SESSION 5.1

Help Employees Get the Biggest Bang for their Buck, Yen, Euro:

Effective Participant Communications A Starbucks Case Study

Billy VitenseDirector, stock, Starbucks Coffee Company

Michelle LundquistDirector, Communications Consultant, Fidelity Investments

Billy Vitense Director, stock, Starbucks Coffee Company

Michelle Lundquist Director, Communications Consultant, Fidelity Investments

SESSION 5.4 Help Employees Get the Biggest Bang for their Buck, Yen, Euro:

Effective Participant Communications A Starbucks Case Study

Your Presenters

Moderator:

Michelle Lundquist Director, Communications Consultant Fidelity Investments Stock Plan Services

Presenter:

Billy Vitense Director, Stock Starbucks Coffee Company

Starbucks Coffee Company

Starbucks purchases and roasts high-quality whole bean coffees and sells them along with fresh, rich-

brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related

accessories and equipment – primarily through our Company-operated retail stores.

Starbucks: facts and figures

Founded  1971 Pike Place Market in Seattle, Washington

Folklore  Starbucks is named after the first mate in Herman Melville’s Moby Dick

Mission  To establish Starbucks as the purveyor of the finest coffee in the world

while maintaining our uncompromising principles as we grow

 Total store count: 16,706 as of 12/26/2009   All 50 States plus D.C.

  6,769 Company Operated Stores   4,412 Licensed Stores

  48 Countries outside the U.S.   2,081 company-operated stores   3,444 joint venture /licensed stores

 North American Partner Count: 123,280 as of 12/29/09

Starbucks Coffee Company

“It’s personal – one moment, one human being, one cup at a time. This is our

belief.”

“We are not in the coffee business serving people we are in the people business

serving coffee”

Starbucks Coffee Company

Equity-Based Compensation   Bean Stock, our broad-based Stock Option plan

•  Over 93,000 partners in 16 countries + 1 U.S Territory •  1st grant in 1991 before going public •  Grant annually, based on company performance

  Key Employee Equity Plan – Stock Option and Performance RSUs •  Approximately 600 partners •  Generally, director & above •  Grant to new hires, promotions monthly and annually

  ESPP – 423 Plan •  5% discount on date of purchases •  Quarterly purchases •  US and Canada

  Non-Employee Director Plan

“With Bean Stock’s introduction, we turned every employee of Starbucks into a Partner. I wanted them to have a chance to share in the benefits of growth, and to make clear the connection between their contributions and the growing value of the company.”

“Ultimately, Starbucks can’t flourish and win customers’ hearts without the passionate devotion of our Partners. In business,

that passion comes from ownership, trust and loyalty.” Howard Schultz, chairman, president and ceo

Starbucks Coffee Company

Starbucks Coffee Company

Purpose of Bean Stock

 Links shareholder value with long-term rewards for our partners

 Encourages ownership of Starbucks stock

 Provides incentive for partners to contribute and share in Starbucks success

What our partners say about Bean Stock

“Bean Stock motivates you. It drives you in your own personal growth because you see that you’re part of a bigger picture, part of a corporation that gives back to you and rewards you for what you do every day.

It definitely drives you to want to grow in the company and share it with others.”

- Jennifer Gatti, store manager, Hackensack

Starbucks and the First Shot….

Focus on providing a targeted message at the exact time a Partner message is needed.

 Emails from Corporate – @ grant, @ vest, @ tax time.  On site visits to Equity Markets.  Streamlined Partner communications

  CD that includes all languages, custom, translated cover letter for each Market, as needed.

What’s inside those Grant packets?

Bean Stock Grant Summary This page is a summary of the year’s grant information and also lists what else is in the pack.

A cover letter from Howard Schultz that thanks you for all your hard work.

Bean Stock Brochure that will help you make sense of your Bean Stock.

What’s inside those Grant packets?

Stock Option Grant Agreement: This shows the number of stock options the partner’s been allocated this time and how much each will cost when exercised.

Partner Information Supplement for Stock Options: This tells partners about some of the possible tax and legal requirements in your country which may apply to their stock options.

Starbucks Corporation 2005 Company-Wide Sub-Plan: a legal document which defines the rules, procedures and guidelines around the Bean Stock program.

Prospectus: A Plan Summary for the Starbucks Corporation 2005 Company-Wide Sub-Plan: Additional information about the plan including helpful questions and answers.

Fidelity and the Second Shot…

Quick Start approach  Fidelity communication format mirrors Starbucks

  CD format utilized to help Partners get started •  Library of information for ongoing reference

 At award, log in and get activated   Provide step-by-step log in and activation instructions

Drip communications  Messaging timed for when Partners need to take action  Right message, right time

  Target communications to event   Activation   Award acceptance   Vesting   Expiration

 Translate key pieces of information where Partners have the most confusion •  Understanding tax consequences •  Bank wire information

Results

Partner Loyalty  Better understanding of award  Appreciation of benefit  Comprehend how it fits into overall Total Pay package

Internal Efficiencies  HR and Store managers spend less time with last minute “fire drills”  Create an internal knowledge database with HR managers and key

contacts in the Markets  “Train the Trainer” approach

Challenges

Sustaining education is a constant challenge in a retail environment

New generation of partners  Social media; Facebook, Twitter, YouTube, Skype, etc, etc.

Ease of finding tools and resources  Portal  External web pages  Lack of email for retail partners

Q & A

Important Information

Fidelity Investments and/or Fidelity Stock Plan Services are not affiliated with Starbucks Coffee Company

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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