Outerwall (OUTR) Enters $50M Pre-Arranged Buyback Plan

On October 29, 2013, Outerwall Inc. (Nasdaq: OUTR) entered into a letter agreement (the “DSB Agreement”) with Wells Fargo Bank, National Association and Wells Fargo Securities, LLC as agent (collectively, “Wells Fargo”), to effect discounted share repurchases of Company common stock under current share repurchase authorizations of the Company’s Board of Directors (the “Board”). As of October 29, 2013, the Company was authorized to repurchase up to $300.4 million of its common stock. Under the DSB Agreement, the Company will pay a purchase price of $100 million to Wells Fargo on October 30, 2013. Under the terms of the DSB Agreement, the Company is expected to receive multiple interim deliveries of its common shares from Wells Fargo, with the final delivery of shares to be made by Wells Fargo prior to the end of 2013. The final number of shares that the Company will repurchase under the DSB Agreement will be determined based on a discount to the arithmetic mean of the volume-weighted average prices of the Company’s common stock for each averaging date over the course of the calculation period. The Company will be under no obligation to compensate Wells Fargo if the calculated number of shares to be repurchased at the conclusion of the calculation period is less than the number of shares previously delivered at the initial delivery dates. The Company’s outstanding shares used to calculate earnings per share will be reduced by the number of common shares repurchased pursuant to the DSB Agreement as they are delivered to the Company, and the $100 million purchase price will be recorded as a reduction in stockholders’ equity upon its payment. The DSB Agreement contains certain terms customary for agreements of this type, including provisions for adjustments upon the occurrence of certain extraordinary corporate and market events and setting forth certain circumstances under which the DSB Agreement may be modified, extended, terminated or unwound early. On October 29, 2013, the Company also adopted a pre-arranged stock trading plan for the purpose of repurchasing $50 million of the Company’s common stock in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, and the Company’s policies regarding stock transactions (the “10b5-1 Plan”). This plan has been established in accordance with current share repurchase authorizations of the Board. The 10b5-1 Plan will cover the repurchase of common shares commencing no earlier than January 2, 2014 and expiring no later than January 31, 2014. Repurchases are subject to SEC regulations as well as certain price, market volume and timing requirements specified in the 10b5-1 Plan, and may be amended or terminated under certain circumstances. Wells Fargo and its affiliates have performed, and may in the future perform, various commercial banking and other financial advisory services for the Company and its subsidiaries for which they have received, and will receive, customary fees and expenses.

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