Employment Agreement



 Exhibit 10.4 
 EMPLOYMENT AGREEMENT 
 COINSTAR, INC. 

and 
 GALEN C.
SMITH 
 Executed on January 2, 2013 







 EMPLOYMENT AGREEMENT 

This Employment Agreement (this “Agreement”), executed on January 2, 2013 and effective on April 1, 2013, is between
Coinstar, Inc., a Delaware corporation (“Employer”), and Galen C. Smith (“Employee”); 
 W I T N E S S
E T H: 
 WHEREAS, Employer and Employee wish to document certain understandings and agreements; and 

WHEREAS, Employer desires to employ Employee upon the terms and conditions set forth herein; and 

WHEREAS, Employee is willing to provide services to Employer upon the terms and conditions set forth herein; 

A G R E E M E N T S: 
 NOW, THEREFORE, for and in consideration of the foregoing premises and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Employer and Employee hereby
agree as follows: 
  

	1.	POSITION 

  

	 	1.1	Employment 

 Employer will
employ Employee and Employee will provide services to Employer as the Chief Financial Officer. 
  

	 	1.2	Attention and Effort 


Employee will devote all of her productive time, ability, attention and effort to Employer’s business and will skillfully serve its
interests during the Term (as defined below). 
  

	 	1.3	Term 

 Employee’s
term of employment as Chief Financial Officer under this Agreement shall begin as of the effective date of this Agreement and shall continue until terminated pursuant to Section 2 of this Agreement (the “Term”). 

  

									
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	 	1.4	Compensation 

 During the
Term, Employer agrees to pay or cause to be paid to Employee, and Employee agrees to accept in exchange for the services rendered hereunder by her, the following compensation: 

 

	 	(a)	Base Salary 

 Employee’s compensation as Chief Financial Officer shall consist, in part, of an annual base salary of ($400,000) before all customary payroll deductions. Such annual base salary shall be paid in
substantially equal installments and at the same intervals as other officers of Employer are paid. Employee’s salary shall be reviewed by Employer’s Compensation Committee as appropriate to determine in its discretion whether it is
appropriate to increase the base salary. 
  

	 	(b)	Bonus 


Employee shall be eligible for cash bonuses consistent with the existing program for executive officers, provided
performance targets applicable to such bonuses are met, and, provided further, any such bonus shall be pro-rated in the event of a termination without Cause. 
  

	 	1.5	Benefits 

 During the
Term, Employee will be entitled to participate, subject to and in accordance with applicable eligibility requirements, in fringe benefit programs as shall be provided from time to time by, to the extent required, action of Employer’s Board of
Directors. 
  

	2.	TERMINATION 

 Employment
of Employee pursuant to this Agreement may be terminated as follows, but in any case, the provisions of Section 4 hereof shall survive the termination of this Agreement and the termination of Employee’s employment hereunder: 

 

	 	2.1	By Employer 

 With or
without Cause (as defined below), Employer may terminate the employment of Employee at any time during the term of employment upon giving Notice of Termination (as defined below). 

 

	 	2.2	By Employee 

 Employee may
terminate her employment at any time, for any reason, upon giving Notice of Termination. 

  

									
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	 	2.3	Automatic Termination 


This Agreement and Employee’s employment hereunder shall terminate automatically upon the death or total disability of Employee. The
term “total disability” as used herein shall mean Employee’s inability to perform the duties set forth in Section 1 hereof for a period or periods aggregating 180 calendar days in any 12-month period as a result of
physical or mental illness, loss of legal capacity or any other cause beyond Employee’s control, unless Employee is granted a leave of absence by the Employer. Employee and Employer hereby acknowledge that Employee’s ability to perform the
duties specified in Section 1 hereof is of the essence of this Agreement. Termination hereunder shall be deemed to be effective (a) at the end of the calendar month in which Employee’s death occurs or (b) immediately upon a
determination by the Employer of Employee’s total disability, as defined herein. 
  

	 	2.4	Termination in Connection With a Change of Control 

 Concurrent with the commencement of Employee’s employment hereunder, Employee and the Employer shall enter into a Change of Control Agreement, in the form attached hereto as Exhibit A.
Notwithstanding Sections 3.1 and 3.2 of this Agreement and in full substitution therefor, if Employee’s employment terminates under circumstances described in the Change of Control Agreement, Employee’s rights upon termination will be
governed by the terms of the Change of Control Agreement and her right to termination payments under this Agreement shall cease. 
  

	 	2.5	Notice 

 The term
“Notice of Termination” shall mean at least 30 days’ written notice of termination of Employee’s employment, during which period Employee’s employment and performance of services will continue; provided,
however, that Employer may, upon notice to Employee and without reducing Employee’s compensation during such period, excuse Employee from any or all of her duties during such period. The effective date of the termination of
Employee’s employment hereunder shall be the date on which such 30-day period expires. 
  

	3.	TERMINATION PAYMENTS 

 In
the event of termination of the employment of Employee during the Term, all compensation and benefits set forth in this Agreement shall terminate except as specifically provided in this Section 3: 

 

	 	3.1	Termination by Employer 


Subject to Section 3.5 hereof, if Employer terminates Employee’s employment without Cause during the Term, Employee shall be
entitled to receive (a) a termination payment equal to twelve (12) months’ annual base salary, (b) any unpaid annual base salary which has accrued for services already performed as of the date termination of Employee’s


  

									
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employment becomes effective, (c) a pro-rated cash bonus consistent with Section 1.4(b) determined at Employee’s target bonus opportunity for the year in which Employee’s
employment terminates, and (d) an amount equal to the product of twelve (12) times the monthly COBRA premium in effect on the date Employee’s employment terminates for the coverage in effect for Employee and, if applicable,
Employee’s spouse and dependent children on such date under the Employer’s group health plans; provided, however, that the Employer may unilaterally amend this clause (d) or eliminate the benefit provided hereunder to the extent it
deems necessary to avoid the imposition of excise taxes, penalties or similar charges on the Employer, including, without limitation, under Section 4980D of the Internal Revenue Code of 1986, as amended (the “Code”). All amounts
payable pursuant to this Section 3.1 (or pursuant to Section 3.2) shall be reduced for applicable deductions and tax withholding. If Employee is terminated by Employer for Cause during the Term, Employee shall not be entitled to receive
any of the foregoing benefits, other than those set forth in Section 3.1(b) above. 
  

	 	3.2	Termination by Employee 


In the case of the termination of Employee’s employment by Employee, Employee shall not be entitled to any payments hereunder, other
than those set forth in Section 3.1(b) hereof if such termination occurs during the Term. 
  

	 	3.3	Payment Schedule 

 All
amounts payable pursuant to Sections 3.1(b) and 3.2 hereof shall be paid to Employee at the same time such amounts would have been paid to Employee had Employee’s employment not been terminated (or at such earlier time as is required by
law). All amounts payable pursuant to Sections 3.1(a), (c) and (d) hereof shall be paid to Employee in a lump sum within ten (10) business days after the release referred to in Section 3.5 hereof becomes effective; provided,
however, that in no event shall such payment be made later than March 15 of the calendar year following the calendar year in which Employee’s employment terminates. 

 

	 	3.4	Cause 

 Wherever reference
is made in this Agreement to termination being with or without Cause, “Cause” is limited to the occurrence of one or more of the following events: 
 (a) Failure or refusal to carry out the lawful duties of Employee described in Section 1 hereof or any directions of the Board of Directors of Employer, which directions are reasonably consistent
with the duties herein set forth to be performed by Employee; 
 (b) Violation by Employee of a state or federal criminal law
involving the commission of a crime against Employer or a felony; 

  

									
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 (c) Current use by Employee of illegal substances; deception, fraud, misrepresentation or
dishonesty by Employee; any act or omission by Employee which substantially impairs Employer’s business, good will or reputation; or 
 (d) Any other material violation of any provision of this Agreement. 
  

	 	3.5	Release 

 Employee’s
entitlement to any benefits pursuant to Sections 3.1(a), (c) and (d) hereof is conditioned on Employee’s execution (and non-revocation) of a release of claims in a form satisfactory to the Employer, which release must become effective
(i.e., Employee must have executed the release and any revocation period must have expired without Employee revoking the release) by the sixtieth (60th) day following the date on which Employee’s employment terminates or such earlier date
as is specified in such release. The Employer shall provide Employee with the form of release no later than the seventh (7th) day following the date on which Employee’s employment terminates. 

 

	 	3.6	Code Section 409A 


The parties intend that this Agreement and the payments and benefits provided hereunder, including, without limitation, those provided
pursuant to Section 3.1 hereof, be exempt from the requirements of Code Section 409A to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treas. Reg. Section 1.409A-1(b)(4), the
involuntary separation pay plan exception described in Treas. Reg. Section 1.409A-1(b)(9)(iii), or otherwise. To the extent Code Section 409A is applicable to this Agreement, the parties intend that this Agreement and any payments and
benefits thereunder comply with the deferral, payout and other limitations and restrictions imposed under Code Section 409A. Notwithstanding anything herein to the contrary, this Agreement shall be interpreted, operated and administered in a
manner consistent with such intentions; provided, however that in no event shall Employer or its agents, parents, subsidiaries, affiliates or successors be liable for any additional tax, interest or penalty that may be imposed on Employee pursuant
to Code Section 409A or for any damages incurred by Employee as a result of this Agreement (or the payments or benefits hereunder) failing to comply with, or be exempt from, Code Section 409A. Without limiting the generality of the
foregoing, and notwithstanding any other provision of this Agreement to the contrary: 
 (a) to the extent Code
Section 409A is applicable to this Agreement, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of
employment unless such termination is also a “separation from service,” as defined in Treas. Reg. Section 1.409A-1(h), after giving effect to the presumptions contained therein (and without regard to the optional alternative
definitions available therein), and, for purposes of any such provision of this Agreement, references to “terminate,” “termination,” “termination of employment” and like terms shall mean separation from service;


  

									
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 (b) if at the time Employee’s employment hereunder terminates, Employee is a
“specified employee” within the meaning of Code Section 409A, then to the extent necessary to avoid subjecting Employee to the imposition of any additional tax or interest under Code Section 409A, amounts that would (but for this
provision) be payable within six (6) months following the date of Employee’s termination of employment shall not be paid to Employee during such period, but shall instead be paid in a lump sum on the first business day of the seventh month
following the date on which Employee’s employment terminates or, if earlier, upon Employee’s death; 
 (c) each
payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments; and 

(d) nothing herein shall act to accelerate any payment to which Employee would otherwise be entitled if such acceleration would subject
Employee to an additional tax or penalty under Code Section 409A. 
  

	4.	NONCOMPETITION, NONDISCLOSURE AND NONDISPARAGEMENT 

 (a) The nature of Employee’s employment with Employer has given Employee access to trade secrets and confidential information, including information about its technology and customers. Therefore,
during the one (1) year following termination of employment for whatever reason, Employee will not engage in, be employed by, perform services for, participate in the ownership, management, control or operation of, or otherwise be connected
with, either directly or indirectly, any business or activity whose efforts are in competition with (i) the products or services manufactured or marketed by Employer at the time of this Agreement, or (ii) the products or services which
have been under research or development by Employer during the term of Employee’s employment, and which Employer has demonstrably considered for further development or commercialization. The geographic scope of this restriction shall extend to
anywhere Employer is doing business, has done business or intends to do business. Employee acknowledges that the restrictions are reasonable and necessary for protection of the business and goodwill of Employer. 

(b) Employee further agrees that he will not at any time disclose confidential information about Employer relating to its business,
technology, practices, products, marketing, sales, services, finances or legal affairs. 
 (c) Following termination of
Employee’s employment for any reason, Employee and Employer shall refrain from making any derogatory comment in the future to the press or any individual or entity regarding the other that relates to their activities or relationship prior to
the date of termination, which comment would likely cause material damage or harm to the business interests or reputation of Employee or Employer. Employee acknowledges that the non-disparagement provisions of this Section 4(c) are essential to
Employer, that Employer would not enter into this Agreement if it did not include this Section 4(c), and that damages sustained by Employer as a result of a breach of this Section 4(c) cannot be


  

									
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adequately quantified or remedied by damages alone. Accordingly, Employer shall be entitled to injunctive and other equitable relief to prevent or curtail any breach of this Section 4(c).

 (d) If Employee violates any provision of this Section 4, Employee shall repay all amounts received by Employee pursuant
to Sections 3.1(a), (c) and (d) hereof. In the event any such violation occurs prior to the payment of such amounts, Employee shall cease to be entitled to any payment pursuant to such Sections. 

 

	5.	REPRESENTATIONS AND WARRANTIES OF EMPLOYEE 

 Employee represents and warrants that neither the execution nor the performance of this Agreement nor the execution or performance of the Proprietary Information and Invention Agreement by Employee will
violate or conflict in any way with any other agreement by which Employee may be bound, or with any other duties imposed upon Employee by corporate or other statutory or common law. 

 

	6.	FORM OF NOTICE 

 All
notices given hereunder shall be given in writing, shall specifically refer to this Agreement and shall be personally delivered or sent by registered or certified mail, return receipt requested, at the address set forth below or at such other
address as may hereafter be designated by notice given in compliance with the terms hereof: 
  

									
	If to Employee:            	  		  		  		  	
				
	If to Employer:            	  	Coinstar, Inc.	  		  	
		  	1800 114th Avenue SE	  		  	
		  	Bellevue, WA 98004	  		  	
		  	Attn: Chairman of the Board of Directors	  		  	
		  	cc:     Chief Legal Officer and General Counsel	  		  	
				
	Copy to:            	  	Perkins Coie LLP	  		  	
		  	Attn: Lynn E. Hvalsoe	  		  	
		  	1201 Third Ave., 49th Floor	  		  	
		  	Seattle, WA 98101-3099	  		  	

 If notice is mailed, such notice shall be effective upon mailing, or if notice is personally delivered,
it shall be effective upon receipt. 
  

	7.	ASSIGNMENT 

 This
Agreement is personal to Employee and shall not be assignable by Employee. Employer may assign its rights hereunder to (a) any corporation or other entity resulting from any merger, consolidation or other reorganization to which Employer is a
party or (b) any 

  

									
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corporation, partnership, association or other person to which Employer may transfer all or substantially all of the assets and business of Employer existing at such time. All of the terms and
provisions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. 

 

	8.	WAIVERS 

 No delay or
failure by any party hereto in exercising, protecting or enforcing any of its rights, titles, interests or remedies hereunder, and no course of dealing or performance with respect thereto, shall constitute a waiver thereof. The express waiver by a
party hereto of any right, title, interest or remedy in a particular instance or circumstance shall not constitute a waiver thereof in any other instance or circumstance. All rights and remedies shall be cumulative and not exclusive of any other
rights or remedies. 
  

	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 Employer and Employee 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 Employer from seeking court enforcement or relief based upon an
alleged violation of Employee’s obligations under any noncompetition or non-disclosure agreement. 
  

	10.	AVAILABILITY AND CONSULTATION 

 If Employee’s employment with Employer terminates for any reason, Employee will thereafter be reasonably available to Employer and counsel for Employer for the purpose of enabling Employer to defend
against any legal claims in which Employer determines he may have knowledge or information. Employer will reimburse Employee for reasonable out-of-pocket expenses incurred in connection with any consultations under this Section 10. 

 

	11.	AMENDMENTS IN WRITING 

 No
amendment, modification, waiver, termination or discharge of any provision of this Agreement, nor consent to any departure therefrom by either party hereto, shall in any event be effective unless the same shall be in writing, specifically
identifying this Agreement and the provision intended to be amended, modified, waived, terminated or discharged and signed by Employer and Employee, and each such amendment, modification, waiver, termination or discharge shall be effective only in
the specific instance and for the specific 

  

									
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purpose for which given. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an
agreement in writing and signed by Employer and Employee. 
  

	12.	APPLICABLE LAW 

 This
Agreement shall in all respects, including all matters of construction, validity and performance, be governed by, and construed and enforced in accordance with, the laws of the state of Washington, without regard to any rules governing conflicts of
laws. 
  

	13.	SEVERABILITY 

 If any
provision of this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction, for any reason, including, without limitation, the duration of such provision, its geographical scope or the extent of the activities prohibited or
required by it, then, to the full extent permitted by law (a) all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intent of the parties hereto as
nearly as may be possible, (b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision hereof, and (c) any court or arbitrator having jurisdiction thereover shall
have the power to reform such provision to the extent necessary for such provision to be enforceable under applicable law. 
  

	14.	HEADINGS 

 All headings
used herein are for convenience only and shall not in any way affect the construction of, or be taken into consideration in interpreting, this Agreement. 
  

	15.	COUNTERPARTS 

 This
Agreement, and any amendment or modification entered into pursuant to Section 11 hereof, may be executed in any number of counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute one and the same instrument. 
  

	16.	ENTIRE AGREEMENT 

 Except
for the Proprietary Information and Invention Agreement executed by Employee on June 1, 2009, and the Change of Control Agreement executed on January 2, 2013, this Agreement sets forth the entire understanding between Employee and
Employer, superseding any prior agreements or understandings, express or implied, pertaining to the terms of Employee’s employment with Employer. Employee acknowledges that in executing this Agreement, he does not rely upon any representation
or statement by any representative or agent of Employer concerning the subject matter of this Agreement. 

  

									
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 IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date
set forth above. 
  

							
	 	 	 	 	COINSTAR, INC.
				
	 /s/ Galen C. Smith
	 		 	By	 	 /s/ Raquel Karls

	Galen C. Smith	 		 		 	
		 		 	Its	 	 Chief Human Resources Officer



  

									
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 EXHIBIT A 
 Change of Control Agreement 

  

									
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 CHANGE OF CONTROL AGREEMENT 

This Change of Control Agreement (this “Agreement”), dated as of January 2, 2013 is between Coinstar, Inc. (the
“Employer”), and Galen C. Smith (the “Employee”). 
 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 ending two years after such date. (the “Employment Period”). 
  

	 	1.3	Duties, Authority, and Responsibility 

 During the Employment Period, the Employee’s duties, authority 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. 

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

  
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	 	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: 
  

	 	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 below), 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 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. 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. 

 

	 	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”). 

  
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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. 

(c) If, as a result of the termination of the Employee’s employment, the Employee and the Employee’s spouse and dependent
children are eligible for and timely (and properly) elect to continue coverage under the Employers’ group health plans(s) in accordance with Code Section 4980B(f) (“COBRA”), the Employer shall pay the premium for such coverage
for a period of twelve (12) months following the Date of Termination or until the Employee is no longer entitled to COBRA continuation coverage under the Employer’s group health plan(s), whichever period if shorter. 

  
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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 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 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) A
relocation of the Employee’s principal place of employment to a location more than 50 miles from the Bellevue metropolitan area, except for required travel on the Employer’s business to an extent substantially consistent with the
Employee’s duties and responsibilities; or 

  

	
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 (iv) Any other action or inaction by the Employer that constitutes a
material breach by the Employer of this 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. 
  

	 	5.6	Cause 

 For purposes of
this Agreement, “Cause” means the occurrence of one or more of the following events: 
 (a) Failure or refusal to carry
out the lawful duties of the Employee or any directions of the Board which are consistent with the duties to be performed by the Employee; 
 (b) Violation by the Employee of a state or federal criminal law involving the commission of a crime against the Employer or a felony; 

(c) Current use by the Employee of illegal substances; deception, fraud, misrepresentation or dishonesty by the Employee; any act or
omission by the Employee which substantially impairs the Employer’s business, good will or reputation; or 
 (d) Any
material violation of the confidentiality, non-competition and/or non-solicitation provisions to which the Employee is bound. 
  

	 	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.


  
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	 	6.2	Reaffirmation of Obligations 

 The Employee hereby acknowledges and reaffirms the Employee Proprietary Information and Inventions Agreement previously executed by Employee. 

 

	 	6.3	Prior Agreements 

 The
Employee hereby acknowledges that as of the date of this Agreement, this Agreement sets forth the entire understanding between the Employee and the Employer regarding the subject matter herein and supersedes all prior oral or written agreements on
the subject. 
  

	 	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 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. The 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 the Employee is a “specified employee,” within the meaning of Code Section 409A(a)(2)(B)(i), when the
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. 

  

	
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 IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date
set forth above. 
  

			
	 EMPLOYEE

	
	  

	 Galen C. Smith





					
	
	 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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