DEFERRED COMPENSATION PLAN NO.
2
FOR DIRECTORS OF DIEBOLD,
INCORPORATED
(Effective as of January 1,
2005)
Diebold,
Incorporated hereby establishes, effective as of January 1,
2005, the Deferred Compensation Plan No. 2 for Directors of
Diebold, Incorporated to provide Directors with the opportunity to
defer payment of their directors’ fees in compliance with
Section 409A of the Internal Revenue Code of 1986.
Directors’ fees (and earnings thereon) that are
“deferred” (for purposes of Section 409A of the
Internal Revenue Code of 1986) after December 31, 2004 are
eligible for deferral in accordance with the provisions of this
plan. Directors’ fees (and earnings thereon) that are
“deferred” (for purposes of Section 409A of the
Internal Revenue Code) on or before December 31, 2004 are
eligible for deferral in accordance with the provisions of the 1985
Deferred Compensation Plan for Directors of Diebold,
Incorporated.
For
the purposes hereof, the following words and phrases shall have the
meanings indicated.
1. “Account”
shall mean the bookkeeping account on which the amount of the Fees
which are deferred by a Participant shall be recorded and on which
gains, losses and earnings shall be credited in accordance with the
Plan.
2. “Beneficiary”
of “Beneficiaries” shall mean the person or persons
designated by a Participant in accordance with the Plan to receive
payment of the remaining balance of the Account in the event of the
death of the Participant prior to receipt of the entire amount
credited to the Participant’s Account.
3. “Code”
shall mean the Internal Revenue Code of 1986, as amended from time
to time.
4. “Committee”
shall mean the Compensation and Pension Committee of the Board or
such other Committee as may be authorized by the Board to
administer the Plan.
5. “Company”
shall mean Diebold, Incorporated and its successors, including,
without limitation, the surviving corporation resulting from any
merger or consolidation of Diebold, Incorporated with any other
corporation or corporations.
6. “Director”
shall mean any member of the Board of Directors of the
Corporation.
7. “Election
Agreement” shall mean an agreement in substantially the form
attached hereto as Exhibit A, as modified from time to time by
the Company
8. “Fee”
shall mean all fees and compensation earned as a Director including
retainer and committee fees.
9. “Participant”
shall mean any Director who has at any time elected to defer the
receipt of Fees in accordance with the Plan.
10. “Plan”
shall mean the deferred compensation plan as set forth herein,
together with all amendments hereto, which Plan shall be called the
Deferred Compensation Plan No. 2 for Directors of Diebold,
Incorporated.
11. “Unforeseeable
Emergency” shall mean a severe financial hardship to the
Participant resulting from an illness or accident of the
Participant, the Participant’s spouse, or a dependent (as
defined in Section 152 of the Code without regard to
Sections 152(b)(1), 152(b)(2) and 152(d)(1)(B) of the Code) of
the Participant, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of
the Participant. A withdrawal on account of an Unforeseeable
Emergency may be paid to the Participant only if the amounts
distributed with respect to an emergency do not exceed the amounts
necessary to satisfy such emergency plus amounts necessary to pay
taxes and penalties reasonably anticipated as a result of the
distribution, after taking into account the extent to which such
hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the
Participant’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship) or by
cessation of deferrals under the Plan.
12. “Year”
shall mean the calendar year.
1.
Eligibility . Any Director may elect to defer receipt of all
or a specified part of his or her Fees for any Year in accordance
with Section 2 of this Article. A Director’s entitlement
to defer shall cease with respect to the Year following the Year in
which he or she ceases to be a Director.
2.
Election to Defer . (i) A Director who desires to defer
the payment of all or a portion of his or her Fees for any Year
must complete and deliver an Election Agreement to the Secretary of
the Company before the first day of the first Year of service for
which such Fees are payable. A Director who timely delivers an
Election Agreement to the Secretary of the Company shall be a
Participant.
(ii) Notwithstanding
the foregoing provision of Subsection (i), any Director hereafter
elected to the Board of Directors of the Company who was not a
Director on the preceding December 31 may make an election to
defer payment of Fees with respect to services performed subsequent
to the filing of the Election Agreement by delivering the Election
Agreement to the Secretary of the Company within thirty
(30) days of such election.
2
(iii) Notwithstanding
the foregoing provision of Subsection (i), with respect to any
“performance-based” compensation (as determined by the
Company in accordance with Section 409A of the Code) based on
services performed over a period of at least 12 months a
Participant may complete and deliver an Election Agreement to the
Secretary of the Company no later than six months before the end of
such period.
(iv) An
Election Agreement, once timely delivered, shall be effective for
all Fees for the succeeding Year and, except as otherwise specified
by a Director in his or her Election Agreement, shall continue to
be effective from Year to Year until terminated or modified by
written notice to the Secretary of the Company. Except as provided
for in the below provisions of Subsection (v), in order to be
effective to revoke or modify an election to defer fees otherwise
payable in any particular Year, a revocation or modification must
be delivered prior to the date that an initial election would be
required to be delivered under either Subsection (i) or
Subsection (iii) above.
(v) Subject
to the approval of the Company, a Participant may make a subsequent
election requesting a change in the period of deferral (subject to
the limitations set forth in Section 3 of this Article) and/or
the form of payment (subject to the limitations set forth in this
Section 5). Such subsequent election must meet all of the
following requirements and shall be in writing on a form provided
by the Company:
(a) the
subsequent election shall not take effect until at least
12 months after the date on which such amendment is
made;
(b) in
the case of a subsequent election related to a payment not made on
account of the Participant’s death or an Unforeseeable
Emergency, the first payment with respect to which the amendment is
made shall in all cases be deferred for a period of not less then
5 years from the date on which such payment otherwise would
have been made;
|
