FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
OR
Commission file number 1-4879
DIEBOLD, INCORPORATED
(Exact name of Registrant as specified in its charter)
Ohio 34-0183970
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
P. O. Box 8230, Canton, Ohio 44711-8230
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(Address of principal executive offices) (Zip Code)
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered:
Common Shares $1.25 Par Value New York Stock Exchange
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates of the Registrant as of February 28, 1995. The aggregate market value was computed by using the closing price on the New York Stock Exchange on February 28, 1995 of $35.375 per share.
Common Shares, Par Value $1.25 Per Share $1,059,349,054
Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date.
Class Outstanding at March 1, 1995
Common Shares $1.25 Par Value 30,496,763 Shares
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DOCUMENTS INCORPORATED BY REFERENCE
(1) PROXY STATEMENT FOR 1995 ANNUAL MEETING
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OF SHAREHOLDERS TO BE HELD APRIL 5, 1995
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PART OF 10-K
INTO WHICH
CAPTION OR HEADING PAGE NO. INCORPORATED ITEM NO.
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Information about Nominees for
Election as Directors 3-9 III 10
Executive Compensation 9-20 III 11
Annual Meeting of Shareholders;
Security Ownership of Directors
and Management 1-7 III 12
Compensation Committee Interlocks
and Insider Participation 9 III 13
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PART I.
The Registrant was incorporated under the laws of the State of Ohio in August, 1876, succeeding a proprietorship established in 1859 and is engaged primarily in the sale, manufacture, installation and service of automated self-service transaction systems, security products and software.
During 1994, no significant changes occurred in the manner of conducting the Registrant's business.
The Registrant operates predominantly in one industry segment: financial systems and equipment. This segment accounts for more than 90% of the consolidated net sales, operating profit and identifiable assets.
The Registrant develops, manufactures, sells and services automated teller machines (ATMs), electronic and physical security systems, various products used to equip bank facilities, software and systems for global financial and commercial markets. Sales of systems and equipment are made directly to customers by the Registrant's sales personnel and by manufacturer's representatives and distributors. The sales/support organization works closely with customers and their consultants to analyze and fulfill the customers' needs. Products are sold under contract for future delivery at agreed upon prices. In 1994, 1993, and 1992 the Registrant's sales and services of financial systems and equipment accounted for more than 90% of consolidated net sales.
The principal raw materials used by the Registrant are steel, copper, brass, lumber and plastics which are purchased from various major suppliers. Electronic parts and components are also procured from various suppliers. These materials and components are generally available in quantity at this time.
No customer of the Registrant accounted for more than 10% of consolidated net sales in 1994, and no material part of the business is dependent upon a single customer or a few customers, the loss of any one or more of whom would have a material adverse effect on the business of the Registrant.
Backlog as of December 31, 1994 was $152,511,000 a 5% decrease from December 31, 1993 backlog of $161,303,000. The Registrant believes, however, that with varying customer lead time requirements and other industry factors, order backlog information is not, by itself, a meaningful indicator of future revenue streams. There are numerous factors which influence the amount and timing of revenue in future periods.
All phases of the Registrant's business are highly competitive; some products being in competition directly with similar products and others competing with alternative products having similar uses or producing similar results. Registrant believes, based upon outside independent industry surveys, that it is the leading manufacturer of automated teller machines in the United States and is also a market leader internationally. In the area of automated transaction systems, the Registrant competes primarily with AT&T Global Information Systems (formerly NCR Corporation) and Fujitsu - ICL Systems, Inc. In serving the security products market for the financial services industry, the Registrant meets numerous large competitors in the security equipment and systems field. Of these, some compete in only one or two product lines, while others sell a broader spectrum of products competing with the Registrant. However, the unavailability of comparative sales information and the large variety of individual products makes it impossible to give reasonable estimates of the Registrant's competitive ranking in or share of the market in its security product fields of activity. Many smaller manufacturers of safes, surveillance cameras, alarm systems and remote drive-up equipment are found in the market.
The Registrant charged to expense approximately $34.5 million in 1994, $25.5 million in 1993 and $24.5 million in 1992 for research and development costs.
Compliance by the Registrant with federal, state and local environmental protection laws during 1994 had no material effect upon capital expenditures, earnings or the competitive position of the Registrant and its subsidiaries.
The total number of persons employed by the Registrant at December 31, 1994 was 4,731 compared to 4,202 at the end of the preceding year.
Sales to customers in foreign countries approximated 19.8%, 17.6% and 18.2% of consolidated net sales for 1994, 1993 and 1992, respectively.
The Registrant's corporate offices are located in Canton, Ohio. It owns facilities (approximately 1.6 million square feet) in Canton, Uniontown and Newark, Ohio; Lynchburg, Virginia; Sumter, South Carolina; and leases facilities (approximately .3 million square feet) in Akron, Canton, Canal Fulton, Massillon, Newark and Seville, Ohio; Mexico City, Mexico; and Shanghai, China. These facilities house manufacturing, production, associated engineering, warehousing, testing, administration and development and distribution for all product lines. The Registrant believes these facilities are both suitable and adequate for existing operations.
At December 31, 1994, the Registrant was a party to several lawsuits that were incurred in the normal course of business, none of which individually or in the aggregate is considered material in relation to the Registrant's financial position or results of operations.
No matters were submitted to a vote of security holders during the fourth quarter of 1994.
Refer to pages 6 through 9.
EXECUTIVE OFFICERS OF THE REGISTRANT
Other Positions
Year Elected Held Last
Name Age Title Present Office Five Years
- -------------------------- --- ---------------------------- -------------- --------------
1989-93
-------
Robert W. Mahoney 58 Chairman of the Board, 1993 Chairman of the Board
President and Chief and Chief Executive
Executive Officer Officer and Director
and Director
1989-93
-------
Robert P. Barone 57 Vice Chairman 1993 President and Chief
and Director Operating Officer and
(until 8/26/94) Director
1990-91
-------
Chief Executive
Officer - InterBold
and Director
1990-93
-------
Gerald F. Morris 51 Executive Vice President 1993 Senior Vice President
and Chief Financial Officer and Chief Financial Officer
1989-90
-------
Senior Vice President
Finance, Treasurer and
Chief Financial Officer
The Foxboro Company
1990-93
-------
William T. Blair 61 Executive Vice President 1993 Vice President and
General Manager
North American
Sales and Service
1989-90
-------
Vice President,
Customer Services
1986-89
-------
Senior Vice President
Customer and Major
Account Marketing
Xerox Corporation
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EXECUTIVE OFFICERS OF THE REGISTRANT - (continued)
Other Positions
Year Elected Held Last
Name Age Title Present Office Five Years
- ---------------------- --- ------------------------- -------------- ---------------
1991-93
-------
Gregg A. Searle 46 Executive Vice President 1993 Vice President -
Diebold
General Manager -
InterBold
1990-91
-------
Vice President,
U.S. Sales & Marketing -
InterBold
1987-90
-------
Regional Manager,
Eastern Ohio Region,
U.S.Marketing Group,
IBM Corporation
1993
----
Alben W. Warf 56 Group Vice President, 1994 Vice President, Diebold
Self-Service Systems and General Manager,
and General Manager, Interbold
InterBold
1990-93
-------
Vice President
Development and
Manufacturing -
Diebold and InterBold
1989-90
-------
Vice President
Engineering and
Manufacturing
1987-89
-------
Vice President and
General Manager of
Engineering and
Manufacturing
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EXECUTIVE OFFICERS OF THE REGISTRANT - (continued)
Other Positions
Year Elected Held Last
Name Age Title Present Office Five Years
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1991-93
-------
Frank G. D'Angelo 49 Vice President, Diebold 1993 Vice President,
and General Manager Customer Service/Systems
and Chief Executive Operations and Support
Officer, Diebold Mexico,
S.A. de C.V. 1990-91
-------
Vice President,
Software Development
and Support-InterBold
1989-90
-------
Vice President, Software
Development and
Information Systems
1988-89
-------
Vice President, Product
Management and
Application Systems
1987-89
-------
Warren W. Dettinger 41 Vice President, 1989 Vice President and
General Counsel and General Counsel
Assistant Secretary
1990
----
Donald E. Eagon, Jr. 52 Vice President 1990 Vice President
Corporate Communications Public Relations and
Advertising
1988-90
-------
Vice President
Public Affairs
Figgie International Inc.
1983-93
-------
Charee Francis-Vogelsang 48 Vice President and 1993 Vice President
Secretary, Diebold and Secretary
and Secretary, InterBold
1989-90
-------
Bartholomew J. Frazzitta 52 Vice President and 1990 Vice President, Marketing
General Manager, and Product Management
Security Products 1987-89
-------
Vice President, Sales and
Marketing - Western
Division
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EXECUTIVE OFFICERS OF THE REGISTRANT - (continued)
Other Positions
Year Elected Held Last
Name Age Title Present Office Five Years
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1990-92
-------
Michael J. Hillock 43 Vice President and General 1993 Vice President,
Manager, Sales and Service North American
Europe, Middle East, and Africa Sales and Service -
Eastern Division
1988-90
-------
Managing Director,
Diebold Pacific Limited
1988-93
-------
Larry D. Ingram 48 Vice President 1993 Divisional Vice President -
Procurement and Services Materials Management
1991-92
-------
Edgar N. Petersen 56 Vice President and General 1993 Vice President and General
Manager, Sales and Service Manager, International
Canada, Asia Pacific, and Sales and Service
Latin America 1990-91
-------
Vice President
International Sales
and Marketing - InterBold
1989-90
-------
Vice President
International Sales
1988-89
-------
Vice President
International Sales and
Marketing
1988-91
-------
Charles B. Scheurer 53 Vice President, 1991 Vice President,
Human Resources Human Resources
and Corporate Services
1988-90
-------
Robert L. Stockamp 51 Vice President and 1990 Controller - Operations
Corporate Controller
1988-90
-------
Robert J. Warren 48 Vice President and 1990 Controller, Corporate
Treasurer Financial Accounting and
Services and
Assistant Treasurer
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There is no family relationship, either by blood, marriage or adoption, between any of the executive officers of the Registrant.
PART II.
On February 1, 1994 the Board of Directors of the Registrant declared a three-for-two stock split which was effected in the form of a stock dividend, distributed on February 22, 1994 to shareholders of record on February 10, 1994. Accordingly, all numbers of Common Shares, except authorized shares and treasury shares, and all per share data have been restated to reflect this stock split in addition to the three-for-two stock split declared on January 27, 1993, distributed on February 26, 1993, to shareholders of record on February 10, 1993.
The Common Shares of the Registrant are listed on the New York Stock Exchange with a symbol of DBD. The price ranges of Common Shares for the Registrant are as follows:
1994 1993 1992
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High Low High Low High Low
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1st Quarter $42.75 $33.88 $31.50 $26.06 $26.88 $20.78
2nd Quarter 45.25 35.75 35.84 26.84 25.28 20.94
3rd Quarter 46.75 39.88 40.26 34.16 25.06 23.22
4th Quarter 45.13 39.38 41.08 36.66 27.56 23.40
------ ------ ------ ------ ------ ------
Full Year $46.75 $33.88 $41.08 $26.06 $27.56 $20.78
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There were approximately 3,400 registered shareholders of record at December 31, 1994.
On the basis of amounts paid and declared the annualized quarterly dividends per share were $0.88 in 1994, $0.80 in 1993 and $0.75 in 1992.
1994 1993 1992 1991 1990
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Net Sales $760,171 $623,277 $543,852 $506,217 $476,054
Net Income * 63,511 48,374 23,205 35,745 27,111
Net Income per share* 2.09 1.60 0.77 1.20 0.91
Total Assets 661,883 609,019 558,914 535,593 519,932
Long term debt, less current maturities -- -- -- 2,000 3,250
Cash dividends paid per Common Share $0.88 $0.80 $0.75 $0.71 $0.67
*1992 amounts include a one-time charge of $17,932 ($0.60 per share)
resulting from the adoption of SFAS 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions."
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
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AND RESULTS OF OPERATIONS.
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MANAGEMENT'S ANALYSIS OF RESULTS OF OPERATIONS
The table below presents the changes in comparative financial data from 1992 to
1994. Comments on significant year-to-year changes follow the table.
1994 1993
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Percent Percent Percent Percent
of Net Increase of Net Increase
(Dollars in thousands) Amount Sales (Decrease) Amount Sales (Decrease)
==============================================================================================================
Net sales
Products . . . . . . . . . . . . . $479,314 63.1% 30.5% $367,385 58.9% 23.3%
Services . . . . . . . . . . . . . 280,857 36.9 9.8 255,892 41.1 4.1
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760,171 100.0 22.0 623,277 100.0 14.6
Cost of sales
Products . . . . . . . . . . . . . 311,790 65.0 33.8 233,041 63.4 25.6
Services . . . . . . . . . . . . . 192,699 68.6 6.9 180,198 70.4 4.5
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504,489 66.4 22.1 413,239 66.3 15.4
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Gross profit . . . . . . . . . . . . 255,682 33.6 21.7 210,038 33.7 13.0
Selling and administrative expense . 128,309 16.9 20.9 106,110 17.0 10.4
Research, development and
engineering expense . . . . . . . . 36,599 4.8 5.1 34,838 5.6 (3.0)
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164,908 21.7 17.0 140,948 22.6 6.8
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Operating profit . . . . . . . . . . 90,774 11.9 31.4 69,090 11.1 28.4
Other income, net . . . . . . . . . . 5,152 0.7 (9.0) 5,664 0.9 61.0
Minority interest . . . . . . . . . . (1,948) (0.3) (54.0) (4,239) (0.7) 70.7
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Income before taxes and cumulative
effect of change in accounting
principles . . . . . . . . . . . . 93,978 12.4 33.3 70,515 11.3 28.6
Taxes on income . . . . . . . . . . . 30,467 4.0 37.6 22,141 3.5 61.6
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Income before cumulative effect of
change in accounting principles . . 63,511 8.4 31.3 48,374 7.8 17.6
Cumulative effect of change in
accounting principles . . . . . . . --- --- --- --- --- ---
-------------------------------------------------------------------
Net income . . . . . . . . . . . . . $ 63,511 8.4% 31.3% $ 48,374 7.8% 108.5%
===========================================================================================================================
1992
------------------
Percent
of Net
(Dollars in thousands) Amount Sales
==============================================================
Net sales
Products . . . . . . . . . . . . . $298,039 54.8%
Services . . . . . . . . . . . . . 245,813 45.2
------------------
543,852 100.0
Cost of sales
Products . . . . . . . . . . . . . 185,534 62.3
Services . . . . . . . . . . . . . 172,497 70.2
------------------
358,031 65.8
------------------
Gross profit . . . . . . . . . . . . 185,821 34.2
Selling and administrative expense . 96,100 17.7
Research, development and
engineering expense . . . . . . . . 35,920 6.6
------------------
132,020 24.3
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Operating profit . . . . . . . . . . 53,801 9.9
Other income, net . . . . . . . . . . 3,519 0.6
Minority interest . . . . . . . . . . (2,484) (0.4)
------------------
Income before taxes and cumulative
effect of change in accounting
principles . . . . . . . . . . . . 54,836 10.1
Taxes on income . . . . . . . . . . . 13,699 2.5
------------------
Income before cumulative effect of
change in accounting principles . . 41,137 7.6
Cumulative effect of change in
accounting principles . . . . . . . (17,932) (3.3)
------------------
Net income . . . . . . . . . . . . . $ 23,205 4.3%
==================
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NET SALES
Consolidated net sales for 1994 totaled $760,171, which represented growth of
$136,894 or 22.0 percent from 1993, and $216,319 or 39.8 percent from 1992.
This was the Registrant's fifth consecutive year of record sales.
Product sales of $479,314 grew $111,929 or 30.5 percent from 1993 and $181,275 or 60.8 percent from 1992. The Registrant continued to experience strong growth in domestic sales of ATMs, and also realized increases in domestic sales from all other major product lines during 1994. Total domestic product revenue was up 30.5 percent from 1993. Sales of products outside the U.S. increased 30.4 percent from 1993. The planned decline in fees received by InterBold for the sale of ATMs manufactured by IBM reduced the sales growth of Registrant's products abroad.
Service net sales of $280,857 increased $24,965 or 9.8 percent from 1993 and were up $35,044 or 14.3 percent from 1992. The major factors contributing to the service revenue gain in 1994 were the continuing growth of the installed base of equipment resulting from new product installations, growth of new service offerings such as first-line maintenance and the acquisition of Mexico's largest ATM service business.
Total product backlog of unfilled orders was $152,511 at December 31, 1994, compared to $161,303 at the end of 1993 and $106,122 at the end of 1992. In response to customer requirements for shorter manufacturing lead times, the Registrant has committed to reducing its production cycle time. The Registrant believes that due to varying customer lead time requirements and other industry factors, order backlog information is not, by itself, a meaningful indicator of future revenue streams. There are numerous factors which influence the amount and timing of revenue in future periods.
COST OF SALES AND EXPENSES
Consolidated cost of sales for 1994 was $504,489, compared to $413,239 in 1993
and $358,031 in 1992.
Gross profits on product sales increased $33,180 and $55,019 from 1993 and 1992, respectively, to a level of $167,524 in 1994. Product gross margins in 1994 were 35.0 percent of product sales, compared to 36.6 percent in 1993 and 37.7 percent in 1992.
The anticipated reduction in license fees received from IBM by InterBold reduced gross margin percentages. This trend has continued as these fees have become a smaller percentage of total ATM sales as a result of continuing international market acceptance of the InterBold i and ix Series ATMs. The Registrant believes the planned phase-out of the fees will have minimal effect on product gross margin percentages going forward. Excluding the effect of the fees, product gross margins continued to improve in 1994.
Service gross profits of $88,158 in 1994 increased from $75,694 in 1993 and $73,316 in 1992. Service gross margins as a percentage of service sales also improved to 31.4 percent from 29.6 percent in 1993 and 29.8 percent in 1992. Even with the establishment of money-back guarantees for service performance, cost controls and improved reliability of products enabled service profitability to improve. The performance of Diebold Mexico's service business which was acquired at the beginning of 1994 also contributed favorably to service gross margins.
Supporting the Registrant's volume growth and market expansion, operating expenses increased $23,960 or 17.0 percent from 1993 and were $32,888 or 24.9 percent above 1992. Total operating expenses of $164,908 in 1994 improved to 21.7 percent of net sales, from 22.6 percent in 1993 and 24.3 percent in 1992.
Operating profit of $90,774 in 1994 represented an increase of $21,684 or 31.4 percent from 1993 and $36,973 or 68.7 percent from 1992. Operating profit again grew faster than net sales as manufacturing cost reductions and expense controls allowed the operating profit margin to widen from 11.1 percent and 9.9 percent in 1993 and 1992, respectively, to 11.9 percent in 1994.
OTHER INCOME, NET AND MINORITY INTEREST
Other income, net decreased $512 or 9.0 percent from 1993 but was $1,633 or
46.4 percent above 1992. Investment income increased slightly in 1994 due to
rising interest rates and return on investment in lease receivables. The
increase in investment income was offset, however, by increases in certain
expenses related to Registrant-owned insurance contracts and amortization
related to the purchase of certain assets.
Minority interest of $1,948 decreased from $4,239 in 1993 and consisted primarily of income or losses allocated to the minority ownership of InterBold and Diebold Financial Equipment Company, Ltd. (China). Minority interests for both companies are calculated as a percentage of profits of the joint ventures based on formulas defined in the partnership agreements.
INCOME
Income before taxes and cumulative effect of change
in accounting principles amounted to $93,978 in 1994. This was an increase of $23,463 or 33.3 percent from 1993 and $39,142 or 71.4 percent from 1992. Income before taxes and cumulative effect of change in accounting principles also improved as a percentage of sales, representing 12.4 percent in 1994 compared to 11.3 percent in 1993 and 10.1 percent in 1992.
The effective tax rate was 32.4 percent in 1994, compared to 31.4 percent in 1993 and 25.0 percent in 1992. The primary reason for the higher tax rate in 1994 was a reduction in tax-exempt interest as a percentage of pretax income. The 1992 rate was favorably affected by the settlement of a tax case involving accounting for rotatable spare parts. Details of the reconciliation between the U.S. statutory rate and the effective tax rate are included in Note 12 of the 1994 Consolidated Financial Statements.
Income before cumulative effect of change in accounting principles increased to $63,511 or 8.4 percent of consolidated net sales, compared to income of $48,374 or 7.8 percent of net sales in 1993 and $41,137 or 7.6 percent of net sales in 1992.
MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITION
The Registrant continued to enhance its financial position during 1994. Total
assets increased $52,864 or 8.7 percent to a 1994 year-end level of $661,883.
Asset turnover (excluding cash, cash equivalents and short-term and long-term
investment securities) increased to 1.89 in 1994 from 1.78 in 1993.
Total current assets at December 31, 1994, of $326,089 represented an increase of $14,589 or 4.7 percent from the prior year-end. The increase in trade receivables and inventories comprises the majority of this increase and is a result of higher sales volumes and expansion of international operations in 1994. Trade receivables increased $23,851 or 18.5 percent to a December 31, 1994, level of $153,107. However, as a percentage of consolidated net sales, trade receivables continued to decline from 22.2 percent and 20.7 percent in 1992 and 1993, respectively, to a 1994 level of 20.1 percent. Inventories at year-end 1994 totaled $85,543 which represented an increase of $10,560 or 14.1 percent from 1993.
Long-term securities and other investments declined by $25,532 or 14.1 percent to a December 31, 1994, level of $155,800 largely due to maturities of tax- exempt municipal bonds, which were reinvested into certain other assets. The Registrant anticipates being able to meet both short- and long-term operational funding requirements without liquidating individual securities prior to maturity by varying the length and timing of maturities within the portfolio. However, since most of these securities are marketable, they could readily be converted into cash and cash equivalents if needed. The Registrant adopted the provisions of the Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities," effective January 1, 1994.
Total property, plant and equipment, net of accumulated depreciation, was $64,713 at the end of 1994, which results in an increase of $4,053 or 6.7 percent over prior year-end. Capital expenditures were $22,641 in 1994 compared with $18,343 in 1993. This increase resulted primarily from the need to meet higher manufacturing capacity requirements, capital investments in new foreign operations and expansion of facilities for research, development and administration. Other assets increased as a result of increases in net lease receivables and certain assets acquired in relation to new businesses.
Total current liabilities at December 31, 1994, were $155,464, representing an increase of $16,893 or 12.2 percent from the prior year-end. The primary reason for the increase in current liabilities was an increase in accounts payable of $16,370 or 36.7 percent to a level of $60,962, reflecting increased purchasing activity to support higher sales volumes. The Registrant's current ratio was 2.1 at the end of 1994, compared to 2.3 at the end of 1993.
At December 31, 1994, the Registrant had lines of credit totaling $40,000, all unrestricted as to use. Due to the strong liquidity position, the Registrant continued its practice of having no long-term debt. The Registrant's financial position provides it with sufficient resources to meet projected future capital expenditures, dividend and working capital requirements. However, if the need arises, the Registrant's financial position should ensure the availability of adequate additional financial resources.
Minority interests of $15,028 represented the minority interest in InterBold owned by IBM and the minority interests in Diebold Financial Equipment Company, Ltd. (China) owned by the Shanghai FarEast Aero-Technology Import and Export Corporation and the Industrial and Commercial Bank of China, Shanghai Pudong Branch. Shareholders' equity increased $32,172 or 7.5 percent to $459,219 at December 31, 1994. Included within shareholders' equity are a translation adjustment related to the year-end revaluation of foreign net assets and the effects of adopting Statement of Financial Accounting Standards No. 115. Shareholders' equity per share was $15.08 at the end of 1994 compared to $14.11 in 1993. The Common Shares of the Registrant are
listed on the New York Stock Exchange with a symbol of DBD. There were approximately 3,400 shareholders of record as of December 31, 1994.
The Board of Directors declared a first-quarter 1995 cash dividend of $0.24 per share. This amount, which represents a 9.0 percent increase from the prior year's quarterly dividend rate, will be paid on March 10, 1995, to shareholders of record on February 17, 1995. Comparative quarterly cash dividends paid in 1994 and 1993 were $0.22 and $0.20, respectively.
MANAGEMENT'S ANALYSIS OF CASH FLOWS
During 1994, the Registrant generated $41,333 in cash from operating
activities, compared to $94,577 in 1993 and $86,485 in 1992. In addition to
net income of $63,511, adjusted for depreciation, amortization and other
charges of $31,014, increases in accounts payables of $16,370 also aided cash
provided by operations. Cash in operations was utilized to fund long-term
lease receivables and increases in inventory levels and trade receivables as a
result of additional sales volumes and formation of international operations.
Expressed as a percentage of total assets employed, the Registrant's cash yield
from operations was 6.2 percent in 1994 and 15.5 percent in 1993 and 1992.
Cash generated from operating activities in 1994 was used to reinvest
$40,615, net, in assets of the Registrant, compared with $63,303 in 1993 and
$58,838 in 1992. The Registrant returned $26,682 to shareholders in the form
of cash dividends paid during 1994, which was a 10.3 percent increase from 1993
and an 18.8 percent increase from 1992.
OTHER BUSINESS INFORMATION
In January 1994, the Registrant purchased 100 percent of the ATM distribution
and certain related businesses of Hidromex, S.A. de C.V., to form Diebold
Mexico, S.A. de C.V. This new subsidiary is responsible for the distribution
and service of ATMs and certain other products in the Mexican market. In
January 1994, the Registrant also acquired a 50 percent interest in OLTP ATM
Systems, C.A. which distributes, installs and services ATMs and certain other
products in Venezuela. Both of these actions were part of a continuing
strategy to strengthen the Registrant's international competitiveness by
actively seeking acquisitions, joint ventures and strategic alliances
throughout the world. As operations are established in foreign locations, the
Registrant recognizes that an increasing number of business transactions will
involve foreign currencies. To minimize foreign currency exchange risk, the
Registrant denominates transactions in U.S. dollars whenever feasible.
However, when that is not possible, the Registrant utilizes a strategy of
matching monetary assets and liabilities in each currency to the extent
practicable.
The Registrant also has a continuing strategy to leverage its technological expertise into new product applications and new markets for its products. At December 31, 1994, the Registrant owned 100 percent of MedSelect Systems, Inc., which was originally formed as a joint venture with Daily-Med, Inc. in 1993. MedSelect Systems, now a division of the Company, develops, manufactures and distributes medical supply, medication control and dispensing systems.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
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CONSOLIDATED BALANCE SHEETS
DIEBOLD, INCORPORATED AND SUBSIDIARIES
DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
1994 1993
==================================================================================================================================
ASSETS
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,285 $ 39,006
Short-term investments (Note 3) . . . . . . . . . . . . . . . . . . . . . . 38,400 32,907
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,107 129,256
Inventories (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,543 74,983
Deferred income taxes (Note 12) . . . . . . . . . . . . . . . . . . . . . . 24,572 18,125
Prepaid expense and other current assets . . . . . . . . . . . . . . . . . 7,182 17,223
- -----------------------------------------------------------------------------------------------------------------------------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . 326,089 311,500
- -----------------------------------------------------------------------------------------------------------------------------------
Securities and other investments (Note 3) . . . . . . . . . . . . . . . . . . 155,800 181,332
Property, plant and equipment, at cost (Note 5) . . . . . . . . . . . . . . . 152,314 146,400
Less accumulated depreciation and amortization . . . . . . . . . . . . . . 87,601 85,740
- -----------------------------------------------------------------------------------------------------------------------------------
64,713 60,660
Deferred income taxes (Note 12) . . . . . . . . . . . . . . . . . . . . . . . 5,042 ---
Other assets (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,239 55,527
- -----------------------------------------------------------------------------------------------------------------------------------
$661,883 $609,019
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,962 $ 44,592
Estimated income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 2,814 3,899
Accrued insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,350 15,149
Accrued installation costs . . . . . . . . . . . . . . . . . . . . . . . . 8,822 7,611
Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,470 53,629
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 20,046 13,691
- -----------------------------------------------------------------------------------------------------------------------------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . 155,464 138,571
- -----------------------------------------------------------------------------------------------------------------------------------
Pensions (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,545 8,111
Postretirement benefits (Note 10) . . . . . . . . . . . . . . . . . . . . . . 21,627 21,521
Deferred income taxes (Note 12) . . . . . . . . . . . . . . . . . . . . . . . --- 2,194
Minority interest (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . 15,028 11,575
Commitments and contingencies (Note 13) . . . . . . . . . . . . . . . . . . . --- ---
Shareholders' equity (Note 8)
Preferred Shares, no par value, authorized
1,000,000 shares, none issued . . . . . . . . . . . . . . . . . . . . . . --- ---
Common Shares, par value $1.25; authorized 50,000,000 shares;
issued 30,515,146 and 30,288,734 shares, respectively;
outstanding 30,460,046 and 30,259,566, respectively . . . . . . . . . . 38,144 37,861
Additional capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,320 64,423
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365,513 328,684
Treasury shares, at cost (55,100 and 29,168 shares, respectively) . . . . . (3,186) (1,744)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,572) (2,177)
- -----------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . 459,219 427,047
- -----------------------------------------------------------------------------------------------------------------------------------
$661,883 $609,019
==================================================================================================================================
See accompanying Notes to Consolidated Financial Statements.
|
CONSOLIDATED STATEMENTS OF INCOME
DIEBOLD, INCORPORATED AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(In thousands except per share amounts)
1994 1993 1992
==================================================================================================================================
Net sales
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $479,314 $367,385 $298,039
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280,857 255,892 245,813
- ----------------------------------------------------------------------------------------------------------------------------------
760,171 623,277 543,852
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of sales
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311,790 233,041 185,534
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,699 180,198 172,497
- ----------------------------------------------------------------------------------------------------------------------------------
504,489 413,239 358,031
- ----------------------------------------------------------------------------------------------------------------------------------
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255,682 210,038 185,821
Selling and administrative expense . . . . . . . . . . . . . . . . . 128,309 106,110 96,100
Research, development and engineering expense . . . . . . . . . . . . 36,599 34,838 35,920
- ----------------------------------------------------------------------------------------------------------------------------------
164,908 140,948 132,020
- ----------------------------------------------------------------------------------------------------------------------------------
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . 90,774 69,090 53,801
Other income (expense)
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . 11,051 10,477 9,307
Miscellaneous, net . . . . . . . . . . . . . . . . . . . . . . . . (5,899) (4,813) (5,788)
Minority interest (Note 2) . . . . . . . . . . . . . . . . . . . . . (1,948) (4,239) (2,484)
- ----------------------------------------------------------------------------------------------------------------------------------
Income before taxes and cumulative effect of change
in accounting principles . . . . . . . . . . . . . . . . . . . . . 93,978 70,515 54,836
Taxes on income (Note 12) . . . . . . . . . . . . . . . . . . . . . . 30,467 22,141 13,699
- ----------------------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of change
in accounting principles . . . . . . . . . . . . . . . . . . . . . 63,511 48,374 41,137
Cumulative effect of change in accounting
principles (Notes 1 and 10) . . . . . . . . . . . . . . . . . . . . -- -- (17,932)
- ----------------------------------------------------------------------------------------------------------------------------------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 63,511 $ 48,374 $ 23,205
==================================================================================================================================
Average number of shares (Notes 8 and 9) . . . . . . . . . . . . . . 30,330 30,231 30,075
Income per share (Notes 8 and 9)
Before cumulative effect of change . . . . . . . . . . . . . . . . $ 2.09 $ 1.60 $ 1.37
Cumulative effect of change . . . . . . . . . . . . . . . . . . . . -- -- (0.60)
- ----------------------------------------------------------------------------------------------------------------------------------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.09 $ 1.60 $ 0.77
==================================================================================================================================
See accompanying Notes to Consolidated Financial Statements.
|
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
DIEBOLD, INCORPORATED AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
Common Shares
--------------------
Par Additional Retained Treasury
Number* Value Capital Earnings Shares Other* Total
==================================================================================================================================
Balance,
January 1, 1992 . . . . . . . . . . . . . 29,952,922 $16,649 $77,990 $303,759 $(636) $(854) $396,908
- ----------------------------------------------------------------------------------------------------------------------------------
Net income - 1992 . . . . . . . . . . . . . 23,205 23,205
Stock options exercised . . . . . . . . . . 138,791 77 2,786 2,863
Unearned compensation . . . . . . . . . . . 45,450 25 1,108 (450) 683
Dividends declared (Note 8) . . . . . . . . (22,463) (22,463)
Pensions (Note 10) . . . . . . . . . . . . (626) (626)
Translation adjustment . . . . . . . . . . (543) (543)
Treasury shares . . . . . . . . . . . . . . (12,441) (571) (571)
Decrease in valuation allowance for
noncurrent marketable equity securities . 218 218
Three-for-two stock split (Note 8) . . . . 8,376 (8,376) ---
- ----------------------------------------------------------------------------------------------------------------------------------
Balance,
December 31, 1992 . . . . . . . . . . . . 30,124,722 $25,127 $73,508 $304,501 $(1,207) $(2,255) $399,674
- ----------------------------------------------------------------------------------------------------------------------------------
Net income - 1993 . . . . . . . . . . . . . 48,374 48,374
Stock options exercised . . . . . . . . . . 102,717 86 1,498 1,584
Unearned compensation . . . . . . . . . . . 6,750 6 195 280 481
Performance shares (Note 8) . . . . . . . . 48,888 50 1,829 1,879
Dividends declared (Note 8) . . . . . . . . (24,191) (24,191)
Pensions (Note 10) . . . . . . . . . . . . (8) (8)
Translation adjustment . . . . . . . . . . (194) (194)
Treasury shares . . . . . . . . . . . . . . 5,657 (15) (537) (552)
Three-for-two stock split (Note 8) . . . . 12,607 (12,607) ---
- ----------------------------------------------------------------------------------------------------------------------------------
Balance,
December 31, 1993 . . . . . . . . . . . . 30,288,734 $37,861 $64,423 $328,684 $(1,744) $(2,177) $427,047
- ----------------------------------------------------------------------------------------------------------------------------------
Net income - 1994 . . . . . . . . . . . . . 63,511 63,511
Stock options exercised . . . . . . . . . . 36,184 42 543 585
Unearned compensation . . . . . . . . . . . 9,000 8 338 228 574
Performance shares (Note 8) . . . . . . . . 39,524 63 2,809 2,872
Dividends declared (Note 8) . . . . . . . . (26,682) (26,682)
Translation adjustment . . . . . . . . . . (5,974) (5,974)
Treasury shares . . . . . . . . . . . . . . 25,932 (1,442) (1,442)
Valuation allowance for
marketable securities, net (Note 3) . . . (1,649) (1,649)
Issuance of shares for acquisitions . . . . 115,772 170 207 377
- ----------------------------------------------------------------------------------------------------------------------------------
Balance,
December 31, 1994 . . . . . . . . . . . . 30,515,146 $38,144 $68,320 $365,513 $(3,186) $(9,572) $459,219
- ----------------------------------------------------------------------------------------------------------------------------------
*See Note 8
See accompanying Notes to Consolidated Financial Statements.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
DIEBOLD, INCORPORATED AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
1994 1993 1992
==================================================================================================================================
Cash flow from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . $63,511 $48,374 $23,205
Plus cumulative effect of change in accounting
principles . . . . . . . . . . . . . . . . . . . . . . . -- -- 17,932
- ----------------------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of change in
accounting principles . . . . . . . . . . . . . . . . . . 63,511 48,374 41,137
Adjustments to reconcile income before cumulative
effect of change in accounting principles to cash
provided by operating activities:
Minority share of income . . . . . . . . . . . . . . . . 1,948 4,239 2,484
Depreciation and amortization . . . . . . . . . . . . . . 14,240 13,606 12,502
Other charges and amortization . . . . . . . . . . . . . 16,774 11,181 12,539
Deferred income taxes . . . . . . . . . . . . . . . . . . (13,683) (2,956) (4,181)
Loss on disposal of assets, net . . . . . . . . . . . . . 1,150 2,622 1,766
Cash provided (used) by changes in certain
assets and liabilities:
Trade receivables . . . . . . . . . . . . . . . . . . . (23,851) (8,565) (2,453)
Inventories . . . . . . . . . . . . . . . . . . . . . . (10,560) 6,411 20,200
Prepaid expenses and other current assets . . . . . . . 9,094 1,174 6,395
Accounts payable . . . . . . . . . . . . . . . . . . . 16,370 14,109 (2,645)
Other certain assets and liabilities . . . . . . . . . (33,660) 4,382 (1,259)
- ----------------------------------------------------------------------------------------------------------------------------------
Total adjustments . . . . . . . . . . . . . . . . . . . . . (22,178) 46,203 45,348
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities . . . . . . . . . 41,333 94,577 86,485
Cash flow from investing activities:
Proceeds from maturities of investments . . . . . . . . . . 72,460 88,403 68,188
Proceeds from sales of investments . . . . . . . . . . . . 8,635 11,677 10,092
Payments for purchases of investments . . . . . . . . . . . (73,290) (140,032) (121,023)
Capital expenditures . . . . . . . . . . . . . . . . . . . (22,641) (18,343) (11,977)
Increase in certain other assets . . . . . . . . . . . . . (28,477) (5,070) (4,165)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,698 62 47
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities . . . . . . . . . . . (40,615) (63,303) (58,838)
Cash flow from financing activities:
Payments on long-term debt . . . . . . . . . . . . . . . . -- -- (3,000)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . (26,682) (24,191) (22,463)
Distribution of affiliate's earnings to minority interest
holder . . . . . . . . . . . . . . . . . . . . . . . . . -- (3,569) --
Issuance of Common Shares . . . . . . . . . . . . . . . . . 2,291 3,112 3,425
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,952 (2,051) (1,133)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash used by financing activities . . . . . . . . . . . (22,439) (26,699) (23,171)
- ----------------------------------------------------------------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents . . . . . . (21,721) 4,575 4,476
Cash and cash equivalents at the beginning of the year . . . 39,006 34,431 29,955
- ----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at the end of the year . . . . . . $17,285 $39,006 $34,431
==================================================================================================================================
See accompanying Notes to Consolidated Financial Statements.
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DIEBOLD, INCORPORATED AND SUBSIDIARIES
(Dollars in thousands except per share amounts)
NOTE 1: SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Registrant and its subsidiaries. All significant inter-company accounts and transactions have been eliminated.
STATEMENTS OF CASH FLOWS
For the purposes of the Consolidated Statements of Cash Flows, the Registrant considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Cash paid during 1994, 1993 and 1992 for income taxes amounted to $37,488, $30,134 and $16,898, respectively.
FOREIGN OPERATIONS
The Registrant translates the assets and liabilities of its foreign subsidiaries at the exchange rates in effect at year-end and the results of operations at the average rate throughout the year. The translation adjustments are recorded directly as a separate component of shareholders' equity, while transaction gains (losses) are included in net income. The Registrant does not have any investment-type transactions or any unperformed forward exchange contracts.
Sales to customers in foreign countries approximated 19.8 percent, 17.6 percent and 18.2 percent of net sales in 1994, 1993 and 1992, respectively. The investment used to generate this sales volume is considered immaterial by management.
TRADE RECEIVABLES AND SALES
Revenue, after provision for installation, is generally recognized based on the terms of the contracts which, for product sales, is usually when material to be installed for customer orders is shipped from the plants.
The equipment that is sold is usually shipped and installed within one year. Installation that extends beyond one year is ordinarily attributable to causes not under the control of the Registrant.
The concentration of credit risk in the Registrant's trade receivables with respect to the banking and financial services industries is substantially mitigated by the Registrant's credit evaluation process, reasonably short collection terms and the geographical dispersion of sales transactions from a large number of individual customers. The Registrant maintains allowances for potential credit losses, and such losses have been minimal and within management's expectations.
INVENTORIES
Inventories are valued principally at the lower of cost or market applied on a first-in, first-out basis. Cost is determined on the basis of actual cost.
SECURITIES AND OTHER INVESTMENTS
Effective January 1, 1994, the Registrant adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities," which requires that investments in debt and marketable equity securities be designated as held-to-maturity, trading or available-for-sale.
Held-to-maturity securities are stated at cost and no adjustment is made in the financial statements for unrealized holding gains and losses.
Trading securities are stated at fair value and unrealized holding gains and losses are included in income.
Securities that are not classified as held-to-maturity or trading are classified as available-for-sale and are carried at fair value with the unrealized holding gains and losses, net of tax, reported as a separate component of shareholders' equity.
There is no cumulative effect resulting from the adoption of Statement 115.
Prior to 1994, the Registrant followed Statement of Financial Accounting Standards No. 12, "Accounting for Certain Marketable Securities."
DEPRECIATION AND AMORTIZATION
Depreciation of property, plant and equipment is computed using the straight-line method for financial statement purposes. Accelerated methods of depreciation are used for federal income tax purposes. Amortization of leasehold improvements is based upon the shorter of original terms of the lease or life of the improvement.
RESEARCH AND DEVELOPMENT
Total research and development costs charged to expense were $34,476, $25,493 and $24,452 in 1994, 1993 and 1992, respectively.
OTHER ASSETS
Purchased contracts, deferred charges and certain other assets are stated at cost and are amortized ratably over a period of three to 25 years.
DEFERRED INCOME
Deferred income is recognized for customer billings in advance of the period in which the service will be performed and is recognized in income on a straight-line basis over the contract period.
TAXES ON INCOME
Effective January 1, 1992, the Registrant adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." There was no cumulative effect on the consolidated income statement resulting from the adoption of Statement 109.
RECLASSIFICATIONS
The Registrant has reclassified the presentation of certain prior-year information to conform with the current presentation format.
NOTE 2: RELATED PARTY TRANSACTIONS
INTERBOLD JOINT VENTURE
The consolidated financial statements include the accounts of InterBold, a joint venture between the Registrant and IBM, of which the Registrant owns 70 percent. The joint venture provides ATMs and other financial self-service systems worldwide. IBM's ownership interest in InterBold is reflected in "minority interest" on the Registrant's Consolidated Balance Sheets. Net profits of InterBold are allocated based upon a formula as specified in the partnership agreement.
InterBold provides ATM and other financial self-service systems marketing and sales support for IBM's international sales and marketing organization, and the Registrant's U.S. sales and marketing organization, both of which sell and distribute InterBold products.
All research, development and engineering activities for the Registrant for self-service financial systems are the responsibility of the joint venture.
NOTE 3: FINANCIAL INSTRUMENTS
Effective January 1, 1994, the Registrant adopted the provisions of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities," which requires certain investments in marketable debt and equity securities to be classified as either trading, held-to-maturity or available-for-sale. At December 31, 1993, the Registrant's investment portfolio was stated at the lower of cost or market. At December 31, 1994, the investment portfolio was classified as available-for-sale due to the potential needs for liquidity to fund future acquisitions, joint ventures and strategic alliances throughout the world as part of a continuing strategy to strengthen the Registrant's international competitiveness. At December 31, 1994, the marketable debt and equity securities are stated at fair value and net unrealized holding losses of $1,649, net of tax, are included as a separate component of shareholders' equity until realized. The fair value of securities and other investments is estimated based on quoted market prices.
The Registrant's financial instruments, excluding insurance contracts at December 31, are summarized as follows:
Amortized Fair
Cost Basis Value
- -----------------------------------------------------------------
1994:
============================================================
Short-term investments:
Tax-exempt municipal bonds $ 29,337 $ 29,426
Certificates of deposit . 8,974 8,974
- -----------------------------------------------------------------
$ 38,311 $ 38,400
- -----------------------------------------------------------------
Securities and other investments:
Tax-exempt municipal bonds $132,277 $129,743
Equity securities . . . 22,670 22,670
- -----------------------------------------------------------------
$154,947 $152,413
- -----------------------------------------------------------------
1993:
============================================================
Short-term investments:
Tax-exempt municipal bonds $ 23,655 $ 24,226
Certificates of deposit . 9,252 9,252
- -----------------------------------------------------------------
$ 32,907 $ 33,478
- -----------------------------------------------------------------
Securities and other investments:
Tax-exempt municipal bonds $156,715 $160,532
Equity securities . . . 22,378 22,927
- -----------------------------------------------------------------
$179,093 $183,459
- -----------------------------------------------------------------
The contractual maturities of the tax-exempt municipal bonds at December 31,
1994, are as follows:
Amortized Fair
Cost Basis Value
=================================================================
Due within one year . . . . $ 29,337 $ 29,426
Due after one year
through five years . . . . 124,462 122,394
Due after five years
through 10 years . . . . 7,815 7,349
- -----------------------------------------------------------------
$161,614 $159,169
- -----------------------------------------------------------------
NOTE 4: INVENTORIES
Major classes of inventories at December 31 are summarized as follows:
1994 1993
=================================================================
Finished goods and
service parts . . . . $20,786 $27,507
Work in process . . . . 64,617 47,284
Raw materials . . . . . 140 192
- -----------------------------------------------------------------
$85,543 $74,983
- -----------------------------------------------------------------
NOTE 5: PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at December 31, together with annual depreciation
and amortization rates, consisted of the following:
Annual
1994 1993 Rates
=================================================================
Land and land
improvements . . $ 3,907 $ 4,248 5-20%
Buildings . . . . . 30,786 32,947 2-20%
Machinery, equipment
and rotatable
spares . . . . . 109,203 101,824 5-40%
Leasehold
improvements . . 2,013 1,815 Lease
Construction in . . Term
progress . . . . 6,405 5,566
- -----------------------------------------------------------------
$152,314 $146,400
- -----------------------------------------------------------------
|
NOTE 6: OTHER ASSETS
Included in other assets are net lease receivables and prepaid pension costs which are the excess of plan contributions over net periodic pension costs. Also, included in other assets were certain assets acquired in relation to new businesses.
NOTE 7: SHORT-TERM FINANCING
At December 31, 1994, bank credit lines approximated $40,000 with various banks for short-term financing. There were no short-term borrowings under these agreements at any time during 1994 and 1993.
The Registrant has informal understandings with certain of the banks to maintain compensating balances which are not legally restricted as to withdrawal. The lines of credit can be withdrawn at each bank's option.
NOTE 8: SHAREHOLDERS' EQUITY
On February 1, 1994, the Board of Directors declared a three-for-two stock
split effected in the form of a stock dividend, distributed on February 22,
1994, to shareholders of record on February 10, 1994. Accordingly, all numbers
of Common Shares, except authorized shares and treasury shares, and all per
share data have been restated to reflect this stock split in addition to the
three-for-two stock split declared on January 27, 1993, distributed on February
26, 1993, to shareholders of record on February 10, 1993.
On the basis of amounts declared and paid, the annualized quarterly
dividends per share were $0.88 in 1994, $0.80 in 1993 and $0.75 in 1992.
Under the 1991 Equity and Performance Incentive Plan (1991 Plan), Common
Shares are available for grant of options at a price not less than 85 percent
of the fair market value of the Common Shares on the date of grant. Options
are exercisable in cumulative annual installments over five years, beginning
one year from the date of grant. The number of Common Shares that may be
issued or delivered pursuant to the 1991 Plan is 1,451,250, of which 1,170,901
shares were available for issuance at December 31, 1994. The 1991 Plan will
expire on April 2, 2002.
The 1991 Plan replaced the Amended and Extended 1972 Stock Option Plan (1972
Plan), which expired by its terms on April 2, 1992. Awards already outstanding
under the 1972 Plan are unaffected by the adoption of the 1991 Plan.
The following is a summary with respect to options for both plans during
1994:
Shares Option
Under Price Per
Option Share
=================================================================
Balance,
January 1, 1994 ......... 392,655 $14-34
Options granted ............ 86,900 38-39
Options exercised ......... (36,184) 13-29
Options expired
or terminated ............. (542) 14
- -----------------------------------------------------------------
Balance,
December 31, 1994 .... 442,829 $13-39
- -----------------------------------------------------------------
|
At December 31, 1994, there were 82,506 and 79,057 shares subject to options
issued under the 1991 Plan and the 1972 Plan, respectively, that were
exercisable.
The 1991 Plan also provides for the issuance of restricted shares without
cost to certain employee associates. Outstanding awards granted at December
31, 1994, for both plans totaled 162,000 restricted shares. The shares are
subject to forfeiture under certain circumstances. Unearned compensation
representing the fair market value of the shares at the date of grant will be
charged to income over the three-to-five-year vesting period.
The 1991 Plan also provides for the issuance of Common Shares based on
certain management objectives achieved within a specified performance period of
at least one year as determined by the Board of Directors. The management
objectives set in 1994 are based on a three-year performance period ending
December 31, 1996. The management objectives for the period ended December 31,
1994, were set in April 1992. The objectives were exceeded and shares were
issued in 1995.
In February 1989, the Board of Directors declared a dividend distribution of
one right for each outstanding Common Share of the Registrant. Pursuant to the
Rights Agreement covering the Shareholder Rights Plan, each right entitles the
registered holder to purchase one one-hundredth of a share of Cumulative
Redeemable Serial Preferred Shares, without par value, at a price of $130. The
rights become exercisable 20 days after a person or group acquires 20 percent
or more of the Registrant's shares. At that time, rights certificates would be
issued and could be traded independently from the Registrant's shares. If the
Registrant is involved in certain mergers or other business combination
transactions at any time after the rights become exercisable, then the rights
will be modified so as to entitle the holder to buy a number of an acquiring
company's shares having a market value of twice the exercise price of each
right. In addition, if a holder of 20 percent or more acquires the Registrant
by means of a reverse merger in which the Registrant and its shares survive, or
engages in certain other self-dealing transactions with the Registrant, each
right not owned by the acquirer will become exercisable for a number of Common
Shares of the Registrant with a market value of two times the exercise price of
the right. The rights are redeemable for $0.01 per right at any time before 20
percent or more of the Registrant's shares have been acquired, and will expire
on February 10, 1999, unless redeemed earlier by the Registrant. As a result
of the stock split effected on February 22, 1994, each Common Share is
currently accompanied by four-ninths of a right.
NOTE 9: INCOME PER SHARE
The income per share computations are based upon the weighted average number of
Common Shares outstanding during each year. The inclusion in the computation
of incremental shares applicable to
outstanding stock options and performance shares would have no material effect.
NOTE 10: PENSION PLANS AND
POSTRETIREMENT BENEFITS
The Registrant has several pension plans covering substantially all employee
associates. Plans covering salaried employee associates provide pension
benefits that are based on the employee associate's compensation during the 10
years before retirement. The Registrant's funding policy for those plans is to
contribute annually at an actuarially determined rate. Plans covering hourly
employee associates and union members generally provide benefits of stated
amounts for each year of service. The Registrant's funding policy for those
plans is to make at least the minimum annual contributions required by
applicable regulations.
Approximately 90 percent of the plan assets at December 31, 1994, were
invested in listed stocks and investment grade bonds.
A summary of the components of net periodic pension costs follows:
1994 1993 1992
=================================================================
Benefit earned
during the year . $5,384 $ 4,731 $ 4,326
Interest accrued on
projected benefit
obligation . . . 10,327 9,783 9,247
Actual return on
assets . . . . . (14,209) (16,970) (12,761)
Net amortization and
deferral . . . . (483) 3,030 (2,050)
- -----------------------------------------------------------------
Net periodic pension
costs . . . . . . $1,019 $ 574 $ (1,238)
- -----------------------------------------------------------------
|
Assumptions used to measure the projected benefit obligation at December 31,
and the expected long-term rate of return on assets are as follows:
1994 1993 1992
=================================================================
Discount rate . . . 7.25% 7.25% 8%
Expected long-term
rate of return
on assets . . . . 9% 9% 9%
Rate of increase
in compensation
levels . . . . . 5.5% 5.5% 6%
- -----------------------------------------------------------------
|
Minimum liabilities have been recorded in 1994, 1993 and 1992 for the plans
whose total accumulated benefit obligation exceeded the fair value of the
plan's assets.
The Registrant offers an employee associate 401(k) Savings Plan (Savings
Plan) to encourage eligible employee associates to save on a regular basis, by
payroll deductions, and to provide them with an opportunity to become
shareholders of the Registrant. Under the Savings Plan in 1994, the Registrant
matched 80 percent of a participating employee associate's first 4 percent of
earnings and 40 percent of a participating employee associate's second 4
percent of earnings.
The following table sets forth the funded status and amounts recognized in
the Consolidated Balance Sheets at December 31, for the Registrant's defined
benefit pension plans:
1994 1993
==================================================================================================================================
Assets in Accumulated Assets in Accumulated
excess of benefits in excess of benefits in
accumulated excess of accumulated excess of
benefits assets benefits assets
==================================================================================================================================
Fair value of plan assets . . . . . . . . . . . $154,068 $ 12,143 $163,346 $ 14,675
Less:
Actuarial present value of projected
benefit obligation:
Vested employee associates . . . . . . . . 93,851 23,691 87,722 20,463
Nonvested employee associates . . . . . . . 5,919 637 5,351 1,750
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated benefit obligation . . . . . . 99,770 24,328 93,073 22,213
Amounts related to future
salary increases . . . . . . . . . . . . 24,325 1,328 22,488 987
- ----------------------------------------------------------------------------------------------------------------------------------
Total projected benefit obligation . . . . . . 124,095 25,656 115,561 23,200
- ----------------------------------------------------------------------------------------------------------------------------------
Plan assets less projected benefits . . . . . . 29,973 (13,513) 47,785 (8,525)
Unrecognized prior service cost, net . . . . 6,888 3,141 8,661 2,020
Unamortized net transition (asset)
obligation . . . . . . . . . . . . . . . . (15,951) 359 (17,495) 419
Unrecognized net (gain) loss . . . . . . . . 534 2,858 (18,240) 591
Adjustment required to recognize
minimum liability . . . . . . . . . . . . . --- (5,030) --- (2,043)
- ----------------------------------------------------------------------------------------------------------------------------------
Prepaid pension costs (accrued obligations) . $ 21,444 $(12,185) $ 20,711 $ (7,538)
==================================================================================================================================
|
In addition to providing pension benefits, the Registrant provides certain healthcare and life insurance benefits for retired employee associates. Eligible employee associates may be entitled to these benefits based upon years of service with the Registrant, age at retirement and collective bargaining agreements.
Effective January 1, 1992, the Registrant adopted the provisions of Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions." Under Statement 106, the Registrant records such postretirement benefit costs during the periods in which employee associates provide services for such benefits. The Registrant elected immediate recognition of the transition charge associated with adopting Statement 106 by recording a one-time charge of $17,932, net of $10,990 in income taxes, as a cumulative effect of change in accounting principle.
The transition obligation represented accumulated postretirement benefits associated with service rendered prior to January 1, 1992, by eligible current and former employee associates. Presently, the Registrant has made no commitments to increase these benefits for existing retirees or for employee associates who may become eligible for these benefits in the future. Currently there are no plan assets and the Registrant funds the benefits as the claims are paid.
A summary of the components of net periodic postretirement benefit costs
follows:
1994 1993 1992
==========================================================
Interest cost . . . . . $1,925 $1,930 $1,767
Service cost . . . . . 59 42 32
Amortization . . . . . 93 --- ---
- ----------------------------------------------------------
Net periodic postretirement
benefit cost . . . . . $2,077 $1,972 $1,799
- ----------------------------------------------------------
|
The effect of a one percentage point annual increase in the assumed healthcare cost trend rate would increase the service and interest cost components of the healthcare benefits from $1,783 to $1,942, an 8.9 percent increase.
Measurement of the accumulated postretirement benefit obligation at December 31, was based on a discount rate of 7.25 percent in 1994 and 1993.
The following table sets forth the components of the accumulated
postretirement benefit obligation at December 31:
1994 1993
============================================================
Retirees . . . . . . . $26,056 $25,112
Fully eligible active
plan participants . 329 764
Other active
plan participants 1,060 943
- -------------------------------------------------------------
Accumulated postretirement
benefit obligation . 27,445 26,819
Unrecognized net loss . (3,595) (3,341)
- -------------------------------------------------------------
Accrued postretirement
benefit obligation . $23,850 $23,478
- -------------------------------------------------------------
|
Under the provisions of Statement 106, the postretirement benefit obligation was determined by application of the terms of medical and life insurance plans together with relevant actuarial assumptions and healthcare cost trend rates projected at annual rates declining from 13.2 percent in 1994 to 5.3 percent through the year 2026. The effect of a one percentage point annual increase in these assumed healthcare cost trend rates would increase the healthcare accumulated postretirement benefit obligation from $25,121 to $27,426, a 9.2 percent increase.
NOTE 11: LEASES
The Registrant's future minimum lease payments due under operating leases for
real and personal property in effect at December 31, 1994, were as follows:
Vehicles
Real and
Expiring Total Estate Equipment
=================================================================
1995 ........... $15,044 $ 3,595 $11,449
1996 ........... 12,047 2,409 9,638
1997 ........... 8,880 1,911 6,969
1998 ........... 4,010 1,612 2,398
1999 ........... 1,231 1,177 54
Thereafter .... 1,847 1,847 --
- -----------------------------------------------------------------
$43,059 $12,551 $30,508
- -----------------------------------------------------------------
|
Rental expense for 1994, 1993 and 1992 under all lease agreements amounted to approximately $18,100, $16,500 and $15,900, respectively.
NOTE 12: TAXES ON INCOME
The provision for taxes on income consisted of the following:
1994 1993 1992
=================================================================
Federal and foreign
Current . . . . . $39,115 $24,024 $16,460
Deferred . . . . (12,795) (4,619) (4,181)
- -----------------------------------------------------------------
26,320 19,405 12,279
State and local . 4,147 2,736 1,420
- -----------------------------------------------------------------
$30,467 $22,141 $13,699
- -----------------------------------------------------------------
|
Deferred income tax (benefit) expense resulted from the following:
1994 1993 1992
=================================================================
Depreciation . . . $ (3,583) $ 187 $ (271)
Interest . . . . . (1,748) --- (1,698)
Inventory . . . . . (2,855) (2,216) (1,753)
Accrued expense . . (3,300) (1,768) (1,303)
Other . . . . . . . (1,309) (822) 844
- -----------------------------------------------------------------
$(12,795) $(4,619) $(4,181)
- -----------------------------------------------------------------
|
In addition to the 1994 income tax expense of $30,467, certain deferred income
tax benefits of $888 were allocated directly to shareholders' equity.
A reconciliation of the difference between the U.S. statutory tax rate and the
effective tax rate is shown below:
1994 1993 1992
================================================================
Statutory tax rate . . 35.0% 35.0% 34.0%
State and local income
taxes, net of federal tax
benefit . . . . . . . 2.9 2.5 1.7
Exempt income . . . . . (3.9) (5.0) (5.3)
Tax court settlement --- --- (3.4)
Insurance contracts (4.3) (3.7) (2.3)
Other . . . . . . . 2.7 2.6 0.3
- ----------------------------------------------------------------
Effective tax rate 32.4% 31.4% 25.0%
- ----------------------------------------------------------------
|
Significant components of the Registrant's deferred tax assets and liabilities
are as follows:
1994 1993
================================================================
Accrued expense . . . . . $ (6,677) $ (3,519)
Pension plans . . . . . . 6,949 6,964
Depreciation . . . . . . 1,383 4,953
Accrued insurance . . . . (5,337) (4,981)
Other amortization . . . 2,579 1,787
Interest . . . . . . . . --- 1,748
Inventory . . . . . . . . (5,190) (2,335)
Deferred income . . . . . (7,490) (8,182)
Postretirement benefits . (9,908) (9,781)
Partnership income . . . (2,464) (1,631)
Other . . . . . . . . . . (3,459) (954)
- ----------------------------------------------------------------
$(29,614) $(15,931)
- ----------------------------------------------------------------
|
Deferred tax assets amounted to $46,308 and $37,706 and deferred tax liabilities amounted to $16,694 and $21,775 at December 31, 1994, and 1993, respectively. No valuation allowance was required for the deferred tax assets.
In 1990, the Registrant filed petitions with the United States Tax Court to protest the Internal Revenue Service's (IRS) proposed deficiencies for the years 1978 through 1982. The IRS disagreed with the Registrant's position that rotatable spare parts (used in the servicing of customer equipment) were fixed assets subject to depreciation and eligible for the Investment Tax Credit (ITC). It is the IRS's position that rotatable spare parts are not entitled to depreciation or ITC and should be accounted for as inventory, for tax purposes, and deducted only when sold or abandoned.
On December 11, 1992, the United States Tax Court entered its decision based on a resolution agreed upon by the IRS and the Registrant regarding the petitions the Registrant had filed to contest the proposed deficiencies for the years 1978 through 1982. In addition, on January 11, 1993, the Registrant and the IRS signed a closing agreement under Section 7121 of the Internal Revenue Code. This agreement applies to the years 1983 through 1990.
As a result of the Tax Court decision and the settlement reached with the IRS, the Registrant will account for its rotatable spare parts as inventory for tax purposes. Under this method of accounting, for tax purposes the value of the rotatable spare parts used to service customer equipment will be deducted as sold or abandoned.
The amounts the Registrant had reserved for the
years in question exceeded the total tax and related accrued interest payable to the IRS for the years noted above. The resolution of this tax case did not have a material impact upon the financial position of the Registrant.
NOTE 13: COMMITMENTS AND
CONTINGENCIES
At December 31, 1994, the Registrant was a party to several lawsuits that were incurred in the normal course of business, none of which individually or in the aggregate is considered material in relation to the Registrant's financial position or results of operations.
NOTE 14: SEGMENT INFORMATION
The Registrant operates predominantly in one industry segment, financial systems and equipment. This industry segment accounts for more than 90 percent of the consolidated revenues, operating profit and identifiable assets.
NOTE 15: QUARTERLY FINANCIAL
INFORMATION (UNAUDITED)
See "Comparison of Selected Quarterly Financial Data (Unaudited)" on page 28 of this Annual Report on Form 10-K.
COMPARISON OF SELECTED QUARTERLY FINANCIAL DATA
(UNAUDITED)
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
(Dollars in thousands 1994 1993 1994 1993 1994 1993 1994 1993
except per share amounts)
==================================================================================================================================
Net sales ............... $176,764 $134,463 $188,081 $150,147 $188,199 $162,280 $207,127 $176,387
Gross profit ........... 57,485 43,843 63,350 49,407 63,941 54,156 70,906 62,632
Net income .......... 12,711 8,624 16,168 11,798 16,711 12,711 17,921 15,241
Net income
per share .......... 0.42 0.29 0.53 0.39 0.55 0.42 0.59 0.50
==================================================================================================================================
See Notes to Consolidated Financial Statements and 11-Year Summary 1994-1984.
|
REPORT OF MANAGEMENT
The management of Registrant is responsible for
the contents of the consolidated financial
statements, which are prepared in conformity with
generally accepted accounting principles. The
consolidated financial statements necessarily
include amounts based on judgments and estimates.
Financial information elsewhere in the Form 10-K
is consistent with that in the consolidated
financial statements.
The Registrant maintains a comprehensive
accounting system which includes controls designed
to provide reasonable assurance as to the
integrity and reliability of the financial records
and the protection of assets. An internal audit
staff is employed to regularly test and evaluate
both internal accounting controls and operating
procedures, including compliance with the
Registrant's statement of policy regarding ethical
and lawful conduct. The role of KPMG Peat Marwick
LLP, the independent auditors, is to provide an
objective review of the consolidated financial
statements and the underlying transactions in
accordance with generally accepted auditing
standards. The report of KPMG Peat Marwick LLP
accompanies the consolidated financial statements.
The Audit Committee of the Board of Directors,
composed of directors who are not members of
management, meets regularly and separately with
management, the independent auditors and the
internal auditors to ensure that their respective
responsibilities are properly discharged. KPMG
Peat Marwick LLP and the Director of Internal
Audit have full and free access to the Audit
Committee.
Gerald F. Morris
Executive Vice President and Chief Financial
Officer
5-YEAR SUMMARY 1994-1990
DIEBOLD, INCORPORATED AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(In thousands except per share amounts and ratios)
1994 1993 1992 1991 1990
==================================================================================================================================
OPERATING RESULTS
Net sales .........................................................$760,171 $623,277 $543,852 $506,217 $476,054
Cost of sales ......................................................504,489 413,239 358,031 331,576 333,612
Gross profit .......................................................255,682 210,038 185,821 174,641 142,442
Selling and administrative expense ......................... 128,309 106,110 96,100 95,353 89,966
Research, development and engineering expense ...... 36,599 34,838 35,920 34,988 20,289
Operating profit ....................................................90,774 69,090 53,801 44,300 32,187
Other income, net ................................................ 5,152 5,664 3,519 7,209 7,626
Minority interest ...................................................(1,948) (4,239) (2,484) (2,343) (2,335)
Income before taxes and cumulative effect .............. 93,978 70,515 54,836 49,166 37,478
Taxes on income .................................................. 30,467 22,141 13,699 13,421 10,367
Net income (Note A) ............................................. 63,511 48,374 23,205 35,745 27,111
Income per share before cumulative effect (Note B) .. 2.09 1.60 1.37 1.20 0.91
Net income per share (Note A and Note B) ............... 2.09 1.60 0.77 1.20 0.91
- -----------------------------------------------------------------------------------------------------------------------------------
DIVIDEND AND COMMON SHARE DATA
Average shares outstanding (Note B) ...................... 30,330 30,231 30,075 29,839 29,756
Common dividends paid ........................................ $ 26,682 $ 24,191 $ 22,463 $ 21,221 $ 19,837
Common dividends paid per share (Note B) .............. 0.88 0.80 0.75 0.71 0.67
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR-END FINANCIAL POSITION
Current assets ....................................................$326,089 $311,500 $290,729 $319,984 $312,036
Current liabilities ................................................155,464 138,571 117,612 115,779 116,022
Net working capital .............................................. 170,625 172,929 173,117 204,205 196,014
Property, plant and equipment, net ......................... 64,713 60,660 60,601 58,449 64,613
Total assets .......................................................661,883 609,019 558,914 535,593 519,932
Long-term debt, less current maturities ................... --- --- --- 2,000 3,250
Shareholders' equity ............................................. 459,219 427,047 399,674 396,908 378,128
Shareholders' equity per share (Note C) .................. 15.08 14.11 13.28 13.25 12.70
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS
Pretax profit on sales (%) ...................................... 12.4% 11.3% 10.1% 9.7% 7.9%
Current ratio .....................................................2.1 to 1 2.3 to 1 2.5 to 1 2.8 to 1 2.7 to 1
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER DATA
Capital expenditures ............................................. $ 22,641 $ 18,343 $ 11,977 $ 9,100 $ 22,209
Depreciation and amortization ................................ 14,240 13,606 12,502 12,808 12,564
===================================================================================================================================
Note A -- 1992 amounts include a one-time charge of $17,932 ($0.60 per share) resulting from the adoption of Statement 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions."
Note B -- After adjustment for stock splits.
Note C -- Based on shares outstanding at year-end adjusted for stock splits.
|
There have been no changes in accountants or disagreements with accountants on accounting and financial disclosures.
PART III.
Information with respect to directors of the Registrant is included on pages 3 through 9 of the Registrant's proxy statement for the 1995 Annual Meeting of Shareholders ("1995 Annual Meeting") and is incorporated herein by reference. Refer to pages 6 through 9 of this Form 10-K for information with respect to executive officers.
Information with respect to executive compensation is included on pages 9 through 20 of the Registrant's proxy statement for the 1995 Annual Meeting and is incorporated herein by reference.
Information with respect to security ownership of certain beneficial owners and management is included on pages 1 through 7 of the Registrant's proxy statement for the 1995 Annual Meeting and is incorporated herein by reference.
The information with respect to certain relationships and related transactions set forth under the caption "Compensation Committee Interlocks and Insider Participation" on page 9 of the Registrant's proxy statement for the 1995 Annual Meeting is incorporated herein by reference.
PART IV.
(a) Documents filed as a part of this report.
1. The following additional information for the years 1994, 1993 and 1992 is submitted herewith:
Independent Auditors' Report on Financial Statements and Financial Statement Schedule
SCHEDULE VIII. Valuation and Qualifying Accounts
All other schedules are omitted, as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K.
- -------- ---------------------------------------------------------------
(continued)
2. Exhibits
3.1 (i) Amended and Restated Articles of Incorporation of
Diebold, Incorporated.
3.1 (ii) Code of Regulations -- incorporated by reference to
Exhibit 4(c) to Registrant's Post-Effective Amendment No.
1 to Form S-8 Registration Statement No. 33-32960.
3.2 Certificate of Amendment by Shareholders to Amended
Articles of Incorporation of Diebold, Incorporated --
incorporated by reference to Exhibit 3.1 to Registrant's
Annual Report on Form 10-K for the year ended December
31, 1992.
4. Rights Agreement dated as of February 10, 1989 between
Diebold, Incorporated and Ameritrust Company National
Association -- incorporated by reference to Exhibit 2.1
to Registrant's Registration Statement on Form 8-A dated
February 10, 1989.
* 10.1 Form of Employment Agreement as amended and restated as
of September 13, 1990 -- incorporated by reference to
Exhibit 10.1 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1990.
* 10.2 Schedule of Certain Officers who are Parties to
Employment Agreements in the form of Exhibit 10.1. --
incorporated by reference to Exhibit 10.2 to Registrant's
Annual Report on Form 10-K for the year ended December
31, 1992.
* 10.3 Supplemental Pension Agreement with Raymond Koontz.
* 10.4 Supplemental Retirement Benefit Agreement with Robert W.
Mahoney.
* 10.5 Supplemental Employee Retirement Plan (as amended January
1, 1994).
10.6 Amended and Restated Partnership Agreement dated as of
September 12, 1990 -- incorporated by reference to
Exhibit 10 to Registrant's Form 8-K dated September 26,
1990.
* 10.7 1985 Deferred Compensation Plan for Directors of Diebold,
Incorporated -- incorporated by reference to Exhibit 10.7
to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992.
* 10.8 1991 Equity and Performance Incentive Plan --
incorporated by reference to Exhibit 4(a) to Registrant's
Form S-8 Registration Statement No. 33-39988.
|
* Reflects management contract or other compensatory arrangement required to be filed as an exhibit pursuant to Item 14(c) of this report.
* 10.9 Long-Term Executive Incentive Plan -- incorporated by reference to Exhibit 10.9 of Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.
* 10.10 1992 Deferred Incentive Compensation Plan (as amended and restated as of July 1, 1993) -- incorporated by reference to Exhibit 10.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.
* 10.11 Annual Incentive Plan -- incorporated by reference to Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992.
* 10.12 Employment Agreement with Robert P. Barone -- incorporated by reference to Exhibit 10.12 to Registrant's Form 10-Q for the quarter ended September 30, 1994.
21. Subsidiaries of the Registrant.
23. Consent of Independent Auditors.
24. Power of Attorney.
27. Financial Data Schedule.
* Reflects management contract or other compensatory arrangement required to be filed as an exhibit pursuant to Item 14(c) of this report.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the fourth quarter of 1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DIEBOLD, INCORPORATED
March 9, 1995 By: /s/Robert W. Mahoney
- ------------- -----------------------
Date Robert W. Mahoney
Chairman, President and
Chief Executive Officer
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/Robert W. Mahoney Chairman, President and March 9, 1995
- -------------------- Chief Executive Officer ---------------
Robert W. Mahoney and Director
(Principal Executive Officer)
/s/Gerald F. Morris Executive Vice President March 9, 1995
- -------------------- and Chief Financial Officer ---------------
Gerald F. Morris (Principal Accounting and
Financial Officer)
/s/Louis V. Bockius III Director March 9, 1995
- -------------------- ---------------
Louis V. Bockius III
/s/Daniel T. Carroll Director March 9, 1995
- -------------------- ---------------
Daniel T. Carroll
/s/Donald R. Gant* Director March 9, 1995
- -------------------- ---------------
Donald R. Gant
/s/L. Lindsey Halstead Director March 9, 1995
- -------------------- ---------------
L. Lindsey Halstead
/s/Raymond Koontz* Director March 9, 1995
- -------------------- ---------------
Raymond Koontz
34
|
Signature Title Date
--------- ----- ----
/s/John N. Lauer* Director March 9, 1995
- -----------------
John N. Lauer
/s/William F. Massy* Director March 9, 1995
- --------------------
William F. Massy
/s/W. R. Timken, Jr. Director March 9, 1995
- --------------------
W. R. Timken, Jr.
Dated: March 9, 1995 *By: /s/Gerald F. Morris
--------------- -----------------------------------
Gerald F. Morris, for himself and
as attorney-in-fact for each of the
other persons indicated.
|
The Board of Directors
Diebold, Incorporated
We have audited the accompanying consolidated balance sheets of Diebold, Incorporated and Subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of income, shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 1994. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule as listed in Item 14 (a)(1) of Form 10-K of Diebold, Incorporated for each of the years in the three-year period ended December 31, 1994. These consolidated financial statements and financial statement schedule are the responsibility of the Registrant's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Diebold, Incorporated and Subsidiaries as of December 31, 1994 and 1993, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1994, in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
As discussed in Notes 1 and 10 to the consolidated financial statements, the Registrant adopted the provisions of the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," and Statement of Financial Accounting Standards No. 106, "Employers Accounting for Postretirement Benefits Other Than Pensions," in 1992.
/s/KPMG Peat Marwick LLP KPMG PEAT MARWICK LLP Cleveland, Ohio January 18, 1995 |
DIEBOLD, INCORPORATED AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
Balance at Balance
beginning at end
of period Additions Deductions of period
---------- ----------- ---------- --------------
Year ended December 31, 1994
- ----------------------------
Allowance for doubtful accounts $1,082,506 $3,000,000 $28,642 $4,053,864
Year ended December 31, 1993
- ----------------------------
Allowance for doubtful accounts $1,032,322 $300,000 $249,816 $1,082,506
Year ended December 31, 1992
- ----------------------------
Allowance for doubtful accounts $1,967,456 $250,000 $1,185,134 $1,032,322
|
EXHIBIT INDEX
-------------
EXHIBIT NO. DOCUMENT DESCRIPTION PAGE NO.
----------- -------------------- --------
3.1 (i) Amended and Restated Articles of 39
Incorporation of Diebold, Incorporated
10.3 Supplemental Pension Agreement 40
with Raymond Koontz
10.4 Supplemental Retirement Benefit Agreement 41
with Robert W. Mahoney
10.5 Supplemental Employee Retirement Plan 42
(as amended January 1, 1994)
21 Subsidiaries of the Registrant 43
23 Consent of Independent Auditors 44
24 Power of Attorney 45
27 Financial Data Schedule 46
|
EXHIBIT 3.1 (I)
CERTIFICATE
OF
AMENDED ARTICLES OF INCORPORATION
OF
DIEBOLD, INCORPORATED
Robert W. Mahoney, Chairman of the Board and Chief Executive Officer, and Charee Francis-Vogelsang, Secretary of Diebold, Incorporated, an Ohio Corporation, do hereby certify that at a meeting of the Board of Directors of said Corporation duly called and held on February 10, 1989, at which a quorum was present, the following resolution to adopt Amended and Restated Articles of Incorporation to consolidate the existing Amended Articles of Incorporation and all previously adopted amendments thereto was duly adopted by the directors acting pursuant to the provisions of Section 1701.72 of the Ohio Revised Code:
RESOLVED, That the Chairman of the Board, the President or any Vice President and the Secretary or any Assistant Secretary of the Corporation be, and each of them hereby is, authorized, in the name and on behalf of the Corporation, to execute and file with the Secretary of State of Ohio a revision of the Amended Articles of Incorporation as follows:
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
DIEBOLD, INCORPORATED
FIRST: The name of the Corporation is Diebold, Incorporated.
SECOND: The place in the State of Ohio where its principal office is located is the City of Canton, in Stark County.
THIRD: The purpose or purposes of the Corporation are as follows, to-wit: to carry on a general manufacturing business, including, but not limited to, the manufacture, sale, erection, disposal of and dealing in and with all kinds of safes, locks, vaults, office equipment and systems, burglar-resisting, fire-resisting and protective materials, equipment and devices, structural materials, metal houses and all manner of steel and other metal products; to carry on any of said kinds of business, or any other, either as a manufacturer or as a wholesale or retail dealer; to acquire, by purchase, lease or in any other manner, and to construct, equip, maintain, use and operate stores, storehouses, offices, shops, factories or other works or places of business, or any property, real or personal, necessary or convenient for any purpose or business of the Corporation, and freely to dispose of any thereof in any lawful manner; to apply for, acquire, register, adopt, own, hold, control and operate under, and to sell, grant or assign, or grant, lease or assign licenses or rights under, any patents, patent rights, licenses, shop rights, trademarks, trade names, copyrights, formulas, or any other rights of like nature, in connection with or for the purposes of any business of the Corporation; to acquire, hold and freely dispose of, or otherwise use or deal with, shares or securities of other corporations; to make payment for any property, real or personal, or any estates or interests, therein, acquired in any manner, either with cash or with shares, bonds, or other securities of this Corporation, or with other property, or with any or all thereof; to render financial assistance to any other corporation in which this Corporation is interested, or which is interested in this Corporation, and in connection therewith, to any extent not expressly prohibited by law to guarantee or become surety or indemnitor for or of the performance or payment of any obligation or undertaking or the discharge of any liability of any such affiliated corporation; to act as agent, factor, jobber or broker for the manufacture or sale of any goods, merchandise or products of any kind whatsoever, of others; and generally to do any and all things, properly incident to or convenient for or in connection with any of the businesses, purposes or activities hereinabove enumerated or any other business in which the Corporation may engage. However, neither the foregoing enumeration of purposes and powers, nor any other enumeration of powers elsewhere in these Amended Articles contained, shall be deemed exclusive, nor in any wise a limitation of the powers which may be possessed or exercised by this Corporation, nor shall any of the particular purposes or powers herein enumerated and expressed be deemed to limit, restrain, restrict or exclude any other purposes or powers, whether or not particularly enumerated or expressed, which the Corporation might otherwise have, possess or exercise; but this Corporation shall have and possess, and may exercise, all powers that a Corporation may lawfully have, possess and exercise under the laws of the State of Ohio, and, to the extent now or at any time hereafter authorized or permitted by said laws, shall have and possess, and may exercise, all capacity and powers possessed by natural persons to carry on business and perform all acts, within or without the State of Ohio.
FOURTH: The number of shares which the Corporation is authorized to have outstanding is 26,000,000 consisting of 1,000,000 Serial Preferred Shares without par value
(hereinafter called "Serial Preferred Shares") and 25,000,000 Common Shares of the par value of $1.25 each (hereinafter called "Common Shares").
DIVISION A
Express Terms of the Serial Preferred Shares
Section 1. The Serial Preferred Shares may be issued from time to time in one or more series. All Serial Preferred Shares shall be of equal rank and shall be identical, except in respect of the matters that may be fixed by the Board of Directors as hereinafter provided, and each share of each series shall be identical with all other shares of such series, except as to the date from which dividends are cumulative. Subject to the provisions of Sections 2 to 8, both inclusive, of this Division, which provisions shall apply to all Serial Preferred Shares, the Board of Directors hereby is authorized to cause such shares to be issued in one or more series and with respect to each such series prior to the issuance thereof to fix:
(a) The designation of the series, which may be by distinguishing number, letter or title.
(b) The number of shares of the series, which number the Board of Directors may (except where otherwise provided in the creation of the series) increase or decrease (but not below the number of shares thereof then outstanding).
(c) The dividend rate of the series.
(d) The dates at which dividends, if declared, shall be payable, and the dates from which dividends shall be cumulative.
(e) The redemption rights and price or prices, if any, for shares of the series.
(f) The terms and amount of any sinking fund provided for the purchase of redemption of shares of the series.
(g) The liquidation price payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.
(h) Whether the share of the series shall be convertible into Common Shares, and, if so, the conversion price or prices, any adjustments thereof, and all other terms and conditions upon which such conversion may be made.
(i) Restrictions (in addition to those set forth in Sections 6(b) and 6(c) of this Division) on the issuance of shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Articles of Incorporation fixing, with respect to each
series, the matters described in clauses (a) to (i), both inclusive, of this
Section 1.
Section 2. The holders of Serial Preferred Shares of each series, in preference to the holders of Common Shares and of any other class of shares ranking junior to the Serial Preferred Shares, shall be entitled to receive out of any funds legally available and when and as declared by the Board of Directors dividends in cash at the rate for such series fixed in accordance with the provisions of Section 1 of this Division and no more, payable on the dates fixed for such series. Such dividends shall be cumulative, in the case of shares of each particular series, from and after the date or dates fixed with respect to such series. No dividends may be paid upon or declared or set apart for any of the Serial Preferred Shares for any dividend period unless at the same time a like proportionate dividend for the same dividend period, ratably in proportion to the respective annual dividend rates fixed therefor, shall be paid upon or declared or set apart for all Serial Preferred Shares of all series then issued and outstanding and entitled to receive such dividend.
Section 3. In no event so long as any Serial Preferred Shares shall be outstanding shall any dividends, except a dividend payable in Common Shares or other shares ranking junior to the Serial Preferred Shares, be paid or declared or any distribution be made on the Common Shares or any other shares ranking junior to the Serial Preferred Shares, nor shall any Common Shares or any other shares ranking junior to the Serial Preferred Shares be purchased, retired or otherwise acquired by the Corporation (except out of the proceeds of the sale of Common Shares or other shares ranking junior to the Serial Preferred Shares received by the Corporation subsequent to the date on which the Serial Preferred Shares are first issued):
(a) Unless all accrued and unpaid dividends on Serial Preferred Shares, including the full dividends for the current dividend period, shall have been declared and paid or a sum sufficient for payment thereof set apart; and
(b) Unless there shall be no arrearages with respect to the redemption of Serial Preferred Shares of any series from any sinking fund provided for shares of such series in accordance with the provisions of Section 1 of this Division.
Section 4. (a) Subject to the express terms of each series and to the
provisions of Section 6(b) (iii), the Corporation may from time to time redeem
all or any part of the Serial Preferred Shares of any series at the time
outstanding (i) at the option of the Board of Directors at the applicable
redemption price for such series fixed in accordance with the provisions of
Section 1 or (ii) in fulfillment of the requirements of any sinking fund
provided for shares of such series at the applicable sinking fund redemption
price, fixed in accordance with provisions of Section 1, together in each case
with accrued and unpaid dividends to the redemption date.
(b) Notice of every such redemption shall be mailed, postage prepaid, to the holders of record of the Serial Preferred Shares to be redeemed at their respective addresses then appearing on the books of the Corporation, not less than thirty (30) days nor more than sixty (60) days prior to the date fixed for such redemption. At any time before or after notice has been given as above provided, the Corporation may deposit the aggregate redemption price of the Serial Preferred Shares to be redeemed with any bank or trust company named in such notice, directed to be paid to the respective holders of the Serial Preferred Shares so to be redeemed, in amounts equal to the redemption price of all Serial Preferred Shares so to be redeemed, on surrender of the stock certificate or certificates held by such holders, and upon the making of such deposit
such holders shall cease to be shareholders with respect to such shares, and after such notice shall have been given and such deposit shall have been made such holders shall have no interest in or claim against the Corporation with respect to such shares except only to receive such money from such bank or trust company without interest or the right to exercise, before the redemption date, any unexpired privileges of conversion. In case less than all of the outstanding Serial Preferred Shares of any series are to be redeemed, the Corporation shall select by lot the shares so to be redeemed in such manner as shall be prescribed by its Board of Directors.
(c) Any Serial Preferred Shares which are redeemed by the Corporation pursuant to the provisions of this Section 4 and any Serial Preferred Shares which are purchased and delivered in satisfaction of any sinking fund requirements provided for shares of such series and any Serial Preferred Shares which are converted in accordance with the express terms thereof shall be canceled and not reissued. Any Serial Preferred Shares otherwise acquired by the Corporation shall resume the status of authorized and unissued Serial Preferred Shares without serial designation.
Section 5. (a) The holders of Serial Preferred Shares of any series shall, in case of voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, be entitled to receive in full out of the assets of the Corporation, including its capital, before any amount shall be paid or distributed among the holders of the Common Shares or any other shares ranking junior to the Serial Preferred Shares, the amounts fixed with respect to the shares of such series in accordance with Section 1 of this Division, plus an amount equal to all dividends accrued and unpaid thereon to the date of payment of the amount due pursuant to such liquidation, dissolution or winding up of the affairs of the Corporation. In case the net assets of the Corporation legally available therefor are insufficient to permit the payment upon all outstanding Serial Preferred Shares of the full preferential amount to which they are respectively entitled, then such net assets shall be distributed ratably upon outstanding Serial Preferred Shares in proportion to the full preferential amount to which each such share is entitled.
After payment to holders of Serial Preferred Shares of the full preferential amounts as aforesaid, holders of Serial Preferred Shares as such shall have no right or claim to any of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or with any other corporation, or the merger of any other corporation into it, or the sale, lease or conveyance of all or substantially all the property or business of the Corporation, shall not be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary, for the purposes of this Section 5.
Section 6. (a) The holders of Serial Preferred Shares shall be entitled to one vote for each share of such stock upon all matters presented to the shareholders; and except as otherwise provided herein or required by law, the holders of Serial Preferred Shares and the holders of Common Shares shall vote together as one class on all matters.
If, and so often as, the Corporation shall be in default in the payment of six (6) full quarterly dividends (whether or not consecutive) on any series of Serial Preferred Shares at the time outstanding, whether or not earned or declared, the holders of Serial Preferred Shares of
all series, voting separately as a class and in addition to all other rights to vote for directors, shall be entitled to elect, as herein provided, two (2) members of the Board of Directors of the Corporation; provided, however, that the holders of Serial Preferred Shares shall not have or exercise such special class voting rights except at meetings of the shareholders for the election of directors at which the holders of not less than fifty percent (50%) of the outstanding Serial Preferred Shares of all series then outstanding are present in person or by proxy; and provided further that the special class voting rights provided for herein when the same shall have become vested shall remain so vested until all accrued and unpaid dividends on the Serial Preferred Shares of all series then outstanding shall have been paid, whereupon the holders of Serial Preferred Shares shall be divested of their special class voting rights in respect of subsequent elections of directors, subject to the revesting of such special class voting rights in the event hereinabove specified in this paragraph.
In the event of default entitling the holders of Serial Preferred
Shares to elect two (2) directors as above specified, a special meeting of the
shareholders for the purpose of electing such directors shall be called by the
Secretary of the Corporation upon written request of, or may be called by, the
holders of record of at least ten percent (10%) of the Serial Preferred Shares
of all series at the time outstanding, and notice thereof shall be given in the
same manner as that required for the annual meeting of shareholders; provided,
however, that the Corporation shall not be required to call such special
meeting if the annual meeting of shareholders shall be held within ninety (90)
days after the date of receipt of the foregoing written request from the
holders of Serial Preferred Shares. At any meeting at which the holders of
Serial Preferred Shares shall be entitled to elect directors, the holders of
fifty percent (50%) of the then outstanding shares of Serial Preferred Shares
of all series, present in person or by proxy, shall be sufficient to constitute
a quorum, and the vote of the holders of a majority of such shares so present
at any such meeting at which there shall be such a quorum shall be sufficient
to elect the members of the Board of Directors which the holders of Serial
Preferred Shares are entitled to elect as hereinabove provided. The two
directors who may be elected by the holders of Serial Preferred Shares pursuant
to the foregoing provisions shall be in addition to any other directors then in
office or proposed to be elected otherwise than pursuant to such provisions,
and nothing in such provisions shall prevent any change otherwise permitted in
the total number of directors of the Corporation or require the resignation of
any director elected otherwise than pursuant to such provisions.
Notwithstanding any classification of the other directors of the Corporation,
the two directors elected by the holders of Serial Preferred Shares shall be
elected annually for terms expiring at the next succeeding annual meeting of
shareholders.
(b) The affirmative vote of the holders of at least two-thirds of the Serial Preferred Shares at the time outstanding, given in person or by proxy at a meeting called for the purpose at which the holders of Serial Preferred Shares shall vote separately as a class, shall be necessary to effect any one or more of the following (but so far as the holders of Serial Preferred Shares are concerned, such action may be effected with such vote):
(i) Any amendment, alteration or repeal of any of the provisions of the Articles of Incorporation or of the Regulations of the Corporation which affects adversely the voting powers, rights or preferences of the holders of Serial Preferred Shares; provided, however, that for the purpose of this clause (i) only, neither the amendment of the Articles of Incorporation so as to authorize or create, or to increase the authorized or
outstanding amount of, Serial Preferred Shares or of any shares of any class ranking on a parity with or junior to the Serial Preferred Shares, nor the amendment of the provisions of the Regulations so as to increase the number of directors of the Corporation shall be deemed to affect adversely the voting powers, rights or preferences of the holders of Serial Preferred Shares; and provided further, that if such amendment, alteration or repeal affects adversely the rights or preferences of one or more but not all series of Serial Preferred Shares at the time outstanding, only the affirmative vote of the holders of at least two-thirds of the number of the shares at the time outstanding of the series so affected shall be required;
(ii) The authorization or creation of, or the increase in the authorized amount of, any shares of any class, or any security convertible into shares of any class, ranking prior to the Serial Preferred Shares; or
(iii) The purchase or redemption (for sinking fund purposes or otherwise) of less than all of the Serial Preferred Shares then outstanding except in accordance with a stock purchase offer made to all holders of record of Serial Preferred Shares, unless all dividends upon all Serial Preferred Shares then outstanding for all previous quarterly dividend periods shall have been declared and paid or funds therefor set apart and all accrued sinking fund obligations applicable thereto shall have been complied with.
(c) The affirmative vote of the holders of at least a majority of the Serial Preferred Shares at the time outstanding, given in person or by proxy at a meeting called for the purpose at which the holders of Serial Preferred Shares shall vote separately as a class, shall be necessary to effect any one or more of the following (but so far as the holders of Serial Preferred Shares are concerned, such action may be effected with such vote):
(i) The sale, lease or conveyance by the Corporation of all or substantially all of its property or business, or its consolidation with or merger into any other corporation unless the corporation resulting from such consolidation or merger will have after such consolidation or merger no class of shares either authorized or outstanding ranking prior to or on a parity with the Serial Preferred Shares except the same number of shares ranking prior to or on a parity with the Serial Preferred Shares and having the same rights and preferences as the shares of the Corporation authorized and outstanding immediately preceding such consolidation or merger, or each holder of Serial Preferred Shares immediately preceding such consolidation or merger shall receive the same number of shares, with the same rights and preferences, of the resulting corporation; or
(ii) The authorization of any shares ranking on a parity with the Serial Preferred Shares or an increase in the authorized number of shares of Serial Preferred Shares.
Section 7. The holders of Serial Preferred Shares shall have no preemptive right to purchase or have offered to them for purchase any shares or other securities of the Corporation, whether now or hereafter authorized.
Section 8. For the purpose of this Division A:
Whenever reference is made to shares "ranking prior to the Serial Preferred Shares" or "on a parity with the Serial Preferred Shares," such reference shall mean and include all shares of the Corporation in respect of which the rights of the holders thereof as to the payment of dividends or as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation are given preference over, or rank on an equality with (as the case may be) the rights of the holders of Serial Preferred Shares; and whenever reference is made to shares "ranking junior to the Serial Preferred Shares," such reference shall mean and include all shares of the Corporation in respect of which the rights of the holders thereof as to the payment of dividends and as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation are junior and subordinate to the rights of the holders of Serial Preferred Shares.
DIVISION A-1
Express Terms of the Cumulative Redeemable Preferred Shares
There is hereby established a series of Serial Preferred Shares to which the following provisions shall be applicable:
Section 1. DESIGNATION OF SERIES. The series shall be designated "Cumulative Redeemable Serial Preferred Shares" (hereinafter sometimes called this "Series" or the "Cumulative Redeemable Preferred Shares").
Section 2. NUMBER OF SHARES. The number of shares of this Series shall be 250,000.
Section 3. DIVIDENDS. (a) The holder of record of Cumulative Redeemable Preferred Shares shall be entitled to receive, when and as declared by the Board of Directors in accordance with the terms hereof, out of funds legally available for the purpose, cumulative quarterly dividends payable in cash on the first day of January, April, July and October in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a Cumulative Redeemable Preferred Share or fraction of a Cumulative Redeemable Preferred Share in an amount per share (rounded to the nearest cent) equal to the lessor of (i) $1,335 or (ii) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in cash) of all non-cash dividends or other distributions (other than a dividend payable in Common Shares, or a subdivision of the outstanding Common Shares by reclassification or otherwise), declared on the Common Shares since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any Cumulative Redeemable Preferred Share or fraction of a Cumulative Redeemable Preferred Share. In the event the Corporation shall at any time declare or pay any dividend on the Common Shares payable in Common Shares, or effect a subdivision or combination or consolidation of the outstanding Common Shares by reclassification or otherwise than by payment of a dividend in Common Shares) into a greater or lesser number of Common Shares, then in each such case the amount to which holders of Cumulative Redeemable Preferred Shares were entitled immediately prior to such event under clause (ii) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the numerator of which is the number of Common Shares outstanding immediately after such event and the denominator of which is the number of Common Shares that were outstanding immediately prior to such event.
(b) Dividends shall begin to accrue and be cumulative on outstanding Cumulative Redeemable Preferred Shares from the Quarterly Dividend Payment Date next preceding the date of issue of such Cumulative Redeemable Preferred Shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Cumulative Redeemable Preferred Shares entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. No dividends shall be paid upon or declared and set apart for any Cumulative Redeemable Preferred Shares for any dividend period unless at the same time a dividend for the same dividend period, ratably in proportion to the respective annual dividend rates fixed therefor, shall be paid upon or declared and set apart for all Serial Preferred Stock of all series then outstanding and entitled to receive such dividend. The Board of Directors may fix a record date for the determination of holders of Cumulative Redeemable Preferred Shares entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 40 days prior to the date fixed for the payment thereof.
Section 4. REDEMPTIONS. Subject to the provisions of Section 6(b)
(iii) of Paragraph 1 and in accordance with Section 4 of Paragraph 1, the
Cumulative Redeemable Preferred Shares shall be redeemable from time to time at
the option of the Board of Directors of the Corporation, as a whole or in part,
at any time at a redemption price per share equal to one hundred times the then
applicable Purchase Price as defined in that certain Rights Agreement, dated as
of February 10, 1989 between the Corporation and Ameritrust Company National
Association (The "Rights Agreement"), as the same may be from time to time
amended in accordance with its terms, which Purchase Price is $130 as of
February 10, 1989, subject to adjustment from time to time as provided in the
Rights Agreement. Copies of the Rights Agreement are available from the
Corporation upon request. In case less than all of the outstanding Cumulative
Redeemable Preferred Shares are to be redeemed, the Corporation shall select by
lot the shares so to be redeemed in such manner as shall be prescribed by its
Board of Directors.
Section 5. LIQUIDATIONS. (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation (hereinafter referred to as a "Liquidation"), no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon Liquidation) to the Cumulative Redeemable Preferred Shares, unless, prior thereto, the holders of Cumulative Redeemable Preferred Shares shall have received at least an amount per share equal to one hundred times the then applicable Purchase Price as defined in the Rights Agreement, as the same may be from time to time amended in accordance with its terms (which purchase Price is $130 as of February 10, 1989), subject to adjustment from time to time as provided in the Rights Agreement, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not earned or declared, to the date of such payment, provided that the holders of shares of Cumulative Redeemable Preferred Shares
shall be entitled to receive at least an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to holders of Common Shares (the "Cumulative Redeemable Preferred Shares Liquidation Preference").
(b) In the event, however, that the net assets of the Corporation are not sufficient to pay in full the amount of the Cumulative Redeemable Preferred Shares Liquidation Preference and the liquidation preferences of all other series of Serial Preferred Stock, if any, which rank on a parity with the Cumulative Redeemable Preferred Shares as to distribution of assets in Liquidation, all shares of this Series and of such other series of Serial Preferred Stock shall share ratably in the distribution of assets (or proceeds thereof) in Liquidation in proportion to the full amounts to which they are respectively entitled.
(c) In the event the Corporation shall at any time declare or pay any dividend on the Common Shares payable in Common Shares, or effect a subdivision or combination or consolidation of the outstanding Common Shares (by reclassification or otherwise than by payment of a dividend in Common Shares) into a greater or lesser number of Common Shares, then in each such case the amount to which holders of Cumulative Redeemable Preferred Shares were entitled immediately prior to such event pursuant to the proviso set forth in paragraph (a) above, shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of Common Shares outstanding immediately after such event and the denominator of which is the number of Common Shares that were outstanding immediately prior to such event.
(d) The merger or consolidation of the Corporation into or with any
other corporation, or the merger of any other corporation into it, or the sale,
lease or conveyance of all or substantially all the property or business of the
Corporation, shall not be deemed to be a Liquidation for the purposes of this
Section 5.
Section 6. CONVERSIONS. The Cumulative Redeemable Preferred Shares shall not be convertible into Common Shares.
DIVISION B
Express Terms of the Common Shares
The Common Shares shall be subject to the express terms of the Serial Preferred Shares and any series thereof. Each Common Share shall be equal to every other Common Share. The holders of Common Shares shall be entitled to one vote for each share upon all matters presented to the shareholders.
No holders of Common Shares of the Corporation shall be entitled to preemptive rights therein with respect to any sale, exchange, offering or issuance of shares or other securities of the Corporation now or hereafter authorized.
FIFTH: In furtherance, and not in limitation, of the general powers conferred upon this corporation by the laws of Ohio, and the general and particular powers conferred by these Amended Articles, and only for the purpose of defining, limiting and prescribing the manner in
which the authority and powers of the Corporation, in certain instances, may or shall be exercised, and defining the powers of the directors and shareholders, in certain instances, as among themselves, and to make certain other provisions concerning the directors and shareholders, it is expressly provided:
(a) Meetings of directors or of shareholders may be held either within or without the State of Ohio, subject to any conditions or restrictions that may be prescribed by the Regulations;
(b) Upon any reduction of stated capital of the Corporation, any excess of assets resulting from any such reduction may be disposed of by the Board of Directors, or may be distributed, or passed and added to the surplus of the Corporation and thereafter disposed of or distributed, or held subject to distribution, by order of the Board of Directors, in all respects as surplus paid in by shareholders, without any other corporate action;
(c) The Corporation shall have power, when authorized by resolution of the Board of Directors, without any other corporate action, to purchase or to redeem shares of the Corporation, of any class at any time issued by the Corporation and upon any occasion outstanding, to any extent, for any purpose, upon any occasion, in any manner and for any consideration determined by the Board of Directors and permitted, or not expressly and specifically prohibited, by law.
SIXTH: The Corporation shall not, upon any occasion of the declaration, issuance and distribution of a dividend payable in shares, or any other occasion of issuance, exchange or transfer of shares, or certificates thereof, issue any certificates for fractions of shares; but all such fractions to which any shareholder might otherwise be entitled in connection with any such declaration, issuance, distribution or exchange shall be eliminated and disposed of by such method, authorized, permitted or not prohibited by law, as may be determined by the Board of Directors.
SEVENTH: These Amended and Restated Articles of Incorporation supersede and take the place of the existing Amended Articles of Incorporation, as heretofore amended.
IN WITNESS WHEREOF, Robert W. Mahoney, Chairman of the Board and Chief Executive Officer, and Charee Francis-Vogelsang, Secretary of Diebold, Incorporated, acting for and on behalf of said Corporation, have hereunto subscribed their names this 28th day of February, 1989.
Secretary
EXHIBIT 10.3
September 26, 1986
Mr. Raymond Koontz
2601 Foxhill Drive N.W.
Canton, Ohio 44708
Dear Mr. Koontz:
The purpose of this letter is to amend paragraph No. 2 of your Employment Contract as expressed in our letter agreement dated May 26, 1982, a copy of which is attached.
In consideration of your dedicated service to Diebold, Incorporated, the Board of Directors at its September 26, 1986 meeting authorized an increase in the payments provided for in paragraph No. 2 from $100,000 to $150,000 per annum.
In all other respects, the provisions of your Employment Contract are hereby ratified and shall continue in force.
Very truly yours,
DIEBOLD, INCORPORATED
By: ___________________________________
Robert W. Mahoney
President and Chief
Executive Officer
attachment
Accepted and Agreed:
May 26, 1982
Mr. Raymond C. Koontz
2601 Foxhill Drive N.W.
Canton, Ohio 44708
Dear Mr. Koontz:
Reference is made to your employment agreement with Diebold, Incorporated ("Diebold") dated September 20, 1978 (hereinafter referred to as your "Employment Contract").
This letter shall represent a further amendment to and shall completely supersede your Employment Contract, effective April 1, 1982.
1. In consideration of your continued services to Diebold as Chairman of the Board, you shall be paid One Hundred Seventy-five Thousand Dollars ($175,000.00) for the year commencing April 1, 1982. Your compensation shall be reviewed annually to assure its consistency with the services which you are called upon to render.
2. Effective with your retirement, your regular salary shall cease; however, in consideration of the service you have devoted to Diebold as an executive employee, Diebold will make payments to you or to your beneficiary in equal monthly installments at a rate of $100,000 per annum, commencing on the day after your retirement, and ending on the date of your death or whichever date is the later. The payments shall then be made to you or if you should die before expiration of the minimum ten year payment period, to your wife, if she shall survive you, and if she shall not survive you, then to such beneficiaries as you have designated by filing with the Treasurer of Diebold an appropriate written designation of contingent beneficiary, or, failing such designation, to your estate. The payments to you and/or to your wife shall be reduced by the applicable monthly portion of the amount, if any, annually paid to you and/or to your wife during such period as a joint or single annuitant under any pension plan now existing or which may hereafter be established by Diebold for the benefit of its employees.
3. During the entire period of the payments provided in paragraph 2 hereof, you will refrain from serving any interests engaged to any substantial degree in the manufacture of bank equipment similar in purpose to that manufactured by Diebold. In the event you shall serve any such conflicting interest during your retirement, Diebold's obligation to make any further payments under paragraph 2 hereof shall terminate, and Diebold, in addition to any other remedies to which it may be entitled under law, shall be entitled to immediate injunctive relief restraining you from continuing to serve such conflicting interest.
4. All references herein to Diebold shall be deemed to refer with equal force and effect to any corporate or other successor of Diebold which shall acquire, directly or indirectly, by merger, consolidation, purchase, or otherwise, all or substantially all, of the assets of Diebold.
May 26, 1982
Mr. Raymond C. Koontz
In any such event, the term "Diebold" as used in this agreement shall mean the Diebold division of any such acquiring corporation or any equivalent entity. This agreement shall be binding upon, and the benefits hereunder shall inure to the parties' heirs, assigns and successors in interest, whether by operation of law or otherwise provided, however, that you agree that this agreement and the rights, interests and benefits hereunder shall not be assigned, transferred, pledged, or hypothecated in any way by you, and shall not be subject to execution, attachment, or similar process. Any attempted assignment, transfer, pledge, or hypothecation, or the levy of any execution, attachment or similar process thereon, shall be null and void and without effect.
5. If any controversy shall arise hereunder, it shall be settled by arbitration in accordance with the rules then obtaining of the American Arbitration Association.
6. Any notice or request required or permitted hereunder shall be sent by registered or certified mail, addressed, if to Diebold, to its then principal office, attention President and Chief Executive Officer, or, if to you, at the address above appearing, or at other addresses as you may have previously designated for such purpose.
Your acceptance by signing at the space provided below will constitute this a binding agreement between us and will replace, effective April 1, 1982, your existing Employment Contract, as well as any other prior agreements or understandings between us, oral or written, with respect to your employment.
Very truly yours,
DIEBOLD, INCORPORATED
By: ___________________________
Earl F. Wearstler
President and Chief
Executive Officer
ACCEPTED AND AGREED:
Dated: May 26, 1982
EXHIBIT 10.4
SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT
AGREEMENT between DIEBOLD, INCORPORATED, an Ohio corporation
(the "Company") and ROBERT W. MAHONEY (the "Executive"),
WITNESSETH:
RECITALS
A. Executive is presently employed in a key executive position as the Company's President.
B. The Company wishes to provide for the Executive a supplemental pension benefit upon the terms and conditions set forth in this Agreement.
IT IS NOW THEREFORE agreed as follows:
1. DEFINITIONS. For purposes of this Agreement, the following definitions shall apply:
1.1 "Retirement Plan" shall mean the Diebold Incorporated Retirement Plan for Salaried Employees-Plan No. 001.
1.2 "Committee" shall mean the Retirement Plan Committee as provided for in Article VIII of the Retirement Plan.
1.3 "Final Average Compensation" shall have the same meaning as set forth in the Retirement Plan except that until Executive has received compensation for at least five (5) consecutive calendar years, Final Average Compensation shall be computed by (a) aggregating all compensation paid to the Executive during his employment by the Company and (b) dividing the aggregate compensation by the number of months during which the Executive was paid and (c) multiplying the result by 12.
1.4 "Benefit Service" shall have the same meaning accorded to such words in the Retirement Plan for vesting purposes.
1.5 "Retirement Benefit" shall have the same meaning accorded to such words in the Retirement Plan.
2. SUPPLEMENTAL RETIREMENT BENEFIT
2.1 AMOUNT OF BENEFIT. Upon termination of his employment with the
Company for any reason, the Company agrees to pay to Executive a
Supplemental Retirement Benefit equal to the difference between (a) the
benefit he would be entitled to receive under the Retirement Plan if
his years of Benefit Service under the Plan were increased by eleven
(11) years, and (b) the actual Retirement Benefit he is entitled to
receive under the Retirement Plan.
2.2 COMPUTATION OF BENEFIT. The Supplemental Retirement Benefit payable to the Executive hereunder shall be computed on the basis of the actuarial assumptions and optional forms of payment used for the computation of his Retirement Benefit under the Retirement Plan.
2.3 METHOD OF PAYMENT. Such Supplemental Retirement Benefit shall be paid to the Executive or to his beneficiary in the same manner and at the same time as Retirement Benefits shall be paid under the Retirement Plan.
3. MISCELLANEOUS PROVISIONS
3.1 ASSIGNMENT. This Agreement shall be binding upon the Company and Executive and their respective successors and assigns provided, however, that no rights of any kind under this Agreement shall, without the written consent
of the Company, be transferrable or assignable by the Executive or any other person or be subject to alienation, encumbrance, garnishment, attachment, execution or levy of any kind.
3.2 INTERPRETATION. All questions of interpretation, construction or application arising under this Agreement shall be decided by the Committee whose decision shall be final and conclusive upon all persons.
3.3 EXECUTIVE'S RIGHTS. Benefits payable under this Agreement shall be a general unsecured obligation of the Company to be paid by the Company from its own funds. Neither the Executive nor any beneficiary shall have any lien or security interest in any fund or assets of the Company provided, however, that the Company may, in its discretion, purchase an annuity contract or an insurance contract to discharge its obligations hereunder or create a reserve for the payment of such benefits.
3.4 GOVERNING LAW. This Agreement shall be construed in accordance with the laws of the State of Ohio.
Executed this 8th day of April, 1987.
DIEBOLD, INCORPORATED
By: ________________________________
"Company"
"Executive"
Exhibit 10.5
DIEBOLD, INCORPORATED
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1994
DIEBOLD, INCORPORATED
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
The "Diebold, Incorporated Supplemental Employee Retirement Plan" originally adopted effective January 1, 1990 is hereby amended and restated, effective as of January 1, 1994. This Amended and Restated Plan applies to any Participant who retires, is disabled or is deceased on or after January 1, 1994. Any Participant who reaches any one of these events prior to January 1, 1994 would be governed by the terms of the plan then in effect.
This Plan was created for the principal purpose of providing retirement income for certain executive and highly compensated management employees of Diebold, Incorporated, and its subsidiary organizations and InterBold. It is intended to supplement benefits payable under the Diebold, Incorporated Salaried Employees Pension Plan and the Retirement Plan for Employees of InterBold, as well as benefits payable under the Federal Social Security Act and certain other deferred compensation arrangements.
(a) The following definitions shall apply with respect to this Plan:
(1) "Annual Compensation" shall mean a Participant's W-2
compensation from the Employer for any Plan Year,
excluding, however, Bonus payments received within the year
but paid with respect to the prior Plan Year and including any
Bonus payments received in the following year, but paid with
respect to the current Plan Year. Annual compensation shall
also exclude any amount included in the W-2 compensation that
is imputed income for the value of non-cash compensation, stock
options and any type of expense reimbursement and related tax
allowance (including but not limited to moving, automobile and
business expenses), but including deferrals under the Diebold,
Incorporated 401(k) Savings Plan, and including any deferrals
under any established compensation plan or plans adopted by the
Company. 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. If any
deferred compensation is recognized and is included in a
Participant's Annual Compensation for any period of his
participation in this Plan, the same compensation may not also
be included as compensation in any subsequent year in which it
is actually paid or deemed to be received. This applies to
both deferrals under the 401(k) Savings Plan and any Deferred
Compensation Plans.
(2) "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 XI.
A Beneficiary so designated will not generally be a Spouse.
(3) "Board" shall mean the Board of Directors of Diebold,
Incorporated.
(4) "Change in Control" shall have the meaning assigned to such
term in Article X.
(5) "Change in Control Benefit" shall mean the benefit determined
in accordance with Article X.
(6) "Committee" shall mean the Compensation Committee of the Board,
as such Committee may be constituted from time to time.
(7) "Company" shall mean Diebold, Incorporated.
(8) "Company Service" shall mean years of employment (measured in
years and completed months) with an Employer.
(9) "Disability Benefit" shall mean the benefit determined in
accordance with Article IX hereof.
(10) "Early Retirement Age" shall mean the 60th birthday of a
Participant.
(11) "Early Retirement Date" shall mean the first day of the month
coinciding with or next following the 60th birthday of a
Participant.
(12) "Early Retirement Benefit" shall mean the benefit determined
in accordance with Article VI hereof.
(13) "Employer" shall mean (a) the Company or its successors, (b) any
affiliated corporation or other entity which may specifically
adopt this Plan with the consent of the Company, or its
successors, and (c) InterBold.
(14) "15-Year Service Benefit" shall mean the benefit determined in
accordance with Article VIII hereof.
(15) "Final Average Monthly Compensation" shall mean one-twelfth of
the average of the Participant's 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 Participant's
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.
(16) "Involuntary Termination Benefit" shall mean the benefit
determined in accordance with Article VII.
(17) "Normal Retirement Benefit" shall mean the benefit determined in
accordance with Article V.
(18) "Normal Retirement Date" shall mean the first day of the month
coinciding with or next following the 62nd birthday of a
Participant.
(19) "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.
(20) "Plan" shall mean this Diebold, Incorporated Supplemental
Employee Retirement Plan, as in effect from time to time.
(21) "Post-Retirement Death Benefit" shall mean the benefit
determined in accordance with Section (b) of Article XI.
(22) "Pre-Retirement Death Benefit" shall mean the benefit
determined in accordance with Section (a) of Article XI.
(23) "Qualified Retirement Plan" shall mean the Diebold,
Incorporated Retirement Plan for Salaried Employees or the
Retirement Plan for Employees of InterBold, as presently set
forth and as they may subsequently be amended, or their
successor.
(24) "Service Fraction" shall mean, for any Participant, a fraction,
the numerator of which is the lesser of (A) the Participant's
years of Company Service, or (B) 15, and the denominator of
which is 15.
(25) "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 Participant's 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 Participant's 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.
(26) "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 Participant's death, retirement or other termination of
employment with the Employer.
(27) "Supplemental Retirement Benefit" shall mean the Change in
Control Benefit, Disability Benefit, Early Retirement 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.
(28) "Terminated For Cause" shall have the meaning assigned to such
term in Article IV.
(29) "Total Disability" shall mean a condition in which a
Participant is unable, by reason of sickness or accident,
to fulfill the duties of his employment by the Employer. The
determination of Total Disability shall be made by the
Committee in accordance with the provisions of Article IX.
(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 PLAN; DISQUALIFICATION. The Committee, acting in its
sole discretion, shall make recommendations to the Board as to which
executive or highly paid management employees of the Employer shall
become Participants in the Plan. The Board shall make the final
decision as to those executive or highly paid management employees who
shall become Participants in the Plan and at which time such employees
become Participants; provided, however, that in the absence of a Change
in Control or a finding of Total Disability, a Participant's
participation shall cease and no benefits under this Plan shall be
payable:
(1) to a Participant if the Participant:
(A) voluntarily terminates employment before attaining age
60 with less than 15 years of Company Service; or
(B) fails to give an Employer six months written advance
notice of his pending termination of employment; or
(C) is Terminated for Cause; or
(2) to a Participant's Spouse, if the Participant:
(A) dies prior to satisfying the requirements for a Spouse's
Pre-Retirement or Post-Retirement Death Benefit under
Article XI; or
(B) is Terminated for Cause; or
(C) when an eligible Spouse remarries.
(3) to a Participant's Beneficiary or Estate, if the Participant:
(A) dies prior to satisfying the requirements for a Pre-
Retirement or Post-Retirement Spouse's Death Benefit
under Article XI; or
(B) is Terminated for Cause.
(b) TERMINATED FOR CAUSE. As used in this Plan, "Terminated for Cause"
shall mean termination of a Participant's Employment by an Employer due
to the Participant's:
(1) intentional act of fraud, embezzlement or theft in connection
with his duties or in the course of his employment with the
Employer;
(2) intentional wrongful damage to property of the Employer;
(3) intentional wrongful disclosure of secret processes or
confidential information of the Employer; or
(4) intentional wrongful engagement in any competitive activity
which would constitute a material breach of the duty of loyalty
to the Employer;
and any such act 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 judgement or negligence, but shall be deemed "intentional"
only if done, or omitted to be done, by the Participant not in good
faith and without reasonable belief that his action or omission was not
in or opposed to the 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 purpose, 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.
(c) 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
foregoing conditions of this Article IV and satisfies the requirements
of one of the succeeding Articles of the Plan.
(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 Section (b) of this Article.
(b) COMPUTATION OF AMOUNT OF NORMAL RETIREMENT BENEFIT. A Participant who
retires on or after his Normal Retirement Date shall be entitled to
receive, commencing on the first day of the month coincident with or
following the later of his retirement or his application therefor, a
monthly Supplemental Retirement Benefit equal to (1) 65% of the
Participant's Final Average Monthly Compensation multiplied by his
Service Fraction, reduced by (2) the sum of:
(A) 50% of the monthly Social Security Benefit payable to the
Participant commencing on the first day of the month
coincident with or following his retirement or his application
for benefits, if later; and
(B) 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 retirement or his application for benefits, if
later, assuming (i) 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 retirement or his
application for benefits hereunder, if later, and (ii) that the
Participant elected commencement of such benefit on such date.
(c) FORM AND DURATION OF PAYMENT. The form of a Participant's benefit
under this Article shall be an annuity payable monthly for the
Participant's lifetime (except as may be provided in Sections (b) or
(c) of Article XI).
(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, from the time he has reached his Early Retirement Age up to the time he reaches
age 62, to retire and receive an Early Retirement Benefit commencing at
the time set forth in Section (b) of this Article.
(b) COMPUTATION OF AMOUNT OF EARLY RETIREMENT BENEFIT. A Participant who
retires on or after his Early Retirement Date and before his Normal
Retirement Date shall be entitled to receive, commencing on the later
of his Normal Retirement Date or the first day of the month after his
application therefor, a monthly Early Retirement Benefit equal to (1)
65% of the Participant's Final Average Monthly Compensation multiplied
by his Service Fraction reduced by (2) the sum of:
(A) 50% of the monthly Social Security Benefit payable to the
Participant commencing on this Normal Retirement Date; and
(B) 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 (as defined herein),
assuming (i) 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 (ii) that the Participant
elected commencement of such benefit at his Normal Retirement
Date.
The Participant, at his election, may commence his benefits under this
Article on the first day of any month after his date of retirement and
before his Normal Retirement Date, but in that case his monthly benefit
computed under the preceding sentence shall be reduced by .7% for each
full month (up to 12) by which
the date of commencement precedes the Participant's Normal Retirement
Date, and .6833% for each additional full month (if any) by which the
date of commencement precedes the Participant's Normal Retirement Date.
FORM AND DURATION OF PAYMENT. The form of a Participant's benefit
under this Article shall be an annuity payable monthly for the
Participant's lifetime (except as may be provided in Sections (b) or
(c) of Article XI).
(a) QUALIFICATION FOR BENEFIT. Subject to the provisions of Article IV, a
Participant whose employment with the Employer is involuntarily
terminated before he reaches his Early Retirement Age shall be eligible
to receive an Involuntary Termination Benefit commencing at the time
set forth in Section (b) of this Article. The Committee, or its duly
appointed representative for this purpose, shall have full discretion
to determine whether the termination of a Participant's 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, commencing on the later of his Normal
Retirement Date or the first day of the month after his application
therefor, a monthly Supplemental Retirement Benefit equal to (1) 65% of
the Participant's Final Average Monthly Compensation multiplied by his
Service Fraction, reduced by (2) the sum of:
(A) 50% of the monthly Social Security Benefit payable to the
Participant commencing on his Normal Retirement Date; and
(B) 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 (as herein defined),
assuming (i) 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 (ii) that the Participant
elected commencement of such benefit at his Normal Retirement
Date.
The Participant, at his election, may commence his benefits under this
Article on the first day of any month after he attains age 60 and
before his Normal Retirement Date, but in that case his benefit
computed under the preceding sentence shall be reduced by .7% for each
full month (up to 12) by which the date of commencement precedes the
Participant's Normal Retirement Date, and .6833% for each additional
full month (if any) by which the date of commencement precedes the
Participant's Normal Retirement Date.
(c) FORM AND DURATION OF PAYMENT. The form of a Participant's benefit
under this Article shall be an annuity payable monthly for the
Participant's lifetime (except as may be provided in Sections (b) or
(c) of Article XI).
(a) QUALIFICATION FOR BENEFIT. Subject to the provisions of Article IV, a
Participant who terminates employment with the Employer with 15 or more
years of Company Service but who is not then eligible for other
benefits under this Plan shall be eligible to receive a 15-Year Service
Benefit commencing at the time set forth in Section (b) of this
Article.
(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,
commencing on the later of his Normal Retirement Date or the first day
of the month after his application therefor, a monthly Supplemental
Retirement Benefit equal to (1) 55% of his Final Average Monthly
Compensation, reduced by (2) the sum of:
(A) 50% of the monthly Social Security Benefit payable to the
Participant commencing on his Normal Retirement Date; and
(B) 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
(i) 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 (ii) that the Participant elected
commencement of such benefit at his Normal Retirement Date.
The Participant, at his election, may commence his benefits under this
Article on the first day of any month after he attains age 60 and
before his Normal Retirement Date, but in that case his benefit
computed under the preceding sentence shall be reduced by .7% for each
full month (up to 12) by which the date of commencement precedes the
Participant's Normal Retirement Date, and .6833% for each additional
full month (if any) by which the date of commencement precedes the
Participant's Normal Retirement Date.
(c) FORM AND DURATION OF PAYMENT. The form of a Participant's benefit
under this Article shall be an annuity payable monthly for the
Participant's lifetime (except as may be provided in Sections (b) or
(c) of Article XI).
(a) QUALIFIED FOR BENEFIT. Subject to the provisions of Article IV, if a
Participant's employment with the Employer is terminated before he
reaches his Early Retirement Age by reason of his Total Disability (to
be determined solely in the discretion of the Committee based upon
satisfactory medical evidence submitted to the Committee, including
recognition of the Participant's receipt of disability benefits under
the Social Security Act), such Participant shall be eligible to receive
a Disability Benefit commencing at the time set forth in Section (b) of
this Article.
(b) COMPUTATION OF AMOUNT OF DISABILITY BENEFIT. A Participant who is
eligible for a Disability Benefit shall be entitled to receive,
commencing on the first day of the month following the later of the
date of the Participant's termination of employment on account of total
Disability or his application therefor, a monthly Supplemental
Retirement Benefit equal to (1) 65% of the
Participant's Final Average Monthly Compensation multiplied by his
Service Fraction, reduced by (2) the sum of:
(A) 50% of the monthly Social Security Benefit that would be
payable to the Participant on account of his Total Disability
if he was 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
(B) 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 was 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 Participant's 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 (1) minus (2) then being
multiplied by 83.4%.
(c) FORM AND DURATION OF PAYMENT. The form of a Participant's benefit under this Article shall be an annuity payable monthly until the earlier of the first day of the month for which the committee determines that the Participant no longer has a Total Disability, or the first day of the month in which occurs the Participant's death (except as may be provided in Sections (b) or (c) of Article XI). The Committee may, in its discretion, take such steps as it deems necessary to determine the continued existence of a Participant's Total Disability and may cease or
reduce the Disability Benefit payable hereunder if it is established to the Committee's satisfaction (as determined under the same standards recognized at the time the Committee initially deemed the Participant as suffering a Total Disability) that such Total Disability no longer exists or Social Security Disability Benefits are no longer being paid.
(a) QUALIFICATION FOR BENEFIT. A Participant who (1) terminates employment
with the Employer 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 Section (c) of this
Article.
(b) CHANGE IN CONTROL. For purposes of the Plan, a "change in control"
shall have occurred if any of the events described in the following
paragraphs (1) through (5) of this Section (b) occur and if none of the
circumstances described in the succeeding unnumbered paragraphs of this
Section (b) also exist or subsequently come into existence:
(1) 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 then-outstanding securities of such corporation or person immediately after such transaction is held in the aggregate by the holders of Voting Stock (as that term is hereafter
defined) of the Company immediately prior to such transaction;
or (2) 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
then-outstanding securities of such corporation or person
immediately after such sale or transfer is held in the
aggregate by the holders of Voting Stock of the Company
immediately prior to such sale or transfer; or
(3) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act 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% or more of the combined voting
power of the then-outstanding securities entitled to vote
generally in the election of directors of the Company ("Voting
Stock"); or
(4) 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
(5) 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
thereof, unless the election, or the nomination for election
by the Company's stockholders, of each director of the Company
first elected during such period was approved by a vote of at
least two-thirds of the Board then still in office who were
directors of the Company at the beginning of any such period.
Notwithstanding the foregoing provisions of paragraph (3) or (4) of this
Section (b), a "Change in Control" shall not be deemed to have occurred
for purposes of the Plan either (i) solely because (A) the Company (B)
an entity in which the Company directly or indirectly beneficially owns
50% or more of the voting securities, or (C) any Company-sponsored
employee stock ownership plan or any other employee benefit plan of the
Company, either 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% 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 beneficial ownership or (ii) solely because of a change in
control of any Subsidiary by which a Participant may be employed.
Notwithstanding the foregoing provisions of paragraphs (1) through (4)
of this Section (b), if, prior to any event described in paragraphs (1)
through (4) of this Section (b) instituted by any person not an officer
or director of the Company, or prior to any disclosed proposal
instituted by any person not an officer or director of the Company
which could lead to any such event, the management of the Company
proposes any restructuring of the Company which ultimately leads to an
event described in paragraphs (1) through
(4) of this Section (b) pursuant to such management proposal, then a "Change in Control" shall not be deemed to have occurred for purposes of this Plan.
If (i) any agreement to merge, consolidate, reorganize or sell or
otherwise transfer assets referred to in paragraph (1) or (2) of
this Section (b) is terminated without such merger, consolidation,
reorganization or sale or transfer having been consummated, (ii) the
person filing a Schedule 13D or Schedule 14D-1 referred to in paragraph
(3) of this Section (b) files an amendment to any such Schedule
disclosing that it no longer is the beneficial owner of securities
representing 20% or more of the Voting Stock of the Company, or (iii)
the Company reports that the change of control which it reported in the
filing referred to in paragraph (4) of this Section (b) will not in
fact occur, the Board may, by notice to Participants, declare that a
Change in Control has not occurred for purposes of the Plan
(notwithstanding the occurrence of the previous events referred to in
paragraph (1), (2), (3) or (4) of this Section (b)), provided that such
declaration shall be without prejudice to any exercise by Participants
of rights under this Article XII that may have occurred prior to such
declaration.
As used in this Article XII, the term "Subsidiary" means a corporation, company, partnership, or other entity (i) more than 50% of the outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) of which are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than 50 percent of whose ownership interest representing the right generally to make decisions for such other entity is, owned or controlled,
directly or indirectly, by the Company, but such corporation, company,
or other entity shall be deemed to be a Subsidiary only so long as such
ownership or control exists.
(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, commencing at the later of his Normal Retirement Date or the
first day of the month after his application therefor, a monthly
Supplemental Retirement Benefit equal to (1) 65% of the Participant's
Final Average Monthly Compensation multiplied by his Service Fraction,
reduced by (2) the sum of:
(A) 50% of the monthly Social Security Benefit payable to the
Participant commencing on his Normal Retirement Date; and
(B) 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 (as herein defined), assuming (i)
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 (ii) that the Participant elected commencement of such
benefit at his Normal Retirement Date.
The Participant, at his election, may commence his benefits under this
Article on the first day of any month after he attains age 60 and before his
Normal Retirement Date, but in that case his benefit computed under the
preceding sentence shall be reduced by
.7% for each full month (up to 12) by which the date of commencement
precedes the Participant's Normal Retirement Date, and .6833% for each
additional full month (if any) by which the date of commencement
precedes the Participant's Normal Retirement Date.
(d) FORM AND DURATION OF PAYMENT. The form of a Participant's benefit
under this Article shall be an annuity payable monthly for the
Participant's lifetime (except as may be provided in Sections (b) or
(c) of Article XI).
(a) PRE-RETIREMENT
(1) QUALIFICATION FOR BENEFIT. Subject to the provisions of
Article IV, if a Participant dies after having satisfied the
eligibility requirements for a Supplemental Retirement Benefit
(other than a Disability Benefit) but before commencing to
receive payment of such benefit, the surviving Spouse of such
deceased Participant shall be eligible for a Pre-Retirement
Death Benefit commencing at the time set forth in paragraph
(2) of this Section.
(2) COMPUTATION OF AMOUNT OF PRE-RETIREMENT DEATH BENEFIT. The
Pre-Retirement Death Benefit shall be a monthly benefit,
commencing on the later of the Participant's Normal Retirement
Date (or, in the case of a Participant who dies after his
Normal Retirement Date, on the first day of the month following
the Participant's death) or the first day of the month after
the surviving Spouse's application therefor, equal in amount to
the monthly Supplemental Retirement Benefit to which the
deceased Participant would have been entitled commencing on his
Normal Retirement Date (or, in
the case of a Participant who dies after his Normal Retirement Date, on the first day of the month following his death).
In the case of the surviving Spouse of a Participant who dies
before his Normal Retirement Date, the surviving Spouse, at the
surviving Spouse's election, may commence the Pre-Retirement
Death Benefit on the first day of any month after the later of
the date on which the Participant would have reached age 60 had
he not died or the date of the Participant's death and before
the Participant's Normal Retirement Date, but in that case the
Pre-Retirement Death Benefit shall be reduced by .7% for each
full month (up to 12) by which the date of commencement
precedes the Participant's Normal Retirement Date, and .6833%
for each additional full month (if any) by which the date of
commencement precedes the Participant's Normal Retirement Date.
(3) FORM AND DURATION OF PAYMENT. The Pre-Retirement Death Benefit
shall be a monthly benefit payable from the time of
commencement set forth in paragraph (2) of this Section (a)
until the first day of the month in which occurs the earlier of
the surviving Spouse's death or remarriage.
(b) POST-RETIREMENT DEATH BENEFIT
(1) QUALIFICATION FOR BENEFIT. Upon the death of a Participant who
is receiving Supplemental Retirement Benefits or who has
qualified for a Disability Benefit, but who has not yet
commenced receiving such 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 (or, in the
case of the death of a Participant entitled to a Disability
Benefit, would have been receiving had he commenced receiving
the benefit at the time of his death).
(3) COMMENCEMENT, FORM AND DURATION OF PAYMENT. The Post-
Retirement Death Benefit shall commence as of the first day of
the month immediately following the date of the Participant's
death, and shall continue to be paid as of the first day of
each month thereafter until the first day of the month in which
occurs the earlier of the surviving Spouse's death or
remarriage.
(c) MINIMUM DEATH BENEFIT
(1) 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 or
remarriage, if earlier. If the surviving Spouse is not
remarried at her death and has not received at least five years
of monthly benefit payments, 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 Spouse's estate. If Benefits under Section (a) cease or
are not payable because the surviving Spouse is remarried, the
five years' minimum number of payments shall also cease and no
longer apply. If it is determined by the Board of Directors (in
its sole discretion) that the remaining benefits shall be paid
in a
single sum, this amount will be computed as noted in
subsection (4) below.
(2) POST-RETIREMENT SURVIVING SPOUSE BENEFIT. As provided in
Section (b) hereof, at the death of a Participant who is
receiving benefits, satisfies the requirements and has an
eligible surviving Spouse, monthly death benefits are payable
to this eligible surviving Spouse for her remaining lifetime,
or remarriage, if earlier. 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. If the
Spouse is the last survivor and is remarried, the benefits
under this five year minimum payment of benefits shall also
cease and no longer apply. If it is determined by the Board of
Directors (in its sole discretion) that the remaining benefits
shall be paid in a single sum, this amount will be computed as
noted in subsection (4) below.
(3) PRE-RETIREMENT AND POST-RETIREMENT DEATH BENEFIT WITH NO
SPOUSE. Notwithstanding the other sections of Article XI, a
death benefit will be payable at the death of a Participant who
is otherwise eligible under Sections (a) and (b) above, but has
no surviving Spouse (or has no eligible surviving Spouse) at
his death. The monthly death benefit will be determined and
start as if the Participant has a surviving Spouse and will be
paid to a Beneficiary, named by the Participant, as provided in
Sections (a) and (b) above. 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 Participant's estate. The Board of Directors (in its sole
discretion) shall determine if the remaining payments shall be
payable in a single sum amount. This amount would be computed
as noted in subsection (4) below.
(4) DETERMINATION OF SINGLE SUM DEATH BENEFIT VALUE. If decided by
the Board of Directors (in its sole discretion) that a single
sum amount shall be payable under the five year minimum
payments provisions of (c)(1), (c)(2) or (c)(3) above, it will
have the single sum amount determined actuarially, based on the
circumstances of the benefits. Where appropriate, the GAM83
Mortality Table, 7-1/2% interest, ages of the Participant
and/or Spouse, and the timing of the payment of benefits will
be used. The single sum value will be equal to the present
value of the immediate or deferred payment recognizing the
remainder of any five year number of payments due. The Board
of Directors (in its sole discretion) does have the option of
changing these assumptions, if they are deemed inappropriate
and unreasonable at the time the single sum amount is
determined.
The Company shall be responsible for the general administration of the Plan and for carrying out the provisions hereof. The Company shall have any and all power and authority (including discretion with respect to the exercise of that power and authority) which shall be necessary, advisable, desirable or convenient to enable it to carry out its duties under the Plan, including the powers: to resolve all
questions arising under the Plan, such as questions of construction and interpretation; to adopt such rules and regulations as the Company may deem necessary or appropriate to provide for the administration of the Plan; to delegate such of its responsibilities and authorities hereunder to such individuals, committees or entities as the Company shall deem appropriate; and to take such further actions as the Company shall deem advisable in the administration of the Plan. The decision of the Company on any question concerning the interpretation or administration of this Plan shall be final and conclusive and nothing in the Plan shall be deemed to give a Participant, his surviving Spouse or other beneficiaries, or his or their legal representatives, any right to payments except to such extent, if any, as the Company may have determined subject to all the terms and conditions of the Plan. No member of the Board or the Committee, nor any individual, committee or entity to which any of the responsibilities or authority of the Committee or the Company hereunder are delegated, shall be liable for any act or determination made, in good faith, in regard to this Plan.
(a) FUNDING. The entire cost of the Plan shall be paid from the general assets of one or more of the Employers. It is the intent of the Employers to so pay benefits under the Plan as they become due. Nothing contained herein shall be deemed to create a lien in favor of any Participant or Spouse on the assets of the Company or any other Employer. With respect to the Supplemental Retirement Benefits provided hereunder, each Participant and Spouse shall have the status of a general unsecured creditor of the Company and any other Employer. 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 Company's sole
and absolute judgement, may be paid to or expended for the benefit of
the Terminated Participant, 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 Participant's surviving Spouse or, if none, to the Terminated Participant's then living descendants, including adopted children, per stirpes.
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 text 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, distributees, executors, administrators or other legal
representatives.
(h) AMENDMENT AND DISCONTINUANCE. The Company reserves the right in its
sole discretion to amend or terminate this Plan at any time
with regard to itself or any Employer, provided that no such amendment
or termination shall affect any benefits then being paid to
Participants or Spouses under the Plan as of the date of such
termination and the rights of or with respect to all other Participants
at the time of any such termination to immediate or deferred
Supplemental Retirement Benefits shall be determined as if the
employment of each such Participant had been involuntarily terminated,
but not Terminated for Cause, on the date of such termination. After
any termination of the Plan, each Employer shall remain obligated to
pay those benefits described in the preceding sentence in accordance
with the terms of the Plan in effect immediately before such
termination.
(i) 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.
IN WITNESS WHEREOF, this Diebold, Incorporated Supplemental Employee Retirement Plan has been executed this 2nd day of May, 1994, effective as of January 1, 1994.
DIEBOLD, INCORPORATED
By: Charles B. Scheurer
Title: Vice President,
Human Resources
By: Gerald F. Morris
Title: Executive Vice President
and Chief Financial Officer
EXHIBIT 21
LIST OF SIGNIFICANT SUBSIDIARIES
The following are the significant subsidiaries of the Registrant included in the Registrant's consolidated financial statements at
December 31, 1994. Other subsidiaries are not listed because such subsidiaries are inactive and in the aggregate are not
considered to constitute a significant subsidiary.
Jurisdiction Percent of voting
under which securities owned
organized by Registrant
------------ -----------------
InterBold New York 70% (1)
Diebold Holding Company, Inc. Delaware 100%
The Diebold Company of Canada Limited Canada 100%
Diebold of Nevada, Inc. Nevada 100%
Diebold Investment Company Delaware 100%
DBD Investment Management Company Delaware 100%
VDM Holding Company, Inc. Delaware 100%
Diebold Foreign Sales Corporation St. Thomas, U.S. Virgin Islands 100% (2)
Diebold Credit Corporation Delaware 100%
Diebold Finance Company, Inc. Delaware 100% (2)
Diebold International Limited United Kingdom 100%
Diebold Pacific, Limited Hong Kong 100%
InterBold Pacific Limited Hong Kong 70% (3)
InterBold Germany GmbH Germany 70% (3)
Interbold Technologies, Inc. Delaware 70% (3)
ATM Finance, Inc. Ohio 100%
Diebold Mexico Holding Company, Inc. Delaware 100%
Diebold Latin America Holding Company, Inc. Delaware 100%
Diebold Mexico, S.A. de C.V. Mexico 100% (4)
DBD Resource Leasing, S.A. de C.V. Mexico 100% (5)
China Diebold Financial Equipment Company LTD. (China) Peoples Republic of China 65% (6)
Central Security Systems, Inc. Hawaii 100%
MedSelect Systems, Inc. Delaware 100%
(1) 70% of partnership interest is owned by Diebold Holding Company, Inc. which is 100% owned by the Registrant.
(2) 100% of voting securities are owned by Diebold Investment Company which is owned 100% by the Registrant.
(3) 100% of voting securities are owned by InterBold which is 70% owned by Diebold Holding Company, Inc.; Diebold Holding Company,
Inc. is 100% owned by the Registrant.
(4) 100% of voting securities are owned by Diebold Mexico Holding Company, Inc.
(5) 100% of voting securities are owned by Diebold Mexico, S.A. de C.V. which is 100% owned by Diebold Mexico Holding Company, Inc.
(6) 65% of voting securities are owned by the Registrant.
|
EXHIBIT 23
The Board of Directors
Diebold, Incorporated
We consent to incorporation by reference in the Registration Statements (Nos. 2-44467, 2-92107, 33-32960, 33-39988, 33-55452, 33-54677 and 33-54675) on Form S-8 of Diebold, Incorporated of our report dated January 18, 1995 relating to the consolidated balance sheets of Diebold, Incorporated and Subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of income, shareholders' equity and cash flows and related schedules for each of the years in the three-year period ended December 31, 1994, which report appears in the December 31, 1994 annual report on Form 10-K of Diebold, Incorporated.
Our report refers to changes to adopt the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" and Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" in 1992.
/s/KPMG Peat Marwick LLP KPMG PEAT MARWICK LLP Cleveland, Ohio March 9, 1995 |
EXHIBIT 24
KNOW ALL MEN BY THESE PRESENTS, That the undersigned directors of Diebold, Incorporated, a corporation organized and existing under the laws of the State of Ohio, do for themselves and not for another, constitute and appoint Warren W. Dettinger, Charee Francis-Vogelsang or Gerald F. Morris, or any one of them, a true and lawful attorney in fact in their names, place and stead, to sign their names to the report on Form 10-K for the year ended December 31, 1994, or to any and all amendments to such reports, and to cause the same to be filed with the Securities and Exchange Commission; it being intended to give and grant unto said attorneys in fact and each of them full power and authority to do and perform any act and thing necessary and proper to be done in the premises as fully and to all intents and purposes as the undersigned by themselves could do if personally present. The undersigned directors ratify and confirm all that said attorneys in fact or either of them shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the date set opposite their signature.
Signed in the presence of: Signature Date
--------- ----
/s/Charee Francis-Vogelsang /s/Donald R. Gant March 9, 1995
- -------------------------------------- ---------------------------------- -------------
Donald R. Gant, Director
/s/Charee Francis-Vogelsang /s/Raymond Koontz March 9, 1995
- -------------------------------------- ---------------------------------- -------------
Raymond Koontz, Director
/s/ Charee Francis-Vogelsang /s/John N. Lauer March 9, 1995
- -------------------------------------- ---------------------------------- -------------
John N. Lauer, Director
/s/Charee Francis-Vogelsang /s/William F. Massy March 9, 1995
- -------------------------------------- ---------------------------------- -------------
William F. Massy, Director
|
| ARTICLE 5 |
| MULTIPLIER: 1,000 |
| CURRENCY: U.S. DOLLARS |
| PERIOD TYPE | YEAR |
| FISCAL YEAR END | DEC 31 1994 |
| PERIOD START | JAN 01 1994 |
| PERIOD END | DEC 31 1994 |
| EXCHANGE RATE | 1 |
| CASH | 17,285 |
| SECURITIES | 38,400 |
| RECEIVABLES | 153,107 |
| ALLOWANCES | 0 |
| INVENTORY | 85,543 |
| CURRENT ASSETS | 326,089 |
| PP&E | 152,314 |
| DEPRECIATION | 87,601 |
| TOTAL ASSETS | 661,883 |
| CURRENT LIABILITIES | 155,464 |
| BONDS | 0 |
| COMMON | 38,144 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| OTHER SE | 421,075 |
| TOTAL LIABILITY AND EQUITY | 661,883 |
| SALES | 479,314 |
| TOTAL REVENUES | 760,171 |
| CGS | 311,790 |
| TOTAL COSTS | 504,489 |
| OTHER EXPENSES | 164,908 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 0 |
| INCOME PRETAX | 93,978 |
| INCOME TAX | 30,467 |
| INCOME CONTINUING | 63,511 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 63,511 |
| EPS PRIMARY | 2.09 |
| EPS DILUTED | 2.09 |