TRANSITION AGREEMENT
Exhibit 10.1
THIS TRANSITION AGREEMENT (the “Agreement”) is entered into by and between Xxxxx X. Xxxx (“Xx.
Xxxx”) and Coinstar, Inc., a Delaware corporation (“Company” or “Employer”) as of March 31, 2009.
Xx. Xxxx has voluntarily resigned from his position as Chief Executive Officer of the Company.
This resignation is effective March 31, 2009 (“Resignation Date”).
1. TRANSITION PAYMENTS & BENEFITS
Xx. Xxxx will be paid a total of Five Hundred Thousand Dollars ($500,000.00), less all
applicable deductions and tax withholdings. Payment shall be made to Xx. Xxxx in twenty-four (24)
substantially equal semi-monthly installments at regularly scheduled payroll intervals, beginning
April 1, 2009, and continuing for eleven (11) consecutive months thereafter; provided, however,
that the installments that would normally be paid in the months of April 2009 through September
2009, shall be accumulated without interest and paid to Xx. Xxxx in October 2009. 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.
The vesting of Xx. Xxxx’x outstanding unvested stock options has been accelerated such that
all tranches of such options that would have become vested on or prior to March 31, 2010 are fully
vested and exercisable on March 31, 2009. All of Xx. Xxxx’x vested unexercised stock options
outstanding on March 31, 2009, including the stock options so accelerated, will remain exercisable
until June 30, 2010, and to the extent not exercised will be cancelled as of 5:00 PM Pacific Time
on that date. The vesting of Xx. Xxxx’x outstanding time-vested restricted stock has been
accelerated such that all tranches of such restricted stock that would have become vested on or
prior to March 31, 2010 are fully vested on March 31, 2009 so that the restrictions on such shares
lapse and such shares are no longer subject to forfeiture on that date. The vesting of Xx. Xxxx’x
outstanding earned performance-based restricted stock has been accelerated such that all tranches
of such restricted stock are fully vested on March 31, 2009 so that the restrictions on such shares
lapse and such shares are no longer subject to forfeiture on that date.
2. NON-INTERFERENCE WITH COMPANY’S EMPLOYMENT RELATIONSHIP
Xx. Xxxx 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. Xxxx agrees not to interfere in any manner with the employment relations
between the Company and its other employees.
3. GENERAL WAIVER AND RELEASE OF CLAIMS
Xx. Xxxx 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. Xxxx 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.
4. REVIEW PERIOD AND REVOCATION PERIOD; EFFECTIVE DATE
Xx. Xxxx 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. Xxxx 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.
Xxxx 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. Xxxx 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.
5. SUCCESSORS AND ASSIGNS
This Agreement will bind and inure to the benefit of the parties and their respective legal
representatives, successors, and assigns.
6. KNOWING AND VOLUNTARY AGREEMENT
Xx. Xxxx 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.
7. ENTIRE AGREEMENT
This Agreement sets forth the entire understanding between Xx. Xxxx and the Company,
superseding any prior or contemporaneous agreements and understandings, written or oral, express or
implied; provided, however, that this Agreement does not modify or extinguish (i) Sections 4 and 10
of the Employment Agreement executed by the parties on January 1, 2004, or (ii) the Proprietary and
Invention Agreement executed by Xx. Xxxx on October 8, 2001. The provisions of this Agreement are
severable, and if any part of it is found to be unlawful or
2
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.
8. 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. Xxxx 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. Xxxx’x obligations under any noncompetition or
non-disclosure agreement.
9. 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.
10. CODE SECTION 409A
The Company makes no representations or warranties to Xx. Xxxx 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. Xxxx or any other person to the Company, any of its
subsidiaries or affiliates or any other person. Xx. Xxxx, 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, (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
3
subsidiaries or affiliates, shall have any liability to Xx. Xxxx 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.
11. AUTHORITY TO ENTER AGREEMENT
The Company and Xx. Xxxx agree and warrant that the Company, for itself, and Xx. Xxxx, for
himself, have the authority to enter into this Agreement, and that by so doing the Company, for
itself, and Xx. Xxxx, 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.
[The remainder of this page left intentionally blank]
4
IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates indicated below.
COINSTAR, INC. | XXXXX X. XXXX | |||||||||||
By |
/s/ Xxxx X. Xxxxx | /s/ Xxxxx X. Xxxx | ||||||||||
Its
|
Chief Executive Officer | Dated: | March 31, 2009 | |||||||||
Dated: |
March 31, 2009 | |||||||||||
5