Employee Stock Purchase Plan - Starbucks Corp.
STARBUCKS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN - 1995
As Amended and Restated Effective October 1, 2006
1. Purpose of the Plan. The Starbucks Corporation Employee Stock Purchase
Plan - 1995 (the "Plan") is intended to provide a method whereby eligible
employees of Starbucks Corporation (the "Company") and its Subsidiaries will
have an opportunity to purchase Shares of the common stock of the Company. The
Company believes that employee participation in the ownership of the Company is
of benefit to both the employees and the Company. The Company intends to have
the Plan qualify as an "employee stock purchase plan" under Section 423 of the
Code (as hereinafter defined). The provisions of the Plan shall, accordingly, be
construed so as to extend and limit participation in a manner that is consistent
with the requirements of that Section of the Code.
2. Definitions.
Account. "Account" shall mean the funds that are accumulated with
respect to each individual Participant as a result of payroll deductions for the
purpose of purchasing Shares under the Plan. The funds that are allocated to a
Participant's Account shall at all times remain the property of that
Participant, but such funds may be commingled with the general funds of the
Company.
Affected Person. "Affected Person" shall mean a Participant residing
or employed in an area covered by a Presidentially Declared Disaster and
affected by such Presidentially Declared Disaster.
Base Pay. "Base Pay" means an employee's regular straight time salary
or earnings.
Board. The "Board" means the Board of Directors of the Company.
Code. The "Code" means the Internal Revenue Code of 1986, as amended.
Commencement Date. The "Commencement Date" means the January 1, April
1, July 1 or October 1, as the case may be, on which a particular Offering
begins.
Committee. The "Committee" shall mean the Compensation Committee of
the Board or another committee appointed by the Board to administer and fulfill
its duties under the Plan.
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Ending Date. The "Ending Date" means the March 31, June 30, September
30, or December 31, as the case may be, on which the particular Offering
concludes.
ESPP Broker. The "ESPP Broker" is a qualified stock brokerage or other
financial services firm that has been designated by the Company.
Fair Market Value. The "Fair Market Value" of the Shares shall be the
price per Share as quoted on The Nasdaq Stock Market, Inc. at the close of
regular trading. The Board or the Committee may designate a different time or
method of determining Fair Market Value if appropriate because of changes in the
hours and methods of trading on The Nasdaq Stock Market, Inc. If the common
stock ceases to be listed on The Nasdaq Stock Market, Inc. the Board or the
Committee shall designate an alternative exchange, stock market, or method of
determining Fair Market Value of the common stock.
Holding Period. The "Holding Period" shall mean the holding period
that is set forth in Section 423(a) of the Code, which, as of the date that the
Company's Board of Directors adopted this Plan, is the later of (a) the two-year
period after the Commencement Date and (b) the one-year period after transfer to
a Participant of any Shares under the Plan.
Offerings. "Offerings" means the consecutive three-month periods for
the purchase and sale of Shares under the Plan. Each one of the Offerings shall
be referred to as an "Offering."
Participant. "Participant" means an employee who, pursuant to Section
3, is eligible to participate in the Plan and has complied with the requirements
of Section 7.
Presidentially Declared Disaster. "Presidentially Declared Disaster"
shall have the meaning given to that term in Section 1033(h)(3) of the Code.
Shares. "Shares" means shares of the Company's common stock, $0.001
par value per share, that will be sold to Participants under the Plan.
Subsidiaries. "Subsidiaries" shall mean any present or future domestic
or foreign corporation that: (i) would be a "subsidiary corporation" of the
Company as that term is defined in Section 424 of the Code, and (ii) whose
employees have been designated by the Board or the Committee to be eligible,
subject to Section 3, to be Participants under the Plan.
Withdrawal Notice. "Withdrawal Notice" means a notice, in a form
designated by the Company, that a Participant who wishes to withdraw from the
Plan must submit to the Company pursuant to Section 22.
3. Employees Eligible to Participate. Any regular employee of the Company
or any of its Subsidiaries who (a) is in the employ of the Company or any of its
Subsidiaries on the Commencement Date, (b) has been so employed for at least
ninety consecutive days, and (c) has been paid for an average of at least twenty
hours per week during such employment, is eligible to participate in the Plan.
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4. Offerings. The Plan shall consist of Offerings commencing on July 1,
1995 and on each subsequent October 1, January 1, April 1, and July 1.
5. Price. The purchase price per Share shall be the lesser of: (1) 85
percent of the Fair Market Value of a Share on the Commencement Date if a
business day, or the nearest subsequent business day; or (2) 85 percent of the
Fair Market Value of a Share on the Ending Date, or the nearest prior business
day.
6. Number of Shares Offered Under the Plan. The maximum number of Shares
that will be offered under the Plan is 32,000,000. If, on any date, the total
number of Shares for which purchase rights are to be granted pursuant to Section
9 exceeds the number of Shares then available under this Section 6 after
deduction of all Shares (a) that have been purchased under the Plan and (b) for
which rights to purchase are then outstanding, the Company shall make a pro-rata
allocation of the Shares that remain available in as nearly a uniform manner as
shall be practicable and as it shall determine, in its sole judgment, to be
equitable. In such event, the number of Shares each Participant may purchase
shall be reduced and the Company shall give to each Participant a written notice
of such reduction.
7. Participation. An eligible employee may become a Participant by
completing the enrollment process as designated by the Company prior to the
Commencement Date of the Offering to which it relates. Participation in one
Offering under the Plan shall neither limit, nor require, participation in any
other Offering, but a Participant shall remain enrolled in the Plan until the
Participant withdraws from the Plan pursuant to Section 13 hereof, or his or her
employment is terminated with the Company or one of its Subsidiaries.
8. Payroll Deductions.
8.1 At the time the enrollment process is completed and for so long as
a Participant participates in the Plan, each Participant shall authorize the
Company to make payroll deductions of a whole percentage (not partial or
fractional) of Base Pay; provided, however, that no payroll deduction shall be
less than one percent or exceed 10 percent of Base Pay. The amount of the
minimum percentage deduction may be adjusted by the Board of Directors or
Committee from time to time; provided, however, that a Participant's existing
rights under any Offering that has already commenced may not be adversely
affected thereby.
8.2 Each Participant's payroll deductions shall be credited to that
Participant's Account. A Participant may not make a separate cash payment into
such Account nor may payment for Shares be made from other than the
Participant's Account.
8.3 A Participant's payroll deductions shall begin on or following the
Commencement Date, and shall continue until the termination of the Plan unless
the Participant elects to withdraw pursuant to Section 13 or changes his or her
contribution percentage prior to the Commencement Date for a subsequent
Offering.
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8.4 A Participant may discontinue participation in the Plan as
provided in Section 13, but no other change may be made during an Offering and,
specifically, a Participant may not alter the amount or rate of payroll
deductions during an Offering.
8.5 Notwithstanding anything to the contrary in the Plan, the
Committee or any officer designated by the Committee may establish special
procedures and permit Affected Persons to reduce the amount or rate of payroll
deductions during an Offering, subject to the minimum percentage deduction as
provided in Section 8.1; provided, however, that any such procedures do not
result in the modification of any outstanding Option within the meaning of
Section 424 of the Code.
9. Granting of Right to Purchase. On the Commencement Date, the Plan shall
be deemed to have granted automatically to each Participant a right to purchase
as many full Shares (not any fractional Shares) as may be purchased with such
Participant's Account.
10. Purchase of Shares. On the Ending Date, each Participant who has not
otherwise withdrawn from an Offering shall be deemed to have carried out the
right to purchase, and shall be deemed to have purchased at the purchase price
set forth in Section 5, the number of full Shares (not any fractional Shares)
that may be purchased with such Participant's Account.
11. Participant's Rights as a Shareholder. No Participant shall have any
rights of a shareholder with respect to any Shares until the Shares have been
purchased in accordance with Section 10 and issued by the Company.
12. Evidence of Ownership of Shares.
12.1 Promptly following the Ending Date of each Offering, the Shares
that are purchased by each Participant shall be deposited into an account that
is established in the Participant's name with the ESPP Broker.
12.2 A Participant may direct, by written notice to the ESPP Broker
prior to the Ending Date of the pertinent Offering, that the ESPP Broker account
be established in the names of the Participant and one such other person as may
be designated by the Participant as joint tenants with right of survivorship,
tenants in common, or community property, to the extent and in the manner
permitted by applicable law.
12.3 A Participant shall be free to undertake a disposition, as that
term is defined in Section 424(c) of the Code (which generally includes any
sale, exchange, gift, or transfer of legal title), of Shares in the
Participant's ESPP Broker account at any time, whether by sale, exchange, gift,
or other transfer of title. Subject to Section 12.4 below, in the absence of
such a disposition of the Shares, however, the Shares must remain in the
Participant's account at the ESPP Broker until the Holding Period has been
satisfied. With respect to Shares for which the Holding Period has been
satisfied, a Participant may move such Shares to an account at another brokerage
firm of the Participant's choosing or request that a certificate that represents
the Shares be issued and delivered to the Participant.
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12.4 A Participant who is not subject to United States taxation may,
at any time and without regard to the Holding Period, move his or her Shares to
an account at another brokerage firm of the Participant's choosing or request
that a certificate that represents the Shares be issued and delivered to the
Participant.
13. Withdrawal.
13.1 A Participant may withdraw from the Plan, in whole but not in
part, by delivering a Withdrawal Notice to the Company by the 15th of the month
or date designated by the Company prior to the next Offering. A Participant's
withdrawal will become effective on the Commencement Date of the next Offering
following withdrawal. After such withdrawal, the Company shall refund the
Participant's entire Account as soon as practicable.
13.2 An employee who has previously withdrawn from the Plan may
re-enter by complying with the requirements of Section 7. Upon compliance with
such requirements, an employee's re-entry into the Plan will become effective on
the Commencement Date of the next Offering following the date the employee
complies with Section 7 with respect to the re-entry.
13.3 Notwithstanding anything to the contrary in the Plan, the
Committee or any officer designated by the Committee may establish special
procedures and extend the withdrawal period for an Offering at any time during
that Offering for Affected Persons, and such a withdrawal will become effective
immediately upon receipt of a Withdrawal Notice by the Company pursuant to
Section 22; provided, however, that any such procedures do not result in the
modification of any outstanding Option within the meaning of Section 424 of the
Code.
14. Carryover of Account. At the conclusion of each Offering, the Company
shall automatically re-enroll each Participant in the next Offering, and the
balance of each Participant's Account shall be used to purchase Shares in the
subsequent Offering, unless the Participant has advised the Company otherwise in
writing, or as set forth in Section 20, in which case the Company shall refund
to the Participant the funds that remain in the Participant's Account as soon as
practicable thereafter.
15. Interest. No interest shall be paid or allowed on a Participant's
Account.
16. Rights Not Transferable. No Participant shall be permitted to sell,
assign, transfer, pledge, or otherwise dispose of or encumber such Participant's
Account or any rights to purchase or to receive Shares under the Plan other than
by will or the laws of descent and distribution, and such rights and interests
shall not be liable for, or subject to, a Participant's debts, contracts, or
liabilities. If a Participant purports to make a transfer, or a third party
makes a claim in respect of a Participant's rights or interests, whether by
garnishment, levy, attachment, or otherwise, such purported transfer or claim
shall be treated as a withdrawal election under Section 13.
17. Termination of Employment. As soon as practicable upon termination of a
Participant's employment with the Company for any reason whatsoever, including
but not limited
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to death or retirement, the Participant's Account shall be refunded to the
Participant or the Participant's estate, as applicable.
18. Amendment or Discontinuance of the Plan. The Board or the Committee
shall have the right to amend or modify the Plan at any time without notice, and
the Board shall have the right to terminate the Plan at any time without notice,
provided that (i) subject to Sections 19 and 23.1(b), no Participant's existing
rights under any Offering that is in progress may be adversely affected thereby,
and (ii) subject to Section 19, in the event that the Board or the Committee
desires to retain the favorable tax treatment under Sections 421 and 423 of the
Code, no such amendment of the Plan shall increase the number of Shares that
were reserved for issuance hereunder unless the Company's shareholders approve
such an increase.
19. Changes in Capitalization. In the event of reorganization,
recapitalization, stock split, stock dividend, combination of Shares, merger,
consolidation, offerings of rights, or any other change in the capital structure
of the Company, the Board or the Committee shall make whatever adjustments are
appropriate in the number, kind, and the price of the Shares that are available
for purchase under the Plan, and in the number of Shares that a Participant is
entitled to purchase.
20. Share Ownership. Notwithstanding anything herein to the contrary, no
Participant shall be permitted to subscribe for any Shares under the Plan if
such Participant, immediately after such subscription, owns Shares that account
for (including all Shares that may be purchased under outstanding subscriptions
under the Plan) five percent or more of the total combined voting power or value
of all classes of Shares of the Company or its Subsidiaries. For the foregoing
purposes the rules of Section 424(d) of the Code shall apply in determining
share ownership. In addition, no Participant shall be allowed to subscribe for
any Shares under the Plan that permit such Participant's rights to purchase
Shares under all "employee stock purchase plans" of the Company and its
Subsidiaries to accrue at a rate that exceeds $25,000 of the Fair Market Value
of such Shares for each calendar year in which such right to subscribe is
outstanding at any time. For purposes of this Section 20, the Fair Market Value
of Shares shall be determined in each case as of the Commencement Date of the
Offering in which such Shares are purchased. The Company shall refund as soon as
practicable any contributions by a Participant that exceed the limit set forth
in the preceding sentence.
21. Administration. The Plan shall be administered by the Board or the
Committee, which may engage the ESPP Broker to assist in the administration of
the Plan. The Board or the Committee shall be vested with full authority to
make, administer, and interpret such rules and regulations as it deems necessary
to administer the Plan, and any determination, decision, or action of the Board
or the Committee in connection with the construction, interpretation,
administration, or application of the Plan shall be final, conclusive, and
binding upon all Participants and any and all persons that claim rights or
interests under or through a Participant. The Board may delegate any or all of
its authority hereunder to a committee of the Board, as it may designate.
22. Notices. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in
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the form specified by the Company at the location, or by the person, that is
designated by the Company from time to time for the receipt thereof, and, in the
absence of such a designation, the Company's Human Resources Department,
Attention: Stock Administration shall be authorized to receive such notices.
23. Termination of the Plan.
23.1 This Plan shall terminate at the earliest of the following:
(a) The date of the filing of a Statement of Intent to Dissolve
by the Company or the effective date of a merger or consolidation wherein the
Company is not to be the surviving corporation, which merger or consolidation is
not between or among corporations related to the Company. Prior to the
occurrence of either of such events, on such date as the Company may determine,
the Company may permit a Participant to carry out the right to purchase, and to
purchase at the purchase price set forth in Section 5, the number of full Shares
(not any fractional Shares) that may be purchased with that Participant's
Account. In such an event, the Company shall refund to the Participant the funds
that remain in the Participant's Account after such purchase;
(b) The date the Board acts to terminate the Plan in accordance
with Section 18 above; or
(c) The date when all of the Shares that were reserved for
issuance hereunder have been purchased.
23.2 Upon termination of the Plan, the Company shall refund to each
Participant the balance of each Participant's Account.
24. Limitations on Sale of Stock Purchased Under the Plan. The Plan is
intended to provide Shares for investment and not for resale. The Company does
not, however, intend to restrict or influence the conduct of any employee's
affairs. An employee, therefore, may sell Shares that are purchased under the
Plan at any time, subject to compliance with any applicable federal or state
securities laws. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE
PRICE OF THE SHARES.
25. Governmental Regulation. The Company's obligation to sell and deliver
Shares under this Plan is subject to any governmental approval that is required
in connection with the authorization, issuance, or sale of such Shares.
26. No Employment Rights. The Plan does not, directly or indirectly, create
any right for the benefit of any employee or class of employees to purchase any
Shares under the Plan, or create in any employee or class of employees any right
with respect to continuation of employment by the Company, and it shall not be
deemed to interfere in any way with the Company's right to terminate, or
otherwise modify, an employee's employment at any time.
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27. Governing Law. The law of the state of Washington shall govern all
matters that relate to this Plan except to the extent it is superseded by the
laws of the United States.
As amended and restated to incorporate an amendment approved by the Compensation
and Management Development Committee on September 19, 2006 (effective October 1,
2006), and to reflect two-for-one stock splits on April 27, 2001 and October 21,
2005.
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