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STARBUCKS CORPORATION
1991 COMPANY-WIDE
STOCK OPTION PLAN:
RULES OF THE UK SUB-PLAN
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As adopted by a resolution by the Compensation Committee of the Board on
September 28, 1999 as amended on August 28, 2000
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STARBUCKS CORPORATION 1991 COMPANY-WIDE STOCK OPTION PLAN: RULES OF THE UK
SUB-PLAN
1 INTRODUCTION
For the purpose of granting options under a scheme approved by the Inland
Revenue under Schedule 9, the terms of the Starbucks Corporation 1991
Company-Wide Stock Option Plan (the "Main Plan") shall be applied to any option
which is designated as a "UK Approved Option" in the relevant Agreement, subject
to the modifications set out in the following Rules.
2 DEFINITIONS
2.1 Where the context so admits, the definitions in the Main Plan also apply
to these Rules. In addition, in these Rules:
"Associated Company" has the same meaning as in Section 416 of
the UK Act;
"Company" means 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 UK Act;
"Exchange Rate" for any day means the average of the buying
and the selling prices Pounds Sterling for
US Dollar spot rates at close for that day,
as quoted by the Financial Times newspaper
(or a similar publication selected by the
Committee);
"Group" means the Company and any other companies
of which the Company has Control and
"member of the Group" shall be construed
accordingly;
"Inland Revenue" means the Board of Inland Revenue of the
United Kingdom;
"Main Plan" means the Starbucks Corporation 1991
Company-Wide Stock Option Plan as amended
and restated by shareholders on June 4,
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1998, as from time to time further amended;
"Market Value" means, on any date, the closing price of a
share as reported by the Nasdaq Stock
Market, Inc. provided that the Inland
Revenue Shares Valuation Division has
agreed to this in advance, or otherwise the
market value of a share determined in
accordance with the provision of Part VIII
of the United Kingdom Taxation of
Chargeable Gains Act 1992 and agreed for
the purposes of the UK Sub-Plan with the
Inland Revenue on or before that date;
"Qualifying Partner" means any employee of a member of the Group
who is not a director or officer, PROVIDED
THAT to be a Qualifying Partner such
employee must be chargeable to tax in
respect of his office or employment under
Case I of Schedule E;
"Schedule 9" means Schedule 9 to the UK Act;
"Subsisting Option" means an option which has neither lapsed
nor been exercised;
"UK Act" means the United Kingdom Income and
Corporation Taxes Act 1988;
"UK Approved Option" means an option to acquire Shares granted
under the UK Sub-Plan;
"UK Sub-Plan" means the UK Sub-Plan of the Main Plan
established by these Rules, as from time to
time amended.
2.2 Where the context so admits, any reference in these Rules:
A. to the singular number shall be construed as if it referred also to
the plural number and vice versa;
B. to the masculine gender shall be construed as if it referred also to
the feminine gender; and
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C. to a statute or statutory provision shall be construed as if it
referred also to that statute or statutory provision as for the time
being modified, extended or re-enacted.
2.3 The headings in these Rules are for convenience only and shall not
affect their construction.
3 GRANT OF OPTIONS
3.1 No UK Approved Option shall be granted to any person who is not a
Qualifying Partner on the date of grant or who is precluded from
participating in the UK Sub-Plan by paragraph 8 of Schedule 9.
3.2 No UK Approved Option shall be granted over Shares which do not satisfy
the conditions specified in paragraphs 10 to 14 inclusive of Schedule 9.
3.3 The exercise price per Share for a UK Approved Option shall not be less
than 100% of the Market Value of a Share on the date the Option is
granted.
3.4 Any UK Approved Option granted to a Qualifying Partner on any date shall
be limited and take effect so that the aggregate Market Value of the
Shares subject to that option and any other shares subject to Subsisting
Options granted to him under the UK Sub-Plan or any other scheme (not
being a savings-related share option scheme) approved under Schedule 9
and established by the Company or any Associated Company of the Company
does not exceed or further exceed the limit in paragraph 28 of Schedule
9. For the purpose of this Rule 3.4, the Market Value of Shares shall be
calculated as at the time the options in relation to those shares were
granted or at such earlier time or times as may have been agreed in
writing with the Inland Revenue and, where relevant, shall be converted
into Pounds Sterling at the Exchange Rate.
4 EXERCISE OF OPTIONS
4.1 An Optionee may not exercise a UK Approved Option at any time when he is
precluded from participating in the UK Sub-Plan by paragraph 8 of
Schedule 9.
4.2 No UK Approved Option may be exercised unless the Shares which may be
acquired on such exercise satisfy the conditions specified in paragraphs
10 to 14 inclusive of Schedule 9.
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4.3 The exercise price for the Shares as to which a UK Approved Option is
exercised shall be paid in cash. No Shares acquired on exercise of a UK
Approved Option may be paid for by tender of previously-owned Shares.
4.4 Shares shall be delivered upon the exercise of a UK Approved Option
within 30 days of the exercise date.
4.5 In the event of the death of an Optionee, a UK Approved Option may only
be exercised by the Optionee's legal personal representatives and may
not be exercised more than one year after the date of his death.
5 CHANGE OF CONTROL
5.1 Subject to Rules 5.3, 5.4 and 5.5 if a company (the "Acquirer"):
A. obtains Control of the Company as a result of making:
- a general offer to acquire the whole of the issued Common Stock
of the Company, which is made on a condition such that if it is
satisfied the Acquirer will have such Control; or
- a general offer to acquire all the Shares; or
B. obtains Control of the Company in pursuance of a compromise or
arrangement sanctioned by the court under Section 425 of the United
Kingdom Companies Act 1985 or Article 418 of the Companies (Northern
Ireland) Order 1986; or
C. becomes bound or entitled to acquire shares in the Company under
Sections 428 to 430 of the said Act of 1985 or Articles 421 to 423
of the said Order of 1986
an Optionee may, by agreement with the Acquirer, at any time within the
Appropriate Period, release his rights under his UK Approved Option
("Old Rights") in consideration of the grant to him of rights ("New
Rights") which are equivalent to the Old Rights but relate to shares in
the Acquirer or some other company falling within paragraphs 10 (b) or
(c) of Schedule 9.
5.2 In Rule 5.1, "Appropriate Period" means:
A. in a case falling within paragraph a, the period of six months
beginning with the time when the Acquirer has obtained Control of
the Company and any condition subject to which the offer is made is
satisfied;
B. in a case falling within paragraph b, the period of six months
beginning with the time when the court sanctions the compromise or
arrangement; and
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C. in a case falling within paragraph c, the period during which the
Acquirer remains bound or entitled as mentioned in that paragraph.
5.3 For the purposes of this Rule 5, references to Sections 425 and 428 to
430 of the Companies Act 1985 and Articles 418 and 421 to 423 of the
Companies (Northern Ireland) Order 1986 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.
5.4 The New Rights shall not be regarded for the purpose of Rule 5.1 as
equivalent to the Old Rights unless:
A. the shares to which the New Rights relate satisfy the conditions
specified in paragraphs 10 to 14 inclusive of Schedule 9;
B. the total Market Value, immediately before the release, of the
Shares which were subject to the Old Rights is equal to the total
Market Value, immediately after the grant, of the shares in respect
of which the New Rights are granted;
C. the total amount payable by the Optionee for the acquisition of
shares on complete exercise of the New Rights is equal to the total
amount which would have been payable for the acquisition of Shares
on complete exercise of the Old Rights; and
D. the New Rights will be exercisable in the same manner as the Old
Rights and subject to the provisions of the UK Sub-Plan as it had
effect immediately before the release of the Old Rights, except that
the term "Shares" shall mean the shares to which the New Rights
relate and the term "Company" shall mean the company of which those
shares form part of the share capital.
5.5 Rights may only be released under Rule 5.1 at a time when the relevant
UK Approved Option is exercisable pursuant to Section 5.9 of the Main
Plan.
6 ADJUSTMENT OF OPTIONS
6.1 No adjustment shall be made to a UK Approved Option, under Section 7 of
the Main Plan, except for variation in the share capital of the Company
by way of capitalisation or rights issue, consolidation, subdivision or
reduction of capital or otherwise.
6.2 No adjustment to a UK Approved Option, under Section 7 of the Main Plan,
shall take effect until it has been approved by the Inland Revenue.
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7 AMENDMENT OF THE UK SUB-PLAN
No amendment which is made to these Rules or to any of the provisions of
the Main Plan which affect options granted under the UK Sub-Plan shall
be applicable to UK Approved Options until it has been approved by the
Inland Revenue.
