The Wells notices indicate that the SEC staff is considering recommending that the SEC bring civil enforcement actions against these individuals alleging that they violated various provisions of the federal securities laws. Under the SEC's procedures, recipients of a Wells notice have the opportunity to respond to the SEC staff before the staff makes its formal recommendation to the Commission on whether any civil enforcement action should be brought by the SEC.

Krakora has stepped down from the CFO position and will continue to serve the company in a non-financial reporting capacity pending resolution of this matter. Leslie A. Pierce, vice president and corporate controller, is fulfilling the role of interim CFO. Prior to being named corporate controller, Pierce served as vice president of accounting, compliance and external reporting. She joined Diebold in 1990 as a senior accountant. Before joining Diebold, Pierce had four years of public accounting experience at KPMG in Cleveland, Ohio. She holds a bachelor's degree in accounting from Kent State University in Kent, Ohio. Pierce is a certified public accountant (CPA), and has held membership in the Ohio Society of CPAs.

Diebold continues to cooperate with the SEC in connection with its previously disclosed investigation. As part of this process, the company has had preliminary discussions with the SEC concerning resolution of this matter, including the possibility of entering into a settlement agreement. It is possible that the SEC will issue a Wells notice to the company in connection with the investigation. There can be no assurance that Diebold will be able to successfully resolve this matter with the SEC, or that any such resolution will not have a material adverse impact on the company's financial condition, liquidity or results of operations.