Exhibit 10.3

COMPROMISE AGREEMENT

Between

DIEBOLD INTERNATIONAL LIMITED

DIEBOLD, INCORPORATED

and

DANIEL JOSEPH O’BRIEN

Pacific House
70 Wellington Street
GLASGOW
G2 6SB

Telephone: 0141 248 6677
Facsimile: 0141 204 1351 / 221 1390
E-Mail: enquiries@mcgrigors.com
Web Site: http://www.mcgrigors.com

1

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT

THIS AGREEMENT is made on the            day of April 2006
between

(1)   DIEBOLD INTERNATIONAL LIMITED, a company registered in England and Wales
with registered number 02056813 and having its registered office at 21 Tudor
Street, London EC4Y 0DJ (the “Company”);

(2)   DIEBOLD, INCORPORATED, a company organised under the laws of the State of
Ohio with its principal office at 5995 Mayfair Road, Canton, Ohio 44720-8077
(the “Parent"); and

(3)   DANIEL JOSEPH O’BRIEN, residing at Flat 11, One Wyndham Court, Kirklee,
Glasgow G12 0TY (the “Employee”).

WHEREAS:

(A)   The Employee’s employment by the Company will terminate on 1 April 2006;

(B)   The parties have entered into this Agreement to record and implement the
terms upon which they have agreed to settle all outstanding claims which the
Employee has or may have arising out of or in connection with or as a
consequence of the Employee’s employment and/or its termination or otherwise
against the Company, the Parent and the Group (as defined below), its or their
respective shareholders, officers, employees or agents including in particular
those Claims (as defined below) which the Employee has intimated and/or
intimates in this Agreement;

(C)   The parties agree that the conditions regulating compromise agreements
under the Acts (as defined below) are satisfied by this Agreement.

      IT IS AGREED as follows:-

 
   
1
1.1
  DEFINITIONS AND INTERPRETATION
Definitions

In this Agreement, unless the context otherwise requires:

"the Acts” means the Employment Rights Act 1996 and the Working Time Regulations
1998;

"the Claims” means a claim in respect of:-

  (a)   unfair dismissal, wrongful dismissal or constructive dismissal,
including unlawful discrimination on the basis of age;

  (b)   unlawful deductions from wages under the Employment Rights Act 1996
(“the ERA”);

  (c)   a statutory redundancy payment;

  (d)   breach of contract;

  (e)   failure to provide or pay out any benefits under any discretionary
benefit program;

  (f)   a failure to provide a written reason for dismissal; and

  (g)   any claim under Regulation 30 of the Working Time Regulations 1998 in
particular for accrued holiday pay;

"Group” means any Person that directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with the
Parent; each of the words “control”, “controlling”, or “controlled” shall mean
ownership which is not less than 50% plus one share, or the right to elect the
majority of the Board of Directors or such other similar governing body;

"Schedule” means the schedules to this Agreement;

"Service Agreement” means the service agreement between the Company and the
Employee dated 1 January 2004;

"Restricted Shares” means the restricted shares in the Parent granted to the
Employee by the Parent prior to the Termination Date, as set forth on
Schedule 3;

"Stock Options” means the options granted to the Employee by the Parent prior to
the Termination Date over shares in the Parent, as set forth on Schedule 3;

     
1.2
  "Termination Date” means the 1st day of April 2006.
Interpretation and Construction

Save to the extent that the context or the express provisions of this Agreement
require otherwise, in this Agreement:-

  (a)   words importing the singular shall include the plural and vice versa;

  (b)   words importing any gender shall include all other genders;

  (c)   references to any statute or statutory provision (including any
subordinate legislation) include any statute or statutory provision which
amends, extends, consolidates or replaces the same, or which has been amended,
extended, consolidated or replaced by the same, and shall include any orders,
regulations, instruments or other subordinate legislation made under the
relevant statute or statutory provision;

  (d)   references to a “person” includes any individual, firm, company,
corporation, body corporate, government, state or agency of state, trust or
foundation, or any association, partnership or unincorporated body (whether or
not having separate legal personality);

  (e)   any phrase introduced by the words “including”, “include”, “in
particular” or any similar expression shall be construed as illustrative only
and shall not be construed as limiting the generality of any preceding words;

  (f)   the words “other” and “otherwise” shall not be construed eiusdem generis
with any foregoing words where a wider construction is possible.

1.3   Headings

The headings in this Agreement are included for convenience only and shall be
ignored in construing the Agreement.

2   TERMINATION OF EMPLOYMENT AND OFFICES

The employment of the Employee with the Company terminated on the Termination
Date. For the avoidance of doubt, the Employee shall pursuant to this Agreement
have resigned all offices and positions held by the Employee with the Company,
the Parent and/or the Group on the Termination Date.

3   PAYMENTS

  (a)   Subject to compliance by the Employee with the terms of this Agreement
and conditional upon receipt by the Company of this Agreement duly executed by
the Employee and delivery of the Certificate referred to in Schedule 2 duly
signed by the Employee’s solicitor, the Company will pay to the Employee the sum
of £283,680 by way of compensation in connection with the termination of the
Employee’s employment (the “Severance Payment”).

  (b)   The Severance Payment will be paid in the following amounts at the
following times:

  (i)   £141,840 within 15 calendar days of the date hereof;

  (ii)   £85,104 on or before 30 September 2006;

  (iii)   £56,736 on or before 31 March 2007.

  (c)   In the event that the Employee dies before the Severance Payment has
been paid in full the Company agrees and undertakes to pay the balance of the
Severance Payment to the Employee’s estate on the relevant payment dates
specified at Clause 3(b).

4   TAXATION

4.1   The Company and the Employee understand that £30,000 of the Severance
Payment under Clause 3 will not be subject to tax pursuant to section 401 and
403 of the Income Tax (Earnings and Pensions) Act 2003, but that the balance of
the Severance Payment shall be paid following deduction of tax and employee
national insurance contributions at the appropriate rates.

4.2   The benefits granted to the Employee pursuant to Clauses 6 and 7 should
not be taxable by way of HM Revenue and Customs concession (although should this
change, the taxation of such benefits shall be subject to Clause 4.3).

4.3   The Employee will be responsible for the payment of any tax, employee’s
national insurance contributions and similar charges (including any interest,
penalties, costs and expenses) arising in respect of any payments (other than
the payment of £30,000 made pursuant to Clause 3 and referred to in Clause 4.1)
or benefits (including the Restricted Shares and the Stock Options) under this
Agreement (“Tax”). Tax shall not include the tax and national insurance
contributions deducted by the Company in accordance with Clause 4.1. The
Employee hereby agrees to indemnify the Company, the Parent and any member of
the Group and to keep them indemnified on a continuing basis against all and any
liability for Tax that the Company, the Parent or any member of the Group may
incur as a result of the matters set forth in this Agreement. No payment of Tax
other than Tax payable pursuant to Clause 4.4 will be made to HM Revenue and
Customs or any other relevant authority without first particulars of the
proposed payment being given to the Employee so that the Employee is given the
opportunity to dispute any such payment or liability with HM Revenue and Customs
or any other relevant authority.

4.4   The Company and/or the Parent shall be entitled to deduct from any amounts
deliverable or payable in cash, shares or other property to the Employee under
this Agreement any tax, employee’s national insurance or similar charges the
Company and/or the Parent are required to make under applicable law in respect
of the Restricted Shares and the Stock Options, and in such case, the Employee
shall have no liability for Tax under Clause 4.3 for the amount of such
deduction.

5   STOCK OPTIONS AND RESTRICTED SHARES

5.1   The Parent confirms that all unvested Stock Options held by the Employee
in the Parent shall automatically vest on the date hereof and shall remain
exercisable until termination 10 years from their respective dates of grant.
Such Stock Options shall be exercisable in accordance with the terms of the
applicable plan of the Parent under which such Stock Options were granted, as
such plan may be amended in accordance with its terms.

5.2   The Parent confirms, subject to Clause 4.4, that the Restricted Shares
shall be released to the Employee on the date hereof.

6   PRIVATE MEDICAL INSURANCE

The Company shall until 31 December 2007 continue to provide for the Employee
private medical insurance on the terms and conditions provided by the Company to
its employees.

7   PAYMENT OF ACCRUED SUMS AND EXPENSES

7.1   The Company will pay the Employee any unused pro rata entitlement to
holiday which has accrued up to the Termination Date. The Employee will not
participate in any discretionary management bonus scheme nor be eligible for any
equity awards or grants in respect of any period after 1 January 2006. All sums
will be paid after deduction of tax and national insurance contributions.

7.2   The Employee will submit his final expenses claim made up to the
Termination Date, within 14 days of the date hereof. The Company will reimburse
the Employee for all expenses reasonably incurred in the proper performance of
the Employee’s duties in the usual way.

8   LEGAL COSTS

8.1   The Company will pay the reasonable legal costs incurred by the Employee
for the advice received regarding the termination of the Employee’s employment
and entering into this Agreement up to a maximum amount of £1750 plus VAT.

8.2   Payment of this sum will be made directly to the Employee’s solicitors by
the Company within 14 days of the Company receiving a VAT invoice from such
solicitor.

9   REFERENCE

The Company will provide the Employee with a reference in terms of the draft set
out in Schedule 1, subject to the Company’s right not to include any statement
that is misleading or false and the Company’s right not to give a reference in
connection with any activity that would violate Clause 12.2 of this Agreement or
Clause 16 of the Service Agreement. The Company shall, in respect of any enquiry
for a reference, promptly provide to any prospective employer of the Employee a
written reference in the agreed form and shall respond in a positive manner to
any oral enquiry in a manner consistent with the terms of that reference. Any
notification given by the Company to its employees, suppliers, or customers with
regard to the Employee’s departure from the Company will be consistent with the
terms of such reference.

10   SETTLEMENT

10.1   The Employee accepts the terms of this Agreement in full and final
settlement and discharge of all claims, demands, costs and expenses of whatever
nature in all jurisdictions whether past, present, or future and whether arising
under statute, common law, contract or otherwise and whether before an
Employment Tribunal, court or otherwise which the Employee has or may have
against the Company, the Parent, the Group or any of their shareholders,
officers, employees or agents in respect of or arising out of the Employee’s
employment, or the holding of any office with the Company, the Parent or the
Group or the termination of that employment or office including in particular,
but without limiting the general nature of this Clause 10, the Claims which,
however unjustified they may be regarded by the Company, the Parent and the
Group the Employee hereby intimates and asserts against the Company, the Parent
and the Group while at the same time acknowledging that they are not to be
pursued further, but excluding any claim:

10.1.1   in respect of the sums and benefits due to the Employee pursuant to
this Agreement;

10.1.2   for damages for latent personal injuries and/or any latent industrial
disease arising out of the course of the Employee’s employment with the Company.

11   CONFIDENTIALITY

11.1   The parties undertake to keep confidential the existence and terms of
this Agreement and that neither party will disclose the same to any other person
unless expressly authorised by the other party. The Employee may disclose the
existence and terms of this Agreement for the purposes of:

  (a)   seeking legal or accountancy or actuarial advice in relation to its
terms;

  (b)   disclosing the same to the proper authorities as required by law;

  (c)   disclosing to any actual or prospective employer that the Employee’s
employment with the Company terminated by agreement upon terms which remain
confidential; and

  (d)   disclosing the terms of this Agreement to the Employee’s spouse or
partner provided that on so doing the Employee imposes upon the Employee’s
spouse or partner a like condition of confidentiality.

The Company and the Parent may disclose the existence and terms of this
Agreement for the purposes set forth in sub-clauses (a) and (b) above.

11.2   The parties undertake not to do any act or thing that might reasonably be
expected would damage the business, interests or reputation of the other party
and will not make or publish or cause to be made or published to anyone in any
circumstances any disparaging remarks concerning the other party.

12   DELIVERY UP AND COVENANTS

12.1   The Employee will return to the Company’s premises on or before the date
hereof all books, documents, papers, data (including copies or extracts and
whether in printed or electronic format), materials, computer and peripherals
and security codes, mobile phones, credit cards or other property of or relating
to the business of the Company, the Parent, the Group or any of their clients or
suppliers.

12.2   The Employee shall continue to remain bound by the provisions of Clauses
12, 13 and 16 of the Service Agreement in accordance with the terms of such
provisions. The Termination Date hereunder shall be the Termination Date under
Clause 16 of the Service Agreement. The power of attorney granted by the
Employee under Clause 19.1 of the Service Agreement is hereby restated in this
Agreement.

13   STATUTORY COMPROMISE

The parties agree that the conditions regulating compromise agreements under
Section 203(3) of the Employment Rights Act 1996 and Regulation 35 of the
Working Time Regulations 1998 have been satisfied by this Agreement both
generally and in the following particulars:

  (a)   the Employee confirms that the Employee has received independent legal
advice on the terms and effect of this Agreement, and in particular its effect
on the Employee’s ability to pursue the Employee’s rights before an Employment
Tribunal or court;

  (b)   the said legal advice has been given to the Employee by Pamela Keys of
McGrigors whose address is Pacific House, 70 Wellington Street, Glasgow G2 6SB;
and

  (c)   the said solicitor has confirmed to the Employee that he is a qualified
solicitor holding a current practising certificate and in respect of whom there
is in force a policy of professional indemnity insurance covering the risk of a
claim against her and the said firm in respect of loss arising in consequence of
the said advice and by signing the Certificate attached to this Agreement also
confirms that she complies with the Acts.

14   GOVERNING LAW AND JURISDICTION

This Agreement is governed by the law of England and any dispute is subject to
the exclusive jurisdiction of the English courts and tribunals.

The “without prejudice” and “subject to contract” nature of this document shall
cease to apply once executed by the parties.

IN WITNESS WHEREOF this Agreement has been executed as follows:-

SIGNED for and on behalf of DIEBOLD INTERNATIONAL LIMITED

     
by
  ...................................................
Director/Secretary/Authorised Signatory

SIGNED for and on behalf of DIEBOLD, INCORPORATED

     
by
  ...................................................
Director/Secretary/Authorised Signatory

SIGNED as a Deed by the said DANIEL JOSEPH O’BRIEN

...............................................................
Daniel Joseph O’Brien

at on the day of 2006
in the presence of:-

Witness ........................................................
Full Name ........................................................
Address .............................................................
        ...........................................................................
Occupation ........................................................

2

SCHEDULE 1

AGREED REFERENCE

Danny O’Brien joined Diebold in October 2001, and served as Vice President,
Global Product Management and Engineering until his retirement from Diebold on 1
April 2006.

He was an excellent team member in Diebold’s global leadership team. Under
Danny’s vision and leadership, two new Self Service platforms were created —
Agilis and Opteva, both of which have created a solid foundation for building
our market share.

Danny is widely recognised in the industry, and we wish him the very best for
the future.

3

SCHEDULE 2

CERTIFICATE OF INDEPENDENT LEGAL ADVISER

I, Pamela Keys of McGrigors whose address is Pacific House, 70 Wellington
Street, Glasgow G2 6SB confirm that I gave independent legal advice to Daniel
Joseph O’Brien as to the terms and effect of the Agreement to which this
certificate is attached and in particular its effect on the Employee’s ability
to pursue the Employee’s rights before a Court or Employment Tribunal.

I confirm that I am a solicitor holding a current practising certificate and
that the statutory requirements relating to compromise agreements set out in the
Acts (as defined in the Agreement) have been met. Further, that there was in
force at the time I gave the advice referred to above a policy of insurance
covering the risk of a claim by Daniel Joseph O’Brien in respect of any loss
arising in consequence of that advice.

Signed ............................................

Dated .............................................

4

SCHEDULE 3

RESTRICTED SHARES AND STOCK OPTIONS

See attached, with the following amendments:

The columns marked “Vested” and “Exercisable” in the Stock Option table shall
show the full amount of all grants as being Vested and Exercisable. The column
marked “Unvested” shall be “0” for all grants.

                 
Personnel Grant Status Di
  ebold, Incorporated
ID: 34-0183970
Canton, Ohio 44711   Pag   e 1  
File: Optstmt
Date: 5/1/2006
Time: 12:01:02 PM
 
               
AS OF 5/1/2006
 
 
 
 

 
               
Daniel O’Brien
Flat 11 – One Wyndham Court
  ID: 0E06000074
Termination Date:  
4/1/2006  

 

Kirklee
Glasgow, Scotland, UK G120TY

STOCK OPTIONS

                                                                               
          Number   Grant Date   Plan   Type   Granted   Price   Exercised  
Vested   Cancelled   Unvested   Outstanding   Exercisable 002262   10/1/2001  
1991   NQ   15,000.00   $37.24   0.00   15,000.00   0.00   0.00   15,000.00  
15,000.00
002472
    2/6/2002       1991     NQ
    12,000.00     $ 36.59       0.00       12,000.00       0.00       0.00      
12,000.00       12,000.00  
002706
    2/5/2003       1991     NQ
    12,000.00     $ 36.31       0.00       12,000.00       0.00       0.00      
12,000.00       12,000.00  
003150
    2/11/2004       1991     NQ
    9,000.00     $ 53.10       0.00       9,000.00       0.00       0.00      
9,000.00       9,000.00  
003238
    2/10/2005       1991     NQ
    8,500.00     $ 55.23       0.00       8,500.00       0.00       0.00      
8,500.00       8,500.00  
 
                                                                               
       
 
                            56,500.00               0.00       56,500.00      
0.00       0.00       56,500.00       56,500.00  

Information Currently on File

 
 
Tax Rate % Option Broker Registration Alternate
Address
 

                 
Personnel Grant Status Di
  ebold, Incorporated
ID: 34-0183970
Canton, Ohio 44711   Pag   e 1  
File: Optstmt
Date: 5/1/2006
Time: 12:02:45 PM
 
               
AS OF 5/1/2006
 
 
 
 

 
               
Daniel O’Brien
Flat 11 – One Wyndham Court
  ID: 0E06000074
Termination Date:  
4/1/2006  

 

Kirklee
Glasgow, Scotland, UK G120TY

AWARDS

                                                                               
                                                                               
              Next Deferral Number   Grant Date   Plan   Type   Granted   Price
  Released   Vested   Cancelled   Unvested   Deferred   Release Date 003351  
2/11/2004   1991   RSA   5,000.00   $0.00   0.00   0.00   5,000.00   0.00   0.00
       
 
                            5,000.00               0.00       0.00      
5,000.00       0.00       0.00          

Information Currently on File

 
 
Tax Rate % Option Broker Registration Alternate
Address
 
 

5