þ
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For the fiscal year ended December 31, 2008
|
OR
|
o
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For the transition period
from to
|
Ohio | 34-0183970 | |
(State or other jurisdiction of
incorporation or organization) |
(IRS Employer Identification Number) | |
5995 Mayfair Road,
P.O. Box 3077, North Canton, Ohio (Address of principal executive offices) |
44720-8077
(Zip Code) |
Title of each class | Name of each exchange on which registered: | |
Common Shares $1.25 Par Value | New York Stock Exchange |
Large accelerated Filer
þ
|
Accelerated Filer o | Non-accelerated filer o | Smaller reporting company o |
Common Shares, Par Value $1.25 per Share
|
$ | 2,321,224,755 |
Class
Common Shares $1.25 Par Value |
Outstanding at February 13, 2009
66,187,798 |
(1) | Diebold, Incorporated Proxy Statement for 2009 Annual Meeting of Shareholders to be held on April 23, 2009, portions of which are incorporated by reference into Part III of this Form 10-K. |
(Dollars in thousands)
The Company offers a wide variety of self-service solutions.
Self-service products include a full range of ATMs including
increasing deposit automation technology, cash dispensers,
check-cashing machines, bulk cash recyclers and bulk check
deposit technology.
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The Company offers software solutions consisting of multiple
applications that process events and transactions. These
solutions are delivered on the appropriate platform, allowing
the Company to meet customer requirements while adding new
functionality in a cost-effective manner.
From analysis and consulting to monitoring and repair, the
Company provides value and support to its customers every step
of the way. Services include installation and ongoing
maintenance of our products,
OpteView
®
remote services, branch transformation and distribution channel
consulting. Outsourced and managed services include remote
monitoring, troubleshooting for self-service customers,
transaction processing, currency management, maintenance
services and full support via person to person or online
communication.
Each unique solution may include hardware, software,
services or a combination of all three components. The Company
provides value to its customers by offering a comprehensive
array of integrated services and support. The Companys
service organization provides strategic analysis and planning of
new systems, systems integration, architectural engineering,
consulting, and project management that encompass all facets of
a successful financial self-service implementation.
The Company provides security solutions and facility
products, including in-store bank branches, pneumatic tube
systems for
drive-up
lanes, vaults, safes, depositories, bullet-resistive items,
teller-assist systems, cash-handling automation, plus a global
service organization that supports Diebold and non-Diebold
security products.
The Company provides a broad range of security products
including digital surveillance, card systems, biometric
technologies, alarms and remote monitoring and diagnostics.
The Company provides global sales, service, installation,
project management and monitoring of original equipment
manufacturer (OEM) electronic security products to financial,
government, retail and commercial customers.
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changes in the market acceptance of our products and services;
customer and competitor consolidation;
changes in customer preferences;
declines in general economic conditions;
changes in environmental regulations that would limit our
ability to sell products and services in specific
markets; and
macro-economic factors affecting banks, credit unions and other
financial institutions may lead to cost-cutting efforts by
customers, which could cause us to lose current or potential
customers or achieve less revenue per customer.
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fluctuations in currency exchange rates;
transportation delays and interruptions;
political and economic instability and disruptions;
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restrictions on the transfer of funds;
the imposition of duties and tariffs;
import and export controls;
changes in governmental policies and regulatory environments;
labor unrest and current and changing regulatory environments;
the uncertainty of product acceptance by different cultures;
the risks of divergent business expectations or cultural
incompatibility inherent in establishing joint ventures with
foreign partners;
difficulties in staffing and managing multi-national operations;
limitations on the ability to enforce legal rights and remedies;
reduced protection for intellectual property rights in some
countries; and
potentially adverse tax consequences.
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the failure of prospective customers to conclude that our
products are valuable and should be used;
the reluctance of prospective customers to replace their
existing solutions with our products; and
marketing efforts of our competitors.
combining product offerings and entering into new markets in
which we are not experienced;
convincing customers and distributors that the transaction will
not diminish client service standards or business focus,
preventing customers and distributors from deferring purchasing
decisions or switching to other suppliers (which could result in
additional obligations to address customer uncertainty), and
coordinating sales, marketing and distribution efforts;
consolidating and rationalizing corporate information technology
infrastructure, which may include multiple legacy systems from
various acquisitions and integrating software code;
minimizing the diversion of management attention from ongoing
business concerns;
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persuading employees that business cultures are compatible,
maintaining employee morale and retaining key employees,
integrating employees into the Company, correctly estimating
employee benefit costs and implementing restructuring programs;
coordinating and combining administrative, manufacturing,
research and development and other operations, subsidiaries,
facilities and relationships with third parties in accordance
with local laws and other obligations while maintaining adequate
standards, controls and procedures; and
achieving savings from supply chain and administration
integration.
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Konkol v. Diebold Inc., et al.
,
No. 5:05CV2873 (N.D. Ohio, filed December 13, 2005).
Ziolkowski v. Diebold Inc., et al
.
,
No. 5:05CV2912 (N.D. Ohio, filed December 16, 2005).
New Jersey Carpenters Pension Fund v. Diebold,
Inc.
, No. 5:06CV40 (N.D. Ohio, filed
January 6, 2006).
Rein v. Diebold, Inc., et al.
,
No. 5:06CV296 (N.D. Ohio, filed February 9, 2006).
Graham v. Diebold, Inc., et al.
,
No. 5:05CV2997 (N.D. Ohio, filed December 30, 2005).
McDermott v. Diebold, Inc., et al.
,
No. 5:06CV170 (N.D. Ohio, filed January 24, 2006).
Barnett v. Diebold, Inc., et al.,
No. 5:06CV361 (N.D. Ohio, filed February 15, 2006).
Farrell v. Diebold, Inc., et al.
,
No. 5:06CV307 (N.D. Ohio, filed February 8, 2006).
Forbes v. Diebold, Inc., et al.
,
No. 5:06CV324 (N.D. Ohio, filed February 10, 2006).
Gromek v. Diebold, Inc., et al.
,
No. 5:06CV579 (N.D. Ohio, filed March 14, 2006).
Table of Contents
For
Withheld
53,622,656
6,445,112
46,543,977
13,523,791
53,912,122
6,155,646
47,262,269
12,805,499
45,502,168
14,565,600
45,441,405
14,626,363
53,897,386
6,170,382
58,640,517
1,427,251
52,120,361
7,947,407
53,887,143
6,180,625
For
Against
Abstained
2,466,490
206,516
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ITEM 5:
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
2008
2007
2006
High
Low
High
Low
High
Low
$
39.30
$
23.07
$
48.42
$
42.50
$
43.84
$
36.40
40.44
35.44
52.70
47.25
46.35
39.15
39.81
30.60
54.50
42.49
44.90
36.93
34.47
22.50
45.90
28.32
47.13
41.41
$
40.44
$
22.50
$
54.50
$
28.32
$
47.13
$
36.40
Total Number of
Maximum Number of
Total Number
Shares Purchased as
Shares that May Yet
of Shares
Average Price
Part of Publicly
Be Purchased Under
Period
Purchased(1)
Paid Per Share
Announced Plans
the Plans(2)
3,194
$
33.34
2,926,500
2,926,500
2,926,500
3,194
$
33.34
2,926,500
(1)
Includes 3,194 shares
surrendered or deemed surrendered to the Company in connection
with the Companys stock-based compensation plans.
(2)
The total number of shares
repurchased as part of the publicly announced share repurchase
plan was 9,073,500 as of December 31, 2008. The plan was
approved by the Board of Directors in April 1997 and authorized
the repurchase of up to two million shares. The plan was amended
in June 2004 to authorize the repurchase of an additional two
million shares, and was further amended in August and December
2005 to authorize the repurchase of an additional six million
shares. On February 14, 2007, the Board of Directors
approved an increase in the Companys share repurchase
program by authorizing the repurchase of up to an additional two
million of the Companys outstanding common shares. The
plan has no expiration date.
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The S&P Midcap 400 Index And A Custom Composite Index (28
Stocks)
*
$100 invested on
12/31/03
in
stock & index-including reinvestment of dividends.
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Year ended December 31,
2008
2007
2006
2005
2004(1)
(In millions, except per share data)
$
3,170
$
2,947
$
2,921
$
2,569
$
2,388
2,375
2,265
2,186
1,919
1,715
795
682
735
650
673
102
45
109
95
177
(13
)
(5
)
(4
)
7
2
$
89
$
40
$
105
$
102
$
179
$
1.54
$
0.68
$
1.63
$
1.34
$
2.46
(0.20
)
(0.08
)
(0.06
)
0.11
0.03
$
1.34
$
0.60
$
1.57
$
1.45
$
2.49
$
1.52
$
0.67
$
1.62
$
1.33
$
2.43
(0.19
)
(0.08
)
(0.07
)
0.10
0.03
$
1.33
$
0.59
$
1.55
$
1.43
$
2.46
66
66
67
71
72
66
67
67
71
73
$
67
$
62
$
58
$
58
$
54
$
1.00
$
0.94
$
0.86
$
0.82
$
0.74
$
1,614
$
1,594
$
1,658
$
1,528
$
1,291
735
701
746
728
853
879
893
912
800
438
204
220
208
226
219
856
779
816
568
140
2,538
2,595
2,560
2,341
2,119
947
1,115
998
1,045
1,126
(1)
The data for the year ended
December 31, 2004 is derived from unaudited financial
statements.
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RESULTS OF OPERATIONS as of December 31, 2008
(Unaudited)
(in thousands, except per share amounts)
ITEM 7:
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Table of Contents
RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
timing of a self-service upgrade
and/or
replacement cycle in mature markets such as the United States;
high levels of deployment growth for new self-service products
in emerging markets, such as Asia Pacific;
demand for new service offerings, including outsourcing or
operating a network of ATMs; and
demand beyond expectations for security products and services
for the financial, retail and government sectors.
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RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Year ended December 31,
2008
2007
2006
% of
%
% of
%
% of
Dollars
Net Sales
Change
Dollars
Net Sales
Change
Dollars
Net Sales
(In thousands, except percentages)
$
1,562,948
49.3
9.3
$
1,429,646
48.5
(4.8
)
$
1,500,998
51.4
1,607,132
50.7
5.9
1,517,835
51.5
6.9
1,419,976
48.6
3,170,080
100.0
7.6
2,947,481
100.0
0.9
2,920,974
100.0
1,145,225
36.1
7.0
1,070,286
36.3
1.2
1,057,375
36.2
1,230,239
38.8
2.9
1,195,286
40.6
5.9
1,128,428
38.6
2,375,464
74.9
4.9
2,265,572
76.9
3.6
2,185,803
74.8
794,616
25.1
16.5
681,909
23.1
(7.2
)
735,171
25.2
534,486
16.9
15.4
463,354
15.7
1.3
457,267
15.7
79,070
2.5
6.9
73,950
2.5
3.2
71,625
2.5
4,376
0.1
(90.6
)
46,319
1.6
139.5
19,337
0.7
403
0.0
(106.3
)
(6,392
)
(0.2
)
(2,048.8
)
328
0.0
618,335
19.5
7.1
577,231
19.6
5.2
548,557
18.8
176,281
5.6
68.4
104,678
3.6
(43.9
)
186,614
6.4
(28,906
)
(0.9
)
85.6
(15,575
)
(0.5
)
(15.0
)
(18,324
)
(0.6
)
(8,413
)
(0.3
)
0.6
(8,365
)
(0.3
)
29.6
(6,452
)
(0.2
)
138,962
4.4
72.1
80,738
2.7
(50.1
)
161,838
5.5
37,425
1.2
4.5
35,797
1.2
(32.4
)
52,916
1.8
101,537
3.2
125.9
44,941
1.5
(58.7
)
108,922
3.7
(12,954
)
(0.4
)
139.9
(5,400
)
(0.2
)
23.6
(4,370
)
(0.1
)
$
88,583
2.8
124.0
$
39,541
1.3
(62.2
)
$
104,552
3.6
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RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Year ended
December 31,
2008
2007
$ Change
% Change
$
3,170,080
$
2,947,481
$
222,599
7.6
Year ended December 31,
$ Change/
2008
2007
% Point Change
% Change
$
794,616
$
681,909
$
112,707
16.5
25.1
%
23.1
%
2.0
Table of Contents
RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Year ended December 31,
2008
2007
$ Change
% Change
$
534,486
$
463,354
$
71,132
15.4
79,070
73,950
5,120
6.9
4,376
46,319
(41,943
)
(90.6
)
403
(6,392
)
6,795
(106.3
)
$
618,335
$
577,231
$
41,104
7.1
Year ended December 31,
$ Change/
2008
2007
% Point Change
% Change
$
176,281
$
104,678
$
71,603
68.4
5.6
%
3.6
%
2.0
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RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Year ended December 31,
$ Change/
2008
2007
% Point Change
% Change
$
25,228
$
22,489
$
2,739
12.2
(45,247
)
(42,200
)
(3,047
)
7.2
(8,887
)
4,136
(13,023
)
(314.9
)
$
(28,906
)
$
(15,575
)
$
(13,331
)
85.6
(0.9
)
(0.5
)
(0.4
)
$
(8,413
)
$
(8,365
)
$
(48
)
0.6
Year ended December 31,
$ Change/
2008
2007
% Point Change
% Change
$
101,537
$
44,941
$
56,596
125.9
3.2
1.5
1.7
26.9
%
44.3
%
(17.4
)
Year ended December 31,
$ Change/
2008
2007
% Point Change
% Change
$
(12,954
)
$
(5,400
)
$
(7,554
)
139.9
(0.4
)
(0.2
)
(0.2
)
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RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Year ended December 31,
$ Change/
2008
2007
% Point Change
% Change
$
88,583
$
39,541
$
49,042
124.0
2.8
1.3
1.5
Year ended
December 31,
2007
2006
$ Change
% Change
$
2,947,481
$
2,920,974
$
26,507
0.9
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RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Year ended December 31,
$ Change/
2007
2006
% Point Change
% Change
$
681,909
$
735,171
$
(53,262
)
(7.2
)
23.1
%
25.2
%
(2.1
)
Year ended December 31,
2007
2006
$ Change
% Change
$
463,354
$
457,267
$
6,087
1.3
73,950
71,625
2,325
3.2
46,319
19,337
26,982
139.5
(6,392
)
328
(6,720
)
N/M
$
577,231
$
548,557
$
28,674
5.2
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RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Year ended December 31,
$ Change/
2007
2006
% Point Change
% Change
$
104,678
$
186,614
$
(81,936
)
(43.9
)
3.6
%
6.4
%
(2.8
)
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RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Year ended December 31,
$ Change/
2007
2006
% Point Change
% Change
$
22,489
$
19,069
$
3,420
17.9
(42,200
)
(35,305
)
(6,895
)
19.5
4,136
(2,088
)
6,224
(298.1
)
$
(15,575
)
$
(18,324
)
$
2,749
(15.0
)
(0.5
)
(0.6
)
0.1
$
(8,365
)
$
(6,452
)
$
(1,913
)
29.6
Year ended December 31,
$ Change/
2007
2006
% Point Change
% Change
$
44,941
$
108,922
$
(63,981
)
(58.7
)
1.5
3.7
(2.2
)
44.3
%
32.7
%
11.6
Year ended December 31,
$ Change/
2007
2006
% Point Change
% Change
$
(5,400
)
$
(4,370
)
$
(1,030
)
23.6
(0.2
)
(0.1
)
(0.1
)
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RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Year ended December 31,
$ Change/
2007
2006
% Point Change
% Change
$
39,541
$
104,552
$
(65,011
)
(62.2
)
1.3
3.6
(2.3
)
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RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Year ended December 31,
2008
2007
2006
$
284,691
150,260
$
232,926
(142,484
)
(80,370)
(171,324
)
(87,689
)
(135,276)
(23,774
)
(19,416
)
17,752
5,747
$
35,102
$
(47,634)
$
43,575
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RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Payment Due by period
Less Than
More Than
Total
1 Year
1-3 Years
3-5 Years
5 Years
$
218,582
$
66,058
$
89,679
$
38,200
$
24,645
11,900
11,900
605,184
10,596
294,588
75,000
225,000
156,519
29,414
41,192
37,818
48,095
19,488
11,403
8,085
$
1,011,673
$
117,471
$
433,544
$
151,018
$
309,640
(1)
Amounts represent estimated
contractual interest payments on outstanding bonds and notes
payable. Rates in effect as of December 31, 2008 are used
for variable rate debt.
Table of Contents
RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Table of Contents
RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Table of Contents
RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Table of Contents
RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
December 31,
2008
2007
9.00
%
7.57
%
4.20
%
5.00
%
2099
2014
One-Percentage-
One-Percentage-
Point Increase
Point Decrease
$
80
$
(72
)
$
1,118
$
(1,009
)
Table of Contents
RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
Table of Contents
RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
the results of the SEC and DOJ investigations;
competitive pressures, including pricing pressures and
technological developments;
changes in the Companys 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 Companys operations, including
Brazil, where a significant portion of the Companys
revenue is derived;
the effects of the sub-prime mortgage crisis and the disruptions
in the financial markets, including the 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 Companys product and technology
introductions in the marketplace;
the amount of cash and non-cash charges in connection with the
planned closure of the Companys Newark, Ohio facility, and
the closure of the Companys EMEA-based enterprise security
operations;
unanticipated litigation, claims or assessments;
variations in consumer demand for financial self-service
technologies, products and services;
Table of Contents
RESULTS OF OPERATIONS as of December 31, 2008
(Continued)
(Unaudited)
(in thousands, except per share amounts)
challenges raised about reliability and security of the
Companys election systems products, including the risk
that such products will not be certified for use or will be
decertified;
changes in laws regarding the Companys election systems
products and services;
potential security violations to the Companys information
technology systems;
the investment performance of our pension plan assets, which
could require us to increase our pension contributions;
the Companys ability to successfully execute its strategy
related to the elections systems business
the Companys ability to achieve benefits from its
cost-reduction initiatives and other strategic changes; and
the risk factors described above under Item 1A. Risk
Factors.
ITEM 7A:
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Table of Contents
42
45
46
47
48
49
98
Table of Contents
Diebold, Incorporated:
Table of Contents
Diebold, Incorporated:
Table of Contents
Table of Contents
December 31,
2008
2007
$
241,436
$
206,334
121,387
104,976
447,079
494,911
540,971
533,619
95,086
80,443
42,909
46,347
125,250
127,500
1,614,118
1,594,130
70,914
75,227
579,951
575,796
376,357
355,740
203,594
220,056
408,303
465,484
69,698
171,309
239,827
$
2,537,936
$
2,594,724
$
10,596
$
14,807
195,483
170,632
195,164
251,657
75,215
76,995
258,939
186,956
735,397
701,047
594,588
609,264
131,792
36,708
32,857
29,417
35,307
39,393
43,737
50,304
17,657
13,757
94,752
94,474
278,135
261,364
1,054,873
1,036,824
(408,235
)
(406,182
)
(72,924
)
128,354
946,601
1,114,834
$
2,537,936
$
2,594,724
Table of Contents
Year Ended December 31,
2008
2007
2006
$
1,562,948
$
1,429,646
$
1,500,998
1,607,132
1,517,835
1,419,976
3,170,080
2,947,481
2,920,974
1,145,225
1,070,286
1,057,375
1,230,239
1,195,286
1,128,428
2,375,464
2,265,572
2,185,803
794,616
681,909
735,171
534,486
463,354
457,267
79,070
73,950
71,625
4,376
46,319
19,337
403
(6,392
)
328
618,335
577,231
548,557
176,281
104,678
186,614
25,228
22,489
19,069
(45,247
)
(42,200
)
(35,305
)
(8,887
)
4,136
(2,088
)
(8,413
)
(8,365
)
(6,452
)
138,962
80,738
161,838
37,425
35,797
52,916
101,537
44,941
108,922
(12,954
)
(5,400
)
(4,370
)
$
88,583
$
39,541
$
104,552
66,081
65,841
66,669
66,492
66,673
67,253
$
1.54
$
0.68
$
1.63
$
(0.20
)
$
(0.08
)
$
(0.06
)
$
1.34
$
0.60
$
1.57
$
1.52
$
0.67
$
1.62
$
(0.19
)
$
(0.08
)
$
(0.07
)
$
1.33
$
0.59
$
1.55
Table of Contents
Accumulated
Other
Common Shares
Additional
Retained
Treasury
Comprehensive
Comprehensive
Number
Par Value
Capital
Earnings
Shares
(Loss) Income
(Loss) Income
Other
Total
Balance, January 1, 2006
74,726,031
$
93,408
$
198,619
$
1,013,137
$
(256,336
)
$
(3,781
)
$
(287
)
$
1,044,760
104,552
$
104,552
104,552
50,246
50,246
2,428
2,428
(637
)
(637
)
52,037
52,037
$
156,589
336,085
420
10,703
11,123
4,635
6
(6
)
5,800
7
(7
)
73,111
91
1,881
1,972
1,198
1,198
4,807
287
5,094
(35,624
)
(35,624
)
17,195
17,195
816
2,592
3,408
36
905
941
(57,964
)
(57,964
)
(150,259
)
(150,259
)
75,145,662
$
93,932
$
235,242
$
1,059,725
$
(403,098
)
$
12,632
$
$
998,433
39,541
$
39,541
39,541
88,508
88,508
(1,962
)
(1,962
)
29,176
29,176
115,722
115,722
$
155,263
241,365
302
8,252
8,554
8,620
11
295
306
84,865
106
(106
)
98,725
123
2,500
2,623
1,399
1,399
13,782
13,782
(62,442
)
(62,442
)
(3,084
)
(3,084
)
75,579,237
$
94,474
$
261,364
$
1,036,824
$
(406,182
)
$
128,354
$
$
1,114,834
(1,387
)
(1,387
)
(2,584
)
(2,584
)
88,583
$
88,583
88,583
(99,689
)
(99,689
)
(4,910
)
(4,910
)
(96,679
)
(96,679
)
(201,278
)
(201,278
)
$
(112,695
)
665
1
16
17
121,985
152
5,861
6,013
49,526
62
(62
)
50,021
63
719
782
(2,122
)
(2,122
)
12,189
12,189
170
230
400
(66,563
)
(66,563
)
(2,283
)
(2,283
)
75,801,434
$
94,752
$
278,135
$
1,054,873
$
(408,235
)
$
(72,924
)
$
$
946,601
Table of Contents
Year Ended December 31,
2008
2007
2006
$
88,583
$
39,541
$
104,552
12,954
5,400
4,370
8,413
8,365
6,452
80,470
69,397
70,726
12,189
13,782
17,195
(168
)
(917
)
(890
)
(12,547
)
(7,250
)
(23,592
)
4,376
46,319
19,337
403
(6,392
)
328
10,633
120,949
46,109
(53,650
)
8,955
(4,258
)
1,183
(10,256
)
(13,323
)
(14,706
)
(20,055
)
(1,493
)
36,480
6,331
(36,031
)
(49,668
)
(89,921
)
33,691
(2,900
)
(20,802
)
14,038
162,646
(13,186
)
(4,285
)
284,691
150,260
232,926
(4,461
)
(18,122
)
(74,320
)
303,410
57,433
79,304
(357,091
)
(50,588
)
(124,648
)
42
3,242
6,442
(57,932
)
(43,259
)
(38,514
)
(26,452
)
(29,076
)
(19,588
)
(142,484
)
(80,370
)
(171,324
)
(66,563
)
(62,442
)
(57,964
)
606,269
720,299
1,664,986
(624,040
)
(784,358
)
(1,492,658
)
(3,523
)
(18,236
)
(716
)
168
917
890
8,544
9,745
(148,057
)
(87,689
)
(135,276
)
(23,774
)
(19,416
)
17,752
5,747
35,102
(47,634
)
43,575
206,334
253,968
210,393
$
241,436
$
206,334
$
253,968
$
42,154
$
53,176
$
43,065
$
30,747
$
32,706
$
33,235
Table of Contents
FORM 10-K
as of December 31, 2008
(in thousands, except per share amounts)
NOTE 1:
SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
DNA
DI
ES & Other
Total
$
99,799
$
314,176
$
45,379
$
459,354
10,556
1,472
940
12,968
(46,319
)
(46,319
)
1,444
38,037
39,481
111,799
353,685
465,484
4,320
758
5,078
(13,171
)
(13,171
)
(6,583
)
(42,505
)
(49,088
)
$
96,365
$
311,938
$
$
408,303
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Year Ended December 31,
2008
2007
2006
$
38,319
$
138,008
$
49,500
(2,877
)
2,033
3,995
(108,366
)
(11,687
)
(40,863
)
$
(72,924
)
$
128,354
$
12,632
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
NOTE 2:
EARNINGS PER
SHARE
December 31,
2008
2007
2006
$
101,537
$
44,941
$
108,922
(12,954
)
(5,400
)
(4,370
)
$
88,583
$
39,541
$
104,552
66,081
65,841
66,669
411
832
584
66,492
66,673
67,253
$
1.54
$
0.68
$
1.63
(0.20
)
(0.08
)
(0.06
)
$
1.34
$
0.60
$
1.57
$
1.52
$
0.67
$
1.62
(0.19
)
(0.08
)
(0.07
)
$
1.33
$
0.59
$
1.55
2,469
1,141
976
NOTE 3:
SHARE-BASED
COMPENSATION AND EQUITY
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
December 31,
2008
2007
2006
5-7
6
3-6
27
%
28
%
33
%
2.71 3.14
%
3.64 4.72
%
4.55 5.11
%
1.97 1.86
%
1.63
%
1.58 1.63
%
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
December 31,
2008
2007
2006
$
3,371
$
4,908
$
7,242
(1,247
)
(1,816
)
(2,680
)
$
2,124
$
3,092
$
4,562
$
3,683
$
3,827
$
5,075
(1,363
)
(1,416
)
(1,878
)
$
2,320
$
2,411
$
3,197
$
7
$
93
$
188
(3
)
(34
)
(70
)
$
4
$
59
$
118
$
4,267
$
4,383
$
4,690
(1,579
)
(1,622
)
(1,735
)
$
2,688
$
2,761
$
2,955
$
861
$
571
$
(319
)
(211
)
$
542
$
360
$
$
12,189
$
13,782
$
17,195
(4,511
)
(5,099
)
(6,363
)
$
7,678
$
8,683
$
10,832
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Weighted-Average
Weighted-Average
Remaining
Aggregate Intrinsic
Number of Shares
Exercise Price
Contractual Term
Value(1)
(per share)
(in years)
2,884
$
41.56
(291
)
$
44.47
336
$
25.53
2,929
$
39.43
5
$
1,344
2,166
$
40.60
4
$
498
(1)
The aggregate intrinsic value
represents the total pre-tax intrinsic value (the difference
between the Companys closing stock price on the last
trading day of the year in 2008 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 December 31,
2008. The amount of aggregate intrinsic value will change based
on the fair market value of the Companys common stock.
Weighted-Average
Grant-Date Fair
Number of Shares
Value
(per share)
325
$
45.14
(22
)
40.61
(48
)
54.55
134
28.13
389
$
38.36
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Weighted-Average
Grant-Date Fair
Number of Shares
Value
(per share)
519
$
54.49
(131
)
55.89
(15
)
57.08
232
28.91
605
$
44.31
Year Ended December 31,
2008
2007
2006
$
(4,837
)
$
(21,415
)
$
50,808
143,799
102,153
111,030
$
138,962
$
80,738
$
161,838
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Year Ended December 31,
2008
2007
2006
$
21,073
$
8,021
$
14,886
38,441
30,862
33,863
4,560
1,527
5,623
$
64,074
$
40,410
$
54,372
$
(27,172
)
$
(9,500
)
$
(75
)
45
2,298
(671
)
478
2,589
(710
)
$
(26,649
)
$
(4,613
)
$
(1,456
)
$
37,425
$
35,797
$
52,916
Year Ended December 31,
2008
2007
2006
35.0
%
35.0
%
35.0
%
2.3
2.4
2.3
(6.9
)
0.9
(2.4
)
4.6
0.1
0.1
(4.3
)
(4.6
)
1.0
(1.1
)
(11.0
)
(2.7
)
20.0
(2.7
)
1.5
(0.6
)
26.9
%
44.3
%
32.7
%
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
2007
$
10,714
$
9,020
531
(1,381
)
(1,231
)
1,539
4,631
(2,368
)
(1,706
)
(26
)
$
9,009
$
10,714
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
December 31,
2008
2007
$
7,799
$
7,663
31,303
20,352
12,012
5,287
16,984
17,488
7,916
10,988
18,575
14,454
19,144
20,974
41,935
(6,533
)
3,170
20,550
16,299
114,902
89,083
12,329
6,597
10,160
10,218
316,779
212,870
(97,188
)
(85,429
)
$
219,591
$
127,441
15,287
5,615
47,193
55,447
6,660
6,828
4,310
3,558
15,445
13,084
1,219
1,859
90,114
86,391
$
129,477
$
41,050
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
December 31,
2008
2007
$
62,934
$
61,171
7,984
13,492
117,026
104,976
4,357
564
$
192,301
$
180,203
December 31,
2008
2007
$
47,885
$
40,157
4,558
2,594
52,443
42,751
(5,164
)
(3,406
)
(1,133
)
(649
)
(6,297
)
(4,055
)
$
46,146
$
38,696
(1)
Finance receivables include $7,971
and $11,655 for the years ended December 31, 2008 and 2007,
respectively, of receivables owned by Diebold OLTP Systems. The
company owns fifty-percent of Diebold OLTP Systems, which is
consolidated.
Sales
Type Leases
$
13,257
17,665
8,252
5,761
2,473
477
$
47,885
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
December 31,
2008
2007
$
276,439
$
252,729
144,742
152,039
54,752
64,414
65,038
64,437
$
540,971
$
533,619
Estimated
Useful Life
December 31,
(years)
2008
2007
0-15
$
6,178
$
6,230
15
59,230
57,809
5-12
107,918
103,359
10
20,811
19,201
3-5
75,869
87,984
5-10
150,387
137,509
5-8
72,486
73,531
3-5
76,228
73,320
10,844
16,853
579,951
575,796
376,357
355,740
$
203,594
$
220,056
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
December 31,
2008
2007
$
8,084
$
7,473
2,512
7,334
$
10,596
$
14,807
$
49,588
$
99,264
245,000
210,000
300,000
300,000
$
594,588
$
609,264
$
605,184
$
624,071
(1)
Indian rupees (INR) 394,519
borrowings translated at the applicable December 31, 2008
spot rate; INR 177,390 borrowing translated at the applicable
December 31, 2007 spot rate.
(2)
35,476 borrowing translated
at the applicable December 31, 2008 spot rate; 68,045
borrowing translated at the applicable December 31, 2007
spot rate.
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
December 31,
2008
2007
$
4,400
$
4,400
7,500
7,500
$
11,900
$
11,900
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Pension Benefits
Other Benefits
December 31,
December 31,
2008
2007
2008
2007
$
435,070
$
426,791
$
19,972
$
23,395
12,335
11,429
3
6
35,046
25,592
1,526
1,358
276
937
(11,674
)
(46
)
(2,531
)
159
206
(22,185
)
(17,011
)
(3,278
)
(2,462
)
(39
)
(514
)
(33
)
181
235
$
461,131
$
435,070
$
18,571
$
19,972
$
453,085
$
397,766
$
$
(111,040
)
60,900
7,473
11,430
3,119
2,256
159
206
(22,185
)
(17,011
)
(3,278
)
(2,462
)
$
327,333
$
453,085
$
$
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Pension Benefits
Other Benefits
December 31,
December 31,
2008
2007
2008
2007
$
(133,798
)
$
18,015
$
(18,571
)
$
(19,972
)
168,246
12,739
5,779
6,375
1,915
2,433
(3,001
)
(3,647
)
$
36,363
$
33,187
$
(15,793
)
$
(17,244
)
$
$
57,917
$
$
(2,725
)
(2,690
)
(1,931
)
(2,191
)
(131,073
)
(37,212
)
(16,640
)
(17,781
)
170,161
15,172
2,778
2,728
$
36,363
$
33,187
$
(15,793
)
$
(17,244
)
(1)
Included in the Consolidated
Balance Sheets in Pensions and other benefits and Postretirement
and other benefits are international benefit liabilities.
Pension Benefits
Other Benefits
December 31,
December 31,
2008
2007
2006
2008
2007
2006
$
9,839
$
11,429
$
11,179
$
2
$
6
$
8
28,046
25,592
23,045
1,221
1,358
1,294
(35,747
)
(33,008
)
(30,995
)
381
614
765
(517
)
(516
)
(532
)
804
4,033
4,552
432
731
792
(74
)
(52
)
(489
)
$
3,271
$
8,171
$
8,546
$
1,138
$
1,579
$
1,488
(1)
The annual amortization of pension
benefits prior service costs is determined as the increase in
projected benefit obligation due to the plan change divided by
the average remaining service period of participating employees
expected to receive benefits under the plan.
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
December 31,
2008
2007
$
461,131
$
39,901
415,648
37,562
327,333
Pension Benefits
Other Benefits
December 31,
December 31,
2008
2007
2008
2007
6.41
%
6.50
%
6.41
%
6.50
%
3.25
%
3.50
%
Pension Benefits
Other Benefits
December 31,
December 31,
2008
2007
2008
2007
6.63
%
6.13
%
6.63
%
6.13
%
8.50
%
8.75
%
3.50
%
3.00
%
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
December 31,
2008
2007
9.00
%
7.57
%
4.20
%
5.00
%
2099
2014
One-Percentage-
One-Percentage-
Point Increase
Point Decrease
$
80
$
(72
)
$
1,118
$
(1,009
)
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Target
Percentage of Pension Plan,
Allocation
Assets at December 31,
Asset Category
2009
2008
2007
50
%
50
%
62
%
35
%
40
%
32
%
5
%
0
%
0
%
10
%
10
%
6
%
100
%
100
%
100
%
Pension
Other
Benefits
Benefits
$
271
$
(517
)
3,345
442
Other Benefits
before
Other Benefits
Pension
Medicare
after Medicare
Benefit Payments
Benefits
Part D Subsidy
Part D Subsidy
$
18,861
$
2,251
$
1,993
20,169
2,199
1,936
21,556
2,193
1,934
23,467
2,146
1,890
25,244
2,091
1,842
156,353
9,240
8,170
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Year
Total
Real Estate
Equipment
$
66,058
$
24,465
$
41,593
52,050
21,416
30,634
37,629
17,665
19,964
23,261
14,478
8,783
14,939
12,443
2,496
24,645
24,645
$
218,582
$
115,112
$
103,470
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
December 31,
2008
2007
$
26,494
$
22,511
49,689
33,463
(33,174
)
(29,480
)
$
43,009
$
26,494
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
NOTE 16:
DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
$
1,670
(4,278
)
(269
)
$
(2,877
)
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Year Ended December 31,
2008
2007
2006
$
3,247
$
19,977
$
6,024
3,224
21,222
9,125
12,474
1,954
391
14,503
$
41,572
$
23,592
$
26,977
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
DNA
DI
$
$
18,889
886
10,608
$
886
$
29,497
(6,438
)
$
886
$
23,059
$
$
1,644
886
717
$
886
$
2,361
$
$
18,524
886
10,252
$
886
$
28,776
(6,438
)
$
886
$
22,338
(1)
Other costs include legal and
contract termination fees, asset impairment costs, and costs to
transfer usable inventory and equipment.
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
DNA
DI
$
$
3,657
466
5,125
$
466
$
8,782
$
$
2,638
466
2,920
$
466
$
5,558
$
$
3,657
466
5,125
$
466
$
8,782
(1)
Other costs include consulting and
legal fees, contract termination fees and asset impairment costs
DNA
DI
ES & Other
$
4,616
$
13,390
$
663
3,951
$
4,616
$
17,341
$
663
$
4,616
$
13,390
$
663
2,553
$
4,616
$
15,943
$
663
$
4,616
$
13,390
$
663
2,553
$
4,616
$
15,943
$
663
(1)
Other costs include legal fees,
contract termination fees and asset impairment costs
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Balance
Liabilities
Liabilities
Balance
January 1, 2008
Incurred
Paid/Settled
Dec 31, 2008
$
$
18,669
$
10,964
$
7,705
2,553
571
1,982
$
$
21,222
$
11,535
$
9,687
DNA
$
1,318
9,107
$
10,425
$
968
8,157
$
9,125
$
968
8,157
$
9,125
(1)
Other costs include pension
obligation.
Balance
Liabilities
Liabilities
Balance
January 1, 2008
Incurred
Paid/Settled
Dec 31, 2008
$
$
968
$
366
$
602
8,157
1,422
6,735
$
$
9,125
$
1,788
$
7,337
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Level 1 Unadjusted quoted prices in active
markets for identical assets or liabilities.
Level 2 Unadjusted quoted prices in active
markets for similar assets or liabilities, unadjusted quoted
prices for identical or similar assets or liabilities in markets
that are not active or inputs, other than quoted prices in
active markets, that are observable either directly or
indirectly.
Level 3 Unobservable inputs for which there is
little or no market data.
Market approach Prices and other relevant
information generated by market transactions involving identical
or comparable assets or liabilities.
Cost approach Amount that would be required to
replace the service capacity of an asset (replacement cost).
Income approach Techniques to convert future amounts
to a single present amount based upon market expectations.
Fair Value Measurements at
Reporting Date Using
Quoted Prices in
Significant
Active Markets
Other
Fair Value as of
for Identical
Observable
December 31,
Assets
Inputs
2008
(Level 1)
(Level 2)
$
117,026
$
117,026
$
4,361
4,361
7,984
7,984
$
129,371
$
125,010
$
4,361
$
1,350
$
$
1,350
5,228
5,228
$
6,578
$
$
6,578
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
DNA
DI
ES & Other
Total
$
1,535,989
$
1,479,983
$
154,108
$
3,170,080
86,936
85,305
4,040
176,281
23,232
33,126
1,574
57,932
23,768
28,445
3,082
55,295
426,818
139,142
13,991
579,951
1,197,572
1,258,206
82,158
2,537,936
$
1,543,055
$
1,340,723
$
63,703
$
2,947,481
112,990
52,578
(60,890
)
104,678
13,569
26,348
3,342
43,259
26,612
18,015
922
45,549
415,798
147,141
12,857
575,796
1,167,782
1,333,815
93,127
2,594,724
$
1,519,669
$
1,168,014
$
233,291
$
2,920,974
119,786
26,604
40,224
186,614
18,354
17,785
2,375
38,514
28,634
16,256
805
45,695
398,010
147,079
5,408
550,497
1,117,286
1,245,117
198,114
2,560,517
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
December 31,
2008
2007
2006
$
2,299,588
$
2,115,293
$
2,187,256
400,558
337,844
290,934
469,934
494,344
442,784
$
3,170,080
$
2,947,481
$
2,920,974
$
1,603,963
$
1,417,574
$
1,354,878
50.6
%
48.1
%
46.4
%
1,566,117
1,529,907
1,566,096
49.4
%
51.9
%
53.6
%
$
3,170,080
$
2,947,481
$
2,920,974
$
1,127,120
$
1,050,960
$
995,422
1,113,450
1,020,154
943,206
2,240,570
2,071,114
1,938,628
319,493
345,841
322,953
455,909
466,823
426,102
775,402
812,664
749,055
3,015,972
2,883,778
2,687,683
154,108
63,703
233,291
$
3,170,080
$
2,947,481
$
2,920,974
Table of Contents
FORM 10-K
as of December 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share amounts)
Year Ended December 31,
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2008
2007
2008
2007
2008
2007
2008
2007
$
691,908
$
641,201
$
768,677
$
689,782
$
886,532
$
736,459
$
822,963
$
880,039
172,361
129,117
192,955
163,294
232,982
176,262
196,318
213,236
14,403
2,193
29,242
20,605
47,447
29,018
10,445
(6,875
)
(608
)
(559
)
(2,028
)
(787
)
(931
)
(869
)
(9,387
)
(3,185
)
$
13,795
$
1,634
$
27,214
$
19,818
$
46,516
$
28,149
$
1,058
$
(10,060
)
$
0.22
$
0.03
$
0.44
$
0.31
$
0.72
$
0.44
$
0.16
$
(0.10
)
(0.01
)
(0.01
)
(0.03
)
(0.01
)
(0.02
)
(0.01
)
(0.14
)
(0.05
)
$
0.21
$
0.02
$
0.41
$
0.30
$
0.70
$
0.43
$
0.02
$
(0.15
)
$
0.22
$
0.03
$
0.44
$
0.31
$
0.71
$
0.43
$
0.15
$
(0.10
)
(0.01
)
(0.01
)
(0.03
)
(0.01
)
(0.01
)
(0.01
)
(0.14
)
(0.05
)
$
0.21
$
0.02
$
0.41
$
0.30
$
0.70
$
0.42
$
0.01
$
(0.15
)
66,018
65,673
66,101
65,793
66,101
65,926
66,106
65,966
66,306
66,468
66,765
66,829
66,758
66,985
66,651
66,513
Table of Contents
ITEM 9:
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
A)
DISCLOSURE
CONTROLS AND PROCEDURES
B)
MANAGEMENTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Table of Contents
pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company;
provide reasonable assurance that transactions are recorded as
necessary to permit preparation of Consolidated Financial
Statements in accordance with US GAAP;
provide reasonable assurance that receipts and expenditures of
the Company are being made only in accordance with appropriate
authorization of management and the board of directors; and
provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the
Companys assets that could have a material effect on the
Consolidated Financial Statements.
Table of Contents
C)
CHANGES IN
INTERNAL CONTROL OVER FINANCIAL REPORTING
Table of Contents
D)
REMEDIATION STEPS
TO ADDRESS MATERIAL WEAKNESSES
Table of Contents
Table of Contents
ITEM 10:
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Name, Age, Title and Year Elected to Present Office
Other Positions Held Last Five Years
President and Chief Executive Officer
Year elected: 2005
Oct-Dec 2005:
President and Chief Operating Officer;
2001-2005:
Senior Vice President, Financial Self-Service
Group
Executive Vice President and Chief Financial Officer
Year elected: 2006
2005-2006:
Vice President and Chief Financial Officer;
2001-2005:
Vice President and Corporate Controller
Executive Vice President, Global Operations
Year elected: 2008
2006-Apr 2008:
Senior Vice President, Supply Chain
Management;
2005-2006:
Vice President, Global Supply
Chain Management;
2002-2004:
Chief Operating Officer,
Tinnerman Palnut Engineered Products, Inc.
Senior Vice President, Customer Solutions Group
Year elected: 2001
Senior Vice President, EMEA/AP Divisions
Year elected: 2007
2006-Feb 2007:
Vice President, EMEA/AP Divisions;
1998-2006:
Vice President and Managing Director
Asia/Pacific
Senior Vice President, Global Development and Services
Year elected: 2006
2005-Jan 2006:
Vice President, Global Development and
Services;
2001-2005:
Vice President, Customer Service
Solutions Diebold North America
Senior Vice President, Global Security Division
Year elected: 2006
2001-2006:
Vice President, Global Security Division
Vice President and General Counsel
Year elected: 2008
Dec 2004-Apr 2008:
Vice President, General Counsel and
Secretary;
1987-2004:
Vice President and General Counsel
Vice President and Chief Information Officer
Year elected: 2007
Dec 2006-Sept 2007:
Vice President, Information
Technology;
Mar-Dec 2006:
Vice President, Information
Technology, SPX Corp. Test & Measurement Group;
2005-2006:
Corporate Director IT Planning &
Governance, Dana Corp.;
2002-2005:
Heavy Vehicle
Group SBU IT Director/Division CIO, Dana Corp.
Corporate Counsel and Secretary
Year elected: 2008
2004-Apr 2008:
Corporate Counsel and Assistant Secretary;
2002-2004:
Associate Attorney, Hahn, Loeser & Parks
LLP
Vice President, Chief Tax Officer
Year elected: 2006
Jan-Apr 2006:
Vice President, Tax;
2004-Jan 2006:
Senior Tax Director;
2003-2004:
Director, Tax
Vice President, Chief Communications Officer
Year elected: 2006
2005-2006:
Vice President, Corporate Communications and
Investor Relations;
2004-2005:
Vice President, Investor
Relations;
2001-2004:
Director, Global Communications
Vice President and Treasurer
Year elected: 2007
2000-2007:
Vice President and Assistant Treasurer
Table of Contents
Name, Age, Title and Year Elected to Present Office
Other Positions Held Last Five Years
Vice President and Corporate Controller
Year elected: 2007
Mar 2006-May 2007:
Vice President, Accounting, Compliance
and External Reporting;
1999-Mar 2006:
Manager, Special
Projects
Vice President, Chief Human Resources Officer
Year elected: 2005
2002-2005:
Vice President, Global Human Resources
Vice President, Corporate Development and Finance
Year elected: 2007
1990-Jul 2007:
Vice President and Treasurer
ITEM 11:
EXECUTIVE
COMPENSATION
ITEM 12:
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
ITEM 13:
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
ITEM 14:
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
Table of Contents
ITEM 15:
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
Consolidated Balance Sheets at December 31, 2008 and 2007
Consolidated Statements of Income for the Years Ended
December 31, 2008, 2007 and 2006
Consolidated Statements of Shareholders Equity for the
Years Ended December 31, 2008, 2007 and 2006
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2008, 2007 and 2006
Notes to Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm, and
Valuation and Qualifying Accounts.
3
.1(i)
Amended and Restated Articles of Incorporation of Diebold,
Incorporated incorporated by reference to
Exhibit 3.1(i) to Registrants 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
Registrants Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2007 of Diebold,
Incorporated (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 Registrants
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 Registrants
Form 10-K
for the year ended December 31, 1998 (Commission File
No. 1-4879)
4
.1
Rights Agreement dated as of February 11, 1999 between
Diebold, Incorporated and The Bank of New York
incorporated by reference to Exhibit 4.1 to
Registrants Registration Statement on
Form 8-A,
filed on February 2, 1999 (Commission File
No. 1-4879)
*
10
.1
Form of Amended and Restated Employment Agreement
*10
.5(i)
Supplemental Employee Retirement Plan I as amended and restated
January 1, 2008
*
10
.5(ii)
Supplemental Employee Retirement Plan II as amended and
restated July 1, 2002 incorporated by reference
to Exhibit 10.5(ii) to Registrants
Form 10-Q
for the quarter ended September 30, 2002 (Commission File
No. 1-4879)
*10
.5(iii)
Pension Restoration Supplemental Executive Retirement Plan
*10
.5(iv)
Pension Supplemental Executive Retirement Plan
*10
.5(v)
401(k) Restoration Supplemental Executive Retirement Plan
*10
.5(vi)
401(k) Supplemental Executive Retirement Plan
*
10
.7(i)
1985 Deferred Compensation Plan for Directors of Diebold,
Incorporated incorporated by reference to
Exhibit 10.7 to Registrants Annual Report on
Form 10-K
for the year ended December 31, 1992 (Commission File
No. 1-4879)
*
10
.7(ii)
Amendment No. 1 to the Amended and Restated 1985 Deferred
Compensation Plan for Directors of Diebold,
Incorporated incorporated by reference to
Exhibit 10.7 (ii) to Registrants
Form 10-Q
for the quarter ended March 31, 1998 (Commission File
No. 1-4879)
*
10
.7(iii)
Amendment No. 2 to the Amended and Restated 1985 Deferred
Compensation Plan for Directors of Diebold,
Incorporated incorporated by reference to
Exhibit 10.7 (ii) to Registrants
Form 10-Q
for the quarter ended March 31, 2003 (Commission File
No. 1-4879)
Table of Contents
*10
.7(iv)
Deferred Compensation Plan No. 2 for Directors of Diebold,
Incorporated
*
10
.8(i)
1991 Equity and Performance Incentive Plan as Amended and
Restated as of February 7, 2001 incorporated by
reference to Exhibit 4(a) to
Form S-8
Registration Statement
No. 333-60578
*
10
.8(ii)
Amendment No. 1 to the 1991 Equity and Performance
Incentive Plan as Amended and Restated as of February 7,
2001 incorporated by reference to Exhibit 10.8
(ii) to Registrants
Form 10-Q
for the quarter ended March 31, 2004 (Commission File
No. 1-4879)
*
10
.8(iii)
Amendment No. 2 to the 1991 Equity and Performance
Incentive Plan as Amended and Restated as of February 7,
2001 incorporated by reference to Exhibit 10.8
(iii) to Registrants
Form 10-Q
for the quarter ended March 31, 2004 (Commission File
No. 1-4879)
*
10
.8(iv)
Amendment No. 3 to the 1991 Equity and Performance
Incentive Plan as Amended and Restated as of February 7,
2001 incorporated by reference to Exhibit 10.8
(iv) to Registrants
Form 10-Q
for the quarter ended June 30, 2004 (Commission File
No. 1-4879)
*
10
.9
Long-Term Executive Incentive Plan incorporated by
reference to Exhibit 10.9 to Registrants Annual
Report on
Form 10-K
for the year ended December 31, 1993 (Commission File
No. 1-4879)
*10
.10
Deferred Incentive Compensation Plan No. 2
*10
.11
Annual Incentive Plan incorporated by reference to
Exhibit 10.11 to Registrants Annual Report on
Form 10-K
for the year ended December 31, 2000 (Commission File
No. 1-4879)
*
10
.13(i)
Forms of Deferred Compensation Agreement and Amendment
No. 1 to Deferred Compensation Agreement
incorporated by reference to Exhibit 10.13 to
Registrants Annual Report on
Form 10-K
for the year ended December 31, 1996 (Commission File
No. 1-4879)
*10
.13(ii)
Section 162(m) Deferred Compensation Agreement (as amended
and restated January 29, 1998) incorporated by
reference to Exhibit 10.13 (ii) to Registrants
Form 10-Q
for the quarter ended March 31, 1998 (Commission File
No. 1-4879)
*10
.14
Deferral of Stock Option Gains Plan incorporated by
reference to Exhibit 10.14 to the Registrants Annual
Report on
Form 10-K
for the year ended December 31, 1998 (Commission File
No. 1-4879)
10
.17(i)
Amended and Restated Loan Agreement dated as of April 30,
2003 among Diebold, Incorporated, the Subsidiary Borrowers, the
Lenders and Bank One, N.A. incorporated by reference
to Exhibit 10.17 to Registrants
Form 10-Q
for the quarter ended June 30, 2003 (Commission File
No. 1-4879)
10
.17(ii)
First Amendment to Loan Agreement, dated as of April 28,
2004 among Diebold, Incorporated, the Subsidiary Borrowers, the
Lenders and Bank One, N.A. incorporated by reference
to Exhibit 10.17 (ii) to Registrants
Form 10-Q
for the quarter ended June 30, 2004 (Commission File
No. 1-4879)
10
.17(iii)
Second Amendment to Loan Agreement, dated as of April 27,
2005 among Diebold, Incorporated, the Subsidiary Borrowers, the
Lenders and JPMorgan Chase Bank N.A. (successor by merger to
Bank One, N.A.) incorporated by reference to
Exhibit 10.1 to Registrants
Form 8-K
filed on May 3, 2005 (Commission File
No. 1-4879)
10
.17(iv)
Third Amendment to Loan Agreement, dated as of November 16,
2005 among Diebold, Incorporated, the Subsidiary Borrowers, the
Lenders and JPMorgan Chase Bank N.A. (successor by merger to
Bank One, N.A.) incorporated by reference to
Exhibit 10.1 to Registrants
Form 8-K
filed on November 22, 2005 (Commission File
No. 1-4879)
10
.17(v)
Fourth Amendment to Loan Agreement, dated November 27, 2006
among Diebold, Incorporated, the Subsidiary Borrowers, the
Lenders and JPMorgan Chase Bank N.A. incorporated by
reference to Exhibit 10.17(v) to Registrants
Form 10-K
for the year ended December 31, 2006. (successor by merger
to Bank One, N.A.) (Commission File
No. 1-4879)
10
.20(i)
Transfer and Administration Agreement, dated as of
March 30, 2001 by and among DCC Funding LLC, Diebold Credit
Corporation, Diebold, Incorporated, Receivables Capital
Corporation and Bank of America, National Association and the
financial institutions from time to time parties
thereto incorporated by reference to
Exhibit 10.20(i) to Registrants
Form 10-Q
for the quarter ended March 31, 2001 (Commission File
No. 1-4879)
10
.20(ii)
Amendment No. 1 to the Transfer and Administration
Agreement, dated as of May 2001, by and among DCC Funding LLC,
Diebold Credit Corporation, Diebold, Incorporated, Receivables
Capital Corporation and Bank of America, National Association
and the financial institutions from time to time parties
thereto incorporated by reference to
Exhibit 10.20 (ii) to Registrants
Form 10-Q
for the quarter ended March, 31, 2001 (Commission File
No. 1-4879)
*10
.22
Form of Non-Qualified Stock Option Agreement
incorporated by reference to Exhibit 10.22 to
Registrants Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2007 (Commission File
No. 1-4879)
*10
.23
Form of Restricted Share Agreement incorporated by
reference to Exhibit 10.2 to Registrants
Form 8-K
filed on February 16, 2005 (Commission File
No. 1-4879)
*10
.24
Form of RSU Agreement
Table of Contents
*10
.25
Form of Performance Share Agreement
*10
.26
Diebold, Incorporated Annual Cash Bonus Plan
incorporated by reference to Exhibit A to Registrants
Proxy Statement on Schedule 14A filed on March 16,
2005 (Commission File
No. 1-4879)
10
.27
Form of Note Purchase Agreement incorporated by
reference to Exhibit 10.1 to Registrants
Form 8-K
filed on March 8, 2006 (Commission File
No. 1-4879)
*10
.28
Amended and Restated Employment Agreement between Diebold,
Incorporated and Thomas W. Swidarski, as amended as of
December 29, 2008
*10
.29
Amended and Restated Employment [Change in Control] Agreement
between Diebold, Incorporated and Thomas W. Swidarski, as
amended as of December 29, 2008
*10
.30
Form of Deferred Shares Agreement
21
.1
Subsidiaries of the Registrant as of December 31, 2008
23
.1
Consent of Independent Registered Public Accounting Firm
24
.1
Power of Attorney
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 Principal Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002,
18 U.S.C. Section 1350
32
.2
Certification of Principal Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002,
18 U.S.C. Section 1350
*
Reflects management contract or other compensatory arrangement
required to be filed as an exhibit pursuant to Item 15(b)
of this annual report.
(b)
Refer to this
Form 10-K
for an index of exhibits.
Table of Contents
By:
President, Chief Executive Officer and Director (Principal
Executive Officer)
February 27, 2009
Executive Vice President and Chief Financial Officer (Principal
Financial Officer)
February 27, 2009
Vice President and Corporate Controller
(Principal Accounting Officer)
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Table of Contents
Director
February 27, 2009
*
The undersigned, by signing his
name hereto, does sign and execute this Annual Report on
Form 10-K
pursuant to the Powers of Attorney executed by the above-named
officers and directors of the Registrant and filed with the
Securities and Exchange Commission on behalf of such officers
and directors.
*By:
Table of Contents
SCHEDULE II VALUATION AND
QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006
(In thousands)
Balance at
beginning of
Balance at
year
Additions
Deductions
end of year
$
33,707
$
16,336
$
24,983
$
25,060
$
32,104
$
22,425
$
20,822
$
33,707
$
28,242
$
15,853
$
11,991
$
32,104
10
.1
Form of Amended and Restated Employment Agreement
10
.5(i)
Supplemental Employee Retirement Plan I as amended and restated
January 1, 2008
10
.5(iii)
Pension Restoration Supplemental Executive Retirement Plan
10
.5(iv)
Pension Supplemental Executive Retirement Plan
10
.5(v)
401(k) Restoration Supplemental Executive Retirement Plan
10
.5(vi)
401(k) Supplemental Executive Retirement Plan
10
.7(iv)
Deferred Compensation Plan No. 2 for Directors of Diebold,
Incorporated
10
.10
Deferred Incentive Compensation Plan No. 2
10
.24
Form of RSU Agreement
10
.25
Form of Performance Share Agreement
10
.28
Amended and Restated Employment Agreement between Diebold,
Incorporated and Thomas W. Swidarski, as amended as of
December 29, 2008
10
.29
Amended and Restated Employment [Change in Control] Agreement
between Diebold, Incorporated and Thomas W. Swidarski, as
amended as of December 29, 2008
10
.30
Form of Deferred Shares Agreement
21
.1
Significant Subsidiaries of the Registrant
23
.1
Consent of Independent Registered Public Accounting Firm
24
.1
Power of Attorney
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
2
3
4
5
6
7
8
9
DIEBOLD, INCORPORATED
|
||||
By | ||||
10
Page | ||||
|
||||
ARTICLE I PLAN
|
1 | |||
ARTICLE II PURPOSE OF THE PLAN
|
1 | |||
ARTICLE III DEFINITIONS
|
1 | |||
(1) Actuarial Equivalent
|
1 | |||
(2) Affiliate
|
2 | |||
(3) Annual Compensation
|
2 | |||
(4) Beneficiary
|
2 | |||
(5) Board
|
2 | |||
(6) Change in Control
|
2 | |||
(7) Change in Control Benefit
|
2 | |||
(8) Code
|
2 | |||
(9) Committee
|
2 | |||
(10) Company
|
2 | |||
(11) Company Service
|
2 | |||
(12) Disability Benefit
|
2 | |||
(13) Early Retirement Age
|
2 | |||
(14) Early Retirement Benefit
|
2 | |||
(15) Early Retirement Date
|
3 | |||
(16) Employer
|
3 | |||
(17) 15-Year Service Benefit
|
3 | |||
(18) 50% Joint and Survivor Annuity
|
3 | |||
(19) Final Average Monthly Compensation
|
3 | |||
(20 Grandfathered Benefits
|
3 | |||
(21) Involuntary Termination Benefit
|
4 | |||
(22) Normal Retirement Benefit
|
4 | |||
(23) Normal Retirement Date
|
4 | |||
(24) 100% Joint and Survivor Annuity
|
4 | |||
(25) Participant
|
4 | |||
(26) Plan
|
4 | |||
(27) Post-Retirement Death Benefit
|
4 | |||
(28) Pre-Retirement Death Benefit
|
4 |
i
Page | ||||
(29) Qualified Retirement Plan
|
4 | |||
(30) Separation from Service
|
4 | |||
(31) Service Fraction
|
5 | |||
(32) Social Security Benefit
|
5 | |||
(33) Specified Employee
|
5 | |||
(34) Spouse
|
5 | |||
(35) Supplemental Retirement Benefit
|
5 | |||
(36) 10-Year Service Benefit
|
5 | |||
(37) Terminated For Cause
|
5 | |||
(38) Termination of Employment
|
6 | |||
(39) Total Disability
|
6 | |||
ARTICLE IV ELIGIBILITY, PARTICIPATION AND VESTING
|
7 | |||
(a) Eligibility for Participation in the Plan
|
7 | |||
(b) Eligibility for Benefits
|
7 | |||
(c) Vesting
|
7 | |||
(d) Forfeiture of Plan Benefits
|
7 | |||
ARTICLE V NORMAL RETIREMENT BENEFITS
|
8 | |||
(a) Qualification for Benefit
|
8 | |||
(b) Computation of Amount of Normal Retirement Benefit
|
8 | |||
ARTICLE VI EARLY RETIREMENT BENEFIT
|
8 | |||
(a) Qualification for Benefit
|
8 | |||
(b) Computation of Amount of Early Retirement Benefit
|
8 | |||
ARTICLE VII INVOLUNTARY TERMINATION BENEFIT
|
9 | |||
(a) Qualification for Benefit
|
9 | |||
(b) Computation of Amount of Involuntary Termination Benefit
|
9 | |||
ARTICLE VIII 10-YEAR SERVICE BENEFIT
|
10 | |||
(a) Qualification for Benefit
|
10 | |||
(b) Computation of Amount of 10-Year Service Benefit
|
10 | |||
ARTICLE IX 15-YEAR SERVICE BENEFIT
|
11 | |||
(a) Qualification for Benefit
|
11 | |||
(b) Computation of Amount of 15-Year Service Benefit
|
11 | |||
ARTICLE X DISABILITY BENEFIT
|
12 | |||
(a) Qualified for Benefit
|
12 | |||
(b) Computation of Amount of Disability Benefit
|
12 | |||
ARTICLE XI BENEFIT UPON CHANGE IN CONTROL
|
12 | |||
(a) Qualification for Benefit
|
12 | |||
(b) Change in Control
|
12 | |||
(c) Computation of Amount of Change in Control Benefit
|
14 | |||
ARTICLE XII DEATH BENEFIT
|
15 |
ii
Page | ||||
(a) Pre-Retirement
|
15 | |||
(b) Post-Retirement Death Benefit
|
15 | |||
(c) Minimum Death Benefit
|
16 | |||
ARTICLE XIII PLAN ADMINISTRATION AND CLAIMS
|
17 | |||
(a) Administration by Committee
|
17 | |||
(b) Powers of the Committee
|
17 | |||
(c) Committee Actions
|
17 | |||
(d) Claims and Review Procedure
|
17 | |||
(e) Deadline to File Claim
|
19 | |||
(f) Exhaustion of Administrative Remedies
|
19 | |||
(g) Deadline to File Legal Action
|
20 | |||
(h) Knowledge of Fact by Participant Imputed to Beneficiary
|
20 | |||
(i) Information Furnished by Participants
|
20 | |||
(j) Overpayments
|
20 | |||
ARTICLE XIV OPTIONAL FORMS AND TIMING OF BENEFITS
|
20 | |||
(a) Automatic Form of Payment
|
20 | |||
(b) Annuity Options
|
20 | |||
(c) Timing of Benefit Payments
|
21 | |||
ARTICLE XV MISCELLANEOUS
|
23 | |||
(a) Funding
|
23 | |||
(b) No Guaranty of Benefits
|
24 | |||
(c) Assignments and Restrictions
|
24 | |||
(d) Headings
|
24 | |||
(e) Employment
|
25 | |||
(f) Applicable Law
|
25 | |||
(g) Binding Effect on Employer, Participants, Spouses and Their Successors
|
25 | |||
(h) Participant Information
|
25 | |||
(i) Incapacity
|
25 | |||
(j) Code Section 409A
|
25 | |||
ARTICLE XVI AMENDMENT AND TERMINATION
|
26 | |||
(a) Amendment
|
26 | |||
(b) Termination
|
26 |
iii
(a) | The following definitions shall apply with respect to this Plan: |
(1) | Actuarially Equivalent shall mean, except where otherwise indicated, a benefit of equivalent value to the benefit it replaces calculated on the basis of the UP-1984 Mortality Table and a six and one-half percent (6 1 / 2 ) interest rate per annum, compounded annually. |
1
(2) | Affiliate shall mean any entity included with the Company in a controlled group of corporations or trades or businesses under common control within the meaning of Code §414(b) or §414(c), an affiliated service group within the meaning of Code §414(n), or any other entity required to be aggregated with the Company under Code §414(o). For all purposes under this Plan, in applying Code §1563(a)(1), (2) and (3) for purposes of determining the Companys Affiliates under Code §414(b), the language at least 80% shall be applied as it appears in those sections, and in applying Treas. Reg. §1.414(c)-2 for purposes of determining trades or business (whether or not incorporated) that are under common control for purposes of Code §414(c), the language at least 80% shall be used as it appears in such regulation. | ||
(3) | Annual Compensation shall mean a Participants base pay from an Employer for any Plan Year plus the Participants Annual Cash Bonus in the Plan Year in which it is accrued. Annual Compensation shall also include amounts paid to individuals who are citizens or residents of the United States and who are employees of, or provide services to, a foreign Affiliate of the Company to which an agreement entered into by the Company under Code Section 3121(l) applies. | ||
(4) | Beneficiary shall mean a person or entity selected by the Participant or an eligible surviving Spouse that may receive death benefits under this Plan, as are outlined in Article X. | ||
(5) | Board shall mean the Board of Directors of Diebold, Incorporated. | ||
(6) | Change in Control shall have the meaning assigned to such term in Article XI. | ||
(7) | Change in Control Benefit shall mean the benefit determined in accordance with Article XI. | ||
(8) | Code shall mean the Internal Revenue Code of 1986, as amended from time to time. | ||
(9) | Committee shall mean the Compensation Committee of the Board, as such Committee may be constituted from time to time. | ||
(10) | Company shall mean Diebold, Incorporated. | ||
(11) | Company Service shall mean years of employment (measured in years and completed months) with an Employer. | ||
(12) | Disability Benefit shall mean the benefit determined in accordance with Article X hereof. | ||
(13) | Early Retirement Age shall mean the 60th birthday of a Participant. | ||
(14) | Early Retirement Benefit shall mean the benefit determined in accordance with Article VI hereof. |
2
(15) | Early Retirement Date shall mean the first day of the month coinciding with or next following the 60th birthday of a Participant. | ||
(16) | Employer shall mean (a) the Company or its successors, and (b) any Affiliate or other entity which may specifically adopt this Plan with the consent of the Company, or its successors. | ||
(17) | 15-Year Service Benefit shall mean the benefit determined in accordance with Article IX hereof. | ||
(18) | 50% Joint and Survivor Annuity shall mean a reduced monthly Supplemental Retirement Benefit which is the Actuarial Equivalent of the single life annuity under the Plan and is payable to the Participant for his life, with continuance of monthly payments of 50% of such reduced amount after his death to his surviving Spouse until the first day of the month in which occurs the surviving Spouses death. | ||
(19) | Final Average Monthly Compensation shall mean one-twelfth of the average of the Participants Annual Compensation for the five complete consecutive calendar years during his last 10 calendar years of employment with the Employer during which his compensation was the highest. In the event a Participant has been employed for a period of less than five consecutive calendar years, the Participants Final Average Monthly Compensation shall be the average of his monthly compensation amounts in effect for all of the complete calendar months during which he was employed by the Employer. | ||
(20) | Grandfathered Benefits shall mean the amount of annuity benefit, if any, of a Participant under the Plan that was earned and vested as of December 31, 2004 and that the Committee has determined to grandfather within the meaning of Code §409A. Such Grandfathered Benefit shall be based on the present value as of December 31, 2004, of the vested amount to which the Participant would be entitled under the Plan if the Participant voluntarily terminated services without cause on December 31, 2004, and received a payment of the benefits with the maximum value available at the earliest possible date allowed under the Plan following the termination of services. Notwithstanding the foregoing, for any calendar year after December 31, 2004, such Grandfathered Benefit may increase (or decrease) to equal the present value of the benefit the Participant actually becomes entitled to, determined under the terms of the Plan (including the applicable limits under the Code), as in effect on October 3, 2004, without regard to any further amounts affecting the amount of or the entitlement to benefits (other than a Participant election with respect to the time and form of an available benefit). |
3
(21) | Involuntary Termination Benefit shall mean the benefit determined in accordance with Article VII. | ||
(22) | Normal Retirement Benefit shall mean the benefit determined in accordance with Article V. | ||
(23) | Normal Retirement Date shall mean the first day of the month coinciding with or next following the 62nd birthday of a Participant. | ||
(24) | 100% Joint and Survivor Annuity shall mean a reduced monthly Supplemental Retirement Benefit which is the Actuarial Equivalent of the single life annuity under the Plan and is payable to the Participant for his life, with continuance of monthly payments of 100% of such reduced amount after his death to his surviving Spouse until the first day of the month in which occurs the surviving Spouses death. | ||
(25) | Participant shall mean any executive highly paid or management employee of an Employer who is selected to participate in this Plan pursuant to the provisions of Article IV. | ||
(26) | Plan shall mean this Diebold, Incorporated Supplemental Employee Retirement Plan I, as in effect from time to time. | ||
(27) | Post-Retirement Death Benefit shall mean the benefit determined in accordance with Section (b) of Article XII. | ||
(28) | Pre-Retirement Death Benefit shall mean the benefit determined in accordance with Section (a) of Article XII. | ||
(29) | Qualified Retirement Plan shall mean the Diebold, Incorporated Retirement Plan for Salaried Employees, as presently set forth and as it may subsequently be amended, or its successor. | ||
(30) | Separation from Service shall mean a Participant dies, retires, or otherwise has a Termination of Employment from the Employer. A Separation from Service shall not be considered to have occurred if the Participants employment relationship is treated by the Employer as continuing while the Participant is on military leave, sick leave, or other bona fide leave of absence if such period of leave does not exceed 6 months or, if longer, so long as the individuals right to reemployment is provided by statute or by contract. If the period of leave exceeds 6 months and such reemployment rights are not provided, the employment relationship is deemed to terminate on the first date immediately following such 6-month period. Whether a Separation from Service has occurred will be determined in accordance with the requirements of Code §409A. |
4
(31) | Service Fraction shall mean, for any Participant, a fraction, the numerator of which is the lesser of (A) the Participants years of Company Service, or (B) 15, and the denominator of which is 15. | ||
(32) | Social Security Benefit shall mean the Primary Insurance Amount under the Federal Social Security Act to which a Participant would be entitled as of the later of his Normal Retirement Date or the date of his actual retirement, computed on the basis of the Participants average wage history (estimated or actual) for years before the date of determination and, in the case of a Participant who terminates employment with the Employer prior to his Normal Retirement Date, by assuming that the Participant will earn wages after his termination of employment and prior to his Normal Retirement Date at a rate equal to the Participants wage rate at the time of his termination of employment. If a Participant in this Plan is not eligible for full Social Security Benefits (for example, an individual who has previously worked in the military), for purposes of determining benefits under this Plan, such Social Security Benefits would be imputed as if he had been so eligible and had been covered by Social Security for his entire working career. | ||
(33) | Specified Employee shall mean a key employee as defined in Code Section 416(i) as further interpreted by the Treasury Regulations issued under Code Section 409A. | ||
(34) | Spouse shall mean the surviving spouse of a Participant at the time of his death, but only if the Participant and such spouse were married at least one year prior to the Participants Separation from Service. | ||
(35) | Supplemental Retirement Benefit shall mean the Change in Control Benefit, Disability Benefit, Early Retirement Benefit, 10-Year Service Benefit, 15-Year Service Benefit, Involuntary Termination Benefit, Normal Retirement Benefit, Pre-Retirement Death Benefit or Post-Retirement Death Benefit for which a Participant or his Spouse may qualify. | ||
(36) | 10-Year Service Benefit shall mean the benefit determined in accordance with Article VIII hereof, | ||
(37) | Terminated for Cause shall mean Participants Termination of Employment by an Employer due to the Participants: |
(i) | intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Employer; | ||
(ii) | intentional wrongful damage to property of the Employer; | ||
(iii) | intentional wrongful disclosure of secret processes or confidential information of the Employer; or |
5
(iv) | intentional wrongful engagement in any competitive activity which would constitute a material breach of the duty of loyalty to the Employer and any such at shall have been materially harmful to the Employer. |
For purposes of the Plan, no act, or failure to act, on the part of the Participant shall be deemed intentional if it was due primarily to an error in judgment or negligence, but shall be deemed intentional only if done, or omitted to be done, by the Participant not in good faith or without reasonable belief that his action or omission was not in or opposed tot eh best interest of the Employer. Notwithstanding the foregoing, a Participant shall not be deemed to have been Terminated for Cause hereunder unless and until there shall have been delivered to the Participant a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the Board then in office at a meeting of the Board called and held for such purposes, finding that, in the good faith opinion of the Board, the Participant had committed an act set forth above and specifying the particulars thereof in detail. The Participant shall receive reasonable notice and an opportunity for the Participant, together with his counsel, to be heard before the Board. Nothing herein shall limit the right of the Participant or his Beneficiaries to contest the validity or propriety of any such determination. | |||
(38) | Termination of Employment shall mean the severing of employment with the Employer, voluntarily or involuntarily. A Participant is presumed to have incurred a Termination of Employment from the Employer where the facts and circumstances indicate that the Employer and the Participant reasonably anticipated that no further services would be performed after a certain date or the level of bona fide services the Participant would perform after such date would permanently decrease to 20% or less of the average level of services over the immediately preceding 36-month period (or the full period of such services, if less than 36 months). A Termination of Employment will be determined in accordance with treasury Regulation 1.409A-1(h)(l)(ii). | ||
(39) | Total Disability shall mean a physical or mental impairment that causes a Participant to be unable to engage in any substantial gainful activity, which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. Such determination of disability may be made by the Social Security Administration or may be made pursuant to the Companys long term disability insurance program. |
6
(b) | Throughout this Plan, and whenever appropriate, the masculine gender shall be deemed to include the feminine and neuter, the singular shall be deemed to include the plural and vice versa. |
(a) | Eligibility for Participation in the Plan . Eligibility for this Plan was closed effective as of January 1, 2002. No further executives or highly paid management employees after such date shall be eligible to participate in the plan after such date except as to which the Board, in its sole discretion, may determine is appropriate. | |
(b) | Eligibility for Benefits . A Participant shall be entitled to receive a Supplemental Retirement Benefit (or have a Supplemental Retirement Benefit provided for his surviving Spouse) only if he satisfies the conditions of this Article IV and satisfies the qualification requirements of any of the Articles under the Plan to become eligible to receive a benefit thereunder. | |
(c) | Vesting . A Participant shall be vested hereunder upon attaining ten years of Company Service or upon meeting the requirements for a Normal Retirement Benefit, Early Retirement Benefit, Disability Benefit, Involuntary Termination Benefit, or Change in Control Benefit hereunder. | |
(d) | Forfeiture of Plan Benefits . In the absence of a Change in Control or a finding of Total Disability, a Participants participation shall cease and no benefits under this Plan shall be payable: |
(i) | to a Participant if the Participant: |
(A) | voluntarily terminates employment before completing at least 10 years of Company Service; or | ||
(B) | fails to give an Employer six months written advance notice of his pending voluntary Termination of Employment if he is leaving Diebold prior to age 60 (or three months written advance notice if he is leaving Diebold at age 60 or later); or | ||
(C) | is Terminated for Cause; or |
(ii) | to a Participants Spouse or Beneficiary, if the Participant: |
(A) | dies prior to satisfying the requirements for a Spouses Pre-Retirement or Post-Retirement Death benefit under Article XII; or | ||
(B) | is Terminated for Cause. |
7
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who attains age 62 while employed by an Employer shall be eligible, at any time after his said attainment of age 62, to retire and receive a Normal Retirement Benefit commencing at the time set forth in Article XIV. | |
(b) | Computation of Amount of Normal Retirement Benefit . A Participant who retires under Section (a) shall be entitled to receive a monthly Supplemental Retirement Benefit equal to 65% of the Participants Final Average Monthly Compensation multiplied by his Service Fraction, reduced by the sum of: |
(i) | 50% of the monthly Social Security Benefit payable to the Participant commencing on the first day of the month coincident with or following his Separation from Service; and | ||
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan commencing on the first day of the month coincident with or following his Separation from Service, assuming: |
(A) | for purposes of determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the Qualified Retirement Plan and a right to commence receiving such benefit on the first day of the month following his Separation from Service , and | ||
(B) | that the Participant elected commencement of such benefit on such date. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who attains his Early Retirement Age while employed by an Employer shall be eligible to retire and receive an Early Retirement Benefit commencing at the time set forth in Article XIV. | |
(b) | Computation of Amount of Early Retirement Benefit . A Participant who has a Termination of Employment after meeting the requirements in Section (a) shall be entitled to receive a monthly Early Retirement Benefit equal to 65% of the Participants Final Average Monthly Compensation multiplied by his Service Fraction reduced by the sum of: |
8
(i) | 50% of the monthly Social Security Benefit payable to the Participant commencing on this Normal Retirement Date; and | ||
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan commencing on his Normal Retirement Date assuming: |
(A) | for purposes of determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the Qualified Retirement Plan and a right to commence receiving such benefit at his Normal Retirement Date, and | ||
(B) | that the Participant elected commencement of such benefit as of such date. |
The monthly benefit computed under this Section (b) shall be reduced by .7% for each full month (up to 12) by which the date of commencement precedes the Participants Normal Retirement Date, and .6833% for each additional full month (if any) by which the date of commencement precedes the Participants Normal Retirement Date. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who incurs an involuntary Termination of Employment before he reaches his Early Retirement Age shall be eligible to receive an Involuntary Termination Benefit commencing at the time set forth in Article XIV. The Committee, or its duly appointed representative for this purpose, shall have full discretion to determine whether the termination of a Participants employment with the Employer is involuntary. | |
(b) | Computation of Amount of Involuntary Termination Benefit . A Participant who is eligible for an Involuntary Termination Benefit shall be entitled to receive a monthly Supplemental Retirement Benefit equal to 65% of the Participants Final Average Monthly Compensation multiplied by his Service Fraction, reduced by the sum of: |
(i) | 50% of the monthly Social Security Benefit payable to the Participant commencing on his Normal Retirement Date; and |
9
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan commencing on his Normal Retirement Date, assuming: |
(A) | for purposes of determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the Qualified Retirement Plan and a right to commence receiving such benefit at his Normal Retirement Date, and | ||
(B) | that the Participant elected commencement of such benefit as of such date. |
This monthly benefit computed under this Section (b) shall be reduced by .7% for each full month (up to 12) by which the date of commencement precedes the Participants Normal Retirement Date, and .6833% for each additional full month (if any) by which the date of commencement precedes the Participants Normal Retirement Date. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who has a Termination of Employment with the Employer after attaining 10 or more years of Company Service but who is not then eligible for other benefits under this Plan shall be eligible to receive a 10-Year Service Benefit commencing at the time set forth in Article XIV. | |
(b) | Computation of Amount of 10-Year Service Benefit . A Participant who is eligible for a 10-Year Service Benefit shall be entitled to receive a monthly Supplemental Retirement Benefit equal to 55% of his Final Average Monthly Compensation, multiplied by his Service Fraction, reduced by the sum of: |
(i) | 50% of the monthly Social Security Benefit payable to the Participant commencing on his Normal Retirement Date; and | ||
(ii) | the monthly benefit (expressed as a single life annuity) but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan at his Normal Retirement Date, assuming: |
(A) | for purposes of determining when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof) that the Participant had sufficient service under |
10
the Qualified Retirement Plan to have a right to commence his benefit under the Qualified Retirement Plan at his Normal Retirement Date, and | |||
(B) | that the Participant elected commencement of such benefit as of such date. |
The month benefit computed under this Section (b) shall be reduced by .7% for each full month (up to 12) by which the date of commencement precedes the Participants Normal Retirement Date, and .6833% for each additional full month (if any) by which the date of commencement precedes the Participants Normal Retirement Date. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who has a Termination of Employment with the Employer after attaining 15 or more years of Company Service but who is not then eligible for other benefits under this Plan (other than the 10-year Service Benefit) shall be eligible to receive a 15-Year Service Benefit commencing at the time set forth Article XIV. | |
(b) | Computation of Amount of 15-Year Service Benefit . A Participant who is eligible for a 15-Year Service Benefit shall be entitled to receive a monthly Supplemental Retirement Benefit equal to 55% of his Final Average Monthly Compensation, reduced by the sum of: |
(i) | 50% of the monthly Social Security Benefit payable to the Participant commencing on his Normal Retirement Date; and | ||
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan at his Normal Retirement Date, assuming: |
(A) | for purposes of determining when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof) that the Participant had sufficient service under the Qualified Retirement Plan to have a right to commence his benefit under the Qualified Retirement Plan at his Normal Retirement Date, and | ||
(B) | that the Participant elected commencement of such benefit as of such date. |
The monthly benefit computed under this Section (b) shall be reduced by .7% for each full month (up to 12) by which the date of commencement precedes the Participants Normal Retirement Date, and .6833% for each additional full month (if any) by which the date of commencement precedes the Participants Normal Retirement Date. |
11
(a) | Qualified for Benefit . Subject to the provisions of Article IV, if a Participant incurs a Termination of Employment before he reaches his Early Retirement Age by reason of his Total Disability, such Participant shall be eligible to receive a Disability Benefit commencing at the time set forth in Article XIV. | |
(b) | Computation of Amount of Disability Benefit . A Participant who is eligible for a Disability Benefit shall be entitled to receive a monthly Supplemental Retirement Benefit equal to (1) 65% of the Participants Final Average Monthly Compensation multiplied by his Service Fraction, reduced by (2) the sum of: |
(i) | 50% of the monthly Social Security Benefit that would be payable to the Participant on account of his Total Disability if he were determined to be entitled to receive a Social Security Benefit as a result of his Total Disability (whether or not the Participant in fact qualifies for such Social Security Benefit); and | ||
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) that would be payable to the Participant under the terms of the Qualified Retirement Plan on account of his Total Disability if he were determined to be entitled to receive a monthly disability benefit under the Qualified Retirement Plan as a result of his Total Disability (whether or not the Participant in fact qualifies for such monthly disability benefit), assuming, for purposes of determining the Participants eligibility for a disability pension under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to be eligible for a disability pension thereunder; the difference of (i) minus (ii) then being multiplied by 83.4%. |
(a) | Qualification for Benefit . A Participant who (1) has a Termination of Employment with the Employer within 24 months following a Change in Control and (2) is not at the time of such Termination of Employment eligible for a Normal Retirement Benefit, an Early Retirement Benefit, an Involuntary Termination Benefit or a Disability Benefit, shall be eligible for a Change in Control Benefit commencing at the time set forth in Article XIV. | |
(b) | Change in Control shall mean that: |
12
(i) | The Company is merged or consolidated or reorganized into or with another corporation or other legal person, and as a result of such merger, consolidation or reorganization less than a majority of the combined voting power of the securities of such corporation or person that are outstanding immediately following the consummation of such transaction is held in the aggregate by the holders of Voting Stock (as hereinafter defined) of the Company immediately prior to such transaction. | ||
(ii) | The Company sells or otherwise transfers all or substantially all of its assets to any other corporation or other legal person, and as a result of such sale or transfer less than a majority of the combined voting power of the securities of such corporation or person that are outstanding immediately following the consummation of such sale or transfer is held in the aggregate by the holders of Voting Stock (as hereinafter defined) of the Company immediately prior to such sale or transfer. | ||
(iii) | There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report) thereto, each as promulgated pursuant to the Securities and Exchange of 1934, as amended (the Exchange Act), disclosing that any person (as the term person is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term beneficial owner is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 20 percent or more of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the Company (the Voting Stock); | ||
(iv) | The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) that a change in control of the Company has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction; or | ||
(v) | If during any period of two consecutive years, individuals who at the beginning of any such period constitute the Board cease for any reason to constitute at least a majority of the members thereof, unless the election or the nomination for election by the Companys stockholders, of each member of the Board first elected during such period was approved by a vote of at least two-thirds of the member of the Board then still in office who were members of the Board at the beginning of any such period. |
Notwithstanding the foregoing provisions of subsection (iii) or (iv) hereof, a Change in Control shall not be deemed to have occurred for purposes of this Plan, either (1) solely because the |
13
Company, a Subsidiary, or any Company-sponsored employee stock ownership plan or other employee benefit plan of the Company, files or becomes obligated to file a report or a proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial ownership by it of shares of Voting Stock, whether in excess of 20 percent or otherwise, or because the Company reports that a change in control of the Company has or may have occurred or will or may occur in the future by reason of such beneficiary ownership or (2) solely because of a change in control of any Subsidiary by which any Participant may be employed. Notwithstanding the foregoing provisions of subsections (i-iv) hereof, if, prior to any event described in subsections (i-iv) hereof that may be instituted by any person who is not an officer or director of the Company, or prior to any disclosed proposal that may be instituted by any person who is not an officer or director of the Company that could lead to any such event, management proposes any structuring of the Company that ultimately leads to an event described in subsections (i-iv) hereof pursuant to such management proposal, than a Change in Control shall not be deemed to have occurred for purposes of the Plan. | ||
(c) | Computation of Amount of Change in Control Benefit . A Participant who is eligible for a Change in Control Benefit shall be entitled to receive a monthly Supplemental Retirement Benefit equal to 65% of the Participants Final Average Monthly Compensation multiplied by his Service Fraction, reduced by the sum of: |
(i) | 50% of the monthly Social Security Benefit payable to the Participant commencing on his Normal Retirement Date; and | ||
(ii) | the monthly benefit (expressed as a single life annuity not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan commencing on his Normal Retirement Date, assuming: |
(A) | for purposes of determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the Qualified Retirement Plan and a right to commence receiving such benefit at his Normal Retirement Date, and | ||
(B) | that the Participant elected commencement of such benefit as of such date. |
This monthly benefit computed under this Section (c) shall be reduced by .7% for each full month (up to 12) by which the date of commencement precedes the Participants Normal Retirement |
14
Date, and .6833% for each additional full month (if any) by which the date of commencement precedes the Participants Normal Retirement Date. |
(a) | Pre-Retirement |
(i) | Qualification for Benefit . Subject to the provisions of Article IV, if a Participant dies after having satisfied eligibility requirements for a Supplemental Retirement Benefit but before commencing to receive payment of a Supplemental Retirement Benefit, the surviving Spouse of such deceased Participant shall be eligible for a Pre-Retirement Death Benefit commencing at the time set forth in Article XIV. | ||
(ii) | Computation of Amount of Pre-Retirement Death Benefit . The amount of the Pre-Retirement Death Benefit shall be equal to the monthly amount which would have been payable to the Participant commencing as of his Normal Retirement Date. The monthly benefit specified herein shall be reduced by .7% for each full month (up to 12) by which the date of commencement precedes the Participants Normal Retirement Date, and .6833% for each additional full month (if any) by which the date of commencement precedes the Participants Normal Retirement Date. | ||
(iii) | Form and Duration of Payment . The Pre-Retirement Death Benefit shall be a monthly benefit payable from the time of commencement set forth in Article XIII until the first day of the month coincident with the death of the surviving Spouse. |
(b) | Post-Retirement Death Benefit |
(i) | For current Spouses of Participants in the Plan as of January 1, 2001: |
(1) | Qualification for Benefit . Upon the death of a Participant who is receiving Supplemental Retirement Benefits (including Disability Benefits) , the surviving Spouse of such deceased Participant shall be eligible for the Post-Retirement Death Benefit described in paragraph (2) of this Section. | ||
(2) | Computation of Amount of Annual Benefit . The Post-Retirement Death Benefit shall be a monthly benefit in an amount equal to the amount of the Supplemental Retirement Benefit the deceased Participant was receiving at the time of his death. |
(ii) | For future Spouses of Participants in the Plan as of January 1, 2001 or all Spouses of future Participants after January 1, 2001: |
15
(1) | Qualification for Benefit . The Surviving Spouse of a deceased Participant who has died while receiving Supplemental Retirement Benefits (including Disability Benefits) under the Plan and whose optional form of payment election provides for a survivor benefit shall be eligible for the Post-Retirement Death Benefit described in paragraph (2) of this Section. | ||
(2) | Computation of Amount of Annual Benefit . The Post-Retirement Death Benefit shall be a monthly benefit in an amount equal to either: |
(A) | 100% (as elected by the Participant), or | ||
(B) | 50% (as elected by the Participant) | ||
of the reduced Supplemental Retirement Benefit the deceased Participant was receiving at the time of his death. |
(c) | Minimum Death Benefit |
(i) | Pre-Retirement Surviving Spouse Benefit . As provided in Section (a) hereof, at the death of a Participant who satisfies the requirements, monthly death benefits are payable to an eligible surviving Spouse for her remaining lifetime. If the surviving Spouse has not received at least five years of monthly benefit payments at her death, the remainder of the five years of monthly benefit payments, if any, will be made monthly to the Beneficiary named by the surviving Spouse. If no Beneficiary is so named, the remaining payments, if any, will be made to the Spouses estate. | ||
(ii) | Post-Retirement Surviving Spouse Benefit . If, at the death of the Participant and the surviving Spouse, five years of benefit payments have not been paid to them totally, the remainder, if any, of the five year period, will be paid monthly to the named Beneficiary of the last to survive. If no such Beneficiary is named, the remaining payments, if any, will be made to the Estate of the Participant or last survivor, as the case may be. | ||
(iii) | Pre-Retirement Benefit with No Spouse . Notwithstanding the other sections of Article XII, a death benefit will be payable at the death of a Participant who is otherwise eligible under Sections (a) above, but has no surviving Spouse (or has no eligible surviving Spouse) at his death. The monthly death benefit shall be computed under Section XII(a)(ii) and (iii) and shall be paid to Participants named Beneficiary in accordance with Article XIV. For purposes of the Pre-Retirement Death Benefit only, a minimum of five years of monthly payments will be made to the Participant and/or the named Beneficiary under this provision. If no Beneficiary is named at the death of the Participant, any payments under this Section will be payable to the Participants estate. |
16
(a) | Administration by Committee . The Committee shall be charged with the administration of the Plan. | |
(b) | Powers of the Committee . The Committee shall have all such powers as may be necessary to discharge its duties relative to the administration of the Plan, including, by way of illustration and not limitation, discretionary authority to interpret and construe the Plan, to determine and decide all questions of fact, and all disputes, arising under the Plan including, but not limited to, the eligibility of any employee to participate hereunder, the validity of any Election of Deferral or other election as may be necessary or appropriate hereunder and the right of any employee to benefits payable hereunder. The Committee shall have all power necessary to adopt, alter and repeal such administrative rules, regulations and practices governing the operation of the Plan as it, in its sole discretion, may from time to time deem advisable. | |
(c) | Committee Actions . The Committee shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of the Plan unless attributable to willful misconduct or gross negligence. The Committee shall be entitled to conclusively rely upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Company with respect to the Plan. Participants who are members of the Committee shall not participate in any action or determination regarding solely their own benefits payable hereunder. All decisions of the Committee shall be by majority of the votes cast and, except as provided in Section (d) of this Article XII, decisions of the Committee made in good faith shall be final, conclusive and binding upon all parties. | |
(d) | Claims and Review Procedure . The Committee shall be responsible for the claims procedure under the Plan. An application for benefits under the Plan shall be considered a claim for purposes of this Section (d). Until modified by the Committee, the claims and review procedure set forth in this Section shall be the mandatory claims and review procedure for the resolution of disputes and disposition of claims filed under the Plan. |
(i) | Initial Claim . An individual may, subject to any applicable deadline, file with the Committee a written claim for benefits under the Plan in a form and manner prescribed by the Committee. |
(A) | If the claim is denied in whole or in part, the Committee shall notify the claimant of the adverse benefit determination within 90 days after the receipt of the claim. |
17
(B) | The 90-day period for making the claim determination may be extended for 90 days if the Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Committee notifies the claimant, prior to the expiration of the initial 90-day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made. |
(ii) | Notice of Initial Adverse Determination . A notice of an adverse determination shall be set forth in a manner calculated to be understood by the claimant. |
(A) | the specific reasons for the adverse determination; | ||
(B) | references to the specific provisions of the Plan document (or other applicable Plan document) on which the adverse determination is based; | ||
(C) | a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and | ||
(D) | a description of the claims review procedure, including the time limits applicable to such procedure, and a statement of the claimants right to bring a civil action under ERISA Section 502(a) following an adverse determination on review. |
(iii) | Request for Review . Within 60 days after receipt of an initial adverse benefit determination notice, the claimant may file with the Committee a written request for a review of the adverse determination and may, in connection therewith submit written comments, documents, records and other information relating to the claim benefits. Any request for review of the initial adverse determination not filed within 60 days after receipt of the initial adverse determination notice shall be untimely. | ||
(iv) | Claim on Review . If the claim, upon review, is denied in whole or in part, the Committee shall notify the claimant of the adverse benefit determination within 60 days after receipt of such a request for review. |
(A) | The 60-day period for deciding the claim on review may be extended for 60 days if the Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Committee notifies the claimant, prior to the expiration of the initial 60-day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made. | ||
(B) | In the event that the time period is extended due to a claimants failure to submit information necessary to decide a claim on review, the claimant shall have 60 days within which to provide the necessary information and the period for |
18
making the claim determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information or, if earlier, the expiration of 60 days. | |||
(C) | The Committees review of a denied claim shall take into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. |
(v) | Notice of Adverse Determination for Claim on Review . A notice of an adverse determination for a claim on review shall set forth in a manner calculated to be understood by the claimant: |
(A) | the specific reasons for the denial; | ||
(B) | references to the specific provisions of the Plan document (or other applicable Plan document) on which the adverse determination is based. | ||
(C) | a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimants claim for benefits; | ||
(D) | a statement describing any voluntary appeal procedures offered by the Plan and the claimants right to obtain information about such procedures; and | ||
(E) | a statement of the claimants right to bring an action under ERISA §502(a). |
(e) | Deadline to File Claim . To be considered timely under the Plans claim and review procedure, a claim must be filed with the Committee within 1 year after the claimant knew or reasonably should have known of the principal facts upon which the claim is based. | |
(f) | Exhaustion of Administrative Remedies . The exhaustion of the claim and review procedure is mandatory for resolving every claim and dispute arising under the Plan as to such claims and disputes. |
(i) | No claimant shall be permitted to commence any legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not statutory, until the claim and review procedure set forth herein have been exhausted in their entirety; and | ||
(ii) | In any such legal action all explicit and all implicit determinations by the Committee (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law. |
19
(g) | Deadline to File Legal Action . No legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 of ERISA or under any other provision of law, whether or not statutory, may be brought by any claimant on any matter pertaining to the Plan unless the legal action is commenced in the proper forum before the earlier of: |
(i) | 30 months after the claimant knew or reasonably should have known of the principal facts on which the claim is based, or | ||
(ii) | 6 months after the claimant has exhausted the claim and review procedure. |
(h) | Knowledge of Fact by Participant Imputed to Beneficiary . Knowledge of all facts that a Participant knew or reasonably should have known shall be imputed to every claimant who is or claims to be a Beneficiary of the Participant or otherwise claims to derive an entitlement by reference to the Participant. | |
(i) | Information Furnished by Participants . Neither the Company nor the Committee shall be liable or responsible for any error in the computation of the accrued benefit of a Participant resulting from any misstatement of fact made by the Participant, directly or indirectly, to the Company or the Committee, and used by it in determining the Participants accrued benefit. The Company and the Committee shall not be obligated or required to increase the accrued benefit of such Participant which, on discovery of the misstatement, is found to be understated as a result of such misstatement of the Participant. However, the accrued benefit of any Participant which is overstated by reason of any such misstatement shall be reduced to the amount appropriate in view of accurate facts. | |
(j) | Overpayments . If a payment or series of payments made from this Plan is found to be greater than the accrued benefit to which a Participant or Beneficiary is entitled due to factual errors, mathematical errors or otherwise, the Committee may, in its discretion and to the extent consistent with Code §409A, and in addition to or in lieu of any other legal remedies it may have, suspend or reduce future benefits to such Participant or Beneficiary as it deems appropriate to correct the overpayment. |
(a) | Automatic Form of Payment . The automatic form of payment for any Supplemental Retirement Benefit shall be a single life annuity. | |
(b) | Annuity Options . Any Participant in the Plan as of January 1, 2001 who marries a Spouse at any time after January 1, 2001 and any future Participants in the Plan after January 1, 2001, may, in |
20
lieu of the automatic single life annuity form of payment, elect to receive his benefit in
any of the following actuarially equivalent optional forms of payment:
OPTION 1: 50% Joint and Survivor Annuity OPTION 2: 100% Joint and Survivor Annuity |
||
(c) | Timing of Benefit Payments . Supplemental Retirement Benefits shall commence at the following times for each of the identified Supplemental Retirement Benefits: |
(i) | Normal Retirement Benefits under Article V shall commence as of the later of the Participants Normal Retirement Date or the first of the month coincident with or next following his actual Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall commence on the first day of the month which follows the expiration of a period of six months from the Participants Separation from Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. | ||
(ii) | Early Retirement Benefits under Article VI shall commence on the first day of the month following the later of the Participants attaining his Early Retirement Age or his actual Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall commence on the first day of the month which follows the expiration of a period of six months from the Participants Separation from Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. | ||
(iii) | Involuntary Termination Benefits under Article VII shall commence on the first day of the month following the later of the month in which the Participant attains Early Retirement Age or Participants actual Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall not commence prior to the first day of the month which follows the expiration of a period of six months from the date of Participants Separation from Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. | ||
(iv) | 10-Year or 15-Year Service Benefits under Articles VIII and IX respectively shall commence on the first day of the month following the later of the month in which the Participant attains Early Retirement Age or Participants actual Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall not commence prior to the first day of the month which follows the expiration of a period of six months from the date of Participants Separation from Service. Benefits payable |
21
during such six-month period shall be accumulated and paid at the time of commencement of payments. | |||
(v) | Disability Benefits under Article X shall commence on an unreduced actuarial basis, on the first day of the month following the month of Participants Separation from Service by reason of Total Disability. Payments shall continue until the earlier of the first day of the month for which the Participant is determined to no longer have a Total Disability or the first day of the month in which the Participant dies (unless a survivor annuity option has been selected, in which case payments shall continue to the Participants Surviving Spouse). The Committee may, in its discretion, take such steps as it deems necessary to determine the continued existence of a Participants Total Disability and may cease the Disability Benefit payable hereunder if it is established to the Committees satisfaction (as determined under the same standards recognized at the time Participant was determined as suffering a Total Disability) that such Total Disability no longer exists or Social Security Disability Benefits are no longer being paid. If a Participants Disability Benefit ceases because the Participant has recovered from the Total Disability, the Participant may be eligible for a benefit under the other provisions of the Plan. | ||
(vi) | Change in Control Benefits under Article XI shall commence on the first day of the month following the later of the month in which the Participant attains Early Retirement Age or Participants Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall not commence prior to the first day of the month which follows the expiration of a period of six months from the Participants Separation from Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. | ||
(vii) | Death Benefits under Article XII shall be paid as follows: |
(A) | Pre-Retirement Death Benefits shall commence the later of the date the Participant attains Early Retirement Age or his date of death. | ||
(B) | Post-Retirement Death Benefits shall commence as of the first day of the month immediately following the date of the Participants death, and shall continue to be paid as of the first day of each month thereafter until the first day of the month that includes the date of the death of the surviving Spouse. |
(viii) | Notwithstanding the foregoing, any Plan Benefit payable hereunder will be treated as made as stated herein if the payment is made at such time or a later date within the same calendar year or, if later, by the 15 th day of the third calendar month following such date. |
22
(ix) | Withholding of Taxes . The benefits payable under the Plan shall be subject to the deduction of any federal, state or local income taxes, Federal Insurance Contributions Act (FICA), FUTA or other taxes that are required to be withheld from such payments by applicable laws and regulations. | ||
(x) | Acceleration of Payments . Notwithstanding this Article XI, each Participants Supplemental Retirement Benefit shall be paid to him upon termination of the Plan to the extent provided in Article XIV. | ||
(xi) | Delay of Payment . Notwithstanding this Article XIV, the Company may delay the payment of all or any portion of the Participants Supplemental Retirement Benefit as follows: |
(A) | The Committee reasonably anticipates that if the Supplemental Retirement Benefits were made as scheduled, the Companys deduction with respect to such payments would not be permitted under Section 162(m) of the Code; provided such payments are then made during the Participants first taxable year in which the Committee reasonably anticipates that the Companys deduction would not be barred by application of Section 162(m) of the Code. | ||
(B) | The Committee reasonably anticipates that making scheduled payments would violate Federal Securities laws or other applicable laws provided such payments are then made at the earliest date at which the Committee reasonably contemplates that making the scheduled payments will not cause such a violation. |
(a) | Funding . The obligation of the Employers to pay benefits under the Plan constitutes the unsecured promise of the Employers to make payments from their general assets, and no Participant or Spouse shall have any interest in, or a lien or prior claim upon, any property of the Employers. With respect to the benefits under the Plan, each Participant or Spouse shall have the status of a general unsecured creditor of the Participants Employer. The Company may establish a so-called rabbi trust to hold funds, stock or other securities to be used in payment of the obligations of the Employers under the Plan, and may fund such trust; provided, however, that any funds contained therein shall remain subject to the claims of the general creditors of the Company or any other Employer for which the Participant performs services. It is the intention of the Employers that the Plan be unfunded for tax purposes and for purposes of Title I of ERISA. No liability for the payment of benefits under the Plan shall be imposed upon any officer, |
23
director, employee or stockholder of the Company or any other Employer, or upon the Board, the Committee or any member thereof. | ||
(b) | No Guaranty of Benefits . Nothing contained in this Plan shall constitute a guaranty by any Employer, the Committee or the Board that the assets of any Employer will be sufficient to pay any benefit hereunder. | |
(c) | Assignments and Restrictions . To the extent permitted by law, and except as otherwise provided in this Section (c), no right or interest of a Participant or Spouse under this Plan shall be transferable or assignable (either at law or in equity) nor shall any such right or interest be subject to alienation, anticipation, encumbrance, attachment, garnishment, levy, execution or other legal or equitable process of any kind, voluntary or involuntary, or in any manner be liable for or subject to the debts of any Participant or Spouse. If a Participant shall attempt to or shall transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his benefits hereunder or any part thereof, or if by reason of his bankruptcy or other event happening at any time such benefits would devolve upon anyone else or would not be enjoyed by him, then the Company, in its discretion, may terminate his interest in any such benefit to the extent the Company considers necessary or advisable to prevent or limit the effects of such occurrence. Termination shall be effected by filing a termination declaration with the Committee and making reasonable efforts to deliver a copy to the Participant (the Terminated Participant) whose interest is affected thereby. As long as the Terminated Participant is alive, any benefits affected by the termination shall be retained by the Company and, in the Companys sole and absolute judgment, may be paid to or expended for the benefit of the Terminated Participants, his spouse, his children or any other person or persons in fact dependent upon him in such a manner as the Company shall deem proper. Upon the death of the Terminated Participant, all benefits withheld from him and not paid to others in accordance with the preceding sentence shall be paid to the Terminated Participants surviving Spouse or, if none, to the Terminated Participants then living descendants, including adopted children, per stripes . | |
Notwithstanding the foregoing, amounts payable under this Plan may be withheld by the Company as they become due to the extent necessary to cover any debts or other obligations owed to the Company by the Participant, but only if such debts or other obligations are acknowledged as such in writing by the Participant or are confirmed as such by a final, nonappealable order of a court of competent jurisdiction. | ||
(d) | Headings . The various headings used in this Plan are for convenience only and shall not be used in interpreting the test of the Article, Section, paragraph or subparagraph in which they appear. |
24
(e) | Employment . The establishment of this Plan shall not be construed to give any Participant the right to be retained in the service of the Employer. | |
(f) | Applicable Law . The validity, interpretation, construction and performance of this Plan shall be governed by the internal substantive laws of the State of Ohio, without giving effect to the principles of conflict of laws of such State. | |
(g) | Binding Effect on Employer, Participants, Spouses and Their Successors . This Plan shall be binding and inure to the benefit of any Employer or its successors and assigns, and the Participants, Spouses and their heirs, legatees, distributes, executors, administrators or other legal representatives. | |
(h) | Participant Information . Each participant shall keep the Committee informed of his current address and the current address of his Spouse, if applicable. The Participant shall furnish to the Committee any and all information deemed by the Committee to be necessary or desirable for the proper administration of the Plan. | |
(i) | Incapacity . In the event that a Participant or Spouse is declared incompetent and a guardian, conservator or other person is appointed and legally charged with the care of the person or the persons estate, the payments under the Plan to which such Participant or Spouse is entitled shall be paid to such guardian, conservator or other person legally charged with the care of the person or the estate. Except as provided hereinabove, when the Company, in its sole discretion, determines that the Participant or Spouse is unable to manage his or her financial affairs, the Company may make distribution(s) of the amounts payable to such Participant or Spouse to any one or more of the spouse, lineal ascendants or descendants or other closest living relatives of such Participant or Spouse who demonstrate to the satisfaction of the Company the propriety of making such distribution(s). Any payment so made shall not exceed such amount as is permitted under Section 409A of the Code and shall be in complete discharge of any liability under this Agreement for such payment. The Company shall not be required to see to the application of any such distribution made under this Section. | |
(j) | Code Section 409A . To the extent applicable, it is intended that this Plan and the benefits payable hereunder comply with the provisions of Section 409A of the Code. The Plan and the benefits payable hereunder shall be administered in a manner consistent with this intent, and any provision that would cause the Plan or benefit payable hereunder to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of Participants). |
25
(a) | Amendment . The Plan may be amended from time to time in any respect whatsoever by the Company and by the Committee to the extent consistent with its delegated authority. Any such amendment may be retroactive, prospective or both. No such amendment of the Plan document or termination of the Plan, however, shall reduce a Participants accrued benefit earned as of the date of such amendment unless the Participant so affected consents in writing to the amendment or such amendment is deemed necessary by the Company to affect the intended purposes of this Plan and/or to comply with applicable law. | |
(b) | Termination . The Company reserves the right to discontinue benefit accruals at any time. The Company also reserves the right to cause an acceleration of the time and form of a Plan payment where the acceleration of such payment is made in accordance with one of the following provisions: |
(i) | Dissolution or Bankruptcy . At the discretion of the Company within 12 months of a corporate dissolution taxed under Code §331 or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that Plan benefits are included in the Participants gross incomes in the latest of: |
(A) | the calendar year in which the Plan termination and liquidation occurs; | ||
(B) | the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or | ||
(C) | the first calendar year in which payment is administratively feasible. |
(ii) | Discretionary Termination . At the discretion of the Company, provided that: |
(A) | the termination and liquidation does not occur proximate to a downturn in the financial health of the Company; | ||
(B) | all other arrangements sponsored by the Company that would be aggregated with this arrangement under Code §409A are also terminated, to the extent any Participant in this Plan also has a benefit under any such other arrangement; | ||
(C) | no payments in liquidation of the Plan, other than payments that would have been made under this Plan had the termination not occurred, are made from the Plan within 12 months of the termination; | ||
(D) | all benefits are fully distributed within 24 months of such termination; and | ||
(E) | the Company does not adopt a new arrangement that would be aggregated under Code §409A with this Plan for 3 years following the date the Company has taken all necessary action to irrevocably terminate and liquidate this Plan |
26
DIEBOLD, INCORPORATED
|
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By: | ||||
Its: | ||||
27
A.1. | Purpose. | |
The purpose of this Appendix A is to identify certain provisions pertaining to the sole participant of SERP II whose benefit is hereby transferred into the Plan effective as of this Restatement. The provisions of this Appendix A supersede the provisions of the Plan as set forth below. | ||
A.2. | Definitions . |
1. | Normal Retirement Age shall mean age 65. | ||
2. | Normal Retirement Date shall mean the first day of the month coinciding with or next following the 65 th birthday of a Participant. | ||
3. | Service Fraction shall mean a fraction, the numerator of which is the lesser of (A) the Participants years of Company Service, or (B) (30), and the denominator of which is 30. |
A.3. | Eligibility . Mr. Eric Evans is the sole Participant eligible to participate in the Plan with respect to the provisions of this Appendix A. | |
A.4 | Normal Retirement Benefits . |
1. | Qualification for Benefit . The provisions of Article V(a) of the Plan shall apply except that age 65 shall be inserted in lieu of the age 62 referenced therein. | ||
2. | Computation of Amount of Normal Retirement Benefit . The provisions of Article V(b) of the Plan shall apply except that the 65% of the Participants Final Average Monthly Compensation shall be replaced by 50% of the Participants Final Average Monthly Compensation. |
A.5. | Early Retirement Benefits . |
1. | Computation of Amount of Early Retirement Benefit . The provisions of Article VI(b) of the Plan shall apply except that 65% of the Participants Final Average Monthly Compensation shall be replaced by 50% of the Participants Final Average Monthly Compensation and the monthly benefit computed shall be actuarially reduced using the assumptions defined in Article III(1), for each full month by which the date of commencement precedes the Participants Normal Retirement Date. |
A.6. | Involuntary Termination Benefits . |
1. | Computation of Amount of Involuntary Termination Benefit . The provisions of Article VII(b) of the Plan shall apply except that 65% of the Participants Final Average |
1
Monthly Compensation shall be replaced by 50% of the Participants Final Average Monthly Compensation and the monthly benefit computed shall be actuarially reduced using the assumptions defined in Article III(1), for each full month by which the date of commencement precedes the Participants Normal Retirement Date. |
A.7. | 10-Year Service Benefit . |
1. | Computation of Amount of 10-Year Service Benefit . A Participant who is eligible for a 10-Year Service Benefit shall be entitled to receive a monthly Supplemental Retirement Benefit equal to the excess, if any, of: |
(i) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan at his Normal Retirement Date but calculated without regard to any statutory limits under Code Section 401(a)(7) or 415(b), minus | ||
(ii) | the monthly benefit (expressed as a single life annuity), but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan at his Normal Retirement Date assuming: |
(A) | for purposes of determining when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof) that the Participant had sufficient service under the Qualified Retirement Plan to have a right to commence his benefit under the Qualified Retirement Plan at his Normal Retirement Date, and | ||
(B) | that the Participant elected commencement of such benefit as of such date; |
The monthly benefit computed under the preceding sentence shall be actuarially reduced using the assumptions identified in Article III(1), for each full month by which the date of commencement precedes the Participants Normal Retirement Date. |
A.8. | 15-Year Service Benefit . |
1. | Computation of Amount of 15-Year Service Benefit . A Participant who is eligible for a 15-Year Service Benefit shall be entitled to receive a monthly Supplemental Retirement Benefit equal to the excess, if any, of: |
(i) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan at his Normal Retirement Date but calculated without regard to any statutory limits under Code Section 401(a)(7) or 415(b), minus |
2
(ii) | the monthly benefit (expressed as a single life annuity), but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan at his Normal Retirement Date (as defined herein), assuming: |
(A) | for purposes of determining when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof) that the Participant had sufficient service under the Qualified Retirement Plan to have a right to commence his benefit under the Qualified Retirement Plan at his Normal Retirement Date, and | ||
(B) | that the Participant elected commencement of such benefit as of such date; |
The monthly benefit computed under the preceding sentence shall be actuarially reduced using the assumptions identified in Article III(1), for each full month by which the date of commencement precedes the Participants Normal Retirement Date. |
A.9. | Disability Benefit . |
1. | Computation of Amount of Disability Benefit . The provisions of Article X(b) shall apply except that 65% of the Participants Final Average Monthly Compensation shall be replaced by 50% of the Participants Final Average Monthly Compensation. |
A.10. | Change in Control Benefit . |
1. | Computation of Amount of Early Retirement Benefit . The provisions of Article XI(b) of the Plan shall apply except that 65% of the Participants Final Average Monthly Compensation shall be replaced by 50% of the Participants Final Average Monthly Compensation and the monthly benefit computed shall be actuarially reduced using the assumptions defined in Article III(1), for each full month by which the date of commencement precedes the Participants Normal Retirement Date. |
A.11. | Death Benefit . |
(a) | Pre-Retirement . |
(i) | Qualification for Benefit . If a Participant dies after attaining five (5) years of Company Service, but before commencing to receive payment of a Supplemental Retirement Benefit (other than a Disability Benefit) the surviving Spouse of such deceased Participant shall be eligible for a Pre-Retirement Death Benefit. | ||
(ii) | Computation of Amount of Pre-Retirement Death Benefit . The amount will be as determined under the Plan but will be actuarially reduced using the |
3
assumptions listed in Article III(1), for each full month by which the date of commencement precedes the Participants Normal Retirement Date. |
(b) | Post-Retirement . Post-Retirement Death Benefit shall be paid under Article X(b)(ii) of the Plan. |
A.12. | Optional Forms and Timing of Benefits . |
(a) | Automatic Form of Payment . The automatic form of payment for a married Participant is the 50% Joint and Survivor Annuity. | ||
(b) | Annuity Options . In lieu of the Automatic Form of Payment, a Participant may choose one of the following optional forms of payment: | ||
Option 1:
Single life annuity. A monthly Supplemental Retirement Benefit payable
to the Participant for his life with no continuation of benefits after his death.
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Option 2: 100% Joint and Survivor Annuity. |
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Page | ||||
ARTICLE I PLAN
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1 | |||
ARTICLE II PURPOSE OF THE PLAN
|
1 | |||
ARTICLE III DEFINITIONS
|
1 | |||
(1) Actuarial Equivalent
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1 | |||
(2) Affiliate
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1 | |||
(3) Beneficiary
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2 | |||
(4) Board
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2 | |||
(5) Change in Control
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2 | |||
(6) Change in Control Benefit
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2 | |||
(7) Code
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2 | |||
(8) Committee
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2 | |||
(9) Company
|
2 | |||
(10) Company Service
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2 | |||
(11) Disability Benefit
|
2 | |||
(12) Early Retirement Age
|
2 | |||
(13) Employer
|
2 | |||
(14) 50% Joint and Survivor Annuity
|
2 | |||
(15) Normal Retirement Date
|
3 | |||
(16) 100% Joint and Survivor Annuity
|
3 | |||
(17) Participant
|
3 | |||
(18) Plan
|
3 | |||
(19) Plan Benefit
|
3 | |||
(20) Points
|
3 | |||
(21) Post-Retirement Death Benefit
|
3 | |||
(22) Pre-Retirement Death Benefit
|
3 | |||
(23) Qualified Retirement Plan
|
3 | |||
(24) Retirement Benefit
|
3 | |||
(25) Separation from Service
|
3 | |||
(26) Specified Employee
|
4 | |||
(27) Spouse
|
4 | |||
(28) Terminated for Cause
|
4 | |||
(29) Termination of Employment
|
5 | |||
(30) Total Disability
|
5 | |||
(31) Vested Benefit
|
5 | |||
ARTICLE IV ELIGIBILITY, PARTICIPATION AND VESTING
|
5 | |||
(a) Eligibility for Participation in the Plan
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5 |
i
Page | ||||
(b) Eligibility for Benefits
|
6 | |||
(c) Initial Election
|
6 | |||
(d) Vesting
|
6 | |||
(e) Forfeiture of Plan Benefits
|
6 | |||
ARTICLE V NORMAL RETIREMENT BENEFITS
|
6 | |||
(a) Qualification for Benefit
|
6 | |||
(b) Computation of Amount of Normal Retirement Benefit
|
6 | |||
ARTICLE VI EARLY RETIREMENT BENEFIT
|
7 | |||
(a) Qualification for Benefit.
|
7 | |||
(b) Computation of Amount of Early Retirement Benefit
|
7 | |||
ARTICLE VII VESTED BENEFIT
|
8 | |||
(a) Qualification for Benefit
|
8 | |||
(b) Computation of Amount of Vested Benefit
|
8 | |||
ARTICLE VIII DISABILITY BENEFIT
|
9 | |||
(a) Qualification for Benefit
|
9 | |||
(b) Computation of Amount of Disability Benefit
|
9 | |||
ARTICLE IX BENEFIT UPON CHANGE IN CONTROL
|
10 | |||
(a) Qualification for Benefit
|
10 | |||
(b) Change in Control
|
10 | |||
(c) Computation of Amount of Change in Control Benefit
|
11 | |||
ARTICLE X DEATH BENEFIT
|
12 | |||
(a) Pre-Retirement
|
12 | |||
(b) Post-Retirement Death Benefit
|
13 | |||
ARTICLE XI OPTIONAL FORMS AND TIMING OF BENEFITS
|
13 | |||
(a) Optional Forms of Benefits
|
13 | |||
(b) Timing of Benefit Payments
|
13 | |||
ARTICLE XII PLAN ADMINISTRATION AND CLAIMS
|
16 | |||
(a) Administration by Committee
|
16 | |||
(b) Powers of the Committee
|
16 | |||
(c) Committee Actions
|
17 | |||
(d) Claims and Review Procedure
|
17 | |||
(e) Deadline to File Claim
|
19 | |||
(f) Exhaustion of Administrative Remedies
|
19 | |||
(g) Deadline to File Legal Action
|
20 | |||
(h) Knowledge of Fact by Participant Imputed to Beneficiary
|
20 | |||
(i) Information Furnished by Participants
|
20 | |||
(j) Overpayments
|
20 | |||
ARTICLE XIII MISCELLANEOUS
|
20 | |||
(a) Funding
|
20 | |||
(b) No Guaranty of Benefits
|
21 | |||
(c) Assignments and Restrictions
|
21 | |||
(d) Headings
|
22 | |||
(e) Employment
|
22 | |||
(f) Applicable Law
|
22 |
ii
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(g) Binding Effect on Employer, Participants, Spouses and Their Successors
|
22 | |||
(h) Participant Information
|
22 | |||
(i) Incapacity
|
22 | |||
(j) Code Section 409A
|
23 | |||
ARTICLE XIV AMENDMENT AND TERMINATION
|
23 | |||
(a) Amendment
|
23 | |||
(b) Termination
|
23 |
(a) | The following definitions shall apply with respect to this Plan: |
(1) | Actuarial Equivalent shall mean, except where otherwise indicated, a benefit of equivalent value to the benefit it replaces calculated on the basis of the RP-2000 Mortality Table for males (RP-2000 Mortality Table for females spouses mortality) and a seven percent (7%) interest rate per annum, compounded annually. | ||
(2) | Affiliate shall mean any entity included with the Company in a controlled group of corporations or trades or businesses under common control within the meaning of Code §414(b) or §414(c), an affiliated service group within the |
1
meaning of Code §414(n), or any other entity required to be aggregated with the Company under Code §414(o). For all purposes under this Plan, in applying Code §1563(a)(1), (2) and (3) for purposes of determining the Companys Affiliates under Code §414(b), the language at least 80% shall be applied as it appears in those sections, and in applying Treas. Reg. §1.414(c)-2 for purposes of determining trades or business (whether or not incorporated) that are under common control for purposes of Code §414(c), the language at least 80% shall be used as it appears in such regulation. |
(3) | Beneficiary shall mean an eligible surviving Spouse that may receive death benefits under this Plan, as are outlined in Article X. | ||
(4) | Board shall mean the Board of Directors of Diebold, Incorporated. | ||
(5) | Change in Control shall have the meaning assigned to such term in Article IX. | ||
(6) | Change in Control Benefit shall mean the benefit determined in accordance with Article IX. | ||
(7) | Code shall mean the Internal Revenue Code of 1986, as amended from time to time. | ||
(8) | Committee shall mean the Compensation Committee of the Board, as such Committee may be constituted from time to time. | ||
(9) | Company shall mean Diebold, Incorporated. | ||
(10) | Company Service shall mean years of employment (measured in years and completed months) with an Employer. | ||
(11) | Disability Benefit shall mean the benefit determined in accordance with Article VIII hereof. | ||
(12) | Early Retirement Age shall mean the date that the Participant has both attained age 50 and accrued 70 points. | ||
(13) | Employer shall mean (a) the Company or its successors, and (b) any Affiliate which may specifically adopt this Plan with the consent of the company, or its successors. | ||
(14) | 50% Joint and Survivor Annuity shall mean a reduced monthly Plan benefit which is Actuarially Equivalent to the single life annuity under the Plan and is payable to the Participant for his life, with continuance of monthly payments of 50% of such reduced amount after his death to his surviving Spouse until the first day of the month in which occurs the surviving Spouses death. |
2
(15) | Normal Retirement Date shall mean the first day of the month coincident with or next following the 65 th birthday of the Participant. | ||
(16) | 100% Joint and Survivor Annuity shall mean a reduced monthly Plan Benefit which is Actuarially Equivalent to the single life annuity under the Plan and is payable to the Participant for his life, with continuance of monthly payments of 100% of such reduced amount after his death or this surviving spouse until the first day of the month in which occurs the surviving Spouses death. | ||
(17) | Participant shall mean any executive or highly paid management employee of an Employer who is selected to participant in this Plan pursuant to the provisions of Article IV. | ||
(18) | Plan shall mean this Diebold, Incorporated Pension Restoration Supplemental Executive Retirement Plan, as in effect from time to time. | ||
(19) | Plan Benefit shall mean the Change in Control Benefit, Disability Benefit, Vested Benefit, Retirement Benefit, Pre-Retirement Death Benefit or Post-Retirement Death Benefit for which a Participant or his Spouse may qualify. | ||
(20) | Points shall be the numerical total of the Participants years of age plus years of Company Service. | ||
(21) | Post-Retirement Death Benefit shall mean the benefit determined in accordance with Section (b) of Article X. | ||
(22) | Pre-Retirement Death Benefit shall mean the benefit determined in accordance with Section (a) of Article X. | ||
(23) | Qualified Retirement Plan shall mean the Diebold, Incorporated Retirement Plan for Salaried Employees, as presently set forth and as it may subsequently be amended, or it successor. | ||
(24) | Retirement Benefit shall mean the benefit determined in accordance with Article V or Article VI, as applicable. | ||
(25) | Separation from Service shall mean a Participant dies, retires, or otherwise has a Termination of Employment from the Employer. A Separation from Service shall not be considered to have occurred if the Participants employment relationship is treated by the Employer as continuing while the Participant is on military leave, sick leave, or other bona fide leave of absence if such period of leave does not exceed 6 months or, if longer, so long as the individuals right to reemployment is provided by statute or by contract. If the period of leave exceeds 6 months and such reemployment rights are not provided, the |
3
employment relationship is deemed to terminate on the first date immediately following such 6-month period. Whether a Separation from Service has occurred will be determined in accordance with the requirements of Code §409A. |
(26) | Specified Employee shall mean a key employee as defined in Code Section 416(i) as further interpreted by the Treasury Regulations issued under Code Section 409A. | ||
(27) | Spouse shall mean the surviving spouse of a Participant at the time of his death, but only if the Participant and such spouse were married at least one year prior to the earlier of the Participants Separation from Service, death, retirement or other termination of employment with the Employer. | ||
(28) | Terminated for Cause shall mean Participants Termination of Employment by an Employer due to the Participants: |
(i) | intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Employer; | ||
(ii) | intentional wrongful damage to property of the Employer; | ||
(iii) | intentional wrongful disclosure of secret processes or confidential information of the Employer; or | ||
(iv) | intentional wrongful engagement in any competitive activity which would constitute a material breach of the duty of loyalty to the Employer and any such at shall have been materially harmful to the Employer. |
4
(29) | Termination of Employment shall mean the severing of employment with the Employer, voluntarily or involuntarily. A Participant is presumed to have incurred a Termination of Employment from the Employer where the facts and circumstances indicate that the Employer and the Participant reasonably anticipated that no further services would be performed after a certain date or the level of bona fide services the Participant would perform after such date would permanently decrease to 20% or less of the average level of services over the immediately preceding 36-month period (or the full period of such services, if less than 36 months). A Termination of Employment will be determined in accordance with treasury Regulation 1.409A-1(h)(l)(ii). | ||
(30) | Total Disability shall mean a physical or mental impairment that causes a Participant to be unable to engage in any substantial gainful activity, which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. Such determination of disability may be made by the Social Security Administration or may be made pursuant to the Companys long term disability insurance program. | ||
(31) | Vested Benefit shall mean the benefit determined in accordance with Article VII hereof. |
(b) | Throughout this Plan, and whenever appropriate, the masculine gender shall be deemed to include the feminine and neuter, the singular shall be deemed to include the plural and vice versa. |
(a) | Eligibility for Participation in the Plan . The Chief Executive Officer of the Company shall nominate executive or highly paid management employees of the Employer whose compensation exceeds the limit set forth under Section 401(a)(17) of the Internal Revenue Code for participation in the Plan. The Committee shall make the final decision as to those executives or highly paid management employees who shall become Participants in the Plan. Newly appointed executive or highly paid management employee shall become Participants in the Plan effective as of the next following January 1. |
5
(b) | Eligibility for Benefits . A Participant shall be entitled to receive a Plan Benefit (or have a Plan Benefit provided for his surviving Spouse) only if he satisfies the conditions of this Article IV and satisfies the qualification requirements of any of the Articles under the Plan to become eligible to receive a benefit thereunder. | |
(c) | Initial election . Within 30 days of becoming a Participant in the Plan, each Participant shall file an election with the Committee designating what optional form of payment under Article XI shall be paid on account of his Separation from Service. | |
(d) | Vesting . A Participant shall be vested hereunder upon attaining five years of Company Service or upon meeting the requirements for a Retirement Benefit, Disability Benefit, or Change in Control Benefit hereunder. | |
(e) | Forfeiture of Plan Benefits . In the absence of a Change in Control or a finding of Total Disability, a Participants participation shall cease and no benefits under this Plan shall be payable: |
(i) | to a Participant if the Participant: |
(A) | voluntarily terminates employment before completing at least five years of Company Service; or | ||
(B) | fails to give an Employer six months written advance notice of his pending voluntary Termination of Employment if he is leaving Diebold prior to age 55 (or three months written advance notice if he is leaving Diebold at age 55 or later); or | ||
(C) | is Terminated for Cause; or |
(ii) | to a Participants Spouse, if the Participant: |
(A) | dies prior to satisfying the requirements for a Spouses Pre-Retirement or Post-Retirement Death benefit under Article X; or | ||
(B) | is Terminated for Cause. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who attains age 65 while employed by an Employer shall be eligible, at any time after his said attainment of age 65, to retire and receive a Retirement Benefit commencing at the time set forth in Article XI. | |
(b) | Computation of Amount of Normal Retirement Benefit . A Participant who retires under Section (a) shall be entitled to receive a monthly Retirement Benefit equal to: |
6
(i) | the monthly benefit (expressed as a single life annuity) the Participant would have received under the Qualified Retirement Plan, payable as of the first of the month coincident with or next following the Participants Separation from Service if the benefit under the Qualified Retirement Plan was determined without regard to the compensation limit of Section 401(a)(17) of the Code and benefit limit of Section 415 of the Internal Revenue Code ,minus, | ||
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan, payable as of the first of the month coincident with or next following the Participants Separation from Service assuming: |
(A) | for purposes of determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the Qualified Retirement Plan and a right to commence receiving such benefit on the first of the month coincident with or next following the Participants Separation from Service, and | ||
(B) | that the Participant elected commencement of such benefit on such date. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who has attained his Early Retirement Age shall be eligible to retire and receive a Retirement Benefit commencing at the time set forth in Article XI. | |
(b) | Computation of Amount of Early Retirement Benefit . A Participant who has a Termination of Employment after meeting the requirements under Section (a) shall be entitled to receive, a monthly Retirement Benefit equal to: |
(i) | the monthly benefit (expressed as a single life annuity) the Participant would have received under the Qualified Retirement Plan, payable as of his Normal Retirement Date, if the benefit under the Qualified Retirement Plan was determined without regard to the compensation limit of Section 401(a)(17) of the Code and benefit limit of Section 415 of the Internal Revenue Code, minus |
7
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan commencing as of his Normal Retirement Date, assuming: |
(A) | for purposes of determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof) that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the Qualified Retirement Plan and a right to commence receiving such benefit as of his Normal Retirement Date ; and | ||
(B) | that the Participant elected commencement of such benefit as of such date. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who has a Termination of Employment before he has attained his Normal Retirement Age or Early Retirement Age and after the Participant has completed five or more years of Company Service shall be eligible to receive a Vested Benefit commencing on the date set forth in Article XI. | |
(b) | Computation of Amount of Vested Benefit . A Participant who is eligible for a Vested Benefit shall be entitled to receive a monthly Vested Benefit equal to: |
(i) | the monthly benefit (expressed as a single life annuity) the Participant would have received under the Qualified Retirement Plan, commencing as of his Normal Retirement Date, if the benefit under the Qualified Retirement Plan was determined without regard to the compensation limit of Section 401(a)(17) of the Code and benefit limit of Section 415 of the Internal Revenue Code minus | ||
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan commencing as of his Normal Retirement Date, assuming: |
8
(A) | for purposes of determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the Qualified Retirement Plan and a right to commence receiving such benefit, and | ||
(B) | that the Participant elected commencement of such benefit as of such date. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, if a Participant incurs a Termination of Employment with the Employer after he has completed 15 years of Company Service but before he reaches his Normal Retirement Date by reason of his Total Disability, such Participant shall be eligible to receive a Disability Benefit commencing at the time set forth in Article XI. | |
(b) | Computation of Amount of Disability Benefit . A Participant who is eligible for a Disability Benefit shall be entitled to receive a monthly Disability Benefit equal to: |
(i) | the monthly benefit (expressed as a life annuity) the Participant would have received under the Qualified Retirement Plan, commencing as of his Normal Retirement Date, if the benefit under the Qualified Retirement Plan was determined without regard to the compensation limit of Section 401(a)(17) of the Code and benefit limit of Section 415 of the Internal Revenue Code minus | ||
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements), that would be payable to the Participant under the terms of the Qualified Retirement Plan on account of his Total Disability commencing as of his Normal Retirement Date, if he were determined to be entitled to receive a monthly disability benefit under the Qualified Retirement Plan as a result of his Total Disability. |
9
(a) | Qualification for Benefit . A Participant who (1) has a Termination of Employment with the Employer within 24 months following a Change in Control and (2) is not at the time of such Termination of Employment eligible for a Retirement Benefit, Vested Benefit or Disability Benefit, shall be eligible for a Change in Control Benefit commencing at the time set forth in Article XI. | |
(b) | Change in Control shall mean that: |
(i) | The Company is merged or consolidated or reorganized into or with another corporation or other legal person, and as a result of such merger, consolidation or reorganization less than a majority of the combined voting power of the securities of such corporation or person that are outstanding immediately following the consummation of such transaction is held in the aggregate by the holders of Voting Stock (as hereinafter defined) of the Company immediately prior to such transaction. | ||
(ii) | The Company sells or otherwise transfers all or substantially all of its assets to any other corporation or other legal person, and as a result of such sale or transfer less than a majority of the combined voting power of the securities of such corporation or person that are outstanding immediately following the consummation of such sale or transfer is held in the aggregate by the holders of Voting Stock (as hereinafter defined) of the Company immediately prior to such sale or transfer. | ||
(iii) | There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report) thereto, each as promulgated pursuant to the Securities and Exchange of 1934, as amended (the Exchange Act), disclosing that any person (as the term person is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term beneficial owner is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 20 percent or more of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the Company (the Voting Stock); | ||
(iv) | The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) that a |
10
change in control of the Company has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction; or |
(v) | If during any period of two consecutive years, individuals who at the beginning of any such period constitute the Board cease for any reason to constitute at least a majority of the members thereof, unless the election or the nomination for election by the Companys stockholders, of each member of the Board first elected during such period was approved by a vote of at least two-thirds of the member of the Board then still in office who were members of the Board at the beginning of any such period. |
(c) | Computation of Amount of Change in Control Benefit . A Participant who is eligible for a Change in Control Benefit shall be entitled to receive a monthly Change in Control Benefit equal to: |
(i) | the benefit the Participant would have received under the Qualified Retirement Plan, as of his Normal Retirement Date, if the benefit under the Qualified Retirement Plan was determined without regard to the compensation limit of |
11
Section 401(a)(17) of the Code and benefit limit of Section 415 of the Internal Revenue Code minus |
(ii) | the monthly benefit (expressed as a single life annuity not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan commencing as of his Normal Retirement Date, assuming: |
(A) | for purposes of determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the Qualified Retirement Plan and a right to commence receiving such benefit at his Normal Retirement Date, and | ||
(B) | that the Participant elected commencement of such benefit as of such date. |
(a) | Pre-Retirement |
(i) | Qualification for Benefit . Subject to the provisions of Article IV, if a Participant dies with five (5) years of Company Service but before commencing to receive payment of a benefit under the Plan, the surviving Spouse of such deceased Participant shall be eligible for a Pre-Retirement Death Benefit commencing at the time set forth in Article XI. | ||
(ii) | Computation of Amount of Pre-Retirement Death Benefit . The amount of the Pre-Retirement Death Benefit shall be equal to 50% of the reduced monthly amount which would have been payable to the Participant. The reduced monthly amount which would have been payable to the Participant is: the 50% Joint and Survivor Annuity to which a Participant would have been entitled if he had a Separation from Service on the date of his death; survived to the commencement date set forth in Article XI; and, retired on such date with a 50% Joint and Survivor Annuity. |
12
(iii) | Form and Duration of Payment . The Pre-Retirement Death Benefit shall be a monthly benefit payable from the date of commencement set forth in Article XI until the first day of the month that includes the date of death of the surviving Spouse. |
(b) | Post-Retirement Death Benefit |
(i) | Qualification for Benefit . The surviving Spouse of a deceased Participant who has died while receiving a Plan Benefit (including Disability Benefits) under the Plan and whose optional form of payment elected at retirement provides for a survivor benefit shall be eligible for the Post-Retirement Death Benefit described in paragraph (ii) of this Section. | ||
(ii) | Computation of Amount of Annual Benefit . The Post-Retirement Death Benefit shall be a monthly benefit in an amount equal to either |
(A) | 100%, or | ||
(B) | 50% (as elected by the Participant in accordance with Article XI) of the reduced Plan Benefit the deceased Participant was receiving at the time of his death. |
(a) | Optional forms of Benefits . A Participant may elect to receive his Plan Benefits in any of the following optional forms of payment: |
(ii) | a single life annuity; | ||
(iii) | a 50% Joint and Survivor Annuity (available only if married); or | ||
(iv) | a 100% Joint and Survivor Annuity (available only if married). |
(b) | Timing of Benefit Payments . Plan Benefits shall commence at the following times for each of the identified Plan Benefits: |
(i) | Normal Retirement Benefits under Article V shall commence as of the later of the Participants Normal Retirement Date or the first of the month coincident |
13
with or next following his actual Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall commence on the first day of the month which follows the expiration of a period of six months from the Participants Separation from Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. |
(ii) | Early Retirement Benefits under Article VI shall commence on the first day of the month following the later of the Participants attaining his Early Retirement Age or his actual Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall commence on the first day of the month which follows the expiration of a period of six months from the Participants Separation from Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. | ||
(iii) | Vested Benefits under Article VII shall commence on the first day of the month following the later of the month in which the Participant attains Early Retirement Age or Participants actual Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall not commence prior to the first day of the month which follows the expiration of a period of six months from the date of Participants Separation from Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. | ||
(iv) | Disability Benefits under Article VIII shall commence on an unreduced actuarial basis, on the first day of the month following the month of Participants Separation from Service by reason of Total Disability. Payments shall continue until the earlier of the first day of the month for which the Participant is determined to no longer have a Total Disability or the first day of the month in which the Participant dies (unless a survivor annuity option has been selected, in which case payments shall continue to the Participants Surviving Spouse). The Committee may, in its discretion, take such steps as it deems necessary to determine the continued existence of a Participants Total Disability and may cease the Disability Benefit payable hereunder if it is established to the Committees satisfaction (as determined under the same standards recognized at the time Participant was determined as suffering a Total Disability) that such Total Disability no longer exists or Social Security Disability Benefits are no longer being paid. If a Participants Disability Benefit ceases because the |
14
Participant has recovered from the Total Disability, the Participant may be eligible for a benefit under the other provisions of the Plan. |
(v) | Change in Control Benefits under Article IX shall commence on the first day of the month following the later of the month in which the Participant attains Early Retirement Age or Participants Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall not commence prior to the first day of the month which follows the expiration of a period of six months from the Participants Separation from Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. | ||
(vi) | Death Benefits under Article X shall be paid as follows: |
(A) | Pre-Retirement Death Benefits shall commence the later of the date the Participant attains Early Retirement Age or his date of death. | ||
(B) | Post-Retirement Death Benefits shall commence as of the first day of the month immediately following the date of the Participants death, and shall continue to be paid as of the first day of each month thereafter until the first day of the month that includes the date of the death of the surviving Spouse. |
(vii) | Notwithstanding the foregoing, any Plan Benefit payable hereunder will be treated as made as stated herein if the payment is made at such time or a later date within the same calendar year or, if later, by the 15 th day of the third calendar month following such date. | ||
(viii) | Transitional Elections . During 2008, Participants were permitted to make new elections regarding the form of payment of their Plan Benefit, subject to the following rules: |
(A) | such elections were required to be made no later than December 31, 2008, | ||
(B) | such elections could not change a payment that would otherwise have become payable in 2008 or cause payments to be made in 2008 that would otherwise be paid at a later date, and | ||
(C) | such elections were made pursuant to such administrative rules as the Committee prescribed. |
15
(ix) | Withholding of Taxes . The benefits payable under the Plan shall be subject to the deduction of any federal, state or local income taxes, Federal Insurance Contributions Act (FICA), FUTA or other taxes that are required to be withheld from such payments by applicable laws and regulations. | ||
(x) | Acceleration of Payments . Notwithstanding Article XI, each Participants Plan Benefit shall be paid to him upon termination of the Plan to the extent provided in Article XIV. | ||
(xi) | Delay of Payment . Notwithstanding this Article XI, the Company may delay the payment of all or any portion of the Participants Plan Benefit as follows: |
(A) | The Committee reasonably anticipates that if the Plan Benefits were made as scheduled, the Companys deduction with respect to such payments would not be permitted under Section 162(m) of the Code; provided such payments are then made during the Participants first taxable year in which the Committee reasonably anticipates that the Companys deduction would not be barred by application of Section 162(m) of the Code. | ||
(B) | The Committee reasonably anticipates that making scheduled payments would violate Federal Securities laws or applicable laws; provided such payments are then made at the earliest date at which the Committee reasonably contemplates that making the scheduled payments will not cause such a violation. |
(a) | Administration by Committee . The Committee shall be charged with the administration of the Plan. | |
(b) | Powers of the Committee . The Committee shall have all such powers as may be necessary to discharge its duties relative to the administration of the Plan, including, by way of illustration and not limitation, discretionary authority to interpret and construe the Plan, to determine and decide all questions of fact, and all disputes, arising under the Plan including, but not limited to, the eligibility of any employee to participate hereunder, the validity of any Election of Deferral or other election as may be necessary or appropriate |
16
hereunder and the right of any employee to benefits payable hereunder. The Committee shall have all power necessary to adopt, alter and repeal such administrative rules, regulations and practices governing the operation of the Plan as it, in its sole discretion, may from time to time deem advisable. |
(c) | Committee Actions . The Committee shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of the Plan unless attributable to willful misconduct or gross negligence. The Committee shall be entitled to conclusively rely upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Company with respect to the Plan. Participants who are members of the Committee shall not participate in any action or determination regarding solely their own benefits payable hereunder. All decisions of the Committee shall be by majority of the votes cast and, except as provided in Section (d) of this Article XII, decisions of the Committee made in good faith shall be final, conclusive and binding upon all parties. | |
(d) | Claims and Review Procedure . The Committee shall be responsible for the claims procedure under the Plan. An application for benefits under the Plan shall be considered a claim for purposes of this Section (d). Until modified by the Committee, the claims and review procedure set forth in this Section shall be the mandatory claims and review procedure for the resolution of disputes and disposition of claims filed under the Plan. |
(i) | Initial Claim . An individual may, subject to any applicable deadline, file with the Committee a written claim for benefits under the Plan in a form and manner prescribed by the Committee. |
(A) | If the claim is denied in whole or in part, the Committee shall notify the claimant of the adverse benefit determination within 90 days after the receipt of the claim. | ||
(B) | The 90-day period for making the claim determination may be extended for 90 days if the Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Committee notifies the claimant, prior to the expiration of the initial 90-day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made. |
(ii) | Notice of Initial Adverse Determination . A notice of an adverse determination shall be set forth in a manner calculated to be understood by the claimant. |
(A) | the specific reasons for the adverse determination; |
17
(B) | references to the specific provisions of the Plan document (or other applicable Plan document) on which the adverse determination is based; | ||
(C) | a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and | ||
(D) | a description of the claims review procedure, including the time limits applicable to such procedure, and a statement of the claimants right to bring a civil action under ERISA Section 502(a) following an adverse determination on review. |
(iii) | Request for Review . Within 60 days after receipt of an initial adverse benefit determination notice, the claimant may file with the Committee a written request for a review of the adverse determination and may, in connection therewith submit written comments, documents, records and other information relating to the claim benefits. Any request for review of the initial adverse determination not filed within 60 days after receipt of the initial adverse determination notice shall be untimely. | ||
(iv) | Claim on Review . If the claim, upon review, is denied in whole or in part, the Committee shall notify the claimant of the adverse benefit determination within 60 days after receipt of such a request for review. |
(A) | The 60-day period for deciding the claim on review may be extended for 60 days if the Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Committee notifies the claimant, prior to the expiration of the initial 60-day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made. | ||
(B) | In the event that the time period is extended due to a claimants failure to submit information necessary to decide a claim on review, the claimant shall have 60 days within which to provide the necessary information and the period for making the claim determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information or, if earlier, the expiration of 60 days. | ||
(C) | The Committees review of a denied claim shall take into account all comments, documents, records and other information submitted by the |
18
claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. |
(v) | Notice of Adverse Determination for Claim on Review . A notice of an adverse determination for a claim on review shall set forth in a manner calculated to be understood by the claimant: |
(A) | the specific reasons for the denial; | ||
(B) | references to the specific provisions of the Plan document (or other applicable Plan document) on which the adverse determination is based. | ||
(C) | a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimants claim for benefits; | ||
(D) | a statement describing any voluntary appeal procedures offered by the Plan and the claimants right to obtain information about such procedures; and | ||
(E) | a statement of the claimants right to bring an action under ERISA §502(a). |
(e) | Deadline to File Claim . To be considered timely under the Plans claim and review procedure, a claim must be filed with the Committee within 1 year after the claimant knew or reasonably should have known of the principal facts upon which the claim is based. | |
(f) | Exhaustion of Administrative Remedies . The exhaustion of the claim and review procedure is mandatory for resolving every claim and dispute arising under the Plan as to such claims and disputes. |
(i) | No claimant shall be permitted to commence any legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not statutory, until the claim and review procedure set forth herein have been exhausted in their entirety; and | ||
(ii) | In any such legal action all explicit and all implicit determinations by the Committee (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law. |
19
(g) | Deadline to File Legal Action . No legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 of ERISA or under any other provision of law, whether or not statutory, may be brought by any claimant on any matter pertaining to the Plan unless the legal action is commenced in the proper forum before the earlier of: |
(i) | 30 months after the claimant knew or reasonably should have known of the principal facts on which the claim is based, or | ||
(ii) | 6 months after the claimant has exhausted the claim and review procedure. |
(h) | Knowledge of Fact by Participant Imputed to Beneficiary . Knowledge of all facts that a Participant knew or reasonably should have known shall be imputed to every claimant who is or claims to be a Beneficiary of the Participant or otherwise claims to derive an entitlement by reference to the Participant. | |
(i) | Information Furnished by Participants . Neither the Company nor the Committee shall be liable or responsible for any error in the computation of the accrued benefit of a Participant resulting from any misstatement of fact made by the Participant, directly or indirectly, to the Company or the Committee, and used by it in determining the Participants accrued benefit. The Company and the Committee shall not be obligated or required to increase the accrued benefit of such Participant which, on discovery of the misstatement, is found to be understated as a result of such misstatement of the Participant. However, the accrued benefit of any Participant which is overstated by reason of any such misstatement shall be reduced to the amount appropriate in view of accurate facts. | |
(j) | Overpayments . If a payment or series of payments made from this Plan is found to be greater than the accrued benefit to which a Participant or Beneficiary is entitled due to factual errors, mathematical errors or otherwise, the Committee may, in its discretion and to the extent consistent with Code §409A, and in addition to or in lieu of any other legal remedies it may have, suspend or reduce future benefits to such Participant or Beneficiary as it deems appropriate to correct the overpayment. |
(a) | Funding . The obligation of the Employers to pay benefits under the Plan constitutes the unsecured promise of the Employers to make payments from their general assets, and no Participant or Spouse shall have any interest in, or a lien or prior claim upon, any property of the Employers. With respect to the benefits under the Plan, each Participant |
20
or Spouse shall have the status of a general unsecured creditor of the Participants Employer. The Company may establish a so-called rabbi trust to hold funds, stock or other securities to be used in payment of the obligations of the Employers under the Plan, and may fund such trust; provided, however, that any funds contained therein shall remain subject to the claims of the general creditors of the Company or any other Employer for which the Participant performs services. It is the intention of the Employers that the Plan be unfunded for tax purposes and for purposes of Title I of ERISA. No liability for the payment of benefits under the Plan shall be imposed upon any officer, director, employee or stockholder of the Company or any other Employer, or upon the Board, the Committee or any member thereof. |
(b) | No Guaranty of Benefits . Nothing contained in this Plan shall constitute a guaranty by any Employer, the Committee or the Board that the assets of any Employer will be sufficient to pay any benefit hereunder. | |
(c) | Assignments and Restrictions . To the extent permitted by law, and except as otherwise provided in this Section (c), no right or interest of a Participant or Spouse under this Plan shall be transferable or assignable (either at law or in equity) nor shall any such right or interest be subject to alienation, anticipation, encumbrance, attachment, garnishment, levy, execution or other legal or equitable process of any kind, voluntary or involuntary, or in any manner be liable for or subject to the debts of any Participant or Spouse. If a Participant shall attempt to or shall transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his benefits hereunder or any part thereof, or if by reason of his bankruptcy or other event happening at any time such benefits would devolve upon anyone else or would not be enjoyed by him, then the Company, in its discretion, may terminate his interest in any such benefit to the extent the Company considers necessary or advisable to prevent or limit the effects of such occurrence. Termination shall be effected by filing a termination declaration with the Committee and making reasonable efforts to deliver a copy to the Participant (the Terminated Participant) whose interest is affected thereby. As long as the Terminated Participant is alive, any benefits affected by the termination shall be retained by the Company and, in the Companys sole and absolute judgment, may be paid to or expended for the benefit of the Terminated Participants, his spouse, his children or any other person or persons in fact dependent upon him in such a manner as the Company shall deem proper. Upon the death of the Terminated Participant, all benefits withheld from him and not paid to others in accordance with the preceding sentence shall be paid to the Terminated Participants |
21
surviving Spouse or, if none, to the Terminated Participants then living descendants,
including adopted children,
per stripes
.
Notwithstanding the foregoing, amounts payable under this Plan may be withheld by the Company as they become due to the extent necessary to cover any debts or other obligations owed to the Company by the Participant, but only if such debts or other obligations are acknowledged as such in writing by the Participant or are confirmed as such by a final, nonappealable order of a court of competent jurisdiction. |
(d) | Headings . The various headings used in this Plan are for convenience only and shall not be used in interpreting the test of the Article, Section, paragraph or subparagraph in which they appear. | |
(e) | Employment . The establishment of this Plan shall not be construed to give any Participant the right to be retained in the service of the Employer. | |
(f) | Applicable Law . The validity, interpretation, construction and performance of this Plan shall be governed by the internal substantive laws of the State of Ohio, without giving effect to the principles of conflict of laws of such State. | |
(g) | Binding Effect on Employer, Participants, Spouses and Their Successors . This Plan shall be binding and inure to the benefit of any Employer or its successors and assigns, and the Participants, Spouses and their heirs, legatees, distributes, executors, administrators or other legal representatives. | |
(h) | Participant Information . Each participant shall keep the Committee informed of his current address and the current address of his Spouse, if applicable. The Participant shall furnish to the Committee any and all information deemed by the Committee to be necessary or desirable for the proper administration of the Plan. | |
(i) | Incapacity . In the event that a Participant or Spouse is declared incompetent and a guardian, conservator or other person is appointed and legally charged with the care of the person or the persons estate, the payments under the Plan to which such Participant or Spouse is entitled shall be paid to such guardian, conservator or other person legally charged with the care of the person or the estate. Except as provided hereinabove, when the Company, in its sole discretion, determines that the Participant or Spouse is unable to manage his or her financial affairs, the Company may make distribution(s) of the amounts payable to such Participant or Spouse to any one or more of the spouse, lineal ascendants or descendants or other closest living relatives of such Participant or Spouse who demonstrate to the satisfaction of the Company the propriety of making such distribution(s). Any payment so made shall not exceed such amount as is permitted |
22
under Section 409A of the Code and shall be in complete discharge of any liability under this Agreement for such payment. The Company shall not be required to see to the application of any such distribution made under this Section. |
(j) | Code Section 409A . To the extent applicable, it is intended that this Plan and the benefits payable hereunder comply with the provisions of Section 409A of the Code. The Plan and the benefits payable hereunder shall be administered in a manner consistent with this intent, and any provision that would cause the Plan or benefit payable hereunder to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of Participants). |
(a) | Amendment . The Plan may be amended from time to time in any respect whatsoever by the Company and by the Committee to the extent consistent with its delegated authority. Any such amendment may be retroactive, prospective or both. No such amendment of the Plan document or termination of the Plan, however, shall reduce a Participants accrued benefit earned as of the date of such amendment unless the Participant so affected consents in writing to the amendment or such amendment is deemed necessary by the Company to affect the intended purposes of this Plan and/or to comply with applicable law. | |
(b) | Termination . The Company reserves the right to discontinue benefit accruals at any time. The Company also reserves the right to cause an acceleration of the time and form of a Plan payment where the acceleration of such payment is made in accordance with one of the following provisions: |
(i) | Dissolution or Bankruptcy . At the discretion of the Company within 12 months of a corporate dissolution taxed under Code §331 or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that Plan benefits are included in the Participants gross incomes in the latest of: |
(A) | the calendar year in which the Plan termination and liquidation occurs; | ||
(B) | the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or | ||
(C) | the first calendar year in which payment is administratively feasible. |
23
(ii) | Discretionary Termination . At the discretion of the Company, provided that: |
(A) | the termination and liquidation does not occur proximate to a downturn in the financial health of the Company; | ||
(B) | all other arrangements sponsored by the Company that would be aggregated with this arrangement under Code §409A are also terminated, to the extent any Participant in this Plan also has a benefit under any such other arrangement; | ||
(C) | no payments in liquidation of the Plan, other than payments that would have been made under this Plan had the termination not occurred, are made from the Plan within 12 months of the termination; | ||
(D) | all benefits are fully distributed within 24 months of such termination; and | ||
(E) | the Company does not adopt a new arrangement that would be aggregated under Code §409A with this Plan for 3 years following the date the Company has taken all necessary action to irrevocably terminate and liquidate this Plan |
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DIEBOLD, INCORPORATED | ||||||
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By: | |||||
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Its: | |||||
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ARTICLE I PLAN
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1 | |||
ARTICLE II PURPOSE OF THE PLAN
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1 | |||
ARTICLE III DEFINITIONS
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1 | |||
(1) 401(k) Restoration SERP
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1 | |||
(2) Actuarial Equivalent
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1 | |||
(3) Affiliate
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1 | |||
(4) Annual Compensation
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2 | |||
(5) Beneficiary
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2 | |||
(6) Board
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2 | |||
(7) Change in Control
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2 | |||
(8) Change in Control Benefit
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2 | |||
(9) Code
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2 | |||
(10) Committee
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2 | |||
(11) Company
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2 | |||
(12) Company Service
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2 | |||
(13) Disability Benefit
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2 | |||
(14) Early Retirement Age
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2 | |||
(15) Early Retirement Benefit
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2 | |||
(16) Early Retirement Date
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2 | |||
(17) Employer
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3 | |||
(18) 50% Joint and Survivor Annuity
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3 | |||
(19) Final Average Monthly Compensation
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3 | |||
(20) Normal Retirement Benefit
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3 | |||
(21) Normal Retirement Date
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3 | |||
(22) 100% Joint and Survivor Annuity
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3 | |||
(23) Participant
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3 | |||
(24) Pension Restoration SERP
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3 | |||
(25) Plan
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3 | |||
(26) Points
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3 | |||
(27) Post-Retirement Death Benefit
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3 | |||
(28) Pre-Retirement Death Benefit
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4 | |||
(29) Qualified Retirement Plan
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4 | |||
(30) Separation from Service
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4 | |||
(31) Service Fraction
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4 | |||
(32) Social Security Benefit
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4 | |||
(33) Specified Employee
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4 |
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(34) Spouse
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5 | |||
(35) Supplemental Executive Retirement Benefit
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5 | |||
(36) Terminated For Cause
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5 | |||
(37) Termination of Employment
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5 | |||
(38) Total Disability
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6 | |||
(39) Vested Benefit
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6 | |||
ARTICLE IV ELIGIBILITY, PARTICIPATION AND VESTING
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6 | |||
(a) Eligibility for Participation in the Plan
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6 | |||
(b) Eligibility for Benefits
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6 | |||
(c) Initial Election
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6 | |||
(d) Vesting
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7 | |||
(e) Forfeiture of Plan Benefits
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7 | |||
ARTICLE V NORMAL RETIREMENT BENEFITS
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7 | |||
(a) Qualification for Benefit
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7 | |||
(b) Computation of Amount of Normal Retirement Benefit
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7 | |||
ARTICLE VI EARLY RETIREMENT BENEFIT
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8 | |||
(a) Qualification for Benefit
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8 | |||
(b) Computation of Amount of Early Retirement Benefit
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8 | |||
ARTICLE VII VESTED BENEFIT
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9 | |||
(a) Qualification for Benefit
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9 | |||
(b) Computation of Amount of Vested Benefit
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10 | |||
ARTICLE VIII DISABILITY BENEFIT
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10 | |||
(a) Qualification for Benefit
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10 | |||
(b) Computation of Amount of Disability Benefit
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11 | |||
ARTICLE IX BENEFIT UPON CHANGE IN CONTROL
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11 | |||
(a) Qualification for Benefit
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11 | |||
(b) Change in Control
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12 | |||
(c) Computation of Amount of Change in Control Benefit
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13 | |||
ARTICLE X DEATH BENEFIT
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14 | |||
(a) Pre-Retirement
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14 | |||
(b) Post-Retirement Death Benefit
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15 | |||
ARTICLE XI OPTIONAL FORMS AND TIMING OF BENEFITS
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15 | |||
(a) Optional Forms of Benefits
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15 | |||
(b) Timing of Benefit Payments
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15 | |||
ARTICLE XII PLAN ADMINISTRATION AND CLAIMS
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18 | |||
(a) Administration by Committee
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18 | |||
(b) Powers of the Committee
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18 | |||
(c) Committee Actions
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18 | |||
(d) Claims and Review Procedure
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19 | |||
(e) Deadline to File Claim
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21 | |||
(f) Exhaustion of Administrative Remedies
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21 | |||
(g) Deadline to File Legal Action
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21 | |||
(h) Knowledge of Fact by Participant Imputed to Beneficiary
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21 | |||
(i) Information Furnished by Participants
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21 |
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(j) Overpayments
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22 | |||
ARTICLE XIII MISCELLANEOUS
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22 | |||
(a) Funding
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22 | |||
(b) No Guaranty of Benefits
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22 | |||
(c) Assignments and Restrictions
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22 | |||
(d) Headings
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23 | |||
(e) Employment
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23 | |||
(f) Applicable Law
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23 | |||
(g) Binding Effect on Employer, Participants, Spouses and Their Successors
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23 | |||
(h) Participant Information
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23 | |||
(i) Incapacity
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23 | |||
(j) Code Section 409A
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24 | |||
ARTICLE XIV AMENDMENT AND TERMINATION
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24 | |||
(a) Amendment
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24 | |||
(b) Termination
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(a) | The following definitions shall apply with respect to this Plan: |
(1) | 401(k) Restoration SERP means the Diebold, Incorporated 401(k) Restoration Supplemental Executive Retirement Plan. | ||
(2) | Actuarial Equivalent shall mean, except where otherwise indicated, a benefit of equivalent value to the benefit it replaces calculated on the basis of the RP-2000 Mortality Table for males (RP-2000 Mortality Table for females for spouses mortality) and a seven percent (7%) interest rate per annum, compounded annually. | ||
(3) | Affiliate shall mean any entity included with the Company in a controlled group of corporations or trades or businesses under common control within the meaning of Code §414(b) or §414(c), an affiliated service group within the meaning of Code §414(n), or |
1
any other entity required to be aggregated with the Company under Code §414(o). For all purposes under this Plan, in applying Code §1563(a)(1), (2) and (3) for purposes of determining the Companys Affiliates under Code §414(b), the language at least 80% shall be applied as it appears in those sections, and in applying Treas. Reg. §1.414(c)-2 for purposes of determining trades or business (whether or not incorporated) that are under common control for purposes of Code §414(c), the language at least 80% shall be used as it appears in such regulation. |
(4) | Annual Compensation shall mean a Participants base pay from an Employer for any Plan Year plus the Participants annual incentive bonus in the calendar year in which it is accrued. Annual Compensation also include amounts paid to individuals who are citizens or residents of the United State and who are employees of, or provide service to, a foreign affiliate of the Company to which an agreement entered into by the Company under Code Section 3121(l) applies. | ||
(5) | Beneficiary shall mean an eligible surviving Spouse that may receive death benefits under this Plan, as are outlined in Article X. | ||
(6) |
Board shall mean the Board of Directors of Diebold, Incorporated.
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(7) | Change in Control shall have the meaning assigned to such term in Article IX. | ||
(8) | Change in Control Benefit shall mean the benefit determined in accordance with Article IX. | ||
(9) | Code shall mean the Internal Revenue Code of 1986, as amended from time to time. | ||
(10) | Committee shall mean the Compensation Committee of the Board, as such Committee may be constituted from time to time. | ||
(11) | Company shall mean Diebold, Incorporated. | ||
(12) | Company Service shall mean years of employment (measured in years and completed months) with an Employer. | ||
(13) | Disability Benefit shall mean the benefit determined in accordance with Article VIII hereof. | ||
(14) | Early Retirement Age shall mean the age when a Participant has both attained age 50 and accrued 70 Points. | ||
(15) | Early Retirement Benefit shall mean the benefit determined in accordance with Article VI hereof. | ||
(16) | Early Retirement Date shall mean the first day of the month coinciding with or next following the Participants Early Retirement Age. |
2
(17) | Employer shall mean (a) the Company or it successors, and (b) any Affiliate which may specifically adopt this Plan with the consent of the Company, or its successors. | ||
(18) | 50% Joint and Survivor Annuity shall mean a reduced monthly Supplemental Executive Retirement Benefit which is the Actuarial Equivalent of the single life annuity under the Plan and is payable to the Participant for his life, with continuance of monthly payments of 50% of such reduced amount after his death to his surviving Spouse until the first day of the month in which occurs the surviving Spouses death. | ||
(19) | Final Average Monthly Compensation shall mean one-twelfth of the average of the Participants Annual Compensation for the five complete consecutive calendar years during his last 10 calendar years of employment with the Employer during which his compensation was the highest. In the event a Participant has been employed for a period of less than five consecutive calendar years, the Participants Final Average Monthly Compensation shall be the average of his monthly compensation amounts in effect for all of the complete calendar months during which he was employed by the Employer. | ||
(20) | Normal Retirement Benefit shall mean the benefit determined in accordance with Article V. | ||
(21) | Normal Retirement Date shall mean the first day of the month coinciding with or next following the 65 th birthday of a Participant. | ||
(22) | 100% Joint and Survivor Annuity shall mean a reduced monthly Supplemental Executive Retirement Benefit which is the Actuarial Equivalent of the single life annuity under the Plan and is payable to the Participant for his life, with continuance of monthly payments of 100% of such reduced amount after his death to his surviving Spouse until the first day of the month in which occurs the surviving Spouses death. | ||
(23) | Participant shall mean any executive or highly paid management employee of an Employer who is selected to participate in this Plan pursuant to the provisions of Article IV. | ||
(24) | Pension Restoration SERP means the Diebold, Incorporated Pension Restoration Supplemental Executive Retirement Plan. | ||
(25) | Plan shall mean this Diebold, Incorporated Pension Supplemental Executive Retirement Plan, as in effect from time to time. | ||
(26) | Points shall be the numerical total of the Participants years of age plus years of Company Service. | ||
(27) | Post-Retirement Death Benefit shall mean the benefit determined in accordance with Section (b) of Article X. |
3
(28) | Pre-Retirement Death Benefit shall mean the benefit determined in accordance with Section (A) of Article X. | ||
(29) | Qualified Retirement Plan shall mean the Diebold, Incorporated Retirement Plan for Salaried Employees, as presently set forth and as it may subsequently be amended, or it successor. | ||
(30) | Separation from Service shall mean a Participant dies, retires, or otherwise has a Termination of Employment from the Employer. A Separation from Service shall not be considered to have occurred if the Participants employment relationship is treated by the Employer as continuing while the Participant is on military leave, sick leave, or other bona fide leave of absence if such period of leave does not exceed 6 months or, if longer, so long as the individuals right to reemployment is provided by statute or by contract. If the period of leave exceeds 6 months and such reemployment rights are not provided, the employment relationship is deemed to terminate on the first date immediately following such 6-month period. Whether a Separation from Service has occurred will be determined in accordance with the requirements of Code §409A. | ||
(31) | Service Fraction shall mean, for any Participant, a fraction, the numerator of which is the lesser of (A) the Participants years of Company Service, or (B) 25, the denominator of which is 25. | ||
(32) | Social Security Benefit shall mean the Primary Insurance Amount under the Federal Social Security Act to which a Participant would be entitled as of the later of his Normal Retirement Date or the date of his actual retirement, computed on the basis of the Participants average wage history (estimated or actual) for years before the date of determination and, in the case of a Participant who terminates employment with the Employer prior to his Normal Retirement Date, by assuming that the Participant will earn wages after his termination of employment and prior to his Normal Retirement Date at a rate equal to the Participants wage rate at the time of his termination of employment. If a Participant in this Plan is not eligible for full Social Security Benefits (for example, an individual who has previously worked in the military), for purposes of determining benefits under this Plan, such Social Security Benefits would be imputed as if he had been so eligible and had been covered by Social Security for his entire working career. | ||
(33) | Specified Employee shall mean a key employee as defined in Code Section 416(i) as further interpreted by the Treasury Regulations issued under Code Section 409A. |
4
(34) | Spouse shall mean the surviving spouse of a Participant at the time of his death, by only if the Participant and such spouse were married at least one year prior to Separation from Service. | ||
(35) | Supplemental Executive Retirement Benefit shall mean the Change in Control Benefit, Disability Benefit, Early Retirement Benefit, Vested Benefit, Normal Retirement Benefit, Pre-Retirement Death benefit or Post-retirement Death Benefit for which a Participant or his Spouse may qualify. | ||
(36) | Terminated for Cause shall mean Participants Termination of Employment by an Employer due to the Participants: |
(i) | intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Employer; | ||
(ii) | intentional wrongful damage to property of the Employer; | ||
(iii) | intentional wrongful disclosure of secret processes or confidential information of the Employer; or | ||
(iv) | intentional wrongful engagement in any competitive activity which would constitute a material breach of the duty of loyalty to the Employer and any such at shall have been materially harmful to the Employer. |
(37) | Termination of Employment shall mean the severing of employment with the Employer, voluntarily or involuntarily. A Participant is presumed to have incurred a Termination of Employment from the Employer where the facts and circumstances |
5
indicate that the Employer and the Participant reasonably anticipated that no further services would be performed after a certain date or the level of bona fide services the Participant would perform after such date would permanently decrease to 20% or less of the average level of services over the immediately preceding 36-month period (or the full period of such services, if less than 36 months). A Termination of Employment will be determined in accordance with treasury Regulation 1.409A-1(h)(l)(ii). |
(38) | Total Disability shall mean a physical or mental impairment that causes a Participant to be unable to engage in any substantial gainful activity, which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. Such determination of disability may be made by the Social Security Administration or may be made pursuant to the Companys long term disability insurance program. | ||
(39) | Vested Benefit shall mean the benefit determined in accordance with Article VII hereof. |
(b) | Throughout this Plan, and whenever appropriate, the masculine gender shall be deemed to include the feminine and neuter, the single shall be deemed to include the plural and vice versa. |
(a) | Eligibility for Participation in the Plan . The Chief Executive Officer of the Company shall nominate executive or highly paid management employees of the Employer whose compensation exceeds the limit set forth under Section 401(a)(17) of the Internal Revenue Code for participation in the Plan. The Committee shall make the final decision as to those executives or highly paid management employees who shall become Participants in the Plan. Newly appointed executive or highly paid management employee shall become Participants in the Plan effective as of the next following January 1. | |
(b) | Eligibility for Benefits . A Participant shall be entitled to receive a Supplemental Executive Retirement Benefit (or have a Supplemental Executive Retirement Benefit provided for his surviving Spouse) only if he satisfies the conditions of this Article IV and satisfies the qualification requirements of any of the Articles under the Plan to become eligible to receive a benefit thereunder. | |
(c) | Initial election . Within 30 days of becoming a Participant in the Plan, each Participant shall file an election with the Committee designating what optional form of payment under Article XI shall be paid on account of his Separation from Service. |
6
(d) | Vesting . A Participant shall be vested hereunder upon attaining ten years of Company Service or upon meeting the requirements for a Retirement Benefit, Disability Benefit, or Change in Control Benefit hereunder. | |
(e) | Forfeiture of Plan Benefits . In the absence of a Change in Control or a finding of Total Disability, a Participants participation shall cease and no benefits under this Plan shall be payable: |
(i) | to a Participant if the Participant: |
(A) | voluntarily terminates employment before completing at least ten years of Company Service; or | ||
(B) | fails to give an Employer six months written advance notice of his pending voluntary Termination of Employment if he is leaving Diebold prior to age 55 (or three months written advance notice if he is leaving Diebold at age 55 or later); or | ||
(C) | is Terminated for Cause; or |
(ii) | to a Participants Spouse, if the Participant: |
(A) | dies prior to satisfying the requirements for a Spouses Pre-Retirement or Post-Retirement Death benefit under Article X; or | ||
(B) | is Terminated for Cause. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who attains age 65 while employed by an Employer shall be eligible, at any time after his said attainment of age 65, to retire and receive a Normal Retirement Benefit commencing at the time set forth in Article XI. | |
(b) | Computation of Amount of Normal Retirement Benefit . A Participant who retires under Section (a) shall be entitled to receive a monthly Supplemental Executive Retirement Benefit equal to 50% of the Participants Final Average Monthly Compensation multiplied by his Service Fraction, reduced by the sum of: |
(i) | 50% of the monthly Social Security Benefit payable to the Participant commencing on the first day of the month coincident with or following his Separation from Service; and | ||
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan commencing on the first day of the month coincident with or following his Separation from Service, assuming: |
7
(A) | for purposes of determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the Qualified Retirement Plan and a right to commence receiving such benefit the first of the month coincident with or next following his Separation from Service, and | ||
(B) | that the Participant elected commencement of such benefit on such date; and |
(iii) | the monthly benefit (expressed as a single life annuity) payable to the Participant under the terms of the Pension Restoration SERP commencing on the first day of the month coincident with or following his Separation from Service; and | ||
(iv) | the monthly benefit derived from the Company matching contribution under the terms of the 401(k) Restoration SERP, assuming the Participant receives the full match available in an amount equal to three percent (3%) of Annual Compensation (as such term is defined in the 401(k) Restoration SERP), in excess of the IRC §401(a)(17) limit, accumulated to the first day of the month coincident with or following his Separation from Service with interest at a fixed rate of eight percent (8%) and converted to a single life annuity using the mortality table prescribed in Revenue Ruling 2001-62 and an interest rate of seven percent (7%). |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who attains his Early Retirement Age while employed by an Employer shall be eligible to retire and receive an Early Retirement Benefit commencing at the time set forth in Article XI. | |
(b) | Computation of Amount of Early Retirement Benefit . A Participant who has Termination of Employment after meeting the requirements under Section (a) shall be entitled to receive a monthly Early Retirement Benefit equal to 50% of the Participants Final Average Monthly Compensation multiplied by his Service Fraction reduced by the sum of: |
(i) | 50% of the monthly Social Security Benefit payable to the Participant commencing on his Normal Retirement Date; and |
8
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan commencing on his Normal Retirement Date, assuming: |
(A) | for purposes for determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the Qualified Retirement Plan and a right to commence receiving such benefit on his Normal Retirement Date, and | ||
(B) | that the Participant elected commencement of such benefit as of such date; and |
(iii) | the monthly benefit (expressed as a single life annuity) payable to the Participant under the terms of the Pension Restoration SERP commencing as of his Normal Retirement Date; and | ||
(iv) | the monthly benefit derived from the Company matching contribution under the terms of the 401(k) Restoration SERP, assuming the Participant receives the full match available in an amount equal to three percent (3%) of Annual Compensation (as such term is defined in the 401(k) Restoration SERP) in excess of the IRC §401(a)(17) limit, accumulated to the first day of the month coincident with or following his Normal Retirement Date with interest at a fixed rate of eight percent (8%) and converted to a single life annuity using the mortality table prescribed in Revenue Ruling 2001-62 and an interest rate of seven percent (7%). |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who has a Termination of Employment before he reaches his Early Retirement Age and after the Participant has completed ten or more years of Company Service shall be eligible to receive a Vested Benefit commencing at the time set forth in Article XI. |
9
(b) | Computation of Amount of Vested Benefit . A Participant who is eligible for an Vested Benefit shall be entitled to receive a monthly Vested Benefit equal to 50% of the Participants Final Average Monthly Compensation multiplied by his Service Fraction, reduced by the sum of: |
(i) | 50% of the monthly Social Security Benefit payable to the Participant commencing on his Normal Retirement Date; and | ||
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan commencing on his Normal Retirement Date), assuming: |
(A) | for purposes of determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the Qualified Retirement Plan and a right to commence receiving such benefit at his Normal Retirement Date, and | ||
(B) | that the Participant elected commencement of such benefit as of such date; and |
(iii) | the monthly benefit (expressed as a single life annuity) payable to the Participant under the terms of the Pension Restoration SERP commencing as of his Normal Retirement Date; and | ||
(iv) | the monthly benefit derived from the Company matching contribution under the terms of the 401(k) Restoration SERP, assuming the Participant receives the full match available in an amount equal to three percent (3%) of Annual Compensation (as such term is defined in the 401(k) Restoration SERP) in excess of the IRC §401(a)(17) limit, accumulated to his Normal Retirement Date with interest at a fixed rate of eight percent (8%) and converted to a single life annuity using the mortality table prescribed in Revenue Ruling 2001-62 and an interest rate of seven percent (7%). |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, if a Participant incurs a Termination of Employment after completing 15 years of Company Service but before he reaches |
10
his Early Retirement Age by reason of his Total Disability, such Participant shall be eligible to receive a Disability Benefit commencing at the time set forth in Article XI. |
(b) | Computation of Amount of Disability Benefit . A Participant who is eligible for a Disability Benefit shall be entitled to receive a Disability Benefit equal to 50% of the Participants Final Average Monthly Compensation multiplied by his Service Fraction, reduced by the sum of: |
(i) | 50% of the monthly Social Security Benefit that would be payable to the Participant on account of his Total Disability if he were determined to be entitled to receive a Social Security Benefit as a result of his Total Disability (whether or not the Participant in fact qualifies for such Social Security Benefit); and | ||
(ii) | the monthly benefit (expressed as a single life annuity, but not including any temporary supplements) that would be payable to the Participant under the terms of the Qualified Retirement Plan on account of his Total Disability if he were determined to be entitled to receive a monthly disability benefit under the Qualified Retirement Plan as a result of his Total Disability (whether or not the Participant in fact qualifies for such monthly disability benefit), assuming, for purposes of determining the Participants eligibility for a disability pension under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to be eligible for a disability pension thereunder; and | ||
(iii) | the monthly benefit (expressed as a single life annuity) payable to the Participant under the terms of the Pension Restoration SERP commencing on the first day of the month coincident with or following his Termination of Employment due to Total Disability; and | ||
(iv) | the monthly benefit derived from the Company matching contribution under the terms of the 401(k) Restoration SERP, assuming the Participant receives the full match available in an amount equal to three percent (3%) of Annual Compensation (as such term is defined in the 401(k) Restoration SERP) in excess of the IRC §401(a)(17) limit, accumulated to the first day of the month coincident with or following his Termination of Employment due to Total Disability with interest at a fixed rate of eight percent (8%) and converted to a single life annuity using the mortality table prescribed in Revenue Ruling 2001-62 and an interest rate of seven percent (7%). |
(a) | Qualification for Benefit . A Participant who (1) has a Termination of Employment with the Employer within 24 months following a Change in Control and (2) is not at the time of such |
11
Termination of Employment eligible for a Normal Retirement Benefit, an Early Retirement Benefit, a Vested Benefit or a Disability Benefit, shall be eligible for a Change in Control Benefit commencing at the time set forth in Article XI. |
(b) | Change in Control shall mean that: |
(i) | The Company is merged or consolidated or reorganized into or with another corporation or other legal person, and as a result of such merger, consolidation or reorganization less than a majority of the combined voting power of the securities of such corporation or person that are outstanding immediately following the consummation of such transaction is held in the aggregate by the holders of Voting Stock (as hereinafter defined) of the Company immediately prior to such transaction. | ||
(ii) | The Company sells or otherwise transfers all or substantially all of its assets to any other corporation or other legal person, and as a result of such sale or transfer less than a majority of the combined voting power of the securities of such corporation or person that are outstanding immediately following the consummation of such sale or transfer is held in the aggregate by the holders of Voting Stock (as hereinafter defined) of the Company immediately prior to such sale or transfer. | ||
(iii) | There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report) thereto, each as promulgated pursuant to the Securities and Exchange of 1934, as amended (the Exchange Act), disclosing that any person (as the term person is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term beneficial owner is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 20 percent or more of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the Company (the Voting Stock); | ||
(iv) | The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) that a change in control of the Company has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction; or | ||
(v) | If during any period of two consecutive years, individuals who at the beginning of any such period constitute the Board cease for any reason to constitute at least a majority of the members thereof, unless the election or the nomination for election by the Companys stockholders, of each member of the Board first elected during such period was approved |
12
by a vote of at least two-thirds of the member of the Board then still in office who were members of the Board at the beginning of any such period. |
(c) | Computation of Amount of Change in Control Benefit . A Participant who is eligible for a Change in Control Benefit shall be entitled to receive a monthly Change in Control Benefit equal to 50% of the Participants Final Average Monthly Compensation multiplied by his Service Fraction, reduced by the sum of: |
(i) | 50% of the monthly Social Security Benefit payable to the Participant commencing on his Normal Retirement Date; and | ||
(ii) | the monthly benefit (expressed as a single life annuity not including any temporary supplements) payable to the Participant under the terms of the Qualified Retirement Plan commencing on his Normal Retirement Date assuming: |
(A) | for purposes of determining whether the Participant had a vested benefit under the Qualified Retirement Plan and when the Participant could elect commencement of his benefit under the Qualified Retirement Plan (but not for purposes of determining the amount thereof), that the Participant had sufficient service under the Qualified Retirement Plan to have a vested benefit under the |
13
Qualified Retirement Plan and a right to commence receiving such benefit at his Normal Retirement Date, and |
(B) | that the Participant elected commencement of such benefit as of such date; and |
(iii) | the monthly benefit (expressed as a single life annuity) payable to the Participant under the terms of the Pension Restoration SERP commencing on his Normal Retirement Date; and | ||
(iv) | the monthly benefit derived from the Company matching contribution under the terms of the 401(k) Restoration SERP, assuming the Participant receives the full match available in an amount equal to three percent (3%) of Annual Compensation (as such term is defined in the 401(k) Restoration SERP) in excess of the IRC §401(a)(17) limit, commencing on his Normal Retirement Date with interest at a fixed rate of eight percent (8%) and converted to a single life annuity using the mortality table prescribed in Revenue Ruling 2001-62 and an interest rate of seven percent (7%). |
(a) | Pre-Retirement . |
(i) | Qualification for Benefit . Subject to the provisions of Article IV, if a Participant dies with ten (10) years of Company Service but before commencing to receive payment of a Supplemental Executive Retirement Benefit, the surviving Spouse of such deceased Participant shall be eligible for a Pre-Retirement Death benefit commencing at the time set forth in Article XI. | ||
(ii) | Computation of Amount of Pre-Retirement Death Benefit . The amount of the Pre-Retirement Death Benefit shall be equal to 50% of the reduced monthly amount which would have been payable to the Participant. The reduced monthly amount which would have been payable to the Participant is: the 50% Joint and Survivor Annuity to which a Participant would have been entitled if he had a Separation from Service on the date of his death; survived to the commencement date set forth in Article XI; and retired on such date with a 50% Joint and Survivor Annuity. The monthly benefit specified herein shall be actuarially reduced using the assumptions specified in Article III for each full month by which the date of commencement precedes the Participants Normal Retirement Date. |
14
(iii) | Form and Duration of Payment . The Pre-Retirement Death Benefit shall be a monthly benefit payable from the date of commencement set forth in Article XI until the first day of the month that includes the date of the death of the surviving Spouse. |
(b) | Post-Retirement Death Benefit . |
(i) | Qualification for Benefit . The surviving Spouse of a deceased Participant who has died while receiving Supplemental Executive Retirement Benefits (including Disability Benefits) under the Plan and whose optional form of payment elected at retirement provides for a survivor benefit shall be eligible for the Post-Retirement Death Benefit described in paragraph (ii) of this Section. | ||
(ii) | Computation of Amount of Annual Benefit . The Post-Retirement Death Benefit shall be a monthly benefit in an amount equal to either: |
(A) | 100%, or | ||
(B) | 50% |
(a) | Optional forms of Benefits . A Participant may elect to receive his Supplemental Executive Retirement Benefits in any of the following optional forms of payment: |
(i) | a single life annuity; | ||
(ii) | a 50% Joint and Survivor Annuity (available only if married); or | ||
(iii) | a 100% Joint and Survivor Annuity (available only if married). |
(b) | Timing of Benefit Payments . Plan Benefits shall commence at the following times for each of the identified Plan Benefits: |
(i) | Normal Retirement Benefits under Article V shall commence as of the later of the Participants Normal Retirement Date or the first of the month coincident with or next following his actual Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall commence on the first day of the month which follows the expiration of a period of six months from the Participants Separation from |
15
Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. |
(ii) | Early Retirement Benefits under Article VI shall commence on the first day of the month following the later of the Participants attaining his Early Retirement Age or his actual Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall commence on the first day of the month which follows the expiration of a period of six months from the Participants Separation from Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. | ||
(iii) | Vested Benefits under Article VII shall commence on the first day of the month following the later of the month in which the Participant attains Early Retirement Age or Participants actual Separation from Service; provided, however, if such Participant is a Specified Employee, payment shall not commence prior to the first day of the month which follows the expiration of a period of six months from the date of Participants Separation from Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. | ||
(iv) | Disability Benefits under Article VIII shall commence on an unreduced actuarial basis, on the first day of the month following the month of Participants Separation from Service by reason of Total Disability. Payments shall continue until the earlier of the first day of the month for which the Participant is determined to no longer have a Total Disability or the first day of the month in which the Participant dies (unless a survivor annuity option has been selected, in which case payments shall continue to the Participants Surviving Spouse). The Committee may, in its discretion, take such steps as it deems necessary to determine the continued existence of a Participants Total Disability and may cease the Disability Benefit payable hereunder if it is established to the Committees satisfaction (as determined under the same standards recognized at the time Participant was determined as suffering a Total Disability) that such Total Disability no longer exists or Social Security Disability Benefits are no longer being paid. If a Participants Disability Benefit ceases because the Participant has recovered from the Total Disability, the Participant may be eligible for a benefit under the other provisions of the Plan. | ||
(v) | Change in Control Benefits under Article IX shall commence on the first day of the month following the later of the month in which the Participant attains Early Retirement Age or Participants Separation from Service; provided, however, if such Participant is a |
16
Specified Employee, payment shall not commence prior to the first day of the month which follows the expiration of a period of six months from the Participants Separation from Service. Benefits payable during such six-month period shall be accumulated and paid at the time of commencement of payments. |
(vi) | Death Benefits under Article X shall be paid as follows: |
(A) | Pre-Retirement Death Benefits shall commence the later of the date the Participant attains Early Retirement Age or his date of death. | ||
(B) | Post-Retirement Death Benefits shall commence as of the first day of the month immediately following the date of the Participants death, and shall continue to be paid as of the first day of each month thereafter until the first day of the month that includes the date of the death of the surviving Spouse. |
(vii) | Notwithstanding the foregoing, any Plan Benefit payable hereunder will be treated as made as stated herein if the payment is made at such time or a later date within the same calendar year or, if later, by the 15 th day of the third calendar month following such date. | ||
(viii) | Transitional Elections . During 2008, Participants were permitted to make new elections regarding the form of payment of their Supplemental Executive Retirement Benefit, subject to the following rules: |
(A) | such elections were required to be made no later than December 31, 2008, | ||
(B) | such elections could not change a payment that would otherwise have become payable in 2008 or cause payments to be made in 2008 that would otherwise be paid at a later date, and | ||
(C) | such elections were made pursuant to such administrative rules as the Committee prescribed. |
(ix) | Withholding of Taxes . The benefits payable under the Plan shall be subject to the deduction of any federal, state or local income taxes, Federal Insurance Contributions Act (FICA), FUTA or other taxes that are required to be withheld from such payments by applicable laws and regulations. | ||
(x) | Acceleration of Payments . Notwithstanding this Article XI, each Participants Supplemental Executive Retirement Benefit shall be paid to him upon termination of the Plan to the extent provided in Article XIV. |
17
(xi) | Delay of Payment . Notwithstanding this Article XI, the Company may delay the payment of all or any portion of the Participants Supplemental Executive Retirement Benefit as follows: |
(A) | The Committee reasonably anticipates that if the Supplemental Executive Retirement Benefits were made as scheduled, the Companys deduction with respect to such payments would not be permitted under Section 162(m) of the Code; provided such payments are then made during the Participants first taxable year in which the Committee reasonably anticipates that the Companys deduction would not be barred by application of Section 162(m) of the Code. | ||
(B) | The Committee reasonably anticipates that making scheduled payments would violate Federal Securities laws or applicable laws; provided such payments are then made at the earliest date at which the Committee reasonably contemplates that making the scheduled payments will not cause such a violation. |
(a) | Administration by Committee . The Committee shall be charged with the administration of the Plan. | |
(b) | Powers of the Committee . The Committee shall have all such powers as may be necessary to discharge its duties relative to the administration of the Plan, including, by way of illustration and not limitation, discretionary authority to interpret and construe the Plan, to determine and decide all questions of fact, and all disputes, arising under the Plan including, but not limited to, the eligibility of any employee to participate hereunder, the validity of any Election of Deferral or other election as may be necessary or appropriate hereunder and the right of any employee to benefits payable hereunder. The Committee shall have all power necessary to adopt, alter and repeal such administrative rules, regulations and practices governing the operation of the Plan as it, in its sole discretion, may from time to time deem advisable. | |
(c) | Committee Actions . The Committee shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of the Plan unless attributable to willful misconduct or gross negligence. The Committee shall be entitled to conclusively rely upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Company with respect to the Plan. Participants who are members of the Committee shall not participate in any action or determination regarding solely their own benefits payable hereunder. All decisions of the Committee shall be by majority of the votes cast and, except as provided in Section (d) of this |
18
Article XII, decisions of the Committee made in good faith shall be final, conclusive and binding upon all parties. |
(d) | Claims and Review Procedure . The Committee shall be responsible for the claims procedure under the Plan. An application for benefits under the Plan shall be considered a claim for purposes of this Section (d). Until modified by the Committee, the claims and review procedure set forth in this Section shall be the mandatory claims and review procedure for the resolution of disputes and disposition of claims filed under the Plan. |
(i) | Initial Claim . An individual may, subject to any applicable deadline, file with the Committee a written claim for benefits under the Plan in a form and manner prescribed by the Committee. |
(A) | If the claim is denied in whole or in part, the Committee shall notify the claimant of the adverse benefit determination within 90 days after the receipt of the claim. | ||
(B) | The 90-day period for making the claim determination may be extended for 90 days if the Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Committee notifies the claimant, prior to the expiration of the initial 90-day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made. |
(ii) | Notice of Initial Adverse Determination . A notice of an adverse determination shall be set forth in a manner calculated to be understood by the claimant. |
(A) | the specific reasons for the adverse determination; | ||
(B) | references to the specific provisions of the Plan document (or other applicable Plan document) on which the adverse determination is based; | ||
(C) | a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and | ||
(D) | a description of the claims review procedure, including the time limits applicable to such procedure, and a statement of the claimants right to bring a civil action under ERISA Section 502(a) following an adverse determination on review. |
(iii) | Request for Review . Within 60 days after receipt of an initial adverse benefit determination notice, the claimant may file with the Committee a written request for a review of the adverse determination and may, in connection therewith submit written comments, documents, records and other information relating to the claim benefits. Any request for review of the initial adverse determination not filed within 60 days after receipt of the initial adverse determination notice shall be untimely. |
19
(iv) | Claim on Review . If the claim, upon review, is denied in whole or in part, the Committee shall notify the claimant of the adverse benefit determination within 60 days after receipt of such a request for review. |
(A) | The 60-day period for deciding the claim on review may be extended for 60 days if the Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Committee notifies the claimant, prior to the expiration of the initial 60-day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made. | ||
(B) | In the event that the time period is extended due to a claimants failure to submit information necessary to decide a claim on review, the claimant shall have 60 days within which to provide the necessary information and the period for making the claim determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information or, if earlier, the expiration of 60 days. | ||
(C) | The Committees review of a denied claim shall take into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. |
(v) | Notice of Adverse Determination for Claim on Review . A notice of an adverse determination for a claim on review shall set forth in a manner calculated to be understood by the claimant: |
(A) | the specific reasons for the denial; | ||
(B) | references to the specific provisions of the Plan document (or other applicable Plan document) on which the adverse determination is based. | ||
(C) | a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimants claim for benefits; | ||
(D) | a statement describing any voluntary appeal procedures offered by the Plan and the claimants right to obtain information about such procedures; and | ||
(E) | a statement of the claimants right to bring an action under ERISA §502(a). |
20
(e) | Deadline to File Claim . To be considered timely under the Plans claim and review procedure, a claim must be filed with the Committee within 1 year after the claimant knew or reasonably should have known of the principal facts upon which the claim is based. | |
(f) | Exhaustion of Administrative Remedies . The exhaustion of the claim and review procedure is mandatory for resolving every claim and dispute arising under the Plan as to such claims and disputes. |
(i) | No claimant shall be permitted to commence any legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not statutory, until the claim and review procedure set forth herein have been exhausted in their entirety; and | ||
(ii) | In any such legal action all explicit and all implicit determinations by the Committee (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law. |
(g) | Deadline to File Legal Action . No legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 of ERISA or under any other provision of law, whether or not statutory, may be brought by any claimant on any matter pertaining to the Plan unless the legal action is commenced in the proper forum before the earlier of: |
(i) | 30 months after the claimant knew or reasonably should have known of the principal facts on which the claim is based, or | ||
(ii) | 6 months after the claimant has exhausted the claim and review procedure. |
(h) | Knowledge of Fact by Participant Imputed to Beneficiary . Knowledge of all facts that a Participant knew or reasonably should have known shall be imputed to every claimant who is or claims to be a Beneficiary of the Participant or otherwise claims to derive an entitlement by reference to the Participant. | |
(i) | Information Furnished by Participants . Neither the Company nor the Committee shall be liable or responsible for any error in the computation of the accrued benefit of a Participant resulting from any misstatement of fact made by the Participant, directly or indirectly, to the Company or the Committee, and used by it in determining the Participants accrued benefit. The Company and the Committee shall not be obligated or required to increase the accrued benefit of such Participant which, on discovery of the misstatement, is found to be understated as a result of such misstatement of the Participant. However, the accrued benefit of any Participant which is overstated by reason of any such misstatement shall be reduced to the amount appropriate in view of accurate facts. |
21
(j) | Overpayments . If a payment or series of payments made from this Plan is found to be greater than the accrued benefit to which a Participant or Beneficiary is entitled due to factual errors, mathematical errors or otherwise, the Committee may, in its discretion and to the extent consistent with Code §409A, and in addition to or in lieu of any other legal remedies it may have, suspend or reduce future benefits to such Participant or Beneficiary as it deems appropriate to correct the overpayment. |
(a) | Funding . The obligation of the Employers to pay benefits under the Plan constitutes the unsecured promise of the Employers to make payments from their general assets, and no Participant or Spouse shall have any interest in, or a lien or prior claim upon, any property of the Employers. With respect to the benefits under the Plan, each Participant or Spouse shall have the status of a general unsecured creditor of the Participants Employer. The Company may establish a so-called rabbi trust to hold funds, stock or other securities to be used in payment of the obligations of the Employers under the Plan, and may fund such trust; provided, however, that any funds contained therein shall remain subject to the claims of the general creditors of the Company or any other Employer for which the Participant performs services. It is the intention of the Employers that the Plan be unfunded for tax purposes and for purposes of Title I of ERISA. No liability for the payment of benefits under the Plan shall be imposed upon any officer, director, employee or stockholder of the Company or any other Employer, or upon the Board, the Committee or any member thereof. | |
(b) | No Guaranty of Benefits . Nothing contained in this Plan shall constitute a guaranty by any Employer, the Committee or the Board that the assets of any Employer will be sufficient to pay any benefit hereunder. | |
(c) | Assignments and Restrictions . To the extent permitted by law, and except as otherwise provided in this Section (c), no right or interest of a Participant or Spouse under this Plan shall be transferable or assignable (either at law or in equity) nor shall any such right or interest be subject to alienation, anticipation, encumbrance, attachment, garnishment, levy, execution or other legal or equitable process of any kind, voluntary or involuntary, or in any manner be liable for or subject to the debts of any Participant or Spouse. If a Participant shall attempt to or shall transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his benefits hereunder or any part thereof, or if by reason of his bankruptcy or other event happening at any time such benefits would devolve upon anyone else or would not be enjoyed by him, then the Company, in its |
22
discretion, may terminate his interest in any such benefit to the extent the Company considers necessary or advisable to prevent or limit the effects of such occurrence. Termination shall be effected by filing a termination declaration with the Committee and making reasonable efforts to deliver a copy to the Participant (the Terminated Participant) whose interest is affected thereby. As long as the Terminated Participant is alive, any benefits affected by the termination shall be retained by the Company and, in the Companys sole and absolute judgment, may be paid to or expended for the benefit of the Terminated Participants, his spouse, his children or any other person or persons in fact dependent upon him in such a manner as the Company shall deem proper. Upon the death of the Terminated Participant, all benefits withheld from him and not paid to others in accordance with the preceding sentence shall be paid to the Terminated Participants surviving Spouse or, if none, to the Terminated Participants then living descendants, including adopted children, per stripes . | ||
Notwithstanding the foregoing, amounts payable under this Plan may be withheld by the Company as they become due to the extent necessary to cover any debts or other obligations owed to the Company by the Participant, but only if such debts or other obligations are acknowledged as such in writing by the Participant or are confirmed as such by a final, nonappealable order of a court of competent jurisdiction. |
(d) | Headings . The various headings used in this Plan are for convenience only and shall not be used in interpreting the test of the Article, Section, paragraph or subparagraph in which they appear. | |
(e) | Employment . The establishment of this Plan shall not be construed to give any Participant the right to be retained in the service of the Employer. | |
(f) | Applicable Law . The validity, interpretation, construction and performance of this Plan shall be governed by the internal substantive laws of the State of Ohio, without giving effect to the principles of conflict of laws of such State. | |
(g) | Binding Effect on Employer, Participants, Spouses and Their Successors . This Plan shall be binding and inure to the benefit of any Employer or its successors and assigns, and the Participants, Spouses and their heirs, legatees, distributes, executors, administrators or other legal representatives. | |
(h) | Participant Information . Each participant shall keep the Committee informed of his current address and the current address of his Spouse, if applicable. The Participant shall furnish to the Committee any and all information deemed by the Committee to be necessary or desirable for the proper administration of the Plan. | |
(i) | Incapacity . In the event that a Participant or Spouse is declared incompetent and a guardian, conservator or other person is appointed and legally charged with the care of the person or the |
23
persons estate, the payments under the Plan to which such Participant or Spouse is entitled shall be paid to such guardian, conservator or other person legally charged with the care of the person or the estate. Except as provided hereinabove, when the Company, in its sole discretion, determines that the Participant or Spouse is unable to manage his or her financial affairs, the Company may make distribution(s) of the amounts payable to such Participant or Spouse to any one or more of the spouse, lineal ascendants or descendants or other closest living relatives of such Participant or Spouse who demonstrate to the satisfaction of the Company the propriety of making such distribution(s). Any payment so made shall not exceed such amount as is permitted under Section 409A of the Code and shall be in complete discharge of any liability under this Agreement for such payment. The Company shall not be required to see to the application of any such distribution made under this Section. |
(j) | Code Section 409A . To the extent applicable, it is intended that this Plan and the benefits payable hereunder comply with the provisions of Section 409A of the Code. The Plan and the benefits payable hereunder shall be administered in a manner consistent with this intent, and any provision that would cause the Plan or benefit payable hereunder to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of Participants). |
(a) | Amendment . The Plan may be amended from time to time in any respect whatsoever by the Company and by the Committee to the extent consistent with its delegated authority. Any such amendment may be retroactive, prospective or both. No such amendment of the Plan document or termination of the Plan, however, shall reduce a Participants accrued benefit earned as of the date of such amendment unless the Participant so affected consents in writing to the amendment or such amendment is deemed necessary by the Company to affect the intended purposes of this Plan and/or to comply with applicable law. | |
(b) | Termination . The Company reserves the right to discontinue benefit accruals at any time. The Company also reserves the right to cause an acceleration of the time and form of a Plan payment where the acceleration of such payment is made in accordance with one of the following provisions: |
(i) | Dissolution or Bankruptcy . At the discretion of the Company within 12 months of a corporate dissolution taxed under Code §331 or with the approval of a bankruptcy court |
24
pursuant to 11 U.S.C. §503(b)(1)(A), provided that Plan benefits are included in the Participants gross incomes in the latest of: |
(A) | the calendar year in which the Plan termination and liquidation occurs; | ||
(B) | the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or | ||
(C) | the first calendar year in which payment is administratively feasible. |
(ii) | Discretionary Termination . At the discretion of the Company, provided that: |
(A) | the termination and liquidation does not occur proximate to a downturn in the financial health of the Company; | ||
(B) | all other arrangements sponsored by the Company that would be aggregated with this arrangement under Code §409A are also terminated, to the extent any Participant in this Plan also has a benefit under any such other arrangement; | ||
(C) | no payments in liquidation of the Plan, other than payments that would have been made under this Plan had the termination not occurred, are made from the Plan within 12 months of the termination; | ||
(D) | all benefits are fully distributed within 24 months of such termination; and | ||
(E) | the Company does not adopt a new arrangement that would be aggregated under Code §409A with this Plan for 3 years following the date the Company has taken all necessary action to irrevocably terminate and liquidate this Plan |
25
DIEBOLD, INCORPORATED | ||||||
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By: | |||||
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Its: | |||||
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26
ARTICLE I PLAN
|
1 | |||
ARTICLE II PURPOSE OF THE PLAN
|
1 | |||
ARTICLE III DEFINITIONS
|
1 | |||
(1) Affiliate
|
1 | |||
(2) Annual Compensation
|
2 | |||
(3) Annual Incentive Bonus
|
2 | |||
(4) Base Salary
|
2 | |||
(5) Basic Matching Contribution Account
|
2 | |||
(6) Beneficiary
|
2 | |||
(7) Board
|
2 | |||
(8) Change in Control
|
2 | |||
(9) Change in Control Benefit
|
2 | |||
(10) Code
|
2 | |||
(11) Committee
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2 | |||
(12) Company
|
2 | |||
(13) Company Service
|
2 | |||
(14) Death Benefit
|
3 | |||
(15) Deferral Election
|
3 | |||
(16) Deferred Compensation
|
3 | |||
(17) Deferred Compensation Account
|
3 | |||
(18) Disability Benefit
|
3 | |||
(19) Early Retirement Age
|
3 | |||
(20) Employer
|
3 | |||
(21) Enhanced Matching Contribution Account
|
3 | |||
(22) Normal Retirement Age
|
3 | |||
(23) Participant
|
3 | |||
(24) Plan
|
3 |
(i)
(25) Plan Account
|
3 | |||
(26) Plan Year
|
3 | |||
(27) Retirement Benefit
|
3 | |||
(28) Separation from Service
|
3 | |||
(29) Specified Employee
|
4 | |||
(30) Spouse
|
4 | |||
(31) Termination for Cause
|
4 | |||
(32) Termination of Employment
|
5 | |||
(33) Total Disability
|
5 | |||
(34) Vested Benefit
|
5 | |||
ARTICLE IV ELIGIBILITY, PARTICIPATION AND VESTING
|
5 | |||
(a) Eligibility for Participation in the Plan
|
5 | |||
(b) Eligibility for Benefits
|
6 | |||
(c) Vesting
|
6 | |||
(d) Forfeiture of Plan Benefits
|
6 | |||
ARTICLE V PARTICIPANT DEFERRALS
|
6 | |||
(a) Eligibility to Defer
|
6 | |||
(b) Participant Deferrals
|
7 | |||
(c) Rules Regarding Deferral Elections
|
7 | |||
(d) Performance Based Compensation
|
7 | |||
(e) Evergreen Deferral Election
|
7 | |||
(f) Deferred Compensation Account
|
8 | |||
ARTICLE VI MATCHING CONTRIBUTIONS AND EARNINGS
|
8 | |||
(a) Basic Matching Contributions
|
8 | |||
(b) Enhanced Matching Contributions
|
8 | |||
(c) Timing of Employer Matching Contributions
|
8 | |||
(d) Investment Earnings
|
9 | |||
ARTICLE VII RETIREMENT BENEFITS
|
9 | |||
(a) Qualification of Benefit
|
9 | |||
(b) Computation of Amount of Retirement Benefit
|
9 | |||
ARTICLE VIII VESTED BENEFIT
|
9 | |||
(a) Qualification for Benefit
|
9 | |||
(b) Computation of Amount of Vested Benefit
|
9 |
(ii)
ARTICLE IX DISABILITY BENEFIT
|
10 | |||
(a) Qualified for Benefit
|
10 | |||
(b) Computation of Amount of Disability Benefit
|
10 | |||
ARTICLE X BENEFIT UPON CHANGE IN CONTROL
|
10 | |||
(a) Qualification for Benefit
|
10 | |||
(b) Change in Control
|
10 | |||
(c) Computation of Amount of Change in Control Benefit
|
12 | |||
ARTICLE XI DEATH BENEFIT
|
12 | |||
(a) Qualification for Benefit
|
12 | |||
(b) Computation of Amount and Form of Distribution of the Death Benefit
|
12 | |||
ARTICLE XII FORM AND TIMING OF PAYMENT
|
12 | |||
(a) Automatic Form of Payment
|
12 | |||
(b) Timing of Benefit Payment
|
12 | |||
(c) Delay of Payment
|
13 | |||
ARTICLE XIII PLAN ADMINISTRATION
|
13 | |||
(a) Administration by Committee
|
13 | |||
(b) Powers of the Committee
|
13 | |||
(c) Committee Actions
|
13 | |||
(d) Claims and Review Procedure
|
14 | |||
(e) Deadline to File Claim
|
16 | |||
(f) Exhaustion of Administrative Remedies
|
16 | |||
(g) Deadline to File Legal Action
|
16 | |||
(h) Knowledge of Fact by Participant Imputed to Beneficiary
|
16 | |||
(i) Information Furnished by Participants
|
16 | |||
ARTICLE XIV MISCELLANEOUS
|
17 | |||
(a) Funding
|
17 | |||
(b) No Guaranty of Benefits
|
17 | |||
(c) Assignments and Restrictions
|
17 | |||
(d) Headings
|
18 | |||
(e) Employment
|
18 | |||
(f) Applicable Law
|
18 | |||
(g) Binding Effect on Employer, Participants, Spouses and Their Successors
|
18 | |||
(h) Participant Information
|
18 |
(iii)
(i) Incapacity
|
19 | |||
(j) Code Section 409A
|
19 | |||
ARTICLE XV AMENDMENT AND TERMINATION
|
19 | |||
(a) Amendment
|
19 | |||
(b) Termination
|
19 |
(iv)
(a) | The following definitions shall apply with respect to this Plan: |
(1) | Affiliate shall mean any entity included with the Company in a controlled group of corporations or trades or businesses under common control within the meaning of Code §414(b) or §414(c), an affiliated service group within the meaning of Code §414(n), or any other entity required to be aggregated with the Company under Code §414(o). For all purposes under this Plan, in applying Code §1563(a)(1), (2) and (3) for purposes of determining the Companys Affiliates under Code §414(b), the language at least 80% shall be applied as it appears in those sections, and in applying Treas. Reg. §1.414(c)-2 for purposes of determining trades or business |
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(2) | Annual Compensation shall mean a Participants Base Salary from an Employer for any Plan Year including any amounts excluded from the Participants gross income as a deferral under a nonqualified deferred compensation plan of the Company pursuant to a salary reduction agreement plus the Participants Annual Incentive Bonus in the calendar year in which it is paid. Annual Compensation also includes amounts paid to individuals who are citizens or residents of the United States and who are employees of, or provide services to, a foreign Affiliate of the Company to which an agreement entered into by the Company under Code Section 3121(1) applies. |
(3) | Annual Incentive Bonus shall mean the bonus payable to the Participant under the Diebold, Incorporated Annual Incentive Compensation Plan determined before reduction for any contribution to the Qualified 401(k) Plan. | ||
(4) | Base Salary shall mean the Participants regular annual salary determined before reduction for any contributions by the Participant to the Qualified 401(k) Plan. | ||
(5) | Basic Matching Contribution Account shall mean the Participants account which holds Basic Matching Contributions made to a Participant under Article VI, as adjusted for earnings or losses thereon. | ||
(6) | Beneficiary shall mean a person or entity designated by the Participant to receive the Death Benefit payable under this Plan, as are outlined in Article XI. A Beneficiary may, but is not required to, designate a Spouse as the Beneficiary. | ||
(7) | Board shall mean the Board of Directors of Diebold, Incorporated. | ||
(8) | Change in Control shall have the meaning assigned to such term in Article X. | ||
(9) | Change in Control Benefit shall mean the benefit determined in accordance with Article X. | ||
(10) | Code shall mean the Internal Revenue Code of 1986, as amended from time to time. | ||
(11) | Committee shall mean the Compensation Committee of the Board, as such Committee may be constituted from time to time. | ||
(12) | Company shall mean Diebold, Incorporated. | ||
(13) | Company Service shall mean years of employment (measured in years and completed months) with an Employer. |
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(14) | Death Benefit shall mean the benefit determined in accordance with Article XI hereof. | ||
(15) | Deferral Election shall mean a written election form on which a Participant may elect to defer under the Plan a portion of his Annual Compensation. | ||
(16) | Deferred Compensation shall mean the amounts of Annual Compensation actually deferred by a Participant pursuant to a timely written Deferral Election. | ||
(17) | Deferred Compensation Account shall mean the Participants account which holds the amounts deferred by the Participant under Article V, as adjusted for earnings or losses thereon. | ||
(18) | Disability Benefit shall mean the benefit determined in accordance with Article IX hereof. | ||
(19) | Early Retirement Age shall mean the date at which the Participant has attained age 55 and, if the Participant is eligible for an Enhanced Matching Contribution, completed three years of Company Service. | ||
(20) | Employer shall mean (a) the Company or its successors, and (b) an Affiliate which may specifically adopt this Plan with the consent of the Company, or its successors. | ||
(21) | Enhanced Matching Contribution Account shall mean the Participants account which holds Enhanced Matching Contributions made to a Participant under Article VI, as adjusted for earnings or losses thereon. | ||
(22) | Normal Retirement Age shall mean age 65. | ||
(23) | Participant shall mean any executive, or highly paid management employee of an Employer who is selected to participate in this Plan pursuant to the provisions of Article IV. | ||
(24) | Plan shall mean this Diebold, Incorporated 401(k) Restoration Supplemental Executive Retirement Plan, as in effect from time to time. | ||
(25) | Plan Account shall mean the Participants account balance under the Plan which shall equal the total amount of the Deferred Compensation Account and the Basic Matching Contribution Account or the Enhanced Matching Contribution Account, as applicable. | ||
(26) | Plan Year shall mean January 1 through December 31. | ||
(27) | Retirement Benefit shall mean the benefit payable under Article VII hereof. | ||
(28) | Separation from Service shall mean a Participant dies, retires, or otherwise has a Termination of Employment from the Employer. A Separation from Service shall |
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(29) | Specified Employee shall mean a key employee as defined in Code Section 416(i) as further interpreted by the Treasury Regulations issued under Code Section 409A. | ||
(30) | Spouse shall mean the surviving spouse of a Participant at the time of his death, but only if the Participant and such spouse were married at least one year prior to the Participants Separation from Service. | ||
(31) | Termination for Cause shall mean Participants Termination of Employment by an Employer due to the Participants: |
(i) | intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Employer; | ||
(ii) | intentional wrongful damage to property of the Employer; | ||
(iii) | intentional wrongful disclosure of secret processes or confidential information of the Employer; or | ||
(iv) | intentional wrongful engagement in any competitive activity which would constitute a material breach of the duty of loyalty to the Employer and any such at shall have been materially harmful to the Employer. |
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(32) | Termination of Employment shall mean the severing of employment with the Employer, voluntarily or involuntarily. A Participant is presumed to have incurred a Termination of Employment from the Employer where the facts and circumstances indicate that the Employer and the Participant reasonably anticipated that no further services would be performed after a certain date or the level of bona fide services the Participant would perform after such date would permanently decrease to 20% or less of the average level of services over the immediately preceding 36-month period (or the full period of such services, if less than 36 months). A Termination of Employment will be determined in accordance with treasury Regulation 1.409A-1(h)(l)(ii). | ||
(33) | Total Disability shall mean a physical or mental impairment that causes a Participant to be unable to engage in any substantial gainful activity, which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. Such determination of disability may be made by the Social Security Administration or may be made pursuant to the Companys long term disability insurance program. | ||
(34) | Vested Benefit shall mean the benefit determined in accordance with Article VII hereof. |
(b) | Throughout this Plan, and whenever appropriate, the masculine gender shall be deemed to include the feminine and neuter, the singular shall be deemed to include the plural and vice versa. |
(a) | Eligibility for Participation in the Plan . The Chief Executive Officer of the Company shall nominate executive or highly paid management employees of the Employer whose compensation exceeds the limit set forth under Section 401(a)(17) of the Internal Revenue Code for participation in the Plan. The Committee shall make the final decision as to those |
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(b) | Eligibility for Benefits . A Participant shall be entitled to receive a Retirement Benefit (or have a Retirement Benefit provided for his surviving Spouse or Beneficiary) only if he satisfies the conditions of this Article IV and satisfies the qualification requirements of any of the Articles under the Plan to become eligible to receive a benefit thereunder. | |
(c) | Vesting . A Participant shall be vested in the Enhanced Matching Contribution Account upon attaining three years of Company Service, upon meeting the requirements for a Disability Benefit or Change in Control Benefit hereunder, or upon attaining age 65. A Participant shall always be 100%, fully vested in the Deferred Compensation Account and the Basic Matching Contribution Account. | |
(d) | Forfeiture of Plan Benefits . In the absence of a Change in Control or a finding of Total Disability, a Participants participation shall cease and no Employer Matching Contributions under this Plan shall be payable: |
(i) | to a Participant if the Participant: |
(A) | voluntarily terminates employment before completing at least three years of Company Service; or | ||
(B) | fails to give an Employer six months written advance notice of his pending voluntary Termination of Employment if he is leaving Diebold prior to age 55 (or three months written advance notice if he is leaving Diebold at age 55 or later); or | ||
(C) | is Terminated for Cause; or |
(ii) | to a Participants Spouse or Beneficiary, if the Participant: |
(A) | dies prior to satisfying the requirements for a Death Benefit under Article XI; or | ||
(B) | is Terminated for Cause. |
(a) | Eligibility to Defer . A Participant may elect to defer receipt of all or a specified portion of his or her Annual Compensation in excess of the IRS pay limits under Section 401(a)(17) of the Code for a calendar year in accordance with Section (b) of this Article. A |
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(b) | Participant Deferrals . For each Plan Year a Participant may elect to make a Deferral Election of his Annual Compensation as follows: |
1. | Base Salary . A Participant may elect to contribute from 1% to 50% of his Base Salary. | ||
2. | Annual Incentive Bonus . A Participant may elect to contribute 1% to 100% of his Annual Incentive Bonus. |
(c) | Rules Regarding Deferral Elections . Each Deferral Election made by a Participant shall be subject to the following rules: |
1. | Timing of Deferral Election . Each Participant may elect to defer Annual Compensation which he would otherwise become entitled to receive by filing a Deferral Election. For deferrals of Base Salary, such Deferral Election must be filed not later than December 31 of the Plan Year prior to the beginning of the Plan Year to which such Deferral Election applies. For deferrals of Annual Incentive Bonus, such Deferral Election must be filed not later than December 31 of the Plan Year prior to the beginning of the Plan Year to which such Annual Incentive Bonus is earned. |
2. | Irrevocable . Each Participants Deferral Election for a Plan Year shall be irrevocable and shall remain in effect for all such Annual Compensation paid during such Plan Year. Notwithstanding the foregoing, a Participants contributions to the Plan shall cease upon the occurrence of any of the following events: |
(i) | The Participants Total Disability; or | ||
(ii) | The Participants death. |
(d) | Performance Based Compensation . Notwithstanding the foregoing provisions of this Article V, with respect to any performance-based compensation (as determined by the Company in accordance with Section 409A of the Code) based on services performed over a period of at least 12 months, the Company may, in its sole discretion, permit a Participant to complete and deliver an Election Agreement to the Secretary of the Company no later than six months before the end of such period. |
(e) | Evergreen Deferral Election . A Deferral Election that is timely delivered shall be effective for the succeeding year and, except as otherwise specified by a Participant in the Deferral Election, shall continue to be effective from year to year until revoked or modified by written notice to the Secretary of the Company. To be effective for a Plan Year, a |
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(f) | Deferred Compensation Account . In connection with a Participants first Deferral Election pursuant to the terms of the Plan, the Company shall establish a Deferred Compensation Account on its books. The Deferred Compensation Account shall be used to record the Participants Deferred Compensation, Employer Basic or Enhanced Matching contributions as applicable, and any Investment Earnings credited thereon. |
(a) | Basic Matching Contributions . For each Plan Year a Participant hired prior to July 1, 2001 shall be entitled to receive a Company Basic Matching Contribution equal to the sum of the following: |
(1) | 60% times the Participants Deferred Compensation for the calendar year that does not exceed three percent (3%) of his Annual Compensation in excess of the IRS limits imposed by 401(a)(17) of the Code for the calendar year; plus |
(2) | 40% times the Participants Deferred Compensation for the calendar year that exceeds three percent (3%) but not six percent (6%) of his Annual Compensation in excess of the IRS limits imposed by 401(a)(17) of the Code for the calendar year. |
(b) | Enhanced Matching Contributions : For each Plan Year a Participant hired on or after July 1, 2001 shall be entitled to receive a Company Enhanced Matching Contribution equal to the sum of the following: |
(1) | 100% times the Participants Deferred Compensation for the calendar year that does not exceed three percent (3%) of his Annual Compensation in excess of the IRS limits imposed by 401(a)(17) of the Code for the calendar year; plus |
(2) | 60% times the Participants Deferred Compensation for the calendar year that exceeds three percent (3%) but not six percent (6%) of his Annual Compensation in excess of the IRS limits imposed by 401(a)(17) of the Code for the calendar year. |
(c) | Timing of Employer Matching Contributions . Notwithstanding provisions of this Article VI, a Company Basic Matching Contribution or Enhanced Matching Contribution shall not be made on behalf of any Participant who is not employed on the last day of the calendar year; provided, however, if the Participant incurs a Termination of Employment as |
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(d) | Investment Earnings . Participant Deferred Compensation made pursuant to Article V will be deposited as soon as administratively possible after the payroll period in which the Participant Deferred Compensation is made and Matching Contributions made pursuant to Article VI above will be deposited as soon as administratively possible after the end of the calendar year to which the contribution applies and will be held in the Participants Plan Account in a rabbi trust as set forth in Article XIV(a). Contributions will be invested in the investment funds selected by the Participant under the Diebold, Incorporated 401(k) Savings Plan. Any change in the investment funds selected under the Diebold, Incorporated 401(k) Savings Plan will proportionately affect the Participants Plan Account of this Plan. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who attains his Normal Retirement Age or Early Retirement Age while employed by an Employer shall be eligible to retire and receive a Retirement Benefit payable as set forth in Article XII. |
(b) | Computation of Amount of Retirement Benefit . A Participant who retires on or after attaining his Normal Retirement Age or Early Retirement Age shall be entitled to receive a Retirement Benefit equal to his Plan Account. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who has a Termination of Employment before he reaches Normal Retirement Age or Early Retirement Age and has completed 3 years of Company Service (if he was eligible for the Enhanced Matching Contribution) shall be entitled to receive a Vested Benefit equal to his Plan Account payable as set forth in Article XII. |
(b) | Computation of Amount of Vested Benefit . A Participant who is eligible for a Vested Benefit shall be entitled to receive a Vested Benefit equal to his Plan Account. |
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(a) | Qualified for Benefit . Subject to the provisions of Article IV, a Participant who has a Termination of Employment before he reaches his Normal Retirement Age or Early Retirement Age by reason of his Total Disability shall be eligible to receive a Disability Benefit payable as set forth in Article XII. |
(b) | Computation of Amount of Disability Benefit . A Participant who is eligible for a Disability Benefit shall be entitled to receive a Total Disability Benefit equal to his Plan Account. |
(a) | Qualification for Benefit . A Participant who (1) has a Termination of Employment with the Employer within 24 months following a Change in Control and (2) is not at the time of such Termination of Employment eligible for a Retirement Benefit, Vested Benefit or Disability Benefit, shall be eligible for a Change in Control Benefit payable as set forth in Article XII. |
(b) | Change in Control shall mean that: |
(i) | The Company is merged or consolidated or reorganized into or with another corporation or other legal person, and as a result of such merger, consolidation or reorganization less than a majority of the combined voting power of the securities of such corporation or person that are outstanding immediately following the consummation of such transaction is held in the aggregate by the holders of Voting Stock (as hereinafter defined) of the Company immediately prior to such transaction. |
(ii) | The Company sells or otherwise transfers all or substantially all of its assets to any other corporation or other legal person, and as a result of such sale or transfer less than a majority of the combined voting power of the securities of such corporation or person that are outstanding immediately following the consummation of such sale or transfer is held in the aggregate by the holders of Voting Stock (as hereinafter defined) of the Company immediately prior to such sale or transfer. |
(iii) | There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report) thereto, each as promulgated pursuant to the Securities and Exchange of 1934, as amended (the Exchange Act), disclosing that any person (as the term person is used in Section 13(d)(3) or Section 14(d)(2) of the |
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(iv) | The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) that a change in control of the Company has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction; or |
(v) | If during any period of two consecutive years, individuals who at the beginning of any such period constitute the Board cease for any reason to constitute at least a majority of the members thereof, unless the election or the nomination for election by the Companys stockholders, of each member of the Board first elected during such period was approved by a vote of at least two-thirds of the member of the Board then still in office who were members of the Board at the beginning of any such period. |
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(c) | Computation of Amount of Change in Control Benefit . A Participant who is eligible for a Change in Control Benefit shall be entitled to receive a Change of Control Benefit equal to his Plan Account. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, if a Participant dies before commencing to receive payment of a benefit under the Plan, the Beneficiary of such deceased Participant shall be eligible to receive a Death Benefit as set forth in Article XII. |
(b) | Computation of Amount and Form of Distribution of the Death Benefit . The Death Benefit shall be equal in amount to the Participants Plan Account. |
(a) | Automatic Form of Payment . Any Retirement Benefit payable under the Plan shall be paid in a single lump sum. |
(b) | Timing of Benefit Payment . |
(i) | Retirement Benefits, Vested Benefit and Change in Control Benefits under Articles VII, VIII and X respectively shall be made on the first day of the month following the later of the month the Participant attains age 55 or the Participants Separation from Service; provided, however, if Participant is a Specified Employee, payment shall not be made prior to the first day of the month which follows the expiration of six (6) months from the Participants Separation from Service. |
(ii) | Disability Benefits under Article IX shall be made on the first day of the month following the month in which the Participants Termination of Employment due to Total Disability occurs. |
(iii) | Death Benefits under Article XI shall be made on the first day of the month following the month of Participants death. |
(c) | Notwithstanding the foregoing, any Retirement Benefit payable hereunder will be treated as made as stated herein if the payment is made at such time or a later date within the same calendar year or, if later, by the 15 th day of the third calendar month following such date. |
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(d) | Delay of Payment . Notwithstanding this Article XII the Company may delay the payment of all or any portion of the Participants Retirement Benefit as follows: |
(i) | The Committee reasonably anticipates that if the Retirement Benefits were made as scheduled, the Companys deduction with respect to such payments would not be permitted under Section 162(m) of the Code; provided such payments are then made during the Participants first taxable year in which the Committee reasonably anticipates that the Companys deduction would not be barred by application of Section 162(m) of the Code. |
(ii) | The Committee reasonably anticipates that making scheduled payments would violate Federal Securities laws or other applicable laws; provided such payments are then made at the earliest date at which the Committee reasonably contemplates that making the scheduled payments will not cause such a violation. |
(a) | Administration by Committee . The Committee shall be charged with the administration of the Plan. |
(b) | Powers of the Committee . The Committee shall have all such powers as may be necessary to discharge its duties relative to the administration of the Plan, including, by way of illustration and not limitation, discretionary authority to interpret and construe the Plan, to determine and decide all questions of fact, and all disputes, arising under the Plan including, but not limited to, the eligibility of any employee to participate hereunder, the validity of any Election of Deferral or other election as may be necessary or appropriate hereunder and the right of any employee to benefits payable hereunder. The Committee shall have all power necessary to adopt, alter and repeal such administrative rules, regulations and practices governing the operation of the Plan as it, in its sole discretion, may from time to time deem advisable. |
(c) | Committee Actions . The Committee shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of the Plan unless attributable to willful misconduct or gross negligence. The Committee shall be entitled to conclusively rely upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Company with respect to the Plan. Participants who are members of the Committee shall not participate in any action or determination regarding solely their own benefits payable |
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(d) | Claims and Review Procedure . The Committee shall be responsible for the claims procedure under the Plan. An application for benefits under the Plan shall be considered a claim for purposes of this Section (d). Until modified by the Committee, the claims and review procedure set forth in this Section shall be the mandatory claims and review procedure for the resolution of disputes and disposition of claims filed under the Plan. |
(i) | Initial Claim . An individual may, subject to any applicable deadline, file with the Committee a written claim for benefits under the Plan in a form and manner prescribed by the Committee. |
(A) | If the claim is denied in whole or in part, the Committee shall notify the claimant of the adverse benefit determination within 90 days after the receipt of the claim. |
(B) | The 90-day period for making the claim determination may be extended for 90 days if the Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Committee notifies the claimant, prior to the expiration of the initial 90-day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made. |
(ii) | Notice of Initial Adverse Determination . A notice of an adverse determination shall be set forth in a manner calculated to be understood by the claimant. |
(A) | the specific reasons for the adverse determination; | ||
(B) | references to the specific provisions of the Plan document (or other applicable Plan document) on which the adverse determination is based; | ||
(C) | a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and | ||
(D) | a description of the claims review procedure, including the time limits applicable to such procedure, and a statement of the claimants right to bring a civil action under ERISA Section 502(a) following an adverse determination on review. |
(iii) | Request for Review . Within 60 days after receipt of an initial adverse benefit determination notice, the claimant may file with the Committee a written request |
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(iv) | Claim on Review . If the claim, upon review, is denied in whole or in part, the Committee shall notify the claimant of the adverse benefit determination within 60 days after receipt of such a request for review. |
(A) | The 60-day period for deciding the claim on review may be extended for 60 days if the Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Committee notifies the claimant, prior to the expiration of the initial 60-day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made. | ||
(B) | In the event that the time period is extended due to a claimants failure to submit information necessary to decide a claim on review, the claimant shall have 60 days within which to provide the necessary information and the period for making the claim determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information or, if earlier, the expiration of 60 days. | ||
(C) | The Committees review of a denied claim shall take into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. |
(v) | Notice of Adverse Determination for Claim on Review . A notice of an adverse determination for a claim on review shall set forth in a manner calculated to be understood by the claimant: |
(A) | the specific reasons for the denial; | ||
(B) | references to the specific provisions of the Plan document (or other applicable Plan document) on which the adverse determination is based. | ||
(C) | a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimants claim for benefits; |
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(D) | a statement describing any voluntary appeal procedures offered by the Plan and the claimants right to obtain information about such procedures; and | ||
(E) | a statement of the claimants right to bring an action under ERISA §502(a). |
(e) | Deadline to File Claim . To be considered timely under the Plans claim and review procedure, a claim must be filed with the Committee within 1 year after the claimant knew or reasonably should have known of the principal facts upon which the claim is based. |
(f) | Exhaustion of Administrative Remedies . The exhaustion of the claim and review procedure is mandatory for resolving every claim and dispute arising under the Plan as to such claims and disputes. |
(i) | No claimant shall be permitted to commence any legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not statutory, until the claim and review procedure set forth herein have been exhausted in their entirety; and | ||
(ii) | In any such legal action all explicit and all implicit determinations by the Committee (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law. |
(g) | Deadline to File Legal Action . No legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 of ERISA or under any other provision of law, whether or not statutory, may be brought by any claimant on any matter pertaining to the Plan unless the legal action is commenced in the proper forum before the earlier of: |
(i) | 30 months after the claimant knew or reasonably should have known of the principal facts on which the claim is based, or |
(ii) | 6 months after the claimant has exhausted the claim and review procedure. |
(h) | Knowledge of Fact by Participant Imputed to Beneficiary . Knowledge of all facts that a Participant knew or reasonably should have known shall be imputed to every claimant who is or claims to be a Beneficiary of the Participant or otherwise claims to derive an entitlement by reference to the Participant. |
(i) | Information Furnished by Participants . Neither the Company nor the Committee shall be liable or responsible for any error in the computation of the accrued benefit of a Participant resulting from any misstatement of fact made by the Participant, directly or indirectly, to the Company or the Committee, and used by it in determining the Participants accrued benefit. The Company and the Committee shall not be obligated or required to increase the |
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(a) | Funding . The obligation of the Employers to pay benefits under the Plan constitutes the unsecured promise of the Employers to make payments from their general assets, and no Participant or Spouse shall have any interest in, or a lien or prior claim upon, any property of the Employers. With respect to the benefits under the Plan, each Participant, Spouse or Beneficiary shall have the status of a general unsecured creditor of the Participants Employer. The Company may establish a so-called rabbi trust to hold funds, stock or other securities to be used in payment of the obligations of the Employers under the Plan, and may fund such trust; provided, however, that any funds contained therein shall remain subject to the claims of the general creditors of the Company or any other Employer for which the Participant performs services. It is the intention of the Employers that the Plan be unfunded for tax purposes and for purposes of Title I of ERISA. No liability for the payment of benefits under the Plan shall be imposed upon any officer, director, employee or stockholder of the Company or any other Employer, or upon the Board, the Committee or any member thereof. |
(b) | No Guaranty of Benefits . Nothing contained in this Plan shall constitute a guaranty by any Employer, the Committee or the Board that the assets of any Employer will be sufficient to pay any benefit hereunder. |
(c) | Assignments and Restrictions . To the extent permitted by law, and except as otherwise provided in this Section (c), no right or interest of a Participant or Spouse under this Plan shall be transferable or assignable (either at law or in equity) nor shall any such right or interest be subject to alienation, anticipation, encumbrance, attachment, garnishment, levy, execution or other legal or equitable process of any kind, voluntary or involuntary, or in any manner be liable for or subject to the debts of any Participant or Spouse. If a Participant shall attempt to or shall transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his benefits hereunder or any part thereof, or if by reason of his bankruptcy or other event happening at any time such benefits would devolve upon anyone else or would not be enjoyed by him, then the Company, in its discretion, may terminate his |
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(d) | Headings . The various headings used in this Plan are for convenience only and shall not be used in interpreting the test of the Article, Section, paragraph or subparagraph in which they appear. |
(e) | Employment . The establishment of this Plan shall not be construed to give any Participant the right to be retained in the service of the Employer. |
(f) | Applicable Law . The validity, interpretation, construction and performance of this Plan shall be governed by the internal substantive laws of the State of Ohio, without giving effect to the principles of conflict of laws of such State. |
(g) | Binding Effect on Employer, Participants, Spouses and Their Successors . This Plan shall be binding and inure to the benefit of any Employer or its successors and assigns, and the Participants, Spouses and their heirs, legatees, distributes, executors, administrators or other legal representatives. |
(h) | Participant Information . Each participant shall keep the Committee informed of his current address and the current address of his Spouse, if applicable. The Participant shall furnish to the Committee any and all information deemed by the Committee to be necessary or desirable for the proper administration of the Plan. |
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(i) | Incapacity . In the event that a Participant or Spouse is declared incompetent and a guardian, conservator or other person is appointed and legally charged with the care of the person or the persons estate, the payments under the Plan to which such Participant or Spouse is entitled shall be paid to such guardian, conservator or other person legally charged with the care of the person or the estate. Except as provided hereinabove, when the Company, in its sole discretion, determines that the Participant or Spouse is unable to manage his or her financial affairs, the Company may make distribution(s) of the amounts payable to such Participant or Spouse to any one or more of the spouse, lineal ascendants or descendants or other closest living relatives of such Participant or Spouse who demonstrate to the satisfaction of the Company the propriety of making such distribution(s). Any payment so made shall not exceed such amount as is permitted under Section 409A of the Code and shall be in complete discharge of any liability under this Agreement for such payment. The Company shall not be required to see to the application of any such distribution made under this Section. |
(j) | Code Section 409A . To the extent applicable, it is intended that this Plan and the benefits payable hereunder comply with the provisions of Section 409A of the Code. The Plan and the benefits payable hereunder shall be administered in a manner consistent with this intent, and any provision that would cause the Plan or benefit payable hereunder to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of Participants). |
(a) | Amendment . The Plan may be amended from time to time in any respect whatsoever by the Company and by the Committee to the extent consistent with its delegated authority. Any such amendment may be retroactive, prospective or both. No such amendment of the Plan document or termination of the Plan, however, shall reduce a Participants Plan Account as of the date of such amendment unless the Participant so affected consents in writing to the amendment or such amendment is deemed necessary by the Company to affect the intended purposes of this Plan and/or to comply with applicable law. |
(b) | Termination . The Company reserves the right to discontinue contributions at any time. The Company also reserves the right to cause an acceleration of the time of a Plan payment |
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(i) | Dissolution or Bankruptcy . At the discretion of the Company within 12 months of a corporate dissolution taxed under Code §331 or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that Plan benefits are included in the Participants gross incomes in the latest of: |
(A) | the calendar year in which the Plan termination and liquidation occurs; | ||
(B) | the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or | ||
(C) | the first calendar year in which payment is administratively feasible. |
(ii) | Discretionary Termination . At the discretion of the Company, provided that: |
(A) | the termination and liquidation does not occur proximate to a downturn in the financial health of the Company; | ||
(B) | all other arrangements sponsored by the Company that would be aggregated with this arrangement under Code §409A are also terminated, to the extent any Participant in this Plan also has a benefit under any such other arrangement; | ||
(C) | no payments in liquidation of the Plan, other than payments that would have been made under this Plan had the termination not occurred, are made from the Plan within 12 months of the termination; | ||
(D) | all benefits are fully distributed within 24 months of such termination; and | ||
(E) | the Company does not adopt a new arrangement that would be aggregated under Code §409A with this Plan for 3 years following the date the Company has taken all necessary action to irrevocably terminate and liquidate this Plan |
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DIEBOLD, INCORPORATED | ||||
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By: | |||
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Its: | |||
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21
ARTICLE I PLAN
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1 | |||
ARTICLE II PURPOSE OF THE PLAN
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1 | |||
ARTICLE III DEFINITIONS
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1 | |||
(1) Affiliate
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1 | |||
(2) Annual Compensation
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2 | |||
(3) Beneficiary
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2 | |||
(4) Board
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2 | |||
(5) Change in Control
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2 | |||
(6) Change in Control Benefit
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2 | |||
(7) Code
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2 | |||
(8) Committee
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2 | |||
(9) Company
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2 | |||
(10) Company Service
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2 | |||
(11) Death Benefit
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2 | |||
(12) Disability Benefit
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2 | |||
(13) Early Retirement Age
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2 | |||
(14) Employer
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2 | |||
(15) Normal Retirement Age
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3 | |||
(16) Participant
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3 | |||
(17) Plan
|
3 | |||
(18) Plan Account
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3 | |||
(19) Points
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3 | |||
(20) Retirement Benefit
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3 | |||
(21) Separation from Service
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3 | |||
(22) Specified Employee
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3 | |||
(23) Spouse
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3 | |||
(24) Termination For Cause
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3 | |||
(25) Termination of Employment
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4 | |||
(26) Total Disability
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4 | |||
(27) Vested Benefit
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5 |
i
ARTICLE IV ELIGIBILITY, PARTICIPATION AND VESTING
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5 | |||
(a) Eligibility for Participation in Plan
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5 | |||
(b) Eligibility for Benefits
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5 | |||
(c) Vesting
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5 | |||
(d) Forfeiture of Plan Benefits
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5 | |||
ARTICLE V PLAN CONTRIBUTION CREDITS AND EARNINGS
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6 | |||
(a) Employer Contribution Credits
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6 | |||
(b) Investment Earnings
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6 | |||
ARTICLE VI RETIREMENT BENEFITS
|
6 | |||
(a) Qualification for Benefit
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6 | |||
(b) Computation of Amount of Benefit
|
7 | |||
ARTICLE VII VESTED BENEFIT
|
7 | |||
(a) Qualification for Benefit
|
7 | |||
(b) Computation of Amount of Benefit
|
7 | |||
ARTICLE VIII DISABILITY BENEFIT
|
7 | |||
(a) Qualification for Benefit
|
7 | |||
(b) Computation of Amount of Benefit
|
7 | |||
ARTICLE IX BENEFIT UPON CHANGE IN CONTROL
|
7 | |||
(a) Qualification for Benefit
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7 | |||
(b) Change in Control
|
7 | |||
(c) Computation of Amount of Change in Control Benefit
|
9 | |||
ARTICLE X DEATH BENEFIT
|
9 | |||
(a) Qualification for Benefit
|
9 | |||
(b) Computation of Amount of the Death Benefit
|
9 | |||
ARTICLE XI FORM AND TIMING OF PAYMENT
|
10 | |||
(a) Automatic Form of Payment
|
10 | |||
(b) Timing of Benefit Payment
|
10 | |||
(c) Delay of Payment
|
10 | |||
ARTICLE XII PLAN ADMINISTRATION
|
10 | |||
(a) Administration by Committee
|
10 | |||
(b) Powers of the Committee
|
11 | |||
(c) Committee Actions
|
11 | |||
(d) Claims and Review Procedure
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11 |
ii
(e) Deadline to File Claim
|
13 | |||
(f) Exhaustion of Administrative Remedies
|
13 | |||
(g) Deadline to File Legal Action
|
14 | |||
(h) Knowledge of Fact by Participant Imputed to Beneficiary
|
14 | |||
(i) Information Furnished by Participants
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14 | |||
ARTICLE XIII MISCELLANEOUS
|
14 | |||
(a) Funding
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14 | |||
(b) No Guaranty of Benefits
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15 | |||
(c) Assignments and Restrictions
|
15 | |||
(d) Headings
|
16 | |||
(e) Employment
|
16 | |||
(f) Applicable Law
|
16 | |||
(g) Binding Effect on Employer, Participants, Spouses and Their Successors
|
16 | |||
(h) Participant Information
|
16 | |||
(i) Incapacity
|
16 | |||
(j) Code Section 409A
|
17 | |||
ARTICLE XIV AMENDMENT AND TERMINATION
|
17 | |||
(a) Amendment
|
17 | |||
(b) Termination
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17 |
iii
(a) | The following definitions shall apply with respect to this Plan: |
(1) | Affiliate shall mean any entity included with the Company in a controlled group of corporations or trades or businesses under common control within the meaning of Code §414(b) or §414(c), an affiliated service group within the meaning of Code §414(n), or any other entity required to be aggregated with the Company under Code §414(o). For all purposes under this Plan, in applying Code §1563(a)(1), (2) and (3) for purposes of determining the Companys Affiliates under Code §414(b), the language at least 80% shall be applied as it appears in those sections, and in applying Treas. Reg. §1.414(c)-2 for purposes of determining trades or business (whether or not incorporated) that are under |
1
common control for purposes of Code §414(c), the language at least 80% shall be used as it appears in such regulation. |
(2) | Annual Compensation shall mean a Participants base pay from an Employer for any Plan Year including any amounts excluded from the Participants gross income as a deferral under a nonqualified deferred compensation plan of the Company pursuant to a salary reduction agreement plus the Participants annual incentive bonus in the calendar year in which it is accrued. Annual Compensation also include amounts paid to individuals who are citizens or residents of the United States and who are employees of, or provide services to, a foreign Affiliate of the Company to which an agreement entered into by the Company under Code Section 3121(1) applies. | ||
(3) | Beneficiary shall mean a person or entity designated by the Participant to receive the Death Benefit payable under this Plan, as are outlined in Article X. A Beneficiary may, but is not required to, designate a Spouse as the Beneficiary. | ||
(4) | Board shall mean the Board of Directors of Diebold, Incorporated. | ||
(5) | Change in Control shall have the meaning assigned to such term in Article IX. | ||
(6) | Change in Control Benefit shall mean the benefit determined in accordance with Article IX. | ||
(7) | Code shall mean the Internal Revenue Code of 1986, as amended from time to time. | ||
(8) | Committee shall mean the Compensation Committee of the Board, as such Committee may be constituted from time to time. | ||
(9) | Company shall mean Diebold, Incorporated. | ||
(10) | Company Service shall mean years of employment (measured in years and completed months) with an Employer. | ||
(11) | Death Benefit shall mean the benefit determined in accordance with Article X hereof. | ||
(12) | Disability Benefit shall mean the benefit determined in accordance with Article VIII hereof. | ||
(13) | Early Retirement Age shall mean age at which the Participant has both attained age 55 and completed 10 years of Company Service. | ||
(14) | Employer shall mean (a) the Company or its successors, and (b) any Affiliate or other entity which may specifically adopt this Plan with the consent of the Company, or its successors. |
2
(15) | Normal Retirement Age shall mean age 65. | ||
(16) | Participant shall mean any executive highly paid or management employee of an Employer who is selected to participate in this Plan pursuant to the provisions of Article IV. | ||
(17) | Plan shall mean this Diebold, Incorporated 401(k) Supplemental Executive Retirement Plan, as in effect from time to time. | ||
(18) | Plan Account shall mean the Participants account balance under the Plan which shall equal the total amount of the contributions made to the Plan on behalf of the Participant as determined under Article V, as adjusted by earnings or losses thereon. | ||
(19) | Points shall be the numerical total of the Participants years of age plus years of Company Service. | ||
(20) | Retirement Benefit shall mean the benefit payable under Article VI hereof. | ||
(21) | Separation from Service shall mean a Participant dies, retires, or otherwise has a Termination of Employment from the Employer. A Separation from Service shall not be considered to have occurred if the Participants employment relationship is treated by the Employer as continuing while the Participant is on military leave, sick leave, or other bona fide leave of absence if such period of leave does not exceed 6 months or, if longer, so long as the individuals right to reemployment is provided by statute or by contract. If the period of leave exceeds 6 months and such reemployment rights are not provided, the employment relationship is deemed to terminate on the first date immediately following such 6-month period. Whether a Separation from Service has occurred will be determined in accordance with the requirements of Code §409A. | ||
(22) | Specified Employee shall mean a key employee as defined in Code Section 416(i) as further interpreted by the Treasury Regulations issued under Code Section 409A. | ||
(23) | Spouse shall mean the surviving spouse of a Participant at the time of his death.. | ||
(24) | Termination for Cause shall mean Participants Termination of Employment by an Employer due to the Participants: |
(i) | intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Employer; | ||
(ii) | intentional wrongful damage to property of the Employer; |
3
(iii) | intentional wrongful disclosure of secret processes or confidential information of the Employer; or | ||
(iv) | intentional wrongful engagement in any competitive activity which would constitute a material breach of the duty of loyalty to the Employer and any such at shall have been materially harmful to the Employer. |
For purposes of the Plan, no act, or failure to act, on the part of the Participant shall be deemed intentional if it was due primarily to an error in judgment or negligence, but shall be deemed intentional only if done, or omitted to be done, by the Participant not in good faith or without reasonable belief that his action or omission was not in or opposed tot eh best interest of the Employer. Notwithstanding the foregoing, a Participant shall not be deemed to have been Terminated for Cause hereunder unless and until there shall have been delivered to the Participant a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the Board then in office at a meeting of the Board called and held for such purposes, finding that, in the good faith opinion of the Board, the Participant had committed an act set forth above and specifying the particulars thereof in detail. The Participant shall receive reasonable notice and an opportunity for the Participant, together with his counsel, to be heard before the Board. Nothing herein shall limit the right of the Participant or his Beneficiaries to contest the validity or propriety of any such determination. | |||
(25) | Termination of Employment shall mean the severing of employment with the Employer, voluntarily or involuntarily. A Participant is presumed to have incurred a Termination of Employment from the Employer where the facts and circumstances indicate that the Employer and the Participant reasonably anticipated that no further services would be performed after a certain date or the level of bona fide services the Participant would perform after such date would permanently decrease to 20% or less of the average level of services over the immediately preceding 36-month period (or the full period of such services, if less than 36 months). A Termination of Employment will be determined in accordance with treasury Regulation 1.409A-1(h)(l)(ii). | ||
(26) | Total Disability. shall mean a physical or mental impairment that causes a Participant to be unable to engage in any substantial gainful activity, which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. Such determination of disability may be made by the |
4
Social Security Administration or may be made pursuant to the Companys long term disability insurance program. |
(27) | Vested Benefit shall mean the benefit determined in accordance with Article VII hereof. |
(b) | Throughout this Plan, and whenever appropriate, the masculine gender shall be deemed to include the feminine and neuter, the singular shall be deemed to include the plural and vice versa. |
(a) | Eligibility for Participation in the Plan . The Chief Executive Officer of the Company shall nominate executive or highly paid management employees of the Employer whose compensation exceeds the limit set forth under Section 401(a)(17) of the Internal Revenue Code for participation in the Plan. The Committee shall make the final decision as to those executives or highly paid management employees who shall become Participants in the Plan. Newly appointed executive or highly paid management employee shall become Participants in the Plan effective as of the next following January 1. |
(b) | Eligibility for Benefits . A Participant shall be entitled to receive a Retirement Benefit (or have a Retirement Benefit provided for his surviving Spouse or Beneficiary) only if he satisfies the conditions of this Article IV and satisfies the qualification requirements of any of the Articles under the Plan to become eligible to receive a benefit thereunder. |
(c) | Vesting . A Participant shall be vested hereunder upon attaining ten years of Company Service or upon meeting the requirements for a Disability Benefit or Change in Control Benefit or upon attaining age 65 hereunder. |
(d) | Forfeiture of Plan Benefits . In the absence of a Change in Control or a finding of Total Disability, a Participants participation shall cease and no benefits under this Plan shall be payable: |
(i) | to a Participant if the Participant: |
(A) | voluntarily terminates employment before completing at least ten years of Company Service; or | ||
(B) | fails to give an Employer six months written advance notice of his pending voluntary Termination of Employment if he is leaving Diebold prior to age 55 (or three months written advance notice if he is leaving Diebold at age 55 or later); or |
5
(C) | is Terminated for Cause; or |
(ii) | to a Participants Spouse or Beneficiary, if the Participant: |
(A) | dies prior to satisfying the requirements for a Death Benefit under Article X; or | ||
(B) | is Terminated for Cause. |
(a) | Employer Contribution Credits . For each calendar year, the Company shall make a contribution credit to the Plan Account on behalf of each Participant who is employed on the last day of such calendar year or who had a Termination of Employment during the calendar year as a result of retirement, death or Total Disability. The amount of the contribution credit shall be determined by multiplying the Annual Compensation of the Participant by a percentage. Such percentage shall be determined based on the number of Points accrued by the participant as determined under the table set forth below: |
POINTS | CONTRIBUTION CREDIT | |||
Under 50
|
5 | % | ||
50-59
|
10 | % | ||
60-69
|
12.5 | % | ||
70-79
|
15 | % | ||
80 and over
|
20 | % |
(b) | Investment Earnings . Company contributions made pursuant to paragraph (a) above will be deposited as soon as administratively possible after the end of the calendar year to which the contribution applies and will be held in an account in the Participants name in a rabbi trust as set forth in Article XIII(a). Contributions will be invested in the investment funds selected by the Participant under the Diebold, Incorporated 401(k) Savings Plan. Any change in the investment funds selected under the Diebold, Incorporated 401(k) Savings Plan will proportionately affect the Participants Plan Account of this Plan. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who attains his Normal Retirement Age or Early Retirement Age while employed by an Employer shall be eligible to retire and receive a Retirement Benefit payable as set forth in Article XI. |
6
(b) | Computation of Amount of Benefit . A Participant who retires on or after attaining Normal Retirement Age or Early Retirement Age shall be entitled to receive a Retirement Benefit equal to his Plan Account. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, a Participant who has a Termination of Employment before he reaches Normal Retirement Age or Early Retirement Age and after the Participant has completed ten or more years of Company Service shall be eligible to receive a Vested Benefit payable as set forth in Article XI. |
(b) | Computation of Amount of Vested Benefit . A Participant who is eligible for a Vested Benefit shall be entitled to receive a Vested Benefit equal to his Plan Account. |
(a) | Qualified for Benefit . Subject to the provisions of Article IV, a Participant who has a Termination of Employment after he has completed 15 years of Company Service but before he reaches his Normal Retirement Age or Early Retirement Age by reason of his Total Disability shall be eligible to receive a Disability Benefit payable as set forth in Article XI. |
(b) | Computation of Amount of Disability Benefit . A Participant who is eligible for a Disability Benefit shall be entitled to receive a total Disability Benefit equal to his Plan Account. |
(a) | Qualification for Benefit . A Participant who (1) has a Termination of Employment with the Employer within 24 months following a Change in Control and (2) is not at the time of such Termination of Employment eligible for a Retirement Benefit, Vested Benefit or Disability Benefit, shall be eligible for a Change in Control Benefit payable as set forth in Article XI. | |
(b) | Change in Control shall mean that: |
(i) | The Company is merged or consolidated or reorganized into or with another corporation or other legal person, and as a result of such merger, consolidation or |
7
reorganization less than a majority of the combined voting power of the securities of such corporation or person that are outstanding immediately following the consummation of such transaction is held in the aggregate by the holders of Voting Stock (as hereinafter defined) of the Company immediately prior to such transaction. |
(ii) | The Company sells or otherwise transfers all or substantially all of its assets to any other corporation or other legal person, and as a result of such sale or transfer less than a majority of the combined voting power of the securities of such corporation or person that are outstanding immediately following the consummation of such sale or transfer is held in the aggregate by the holders of Voting Stock (as hereinafter defined) of the Company immediately prior to such sale or transfer. | ||
(iii) | There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report) thereto, each as promulgated pursuant to the Securities and Exchange of 1934, as amended (the Exchange Act), disclosing that any person (as the term person is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term beneficial owner is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 20 percent or more of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the Company (the Voting Stock); | ||
(iv) | The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) that a change in control of the Company has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction; or | ||
(v) | If during any period of two consecutive years, individuals who at the beginning of any such period constitute the Board cease for any reason to constitute at least a majority of the members thereof, unless the election or the nomination for election by the Companys stockholders, of each member of the Board first elected during such period was approved by a vote of at least two-thirds of the member of the Board then still in office who were members of the Board at the beginning of any such period. |
8
Notwithstanding the foregoing provisions of subsection (iii) or (iv) hereof, a Change in Control shall not be deemed to have occurred for purposes of this Plan, either (1) solely because the Company, a Subsidiary, or any Company-sponsored employee stock ownership plan or other employee benefit plan of the Company, files or becomes obligated to file a report or a proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial ownership by it of shares of Voting Stock, whether in excess of 20 percent or otherwise, or because the Company reports that a change in control of the Company has or may have occurred or will or may occur in the future by reason of such beneficiary ownership or (2) solely because of a change in control of any Subsidiary by which any Participant may be employed. Notwithstanding the foregoing provisions of subsections (i-iv) hereof, if, prior to any event described in subsections (i-iv) hereof that may be instituted by any person who is not an officer or director of the Company, or prior to any disclosed proposal that may be instituted by any person who is not an officer or director of the Company that could lead to any such event, management proposes any structuring of the Company that ultimately leads to an event described in subsections (i-iv) hereof pursuant to such management proposal, than a Change in Control shall not be deemed to have occurred for purposes of the Plan. |
(c) | Computation of Amount of Change in Control Benefit . A Participant who is eligible for a change in Control Benefit shall be entitled to receive a Change of Control Benefit equal to his Plan Account. |
(a) | Qualification for Benefit . Subject to the provisions of Article IV, if a Participant dies with ten (10) years of Company Service but before commencing to receive payment of a benefit under the Plan, the Spouse or Beneficiary elected by the Participant of such deceased Participant shall be eligible to receive a Death Benefit as set forth in paragraph (b) of this Section. |
(b) | Computation of Amount of the Death Benefit . The Death Benefit shall be equal in amount to the Participants Plan Account. |
9
(a) | Automatic Form of Payment . Any Retirement Benefit payable under the Plan shall be paid in a single lump sum. |
(b) | Timing of Benefit Payment . |
(i) | Retirement Benefits, Vested Benefit and Change in Control Benefits under Articles VI, VII and IX respectively shall be made on the first day of the month following the later of the month the Participant attains age 55 or the Participants Separation from Service; provided, however, if Participant is a Specified Employee, payment shall not be made prior to the first day of the month which follows the expiration of six (6) months from the Participants Separation from Service. | ||
(ii) | Disability Benefits under Article VIII shall be made on the first day of the month following the month in which the Participants Termination of Employment due to Total Disability occurs. | ||
(iii) | Death Benefits under Article X shall be made on the first day of the month following the month of Participants death. |
(c) | Notwithstanding the foregoing, any Retirement Benefit payable hereunder will be treated as made as stated herein if the payment is made at such time or a later date with the same calendar year or, if later, by the 15 th day of the third calendar month following such date. |
(d) | Delay of Payment . Notwithstanding this Article XI the Company may delay the payment of all or any portion of the Participants Retirement Benefit as follows: |
(i) | The Committee reasonably anticipates that if the Retirement Benefits were made as scheduled, the Companys deduction with respect to such payments would not be permitted under Section 162(m) of the Code; provided such payments are then made during the Participants first taxable year in which the Committee reasonably anticipates that the Companys deduction would not be barred by application of Section 162(m) of the Code. | ||
(ii) | The Committee reasonably anticipates that making scheduled payments are then made at the earliest date at which the Committee reasonably contemplates that making the scheduled payments will not cause such a violation. |
(a) | Administration by Committee . The Committee shall be charged with the administration of the Plan. |
10
(b) | Powers of the Committee . The Committee shall have all such powers as may be necessary to discharge its duties relative to the administration of the Plan, including, by way of illustration and not limitation, discretionary authority to interpret and construe the Plan, to determine and decide all questions of fact, and all disputes, arising under the Plan including, but not limited to, the eligibility of any employee to participate hereunder, the validity of any Election of Deferral or other election as may be necessary or appropriate hereunder and the right of any employee to benefits payable hereunder. The Committee shall have all power necessary to adopt, alter and repeal such administrative rules, regulations and practices governing the operation of the Plan as it, in its sole discretion, may from time to time deem advisable. |
(c) | Committee Actions . The Committee shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of the Plan unless attributable to willful misconduct or gross negligence. The Committee shall be entitled to conclusively rely upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Company with respect to the Plan. Participants who are members of the Committee shall not participate in any action or determination regarding solely their own benefits payable hereunder. All decisions of the Committee shall be by majority of the votes cast and, except as provided in Section (d) of this Article XII, decisions of the Committee made in good faith shall be final, conclusive and binding upon all parties. |
(d) | Claims and Review Procedure . The Committee shall be responsible for the claims procedure under the Plan. An application for benefits under the Plan shall be considered a claim for purposes of this Section (d). Until modified by the Committee, the claims and review procedure set forth in this Section shall be the mandatory claims and review procedure for the resolution of disputes and disposition of claims filed under the Plan. |
(i) | Initial Claim . An individual may, subject to any applicable deadline, file with the Committee a written claim for benefits under the Plan in a form and manner prescribed by the Committee. |
(A) | If the claim is denied in whole or in part, the Committee shall notify the claimant of the adverse benefit determination within 90 days after the receipt of the claim. | ||
(B) | The 90-day period for making the claim determination may be extended for 90 days if the Committee determines that special circumstances require an extension of time for determination of the claim, provided that |
11
the Committee notifies the claimant, prior to the expiration of the initial 90-day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made. |
(ii) | Notice of Initial Adverse Determination . A notice of an adverse determination shall be set forth in a manner calculated to be understood by the claimant. |
(A) | the specific reasons for the adverse determination; | ||
(B) | references to the specific provisions of the Plan document (or other applicable Plan document) on which the adverse determination is based; | ||
(C) | a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and | ||
(D) | a description of the claims review procedure, including the time limits applicable to such procedure, and a statement of the claimants right to bring a civil action under ERISA Section 502(a) following an adverse determination on review. |
(iii) | Request for Review . Within 60 days after receipt of an initial adverse benefit determination notice, the claimant may file with the Committee a written request for a review of the adverse determination and may, in connection therewith submit written comments, documents, records and other information relating to the claim benefits. Any request for review of the initial adverse determination not filed within 60 days after receipt of the initial adverse determination notice shall be untimely. | ||
(iv) | Claim on Review . If the claim, upon review, is denied in whole or in part, the Committee shall notify the claimant of the adverse benefit determination within 60 days after receipt of such a request for review. |
(A) | The 60-day period for deciding the claim on review may be extended for 60 days if the Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Committee notifies the claimant, prior to the expiration of the initial 60-day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made. | ||
(B) | In the event that the time period is extended due to a claimants failure to submit information necessary to decide a claim on review, the claimant shall have 60 days within which to provide the necessary information |
12
and the period for making the claim determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information or, if earlier, the expiration of 60 days. |
(C) | The Committees review of a denied claim shall take into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. |
(v) | Notice of Adverse Determination for Claim on Review . A notice of an adverse determination for a claim on review shall set forth in a manner calculated to be understood by the claimant: |
(A) | the specific reasons for the denial; | ||
(B) | references to the specific provisions of the Plan document (or other applicable Plan document) on which the adverse determination is based. | ||
(C) | a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimants claim for benefits; | ||
(D) | a statement describing any voluntary appeal procedures offered by the Plan and the claimants right to obtain information about such procedures; and | ||
(E) | a statement of the claimants right to bring an action under ERISA §502(a). |
(e) | Deadline to File Claim . To be considered timely under the Plans claim and review procedure, a claim must be filed with the Committee within 1 year after the claimant knew or reasonably should have known of the principal facts upon which the claim is based. |
(f) | Exhaustion of Administrative Remedies . The exhaustion of the claim and review procedure is mandatory for resolving every claim and dispute arising under the Plan as to such claims and disputes. |
(i) | No claimant shall be permitted to commence any legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not |
13
statutory, until the claim and review procedure set forth herein have been exhausted in their entirety; and |
(ii) | In any such legal action all explicit and all implicit determinations by the Committee (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law. |
(g) | Deadline to File Legal Action . No legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 of ERISA or under any other provision of law, whether or not statutory, may be brought by any claimant on any matter pertaining to the Plan unless the legal action is commenced in the proper forum before the earlier of: |
(i) | 30 months after the claimant knew or reasonably should have known of the principal facts on which the claim is based, or | ||
(ii) | 6 months after the claimant has exhausted the claim and review procedure. |
(h) | Knowledge of Fact by Participant Imputed to Beneficiary . Knowledge of all facts that a Participant knew or reasonably should have known shall be imputed to every claimant who is or claims to be a Beneficiary of the Participant or otherwise claims to derive an entitlement by reference to the Participant. |
(i) | Information Furnished by Participants . Neither the Company nor the Committee shall be liable or responsible for any error in the computation of the accrued benefit of a Participant resulting from any misstatement of fact made by the Participant, directly or indirectly, to the Company or the Committee, and used by it in determining the Participants accrued benefit. The Company and the Committee shall not be obligated or required to increase the accrued benefit of such Participant which, on discovery of the misstatement, is found to be understated as a result of such misstatement of the Participant. However, the accrued benefit of any Participant which is overstated by reason of any such misstatement shall be reduced to the amount appropriate in view of accurate facts. |
(a) | Funding . The obligation of the Employers to pay benefits under the Plan constitutes the unsecured promise of the Employers to make payments from their general assets, and no Participant or Spouse shall have any interest in, or a lien or prior claim upon, any property of the Employers. With respect to the benefits under the Plan, each Participant, |
14
Spouse or Beneficiary shall have the status of a general unsecured creditor of the Participants Employer. The Company may establish a so-called rabbi trust to hold funds, stock or other securities to be used in payment of the obligations of the Employers under the Plan, and may fund such trust; provided, however, that any funds contained therein shall remain subject to the claims of the general creditors of the Company or any other Employer for which the Participant performs services. It is the intention of the Employers that the Plan be unfunded for tax purposes and for purposes of Title I of ERISA. No liability for the payment of benefits under the Plan shall be imposed upon any officer, director, employee or stockholder of the Company or any other Employer, or upon the Board, the Committee or any member thereof. |
(b) | No Guaranty of Benefits . Nothing contained in this Plan shall constitute a guaranty by any Employer, the Committee or the Board that the assets of any Employer will be sufficient to pay any benefit hereunder. |
(c) | Assignments and Restrictions . To the extent permitted by law, and except as otherwise provided in this Section (c), no right or interest of a Participant or Spouse under this Plan shall be transferable or assignable (either at law or in equity) nor shall any such right or interest be subject to alienation, anticipation, encumbrance, attachment, garnishment, levy, execution or other legal or equitable process of any kind, voluntary or involuntary, or in any manner be liable for or subject to the debts of any Participant or Spouse. If a Participant shall attempt to or shall transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his benefits hereunder or any part thereof, or if by reason of his bankruptcy or other event happening at any time such benefits would devolve upon anyone else or would not be enjoyed by him, then the Company, in its discretion, may terminate his interest in any such benefit to the extent the Company considers necessary or advisable to prevent or limit the effects of such occurrence. Termination shall be effected by filing a termination declaration with the Committee and making reasonable efforts to deliver a copy to the Participant (the Terminated Participant) whose interest is affected thereby. As long as the Terminated Participant is alive, any benefits affected by the termination shall be retained by the Company and, in the Companys sole and absolute judgment, may be paid to or expended for the benefit of the Terminated Participants, his spouse, his children or any other person or persons in fact dependent upon him in such a manner as the Company shall deem proper. Upon the death of the Terminated Participant, all benefits withheld from him and not paid to others in accordance with the preceding sentence shall be paid to the Terminated Participants |
15
surviving Spouse or, if none, to the Terminated Participants then living descendants, including adopted children, per stripes . |
Notwithstanding the foregoing, amounts payable under this Plan may be withheld by the Company as they become due to the extent necessary to cover any debts or other obligations owed to the Company by the Participant, but only if such debts or other obligations are acknowledged as such in writing by the Participant or are confirmed as such by a final, nonappealable order of a court of competent jurisdiction. | ||
(d) | Headings . The various headings used in this Plan are for convenience only and shall not be used in interpreting the test of the Article, Section, paragraph or subparagraph in which they appear. | |
(e) | Employment . The establishment of this Plan shall not be construed to give any Participant the right to be retained in the service of the Employer. | |
(f) | Applicable Law . The validity, interpretation, construction and performance of this Plan shall be governed by the internal substantive laws of the State of Ohio, without giving effect to the principles of conflict of laws of such State. | |
(g) | Binding Effect on Employer, Participants, Spouses and Their Successors . This Plan shall be binding and inure to the benefit of any Employer or its successors and assigns, and the Participants, Spouses and their heirs, legatees, distributes, executors, administrators or other legal representatives. | |
(h) | Participant Information . Each participant shall keep the Committee informed of his current address and the current address of his Spouse, if applicable. The Participant shall furnish to the Committee any and all information deemed by the Committee to be necessary or desirable for the proper administration of the Plan. | |
(i) | Incapacity . In the event that a Participant or Spouse is declared incompetent and a guardian, conservator or other person is appointed and legally charged with the care of the person or the persons estate, the payments under the Plan to which such Participant or Spouse is entitled shall be paid to such guardian, conservator or other person legally charged with the care of the person or the estate. Except as provided hereinabove, when the Company, in its sole discretion, determines that the Participant or Spouse is unable to manage his or her financial affairs, the Company may make distribution(s) of the amounts payable to such Participant or Spouse to any one or more of the spouse, lineal ascendants or descendants or other closest living relatives of such Participant or Spouse who demonstrate to the satisfaction of the Company the propriety of making such distribution(s). Any payment so made shall not exceed such amount as is permitted |
16
under Section 409A of the Code and shall be in complete discharge of any liability under this Agreement for such payment. The Company shall not be required to see to the application of any such distribution made under this Section. |
(j) | Code Section 409A . To the extent applicable, it is intended that this Plan and the benefits payable hereunder comply with the provisions of Section 409A of the Code. The Plan and the benefits payable hereunder shall be administered in a manner consistent with this intent, and any provision that would cause the Plan or benefit payable hereunder to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of Participants). |
(a) | Amendment . The Plan may be amended from time to time in any respect whatsoever by the Company and by the Committee to the extent consistent with its delegated authority. Any such amendment may be retroactive, prospective or both. No such amendment of the Plan document or termination of the Plan, however, shall reduce a Participants Plan Account as of the date of such amendment unless the Participant so affected consents in writing to the amendment or such amendment is deemed necessary by the Company to affect the intended purposes of this Plan and/or to comply with applicable law. |
(b) | Termination . The Company reserves the right to discontinue contributions at any time. The Company also reserves the right to cause an acceleration of the time of a Plan payment where the acceleration of such payment is made in accordance with one of the following provisions: |
(i) | Dissolution or Bankruptcy . At the discretion of the Company within 12 months of a corporate dissolution taxed under Code §331 or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that Plan benefits are included in the Participants gross incomes in the latest of: |
(A) | the calendar year in which the Plan termination and liquidation occurs; | ||
(B) | the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or | ||
(C) | the first calendar year in which payment is administratively feasible. |
(ii) | Discretionary Termination . At the discretion of the Company, provided that: |
17
(A) | the termination and liquidation does not occur proximate to a downturn in the financial health of the Company; | ||
(B) | all other arrangements sponsored by the Company that would be aggregated with this arrangement under Code §409A are also terminated, to the extent any Participant in this Plan also has a benefit under any such other arrangement; | ||
(C) | no payments in liquidation of the Plan, other than payments that would have been made under this Plan had the termination not occurred, are made from the Plan within 12 months of the termination; | ||
(D) | all benefits are fully distributed within 24 months of such termination; and | ||
(E) | the Company does not adopt a new arrangement that would be aggregated under Code §409A with this Plan for 3 years following the date the Company has taken all necessary action to irrevocably terminate and liquidate this Plan |
18
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DIEBOLD, INCORPORATED | |||||
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(a) | Change in Control shall be deemed to have occurred if any of the following events shall occur: |
(i) | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) (a Person) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either: (A) the then-outstanding shares of common stock of the Corporation (the Corporation Common Stock) or (B) the combined voting power of the then-outstanding voting securities of the Corporation entitled to vote generally in the election of directors (Voting Stock); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Corporation, (2) any acquisition by the Corporation, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any Subsidiary of the Corporation, or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 1(b); or |
(ii) | Individuals who, as of the date hereof, constitute the Board cease for any reason (other than death or disability) to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Corporations shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Corporation in which such person is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or | ||
(iii) | Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Corporation (a Business Combination), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Corporation Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Corporation or all or substantially all of the Corporations assets either directly or through one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the Corporation Common Stock and Voting Stock of the Corporation, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Corporation or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 15% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or the combined voting power of the |
2
then-outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board providing for such Business Combination; or |
(iv) | Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation. |
(b) | Deferral Period means the period commencing and ending on . | ||
(c) | Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. |
(a) | If the Grantees employment with the Corporation or one of its Subsidiaries should terminate because of death or permanent total disability, the RSUs granted hereby shall become nonforfeitable. | ||
(b) | If the Grantees employment with the Corporation or a Subsidiary should terminate on or after the date on which the Grantee attains age 65 and on such date the Grantee shall have completed five (5) or more years of continuous employment with the Corporation and its Subsidiaries, the RSUs granted hereby shall become nonforfeitable. | ||
(c) | If the Grantees employment with the Corporation or a Subsidiary should terminate and the sum of the Grantees age and the number of the Grantees years of continuous employment with the Corporation and its Subsidiaries on such date equals or exceeds 70, the extent to which the RSUs granted hereby shall become nonforfeitable shall be determined as if the Grantees employment had not terminated and the result shall be multiplied by a fraction, the numerator of which is |
3
the number of full months the Grantee was employed during the Deferral Period and the denominator of which is the total number of months in the Deferral Period; provided, however, the Board, upon the recommendation of the Committee may, in its discretion, increase payments made under the foregoing circumstances up to the full amount payable for service throughout the Deferral Period. |
(a) | Return to the Corporation all Common Shares that the Grantee has not disposed of that were paid out pursuant to this Agreement within a period of one year prior to the date of the commencement of such Detrimental Activity, and | ||
(b) | With respect to any Common Shares that the Grantee has disposed of that were paid out pursuant to this Agreement within a period of one year prior to the date of the commencement of such Detrimental Activity, pay to the Corporation in cash the value of such Common Shares on the date such Common Shares were paid out. | ||
(c) | To the extent that the amounts referred to in Section 8(a) and (b) above are not paid to the Corporation, the Corporation may set off the amounts so payable to it against any amounts that may be owing from time to time by the Corporation or a Subsidiary |
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to the Grantee, whether as wages, deferred compensation or vacation pay or in the form of any other benefit or for any other reason. |
(d) | For purposes of this Agreement, the term Detrimental Activity shall include: |
(i) | Engaging in any activity, as an employee, principal, agent, or consultant for another entity, and in a capacity, that directly competes with the Corporation or any Subsidiary in any actual product, service or business activity (or in any product, service or business activity which was under active development while the Grantee was employed by the Corporation if such development is being actively pursued by the Corporation during the one-year period first referred to in this Section 8) for which the Grantee has had any direct responsibility and direct involvement during the last two years of his or her employment with the Corporation or a Subsidiary, in any territory in which the Corporation or a Subsidiary manufactures, sells, markets, services, or installs such product or service, or engages in such business activity. | ||
(ii) | Soliciting any employee of the Corporation or a Subsidiary to terminate his or her employment with the Corporation or a Subsidiary. | ||
(iii) | The disclosure to anyone outside the Corporation or a Subsidiary, or the use in other than the Corporation or a Subsidiarys business, without prior written authorization from the Corporation, of any confidential, proprietary or trade secret information or material relating to the business of the Corporation and its Subsidiaries, acquired by the Grantee during his or her employment with the Corporation or its Subsidiaries or while acting as a consultant for the Corporation or its Subsidiaries thereafter. | ||
(iv) | The failure or refusal to disclose promptly and to assign to the Corporation upon request all right, title and interest in any invention or idea, patentable or not, made or conceived by the Grantee during employment by the Corporation and any Subsidiary, relating in any manner to the actual or anticipated business, research or development work of the Corporation or any Subsidiary or the failure or refusal to do anything reasonably necessary to enable the Corporation or any Subsidiary to secure a patent where appropriate in the United States and in other countries. | ||
(v) | Activity that results in Termination for Cause. For the purposes of this Section, Termination for Cause shall mean a termination: |
(A) | due to the Grantees willful and continuous gross neglect of his or her duties for which he or she is employed, or | ||
(B) | due to an act of dishonesty on the part of the Grantee constituting a felony resulting or intended to result, directly or indirectly, in his or |
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her gain for personal enrichment at the expense of the Corporation or a Subsidiary. |
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Sheila M. Rutt | Thomas W. Swidarski | |||||||
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Chief Human Resources Officer |
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DIEBOLD, INCORPORATED
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Sheila M. Rutt | ||||
Vice President, Chief Human Resources Officer | ||||
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(a) | Change in Control shall be deemed to have occurred if any of the following events shall occur: |
(i) | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) (a Person) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either: (A) the then-outstanding shares of common stock of the Corporation (the Corporation Common Stock) or (B) the combined voting power of the then-outstanding voting securities of the Corporation entitled to vote generally in the election of directors (Voting Stock); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Corporation, (2) any acquisition by the Corporation, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any Subsidiary of the Corporation, or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 1(b); or | ||
(ii) | Individuals who, as of the date hereof, constitute the Board cease for any reason (other than death or disability) to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Corporations shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the |
Corporation in which such person is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or | |||
(iii) | Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Corporation (a Business Combination), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Corporation Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Corporation or all or substantially all of the Corporations assets either directly or through one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the Corporation Common Stock and Voting Stock of the Corporation, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Corporation or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 15% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board providing for such Business Combination; or | ||
(iv) | Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation. |
(b) | Deferral Period means the period commencing the Date of Grant and ending the latest of (i) the third anniversary of the Date of Grant, (ii) the date the Grantee attains age 69, or (iii) the date of the Grantees separation from service as so defined for purposes of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the Code). |
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(a) | General . Subject to the terms and conditions of Section 2(b), (c), (d) and (e) hereof, the Grantees right to receive Deferred Shares under this Agreement shall become nonforfeitable on the first anniversary of the Date of Grant. | ||
(b) | Effect of Change in Control . In the event of a Change in Control prior to the first anniversary of the Date of Grant, the Deferred Shares granted hereby shall immediately become nonforfeitable. | ||
(c) | Effect of Death, Disability . If the Grantees service as a Non-Employee Director should terminate because of death or Disability (as so defined for purposes of Section 409A(a)(2)(A)(ii) of the Code) prior to the first anniversary of the Date of Grant, the Deferred Shares granted hereby shall immediately become nonforfeitable. | ||
(d) | Effect of Retirement . If the Grantees service as a Non-Employee Director should terminate prior to the first anniversary of the Date of Grant, but more than six months after the Date of Grant and when he or she has served as a Director for ten full years or more or attained age 72, the Deferred Shares granted hereby shall become immediately nonforfeitable. | ||
(e) | Effect of Other Termination of Service . In the event that the Grantees service as a Non-Employee Director shall terminate prior to the first anniversary of the Date of Grant in a manner other than any specified in Section 2(c) or (d) hereof, the Grantee shall forfeit any Deferred Shares that have not become nonforfeitable by such Grantee at the time of such termination; provided , however , that the Board upon recommendation of the Board Governance Committee may order that any part or all of such Deferred Shares become nonforfeitable. |
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Date:
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DIEBOLD, INCORPORATED | ||||||
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5
Jurisdiction under
|
Percent of voting securities
|
|||||
Domestic | which organized | owned by Registrant | ||||
|
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Data Information Management Systems, Inc.
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California | 100 | % | |||
DBD Investment Management Company
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Delaware | 100 | % | |||
Diebold Actcom Security Systems, Inc.
|
Delaware | 100 | % | |||
Diebold Australia Holding Company, Inc.
|
Delaware | 100 | % | |||
Diebold Enterprise Security Systems, Inc.
|
New York | 100 | % | |||
Diebold Eras, Incorporated
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Ohio | 100 | % | |||
Diebold Finance Company, Inc.
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Delaware | 100 | %(1) | |||
Diebold Fire Services, Inc.
|
Delaware | 100 | % | |||
Diebold Fire Services (Virginia), Inc.
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Virginia | 100 | % | |||
Diebold Global Finance Corporation
|
Delaware | 100 | % | |||
Diebold Holding Company, Inc.
|
Delaware | 100 | % | |||
Diebold Information and Security Systems, LLC
|
Delaware | 100 | % | |||
Diebold Investment Company
|
Delaware | 100 | % | |||
Diebold Latin America Holding Company, LLC
|
Delaware | 100 | % | |||
Diebold Mexico Holding Company, Inc.
|
Delaware | 100 | % | |||
Diebold Midwest Manufacturing, Inc.
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Delaware | 100 | % | |||
Diebold Self-Service Systems
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New York | 100 | %(2) | |||
Diebold Southeast Manufacturing, Inc.
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Delaware | 100 | %(3) | |||
Diebold SST Holding Company, Inc.
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Delaware | 100 | % | |||
FirstLine, Inc.
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California | 100 | % | |||
Maintenance Acquisition Company No. 1, LLC
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Delaware | 100 | % | |||
Diebold Software Solutions, Inc.
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Delaware | 100 | % | |||
Premier Election Solutions, Inc.
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Delaware | 100 | %(10) | |||
VDM Holding Company, Inc.
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Delaware | 100 | % | |||
Verdi & Associates, Inc.
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New York | 100 | % | |||
Jurisdiction under
|
Percent of voting securities
|
|||||
International | which organized | owned by Registrant | ||||
|
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Bitelco Diebold Chile Limitada
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Chile | 100 | %(24) | |||
C.R. Panama, Inc.
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Panama | 100 | %(14) | |||
Cable Print N.V.
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Belgium | 100 | % | |||
Cardinal Brothers Consulting Pty. Ltd.
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Australia | 100 | %(9) | |||
Caribbean Self Service and Security LTD.
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Barbados | 50 | %(13) |
Jurisdiction under
Percent of voting securities
International
which organized
owned by Registrant
Mexico
100
%(23)
Costa Rica
99.99
%(41)
Nicaragua
99
%(39)
Panama
51
%(37)
Dominican Republic
99.85
%(40)
Honduras
99
%(39)
Panama
99.99
%(41)
El Salvador
99
%(39)
Guatemala
99
%(39)
Panama
100
%(14)
Thailand
100
%
South Africa
100
%(21)
South Africa
100
%(34)
Argentina
100
%(14)
Turkey
100
%(19)
New Zealand
100
%(9)
Australia
100
%(6)
Belgium
100
%(20)
Bolivia
100
%(38)
Brazil
100
%(14)
Canada
100
%
France
100
%
Colombia
100
%(17)
Czech Republic
100
%(7)
Ecuador
100
%(22)
United Kingdom
100
%
United Kingdom
100
%(27)
United Kingdom
100
%(28)
Netherlands
100
%(29)
Ireland
100
%(29)
Peoples Republic of China
85
%(32)
France
100
%(7)
Hungary
100
%(7)
Hungary
100
%
India
100
%(35)
Jurisdiction under
Percent of voting securities
International
which organized
owned by Registrant
United Kingdom
100
%(7)
Italy
100
%(16)
Mexico
100
%(4)
Netherlands
100
%(7)
Venezuela
50
%(13)
Austria
100
%(7)
Hong Kong
100
%
Panama
100
%(14)
Paraguay
100
%(24)
Peru
100
%(14)
Philippines
100
%(36)
Australia
100
%(9)
Poland
100
%(7)
Portugal
100
%(7)
United Kingdom
100
%(26)
Switzerland
100
%(7)
Switzerland
100
%(18)
Russia
100
%(7)
Singapore
100
%
Slovakia
100
%(7)
India
100
%(11)
United Kingdom
100
%(12)
South Africa
75
%(33)
Spain
100
%(25)
Switzerland
100
%(18)
India
100
%
Uruguay
100
%(14)
Malaysia
100
%
Panama
100
%(14)
Indonesia
100
%(8)
Canada
100
%
Brazil
100
%(15)
Brazil
100
%(31)
Jurisdiction under
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Percent of voting securities
|
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International | which organized | owned by Registrant | ||||
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SIAB (HK) Limited
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Hong Kong | 100 | %(5) | |||
Sound Security Pty Ltd.
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Australia | 100 | %(9) | |||
The Diebold Company of Canada, Ltd.
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Canada | 100 | % |
(1) | 100 percent of voting securities are owned by Diebold Investment Company, which is 100 percent owned by Registrant. | |
(2) | 70 percent of partnership interest is owned by Diebold Holding Company, Inc., which is 100 percent owned by Registrant, while the remaining 30 percent partnership interest is owned by Diebold SST Holding Company, Inc., which is 100 percent owned by Registrant. | |
(3) | 100 percent of voting securities are owned by Diebold Midwest Manufacturing, Inc., which is 100 percent owned by Registrant. | |
(4) | 100 percent of voting securities are owned by Diebold Mexico Holding Company, Inc., which is 100 percent owned by Registrant. | |
(5) | 100 percent of voting securities are owned by Diebold Self-Service Systems, which is 70 percent owned by Diebold Holding Company, Inc. and 30 percent owned by Diebold SST Holding Company, Inc., both of which are 100 percent owned by Registrant. | |
(6) | 100 percent of voting securities are owned by Diebold Australia Holding Company, Inc., which is 100 percent owned by Registrant. | |
(7) | 100 percent of voting securities are owned by Diebold Self-Service Solutions Limited Liability Company, which is 95 percent owned by Registrant and 5 percent owned by Diebold Holding Company, Inc., which is 100 percent owned by Registrant. | |
(8) | 88.89 percent of voting securities are owned by Registrant, and 11.11 percent of voting securities are owned by Diebold Pacific, Limited, which is 100 percent owned by Registrant. | |
(9) | 100 percent of voting securities are owned by Diebold Australia Pty. Ltd., which is 100 percent owned by Diebold Australia Holding Company, Inc., which is 100 percent owned by Registrant. | |
(10) | 100 percent of voting securities are owned by Premier Election Solutions Canada ULC, which is 100 percent owned by Registrant. | |
(11) | 99.99 percent of voting securities are owned by Diebold Self-Service Solutions Limited Liability Company, which is 95 percent owned by Registrant and 5 percent owned by Diebold Holding Company, Inc., which is 100 percent owned by Registrant, while the remaining .01 percent of voting securities is owned by Registrant. | |
(12) | 100 percent of voting securities are owned by Diebold Software Solutions, Inc., which is 100 percent owned by Registrant. | |
(13) | 50 percent of voting securities are owned by Diebold Latin America Holding Company, LLC, which is 100 percent owned by Registrant. | |
(14) | 100 percent of voting securities are owned by Diebold Latin America Holding Company, LLC, which is 100 percent owned by Registrant. | |
(15) | 100 percent of voting securities are owned by Diebold Brasil LTDA, which is 100 percent owned by Diebold Latin America Holding Company, LLC, which is 100 percent owned by Registrant. | |
(16) | 100 percent of voting securities are owned by Diebold International Limited, which is 100 percent owned by Diebold Self-Service Solutions Limited Liability Company, which is 95 percent owned by Registrant and 5 percent owned by Diebold Holding Company, Inc., which is 100 percent owned by Registrant. | |
(17) | 21.44 percent of voting securities are owned by Diebold Latin America Holding Company, LLC, which is 100 percent owned by Registrant; 16.78 percent of voting securities are owned by Diebold Panama, Inc., which is 100 percent owned by Diebold Latin America Holding Company, Inc., which is 100 percent owned by Registrant; 16.78 percent of voting securities are owned by DCHC SA, which is 100 percent owned by Diebold Latin America Holding Company, LLC, which is 100 percent owned by Registrant; 13.5 percent of voting securities are owned by J.J.F. Panama, Inc, which is 100 percent owned by Diebold Latin America Holding Company, LLC, which is 100 percent owned by Registrant; and the remaining 31.5 percent of voting securities |
are owned by C.R. Panama, Inc., which is 100 percent owned by Diebold Latin America Holding Company, LLC, which is 100 percent owned by Registrant. | ||
(18) | 95 percent of voting securities are owned by Registrant, while 5 percent of voting securities are owned by Diebold Holding Company, Inc., which is 100 percent owned by Registrant. | |
(19) | 50 percent of voting securities are owned by Diebold Netherlands B.V., which is 100 percent owned by Diebold Self-Service Solutions Limited Liability Company, while the remaining 50 percent of voting securities are owned by Diebold Self-Service Solutions Limited Liability Company, which is 95 percent owned by Registrant and 5 percent owned by Diebold Holding Company, Inc., which is 100 percent owned by Registrant. | |
(20) | 10 percent of voting securities are owned by Diebold Selbstbedienungssysteme GmbH, which is 100 percent owned by Diebold Self Service Solutions Limited Liability Company, while the remaining 90 percent of voting securities are owned by Diebold Self -Service Solutions Limited Liability Company, which is 95 percent owned by Registrant and 5 percent owned by Diebold Holding Company, Inc., which is 100 percent owned by Registrant. | |
(21) | 100 percent of voting securities are owned by Diebold Africa Investment Holdings Pty. Ltd., which is 100 percent owned by Diebold Switzerland Holding Company, LLC (refer to 18 for ownership). | |
(22) | 99.99 percent of voting securities are owned by Diebold Colombia SA (refer to 17 for ownership), while the remaining 0.01 percent of voting securities are owned by Diebold Latin America Holding Company, Inc., which is 100 percent owned by Registrant. | |
(23) | .01 percent of voting securities are owned by Registrant, while 99.99 percent of voting securities are owned by Impexa LLC, which is 100 percent owned by Diebold Mexico Holding Company, Inc., which is 100 percent owned by Registrant. | |
(24) | 1 percent of voting securities are owned by Registrant, while 99 percent of voting securities are owned by Diebold Latin America Holding Company, LLC, which is 100 percent owned by Registrant. | |
(25) | 100 percent of voting securities are owned by VDM Holding Company, Inc., which is 100 percent owned by Registrant. | |
(26) | 100 percent of voting securities are owned by Diebold Enterprise Security Systems, Inc., which is 100 percent owned by Registrant. | |
(27) | 100 percent of voting securities are owned by Diebold Security Systems Limited, which is 100 percent owned by Diebold Enterprise Security Systems, Inc., which is 100 percent owned by Registrant. | |
(28) | 100 percent of voting securities are owned by Diebold Enterprise Security Systems Holdings UK Limited, which is 100 percent owned by Diebold Security Systems Limited, which is 100 percent owned by Diebold Enterprise Security Systems, Inc., which is 100 percent owned by Registrant. | |
(29) | 100 percent of voting securities are owned by Diebold Enterprise Security Systems UK Limited (refer to 28 for ownership). | |
(30) | 100 percent of voting securities are owned by Diebold Brazil Services Holding Company ULC, which is 100 percent owned by Registrant. | |
(31) | 100 percent of voting securities are owned by Diebold Brazil Servicios e Participacoes Limitada, which is 100 percent owned by Diebold Brazil Services Holding Company ULC, which is 100 percent owned by Registrant. | |
(32) | 85 percent of voting securities are owned by Diebold Switzerland Holding Company, LLC (refer to 18 for ownership). | |
(33) | 75 percent of voting securities are owned by Diebold Africa Investment Holdings Pty. Ltd., which is 100 percent owned by Diebold Switzerland Holding Company, LLC (refer to 18 for ownership). | |
(34) | 100 percent of voting securities are owned by Diebold Switzerland Holding Company, LLC (refer to 18 for ownership). | |
(35) | 95.45 percent of voting securities are owned by Registrant, while 4.55 percent of voting securities are owned by Diebold Holding Company Inc., which is 100 percent owned by Registrant. | |
(36) | 100 percent of voting securities are owned by Diebold (Thailand) Company Limited, which is 100 percent owned by Registrant. | |
(37) | 51 percent of voting securities are owned by Diebold Latin America Holding Company, Inc., which is 100 percent owned by Registrant. |
(38) | 60 percent of voting securities are owned by Diebold Columbia, S.A. (refer to 17 for ownership) and 40 percent owned by Diebold Peru, S.r.L. (refer to 14 for ownership). | |
(39) | 99 percent of voting securities are owned by D&G Centroamerica, S. de R. L. (refer to 37 for ownership). | |
(40) | 99.85 percent of voting securities are owned by D&G Centroamerica, S. de R. L. (refer to 37 for ownership). | |
(41) | 99.99 percent of voting securities are owned by D&G Centroamerica, S. de R. L. (refer to 37 for ownership). |
Signed in the presence of: | Signature | Date | ||
/s/Chad F. Hesse
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/s/Phillip R. Cox | February 27, 2009 | ||
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Phillip R. Cox, Director | |||
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/s/Chad F. Hesse
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/s/Gale S. Fitzgerald | February 27, 2009 | ||
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Gale S. Fitzgerald, Director | |||
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/s/Chad F. Hesse
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/s/Phillip B. Lassiter | February 27, 2009 | ||
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Phillip B. Lassiter, Director | |||
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/s/Chad F. Hesse
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/s/John N. Lauer | February 27, 2009 | ||
|
John N. Lauer, Director |
1) | I have reviewed this annual report on Form 10-K 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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5) | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants 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 registrants 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 registrants internal control over financial reporting. |
By: |
/s/
Thomas
W. Swidarski
|
1) | I have reviewed this annual report on Form 10-K 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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5) | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants 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 registrants 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 registrants internal control over financial reporting. |
By: |
/s/
Kevin
J. Krakora
|
1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
2) | 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. |
2) | 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. |