[DIEBOLD LOGO]
EXHIBIT 10.1
[No. 11, Std. U.S. & Intl. 2004]
NONQUALIFIED STOCK OPTION AGREEMENT
DATE OF GRANT: _______________
WHEREAS, _________________ (hereinafter called the "Optionee") is a
key associate of Diebold, Incorporated (hereinafter called the
"Corporation") or a Subsidiary; and
WHEREAS, the execution of a Nonqualified Stock Option Agreement
substantially in the form hereof has been authorized by a resolution of
the Compensation Committee (the "Committee") of the Board of Directors of
the Corporation (the "Board") duly adopted on ____________, 20___; and
WHEREAS, the option granted hereby is intended as a nonqualified
stock option and shall not be treated as an "incentive stock option" (an
"ISO") within the meaning of that term under Section 422 of the Internal
Revenue Code of 1986, as amended.
NOW, THEREFORE, the Corporation hereby grants to the Optionee,
effective as of ___________, 20___ (the "Date of Grant"), an option
pursuant to the Corporation's 1991 Equity and Performance Incentive Plan
(As Amended and Restated as of February 7, 2001), and as further amended
by Amendments No. 1 and No. 2 (the "Plan") to purchase _________ Common
Shares of the Corporation at a price of $______ per share (which
represents the Fair Market Value on the Date of Grant) (the "Option
Price"), and agrees to cause certificates for any shares purchased
hereunder to be delivered to the Optionee upon payment of the Option Price
in full, all subject, however, to the terms and conditions of the Plan and
the terms and conditions hereinafter set forth.
1. (A) This option (until terminated as hereinafter provided) shall
be exercisable only to the extent of __________ (_____) of the shares
hereinabove specified after the Optionee shall have been in the continuous
employ of the Corporation or any Subsidiary for one (1) full year from the
Date of Grant and to the extent of an additional __________ (____) of such
shares after each of the next ______ (__) successive full years thereafter
during which the Optionee shall have been in the continuous employ of the
Corporation or any Subsidiary. For the purposes of this paragraph, leaves
of absence approved by the Chief Executive Officer of the Corporation for
illness, military or governmental service, or other cause, shall be
considered as employment. To the extent exercisable, this option may be
exercised in whole or part from time to time.
(B) Notwithstanding the provisions of paragraph (A) above, the
option granted hereby shall become immediately exercisable in full if at
any time during the employment of the Optionee, a "Change in Control"
shall occur. A "Change in Control" shall be deemed to have occurred if any
of the following events shall occur:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 15% or more of either: (A)
the then-outstanding shares of common stock of the Corporation (the
"Corporation Common Stock") or (B) the combined voting power of the
then-outstanding voting securities of the Corporation entitled to
vote generally in the election of directors ("Voting Stock");
provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control: (1)
any acquisition directly from the Corporation, (2) any acquisition
by the Corporation, (3) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Corporation or any
Subsidiary of the Corporation, or (4) any acquisition by any Person
pursuant to a transaction which complies with clauses (A), (B) and
(C) of subsection (iii) of this Section 1(b); or
(ii) Individuals who, as of the date hereof, constitute the
Board cease for any reason (other than death or disability) to
constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Corporation's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (either by a specific
vote or by approval of the proxy statement of the Corporation in
which such person is named as a nominee for director, without
objection to such nomination) shall be considered as though such
individual were a member of the Incumbent Board, but excluding for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest
(within the meaning of Rule 14a-11 of the Exchange Act) with respect
to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially
all of the assets of the Corporation (a "Business Combination"), in
each case, unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Corporation Common Stock and
Voting Stock immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of,
respectively, the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more
subsidiaries) in substantially the same proportions relative to each
other as their ownership, immediately prior to such Business
Combination, of the Corporation Common Stock and Voting Stock of the
Corporation, as the case may be, (B) no Person (excluding any entity
resulting from such Business Combination or any employee benefit
plan (or related trust) sponsored or maintained by the Corporation
or such entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 15% or more of,
respectively, the then-outstanding shares of common stock of the
entity resulting from such Business Combination, or the combined
voting power of the then-outstanding voting securities of such
corporation except to the extent that such ownership existed prior
to the Business Combination and (C) at least a majority of
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the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the
action of the Board providing for such Business Combination; or
(iv) Approval by the shareholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
(C) Notwithstanding paragraph (A) above
(i) If the Optionee should die or become permanently and
totally disabled while in the employ of the Corporation or any
Subsidiary this option shall immediately become exercisable in full
and shall remain exercisable until terminated in accordance with
Section 4(B) below.
(ii) If the Optionee should retire under a retirement plan
(including, without limitation, any supplemental retirement plan) of
the Corporation or any Subsidiary at or after the earliest voluntary
retirement age provided for in any such retirement plan or should
retire at an earlier age with the consent of the Board, this option
shall immediately become exercisable in full and shall remain
exercisable until terminated in accordance with Section 4(C) below.
2. The Option Price shall be payable (A) in cash or by check
acceptable to the Corporation, (B) by actual or constructive transfer to
the Corporation of nonforfeitable, unrestricted Common Shares that have
been owned by the Optionee for more than six (6) months prior to the date
of exercise, Restricted Shares or other Common Shares that are forfeitable
or subject to restrictions on transfer, including, without limitation,
Common Shares issued pursuant to the earn out of Performance Shares or
Performance Units, or (C) by a combination of such methods of payment. The
requirement of payment in cash shall be deemed satisfied if the Optionee
shall have made arrangements satisfactory to the Corporation with a bank
or a broker who is a member of the National Association of Securities
Dealers, Inc. to sell on the exercise date a sufficient number of the
shares being purchased so that the net proceeds of the sale transaction
will at least equal the Option Price plus payment of any applicable
withholding taxes and pursuant to which the bank or broker undertakes to
deliver the full Option Price plus payment of any applicable withholding
taxes to the Corporation on a date satisfactory to the Corporation, but
not later than the date on which the sale transaction will settle in the
ordinary course of business.
3. Whenever payment of the Option Price is made in whole or in part
in any of the forms of consideration specified in Section 2(B) herein, the
Common Shares received upon exercise of the Option Rights shall be subject
to such risks of forfeiture or restrictions on transfer as may correspond
to any that apply to the consideration surrendered, but only to the extent
of the number of Restricted Shares or other Common Shares that are
forfeitable or subject to restrictions on transfer, including, without
limitation, Common Shares issued pursuant to the earn out of Performance
Shares or Performance Units surrendered.
4. This option shall terminate on the earliest of the following
dates:
(A) Ninety (90) days after the Optionee ceases to be an
associate of the Corporation or a Subsidiary, unless he or she ceases to
be such associate by reason of death or permanent total disability or by
reason of retirement under any retirement plan (including any supplemental
retirement plan) of the Corporation or a Subsidiary at or after the
earliest voluntary retirement
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age provided for in any such retirement plan or retirement at an earlier age
with the consent of the Committee (in which case all outstanding options of the
Optionee become immediately exercisable in full pursuant to Section 1(C)
herein);
(B) One (1) year after the death or permanent total disability of
the Optionee if the Optionee dies or becomes permanently and totally disabled
while an associate of the Corporation or a Subsidiary (in which case all
outstanding options of the Optionee become immediately exercisable in full
pursuant to Section 1(C) herein), or if the same occurs within the ninety (90)
day period referred to in subsection (A) hereof;
(C) Ten (10) years from the Date of Grant; or
(D) Immediately if the Optionee engages in any Detrimental Activity
(as hereinafter defined).
5. If the Optionee, either during employment by the Corporation or a
Subsidiary or within one year after termination of such employment, shall engage
in any Detrimental Activity, and the Board shall so find, and (except for any
Detrimental Activity described in Section 6(v)(B)) the Optionee shall not have
ceased all Detrimental Activity within 30 days after notice of such finding
given within one year after commencement of such Detrimental Activity, the
Optionee shall:
(A) Return to the Corporation, in exchange for payment by the
Corporation of the Option Price paid therefor, all Common Shares that the
Optionee has not disposed of that were purchased pursuant to this Agreement
within a period of one year prior to the date of the commencement of such
Detrimental Activity, and
(B) With respect to any Common Shares that the Optionee has disposed
of that were purchased pursuant to this Agreement within a period of one year
prior to the date of the commencement of such Detrimental Activity, pay to the
Corporation in cash the difference between:
(i) The Option Price paid therefor by the Optionee pursuant to this
Agreement, and
(ii) The closing price of the Common Shares on the New York Stock
Exchange on the date of such purchase (or on the last trading day prior to
such purchase, if there was no trading on the purchase date).
To the extent that such amounts are not paid to the Corporation, the Corporation
may set off the amounts so payable to it against any amounts that may be owing
from time to time by the Corporation or a Subsidiary to the Optionee, whether as
wages, deferred compensation or vacation pay or in the form of any other benefit
or for any other reason.
6. For purposes of this Agreement, the term "Detrimental Activity" shall
include:
(i) Engaging in any activity, as an employee, principal, agent, or
consultant for another entity, and in a capacity, that directly competes
with the Corporation or any Subsidiary in any actual product, service, or
business activity (or in any product, service, or business activity which
was under active development while the Optionee was employed by the
Corporation if such development is being actively pursued by the
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Corporation during the one-year period first referred to in Section
5) for which the Optionee has had any direct responsibility and
direct involvement during the last two years of his or her
employment with the Corporation or a Subsidiary, in any territory in
which the Corporation or a Subsidiary manufactures, sells, markets,
services, or installs such product or service, or engages in such
business activity.
(ii) Soliciting any employee of the Corporation or a
Subsidiary to terminate his or her employment with the Corporation
or a Subsidiary.
(iii) The disclosure to anyone outside the Corporation or a
Subsidiary, or the use in other than the Corporation or a
Subsidiary's business, without prior written authorization from the
Corporation, of any confidential, proprietary or trade secret
information or material relating to the business of the Corporation
and its Subsidiaries, acquired by the Optionee during his or her
employment with the Corporation or its Subsidiaries or while acting
as a consultant for the Corporation or its Subsidiaries thereafter.
(iv) The failure or refusal to disclose promptly and to assign
to the Corporation upon request all right, title and interest in any
invention or idea, patentable or not, made or conceived by the
Optionee during employment by the Corporation and any Subsidiary,
relating in any manner to the actual or anticipated business,
research or development work of the Company or any Subsidiary or the
failure or refusal to do anything reasonably necessary to enable the
Corporation or any Subsidiary to secure a patent where appropriate
in the United States and in other countries.
(v) Activity that results in Termination for Cause. For the
purposes of this Section, "Termination for Cause" shall mean a
termination:
(A) due to the Optionee's willful and continuous gross
neglect of his or her duties for which he or she is
employed, or
(B) due to an act of dishonesty on the part of the
Optionee constituting a felony resulting or intended to
result, directly or indirectly, in his or her gain for
personal enrichment at the expense of the Corporation or
a Subsidiary.
7. This option is not transferable by the Optionee otherwise than by
will or the laws of descent and distribution, except (so long as the
Optionee is not a director or officer of the Corporation within the
meaning of Section 16 of the Securities Exchange Act of 1934) to a fully
revocable trust of which the Optionee is treated as the owner for federal
income tax purposes.
8. This option shall not be exercisable if such exercise would
involve a violation of any applicable federal, state or other securities
law.
9. The Committee shall make such adjustments in the option price and
in the number or kind of Common Shares or other securities covered by this
option as the Committee in its sole discretion, exercised in good faith,
may determine is equitably required to prevent dilution or enlargement of
the rights of the Optionee that otherwise would result from (i) any stock
dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of the Corporation, or (ii) any merger,
consolidation, separation, reorganization or partial or complete
liquidation, or (iii) any other corporate transaction or event having an
effect similar to any of the foregoing. Moreover, in the event of any such
transaction or event, the Committee, in its
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discretion, may provide in substitution for any or all of the Option
Rights provided for herein such alternative consideration as it, in good
faith, may determine to be equitable in the circumstances.
10. If the Corporation shall be required to withhold any federal,
state, local or foreign tax in connection with exercise of this option, it
shall be a condition to such exercise that the Optionee pay or make
provision satisfactory to the Corporation for payment of all such taxes.
The Optionee may elect that all or any part of such withholding
requirement be satisfied by retention by the Corporation of a portion of
the shares purchased upon exercise of this option. If such election is
made, the shares so retained shall be credited against such withholding
requirement at the fair market value on the date of exercise. In no event,
however, shall the Corporation accept Common Shares for payment of taxes
in excess of required tax withholding rates, except that, unless otherwise
determined by the Committee at any time, the Optionee may surrender Common
Shares owned for more than 6 months to satisfy any tax obligations
resulting from any such transaction.
11. For purposes of this Agreement, the continuous employ of the
Optionee with the Corporation or a Subsidiary shall not be deemed
interrupted, and the Optionee shall not be deemed to have ceased to be an
associate of the Corporation or any Subsidiary, by reason of the transfer
of his or her employment among the Corporation and its Subsidiaries.
12. This option award is a voluntary, discretionary bonus being made
on a one-time basis and it does not constitute a commitment to make any
future awards. This option award and any payments made hereunder will not
be considered salary or other compensation for purposes of any severance
pay or similar allowance, except as otherwise required by law. Nothing in
this Agreement will give the Optionee any right to continue employment
with the Corporation or any Subsidiary, as the case may be, or interfere
in any way with the right of the Corporation or a Subsidiary to terminate
the employment of the Optionee.
13. Information about the Optionee and the Optionee's participation
in the Plan may be collected, recorded and held, used and disclosed for
any purpose related to the administration of the Plan. The Optionee
understands that such processing of this information may need to be
carried out by the Corporation and its Subsidiaries and by third party
administrators whether such persons are located within the Optionee's
country or elsewhere, including the United States of America. The Optionee
consents to the processing of information relating to the Optionee and the
Optionee's participation in the Plan in any one or more of the ways
referred to above.
14. This Agreement is subject to the terms and conditions of the
Plan. Capitalized terms used herein without definition shall have the
meanings assigned to them in the Plan.
15. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision in any other person or circumstances
shall not be affected, and the provisions so held to be invalid,
unenforceable or otherwise illegal shall be reformed to the extent (and
only to the extent) necessary to make it enforceable, valid and legal.
16. This Agreement shall be governed by and construed in accordance
with the internal substantive laws of the State of Ohio, without giving
effect to any principle of law that would result in the application of the
law of any other jurisdiction.
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The undersigned Optionee hereby accepts the Option Rights granted pursuant
to this Nonqualified Stock Option Agreement on the terms and conditions set
forth herein.
Dated:__________________ ___________________________________
[OPTIONEE NAME]
Executed in the name and on behalf of the Corporation at North Canton,
Ohio, as of the ______ day of __________, 20___.
DIEBOLD, INCORPORATED
Xxxxxx W. O'Dell
Chairman of the Board and
Chief Executive Officer
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