Diebold Class Action Settlement of Diebold 401(k) Savings Plan ERISA Class Action Lawsuit

If you were a participant in or beneficiary of the Diebold, Inc. 401(k) Savings Plan (the “Plan”) at any time between October 22, 2003 and May 7, 2009 (the “Settlement Class Period”) and your accounts included investments in Diebold stock, your rights may be affected by a class action settlement.

A class action settlement has been reached in a class action lawsuit pending against Diebold, Incorporated (“Diebold”) and others (collectively “Defendants”) in the United States District Court for the Northern District of Ohio (Eastern Division) (styled In re Diebold ERISA Litigation, Civil Action Case No. 5:06 CV 0170 (PCE)), alleging, among other things, that the Defendants were fiduciaries of the Diebold 401(k) Savings Plan and violated fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”) by permitting the Plan to purchase and hold shares of Diebold common stock during the Settlement Class Period when they knew or should have known it was imprudent to do so, according to the Diebold 401(k) Savings Plan class action settlement notice.

The Diebold 401(k) Savings Plan class action Settlement Class reportedly consists of the following persons, unless otherwise excluded:

All persons (excluding Defendants) who were participants in or beneficiaries of the Diebold, Inc. 401(k) Savings Plan (the “Plan”) at
any time between October 22, 2003 and May 7, 2009 (the “Settlement Class Period”) and whose accounts included investments in
Diebold stock.

The Diebold 401(k) Savings Plan ERISA class action lawsuit complaint reportedly alleged, among other things, that, under ERISA, the Defendants owed fiduciary duties of loyalty, care and prudence to the Plan, and that they violated those duties in connection with the Plan’s investments in Diebold common stock since Diebold stock was purportedly an imprudent investment during the relevant period because of alleged:

• operation flaws and quality control issues in Diebold’s voting machine technology, including functional problems and dubious reliability;
• gross mismanagement and security breaches within Diebold’s Election Systems (“ES”) division, resulting in declining share price and shrinking profit margins; and
• improper accounting practices, controls, and financial reporting, including alleged misstatements in the financial statements
  for 2004 and a least the first two quarters of 2005 due to alleged improper accounting for commission expenses.

Under the proposed Diebold 401(k) Savings Plan ERISA Settlement, a Settlement Fund consisting of $4.5 million is being established, of which the net amount in the Settlement Fund, including interest, after payment of, or establishment of reserves for, any taxes and Court-approved costs, fees, and expenses, including fees and expenses of Class Counsel, the Notice Administrator, and any Court-approved Case Contribution Awards to be paid to the Named Plaintiffs, will reportedly be paid to the Plan and, after payment of expenses incurred in calculating, satisfying and administering the allocation, the remaining amount will be allocated to the Plan accounts of members of the Settlement Class according to a Plan of Allocation to
be approved by the Court (if necessary, an account will reportedly be created for those members of the Settlement Class who no longer have
Plan accounts).

The Court is scheduled to  hold a Settlement Fairness Hearing at 10:00 a.m. on February 1, 2011, at the United States District Court for the Northern District of Ohio (Eastern Division), 125 Market Street, Courtroom 530, Youngstown, Ohio 44503 or in the Courtroom then occupied by United States District Judge John R. Adams.

For more information on the Diebold 401(k) Savings Plan ERISA class action lawsuit settlement and/or for updates on the Diebold 401(k) Savings Plan ERISA class action settlement, visit the Diebold 401(k) Savings Plan ERISA settlement website:

www.diebolderisasettlement.com

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