STARBUCKS CORPORATION
1989 STOCK OPTION PLAN
FOR
NON-EMPLOYEE DIRECTORS
(Adopted 1/89, amended 4/89, 5/91, 9/94 and 9/96)
1. PURPOSE.
The purpose of the Starbucks Corporation 1989 Stock Option
Plan for Non-Employee Directors (the "Plan") is to attract and
retain the services of experienced and knowledgeable independent
directors of Starbucks Corporation (the "Corporation") for the
benefit of the Corporation and its stockholders and to provide an
additional incentive for such directors to continue to work for
the best interest of the Corporation and its stockholders through
continuing ownership of its common stock.
2. SHARES SUBJECT TO THE PLAN.
The total number of shares of common stock, no par value of
the Corporation ("Shares"), for which options may be granted
under the Plan shall not exceed 350,000 in the aggregate, subject
to adjustment hereafter in accordance with Section 11 hereof.
Within the foregoing limitations, Shares for which options have
been granted pursuant to the Plan but which options have lapsed
or otherwise terminated shall become available for the grant of
additional options. There will be reserved for issuance or
transfer from the Corporation's reserve of authorized but
unissued shares upon the exercise of options granted under the
Plan 350,000 Shares, subject to adjustment hereafter in
accordance with Section 11 hereof.
3. ADMINISTRATION OF PLAN.
The Plan shall be administered by the Board of Directors of
the Corporation (the "Board"). The Board shall have the power to
construe the Plan, to determine all questions arising thereunder,
and to adopt and amend such rules and regulations for the
administration of the Plan as it may deem desirable.
4. ELIGIBILITY; GRANT OF OPTION.
Each director of the Corporation who is not, and has not
during the immediately preceding 12 month period been, an
employee of the Corporation or any parent or subsidiary of the
Corporation (a "Participant") shall automatically be a
Participant in the Plan. Each Participant who is in office on
December 31 of any year beginning December 31, 1994, shall, on
the immediately succeeding January 15, automatically be granted
an option to acquire 10,000 shares under the Plan.
5. OPTION AGREEMENT.
Each option granted under the Plan shall be evidenced by an
option agreement (the "Agreement") duly executed on behalf of the
Corporation and by the Participant to whom such option is
granted, which Agreements may but need not be identical and which
shall (i) comply with and be subject to the terms and conditions
of the Plan and (ii) provide that the Participant agrees to
continue to serve as a director of the Corporation during the
term for which he or she was elected. Any Agreement may contain
such other terms, provisions, and conditions not inconsistent
with the Plan as may be determined by the Board. No option shall
be deemed granted within the meaning of the Plan and no purported
grant of any option shall be effective, until such Agreement
shall have been duly executed on behalf of the Corporation and
the Participant to whom the option is to be granted.
6. OPTION EXERCISE PRICE.
The option exercise price for an option granted under the
Plan shall be the fair market value of the Shares covered by the
option on the grant date (the "Pricing Date"). For purposes
hereof, the fair market value of the Shares covered by an option
shall be the average of the high and low sales prices of the
Shares on the applicable date as reported in the National Market
List of the National Association of Securities Dealers Inc.
Automated Quotation System or on the principal national
securities exchange on which the Shares are then listed for
trading, or if the Shares are not listed for trading on any such
system or exchange, the fair market value shall be as determined
by the Company's Board of Directors.
7. TIME AND MANNER OF EXERCISE OF OPTION.
a. Options granted under the Plan shall be immediately
exercisable.
b. The option may be exercised from time to time, by
giving notice to the Corporation or, if the Corporation requires,
the brokerage firm designated by the Corporation, stating the
number of Shares with respect to which the option is being
exercised. The option shall be exercised by payment in full for
such Shares, which payment may be in whole or in part in shares
of the common stock of the Corporation already owned by the
person or persons exercising the option, valued at fair market
value on the date of payment (as determined pursuant to Section 6
hereof). The notification to the brokerage firm shall be made in
accordance with procedures of such brokerage firm approved by the
Corporation.
c. Upon exercise of the option, delivery of a
certificate for fully paid and nonassessable Shares shall be made
at the principal office of the Corporation or the Corporation's
brokerage firm to the person or persons exercising the option as
soon as practicable (but in no event more than 30 days) after the
date of receipt of the notice of exercise by the Corporation, or
the Corporation's brokerage firm, or at such time, place, and
manner as may be agreed upon by the Corporation and the person or
persons exercising the option.
8. TERM OF OPTIONS.
Each option shall expire ten years from the date of the
granting thereof, but shall be subject to earlier termination as
follows:
a. In the event of the death of a Participant, the
option granted to such Participant may be exercised by the estate
of such Participant, or by any person or persons who acquired the
right to exercise such option by will or by the laws of descent
and distribution. Such option may be exercised at any time
within 180 days after the date of death of such Participant or
prior to the date on which the option expires by its terms,
whichever is earlier.
b. Except as stated in paragraph (c) below, in the
event that a Participant ceases to be a director of the
Corporation, other than by reason of his or her death, the
options granted to such Participant may be exercised, for a
period of thirty (30) days after such date, or prior to the date
on which the option expires by its terms, whichever is earlier.
c. In the event a Participant is removed from the
Board of Directors for cause as determined by the shareholders,
the options granted to such Participant must be exercised prior
to his removal.
9. TRANSFERABILITY OF OPTIONS.
The right of any Participant to exercise an option granted to
him or her under the Plan shall not be assignable or transferable
by such Participant otherwise than (i) by will or the laws of
descent and distribution, or (ii) by gift or, with the consent of
the Corporation, for value to immediate family members of the
Participant, partnerships of which the only partners are members
of the Participant's immediate family and trusts established
solely for the benefit of such family members; and solely as it
pertains to effecting an exercise of an option transferred in
accordance with this Section 9, the term Participant shall
include a permitted transferee.
10. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
Neither the recipient of an option under the Plan nor his or
her successors in interest shall have any rights as a stockholder
the Corporation with respect to any Shares subject to an option
granted to such person until such person becomes a holder of
record of such Shares.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
In the event that the outstanding shares of the common stock
of the Corporation are changed into or exchanged for a different
number or kind of shares or other securities of the Corporation
or of another corporation, by reason of any reorganization,
merger, consolidation, recapitalization, reclassification, stock
split-up, combination of shares, or dividend payable in capital
stock, appropriate adjustment shall be made in the number and
kind of shares subject to and reserved for issuance or transfer
under the Plan and as to which outstanding options (or portions
thereof then unexercised) shall be exercisable, to the end that
the proportionate interest of Participants and prospective
Participants, with respect to options theretofore granted and to
be granted, shall be maintained as before the occurrence of such
event. Such adjustment in outstanding options shall be made
without change in the total price applicable to the unexercised
portion of such options, but with a corresponding adjustment in
the option price per share.
12. RESTRICTIONS ON ISSUE OF SHARES.
Anything in this Plan to the contrary notwithstanding, the
Corporation may delay the issuance of Shares covered by the
exercise of any option and the delivery of a certificate for such
Shares until on the following conditions shall be satisfied:
(i) the Shares with respect to which an option has
been exercised are at the time of the issue or transfer of such
Shares effectively registered under applicable federal securities
laws now in force or hereafter amended; or
(ii) counsel for the Corporation shall have given an
opinion, which opinion shall not be unreasonably conditioned or
withheld, that such Shares are exempt from registration under
applicable federal securities laws now in force or hereafter
amended.
It is intended that all exercises of options shall be effective.
Accordingly, the Corporation shall use its best efforts to bring
about compliance with the above conditions within a reasonable
time, except that the Corporation shall be under no obligation to
cause a registration statement or a posteffective amendment to
any registration statement to be prepared at its expense solely
for the purpose of covering the issuance or transfer from the
Corporation's reserve of authorized but unissued Shares in
respect of which any option may be exercised.
13. PURCHASE FOR INVESTMENT.
Unless the Shares to be issued upon exercise of an option
granted under the Plan have been effectively registered under the
Securities Act of 1933 as now in force or hereafter amended, the
Corporation shall be under no obligation to issue or transfer
any Shares covered by any option unless the person or persons who
exercise such option, in whole or in part, shall give a written
representation and undertaking to the Corporation, which is
satisfactory in form and scope to counsel to the Corporation and
upon which, in the opinion of such counsel, the Corporation may
reasonably rely, that he or she is acquiring the Shares issued or
transferred to him or her for his or her own account as an
investment and not with a view to, or for sale in connection
with, the distribution for any such Shares, and that he or she
will make no transfer of the same except in compliance with any
rules and regulations in force at the time of such transfer under
the Securities Act of 1933, or any other applicable law, and that
if Shares are issued or transferred without such registration a
legend to this effect may be placed upon the certificates
representing the Shares.
14. EFFECTIVE DATE.
The effective date (the "Effective Date") of this Plan was
January 17, 1989.
15. EXPENSES OF THE PLAN.
All costs and expenses of the adoption and administration of
the Plan shall be borne by the Corporation and none of such
expenses shall be charged to any Participant.
16. TERMINATION AND AMENDMENT OF PLAN.
Unless sooner terminated as herein provided, the Plan shall
terminate ten years from the Effective Date. The Board may at
any time terminate the Plan or make such modification or
amendment thereof as it deems advisable; provided, however, that,
except as provided in Section 11, the Board may not, without the
approval of the stockholders of the Corporation, increase the
maximum aggregate number of shares for which options may be
granted under the Plan or the number of Shares for which an
option may be granted to any Participant. Termination or any
modification or amendment of the Plan shall not, without the
consent of a Participant, affect his or her rights under an
option previously granted to him or her.