Exhibit 10.22
Nonqualified Stock Option Agreement
Date of Grant:                        ,         
     WHEREAS, [Associate] (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 February 14, 2007 (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 the on Date of Grant, of an option pursuant to the Corporation’s 1991
Equity and Performance Incentive Plan (As Amended and Restated as of
February 15, 2006) (the “Plan”) to purchase [as specified in award letter]
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 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,

 

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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 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

 

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     (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 subsection (A) hereof;
          (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

 

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          (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(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 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,

 

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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 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.

 

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     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.

 

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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:                                         
      [Associate Name]    

     Executed in the name and on behalf of the Corporation at North Canton,
Ohio, as of the           th day of                        ,         .

     
 
  DIEBOLD, INCORPORATED
 
   
 
   
 
   
 
  [Name]
 
  [Title]