Starbucks 2007 Annual Report Download - page 66

Restricted Stock Units
In fiscal 2007 the Company granted service-based RSUs to certain of its senior executives. The fair values of the
RSUs are based on the fair value of common stock. RSUs entitle the grantee to receive shares of common stock at
the end of a vesting period, subject to the executive’s continuing employment. As of September 30, 2007, there were
0.2 million RSUs outstanding and total unrecognized stock-based compensation expense related to nonvested RSUs
of approximately $5 million, before income taxes, which is expected to be recognized over a weighted average
period of approximately 36 months.
Employee Stock Purchase Plans
The Company has an ESPP allowing eligible employees to contribute up to 10% of their base earnings toward the
quarterly purchase of the Company’s common stock. The employees’ purchase price is 85% of the lesser of the fair
market value of the stock on the first business day or the last business day of the quarterly offering period.
Employees may purchase shares having a fair market value of up to $25,000 (measured as of the first day of each
quarterly offering period for each calendar year). The total number of shares issuable under the plan is 32.0 million.
There were 1.9 million shares issued under the plan during the fiscal year ended September 30, 2007 at an average
price of $24.59. There were 1.5 million shares issued under the plan during the fiscal year ended October 1, 2006 at
an average price of $26.81. There were 1.5 million shares issued under the plan during the fiscal year ended
October 2, 2005 at an average price of $21.27. Since inception of the plan, 18.2 million shares have been purchased,
leaving 13.8 million shares available for future issuance.
Starbucks had an additional employee stock purchase plan in the United Kingdom (“SAYE” plan) that allowed
eligible UK employees to save toward the purchase of the Company’s common stock. The final offering under the
plan was made in fiscal 2003 and final purchase in fiscal 2006. In fiscal 2004, the UK Share Incentive Plan was
introduced to replace the SAYE plan. This plan allows eligible UK employees to purchase shares of common stock
through payroll deductions during six-month offering periods at the lesser of the fair market value of the stock at the
beginning or at the end of the offering period. The Company will award one matching share for each six shares
purchased under the plan. The total number of shares issuable under the plan is 1.4 million. There were
13,814 shares issued under the plan during the fiscal year ended September 30, 2007 at an average price of
$33.56. There were 11,138 shares issued under the plan during the fiscal year ended October 1, 2006 at an average
price of $26.42. There were 10,732 shares issued under the plan during the fiscal year ended October 2, 2005 at an
average price of $22.08. As of September 30, 2007, 1.36 million shares were available for future issuance.
Deferred Stock Plan
Starbucks has a deferred stock plan for certain key employees that enables participants in the plan to defer receipt of
ownership of common shares from the exercise of nonqualified stock options. The minimum deferral period is five
years. As of September 30, 2007, receipt of 3.4 million shares was deferred under the terms of this plan. The rights
to receive these shares, represented by common stock units, are included in the calculation of basic and diluted
earnings per share as common stock equivalents. No new initial deferrals are permitted under this plan; the plan
permits re-deferrals of previously deferred shares.
Defined Contribution Plans
Starbucks maintains voluntary defined contribution plans, both qualified and non-qualified, covering eligible
employees as defined in the plan documents. Participating employees may elect to defer and contribute a portion of
their compensation to the plans up to limits stated in the plan documents, not to exceed the dollar amounts set by
applicable laws. For employees in the United States, the Company matched 25% to 150% of each employee’s
eligible contribution based on years of service, up to a maximum of the first 4% of each employee’s compensation.
The Company’s matching contributions to all U.S. and non-U.S. plans were approximately $20.1 million,
$19.3 million and $12.4 million in fiscal years 2007, 2006 and 2005, respectively.
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