UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant  x

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

¨ Preliminary Proxy Statement

¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x Definitive Proxy Statement

¨ Definitive Additional Materials

¨ Soliciting Material Pursuant to § 240.14a-12

OUTERWALL INC.

(Name of Registrant as Specified in its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

x No fee required.

¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

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¨ Fee paid previously with preliminary materials.

¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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April 30, 2014

Dear Outerwall Stockholders:

We are pleased to invite you to the 2014 Annual Meeting of Stockholders (the “Annual Meeting”). The Annual Meeting will begin at 10:00 a.m. local time on Thursday, June 12, 2014, at Hotel Bellevue, located at 11200 Southeast Sixth Street, Bellevue, Washington 98004. Directions to Hotel Bellevue are available on our website at ir.outerwall.com.

At the Annual Meeting, you will be asked to:

1. elect two directors nominated by our Board of Directors;

2. approve, on an advisory basis, the compensation of our named executive officers;

3. ratify the Audit Committee’s appointment of KPMG LLP as our independent registered public accounting firm; and

4. consider any other business properly presented at the Annual Meeting and any adjournment or postponement of the Annual Meeting.

The Board of Directors recommends that you vote:

FOR the election of the two Board-nominated directors;

FOR the approval of the compensation of our named executive officers; and

FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm.

At the Annual Meeting, you will also have the opportunity to hear a review of our business operations during the past year and ask questions.

If you have any questions concerning the Annual Meeting or any matters contained in the Proxy Statement, please contact our Investor Relations Department via telephone at (425) 943-8242 or via email at investor.relations@outerwall.com.

We hope you can join us at the Annual Meeting. Regardless of whether you plan to attend, please read the enclosed Proxy Statement, and vote by telephone, by internet, or by marking your vote on the enclosed proxy card, signing and dating the proxy card, and returning it to us in the enclosed envelope. Your vote is important, so please return your proxy card or vote by telephone or by internet promptly.

Sincerely,

Nelson C. Chan Chair of the Board of Directors	J. Scott Di Valerio Chief Executive Officer

OUTERWALL INC.

1800 114th Avenue S.E.

Bellevue, WA 98004

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON THURSDAY, JUNE 12, 2014

10:00 A.M. LOCAL TIME

BELLEVUE, WASHINGTON

TO THE STOCKHOLDERS OF OUTERWALL INC.:

On Thursday, June 12, 2014, we will hold our 2014 Annual Meeting of Stockholders (the “Annual Meeting”) at Hotel Bellevue, located at 11200 Southeast Sixth Street, Bellevue, Washington 98004. The Annual Meeting will begin at 10:00 a.m. local time. Directions to Hotel Bellevue, where you will be able to attend the Annual Meeting and vote in person, are available on our website at ir.outerwall.com.

At the Annual Meeting, stockholders will be asked to:

1. elect two directors nominated by our Board of Directors;

2. approve, on an advisory basis, the compensation of our named executive officers;

3. ratify the Audit Committee’s appointment of KPMG LLP as our independent registered public accounting firm; and

4. consider any other business properly presented at the Annual Meeting and any adjournment or postponement of the Annual Meeting.

The Proxy Statement fully describes these items. We have not received notice of other matters that may be properly presented at the Annual Meeting.

You are entitled to vote at the Annual Meeting and any adjournments or postponements of the Annual Meeting if you were a stockholder of record at the close of business on April 17, 2014. At the Annual Meeting and for ten days prior, a list of stockholders of record entitled to vote will be available for any purpose germane to the Annual Meeting at our principal executive offices, 1800 114th Avenue S.E., Bellevue, Washington 98004. If you would like to view the stockholder list, please call our Investor Relations Department at (425) 943-8242.

Regardless of whether you plan to attend the Annual Meeting, please vote by telephone, by internet, or by completing, dating, signing, and returning the enclosed proxy card by mail as promptly as possible in order to ensure your representation at the Annual Meeting. A prepaid return envelope is enclosed for returning the proxy card. Even if you have given your proxy, you may still vote in person if you attend the Annual Meeting. If your shares are held through a broker, bank, or other holder of record and you wish to vote in person at the Annual Meeting, you must obtain a legal proxy issued in your name from your broker, bank, or other holder of record.

The Proxy Statement is furnished in connection with the solicitation of proxies by Outerwall Inc. on behalf of the Board of Directors for the Annual Meeting. Distribution of the Proxy Statement and form of proxy to stockholders is scheduled to begin on or shortly after April 30, 2014.

By Order of the Board of Directors

Donald R. Rench

Chief Legal Officer, General Counsel, and Corporate Secretary

Bellevue, Washington

April 30, 2014

Important Notice Regarding the Availability of Proxy Materials

for the Stockholder Meeting to Be Held on June 12, 2014.

The Proxy Statement and the 2013 Annual Report are available at www.outerwall.com/proxy.

TABLE OF CONTENTS

Item	Page
General Information Concerning Proxies and Voting at the Annual Meeting		1
Proposal 1: Election of Directors		6
Corporate Governance		9
Director Compensation		13
2013 Director Compensation Table		13
Proposal 2: Advisory Vote to Approve Compensation of Named Executive Officers		15
Equity Compensation Plan Information		16
Proposal 3: Ratification of the Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm		18
Report of the Audit Committee		19
Independent Registered Public Accounting Firm’s Fees Report		20
Executive Officers		21
Security Ownership of Certain Beneficial Owners, Directors, and Management		23
Section 16(a) Beneficial Ownership Reporting Compliance		25
Compensation Discussion and Analysis		26
Compensation Committee Report		42
Named Executive Officer Compensation		43
2013 Summary Compensation Table		43
2013 Grants of Plan-Based Awards Table		44
2013 Outstanding Equity Awards at Fiscal Year-End Table		47
2013 Option Exercises and Stock Vested Table		50
Potential Payments Upon Termination or Change of Control Table		57
Policies and Procedures for the Review and Approval or Ratification of Transactions With Related Persons		58
Additional Information		59

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OUTERWALL INC.

1800 114th Avenue S.E.

Bellevue, WA 98004

PROXY STATEMENT

FOR ANNUAL MEETING OF STOCKHOLDERS

GENERAL INFORMATION CONCERNING PROXIES AND VOTING AT THE ANNUAL MEETING

Why did I receive these proxy materials?

We are providing these proxy materials in connection with the solicitation by the Board of Directors (our “Board” or “Board of Directors”) of Outerwall Inc. (“Outerwall,” the “Company,” “we,” “us,” or “our”), a Delaware corporation, of proxies to be voted at our 2014 Annual Meeting of Stockholders (the “Annual Meeting”) and at any adjournment or postponement of the Annual Meeting. This Proxy Statement and form of proxy are scheduled to be distributed to stockholders beginning on or shortly after April 30, 2014.

You are invited to attend our Annual Meeting on Thursday, June 12, 2014, beginning at 10:00 a.m. local time. The Annual Meeting will be held at Hotel Bellevue, located at 11200 Southeast Sixth Street, Bellevue, Washington 98004. Directions to Hotel Bellevue are available on our website at ir.outerwall.com.

What information is included in this Proxy Statement?

The information in this Proxy Statement relates to the proposals to be voted on at the Annual Meeting, the voting process, our Board of Directors and Board committees, the compensation of certain current and former directors and certain current and former executive officers for fiscal year 2013, and other information.

Who is entitled to vote?

Holders of Outerwall common stock at the close of business on April 17, 2014 (the “Record Date”) are entitled to receive the Notice of Annual Meeting of Stockholders (the “Notice”) and vote at the Annual Meeting. As of the close of business on the Record Date, there were 20,382,967 shares of Outerwall common stock outstanding and entitled to vote.

How many votes do I have?

Each share of Outerwall common stock is entitled to one vote on each matter properly brought before the Annual Meeting. For example, if you own 30 shares of Outerwall common stock, you are entitled to 30 votes on each matter at the Annual Meeting. Stockholders do not have cumulative voting rights.

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

If your shares are registered directly in your name with Outerwall’s transfer agent, Computershare Inc., you are considered, with respect to those shares, the “stockholder of record,” and the Notice, Proxy Statement, Outerwall’s Annual Report to Stockholders (including Outerwall’s Form 10-K for the year ended December 31, 2013, as filed on February 6, 2014) (the “Annual Report”), and proxy card have been sent directly to you by Broadridge Financial Solutions, Inc.

If your shares are held in a brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” of such shares. In this case, the Notice, Proxy Statement, Annual Report, and applicable voting instruction form should have been forwarded to you by your broker, bank, or other holder of record who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank, or other holder of record on how to vote your shares by using the voting instruction form included in the applicable mailing.

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What am I voting on?

You are being asked to vote on three proposals:

(1) the election of two directors nominated by our Board of Directors;

(2) the approval, on an advisory basis, of the compensation of our Named Executive Officers (as defined in “Compensation Discussion and Analysis”); and

(3) the ratification of the Audit Committee’s appointment of KPMG LLP as our independent registered public accounting firm.

In addition, you will be asked to consider any other business properly presented at the Annual Meeting and any adjournment or postponement of the Annual Meeting.

How do I vote?

You can vote using any one of the methods described below.

Vote by Internet.    You can vote by internet. The website address for internet voting can be accessed through the website printed on your proxy card or voting instruction form. You will need to use the control number appearing on your proxy card or voting instruction form. You can use the internet to transmit your voting instructions until 11:59 p.m. Eastern Time on the day before the Annual Meeting. Internet voting is available 24 hours a day.

Vote by Telephone.    You can vote by telephone by calling the toll-free telephone number appearing on your proxy card or voting instruction form. You will need to use the control number appearing on your proxy card or voting instruction form. In order to cast your vote telephonically, you must transmit your voting instructions from a touch-tone telephone by 11:59 p.m. Eastern Time on the day before the Annual Meeting. Telephone voting is available 24 hours a day.

Vote by Mail.    You can vote by mail by completing, signing, and dating the proxy card or voting instruction form and returning it in the prepaid return envelope. If you are a stockholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote the shares represented by that proxy as recommended by the Board of Directors. If you are a beneficial owner and you return your signed voting instruction form but do not indicate your voting preferences, please see “What are ‘broker non-votes’ and how do they affect the proposals?” regarding whether your broker, bank, or other holder of record may vote your uninstructed shares on a particular proposal.

Vote in Person at the Annual Meeting.    All stockholders as of the close of business on the Record Date can vote in person at the Annual Meeting. You can also be represented by another person at the Annual Meeting by executing a proper proxy designating that person. If you are a beneficial owner, you must obtain a legal proxy from your broker, bank, or other holder of record and present it to the inspectors of election with your ballot to be able to vote at the Annual Meeting. Even if you plan to attend the Annual Meeting, we recommend that you also vote either by telephone, by internet, or by mail so that your vote will be counted if you later decide not to attend.

Outerwall is incorporated under Delaware law, which specifically permits electronically transmitted proxies, provided that each such proxy contains or is submitted with information from which the inspectors of election can determine that such proxy was authorized by the stockholder. The electronic voting procedures provided for the Annual Meeting are designed to authenticate each stockholder by use of a control number to allow stockholders to vote their shares and to confirm that their instructions have been properly recorded.

How many copies of the proxy materials should I have received?

In certain cases, only one Annual Report and one Proxy Statement are delivered to multiple stockholders sharing an address. Upon request, the Company will promptly deliver separate copies of the Annual Report and Proxy Statement to a stockholder at a shared address to which single copies of the documents were delivered.

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The stockholder should request the separate copies by contacting our Investor Relations Department via telephone at (425) 943-8242 or by writing to the following address: Corporate Secretary, Outerwall Inc., 1800 114th Avenue S.E., Bellevue, Washington 98004. Stockholders of record sharing an address who are receiving multiple copies of the Annual Report and Proxy Statement may request delivery of single copies by contacting the Company in the manner provided above.

If you received more than one proxy card or voting instruction form, please sign and return all proxy cards or voting instruction forms, or vote each proxy card or voting instruction form by telephone or by internet to ensure that all of your shares are voted.

What can I do if I change my mind after I vote?

If you are a stockholder of record, you can revoke your proxy before it is exercised by:

(1) delivering appropriate written notice to the Company;

(2) timely delivering a valid, subsequent proxy by internet, by telephone, or by mail; or

(3) voting by ballot at the Annual Meeting.

If you are a beneficial owner, you may be able to submit new voting instructions by contacting your broker, bank, or other holder of record. You may also vote in person at the Annual Meeting if you obtain a legal proxy, as previously described.

Attendance at the Annual Meeting will not cause your previously granted proxy to be revoked unless you specifically make that request. All shares that have been properly voted and not revoked will be voted at the Annual Meeting.

Is there a list of stockholders entitled to vote at the Annual Meeting?

A list of the names of our stockholders of record entitled to vote at the Annual Meeting will be available for ten days prior to the Annual Meeting for any purpose germane to the meeting, between the hours of 9:00 a.m. and 4:30 p.m. local time at our principal executive offices at 1800 114th Avenue S.E., Bellevue, Washington 98004. If you would like to view the stockholder list, please call our Investor Relations Department at (425) 943-8242. The list will also be available at the Annual Meeting.

What constitutes a quorum at the Annual Meeting?

The holders of a majority of the outstanding shares entitled to vote at the Annual Meeting, present in person or represented by proxy at the Annual Meeting, are necessary to constitute a quorum to transact business. Abstentions and “broker non-votes” (as described under the heading “What are ‘broker non-votes’ and how do they affect the proposals?”) are counted as present and entitled to vote for purposes of determining a quorum.

What are the voting requirements to elect directors and approve each of the other proposals described in this Proxy Statement?

Shares represented by a valid proxy will be voted at the Annual Meeting and, when instructions are given by the stockholder, will be voted in accordance with those instructions. If you are a stockholder of record and you return your proxy card but do not indicate your voting preferences, the persons named on the proxy card will vote the shares represented by that proxy as recommended by the Board of Directors. If you are a beneficial owner and you return your signed voting instruction form but do not indicate your voting preferences, please see “What are ‘broker non-votes’ and how do they affect the proposals?” regarding whether your broker, bank, or other holder of record may vote your uninstructed shares on a particular proposal.

Election of Directors.    Under Outerwall’s Amended and Restated Bylaws (our “Bylaws”), a majority voting standard applies to the election of directors in an uncontested election. This means that each of the directors will be elected by the affirmative vote of a majority of the votes cast with respect to such director. A “majority of the votes cast” means that the number of votes cast “for” the director exceeds the number of votes cast “against” the director,

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with stockholders given the ability to cast votes “for” or “against” a director or to “abstain” from such a vote. Abstentions and broker non-votes will have no effect on the election of directors since only votes cast “for” or “against” a director will be counted. Each incumbent director who has been nominated for election at the Annual Meeting has tendered an irrevocable resignation that will be effective upon (i) the failure to receive the required vote for election at the Annual Meeting and (ii) the acceptance of such resignation by a committee of our independent directors. In the event that one of the director nominees does not receive a majority of the votes cast at the Annual Meeting, a committee of our independent directors will determine whether to accept or reject the previously tendered resignation, or whether other action should be taken. The committee of independent directors is generally required to act in such instances within 90 days of the certification of the election results.

Advisory Vote to Approve Compensation of Named Executive Officers.    Under our Bylaws, the votes cast “for” must exceed the votes cast “against” the advisory resolution to approve the compensation of our Named Executive Officers. Abstentions and, if applicable, broker non-votes will be counted as present for purposes of determining the presence of a quorum but are not counted as votes “for” or “against” the proposal.

Ratification of KPMG LLP.    Under our Bylaws, the votes cast “for” must exceed the votes cast “against” the proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm. Abstentions and, if applicable, broker non-votes will be counted as present for purposes of determining the presence of a quorum but are not counted as votes “for” or “against” the proposal.

Other Proposals.    Generally, under our Bylaws, the votes cast “for” must exceed the votes cast “against” to approve proposals (unless otherwise required by Outerwall’s Restated Certificate of Incorporation, as amended (our “Restated Certificate”), the Bylaws, or by law). Abstentions and, if applicable, broker non-votes generally will be counted as present for purposes of determining the presence of a quorum but are not counted as votes “for” or “against” these proposals.

We are not aware, as of the date of this Proxy Statement, of any matters to be voted on at the Annual Meeting other than as stated in this Proxy Statement and the Notice. If any other matters are properly presented at the Annual Meeting, the persons named as proxies will have the authority to vote the shares in their best judgment.

What are “broker non-votes” and how do they affect the proposals?

A “broker non-vote” occurs when a broker, bank, or other holder of record holding shares for a beneficial owner does not vote on a particular proposal because that holder (i) has not received instructions from the beneficial owner and (ii) does not have discretionary voting power for that particular item.

If you are a beneficial owner and you do not give instructions to your broker, bank, or other holder of record, such holder of record will be entitled to vote the shares with respect to “discretionary” items but will not be permitted to vote the shares with respect to “non-discretionary” items (those shares are treated as “broker non-votes”). If you are a beneficial owner, your broker, bank, or other holder of record has “discretion” to vote your shares on the proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm if the holder of record does not receive voting instructions from you. However, such holder of record may not vote your shares on the election of directors, or the advisory resolution to approve the compensation of our Named Executive Officers, without your voting instructions on those proposals, because such proposals are considered “non-discretionary.” Accordingly, without your voting instructions on those proposals, a broker non-vote will occur.

What is the effect of the advisory resolution to approve the compensation of our Named Executive Officers?

In accordance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are providing our stockholders with a nonbinding, advisory vote to approve the compensation of our Named Executive Officers, commonly known as a “say-on-pay” proposal. In 2012, our stockholders voted that we conduct advisory votes to approve the compensation of our Named Executive Officers annually and, consistent

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with this result, we decided to conduct the advisory vote annually. Although this advisory vote is not binding upon the Board of Directors or the Company, the Board of Directors and the Compensation Committee of the Board of Directors (the “Compensation Committee”) will review and consider the voting results when making future decisions regarding our executive compensation program.

We expect to have our stockholders vote again, on a nonbinding, advisory basis, on whether we should have a say-on-pay proposal every one, two, or three years at the 2017 Annual Meeting of Stockholders.

What is the effect of the proposal to ratify the Audit Committee’s appointment of KPMG LLP as our independent registered public accounting firm?

Selection of our independent registered public accounting firm is not required to be submitted to a vote of stockholders. The Sarbanes-Oxley Act of 2002 requires the Audit Committee of our Board of Directors (the “Audit Committee”) to be directly responsible for the appointment, compensation, and oversight of the audit work of the independent registered public accounting firm. However, the Board of Directors has elected to submit the selection of KPMG LLP as our independent registered public accounting firm to stockholders for ratification as a matter of corporate practice. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether to retain KPMG LLP, and may retain that firm or another firm without resubmitting the matter to our stockholders. Even if the appointment is ratified, the Audit Committee may, at its discretion, appoint a different independent registered public accounting firm at any time during the year.

Who counts the votes?

Broadridge Financial Solutions, Inc. will count all votes, and Galen C. Smith, our Chief Financial Officer, and Donald R. Rench, our Chief Legal Officer, General Counsel, and Corporate Secretary, together or individually, will serve as the inspectors of election. The inspectors of election will separately count affirmative and negative votes, abstentions, and broker non-votes.

Who will pay for the cost of this proxy solicitation?

We will bear the cost of soliciting proxies. Proxies may be solicited on our behalf by the Company’s directors, officers, or employees in person or by telephone, electronic transmission, and facsimile transmission. No additional compensation will be paid to directors, officers, or other employees for soliciting proxies. We furnish copies of solicitation materials to banks, brokerage houses, fiduciaries, and custodians holding in their names shares of our common stock beneficially owned by others to forward to such beneficial owners. We may reimburse persons representing beneficial owners of our common stock for their costs of forwarding solicitation materials to such beneficial owners.

When will Outerwall announce the results of the voting?

We will announce preliminary voting results at the Annual Meeting. We will report the voting results in a Form 8-K within four business days after the end of the Annual Meeting. The report on Form 8-K, and any amendments, will be available at www.sec.gov and on our website at ir.outerwall.com.

What are the requirements for admission to the Annual Meeting?

You are entitled to attend the Annual Meeting if you were a Company stockholder as of the close of business on the Record Date or you hold a valid proxy for the Annual Meeting. In order to be admitted to the Annual Meeting, you must present photo identification. In addition, if you are a stockholder of record, your name will be verified against the list of stockholders of record as of the Record Date. If you are a beneficial owner, you should provide proof of beneficial ownership as of the Record Date, such as your account statement reflecting ownership as of the Record Date, a copy of the voting instruction card provided by your broker, trustee, or nominee, or other similar evidence of ownership. If you do not comply with these procedures, you may not be admitted to the Annual Meeting.

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PROPOSAL 1: ELECTION OF DIRECTORS

Our Restated Certificate and Bylaws currently divide the Board of Directors into three classes. Each class has a three-year term. In addition, generally, only persons elected by a majority of the directors then in office may fill vacancies on the Board.

Board Composition

As of April 17, 2014, the Board of Directors was composed of seven members, divided into three classes as follows:

Name	Age		Term Expiring in		Audit Committee	Compensation Committee	Nominating and Governance Committee
Deborah L. Bevier		62		2014		*	**
Nelson C. Chan		52		2015	*		*
Nora M. Denzel		51		2016	*	*
J. Scott Di Valerio		51		2015
David M. Eskenazy		51		2014	*
Robert D. Sznewajs		67		2014	**	*
Ronald B. Woodard		71		2016		**	*

* Member

** Chairperson

If elected at the Annual Meeting, Messrs. Eskenazy and Sznewajs will serve until the 2017 Annual Meeting of Stockholders or until their respective successor is duly elected and qualified, or until their earlier death, resignation, or retirement. Ms. Denzel and Messrs. Chan, Di Valerio, and Woodward will continue in office until their respective successor is duly elected and qualified, or until their earlier death, resignation, or retirement. Ms. Bevier previously notified the Board of Directors that she will not stand for reelection at the Annual Meeting. In connection with the expiration of Ms. Bevier’s three-year term at the Annual Meeting, only two nominees will be voted on at the Annual Meeting, and the Board plans to decrease the size of the Board from seven members to six at the Board meeting immediately following the Annual Meeting.

Except as otherwise specified in a proxy, proxies will be voted for the Board nominees. Messrs. Eskenazy and Sznewajs have consented to being named as Board nominees in this Proxy Statement and have each agreed to serve if elected. Management has no reason to believe that they will be unable to serve. If any of the Board nominees becomes unavailable to serve as a director, proxies will be voted for the election of such person as shall be designated by the Board of Directors, unless the Board chooses to reduce the number of directors serving on the Board.

The Board of Directors Recommends a Vote “FOR” Each of the Board’s Nominees.

Nominees for Election to a Three-Year Term Expiring at the 2017 Annual Meeting of Stockholders

David M. Eskenazy

David M. Eskenazy has been a director of Outerwall since August 2000. Mr. Eskenazy has served as chief financial officer for Aegis Senior Communities (a senior living management company specializing in assisted living and memory care) since August 2009. He served as a principal in Esky Advisors LLC (a business advisory services firm) from October 2008 to March 2010. He served as the chief operating officer of Investco Financial Corporation (a real estate development and management company in the Puget Sound region) from April 2008 to September 2008 and as chief investment officer from January 2007 to March 2008. From October 1987 to November 2006, he held a number of financial positions, ultimately serving as executive vice president and chief

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operating officer at R.C. Hedreen Co. (a hotel development and investment firm). Prior to that, he served on the audit staff of Peat Marwick Mitchell & Co. (an accounting firm). Mr. Eskenazy is a certified public accountant (inactive).

Having served as an independent director of Outerwall since 2000 and chairperson of the Audit Committee from 2001 to 2013, Mr. Eskenazy possesses a wealth of historical Outerwall institutional knowledge. In addition, with his over 25 years of finance, investment, and accounting experience, he brings deep investment management experience and an understanding of complex accounting to our Board of Directors.

Robert D. Sznewajs

Robert D. Sznewajs has been a director of Outerwall since August 2002. From January 2000 to April 2013, Mr. Sznewajs served as president, chief executive officer, and a member of the board of directors of West Coast Bancorp (a bank holding company). He was also a member of the board of directors of the Portland Branch of the Federal Reserve Bank of San Francisco from January 2004 to December 2009. In December 2013, Mr. Sznewajs was appointed as a member of the board of directors of Banc of California, N.A. (a national bank). Mr. Sznewajs is a certified public accountant (inactive).

Mr. Sznewajs brings valuable leadership experience to the Board of Directors, having served in multiple board and executive leadership positions at public and private companies. Mr. Sznewajs also brings to our Board a valuable understanding of accounting functions, financial operations, and retail consumers, as well as a general appreciation for the current economic, business, and governance issues facing public companies from the perspective of a board member and chief executive officer.

Directors Continuing in Office Until the 2015 Annual Meeting of Stockholders

Nelson C. Chan

Nelson C. Chan has been a director of Outerwall since July 2011, and has served as the Board of Directors’ non-employee Chair since June 2013. Mr. Chan served as chief executive officer of Magellan Corporation (a portable GPS navigation consumer electronics company) from December 2006 to August 2008. From 1992 to 2006, he held various management positions at SanDisk Corporation (a manufacturer and supplier of flash brand data storage products), including executive vice president and general manager, consumer business. Mr. Chan is currently a director of Affymetrix Inc. (a genetic analysis company) and Synaptics, Inc. (a developer of consumer interface solutions). Mr. Chan was a member of the board of directors of Silicon Laboratories (an analog-intensive mixed-signal semiconductor company), from 2007 to 2010. Mr. Chan also serves on the board of directors of several private companies.

Mr. Chan brings a wealth of experience to our Board of Directors, including his expertise in building technology companies. Having held numerous senior management positions with other leading companies, including chief executive officer at Magellan Corporation, Mr. Chan has strong operational, financial, and analytical skills. In addition, as a result of his service as a director of several other public companies, Mr. Chan brings valuable corporate governance and strategic insights to our Board.

J. Scott Di Valerio

J. Scott Di Valerio has served as our Chief Executive Officer and as one of our directors since April 2013. He served as our Chief Financial Officer from March 2010 until March 2013, after having joined the Company in January 2010 to work on transition matters prior to his appointment as Chief Financial Officer. Mr. Di Valerio served as president of the Americas for Lenovo Group Limited (a personal computer and technology products and services company) from December 2007 to January 2009. Previously, he served as corporate vice president, OEM division for Microsoft Corporation (a software and technology company) from 2005 to 2007, and as its corporate vice president, finance and administration and chief accounting officer from 2003 to 2005. In addition, Mr. Di Valerio served as corporate vice president, corporate controllership, for The Walt Disney Company (an

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entertainment company) from 2001 to 2003 and as chief financial officer for Mindwave Software Inc. (a software and technology company) during 2000. He also served in various roles, including as partner, at PricewaterhouseCoopers LLP (and its predecessors) from 1985 to 2000. Mr. Di Valerio is a certified public accountant (inactive).

Through his experience as Outerwall’s previous Chief Financial Officer and current Chief Executive Officer, Mr. Di Valerio brings intimate knowledge of Outerwall’s financial and day-to-day operations to our Board of Directors. In addition, through his prior financial and management experience, Mr. Di Valerio has a broad understanding of the financial, operational, and strategic issues facing companies such as Outerwall.

Directors Continuing in Office Until the 2016 Annual Meeting of Stockholders

Nora M. Denzel

Nora M. Denzel has been a director of Outerwall since January 2013. From February 2008 through August 2012, Ms. Denzel held various management positions at Intuit Inc. (a provider of business and financial management solutions software), including senior vice president of marketing, big data and social, and senior vice president and general manager of the employee management solutions business unit. From August 2000 to February 2006, Ms. Denzel served as senior vice president of the software global business unit and the storage and consulting divisions at Hewlett-Packard Company (a software and technology hardware provider). From February 1997 to August 2000, Ms. Denzel served as senior vice president, product operations, at Legato Systems Inc. (a data storage management software company). Ms. Denzel served as director, global storage software, at International Business Machines Corporation (a technology services, enterprise software and systems provider) from June 1984 to February 1997. Ms. Denzel served as a director of Overland Storage, Inc. (a provider of data management and protection products and services) from 2007 to 2013. Ms. Denzel is a member of the board of directors of Telefonaktiebolaget L.M. Ericsson (a telecommunications equipment and services provider), Saba Software, Inc. (a provider of learning and talent management solutions software and services), and Advanced Micro Devices, Inc. (a semiconductor company).

Ms. Denzel brings to our Board of Directors a unique skill set and insight from her background in enterprise software, engineering, social product design, and marketing. Her experience as a senior business and technology executive at global organizations, such as Intuit, Hewlett-Packard, and IBM provide her with special knowledge in customer experience and competitive considerations.

Ronald B. Woodard

Ronald B. Woodard has been a director of Outerwall since August 2001. Mr. Woodard is a director of MagnaDrive Corporation (an industrial magnetic coupling manufacturer) and was its chairperson from June 2006 to August 2010. Mr. Woodard cofounded MagnaDrive in April 1999 after a 32-year career with The Boeing Company (an aerospace firm), where he held numerous positions, including president of The Boeing Commercial Airplane Group. Mr. Woodard is currently a director of AAR Corp. (a provider of aftermarket support to the aviation and aerospace industry), Knowledge Anywhere (an online provider of employee training), and the Shaw Island School Board, and, in June 2010, he became a lifetime member of the board of directors of the Seattle Symphony. Mr. Woodard was also a director of Continental Airlines, Inc. (a commercial airline company), from May 2003 to December 2010, and served as chair of the board of directors of the Seattle Symphony for 11 years (with his most recent three-year term as chair ending in June 2007).

With Mr. Woodard’s years of experience at The Boeing Company and his years of board service, including his current board positions, he brings valuable commercial insight and experience to our Board of Directors. His role at The Boeing Company and his continued engagement in the aerospace industry provide him with valuable experience in complex public company dynamics, including international operations. In addition, having served as an independent director of Outerwall during a time of significant growth, Mr. Woodard has a valuable historical perspective regarding Outerwall’s business.

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CORPORATE GOVERNANCE

Board of Directors

During 2013, the Board of Directors met 8 times. The standing committees of the Board held a total of 29 meetings. No incumbent member attended fewer than 90% of the meetings of the Board and standing Board committees on which he or she served during his or her term of service. It is Outerwall’s policy to request and encourage all of its directors and director nominees to attend in person annual meetings of stockholders, absent unavoidable conflicts or extenuating circumstances that prohibit attendance. Last year, all directors attended the 2013 Annual Meeting of Stockholders.

The Nasdaq Listing Rules require that a majority of our Board of Directors be “independent directors,” as defined in Nasdaq Listing Rule 5605(a)(2). The Board, following the review and recommendation of the Nominating and Governance Committee of the Board (the “Nominating Committee”), reviewed the independence of the persons who served as our directors during 2013, 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 Outerwall and our subsidiaries, certain other affiliates, or our independent registered public accounting firm. As a result of the review, the Board determined that all of the directors (including Mr. Ahitov during his term of service on the Board), except for Mr. Di Valerio, who is an employee, and Mr. Davis, who was an employee, were “independent” under the applicable Nasdaq Listing Rules described above.

Our independent directors have the opportunity to meet in executive session to consider such matters as they deem appropriate, without management being present, as a regularly scheduled agenda item for Board and committee meetings, as appropriate. The Chair of the Board of Directors (for Board executive sessions) and the chairperson of each committee (for committee executive sessions) act as the chair of the applicable executive sessions of the independent directors.

Board Leadership Structure and Role in Risk Oversight

The Company’s Corporate Governance Principles provide that it is our policy that the positions of Chief Executive Officer and Chair of the Board of Directors not be held by the same person. The Board believes that separating these two positions is in the best interests of the Company. This structure ensures a greater role for the independent directors in the oversight of the Company and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of the Board. The Board believes this leadership structure is preferred by a significant number of the Company’s stockholders. The Board also believes its administration of its risk oversight function has not affected the Board’s leadership structure.

The Board of Directors considers oversight of Outerwall’s risk management efforts to be a responsibility of the entire Board (as reported by and through the appropriate committee in the case of risks that are under the purview of a particular committee). Management provides the full Board regular updates on major Company initiatives, strategies, and related risks. The Compensation Committee provides oversight of the Company’s pay policies and practices, including risks associated with executive compensation. The Nominating Committee oversees risks associated with corporate governance and Board composition, including the independence of Board members. The Audit Committee receives the results of an annual risk assessment designed to identify and assess key risks associated with the achievement of the Company’s strategic objectives. In addition, Outerwall’s management has implemented an enterprise risk management (“ERM”) program designed to provide a consistent framework by which key risks across the enterprise can be identified, assessed, evaluated, and treated. The structure of the ERM program includes (i) interviews of management to identify risks associated with the achievement of strategic business objectives, (ii) assessment of risks relative to the likelihood of occurrence, severity, and velocity of impact, (iii) stratification of risks into prioritized tiers, (iv) assignment of priority risks to key leaders and executive sponsors, (v) development and implementation of risk treatment plans, and (vi) quarterly reports provided to the Audit Committee with respect to risk status, including emerging risks, and

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treatment plan progress. Further, the internal audit department utilizes the ERM program to identify areas of focus for the conduct of risk-based internal audits. The Audit Committee receives quarterly reports regarding these risk-based internal audits, which include management action plans designed to mitigate deficiencies and related risks. The Audit Committee also provides oversight concerning key financial risks and, pursuant to its charter, discusses Company policies with respect to risk assessment and risk management.

The chairperson of the relevant Board committee reports on its discussions to the full Board of Directors during the committee reports portion of the next Board meeting. The full Board also has access to all committee materials. This enables the Board and its committees to coordinate the risk oversight role regarding, for example, compensation and governance-related risks.

Board Committees

The Board of Directors has established the following standing committees: Audit, Compensation, and Nominating and Governance. The Board may, by resolution passed by a majority of the Board, from time to time, appoint other committees to address special projects or matters of interest to the Board.

All of the members of each of the standing committees meet the criteria for independence prescribed by Nasdaq. Membership of the standing committees is determined periodically by the Board of Directors. Adjustments to committee assignments may be made at any time. As of April 17, 2014, membership of each standing committee was as set forth above under “Board Composition.”

The Board of Directors has adopted a written charter for each standing committee. Stockholders may access a copy of each standing committee’s charter on our website at ir.outerwall.com. A summary of the duties and responsibilities of each committee is set forth below.

Audit Committee 14 meetings

The purpose of the Audit Committee is to assist the Board of Directors in oversight of (i) the integrity of Outerwall’s financial statements, (ii) Outerwall’s compliance with legal and regulatory requirements, (iii) the independent registered public accounting firm’s qualifications and independence, (iv) the performance of Outerwall’s independent registered public accounting firm and the internal auditors, and (v) compliance with Outerwall’s code of ethics for senior financial officers and with Outerwall’s code of conduct for all Outerwall personnel. The Audit Committee retains the authority and responsibility to select, evaluate, and, where appropriate, replace the independent registered public accounting firm. The Audit Committee may retain independent counsel and accountants and other professionals to assist it without seeking Board approval with respect to the selection, fees, or terms of engagement of any such advisors.

The Audit Committee meets with our independent registered public accounting firm at least quarterly, prior to releasing our quarterly results, to review the results of the registered public accounting firm’s interim reviews or annual audit before the results are released to the public or filed with the Securities and Exchange Commission (the “SEC”) or other regulators. The Audit Committee also reviews and comments on the quality of our accounting principles and financial reporting and controls, the adequacy of staff, and the results of procedures performed in connection with the audit process.

The charter of the Audit Committee requires that it be composed of at least three directors, all of whom meet the independence requirements established by the Board of Directors, Nasdaq, and applicable laws and regulations. Each Audit Committee member must meet the financial literacy, experience, and expertise requirements of the SEC, Nasdaq, and applicable laws and regulations. At least one Audit Committee member must be an “audit committee financial expert” and have accounting or related financial management expertise as required by the Board, the SEC, and Nasdaq. No member of the Audit Committee may serve on more than three audit committees of publicly traded companies (including our Audit Committee), unless the Board determines that such simultaneous service would not impair the ability of such member to serve on the Audit Committee.

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The Board of Directors has determined that each member of the Audit Committee meets the independence and financial literacy requirements of the SEC and Nasdaq. The Board has also determined that Messrs. Eskenazy and Sznewajs are “audit committee financial experts” under SEC rules, have accounting or related financial management experience, and are financially sophisticated under the Nasdaq Listing Rules.

Compensation Committee 9 meetings

The purpose of the Compensation Committee is to ensure that Outerwall’s compensation practices further the shared interests of stockholders and management to attract, hire, retain, and motivate the people needed to achieve Outerwall’s performance goals. In particular, the Compensation Committee (i) defines and oversees the executive compensation programs (including compensation of the Chief Executive Officer), (ii) reviews, approves, and administers equity-based compensation and other employee benefit plans, (iii) periodically reviews compensation and benefits programs, and (iv) defines and oversees the director compensation program.

The Compensation Committee’s charter reflects the responsibilities noted above and is reviewed regularly by the Compensation Committee. The charter also requires that the Compensation Committee be composed of at least three directors, all of whom are non-employee outside directors who meet the independence requirements established by the Board of Directors, Nasdaq, and applicable laws and regulations. The Board has determined that each member of the Compensation Committee meets such requirements. The Compensation Committee meets throughout the year at scheduled and special times and takes actions by written consent when necessary.

Pursuant to the Compensation Committee’s charter, the Compensation Committee may engage professional consultants to assist it in meeting its responsibilities. The Compensation Committee may work with Outerwall’s human resources professionals and with outside consultants to conduct market surveys to assess and compare executive compensation levels and pay practices in similarly situated companies. The Compensation Committee has sole authority to retain outside counsel, compensation consultants, or other experts or consultants, including sole authority to terminate and approve the fees and other retention terms for such persons. To the extent permitted by applicable law, regulations, and Nasdaq, the Compensation Committee may form and delegate authority to subcommittees and may delegate authority to one or more designated members of the Compensation Committee or of the Board of Directors, or to Outerwall’s officers, to perform certain duties on its behalf.

The Compensation Committee reports frequently to the Board of Directors and maintains open communication with Outerwall’s Chief Executive Officer, independent consultants, and internal human resources professionals. The Compensation Committee establishes an annual meeting schedule. Other meetings may be called by the Compensation Committee’s chairperson or at the direction of the Board. The Compensation Committee’s chairperson and Outerwall’s Chief Executive Officer and/or Chief Human Resources Officer jointly prepare an agenda for each Compensation Committee meeting.

Compensation Consultant

Pursuant to the Compensation Committee’s charter, as outlined above, the Compensation Committee may engage outside consultants to assist it in meeting its responsibilities. For 2013 executive compensation, the Compensation Committee retained Towers Watson as a compensation consultant to conduct a total direct compensation analysis for executive officers and other executives and to make recommendations for changes based on our pay philosophy, business objectives, and stockholder expectations. Towers Watson conducted a competitive market analysis that included published national survey sources of similarly sized companies augmented by proxy data of companies with revenues of similar size to the Company that are either in similar lines of business or the same region. In 2013, a Towers Watson consultant attended five Compensation Committee meetings and held several telephone conference calls with the Compensation Committee’s chairperson and management during the executive compensation evaluation process. Towers Watson did not provide any other services to Outerwall and only received fees from Outerwall on behalf of the Compensation Committee. Towers Watson did not determine any aspect of Outerwall’s executive compensation. The Compensation Committee reviewed the independence of Towers Watson based on the criteria established by the

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SEC and determined that there were no conflicts of interest. Please refer to “Compensation Discussion and Analysis” for a discussion of the Compensation Committee’s determinations regarding executive compensation for 2013.

Role of Executives in Establishing Executive Compensation

With support from Outerwall’s human resources department, our prior and current Chief Executive Officers prepared and provided recommendations to the Compensation Committee on the following items: base salaries for current executives (excluding themselves), the design of the 2013 short-term and long-term incentive plans for executives, and the grant value of equity awards provided to executives (excluding themselves). At the request of the Compensation Committee, the Chief Executive Officer assisted in the review of compensation studies and proposed incentive plans, including, at the delegation of the Compensation Committee, proposing specific performance goals to be reviewed by the Compensation Committee with respect to short-term and long-term executive compensation. Also at the request of the Compensation Committee, the Chief Executive Officer, the Chief Legal Officer and General Counsel, and members of the human resources department attended the Compensation Committee meetings that related to executive compensation; however, the executives did not attend the executive sessions of the meetings. In connection with reviewing and determining executive compensation, the Compensation Committee asked the Chief Executive Officer to provide recommendations for compensation levels for the other executives. The Compensation Committee uses this information along with, among other things, survey data and market studies to determine executive compensation.

Nominating and Governance Committee 6 meetings

The purpose of the Nominating Committee is to (i) identify individuals qualified to become directors, (ii) approve and recommend to the Board director candidates, (iii) oversee evaluations of the Board and its committees, (iv) monitor the independence of non-employee directors, (v) develop, annually update, and recommend to the Board corporate governance principles and policies applicable to Outerwall, (vi) monitor compliance with such principles and policies, and (vii) develop and maintain succession plans for senior management.

The charter of the Nominating Committee requires that the Nominating Committee be composed of at least three directors, each of whom meets the independence standards required by the Board of Directors, Nasdaq, and applicable laws and regulations. The Board has determined that each member of the Nominating Committee meets such requirements.

As noted above, the Nominating Committee is responsible for making recommendations to the Board of Directors concerning nominees for election as directors and nominees for Board vacancies. To fulfill this role, the Nominating Committee has sole authority to retain and terminate any search firm that is used to identify director candidates and retains the sole authority to approve fees and other retention terms relating to search firms. The Nominating Committee may also retain independent counsel and other professionals to assist it without seeking Board approval with respect to the selection, fees, or terms of engagement of any such advisors.

The Nominating Committee reviews annually the appropriate skills and characteristics required of directors in light of the current makeup of the Board of Directors. When assessing a director candidate’s qualifications, the Nominating Committee will consider, among other factors, issues of expertise (including retail, public company, and policy-making experience), independence, personal and professional ethics, integrity, values, and diversity, as well as skills relating to finance, public policy, management, and business. The Nominating Committee does not have a formal policy with respect to diversity, which includes age, geography, professional, or other; however, the Nominating Committee and the Board believe it essential to have directors representing diverse viewpoints. Accordingly, diversity, considered broadly, is one factor considered by the Nominating Committee in evaluating overall Board composition and evaluating appropriate director candidates. The director selection guidelines are further described in Exhibit A to the Nominating Committee’s charter.

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Pursuant to its charter, the Nominating Committee will also consider qualified director candidates recommended by Outerwall’s stockholders. The Nominating Committee evaluates the qualifications of candidates properly submitted by stockholders in the same manner as it evaluates the qualifications of director candidates identified by the Nominating Committee or the Board of Directors. Stockholders can recommend director candidates by following the instructions outlined below under “Additional Information—Consideration of Stockholder-Recommended Director Nominees.” No nominations for director were submitted to the Nominating Committee for consideration by any of Outerwall’s stockholders in connection with the Annual Meeting.

DIRECTOR COMPENSATION

The following table shows compensation earned by or paid to non-employee directors who served as directors for 2013. Messrs. Davis and Di Valerio, when serving as Chief Executive Officer, did not receive additional compensation for services on the Board of Directors in 2013. The compensation of Messrs. Davis and Di Valerio are described in the “2013 Summary Compensation Table.”

2013 Director Compensation Table

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($) (1)		Option Awards ($)  (2)		Total ($)
Arik A. Ahitov		53,250		0		0		53,250
Deborah L. Bevier		97,875		74,972		34,992		207,839
Nelson C. Chan		75,000		104,985		49,996		229,981
Nora M. Denzel		47,500		99,700		46,530		193,730
David M. Eskenazy		80,000		74,972		34,992		189,964
Robert D. Sznewajs		87,125		74,972		34,992		197,089
Ronald B. Woodard		78,750		74,972		34,992		188,714

(1) As of December 31, 2013, non-employee members of the Board of Directors had the following aggregate number of restricted stock awards outstanding: Mr. Ahitov, 0; Ms. Bevier, 1,269; Mr. Chan, 1,777; Ms. Denzel, 1,269; Mr. Eskenazy, 1,269; Mr. Sznewajs, 1,269; and Mr. Woodard, 1,269. The dollar amounts in this column reflect the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic 718”) for awards granted during the fiscal year ended December 31, 2013. Assumptions used in the calculation of these amounts are described in footnotes 2 and 10 to the Company’s audited financial statements included in the Annual Report. On June 27, 2013, each non-employee director other than Mr. Ahitov received an annual award of 1,269 shares of restricted stock with a grant date fair value of $75,000 and Mr. Chan, as Chair of the Board, received an additional award of 508 shares of restricted stock with a grant date fair value of $30,000, each such restricted stock award vests one year from the date of grant and, if unvested, is forfeited upon a director’s termination of service. On January 31, 2013, in connection with her initial appointment to the Board, Ms. Denzel received a prorated award of 486 shares of restricted stock with a grant date fair value of $24,728, which vested on June 7, 2013. Mr. Ahitov did not receive an annual restricted stock award in 2013 because he was not serving on the Board immediately following our 2013 annual meeting of stockholders held on June 27, 2013.

(2) As of December 31, 2013, non-employee members of the Board of Directors had the following aggregate number of stock options outstanding: Mr. Ahitov, 0; Ms. Bevier, 6,913; Mr. Chan, 4,324; Ms. Denzel, 1,754; Mr. Eskenazy, 8,623; Mr. Sznewajs, 5,222; and Mr. Woodard, 8,623. The dollar amounts in this column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for awards granted during the fiscal year ended December 31, 2013. Assumptions used in the calculation of these amounts are described in footnotes 2 and 10 to the Company’s audited financial statements included in the Annual Report. On June 27, 2013, each non-employee director other than Mr. Ahitov received an annual stock option grant to purchase 1,278 shares of common stock with a grant date fair value of $35,000 and

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Mr. Chan, as Chair of the Board, received an additional stock option grant to purchase 548 shares of common stock with a grant date fair value of $15,000, each such stock option vests in equal monthly installments over one year from the date of grant and has a term of ten years. On January 31, 2013, in connection with her initial appointment to the Board, Ms. Denzel received a prorated stock option grant to purchase 476 shares of common stock with a grant date fair value of $11,538, which vested on June 7, 2013 and has a term of ten years. Mr. Ahitov did not receive an annual stock option grant in 2013 because he was not serving on the Board immediately following our 2013 annual meeting of stockholders held on June 27, 2013.

Time, Manner and Components of Compensation

In 2013, cash compensation for attending committee meetings and more than 10 meetings of the Board of Directors was paid at the end of each fiscal quarter. Annual cash retainers for service as a director or committee chairperson were paid in quarterly installments at the same time as committee meeting fees were paid. Directors were also reimbursed for reasonable Outerwall-related travel expenses.

Pursuant to a non-employee director program, effective as of June 1, 2011 and administered under the 2011 Incentive Plan, stock options and restricted stock awards were automatically awarded upon initial election or appointment to the Board of Directors and following each annual meeting of stockholders. The terms of these awards are described in footnotes 1 and 2 to the table above. Stock options were granted with exercise prices equal to the per share fair market value of Outerwall common stock on the date of grant.

For 2013, the components of Outerwall’s standard non-employee director cash and equity compensation were:

Compensation Paid to Non-Employee Directors
Annual retainer	$	50,000
Annual restricted stock award	$	75,000	(1)
Annual stock option grant	$	35,000	(1)
Stock option grant upon initial election or appointment		Prorated	(2)
Restricted stock grant upon initial election or appointment		Prorated	(2)
Attendance at Board meetings in excess of 10 meetings in a given year	$	1,500	(3)
Compensation for Attendance at Committee Meetings
Audit Committee	$	1,250
Compensation Committee	$	1,250
Nominating and Governance Committee	$	1,250
Additional Compensation for Board Chair and Committee Chairpersons
Non-Employee Board Chair
Annual retainer	$	35,000
Annual restricted stock award	$	30,000	(1)
Annual stock option grant	$	15,000	(1)
Audit Committee Chairperson (if not Board Chair)	$	15,000
Compensation Committee Chairperson (if not Board Chair)	$	10,000
Nominating and Governance Committee Chairperson (if not Board Chair)	$	7,500

(1) Awards were granted based on grant date fair value.

(2) Upon an initial election or appointment to the Board of Directors on a date other than the date of an annual meeting of stockholders, each non-employee director was automatically granted a prorated annual option grant and restricted stock award, based on the number of full calendar months between the date of initial election or appointment and the date of the first anniversary of the then last annual meeting of stockholders.

(3) Each one-year period was measured from the date of one annual meeting of stockholders to the next annual meeting of stockholders.

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Non-Employee Director Stock Ownership Guidelines

The Board of Directors believes that significant stock ownership by its non-employee directors further aligns their interests with the interests of the Company’s stockholders. Effective December 1, 2010, the Board approved revised stock ownership guidelines that provide that each non-employee director should personally own shares of Outerwall’s common stock equal in market value to at least five times his or her annual base retainer. Shares of stock that count towards satisfaction of these guidelines include (a) fully vested shares owned directly by the director or indirectly through immediate family members and (b) unvested restricted shares. The shares owned are valued at the greater of (a) the price at the time of purchase/acquisition or (b) the current market value. Ownership is measured as of December 1 of each year. Non-employee directors as of the date the guidelines were adopted are expected to meet the guidelines by December 1, 2015. Non-employee directors joining the Board after the guidelines were adopted will have until December 1 of the fifth fiscal year after being appointed as a director to come into compliance. Non-employee directors must show progress of at least 20% per year toward the five-year stock ownership target until such target is met. All non-employee directors were in compliance with the non-employee director stock ownership guidelines as of the last measurement date.

For additional information regarding the stock holdings of our non-employee directors, see “Security Ownership of Certain Beneficial Owners, Directors, and Management.” Mr. Davis was and Mr. Di Valerio is subject to the officer stock ownership guidelines described in “Compensation Discussion and Analysis.”

PROPOSAL 2: ADVISORY VOTE TO APPROVE COMPENSATION OF NAMED EXECUTIVE OFFICERS

In accordance with Section 14A of the Exchange Act, we are providing our stockholders with an opportunity to approve, on a nonbinding, advisory basis, the compensation of our Named Executive Officers. This advisory proposal is commonly referred to as a “say-on-pay” proposal. Our stockholders have voted that we conduct advisory votes on the compensation of our Named Executive Officers annually and, consistent with this result, we decided to conduct the advisory vote annually, with the next vote occurring at the 2015 Annual Meeting of Stockholders. Although this advisory vote is not binding upon the Board of Directors, our Board and Compensation Committee will review and consider the voting results of this vote when making future decisions regarding our Named Executive Officer compensation and related executive compensation program.

As described in more detail in “Compensation Discussion and Analysis,” our executive compensation program is designed to attract, motivate, and retain executive officers critical to our long-term success and the creation of stockholder value. Our pay-for-performance model links competitive levels of compensation to Company performance as compared to performance goals, to ensure accountability and to motivate executives to achieve a higher level of performance. Our Named Executive Officers who have a greater ability to influence the Company’s performance have a higher level of at-risk compensation in the form of short-term incentives (annual cash bonus plan) and long-term incentives (stock options, time-based restricted stock, and performance-based restricted stock).

As noted in “Compensation Discussion and Analysis,” our Compensation Committee has taken several actions and also continued several long-standing practices that it believes reflect its pay-for-performance philosophy and help contribute to good corporate governance, including:

• increasing the performance period for performance-based restricted stock awards from one year to two years beginning with the 2013 grants;

• prohibiting our executive officers, directors and certain other covered individuals from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan;

• adopting a recoupment policy (also known as a “clawback policy”) covering incentive compensation paid to executives (please refer to the related discussion under “Policy on Reimbursement of Incentive Payments” in “Compensation Discussion and Analysis”);

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• formalizing an annual process to assess risks associated with our compensation policies and programs;

• establishing stock ownership guidelines for our executives (please refer to the related discussion under “Officer Stock Ownership Guidelines” in “Compensation Discussion and Analysis”);

• retaining discretion to adjust amounts payable under various compensation components;

• approving change of control benefits for executives that place stronger emphasis on “double-trigger” benefits and do not include any tax gross-ups (please refer to the related discussions under “Severance and Change of Control” in “Compensation Discussion and Analysis” and under “Elements of Post-Termination Compensation and Benefits” in “Named Executive Officer Compensation”);

• establishing caps of 200% of target and 150% of target under the short-term incentive program and the long-term performance-based restricted stock program, respectively;

• providing limited perquisites (please refer to the related discussion under “Other Benefits and Perquisites” in “Compensation Discussion and Analysis”); and

• hiring compensation consultants directly to assist the Compensation Committee in its compensation decisions.

We urge our stockholders to read the section titled “Compensation Discussion and Analysis” in this Proxy Statement, which describes in more detail how our executive compensation program operates and is designed to achieve our compensation objectives, as well as the “2013 Summary Compensation Table” and other related compensation tables and narrative included under the heading “Named Executive Officer Compensation” in this Proxy Statement, which provide detailed information on the compensation of our Named Executive Officers. The Board of Directors and Compensation Committee believe that the policies and procedures articulated in that discussion are effective in achieving our goals and that the compensation of our Named Executive Officers reported in this Proxy Statement has contributed to the Company’s success.

We are therefore requesting that stockholders approve the following nonbinding, advisory resolution at the Annual Meeting:

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in the Compensation Discussion and Analysis, the accompanying tables, and related narrative in the Proxy Statement for the Company’s 2014 Annual Meeting of Stockholders.”

The Board of Directors Recommends a Vote “FOR”

the Advisory Resolution to Approve the Compensation of Our Named Executive Officers.

EQUITY COMPENSATION PLAN INFORMATION

The following table shows the shares of Outerwall common stock authorized for issuance under our equity compensation plans as of December 31, 2013.

Our stockholder-approved equity compensation plans consist of our 1997 Amended and Restated Equity Incentive Plan (the “1997 Plan”), our 1997 Non-Employee Directors’ Stock Option Plan (the “1997 Director Plan”), and our 2011 Incentive Plan (the “2011 Plan”). The 1997 Plan was terminated by the Board of Directors, and no additional awards will be granted under that plan, effective June 1, 2011 (the date that the 2011 Plan was approved by our stockholders). We have not granted any awards since June 2004, and no additional awards will be granted, under the 1997 Director Plan, which was terminated by the Board of Directors in 2005.

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Our only non-stockholder-approved equity compensation plan is our 2000 Amended and Restated Equity Incentive Plan (the “2000 Plan”), which terminated by its terms on December 14, 2010.

Plan Category	Number of Securities to Be Issued Upon Exercise of Outstanding  Options, Warrants and Rights (1)		Weighted-Average Exercise Price  of Outstanding Options, Warrants and Rights		Number of  Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column)
Equity compensation plans approved by stockholders		844,282	$	39.097		1,283,985	(2)(3)
Equity compensation plans not approved by stockholders		1,125		20.893		0
Total		845,407	$	38.878		1,283,985

(1) Excludes additional shares that may be issued if target performance is exceeded under outstanding unearned performance-based restricted stock awards.

(2) Includes shares that may be granted to our non-employee directors pursuant to a program administered under the 2011 Plan and described under the section entitled “Director Compensation.”

(3) Under the 2011 Plan, in addition to stock options, Outerwall may grant awards of common stock, stock appreciation rights, restricted stock, stock units, performance shares, performance units, or other incentives payable in cash or shares.

Description of Non-Stockholder-Approved Equity Arrangements

Below is a description of our equity compensation plan that was not approved by stockholders. Approval by stockholders was not required under the SEC and Nasdaq Listing Rules in effect at the time this plan was adopted.

2000 Amended and Restated Equity Incentive Plan

In December 2000, the Board of Directors adopted the 2000 Plan. The 2000 Plan terminated by its terms on December 14, 2010; consequently, there are no longer shares available for grant under the 2000 Plan. No grants have been awarded under the 2000 Plan since 2006. Options granted under the 2000 Plan are non-statutory stock options. The exercise price for shares purchased under a 2000 Plan option must be paid in a form acceptable to the plan administrator, which form may include cash or check, or at the discretion of the plan administrator, by delivery of already-owned Outerwall common stock, a broker-assisted cashless exercise, or such other consideration as the plan administrator may permit, including a promissory note that is structured as necessary to avoid charges to earnings. Outstanding options under the 2000 Plan were fully vested as of December 31, 2013 and have a term of ten years from the date of grant. In the event of termination of the optionee’s employment or service relationship with Outerwall by reason of death or disability, the options generally will be exercisable for one year after the date of termination unless the option term expires as of an earlier date. In the event of termination for a reason other than death or disability, the options will be exercisable for a period of three months from the date of termination. Options under the 2000 Plan may be transferred to the extent provided in the option agreement, provided that if the option agreement does not expressly permit the transfer, the option will not be transferable except by will, by the laws of descent and distribution, or pursuant to a domestic relations order and will be exercisable during the lifetime of the person to whom the option is granted only by such person or any transferee pursuant to a domestic relations order.

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PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF KPMG LLP

AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has selected KPMG LLP as Outerwall’s independent registered public accounting firm for the fiscal year ending December 31, 2014. Representatives of KPMG LLP are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they so desire, and will be available to respond to appropriate questions.

Stockholder ratification of the appointment of KPMG LLP as Outerwall’s independent registered public accounting firm is not required by our Bylaws or otherwise. However, the Board of Directors is submitting the appointment of KPMG LLP to the stockholders for ratification as a matter of corporate practice. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether to retain KPMG LLP. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of Outerwall and its stockholders.

The Board of Directors Recommends a Vote “FOR” the Ratification of the

Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm.

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee serves as the representative of the Board of Directors for general oversight of Outerwall’s financial accounting and reporting, systems of internal control, audit process, and monitoring compliance with laws and regulations and standards of business conduct. Management has responsibility for preparing Outerwall’s financial statements as well as for Outerwall’s financial reporting process, including internal controls thereon. KPMG LLP, acting as an independent registered public accounting firm, is responsible for auditing those financial statements.

In connection with our review of Outerwall’s consolidated audited financial statements for the fiscal year ended December 31, 2013, we relied on reports received from KPMG LLP as well as the advice and information we received during discussions with Outerwall management. In this context, we hereby report as follows:

(i) The Audit Committee has reviewed and discussed the audited financial statements for fiscal year 2013 with the Company’s management.

(ii) The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed under Auditing Standard No. 16, Communications with Audit Committees.

(iii) The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm the independent registered public accounting firm’s independence.

(iv) Based on the review and discussion referred to in paragraphs (i) through (iii) above, the Audit Committee recommended to the Board of Directors, and the Board approved, that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2013, for filing with the SEC.

The Audit Committee

Robert D. Sznewajs, Chairperson

Nelson C. Chan

Nora M. Denzel

David M. Eskenazy

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S FEES REPORT

Fees Paid to Independent Registered Public Accounting Firm

In connection with the audit of the 2013 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 Outerwall. That agreement is subject to alternative dispute resolution procedures, and various other provisions.

We incurred the following fees for services performed by KPMG LLP, our principal auditor, for fiscal years 2013 and 2012, inclusive of out-of-pocket expenses.

Audit Fees
2013	$	2,215,100
2012	$	1,906,470

Audit Fees consist of fees for professional services rendered for the audit of our consolidated annual financial statements, reviews of our interim consolidated financial statements included in quarterly reports, and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements, including relating to the SEC.

Audit-Related Fees
2013	$	0
2012	$	0

Audit-Related Fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.”

Tax Fees
2013	$	823,000
2012	$	1,071,383

Tax Fees consist of fees for professional services rendered for assistance with federal, state, and international tax compliance, tax advice, and tax planning. All Tax Fees for 2013 and 2012 related to tax compliance services, consultation, and tax planning. KPMG provided tax consultation to Outerwall on potential tax ramifications and potential reporting obligations relating to executed and anticipated transactions.

All Other Fees
2013	$	0
2012	$	0

Audit Committee Review and Pre-Approval of Independent Registered Public Accounting Firm’s Services

The Audit Committee has considered the non-audit services provided by KPMG LLP as described above and believes that they are compatible with maintaining KPMG LLP’s independence as Outerwall’s principal registered public accounting firm.

Pursuant to its charter, the Audit Committee pre-approves the retention of Outerwall’s independent registered public accounting firm for all audit, review, and attest engagements and all non-audit services that the independent registered public accounting firm is permitted to provide the Company and approves the fees for all such services, other than de minimis non-audit services as allowed by applicable law. Pre-approval of audit and non-audit services is exclusive to the Audit Committee and may not be delegated to management. The Audit

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Committee has delegated pre-approval authority to the chairperson of the Audit Committee. The chairperson is required to report his decisions to the Audit Committee at regularly scheduled meetings and may not authorize the approval of any audit, audit-related, or non-audit services for which the total amount to be paid by Outerwall will exceed $150,000. The Audit Committee pre-approved 100% of the Audit Fees, Audit-Related Fees, Tax Fees, and All Other Fees listed above.

EXECUTIVE OFFICERS

The following table sets forth the name, age, and position of each of our executive officers as of April 17, 2014:

Name	Age		Position
J. Scott Di Valerio		51	Chief Executive Officer
Galen C. Smith		37	Chief Financial Officer
Donald R. Rench		47	Chief Legal Officer, General Counsel, and Corporate Secretary
James S. Pinckney		57	Chief Strategy, Sales, and Services Officer
Mark Horak		56	President, Redbox
James H. Gaherity		54	President, Coinstar
Maria D. Stipp		46	President, ecoATM

J. Scott Di Valerio has served as our Chief Executive Officer and as one of our directors since April 2013. He served as the Chief Financial Officer from March 2010 until March 2013, after having joined the Company in January 2010 to work on transition matters prior to his appointment as Chief Financial Officer. Mr. Di Valerio served as president of the Americas for Lenovo Group Limited (a personal computer and technology products and services company) from December 2007 to January 2009. Previously, he served as corporate vice president, OEM division for Microsoft Corporation (a software and technology company) from 2005 to 2007, and as its corporate vice president, finance and administration, and chief accounting officer from 2003 to 2005. In addition, Mr. Di Valerio served as corporate vice president, corporate controllership for The Walt Disney Company (an entertainment company) from 2001 to 2003 and as chief financial officer for Mindwave Software Inc. (a software and technology company) during 2000. He also served in various roles, including as partner, at PricewaterhouseCoopers LLP (and its predecessors) from 1985 to 2000. Mr. Di Valerio is a certified public accountant (inactive).

Galen C. Smith has served as our Chief Financial Officer since April 2013. Previously, he served as Senior Vice President of Finance of Redbox Automated Retail, LLC (“Redbox”), Outerwall’s wholly-owned subsidiary, from May 2011 to March 2013. From January 2010 to May 2011, Mr. Smith served as Outerwall’s Corporate Vice President, Finance, and Treasurer. From September 2009 to January 2010, he served as Outerwall’s Senior Director of Finance and Treasurer, and from June 2009 to August 2009, he served as Outerwall’s Director of Finance. Prior to joining Outerwall, Mr. Smith was an investment banker at Morgan Stanley & Co. (a global financial services firm) in the consumer and retail investment banking group from August 2007 to May 2009.

Donald R. Rench has served as our Chief Legal Officer since April 2011, as our General Counsel since August 2002, and as our Corporate Secretary since March 2002. Mr. Rench served as our corporate counsel from March 2000 through August 2002. From October 1997 through March 2000, Mr. Rench served as corporate counsel for NetManage, Inc., formerly Wall Data, Inc. (a software company). Prior to that, Mr. Rench was an attorney in private practice in Cincinnati, Ohio.

James S. Pinckney has served as our Chief Strategy, Sales, and Services Officer since June 2013. Previously, he served as Corporate Leader, Strategy and Operations from January 2013 to June 2013. Prior to joining Outerwall, Mr. Pinckney served as vice president of North America Transaction Business at Lenovo

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Group Limited (a personal computer and technology products and services company) from October 2008 to September 2010. Prior to that, Mr. Pinckney held several roles at Microsoft Corporation (a software and technology company) from 1999 to 2008, and senior leadership roles at The Sabre Group (a technology company, now Sabre Holdings) and Hitachi Data Systems Corp. (an information technology company).

Mark Horak has served as our President, Redbox since March 2014. Prior to joining Outerwall, Mr. Horak served as president, the Americas at Warner Bros. Home Entertainment (a home entertainment content delivery company) from February 2008 to February 2014, as its executive vice president and general manager of Worldwide Operations and New Packaged Media from 2007 to 2008, and as its executive vice president and general manager for Canada, Latin America, Australia and Asia from 2004 to 2007, after beginning his career with Warner Bros. in various executive-level marketing roles. Previously, he served in marketing positions with Dole Packaged Foods (a food sourcing, processing, distributing, and marketing company), StarKist Seafood Company (a food producing, distributing, and marketing company), and Nabisco Brands, Inc. (a food manufacturing and marketing company).

James H. Gaherity has served as our President, Coinstar since March 2014. Previously, he served as Senior Vice President, World Wide Operations from February 2012 to March 2014. From March 2010 to February 2012, Mr. Gaherity served as Vice President of North America Operations, from May 2006 to March 2010, as Vice President of Regional Operations, and from April 2004 to May 2006, as Director of U.S. Operations for Coinstar. Prior to joining Outerwall, Mr. Gaherity served in various management roles at The Brinks Company (a security services company) from September 1998 to April 2004.

Maria D. Stipp has served as our President, ecoATM since February 2014. Previously, she served as our Chief New Ventures Officer from June 2013 to February 2014, and interim president for ecoATM from October 2013 to January 2014. From June 2011 to June 2013, Ms. Stipp served as Outerwall’s Chief Customer Officer. From February 2004 to April 2011, Ms. Stipp held several positions at Activision Blizzard, Inc. (a video game publisher), most recently as executive vice president and general manager of the owned properties business unit. From February 2001 to February 2004, Ms. Stipp served as vice president of sales at Vivendi Universal Games (a developer, publisher, and distributor of interactive entertainment). Ms. Stipp previously held sales leadership positions at Miller Brewing Company (a beverage brewing company) and Kellogg Sales Company (a packaged food company).

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SECURITY OWNERSHIP OF

CERTAIN BENEFICIAL OWNERS, DIRECTORS, AND MANAGEMENT

The following table shows the number of shares of Outerwall common stock beneficially owned as of April 1, 2014 by: (i) all those known by us to be beneficial owners of more than 5% of our outstanding common stock as of April 1, 2014; (ii) each director as of April 1, 2014; (iii) each of the Named Executive Officers listed in the “2013 Summary Compensation Table”; and (iv) the directors and executive officers as a group as of April 1, 2014.

Unless otherwise indicated, beneficial owners listed in the table may be contacted at Outerwall’s corporate headquarters at 1800 114th Avenue S.E., Bellevue, Washington 98004.

Name	Number of Shares Beneficially Owned (1)		Percentage of Outstanding Shares (1)
More Than 5% Stockholders:
BlackRock, Inc. (2) 40 East 52nd Street New York, NY 10022		2,448,077		12.0	%
The Vanguard Group, Inc. (3) 100 Vanguard Blvd. Malvern, PA 19355		2,054,350		10.0	%
JANA Partners LLC (4) 767 Fifth Avenue, 8th Floor New York, NY 10153		1,722,041		8.4	%
Fine Capital Partners, L.P. (5) 590 Madison Avenue, 27th Fl. New York, NY 10022		1,566,367		7.7	%
Park West Asset Management LLC (6) 900 Larkspur Landing Circle, Suite 165 Larkspur, CA 94939		1,514,403		7.4	%
TPG-Axon Management LP (7) 888 Seventh Avenue, 38th Floor New York, New York 10019		1,434,429		7.0	%
Non-Employee Directors:
Deborah L. Bevier (8)		25,833		*
Nelson C. Chan (9)		8,284		*
Nora M. Denzel (10)		3,403		*
David M. Eskenazy (11)		16,522		*
Robert D. Sznewajs (12)		17,668		*
Ronald B. Woodard (13)		9,053		*
Named Executive Officers:
J. Scott Di Valerio (14)		127,131		*
Paul D. Davis (15)		121,127		*
Galen C. Smith (16)		34,979		*
Donald R. Rench (17)		57,418		*
James S. Pinckney (18)		11,002		*
Michael J. Skinner (19)		0		*
Anne G. Saunders (20)		0		*
All directors and current executive officers as a group (13 persons) (21)		357,363		1.7	%

* Represents beneficial ownership of less than 1%

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(1) Beneficial ownership is determined in accordance with SEC rules. For the number of shares beneficially owned by each of the “More Than 5% Stockholders,” we rely on each of such stockholder’s statements filed with the SEC pursuant to Section 13(d) or 13(g) of the Exchange Act, as described in the footnotes below. For each person, entity, or group included in this table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person, entity, or group by the sum of 20,390,589 shares of Outerwall common stock outstanding as of April 1, 2014, plus the number of shares of common stock, if any, that such person, entity, or group had the right to acquire pursuant to the exercise of stock options or other rights within 60 days of April 1, 2014. Except as indicated by footnote, and subject to marital community property laws where applicable, we believe that the persons or entities named in the table above have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

(2) Information presented is based on a Schedule 13G/A filed with the SEC on January 30, 2014 by BlackRock, Inc., as a parent holding company or control person. Pursuant to the filing, BlackRock, Inc. reports that it has sole voting power over 2,349,836 shares and sole dispositive power over 2,448,077 shares.

(3) Information presented is based on a Schedule 13G/A filed with the SEC on February 12, 2014 by The Vanguard Group (“Vanguard”). Pursuant to the filing, Vanguard reports that it has sole voting power over 39,305 shares, sole dispositive power over 2,017,045 shares and shared dispositive power over 37,305 shares.

(4) Information presented is based on a Schedule 13D/A filed with the SEC on March 10, 2013 by JANA Partners LLC. JANA Partners LLC reports that it has sole voting and sole dispositive powers over the shares. Subsequently, on April 10, 2014, JANA Partners LLC filed a Schedule 13D/A with the SEC indicating that as of such date it beneficially owned 997,041 shares, which is 4.9% of the shares outstanding as of April 1, 2014.

(5) Information presented is based on a Schedule 13G/A filed with the SEC on February 14, 2014 by Fine Capital Partners, L.P., Fine Capital Advisors, LLC, and Debra Fine. Pursuant to the filing, each of Fine Capital Partners, L.P., Fine Capital Advisors, LLC (general partner of Fine Capital Partners, L.P.), and Ms. Fine (manager of Fine Capital Advisors, LLC) reports that each had shared voting power and shared dispositive power over the shares.

(6) Information presented is based on a Schedule 13G/A filed with the SEC on February 12, 2014 by Park West Asset Management LLC (“PWAM”) and Peter S. Park. Pursuant to the filing, each of PWAM and Mr. Park (sole member and manager of PWAM) reports that each has sole voting power and dispositive power over 1,514,403 shares.

(7) Information presented is based on a Schedule 13G filed with the SEC on October 8, 2013 by TPG-Axon Management LP, TPG-Axon Partners GP, L.P., TPG-Axon GP, LLC, TPG-Axon Partners, LP, TPG-Axon International, L.P., TPG-Axon International GP, LLC, Dinakar Singh LLC and Dinakar Singh. Pursuant to the filing, each of TPG-Axon Management LP, TPG-Axon GP, LLC, Dinakar Singh LLC and Mr. Singh reports that each has shared voting power and shared dispositive power over 1,434,429 shares; each of TPG-Axon Partners GP, L.P. and TPG-Axon Partners, LP reports that it has shared voting power and shared dispositive power over 507,500 shares; and each of TPG-Axon International, L.P. and TPG-Axon International GP, LLC reports it has have shared voting power and shared dispositive power over 770,145 shares. Mr. Singh is managing member of Dinakar Singh LLC and chief executive officer of the TPG-Axon entities.

(8) The number of shares beneficially owned by Ms. Bevier includes (a) 6,807 shares issuable upon the exercise of options exercisable within 60 days of April 1, 2014 and (b) 1,269 shares of unvested restricted stock. Ms. Bevier’s three-year term will expire at the Annual Meeting.

(9) The number of shares beneficially owned by Mr. Chan includes (a) 4,172 shares issuable upon the exercise of options exercisable within 60 days of April 1, 2014 and (b) 1,777 shares of unvested restricted stock.

(10) The number of shares beneficially owned by Ms. Denzel includes (a) 1,648 shares issuable upon the exercise of options exercisable within 60 days of April 1, 2014 and (b) 1,269 shares of unvested restricted stock.

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(11) The number of shares beneficially owned by Mr. Eskenazy includes (a) 8,517 shares issuable upon the exercise of options exercisable within 60 days of April 1, 2014 and (b) 1,269 shares of unvested restricted stock.

(12) The number of shares beneficially owned by Mr. Sznewajs includes (a) 5,116 shares issuable upon the exercise of options exercisable within 60 days of April 1, 2014 and (b) 1,269 shares of unvested restricted stock.

(13) The number of shares beneficially owned by Mr. Woodard includes (a) 5,116 shares issuable upon the exercise of options exercisable within 60 days of April 1, 2014 and (b) 1,269 shares of unvested restricted stock.

(14) The number of shares beneficially owned by Mr. Di Valerio includes (a) 31,203 shares issuable upon the exercise of options exercisable within 60 days of April 1, 2014 and (b) 63,960 shares of unvested restricted stock, 35,533 of which are a target amount subject to adjustment and vesting based on the Company’s achievement of certain performance targets.

(15) Mr. Davis retired effective March 31, 2013.

(16) The number of shares beneficially owned by Mr. Smith includes (a) 4,703 shares issuable upon the exercise of options exercisable within 60 days of April 1, 2014 and (b) 24,892 shares of unvested restricted stock, 12,040 of which are a target amount subject to adjustment and vesting based on the Company’s achievement of certain performance targets.

(17) The number of shares beneficially owned by Mr. Rench includes (a) 16,091 shares issuable upon the exercise of options exercisable within 60 days of April 1, 2014 and (b) 16,333 shares of unvested restricted stock, 8,616 of which are a target amount subject to adjustment and vesting based on the Company’s achievement of certain performance targets.

(18) The number of shares beneficially owned by Mr. Pinckney includes (a) 928 shares issuable upon the exercise of options exercisable within 60 days of April 1, 2014 and (b) 9,876 shares of unvested restricted stock, 5,897 of which are a target amount subject to adjustment and vesting based on the Company’s achievement of certain performance targets.

(19) Mr. Skinner resigned as President of Coinstar effective March 10, 2014.

(20) Ms. Saunders’ employment terminated on January 6, 2014.

(21) The number of shares beneficially owned by all directors and executive officers as a group as of April 1, 2014 includes (a) 87,758 shares issuable upon the exercise of options exercisable within 60 days of April 1, 2014 and (b) 162,318 shares of unvested restricted stock, 79,752 of which are a target amount subject to adjustment and vesting based on the Company’s achievement of certain performance targets.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires Outerwall’s directors, officers, and beneficial holders of more than 10% of a registered class of Outerwall’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. To our knowledge, all of the applicable directors, officers, and beneficial holders of more than 10% of the Company’s stock complied with all of the Section 16(a) reporting requirements applicable to them with respect to transactions during fiscal year 2013, except that we inadvertently filed one report late on behalf of Tad K. Larsen, our former Chief Accounting Officer, which related to one transaction.

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COMPENSATION DISCUSSION AND ANALYSIS

Introduction

This Compensation Discussion and Analysis describes the 2013 compensation program for our “Named Executive Officers,” which include:

• J. Scott Di Valerio, our Chief Executive Officer as of April 1, 2013, and former Chief Financial Officer;

• Paul D. Davis, our former Chief Executive Officer;

• Galen C. Smith, our Chief Financial Officer as of April 1, 2013;

• Donald R. Rench, our Chief Legal Officer, General Counsel, and Corporate Secretary;

• James S. Pinckney, our Chief Strategy, Sales, and Services Officer;

• Michael J. Skinner, our former President of Coinstar through March 10, 2014; and

• Anne G. Saunders, our former President of Redbox through December 5, 2013.

The Compensation Committee, which is composed of all independent directors, designed our program to ensure that our compensation practices further the shared interests of stockholders and management to attract, hire, retain, and motivate the people needed to achieve our performance goals.

Executive Summary

We experienced solid results in several key areas for fiscal year 2013, including:

• We continued to achieve our key objective of driving profitability. For fiscal year 2013 compared to fiscal year 2012, core diluted earnings per share (“Core Diluted EPS”) from continuing operations grew by 15% to $5.92 (Core Diluted EPS is a non-GAAP (generally accepted accounting principles) financial measure; for reconciliation to diluted EPS from continuing operations (the most comparable GAAP measure) and other information on this measure, please reference our Annual Report under “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Non-GAAP Financial Measures—Core Diluted EPS from Continuing Operations” on page 34);

• We completed the acquisition of ecoATM, providing a strong growth opportunity;

• Redbox drove revenue of $1.97 billion;

• Our Coinstar business surpassed $300 million in revenue for the first time;

• We realigned our business to drive free cash flow and greater profitability. For fiscal year 2013, our free cash flow was $166.4 million (free cash flow is a non-GAAP financial measure; for reconciliation to net cash provided by operating activities (the most comparable GAAP measure) and other information on this measure, please reference our Annual Report under “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Non-GAAP Financial Measures—Free Cash Flow” on page 35);

• We repurchased approximately $195 million of our common stock, representing approximately 3.3 million shares and over 100% of our free cash flow; and

• We enhanced our capital structure by raising $350 million through an offering of senior unsecured notes and by adding $350 million of debt capacity, in fiscal year 2013.

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We also experienced some challenges in fiscal year 2013, primarily through the third quarter, including:

• Our increased rentals and revenue for Redbox did not meet our expectations; and

• Our net revenue per rental was adversely impacted by heightened promotional discount activity primarily during the second and third quarters. Through customer relationship management strategies, we improved our promotional efficiency through the end of the year, but this did not fully offset the earlier impact.

Compensation for our Named Executive Officers during 2013 reflected the Company’s performance and our pay-for-performance philosophy:

• Base salary increases for 2013 ranged from 0% to 5% for all Named Executive Officers other than Messrs. Di Valerio and Smith, who were promoted during 2013 and received base salary increases of 50% and 49%, respectively, commensurate with their promotions.

• Cash bonuses earned under our 2013 Incentive Compensation Plan for all Named Executive Officers other than Mr. Skinner ranged from 0% to 24% of target as a result of management team and/or individual performance. No payouts were made for the company performance component of our 2013 Short Term Incentive Plan because the Company’s achievement of core direct contribution margin (“Core DCM”) and revenue in 2013 (both measures calculated as described below under the discussion of “Short-Term Incentives”) was below the minimum threshold.

• Mr. Skinner earned a cash bonus of 102% of target as a result of our Coinstar business’s achievement of $104.6 million in unallocated direct contribution margin (“unallocated DCM” calculated as described below under the discussion of “Short-Term Incentives”), 1.4% of year over year same store sales growth, and $300.2 million in revenue, and his individual performance, in fiscal 2013.

• The aggregate value of all annual equity awards granted to each of our Named Executive Officers ranged from $300,000 to $2,000,000 (based on performance-based restricted stock awards at target, where applicable), reflecting our emphasis on long-term compensation and our philosophy of aligning the interests of our executives with the interests of stockholders. Performance-based restricted stock awards granted in 2013 have a two-year performance period (2013-2014) and will be earned, if at all, after the end of fiscal 2014.

Over the last several years, the Compensation Committee has taken several actions and also continued several long-standing practices that it believes reflect its pay-for-performance philosophy and contribute to good corporate governance, including:

• increasing the performance period for performance-based restricted stock awards from one year to two years, beginning with the 2013 grants;

• prohibiting our executive officers, directors, and certain other covered individuals from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan;

• adopting a recoupment policy (also known as a “clawback policy”) covering incentive compensation paid to executives (please refer to the related discussion under “Policy on Reimbursement of Incentive Payments”);

• formalizing an annual process to assess risks associated with our compensation policies and programs;

• establishing stock ownership guidelines for our executives (please refer to the related discussion under “Officer Stock Ownership Guidelines”);

• retaining discretion to adjust amounts payable under various compensation components;

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• approving change of control benefits for executives that place stronger emphasis on “double-trigger” benefits and do not include any tax gross-ups (please refer to the related discussions under “Severance and Change of Control” in this “Compensation Discussion and Analysis” and under “Elements of Post-Termination Compensation and Benefits” in “Named Executive Officer Compensation”);

• establishing caps of 200% of target and 150% of target under the short-term incentive program and the long-term performance-based restricted stock program, respectively;

• providing limited perquisites (please refer to related discussion under “Other Benefits and Perquisites”); and

• hiring compensation consultants directly to assist the Compensation Committee in its compensation decisions.

Outerwall experienced solid growth and strong financial performance over the last several years. As a review of financial results from continuing operations over the last five years provided below indicates, our revenue from continuing operations has grown by over 100% and our Core Diluted EPS from continuing operations has grown by more than 300%, delivering on the Company’s objective of driving profitability.

* There were no non-core items in 2009 and 2010, so figures reflect diluted earnings per share from continuing operations.

In determining compensation for our Named Executive Officers, the Compensation Committee has worked to align the objectives of our executive compensation programs (outlined in the sections below) with our growth and performance. Over the last five years, the trend line for our CEO Total Compensation* has been similar to, or below, that of our indexed total stockholder return (“TSR”)*, demonstrating our commitment to pay for performance, as illustrated in the graph below.

* For purposes of this graph, (a) CEO Total Compensation for 2013 includes the total annual compensation reported in the “2013 Summary Compensation Table” for Mr. Di Valerio and has been adjusted to reflect a full

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year of compensation in the position of Chief Executive Officer, (b) CEO Total Compensation for 2009-2012 was adjusted to include the final fair market value of performance-based restricted stock that had actually been earned, but 2013 performance-based restricted stock is valued at target as it has not yet been earned, and (c) TSR is defined as the increase in our stock price, indexed at December 31, 2008 at 100% and measured as of December 31 of each subsequent year.

Objectives of Executive Compensation Programs

Our executive compensation programs are designed to attract, motivate, and retain executives critical to our long-term success and the creation of stockholder value. The decisions by the Compensation Committee concerning the specific compensation elements and total compensation paid or awarded to our Named Executive Officers for 2013 were made with the following objectives in mind:

• “total” compensation—the Compensation Committee believes that executive compensation packages should take into account the competitiveness of each component of compensation and also total direct compensation, which includes base salary, short-term (cash) and long-term (equity) incentives, and benefits;

• “pay-for-performance”—the Compensation Committee believes that a significant portion of executive compensation should be determined based on Company performance as compared to quantitative and qualitative performance goals set at the beginning of each year to ensure accountability and to motivate executives to achieve a higher level of performance;

• “at-market” compensation—the Compensation Committee believes that executive total direct compensation should generally be near the median (but below the 75th percentile) of compensation in the market and considers the market data from published surveys and a similarly situated peer group of companies (as detailed below) in order to attract and retain the most qualified candidates;

• “at-risk” compensation—the Compensation Committee believes that the allocation among the different forms of compensation should vary based on the position and level of responsibility; for example, those executives with the greater ability to influence Company performance will have a higher level of at-risk compensation in the form of an increased percentage of total compensation in stock options, time-based restricted stock, performance-based restricted stock, and performance-based short-term incentives;

• “stockholder aligned” compensation—the Compensation Committee believes that equity compensation awarded to executives (consisting of a mix of stock options, time-based restricted stock, and performance-based restricted stock) should be a significant portion of each executive’s compensation, should assist in the retention of our executives, and should further the shared interests of our executives and stockholders;

• “fair” compensation—the Compensation Committee believes that executive compensation levels should be perceived as fair, both internally and externally; and

• “tax deductible” compensation—the Compensation Committee believes that we should maximize the tax deductibility of compensation paid to executives, as permitted under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), but may approve components of executive compensation that will not meet the requirements of Section 162(m) in order to attract, motivate, and retain executives.

The executive compensation program objectives for 2013 were established based on discussions among the Compensation Committee, management, and outside consultants. The Compensation Committee reviews the compensation program objectives annually when determining the next year’s executive compensation.

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Executive Compensation Process

Benchmarking of Compensation

In order to attract and retain the most qualified candidates and depending on the executive’s position and/or the component of compensation, the Compensation Committee generally set 2013 Named Executive Officer total direct compensation (consisting of base salary and target short-term and long-term incentives) near the median of the aggregate market surveys and proxy data that the Compensation Committee reviewed.

For 2013 Named Executive Officer compensation, the Compensation Committee retained Towers Watson as a compensation consultant to conduct a total direct compensation analysis for executives and to make recommendations for changes based on our pay philosophy, business objectives, and stockholder expectations. Towers Watson conducted a competitive market analysis that included published national survey sources of similarly sized companies augmented by proxy data of companies with revenues of similar size to the Company. The data gathered included 25th percentile, 50th percentile (median), and 75th percentile base salary and actual cash compensation levels as well as 50th percentile and 75th percentile long-term incentive and total direct compensation levels. Specifically, Towers Watson provided data from the following surveys (survey data is provided in aggregate form; survey participants on an individual position basis were not identifiable) and the proxy data for the peer companies listed below, updated to January 1, 2013 by an annualized rate of 3.0%:

• 2012 Mercer Executive Compensation Survey Report (for companies with $1 billion to $2.5 billion in revenues);

• 2012 Towers Watson Executive Compensation Database (for companies with $1 billion to $3 billion in revenues); and

• 2012 Radford Global Technology Survey (for companies with $1 billion to $3 billion in revenues).

The 2013 peer group was identical to the 2012 peer group and was composed of the following companies:

The Brink’s Company	Netflix, Inc.
Diebold, Incorporated	RealNetworks, Inc.
GameStop Corp.	Scientific Games Corporation
International Game Technology	TiVo Inc.

Role of Executive Officers

In 2013, Mr. Davis and Mr. Di Valerio, with support from the Company’s human resources and finance departments, prepared and provided recommendations to the Compensation Committee on the following items: base salaries for executives (excluding themselves), the design of the 2013 short-term and long-term incentive plans for executives, and the grant value of equity awards provided to executives (excluding themselves ). Mr. Davis and Mr. Di Valerio considered several factors when making these recommendations as outlined below in the “Elements of In-Service Compensation and Benefits” section. Following 2013 year-end, Mr. Di Valerio reviewed the results of the Company with the Compensation Committee and provided the Compensation Committee with recommendations on individual performance incentives for executives (excluding himself).

Tax Considerations

Section 162(m) of the Code imposes a $1 million limit on the amount that a publicly traded corporation may deduct for compensation paid to the Chief Executive Officer and the three other most highly compensated executives (other than the Chief Financial Officer) in a fiscal year. “Performance-based compensation” is excluded from this $1 million limit. Stock options and certain performance-based restricted stock awards granted to our executives pursuant to our equity compensation plans are designed to qualify for the performance-based

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exemption. While the Compensation Committee believes it is important to maximize the tax deductibility of compensation paid to our executives, the Compensation Committee has not adopted a policy that all compensation must be tax-deductible and qualified under Section 162(m). In order to maintain ongoing flexibility of our compensation programs, the Compensation Committee may approve incentive and other compensation that exceeds the $1 million limit.

Risk Assessment

In developing and reviewing the Company’s executive incentive programs, the Compensation Committee considered the business risks inherent in program designs to ensure that they do not induce executives to take unacceptable levels of business risk for the purpose of increasing their incentive plan awards at the expense of stockholder interests. The Compensation Committee is satisfied that the plan designs are conservative in this respect and that the compensation components work together as a check and balance to ensure that executive incentives are consistent with stockholder interests. The Compensation Committee believes that as a result of our use of different types of equity compensation awards, our use of both long- and short-term incentives with multiple performance measures, the implementation of our Policy on Reimbursement of Incentive Payments (as discussed below), the caps on our incentive payments at sustainable levels, and our stock ownership guidelines (as discussed below), the Company’s executive compensation program does not encourage our management to take unreasonable risks relating to the business.

2013 Say-on-Pay Vote

At our 2013 Annual Meeting of Stockholders, approximately 98% of the votes cast were cast in favor of the advisory vote on the compensation of our Named Executive Officers (not including abstentions or broker non-votes) (the “2013 Say-on-Pay Vote”). The 2013 Say-on-Pay Vote occurred after 2013 compensation decisions for Named Executive Officers had been made. Given the strong support from our stockholders in the 2013 Say-on-Pay Vote, the Compensation Committee determined that additional adjustments to the compensation of Named Executive Officers were not necessary.

Elements of 2013 Compensation

Elements of In-Service Compensation and Benefits

Compensation paid to our Named Executive Officers in 2013 consisted of the following primary components:

• base salary;

• short-term (cash) incentives; and

• long-term (equity) incentives.

We pay base salaries in order to attract and retain executives as well as to provide a base of cash compensation for employment for the year. We pay short-term incentives to reward executives for individual and team performance and for achieving key measures of corporate performance. We pay long-term incentives in order to retain executives as well as to align the interests of executives directly with the long-term interests of our stockholders.

Base Salary.    Base salaries for our executives are determined by evaluating a number of factors, including:

• the responsibilities of the position;

• the strategic value of the position;

• the experience, skills, and performance of the individual filling the position;

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• market data for comparable positions, with base salaries generally targeted near the median; and

• the other elements of compensation and the overall value of total direct compensation.

Base salaries are reviewed annually and are effective on or about March 1 of the new fiscal year. The Compensation Committee may adjust base salaries from time to time to recognize changes in individual performance, promotions, and competitive compensation levels.

In January 2013, the Compensation Committee established 2013 base salaries for the Named Executive Officers who were executives of the Company at that time. No change was made to Mr. Davis’s base salary, as he notified the Company on January 1, 2013 that he would be retiring from the Company effective March 31, 2013. Base salaries for Messrs. Di Valerio and Smith’s new positions were established in January 2013, but were not effective until April 1, 2013. Mr. Pinckney’s base salary was initially established at $320,000 at the time of his hire as Corporate Leader, Strategy and Operations in January 2013 and increased to $350,000 in connection with his promotion to Chief Strategy, Sales, and Services Officer in June 2013.

The Compensation Committee approved the following 2013 base salaries:

Named Executive Officer	2013 Base Salary		Percentage Increase Over 2012 Base Salary
J. Scott Di Valerio	$	750,000		50%
Paul D. Davis		800,000		0%
Galen C. Smith		400,000		49%
Donald R. Rench		372,750		5%
James S. Pinckney		350,000		N/A
Michael J. Skinner		325,000		2.1%
Anne G. Saunders		412,000		3%

As previously noted, we generally set compensation, including base salaries, near the median of market data, and 2013 base salaries for all Named Executive Officers, including those for the promotions of Messrs. Di Valerio and Smith, were consistent with that approach. Base salary increases for Messrs. Di Valerio and Smith were higher, but were reflective of their respective promotions.

Short-Term Incentives.    The 2013 short-term incentives awarded to our Named Executive Officers were awarded under the 2013 Incentive Compensation Plan and consisted of a cash bonus to reward executives for performance during the 2013 fiscal year. The structure of the 2013 Incentive Compensation Plan for all Named Executive Officers other than Messrs. Davis and Mr. Skinner, was as follows:

• 80% was based on the Company’s achievement of certain performance measures described below; and

• 20% was based on the Compensation Committee’s discretion after evaluating the management team’s and/or the individual’s performance.

Mr. Davis did not participate in the 2013 Short-Term Incentive Plan because of his expected retirement. For Mr. Skinner, the structure of the 2013 Incentive Compensation Plan was as follows:

• 40% was based on the Company’s achievement of certain performance measures described below;

• 60% was based on our Coinstar business’s achievement of certain performance measures described below; and

• An individual performance multiplier was applied, as described below.

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As noted above, the Compensation Committee believes that those executives who have a greater ability to influence Company performance should have a higher level of at-risk compensation. Accordingly, target bonus amounts varied by position. In 2013, the Compensation Committee increased the short-term incentive target awards for Messrs. Di Valerio and Smith to reflect their promotions. Mr. Rench’s short-term incentive target was increased by 5%, consistent with our objectives of providing pay-for-performance, at-risk compensation, and at-market compensation. Target award percentages for the other Named Executive Officers remained the same. As a result, target award percentages for 2013 as compared to 2012 were as follows:

Named Executive Officer	2013 Target Award as Percentage of Base Salary *		2012 Target Award as Percentage of Base Salary
J. Scott Di Valerio		100%		60	%
Galen C. Smith		60%		40	%
Donald R. Rench		55%		50	%
James S. Pinckney		50%		N/A	%
Michael J. Skinner		60%		60	%
Anne G. Saunders		60%		60	%

* Target awards were based on the executive’s actual base salary for the year and percentages reflect the target award at year end. For Messrs. Di Valerio and Smith their actual 2013 bonus targets were blended due to their in-year promotions and their bonus targets were 93.3% and 56.6% of full year base salary, respectively.

As previously noted, we generally set compensation, including short-term incentive targets, near the median of market data, and 2013 short-term inventive targets for all Named Executive Officers, including those for the promotions of Messrs. Di Valerio and Smith, were consistent with that approach.

Corporate Performance Component

In 2013, the Compensation Committee chose to measure our short-term incentives based on overall results, as well as results from core activities, both of which are indicative of our ongoing performance. We define our core activities as those associated with our primary operations, while our non-core activities are primarily nonrecurring events or events that we do not control. For further information regarding core activities and non-core activities, please reference our Annual Report under “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Non-GAAP Financial Measures—Core and Non-Core Results” on page 33.

For the 80% attributable to the achievement of corporate performance measures for all of the Named Executive Officers other than Messrs. Davis and Skinner, the Compensation Committee reviewed the following performance measures, each weighted equally:

• Core DCM, defined as net income from core activities before taxes and stock-based compensation; and

• revenue.

These same measures applied to 40% of Mr. Skinner’s award, but were weighted at 62.5% for Core DCM and 37.5% for revenue.

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These measures were recommended by management and approved by the Compensation Committee in 2013 to continue the focus on net earnings in coordination with our strategic objective of driving profitability. The tables below show the level of achievement and the related level of payout (between 0% and 200%) attributable to each measure. Amounts are interpolated for achievement between the levels provided in the tables.

	Core DCM Achievement
Amount	% of Target	Payout %
$  236,675,000	90.0%	0%
$  241,934,000	92.0%	25%
$  245,879,000	93.5%	50%
$  249,823,000	95.0%	75%
$  253,768,000	96.5%	90%
$  262,972,000	100.0%	100%
$  276,121,000	105.0%	125%
$  289,269,000	110.0%	150%
$  302,418,000	115.0%	175%
$  315,566,000	120.0%	200%
	Revenue Achievement
Amount	% of Target	Payout %
$  2,434,860,000	92.0%	0%
$  2,487,791,000	94.0%	25%
$  2,540,723,000	96.0%	50%
$  2,593,655,000	98.0%	75%
$  2,646,587,000	100.0%	100%
$  2,699,518,000	102.0%	125%
$  2,752,450,000	104.0%	150%
$  2,805,382,000	106.0%	175%
$  2,858,313,000	108.0%	200%

In February 2014, the Compensation Committee determined that after adjustments related to the ecoATM acquisition and our methodology for amortizing our Redbox content library (for additional detail on the content library, please reference our Annual Report under “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Critical Accounting Policies—Content Library” on page 41), the Company did not achieve the minimum threshold for the Core DCM measure or the revenue measure, resulting in zero payout for this portion of each Named Executive Officer’s short-term incentive award under the 2013 Incentive Compensation Plan. Core DCM is calculated inclusive of bonus expenses.

For the 60% of Mr. Skinner’s short-term incentive award that was attributable to our Coinstar business’s achievement of performance measures, the Compensation Committee reviewed the following performance measures, weighted as provided below:

• Coinstar unallocated DCM, defined as Coinstar operating income before corporate and shared services cost allocations and stock-based compensation (66.66%);

• Coinstar revenue (16.67%); and

• 2013 year over year same store sales growth (16.67%).

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These measures were recommended by management and approved by the Compensation Committee in 2013. The measures were aligned with the operational objectives of the Coinstar business and were consistent with prior years. Coinstar unallocated DCM and same store sales are non-GAAP financial measures; for additional detail on the financial performance and same store sales of the Coinstar business, please reference our Annual Report under “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Segment Results—Coinstar” on page 29). The tables below show the level of achievement and the related level of payout (between 0% and 200%) attributable to each measure. Amounts are interpolated for achievement between the levels provided in the tables.

	Coinstar Unallocated DCM Achievement
Amount	% of Target	Payout %
$    90,230,000	95.0%	0%
$    91,180,000	96.0%	40%
$    92,130,000	97.0%	60%
$    93,080,000	98.0%	75%
$    94,030,000	99.0%	90%
$    94,980,000	100.0%	100%
$    96,880,000	102.0%	120%
$    98,780,000	104.0%	140%
$  100,670,000	106.0%	160%
$  102,570,000	108.0%	180%
$  104,470,000	110.0%	200%
	Coinstar Same Store Sales Achievement
Amount	% of Target	Payout %
1.1%	60.0%	0%
1.3%	70.0%	25%
1.5%	85.0%	50%
1.6%	90.0%	75%
1.8%	100.0%	100%
2.1%	115.0%	125%
2.3%	130.0%	150%
2.5%	140.0%	175%
2.7%	150.0%	200%
	Coinstar Revenue Achievement
Amount	% of Target	Payout %
$  287,820,000	95.0%	0%
$  290,850,000	96.0%	40%
$  293,880,000	97.0%	55%
$  296,910,000	98.0%	70%
$  299,940,000	99.0%	85%
$  302,970,000	100.0%	100%
$  306,000,000	101.0%	120%
$  309,030,000	102.0%	140%
$  312,060,000	103.0%	160%
$  315,090,000	104.0%	180%
$  318,120,000	105.0%	200%

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In February 2014, the Compensation Committee determined that our Coinstar business achieved $104.6 million of unallocated DCM for a payout of 200% attributable to this measure, 1.4% year over year same store sales growth for a payout of 38% attributable to this measure, and $300.2 million of revenue for a payout of 86.4% attributable to this measure, resulting in a 154.1% payout for the Coinstar business component of Mr. Skinner’s short-term incentive award, which combined with the zero payout attributable to the achievement of Company performance measures resulted in a payout equal to 92.4% of this portion of Mr. Skinner’s target award.

Management Team and/or Individual Performance Component

For the 20% attributable to the Compensation Committee’s discretion after evaluating the management team’s and/or the individual’s performance applicable to all Named Executive Officers (other than Messrs. Davis and Skinner) and for the performance multiplier applicable to Mr. Skinner, the Compensation Committee considered the recommendations of the Chief Executive Officer for all participating executives (excluding the Chief Executive Officer) and conducted its own evaluation of the Chief Executive Officer. The following table summarizes the factors evaluated by the Compensation Committee for each participating Named Executive Officer and the percentage payout, or multiplier, as applicable, approved by the Compensation Committee for this component of the award.

Named Executive Officer	Management Team/Individual Performance Factors	Component Payout %
J. Scott Di Valerio	Strong transition into Chief Executive Officer role; completed ecoATM acquisition; strong management of capital allocation and cost containment to drive profitability; completed debt restructuring; continued enhancement of the leadership team at multiple levels; key involvement in the assessment of management talent and succession planning.		100	%
Galen C. Smith	Strong transition into Chief Financial Officer role; led debt restructuring efforts; lead the ecoATM acquisition; guided corporate restructuring, capital allocation, and profitability review and tax structure alignment; executed on the sale of legacy kiosks.		100	%
Donald R. Rench	Led the effective legal support for the ecoATM acquisition and numerous other transactions; executed on senior leadership transitions; continued to refine legal department structure and support—driving higher department performance.		120	%
James S. Pinckney	Strong transition into Outerwall; took on responsibility for the sales function at mid-year; led the corporate re-branding initiative; had significant impact on corporate communications initiatives; key leader in the ecoATM integration efforts.		120	%
Michael J. Skinner	Drove strong operating results and very good profitability for the Coinstar business; continued development and build out of the Coinstar leadership team; solid delivery on Coinstar Exchange objectives.		110	%
Anne G. Saunders	Did not complete key objectives.		0	%

For Mr. Skinner, the total weighted score of the Company and Coinstar performance measures applicable to his award were multiplied by his individual score to arrive at a final payout of 102% of his target award.

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Total Payouts

Overall, the total cash bonuses paid to our Named Executive Officers under the 2013 Incentive Compensation Plan ranged from 0% to 102% of each of their respective target bonus amounts. Total individual cash bonuses paid to each of the participants for 2013 consisted of the following:

Named Executive Officer	Company Performance		Management Team / Individual Performance		Total Bonus
J. Scott Di Valerio	$	0	$	128,269	$	128,269
Galen C. Smith		0		41,562		41,562
Donald R. Rench		0		48,843		48,843
James S. Pinckney		0		38,862		38,862
Michael J. Skinner		179,606		17,961		197,567
Anne G. Saunders		0		0		0

Long-Term Incentives.    Long-term incentives awarded in 2013 to our Named Executive Officers other than Mr. Davis consisted of equity compensation in the form of stock options, time-based restricted stock awards, and performance-based restricted stock awards. Due to Mr. Davis’s expected retirement, he did not receive any long-term incentive grants in 2013. All long-term incentive grants to the Named Executive Officers are approved by the Compensation Committee. Annual long-term incentive grants are typically granted at the beginning of the service period for which the awards are granted (e.g., the long-term incentive grants for performance in 2013 were made in February 2013) in order to motivate and retain the executive for the upcoming year. The Compensation Committee also periodically makes promotional or new hire equity grants.

The Compensation Committee believes that stock ownership is an essential tool to align the interests of our executives and stockholders. Generally, the higher the level of the executive’s position, the greater the percentage of long-term incentives granted in the form of stock options, time-based restricted stock, and performance-based restricted stock, which we consider to be at-risk compensation. The Compensation Committee believes that a percentage of total compensation should be at risk in terms of Company performance to maintain strong stockholder alignment. Based on this philosophy, the Compensation Committee began granting performance-based restricted stock in 2007. For 2013, the Compensation Committee granted the same mix of annual long-term incentive compensation that it has over the last few years to our Named Executive Officers (excluding Mr. Davis), consisting of:

• 30% stock options;

• 20% time-based restricted stock; and

• 50% performance-based restricted stock.

The Compensation Committee approved a two-year performance period (2013-2014) rather than a one-year performance period for the 2013 performance-based restricted stock awards to better align the awards with results over time. To serve as transition from the one-year design to a two-year design, the Compensation Committee approved a one-time additional award of 15% of the value of the annual performance-based restricted stock grants awarded to certain executives who were continuing in their existing roles. Executives that were newly promoted or newly hired did not receive the one-time award as their equity awards were aligned with their new roles.

The Compensation Committee determined the total dollar value of long-term compensation delivered to the Named Executive Officers based on an evaluation of the following factors (without assigning a relative weight to any one particular factor):

• the past performance at the Company and anticipated contribution by the executive;

• the equity awards required from a competitive point of view to attract and/or retain the services of a valued executive;

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• the market data for comparable positions provided by Towers Watson, with long-term compensation generally targeted between the median and the 75th percentile of the market data;

• the relative total stockholder return over time of the Company compared to peer companies and market indexes;

• the value of equity awards already held by the executive;

• the value of long-term incentives as a percentage of total direct compensation;

• the realized and realizable value of total compensation over the prior two years; and

• the other elements of compensation and the current overall value and potential future value of total direct compensation.

The total dollar value of long-term incentive compensation was converted into the number of shares subject to each type of award based on the mix of long-term incentives described above, using the closing price of our common stock on the date of grant or, for stock options, the Black-Scholes value of our stock options as of the date of grant. The total dollar value of target long-term incentive compensation delivered to the Named Executive Officers for 2013 was as follows:

Named Executive Officer	Total Dollar Value
J. Scott Di Valerio	$	2,000,000
Galen C. Smith		700,000
Donald R. Rench*		483,750
James S. Pinckney		300,000
Michael J. Skinner*		322,500
Anne G. Saunders*		591,250

* Includes one-time award of 15% of the annual value of performance-based restricted stock award as a result of transition from one-year to two-year performance periods.

Stock Options and Time-Based Restricted Stock Awards

The Named Executive Officers were granted the following stock options and time-based restricted stock awards in 2013:

Named Executive Officer	Stock Options		Time-Based Restricted Stock
J. Scott Di Valerio		23,492		7,472
Galen C. Smith		8,222		2,615
Donald R. Rench		5,285		1,681
James S. Pinckney		3,712		1,179
Michael J. Skinner		3,523		1,120
Anne G. Saunders		6,460		2,054

All annual stock options and time-based restricted stock awards to our Named Executive Officers for 2013 were granted in February 2013, except for Mr. Pinckney’s grants, which were granted at the time of his hire in January 2013.

All stock options and time-based restricted stock awards granted to the Named Executive Officers in 2013 vest (and are no longer subject to forfeiture, as applicable) in four equal annual installments starting on the one-year anniversary of the vesting commencement date of February 24, 2013. The stock options have a term of ten years.

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The exercise price for all stock option grants is set at the closing price of our common stock on the date of grant. We do not have, nor do we intend to have, a program, plan, or practice to time stock option grants or stock awards to our existing executives or to new executives in coordination with the release of material nonpublic information for the purpose of affecting the value of executive compensation.

Performance-Based Restricted Stock Awards

As noted above, the performance-based restricted stock awards (at target) constituted 50%, of the total dollar value of long-term incentive compensation delivered to each Named Executive Officer for 2013 (excluding Mr. Davis). As noted above, certain executives also received an additional one-time award of 15% of their annual performance-based restricted stock award. Executives received performance-based restricted stock awards in February 2013 for 2013 compensation.

The Compensation Committee annually reviews the structure of its performance-based restricted stock awards to ensure that the focus is on the right measures to incentivize executives and create value for our stockholders. As a result of that review, the Compensation Committee determined to increase the performance period from one year to two years (2013-2014) for the 2013 awards, but use the same measures and weightings for the awards granted in 2013 as were used for the awards granted in 2012, as follows:

• 50% based on Core Adjusted EBITDA (as defined below) from continuing operations for 2013 and 2014; and

• 50% based on Core ROIC (as defined below) for 2014.

The Compensation Committee chose to measure long-term incentives based on results from core activities, which is indicative of our ongoing performance. As explained above in the discussion of our short-term incentives, we define our core activities as those associated with our primary operations. Core Adjusted EBITDA from continuing operations is defined as core adjusted earnings from continuing operations before depreciation, amortization and other; interest expense, net; income taxes; share-based payments expense; and non-core adjustments (Core Adjusted EBITDA from continuing operations is a non-GAAP financial measure; for reconciliation to income from continuing operations (the most comparable GAAP measure) and other information on this measure, please reference our Annual Report under “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Non-GAAP Financial Measures—Core Adjusted EBITDA from Continuing Operations” on page 34). Core ROIC is defined as net operating profit after taxes (“NOPAT”) for core activities for the fiscal year (2014) divided by invested capital. For purposes of calculating NOPAT, we apply a 38% corporate tax rate. Invested capital is defined as net debt plus total stockholder equity, averaged for two fiscal years (2013 and 2014).*

* For ease of understanding, formulas for our Core ROIC calculation are presented below:

Core =	NOPAT
ROIC	Invested Capital

NOPAT = (Income from continuing operations from core activities before taxes – Interest income + Interest expense) x (1 – Corporate tax rate)

Invested Capital = Total stockholder equity + Net Debt

Net Debt = (short- and long-term debt and capital lease obligations) – (cash and cash equivalents – cash identified for settling our payable to retail partners in relation to our Coinstar kiosks)

If the minimum specified performance goals for the 2013-2014 performance period are not achieved, the performance-based restricted stock awards will be forfeited. An executive could earn between 50% and 150% of the

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target number of shares if the minimum and maximum specified performance goals are achieved, respectively. Amounts are interpolated for achievement between the minimum and maximum performance goals. Once the performance-based restricted stock awards for the 2013-2014 performance period are earned following completion of the performance period, 65% of the shares earned will vest in February 2015 and 35% will vest in February 2016, provided the executive continues to provide services to us.

The following table shows the number of performance-based shares of restricted stock that could be earned by a Named Executive Officer for the 2013-2014 performance period, depending on the level of achievement of the performance goals (as noted above, Mr. Davis did not receive a performance-based restricted stock award in 2013):

Named Executive Officer	Minimum		Target		Maximum
J. Scott Di Valerio		9,340		18,681		28,021
Galen C. Smith		3,269		6,538		9,807
Donald R. Rench		2,416		4,833		7,249
James S. Pinckney		1,401		2,802		4,203
Michael J. Skinner		1,611		3,222		4,833
Anne G. Saunders		2,953		5,907		8,860

Other Benefits and Perquisites.    Executives may receive additional benefits and limited perquisites that are (a) similar to those offered to our employees generally or (b) in the Compensation Committee’s view, reasonable, competitive, and consistent with our overall executive compensation program. Perquisites are reviewed by the Compensation Committee when made. All of our executives are eligible for reimbursement for tax-planning assistance. We provide medical, dental, and group life insurance benefits to each executive, similar to those provided to all other employees. Also, as provided to all other employees, we match a portion of each executive’s contribution to his or her account in the Outerwall 401(k) retirement plan.

Upon her hire in 2012, Ms. Saunders was provided with benefits to assist with her relocation and transition, including reimbursement of the following relocation-related expenses: costs associated with closing the sale of her home; moving expenses and temporary housing; storage; use of a rental car; and a tax gross-up associated with the relocation expenses. 2013 and 2014 compensation associated with the relocation-related expenses was subject to a tax gross-up of $38,429. The relocation package was commensurate with Ms. Saunders’s position. Due to the timing of when certain relocation expenses were incurred, Ms. Saunders was reimbursed for relocation expenses in 2013 and 2014.

Upon his hire in 2013, Mr. Pinckney was provided with benefits to assist with his relocation and transition, including a sign-on bonus of $30,000 and reimbursement of the following relocation-related expenses: moving expenses and temporary housing; storage; use of a rental car; and a tax gross-up associated with the relocation expenses. 2013 compensation associated with the relocation-related expenses was subject to a tax gross-up of $8,573. The relocation package was intended to enable an effective transition into his position with Outerwall. All transition benefits were subject to repayment should Mr. Pinckney have voluntarily resigned within one year of his start date.

Severance and Change of Control

Employment Agreements and Change of Control Agreements.    We have or had (for those whose employment has terminated) employment agreements with Messrs. Davis, Di Valerio, Skinner and Smith and Ms. Saunders, and double-trigger change of control agreements with all of our Named Executive Officers, as described in the section below entitled “Elements of Post-Termination Compensation and Benefits” in “Named Executive Officer Compensation.” Executives who do not have an employment agreement serve at the will of the Board of Directors, enabling the Board to remove those executives whenever it is in our best interests, with full discretion on any severance package (excluding vested benefits). The Compensation Committee believes that the benefits provided under the employment agreements and change of control agreements are reasonable in light of

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all relevant circumstances, including each individual’s past employment experience, desired terms and conditions of employment, similar benefits offered by similarly situated peer group companies, and the strategic importance of the individual’s respective position, including stability and retention. The Compensation Committee believes that the employment agreements were necessary in order to attract and retain the executives and that the change of control agreements are necessary in order to retain and maintain stability among the executive group in the event of a potential or actual change of control. The Compensation Committee and outside consultants reviewed the employment agreements at the time they were entered into in order to determine current market terms for the particular executive.

Equity Awards.    As described in more detail in the section below entitled “Elements of Post-Termination Compensation and Benefits” in “Named Executive Officer Compensation,” certain equity awards to our Named Executive Officers accelerate (in full or in part) upon certain transactions (single-trigger) or, in other cases, upon termination of employment after certain transactions (double-trigger). Since March 2010, equity awards granted to our Named Executive Officers have emphasized double-trigger benefits, with single-trigger benefits limited to a change of control that is not a company transaction or a change of control that is a company transaction, but in which awards are not assumed or substituted for. These arrangements are designed to facilitate the retention of critical employees during a transaction, to motivate management to obtain the best price for our Company, thereby aligning their interests with the interests of our stockholders, and to align with emerging governance trends. Under these arrangements, if an executive were to leave prior to the completion of a change of control, unvested awards held by the executive would terminate.

Tax Gross-Ups.    The Company does not provide Named Executive Officers with a tax gross-up to cover personal income taxes that may apply to any severance or change of control benefits.

Officer Stock Ownership Guidelines

Because we believe that stock ownership is an essential tool to align management and stockholder interests, we have had stock ownership guidelines in place for our executives since 2003. In December 2010, the Compensation Committee and Board of Directors approved revised stock ownership guidelines to increase the ownership levels required of our executives. Under these guidelines, the Chief Executive Officer must own shares of our common stock equal in value to three times (3x) his annual base salary and all other executives must own shares of our common stock equal in value to two times (2x) their annual base salary. Shares that count towards satisfaction of these guidelines include (a) fully vested shares owned directly or indirectly through immediate family members and (b) unvested restricted stock, including time-based restricted stock and performance-based restricted stock where the performance criteria has been achieved. The shares owned are valued at the greater of (i) the price at the time of purchase/acquisition or (ii) the current market value. Ownership is measured as of December 1 of each year. Executives as of the date the guidelines were adopted are expected to meet the guidelines by December 1, 2015. Persons becoming executives after the guidelines were adopted will have until December 1 of the fifth fiscal year after being deemed an executive to come into compliance. Executives must show progress of at least 20% per year toward the five-year stock ownership target until such target is met. All executives were in compliance with the officer stock ownership guidelines as of the last measurement date.

Other than these stock ownership guidelines, our executives are not required to hold our stock for a specific amount of time following exercise or vesting.

Hedging Policy; Pledging of Stock

Directors and executives are required to obtain pre-clearance from the Company before entering into any hedging transaction involving the Company’s securities, such as a zero-cost collar or forward sale contract. To date, no director or executive of the Company has requested such pre-clearance or entered into such a transaction. In July 2013, the Board of Directors approved amendments to the Company’s Insider Trading Policy, including a prohibition of executive officers, directors, and certain other covered individuals from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan.

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Policy on Reimbursement of Incentive Payments

In March 2009, the Compensation Committee approved the Policy on Reimbursement of Incentive Payments, which provides that the Company may, in its discretion, require reimbursement of any annual incentive payment or long-term incentive payment to an executive officer or standing officer where: (a) the payment (in shares of the Company’s common stock or otherwise) was predicated upon achieving financial results that were subsequently the subject of a material restatement of the Company’s financial statements filed with the SEC; (b) the Board of Directors or the Compensation Committee determines that the individual engaged in intentional misconduct that caused or substantially caused the need for the restatement; and (c) a lower payment would have been made to the individual based upon the restated financial results. In each such case, the Company, in its discretion, may take one or more of the following actions: (i) cancel any or all outstanding annual incentive awards or long-term incentive awards held by such individual; (ii) demand that the individual return to the Company any or all cash amounts paid to the individual in settlement of an annual incentive award or any or all shares of the Company’s common stock issued to the individual in settlement of a long-term incentive award; and (iii) demand that the individual pay over to the Company any or all of the proceeds received by the individual upon the sale, transfer, or other transaction involving shares of the Company’s common stock issued in settlement of a long-term incentive award.

This policy applies and is effective with respect to any annual incentive plan established by the Company with a performance period commencing on or after January 1, 2009 and any long-term incentive awards granted by the Company on or after January 1, 2009.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis with management, and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors of the Company that the Compensation Discussion and Analysis be included in this Proxy Statement.

The Compensation Committee

Ronald B. Woodard, Chairperson

Deborah L. Bevier

Nora M. Denzel

Robert D. Sznewajs

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NAMED EXECUTIVE OFFICER COMPENSATION

2013 Summary Compensation Table

The following table shows for the fiscal year ended December 31, 2013, compensation earned by our Chief Executive Officer, former Chief Executive Officer, our Chief Financial Officer, the other three most highly compensated individuals who served as executive officers as of December 31, 2013 and our former President of Redbox (the “Named Executive Officers”).

Name and Principal Position	Year		Salary		Bonus			Stock Awards			Option Awards			Non-Equity Incentive Plan Compensation			All Other Compensation			Total
J. Scott Di Valerio Chief Executive Officer and Director		2013 2012 2011	$	695,192 498,077 470,833	$	128,269 71,446 67,800	(1)	$	1,399,970 629,949 559,925	(2)	$	512,361 272,631 238,823	(3)	$	— 313,649 256,171	(4)	$	16,523 3,692 10,077	(5)	$	2,752,315 1,789,444 1,603,629
Paul D. Davis Former Chief Executive Officer and Director		2013 2012 2011	$	181,538 795,385 741,667	$	— 156,877 142,400	(6)	$	— 1,259,955 1,154,967	(6)	$	— 545,290 492,572	(6)	$	— 751,298 538,035	(6)	$	9,982 9,892 10,051	(5)	$	191,520 3,518,697 3,079,692
Galen C. Smith Chief Financial Officer		2013	$	371,044	$	41,562	(1)	$	489,960	(2)	$	179,322	(3)	$	—	(4)	$	6,976	(5)	$	1,088,864
Donald R. Rench Chief Legal Officer, General Counsel and Corporate Secretary		2013 2012 2011	$	373,023 354,058 334,167	$	48,843 42,323 38,429	(1)	$	348,694 279,914 262,427	(2)	$	115,266 121,172 111,938	(3)	$	— 185,798 151,511	(4)	$	11,011 4,188 14,532	(5)	$	896,837 987,453 913,004
James S. Pinckney (7) Chief Strategy, Sales & Services Officer		2013	$	329,231	$	68,862	(1)	$	209,979	(2)	$	80,959	(3)	$	—	(4)	$	41,620	(8)	$	730,649
Michael J. Skinner (9) Former President, Coinstar		2013	$	326,516	$	17,961	(1)	$	232,427	(2)	$	76,837	(3)	$	179,606	(4)	$	12,096	(5)	$	845,443
Anne G. Saunders (10) Former President, Redbox		2013 2012	$	413,415 140,000	$	— 148,000	(1)	$	426,152 449,981	(2)	$	140,893 —	(3)	$	— 252,864	(4)	$	123,124 51,960	(11)	$	1,103,584 1,042,805

(1) Amount reflects the payout under the management team/individual performance component of the 2013 Incentive Compensation Plan, which is further described in “Compensation Discussion and Analysis” and, for Mr. Pinckney, amount also includes payment of a $30,000 sign on bonus, as further described in “Compensation Discussion and Analysis.”

(2) Amount reflects the aggregate grant date fair value of awards granted during the fiscal year ended December 31, 2013 computed in accordance with FASB ASC Topic 718. Amount includes the grant date fair value of performance-based restricted stock awards at target of $999,994 for Mr. Di Valerio, $349,979 for Mr. Smith, $258,710 for Mr. Rench, $149,991 for Mr. Pinckney, $172,474 for Mr. Skinner and $316,202 for Ms. Saunders, computed in accordance with FASB ASC Topic 718. At the maximum level of achievement, these values would be $1,499,991 for Mr. Di Valerio, $524,969 for Mr. Smith, $388,066 for Mr. Rench, $224,987 for Mr. Pinckney, $258,710 for Mr. Skinner and $474,303 for Ms. Saunders, as further described in “Compensation Discussion and Analysis.” Assumptions used in the calculation of these amounts are described in notes 2 and 10 to the Company’s audited financial statements included in the Annual Report.

(3) Amount reflects the aggregate grant date fair value of awards granted during the fiscal year ended December 31, 2013 computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are described in notes 2 and 10 to the Company’s audited financial statements included in the Annual Report.

(4) Amount reflects payout under the Company/line of business performance component, as applicable, of the 2013 Incentive Compensation Plan, which is further described in “Compensation Discussion and Analysis.”

(5) Represents 401(k) retirement plan matching contributions for Messrs. Di Valerio, Smith, Rench, and Skinner. For Mr. Davis, represents 401(k) retirement plan matching contribution and a tax gross-up of $5,059 for a company-paid travel benefit.

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(6) Mr. Davis retired effective March 31, 2013 and therefore did not receive equity grants in 2013 or participate in the 2013 Incentive Compensation Plan.

(7) Mr. Pinckney was hired in January 2013.

(8) Amount represents 401(k) retirement plan matching contribution and relocation expenses, as follows: $21,157 for temporary housing and rental car, $2,566 for travel expenses and a $8,573 tax gross-up associated with the relocation expenses. We value the incremental cost to us for these benefits based on the actual costs or charges incurred by us for the benefits.

(9) Mr. Skinner’s employment with the Company terminated on March 10, 2014.

(10) Ms. Saunders was President of Redbox through December 5, 2013 and her employment with the Company terminated on January 6, 2014. For information on the separation payments received by Ms. Saunders in connection with her termination, see “Potential Payments Upon Termination or Change of Control Table.”

(11) Amount represents 401(k) retirement plan matching contribution and relocation expenses, as follows: $752 for moving expenses, $80,363 for costs associated with closing of the sale of her home, and a $38,473 tax gross-up associated with the relocation expenses. We value the incremental cost to us for these benefits based on the actual costs or charges incurred by us for the benefits.

2013 Grants of Plan-Based Awards Table

The following table shows (1) equity awards granted to our Named Executive Officers under the 2011 Plan and (2) non-equity incentive plan compensation awards granted to all our Named Executive Officers under the 2013 Incentive Compensation Plan, during the fiscal year ended December 31, 2013. Mr. Davis retired effective March 31, 2013 and is not included in the table as he did not receive any equity or non-equity incentive plan awards during 2013.

Name	Grant Date		Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)					Estimated Future Payouts Under Equity Incentive Plan Awards (2)						All Other Stock Awards: Number of Shares of Stock or Units (#)		All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Option Awards ($ / Sh)		Grant Date Fair Value of Stock and Option Awards ($)
			Threshold ($)	Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)
J. Scott Di Valerio		2/15/13													7,472						399,976
		2/15/13															23,492		53.53		512,361
		2/15/13							9,340		18,681		28,021								999,994
					513,076		1,026,152
Galen C. Smith		2/15/13													2,615						139,981
		2/15/13															8,222		53.53		179,321
		2/15/13							3,269		6,538		9,807								349,979
					166,248		332,496
Donald R. Rench		2/15/13													1,681						89,984
		2/15/13															5,285		53.53		115,266
		2/15/13							2,416		4,833		7,249								258,710
					162,808		325,617
James S. Pinckney		1/31/13													1,179						59,988
		1/31/13															3,712		50.88		80,959
		2/15/13							1,401		2,802		4,203								149,991
					129,538		259,077
Michael J. Skinner		2/15/13													1,120						59,954
		2/15/13															3,523		53.53		76,836
		2/15/13							1,611		3,222		4,833								149,991
					194,379		388,758
Anne G. Saunders		2/15/13													2,054						109,951
		2/15/13															6,460		53.53		140,893
		2/15/13							2,953		5,907		8,860								316,202
					196,874		393,748

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(1) These columns show the target and maximum payouts (no threshold levels apply) under the Company performance component of the 2013 Incentive Compensation Plan and exclude the potential payouts under the management team/individual performance component, which was discretionary. Amounts were based on earnings from the standard earnings from the standard payroll calendar, which ended on December 28, 2013. For additional information regarding these awards, see “Compensation Discussion and Analysis.”

(2) These columns show the threshold, target, and maximum payouts under 2013 performance-based restricted stock awards. For additional information regarding performance-based restricted stock awards, see “Compensation Discussion and Analysis.”

Employment Agreements

J. Scott Di Valerio, former Chief Financial Officer and current Chief Executive Officer.    In January 2010, the Company entered into an employment agreement with J. Scott Di Valerio in connection with his hire as our Chief Financial Officer. Under the terms of the employment agreement, the Company agreed to pay Mr. Di Valerio an initial annual base salary of $450,000, subject to possible increase at the discretion of the Compensation Committee. Mr. Di Valerio was also eligible to receive annual cash awards based on the achievement of certain performance targets applicable to the award. Mr. Di Valerio was promoted to Chief Executive Officer effective on April 1, 2013, and was also appointed to our Board of Directors effective at that time. In connection with his promotion, in January 2013, the Company entered into an offer letter and an amended and restated employment agreement, which became effective on April 1, 2013. Under the terms of the amended and restated employment agreement, the Company agreed to pay Mr. Di Valerio an initial annual base salary of $750,000, subject to possible increase at the discretion of the Compensation Committee. Mr. Di Valerio is also eligible to receive annual cash awards based on the achievement of certain performance targets applicable to the awards. For a description of the severance provisions in Mr. Di Valerio’s amended and restated employment agreement, please refer to the section below entitled “Elements of Post-Termination Compensation and Benefits.”

Paul D. Davis, former Chief Executive Officer.    In April 2008, the Company entered into an employment agreement with Paul D. Davis in connection with his hire as our Chief Operating Officer; this agreement was amended on December 31, 2008 for compliance with Section 409A of the Code and amended and restated as of April 1, 2009 in connection with his promotion to Chief Executive Officer. Under the terms of the employment agreement, as amended and restated, the Company agreed to pay Mr. Davis an initial annual base salary of $600,000 in connection with his promotion to Chief Executive Officer, subject to possible increase at the discretion of the Compensation Committee. Mr. Davis was also eligible to receive annual cash awards based on the achievement of certain performance targets applicable to the awards. Mr. Davis retired effective March 31, 2013.

Galen C. Smith, Chief Financial Officer.    In January 2013, the Company entered into an offer letter and employment agreement with Galen C. Smith in connection with his promotion to Chief Financial Officer, which became effective on April 1, 2013. Under the terms of the employment agreement, the Company agreed to pay Mr. Smith an initial annual base salary of $400,000, subject to possible increase at the discretion of the Compensation Committee. Mr. Smith is also eligible to receive annual cash awards based on the achievement of certain performance targets applicable to the awards. For a description of the severance provisions in Mr. Smith’s employment agreement, please refer to the section below entitled “Elements of Post-Termination Compensation and Benefits.”

Michael J. Skinner, former President, Coinstar.    In June 2009, the Company entered into an employment agreement with Michael J. Skinner in connection with his promotion to President, Coin and E-Pay. Under the terms of the employment agreement, the Company agreed to pay Mr. Skinner an initial base salary of $280,000, subject to possible increase at the discretion of the Compensation Committee. Mr. Skinner was also eligible to receive annual cash awards based on the achievement of certain performance targets applicable to the awards. For a description of the severance provisions in Mr. Skinner’s employment agreement, please refer to the section below entitled “Elements of Post-Termination Compensation and Benefits.” Mr. Skinner terminated employment on March 10, 2014.

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Anne G. Saunders, former President, Redbox.    In August 2012, the Company entered into an offer letter and an employment agreement with Anne G. Saunders in connection with her hire as President, Redbox. Under the terms of the agreements, the Company agreed to pay Ms. Saunders an initial annual base salary of $400,000, subject to possible increase at the discretion of the Compensation Committee. Ms. Saunders was also eligible to receive annual cash awards based on the achievement of certain performance targets applicable to the awards. The offer letter with Ms. Saunders provided for the following benefits to assist with her relocation and transition: a sign-on bonus of $100,000 and relocation-related expenses, including reimbursement for the costs associated with closing the sale of her home; the moving of household goods (up to $100,000); temporary housing, storage of personal items, or use of a rental car (up to $30,000); and a tax gross-up associated with the relocation expenses. A portion of these relocation benefits were paid out during 2013 and 2014. For a description of the severance provisions in Ms. Saunders’s employment agreement, please refer to the section below entitled “Elements of Post-Termination Compensation and Benefits.” Ms. Saunders terminated employment on January 6, 2014. She received a separation payment in accordance with her employment agreement and up to $15,500 worth of outplacement services.

2013 Incentive Compensation Plan

For 2013, short-term incentive awards were granted to the Named Executive Officers under the 2013 Incentive Compensation Plan. The 2013 awards consisted of cash awards tied to two components—Company/line of business performance, as applicable, and management team/individual performance. For additional information regarding the 2013 Incentive Compensation Plan, see “Compensation Discussion and Analysis.”

2011 Incentive Plan

Long-term incentives awarded in 2013 to Messrs. Di Valerio, Smith, Rench, Pinckney, and Skinner and Ms. Saunders in 2013 consisted of equity compensation in the form of time-based restricted stock awards, stock options, and performance-based restricted stock awards under the 2011 Plan. Awards of time-based restricted stock vest (and are no longer subject to forfeiture) in four equal annual installments starting on the one-year anniversary of the vesting commencement date of February 24, 2013. The term of the stock options is ten years, and the options vest in four equal annual installments starting on the one-year anniversary of the vesting commencement date of February 24, 2013. The exercise price for the stock options is equal to the closing price on the date of grant. Restricted stock under the performance-based restricted stock awards is earned based on the level of achievement of specified performance goals during a two-year performance period. Once earned, 65% of the stock earned vests in February 2015 and 35% of the stock earned vests in February 2016, provided that the executive continues to provide services to us. For additional information regarding the performance-based restricted stock awards, see “Compensation Discussion and Analysis.”

Cash Compensation in Proportion to Total Compensation

The proportion of cash compensation (which includes earned salary, earned incentives from the 2013 Incentive Compensation Plan, and certain non-standard cash payments, as discussed below) compared to total compensation varies among the Named Executive Officers. Specifically, allocation among the different components of compensation varies based on the position and level of responsibility. For example, those Named Executive Officers who have a greater ability to influence Outerwall’s performance generally will have a higher level of at-risk compensation in the form of an increased percentage of total compensation in stock options, time-based restricted stock awards, and performance-based restricted stock awards. The lower the level of influence of an executive, generally, the higher the percentage of the executive’s total compensation that is in the form of cash compensation with a correspondingly lower percentage of stock options, time-based restricted stock awards, and performance-based restricted stock awards. Accordingly, executive compensation for higher-level executives generally is set to align closely with stockholders’ and Outerwall’s long-term shared interests. In 2013, the percentage of total cash compensation as compared to total compensation was as follows: Mr. Di Valerio, 30%; Mr. Davis, 100%; Mr. Smith, 38%; Mr. Rench, 47%; Mr. Pinckney, 54%; Mr. Skinner, 62%; and Ms. Saunders, 37%. As previously discussed, Mr. Davis did not receive any equity awards in 2013 due to his retirement.

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2013 Outstanding Equity Awards at Fiscal Year-End Table

The following table shows the outstanding stock options and unvested stock awards held by each Named Executive Officer as of December 31, 2013. Mr. Davis is not included in the table as he did not hold any stock options or unvested stock awards as of December 31, 2013.

Name	Option Awards										Stock Awards					Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)			Equity Incentive Plan Awards: Market or Payout Value Under Unearned Shares, Units Or Other Rights That Have Not Vested (2)
	Number of Securities Underlying Unexercised Options (#)			Number of Securities Underlying Unexercised Options (#)			Option Exercise Price (1)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested (2)
	Exercisable			Unexercisable
J. Scott Di Valerio		7,155	(3)		5,155	(3)	$	26.84		1/19/2015
		5,328	(4)		5,329	(4)	$	45.02		2/22/2021
		2,514	(5)		7,541	(5)	$	56.87		2/16/2022
		—	(6)		23,492	(6)	$	53.53		2/15/2023
												1,118	(7)
												1,777	(8)	$	119,539
												3,596	(9)	$	241,903
												2,373	(10)	$	159,632
												7,001	(11)	$	470,957
												7,472	(12)	$	502,641
																	9,340	(13)	$	628,302
Galen C. Smith		1,250	(14)		—	(14)	$	26.10		7/6/2014
		699	(5)		2,094	(5)	$	56.87		2/16/2022
		—	(6)		8,222	(6)	$	53.53		2/15/2023
												631	(15)	$	42,447
												188	(16)	$	12,647
												1,333	(8)	$	89,671
												250	(17)	$	16,818
												2,474	(18)	$	166,426
												659	(10)	$	44,331
												1,943	(11)	$	130,706
												600	(19)	$	40,362
												2,615	(12)	$	175,911
																	3,269	(13)	$	219,906
Donald R. Rench		5,690	(20)		—	(20)	$	29.10		3/19/2014
		6,591	(21)		2,197	(21)	$	29.71		2/24/2020
		2,497	(4)		2,498	(4)	$	45.02		2/22/2021
		1,118	(5)		3,351	(5)	$	56.87		2/16/2022
		—	(6)		5,285	(6)	$	53.53		2/15/2023
												488	(15)	$	32,828
												833	(8)	$	56,036
												1,686	(9)	$	113,417
												1,054	(10)	$	70,903
												3,111	(11)	$	209,277
												1,681	(12)	$	113,081
																	2,416	(13)	$	162,524
James S. Pinckney		—	(22)		3,712	(22)	$	50.88		1/31/2023
												1,179	(23)	$	79,311
																	1,401	(13)	$	94,245

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Name	Option Awards										Stock Awards					Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)			Equity Incentive Plan Awards: Market or Payout Value Under Unearned Shares, Units Or Other Rights That Have Not Vested (2)
	Number of Securities Underlying Unexercised Options (#)			Number of Securities Underlying Unexercised Options (#)			Option Exercise Price (1)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested (2)
	Exercisable			Unexercisable
Michael J. Skinner		548	(24)		—	(24)	$	30.72		6/02/2014
		—	(21)		2,273	(21)	$	29.71		2/24/2020
		—	(4)		1,998	(4)	$	45.02		2/22/2021
		838	(5)		2,513	(5)	$	56.87		2/16/2022
		—	(6)		3,523	(6)	$	53.53		2/15/2023
												505	(15)	$	33,971
												666	(8)	$	44,802
												1,348	(9)	$	90,680
												791	(10)	$	53,211
												2,333	(11)	$	156,941
												1,120	(12)	$	75,342
																	1,611	(13)	$	108,372
Anne G. Saunders		—	(6)		6,460	(6)	$	53.53		2/15/2023
												6,599	(25)	$	443,915
												2,054	(12)	$	138,173
																	2,953	(13)	$	198,648

(1) The per share option exercise price represents the closing price of the Company’s common stock on the date of grant.

(2) Market value was determined by multiplying the number of shares of stock by $67.27 (the closing price of the Company’s common stock on December 31, 2013).

(3) This option was granted on January 19, 2010 pursuant to the 1997 Plan with a term of five years, and the award vests over four years with 25% vesting one year from the grant date and 25% annually thereafter.

(4) These options were granted on February 22, 2011 pursuant to the 1997 Plan with a term of ten years, and the awards vest over four years with 25% vesting one year from the grant date and 25% annually thereafter.

(5) These options were granted on February 16, 2012 pursuant to the 2011 Plan with a term of ten years, and the awards vest over four years with 25% vesting one year from the grant date and 25% annually thereafter.

(6) These options were granted on February 15, 2013 pursuant to the 2011 Plan with a term of ten years, and the awards vest over four years with 25% vesting one year from the vesting commencement date of February 24, 2013 and 25% annually thereafter.

(7) Represent the unvested portions of awards made on January 19, 2010 pursuant to the 1997 Plan that vest 25% one year from the award date and 25% annually thereafter.

(8) Represent the unvested portions of awards made on February 22, 2011 pursuant to the 1997 Plan that vest 25% one year from the award date and 25% annually thereafter.

(9) Represent the unvested portions of performance-based restricted stock awards earned on February 16, 2012 (for 2011 performance) pursuant to the 1997 and 2011 Plans. Original target grant under 1997 Plan; above target grant awarded under 2011 Plan; each vests 33.33% on March 7, 2012 and 33.33% annually thereafter.

(10) Represent the unvested portions of awards made on February 16, 2012 pursuant to the 2011 Plan that vest 25% one year from the award date and 25% annually thereafter.

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(11) Represent the unvested portions of performance-based restricted stock awards made on February 16, 2012 pursuant to the 2011 Plan that were earned for 2012 performance at 132.75% of target and that vest 33.33% on February 16, 2013 and 33.33% annually thereafter.

(12) Represent the unvested portions of awards made on February 15, 2013 pursuant to the 2011 Plan that vest 25% one year from the vesting commencement date of February 24, 2013 and 25% annually thereafter.

(13) Represent unearned performance-based restricted stock awards made on February 15, 2013 pursuant to the 2011 Plan shown at threshold for the two-year (2013-2014) performance period. If earned, the awards will vest 65% on February 24, 2015 and 35% on February 24, 2016.

(14) This option was granted on July 6, 2009 pursuant to the 1997 Plan with a term of five years, and the award vested over four years with 25% vesting one year from the grant date and 25% annually thereafter.

(15) Represent the unvested portions of awards made on February 24, 2010 pursuant to the 1997 Plan that vest 25% one year from the award date and 25% annually thereafter.

(16) Represent the unvested portions of an award made on August 31, 2010 pursuant to the 1997 Plan that vests 25% one year from the award date and 25% annually thereafter.

(17) Represents the unvested portion of an award made on July 29, 2011 pursuant to the 2011 Plan that vests 25% one year from the award date and 25% annually thereafter.

(18) Represents the unvested portion of an award made on October 19, 2011 pursuant to the 2011 Plan that vests 25% one year from the award date and 25% annually thereafter.

(19) Represents the unvested portion of an award made on February 28, 2012 pursuant to the 2011 Plan that vests 25% one year from the award date and 25% annually thereafter.

(20) This option was granted on March 19, 2009 pursuant to the 1997 Plan with a term of five years, and the award vested over four years with 25% vesting one year from the grant date and 25% annually thereafter.

(21) This option was granted on February 24, 2010 pursuant to the 1997 Plan with a term of ten years, and the award vests over four years with 25% vesting one year from the grant date and 25% annually thereafter.

(22) This option was granted on January 31, 2013 pursuant to the 2011 Plan with a term of ten years, and the award vests over four years with 25% vesting one year from the grant date and 25% annually thereafter.

(23) Represents the unvested portion of an award made on January 31, 2013 pursuant to the 2011 Plan that vests 25% one year from the award date and 25% annually thereafter.

(24) This option was granted on June 2, 2009 pursuant to the 1997 Plan with a term of five years, and the award vested over four years with 25% vesting one year from the grant date and 25% annually thereafter.

(25) Represents the unvested portion of an award made on August 27, 2012 pursuant to the 2011 Plan that vests 25% one year from the award date and 25% annually thereafter.

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2013 Option Exercises and Stock Vested Table

The following table shows, for the fiscal year ended December 31, 2013, the options exercised and restricted stock vested for the Named Executive Officers.

Name	Option Awards				Stock Awards
	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($) (1)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($) (2)
J. Scott Di Valerio		—		—		13,899		755,888
Paul D. Davis		71,387		3,836,815		32,185		1,767,675
Galen C. Smith		1,250		68,080		4,239		240,408
Donald R. Rench		28,700		1,597,495		6,810		373,153
James S. Pinckney		—		—		—		—
Michael J. Skinner		10,591		621,384		6,091		335,869
Anne G. Saunders		—		—		2,200		137,962

(1) Based on the difference between the fair market value of Outerwall common stock at the time of exercise and the exercise price of the option.

(2) Based on the closing price of Outerwall common stock on the vesting date.

Elements of Post-Termination Compensation and Benefits

Under certain circumstances, Outerwall (or Redbox) will enter into an employment, change of control, transition, and/or retention agreement with an executive. Otherwise, executives serve at the will of the Board of Directors, enabling the Company to remove an executive whenever it is in the best interests of the Company, with full discretion on any severance package (excluding vested compensation and benefits).

Employment Agreements

Messrs. Di Valerio, Smith, and Skinner and Ms. Saunders.    As of December 31, 2013, the Company (or Redbox) had employment agreements with the Chief Executive Officer, J. Scott Di Valerio, the Chief Financial Officer, Galen C. Smith, the former President, Coinstar, Michael J. Skinner, and the former President, Redbox, Anne G. Saunders. Each of the agreements in effect as of December 31, 2013 provides that the executive will be entitled to the following benefits if the executive is terminated at any time without cause (as defined below), and, pursuant to Mr. Di Valerio’s agreement, he will also be entitled to the following benefits if he terminates his employment for good reason (as defined below):

• termination payments equal to 12 months’ annual base salary;

• any unpaid annual base salary that had accrued for services already performed as of the date of termination;

• for Ms. Saunders, any prorated cash bonus consistent with the existing program for executives (provided performance targets applicable for any such bonuses are met);

• for Messrs. Di Valerio, Smith, and Skinner, a pro rata portion of the executive’s annual bonus for the year;

• for Messrs. Di Valerio and Smith and Ms. Saunders, an amount equal to 12 months of COBRA premiums at the rate in effect on the date of termination for the executive and the executive’s spouse and dependent children; and

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• for Mr. Skinner, Company payment of the premium for the executive’s and the executive’s spouse’s and dependent children’s COBRA continuation coverage under the Company’s group health plans for a period of up to 12 months.

For Messrs. Di Valerio and Smith and Ms. Saunders, termination payments made in connection with a termination without cause, or for good reason with respect to Mr. Di Valerio, will be paid to the executive in a lump sum within ten business days after the release of claims provided in the employment agreement becomes effective, and any unpaid annual base salary will be paid at the same time such amounts would have been paid had the executive’s employment not been terminated. For Mr. Skinner, termination payments made in connection with a termination without cause will be paid to the executive in 12 equal monthly installments, beginning the month after the executive’s termination, and any unpaid annual base salary and prorated bonus will be paid at the same time such amounts would have been paid had the executive’s employment not been terminated.

For one year following the termination of employment, the executive is subject to certain noncompetition provisions. In addition, the executive is subject to certain nondisclosure and nondisparagement provisions.

For purposes of the employment agreements described above, “cause” is defined as:

• failure or refusal to carry out the lawful duties of the executive or any directions of the Board, which directions are reasonably consistent with the duties set forth in the employment agreement to be performed by the executive;

• violation by the executive of a state or federal criminal law involving the commission of a crime against Outerwall or a felony;

• current use by the executive of illegal substances; deception, fraud, misrepresentation, or dishonesty by the executive; or any act or omission by the executive that substantially impairs Outerwall’s business, goodwill, or reputation; or

• any other material violation of any provision of the employment agreement.

For purposes of Mr. Di Valerio’s employment agreement, “good reason” generally includes any of the following events, provided that within specified time frames Mr. Di Valerio provides the Company with notice, the Company fails to remedy the event or condition, and Mr. Di Valerio actually terminates employment:

• a material decrease in the executive’s annual base salary;

• a material decrease in the executive’s authority, duties, or responsibilities;

• a relocation of the executive’s principal place of employment to a location more than 50 miles away; or

• any other material breach of the agreement.

Change of Control Agreements

Mr. Di Valerio.    As of December 31, 2013, the Company had a change of control agreement with Mr. Di Valerio that was entered into in conjunction with the executive’s employment agreement described above. The change of control agreement provides that, following a change of control of the Company, the executive’s authority, duties, and responsibilities will be at least reasonably commensurate with the most significant of those held, exercised, and assigned at any time during the 90-day period immediately preceding the date of the change of control. In addition, the executive will be entitled to continued compensation and benefits at levels comparable to those prior to the change of control and reimbursement for all reasonable employment expenses.

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If a change of control occurs during the period beginning on the date of the agreement and ending on the date two years following notice from the Company that the Company intends to terminate the agreement, then the executive will be eligible to receive the following benefits if the Company terminates his employment other than for cause (as defined above in his employment agreement) or if the executive terminates his employment for good reason (as defined below):

• the executive’s annual base salary through the date of termination;

• a prorated bonus calculated as the product of (a) the executive’s annual bonus with respect to the fiscal year in which the date of termination occurs and (b) a fraction, the numerator of which is the number of days in the current fiscal year through the date of termination and the denominator of which is 365;

• any compensation previously deferred (together with any accrued interest or earnings thereon);

• any accrued but unpaid vacation pay; and

• an amount as separation pay equal to the executive’s annual base salary.

Payments for base salary through the date of termination, the prorated bonus, and any accrued but unpaid vacation will be paid in a lump sum within 30 days of the date of termination. Payments of deferred compensation will be paid in accordance with the provisions of the plan under which the compensation was deferred. Payments for the separation pay will be paid in 12 equal monthly installments, beginning the month after termination. If the executive’s employment is terminated by reason of death or total disability, the executive (or the executive’s estate or beneficiary, as applicable in the case of the executive’s death) will receive the executive’s annual base salary through the date of termination, the executive’s prorated bonus (as described above), any compensation previously deferred, and any accrued but unpaid vacation pay. The change of control agreement does not include any provisions relating to the acceleration of equity awards in the event of a change of control. Equity award acceleration in the event of a change of control is discussed below under “Change of Control Provisions for Equity Awards.”

Messrs. Pinckney, Rench, Skinner, and Smith and Ms. Saunders.    As of December 31, 2013, the Company had change of control agreements with Messrs. Pinckney, Rench, Skinner, and Smith and Ms. Saunders. Under the terms of the change of control agreements, for two years following a change of control (the “Post-Change of Control Period”) of the Company, the executive’s authority, duties, and responsibilities will be at least reasonably commensurate with the most significant of those held, exercised, and assigned at any time during the 90-day period immediately preceding the date of the change of control. During the Post-Change of Control Period, the executive will be entitled to continued compensation and benefits at levels comparable to those prior to the change of control and reimbursement for all reasonable employment expenses.

If at any time during the Post-Change of Control Period the Company terminates the executive’s employment without cause (as defined below), or the executive terminates employment with good reason (as defined below), the executive will be entitled to:

• the same benefits as set forth above for Mr. Di Valerio; and

• Company payment of the premiums for the executive’s and the executive’s spouse’s and dependent children’s COBRA continuation coverage under the Company’s group health plans for a period of up to 12 months.

Payments for base salary through the date of termination, the prorated bonus, and any accrued but unpaid vacation pay will be paid in a lump sum within 30 days of the date of termination. Payments of deferred compensation will be paid in accordance with the provisions of the plan under which the compensation was

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deferred. Payments for the separation pay will be paid in 12 equal monthly installments, beginning the month after termination. If the executive’s employment terminates by reason of death or total disability during the Post-Change of Control Period, the executive (or the executive’s estate or beneficiary, as applicable in the case of death) will receive the executive’s annual base salary through the date of termination, a prorated bonus (as described above), any compensation previously deferred, and any accrued but unpaid vacation pay. Similar to the agreement with Mr. Di Valerio, the change of control agreements with Messrs. Pinckney, Rench, Skinner, and Smith and Ms. Saunders do not include any provisions relating to the acceleration of equity awards in the event of a change of control. Equity award acceleration in the event of a change of control is discussed below under “Change of Control Provisions for Equity Awards.”

For purposes of each of the change of control agreements for Messrs. Pinckney, Rench, Skinner, and Smith and Ms. Saunders, “cause” is defined as:

• failure or refusal to carry out the lawful duties of the executive or any directions of the Board, which directions are reasonably consistent with the duties to be performed by the executive;

• violation by the executive of a state or federal criminal law involving the commission of a crime against Outerwall or a felony;

• current use by the executive of illegal substances; deception, fraud, misrepresentation, or dishonesty by the executive; or any act or omission by the executive that substantially impairs Outerwall’s business, goodwill, or reputation; or

• any material violation of the confidentiality, noncompetition, and/or nonsolicitation provisions to which the executive is bound.

For purposes of all the change of control agreements, “good reason” generally includes any of the following events, provided that within specified time frames the executive provides the Company with notice, the Company fails to remedy the event or condition, and the executive actually terminates employment:

• a decrease in the executive’s annual base salary;

• a decrease in the executive’s authority, duties, or responsibilities;

• a relocation of the executive’s principal place of employment more than 50 miles away;

• with respect to Mr. Di Valerio, the failure of the Company to comply with and satisfy the assignment provisions in the applicable employment agreement, subject to certain notice requirements; or

• any other material breach of the executive’s change of control agreement or employment agreement, as applicable.

For purposes of all 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;

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• consummation of a reorganization, merger, or consolidation approved by the stockholders; or

• consummation of a complete liquidation, dissolution, or the sale or other disposition of all or substantially all of the assets approved by the stockholders.

Change of Control Provisions for Equity Awards

Change of Control Provisions in the 1997 Plan.    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 Outerwall:

• 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.

Change of Control Provisions in the 2011 Plan.    Under the 2011 Plan, unless the plan administrator determines otherwise in the instrument evidencing an award or in a written employment, services, or other agreement between a participant and the Company or a related company, in the event of a change of control (as defined below):

• If the change of control is a company transaction in which awards, other than performance shares and performance units, could be converted, assumed, substituted for, or replaced by the successor company, then, to the extent that the successor company converts, assumes, substitutes for, or replaces such awards, the vesting restrictions and forfeiture provisions applicable to such awards will not be accelerated or lapse, and all such vesting restrictions and forfeiture provisions will continue with respect to any shares of the successor company or other consideration that may be received with respect to such awards. To the extent such outstanding awards are not converted, assumed, substituted for or replaced by the successor company, such awards will become fully vested and exercisable or payable, and all applicable restrictions or forfeiture provisions will lapse, immediately prior to the change of control. Such awards will then terminate at the effective time of the change of control.

• If the change of control is not a company transaction in which awards, other than performance shares and performance units, could be converted, assumed, substituted for, or replaced by the successor company, all outstanding awards, other than performance shares and performance units, will become fully vested and exercisable or payable, and all applicable restrictions or forfeiture provisions will lapse, immediately prior to the change of control. Such awards will then terminate at the effective time of the change of control.

• All performance shares and performance units earned and outstanding as of the date the change of control occurs and for which the payout level has been determined will be payable in full in accordance with the payout schedule included in the instrument evidencing the award. Any remaining outstanding performance shares or performance units for which the payout level has not been determined will be prorated at the target payout level up to and including the date of the change of control and will be payable in accordance with the payout schedule included in the instrument evidencing the award.

• The Compensation Committee may in its discretion instead provide that a participant’s outstanding awards will terminate in exchange for a cash payment.

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Unless the Compensation Committee determines otherwise with respect to an award at the time it is granted or unless otherwise defined for purposes of an award in a written employment, services, or other agreement between a participant and the Company or a related company, a “change of control” of the Company for purposes of the 2011 Plan generally means the occurrence of any of the following events:

• an acquisition by any individual, entity, or group of beneficial ownership of 20% or more, if not approved in advance by a majority of the incumbent Board, or 33% or more, if approved in advance by a majority of the incumbent Board, of either (a) the then outstanding shares of common stock or (b) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (generally excluding any acquisition directly from the Company, any acquisition by the Company, any acquisition by any employee benefit plan of the Company or a related company, or an acquisition pursuant to certain related party transactions);

• a change in the composition of the Board such that the incumbent Board members cease to constitute at least a majority of the Board (not including directors whose election, or nomination for election by stockholders, was approved by a majority of the incumbent Board); or

• consummation of a “company transaction,” which for purposes of the 2011 Plan is generally defined as a merger or consolidation, a sale of at least 60% of the Company’s outstanding voting securities, or a sale, lease or other transfer of all or substantially all of the assets of the Company, unless (a) after such transaction the beneficial owners of common stock and voting securities immediately prior to the transaction retain at least 60% of such common stock and voting securities of the company resulting from such transaction, (b) no person beneficially owns 33% or more of the then outstanding common stock or voting securities of the company resulting from such transaction, and (c) at least a majority of the board of directors of the company resulting from such transaction were incumbent directors of the Company prior to such transaction.

If the Company dissolves or liquidates, unless the Compensation Committee determines otherwise, outstanding awards will terminate immediately prior to such dissolution or liquidation.

Awards to Executives Under the 1997 Plan and 2011 Plan.    As of December 31, 2013, the Compensation Committee had granted stock options and restricted stock awards under the 1997 Plan to all of our Named Executive Officers other than Ms. Saunders and Mr. Pinckney and under the 2011 Plan to all of our Named Executive Officers. The awards granted through December 31, 2013 provide for accelerated vesting upon a merger, reorganization, sale of substantially all of the assets of Outerwall, or a change of control (as defined above), as follows:

• Mr. Di Valerio.    Unvested options granted in or before February 2010 fully accelerate in vesting, and the unvested time-based restricted stock awards are no longer subject to forfeiture. In March 2010, we adopted double-trigger arrangements for new equity awards provided to the executive under the 1997 Plan, and awards under the 2011 Plan include similar provisions. Under the double-trigger arrangements, options accelerate in vesting and, with respect to the time-based and earned performance-based restricted stock awards, are no longer subject to forfeiture, if a successor company does not assume or substitute such awards. In the event that the awards are assumed or substituted for and the executive’s employment or service relationship is terminated in connection with a change of control or within two years of the transaction without cause or by the executive for good reason, 100% of the options automatically vest and, with respect to the time-based and earned performance-based restricted stock awards, are no longer subject to forfeiture. For purposes of these awards, “cause” and “good reason” are defined below.

• Messrs. Pinckney, Rench, Skinner, and Smith and Ms. Saunders.    Unvested options accelerate in vesting and, with respect to the unvested time-based and earned performance-based restricted stock awards, are no longer subject to forfeiture, if a successor company does not assume or substitute such

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awards. For awards granted before February 2013, in the event the awards are assumed or substituted for and the executive’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 automatically vest and, with respect to the time-based and earned performance-based restricted stock awards, are no longer subject to forfeiture. For awards granted after February 1, 2013 in the event the awards are assumed or substituted for and the executive’s employment or service relationship is terminated in connection with a change of control or within two years of the transaction without cause or by the executive for good reason, 100% of the unvested portions of the options automatically vest and, with respect to the time-based and earned performance-based restricted stock awards, are no longer subject to forfeiture. For purposes of these awards, “cause” and “good reason” are defined below.

Definitions of “Cause” and “Good Reason” Under the 1997 Plan and 2011 Plan.    For purposes of the 1997 Plan, “cause” is defined as dishonesty, fraud, misconduct, unauthorized use or disclosure of confidential information or trade secrets, or conviction or confession of a crime punishable by law (except minor violations), in each case as determined by the plan administrator, whose determination will be conclusive and binding.

For purposes of the 2011 Plan, unless otherwise defined in the instrument evidencing an award or in a written employment, services, or other agreement between a participant and the Company or a related company, “cause” is defined as dishonesty, fraud, serious or willful misconduct, unauthorized use or disclosure of confidential information or trade secrets, violation of a state or federal criminal law involving the commission of a crime against the Company or a felony, current use of illegal substances, or any act or omission that substantially impairs the Company’s business, goodwill, or reputation, in each case as determined by the Company’s chief human resources officer or other person performing that function or, in the case of directors and executives, the Compensation Committee, whose determination will be conclusive and binding.

For purposes of the 1997 Plan and 2011 Plan, “good reason” is defined as the occurrence of any of the following events or conditions and the failure of the successor company to cure any such event or condition within 30 days after receipt of written notice from the executive:

• a change in the executive’s status, position, or responsibilities (including reporting responsibilities) that, in the executive’s reasonable judgment, represents a substantial reduction in the status, position, or responsibilities as in effect immediately prior thereto; the assignment to the executive of any duties or responsibilities that, in the executive’s reasonable judgment, are materially inconsistent with such status, title, position, or responsibilities; or any removal of the executive from or failure to reappoint or reelect the executive to any of such positions, except in connection with the termination of the executive’s employment for cause, as a result of his or her disability or death, or by the executive other than for good reason;

• a reduction in the executive’s annual base salary;

• the successor company’s requiring the executive (without the executive’s consent) to be based at any place outside a 50-mile radius of his or her place of employment prior to the transaction, except for reasonably required travel on the successor company’s business that is not materially greater than such travel requirements prior to the transaction;

• the successor company’s failure to (a) continue in effect any material compensation or benefit plan (or the substantial equivalent thereof) in which the executive was participating at the time of the transaction or (b) provide the executive with compensation and benefits substantially equivalent (in terms of benefit levels and/or reward opportunities) to those provided for under each material executive benefit plan, program, and practice as in effect immediately prior to the transaction;

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• any material breach by the successor company of its obligations to the executive under the 1997 Plan or 2011 Plan, as applicable, or any substantially equivalent plan of the successor company; or

• any purported termination of the executive’s employment or service relationship for cause by the successor company that is not in accordance with the definition of cause under the 1997 Plan or 2011 Plan, as applicable.

Potential Payments Upon Termination or Change of Control Table

The following table shows the estimated incremental compensation for the Named Executive Officers as of December 31, 2013 in the event a termination or change of control had occurred on that date. The table does not include benefits generally available to all employees or payments and benefits that the Named Executive Officers would have already earned during their employment with us whether or not a termination or change of control event had occurred. Actual amounts payable can only be determined at the time of termination or change of control. Information for Messrs. Davis and Skinner and Ms. Saunders, whose employment with the Company has terminated, is provided in the narrative following the table.

Name	Benefit	Before Change  of Control Termination Without Cause  or for Good Reason		Change of Control (1)
J. Scott Di Valerio	Cash Severance (2)	$	750,000	$	750,000
	Restricted Stock Acceleration (3)		—		1,569,880
	Stock Option Acceleration (4)		—		728,193
	Health and Benefits (5)		21,124		—
	Total	$	771,124	$	3,048,073
Galen C. Smith	Cash Severance (2)	$	400,000	$	400,000
	Restricted Stock Acceleration (3)		—		719,319
	Stock Option Acceleration (4)		—		134,748
	Health and Benefits (5)		19,978		19,978
	Total	$	419,978	$	1,274,045
Donald R. Rench	Cash Severance (2)	$	—	$	372,750
	Restricted Stock Acceleration (3)		—		595,542
	Stock Option Acceleration (4)		—		245,566
	Health and Benefits (5)		—		19,978
	Total	$	—	$	1,233,836
James S. Pinckney	Cash Severance (2)	$	—	$	350,000
	Restricted Stock Acceleration (3)		—		79,311
	Stock Option Acceleration (4)		—		60,840
	Health and Benefits (5)		—		13,151
	Total	$	—	$	503,302

(1) Except for restricted stock and stock option acceleration, the amounts in this column assume termination of employment in connection with, or within a designated period after, a change of control.

(2) Amount reflects cash severance of one year’s annual base salary for the executive as of December 31, 2013.

(3) Calculated by multiplying the number of accelerated shares of restricted stock by $67.27 (the closing price of the Company’s common stock on December 31, 2013). For purposes of the amounts reflected in the “Change of Control” column of the table, the performance-based restricted stock awards that were granted in 2013 for the 2013-2014 performance period are not reflected as they would have been forfeited per the

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terms of the awards, and we have assumed that all other awards accelerated in full, either because the surviving company refused to assume or substitute awards or, with respect to awards under the 2011 Plan, because the change of control was not a company transaction.

(4) Calculated by multiplying the number of shares underlying stock options subject to acceleration by $67.27 (the closing price of the Company’s common stock on December 31, 2013) less the per share exercise price of the stock option grants. For purposes of the amounts reflected in the “Change of Control” column of the table, we have assumed that the grants accelerated in full either because the surviving company refused to assume or substitute grants or, with respect to the grants under the 2011 Plan, because the change of control was not a company transaction.

(5) Amount reflects the payment of COBRA premiums for 12 months following termination.

Actual Termination of Employment for Messrs. Davis and Skinner and Ms. Saunders

Mr. Davis retired on March 31, 2013 and Mr. Skinner’s employment terminated on March 10, 2014. Neither Mr. Davis nor Mr. Skinner received any incremental compensation as a result of his termination.

Ms. Saunders’s employment with the Company terminated on January 6, 2014. She received a separation payment of $433,110, including a payment of $21,110 for 12 months of COBRA premiums, all in accordance with her employment agreement, plus up to $15,500 worth of outplacement services.

POLICIES AND PROCEDURES FOR THE REVIEW AND APPROVAL OR RATIFICATION OF

TRANSACTIONS WITH RELATED PERSONS

Policies and Procedures for the Review and Approval or Ratification of Transactions With Related Persons

Our Board of Directors has adopted a written policy for the review and approval or ratification of related person transactions. Under the policy, our directors and executive officers and the beneficial owners of 5% of our common stock or other voting securities are expected to disclose to our General Counsel the material facts of any transaction that could potentially be considered a related person transaction promptly on gaining knowledge that the transaction may occur or has occurred. The Audit Committee is authorized to administer this policy, and may amend, modify, and interpret this policy, and take such other action in connection with the administration of the policy, as it deems necessary or desirable; provided, however, any material amendments or modifications to this policy will be recommended to the full Board for its review and approval.

A related person transaction generally is defined as any transaction required to be disclosed under the SEC’s related person transaction disclosure requirement of Item 404(a) of Regulation S-K.

Any potential related person transaction reported to or otherwise made known to the General Counsel is reviewed according to the following procedures:

• If the General Counsel determines that disclosure of the transaction in our annual proxy statement or annual report on Form 10-K is not required under the SEC’s related person transaction requirement, the transaction will be deemed approved and will be reported to the Audit Committee at its next scheduled meeting.

• If disclosure of the transaction in our annual proxy statement or annual report on Form 10-K is required under the SEC’s related person transaction requirement, the General Counsel will submit the transaction to the chairperson of the Audit Committee, who will review and, if authorized, will determine whether to approve or ratify the transaction. The chairperson is authorized to approve or ratify any related person transaction involving an aggregate amount of less than $1 million or when it would not be practicable in the judgment of the chairperson and General Counsel to wait for the next Audit Committee meeting to review the transaction.

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• If the transaction is outside the chairperson’s authority, the chairperson will submit the transaction to the Audit Committee for review and approval or ratification.

• If the transaction to be reviewed and acted upon by the Audit Committee involves a member of the Audit Committee (including the chairperson), the involved member shall recuse himself or herself from deliberations related to the transaction, and the other members of the Audit Committee shall take appropriate action.

When determining whether to approve or ratify a related person transaction, the chairperson of the Audit Committee or the Audit Committee, as applicable, will review relevant facts regarding the related person transaction, including:

• the extent of the related person’s interest in the transaction;

• whether the terms are comparable to those generally available in arm’s-length transactions; and

• whether the related person transaction is consistent with the best interests of the Company.

If any related person transaction is ongoing or is part of a series of transactions, the chairperson or the Audit Committee, as applicable, may establish guidelines as necessary to appropriately review the ongoing transaction. After initial approval or ratification of the transaction, the chairperson or the Audit Committee, as applicable, will review the transaction on a regular basis (at least annually).

If any related person transaction is not approved or ratified, the Audit Committee may take such action as it may deem necessary or desirable in the best interests of the Company and its stockholders.

ADDITIONAL INFORMATION

Code of Conduct and Code of Ethics

Outerwall’s Board of Directors has adopted a Code of Ethics that applies to its Chief Executive Officer, Chief Financial Officer, principal accounting officer, and controller (or persons performing similar functions) and a Code of Conduct that applies to all directors, officers, and employees of the Company. A copy of each is available on our website at ir.outerwall.com. Substantive amendments to and waivers from either regarding executive officers and directors, if any, will be disclosed on the Investor Relations section of Outerwall’s website.

List of Stockholders of Record

In accordance with Delaware law and our Bylaws, a list of the names of our stockholders of record entitled to vote at the Annual Meeting will be available for ten days prior to the Annual Meeting for any purpose germane to the meeting, between the hours of 9:00 a.m. and 4:30 p.m. local time at our principal executive offices at 1800 114th Avenue S.E., Bellevue, Washington 98004. If you would like to view the stockholder list, please call our Investor Relations Department at (425) 943-8242. This list will also be available at the Annual Meeting.

Submission of Stockholder Proposals for Inclusion in Next Year’s Proxy Statement

To be considered for inclusion in next year’s proxy statement and form of proxy, stockholder proposals for the 2015 Annual Meeting of Stockholders must be received at our principal executive offices no later than the close of business on December 31, 2014. As prescribed by current Rule 14a-8(b) under the Exchange Act, a stockholder must, among other things, have continuously held at least $2,000 in market value, or 1%, of our outstanding stock for at least one year by the date of submitting the proposal, and the stockholder must continue to own such stock through the date of the annual meeting.

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For any proposal that is not submitted for inclusion in next year’s proxy statement, but is instead sought to be presented directly at the 2015 Annual Meeting of Stockholders, stockholders are advised to review our Bylaws as they contain requirements with respect to advance notice of stockholder proposals not intended for inclusion in our proxy statement and director nominations. To be timely, a stockholder’s notice must be delivered to or mailed and received at our principal executive offices not earlier than the close of business on the 90th day and not later than the close of business on the 60th day prior to the first anniversary of our 2014 Annual Meeting of Stockholders. Accordingly, any such stockholder proposal must be received between the close of business on March 13, 2015 and the close of business on April 13, 2015. A copy of the pertinent Bylaw provisions is available on request to the following address: Corporate Secretary, Outerwall Inc., 1800 114th Avenue S.E., Bellevue, Washington 98004. For such proposals or nominations that are timely filed, we retain discretion to vote proxies we receive, provided that (i) we include in our proxy statement advice to stockholders on the nature of the proposal and how we intend to exercise our voting discretion and (ii) the proponent does not issue a separate and appropriate proxy statement.

Consideration of Stockholder-Recommended Director Nominees

The Nominating Committee will consider director nominee recommendations submitted by stockholders. Stockholders who wish to recommend a director nominee should submit their suggestions in writing to the following address: Chairperson of Nominating and Governance Committee, Attn: Corporate Secretary, Outerwall Inc., 1800 114th Avenue S.E., Bellevue, Washington 98004.

As required by our Bylaws, stockholders should include the name, biographical information, and other relevant information relating to the recommended director nominee, including, among other things, information that would be required to be included in the proxy statement filed in accordance with applicable rules under the Exchange Act, the written consent of the director nominee to be named as a nominee and to serve as a director if elected, and a statement whether such person, if elected, intends to tender an irrevocable resignation that will be effective upon (i) the failure to receive the required vote at the next meeting at which such person would face reelection and (ii) the acceptance of such resignation by a committee of our independent directors. Evaluation of any such recommendations is the responsibility of the Nominating Committee. In the event of any stockholder recommendations, the Nominating Committee will evaluate the persons recommended in the same manner as other candidates.

Communications With the Board of Directors

Stockholders and other stakeholders may contact the Board of Directors as a group or any individual director by sending written correspondence to the following address: Board of Directors—Outerwall Inc., Attn: General Counsel, 1800 114th Avenue S.E., Bellevue, Washington 98004 or by email at AskBoard@Outerwall.com. Each communication should clearly specify the name(s) of the group of directors or the individual director to whom the communication is addressed.

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OUTERWALL INC. P.O. BOX 91258 BELLEVUE, WA 98009	VOTE BY INTERNET - www.proxyvote.com
	Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
	ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
	VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
	VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

M75234-P51950	KEEP THIS PORTION FOR YOUR RECORDS
	DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

OUTERWALL INC.
	The Board of Directors recommends a vote “FOR” each director nominee under item 1.
	1.	To elect the following two director nominees to serve for a term of three years until Outerwall’s 2017 Annual Meeting of Stockholders.
				For	Against	Abstain
		Nominees:
		1a.   David M. Eskenazy		¨	¨	¨
		1b.   Robert D. Sznewajs		¨	¨	¨
	The Board of Directors recommends a vote “FOR” proposals 2 and 3.								For	Against	Abstain
	2.	Advisory resolution to approve the compensation of Outerwall’s Named Executive Officers.							¨	¨	¨
	3.	Ratification of appointment of KPMG LLP as Outerwall’s independent registered public accounting firm.							¨	¨	¨
	NOTE: THE PROXIES SHALL HAVE DISCRETIONARY AUTHORITY TO VOTE UPON ANY AND ALL OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
	Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
	Signature [PLEASE SIGN WITHIN BOX]		Date				Signature (Joint Owners)	Date

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.

M75235-P51950

OUTERWALL INC. Annual Meeting of Stockholders June 12, 2014 10:00 AM
This proxy is solicited by the Board of Directors
	The undersigned hereby appoints Nelson C. Chan and Donald R. Rench, and each of them, as proxies of the undersigned, with the full power of substitution, to vote all shares of Outerwall Inc. held of record by the undersigned on April 17, 2014, at the Annual Meeting of Stockholders of Outerwall Inc. to be held at Hotel Bellevue, located at 11200 Southeast Sixth Street, Bellevue, Washington 98004, on Thursday, June 12, 2014 at 10:00 a.m., local time, and at any and all postponements, continuations, and adjournments thereof, with all powers that the undersigned would possess if personally present, upon and in respect of the matters listed on the reverse side and in accordance with the instructions designated on the reverse side, with discretionary authority as to any and all other matters that may properly come before the meeting including matters incidental to the conduct of the meeting. IMPORTANT- PLEASE DATE AND SIGN THE REVERSE SIDE UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS ON ALL PROPOSALS REFERRED TO ON THE REVERSE SIDE.
	Continued and to be signed on reverse side