Redbox 2008 Annual Report Download - page 110

For purposes of all of the change-of-control agreements, “change of control” is generally defined as:
• a board change in which individuals who constitute the board as of the date of the agreement cease to
constitute at least a majority of the board;
• the acquisition by any individual, entity, or group of beneficial ownership of (a) 20% or more of either the
then outstanding common stock or the combined voting power of the then outstanding voting securities
entitled to vote in the election of directors, which acquisition is not approved in advance by a majority of the
incumbent directors, or (b) 33% or more of either the then outstanding common stock or the combined
voting power of the then outstanding voting securities entitled to vote in the election of directors, which
acquisition is approved in advance by a majority of incumbent directors;
• a reorganization, merger, or consolidation approved by the stockholders; or
• a complete liquidation, dissolution, or the sale or other disposition of all or substantially all of the assets.
Change-of-Control Provisions in the Company’s Equity Plans. The 1997 Plan provides that the plan
administrator retains the discretion to do one or more of the following in the event of a merger, reorganization,
or sale of substantially all of the assets of Coinstar:
• arrange to have the surviving or successor entity or any parent entity thereof assume the options or grant
replacement options with appropriate adjustments in the option prices and adjustments in the number and
kind of securities issuable upon exercise;
• shorten the period during which options are exercisable;
• accelerate any vesting schedule to which an option is subject; or
• cancel vested options in exchange for a cash payment upon such terms and conditions as determined by the
Board of Directors at the time of the event.
Since December 2005, the Compensation Committee has granted stock options and restricted stock awards
under the 1997 Plan to certain executive officers that provide for accelerated vesting upon a merger, reorganization,
or sale of substantially all of the assets of Coinstar, as follows:
• Options granted to Messrs. Cole, Davis, and Turner since December 2005 fully accelerate in vesting, and the
earned restricted stock awards granted to them are no longer subject to forfeiture.
• Options and earned restricted stock awards granted to our other Named Executive Officers since
December 2005 accelerate in vesting and, with respect to the earned restricted stock, are no longer subject
to forfeiture, if a successor company does not assume or substitute such awards. In the event the options and
earned restricted stock awards are assumed or substituted and the Named Executive Officer’s employment or
service relationship is terminated in connection with a change of control or within one year of the transaction
without cause or by the executive for good reason, 50% of the unvested portions of the options and earned
restricted stock awards automatically vest and, with respect to the earned restricted stock, are no longer
subject to forfeiture. For purposes of these awards, “cause” and “good reason” are defined as described
below under the 2000 Plan.
The 2000 Amended and Restated Equity Incentive Plan (the “2000 Plan”) generally defines “company
transaction” as:
• a dissolution, liquidation, or sale of substantially all of the assets of the Company;
• a merger or consolidation in which the Company is not the surviving corporation; or
• a reverse merger in which the Company is the surviving corporation but the shares of the Company’s
common stock outstanding immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash, or otherwise.
The 2000 Plan provides that in the event of a company transaction (as defined above) (i) any surviving
corporation or a parent of such surviving corporation will assume or substitute awards or (ii) such awards will
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