Document:

EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (this “Agreement”), is made, entered into and effective as of June 12,
2006 (the “Effective Date”), by and between DIEBOLD, INCORPORATED (the “Company”), located at 5995
Mayfair Road, North Canton, Ohio 44720 and MICHAEL J. HILLOCK (“Hillock”), residing at 8262 Oxford
Chase Circle NW, Massillon, OH 44646.

WITNESSETH:

WHEREAS, Hillock is President, Diebold International;

WHEREAS, Hillock has determined that, on December 31, 2006 (the “Retirement Date“), he shall
resign from any and all offices of the Company, and any other position, office or directorship of
any other entity for which Hillock was serving at the request of the Company, and, in addition,
shall resign and retire from his employment with the Company; and

WHEREAS, the Company accepts Hillock’s resignations and retirement as of the date referenced
above; and

WHEREAS, the Company and Hillock desire to set forth the payments and benefits that Hillock
will be entitled to receive from the Company in connection with the cessation of his employment
with the Company; and

WHEREAS, the Company and Hillock wish to resolve, settle and/or compromise certain matters,
claims and issues between them, including, without limitation, Hillock’s resignation from the
offices he held and from his employment with the Company.

NOW, THEREFORE, in consideration of the promises and agreements contained herein and other
good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and
intending to be legally bound, the Company and Hillock hereby agree as follows:

1. Resignation. Hillock hereby resigns, effective on the Retirement Date, his position
as President, Diebold International. Hillock further resigns, effective on the Retirement Date:
(a) from all other offices of the Company to which he has been elected by the Board of Directors of
the Company (or to which he has otherwise been appointed), (b) from all offices of any entity that
is a subsidiary of, or is otherwise related to or affiliated with, the Company, (c) from all
administrative, fiduciary or other positions he may hold with respect to arrangements or plans for,
of or relating to the Company, and (d) from any other directorship, office, or position of any
corporation, partnership, joint venture, trust or other enterprise (each, an “Other Entity”)
insofar as Hillock is serving in the directorship, office, or position of the Other Entity at the
request of the Company. Hillock further resigns and retires, effective the Retirement Date, from
his employment with the Company, and its subsidiaries and related or affiliated companies. The
Company hereby consents to and accepts said resignations. Hillock agrees and understands that the
Company may, in its sole discretion, reassign Hillock or place him on paid leave prior to December
31, 2006 should the Company determine same to be appropriate. In such event, Hillock will retire
effective on the Retirement Date.

2. Additional Compensation and Benefits. In consideration of the promises made by Hillock
in this Agreement and subject to the conditions hereof, the Company agrees to the following:

a. Severance Payment. Hillock will be entitled to receive severance payments as
follows: (i) on the six-month anniversary of the Retirement Date (the “Initial Payment Date”),
Hillock will be paid a lump sum amount equal to six times his regular base monthly salary as of the
Retirement Date; and (ii) following the Initial Payment Date and for a period of twelve months,
Hillock will continue to receive, in accordance with the Company’s regular payroll practices, an
amount equivalent to 100% of his regular base salary as of the Retirement Date in semi-monthly
payments, via direct deposit account.

b. Deferred Compensation. Any amounts held for and on behalf of Hillock under the
Amended and Restated 1992 Deferred Incentive Compensation Plan for Diebold, Incorporated or the
2005 Deferred Incentive Compensation Plan for Diebold, Incorporated, shall be distributed according
to the terms and conditions of said Plans and shall be based on the termination of his employment
as of the Retirement Date; provided, however, that the initial payment will be made on the Initial
Payment Date. Any amounts paid hereunder shall be subject to applicable payroll tax deductions.

c. Stock Options and Restricted Stock Units. In 2006, Hillock shall be granted an
option to purchase 6,000 common shares of the Company at a price equal to the fair market value of
the Company’s common shares on the date of the grant. In 2006, Hillock shall also be granted 500
restricted stock units (“RSUs”). Hillock shall not be eligible for any other additional grants of
stock options or restricted stock units (“RSUs”). Hillock’s rights with respect to stock options
and RSUs granted to him prior to the Retirement Date shall be governed by the terms and conditions
of the Company’s 1991 Equity and Performance Incentive Plan (As Amended and Restated as of February
15, 2006) (the “1991 Plan”), based on his retirement as of the Retirement Date. Any compensation
paid to Hillock with respect to stock options and RSUs will be subject to applicable payroll tax
deductions.

d. Long Term Executive Incentive Plan. Subject to the applicable Performance Share
Agreement, Hillock shall remain eligible to receive additional compensation under the 1991 Plan as
follows: (i) he shall be eligible to receive that amount that would be payable to him under the
2004-2006 Performance Share Agreement; (ii) he shall remain eligible for 66.66 % of that amount
that would be payable to him under the 2005-2007 Performance Share Agreement; and (iii) he shall
remain eligible for 33.33 % of that amount that would be payable to him under the 2006-2008
Performance Share Agreement. For the 2006-2008 Performance Share Agreement, the target number of
performance shares for which Hillock may be eligible is 3,333. Any amounts paid hereunder shall be
subject to applicable payroll tax deductions. Hillock shall not be eligible for any performance
share awards for any subsequent periods.

e. Annual Incentive Plan. Hillock shall be eligible to participate in the Annual
Incentive Plan portion of the Executive Incentive Program applicable to him, subject to the terms
and conditions of that plan. If any bonus is earned, the percentage to be paid under such plan
(threshold, plan, or maximum) will be determined by the Company’s performance for fiscal year end
2006. Hillock shall not be eligible for participation in the Annual Incentive Plan portion of the
Executive Incentive Program after the 2006 bonus period.

f. Medical Coverage. From the Retirement Date until a Date eighteen months after the
Initial Payment Date (the “Severance Period”), Hillock will be allowed to continue as a plan
participant in the Diebold, Incorporated Associate Health Care Plan (the “Health Plan”), subject to
the terms and conditions of the Health Plan, including, but not limited to, timely payment of any
employee contributions necessary to maintain participation. During the eighteen months immediately
following the Severance Period, Hillock will be entitled to an additional eighteen months of
continued coverage under the Health Care Plan pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended (“COBRA”), at the then-prevailing COBRA rates. Hillock will
continue to be eligible for the Company-paid annual executive physical program through 2007.

g. Split Dollar Agreement. At the Retirement Date, Hillock will have no further
interest in or entitlement to any benefits under any Split Dollar Agreement that was provided by
the Company.

h. Country Club Membership. At the Retirement Date, Diebold shall grant to Hillock
the Diebold Brookside Country Club membership stock certificate currently in his possession,
subject to applicable payroll taxes.

i. Automobile. At the Retirement Date, Hillock shall either (i) return the
Company-provided vehicle to the Company, or (ii) purchase said vehicle as is for $3,748.26, payable
in full at the Retirement Date, plus sales tax based on fair market value as of date of sale.

j. Professional Fees. The Company and Hillock acknowledge and agree that each shall
be responsible for the payment of their respective legal fees and costs (and related disbursements)
incurred in connection with Hillock’s resignation and all matters relating to the negotiation and
execution of the releases, employment terms and all other matters covered by this Agreement.

k. Financial Services. Hillock shall continue to receive those financial advisory and
taxation services that, prior to the Effective Date, were provided to him at the Company’s expense
through 2007, and shall not be entitled to receive such services at the Company’s expense after
2007.

l. Outplacement Services. Diebold will pay Hillock $5,000.00 to be used at his
discretion.

m. Retirement and 401(k) Plans. Hillock’s post-Retirement Date eligibility for
benefits, if any, as a past employee of the Company under the Company’s Retirement Plan for
Salaried Employees, 401(k) Savings Plan, and Supplemental Employee Retirement Plan (collectively,
“Retirement Plans”) shall be as set forth in the respective Retirement Plan documents and shall be
based on the involuntary termination of his employment as of the Retirement Date.

n. Business Expenses. As of the Retirement Date, Hillock will promptly pay any
balance due on any Company credit card or other account used by him. The Company will either
(i) reimburse Hillock for any pending, reasonable business-related credit card charge for which
Hillock has not already been reimbursed provided Hillock files a proper Travel and Expense Report,
or (ii) pay such charge directly to the card-issuing bank. Hillock hereby authorizes the Company
to deduct from monies due Hillock under this Agreement any balance remaining on Hillock’s Company
credit card account after such (i) reimbursement or (ii) direct payment.

o. Other Compensation and Benefits. Except as specifically set forth herein, no other
compensation or benefits are due Hillock.

3. Non-Competition.

a. From the Retirement Date and continuing until twelve months after the end of the Severance
Period (the “Restricted Period”), Hillock shall not, directly or indirectly, do or suffer to be
done any of the following: own, manage, control or participate in the ownership, management, or
control of, or be employed or engaged by or otherwise affiliated or associated as a consultant,
independent contractor or otherwise with any other corporation, partnership, proprietorship, firm,
association, or other business entity, or otherwise engage in any business, which is in competition
with the Company’s business; provided, however, that the ownership of not more than one percent of
any class of publicly-traded securities of any entity shall not be deemed a violation of this
Paragraph 3. For purposes of this Agreement, the “Company’s business” shall mean any business in
which the Company actively engages now or until the end of the Severance Period, and any business
in which the Company has actively engaged in the two (2) year period prior to the date hereof,
including, without limitation, the design, manufacture, assembly, distribution, sale, service or
maintenance of those products listed in Exhibit A.

b. In the event Hillock shall violate any provision of this Paragraph 3 as to which there is a
specific time period during which he is prohibited from taking certain actions or from engaging in
certain activities as set forth in such provision, then, in such event, such violation shall toll
the running of such time period from the date of such violation until such violation shall cease.
The foregoing shall in no way limit the Company’s rights under Paragraph 8 of this Agreement.

c. Hillock has carefully considered the nature and extent of the restrictions upon him and the
rights and remedies conferred upon the Company under this Paragraph 3 and this Agreement, and
hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to
eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent
skill and experience of Hillock, would not operate as a bar to Hillock’s sole means of support, are
fully required to protect the legitimate interests of the Company and do not confer a benefit upon
the Company disproportionate to the detriment to Hillock. Hillock further acknowledges that his
obligations in this Paragraph 3 are made in consideration of, and are adequately supported by the
payments by the Company to Hillock described herein.

4. No Solicitation of Employees. During the Restricted Period, Hillock agrees that he will
not: (i) employ, assist in employing, or otherwise associate in business with any person who is,
or has been in the 12 month period prior to such individual’s association with Hillock an employee,
officer or agent of the Company, or any of its affiliated, related or subsidiary entities, unless
such employee was involuntarily terminated by the Company; or (ii) induce any person who is an
employee, officer or agent of the Company, or any of its affiliated, related, or subsidiary
entities to terminate such relationship.

5. Release by Hillock.

a. Hillock for himself and his dependents, successors, assigns, heirs, executors and
administrators (and his and their legal representatives of every kind), hereby releases, dismisses,
and forever discharges the Company from, and agrees to indemnify the Company against, any and all
arbitrations, claims (including claims for attorney’s fees), demands, damages, suits, proceedings,
actions and/or causes of action of any kind and every description, whether known or unknown, which
Hillock now has or may have had for, upon, or by reason of any cause whatsoever (except that this
release shall not apply to the obligations of the Company arising under this Agreement), against
the Company (“Claims”), including but not limited to:

(i) any and all Claims, directly or indirectly, arising out of or relating to: (A) Hillock’s
employment with the Company; and (B) Hillock’s resignation as President, Diebold International and
any other position described in Paragraph 1 of this Agreement.

(ii) any and all claims of discrimination, including but not limited to claims of
discrimination on the basis of sex, race, age, national origin, marital status, religion or
disability, including, specifically, but without limiting the generality of the foregoing, any
claims under the Age Discrimination in Employment Act, as amended (the “ADEA”), Title VII of the
Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of 1990, the Family and
Medical Leave Act of 1993 and Ohio Revised Code Chapter 4112;

(iii) any and all claims of wrongful or unjust discharge or breach of any contract or promise,
express or implied; and

(iv) any and all claims under or relating to any and all employee compensation, employee
benefit, employee severance or employee incentive bonus plans and arrangements; provided that he
shall remain entitled to the amounts and benefits specified in Paragraph 2 above. Hillock agrees
that he intends to release any and all worker compensation claims he may have against the Company
by this Agreement, and further agrees to execute any documentation as may be reasonably required to
perfect such release when presented to him by the Company.

b. Hillock understands and acknowledges that the Company does not admit any violation of law,
liability or invasion of any of his rights and that any such violation, liability or invasion is
expressly denied. The consideration provided under this Agreement is made for the purpose of
settling and extinguishing all claims and rights (and every other similar or dissimilar matter)
that Hillock ever had or now may have or ever will have against the Company to the extent provided
in this Paragraph 5. Hillock further agrees and acknowledges that no representations, promises or
inducements have been made by the Company other than as appear in this Agreement.

c. Hillock further understands and acknowledges that:

(i) The release provided for in this Paragraph 5, including claims under the ADEA to and
including the date of this Agreement, is in exchange for the additional consideration provided for
in this Agreement, to which consideration he was not heretofore entitled;

(ii) He has been advised by the Company to consult with legal counsel prior to executing this
Agreement and the release provided for in this Paragraph 5, has had an opportunity to consult with
and to be advised by legal counsel of his choice, fully understands the terms of this Agreement,
and enters into this Agreement freely, voluntarily and intending to be bound;

(iii) He has been given a period of twenty-one days to review and consider the terms of this
Agreement, and the release contained herein, prior to its execution and that he may use as much of
the twenty-one day period as he desires; and

(iv) He may, within seven days after execution, revoke this Agreement. Revocation shall be
made by delivering a written notice of revocation to the Vice President, Human Resources at the
Company. For such revocation to be effective, written notice must be actually received by the Vice
President and Chief Human Resources Officer at the Company no later than the close of business on
the seventh day after Hillock executes this Agreement. If Hillock does exercise his right to
revoke this Agreement, all of the terms and conditions of the Agreement shall be of no force and
effect and the Company shall have no obligation to satisfy the terms or make any payment to Hillock
as set forth in Paragraph 2 of this Agreement.

d. Hillock will never file a lawsuit or other complaint asserting any claim that is released
in this Paragraph 5. In the event Hillock breaches this Paragraph 5.d, he agrees to indemnify the
Company against any costs or expenses, including attorney fees, that the Company may incur in
connection with such breach.

e. Hillock and the Company acknowledge that his resignation is by mutual agreement between the
Company and Hillock, and that Hillock waives and releases any claim that he has or may have to
reemployment.

f. For purposes of the above provisions of this Paragraph 5, the “Company” shall include its
predecessors, subsidiaries, divisions, related or affiliated companies, officers, directors,
stockholders, members, employees, heirs, successors, assigns, representatives, agents and counsel.

6. Confidential Information.

a. Hillock acknowledges and agrees that in the performance of his duties as an officer and
employee of the Company, he was or may be brought into frequent contact with, had or may have
access to, and/or became or may become informed of confidential and proprietary information of the
Company and/or information that is a competitive asset of the Company (collectively, “Confidential
Information”) and the disclosure of which would be harmful to the interests of the Company or its
subsidiaries. Confidential Information shall include, without limitation: (i) customer and
distributor information such as names, addresses, sales histories, purchasing habits, credit
status, pricing levels, etc., (ii) certain prospective customer and distributor information lists,
etc., (iii) product and systems specifications, schematics, designs, concepts for new or improved
products and services and other products and services data, (iv) product and material costs,
(v) suppliers’ and prospective suppliers’ names, addresses and contracts, (vi) future corporate
planning data, (vii) production methods and equipment, (viii) marketing strategies, (ix) the
Company’s financial results and business condition, (x) any of the foregoing which belong to any
other person or company but to which Hillock has had access by reason of his employment with the
Company, and (xi) any other information which constitutes a “trade secret” under federal or state
law. Such Confidential Information is more fully described in Subparagraph 6.b. Hillock
acknowledges that the Confidential Information of the Company gained by Hillock during his
association with the Company was developed by and/or for the Company through substantial
expenditure of time, effort and money and constitutes valuable and unique property of the Company.

b. Hillock will keep in strict confidence, and will not, directly or indirectly, at any time,
disclose, furnish, disseminate, make available, use or suffer to be used in any manner any
Confidential Information of the Company without limitation as to when or how Hillock may have
acquired such Confidential Information. Hillock specifically acknowledges that Confidential
Information includes any and all information, whether reduced to writing (or in a form from which
information can be obtained, translated, or derived into reasonably usable form), or maintained in
the mind or memory of Hillock and whether compiled or created by the Company, which derives
independent economic value from not being readily known to or ascertainable by proper means by
others who can obtain economic value from the disclosure or use of such information, that
reasonable efforts have been put forth by the Company to maintain the secrecy of confidential or
proprietary or trade secret information, that such information is and will remain the sole property
of the Company, and that any retention or use by Hillock of confidential or proprietary or trade
secret information after the termination of Hillock’s employment with, and performance of services
for, the Company shall constitute a misappropriation of the Company’s Confidential Information.

c. At the Retirement Date, Hillock will immediately return to the Company (to the extent he
has not already returned), equipment, software, electronic files, computers, including any laptop,
in good condition, all property of the Company, including, without limitation, property, documents
and/or all other materials (including copies, reproductions, summaries and/or analyses) which
constitute, refer or relate to Confidential Information of the Company. Hillock shall be given his
assigned cellular phone, personal computer and printer after the Company has removed all Diebold
information and data. Hillock agrees to only use any software provided hereunder in compliance
with any applicable software licenses.

d. Hillock further acknowledges that his obligation of confidentiality shall survive,
regardless of any other breach of this Agreement or any other agreement, by any party hereto, until
and unless such Confidential Information of the Company shall have become, through no fault of
Hillock generally known to the public or Hillock is required by law (after providing the Company
with notice and opportunity to contest such requirement) to make disclosure. Hillock’s obligations
under this Paragraph 6 are in addition to, and not in limitation or preemption of, all other
obligations of confidentiality which Hillock may have to the Company under general legal or
equitable principles or statutes.

7. Disclosure. From the date of this Agreement through the end of the Severance Period,
Hillock will communicate the contents of Paragraphs 4, 5, 6, 8.b, 9, and 12 of this Agreement to
any person, firm, association, or corporation other than Diebold which he intends to be employed
by, associated in business with, or represent.

8. Breach; Arbitration.

a. If Hillock breaches any of the provisions of this Agreement, then the Company may
immediately terminate all remaining payments and benefits described in this Agreement, and in
addition, the Company shall be entitled to obtain reimbursement from Hillock of all payments and
benefits already provided pursuant to Paragraph 2 of this Agreement, plus any expenses and damages
incurred as a result of the breach (including, without limitation, reasonable attorneys’ fees),
with the remainder of this Agreement, and all promises and covenants herein, remaining in full
force and effect.

(i) The Company will not terminate pursuant to Paragraph 8.a any benefits in which Hillock had
vested as of the Retirement Date under the Retirement Plans. Hillock’s COBRA rights, if any, will
not be reduced by any action taken by the Company under Paragraph 8.a.

(ii) Hillock may challenge any Company action under Paragraph 8.a.

b. The parties agree that any disputes, controversies, or claims of whatever nature arising
out of or relating to this Agreement or breach thereof shall be resolved through binding
arbitration before a mutually agreeable arbitrator or arbitrators, in accordance with the
applicable rules of the American Arbitration Association; provided, however, that the parties agree
that in the event of any alleged breach by Hillock of any of his obligations under Paragraphs 3, 4
and 6 of the Agreement, the arbitration requirements of this Paragraph 8.b shall not apply, and
that instead, the Company may elect, in its sole discretion, to seek relief in a court of general
jurisdiction in the State of Ohio, and the parties hereby consent to the exclusive jurisdiction of
such court. In addition, in connection with any such court action. Hillock acknowledges and
agrees that the remedy at law available to the Company for breach by Hillock of any of his
obligations under Paragraphs 3, 4, and 6 of this Agreement would be inadequate and that damages
flowing from such a breach would not readily be susceptible to being measured in monetary terms.
Accordingly, Hillock acknowledges, consents and agrees that, in addition to any other rights or
remedies which the Company may have at law, in equity or under this Agreement, upon adequate proof
of Hillock’s violation of any provision of Paragraphs 3, 4 or 6 of this Agreement, the Company
shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any
threatened or further breach, without the necessity of proof of actual damage.

9. Continued Availability and Cooperation.

a. Hillock shall cooperate fully with the Company and with the Company’s counsel in connection
with any present and future actual or threatened litigation or administrative proceeding involving
the Company that relates to events, occurrences or conduct occurring (or claimed to have occurred)
during the period of Hillock’s employment by the Company or during the Severance Period. This
cooperation by Hillock shall include, but not be limited to:

(i) making himself reasonably available for interviews and discussions with the Company’s
counsel as well as for depositions and trial testimony;

(ii) if depositions or trial testimony are to occur, making himself reasonably available and
cooperating in the preparation therefor as and to the extent that the Company or the Company’s
counsel reasonably requests;

(iii) refraining from impeding in any way the Company’s prosecution or defense of such
litigation or administrative proceeding; and

(iv) cooperating fully in the development and presentation of the Company’s prosecution or
defense of such litigation or administrative proceeding.

b. Hillock shall be reimbursed by the Company for reasonable travel, lodging, telephone and
similar expenses incurred in connection with such cooperation, which the Company shall reasonably
endeavor to schedule at times not conflicting with the reasonable requirements of any employer of
Hillock, or with the requirements of any third party with whom Hillock has a business relationship
permitted hereunder that provides remuneration to Hillock. Hillock shall not unreasonably withhold
his availability for such cooperation.

c. Upon the Retirement Date, Hillock will update the Company as to the status of all pending
matters for which he was responsible or otherwise involved. During the Severance Period, Hillock
will perform such services and provide such consultations as the Company shall reasonably request.

d. The Company agrees to release Hillock and indemnify and hold him harmless against all
liability or loss, and against all claims or actions, arising from or connected with his past
activities as an employee of the Company to the extent allowed and in a manner consistent with the
Company’s Code of Regulations and Ohio law. Notwithstanding the foregoing, the Company will have
no obligation to release, indemnify, hold harmless or defend Hillock for any conduct by Hillock
alleged to be intentional or willful or that arises from a violation of any statutory prohibition
unless such conduct was specifically requested by the Company. Hillock warrants that he has
disclosed to the Company all claims and circumstances and potential claims and circumstances that
may exist or could reasonably be brought against him concerning his past activities as an employee.

10. Successors and Binding Agreement.

a. This Agreement shall be binding upon and inure to the benefit of the Company and any
successor of or to the Company, including, without limitation, any persons acquiring, directly or
indirectly, all or substantially all of the business and/or assets of the Company whether by
purchase, merger, consolidation, reorganization, or otherwise (and such successor shall thereafter
be deemed included in the definition of “the Company” for purposes of this Agreement), but shall
not otherwise be assignable or delegable by the Company.

b. This Agreement shall inure to the benefit of and be enforceable by Hillock’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, and/or legatees.

c. This Agreement is personal in nature and none of the parties hereto shall, without the
consent of the other parties, assign, transfer or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Subparagraphs (a) and (b) of this Paragraph
10.

d. This Agreement is intended to be for the exclusive benefit of the parties hereto, and
except as provided in Subparagraphs (a) and (b) of this Paragraph 10, no third party shall have any
rights hereunder.

11. Non-Disclosure; Statements to Third Parties.

a. All provisions of this Agreement and the circumstances giving rise hereto are and shall
remain confidential and shall not be disclosed to any person not a party hereto (other than
(i) Hillock’s spouse, if any, (ii) each party’s attorney, financial advisor and/or tax advisor to
the extent necessary for such advisor to render appropriate legal, financial and tax advice, and
(iii) persons or entities that fall within the scope of Paragraphs 3 and 4 of this Agreement, but
only to the extent required thereby), except as necessary to carry out the provisions of this
Agreement, and except as may be required by law. Notwithstanding the foregoing, this Agreement may
be filed with or provided to the Securities and Exchange Commission or any other governmental
instrumentality or agency, including the Internal Revenue Service, if the Company deems such filing
or provision to be necessary.

b. Because the purpose of this Agreement is to settle amicably any and all potential disputes
or claims among the parties, neither Hillock nor the Company shall, directly or indirectly, make or
cause to be made any statements to any third parties criticizing or disparaging the other or
commenting on the character or business reputation of the other. Hillock further hereby agrees
not: (i) to comment to others concerning the status, plans or prospects of the business of the
Company, or (ii) to engage in any act or omission that would be detrimental, financially or
otherwise, to the Company, or that would subject the Company to public disrespect, scandal, or
ridicule. For purposes of this Subparagraph 11.b, the “Company” shall mean Diebold, Incorporated
and its directors, officers, predecessors, parents, subsidiaries, divisions, and related or
affiliated companies.

12. Notices. For all purposes of this Agreement, all communications provided for herein
shall be in writing and shall be deemed to have been duly given when delivered, addressed to the
Company (to the attention of the CEO) at its principal executive offices and to Hillock at his
principal residence, 8262 Oxford Chase Circle NW, Massillon, OH 44646, or to such other address as
any party may have furnished to the other in writing and in accordance herewith. Notices of change
of address shall be effective only upon receipt.

13. Miscellaneous. No provision of this Agreement may be modified, waived or discharged
unless such modification, waiver or discharge is agreed to in writing signed by Hillock and the
Company. No waiver by either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise, expressed or
implied with respect to the subject matter hereof have been made by any of the parties that are not
set forth expressly in this Agreement and every one of them (if, in fact, there have been any) is
hereby terminated without liability or any other legal effect whatsoever.

14. Entire Agreement. This Agreement shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and shall supersede all prior verbal or
written agreements, covenants, communications, understandings, commitments, representations or
warranties, whether oral or written, by any party hereto or any of its representatives pertaining
to such subject matter.

15. Governing Law. Any dispute, controversy, or claim of whatever nature arising out of or
relating to this Agreement or breach thereof shall be governed by and under the laws of the State
of Ohio.

16. Validity. The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this Agreement, which shall
nevertheless remain in full force and effect.

17. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the
same Agreement.

18. Captions and Paragraph Headings. Captions and paragraph headings used herein are for
convenience and are not part of this Agreement and shall not be used in construing it.

19. Further Assurances. Each party hereto shall execute such additional documents, and do
such additional things, as may reasonably be requested by the other party to effectuate the
purposes and provisions of this Agreement.

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date
first set forth above.

DIEBOLD, INCORPORATED

/s/Thomas W. Swidarski

Date: June 15, 2006

/s/Michael J. Hillock            Witness: /s/Maryann
Hoover

MICHAEL J. HILLOCK

Date: June 12, 2006EX-4.1

AMENDED AND RESTATED CREDIT AGREEMENT

This Amended and Restated Credit Agreement is entered into as of the 15th day of June, 2006,
by and between BANCINSURANCE CORPORATION, an Ohio corporation (“Borrower”) and FIFTH THIRD BANK, an
Ohio banking corporation (the “Bank”). This Agreement is an amendment and restatement of that
certain Credit Agreement between Borrower and the Bank dated January 25, 1993, as modified by the
First Amendment to Credit Agreement made and entered into to be effective November 5, 1993, as
further modified by the Second Amendment to Credit Agreement made and entered into to be effective
October 19, 1994, as further modified by the Third Amendment to Credit Agreement made and entered
into to be effective November 24, 1999, as further modified by the Fourth Amendment to Credit
Agreement made and entered into to be effective December 11, 2000, as further modified by the Fifth
Amendment to Credit Agreement made and entered into to be effective July 1, 2002, and as further
modified by the Sixth Amendment to Credit Agreement made and entered into to be effective October
20, 2003.

Section 1. Definitions.

Certain capitalized terms have the meanings set forth on Exhibit 1 hereto. All financial
terms used in this Agreement but not defined on Exhibit 1 or in the Security Agreement have the
meanings given to them by generally accepted accounting principles.

Section 2. Loans.

2.1 Revolving Credit Loans. (a) Subject to the terms and conditions hereof, the Bank
hereby extends to Borrower a line of credit facility (the “Facility”) under which the Bank will
make loans (the “Revolving Loans”) to Borrower in an aggregate amount not to exceed
$10,000,000.00. The Bank may create and maintain reserves from time to time based on such credit
considerations as the Bank may deem appropriate.

(b) Each Revolving Loan shall be made to Borrower upon receipt by the Bank of disbursement
instructions, which shall be in such form and contain such information as the Bank shall from time
to time prescribe. The Bank shall be entitled to rely on any oral, telephonic or electronic
communication requesting a Revolving Loan and/or providing disbursement instructions hereunder,
which shall be received by it in good faith from anyone reasonably believed by the Bank to be
Borrower’s authorized agent. Borrower agrees that all Revolving Loans made by the Bank will be
evidenced by entries made by the Bank into its electronic data processing system and/or internal
memoranda maintained by the Bank. Borrower further agrees that the sum or sums shown on the most
recent printout from the Bank’s electronic data processing system and/or such memoranda shall be
rebuttably presumptive evidence of the principal amount of the Revolving Loans and of the amount of
any accrued interest thereon. Each request for a Revolving Loan shall constitute a warranty and
representation by Borrower that no Event of Default hereunder or default under any related Loan
Documents has occurred and is continuing and that no event or circumstance which would constitute
such an Event of Default or default, but for the requirement that notice be given or time elapse or
both, has occurred and is continuing; and that the aggregate outstanding principal balance of the
Revolving Loans after such advance will not exceed $10,000,000.00. If the amount of Revolving
Loans outstanding at any time under the Facility exceeds such amount, Borrower will immediately pay
the amount of such excess to Bank in cash. Loan proceeds will be used for general corporate
purposes.

(c) On the date hereof, Borrower will duly issue and deliver to the Bank a Note, in the
principal amount of $10,000,000.00 bearing interest as specified in the Revolving Note and such
Note will substitute for the note most recently executed by Borrower on October 20, 2003.

(d) (i) The term of the Facility will expire on the June 30, 2009, and the Note will become
payable in full on that date. Borrower may prepay the principal balance of the Note in whole or in
part at any time without premium or penalty.

(ii) The Bank also reserves the right to terminate this Agreement and all further
disbursements hereunder at any time prior to the Termination Date upon the occurrence of any Event
of Default as described in Section 8 of this Agreement or in any promissory note, or any other
document executed by Borrower pursuant to this Agreement.

2.2 Fees. Unused Facility Fee: So long as this Agreement is in effect, Borrower will
pay to the Bank an unused facility fee at an annual rate equal to .25% of that portion of the
Facility that is not outstanding on each day (the “Unused Facility Fee”), which will be payable on
the first (1st) day of each calendar quarter in arrears for the previous calendar quarter with a
final payment due on the Termination Date.

Section 3. Representations and Warranties.

Borrower hereby warrants and presents to Bank the following:

3.1 Organization and Qualification. Borrower is a duly organized, validly existing
corporation in good standing under the laws of the State of Ohio, its state of incorporation, has
the power and authority (corporate and otherwise) to carry on its business and to enter into and
perform this Agreement, the Note and the other Loan Documents, is qualified and licensed to do
business in each jurisdiction in which such qualification or licensing is required. All
information provided to Bank with respect to Borrower and its operations is true and correct.

3.2 Due Authorization. The execution, delivery and performance by Borrower of this
Agreement, the Note and the other Loan Documents have been duly authorized by all necessary
corporate action, and will not contravene any law or any governmental rule or order binding on
Borrower, or the articles of incorporation or bylaws/code of regulations of Borrower, nor violate
any agreement or instrument by which Borrower is bound. Borrower has duly executed and delivered
this Agreement, the Note and other Loan Documents and they are valid and binding obligations of
Borrower enforceable according to their respective terms except as limited by equitable principles
and by bankruptcy, insolvency or similar laws affecting the rights of creditors generally. No
notice to or consent by any governmental body is needed in connection with this transaction.

3.3 Litigation. There are no suits or proceedings pending or threatened against or
affecting Borrower, and no proceedings before any governmental body are pending or threatened
against Borrower except as set forth on Exhibit 3.3 attached hereto.

3.4 Margin Stock. No part of the Loans will be used to purchase or carry, or to
reduce or retire or refinance any credit incurred to purchase or carry, any margin stock (within
the meaning of Regulations U and X of the Board of Governors of the Federal Reserve System) or to
extend credit to others for the purpose of purchasing or carrying any margin stock. If requested
by the Bank, Borrower will furnish to the Bank statements in conformity with the requirements of
Federal Reserve Form U-1.

3.5 Business. Borrower is not a party to or subject to any agreement or restriction
that may have a material adverse effect on Borrower’s business, properties or prospects. Borrower
has all franchises, authorizations, patents, trademarks, copyrights and other rights necessary to
advantageously conduct its business. They are all in full force and effect and are not in known
conflict with the rights of others.

3.6 Laws and Taxes. Borrower is in compliance with all laws, regulations, rulings,
orders, injunctions, decrees, conditions or other requirements applicable to or imposed upon
Borrower by any law or by any governmental authority, court or agency. Borrower has filed all
required tax returns and reports that are now required to be filed by it in connection with any
federal, state and local tax, duty or charge levied, assessed or imposed upon Borrower or its
assets, including unemployment, social security, and real estate taxes. Borrower has paid all
taxes which are now due and payable. No taxing authority has asserted or assessed any additional
tax liabilities against Borrower which are outstanding on the date of this Agreement.

3.7 Financial Condition. All financial information relating to Borrower which has
been or may hereafter be delivered to Bank is true and correct and has been prepared in accordance
with generally accepted accounting principles consistently applied. Borrower has no material
obligations or liabilities of any kind not disclosed in that financial information, and there has
been no material adverse change in the financial condition of Borrower nor has Borrower suffered
any damage, destruction or loss which has adversely affected its business or assets since the
submission of the most recent financial information to the Bank.

3.8 Title. Borrower has good and marketable title to the assets reflected on the most
recent balance sheet submitted to the Bank, free and clear from all liens and encumbrances of any
kind, except for (collectively, the “Permitted Liens”) (a) current taxes and assessments not yet
due and payable, (b) liens and encumbrances, if any, reflected or noted on such balance sheet or
notes thereto, (c) assets disposed of in the ordinary course of business, and (d) any security
interests, pledges, assignments or mortgages granted to the Bank to secure the repayment or
performance of the Obligations.

3.9 Defaults. Borrower is in compliance with all material agreements applicable to it
and there does not now exist any default or violation by Borrower of or under any of the terms,
conditions or obligations of (a) its Articles of Incorporation or Regulations/Bylaws, or (b) any
indenture, mortgage, deed of trust, franchise, permit, contract, agreement or other instrument to
which Borrower is a party or by which it is bound, and the consummation of the transactions
contemplated by this Agreement will not result in such default or violation.

3.10 Environmental Laws. (a) Borrower has obtained all permits, licenses and other
authorizations which are required under Environmental Laws and Borrower is in compliance in all
material respects with all terms and conditions of the required permits, licenses and
authorizations, and is also in compliance in all material respects with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in the Environmental Laws.

(b) Borrower is not aware of, and has not received notice of, any past, present or future
events, conditions, circumstances, activities, practices, incidents, actions or plans which may
interfere with or prevent compliance or continued compliance, in any material respect, with
Environmental Laws, or may give rise to any material common law or legal liability, or otherwise
form the basis of any material claim, action, demand, suit, proceeding, hearing, study or
investigation, based on or related to the manufacture, processing, distributions, use, treatment,
storage, disposal, transport or handling or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, chemical, or industrial, toxic or hazardous
substance or waste, and any and all regulations, codes, plans, orders, decrees, judgments,
injunctions, notices or demand letters issued, entered promulgated or approved thereunder.

(c) There is no civil, criminal or administrative action suit, demand, claim, hearing, notice
or demand letter, notice of violation, investigation or proceeding pending or threatened against
Borrower, relating in any way to Environmental Laws.

3.11 ERISA. Borrower and all individuals or entities that, along with Borrower, would
be treated as a single employer under ERISA or the Internal Revenue Code of 1986, as amended (an
“ERISA Affiliate”), are in compliance with all of their obligations to contribute to any “employee
benefit plan “ as that term is defined in Section 3(3) of ERISA. Borrower and each of its ERISA
Affiliates are in full compliance with ERISA, and there exists no event described in Section
4043(b) thereof (“Reportable Event”). “ERISA” means the federal Employee Retirement Income Security
Act of 1974, and any regulations promulgated thereunder from time to time, as amended or as may be
replaced by a successor statute..

3.12 Solvency. Borrower is Solvent and upon consummation of the transactions
contemplated herein will be Solvent. “Solvent” means that: (a) the total amount of the Borrower’s
assets is in excess of the total amount of its liabilities (including contingent liabilities), at a
fair valuation; (b) Borrower does not have unreasonably small capital for the business and
transactions in which Borrower is engaged or is about to engage; and (c) Borrower does not intend
to or believe it will incur obligations beyond its ability to pay as they become due.

Section 4. Affirmative Covenants.

4.1 Access to Business Information. Borrower shall maintain proper books of accounts and
records and enter therein complete and accurate entries and records of all of its transactions in
accordance with generally accepted accounting principles and give representatives of the Bank
access thereto at all reasonable times, including permission to: (a) examine, copy and make
abstracts from any such books and records and such other information which might be helpful to the
Bank in evaluating the status of the Loans as it may reasonably request from time to time, and (b)
communicate directly with any of Borrower’s officers, employees, agents, accountants or other
financial advisors with respect to the business, financial conditions and other affairs of the
Borrower.

4.2 Financial Statements. Borrower will maintain a standard and modern system for
accounting and will furnish to Bank:

(a) Within forty-five (45) days after the end of each quarter, a copy of Borrower’s
consolidated financial statements for that quarter and for the year to date in a form reasonably
acceptable to Bank, prepared and certified as complete and correct, subject to changes resulting
from year-end adjustments, by the principal financial officer of Borrower. Borrower may meet this
requirement by furnishing to Bank a copy of form 10-Q filed with the Securities and Exchange
Commission;

(b) Within ninety (90) days after the end of each fiscal year, a copy of Borrower’s
consolidated financial statements for that year audited by a firm of independent certified public
accountants acceptable to Bank (which acceptance will not be unreasonably withheld), and
accompanied by a standard audit opinion of such accountants without significant qualifications and
a copy of form 10-K filed with the Securities and Exchange Commission;

(c) With the statements submitted under (a) and (b) above, a compliance certificate signed by
the principal financial officer of Borrower, (i) stating he is familiar with all documents relating
to Bank that no Event of Default specified in this Agreement, nor any event which upon notice or
lapse of time, or both would constitute such an Event of Default, has occurred, or if any such
condition or event existed or exists, specifying it and describing what action Borrower has taken
or proposes to take with respect thereto, and (ii) setting forth, in summary form, figures showing
the financial status of Borrower in respect of the financial restrictions contained in this
Agreement;

(d) Forthwith upon any officer of Borrower obtaining knowledge of any condition or event which
constitutes or, after notice or lapse of time or both, constitute an Event of Default, a
certificate of such person specifying the nature and period of the existence thereof, and what
action Borrower has taken or is taking or propose to take in respect thereof; and

If at any time Borrower has any additional subsidiaries which have financial statements that
could be consolidated with those of Borrower under generally accepted accounting principles, the
financial statements required by subsections (a) and (b) above will be the financial statements of
Borrower and all such subsidiaries prepared on a consolidated and consolidating basis.

4.3 Condition and Repair. Borrower shall maintain its assets in good repair and
working order and shall make all appropriate repairs, improvements and replacements thereof so that
the business carried on in connection therewith may be properly and advantageously conducted at all
times.

4.4 Taxes. Borrower shall pay when due all taxes, assessments and other governmental
charges imposed upon it or its assets, franchises, business, income or profits before any penalty
or interest accrues thereon (provided, however, that extensions for filing and payment of such
taxes shall be permitted hereunder if disclosed to and consented to by the Bank), and all claims
(including, without limitation, claims for labor, services, materials and supplies) for sums which
by law might be a lien or charge upon any of its assets, provided that (unless any material item or
property would be lost, forfeited or materially damaged as a result thereof) no such charge or
claim need be paid if it is being diligently contested in good faith, if the Bank is notified in
advance of such contest and if Borrower establishes an adequate reserve or other appropriate
provision required by generally accepted accounting principles.

4.5 Existence; Business. Borrower will (a) maintain its existence as an Ohio
corporation, (b) engage primarily in business of the same general character as that now conducted,
and (c) refrain from entering into any lines of business substantially different from the business
or activities in which Borrower is presently engaged.

4.6 Compliance with Laws. Borrower shall comply with all federal, state and local
laws, regulations and orders applicable to Borrower or its assets, in all respects material to
Borrower’s business, assets or prospects and shall immediately notify the Bank of any violation of
any rule, regulation, statute, ordinance, order or law relating to the public health or the
environment and of any complaint or notifications received by Borrower regarding to any
environmental or safety and health rule, regulation, statute, ordinance or law. Borrower shall
obtain and maintain any and all licenses, permits, franchises, governmental authorizations,
patents, trademarks, copyrights or other rights necessary for the ownership of its properties and
the advantageous conduct of its business and as may be required from time to time by applicable
law.

4.7 Notice of Default. Borrower will, within three (3) days of its knowledge thereof,
give written notice to the Bank of (a) the occurrence of any event or the existence of any
condition which would be, after notice or lapse of applicable grace periods, an Event of Default,
and (b) the occurrences of any event or the existence of any condition which would prohibit or
limit the ability of Borrower to reaffirm any of the representations or warranties or to perform
any of the covenants, set forth herein.

4.8 Costs. Borrower shall reimburse the Bank for any and all fees, costs and expenses
including, without limitation, reasonable attorneys’ fees, other professionals’ fees, field exam
audits, expert fees, court costs, litigation and other expenses (collectively, the “Costs”)
incurred or paid by the Bank or any of its officers, employees or agents in connection with: (a)
the preparation, negotiation, procurement, review, administration or enforcement of the Loan
Documents or any instrument, agreement, document, policy, consent, waiver, subordination, financing
statement or other lien search, recording or filing related thereto (or any amendment, modification
or extension to, or any replacement or substitution for, any of the foregoing), whether or not any
particular portion of the transactions contemplated during such negotiations is ultimately
consummated, and (b) the defense, preservation and protection of the Bank’s rights and remedies
thereunder, whether incurred in bankruptcy, insolvency, foreclosure or other litigation or
proceedings or otherwise. The Costs shall be due and payable upon demand by the Bank. If Borrower
fails to pay the Costs when upon such demand, the Bank is entitled to disburse such sums as part of
the Loans. Thereafter, the Costs shall bear interest from the date incurred or disbursed at the
highest rate set forth in the Note. This provision shall survive the termination of this Agreement
and/or the repayment of any amounts due or the performance of any other obligation of Borrower to
the Bank.

4.9 Depository/Banking Services. The Bank will be the primary depository in which
substantially all of Borrower’s funds are deposited, and the principal bank of account of Borrower,
as long as this Agreement is in effect, and Borrower will grant the Bank the first and last
opportunity to provide any corporate banking services required by Borrower and its subsidiaries,
including, without limitation, payroll, cash management and employee benefit plan services.

4.10 Other Amounts Deemed Loans. If Borrower fails to pay any tax, assessment,
governmental charge or levy or to maintain insurance within the time permitted or required by the
Note, or to discharge any Lien prohibited hereby, or to comply with any other Obligation, the Bank
may, but shall not be obligated to, pay, satisfy, discharge or bond the same for the account of
Borrower. To the extent permitted by law and at the option of the Bank, all monies so paid by the
Bank on behalf of Borrower shall be deemed Obligations and Borrower’s payments under this Note may
be increased to provide for payment of such Obligations plus interest thereon.

4.11 Further Assurances. Borrower shall execute, acknowledge and deliver, or cause to
be executed, acknowledged or delivered, any and all such further assurances and other agreements or
instruments, and take or cause to be taken all such other action, as shall be reasonably necessary
from time to time to give full effect to the Loan Documents and the transactions contemplated
thereby.

Section 5. Negative Covenants.

5.1 Indebtedness. Borrower will not incur, create, assume or permit to exist any
additional Indebtedness for borrowed money (other than the Obligations) or Indebtedness on account
of deposits, advances or progress payments under contracts, notes, bonds, debentures or similar
obligations or other indebtedness evidenced by notes, bonds, debentures, capitalized leases or
similar obligations except:

(a) indebtedness incurred pursuant to this Agreement or with Bank;

(b) liabilities on account of deposits or advances by customers in the ordinary course of
business or on account of deposits under workers’ compensation, unemployment insurance and social
security laws or to enforce the performance of bids, tenders, contracts (other than for the
repayment of borrowed money) or leases or to secure statutory obligations or security or appeal
bonds, or to secure indemnity, performance or other similar bonds in the ordinary course of
business;

(c) other indebtedness of Borrower existing as of the date of this Agreement and previously
disclosed to Bank in Borrower’s financial statements (including refinancing of such indebtedness);
and

(d) indebtedness arising out of the acquisition by Borrower of another entity which is
financed entirely by Borrower or Bank (and not by a financial institution or other lender);.

5.2 Prepayments Covenant. Borrower shall not voluntarily prepay any Indebtedness
owing by Borrower prior to the Stated Maturity Date thereof other than (i) the Obligations; (ii)
Indebtedness to trade creditors where the prepayment shall result in a discount on the amount due;
and (iii) BIC Trust I Junior Subordinated Debentures in the principal amount of $8,248,000.00
maturing on December 4, 2032, and BIC Trust II Junior Subordinated Debentures in the principal
amount of $7,217,000 maturing on September 30, 2033.

5.3 Leases Covenant. Borrower shall not enter into any lease of real or personal
property as the lessee, or become or remain liable in any way whether by assignment, as guaranty or
other surety, if the aggregate amount of all payments due under such lease and all other leases of
Borrower then in effect would exceed $500,000.00 in any fiscal year.

5.4 Pledge or Encumbrance of Assets. Other than the Permitted Liens, Borrower will
not create, incur, assume or permit to exist any Lien in any present or future asset, except for
Liens to the Bank, Liens existing on the date of this Agreement which have been disclosed to and
approved by Bank and Liens imposed by law which secure amounts not at the time due and payable.

5.5 Guarantees and Loans. Borrower will not enter into any direct or indirect
guarantees other than by endorsement of checks for deposit or other than in the ordinary course of
business nor make any advance or loan other than in the ordinary course of business as presently
conducted, including, without limitation, loans and advances to employees of Borrower in excess of
$1,500,000.00 in the aggregate at any one time. Notwithstanding the foregoing, Borrower shall be
permitted to guarantee obligations of its wholly-owned subsidiaries.

5.6 Merger; Disposition of Assets. Borrower will not (a) merge or consolidate with
any corporation, and (b) sell, transfer or otherwise dispose of more than twenty percent (20%) of
its assets, whether now owned or hereafter acquired. Borrower will be permitted to sell American
Legal Publishing Corporation, an Ohio corporation.

5.7 Tangible Net Worth. Borrower will not permit the consolidated Tangible Net Worth
of Borrower and its Subsidiaries, as determined in accordance with generally accepted accounting
principles, to be less than $20,000,000.00 until December 31, 2006 when the requirement increases
to $26,000,000.00 for all periods thereafter, tested quarterly throughout the term of this
Agreement.

5.8 Debt Service Coverage Ratio. Borrower will not permit the consolidated Debt
Service Coverage Ratio of Borrower and its Subsidiaries to be less than 1.10 to 1 at the end of any
fiscal quarter, on a rolling four quarters basis.

5.9 Net Premium Ratio. Borrower shall not permit Ohio Indemnity Company’s, an Ohio
corporation, ratio of net premiums underwritten to “policy holder’s surplus”, measured according to
statutory reporting requirements, to exceed 3.0:1, tested quarterly, on a rolling 12 quarters
basis, throughout the term of this Agreement.

5.10 A.M. Best Rating. Borrower shall not permit Ohio Indemnity Company’s current A.
M. Best rating to be any lower than “B++”.

5.11 Transactions with Affiliates. Borrower shall not (a) directly or indirectly
issue any guarantee for the benefit of any of its Affiliates, (b) directly or indirectly make any
loans or advances to, or investments in, any of its Affiliates, (c) enter into any transaction with
any of its Affiliates, other than transactions entered into in the ordinary course of business upon
fair and commercially reasonable terms determined by the Bank to be no less favorable to Borrower
than could be obtained in a comparable arms-length transaction with an unaffiliated person, or (d)
divert (or permit anyone to divert) any of its business opportunities to any Affiliate or any other
corporate or business entity in which Borrower or its shareholders holds a direct or indirect
interest.

5.12 Dividend Payments from Subsidiaries. Neither Ohio Indemnity Company nor any
other wholly owned subsidiary of Borrower, whether now existing or hereafter created, will restrict
or enter into any agreement which will limit their ability to make dividend payments to Borrower,
other than as permitted by statute.

Section 6. Events of Default and Remedies.

6.1 Events of Default. Any of the following events will be an Event of Default
(“Event of Default”):

	 	(a)	 	any representation or warranty made by Borrower herein or in any of the Loan
Documents is incorrect when made or reaffirmed; or

	 	(b)	 	Borrower defaults in the payment of any principal or interest on any Obligation
when due and payable, by acceleration or otherwise; or

	 	(c)	 	Borrower fails to observe or perform any covenant, condition or agreement
herein and the failure or inability of Borrower to cure such default within 30 days of
the occurrence thereof, provided that such 30 day grace period will not apply to (i) a
breach of any covenant which in Bank’s good faith judgment is incapable of cure, (ii)
any failure permit inspection of the books and records of Borrower, (iii) any breach in
any negative covenant set forth in Section 5 hereof, or (iv) any breach of any covenant
which has already occurred; or

	 	(d)	 	a court enters a decree or order for relief with respect to Borrower in an
involuntary case under any applicable bankruptcy, insolvency or other similar law then
in effect, or appoints a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) for Borrower or for any substantial part of
its property, or orders the wind-up or liquidation of the affairs of Borrower; or a
petition initiating an involuntary case under any such bankruptcy, insolvency or
similar law is filed and is pending for thirty (30) days without dismissal; or

	 	(e)	 	Borrower commences a voluntary case under any applicable bankruptcy, insolvency
or other similar law in effect, or makes any general assignment for the benefit of
creditors, or fails generally to pay its debts as such debts become due, or takes
corporate action in furtherance of any of the foregoing; or

	 	(f)	 	Borrower defaults under the terms of any Indebtedness or lease involving
payment obligations of Borrower and such default gives any creditor or lessor the right
to accelerate the maturity of any such indebtedness or lease payments which right is
not contested by Borrower or is determined by any court of competent jurisdiction to be
valid; or

	 	(g)	 	final judgment of the payment of money in excess of $25,000 is rendered against
Borrower and remains undischarged for 10 days during which execution is not effectively
stayed; or

	 	(h)	 	any event occurs which might, in Bank’s opinion, have a material adverse effect
on Borrower’s financial condition, operations, assets or prospects, or on any other
property securing the repayment of the Obligations;

	 	(i)	 	a Reportable Event (as defined in ERISA) occurs with respect to any employee
benefit plan maintained by Borrower for its employees other than a Reportable Event
caused solely by a decrease in employment; or a trustee is appointed by a United States
District Court to administer any employee benefit plan; or the Pension Benefit Guaranty
Corporation institutes proceedings to terminate any of Borrower’s employee benefit
plans.

6.2 Remedies. If any Event of Default will occur, Bank may cease advancing money
hereunder, and/or declare all Obligations to be due and payable forthwith, whereupon they will
forthwith become due and payable without presentment, demand, protest, or notice of any kind, all
of which are hereby expressly waived by Borrower.

6.3 Setoff. If any Event of Default will occur, the Bank is authorized, without
notice to Borrower, to offset and apply to all or any part of the Obligations all moneys, credits
and other property of any nature whatsoever of Borrower now or at any time hereafter in the
possession of, in transit to or from, under the control or custody of, or on deposit with (whether
held by Borrower individually or jointly with another party), the Bank, including but not limited
to certificates of deposit.

6.4 Default Rate. After the occurrence of an Event of Default, all amounts of
principal outstanding as of the date of the occurrence of such Event of Default will bear interest
at the Default Rate, in Bank’s sole discretion, without notice to Borrower. This provision does
not constitute a waiver of any Events of Default or an agreement by Bank to permit any late
payments whatsoever.

6.5 No Remedy Exclusive. No remedy set forth herein is exclusive of any other
available remedy or remedies, but each is cumulative and in addition to every other remedy
available under this Agreement, the Loan Documents or as may be now or hereafter existing at law,
in equity or by statute. Borrower waives any requirement of marshalling of assets which may be
secured by any of the Loan Documents.

6.6 Effect of Termination. The termination of this Agreement will not affect any
rights of either party or any obligation of either party to the other, arising prior to the
effective date of such termination, and the provisions hereof shall continue to be fully operative
until all transaction entered into, rights created or Obligations incurred prior to such
termination have been fully disposed of, concluded or liquidated. The security interest, lien and
rights granted to the Bank hereunder and under the Loan Documents will continue in full force and
effect, notwithstanding the termination of this Agreement or the fact that no Loans are outstanding
to Borrower, until all of the Obligations , have been paid in full.

6.7 No Adequate Remedy at Law. Borrower recognizes that in the event Borrower fails
to pay, perform, observe or discharge any of its Obligations under this Agreement, the Note or the
other Loan Documents, no remedy at law will provide adequate relief to the Bank and Borrower agrees
that Bank shall be entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving that it has incurred actual damages.

Section 7. Condition Precedent.

7.1 Conditions to Initial Loans. The Bank will have no obligation to make or advance
any Revolving Loan until Borrower has delivered to the Bank at or before the closing date, in form
and substance satisfactory to the Bank:

(a) Executed version of the Note.

(b) A Certificate of Borrower in the form of Exhibit 7.1(b) and all attachments thereto.

(c) Such additional information and materials as the Bank may reasonably request.

7.2 Conditions to Each Revolving Loan. On the date of each Revolving Loan, the
following statements will be true:

(a) All of the representations and warranties contained herein and in the Loan Documents will
be correct in all material respects as though made on such date;

(b) No event will have occurred and be continuing, or would result from such Loan, which
constitutes an Event of Default, or would constitute an Event of Default but for the requirement
that notice be given or lapse of time or both;

(c) The aggregate unpaid principal amount of the Revolving Loans after giving effect to such
Revolving Loan will not violate the lending limits set forth in Section 2.1 of this Agreement.

The acceptance by Borrower of the proceeds of each Revolving Loan will be deemed to constitute
a representation and warranty by Borrower that the conditions in Section 7.2 of this Agreement,
other than those that have been waived in writing by Bank, have been satisfied.

Section 8. Miscellaneous Provisions.

8.1 Miscellaneous. This Agreement, the exhibits and the other Loan Documents are the
complete agreement of the parties hereto and supersede all previous understandings relating to the
subject matter hereof. This Agreement may be amended only in writing signed by the party against
whom enforcement of the amendment is sought. This Agreement may be executed in counterparts. If
any part of this Agreement is held invalid, the remainder of this Agreement will not be affected
thereby. This Agreement is and is intended to be a continuing agreement and will remain in full
force and effect until the Loans are finally and irrevocably paid in full and the Facility is
terminated.

8.2 Waiver of Borrower. Borrower waives notice of non-payment, demand, presentment,
protest or notice of protest and all other notices (except those notices specifically provided for
in this Agreement); consents to any renewals or extensions of time of payment thereof; and
generally waives any all suretyship defenses and defenses in the nature thereof.

8.3 Binding Effect. This Agreement will be binding upon and inure to the benefit of
the respective legal representatives, successors and assigns of the parties hereto; however,
Borrower may not assign any of its rights or delegate any of its obligations hereunder. The Bank
(and any subsequent assignee) may transfer and assign this Agreement or may assign partial
interests or participation in the Loans to other persons. The Bank may disclose to all prospective
and actual assignees and participants all financial, business and other information about a
Borrower which the Bank may possess at any time.

8.4 Survival. All representations, warranties, covenants and agreements made by
Borrower herein and in the Loan Documents will survive the execution and delivery of this
Agreement, the Loan Documents and the issuance of the Note.

8.5 Delay or Omission. No delay or omission on the part of the Bank in exercising any
right, remedy or power arising from any Event of Default will impair any such right, remedy or
power or any other right remedy or power or be considered a waiver or any right, remedy or power or
any Event of Default nor will the action or omission to act by the Bank upon the occurrence of any
Event of Default impair any right, remedy or power arising as a result thereof or affect any
subsequent Event of Default of the same or different nature.

8.6 Notices. Any notices under or pursuant to this Agreement will be deemed duly sent
when delivered in hand or when mailed by registered or certified mail, return receipt requested,
addressed as follows:

	 	 	 	To Borrower: Bancinsurance Corporation

250 East Broad Street

Columbus, Ohio 43215

Attention: Matthew C. Nolan, Chief Financial
Officer, Treasurer and Secretary

	 	 	 	To the Bank: Fifth Third Bank

21 East State Street

Columbus, Ohio 43215

Attention: William J. Whitley, Vice President

Either party may change such address by sending notice of the change to the other party.

8.7 No Partnership. Nothing contained herein or in any of the Loan Documents is
intended to create or will be construed to create any relationship between the Bank and Borrower
other than as expressly set forth herein or therein and will not create any joint venture,
partnership or other relationship.

8.8 Indemnification. If after receipt of any payment of all or part of the
Obligations, the Bank is for any reason compelled to surrender such payment to any person or
entity, because such payment is determined to be void or voidable as a preference, impermissible
setoff, or diversion of trust funds, or for any other reason, this Agreement will continue in full
force and effect and Borrower will be liable to, and will indemnify, save and hold the Bank, its
officers, directors, attorneys, and employees harmless of and from the amount of such payment
surrendered. The provisions of this Section will be and remain effective notwithstanding any
contrary action which may have been taken by the Bank in reliance on such payment, and any such
contrary action so taken will be without prejudice to the Bank’s rights under this Agreement and
will be deemed to have been conditioned upon such payment becoming final, indefeasible and
irrevocable. In addition, Borrower will indemnify, defend, save and hold the Bank, its officers,
directors, attorneys, and employees harmless of, from and against all claims, demands, liabilities,
judgments, losses, damages, costs and expenses, joint or several (including all accounting fees and
attorneys’ fees reasonably incurred), that the Bank or any such indemnified party may incur arising
out of this Agreement, any of the Loan Documents or any act taken by the Bank hereunder except for
the willful misconduct or gross negligence of such indemnified party. The provisions of this
Section will survive the termination of this Agreement.

8.9 Governing Law; Jurisdiction. This Agreement, the Note and the other Loan
Documents will be governed by the domestic laws of the State of Ohio. Borrower agrees that the
state and federal courts in Franklin County, Ohio, or any other court in which Bank initiates
proceedings have exclusive jurisdiction over all matters arising out of this Agreement, and that
service of process in any such proceeding will be effective if mailed to Borrower at its address
described in the Notices section of this Agreement. THE BANK AND BORROWER HEREBY WAIVE THE RIGHT
TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

8.10 Confession of Judgment. Borrower authorizes any attorney of record to appear for
it in any court of record in the State of Ohio, after an Obligation becomes due and payable whether
by its terms or upon default, waives the issuance and service of process, releases all errors of
appeal, and confess a judgment against it in favor of the holder of such Obligation, for the
principal amount of such Obligation plus interest thereon, together with court costs and attorneys’
fees. Stay of Execution and all exemptions are hereby waived. If an Obligation is referred to an
attorney for collection, and the payment is obtained without the entry of a judgment, the obligors
will pay to the holder of such Obligation its attorneys’ fees.

IN WITNESS WHEREOF, Borrower and the Bank have executed this Agreement by their duly
authorized officers as of the date first above written.

FIFTH THIRD BANK

By: /s/ William J. Whitley

Name: William J. Whitley

Title: Vice President

1

WARNING – BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO
NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE
POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE.

BANCINSURANCE CORPORATION

By: /s/ Matthew C. Nolan

Name: Matthew C. Nolan

Title: Chief Financial Officer, Treasurer and

Secretary

2

EXHIBITS

TO

CREDIT AGREEMENT

BETWEEN

BANCINSURANCE CORPORATION

AND

FIFTH THIRD BANK

	 	 	 	 	 
	Exhibit 1

	 	-
	 	Definitions
	 
	 	 	 	 
	Exhibit 3.3

	 	-
	 	Litigation
	 
	 	 	 	 
	Exhibit 7.1(b)

	 	-
	 	Certificate of Borrower

3

EXHIBIT 1

DEFINITIONS

1. “Affilitate” means, as to Borrower (a) any person which, directly or indirectly, is in
control of, is controlled by or is under common control with, Borrower, or (b) any person who is a
director, officer or employee (i) of Borrower or (ii) of any person described in the preceding
clause (a).

2. “Current Maturities of Long Term Debt” means that portion of the principal amount of Long
Term Debt which must be paid during the twelve fiscal months following the date such determination
is to be made.

3. “Debt Service Coverage Ratio” means the ratio of (a) the sum of Borrower’s net income for a
fiscal year before taxes, depreciation, amortization and interest expense, less distributions,
dividends and other extraordinary items to (b) the sum of (i) Borrower’s interest expense, and (ii)
all principal payments with respect to Indebtedness that were paid or were due and payable by all
consolidated entities during the period.

4. “Default Rate” means three percent (3%) in excess of the interest rate otherwise in effect
under amounts outstanding under the Note. In no event will the interest rate accruing under such
Note be increased to be in excess of the maximum interest rate permitted by applicable state or
federal usury laws then in effect.

5. “Environmental Laws” means all federal, state, local and foreign laws relating to pollution
or protection of the environment, including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or industrial toxic or hazardous
substances or wastes into the environment (including without limitation ambient air, surface water,
ground water or land), otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes, and any and all regulations, codes, plans,
orders, decrees, judgments, injunctions, notices or demand letters issued, entered promulgated or
approved thereunder.

6. “ERISA” means the Federal Employee Retirement Income Security Act of 1974.

7. “Event(s) of Default” will have the meaning set forth in Section 6.1 of the Agreement.

8. “Facility” will have the meaning set forth in Section 2.1 hereof.

9. “Indebtedness” means (a) all items (except items of capital stock, of capital surplus, of
general contingency reserves or of retained earnings, deferred income taxes, and amount
attributable to minority interests, if any) which in accordance with generally accepted accounting
principles would be included in determining total liabilities on a consolidated basis as shown on
the liability side of a balance sheet as at the date as of which Indebtedness is to be determined,
(b) all indebtedness secured by any mortgage, pledge, lien or conditional sale or other title
retention agreement to which any property or asset owned or held is subject, whether or not the
indebtedness secured thereby will have been assumed (excluding non-capitalized leases which may
amount to title retention agreements but including capitalized leases), and (c) all indebtedness of
others which Borrower or any Subsidiary has directly or indirectly guaranteed, endorsed (otherwise
than for collection or deposit in the ordinary course of business), discounted or sold with
recourse or agreed (contingently or otherwise) to purchase or repurchase or otherwise acquire, or
in respect of which Borrower or any Subsidiary has agreed to apply or advance funds (whether by way
of loan, stock purchase, capital contribution or otherwise) or otherwise to become directly or
indirectly liable.

10. “Lien” means any security interest, mortgage, pledge, assignment, lien or other
encumbrance of any kind, including interests of vendors or lessors under conditional sale contracts
and capitalized leases.

11. “Loan Documents” means this Agreement, the Note and every other document or agreement
executed by any party evidencing, guarantying or securing any of the Obligations; and “Loan
Document” means any one of the Loan Documents.

12. “Loans” means the Revolving Loans.

13. “Long Term Debt” means Indebtedness which, by its terms, is not payable in full within one
year from the date incurred, or the repayment of which may, at the option of Borrower, be extended
for a period more than one year from the date incurred.

14. “Note” means the Amended and Restated Revolving Note of even date herewith.

15. “Obligation(s)” means all loans, advances, indebtedness and other obligations of Borrower
owed to Bank and/or its Affiliates of every kind and description whether now existing or hereafter
arising including without limitation those owed by Borrower to others and acquired by Bank by
purchase, assignment or otherwise) and whether direct or indirect, primary or as guarantor or
surety, absolute or contingent, liquidated or unliquidated, matured or unmatured, whether or not
secured by additional collateral, and including without limitation all liabilities obligations and
indebtedness arising under this Agreement, the Note and the other Loan Documents. Obligations to
perform or forbear from performing acts, all amounts represented by letters of credit now or
hereafter issued by Bank for the benefit of or at the request of Borrower, and all expenses and
attorney’s fees incurred by Bank under this Agreement or any other document or instrument related
thereto.

16. “Permitted Liens” has the meaning assigned thereto as set forth in Section 3.9 hereof.

17. “Prime Rate” means the rate of interest per annum announced to be its prime rate from time
to time by Bank at its principal office in Cincinnati, Ohio whether or not Bank will at times lend
to borrowers at lower rates of interest or, if there is no such prime rate, then its base rate or
such other rate as may be substituted by Bank for the prime rate.

18. “Revolving Loans” has the meaning assigned to that term in Section 2.1 of this Agreement.

19. “Subsidiary” means any corporation of which Borrower directly or indirectly owns or
controls at the time outstanding stock having under ordinary circumstances (not depending on the
happening of a contingency) voting power to elect a majority of the board of directors of said
corporation.

20. “Tangible Net Worth “ shall mean the total of the capital stock (less treasury stock),
paid-in capital surplus, general contingency reserves, and other comprehensive income and retained
earnings (deficit) of Borrower and any Subsidiary as determined on a consolidated basis in
accordance with generally accepted accounting principles after eliminating all inter-company items
and all amounts properly attributable to minority interests, if any, in the stock and surplus of
any Subsidiary, minus the following items (without duplication of deductions), if any, appearing on
the consolidated balance sheet of Borrower:

(i) the book amount of all assets which would be treated as intangibles under generally
accepted accounting principles, including, without limitation, such items as goodwill, trademark
applications, trade names, service marks, brand names, copyrights, patents, patent applications and
licenses, and rights with respect to the foregoing.

21. “Termination Date” means June 30, 2009 or such later date as is determined in accordance
with Section 2.1 (d)(ii).

4

EXHIBIT 3.3

LITIGATION

Ongoing SEC Investigation

As previously reported, on February 14, 2005, Bancinsurance Corporation (the “Company”) received
notification from the U.S. Securities and Exchange Commission (“SEC”) that it was conducting an
informal, non-public inquiry regarding the Company. The inquiry generally concerned the chronology,
events and announcements relating to Ernst & Young LLP (“E&Y”), the Company’s former independent
registered public accounting firm, withdrawing its audit reports for the years 2001 through 2003
for the Company. On March 29, 2005, the Company was notified by the SEC that the informal,
non-public inquiry initiated in February 2005 was converted to a formal order of private
investigation. The SEC stated in its notification letter that this confidential inquiry should not
be construed as an indication by the SEC or its staff that any violation of law has occurred nor
should it be considered a reflection upon any person, entity or security. The investigation is
ongoing and the Company continues to cooperate fully with the SEC.

The Company cannot predict the outcome of the SEC investigation. There can be no assurance that the
scope of the SEC investigation will not expand. The outcome of and costs associated with the SEC
investigation could have a material adverse effect on the Company’s business, financial condition
and/or operating results, and the investigation could divert the efforts and attention of
management from the Company’s ordinary business operations.

5

EXHIBIT 7.1(b)

BANCINSURANCE CORPORATION

FORM OF CERTIFICATE OF BORROWER

re: $10,000,000 Revolving Loan, and

from

FIFTH THIRD BANK

The undersigned does hereby certify that he is the duly elected, qualified and acting
Secretary of BANCINSURANCE CORPORATION, an Ohio corporation (the “Borrower”), and the undersigned
does hereby further certify as follows:

	 	1.	 	Attached hereto, marked Attachment A, is a true and correct copy of the current
Articles of Incorporation of Borrower together with all amendments thereto.

	 	2.	 	Attached hereto, marked Attachment B, is a true and correct copy of the current
Bylaws of Borrower together with all amendments thereto.

	 	3.	 	Attached hereto, marked Attachment C, is a true and correct copy of a certain
resolution of the Board of Directors of Borrower dated May 31, 2006, which was duly and
lawfully adopted by the Board of Directors of Borrower. Such resolution has not been
amended, altered or rescinded and is in full force and effect on the date hereof.

	 	4.	 	The following persons are duly elected officers of Borrower, holding the office
set forth opposite their respective names. Each officer who has executed or will
execute any documents in connection with the loan transaction has set forth his true
and customary signature opposite his name.

	 	 	 	 	 
	Name

	 	Title
	 	Signatures
	 

	 	 
	 	 
	 
	 	 	 	 
	Matthew C. Nolan

	 	Chief Financial Offcier
	 	

	 	5.	 	Secretary/TreasurerEach officer whose personal signature appears above has been
duly authorized by resolution of the Board of Directors of Borrower to execute any and
all instruments or documents which he may deem necessary or appropriate in connection
with this loan transaction.

	 	6.	 	Borrower is in good standing in the state of its incorporation. Attached
hereto, marked Attachment D, is a short-form certificate of good standing issued within
the past 30 days by that state.

IN WITNESS WHEREOF, the undersigned hereby certifies the above to be true and has executed
this certificate this      day of      , 2006.

     

Matthew C. Nolan, Secretary

6

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