Exhibit 10.8
AGREEMENT
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THIS AGREEMENT (the "Agreement") dated as of June 14, 2001, is entered into
by and between XXXX XXXXXX (hereinafter referred to as "Executive") and
COINSTAR, INC., a Delaware corporation (hereinafter referred to as "Coinstar").
RECITALS
A. Executive is Chairman, founder and former Chief Executive Officer of
Coinstar.
B. Executive and Coinstar wish to enter into an agreement to resolve any
and all issues that may exist between them in connection with the employment
relationship and its planned termination and to provide for Executive's
consulting role with the Company following such termination.
C. Executive's employment at Xxxxx.xxx, Inc. ("Xxxxx.xxx"), a subsidiary
of Coinstar, will not impacted by this Agreement.
AGREEMENTS
1. EMPLOYMENT: ENDING DATE AND RESPONSIBILITIES
Executive's employment as Chairman of Coinstar will terminate effective
June 20, 2001 (the "Resignation Date"). Contemporaneous with the execution of
this Agreement, Executive will submit in writing his resignation from Coinstar
in a form substantially similar to the letter attached hereto as Exhibit A.
2. SEVERANCE PAY AND BENEFITS
Coinstar will pay Executive $500,000 (the "Severance Amount") following the
Resignation Date in accordance with the terms set forth herein. Such payment
shall be provided in equal monthly installments, less applicable deductions and
tax withholding, at regular payroll intervals during the two-year period
following the Resignation Date (the "Severance Period"). The Severance Amount
payable at any given payroll interval during the Severance Period will be
reduced by the gross amount of cash compensation (including severance payments,
if any) Executive receives as compensation for services provided to or in
connection with Xxxxx.xxx (provided that Xxxxx.xxx is a majority-owned
subsidiary of Coinstar) during or with respect to that payroll period. During
the Severance Period, Executive will be entitled to the following with respect
to health insurance benefits: for the 18 month period following the Resignation
Date (the "COBRA Period"), Executive elects, pursuant to COBRA and the related
provisions in the applicable Coinstar health insurance plans, to continue his
current health insurance benefits for himself and his dependents ("COBRA
Coverage") and Coinstar agrees to pay the monthly premium for such COBRA
Coverage ("COBRA Premium") during the COBRA Period. Coinstar agrees to provide
Executive reasonable assistance in obtaining alternative health insurance
coverage for final six months of the Severance Period and agrees to reimburse
Executive for the
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premiums relating to such alternative coverage during such remaining six month
period in a monthly amount not to exceed the last monthly COBRA Premium paid by
Coinstar for COBRA Coverage. Notwithstanding the foregoing, if Executive obtains
health insurance benefits under another employer's plan ("Alternative Health
Plan Coverage"), Executive acknowledges that he shall thereafter no longer be
entitled to COBRA Coverage under Coinstar's plan; provided, however, that for
the remaining Severance Period Coinstar shall reimburse Executive for the
premiums relating to his dependents' Alternative Health Plan Coverage for which
he is personally responsible up to a maximum of the portion of the last monthly
COBRA Premium paid by Coinstar for his dependent's COBRA Coverage. All other
Coinstar benefits cease on the Resignation Date. In the event of any non-payment
by Coinstar of the Severance Amount in breach of this Agreement, which breach is
not cured by Coinstar within 15 days of the date such payment was due, Executive
shall be entitled to an amount equal to twice the portion of the Severance
Amount which is not paid when due.
3. OTHER SERVICES; CONSULTING SERVICES
(a) Upon the effectiveness of this Agreement (in accordance with Section 12),
Coinstar will provide Executive with a transition benefit of $50,000 to be used
(in Executive's sole discretion) for legal fees and expenses relating to the
negotiation and preparation of this Agreement, professional tax planning
services, and other costs and expenses relating to this Agreement, Executive's
resignation or Executive's transitional needs in connection with his
resignation.
(b) Executive shall be available to provide consulting services to Coinstar
during the Severance Period as partial consideration for the Severance Amount.
The consulting services shall be provided at times and locations reasonably
requested by Coinstar; provided, however, that Coinstar agrees to use its best
efforts to schedule Executive's consulting services at times convenient for
Executive and consistent with his other business or occupational opportunities
and obligations; provided further, that requested consulting services shall
involve no more than four (4) trips outside of the Seattle/King County
metropolitan area per annum, shall not exceed an average of eight (8) hours per
month and shall not exceed 30 hours (not including travel time) in any one
month, in each case unless otherwise agreed. The consulting services shall be in
the nature of public appearances at trade shows, meeting with Coinstar's
customers, transition services, assistance in prosecution of Coinstar's patent
application and patent rights, other meetings to enhance Coinstar's business
plan or product lines, and other activities that are not inconsistent with the
duties historically performed by Executive for Coinstar while employed by
Coinstar. Coinstar agrees that, without Executive's prior consent, Executive
shall not be required to perform consulting services that would require Coinstar
to disclose to Executive, and Coinstar agrees to not disclose to Executive, any
nonpublic information regarding Coinstar that would reasonably be considered
material under applicable federal securities laws. Executive agrees not to
solicit from Coinstar any such material nonpublic information . Coinstar
acknowledges that Executive may perform services for third parties during the
Severance Period, provided that performing such services does not result in
violation of Section 9 of this Agreement. Coinstar agrees to indemnify and hold
Executive harmless from any expense, liability or loss (including reasonable
attorneys' fees) relating to any actual or threatened action, suit or proceeding
against Executive arising out of actions or omissions of Executive in his
capacity as a consultant
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hereunder, except for such actions or omissions involving gross negligence or
willful misconduct.
4. STOCK OPTIONS
So long as Executive continues to provide consulting services to Coinstar
as contemplated by Section 3(b) hereof, Executive's unvested Coinstar options
shall vest in accordance with their current vesting schedules and the vested
portion of any such option may be exercised at any time during the current term
of such option. In the event Coinstar terminates Executive as a consultant for
any reason during the Severance Period, one hundred percent (100%) of
Executive's unvested Coinstar options will immediately vest and such options may
be exercised at any time for up to a period equal to two years and ninety days
from the Resignation Date; provided, however, that in no event shall a Coinstar
option held by the Executive be exercisable following the date that is ten years
after the date such option was granted to Executive. In the event Executive
terminates the consulting services for any reason during the Severance Period
other than following a material breach of this Agreement by Coinstar, in
addition to the other remedies Coinstar may have, the unvested portion of
Executive's Coinstar options shall expire and be not be exercisable and
Executive shall have 90 days from the date of such termination to exercise the
vested portion of his Coinstar options. At the completion of the Severance
Period, and assuming no prior termination of the consulting services has
occurred, one hundred percent of Executive's then unvested options will
immediately vest. In no event shall termination of consulting services by
Executive or Coinstar for any reason effect the duration of the Severance
Period.
5. NON-DISPARAGEMENT OBLIGATION
Executive and Coinstar shall refrain (and Coinstar shall cause its
officers, directors and employees to refrain) from making any derogatory comment
in the future to the press or any individual or entity regarding the other that
relates to their activities or relationship prior to the date of this Agreement,
which comment would likely cause material damage or harm to the business
interests or reputation of Executive or Coinstar. Executive and Coinstar further
agree that each will refer to Executive's separation as a resignation in all
third party communications.
Each of Executive and Coinstar acknowledges that the non-disparagement
provisions of this Section 5 are essential to the other party, that such other
party would not enter into this Agreement if it did not include this Section 5,
and that damages sustained by such other party as a result of a breach of this
Section 5 cannot be adequately quantified or remedied by damages alone.
Accordingly, each party shall be entitled to injunctive and other equitable
relief to prevent or curtail any breach of this Section 5.
6. VALID CONSIDERATION
Executive recognizes and agrees that Coinstar's commitments and
undertakings herein are not required by Coinstar's policies or procedures or by
any contractual obligation of Coinstar
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and are solely as consideration for resolution of the severance arrangements
between Executive and Coinstar arising out of his employment.
7. COMMUNICATIONS REGARDING AGREEMENT
Executive shall not initiate communications regarding this Agreement,
except for communications with his attorneys, financial advisors, family, or
friends, or except as otherwise required by law. If asked by any person other
than the foregoing, Executive shall state only that he is stepping down as
Chairman of the Board and will act as a consultant to the Company. The
provisions of any press release by the Company relating to Executive's
resignation shall be subject to the prior approval of Executive, which approval
will not be withheld unreasonably and shall be given no later than 24 hours
after a draft of such press release is provided to Executive.
8. GENERAL RELEASE OF CLAIMS; INDEMNIFICATION
Each party (a "Releasing Party") expressly waives any claims against the
other party (a "Released Party") and releases the Released Party (including its
subsidiaries, officers, directors, stockholders, managers, agents and
representatives) from any claims the Releasing Party may have in any way
connected with Executive's employment with Coinstar and the scheduled
termination of his employment. It is understood that this release includes, but
is not limited to, any claims Executive may have for wages, bonuses, employment
benefits, or damages of any kind whatsoever, arising out of any contracts,
expressed or implied, any theory of wrongful discharge, any legal restriction on
Coinstar's right to terminate employees, or any federal state, or other
governmental statute or ordinance, including, without limitation, Title VII of
the Civil Rights Act of 1964, the federal Age Discrimination in Employment Act,
the Washington Law Against Discrimination, or any other legal limitation on the
employment relationship. Executive represents that he has not filed any
complaints, charges or lawsuits against Coinstar with any governmental agency or
any court, and agrees that he will not initiate, assist or encourage any such
actions. This waiver and release shall not waive or release any claims under
this Agreement or predicated on acts that occur after the date of execution of
this Agreement. Executive's release of claims shall not affect any
indemnification rights or obligations to which he may be subject (including,
without limitation, in his capacity as an officer or director of any subsidiary
of Coinstar) under the indemnification agreement entered into July 1997 between
Executive and Coinstar. Coinstar represents that during the term of Executive's
employment as an officer or director of Coinstar (and in his capacity as an
officer or director of any subsidiary of Coinstar) he was covered by Coinstar's
primary directors' and officers' liability insurance and excess directors' and
officers liability insurance. In the event that Coinstar obtains control of
Xxxxx.xxx, Coinstar agrees to cause Xxxxx.xxx to enter into a mutual release on
terms substantially similar to the terms of this Section 8.
9. NONCOMPETITION AND NONDISCLOSURE
(a) The nature of Executive's employment with Coinstar has given Executive
access to trade secrets and confidential information, including information
about its technology and customers. Therefore, except as provided in
subparagraph (b) below, during the Severance
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Period, Executive will not engage in, be employed by, perform services for,
participate in the ownership (except that Executive may beneficially own up to
5% of the outstanding stock of a publicly traded company), management, control
or operation of, or otherwise be connected with, either directly or indirectly,
any business or activity whose efforts are in competition with (i) the products
or services manufactured or marketed by Coinstar as of the Resignation Date, or
(ii) the products or services which have been under research or development by
Coinstar during the term of Executive's employment, and which Coinstar is
demonstrably considering for further development or commercialization as of the
Resignation Date. The geographic scope of this restriction shall extend to
anywhere Coinstar is doing business, has done business or intends to do
business. Executive acknowledges that the restrictions are reasonable and
necessary for protection of the business and goodwill of Coinstar. The
restrictive provisions in this Section 9(a) shall not apply in the event
Coinstar unilaterally discontinues payment of the Severance Amount in breach of
this Agreement (provided that Executive notify Coinstar of such breach and
Coinstar be given a reasonable period of time to cure such breach), unless such
discontinuance is as a result of a material breach by Executive of the terms of
this Agreement.
(b) In the event Coinstar and Xxxxx.xxx enter into a noncompetition
agreement after the date hereof (the "Meals Noncompete"), the restrictive
provisions of subparagraph (a) above shall be automatically amended so that they
are identical to the Meals Noncompete for so long as (i) Executive works full
time for Xxxxx.xxx, (ii) such Meals Noncompete remains in full force and effect
and (iii) Executive and Xxxxx.xxx strictly comply with the Meals Noncompete.
Should (i) Executive cease working for Xxxxx.xxx, (ii) the Meals Noncompete not
remain in full force and effect or (iii) Executive and Xxxxx.xxx not strictly
comply with the Meals Noncompete, the restrictive provisions of subparagraph (a)
will be automatically reinstated and in full force and effect.
(c) Without limiting the generality of the obligations set forth in that
certain Proprietary Information and Inventions Agreement dated February 26, 1991
between Skydeck Corporation (now know as Coinstar, Inc.) and the Executive (the
"Proprietary Information and Inventions Agreement"), Executive further will not
disclose any confidential information about Coinstar relating to its business,
technology, practices, products, marketing, sales, services, finances or legal
affairs.
10. NON-INTERFERENCE WITH COMPANY'S EMPLOYMENT RELATIONSHIP
Executive agrees that he will not directly or indirectly seek to induce the
departure of or hire away any current employees of Coinstar during the Severance
Period and for a period of twelve (12) months following the termination of the
Severance Period. In addition, he agrees not to interfere in any manner with the
employment relations between Coinstar and its other employees; provided, that in
the event any employee of Coinstar unilaterally approaches Executive to discuss
specifically employment or other business opportunities with Executive or any
business with which Executive is involved, Executive is free to engage with such
Coinstar employee; provided further, however, that the foregoing shall not be
deemed in any way to relieve Executive of his obligations under Section 9 of
this Agreement (including his obligations
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under the Proprietary Information and Inventions Agreement) or any such Coinstar
employee of any legal or contractual obligations he or she may have to Coinstar.
11. REAFFIRMATION OF PRIOR AGREEMENTS
Executive agrees that he shall continue to be bound by the terms of the
Proprietary Information and Inventions Agreement, other than Sections 7 and 11
of that agreement, as if he were an employee during the time he furnishes
consulting services to Coinstar.
12. REVIEW AND REVOCATION PERIOD; EFFECTIVE DATE
Executive and Coinstar agree that he shall have twenty-one (21) days to
review this Agreement (although he may choose to execute it sooner) and consult
an attorney if he so chooses, during which time the proposed terms of this
Agreement shall not be amended, modified or revoked by Coinstar. Executive may
revoke this Agreement if he so chooses by providing written notice of his
decision to revoke this Agreement to Coinstar within seven (7) days following
the date he signs this Agreement. This Agreement shall become effective and
enforceable upon expiration of this seven (7) day revocation period.
13. SEVERABILITY
The provisions of this Agreement are severable, and if any part of it is
found to be unlawful or unenforceable, the other provisions of this Agreement
shall remain fully valid and enforceable to the maximum extent consistent with
applicable law.
14. AVAILABILITY AND CONSULTATION
Executive will make himself reasonably available to Coinstar and counsel
for Coinstar for the purpose of enabling Coinstar to defend against any legal
claims in which Coinstar determines he may have knowledge or information.
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15. REIMBURSEMENT OF CERTAIN EXPENSES
Coinstar will reimburse Executive for reasonable out-of-pocket expenses
incurred in connection with any consultations under Section 14.
16. CERTAIN COOPERATION
Coinstar agrees to provide Executive or his agents with information
requested by Executive or his agents which is reasonably necessary to enable
Executive to effect any filings required under applicable securities laws or
which may reasonably be required by Executive in connection with the
unregistered sale or other transfer of Coinstar stock owned by Executive.
Coinstar further agrees, and shall cause its transfer agent, to process promptly
any stock transfers by Executive for which appropriate transfer documentation
(including, solely to the extent Rule 144 is applicable to such transfer,
seller's and broker's documents and legal opinions customarily required for
sales of restricted or control securities under Rule 144) is presented to the
Company's transfer agent by Executive or his agents.
17. MEDIATION AND ARBITRATION
Except for claims for specific performance or other equitable relief, any
controversies or claims arising out of or relating to this Agreement shall be
fully and finally settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect (the
"AAA Rules"), conducted by one arbitrator either mutually agreed upon by
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Coinstar and Executive or chosen in accordance with the AAA Rules, except that
the parties thereto shall have any right to discovery as would be permitted by
the Federal Rules of Civil Procedure for a period of 90 days following the
commencement of such arbitration and the arbitrator thereof shall resolve any
dispute which arises in connection with such discovery. The prevailing party
shall be entitled to costs, expenses and reasonable attorneys' fees, and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Prior to the initiation of any arbitration
hereunder, the parties shall engage in mandatory mediation in the interest of
expediting a prompt resolution of any dispute. Coinstar shall be responsible
for payment of any and all costs and fees of such mediation, including
attorneys' fees for Executive, in an amount not to exceed Ten Thousand Dollars
($10,000).
18. SUCCESSORS AND ASSIGNS
This Agreement will bind and inure to the benefit of each of the parties
hereto and their respective legal representatives, successors and assigns.
19. NON-ADMISSION
This Agreement shall not be construed as an admission by either party
hereto of any wrongful act, and each party specifically denies any liability to
the other party. This Agreement is entered into by the parties solely for the
purpose of resolving all issues between Coinstar and Executive for all events
occurring on or before the date of execution of this Agreement.
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20. KNOWING AND VOLUNTARY AGREEMENT
Executive represents and agrees that he has read this Agreement,
understands its terms and the fact that it releases any claim he might have
against Coinstar and its agents, understands that he has the right to consult an
attorney of his choice, acknowledges that he has in fact consulted an attorney,
and enters into this Agreement without duress or coercion from any source.
21. ENTIRE AGREEMENT
Except for (1) the continuing obligations of Executive under that certain
the Proprietary Invention and Information Agreement, and (2) the continuing
rights, amended by Section 4 hereof, and obligations under Executive's existing
stock option agreements, this Agreement sets forth the entire understanding
between Executive and Coinstar, superseding any prior agreements or
understandings, express or implied, pertaining to the terms of Executive's
employment with Coinstar. Executive acknowledges that in executing this
Agreement, he does not rely upon any representation or statement by any
representative or agent of Coinstar concerning the subject matter of this
Agreement.
22. APPLICABLE LAW
This Agreement and all obligations and duties under this Agreement shall be
governed by and interpreted according to the laws of the State of Washington,
without regard to its choice of law principles to the contrary.
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/s/ Xxxx Xxxxxx
Dated: June 14, 2001 _________________________________
Xxxx Xxxxxx
COINSTAR, INC.
Dated: June 14, 2001 By: /s/ Xxxxxxx Xxxxxxxxxxx
Its: Compensation Committee Chair
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June 14, 2001
Board of Directors
Gentlemen:
I hereby resign my positions on the Board of Directors of Coinstar, Inc.,
Xxxxx.xxx and Coinstar International, Inc.
I also hereby resign as Chairman of Coinstar, Inc. effective June 20, 2001, to
pursue other business opportunities. I am giving you advance notice in order to
enable Coinstar to provide an orderly transition of my duties.
Sincerely,
/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
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