Exhibit 10.12
EMPLOYMENT AGREEMENT
COINSTAR, INC.
And
Richard Stillman
Dated as of November 17, 2000
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), dated as of November 17,
2000, between Coinstar, Inc., a Delaware corporation ("Employer"), and Richard
Stillman ("Employee");
W I T N E S S E T H:
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WHEREAS, Employer and Employee wish to document certain understandings
and agreements; and
WHEREAS, Employer desires to continue 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:
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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. EMPLOYMENT
Employer will continue to employ Employee and Employee will continue to
provide services to Employer as its Chief Operating Officer.
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 of this Agreement.
3. TERM
Unless otherwise terminated pursuant to paragraph 6 of this Agreement,
Employee's term of employment under this Agreement shall expire on December 31,
2002.
4. COMPENSATION
During the term of this Agreement, 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:
EMPLOYMENT AGREEMENT 1
4.1. Base Salary
Employee's compensation shall consist, in part, of an annual base
salary of one hundred and ninety thousand dollars ($190,000) 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 annually by Employer's
Compensation Committee to determine in its discretion an appropriate increase in
the base salary.
4.2. Bonus
Employee shall be eligible for and receive her annual cash bonus for
each calendar year during the term of this Agreement, provided Employer meets
performance targets applicable to such bonuses, and, provided further, any such
bonus shall be pro-rated in the event of a termination without Cause or for Good
Reason following December 31, 2000.
4.3. Acceleration of Stock Options
Seventy-five percent (75%) of Employee's unvested Coinstar options
shall immediately vest in the event Employee is terminated without Cause prior
to December 31, 2001. Fifty percent (50%) of Employee's unvested Coinstar
options shall immediately vest if Employee terminates for Good Reason at any
time, or is terminated without Cause after December 31, 2001, but prior to
December 31, 2002.
5. BENEFITS
During the term of this Agreement, 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.
6. TERMINATION
Employment of Employee pursuant to this Agreement may be terminated as
follows, but in any case, the provisions of paragraph 8 hereof shall survive the
termination of this Agreement and the termination of Employee's employment
hereunder:
6.1. 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).
EMPLOYMENT AGREEMENT 2
6.2. By Employee
Employee may terminate her employment at any time, for any reason, upon
giving Notice of Termination.
6.3. Automatic Termination
This Agreement and Employee's employment hereunder shall terminate
automatically upon the death or total disability of Employee. The term "total
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disability" as used herein shall mean Employee's inability to perform the duties
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set forth in paragraph 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 paragraph
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.
6.4. Notice
The term "Notice of Termination" shall mean at least 30 days' written
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notice of termination of Employee's employment, during which period Employee's
employment and performance of services will continue; provided, however, that
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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.
7. TERMINATION PAYMENTS
In the event of termination of the employment of Employee, all
compensation and benefits set forth in this Agreement shall terminate except as
specifically provided in this paragraph 7:
7.1. Termination by Employer
If Employer terminates Employee's employment without Cause prior to the
end of the term of this Agreement, Employee shall be entitled to receive (a)
termination payments equal to (i) nine (9) months' annual base salary in the
event of such termination prior to December 31, 2001, or (ii) six (6) months'
annual base salary for such termination prior to December 31, 2002, and (b) any
unpaid annual base salary which has accrued for services already performed as of
the date termination of Employee's employment becomes effective. Such payment
shall be provided in equal monthly installments, less applicable deductions and
tax withholding, at regular payroll intervals. Employer agrees to continue
Employee's health insurance benefits, including current dependent coverage, for
twelve (12) months following the date the Employee is terminated without Cause.
Thereafter Employee may self-pay
EMPLOYMENT AGREEMENT 3
health insurance under COBRA if she elects to do so. All other Employer benefits
cease on the date of termination without Cause. If Employee is terminated by
Employer for Cause, Employee shall not be entitled to receive any of the
foregoing benefits, other than those set forth in clause (b) above. In the event
Employee obtains other employment during any salary continuation period
hereunder following a termination without Cause or for Good Reason, Employer's
obligation shall be offset by the amount of salary or pay received from such
other employment.
7.2. Termination by Employee
In the case of the termination of Employee's employment by Employee for
other than Good Reason, Employee shall not be entitled to any payments
hereunder, other than those set forth in clause (b) of subparagraph 7.1 hereof.
In the case of a termination for Good Reason, Employee shall be entitled to
receive termination payments equal to the lesser of six (6) months' annual base
salary and the annual base salary Employee would have received if her employment
had continued until the end of the term of this Agreement. Such payment shall be
provided in equal monthly installments, less applicable deductions and tax
withholding, at regular payroll intervals. Employer agrees to continue
Employee's health insurance benefits, including current dependent coverage, for
twelve (12) months following the date the Employee is terminated for Good
Reason. Thereafter Employee may self-pay health insurance under COBRA if she
elects to do so. All other Employer benefits cease on the date of termination
for Good Reason. For purposes of this Agreement, "Good Reason" means the
assignment to Employee of any duties inconsistent in any significant respect
with Employee's position, authority, duties or responsibilities that results in
any material diminution in such position, authority, duties or responsibilities,
or the termination of employment by Employee more than 30 and less than180 days
following the hiring of a new President and Chief Executive Officer by Employer.
7.3 Expiration of Term
In the case of a termination of Employee's employment as a result of
the expiration of the term of this Agreement, Employee shall not be entitled to
receive any payments hereunder, other than those set forth in clause (b) of
subparagraph 7.1 and any bonus to which Employee may be entitled under Section
4.2 hereof.
7.4 Payment Schedule
All payments under this paragraph 7 shall be made to Employee at the
same interval as payments of salary were made to Employee immediately prior to
termination.
7.5 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
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following events:
EMPLOYMENT AGREEMENT 4
(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;
(c) Current use by Employee of illegal substances; deception,
fraud, misrepresentation or dishonesty by Employee; any incident
materially compromising Employee's reputation or ability to represent
Employer with the public; 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.
8. NONCOMPETITION AND NONDISCLOSURE
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
the termination of employment without Cause or for Good Reason or for the period
of the severance payment, whichever is less, Employee agrees that she will not
divulge any confidential information or work directly or indirectly (as an
employee, consultant, advisor or owner) for any of the following businesses or
companies and their affiliates: Catalina Marketing Corporation, News America
Marketing, ScanCoin Corporation, Brinks, Inc., planet U and Valassis
Corporation.
If within one year of the date of termination without Cause or for Good
Reason or for the severance payment period, whichever is less, Employee violates
this Section 8; Employee shall forfeit any remaining termination payments
provided under Section 7. In addition, the Board may require that Employee
forfeit to Employer any economic value realized upon exercise of options that
were accelerated in connection with the Employees termination for Good Reason or
without Cause.
9. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE
Employee represents and warrants that neither the execution nor the
performance of this 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.
10. 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 telecopy or other electronic facsimile transmission or by registered or
certified mail, return receipt requested, at the address set
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forth below or at such other address as may hereafter be designated by notice
given in compliance with the terms hereof:
If to Employee: Richard Stillman
6870 West Mercer
Way Mercer Island, Washington 98040
If to Employer: Coinstar, Inc.
1800 114/th/ Avenue SE
Bellevue, WA 98004
Copy to: Perkins Coie
Attn: Stephanie Daley-Watson
1201 Third Ave., 40th Floor
Seattle, WA 98101-3099
If notice is mailed, such notice shall be effective upon mailing, or if notice
is personally delivered or sent by telecopy or other electronic facsimile
transmission, it shall be effective upon receipt.
11. 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 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.
12. 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.
13. 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
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upon by Employer and Employee or chosen in accordance
EMPLOYMENT AGREEMENT 6
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.
14. 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
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.
15. 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.
16. 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.
17. 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.
EMPLOYMENT AGREEMENT 7
18. COUNTERPARTS
This Agreement, and any amendment or modification entered into pursuant
to paragraph 14 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.
19. ENTIRE AGREEMENT
This Agreement on and as of the date hereof constitutes the entire
agreement between Employer and Employee with respect to the subject matter
hereof and all prior or contemporaneous oral or written communications,
understandings or agreements between Employer and Employee with respect to such
subject matter, with the exceptions of any noncompetition or non-disclosure
agreement, are hereby superseded and nullified in their entireties.
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.
EMPLOYEE COINSTAR, INC.
/s/ Richard Stillman By /s/ Jens H. Molbak
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RICHARD STILLMAN Its Chairman of the Board
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EMPLOYMENT AGREEMENT 8