Redbox 2008 Annual Report Download - page 121

If any related person transaction is not approved or ratified, the Committee may take such action as it may
deem necessary or desirable in the best interests of the Company and its stockholders.
The Shamrock Agreement (as defined below) was considered and approved by the full Board.
Related Person Transactions
Pursuant to an agreement (the “Shamrock Agreement”) dated May 28, 2008, by and among Coinstar, Inc.,
Shamrock Activist Value Fund, L.P., Shamrock Activist Value Fund II, L.P., Shamrock Activist Value Fund III, L.P.,
Shamrock Activist Value Fund GP, L.L.C., and Shamrock Partners Activist Value Fund, L.L.C. (collectively, the
“Shamrock Group”), Coinstar increased the size of its board of directors by one member to eight members, and, to
fill that vacancy, appointed Arik A. Ahitov, a director nominated by the Shamrock Group, and agreed to generally
support the nomination of Mr. Ahitov through the end of our 2010 Annual Meeting of Stockholders. The Shamrock
Group collectively beneficially owns greater than 5% of Coinstar. If the Shamrock Group’s holdings of Coinstar
common stock become 1,856,377 or fewer shares, then pursuant to the Shamrock Agreement, the Shamrock Group
will use good faith efforts to cause its nominated director to resign from the board of directors. In addition to the
appointment of the director nominated by the Shamrock Group, Coinstar agreed to increase the size of its board of
directors to nine directors and fill that vacancy with an independent director no later than March 1, 2009, whose
term will expire at the 2009 Annual Meeting. Coinstar increased the size of the Board and, on February 27, 2009,
appointed Daniel W. O’Connor to fill that vacancy. In addition, as part of the Shamrock Agreement, the Shamrock
Group made certain covenants regarding proxy solicitation and voting through the end of the 2010 Annual Meeting.
Mr. Ahitov receives the standard compensation received by Coinstar non-employee directors. The components
of Coinstar’s standard non-employee director cash and equity compensation are described above under “2008 Direc-
tor Compensation.” Mr. Ahitov’s cash fees are paid to Shamrock Capital Advisors, Inc., where Mr. Ahitov is a Vice
President and Portfolio Manager. In addition, pursuant to the Shamrock Agreement, Coinstar reimbursed the
Shamrock Group $350,000 for its out-of-pocket expenses relating to its director nominations made pursuant to its
2008 proxy statement filings and entering into the Shamrock Agreement.
Director Independence
The Nasdaq Marketplace Rules require that a majority of our directors be “independent,” as defined by Nasdaq
Marketplace Rule 4200(a)(15). The Board of Directors, following the review and recommendation of the
Nominating and Governance Committee, reviewed the independence of our directors, including whether specified
transactions or relationships exist currently, or existed during the past three years, between our directors, or certain
family members or affiliates of our directors, and Coinstar and our subsidiaries, certain other affiliates, or our
independent registered public accounting firm. In the review, the placement of Coinstar products and services in
West Coast Bank locations, which are owned and operated by West Coast Bancorp, of which Mr. Sznewajs is the
president, chief executive officer, and a member of the board of directors, was considered. In addition, the
independence of a director who was an officer of a company whose parent company has an investment in a company
that has a business relationship with Coinstar, was considered. Further, Mr. Ahitov’s affiliations with Shamrock
funds and their affiliates, collectively a greater than 5% beneficial owner of Coinstar, were considered. As a result of
the review, the Board determined that all of the directors, including Mr. Grinstein and Mr. Rouleau during their
service on the Board, and except for Mr. Cole, who is an employee, were “independent” under the applicable
Nasdaq Marketplace Rules described above. All of the members of each of the Audit, Compensation, and
Nominating and Governance committees, including Mr. Grinstein and Mr. Rouleau, met the criteria for indepen-
dence prescribed by Nasdaq.
Item 14. Principal Accounting Fees and Services.
Fees Paid to Independent Registered Public Accounting Firm
In connection with the audit of the 2008 financial statements and internal control over financial reporting, we
entered into an engagement letter with KPMG LLP that sets forth the terms by which KPMG LLP will perform audit
services for Coinstar. That agreement is subject to alternative dispute resolution procedures, an exclusion of
punitive damages, and various other provisions.
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