x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Ohio
|
|
34-0183970
|
(State or other jurisdiction of
incorporation or organization)
|
|
(IRS Employer
Identification Number)
|
|
|
|
5995 Mayfair Road, PO Box 3077, North Canton, Ohio
|
|
44720-8077
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(Address of principal executive offices)
|
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(Zip Code)
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Large accelerated filer
|
x
|
Accelerated filer
|
o
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Non-accelerated filer
(Do not check if a smaller reporting company)
|
o
|
Smaller reporting company
|
o
|
|
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June 30,
2015 |
|
December 31,
2014 |
||||
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(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
244.4
|
|
|
$
|
322.0
|
|
Short-term investments
|
|
119.5
|
|
|
136.7
|
|
||
Trade receivables, less allowances for doubtful accounts of $29.1 and $23.0 at June 30, 2015 and December 31, 2014, respectively
|
|
562.3
|
|
|
477.9
|
|
||
Inventories
|
|
425.5
|
|
|
405.2
|
|
||
Deferred income taxes
|
|
110.5
|
|
|
111.0
|
|
||
Prepaid expenses
|
|
25.5
|
|
|
22.0
|
|
||
Prepaid income taxes
|
|
26.0
|
|
|
11.7
|
|
||
Other current assets
|
|
183.3
|
|
|
169.0
|
|
||
Total current assets
|
|
1,697.0
|
|
|
1,655.5
|
|
||
Securities and other investments
|
|
83.8
|
|
|
83.6
|
|
||
Property, plant and equipment, net of accumulated depreciation and amortization of $438.6 and $443.4 at June 30, 2015 and December 31, 2014, respectively
|
|
176.2
|
|
|
169.5
|
|
||
Goodwill
|
|
208.1
|
|
|
172.0
|
|
||
Deferred income taxes
|
|
85.8
|
|
|
86.5
|
|
||
Finance lease receivables
|
|
53.7
|
|
|
90.4
|
|
||
Other assets
|
|
91.1
|
|
|
84.6
|
|
||
Total assets
|
|
$
|
2,395.7
|
|
|
$
|
2,342.1
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Notes payable
|
|
$
|
35.1
|
|
|
$
|
25.6
|
|
Accounts payable
|
|
306.5
|
|
|
261.7
|
|
||
Deferred revenue
|
|
263.9
|
|
|
275.1
|
|
||
Payroll and other benefits liabilities
|
|
89.2
|
|
|
116.8
|
|
||
Other current liabilities
|
|
309.5
|
|
|
348.5
|
|
||
Total current liabilities
|
|
1,004.2
|
|
|
1,027.7
|
|
||
Long-term debt
|
|
634.8
|
|
|
479.8
|
|
||
Pensions and other benefits
|
|
199.3
|
|
|
211.0
|
|
||
Post-retirement and other benefits
|
|
20.8
|
|
|
20.8
|
|
||
Deferred income taxes
|
|
12.3
|
|
|
6.5
|
|
||
Other long-term liabilities
|
|
34.1
|
|
|
41.4
|
|
||
Commitments and contingencies
|
|
—
|
|
|
—
|
|
||
Equity
|
|
|
|
|
||||
Diebold, Incorporated shareholders' equity
|
|
|
|
|
||||
Preferred shares, no par value, 1,000,000 authorized shares, none issued
|
|
—
|
|
|
—
|
|
||
Common shares, $1.25 par value, 125,000,000 authorized shares,79,653,050 and 79,238,759 issued shares, 64,962,866 and 64,632,400 outstanding shares at June 30, 2015 and December 31, 2014, respectively
|
|
99.6
|
|
|
99.0
|
|
||
Additional capital
|
|
429.4
|
|
|
418.1
|
|
||
Retained earnings
|
|
743.8
|
|
|
762.2
|
|
||
Treasury shares, at cost (14,690,184 and 14,606,359 shares at June 30, 2015 and December 31, 2014, respectively)
|
|
(560.0
|
)
|
|
(557.2
|
)
|
||
Accumulated other comprehensive loss
|
|
(247.2
|
)
|
|
(190.5
|
)
|
||
Total Diebold, Incorporated shareholders' equity
|
|
465.6
|
|
|
531.6
|
|
||
Noncontrolling interests
|
|
24.6
|
|
|
23.3
|
|
||
Total equity
|
|
490.2
|
|
|
554.9
|
|
||
Total liabilities and equity
|
|
$
|
2,395.7
|
|
|
$
|
2,342.1
|
|
|
||||||||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net sales
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
$
|
410.1
|
|
|
$
|
409.8
|
|
|
$
|
804.1
|
|
|
$
|
793.2
|
|
Products
|
|
323.3
|
|
|
323.7
|
|
|
584.8
|
|
|
628.6
|
|
||||
|
|
733.4
|
|
|
733.5
|
|
|
1,388.9
|
|
|
1,421.8
|
|
||||
Cost of sales
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
280.8
|
|
|
283.6
|
|
|
553.7
|
|
|
558.9
|
|
||||
Products
|
|
265.1
|
|
|
263.1
|
|
|
472.4
|
|
|
512.0
|
|
||||
|
|
545.9
|
|
|
546.7
|
|
|
1,026.1
|
|
|
1,070.9
|
|
||||
Gross profit
|
|
187.5
|
|
|
186.8
|
|
|
362.8
|
|
|
350.9
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Selling and administrative expense
|
|
135.0
|
|
|
121.0
|
|
|
264.9
|
|
|
241.3
|
|
||||
Research, development and engineering expense
|
|
23.9
|
|
|
21.7
|
|
|
46.2
|
|
|
41.7
|
|
||||
Impairment of assets
|
|
(0.5
|
)
|
|
—
|
|
|
18.9
|
|
|
—
|
|
||||
Gain on sale of assets, net
|
|
(1.6
|
)
|
|
(13.1
|
)
|
|
(1.5
|
)
|
|
(12.6
|
)
|
||||
|
|
156.8
|
|
|
129.6
|
|
|
328.5
|
|
|
270.4
|
|
||||
Operating profit
|
|
30.7
|
|
|
57.2
|
|
|
34.3
|
|
|
80.5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
||||||||
Investment income
|
|
6.8
|
|
|
10.0
|
|
|
14.7
|
|
|
18.7
|
|
||||
Interest expense
|
|
(7.6
|
)
|
|
(7.9
|
)
|
|
(15.6
|
)
|
|
(14.8
|
)
|
||||
Foreign exchange (loss) gain, net
|
|
(1.2
|
)
|
|
0.6
|
|
|
(10.5
|
)
|
|
(11.4
|
)
|
||||
Miscellaneous, net
|
|
0.8
|
|
|
1.3
|
|
|
(0.4
|
)
|
|
(0.1
|
)
|
||||
Income before taxes
|
|
29.5
|
|
|
61.2
|
|
|
22.5
|
|
|
72.9
|
|
||||
Income tax expense
|
|
5.6
|
|
|
18.1
|
|
|
4.2
|
|
|
24.9
|
|
||||
Net income
|
|
23.9
|
|
|
43.1
|
|
|
18.3
|
|
|
48.0
|
|
||||
Net income (loss) attributable to noncontrolling interests
|
|
1.7
|
|
|
1.5
|
|
|
(1.1
|
)
|
|
(3.4
|
)
|
||||
Net income attributable to Diebold, Incorporated
|
|
$
|
22.2
|
|
|
$
|
41.6
|
|
|
$
|
19.4
|
|
|
$
|
51.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average shares outstanding
|
|
64.9
|
|
|
64.6
|
|
|
64.8
|
|
|
64.4
|
|
||||
Diluted weighted-average shares outstanding
|
|
65.6
|
|
|
65.2
|
|
|
65.5
|
|
|
65.0
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Diebold, Incorporated
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
0.34
|
|
|
$
|
0.64
|
|
|
$
|
0.30
|
|
|
$
|
0.80
|
|
Diluted earnings per share
|
|
$
|
0.34
|
|
|
$
|
0.64
|
|
|
$
|
0.30
|
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
||||||||
Common dividends declared and paid per share
|
|
$
|
0.2875
|
|
|
$
|
0.2875
|
|
|
$
|
0.575
|
|
|
$
|
0.575
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income
|
|
$
|
23.9
|
|
|
$
|
43.1
|
|
|
$
|
18.3
|
|
|
$
|
48.0
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
||||||||
Translation adjustment
|
|
6.3
|
|
|
11.3
|
|
|
(62.1
|
)
|
|
20.8
|
|
||||
Foreign currency hedges (net of tax $0.5, $1.0, $(1.8) and $1.9, respectively)
|
|
(1.0
|
)
|
|
(2.0
|
)
|
|
3.3
|
|
|
(3.6
|
)
|
||||
Interest rate hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net gain recognized in other comprehensive income (net of tax $(0.1), $(0.1), $(0.2) and $(0.2), respectively)
|
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
0.3
|
|
||||
Reclassification adjustment for amounts recognized in net income
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
||||
Pension and other post-retirement benefits
|
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss amortization (net of tax $(0.6), $(0.3), $(1.2) and $(0.6), respectively)
|
|
1.2
|
|
|
0.5
|
|
|
2.3
|
|
|
1.0
|
|
||||
Net prior service benefit amortization
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
|
|
1.1
|
|
|
0.4
|
|
|
2.2
|
|
|
0.9
|
|
||||
Unrealized loss on securities, net
|
|
|
|
|
|
|
|
|
||||||||
Net loss recognized in other comprehensive income (net of tax $0.0, $0.2, $0.0 and $0.8, respectively)
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(1.5
|
)
|
||||
Reclassification adjustment for amounts recognized in net income (net of tax $0.0, $0.2, $0.0 and $0.2), respectively)
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
||||
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(1.9
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
6.5
|
|
|
9.0
|
|
|
(56.4
|
)
|
|
16.4
|
|
||||
Comprehensive income (loss)
|
|
30.4
|
|
|
52.1
|
|
|
(38.1
|
)
|
|
64.4
|
|
||||
Less: comprehensive income (loss) attributable to noncontrolling interests
|
|
1.8
|
|
|
1.5
|
|
|
(0.8
|
)
|
|
(4.0
|
)
|
||||
Comprehensive income (loss) attributable to Diebold, Incorporated
|
|
$
|
28.6
|
|
|
$
|
50.6
|
|
|
$
|
(37.3
|
)
|
|
$
|
68.4
|
|
|
|
Six Months Ended
|
||||||
|
|
June 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Cash flow from operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
18.3
|
|
|
$
|
48.0
|
|
Adjustments to reconcile net income to cash flow used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
33.2
|
|
|
36.7
|
|
||
Share-based compensation
|
|
9.1
|
|
|
10.4
|
|
||
Excess tax benefits from share-based compensation
|
|
(0.2
|
)
|
|
(0.3
|
)
|
||
Devaluation of Venezuela balance sheet
|
|
7.5
|
|
|
12.1
|
|
||
Gain on sale of assets, net
|
|
(1.5
|
)
|
|
(12.6
|
)
|
||
Impairment of assets
|
|
18.9
|
|
|
—
|
|
||
Changes in certain assets and liabilities, net of the effects of acquisitions
|
|
|
|
|
||||
Trade receivables
|
|
(104.8
|
)
|
|
(100.6
|
)
|
||
Inventories
|
|
(46.3
|
)
|
|
(101.2
|
)
|
||
Prepaid expenses
|
|
(3.5
|
)
|
|
(4.5
|
)
|
||
Prepaid income taxes
|
|
(14.3
|
)
|
|
3.7
|
|
||
Other current assets
|
|
(16.9
|
)
|
|
(35.1
|
)
|
||
Accounts payable
|
|
52.0
|
|
|
87.0
|
|
||
Deferred revenue
|
|
(4.4
|
)
|
|
42.8
|
|
||
Accrued salaries, wages and commissions
|
|
(20.2
|
)
|
|
(0.9
|
)
|
||
Deferred income taxes
|
|
4.4
|
|
|
(18.5
|
)
|
||
Finance lease and notes receivables
|
|
17.8
|
|
|
(71.9
|
)
|
||
Certain other assets and liabilities
|
|
(48.3
|
)
|
|
13.1
|
|
||
Net cash used in operating activities
|
|
(99.2
|
)
|
|
(91.8
|
)
|
||
Cash flow from investing activities
|
|
|
|
|
||||
Payments for acquisitions, net of cash acquired
|
|
(59.4
|
)
|
|
—
|
|
||
Proceeds from maturities of investments
|
|
72.7
|
|
|
300.5
|
|
||
Proceeds from sale of investments
|
|
—
|
|
|
31.0
|
|
||
Payments for purchases of investments
|
|
(74.0
|
)
|
|
(230.5
|
)
|
||
Proceeds from sale of assets
|
|
5.5
|
|
|
17.6
|
|
||
Capital expenditures
|
|
(25.4
|
)
|
|
(18.4
|
)
|
||
Increase in certain other assets
|
|
(2.6
|
)
|
|
(7.9
|
)
|
||
Net cash (used in) provided by investing activities
|
|
(83.2
|
)
|
|
92.3
|
|
||
Cash flow from financing activities
|
|
|
|
|
||||
Dividends paid
|
|
(37.8
|
)
|
|
(37.4
|
)
|
||
Debt issuance costs
|
|
(0.7
|
)
|
|
—
|
|
||
Revolving debt (repayments) borrowings, net
|
|
(68.0
|
)
|
|
20.0
|
|
||
Term loan borrowings
|
|
230.0
|
|
|
—
|
|
||
Other debt borrowings
|
|
41.2
|
|
|
95.5
|
|
||
Other debt repayments
|
|
(42.3
|
)
|
|
(86.0
|
)
|
||
Distributions to noncontrolling interest holders
|
|
—
|
|
|
(2.2
|
)
|
||
Excess tax benefits from share-based compensation
|
|
0.2
|
|
|
0.3
|
|
||
Issuance of common shares
|
|
2.8
|
|
|
14.2
|
|
||
Repurchase of common shares
|
|
(2.8
|
)
|
|
(1.6
|
)
|
||
Net cash provided by financing activities
|
|
122.6
|
|
|
2.8
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(17.8
|
)
|
|
(11.1
|
)
|
||
Decrease in cash and cash equivalents
|
|
(77.6
|
)
|
|
(7.8
|
)
|
||
Cash and cash equivalents at the beginning of the period
|
|
322.0
|
|
|
230.7
|
|
||
Cash and cash equivalents at the end of the period
|
|
$
|
244.4
|
|
|
$
|
222.9
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Numerator
|
|
|
|
|
|
|
|
|
||||||||
Income used in basic and diluted earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Diebold, Incorporated
|
|
$
|
22.2
|
|
|
$
|
41.6
|
|
|
$
|
19.4
|
|
|
$
|
51.4
|
|
Denominator (in millions)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of common shares used in basic earnings per share
|
|
64.9
|
|
|
64.6
|
|
|
64.8
|
|
|
64.4
|
|
||||
Effect of dilutive shares
|
|
0.7
|
|
|
0.6
|
|
|
0.7
|
|
|
0.6
|
|
||||
Weighted-average number of shares used in diluted earnings per share
|
|
65.6
|
|
|
65.2
|
|
|
65.5
|
|
|
65.0
|
|
||||
Net income attributable to Diebold, Incorporated
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
0.34
|
|
|
$
|
0.64
|
|
|
$
|
0.30
|
|
|
$
|
0.80
|
|
Diluted earnings per share
|
|
$
|
0.34
|
|
|
$
|
0.64
|
|
|
$
|
0.30
|
|
|
$
|
0.79
|
|
Anti-dilutive shares (in millions)
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive shares not used in calculating diluted weighted-average shares
|
|
1.2
|
|
|
1.0
|
|
|
1.3
|
|
|
1.2
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Diebold, Incorporated shareholders' equity
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
449.5
|
|
|
$
|
610.3
|
|
|
$
|
531.6
|
|
|
$
|
596.8
|
|
Comprehensive income (loss) attributable to Diebold, Incorporated
|
|
28.6
|
|
|
50.6
|
|
|
(37.3
|
)
|
|
68.4
|
|
||||
Common shares
|
|
0.2
|
|
|
0.1
|
|
|
0.6
|
|
|
0.7
|
|
||||
Additional capital
|
|
6.4
|
|
|
8.8
|
|
|
11.3
|
|
|
23.9
|
|
||||
Treasury shares
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
(2.8
|
)
|
|
(1.6
|
)
|
||||
Dividends paid
|
|
(18.9
|
)
|
|
(18.7
|
)
|
|
(37.8
|
)
|
|
(37.4
|
)
|
||||
Balance at end of period
|
|
$
|
465.6
|
|
|
$
|
650.8
|
|
|
$
|
465.6
|
|
|
$
|
650.8
|
|
|
|
|
|
|
|
|
|
|
||||||||
Noncontrolling interests
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
23.3
|
|
|
$
|
17.0
|
|
|
$
|
23.3
|
|
|
$
|
24.0
|
|
Comprehensive income (loss) attributable to noncontrolling interests, net (1)
|
|
1.3
|
|
|
1.5
|
|
|
1.3
|
|
|
(4.0
|
)
|
||||
Distributions to noncontrolling interest holders
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(2.1
|
)
|
||||
Balance at end of period
|
|
$
|
24.6
|
|
|
$
|
17.9
|
|
|
$
|
24.6
|
|
|
$
|
17.9
|
|
(1)
|
Comprehensive income (loss) attributable to noncontrolling interests of
$1.8
and
$(0.8)
for the three and six months ended June 30, 2015, respectively, is net of a
$(0.5)
and
$2.1
Venezuela noncontrolling interest adjustment for the three and six months ended June 30, 2015, respectively, to reduce the carrying value to the estimated fair market value.
|
|
|
Translation
|
|
Foreign Currency Hedges
|
|
Interest Rate Hedges
|
|
Pension and Other Post-retirement Benefits
|
|
Other
|
|
Accumulated Other Comprehensive (Loss) Income
|
||||||||||||
Balance at March 31, 2015
|
|
$
|
(143.5
|
)
|
|
$
|
2.9
|
|
|
$
|
(0.4
|
)
|
|
$
|
(112.9
|
)
|
|
$
|
0.3
|
|
|
$
|
(253.6
|
)
|
Other comprehensive income (loss) before reclassifications (1)
|
|
6.2
|
|
|
(1.0
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
||||||
Amounts reclassified from AOCI
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
||||||
Net current-period other comprehensive income (loss)
|
|
6.2
|
|
|
(1.0
|
)
|
|
0.1
|
|
|
1.1
|
|
|
—
|
|
|
6.4
|
|
||||||
Balance at June 30, 2015
|
|
$
|
(137.3
|
)
|
|
$
|
1.9
|
|
|
$
|
(0.3
|
)
|
|
$
|
(111.8
|
)
|
|
$
|
0.3
|
|
|
$
|
(247.2
|
)
|
(1)
|
Other comprehensive income (loss) before reclassifications within the translation component excludes
$0.1
of translation attributable to noncontrolling interests.
|
|
|
Translation
|
|
Foreign Currency Hedges
|
|
Interest Rate Hedges
|
|
Pension and Other Post-retirement Benefits
|
|
Unrealized Gain on Securities, Net
|
|
Other
|
|
Accumulated Other Comprehensive (Loss) Income
|
||||||||||||||
Balance at March 31, 2014
|
|
$
|
7.6
|
|
|
$
|
(3.5
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
(51.5
|
)
|
|
$
|
1.6
|
|
|
$
|
0.3
|
|
|
$
|
(46.4
|
)
|
Other comprehensive income (loss) before reclassifications (1)
|
|
11.4
|
|
|
(2.0
|
)
|
|
0.1
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
9.1
|
|
|||||||
Amounts reclassified from AOCI
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|||||||
Net current-period other comprehensive income (loss)
|
|
11.4
|
|
|
(2.0
|
)
|
|
0.1
|
|
|
0.4
|
|
|
(0.8
|
)
|
|
—
|
|
|
9.1
|
|
|||||||
Balance at June 30, 2014
|
|
$
|
19.0
|
|
|
$
|
(5.5
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(51.1
|
)
|
|
$
|
0.8
|
|
|
$
|
0.3
|
|
|
$
|
(37.3
|
)
|
(1)
|
Other comprehensive income (loss) before reclassifications within the translation component excludes
$(0.1)
of translation attributable to noncontrolling interests.
|
|
|
Translation
|
|
Foreign Currency Hedges
|
|
Interest Rate Hedges
|
|
Pension and Other Post-retirement Benefits
|
|
Other
|
|
Accumulated Other Comprehensive (Loss) Income
|
||||||||||||
Balance at January 1, 2015
|
|
$
|
(74.9
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(114.0
|
)
|
|
$
|
0.3
|
|
|
$
|
(190.5
|
)
|
Other comprehensive (loss) income before reclassifications (1)
|
|
(62.4
|
)
|
|
3.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
(58.8
|
)
|
||||||
Amounts reclassified from AOCI
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
2.2
|
|
|
—
|
|
|
2.1
|
|
||||||
Net current-period other comprehensive (loss) income
|
|
(62.4
|
)
|
|
3.3
|
|
|
0.2
|
|
|
2.2
|
|
|
—
|
|
|
(56.7
|
)
|
||||||
Balance at June 30, 2015
|
|
$
|
(137.3
|
)
|
|
$
|
1.9
|
|
|
$
|
(0.3
|
)
|
|
$
|
(111.8
|
)
|
|
$
|
0.3
|
|
|
$
|
(247.2
|
)
|
(1)
|
Other comprehensive (loss) income before reclassifications within the translation component excludes
$0.3
of translation attributable to noncontrolling interests.
|
|
|
Translation
|
|
Foreign Currency Hedges
|
|
Interest Rate Hedges
|
|
Pension and Other Post-retirement Benefits
|
|
Unrealized Gain on Securities, Net
|
|
Other
|
|
Accumulated Other Comprehensive (Loss) Income
|
||||||||||||||
Balance at January 1, 2014
|
|
$
|
(2.4
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(52.0
|
)
|
|
$
|
2.7
|
|
|
$
|
0.3
|
|
|
$
|
(54.3
|
)
|
Other comprehensive income (loss) before reclassifications (1)
|
|
21.4
|
|
|
(3.6
|
)
|
|
0.3
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
16.6
|
|
|||||||
Amounts reclassified from AOCI
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.9
|
|
|
(0.4
|
)
|
|
—
|
|
|
0.4
|
|
|||||||
Net current-period other comprehensive income (loss)
|
|
21.4
|
|
|
(3.6
|
)
|
|
0.2
|
|
|
0.9
|
|
|
(1.9
|
)
|
|
—
|
|
|
17.0
|
|
|||||||
Balance at June 30, 2014
|
|
$
|
19.0
|
|
|
$
|
(5.5
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(51.1
|
)
|
|
$
|
0.8
|
|
|
$
|
0.3
|
|
|
$
|
(37.3
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
||||||||
|
|
Amount Reclassified from AOCI
|
|
Amount Reclassified from AOCI
|
|
Amount Reclassified from AOCI
|
|
Amount Reclassified from AOCI
|
|
Affected Line Item in the Statement of Income
|
||||||||
Interest rate hedges
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.1
|
)
|
|
Interest expense
|
Pension and post-retirement benefits:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss amortization (net of tax $(0.6), $(0.3), $(1.2) and $(0.6), respectively)
|
|
1.2
|
|
|
0.5
|
|
|
2.3
|
|
|
1.0
|
|
|
(1)
|
||||
Net prior service benefit amortization
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(1)
|
||||
|
|
1.1
|
|
|
0.4
|
|
|
2.2
|
|
|
0.9
|
|
|
|
||||
Unrealized loss on securities (net of tax $0.0, $0.2, $0.0 and $0.2, respectively)
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
Investment income
|
||||
Total reclassifications for the period
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
|
$
|
0.4
|
|
|
|
(1)
|
Pension and other post-retirement benefits AOCI components are included in the computation of net periodic benefit cost (refer to note 12).
|
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value (1)
|
|||||
|
|
(in millions)
|
|
(per share)
|
|
(in years)
|
|
|
|||||
Outstanding at January 1, 2015
|
|
1.6
|
|
|
$
|
37.11
|
|
|
|
|
|
||
Expired or forfeited
|
|
(0.3
|
)
|
|
$
|
50.81
|
|
|
|
|
|
||
Exercised
|
|
(0.1
|
)
|
|
$
|
31.09
|
|
|
|
|
|
||
Granted
|
|
0.5
|
|
|
$
|
32.33
|
|
|
|
|
|
||
Outstanding at June 30, 2015
|
|
1.7
|
|
|
$
|
34.09
|
|
|
7
|
|
$
|
3.5
|
|
Options exercisable at June 30, 2015
|
|
0.9
|
|
|
$
|
35.26
|
|
|
5
|
|
$
|
1.7
|
|
Options vested and expected to vest at June 30, 2015 (2)
|
|
1.7
|
|
|
$
|
34.13
|
|
|
7
|
|
$
|
3.4
|
|
(1)
|
The aggregate intrinsic value (the difference between the closing price of the Company’s common shares on the last trading day of the
second
quarter of
2015
and the exercise price, multiplied by the number of “in-the-money” options) that would have been received by the option holders had all option holders exercised their options on
June 30, 2015
. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common shares.
|
(2)
|
The options expected to vest are the result of applying the pre-vesting forfeiture rate assumption to total outstanding non-vested options.
|
|
|
Number of
Shares
|
|
Weighted-Average
Grant-Date Fair
Value
|
|||
|
|
(in millions)
|
|
(per share)
|
|||
RSUs:
|
|
|
|
|
|||
Non-vested at January 1, 2015
|
|
0.7
|
|
|
$
|
33.72
|
|
Forfeited
|
|
(0.1
|
)
|
|
$
|
34.09
|
|
Vested
|
|
(0.2
|
)
|
|
$
|
36.14
|
|
Granted
|
|
0.5
|
|
|
$
|
32.76
|
|
Non-vested at June 30, 2015
|
|
0.9
|
|
|
$
|
32.53
|
|
Performance Shares:
|
|
|
|
|
|||
Non-vested at January 1, 2015
|
|
1.1
|
|
|
$
|
37.38
|
|
Forfeited
|
|
(0.2
|
)
|
|
$
|
36.89
|
|
Vested
|
|
(0.3
|
)
|
|
$
|
40.04
|
|
Granted
|
|
0.6
|
|
|
$
|
31.16
|
|
Non-vested at June 30, 2015
|
|
1.2
|
|
|
$
|
33.76
|
|
|
|
Cost Basis
|
|
Unrealized Gain
|
|
Fair Value
|
||||||
As of June 30, 2015
|
|
|
|
|
|
|
||||||
Short-term investments
|
|
|
|
|
|
|
||||||
Certificates of deposit
|
|
$
|
119.5
|
|
|
$
|
—
|
|
|
$
|
119.5
|
|
Long-term investments
|
|
|
|
|
|
|
||||||
Assets held in a rabbi trust
|
|
$
|
9.0
|
|
|
$
|
0.6
|
|
|
$
|
9.6
|
|
|
|
|
|
|
|
|
||||||
As of December 31, 2014
|
|
|
|
|
|
|
||||||
Short-term investments
|
|
|
|
|
|
|
||||||
Certificates of deposit
|
|
$
|
136.7
|
|
|
$
|
—
|
|
|
$
|
136.7
|
|
Long-term investments
|
|
|
|
|
|
|
||||||
Assets held in a rabbi trust
|
|
$
|
9.3
|
|
|
$
|
0.5
|
|
|
$
|
9.8
|
|
|
||||||||||||
|
|
Finance
Leases
|
|
Notes
Receivable
|
|
Total
|
||||||
Allowance for credit losses
|
|
|
|
|
|
|
||||||
Balance at January 1, 2015
|
|
$
|
0.4
|
|
|
$
|
4.1
|
|
|
$
|
4.5
|
|
Provision for credit losses
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||
Write-offs
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Balance at June 30, 2015
|
|
$
|
0.6
|
|
|
$
|
4.1
|
|
|
$
|
4.7
|
|
|
|
|
|
|
|
|
||||||
Balance at January 1, 2014
|
|
$
|
0.4
|
|
|
$
|
4.1
|
|
|
$
|
4.5
|
|
Provision for credit losses
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Write-offs
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||
Balance at June 30, 2014
|
|
$
|
0.3
|
|
|
$
|
4.1
|
|
|
$
|
4.4
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
30-59 days past due
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
60-89 days past due
|
|
—
|
|
|
—
|
|
||
> 89 days past due (1)
|
|
2.3
|
|
|
1.5
|
|
||
Total past due
|
|
$
|
2.4
|
|
|
$
|
1.6
|
|
(1)
|
Past-due notes receivable balances greater than 89 days are fully reserved.
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Finished goods
|
|
$
|
186.5
|
|
|
$
|
197.4
|
|
Service parts
|
|
146.5
|
|
|
125.6
|
|
||
Raw materials and work in process
|
|
92.5
|
|
|
82.2
|
|
||
Total inventories
|
|
$
|
425.5
|
|
|
$
|
405.2
|
|
|
NA
|
|
AP
|
|
EMEA
|
|
LA
|
|
Total
|
||||||||||
Goodwill
|
$
|
112.1
|
|
|
$
|
41.3
|
|
|
$
|
168.7
|
|
|
$
|
148.5
|
|
|
$
|
470.6
|
|
Accumulated impairment losses
|
(13.2
|
)
|
|
—
|
|
|
(168.7
|
)
|
|
(108.8
|
)
|
|
(290.7
|
)
|
|||||
Balance at January 1, 2014
|
$
|
98.9
|
|
|
$
|
41.3
|
|
|
$
|
—
|
|
|
$
|
39.7
|
|
|
$
|
179.9
|
|
Divestiture
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|||||
Currency translation adjustment
|
(0.2
|
)
|
|
(1.3
|
)
|
|
—
|
|
|
(4.8
|
)
|
|
(6.3
|
)
|
|||||
Goodwill
|
$
|
110.3
|
|
|
$
|
40.0
|
|
|
$
|
168.7
|
|
|
$
|
143.7
|
|
|
$
|
462.7
|
|
Accumulated impairment losses
|
(13.2
|
)
|
|
—
|
|
|
(168.7
|
)
|
|
(108.8
|
)
|
|
(290.7
|
)
|
|||||
Balance at December 31, 2014
|
$
|
97.1
|
|
|
$
|
40.0
|
|
|
$
|
—
|
|
|
$
|
34.9
|
|
|
$
|
172.0
|
|
Goodwill acquired
|
40.2
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
41.2
|
|
|||||
Currency translation adjustment
|
0.5
|
|
|
(1.0
|
)
|
|
—
|
|
|
(4.6
|
)
|
|
(5.1
|
)
|
|||||
Goodwill
|
151.0
|
|
|
39.5
|
|
|
168.7
|
|
|
139.6
|
|
|
498.8
|
|
|||||
Accumulated impairment losses
|
(13.2
|
)
|
|
—
|
|
|
(168.7
|
)
|
|
(108.8
|
)
|
|
(290.7
|
)
|
|||||
Balance at June 30, 2015
|
$
|
137.8
|
|
|
$
|
39.5
|
|
|
$
|
—
|
|
|
$
|
30.8
|
|
|
$
|
208.1
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Internally-developed
software
|
$
|
76.5
|
|
|
$
|
(50.3
|
)
|
|
$
|
26.2
|
|
|
$
|
102.1
|
|
|
$
|
(65.8
|
)
|
|
$
|
36.3
|
|
Other intangibles
|
76.2
|
|
|
(29.4
|
)
|
|
46.8
|
|
|
52.2
|
|
|
(28.5
|
)
|
|
23.7
|
|
||||||
Total
|
$
|
152.7
|
|
|
$
|
(79.7
|
)
|
|
$
|
73.0
|
|
|
$
|
154.3
|
|
|
$
|
(94.3
|
)
|
|
$
|
60.0
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Notes payable
|
|
|
|
|
||||
Uncommitted lines of credit
|
|
$
|
22.8
|
|
|
$
|
24.8
|
|
Term loan
|
|
11.5
|
|
|
—
|
|
||
Other
|
|
0.8
|
|
|
0.8
|
|
||
|
|
$
|
35.1
|
|
|
$
|
25.6
|
|
Long-term debt
|
|
|
|
|
||||
Revolving credit facility
|
|
$
|
177.0
|
|
|
$
|
240.0
|
|
Senior notes
|
|
225.0
|
|
|
225.0
|
|
||
Term loan
|
|
218.5
|
|
|
—
|
|
||
Industrial development revenue bonds
|
|
11.9
|
|
|
11.9
|
|
||
Other
|
|
2.4
|
|
|
2.9
|
|
||
|
|
$
|
634.8
|
|
|
$
|
479.8
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
0.9
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
|
6.0
|
|
|
5.8
|
|
|
0.2
|
|
|
0.1
|
|
||||
Expected return on plan assets
|
|
(6.8
|
)
|
|
(6.5
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service benefit
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
||||
Recognized net actuarial loss
|
|
1.6
|
|
|
0.7
|
|
|
0.1
|
|
|
—
|
|
||||
Net periodic pension benefit cost
|
|
$
|
1.7
|
|
|
$
|
0.7
|
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
1.8
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
|
11.9
|
|
|
11.5
|
|
|
0.3
|
|
|
0.3
|
|
||||
Expected return on plan assets
|
|
(13.5
|
)
|
|
(12.9
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service benefit
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Recognized net actuarial loss
|
|
3.3
|
|
|
1.5
|
|
|
0.2
|
|
|
0.1
|
|
||||
Net periodic pension benefit cost
|
|
$
|
3.5
|
|
|
$
|
1.5
|
|
|
$
|
0.4
|
|
|
$
|
0.3
|
|
|
|
2015
|
|
2014
|
||||
Balance at January 1
|
|
$
|
113.3
|
|
|
$
|
83.2
|
|
Current period accruals
|
|
18.7
|
|
|
33.3
|
|
||
Current period settlements
|
|
(24.7
|
)
|
|
(25.2
|
)
|
||
Currency translation adjustment
|
|
(11.9
|
)
|
|
2.7
|
|
||
Balance at June 30
|
|
$
|
95.4
|
|
|
$
|
94.0
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Interest expense
|
|
$
|
(0.8
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
(3.0
|
)
|
Foreign exchange (loss) gain, net
|
|
(2.1
|
)
|
|
0.4
|
|
|
2.9
|
|
|
1.6
|
|
||||
|
|
$
|
(2.9
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
0.8
|
|
|
$
|
(1.4
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Cost of sales – services
|
|
$
|
1.2
|
|
|
$
|
0.1
|
|
|
$
|
1.2
|
|
|
$
|
0.8
|
|
Cost of sales – products
|
|
1.3
|
|
|
0.1
|
|
|
1.3
|
|
|
0.1
|
|
||||
Selling and administrative expense
|
|
4.7
|
|
|
0.5
|
|
|
7.2
|
|
|
4.9
|
|
||||
Research, development and engineering expense
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
||||
Total
|
|
$
|
7.2
|
|
|
$
|
0.7
|
|
|
$
|
10.3
|
|
|
$
|
5.8
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Severance
|
|
|
|
|
|
|
|
|
||||||||
North America (NA)
|
|
$
|
3.2
|
|
|
$
|
0.6
|
|
|
$
|
4.7
|
|
|
$
|
2.7
|
|
Asia Pacific (AP)
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
0.3
|
|
||||
Europe, Middle East and Africa (EMEA)
|
|
2.1
|
|
|
0.1
|
|
|
3.0
|
|
|
0.7
|
|
||||
Latin America (LA)
|
|
1.7
|
|
|
—
|
|
|
2.4
|
|
|
2.1
|
|
||||
Total severance
|
|
$
|
7.2
|
|
|
$
|
0.7
|
|
|
$
|
10.3
|
|
|
$
|
5.8
|
|
|
Severance
|
|
Other
|
|
Total
|
||||||
Cumulative total restructuring costs for the multi-year transformation plan
|
|
|
|
|
|
||||||
NA
|
$
|
66.6
|
|
|
$
|
2.0
|
|
|
$
|
68.6
|
|
AP
|
2.8
|
|
|
0.6
|
|
|
3.4
|
|
|||
EMEA
|
4.7
|
|
|
0.9
|
|
|
5.6
|
|
|||
LA
|
16.8
|
|
|
—
|
|
|
16.8
|
|
|||
Total
|
$
|
90.9
|
|
|
$
|
3.5
|
|
|
$
|
94.4
|
|
|
|
2015
|
|
2014
|
||||
Balance at January 1
|
|
$
|
7.8
|
|
|
$
|
35.3
|
|
Liabilities incurred
|
|
10.3
|
|
|
5.8
|
|
||
Liabilities paid/settled
|
|
(10.4
|
)
|
|
(33.1
|
)
|
||
Balance at June 30
|
|
$
|
7.7
|
|
|
$
|
8.0
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
|
|
|
Fair Value Measurements Using
|
|
|
|
Fair Value Measurements Using
|
||||||||||||||||
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Short-term investments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Certificates of deposit
|
|
$
|
119.5
|
|
|
$
|
119.5
|
|
|
$
|
—
|
|
|
$
|
136.7
|
|
|
$
|
136.7
|
|
|
$
|
—
|
|
Assets held in rabbi trusts
|
|
9.6
|
|
|
9.6
|
|
|
—
|
|
|
9.8
|
|
|
9.8
|
|
|
—
|
|
||||||
Foreign exchange forward contracts
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|
2.9
|
|
|
—
|
|
|
2.9
|
|
||||||
Total
|
|
$
|
130.7
|
|
|
$
|
129.1
|
|
|
$
|
1.6
|
|
|
$
|
149.4
|
|
|
$
|
146.5
|
|
|
$
|
2.9
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred compensation
|
|
$
|
9.6
|
|
|
$
|
9.6
|
|
|
$
|
—
|
|
|
$
|
9.8
|
|
|
$
|
9.8
|
|
|
$
|
—
|
|
Foreign exchange forward contracts
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
||||||
Interest rate swaps
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
||||||
Total
|
|
$
|
10.6
|
|
|
$
|
9.6
|
|
|
$
|
1.0
|
|
|
$
|
12.0
|
|
|
$
|
9.8
|
|
|
$
|
2.2
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
|
Fair Value
|
|
Carrying
Value
|
|
Fair Value
|
|
Carrying
Value
|
||||||||
Notes payable
|
|
$
|
35.1
|
|
|
$
|
35.1
|
|
|
$
|
25.6
|
|
|
$
|
25.6
|
|
Long-term debt
|
|
637.7
|
|
|
634.8
|
|
|
483.6
|
|
|
479.8
|
|
||||
Total debt instruments
|
|
$
|
672.8
|
|
|
$
|
669.9
|
|
|
$
|
509.2
|
|
|
$
|
505.4
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenue summary by segment
|
|
|
|
|
|
|
|
|
||||||||
NA
|
|
$
|
391.4
|
|
|
$
|
346.0
|
|
|
$
|
731.3
|
|
|
$
|
663.5
|
|
AP
|
|
109.4
|
|
|
119.4
|
|
|
219.9
|
|
|
226.5
|
|
||||
EMEA
|
|
106.1
|
|
|
118.4
|
|
|
192.9
|
|
|
202.5
|
|
||||
LA
|
|
126.5
|
|
|
149.7
|
|
|
244.8
|
|
|
329.3
|
|
||||
Total revenue
|
|
$
|
733.4
|
|
|
$
|
733.5
|
|
|
$
|
1,388.9
|
|
|
$
|
1,421.8
|
|
|
|
|
|
|
|
|
|
|
||||||||
Intersegment revenue
|
|
|
|
|
|
|
|
|
||||||||
NA
|
|
$
|
23.8
|
|
|
$
|
18.2
|
|
|
$
|
44.9
|
|
|
$
|
34.1
|
|
AP
|
|
40.3
|
|
|
23.4
|
|
|
59.7
|
|
|
47.3
|
|
||||
EMEA
|
|
24.1
|
|
|
12.8
|
|
|
35.2
|
|
|
19.8
|
|
||||
LA
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
||||
Total intersegment revenue
|
|
$
|
88.3
|
|
|
$
|
54.5
|
|
|
$
|
140.0
|
|
|
$
|
101.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Segment operating profit
|
|
|
|
|
|
|
|
|
||||||||
NA
|
|
$
|
73.7
|
|
|
$
|
72.1
|
|
|
$
|
141.4
|
|
|
$
|
131.5
|
|
AP
|
|
14.3
|
|
|
13.3
|
|
|
32.5
|
|
|
30.1
|
|
||||
EMEA
|
|
14.1
|
|
|
22.0
|
|
|
26.5
|
|
|
33.2
|
|
||||
LA
|
|
13.2
|
|
|
8.7
|
|
|
16.3
|
|
|
20.2
|
|
||||
Total segment operating profit
|
|
$
|
115.3
|
|
|
$
|
116.1
|
|
|
$
|
216.7
|
|
|
$
|
215.0
|
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate charges not allocated to segments (1)
|
|
(72.5
|
)
|
|
(70.4
|
)
|
|
(143.2
|
)
|
|
(139.8
|
)
|
||||
Asset impairment charges
|
|
0.5
|
|
|
—
|
|
|
(18.9
|
)
|
|
—
|
|
||||
Restructuring charges
|
|
(7.2
|
)
|
|
(0.7
|
)
|
|
(10.3
|
)
|
|
(5.8
|
)
|
||||
Net non-routine (expense) income
|
|
(5.4
|
)
|
|
12.2
|
|
|
(10.0
|
)
|
|
11.1
|
|
||||
|
|
(84.6
|
)
|
|
(58.9
|
)
|
|
(182.4
|
)
|
|
(134.5
|
)
|
||||
Operating profit
|
|
$
|
30.7
|
|
|
$
|
57.2
|
|
|
$
|
34.3
|
|
|
$
|
80.5
|
|
Other (expense) income
|
|
(1.2
|
)
|
|
4.0
|
|
|
(11.8
|
)
|
|
(7.6
|
)
|
||||
Income before taxes
|
|
$
|
29.5
|
|
|
$
|
61.2
|
|
|
$
|
22.5
|
|
|
$
|
72.9
|
|
(1)
|
Corporate charges not allocated to segments include headquarter-based costs associated with manufacturing administration, procurement, human resources, finance and accounting, global development/engineering, global strategy/mergers and acquisitions, global information technology, tax, treasury and legal.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Segment depreciation and amortization expense
|
|
|
|
|
|
|
|
|
||||||||
NA
|
|
$
|
2.2
|
|
|
$
|
2.7
|
|
|
$
|
4.2
|
|
|
$
|
5.1
|
|
AP
|
|
1.8
|
|
|
1.9
|
|
|
3.4
|
|
|
3.8
|
|
||||
EMEA
|
|
0.8
|
|
|
0.9
|
|
|
1.6
|
|
|
2.1
|
|
||||
LA
|
|
1.0
|
|
|
3.4
|
|
|
3.9
|
|
|
5.4
|
|
||||
Total segment depreciation and amortization expense
|
|
5.8
|
|
|
8.9
|
|
|
13.1
|
|
|
16.4
|
|
||||
Corporate depreciation and amortization expense
|
|
11.0
|
|
|
10.1
|
|
|
20.1
|
|
|
20.3
|
|
||||
Total depreciation and amortization expense
|
|
$
|
16.8
|
|
|
$
|
19.0
|
|
|
$
|
33.2
|
|
|
$
|
36.7
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Segment property, plant and equipment, at cost
|
|
|
|
|
||||
NA
|
|
$
|
122.8
|
|
|
$
|
128.8
|
|
AP
|
|
50.5
|
|
|
46.9
|
|
||
EMEA
|
|
35.3
|
|
|
38.2
|
|
||
LA
|
|
63.1
|
|
|
78.7
|
|
||
Total segment property, plant and equipment, at cost
|
|
$
|
271.7
|
|
|
$
|
292.6
|
|
Corporate property plant and equipment, at cost, not allocated to segments
|
|
343.1
|
|
|
320.3
|
|
||
Total property, plant and equipment, at cost
|
|
$
|
614.8
|
|
|
$
|
612.9
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Financial self-service
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
$
|
299.2
|
|
|
$
|
306.1
|
|
|
$
|
590.6
|
|
|
$
|
591.1
|
|
Products
|
|
268.9
|
|
|
236.8
|
|
|
472.7
|
|
|
418.3
|
|
||||
Total financial self-service
|
|
568.1
|
|
|
542.9
|
|
|
1,063.3
|
|
|
1,009.4
|
|
||||
Security
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
110.9
|
|
|
103.7
|
|
|
213.5
|
|
|
202.1
|
|
||||
Products
|
|
52.7
|
|
|
49.4
|
|
|
100.1
|
|
|
93.4
|
|
||||
Total security
|
|
163.6
|
|
|
153.1
|
|
|
313.6
|
|
|
295.5
|
|
||||
Total financial self-service and security
|
|
731.7
|
|
|
696.0
|
|
|
1,376.9
|
|
|
1,304.9
|
|
||||
Brazil other
|
|
1.7
|
|
|
37.5
|
|
|
12.0
|
|
|
116.9
|
|
||||
|
|
$
|
733.4
|
|
|
$
|
733.5
|
|
|
$
|
1,388.9
|
|
|
$
|
1,421.8
|
|
•
|
Streamline its cost structure and improve its near-term delivery and execution.
|
•
|
Generate increased free cash flow in order to fund the investments necessary to drive profitable growth, while preserving the ability to return value to shareholders in the form of reliable dividends and, as appropriate, share repurchases.
|
•
|
Attract and retain the talent necessary to drive innovation and the focused execution of the transformation strategy.
|
•
|
Return the Company to a sustainable, profitable growth trajectory.
|
•
|
demand for services and software, including managed services and professional services;
|
•
|
timing of self-service equipment upgrades and/or replacement cycles;
|
•
|
demand for products and solutions related to bank branch automation opportunities;
|
•
|
demand for security products and services for the financial and commercial sectors; and
|
•
|
high levels of deployment growth for new self-service products in emerging markets.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||||
|
|
Dollars
|
|
% of
Net sales
|
|
Dollars
|
|
% of
Net sales
|
|
Dollars
|
|
% of
Net sales
|
|
Dollars
|
|
% of
Net sales
|
||||||||||
Net sales
|
|
$
|
733.4
|
|
|
100.0
|
|
$
|
733.5
|
|
|
100.0
|
|
$
|
1,388.9
|
|
|
100.0
|
|
|
$
|
1,421.8
|
|
|
100.0
|
|
Gross profit
|
|
$
|
187.5
|
|
|
25.6
|
|
$
|
186.8
|
|
|
25.5
|
|
$
|
362.8
|
|
|
26.1
|
|
|
$
|
350.9
|
|
|
24.7
|
|
Operating expenses
|
|
$
|
156.8
|
|
|
21.4
|
|
$
|
129.6
|
|
|
17.7
|
|
$
|
328.5
|
|
|
23.7
|
|
|
$
|
270.4
|
|
|
19.0
|
|
Operating profit
|
|
$
|
30.7
|
|
|
4.2
|
|
$
|
57.2
|
|
|
7.8
|
|
$
|
34.3
|
|
|
2.5
|
|
|
$
|
80.5
|
|
|
5.7
|
|
Net income
|
|
$
|
23.9
|
|
|
3.3
|
|
$
|
43.1
|
|
|
5.9
|
|
$
|
18.3
|
|
|
1.3
|
|
|
$
|
48.0
|
|
|
3.4
|
|
Net income (loss) attributable to noncontrolling interests
|
|
$
|
1.7
|
|
|
0.2
|
|
$
|
1.5
|
|
|
0.2
|
|
$
|
(1.1
|
)
|
|
(0.1
|
)
|
|
$
|
(3.4
|
)
|
|
(0.2
|
)
|
Net income attributable to Diebold, Incorporated
|
|
$
|
22.2
|
|
|
3.0
|
|
$
|
41.6
|
|
|
5.7
|
|
$
|
19.4
|
|
|
1.4
|
|
|
$
|
51.4
|
|
|
3.6
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||
|
|
2015
|
|
2014
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Financial self-service
|
|
$
|
568.1
|
|
|
$
|
542.9
|
|
|
4.6
|
|
|
$
|
1,063.3
|
|
|
$
|
1,009.4
|
|
|
5.3
|
|
Security
|
|
163.6
|
|
|
153.1
|
|
|
6.9
|
|
|
313.6
|
|
|
295.5
|
|
|
6.1
|
|
||||
Brazil other
|
|
1.7
|
|
|
37.5
|
|
|
(95.5
|
)
|
|
12.0
|
|
|
116.9
|
|
|
(89.7
|
)
|
||||
Total revenue
|
|
$
|
733.4
|
|
|
$
|
733.5
|
|
|
—
|
|
|
$
|
1,388.9
|
|
|
$
|
1,421.8
|
|
|
(2.3
|
)
|
•
|
NA FSS sales in the three- and six-month periods increased $36.0 and $52.0 or 17.1 and 13.0 percent, respectively, primarily due to higher volume in Canada from a large deposit automation upgrade project that began in the third quarter of 2014. The six months ended June 30, 2015 also benefited from a product revenue improvement between years in the U.S. regional bank space, partially offset by lower product volume within the U.S. national bank business.
|
•
|
Asia Pacific (AP) FSS sales in the three- and six-month periods decreased $11.5 and $9.1 or 9.9 and 4.1 percent, respectively. The decreases in both time periods mainly related to a decline in product revenue stemming from lower volume primarily in China, where the government is encouraging banks to increase their use of domestic ATM suppliers, partially offset by service revenue growth across all countries in the region due in part to higher professional service volume.
|
•
|
EMEA FSS sales in the three- and six-month periods decreased $12.1 and $9.5 or 10.3 and 4.7 percent, respectively. Unfavorable currency impact of $19.7 and $34.0 adversely impacted the three- and six-month periods, respectively, coupled with a revenue decline in Western Europe, partially offset by higher volume in the Middle East. The benefit of
|
•
|
LA FSS sales in the three- and six-month periods increased $12.8 and $20.5 or 13.0 and 11.0 percent, respectively. Both time periods increased from higher product revenue in several countries, resulting in part from customers replacing their existing install base. Conversely, the three- and six-month periods were adversely influenced by unfavorable currency impact of $17.7 and $25.2 in Brazil, respectively, and the six months ended June 30, 2015 was negatively impacted by lower service revenue in Venezuela as a result of the currency devaluation in the first quarter of 2015 and the subsequent sale of the Company’s equity interest in the joint venture.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||
|
|
2015
|
|
2014
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Gross profit - services
|
|
$
|
129.3
|
|
|
$
|
126.2
|
|
|
2.5
|
|
|
$
|
250.4
|
|
|
$
|
234.3
|
|
|
6.9
|
|
Gross profit - products
|
|
58.2
|
|
|
60.6
|
|
|
(4.0
|
)
|
|
112.4
|
|
|
116.6
|
|
|
(3.6
|
)
|
||||
Total gross profit
|
|
$
|
187.5
|
|
|
$
|
186.8
|
|
|
0.4
|
|
|
$
|
362.8
|
|
|
$
|
350.9
|
|
|
3.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross margin – services
|
|
31.5
|
%
|
|
30.8
|
%
|
|
|
|
31.1
|
%
|
|
29.5
|
%
|
|
|
||||||
Gross margin – products
|
|
18.0
|
%
|
|
18.7
|
%
|
|
|
|
19.2
|
%
|
|
18.5
|
%
|
|
|
||||||
Total gross margin
|
|
25.6
|
%
|
|
25.5
|
%
|
|
|
|
26.1
|
%
|
|
24.7
|
%
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||
|
|
2015
|
|
2014
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||
Selling and administrative expense
|
|
$
|
135.0
|
|
|
$
|
121.0
|
|
|
11.6
|
|
$
|
264.9
|
|
|
$
|
241.3
|
|
|
9.8
|
Research, development and engineering expense
|
|
23.9
|
|
|
21.7
|
|
|
10.1
|
|
46.2
|
|
|
41.7
|
|
|
10.8
|
||||
Impairment of assets
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
18.9
|
|
|
—
|
|
|
—
|
||||
Gain on sale of assets, net
|
|
(1.6
|
)
|
|
(13.1
|
)
|
|
87.8
|
|
(1.5
|
)
|
|
(12.6
|
)
|
|
88.1
|
||||
Total operating expenses
|
|
$
|
156.8
|
|
|
$
|
129.6
|
|
|
21.0
|
|
$
|
328.5
|
|
|
$
|
270.4
|
|
|
21.5
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||
|
|
2015
|
|
2014
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Operating profit
|
|
$
|
30.7
|
|
|
$
|
57.2
|
|
|
(46.3
|
)
|
|
$
|
34.3
|
|
|
$
|
80.5
|
|
|
(57.4
|
)
|
Operating profit margin
|
|
4.2
|
%
|
|
7.8
|
%
|
|
|
|
2.5
|
%
|
|
5.7
|
%
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||
|
|
2015
|
|
2014
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Investment income
|
|
$
|
6.8
|
|
|
$
|
10.0
|
|
|
(32.0
|
)
|
|
$
|
14.7
|
|
|
$
|
18.7
|
|
|
(21.4
|
)
|
Interest expense
|
|
(7.6
|
)
|
|
(7.9
|
)
|
|
3.8
|
|
|
(15.6
|
)
|
|
(14.8
|
)
|
|
(5.4
|
)
|
||||
Foreign exchange (loss) gain, net
|
|
(1.2
|
)
|
|
0.6
|
|
|
—
|
|
|
(10.5
|
)
|
|
(11.4
|
)
|
|
7.9
|
|
||||
Miscellaneous, net
|
|
0.8
|
|
|
1.3
|
|
|
(38.5
|
)
|
|
(0.4
|
)
|
|
(0.1
|
)
|
|
—
|
|
||||
Other (expense) income, net
|
|
$
|
(1.2
|
)
|
|
$
|
4.0
|
|
|
—
|
|
|
$
|
(11.8
|
)
|
|
$
|
(7.6
|
)
|
|
(55.3
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||
|
|
2015
|
|
2014
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Net income
|
|
$
|
23.9
|
|
|
$
|
43.1
|
|
|
(44.5
|
)
|
|
$
|
18.3
|
|
|
$
|
48.0
|
|
|
(61.9
|
)
|
Percent of net sales
|
|
3.3
|
%
|
|
5.9
|
%
|
|
|
|
1.3
|
%
|
|
3.4
|
%
|
|
|
||||||
Effective tax rate
|
|
19.0
|
%
|
|
29.6
|
%
|
|
|
|
18.7
|
%
|
|
34.2
|
%
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||
Asia Pacific
|
|
2015
|
|
2014
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Revenue
|
|
$
|
109.4
|
|
|
$
|
119.4
|
|
|
(8.4
|
)
|
|
$
|
219.9
|
|
|
$
|
226.5
|
|
|
(2.9
|
)
|
Segment operating profit
|
|
$
|
14.3
|
|
|
$
|
13.3
|
|
|
7.5
|
|
|
$
|
32.5
|
|
|
$
|
30.1
|
|
|
8.0
|
|
Segment operating profit margin
|
|
13.1
|
%
|
|
11.1
|
%
|
|
|
|
14.8
|
%
|
|
13.3
|
%
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||
Europe, Middle East and Africa
|
|
2015
|
|
2014
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Revenue
|
|
$
|
106.1
|
|
|
$
|
118.4
|
|
|
(10.4
|
)
|
|
$
|
192.9
|
|
|
$
|
202.5
|
|
|
(4.7
|
)
|
Segment operating profit
|
|
$
|
14.1
|
|
|
$
|
22.0
|
|
|
(35.9
|
)
|
|
$
|
26.5
|
|
|
$
|
33.2
|
|
|
(20.2
|
)
|
Segment operating profit margin
|
|
13.3
|
%
|
|
18.6
|
%
|
|
|
|
13.7
|
%
|
|
16.4
|
%
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||
Latin America
|
|
2015
|
|
2014
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Revenue
|
|
$
|
126.5
|
|
|
$
|
149.7
|
|
|
(15.5
|
)
|
|
$
|
244.8
|
|
|
$
|
329.3
|
|
|
(25.7
|
)
|
Segment operating profit
|
|
$
|
13.2
|
|
|
$
|
8.7
|
|
|
51.7
|
|
|
$
|
16.3
|
|
|
$
|
20.2
|
|
|
(19.3
|
)
|
Segment operating profit margin
|
|
10.4
|
%
|
|
5.8
|
%
|
|
|
|
6.7
|
%
|
|
6.1
|
%
|
|
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Cash and cash equivalents
|
|
$
|
244.4
|
|
|
$
|
322.0
|
|
Additional cash availability from
|
|
|
|
|
||||
Short-term uncommitted lines of credit
|
|
97.0
|
|
|
115.2
|
|
||
Revolving credit facility
|
|
343.0
|
|
|
280.0
|
|
||
Short-term investments
|
|
119.5
|
|
|
136.7
|
|
||
Total cash and cash availability
|
|
$
|
803.9
|
|
|
$
|
853.9
|
|
Net cash flow (used in) provided by:
|
|
2015
|
|
2014
|
||||
Operating activities
|
|
$
|
(99.2
|
)
|
|
$
|
(91.8
|
)
|
Investing activities
|
|
(83.2
|
)
|
|
92.3
|
|
||
Financing activities
|
|
122.6
|
|
|
2.8
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(17.8
|
)
|
|
(11.1
|
)
|
||
Net decrease in cash and cash equivalents
|
|
$
|
(77.6
|
)
|
|
$
|
(7.8
|
)
|
•
|
competitive pressures, including pricing pressures and technological developments;
|
•
|
changes in the Company's relationships with customers, suppliers, distributors and/or partners in its business ventures;
|
•
|
changes in political, economic or other factors such as currency exchange rates, inflation rates, recessionary or expansive trends, taxes and regulations and laws affecting the worldwide business in each of the Company's operations;
|
•
|
global economic conditions, including any additional deterioration and disruptions in the financial markets, including bankruptcies, restructurings or consolidations of financial institutions, which could reduce our customer base and/or adversely affect our customers’ ability to make capital expenditures, as well as adversely impact the availability and cost of credit;
|
•
|
acceptance of the Company's product and technology introductions in the marketplace;
|
•
|
the Company’s ability to maintain effective internal controls;
|
•
|
changes in the Company’s intention to further repatriate cash and cash equivalents and short-term investments residing in international tax jurisdictions could negatively impact foreign and domestic taxes;
|
•
|
unanticipated litigation, claims or assessments, as well as the outcome/impact of any current/pending litigation, claims or assessments, including but not limited to, the Company's Brazil tax dispute;
|
•
|
variations in consumer demand for FSS technologies, products and services;
|
•
|
potential security violations to the Company's information technology systems;
|
•
|
the investment performance of the Company’s pension plan assets, which could require the Company to increase its pension contributions, and significant changes in healthcare costs, including those that may result from government action;
|
•
|
the amount and timing of repurchases of the Company’s common shares, if any; and
|
•
|
the Company's ability to achieve benefits from its cost-reduction initiatives and other strategic changes, including its multi-year transformation plan and other restructuring actions, as well as its business process outsourcing initiative.
|
Period
|
|
Total Number of
Shares
Purchased (1)
|
|
Average Price
Paid Per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans (2)
|
|
Maximum Number
of Shares that
May Yet Be
Purchased Under
the Plans (2)
|
|||||
April
|
|
435
|
|
|
$
|
35.45
|
|
|
—
|
|
|
2,426,177
|
|
May
|
|
5,530
|
|
|
$
|
33.26
|
|
|
—
|
|
|
2,426,177
|
|
June
|
|
1,261
|
|
|
$
|
33.53
|
|
|
—
|
|
|
2,426,177
|
|
Total
|
|
7,226
|
|
|
$
|
33.44
|
|
|
—
|
|
|
|
(1)
|
All shares were surrendered or deemed surrendered to the Company in connection with the Company’s share-based compensation plans.
|
(2)
|
The total number of shares repurchased as part of the publicly announced share repurchase plan since its inception was
13,450,772
as of
June 30, 2015
. The plan was approved by the Board of Directors in 1997. The Company may purchase shares from time to time in open market purchases or privately negotiated transactions. The Company may make all or part of the purchases pursuant to accelerated share repurchases or Rule 10b5-1 plans. The plan has no expiration date. The following table provides a summary of Board of Directors approvals to repurchase the Company’s outstanding common shares:
|
|
Total Number of Shares
Approved for Repurchase
|
|
1997
|
2,000,000
|
|
2004
|
2,000,000
|
|
2005
|
6,000,000
|
|
2007
|
2,000,000
|
|
2011
|
1,876,949
|
|
2012
|
2,000,000
|
|
|
15,876,949
|
|
•
|
A Change in Control definition that is the same as the Change in Control definition in the Company’s shareholder-approved Amended and Restated 1991 Equity and Performance Incentive Plan, its equity award agreements, and the Amended and Restated Executive Employment Agreement with its Chief Executive Officer, discussed below;
|
•
|
A lump sum payment equal to two times base salary and target cash bonus;
|
•
|
Two years of continued participation in the Company’s health and welfare benefit plans;
|
•
|
A lump sum payment in an amount equal to the additional benefits the executive would have accrued under each qualified or nonqualified pension, profit sharing, deferred compensation or supplemental plan for one additional year of service, provided the executive was fully vested prior to termination;
|
•
|
A one-year post-termination noncompete and nonsolicit period;
|
•
|
An initial term of two years (through July 24, 2017), with automatic one-year extensions each January unless either party provides three months’ notice that the agreement should not extend;
|
•
|
An automatic three-year extension following a Change in Control; and
|
•
|
A “best results” provision in connection with any excise taxes imposed following a termination.
|
•
|
A two-year term (through July 24, 2017), with automatic one-year renewals unless either party provides at least six months’ notice that that agreement should not renew;
|
•
|
“Termination without Cause” benefits if the Company does not renew the Mattes Agreement and Mr. Mattes’ employment does not continue;
|
•
|
An extension of the exercise period for stock options and stock appreciation rights following termination from three months to twelve months, consistent with the Senior Leadership Severance Plan amendment discussed below;
|
•
|
Payment of reasonable attorney’s fees in connection with the review of the Mattes Agreement; and
|
•
|
A “best results” provision in connection with any excise taxes imposed following a termination, consistent with the Employee Agreements discussed above.
|
3.1(i)
|
|
Amended and Restated Articles of Incorporation of Diebold, Incorporated – incorporated by reference to Exhibit 3.1(i) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 1994 (Commission File No. 1-4879)
|
|
|
|
3.1(ii)
|
|
Amended and Restated Code of Regulations – incorporated by reference to Exhibit 3.1(ii) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (Commission File No. 1-4879)
|
|
|
|
3.2
|
|
Certificate of Amendment by Shareholders to Amended Articles of Incorporation of Diebold, Incorporated – incorporated by reference to Exhibit 3.2 to Registrant’s Form 10-Q for the quarter ended March 31, 1996 (Commission File No. 1-4879)
|
|
|
|
3.3
|
|
Certificate of Amendment to Amended Articles of Incorporation of Diebold, Incorporated – incorporated by reference to Exhibit 3.3 to Registrant’s Form 10-K for the year ended December 31, 1998 (Commission File No. 1-4879)
|
|
|
|
10.1
|
|
Form of Employee Agreement
|
|
|
|
10.2
|
|
Amended and Restated Executive Employment Agreement, dated as of July 30, 2015, by and between Diebold, Incorporated and Andreas W. Mattes
|
|
|
|
10.3
|
|
Amended and Restated Senior Leadership Severance Plan
|
|
|
|
10.4
|
|
First Amendment to Deferred Compensation Plan
|
|
|
|
10.5
|
|
Deferred Compensation Plan No. 2 for Directors of Diebold, Incorporated - incorporated by reference to Exhibit 10.7(iv) to Registrant’s Form 10-K for the year ended December 31, 2008 (Commission File No. 1-4879)
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
DIEBOLD, INCORPORATED
|
|
|
|
|
|
|
|
|
Date: July 30, 2015
|
|
By:
|
/s/ Andreas W. Mattes
|
|
|
|
Andreas W. Mattes
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date: July 30, 2015
|
|
By:
|
/s/ Christopher A. Chapman
|
|
|
|
Christopher A. Chapman
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
EXHIBIT NO.
|
|
DOCUMENT DESCRIPTION
|
3.1(i)
|
|
Amended and Restated Articles of Incorporation of Diebold, Incorporated – incorporated by reference to Exhibit 3.1(i) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 1994 (Commission File No. 1-4879)
|
|
|
|
3.1(ii)
|
|
Amended and Restated Code of Regulations – incorporated by reference to Exhibit 3.1(ii) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (Commission File No. 1-4879)
|
|
|
|
3.2
|
|
Certificate of Amendment by Shareholders to Amended Articles of Incorporation of Diebold, Incorporated – incorporated by reference to Exhibit 3.2 to Registrant’s Form 10-Q for the quarter ended March 31, 1996 (Commission File No. 1-4879)
|
|
|
|
3.3
|
|
Certificate of Amendment to Amended Articles of Incorporation of Diebold, Incorporated – incorporated by reference to Exhibit 3.3 to Registrant’s Form 10-K for the year ended December 31, 1998 (Commission File No. 1-4879)
|
|
|
|
10.1
|
|
Form of Employee Agreement
|
|
|
|
10.2
|
|
Amended and Restated Executive Employment Agreement, dated as of July 30, 2015, by and between Diebold, Incorporated and Andreas W. Mattes
|
|
|
|
10.3
|
|
Amended and Restated Senior Leadership Severance Plan
|
|
|
|
10.4
|
|
First Amendment to Deferred Compensation Plan
|
|
|
|
10.5
|
|
Deferred Compensation Plan No. 2 for Directors of Diebold, Incorporated - incorporated by reference to Exhibit 10.7(iv) to Registrant’s Form 10-K for the year ended December 31, 2008 (Commission File No. 1-4879)
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
1.
|
Certain Definitions
. For the purposes of this Agreement, the following terms shall have the respective meanings set forth below:
|
(a)
|
“
Board
” means the board of directors of the Company.
|
(b)
|
“
Cause
” means that, prior to any termination pursuant to Section 5(b) hereof for “Cause”, the Employee shall have committed:
|
(1)
|
an intentional act of fraud, embezzlement or theft in connection with his or her duties or in the course of his or her employment with the Company or any Subsidiary;
|
(2)
|
intentional wrongful damage to property of the Company or any Subsidiary;
|
(3)
|
intentional wrongful disclosure of secret processes or confidential information of the Company or any Subsidiary; or
|
(4)
|
intentional wrongful engagement in any competitive activity which would constitute a material breach of the duty of loyalty (“
Competitive Activity
”);
|
(c)
|
“
Change in Control
” means the occurrence of any of the following during the Term:
|
(1)
|
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 thirty percent (30%) or more of either: (A) the then-outstanding shares of common stock of the Company (the “
Company Common Stock
”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (“
Voting Stock
”);
provided
,
however
, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (iv) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (3) below; or
|
(2)
|
individuals who, as of the date hereof, constitute the Board (as modified by this subsection (2), the “
Incumbent 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 Company’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 Company 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 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
|
(3)
|
consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (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 Company Common Stock and Voting Stock immediately prior to such Business Combination
|
(4)
|
approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
|
(d)
|
“
Date of Termination
” means the date on which the Employee incurs a “separation from service,” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“
Code
”), with the Company and its Subsidiaries.
|
(e)
|
“
Disabled
” means the Employee has become permanently disabled within the meaning of, and begins actually to receive disability benefits pursuant to, the long-term disability plan in effect immediately prior to the Change in Control for key employees of the Company and its Subsidiaries.
|
(f)
|
“
Good Reason
” means:
|
(1)
|
failure to elect, reelect or otherwise maintain the Employee in the offices or positions in the Company or any Subsidiary which the Employee held immediately prior to a Change in Control, or the removal of the Employee as a director of the Company (or any successor thereto) if the Employee shall have been a director of the Company immediately prior to the Change in Control;
|
(2)
|
a material reduction in the nature or scope of the responsibilities or duties attached to the position or positions with the Company and its Subsidiaries which the Employee held immediately prior to the Change in Control, a material reduction in the aggregate of the
|
(3)
|
the liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or a significant portion of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization or otherwise) to which all or a significant portion of its business and/or assets have been transferred (directly or by operation of law) shall have assumed all duties and obligations of the Company under this Agreement pursuant to Section 13 hereof;
|
(4)
|
the Company shall relocate its principal executive offices, or the Company or any Subsidiary shall require the Employee to have his or her principal location of work changed, to any location which is in excess of 50 miles from the location thereof immediately prior to the Charge in Control or the Company or any Subsidiary shall require the Employee to travel away from his or her office in the course of discharging his or her responsibilities or duties hereunder significantly more (in terms of either consecutive days or aggregate days in any calendar year) than was required of him or her prior to the Change in Control without, in either case, the Employee’s prior written consent; or
|
(5)
|
without limiting the generality or the effect of the foregoing, any material breach of this Agreement by the Company or any successor thereto.
|
(g)
|
“
Subsidiary
” means a corporation, company or other entity (i) more than fifty percent (50%) of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than fifty percent (50%) of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter owned or controlled, directly or indirectly, by the Company, but such corporation, company or other entity shall be deemed to be a Subsidiary only so long as such ownership or control exists.
|
(h)
|
“
Term
” means the period commencing as of the date hereof and expiring as of the close of business on [
insert date that is two years from the date of the agreement
], provided, however, that (i) commencing on January 1, 2017 and each January 1 thereafter, the Term shall automatically be extended for an additional year unless, not later than September 30 of the year immediately preceding such January 1, the Company or the Employee shall have given notice that it or he/she, as the case may be, does not wish to have the Term extended and (ii) upon a Change in Control, the Term shall be extended to the third anniversary of such Change in Control. Notwithstanding the foregoing, subject to Section 11 hereof, if, at any time prior to a Change in Control, the Employee for any reason is no longer an employee of the Company or a Subsidiary, thereupon the Term shall be deemed to have expired.
|
2.
|
Acknowledgment of Consideration
. The Employee agrees that this Agreement was entered into for good and valuable consideration, including, but not limited to the Company’s employment or continued
|
3.
|
Employment Prior to a Change in Control.
Prior to a Change in Control, the following terms shall govern the Employee’s employment.
|
(a)
|
Employment At-Will
. The Employee is employed on an at-will basis. This means that either the Company or the Employee may terminate the Employee’s employment at any time, with or without notice, and with or without reason. The Employee understands and agrees that nothing in this Agreement constitutes an express or implied contract, or any promise or commitment, guaranteeing continued employment with the Company. The Company reserves the sole right to interpret, administer, change, revise, amend, or abolish any or all employment compensation, benefits, policies, procedures, or practices at any time, with or without notice.
|
(b)
|
General Employment Duties
. The Employee agrees to diligently perform his or her job duties as may be assigned by the Company to the best of his or her ability. The Employee will keep informed of the Company’s policies, procedures, and practices, and will comply with them at all times. The Employee also agrees that, while employed by the Company, the Employee shall not engage in any activity that might impair or otherwise interfere with the proper performance of the Employee’s duties or responsibilities.
|
4.
|
Employment Following a Change in Control
. Effective only upon a Change in Control, the following terms shall apply:
|
(a)
|
The Employee shall devote substantially all of his or her time during normal business hours (subject to vacations, sick leave and other absences in accordance with the policies of the Company and its Subsidiaries as in effect for key employees immediately prior to the Change in Control) to the business and affairs of the Company and its Subsidiaries, but nothing in this Agreement shall preclude the Employee from devoting reasonable periods of time during normal business hours to (i) serving as a director, trustee or member of or participant in any organization or business so long as such activity is not directly competitive with the business of the Company as then being carried on, (ii) engaging in charitable and community activities, or (iii) managing his or her personal investments.
|
(b)
|
For his or her services pursuant to Section 4(a) hereof, the Employee shall (i) be paid an annual base salary at a rate not less than the Employee’s annual fixed or base compensation (payable monthly or otherwise as in effect for key employees of the Company immediately prior to the occurrence of a Change in Control) or such higher rate as may be approved from time to time by the Board, the Compensation Committee thereof or management (which base salary at such rate is herein referred to as “
Base Pay
”) and (ii) have a bona fide opportunity to earn an annual amount equal to not less than the annual bonus, incentive or other opportunity for payments of cash compensation in addition to the amounts referred to in clause (i) above made or to be made in regard to services rendered in any calendar year during the year in which the Change in Control occurred pursuant to any bonus, incentive, profit-sharing, performance, discretionary pay or similar policy, plan, program or arrangement of the Company or any Subsidiary or any successor thereto providing an annual cash bonus opportunity at least equal to the cash bonus opportunity payable thereunder (in both value and achievability) prior to a Change in Control (“
Incentive Pay
”);
provided
,
however
, that with the prior written consent of the Employee, nothing herein shall preclude a change in the mix between Base Pay and Incentive Pay so long as the aggregate annual cash compensation opportunity for the Employee in any one calendar year is not reduced in connection therewith or as a result thereof; and
provided
further
,
however
, that in no event shall any increase in the Employee’s aggregate cash compensation or any portion thereof in any way diminish any other obligation of the Company under this Agreement.
|
(c)
|
For his or her services pursuant to Section 4(a) hereof, the Employee shall be a full participant in, and shall be entitled to the perquisites, benefits and service credit for benefits as provided under, any and all employee retirement, income and welfare benefit policies, plans, programs or arrangements in which key employees of the Company or its Subsidiaries participate, including without limitation any stock option, stock purchase, stock appreciation, restricted stock grant, savings, pension, supplemental retirement or other retirement, income or welfare benefit, deferred compensation, group and/or executive life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by the Company or any Subsidiary), disability, salary continuation, expense reimbursement and other employee benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs, or arrangements that may be adopted hereafter by the Company or any Subsidiary providing perquisites, benefits and service credit for benefits at least equal to those provided or are payable thereunder prior to a Change in Control (collectively, “
Employee Benefits
”);
provided
,
however
, that except as expressly provided in, and subject to the terms of, Section 6(a)(1)(B) hereof, the Employee’s rights thereunder shall be governed by the terms thereof and shall not be enlarged hereunder or otherwise affected hereby. Subject to the proviso in the immediately preceding sentence, if and to the extent such perquisites, benefits or service credit for benefits are not payable or provided under any such policy, plan, program or arrangement as a result of the amendment or termination thereof, then the Company shall itself pay or provide therefor. Nothing in this Agreement shall preclude improvement or enhancement of any such Employee Benefits, provided that no such improvement shall in any way diminish any other obligation of the Company under this Agreement.
|
5.
|
Termination of Employment Following a Change in Control
.
|
(a)
|
Death or Disability
. The Employee’s employment shall terminate automatically if the Employee dies or becomes Disabled following a Change in Control.
|
(b)
|
Cause
. The Company may terminate the Employee’s employment for Cause or without Cause following a Change in Control.
|
(c)
|
Good Reason
. The Employee’s employment may be terminated by the Employee for Good Reason or by the Employee voluntarily without Good Reason following a Change in Control.
|
(d)
|
Notice of Termination
. Any termination by the Company for Cause, or by the Employee for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 13(b). “
Notice of Termination
” means a written notice that (1) indicates the specific termination provision in this Agreement relied upon, (2) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment under the provision so indicated, and (3) if the termination date is other than the date of receipt of such notice, specifies the termination date (which termination date shall be not more than thirty (30) days after the giving of such notice). The failure by the Employee or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of the Employee or the Company, respectively, hereunder or preclude the Employee or the Company, respectively, from asserting such fact or circumstance in enforcing the Employee’s or the Company’s respective rights hereunder.
|
6.
|
Exclusive Obligations of the Company upon Certain Terminations Following a Change in Control
.
|
(a)
|
Good Reason; Other Than for Cause
. If, during the three (3) year period following a Change in Control, (X) the Company terminates the Employee’s employment other than for Cause, death, or Disability or (Y) the Employee resigns for Good Reason:
|
(1)
|
the Company shall pay to the Employee (or the Employee’s estate or beneficiary, in the event of the Employee’s death after the Date of Termination), at the time specified herein (except as otherwise provided by Section 13(d)), the following amounts:
|
(A)
|
a lump sum payment equal to the sum of (i) ____ times the Base Pay of the Employee plus (ii) ____ times the target annual Incentive Pay of the Employee, in lieu of any further payments to the Employee for periods subsequent to the Date of Termination (collectively, the “
Severance Payment
”), payable within six (6) business days following the Date of Termination, provided all conditions to payment have been satisfied;
|
(B)
|
commencing on the Date of Termination and continuing until the earlier of (i) the expiration of the ___ year anniversary of the Date of Termination, (ii) the Employee’s death, or (iii) the Employee’s attainment of age 65 (such time period, the “
Benefits Period
”), the Company shall continue to provide the Employee (and the Employee’s eligible dependents and beneficiaries) with medical, dental, vision, and prescription drug benefits (collectively “
health benefits
”) and life insurance benefits substantially similar to those which the Employee was receiving or entitled to receive immediately prior to the Date of Termination (and if and to the extent that such benefits shall not or cannot be paid or provided under any policy, plan, program or arrangement of the Company or its Subsidiaries solely in order to comply with applicable law or due to the fact that the Employee is no longer an officer or employee of the Company and its Subsidiaries, then the Company shall itself pay or provide for the payment to the Employee (and the Employee’s eligible dependents and beneficiaries) such health benefits and life insurance benefits). The Employee shall pay the cost, on an after-tax basis, for the continued health benefits coverage, on or about January 31 of the year following the year in which the Date of Termination occurs and continuing on or about each January 31 until January 31 of the year following the last year of the Benefits Period, and concurrently therewith (and no later than March 15 following each such January 31) the Company will make a lump sum payment to the Employee such that, after payment of all taxes incurred by the Employee as a result of the Employee’s receipt of the continued health benefits coverage and payment by the Company, the Employee retains an amount equal to the amount the Employee paid during the immediately preceding calendar year for the health benefits coverage described in this Section 6(a)(1)(B). Without otherwise limiting the purposes or effect of Section 7 hereof, benefits provided or payable to the Employee pursuant to this Section 6(a)(1)(B) by reason of any “welfare benefit plan” of the Company (as the term “welfare benefit plan” is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) shall be reduced to the extent comparable welfare benefits are actually received by the Employee from another employer during the Benefits Period; and
|
(C)
|
a lump sum payment in an amount equal to the additional benefits that the Employee would have accrued under each qualified or nonqualified pension, profit sharing, deferred compensation or supplemental plan maintained by the Company for the Employee’s benefit had the Employee continued his or her employment with the Company for one additional year following his or her Date of Termination, provided that the Employee was fully vested under such plans immediately prior to his or her Date of Termination, payable within six (6) business days following the Date of Termination, provided all conditions to payment have been satisfied.
|
(b)
|
Release
. As a condition to receiving payments under this Section 6, no later than forty five (45) days after having been presented such release by the Company, the Employee shall have executed and delivered to the Company a general release of claims in favor of the Company, its current and former Subsidiaries, affiliates and stockholders, and the current and former directors, officers, employees and agents of the Company in a form acceptable to the Company, and the Employee’s general release shall have become irrevocable.
|
7.
|
No Set-Off; Company’s Obligations; Mitigation
. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense, or other claim, right or action that the Company may have against the Employee or others. In no event shall the Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Employee under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the Employee obtains other employment.
|
8.
|
Indemnification of Legal Fees
. Effective only upon a Change in Control, it is the intent of the Company that the Employee not be required to incur the expenses associated with the enforcement of his or her rights under this Agreement following such a Change in Control by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits and payments intended to be extended to the Employee hereunder following a Change in Control. Accordingly, following a Change in Control if it should appear to the Employee that the Company has failed to comply with any of its obligations under this Agreement which arose following a Change in Control or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any litigation designed to deny, or to recover from, the Employee the benefits intended to be provided to the Employee hereunder, the Company irrevocably authorizes the Employee from time to time to retain counsel of his or her choice, at the expense of the Company as hereafter provided, to represent the Employee in connection with the initiation or defense of any litigation or other legal action with respect to this Agreement, whether by or against the Company, or any Subsidiary, director, officer, stockholder or other person affiliated with the Company. Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to the Employee’s entering into an attorney-client relationship with such counsel, and in that connection the Company and the Employee agree that a confidential relationship shall exist between the Employee and such counsel. Following a Change in Control, the Company shall pay or cause to be paid and shall be solely responsible for any and all attorneys’ and related fees and expenses incurred by the Employee as a result of the Company’s failure to perform this Agreement or any provision hereof or as a result of the Company or any person contesting the validity or enforceability of this Agreement or any provision hereof as aforesaid, provided any such reimbursement of attorneys’ and related fees and expenses shall be made not later than December 31 of the year following the year in which the Employee incurred the expense.
|
9.
|
Section 280G
.
|
(a)
|
In the event that any payment or benefit received or to be received by the Employee (including any payment or benefit received in connection with a Change in Control or the termination of the Employee’s employment pursuant to the terms of this Agreement) (all such payments and benefits, together, the “
Total Payments
”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “
Excise Tax
”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero);
provided
,
however
, that the Total Payments will only be
|
(b)
|
In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payment and payments and benefits due in respect of any equity not subject to Section 409A of the Code, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A of the Code as deferred compensation.
|
(c)
|
For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the Employee shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“
Tax Counsel
”) reasonably acceptable to the Employee and selected by the accounting firm which was, immediately prior to the Change of Control, the Company’s independent auditor (the “
Auditor
”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
|
(d)
|
At the time that payments are made under this Agreement, the Company will provide the Employee with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations, including any opinions or other advice the Company received from Tax Counsel, the Auditor, or other advisors or consultants (and any such opinions or advice which are in writing will be attached to the statement). All such calculations and opinions shall be binding on the Company and the Employee.
|
10.
|
Covenants of Employee
.
|
(a)
|
Non-Competition and Non-Solicitation
.
|
(1)
|
Purpose and Definition
. To protect the Protected Information the Employee receives, and in consideration of receiving that Protected Information and compensation and benefits from the Company, and for other valuable consideration, the Employee agrees to the following non-competition and non-solicitation covenants.
|
(2)
|
As used in this Agreement, “
Protected Information
” means information possessed by the Company or a parent, predecessor, Subsidiary, joint venture, or partnership of the Company, or any other entity whose assets, stock, or business activities have been acquired by the Company (collectively, the “
Related Companies
”), whether developed by the Employee or otherwise, that is not generally known publicly and that has value, gives the Company or its Related Companies a competitive advantage or otherwise qualifies as a “trade secret” under applicable laws. Protected Information includes information that has been provided to the Company or its Related Companies by a third party and that is subject to restrictions on disclosure and/or use. Protected Information will generally include, but is not limited to, research, software, engineering drawings, service documentation, competitive intelligence, supplier names and data, customer information, business strategies, planned acquisitions or divestitures, quotations, discounts, data compilations, items marked as “confidential”, “secret”, “proprietary” or “privileged”, and any other information the Company has not publicly or lawfully obtained from third parties who are not bound by a confidentiality agreement with the Company, is not Protected Information. In the event the Employee is unsure if something is to be treated as Protected Information, the Employee shall treat it as such until expressly advised otherwise by an officer of the Company.
|
(3)
|
Noncompetition
.
During the Employee’s employment and for a period of one (1) year after the Date of Termination, the Employee shall not: (A) directly or indirectly act in concert or conspire with any person employed by the Company in order to engage in or prepare to engage in or to have a financial or other interest in any business or any activity that the Employee knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on; or (B) serve as an employee, agent, partner, shareholder, director, or consultant for, or in any other capacity participate, engage, or have a financial or other interest in any business or any activity that the Employee knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on (
provided
,
however
, that notwithstanding anything to the contrary contained in this Agreement, the Employee may own up to two percent (2%) of the outstanding shares of the capital stock of a company whose securities are registered under Section 12 of the Securities Exchange Act of 1934).
|
(4)
|
Confidentiality
. The Company has advised the Employee and the Employee acknowledges that it is the policy of the Company to maintain as secret and confidential all Protected Information, and that Protected Information has been and will be developed at substantial cost and effort to the Company. The Employee shall not at any time, directly or indirectly, divulge, furnish, or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Employee’s employment), nor use in any manner, either during the Employee’s employment or after termination for any reason, any Protected Information, or cause any such Protected Information of the Company to enter the public domain.
|
(5)
|
Nonsolicitation
. During the Employee’s employment and for a period of one (1) year after the Date of Termination, the Employee shall not: (A) employ or retain or solicit for
|
(6)
|
Cooperation
. Employee agrees to cooperate with the Company and its attorneys in connection with any and all lawsuits, claims, investigations, or similar proceedings that have been or could be asserted at any time arising out of or related in any way to Employee’s employment by the Company or any of its Subsidiaries.
|
(7)
|
Nondisparagement
. At all times, the Employee agrees not to disparage the Company or otherwise make comments harmful to the Company’s reputation.
|
(8)
|
California Law
. To the extent that California law is deemed to govern this Agreement, the restrictions set forth in Sections 10(a)(3) (with respect to post-employment competition) and (5) (with respect to post-employment solicitation) of this Agreement do not apply to the Employee.
|
(b)
|
Reasonableness of Restrictions
. The Employee acknowledges that he or she has carefully considered the nature and extent of the restrictions upon him or her, and the rights and remedies conferred upon the Company in this Agreement, and acknowledges and agrees that the same: (i) are reasonable in scope, territory, and duration; (ii) are designed to eliminate competition which otherwise would be unfair to the Company; (iii) do not stifle his or her inherent skill and experience; (iv) would not operate as a bar to his or her sole means of support; (v) are fully required to protect the legitimate interests of the Company; and (vi) do not confer a benefit upon the Company disproportionate to the detriment of the Employee.
|
11.
|
Employment Rights
. Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or the Employee to have the Employee remain in the employment of the Company or any Subsidiary prior to or after any Change in Control;
provided
,
however
, that any termination of employment of the Employee or the removal of the Employee from such Employee’s office or position (other than a termination by the Company for Cause, or termination for death or Disability) in the three (3) month period preceding a Change in Control shall be deemed to be a termination or removal of the Employee after a Change in Control for purposes of this Agreement.
|
12.
|
Successors
.
|
(a)
|
The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to the Employee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place. This Agreement shall be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business and/or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the “Company” for the purposes of this Agreement), but shall not otherwise be assignable, transferable or delegable by the Company.
|
(b)
|
This Agreement shall inure to the benefit of and be enforceable by the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees and/or legatees.
|
(c)
|
This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Section 12(a) hereof. Without limiting the generality of the foregoing, the Employee’s right to receive payments hereunder shall not be assignable, transferable or delegable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by his or her will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 12(c), the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated.
|
(d)
|
The Company and the Employee recognize that each party will have no adequate remedy at law for breach by the other of any of the agreements contained herein and, in the event of any such breach, the Company and the Employee hereby agree and consent that the other shall be entitled to a decree of specific performance, mandamus or other appropriate remedy to enforce performance of this Agreement.
|
13.
|
Miscellaneous
.
|
(a)
|
This Agreement and all matters relating to Employee’s employment shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to conflicts of laws principles thereof. Each party to this Agreement (i) consents to the personal jurisdiction of the state and federal courts having jurisdiction in Summit County, Ohio, (ii) stipulates that the proper, exclusive, and convenient forum and venue for legal adjudication of any issue arising out of this Agreement or relating to claims between the parties is Summit County, Ohio for state court proceedings, and the Northern District of Ohio, Akron location, for federal district court proceedings, and (iii) waives any defense, whether asserted by a motion or pleading, that Summit County, Ohio, or the Northern District of Ohio, Akron location, is an improper or inconvenient venue.
|
(b)
|
Any notices, requests, demands, or other communications provided for by this Agreement shall be sufficient if in writing and if sent by registered or certified mail to the Employee at the last address he or she has filed in writing with the Company or, in the case of the Company, at its principal offices.
|
(c)
|
The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. Any invalid or unenforceable provision shall be deemed severed from this Agreement to the extent of its invalidity or unenforceability, and this Agreement shall be construed and enforced as if the Agreement did not contain that particular provision to the extent of its invalidity or unenforceability, provided that in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
|
(d)
|
The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith. Notwithstanding any provisions of this Agreement to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, the Employee shall not be considered to have terminated employment with the Company for purposes of this Agreement and no payments shall be due to the Employee under Section 6 of this Agreement until the Employee would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A of the Code. For purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A of the Code, and any payments that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred
|
(e)
|
The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or government regulation or ruling.
|
(f)
|
Treatment of outstanding long-term equity incentive awards shall be in accordance with the terms and conditions of the award agreements and plan pursuant to which the incentives were granted.
|
(g)
|
To the extent consistent with state law, the Employee authorizes the Company to conduct drug tests and background checks on the Employee during the Employee’s employment with the Company at times determined by the Company. Failure to successfully complete or pass each drug test and background check is reason for immediate termination.
|
(h)
|
No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Employee and the Company. No waiver by either party hereto at any time of any breach by the other party hereto or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.
|
(i)
|
The Employee and the Company acknowledge that, except as provided in any other written agreement between the Employee and the Company, the employment of the Employee by the Company is “at will” and, prior to or after the occurrence of a Change in Control, the Employee’s employment may be terminated by either the Employee or the Company at any time. This Agreement represents the entire agreement between the parties relating to the subject matter hereof and replaces any and all prior agreements pertaining thereto between the Employee and the Company. No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.
|
DIEBOLD, INCORPORATED:
|
By:
|
Title:
|
EMPLOYEE:
|
10.
|
Termination of Employment
.
|
The Company
By:
/s/ Sheila Rutt
|
By:
/s/ Andreas W. Mattes
|
||
|
Sheila Rutt
Vice President,
Chief Human Resources Officer
|
|
Andreas W. Mattes
|
Article 1. Establishment and Term of the Plan
|
2
|
Article 2. Definitions
|
3
|
Article 3. Severance Benefits
|
5
|
Article 4. Confidentiality and Noncompetition
|
9
|
Article 5. Legal Fees and Notice
|
10
|
Article 6. Successors and Assignment
|
10
|
Article 7. Miscellaneous
|
11
|
(a)
|
“Base Salary”
means the Executive’s annual rate of salary, whether or not deferred as of the Effective Date of Termination.
|
(b)
|
“Beneficiary”
means the persons or entities designated or deemed designated by the Executive pursuant to Section 7.5 herein.
|
(c)
|
“Board”
means the Board of Directors of the Company.
|
(d)
|
“Cause”
shall mean the Executive’s”
|
(i)
|
Willful failure to substantially perform his duties with the Company (other than any such failure resulting from the Executive’s Disability), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has not substantially performed his duties, and the Executive has failed to remedy the situation with fifteen (15) business days of such written notice from the Company;
|
(ii)
|
Willful gross negligence in the performance of the Executive’s duties;
|
(iii)
|
Conviction of, or plea of guilty or nolo contendere, to any felony or a lesser crime or offense which, in the reasonable opinion of the Company, could adversely affect the business or reputation of the Company;
|
(iv)
|
Willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise;
|
(v)
|
Willful violation of any provision of the Company’s code of conduct;
|
(vi)
|
Willful violation of any of the covenants contained in Article 4 of this Plan, as applicable;
|
(vii)
|
Act of dishonesty resulting in, or intended to result in, personal gain at the expense of the Company; or
|
(viii)
|
Engaging in any act that is intended to harm, or may be reasonably expected to harm, the reputation, business prospects, or operations of the Company.
|
(e)
|
“Code”
means the United States Internal Revenue Code of 1986, as amended, and any successors thereto.
|
(f)
|
“Committee”
means the Compensation Committee of the Board or any other committee appointed by the Board to perform the functions of the Compensation Committee.
|
(g)
|
“Company”
means Diebold, Incorporated, an Ohio corporation, or any successor thereto as provided in Article 6 herein.
|
(h)
|
“Disability”
shall have the same meaning ascribed to that word in the long-term disability plan in effect for senior executives of the Company and its Subsidiaries.
|
(i)
|
“Effective Date”
means the commencement date of this Plan as specified in Section 1.2 of this Plan.
|
(j)
|
“Effective Date of Termination”
means the date on which a Qualifying Termination occurs, as defined hereunder, which triggers the payment of Severance Benefits hereunder.
|
(k)
|
“Good Reason”
shall mean the occurrence of any one or more of the following without the Executive’s express written consent:
|
(l)
|
“Notice of Termination”
shall mean a written notice that shall indicate the specific termination provision in this Plan relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.
|
(m)
|
“Qualifying Termination”
means a termination of employment under the following circumstances:
|
(i)
|
An involuntary termination of the Executive’s employment by the Company for reasons other than Cause pursuant to a Notice of Termination delivered to the Executive by the Company; or
|
(ii)
|
A voluntary termination by the Executive for Good Reason pursuant to a Notice of Termination delivered to the Company by the Executive.
|
(n)
|
“Severance Benefits”
means the payment of severance compensation as provided in Article 3 herein.
|
(a)
|
Severance Benefits.
The Executive shall be entitled to receive from the Company Severance Benefits, as described in Section 3.2 or, if applicable, Section 3.4 herein, if a Qualifying Termination of the Executive’s employment has occurred.
|
(b)
|
No Severance Benefits.
The Executive shall not be entitled to receive Severance Benefits if the Executive’s employment with the Company ends for reasons other than a Qualifying Termination.
|
(c)
|
General Release and Acknowledgement of Restrictive Covenants.
As a condition to receiving Severance Benefits under Section 3.2 or, if applicable, Section 3.4 herein, no later than sixty (60) days after the date of the Executive’s Qualifying Termination, (i) the Executive shall be obligated to execute a general release of claims in favor of the Company, its current and former affiliates and stockholders, and the current and former directors, officers, employees, and agents of the Company in a form acceptable to the Company, (ii) the Executive must execute a notice acknowledging the restrictive covenants in Article 4, and (iii) the Executive’s general release shall have become irrevocable.
|
(a)
|
A lump‑sum amount, paid sixty (60) calendar days
following the Effective Date of Termination, equal to the Executive’s unpaid Base Salary, accrued vacation pay, unreimbursed business expenses, and all other items earned by and owed to the Executive through and including the Effective Date of Termination; provided that if the sixty (60) day period begins in an Executive’s taxable year and ends in the Executive’s subsequent taxable year, the payment will be made in the subsequent taxable year.
|
(b)
|
A lump‑sum amount, paid within the sixty (60) calendar days following the Effective Date of Termination, equal to: (i) two (2) for Grade 100 and 90 Executives regardless of date of hire, (ii) one and one‑half (1.5) for Grade 85 Executives regardless of date of hire, (iii) one and one-quarter for Grade 80 Executives with a date of hire after September 1, 2014, (iv) one and one-half (1.5) for Grade 80 Executives with a date of hire prior to August 31, 2014, and (v) one (1) for Grade 75 and 70 Executives regardless of date of hire, multiplied by the sum of the following: (A) the Executive’s Base Salary, and (B) the Executive’s annual target bonus opportunity in the year of termination, with the exception of Grade 70 with a date of hire after September 1, 2014 which is one (1) times (A) the Executive’s Base Salary only. Provided that if the sixty (60) day period begins in an Executive’s taxable year and ends in the Executive’s subsequent taxable year, the payment will be made in the subsequent taxable year.
|
(c)
|
A lump‑sum amount, if any, paid within two and one‑half (2 ½) months after the end of the calendar year that includes the Effective Date of Termination, equal to the actual bonus that would have been payable to the Executive for the calendar year that includes the Effective Date of Termination based on actual performance if the Executive had remained employed through the end of such calendar year; provided however, that such amount shall be adjusted on a pro rata basis based on the number of days the Executive was actually employed during the bonus plan year in which the Qualifying Termination occurs.
|
(d)
|
Continuation of the Executive’s medical, dental, vision, and Company-paid basic life insurance coverage for: (i) one hundred and four weeks (104) for Grade 100 and 90 Executives regardless of date of hire, or (ii) seventy-eight (78) weeks for Grade 85 and 80 Executives, (iii) sixty-five (65) weeks for Grade 80 Executives with a date of hire after September 1, 2014, and (iv) fifty-two (52) weeks for Grade 75 and 70 Executives. These benefits shall be provided by the Company to the Executive beginning immediately upon the Effective Date of Termination. Such benefits shall be provided to the Executive at the same coverage level and cost to the Executive as in effect immediately prior to the Executive’s Effective Date of Termination. Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A of the Code, then the benefits provided under this Section 3.2(d) which the Company determines constitute the payment of deferred compensation (within the meaning of Section 409A of the Code) shall be provided at the Executive’s sole cost during the six (6) month period immediately after the Effective Date of Termination, and as soon as administratively practicable following the expiration of such six (6) month period, the Company shall reimburse the Executive for the portion of such costs payable by the Company hereunder.
|
(e)
|
Treatment of outstanding long‑term incentives shall be in accordance with Section 3.3 herein.
|
(f)
|
The Company will assist the Executive in finding other employment opportunities by providing to him, at the Company’s limited expense, professional outplacement services through the provider of the Company’s choice. Such outplacement services shall terminate when the Executive finds other employment. However, in no event shall such outplacement services continue for more than two (2) years following the Effective Date of Termination.
|
(g)
|
Notwithstanding anything in this Plan to the contrary, if the Executive constitutes a “specified employee” as defined and applied in Section 409A of the Code, as of the Effective Date of Termination, to the extent payments made under Sections 3.2(a), (b), or (c) constitute deferred compensation (after taking into account any applicable exemptions from Section 409A of the Code), and to the extent required by Section 409A of the Code, payments may not commence to be paid to Executive until the earlier of: (i) the first day following the six (6) month anniversary of the Executive’s Effective Date of Termination, or (ii) the Executive’s date of death; provided, however, that any payments delayed during this six (6) month period shall be paid in a lump sum as soon as administratively practicable following the six (6) month anniversary of the Executive’s Effective Date of Termination. For purposes of Section 409A of the Code, each payment due under Sections 3.2(a), (b), and (c) immediately above shall be considered a separate payment.
|
(a)
|
All outstanding and unvested stock options and stock appreciation rights (“SARs”) shall immediately vest and shall remain exercisable for a period of twelve (12) months from the Effective Date of Termination or the last day of the option term, whichever occurs first. Additionally, from time to time, the Company may declare "blackout" periods with respect to Executive and/or designated employees of the Company during which Executive and/or such employees are prohibited from engaging in certain transactions in Company securities. The scheduled expiration date of stock options and SARs pursuant to this subsection shall automatically, and without further notice to the option/SAR holder, be extended by one business day for each business day of the blackout period applied to the option/SAR holder, but in no case longer than the option term..
|
(b)
|
All restrictions on unvested shares of restricted stock and unvested restricted stock units shall immediately lapse, with such shares and units becoming nonforfeitable on a pro rata basis, as determined under this subparagraph (b). The pro rata award shall equal the product of (x) and (y) where (x) is the number of restricted stock shares or units subject to the award, and (y) is a fraction, the numerator of which is the number of calendar months that the Executive was employed by the Company during the restriction period (with any partial months counting as a full month for this purpose) and the denominator of which is the number of months in the restriction period.
|
(c)
|
Unearned performance shares and performance units shall be paid out on a pro rata basis, as determined under this subparagraph (c). The pro rata award shall equal the product of (x) and (y) where (x) is the award the Executive would have earned based on actual performance measured as of the end of the respective performance period and (y) is a fraction, the numerator of which is the number of calendar months that the Executive was employed by the Company during the performance period (with any partial month counting as a full month for this purpose) and the denominator of which is the number of months in the performance period.
|
(a)
|
A lump sum amount, paid within sixty (60) calendar days following the Effective Date of Termination, equal to the Executive’s unpaid Base Salary, accrued vacation pay, unreimbursed business expenses, and all other items earned by and owed to the Executive through and including the Effective Date of Termination; provided that if the sixty (60) day period begins in an Executive’s taxable year and ends in the Executive’s subsequent taxable year, the payment will be made in the subsequent taxable year.
|
(b)
|
A lump sum amount, paid within sixty (60) calendar days following the Effective Date of Termination, equal to: (i) the number of full calendar months from the date on which the Executive became an employee of the Company until the Effective Date of Termination (but in any event, no less than three (3) months), multiplied by (ii) an amount equal to (A) the sum of (x) the Executive’s Base Salary, and (y) the Executive’s annual target bonus opportunity in the year of termination, divided by (B) twelve (12)
with the exception
that Executives at a Grade 70 with a date of hire after September 1, 2014 receive one (1) times the Executive’s monthly base salary only multiplied by the number of full calendar months from the date on which the Executive became an employee of the Company until the Effective Date of Termination (but in any event, no less than (3) months); in all instances, if the sixty (60) day period begins in an Executive’s taxable year and ends in the Executive’s subsequent taxable year, the payment will be made in the subsequent taxable year.
|
(c)
|
[Intentionally omitted.]
|
(d)
|
Continuation of the Executive’s medical, dental, and vision insurance coverage for a period of time equal to the number of full calendar months from the date on which the Executive became an employee of the Company until the Effective Date of Termination (but in any event, no less than three (3) months). These benefits shall be provided by the Company to the Executive beginning immediately upon the Effective Date of Termination. Such benefits shall be provided to the Executive at the same coverage level and cost to the Executive as in effect immediately prior to the Executive’s Effective Date of Termination. Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A of the Code, then the benefits provided under this Section 3.4(d) which the Company determines constitute the payment of deferred compensation (within the meaning of Section 409A of the Code) shall be provided at the Executive’s sole cost during the six (6) month period immediately after the Effective Date of Termination, and as soon as administratively practicable following the expiration of such six (6) month period, the Company shall reimburse the Executive for the portion of such costs payable by the Company hereunder.
|
(e)
|
Treatment of outstanding long-term incentives shall be in accordance with the terms and conditions of the award agreements and plan pursuant to which the incentive was granted. Section 3.3 shall have no applicability.
|
(f)
|
[Intentionally omitted.]
|
(g)
|
Notwithstanding anything in this Plan to the contrary, if the Executive constitutes a “specified employee” as defined and applied in Section 409A of the Code, as of the Effective Date of Termination, to the extent payments made under Sections 3.4(a) or (b) constitute deferred compensation (after taking into account any applicable exemptions from Section 409A of the Code), and to the extent required by Section 409A of the Code, payments may not commence to be paid to Executive until the earlier of: (i) the first day following the six (6) month anniversary of the Executive’s Effective Date of Termination or, (ii) the Executive’s date of death; provided, however, that any payments delayed during this six (6) month period shall be paid in a lump sum as soon as administratively practicable following the six (6) month anniversary of the Executive’s Effective Date of Termination. For purposes of Section 409A of the Code, each payment due under Section 3.4(a) and (b) immediately above shall be considered a separation payment.
|
(a)
|
Noncompetition.
During the Executive’s Employment and for a period of: (i) two (2) years for Grade 100 and 90 Executives regardless of date of hire, or (ii) one and one-half (1.5) years for Grade 85 and 80 Executives, (iii) one and one-quarter (1.25) years for Grade 80 Executives with a date of hire after September 1, 2014, and (iv) one (1) year for Grade 75 and 70 Executives after the Effective Date of Termination, the Executive shall not: (A) directly or indirectly act in concert or conspire with any person employed by the Company in order to engage in or prepare to engage in or to have a financial or other interest in any business or any activity that he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on; or (B) serve as an employee, agent, partner, shareholder, director, or consultant for, or in any other capacity participate, engage, or have a financial or other interest in any business or any activity that he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on (provided, however, that notwithstanding anything to the contrary contained in this Plan, the Executive may own up to two percent (2%) of the outstanding shares of the capital stock of a company whose securities are registered under Section 12 of the Securities Exchange Act of 1934).
|
(b)
|
Confidentiality.
The Company has advised the Executive and the Executive acknowledges that it is the policy of the Company to maintain as secret and confidential all Protected Information (as defined below), and that Protected Information has been and will be developed at substantial cost and effort to the Company. The Executive shall not at any time, directly or indirectly, divulge, furnish, or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Executive’s employment), nor use in any manner, either during the
|
(c)
|
Nonsolicitation.
During the Executive’s employment and for a period of: (i) three (3) years for Grade 100 and 90 Executives (ii) two and one-half (2 ½) years for Grade 85 and 80 Executives, and (iii) two (2) year for Grade 75 and 70 Executives after the Effective Date of Termination, the Executive shall not: (A) employ or retain or solicit for employment or arrange to have any other person, firm, or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee or consultant of the Company; or (B) solicit suppliers or customers of the Company or induce any such person to terminate his, her, or its relationship with the Company.
|
(d)
|
Cooperation.
Executive agrees to cooperate with the Company and its attorneys in connection with any and all lawsuits, claims, investigations, or similar proceedings that have been or could be asserted at any time arising out of or related in any way to Executive’s employment by the Company or any of its subsidiaries.
|
(e)
|
Nondisparagement.
At all times, the Executive agrees not to disparage the Company or otherwise make comments harmful to the Company’s reputation.
|
(f)
|
Severability.
If any provision of Article 4 is held to be unenforceable, then this Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable provision, and the rest of Article 4, valid and enforceable. If a court declines to amend the provisions of Article 4 as provided herein, the invalidity or unenforceability of any provision in Article 4 shall not affect the validity or enforceability of the remaining provisions in Article 4, which shall be enforced as if the offending provision had not been included in this Plan.
|
(1)
|
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 thirty percent (30%) or more of either: (A) the then-outstanding shares of common stock of the Company (the “Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (“Voting Stock”);
provided
,
however
, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (iv) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (3) below; or
|
(2)
|
individuals who, as of July 24, 2015, constitute the Board (as modified by this subsection (2), the “Incumbent 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 Company’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 Company 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 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
|
(3)
|
consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (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 Company Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (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 Company or all or substantially all of the Company’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 Company Common Stock and Voting Stock of the Company, 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 Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, thirty percent (30%) or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or
|
(4)
|
approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
|
1)
|
I have reviewed this quarterly report on Form 10-Q of Diebold, Incorporated;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: July 30, 2015
|
|
|
/s/ Andreas W. Mattes
|
|
|
|
Andreas W. Mattes
|
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
1)
|
I have reviewed this quarterly report on Form 10-Q of Diebold, Incorporated;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: July 30, 2015
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/s/ Christopher A. Chapman
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Christopher A. Chapman
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Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
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1
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
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July 30, 2015
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/s/ Andreas W. Mattes
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Andreas W. Mattes
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President and Chief Executive Officer
(Principal Executive Officer)
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1
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
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July 30, 2015
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/s/ Christopher A. Chapman
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Christopher A. Chapman
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Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
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