2003 Compensation Charter: SBUX
Approved by the Board of Directors
March 24-25, 2003
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
The Compensation and Management Development Committee (the "Committee")
is responsible for working with management to establish appropriate compensation
practices for Starbucks Corporation (the "Company") and determining the compensation
and other benefits for officers of the Company holding positions of senior vice president
and above ("Senior Executive Officers"). In addition, the Committee is responsible for
overseeing the development and implementation of management development plans and
succession planning practices to ensure that the Company has sufficient management
depth to support its continued growth and the talent needed to execute long term
strategies even in the event that one or more members of senior management retire or
otherwise leave the Company.
The Committee shall be comprised of at least three (3) members, each of whom
shall meet the independence requirements of The Nasdaq Stock Market, Inc., and qualify
as an "outside director" under Section 162(m) of the Internal Revenue Code and as a
"non-employee director" under Rule 16b-3 promulgated under the Securities and
Exchange Act of 1934, as amended. The Board of Directors shall appoint a new member
or members in the event that there is a vacancy on the Committee that reduces the
number of members below three (3), or in the event that the Board determines that the
number of members on the Committee should be increased.
The Committee shall meet at least four times each fiscal year, and may hold
additional meetings in person or telephonically as often as may be necessary or
appropriate, in the discretion of the Chairperson of the Committee. Prior to each
meeting, the Chairperson of the Committee will circulate or discuss the agenda for the
meeting with each member of the Committee.
Members of the Committee are expected to use all reasonable efforts to attend
each meeting. The Chairperson of the Committee may also request that members of
management, legal counsel, or other advisors attend the meetings of the Committee.
Minutes of each meeting shall be prepared under the direction of the Chairperson
of the Committee and circulated to each member of the Committee for review and
Committee Authority and Responsibilities
The specific authority and responsibilities of the Committee shall include, but are
not limited to, the following:
1. Retain a compensation consultant or firm to be used to assist the Committee in
benchmarking and setting appropriate compensation levels and policies and approve
such consultant's or firm's fees and other retention terms. The Committee's authority
to retain one or more compensation consultants shall not be deemed to restrict
management's authority to retain consultants or advisors as needed and appropriate.
2. Form and delegate responsibilities to subcommittees of the Committee, as may be
necessary or appropriate.
3. Conduct an annual review of and recommend the Company's compensation packages
for Senior Executive Officers of the Company, including the chief global strategist
and the chief executive officer. In connection therewith, the Committee shall review
and recommend (a) the annual base salary level, (b) the annual cash bonus
opportunity level, and (c) the long-term incentive opportunity level for each Senior
Executive Officer. The Committee's recommendations shall be reviewed and
approved by a panel consisting of all of the non-employee directors of the Board.
Non-employee directors who do not meet the independence requirements for the
Committee may participate in such panel discussions, but shall not vote on whether to
approve the Committee's recommendations.
4. Annually recommend the objective performance measures and the performance
targets for executive officers participating in the Executive Management Bonus Plan
for approval by the panel of non-employee directors of the Board and for certifying
the performance of such executive officers at the end of each fiscal year.
5. Annually review the performance of the Company's Senior Executive Officers and
the succession plans for each such officer's position.
6. Together with the Chairperson of the Nominating and Corporate Governance
Committee, the Chairperson of the Committee shall annually review the performance
of the chief executive officer and the chief global strategist and meet with each such
officer to share the findings of such review.
7. Conduct an annual review of and approve the Company's management development
and succession planning practices and strategies.
8. Review and approve employment terms and agreements for new Senior Executive
Officers, any severance arrangements for Senior Executive Officers, and any change
of control, indemnification or other employment or compensation-related agreements
to be entered into with Senior Executive Officers.
9. Approve, modify and administer the Company's stock purchase and stock option
plans, the Executive Management Bonus Plan and the Deferred Stock Plan.
10. Review and approve the Committee's report regarding executive compensation and
other compensation information that is required in the Company's Proxy Statement
for its annual meeting of shareholders.
11. Periodically review other human resources programs and initiatives, such as
12. Make regular reports to the full Board of Directors.
13. Review the adequacy of this Charter and the Timetable for Committee Activities
annually, or more often as circumstances dictate, and update or revise the Charter and
Timetable as appropriate.
14. Periodically evaluating and taking steps to improve the effectiveness of the
Committee in meeting its responsibilities under this Charter.
This Charter is intended to provide a set of flexible guidelines for the effective
functioning of the Committee. The Committee may modify or amend this
Charter and the authority and responsibilities of the Committee set forth herein
at any time.