in Section 3(a)(9) of the
                  Exchange Act and used in Sections 13(d) and 14(d) thereof,
                  including a "group" as defined in Section 13(d) (but not
                  including the Company, any subsidiary of the Company, a
                  trustee or other fiduciary holding securities under an
                  employee benefit plan of the Company or of any subsidiary of
                  the Company, or any person or entity organized or established
                  by the Company in connection with or pursuant to any such
                  benefit plan), becomes the Beneficial Owner, directly or
                  indirectly, of securities of the Company representing thirty
                  percent (30%) or more of the combined voting power of the
                  Company's then outstanding securities, PROVIDED, that there
                  shall not be included among the securities as to which any
                  person is a Beneficial Owner securities as to which the power
                  to vote arises by virtue of proxies solicited by the
                  management of the Company;

         (2)      During any period of two (2) consecutive years (not including
                  any period prior to the Effective Date), individuals who at
                  the beginning of such period constitute the Board (and any new
                  Director, whose election by the Company's shareholders was
                  approved by a vote of at least two-thirds (2/3) of the
                  Directors then still in office who either were Directors at
                  the beginning of the period or whose election or nomination
                  for election was so approved), cease for any reason to
                  constitute a majority thereof;


                                       1


         (3)      The shareholders of the Company approve: (A) a plan of
                  complete liquidation of the Company; or (B) an agreement for
                  the sale or disposition of all or substantially all the
                  Company's assets; or (C) a merger, consolidation, or
                  reorganization of the Company with or involving any other
                  corporation, other than a merger, consolidation, or
                  reorganization that would result in the voting securities of
                  the Company outstanding immediately prior thereto continuing
                  to represent (either by remaining outstanding or by being
                  converted into voting securities of the surviving entity), at
                  least eighty percent (80%) of the combined voting power of the
                  voting securities of the Company (or such surviving entity)
                  outstanding immediately after such merger, consolidation, or
                  reorganization.

(e)      "Code" means the Internal Revenue Code of 1986, as amended from time to
         time.

(f)      "Company" means Deere & Company, a Delaware corporation, (including any
         and all subsidiaries), or any successor thereto as provided in Section
         9.7 herein.

(g)      "Director" means any individual who is a member of the Board of
         Directors of the Company.

(h)      "Disability" means a permanent and total disability, within the meaning
         of Code Section 22(e)(3).

(i)      "Employee" means any full-time, nonunion, salaried employee of the
         Company.

(j)      "Exchange Act" means the Securities Exchange Act of 1934, as amended
         from time to time, or any successor Act thereto.

(k)      "Fair Market Value" as it relates to common stock of the Company on any
         given date means (i) the mean of the high and low sales prices of the
         common stock of the Company as reported by the Composite Tape of the
         New York Stock Exchange (or, if not so reported, on any domestic stock
         exchanges on which the common stock is then listed); or (ii) if the
         Company's common stock is not listed on any domestic stock exchange,
         the mean of the high and low sales prices of the Company's common stock
         as reported by the Nasdaq Stock Market on such date or the last
         previous date reported (or, if not so reported, by the system then
         regarded as the most reliable source of such quotations) or, if there
         are no reported sales on such date, the mean of the closing bid and
         asked prices as so reported; or (iii) if the common stock is listed on
         a domestic exchange or quoted in the domestic over-the-counter market,
         but there are not reported sales or quotations, as the case may be, on
         the given date, the value determined pursuant to (i) or (ii) above
         using the reported sale prices or quotations on the last previous date
         on which so reported; or (iv) if none of the foregoing clauses applies,
         the fair value as determined in good faith by the Company's Board of
         Directors or the Committee.

(l)      "Nonemployee Director" means any individual who is a member of the
         Board of Directors of the Company, but who is not otherwise an Employee
         of the Company.

(m)      "Restricted Stock" or "Restricted Share" means Shares granted to a
         Nonemployee Director pursuant to Article 6.

(n)      "Shares" means the shares of common stock of the Company, $1.00 par
         value.

ARTICLE 3.  ADMINISTRATION

3.1     THE BOARD OF DIRECTORS

The Plan shall be administered by the Board of Directors of the Company,
subject to the restrictions set forth in the Plan.

3.2     ADMINISTRATION BY THE BOARD

The Board shall have the full power, discretion, and authority to
interpret and administer the Plan in a manner which is consistent with
the Plan's provisions. However, in no event shall the Board have the
power to determine Plan eligibility, or to determine the amount, the
price, or the timing of Awards to be made under the Plan (all such
determinations are automatic pursuant to the provisions of the Plan). Any
action taken by the Board with respect to the administration of the Plan
which would result in any Nonemployee Director ceasing to be a
"disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act shall be null and void.


                                       2


3.3     DECISIONS BINDING

All determinations and decisions made by the Board pursuant to the
provisions of the Plan and all related orders or resolutions of the Board
of Directors shall be final, conclusive, and binding on all persons,
including the Company, its shareholders, Employees, Nonemployee
Directors, and their estates and beneficiaries.

ARTICLE 4.  SHARES SUBJECT TO THE PLAN

4.1     NUMBER OF SHARES

Subject to adjustment as provided in Section 4.3 herein, the total number
of Shares available for grant under the Plan may not exceed 90,000.

4.2     LAPSED AWARDS

If any Shares granted under this Plan terminate, expire, or lapse for any
reason, such Shares again shall be available for grant under the Plan.
However, in the event that prior to an Award's termination, expiration,
or lapse, the holder of the Award at any time received one or more
"benefits of ownership" pursuant to such Award (as defined by the
Securities and Exchange Commission, pursuant to any rule or
interpretation promulgated under Section 16 of the Exchange Act), the
Shares subject to such Award shall not be made available for regrant
under the Plan.

4.3.    ADJUSTMENTS IN AUTHORIZED SHARES

In the event of any merger, reorganization, consolidation,
recapitalization, liquidation, stock dividend, split-up, Share
combination, or other change in the corporate structure of the Company
affecting the Shares, the Board may make such adjustments to outstanding
Awards to prevent dilution or enlargement of rights; provided, however,
that no such adjustment shall be made if the adjustment may cause the
Plan to cease to be a formula plan within the meaning of Rule 16b-3 under
the Exchange Act.

ARTICLE 5.  PARTICIPATION

5.1     PARTICIPATION

Persons participating in the Plan shall include, and be limited to, all
Nonemployee Directors of the Company.


ARTICLE 6. RESTRICTED STOCK

6.1     ANNUAL AWARDS

An annual Award of Restricted Shares to each Nonemployee Director will be
made automatically as of the date one week following the date of the
annual meeting for the election of Directors in an amount equivalent to
$60,000 based on the Fair Market Value of common stock of the Company.
Although the period of service shall run from the date of the annual
meeting, the grant date shall be one week following the annual meeting to
permit the dissemination to the market of information coming out of such
meeting. Restricted shares previously granted to the Nonemployee Director
for the same period shall be deducted from such Award.

6.2     PARTIAL AWARDS

Upon the effective date of any amendment in the amount of any Award, each
Nonemployee Director shall receive a partial Award calculated as if the
Nonemployee Director were serving a partial term as provided in Section
6.3, below, provided that the Fair Market Value shall be determined as of
the grant date one week following the effective date of the Award.
Restricted shares previously granted to the Nonemployee Director for the
same period shall be deducted from such Award.

6.3     PARTIAL TERMS

A Nonemployee Director who is elected by the Board to fill a vacancy
between annual meetings shall automatically be granted a pro rata portion
of the number of Restricted Shares awarded to Nonemployee Directors as of
the date of the most recent annual meeting. Such prorated number of
shares shall be determined by multiplying the number of Restricted Shares
awarded as of the date of the most recent annual meeting by a fraction,
the numerator of which is the number of days remaining until the date of
the next annual meeting for the election of Directors, and the
denominator of which is the number of days between such annual meetings.

6.4     CUSTODY AND TRANSFERABILITY

The Shares awarded to a Nonemployee Director may not be sold, pledged,
assigned, transferred, gifted, or otherwise alienated or hypothecated
until such time as the restrictions with respect to such Shares have
lapsed as provided herein. At the time Restricted


                                       3


Shares are awarded to a Nonemployee Director, shares representing the
appropriate number of Restricted Shares shall be registered in the name of the
Nonemployee Director but shall be held by the Company in custody for the account
of such person. As Restrictions lapse on Shares upon death, Disability or
retirement as contemplated by Section 6.8, certificates therefor will be
delivered to the Participant.

6.5     OTHER RESTRICTIONS

The Company may impose such other restrictions on any Shares granted
pursuant to the Plan as it may deem advisable including, without
limitation, restrictions intended to achieve compliance with the
Securities Act of 1933, as amended, with the requirements of any stock
exchange upon which such Shares or Shares of the same class are then
listed, and with any blue sky or securities laws applicable to such
Shares. Shares delivered upon death, Disability or retirement as
contemplated by Section 6.8 may bear such legends, if any, as the Board
shall specify.

6.6     VOTING RIGHTS

Participants granted Restricted Stock hereunder shall have full voting
rights on such Shares.

6.7     DIVIDEND RIGHTS

Participants granted Restricted Stock hereunder shall have full dividend
rights, with such dividends being paid to Participants. If all or part of
a dividend is paid in Shares, the Shares shall be held by the Company
subject to the same restrictions as the Restricted Stock that is the
basis for the dividend.

6.8     TERMINATION OF SERVICE FROM BOARD

The restrictions provided for in Sections 6.4 and 6.5 shall remain in
effect until, and shall lapse only upon, the termination of a Nonemployee
Director's service as a Director by reason of death, Disability, or
retirement from the board, and the Shares shall thereafter be delivered
to the Nonemployee Director or the decedent's beneficiary as designated
pursuant to Section 9.3.

In the event the Nonemployee Director's service as a Director is
terminated for any other reason, including, without limitation, any
involuntary termination on account of (a) fraud or intentional
misrepresentation, or (b) embezzlement, misappropriation, or conversion
of assets or opportunities of the Company, all Restricted Shares awarded
to such Nonemployee Director prior to the date of termination shall be
immediately forfeited and returned to the Company.

6.9     TAX WITHHOLDING

The Company shall have the right under this plan to collect cash from
Nonemployee Directors in an amount necessary to satisfy any Federal,
state or local withholding tax requirements. Any Nonemployee Director may
elect to satisfy withholding, in whole or in part, by having the Company
withhold shares of common stock having a value equal to the amount
required to be withheld.

ARTICLE 7. CHANGE IN CONTROL

7.1     CHANGE IN CONTROL

Notwithstanding the provisions of Article 6 herein, in the event of a
Change in Control, any and all restrictions on Restricted Shares shall
lapse as of the date of the Change in Control, and the Company shall
deliver new certificates for such Restricted Shares which do not contain
the legend of restrictions required by Section 6.5.

ARTICLE 8.  AMENDMENT, MODIFICATION, AND TERMINATION

8.1     AMENDMENT, MODIFICATION AND TERMINATION

Subject to the terms set forth in this Section 8.1, the Board may
terminate, amend, or modify the Plan at any time and from time to time;
provided, however, that the provisions set forth in the Plan regarding
the amount, the price or the timing of Awards to Nonemployee Directors
may not be amended more than once every six (6) months, other than to
comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder.

Without such approval of the shareholders of the Company as may be
required by the Code, by the rules of Section 16 of the Exchange Act, by
any national securities exchange or system on which the Shares are then
listed or reported, or by a regulatory body having jurisdiction with
respect hereto, no such termination, amendment or modification may:

(a)      Materially increase the total number of Shares which may be available
         for grants of Awards


                                       4


         under the Plan, except as provided in Section 4.3 herein; or

(b)      Materially modify the requirements with respect to eligibility to
         participate in the Plan; or

(c)      Materially increase the benefits accruing to Nonemployee Directors
         under the Plan.

8.2     AWARDS PREVIOUSLY GRANTED

Unless required by law, no termination, amendment or modification of the
Plan shall materially affect, in an adverse manner, any Award previously
granted under the Plan, without the consent of the Nonemployee Director
holding the Award.

ARTICLE 9. MISCELLANEOUS

9.1     GENDER AND NUMBER

Except where otherwise indicated by the context, any masculine term used
herein also shall include the feminine; the plural shall include the
singular, and the singular shall include the plural.

9.2     SEVERABILITY

In the event any provision of the Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.

9.3     BENEFICIARY DESIGNATION

Each Nonemployee Director under the Plan may from time to time name any
beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in the
event of his or her death. Each designation will revoke all prior
designations by the same Nonemployee Director, and will be effective only
when filed by the Nonemployee Director in writing with the Board during
his or her lifetime. In the absence of any such designation, benefits
remaining unpaid at the Nonemployee Director's death shall be paid to the
Nonemployee Director's estate.

9.4     NO RIGHT OF NOMINATION

Nothing in the Plan shall be deemed to create any obligation on the part
of the Board to nominate any Nonemployee Director for reelection by the
Company's shareholders.

9.5     SHARES AVAILABLE

The Shares made available pursuant to Awards under the Plan may be either
authorized but unissued Shares, or Shares which have been or may be
reacquired by the Company, as determined from time to time by the Board.

9.6     ADDITIONAL COMPENSATION

Shares granted under the Plan shall be in addition to any annual
retainer, attendance fees, or other compensation payable to each
Nonemployee Director as a result of his or her service on the Board.

9.7     SUCCESSORS

All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.

9.8     REQUIREMENTS OF LAW

The granting of Awards under the Plan shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any governmental
agencies or national securities exchanges as may be required.

9.9     GOVERNING LAW

To the extent not preempted by Federal law, the Plan, and all agreements
hereunder, shall be construed in accordance with and governed by the laws
of the State of Delaware.

9.10    SECURITIES LAW COMPLIANCE

With respect to any Nonemployee Directors subject to Section 16 of the
Exchange Act, transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the Exchange
Act. To the extent any provision of the Plan or action by the Board fails
to so comply, it shall be deemed null and void to the extent permitted by
law and deemed advisable by the Board.


                                       5

EX-10.16

                                                                   EXHIBIT 10.16








                               DEERE & COMPANY


                NONEMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN






                       EFFECTIVE DATE: 01 JANUARY 1997

                           REVISED:  26 MAY 1999



                               DEERE & COMPANY

              NONEMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN



I.      PURPOSE

The purposes of the Deere & Company Nonemployee Director Deferred Compensation
Plan ("Plan") are to attract and retain highly qualified individuals to serve as
Directors of Deere & Company ("Company") and to relate Nonemployee Directors'
interests more closely to the Company's performance and its shareholders'
interests.


II.     ELIGIBILITY

Each member of the Board of Directors ("Board") of the Company who is not an
employee of the Company or any of its subsidiaries ("Nonemployee Director") is
eligible to participate in the Plan.


III.    DEFINITIONS

        (a)      COMMITTEE.   The Nominating Committee of the Board or any
                 successor committee of the Board.

        (b)      COMMON STOCK.   The publicly traded $1 par value common
                 stock of the Company or any successor.

        (c)      COMPENSATION.   Amounts payable for services as a
                 Nonemployee Director, excluding reimbursed expenses.

        (d)      DEFERRED ACCOUNT.   The bookkeeping account maintained for
                 each participating Nonemployee Director which will be
                 credited with Deferred Amounts pursuant to the terms hereof.

        (e)      DEFERRED AMOUNTS.   All amounts credited to a Nonemployee
                 Director's Deferred Account pursuant to the Plan.

        (f)      ELECTIVE DEFERRALS.   Compensation voluntarily deferred by a
                 Nonemployee Director under the Plan after 31 December 1996
                 (other than Lump-Sum Deferral defined below).

        (g)      LUMP-SUM DEFERRAL.   A one-time lump-sum amount for each
                 Nonemployee Director serving on 31 December 1996, which
                 amount is


                                       1



                 deferred under the Plan as described in Section V, below, as a
                 result of the termination of the John Deere Pension Benefit
                 Plan for Directors ("Retirement Plan").

        (h)      PARTICIPANT.   A Nonemployee Director for whom a Lump-Sum
                 Deferral occurs on the Effective Date, or who elects to
                 participate in the Plan.

        (i)      PRE-1997 ELECTIVE DEFERRALS.   Compensation deferred by a
                 Nonemployee Director prior to 1 January 1997 under the
                 predecessor Directors' Deferred Compensation Plan approved
                 30 January 1973, as amended from time to time.

        (j)      SECRETARY.  The Secretary of the Company.


IV.     EFFECTIVE DATE

The effective date of the Plan is 1 January 1997 ("Effective Date").


V.      LUMP-SUM DEFERRAL

As of the Effective Date, the Retirement Plan will be eliminated and the present
value of the life annuity offered under the Retirement Plan for each Nonemployee
Director who is both a participant in the Retirement Plan and a member of the
Board on the Effective Date will be deposited into the Deferred Account of such
Nonemployee Director.  The present value will be determined by using a discount
factor which shall be the rate for 10-year treasury stripped bonds in effect as
of 31 December 1996 and by using the 1984 Unisex Pension Mortality tables
published in the Pension Benefit Guaranty Corporation Regulation 2619, Appendix
A.


VI.     ELECTIVE DEFERRAL


        (a)      Participants may elect to defer a part or all of their
                 annual Compensation by making an irrevocable deferral
                 election in writing on a form provided by the Company and
                 delivered to the Company not later than the Company may
                 direct.  Elective Deferrals will become effective on the
                 first day of the following calendar quarter, at which time
                 they become irrevocable.  Notwithstanding the preceding
                 sentence, any person who first becomes a Nonemployee
                 Director during a calendarquarter, may elect, before his or
                 her term begins, to defer a part or all of his or her
                 compensation that would otherwise be payable to him or her
                 during the remainder of such calendar quarter and each
                 succeeding calendar quarter until such election


                                       2



                 is modified or terminated as provided herein.  A Participant
                 may discontinue deferrals, or may change his or her
                 investment choices, for future quarters by providing a
                 written election delivered to the Company not later than the
                 Company may direct.  These changes will become effective on
                 the first day of the following calendar quarter.

        (b)      If the amount of a Participant's Compensation is changed,
                 the deferral percentage and investment alternative elections
                 shall continue to be applied to the new Compensation amount
                 after the change.

VII.    DEFERRED ACCOUNT

        (a)      The Company shall establish a separate Deferred Account for
                 each Participant.

        (b)      Pre-1997 Elective Deferrals and the interest earned thereon
                 shall be credited to the Deferred Account and will continue
                 to be invested in the interest-bearing investment
                 alternative described below.

        (c)      Two investment alternatives will be available, as of the
                 Effective Date: an interest-bearing alternative and an
                 equity alternative denominated in units of Deere Common
                 Stock.  Additional investment alternatives may be added by
                 subsequent amendment of the Plan.

        (d)      At the time of Elective Deferral, Participants may direct
                 their deferrals into either investment alternative, or a
                 combination of the two, in increments of 5%.

        (e)      Deferred amounts credited into the interest-bearing
                 investment alternative will be credited with interest at the
                 end of each calendar quarter at the interest rate identified
                 in the U.S. Federal Reserve Statistical Release, "bank prime
                 loan" rate for the second month of each calendar quarter,
                 plus 2%.

        (f)      Deferred Amounts credited into the equity alternative shall
                 be expressed and credited to each Participant's Deferred
                 Account in units ("Units") determined as hereinafter
                 provided.  As of each date on which Deferred Amounts are
                 credited into the equity investment alternative, the Company
                 shall credit to such Deferred Account a number of Units and
                 fractional Units, rounded to three decimal places,
                 determined by dividing such Deferred Amounts by the Unit
                 Value (as defined below) of one share of Common Stock.  The
                 "Unit Value" of one share of Common Stock shall be the
                 closing price of the Common Stock on the New York Stock
                 Exchange


                                       3



                 on the date on which Deferred Amounts are credited to the
                 Deferred Account or a payment is to be valued under Section
                 VIII (b) below, as the case may be; or if there were no
                 sales on that day, then Unit Value shall be the closing
                 price on the New York Stock Exchange Composite Tape on the
                 most recent preceding day on which there were sales.  The
                 Lump-Sum Deferral shall be credited as of the Effective Date.

        (g)      When dividends are paid with respect to the Company's Common
                 Stock, the Company shall calculate the amount which would
                 have been payable on the Units in each Participant's
                 Deferred Account on each dividend record date as if each
                 Unit represented one issued and outstanding share of the
                 Company's Common Stock.  The applicable number of Units and
                 fractional Units equal to the amount of such dividends
                 (based on the Unit Value of one share of the Company's
                 Common Stock on the dividend payment date) shall be credited
                 to each Participant's Deferred Account.  In the event of any
                 capital stock adjustment to the Company's Common Stock or
                 other similar event, the number of Units or fractional Units
                 credited to Deferred Accounts shall be adjusted to
                 appropriately reflect such event.

        (h)      Participants credited with Units hereunder shall not have
                 any voting rights in respect thereof.

VIII.   PAYMENT OF BENEFITS

        (a)      The value of a Participant's Deferred Account shall be
                 payable solely in cash, either in (i) a lump sum, or (ii) in
                 up to ten equal annual installments, in accordance with an
                 election made by the Participant by written notice delivered
                 to the Company prior to the calendar year in which payments
                 are to be made or commence.  Such payment or payments shall
                 be made or commence, as the case may be, on the first
                 business day of the calendar year following the year of the
                 termination of service as Director.

        (b)      Any lump sum payment shall be valued as of the end of the
                 most recent calendar month prior to the payment date.  The
                 amount of each installment payment shall be determined by
                 dividing the aggregate value credited to the Participant's
                 Deferred Account (as of the end of the most recent calendar
                 month prior to the payment date) by the remaining number of
                 unpaid installments; provided, however, that the Committee
                 may, in its absolute discretion, approve any other method of
                 determining the amount of each installment payment in order
                 to achieve approximately equal installment payments over the
                 installment period.

        (c)      The Company shall have the right to deduct from all payments
                 under this


                                       4



                 Plan the amount necessary to satisfy any Federal, state, or
                 local withholding tax requirements.

        (d)      The Committee, at its sole discretion, may alter the timing
                 or manner of payment of Deferred Amounts in the event that
                 the Participant establishes, to the satisfaction of the
                 Board, severe financial hardship.  In such event, the
                 Committee may:

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

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

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

                 It is expressly provided that the amount distributed shall
                 not be in excess of that amount which is necessary for the
                 Participant to meet the financial hardship.  Severe
                 financial hardship will be deemed to have occurred in the
                 event of the Participant's impending bankruptcy, the long
                 and serious illness of Participant or a dependent, other
                 events of similar magnitude, or the invalidation of a
                 deferral election by the Internal Revenue Service.  The
                 Committee's decision in passing on the severe financial
                 hardship of the Participant and the manner in which, if at
                 all, the payment of Deferred Amounts shall be altered or
                 modified shall be final, conclusive and not subject to
                 appeal.

IX.     DEATH OF PARTICIPANT

        (a)      In the event of the death of a Participant, any amounts
                 remaining in the Deferred Account will be paid to the
                 Participant's designated beneficiary in accordance with the
                 distribution choices (e.g., lump sum or installments)
                 elected by the Participant.  These payments will commence on
                 the first business day of the calendar year following the
                 Participant's death.  Amounts unpaid after the death of both
                 the Participant and the designated beneficiary will be paid
                 in a lump sum to the executor or administrator of the estate
                 of the last of them to die.  In the event that a Participant
                 had not properly filed a beneficiary designation with the
                 Company prior to his or her death or, in the event a
                 beneficiary predeceases the Participant, any unpaid


                                       5



                 deferrals will be paid in a lump sum to the Participant's
                 estate.

        (b)      No beneficiary hereunder shall have any right to assign,
                 alienate, pledge, hypothecate, anticipate, or in any way
                 create a lien upon any part of this Plan, nor shall the
                 interest of any beneficiary or any distributions due or
                 accruing to such beneficiary be liable in any way for the
                 debts, defaults, or obligations of such beneficiary, whether
                 such obligations arise out of contract or tort.

X.      CHANGE OF CONTROL

The following acceleration and valuation provisions shall apply in the event of
a "Change of Control" or "Potential Change of Control," as defined in this
Section X.

        (a)      In the event that:

                 (i)      a "Change of Control" as defined in paragraph (b) of
                          this Section X occurs; or

                 (ii)     a "Potential Change of Control" as defined in
                          paragraph (c) of this Section X occurs and the
                          Committee or the Board determines that the
                          provisions of this paragraph (a) should be invoked;

                 then, unless otherwise determined by the Committee or the
                 Board in writing prior to the occurrence of such Change of
                 Control, the value of all Units credited to a Participant's
                 Deferred Account shall be converted to cash based on the
                 "Change of Control Price" (as defined in paragraph X(d)) and
                 the aggregate amount credited to the Participant's Deferred
                 Account under the Plan shall be paid in one lump-sum payment
                 as soon as practicable following the date the Change of
                 Control or Potential Change of Control occurs, but in no
                 event more than 90 days after such date.

        (b)      For purposes of paragraph (a) of this Section X, a "Change
                 of Control" means a change in control of a nature that would
                 be required to be reported in response to Schedule 14A of
                 Regulation 14A promulgated under the Securities Exchange Act
                 of 1934 ("Exchange Act") whether or not the Company is then
                 subject to such reporting requirement, provided that,
                 without limitation, such a Change of Control shall be deemed
                 to have occurred if:

                 (i)      any "person" (as defined in Sections 13(d) and
                          14(d) of the


                                       6



                          Exchange Act), other than a Participant in the Plan
                          or group of Participants in the Plan, is or becomes
                          the "beneficial owner" (as defined in Rule 13(d)(3)
                          under the Exchange Act), directly or indirectly, of
                          securities of the Company representing 30% or more
                          of the combined voting power of the Company's then
                          outstanding securities;

                 (ii)     during any period of two consecutive years, there
                          shall cease to be a majority of the Board comprised
                          as follows: individuals who at the beginning of
                          such period constitute the Board and any new
                          director(s) whose election by the Board or
                          nomination for election by the Company's
                          stockholders was approved by a vote of at least _
                          of the directors then still in office who either
                          were directors at the beginning of the period or
                          whose election or nomination for election was
                          previously so approved;

                 (iii)    the shareholders of the Company approve a merger or
                          consolidation of the Company with any other
                          company, other than a merger or consolidation which
                          would result in the voting securities of the
                          Company outstanding immediately prior thereto
                          continuing to represent (either by remaining
                          outstanding or by being converted into voting
                          securities of the surviving entity) at least 80% of
                          the combined voting power of the voting securities
                          of the Company or such surviving entity outstanding
                          immediately after such merger of consolidation; or

                 (iv)     the shareholders of the Company approve a plan of
                          complete liquidation of the Company or an agreement
                          for the sale or disposition by the Company of all
                          or substantially all of the Company's assets.

        (c)      For purposes of paragraph (a) of this Section X, a "Potential
                 Change of Control" means the happening of any of the
                 following:

                 (i)      the entering into an agreement by the Company
                          (other than with a Participant in the Plan or group
                          of Participants in the Plan), the consummation of
                          which would result in a Change of Control of the
                          Company as defined in paragraph (b) of this Section
                          X; or

                 (ii)     the acquisition of beneficial ownership, directly
                          or indirectly, by any entity, person or group
                          (other than a Participant or group of Participants,
                          the Company or a majority owned subsidiary of the
                          Company, or any of the Company's employee benefit
                          plans including its trustee) of securities of the
                          Company representing 5%  or more of the combined
                          voting power of the Company's


                                       7



                          outstanding securities and the adoption by the
                          Board of a resolution to the effect that a
                          Potential Change of Control of the Company has
                          occurred for purposes of the Plan.

        (d)      For purposes of this Section X, "Change of Control Price"
                 means the highest price per share of the Common Stock paid
                 in any transaction reported on the New York Stock Exchange
                 Composite Tape, or offered in any transaction related to a
                 Potential or actual Change of Control of the Company at:

                 (i)      the date the Change of Control occurs;

                 (ii)     the date the Potential Change of Control is
                          determined to have occurred; or

                 (iii)    such other date as the Committee may determine
                          before the Change of Control occurs, or before or
                          at the time the Potential Change of Control is
                          determined to have occurred or the Committee or the
                          Board determines that the provisions of paragraph
                          X(a) shall be invoked, or at any time selected by
                          the Committee during the 60 day period preceding
                          such date.

        (e)      Notwithstanding anything to the contrary in the Plan, in the
                 event of a Change of Control (i) the Plan may not be amended
                 to reduce the formulas contained in paragraph VII(e) which
                 determine the rate at which amounts equivalent to interest
                 accrue with respect to cash amounts credited to a
                 Participant's Deferred Account, including cash amounts
                 attributable to the conversion of Units in a Participant's
                 Deferred Account pursuant to paragraph X(a), and (ii) the
                 successor Plan Administrator referred to in paragraph XI(d)
                 shall determine the rates under the interest formulas
                 contained in paragraph VII(e).

XI.     MISCELLANEOUS

        (a)      The right of a Participant to receive any amount credited to
                 the Participant's Deferred Account shall not be transferable
                 or assignable by the Participant, in whole or in part,
                 either directly or by operation of law or otherwise,
                 including, but not by way of limitation, execution, levy,
                 garnishment, attachment, pledge, bankruptcy, or in any other
                 manner, and no right or interest established herein shall be
                 liable for, or subject to, any obligation or liability of
                 the Participant, except by will or by the laws of descent
                 and distribution.  To the extent that any person acquires a
                 right to receive any amount credited to a Participant's
                 Deferred Account hereunder, such right shall be no greater
                 than that of an unsecured


                                       8



                 general creditor of the Company.  Except as expressly
                 provided herein, any person having an interest in any amount
                 credited to a Participant's Deferred Account under the Plan
                 shall not be entitled to payment until the date the amount
                 is due and payable.  No person shall be entitled to
                 anticipate any payment by assignment, alienation, sale,
                 pledge, encumbrance or transfer in any form or manner prior
                 to actual or constructive receipt thereof.

        (b)      The amounts credited to the Deferred Account shall constitute
                 an unsecured claim against the general funds of the Company.
                  The Company shall not be required to reserve or otherwise
                 set aside funds or shares of Common Stock for the payment of
                 its obligations hereunder.  The Plan is unfunded, and the
                 Company will make Plan benefit payments solely from the
                 general assets of the Company as benefit payments come due
                 from time to time.

        (c)      Except as herein provided, this Plan shall be binding upon
                 the parties hereto, their designated beneficiaries, heirs,
                 executors, administrators, successors (including but not
                 limited to successors resulting from any corporate merger,
                 purchase, consolidation or otherwise of all or substantially
                 all of the business or assets of the Company) or assigns.

        (d)      In the event of a Change in Control, the Committee shall
                 interpret the Plan and make all determinations, construe any
                 ambiguity, supply any omission, and reconcile any
                 inconsistency, deemed necessary or desirable for the Plan's
                 implementation.  The determination of the Committee shall be
                 conclusive.  The Committee may obtain such advice or
                 assistance as it deems appropriate from persons not serving
                 on the Committee.  The Secretary or other appropriate
                 officer of the Company shall, in the event of any Change in
                 Control, name as successor Plan Administrator any person or
                 entity (including, without limitation, a bank or trust
                 company).  Following a Change in Control, the successor Plan
                 Administrator shall interpret the Plan and make all
                 determinations deemed necessary or desirable for the Plan's
                 implementation.  The determination of the successor Plan
                 Administrator shall be conclusive.  The Company shall
                 provide the successor Plan Administrator with such records
                 and information as are necessary for the proper
                 administration of the Plan.  The successor Plan
                 Administrator shall rely on such records and other
                 information as the successor Plan Administrator shall in its
                 judgment deem necessary or appropriate in determining the
                 eligibility of a Participant and the amount payable to a
                 Participant under the Plan.

        (e)      The Board, upon recommendation of the Committee, may at any
                 time amend or terminate the Plan provided that no amendment
                 or termination shall impair the rights of a Participant with
                 respect to amounts then credited to the Participant's
                 Deferred Account, except with his or her consent.


                                       9



        (f)      Each Participant will receive a quarterly statement
                 indicating the amounts credited to the Participant's
                 Deferred Account as of the end of the preceding calendar
                 quarter.

        (g)      If adjustments are made to outstanding shares of Common Stock
                 as a result of stock dividends, stock splits,
                 recapitalizations, reorganizations, mergers, consolidations
                 and other changes in the corporate structure of the Company
                 affecting the Common Stock, an appropriate adjustment will
                 also be made in the number of Units credited to the
                 Participant's Deferred Account.

        (h)      This Plan and all elections hereunder shall be construed in
                 accordance with and governed by the laws of the State of
                 Illinois.

        (i)      Except where otherwise indicated by the context, any term
                 used herein connoting gender also shall include both the
                 masculine and feminine; the plural shall include the
                 singular, and the singular shall include the plural.

        (j)      In the event any provision of the Plan shall be held illegal
                 or invalid for any reason, the illegality or invalidity
                 shall not affect the remaining parts of the Plan, and the
                 Plan shall be construed and enforced as if the illegal or
                 invalid provision had not been included.

        (k)      Nothing in the Plan shall be deemed to create any obligation
                 on the part of the Board to nominate any Nonemployee
                 Director for reelection by the Company's shareholders, or
                 rights to any benefits not specifically provided by the Plan.

        (l)      The crediting of Units and the payment of cash under the
                 Plan shall be subject to all applicable laws, rules, and
                 regulations, and to such approvals by any governmental
                 agencies as may be required.

        (m)      The Company may impose such other restrictions on any Units
                 credited pursuant to the Plan as it may deem advisable
                 including, without limitation, restrictions intended to
                 achieve compliance with the Securities Act of 1933, as
                 amended, Section 16 of the Securities Exchange Act of 1934,
                 as amended, with the requirements of any stock exchange upon
                 which Common Stock is listed, and with any blue sky or other
                 securities laws applicable to such Units.

        (n)      With respect to any Participants subject to Section 16 of
                 the Securities Exchange Act, transactions under the Plan are
                 intended to comply with all applicable conditions of Rule
                 16b-3 or its successors.  To the extent any provision of the
                 Plan or action by the Board fails to so comply, it shall be
                 deemed null and void to the extent permitted by law and
                 deemed advisable by the Board.


                                       10

EX-12

                                                                      EXHIBIT 12


                 DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES

               COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

                           (In thousands of dollars)




                                                       Year Ended October 31
                                  ----------------------------------------------------------------
                                    1999         1998          1997          1996          1995
                                    ----         ----          ----          ----          ----
                                                                         
Earnings:

  Income of consolidated
   group before income
   taxes and changes in
   accounting................     $365,135    $1,560,032    $1,507,070    $1,286,634    $1,092,751
  Dividends received from
   less than fifty percent
   owned affiliates..........        5,734         5,555         3,591         7,937         2,023
  Fixed charges excluding
   capitalized interest......      571,949       531,817       433,673       410,764       399,056
                                  --------    ----------    ----------    ----------    ----------

     Total earnings..........     $942,818    $2,097,404    $1,944,334    $1,705,335    $1,493,830
                                  ========    ==========    ==========    ==========    ==========

Fixed charges:

  Interest expense of
   consolidated group
   including capitalized
   interest..................     $557,740    $  521,418    $  422,588    $  402,168    $  392,408
  Portion of rental
   charges deemed to
   be interest...............       15,347        12,451        11,497         8,596         6,661
                                  --------    ----------    ----------    ----------    ----------

     Total fixed charges.....     $573,087    $  533,869    $  434,085    $  410,764    $  399,069
                                  ========    ==========    ==========    ==========    ==========

Ratio of earnings to
 fixed charges*..............         1.65          3.93          4.48          4.15          3.74
                                  ========    ==========    ==========    ==========    ==========



- --------------------

   The computation of the ratio of earnings to fixed charges is based on
   applicable amounts of the Company and its consolidated subsidiaries plus
   dividends received from less than fifty percent owned affiliates. "Earnings"
   consist of income before income taxes, changes in accounting and fixed
   charges excluding capitalized interest. "Fixed charges" consist of interest
   on indebtedness, amortization of debt discount and expense, an estimated
   amount of rental expense which is deemed to be representative of the interest
   factor, and capitalized interest.

*  The Company has not issued preferred stock. Therefore, the ratios of
   earnings to combined fixed charges and preferred stock dividends are the
   same as the ratios presented above.

EX-21

                                                                      EXHIBIT 21
                                 DEERE & COMPANY
                          AND CONSOLIDATED SUBSIDIARIES

                          SUBSIDIARIES OF THE REGISTRANT

                              As of October 31, 1999

       Subsidiary companies of Deere & Company are listed below. Except where
otherwise indicated, 100 percent of the voting securities of the companies
named is owned directly or indirectly by Deere & Company.



                                                                           Organized under
Name of subsidiary                                                           the laws of
- ------------------                                                         ---------------
                                                                        
Subsidiaries included in consolidated
    financial statements *

       John Deere Construction Equipment Company. . . . . . . . . . . . . . . . Delaware
       John Deere Agricultural Holdings, Inc. . . . . . . . . . . . . . . . . . Delaware
       John Deere Construction Holdings, Inc. . . . . . . . . . . . . . . . . . Delaware
       John Deere Lawn and Grounds Care Holdings, Inc.. . . . . . . . . . . . . Delaware
       John Deere Turf Care, Inc. . . . . . . . . . . . . . . . . . . . . . . . Delaware
       John Deere Commercial Worksite Products, Inc.. . . . . . . . . . . . . . Tennessee
       John Deere Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . Canada
       John Deere - Lanz Verwaltungs A.G. (99.9% owned) . . . . . . . . . . . . Germany
       John Deere S.A.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . France
       John Deere Iberica S.A.. . . . . . . . . . . . . . . . . . . . . . . . . Spain
       John Deere Intercontinental GmbH . . . . . . . . . . . . . . . . . . . . Germany
       John Deere International GmbH. . . . . . . . . . . . . . . . . . . . . . Germany
       Chamberlain Holdings Limited . . . . . . . . . . . . . . . . . . . . . . Australia
       John Deere Limited Australia . . . . . . . . . . . . . . . . . . . . . . Australia
       John Deere Power Products, Inc.. . . . . . . . . . . . . . . . . . . . . Tennessee
       Industrias John Deere Argentina S.A. . . . . . . . . . . . . . . . . . . Argentina
       John Deere Foreign Sales Corporation Limited . . . . . . . . . . . . . . Jamaica
       John Deere Credit Company. . . . . . . . . . . . . . . . . . . . . . . . Delaware
       John Deere Capital Corporation . . . . . . . . . . . . . . . . . . . . . Delaware
       John Deere Credit, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . Canada
       John Deere Receivables, Inc. . . . . . . . . . . . . . . . . . . . . . . Nevada
       John Deere Funding Corporation . . . . . . . . . . . . . . . . . . . . . Nevada
       Deere Receivables Corporation. . . . . . . . . . . . . . . . . . . . . . Nevada
       Deere Credit, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . Delaware
       Deere Credit Services, Inc.. . . . . . . . . . . . . . . . . . . . . . . Delaware
       Arrendadora John Deere S.A. de C.V. (99.9% owned). . . . . . . . . . . . Mexico
       John Deere Credit Limited (Australia). . . . . . . . . . . . . . . . . . Australia
       John Deere Credit Group, PLC . . . . . . . . . . . . . . . . . . . . . . England
       Senstar Capital Corporation. . . . . . . . . . . . . . . . . . . . . . . Delaware
       John Deere Health Care, Inc. . . . . . . . . . . . . . . . . . . . . . . Delaware
       John Deere Health Plan, Inc. . . . . . . . . . . . . . . . . . . . . . . Illinois
       John Deere Family Healthplan, Inc. . . . . . . . . . . . . . . . . . . . Illinois
       Funk Manufacturing Company . . . . . . . . . . . . . . . . . . . . . . . Delaware
       Cameco Industries, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . Louisiana
       Cameco Marine, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . Louisiana
       Cameco International, Inc. . . . . . . . . . . . . . . . . . . . . . . . Louisiana
       Sprayfab, LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Louisiana
       John Deere S.A. de C.V.. . . . . . . . . . . . . . . . . . . . . . . . . Mexico
       John Deere Brasil Participacoes LTDA . . . . . . . . . . . . . . . . . . Brazil
       SLC Distribuidora De Titulos e Valores . . . . . . . . . . . . . . . . . Brazil

- -----------

    *  Fifty-six consolidated subsidiaries and twenty unconsolidated affiliates
whose names are omitted, considered in the aggregate as a single subsidiary,
would not constitute a significant subsidiary.

EX-23

                                                                     Exhibit 23

[LOGO]                                           [LETTERHEAD]




INDEPENDENT AUDITORS' CONSENT



We consent to the incorporation by reference in Registration Statement Nos.
2-62630, 2-76637, 2-90384, 33-15949, 33-17990, 33-24397, 33-44294, 33-49740,
33-49742, 33-49762, 33-55551, 33-55549, 33-57897, 333-01477, 333-62665, and
333-62669 of Deere & Company on Form S-8 and in Registration Statement Nos.
333-73317 and 33-54149 of Deere & Company on Form S-3 of our report dated
November 23, 1999, appearing in this Annual Report on Form 10-K of Deere &
Company for the year ended October 31, 1999, and to the reference to us under
the heading "Experts" in the Prospectuses, which are part of such
Registration Statements.

DELOITTE & TOUCHE LLP

Chicago, Illinois
January 25, 2000



[LOGO]

EX-27

 


<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.


<CIK> 0000315189
<NAME> DEERE & COMPANY
<MULTIPLIER> 1,000,000
<CURRENCY> U.S.DOLLARS

                             
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          OCT-31-1999
<PERIOD-START>                             NOV-01-1998
<PERIOD-END>                               OCT-31-1999
<EXCHANGE-RATE>                                    1.0
<CASH>                                             296
<SECURITIES>                                       316
<RECEIVABLES>                                   10,425
<ALLOWANCES>                                       127
<INVENTORY>                                      1,294
<CURRENT-ASSETS>                                     0
<PP&E>                                           4,890
<DEPRECIATION>                                   3,108
<TOTAL-ASSETS>                                  17,578
<CURRENT-LIABILITIES>                                0
<BONDS>                                          3,806
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                         1,850
<OTHER-SE>                                       2,244
<TOTAL-LIABILITY-AND-EQUITY>                    17,578
<SALES>                                          9,701
<TOTAL-REVENUES>                                11,751
<CGS>                                            8,178
<TOTAL-COSTS>                                    9,467
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                    74
<INTEREST-EXPENSE>                                 557
<INCOME-PRETAX>                                    365
<INCOME-TAX>                                       135
<INCOME-CONTINUING>                                239
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                       239
<EPS-BASIC>                                       1.03
<EPS-DILUTED>                                     1.02