Nonqualified Stock Option Agreement Date of Grant: __________
Exhibit 10.1
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 (hereinafter called the
“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 _________ (the “Date of Grant”); and
WHEREAS, the option evidenced 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 confirms to the Optionee the grant, effective on the
Date of Grant, of an option pursuant to the Corporation’s 1991 Equity and Performance Incentive
Plan (As Amended and Restated as of April 13, 2009) (the
“Plan”) to purchase _________ Common
Shares of the Corporation at a price of
_________ per share (which represents the closing price of
Common Shares 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. To the extent exercisable, this option may
be exercised in whole or in 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 and
prior to the termination of the option (i) a “Change in Control” shall occur after the Date of
Grant and (ii) within two (2) years following the “Change in Control” the Optionee’s employment
with the Corporation or a Subsidiary is terminated by the Optionee as a “Termination for Good
Cause” or the Optionee is terminated by the Corporation other than as a “Termination for Cause.”
Notwithstanding anything in this paragraph (B) to the contrary, in connection with a Business
Combination (as defined below) the result of which is that the Corporation Common Stock and Voting
Stock is exchanged for or becomes exchangeable for securities of another entity, cash or a
combination thereof, if the entity resulting from such Business Combination does not assume the
option evidenced hereby and the Corporation’s obligations hereunder, or replace the option
evidenced hereby with a substantially equivalent security of the entity resulting from such
Business Combination, then the option evidenced
hereby shall become immediately exercisable in full as of immediately prior to such Business
Combination.
(C) “Termination for Good Cause” shall mean the Optionee’s termination of the Optionee’s
employment with the Corporation or a Subsidiary as a result of the occurrence of any of the
following:
(i) a change in the Optionee’s principal location of employment that is greater than
fifty (50) miles from its location as of the date hereof without the Optionee’s consent;
provided, however, that the Optionee hereby acknowledges that the Optionee may be required
to engage in travel in connection with the performance of the Optionee’s duties hereunder
and that such travel shall not constitute a change in the Optionee’s principal location of
employment for purposes hereof;
(ii) a material diminution in the Optionee’s base compensation;
(iii) a change in the Optionee’s position with the Corporation without the Optionee’s
consent such that there is a material diminution in the Optionee’s authority, duties or
responsibilities; or
(iv) any other action or inaction that constitutes a material breach by the
Corporation of the agreement under which the Optionee provides services.
Notwithstanding the foregoing, the Optionee’s termination of the Optionee’s employment with the
Corporation as a result of the occurrence of any of the foregoing shall not constitute a
“Termination for Good Cause” unless (a) the Optionee gives the Corporation written notice of such
occurrence within ninety (90) days of such occurrence and such occurrence is not cured by the
Corporation within thirty (30) days of the date on which such written notice is received by the
Corporation and (b) the Optionee actually terminates his or her employment with the Corporation
prior to the three hundred sixty-fifth
(365th) day following such occurrence.
(D) 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 30% 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(D); or
(ii) Individuals who, as of the date hereof, constitute the Board (as modified by
this subsection (ii), the “Incumbent Board”) cease for any reason (other than death or
disability) to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or nomination
for election by the 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 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 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.
(E) 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’s employment with the Corporation or a Subsidiary should
terminate on or after the date on which the Optionee attains age 65 and on such date the
Optionee shall have completed five (5) or more years of continuous employment with the
Corporation and its Subsidiaries, 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 a termination covered by Section 4(C) below;
(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, or if the same occurs within the ninety (90) day
period referred to in Section 4(A);
(C) Five (5) years after the Optionee ceases to be an associate of the Corporation or a
Subsidiary or ten (10) years from the Date of Grant, whichever occurs sooner, if the sum of the
Optionee’s age and the number of the Optionee’s years of continuous employment with the Corporation
and its Subsidiaries on such date equals or exceeds 70;
(D) Ten (10) years from the Date of Grant; or
(E) 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(E)(ii)) 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:
(A) 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 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.
(B) Soliciting any employee of the Corporation or a Subsidiary to terminate his or her
employment with the Corporation or a Subsidiary.
(C) 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.
(D) 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 Corporation or any Subsidiary
or the failure or refusal to do anything reasonably necessary to enable the Corporation or any
Subsidiary to secure a patent where appropriate in the United States and in other countries.
(E) Activity that results in Termination for Cause. For the purposes of this Section 6 and
Section 1(B), “Termination for Cause” shall mean a termination:
(i) due to the Optionee’s willful and continuous gross neglect of his or her duties
for which he or she is employed; or
(ii) 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 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 the 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. For the purposes of this
Agreement, 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.
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.
The undersigned Optionee hereby accepts the Option Rights granted pursuant to this Agreement
on the terms and conditions set forth herein.
Dated: |
||||||
Executed in the name and on behalf of the Corporation at North Canton, Ohio, as of the _________
day of _________.
DIEBOLD, INCORPORATED
[name of signatory]
[title of signatory]
[title of signatory]
