EXHIBIT 10.3 STARBUCKS CORPORATION 2005 NON-EMPLOYEE DIRECTOR SUB-PLAN TO THE STARBUCKS CORPORATION 2005 LONG-TERM EQUITY INCENTIVE PLAN

 

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                                                                    EXHIBIT 10.3

 

                              STARBUCKS CORPORATION

 

                       2005 NON-EMPLOYEE DIRECTOR SUB-PLAN

                                     TO THE

                              STARBUCKS CORPORATION

                      2005 LONG-TERM EQUITY INCENTIVE PLAN

 

      1. PURPOSE. The purpose of this Sub-Plan is (i) to assist in the

administration and implementation of the Starbucks Corporation 2005 Long-Term

Equity Incentive Plan (the "PLAN"), by providing additional procedures and

guidelines which apply specifically to Non-Employee Directors, and (ii) to

attract and retain the services of experienced and knowledgeable Non-Employee

Directors for the benefit of the Company and its shareholders. This Sub-Plan is

intended to provide an incentive for Non-Employee Directors by linking the

interests of the Non-Employee Directors with those of the Company's

shareholders.

 

      2. DEFINITIONS. Capitalized terms used without definition in this Sub-Plan

shall have the meanings given to such terms in the Plan. To the extent that any

term defined herein conflicts with the definition of such term under the Plan,

the definition in this Sub-Plan shall control.

 

      For purposes of the Sub-Plan:

 

            (a) "AWARD" shall mean any award or benefits granted under this

Sub-Plan, including Options, Restricted Stock and Restricted Stock Units.

 

            (b) "AWARD AGREEMENT" shall mean the written or electronic agreement

between the Company and the Participant setting forth the terms of the Award.

 

            (c) "BOARD" shall mean the Board of Directors of the Company.

 

            (d) "CHANGE IN CONTROL" shall mean the first day that any one or

more of the following conditions shall have been satisfied:

 

                  (i) the sale, liquidation or other disposition of all or

substantially all of the Company's assets in one or a series of related

transactions;

 

                  (ii) an acquisition (other than directly from the Company) of

any outstanding voting securities by any Person, after which such person (as the

term is used for purposes of Section 13(d) or 14(d) of the Exchange Act) has

Beneficial Ownership of twenty-five percent (25%) or more of the then

outstanding voting securities of the Company, other than a Board approved

transaction;

 

                  (iii) during any 36-consecutive month period, the individuals

who, at the beginning of such period, constitute the Board ("Incumbent

Directors") cease for any reason other than death to constitute at least a

majority of the members of the Board; provided however

 

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that except as set forth in this Section 2(f)(iii), an individual who becomes a

member of the Board subsequent to the beginning of the 36-month period, shall be

deemed to have satisfied such 36-month requirement and shall be deemed an

Incumbent Director if such Director was elected by or on the recommendation of

or with the approval of at least two-thirds of the Directors who then qualified

as Incumbent Directors either actually (because they were Directors at the

beginning of such period) or by operation of the provisions of this section; if

any such individual initially assumes office as a result of or in connection

with either an actual or threatened solicitation with respect to the election of

Directors (as such terms are used in Rule 14a-12(c) of Regulation 14A

promulgated under the Exchange Act) or other actual or threatened solicitations

of proxies or consents by or on behalf of a Person other than the Board, then

such individual shall not be considered an Incumbent Director; or

 

                  (iv) a merger, consolidation or reorganization of the Company,

as a result of which the shareholders of the Company immediately prior to such

merger, consolidation or reorganization own directly or indirectly immediately

following such merger, consolidation or reorganization less than fifty percent

(50%) of the combined voting power of the outstanding voting securities of the

entity resulting from such merger, consolidation or reorganization.

 

            (e) "MISCONDUCT" shall mean in the case of Non-Employee Directors,

the removal from the Board for cause (as determined by the Company's

shareholders).

 

            (f) "NON-EMPLOYEE DIRECTOR" shall mean a Director who is not a

Partner.

 

            (g) "OPTION" shall mean an option to purchase Shares granted

pursuant to this Sub-Plan that does not qualify or is not intended to qualify as

an incentive stock option under Section 422 of the Code.

 

            (h) "PARTICIPANT" shall mean each Non-Employee Director who has not

been a Partner at any time during the immediately preceding 12-month period, and

each permitted transferee of an Award under Section 6(e).

 

            (i) "PLAN" shall mean the Starbucks Corporation 2005 Long-Term

Equity Incentive Plan, as it may be amended from time to time.

 

            (j) "RESTRICTED STOCK" shall mean a grant of Shares pursuant to this

Sub-Plan.

 

            (k) "RESTRICTED STOCK UNITS" shall mean a grant of the right to

receive Shares in the future or their cash equivalent (or both) pursuant to this

Sub-Plan and may be paid in Shares, their cash equivalent or both.

 

            (l) "SUB-PLAN" means this Starbucks Corporation 2005 Non-Employee

Director Sub-Plan to the Plan, as such plan may be amended and restated from

time to time.

 

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      3. ADMINISTRATION OF THE SUB-PLAN.

 

            (a) BOARD. This Sub-Plan shall be administered by the Board, subject

to such terms and conditions as the Board may prescribe; provided that they are

consistent with the terms of the Plan. Notwithstanding anything herein to the

contrary, in its discretion the Board may delegate some or all of its authority

to administer this Sub-Plan to one or more committees of the Board.

 

            (b) AUTHORITY; POWERS. Subject to the express terms and conditions

set forth herein and the Plan, the Board shall have the discretion from time to

time:

 

                  (i) to grant Options, Restricted Stock and Restricted Stock

Units to Participants and to determine the terms and conditions of such Awards,

including the determination of the Fair Market Value of the Shares and the

exercise price, and to modify or amend each Award, with the consent of the

Participant when required;

 

                  (ii) to determine the Participants to whom Awards, if any,

will be granted hereunder, the timing of such Awards, and the number of Shares

to be represented by each Award;

 

                  (iii) to construe and interpret this Sub-Plan and the Awards

granted hereunder;

 

                  (iv) to prescribe, amend, and rescind rules and regulations

relating to this Sub-Plan, including the form of Award Agreement, and manner of

acceptance of an Award, such as correcting a defect or supplying any omission,

or reconciling any inconsistency so that this Sub-Plan or any Award Agreement

complies with applicable law, regulations and listing requirements and to avoid

unanticipated consequences deemed by the Board to be inconsistent with the

purposes of the Plan or any Award Agreement;

 

                  (v) to establish Performance Criteria (as defined in Section<