Retirement and Consulting Agreement - Diebold Inc. and Robert W. Mahoney
RETIREMENT AND CONSULTING AGREEMENT
THIS RETIREMENT AND CONSULTING AGREEMENT (this "Agreement"),
is made, entered into and effective as of April 19, 2000 (the "Transition
Date"), by and between DIEBOLD, INCORPORATED (the "Company"), located at 5995
Mayfair Road, North Canton, Ohio 44720 and ROBERT W. MAHONEY ("Mahoney"),
residing at 5291 St. Andrews Drive NW, Canton, Ohio 44708.
WITNESSETH:
WHEREAS, Mahoney has given nearly twenty years of dedicated,
faithful and valued service to the Company, and has served the Company well and
dutifully in numerous capacities including Chief Executive Officer and, most
recently, as the Chairman of the Board of Directors of the Company; and
WHEREAS, Mahoney has determined that, effective July 1, 2000,
he wishes to retire from his employment with the Company to pursue various
charitable and other interests; and
WHEREAS, the Company desires to retain Mahoney, because of his
vast experience and knowledge of the Company's business, markets and products,
after his retirement to provide consulting services, and Mahoney agrees to
provide such consulting services as described more fully herein; and
WHEREAS, Mahoney has determined that, effective on the
Transition Date, he shall resign from any and all offices of the Company, and
any other position, office or directorship of any other entity for which he was
serving at the request of the Company, and, in addition, shall resign and retire
from his employment with the Company at the conclusion of a severance period;
and
WHEREAS, the Company and Mahoney desire to set forth the
payments and benefits that Mahoney will be entitled to receive from the Company
in connection with the cessation of his employment with the Company and for his
valuable services as a consultant;
NOW, THEREFORE, in consideration of the promises and
agreements contained herein and other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, and intending to be
legally bound, the Company and Mahoney hereby agree as follows:
1. RESIGNATION AND RETIREMENT. Mahoney hereby resigns, effective on the
Transition Date, his position as Chairman of the Board of the Company. Mahoney
further resigns, effective on the Transition Date: (a) from all other offices of
the Company to which he has been elected by the Board of Directors of the
Company (or to which he has otherwise been appointed), (b) from all offices of
any entity that is a subsidiary of, or is otherwise related to or affiliated
with, the Company, (c) from all administrative, fiduciary or other positions he
may hold with
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respect to arrangements or plans for, of or relating to the Company, and (d)
from any other directorship, office, or position of any corporation,
partnership, joint venture, trust or other enterprise (each, an "Other Entity")
insofar as Mahoney is serving in the directorship, office, or position of the
Other Entity at the request of the Company. Mahoney further resigns and retires,
effective July 1, 2000 (the "Retirement Date"), from his employment with the
Company, and its subsidiaries and related or affiliated companies. The Company
hereby consents to and accepts said resignations.
2. CONSULTING SERVICES.
A. CONSULTING OBLIGATIONS. From the Retirement Date through
June 30, 2002 (the "Consulting Period"), the Company agrees to retain Mahoney as
a consultant and Mahoney agrees to provide consulting services to the Company as
the Company shall reasonably request from time to time. The specific consulting
services that Mahoney will perform, including the time and duration thereof,
shall be as reasonably specified by the Company. In the event that (i) specific
consulting services are not requested by the Company, (ii) Mahoney is
occasionally unavailable to perform specific consulting services, or (iii)
Mahoney becomes disabled and is unable to perform any further consulting
services pursuant to this Paragraph 2, it is expressly acknowledged and agreed
that no portion of the compensation or benefits provided in Paragraphs 2 or 3
shall be refundable and that all other terms and conditions of this Agreement
shall remain in full force and effect.
B. COMPENSATION.
(I) As consideration for the consulting services
pursuant to this Paragraph 2, the Company agrees to pay Mahoney an annual
consulting fee of $200,000, payable in semi-monthly installments. Mahoney also
shall be reimbursed for all reasonable out-of-pocket costs, including costs for
travel, that he incurs in the course of performing the consulting services.
(II) In addition, as part of his compensation for the
consulting services pursuant to this Paragraph 2, Mahoney shall be eligible for
certain benefits and perquisites on the terms and conditions specified in
Paragraph 3 and to be compensated for the cost of such benefits to him.
C. FULL BENEFIT OF SERVICES. It is the intent of the Company
to obtain from Mahoney and the intent of Mahoney to deliver to the Company the
full and complete benefit of Mahoney's services under this Paragraph 2. In
furtherance thereof, and to protect and secure to the Company its proprietary
rights, Mahoney covenants and agrees as follows:
(I) Mahoney agrees to, and hereby does, assign to the
Company all copyrights, trade secrets and patents of all inventions,
improvements and other innovations of any kind (collectively, "Works") developed
by Mahoney in the course of performing the consulting services pursuant to this
Paragraph 2, whether or not such Works are eligible for patent, copyright,
trademark, trade secret or other legal protection. Mahoney agrees to reasonably
assist and cooperate with the Company in all respects in confirmation of the
assignment to the Company of all rights in and to the Works. Mahoney will,
during the Consulting Period and thereafter, execute such documents and
assignments as are necessary for this purpose.
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(II) The physical embodiment of Mahoney's services
pursuant to this Paragraph 2, including without limitation any writings and
reports produced while performing the consulting services, shall, at all times,
become the sole and exclusive property of the Company.
D. INDEPENDENT CONTRACTOR. In performing the consulting
services pursuant to this Paragraph 2, Mahoney shall be acting at all times as
an independent contractor, and nothing contained herein shall be deemed or
construed to create any employer/employee relationship or any partnership or
joint venture between Mahoney and the Company.
E. CONFIDENTIALITY. The provisions of Paragraph 7 shall apply
to Mahoney's performance of consulting services pursuant to this Paragraph 2.
3. ADDITIONAL COMPENSATION AND BENEFITS. In consideration of the
promises made by Mahoney in this Agreement and subject to the conditions hereof,
the Company agrees to the following:
A. CONTINUED SALARY. For the time period (the "Severance
Period") beginning on the Transition Date and ending on the Retirement Date,
Mahoney shall be paid his regular monthly salary in semi-monthly payments, via
direct deposit account, subject to normal payroll deductions. The payment of
these amounts during the Severance Period shall be deemed to include any
vacation pay otherwise due Mahoney. During the Severance Period, Mahoney shall
perform such duties and provide such services as the Company shall reasonably
request.
B. DEFERRED COMPENSATION. Any amounts held for and on behalf
of Mahoney under the Amended and Restated 1992 Deferred Incentive Compensation
Plan for Diebold, Incorporated shall be distributed according to the terms and
conditions of said Plan and shall be based on the termination of his employment
as of the Retirement Date. Any amounts paid hereunder shall be subject to
applicable payroll tax deductions.
C. ANNUAL BONUS PLAN. Mahoney shall be eligible to receive an
amount equal to one-half of a full year's annual bonus for 2000 under the terms
and conditions of the Annual Incentive Plan applicable to him. The percentage to
be paid under such plan (threshold, target, plan or maximum) will be determined
by the Company's performance for fiscal year end 2000. Mahoney shall not be
eligible for annual bonus participation after the 2000 bonus period. Any amounts
paid hereunder shall be subject to applicable payroll tax deductions.
D. LONG TERM EXECUTIVE INCENTIVE PLAN. Mahoney shall be
eligible to receive additional compensation under the Company's Long Term
Executive Incentive Plan ("LTIP") as follows: (i) he shall be eligible for 83.3%
of that amount that would be payable to him for the Performance Period
1998-2000; and (ii) he shall be eligible for 50% of that amount that would be
payable to him for the Performance Period 1999-2001. Any amounts paid hereunder
shall be subject to applicable payroll tax deductions.
E. STOCK OPTIONS. Mahoney shall not be eligible for any
additional grants of stock options after the Retirement Date. Mahoney's rights
with respect to stock options granted to him prior to the Retirement Date under
certain nonqualified stock option plans of the Company shall be governed by the
terms and conditions of those stock option plans based on his retirement as of
the Retirement Date; provided, however, that with respect to that certain
Nonqualified Stock Option Agreement dated October 15, 1996 (the "1996
Agreement") pursuant to which Mahoney was granted an option to purchase 75,000
shares of the Company's stock
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(which number subsequently was adjusted due to a stock split to 112,500 shares),
Mahoney's rights under the 1996 Agreement shall be based on the terms and
conditions of the 1996 Agreement with the exception that the 1996 Agreement
shall be, and hereby is, modified to extend the term of such option until the
end of the Consulting Period by amending Paragraph 4(C) of the 1996 Agreement to
replace the words "Five (5) years from the Date of Grant" with the words "July
1, 2002." Any compensation paid to Mahoney with respect to stock options will be
subject to applicable payroll tax deductions.
F. MEDICAL COVERAGE.
(I) Mahoney shall be allowed to continue on an
individual basis as a plan participant in the Diebold, Incorporated Associate
Health Care Plan during the Severance Period.
(II) During the Consulting Period, Mahoney may
continue, at his cost, his participation in the Diebold, Incorporated Health
Care Plan, pursuant as applicable to the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended ("COBRA"). During the Consulting Period,
for administrative convenience, Mahoney hereby elects to pay the cost of such
medical coverage by hereby authorizing the Company to subtract the actual cost
of his individual medical coverage from the amounts otherwise payable to him
under Paragraph 2.b, and to remit on his behalf that subtracted amount to the
appropriate entity as a payment for the medical coverage.
G. SPLIT DOLLAR AGREEMENT. Mahoney's eligibility for the Split
Dollar Executive Benefit Plan shall continue after the Transition Date. The
Company, however, shall make no further premium payments for this benefit. In
the event that Mahoney cashes in the policy he has obtained under said Plan, he
shall repay to the Company the amount of the Company's premium contribution
toward said policy. Due to his continued receipt of coverage under the Split
Dollar Executive Benefit Plan after the Retirement Date, Mahoney shall from time
to time be deemed to have received income from the Company. Any such imputed
income shall be calculated and reported to Mahoney in accordance with the
Company's usual practices and policies for retired executives, and shall be
subject to applicable payroll tax deductions.
H. MOTOR VEHICLE PROGRAM. The Company shall continue to pay to
Mahoney his current monthly Motor Vehicle Allowance during the Severance Period,
less normal payroll deductions. During his Consulting Period Mahoney shall
participate in the Company's leased vehicle program at his own expense. During
the Consulting Period, for administrative convenience, Mahoney hereby elects to
pay the cost of any such leased vehicle by hereby authorizing the Company to
subtract the actual cost of the leased vehicle from the amounts otherwise
payable to him under Paragraph 2.b, and to remit on his behalf that subtracted
amount to the appropriate entity as a payment for the leased vehicle.
I. OFFICE SPACE/SECRETARIAL SUPPORT. During the Severance
Period and the Consulting Period, the Company shall provide Mahoney with
reasonable and appropriate office space, which may be off of the Company's
premises. In addition, during the Severance Period and the Consulting Period,
the Company shall provide Mahoney with reasonable and appropriate secretarial
support.
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J. COUNTRY CLUB MEMBERSHIP.
(I) BROOKSIDE COUNTRY CLUB. The Company's payment of
Mahoney's membership at Brookside Country Club shall be continued during the
Severance Period subject to normal payroll deductions. As of the Retirement
Date, Mahoney's membership at Brookside Country Club (i.e., the stock
certificate) shall revert to him, and the value of that membership shall
constitute taxable income to Mahoney at that time and shall be factored into the
amount of payroll taxes withheld from the Continued Salary payments made to
Mahoney pursuant to Paragraph 3.a. After the Retirement Date, Mahoney shall bear
the costs of membership at Brookside Country Club.
(II) GLENMOOR COUNTRY CLUB. Mahoney's
Company-sponsored membership at Glenmoor Country Club shall also continue
through the Severance Period subject to normal payroll deductions. During the
Consulting Period, Mahoney shall continue to be eligible to utilize the
Company-sponsored membership at Glenmoor at his own expense. At the conclusion
of the Consulting Period, Mahoney agrees to transfer his Company-sponsored
membership at Glenmoor to a designee named by the Company, and the Company
agrees to pay any costs related to such transfer.
K. PROFESSIONAL FEES. The Company and Mahoney acknowledge and
agree that each shall be responsible for the payment of their respective legal
fees and costs (and related disbursements) incurred in connection with Mahoney's
resignation and all matters relating to the negotiation and execution of the
releases, employment terms and all other matters covered by this Agreement.
L. FINANCIAL SERVICES. During the Severance Period, Mahoney
shall continue to receive those financial advisory and taxation services that,
prior to the Transition Date, were provided to him by IMG at the Company's
expense, subject to normal payroll deductions. Mahoney shall have access to
these same financial services during his Consulting Period at his own cost.
During the Consulting Period, for administrative convenience, Mahoney hereby
elects to pay the cost of such financial services by hereby authorizing the
Company to subtract his actual cost for such services from the amounts otherwise
payable to him under Paragraph 2.b, and to remit on his behalf that subtracted
amount to the appropriate entity as a payment for such services.
M. RETIREMENT AND 401(K) PLANS. During the Severance Period,
Mahoney shall continue to participate in the Company's Retirement Plan for
Salaried Employees, 401(k) Savings Plan, and Supplemental Employee Retirement
Plan (collectively, "Retirement Plans"). Mahoney's post-Retirement Date
eligibility for benefits, if any, as a past employee of the Company under the
Retirement Plans shall be as set forth in the respective Plan documents and
shall be based on the termination of his employment as of the Retirement Date.
N. BUSINESS EXPENSES. At the conclusion of the Severance
Period, Mahoney will promptly pay any balance due on any Company credit card or
other account used by him. The Company will either (i) reimburse Mahoney for any
pending, reasonable business-related credit card charge for which Mahoney has
not already been reimbursed provided Mahoney files a proper Travel and Expense
Report, or (ii) pay such charge directly to the card-issuing bank. Mahoney
hereby authorizes the Company to deduct from monies due Mahoney under this
Agreement any balance remaining on Mahoney's Company credit card account after
such (i) reimbursement or (ii) direct payment.
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O. OTHER COMPENSATION AND BENEFITS. Except as specifically set
forth herein, no other compensation or benefits are due Mahoney.
4. NON-COMPETITION.
A. From the Transition Date and continuing until thirty-six
months after the end of the Consulting Period, Mahoney shall not, directly or
indirectly, do or suffer to be done any of the following (collectively, "Covered
Activities"): own, manage, control or participate in the ownership, management,
or control of, or be employed or engaged by or otherwise affiliated or
associated as a consultant, independent contractor or otherwise with any other
corporation, partnership, proprietorship, firm, association, or other business
entity, or otherwise engage in any business, which is in competition with the
Company's business; provided, however, that the ownership of not more than one
percent of any class of publicly-traded securities of any entity shall not be
deemed a violation of this Paragraph 4. For purposes of this Agreement, the
"Company's business" shall mean any business in which the Company actively
engages now or until the end of the Consulting Period, and any business in which
the Company has actively engaged in the two (2) year period prior to the date
hereof, including, without limitation, the design, manufacture, assembly,
distribution, sale, service or maintenance of those products listed in Exhibit
A.
B. In the event Mahoney shall violate any provision of this
Paragraph 4 as to which there is a specific time period during which he is
prohibited from taking certain actions or from engaging in certain activities as
set forth in such provision, then, in such event, such violation shall toll the
running of such time period from the date of such violation until such violation
shall cease. The foregoing shall in no way limit the Company's rights under
Paragraph 9 of this Agreement.
C. Mahoney has carefully considered the nature and extent of
the restrictions upon him and the rights and remedies conferred upon the Company
under this Paragraph 4 and this Agreement, and hereby acknowledges and agrees
that the same are reasonable in time and territory, are designed to eliminate
competition which otherwise would be unfair to the Company, do not stifle the
inherent skill and experience of Mahoney, would not operate as a bar to
Mahoney's sole means of support, are fully required to protect the legitimate
interests of the Company and do not confer a benefit upon the Company
disproportionate to the detriment to Mahoney. Mahoney further acknowledges that
his obligations in this Paragraph 4 are made in consideration of, and are
adequately supported by the payments by the Company to Mahoney described herein.
D. Notwithstanding the other provisions of this Paragraph 4,
Mahoney may undertake Covered Activities if he first obtains the written consent
of theCompany's Chief Executive Officer, which consent shall not be unreasonably
withheld.
5. NO SOLICITATION OF EMPLOYEES. Mahoney agrees that he will not: (i)
employ, assist in employing, or otherwise associate in business with any person
who is, or has been in the 12 month period prior to such individual's
association with Mahoney an employee, officer or agent of the Company, or any of
its affiliated, related or subsidiary entities, unless such employee was
involuntarily terminated by the Company; or (ii) induce any person who is an
employee, officer or agent of the Company, or any of its affiliated, related, or
subsidiary entities to terminate such relationship.
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6. RELEASE BY MAHONEY.
A. Mahoney for himself and his dependents, successors,
assigns, heirs, executors and administrators (and his and their legal
representatives of every kind), hereby releases, dismisses, and forever
discharges the Company from, and agrees to indemnify the Company against, any
and all arbitrations, claims (including claims for attorney's fees), demands,
damages, suits, proceedings, actions and/or causes of action of any kind and
every description, whether known or unknown, which Mahoney now has or may have
had for, upon, or by reason of any cause whatsoever (except that this release
shall not apply to the obligations of the Company arising under this Agreement),
against the Company ("Claims"), including but not limited to:
(I) any and all Claims, directly or indirectly,
arising out of or relating to: (A) Mahoney's employment with or consulting
services for the Company; and (B) Mahoney's resignation as Chairman of the Board
and any other position described in Paragraph 1 of this Agreement.
(II) any and all claims of discrimination, including
but not limited to claims of discrimination on the basis of sex, race, age,
national origin, marital status, religion or disability, including,
specifically, but without limiting the generality of the foregoing, any claims
under the Age Discrimination in Employment Act, as amended (the "ADEA"), Title
VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities
Act of 1990, the Family and Medical Leave Act of 1993 and Ohio Revised Code
Chapter 4112;
(III) any and all claims of wrongful or unjust
discharge or breach of any contract or promise, express or implied; and
(IV) any and all claims under or relating to any and
all employee compensation, employee benefit, employee severance or employee
incentive bonus plans and arrangements; provided that he shall remain entitled
to the amounts and benefits specified in Paragraph 3 above. Mahoney agrees that
he intends to release any and all worker compensation claims he may have against
the Company by this Agreement, and further agrees to execute any documentation
as may be reasonably required to perfect such release when presented to him by
the Company.
B. Mahoney understands and acknowledges that the Company does
not admit any violation of law, liability or invasion of any of his rights and
that any such violation, liability or invasion is expressly denied. The
consideration provided under this Agreement is made for the purpose of settling
and extinguishing all claims and rights (and every other similar or dissimilar
matter) that Mahoney ever had or now may have or ever will have against the
Company to the extent provided in this Paragraph 6. Mahoney further agrees and
acknowledges that no representations, promises or inducements have been made by
the Company other than as appear in this Agreement.
C. Mahoney further understands and acknowledges that:
(I) The release provided for in this Paragraph 6,
including claims under the ADEA to and including the date of this Agreement, is
in exchange for the additional consideration provided for in this Agreement, to
which consideration he was not heretofore entitled;
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(II) He has been advised by the Company to consult
with legal counsel prior to executing this Agreement and the release provided
for in this Paragraph 6, has had an opportunity to consult with and to be
advised by legal counsel of his choice, fully understands the terms of this
Agreement, and enters into this Agreement freely, voluntarily and intending to
be bound;
(III) He has been given a period of twenty-one days
to review and consider the terms of this Agreement, and the release contained
herein, prior to its execution and that he may use as much of the twenty-one day
period as he desires; and
(IV) He may, within seven days after execution,
revoke this Agreement. Revocation shall be made by delivering a written notice
of revocation to the Vice President, Human Resources at the Company. For such
revocation to be effective, written notice must be actually received by the Vice
President, Human Resources at the Company no later than the close of business on
the seventh day after Mahoney executes this Agreement. If Mahoney does exercise
his right to revoke this Agreement, all of the terms and conditions of the
Agreement shall be of no force and effect and the Company shall have no
obligation to satisfy the terms or make any payment to Mahoney as set forth in
Paragraphs 2 or 3 of this Agreement.
D. Mahoney will never file a lawsuit or other action asserting
any claim that is released in this Paragraph 6. In the event Mahoney breaches
this Paragraph 6.d, he agrees to indemnify the Company against any costs or
expenses, including attorney fees, that the Company may incur in connection with
such breach.
E. Mahoney and the Company acknowledge that his resignation is
by mutual agreement between the Company and Mahoney, and that Mahoney waives and
releases any claim that he has or may have to reemployment.
F. For purposes of the above provisions of this Paragraph 6,
the "Company" shall include its predecessors, subsidiaries, divisions, related
or affiliated companies, officers, directors, stockholders, members, employees,
heirs, successors, assigns, representatives, agents and counsel.
7. CONFIDENTIAL INFORMATION.
A. Mahoney acknowledges and agrees that in the performance of
his duties as an officer and employee of the Company, as well as in the
performance of consulting services pursuant to Paragraph 2, he was or may be
brought into frequent contact with, had or may have access to, and/or became or
may become informed of confidential and proprietary information of the Company
and/or information that is a competitive asset of the Company (collectively,
"Confidential Information") and the disclosure of which would be harmful to the
interests of the Company or its subsidiaries. Confidential Information shall
include, without limitation: (i) customer and distributor information such as
names, addresses, sales histories, purchasing habits, credit status, pricing
levels, etc., (ii) certain prospective customer and distributor information
lists, etc., (iii) product and systems specifications, schematics, designs,
concepts for new or improved products and services and other products and
services data, (iv) product and material costs, (v) suppliers' and prospective
suppliers' names, addresses and contracts, (vi) future corporate planning data,
(vii) production methods and equipment, (viii) marketing strategies, (ix) the
Company's financial results and business condition, (x) any of the foregoing
which belong to
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any other person or company but to which Mahoney has had access by reason of his
employment with the Company, and (xi) any other information which constitutes a
"trade secret" under federal or state law. Such Confidential Information is more
fully described in Subparagraph 7.b. Mahoney acknowledges that the Confidential
Information of the Company gained by Mahoney during his association with the
Company was developed by and/or for the Company through substantial expenditure
of time, effort and money and constitutes valuable and unique property of the
Company.
B. Mahoney will keep in strict confidence, and will not,
directly or indirectly, at any time, disclose, furnish, disseminate, make
available, use or suffer to be used in any manner any Confidential Information
of the Company without limitation as to when or how Mahoney may have acquired
such Confidential Information. Mahoney specifically acknowledges that
Confidential Information includes any and all information, whether reduced to
writing (or in a form from which information can be obtained, translated, or
derived into reasonably usable form), or maintained in the mind or memory of
Mahoney and whether compiled or created by the Company, which derives
independent economic value from not being readily known to or ascertainable by
proper means by others who can obtain economic value from the disclosure or use
of such information, that reasonable efforts have been put forth by the Company
to maintain the secrecy of confidential or proprietary or trade secret
information, that such information is and will remain the sole property of the
Company, and that any retention or use by Mahoney of confidential or proprietary
or trade secret information after the termination of Mahoney's employment with,
and performance of services (including consulting services pursuant to Paragraph
2) for, the Company shall constitute a misappropriation of the Company's
Confidential Information.
C. At the conclusion of the Consulting Period, Mahoney will
immediately return to the Company (to the extent he has not already returned),
equipment, software, electronic files, computers, including any laptop, in good
condition, all property of the Company, including, without limitation, property,
documents and/or all other materials (including copies, reproductions, summaries
and/or analyses) which constitute, refer or relate to Confidential Information
of the Company.
D. Mahoney further acknowledges that his obligation of
confidentiality shall survive, regardless of any other breach of this Agreement
or any other agreement, by any party hereto, until and unless such Confidential
Information of the Company shall have become, through no fault of Mahoney
generally known to the public or Mahoney is required by law (after providing the
Company with notice and opportunity to contest such requirement) to make
disclosure. Mahoney's obligations under this Paragraph 7 are in addition to, and
not in limitation or preemption of, all other obligations of confidentiality
which Mahoney may have to the Company under general legal or equitable
principles or statutes.
8. DISCLOSURE. From the date of this Agreement through the end of the
Consulting Period, Mahoney will communicate the contents of Paragraphs 4, 5, 7,
9.b, 10, and 12 of this Agreement to any person, firm, association, or
corporation other than Diebold which he intends to be employed by, associated in
business with, or represent.
9. BREACH; ARBITRATION.
A. If Mahoney breaches any of the provisions of this
Agreement, then the Company may immediately terminate all remaining payments and
benefits described in this Agreement, and in addition, the Company shall be
entitled to obtain reimbursement from
<PAGE> 10
Mahoney of all payments and benefits already provided pursuant to Paragraphs 2
or 3 of this Agreement, plus any expenses and damages incurred as a result of
the breach (including, without limitation, reasonable attorneys' fees), with the
remainder of this Agreement, and all promises and covenants herein, remaining in
full force and effect.
(I) The Company will not terminate pursuant to
Paragraph 9.a any benefits in which Mahoney had vested as of the Transition Date
under the Retirement Plans. Mahoney's COBRA rights, if any, will not be reduced
by any action taken by the Company under Paragraph 9.a.
(II) Mahoney may challenge any Company action under
Paragraph 9.a.
B. The parties agree that any disputes, controversies, or
claims of whatever nature arising out of or relating to this Agreement or breach
thereof shall be resolved through binding arbitration before a mutually
agreeable arbitrator or arbitrators, in accordance with the applicable rules of
the American Arbitration Association; provided, however, that the parties agree
that in the event of any alleged breach by Mahoney of any of his obligations
under Paragraphs 4, 5 and 7 of the Agreement, the arbitration requirements of
this Paragraph 9.b shall not apply, and that instead, the Company may elect, in
its sole discretion, to seek relief in a court of general jurisdiction in the
State of Ohio, and the parties hereby consent to the exclusive jurisdiction of
such court. In addition, in connection with any such court action. Mahoney
acknowledges and agrees that the remedy at law available to the Company for
breach by Mahoney of any of his obligations under Paragraphs 4, 5, and 7 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,
Mahoney acknowledges, consents and agrees that, in addition to any other rights
or remedies which the Company may have at law, in equity or under this
Agreement, upon adequate proof of Mahoney's violation of any provision of
Paragraphs 4, 5 or 7 of this Agreement, the Company shall be entitled to
immediate injunctive relief and may obtain a temporary order restraining any
threatened or further breach, without the necessity of proof of actual damage.
10. CONTINUED AVAILABILITY AND COOPERATION.
A. Mahoney shall cooperate fully with the Company and with the
Company's counsel in connection with any present and future actual or threatened
litigation or administrative proceeding involving the Company that relates to
events, occurrences or conduct occurring (or claimed to have occurred) during
the period of Mahoney's employment by the Company or during the Severance Period
or the Consulting Period. This cooperation by Mahoney shall include, but not be
limited to:
(I) making himself reasonably available for
interviews and discussions with the Company's counsel as well as for depositions
and trial testimony;
(II) if depositions or trial testimony are to occur,
making himself reasonably available and cooperating in the preparation therefor
as and to the extent that the Company or the Company's counsel reasonably
requests;
(III) refraining from impeding in any way the
Company's prosecution or defense of such litigation or administrative
proceeding; and
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(IV) cooperating fully in the development and
presentation of the Company's prosecution or defense of such litigation or
administrative proceeding.
B. Mahoney shall be reimbursed by the Company for reasonable
travel, lodging, telephone and similar expenses incurred in connection with such
cooperation, which the Company shall reasonably endeavor to schedule at times
not conflicting with the reasonable requirements of any employer of Mahoney, or
with the requirements of any third party with whom Mahoney has a business
relationship permitted hereunder that provides remuneration to Mahoney. Mahoney
shall not unreasonably withhold his availability for such cooperation.
C. Upon the Transition Date, Mahoney will update the Company
as to the status of all pending matters for which he was responsible or
otherwise involved. During the Severance Period, Mahoney will perform such
services and provide such consultations as the Company shall reasonably request.
D. The Company agrees to release Mahoney and indemnify and
hold him harmless against all liability or loss, and against all claims or
actions, arising from or connected with his past activities as an employee of
the Company or his activities in the performance of consulting services pursuant
to Paragraph 2, including but not limited to those claims or actions based upon
or arising out of negligent or wrongful acts to persons or property and the
defense of any such claims or actions. Notwithstanding the foregoing, the
Company will have no obligation to release, indemnify, hold harmless or defend
Mahoney for any conduct by Mahoney alleged to be intentional or willful or that
arises from a violation of any statutory prohibition unless such conduct was
specifically requested by the Company. Mahoney warrants that he has disclosed to
the Company all claims and circumstances and potential claims and circumstances
that may exist or could reasonably be brought against him concerning his past
activities as an employee.
11. SUCCESSORS AND BINDING AGREEMENT.
A. This Agreement shall be binding upon and inure to the
benefit of the Company and any successor of or to the Company, including,
without limitation, any persons acquiring, directly or indirectly, all or
substantially all of the business and/or assets of the Company whether by
purchase, merger, consolidation, reorganization, or otherwise (and such
successor shall thereafter be deemed included in the definition of "the Company"
for purposes of this Agreement), but shall not otherwise be assignable or
delegable by the Company.
B. This Agreement shall inure to the benefit of and be
enforceable by Mahoney's personal or legal representatives, executors,
administrators, successors, heirs, distributees, and/or legatees.
C. This Agreement is personal in nature and none of the
parties hereto shall, without the consent of the other parties, assign, transfer
or delegate this Agreement or any rights or obligations hereunder except as
expressly provided in Subparagraphs (a) and (b) of this Paragraph 11.
D. This Agreement is intended to be for the exclusive benefit
of the parties hereto, and except as provided in Subparagraphs (a) and (b) of
this Paragraph 11, no third party shall have any rights hereunder.
<PAGE> 12
12. NON-DISCLOSURE; STATEMENTS TO THIRD PARTIES.
A. All provisions of this Agreement and the circumstances
giving rise hereto are and shall remain confidential and shall not be disclosed
to any person not a party hereto (other than (i) Mahoney's spouse, if any, (ii)
each party's attorney, financial advisor and/or tax advisor to the extent
necessary for such advisor to render appropriate legal, financial and tax
advice, and (iii) persons or entities that fall within the scope of Paragraphs 4
and 5 of this Agreement, but only to the extent required thereby), except as
necessary to carry out the provisions of this Agreement, and except as may be
required by law. Notwithstanding the foregoing, this Agreement may be filed with
or provided to the Securities and Exchange Commission or any other governmental
instrumentality or agency, including the Internal Revenue Service, if the
Company deems such filing or provision to be necessary.
B. Because the purpose of this Agreement is to settle amicably
any and all potential disputes or claims among the parties, neither Mahoney nor
the Company shall, directly or indirectly, make or cause to be made any
statements to any third parties criticizing or disparaging the other or
commenting on the character or business reputation of the other. Mahoney further
hereby agrees not: (i) to comment to others concerning the status, plans or
prospects of the business of the Company, or (ii) to engage in any act or
omission that would be detrimental, financially or otherwise, to the Company, or
that would subject the Company to public disrespect, scandal, or ridicule. For
purposes of this Subparagraph 12.b, the "Company" shall mean Diebold,
Incorporated and its directors, officers, predecessors, parents, subsidiaries,
divisions, and related or affiliated companies.
13. NOTICES. For all purposes of this Agreement, all communications
provided for herein shall be in writing and shall be deemed to have been duly
given when delivered, addressed to the Company (to the attention of the CEO) at
its principal executive offices and to Mahoney at his principal residence, 5291
St. Andrews Drive NW, Canton, Ohio 44708, or to such other address as any party
may have furnished to the other in writing and in accordance herewith. Notices
of change of address shall be effective only upon receipt.
14. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in writing signed by Mahoney and the Company. No waiver by either party hereto
at any time of any breach by the other party hereto or compliance with any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied with respect to the subject matter
hereof have been made by any of the parties that are not set forth expressly in
this Agreement and every one of them (if, in fact, there have been any) is
hereby terminated without liability or any other legal effect whatsoever.
15. ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
shall supersede all prior verbal or written agreements, covenants,
communications, understandings, commitments, representations or warranties,
whether oral or written, by any party hereto or any of its representatives
pertaining to such subject matter.
16. GOVERNING LAW. Any dispute, controversy, or claim of whatever
nature arising out of or relating to this Agreement or breach thereof shall be
governed by and under the laws of the State of Ohio.
<PAGE> 13
17. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall nevertheless remain in full force and
effect.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Agreement.
19. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used herein are for convenience and are not part of this Agreement and shall not
be used in construing it.
20. FURTHER ASSURANCES. Each party hereto shall execute such additional
documents, and do such additional things, as may reasonably be requested by the
other party to effectuate the purposes and provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above.
DIEBOLD, INCORPORATED
By: /s/ Charles B. Scheurer
Title: Vice President, Human Resources
Date: May 23, 2000
Witness: /s/ Maryann Hoover /s/ Robert W. Mahoney
---------------------- ---------------------------
Robert W. Mahoney
Date: 5/23/00
<PAGE> 14
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
Transaction Processing
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.