1991 Company-Wide Stock Option Plan - Starbucks Corp.
STARBUCKS CORPORATION
1991 COMPANY-WIDE
STOCK OPTION PLAN
As Amended and Restated through November 20, 2003
1. Purpose.
The purpose of this Plan is to encourage ownership of the
common stock of Starbucks Corporation ("the Company") by all Partners of the
Company and its Subsidiaries. This Plan is intended to provide an incentive for
Partners to exert their maximum efforts to achieve the successful operation of
the Company and is intended to assist the Company in attracting and retaining
talented personnel by providing an opportunity to benefit from the increased
value of the Company, to which such Partners and new personnel have contributed.
The Plan is expected to benefit the shareholders of the Company by linking the
interests of the Company's Partners with those of its shareholders. The benefits
of this Plan are not a substitute for compensation otherwise payable to Partners
pursuant to the terms of their employment.
2. Definitions.
For purposes of the Plan:
"AGREEMENT" means the written document issued by the Company
to an Optionee evidencing the grant of Options and setting forth the terms and
conditions of such grant.
"BASE WAGES," with respect to an Eligible Partner, means all
gross actual base pay (including any applicable shift differentials), whether
paid or deferred, but not including overtime, bonuses and commissions, and shall
be calculated before deductions for amounts contributed to Company benefits
and/or long-term savings plans. "Base Wages" does not include deferred income at
payout, any awards payable under any long-term incentive plan to be adopted by
the Company, imputed income for life insurance, relocation reimbursement or
similar programs. With respect to the entire Company, "Base Wages" means the
total amount of Base Wages for all Eligible Partners at a particular time under
the Plan.
"BOARD" means the Board of Directors of the Company.
"CHANGE IN CAPITALIZATION" means any increase or reduction in
the number of Shares, or any change (including, but not limited to, a change in
value) in the Shares or exchange of Shares for a different number or kind of
shares or other securities of the Company or another corporation, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of warrants or rights or
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debentures, stock dividend, stock split or reverse stock split, cash dividend,
property dividend, combination or exchange of shares, repurchase of shares,
change in corporate structure or otherwise.
"CHANGE IN CONTROL" has the meaning set forth in Section 5.9
hereof.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means a committee, as described in Section 3.1,
that may be appointed by the Board from time to time to administer the Plan and
to perform the functions set forth herein.
"COMPANY" means Starbucks Corporation.
"DIRECTOR" means a member of the Board.
"DISABILITY" means:
(a) in the case of an Optionee whose employment
with the Company or a Subsidiary is subject to the terms of an employment
agreement between such Optionee and the Company or Subsidiary, which employment
agreement includes a definition of "Disability," the term "Disability" as used
in this Plan or any Agreement shall have the meaning set forth in such
employment agreement during the period that such employment agreement remains in
effect; and
(b) in all other cases, the term "Disability" as
used in this Plan or any Agreement shall have the same meaning as set forth
under the Company's long- term disability plan as may be amended from time to
time and in the event the Company does not maintain such a plan, a physical or
mental condition resulting from bodily injury, disease, or mental disorder which
renders the Optionee incapable of continuing his or her usual and customary
employment with the Company or Subsidiary, as the case may be.
"ELIGIBLE PARTNER" means any regular, full-time or part-time
Partner who (i) was a Partner as of April 1 in the fiscal year of the Company
prior to the date of the Option grant, (ii) is a Partner on the date of the
Option grant, and (iii) who has been paid for at least 500 hours (which equates
to approximately twenty hours per week on average) between April 1 and the last
day of the prior fiscal year or between the first day of the prior fiscal year
and March 31 of the fiscal year prior to the date of the Option grant. Officers
and members of the Boards of Directors of the Company or its Subsidiaries shall
not be eligible to participate in this Plan. In addition, none of the following
individuals shall be an Eligible Partner:
(1) A Partner covered by a collective bargaining
agreement, unless the collective bargaining agreement
applicable to the Partner specifically provides for
participation in this Plan;
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(2) A leased employee;
(3) A temporary Partner as defined by the Company's human
resources policy; or
(4) Individuals who are not designated as "employees" in
the Company's or applicable Subsidiary's employment
records. For example, individuals engaged to perform
services in a relationship which the Company or
Subsidiary characterizes as that of an "independent
contractor" with respect to the Company or Subsidiary
shall not be Eligible Partners. Individuals described
in this paragraph shall not be Eligible Partners for
the period they are not characterized as employees in
the Company or applicable Subsidiary's employment
records, even if a determination is made by the
Internal Revenue Service, the United States
Department of Labor, another governmental agency, a
court or other tribunal that the individual is an
"employee" of the Company or Subsidiary during that
period, for purposes of pertinent sections of the
Code or for any other purpose. An individual who has
not been designated an Eligible Partner on account of
this paragraph may, in the sole discretion of the
Committee, be designated an Eligible Partner
effective as of the date as of which the Company or
applicable Subsidiary characterizes the individual as
an "employee" in their employment records.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FAIR MARKET VALUE" on any date means the closing sale price
of a Share on the principal national securities exchange or stock market on
which such Shares are listed or admitted to trading. If there are no quoted
prices with respect to Shares for such date, the Fair Market Value shall be the
closing sale price per Share on the immediately previous business day on which
such quotations are available and, if the Shares are no longer publicly-traded,
the Fair Market Value shall be the value established by the Board in good faith.
"OFFICER" means a Partner serving in a position of vice
president or higher of the Company or its Subsidiaries.
"OPTION" means an option to purchase a Share under the Plan;
no Option granted under the Plan shall be an incentive stock option within the
meaning of Section 422 of the Code.
"OPTIONEE" means a person to whom an Option has been granted
under the Plan.
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"PARTNER" means any individual serving as an employee of the
Company or any of its Subsidiaries.
"PERSON" means a natural person, company, government or
political subdivision, agency or instrumentality of a government.
"PLAN" means the Starbucks Corporation 1991 Company-Wide Stock
Option Plan, including any country-specific rules approved and adopted by the
Board or the Committee, as such plan and country-specific rules may be amended
and restated from time to time.
"RETIREMENT" means the attainment of age 55 and ten (10) years
of credited service with the Company, as determined by the Board or Committee in
its sole discretion.
"SHARES" means the shares of common stock, $.001 par value per
share, of the Company.
"SUBSIDIARY" means any corporation or other Person, of which a
majority of its voting equity securities or equity interest is owned directly or
indirectly by the Company.
3. Administration.
3.1. The Plan shall be administered by the Board, provided
however that the Board may appoint a Committee to administer the Plan,
consisting of not less than three members of the Board.
3.2. Authority; Powers. Subject to the express terms and
conditions set forth herein, the Board (or the Committee, if so appointed) shall
have the power from time to time to:
(a) determine those Eligible Partners to whom
Options shall be granted under the Plan, the number of Options to be granted and
the terms and conditions of such Option grants, including the exercise price per
Option;
(b) construe and interpret the Plan and the
Options granted hereunder and to establish, amend and revoke rules and
regulations for the administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable so that the Plan complies with applicable
law, and otherwise to make the Plan fully effective. All decisions and
determinations by the Board or the Committee in the exercise of this power shall
be final, binding and conclusive upon the Company, its Subsidiaries, the
Optionees, and all other persons having any interest herein;
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(c) exercise its discretion with respect to the
powers and rights granted to it as set forth in the Plan;
(d) generally exercise such powers and to
perform such acts as are deemed necessary or advisable to promote the best
interests of the Company with respect to the Plan; and
(e) delegate to an administrator or
administrators those clerical and administrative functions which can be legally
delegated to such administrator or administrators.
4. Stock Subject to the Plan and Maximum Grants.
4.1. Number. The number of Shares reserved for issuance
pursuant to the exercise of Options granted under the Plan is 32,000,000. The
maximum number of Options that an Eligible Partner may receive in any fiscal
year may not exceed Options to purchase the number of Shares having an aggregate
Fair Market Value on the date of grant equal to fourteen percent (14%) of such
Eligible Partner's Base Wages for the previous fiscal year of the Company. No
Eligible Partner shall be granted Options under this Plan that would result in
such Eligible Partner receiving more than five percent (5%) of the maximum
number of Shares available for issuance hereunder. Upon a Change in
Capitalization, the number of Shares referred to in the first sentence of this
Section 4.1 shall be adjusted pursuant to Section 7.
4.2. Reduction of Number. Upon the granting of Options,
the number of Shares available under Section 4.1 for the granting of further
Options shall be reduced by the number of Shares for which such Options may be
exercised.
4.3. Expired Options. Whenever any outstanding Option is
canceled or is otherwise terminated for any reason without having been
exercised, the Share allocable to the expired, canceled or otherwise terminated
Option shall continue to be reserved for issuance under the Plan and may be the
subject of new Options granted hereunder.
5. Terms and Conditions of Options.
5.1. Agreement and Date of Grant. The terms and conditions of the
grant of Options to an Eligible Partner shall be set forth in an Agreement. The
Board or the Committee shall determine, in its sole discretion, the date during
the quarter following the end of the Company's fiscal year upon which Options
are granted.
5.2. Exercise Price. The exercise price for each Option shall be
100% of the Fair Market Value of a Share on the date the Option is granted.
5.3. Vesting. Subject to Section 5.9, and unless otherwise approved
by action of the Board or the Committee, each grant of Options shall vest and
become exercisable in annual twenty-five percent (25%) installments commencing
on the first
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anniversary of the date of grant. To the extent not exercised, installments
shall accumulate and be exercisable, in whole or in part, at any time after
becoming exercisable, but not later than the date the Options expire. Options
shall cease vesting as of the date of the Optionee's Disability or other
voluntary or involuntary termination of employment with the Company or any
Subsidiary; provided, however, that all Options shall vest in full as of the
date of the Optionee's termination of employment due to Retirement or death.
5.4. Term. Unless otherwise provided in the applicable Agreement,
each Option granted hereunder shall have a term of ten (10) years. The Committee
may, subsequent to the granting of any Option, extend the term thereof, but in
no event shall the term of any Option exceed ten (10) years.
5.5. Modification. No modification of an Option shall adversely
alter or impair any rights or obligations under the Option without the
Optionee's consent.
5.6 Non-Transferability. An Option granted hereunder shall not be
transferable by the Optionee except by will or the laws of descent and
distribution or pursuant to a domestic relations order (within the meaning of
Rule 16a-12 promulgated under the Exchange Act). An Option may be exercised
during the lifetime of such Optionee only by the Optionee or his or her guardian
or legal representative. The terms of such Option shall be final, binding and
conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
5.7 Method of Exercise. An Optionee desiring to exercise options
granted and exercisable hereunder shall notify the Company or, if required by
the Company, the brokerage firm designated by the Company to facilitate
exercises and sales under this Plan, specifying the number of Options to be
exercised. The notification to the brokerage firm shall be made in accordance
with procedures of such brokerage firm approved by the Company. The notification
to the Company or the designated brokerage firm shall be accompanied by (i)
payment of the aggregate exercise price of the Options in cash or by tender of
previously-owned Shares having an aggregate Fair Market Value of at least the
aggregate exercise price, or (ii) a request that the Company or the designated
brokerage firm conduct a cashless exercise of the Options. Payment of the
aggregate exercise price by means of tendering previously-owned Shares of the
Company's common stock shall not be permitted when the same may, in the
reasonable opinion of the Company, cause the Company to record a loss or expense
as a result thereof.
5.8 Rights of Optionees. No Optionee shall be deemed for any
purpose to be the owner of any Shares subject to any Options unless and until
(i) the Options shall have been exercised pursuant to the terms thereof, and
(ii) the Company shall have issued and delivered Shares to or for the account of
the Optionee. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares. Nothing in this Plan should be
construed to provide any Partner with any
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right to receive an Option under this Plan, irrespective of whether the Partner
may or may not be an Eligible Partner.
5.9 Effect of Change in Control. In the event of a Change in
Control, all Options outstanding on the date of such Change in Control shall
become immediately and fully exercisable and shall remain exercisable in
accordance with Section 6.2. A "Change in Control" means the occurrence during
the term of the Plan of:
(a) An acquisition (other than directly from the Company)
of any voting securities of the Company (the "Voting Securities") by any Person
(as the term Person is used for purposes of Section 13(d) or 14(d) of the
Exchange Act), immediately after which such Person has "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
twenty-five percent (25%) or more of the then outstanding Shares or the combined
voting power of the Company's then outstanding Voting Securities; provided,
however, in determining whether a Change in Control has occurred, Shares or
Voting Securities which are acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an acquisition which would cause a
Change in Control.
A "Non-Control Acquisition" shall mean an acquisition by (i)
an employee benefit plan (or a trust forming a part thereof) maintained by the
Company or any Subsidiary, (ii) the Company or its Subsidiaries, or (iii) any
Person in connection with a "Non-Control Transaction" (as hereinafter defined);
(b) Cessation for any reason of the individuals who are
members of the Board as of August 28, 2000 (the "Incumbent Board") to constitute
at least two-thirds of the members of the Board; provided, however, that if the
election, or nomination for election by the Company's common shareholders, of
any new director was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Plan, be considered as a
member of the Incumbent Board; provided further, however, that no individual
shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened "Election Contest"
(as described in Rule 14a-11 promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization
with or into the Company or in which securities of the Company
are issued, unless such merger, consolidation or
reorganization is a "Non-Control Transaction." A "Non-Control
Transaction" shall mean a merger, consolidation or
reorganization with or into the Company or in which securities
of the Company are issued where:
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(A) the shareholders of the Company,
immediately before such merger, consolidation or
reorganization, own directly or indirectly
immediately following such merger, consolidation or
reorganization, at least fifty percent (50%) of the
combined voting power of the outstanding voting
securities of the corporation resulting from such
merger or consolidation or reorganization (the
"Surviving Corporation") in substantially the same
proportion as their ownership of the Voting
Securities immediately before such merger,
consolidation or reorganization,
(B) the individuals who were members of
the Incumbent Board immediately prior to the
execution of the agreement providing for such merger,
consolidation or reorganization constitute at least
two-thirds of the members of the board of directors
of the Surviving Corporation, or a corporation
directly or indirectly beneficially owning a majority
of the Voting Securities of the Surviving
Corporation, and
(C) no Person other than (i) the
Company, (ii) any Subsidiary, (iii) any employee
benefit plan (or any trust forming a part thereof)
that, immediately prior to such merger, consolidation
or reorganization, was maintained by the Company or
any Subsidiary, or (iv) any Person who, immediately
prior to such merger, consolidation or reorganization
had Beneficial Ownership of twenty-five percent (25%)
or more of the then outstanding Voting Securities or
Shares, has Beneficial Ownership of twenty-five
percent (25%) or more of the combined voting power of
the Surviving Corporation's then outstanding voting
securities or its common stock.
(ii) A complete liquidation or dissolution of the
Company; or
(iii) The sale or other disposition of all or
substantially all of the assets of the Company to any
Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the then outstanding
Shares or Voting Securities as a result of the acquisition of Shares or Voting
Securities by the Company which, by reducing the number of Shares or Voting
Securities then outstanding, increases the
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proportional number of shares Beneficially Owned by the Subject Persons,
provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Shares or Voting Securities by the
Company, and after such share acquisition by the Company, the Subject Person
becomes the Beneficial Owner of any additional Shares or Voting Securities which
increases the percentage of the then outstanding Shares or Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall occur.
Section 5.9 set forth above applies to any Option granted or
Change in Control occurring after June 4, 1998; provided, however, that in the
event that the adoption of Section 5.9 as set forth above is considered to be an
alteration of equity interests in contemplation of a pooling of interests
transaction, the adoption of Section 5.9 shall be automatically rescinded. Upon
the rescission of the adoption of Section 5.9 set forth above, the effect of a
merger, consolidation, tender offer or takeover bid shall be governed by the
terms of Section 2.6 of the Plan in effect prior to June 4, 1998.
6. Effect of a Termination of Employment.
6.1. Board or Committee Discretion. The Agreement
evidencing the grant of each Option may set forth the terms and conditions
applicable to such Option upon a termination or change in the status of the
employment of the Optionee by the Company, or a Subsidiary (including a
termination or change by reason of the sale of a Subsidiary), which shall be as
the Board or Committee may, in its discretion, determine at the time the Option
is granted or thereafter.
6.2. Default Provisions. Unless otherwise provided in the
applicable Agreement pursuant to the Board or Committee's authority as set forth
in Section 6.1, any Option granted pursuant to this Plan shall expire at the
earliest of the following:
(i) the date specified in the Option;
(ii) ninety (90) days after the date of voluntary or
involuntary termination of Optionee's employment other than a termination as
described in (iii), (iv) or (v) below;
(iii) on the date of the discharge of the Optionee for
misconduct that is willfully or wantonly harmful to the Company;
(iv) twelve (12) months after the date of the Optionee's
death or termination due to Disability; or
(v) thirty six (36) months after the date of termination
of the Optionee's employment due to Retirement.
7. Adjustment Upon Changes in Capitalization.
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7.1. Adjustment. In the event of a Change in
Capitalization, the Board or the Committee, as appropriate, shall conclusively
determine the appropriate adjustments, if any, to (i) the number of Shares
reserved for issuance pursuant to the exercise of Options under the Plan, (ii)
the maximum number of Shares with respect to which Options may be granted to any
Eligible Partner during the term of the Plan, and (iii) the number of Shares
which are subject to outstanding Options granted under the Plan and the exercise
price therefor (if applicable).
7.2. No Fractional Shares. If any adjustment under Section
7.1 hereof results in an obligation of the Company to issue a fractional Share,
the number of Shares to be issued shall be rounded to the nearest whole number.
Under no circumstances shall the Company be obligated to issue and fractional
Shares pursuant to the exercise of Options under this Plan.
8. Termination and Amendment of the Plan.
The Plan shall terminate on August 28, 2010 and no Option may
be granted thereafter. Subject to Section 5.5, the Board or the Committee may
terminate the Plan prior to the day set forth above and the Board or the
Committee, may at any time and from time to time amend, modify or suspend the
Plan and all administrative rules, regulations and practices; provided, however,
that:
(a) no such amendment, modification, suspension
or termination shall impair or adversely alter any Options theretofore granted
under the Plan, except with the consent of the Optionee, nor shall any
amendment, modification, suspension or termination deprive any Optionee of any
Shares that he or she may have acquired through or as a result of the Plan; and
(b) to the extent necessary under applicable
law, no amendment shall be effective unless approved by the shareholders of the
Company in accordance with applicable law.
9. Non-Exclusivity of the Plan.
The adoption of the Plan by the Board shall not be construed
as amending, modifying or rescinding any previously approved incentive
arrangement or as creating any limitations on the power of the Board to adopt
such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of stock options otherwise than under the Plan, and
such arrangements may be either applicable generally or only in specific cases.
10. Limitation of Liability.
As illustrative of the limitations of liability of the
Company, but not intended to be exhaustive thereof, nothing in the Plan shall be
construed to:
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(a) give any person any right to be granted an
Option other than at the sole discretion of the Board or the Committee;
(b) give any person any rights whatsoever with
respect to Shares except as specifically provided in the Plan and any applicable
Agreement;
(c) limit in any way the right of the Company or
any Subsidiary to terminate the employment of any person at any time; or
(d) be evidence of any agreement or
understanding, expressed or implied, that the Company will employ any person at
any particular rate of compensation or for any particular period of time.
11. Regulations and Other Approvals; Governing Law.
11.1. State Law. Except as to matters of federal law, the
Plan and the rights of all persons claiming hereunder shall be construed and
determined in accordance with the laws of the State of Washington without giving
effect to conflicts of laws principles thereof.
11.2. Applicable Laws and Regulations. The obligation of
the Company to issue Shares upon the exercise of Options granted under the Plan
shall be subject to all applicable laws, rules and regulations, including all
applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate by
the Board or the Committee.
11.3. Compliance. The Board or the Committee may make such
changes to the Plan as may be necessary or appropriate to comply with the rules
and regulations of any government authority.
12. Foreign Eligible Partners.
Without amending the Plan, the Board or the Committee may
grant Options to Eligible Partners who are foreign nationals on such terms and
conditions different from those specified in this Plan as may in the judgment of
the Committee be necessary or advisable to foster and promote achievement of the
purposes of the Plan, and, in furtherance of such purposes, the Board or the
Committee may make such modifications, amendments, procedures, subplans, and the
like as may be necessary or advisable to comply with the provisions of the laws
in other countries in which the Company or its Subsidiaries operate or have
employees.
13. Miscellaneous.
13.1. Multiple Option Grants. The terms of each Option
grant may differ from other Options granted under the Plan at another time. The
Committee may
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also make more than one grant of Options to a given Eligible Partner during the
term of the Plan.
13.2. Withholding of Taxes. At such time as an Optionee
recognizes taxable income in connection with the receipt of Shares or receives
cash in connection with the sale of Shares acquired pursuant to the exercise of
Options under the Plan (a "Taxable Event"), the Optionee shall pay to the
Company an amount equal to the federal, state and local (including applicable
local country) taxes required to be withheld by the Company in connection with
the Taxable Event (the "Withholding Taxes") prior to the issuance of such Shares
or the payment of such cash. The Company shall have the right to deduct from any
payment of cash to an Optionee an amount equal to the Withholding Taxes in
satisfaction of the obligation to pay Withholding Taxes. In satisfaction of the
obligation to pay Withholding Taxes to the Company, the Optionee may elect to
have a portion of the Shares then issuable to him or her having an aggregate
Fair Market Value on the date of exercise equal to or greater than the
Withholding Taxes withheld by the Company. If Shares are to be withheld to pay
required Withholding Taxes, the Optionee, his or her personal representative or
permitted transferee must deliver an attestation that he or she has held a
number of Shares equal to the number to be withheld to pay such Withholding
Taxes for at least six (6) months.
(Approved by the Compensation and Management Development Committee of the Board
of Directors on October 22, 2003.)
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