Document:

exv10w4

Exhibit 10.4

Performance Period 20              -20              

Performance Share Agreement

          WHEREAS,                                          (hereinafter called the “Grantee”) is a key associate of Diebold,
Incorporated (hereinafter called the “Corporation”) or a Subsidiary; and

          WHEREAS, the execution of a Performance Share Agreement (hereinafter called the “Agreement”)
substantially in the form hereof has been authorized by a resolution of the Compensation Committee
(the “Committee”) of the Board of Directors of the Corporation (the “Board”) duly adopted on
                                         (the “Date of Grant”).

          NOW, THEREFORE, subject to the terms and conditions of the 1991 Equity and Performance
Incentive Plan (As Amended and Restated as of April 13, 2009) (the “Plan”), and the terms and
conditions described below, the Corporation hereby confirms to the Grantee the grant, effective on
the Date of Grant, of                                          Performance Shares, together with the opportunity to earn up to an
additional 100% of such number of Performance Shares for superior performance as described herein.

     1. Definitions.

          As used in this Agreement:

          (a) A “Change in Control” shall be deemed to have occurred if any of the following events
shall occur:

          (i) The acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30% of more of either: (A) the then-outstanding shares of common
stock of the Corporation (the “Corporation Common Stock”) or (B) the combined voting power
of the then-outstanding voting securities of the Corporation entitled to vote generally in
the election of directors (“Voting Stock”); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a Change in Control: (1)
any acquisition directly from the Corporation, (2)

 

 

any acquisition by the Corporation, (3) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Corporation or any Subsidiary of the
Corporation, or (4) any acquisition by any Person pursuant to a transaction which complies
with clauses (A), (B) and (C) of subsection (iii) of this Section 1(a); or

          (ii) Individuals who, as to the date hereof, constitute the Board (as modified by this
subsection (ii), the “Incumbent Board”) cease for any reason (other than death or
disability) to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or nomination
for election by the Corporation’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (either by a specific vote or
by approval of the proxy statement of the Corporation in which such person is named as a
nominee for director, without objection to such nomination) shall be considered as though
such individual were a member of the Incumbent Board, but excluding for this purpose, any
such individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board; or

          (iii) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Corporation (a “Business
Combination”), in each case, unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the beneficial owners,
respectively, of the Corporation Common Stock and Voting Stock immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then-outstanding shares of common stock and the combined voting power of
the then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation’s assets either directly or
through one or more subsidiaries) in substantially the same proportions relative to each
other as their ownership, immediately prior to such Business Combination, of the Corporation
Common Stock and Voting Stock of the Corporation, as the case may be, (B) no Person

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(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.

          (b) “Management Objectives” means Relative Total Shareholder Return goals established by the
Board for the Corporation for the Performance Period covered by this Agreement as described in
Section 2 of this Agreement.

          (c) “Performance Period” means the period commencing with the closing price of the Common
Shares of the Corporation on                                          through the time of the determination of the closing price
on the New York Stock Exchange on the day of the Corporation’s annual earnings release in
                                        .

          (d) “Relative Total Shareholder Return” or “Relative TSR” means the return, including
reinvested dividends (or as determined at the beginning of the Performance Period in such manner as
is consistent with the index), shareholders earn from investing in Common Shares, relative to the
return earned from an investment in each of the following: (i) a benchmark peer group index
comprised of the                                          companies set forth on Exhibit A and (ii) all the companies
comprising the Standard & Poor’s 400 Midcap Index at the closing prices of                                         .

          (e) “Termination for Good Cause” means the Grantee’s termination of the Grantee’s employment
with the Corporation or a Subsidiary as a result of the occurrence of any of the following:

          (i) a change in the Grantee’s principal location of employment that is greater than
fifty (50) miles from its location as of the date hereof without the Grantee’s

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consent; provided, however, that the Grantee hereby acknowledges that the Grantee may
be required to engage in travel in connection with the performance of the Grantee’s duties
hereunder and that such travel shall not constitute a change in the Grantee’s principal
location of employment for purposes hereof;

          (ii) a material diminution in the Grantee’s base compensation;

          (iii) a change in the Grantee’s position with the Corporation without the Grantee’s
consent such that there is a material diminution in the Grantee’s authority, duties or
responsibilities; or

          (iv) any other action or inaction that constitutes a material breach by the Corporation
of the agreement under which the Grantee provides services.

Notwithstanding the foregoing, the Grantee’s termination of the Grantee’s employment with the
Corporation as a result of the occurrence of any of the foregoing shall not constitute a
“Termination For Good Cause” unless (A) the Grantee gives the Corporation written notice of such
occurrence within ninety (90) days of such occurrence and such occurrence is not cured by the
Corporation within thirty (30) days of the date on which such written notice is received by the
Corporation and (B) the Grantee actually terminates his or her employment with the Corporation
prior to the three hundred sixty-fifth (365th) day following such occurrence.

          (f) Capitalized terms used herein without definition shall have the meanings assigned to them
in the Plan.

     2. Management Objectives.

          The Management Objectives for the Performance Period covered by this Agreement are set forth
on Exhibit B-1. The following applies with respect to the Management Objectives:

          (a) Each Management Objective shall be evaluated separately with the total award determined
through the matrix set forth on Exhibits B-1 and B-2, which correlates the
Corporation’s performance against each Management Objective.

          (b) In no event shall the Grantee be entitled to receive more than 200% of the Performance
Shares granted hereunder.

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     3. Grant of Performance Shares.

          The Corporation hereby grants to the Grantee the number of Performance Shares specified above,
which may be earned by the Grantee during the Performance Period as set forth in Section 4 of this
Agreement.

     4. Earned Shares.

          The Performance Shares granted hereby shall be earned based on the level of the Corporation’s
results with respect to each of the Management Objectives established for the Performance Period
covered by this Agreement. The number of Performance Shares earned shall be determined based on
the level of results of the Management Objectives in accordance with the matrix, which correlates
performance against both measures, as set forth on Exhibits B-1 and B-2. No additional Performance Shares shall be earned for
results in excess of the maximum level of results for the Management Objectives. If results for a
Management Objective are attained at interim levels of performance on the matrix, a proportionate
number of Performance Shares shall be earned, as determined by mathematical interpolation, as
described by example in Exhibit B-1. If the Corporation’s performance with respect to both
Management Objectives is determined to be below the 10th percentile, the number of
Performance Shares earned, if any, shall be at the discretion of the Committee, except in the case
of Covered Employees.

     5. Payment of Awards.

          Payment shall be made in the form of the Corporation’s Common Shares, cash or a combination of
Common Shares and cash, as determined by the Committee in its sole discretion. Final awards shall
be paid, less applicable taxes, as soon as practicable after the receipt of audited financial
statements relating to the last fiscal year of the Performance Period covered by this Agreement and
the determination by the Committee of the level of attainment of each Management Objective, (but in
all events by the last day of the fiscal year following the last fiscal year of the Performance
Period); provided, however, that in the event the award becomes nonforfeitable pursuant to Section
6, the award (except as otherwise required under Section 13) shall be payable within 30 days of
becoming nonforfeitable.

          Any payment of awards due pursuant to this Agreement to a deceased Grantee shall be paid to
the beneficiary designated by the Grantee by the latest Designation of Death Beneficiary
in the form attached as Exhibit C hereto filed by the Grantee with the Corporation.
If no such

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beneficiary has been designated or survives the Grantee, payment shall be made to the
Grantee’s legal representative. A beneficiary designation may be changed or revoked by a Grantee
at any time, provided the change or revocation is filed with the Corporation.

          Prior to payment, the Corporation shall only have an unfunded and unsecured obligation to make
payment of earned awards to the Grantee.

     6. Effect of Change in Control.

          In the event of a Change in Control after the Date of Grant but prior to the end of the
Performance Period, the Grantee shall be deemed to have earned 100% of the Performance Shares
granted hereunder as of the date of the Change in Control, and such earned Performance Shares shall
be payable in the form of Common Shares. The Performance Shares earned under this Section 6 shall
be paid to the Grantee as soon as practicable following the end of the Performance Period, but in
all events by the last day of the fiscal year following the last fiscal year of the Performance
Period, only if the Grantee remains employed by the Corporation or a Subsidiary as of the end of
the Performance Period, otherwise such earned Performance Shares shall be forfeited; provided, that
if, prior to the end of the Performance Period, the Grantee’s employment with the Corporation or a
Subsidiary is terminated by the Grantee as a “Termination for Good Cause,” the Grantee is
terminated by the Corporation other than as a “Termination for Cause,” or the Grantee’s employment
with the Corporation or a Subsidiary terminates under the circumstances set forth in Section 7(a)
through 7(d) hereof, then the Performance Shares earned under this Section 6 shall become
immediately nonforfeitable upon such termination. Notwithstanding anything in this Section 6 to
the contrary, in connection with a Business Combination the result of which is that the Corporation
Common Stock and Voting Stock is exchanged for or becomes exchangeable for securities of another
entity, cash or a combination thereof, if the entity resulting from such Business Combination does
not assume the Performance Shares evidenced hereby and the Corporation’s obligations hereunder, or
replace the Performance Shares evidenced hereby with a substantially equivalent security of the
entity resulting from such Business Combination, then the Performance Shares evidenced hereby shall
become immediately nonforfeitable as of immediately prior to such Business Combination.

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     7. Effect of Death, Disability or Retirement.

          If the Grantee’s employment with the Corporation or one of its Subsidiaries should terminate
under the circumstances set forth in Section 7(a) through 7(d) below, prior to the payment of an
award, the extent to which the Performance Shares granted hereby shall be deemed to have been
earned shall be determined as if the Grantee’s employment had not terminated and the result shall
be multiplied by a fraction, the numerator of which is the number of full months the Grantee was
employed during the Performance Period and the denominator of which is the total number of months
in the Performance Period; provided, however, the Board, upon the recommendation of the Committee,
may, in its discretion, increase payments made under the foregoing circumstances up to the full
amount payable for service throughout the Performance Period:

          (a) because of death;

          (b) because of permanent disability;

          (c) on or after the date on which the Grantee attains age 65 and on such date the Grantee
shall have completed five (5) or more years of continuous employment with the Corporation and its
Subsidiaries; or

          (d) any sum of the Grantee’s age and the number of the Grantee’s years of continuous
employment with the Corporation and its Subsidiaries on such termination date equals or exceeds 70.

     8. Effect of Other Terminations of Employment; Detrimental Activity.

          In the event that the Grantee’s employment shall terminate prior to the payment of an award in
a manner other than any specified in Section 7 hereof or if the Grantee shall at any time engage in
any Detrimental Activity (as defined below), the Grantee shall forfeit any rights he or she may
have in any Performance Shares that have not been paid out to the Grantee prior to the time of such
termination; provided, however, that the Board, upon recommendation of the Committee, may order
payment of an award in an amount determined as in Section 7 hereof for termination for the reasons
set forth in Section 7 hereof, under circumstances which warrant such exceptional treatment in the
judgment of the Committee and the Board.

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     9. Detrimental Activity.

          If the Grantee, 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 9(d)(v)(B)) if the Grantee
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 Grantee shall:

          (a) Return to the Corporation all Performance Shares that the Grantee has not disposed of and
an amount equal to all cash paid out 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 Performance Shares that the Grantee has disposed of that were paid out
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 value of such Performance Shares on
the date such Performance Shares were paid out.

          (c) To the extent that the amounts referred to in Section 9(a) and 9(b) above 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 Grantee, whether as wages,
deferred compensation or vacation pay or in the form of any other benefit or for any other reason.

          (d) 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 Grantee was employed by
the Corporation if such development is being actively pursued by the Corporation during the
one-year period first referred to in this Section 9) for which the Grantee 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

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Corporation or a Subsidiary manufactures, sells, markets, services, or installs such
product or service, or engages in such business activity.

          (ii) Soliciting any employee of the Corporation or a Subsidiary to terminate his or her
employment with the Corporation or a Subsidiary.

          (iii) The disclosure to anyone outside the Corporation or a Subsidiary, or the use in
other than the Corporation or a Subsidiary’s business, without prior written authorization
from the Corporation, of any confidential, proprietary or trade secret information or
material relating to the business of the Corporation and its Subsidiaries, acquired by the
Grantee 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 Grantee during employment by the Corporation and any Subsidiary, relating
in any manner to the actual or anticipated business, research or development work of the
Corporation or any Subsidiary or the failure or refusal to do anything reasonably necessary
to enable the Corporation or any Subsidiary to secure a patent where appropriate in the
United States and in other countries.

          (v) Activity that results in Termination for Cause. For the purposes of this Section 9
and Section 6, “Termination for Cause” shall mean a termination:

          (A) due to the Grantee’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 Grantee 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.

     10. Shares Non-Transferable.

          The Performance Shares granted hereby that have not yet been paid out are not transferable
other than by will or the laws of descent and distribution.

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     11. Dilution and Other Adjustments.

          In the event of any change in the aggregate number of outstanding Common Shares by reason of
any stock dividend or stock split, recapitalization, reclassification, merger, consolidation,
combination or exchange of shares or other similar corporate change, the Committee shall adjust the
Management Objectives and/or the number of Performance Shares then held by the Grantee. Such
adjustments made by the Committee shall be conclusive and binding for all purposes of this
Agreement.

     12. Withholding Taxes.

          To the extent that the Corporation is required to withhold federal, state, local or foreign
taxes in connection with the delivery of Common Shares to the Grantee or other person under this
Agreement, and the amounts available to the Corporation for such withholding are insufficient, it
shall be a condition to the receipt of such delivery that the Grantee or such other person will
make arrangements satisfactory to the Corporation for payment of the balance of such taxes required
to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment
of a portion of such benefit. In no event, however, shall the Corporation accept Common Shares for
payment of taxes in excess of required tax withholding rates, except that, in the discretion of the
Committee, the Grantee or such other person may surrender Common Shares owned for more than 6
months to satisfy any tax obligations resulting from any such transaction.

     13. Compliance with Section 409A of the Code.

          To the extent applicable, it is intended that this Agreement and the Plan comply with the
provisions of Section 409A of the Code, so that the income inclusion provisions of Section
409A(a)(1) do not apply to the Grantee. This Agreement and the Plan shall be administered in a
manner consistent with this intent, and any provision that would cause the Agreement or the Plan to
fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply
with Section 409A of the Code (which amendment may be retroactive to the extent permitted by
Section 409A of the Code and may be made by the Corporation without the consent of the Grantee).
In particular, to the extent the Performance Shares become nonforfeitable pursuant to Section 6 and
payment at such time would subject the Grantee to penalties under Section 409A of the Code, then
notwithstanding anything to the contrary in Section 5, payment

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will be made, to the extent necessary to comply with the provisions of Section 409A of the
Code, to the Grantee on the earlier of (a) the Grantee’s “separation from service” with the
Corporation (determined in accordance with Section 409A of the Code); provided, however, that if
the Grantee is a “specified employee” (within the meaning of Section 409A of the Code), the payment
date shall be the date that is six months after the date of the Grantee’s “separation of service”
with the Corporation, (b) the date payment otherwise would have made under Section 5 above, or (c)
the Grantee’s death. Reference to Section 409A of the Code is to Section 409A of the Internal
Revenue Code of 1986, as amended, and will also include any proposed, temporary or final
regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department
of the Treasury or the Internal Revenue Service.

     14. Employment Rights.

          For purposes of this Agreement, the continuous employ of the Grantee with the Corporation or a
Subsidiary shall not be deemed interrupted, and the Grantee 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. This 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 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 Grantee 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 Grantee.

     15. Data Protection.

          Information about the Grantee and the Grantee’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 Grantee 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 Grantee’s country or elsewhere, including the United States of America. The Grantee
consents to the processing of information relating to the Grantee and the Grantee’s participation
in the Plan in any one or more of the ways referred to above.

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     16. Amendments.

          Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent
that the amendment is applicable hereto; provided, however, that no amendment shall adversely
affect the rights of the Grantee with respect to the Performance Shares without the Grantee’s
consent.

     17. Validity.

          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 to any other person or under any 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.

     18. Governing Law.

          This Agreement is made under, and shall be construed in accordance with the internal
substantive laws of the State of Ohio.

Executed as of the                      day of                     

             .

	 	 	 	 	 
	 	DIEBOLD, INCORPORATED	 

     The undersigned hereby acknowledges receipt of an executed original of this Agreement and
accepts the Performance Shares granted hereunder on the terms and conditions set forth herein and
in the Plan.

	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

[Signature]
	 	 

12exv10w5

Exhibit 10.5

DEFERRED SHARES AGREEMENT

     WHEREAS,                      (hereinafter called the “Grantee”) is a Non-Employee Director of
Diebold, Incorporated (hereinafter called the “Corporation”); and

     WHEREAS, the execution of a Deferred Shares Agreement (hereinafter called the “Agreement”)
substantially in the form hereof has been authorized by a resolution of the Board of Directors of
the Corporation (the “Board”) duly adopted on                 (the “Date of Grant”).

     NOW, THEREFORE, the Corporation hereby confirms to the Grantee, effective as of the Date of
Grant, pursuant to the Corporation’s 1991 Equity and Performance Incentive Plan (As Amended and
Restated as of April 13, 2009) (the “Plan”), the grant of                 Deferred Shares subject to the
terms and conditions of the Plan and the terms and conditions described below.

1. Definitions.

               Capitalized terms used herein without definition shall have the meanings assigned to them in
the Plan. As used in this Agreement:

	 	(a)	 	A “Change in Control” shall be deemed to have occurred if any of the following
events shall occur:

	 	(i)	 	The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either: (A) the then-outstanding shares of common stock of the Corporation (the
“Corporation Common Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Corporation entitled to vote
generally in the election of directors (“Voting Stock”); provided, however,
that for purposes of this subsection (i), the following acquisitions shall not
constitute a Change in Control: (1) any acquisition directly from the
Corporation, (2) any acquisition by the Corporation, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any Subsidiary of the Corporation, or (4) any acquisition by any
Person pursuant to a transaction which complies with clauses (A), (B) and (C)
of subsection (iii) of this Section 1(a); or
	 
	 	(ii)	 	Individuals who, as of the date hereof, constitute the Board
(as modified by this subsection (ii), the “Incumbent Board”) cease for any
reason (other than death or disability) to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Corporation’s shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board (either by a specific vote or
by approval of the proxy statement of the Corporation in

 

 

	 	 	 	which such person is named as a nominee for director, without objection to
such nomination) shall be considered as though such individual were a member
of the Incumbent Board, but excluding for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board; or
	 
	 	(iii)	 	Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Corporation (a “Business Combination”), in each case, unless, following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Corporation
Common Stock and Voting Stock immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation’s assets either directly or through one or more subsidiaries) in
substantially the same proportions relative to each other as their ownership,
immediately prior to such Business Combination, of the Corporation Common Stock
and Voting Stock of the Corporation, as the case may be, (B) no Person
(excluding any entity resulting from such Business Combination or any employee
benefit plan (or related trust) sponsored or maintained by the Corporation or
such entity resulting from such Business Combination) beneficially owns,
directly or indirectly, 15% or more of, respectively, the then-outstanding
            shares of common stock of the entity resulting from such Business Combination,
or the combined voting power of the then-outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board providing for such Business
Combination; or
	 
	 	(iv)	 	Approval by the shareholders of the Corporation of a complete
liquidation or dissolution of the Corporation.

	 	(b)	 	“Deferral Period” means the period commencing on the Date of Grant and ending
on the latest of (i) the third anniversary of the Date of Grant, (ii) the date the
Grantee attains age 69, or (iii) the date of the Grantee’s “separation from service” as
so defined for purposes of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of
1986, as amended (the “Code”).

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2. Vesting of Deferred Shares.

	 	(a)	 	General. Subject to the terms and conditions of Section 2(b), (c), (d)
and (e) hereof, the Grantee’s right to receive Deferred Shares under this Agreement
shall become nonforfeitable on the first anniversary of the Date of Grant.
	 
	 	(b)	 	Effect of Change in Control. In the event of (i) a Change in Control
after the Date of Grant but prior to the first anniversary of the Date of Grant and
(ii) prior to the first anniversary of the Date of Grant, the Grantee’s service as a
Non-Employee Director of the Corporation terminates (A) in connection with a request
made by the Corporation or the Board that the Grantee resign as a Non-Employee Director
or (B) as a result of the Grantee not being nominated for re-election as a Non-Employee
Director in connection with the Change in Control, then the Deferred Shares granted
hereby shall immediately become nonforfeitable. Notwithstanding anything in this
Section 2(b) to the contrary, in connection with a Business Combination the result of
which is that the Corporation Common Stock and Voting Stock is exchanged for or becomes
exchangeable for securities of another entity, cash or a combination thereof, if the
entity resulting from such Business Combination does not assume the Deferred Shares
confirmed hereby and the Corporation’s obligations hereunder, or replace the Deferred
Shares confirmed hereby with a substantially equivalent security of the entity
resulting from such Business Combination, then the Deferred Shares granted hereby shall
immediately become nonforfeitable as of immediately prior to such Business Combination.
	 
	 	(c)	 	Effect of Death, Disability. If the Grantee’s service as a
Non-Employee Director should terminate because of death or Disability (as so defined
for purposes of Section 409A(a)(2)(A)(ii) of the Code) prior to the first anniversary
of the Date of Grant, the Deferred Shares granted hereby shall immediately become
nonforfeitable.
	 
	 	(d)	 	Effect of Retirement. If the Grantee’s service as a Non-Employee
Director should terminate prior to the first anniversary of the Date of Grant, but more
than six months after the Date of Grant and when he or she has served as a Director for
ten full years or more or attained age 72, the Deferred Shares granted hereby shall
become immediately nonforfeitable.
	 
	 	(e)	 	Effect of Other Termination of Service. In the event that the
Grantee’s service as a Non-Employee Director shall terminate prior to the first
anniversary of the Date of Grant in a manner other than any specified in Section 2(b),
2(c) or 2(d) hereof, the Grantee shall forfeit any Deferred Shares that have not become
nonforfeitable by such Grantee at the time of such termination; provided, however, that
the Board upon recommendation of the Board Governance Committee may order that any part
or all of such Deferred Shares become nonforfeitable.

3. Issuance of Common Shares.

               Except as otherwise provided in Section 7 hereof, the Deferred Shares granted hereby, to the
extent vested, shall be issued to the Grantee in the form of Common Shares at the end of the
Deferral Period, provided, however, that (a) in the event of the death or Disability of

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the Grantee, the Common Shares shall be issued at the time of such event, and (b) in the event
the Grantee experiences a “separation from service” as so defined for purposes of Section
409A(a)(2)(A)(i) of the Code within two years following a Change in Control (but only to the extent
that such Change in Control constitutes a “change in ownership or effective control of the
Corporation, or a change in the ownership of a substantial portion of the assets of a Corporation”
as so defined for purposes of Section 409A(a)(2)(A)(v) of the Code), the Common Shares shall be
issued at the time of such “separation from service.”

4. Payment of Dividend Equivalents.

               During the Deferral Period, from and after the Date of Grant and until the earlier of (a) the
time when Common Shares are issued in accordance with Section 3 hereof, or (b) the time when the
Deferred Shares are forfeited in accordance with Section 2(e) hereof, the Corporation shall pay to
the Grantee, whenever a dividend is paid on Common Shares (or at such later time as may be
consistent with the Corporation’s administrative requirements), an amount of cash equal to the
product of the per-share amount of the dividend paid times the number of such Deferred Shares.

5. Deferred Shares Non-Transferable.

               Neither the Deferred Shares granted hereby nor any interest therein or in the Common Shares
related thereto shall be transferable other than by will or the laws of descent and distribution
prior to payment.

6. Dilution and Other Adjustments.

               In the event of any change in the aggregate number of outstanding Common Shares by reason of
(a) any stock dividend, stock split, combination of shares, recapitalization or other change in the
capital structure of the Corporation, or (b) any merger, consolidation, spin-off, split-off,
spin-out, split-up, reorganization, partial or complete liquidation or other distribution of
assets, issuance of rights or warrants to purchase securities, or (c) any other corporate
transaction or event having an effect similar to any of the foregoing, then the Board shall adjust
the number of Deferred Shares then held by the Grantee in such manner as to prevent the dilution or
enlargement of the rights of the Grantee that would otherwise result from such event. Furthermore,
in the event that any transaction or event described or referred to in the immediately preceding
sentence shall occur, the Board may provide in substitution of any or all of the Grantee’s rights
under this Agreement such alternative consideration as the Board may determine in good faith to be
equitable under the circumstances. Such adjustments made by the Board shall be conclusive and
binding for all purposes of this Agreement.

7. Compliance with Section 409A of the Code.

               To the extent applicable, it is intended that this Agreement and the Plan comply with the
provisions of Section 409A of the Code, so that the income inclusion provisions of Section
409A(a)(1) do not apply to the Grantee. This Agreement and the Plan shall be administered in a
manner consistent with this intent.

8. Becoming an Employee.

               If the Grantee becomes an employee of the Corporation or a Subsidiary after the Date of Grant
while remaining a member of the Board of Directors of the Corporation, any Deferred Shares held by
the Grantee at the time of commencement of such employment shall not be affected thereby.

4

 

9. Plan.

               This Agreement is subject to the terms and conditions of the Plan.

10. Amendments.

               Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent
that the amendment is applicable hereto; provided, however, that no amendment shall adversely
affect the rights of the Grantee with respect to Deferred Shares without the Grantee’s consent.

11. Validity.

               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.

12. Governing Law.

               This Agreement is made under, and shall be construed in accordance with, the internal
substantive laws of the State of Ohio.

               The undersigned hereby acknowledges receipt of an executed original of this Agreement and
accepts the Deferred Shares granted hereunder on the terms and conditions set forth herein and in
the Plan.

	 	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	[Signature]

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

	 	 	 	 	 
	 	DIEBOLD, INCORPORATED

[name of signatory]

[title of signatory]
 	 

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