Document:

DBD 6.30.2015 EX 10.1

EMPLOYEE AGREEMENT
This EMPLOYEE AGREEMENT (“Agreement”), dated as of [ENTER DATE], by and between DIEBOLD, INCORPORATED, an Ohio corporation (the “Company”), and [ENTER NAME] (the “Employee”).
WHEREAS, the Company develops, manufactures, sells, installs, operates, and monitors various products, systems, and services, including software solutions;
WHEREAS, the Company wishes to employ the Employee or, if the Employee is already employed by the Company, the Company wishes to continue to employ the Employee;
WHEREAS, the Company desires to set forth the general terms of the Employee’s employment with the Company;
WHEREAS, the Employee is a key employee who is expected to make, or continue to make, major contributions to the profitability, growth and financial strength of the Company and its Subsidiaries (as that term is hereafter defined);
WHEREAS, the Company recognizes that, as is the case for most publicly held companies, the possibility of a Change in Control (as that term is hereafter defined) exists;
WHEREAS, the Company desires to assure itself and its Subsidiaries of both present and future continuity of management in the event of a Change in Control and desires to establish certain minimum compensation rights for key employees, including the Employee, applicable in the event of a Change in Control;
WHEREAS, the Company wishes to ensure that key employees are not practically disabled from discharging their duties upon a Change in Control; and
WHEREAS, the Employee is willing to render services on the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the Company and the Employee agree as follows.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
		
	1.
	Certain Definitions.  For the purposes of this Agreement, the following terms shall have the respective meanings set forth below:

		
	(a)
	“Board” means the board of directors of the Company.

		
	(b)
	“Cause” means that, prior to any termination pursuant to Section 5(b) hereof for “Cause”, the Employee shall have committed:

		
	(1)
	an intentional act of fraud, embezzlement or theft in connection with his or her duties or in the course of his or her employment with the Company or any Subsidiary;

		
	(2)
	intentional wrongful damage to property of the Company or any Subsidiary;

		
	(3)
	intentional wrongful disclosure of secret processes or confidential information of the Company or any Subsidiary; or

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	(4)
	intentional wrongful engagement in any competitive activity which would constitute a material breach of the duty of loyalty (“Competitive Activity”);

and any such act shall have been materially harmful to the Company and its Subsidiaries taken as a whole. For purposes of this Agreement, no act, or failure to act, on the part of the Employee shall be deemed “intentional” if it was due primarily to an error in judgment or negligence, but shall be deemed “intentional” only if done, or omitted to be done, by the Employee not in good faith and without reasonable belief that his or her action or omission was in or not opposed to the best interest of the Company and its Subsidiaries. 
Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for “Cause” hereunder unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the Board then in office at a meeting of the Board called and held for such purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with his or her counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Employee had committed an act set forth above in this Section 1(b) and specifying the particulars thereof in detail.  Nothing herein shall limit the right of the Employee or his or her beneficiaries to contest the validity or propriety of any such determination.
		
	(c)
	“Change in Control” means the occurrence of any of the following during the Term:

		
	(1)
	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 thirty percent (30%) or more of either: (A) the then-outstanding shares of common stock of the Company (the “Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (“Voting Stock”); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (iv) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (3) below; or

		
	(2)
	individuals who, as of the date hereof, constitute the Board (as modified by this subsection (2), 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 Company’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 Company 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

		
	(3)
	consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (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 Company Common Stock and Voting Stock immediately prior to such Business Combination 

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beneficially own, directly or indirectly, more than fifty percent (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 Company or all or substantially all of the Company’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 Company Common Stock and Voting Stock of the Company, 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 Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, thirty percent (30%) 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

		
	(4)
	approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

A “Change in Control” will be deemed to occur (i) with respect to  a Change in Control pursuant to subsection (1) above, on the date that any Person becomes the beneficial owner of thirty percent (30%) or more of either the Company Common Stock or the Voting Stock, (ii) with respect to a Change in Control pursuant to subsection (2) above, on the date the members of the Incumbent Board first cease for any reason (other than death or disability) to constitute at least a majority of the Board, (iii) with respect to a Change in Control pursuant to subsection (3) above, on the date the applicable transaction closes and (iv) with respect to a Change in Control pursuant to subsection (4) above, on the date of the shareholder approval.  Notwithstanding the foregoing provisions, a “Change in Control” shall not be deemed to have occurred for purposes of this Agreement solely because of a change in control of any Subsidiary by which the Employee may be employed.
		
	(d)
	“Date of Termination” means the date on which the Employee incurs a “separation from service,” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), with the Company and its Subsidiaries.

		
	(e)
	“Disabled” means the Employee has become permanently disabled within the meaning of, and begins actually to receive disability benefits pursuant to, the long-term disability plan in effect immediately prior to the Change in Control for key employees of the Company and its Subsidiaries.

		
	(f)
	“Good Reason” means:

		
	(1)
	failure to elect, reelect or otherwise maintain the Employee in the offices or positions in the Company or any Subsidiary which the Employee held immediately prior to a Change in Control, or the removal of the Employee as a director of the Company (or any successor thereto) if the Employee shall have been a director of the Company immediately prior to the Change in Control;

		
	(2)
	a material reduction in the nature or scope of the responsibilities or duties attached to the position or positions with the Company and its Subsidiaries which the Employee held immediately prior to the Change in Control, a material reduction in the aggregate of the 

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Employee’s Base Pay (as that term is hereafter defined) and Incentive Pay (as that term is hereafter defined) opportunity received from the Company, or the termination of the Employee’s rights to any material Employee Benefits (as that term is hereafter defined) to which he or she was entitled immediately prior to the Change in Control or a material reduction in scope or value thereof without the prior written consent of the Employee;

		
	(3)
	the liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or a significant portion of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization or otherwise) to which all or a significant portion of its business and/or assets have been transferred (directly or by operation of law) shall have assumed all duties and obligations of the Company under this Agreement pursuant to Section 13 hereof;

		
	(4)
	the Company shall relocate its principal executive offices, or the Company or any Subsidiary shall require the Employee to have his or her principal location of work changed, to any location which is in excess of 50 miles from the location thereof immediately prior to the Charge in Control or the Company or any Subsidiary shall require the Employee to travel away from his or her office in the course of discharging his or her responsibilities or duties hereunder significantly more (in terms of either consecutive days or aggregate days in any calendar year) than was required of him or her prior to the Change in Control without, in either case, the Employee’s prior written consent; or

		
	(5)
	without limiting the generality or the effect of the foregoing, any material breach of this Agreement by the Company or any successor thereto.

The Employee is not entitled to assert that his or her termination is for Good Reason unless the Employee gives the Company written notice of the event or events that are the basis for such claim within ninety (90) days after the event or events occur, describing such claim in reasonably sufficient detail to allow the Company to address the event or events and a period of not less than thirty (30) days after to cure the alleged condition.
		
	(g)
	“Subsidiary” means a corporation, company or other entity (i) more than fifty percent (50%) of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than fifty percent (50%) of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter owned or controlled, directly or indirectly, by the Company, but such corporation, company or other entity shall be deemed to be a Subsidiary only so long as such ownership or control exists.

		
	(h)
	“Term” means the period commencing as of the date hereof and expiring as of the close of business on [insert date that is two years from the date of the agreement], provided, however, that (i) commencing on January 1, 2017 and each January 1 thereafter, the Term shall automatically be extended for an additional year unless, not later than September 30 of the year immediately preceding such January 1, the Company or the Employee shall have given notice that it or he/she, as the case may be, does not wish to have the Term extended and (ii) upon a Change in Control, the Term shall be extended to the third anniversary of such Change in Control. Notwithstanding the foregoing, subject to Section 11 hereof, if, at any time prior to a Change in Control, the Employee for any reason is no longer an employee of the Company or a Subsidiary, thereupon the Term shall be deemed to have expired.

		
	2.
	Acknowledgment of Consideration.  The Employee agrees that this Agreement was entered into for good and valuable consideration, including, but not limited to the Company’s employment or continued 

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employment of the Employee, the Company’s provision of Protected Information (as that term is hereafter defined) to the Employee, and the compensation and benefits associated with that employment.

		
	3.
	Employment Prior to a Change in Control.  Prior to a Change in Control, the following terms shall govern the Employee’s employment.

		
	(a)
	Employment At-Will.  The Employee is employed on an at-will basis.  This means that either the Company or the Employee may terminate the Employee’s employment at any time, with or without notice, and with or without reason.  The Employee understands and agrees that nothing in this Agreement constitutes an express or implied contract, or any promise or commitment, guaranteeing continued employment with the Company.  The Company reserves the sole right to interpret, administer, change, revise, amend, or abolish any or all employment compensation, benefits, policies, procedures, or practices at any time, with or without notice.

		
	(b)
	General Employment Duties.  The Employee agrees to diligently perform his or her job duties as may be assigned by the Company to the best of his or her ability.  The Employee will keep informed of the Company’s policies, procedures, and practices, and will comply with them at all times.  The Employee also agrees that, while employed by the Company, the Employee shall not engage in any activity that might impair or otherwise interfere with the proper performance of the Employee’s duties or responsibilities.

		
	4.
	Employment Following a Change in Control.  Effective only upon a Change in Control, the following terms shall apply:

		
	(a)
	The Employee shall devote substantially all of his or her time during normal business hours (subject to vacations, sick leave and other absences in accordance with the policies of the Company and its Subsidiaries as in effect for key employees immediately prior to the Change in Control) to the business and affairs of the Company and its Subsidiaries, but nothing in this Agreement shall preclude the Employee from devoting reasonable periods of time during normal business hours to (i) serving as a director, trustee or member of or participant in any organization or business so long as such activity is not directly competitive with the business of the Company as then being carried on, (ii) engaging in charitable and community activities, or (iii) managing his or her personal investments.

		
	(b)
	For his or her services pursuant to Section 4(a) hereof, the Employee shall (i) be paid an annual base salary at a rate not less than the Employee’s annual fixed or base compensation (payable monthly or otherwise as in effect for key employees of the Company immediately prior to the occurrence of a Change in Control) or such higher rate as may be approved from time to time by the Board, the Compensation Committee thereof or management (which base salary at such rate is herein referred to as “Base Pay”) and (ii) have a bona fide opportunity to earn an annual amount equal to not less than the annual bonus, incentive or other opportunity for payments of cash compensation in addition to the amounts referred to in clause (i) above made or to be made in regard to services rendered in any calendar year during the year in which the Change in Control occurred pursuant to any bonus, incentive, profit-sharing, performance, discretionary pay or similar policy, plan, program or arrangement of the Company or any Subsidiary or any successor thereto providing an annual cash bonus opportunity at least equal to the cash bonus opportunity payable thereunder (in both value and achievability) prior to a Change in Control (“Incentive Pay”); provided, however, that with the prior written consent of the Employee, nothing herein shall preclude a change in the mix between Base Pay and Incentive Pay so long as the aggregate annual cash compensation opportunity for the Employee in any one calendar year is not reduced in connection therewith or as a result thereof; and provided further, however, that in no event shall any increase in the Employee’s aggregate cash compensation or any portion thereof in any way diminish any other obligation of the Company under this Agreement.

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	(c)
	For his or her services pursuant to Section 4(a) hereof, the Employee shall be a full participant in, and shall be entitled to the perquisites, benefits and service credit for benefits as provided under, any and all employee retirement, income and welfare benefit policies, plans, programs or arrangements in which key employees of the Company or its Subsidiaries participate, including without limitation any stock option, stock purchase, stock appreciation, restricted stock grant, savings, pension, supplemental retirement or other retirement, income or welfare benefit, deferred compensation, group and/or executive life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by the Company or any Subsidiary), disability, salary continuation, expense reimbursement and other employee benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs, or arrangements that may be adopted hereafter by the Company or any Subsidiary providing perquisites, benefits and service credit for benefits at least equal to those provided or are payable thereunder prior to a Change in Control (collectively, “Employee Benefits”); provided, however, that except as expressly provided in, and subject to the terms of, Section 6(a)(1)(B) hereof, the Employee’s rights thereunder shall be governed by the terms thereof and shall not be enlarged hereunder or otherwise affected hereby.  Subject to the proviso in the immediately preceding sentence, if and to the extent such perquisites, benefits or service credit for benefits are not payable or provided under any such policy, plan, program or arrangement as a result of the amendment or termination thereof, then the Company shall itself pay or provide therefor.  Nothing in this Agreement shall preclude improvement or enhancement of any such Employee Benefits, provided that no such improvement shall in any way diminish any other obligation of the Company under this Agreement.

		
	5.
	Termination of Employment Following a Change in Control.

		
	(a)
	Death or Disability. The Employee’s employment shall terminate automatically if the Employee dies or becomes Disabled following a Change in Control.

		
	(b)
	Cause.  The Company may terminate the Employee’s employment for Cause or without Cause following a Change in Control.

		
	(c)
	Good Reason.  The Employee’s employment may be terminated by the Employee for Good Reason or by the Employee voluntarily without Good Reason following a Change in Control.

		
	(d)
	Notice of Termination.  Any termination by the Company for Cause, or by the Employee for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 13(b).  “Notice of Termination” means a written notice that (1) indicates the specific termination provision in this Agreement relied upon, (2) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment under the provision so indicated, and (3) if the termination date is other than the date of receipt of such notice, specifies the termination date (which termination date shall be not more than thirty (30) days after the giving of such notice).  The failure by the Employee or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of the Employee or the Company, respectively, hereunder or preclude the Employee or the Company, respectively, from asserting such fact or circumstance in enforcing the Employee’s or the Company’s respective rights hereunder.

		
	6.
	Exclusive Obligations of the Company upon Certain Terminations Following a Change in Control.

		
	(a)
	Good Reason; Other Than for Cause.  If, during the three (3) year period following a Change in Control, (X) the Company terminates the Employee’s employment other than for Cause, death, or Disability or (Y) the Employee resigns for Good Reason:

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	(1)
	the Company shall pay to the Employee (or the Employee’s estate or beneficiary, in the event of the Employee’s death after the Date of Termination), at the time specified herein (except as otherwise provided by Section 13(d)), the following amounts:

		
	(A)
	a lump sum payment equal to the sum of (i) ____ times the Base Pay of the Employee plus (ii) ____ times the target annual Incentive Pay of the Employee, in lieu of any further payments to the Employee for periods subsequent to the Date of Termination (collectively, the “Severance Payment”), payable within six (6) business days following the Date of Termination, provided all conditions to payment have been satisfied;

		
	(B)
	commencing on the Date of Termination and continuing until the earlier of (i) the expiration of the ___ year anniversary of the Date of Termination, (ii) the Employee’s death, or (iii) the Employee’s attainment of age 65 (such time period, the “Benefits Period”), the Company shall continue to provide the Employee (and the Employee’s eligible dependents and beneficiaries) with medical, dental, vision, and prescription drug benefits (collectively “health benefits”) and life insurance benefits substantially similar to those which the Employee was receiving or entitled to receive immediately prior to the Date of Termination (and if and to the extent that such benefits shall not or cannot be paid or provided under any policy, plan, program or arrangement of the Company or its Subsidiaries solely in order to comply with applicable law or due to the fact that the Employee is no longer an officer or employee of the Company and its Subsidiaries, then the Company shall itself pay or provide for the payment to the Employee (and the Employee’s eligible dependents and beneficiaries) such health benefits and life insurance benefits).  The Employee shall pay the cost, on an after-tax basis, for the continued health benefits coverage, on or about January 31 of the year following the year in which the Date of Termination occurs and continuing on or about each January 31 until January 31 of the year following the last year of the Benefits Period, and concurrently therewith (and no later than March 15 following each such January 31) the Company will make a lump sum payment to the Employee such that, after payment of all taxes incurred by the Employee as a result of the Employee’s receipt of the continued health benefits coverage and payment by the Company, the Employee retains an amount equal to the amount the Employee paid during the immediately preceding calendar year for the health benefits coverage described in this Section 6(a)(1)(B).  Without otherwise limiting the purposes or effect of Section 7 hereof, benefits provided or payable to the Employee pursuant to this Section 6(a)(1)(B) by reason of any “welfare benefit plan” of the Company (as the term “welfare benefit plan” is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) shall be reduced to the extent comparable welfare benefits are actually received by the Employee from another employer during the Benefits Period; and

		
	(C)
	a lump sum payment in an amount equal to the additional benefits that the Employee would have accrued under each qualified or nonqualified pension, profit sharing, deferred compensation or supplemental plan maintained by the Company for the Employee’s benefit had the Employee continued his or her employment with the Company for one additional year following his or her Date of Termination, provided that the Employee was fully vested under such plans immediately prior to his or her Date of Termination, payable within six (6) business days following the Date of Termination, provided all conditions to payment have been satisfied.

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Without limiting the rights of the Employee at law or in equity, if the Company fails to make any payment required to be made under Sections 4 and 6 of this Agreement on a timely basis, the Company shall pay interest on the amount thereof to the Employee until the date such payment is made at an annualized rate of interest equal to twelve percent (12%).
		
	(b)
	Release.  As a condition to receiving payments under this Section 6, no later than forty five (45) days after having been presented such release by the Company, the Employee shall have executed and delivered to the Company a general release of claims in favor of the Company, its current and former Subsidiaries, affiliates and stockholders, and the current and former directors, officers, employees and agents of the Company in a form acceptable to the Company, and the Employee’s general release shall have become irrevocable.

		
	7.
	No Set-Off; Company’s Obligations; Mitigation.  The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense, or other claim, right or action that the Company may have against the Employee or others.  In no event shall the Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Employee under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the Employee obtains other employment.

		
	8.
	Indemnification of Legal Fees.  Effective only upon a Change in Control, it is the intent of the Company that the Employee not be required to incur the expenses associated with the enforcement of his or her rights under this Agreement following such a Change in Control by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits and payments intended to be extended to the Employee hereunder following a Change in Control.  Accordingly, following a Change in Control if it should appear to the Employee that the Company has failed to comply with any of its obligations under this Agreement which arose following a Change in Control or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any litigation designed to deny, or to recover from, the Employee the benefits intended to be provided to the Employee hereunder, the Company irrevocably authorizes the Employee from time to time to retain counsel of his or her choice, at the expense of the Company as hereafter provided, to represent the Employee in connection with the initiation or defense of any litigation or other legal action with respect to this Agreement, whether by or against the Company, or any Subsidiary, director, officer, stockholder or other person affiliated with the Company.  Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to the Employee’s entering into an attorney-client relationship with such counsel, and in that connection the Company and the Employee agree that a confidential relationship shall exist between the Employee and such counsel. Following a Change in Control, the Company shall pay or cause to be paid and shall be solely responsible for any and all attorneys’ and related fees and expenses incurred by the Employee as a result of the Company’s failure to perform this Agreement or any provision hereof or as a result of the Company or any person contesting the validity or enforceability of this Agreement or any provision hereof as aforesaid, provided any such reimbursement of attorneys’ and related fees and expenses shall be made not later than December 31 of the year following the year in which the Employee incurred the expense.

		
	9.
	Section 280G.

		
	(a)
	In the event that any payment or benefit received or to be received by the Employee (including any payment or benefit received in connection with a Change in Control or the termination of the Employee’s employment pursuant to the terms of this Agreement) (all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments will only be 

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reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Employee would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments.

		
	(b)
	In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payment and payments and benefits due in respect of any equity not subject to Section 409A of the Code, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A of the Code as deferred compensation.

		
	(c)
	For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax:  (i) no portion of the Total Payments the receipt or enjoyment of which the Employee shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) reasonably acceptable to the Employee and selected by the accounting firm which was, immediately prior to the Change of Control, the Company’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

		
	(d)
	At the time that payments are made under this Agreement, the Company will provide the Employee with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations, including any opinions or other advice the Company received from Tax Counsel, the Auditor, or other advisors or consultants (and any such opinions or advice which are in writing will be attached to the statement). All such calculations and opinions shall be binding on the Company and the Employee.

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	10.
	Covenants of Employee.

		
	(a)
	Non-Competition and Non-Solicitation.  

		
	(1)
	Purpose and Definition.  To protect the Protected Information the Employee receives, and in consideration of receiving that Protected Information and compensation and benefits from the Company, and for other valuable consideration, the Employee agrees to the following non-competition and non-solicitation covenants.

		
	(2)
	As used in this Agreement, “Protected Information” means information possessed by the Company or a parent, predecessor, Subsidiary, joint venture, or partnership of the Company, or any other entity whose assets, stock, or business activities have been acquired by the Company (collectively, the “Related Companies”), whether developed by the Employee or otherwise, that is not generally known publicly and that has value, gives the Company or its Related Companies a competitive advantage or otherwise qualifies as a “trade secret” under applicable laws.  Protected Information includes information that has been provided to the Company or its Related Companies by a third party and that is subject to restrictions on disclosure and/or use. Protected Information will generally include, but is not limited to, research, software, engineering drawings, service documentation, competitive intelligence, supplier names and data, customer information, business strategies, planned acquisitions or divestitures, quotations, discounts, data compilations, items marked as “confidential”, “secret”, “proprietary” or “privileged”, and any other information the Company has not publicly or lawfully obtained from third parties who are not bound by a confidentiality agreement with the Company, is not Protected Information.  In the event the Employee is unsure if something is to be treated as Protected Information, the Employee shall treat it as such until expressly advised otherwise by an officer of the Company.

		
	(3)
	Noncompetition.  During the Employee’s employment and for a period of one (1) year after the Date of Termination, the Employee shall not: (A) directly or indirectly act in concert or conspire with any person employed by the Company in order to engage in or prepare to engage in or to have a financial or other interest in any business or any activity that the Employee knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on; or (B) serve as an employee, agent, partner, shareholder, director, or consultant for, or in any other capacity participate, engage, or have a financial or other interest in any business or any activity that the Employee knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on (provided, however, that notwithstanding anything to the contrary contained in this Agreement, the Employee may own up to two percent (2%) of the outstanding shares of the capital stock of a company whose securities are registered under Section 12 of the Securities Exchange Act of 1934).

		
	(4)
	Confidentiality.  The Company has advised the Employee and the Employee acknowledges that it is the policy of the Company to maintain as secret and confidential all Protected Information, and that Protected Information has been and will be developed at substantial cost and effort to the Company.  The Employee shall not at any time, directly or indirectly, divulge, furnish, or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Employee’s employment), nor use in any manner, either during the Employee’s employment or after termination for any reason, any Protected Information, or cause any such Protected Information of the Company to enter the public domain.

		
	(5)
	Nonsolicitation.  During the Employee’s employment and for a period of one (1) year after the Date of Termination, the Employee shall not:  (A) employ or retain or solicit for 

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employment or arrange to have any other person, firm, or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee or consultant of the Company; or (B) solicit suppliers or customers of the Company or induce any such person to terminate his, her, or its relationship with the Company.

		
	(6)
	Cooperation.  Employee agrees to cooperate with the Company and its attorneys in connection with any and all lawsuits, claims, investigations, or similar proceedings that have been or could be asserted at any time arising out of or related in any way to Employee’s employment by the Company or any of its Subsidiaries.

		
	(7)
	Nondisparagement.  At all times, the Employee agrees not to disparage the Company or otherwise make comments harmful to the Company’s reputation.

		
	(8)
	California Law.  To the extent that California law is deemed to govern this Agreement, the restrictions set forth in Sections 10(a)(3) (with respect to post-employment competition) and (5) (with respect to post-employment solicitation) of this Agreement do not apply to the Employee.  

		
	(b)
	Reasonableness of Restrictions.  The Employee acknowledges that he or she has carefully considered the nature and extent of the restrictions upon him or her, and the rights and remedies conferred upon the Company in this Agreement, and acknowledges and agrees that the same: (i) are reasonable in scope, territory, and duration; (ii) are designed to eliminate competition which otherwise would be unfair to the Company; (iii) do not stifle his or her inherent skill and experience; (iv) would not operate as a bar to his or her sole means of support; (v) are fully required to protect the legitimate interests of the Company; and (vi) do not confer a benefit upon the Company disproportionate to the detriment of the Employee.

		
	11.
	Employment Rights.  Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or the Employee to have the Employee remain in the employment of the Company or any Subsidiary prior to or after any Change in Control; provided, however, that any termination of employment of the Employee or the removal of the Employee from such Employee’s office or position (other than a termination by the Company for Cause, or termination for death or Disability) in the three (3) month period preceding a Change in Control shall be deemed to be a termination or removal of the Employee after a Change in Control for purposes of this Agreement.

		
	12.
	Successors.

		
	(a)
	The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to the Employee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place.  This Agreement shall be binding upon and inure to the benefit of the Company and any successor 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 the “Company” for the purposes of this Agreement), but shall not otherwise be assignable, transferable or delegable by the Company.

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

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	(c)
	This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Section 12(a) hereof.  Without limiting the generality of the foregoing, the Employee’s right to receive payments hereunder shall not be assignable, transferable or delegable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by his or her will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 12(c), the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated.

		
	(d)
	The Company and the Employee recognize that each party will have no adequate remedy at law for breach by the other of any of the agreements contained herein and, in the event of any such breach, the Company and the Employee hereby agree and consent that the other shall be entitled to a decree of specific performance, mandamus or other appropriate remedy to enforce performance of this Agreement.

		
	13.
	Miscellaneous.

		
	(a)
	This Agreement and all matters relating to Employee’s employment shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to conflicts of laws principles thereof.  Each party to this Agreement (i) consents to the personal jurisdiction of the state and federal courts having jurisdiction in Summit County, Ohio, (ii) stipulates that the proper, exclusive, and convenient forum and venue for legal adjudication of any issue arising out of this Agreement or relating to claims between the parties is Summit County, Ohio for state court proceedings, and the Northern District of Ohio, Akron location, for federal district court proceedings, and (iii) waives any defense, whether asserted by a motion or pleading, that Summit County, Ohio, or the Northern District of Ohio, Akron location, is an improper or inconvenient venue.

		
	(b)
	Any notices, requests, demands, or other communications provided for by this Agreement shall be sufficient if in writing and if sent by registered or certified mail to the Employee at the last address he or she has filed in writing with the Company or, in the case of the Company, at its principal offices.

		
	(c)
	The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.  Any invalid or unenforceable provision shall be deemed severed from this Agreement to the extent of its invalidity or unenforceability, and this Agreement shall be construed and enforced as if the Agreement did not contain that particular provision to the extent of its invalidity or unenforceability, provided that in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

		
	(d)
	The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith.  Notwithstanding any provisions of this Agreement to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, the Employee shall not be considered to have terminated employment with the Company for purposes of this Agreement and no payments shall be due to the Employee under Section 6 of this Agreement until the Employee would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A of the Code.  For purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A of the Code, and any payments that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred 

12

compensation unless applicable law requires otherwise.  To the extent required to avoid an accelerated or additional tax under Section 409A of the Code, amounts reimbursable to the Employee under this Agreement shall be paid to the Employee on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to the Employee) during any one year may not affect amounts reimbursable or provided in any subsequent year; provided, however, that with respect to any reimbursements for any taxes which the Employee would become entitled to under the terms of the Agreement, the payment of such reimbursements shall be made by the Company no later than the end of the calendar year following the calendar year in which the Employee remits the related taxes were incurred.  Notwithstanding any provisions of this Agreement to the contrary, if the Employee is a “specified employee” (within the meaning of Section 409A of the Code and determined pursuant to any policies adopted by the Company consistent with Section 409A of the Code (a “Specified Employee”)), at the time of the Employee’s separation from service and if any portion of the payments or benefits to be received by the Employee upon separation from service would be considered deferred compensation under Section 409A of the Code and cannot be paid or provided to the Employee during the six-month period immediately following the Employee’s separation from service without the Executive incurring taxes, interest or penalties under Section 409A of the Code, such amounts that would otherwise be payable pursuant to this Agreement and benefits that would otherwise be provided pursuant to this Agreement, in each case, during the six-month period immediately following the Employee’s separation from service will instead be paid or made available on the earlier of (i) first business day after the date that is six (6) months following the Employee’s separation from service and (ii) the Executive’s death.

		
	(e)
	The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or government regulation or ruling.

		
	(f)
	Treatment of outstanding long-term equity incentive awards shall be in accordance with the terms and conditions of the award agreements and plan pursuant to which the incentives were granted.

		
	(g)
	To the extent consistent with state law, the Employee authorizes the Company to conduct drug tests and background checks on the Employee during the Employee’s employment with the Company at times determined by the Company.  Failure to successfully complete or pass each drug test and background check is reason for immediate termination.

		
	(h)
	No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Employee 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.

		
	(i)
	The Employee and the Company acknowledge that, except as provided in any other written agreement between the Employee and the Company, the employment of the Employee by the Company is “at will” and, prior to or after the occurrence of a Change in Control, the Employee’s employment may be terminated by either the Employee or the Company at any time.  This Agreement represents the entire agreement between the parties relating to the subject matter hereof and replaces any and all prior agreements pertaining thereto between the Employee and the Company.  No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.
                                                                       	
	
	DIEBOLD, INCORPORATED:

	By: 

	Title:

	EMPLOYEE:

14DBD 6.30.2015 EX 10.2

AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (the “Amended Agreement”), is made and entered into as of July 30, 2015 (the “Effective Date”) by and between Diebold, Incorporated, an Ohio corporation (together with its successors and assigns permitted under this Amended Agreement, the “Company”), and Andreas W. Mattes (the “Executive” and, together with the Company, the “Parties”).
W I T N E S S E T H
WHEREAS, the Company and the Executive entered into that certain Executive Employment Agreement, dated as of June 6, 2013, to set forth the terms and conditions upon which the Executive agreed to serve as an officer of the Company (the “Original Agreement”);
WHEREAS, the Company and the Executive desire to amend and restate the Original Agreement; and
WHEREAS, Section 18 of the Original Agreement requires that an amendment be in writing and signed by both parties.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is mutually acknowledged, the Company and the Executive (individually a “Party” and together the “Parties”) agree as follows:
1.Definitions.  

(a)“Base Salary” shall mean the salary provided for in Section 4 below.

(b)“Board” shall mean the Board of Directors of the Company.

(c)(i)     “Cause” shall mean, at all times other than during the two-year period following a Change in Control, the Executive’s:

(A)    Willful failure to substantially perform his duties with the Company (other than any such failure resulting from the Executive’s Disability), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has not substantially performed his duties, and the Executive has failed to remedy the situation within fifteen (15) business days of such written notice from the Company;
(B)    Willful gross negligence in the performance of the Executive’s duties;
(C)    Conviction of, or plea of guilty or nolo contendere to, any felony or a lesser crime or offense which, in the reasonable opinion of the Company, could adversely affect the business or reputation of the Company;
(D)    Willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise;
(E)    Willful violation of any provision of the Company’s Code of Business Ethics, as amended from time to time;
(F)    Willful violation of any of the covenants contained in Sections 11 through 13 of this Amended Agreement, as applicable;

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(G)    Engaging in any act of dishonesty resulting in, or intended to result in, material personal gain at the expense of the Company; or
(H)    Engaging in any act that is intended to harm the reputation, business prospects, or operations of the Company. 
For purposes of Section 1(c)(i), no act or omission by the Executive shall be considered “willful” unless it is done or omitted in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company.  Any act or failure to act based upon:  (i) authority given pursuant to a resolution duly adopted by the Board; or (ii) advice of counsel for the Company, shall be conclusively presumed to be done or omitted to be done by the Executive in good faith and in the best interests of the Company.  
There shall be no termination for Cause pursuant to subsections 1(c)(i)(B) through (H) unless a written notice, containing a detailed description of the grounds constituting Cause hereunder, is delivered to the Executive stating the basis for the termination.  Upon receipt of such notice, the Executive shall be given 30 days to fully cure (if such violation, neglect, or conduct is capable of cure) the violation, neglect, or conduct that is the basis of such claim.  If, in the Board’s opinion, cure has not been accomplished by the Executive at the conclusion of such 30-day period, the Executive will be given a reasonable opportunity to be heard before termination.
(ii)     “Cause” shall mean, only during the two-year period following any Change in Control, the Executive’s:

(A)    Intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Company or any Subsidiary;
(B)    Intentional wrongful damage to property of the Company or any Subsidiary;
(C)    Intentional wrongful disclosure of secret processes or confidential information of the Company or any Subsidiary; or
(D)    Intentional wrongful engagement in any competitive activity which would constitute a material breach of the duty of loyalty;
and any such act shall have been materially harmful to the Company and its Subsidiaries taken as a whole.  For purposes of Section 1(c)(ii), no act, or failure to act, on the part of the Executive shall be deemed “intentional” if it was due primarily to an error in judgment or negligence, but shall be deemed “intentional” only if done, or omitted to be done, by the Executive not in good faith and without reasonable belief that his action or omission was in or not opposed to the best interest of the Company and its Subsidiaries. 
The Executive shall not be deemed to have been terminated for “Cause” under Section 1(c)(ii) unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the Board then in office at a meeting of the Board called and held for such purpose (after reasonable notice to the Executive and an opportunity for the Executive, together with his counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive had committed an act set forth above in this Section 1(c)(ii) and specifying the particulars thereof in detail.  Nothing herein shall limit the right of the Executive or his beneficiaries to contest the validity or propriety of any such determination.
(d)     “Change in Control” means the occurrence of any of the following:

(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 thirty percent (30%) or more of either: (A) the then-outstanding shares of common stock of the Company (the “Company 

2

Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company 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 Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; 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 Company’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 Company 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 Company (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 Company Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (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 Company or all or substantially all of the Company’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 Company Common Stock and Voting Stock of the Company, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any Executive benefit plan (or related trust) sponsored or maintained by the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, thirty percent (30%) 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 Company of a complete liquidation or dissolution of the Company.
A “Change in Control” will be deemed to occur (A) with respect to a Change in Control pursuant to subsection (i) above, on the date that any Person becomes the beneficial owner of thirty percent (30%) or more of either the Company Common Stock or the Voting Stock, (B) with respect to a Change in Control pursuant to subsection (ii) above, on the date the members of the Incumbent Board first cease for any reason (other than death or disability) to constitute at least a majority of the Board, (C) with respect to a Change in Control pursuant to subsection (iii) above, on the date the applicable transaction closes and (D) with respect to a Change in Control pursuant to subsection (iv) above, on the date of the shareholder approval.  Notwithstanding the foregoing provisions, a “Change in Control” shall not be deemed to have occurred for purposes of this Amended Agreement solely because of a change in control of any Subsidiary by which the Executive may be employed.
(e)    “Code” means the Internal Revenue Code of 1986, as amended.

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(f)    “Compensation Committee” shall mean the Compensation Committee of the Board or any other committee appointed by the Board to perform the functions of the Compensation Committee.

(g)    “Date of Termination” shall mean the date on which the Executive incurs a “separation from service” within the meaning of Section 409A of the Code.

(h)    “Disability” shall mean the Executive’s permanent and total disability as defined by the long-term disability plan in effect for senior executives of the Company.

(i)    “Effective Date” shall be [July 30], 2015.

(j)    “Equity Incentive Plan” shall mean the Amended and Restated 1991 Equity Performance and Incentive Plan, as it may be amended from time to time, and/or any successor plan(s) providing for the issuance of time-based or performance-based equity to executives.

(k)    “Good Reason” shall mean the occurrence of any one or more of the following without the Executive’s express written consent:

(i)The Company changes the Executive’s title or material job duties such that it results in material diminution in Executive’s authority, duties, or responsibilities; or 

(ii)The Company materially reduces the amount of the Executive’s then current Base Salary or the target opportunity for his annual incentive award; or

(iii)The Company requires the Executive to be based at a location in excess of fifty (50) miles from the location of the Executive’s principal job location or office as of the Effective Date, which the Parties acknowledge to be the Company’s North Canton, Ohio corporate headquarters; or

(iv)Executive is removed by the Board of its own volition from his position on the Board; or
(v)The failure of the Company to obtain in writing the obligation to perform or be bound by the terms of this Amended Agreement by any successor to the Company or a purchaser of all or substantially all of the assets of the Company; or

(vi)Any other action or inaction by the Company that constitutes a material breach by the Company of the terms and conditions of this Amended Agreement.
The Executive is not entitled to assert that his termination is for Good Reason, unless the Executive gives the Company written notice of the event or events that are the basis for such claim within 30 days after the event or events occur, describing such claim in reasonably sufficient detail to allow the Company to address the event or events and a period of not less than 30 days after to cure the alleged condition.

(l)    “Pro Rata” shall mean a fraction, the numerator of which is the number of days that the Executive was employed in the applicable performance period (the performance period in the case of an annual incentive award and a performance cycle in the case of an award under the Equity Incentive Plan) and the denominator of which shall be the number of days in the applicable performance period or cycle.

(m)    “Protected Information” shall mean trade secrets, confidential and proprietary business information of the Company, and any other information of the Company, including, but not limited to, customer lists (including potential customers), sources of supply, processes, plans, materials, pricing information, internal memoranda, marketing plans, internal policies, and products and services that may be developed from time to time by the Company and its agents or employees, including the Executive; provided, however, that information that is in the public domain (other than as a result of a breach of this Amended Agreement), approved for release by the Company or lawfully obtained from third parties who are not bound by a confidentiality agreement with the Company, is not Protected Information.

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(n)    “Shares” shall mean the Common Shares of the Company.

(o)    “Subsidiary” means a corporation, company or other entity (i) more than 50 percent of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than 50 percent of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter owned or controlled, directly or indirectly, by the Company, but such corporation, company or other entity shall be deemed to be a Subsidiary only so long as such ownership or control exists.

(p)    “Term of Employment” shall mean the period specified in Section 2 below (including any extension as provided therein).

2.Term of Employment.  

The Term of Employment shall begin on the Effective Date, and shall extend until the second anniversary of the Effective Date, with automatic one-year renewals thereafter unless either Party notifies the other at least 6 months before the scheduled expiration date that the Amended Agreement is not to renew.  Notwithstanding the foregoing, the Term of Employment may be earlier terminated by either Party in accordance with the provisions of Section 10.
3.Position, Duties and Responsibilities.  

(a)Commencing on the Effective Date and continuing for the remainder of the Term of Employment, the Executive shall be employed as the Chief Executive Officer and President of the Company and be responsible for the general management of the affairs of the Company.  The Executive shall continue to serve on the Board and shall be re-nominated as applicable so that he continues to serve as a member of the Board during the Term of Employment.  The Executive, in carrying out his duties under this Amended Agreement, shall report to the Board.  During the term of this Amended Agreement, the Executive shall devote substantially all of his business time and attention to the business and affairs of the Company and shall use his best efforts, skills and abilities to promote its interests.

(b)Nothing herein shall preclude the Executive from (i) serving on the boards of directors of a reasonable number of other corporations with the concurrence of the Board, (ii) serving on the boards of a reasonable number of trade associations and/or charitable organizations, (iii) engaging in charitable activities and community affairs, and (iv) managing his personal investments and affairs, provided that such activities set forth in this Section 3(b) do not conflict or interfere with the effective discharge of his duties and responsibilities under Section 3(a).

4.Base Salary. 

The Executive shall be paid an annualized Base Salary, payable in accordance with the regular payroll practices of the Company, of not less than $937,500.  The Base Salary shall be reviewed annually for increase in the discretion of the Board.
5.Annual Incentive Award.  

During the Term of Employment, the Executive shall be eligible for an annual incentive award with payout opportunities that are commensurate with his position and duties, as determined by the Company in its sole discretion.  The Executive’s annual incentive award opportunities shall be based on Company and individual performance goals determined, and subject to change, by the Company in the Company’s sole discretion.  The Executive shall be paid his annual incentive award no later than other senior executives of the Company are paid their annual incentive award.

5

6.Long-Term Incentive Awards.  

During the Term of Employment, the Executive shall be eligible to participate in the Company’s Long-Term Incentive Plan (LTIP) on terms commensurate with his position and duties, as determined by the Company in its sole discretion. Program design including performance measures and weighting is at the sole discretion of the Board.  
7.Employee Benefit Programs.  

During the Term of Employment, the Executive shall be entitled to participate in any employee benefit plans and programs made available to the Company’s senior level executives (other than the Diebold, Incorporated Senior Leadership Severance Plan (For Tier I, Tier II, and Tier III Executives), subject to Section 10(f) below, or any defined benefit plan, under any circumstances), as such plans or programs may be in effect from time to time, including, without limitation, 401(k) savings and other plans or programs, medical, dental, hospitalization, short-term and long-term disability and life insurance plans, accidental death and dismemberment protection, travel accident insurance, and any retirement plans or programs and any other employee welfare benefit plans or programs that may be sponsored by the Company in the future from time to time, including any plans that supplement the above-listed types of plans or programs, whether funded or unfunded.  The Executive’s participation shall be based on, and the calculation of all benefits shall be based on, the assumptions that the Executive has met all service-period or other requirements for such participation.  The Executive shall be entitled to four weeks of paid vacation during each year of employment, which shall be subject to the Company’s vacation policy for senior executives.
8.Reimbursement of Business and Other Expenses.  

The Executive is authorized to incur reasonable expenses in carrying out his duties and responsibilities under this Amended Agreement and the Company shall promptly reimburse him for all reasonable business expenses incurred in connection with carrying out the business of the Company, subject to documentation in accordance with the Company’s policy.
9.Perquisites.  

The Executive shall receive the following Company executive perquisites:
(a)The Company shall reimburse the Executive for reasonable financial planning and tax preparation fees up to an annual maximum of $12,000.

(b)The Executive shall be entitled to the annual Executive Physical Program at the Company’s expense at the Cleveland Clinic. 

(c)The Executive shall be entitled to benefits provided under the Company’s applicable relocation policy, and the Company shall reimburse certain additional expenses as may be approved by the Chairman of the Board. 

All reimbursements under Section 8 or Section 9, or otherwise under this Amended Agreement, shall be for expenses incurred by the Executive during the Term of Employment.  In all events such reimbursement will be made no later than the end of the year following the year in which the expense was incurred.  Each provision of reimbursements shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code.  In addition, no reimbursement or in-kind benefit shall be subject to liquidation or exchange for another benefit and the amount available for reimbursement, or in-kind benefits provided, during one calendar year in no event will affect the amount of expenses required to be reimbursed or in-kind benefits required to be provided by the Company in any other calendar year.

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	10.
	Termination of Employment.  

(a)Termination Due to Death.  In the event that the Executive’s employment is terminated due to his death, his estate or his beneficiaries, as the case may be, shall be entitled to the following benefits:

(i)a lump sum amount, paid within 60 days following the Date of Termination, equal to the Executive’s unpaid Base Salary through and including the Date of Termination, as well as accrued, unused vacation and unreimbursed business expenses as of the Date of Termination, consistent with the regular payroll practices of the Company;

(ii)a lump sum amount, paid within 60 days following the Date of Termination, of the annual incentive at target for the calendar year that includes the Date of Termination; provided however, that such amount shall be adjusted on a Pro Rata basis.

(iii)all outstanding options and stock appreciation rights (“SARs”), whether or not then vested, shall vest and shall remain exercisable for a period of one year or until their stated expiration date, if earlier; and

(iv)Pro Rata long-term incentives shall be payable when scheduled to be paid (if, and to the extent, such awards are payable).

(b)Termination Due to Disability.  In the event that the Executive’s employment is terminated due to his Disability, and conditioned upon, no later than 60 days after the Date of Termination, the Executive’s effective execution of a general release of claims against the Company (without revocation), the terms of such release to be agreed upon by the Company and the Executive, as well as the Executive’s acknowledgement of, and the Executive’s compliance with, the Executive’s obligations under the restrictive covenants set forth in Sections 11 through 13, he shall be entitled to the following benefits:

(i)a lump sum amount, paid within 60 days following the Date of Termination, equal to the Executive’s unpaid Base Salary through and including the Date of Termination, as well as for any accrued, unused vacation and unreimbursed business expenses as of the Date of Termination, consistent with the regular payroll practices of the Company;

(ii)a lump sum amount, paid within 60 days following the Date of Termination, of the annual incentive at target for the calendar year that includes the Date of Termination; provided however, that such amount shall be adjusted on a Pro Rata basis;

(iii)all outstanding options and SARs, whether or not then vested, shall vest and shall remain exercisable for a period of one year or until their stated expiration date, if earlier;

(iv)Pro Rata long-term incentives shall be payable, when scheduled to be paid (if, and to the extent, such awards are payable); and

(v)continuation of the Executive’s medical, dental, vision, and Company-paid basic life insurance coverage for 24 months.  These benefits shall be provided by the Company to the Executive beginning immediately upon the Date of Termination.  Such benefits shall be provided to the Executive at the same coverage level and cost to the Executive as in effect immediately prior to the Executive’s Date of Termination.  Notwithstanding the above, these medical, dental, vision and Company-paid basic life insurance benefits shall be discontinued prior to the end of the stated continuation period in the event the Executive receives substantially similar benefits from a subsequent employer, as determined solely by the Company in good faith.  For purposes of enforcing this offset provision, the Executive shall be deemed to have a duty to keep the Company informed as to the terms and conditions of any subsequent employment and the corresponding benefits earned from such employment, and shall provide, or cause to provide, to the Company in writing correct, complete, and timely information concerning the same.

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In no event shall a termination of the Executive’s employment due to Disability occur until the Party terminating Executive’s employment gives written notice to the other Party in accordance with Section 26 below.  
(c)Termination by the Company for Cause. In the event the Company terminates the Executive’s employment for Cause, he shall be entitled to the following benefits:

(i)a lump sum amount, paid within 60 days following the Date of Termination, equal to the Executive’s unpaid Base Salary through and including the Date of Termination, as well as accrued, unused vacation and unreimbursed business expenses as of the Date of Termination, consistent with the regular payroll practices of the Company; and

(ii)all outstanding options and SARs which are not then vested shall be forfeited; vested options and SARs shall remain exercisable until the earlier of the thirtieth day after the Date of Termination or the originally scheduled expiration date of the options and SARs, unless the Compensation Committee determines otherwise.

(d)Termination by Company without Cause, Non-Renewal by the Company and Discontinuation of Service, or Termination by the Executive for Good Reason.  In the event the Executive’s employment is terminated by the Company without Cause (i.e., on a basis other than specified in Subsections 10(a), 10(b), 10(c), 10(e), or 10(f)), the Company chooses not to renew this Amended Agreement and discontinues Executive’s service, or in the event Executive’s employment is terminated by Executive for Good Reason, at any time other than during the two-year period following a Change in Control, and conditioned upon, no later than 60 days after the Date of Termination or non-renewal and discontinuation of service, the Executive’s effective execution of a general release of claims against the Company (without revocation), the terms of such release to be agreed upon by the Company and Executive, as well as Executive’s acknowledgement of, and Executive’s compliance with, Executive’s obligations under the restrictive covenants set forth in Sections 11 through 13, the Executive shall be entitled to the following benefits:

(i)a lump sum amount, paid within 60 days following the Date of Termination, equal to the Executive’s unpaid Base Salary through and including the Date of Termination, as well as accrued vacation pay and unreimbursed business expenses; 

(ii)a lump sum amount, paid within 60 days following the Date of Termination, equal to two (2) times (A) the Executive’s Base Salary, and (B) the Executive’s annual incentive award at target for the calendar year that includes the Date of Termination;

(iii)a lump sum amount, if any, paid within two and one-half (2 1⁄2) months after the end of the calendar year that includes the Date of Termination, equal to the actual annual incentive that would have been payable to the Executive for the calendar year that includes the Date of Termination based on the Company’s actual performance against applicable goals and for Executive’s personal goals/ key initiatives, based on Executive’s assumed target level performance, if the Executive had remained employed through the end of such calendar year; provided however, that such amount shall be adjusted on a Pro Rata basis.

(iv)Continuation of the Executive’s medical, dental, vision, and Company-paid basic life insurance coverage for 24 months.  These benefits shall be provided by the Company to the Executive beginning immediately upon the Date of Termination.  Such benefits shall be provided to the Executive at the same coverage level and cost to the Executive as in effect immediately prior to the Executive’s Date of Termination.  Notwithstanding the above, these medical, dental, vision and Company-paid basic life insurance benefits shall be discontinued prior to the end of the stated continuation period in the event the Executive receives substantially similar benefits from a subsequent employer, as determined solely by the Company in good faith.  For purposes of enforcing this offset provision, the Executive shall be deemed to have a duty to keep the Company informed as to the terms and conditions of any subsequent employment and the corresponding benefits earned from such employment, and shall provide, or cause to provide, to the Company in writing correct, complete, and timely information concerning the same;

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(v)All outstanding and unvested stock options and SARs shall immediately vest and shall remain exercisable for a period of twelve (12) months from the Date of Termination or the last day of the option term, whichever occurs first.  Additionally, from time to time, the Company may declare “blackout” periods with respect to Executive and/or designated employees of the Company during which Executive and/or such employees are prohibited from engaging in certain transactions in Company securities.  The scheduled expiration date of stock options and SARs pursuant to this subsection shall automatically, and without further notice to the option/SAR holder, be extended by one business day for each business day of the blackout period applied to the option/SAR holder (but in no case longer than the option term);

(vi)All restrictions on unvested shares of restricted stock and unvested restricted stock units shall immediately lapse, with such shares and units becoming non-forfeitable on a pro rata basis, as determined under this subparagraph (vi).  The pro rata award shall equal the product of (A) and (B) where (A) is the number of restricted stock shares or units subject to the award, and (B) is a fraction, the numerator of which is the number of calendar months that the Executive was employed by the Company during the restriction period (with any partial months counting as a full month for this purpose) and the denominator of which is the number of months in the restriction period.  The timing of the delivery of any shares on account of the vesting of any restricted share units will be determined under the terms of the Equity Incentive Plan (as most recently amended and/or restated) and the award agreements (or comparable documentation) thereunder;

(vii)Unearned performance shares and performance units shall be paid out on a pro rata basis, as determined under this subparagraph (vii).  The pro rata award shall equal the product of (A) and (B) where (A) is the award the Executive would have earned based on actual performance measured as of the end of the respective performance period and (B) is a fraction, the numerator of which is the number of calendar months that the Executive was employed by the Company during the performance period (with any partial month counting as a full month for this purpose) and the denominator of which is the number of months in the performance period.  Any such awards will be paid to Executive at the same time eligible participants are paid; and

(viii)The Company will assist the Executive in finding other employment opportunities by providing to him, at the Company’s limited expense, reasonable professional outplacement services through the provider of the Company’s choice.  Such outplacement services shall terminate when the Executive finds other employment.  However, in no event shall such outplacement services continue for more than 24 months following the Date of Termination.

(e)Voluntary Termination.  A termination of employment by the Executive on his own initiative, other than a termination due to Disability or a termination for Good Reason, shall have the same consequences as provided in Section 10(c) for a termination for Cause.  A voluntary termination under this Section 10(e) shall be effective on the date specified in the Executive’s written notice, unless such voluntary termination is earlier accepted by the Company, such early acceptance still to be treated as a voluntary termination by the Executive.   

(f)Non-Renewal by the Company.  During the Term of Employment, the Executive shall not be entitled to participate in the Diebold, Incorporated Senior Leadership Severance Plan (For Tier I, Tier II, and Tier III Executives), or any similar or successor plans or arrangements (the “Severance Plan”), but shall instead (except as may be otherwise determined by the Board), be entitled to receive payments and benefits in connection with the termination of the Executive’s employment pursuant to this Amended Agreement.  The rights and obligations under this Section 10(f) shall survive any termination of this Amended Agreement or termination of the Executive’s employment with the Company.

(g)No Mitigation; No Offset.  In the event of any termination of employment under this Section 10, the Executive shall be under no obligation to seek other employment and there shall be no offset against amounts due the Executive under this Amended Agreement on account of any remuneration attributable to any subsequent employment that he may obtain.

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(h)Nature of Payments.  Any amounts due under this Section 10 are in the nature of severance payments considered to be reasonable by the Company and are not in the nature of a penalty.

(i)Timing of Payments.  Notwithstanding any provision in this Amended Agreement to the contrary, if the Executive is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i) and using the identification methodology selected by the Company from time to time) on the Date of Termination, to the extent payments or benefits made hereunder (as well as any other payment or benefit that the Executive is entitled to receive upon his separation from service) constitute deferred compensation (after taking account any applicable exceptions under Section 409A of the Code), and to the extent required by Section 409A of the Code, payments or benefits payable upon separation from service which otherwise would be payable during the six-month period immediately following the Date of Termination will instead be paid or made available on the earlier of (i) the first day following the six month anniversary of the Executive’s Date of Termination and (ii) the Executive’s death.

11.Non-Competition. 

(a) The Executive agrees that during the Executive’s employment with the Company and for a period of two (2) years following the termination of such employment, whether termination is by the Executive or the Company, and regardless of the reasons therefore, the Executive shall not:  (A) directly, or indirectly act in concert or conspire with any person employed by the Company in order to, engage in or prepare to engage in or to have a financial or other interest in any business or any activity that he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on (or with any product, service, or business activity which was under active development while the Executive was employed by Company if such development is being actively pursued by the Company during such two-year period); or (B) serve as an employee, agent, partner, shareholder, director, or consultant for, or in any other capacity participate, engage, or have a financial or other interest in any business or any activity that he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on (or with any product, service, or business activity which was under active development while the Executive was employed by Company if such development is being actively pursued by the Company during such two-year period), provided, however, that notwithstanding anything to the contrary contained in this Amended Agreement, the Executive may own up to two percent (2%) of the outstanding shares of the capital stock of a company whose securities are registered under Section 12 of the Exchange Act.  Further, notwithstanding anything to the contrary in this Section 11(a), provided that the Company is given reasonable opportunity to consult with the Executive and the Executive consults with the Company in good faith, the Company may opt, in its sole discretion, to consent to the Executive’s accepting employment with a competitive business on the condition that Executive will not be involved, directly or indirectly, in any manner, with any competitive product or service. 

(b)The Executive further acknowledges and agrees that, in the event of the termination of his employment with the Company, the Executive’s experience and capabilities are such that the Executive can obtain employment in business activities which do not compete with the Company, and that the enforcement of this Amended Agreement by way of injunction shall not prevent the Executive from earning a reasonable livelihood.  The Executive further acknowledges and agrees that the covenants contained herein are necessary for the protection of the Company’s legitimate business interests and are reasonable in scope and duration.

12.No Solicitation of Employees.  

The Executive agrees that during his employment with the Company and for a period of three (3) years following the termination of such employment, whether termination is by the Executive or by the Company, regardless of the reasons therefore, the Executive will not directly or indirectly, (a) employ or retain or solicit for employment or arrange to have any other person, firm, or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee or consultant of the Company; or (b) solicit suppliers or customers of the Company or induce any such person to terminate his, her, or its relationship with the Company.  In the event that the scope of the restrictions in Section 11 or 12 are found overly broad, Executive agrees that a court should reform the restrictions by limiting them to the maximum reasonable scope.

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13.Confidentiality.  

The Company has advised the Executive and the Executive acknowledges that it is the policy of the Company to maintain as secret and confidential all Protected Information, and that Protected Information has been and will be developed at substantial cost and effort to the Company.  The Executive shall not at any time, directly or indirectly, divulge, furnish, or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Executive’s employment), nor use in any manner, either during the Executive’s employment or after termination for any reason, any Protected Information, or cause any such Protected Information of the Company to enter the public domain.
14.Effect of a Change in Control.  The Executive’s entitlements relating to a Change in Control of the Company shall be determined in accordance with this Section 14 and there shall be no duplication of the benefits provided in this Section 14.

(a)Extension of Amended Agreement.   Subject to Section 16 below, upon a Change in Control, the Term of Employment shall be extended to the second anniversary of such Change in Control, with automatic one (1) year renewals thereafter unless either party notifies the other at least six (6) months before the scheduled expiration date that the Amended Agreement is not to renew.  Notwithstanding the foregoing, the Term of Employment may be earlier terminated by either party in accordance with the provisions of Section 10, except as modified by this Section 14.

(b)Obligations of the Company upon Certain Terminations Following a Change in Control.

(i)Good Reason; Other Than for Cause.  If, during the two (2) year period following a Change in Control, the Executive’s employment is terminated by the Company without Cause (i.e., on a basis other than specified in Subsections 10(a), 10(b), 10(c), 10(e), or 10(f)), or the Executive’s employment is terminated by Executive for Good Reason, and conditioned upon Executive’s compliance with Executive’s obligations under the restrictive covenants set forth in Sections 11 through 13, the Executive shall be entitled to the following benefits:

(A)a lump sum amount, paid within sixty (60) days following the Date of Termination, equal to the Executive’s unpaid Base Salary through and including the Date of Termination, as well as accrued vacation pay and unreimbursed business expenses;

(B)a lump sum amount, paid within sixty (60) days following the Date of Termination, equal to two (2) times (A) the Executive’s Base Salary, and (B) the Executive’s annual incentive award at target for the calendar year that includes the Date of Termination;

(C)a lump sum amount, if any, paid within two and one-half (2 1⁄2) months after the end of the calendar year that includes the Date of Termination, equal to the actual annual incentive that would have been payable to the Executive for the calendar year that includes the Date of Termination based on the Company’s actual performance against applicable goals and for Executive’s personal goals/ key initiatives, based on Executive’s assumed target level performance, if the Executive had remained employed through the end of such calendar year; provided however, that such amount shall be adjusted on a Pro Rata basis;

(D)continuation of the Executive’s medical, dental, vision, and Company-paid basic life insurance coverage for twenty four (24) months.  These benefits shall be provided by the Company to the Executive beginning immediately upon the Date of Termination.  Such benefits shall be provided to the Executive at the same coverage level and cost to the Executive as in effect immediately prior to the Executive’s Date of Termination.  Notwithstanding the above, these medical, dental, vision and Company-paid basic life insurance benefits shall be discontinued prior to the end of the stated continuation period in the event the Executive receives substantially similar benefits from a subsequent employer, as determined solely by the Company in good faith.  For purposes of enforcing this offset provision, the Executive shall be deemed to have a duty to keep the Company informed as to the terms and conditions of any subsequent employment and the corresponding benefits earned from such 

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employment, and shall provide, or cause to provide, to the Company in writing correct, complete, and timely information concerning the same;

(E)all outstanding and unvested stock options and SARs shall immediately vest and shall remain exercisable for a period of twelve (12) months from the Date of Termination or the last day of the option term, whichever occurs first.  Additionally, from time to time, the Company may declare “blackout” periods with respect to Executive and/or designated employees of the Company during which Executive and/or such employees are prohibited from engaging in certain transactions in Company securities.  The scheduled expiration date of stock options and SARs pursuant to this subsection shall automatically, and without further notice to the option/SAR holder, be extended by one business day for each business day of the blackout period applied to the option/SAR holder (but in no case longer than the option term); 

(F)all restrictions on unvested shares of restricted stock and unvested restricted stock units or deferred shares shall immediately lapse, with such shares and units becoming non-forfeitable.  The timing of the delivery of any shares on account of the vesting of any restricted share units will be determined under the terms of the Equity Incentive Plan (as most recently amended and/or restated) and the award agreements thereunder;

(G)unearned performance shares and performance units shall become non-forfeitable at one hundred percent of target; the timing of the delivery of any shares or cash on account of the vesting of performance shares or performance units will be determined under the terms of the Equity Incentive Plan (as most recently amended and/or restated) and the award agreements thereunder; and

(H)the Company will assist the Executive in finding other employment opportunities by providing to him, at the Company’s limited expense, reasonable professional outplacement services through the provider of the Company’s choice.  Such outplacement services shall terminate when the Executive finds other employment.  However, in no event shall such outplacement services continue for more than 24 months following the Date of Termination.

(c)Indemnification of Legal Fees.  Effective only upon a Change in Control, it is the intent of the Company that the Executive not be required to incur the expenses associated with the enforcement of his rights under this Amended Agreement following such a Change in Control by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Executive hereunder following a Change in Control.  Accordingly, following a Change in Control if it should appear to the Executive that the Company has failed to comply with any of its obligations under this Amended Agreement which arose following a Change in Control or in the event that the Company or any other person takes any action to declare this Amended Agreement void or unenforceable, or institutes any litigation designed to deny, or to recover from, the Executive the benefits intended to be provided to the Executive hereunder, the Company irrevocably authorizes the Executive from time to time to retain counsel of his choice, at the expense of the Company as hereafter provided, to represent the Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company, or any Subsidiary, Director, officer, stockholder or other person affiliated with the Company, in any jurisdiction.  Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to the Executive’s entering into an attorney-client relationship with such counsel, and in that connection the Company and the Executive agree that a confidential relationship shall exist between the Executive and such counsel.  Following a Change in Control, the Company shall pay or cause to be paid and shall be solely responsible for any and all attorneys’ and related fees and expenses incurred by the Executive as a result of the Company’s failure to perform this Amended Agreement or any provision hereof or as a result of the Company or any person contesting the validity or enforceability of this Amended Agreement or any provision hereof as aforesaid, provided any such reimbursement of attorneys’ and related fees and expenses shall be made not later than December 31 of the year following the year in which the Executive incurred the expense.

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15.Resolution of Disputes.  

Any disputes arising under or in connection with this Amended Agreement shall be resolved by third party mediation of the dispute and, failing that, by binding arbitration, to be held in Cleveland, Ohio, in accordance with the rules and procedures of the American Arbitration Association.  Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.  The Company will pay the direct costs and expenses of such arbitration.  The Company will also reimburse the Executive for reasonable fees and expenses, including reasonable attorney’s fees, incurred by the Executive in connection with such arbitration, such reimbursement to be made monthly as such fees and expenses are incurred.  In the event Executive does not prevail at arbitration, however, Executive will re-pay to the Company any and all expenses and fees previously reimbursed by the Company.
Notwithstanding the provisions of this Section 15, the Parties agree that in the event of any dispute between the Executive and the Company as to any of the Executive’s obligations under Sections 11, 12, or 13, then the arbitration requirements of this Section 15 shall not apply, and that instead, the Parties must seek relief as to that dispute in a court of general jurisdiction in the State of Ohio to be docketed, if available, on the commercial docket of that court. The Parties hereby consent to the exclusive specific and general jurisdiction of such court.  The Executive hereby agrees that, by virtue of his work for the Company, he has purposely availed himself of the benefits and protections of the laws of the State of Ohio.   In addition, in connection with any such court action, the Executive acknowledges and agrees that the remedy at law available to the Company for breach by Executive of any of his obligations under Sections 11, 12, or 13 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, the Executive 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 Amended Agreement, upon adequate proof of the Executive’s violation of any provision of Sections 11, 12, or 13 of this Amended 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.
16.Assignability; Binding Nature.  

This Amended Agreement shall be binding upon and inure to the benefit of the Company and any successor 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 the “Company” for the purposes of this Amended Agreement), but shall not otherwise be assignable, transferable or delegable by the Company.  
The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to the Executive, expressly to assume and agree to perform this Amended Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place.  No rights or obligations of the Executive under this Amended Agreement may be assigned or transferred by the Executive other than his rights to compensation and benefits, which may be transferred only by will or operation of law.  This Amended Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and/or legatees. This Amended Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Amended Agreement or any rights or obligations hereunder except as expressly provided in Section 16 hereof.  Without limiting the generality of the foregoing, the Executive’s right to receive payments hereunder shall not be assignable, transferable or delegable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by his will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 16, the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated.

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17.Entire Agreement.  

This Amended Agreement contains the entire understanding and agreement between the Parties concerning the subject matter hereof and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the Parties with respect thereto.
18.Amendment or Waiver.  

No provision in this Amended Agreement may be amended unless such amendment is agreed to in writing and signed by the Executive and an authorized officer of the Company.  No waiver by either Party of any breach by the other Party of any condition or provision contained in this Amended Agreement to be performed by such other Party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time.  Any waiver must be in writing and signed by the Executive or an authorized officer of the Company, as the case may be.
19.Withholding.  

The Company may withhold from any amounts payable under this Amended Agreement all federal, state, city or other taxes as shall be required pursuant to any law or government regulation or ruling.
20.Severability.  

In the event that any provision or portion of this Amended Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Amended Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law so as to achieve the purposes of this Amended Agreement.
21.Survivorship.  

Except as otherwise expressly set forth in this Amended Agreement, the respective rights and obligations of the Parties hereunder shall survive any termination of the Executive’s employment.  Except as otherwise expressly provided by this Amended Agreement, this Amended Agreement itself (as distinguished from the Executive’s employment) may not be terminated by either Party without the written consent of the other Party.  Upon the expiration of the term of the Amended Agreement, the respective rights and obligations of the Parties shall survive such expiration to the extent necessary to carry out the intentions of the Parties an embodied in the rights (such as vested rights) and obligations of the Parties under this Amended Agreement.
22.References.

In the event of the Executive’s death or a judicial determination of his incompetence, reference in this Amended Agreement to the Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal representative.
23.Governing Law.  

This Amended Agreement shall be governed in accordance with the laws of Ohio without reference to principles of conflict of laws. 
24.Attorneys’ Fees.  

Executive will be reimbursed his reasonable attorneys’ fees incurred with respect to the negotiation of this Amended Agreement, provided that Executive delivers to the Company proper documentation of the fees incurred no later than September 1, 2015.  The Company will make such reimbursement (or directly pay the fees) no later than December 31, 2015.

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25.Section 280G.  

(a)In the event that any payment or benefit received or to be received by the Executive (including any payment or benefit received in connection with a Change in Control or the termination of the Executive’s employment pursuant to the terms of this Amended Agreement) (all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments will only be reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments.

(b)In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payment and payments and benefits due in respect of any equity not subject to Section 409A of the Code, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A of the Code as deferred compensation.

(c)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax:  (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by the accounting firm which was, immediately prior to the Change of Control, the Company’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

(d)At the time that payments are made under this Amended Agreement, the Company will provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations, including any opinions or other advice the Company received from Tax Counsel, the Auditor, or other advisors or consultants (and any such opinions or advice which are in writing will be attached to the statement). All such calculations and opinions shall be binding on the Company and the Executive.

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26.Notices.  

All notices and other communications required or permitted hereunder shall be in writing and shall be deemed given when (a) delivered personally, (b) delivered by certified or registered mail, postage prepaid, return receipt requested or (c) delivered by overnight courier (provided that a written acknowledgment of receipt is obtained by the overnight courier) to the Party concerned at the address indicated below or to such changed address as such Party may subsequently give such notice of:
If to the Company:
Diebold, Incorporated
5995 Mayfair Road
North Canton, Ohio 44720
Attention:  Vice President and Chief Human Resources Officer

If to the Executive:

At the last residential address known by the Company

With a Copy to:

Jonathan Cohen, Esq.
Joseph & Cohen, P.C.
1855 Market Street
San Francisco, CA  94103

27.Headings.  

The headings of the sections contained in this Amended Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Amended Agreement.
28.Counterparts.  

This Amended Agreement may be executed in two or more counterparts.
29.Code Section 409A Compliance.  

To the extent applicable, it is intended that this Amended Agreement comply with the provisions of Section 409A of the Code.  This Amended Agreement will be administered in a manner consistent with this intent.  References to Section 409A of the Code will include any proposed, temporary or final regulation, or any other formal guidance, promulgated with respect to such section by the U.S. Department of Treasury or the Internal Revenue Service.  Each payment or benefit to be made or provided to the Executive under the provisions of this Amended Agreement will be considered to be a separate payment and not one of a series of payments for purposes of Section 409A of the Code.

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IN WITNESS WHEREOF, the undersigned have executed this Amended Agreement as of the date first written above.
	
				
	

The Company

By:      /s/ Sheila Rutt
	

By:     /s/ Andreas W. Mattes

	 
	Sheila Rutt
Vice President,
Chief Human Resources Officer
	 
	Andreas W. Mattes

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