**5.4 Payment Schedule**     Payments under Section 5.1(a), 5.2 and 5.3 (other than payments of deferredcompensation, which shall be paid in accordance with the provisions of the plan under whichsuch compensation was deferred) shall be paid to the Employee in a lump sum in cash within30 days of the Date of Termination. Payments under Section 5.1(b) shall be paid toEmployee in twelve (12) equal monthly installments, beginning with the month following themonth containing the Date of Termination and continuing for eleven (11) consecutive monthsthereafter. For purposes of Code Section 409A, each installment payable pursuant toSection 5.1(b) and this Section 5.4 shall be treated as a separate payment.     4. Section 5.5 is amended to read as follows:     **5.5 Good Reason**     (a) For purposes of this Agreement, subject to Section 5.5(b), “***Good Reason***” means theoccurrence or existence of any of the following events or conditions without the Employee’sexpress written consent:          (i) A diminution in the Employee’s Annual Base Salary;          (ii) A diminution in the Employee’s authority, duties or responsibilities ascontemplated by Section 1.3 hereof , excluding for this purpose reasonable changes inparticular duties and reporting responsibilities which may result from the Employerbecoming part of a larger business organization at some future time provided that suchchanges in the aggregate do not result in a material alteration in the Employee’sauthority, duties or responsibilities;          (iii) Any failure by the Employer to comply with and satisfy Section 7 of theEmployment Agreement, provided that the Employer’s successor has received at least tendays’ prior written notice from the Employer or the Employee of the requirements ofSection 7 thereof;          (iv) A relocation of the Employee’s principal place of employment to a location morethan 50 miles from the Seattle metropolitan area, except for required travel on theEmployer’s business to an extent substantially consistent with the Employee’s duties andresponsibilities; or          (v) Any other action or inaction by the Employer that constitutes a material breach bythe Employer of this Agreement or the Employment Agreement.     (b) Notwithstanding any provision in this Agreement to the contrary, termination ofemployment by the Employee will not be for Good Reason unless (i) the Employee notifies theEmployer in writing of the occurrence or existence of the event or condition which theEmployee believes constitutes Good Reason within
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90 days of the occurrence or initial existence of such event or condition (which notice specifically identifies such event orcondition), (ii) the Employer fails to remedy such event or condition within 30 days afterthe date on which it receives such notice (the “***Remedial Period***”), and (iii) the Employeeactually terminates employment within 90 days after the expiration of the Remedial Periodand before the Employer remedies such event or condition. If the Employee terminatesemployment before the expiration of the Remedial Period or after the Employer remedies theevent or condition (even if after the end of the Remedial Period), then the Employee’stermination will not be considered to be for Good Reason.     5. The following new Section 7 is inserted immediately following Section 6.2:     **7. Code Section 409A**     The Employer makes no representations or warranties to Employee with respect to anytax, economic or legal consequences of this Agreement or any payments or other benefitsprovided hereunder, including without limitation under Code Section 409A, and no provisionof this Agreement shall be interpreted or construed to transfer any liability for failureto comply with Code Section 409A or any other legal requirement from Employee or any otherperson to the Employer, any of its affiliates or any other person. Employee, by executingthis Agreement, shall be deemed to have waived any claim against the Employer, itsaffiliates and any other person with respect to any such tax, economic or legalconsequences. However, the parties intend that this Agreement and the payments and otherbenefits provided hereunder shall be exempt from the requirements of Code Section 409A tothe maximum extent possible, whether pursuant to the short-term deferral exceptiondescribed in Treasury Regulation Section 1.409A-1(b)(4), the involuntary separation payplan 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 andbenefits), the parties intend that this Agreement (and such payments and benefits) shallcomply with the deferral, payout and other limitations and restrictions imposed under CodeSection 409A. Notwithstanding any other provision of this Agreement to the contrary, thisAgreement shall be interpreted, operated and administered in a manner consistent with suchintentions. Without limiting the generality of the foregoing, and notwithstanding anyother provision of this Agreement to the contrary, with respect to any payments andbenefits under this Agreement to which Code Section 409A applies, all references in thisAgreement 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). Inaddition, if Employee is a “specified employee,” within the meaning of CodeSection 409A(a)(2)(B)(i), when Employee separates from service, within the meaning of CodeSection 409A(a)(2)(A)(i), then to the extent necessary to avoid subjecting Employee to theimposition of any additional tax under Code Section 409A, amounts that would otherwise bepayable under this Agreement during the six-month period immediately following Employee’sseparation from service shall not be paid to
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Employee during such period, but shall instead be accumulated and paid to Employee (or, in the event of Employee’s death, Employee’sestate) in a lump sum on the first business day following the earlier of (a) the date thatis six months after Employee’s separation from service or (b) Employee’s death.     6. Appendix A Subsection (a) is amended to read as follows:     (a) A “***Board Change***” which, for purposes of this Agreement, shall have occurred ifindividuals who, as of the date of this Agreement, constitute the Board (the “***IncumbentBoard***”) 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 whoseelection, or nomination for election by the Employer’s shareholders, was approved by a voteof at least a majority of the directors then comprising the Incumbent Board shall beconsidered as though such individual were a member of the Incumbent Board, but excludingfor this purpose, any such individual whose initial assumption of office occurs as a resultof either an actual or threatened election contest (as such terms are used in Rule 14a-11of 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 onbehalf of a Person (as hereinafter defined) other than the Board; or     IN WITNESS WHEREOF, the parties have executed and entered into this Amendment on the date setforth above.             COINSTAR, INC.               By /s/ Donald R. Rench  /s/David W. Cole David W. Cole    Its  Secretary    
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