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
,
.
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
,
,
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.
As used in this
Agreement:
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(a)
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A
“Change in Control” shall be deemed to have occurred if
any of the following events shall occur:
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(i)
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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
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(ii)
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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 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
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(iii)
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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
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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
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(iv)
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Approval by the shareholders of the
Corporation of a complete liquidation or dissolution of the
Corporation.
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(b) “Management
Objectives” means
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
,
through
,
.
(d) Capitalized
terms used herein without definition shall have the meanings
assigned to them in the Plan.
2.
Management Objectives
.
The Management
Objectives for the Performance Period covered by this Agreement are
set forth on Exhibit B-1 . 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 Exhibits B-1 and
B-2, 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.
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 Exhibits B-1
and B-2 . 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-1 . If the Corporation’s performance
with respect to both Management Objectives is determined to be
below the 10 th percentile, the number of Performance Shares
earned, if any, shall be at the discretion of the Committee, except
in the case of Covered Employees.
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, (but in all events within 2 1/2 months
of the last day of the last fiscal year of the Performance Period)
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 cha
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