of the Board
The primary mission of the Board of Directors
(the "Board") of Diebold, Incorporated (the
"Company") is to advance the interests of the
Company's shareholders by advising and overseeing
management with respect to the business affairs of the
Company. The Board believes that this mission is best
served by establishing a corporate culture of
accountability, responsibility and ethical behavior through
the careful selection and evaluation of senior management
and members of the Board and by carrying out the Board's
responsibilities with diligence and integrity.
discharging their obligations, Board members should be
entitled to rely on the honesty and integrity of the
Company's senior executives and its outside advisers and
auditors. Board members are expected to devote the time
necessary to appropriately discharge their responsibilities
and to rigorously prepare for and, to the extent possible,
attend and participate in the Company's annual meeting of
shareholders and all Board meetings and meetings of Board
committees on which they serve. Each Board member is
expected to ensure that other commitments do not materially
interfere with the member's service as a director.
Board member is expected to exercise sound judgment in all
matters involving business ethics and integrity and shall
at all times maintain the highest ethical standards.
Further, every Board member is prohibited from using or
revealing, without proper authorization, any confidential
information regarding the Company.
Selection of Director Nominees.
The Board Governance Committee shall recommend candidates
for election to the Board in accordance with the policies
and principles in its charter and the criteria described
herein. The invitation to join the Board should be extended
by the Board through the Chairman of the Board or, in lieu
thereof, by the Chair of the Board Governance Committee.
The Board Governance Committee will be responsible for
recommending the nomination of those incumbent directors it
deems appropriate for re-election to the Board as part of
the committee's annual review and selection process.
Director Orientation and Continuing
Education. The Company shall establish an
orientation program for new directors that includes
presentations by senior management. All directors will also
be invited to participate in the orientation program.
Periodically, the Company will provide opportunities for
directors to visit the Company's significant facilities in
order to provide greater understanding of the Company's
business and operations.
Independent Directors. A
substantial majority of the members of the Board must
satisfy the applicable independence requirements set forth
in the Company's Categorical Independence Standards for
Directors, as approved by the Board from time to time and
the rules of the New York Stock Exchange and under
Size of the Board. It is the
current sense of the Board and the Board Governance
Committee that the Board should have between seven and
twelve members. The Board determines the number of
directors as permitted in the Company's Articles of
Incorporation and Regulations and will periodically review
the size of the Board based on recommendations of the Board
Positions of Chairman and Chief Executive
Officer. The Board shall elect the Chairman of the
Board. The role of the Chief Executive Officer and Chairman
may be separate or combined, which will be determined by
the Board as it deems appropriate.
Service on Other Boards.
Directors must advise the Chairman of the Board and the
Chair of the Board Governance Committee in advance of
accepting an invitation to serve on the board of directors
of another company.
Changes in Professional Responsibility.
Directors are required to submit their resignations upon
retirement, resignation, termination or other significant
change in profession. The Board may accept or reject such
resignation in its discretion after consultation with the
Board Governance Committee.
Retirement Policy. The current
retirement age for Board membership is 72 years. As such,
no director after having attained the age of 72 shall be
nominated for re-election to the Board. However, should the
Board Governance Committee and the full Board so determine,
an exception may be made to extend the retirement age for a
Compensation and Performance
Compensation Policy and Compensation
Review. It is the current policy of the Board to
provide directors with a mix of compensation, including a
periodic cash retainer and annual stock option or
restricted stock grants based on continued service on the
Board and Company performance. The Board may decide in the
future to provide directors with other types of
compensation. Proposed changes in Board compensation shall
initially be reviewed by the Board Governance Committee,
but any changes in the compensation of directors shall
require the approval of the Board. The Board Governance
Committee shall periodically review the status of Board
compensation. The Committee shall discuss its review with
Annual Performance Review. At
least annually, the Board Governance Committee shall
evaluate and report to the Board the performance of the
Board and the Board's compliance with these guidelines.
Transactions with Directors or Their
Affiliates. Except for employment arrangements with
the CEO and other management directors, the Company does
not engage in transactions with directors or their
affiliates if a transaction would cast into doubt the
independence of a director, 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 director of the Company. This prohibition
also includes significant business dealings with directors
or their affiliates, charitable contributions which would
require disclosure in the Company's proxy statement under
the rules of the New York Stock Exchange, 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 the Company's
Schedule. Board meetings are
scheduled in advance and held not less than quarterly. The
Board holds special meetings as required.
Distribution of Board Material.
Information that is important to the Board's understanding
of the Company's business should be distributed to the
directors a reasonable period of time before the Board
Meetings of Non-Management Directors.
The non-management directors shall meet at regularly
scheduled executive sessions without management. The Chair
of the Board Governance Committee shall serve as the
presiding director and shall supervise the conduct of these
meetings. Meetings of the non-management directors should
generally coincide with regularly scheduled Board meetings;
however, a majority of the non-management directors may
call a meeting of the non-management directors at any time.
If any of the non-management directors are not
considered to be independent, the independent directors
should meet in executive session at least once a year.
Board Presentations and Access to
Employees and Advisers. Directors shall have full
access to officers and employees of the Company and, as
necessary and appropriate, the Company's independent
advisers, including legal counsel and independent
accountants. Any meetings or contacts that a director
wishes to initiate may be arranged through the Chief
Executive Officer, the Secretary or directly by the
director. Each director will use his or her judgment to
ensure that any such contact is not disruptive to the
business operations of the Company.
The Board encourages the Chief Executive
Officer and other executive officers to invite to Board
meetings officers, other key employees and independent
advisers who can provide additional insight into the items
being discussed or who the Chief Executive Officer or other
executive officers believe should be given exposure to the
Board Interaction with Investors, Media
and Others. The Board believes that senior
management speaks for the Company. Individual Board members
may, from time to time, meet or otherwise communicate with
various constituencies that are involved with the Company
at the request of senior management.
Standing Committees. The Board
shall have at all times an Audit Committee, a Compensation
Committee and a Board Governance Committee, and all of the
members of those committees shall satisfy the applicable
independence requirements set forth in the rules of the New
York Stock Exchange and under applicable law. The Board
also currently has an Executive Committee and an Investment
Committee. From time to time, the Board may provide for
such other standing or special committees as may be
necessary to carry out its responsibilities.
Committees shall receive authority exclusively
through delegation from the Board through their charters,
Board resolutions or as provided by these guidelines. In
addition to the authority granted hereunder or under each
committee's charter or, in the case of a committee, by
further resolution of the Board, the Board and each
committee have the power on the Company's behalf to hire
independent legal, financial or other advisers as any of
them may deem necessary without consulting or obtaining the
approval of management of the Company.
Committee Charters. Each standing
committee will have a written charter approved by the
Board. The charters will set forth the purposes and
responsibilities of the committees as well as
qualifications for committee membership, procedures for
appointment and removal, structure and operations and
reporting to the Board. The charters will also provide that
each committee will annually evaluate its performance. The
charters will be included on the Company's website and will
be made available in print to any shareholder of the
Company who submits a request to the Company's Secretary
for a copy of the charters. The charters that are required
by applicable rule or regulation to be periodically
published in the proxy statement relating to the Company's
annual meeting of shareholders will be so published.
Committee Meetings and Committee Agenda.
Each committee chair, in consultation with the committee
members and appropriate officers of the Company, will
determine the frequency of committee meetings consistent
with the committee's charter, provided that a majority of
committee members may call a meeting of the committee on
which they are members at any time. Each committee chair,
in consultation with the other members of the committee and
the appropriate executive officers, will develop the
Evaluation and Succession
Chief Executive Officer Selection.
The Board shall be responsible for selecting a Chief
Evaluation of Executive Officers.
The independent members of the Board, including the members
of the Compensation Committee, shall conduct an annual
review of the performance of the Chief Executive Officer in
light of the goals and objectives of the Company. The
Compensation Committee shall also review and approve the
compensation policies and programs for executive officers
and other officers and key employees of the Company as it
Succession Planning and Management
Development. The Board shall review the Company's
succession plan, which at a minimum shall include
appropriate contingencies in case the Chief Executive
Officer retires or is incapacitated. The Board will
evaluate potential successors to the Chief Executive
Officer. The Chief Executive Officer shall at all times
make available his or her recommendations and evaluations
of potential successors, along with a review of any
development plans recommended for such individuals. The
Chief Executive Officer shall present to the full Board a
formal review of succession planning at least once a year.
The Board shall have appropriate resources and
authority to discharge its responsibilities, including,
without limitation, appropriate funding, in such amounts as
the Board deems necessary, to compensate any consultants,
independent counsel and advisors retained by the Board.
of These Guidelines
These guidelines will
be included on the Company's website and will be made
available in print to any shareholder of the Company who
submits to the Secretary a request for a copy of these
guidelines. The Company's annual report to shareholders
will state that these guidelines are available on the
Company's website and will be available in print to any
shareholder of the Company who submits to the Secretary a
request for a copy of these guidelines.