Exhibit 10.7
EXHIBIT A
FORM OF CHANGE OF CONTROL AGREEMENT
     This Change of Control Agreement (this “Agreement”), dated as of June 1,
2009 is between Coinstar, Inc. (the “Employer”), and John Harvey (the
“Employee”). This Agreement is an exhibit to that certain Employment Agreement
dated as of June 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.
1. EMPLOYMENT

  1.1   Certain Definitions

          (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.

  1.2   Employment Period

     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”).

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  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.

  1.4   Employment Status

     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.
2. ATTENTION AND EFFORT
     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.
3. COMPENSATION
     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:

  3.1   Salary

     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.

  3.2   Bonus

     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.

  3.3   Benefits

     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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person or committee appointed by the Board to determine fringe benefit programs
and other emoluments).

  3.4   Expenses

     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.
4. TERMINATION
     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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  4.4   Date of Termination

     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.
5. TERMINATION PAYMENTS
     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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  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 shall terminate without
further obligation to the Employee other than the obligation to pay to the
Employee his Annual Base Salary through the Date of Termination plus the amount
of any compensation previously deferred by the Employee (as such deferred
compensation becomes payable under the deferral plan), in each case to the
extent theretofore unpaid.

  5.3   Termination Because of Death or Total Disability

     If the Employee’s employment is terminated by reason of the Employee’s
death or total disability during the Employment Period, this Agreement shall
terminate automatically without further obligations to the Employee or his legal
representatives under this Agreement, other than for payment of Accrued
Obligations (which shall be paid to the Employee’s estate or beneficiary, as
applicable in the case of the Employee’s death).

  5.4   Payment Schedule

          Payments under Section 5.1(a), 5.2 and 5.3 (other than payments of
deferred compensation, which shall be paid in accordance with the provisions of
the plan under which such compensation was deferred) shall be paid to the
Employee in a lump sum in cash within 30 days of the Date of Termination.
Payments under Section 5.1(b) shall be paid to Employee in twelve (12) equal
monthly installments, beginning with the month following the month containing
the Date of Termination and continuing for eleven (11) consecutive months
thereafter. For purposes of Code Section 409A, each installment payable pursuant
to Section 5.1(b) and this Section 5.4 shall be treated as a separate payment.

  5.5   Good Reason

          (a) For purposes of this Agreement, subject to Section 5.5(b), “Good
Reason” means the occurrence or existence of any of the following events or
conditions without the Employee’s express written consent:
          (i) A diminution in the Employee’s Annual Base Salary;
          (ii) A diminution in the Employee’s authority, duties or
responsibilities as contemplated by Section 1.3 hereof, excluding for this
purpose reasonable changes in particular duties and reporting responsibilities
which may result from the Employer becoming part of a larger business
organization at some future time provided that such changes in the aggregate do
not result in a material alteration in the Employee’s authority, duties or
responsibilities;
          (iii) Any failure by the Employer to comply with and satisfy Section 7
of the Employment Agreement, provided that the Employer’s successor has

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received at least ten days’ prior written notice from the Employer or the
Employee of the requirements of Section 7 thereof;
          (iv) A relocation of the Employee’s principal place of employment to a
location more than 50 miles from the Seattle metropolitan area, except for
required travel on the Employer’s business to an extent substantially consistent
with the Employee’s duties and responsibilities; or
          (v) Any other action or inaction by the Employer that constitutes a
material breach by the Employer of this Agreement or the Employment Agreement.
          (b) Notwithstanding any provision in this Agreement to the contrary,
termination of employment by the Employee will not be for Good Reason unless
(i) the Employee notifies the Employer in writing of the occurrence or existence
of the event or condition which the Employee believes constitutes Good Reason
within 90 days of the occurrence or initial existence of such event or condition
(which notice specifically identifies such event or condition), (ii) the
Employer fails to remedy such event or condition within 30 days after the date
on which it receives such notice (the “Remedial Period”), and (iii) the Employee
actually terminates employment within 90 days after the expiration of the
Remedial Period and before the Employer remedies such event or condition. If the
Employee terminates employment before the expiration of the Remedial Period or
after the Employer remedies the event or condition (even if after the end of the
Remedial Period), then the Employee’s termination will not be considered to be
for Good Reason.
     6. REPRESENTATIONS, WARRANTIES AND OTHER CONDITIONS
     In order to induce the Employer to enter into this Agreement, the Employee
represents and warrants to the Employer as follows:

  6.1   No Violation of Other Agreements

     The Employee represents that neither the execution nor the performance of
this Agreement by the Employee will violate or conflict in any way with any
other agreement by which the Employee may be bound.

  6.2   Reaffirmation of Obligations

     The Employee hereby acknowledges and reaffirms the Employee Proprietary
Information and Inventions Agreement previously executed by Employee on the date
hereof and Employee’s obligations under Section 4 of the Employment Agreement.
     7. CODE SECTION 409A
     The Employer makes no representations or warranties to Employee 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

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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
Employee or any other person to the Employer, any of its affiliates or any other
person. Employee, by executing this Agreement, shall be deemed to have waived
any claim against the Employer, its 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), the involuntary separation pay plan
exception described in Treasury Regulation Section 1.409A-1(b)(9)(iii), 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
any other provision of this Agreement to the contrary, this Agreement shall be
interpreted, operated and administered in a manner consistent with such
intentions. Without limiting the generality of the foregoing, and
notwithstanding any other provision of this Agreement to the contrary, with
respect to any payments and benefits under this Agreement to which Code
Section 409A applies, all references in this Agreement to termination of
Employee’s employment are intended to mean Employee’s “separation from service,”
within the meaning of Code Section 409A(a)(2)(A)(i). In addition, if Employee is
a “specified employee,” within the meaning of Code Section 409A(a)(2)(B)(i),
when Employee separates from service, within the meaning of Code
Section 409A(a)(2)(A)(i), then to the extent necessary to avoid subjecting
Employee to the imposition of any additional tax under Code Section 409A,
amounts that would otherwise be payable under this Agreement during the
six-month period immediately following Employee’s separation from service shall
not be paid to Employee during such period, but shall instead be accumulated and
paid to Employee (or, in the event of Employee’s death, Employee’s estate) in a
lump sum on the first business day following the earlier of (a) the date that is
six months after Employee’s separation from service or (b) Employee’s death.
     IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.

         
 
  EMPLOYEE    
 
       
 
   
 
John Harvey    
 
       
 
  COINSTAR, INC.    

                 
 
  By                          
 
      Its        
 
               

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APPENDIX A TO
CHANGE OF CONTROL AGREEMENT
     For purposes of this Agreement, a “Change of Control” shall mean:
     (a) A “Board Change” which, for purposes of this Agreement, shall have
occurred if individuals who, as of the date of this Agreement, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Employer’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person (as hereinafter defined) other than the Board; or
     (b) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of (i) 20% or more of either (A) the then outstanding shares of Common Stock of
the Employer (the “Outstanding Employer Common Stock”) or (B) the combined
voting power of the then outstanding voting securities of the Employer entitled
to vote generally in the election of directors (the “Outstanding Employer Voting
Securities”), in the case of either (A) or (B) of this clause (i), which
acquisition is not approved in advance by a majority of the Incumbent Directors,
or (ii) 33% or more of either (A) the Outstanding Employer Common Stock or
(B) the Outstanding Employer Voting Securities, in the case of either (A) or
(B) of this clause (ii), which acquisition is approved in advance by a majority
of the Incumbent Directors; provided, however, that the following acquisitions
shall not constitute a Change of Control: (w) any acquisition directly from the
Employer or in connection with an offering of the Employer pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission, (x) any acquisition by the Employer, (y) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the
Employer or any corporation controlled by the Employer or (z) any acquisition by
any corporation pursuant to a reorganization, merger or consolidation, if,
following such reorganization, merger or consolidation, the conditions described
in clauses (i), (ii) and (iii) of subsection (c) of this Appendix A are
satisfied; or
     (c) Consummation of a reorganization, merger or consolidation approved by
the stockholders of the Employer, in each case, unless, immediately following
such reorganization, merger or consolidation, (i) more than 60% of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all the individuals and

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entities who were the beneficial owners, respectively, of the Outstanding
Employer Common Stock and the Outstanding Employer Voting Securities immediately
prior to such reorganization, merger or consolidation in substantially the same
proportion as their ownership immediately prior to such reorganization, merger
or consolidation of the Outstanding Employer Common Stock and the Outstanding
Employer Voting Securities, as the case may be, (ii) no Person (excluding the
Employer, any employee benefit plan (or related trust) of the Employer or such
corporation resulting from such reorganization, merger or consolidation and any
Person beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 33% or more of the Outstanding Employer
Common Stock or the Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 33% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors, and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization, merger
or consolidation were members of the Board at the time of the execution of the
initial agreement providing for such reorganization, merger or consolidation; or
     (d) Consummation of the following events approved by the stockholders of
the Employer (i) a complete liquidation or dissolution of the Employer or
(ii) the sale or other disposition of all or substantially all the assets of the
Employer, other than to a corporation with respect to which immediately
following such sale or other disposition, (A) more than 60% of, respectively,
the then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Employer Common Stock and the Outstanding Employer Voting Securities immediately
prior to such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition, of the
Outstanding Employer Common Stock and the Outstanding Employer Voting
Securities, as the case may be, (B) no Person (excluding the Employer, any
employee benefit plan (or related trust) of the Employer or such corporation and
any Person beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, 33% or more of the Outstanding Employer
Common Stock or the Outstanding Employer Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 33% or more of, respectively, the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (C) at least a
majority of the members of the board of directors of such corporation were
approved by a majority of the members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board providing for such
sale or other disposition of assets of the Employer.
     Notwithstanding the foregoing, there shall not be a Change of Control if,
in advance of such event, the Employee agrees in writing that such event shall
not constitute a Change of Control.

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