CHANGE OF CONTROL
AGREEMENT
This Change of
Control Agreement (this “Agreement”), dated as of
April 1, 2009 is between Coinstar, Inc. (the
“Employer”), and Gregg Kaplan (the
“Employee”). This Agreement is an exhibit to that
certain Employment Agreement dated as of April 1, 2009 between
the Employer and the Employee (the “Employment
Agreement”).
The Compensation
Committee (the “Committee”) of the Board of Directors
(the “Board”) of the Employer has determined that it is
in the best interests of the Employer and its stockholders to
ensure that the Employer will have the continued dedication of the
Employee, notwithstanding the possibility, threat or occurrence of
a Change of Control (as defined in Appendix A to this
Agreement, which is incorporated herein by this reference) of the
Employer. The Committee believes it is imperative to diminish the
inevitable distraction of the Employee arising from the personal
uncertainties and risks created by a pending or threatened Change
of Control, to encourage the Employee’s full attention and
dedication to the Employer currently and in the event of any
threatened or pending Change of Control, to encourage the
Employee’s willingness to serve a successor in an equivalent
capacity, and to provide the Employee with reasonable compensation
and benefits arrangements in the event that a Change of Control
results in the Employee’s loss of equivalent
employment.
In order to
accomplish these objectives, the Committee has caused the Employer
to enter into this Agreement.
(a)
“ Effective Date ” shall mean the first date
during the Change of Control Period (as defined in
Section 1.1(b)) on which a Change of Control
occurs.
(b)
“ Change of Control Period ” shall mean the
period commencing on the date of this Agreement and ending on the
second anniversary of the date the Employer gives notice to the
Employee that the Change of Control Period shall be
terminated.
The Employer
hereby agrees to continue the Employee in its employ or in the
employ of its affiliated companies, and the Employee hereby agrees
to remain in the employ of the Employer or its affiliated
companies, in accordance with the terms and provisions of this
Agreement, for the period commencing on the Effective Date and
continuing until terminated pursuant to Section 4 of this
Agreement (the “Employment Period”).
GREGG KAPLAN
CHANGE OF CONTROL AGREEMENT 4-1-09
1.3 Authority,
Duties and Responsibilities
During the
Employment Period, the Employee’s authority, duties and
responsibilities shall be at least reasonably commensurate in all
material respects with the most significant of those held,
exercised and assigned at any time during the 90-day period
immediately preceding the Effective Date.
If prior to the
Effective Date the Employee’s employment with the Employer or
its affiliated companies terminates, then the Employee shall have
no further rights under this Agreement.
During the
Employment Period, and excluding any periods of vacation and sick
leave to which the Employee is entitled, the Employee will devote
all of his professional productive time, ability, attention and
effort to the business and affairs of the Employer and the
discharge of the responsibilities assigned to him hereunder, and
will use his best efforts to perform faithfully and efficiently
such responsibilities.
During the
Employment Period, the Employer agrees to pay or cause to be paid
to the Employee, and the Employee agrees to accept in exchange for
the services rendered hereunder by him, the following
compensation:
The Employee shall
receive an annual base salary (the “Annual Base
Salary”), at least equal to the annual salary established by
the Board prior to the Effective Date for the fiscal year in which
the Effective Date occurs. The Annual Base Salary shall be paid in
substantially equal installments and at the same intervals as the
salaries of other officers of the Employer are paid.
Employee may be
entitled to receive, in addition to the Annual Base Salary, an
annual bonus in an amount to be determined by the Board of
Directors of the Employer in its sole discretion.
During the
Employment Period, the Employee shall be entitled to participate,
subject to and in accordance with applicable eligibility
requirements, in such fringe benefit programs as shall be provided
to other executive employees of the Employer and its affiliated
companies from time to time during the Employment Period by action
of the Board (or any
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GREGG KAPLAN
CHANGE OF CONTROL AGREEMENT 4-1-09
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person or
committee appointed by the Board to determine fringe benefit
programs and other emoluments).
During the
Employment Period, the Employee shall be entitled to receive prompt
reimbursement for all reasonable employment expenses incurred by
him in accordance with the policies, practices and procedures of
the Employer and its affiliated companies in effect for the
employees of the Employer and its affiliated companies during the
Employment Period or pursuant to an applicable travel
policy.
Employment of the
Employee during the Employment Period may be terminated as follows
but, in any case, the nondisclosure and noncompetition provisions
set forth in Section 4 of the Employment Agreement shall
survive the termination of this Agreement and the termination of
the Employee’s employment with the Employer:
4.1 By the
Employer or the Employee
Upon giving Notice
of Termination (as defined below), the Employer may terminate the
employment of the Employee with or without Cause (as defined in the
Employment Agreement), and the Employee may terminate his
employment for Good Reason (as defined below) or for any reason, at
any time during the Employment Period.
4.2 Automatic
Termination
This Agreement and
the Employee’s employment during the Employment Period shall
terminate automatically pursuant to Section 2.3 of the
Employment Agreement upon the death or total disability of the
Employee. The Employee and the Employer hereby acknowledge that the
Employee’s presence and ability to perform the duties
specified in Section 1.3 hereof is of the essence of this
Agreement.
4.3 Notice of
Termination
Any termination by
the Employer or by the Employee during the Employment Period shall
be communicated by Notice of Termination to the other party given
within 30 days in accordance with Section 2.5 of the
Employment Agreement. The term “Notice of Termination”
shall mean a written notice which (a) indicates the specific
termination provision in this Agreement relied upon and (b) to the
extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Employee’s employment under the provision so indicated. The
failure by the Employer to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Cause
shall not waive any right of the Employer hereunder or preclude the
Employer from asserting such fact or circumstance in enforcing the
Employer’s rights hereunder.
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GREGG KAPLAN
CHANGE OF CONTROL AGREEMENT 4-1-09
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During the
Employment Period, “Date of Termination” means
(a) if the Employee’s employment is terminated by reason
of death, at the end of the calendar month in which the
Employee’s death occurs, and (b) in all other cases, the
later of (i) five days after the date of personal delivery of
or mailing of, as applicable, the Notice of Termination, and
(ii) the date on which the Employee separates from service,
within the meaning of Section 409A(a)(2)(A)(i) of the Internal
Revenue Code of 1986, as amended (the “Code”). The
Employee’s employment and performance of services will
continue during such five-day period; provided ,
however , that the Employer may, upon notice to the Employee
and without reducing the Employee’s compensation during such
period, excuse the Employee from any or all of his duties during
such period.
In the event of
termination of the Employee’s employment during the
Employment Period, all compensation and benefits set forth in this
Agreement shall terminate except as specifically provided in this
Section 5.
5.1
Termination by the Employer for Other Than Cause or by the Employee
for Good Reason
If the Employer
terminates the Employee’s employment other than for Cause or
the Employee terminates his employment for Good Reason prior to the
end of the Employment Period, the Employee shall be entitled
to:
(a) Receive
payment of the following accrued obligations (the “Accrued
Obligations”):
(i)
the Employee’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid;
(ii)
the product of (x) the Annual Bonus payable with respect to
the fiscal year in which the Date of Termination occurs and
(y) a fraction, the numerator of which is the number of days
in the current fiscal year through the Date of Termination, and the
denominator of which is 365; and
(iii)
any compensation previously deferred by the Employee (together with
accrued interest or earnings thereon, if any) as such deferred
compensation becomes payable under the deferral plan, and any
accrued vacation pay, in each case to the extent not theretofore
paid; and
(b) an
amount as separation pay equal to the Employee’s Annual Base
Salary.
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GREGG KAPLAN
CHANGE OF CONTROL AGREEMENT 4-1-09
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5.2
Termination for Cause or Other Than for Good Reason
If the
Employee’s employment shall be terminated by the Employer for
Cause as defined in the Employment Agreement or by the Employee for
other than Good Reason during the Employment Period, this
Agreement
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