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EXHIBIT 10.5
PERFORMANCE PERIOD 2004-2006
[DIEBOLD LOGO]
PERFORMANCE SHARE AGREEMENT
WHEREAS, ___________ (hereinafter called the "Grantee") is a
key
associate of Diebold, Incorporated (hereinafter called the
"Corporation") or a Subsidiary; and
WHEREAS, the execution of a Performance Share Agreement
substantially in the form hereof has been authorized by a
resolution of
the
Compensation Committee (the "Committee") of the Board of Directors
of
the
Corporation (the "Board") duly adopted on February 11, 2004.
NOW, THEREFORE, subject to the terms and conditions of the
1991
Equity and Performance Incentive Plan (As Amended and Restated as
of
February
7, 2001), and as further amended by Amendment No. 1 and
Amendment
No. 2 (the
"Plan"), and the terms and conditions described below, the
Corporation hereby grants to the Grantee as of February 11,
2004,
____________ Performance Shares, together with the opportunity to
earn up
to an
additional 100% of such number of Performance Shares for
superior
performance as described herein.
1. Definitions.
As used in this Agreement:
(a) A "Change in Control" shall be deemed to have occurred if
any of the
following events shall occur:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
(a
"Person") of beneficial ownership (within the meaning of Rule
13d-3
promulgated under the Exchange Act) of 15% of more of either:
(A)
the then-outstanding shares of common stock of the Corporation
(the
"Corporation Common Stock") or (B) the combined voting power of
the
then-outstanding voting securities of the Corporation entitled
to
vote generally in the election of directors ("Voting Stock");
provided, however, that for purposes of this subsection (i),
the
following acquisition shall not constitute a Change in Control
(1)
any acquisition directly from the Corporation, (2) any
acquisition
by the Corporation, (3) any acquisition by any employee benefit
plan
(or related trust) sponsored or maintained by the Corporation or
any
Subsidiary of the Corporation, or (4) any acquisition by any
Person
pursuant to a transaction which complies with clauses (A), (B)
and
(C) of subsection (iii) of this Section 1(b); or
(ii) Individuals who, as to the date hereof, constitute
the Board cease for any reason (other than death or disability)
to
constitute at least a majority of the Board; provided, however,
that
any individual becoming a director subsequent to the date
hereof
whose election, or nomination for election by the Corporation's
shareholders, was approved by a vote of at least a majority of
the
directors then comprising the Incumbent Board (either by a
specific
vote or by approval of the proxy statement of the Corporation
in
which such person is named as a nominee for director, without
objection to such nomination) shall be considered as though
such
individual were a member of the Incumbent Board, but excluding
for
this purpose, any such individual whose initial
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assumption of office occurs as a result of an actual or
threatened
election contest (within the meaning of Rule 14a-11 of the
Exchange
Act) with respect to the election or removal of directors or
other
actual or threatened solicitation of proxies or consents by or
on
behalf of a Person other than the Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially
all of the assets of the Corporation (a "Business Combination"),
in
each case, unless, following such Business Combination, (A) all
or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Corporation Common Stock
and
Voting Stock
immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of,
respectively, the then-outstanding shares of common stock and
the
combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors, as the
case
may be, of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of
such
transaction owns the Corporation or all or substantially all of
the
Corporation's assets either directly or through one or more
subsidiaries) in substantially the same proportions relative to
each
other as their ownership, immediately prior to such Business
Combination, of the Corporation Common Stock and Voting Stock of
the
Corporation, as the case may be, (B) no Person (excluding any
entity
resulting from such Business Combination or any employee
benefit
plan (or related trust) sponsored or maintained by the
Corporation
or such entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 15% or more of,
respectively, the then-outstanding shares of common stock of
the
entity resulting from such Business Combination, or the
combined
voting power of the then-outstanding voting securities of such
corporation except to the extent that such ownership existed
prior
to the Business Combination and (C) at least a majority of the
members of the board of directors of the corporation resulting
from
such Business Combination were members of the Incumbent Board at
the
time of the execution of the initial agreement, or of the action
of
the Board providing for such Business Combination; or
(iv) Approval by the shareholders of the Corporation of
a complete liquidation or dissolution of the Corporation.
(b) "Management Objectives" means Relative Total Shareholder
Return
goals established by the Board for the Corporation for the
Performance Period covered by this Agreement as described in
Section 2 of
this
Agreement.
(c) "Performance Period" means the period commencing with the
closing
price of the Common Shares of the Corporation on January 28,
2004
through
the time of the determination of the closing price on the New
York
Stock
Exchange on the day of the Corporation's annual earnings release
in
January
2007.
(d) "Relative Total Shareholder Return" or "Relative TSR"
means the
return, including reinvested dividends (or as determined at the
beginning
of the Performance Period in such manner as is consistent with
the
index), shareholders earn from investing in Common Shares, relative
to
the return
earned from an investment in each of the following: (i) a
benchmark
peer group index comprised of the 14 companies set forth on
Exhibit A
and (ii) all the companies comprising the Standard & Poors
400
Midcap
Index at the closing prices of January 28, 2004.
(e) Capitalized terms used herein without definition shall
have the
meanings assigned to them in the Plan.
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2. Management Objectives.
The Management Objectives for the Performance Period covered
by this
Agreement are set forth on Exhibit B. The following applies
with
respect to
the Management Objectives.
(a) Each Management Objective shall be evaluated separately
with the total award determined
through the matrix set forth on Exhibit B,
which
correlates the Corporation's performance against each
Management
Objective.
(b) In no event shall the Grantee be entitled to receive more
than 200% of the Performance
Shares granted hereunder.
3. Grant of Performance Shares.
The Corporation hereby grants to the Grantee the number of
Performance Shares specified above, which may be earned by the
Grantee
during the
Performance Period as set forth in Section 4 of this Agreement.
4. Earned Shares.
The Performance Shares granted hereby shall be earned based on
the level
of the Corporation's results with respect to each of the
Management
Objectives established for the Performance Period covered by
this
Agreement. The number of Performance Shares earned shall be
determined
based on the level of results of the Management Objectives in
accordance
with the matrix, which correlates performance against both
measures,
as set forth on Exhibit B. No additional Performance Shares
shall be
earned for results in excess of the maximum level of results
for
the
Management Objectives. If results for a Management Objective
are
attained
at interim levels of performance on the matrix, a proportionate
number of
Performance Shares shall be earned, as determined by
mathematical interpolation, as described by example in Exhibit B.
If the
Corporation's performance with respect to both Management
Objectives is
determined
to be below the 10th percentile, the number of Performance
Shares
earned, if any, shall be at the discretion of the Committee,
except
in the
case of Covered Employees.
5. Payment of Awards.
Payment shall be made in the form of the Corporation's Common
Shares,
cash or a combination of Common Shares and cash, as determined
by
the
Committee in its sole discretion. Final awards shall be paid,
less
applicable
taxes, as soon as practicable after the receipt of audited
financial
statements relating to the last fiscal year of the Performance
Period
covered by this Agreement and the determination by the Committee
of
the level
of attainment of each Management Objective, except as otherwise
agreed to
by the Corporation and the Grantee.
Any payment of awards due pursuant to this Agreement to a
deceased
Grantee shall be paid to the beneficiary designated by the
Grantee by
the latest Designation of Death Beneficiary in the form
attached
as Exhibit C hereto filed by the Grantee with the Corporation.
If
no such
beneficiary has been designated or survives the Grantee,
payment
shall be
made to the Grantee's legal representative. A beneficiary
designation may be changed or revoked by a Grantee at any time,
provided
the change
or revocation is filed with the Corporation.
Prior to
payment, the Corporation shall only have an unfunded
and
unsecured obligation to make payment of earned awards to the
Grantee.
6. Effect of Change in Control.
In the event of a Change in Control prior to the end of the
Perform
