<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from .............. to ..............
Commission file number 1-4879
------
DIEBOLD, INCORPORATED
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-0183970
- ---------------------------------------- ------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
5995 Mayfair Road, P.O. Box 3077,
North Canton, Ohio 44720-8077
- ---------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (330) 490-4000
- --------------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
Common Shares, as of the latest practicable date.
Class Outstanding at October 29, 1998
----- -------------------------------
Common Shares $1.25 Par Value 68,791,944 Shares
------------------------------ ----------
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<PAGE> 2
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets -
September 30, 1998 and December 31, 1997 3
Condensed Consolidated Statements of Income -
Three Months and Nine Months Ended September 30, 1998 and 1997 4
Condensed Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
ITEM 5. Other Information 11
ITEM 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 13
INDEX TO EXHIBITS 14
</TABLE>
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<PAGE> 3
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
1998 1997
------------- ------------
<S> <C> <C>
ASSETS
- ------
Current assets
Cash and cash equivalents $ 35,321 $ 20,296
Short-term investments 38,727 36,473
Trade receivables 276,438 302,885
Inventories 136,971 128,082
Prepaid expenses and other current assets 78,723 62,101
--------- --------
Total current assets 566,180 549,837
Securities and other investments 138,911 137,862
Property, plant and equipment, at cost 281,045 259,634
Less accumulated depreciation and amortization 127,619 115,733
--------- --------
153,426 143,901
Finance receivables 65,718 60,970
Other assets 90,020 98,480
---------- --------
$1,014,255 $991,050
========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Accounts payable and other current liabilities $ 163,870 $181,189
Deferred income 78,072 60,891
Accrued realignment liabilities 30,987 --
---------- --------
Total current liabilities 272,929 242,080
Bonds payable 20,800 20,800
Pensions 22,207 20,615
Postretirement benefits 22,303 22,033
Minority interest 2,715 16,941
Shareholders' equity
Preferred Shares, no par value, authorized
1,000,000 shares, none issued
Common Shares, par value $1.25, authorized
125,000,000, issued 69,418,565 and
69,275,714 shares, respectively; outstanding 68,791,134
and 69,004,838 shares, respectively 86,773 86,595
Additional capital 40,392 38,247
Retained earnings 579,503 566,710
Treasury shares, at cost (627,431 and 270,876 shares, respectively) (22,393) (12,882)
Accumulated other comprehensive income (10,338) (9,706)
Other (636) (383)
---------- --------
Total shareholders' equity 673,301 668,581
---------- --------
$1,014,255 $991,050
========== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 4
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Unaudited)
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ----------------------
Net sales 1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Products $175,308 $213,162 $542,339 $588,643
Services 111,983 104,616 321,283 296,945
-------- -------- -------- --------
287,291 317,778 863,622 885,588
Cost of sales
Products 109,747 135,110 334,019 364,038
Services 77,505 74,146 227,544 214,466
-------- -------- -------- --------
187,252 209,256 561,563 578,504
Special charges -- -- 9,864 --
Gross profit 100,039 108,522 292,195 307,084
Selling and administrative expense 45,243 47,289 143,995 137,690
Research, development and engineering expense 12,356 12,783 41,329 38,756
-------- -------- -------- --------
57,599 60,072 185,324 176,446
Realignment charges -- -- 51,253 --
Operating profit 42,440 48,450 55,618 130,638
Investment income 4,565 4,697 13,896 14,258
Miscellaneous, net (133) (2,205) (2,146) (6,209)
Minority interest (425) (859) (817) (6,115)
-------- -------- -------- --------
Income before taxes 46,447 50,083 66,551 132,572
Taxes on income 17,056 17,027 24,753 45,093
-------- -------- -------- --------
Net income $ 29,391 $ 33,056 $ 41,798 $ 87,479
======== ======== ======== ========
Basic weighted - average shares outstanding 68,905 68,957 69,009 68,925
Diluted weighted - average shares outstanding 69,137 69,691 69,382 69,462
Basic earnings per share $ 0.43 $ 0.48 $ 0.61 $ 1.27
Diluted earnings per share $ 0.43 $ 0.47 $ 0.60 $ 1.26
Cash dividends paid per Common Share $ 0.140 $ 0.125 $ 0.420 $ 0.375
========= ========= ======== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 5
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Nine months Ended
September 30
1998 1997
-------- --------
<S> <C> <C>
Cash flow from operating activities:
Net income $41,798 $87,479
Adjustments to reconcile net income to cash
provided by operating activities:
Realignment and special charges 61,117 --
Minority share of income 817 6,115
Depreciation and amortization 15,570 13,164
Other charges and amortization (8,775) 6,708
Cash used by changes in certain
current assets and liabilities (4,410) (57,842)
Changes in deferred income 17,181 14,915
Other 4,613 2,536
------- -------
Total adjustments 86,113 (14,404)
------- -------
Net cash provided by operating activities 127,911 73,075
Cash flow from investing activities:
Proceeds from maturities and sales of investments 30,476 55,412
Payments for purchases of investments (37,529) (36,369)
Capital expenditures (27,818) (56,822)
Increase in certain other assets (15,722) (10,426)
Investment in customer financing (9,959) (12,386)
------- -------
Net cash used by investing activities (60,552) (60,591)
Cash flow from financing activities:
Dividends paid (29,005) (25,851)
Issuance and repurchase of Common Shares (7,188) 529
Distribution for purchase of IBM's minority interest in InterBold (16,141) --
Proceeds from long-term borrowings -- 20,800
------- -------
Net cash used by financing activities (52,334) (4,522)
------- -------
Increase in cash and cash equivalents 15,025 7,962
Cash and cash equivalents at the beginning of the period 20,296 21,885
------- -------
Cash and cash equivalents at the end of the period $35,321 $29,847
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 6
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
(Dollars in thousands)
1. The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments), which are, in the opinion of management, necessary for a fair
statement of the results for the interim periods. The condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto together with management's discussion
and analysis of financial condition and results of operations contained in
the Registrant's Annual Report on Form 10-K for the year ended December 31,
1997. In addition, the Registrant's statements in this Form 10-Q report may
be considered forward-looking and involve risks and uncertainties that could
significantly impact expected results. A discussion of these risks and
uncertainties is contained in the management's discussion and analysis of
financial condition and results of operations in this Form 10-Q. The results
of operations for the nine month period ended September 30, 1998 are not
necessarily indicative of results to be expected for the full year.
2. The basic and diluted earnings per share computations in the condensed
consolidated statements of income are based on the weighted-average number of
shares outstanding during each period reported. The following data show the
amounts used in computing earnings per share and the effect on the
weighted-average number of shares of dilutive potential common stock.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Numerator:
Income used in basic and diluted
Earnings per share $ 29,391 $ 33,056 $ 41,798 $ 87,479
Denominator:
Basic weighted-average shares 68,905 68,957 69,009 68,925
Effect of dilutive potential common stock 232 734 373 537
-------- -------- -------- --------
Diluted weighted-average shares 69,137 69,691 69,382 69,462
-------- -------- -------- --------
Basic earnings per share $ 0.43 $ 0.48 $ 0.61 $ 1.27
Diluted earnings per share $ 0.43 $ 0.47 $ 0.60 $ 1.26
Anti-dilutive shares not used in
Calculating diluted weighted-average Shares 1,248 0 1,183 419
</TABLE>
<TABLE>
<CAPTION>
3. Inventory detail at: September 30, 1998 December 31, 1997
------------------ -----------------
<S> <C> <C>
Finished goods and service parts $ 57,456 $ 44,776
Work in process 79,351 82,985
Raw materials 164 321
-------- --------
Total inventory $136,971 $128,082
======== ========
</TABLE>
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<PAGE> 7
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
----------------------------------------------------------------
(Unaudited)
(Dollars in thousands)
4. The Registrant has reclassified the presentation of certain prior-year
information to conform with the current presentation format.
5. The Registrant adopted Financial Accounting Standards No. 130, "Reporting
Comprehensive Income," on January 1, 1998. As required by the Statement, the
Registrant displays the accumulated balance of other comprehensive income
separately from retained earnings and additional paid-in capital in the
equity section of the Balance Sheet. Items considered to be other
comprehensive income include adjustments made for foreign currency
translation (under Statement 52), pensions (under Statement 87) and
unrealized holding gains and losses on available-for-sale securities (under
Statement 115). Comprehensive income/(loss) for the three months ended
September 30, 1998 and 1997 was $28,518 and $31,768, respectively.
Comprehensive income for the nine months ended September 30, 1998 and 1997
was $41,165 and $87,873, respectively.
6. In the second quarter of 1998, the Registrant recognized a $41,850 after-tax
charge in connection with a corporate-wide realignment program. The major
components of the realignment charge were as follows: A special charge of
$9,864 for items relating to cost of sales, and a realignment charge of
$51,253 relating to write off of impaired assets, exiting of product lines,
staffing reductions, and other components. A reserve accrual of $36,260
was established for the realignment costs associated with the program to be
paid in the future. As of September 30, 1998, 489 jobs have been eliminated.
Savings from the realignment program are estimated to be $22,000 annually.
The following data shows the activity to date in the realignment accrual:
<TABLE>
<CAPTION>
Facility Closing
and Write Down Staffing
of Assets Reductions Other Total
---------------- ---------- -------- --------
<S> <C> <C> <C> <C>
Realignment accrual at June 30, 1998 $ 15,453 $ 7,691 $ 12,464 $ 35,608
3rd quarter activity (1,729) (2,171) (721) (4,621)
--------------------------------------------------------
Balance at September 30, 1998 $ 13,724 $ 5,520 $ 11,743 $ 30,987
========================================================
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
As of September 30, 1998
(Unaudited)
(Dollars in thousands except for per share data)
Changes in Financial Condition
- ------------------------------
The Registrant continued to show a strong balance sheet at September 30, 1998.
Total assets increased to $1,014,255 at September 30, 1998 from $991,050 at
December 31, 1997. Cash, cash equivalents and short-term investments increased
to $74,048 at September 30, 1998 from $56,769 at December 31, 1997. These assets
along with securities and other investments accounted for 21% of total assets at
September 30, 1998 and 20% of total assets at December 31, 1997. Securities and
other investments consist principally of tax-free municipal bonds, preferred
stock, and other investments. The Registrant also continues to expand its
portfolio of finance receivables through increased efforts by the Diebold Credit
Corporation. Long term finance receivables increased to $65,718 at September 30,
1998 from $60,970 at December 31, 1997.
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<PAGE> 8
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
As of September 30, 1998
(Unaudited)
(Dollars in thousands except for per share data)
Future capital expenditures and increases in working capital are expected to be
financed primarily through internally generated funds. The Registrant's
investment portfolio is available for any funding needs if required. External
financing is also available if needed through the Registrant's lines of credit.
At September 30, 1998, the Registrant had unused lines of credit approximating
$150,000, all unrestricted as to use. These lines of credit represent an
additional and immediate source of liquidity.
Shareholders' equity per Common Share at September 30, 1998 increased to $9.79
from $9.69 at December 31, 1997. Treasury shares increased to $22,393 at
September 30, 1998 from $12,882 at December 31, 1997, due to the Registrant's
repurchasing of common shares. The third quarter cash dividend of $0.14 per
share was paid on September 4, 1998 to shareholders of record on August 14,
1998. On October 13, 1998, the fourth quarter cash dividend of $0.14 per share
was declared payable on December 4, 1998 to shareholders of record on November
13, 1998. Diebold, Incorporated shares are listed on the New York Stock Exchange
under the symbol of DBD. The market price during the first nine months of 1998
fluctuated within the range of $20.00 and $55.31.
Results of Operations
- ---------------------
Third Quarter of 1998 Comparison to Third Quarter of 1997
- ---------------------------------------------------------
Overall, net sales for the third quarter of 1998 decreased from the same period
in 1997 by $30,487 or 10%, due mainly to decreased shipments of self-service
terminals both in the domestic and international markets. As the Registrant
continues to set up its own international sales channels due to the Registrant's
purchase of IBM's 30% share in the InterBold joint venture in January 1998,
fewer product sales to IBM have been recorded. The Registrant expects the
downturn in sales to IBM to continue, but to be offset by increased sales
through its new international sales channels over time. Net service sales for
the quarter were up from the prior year by $7,367 or 7%. Total gross profit
decreased $8,483 or 8% from the third quarter's results in 1997. Operating
expenses decreased $2,473 or 4% from the same period in 1997, largely due to
decreased spending under the Registrant's realignment program. Operating profit
decreased $6,010 or 12% from third quarter 1997's performance, primarily due to
volume shortfalls in self-service terminals.
Nine Month 1998 Comparison to Nine Month 1997
- ---------------------------------------------
Consolidated net sales for the nine months ended September 30, 1998 fell short
of the same period in 1997 by $21,966 or 2%. Service sales continue to post
strong results by increasing year-to-date by $24,338 or 8% over the prior year.
Total gross profits for the first nine months of 1998 decreased by $14,889 or 5%
from the prior year, due largely to the Registrant's special charge of $9,864
relating to its realignment in the second quarter of 1998. Operating expenses
increased by $8,878 or 5% over the same period in 1997, due in part to higher
expenses charged prior to the Registrant's implementation of its realignment
program in the second quarter of 1998. Operating profit for the first nine
months of 1998, exclusive of the realignment charge, was $116,735 versus
$130,638 for the same period in 1997.
The Registrant's backlog of unfilled orders was $272,900 at September 30, 1998,
compared to $281,446 at September 30, 1997, a decrease of $8,546 or 3%. The
Registrant believes that order backlog information is not, by itself, a
meaningful indicator of future revenue streams. Numerous factors influence the
amount and timing of revenue recognized in future periods.
-8-
<PAGE> 9
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
As of September 30, 1998
(Unaudited)
(Dollars in thousands except for per share data)
Corporate Realignment Charge
- ----------------------------
On July 9, 1998, the Registrant announced the details of a corporate-wide
realignment program to enhance its competitive position and streamline its
operations for lower sales volumes. Industry-wide banking trends such as bank
mega-mergers, as well as the transition from IBM to the Registrant's own
international distribution channels prompted the re-evaluation of the
Registrant's business plans and organizational structure. The realignment
resulted in a one-time, after-tax charge of $41,850, or $0.60 per share, against
second quarter earnings.
Elements of the realignment and special charge include: Write-down of certain
impaired intangible assets, streamlining of product development and
manufacturing operations, elimination of non-core product lines, write-down of
certain impaired assets of discontinued product lines, consolidation of some
North American facilities, restructuring of specific international functions
related to ending the role of IBM as the Registrant's primary international
distributor, and the elimination of more than 600 jobs corporate-wide. The
Registrant estimates savings of $22,000 annually from the realignment program.
Year 2000 Disclosure
- --------------------
The Registrant is highly committed to providing products and systems that are
ready to operate in the Year 2000 and beyond. Strategic initiatives have been
under way to address the readiness of products delivered to our customers,
corporate business systems, and the readiness of our suppliers. All of these
initiatives are in place to assist in the continued delivery of products and
services to our customers without interruption.
The Registrant is actively pursuing the Year 2000 readiness of its corporate
systems. The project was initiated in 1996 within the corporate Information
Systems department. Corporate applications have been inventoried and categorized
as active, inactive, or Year 2000 ready. To assist in this process and verify
the results, the Registrant is pursuing the evaluation and remediation, if
necessary, of all of the active applications including Service Invoicing,
Customer Information systems, Service systems, Dispatch systems, and Financial
systems. A new Enterprise system, verified to be Year 2000 ready by the system
provider, is being installed that addresses Manufacturing, Order Entry, and
links to the other corporate applications.
The Registrant's corporate information systems project completion is scheduled
for the first quarter of 1999. As required by standard accounting practice, the
Registrant is expensing as incurred all costs associated with these systems
changes. The costs are not expected to have a material effect on the
Registrant's financial position or results of operations.
A project is also under way to contact suppliers to assess their level of
readiness for operating in the Year 2000 and beyond. The Registrant will
evaluate the readiness of the suppliers and take appropriate steps to develop a
confidence that they will experience continued operation without interruption in
business.
The Registrant has formed an Oversight Committee to continually review issues
related to the Year 2000 requirements. This Committee, consisting of senior
management members, remains focused on the completion of all Year 2000 related
initiatives, and appropriation of sufficient resources to ensure timely
completion of Year 2000 activities. Additional Year 2000 information on products
and services can be found on the Registrant's Web site at www.diebold.com.
-9-
<PAGE> 10
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
As of September 30, 1998
(Unaudited)
(Dollars in thousands except for per share data)
Forward-Looking Statement Disclosure
- ------------------------------------
In the Registrant's written or oral statements, the use of the words "believes,"
"anticipates," "expects" and similar expressions is intended to identify
forward-looking statements which have been made and may in the future be made by
or on behalf of the Registrant, including statements concerning future operating
performance, the Registrant's share of new and existing markets, and the
Registrant's short- and long-term revenue and earnings growth rates. Although
the Registrant believes that its outlook is based upon reasonable assumptions
regarding the economy, its knowledge of its business, and on key performance
indicators which impact the Registrant, there can be no assurance that the
Registrant's goals will be realized. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. The Registrant's uncertainties could cause actual results to differ
materially from those anticipated in forward-looking statements. These include,
but are not limited to:
- - competitive pressures, including pricing pressures and technological
developments;
- - changes in the Registrant's relationships with customers, suppliers,
distributors and/or partners in its business ventures;
- - changes in political, economic or other factors such as currency exchange
rates, inflation rates, recessionary or expansive trends, taxes and
regulations and laws affecting the worldwide business in each of the
Registrant's operations;
- - acceptance of the Registrant's product and technology introductions in the
marketplace;
- - unanticipated litigation, claims or assessments; and
- - the ability to implement the steps of the corporate realignment program.
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<PAGE> 11
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 1O-Q
PART II. OTHER INFORMATION
ITEM 5. Other Information
In the Registrant's Proxy Statement for the 1998 Annual Meeting of
Shareholders, Registrant notified shareholders that proposals for
its 1999 Annual Meeting of Shareholders must be received by the
Secretary of Registrant no later than November 7, 1998 for
consideration for inclusion in the Proxy Statement and form of Proxy
for that meeting.
Rule 14a-4(c)(1) was recently amended under the Securities Exchange
Act of 1934, as amended. If a shareholder intends to submit a
proposal for consideration at the 1999 Annual Meeting of
Shareholders, such shareholder must notify the Secretary of
Registrant of such proposal on or before January 20, 1999. If proper
notification is not provided to Registrant, then management proxies
will be permitted to use their discretionary voting authority to
vote on the proposal in the event it is presented at the 1999 Annual
Meeting of Shareholders.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 (i) Amended and Restated Articles of Incorporation of Diebold,
Incorporated -- incorporated by reference to Exhibit 3.1(i) of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994.
3.1 (ii) Code of Regulations -- incorporated by reference to Exhibit 4(c) to
Registrant's Post-Effective Amendment No. 1 to Form S-8 Registration
Statement No. 33-32960.
3.2 Certificate of Amendment by Shareholders to Amended Articles of
Incorporation of Diebold, Incorporated -- incorporated by reference
to Exhibit 3.2 to Registrant's Form 10-Q for the quarter ended
March 31, 1996.
4. Rights Agreement dated as of February 10, 1989 between Diebold,
Incorporated and the Bank of New York as successor Rights Agent to
Key Bank, N.A. -- incorporated by reference to Exhibit 2.1 to
Registrant's Registration Statement on Form 8-A dated February 10,
1989.
*10.1 Form of Employment Agreement as amended and restated as of
September 13, 1990 -- incorporated by reference to Exhibit 10.1 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1990.
*10.2 Schedule of Certain Officers who are Parties to Employment
Agreements in the form of Exhibit 10.1 -- incorporated by reference
to Exhibit 10.2 to Registrant's Form 10-Q for the quarter ended
June 30, 1998.
*10.3 (i) Supplemental Retirement Benefit Agreement with William T. Blair --
incorporated by reference to Exhibit 10.3 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1995.
*10.3 (ii) Consulting Agreement with William T. Blair -- incorporated by
reference to Exhibit 10.3(ii) to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996.
*10.5 (i) Supplemental Employee Retirement Plan (as amended January 1, 1994)
-- incorporated by reference to Exhibit 10.5 of Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994.
*10.5 (ii) Amendment No. 1 to the Amended and Restated Supplemental Retirement
Plan -- incorporated by reference to Exhibit 10.5 (ii) to
Registrant's Form 10-Q for the quarter ended March 31, 1998.
-11-
<PAGE> 12
10.6 Amended and Restated Partnership Agreement dated as of September 12,
1990 -- incorporated by reference to Exhibit 10 to Registrant's
Form 8-K dated September 26, 1990.
*10.7 (i) 1985 Deferred Compensation Plan for Directors of Diebold,
Incorporated -- incorporated by reference to Exhibit 10.7 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992.
*10.7 (ii) Amendment No. 1 to the Amended and Restated 1985 Deferred
Compensation Plan for Directors of Diebold, Incorporated --
incorporated by reference to Exhibit 10.7 (ii) to Registrant's
Form 10-Q for the quarter ended March 31, 1998.
*10.8 (i) 1991 Equity and Performance Incentive Plan as Amended and Restated
-- incorporated by reference to Exhibit 10.8 to Registrant's
Form 10-Q for the quarter ended March 31, 1997.
*10.8 (ii) Amendment No. 1 to the 1991 Equity and Performance Incentive Plan as
Amended and Restated.
*10.9 Long-Term Executive Incentive Plan -- incorporated by reference to
Exhibit 10.9 of Registrant's Annual Report on Form 10-K for the year
ended December 31, 1993.
*10.10 (i) 1992 Deferred Incentive Compensation Plan (as amended and restated
as of July 1, 1993) -- incorporated by reference to Exhibit 10.10 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993.
*10.10 (ii) Amendment No. 1 to the Amended and Restated 1992 Deferred Incentive
Compensation Plan -- incorporated by reference to Exhibit 10.10 (ii)
to Registrant's Form 10-Q for the quarter ended March 31, 1998.
*10.10 (iii)Amendment No. 2 to the Amended and Restated 1992 Deferred Incentive
Compensation Plan.
*10.11 Annual Incentive Plan -- incorporated by reference to Exhibit 10.11
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992.
*10.13 (i) Forms of Deferred Compensation Agreement and Amendment No. 1 to
Deferred Compensation Agreement -- incorporated by reference to
Exhibit 10.13 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996.
*10.13 (ii) Section 162(m) Deferred Compensation Agreement (as amended and
restated January 29, 1998) -- incorporated by reference to
Exhibit 10.13 (ii) to Registrant's Form 10-Q for the quarter ended
March 31, 1998.
* Reflects management contract or other compensatory arrangement.
27. Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed by the Registrant during the
quarter ended September 30, 1998.
-12-
<PAGE> 13
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DIEBOLD, INCORPORATED
---------------------------------------
(Registrant)
Date: October 30, 1998 By: /s/ Robert W. Mahoney
---------------- ------------------------------------
Robert W. Mahoney
Chairman of the Board, President and
Chief Executive Officer
Date: October 30, 1998 By: /s/ Gerald F. Morris
---------------- ------------------------------------
Gerald F. Morris
Executive Vice President and
Chief Financial Officer
(Principal Accounting and
Financial Officer)
-13-
<PAGE> 14
DIEBOLD, INCORPORATED
FORM 10-Q
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<S> <C> <C>
3.1 (i) Amended and Restated Articles of Incorporation of Diebold,
Incorporated -- incorporated by reference to Exhibit 3.1(i) of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994. --
3.1 (ii) Code of Regulations -- incorporated by reference to Exhibit 4(c) to
Registrant's Post-Effective Amendment No. 1 to Form S-8 Registration
Statement No. 33-32960. --
3.2 Certificate of Amendment by Shareholders to Amended Articles of
Incorporation of Diebold, Incorporated -- incorporated by reference
to Exhibit 3.2 to Registrant's Form 10-Q for the quarter ended
March 31, 1996. --
4. Rights Agreement dated as of February 10, 1989 between Diebold,
Incorporated and The Bank of New York as successor Rights Agent to
Key Bank, N.A.-- incorporated by reference to Exhibit 2.1 to
Registrant's Registration Statement on Form 8-A dated February 10,
1989. --
10.1 Form of Employment Agreement as amended and restated as of
September 13, 1990 -- incorporated by reference to Exhibit 10.1 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1990. --
10.2 Schedule of Certain Officers who are Parties to Employment
Agreements in the form of Exhibit 10.1 -- incorporated by reference
to Exhibit 10.2 to Registrant's Form 10-Q for the quarter ended
June 30, 1998. --
10.3 (i) Supplemental Retirement Benefit Agreement with William T. Blair --
incorporated by reference to Exhibit 10.3 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1995. --
10.3 (ii) Consulting Agreement with William T. Blair -- incorporated by
reference to Exhibit 10.3(ii) to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996. --
10.5 (i) Supplemental Employee Retirement Plan (as amended January 1, 1994)
-- incorporated by reference to Exhibit 10.5 of Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994. --
10.5 (ii) Amendment No. 1 to the Amended and Restated Supplemental
Retirement Plan -- incorporated by reference to Exhibit 10.5 (ii) to
Registrant's Form 10-Q for the quarter ended March 31, 1998. --
</TABLE>
-14-
<PAGE> 15
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<S> <C> <C>
10.6 Amended and Restated Partnership Agreement dated as of September 12,
1990 -- incorporated by reference to Exhibit 10 to Registrant's
Form 8-K dated September 26, 1990. --
10.7 (i) 1985 Deferred Compensation Plan for Directors of Diebold,
Incorporated -- incorporated by reference to Exhibit 10.7 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992. --
10.7 (ii) Amendment No. 1 to the Amended and Restated 1985 Deferred
Compensation Plan for Directors of Diebold, Incorporated --
incorporated by reference to Exhibit 10.7 (ii) to Registrant's
Form 10-Q for the quarter ended March 31, 1998. --
10.8 (i) 1991 Equity and Performance Incentive Plan as Amended and Restated
incorporated by reference to Exhibit 10.8 to Registrant's Form 10-Q
for the quarter ended March 31, 1997. --
10.8 (ii) Amendment No. 1 to the 1991 Equity and Performance Incentive Plan as
Amended and Restated. 16
10.9 Long-Term Executive Incentive Plan -- incorporated by reference to
Exhibit 10.9 of Registrant's Annual Report on Form 10-K for the year
ended December 31, 1993. --
10.10 (i) 1992 Deferred Incentive Compensation Plan (as amended and restated
as of July 1, 1993) -- incorporated by reference to Exhibit 10.10 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993. --
10.10 (ii) Amendment No. 1 to the Amended and Restated 1992 Deferred Incentive
Compensation Plan -- incorporated by reference to Exhibit 10.10 (ii)
to Registrant's Form 10-Q for the quarter ended March 31, 1998. --
10.10 (iii) Amendment No. 2 to the Amended and Restated 1992 Deferred Incentive
Compensation Plan. 17
10.11 Annual Incentive Plan -- incorporated by reference to Exhibit 10.11
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992. --
10.13 (i) Forms of Deferred Compensation Agreement and Amendment No. 1 to
Deferred Compensation Agreement -- incorporated by reference to
Exhibit 10.13 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996. --
10.13 (ii) Section 162 (m) Deferred Compensation Agreement (as amended and
restated January 29, 1998) -- incorporated by reference to
Exhibit 10.13 (ii) to Registrant's Form 10-Q for the quarter ended
March 31, 1998. --
27. Financial Data Schedule. 18
</TABLE>
-15-
<PAGE> 1
EXHIBIT 10.8(ii)
DIEBOLD, INCORPORATED
AMENDMENT NO. 1 TO THE 1991 EQUITY AND PERFORMANCE
INCENTIVE PLAN (AS AMENDED AND RESTATED AS OF JANUARY 30, 1997)
---------------------------------------------------------------
Pursuant to Section 18 of the Diebold, Incorporated Equity and
Performance Incentive Plan (as Amended and Restated as of January 30, 1997) (the
"Plan"), the Board of Directors of Diebold, Incorporated hereby amends the Plan
as follows effective as of August 4, 1998:
1. The definition of "Reload Option Rights" in Section 2 of the Plan
is amended in its entirety to read as follows:
"Reload Option Rights" means additional Option Rights granted
automatically to an Optionee upon the exercise of Option Rights
pursuant to Section 4(f) or Section 9(a)(ix) of this Plan.
2. The first sentence is added to Section 9(a)(iii) of the Plan:
Notwithstanding the foregoing, the Board may provide that
Option Rights granted after August 4, 1998 may become exercisable at
an earlier time, but not earlier than one year from the Date of
Grant, if the Optionee elects to defer gain on the exercise of such
Option Rights.
3. The following paragraph (ix) is added to Section 9(a) of
the Plan:
(ix) Each grant may provide for the automatic grant of Reload
Option Rights to an Optionee upon the exercise of Option Rights
(including Reload Option Rights) using Common Shares. Reload Option
Rights shall cover up to the number of Common Shares surrendered to
the Corporation upon any such exercise in payment of the Option
Price. Reload Options may have an Option Price that is no less than
that which represents the same percentage of the Market Value per
Share at the time of exercise of the Option Rights that the per
share Option Price represented of the Market Value per Share at the
time the Option Rights being exercised were granted and shall be on
such other terms as may be specified by the Directors, which may be
the same as or different from those of the original Option Rights.
The Plan shall not otherwise be supplemented or amended by virtue of
this Amendment No. 1 to the Plan, and shall remain in full force and effect.
Executed at Canton, Ohio as of this 4th day of August, 1998.
DIEBOLD, INCORPORATED
By: /s/ Gerald F. Morris
------------------------------
Gerald F. Morris
Executive Vice President and
Chief Financial Officer
-16-
<PAGE> 1
EXHIBIT 10.10(iii)
AMENDMENT NO. 2
TO THE
AMENDED AND RESTATED
1992 DEFERRED INCENTIVE COMPENSATION
PLAN FOR DIEBOLD, INCORPORATED
------------------------------
Diebold, Incorporated hereby amends the Amended and Restated 1992
Deferred Incentive Compensation Plan (which was last amended and restated
effective January 1, 1995) (the "Plan") as hereinafter set forth. Words and
phrases used herein with initial capital letters that are defined in the Plan
are used herein as so defined.
I.
Section 2 of Article II of the Plan is hereby amended to read as
follows:
2. ELECTION TO DEFER. An Eligible Associate who desires to defer the
payment of all or a portion of his or her Incentive Compensation must complete
and deliver an Election Agreement to the Secretary of the Company before the
first day of the Year in which Incentive Compensation would otherwise be paid.
An Eligible Associate who timely delivers an Election Agreement to the Secretary
of the Company shall be a Participant. An Election Agreement that is timely
delivered shall be effective for the succeeding Year and, except as otherwise
specified by an Eligible Associate in his or her Election Agreement, shall
continue to be effective from Year to Year until revoked or modified by written
notice to the Secretary of the Company or until terminated automatically upon
either the termination of the Plan or the Company becoming Insolvent. Except as
provided for in Subsection (iii) of Section 5 of this Article, in order to be
effective to revoke or modify an election to defer Incentive Compensation
otherwise payable in any particular Year, a revocation or modification must be
delivered prior to the beginning of the first Year of service for which such
Incentive Compensation is payable.
-17-
<PAGE> 2
II.
Section 5(iii) of Article II of the Plan is hereby amended to read
as follows:
(iii) Subject to the approval of the Company as described below in
this Section, a Participant may make a subsequent election requesting a change
in the period of deferral (subject to the limitations set forth in Section 3 of
this Article) and/or the form of payment (subject to the limitations set forth
in this Section 5). Such subsequent election shall be in writing on a form
provided by the Company, which form must be filed with the Company (a) at a time
at which the Participant is an employee of the Company and (b), except as
described below in the sentence that immediately follows, at least 180 days
prior to the date on which the Participant otherwise would be entitled to
receive a lump sum payment or the first installment of a payment, as the case
may be. The 180-day notice requirement described in (b) above, however, does not
apply in the case where the Participant otherwise would be entitled to receive a
lump sum payment or the first installment of a payment following an involuntary
termination of the Participant's employment, including by reason of death or
disability. Payment of benefits pursuant to the subsequent election of a
Participant under this Section is subject to the approval of the Company, which
may, at its discretion, approve or withdraw its prior approval of such
subsequent election at any time prior to the date the lump sum payment is
actually paid to the Participant or the first installment is actually paid to
the Participant, as the case may be, and instead require that benefits be paid
in accordance with the latest valid election of the Participant.
Executed at Canton, Ohio as of this 4th day of August, 1998.
DIEBOLD, INCORPORATED
By: /s/ Gerald F. Morris
-----------------------------
Gerald F. Morris
Executive Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 1998 AND CONDENSED CONSOLIDATED
STATEMENTS OF INCOME FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 35,321
<SECURITIES> 38,727
<RECEIVABLES> 276,438
<ALLOWANCES> 0
<INVENTORY> 136,971
<CURRENT-ASSETS> 566,180
<PP&E> 281,045
<DEPRECIATION> 127,619
<TOTAL-ASSETS> 1,014,255
<CURRENT-LIABILITIES> 272,929
<BONDS> 20,800
0
0
<COMMON> 86,773
<OTHER-SE> 586,528
<TOTAL-LIABILITY-AND-EQUITY> 1,014,255
<SALES> 542,339
<TOTAL-REVENUES> 863,622
<CGS> 561,563
<TOTAL-COSTS> 571,427
<OTHER-EXPENSES> 236,577
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 66,551
<INCOME-TAX> 24,753
<INCOME-CONTINUING> 41,798
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,798
<EPS-PRIMARY> 0.61
<EPS-DILUTED> 0.60
</TABLE>
