Outerwall Inc (OUTR) Enters Into Cooperation Agreement With Engaged Capital

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Page 12 of 15 – SEC Filing
The following constitutes Amendment No. 2 to the Schedule 13D filed by the undersigned (“Amendment No. 2”).  This Amendment No. 2 amends the Schedule 13D as specifically set forth herein.
Item 4.
Purpose of Transaction.
Item 4 is hereby amended to add the following:
On April 11, 2016, Engaged Capital and certain of its affiliates (“Engaged Capital”) entered into a Cooperation Agreement (the “Cooperation Agreement”) with the Issuer. Pursuant to the Cooperation Agreement, the Issuer increased the size of the Board of Directors (the “Board”) by one member and appointed Jeffrey J. Brown to the Board, effective immediately, in the class of directors with a term expiring at the Issuer’s 2017 annual meeting of stockholders (the “2017 Annual Meeting”). The Issuer also agreed to appoint two additional independent directors to the Board to be submitted by Engaged Capital, which directors are expected to be named on or before August 1, 2016, and that following such appointments, the Board will consist of a maximum of nine directors. One of such additional directors will be appointed to the class of directors with a term expiring at the Issuer’s 2018 annual meeting of stockholders and the other will be appointed to the class of directors with a term expiring at the Issuer’s 2019 annual meeting of stockholders. The Issuer also agreed that no later than May 1, 2016, the Board shall retain a nationally recognized law firm to advise the Board in connection with its evaluation of strategic and financial alternatives to maximize stockholder value.
Pursuant to the Cooperation Agreement, the Issuer also agreed that, during the Standstill Period (as defined below), Mr. Brown shall be provided advance notice of, and the opportunity to participate in, any conference or call between (i) the Chair of the Board and the Issuer’s financial advisors regarding the Board’s exploration of strategic and financial alternatives, and (ii) the Chair of the Board and the Issuer’s Chief Executive Officer regarding a conference or call primarily dedicated to material developments in connection with the Board’s exploration of strategic and financial alternatives. In the event Mr. Brown is unable to participate in such conference or call between the Chair of the Board and the Issuer’s Chief Executive Officer, then he will be debriefed about such discussion at a weekly conference with the Issuer’s Chief Executive Officer.
Pursuant to the Cooperation Agreement, Engaged Capital has agreed to vote its shares at the Issuer’s 2016 annual meeting of stockholders (the “2016 Annual Meeting”) (i) in favor of the slate of directors recommended by the Board, (ii) in favor of the ratification of the appointment of the Issuer’s independent registered public accounting firm and (iii) in accordance with the recommendation of Institutional Shareholder Services on each other proposal to come before the 2016 Annual Meeting, subject to certain exceptions. In addition, Engaged Capital agreed to certain customary restrictions from the date of the Cooperation Agreement through the date that is thirty (30) days prior to the deadline established pursuant to the Issuer’s Bylaws for the submission of stockholder nominations for directors at the 2017 Annual Meeting (the “Standstill Period”).
The foregoing description of the Cooperation Agreement is qualified in its entirety by reference to the Cooperation Agreement, which is attached as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 6.
Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
Item 6 is hereby amended to add the following:

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