TRANSITION AGREEMENT
Exhibit 10.2
This TRANSITION AGREEMENT (the “Agreement”) is entered into by and between Xxxxx X. Xxxxxx
(“Xx. Xxxxxx” or “Employee”) and Coinstar, Inc., a Delaware corporation (“Employer” or “Company”)
as of March 31, 2009, modifying certain aspects of the employment relationship. Xx. Xxxxxx has
voluntarily resigned from his position as Chief Financial Officer of the Company. The resignation
is effective May 31, 2009 (“Resignation Date”).
1. EMPLOYMENT
Xx. Xxxxxx will devote all of his productive time, ability, attention and effort to the
Company’s business and will skillfully serve its interests until the Resignation Date. The Company
will pay to Xx. Xxxxxx all of his accrued salary, less required
deductions, through the Resignation
Date.
2. TRANSITION PAYMENTS AND BENEFITS
Xx. Xxxxxx will be paid a total of Four Hundred and Five Thousand Dollars ($405,000), less all
applicable deductions and tax withholdings, as of the Resignation Date. Payment shall be made to
Xx. Xxxxxx in twenty-four (24) substantially equal semi monthly installments at regularly scheduled
payroll intervals, beginning June 1, 2009, and continuing for eleven (11) consecutive months
thereafter; provided, however, that the installments that would normally be paid in the months of
June 2009 through December 2009, shall be accumulated without
interest and paid to Xx. Xxxxxx at the first regular payroll date in
January 2010. For purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), each such installment shall be treated as a separate payment.
Xx. Xxxxxx will also be eligible for a prorated bonus (based on the number of days in calendar year
2009 that Xx. Xxxxxx is employed by the Company compared to 365) equal to the bonus he otherwise
would have received had he remained employed on the payment date under the terms of the 2009
executive incentive compensation plan. Any bonus payable under the 2009 executive incentive
compensation plan (as finally determined by the Compensation Committee of the Company’s Board of
Directors) will be paid at the same time bonuses for other executives are paid in 2010.
The vesting of Xx. Xxxxxx’x outstanding unvested stock options will be accelerated such that
all tranches of such options that would have become vested on or prior to May 31, 2010 will become
fully vested and exercisable on May 31, 2009. All of Xx. Xxxxxx’x vested unexercised stock options
outstanding on May 31, 2009, including the stock options so accelerated, will remain exercisable
until August 31, 2010, and to the extent not exercised will be cancelled as of 5:00 PM Pacific Time
on that date. The vesting of Xx. Xxxxxx’x outstanding time-vested restricted stock will be
accelerated such that all tranches of such restricted stock that would have become vested on or
prior to May 31, 2010 will become fully vested on May 31,
2009 so that the restrictions on such
shares will lapse and such shares will no longer be subject to forfeiture. The vesting of Xx.
Xxxxxx’x outstanding earned performance-based restricted stock will be accelerated such that all
tranches of such restricted stock will become fully vested on May 31, 2009 so that the restrictions
on such shares will lapse and such shares will no longer be subject to forfeiture. Xx. Xxxxxx’x
outstanding unearned performance-based restricted stock award will not be forfeited in connection
with the Resignation Date but will remain subject to determination by the Compensation Committee of
the Company’s Board of Directors after December 31, 2009 of the extent to which the shares covered
by such award have been earned up to the target level of such award; provided, however, that any
such earned shares shall not be subject to further time vesting and shall be prorated under this
Agreement based on the number of days in calendar year 2009 that Xx. Xxxxxx is employed by the
Company compared to 365 (the “net earned shares”) and that all shares subject to such award other
than the net earned shares will be thereafter forfeited; provided further, that if the Compensation
Committee determines that such award is earned above target, no additional shares will be issued to
Xx. Xxxxxx or taken into account in determining the net earned
shares. (For example, assuming Xx. Xxxxxx is employed though May 31,
2009, the number of days to be used in the calculation would be 151.)
3. NON-INTERFERENCE WITH COMPANY’S EMPLOYMENT RELATIONSHIP
Xx. Xxxxxx agrees that he will not directly or indirectly seek to induce the departure of or
hire away any current employees of the Company for a period of one
(1) year from the Resignation
Date. In addition, Xx. Xxxxxx agrees not to interfere in any manner with the employment relations
between the Company and its other employees.
4. GENERAL WAIVER AND RELEASE OF CLAIMS
Xx. Xxxxxx expressly waives any and all claims against the Company and releases the Company
(including its officers, directors, stockholders, employees, agents, and representatives) from any
and all claims, whether known or unknown, that he may have that in any way relate to the employment
relationship with the Company, including the termination of the employment relationship and any
disqualification of incentive stock options. It is understood that this release includes, but is
not limited to, any claims 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 the employment relationship or the Company’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 Americans with Disabilities Act, or the Washington
Law Against Discrimination. Xx. Xxxxxx represents that he has not filed any complaints, charges,
or lawsuits against the Company with any governmental agency or any court, and agrees that he will
not initiate or encourage any such actions, and will not assist any such actions other than as
required by law. 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.
5. REVIEW PERIOD AND REVOCATION PERIOD; EFFECTIVE DATE
Xx. Xxxxxx acknowledges that his waiver and release hereunder of any rights he may have under
the Age Discrimination in Employment Act of 1967 (“ADEA”), including any amendments, is knowing and
voluntary. The Company and Xx. Xxxxxx agree that this waiver and release does not apply to any
rights or claims that may arise under the ADEA after the effective date of this Agreement. Xx.
Xxxxxx acknowledges that he has been advised by this
writing, as required by the Older Workers
Benefit Protection Act, that (a) he should consult with an attorney prior to executing this
Agreement; (b) he has twenty-one (21) days to consider this Agreement (although he may, by his own
choice, execute this Agreement earlier), during which time this Agreement will not be amended,
modified, or revoked by the Company; (c) he has seven (7) days following the execution of this
Agreement to revoke the Agreement by providing written notice to the Company; and (d) this
Agreement will not be effective until the expiration of the seven (7) day revocation period.
Should Xx. Xxxxxx elect to revoke this Agreement, he must do so by sending a certified letter,
return receipt requested, to: Coinstar, Inc., 0000 000xx Xxxxxx XX, Xxxxxxxx, XX 00000, Attn:
General Counsel.
6. SUCCESSORS AND ASSIGNS
This Agreement will bind and inure to the benefit of the parties and their respective legal
representatives, successors, and assigns.
7. KNOWING AND VOLUNTARY AGREEMENT
Xx. Xxxxxx represents and agrees that he (a) has read this Agreement; (b) understands its
terms and the fact that it releases any claim he might have against the Company and its officers,
directors, stockholders, employees, agents, and representatives; (c) understands that he has the
right to consult an attorney of his choice; and (d) enters into this Agreement without duress or
coercion from any source.
8. ENTIRE AGREEMENT
This Agreement sets forth the entire understanding between Xx. Xxxxxx and the Company,
superseding any prior or contemporaneous agreements and understandings, written or oral, express or
implied, pertaining to Xx. Xxxxxx’x employment with the Company, and its termination; provided,
however, this Agreement does not modify or extinguish (i) Sections 4 and 10 of the Employment
Agreement executed by the parties on August 5, 2005, or (ii) the Proprietary and Invention
Agreement executed by Xx. Xxxxxx on May 1, 2003. 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. The headings and subheadings in this Agreement are for convenience of reference and are not
intended to add substance to the terms of the Agreement. The parties agree and acknowledge that in
order to be enforceable, any modifications, changes, additions, or deletions to this Agreement must
be in writing and signed by both parties.
9. ARBITRATION
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 the Company and Xx. Xxxxxx 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. This provision shall not preclude the Company from seeking court
enforcement or relief based upon an alleged violation of Xx. Xxxxxx’x obligations under any
noncompetition or non-disclosure agreement.
10. 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.
11. CODE SECTION 409A
The Company makes no representations or warranties to Xx. Xxxxxx with respect to any tax,
economic or legal consequences of this Agreement or any payments or other benefits provided
hereunder, including without limitation under Code Section 409A, and no provision of this Agreement
shall be interpreted or construed to transfer any liability for failure to comply with Code Section
409A or any other legal requirement from Xx. Xxxxxx or any other person to the Company, any of its
subsidiaries or affiliates, or any other person. Xx. Xxxxxx, by executing this Agreement, shall be
deemed to have waived any claim against the Company, its subsidiaries and affiliates, and any other
person with respect to any such tax, economic or legal consequences. However, the parties intend
that this Agreement and the payments and other benefits provided hereunder shall be exempt from the
requirements of Code Section 409A to the maximum extent possible, whether pursuant to the
short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4), or
otherwise. To the extent Code Section 409A is applicable to this Agreement (and such payments and
benefits), the parties intend that this Agreement (and such payments and benefits) shall comply
with the deferral, payout and other limitations and restrictions imposed under Code Section 409A.
Notwithstanding the foregoing or any other provision of this Agreement to the contrary, (i) this
Agreement shall be interpreted, operated and administered in a manner consistent with such
intentions, and (ii) neither the Company, nor any of its subsidiaries or affiliates, shall have any
liability to Xx. Xxxxxx or his beneficiaries should any payments made under this Agreement be
subject to any tax (including interest and penalties) that may be imposed under Code Section 409A.
12. AUTHORITY TO ENTER AGREEMENT
The Company and Xx. Xxxxxx agree and warrant that the Company, for itself, and Xx. Xxxxxx, for
himself, have the authority to enter into this Agreement, and that by so doing the Company, for
itself, and Xx. Xxxxxx, for himself, are not violating any obligation to any third party or entity.
The individual signing this Agreement on behalf of the Company warrants and represents that he is
duly authorized to do so, has the legal capacity to do so, and that all corporate actions necessary
to authorize the execution, delivery and performance of this Agreement have been duly and validly
taken prior to the date hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates indicated below.
COINSTAR, INC. | XXXXX X. XXXXXX | |||||||||||
By |
/s/ Xxxx X. Xxxxx | /s/ Xxxxx X. Xxxxxx | ||||||||||
Its
|
Chief Executive Officer | |||||||||||