EXHIBIT 10.1
[LETTERHEAD OF STARBUCKS CORPORATION]
December 15, 2005
Mr. Xxxxxx Xxxxx
Starbucks Corporation
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
RE: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Dear Xxxxxx:
This letter contains your amended and restated employment agreement with
Starbucks Corporation ("Starbucks") effective as of November 28, 2005 ("this
Agreement"), and replaces in all respects your employment agreement dated May 6,
2003 (the "Prior Employment Agreement").
EMPLOYMENT TERM
Your employment commenced on November 1, 2002, and shall continue until October
31, 2010 (the "Term"). If this Agreement is earlier terminated as provided
below, the Term shall end on the date of such earlier termination.
DUTIES
During the Term, you will be asked to provide reasonable advisory services from
time to time on an "as needed" basis to the president and chief executive
officer ("ceo") of Starbucks or the ceo's designee. You will not be required to
provide services for which you are not qualified. You may perform services for
others on a paid consulting basis, and you may serve on boards of directors of
other companies so long as such activities do not conflict with the Starbucks
Standards of Business Conduct or your duties as a Starbucks director.
BASE SALARY
You will continue to be paid bi-weekly at a base salary that annualizes to
$25,000.00, less regular wage withholding, during the Term in consideration for
your ongoing role as a non-executive advisor to Starbucks. You are not eligible
for any type of cash bonus from Starbucks. If you die prior to October 31, 2010,
Starbucks will pay, or cause an insurer to pay, to your surviving spouse (or to
your estate if your spouse does not survive you) a single sum amount equal to
the unpaid base salary you would have received through the then remaining Term.
Mr. Xxxxxx Xxxxx
December 15, 2005
Page 2
BENEFITS
You will continue to be eligible for employee benefits in accordance with the
terms of Starbucks medical, dental, vision and 401(k) plans. The required
employee contributions for coverage under these plans will be deducted from your
bi-weekly paychecks. You will also be eligible for basic life insurance coverage
and short-term and long-term disability coverage, all of which coverages will be
determined in accordance with your base salary, and the terms of the governing
plans.
DEFERRED COMPENSATION
The Prior Employment Agreement provided for payment of $1,800,000.00 in deferred
compensation in specified installments. Through December 2, 2005, Starbucks has
paid $693,172.90 accordingly. That deferred compensation arrangement will be
terminated as of the effective date of this Agreement and the unpaid balance
paid to you, less regular wage withholding, as soon as administratively
practicable but in no event later than December 31, 2005.
You will not be eligible to participate in the Starbucks Corporation Management
Deferred Compensation Plan (the "MDCP") in 2005 and for the remainder of the
Term. This Agreement does not affect your pre-2005 accounts in the MDCP, which
accounts remain subject to the terms and conditions of the MDCP.
EQUITY AWARDS
Through the remainder of the Term while you remain employed by Starbucks, you
will receive an annual Award (as defined in the 2005 Long-Term Equity Incentive
Plan (the "Omnibus Plan") and the 2005 Key Employee Sub-Plan (the "Key Employee
Plan")) under the terms of the Omnibus Plan and the Key Employee Plan made at
the same time as the annual grant of Awards under the Key Employee Plan. For
each such Award, its fair value will equal $105,000.00 (rounded to the nearest
whole share of stock or other Award increment) on the grant date, calculated in
accordance with the methodology used by the Starbucks Compensation and
Management Development Committee for valuing the Award. If the Award is in the
form of stock options, its exercise price will equal the fair market value of
Starbucks common stock on the grant date. Assuming your continued employment by
Starbucks, each Award will fully vest one year after the date of grant. All
other terms of the Award will be consistent with the standard form of grant
agreement under the Key Employee Plan as in effect on the date of grant, except
that if the Award is subject to vesting, the vesting of the Award will not be
accelerated upon your Retirement, as that term is defined in the Omnibus and Key
Employee Plans. During the Term, you will be considered an employee director of
Starbucks and therefore ineligible to receive any compensation for your service
as a Starbucks director.
Mr. Xxxxxx Xxxxx
December 15, 2005
Page 3
EXPENSES AND ADMINISTRATIVE SUPPORT
Starbucks shall reimburse you for all reasonable and customary expenses incurred
by you in performing your duties, including, but not limited to, reasonable
travel expenses.
To assist you in your advisory role, Starbucks will continue to provide an
office, computer, cell phone and administrative and secretarial assistance as
you reasonably require. In addition, you will continue to have access to the
building and parking garage. The parking fee will be deducted from your
paychecks.
TERMINATION
Starbucks may terminate this Agreement prior to October 31, 2010 if you are
unable to perform your duties because of physical or mental disability.
Starbucks may also terminate this Agreement prior to October 31, 2010 "for
cause" to include, without limitation, your unreasonable refusal to perform your
duties or any violation of the Starbucks Standards of Business Conduct.
You may terminate this Agreement before October 31, 2010 by providing Starbucks
with notice of your resignation. In the event you resign, Starbucks will pay
your base salary through the end of the workweek in which Starbucks receives
your notice of resignation and you will not be entitled to any further
compensation or benefits as a partner of Starbucks except as is provided to a
Starbucks retiree generally.
MISCELLANEOUS
This Agreement contains the entire agreement between the parties and supersedes
any and all prior and contemporaneous oral or written agreements or
understandings pertaining to the subject matter herein. No amendment to this
Agreement will be effective unless it is in writing and signed by both parties.
This Agreement will be governed by the laws of the State of Washington, without
regard to its conflicts of law provisions.
This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed and delivered shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
Xxxxxx, thank you for your continued service to Starbucks and our partners,
shareholders and customers. If you agree with the terms and conditions of this
Agreement specified above, please sign in the space provided below and return
the original to me.
Mr. Xxxxxx Xxxxx
December 15, 2005
Page 4
Warm regards,
/s/ Xxx Xxxxxx
Xxx Xxxxxx
president and chief executive officer
I agree to the terms and conditions of this Agreement, which I have read and
understand.
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
12-16-05
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