Coinstar cautions shareholders about Shamrock, seeks support for director nominees on June 3

By Lisa Kerner

Charlotte, N.C., May 14 - Coinstar, Inc. once again asked its shareholders to support its nominees - Deborah Bevier, David Eskenazy and Robert Sznewajs - for election to the board of directors.

Dissident shareholder Shamrock Activist Value Fund is seeking the election of its nominees - Eugene I. Krieger, John M. Panettiere and Arik Ahitov - at the annual meeting on June 3.

In an open letter to stockholders, chief executive officer David W. Cole and chairman Keith D. Grinstein cited the increase in Coinstar's stock price to $36.53 on May 13 from $12.14 on July 13, 2003 as evidence management and the board are executing the company's goals.

Coinstar also reported record first-quarter results that exceeded the company's guidance and Wall Street's expectations, the letter stated.

Cole and Grinstein said Shamrock's director representatives "have overseen declining financial results and stockholder returns at most companies" where it has had board representation.

Specifically, the pair cited Shamrock's performance at Collectors Universe Inc. and iPass Inc. According to Coinstar, both companies experienced declining stock prices and operating losses.

"Shamrock is promoting the same tired ideas it has used in other proxy campaigns at public companies facing wholly different circumstances," Coinstar stated.

"While these recommendations may be appropriate for some underperforming companies, they are not applicable to Coinstar, a company that continues to execute its well-developed strategic plan, deliver strong returns to stockholders and is actively committed to strong corporate governance practices," the letter said.

In its May 13 letter to Coinstar shareholders, Shamrock said it is time for a change at the company and urged fellow shareholders to vote for its nominees at Coinstar's annual meeting.

Shamrock noted that the incumbent non-management board members collectively own only 0.12% (1.3% including options) of the Coinstar shares. Shamrock is the company's largest stockholder, owning some 13.3% of the outstanding shares.

Bellevue, Wash.-based Coinstar owns and operates self-service coin-counting machines.

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