401(k) SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
Amended and Restated January 1,
2008
401(k) SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
Amended and Restated January 1,
2008
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1
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ARTICLE II PURPOSE OF THE PLAN
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1
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1
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1
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(2) “Annual Compensation”
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2
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2
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2
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2
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(6) “Change in Control
Benefit”
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2
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2
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2
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2
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2
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2
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(12) “Disability Benefit”
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2
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(13) “Early Retirement
Age”
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2
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2
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(15) “Normal Retirement
Age”
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3
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3
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3
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3
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3
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(20) “Retirement Benefit”
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3
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(21) “Separation from
Service”
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3
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(22) “Specified Employee”
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3
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3
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(24) “Termination For
Cause”
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3
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(25) “Termination of
Employment”
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4
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4
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5
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i
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ARTICLE IV ELIGIBILITY, PARTICIPATION AND
VESTING
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5
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(a) Eligibility for Participation in
Plan
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5
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(b) Eligibility for Benefits
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5
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5
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(d) Forfeiture of Plan Benefits
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5
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ARTICLE V PLAN CONTRIBUTION CREDITS AND
EARNINGS
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6
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(a) Employer Contribution
Credits
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6
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6
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ARTICLE VI RETIREMENT BENEFITS
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6
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(a) Qualification for Benefit
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6
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(b) Computation of Amount of
Benefit
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7
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ARTICLE VII VESTED BENEFIT
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7
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(a) Qualification for Benefit
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7
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(b) Computation of Amount of
Benefit
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7
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ARTICLE VIII DISABILITY BENEFIT
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7
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(a) Qualification for Benefit
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7
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(b) Computation of Amount of
Benefit
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7
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ARTICLE IX BENEFIT UPON CHANGE IN
CONTROL
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7
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(a) Qualification for Benefit
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7
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7
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(c) Computation of Amount of Change in
Control Benefit
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9
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(a) Qualification for Benefit
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9
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(b) Computation of Amount of the Death
Benefit
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9
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ARTICLE XI FORM AND TIMING OF PAYMENT
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10
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(a) Automatic Form of Payment
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10
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(b) Timing of Benefit Payment
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10
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10
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ARTICLE XII PLAN ADMINISTRATION
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10
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(a) Administration by Committee
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10
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(b) Powers of the Committee
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11
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11
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(d) Claims and Review Procedure
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11
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(e) Deadline to File Claim
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13
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(f) Exhaustion of Administrative
Remedies
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13
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(g) Deadline to File Legal
Action
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14
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(h) Knowledge of Fact by Participant
Imputed to Beneficiary
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14
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(i) Information Furnished by
Participants
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ARTICLE XIII MISCELLANEOUS
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14
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14
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(b) No Guaranty of Benefits
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15
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(c) Assignments and Restrictions
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16
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16
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16
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(g) Binding Effect on Employer,
Participants, Spouses and Their Successors
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(h) Participant Information
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ARTICLE XIV AMENDMENT AND TERMINATION
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17
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iii
DIEBOLD, INCORPORATED 401(k)
SUPPLEMENTAL
EXECUTIVE RETIREMENT
PLAN
Amended and Restated
January 1, 2008
The Diebold,
Incorporated 401(k) Supplemental Executive Retirement Plan (the
“Plan”) was adopted effective as of January 1,
2007. The Plan is being amended as of January 1, 2008 to
comply with final regulations under Code Section 409A, as
enacted by the American Jobs Creation Act of 2004.
ARTICLE II
PURPOSE OF THE PLAN
This Plan was
created for the principle purpose of providing retirement income
for a select group of executive and highly compensated management
employees, within the meaning of Section 201(2), 301(a)(5) and
401(a)(1) of ERISA, of Diebold, Incorporated and its subsidiary
organizations. It is intended to supplement benefits payable under
the Diebold, Incorporated 401(k) Savings Plan, as well as benefits
payable under the Federal Social Security Act and certain other
deferred compensation arrangements. The Plan is intended to comply
with Section 409A of the Internal Revenue Code. During the
period from January 1, 2007 (the original effective date) and
until the effective date of this Restatement) the Plan was operated
in good faith compliance with IRS Notice 2005-1, proposed
regulations under Code §409A and other applicable
guidance.
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(a)
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The
following definitions shall apply with respect to this
Plan:
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(1)
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“Affiliate” shall mean
any entity included with the Company in a controlled group of
corporations or trades or businesses under common control within
the meaning of Code §414(b) or §414(c), an affiliated
service group within the meaning of Code §414(n), or any other
entity required to be aggregated with the Company under Code
§414(o). For all purposes under this Plan, in applying Code
§1563(a)(1), (2) and (3) for purposes of determining the
Company’s Affiliates under Code §414(b), the language
“at least 80%” shall be applied as it appears in those
sections, and in applying Treas. Reg. §1.414(c)-2 for purposes
of determining trades or business (whether or not incorporated)
that are under
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common control
for purposes of Code §414(c), the language “at least
80%” shall be used as it appears in such
regulation.
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(2)
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“Annual Compensation
“shall mean a Participant’s base pay from an Employer
for any Plan Year including any amounts excluded from the
Participant’s gross income as a deferral under a nonqualified
deferred compensation plan of the Company pursuant to a salary
reduction agreement plus the Participants annual incentive bonus in
the calendar year in which it is accrued. Annual Compensation also
include amounts paid to individuals who are citizens or residents
of the United States and who are employees of, or provide services
to, a foreign Affiliate of the Company to which an agreement
entered into by the Company under Code Section 3121(1)
applies.
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(3)
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“Beneficiary” shall mean
a person or entity designated by the Participant to receive the
Death Benefit payable under this Plan, as are outlined in
Article X. A Beneficiary may, but is not required to,
designate a Spouse as the Beneficiary.
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(4)
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“Board” shall mean the
Board of Directors of Diebold, Incorporated.
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(5)
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“Change in Control”
shall have the meaning assigned to such term in Article
IX.
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(6)
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“Change in Control
Benefit” shall mean the benefit determined in accordance with
Article IX.
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(7)
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“Code” shall mean the
Internal Revenue Code of 1986, as amended from time to
time.
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(8)
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“Committee” shall mean
the Compensation Committee of the Board, as such Committee may be
constituted from time to time.
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(9)
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“Company” shall mean
Diebold, Incorporated.
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(10)
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“Company Service” shall
mean years of employment (measured in years and completed months)
with an Employer.
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(11)
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“Death Benefit” shall
mean the benefit determined in accordance with Article X
hereof.
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(12)
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“Disability Benefit”
shall mean the benefit determined in accordance with
Article VIII hereof.
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(13)
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“Early Retirement Age”
shall mean age at which the Participant has both attained age 55
and completed 10 years of Company Service.
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(14)
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“Employer” shall mean
(a) the Company or its successors, and (b) any Affiliate
or other entity which may specifically adopt this Plan with the
consent of the Company, or its successors.
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(15)
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“Normal Retirement Age”
shall mean age 65.
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(16)
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“Participant” shall mean
any executive highly paid or management employee of an Employer who
is selected to participate in this Plan pursuant to the provisions
of Article IV.
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(17)
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“Plan” shall mean this
Diebold, Incorporated 401(k) Supplemental Executive Retirement
Plan, as in effect from time to time.
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(18)
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“Plan Account” shall
mean the Participant’s account balance under the Plan which
shall equal the total amount of the contributions made to the Plan
on behalf of the Participant as determined under Article V, as
adjusted by earnings or losses thereon.
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(19)
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“Points” shall be the
numerical total of the Participant’s years of age plus years
of Company Service.
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(20)
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“Retirement Benefit”
shall mean the benefit payable under Article VI
hereof.
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(21)
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“Separation from
Service” shall mean a Participant dies, retires, or otherwise
has a Termination of Employment from the Employer. A Separation
from Service shall not be considered to have occurred if the
Participant’s employment relationship is treated by the
Employer as continuing while the Participant is on military leave,
sick leave, or other bona fide leave of absence if such period of
leave does not exceed 6 months or, if longer, so long as the
individual’s right to reemployment is provided by statute or
by contract. If the period of leave exceeds 6 months and such
reemployment rights are not provided, the employment relationship
is deemed to terminate on the first date immediately following such
6-month period. Whether a Separation from Service has occurred will
be determined in accordance with the requirements of Code
§409A.
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(22)
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“Specified Employee”
shall mean a key employee as defined in Code Section 416(i) as
further interpreted by the Treasury Regulations issued under Code
Section 409A.
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(23)
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“Spouse” shall mean the
surviving spouse of a Participant at the time of his
death..
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(24)
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“Termination for Cause”
shall mean Participant’s Termination of Employment by an
Employer due to the Participant’s:
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(i)
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intentional act of fraud,
embezzlement or theft in connection with his duties or in the
course of his employment with the Employer;
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(ii)
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intentional wrongful damage to
property of the Employer;
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(iii)
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intentional wrongful disclosure of
secret processes or confidential information of the Employer;
or
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(iv)
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intentional wrongful engagement in
any competitive activity which would constitute a material breach
of the duty of loyalty to the Employer and any such at shall have
been materially harmful to the Employer.
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For
purposes of the Plan, no act, or failure to act, on the part of the
Participant shall be deemed “intentional” if it was due
primarily to an error in judgment or negligence, but shall be
deemed “intentional” only if done, or omitted to be
done, by the Participant not in good faith or without reasonable
belief that his action or omission was not in or opposed tot eh
best interest of the Employer. Notwithstanding the foregoing, a
Participant shall not be deemed to have been Terminated for Cause
hereunder unless and until there shall have been delivered to the
Participant a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the Board then in office at
a meeting of the Board called and held for such purposes, finding
that, in the good faith opinion of the Board, the Participant had
committed an act set forth above and specifying the particulars
thereof in detail. The Participant shall receive reasonable notice
and an opportunity for the Participant, together with his counsel,
to be heard before the Board. Nothing herein shall limit the right
of the Participant or his Beneficiaries to contest the validity or
propriety of any such determination.
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(25)
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“Termination of
Employment” shall mean the severing of employment with the
Employer, voluntarily or involuntarily. A Participant is presumed
to have incurred a Termination of Employment from the Employer
where the facts and circumstances indicate that the Employer and
the Participant reasonably anticipated that no further services
would be performed after a certain date or the level of bona fide
services the Participant would perform after such date would
permanently decrease to 20% or less of the average level of
services over the immediately preceding 36-month period (or the
full period of such services, if less than 36 months). A
Termination of Employment will be determined in accordance with
treasury Regulation 1.409A-1(h)(l)(ii).
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(26)
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“Total Disability”.
shall mean a physical or mental impairment that causes a
Participant to be unable to engage in any substantial gainful
activity, which can be expected to result in death or can be
expected to last for a continuous period of not less than
12 months. Such determination of disability may be made by
the
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Social Security
Administration or may be made pursuant to the Company’s long
term disability insurance program.
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(27)
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“Vested Benefit” shall
mean the benefit determined in accordance with Article VII
hereof.
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(b)
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Throughout this Plan, and whenever
appropriate, the masculine gender shall be deemed to include the
feminine and neuter, the singular shall be deemed to include the
plural and vice versa.
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ARTICLE IV
ELIGIBILITY, PARTICIPATION AND
VESTING
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(a)
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Eligibility for Participation in the
Plan . The
Chief Executive Officer of the Company shall nominate executive or
highly paid management employees of the Employer whose compensation
exceeds the limit set forth under Section 401(a)(17) of the
Internal Revenue Code for participation in the Plan. The Committee
shall make the final decision as to those executives or highly paid
management employees who shall become Participants in the Plan.
Newly appointed executive or highly paid management employee shall
become Participants in the Plan effective as of the next following
January 1.
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(b)
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Eligibility for Benefits
. A Participant shall be
entitled to receive a Retirement Benefit (or have a Retirement
Benefit provided for his surviving Spouse or Beneficiary) only if
he satisfies the conditions of this Article IV and satisfies
the qualification requirements of any of the Articles under the
Plan to become eligible to receive a benefit thereunder.
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(c)
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Vesting . A Participant shall be vested
hereunder upon attaining ten years of Company Service or upon
meeting the requirements for a Disability Benefit or Change in
Control Benefit or upon attaining age 65 hereunder.
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(d)
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Forfeiture of Plan
Benefits . In
the absence of a Change in Control or a finding of Total
Disability, a Participant’s participation shall cease and no
benefits under this Plan shall be payable:
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(i)
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to
a Participant if the Participant:
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(A)
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voluntarily terminates employment
before completing at least ten years of Company Service;
or
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(B)
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fails to give an Employer six months
written advance notice of his pending voluntary Termination of
Employment if he is leaving Diebold prior to age 55 (or three
months written advance notice if he is leaving Diebold at age 55 or
later); or
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(C)
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is
Terminated for Cause; or
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(ii)
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to
a Participant’s Spouse or Beneficiary, if the
Participant:
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(A)
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dies prior to satisfying the
requirements for a Death Benefit under Article X;
or
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(B)
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is
Terminated for Cause.
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ARTICLE V
PLAN CONTRIBUTION CREDITS AND
EARNINGS
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(a)
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Employer Contribution
Credits . For
each calendar year, the Company shall make a contribution credit to
the Plan Account on behalf of each Participant who is employed on
the last day of such calendar year or who had a Termination of
Employment during the calendar year as a result of retirement,
death or Total Disability. The amount of the contribution credit
shall be determined by multiplying the Annual Compensation of the
Participant by a percentage. Such percentage shall be determined
based on the number of Points accrued by the participant as
determined under the table set forth below:
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POINTS
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CONTRIBUTION CREDIT
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5
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%
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10
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%
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12.5
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%
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15
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%
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20
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%
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(b)
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Investment Earnings
. Company contributions
made pursuant to paragraph (a) above will be deposited as soon
as administratively possible after the end of the calendar year to
which the contribution applies and will be held in an account in
the Participant’s name in a rabbi trust as set forth in
Article XIII(a). Contributions will be invested in the
investment funds selected by the Participant under the Diebold,
Incorporated 401(k) Savings Plan. Any change in the investment
funds selected under the Diebold, Incorporated 401(k) Savings Plan
will proportionately affect the Participant’s Plan Account of
this Plan.
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ARTICLE VI
RETIREMENT BENEFITS
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(a)
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Qualification for Benefit
. Subject to the
provisions of Article IV, a Participant who attains his Normal
Retirement Age or Early Retirement Age while employed by an
Employer shall be eligible to retire and receive a Retirement
Benefit payable as set forth in Article XI.
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(b)
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Computation of Amount of
Benefit . A
Participant who retires on or after attaining Normal Retirement Age
or Early Retirement Age shall be entitled to receive a Retirement
Benefit equal to his Plan Account.
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ARTICLE VII
VESTED BENEFIT
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(a)
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Qualification for Benefit
. Subject to the
provisions of Article IV, a Participant who has a Termination
of Employment before he reaches Normal Retirement Age or Early
Retirement Age and after the Partic
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