-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q2ZDEWeD5dS+ARyukhG5EdA3xgxDRWdeFRRNgah0deeEJjG5slC8zKiPEX4yQU8p V5LUDuuftj5ahWCIt9ObzQ== 0000950152-98-008445.txt : 19981102 0000950152-98-008445.hdr.sgml : 19981102 ACCESSION NUMBER: 0000950152-98-008445 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981030 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIEBOLD INC CENTRAL INDEX KEY: 0000028823 STANDARD INDUSTRIAL CLASSIFICATION: CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS) [3578] IRS NUMBER: 340183970 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04879 FILM NUMBER: 98733836 BUSINESS ADDRESS: STREET 1: P.O. BOX 8230 STREET 2: 5995 MAYFAIR RD CITY: CANTON STATE: OH ZIP: 44711-8230 BUSINESS PHONE: 2164894000 MAIL ADDRESS: STREET 1: PO BOX 8230 CITY: CANTON STATE: OH ZIP: 44711-8230 10-Q 1 DIEBOLD, INCORPORATED FORM 10-Q 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 ------------------------------ ---------- -1- 2 DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q INDEX
Page No. -------- 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
-2- 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)
(Unaudited) September 30, December 31, 1998 1997 ------------- ------------ 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 ========== ========
See accompanying notes to condensed consolidated financial statements. -3- 4 DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q CONDENSED CONSOLIDATED STATEMENTS OF INCOME ------------------------------------------- (Unaudited) (In thousands except per share amounts)
Three Months Ended Nine Months Ended September 30 September 30 ------------------------ ---------------------- Net sales 1998 1997 1998 1997 ---------- ---------- ---------- ---------- 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 ========= ========= ======== =========
See accompanying notes to condensed consolidated financial statements. -4- 5 DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- (Unaudited) (Dollars in thousands)
Nine months Ended September 30 1998 1997 -------- -------- 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 ======= =======
See accompanying notes to condensed consolidated financial statements. -5- 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.
Three Months Ended Nine Months Ended September 30, September 30, ---------------------- ---------------------- 1998 1997 1998 1997 -------- -------- -------- -------- 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
3. Inventory detail at: September 30, 1998 December 31, 1997 ------------------ ----------------- 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 ======== ========
-6- 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:
Facility Closing and Write Down Staffing of Assets Reductions Other Total ---------------- ---------- -------- -------- 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 ========================================================
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. -7- 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- 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- 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. -10- 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- 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- 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- 14 DIEBOLD, INCORPORATED FORM 10-Q INDEX TO EXHIBITS
EXHIBIT NO. PAGE NO. - ----------- -------- 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. --
-14- 15
EXHIBIT NO. PAGE NO. - ----------- -------- 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
-15- EX-10.8.II 2 EXHIBIT 10.8II 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- EX-10.10.III 3 EXHIBIT 10.10III 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- 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 EX-27 4 EXHIBIT 27
5 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. 1,000 U.S. DOLLARS 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 1 35,321 38,727 276,438 0 136,971 566,180 281,045 127,619 1,014,255 272,929 20,800 0 0 86,773 586,528 1,014,255 542,339 863,622 561,563 571,427 236,577 0 0 66,551 24,753 41,798 0 0 0 41,798 0.61 0.60
-----END PRIVACY-ENHANCED MESSAGE-----