exv10w1






Exhibit 10.1



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AGREEMENT




     This Agreement (the “Agreement”), dated as of May 28, 2008, is by and among certain
entities listed on Schedule A hereto (collectively, the “Shamrock Group”, and each
individually a “member” of the Shamrock Group) and Coinstar, Inc. (the “Company”).



     WHEREAS, the members of the Shamrock Group are the beneficial owners (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of,
in the aggregate, 3,712,755 shares of common stock, par value $0.001 per share, of the Company (the
“Common Stock”);



     WHEREAS, on April 4, 2008, a representative of certain members of the Shamrock Group delivered
to the Company a “Notice of Director Nominations to be Brought Before the 2008 Annual Meeting of
Coinstar, Inc. Stockholders” (the “Nomination Letter”), and on April 25, 2008, members of
the Shamrock Group filed a definitive Proxy Statement on Schedule 14A (together with the proxy card
and other solicitation materials filed in connection therewith pursuant to the rules promulgated
under Section 14(a) of the Exchange Act, the “Shamrock Proxy Statement”) with the
Securities and Exchange Commission (the “SEC”); and



     WHEREAS, the Company and the Board of Directors of the Company (the “Board”), on the
one hand, and the Shamrock Group, on the other hand, wish to enter into certain agreements relating
to the composition of the Board, the termination of the pending proxy contest for the election of
directors at the Company’s 2008 Annual Meeting of Stockholders (the “2008 Annual Meeting”)
and other matters as more fully set forth herein.



     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:



     1. Certain Defined Terms. As used herein, the following terms have the following
meanings:




“2008 Annual Meeting” shall have the meaning set forth in the Recitals.




“2009 Annual Meeting” shall have the meaning set forth in Section 3.




“2010 Annual Meeting” shall have the meaning set forth in Section 2(c).




“Additional Director” shall have the meaning set forth in Section 3.




“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under the
Exchange Act.




“Agreement” shall have the meaning set forth in the Introductory Paragraph.




“Applicable Meetings” shall have the meaning set forth in Section 4(c).



 









 





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“Associate” shall have the meaning set forth in Rule 12b-2 promulgated under the
Exchange Act.




“Board” shall have the meaning set forth in the Recitals.




“Bylaws” shall have the meaning set forth in Section 2(c).




“Common Stock” shall have the meaning set forth in the Recitals.




“Company” shall have the meaning set forth in the Introductory Paragraph.




“Deadline” shall have the meaning set forth in Section 2(c).




“Director Selection Process” shall have the meaning set forth in Section 3.




“Director Termination Date” shall mean the earliest of: (i) the date on which those
directors elected at the 2010 Annual Meeting are duly elected and qualified to the Board in
accordance with the Bylaws; (ii) the first date on which any member of the Shamrock Group
violates or engages in any of the activities prohibited by Section 4 hereof; (iii) the first
date on which the members of the Shamrock Group sell, transfer or otherwise dispose of any
or all of the Common Stock such that the Shamrock Group’s aggregate beneficial ownership (as
defined in Rule 13d-3 promulgated under the Exchange Act) of Common Stock is reduced to
1,856,377 or fewer shares of Common Stock (as adjusted for any dividends of Common Stock,
stock splits, stock combinations, reclassifications, recapitalizations or the like); or (iv)
the first date on which the Selected Shamrock Director shall no longer be in office as a
member of the Board and the Shamrock Group shall not have the right to name a successor to
such Selected Shamrock Director (or designate a pool of three candidates) as provided in
Section 2(d) hereof.




“Exchange Act” shall have the meaning set forth in the Recitals.




“Nominating and Governance Committee” shall have the meaning set forth in Section
2(a).




“Nomination Letter” shall have the meaning set forth in the Recitals.




“person” shall mean any individual, corporation (including not-for-profit), general
or limited partnership, limited liability or unlimited liability company, joint venture,
estate, trust, association, organization or other entity of any kind or nature.




“SEC” shall have the meaning set forth in the Recitals.




“Selected Shamrock Director” shall have the meaning set forth in Section 2(b).




“Shamrock Affiliates” shall have the meaning set forth in Section 4(a).




“Shamrock Expense Notice” shall have the meaning set forth in Section 6.




“Shamrock Group” shall have the meaning set forth in the Introductory Paragraph.



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“Shamrock Nominee” shall have the meaning set forth in Section 2(a).




“Shamrock Proxy Statement” shall have the meaning set forth in the Recitals.



     2. Selected Shamrock Director.



          (a) On or promptly after the date hereof, one or more members of the Company’s Nominating and
Governance Committee (the “Nominating and Governance Committee”) will interview Eugene I.
Krieger, John M. Panettiere and Arik Ahitov (each, a “Shamrock Nominee”). Following such
interviews, the Nominating and Governance Committee will evaluate the overall qualifications,
background and experience of each Shamrock Nominee and recommend one of them for appointment to
the Board.




          (b) Promptly after receiving the recommendation of the Nominating and Governance Committee,
the Board will evaluate the Shamrock Nominees and, taking into consideration the recommendation of
the Nominating and Governance Committee, select one Shamrock Nominee for appointment to the Board
(the “Selected Shamrock Director”).




          (c) No later than 5:00 pm Pacific Time on May 29, 2008 (the “Deadline”), the Board
shall, pursuant to the powers granted to it under the Amended and Restated Bylaws of the Company
(the “Bylaws”), increase the size of the Board by one (with such newly created
directorship to be a member of the class of directors whose terms expire at the Company’s 2010
Annual Meeting of Stockholders (the “2010 Annual Meeting”)) and appoint the Selected
Shamrock Director to fill the new directorship so created on the Board, to serve in such capacity
from such date of appointment through the Director Termination Date. If the Shamrock Selected
Director is not appointed to the Board by the Deadline, then the Shamrock Group shall be entitled
to specific performance of the Company’s obligations hereunder, in addition to any other rights or
remedies available to the Shamrock Group or any member thereof at law or in equity.




          (d) In the event of the death or incapacity of the Selected Shamrock Director prior to the
2010 Annual Meeting, the Shamrock Group shall be entitled to designate a person to replace the
Selected Shamrock Director to serve on the Board by delivery of a written notice to the Company
within thirty (30) days after the Selected Shamrock Director dies or becomes incapacitated. Such
person’s credentials shall be promptly reviewed by and he or she shall be promptly interviewed by
the Nominating and Governance Committee and, subject to such Committee’s and the Board’s approval,
such person shall be promptly appointed to the Board to serve until the Director Termination Date;
provided, such approval of the Nominating and Governance Committee and of the Board shall
not be unreasonably conditioned, withheld or delayed. In the event that either the Nominating and
Governance Committee or the Board shall in good faith reasonably withhold approval of a person so
designated by the Shamrock Group to replace the Selected Shamrock Director, the Shamrock Group
shall have the right to designate additional persons for appointment as the Selected Shamrock
Director in accordance with the provisions of this Section 2(d) until one of the Shamrock Group’s
designees is approved and appointed to serve as the replacement Selected Shamrock Director. In
addition, in the event that prior to the 2010 Annual Meeting any Selected Shamrock Director is no
longer willing to serve in such capacity, the Shamrock Group shall have the right to designate a
pool of three



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individuals from which the Nominating and Governance Committee and the Board shall select a
replacement for the Selected Shamrock Director who is no longer willing to so serve. The
credentials of each of the three persons designated by the Shamrock Group shall be promptly
reviewed, and each shall be promptly interviewed, by the Nominating and Governance Committee. The
person selected as the replacement Selected Shamrock Director by the Nominating and Governance
Committee and the Board from the three individuals designated by the Shamrock Group shall be
appointed to the Board as promptly as reasonably practicable (and in no event later than thirty
(30) days after the date the Shamrock Group designates its three proposed replacements), to serve
until the Director Termination Date. Any person appointed to the Board pursuant to this Section
2(d) shall thereafter be the “Selected Shamrock Director” for all purposes of this Agreement. For
the avoidance of doubt, except as set forth in this Section 2(d), the Shamrock Group shall not be
entitled to remove or otherwise replace the Selected Shamrock Director.




          (e) While serving on the Board and any committee thereof, the Selected Shamrock Director
shall be entitled to all the rights and privileges of the other directors and committee members,
including, without limitation, access to the Company’s outside advisors; provided, that
the Selected Shamrock Director shall not be entitled to participate in or observe, and shall upon
the good faith request of the Board or any such committee recuse himself from, any meeting or
portion thereof at which the Board or any such committee is evaluating and/or taking action with
respect to (x) the exercise of any of the Company’s rights or enforcement of any of the
obligations of any member of the Shamrock Group under this Agreement, or (y) any transaction
proposed by, or with, or affecting any member of the Shamrock Group in a manner materially
different than the effect on other stockholders. The Board or any such committee shall be
entitled to take such actions as it shall in good faith deem reasonably necessary or appropriate
to carry out the provisions of the preceding sentence.




          (f) The Selected Shamrock Director shall be entitled to receive the identical compensation
and benefits being paid to the other non-employee directors of the Company. It shall be a
precondition to the right of the Selected Shamrock Director to attend any meeting of the Board or
committee thereof that such individual shall have entered into any non-disclosure or
confidentiality agreement entered into by the other members of the Board and shall have agreed, in
the same manner as each other member of the Board, to abide by the written policies of the Board
and the committees thereof (including, without limitation, the Code of Conduct and the Code of
Ethics) and the written policies of the Company applicable to members of the Board (including,
without limitation, the Company’s insider trading policy).




          (g) The Shamrock Group shall not be entitled to have the Selected Shamrock Director serve on
the Board from and after the Director Termination Date, nor shall the Company have any obligation
to nominate the Selected Shamrock Director for re-election to the Board after the Director
Termination Date.




          (h) If the Director Termination Date arises as a result of clause (ii) or clause (iii) of the
definition thereof, the Shamrock Group shall use good faith efforts to cause the Selected Shamrock
Director to promptly resign from the Board, and the Company shall promptly thereafter commence a
director selection process in accordance with the procedures



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set forth on Schedule B hereto to select a replacement for the Selected Shamrock
Director who, upon appointment to the Board, shall serve until the Director Termination Date.




          (i) If the Company destaggers the Board at any time prior to the Director Termination Date,
the Company shall include the Selected Shamrock Director in its slate of nominees at every meeting
of stockholders at which directors are elected prior to the Director Termination Date.




     3. Additional Board Seat. In addition to the appointment of the Selected Shamrock
Director contemplated by Section 2, the Board shall commence, prior to the end of 2008, a director
selection process (the “Director Selection Process”) in accordance with the procedures set
forth on Schedule B hereto, and in connection therewith shall increase the size of the
Board by one (with such newly created directorship to be a member of the class of directors whose
terms expire at the Company’s 2009 Annual Meeting of Stockholders (the “2009 Annual
Meeting”)) and appoint the director selected by the Board pursuant to the Director Selection
Process (the “Additional Director”) to fill the new directorship so created on the Board no
later than March 1, 2009. The Board shall nominate and support the Additional Director for
re-election to the Board at the 2009 Annual Meeting as a director whose term shall expire at the
Company’s 2012 Annual Meeting of Stockholders (or if the Company destaggers the Board at any time
prior to the 2012 Annual Meeting, the Company shall include the Additional Director in its slate of
nominees at every meeting of stockholders at which directors are elected prior to the 2012 Annual
Meeting).



     4. Proxy Contest and Other Matters.



          (a) Each member of the Shamrock Group agrees that the members of the Shamrock Group shall,
and shall cause their Affiliates and Associates (such Affiliates and Associates, collectively and
individually, the “Shamrock Affiliates”) to (i) immediately cease all efforts, direct or
indirect, to elect the Shamrock Nominees at the 2008 Annual Meeting and (ii) not vote, deliver or
otherwise use any proxies obtained in connection with such solicitation for use at the 2008 Annual
Meeting.




          (b) Each member of the Shamrock Group agrees that, until the conclusion of the 2010 Annual
Meeting, no member of the Shamrock Group shall (and the members of the Shamrock Group shall cause
the Shamrock Affiliates not to), except as otherwise set forth on Schedule B hereto:





          (i) solicit proxies or written consents of stockholders or conduct any other type of
referendum (binding or non-binding) with respect to, or make or in any way participate in
any solicitation of any proxy, consent or other authority to vote any shares of Common Stock
with respect to, or otherwise become a participant in any contested solicitation with
respect to, any matter involving the Company, including, without limitation, the removal or
the election of directors;




          (ii) form or join in a partnership, limited partnership, syndicate or other group (as
defined under Section 13(d) of the Exchange Act) with respect to the



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Common Stock, in support of any effort by a third party with respect to the matters
described in subparagraph (i), (iv) and (v) of this Section 4(b);




          (iii) deposit any shares of Common Stock in a voting trust or subject any shares of
Common Stock to any voting agreement, in each case other than solely with other members of
the Shamrock Group or other Shamrock Affiliates with respect to the shares of Common Stock
now or hereafter owned by them, or pursuant to this Agreement;




          (iv) submit any proposal (including nominations of director candidates, except as
provided herein) for consideration at any annual or special meeting of the stockholders of
the Company (including pursuant to Rule 14a-8 promulgated under the Exchange Act);
provided, that the foregoing shall not prevent the Selected Shamrock Director or
members of the Shamrock Group or other Shamrock Affiliates from submitting such matters
directly to the Board for its consideration;




          (v) support or participate in any “withhold the vote” or similar campaign with respect
to the Company or the Board, or support any other nominees for the Board other than the
Selected Shamrock Director or other directors nominated by the Board; provided, that
if the Selected Shamrock Director is not nominated by the Board for election at the 2010
Annual Meeting, the Shamrock Group and any applicable Shamrock Affiliates shall not be
obligated to vote their shares for the directors nominated by the Board, so long as the
Shamrock Group otherwise complies with subparagraphs (i), (ii), (iii) and this
subparagraph (v) of this Section 4(b); or




          (vi) make, or cause to be made, any statement or announcement that constitutes an ad
hominem attack on the Company, its officers or its directors: (A) in any document or report
filed with or furnished to the SEC or any other governmental or regulatory authority, (B) in
any press release or other public communication , or (C) to any journalist or member of the
media (including, without limitation, in a television, radio, newspaper or magazine
interview); provided, that the Company acknowledges that members of the Shamrock
Group or Shamrock Affiliates have had communications and may in the future communicate with
the Company, management, the Board and the stockholders and such communications shall not in
and of themselves be deemed a violation of this clause so long as such communication does
not reasonably constitute an ad hominem attack on the Company, its officers or its
directors.



          (c) Each member of the Shamrock Group shall cause all shares of Common Stock held of record
or beneficially owned (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
by it or by any Shamrock Affiliate, as of the record date for the 2008 Annual Meeting, the 2009
Annual Meeting and, provided the Selected Shamrock Director is included in the Company’s slate of
director nominees for the 2010 Annual Meeting, as of the record date for the 2010 Annual Meeting
(the “Applicable Meetings”), to be present for quorum purposes and to be voted, at each
Applicable Meeting or at any adjournments or postponements thereof, in favor of the slate of
directors nominated by the Board (including the Selected Shamrock Director) for election at each
Applicable Meeting.




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          (d) Upon the appointment of the Selected Shamrock Director to the Board, the members of the
Shamrock Group shall be deemed to have withdrawn the Nomination Letter, the Shamrock Proxy
Statement and the letter dated April 14, 2008 to the Company requesting inspection of certain
records and documents of the Company.




          (e) Until the conclusion of the 2010 Annual Meeting, none of the Company nor any of its
officers or directors shall make, or cause to be made, any statement or announcement that
constitutes an ad hominem attack on any current or former Selected Shamrock Director, any member
of the Shamrock Group, any Shamrock Affiliate, or their respective principals, officers or
directors: (A) in any document or report filed with or furnished to the SEC or any other
governmental or regulatory authority, (B) in any press release or other public communication , or
(C) to any journalist or member of the media (including, without limitation, in a television,
radio, newspaper or magazine interview).




     5. Public Announcement and SEC Filing. The Company and the Shamrock Group shall
announce this Agreement and the material terms hereof by means of a joint press release in the form
attached as Schedule C hereto as soon as practicable on the date hereof. The Shamrock
Group shall promptly file an amendment to the Schedule 13D regarding the Common Stock filed with
the SEC on May 30, 2006, and as amended to date, reporting the entry into this Agreement and
amending any applicable items under Schedule 13D.



     6. Reimbursement of Expenses. The Company shall reimburse the Shamrock Group in an
aggregate amount not to exceed $350,000 for its reasonable out-of-pocket expenses incurred through
the date the Selected Shamrock Director is appointed to the Board in connection with (i) the
preparation of the Shamrock Proxy Statement and solicitation of proxies thereunder and (ii) the
negotiation and preparation of this Agreement, including, without limitation, legal and accounting
fees and the fees of the proxy solicitor retained by the Shamrock Group, within thirty (30) days
after the receipt by the Company of a written notice from the Shamrock Group (the “Shamrock
Expense Notice”) itemizing such expenses in reasonable detail together with appropriate
documentation therefor. The Shamrock Group shall collectively send one Shamrock Expense Notice to
the Company, and shall only receive reimbursement for the documented reasonable expenses set forth
in such single Shamrock Expense Notice.



     7. Representations and Warranties of the Company. The Company hereby represents and
warrants that this Agreement and the performance by the Company of its obligations hereunder (i)
has been duly authorized, executed and delivered by it, and is a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in equity or at law), (ii)
does not require the approval of the stockholders of the Company and (iii) does not and will not
violate any law, any order of any court or other agency of government, the Certificate of
Incorporation of the Company or the Bylaws or any provision of any material agreement or other
instrument to which the Company or any of its properties or assets is bound, or conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a default under any
such material agreement or other instrument.



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     8. Representations and Warranties of the Shamrock Group. Each member of the Shamrock
Group hereby represents and warrants, severally and not jointly, that:



          (a) this Agreement and the performance by such member of its obligations hereunder (i) has
been duly authorized, executed and delivered by such member, and is a valid and binding obligation
of such member, enforceable against such member in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors’ rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a proceeding in equity or
at law), (ii) does not require approval by any owners or holders of any equity interest in such
member (except as has already been obtained) and (iii) does not and will not violate any law, any
order of any court or other agency of government, the organizational documents of such member or
any provision of any material agreement or other instrument to which such member or any of its
properties or assets is bound, or conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such material agreement or other instrument;
and




          (b) except for the shares of Common Stock listed on Schedule A hereto, the members of the
Shamrock Group do not beneficially own (as defined in Rule 13d-3 promulgated under the Exchange
Act) any shares of Common Stock.




     9. Miscellaneous. The parties hereto acknowledge and agree that irreparable harm
would occur in the event any of the provisions of this Agreement are not performed in accordance
with their specific terms or are otherwise breached and, accordingly, the parties hereto shall be
entitled to an injunction or injunctions to prevent or to cure breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement exclusively in the Court of
Chancery or other state courts of the State of Delaware, in addition to any other remedy to which
they are entitled at law or in equity. Furthermore, each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of the Court of Chancery or other state courts of the
State of Delaware in the event any dispute arises out of this Agreement or the transactions
contemplated by this Agreement, (b) agrees that it shall not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it
shall not commence any action or assert any claim against any other party to this Agreement
relating to this Agreement or the transactions contemplated by this Agreement in any court other
than the Court of Chancery or other state courts of the State of Delaware, (d) irrevocably waives
the right to trial by jury, (e) agrees to waive any bonding requirement under any applicable law,
in the case any other party seeks to enforce the terms of this Agreement by way of equitable relief
and (f) irrevocably consents to service of process by a reputable overnight mail delivery service,
signature requested, to the address of such party as provided in Section 11. THIS
AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING WITHOUT LIMITATION VALIDITY, INTERPRETATION
AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH
STATE THAT WOULD CAUSE THE LAWS OF ANOTHER JURISDICTION TO APPLY.



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     10. Entire Agreement; Amendments; Waiver. This Agreement (and the Schedules hereto,
which are incorporated herein) contains the entire understanding of the parties with respect to the
subject matter hereof and may be amended only by an agreement in writing executed by each of the
parties hereto. Any term or condition of this Agreement may be waived at any time by the party
that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in
a written instrument duly executed by or on behalf of the party waiving such term or condition. No
waiver by any party of any term or condition of this Agreement, in any one or more instances, shall
be deemed to be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.



     11. Notices. All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall be in writing and
shall be deemed validly given, made or served, if (a) given by telecopy, when such telecopy is
transmitted to the telecopy number set forth below and the appropriate confirmation is received or
(b) if given by any other means, when actually received during normal business hours at the address
specified in this subsection:



	 	 	 
	if to the Company:

	 	Coinstar, Inc.
	 

	 	1800 114th Avenue SE
	 

	 	Bellevue, Washington 98004
	 

	 	Attention: Don Rench, Esq.
	 

	 	Facsimile: (425) 943-8090
	 
	 	 
	with copies (which shall
	 	 
	not constitute notice) to:

	 	Latham & Watkins, LLP
	 

	 	885 Third Avenue
	 

	 	New York, New York 10024
	 

	 	Attention: Charles M. Nathan, Esq.
	 

	 	Facsimile. (212) 751-4864
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	Perkins Coie LLP
	 

	 	1201 Third Avenue, Suite 4800
	 

	 	Seattle, Washington 98101
	 

	 	Attention: Andrew Bor, Esq.
	 

	 	Facsimile. (206) 359-9577
	 
	 	 
	if to the Shamrock Group:

	 	Shamrock Activist Value Fund, L.P.
	 

	 	4444 Lakeside Drive
	 

	 	Burbank, California 91505
	 

	 	Attention: Greg S. Martin
	 

	 	Facsimile. (818) 845-4675






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	with a copy (which shall
	 	 
	not constitute notice) to:

	 	Bingham McCutchen LLP
	 

	 	355 South Grand Avenue
	 

	 	Los Angeles, California 90071-3106
	 

	 	Attention: David K. Robbins, Esq.
	 

	 	Facsimile. (213) 830-8660






     12. Severability. If at any time subsequent to the date hereof, any provision of this
Agreement shall be held by any court of competent jurisdiction to be illegal, void or
unenforceable, such provision shall be of no force and effect, but the illegality or
unenforceability of such provision shall have no effect upon the legality or enforceability of any
other provision of this Agreement.



     13. Counterparts. This Agreement may be executed in two or more counterparts which
together shall constitute a single agreement.



     14. No Third Party Beneficiaries. This Agreement is solely for the benefit of the
parties hereto and is not enforceable by any other person.



     15. No Assignment; Binding Effect. Neither this Agreement, nor any right, interest or
obligation hereunder, may be assigned by any party hereto without the prior written consent of the
other parties hereto and any attempt to do so will be void. Subject to the preceding sentence,
this Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto
and their respective successors and assigns and legal representatives.



     16. Interpretation and Construction. Each of the parties hereto acknowledges that it
has been represented by counsel of its choice throughout all negotiations that have preceded the
execution of this Agreement, and that it has executed the same with the advice of said independent
counsel. Each party and its counsel cooperated and participated in the drafting and preparation of
this Agreement, and any and all drafts relating thereto exchanged among the parties shall be deemed
the work product of all of the parties and may not be construed against any party by reason of its
drafting or preparation. Accordingly, any rule of law or any legal decision that would require
interpretation of any ambiguities in this Agreement against any party that drafted or prepared it
is of no application and is hereby expressly waived by each of the parties hereto, and any
controversy over interpretations of this Agreement shall be decided without regards to events of
drafting or preparation.



     17. Headings. The headings used in this Agreement have been inserted for convenience
of reference only and do not define or limit the provisions hereof.



[Signature Pages Follow]




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     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same
to be executed by its duly authorized representative as of the date first above written.



	 	 	 	 	 
	 	COINSTAR, INC.

 	 
	 	By:  	/s/ David W. Cole
 	 
	 	 	Name:  	David W. Cole 	 
	 	 	Title:  	Chief Executive Officer 	 
	 



	 	 	 	 	 	 	 	 	 
	 	 	SHAMROCK ACTIVIST VALUE FUND, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By: Shamrock Activist Value Fund GP, L.L.C.,
its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By: Shamrock Partners Activist Value Fund,
L.L.C., its
       managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Michael J. McConnell
 

	 	 
	 

	 	 	 	 	 	Name: Michael J. McConnell	 	 
	 

	 	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	SHAMROCK ACTIVIST VALUE FUND II, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By: Shamrock Activist Value Fund GP, L.L.C.,
its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By: Shamrock Partners Activist Value Fund,
L.L.C., its
       managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Michael J. McConnell	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael J. McConnell	 	 
	 

	 	 	 	 	 	Title: Vice President	 	 






[Signature Page to Settlement Agreement]









 





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	 	 	SHAMROCK ACTIVIST VALUE FUND III, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By: Shamrock Activist Value Fund GP, L.L.C.,
its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By: Shamrock Partners Activist Value Fund,
L.L.C., its
       managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Michael J. McConnell	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael J. McConnell	 	 
	 

	 	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	SHAMROCK ACTIVIST VALUE FUND GP, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By: Shamrock Partners Activist Value Fund,
L.L.C., its
       managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Michael J. McConnell	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael J. McConnell	 	 
	 

	 	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	SHAMROCK PARTNERS ACTIVIST VALUE FUND, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Michael J. McConnell	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael J. McConnell	 	 
	 

	 	 	 	 	 	Title: Vice President	 	 






[Signature Page to Settlement Agreement]









 





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SCHEDULE A




	 	 	 	 	 
	 	 	NUMBER OF SHARES OF COMMON
	                         NAME	 	STOCK BENEFICIALLY OWNED
	Shamrock Activist Value Fund, L.P.
	 	 	2,521,213	 
	 
	 	 	 	 
	Shamrock Activist Value Fund II, L.P.
	 	 	1,041,863	 
	 
	 	 	 	 
	Shamrock Activist Value Fund III, L.P.
	 	 	149,679	 
	 
	 	 	 	 
	Shamrock Activist Value Fund GP, L.L.C.*
	 	 	3,712,755	 
	 
	 	 	 	 
	Shamrock Partners Activist Value Fund, L.L.C.*
	 	 	3,712,755	 








 




			
	*	 	The indicated members of the Shamrock Group may be deemed to beneficially own the shares of
Common Stock indicated above by virtue of their control of the other members of the Shamrock Group.





Schedule A-1









 





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SCHEDULE B




INDEPENDENT DIRECTOR SELECTION PROCESS




     In connection with Section 3 of the Agreement (and if required by Section 2(h) of the
Agreement), the Company will commence a process to add an independent director to the Board from a
group of candidates submitted for nomination exclusively by major stockholders of the Company.




	 	•	 	The Company will solicit its major stockholders for submissions of, and input regarding,
candidates to be considered for nomination as a new independent director on the Board.
Such person must satisfy the applicable independence requirements of the SEC and each
national securities exchange on which the Company’s common stock is listed.
	 
	 	•	 	The Shamrock Group will be included in the process and invited to submit candidates for
nomination and otherwise participate in the search and selection process on an equal
footing with the Company’s other major stockholders.
	 
	 	•	 	The Nominating and Governance Committee, which is comprised solely of independent
directors, will review the resumes and qualifications of all candidates submitted for
nomination.
	 
	 	•	 	The Nominating and Governance Committee will consider, among other things, the director
candidates’ overall qualifications and background, as well as any specialized experience
serving as an independent director of a public company or having executive or board
positions in the chain retail store environment, other significant areas of the Company’s
customer base, electronic money transfer, or other businesses that are part of, or
complementary with, the Company’s 4th WallTM businesses.
	 
	 	•	 	A candidate’s affiliation with a large shareholder will not be a negative consideration
in the evaluation by the Nominating and Governance Committee, although may be considered
regarding meeting applicable independence requirements.
	 
	 	•	 	The Nominating and Governance Committee will select one person from the pool of
candidates who will be presented to the Board for consideration for appointment as a new
independent director.
	 
	 	•	 	The Board will evaluate the person selected for appointment and, taking into
consideration the recommendation of the Nominating and Governance Committee, either appoint
the person to the Board or direct the Nominating and Governance Committee to identify
another candidate from the same pool submitted by the major stockholders for appointment in
accordance with this Schedule B.





Schedule B-1









 





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SCHEDULE
C




FORM
OF JOINT PRESS RELEASE




	 	 	 
	Contacts:
	 	 
	Coinstar, Inc.

	 	Shamrock Activist Value Fund:
	 
	 	 
	Investors

	 	Media
	Brian Turner, Chief Financial Officer

	 	Clifford A. Miller
	425-943-8000

	 	818-973-4297
	 
	 	 
	Media
	 	 
	Marci Maule, Director Public Relations
	 	 
	425-943-8277
	 	 
	 
	 	 
	Tom Ryan
	 	 
	ICR, Inc.
	 	 
	203-682-8200
	 	 
	 
	 	 
	Matthew Sherman / Barrett Golden
	 	 
	Joele Frank, Wilkinson Brimmer Katcher
	 	 
	212-355-4449
	 	 






FOR IMMEDIATE RELEASE




COINSTAR AND SHAMROCK ACTIVIST VALUE FUND

REACH AGREEMENT TO RESOLVE PROXY CONTEST

AT 2008 ANNUAL MEETING OF STOCKHOLDERS



BELLEVUE, Wash.– May 28, 2008 – Coinstar, Inc. (NASDAQ: CSTR) and The Shamrock Activist Value Fund
(“SAVF” or “Shamrock”), which currently owns approximately 13.3% of Coinstar’s outstanding shares,
today announced that they have reached an agreement that will resolve the proxy contest related to
the Company’s 2008 Annual Meeting of Stockholders.



Under the terms of the agreement, the Company’s Board of Directors today appointed Arik Ahitov, one
of the three director candidates previously nominated by SAVF for election to Coinstar’s Board, as
a Coinstar director in the class of directors whose term expires in 2010. SAVF, in turn, will
terminate its proxy contest and will not nominate any candidates for election as directors at the
Coinstar 2008 Annual Meeting on June 3, 2008. With the addition of the SAVF Board designee,
Coinstar’s Board will be expanded to eight directors.



In addition, Coinstar has agreed to proceed with its previously announced plan to add an additional
independent director to its Board by March 1, 2009. The new director will be selected from a group
of candidates submitted for nomination by Coinstar’s major stockholders, including SAVF. The
Board’s Nominating and Governance Committee will consider, among other things, the director
candidates’ overall qualifications and background, as well as any specialized experience serving as
an independent director of a public company or having executive or board positions in the chain
retail store environment, other significant areas of Coinstar’s customer base, electronic money
transfer, or other businesses that are part of, or complementary with, Coinstar’s 4th
WallTM businesses. The new director, who will be appointed to the class of directors
whose term expires in 2009, will be included on the Board’s slate of nominees for election for a
new three-year term at the 2009 Annual Meeting. With the addition of the second new director,
Coinstar’s Board will be expanded to nine directors.





 









 





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In connection with the appointment of the two new directors to Coinstar’s Board, SAVF has agreed to
not solicit proxies in connection with the 2008 Annual Meeting, and to vote its shares in support
of all of the
Board’s director nominees to be presented at the 2008 Annual Meeting. Additionally, SAVF has
agreed to abide by certain standstill provisions, including, among other things, not soliciting
proxies for or otherwise participating in any contested election relating to Coinstar directors or
submitting any proposal at Coinstar stockholder meetings through the completion of the 2010 Annual
Meeting of Stockholders, with certain exceptions specified in the agreement.



Keith D. Grinstein, Coinstar’s Chairman of the Board, said, “We are pleased to have reached this
agreement with Shamrock, our largest investor, which we believe is in the best interests of the
Company and all Coinstar stockholders. During the past few months, we have met with a large number
of our major stockholders, and we value their insights regarding the future of our Company. We
believe our stockholders support the addition of new independent directors to our Board. Our Board
is committed to enhancing value for all Coinstar stockholders and we look forward to working with
our new directors to continue executing our successful 4th Wall strategy.”



“As Coinstar’s largest stockholder, we are pleased to have reached an amicable resolution which we
believe is in the best interest of all Coinstar stockholders,” Michael McConnell of the Shamrock
Activist Value Fund stated.  “The addition of two new independent directors, including Arik Ahitov,
one of our director candidates, to Coinstar’s Board is a positive, stockholder friendly step that,
we believe, will bring additional perspectives and skills beneficial to the Company and its
stockholders.  Our Board designee will work diligently and constructively with his fellow board
members.”



Mr. McConnell added, “We endorse the Company’s 4th Wall strategy and look forward to working with
management as it executes against that strategy to drive improved returns on invested capital and
stockholder value.”  



Arik Ahitov joined Shamrock Capital Advisors, Inc. in September 2004, where he currently serves as
a Vice President, a position he has held since September 2006. Mr. Ahitov has also served as a
portfolio manager for the Shamrock Activist Value Fund since September 2004 and is a CFA Level 3
candidate. Prior to obtaining his Masters in Business Administration from the University of
California, Los Angeles Anderson School of Management, Mr. Ahitov served as a consultant for
Mitchell Madison Group, a management consulting firm, a business strategy analyst for FreeDecision,
a technology start-up company, and as an investment banker at both Salomon Smith Barney, a
financial advisory services firm, and Royal Management, an investment services firm. Mr. Ahitov
graduated from Northwestern University with a Bachelor of Arts degree.



Additional information relating to the agreement with SAVF will be contained in a Form 8-K to be
filed by the Company.




About The Shamrock Activist Value Fund



The Shamrock Activist Value fund was formed by Shamrock Holdings, Inc. to make equity investments
in small-cap, publicly-traded companies.  The Shamrock Activist Value fund combines a deep value
focus with a strategy of responsible stockholder activism.  The Shamrock Activist Value Fund’s
theory of activist investing relies on the ability of engaged stockholders to advocate for
corporate changes designed to unlock value for all stakeholders.



Founded in 1978, Shamrock Holdings has been an investor in a wide range of domestic and
international private equity transactions, marketable securities and real estate. Shamrock
Holding’s foundation as the private investment firm for a distinguished family — the Roy E. Disney
family — has helped to build a strong tradition of integrity, service and responsibility to our
investors and portfolio companies. 





 









 





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About Coinstar, Inc.



Coinstar, Inc. (NASDAQ: CSTR) is a multi-national company offering a range of 4th WallTM solutions
for the retailers’ front of store consisting of self-service coin counting, money transfer,
electronic payment
solutions, entertainment services and self-service DVD rental. The Company’s products and services
can be found at more than 50,000 retail locations including supermarkets, drug stores, mass
merchants, financial institutions, convenience stores and restaurants.



Important Additional Information



On April 30, 2008, Coinstar began mailing to its stockholders a definitive proxy statement with a
WHITE Proxy Card and other materials in connection with Coinstar’s 2008 Annual Meeting of
Stockholders. STOCKHOLDERS ARE URGED TO READ COINSTAR’S DEFINITIVE PROXY STATEMENT AND ANY OTHER
RELEVANT DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. The definitive proxy statement and
other documents relating to the 2008 Annual Meeting and Coinstar can be obtained free of charge
from the SEC’s website at http://www.sec.gov. These documents can also be obtained free of charge
from Coinstar at its website, www.coinstar.com, under: About Us – Investor Relations – SEC Filings.
The contents of the websites above are not deemed to be incorporated by reference into the
definitive proxy statement or other materials. In addition, copies of the definitive proxy
statement, WHITE Proxy Card and other materials may be requested by contacting our proxy
solicitor, Georgeson Inc. by phone, toll-free, at 1-(888) 605-7543.



Detailed information regarding the names, affiliations and interests of individuals who are
participants, including Coinstar directors and certain executive officers and other employees, in
the solicitation of proxies of Coinstar’s stockholders is available in Coinstar’s definitive proxy
statement.



Safe Harbor for Forward-Looking Statements



Certain statements in this press release are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. The words “will,” “believe,” “estimate,”
“expect,” “intend,” “anticipate,” “goals,” “prospects,” variations of such words, and similar
expressions identify forward-looking statements, but their absence does not mean that the statement
is not forward-looking. The forward-looking statements in this press release include statements
regarding Coinstar, Inc.’s anticipated performance and Board actions. Forward-looking statements
are not guarantees of future performance and actions, and they may vary materially from those
expressed or implied in such statements. Differences may result from actions taken by Coinstar,
including its Board, as well as from risks and uncertainties beyond Coinstar’s control. Such risks
and uncertainties include, but are not limited to, actions taken by Coinstar’s stockholders, the
termination, non-renewal or renegotiation on materially adverse terms of our contracts with our
significant retailers, payment of increased service fees to retailers, fewer than expected
installations, the ability to attract new retailers, penetrate new markets and distribution
channels, cross-sell our products and services and react to changing consumer demands, the ability
to achieve the strategic and financial objectives for our entry into or expansion of new
businesses, the ability to adequately protect our intellectual property, and the application of
substantial federal, state, local and foreign laws and regulations specific to our business. The
foregoing list of risks and uncertainties is illustrative, but by no means exhaustive. For more
information on factors that may affect future performance, please review “Risk Factors” described
in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission. These forward-looking statements reflect Coinstar’s
expectations as of the date of this press release. Coinstar undertakes no obligation to update the
information provided herein.




# # #





Schedule C-1