UK Share Save Plan - Starbucks Corp.
RULES OF THE
STARBUCKS CORPORATION
UK SHARE SAVE PLAN
Adopted by the Board of Directors of Starbucks Corporation
on 14 September 1999
Amended on 5 August 2002
Approved by the Inland Revenue 5 August 2002
under reference SRS 2363
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RULES OF THE STARBUCKS CORPORATION UK SHARE SAVE PLAN
1 DEFINITIONS
1.1 In these Rules the following words and expressions shall have the
following meanings:
'Act' the Income and Corporation Taxes Act 1988
'Adoption Date' the date on which the Plan was adopted by the Board.
'Appropriate Period' the meaning given in paragraph 15(2) of Schedule 9.
'Associated Company' the meaning that the expression bears in paragraph 23
of Schedule 9 by virtue of Section 187(2) of the Act.
'Board' the board of directors of the Company or a duly
constituted committee thereof.
'Bonus' the terminal bonus payable to an Option holder under
the Savings Contract after completing the payment of
36 monthly contributions.
'Bonus Date' the earliest date on which the Bonus is payable.
'Company' Starbucks Corporation incorporated under the laws of
the State of Washington, USA, whose principal office
is at 2401 Utah Avenue South, Seattle, WA 98134, USA
by whatever name known from time to time.
'Control' has the same meaning as in Section 840 of the Act.
'Date of Grant' the date on which an application for an Option is
accepted by the Company in accordance with Rule 4.
'Eligible Employee' for an invitation pursuant to Rule 2, any
Employee who was an Employee on the Qualifying Date
for that invitation who is chargeable to tax in
respect of his office or employment under Case I of
Schedule E.
'Employee' subject to Rule 6.3, any employee or director of any
Participating Company.
'Market Value' on any day the regular trading session closing price
of a Share as reported
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by the Nasdaq Stock Market, Inc. provided that Inland
Revenue Shares Valuation has agreed to this in
advance, or otherwise the market value of a Share
determined in accordance with the provisions of Part
VIII of the Taxation of Chargeable Gains Act 1992 and
agreed on or before that day for the purposes of the
Plan with Inland Revenue Shares Valuation.
'Option' a right to acquire Shares granted (or to be granted)
in accordance with these Rules.
'Participating Companies' any company which is both under the Control of the
Company and a subsidiary of the Company within the
meaning of Section 736 of the Companies Act 1985 and
which has been nominated by the Board as a
Participating Company.
'Plan' the savings-related share option scheme constituted
and governed by these Rules as from time to time
amended.
'Qualifying Date' For any invitation pursuant to Rule 2, such
date as is determined by the Board, which shall be no
earlier than six months before the date when the
invitation is sent.
'Savings Contract' a contract under a certified contractual
savings scheme, within the meaning of Section 326 of
the Act, and which has been approved by the Inland
Revenue for the purposes of Schedule 9.
'Schedule 9' Schedule 9 to the Act.
'Share' a share of common stock of the Company which
satisfies the conditions specified in paragraphs 10
to 14 inclusive of Schedule 9.
'Specified Age' Age 60.
'Subscription Price' Subject to Rule 8, the price in UK Pounds at
which each Share subject to an Option may be acquired
on the exercise of that Option as determined by the
Board, being not less than the higher of:
i the par value of a Share, or
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ii 85% of the Market Value of a Share on the
trading day immediately preceding the Date
of Grant.
'Subsisting Option' an Option which has neither lapsed nor been
exercised.
1.2 Interpretations
In these Rules, except in so far as the context otherwise requires:
i words denoting the singular shall include the plural and vice
versa
ii words denoting the masculine gender shall include the feminine
gender
iii reference to any enactment shall be construed as a reference
to that enactment as from time to time amended, extended or
re-enacted.
1.3 Employee rights
Participation by an Employee in the Plan shall not form part of his
terms and conditions of employment nor entitle him to any continued
employment nor additional compensation nor damages on account of
termination of employment for any reason.
1.4 Governing law
The Plan is established under the provisions of the Act and shall in
all respects be interpreted in accordance with the Law of England and
Wales.
2 INVITATIONS TO APPLY FOR OPTIONS
2.1 On up to four occasions in each calendar year, the Board may invite all
Eligible Employees to apply for the grant of an Option.
2.2 Each invitation shall specify:
i the date, being not less than 14 days after the issue of the
invitation, by which applications must be made
ii the manner in which the Subscription Price at which Shares may
be acquired on the exercise of any Option granted in response
to an application will be determined, and
iii the maximum permitted monthly savings contribution for that
invitation, being the lesser of the maximum specified in
paragraph 24 of Schedule 9 and such sum (being a multiple of
(pound)1 and not less than (pound)5) as the Board decides
shall apply to every Eligible Employee in respect of that
invitation, and
iv the maximum permitted aggregate monthly savings contribution
under all Savings Contracts, being the maximum specified in
paragraph 24 of Schedule 9, and
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v the Date of Grant in respect of that invitation.
2.3 Each invitation shall be accompanied by a proposal form for a Savings
Contract and an application form which shall provide for the applicant
to state:
i the monthly savings contribution (being a multiple of (pound)1
and not less than (pound)5) which he wishes to make under the
Savings Contract
ii that his proposed monthly savings contribution will not exceed
the maximum permitted monthly savings contributions specified
for that invitation
iii that his proposed monthly savings contribution, when added to
any monthly savings contributions then being made under any
other Savings Contract linked to an option granted under the
Plan or any other savings-related share option scheme approved
under Schedule 9, will not exceed the maximum permitted
aggregate monthly savings contributions specified in paragraph
24 of Schedule 9
iv an authorisation for the Board or an officer of the Company
appointed by the Board to enter on the Savings Contract
proposal form such monthly savings contribution, not exceeding
the maximum stated on the application form, as shall be
determined pursuant to Rule 3 below.
2.4 Each application shall be deemed to be for an Option over the largest
whole number of Shares which can be bought at the Subscription Price
with the expected repayment under the related Savings Contract at the
Bonus Date.
3 SCALING DOWN
3.1 If the Board receives valid applications for Options over an aggregate
number of Shares which exceeds the limit determined pursuant to Rule
5.1 below in respect of that invitation, then the following steps shall
be carried out successively to the extent necessary to eliminate the
excess:
i the excess over (pound)5 of the monthly savings contribution
chosen by each applicant shall be reduced pro rata to the
extent necessary, then
ii each election for the Bonus to be included in the repayment
under the Savings Contract shall be deemed to be an election
for no Bonus to be so included, then
iii applications will be selected by lot, each based on a monthly
savings contribution of (pound)5 and the inclusion of no Bonus
in the repayment under the Savings Contract.
3.2 Each application shall be deemed to have been modified or withdrawn in
accordance with the application of the foregoing provisions and the
Board or an officer of the Company appointed by the Board shall
complete each Savings Contract proposal form to reflect any reduction
in monthly savings contributions resulting therefrom.
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4 GRANT OF OPTIONS
4.1 On a single day no later than the thirtieth day or, if Rule 3 applies,
forty-second day following the day on which invitations were issued
pursuant to Rule 2 the Board shall:
i accept all the applications from each applicant who is still
an Eligible Employee and is not precluded from participation
in the Plan by virtue of Paragraph 8 of Schedule 9; and
ii determine the number of Shares for which, pursuant to Rule 2.4
and subject to Rule 3, he is deemed to have applied; and
iii grant an Option to each such applicant over the relevant
number of Shares.
4.2 As soon as possible after Options have been granted the Company shall
issue an option certificate in respect of each Option in such form, not
inconsistent with these Rules, as the Board may determine.
4.3 No Option may be transferred, assigned or charged and any purported
transfer, assignment or charge shall cause the Option to lapse
forthwith. Each option certificate shall carry a statement to this
effect.
5 LIMITATIONS ON GRANTS
5.1 The Company may, before the Board issues invitations on any occasion,
determine a limit on the number of Shares which are to be available in
respect of that invitation in order to ensure that Shares remain
available for subsequent invitations.
5.2 No Option shall be granted to an Eligible Employee if the monthly
savings contribution under the related Savings Contract, when added to
the monthly savings contributions then being made under any other
Savings Contract, would exceed the maximum specified in Paragraph 24 of
Schedule 9.
6 EXERCISE OF OPTIONS
6.1 Subject to Rule 9 below, any Subsisting Option may be exercised in
whole or in part at any time following the earliest of the following
events:
i the relevant Bonus Date if, on the day of exercise, the Option
holder is an Employee
ii the death of the Option holder
iii the Option holder ceasing to be an Employee by reason of
injury, disability, redundancy within the meaning of the
Employment Rights Act 1996 or retirement on reaching the
Specified Age or any other age at which he is bound to retire
in accordance with the terms of his contract of employment
iv the Option holder ceasing to be an Employee by reason only
that:
a. his office or employment is in a company of which the
Company ceases to have Control, or
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b. his office or employment relates to a business or
part of a business which is transferred to a person
who is neither an Associated Company of the Company
nor a company of which the Company has Control
v the relevant Bonus Date, where an Option holder holds an
office or employment in a company which is not a Participating
Company but which is:
a. an Associated Company of the Company, or
b. a company of which the Company has Control.
6.2 An Option shall lapse on the earliest of the following events:
i except where the Option holder has died, the expiry of six
months following the Bonus Date
ii where the Option holder has died during the six months
following the Bonus Date, the first anniversary of the Bonus
Date
iii where the Option holder has died before the Bonus Date, the
first anniversary of his death
iv unless the Option holder has died, the expiry of six months
after the Option has become exercisable by virtue of Paragraph
(iii) of Rule 6.1
v the expiry of six months after the Option has become
exercisable by virtue of Paragraph (iv) of Rule 6.1
vi the expiry of any period during which the Option may be
exercised in accordance with Rule 7
vii the Option holder ceasing to be an Employee in circumstances
in which the Option does not become exercisable
viii the Option holder being adjudicated bankrupt.
6.3 No person shall be treated for the purposes of this Rule 6 as ceasing
to be an Employee until he is no longer employed by the Company, any
Associated Company of the Company or a company of which the Company has
Control.
6.4 If an Option holder continues to be employed by a Participating Company
after the date on which he reaches the Specified Age, he may exercise
any Subsisting Option within six months following that date.
7 TAKEOVERS, RECONSTRUCTIONS AND LIQUIDATIONS
7.1 If any person obtains Control of the Company as a result of making:
i a general offer to acquire the whole of the issued ordinary
share capital of the Company which is made on a condition such
that if it is satisfied the person making the offer will have
Control of the Company, or
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ii a general offer to acquire all the shares in the Company which
are of the same class as the Shares
then any Subsisting Option may be exercised within six months of the
time when the person making the offer has obtained Control of the
Company and any condition subject to which the offer is made has been
satisfied.
7.2 If under Section 425 of the Companies Act 1985 the Court sanctions a
compromise or arrangement proposed for the purposes of, or in
connection with, a scheme for the reconstruction of the Company or its
amalgamation with any other company or companies, any Subsisting Option
may be exercised within six months of the Court sanctioning the
compromise or arrangement.
7.3 If any person becomes bound or entitled to acquire shares in the
Company under Sections 428 to 430 of the said Act of 1985 any
Subsisting Option may be exercised at any time when the person remains
so bound or entitled.
7.4 If as a result of the events specified in Rules 7.1 or 7.2 a company
has obtained Control of the Company, or if a company has become bound
or entitled as mentioned in Rule 7.3, the Option holder may, by
agreement with that other company (the 'Acquiring Company'), within the
Appropriate Period, release his rights under each Subsisting Option
(the 'Old Option') in consideration of the grant to him of an option
(the 'New Option') which satisfies the conditions that it:
i is over shares in the Acquiring Company, or some other company
falling within paragraph (b) or paragraph (c) of paragraph 10
of Schedule 9, which satisfy the conditions specified in
paragraphs 10 to 14 inclusive of Schedule 9
ii is a right to acquire such number of such shares as has on
acquisition of the New Option an aggregate value equal to the
aggregate Market Value of the Shares subject to the Old Option
on its release
iii has a subscription price per share such that the aggregate
price payable on the complete exercise equals the aggregate
price which would have been payable on complete exercise of
the Old Option
iv is otherwise identical in terms to the Old Option.
The New Option shall, for all other purposes of the Plan, be treated as
having been acquired at the same time as the Old Option.
Where any New Options are granted pursuant to this Rule 7.4, Rules 7,
8, 9, 10.1 and 10.3 to 10.5 shall, in relation to the New Options, be
construed as if references to the Company and to the Shares were
references to the Acquiring Company or, as the case may be, to the
other company to whose shares the New Options relate, and to the shares
in that other company, but references to Participating Company shall
continue to be construed as if references to the Company were
references to Starbucks Corporation.
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7.5 If the Company passes a resolution for voluntary winding up, any
Subsisting Option may be exercised within six months of the passing of
the resolution.
7.6 For the purposes of this Rule 7, other than Rule 7.4, a person shall be
deemed to have obtained Control of the Company if he and others acting
in concert with him have together obtained Control of it.
7.7 The exercise of an Option pursuant to the preceding provisions of this
Rule 7 shall be subject to the provisions of Rule 9 below.
7.8 Where in accordance with Rule 7.4 Subsisting Options are released and
New Options granted the New Options shall not be exercisable in
accordance with Rules 7.1, 7.2 and 7.3 above by virtue of the event by
reason of which the New Options were granted.
7.9 For the purposes of this Rule 7 references in Rules 7.2, 7.3 and, by
extension, 7.4 to Sections 425 and 428 to 430 of the Companies Act 1985
shall be construed, where the relevant event occurs in a jurisdiction
other than that of the United Kingdom, as being references to similar
legislation acceptable to the Inland Revenue.
8 VARIATION OF SHARE CAPITAL
In the event of any variation in the share capital of the Company by
way of capitalisation or rights issue or any consolidation,
sub-division or reduction or otherwise, the number of Shares subject to
an Option and the Subscription Price for each of those Shares shall be
adjusted in such manner as the Board confirms to be fair and reasonable
provided that:
i the aggregate amount payable on the exercise of an Option in
full is neither materially changed nor increased beyond the
expected repayment under the Savings Contract at the
appropriate Bonus Date
ii the Subscription Price for a Share is not reduced below its
par value
iii no adjustment shall be made without the prior approval of the
Inland Revenue, and
iv following the adjustment the Shares continue to satisfy the
conditions specified in Paragraphs 10 to 14 inclusive of
Schedule 9.
9 MANNER OF EXERCISE OF OPTIONS
9.1 No Option may be exercised by an individual at any time when he is, or
by the personal representatives of an individual who at the date of his
death was, precluded by paragraph 8 of Schedule 9 from participating in
the Plan.
9.2 No Option may be exercised at any time when the shares which may be
acquired thereby are not Shares as defined in Rule 1.1.
9.3 An Option may only be exercised over the number of Shares which may be
purchased with the sum obtained by way of repayment under the related
Savings Contract.
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9.4 An Option shall be exercised by the Option holder, or as the case may
be his personal representatives, giving notice to the Company in
writing. The notice will state the number of Shares in respect of which
he wishes to exercise the Option and be accompanied by the appropriate
payment (which shall not exceed the sum obtained by way of repayment
under the related Savings Contract) and the relevant option
certificate. The notice will be effective on the date of its receipt by
the Company.
9.5 Shares shall be transferred pursuant to a notice of exercise within 30
days of the date of exercise. Save for any rights determined by
reference to a date prior to the date of transfer, such Shares shall
rank pari passu with the other Shares of the same class in issue at
that date of transfer.
9.6 When an Option is exercised only in part, it shall lapse to the extent
of the unexercised balance.
9.7 For the purposes of Rules 9.3 and 9.4 above, any repayment under the
Savings Contract shall exclude the repayment of any contribution the
due date for payment of which falls more than one month after the date
on which repayment is made.
10 ADMINISTRATION AND AMENDMENT
10.1 The Plan shall be administered by the Board and its decisions on all
disputes shall be final.
10.2 The Board may from time to time amend these Rules provided that:
i no amendment may materially affect an Option holder as regards
an Option granted prior to the amendment being made
ii no amendment shall have effect until approved by the Inland
Revenue.
10.3 The cost of establishing and operating the Plan shall be borne by the
Participating Companies in such proportions as the Board shall
determine.
10.4 Any notice or other communication, under or in connection with the
Plan, may be given by the Company either personally or by post and to
the Company either personally or by post. Items sent by post shall be
pre-paid and shall be deemed to have been received 72 hours after
posting.
10.5 The Company shall at all times keep available sufficient Shares to
satisfy to the fullest extent still possible the exercise of all
Options which have neither lapsed nor been fully exercised.
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