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Employment Agreement - Diebold Inc. and Wesley B. Vance

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August 16, 2000

Mr. Wesley B. Vance
895 Baywood Court
Columbus, Indiana  47201

Dear Wes:

         This letter sets forth the terms of our offer to you of employment by
Diebold, Incorporated (the "Company"). If our offer is acceptable to you, please
so indicate by signing and returning a copy of this letter to me.

1. POSITION AND TERM. Effective October 1, 2000, you will serve as President,
Diebold, North America, reporting directly to the Chief Executive Officer of the
Company. The term of your employment will continue for two years until October
1, 2002, with automatic one-year renewals thereafter, unless either you or the
Company notifies the other in writing at least 90 days before a scheduled
expiration date that the term is not to be renewed.

2. COMPENSATION. Your initial base salary will be at an annual rate of $370,000
("Base Salary"). Commencing in 2001, you will be eligible to participate in the
Company's Annual Incentive Plan with a maximum payout on an annual level of not
less than 100% of Base Salary, subject to achievement of applicable performance
measures and the terms and conditions of the plan.

3. BENEFITS. You will be eligible to participate in the Company's employee
benefit and executive compensation plans in which senior executives of the
Company participate, including, without limitation, retirement, health care
(medical, life, disability and dental), 401(k) savings and supplemental
executive retirement plans. Your participation will be subject to the terms and
conditions of the applicable plans, including their eligibility rules. In
addition, you will be provided with the opportunity to participate in a
split-dollar life insurance arrangement at a level of not less than two times
Base Salary, provided that you are insurable by the insurance carrier selected
to provide insurance under such arrangement.

4. VACATION AND ADDITIONAL BENEFITS. You will be entitled to 20 days of paid
vacation annually upon your employment. You will also be entitled to
reimbursement for reasonable business expenses. You will also be provided a
luxury class car, dues and initiation fees at one country club, and
reimbursement for the costs of financial counseling up to $7,500 per year.

5. RELOCATION. You will be entitled to relocation benefits, including without
limitation, a temporary housing allowance, in accordance with the Company's
relocation policy applicable to senior executives. The Company will purchase or
arrange to have purchased your existing home in Columbus, Indiana at a price
equal to the average of the fair market values as reported in two appraisals
submitted by appraisers jointly agreed to by you and the Company.


<PAGE>   2

Mr. Wesley B. Vance                                                    page -2-
August 16, 2000

6. SIGN-ON EQUITY AWARDS. As of the commencement date of your employment, you
will be granted under the Company's 1991 Equity and Performance Incentive Plan,
as amended and restated as of January 30, 1997 (the "Equity Incentive Plan") the
following awards which shall be subject to the terms and conditions of the
Equity Incentive Plan and the applicable standard grant agreements in use

         a. Nonqualified stock option for 40,000 shares of the Company's common
         stock. Such option will become exercisable in equal installments on the
         first, second, third and fourth anniversaries of your employment
         commencement date.

         b. 8,300 restricted shares of the Company's common stock. Such shares
         shall vest in full on the third anniversary of your employment
         commencement date.

         c. 20,000 restricted shares of the Company's common stock. Fifty
         percent of such shares shall vest upon a 50% increase for a period of
         at least twenty-consecutive trading days in the closing price in the
         Company's common stock over that on your employment commencement date
         (or on the next preceding trading date if your employment commencement
         date is not a trading date), and an additional 50% vesting upon a 100%
         increase for a period of at least twenty-consecutive trading days. In
         any event, all shares will vest on the seventh anniversary of your
         employment commencement date.

7. SEVERANCE BENEFITS. You agree that your employment is on an at-will basis. If
the Company terminates your employment other than by reason of death, disability
or cause (meaning an intentional act of fraud, embezzlement, theft, damage to
property, disclosure of confidential information or engagement in competitive
activity or your gross negligence or misconduct, any of which is materially
harmful to the Company, or your intentional and repeated failure to carry out
your duties and responsibilities) prior to the end of your employment term, you
will as your sole severance payment be entitled to continue to receive your Base
Salary for 24 months following your termination and will be provided with health
(including medical/hospital and dental) and life insurance benefits for 24
months following your termination on the same terms and conditions you were
entitled to participate in such benefits prior to your termination. Such health
and life insurance benefits, however, will be reduced by any comparable benefits
you receive from another employer during such period. You will also be entitled
to receive up to one year of outplacement services.

8. NON-COMPETITION AND NONSOLICITATION. You agree that during your employment
and for a period of two years thereafter you will not, without prior written
consent of the Company, be employed or otherwise engaged by or in any other
business which is in competition with the Company's business (meaning any
business which Company now or until the end of the two-year period following the
termination of your employment actively engages, including without limitation,
the design, manufacture, assembly, distribution, sale, service, or maintenance
of the products listed in Exhibit A). You also agree that during your term of
employment and for a period of two years thereafter not to induce or assist
others in inducing any employee of the Company or its affiliates to gave up
employment with the Company or its affiliates. In the event that the scope of
these restrictions on you in this paragraph are found overly broad, you agree
that a court should reform the restrictions by limiting them to the maximum
reasonable scope.

<PAGE>   3

Mr. Wesley B. Vance                                                    page -3-
August 16, 2000

9. PROPRIETARY INFORMATION AND INVENTIONS. You realize that as an employee of
the Company, you may create or have access to information, trade secrets,
substances and inventions including confidential information relating to the
business or interests of persons with whom the Company or its affiliated
companies may have commercial, technical or scientific relationships
("Information") which is valuable to the Company or its affiliated companies and
may lose its value if disclosed to third parties. Therefore, you agree to treat
all such Information as confidential and belonging to the Company and will take
all actions reasonably requested to confirm such ownership. You will not,
without the prior written consent of the Company, disclose or use the same
otherwise than in the course of your employment with the Company; this
obligation shall continue until such Information becomes public knowledge
through no fault on your part, regardless of whether you continue to be employed
by the Company.

10. CHANGE IN CONTROL. You will be entitled to enter into an Employment
Agreement providing for certain terms and conditions of your employment
following a "Change in Control" of the Company as defined therein. After
entering into such agreement, if there is an occurrence of a "Change in Control"
as so defined, the terms of that agreement will control the terms and conditions
of your employment rather than this letter.

11. STOCK OWNERSHIP GUIDELINES. You agree to comply during your employment with
the Company's stock ownership guidelines, as amended from time to time,
applicable to executives of the Company.

12. GOVERNING LAW. You agree that this letter agreement will be governed by the
substantive laws of Ohio, without regard to conflict of laws principles.

Sincerely yours,


/s/Charles B. Scheurer

Charles B. Scheurer
Vice President Human Resources

Accepted and Agreed:

/s/Wesley B. Vance                                              8/20/00
-----------------------------                                   ---------------
Wesley B. Vance                                                 Date

<PAGE>   4

                                    EXHIBIT A

Automated Teller Machines
Teller Assist Devices
Physical Security Devices
         (including, without limitation, Vault Doors and Chests)
Electronics Funds Transfer Equipment
Point of Sale Equipment and Systems
Safe Deposit Boxes
Access Control Devices and Systems
Integrated Campus Access Management Devices and Systems
Surveillance Equipment and Systems
         (including, without limitation, Surveillance Cameras)
Remote Monitoring Systems
         (including, without limitation, Burglary, Robbery and Fire)
Automated Monitoring, Dispensing and Reporting
         Devices and Systems for the Health Care Industry
Software Systems for the Above
Service and Maintenance of the Above
         (including, without limitation, First and Second Line Service)

The above list of products in this Exhibit A does not apply to general purpose
computer hardware or peripherals such as mainframe computers, personal
computers, printers, or application software such as spreadsheet, word
processing and data base programs for general business or office use.