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EXHIBIT 10.1
EXECUTIVE MANAGEMENT BONUS PLAN
STARBUCKS CORPORATION
APPROVAL BY SHAREHOLDERS The material terms of the Objective Performance
Goals under this Executive Management Bonus
Plan (the "Plan") will be submitted to the
shareholders of Starbucks Corporation
("Starbucks" or the "Company") on March 21,
2007. Shareholder approval of the Plan is
required in order for the bonuses paid upon
achievement of the Objective Performance Goals
to qualify as performance-based compensation
under Section 162(m) of the Internal Revenue
Code.
PLAN TERM Five fiscal years beginning October 2, 2006.
PLAN EFFECTIVE DATE October 2, 2006.
PLAN YEAR Starbucks fiscal year, which ends on the Sunday
closest to September 30.
PURPOSE The purpose of the Plan is to increase
shareholder value by providing an incentive for
the achievement of goals that support Starbucks
strategic plan.
ELIGIBILITY Starbucks partners serving in positions of
executive vice president and above and other
senior officers of the Corporation, as
designated by the Compensation and Management
Development Committee (the "Compensation
Committee") of the Board of Directors, are
eligible to participate in the Plan.
The executive vice president, Partner Resources
and the chief executive officer have the
authority to recommend Participants. The
Compensation Committee has the sole authority
to designate Participants.
Eligibility will cease upon termination of the
Participant's employment, withdrawal of
designation by the Compensation Committee,
transfer to a position compensated otherwise
than as provided in the Plan, termination of
the Plan by Starbucks, or if the Participant
engages, directly or indirectly, in any
activity which is competitive with any
Starbucks activity.
If a Participant changes from an eligible
position to an ineligible position during the
Plan Year, eligibility to participate will be
at the discretion of the Compensation
Committee.
TARGET BONUS The Target Bonus for each Participant shall be
established by the Compensation Committee no
later than ninety (90) days after the beginning
of the Plan Year. The Target Bonus shall be the
amount that would be paid to the Participant
under the Plan if 100% of Objective Performance
Goals and 100% of Individual Goals were met.
The Target Bonus may be established as a
percentage of Base Pay, a specific dollar
amount, or according to another method
established by the Compensation Committee. The
amount of the Target Bonus earned by the
Participant shall be based on the achievement
of Objective Performance Goals and, if
applicable, Individual Performance Goals.
Base Pay is the annual pay rate established for
the Participant by Starbucks and in effect on
the last day of the Plan Year or, in the case
of a deceased or disabled Participant, on the
last day of participation in the Plan.
Starbucks, in conjunction with the Compensation
Committee, may at any time, in its sole
discretion, prospectively revise the
Participant's Base Pay.
GOALS
- - OBJECTIVE PERFORMANCE - In accordance with Section 162(m) of the
GOALS Internal Revenue Code, the Compensation
Committee shall select one or more
objective performance goal measures from
among Earnings Per Share, Return on
Capital, Sales Growth and Volume, Return
on Assets, Return on Equity, Net Income,
Operating Income, Economic Profit, Expense
Reduction or Controllable Expenses, Profit
Margin, Total Shareholder Return, Stock
Price, and/or Free Cash Flow for the
Objective Performance Goals. The
Compensation Committee shall select the
Objective Performance Goals for each
Participant no later than ninety (90) days
after the beginning of the Plan Year and
while the outcome is substantially
uncertain.
- At the Compensation Committee's
discretion, objective performance goals
may differ by Participant, relate to
performance on a Company-wide or business
unit basis, be expressed on an absolute
and/or relative basis, and may be based on
or employ comparisons based on internal
targets, past performance and/or the past
or current performance of peer companies.
- The Compensation Committee shall select
the amount of the Target Bonus for each
Participant that will be determined by
achievement of the Objective Performance
Goals.
- - OBJECTIVE PERFORMANCE - The Compensation Committee may establish
GOALS (CONT.) any special adjustments that will be
applied in calculating whether the
Objective Performance Goals have been met
to factor out extraordinary items no later
than ninety (90) days after the beginning
of the Plan Year and while the outcome is
substantially uncertain.
- If the Objective Performance Goals
selected by the Compensation Committee are
not met, no bonus related to those goals
is payable under the Plan.
- - INDIVIDUAL GOALS - The portion of the Target Bonus not
determined by achievement of the Objective
Performance Goals shall be determined by
the Participant's achievement of
Individual Goals.
- Each Participant with Individual Goals
shall submit such Individual Goals for
approval by the Compensation Committee.
- The maximum performance level for each
Individual Goal is 100%.
BONUS PAYOUT AND ELIGIBILITY Bonus Payout for each Participant is based on
the achievement of the Objective Performance
Goals and the Individual Goals. A Bonus Payout
under this Plan is earned as of the end of the
Plan Year and will be paid according to the
Plan, if the Participant:
1) remains a Starbucks partner through the
end of the Plan Year, unless employment is
terminated prior to the end of the Plan
Year due to death or disability, and
2) refrains from engaging during the Plan
Year, directly or indirectly, in any
activity that is competitive with any
Starbucks activity.
The Compensation Committee, in its discretion,
may determine that the Bonus Payout for any
Participant will be less than (but not greater
than) the amount earned by such Participant
under the Plan.
BONUS PAYOUT CALCULATION Within ninety (90) days after the beginning of
the Plan Year and while the outcome is
substantially uncertain, the Compensation
Committee shall review and approve for each
Participant: the target bonus; the Objective
Performance Goals; and the relative weighting
of the Goals for the Plan Year. Those metrics
will be used to calculate the Bonus Payout for
each Participant. The Compensation Committee
shall review the Bonus Payout Calculation for
each Participant. The maximum Bonus Payout for
the achievement of Objective Performance Goals
is $3,500,000, to any one Participant in any
plan year.
BONUS PAYOUT PRORATIONS For any partner who meets eligibility criteria
and becomes a Participant after the start of
the Plan Year or whose employment with
Starbucks is terminated prior to the end of the
Plan Year because of disability or death, the
Compensation Committee (1) shall prorate the
Bonus Payout related to the Objective
Performance Goals, and (2) in its discretion,
may prorate the Bonus Payout related to
Individual Performance Goals. If the
Participant is on a leave of absence for a
portion of the Plan Year, the Compensation
Committee in its discretion may reduce the
Participant's Bonus Payout on a pro-rata basis.
The proration is based on the number of full
months during which the Participant
participated in the Plan during the Plan Year.
Credit is given for a full month if the
Participant is eligible for 15 or more calendar
days during that month.
If a Participant changes positions within
Starbucks during the Plan Year, the
Compensation Committee in its discretion may
prorate the Participant's Bonus Payout by the
number of months in each position.
ADMINISTRATION COMPENSATION COMMITTEE RESPONSIBILITIES:
Approve the Plan design, Objective Performance
Goals, and Individual Goals (if applicable) for
each Participant. Determine and certify the
achievement of the Objective Performance Goals
and Individual Goals. Approve the Bonus Payout
calculation and Bonus Payout for each
Participant.
In the event of a dispute regarding the Plan,
the Participant may seek resolution through the
executive vice president, Partner Resources and
the Compensation Committee. All determinations
by the Compensation Committee shall be final
and conclusive.
BONUS PAYOUT ADMINISTRATION The Bonus Payout will be made as soon as
administratively feasible and is expected to be
within approximately 75 days after the end of
the Plan Year. No amount is due and owing to
any Participant before the Compensation
Committee has determined the Bonus Payout.
The Company will withhold amounts applicable to
federal, state and local taxes, domestic or
foreign, required by law or regulation.
Contributions for Future Roast 401(k) and
Management Deferred Compensation Plan (MDCP)
are deducted from cash Bonus Payouts, based on
the Participants' elections then in effect.
TERMINATION OF EMPLOYMENT The Plan is not a contract of employment for
any period of time. Any Participant may resign
or be terminated at any time for any or no
reason. Employment and termination of
employment are governed by Starbucks policy and
any applicable employment agreement and not by
the Plan.
REVISIONS TO THE PLAN The Plan will be reviewed by the executive vice
president, Partner Resources and the
Compensation Committee on a periodic basis for
revisions. Starbucks reserves the right at its
discretion with or without notice, to review,
change, amend or cancel the Plan, at any time.