Exhibit 10.3
COINSTAR, INC.
1997 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
Adopted on March 28, 1997
Approved by Stockholders on June 9, 1997
Amended March 25, 1999
Approved by Stockholders on June 16, 1999
Amended December 14, 2000
1. Purpose
(a) The purpose of the 1997 Non-Employee Directors' Stock Option Plan (the
"Plan") is to provide a means by which each director of Coinstar, Inc., a
Delaware corporation (the "Company") who is not otherwise an employee of the
Company or of any Affiliate of the Company (each such person being hereafter
referred to as a "Non-Employee Director") will be given an opportunity to
purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent corporation
or subsidiary corporation of the Company as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to secure and retain the
services of persons capable of serving as Non-Employee Directors of the Company,
and to provide incentives for such persons to exert maximum efforts for the
success of the Company.
2. Administration
The Plan shall be administered by the Board of Directors of the Company
(the "Board").
3. Shares Subject to the Plan
(a) Subject to the provisions of paragraph 10 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to options granted under
the Plan shall not exceed in the aggregate Two Hundred Thousand (200,000) shares
of the Company's common stock. If any option granted under the Plan shall for
any reason
expire or otherwise terminate without having been exercised in full, the stock
not purchased under such option shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
4. Eligibility
Options shall be granted only to Non-Employee Directors of the Company.
5. Non-Discretionary Grants
(a) Each person who is elected or appointed for the first time to be a
Non-Employee Director automatically shall, upon the date of his or her initial
election or appointment to be a Non-Employee Director by the Board or
stockholders of the Company, be granted an option to purchase ten thousand
(10,000) shares of common stock of the Company on the terms and conditions set
forth herein (each, an "Intial Grant").
(b) On the date of each Annual Meeting of Stockholders of the Company,
each person who is then a Non-Employee Director automatically shall be granted
an option to purchase five thousand (5,000) shares of common stock of the
Company on the terms and conditions set forth herein (each, an "Annual Grant");
provided, that if the Non-Employee Director receiving an Annual Grant has not
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served for twelve months prior to the date of the Annual Grant, then the number
of shares subject to that Non-Employee Director's option under this paragraph
5(b) shall be equal to the number set forth in the previous sentence, adjusted
by a fraction, the numerator of which fraction shall be equal to the number of
days on which the individual was a Non-Employee Director during the preceding
twelve months and the denominator of which fraction shall be three hundred sixty
five (365), increased to the next higher whole number of shares. Notwithstanding
the foregoing, if the Non-Employee director has received an "Election Grant," as
descried below, the Non-Employee Director shall no longer be eligible to receive
the Annual Grant; provided further, that if a Director received a grant in
connection with the 1999 Annual Meeting of 15,000 shares, such Director shall
not receive an Annual Grant at the 2001 Annual Meeting.
6. Option Provisions
Each option shall contain the following terms and conditions:
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(a) The term of each option commences on the date it is granted and,
unless sooner terminated as set forth herein, expires on the date ("Expiration
Date") (10) years from the date of grant. If the optionee's service as a
Director or as an employee of or consultant to the Company or any Affiliate of
the Company terminates for any reason or for no reason, the option shall
terminate on the earlier of the Expiration Date or the date three (3) months
following the date of termination of service; provided, however, that if such
termination of service is due to the optionee's death, the option shall
terminate on the earlier of the Expiration Date or twelve (12) months following
the date of the optionee's death. In any and all circumstances, an option may
be exercised following termination of the optionee's service as a Director of
the Company only as to that number of shares as to which it was exercisable on
the date of termination of such service under the provisions of subparagraph
6(e).
(b) The exercise price of each option shall be one hundred percent
(100%) of the fair market value of the stock subject to such option on the date
such option is granted.
(c) The optionee may elect to make payment of the exercise price
under one of the following alternatives:
(i) Payment of the exercise price per share in cash at the
time of exercise; or
(ii) Provided that at the time of the exercise the Company's
common stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of shares of common stock of the Company already owned by
the optionee, held for the period required to avoid a charge to the Company's
reported earnings, and owned free and clear of any liens, claims, encumbrances
or security interest, which common stock shall be valued at fair market value on
the date preceding the date of exercise; or
(iii) Payment by a combination of the methods of payment
specified in subparagraph 6(c)(i) and 6(c)(ii) above.
Notwithstanding the foregoing, this option may be exercised pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
which results in the receipt of cash (or check) by the Company prior to the
issuance of shares of the Company's common stock.
(d) An option shall not be transferable except by will or by the laws
of descent and distribution, and shall be exercisable during the lifetime of the
person
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to whom the option is granted only by such person or by his or her guardian or
legal representative, unless otherwise specified in the option, in which case
the option may be transferred upon such terms and conditions as are set forth in
the option, as the Board or the Committee shall determine in its discretion,
including (without limitation) pursuant to a "domestic relations order."
Notwithstanding the foregoing, the person to whom an option is granted may, by
delivering written notice to the Company, in a form satisfactory to the Company,
designate a third party who, in the event of the death of the optionee, shall
thereafter be entitled to exercise the option.
(e) Each Initial Grant and each Annual Grant shall be fully vested
and exercisable at all times. (f) The Company may require any optionee, or any
person to whom an option is transferred under subparagraph 6(d), as a condition
of exercising any such option: (i) to give written assurances satisfactory to
the Company as to the optionee's knowledge and experience in financial and
business matters; and (ii) to give written assurances satisfactory to the
Company stating that such person is acquiring the stock subject to the option
for such person's own account and not with any present intention of selling or
otherwise distributing the stock. These requirements, and any assurances given
pursuant to such requirements, shall be inoperative if (i) the issuance of the
shares upon the exercise of the option has been registered under a then-
currently-effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), or (ii), as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then-applicable securities laws.
(g) Notwithstanding anything to the contrary contained herein, an
option may not be exercised unless the shares issuable upon exercise of such
option are then registered under the Securities Act or, if such shares are not
then so registered, the Company has determined that such exercise and issuance
would be exempt from the registration requirements of the Securities Act.
7. Covenants of the Company
(a) During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the
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Securities Act either the Plan, any option granted under the Plan, or any stock
issued or issuable pursuant to any such option. If the Company is unable to
obtain from any such regulatory commission or agency the authority which counsel
for the Company deems necessary for the lawful issuance and sale of stock under
the Plan, the Company shall be relieved from any liability for failure to issue
and sell stock upon exercise of such options.
8. Use of Proceeds from Stock
Proceeds from the sale of stock pursuant to options granted under the Plan
shall constitute general funds of the Company.
9. Miscellaneous
(a) Neither an optionee nor any person to whom an option is transferred
under subparagraph 6(d) shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.
(b) Nothing in the Plan or in any instrument executed pursuant thereto
shall confer upon any Non-Employee Director any right to continue in the service
of the Company or any Affiliate or shall impair any right of the Company, its
Board or stockholders or any Affiliate to terminate the service of any Non-
Employee Director.
(c) No Non-Employee Director, individually or as a member of a group, and
no beneficiary or other person claiming under or through such Non-Employee
Director, shall have any right, title or interest in or to any option reserved
for the purposes of the Plan except as to such shares of common stock, if any,
as shall have been reserved for such Non-Employee Director pursuant to any
previous option grant.
(d) In connection with each option made pursuant to the Plan, it shall be
a condition precedent to the Company's obligation to issue or transfer shares to
a Non-Employee Director, or to evidence the removal of any restrictions on
transfer, that such Non-Employee Director make arrangements satisfactory to the
Company to insure that the amount of any federal or other withholding tax
required to be withheld with respect to such sale or transfer, or such removal,
is made available to the Company for timely payment of such tax.
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10. Adjustments Upon Changes in Stock
(a) If any change is made in the stock subject to the Plan, or subject to
any option granted under the Plan, without the receipt of consideration by the
Company (through merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan, and the outstanding options will be
appropriately adjusted in the class(es) and number of shares and price per share
of stock subject to such outstanding options. Such adjustments shall be made by
the Board or the Committee, the determination of which shall be final, binding
and conclusive. (The conversion of any convertible securities of the Company
shall not be treated as a "transaction not involving the receipt of
consideration by the Company").
(b) In the event of: (1) a merger or consolidation in which the Company is
not the surviving corporation; (2) 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; or (3) any
other capital reorganization in which more than fifty percent (50%) of the
shares of the Company entitled to vote are exchanged, the vesting of options
outstanding under the Plan shall accelerate such that each option may be
exercised with respect to 100% of the shares, and the options shall terminate if
not exercised prior to such event.
11. Amendment of the Plan
(a) The Board at any time, and from time to time, may amend the Plan.
Except as provided in paragraph 10 relating to adjustments upon changes in
stock, no amendment shall be effective unless approved by the stockholders of
the Company to the extent stockholder approval is necessary for the Plan to
satisfy any Nasdaq or securities exchange listing requirements.
(b) Rights and obligations under any option granted before any amendment
of the Plan shall not be altered or impaired by such amendment unless (i) the
Company requests the consent of the person to whom the option was granted and
(ii) such person consents in writing.
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12. Termination or Suspension of the Plan
(a) The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the tenth (10th) anniversary of its
adoption by the Board. No options may be granted under the Plan while the Plan
is suspended or after it is terminated.
(b) Rights and obligations under any option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
(c) The Plan shall terminate upon the occurrence of any of the events
described in Section 10(b) above.
13. Effective Date of Plan; Conditions of Exercise
(a) The Plan shall become effective upon adoption by the Board of
Directors, subject to the condition subsequent that the Plan is approved by the
stockholders of the Company.
(b) No option granted under the Plan shall be exercised or exercisable
unless and until the condition of subparagraph 13(a) above has been met.
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EXHIBIT G
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