UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14A-101)
SCHEDULE 14A INFORMATION
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Diebold Nixdorf, Incorporated
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5995 Mayfair Road
P. O. Box 3077• North Canton, Ohio 44720-8077
March 10, 2016
Dear Shareholder:
The 20162018 Annual Meeting of Shareholders of Diebold Nixdorf, Incorporated will be held at the Courtyard Marriott, 4375 Metro Circle NW, North Canton, Ohio 44720, on Thursday,Wednesday, April 21, 201625, 2018 at 11:30 a.m. EDT.
As described in the accompanying Notice and Proxy Statement, at the Annual Meeting, you will be asked to (1) elect teneleven directors, (2) ratify the appointment of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2016, and2018, (3) approve, on an advisory basis, our named executive officer compensation.
We are pleased to continue to take advantage of the Securities and Exchange Commission rules allowing us to furnish proxy materials to shareholders on the Internet. We believe that these rules provide you with proxy materials more quickly and reduce the environmental impact of our Annual Meeting. Accordingly, we are mailing to shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access and review our 20162018 Proxy Statement and Annual Report for the year ended December 31, 2015,2017, and to vote online or by telephone. If you would like to receive a paper copy of our proxy materials, please follow the instructions for requesting these materials on the Notice of Internet Availability of Proxy Materials.
All holders of record of Diebold Nixdorf, Incorporated common shares at the close of business on February 26, 20162018 are entitled to vote at the 20162018 Annual Meeting. You may vote online at www.proxyvote.com. If you received a paper copy of the proxy card by mail, you may also vote by signing, dating and mailing the proxy card promptly in the return envelope or by calling a toll-free number.
If you are planning to attend the meeting, directions to the meeting location are included on the back page. If you are unable to attend the meeting, you may listen to a replay that will be available on our web sitewebsite at http://www.diebold.com.www.dieboldnixdorf.com. The replay may be accessed on our web sitewebsite soon after the meeting and shall remain available for up to three months.
We look forward to seeing those of you who will be attending the meeting.
Sincerely,
 | |||||
 |  | ||||
GARY G. | |||||
| GREENFIELD Chairman of the Board
|  | GERRARD B. SCHMID President and Chief Executive Officer
|
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Shareholders to be held on April 21, 2016.
This proxy statement,Proxy Statement, along with our Annual Report for the year ended December 31, 2015,2017, including exhibits,
are available free of charge at
www.proxyvote.com (you will need to reference the16-digit control numberfound on your proxy card or Notice of Internet Availability of Proxy Materials in order to vote).
5995 Mayfair Road
P. O. Box 3077• North Canton, Ohio 44720-8077
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERSApril 21, 201611:30 a.m. EDT
DATE: April 25, 2018 TIME: 11:30 a.m. EDT LOCATION: Courtyard Marriott 4375 Metro Circle NW North Canton, Ohio 44720 | ITEMS TO BE DISCUSSED: | |||||
1. | To elect | |||||
| 2. | To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the year ending December 31, |
| 2018; | |||||
3. | To approve, on an advisory basis, our named executive officer | ||||
| 4. | To approve amendments to the Diebold Nixdorf, Incorporated 2017 Equity and Performance Incentive Plan. |
Your attention is directed to the attached proxy statement,Proxy Statement, which fully describes these items.
Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed.
Holders of record of Diebold Nixdorf, Incorporated common shares at the close of business on February 26, 20162018 will be entitled to vote at the 2018 Annual Meeting.
The enclosed proxy card is solicited, and the persons named therein have been designated, by Diebold’sDiebold Nixdorf’s Board of Directors.
By Order of the Board of Directors | ||
 |  | |
Jonathan B. Leiken | ||
Senior Vice President, Chief Legal Officer and Secretary |
March 10, 2016
14, 2018
(approximate mailing date)
You are requested to cooperate in assuring a quorum by voting online at
www.proxyvote.comor, if you received a paper copy of the proxy materials, by filling in, signing and dating the
enclosed proxy and promptly mailing it in the return envelope.
5995 Mayfair Road P.O. Box 3077•North Canton, Ohio 44720-8077 2018 ANNUAL MEETING OF SHAREHOLDERS 7 7 7 7 8 9 11 11 11 12 12 12 12 14 15 16 16 16 16 17 25 26 27 28 Policy on Audit CommitteePre-Approval of Audit and PermissibleNon-Audit Services of Our Independent Registered Public Accounting Firm 28 29 30 31 32 33 34 38 38 39 Existing Plan Benefits to Named Executive Officers and Others 39 41 41 41 TABLE OF CONTENTS This These proxy materials are being sent to our shareholders on or about March This proxy summary is intended to provide an overview of the information you can find elsewhere in this MEETING INFORMATION TIME AND DATE 11:30 a.m. EDT, April 25, 2018 PLACE Courtyard Marriott 4375 Metro Circle NW North Canton, Ohio 44720 RECORD DATE Close of Business on February 26, 2018 PROPOSALS FOR YOUR VOTE AND BOARD RECOMMENDATIONS PROPOSAL BOARD RECOMMENDATION PAGE REFERENCES (FOR MORE DETAIL) 1. To FOR EACH NOMINEE 2. To publicaccounting firm FOR 3. To approve, on FOR 4. To approve amendments to the andPerformance Incentive Plan FOR Information on voting mechanics, approval requirements and related matters can be found in the “Voting Information” and “Other Matters” sections starting on pages 5 and 87, respectively. PROXY SUMMARY BUSINESS PERFORMANCE AND STRATEGIC INITIATIVES This was a foundational year for Diebold Nixdorf as we laid the groundwork for our transformation and made progress towards becoming the global leader in Connected Commerce. We also encountered certain challenges in 2017 which impacted our financial results, including market headwinds, the softening of demand for banking systems, and a slower pace of deployment for large and complex customer projects. As a result of these challenges, we did not achieve certain financial performance metrics of our long-term equity incentives and annual cash bonus plan for 2017. The Company had notable achievements in 2017 as well. We serve in a highly dynamic market supported by fast-paced payment technologies and changing consumer behavior and expectations. To position ourselves to best meet these demands, we accelerated our post-acquisition integration and synergy efforts, streamlined our global manufacturing operations and simplified our solutions portfolios. In 2017, we also enhanced our global leadership position particularly in ATM software, now powering the ATM networks of many of the largest financial institutions in the world. Specifically, we introduced Vynamic® which is the first of its kind,end-to-end connected commerce software portfolio which secures transactions at every stage between the consumer and the retail or banking institution. Our Connected Commerce strategy seeks to continually enhance the consumer experience at banking and retail locations through the smart integration of hardware, software and services. In addition, since mobile solutions are growing in importance for retail and banking customers, we have formed a strategic alliance with Kony to leverage their industry-leading mobile development application platform (MDAP) and acquired Moxx to offer managed mobility services. CORPORATE GOVERNANCE UPDATES AND SHAREHOLDER OUTREACH Henry D.G. Wallace and Robert S. Prather are retiring from our Board at the Annual Meeting, having both reached the retirement age set in our Board governance policy. We thank Messrs. Wallace and Prather sincerely for their years of service to the Company. Mr. Wallace also stepped down as Chairman of the Board on December 31, 2017, allowing for the orderly transition to his successor as Chair, Gary G. Greenfield. Mr. Greenfield has extensive experience in high technology industries, and that experience, coupled with his experience in evolving markets will be instrumental in leading the Board. Mr. Greenfield and a search committee chaired by Director Alan Weber led the search for our newly appointed President and Chief Executive Officer, Gerrard Schmid, who also joined our Board in February. Following the Annual Meeting and subject to the election by our shareholders, the Board will have eleven members. The Governance Committee and Board have determined that this is the appropriate size of our Board as we continue our director succession planning efforts, focusing on bringing the skills necessary to support our strategic initiatives and considering the overall diversity of our Board. Finally, in 2017 we continued our extensive shareholder outreach and engagement. While our advisory vote on the executive compensation program received high support at the 2017 Annual Meeting, we remain focused on engagement with our stakeholders to align our compensation programs with the integration and transformation goals of the Company. We continue to design our compensation practices and enhance our disclosures based on our shareholder input and feedback. We will continue to engage with shareholders and pursue executive compensation strategies that align our strategic goals and incentivize our executives. PROXY SUMMARY OVERVIEW OF OUR BOARD NOMINEES You are being asked to vote to elect each of the following nominees to our Board of Directors. The tables that follow provide summary information about our nominees, and detailed information about each director nominee’s background, skills and expertise can be found in Proposal 1: Election of Directors on pages18-24. Information about our Audit Committee, Board Governance Committee, Compensation Committee, Finance Committee, and Technology Strategy and Innovation Committee can be found on pages9-10. COMMITTEE MEMBERSHIP NAME AND OCCUPATION / CAREER HIGHLIGHTS AGE DIRECTOR SINCE INDEPENDENT AUDIT BOARD GOV. COMP. FIN. TS&I Patrick W. Allender Retired Executive Vice President, Chief Financial Officer and Secretary, Danaher Corporation Phillip R. Cox President and Chief Executive Officer, Cox Financial Corporation Richard L. Crandall Managing Partner, Aspen Venture LLC; Executive Chairman, Pelstar LLC Dr. Alexander Dibelius Managing Partner, CVC Capital Partners (Deutschland) GmbH Dr. Dieter W. Düsedau Physicist and Former Director (Senior Partner), McKinsey & Co. Gale S. Fitzgerald Retired President and Director, TranSpend, Inc. Gary G. Greenfield Non-executive Chairman of the Board, Diebold Nixdorf, Incorporated; Partner, Court Square Capital Partners Gerrard B. Schmid President and Chief Executive Officer, Diebold Nixdorf, Incorporated Rajesh K. Soin Chairman of the Board and Chief Executive Officer, Soin, LLC Alan J. Weber Chief Executive Officer, Weber Group LLC Dr. Juergen Wunram Senior Vice President and Chief Operating Officer, Diebold Nixdorf, Incorporated PROXY SUMMARY SNAPSHOT OF KEY QUALIFICATIONS AND SKILLS OF OUR NOMINEES Director Tenure 0 to 5 Years 6 to 15 Years Over 15 Years See pages15-16 for more information on our considerations of a director nominee and additional detail regarding the key qualifications and skills of our 2018 nominees. Information about our directors’ compensation and share ownership is provided on pages13-14,26-27. SNAPSHOT OF KEY QUALIFICATIONS AND SKILLS OF OUR NOMINEES International Technology/Innovation Financial Services Leadership Corporate Governance Audit/Finance Gov’t Regulated Industries 1 2 3 4 5 6 7 8 9 10 11 VOTING INFORMATION Proposal 2, the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2018, is the only routine matter for which the brokerage firm who holds your shares can vote your shares on these proposals without your instructions. Accordingly, there should be no brokernon-votes with respect to Proposal 2. Brokernon-votes will have no effect on the outcome of Proposals 1, 3 and 4. Our Board is committed to strong corporate governance principles and practices to ensure that the Board most effectively and efficiently serves in its oversight obligations. This section provides an overview of the organization of the Board, its Committees, responsibilities and other related topics and initiatives. Henry D.G. Wallace and Robert S. Prather are retiring from our Board at the Annual Meeting, having both reached the retirement age set in our Board governance policy. Mr. Wallace also stepped down as Chairman of the Board on December 31, 2017, allowing for the orderly transition to his successor as Chair, Gary G. Greenfield. We thank Messrs. Wallace and Prather for their service to the Company. Although Mr. Crandall also reached retirement age, the Board Governance Committee and the Board determined that a waiver of the policy was warranted in order to maintain Mr. Crandall’s unique expertise in the cybersecurity field on the Board. Following the Annual Meeting and subject to the election by our shareholders, the Board will have eleven members. The Board Governance Committee and Board have determined that this is the appropriate size of our Board as we continue our director succession planning efforts, focusing on bringing the skills necessary to support our strategic initiatives and considering the overall diversity of our Board. Our Board is committed to strong leadership and currently maintains separate roles of our Chief Executive Officer, or CEO, and our Chairman of the Board. We believe this structure is effective for our current circumstances and a good governance practice. The Board does not have a specific policy with respect to separating or combining these roles, or whether the Chairman should be an employee ornon-employee director, and will continue to periodically review our leadership structure in light of corporate governance standards, market practices and our specific circumstances and needs. BOARD AND DIRECTOR ASSESSMENTS The Board Governance Committee oversees the Board and director assessment program, as noted below in assessments. The full board self-assessment includes comprehensive questions designed to provide BOARD MEETINGS AND EXECUTIVE SESSIONS The Board held five regular meetings and In accordance with the NYSE’s corporate governance standards, our independent directors regularly meet in executive session without management present, generally following each regularly-scheduled Board meeting. In addition, on occasion, our independent directors will meet in executive session prior to the start of a Board meeting. Gary Greenfield, the Chairman of our Board, presides over these meetings in executive session. In 2017, Henry D.G. Wallace presided over these executive sessions in his capacity as Chairman of the Board. The executive sessions of each Board Committee are overseen by the respective committee chair. CORPORATE GOVERNANCE While scheduled obligation taking place at the same time, all directors standing forre-election who were serving as directors as of the 2017 annual meeting of shareholders attended the The Board and the Board committees collectively play an active role in overseeing management of our risks and in helping establish an appropriate risk tolerance. The Board oversees our risk strategy and effectiveness; however, management is responsible for identifying risks inherent in our business, as well as implementing and supervisingday-to-day risk management. Accordingly, the Board and the appropriate committees receive regular reports from our senior management on areas of material risk to us, including operational, financial, strategic, compliance, cybersecurity, competitive, reputational, legal and regulatory risks. The Board also meets with senior management as part of each Board meeting, and more frequently as needed, to discuss strategic planning, including the key risks inherent in our short- and long-term strategies. Senior management then provides the Board with periodic updates throughout the year with respect to these strategic initiatives and the impact and management of these key risks. In addition, each Board committee is responsible for evaluating certain risks within its area of responsibility and overseeing the management of such risks. The entire Board is then informed about such risks and management’s response to each risk through regular committee reports delivered by the Committee Chairs. Our Compensation Committee performs an annual compensation risk assessment, and we believe that our compensation practices are not reasonably likely to have a material adverse effect on the Company. We also have robust internal dialog among our operations, finance, compliance, treasury, tax, legal and internal audit departments, among others, whenever a potential risk arises. These discussions are escalated to our We believe that the Board’s approach and continued evaluation of its risk oversight, as described above, optimize its ability to assess the various risks, make informed cost-benefit decisions, and approach emerging risks in a proactive manner for CORPORATE GOVERNANCE The Board’s current standing committees are the Audit Committee, Board Governance Committee, Compensation Committee, Finance Committee and Technology Strategy and Innovation Committee. Each AUDIT COMMITTEE* Members Patrick W. Allender (Chair), Dr. Dieter W. Düsedau, Gale S. Fitzgerald and Robert S. Prather, Jr. All members of this committee qualify as independent. Meetings This committee met in person or telephonically Contact: auditchair@dieboldnixdorf.com Primary Duties and Responsibilities: • • Monitors the independence and performance of our outside auditors and performance and controls of our internal audit department. • Provides an avenue of communication among the outside auditors, management, the internal audit department and the Board. Financial Experts The Board has determined that BOARD GOVERNANCE COMMITTEE Members Gale S. Fitzgerald (Chair), Phillip R. Cox, Richard L. Crandall and All members of this committee qualify as independent. Meetings This committee met in person or telephonically five times during Contact bdgovchair@dieboldnixdorf.com Primary Duties and Responsibilities: • • Reviews qualifications of potential director candidates. • Makes recommendations to the Board to fill vacancies or consider the appropriate size of the Board. • Makes recommendations regarding corporate governance principles, Board committee composition, and the directors’ compensation for their services on the Board and on Board committees. • Leads and oversees all of the Board and Committee assessments. • Oversees director orientation and education, as described in CORPORATE GOVERNANCE COMPENSATION COMMITTEE Members: Phillip R. Cox (Chair), Dr. Dieter W. Düsedau, Rajesh K. Soin and All members of this committee qualify as independent. Meetings This committee met in person or telephonically five times during Contact: compchair@dieboldnixdorf.com Primary Duties and Responsibilities: • • Oversees our equity plans (including reviewing and approving equity grants to executive officers). • Annually reviews and approves all pay decisions relating to executive officers. • Determines and measures achievement of corporate and individual goals, as applicable, by our executive officers under our short- (annual) and long-term incentive plans, and makes recommendations to the Board for ratification of such achievements. • Reviews the management succession plan and proposed changes to any of our benefit plans, such as retirement plans, deferred compensation plans and 401(k) plans. • For additional discussion of the committee’s role, processes and procedures in connection with executive compensation, see Members Alan J. Weber (Chair), Patrick W. Allender, Dr. Alexander Dibelius, Gary G. Greenfield and Robert S. Prather, Jr. All members of this committee qualify as independent. Meetings This committee met in person or telephonically Primary Duties and Responsibilities: • • Oversees the Company’s borrowing structures and credit facilities. • Establishes investment policies, including asset allocation, for our cash, short-term securities and retirement plan assets and oversees the management of those assets. • Reviews our financial exposure and liabilities, including the use of derivatives and other risk management techniques. • Makes recommendations to the Board related to customer financing activities and funding plans for our TECHNOLOGY STRATEGY AND INNOVATION COMMITTEE Members Richard L. Crandall (Chair), Gary G. Greenfield and Rajesh K. Soin All members of this committee qualify as independent. Meetings This committee met in person Primary Duties and • • Evaluates our global technology and innovation strategies and initiatives, including their impact on our performance and competitive position. • Evaluates management proposals for strategic software and technology investments, divestitures, and acquisitions. • Provides clarification and validation to the Board on the direction of our CORPORATE GOVERNANCE CORPORATE GOVERNANCE MATERIALS AVAILABLE ON OUR WEBSITE Copies of the following documents, among others, are available on our website Information on our website is not, and will not be deemed to be, a part of or incorporated into this The Board determined that each of Patrick W. Allender, Phillip R. Cox, Richard L. Crandall, Dr. Alexander Dibelius, Dr. Dieter W. Düsedau, Gale S. Fitzgerald, Gary G. Greenfield, Robert S. Prather, Jr., Rajesh K. Soin, Henry D. G. Wallace and Alan J. Weber has no material relationship with In making the independence determinations, the Board considered the following: Shareholders for a fee of $54,870. The Board determined that the provision of services by Donnelley Financial Solutions, Inc. and Messrs. Crandall and Greenfield’s service on the Donnelley Financial Solutions, Inc. board did not create a material relationship or impair the independence of Messrs. Crandall and Greenfield. RELATED PERSON TRANSACTION POLICY Pursuant to our director independence standards, discussed above, and our Corporate Governance Guidelines, discussed below in This prohibition also includes significant business dealings with directors or their affiliates, charitable contributions that would require disclosure in our proxy statement under the rules of the NYSE, and consulting contracts with, or other indirect forms of compensation to, a director. Any waiver of this policy may be made only by the Board and must be promptly disclosed to our shareholders. In CORPORATE GOVERNANCE The Company’s Board of Directors Communications may also be directed in writing to such person or group at Diebold Nixdorf, Incorporated, Attention: Corporate Secretary, 5995 Mayfair Road, P.O. Box 3077, North Canton, Ohio 44720-8077. The independent members of the Board have approved a process for handling communications we receive that are addressed tonon-employee members of the Board. Under that process, the Corporate Secretary will review all such communications and determine whether communications require immediate attention. The Corporate Secretary will forward communications, or a summary of communications, to the appropriate director or directors. All of our directors, executive officers and employees are required to comply with certain policies and protocols concerning business ethics and conduct as provided in our Code of Business The Code of Business Ethics applies laws, including the Foreign Corrupt Practices Act and relevant global anti-corruption laws, conflicts of interest, intellectual property and the protection of competitive and confidential information, as well as maintaining a respectful andnon-retaliatory workplace. The Code of Business Ethics also includes and links to our Conflicts of Interest Policy, which further details the requirements for our officers, directors and employees to avoid and disclose potential conflicts, including those that may result from related party transactions. In addition, our employees are required to report any conduct that they believe in good faith to be a violation of the COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The members of the Compensation Committee during the year ended December 31, transactions. No officer or employee of DIRECTOR ORIENTATION AND EDUCATION All new directors participate in a director orientation program. The Board Governance Committee oversees this introduction and orientation process solutions. In addition, the orientation process educates the new director on his or her obligations as a director, the history of the Company, our strategic The following director compensation is determined by the Board at the recommendation of the Board Governance Committee. With respect tonon-employee directors, it is our goal to provide directors with fair and competitive compensation, while ensuring that their compensation is closely aligned with shareholder interests. The annual retainer received by In addition to their annual retainers, ournon-employee directors also received the following annual committee fees for their participation as members or as Chairs of one or more Board committees: MEMBER CHAIR Audit Committee $12,500 $25,000 Compensation Committee $10,000 $20,000 Board Governance Committee $ 7,500 $15,000 Finance Committee $ 7,500 $15,000 Technology Strategy and Innovation Committee $ 7,500 $15,000 The varying fee amounts are intended to reflect differing levels of responsibility, meeting requirements and fiduciary duties. The fees for a director who joins or leaves the Board or assumes additional responsibilities during the year arepro-rated for his or her period of actual service. A director may elect to defer receipt of all or a portion of his or her compensation pursuant to the Deferred Compensation Plan No. 2 for Directors. In addition to cash compensation, eachnon-employee director may receive equity awards under our group of companies in similar industries and of comparable size and revenue. This peer group is the same one used by our Compensation Committee for benchmarking executive compensation, which is discussed in more detail below in In COMPENSATION OF DIRECTORS The following table details the compensation of ournon-employee directors for FEES EARNED OR PAID IN CASH1 ($) STOCK AWARDS2 ($) ALL OTHER COMPENSATION3 ($) TOTAL ($) Patrick W. Allender 104,167 148,723 8,824 261,714 Phillip R. Cox 99,167 148,723 10,220 258,110 Richard L. Crandall 94,167 148,723 10,812 253,702 Dr. Alexander Dibelius 86,667 148,723 1,549 236,939 Dr. Dieter W. Düsedau 94,167 148,723 1,549 244,439 Gale S. Fitzgerald 148,723 260,714 Gary G. Greenfield 86,667 148,723 2,450 237,840 Robert S. Prather, Jr. 91,667 148,723 6,444 246,834 Rajesh K. Soin 89,167 148,723 4,980 242,870 Henry D. G. Wallace 171,667 148,723 13,664 334,054 Alan J. Weber 96,667 148,723 10,060 255,450 AUDIT COMMITTEE ($) BOARD GOVERNANCE COMMITTEE ($) COMPENSATION COMMITTEE ($) FINANCE COMMITTEE ($) TECHNOLOGY STRATEGY & INNOVATION COMMITTEE ($) Patrick W. Allender 25,000 — — 7,500 — Phillip R. Cox — 7,500 20,000 — — Richard L. Crandall — 7,500 — — 15,000 Dr. Alexander Dibelius — 7,500 — 7,500 — Dr. Dieter W. Düsedau 12,500 — 10,000 — — Gale S. Fitzgerald 12,500 15,000 — — — Gary G. Greenfield — — — 7,500 7,500 Robert S. Prather, Jr. 12,500 — — 7,500 — Rajesh K. Soin — — 10,000 — 7,500 Henry D. G. Wallace — — — — — Alan J. Weber — — 10,000 — COMPENSATION OF DIRECTORS The Board shares held by the directors for purposes of these guidelines, which are intended to build stock ownership amongnon-employee directors and ensure that their long-term economic interests are aligned with those of other shareholders. The majority of our directors have exceeded the ownership guidelines, while our directors who were appointed most recently are on track to achieve the ownership guidelines within the next few years. The policy of the Board Governance Committee is to consider properly submitted shareholder nominations for candidates for membership on the Board as described below under The Board Governance Committee will consider any shareholder nominations for director that are properly proposed and meet the requirements set out in our Code of Regulations, which include but are not limited to: education and experience, particular fields of expertise, and a representation that the shareholder is a holder of record; Shareholder nominations should be addressed to Diebold Nixdorf, Incorporated, Attention: Corporate Secretary, 5995 Mayfair Road, P.O. Box 3077, North Canton, Ohio The Board Governance Committee considers many methods for identifying and evaluating director-nominees. The Board Governance Committee plans for any anticipated retirements or vacancies and also regularly reviews the appropriate size of the firm, Korn Ferry, to assist the Board Governance Committee on an ongoing basis in identifying, evaluating and conducting due diligence on potential director nominees. As described above, the Board Governance Committee considers properly submitted shareholder nominations for candidates for the Board. Following verification of the recommending shareholder’s status, recommendations are considered by the Board Governance Committee at a regularly scheduled meeting. In include in our annual meeting proxy materials director nominees constituting up to 20% of the number of directors in office or two nominees, whichever is greater, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in our Code of Regulations. In light of our shareholders’ approval of the amendment to the Company’s Amended Articles of Incorporation to implement a majority voting standard in uncontested director elections, the Board adopted an amended majority voting policy, which provides that, in an uncontested election, any nominee for director who receives a greater number of votes DIEBOLD NIXDORF, INCORPORATED2016PROXY SUMMARY 1 PROXY SUMMARYVOTING INFORMATION 5 VOTING INFORMATIONCORPORATE GOVERNANCE 7 CORPORATE GOVERNANCECOMPENSATION OF DIRECTORS 13 C2017 Director CompensationOMPENSATION OF DIRECTORSCONSIDERATION OF DIRECTOR-NOMINEES 16 CONSIDERATION OF DIRECTOR-NOMINEESPROPOSAL 1: ELECTION OF DIRECTORS 18 BENEFICIAL OWNERSHIP 25 PROPOSAL 1: ELECTION OF DIRECTORSBENEFICIAL OWNERSHIPBeneficial Ownership of Shares EXECUTIVE COMPENSATION MATTERSExecutive Compensation TablesOutstanding Equity Awards at 2015 Fiscal Year-EndPayments Made Upon a Termination Following a Change-in-ControlREPORT OF AUDIT COMMITTEEPROPOSAL 2: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 28 PROPOSAL 3: APPROVAL, ON AN ADVISORY BASIS, OF OUR NAMED EXECUTIVE OFFICER COMPENSATION 30 SHAREHOLDERS SHARING THE SAME ADDRESSPROPOSAL 4: APPROVAL OF AMENDMENTS TO THE DIEBOLD NIXDORF, INCORPORATED 2017 EQUITY AND PERFORMANCE INCENTIVE PLAN 31 EXPENSES OF SOLICITATION SHAREHOLDER PROPOSALS OTHER MATTERS
2018 PROXY STATEMENT | i iSHAREHOLDERS SHARING THE SAME ADDRESS 86 EXPENSES OF SOLICITATION 86 SHAREHOLDER PROPOSALS 86 OTHER MATTERS 87 ii | 2018 PROXY STATEMENT PROXY SUMMARYproxy statementProxy Statement is furnished to shareholders of Diebold Nixdorf, Incorporated (the "Company"(“Diebold Nixdorf,” the “Company,” “we,” “our,” and “us”) in connection with the solicitation by the Board of Directors of proxies to be used at our 20162018 Annual Meeting of Shareholders, and any postponements or adjournments of the meeting.10, 2016.14, 2018.proxy statement.Proxy Statement. As this is only a summary, we encourage you to read the proxy statementProxy Statement in its entirety for more information about these topics before voting.Meeting Information Time and Date11:30 a.m. EDT, April 21, 2016 Place Record DateClose of Business on February 26, 2016Proposals for Your Vote and Board RecommendationsProposalBoard RecommendationPage References(for more detail)Elect Ten Directorselect eleven directors 16-2018-24 Ratifyratify the Appointmentappointment of Our Independent Registered Public Accounting Firm (KPMG LLP)KPMG LLP as our independent registered FOR6628 3. Advisory Vote to Approve Named Executive Officer Compensation FOR23-44, 67Informationvoting mechanics, approval requirements and related matters can be found inan advisory basis, our named executive officer compensation30, 42-84 "Voting Information" and "Other Matters" sections starting on pages 4 and 69.Diebold Nixdorf, Incorporated 2017 Equity31-41 2018 PROXY STATEMENT | 1 Business Performance and Strategic InitiativesWe continue to execute our multi-year transformation, Diebold 2.0, with the primary object of transforming into a world-class, services-led and software-enabled company, supported by innovative hardware. During the second half of 2015, we moved from the "Crawl" phase of our transformation into the "Walk" phase where we will focus on increasing the mix of revenue from services and software and shaping our portfolio. We made several strategic decisions to reshape our portfolio, including the divestiture of our North America electronic security business and the successful acquisition and integration of Phoenix Interactive Design. As part of our targeted savings objective, we achieved $150 million of gross cost savings through 2015 and reinvested approximately 50% of that to drive long-term growth and operational efficiency.In the governance and compensation area, we eliminated all excise tax gross-ups in our historical change-in-control agreements, renegotiated the employment contract with our Chief Executive Officer and continued to examine and adjust our compensation structure and incentives to appropriately align our shareholders’ interests with those of our directors and officers.
2 | 2018 PROXY STATEMENT Overview of Our Board Nominees You are being asked to vote to elect each of the following nominees to our Board of Directors. The tables that follow provide summary information about our nominees, and detailed information about each director’s background, skills and expertise can be found in Proposal 1: Election of Directors on pages 16-20. Committee Membership Name and Occupation / Career Highlights Age Director Since Independent Audit Board Gov. Comp. Fin. TS&I Patrick W. Allender
Retired Executive Vice President, Chief Financial Officer and Secretary, Danaher Corporation69 2011 Yes Chair • Phillip R. Cox
President and Chief Executive Officer, Cox Financial Corporation68 2005 Yes • Chair Richard L. Crandall
Managing Partner, Aspen Venture LLC72 1996 Yes • Chair Gale S. Fitzgerald
Retired President and Director, TranSpend, Inc.65 1999 Yes •Chair Gary G. Greenfield
Partner, Court Square Capital Partners61 2014 Yes ••Andreas W. Mattes
President and Chief Executive Officer, Diebold, Incorporated54 2013 No Robert S. Prather, Jr.
President and CEO of Heartland Media, LLC71 2013 Yes • • Rajesh K. Soin
Chairman of the Board and Chief Executive Officer, Soin, LLC68 2012 Yes • •Henry D. G. Wallace
Non-executive Chairman of the Board, Diebold, Incorporated70 2003 Yes •• Alan J. Weber
Chief Executive Officer, Weber Group LLC67 2005 Yes • Chair Information about our Audit Committee, Board Governance Committee, Compensation Committee, Finance Committee, and Technology Strategy and Innovation Committee can be found on pages 7-9. -2-
See pages 14-16 for more information on our consideration of director nominees and additional detail regarding the key qualifications and skills of our 2016 nominees. Information about our directors’ compensation and share ownership is provided on pages 12-14 and 22.-3-VOTING INFORMATION 71 2011 Yes Chair · 70 2005 Yes · Chair 74 1996 Yes · Chair 58 2016 Yes · · 59 2016 Yes · · 67 1999 Yes · Chair 63 2014 Yes · · 49 2018 No 70 2012 Yes · · 69 2005 Yes · Chair 59 2017 No 2018 PROXY STATEMENT | 3 
International 7 Technology/Innovation 6 Financial Services 8 Retail 4 Leadership 11 Corporate Governance 8 Audit/Finance 7 Gov’t Regulated Industries 4 4 | 2018 PROXY STATEMENT Q: What items will be voted on at the Annual Meeting and how does the Board recommend I vote? A: You are being asked to vote on the proposals outlined above in the proxy summary on page 1 of "Proxy Summary," and the1. The Board recommends a vote FOR each nominee, and FOR each of Proposals 2, 3 and 3.4.Q. What happens if other matters are properly presented at the Annual Meeting? A. If a permissible proposal other than the listed proposals is presented at the Annual Meeting, your proxy gives authority to the individuals named in the proxy to vote on any such proposal in accordance with their best judgment. We have not received notice of other matters that may be properly presented at the Annual Meeting. Q: Who is entitled to vote at the Annual Meeting? A: Our record date for the 20162018 Annual Meeting is February 26, 2016.2018. Each shareholder of record of our common shares as of the close of business on February 26, 20162018 is entitled to one vote for each common share held. As of the record date, there were 65,137,13275,943,793 common shares outstanding and entitled to vote at the Annual Meeting.Q: How do I vote? A: If you were a shareholder on the record date and you held shares in your own name, you have three ways to vote and submit your proxy before the 20162018 Annual Meeting:•By mail – You may vote by completing, signing and returning the proxy card that you will receive in the mail;• By Internet – We encourage you to vote and submit your proxy online at www.proxyvote.com. Even if you request and receive a paper copy of the proxy materials, you may vote online by going to www.proxyvote.com and entering your control number, which is a 16-digit number located in a box on your proxy card that you can also receive in the mail, if requested; or• By telephone – You may vote and submit your proxy by calling 1-800-690-6903 and providing your control number, which is a 16-digit number located in a box on your proxy card that you can also receive in the mail, if requested.By mail—You may vote by completing, signing and returning the proxy card that you will receive in the mail;By Internet—We encourage you to vote and submit your proxy online atwww.proxyvote.com. Even if you request and receive a paper copy of the proxy materials, you may vote online by going towww.proxyvote.com and entering your control number, which is a 16 digit number located in a box on your proxy card that you can also receive in the mail, if requested; orBy telephone—You may vote and submit your proxy by calling1-800-690-6903 and providing your control number, which is a16-digit number located in a box on your proxy card that you can also receive in the mail, if requested. If you complete and submit a proxy card, the persons named as proxies on your proxy card, which we refer to as the Proxy Committee, will vote the shares represented by your proxy in accordance with your instructions. If you submit your proxy card but do not indicate your voting preferences, the Proxy Committee will vote according to the recommendation of the Board. Q: Can I change my vote after I have voted? A: You may change your vote at any time before your proxy is voted at the 20162018 Annual Meeting by:• Revoking your proxy by sending written notice or submitting a later dated, signed proxy before the 2016 Annual Meeting to our Corporate Secretary at the Company’s address above;• Submitting a later dated, signed proxy before the start of the 2016 Annual Meeting;• If you have voted by the Internet or by telephone, you may vote again over the Internet or by telephone up until 11:59 p.m. EDT on April 20, 2016; or• Attending the 2016 Annual Meeting, withdrawing your earlier proxy and voting in person.Revoking your proxy by sending written notice or submitting a later dated, signed proxy before the 2018 Annual Meeting to our Corporate Secretary at the Company’s address above;Submitting a later dated, signed proxy before the start of the 2018 Annual Meeting;If you have voted by the Internet or by telephone, you may vote again over the Internet or by telephone up until 11:59 p.m. EDT on April 24, 2018; orAttending the 2018 Annual Meeting, withdrawing your earlier proxy and voting in person.Q: What is cumulative voting and how canCan I cumulate my votes for the election of directors?A: InNo. At the 2017 Annual Meeting, our Shareholders approved an amendment to our Amended Articles of Incorporation to eliminate cumulative voting each shareholder may cast a number of votes equal to the number of shares owned multiplied by the number of directors to be elected, and that number of the votes may be cast all for one director-nominee only or distributed among the director-nominees.In order to cumulate votes for the election of ain director a shareholder must give written notice to our non-executive Chairman, any Vice President or our Corporate Secretary no later than 11:29 a.m. EDT on April 19, 2016 that the shareholder desires that the voting for the election of directors be cumulative, and if an announcement of such notice is made upon convening the Annual Meeting by the Chairman or Corporate Secretary of the meeting, or by or on behalf of the shareholder giving the notice, each shareholder will have cumulative voting.elections.-4-We have received written notice from a shareholder that he desires that cumulative voting be in effect for the election of directors. Accordingly, unless contrary instructions are received on the enclosed proxy, it is presently intended that all votes represented by properly executed proxies will be divided evenly among the director-nominees. However, if voting in such manner would not be effective to elect all such director-nominees, votes will be cumulated at the discretion of the Proxy Committee so as to maximize the number of such director-nominees elected.Q: How many votes are required to adopt each proposal? A: For Proposal 1, the director-nominees receiving the greatest number of votes will be elected, subject to our Majority Voting Policy described below.cast “for” the director-nominee’s election must exceed the number of votes cast “against” his or her election. For each of Proposals 2, 3, and 3,4, the affirmative vote of the holders of a majority of the votes cast, whether in person or by proxy, is required for approval. The results of the voting at the meeting will be tabulated by the inspectors of election appointed for the Annual Meeting.Q: What is the Majority Voting Policy? A: Our Board of Directors has adopted a policy that any director-nominee who is elected but receives a greater number of votes withheld from“against” his or her election than votes in favor of“for” his or her election, in an election that is not a contested election, is expected to tender his or her resignation following certification of the shareholder vote, as described in greater detail below under "“Majority Voting Policy."” 2018 PROXY STATEMENT | 5 Q: What is a "broker non-vote?"“brokernon-vote”?A: If your shares are held in the name of a brokerage firm, your shares may be voted even if you do not provide the brokerage firm with voting instructions. Brokerage firms have the authority under the New York Stock Exchange, or NYSE, rules to vote shares for which their customers do not provide voting instructions on certain "routine"“routine” matters. When a proposal is not a routine matter under NYSE rules and the brokerage firm has not received voting instructions from the beneficial owner of the shares with respect to that proposal, the brokerage firm cannot vote the shares on that proposal. This is referred to as a "broker “brokernon-vote."”Proposal 2, the ratification of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2016, is the only routine matter for which the brokerage firm who holds your shares can vote your shares on these proposals without your instructions. Accordingly, there should be no broker non-votes with respect to Proposal 2. Broker non-votes will have no effect on the outcome of Proposals 1 or 3.Q: How many shares must be present to constitute a quorum and conduct the Annual Meeting? A: A quorum is necessary to hold the Annual Meeting. A majority of the outstanding shares present or represented by proxy constitutes a quorum for the purpose of adopting a proposal at the Annual Meeting. If you are present and vote in person at the Annual Meeting, or vote on the internet,Internet, by telephone or by submitting a properly executed proxy card, you will be considered part of the quorum. Brokernon-votes will not be part of the voting power present, but will be counted to determine whether or not a quorum is present.Q: What happens if I abstain? A: AFor all proposals except Proposal 4, a share voted "abstain"“abstain” with respect to any proposal is considered aspresent and entitled to vote with respect to the proposal, but is not considered a vote cast with respect to the proposal. Accordingly,For Proposal 4, abstentions are considered votes cast for Proposal 1,purposes of shareholder approval of an amendment to an equity plan. Accordingly, abstentions will have no effect on Proposal 1, the election of directors, except in regards to the Majority Voting Policy described below. For Proposals 2 and 3, abstentions will not be counted for determining the outcome of these proposals.Proposals 2 and 3.Q: Why did I receive aone-page notice in the mail regarding internetInternet availability of proxy materials instead of a full set of proxy materials?A: Under rules adopted by the Securities and Exchange Commission, or SEC, we have elected to provide access to our proxy materials on the internet.Internet. Accordingly, we are sending you a Notice of Internet Availability of Proxy Materials. The instructions found in the noticeNotice explain that all shareholders will have the ability to access the proxy materials onwww.proxyvote.com or request to receive a printed copy of the proxy materials. You may also request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. Diebold encouragesWe encourage you to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of our Annual Meeting.Meeting materials.Q: What shares are included on my proxy card or Notice of Internet Availability of Proxy Materials? A: The number of shares printed on your proxy card(s) represents all your shares under a particular registration. Receipt of more than one proxy card or Notice of Internet Availability of Proxy Materials means that certain of your shares are registered differently and are in more than one account. If you receive more than one proxy card, sign and return all your proxy cards to ensure that all your shares are voted. If you receive more than one Notice, reference the distinct16-digit control number on each Notice when voting by Internet. 6 | 2018 PROXY STATEMENT -5-CORPORATE GOVERNANCEBoard Leadership StructureBoard and Director Assessments""” When taken together, the following assessment program provides a holistic review of the role, performance and function of the full Board, the Chairman and each director in relation to the Company’s needs, challenges and opportunities. The assessment program includes a full board self-assessment, committee assessments, a chairman assessment and individual directora holisticanall-inclusive evaluation of the performance of the Board in light of our needs.needs and strategies. The committee, chairman, and individual director assessments are more specifically tailored. The assessment results are shared with theour Chairman, applicable directors, committee members, and the full Board, and appropriate action plans are prepared and executed.Board Meetings and Executive Sessionstwoone special meetingsmeeting in person or telephonically during 2015, along with frequent telephonic updates around strategic transactions.2017. All of our current directors attended 75% or more of the aggregate of all meetings of the Board and the Board committees on which they served during 2015.2017.2018 PROXY STATEMENT | 7 Diebold doeswe do not have a formal policy regarding directors’ attendance at the Annual Meeting of Shareholders, it is expected that all directors attend the 2016 Annual Meeting unless there are extenuating circumstances fornon-attendance. All With the exception of Dr. Alexander Dibelius, who had a previously2015 Annual Meeting of Shareholders.2017 annual meeting.Board Risk Oversight-6-CEO,President and Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Security Officer, Corporate Controller, Chief Legal Officer, Chief Ethics and Compliance Officer, Chief Human Resources Officer, Chief CommunicationsPeople Officer, and/or Vice President, Internal Audit and other Vice Presidents of our various divisions and regions, as appropriate, with open lines of communication among them, the various committees of the Board and the entire Board.Diebold.the Company. We also believe that our Board leadership structure complements our risk management structure because it allows our independent directors to exercise effective oversight of the actions of management in identifying risks and implementing effective risk management policies and controls.8 | 2018 PROXY STATEMENT Board Committees and CompositionBOARD COMMITTEES AND COMPOSITIONcommittee'scommittee’s members and meetings during 20152017 and functions are described below.Audit Committee*, and Alan J. Weberteneleven times during 2015,2017, and had informal communications with management, as well as with our independent auditors, at various other times during the year.ContactCommittee Report:auditchair@diebold.comCommittee Report: See page 65.85.:• Monitors the adequacy of our financial reporting process and systems of internal controls regarding finance, accounting and ethics and compliance.Messrs.Mr. Allender and Weber areis an audit committee financial expertsexpert within the meaning of such term under Item 407(d)(5) of RegulationS-K.* This committee is a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 or the(the Exchange Act.Act).-7-Board Governance CommitteeHenry D. G. WallaceDr. Alexander Dibelius2015,2017, and had informal communications with management at various other times during the year.bdgovchair@diebold.com:• Insures Board oversight of our enterprise risk management process."“Director Orientation and Education"Education” below.Compensation Committee2018 PROXY STATEMENT | 9 Henry D. G. WallaceAlan J. Weber2015,2017, and had informal communications with management, as well as the Committee’scommittee’s independent compensation consultant, at various other times during the year.Contact:compchair@diebold.comCommittee Report: See page 2342.:• Administers our executive compensation program. "Compensation “Compensation Discussion and Analysis - Analysis—Role of the Compensation Committee"Committee” below.-8-Finance FINANCE COMMITTEECommitteefoursix times in 2015,2017, and had informal communications with management at various other times during the year.:• Makes recommendations to the Board with respect to material or other significant transactions.company.Company.Technology Strategy and Innovation Committee2017 and had informal communications with management at various other times during the year.one timeor telephonically two times in 2015.ResponsibilitiesResponsibilities::• Assists the Board in its oversight of our investment in software and services technology and intellectual property.companyCompany as it relates to technology and innovation.10 | 2018 PROXY STATEMENT Corporate Governance Materials Available on Our Website(www.diebold.com)(www.dieboldnixdorf.com) in the Corporate Governance portion of the Investor Relations section under the Company tab:Current Charters for our Audit, Board Governance, Compensation, Finance, and Technology Strategy and Innovation Committees;Our Director Independence Standards;Our Corporate Governance Guidelines; andOur Code of Business Ethics.proxy statement.Proxy Statement.Director IndependenceDieboldthe Company (either directly or as a partner, shareholder or officer of an organization that has a relationship-9-with us) and is independent under our director independence standards, the NYSE director independence standards, and the SEC independence requirements, as applicable and as currently in effect. Andreas W. Mattes doesGerrard Schmid and Dr. Juergen Wunram do not meet these independence standards because he isthey are employed by us as our President and CEO.Chief Executive Officer and our Senior Vice President and Chief Operating Officer, respectively.Mr.Messrs. Crandall servesand Greenfield serve on the board of directors of R.R. Donnelley & Sons Company,Financial Solutions, Inc., which provided SEC filing and printing services in 2017 related to our proxy statement for our 2015 annual meeting2017 Annual Meeting of shareholders for a fee of approximately $21,000. In addition, Mr. Crandall owns the Enterprise Software CEO Roundtable and our former CEO, Mr.Andreas Mattes, was a member of that Roundtable in 2015 and will be for 2016. Mr. Mattes did not join the Roundtable until after Mr. Crandall stepped down from his membership on our Compensation Committee in April 2015.2017. The standard annual fees, which were paid by Diebold to the Roundtable,Company, were $8,500 for 2015 and $9,500 for 2016.2017. The Board determined that the provision of services by R.R. Donnelley, Mr. Crandall’s service on the R.R. Donnelley board, and the Roundtable’s receipt of a membership fee from Dieboldthe Company did not create a material relationship or impair the independence of Mr. Crandall.Mr. Weber serves on the board of directors of Broadridge Financial Solutions, Inc., which provided processing, mailing and tabulation services for our proxy statement in 20152017 for a fee of approximately $105,000.$112,753. The Board determined that the provision of these services and Mr. Weber’s board membership did not create a material relationship or impair the independence of Mr. Weber.Mr. Cox serves as President and CEO of Cox Financial Corporation, which may act as the broker with respect to certain supplemental disability benefits purchased by our employees, at their own expense and election, from certain insurance companies. Diebold is not a client or customer of Cox Financial Corporation and does not participate in the employee’s decision. Employees of Cox Financial Corporation received aggregate commissions from the respective insurance companies of approximately $14,930 during 2015. The Board determined that the provision of these brokerage services to our employees, at their own expense and election, for purposes of their long-term disability insurance coverage, did not create a material relationship or impair the independence of Mr. Cox.Related Person Transaction Policy""” we do not engage in transactions withnon-employee directors or their affiliates if a transaction would cause an independent director to no longer be deemed independent, would present the appearance of a conflict of interest or is otherwise prohibited by law, rule or regulation. This includes, directly or indirectly, any extension, maintenance or renewal of an extension of credit to any of our directors.2015,2017, we did not engage in any related person transaction(s) requiring disclosure under Item 404 of RegulationS-K.-10-2018 PROXY STATEMENT | 11 Communications with provides a process for shareholders to send communications to the Board. Shareholders and interested parties may communicate with our Audit, Board Governance and Compensation Committee Chairs by sending an email to the address provided in the applicable committee description above or with ournon-employee directors as a group by sending an email tononmanagementdirectors@diebold.comnonmanagementdirectors@dieboldnixdorf.com.Code of Business EthicsEthics, or the Code.Ethics. The Code of Business Ethics ties our core values to the ethical principles that must guide our business decisions. The Code of Business Ethics also provides clear information on the resources available for directors, executive officers and employees to ask questions and report unethical behavior. All members of the Board have received training specific to the Code.Code of Business Ethics. not only to us, but also toincluding all of our domestic and international affiliates and subsidiaries. The Code of Business Ethics describes certain responsibilities that our directors, executive officers and employees have to Diebold,the Company, to each other and to our global partners and communities. It covers many topics, including compliance withCode.Code of Business Ethics. Our Audit Committee has procedures to receive, retain and treat complaints regarding accounting, internal financial controls or auditing matters, and to allow for the confidential and anonymous submission of concerns regarding questionable practices or potential violations of our policies, including the Code.Code of Business Ethics.Compensation Committee Interlocks and Insider Participation20152017 were Phillip R. Cox, Chair,Dr. Dieter W. Düsedau, Rajesh K. Soin, Henry D. G. Wallace, Richard L. Crandall (through April 2015), and Gale S. Fitzgerald (through April 2015).Alan J. Weber. No member of the Compensation Committee has had any relationships requiring disclosure by us under the SEC’s rules requiring disclosure of certain relationships and related personDieboldthe Company has served as a director or member of a compensation committee (or other committee serving an equivalent function) of any other entity, the executive officers of which served as a director of Dieboldthe Company or member of the Compensation Committee during 2015.2017.Director Orientation and Educationwhereduring which the new director meets with key senior management personnel and takes a tour through our global solutions center to improve his or her understanding of our business and global products and-11-plans, significant financial matters, core values, including ethics and compliance programs (and also including our Code of Business Ethics), corporate governance practices and other key policies and practices.12 | 2018 PROXY STATEMENT theournon-employee directors during 2015 remained the same as that paid2017 was increased from $65,000 to $75,000 following theirre-election in 2014. Accordingly, during 2015, our non-employee directors received an annual retainer of $65,000 for their service as directors.April 2017. Ournon-executive Chairman of the Board received an additional annual retainer of $100,000. Member Chair Audit Committee $ 12,500 $ 25,000 Compensation Committee $ 10,000 $ 20,000 Board Governance Committee $ 7,500 $ 15,000 Finance Committee $ 7,500 $ 15,000 Technology Strategy and Innovation Committee $ 7,500 $ 15,000 Amended and Restated 1991Diebold Nixdorf, Incorporated 2017 Equity and Performance Incentive Plan, as amended and restated on February 12, 2014, which we refer to as the 2017 Plan. We aim to provide a balanced mix of cash and equity compensation to our directors that targets the directors’ total pay at the median of a peer"“Role of Peer Companies and Competitive Market Data"Data” under "“Compensation Discussion and Analysis."”2015,2017, eachnon-employee director was awarded 3,534 deferred common shares,a grant of 5,164 RSUs, subject to aone-year vesting condition.period. Each award approximated $125,000$150,000 in value and provides for dividend equivalent payments in cash during the restricted period. Our non-employee directors have received deferred common shares awards since 2007. We believe these awards strengthen the directors’ ties to shareholder interests by aligning their long-term economic interests and that these awards provide effective ways to help our directors build stock ownership.-12-2018 PROXY STATEMENT | 13 2015 Director Compensation2017 DIRECTOR COMPENSATION2015:Name Fees Earned or Paid in Cash1
($) Stock Awards2
($) All Other Compensation3
($) Total
($)Patrick W. Allender 97,500 125,386 15,630 238,516 Phillip R. Cox 90,250 125,386 27,590 243,226 Richard L. Crandall 87,500 125,386 27,992 240,878 Gale S. Fitzgerald 90,000 125,386 27,130 242,516 Gary G. Greenfield 76,250 125,386 3,957 205,593 Robert S. Prather, Jr. 82,000 125,386 11,514 218,900 Rajesh K. Soin 81,250 125,386 12,525 219,161 Henry D. G. Wallace 181,250 125,386 29,545 336,181 Alan J. Weber 89,250 125,386 29,857 244,493 2017: NAME 99,167 12,824 1This column reports the amount of cash compensation earned in 20152017 for Board and committee service, including Board retainer amounts discussed above and the following committee fees earned in 2015 (partial amounts reflect pro-rated fees based on time of actual committee service during 2015):2017.Name Audit Committee
($)Board
Governance Committee
($)Compensation
Committee($)Finance
Committee($)Technology Strategy & Innovation Committee($)Patrick W. Allender 25,000 3,750 — 3,750 — Phillip R. Cox — 3,750 20,000 1,500 — Richard L. Crandall — 3,750 3,750 — 15,000 Gale S. Fitzgerald 6,250 15,000 3,750 — — Gary G. Greenfield — — — 3,750 7,500 Robert S. Prather, Jr. 11,750 — — 5,250 — Rajesh K. Soin — 3,750 8,750 — 3,750 Henry D. G. Wallace — 7,500 8,750 — — Alan J. Weber 11,750 — — 12,500 — NAME 15,000 2This column represents the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718 for deferred sharesRSUs granted to ournon-employee directors in 2015,2017, as further described above. Each director received 3,534 deferred shares5,164 RSUs as of April 23, 2015, with a26, 2017, valued based on the closing price of our common shares on that date of $35.48. The actual value a director may realize will depend on the stock price on the date the deferral period ends. As of December 31, 2015, the aggregate number of vested and unvested deferred shares held by our current directors was: Mr. Allender, 13,684; Mr. Cox, 24,084; Mr. Crandall, 24,434; Ms. Fitzgerald, 23,684; Mr. Greenfield, 3,534; Mr. Prather, 7,734; Mr. Soin, 10,984; Mr. Wallace, 25,784; and Mr. Weber, 23,684. In addition, as of December 31, 2015, the aggregate number of common shares issuable pursuant to options outstanding held by current directors was: Mr. Cox, 4,500; Mr. Crandall, 4,500; Ms. Fitzgerald, 4,500; Mr. Wallace, 4,500; and Mr. Weber, 4,500. These options were awarded to Messrs. Cox, Crandall, Wallace and Weber and Ms. Fitzgerald prior to 2007. All of these options vested prior to December 31, 2005 and are subject to reload rights under which the director can elect to pay the exercise price using previously owned shares and receive a new option at the then-current market price for a number of shares equal to those surrendered. The reload feature is only available if the director agrees to defer receipt of the balance of the option shares for at least two years.$28.80.3This column represents dividend equivalents paid in cash on shares deferred shares.by our directors.14 | 2018 PROXY STATEMENT -13-Director Stock Ownership GuidelinesAs reported in our 2014 proxy, theupdated itshas adopted stock ownership guidelines in 2013 to better align with the practices of our peer group (discussed further below under "Data"Data” under "“Compensation Discussion and Analysis"Analysis”). Eachnon-employee director is expected to own common shares of Dieboldthe Company valued at least five times the annual retainer, and the directors are not permitted to sell any vested shares prior to meeting this ownership level. We count the deferred2018 PROXY STATEMENT | 15 CONSIDERATION OF DIRECTOR-NOMINEESShareholder Nominees""” In evaluating shareholder nominations, the Board Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board and to address the membership criteria set forth below under "“Board Diversity, Director Qualifications and Corporate Governance Guidelines."”complete information as to the identity and qualifications of the proposed nominee, including name, address, present and prior business and/or professional affiliations, education and experience, particular fields of expertise, and a representation that the shareholder is a holder of record;IDENTIFYING AND EVALUATING NOMINEES FOR DIRECTORSan indication of the nominee’s consent to serve as a director of Dieboldthe Company if elected;why, in the opinion of the recommending shareholder, the proposed nominee is qualified and suited to be a director of Diebold;the Company; andwhether the shareholder intends to deliver a proxy statement and form of proxy to holders of at least the percentage of shares entitled to vote that are required to elect a nominee.44720-8077, Attention: Corporate Secretary.44720-8077. For important additional information related to proposal requirements, see "Proposals"Proposals” below. below.Identifying and Evaluating Nominees for DirectorsBoard and whether any vacancies on the Board are anticipated due to retirement or otherwise.Board. When vacancies arise or are anticipated, the Board Governance Committee considers various potential candidates. See “Board Diversity, Qualifications and Corporate Governance Guidelines” below. Candidates may come to the attention of the Board Governance Committee through current Board members, professional search firms, shareholders or other persons. The Company has engaged a third-party search-14-Majority Voting Policy2007,February 2017, the Board adopted a proxy access provision as part of our Code of Regulations, which allows a shareholder, or a group of up to 20 shareholders in aggregate, owning 3% or more of our outstanding shares of common stock continuously for at least three years to nominate and"withheld" from“against” his or her election than votes "for"“for” election, which we refer to as a Majority Withheld Vote Against, is expected to tender his or her16 | 2018 PROXY STATEMENT
CONSIDERATION OF DIRECTOR-NOMINEES |
resignation following certification of the shareholder vote. The Board Governance Committee will then consider the tendered resignation and make a recommendation to the Board as to whether to accept or reject the tendered resignation. The Board will act on the Board Governance Committee’s recommendation within 90 days following certification of the shareholder vote. Any director who tenders his or her resignation pursuant to this policy will not participate in the Board Governance Committee recommendation or Board action regarding whether to accept or reject the tendered resignation.
However, if each member of the Board Governance Committee received a Majority Withheld Vote Against in the same election, then the Board will appoint a committee comprised solely of independent directors who did not receive a Majority Withheld Vote Against at that election to consider each tendered resignation offer and recommend to the Board whether to accept or reject each resignation. Further, if all of the directors received a Majority Withheld Vote Against in the same election, then the Board will appoint a committee comprised solely of independent directors to consider each tendered resignation offer and recommend to the Board whether to accept or reject each resignation.
BOARD DIVERSITY, DIRECTOR QUALIFICATIONS AND CORPORATE GOVERNANCE GUIDELINES
In evaluating director-nominees, the Board Governance Committee considers many factors in order to strengthen the talent and capabilities of the Board and the committees, consistent with our Corporate Governance Guidelines and other criteria established by the Board. While the Board Governance Committee does not have a formal diversity policy, its general goal is to create a well-balanced Board that combines broad business and industry experience with comprehensive diversity characteristics and professional viewpoints. Together, these considerations enable us to appropriately pursue our strategic objectives domestically and abroad.
Qualifications for Board service have not been reduced to a checklist of specific standards or minimum qualifications, skills or qualities. Rather, the Board Governance Committee decides which nominees to recommend based on the facts and circumstances at the time. Applicable considerations include:
by contributing a variety of experiences, backgrounds, qualifications, technical expertise and other characteristics; and |
Final approval of any candidate is determined by the full Board. In addition, the performance and contributions of each incumbent director are assessed as part of the Board’s annual assessment program, as discussed above in "
The Board Governance Committee believes that each of our directors fits the general qualifications described above and brings valuable experience, skills and qualifications to the Board. Accordingly, each of our current Board members (other than Mr. Prather and Mr. Wallace, whose terms will expire at the Annual Meeting) is nominated for election at the Annual Meeting. Detailed information about each director’sdirector nominee’s background, experience and qualifications is provided in Proposal 1.
Although Mr. Crandall has reached the retirement age under our current Board retirement policy, the Board Governance Committee and the Board have waived the retirement age for him as permitted under our Corporate Governance Guidelines. Mr. Crandall’s significant cybersecurity expertise continues to be an invaluable resource to the Company. The Board also felt that Mr. Crandall’s long-standing experience with the Company provided continuity on the Board as two directors retire.
| 2018 PROXY STATEMENT | | 17 |
BOARD RECOMMENDATION ✓ FOR the election of The Board recommends that its eleven nominees for director be elected at the 2018 Annual Meeting, each to hold office for a term of one year from the date of the Annual Meeting or until the election and qualification of a successor. In the absence of contrary instruction, the Proxy Committee will vote the proxies for the election of the eleven nominees. At its April 2018 meeting, the Board plans to fix the number of directors at eleven. As such, proxies cannot be voted for a greater number of persons than the number of nominees named herein. All of the director-nominees, except for Gerrard Schmid, our President and Chief Executive Officer, and Dr. Juergen Wunram, our Senior Vice President and Chief Operating Officer, are independent as defined by the corporate governance standards of the NYSE. All director-nominees are presently members of the Board. All of our nominees were previously elected by our shareholders, except for Mr. Schmid who was appointed to the Board in connection with being named our President and Chief Executive Officer on February 21, 2018. If for any reason any director-nominee is not available for election when the election occurs, the Proxy Committee, at its option, may vote for substitute nominees recommended by the Board. Alternatively, the Board may reduce the number of director-nominees. The Board has no reason to believe that any director-nominee will be unavailable for election when the election occurs. OUR DIRECTOR NOMINEES Patrick W. Allender AGE:71 DIRECTOR SINCE2011 COMMITTEES: •Audit Committee (Chair) •Finance Committee PRINCIPAL OCCUPATION, PROFESSIONAL AND BOARD EXPERIENCE: Mr. Allender retired in February 2007 as Executive Vice President, Chief Financial Officer and Secretary for Danaher Corporation, Washington, D.C. (a diversified manufacturing company). He currently is a director of Brady Corporation, Milwaukee, Wisconsin (an identification solutions company), where he has served since 2007 and where he serves as Chair of the Finance Committee and as a member of the Audit and DIRECTOR QUALIFICATIONS: Mr. Allender’s 18 years as chief financial officer of a large publicly traded company with global operations provides our Board with valuable expertise in financial reporting and risk management. In addition, as a result of Mr. Allender’s public accounting background, including as audit partner of a major accounting firm, he is exceptionally qualified to serve as Chair of our Audit Committee and a member of our Finance Committee.PROPOSAL 1: ELECTION OF DIRECTORS
The Board recommends that its ten nominees for director be elected at the 2016 Annual Meeting, each to hold office for a term of one year from the date of the Annual Meeting or until the election and qualification of a successor. In the absence of contrary instruction, the Proxy Committee will vote the proxies forthe ten nominees.director nomineesAll director-nominees are presently memberseach of the Board and were previously elected by our shareholders. All of the director-nominees, except for Andreas W. Mattes, our President and CEO, are independent as defined by the corporate governance standards of the NYSE.Our Director Nominees
Age: 69Director since 
Committees:Principal Occupation, Professional and Board Experience:NominatingCorporate Governance Committees. Mr. Allender also is a director of Colfax Corporation, Fulton,Annapolis, Maryland (a diversified manufacturing company), where he has served since 2008 and where he serves as Chair of the Nominating and Corporate Governance Committee and as a member of the Audit Committee.Director Qualifications:18 | 2018 PROXY STATEMENT -16-
PROPOSAL 1: ELECTION OF DIRECTORS |
 Phillip R. Cox | ||
AGE:70 DIRECTOR SINCE2005 COMMITTEES: •Compensation Committee (Chair) •Board Governance Committee | PRINCIPAL OCCUPATION, PROFESSIONAL AND BOARD EXPERIENCE: Mr. Cox has served as President and Chief Executive Officer of Cox Financial Corporation, Cincinnati, Ohio (a financial planning and wealth management services firm) since 1972. Mr. Cox currently is a director of Cincinnati Bell Inc., Cincinnati, Ohio (a telecommunications company), where he has served as a director since 1993 and as Chairman of the Board since 2003, and where he serves as a member of the Audit and Finance, Compensation, and Governance and Nominating DIRECTOR QUALIFICATIONS: Mr. Cox’s | |
| 2018 PROXY STATEMENT | | 19 |
 PROPOSAL 1: ELECTION OF DIRECTORS |
Richard L. Crandall | ||
AGE:74 DIRECTOR SINCE1996 COMMITTEES: •Technology Strategy and Innovation Committee (Chair) •Board Governance Committee | PRINCIPAL OCCUPATION, PROFESSIONAL AND BOARD EXPERIENCE: Mr. Crandall is Managing Partner of Aspen Venture LLC, Aspen, Colorado (a venture capital and private equity firm), in which role he has served since 2001, and Mr. Crandall currently is the Chairperson of the Board and a member of the Corporate Responsibility and Governance Committee of Donnelley Financial Solutions, Inc., Chicago, Illinois (a financial communications and data services company). Mr. Crandall formerly was a director of R.R. Donnelley & Sons Company, Chicago, Illinois (an interactive communications provider), where he DIRECTOR QUALIFICATIONS: Mr. Crandall’s extensive experience as an entrepreneur, leader and board member with several companies in the information technology and technology fields, and in the financial industry, including serving as chairman of a $900 million global information technology business, brings diversity of thought and governance experience to our Board. Further, during his | |
| 20 | | 2018 PROXY STATEMENT | |
PROPOSAL 1: ELECTION OF DIRECTORS |
Dr. Alexander Dibelius | ||
AGE:58 DIRECTOR SINCE2016 COMMITTEES: • Board Governance Committee • Finance Committee | PRINCIPAL OCCUPATION, PROFESSIONAL AND BOARD EXPERIENCE: Dr. Dibelius is Managing Partner of CVC Capital Partners (Deutschland) GmbH (a private equity advisor), in which capacity he has served since 2015. Previously, he served in a number of capacities at Goldman Sachs from 1993 until 2015, including Chairman of the Executive Board of Goldman Sachs AG (a financial services company) from 2002-2015, and Global Chairman of the Investment Banking Division of Goldman Sachs, Inc. from 2013-2015. Prior to this, he worked as a consultant for McKinsey & Co. (a global management consulting firm), where he was appointed partner in 1992. Before his career in business, Dr. Dibelius was a surgeon at the University Clinic of Freiburg. Dr. Dibelius also is Chairman and a member of the supervisory board of Diebold Nixdorf AG, a member of the supervisory board of KION Group AG, Wiesbaden (a fork lift manufacturing company), chairman of the board of Breitling SA, Switzerland (a luxury watch manufacturer), a member of the supervisory board of Douglas AG (a perfumery retail company) (as well as a member of the supervisory boards of Douglas GmbH, Düsseldorf, and Douglas Holding, Düsseldorf), a member of the supervisory board of Kirk Beauty Investments SA, Luxemburg, a member of the board of CVC Capital Partners Luxembourg SARL, Luxemburg, and a member of the shareholders’ committee of Tipico Group Ltd., Malta. DIRECTOR QUALIFICATIONS: Dr. Dibelius’ over twenty years of experience in the investment and merchant banking sectors and his management consulting experience bring important expertise and insight to our Board. His historical knowledge from, and continued service leading, the Diebold Nixdorf AG supervisory board provides an invaluable perspective to our Board. | |
Dr. Dieter W. Düsedau | ||
AGE:59 DIRECTOR SINCE2016 COMMITTEES: • Audit Committee • Compensation Committee | PRINCIPAL OCCUPATION, PROFESSIONAL AND BOARD EXPERIENCE: Dr. Düsedau is a physicist and formerly a Director (Senior Partner) of McKinsey & Co. (a global management consulting firm) from 1988-2014, based in Munich. He was the leader of the German Strategy Practice and was the long-standing leader of McKinsey’s Telecoms, IT, and Media Sector in Germany. Prior to joining McKinsey, he worked at the Max Planck Institute, CERN (the European Organization for Nuclear Research), The University of Michigan, Ann Arbor, and M.I.T. on quantum field theories. Dr. Düsedau also is a member of the supervisory board of Diebold Nixdorf AG and a member of the supervisory board of Kontron AG (an embedded computing technology company). DIRECTOR QUALIFICATIONS: Dr. Düsedau’s experience as a senior partner of a top management consulting firm, and his years of experience leading its strategy practice and telecommunications, IT, and media industry sectors, provide helpful insight and strengthen our Board’s proficiencies in these areas. He also brings significant transactional experience to our Board, and his historical knowledge from and continued service on the Diebold Nixdorf AG supervisory board provides an invaluable perspective to our Board. | |
| 2018 PROXY STATEMENT | | 21 |
PROPOSAL 1: ELECTION OF DIRECTORS |
Gale S. Fitzgerald | ||
AGE:67 DIRECTOR SINCE1999 COMMITTEES: •Board Governance Committee (Chair) •Audit Committee | PRINCIPAL OCCUPATION, PROFESSIONAL AND BOARD EXPERIENCE: Ms. Fitzgerald retired in December 2008 as President and Director She currently She is a former director of Health Net, Inc., Woodland Hills, California (a managed healthcare company), where she served from 2001-2016 and was Chair of the Finance Committee and a member of the Audit Committee. Committee.DIRECTOR QUALIFICATIONS: Ms. Fitzgerald’s international experience as chief executive officer in the information technology industry, chief executive officer of a business unit of International Business Machines and the president and chief executive officer of two privately-held consulting companies brings a well-rounded and diverse perspective to our Board discussions and provides significant insight in critical areas that impact our | |
 Gary G. Greenfield | |||
AGE:63 DIRECTOR SINCE2014 COMMITTEES: • Chairman of the Board •Finance Committee •Technology Strategy and Innovation Committee | PRINCIPAL OCCUPATION, PROFESSIONAL AND BOARD EXPERIENCE: Mr. Greenfield is the of Diebold Nixdorf, Incorporated, in which capacity he has served since January 1, 2018. Mr. Greenfield serves as a Partner for Court Square Capital Partners, New York, New York (a private equity company), and has served in that role since 2013. He was Chairman, CEO and President of Avid Technology, Inc., Burlington Massachusetts (a digital media and entertainment company), from 2007-2013. Mr. Greenfield is currently a director of Donnelley Financial Solutions, Inc., Chicago, Illinois (a financial communications and data services company), where he has served since October 2016 and is the Chairperson of the Compensation Committee and a member of the Audit Committee. He formerly was a director of Vocus, Inc., Beltsville, Maryland (a marketing and public relations software company), where he served as Chair of the Nominating and Governance Committee from 2008-2014, and of Epocrates, Inc., San Mateo, California (a company providing clinical content, practice tools and health industry engagement at the point of care), from 2011-2013. DIRECTOR QUALIFICATIONS: Mr. Greenfield’s proven senior executive experience in high technology industries, coupled with his exceptional ability to grow markets, both domestic and international, and develop products, provides our Board with experience relevant to many key aspects of our business. Mr. Greenfield’s strong skills at developing company vision and strategies in the evolving software development field strengthen the proficiency of our Board in this area. | ||
| 22 | | 2018 PROXY STATEMENT | |
PROPOSAL 1: ELECTION OF DIRECTORS |
Gerrard B. Schmid | ||
AGE:49 DIRECTOR SINCE2018 President and Chief Executive Officer | PRINCIPAL OCCUPATION, PROFESSIONAL AND BOARD EXPERIENCE: Mr. 2007-2012. DIRECTOR QUALIFICATIONS: As President and Chief Executive Officer of | |
 |
| ||
 Rajesh K. Soin | |||
AGE:70 DIRECTOR SINCE2012 COMMITTEES: •Compensation Committee •Technology Strategy and Innovation Committee | PRINCIPAL OCCUPATION, PROFESSIONAL AND BOARD EXPERIENCE: Mr. Soin is Chairman of the Board and Chief Executive Officer of Soin, LLC, West Carrollton, Ohio (an investment holding company), and has held those positions since 1998. He served as Chairman of the Board and Chief Executive Officer of MTC Technologies, Inc. (a military defense systems company), from 2002-2008. DIRECTOR QUALIFICATIONS: Mr. Soin’s experience as an entrepreneur is a tremendous asset. Mr. Soin has extensive experience in India, where we continue to focus on growth in | ||
| 2018 PROXY STATEMENT | | 23 |
 PROPOSAL 1: ELECTION OF DIRECTORS |
 Alan J. Weber | |||
AGE:69 DIRECTOR SINCE2005 COMMITTEES: •Finance Committee (Chair) • Compensation Committee | PRINCIPAL OCCUPATION, PROFESSIONAL AND BOARD EXPERIENCE: Mr. Weber is the Chief Executive Officer of Weber Group LLC, Greenwich, Connecticut (an investment advisory firm). He was Chairman and Chief Executive Officer of US Trust, Inc. (a banking and trust company) from 2002-2005 and an Operating Partner of Arsenal Capital Partners, LLC, New York, New York (a private equity firm) from 2009-2013. Mr. Weber currently is a director of Broadridge Financial Solutions, Inc., Lake Success, New York (an investor communications, securities processing, and outsourcing company), where he has served since 2007 and where he serves as a member of the Audit Committee, and as Chairman of the Compensation Committee. He is also Chairman ofKGS-Alpha Capital Markets, Inc. (a fixed income broker dealer), a director and Treasurer of DCTV (a charitable organization), and a director of Street Diligence LLC (a Fintech company). He also is a former director of Sandridge Energy, Inc., Oklahoma City, Oklahoma (an energy exploration and production company), where he DIRECTOR QUALIFICATIONS: Mr. Weber’s experience as a chief executive officer and chief financial officer in the financial industry, as well as his 27 years of experience at Citibank, including 10 years as an Executive Vice President, provides a tremendous depth of knowledge of our customers and our industry. Further, Mr. Weber’s experience as Chief Financial Officer of Aetna, Inc., an insurance services company, brings extensive financial expertise to | ||
Dr. Juergen Wunram | ||
AGE:59 DIRECTOR SINCE2017 Senior Vice President and Chief Operating Officer | PRINCIPAL OCCUPATION, PROFESSIONAL AND BOARD EXPERIENCE: Dr. Juergen Wunram is Senior Vice President and Chief Operating Officer of Diebold Nixdorf, Incorporated, and has served in that capacity since February 16, 2017. He also acted as our InterimCo-President andCo-CEO from December 2017 to February 2018. Prior to this, he served as our Company’s Senior Vice President and Chief Integration Officer. Dr. Wunram also currently serves as Chief Executive Officer and President of Diebold Nixdorf AG, a position he has held since April 1, 2017. He previously served as the Chief Financial Officer of Diebold Nixdorf AG from 2007-2017 and has been a member of the management board of Diebold Nixdorf AG since 2007. DIRECTOR QUALIFICATIONS: As Chief Operating Officer of the Company, Dr. Wunram’s responsibilities, which include integration, the Company’s EMEA and retail businesses, the Company’s subsidiary, AEVI International GmbH, as well as IT, security, quality and indirect procurement, provide him with intimate knowledge of our operations that are a vital component of our Board discussions. In addition, his role as CEO of Diebold Nixdorf AG provides an invaluable perspective to our Board. | |
| 24 | | 2018 PROXY STATEMENT | |
To our knowledge, no person beneficially owned more than five percent of our outstanding common shares as of December 31, TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP PERCENT OF CLASS Common Shares BlackRock, Inc. 55 East 52nd Street New York, New York 10055 Common Shares SouthernSun Asset Management, LLC 175 Toyota Plaza, Suite 800 Memphis, TN 38103 Common Shares Atlantic Investment Management, Inc. 666 Fifth Avenue New York, New York 10103 Common Shares The Vanguard Group 100 Vanguard Blvd. Malvern, Pennsylvania 19355 Common Shares GAMCO Investors, Inc., et al. One Corporate Center Rye, New York 10580 Information regarding share ownership was obtained from the Schedule 13D/A filed jointly by GAMCO Beneficial Ownership of SharesBENEFICIAL OWNERSHIP OF SHARES2015,2017, except for the shareholders listed below. The information provided below was derived from reports filed with the SEC by the beneficial owners on the dates indicated in the footnotes below.Title of ClassName of Beneficial OwnerAmount and Nature of Beneficial OwnershipPercent of Class7,767,6261 10.23 % 6,974,7592 9.18 % 6,100,0003 8.03 % 6,083,9884 8.01 % 5,784,1345,659,9975 7.45 % 1 8.88%Common SharesInformation regarding share ownership was obtained from the Schedule 13G/A filed on January 19, 2018 by BlackRock, Inc.55 East 52nd Street BlackRock, Inc. has sole voting power over 7,613,771 of our common shares and sole dispositive power over 7,767,626 of our common shares. BlackRock, Inc. is the parent company of the following subsidiaries that beneficially own our common shares: BlackRock Life Limited, BlackRock Advisors, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock Investment Management (Australia) Limited, BlackRock (Netherlands) B.V., BlackRock Fund Advisors, BlackRock Asset Management Ireland Limited, BlackRock Institutional Trust Company, National Association, BlackRock Financial Management, Inc., BlackRock Asset Management Schweiz AG, and BlackRock Investment Management, LLC. BlackRock Fund Advisors is the only BlackRock, Inc. subsidiary whose interest in our common shares is more than 5% of our common shares outstanding.New York, New York 100225,504,25428.5%Information regarding share ownership was obtained from the Schedule 13G filed on February 14, 2018 by SouthernSun Asset Management, LLC. SouthernSun Asset Management, LLC has sole voting power over 6,477,919 of our common shares and sole dispositive power over 6,974,759 of our common shares.Common Shares3Information regarding share ownership was obtained from the Schedule 13D/A filed on March 7, 2018 by Atlantic Investment Management, Inc. Atlantic Investment Management, Inc. has sole voting power over 5,248,987 of our common shares and sole dispositive power over 6,100,000 of our common shares. Atlantic Investment Management, Inc. serves as the investment advisor and has sole voting power over 5,248,987 of our common shares and sole dispositive power over all of our common shares owned by the following parties: (i) AJR International Master Fund, Ltd., a British Virgin Islands company, owns 401,355 of our common shares; (ii) Cambrian Master Fund, Ltd., a British Virgin Islands company, owns 3,000,225 of our common shares; (iii) Cambrian Global Master Fund, Ltd., a British Virgin Islands company, owns 1,205,552 of our common shares; and (iv) 1,492,838 of our common shares are held in one or more other accounts.4 Information regarding share ownership was obtained from the Schedule 13G/A filed on February 9, 2018 by The Vanguard Group. The Vanguard Group 100 has sole voting power over 148,537 of our common shares, shared voting power over 8,402 of our common shares, sole dispositive power over 5,933,659 of our common shares, and shared dispositive power over 150,329 of our common shares. Vanguard Blvd.Malvern, Pennsylvania 193554,805,11737.39%Common SharesCapital World Investors333 South Hope StreetLos Angeles, California 900714,222,00046.5%Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, is the beneficial owner of 141,927 of our common shares or .15% of our common shares outstanding, as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, is the beneficial owner of 15,012 of our common shares or .01% of our common shares outstanding, as a result of its serving as investment manager of Australian investment offerings.5 1Investor’sInvestors Inc., et al, on March 3,November 22, 2016. The entities of GAMCO Investor’sInvestors Inc., et al., that hold our common shares reported their beneficial ownership as follows: (i) Gabelli Funds, LLC has sole voting and dispositive power over 1,856,0001,703,500 of our common shares; (ii) GAMCO Asset Management Inc. has sole voting power over 3,618,7343,657,097 of our common shares and sole dispositive power over 3,821,5343,867,697 of our common shares; (iii) MJG Associates, Inc. has sole dispositivevoting and votingdispositive power over 6,0004,500 of our common shares; (iv) Gabelli Foundation, Inc. has sole voting and dispositive power over 3,0001,500 of our common2018 PROXY STATEMENT | 25
| shares;(v) MJG-IV Limited Partnership has sole voting and dispositive power over 5,000 of our common shares; (vi) GGCP, Inc. has sole voting and dispositive power over | |
The following table shows the beneficial ownership of COMMON SHARES BENEFICIALLY OWNED1 STOCK OPTIONS EXERCISABLE PERCENT OF CLASS Patrick W. Allender 3,162 — * Phillip R. Cox 5,164 — * Richard L. Crandall 22,453 — * Dr. Alexander Dibelius 5,164 — * Dr. Dieter W. Düsedau — — * Gale S. Fitzgerald 18,251 — * Gary G. Greenfield 16,364 — * Robert S. Prather 20,564 2 — * Gerrard B. Schmid — 3 — * Rajesh K. Soin 19,364 — * Henry D.G. Wallace 49,114 2 — * Alan J. Weber 17,864 — * Named Executive Officers: Dr. Juergen Wunram 4,913 3 25,118 * Christopher A. Chapman 30,773 3,4 137,864 * Andreas W. Mattes5 207,078 852,848 1.38 % Jonathan B. Leiken 53,409 * Dr. Ulrich Näher 3,919 3 16,550 * Olaf Heyden 3,919 3 16,550 * Eckard Heidloff5 — — — All Current Directors and Current Executive Officers as a Group(18) 253,984 310,608 * Security Ownership of Directors and ManagementSECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENTDiebold’sthe Company’s common shares, including those shares that individuals have a right to acquire (for example, through exercise of options under the Plan)options) within the meaning of Rule13d-3(d)(1) under the Exchange Act, by (1) each director-nominee,director and nominee, (2) each of our named executive officers, and (3) all director-nomineesdirectors and executive officers as a group as of February 26, 2016.2018. Ownership is also reported as of February 26, 2016that date for shares in the 401(k) Savings Plan over which the individual has voting power, together with shares held in our Employee Stock Purchase Plan.Director-Nominees: Common Shares Beneficially Owned1Stock Options Exercisable Within 60 Days Percent of Class Patrick W. Allender 3,162 — * Phillip R. Cox 3,534 4,500 * Richard L. Crandall 12,785 4,500 * Gale S. Fitzgerald 9,251 4,500 * Gary G. Greenfield 6,696 — * Robert S. Prather, Jr. 3,162 — * Rajesh K. Soin 9,696 — * Henry D. G. Wallace 3,662 4,500 * Alan J. Weber 8,196 4,500 * Named Executive Officers: Andreas W. Mattes
President and Chief Executive Officer137,820 234,577 * Christopher A. Chapman
Senior Vice President and Chief Financial Officer31,503248,298 * Jonathan B. Leiken
Senior Vice President, Chief Legal Officer and
Secretary17,133 7,132 * Stefan E. Merz
Senior Vice President, Strategic Projects24,507 16,519 * Sheila M. Rutt
Vice President, Chief Human Resources Officer45,252260,996 * George S. Mayes, Jr.
Former Executive Vice President and Chief Operating Officer 32,219 246,087 * All Current Directors, Director-Nominees, and Current Executive Officers as a Group (15) 341,796 428,149 1.18% DIRECTORS AND NOMINEES:
WITHIN 60 DAYS
Senior Vice President and Chief Operating Officer
Senior Vice President and Chief Financial Officer
Former Chief Executive Officer and President
Senior Vice President, Chief Legal Officer and Secretary 14,921 3
Senior Vice President, Systems
Senior Vice President, Services
Former President * Less than 1% .1 Director amounts do not include shares deferred by ournon-employee directors under the Deferred Compensation Plan No. 2 for Directors. The amounts of such deferred shares are: Mr. Allender, 23,352; Mr. Cox, 20,550; Mr. Crandall, 20,900; Dr. Düsedau, 5,164; Ms. Fitzgerald, 33,352; Mr. Soin, 7,450; and Mr. Weber, 20,150. 2 Includes all shares deferred under the Deferred Compensation Plan No. 2 for Directors which are scheduled to be released upon the end of their service as a director of the board. 26 | 2018 PROXY STATEMENT
BENEFICIAL OWNERSHIP |
| Beneficial ownership excludes unvested RSUs that will not vest within 60 days of February 26, 2018. The number of unvested RSUs held is: Dr. Wunram, 32,544; Mr. Chapman, 38,056; Mr. Leiken, 28,994; Dr. Näher, 21,443; Mr. Heyden, 21,443; and Mr. Schmid, 108,945. |
| 4 | Includes shares held in his/her name under the 401(k) Savings Plan over which he/she has voting power. |
| 5 | The amounts included in this beneficial ownership table are based on amounts held by Messrs. Mattes and Heidloff on their respective separation dates from the Company. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of our common shares, to file with the SEC reports of ownership of our securities on Form 3 and changes in reported ownership on Form 4 or Form 5, as applicable. Such directors, executive officers and greater than 10% shareholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms they file.
Based solely upon a review of the reports furnished to us, or written representations from reporting persons that all other reportable transactions were reported, we believe that during the year ended December 31, 2015,2017, our directors, executive officers and greater than 10% shareholders timely filed all reports they were required to file under Section 16(a).
| 2018 PROXY STATEMENT | | 27 |
APPOINTMENT OF OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
BOARD RECOMMENDATION
✓ | FOR Proposal 2 |
The Audit Committee has again appointed KPMG LLP, our independent registered public accounting firm since 1965, to examine our accounts and other records for the year ending December 31, 2018. This appointment is being presented to you for ratification at the Annual Meeting. If the shareholders fail to ratify the appointment, the Audit Committee will reconsider its selection.
KPMG LLP has no financial interest, direct or indirect, in us or any of our subsidiaries.
A representative of KPMG LLP is expected to be present at the 2018 Annual Meeting to make a statement if he or she desires and to respond to appropriate questions.
The following table shows the aggregate fees billed to us for the annual audit and the review of the interim financial statements and other services provided by KPMG LLP for fiscal 2017 and 2016.
2017
|
2016
| |||||||
Audit Fees1
|
$
|
7,792,000
|
|
$
|
7,490,000
|
| ||
Audit-Related Fees
|
|
—
|
|
|
—
|
| ||
Tax Fees2
|
$
|
1,045,000
|
|
$
|
344,000
|
| ||
All Other Fees3
|
$
|
1,024,000
|
|
$
|
718,000
|
| ||
Total
|
$
|
9,861,000
|
|
$
|
8,552,000
|
| ||
| 1 | Audit Fees consist of fees billed for professional services rendered for the audit of our annual financial statements and the review of the interim financial statements included in quarterly reports and services that are normally provided by KPMG LLP in connection with statutory and regulatory filings. |
| 2 | Tax Fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning, both domestic and international. These services include assistance regarding federal, state and international tax compliance, acquisitions and international tax planning. |
| 3 | All Other Fees consist of fees billed for those services not captured in the audit, audit-related and tax categories. These fees include services provided by KPMG LLP in connection with the Company’s revenue recognition standard readiness efforts. |
POLICY ON AUDIT COMMITTEEPRE-APPROVAL OF AUDIT AND PERMISSIBLENON-AUDIT SERVICES OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy topre-approve all audit andnon-audit services provided by the independent registered public accounting firm.
| 28 | | 2018 PROXY STATEMENT | |
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
These services may include audit services, audit-related services, tax services and other services.Pre-approval is generally provided for and anypre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The Audit Committee has delegatedpre-approval authority to Patrick W. Allender, Chair of the Audit Committee, when expedition of services is necessary, provided that Mr. Allender must report any decisions topre-approve to the full Audit Committee at its next scheduled meeting. All of the fees included under the categories “Audit-Related Fees,” “Tax Fees” and “All Other Fees” above werepre-approved by the Audit Committee. None of these fees were approved by the Audit Committee after services were rendered pursuant to the de minimis exception established by the SEC.
The Board recommends a voteFOR the approval of this Proposal 2.
| 2018 PROXY STATEMENT | | 29 |
PROPOSAL 3: APPROVAL, ON AN ADVISORY
BASIS, OF OUR NAMED EXECUTIVE OFFICER
COMPENSATION
BOARD RECOMMENDATION
✓ | FOR Proposal 3 |
In this Proposal 3, as required by Section 14A of the Exchange Act and pursuant to Rule14a-21(a) promulgated thereunder, we are providing our shareholders the opportunity to cast an advisory(non-binding) vote to approve the compensation paid to our named executive officers, as disclosed in “Compensation Discussion and Analysis” and “Executive Compensation Matters” that follow the proposals, pursuant to the compensation rules of the SEC. While this vote is advisory, and thus not binding on us, the Board values the opinions of our shareholders, and the Compensation Committee will review the results of the vote and expects to take them into consideration when making future decisions regarding named executive officer compensation. Under current Board policy, the shareholder vote for advisory approval of named executive officer compensation will occur annually. After the 2018 Annual Meeting, the next such vote will occur at our 2019 Annual Meeting of Shareholders.
The “Compensation Discussion and Analysis” and “Executive Compensation Matters” sections of this Proxy Statement describe our executive compensation program and the decisions and rationale of our Compensation Committee. Our executive pay program is designed to enable us to attract, retain and motivate high quality executives who will provide us with dynamic leadership and are instrumental to our success. We emphasize performance-based variable pay through a mix of base salary, annual cash bonuses and long-term incentives and seek to provide total pay that is commensurate with our performance and competitive with our peer group. Accordingly, we are asking our shareholders to vote FOR the following resolution:
“RESOLVED, that the compensation of our named executive officers as disclosed pursuant to the compensation rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and any related material disclosed in this Proxy Statement, is hereby APPROVED.”
The Board recommends a voteFOR the approval of this Proposal 3.
| 30 | | 2018 PROXY STATEMENT | |
PROPOSAL 4: APPROVAL OF AMENDMENTS TO THE DIEBOLD NIXDORF, INCORPORATED 2017 EQUITY AND PERFORMANCE INCENTIVE PLAN
BOARD RECOMMENDATION
✓ | FOR Proposal 4 |
We are asking our shareholders to approve amendments to our 2017 Equity and Performance Incentive Plan (which we refer to as the 2017 Plan). The amendments were adopted by our Board on February 1, 2018 based on the recommendation of our Compensation Committee and subject to the approval of our shareholders at the Annual Meeting. If approved by our shareholders, the amendments would authorize an additional 1,150,000 common shares for issuance under the 2017 Plan
effective April 25, 2018. The amendments also update the 2017 Plan to reflect certain changes in law due to the Tax Cuts and Jobs Act of 2017, which, among other things, eliminated the deductibility of performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code), for awards made after November 2, 2017. The amendments would not make any other changes to the 2017 Plan.
Our shareholders originally approved the 2017 Plan at the 2017 Annual Meeting of Shareholders; the 2017 Plan authorized the issuance of an aggregate of 4,941,117 common shares under the plan. As of February 26, 2018, 2,278,584 common shares remain available for grants under the 2017 Plan. With the proposed 1,150,000 share increase, approximately 3,428,584 will be available for issuance under the 2017 Plan, which represents approximately 4.5% of our 75,943,793 shares outstanding as of February 26, 2018. Absent an increase in the number of authorized shares under the 2017 Plan, we do not expect to have sufficient shares to meet our anticipated equity compensation needs for the next year. Therefore, if Proposal 4 is not approved by our shareholders, we believe our ability to attract, motivate and retain the talent we need to compete in our industry would be seriously and negatively impacted and this could affect our long-term success.
The 2017 Plan serves as a critical component of the overall compensation package that we offer our employees andnon-employee Board members. We believe that increasing the number of shares issuable under the 2017 Plan is necessary in order to allow us to continue to utilize equity awards to retain and attract the services of key individuals essential to our long-term growth and financial success and to further align their interests with those of our shareholders. We rely on equity awards to incentivize current and potential employees
andnon-employee Board members and believe that such awards are necessary for us to remain competitive with regard to retaining and attracting highly qualified individuals upon whom, in large measure, our future growth and success depend. While one alternative to using equity awards would be to significantly increase cash compensation, we do not believe this would be practical or advisable at this time. Any significant increase in cash compensation in lieu of equity awards would reduce the cash otherwise available for operations and investment in our business. Furthermore, we do not believe a more cash-oriented program would have the same long-term retention value or serve to align employees’ interests to those of our shareholders as well as a program that includes equity.
The affirmative vote of a majority of the shares of our common stock represented and voting at the Annual Meeting is required to approve the amendments to the 2017 Plan. Our executive officers andnon-employee directors have an interest in this proposal by virtue of their being eligible to receive equity awards under the 2017 Plan.
The material features and provisions of the 2017 Plan are summarized below. The full text of the 2017 Plan, as proposed to be amended to reflect the changes described above, is attached asAppendix A to this Proxy Statement. The following description is not complete and is qualified in its entirety by reference to that exhibit.
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The 2017 Plan authorizes the Compensation Committee to provide equity-based compensation in the form of stock options, stock appreciation rights (tandem and free-standing), restricted shares, restricted stock units, performance-based shares, performance units, dividend equivalents and other share-based awards for the purpose of providing ournon-employee directors, officers and other employees (and those of our subsidiaries) with incentives and rewards for performance.
We believe our future success depends in part on our ability to attract, motivate and retain high quality employees andnon-employee directors and that the ability to provide equity-based and incentive-based awards under the 2017 Plan is critical to achieving this success. We would be at a severe competitive disadvantage if we could not use share-based awards to recruit and compensate ournon-employee directors, officers and other employees.
As discussed in the “Compensation Discussion and Analysis” section, the use of our common shares as part of our compensation program fosters apay-for-performance culture that is an important element of our overall compensation philosophy. We believe that equity compensation motivatesnon-employee directors and employees to create shareholder value because the value they realize from their equity compensation is based on our stock price performance. Equity compensation also aligns the compensation interests of ournon-employee directors and employees with the investment interests of our shareholders and promotes a focus on long-term value creation because our equity compensation awards can be subject to vesting and/or performance criteria. As of February 26, 2018, approximately 1,000 of our regular, full-time employees held outstanding equity awards.
Some of the key features of the 2017 Plan that reflect our commitment to effective management of equity and incentive compensation and our maintenance of sound governance practices in granting awards include:
Performance-Based Awards: The 2017 Plan provides that the payment of dividend equivalents with respect to performance-
based awards will be deferred until and paid contingent upon the level of achievement of the applicable management performance goals.
Detrimental Activity and Clawback: The 2017 Plan contains provisions that subject all awards under it to the terms of any recoupment or clawback policy required by law or applicable stock exchange requirement or adopted and in effect at the Company. The 2017 Plan also provides that in the event a participant participates in detrimental activity, as defined in the 2017 Plan, we have the right to have awarded shares returned.
Minimum Vesting Period: The 2017 Plan requires that nearly all awards granted under it be subject to aone-year minimum vesting period.
No Discounted Options or Stock Appreciation Rights: The 2017 Plan prohibits the grant of options or stock appreciation rights with an exercise price less than the fair market value of our common shares on the grant date.
No Repricing of Options or Stock Appreciation Rights: The 2017 Plan generally prohibits the repricing of options or stock appreciation rights (outside of certain corporate transactions or adjustment events described in the 2017 Plan) without shareholder approval.
Change in Control Definition: In 2015, we revised and conformed the definition that we use for “change in control” across our executive change in control agreements. The 2017 Plan includes this definition of “change in control” so that our agreements and this 2017 Plan provide for consistency and uniformity in the event of a change in control.
Independent Committee Administration: Awards to our named executive officers under the 2017 Plan will be granted by a committee composed entirely of independent directors.
Term of the 2017 Plan: No awards may be granted under the 2017 Plan more than ten years from the date of initial shareholder approval of the plan.
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We are committed to sound equity compensation practices because we recognize that equity compensation awards dilute shareholder equity. Our equity compensation practices are intended to be competitive and consistent with market practices, and we believe our historical share usage has been responsible and mindful of shareholder interests. For purposes of evaluating our equity compensation program, shareholders may wish to consider two metrics: historical burn rate and overhang.
number of shares available for future grants of equity awards in proportion to our shares outstanding atyear-end. As of the end of 2017, our overhang was 14.46%. |
More detail regarding the overhang and dilution associated with the current 2017 Plan, the 2017 Plan as proposed to be amended and our 1991 Equity and Performance Incentive Plan, as amended (which we refer to as the 1991 Plan) is below. The information is as of February 26, 2018. As of that date, there were 75,943,852 of our common shares outstanding. We replaced the 1991 Plan with the 2017 Plan at last year’s annual meeting. No additional awards will be made under the 1991 Plan, and therefore the table below reflects that no shares are available for future issuance under the 1991 Plan. The 2017 Plan is the sole compensation plan under which future awards can be made.
Outstanding full-value awards assuming that the outstanding awards achieve maximum performance under the 1991 Plan and 2017 Plan | 6,001,492 shares or 7.90% of our outstanding shares | |
Outstanding stock options under the 1991 Plan and 2017 Plan | 2,642,526 shares or 3.48% of our outstanding shares | |
Weighted average exercise price of outstanding options under the 1991 Plan and 2017 Plan | $27.30 | |
Weighted average remaining term of outstanding options under the 1991 Plan and 2017 Plan | 8 years | |
Total shares subject to outstanding awards under the 1991 Plan and 2017 Plan | 8,644,018 shares or 11.38% of our outstanding shares | |
Total shares available for future awards under the 1991 Plan and 2017 Plan | 2,278,584 | |
Current overhang percentage based on total number of shares subject to outstanding awards under the 1991 Plan and 2017 Plan | 14.38% | |
Additional shares requested under amendment to the 2017 Plan | 1,150,000 | |
Potential dilution of 1,150,000 additional shares as a percentage of outstanding shares | 1.51% | |
Total potential fully-diluted overhang under the 1991 Plan and the 2017 Plan, as amended pursuant to this proposal | 12,072,602 shares or 15.9%. |
Based on the closing price on the NYSE for our common shares on February 26, 2018, of $15.40 per share, the aggregate market value as of that date of the 1,150,000 additional common shares requested for issuance under the amended 2017 Plan was $17,710,000.
In 2015, 2016 and 2017, we granted awards (including performance-based awards) under the 1991 Plan covering 1,563,000 shares, 1,717,000 shares, and 3,091,225 shares, respectively. In 2017 we also granted 134,869 shares under the 2017 Plan. For information with respect to awards granted under the 2017 Plan, see “Existing Plan Benefits to Named Executive Officers and Others” below.
In determining the number of shares to request for approval by our shareholders pursuant to the amendments, our
management team worked with advisors and the Compensation Committee to evaluate a number of factors including our recent share usage and criteria expected to be utilized by institutional proxy advisory firms in evaluating this proposal. We have also considered shareholder feedback in determining an appropriate number of shares to seek to add to the 2017 Plan, and are mindful of the ratio of our stock-based compensation to our performance over time.
If the amendments to the 2017 Plan are approved, we intend to utilize the increased amount of shares authorized under the 2017 Plan to continue our practice of incentivizing key individuals through annual equity grants. We anticipate that the shares requested in connection with the approval of the 2017 Plan will last for about one year, based on our historic grant rates and the approximate current stock price, but could
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last for a shorter period of time if actual practice does not match historic rates or our share price changes materially. As noted in “2017 Plan Highlights” and elsewhere below, our Compensation Committee retains full discretion under the 2017 Plan to determine the number and amount of awards to
be granted under the 2017 Plan, subject to the terms of the 2017 Plan, and future benefits that may be received by participants under the 2017 Plan are not determinable at this time.
SUMMARY OF MATERIAL TERMS OF THE 2017 PLAN
Shares Available Under the 2017 Plan: Subject to adjustment as provided in the 2017 Plan and the approval of Proposal 4 by shareholders at the Annual Meeting, the number of common shares that may be issued or transferred:
will not exceed in the aggregate 6,091,117 shares. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing.
If an award is canceled, expires, lapses or is forfeited or is settled in cash, the common share underlying the award will be available for future grant. Common shares covered by an award are not counted as used unless and until they are issued or transferred. In the event that withholding tax liabilities arising from an award other than an option or stock appreciation right are satisfied by the tendering of common shares or by the withholding of common shares by us, the common shares so tendered or withheld shall be added to the common shares available for awards under the 2017 Plan. For the avoidance of doubt, the following will not again become available for issuance under the 2017 Plan: (i) any common shares withheld in respect of taxes upon settlement of an option or stock appreciation right, (ii) any common shares tendered or withheld to pay an exercise price, (iii) any common shares subject to a stock appreciation right that are not issued in connection with its stock settlement on exercise thereof, and (iv) any common shares reacquired by us on the open market or otherwise using cash proceeds.
Unless terminated earlier by the Board, the 2017 Plan will be in effect until all shares subject to it have been purchased or acquired. In no event will any award under the 2017 Plan be granted on or after the tenth anniversary of its effective date.
Limits on Awards: Assuming adoption of Proposal 4, the following limits apply to awards under the 2017 Plan (subject to limited permitted adjustment under the 2017 Plan):
Minimum Vesting Requirement: The Compensation Committee shall not award more than 5% of the aggregate number of common shares that become available for grant under the 2017 Plan pursuant to awards that are solely subject to a vesting or performance condition that provides for full vesting or completion of the performance period in less than one year following the grant date of the applicable award subject, in each case, to the Compensation Committee’s authority under the 2017 Plan to vest awards earlier, as the Committee deems appropriate, upon the occurrence of a Change in Control (as defined in the 2017 Plan), in the event of a participant’s termination of employment or service or otherwise as permitted by the 2017 Plan.
Eligibility: Our officers and employees (and those of our subsidiaries) (approximately 1,000 people) and ournon-employee directors (9 people) may be selected by the Board to receive benefits under the 2017 Plan. We refer to those individuals selected as “participants.”
Options: An option entitles the participant to purchase a common share at the exercise price. The Compensation Committee may grant incentive stock options,non-qualified stock options, or a combination of both, but incentive stock options cannot be granted tonon-employees. Dividends or dividend equivalents are not payable on options. Each option will be evidenced by an award agreement that specifies the number of common shares covered by the option, the exercise price and term of the option, any conditions to the exercise and any other terms and conditions that the Compensation Committee specifies and are consistent with the 2017 Plan. The exercise price for an option will not be less than 100% of the common shares’ fair market value on the date of grant (or,
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in the case of a 10% shareholder, 110% of the shares’ fair market value on the date of grant). The exercise price is payable in cash, check, common shares, consideration received under a broker-assisted cashless exercise program, by net exercise or any other combination or method of payment to the extent permitted by law and approved by the Compensation Committee. No option will be exercisable more than 10 years from the date of grant.
Stock Appreciation Rights (SARs): A SAR is the right to the equivalent of the increase in value of a specified number of our common shares over a specified period of time. The Compensation Committee may grant SARs alone (which we refer to as a free standing right) or in tandem with an option granted under the 2017 Plan (which we refer to as a related right). Dividends or dividend equivalents are not payable on SARs. Each SAR will be evidenced by an award agreement that describes the SAR, the exercise price and term of the SAR, any conditions to the exercise, any related option and any other terms and conditions that the Compensation Committee specifies and are consistent with the 2017 Plan. The exercise price for a SAR will not be less than 100% of the common shares’ fair market value on the date of grant (or, in the case of a related right, the same exercise price as the related option). The exercise price is payable in cash, check, common shares, consideration received under a broker-assisted cashless exercise program, by net exercise or any other combination or method of payment to the extent permitted by law and approved by the Compensation Committee. The amount payable by us upon exercise of a SAR shall be paid in cash, common shares or a combination of both, and the award agreement may so specify or grant to the participant or retain to the Compensation Committee the right to elect among those alternatives. No SAR will be exercisable more than 10 years from the date of grant.
Restricted Shares: Restricted shares are common shares that are subject to forfeiture and may not be transferred by a participant until the restrictions established by the Compensation Committee have lapsed. Those restrictions may take the form of a period of continued employment, board service or achievement of certain performance criteria, for example. The award agreement for each grant of restricted shares will specify the restrictions, the number of restricted shares and any other terms and conditions the Compensation Committee specifies and are consistent with the 2017 Plan. The grant will constitute a transfer of ownership and, unless otherwise determined by the Compensation Committee, will entitle the participant to voting, dividend and other ownership rights during the restriction period.
Restricted Stock Units (RSUs): An RSU is an award that is valued by reference to one common share. Payment of the value of the RSU will not be made until the restrictions
established by the Compensation Committee have lapsed. Those restrictions may take the form of a period of continued employment, board service or achievement of certain performance criteria, for example. The award agreement for each RSU grant will specify the restrictions, the number of RSUs and any other terms and conditions the Compensation Committee specifies and are consistent with the 2017 Plan. At the discretion of the Compensation Committee, RSUs may be credited with dividend equivalents, provided that, with respect to RSUs that are subject to performance conditions, the dividend equivalents will be deferred and paid contingent on the level of performance achieved at the end of the performance period. The amount payable may be paid in cash, common shares or a combination of both, and the award agreement may so specify or grant to the participant or retain to the Compensation Committee the right to elect among those alternatives.
Performance Shares and Performance Units: Performance shares are shares that become payable upon the achievement of specified performance goals, which may include management goals. Performance units are valued by reference to $1.25 per unit and payable upon achievement of specified performance goals, which may include management goals. The grant may specify a minimum level of achievement of the performance or management goals and will include a formula for determining the number of shares or units earned at the end of the performance period. The Compensation Committee will certify achievement levels of performance prior to the payment of any shares or units. At the discretion of the Compensation Committee, performance shares or performance units may be credited with dividend equivalents, and in all cases the dividend equivalents will be deferred and paid contingent on the level of performance achieved at the end of the performance period. Each performance share or performance unit award will be evidenced by an award agreement that specifies the number of performance shares or performance units, the performance objectives (which may include management goals), the performance period applicable to the award, and any other terms and conditions that the Compensation Committee specifies and are consistent with the 2017 Plan. The amount payable may be paid in cash, common shares or a combination of both, and the award agreement may so specify or grant to the participant or retain to the Compensation Committee the right to elect among those alternatives.
Other Share-Based Awards: The Compensation Committee may, from time to time, grant other share-based awards not otherwise described above but in all cases consistent with the terms and conditions of the 2017 Plan. Each such award will be expressed in terms of common shares or units based on common shares and will be evidenced by an award agreement that specifies the number of common shares or units granted,
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any conditions related to the award, and any other terms and conditions that the Compensation Committee specifies and are consistent with the 2017 Plan. The amount payable may be paid in cash, common shares or a combination of both, as determined by the Compensation Committee.
Management Objectives and Goals: The 2017 Plan requires that the Compensation Committee use “Management Objectives” for purposes of establishing “Management Goals” for a performance period for any performance-based award. Management objectives that will be used to establish management goals will be based on the attainment of specific levels of performance of the Company, a subsidiary, division, business unit, operational unit, department, region or function with the Company or subsidiary in which the participant is employed. The management objectives may also be used to establish management goals on an absolute or comparative basis with other companies or a published index, as the Compensation Committee deems appropriate.
The Compensation Committee will use the management objectives to set “management goals” for a set performance period. The Compensation Committee may provide that an evaluation of the management goals shall include or exclude any of the following items: (1) asset write-downs; (2) litigation or claim judgments or settlements; (3) the effect of changes in tax laws, accounting principles, regulations, or other laws or regulations affecting reported results; (4) any reorganization and restructuring programs; (5) acquisitions or divestitures; (6) unusual nonrecurring or extraordinary items identified in our audited financial statements, including footnotes or in management’s discussion and analysis in our annual report; (7) foreign exchange gains and losses; (8) changes in our fiscal year; and (9) any other specific unusual or nonrecurring events, or objectively determinable category thereof.
Generally, if the Compensation Committee determines that a change in our business, operations, corporate structure or capital structure, or the manner in which we conduct our business, or other events or circumstances render the management goals unsuitable, the Compensation Committee may in its discretion modify such management goals or the minimum acceptable level of achievement, in whole or in part, as the Compensation Committee deems appropriate and equitable.
Administration: The Board delegates authority to administer the 2017 Plan to the Compensation Committee or any other committee so designated by the Board. Unless otherwise determined by the Board, the Compensation Committee will consist of two or morenon-employee directors. The Compensation Committee may further delegate its authority to make awards under the 2017 Plan, complying in the Board’s discretion with the requirements ofRule 16b-3.
The Compensation Committee is authorized to interpret the 2017 Plan and related agreements and other documents. The Compensation Committee may provide for special terms for awards to participants who are foreign nationals or who are employed by us or any of our subsidiaries outside of the United States of America as the Compensation Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom, in all cases consistent with the terms of the 2017 Plan.
Transferability: Except as otherwise determined by the Compensation Committee, no option, SAR or other derivative security is transferable by a participant except, upon death, by will or the laws of descent and distribution. If, however, a participant is not a director or officer of ours, transfer may be made to a fully revocable trust of which the participant is treated as the owner for federal income tax purposes. Except as otherwise determined by the Compensation Committee, options and SARs are exercisable during the participant’s lifetime only by him or her or by his or her guardian or legal representative. The Compensation Committee may provide for transferability of options and SARs under the 2017 Plan if such provision would not disqualify the exemption for other awards underRule 16b-3 of the Exchange Act and so long as such transfer is not to any third-party entity, including financial institutions.
The Compensation Committee may specify at the date of grant that part or all of the common shares that are (i) to be issued or transferred by us upon exercise of options or SARs or upon payment under any grant of performance shares, performance units, RSUs or other share-based awards or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer for restricted shares, shall be subject to further restrictions on transfer.
Adjustments: The maximum number of shares that may be issued and delivered under the 2017 Plan, the number of shares covered by outstanding options and SARs, and the prices per share applicable thereto, are subject to adjustment in the event of stock dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, spin-offs, reorganizations, liquidations, issuances of rights or warrants, and similar events. In the event of any such transaction or event, the Compensation Committee, in its discretion, may provide in substitution for any or all outstanding awards under the 2017 Plan such alternative consideration as it, in good faith, may determine to be equitable in the circumstances and may require the surrender of all awards so replaced. The Compensation Committee may also make or provide for such adjustments in the numbers of shares authorized for issuance under the 2017 Plan as the Compensation Committee may determine appropriate to reflect any transaction or event described above.
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Change in Control: Under the 2017 Plan, a “Change in Control” generally means the occurrence of any of the following events: (1) when any person, entity or group acquires beneficial ownership of 30% or more of our outstanding common shares or voting power of our stock entitled to vote to elect directors, subject to limited exceptions described in the 2017 Plan; (2) a turnover of a majority of the incumbent Board members as of the date of the 2017 Plan, subject to limited exceptions described in the 2017 Plan; (3) consummation of certain corporate transactions or a sale or other disposition of all or substantially all of our assets, subject to limited exceptions described in the 2017 Plan; or (4) when our shareholders approve a complete liquidation or dissolution of the Company.
Tax Withholding: To the extent that we are required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a participant or other person under this 2017 Plan, and the amounts available to us for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the participant or such other person make arrangements satisfactory to us for payment of the balance of such taxes required to be withheld, which arrangements (in the discretion of the Compensation Committee) may include relinquishment of a portion of such benefit. Participants must also make such arrangements as we may require for the payment of any withholding tax obligations that may arise in connection with the disposition of shares acquired upon the exercise of option rights. In no event, however, may we accept common shares for the payment of taxes in excess of required tax withholding rates. However, in the discretion of the Compensation Committee, a participant or such other person may surrender common shares owned for more than six months to satisfy any tax obligations resulting from any such transaction.
Detrimental Activity: Any award agreement may provide that if a participant, either during employment by us or any of our subsidiaries or within a specified period after termination of such employment, engages in any “Detrimental Activity” (as defined in the 2017 Plan), and the Compensation Committee so finds, upon notice of such finding, the participant must unless otherwise provided in the award agreement:
| (A) | Return to us, in exchange for payment by us of any amount actually paid therefor by the participant, all common shares that the participant has not disposed of that were offered pursuant to the 2017 Plan within a specified period prior to the date of the commencement of such detrimental activity, and |
| (B) | With respect to any common shares so acquired that the participant has disposed of, pay to us in cash the difference between: |
| (i) | Any amount actually paid therefor by the participant pursuant to the 2017 Plan, and |
| (ii) | The market value per share of the common shares on the date of such acquisition. |
To the extent that such amounts are not paid to us, we may set off the amounts so payable to us against any amounts (but only to the extent that such amount would not be considered“non-qualified deferred compensation” under Section 409A of the Code) that may be owing from time to time by us or one of our subsidiaries to the participant, whether as wages, deferred compensation or vacation pay or in the form of any other benefit or for any other reason.
Clawback: Any award under the 2017 Plan that is subject to recovery under any law, government regulation or stock exchange listing requirement (or any policy adopted by us pursuant to those requirements or pursuant to direction of the Board, including our current clawback policy) will be subject to clawback and deduction as required or permitted by law, regulation, listing requirement or policy.
No Repricing Without Shareholder Approval: Subject to certaintax-related exceptions described in the 2017 Plan, in the case of termination of employment by reason of death, disability or normal or early retirement, or in the case of hardship or other special circumstances, of a participant who holds awards that are unearned, unvested or unexercisable, the Compensation Committee may, in its sole discretion, accelerate the time at which such awards are earned, vest or become exercisable. However, except in connection with a corporate transaction or event as described above with respect to adjustments, the terms of outstanding awards may not be amended to reduce the exercise price of outstanding options or SARs, or cancel outstanding options or SARs in exchange for cash, other awards or options or SARs with an exercise price that is less than the exercise price of the original option or SAR, without shareholder approval.
Amendment and Termination: We may, by action of the Board, amend or terminate the 2017 Plan. Any amendment which must be approved by our shareholders in order to comply with applicable law or the national securities exchange upon which our common shares are traded will not be effective until such approval is obtained. Any amendment or termination of the 2017 Plan will not impair in any material way the rights and obligations of the participants under any award that is outstanding without the written consent of the participant.
Governing Law: The 2017 Plan and all awards granted and actions taken thereunder will be governed by the internal substantive laws of the State of Ohio.
New Plan Benefits: It is not possible to determine specific amounts that may be awarded in the future under the 2017 Plan because grants of awards under the 2017 Plan are discretionary.
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TAX CONSEQUENCES TO PARTICIPANTS
The following is a brief summary of some of the U.S. federal income tax consequences of certain awards under the 2017 Plan based on U.S. federal income tax laws in effect on January 1, 2018. This summary, which is presented for the information of shareholders considering how to vote on this Proposal 4 and not for 2017 Plan participants, is not intended to be complete and does not describe federal taxes other than income taxes (such as Medicare and Social Security taxes, and Code Section 409A taxes), state, local or foreign tax consequences.
Non-qualified Stock Options: In general, (i) no income will be recognized by a participant at the time anon-qualified option right is granted; (ii) at the time of exercise of anon-qualified option right, ordinary income will be recognized by the optionee in an amount equal to the difference between the option price paid for the shares and the fair market value of the shares, if unrestricted, on the date of exercise; and (iii) at the time of sale of shares acquired pursuant to the exercise of anon-qualified option right, appreciation (or depreciation) in value of the shares after the date of exercise will be treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held.
Incentive Stock Options: No income generally will be recognized by a participant upon the grant or exercise of an incentive stock option (ISO). The exercise of an ISO, however, may result in alternative minimum tax liability. If common shares are issued to the optionee pursuant to the exercise of an ISO, and if no disqualifying disposition of such shares is made by the participant within two years after the date of grant or within one year after the transfer of such shares to the participant, then upon sale of such shares, any amount realized in excess of the option price will be taxed to the participant as a long-term capital gain and any loss sustained will be a long-term capital loss.
If common shares acquired upon the exercise of an ISO are disposed of prior to the expiration of either holding period described above, the participant generally will recognize ordinary income in the year of disqualifying disposition in an amount equal to the excess (if any) of the fair market value of such shares at the time of exercise (or, if less, the amount realized on the disposition of such shares if a sale or exchange) over the option price paid for such shares. Any
further gain (or loss) realized by the participant generally will be taxed as short-term or long-term capital gain (or loss) depending on the holding period.
Stock Appreciation Rights (SARs): No income will be recognized by a participant in connection with the grant of a SAR. When a SAR is exercised, the participant normally will be required to include as taxable ordinary income in the year of exercise an amount equal to the amount of cash received and the fair market value of any unrestricted common shares received on the exercise.
Restricted Shares: The recipient of restricted shares generally will be subject to tax at ordinary income rates on the fair market value of the restricted shares (reduced by any amount paid by the participant for such restricted shares) at such time as the shares are no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Code. However, a recipient who so elects under Section 83(b) of the Code within 30 days of the date of transfer of the shares will have taxable ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares (determined without regard to the restrictions) over the purchase price, if any, of such restricted shares. If a Code Section 83(b) election has not been made, any dividends received with respect to restricted shares that are subject to the restrictions generally will be treated as compensation that is taxable as ordinary income to the participant.
Restricted Stock Units (RSUs): Generally, the recipient of an RSU award will not recognize income on the grant date. When any part of an RSU award is paid (in the case of cash) or delivered (in the case of unrestricted common shares), the participant will have taxable ordinary income on such date of receipt in an amount equal to the cash or the fair market value of any unrestricted common shares received.
Performance Shares and Performance Units: No income generally will be recognized by a participant upon the grant of performance shares or performance units. Upon payment in respect of theearn-out of performance shares or performance units, the participant will have taxable ordinary income on the date of receipt in an amount equal to the amount of cash received and the fair market value of any unrestricted common shares received.
TAX CONSEQUENCES TO THE COMPANY OR SUBSIDIARY
To the extent that a participant recognizes ordinary income in the circumstances described above, we or our subsidiary for which the participant performs services will be entitled to a
corresponding income tax deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an “excess
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PROPOSAL 4: APPROVAL OF AMENDMENTS TO THE DIEBOLD NIXDORF, INCORPORATED 2017 EQUITY AND PERFORMANCE INCENTIVE PLAN |
parachute payment” within the meaning of Section 280G of the Code, and is not disallowed by the $1 million limitation on certain executive compensation to our covered employees under Section 162(m) of the Code (Section 162(m)).
The 2017 Plan was designed to permit the Company to deduct performance-based compensation under Section 162(m). Historically, Section 162(m) limited the annual tax deductibility of compensation paid to certain named executive officers disclosed in our proxy statement (Covered Employees) to $1 million per Covered Employee, unless the compensation qualified as Section 162(m) “performance-based” compensation.
For taxable years beginning on and after January 1, 2018, the Tax Cuts and Jobs Act of 2017 generally eliminated the
“performance-based” compensation exception under Section 162(m), and expanded the $1 million per Covered Employee annual limitation on deductibility to a larger group of named executive officers. In addition, the new tax law also provides that any named executive officer who was a Covered Employee in taxable years beginning on and after January 1, 2017, will continue to be a Covered Employee for all subsequent taxable years (including taxable years after his or her death). As a result, the Company may no longer take an annual deduction for any compensation paid to its expanded number of Covered Employees in excess of $1 million per Covered Employee, including compensation relating to awards under the 2017 Plan. The 2017 Plan, as amended, eliminates certain provisions to reflect this change in law.
We intend to file a Registration Statement on FormS-8 relating to the issuance of additional common shares under the 2017 Plan with the SEC pursuant to the Securities Act of
1933, as amended, as soon as practicable after approval of the amendments to the 2017 Plan by our shareholders.
EXISTING PLAN BENEFITS TO NAMED EXECUTIVE OFFICERS AND OTHERS
Although we cannot currently determine the benefits or number of shares subject to awards that may be granted to participants under the 2017 Plan during the remainder of the 2018 fiscal year or in future periods due to the discretionary nature of the 2017 Plan, we did award our annual equity grants for fiscal 2018 on February 1, 2018. The largest portion of our equity grants are typically made during this annual February
grant process, and if the proposed increase in shares available under the 2017 Plan had been in effect in February 2018, we believe that the awards granted to our executive officers and employees would not have been different. We also made broad-based awards to certain employees during 2017 under the 2017 Plan.
| 2018 PROXY STATEMENT | | 39 |
PROPOSAL 4: APPROVAL OF AMENDMENTS TO THE DIEBOLD NIXDORF, INCORPORATED 2017 EQUITY AND PERFORMANCE INCENTIVE PLAN |
The following table sets forth with respect to each named executive officer listed in the Summary Compensation Table on page 63 and each group listed below (i) the number of common shares issuable pursuant to performance units granted under the 2017 Plan, (ii) the number of common shares issuable pursuant to stock options granted under the 2017 Plan and (iii) the number of common shares issuable pursuant to RSUs awarded under the 2017 Plan, in each case since the 2017 Plan’s inception on April 26, 2017 through February 26, 2018 (without regard to whether any grants were subsequently forfeited, terminated or canceled). It does not include any grants made during this same period under any other compensation plans.
NAME AND POSITION
|
ESTIMATED POSSIBLE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS1 | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS2 (#)
| ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS3 (#)
| EXERCISE OR BASE PRICE OF OPTION AWARDS ($/SH)
| ||||||||||||||||||||||||||
THRESHOLD (#)
| TARGET (#)
| MAX. (#)
| ||||||||||||||||||||||||||||
Dr. Juergen Wunram
Senior Vice President and Chief Operating Officer |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,953
|
|
|
18.75
|
| ||||||||||||
|
—
|
|
|
—
|
|
|
—
|
|
|
26,717
|
|
|
—
|
|
|
—
|
| |||||||||||||
|
19,084
|
|
|
38,167
|
|
|
76,334
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||
Christopher A. Chapman Senior Vice President and Chief Financial Officer |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,572
|
|
|
18.75
|
| ||||||||||||
|
—
|
|
|
—
|
|
|
—
|
|
|
23,007
|
|
|
—
|
|
|
—
|
| |||||||||||||
|
16,434
|
|
|
32,867
|
|
|
65,734
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||
Jonathan B. Leiken Senior Vice President, Chief Legal Officer and Secretary |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,517
|
|
|
18.75
|
| ||||||||||||
|
—
|
|
|
—
|
|
| �� —
|
|
|
14,254
|
|
|
—
|
|
|
—
|
| |||||||||||||
|
10,182
|
|
|
20,363
|
|
|
40,726
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||
Dr. Ulrich Näher Senior Vice President, Systems |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,278
|
|
|
18.75
|
| ||||||||||||
|
—
|
|
|
—
|
|
|
—
|
|
|
17,603
|
|
|
—
|
|
|
—
|
| |||||||||||||
|
12,574
|
|
|
25,147
|
|
|
50,294
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||
Olaf Heyden Senior Vice President, Services |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,278
|
|
|
18.75
|
| ||||||||||||
|
—
|
|
|
—
|
|
|
—
|
|
|
17,603
|
|
|
—
|
|
|
—
|
| |||||||||||||
|
12,574
|
|
|
25,147
|
|
|
50,294
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||
All current executive officers as a group |
|
—
|
|
|
—
|
|
|
—
|
|
|
193,825
|
|
|
18.75
|
| |||||||||||||||
|
—
|
|
|
—
|
|
|
—
|
|
|
112,688
|
|
|
—
|
|
|
—
|
| |||||||||||||
|
80,492
|
|
|
160,983
|
|
|
321,966
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||
All currentnon-employee directors as a group
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56,804
|
|
|
—
|
|
|
—
|
| ||||||||||||
All employees, excluding current executive officers, as a group
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
153,920
|
|
|
18.75
|
| ||||||||||||
|
—
|
|
|
—
|
|
|
—
|
|
|
966,160
|
|
|
—
|
|
|
—
|
| |||||||||||||
|
237,583
|
|
|
475,165
|
|
|
950,330
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||
| 1 | These columns present information about performance-based shares awarded during 2017 and 2018 pursuant to the 2017 Plan. The payout of these performance-based shares will be determined based on the achievement of specific metrics calculated over a three-year performance period. |
| 2 | This column presents information about RSUs awards during 2017 and 2018 pursuant to the 2017 Plan. |
| 3 | All stock option grants in this column are new and were not granted in connection with an optionre-pricing transaction, and the terms of the stock options have not been materially modified. |
| 40 | | 2018 PROXY STATEMENT | |
PROPOSAL 4: APPROVAL OF AMENDMENTS TO THE DIEBOLD NIXDORF, INCORPORATED 2017 EQUITY AND PERFORMANCE INCENTIVE PLAN |
EQUITY COMPENSATION PLAN INFORMATION
The following table reflects information as of December 31, 2017 and pertains to our 1991 Plan and our current 2017 Plan:
PLAN CATEGORY
| NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (A)
| WEIGHTED-AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND
|
NUMBER OF SECURITIES REMAINING AVAILABLE FOR UNDER EQUITY PLANS (EXCLUDING SECURITIES REFLECTED
| |||||||||
Equity compensation plans approved by security holders
| ||||||||||||
Stock options
|
| 2,294,781
|
|
| $29.68
|
|
| N/A
|
| |||
Restricted stock units
|
| 1,278,959
|
|
| N/A
|
|
| N/A
|
| |||
Performance shares
|
| 2,500,734
|
|
| N/A
|
|
| N/A
|
| |||
Non-employee director deferred shares
|
| 125,800
|
|
| N/A
|
|
| N/A
|
| |||
Deferred compensation
|
| 815
|
|
| N/A
|
|
| N/A
|
| |||
Total
|
| 6,201,089
|
|
| $29.68
|
|
| 4,800,000
|
| |||
In column (b), the weighted-average exercise price is only applicable to options. In column (c), the number of securities remaining available for future issuance for stock options, restricted stock units, performance shares andnon-employee director deferred shares is approved in total and not individually.
VOTE REQUIRED TO APPROVE THE AMENDMENTS TO THE 2017 PLAN
A favorable vote of the majority of votes cast on the matter is necessary for approval of the amendments to the 2017 Plan. Abstentions are considered votes cast on the proposal, and therefore will have the effect of a vote “against” the proposal. Brokernon-votes will not be counted for determining whether the proposal is passed. If the amendments to the 2017 Plan are not approved by shareholders, the 2017 Plan will continue in effect under its current terms, and we will not have sufficient shares available to issue further grants of our common shares in future years beyond the remaining shares available for grants.
The Board recommends a voteFOR the approval of the amendments to the Diebold Nixdorf, Incorporated 2017 Equity and Performance Incentive Plan.
| 2018 PROXY STATEMENT | | 41 |
The Compensation Committee has reviewed and discussed with management the following "
The foregoing report was submitted by the Compensation Committee of the Board and shall not be deemed to be "soliciting material"“soliciting material” or to be "filed"“filed” with the SEC or subject to Regulation 14A promulgated by the SEC or Section 18 of the Exchange Act.
The Compensation Committee:
Phillip R. Cox, Chair
Dr. Dieter Düsedau
Rajesh K. Soin
Alan J. Weber
COMPENSATION DISCUSSION AND ANALYSIS
Our Compensation Committee, or the Committee, has oversight responsibility for the development and administration of our executive compensation policies and programs. This "
This past year, two of our NEOs departed. Andreas W. Mattes stepped down as our President and Chief Executive Officer on December 13, 2017, and Eckard Heidloff resigned from his position as President effective March 31, 2017. Both received payments in accordance with their respective separation
agreements which are summarized on page 76 of this Proxy Statement. Accordingly, certain tables and disclosures in thisCompensation Discussion and Analysis will exclude Messrs. Mattes and Heidloff because their compensation was determined by the terms of their agreements, rather than the Compensation Committee’s determination following ouryear-end performance results.
Mr. Christopher A. Chapman, our Senior Vice President and Chief Financial Officer, and Dr. Juergen Wunram, our Senior Vice President and Chief Operating Officer, served as InterimCo-Presidents andCo-CEOs of the Office of the Chief Executive from December 13, 2017 to February 21, 2018. Mr. Gerrard Schmid joined the Company as President and Chief Executive Officer on February 21, 2018.
| TITLE | ||
Dr. Juergen Wunram* | Senior Vice President and Chief | |
Christopher A. | Senior Vice President and Chief Financial Officer | |
Andreas W. Mattes | Former President and Chief Executive Officer | |
Jonathan B. Leiken | Senior Vice President, Chief Legal Officer | |
Dr. Ulrich Näher | Senior Vice President, | |
Olaf Heyden | Senior Vice President, | |
Eckard Heidloff | Former President |
| * | Dr. Wunram and |
| 42 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
To assist shareholders in finding important information, this "“Compensation Discussion and Analysis"Analysis” is organized as follows:
| PAGE | ||||
| EXECUTIVE SUMMARY | 43 | |||
43 | ||||
43 | ||||
45 | ||||
46 | ||||
2017 NEO Compensation Highlights – Target Compensation Structure | 48 | |||
49 | ||||
2017 NEO Compensation Highlights – Actual Earned Compensation | 49 | |||
| COMPENSATION DECISION PROCESS | 50 | |||
| Role of the Compensation Committee | 50 | |||
| 50 | ||||
| 51 | ||||
| 51 | ||||
| 52 | ||||
Determination of CEO and InterimCo-Presidents’ andCo-CEOs’Compensation | 52 | |||
| 52 | ||||
| 52 | ||||
| 53 | ||||
| 53 | ||||
| 54 | ||||
| 54 | ||||
| 55 | ||||
| PAGE | ||||
Long-Term | 55 | |||
| 56 | ||||
| 56 | ||||
| 56 | ||||
| 56 | ||||
| 56 | ||||
Long-Term Incentives – Performance-Based Cash Incentive Awards | 57 | |||
| 58 | ||||
| 58 | ||||
| 59 | ||||
| 59 | ||||
| 59 | ||||
| 60 | ||||
| 60 | ||||
| 61 | ||||
| OTHER COMPENSATION POLICIES | 61 | |||
| 61 | ||||
| 61 | ||||
| 61 | ||||
| 62 | ||||
| 62 | ||||
During 2017, Diebold Nixdorf launched the DN2020 integration and transformation program and realized more than $100 million of cost savings during the year. We continue to In the governance and compensation compensation 2015 Company HighlightsIn 2015, we continued2017 COMPANY HIGHLIGHTSexecutemake progress on our multi-year transformation, Diebold 2.0. Duringintegration, including compensation program adjustments and decisions to drive realization of those goals as quickly and efficiently as possible this past year. We rationalized the second halfmanufacturing footprint from a capacity of approximately 180,000 ATMs per year to approximately 100,000 ATMs per year and consolidated approximately 25% of service parts depots across the year, we moved from the "Crawl" phase into the "Walk" phase where we will focus on increasing the mix of revenue fromglobe. We introduced new mobility management services and softwarewon a number of retail contracts to modernize checkout solutions and shaping our portfolio. This past year we made several strategic decisions to reshape our portfolio, including the divestiture of our North America electronic security business and the successful acquisition and integration of Phoenix Interactive Design. These achievements are consistent with our strategy of transforming into a world-class, services-led, software-enabled company, supported by innovative hardware.implement omni-channel retailing.area,space, we eliminated all excise tax gross-upshave engaged in our historical change-in-control agreements, renegotiatedextensive shareholder outreach around executive compensation matters, particularly given the employment contract with our Chief Executive Officer and continued to examine and adjust our complexity of thearrangements following the Wincor Nixdorf acquisition. Those discussions are detailed below.structure and incentives to appropriately align our shareholders’ interests with those of our directors and officers. We also attracted new talent from top technology and services companies.
At our 2015 Say-on-Pay Vote and Shareholder Engagement2017SAY-ON-PAY VOTE AND SHAREHOLDER ENGAGEMENT2015 Annual Meeting2017 annual meeting of Shareholders,shareholders, the advisory vote to approve the executive compensation program for our NEOs received strongsolid support (97.0%(95.9% of votes cast). Management, representing a significant increase from the prior year. We value the input of our shareholders and are committed to maintaining a dialogue with portfolio managers, corporate governance and executive compensation professionals. In 2017, we contacted shareholders collectively representing more than 60% of our outstanding shares. Employees from our Human Resources, Investor Relations and Legal departments had extensive and meaningful dialogue with shareholders who collectively owned approximately 48% of our outstanding shares. The remaining shareholders we contacted indicated a meeting was not needed at this time. We also held meetings with two leading2018 PROXY STATEMENT | 43
EXECUTIVE COMPENSATION MATTERS |
proxy advisory firms, Institutional Shareholder Services Inc. and Glass Lewis & Co., to understand their views.
Shareholders and the Committee considered this strong supportproxy advisory firms provided varying levels of feedback related topay-for-performance alignment, incentive metrics, the clarity of our disclosure, the impact of the current pay structure by our shareholders in their compensation program discussions throughout 2015.
In addition to review and evaluate market trends and best practices in designing and implementing elements of our compensation program.
We view anon-going, constructive dialogue with our shareholders as critically important to ensuring that our disclosure provides the necessary transparency for them to make proper investment decisions. Engagement with our shareholders helps us better understand how they view the company, their expectations for our performance, and identify issues that may affect our strategies, corporate governance, valuation and other aspects of our operations.
| 44 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
We maintain WHAT WE DO WHAT WE DON’T DO/DON’T ALLOW Set stock ownership guidelines for executives and directors. No hedging or pledging of our stock by executives or directors. Prescribe an annual limit on equity compensation for No dividends paid on unearned performance-based shares. Review tally sheets for Nochange-in-control severance multiple in excess of two times salary and target cash bonus. Disclose performance goals for incentive payments. No excise taxgross-ups upon a change in control. Set maximum payout caps on our annual and long-term incentives. Nore-pricing or cash buyout of underwater stock options. Pay for performance with 87% of our Chief Executive Officer’s target total pay opportunity being performance-based “at risk” compensation. No enhanced retirement formulas. Provide a minimum vesting period of at least one year for at least 95% of our equity awards. No market timing with granting of equity awards. Cap performance share payments if three-year shareholder return is negative, regardless of our ranking. Limit perquisites and other benefits, and do not include income taxgross-ups (except for relocation expenses). Hire an independent consultant reporting directly to the Committee. Through the Committee’s independent consultant, engage in an ongoing assessment of our compensation practices against the market, our competition, and other applicable metrics. Incorporate general cash severance andchange-in-control provisions that are consistent with market practice, including double-trigger requirements for certainchange-in-control protection. Perform an annual compensation risk assessment. Enforce strict insider trading policies, incentive plan clawback policies, andblack-out periods for executives and directors.Executive Compensation Best PracticesEXECUTIVE COMPENSATION BEST PRACTICES"best practice"“best practice” executive compensation governance standards. Some of our following guidelines and policies are described in more detail below under "“Other Compensation Policies"Policies” or elsewhere in this "“Compensation Discussion and Analysis"Analysis”:What We DoWhat We Don’t Do/Don’t Allow
x
Review tally sheetsexecutives.our directors.x
Disclose performance goalsincentive payments.executives.x xNo excise tax gross-ups upon a change in control. Pay for performance with 84% of our Chief Executive Officer’s total pay opportunity being performance-based "at risk" target compensation.x xNo enhanced retirement formulas.xNo market timing with granting of equity awards. Hire an independent consultant reporting directly to the Committee. 2018 PROXY STATEMENT | 45
EXECUTIVE COMPENSATION MATTERS |
Our executive pay program is specifically designed to:Our Compensation StrategyOUR COMPENSATION STRATEGY
Our 20152017 executive compensation structure consists of three primary components: base salary, annual cash bonus, and long-term equity incentives. Within the long-term incentive ("LTI")(LTI) component, we utilize a mix of programs for senior leadership. In 2017, as shown below. Ourdiscussed later in this Proxy Statement, we madeone-time performance-based synergy grants to incentivize accelerated cost savings following the Wincor Nixdorf transaction. We also provided legacy Wincor Nixdorf employees, including those who are NEOs, with aone-time offer to receive performance-based cash incentive awards contingent upon cancellation of their outstanding Wincor Nixdorf stock options. Without the employee’s agreement to cancel the outstanding Wincor Nixdorf stock options, they would remain in place and be payable based on the Wincor Nixdorf stock price until the stock options expire or lapse. These grants do not represent new value, but rather an exchange of value of the Wincor Nixdorf option grants for new grants under our annual cash bonus plan to align incentives of the newly combined business. These awards are described in more detail below under“Long-Term Incentives—Performance-Based Cash Incentive Awards.” Apart from these uniqueone-time grants, our target compensation structure for senior leadership is as follows:
As provided in more detail below, we generally target total compensation opportunity at or near thesize-adjusted 50th 50th percentile of our compensation peer group (for more detail on our peer group, see "
| 46 | | 2018 PROXY STATEMENT | |
Total Compensation Opportunity Base Salary Annual Cash Bonus Long-Term Equity Incentives 50% Performance-Based Shares 30% Stock Options 20% Restricted Stock Units
EXECUTIVE COMPENSATION MATTERS |
The following table summarizes key elements of our 20152017 executive compensation program:1
ELEMENT | PRIMARY PURPOSE | KEY CHARACTERISTICS | ||
Base Salary | To compensate the executive fairly and competitively | Fixed | ||
Annual Cash Bonus | To motivate and reward organizational and individual achievement of annual strategic financial and individual objectives. Our plan is intended to appropriately motivate the behaviors and performance results needed to accomplish our strategic | Variable compensation component. The Corporate Goals (80%) Corporatenon-GAAP Operating Profit (50%) Corporate Free Cash Flow (30%) Individual Business Goals (20%) Key Initiatives Performance Gate: A minimum level of corporatenon-GAAP Operating Profit performance is required to earn any bonus. | ||
Long-Term Equity Incentives (LTI) | To align executives’ and shareholders’ interests, to reinforce long-term value creation, and to provide a balanced portfolio oflong-term incentive opportunity. | Variable compensation component. Reviewed and granted annually. | ||
Performance-Based Shares | To motivate the appropriate behaviors to provide superior TSR and strong operational performance over the long term. | Cumulative three-year TSR relative to S&P 400Mid-Cap Index For Mr. Mattes, 50% based on the above TSR and 50% | ||
Stock Options | ||||
| To motivate the appropriate behaviors to increase shareholder value above the exercise price. | Stock price growth above the exercise price. Subject to three-year ratable | |||
Restricted Stock Units (RSUs) | To motivate the appropriate behaviors to increase shareholder value and promote a base-level of executive retention. | Stock price growth. Subject to three-year | ||
Performance-Based Synergy Grants | To incentivize the accelerated achievement of cost reductions and scale efficiencies made possible by our business combination with Wincor Nixdorf. | One-time variable compensation based on level of achievement of synergy savings, including realized cost reductions, elimination of cost and scale efficiencies; implemented in response to comments received during 2016 shareholder outreach campaign. Our CEO was excluded from thisone-time grant. | ||
Performance-Based Cash Incentive Awards | To align the legacy Wincor Nixdorf employees with achieving our company-wide goals. | One-time variable compensation component based on our stock price; grant was contingent on cancellation of Wincor Nixdorf outstanding options; represents an exchange of existing value to align management incentives for the newly combined business. | ||
Health/Welfare Plan and Retirement Benefits | To provide competitive benefits promoting employee health and productivity and support financial security. | Fixed compensation component. | ||
Limited Perquisites and Other Benefits | To provide limited | Fixed compensation component. | ||
Change-in-Control Protection | To retain executives and provide management continuity in event of actual or threatenedchange-in-control and to bridge future employment if terminated following achange-in-control of the Company. | Fixed compensation component; only paid in the event the executive’s employment is terminated following achange-in-control of the Company. | ||
Severance Protection | To bridge future employment if terminated other than | Fixed compensation component; only paid in the event the executive’s employment is terminated other than | ||
| |||
| 2018 PROXY STATEMENT | | |||
EXECUTIVE COMPENSATION MATTERS |
2017 NEO COMPENSATION HIGHLIGHTS—TARGET COMPENSATION STRUCTURE
PAY COMPONENT | SUMMARY | |
Target Total Compensation Opportunity | Based on a review of • Dr. Wunram: Increased base salary from€500,000 to€535,000 and increased long-term incentive opportunity from 100% of salary to 200% of salary in order to align the compensation with the competitive US market for the newly combined business and to maintain internal equity for management of the combined business. No change to target bonus. • Mr. Chapman: Increased base salary from $500,000 to $575,000 to move
| |
• Mr. Leiken: Increased base salary from $440,000 to combined business. No change to target bonus. 50% performance-based shares, 30% stock options, and 20% RSUs.• • Mr. Heyden: Increased base salary from€430,000 to€470,000 and increased long-term incentive opportunity from 100% of salary to 150% of salary in order to align the compensation with the competitive US market for the newly combined business and to maintain internal equity for management of the combined business. No change to target bonus. • Our 2017 long-term incentive value mix was |
In summary, the NEOs had the following total compensation structure for 2017:
NAME
| SALARY
|
TARGET BONUS (% OF SALARY)
|
TARGET LTI (% OF SALARY)
| ||||||||||||
Dr. Juergen Wunram
|
€
|
535,000
|
|
|
100
|
%
|
| 200
| %
| ||||||
Christopher A. Chapman
| $
| 575,000
|
|
| 100
| %
|
| 200
| %
| ||||||
Andreas W. Mattes
| $
| 937,500
|
|
| 140
| %
|
| 500
| %
| ||||||
Jonathan B. Leiken
| $
| 475,000
|
|
| 100
| %
|
| 150
| %
| ||||||
Dr. Ulrich Näher
| €
| 470,000
|
|
| 100
| %
|
| 150
| %
| ||||||
Olaf Heyden
| €
| 470,000
|
|
| 100
| %
|
| 150
| %
| ||||||
Eckard Heidloff
| €
| 700,000
|
|
| 100
| %
|
| 100
| %
| ||||||
| 48 | | 2018 PROXY STATEMENT | |
| Name | Salary1 | Target Annual Cash Bonus (% of Salary) | Target LTI (% of Salary) |
| Andreas W. Mattes | $937,500 | 140% | 400% |
| Christopher A. Chapman | $400,000 | 100% | 175% |
| Jonathan B. Leiken | $400,000 | 100% | 100% |
| Stefan E. Merz | $375,000 | 80% | 100% |
| Sheila M. Rutt | $350,000 | 75% | 100% |
| George S. Mayes, Jr. | $550,000 | 85% | 250% |
2017 NEO COMPENSATION HIGHLIGHTS—ACTUAL EARNED COMPENSATION
The below table represents the Committee’s view of the compensation actually earned and paid to the NEOs in 2017. Due to their departures during the fiscal year 2017, we are not presenting this information with respect to Messrs. Heidloff and Mattes.
EARNED VS. TARGETED COMPENSATION—2017*
| |||||||||||||||||||||||||
NAME
| ANNUAL SALARY
| BONUS
| LONG TERM INCENTIVE
| TOTAL EARNED COMPENSATION
|
% OF TARGET COMPENSATION RECEIVED
| ||||||||||||||||||||
Dr. Juergen Wunram**
| €
| 535,000
|
| €
| 214,000
|
| $
| 53,891
|
| $
| 887,251
|
|
| 39
| %
| ||||||||||
Christopher A. Chapman
| $
| 575,000
|
| $
| 230,000
|
| $
| 327,155
|
| $
| 1,132,155
|
|
| 49
| %
| ||||||||||
Jonathan B. Leiken
| $
| 475,000
|
| $
| 190,000
|
| $
| 271,489
|
| $
| 936,489
|
|
| 56
| %
| ||||||||||
Dr. Ulrich Näher**
| €
| 470,000
|
| €
| 188,000
|
| $
| 35,502
|
| $
| 767,612
|
|
| 44
| %
| ||||||||||
Olaf Heyden**
| €
| 470,000
|
| €
| 188,000
|
| $
| 35,502
|
| $
| 767,612
|
|
| 44
| %
| ||||||||||
| * | This chart compares earned compensation in 2017 vs. the intended target at grant date. It includes earned and targeted values for 2017 base salary, 2017 annual bonus, and long-term incentives with scheduled vesting in 2017. |
| ** | “Total Earned Compensation” calculated using the exchange rate for Euros to U.S. dollars in effect on the grant date of 1.07048 for the bonus and the average exchange rate for 2017 of 1.12949 for the base salary. |
| 2018 PROXY STATEMENT | | 49 |
LTI Target 68% Salary 13% Target Bonus 19% LTI Target 44% Salary 28% Target Bonus 28% Fixed 13% At Risk" CompensationRisk 87% Fixed 28% At Risk 72%
EXECUTIVE COMPENSATION MATTERS |
The following incentive compensation payouts for 2017 performance were approved, each discussed further in “2017 Compensation Elements” below:
PAY COMPONENT
|
COMMENTS
| |||||||||
Annual Cash Bonus |
Based on the Committee’s assessment of the Annual Cash Bonus Plan goals, including both financial and individual performance (against personalized Key Initiatives), the Committee approved the following cash bonus payments:
| |||||||||
NAME
| EARNED BONUS
| % OF TARGET
| ||||||||
Dr. Juergen Wunram
|
€214,000
|
40%
| ||||||||
Christopher A. Chapman
|
$230,000
|
40%
| ||||||||
Jonathan B. Leiken
|
$190,000
|
40%
| ||||||||
Dr. Ulrich Näher
|
€188,000
|
40%
| ||||||||
Olaf Heyden
|
€188,000
|
40%
| ||||||||
Financial targets were approved by the Committee in the first quarter of 2017. At the February 2018 Committee meeting, the Committee approved the following: • Financial targets: Below threshold achievement for thenon-GAAP operating profit and free cash flow • Individual business initiatives: Achievement at maximum. The Committee’s final performance assessment is discussed in more detail in the Annual Cash Bonus Plan section of “2017 Compensation Elements” below. |
 LTI Completed Performance Periods Performance-Based Shares |  | At the February 2018 Committee meeting, the Committee approved the following for the completed 2015-2017 performance share grant: • Payout of 40.7% of target, based on achieving $859.5 million of three-year cumulativenon-GAAP adjusted EBITDA, or 81.4% of the target. Our three-year TSR ranking was below the 30th percentile threshold requirement against the S&P 400 Midcap Index companies and so there was no payout on that portion of the award. |
The Committee is responsible to our Board for oversight of our executive compensation 2015 NEO Compensation Highlights - Actual Earned Incentive CompensationThe Committee approved the following incentive compensation payouts in 2015, each discussed further in "ROLE OF THE COMPENSATION COMMITTEE2015 Compensation Elements" below:Pay Component Comments Annual Cash Bonus Based on the Committee’s assessment of the Annual Cash Bonus Plan goals, including both financial and individual performance (against personalized Key Initiatives), the Committee approved the following annual cash bonus payments (based on salaries in effect on December 31, 2015); Name Earned Annual Cash Bonus % of Target Andreas W. Mattes $459,375 35% Christopher A. Chapman $180,000 40% Jonathan B. Leiken $160,000 40% Stefan E. Merz $128,000 40% Sheila M. Rutt $91,875 35% George S. Mayes, Jr. $54,542112% 1 Mr. Mayes was employed through July 24, 2015, and this payment represents a pro-rata payment based on the number of months employed during the performance period including Key Initiatives achieved at target. Financial targets were approved by the Committee at the beginning of 2015. At the February 2016 Committee meeting, the Committee approved no performance achievement against 2015 financial targets. The approved performance achievement levels for Key Initiatives varied by NEO. The final performance assessment is discussed in more detail in the Annual Cash Bonus Plan section of "2015 Compensation Elements" below. Performance-based Shares Grant covering the 2013-2015 performance period• Mr. Mattes: He joined the Company on June 6, 2013. His performance share grant covers the period June 6, 2013 through December 31, 2015. Our relative TSR ranking for the period was 39th percentile against both the custom peer group and the S&P 400 Midcap Index companies, resulting in a payout at 64% of the original target incentive amount. Mr. Mattes earned a payment of 23,702 Diebold shares.• Other NEOs: Performance was measured from January 1, 2013 through December 31, 2015. Our relative TSR ranking for the period was 43rd percentile vs. the custom peer group and 32nd percentile vs. the S&P 400 Midcap Index companies, resulting in a payout of 39% of the original target incentive amount. The actual number of earned Diebold shares varies by NEO.Special performance-based transformation grant• We did not achieve the minimum performance threshold of non-GAAP EPS of $1.85. Therefore, no payment was earned by any NEO for the 2015 portion of the award.Compensation Decision ProcessRole of the Compensation Committeeprograms.program. The Committee consists of independent directors and is responsible for the review and approval of all aspects of our program. Among its duties, the Committee is responsible for:
annual cash bonus, LTI award opportunities and payouts, and retention programs. |
Following review and discussion, the Committee submits recommendations to the Board for ratification. The Committee is supported in its work by the Chief Human ResourcesPeople Officer and staff and an independent compensation consultant, discussed in "
above.
The Committee retains an independent compensation consultant, Aon Hewitt, in accordance with the Committee’s charter. The consultant reports directly to the Committee. The Committee retains sole authority to hire or terminate Aon
| 50 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
Hewitt, approve its compensation, determine the nature and scope of services, and evaluate performance. A representative of Aon Hewitt attends Committee meetings, as requested, and communicates with the Committee Chair between meetings. The Committee makes all final decisions.
Aon Hewitt’s specific compensation consultation roles include, but are not limited to, the following:
| • | Reviewing and commenting on proxy disclosure items, including the “Compensation Discussion and Analysis;” |
In 2015,2017, the professional fees for the executive compensation services were approximately $343,000.$260,000. In addition to Aon Hewitt’s executive compensation services for the Committee, management retained Aon Hewitt for unrelated services, including brokerage services for insurance products. Professional fees for these unrelated services were approximately $539,000$665,000 in 2015, and the2017. The Board and Compensation Committee considered and approved these additional brokerage services, which were aware of the services.awarded following a competitive process. We have separate relationships with each of the service teams, and the executive compensation service team does not perform any other services on behalf of Diebold.
The Committee assessed the independence of Aon Hewitt, as required under NYSE listing rules. The Committee also considered and assessed all relevant factors, including but not limited to those set forth inSection 240.10C-1(b)(4)(i) through (vi) under the Exchange Act, that could give rise to a potential conflict of interest with respect to Aon Hewitt. Based on this
review, the Committee determined there are no conflicts of interest raised by the work performed by Aon Hewitt.
Our Chief Role of ManagementROLE OF MANAGEMENTHuman ResourcesPeople Officer serves as management’s primary contact with the Committee and attends all Committee meetings. For executives other than the CEO position, our CEO and Chief Human ResourcesPeople Officer make pay recommendations to the Committee based on market pay comparisons and an analysis of each executives’executive’s individual performance. No member of our management team, including the CEO, has a role in making pay recommendations to the Committee for his or her own position.
Annually, the Committee reviews competitive total compensation market data provided by Aon Hewitt. To assess competitive pay levels, the Committee first annually reviews and approves our peer group composition. The following peer group criteria are considered:Role of Peer Companies and Competitive Market DataROLE OF PEER COMPANIES AND COMPETITIVE MARKET DATA-32-
| 2018 PROXY STATEMENT | | 51 |
EXECUTIVE COMPENSATION MATTERS |
In February 2017, the Committee reviewed competitive pay data prepared by Aon Hewitt to assist with 2017 compensation decisions. During the fall of 2016, the Committee approved the following peer companies:
Alliance Data Systems Corp. | Harris Corp. | Netapp Inc. | ||
Benchmark Electronics Inc. | Juniper Networks, Inc. | Pitney-Bowes Inc. | ||
Computer Sciences | Lexmark International Inc. | Unisys Corp. | ||
Convergys Corp. | Logitech International SA | Western Union Company (The) | ||
DST Systems | Motorola Solutions, Inc. | Zebra Technologies Corp. | ||
Global Payments Inc. | ||||
NCR Corp. | ||||
Note: Compensation market values were stress tested to determine the impact, if any, of companies with larger market capitalization. The impact was immaterial.
The average and median annualized revenues for the peer companies were $3.4B$4.7B and $2.7B,$3.7B, respectively, atwhen the time ofCommittee approved the October 2014 study. Diebold’s 2014peer group. The projected annual revenues for the newly combined business were approximately $3B$5B, which was used to developsize-adjusted market values through regression analysis for each study position.analysis. Thesize-adjusted 50th 50th percentile for total compensation is a key reference point for the Committee. For executive positions where peer company proxy data is not available, Aon Hewitt utilized published and private compensation survey sources.
Pay recommendations for our executives, including the NEOs, are typically made by the Committee at its first scheduled meeting of the year, normally held in late January or early February. This meeting is normally held around the same time we report our fourth quarter andyear-end financial results for the preceding fiscal year and provide our financial guidance for the upcoming year. This timing allows the Committee to have a complete financial performance picture prior to making compensation decisions. Decisions with respect to prior year performance, performance for other relevant periods and any resulting award payouts, as well as annual equity awards, base salary increases and target performance levels for the current year and beyond, are also typically made at this meeting. The exceptions to this timing are awards to executives who are promoted or hired from outside the Company during the year. These executives may receive salary increases or equity awards effective or dated, as applicable, as of the date of their promotion or hire.Timing of Compensation DecisionsTIMING OF COMPENSATION DECISIONSFurther, any equityEquity awards recommendedapproved by the Committee at this meeting are then reviewed by the Board and, if approved, are generally dated as of the date of the Board meeting held the following day. As such, the Committee does not time the grants of options or any other equity incentives to the release of materialnon-public information.-33-
At the February Committee meeting, in executive session without management present, the Committee reviews and evaluates CEO performance and determines achievement level for the prior fiscal year. The Committee also reviews competitive compensation In light of Mr. Chapman’s and Dr. Wunram’s service as InterimCo-Presidents andCo-CEOs, the Board reviewed the performance of these NEOs in executive session and made determinations as to compensation for the interim service at that time. Each of Mr. Chapman and Dr. Wunram received a stipend of $10,000 per month for each month (or portion thereof) that they served as InterimCo-Presidents andCo-CEOs. The Committee approved this compensation structure with the assistance of Aon Hewitt’s research of competitive market practice for similar situations and management’s assessment of the proper internal alignment. Base salary compensates the executive fairly and competitively for the responsibility level of the position. The Committee reviews the salaries of our executive officers annually against competitive market data. Salary adjustments result primarily from a combination of competitive market data, individual and company performance, internal equity considerations, promotions, and the executive’s specific responsibilities.Determination ofDETERMINATION OF CEO CompensationAND INTERIMCO-PRESIDENTS’ ANDCO-CEOS’ COMPENSATIONdata.data for the peer companies. The Committee presents pay recommendations for the CEO to the independent members of the Board. During executive session, the Board conducts its own review and evaluation of the CEO’s performance taking into consideration the recommendations of the Committee.2015 Compensation ElementsBase SalaryBASE SALARY52 | 2018 PROXY STATEMENT
EXECUTIVE COMPENSATION MATTERS |
For 2015,2017, the Committee reviewed competitive market data and individual performance assessments for the NEOs and approved the following base salary changesvalues at the February 20152017 Committee meeting:
| Name | 2014 Salary | 2015 Salary |
| Andreas W. Mattes | $852,500 | $937,500 |
| Christopher A. Chapman | $330,000 | $400,0001 |
| Jonathan B. Leiken | $400,000 | $400,000 |
| Stefan E. Merz | $325,000 | $375,0001 |
| Sheila M. Rutt | $338,778 | $350,000 |
| George S. Mayes, Jr. | $550,000 | $550,000 |
NAME
| 2016 SALARY
| 2017 SALARY
| ||||||
Dr. Juergen Wunram
|
€
|
500,000
|
|
€
|
535,000
|
| ||
Christopher A. Chapman
|
$
|
500,000
|
|
$
|
575,000
|
| ||
Andreas W. Mattes
|
$
|
937,500
|
|
$
|
937,500
|
| ||
Jonathan B. Leiken
|
$
|
440,000
|
|
$
|
475,000
|
| ||
Dr. Ulrich Näher
|
€
|
430,000
|
|
€
|
470,000
|
| ||
Olaf Heyden
|
€
|
430,000
|
|
€
|
470,000
|
| ||
Eckard Heidloff
|
€
|
700,000
|
|
€
|
700,000
|
| ||
The rationale for approved 20152017 compensation actions is summarized in the table "
Increases reflect adjustments made to NEO salaries to bring salary levels more in line with the market median. Mr. Chapman’s base salary still falls below the median of the peer group, due in part to his being new to the role (promoted in 2014). 2015 salary levels for all others are in line with the peer group median.
The NEOs arewere eligible to earn cash incentives for 2017 under our Annual Cash Bonus Plan, which was approved by shareholders in 2015. Performance measures include corporate, business unit and individual performance againstpre-determined performance objectives approved by the Committee at the beginning of the fiscal year.
For Target Opportunitiesopportunities: Individual NEO targets (as a percent of base salary) are approved by the Committee at the beginning of the fiscal year. Actual cash bonuses may range from 0% to 200% of target (generally 40% of target is earned at threshold performance, 100% of target is earned asat target performance, and 200% of target is earned at maximum performance).-34-2015,2017, the Committee reviewed competitive market data and individual performance assessments for the following NEOs and approved the following target bonus levels in February 2015, and increased those targets for Messrs. Chapman and Merz in October 2015 in connection with their salary increases:2017:Name Target
Incentive
(% of Salary)1Threshold Incentive
($)Target
Incentive
($)Maximum Incentive
($)Target Incentive as a % of Target Total Comp Opportunity Andreas W. Mattes 140% $562,500 $1,312,500 $2,625,000 22% Christopher A. Chapman 100% $180,000 $450,000 $900,000 27% Jonathan B. Leiken 100% $160,000 $400,000 $800,000 33% Stefan E. Merz 80% $140,000 $320,000 $640,000 29% Sheila M. Rutt 75% $122,500 $262,500 $525,000 27% George S. Mayes, Jr. 85% $187,000 $467,500 $935,000 20%
NAME
| TARGET INCENTIVE (% OF
| THRESHOLD INCENTIVE
| TARGET INCENTIVE
| MAXIMUM INCENTIVE
| TARGET INCENTIVE AS A % OF TARGET
| ||||||||||||||||||||
Dr. Juergen Wunram
|
|
100
|
%
|
€
|
214,000
|
|
€
|
535,000
|
|
€
|
1,070,000
|
|
|
25
|
%
| ||||||||||
Christopher A. Chapman
|
|
100
|
%
|
$
|
230,000
|
|
$
|
575,000
|
|
$
|
1,150,000
|
|
|
25
|
%
| ||||||||||
Andreas W. Mattes
|
|
140
|
%
|
$
|
562,500
|
|
$
|
1,312,500
|
|
$
|
2,625,000
|
|
|
19
|
%
| ||||||||||
Jonathan B. Leiken
|
|
100
|
%
|
$
|
190,000
|
|
$
|
475,000
|
|
$
|
950,000
|
|
|
29
|
%
| ||||||||||
Dr. Ulrich Näher
|
|
100
|
%
|
€
|
188,000
|
|
€
|
470,000
|
|
€
|
940,000
|
|
|
29
|
%
| ||||||||||
Olaf Heyden
|
|
100
|
%
|
€
|
188,000
|
|
€
|
470,000
|
|
€
|
940,000
|
|
|
29
|
%
| ||||||||||
Eckard Heidloff
|
|
100
|
%
|
€
|
280,000
|
|
€
|
700,000
|
|
€
|
1,400,000
|
|
|
33
|
%
| ||||||||||
| 2018 PROXY STATEMENT | | 53 |
EXECUTIVE COMPENSATION MATTERS |
ANNUAL CASH BONUS PLAN FOR NEOs PERFORMANCE MEASURE ORGANIZATIONAL LEVEL WEIGHTING THRESHOLD1 (40% PAYOUT) TARGET1 (100% PAYOUT) MAX1 (200% PAYOUT) ACTUAL ACHIEVED PAYOUT AS OP FCF Key Business Initiatives Financial Performance Metricsperformance metrics: For 2015, to support the second year of our multi-year business transformation related to Diebold 2.0,2017, the Committee approved Corporate and Regional non-GAAP Operating Profit ("OP")(OP) and Corporate Free Cash Flow ("FCF")excluding certain transaction-related expenses (FCF) as the financial performance metrics and Key Business Initiatives specific to each NEO as the individual performance metrics. The Committee also approved a minimum performance level requirement for OP of $150 million,$200M, below which no bonuses would be paid, regardless of the performance level attained for FCF, Corporate OP or individual Key Business Initiatives. Neithernon-GAAPAnnual Cash Bonus Plan for NEOs, Except Mr. Mayes Performance MeasureOrganizational Level Weighting Threshold2(40% of target payout)Target2(100% payout)Maximum2 (200% payout)Actual Achieved Payout as % of Target OP Corporate 50% $162 $190 $219 $161 0% FCF Corporate 30% $105 $130 $155 ($18) 0% Key Initiatives Individual 20% varies varies varies varies varies Annual Cash Bonus Plan for Mr. Mayes1Performance Measure Organizational Level Weighting Threshold2Target2Maximum2Actual Achieved1Payout as % of Target1OP Corporate 15% $162 $190 $219 $161 N/A OP – North America Regional 35% $294.5 $310 $325 $281 N/A FCF Corporate 30% $105 $130 $155 ($18) N/A Key Initiatives Individual 20% varies varies varies 100% 100% OP nor FCF was achieved at or above threshold, and so there was no payment for this portion of the award.
% OF TARGET Corporate 50 % $285M $355M $425M $224M 0 % Corporate 30 % $ 80M $100M $120M $(32M) 0 % Individual 20 % varies varies varies varies varies 1 Mr. Mayes’ position was eliminated on July 24, 2015. Pursuant to Mr. Mayes’ separation agreement, his annual cash bonus was pro-rated and includes a target level of individual Key Initiatives performance.2Payment opportunities are extrapolated between threshold, target, and maximum performance -- performance—0% payout below threshold. Dollars are shown in millions.-35-
NAME KEY BUSINESS INITIATIVE CATEGORIES (20% WEIGHTING)1 Dr. Juergen Wunram • Deliver on specific financial commitments • Business integration • Management integration related to retail and AEVI segments Christopher A. Chapman • Deliver on specific financial commitments • Capital allocation strategies • Information technology initiatives • Working capital optimization Jonathan B. Leiken • Ethics and compliance enhancements • Successful completion of specific strategic projects • Successful fulfillment of specific legal requirements Olaf Heyden • Deliver on specific financial commitments • Achievement of financial goals related to services line of business Dr. Ulrich Näher • Deliver on specific financial commitments • Achievement of financial goals related to systems line of business • Successful management of operations and research and development integration • Deliver effective leadership across systems line of business and regional matrixKey Business Initiative Performance Metricsperformance metrics: For 2015,2017, the Committee approved Key Business Initiatives specific to each NEO. These Key Initiatives are intended to drive strategic and operating results. Similar to the Committee’s assessment of financial performance, the Committee’s assessment of Key Business Initiative performance generally excludesnon-recurring/extraordinary items.1 We did not include Mr. Mattes’ Key Business Initiatives because his employment and separation agreements governed the terms for his 2017 annual cash bonus payment. Please refer to “Payments and Benefits in Connection with Mr. Mattes’ Separation” for that discussion. 54 | 2018 PROXY STATEMENT
EXECUTIVE COMPENSATION MATTERS |
The Committee reviewed Key Business Initiative performance assessments prepared for each of the NEOs.
Each NEO listed below performed well above their stated objectives for the year. Key Business Initiatives varied by NEO, but the Board’s over-arching objective for the newly combined management team was the successful integration of global personnel and business strategies. After thorough review of individual performance achievement and our global scorecard for the combined entity for the year, the Committee approved maximum payouts for this portion of the Annual Cash Bonus Plan.
KEY BUSINESS INITIATIVE PERFORMANCE
NAME | AMOUNT EARNED | ||||
Dr. Juergen Wunram | € | 214,000 | |||
Christopher A. Chapman | $ | 230,000 | |||
Jonathan B. Leiken | $ | 190,000 | |||
Dr. Ulrich Näher | € | 188,000 | |||
Olaf Heyden | € | 188,000 | |||
earned:20152017 Actual Bonuses Earned:Earned: Based on the Committee’s assessment of financial and individual performance according to the tables above, the following summarizes actual bonuses earned, based solely on achievement of Key Initiatives and on salaries in effect on December 31, 2015:
NAME
| 2017 ACTUAL BONUS
| 2017 TARGET BONUS
| ACTUAL AS % OF TARGET
| ||||||||||||
Dr. Juergen Wunram
| €
| 214,000
|
| €
| 535,000
|
|
| 40
| %
| ||||||
Christopher A. Chapman
| $
| 230,000
|
| $
| 575,000
|
|
| 40
| %
| ||||||
Jonathan B. Leiken
| $
| 190,000
|
| $
| 475,000
|
|
| 40
| %
| ||||||
Dr. Ulrich Näher
| €
| 188,000
|
| €
| 470,000
|
|
| 40
| %
| ||||||
Olaf Heyden
| €
| 188,000
|
| €
| 470,000
|
|
| 40
| %
| ||||||
| Name | 2015 Actual Bonus | 2015 Target Bonus | Actual as % of Target |
| Andreas W. Mattes | $459,375 | $1,312,500 | 35% |
| Christopher A. Chapman | $180,000 | $450,000 | 40% |
| Jonathan B. Leiken | $160,000 | $400,000 | 40% |
| Stefan E. Merz | $128,000 | $320,000 | 40% |
| Sheila M. Rutt | $91,875 | $262,500 | 35% |
George S. Mayes, Jr.1 | $54,542 | $467,500 | 12% |
1 For explanation of compensation treatment upon Mr. Mayes’ employment termination, see "Payments and Benefits in connection with Mr. Mayes’ Separation" below. | |||
Our regular annual LTI grants to NEOs include a value mix of performance-based shares (50%), stock options (30%), and RSUs (20%), as discussed above To determine annual grant levels for Long-Term Incentives—2015 Regular Annual GrantsLONG-TERM INCENTIVES—2017 REGULAR ANNUAL GRANTSin 2015in“2017 NEO Compensation Highlights – Highlights—Target Compensation Structure.” These awards are subject to our other compensation policies generally, such as our Clawback Policy, as discussed in "“Other Compensation Policies"Policies” below.theour NEOs, the Committee considers competitive market data, individual performance, potential future contributions to our business, internal equity, competitive market values, and management’s recommendations. The Committee approves long-term incentive grants at its first regular meeting of the regular February Committee meeting,year, and actual grants are generally made effective on the day of the February Board Meeting. The Committee adjusted target LTI for some of the NEOs to be competitive at the 50th percentile for the larger newly-combined organization.2018 PROXY STATEMENT | 55
EXECUTIVE COMPENSATION MATTERS |
The following table summarizes 20152017 targeted LTI values for our NEOs in accordance with our customaryregular annual LTI grant cycleprogram excluding the synergy grants and excluding certain grants made to Mr. Mattes in connection with the Transformation Grant and grants made to complete the targeted 2014 LTI value:
| Name | Salary | Target LTI (% of Salary) | Approximate Target LTI Value1 | % of Target Total Comp |
| Andreas W. Mattes | $937,500 | 400% | $3,750,000 | 62% |
| Christopher A. Chapman | $400,000 | 175% | $700,000 | 47% |
| Jonathan B. Leiken | $400,000 | 100% | $400,000 | 33% |
| Stephan E. Merz | $375,000 | 100% | $375,000 | 36% |
| Sheila M. Rutt | $350,000 | 100% | $350,000 | 36% |
| George S. Mayes, Jr. | $550,000 | 250% | $1,375,000 | 58% |
NAME
| SALARY
| TARGET LTI (% OF SALARY)
| APPROXIMATE TARGET LTI VALUE1
| ||||||||||||
Dr. Juergen Wunram
| €
| 535,000
|
|
| 200
| %
| €
| 1,070,000
|
| ||||||
Christopher A. Chapman
| $
| 575,000
|
|
| 200
| %
| $
| 1,150,000
|
| ||||||
Andreas W. Mattes
| $
| 937,500
|
|
| 500
| %
| $
| 4,687,500
|
| ||||||
Jonathan B. Leiken
| $
| 475,000
|
|
| 150
| %
| $
| 712,500
|
| ||||||
Dr. Ulrich Näher
| €
| 470,000
|
|
| 150
| %
| €
| 705,000
|
| ||||||
Olaf Heyden
| €
| 470,000
|
|
| 150
| %
| €
| 705,000
|
| ||||||
Eckard Heidloff
| €
| 700,000
|
|
| 100
| %
| €
| 700,000
|
| ||||||
1 | The target award values shown here generally vary from the award values listed in the Grant of Plan-Based Awards Table (GPBAT) |
Performance-based shares (50%): Provide value based on a combination of three-year (2017-2019) total shareholder return ranking versus the regular annual long-term incentive grants included the following components:
| • | ||
payout. |
| • | Target: payout. |
| • | Maximum: |
For Mr. Mattes, due to annual grant limits in the equity plan, we utilized a combination of performance shares and performance-based deferred shares to deliver competitive LTI value. The performance requirements for Mr. Mattes’ performance shares and performance-based deferred shares are 50% TSR and 50% synergy savings.
: Provide value based solely on stock price appreciation. Grants of stock options have aten-year term and vest ratably over a three-year period. The exercise price is based on the closing price of our common stock on the grant date and is valued using the Black-Scholes stock option valuation method.In February 2017, the LONG-TERM INCENTIVES—PERFORMANCE-BASED SYNERGY GRANTS In February 2017, the Committee grantedone-time cost synergy performance-based share awards (the Synergy Grants) to all of the NEOs except Messrs. Mattes and Heidloff. The Synergy Grants were made under our 1991 Equity and Performance Incentive Plan, as amended, and were implemented in direct response to comments received during our 2016 shareholder outreach campaign. Messrs. Mattes and Heidloff were specifically excluded from thisone-time grant.Long-Term Incentives—Special Performance-Based Transformation GrantAs disclosed in last year’s CD&A, in early 2014,LONG-TERM INCENTIVES—ADDITIONAL RSU GRANTS TO MESSRS. CHAPMAN AND LEIKEN Committee, in consultation with the Board, determined that selected members of our leadership team should receive a special equity grant to incentivize and retain them through the execution of a multi-year business transformation strategy related to Diebold 2.0. The Committee approved a special one-time performance-based transformation equity grant that could be earned over a three-year period if Diebold 2.0 transformational financial metrics were achieved.For NEOs other than Mr. Mattes, the full grant was made in 2014 and one-third could be earned for each of 2014, 2015, and 2016 if pre-approved performance goals are met.For Mr. Mattes, in accordance with share limits in our Plan, two separate grants (one in 2014 and one in 2015) were required to deliver the intended value. The 2015 grant covered the 2015 and 2016 performance periods. Half of the 2015 grant may be earned for 2015 performance, and half may be earned for 2016 performance. All performance goals were set at the start of the 2014-2016 performance period and are the same for all NEOs.-38-As disclosed in last year’s CD&A, 93.5% of the target award was earned for 2014 EPS performance. For the 2015 portion, no award was earned as EPS performance was below the threshold requirement. See "2015 NEO Compensation Highlights - Actual Earned Incentive Compensation" for further discussion of the 2015 calculation.Key features of Mr. Mattes’ 2015-2016 portion of the Transformation Grant are described below and are identical to those governing the 2015-2016 performance periods under the Transformation Grants for the other NEOs:FeatureDescriptionPerformance featuresYear 2 (2015): 2015 EPSYear 3 (2016): 2016 FCF1Payout opportunityBelow minimum: No payoutMinimum: 90% of targetMaximum: 110% of targetPayout opportunity for financial performance between 90% and 110% of the target goal is interpolated on a straight-line basisNo award was earned in 2015 because threshold performance of $1.85 EPS was not metTarget opportunity2267% of salary(62,684 performance-based shares)31 Disclosing the free cash flow performance targets for 2016, which we do not otherwise disclose publicly, would cause us competitive harm by potentially disrupting our customer relationships and providing competitors with insight to our specific strategy. We establish threshold, target, and maximum performance levels that are difficult to achieve, but reasonable based on a thorough review of the external economic environment and our internal business transformation strategy.2 Represents the LTI target percentage of salary effective January 15, 2014.3 Due to certain annual limits under the Plan, Mr. Mattes’ Transformation Grant was provided in two separate grants, with the first grant in 2014 covering the 2014 performance period (31,341 shares at target, or 133% of base salary), and the second grant in 2015 covering the 2015 and 2016 performance period (62,684 shares at target, or 267% of base salary).Long-Term Incentives—Mr. Mattes’ Performance-Based Deferred Share GrantNote: This grant does not represent targeted 2015 compensation. It relates solely to targeted 2014 LTI compensation that required two separate grants (one in 2014 and one in 2015) in order to comply with Plan limits.In 2013, the Committee approved an ongoing LTI objective of providing 50% of regular annual LTI value in the form of performance-based shares. Due to annual grant limits in the Plan, the Committee was required to bifurcate the regular 2014 performance-based share grant into two grants, one in 2014 and one in 2015, in order to deliver competitive compensation and meet the targeted LTI value.The 2015 portion of the regular 2014 grant was a grant of 48,466 performance-based deferred shares. The maximum was set at 100% of target, and a two-year non-GAAP cumulative EBITDA performance goal covering 2015-2016 was approved.Long-Term Incentives—Mr. Mayes’ RSU GrantIn February 2015, the Committee approved a 10,000 share RSU grant, subject to two-year cliffthree-year ratable vesting to Messrs. Chapman and Leiken. These awards were made in recognition of the extraordinary efforts of Messrs. Chapman and Leiken in closing the Wincor Nixdorf transaction.56 | 2018 PROXY STATEMENT
EXECUTIVE COMPENSATION MATTERS |
The Synergy Grants are intended to incentivize the accelerated achievement of cost reductions and scale efficiencies made possible by our business combination with Wincor Nixdorf. Performance under the awards is based on the second anniversaryachievement of certain levels of “synergy savings,” defined as the grant date,realized cost reductions resulting from streamlined processes, the elimination of redundant/overlapping cost (including reductions in lieu of any changesour workforce and facilities/overhead), and scale efficiencies gained due to Mr. Mayes’ targeted compensation structure (i.e., base salary, target bonus, target LTI value).the business combination. The objective ofCommittee approved the grant was to retain Mr. Mayes’ leadership through the ongoing management restructuring that accompanied our multi-year business transformation.
THRESHOLD | TARGET | MAXIMUM | |||||||||||||
Synergy Savings | $ | 160M | $ | 200M | $ | 240M | |||||||||
The table below outlines the S&P 400 Midcap Index companies. ForSynergy Grant values at target for the NEOs, other than Mr. Mattes, the performance period covered January 1, 2013 through December 31, 2015. Mr. Mattes joined the Company on June 6, 2013. His award covers the performance periodwhich are derived from his start datea percentage of June 6, 2013 through December 31, 2015.
| 3-Year TSR Ranking | Payout Earned1 (as % of Target) | |||||
| Executive | Custom Peer Group | S&P 400 Midcap Index Companies | Custom Peer Group | S&P 400 Midcap Index Companies | Total | Payout Earned (# of Shares) |
| Mr. Mattes | 39th | 39th | 32% | 32% | 64% | 23,702 |
All other NEOs2 | 43rd | 32nd | 39% | 0% | 39% | Mr. Chapman: 1,245 Ms. Rutt: 2,096 |
|
| ||||
Dr. Juergen Wunram | $ | 581,237 | |||
Christopher A. Chapman | $ | 437,676 | |||
Jonathan B. Leiken | $ | 337,448 | |||
Dr. Ulrich Näher | $ | 357,451 | |||
Olaf Heyden | $ | 357,451 | |||
To incentivize the achievement of savings as quickly as possible, the Committee assesses performance at two interim measurement dates (December 31, 2017 and December 31, 2018).
LONG-TERM INCENTIVES—PERFORMANCE-BASED CASH INCENTIVE AWARDS
Following our acquisition of Wincor Nixdorf, legacy Wincor Nixdorf employees continued to hold a portion of their incentive compensation in Wincor Nixdorf stock options. In order to incentivize these employees around the combined Company’s performance, we made aone-time offer to certain employees to replace their outstanding Wincor Nixdorf stock
options with performance-based cash incentive awards (the DN Performance Awards).
The objective of this program was to simply convert existing Wincor Nixdorf stock options into a performance-based cash incentive for the newly-combined Company. It is not additional value. It maintains the existing value and performance risk of the legacy Wincor Nixdorf program, but aligns legacy Wincor Nixdorf employees with the newly-combined Company’s performance as the performance metric is Diebold Nixdorf’s stock price. Without the employee’s agreement to cancel the outstanding Wincor Nixdorf stock options, they would remain in place and be payable based on the Wincor Nixdorf stock price until the stock options expire or lapse.
The grant of the DN Performance Awards was contingent on the employee’s agreement to cancel his or her outstanding Wincor Nixdorf options. These awards were granted by the Compensation Committee under our shareholder-approved Annual Cash Bonus Plan and were effective May 1, 2017. Drs. Wunram and Näher and Messrs. Heyden and Heidloff participated in this offer.
The DN Performance Awards replaced the Wincor Nixdorf stock options vesting in March of 2018, 2019 and 2020, respectively. Each tranche of stock options had a different vest date and a different “in the money” value, and so each tranche was replaced with a DN Performance Award that had the same measurement date (of 2018, 2019 or 2020). Each award is structured to approximate the original“in-the money” value of the cancelled options at target, the option “under water” line
| 2018 PROXY STATEMENT | | 57 |
EXECUTIVE COMPENSATION MATTERS |
at threshold, and a maximum at approximately 155% of our stock price. If the threshold price is not met, there will be no payment of the award. Any cash amount earned between threshold, target, and maximum will be calculated on a straight-line basis. The measurement of the share price for purposes of the DN Performance Awards will be based upon the average share price of our stock for the20-day trading period prior to the end of the applicable performance period.
See below for the threshold, target, and cash incentive that each participating NEO may earn under the DN Performance Awards at target.
NAME
| OPTIONS CANCELLED
| PERFORMANCE PERIOD ENDING
| CONVERTED TARGET VALUE
| ||||||||||||
Dr. Juergen Wunram |
| 62,403
|
|
| 3/26/2018
|
| $
| 549,146
|
| ||||||
|
| 79,852
|
|
| 3/25/2019
|
| $
| 2,035,427
|
| |||||||
|
| 66,016
|
|
| 3/30/2020
|
| $
| 1,126,893
|
| |||||||
Olaf Heyden |
| 43,682
|
|
| 3/26/2018
|
| $
| 384,402
|
| ||||||
|
| 55,897
|
|
| 3/25/2019
|
| $
| 1,424,815
|
| |||||||
|
| 56,774
|
|
| 3/30/2020
|
| $
| 969,132
|
| |||||||
Dr. Ulrich Näher |
| 55,897
|
|
| 3/25/2019
|
| $
| 1,424,815
|
| ||||||
|
| 56,774
|
|
| 3/30/2020
|
| $
| 969,132
|
| |||||||
Eckard Heidloff1 |
| 87,364
|
|
| 3/26/2018
|
| $
| 768,803
|
| ||||||
|
| 111,793
|
|
| 3/25/2019
|
| $
| 2,849,604
|
| |||||||
|
| 92,422
|
|
| 3/30/2020
|
| $
| 1,577,644
|
| |||||||
The following table summarizes the performance measures for each DN Performance Award:
PERFORMANCE PERIOD ENDING
|
THRESHOLD
|
TARGET
|
MAXIMUM
| ||||||||||||
3/26/2018
|
|
$17.37
|
|
|
$26.18
|
|
|
$40.76
|
| ||||||
3/25/2019
|
|
$ 0.68
|
|
|
$26.18
|
|
|
$40.76
|
| ||||||
3/30/2020
|
|
$ 9.10
|
|
|
$26.18
|
|
|
$40.76
|
| ||||||
The 2015-2017 performance-based grants were completed on December 31, 2017. At the January 2018 Committee meeting, the Committee reviewed and We provide our U.S. executives with medical, dental,BenefitsLONG-TERM INCENTIVES—COMPLETED PERFORMANCE CYCLESPerquisitesapproved the following performance achievements and payout levels:Our three-year cumulativenon-GAAP adjusted EBITDA metric was achieved at $859.5M, falling between threshold of $774M and target of $910M resulting in a payout of 81.4% for this portion of the grant.• Our three-year TSR performance was below the 30th percentile threshold requirement against the S&P 400 Midcap Index companies resulting in a 0% payout for this portion of the grant. Accordingly, this performance award paid out at 40.70% of target. long-term disability, and life insurance under the same programs used to provide benefits to all U.S.-based associates. Our executives may buy additional life insurance coverage at their own expense. The maximum life insurance coverage that may be purchased by an executive is $1 million. Our executives’ personal benefits are not tied to individual or companyCompany performance and changes to these benefits reflect the changes to the benefits of all U.S.-based associates. Drs. Wunram and Näher and Mr. Heyden receive certain fringe benefits pursuant to their service agreements58 | 2018 PROXY STATEMENT
EXECUTIVE COMPENSATION MATTERS |
with Diebold Nixdorf AG, which are not tied to individual or Company performance.
Our executives, including the NEOs, may elect to defer receipt of compensation from the Annual Cash Bonus Plan and performance-based shares pursuant to our Deferred Incentive Compensation Plan No. 2 (as discussed below under Deferred CompensationDEFERRED COMPENSATION"Plans"Plans”). Current investment choices under the plan for cash deferrals (cash bonuses and dividends on deferred performance shares) mirror those in our 401(k) plan, except it does not include Diebold common shares.plan. Our deferred compensation plan does not provide participants with additional pay, but merely provides a tax deferred investment vehicle. Moreover, we do not guarantee any specific rate of return and do not contribute to the return that may be earned.
We maintain qualified andnon-qualified retirement NEOs, participate in our qualified defined benefit (pension) and defined contribution (401(k)) plans on the same terms as all U.S.-based associates. In 2013, we amended the pension plan to cease future benefit accruals for all participants after December 31, 2013. We also have RetirementRETIREMENTprograms.programs for our U.S. executives. Our U.S. executives, including thefour twonon-qualified supplemental retirement plans:plans in which certain NEOs participate: (1) the Pension Supplemental Executive Retirement Plan, or Pension SERP, (2) the Pension Restoration Supplemental Executive Retirement Plan, or Pension Restoration SERP, (3)and (2) the 401(k) Restoration Supplemental Executive Retirement Plan, or 401(k) Restoration SERP, and (4) the 401(k) Supplemental Executive Retirement Plan, or 401(k) SERP. These plans are described in detail below-40-under "2015“2017 Pension and Retirement Benefits."” Participation in the 401(k) Restoration SERP is based on the annual IRS compensation limits. Participation in the other plansPension Restoration SERP is limited to executive officers in positions that help develop, implement and modify our long-term strategic plan, as nominated by the CEO and approved by the Committee; however, we closed the Pension SERP, Pension Restoration SERP and 401(k) SERP to any new participants effective December 31, 2013 and also amended these Plansthe plan to cease future benefit accruals after December 31, 2013. In addition, we provided immediate vesting under our 401(k) SERP for all active participants effective as of December 31, 2013.
The participation status of our NEO’sNEOs in the SERPs is summarized below:
NAMED EXECUTIVE OFFICER | 401(K) RESTORATION SERP | PENSION RESTORATION SERP | ||||
Dr. Juergen Wunram | — | — | ||||
Christopher A. Chapman | — | X | ||||
Andreas W. Mattes | X | — | ||||
Jonathan B. Leiken | X | — | ||||
Dr. Ulrich Näher | — | |||||
Olaf Heyden | ||||||
| — | ||||||
Eckard Heidloff | — | — | ||||
Messrs. Heidloff and Heyden and Drs. Wunram and Näher participate in the Wincor Nixdorf AG Pension Scheme (the Wincor Pension Plan) pursuant to their service agreements. The Wincor Pension Plan is a contribution-defined pension system based on aone-time payout or installment payments and governed by the rules outlined in the Wincor Nixdorf International GmbH Pension Scheme. Their service agreements in effect for 2017 provided for certain annual contribution commitments as follows:€126,082 for Mr. Heidloff;€100,000 for Dr. Wunram; and€50,000 to each of Dr. Näher and Mr. Heyden. Mr. Heidloff’s Wincor Pension Plan balance as of his resignation is discussed below under “Potential Payments Upon Termination or Change in Control—Payments and Benefits in Connection with Mr. Heidloff’s Separation.”
We provide our executives with limited perquisites. The Committee believes that these benefits are set at a reasonable level, are highly valued by recipients, have limited cost to the Company, are part of a competitive reward system, and help in attracting and retaining top management talent. Perquisites received by U.S. executives include the following, the values of which differ based on an executive’s reporting level:PerquisitesPERQUISITES AND FRINGE BENEFITSPerquisites received by executives include the following, the values of which differ based on an executive’s reporting level:Reimbursement for financial planning services up to $12,000 for Mr. Mattes, up to $10,000 for Mr. Chapman, Mr. Mayes, and Ms. Rutt, and up to $7,500 for Messrs. Leiken and Merz;A complete annual physical exam (assessment of overall health, screening and risk reviews for chronic diseases, exercise and dietary analysis, and other specialty consultations), which helps protect in small measure the investment we make in these key individuals; andPayment of annual premiums for supplemental executive disability insurance.The Committee periodically reviews our practices in this area and makes any necessary adjustments based on market trends and the cost to provide these benefits.Reimbursement for financial planning services up to $16,000 for Mr. Mattes, up to $14,000 for Mr. Chapman and up to $10,000 for Mr. Leiken;The option to receive a complete annual physical exam, which helps protect in small measure the investment we make in these key individuals;Payment of annual premiums for supplemental executive disability insurance; and
| 2018 PROXY STATEMENT | | 59 |
EXECUTIVE COMPENSATION MATTERS |
Contractual fringe benefits paid to Drs. Wunram and Näher and Mr. Heyden under their service agreements include accident and liability insurance, health insurance, and subsidy pension insurance premiums paid by the Company and lease payments on a company car. Drs. Wunram and Näher and Mr. Heyden also receive reimbursement for financial planning services up to $14,000 for Dr. Wunram and $10,000 for Mr. Heyden and Dr. Näher. Mr. Heyden will also be reimbursed for up to an additional $70,000 in connection with tax advisory fees arising from his employment situation following our business combination.
We maintainchange-in-control agreements for The benefits available under the agreements are subject to a The agreements include the following items:Change-in-Control ProtectionCHANGE-IN-CONTROL PROTECTIONourcertain executive officers, including the NEOs (except for Mr. Mattes, whose change-in-control protection is included in his employment agreement, discussed in more detail under "Employment Agreements" below,Messrs. Chapman and except for Mr. Mayes, who has departed), thatLeiken, which provide our executives with the potential for continued employment (or benefits) for three years following achange-in-control.On July 24, 2015, we entered into new The other NEOs do not currently havechange-in-control agreements with Messrs. Chapman, Leiken and Merz and Ms. Rutt. These new agreements replaced prior agreements with Messrs. Chapman and Leiken and Ms. Rutt and provided change-in-control benefits consistent with customary governance and compensation practices, including the elimination of the historical excise tax gross-up provisions. agreements."double“double trigger,"” so that benefits are paid only following both (i) achange-in-control (as defined in the agreement) and (ii) a termination of the executive’s employment without cause by us or with good reason by the executive (as such terms are defined in the agreement) in the three-year period following achange-in-control.-41-
The Committee periodically reviews our policy with respect to thesechange-in-control agreements, and engages its independent compensation consultant to provide a competitive analysis of our practices. The Committee has determined that this type of agreement is still a valued component of overall compensation for purposes of attracting and retaining quality executive officers and, as such, the Committee approved the continued award of these agreements to new executives.
Our Senior Leadership Severance Plan provides coverage to executives who are involuntarily terminated without cause or who terminate their employment for good reason, in each case separate from achange-in-control and subject to a general release of claims and acknowledgement of the executive’s confidentiality,non-competition and other applicable obligations. Severance ProtectionSEVERANCE PROTECTIONHeyden until March 31, 2018:This policyPursuant to their service agreements, this Senior Leadership Severance Plan does not fully apply to Drs. Wunram and Näher and Mr. Mattes because he has an employment agreement. Our policy provides for the following:
| 60 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
Historically, in order to attract high-quality candidates, we have entered into formal employment agreements with our President and CEO, and when those positions have been held by separate individuals, with both our President and our CEO. Accordingly, in June 2013,on February 21, 2018, we entered into an offer letter with our new President and Chief Executive Officer, Gerrard Schmid. That offer letter is discussed in more detail under “Mr. Schmid Offer Letter” on page 67.
Drs. Wunram and Näher and Mr. Heyden had service agreements in place with Wincor Nixdorf prior to the acquisition. As part of our business combination, they received offer letters in February 2017, and their service agreements will continue in effect until February 28, 2019, as amended by and subject to the terms of the offer letter. These agreements are discussed in more detail under “Service Agreements with Drs. Wunram and Näher and Mr. Heyden” and in the “Potential Payments Upon Termination or Change in Control—Potential
Termination Payments under Service Agreements—Drs. Wunram and Näher and Mr. Heyden” sections.
Messrs. Chapman and Leiken do not have employment agreements. On January 31, 2018, we entered into an agreement with Mr. Mattes, whichChapman related to the potential accelerated vesting of his performance based shares, RSUs, options and other types of equity that may be granted in the near future. If Mr. Chapman’s employment is terminated other than for cause or if he leaves our employ for good reason during the two years after we amended on July 24, 2015. Forhire a summarynew chief executive officer, then he will be deemed to have met certain age and continuous service requirements necessary for the continued or accelerated vesting for the performance shares, RSUs, options and other equity awards in accordance with the terms of this agreement, including benefits paid following a change-in-control, see the discussion followingapplicable award agreements. Awards granted prior to 2017 will not be subject to such treatment. If Mr. Chapman remains employed through the "two-year period, these rights terminate.
2014 Grants of Plan-Based Awards" table below. No other NEO has an employment agreement.
In addition to any other rights or remedies legally available to us, all of our equity plans include provisions that allow us to cancel awards or Clawback PolicyCLAWBACK POLICY"claw back"“claw back” any shares received pursuant to awards or the exercise of stock options for certain specified conduct that is deemed detrimental to the Company. To the extent that an executive has already received value for such awards, these provisions also allow us to seek reimbursement of such value directly from the executive or through the garnishment of salary or cash bonus. Examples of such detrimental conduct include:
In addition, the Committee has implemented a separate and independent Clawback Policy effective August 2, 2012, which provides an additional avenue to recover excessive performance-based incentive compensation (whether equity or cash) paid during a three-year look-back period in the event of a willful act of misconduct resulting in an obligation on the Company to prepare a financial accounting restatement due to a material noncompliance with any reporting requirement under the U.S. federal securities laws. This policy will be updated as necessary when the claw back requirements under Dodd Frank are fully effective.
Under our Insider Trading Policy, each employee, officer and director of the Company is prohibited from buying or selling our securities when he or she is aware of material,non-public information about the Company, or information about other public companies which he or she learns as our employee or director. These individuals are also prohibited from providing such information to others. In addition, this policy prohibits employees, officers and directors from pledging Diebold Nixdorf stock, engaging in short sales of Diebold Nixdorf stock, and from buying or selling any derivative securities related to Diebold Nixdorf stock.Insider Trading PolicyINSIDER TRADING POLICY-43-
As noted above, if an executive is in possession of materialnon-public information, he or she is prohibited from trading in our stock. Apart from these trading restrictions, we also impose routineblack-out periods that prohibit executives,Company-Imposed Black-Out PeriodsCOMPANY-IMPOSEDBLACK-OUT PERIODS2018 PROXY STATEMENT | 61
EXECUTIVE COMPENSATION MATTERS |
including the NEOs, from trading during the period that begins two weeks prior to the end of each quarter and extends through the firstsecond business day following our next scheduled quarterly earnings release. These self-imposedblack-out periods are an example of good corporate governance and help to protect both us and the individual from allegations of insider trading violations.
However, ourblack-out policy was not intended to penalize employees for this type of positive corporate behavior and, in the past, the Committee has approved a cash distribution to employees, including NEOs, who were barred from exercising stock options prior to their expiration due to extended company-imposedblack-out periods. No such exceptions were made during 2015.
The Committee believes that stock ownership guidelines reinforce executive and shareholder alignment. Our executive stock ownership guidelines are: • CEO: 5x salary • Other NEOs: 3x salary The Committee monitors progress towards achievement for the stated guidelines annually. In determining an executive’s stock holdings, we count the shares beneficially owned, including theafter-tax value of unvested RSUs, shares deferred pursuant to our deferred compensation program, and shares owned through our 401(k) savings plan. Outstanding stock options and unearned performance shares do not count towards the executives’ stock ownership guidelines.Stock Ownership GuidelinesSTOCK OWNERSHIP GUIDELINESCEO: 5x salaryOther NEOs: 3x salary Our executives are not allowed to sell shares until they meet the guidelines.
Prior to December 22, 2017, when the Tax Cuts and Jobs Act of Revenue Code generally Under the TCJA, the performance-based exception has been repealed and the $1 million deduction limit now applies to anyone serving as the chief executive officer or the chief financial officer at any time during the taxable year and the top three other highest compensated executive officers serving at fiscalyear-end. The new rules generally apply to taxable years beginning after December 31, 2017, but do not apply to remuneration provided pursuant to a written binding contract in effect on November 2, 2017 that is not modified in any material respect after that date. We consider the tax and accounting impact of all compensation, and our annual and long-term incentive plans have been designed so that awards granted under such plans may be able to qualify as performance-based compensation. To the extent possible and consistent with the goals and philosophy of compensation stated throughout, the Committee endeavors to limit the impact of Section 162(m) of the Code. The Committee also believes that the tax deduction is only one of several relevant considerations in setting compensation and that the tax deduction limitation should not be permitted to compromise the Company’s ability to design and maintain executive compensation arrangements that will attract and retain the executive talent to compete successfully. Accordingly, achieving the desired flexibility in the design and delivery of compensation may result in compensation that in certain cases is not deductible for federal income tax purposes.Limitations on DeductibilityTAX REFORM AND LIMITATIONS ON DEDUCTIBILITY OF COMPENSATIONCompensation2017 (TCJA) was signed into law, Section 162(m) of the Internallimitslimited the deductibility of executive compensation paid by publicly-held corporations to $1 million per year for the CEO and the next three most highly compensated executive officers, excluding the CFO. The $1 million limitation doesdid not apply to compensation that qualifies as performance-based.-44-62 | 2018 PROXY STATEMENT
EXECUTIVE COMPENSATION MATTERS |
The table below summarizes the total compensation earned by each of our NEOs for the fiscal years ended December 31, 2017 SUMMARY COMPENSATION TABLE NAME AND PRINCIPAL POSITION SALARY1 ($) BONUS ($) STOCK AWARDS2 ($) OPTION AWARDS3 ($) NON-EQUITY INCENTIVE PLAN COMPENSATION4 ($) CHANGE IN PENSION AND NON- QUALIFIED DEFERRED COMPENSATION EARNINGS5 ($) ALL OTHER COMPENSATION6 ($) TOTAL ($) Dr. Juergen Wunram 2017 598,446 — 1,583,750 342,116 267,089 105,588 154,204 3,051,193 Senior Vice President and Chief Operating Officer* Christopher A. Chapman 2017 574,178 — 1,710,187 343,487 230,000 80,875 39,491 2,978,218 Senior Vice President and Chief Financial Officer* Andreas W. Mattes 2017 963,382 — 4,217,980 908,000 249,555 — 5,904,919 12,243,836 Former Chief Executive Officer and President Jonathan B. Leiken 2017 472,849 — 1,227,054 212,813 190,000 — 36,818 2,139,534 Senior Vice President, Chief Legal Officer and Secretary Dr. Ulrich Näher 2017 460,411 — 1,017,990 225,411 234,639 68,392 104,992 2,111,835 Senior Vice President, Systems Olaf Heyden 2017 460,411 — 1,017,990 225,411 234,639 71,992 129,237 2,139,680 Senior Vice President, Services Eckard Heidloff 2017 194,953 — — — — 207,576 5,443,527 5,846,056 Former President 2017 amounts in this column represent the aggregate grant date fair value, computed in accordance with FASB ASC Topic 718 Executive Compensation TablesEXECUTIVE COMPENSATION TABLES2015, 20142017, 2016 and 2013,2015, as applicable. The amounts shown include compensation for services in all capacities that were provided to us.2015 Summary Compensation TableName and PrincipalPosition Year Salary($) Bonus1
($) Stock
Awards2 ($) Option
Awards3($) Non-Equity
Incentive Plan
Compensation4($) Change in
Pension Value
and Non-qualified
Deferred
Compensation
Earnings5($) All Other
Compensation6($) Total($)Andreas W. MattesPresident and Chief Executive Officer 2015 928,418 — 6,271,703 1,408,680 459,375 — 322,998 9,391,174 2014 836,106 — 2,900,655 1,044,825 1,779,509 — 206,842 6,767,937 2013 408,365 370,980 2,104,265 813,747 529,973 — 95,732 4,323,062 Christopher A. ChapmanSenior Vice President, Chief Financial Officer 2015 402,658 — 499,284 263,740 180,000 — 34,432 1,380,114 2014 301,019 — 410,137 68,631 574,035 135,094 25,343 1,514,259 2013 239,238 — 190,651 57,095 184,100 — 20,366 691,450 Jonathan B. LeikenSenior Vice President, Chief Legal Officer and Secretary 2015 400,000 — 285,304 150,708 160,000 — 26,392 1,022,404 — — — — — — — — — — — — — — — — — — Stefan E. MerzSenior Vice President, Strategic Projects 2015 374,726 — 267,473 141,291 128,000 — 50,420 961,910 2014 325,000 — 616,051 99,577 424,003 — 36,935 1,501,566 — — — — — — — — — Sheila M. RuttVice President and Chief Human Resources Officer 2015 348,801 — 249,641 131,874 91,875 — 58,140 880,331 2014 332,263 — 609,310 103,803 353,583 241,343 44,489 1,684,791 — — — — — — — — — George S. Mayes, Jr.Former Executive Vice President and Chief Operating Officer 2015 380,7697 — 1,319,267 518,063 54,542 — 3,006,810 5,279,451 2014 539,423 — 2,472,994 421,296 813,216 — 195,922 4,442,851 2013 468,674 — 722,114 336,051 525,000 — 193,797 2,245,636 YEAR
VALUE 2016 230,553 — — — 925,357 — 116,133 1,272,043 — — — — — — — — — 2016 500,000 — 700,757 300,000 331,500 47,575 39,797 1,919,629 2015 402,658 — 499,284 263,740 180,000 — 34,432 1,380,114 2016 937,500 — 3,179,794 1,074,000 585,000 — 190,458 5,966,752 2015 928,418 — 6,271,703 1,408,680 459,375 — 322,998 9,391,174 2016 440,000 — 538,448 132,000 324,720 — 37,210 1,472,378 2015 400,000 — 285,304 150,708 160,000 — 26,392 1,022,404 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2016 322,775 — — — 1,295,500 — 142,385 1,760,660 — — — — — — — — — * Dr. Wunram and Mr. Chapman were serving as our InterimCo-Presidents andCo-CEOs at fiscalyear-end. 1 As disclosedEarned salary amounts reported for Drs. Wunram and Näher and Messrs. Heyden and Heidloff are included in our 2014 proxy,the table in U.S. dollars, but these executives receive their salaries in Euros. To convert their Euro salary amounts to U.S. dollars for the table, we used the average Euro to U.S. dollar foreign currency exchange rate for 2017 of 1.12949. The annual salary rates for Drs. Wunram and Näher and Mr. Heyden during calendar year 2017 under their service agreements were€535,000,€470,000, and€470,000 respectively. These increases from their 2016 salary rates took effect in April 2017. See “Service Agreements with Drs. Wunram and Näher and Mr. Heyden” below for additional information. For Dr. Wunram and Mr. Chapman, this column represents thatamount also reflects the prorated portion of theirCEO-stipend for December 2017. For Mr. Mattes’ annualMattes, this amount reflects salary earned for 2017 and cash bonuspaid to Mr. Mattes in 2013 that did not qualify for inclusionlieu of vacation in the "Non-Equity Incentive Plan Compensation" column above.connection with his departure.2 2015("ASC 718")(ASC 718), for RSUs and performance-based LTI shares awarded to the NEOs in 2015 and also includes the ASC 718 grant date value for Mr. Mattes of his 2015-2016 Transformation Grant and 2015-2016 performance-based deferred shares award.2017. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The grant date values in the table and this footnote do not necessarily correspond to the actual value that will be realized by the NEOs. See the "2015 NEO Compensation Highlights - Target Compensation Structure" section of the "Compensation Discussion & Analysis" for additional information regarding Mr. Mattes’ 2015-2016 Transformation Grant and 2015-2016 performance-based deferred share award.The grant date fair values for the RSUs are determined using the closing price of our common shares on the grant date. The grant date fair values included in the table for the annual performance-based LTI shares are calculated based on the probable outcome of the relevant performance conditions as of the grant date, which we calculate using a Monte Carlo simulation model. For Mr. Mattes, the grant date fair value for his performance-based LTI shares and for his performance-based deferred shares is calculated (i) using a Monte Carlo simulation model with respect to the 50% of the target award that is based on relative TSR and (ii) the closing price of our common shares on the grant date and assuming target level achievement of the synergy savings goal for the remaining 50% of the award. For the performance-share based Synergy Grant, the grant date fair value is calculated using the closing price of our common shares on the grant date and assuming target level achievement of the cumulative adjusted EBITDA goal forsynergy savings goal. See the remaining 50% of the award. See the "2015“2017 Grants of Plan-Based Awards Table"Table” below for the threshold, target and maximum numbers of shares that each NEO may earn under these performance-based LTI awards and Footnote 5 to that table for additional information on assumptions used in calculating the grant date valuations. The ASC 718 grant date fair values for each NEO’s 20152018 PROXY STATEMENT | 63
EXECUTIVE COMPENSATION MATTERS |
| 2017 performance-based LTI awards assuming the achievement of the maximum level of performance would be: for Heyden, $1,729,602. |
| The specific terms of each of these awards are discussed in more detail in |
| Mr. Heidloff did not receive any stock awards in 2017. | |
3 | This column represents the aggregate grant date fair value, computed in accordance with FASB ASC Topic 718, for options awarded to the NEOs in |
| Mr. Heidloff did not receive any option awards in 2017. |
4 | This column reflects amounts earned by |
5 | The amount shown for Messrs. Chapman, Heyden and Heidloff and Drs. Wunram and Näher is the difference (to the extent positive) between the actuarial present value of pension benefits as of December 31, |
| There was no above-market or preferential interest earned by any NEO in |
6 |
| 64 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
| The amounts reported as “All Other Compensation” for 2017 for Mr. |
ALL OTHER COMPENSATION | ||||||||||||||||||||
NAMED EXECUTIVE OFFICER |
(A) |
(B) |
(C) |
(D) | ||||||||||||||||
Dr. Juergen Wunram
|
| 119,986
|
|
| 1,464
|
|
| 3,496
|
|
| 29,258
|
| ||||||||
Christopher A. Chapman
|
| 9,955
|
|
| 5,410
|
|
| 11,299
|
|
| 12,827
|
| ||||||||
Andreas W. Mattes
|
| 54,542
|
|
| 16,000
|
|
| 41,825
|
|
| 5,792,552
|
| ||||||||
Jonathan B. Leiken
|
| 14,942
|
|
| 10,000
|
|
| 10,740
|
|
| 1,136
|
| ||||||||
Dr. Ulrich Näher
|
| 59,993
|
|
| 4,660
|
|
| 2,304
|
|
| 38,035
|
| ||||||||
Olaf Heyden
|
| 59,993
|
|
| 36,400
|
|
| 2,304
|
|
| 30,540
|
| ||||||||
Eckard Heidloff
|
| 67,439
|
|
| —
|
|
| —
|
|
| 5,376,088
|
| ||||||||
CEOPAY-RATIO DISCLOSURE
Under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of RegulationS-K, we are required to disclose the median of the annual total compensation of our employees, the annual total compensation of our principal executive officer, and the ratio of these two amounts.
We are a global company with complex operations worldwide, with many of our 22,894 employees at December 1, 2017 located outside of the United States. We identified the median employee by examining only annual base salaries for all of our employees, excluding our CEO, who were employed by us on December 1, 2017 because we believe that this measure reasonably reflects the annual compensation of our employees. Of our approximately 23,000 employees, approximately 1,000 employees receive equity and approximately 4,800 are bonus eligible, so using base salary is representative.
We included all employees, whether employed on a full-time or part-time basis, and did not make any estimates, assumptions or adjustments to any annual base salaries other than to convert such salaries to U.S. dollars based on currency exchange rates on December 1, 2017.
After identifying the median employee based on annualized base salaries, we calculated annual total compensation for such employee using the same methodology we used for our NEOs as set forth in the above 2017 Summary Compensation Table. We have estimated the annual total compensation of our median employee, excluding our CEO, to be $34,520. As
reported in the 2017 Summary Compensation Table, the total compensation of Mr. Mattes, who was our President and CEO on December 1, 2017, was $12,243,836, which, among other things, includes payment for unused vacation time for the remainder of the year subsequent to his termination. For 2017, the ratio of the total compensation of our former President and CEO to the estimated median of the annual total compensation of our employees was approximately 354 to 1. We believe this pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules. We note that a substantial portion of Mr. Mattes’ total compensation for 2017 was related to his separation from the Company on December 13, 2017. Excluding severance-related compensation in the amount of $5,775,475, the ratio of his annualized total compensation to the estimated median of the total annual compensation of our employees would have been 187 to 1.
Because the SEC rules for identifying the median of the annual total compensation of our employees and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio for our Company, as other companies have offices in different countries, have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their pay ratios.
| All Other Compensation | |||||||||||
| Named Executive Officer | (a) | (b) | (c) | (d) | (e) | ||||||
| Andreas W. Mattes | $137,489 | 96,241 | 12,000 | 70,254 | 7,014 | ||||||
| Christopher A. Chapman | — | 9,540 | 1,152 | 12,662 | 11,078 | ||||||
| Jonathan B. Leiken | — | 11,571 | 7,500 | 2,897 | 4,424 | ||||||
| Stefan E. Merz | — | 28,626 | 5,800 | 10,675 | 5,319 | ||||||
| Sheila M. Rutt | — | 25,495 | 10,000 | 14,784 | 7,861 | ||||||
| George S. Mayes, Jr. | — | 18,811 | 10,192 | 19,725 | 2,958,082 | ||||||
| 2018 PROXY STATEMENT | | 65 |
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards1 | Estimated Future Payouts Under Equity Incentive Plan Awards2 | All Other Stock Awards: Number of Shares of Stock or Units3 (#) | All Other Option Awards: Number of Securities Underlying Options4 (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards5 ($) | ||||||||||
| Name | Grant Date | Thresh. ($) | Target ($) | Max. ($) | Thresh. (#) | Target (#) | Max. (#) | ||||||||
| Andreas W. Mattes | 2/5/15 | - | - | - | - | - | - | - | 200,000 | 32.33 | 1,408,680 | ||||
| 2/5/15 | - | - | - | - | - | - | 23,721 | - | - | 766,900 | |||||
| 2/5/15 | - | - | - | 29,519 | 59,037 | 118,074 | - | - | - | 1,911,323 | |||||
| 2/5/15 | - | - | - | 24,233 | 48,466 | 48,466 | - | - | - | 1,566,906 | |||||
| 2/5/15 | - | - | - | 56,416 | 62,684 | 68,953 | - | - | - | 2,026,574 | |||||
| - | 562,500 | 1,312,500 | 2,625,000 | - | - | - | - | - | - | - | |||||
| Christopher A. Chapman | 2/5/15 | - | - | - | - | - | - | - | 37,445 | 32.33 | 263,740 | ||||
| 2/5/15 | - | - | - | - | - | - | 4,408 | - | - | 142,511 | |||||
| 2/5/15 | - | - | - | 5,510 | 11,020 | 22,040 | - | - | - | 356,773 | |||||
| - | 180,000 | 450,000 | 900,000 | - | - | - | - | - | - | - | |||||
| Jonathan B. Leiken | 2/5/15 | 21,397 | 32.33 | 150,708 | |||||||||||
| 2/5/15 | 2,519 | 81,439 | |||||||||||||
| 2/5/15 | 3,149 | 6,297 | 12,594 | 203,865 | |||||||||||
| - | 160,000 | 400,000 | 800,000 | ||||||||||||
| Stefan E. Merz | 2/5/15 | - | - | - | - | - | - | - | 20,060 | 32.33 | 141,291 | ||||
| 2/5/15 | - | - | - | - | - | - | 2,361 | - | - | 76,331 | |||||
| 2/5/15 | - | - | - | 2,952 | 5,904 | 11,808 | - | - | - | 191,142 | |||||
| - | 140,000 | 320,000 | 640,000 | - | - | - | - | - | - | - | |||||
| Sheila M. Rutt | 2/5/15 | - | - | - | - | - | - | - | 18,723 | 32.33 | 131,874 | ||||
| 2/5/15 | - | - | - | - | - | - | 2,204 | - | - | 71,255 | |||||
| 2/5/15 | - | - | - | 2,755 | 5,510 | 11,020 | 178,386 | ||||||||
| - | 122,500 | 262,500 | 525,000 | - | - | - | - | - | - | - | |||||
| George S. Mayes, Jr. | 2/5/15 | - | - | - | - | - | - | - | 73,553 | 32.33 | 518,063 | ||||
| 2/5/15 | - | - | - | - | - | - | 8,659 | - | - | 279,945 | |||||
| 2/5/15 | - | - | - | 10,824 | 21,647 | 43,294 | - | - | - | 700,822 | |||||
| - | 187,000 | 467,500 | 935,000 | ||||||||||||
| 3/16/15 | - | - | - | - | - | - | 10,000 | - | - | 338,500 | |||||
EXECUTIVE COMPENSATION MATTERS |
2017 GRANTS OF PLAN-BASED AWARDS TABLE
NAME
| ESTIMATED POSSIBLE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS1 |
ESTIMATED FUTURE PAYOUTS UNDER EQUITY | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS3 (#)
| ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS4 (#)
| EXERCISE OR BASE PRICE OF OPTION AWARDS ($/SH)
|
GRANT FAIR VALUE STOCK OPTION AWARDS5 ($)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
GRANT DATE
| THRESHOLD ($)
| TARGET ($)
| MAX. ($)
| THRESHOLD (#)
| TARGET (#)
| MAX. (#)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dr. Juergen Wunram |
|
2/8/2017 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
75,356 |
|
|
26.60 |
|
|
342,116 |
| |||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | — | — | — | 8,740 | — | — | 232,484 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 10,923 | 21,851 | 43,702 | — | — | — | 770,029 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 10,923 | 21,851 | 43,702 | — | — | — | 581,237 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 229,083 | 572,707 | 1,145,414 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/1/2017 | 624 | 549,146 | 1,459,606 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/1/2017 | 799 | 2,035,427 | 3,200,468 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 5/1/2017
|
|
| 660
|
|
| 1,126,893
|
|
| 2,090,067
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||
Christopher A. Chapman |
|
2/8/2017 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
75,658 |
|
|
26.60 |
|
|
343,487 |
| |||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | — | — | — | 8,775 | — | — | 233,415 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 10,969 | 21,938 | 43,876 | — | — | — | 773,095 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 8,227 | 16,454 | 32,908 | — | — | — | 437,676 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 230,000 | 575,000 | 1,150,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2/8/2017
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 10,000
|
|
| —
|
|
| —
|
|
| 266,000
|
| ||||||||||||||||||||||||||||
Andreas W. Mattes |
|
2/8/2017 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
200,000 |
|
|
26.60 |
|
|
908,000 |
| |||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | — | — | — | 54,626 | — | — | 1,453,052 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 28,195 | 56,390 | 112,780 | — | — | — | 1,743,579 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 16,516 | 33,032 | 66,064 | — | — | — | 1,021,349 | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
| —
|
|
| 562,500
|
|
| 1,312,500
|
|
| 2,625,000
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||
Jonathan B. Leiken |
|
2/8/2017 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
46,875 |
|
|
26.60 |
|
|
212,813 |
| |||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | — | — | — | 5,437 | — | — | 144,624 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 6,796 | 13,592 | 27,184 | — | — | — | 478,982 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 6,343 | 12,686 | 25,372 | — | — | — | 335,852 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 190,000 | 475,000 | 950,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2/8/2017
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 10,000
|
|
| —
|
|
| —
|
|
| 266,000
|
| ||||||||||||||||||||||||||||
Dr. Ulrich Näher |
|
2/8/2017 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
49,650 |
|
|
26.60 |
|
|
225,411 |
| |||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | — | — | — | 5,759 | — | — | 153,189 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 7,199 | 14,397 | 28,794 | — | — | — | 507,350 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 6,719 | 13,438 | 26,876 | — | — | — | 357,451 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 201,250 | 503,126 | 1,006,251 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/1/2017 | 558 | 1,424,815 | 2,240,352 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 5/1/2017
|
|
| 567
|
|
| 969,132
|
|
| 1,797,465
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||
Olaf Heyden |
|
2/8/2017 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
49,650 |
|
|
26.60 |
|
|
225,411 |
| |||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | — | — | — | 5,759 | — | — | 153,189 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 7,199 | 14,397 | 28,794 | — | — | — | 507,350 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/8/2017 | — | — | — | 6,719 | 13,438 | 26,876 | — | — | — | 357,451 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 201,250 | 503,126 | 1,006,252 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/1/2017 | 437 | 384,402 | 1,021,722 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/1/2017 | 558 | 1,424,815 | 2,240,352 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 5/1/2017
|
|
| 567
|
|
| 969,132
|
|
| 1,797,465
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||
Eckard Heidloff |
|
5/1/2017 |
|
|
874 |
|
|
768,803 |
|
|
2,043,444 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||||||||||||||||
| 5/1/2017 | 1,118 | 2,849,604 | 4,480,663 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 5/1/2017
|
|
| 924
|
|
| 1,577,644
|
|
| 2,926,081
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||
| 1 | These columns present information about the potential payouts under our Annual Cash Bonus Plan for fiscal year |
| 66 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
| For Drs. Wunram and Näher and Messrs. Heidloff and Heyden, this column also presents the potential payouts under their DN Performance Awards for the performance periods ending in March 2018, 2019, and 2020, respectively. For a more detailed description of the related performance measures for the DN Performance Awards see above under “Compensation Discussion and Analysis.” |
2 | These columns present information about performance-based LTI shares awarded during |
| Except for Messrs. Mattes and Heidloff, these columns also present information about performance-based shares awarded under the Synergy Grant. The payout for the Synergy Grant will be determined based on the achievement of specific synergy savings targets calculated over the three-year period beginning January 1, 2017 and ending December 31, 2019. For a more detail description of this award and the related performance measures, see the related description in the “Compensation Discussion and Analysis.” |
3 | This column presents information about RSUs awarded during |
4 | All stock option grants in this table were new and not granted in connection with an optionre-pricing transaction, and the terms of the stock options were not materially modified in |
5 | For the annual performance-based LTI shares, and the relative TSR portion of Mr. Mattes annual performance-based LTI shares and performance-based deferred shares, the grant date fair value of |
| For the Synergy Grant and the synergy savings portion of synergy savings goal. |
| For RSUs, the fair value is calculated using the closing market price of the shares on the |
MR. SCHMID OFFER LETTER
In connection with Mr. Schmid’s appointment as our President and Chief Executive Officer on February 21, 2018, we entered into an offer letter pursuant to which Mr. Schmid will receive an annual base salary of at least $950,000 and will be eligible for annual incentive awards and long-term incentive plan awards as determined by the Company. For 2018, the Board set his initial annual cash incentive award target at $1,330,000, which represents 140% of his base salary. Any payout under this incentive award shall be determined by the Board based on the achievement of certain performance goals.
The Board also granted Mr. Schmid options, performance share units and restricted stock units as a material inducement to his hiring. Pursuant to the terms of the CEO Inducement Award Agreement, dated February 21, 2018 (the
CEO Award Agreement), Mr. Schmid received (i) 192,049 options with an exercise price of $15.35 per share and which will vest in three equal installments on the first, second, and third anniversary of the grant date; (ii) 155,636 performance share units, which will be earned, if at all, based on the target level of achievement of established performance metrics during the performance period, which begins on his date of hire and ends on December 31, 2020; and (iii) 108,945 restricted stock units, which will vest in three equal installments on the first, second, and third anniversaries of the grant date. This inducement award was approved by all of the Company’s independent directors and was made outside of the terms of the 2017 Plan. Once vested, equity grants will not be subject to forfeiture unless Mr. Schmid is terminated for certain activities constituting cause (as defined in the CEO Award Agreement). In the event Mr. Schmid’s employment is
| 2018 PROXY STATEMENT | | 67 |
EXECUTIVE COMPENSATION MATTERS |
terminated by us without cause or he resigns for good reason (as defined in the CEO Award Agreement) within three years after a change in control, he will be entitled to 100% accelerated vesting of all such outstanding equity interests, with performance awards earned at the greater of target or actual performance as of the date of termination.
Mr. Schmid’s severance benefits will be governed by our current Senior Leadership Severance Plan, which provides coverage to executives who are involuntarily terminated without cause or who terminate their employment for good reason, in each case separate froma change-in-control and subject to a general release of claims and Restated Employmentacknowledgement of the executive’sconfidentiality, non-competition and other applicable obligations. With respect to Mr. Schmid, “good reason” as defined in the Senior Leadership Severance Plan shall also include a change in title, authority, duties or responsibilities or the assignment of any duties that are inconsistent with his position.
We also entered into a Change in Control Agreement with Mr. Schmid consistent with our existing program. Any benefits under the Change in Control Agreement are paid only following both(1) a change-in-control (as defined in the Change in Control Agreement) and (2) a termination of Mr. Schmid’s employment without cause by the Company, or by him with good reason (as such terms are defined in the Change in Control Agreement) in the three-year period followinga change-in-control. Under such circumstances, Mr. Schmid may be eligible for (i) a lump sum payment equal to two times base salary and target cash bonus, (ii) the acceleration of outstanding equity awards, (iii) payment of outstanding performance awards at the greater of target or actual performance, (iv) two years of continued participation in our health and welfare benefit plans, and (v) a lump sum payment in an amount equal to the additional benefits Mr. Schmid would have accrued under each qualified or nonqualified pension, profit sharing, deferred compensation or supplemental plan for one additional year of service, provided he was fully vested prior to termination, including pro rata payment of his annual incentive award at the greater of target or actual performance.
SERVICE AGREEMENTS WITH DRS. WUNRAM AND NÄHER AND MR. HEYDEN
Drs. Wunram and Näher and Mr. Heyden are compensated pursuant to their respective service agreements with Diebold Nixdorf AG and certain offer letters from us entered into in 2017 in connection with the continued integration following our business combination with Wincor Nixdorf. Their service agreements expire on February 28, 2019.
The service agreements and offer letters provide the following annual compensation:
The short-term cash incentive award under our Annual Cash Bonus Plan is dependent on the attainment of specific targets set by us at the beginning of each fiscal year, and adopted by the Supervisory Board of Diebold Nixdorf AG. If performance is achieved at target, Drs. Wunram and Näher and Mr. Heyden receive 100% of their fixed base salary as a cash bonus. A more detailed discussion of their short-term cash incentive component is included above under the “Annual Cash Bonus Plan” section of the “Compensation Discussion and Analysis.”
Drs. Wunram and Näher and Mr. Heyden are also eligible for long-term equity incentive awards based on 200% of annual base salary for Dr. Wunram and 150% of annual base salary for Dr. Näher and Mr. Heyden. In 2017, this award was composed of grants of Performance-Based Shares (50%), Stock Options (30%) and RSUs (20%). A more detailed discussion of these long-term equity incentive awards is included under the “Long Term Incentives—2017 Regular Annual Grants” section.
Drs. Wunram and Näher and Mr. Heyden are eligible to receive indemnification payments from us if the tax liability resulting from their service to us exceeds the tax liability that they would otherwise be subject to if their compensation were solely taxable in Germany as income of a management board member in Germany.
Drs. Wunram and Näher and Mr. Heyden are also subject to thenon-competition obligations provided under German law and may not, without the prior written approval of the chairman of the Supervisory Board, work for a company or a third party which is a competitor. The service agreements and offer letters also provide for certain payments and benefits in the event of qualifying terminations of employment, which are described in detail below under “Potential Payments Upon Termination or Change in Control—Potential Termination Payments underService Agreements—Drs. Wunram and Näher
| 68 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
and Mr. Heyden.” Additional information regarding the Wincor Pension Plan is provided under the “German Pension Benefits” section that follows the “2017Non-Qualified Deferred Compensation” table below.
MR. MATTES AMENDED AND RESTATED EMPLOYMENT AGREEMENT
In June 2013, we entered into an employment agreement with Mr. Mattes in connection with his appointment as our President and CEO. We amended that agreement on July 24, 2015 in order to, among other things, align the "change-in-control"“change-in-control” definition and the "cause"“cause” definition that applies in thetwo-year period following achange-in-control as stated in Mr. Mattes’ employment agreement with the definitions used in thechange-in-control agreements with our other executives. In addition, the amendments to the agreement also included:
On December 13, 2017, Mr. Mattes’ employment with the terms of theCompany ended. This event was treated as a termination without cause under his employment agreement, ifand therefore Mr. Mattes is terminated without cause (as defined in the agreement) or he terminates his employment for "good reason" (as defined in the agreement and subject to the Company’s right to cure), in either case other than in the two-year period following a "change-in-control" (as defined in the agreement) or if we decide not to renew Mr. Mattes’ agreement and his employment ends, assuming he otherwise satisfies certain conditions, he will bebecame entitled to receive among other things, (i) a lump sum amount equal to any unpaid salarythe payments set forth in the employment agreement. The amounts payable and accrued vacation pay and unreimbursed business expenses, (ii) a lump sum amount equal to two times his annual base salary and annual incentive award at target, (iii) a lump sum pro rata amount, if any, equal to the actual annual incentive that would have been payable tobenefits received by him based on the Company’s actual performance against applicable goals and his personal goals/key initiatives (based on his assumed target level performance), and (iv) continuation of medical, dental, vision and Company-paid basic life insurance coverage for the shorter of (i) 24 months and (ii) the date he receives equivalent coverage from a subsequent employer, and (A) any outstanding and unvested stock options will immediately
described in the “Potential Payments Upon Termination or Change in Control” section under the caption “Payments and Benefits in Connection with Mr. Mattes’ Separation.”
In consideration for and as a change-in-control, the termcondition to receipt of Mr. Mattes’ employment will automatically be extended to the second anniversary of the change-in-control. If, during the two-year period following a change in control,these payments, Mr. Mattes is terminated without cause or he terminates his employment for good reason, assuming he otherwise satisfies certain conditions, he will be entitled to receive, among other things, (i)executed a lump sum amount equal to any unpaid salary and accrued vacation pay and unreimbursed business expenses, (ii) a lump sum amount equal to two times Mr. Mattes’ annual base salary and annual incentive award at target, (iii) a lump sum pro-rata amount, if any, equal to the actual annual incentive that would have been payable to him based on our actual performance against applicable goals and his personal goals/key initiatives (based on his assumed target level performance), and (iv) continuation of medical, dental, vision and Company-paid basic life insurance coverage for the shorter of (i) 24 months and (ii) the date he receives equivalent coverage from a subsequent employer, and (A) any outstanding and unvested stock options will immediately vest and remain exercisable for twelve months (or the earlier expiration), (B) any restrictions on unvested RSUs will immediately lapse, and (C) all unearned performance-based shares and performance units will become non-forfeitable at 100% of target (except with respect to Transformation Grant which will be earned at 100% as long as Mr. Mattes is employed at the end of the performance period or was terminated without cause or with good reason).
The amounts payable and benefits under Section 280G ofhis employment agreement and related release are described in the Internal Revenue Code.
MR. HEIDLOFF SEPARATION AGREEMENT
As disclosed above, Mr. Mayes left theHeidloff resigned from his position as President of our Company on July 24, 2015,effective March 31, 2017. Mr. Heidloff and weDiebold Nixdorf AG entered into a separation agreement and release withdated February 16, 2017. Mr. Mayes on September 1, 2015. Mr. Mayes’ "AllHeidloff’s “All Other Compensation"Compensation” amount for 20152017 includes payments and benefits accrued to him in connection with his departure, anddeparture. The amounts payable in the futureand benefits under his separation agreement are described below in the "“Potential Payments Upon Termination or Change in Control"Control” section under the caption "“Payments and Benefits in Connection with Mr. Mayes’ Heidloff’s Separation."
| 2018 PROXY STATEMENT | | 69 |
EXECUTIVE COMPENSATION MATTERS |
OUTSTANDING EQUITY AWARDS AT 2017 FISCALYEAR-END
The following table provides information relating to exercisable and unexercisable stock options as of December 31, 20152017 for the NEOs. In addition, the following table provides information relating to grants of RSUs, deferred shares and performance-based awards to the NEOs that had not yet vested as of December 31, 2015.2017. No stock appreciation rights were outstanding as of December 31, 2015.2017. Mr. Heidloff did not hold any outstanding equity awards at 2017 fiscalyear-end.
OPTION AWARDS1 | STOCK AWARDS | |||||||||||||||||||||||||||||||||||||||||||||||||
NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS | EQUITY INCENTIVE PLAN AWARDS: | |||||||||||||||||||||||||||||||||||||||||||||||||
NAME
| GRANT
| EXERCISABLE
| UNEXERCISABLE
| EQUITY
| OPTION ($)
| OPTION
| NUMBER
| MARKET
|
NUMBER
| MARKET OR
| ||||||||||||||||||||||||||||||||||||||||
Dr. Juergen |
|
2/8/2017
|
|
|
—
|
|
|
75,356
|
|
|
—
|
|
|
26.60
|
|
|
2/8/2027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,740
|
|
|
142,899
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,923
|
|
|
178,591
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,923
|
|
|
178,591
|
| |||||||||||||||||||||
Christopher A. Chapman |
|
2/11/2009
|
|
|
1,250
|
|
|
—
|
|
|
—
|
|
|
24.79
|
|
|
2/11/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||||||||||||
|
2/11/2010
|
|
|
2,500
|
|
|
—
|
|
|
—
|
|
|
27.88
|
|
|
2/11/2020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/10/2011
|
|
|
7,000
|
|
|
—
|
|
|
—
|
|
|
32.67
|
|
|
2/10/2021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/8/2012
|
|
|
9,500
|
|
|
—
|
|
|
—
|
|
|
34.89
|
|
|
2/8/2022
|
|
|
—
|
|
|
—
|
|
|
—
|
|
| —
|
| |||||||||||||||||||||
|
2/6/2013
|
|
|
7,540
|
|
|
—
|
|
|
—
|
|
|
29.87
|
|
|
2/6/2023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/11/2014
|
|
|
10,166
|
|
|
—
|
|
|
—
|
|
|
34.13
|
|
|
2/11/2024
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/5/2015
|
|
|
24,963
|
|
|
12,482
|
|
|
—
|
|
|
32.33
|
|
|
2/5/2025
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/3/2016
|
|
|
18,622
|
|
|
37,244
|
|
|
—
|
|
|
27.39
|
|
|
2/3/2026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
75,658
|
|
|
—
|
|
|
26.60
|
|
|
2/8/2027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/5/2015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,408
|
|
|
72,071
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/3/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,064
|
|
|
82,796
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,775
|
|
|
306,971
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/5/2015
|
5
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,486
|
|
|
73,346
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/3/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,128
|
|
|
149,243
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,969
|
|
|
179,343
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,227
|
|
|
134,511
|
| |||||||||||||||||||||
Andreas W. |
|
6/6/2013
|
|
|
98,082
|
|
|
—
|
|
|
—
|
|
|
31.92
|
|
|
6/6/2023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||||||||||||
|
2/11/2014
|
|
|
154,766
|
|
|
—
|
|
|
—
|
|
|
34.13
|
|
|
2/11/2024
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/5/2015
|
|
|
200,000
|
6
|
|
—
|
|
|
—
|
|
|
32.33
|
|
|
2/5/2025
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/3/2016
|
|
|
200,000
|
6
|
|
—
|
|
|
—
|
|
|
27.39
|
|
|
2/3/2026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
200,000
|
6
|
|
—
|
|
|
—
|
|
|
26.60
|
|
|
12/13/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/5/2015
|
5
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,029
|
|
|
392,874
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/3/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,970
|
|
|
424,610
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,905
|
|
|
243,697
|
| |||||||||||||||||||||
| 70 | | 2018 PROXY STATEMENT | |
Option Awards1 | Stock Awards | |||||||||
| Number of Securities Underlying Unexercised Options | Equity Incentive Plan Awards: | |||||||||
| Name | Grant Date of Award | Exercisable (#) | Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested2 (#) | Market Value of Shares or Units of Stock That Have Not Vested3 ($) | Number of Unearned Shares, Units or Other Rights That Have Not Vested4 (#) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested4 ($) |
| Andreas W. Mattes | 6/6/2013 | 64,734 | 33,348 | — | 31.92 | 6/6/2023 | — | — | — | — |
| 2/11/2014 | 51,588 | 103,178 | — | 34.13 | 2/11/2024 | — | — | — | — | |
| 2/5/2015 | — | 200,000 | — | 32.33 | 2/5/2025 | — | — | — | — | |
| 6/6/2013 | — | — | — | — | — | 17,203 | 517,638 | — | — | |
| 2/11/2014 | — | — | — | — | — | 20,166 | 606,795 | — | — | |
| 2/5/2015 | — | — | — | — | — | 23,721 | 713,765 | — | — | |
6/6/20135 | — | — | — | — | — | 23,702 | 713,193 | — | — | |
| 2/11/2014 | — | — | — | — | — | — | — | 26,181 | 787,786 | |
| 2/5/2015 | — | — | — | — | — | — | — | 59,037 | 1,776,423 | |
| 2/5/2015 | — | — | — | — | — | — | — | 48,466 | 1,458,342 | |
| 2/5/2015 | — | — | — | — | — | — | — | 28,208 | 848,779 | |
| Christopher A. Chapman | 2/20/2006 | 700 | — | — | 39.43 | 2/20/2016 | — | — | — | — |
| 2/14/2007 | 1,250 | — | — | 47.27 | 2/14/2017 | — | — | — | — | |
| 2/11/2009 | 1,250 | — | — | 24.79 | 2/11/2019 | — | — | — | — | |
| 2/11/2010 | 2,500 | — | — | 27.88 | 2/11/2020 | — | — | — | — | |
| 2/10/2011 | 7,000 | — | — | 32.67 | 2/10/2021 | — | — | — | — | |
| 2/8/2012 | 7,125 | 2,375 | — | 34.89 | 2/8/2022 | — | — | — | — | |
| 2/6/2013 | 4,976 | 2,564 | — | 29.87 | 2/6/2023 | — | — | — | — | |
| 2/11/2014 | 3,388 | 6,778 | — | 34.13 | 2/11/2024 | — | — | — | — | |
| 2/5/2015 | — | 37,445 | — | 32.33 | 2/5/2025 | — | — | — | — | |
| 2/11/2010 | — | — | — | — | — | 2,000 | 60,180 | — | — | |
| 2/6/2013 | — | — | — | — | — | 1,277 | 38,425 | — | — | |
| 11/4/2013 | — | — | — | — | — | 2,000 | 60,180 | — | — | |
| 2/11/2014 | — | — | — | — | — | 1,325 | 39,869 | — | — | |
| 2/5/2015 | — | — | — | — | — | 4,408 | 132,637 | — | — | |
2/6/20135 | — | — | — | — | — | 1,245 | 37,462 | — | — | |
| 1/15/2014 | — | — | — | — | — | — | — | 1,916 | 57,652 | |
| 2/11/2014 | — | — | — | — | — | — | — | 3,312 | 99,658 | |
| 2/5/2015 | — | — | — | — | — | — | — | 11,020 | 331,592 | |
| Jonathan B. Leiken | 2/5/2015 | — | 21,397 | — | 32.33 | 2/5/2025 | — | — | — | — |
| 2/5/2015 | — | — | — | — | — | 2,519 | 75,797 | — | — | |
| 5/29/2014 | — | — | — | — | — | — | — | 3,211 | 96,619 | |
| 2/5/2015 | — | — | — | — | — | — | — | 6,297 | 189,477 | |
Option Awards1 | Stock Awards | |||||||||
| Number of Securities Underlying Unexercised Options | Equity Incentive Plan Awards: | |||||||||
| Name | Grant Date of Award | Exercisable (#) | Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested2 (#) | Market Value of Shares or Units of Stock That Have Not Vested3 ($) | Number of Unearned Shares, Units or Other Rights That Have Not Vested4 (#) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested4 ($) |
| Stefan E. Merz | 2/11/2014 | 4,916 | 9,834 | — | 34.13 | 2/11/2024 | — | — | — | — |
| 2/5/2015 | — | 20,060 | — | 32.33 | 2/5/2025 | — | — | — | — | |
| 8/1/2013 | — | — | — | — | — | 5,000 | 150,450 | — | ||
| 2/11/2014 | — | — | — | — | — | 1,922 | 57,833 | — | — | |
| 2/5/2015 | — | — | — | — | — | 2,361 | 71,042 | — | — | |
| 1/15/2014 | — | — | — | — | — | — | — | 2,958 | 89,006 | |
| 2/11/2014 | — | — | — | — | — | — | — | 4,805 | 144,582 | |
| 2/5/2015 | — | — | — | — | — | — | — | 5,904 | 177,651 | |
| Sheila M. Rutt | 2/20/2006 | 8,000 | — | — | 39.43 | 2/20/2016 | — | — | — | — |
| 2/14/2007 | 7,500 | — | — | 47.27 | 2/14/2017 | — | — | — | — | |
| 2/10/2011 | 12,000 | — | — | 32.67 | 2/10/2021 | — | — | — | — | |
| 2/8/2012 | 12,375 | 4,125 | — | 34.89 | 2/8/2022 | — | — | — | — | |
| 2/6/2013 | 4,188 | 4,317 | — | 29.87 | 2/6/2023 | — | — | — | — | |
| 2/11/2014 | 5,125 | 10,251 | — | 34.13 | 2/11/2024 | — | — | — | — | |
| 2/5/2015 | — | 18,723 | — | 32.33 | 2/5/2025 | |||||
| 2/11/2010 | — | — | — | — | — | 4,000 | 120,360 | — | — | |
| 1/14/2013 | — | — | — | — | — | 2,500 | 75,225 | — | — | |
| 2/6/2013 | — | — | — | — | — | 2,149 | 64,663 | — | — | |
| 2/11/2014 | — | — | — | — | — | 2,003 | 60,270 | — | — | |
| 2/5/2015 | — | — | — | — | — | 2,204 | 66,318 | — | — | |
2/6/20135 | — | — | — | — | — | 2,096 | 63,069 | — | — | |
| 1/15/2014 | — | — | — | — | — | — | — | 2,803 | 84,342 | |
| 2/11/2014 | — | — | — | — | — | — | — | 5,009 | 150,721 | |
| 2/5/2015 | — | — | — | — | — | — | — | 5,510 | 165,796 | |
| George S. Mayes Jr. | 2/20/2006 | 8,000 | — | — | 39.43 | 2/20/2016 | — | — | — | — |
| 2/14/2007 | 9,500 | — | — | 47.27 | 7/31/2016 | — | — | — | — | |
| 2/11/2009 | 3,750 | — | — | 24.79 | 7/31/2016 | — | — | — | — | |
| 2/11/2010 | 7,500 | — | — | 27.88 | 7/31/2016 | — | — | — | — | |
| 2/10/2011 | 20,000 | — | — | 32.67 | 7/31/2016 | — | — | — | — | |
| 2/8/2012 | 25,000 | — | — | 34.89 | 7/31/2016 | — | — | — | — | |
| 2/6/2013 | 44,379 | — | — | 29.87 | 7/31/2016 | — | — | — | — | |
| 2/11/2014 | 62,405 | — | — | 34.13 | 7/31/2016 | — | — | — | — | |
| 2/5/2015 | 73,553 | — | — | 32.33 | 7/31/2016 | — | — | — | — | |
| 2/11/2014 | — | — | — | — | — | — | — | 11,294 | 339,836 | |
| 2/5/2015 | — | — | — | — | — | — | — | 4,812 | 144,793 | |
EXECUTIVE COMPENSATION MATTERS |
OPTION AWARDS1 | STOCK AWARDS | |||||||||||||||||||||||||||||||||||||||||||||||||
NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS | EQUITY INCENTIVE PLAN AWARDS: | |||||||||||||||||||||||||||||||||||||||||||||||||
NAME
| GRANT
| EXERCISABLE
| UNEXERCISABLE
| EQUITY
| OPTION ($)
| OPTION
| NUMBER
| MARKET
|
NUMBER
| MARKET OR
| ||||||||||||||||||||||||||||||||||||||||
Jonathan B. Leiken |
|
2/5/2015
|
|
|
14,264
|
|
|
7,133
|
|
|
—
|
|
|
32.33
|
|
|
2/5/2025
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||||||||||||
|
2/3/2016
|
|
|
8,193
|
|
|
16,388
|
|
|
—
|
|
|
27.39
|
|
|
2/3/2026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
46,875
|
|
|
—
|
|
|
26.60
|
|
|
2/8/2027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/5/2015
|
5
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,519
|
|
|
41,186
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/3/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,228
|
|
|
36,428
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/11/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,667
|
|
|
109,005
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,437
|
|
|
252,395
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/5/2015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,564
|
|
|
41,921
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/3/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,017
|
|
|
65,678
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,796
|
|
|
111,115
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,343
|
|
|
103,708
|
| |||||||||||||||||||||
Dr. Ulrich Näher |
|
2/8/2017
|
|
|
—
|
|
|
49,650
|
|
|
—
|
|
|
26.60
|
|
|
2/8/2027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,759
|
|
|
94,160
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,199
|
|
|
117,704
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,719
|
|
|
109,856
|
| |||||||||||||||||||||
Olaf Heyden |
|
2/8/2017
|
|
|
—
|
|
|
49,650
|
|
|
—
|
|
|
26.60
|
|
|
2/8/2027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,759
|
|
|
94,160
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,199
|
|
|
117,704
|
| |||||||||||||||||||||
|
2/8/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,719
|
|
|
109,856
|
| |||||||||||||||||||||
1 |
2 | This column reflects unvested RSUs granted to the NEOs |
3 | The market value was calculated using the closing price of our common shares of |
| 2017. |
4 |
| This column also reports the performance-based Synergy Grant shares |
5 |
| Option Awards | Stock Awards | |||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting1 ($) | ||||
| Andreas W. Mattes | — | — | 29,307 | 1,018,418 | ||||
| Christopher A. Chapman | — | — | 3,289 | 111,888 | ||||
| Jonathan B. Leiken | — | — | 1,946 | 67,624 | ||||
| Stefan E. Merz | — | — | 3,072 | 106,752 | ||||
| Sheila M. Rutt | — | — | 5,211 | 176,827 | ||||
| George S. Mayes, Jr. | — | — | 35,218 | 1,174,937 | ||||
| 6 | The number of options reported include an aggregate amount of 400,000 options that immediately vested upon Mr. Mattes’ separation from the Company. Such accelerated options remain exercisable for the twenty-four month period following his termination. |
| 2018 PROXY STATEMENT | | 71 |
EXECUTIVE COMPENSATION MATTERS |
2017 OPTION EXERCISES AND STOCK VESTED
OPTION AWARDS1 | STOCK AWARDS | ||||||||||||||||||||||||
| NAME |
NUMBER OF (#) | VALUE ($) | NUMBER OF (#) | VALUE ($) | |||||||||||||||||||||
Dr. Juergen Wunram
| 90,999 | 3,067,863 | — | — | |||||||||||||||||||||
Christopher A. Chapman
| — | — | 7,925 | 218,565 | |||||||||||||||||||||
Andreas W. Mattes
| — | — | 163,980 | 3 | 4,139,996 | ||||||||||||||||||||
Jonathan B. Leiken
| — | — | 7,914 | 222,229 | |||||||||||||||||||||
Dr. Ulrich Näher
| — | — | — | — | |||||||||||||||||||||
Olaf Heyden
| — | — | — | — | |||||||||||||||||||||
Eckard Heidloff
| 127,398 | 4,294,661 | — | — | |||||||||||||||||||||
| 1 | Mr. Heidloff and Dr. Wunram’s 2013 options, previously granted by Wincor Nixdorf, were cash settled. They did not receive any shares upon exercise. The value realized on exercise was€3,941,394 for Mr. Heidloff and€2,815,509 for Dr. Wunram. These amounts were converted to U.S. dollars using the Euro to U.S. dollar foreign currency exchange rate on April 30, 2017. |
| 2 | The value realized is calculated by multiplying the number of shares of stock by the market value of the underlying securities on the vesting date. The number of shares actually received upon vesting may be less than the number shown, due to shares being withheld for the payment of applicable taxes. The value realized for Mr. |
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit1 ($) | Payments During Last Fiscal Year ($) | ||||
| Andreas W. Mattes | - | - | - | - | ||||
| Christopher A. Chapman | Qualified Retirement Plan | 19.3333 | 219,971 | - | ||||
| Pension Restoration SERP | 19.3333 | 104,408 | - | |||||
| Jonathan B. Leiken | - | - | - | - | ||||
| Stefan E. Merz | - | - | - | - | ||||
| Sheila M. Rutt | Qualified Retirement Plan | 15.2500 | 230,780 | - | ||||
| Pension SERP | 15.2500 | 86,282 | - | |||||
| Pension Restoration SERP | 15.2500 | 269,020 | - | |||||
| George S. Mayes, Jr. | - | - | - | - | ||||
| 3 | This number does not include Mr. Mattes’ 2015-2017 performance-based shares as these shares vested in 2018. |
2017 PENSION AND RETIREMENT BENEFITS
NAME | PLAN NAME | NUMBER OF YEARS CREDITED SERVICE (#) | PRESENT VALUE OF ACCUMULATED BENEFIT ($) | PAYMENTS DURING LAST FISCAL YEAR ($) | |||||||||||||
Dr. Juergen Wunram | Wincor Nixdorf AG Pension Scheme | 10.83 | 1,629,410 | 1 | — | ||||||||||||
Christopher A. Chapman | Qualified Retirement Plan | 21.333 | 307,077 | 2 | — | ||||||||||||
Pension Restoration SERP | 21.333 | 145,751 | 2 | — | |||||||||||||
Andreas W. Mattes | — | — | — | — | |||||||||||||
Jonathan B. Leiken | — | — | — | — | |||||||||||||
Dr. Ulrich Näher | Wincor Nixdorf AG Pension Scheme | 3.00 | 203,976 | 1 | — | ||||||||||||
Olaf Heyden | Wincor Nixdorf AG Pension Scheme | 4.67 | 319,163 | 1 | — | ||||||||||||
Eckard Heidloff | Wincor Nixdorf AG Pension Scheme | 34.25 | 1,992,967 | 1 | — | ||||||||||||
| 1 | For Drs. Wunram and Näher and Messrs. Heyden and Heidloff, the present value of accumulated benefit is based on projected benefits earned through age 60, respectively, assuming a discount rate of 1.4%, and that there is no probability of termination, retirement, death, or disability before normal retirement age. The present value of accumulated benefit for Drs. Wunram and Näher and Messrs. Heyden and Heidloff is€1,358,000,€170,000,€266,000 and€1,661,000, respectively. The dollar amounts reflected in the table were calculated using the Euro to U.S. dollar foreign currency exchange rate on December 31, 2017. |
| 2 | For Mr. Chapman, the values are determined based on a |
| 72 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
Mr. Chapman and Ms. Rutt currently participateparticipates in the Diebold Nixdorf, Incorporated Retirement Plan for Salaried Employees, or Qualified Retirement Plan, which provides funded,tax-qualified benefits under the Internal Revenue Code to all salaried andnon-union hourly U.S.-based employees who were hired before July 1, 2003. This plan provides benefits that are limited by Internal Revenue Code requirements applicable to alltax-qualified pension plans. As noted above, we also maintain defined benefit Supplemental Executive Retirement Plans, or SERPs, which provide unfunded,non-qualified benefits to select executives. The purpose of the SERPs is to provide additional benefits above those provided under the Qualified Retirement Plan. Accruals in the Qualified Retirement Plan and the defined benefit SERPs were frozen as of December 31, 2013.
QUALIFIED RETIREMENT PLAN
The benefit provided under the Qualified Retirement Plan is payable as a life annuity beginning at normal retirement age (age 65). The benefit is determined based on the following formula:
In addition, a benefit equal to $50.40 times the number of years of service (subject to a maximum of 30 years) is added to the amount determined above.
Final average compensation is an average of the five highest consecutive full calendar years of salary and bonus out of the last ten full calendar years, with each year’s compensation held to a maximum of the IRS compensation limit for that year. The participant’s individual "Covered Compensation"“Covered Compensation” is as defined under the Internal Revenue Code. The benefit is payable for the lifetime of the participant, with alternative forms of payment available to the participant with an actuarial reduction.
Participants may retire early if they are at least age 50 and the sum of their age plus service is at least 70, or at any age with 30 years of service. Benefits may begin upon retirement on an actuarially reducedactuarially-reduced basis. Participants with at least 15 years of service who become disabled while employed are eligible for
an immediate unreduced benefit. Participants terminating with at least five years of service are entitled to a deferred vested benefit at age 65, or may commence the benefit on an actuarially reducedactuarially-reduced basis, if they are at least age 50 and the sum of their age plus service is at least 70.
PENSION RESTORATION SERP
Benefits under the Pension Restoration SERP are determined using the same formula as stated above for the Qualified Retirement Plan except the IRS compensation limit is ignored. Net benefits payable from the Pension Restoration SERP at age 65 equal the difference between the benefit determined using total pensionable pay, ignoring qualified plan compensation limits, and the benefit payable from the Qualified Retirement Plan. All other provisions of the Pension Restoration SERP are identical to the Qualified Retirement Plan with the exception of the actuarial reduction factors for retirement before age 65. Mr. Chapman and Ms. Rutt areis the only NEOsNEO who participateparticipates in the Pension Restoration SERP. The Pension Restoration SERP was amended in 2013 to freeze all future benefit accruals after December 31, 2013.
PRESENT VALUE OF ACCUMULATED BENEFITS
The Pension SERP provides a supplemental monthly retirement benefit in an amount such that a participant’s total retirement benefit from the Qualified Retirement Plan, the Pension Restoration SERP, the annuity equivalent of the projected employer-provided balance in the 401(k) Restoration SERP (assuming a 3% employer match and a fixed rate of return of 8%) and the Pension SERP, plus one-half of the participant’s anticipated Social Security benefit payable at age 65, equals 50% (pro-rated for less than 25 years of service) of the participant’s final average compensation received from us during the highest five consecutive full calendar years of the last ten full calendar years of employment. Compensation is defined for this purpose as salary plus bonus accrued for each such calendar year. The Pension SERP benefits are payable at age 65 as a straight life annuity. Joint and survivor options are available on an actuarially equivalent basis. Benefits are available to participants retiring or terminating employment with at least 10 years of service, and are payable at the later of (1) attaining both the age of 50 and 70 points (determined by age plus years of service), or (2) separation from service (on a reduced basis if payments begin before age 65). Participants who become disabled while employed and have at least 15 years of service are eligible for an immediate benefit. The Pension SERP was amended in 2013 to freeze all future benefit accruals after December 31, 2013.
The normal retirement age is defined as age 65 for the Qualified Retirement Plan and Pension Restoration SERP and Pension SERP. We used certain assumptions to determine thesingle-sum value of the annual benefit that is payable beginning at normal retirement age. The key assumptions are as follows:
The normal retirement age for Drs. Wunram and Näher and Messrs. Heyden and Heidloff under the Wincor Nixdorf AG Pension Scheme is 60. The key assumptions are as follows:
| 401(k) Restoration SERP and 401(k) SERP | ||||||||||
| Name | Executive Contributions in 20151 ($) | Registrant Contributions in 20152 ($) | Aggregate Losses in 20153 ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance as of December 31, 20154 ($) | |||||
| Andreas W. Mattes | 146,336 | 87,802 | (8,930) | — | 398,431 | |||||
| Christopher A. Chapman | — | — | — | — | — | |||||
| Jonathan B. Leiken | 3,385 | 2,031 | (484) | — | 32,131 | |||||
| Stefan E. Merz | 123,771 | 19,086 | (4,515) | — | 161,636 | |||||
| Sheila M. Rutt | 26,211 | 15,727 | (1,877) | — | 231,200 | |||||
| George S. Mayes, Jr. | 15,231 | 9,138 | (7,816) | — | 1,191,915 | |||||
| 2018 PROXY STATEMENT | | 73 |
EXECUTIVE COMPENSATION MATTERS |
2017NON-QUALIFIED DEFERRED COMPENSATION
NAME
|
EXECUTIVE CONTRIBUTIONS IN 20171 ($)
| REGISTRANT CONTRIBUTIONS IN 20172 ($)
| AGGREGATE EARNINGS IN 20173 ($)
| AGGREGATE WITHDRAWALS/ DISTRIBUTIONS ($)
| AGGREGATE BALANCE 20174 ($)
| ||||||||||||||||||||
Dr. Juergen Wunram
| — | — | — | — | — | ||||||||||||||||||||
Christopher A. Chapman
| — | — | — | — | — | ||||||||||||||||||||
Andreas W. Mattes
| 73,636 | 44,181 | 108,636 | — | 780,611 | ||||||||||||||||||||
Jonathan B. Leiken
| 10,207 | 6,124 | 11,788 | — | 69,445 | ||||||||||||||||||||
Dr. Ulrich Näher
| — | — | — | — | — | ||||||||||||||||||||
Olaf Heyden
| — | — | — | — | — | ||||||||||||||||||||
Eckard Heidloff
| — | — | — | — | — | ||||||||||||||||||||
| 1 | These amounts are included in the |
2 | These amounts are included in the |
3 | These amounts represent aggregate |
4 | This column reflects the balance of all contributions and the aggregate earnings (or losses) on such contributions. No portion of this amount is reflected in the |
NON-QUALIFIED DEFERRED COMPENSATION PLANS
DEFERRED INCENTIVE COMPENSATION PLAN NO. 2
Pursuant to our 1992 Deferred Incentive Compensation Plan, certain executives, including the NEOs, were able to defer cash bonuses received under our Annual Cash Bonus Plan and performance-based share awards earned under the 1991 Plan; however, none of the NEOs were participants in this Deferred Incentive Compensation Plan in 2015.2017. Effective December 31, 2004, as a result of the passage by Congress of the American Jobs Creation Act of 2004, we elected to freeze the 1992 Deferred Incentive Compensation Plan and closed the plan to future deferrals. Effective January 1, 2005, the Board approved the Deferred Incentive Compensation Plan No. 2, which is substantially similar
Under the Deferred Incentive Compensation Plan No. 2, an executive may defer all or a portion of his or her annual cash
bonus or performance-based share amount. Deferral elections for cash bonuses must be made prior to the end of the year preceding the year in which such bonuses would be earned (and payable in the following year). Deferral elections for performance-based shares must be made at least six months prior to the end of the three-year performance period specified in the grant.
Deferrals of performance-based shares are treated as a line-item in the executive’s deferred account with us; however, the earnings on the performance shares (dividends and interest) are invested in the same manner as deferrals of cash compensation. Executives may invest such cash deferrals in any funds available under our 401(k) plan, except the Northern Trust, and Invesco Stable Value Fund and Diebold Inc. Stock Fund. The table below shows the funds available under the deferred compensation plans and their annual rate of return for the year ended December 31, 2015,2017, as reported by Merrill Lynch.
| 74 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
MERRILL LYNCH FUNDS
NAME OF FUND
|
RATE OF RETURN
|
NAME OF FUND
|
RATE OF RETURN
| |||||||||
Federated International CL IS
|
|
28.30
|
%
|
Vanguard Target Retirement 2060
|
|
21.42
|
%
| |||||
Invesco Diversified DIV CL R5
|
|
8.53
|
%
|
Loomis Sayles Bond FD Instl
|
|
7.48
|
%
| |||||
Janus Triton Fund CL I
|
|
27.07
|
%
|
Loomis Sayles Small Cap Value Instl
|
|
10.02
|
%
| |||||
John Hancock Disciplined Value Mid Cap Instl
|
|
15.64
|
%
|
Vanguard Institutional Index
|
|
21.79
|
%
| |||||
Vanguard Target Retirement 2015
|
|
11.50
|
%
|
Vanguard Total Bond Market Instl
|
|
3.57
|
%
| |||||
Vanguard Target Retirement 2020
|
|
14.13
|
%
|
VanguardMid-Cap Index Fund
|
|
19.12
|
%
| |||||
Vanguard Target Retirement 2025
|
|
15.94
|
%
|
Vanguard PrimecapFD-ADM CL
|
|
29.61
|
%
| |||||
Vanguard Target Retirement 2030
|
|
17.57
|
%
|
Vanguard Target Income Retirement
|
|
8.54
|
%
| |||||
Vanguard Target Retirement 2035
|
|
19.14
|
%
|
T Rowe Price Blue Chip Growth
|
|
36.55
|
%
| |||||
Vanguard Target Retirement 2040
|
|
20.73
|
%
|
Oppenheimer Developing Markets Fund Y
|
|
35.10
|
%
| |||||
Vanguard Target Retirement 2045
|
|
21.47
|
%
|
American Balanced Fund R5
|
|
15.77
|
%
| |||||
Vanguard Target Retirement 2050
|
|
21.47
|
%
|
BlackRock Liquidity FD T Instl
|
|
0.75
|
%
| |||||
Vanguard Target Retirement 2055
|
|
21.47
|
%
| |||||||||
| Name of Fund | Rate of Return | Name of Fund | Rate of Return |
| Allianzgi NFJ Intrnl VAL Instl | (13.15)% | Vanguard Target Retirement 2055 | (1.720)% |
| Calamos International Growth I | 2.99% | Vanguard Target Retirement 2060 | (1.68)% |
| Invesco Diversified DIV CL R5 | 2.09% | Loomis Sayles Bond FD Instl | (6.86)% |
| Janus Triton Fund CL I | 1.35% | Loomis Sayles Small Cap Value Instl | (3.36)% |
| John Hancock Disciplined Value Mid Cap Instl | 2.06% | Vanguard Institutional Index | 1.37% |
| Vanguard Target Retirement 2010 | (0.2)% | Vanguard Total Bond Market Instl | 0.41% |
| Vanguard Target Retirement 2015 | (0.46)% | Vanguard Mid-Cap Index Fund | (1.46)% |
| Vanguard Target Retirement 2020 | (0.68)% | Vanguard Primecap FD-ADM CL | 2.64% |
| Vanguard Target Retirement 2025 | (0.85)% | Vanguard Target Income Retirement | (0.17)% |
| Vanguard Target Retirement 2030 | (1.03)% | T Rowe Price Blue Chip Growth | 11.15% |
| Vanguard Target Retirement 2035 | (1.26)% | Oppenheimer Developing Markets Fund Y | (13.84)% |
| Vanguard Target Retirement 2040 | (1.59)% | FFI Institutional Fund | 0.03% |
| Vanguard Target Retirement 2045 | (1.57)% | American Balanced Fund R5 | 1.98% |
| Vanguard Target Retirement 2050 | (1.58)% | ||
Executives deferring under the Deferred Incentive Compensation Plan No. 2 select their period of deferral and method of payment at the time of making their deferral elections. Executives may elect to defer their payments until a specified date or until the date they cease to be an associate of the Company. Further, the executives may elect to receive their distribution either as a lump sum or in approximately equal quarterly installments, not to exceed 40 installments.
401(K) RESTORATION SERP
The 401(k) Restoration SERP is designed to replace lost retirement benefits due solely to IRS compensation limits.
Benefits under this plan are determined exactly as in our 401(k) Plan except that compensation limits are ignored. NEOs are permitted to elect to defer compensation above the annual IRS limit and we provide a matching contribution at the same rate as under the 401(k) Plan. Both the salary deferrals and our matching contributions may be invested in any funds available under our Deferred Incentive Compensation Plan No. 2 (except the Northern Trust and Invesco Stable Value Fund). All of the NEOs, except for Mr. Chapman,Messrs. Mattes and Leiken participate in the 401(k) Restoration SERP.
GERMAN PENSION BENEFITS
Drs. Wunram and Näher and Messrs. Heyden and Heidloff participate in the Qualified RetirementWincor Pension Plan pursuant to their service agreements. The Wincor Pension Plan is a contribution-defined pension system, and Pension SERP. Contributionsis based on aone-time payout or up to ten annual installment payments. They are entitled to the pension payments when reaching the age of sixty. However, if they remain on the Wincor Nixdorf management board in prior years were based uponan active capacity beyond this period,
the receipt of retirement benefits will be deferred until the end of their service agreement. In the event that the executive continues to hold a points formula (age plus service) as follows:
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The amount of compensation payable to each NEO (other than Mr. Mayes) upon voluntary or involuntary termination (with and without cause), retirement, death, disability or in the event of achange-in-control (with and without termination) is described qualitatively in the following narrative and is shown
quantitatively in the table below. The amounts shown assume that such termination orchange-in-control was effective as of December 31, 2015,2017, include amounts earned through such date, and are estimates of the amounts that would be paid out to the executives upon his or her termination orchange-in-control.
| 2018 PROXY STATEMENT | | 75 |
EXECUTIVE COMPENSATION MATTERS |
The actual amounts to be paid out can only be determined at the time of each NEO’s separation. Each NEO except Mr. Mattes participatesMessrs. Chapman and Leiken participate in our Severance Policy. Drs. Wunram and Näher and Mr. Mattes has anHeyden have employment agreementagreements and histheir rights upon termination are set forth in those agreements. The employment agreements for Drs. Wunram and Näher and Mr. Heyden are structured in a different manner from the other NEOs with respect to termination payments, and so we have summarized their rights to payments separately, immediately following the discussion of the other NEOs that agreement.follows. Our stock price as of December 31, 20152017 was $30.09. As$16.35.
PAYMENTS AND BENEFITS IN CONNECTION WITH MR. MATTES’ SEPARATION
On December 13, 2017, Mr. Mayes leftMattes’ employment with the Company ended. This event was treated as a termination without cause under his employment agreement and related release, and therefore Mr. Mattes received (i) a lump sum in the amount of $4,500,000, which is equal to (A) two times his annual base salary ($937,500) and (B) two times his annual incentive award at target ($1,312,500), (ii) a lump sum payment in the amount of $249,555, which represents (A) the prorated attainment of his personal goals/key initiatives based on his assumed target level of performance and (B) the actual annual incentive that would have been payable to him based on the Company’s actual performance against applicable goals on a prorated basis, and (iii) $72,115, which represents unpaid salary and accrued vacation pay. With respect to Mr. Mattes’ equity awards, (i) all outstanding and unvested stock options vested immediately and will remain exercisable for twenty-four months (or the earlier expiration), (ii) all restrictions on unvested restricted stock and RSUs immediately lapsed and becamenon-forfeitable on apro-rata basis and (iii) all unearned performance-based shares and performance units are paid out based on actual performance on apro-rata basis. As a result of the agreement, Mr. Mattes had options to purchase 852,848 common shares at the effective July 24, 2015,date and is eligible to receive 49,258 RSUs (based on applicable withholdings) under his outstanding award agreements. Upon completion of the disclosurevarious performance periods, he will be eligible to receive an aggregate of 140,787 performance units, multiplied by the percentage of attainment of the applicable performance measures governing such awards. Mr. Mattes is also eligible for the continuation of medical, dental, vision and Company-paid basic life insurance coverage for the shorter of (i) two years following the separation and (ii) the date he
receives equivalent coverage from a subsequent employer. The Company also agreed to provide Mr. Mattes certain financial planning services not to exceed $32,000, certain legal fees related to his separation not to exceed $18,500 and annual executive physicals in this section for him covers2018 and 2019. In consideration of these payments, Mr. Mattes provided a release to the Company and remains subject to noncompetition and nonsolicitation restrictions.
PAYMENTS AND BENEFITS IN CONNECTION WITH MR. HEIDLOFF’S SEPARATION
In connection with the effectiveness of the domination and profit and loss transfer agreement, Mr. Heidloff resigned from his actual separation-related paymentsposition as President of our Company effective March 31, 2017. Mr. Heidloff and benefits.
Mr. MayesHeidloff had 136,496291,579 outstanding, unvested stock options as of his separation date,date. These stock options did not lapse, and he retained the right to exercise these options in accordance with the terms of his service agreement. In addition, Mr. Heidloff’s Separation Agreement provided that if the employees of Diebold Nixdorf AG received an offer to convert their Wincor Nixdorf options, Mr. Heidloff would be entitled to the same offer. Mr. Heidloff accepted Diebold Nixdorf AG’s subsequent offer to employees to replace his outstanding Wincor Nixdorf options. He agreed to cancel all of which immediately vested and 47,854 of which were underwater as of the separation date. The aggregate intrinsic value of these acceleratedhis outstanding options was $150,581 (calculated by multiplying (i) the difference between the closing market price of our shares on Mr. Mayes’ separation date ($33.61) and the applicable option exercise price, by (ii) the number of "in-the-money" options). Mr. Mayes’ options will generally remain exercisable until July 31, 2016 (or the earlier scheduled expiration date). A pro rata portion of Mr. Mayes’ outstanding RSUs vested upon his separation, calculated based upon the time employed in the year of termination relative to the RSU vesting period andexchange for a DN Performance Award with an aggregate target value of $574,429 as of his separation date. His accelerated RSUs were settled in 2016 in accordance with 409A. He will receive pro rata performance-based share amounts (except under the Transformation Grant), based upon the time employed relative to the performance periods, based on actual performance, and payable when such awards are generally paid to others. To that end, he received 6,310 shares in February 2016 in payment of his 2013-2015 performance share award, which shares had$5,194,530, effective May 1, 2017. Mr. Heidloff’s Separation Agreement also contains a value of $189,868 based on our stock price as of year-end. The value of his pro rated 2014-2016 and 2015-2017 performance-based share awards will depend on the actual level of performance that is ultimately achieved and our share price at the time of payment, but if the performance is achieved at the target level for each of those awards, Mr. Mayes would receive 11,294 and 4,812 shares, respectively, which would have had an approximate value of $379,591 and $161,731, respectively, as of his separation date. Mr. Mayes forfeited any rights that he had in any performance shares under the Transformation Grant.
| 76 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
PAYMENTS MADE UPON TERMINATION—MESSRS. CHAPMAN AND LEIKEN
VOLUNTARY WITHOUT GOOD REASON OR INVOLUNTARY WITH CAUSE
Whether a NEO’s employment terminates voluntarily without "good reason"“good reason” or terminates involuntarily with "cause"“cause” (as those terms may be defined in various agreements), he or she is generally only entitled to base salary earned through the date of termination, along with any deferred compensation earnings payable upon separation from service and any benefits that have accrued under our Qualified Retirement Plan and any SERP or 401(k) plan (except that no employer-paid SERP benefits are payable in the event of involuntary termination with cause). The Qualified Retirement Plan benefit, under both termination scenarios, and the SERP benefit, if termination is voluntary, is determined as described in "2015“2017 Pension and Retirement Benefits"Benefits” above. For Mr. Chapman, and Ms. Rutt, the values shown reflect the present value of the normal retirement benefit at age 65 for the Qualified Retirement Plan and for the Pension Restoration SERP and the nonqualified defined contribution plan values shown reflect the vested balances in the 401(k) Restoration SERP. If termination is involuntary with cause, only the portion of the 401(k) Restoration Plan benefit derived from employee contributions and qualified defined benefit plan vested benefit are payable to the NEO. The entire 401(k) SERP balance is forfeited if termination is involuntary with cause. The 401(k) SERP and 401(k) Restoration SERP balances are not payable until the NEO attains age 55.
INVOLUNTARY WITHOUT CAUSE OR VOLUNTARY WITH GOOD REASON
If a NEO is involuntarily terminated without cause, he or she is entitled to the following (subject to a general release of claims and acknowledgment of the executive’s confidentiality,non-competition and other applicable obligations):
| • | A Qualified Retirement Plan benefit using the plan provisions as described in “2017 Pension and Retirement Benefits” above; and |
The Pension SERP, Pension Restoration SERP, 401(k) SERP and 401(k) Restoration SERP do not provide any additional benefits upon an involuntary termination. The NEO is only entitled to a SERP benefit if he or she otherwise qualifies for a normal, early or deferred vested SERP benefit at termination.
For Mr. Chapman, and Ms. Rutt, the values shown reflect the present value of the normal retirement benefit at age 65 for the Qualified Retirement Plan. The nonqualified defined benefit plan values shown reflect the present value of the normal retirement benefit at age 65 as well. For Messrs. Mattes,Mr. Leiken, Merz, Mayes and Ms. Rutt, the nonqualified defined contribution plan values shown reflect the vested balances in the 401(k) Restoration SERP.
For all applicable NEOs, we have included the value of their vested nonqualified defined contribution balances, footnoting that these amounts are not payable until the NEO attains age 55.
Pursuant to the Severance Policy, if a NEO terminates his or her employment due to the occurrence of any of the following events without his or her consent and following our right to cure, each of which constitute the basis for "good“good reason,"” he or she will be entitled to receive the payments and benefits discussed immediately above:
On January 31, 2018, we entered into an agreement with Mr. Chapman related to the potential accelerated vesting of
| 2018 PROXY STATEMENT | | 77 |
EXECUTIVE COMPENSATION MATTERS |
his performance based shares, RSUs, options and other types of equity that may be granted in the near future. If Mr. Mattes’Chapman’s employment agreement, if we decide not to renew Mr. Mattes’ employment agreement and his employment terminatesis terminated other than for cause or if Mr. Mattes terminates his employment with "good reason"he leaves our employ for good reason during the two years after we hire a new chief executive officer, then he will be entitleddeemed to receivehave met certain age and continuous service requirements necessary for the paymentscontinued or accelerated vesting for the performance shares, RSUs, options and benefits discussed above for a termination without cause. "Good reason" is defined as the occurrence of any of the following events, without Mr. Mattes’ written consent and following our opportunity to cure:
PAYMENTS MADE UPON RETIREMENT
Generally, in the event of the retirement of a NEO at or after the earliest voluntary retirement age, in addition to the benefits identified above under "“Voluntary Without Good Reason or Involuntary With Cause,"” he or she is entitled to the following:
In 2015,2017, Mr. Chapman did not satisfy the retirement eligibility conditions for either the Qualified Retirement Plan or the Pension Restoration SERP. Similarly, in 2015, Ms. Rutt did not satisfy the retirement eligibility conditions for the Qualified Retirement Plan, the Pension Restoration SERP, or the Pension SERP.
The amountsamount shown for Messrs. Mattes,Mr. Leiken Merz, Mayes and Ms. Rutt also includeincludes the value of theirhis vested nonqualified defined contribution balance in the 401(k) Restoration SERP. Retirement eligibility is age 55 under the 401(k) SERP and the 401(k) Restoration SERP.
PAYMENTS MADE UPON DEATH OR DISABILITY
In the event of the death of a NEO, (other than Mr. Mattes, whose treatment is summarized below), the NEO or his or her estate or beneficiaries receives:
If a NEO (other than Mr. Mattes, whose treatment is summarized below) has a termination from employment for disability that is a "separation“separation from service,"” as that term is defined in Section 409A of the Internal Revenue Code, the NEO has the right to receive the same benefits as if he or she were terminated without cause, as listed above, except that the Transformation Grant will vest on a pro-rated basis together with all other performance-based grants.
NEOs who die while actively employed are eligible for surviving spouse benefits from the Qualified Retirement Plan payable at the NEO’s normal retirement date (or on an actuarially reducedactuarially-reduced basis at an early retirement date) if the NEO had at least five years of service. The benefit is equal to 50% of the benefit payable if the NEO terminated employment on the date of his death, survived to the payment date as elected by his or her spouse, and elected to begin receiving the 50% joint and survivor form of payment. Benefits payable to the surviving spouse upon death of the NEO from the Pension SERP and the Pension Restoration SERP are payable at the later of the executive’s early retirement date or date of death. For the Pension SERP, the death benefit is equal to the benefit that would have been payable to the NEO if he or she terminated employment on the date of death and survived to his or her first payment date. NEOs must have ten years of service at the time of death for death benefits to be payable under the Pension SERP. For the Pension Restoration SERP, the death benefit is equal to 50% of the benefit, actuarially adjusted for the difference in age between the NEO and spouse, that would have been payable to the executive if he or she terminated employment on the date of death and survived to his or her first payment date. NEOs must have five years of service at the time of death for death benefits to be payable under the Pension Restoration SERP. The 401(k) SERP and 401(k) Restoration SERP paypays a death benefit equal to the executive’s plan account if the executive had ten years of service and three years of service, respectively.
Disability benefits are payable immediately on an unreduced basis from the Qualified Retirement Plan based on service at the date of disability if the NEO had at least 15 years of service and was determined to be totally and permanently disabled.
| 78 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
Disability benefits under the Pension SERP, Pension Restoration SERP, and 401(k) SERP are payable immediately on an unreduced basis for disability after the NEO has at least 15 years of service. Disability benefits under the 401(k) Restoration SERP are payable immediately on an unreduced basis.
For the defined benefit plans, we have shown the present value of the death benefits payable to the NEO’s spouse (except for Ms. Rutt) in case of the NEO’s death as of December 31, 2015.2017. For the Qualified Retirement Plan Pension SERP and Pension Restoration SERP, the values shown reflect the present value of the early retirement benefits.
Under the disability scenario for the defined benefit plans, we have reflected the present value of the immediately payable benefit if the NEO is eligible for disability as of the measurement date. In determining the value of the disability benefits, we used theRP-2014 Disabled Retirees mortality table with fully generational projection using MP-2014MP-2017 and the assumptions noted under "
For both the death and disability scenarios, for all NEOs, we have included the value of their vested nonqualified defined contribution balances which are payable immediately.
PAYMENTS UPON A TERMINATION FOLLOWING ACHANGE-IN-CONTROL
Pursuant to thechange-in-control agreements described previously, as well as Mr. Mattes’ employment agreement, following achange-in-control the term of employment for each NEO will extend until at least the third anniversary of the change-in-control (two years for Mr. Mattes).change-in-control. If, within that time period, an NEO’s employment is terminated without cause or if the NEO terminates his or her employment for good reason, the NEO is entitled to the following benefits:
Pursuant to the terms of the applicable equity compensation agreements, if following thechange-in-control the NEO is terminated without cause or he or she terminates employment for good reason, the NEO is entitled to the following benefits:
For all of these agreements, achange-in-control is deemed to occur upon any of the following events (subject to limited exceptions described in such agreements):
Further, for purposes of the equity compensation agreements and thechange-in-control agreements, a voluntary termination by a NEO upon achange-in-control will be deemed for good reason upon the occurrence of any of the following events:
| 2018 PROXY STATEMENT | | 79 |
EXECUTIVE COMPENSATION MATTERS |
For purposes of calculating the retirement benefits payable when achange-in-control occurs with termination, each NEO actively employed as of December 31, 20152017 may be entitled to the following:
| • | If participating in the Qualified Pension Retirement Plan and/or Pension Restoration SERP, the benefits are determined using the plan provisions as described in the “2017 Pension and Retirement Benefits” above; |
For the Qualified Retirement Plan, the Pension SERP and the Pension Restoration SERP, we have reflected, in the "
at the later of the executive’s early retirement date or the date of achange-in-control with termination.
For the 401(k) SERP and the 401(k) Restoration SERP, thechange-in-control trigger provides for the immediate vesting of all defined contribution balances, as well as an additional year of employer match. These balances are not payable to the NEO until he has attained at least age 55 under the terms of the nonqualified defined contribution plans. All NEOs are entitled to enhancements due to thechange-in-control provisions, except for Mr. Chapman, who does not participate in the 401(k) SERP or the 401(k) Restoration SERP.
EFFECT OF SECTION 409A on Timing of Payments
With respect to any severance amounts payable to our executives, any amounts that are not exempt from Section 409A of the Internal Revenue Code will be subject to the requiredsix-month delay in payment after termination of service, provided that the executive is deemed a "specified employee"“specified employee” for purposes of Section 409A at the time of termination of service.
POTENTIAL TERMINATION PAYMENTS UNDER SERVICE AGREEMENTS—DRS. WUNRAM AND NÄHER AND MR. HEYDEN
Drs. Wunram and Näher’s and Mr. Heyden’s existing service agreements and offer letters govern payments made upon death, disability, retirement, or termination. They are also eligible for certain benefits under the Wincor Nixdorf pension plan should their service terminate.
VOLUNTARY WITHOUT GOOD REASON OR INVOLUNTARY WITH CAUSE
If the service agreement is terminated by the Company for cause, Drs. Wunram and Näher and Mr. Heyden are generally entitled to base salary earned through the date of termination, along with any amounts provided under the Wincor Pension Plan, and shall forfeit any outstanding DN Performance Awards in their entirety. If Drs. Wunram and Näher and Mr. Heyden voluntarily resign without good reason, they are generally entitled to base salary through the date of termination, along with amounts provided under the Wincor Pension Plan, and do not forfeit any outstanding DN Performance Awards.
VOLUNTARY WITH GOOD REASON
Pursuant to their offer letters, Drs. Wunram and Näher and Mr. Heyden participate in our Senior Leadership Severance Plan, subject to a transition period for certain terminations. If Drs. Wunram or Näher or Mr. Heyden voluntarily terminates his employment for cause or for good reason (as defined in the applicable service and award agreements), he is entitled to the following, in addition to payments under his pension (subject to
a general release of claims and acknowledgment of the executive’s confidentiality,non-competition and other applicable obligations):
| Name | Voluntary or w/Cause ($) | Involuntary w/o Cause or w/ Good Reason ($) | Retirement ($) | Death ($) | Disability ($) | Change in Control w/ Termination ($) | |||||
| Andreas W. Mattes | |||||||||||
| Salary/Bonus | - | 4,762,500 | - | 1,312,500 | 1,312,500 | 4,762,500 | |||||
| Stock options | - | - | - | - | - | - | |||||
Performance shares1 | - | 5,164,241 | - | 5,164,241 | 5,164,241 | 9,467,096 | |||||
| RSUs | - | 1,008,377 | - | 1,838,198 | 1,838,198 | 1,838,198 | |||||
Pension Plans and SERP Benefits2 | 249,020 | 249,020 | 249,020 | 249,020 | 249,020 | 448,719 | |||||
Other Benefits3 | - | 43,043 | - | - | 28,043 | 43,043 | |||||
| Total: | 249,020 | 11,277,181 | 249,020 | 8,563,959 | 8,592,002 | 16,559,5564 | |||||
| Christopher A. Chapman | |||||||||||
| Salary/Bonus | - | 1,980,000 | - | 180,000 | 180,000 | 1,980,000 | |||||
| Stock options | - | 1,659 | - | 1,659 | 1,659 | 1,659 | |||||
Performance shares1 | - | 305,282 | - | 305,282 | 305,282 | 623,284 | |||||
| RSUs | - | 189,090 | - | 198,654 | 198,654 | 198,654 | |||||
Pension Plans and SERP Benefits2 | 324,3795 | 324,379 | - | 95,373 | 1,018,301 | 324,379 | |||||
219,9716 | |||||||||||
Other Benefits3 | - | 41,704 | - | - | - | 26,704 | |||||
| Total: | 324,379 | 2,842,114 | - | 780,968 | 1,703,896 | 3,154,6804 | |||||
| 219,971 | |||||||||||
| Jonathan B. Leiken | |||||||||||
| Salary/Bonus | - | 1,360,000 | - | 160,000 | 160,000 | 1,760,000 | |||||
| Stock options | - | - | - | - | - | - | |||||
Performance shares1 | - | 248,191 | - | 248,191 | 248,191 | 466,726 | |||||
| RSUs | - | 23,160 | - | 75,797 | 75,797 | 75,797 | |||||
Pension Plans and SERP Benefits2 | 23,051 | 23,051 | 23,051 | 23,051 | 23,051 | 39,571 | |||||
Other Benefits3 | - | 35,060 | - | - | - | 26,747 | |||||
| Total: | 23,051 | 1,689,462 | 23,051 | 507,039 | 507,039 | 2,368,8404 | |||||
| Stefan E. Merz | |||||||||||
| Salary/Bonus | - | 1,208,000 | - | 128,000 | 128,000 | 1,568,000 | |||||
| Stock options | - | - | - | - | - | - | |||||
Performance shares1 | - | 353,579 | - | 353,579 | 353,579 | 618,830 | |||||
| RSUs | - | 179,852 | - | 128,875 | 128,875 | 128,875 | |||||
Pension Plans and SERP Benefits2 | 134,363 | 134,363 | 134,363 | 134,363 | 134,363 | 180,644 | |||||
Other Benefits3 | - | 34,969 | - | - | - | 26,625 | |||||
| Total: | 134,363 | 1,910,763 | 134,363 | 744,817 | 744,817 | 2,522,9754 | |||||
| Sheila M. Rutt | |||||||||||
| 80 | | 2018 PROXY STATEMENT | |
| Name | Voluntary or w/Cause ($) | Involuntary w/o Cause or w/ Good Reason ($) | Retirement ($) | Death ($) | Disability ($) | Change in Control w/ Termination ($) | |||||
| Salary/Bonus | - | 1,010,625 | - | 91,875 | 91,875 | 1,316,875 | |||||
| Stock options | - | 2,792 | - | 2,792 | 2,792 | 2,792 | |||||
Performance shares1 | - | 348,718 | - | 348,718 | 348,718 | 617,447 | |||||
| RSUs | - | 206,176 | - | 386,837 | 386,837 | 386,837 | |||||
Pension Plans and SERP Benefits2 | 817,2825 | 817,282 | 231,200 | 231,200 | 1,627,342 | 833,190 | |||||
405,3726 | |||||||||||
Other Benefits3 | - | 25,822 | - | - | - | 14,510 | |||||
| Total: | 817,282 | 2,411,475 | 231,200 | 1,061,422 | 2,547,564 | 3,171,651 | |||||
| 405,372 | |||||||||||
EXECUTIVE COMPENSATION MATTERS |
MUTUALLY AGREED UPON TERMINATION OR SPECIAL CIRCUMSTANCES
While Drs. Wunram and Näher and Mr. Heyden became participants in our Senior Leadership Severance Plan in March of 2017, their participation in this plan is subject to aone-year transition period ending March 30, 2018 for involuntary terminations without cause and mutually agreed upon terminations. During thisone-year transition period, any severance will be calculated by also taking into account the termination payments they would have received under certain provisions contained within their service agreements, with their ultimate termination payment being the greater of the two calculations. The payments that Drs. Wunram and Näher and Mr. Heyden would receive under our Senior Leadership Severance Plan, should it apply, are the same as those that they would receive for a voluntary resignation with good reason as discussed above. As the amounts that Dr. Näher and Mr. Heyden are entitled to receive under the Senior Leadership Severance Plan at December 31, 2017 are greater than the amounts they otherwise would have received under their service agreements, these amounts are reflected in the table below.
Pursuant to their service agreements, if at the time of their termination, the remaining term under their respective service agreements is less than two years, Drs. Wunram and Näher and Mr. Heyden are entitled to their annual fixed remuneration for the remaining term of the agreement on apro-rata basis, which includes: (i) two times base salary, (ii) two times annual cash incentive (one and a half times for Dr. Näher and Mr. Heyden), (iii) two times long-term incentive (one and a half times for Dr. Näher and Mr. Heyden), (iv) two times fringe benefits (insurance premiums and company car payment) and (v) two times pension contributions. Drs. Wunram and Näher and Mr. Heyden are also entitled to receive the following:
performance period, to the extent such awards are earned, payable when such awards are generally paid to others; and |
As the amounts that Dr. Wunram is entitled to receive under his service agreement at December 31, 2017 is greater than the amounts he would otherwise have received under the Senior Leadership Severance Plan, these amounts are reflected in the table below.
PAYMENTS MADE UPON RETIREMENT
Upon retirement, Drs. Wunram and Näher and Mr. Heyden will receive certain benefits under Wincor Pension Plan pursuant to their service agreements as discussed above in the“Benefits and Prerequisites” section. Drs. Wunram and Näher and Mr. Heyden are entitled to the pension payments upon reaching the age of 60. However, if Drs. Wunram or Näher or Mr. Heyden remain on the Diebold Nixdorf AG management board in an active capacity beyond this period, the receipt of retirement benefits will be deferred until the end of his service agreement. In the event of retirement, Drs. Wunram and Näher and Mr. Heyden are also entitled to the following:
As Dr. Wunram has reached the age of 55 and received credit for his years of service with Wincor Nixdorf prior to our business combination, Dr. Wunram’s unvested options and RSUs vest and his performance shares will be determined as if his employment had not terminated.
| 2018 PROXY STATEMENT | | 81 |
EXECUTIVE COMPENSATION MATTERS |
PAYMENTS MADE UPON DEATH
In the event of the death, certain beneficiaries of Drs. Wunram or Naher or Mr. Heyden are entitled to continued payment of his base salary for six months and certain payments under the Wincor Pension Scheme. They are also entitled to the following:
PAYMENTS MADE UPON DISABILITY
Should Drs. Wunram or Näher or Mr. Heyden become unable to work due to disability, he is entitled to receive his base salary for a period of up to eighteen months or when he leaves the Company. After eighteen months, the Company may terminate his service agreement and he will receive pension benefits, even if he has not reached the age of 60. Drs. Wunram and Näher and Mr. Heyden are also entitled to the following:
POST-TERMINATION PAYMENTS TABLES
NAME
| VOLUNTARY W/O GOOD ($)
| INVOLUNTARY ($)
|
INVOLUNTARY W/O CAUSE OR VOLUNTARY REASON ($)
| RETIREMENT ($)
| DEATH ($)
| DISABILITY ($)
| CHANGE IN CONTROL W/ TERMINATION ($)
| ||||||||||||||||||||||||||||
Christopher A. Chapman
| |||||||||||||||||||||||||||||||||||
Salary/Bonus
|
| —
|
|
| —
|
|
| 2,530,000
|
|
| —
|
|
| 230,000
|
|
| 230,000
|
|
| 2,530,000
|
| ||||||||||||||
Stock options
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||
Performance shares1
|
| —
|
|
| —
|
|
| 585,400
|
|
| —
|
|
| 585,450
|
|
| 585,450
|
|
| 1,097,526
|
| ||||||||||||||
RSUs
|
| —
|
|
| —
|
|
| 213,860
|
|
| —
|
|
| 461,838
|
|
| 461,838
|
|
| 461,838
|
| ||||||||||||||
Pension Plans and SERP Benefits2
|
| 452,829
|
|
| 307,077
|
|
| 452,829
|
|
| —
|
|
| 121,078
|
|
| 1,079,662
|
|
| 452,829
|
| ||||||||||||||
Other Benefits3
|
| —
|
|
| —
|
|
| 72,085
|
|
| —
|
|
| —
|
|
| —
|
|
| 28,542
|
| ||||||||||||||
Total:
|
| 452,829
|
|
| 307,077
|
|
| 3,854,174
|
|
| —
|
|
| 1,398,366
|
|
| 2,356,950
|
|
| 4,570,735
| 4
| ||||||||||||||
Jonathan B. Leiken
| |||||||||||||||||||||||||||||||||||
Salary/Bonus
|
| —
|
|
| —
|
|
| 1,615,000
|
|
| —
|
|
| 190,000
|
|
| 190,000
|
|
| 2,090,000
|
| ||||||||||||||
Stock options
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||
Performance shares1
|
| —
|
|
| —
|
|
| 333,371
|
|
| —
|
|
| 333,731
|
|
| 333,731
|
|
| 663,941
|
| ||||||||||||||
RSUs
|
| —
|
|
| —
|
|
| 206,788
|
|
| —
|
|
| 439,014
|
|
| 439,014
|
|
| 439,014
|
| ||||||||||||||
Pension Plans and SERP Benefits2
|
| 69,445
|
|
| 47,476
|
|
| 69,445
|
|
| 69,445
|
|
| 69,445
|
|
| 69,445
|
|
| 73,521
|
| ||||||||||||||
Other Benefits3
|
| —
|
|
| —
|
|
| 42,642
|
|
| —
|
|
| —
|
|
| —
|
|
| 24,570
|
| ||||||||||||||
Total:
|
| 69,445
|
|
| 47,476
|
|
| 2,267,246
|
|
| 69,445
|
|
| 1,032,190
|
|
| 1,032,190
|
|
| 3,291,046
| 4
| ||||||||||||||
| 82 | | 2018 PROXY STATEMENT | |
EXECUTIVE COMPENSATION MATTERS |
| 1 | For all outstanding performance-based awards, we have assumed that the payouts of the awards will be made at target levels. In reality, the payouts may be lower or higher depending upon the actual level of performance achieved in the future. |
2 | The Pension Plans and SERP Benefits amount represents the total value to the NEO under our defined benefit and defined contribution plans, excluding the Qualified 401(k) Plan. The assumptions used to calculate the value of the Qualified Retirement Plan |
3 |
4 | These payments would be subject (in whole or in part) to an excise tax imposed by Section 280G of the Code. In accordance with the NEO’s |
As discussed above, Drs. Wunram and Näher’s and Mr. Heyden’s respective service agreements govern their severance payments. These agreements do not provide change in control protection. Amounts presented in the table below assume a hypothetical termination event as of December 31, 2017 and may vary from the amounts and German law presentation in the Compensation Report included in Diebold Nixdorf’s 16/17 Annual Report. All amounts were converted from Euros to U.S. dollars using the exchange rate on December 31, 2017, which was 1.19986.
NAME
| VOLUNTARY
| INVOLUNTARY W/CAUSE ($)
| VOLUNTARY W/GOOD REASON ($)
|
MUTUALLY AGREED TERMINATION OR SPECIAL CIRCUMSTANCES ($)
| RETIREMENT ($)
| DEATH ($)
| DISABILITY ($)
| ||||||||||||||||||||||||||||
Dr. Juergen Wunram | |||||||||||||||||||||||||||||||||||
Severance | — | — | 2,824,470 | 3,150,939 | — | 577,733 | 1,219,658 | ||||||||||||||||||||||||||||
Stock options | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Performance Shares1 | — | — | 235,233 | 235,233 | 705,699 | 235,233 | 235,233 | ||||||||||||||||||||||||||||
RSUs | — | — | 42,543 | 42,543 | 142,899 | 142,899 | 142,899 | ||||||||||||||||||||||||||||
DN Performance Awards2 | 3,711,467 | — | 3,711,467 | 3,711,467 | 3,711,467 | 2,422,897 | 2,422,897 | ||||||||||||||||||||||||||||
Pension Plan Benefits3 | 1,629,410 | 1,629,410 | 1,629,410 | 1,629,410 | 1,629,410 | 1,629,410 | 1,629,410 | ||||||||||||||||||||||||||||
Other Benefits4 | — | — | 41,206 | — | — | — | — | ||||||||||||||||||||||||||||
Total: | 5,340,877 | 1,629,410 | 8,484,329 | 8,769,592 | 6,189,475 | 5,008,172 | 5,650,097 | ||||||||||||||||||||||||||||
Dr. Ulrich Näher | |||||||||||||||||||||||||||||||||||
Severance | — | — | 1,917,376 | 1,917,376 | — | 507,541 | 1,071,475 | ||||||||||||||||||||||||||||
Stock options | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Performance Shares1 | — | — | 151,701 | 151,701 | — | 151,701 | 151,701 | ||||||||||||||||||||||||||||
RSUs | — | — | 28,033 | 28,033 | — | 94,160 | 94,160 | ||||||||||||||||||||||||||||
DN Performance Awards2 | 2,393,947 | — | 2,393,947 | 2,393,947 | 2,393,947 | 1,413,108 | 1,413,108 | ||||||||||||||||||||||||||||
Pension Plan Benefits3 | 203,976 | 203,976 | 203,976 | 203,976 | 203,976 | 203,976 | 203,976 | ||||||||||||||||||||||||||||
Other Benefits4 | — | — | 33,822 | 33,822 | — | — | — | ||||||||||||||||||||||||||||
Total: | 2,597,923 | 203,976 | 4,728,855 | 4,728,855 | 2,597,923 | 2,370,486 | 2,934,420 | ||||||||||||||||||||||||||||
Olaf Heyden | |||||||||||||||||||||||||||||||||||
Severance | — | — | 1,917,376 | 1,917,376 | — | 507,541 | 1,071,475 | ||||||||||||||||||||||||||||
Stock options | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Performance Shares1 | — | — | 151,701 | 151,701 | — | 151,701 | 151,701 | ||||||||||||||||||||||||||||
RSUs | — | — | 28,033 | 28,033 | — | 94,160 | 94,160 | ||||||||||||||||||||||||||||
DN Performance Awards2 | 2,778,348 | — | 2,778,348 | 2,778,348 | 2,778,348 | 1,775,145 | 1,775,145 | ||||||||||||||||||||||||||||
Pension Plan Benefits3 | 319,163 | 319,163 | 319,163 | 319,163 | 319,163 | 319,163 | 319,163 | ||||||||||||||||||||||||||||
Other Benefits4 | — | — | 34,049 | 34,049 | — | — | — | ||||||||||||||||||||||||||||
Total: | 3,097,511 | 319,163 | 5,228,670 | 5,228,670 | 3,097,511 | 2,847,710 | 3,411,644 | ||||||||||||||||||||||||||||
| 2018 PROXY STATEMENT | | 83 |
EXECUTIVE COMPENSATION MATTERS |
| 1 | For all outstanding performance-based awards, we have assumed that the payouts of the awards will be made at target levels. In reality, the payouts may be lower or higher depending upon the actual level of performance achieved in the future. |
| 2 | For all outstanding DN Performance Awards, we have assumed that the payouts of the awards will be made at target levels. |
| 3 | The pension plan benefits amount represents the total value to Drs. Wunram and Näher and Mr. Heyden under the Wincor Nixdorf AG Pension Scheme. The assumptions used to calculate the value are consistent with those described above under “2017 Pension and Retirement Benefits.” |
| 4 | “Other Benefits” includes, as applicable, the total value of any other contributions by us on behalf of the NEO for health and welfare benefit plans and outplacement services, which the NEO was eligible to receive as of December 31, 2017. |
| 84 | | 2018 PROXY STATEMENT | |||
|
The Audit Committee is currently comprised of Patrick W. Allender, Chair, Dr. Dieter W. Düsedau, Gale S. Fitzgerald, and Robert S. Prather, Jr. The Audit Committee has reviewed and discussed with our management and KPMG LLP, our independent registered public accounting firm, the audited financial statements contained in our Annual Report to Shareholders for the year ended December 31, The Audit Committee has received and reviewed the written disclosures and the letter from KPMG LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG LLP’s communications with the Audit Committee concerning independence, and has discussed with KPMG LLP its independence. The Audit Committee has also considered whether the provision ofnon-audit services to us by KPMG LLP is compatible with maintaining its independence. Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form10-K for the fiscal year ended December 31, The foregoing report was submitted by the Audit Committee and shall not be deemed to be The Audit Committee: Patrick W. Allender, Chair Dieter W. Düsedau Gale S. Fitzgerald Robert S. Prather, Jr.REPORT OF AUDIT COMMITTEE, and Alan J. Weber. Each member of the committee is independent as defined in the NYSE Listed Company Manual and SEC rules. The primary duties and responsibilities of the committee are (1) to monitor the adequacy of our financial reporting process and systems of internal controls regarding finance, accounting and legal compliance, (2) to monitor the independence and performance of our outside auditors and internal audit department, and (3) to provide an avenue of communication among the outside auditors, management, the internal audit department and the Board. The Board has adopted an Audit Committee Charter, which is available on our web sitewebsite atwww.diebold.comwww.dieboldnixdorf.com.2015.2017. The Audit Committee has also discussed with our independent registered public accounting firm the matters required to be discussed pursuant to SASAS No. 16 "Communications1301 “Communications with Audit Committees,"” issued by the Public Company Accounting Oversight Board (United States) (PCAOB).20152017 filed with the SEC."soliciting material"“soliciting material” or to be "filed"“filed” with the SEC or subject to Regulation 14A promulgated by the SEC or Section 18 of the Exchange Act.The Audit Committee: Patrick W. Allender, Chair2018 PROXY STATEMENT | Gale S. FitzgeraldRobert S. Prather, Jr.Alan J. Weber85
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF OURINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Proposal 2The Audit Committee has again appointed KPMG LLP, our independent registered public accounting firm since 1965, to examine our accounts and other records for the year ending December 31, 2016. This appointment is being presented to you for ratification at the Annual Meeting. If the shareholders fail to ratify the appointment, the Audit Committee will reconsider its selection.KPMG LLP has no financial interest, direct or indirect, in us or any of our subsidiaries.A representative of KPMG LLP is expected to be present at the 2016 Annual Meeting, to make a statement if he or she desires and to respond to appropriate questions.Audit and Non-Audit FeesThe following table shows the aggregate fees billed to us for the annual audit and the review of the interim financial statements and other services provided by KPMG LLP for fiscal 2015 and 2014. 2015 2014 Audit Fees1$4,624,000 $4,289,000 Audit-Related Fees — — Tax Fees2$193,000 356,000 All Other Fees3— — Total $4,817,000 $4,645,000 1Audit Fees consist of fees billed for professional services rendered for the audit of our annual financial statements and the review of the interim financial statements included in quarterly reports and services that are normally provided by KPMG LLP in connection with statutory and regulatory filings.2Tax Fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning, both domestic and international. These services include assistance regarding federal, state and international tax compliance, acquisitions and international tax planning.3All Other Fees consist of fees billed for those services not captured in the audit, audit-related and tax categories. We generally do not request such services from our independent registered public accounting firm and did not incur fees for any such services for 2015 or 2014.Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Our Independent Registered Public Accounting FirmConsistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and non-audit services provided by the independent registered public accounting firm.These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The Audit Committee has delegated pre-approval authority to Patrick W. Allender, Chair of the Audit Committee, when expedition of services is necessary, provided that Mr. Allender must report any decisions to pre-approve to the full Audit Committee at its next scheduled meeting. All of the fees included under the categories "Audit-Related Fees," "Tax Fees" and "All Other Fees" above were pre-approved by the Audit Committee. None of these fees were approved by the Audit Committee after services were rendered pursuant to the de minimis exception established by the SEC.-63-PROPOSAL 3: APPROVAL, ON AN ADVISORY BASIS,OF NAMED EXECUTIVE OFFICER COMPENSATION
Proposal 3In this Proposal 3, as required by Section 14A of the Exchange Act and pursuant to Rule 14a-21(a) promulgated thereunder, we are providing our shareholders the opportunity to cast an advisory (non-binding) vote to approve the compensation paid to our NEOs, as disclosed in "Compensation Discussion and Analysis" and "Executive Compensation" above, pursuant to the compensation rules of the SEC. While this vote is advisory, and thus not binding on the Company, the Board values the opinions of our shareholders and the Compensation Committee will review the results of the vote and expects to take them into consideration when making future decisions regarding named executive officer compensation. Under current Board policy, the shareholder vote for advisory approval of named executive officer compensation will occur annually. After the 2016 Annual Meeting, the next such vote will occur at our 2017 Annual Meeting of Shareholders."Compensation Discussion and Analysis" and "Executive Compensation" above describe our executive compensation program and the decisions and rationale of our Compensation Committee. Our executive pay program is designed to enable us to attract, retain and motivate high quality executives who will provide us with dynamic leadership and are instrumental to our success. We emphasize performance-based variable pay through a mix of base salary, annual cash bonuses and long-term incentives and seek to provide total pay that is commensurate with our performance and competitive with our peer group. Accordingly, we are asking our shareholders to vote FOR the following resolution:"RESOLVED, that the compensation of our named executive officers as disclosed pursuant to the compensation rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and any related material disclosed in this proxy statement, is hereby APPROVED."-64-SHAREHOLDERS SHARING THE SAME ADDRESS
Some banks, brokers and other intermediaries engage in the practice of "householding"“householding” our proxy statements, annual reports and Notice of Internet Availability of Proxy Materials. This means that, if shareholders within the same household request a physical copy of our proxy statement, annual report or Notice of Internet Availability of Proxy Materials, only one copy may be sent to that household unless the shareholders specifically request to receive multiple copies. We will promptly deliver a separate copy of our Annual Report on Form10-K for the year ended December 31, 2015,2017, this proxy statementProxy Statement or Notice of Internet Availability of Proxy Materials
to you if you share an address subject to householding. Please contact our Corporate Secretary at 5995 Mayfair Road, P.O. Box 3077, North Canton, Ohio 44720-8077 or (330) 490-4000.
Please contact your bank, broker or other intermediary if you wish to receive individual copies of our proxy materials in the future. Please contact your bank, broker or other intermediary, or our Corporate Secretary as provided above if members of your household are currently receiving individual copies and you would like to receive a single household copy for future meetings.
The cost of soliciting the proxies will be paid by us. In addition to solicitation by mail, some of our directors, officers and employees, without extra compensation, may conduct additional solicitations by telephone, facsimile and personal interviews. We may also enlist, at our own cost, the assistance of banks, bankers and brokerage houses in additional solicitations of proxies and proxy authorizations, particularly from those of their clients or customers whose shares are not
registered in the clients’ or customers’ own names. Brokers, bankers, etc., will be reimbursed forout-of-pocket and reasonable clerical expenses incurred in obtaining instructions from beneficial owners of the common shares. It is estimated that the expense of such special solicitation will be nominal. In addition, GeorgesonInnisfree has been retained to assist in the solicitation of proxies for an estimated fee of $10,000.$20,000.
We must receive by November 10, 201614, 2018 any proposal of a shareholder intended to be presented at our 20172019 Annual Meeting of Shareholders and to be included in our proxy, notice of meeting and proxy statement related to the 20172019 Annual Meeting pursuant to Rule14a-8 under the Exchange Act. Such proposals should be submitted to our Corporate Secretary at our principal executive office by certified mail, return receipt requested.
Notice of proposals of shareholders submitted outside the processes of Rule14a-8 under the Exchange Act includingregarding the nominations of directors, which a shareholder intends to present at our 20172019 Annual Meeting but which willmust be received by us at our principal executive office on or between October 15, 2018 and November 14, 2018 (or, if the 2019 Annual Meeting is held more than 30 days prior to or after April 25, 2019, not be included in our proxy, noticelater than the close of meeting and proxy statement relatedbusiness on the later of the 180th day prior to the 20172019 Annual Meeting or non-Rule 14a-8the 10th day following the day on which public announcement of the date of the 2019 Annual
Meeting is first made), or such proposals will be considered untimely under the advance notice provisions of our Code of Regulations. Othernon-Rule14a-8 proposals must be received by us at our principal executive office on or between December 10, 201614, 2018 and January 9, 201713, 2019 (or, if the 20172019 Annual Meeting is held more than 30 days prior to or after April 21, 2017,25, 2019, not later than the close of business on the later of the 90th day prior to the 20172019 Annual Meeting or the 10th day following the day on which public announcement of the date of the 20172019 Annual Meeting is first made), or such proposals will be considered untimely under the advance notice provisions of our codeCode of regulations.
Non-Rule14a-8 proposals must comply with certain provisions of our codeCode of regulations.Regulations. Our proxy related to the 20172019 Annual Meeting will give discretionary authority to the Proxy Committee to vote with respect to all non-Rule 14a-8non-Rule14a-8 proposals properly brought before the 20172019 Annual Meeting.
| 86 | | 2018 PROXY STATEMENT | |
We are not aware of any matters to be presented at the 20162018 Annual Meeting other than the matters set forth herein. Should any other matters be presented for a vote of the shareholders, the proxy in the enclosed form confers discretionary voting authority upon the Proxy Committee. In accordance with the provisions of the Ohio Revised Code, the Board has appointed inspectors of elections to act at the 20162018 Annual Meeting.
For information on how to obtain directions to be able to attend the 20162018 Annual Meeting and vote in person, please see the directions at the end of this proxy statementProxy Statement or contact our Corporate Secretary at 5995 Mayfair Road, P.O. Box 3077, North Canton, Ohio 44720-8077 or (330)490-4000.
By Order of the Board of Directors
 | |
| Jonathan B. Leiken | |
| Senior Vice President, Chief Legal Officer and Secretary |
Canton, Ohio
March 14, 2018
| ||||
| 87 |
APPENDIX A
DIEBOLD NIXDORF, INCORPORATED
2017 EQUITY AND PERFORMANCE INCENTIVE PLAN
AMENDED , 2018
ARTICLE I
ESTABLISHMENT AND PURPOSE
1.1 Purpose. The purpose of this Equity and Performance Incentive Plan (this “Plan”) is to attract and retain directors, officers and employees for Diebold Nixdorf, Incorporated (the “Company”) and its Subsidiaries and to provide to such persons incentives and rewards for performance.
1.2 Participation. Persons eligible to participate in this Plan include Employees and Directors. Subject to the provisions of this Plan, the Committee may from time to time select those Employees and Directors to whom Awards shall be granted and shall determine the nature and amount of those Awards. No Employee or Director shall have the right to be granted an Award.
1.3 Duration of the Plan. This Plan shall become effective on the date that it is approved by the Company’s shareholders (the “Effective Date”) and shall remain in effect, subject to the right of the Board to terminate this Plan at any time pursuant to Section 15.1, until all Shares subject to it have been purchased or acquired. However, in no event shall any Award be granted under this Plan on or after the tenth (10th) anniversary of the Effective Date.
ARTICLE II
DEFINITIONS
As used in this Plan,
2.1 “Annual Meeting” means the annual meeting of shareholders of the Company.
2.2 “Award” means any right granted under this Plan, including an Option, a Stock Appreciation Right, a Restricted Share award, a Restricted Stock Unit award, a Performance Share or a Performance Unit award, or an Other Share-Based award.
2.3 “Award Agreement” means an agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee which sets forth the terms and conditions of an individual Award granted under this Plan which may, in the discretion of the Company, be transmitted electronically to the Participant. Each Award Agreement shall be subject to the terms and conditions of this Plan.
2.4 “Board” means the Board of Directors of the Company.
2.5 “Business Combination” has the meaning provided in Section 2.6(c) of this Plan.
2.6 “Change in Control” means the occurrence of any of the following:
(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning ofRule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of either: (A) the then-outstanding shares of common stock of the Company (the “Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of Directors (“Voting Stock”);provided,however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (c) of this Section 2.6; or
(b) Individuals who, as of the date hereof, constitute the Board (as modified by this subsection (b), the “Incumbent Board”), cease for any reason (other than death or disability) to constitute at least a majority of the Board;provided,however, that any individual becoming a Director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for Director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Company Common Stock and Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the Company Common Stock and Voting Stock, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, thirty percent (30%) or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such
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corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
A “Change in Control” will be deemed to occur (i) with respect to a Change in Control pursuant to subsection (a) above, on the date that any Person becomes the beneficial owner of thirty percent (30%) or more of either the Company Common Stock or Voting Stock, (ii) with respect to a Change in Control pursuant to subsection (b) above, on the date the members of the Incumbent Board first cease for any reason (other than death or disability) to constitute at least a majority of the Board, (iii) with respect to a Change in Control pursuant to subsection (c) above, on the date the applicable transaction closes and (iv) with respect to a Change in Control pursuant to subsection (d) above, on the date of the shareholder approval. Notwithstanding the foregoing provisions, a “Change in Control” shall not be deemed to have occurred for purposes of this Plan solely because of a change in control of any Subsidiary by which the Participant may be employed.
2.7 “Code” means the Internal Revenue Code of 1986, as amended from time to time.
2.8 “Committee” has the meaning provided in Section 14.1 of this Plan.
2.9 “Common Shares” means shares of common stock, $1.25 par value per share, of the Company or any security into which such Common Shares may be changed by reason of any transaction or event of the type referred to in Article XI of this Plan.
2.10 “Company Common Stock” has the meaning provided in Section 2.6(a) of this Plan.
2.11 “Date of Grant” means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such later date as is set forth therein.
2.12 “Designated Subsidiary” means a Subsidiary that is (i) not a corporation or (ii) a corporation in which at the time the Company owns or controls, directly or indirectly, less than eighty percent (80%) of the total combined voting power represented by all classes of stock issued by such corporation.
2.13 “Detrimental Activity” means any of the following:
(a) Engaging in any activity, as an employee, principal, agent or consultant for another entity, and in a capacity, that directly competes with the Company or any Subsidiary in any actual product, service, or business activity (or in any product, service, or business activity which was under active development while the Participant was employed by the Company if such development is being actively pursued by the Company during the one (1) year period following the termination of the Participant’s employment by the Company or a Subsidiary) for which the Participant has had any direct responsibility and direct involvement during the last two (2) years of his or her employment with the Company or a Subsidiary, in any territory in which the Company or a Subsidiary manufactures, sells, markets, services, or installs such product or service or engages in such business activity.
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(b) Soliciting any Employee to terminate his or her employment with the Company or a Subsidiary.
(c) The disclosure to anyone outside of the Company or a Subsidiary, or the use in other than the Company or a Subsidiary’s business, without prior written authorization from the Company, of any confidential, proprietary or trade secret information or material relating to the business of the Company and its Subsidiaries, acquired by the Participant during his or her employment with the Company or its Subsidiaries or while acting as a consultant for the Company or its Subsidiaries thereafter;provided,however, that nothing in this Plan limits a Participant’s ability to file a charge or complaint or to communicate, including by providing documents or other information without notice to the Company, with the Securities and Exchange Commission or any other governmental agency or commission (“Government Agency”) or limits a Participant’s right to receive an award for information provided to any Government Agency.
(d) The failure or refusal to disclose promptly and to assign to the Company upon request all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant during the Participant’s employment by the Company or any Subsidiary, relating in any manner to the actual or anticipated business, research or development work of the Company or any Subsidiary or the failure or refusal to do anything reasonably necessary to enable the Company or any Subsidiary to secure a patent where appropriate in the United States and in other countries.
(e) Activity that results in “termination for cause,” as such term is defined in the applicable Award Agreement.
2.14 “Director” means a director of the Company.
2.15 “Disability” means totally and permanently disabled as from time to time defined under the long-term disability plan of the Company or a Subsidiary applicable to the Participant, or, in the case where there is no applicable plan, permanent and total disability as defined in Section 22(e)(3) of the Code (or any successor provision);provided,however, that to the extent an amount payable under this Plan which constitutes deferred compensation subject to Section 409A of the Code would become payable upon Disability, “Disability” for purposes of such payment shall not be deemed to have occurred unless the disability also satisfies the requirements of treasury regulation1.409A-3.
2.16 “EBIT” has the meaning provided in Section 2.24(c) of this Plan.
2.17 “EBITDA” has the meaning provided in Section 2.24(c) of this Plan.
2.18 “Effective Date” has the meaning provided in Section 1.3 of this Plan.
2.19 “Employee” means an employee of the Company or any of its Subsidiaries, including an employee who is an officer or a Director.
2.20 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.
2.21 “Exercise Price” means, with respect to an Option or Stock Appreciation Right, the price at which a Common Share may be purchased upon exercise thereof.
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2.22 “Fair Market Value” means, as of any particular date, the closing price of a Common Share as reported for that date on the New York Stock Exchange or, if the Common Shares are not then listed on the New York Stock Exchange, on any other national securities exchange on which the Common Shares are listed, or if there are no sales on such date, on the next preceding trading day during which a sale occurred. If there is no regular public trading market for the Common Shares, then the Fair Market Value shall be the fair market value as determined in good faith by the Board.
2.23 “Free Standing Rights” has the meaning provided in Section 5.1 of this Plan.
2.24 “Government Agency” has the meaning provided in Section 2.13(c) of this Plan.
2.25 “Incentive Stock Option” means an Option intended to qualify as an incentive stock option under Section 422 of the Code or any successor provision.
2.26 “Incumbent Board” has the meaning provided in Section 2.6(b) of this Plan.
2.27 “Management Goals” means, for a Performance Period, the one or more goals established by the Committee, which, for any Award shall be based only upon the Management Objectives.
(a) The Committee may provide that any evaluation of Management Goals shall include or exclude any of the following items: (i) asset write-downs; (ii) litigation or claim judgments or settlements; (iii) the effect of changes in tax laws, accounting principles, regulations, or other laws or regulations affecting reported results; (iv) any reorganization and restructuring programs; (v) acquisitions or divestitures; (vi) unusual, nonrecurring or extraordinary items identified in the Company’s audited financial statements, including footnotes, or in management’s discussion and analysis in the Company’s annual report; (vii) foreign exchange gains and losses; (viii) change in the Company’s fiscal year; and (ix) any other specific unusual or nonrecurring events, or objectively determinable category thereof.
(b) If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Management Goals unsuitable, the Committee may in its discretion modify such Management Goals or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable.
2.28 “Management Objectives” means the measurable performance objective or objectives selected by the Committee for purposes of establishing the Management Goal(s) for a Performance Period with respect to any Award under this Plan. The Management Objectives that will be used to establish the Management Goals shall be based on the attainment of specific levels of performance of the Company, a Subsidiary, division, business unit, operational unit, department, region or function within the Company or Subsidiary in which the Participant is employed. The Management Objectives applicable to any Award shall be limited to one or more, or a combination, of the following:
(a) Sales, including (i) net sales, (ii) unit sales volume, and (iii) aggregate product price;
(b) Share price, including (i) market price per share, and (ii) share price appreciation;
(c) Earnings, including (i) earnings per share, reflecting dilution of shares, (ii) gross orpre-tax profits,(iii) post-tax profits, (iv) operating profit, (v) earnings net of or including dividends,
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(vi) earnings net of or including theafter-tax cost of capital, (vii) earnings before (or after) interest and taxes (“EBIT”), (viii) earnings per share from continuing operations, diluted or basic, (ix) earnings before (or after) interest, taxes, depreciation and amortization (“EBITDA”), (x)pre-tax operating earnings after interest and before incentives, service fees and extraordinary or special items, (xi) operating earnings, (xii) growth in earnings or growth in earnings per share, and (xiii) total earnings;
(d) Return on equity, including (i) return on equity, (ii) return on invested capital, (iii) return or net return on assets, (iv) return on net assets, (v) return on gross sales, (vi) return on investment, (vii) return on capital, (viii) return on invested capital, (ix) return on committed capital, (x) financial return ratios, (xi) value of assets, and (xii) change in assets;
(e) Cash flow(s), including (i) operating cash flow, (ii) net cash flow, (iii) free cash flow, and (iv) cash flow on investment;
(f) Revenue, including (i) gross or net revenue, and (ii) changes in annual revenues;
(g) Margins, including (i) adjustedpre-tax margin, and (ii) operating margins;
(h) Income, including (i) net income, and (ii) consolidated net income;
(i) Economic value added;
(j) Costs, including (i) operating or administrative expenses, (ii) operating expenses as a percentage of revenue, (iii) expense or cost levels, (iv) reduction of losses, loss ratios or expense ratios, (v) reduction in fixed costs, (vi) expense reduction levels, (vii) operating cost management, and (viii) cost of capital;
(k) Financial ratings, including (i) credit rating, (ii) capital expenditures, (iii) debt, (iv) debt reduction, (v) working capital, (vi) average invested capital, and (vii) attainment of balance sheet or income statement objectives;
(l) Market or category share, including (i) market share, (ii) volume, (iii) unit sales volume, and (iv) market share or market penetration with respect to specific designated products or product groups and/or specific geographic areas;
(m) Shareholder return, including (i) total shareholder return, (ii) shareholder return based on growth measures or the attainment of a specified share price for a specified period of time, and (iii) dividends; and
(n) Objective nonfinancial performance criteria measuring either (i) regulatory compliance, (ii) productivity and productivity improvements, (iii) inventory turnover, average inventory turnover or inventory controls, (iv) net asset turnover, (v) customer satisfaction based on specified objective goals or company-sponsored customer surveys, (vi) employee satisfaction based on specified objective goals or company-sponsored employee surveys, (vii) objective employee diversity goals, (viii) employee turnover, (ix) specified objective environmental goals, (x) specified objective social goals, (xi) specified objective goals in corporate ethics and integrity, (xii) specified objective safety goals, (xiii) specified objective business expansion goals or goals relating to acquisitions or divestitures, (xiv) day sales outstanding, and (xv) succession plan development and implementation.
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Any one or more of the Management Objectives may be used on an absolute, relative or comparative basis to measure the performance, as the Committee may deem appropriate, or as compared to the performance of another company or a group of comparable companies, or published or special index that the Committee, in its sole discretion, deems appropriate, including various stock market indices.
2.29 “Non-Employee Director” means a Director who is a“non-employee director” within the meaning of Rule16b-3.
2.30 “Non-qualified Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
2.31 “Option” means an Incentive Stock Option or aNon-qualified Stock Option granted pursuant to Article IV of this Plan.
2.32 “Other Share-Based Award” means an Award granted pursuant to Article IX, which is payable in, valued in whole or in part by reference to, or otherwise based on or related to Common Shares, excluding any Option, Stock Appreciation Right, Restricted Share, Restricted Stock Unit, Performance Share or Performance Unit.
2.33 “Participant” means an Employee or Director who has been granted an Award under this Plan.
2.34 “Performance Period” means the one (1) or more periods of time (which shall not be less than one fiscal quarter in duration) as the Committee may select, over which the attainment of one or more Management Goals will be measured for purposes of determining a Participant’s right to and the payment of an Award subject to such Performance Period.
2.35 “Performance Share” means a bookkeeping entry that records the equivalent of one (1) Common Share awarded pursuant to Article VIII of this Plan.
2.36 “Performance Unit” means a bookkeeping entry that records a unit equivalent to $1.25 awarded pursuant to Article VIII of this Plan.
2.37 “Person” has the meaning provided in Section 2.6(a) of this Plan.
2.38 “Related Rights” has the meaning provided in Section 5.1 of this Plan.
2.39 “Restricted Period” has the meaning provided in Section 6.1 of this Plan.
2.40 “Restricted Shares” means Common Shares granted or sold pursuant to Article VI of this Plan.
2.41 “Restricted Stock Unit” means a bookkeeping entry that records the equivalent of one Common Share awarded pursuant to Article VII of this Plan.
2.42 “Rulel6b-3” meansRule 16b-3 promulgated under the Exchange Act (or any successor rule toRule 16b-3) as is in effect and may be amended from time to time.
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2.43 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.
2.44 “Stock Appreciation Right” means a right granted pursuant to Article V of this Plan.
2.45 “Subsidiary” means a corporation, company or other entity (i) more than fifty percent (50%) of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than fifty percent (50%) of whose ownership interests representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company except that for purposes of determining whether any person may be a Participant for purposes of a grant of Incentive Stock Options, “Subsidiary” means any corporation which is a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.
2.46 “Ten Percent Shareholder” means an employee of the Company, or of a parent or subsidiary corporation within the meaning of Section 424 of the Code, who owns (or is deemed to own pursuant to Section 424(d) of the Code) more than ten percent (10%) of the total combined voting power of all classes of voting stock of the Company, the Company’s parent (if any) or any Subsidiary.
2.47 “Voting Stock” means at any time, the then-outstanding securities entitled to vote generally in the election of Directors.
ARTICLE III
SHARES SUBJECT TO THE PLAN
3.1 Number of Shares. Subject to adjustment as provided in Article XI of this Plan, the number of Common Shares that may be issued or transferred under this Plan shall not exceed in the aggregate 6,091,117 shares. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing.
(a) Common Shares covered by an Award granted under this Plan will not be counted as used unless and until they are actually issued or transferred.
(b) If any Award is forfeited, expires, terminates, otherwise lapses or is settled for cash, in whole or in part, without the delivery of Common Shares, then the Common Shares covered by such forfeited, expired, terminated, lapsed or cash-settled Award shall again be available for grant under this Plan. In the event that withholding tax liabilities arising from an Award other than an Option or Stock Appreciation Right are satisfied by the tendering of Common Shares (either actually or by attestation) or by the withholding of Common Shares by the Company, the Common Shares so tendered or withheld shall be added to the Common Shares available for Awards under this Plan. For the avoidance of doubt, the following will not again become available for issuance under this Plan: (i) any Common Shares withheld in respect of taxes upon settlement of an Option or Stock Appreciation Right, (ii) any Common Shares tendered or withheld to pay an Exercise Price, (iii) any Common Shares subject to a Stock Appreciation Right that are not issued in connection with its stock settlement on exercise thereof, and (iv) any Common Shares reacquired by the Company on the open market or otherwise using cash proceeds.
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3.2 Share Limits. Notwithstanding anything in this Article III or elsewhere in this Plan to the contrary, and subject to adjustments as provided in Article XI of this Plan, the limits specified below shall apply to any grants of the following types of Awards:
(a) Incentive Stock Options. Notwithstanding any designation of an Option as an Incentive Stock Option in an Award Agreement, to the extent the aggregate Fair Market Value of the Common Shares with respect to which the Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans) exceeds one hundred thousand dollars ($100,000), the portion of the Options falling within such limit shall be Incentive Stock Options and the excess Options shall be treated asNon-qualified Stock Options. For these purposes, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Common Shares shall be determined as of the time the Option was granted. Incentive Stock Options covering no more than 6,091,117 Common Shares may be granted under this Plan.
(b) Non-Employee Director Limit. The aggregate dollar value of Awards granted to anynon-Employee Director in any calendar year shall not exceed Seven Hundred and Fifty Thousand Dollars ($750,000). The value of the Awards shall be determined based on the Fair Market Value of each Award on the Date of Grant.
3.3 Minimum Vesting Requirements. Notwithstanding any provision of this Plan to the contrary, on and after the Effective Date, the Committee shall not award more than five percent (5%) of the aggregate number of Common Shares that become available for grant under this Plan as of the Effective Date pursuant to Awards that are solely subject to vesting conditions or performance periods that are less than one (1) year following the Date of Grant of the applicable Award, subject, in each case, to the Committee’s authority under this Plan to vest Awards earlier, as the Committee deems appropriate, upon the occurrence of a Change in Control, in the event of a Participant’s termination of employment or service or otherwise as permitted by this Plan.
ARTICLE IV
OPTIONS
4.1 Grant of Options. Subject to the limits of Sections 3.2 and 3.3 and the other terms and conditions of this Plan, the Committee may, from time to time and upon such terms and conditions as it may determine, grant Options to purchase Common Shares to Participants. Options granted under this Plan may be (i) Incentive Stock Options,(ii) Non-qualified Stock Options, or (iii) combinations of the foregoing. Incentive Stock Options may only be granted to Participants who meet the definition of “employees” under Section 3401(c) of the Code. Options granted under this Plan may not provide for any dividends or dividend equivalents thereon. Each such grant may utilize any or all of the authorizations, and shall be subject to all of the requirements, contained in the following provisions.
4.2 Award Agreement. Each Option shall be evidenced by an Award Agreement that shall specify the number of Common Shares covered by the Option, the Exercise Price of the Option, the term of the Option, whether the Option is intended to be an Incentive Stock Option, any conditions to the exercise of the Option, and such other terms and conditions as the Committee, in its discretion, determines and as are consistent with this Plan.
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4.3 Exercise Price. Each grant shall specify an Exercise Price per share, which shall not be less than one hundred percent (100%) of the Fair Market Value on the Date of Grant;provided,however, that a Ten Percent Shareholder shall not be granted an Incentive Stock Option unless the Exercise Price per share is at least one hundred ten percent (110%) of the Fair Market Value on the Date of Grant and the Incentive Stock Option is not exercisable after expiration of five (5) years from the Date of Grant.
4.4 Exercise and Form of Consideration. To the extent exercisable, Options granted under this Plan shall be exercised by delivery of a written notice to the Company setting forth the number of Common Shares with respect to which the Option is being exercised, accompanied by full payment of the applicable Exercise Price. The Committee shall determine the acceptable form of consideration for the Exercise Price, including the method of payment, and for an Incentive Stock Option that determination shall be made at the time of grant. Consideration may consist of: (a) cash; (b) checks; (c) Common Shares, provided that such Common Shares have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price and provided that accepting the Common Shares does not result in any adverse accounting consequences to the Company; (d) consideration received by the Company under a broker-assisted (or other) cashless exercise program implemented by the Company in connection with this Plan; (e) by net exercise; (f) other consideration and method of payment to the extent permitted by applicable law and approved by the Committee; or (g) any combination of the foregoing methods.
4.5 Related Rights. The exercise of an Option shall result in the cancellation on ashare-for-share basis of any Related Rights authorized under Article V of this Plan.
4.6 Minimum Vesting Requirements. Subject to the exceptions stated in Section 3.3, no Award under this Article IV shall vest sooner than twelve (12) months from the Date of Grant.
4.7 Maximum Term. No Option shall be exercisable more than 10 years from the Date of Grant.
ARTICLE V
STOCK APPRECIATION RIGHTS
5.1 Grant of Stock Appreciation Rights. Subject to the limits of Sections 3.2 and 3.3 and the other terms and conditions of this Plan, the Committee may, from time to time and upon such terms and conditions as it may determine, grant Stock Appreciation Rights alone (“Free Standing Rights”) or in tandem with an Option granted under this Plan (“Related Rights”). Any Related Right that relates to aNon-qualified Stock Option may be granted at the same time the Option is granted or at any time thereafter but before the exercise or expiration of the Option. Any Related Right that relates to an Incentive Stock Option must be granted at the same time the Incentive Stock Option is granted. Stock Appreciation Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon. Each such grant may utilize any or all of the authorizations, and shall be subject to all of the requirements, contained in the following provisions.
5.2 Award Agreement. Each Stock Appreciation Right shall be evidenced by an Award Agreement that shall describe such Stock Appreciation Right, the Exercise Price of the Stock Appreciation Right, the term of the Stock Appreciation Right, any conditions to the exercise of such Stock Appreciation Right, identify any related Option, and such other terms and conditions as the Committee, in its discretion, determines and as are consistent with this Plan.
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5.3 Exercise Price. Each grant shall specify an Exercise Price for a Free Standing Right, which shall not be less than one hundred percent (100%) of the Fair Market Value on the Date of Grant. A Related Right shall have the same Exercise Price as the related Option, and shall be exercisable only to the same extent as the related Option.
5.4 Exercise and Form of Consideration. To the extent exercisable, Stock Appreciate Rights granted under this Plan shall be exercised by delivery of a written notice to the Company setting forth the number of Common Shares with respect to which the Stock Appreciation Right is being exercised, accompanied by full payment of the applicable Exercise Price. The Committee shall determine the acceptable form of consideration for the Exercise Price, including the method of payment. Consideration may consist of: (a) cash; (b) checks; (c) Common Shares, provided that such Common Shares have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price and provided that accepting the Common Shares does not result in any adverse accounting consequences to the Company; (d) consideration received by the Company under a broker-assisted (or other) cashless exercise program implemented by the Company in connection with this Plan; (e) by net exercise; (f) other consideration and method of payment to the extent permitted by applicable law and approved by the Committee; or (g) any combination of the foregoing methods.
5.5 Payment. Upon exercise of a Stock Appreciation Right, the Participant shall be entitled to receive from the Company an amount equal to the number of Common Shares subject to the Stock Appreciation Right that is being exercised multiplied by the excess of the (i) Fair Market Value of a Common Share on the date the Award is exercised, over (ii) the Exercise Price specified in the Stock Appreciation Right or related Option. The grant shall specify whether the amount payable by the Company on exercise of the Stock Appreciation Right shall be paid in cash, in Common Shares or in any combination thereof and may either grant to the Participant or retain in the Committee the right to elect among those alternatives. Any grant may specify that the amount payable on exercise of a Stock Appreciation Right may not exceed a maximum specified by the Committee at the Date of Grant.
5.6 Minimum Vesting Requirements. Subject to the exceptions stated in Section 3.3, no Award under this Article V shall vest sooner than twelve (12) months from the Date of Grant.
5.7 Maximum Term. No Stock Appreciation Right shall be exercisable more than ten (10) years from the Date of Grant.
ARTICLE VI
RESTRICTED SHARES
6.1 Grant of Restricted Shares. Subject to the limits of Sections 3.2 and 3.3 and the other terms and conditions of this Plan, the Committee may, from time to time and upon such terms and conditions as it may determine, grant Restricted Shares to Participants. Each such grant shall provide that during the period for which substantial risk of forfeiture is to continue (the “Restricted Period”), the transferability of the Restricted Shares shall be prohibited or restricted in the manner and to the extent prescribed by the Committee at the Date of Grant (which restrictions may include, without limitation, rights of repurchase or first refusal in the Company or provisions subjecting the Restricted Shares to continuing substantial risk of forfeiture in the hands of any transferee). Each such grant may utilize any or all of the authorizations, and shall be subject to all of the requirements, contained in the following provisions.
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6.2 Award Agreement. Each grant of Restricted Shares shall be evidenced by an Award Agreement that shall specify the number of Restricted Shares subject to the Award, the Restricted Period, any other conditions or restrictions on the Award, and such other terms and conditions as the Committee, in its discretion, determines and as are consistent with this Plan.
6.3 Rights. Each such grant shall constitute an immediate transfer of the ownership of Common Shares to the Participant in consideration of the performance of services, and unless otherwise determined by the Committee, entitling such Participant to voting, dividend and other ownership rights, subject to the substantial risk of forfeiture and the Restricted Period.
6.4 Certificates. Unless otherwise directed by the Committee, all certificates representing Restricted Shares shall be held in custody by the Company until all restrictions thereon shall have lapsed, together with a stock power executed by the Participant in whose name such certificates are registered, endorsed in blank and covering such Restricted Shares.
6.5 Minimum Vesting Requirements. Subject to the exceptions stated in Section 3.3, no Award under this Article VI shall vest sooner than twelve (12) months from the Date of Grant.
ARTICLE VII
RESTRICTED STOCK UNITS
7.1 Grant of Restricted Stock Units. Subject to the limits of Sections 3.2 and 3.3 and the other terms and conditions of this Plan, the Committee may, from time to time and upon such terms and conditions as it may determine, grant Restricted Stock Units to Participants. Each Restricted Stock Unit represents one (1) Common Share. Each such grant may utilize any or all of the authorizations, and shall be subject to all of the requirements, contained in the following provisions.
7.2 Award Agreement. Each grant of Restricted Stock Units shall be evidenced by an Award Agreement that shall specify the number of Restricted Stock Units subject to the Award, the Restricted Period, any other conditions or restrictions on the Award, and such other terms and conditions as the Committee, in its discretion, determines and as are consistent with this Plan.
7.3 Rights. No Common Shares shall be issued at the time a Restricted Stock Unit is granted, and a Participant shall have no voting rights with respect thereto. Restricted Stock Units shall be subject to forfeiture until the expiration of the Restricted Period and satisfaction of any applicable conditions, including vesting time periods or performance requirements, to the extent provided in the applicable Award Agreement.
7.4 Dividend Equivalents. At the discretion of the Committee, each Restricted Stock Unit may be credited with dividend equivalents or other equivalent distributions. Dividend equivalents or other equivalent distributions shall be paid on a current basis unless the Award Agreement requires otherwise;provided, however dividend equivalents or other equivalent distributions on Restricted Stock Units that are subject to performance requirements, including Management Goals, shall be deferred until and paid contingent upon the level of achievement of the applicable performance or Management Goals at the end of the related Performance Period.
7.5 Payment. Each grant shall specify the time and manner of payment of Restricted Stock Units. Any grant may specify that the amount payable with respect thereto may be paid by the Company in cash, in
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Common Shares or in any combination thereof and may either grant to the Participant or retain in the Committee the right to elect among those alternatives.
7.6 Minimum Vesting Requirements. Subject to the exceptions stated in Section 3.3, no Award under this Article VII shall vest sooner than twelve (12) months from the Date of Grant.
ARTICLE VIII
PERFORMANCE UNITS AND PERFORMANCE SHARES
8.1 Grant of Performance Shares and Performance Units. Subject to the limits of Sections 3.2 and 3.3 and the other terms and conditions of this Plan, the Committee may, from time to time and upon such terms and conditions as it may determine, grant Performance Shares and Performance Units to Participants that will become payable upon achievement of specified performance goals, which may include Management Goals. Each such grant may utilize any or all of the authorizations, and shall be subject to all of the requirements, contained in the following provisions.
8.2 Award Agreement. Each grant of Performance Shares or Performance Units shall be evidenced by an Award Agreement that shall specify the number of Performance Shares or Performance Units subject to the Award, the performance objectives (which may include Management Goals), the Performance Period applicable to the Award, any other conditions or restrictions on the Award, and such other terms and conditions as the Committee, in its discretion, determines and as are consistent with this Plan.
8.3 Performance Objectives. Any grant of Performance Shares or Performance Units shall specify the performance objectives, which may include Management Goals, which, if achieved, will result in payment or early payment of the Award. Each grant may specify a minimum acceptable level of achievement of the performance objectives and shall set forth a formula for determining the number of Performance Shares or Performance Units that will be earned if performance is at or above the minimum level, but falls short of full achievement of the specified performance objectives. Before the Performance Shares or Performance Units shall be earned and paid, the Committee must determine the level of achievement of the performance objectives.
8.4 Dividends and Dividend Equivalents. The Committee may, at the Date of Grant of Performance Shares or Performance Units, provide for the payment of dividends or dividend equivalents to the Participant thereof either in cash or in additional Common Shares, subject in all cases to deferral and payment on a contingent basis based on the Participant’s earning of the Performance Shares or Performance Units with respect to which such dividend equivalents are paid.
8.5 Payment. Each grant shall specify the time and manner of payment of Performance Shares or Performance Units which have been earned. Any grant may specify that the amount payable with respect thereto may be paid by the Company in cash, in Common Shares or in any combination thereof and may either grant to the Participant or retain in the Committee the right to elect among those alternatives.
8.6 Minimum Vesting Requirements. Subject to the exceptions stated in Section 3.3, no Award under this Article VIII shall have a Performance Period of less than twelve (12) months from the Date of Grant.
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ARTICLE IX
OTHER SHARE-BASED AWARDS
9.1 Grant of Other Share-Based Awards. Subject to the limits of Sections 3.2 and 3.3 and the other terms and conditions of this Plan, the Committee may, from time to time and upon such terms and conditions as it may determine, grant Other Share-Based Awards not otherwise described by the terms of this Plan to Participants. Such Awards may involve the transfer of actual Common Shares to Participants and may include Awards designed to comply with or take advantage of applicable local laws of jurisdictions other than the United States. Each Other Share-Based Award will be expressed in terms of Common Shares or units based on Common Shares. Each such grant may utilize any or all of the authorizations, and shall be subject to all of the requirements, contained in the following provisions.
9.2 Award Agreement. Each grant of an Other Share-Based Award shall be evidenced by an Award Agreement that will specify the number of Common Shares or units covered by the Award, any conditions related to the Award, and such other terms and conditions as the Committee, in its discretion, determines and as are consistent with this Plan.
9.3 Payment. Payment, if any, with respect to an Other Share-Based Award, will be made in accordance with the terms of the Award, in cash, in Common Shares or a combination of both as determined by the Committee.
9.4 Minimum Vesting Requirements. Subject to the exceptions stated in Section 3.3, no Award under this Article IX shall vest sooner than twelve (12) months from the Date of Grant.
ARTICLE X
TRANSFERABILITY
10.1 Transfer Limits. Except as otherwise determined by the Committee, no Options, Stock Appreciation Right or other derivative security granted under this Plan shall be transferable by a Participant other than by will or the laws of descent and distribution, except (in the case of a Participant who is not a Director or officer of the Company) to a fully revocable trust of which the holder is treated as the owner for federal income tax purposes, and in no event will any such Award granted under this Plan be transferred for value. Except as otherwise determined by the Committee, Options and Stock Appreciation Rights shall be exercisable during the Participant’s lifetime only by him or her or by his or her guardian or legal representative. Notwithstanding the foregoing, the Committee in its sole discretion may provide for transferability of Options and Stock Appreciation Rights under this Plan so long as such provisions will not disqualify the exemption for other awards underRule 16b-3 and so long as such transfer is not to a third-party entity, including financial institutions.
10.2 Further Restrictions. The Committee may specify at the Date of Grant that part or all of the Common Shares that are (i) to be issued or transferred by the Company upon the exercise of Options or Stock Appreciation Rights or upon payment under any grant of Performance Shares, Performance Units, Restricted Stock Units or Other Share-Based Awards or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Article VI of this Plan, shall be subject to further restrictions on transfer.
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ARTICLE XI
ADJUSTMENTS
The Committee shall make or provide for such adjustments in the numbers of Common Shares covered by outstanding Awards granted hereunder, in the prices per share applicable to such Options and Stock Appreciation Rights and in the kind of shares covered thereby, as the Board, in its sole discretion, exercised in good faith, may determine is equitably required to prevent dilution or enlargement of the rights of Participants that otherwise would result from (a) any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, or (b) any merger, consolidation,spin-off,split-off,spin-out,split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the event of any such transaction or event, the Committee, in its discretion, may provide in substitution for any or all outstanding Awards under this Plan such alternative consideration as it, in good faith, may determine to be equitable in the circumstances and may require in connection therewith the surrender of all Awards so replaced. In addition, for each Option or Stock Appreciation Right with an Exercise Price greater than the consideration offered in connection with any such transaction or event or Change in Control, the Committee may in its sole discretion elect to cancel such Option or Stock Appreciation Right without any payment to the person holding such Option or Stock Appreciation Right. The Committee may also make or provide for such adjustments in the numbers of shares specified in Section 3.2 of this Plan as the Committee in its sole discretion, exercised in good faith, may determine is appropriate to reflect any transaction or event described in this Article XI.
ARTICLE XII
TAX WITHHOLDING
To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Company for such withholding are insufficient, it shall be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a portion of such benefit. Participants shall also make such arrangements as the Company may require for the payment of any withholding tax obligations that may arise in connection with the disposition of shares acquired upon the exercise of Options. In no event, however, shall the Company accept Common Shares for payment of taxes in excess of required tax withholding rates (or, after the Company’s adoption of ASU2016-09,Compensation-Stock Compensation (Topic 718)dated March, 2016, in excess of maximum applicable tax rates), except that, in the discretion of the Committee, a Participant or such other person may surrender Common Shares owned for more than six (6) months to satisfy any tax obligations resulting from any such transaction.
ARTICLE XIII
SUBSIDIARIES ANDNON-US JURISDICTIONS
13.1 Participation by Employees of Designated Subsidiaries. As a condition to the effectiveness of any grant or Award to be made hereunder to a Participant who is an employee of a Designated Subsidiary, whether or not such Participant is also employed by the Company or another Subsidiary, the Committee
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may require such Designated Subsidiary to agree to transfer to such employee (when, as and if provided for under this Plan and any applicable agreement entered into with any such employee pursuant to this Plan) the Common Shares that would otherwise be delivered by the Company, upon receipt by such Designated Subsidiary of any consideration then otherwise payable by such Participant to the Company. Any such award shall be evidenced by an agreement between the Participant and the Designated Subsidiary, in lieu of the Company, on terms consistent with this Plan and approved by the Committee and such Designated Subsidiary. All such Common Shares so delivered by or to a Designated Subsidiary shall be treated as if they had been delivered by or to the Company for purposes of Article III of this Plan, and all references to the Company in this Plan shall be deemed to refer to such Designated Subsidiary, except for purposes of the definition of “Board” and “Committee” and except in other cases where the context otherwise requires.
13.2 Employees Outside the US. In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may provide for such special terms for Awards to Participants who are foreign nationals or who are employed by the Company or any Subsidiary outside of the United States of America as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or restatements, however, shall include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the shareholders of the Company.
ARTICLE XIV
ADMINISTRATION
14.1 Delegation to Committee. The Board hereby delegates authority to administer this Plan to the Compensation Committee of the Board (or its successor(s)), or any other committee of the Board hereafter designated by the Board to administer this Plan, and the term “Committee” shall apply to any persons to whom such power is delegated. The Committee described in this Section 14.1 may from time to time delegate all or any part of its authority under this Plan to a subcommittee thereof (to the extent of any such delegation, references in this Plan to the Committee will be deemed to be references to such subcommittee). A majority of the Committee (or subcommittee thereof) shall constitute a quorum, and the action of the members of the Committee (or subcommittee thereof) present at any meeting at which a quorum is present, or acts unanimously approved in writing, shall be the acts of the Committee (or subcommittee thereof).
14.2 Committee Requirements. Except as otherwise determined by the Board, the Committee shall consist solely of two (2) or moreNon-Employee Directors. The Board shall have discretion to determine whether it intends to comply with the exemption requirements ofSection 16b-3 of the Code. However, if the Board intends to satisfy such exemption requirements, with respect to any insider subject to Section 16 of the Exchange Act, the Committee shall be a compensation committee of the Board that at all times consists solely of two (2) or moreNon-Employee Directors. Within the scope of that authority, the Board or the Committee may delegate to a committee of one (1) or more members of the Board who are notNon-Employee Directors the authority to grant Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. Nothing herein shall create an inference that an Award is not validly
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granted under this Plan in the event Awards are granted under this Plan by a Committee that does not at all times consist solely of two (2) or moreNon-Employee Directors.
14.3 Interpretation. The interpretation and construction by the Committee of any provision of this Plan or of any Award Agreement and any determination by the Committee pursuant to any provision of this Plan or of any such Award Agreement, notification or document shall be final and conclusive. No member of the Board or the Committee shall be liable for any such action or determination made in good faith.
14.4 Company’s Rights Upon Occurrence of Detrimental Activity. Any Award Agreement may provide (whether or not such would result in additional tax to a Participant under Section 409A of the Code) that if a Participant, either during employment by the Company or a Subsidiary or within a specified period after termination of such employment, shall engage in any Detrimental Activity, and the Board shall so find, forthwith upon notice of such finding, the Participant shall, unless otherwise provided in the Award Agreement:
(a) Return to the Company, in exchange for payment by the Company of any amount actually paid therefor by the Participant, all Common Shares that the Participant has not disposed of that were offered pursuant to this Plan within a specified period prior to the date of the commencement of such Detrimental Activity, and
(b) With respect to any Common Shares so acquired that the Participant has disposed of, pay to the Company in cash the difference between: (i) any amount actually paid therefor by the Participant pursuant to this Plan, and (ii) the Fair Market Value of the Common Shares on the date of such acquisition.
To the extent that such amounts are not paid to the Company, the Company may set off the amounts so payable to it against any amounts (but only to the extent that such amount would not be considered “nonqualified deferred compensation” within the meaning of Section 409A of the Code) that may be owing from time to time by the Company or a Subsidiary to the Participant, whether as wages, deferred compensation or vacation pay or in the form of any other benefit or for any other reason.
14.5 Clawback. Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any of the foregoing) will be subject to such deductions and clawback as may be required or permitted to be made pursuant to such law, government regulation, stock exchange listing requirement or policy (or pursuant to any other policy adopted by the Company at the direction of the Board, including the Company’s current clawback policy).
14.6 Compliance with Section 409A of the Code. To the extent applicable, it is intended that this Plan and any grants made hereunder comply with the provisions of Section 409A of the Code. This Plan and any grants made hereunder shall be administered in a manner consistent with this intent.
14.7 Fractional Shares. The Company shall not be required to issue any fractional Common Shares pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement of fractions in cash.
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ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment or Termination Authority. The Company, by action of the Board (or its designee), may at any time and from time to time amend or terminate this Plan in whole or in part. Any amendment which must be approved by the shareholders of the Company in order to comply with applicable law or the rules of any national securities exchange upon which the Common Shares are traded or quoted shall not be effective unless and until such approval has been obtained. Presentation of this Plan or any amendment thereof for shareholder approval shall not be construed to limit the Company’s authority to offer similar or dissimilar benefits in plans that do not require shareholder approval. Any amendment or termination of this Plan shall not impair in any material way the rights or obligations of any Participant under any Award that is outstanding as of the effective date of the amendment or termination without the written consent of the Participant. The Committee shall maintain its right to exercise its authority under this Plan with respect to any outstanding Awards at the effective date of termination.
15.2 Deferrals. Except with respect to Options and Stock Appreciation Rights, the Committee may permit Participants to elect to defer the issuance of Common Shares or the settlement of awards in cash under this Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan and which are intended to comply with the requirements of Section 409A of the Code. The Committee also may provide that deferred settlements include the payment or crediting of dividend equivalents or interest on the deferral amounts.
15.3 Conditions. The Committee may condition the grant of any Award or combination of Awards authorized under this Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company or a Subsidiary to the Participant.
15.4 Special Circumstances. If permitted by Section 409A of the Code in case of termination of employment by reason of death, Disability or normal or early retirement, or in the case of hardship or other special circumstances, of a Participant who holds Options or Stock Appreciation Rights not immediately exercisable in full, or any Restricted Shares or Restricted Stock Units as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any Performance Shares or Performance Units which have not been fully earned, or Other Share-Based Awards subject to restrictions or conditions, the Committee may, in its sole discretion, accelerate the time at which such Options or Stock Appreciation Rights may be exercised, or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse for Restricted Shares or Restricted Units, or the time at which such Performance Shares or Performance Units will be deemed to have been fully earned, or the time when such restrictions or conditions will terminate with respect to Other or Share-Based Awards, or may waive any other limitation or requirement under any such Award.
15.5 Change in Exercise Price Prohibited. Except in connection with a corporate transaction or event described in Article XI of this Plan, the terms of outstanding Awards may not be amended to reduce the Exercise Price of outstanding Options or Stock Appreciation Rights, or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other awards or Options or Stock Appreciation Rights with an Exercise Price that is less than the Exercise Price of the original Option Stock Appreciation Right, as applicable, without shareholder approval.
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15.6 No Right to Continued Employment. This Plan shall not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor shall it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time. Prior to exercise of any Option, and prior to exercise, payment or delivery pursuant to any other Award, the Participant may be required, at the Company’s request, to certify in a manner reasonably acceptable to the Company that the Participant has not engaged in, and has no present intention to engage in the future in, any Detrimental Activity.
15.7 Incentive Stock Options. To the extent that any provision of this Plan would prevent any Option that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision shall be null and void with respect to such Option. Such provision, however, shall remain in effect for other Options and there shall be no further effect on any provision of this Plan.
ARTICLE XVI
GOVERNING LAW
This Plan and all Awards granted and actions taken thereunder shall be governed by and construed in accordance with the internal substantive laws of the State of Ohio, without regard to conflicts of law principles thereof.
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Directions to Courtyard Marriott
4375 Metro Circle NW, North Canton, Ohio 44720
From Akron-Canton Regional Airport
Take Interstate 77 South to the Everhard Road Exit. Turn right onto Everhard Road NW. Take the first right onto Dressler Road NW. Take the first right onto Metro Circle NW. The hotel is located on the left.
From Youngstown (East)
Take Interstate 76 West to Interstate 77 South. Proceed on Interstate 77 South to the Everhard Road Exit. Turn right onto Everhard Road NW. Take the first right onto Dressler Road NW. Take the first right onto Metro Circle NW. The hotel is located on the left.
From Cleveland Hopkins International Airport
Take Route 71 South to the Ohio Turnpike (80 East). Proceed on the Ohio Turnpike to Exit 180 (Route 8 South). Continue on Route 8 South to Interstate 77 South. Proceed on Interstate 77 South to the Everhard Road Exit. Turn right onto Everhard Road NW. Take the first right onto Dressler Road NW. Take the first right onto Metro Circle NW. The hotel is located on the left.
From Columbus (West)
Take Interstate 71 North to Interstate 76/224 East. Continue for approximately 20 miles to Interstate 77 South. Proceed on Interstate 77 South to the Everhard Road Exit. Turn right onto Everhard Road NW. Take the first right onto Dressler Road NW. Take the first right onto Metro Circle NW. The hotel is located on the left.
DIEBOLD NIXDORF, INCORPORATED 5995 MAYFAIR ROAD P.O. BOX 3077 NORTH CANTON, OH 44720-8077 | VOTE BY INTERNET -www.proxyvote.com | |||
| Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||||
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| E40444-P02687 KEEP THIS PORTION FOR YOUR RECORDS | ||
| DETACH AND RETURN THIS PORTION ONLY | ||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| DIEBOLD NIXDORF, INCORPORATED | ||||||||||||||||||||||||
| The Board of Directors recommends you vote FOR each of the following nominees: | ||||||||||||||||||||||||
| 1. | Election of Directors | For | Against | Abstain | |||||||||||||||||||||||||||
| Nominees: | |||||||||||||||||||||||||||||||
| 1a. Patrick W. Allender | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||
| 1b. Phillip R. Cox | ☐ | ☐ | ☐ | The Board of Directors recommends you vote FOR proposals 2-4: | For | Against | Abstain | ||||||||||||||||||||||||
| 1c. Richard L. Crandall | ☐ | ☐ | ☐ | 2. | To ratify the appointment of KPMG LLP as our independent registered public accounting firrm for the year ending December 31, 2018 | ☐ | ☐ | ☐ | |||||||||||||||||||||||
| 1d. Dr. Alexander Dibelius | ☐ | ☐ | ☐ | 3. | To approve, on an advisory basis, named executive officer compensation | ☐ | ☐ | ☐ | |||||||||||||||||||||||
| 1e. Dr. Dieter W. Düsedau | ☐ | ☐ | ☐ | 4. | To approve amendments to the Diebold Nixdorf, Incorporated 2017 Equity and Performance Incentive Plan | ☐ | ☐ | ☐ | |||||||||||||||||||||||
| 1f. Gale S. Fitzgerald | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||
| ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||
| 1h. Gerrard B. Schmid | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||
| 1i. Rajesh K. Soin | ☐ | ☐ | |||||||||||||||||||||||||||||
| 1j. Alan J. Weber | |||||||||||||||||||||||||||||||
| ☐ | |||||||||||||||||||||||||||||||
| ☐ | ☐ | ||||||||||||||||||||||||||||||
| 1k. Dr. Juergen Wunram | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||
| NOTE: The Common Shares represented by this proxy will be voted by the Proxy Committee, as recommended by the Board of Directors, unless otherwise specified. | |||||||||||||||||||||||||||||||
| Please sign exactly as your name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. | |||||||||||||||||||||||||||||||
| Signature | Date | Signature (Joint Owners) | Date | ||||||||||||||||||||||
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E40445-P02687
DIEBOLD NIXDORF, INCORPORATED This Proxy is Solicited on Behalf of the Board of Directors The undersigned hereby appoints This proxy covers all shares for which the undersigned has the right to give voting instructions to Bank of America Merrill Lynch, Trustee of the DIEBOLD NIXDORF, INCORPORATED 401(K) SAVINGS PLAN #610146 and the DIEBOLD NIXDORF, INCORPORATED 401(K) SAVINGS PLAN FOR PUERTO RICO ASSOCIATES #610147. This proxy, when properly executed, will be voted as directed. If no direction is given to the Trustee by 5:30 p.m. EDT on April You are encouraged to specify your choices by marking the appropriate boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance with the Board of Continued and to be signed on reverse side |
