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Education Assistance Plan Overview
In conjunction with this Program, Starbucks has developed an Education Assistance Plan (“The
Plan”) pursuant to Section 127(b) of the Internal Revenue Code of 1986, as amended. Partners
may request a copy of The Plan by sending a request to
starbuckscollegeplan@starbucks.com
.
In the event of a conflict between this overview and The Plan, the written terms of The Plan will
govern.
Under Code Section 127, an Eligible Partner may receive educational assistance on a tax-free
basis, for federal payroll tax purposes, provided that the aggregate payments do not exceed
$5,250 per calendar year. Applicable state law may or may not be consistent with the exclusion
provided under federal law. Highlights of The Plan are listed below.
1) Eligibility: The eligibility requirements under The Plan are consistent with eligibility
requirement of this Program
2) Benefits: The benefit covered by the Education Assistance Plan is consistent with all
Program rules related to the Starbucks Tuition Benefit with the following exceptions:
a. The Education Assistance Plan benefit is limited to $5,250 per calendar year.
If the total Starbucks Tuition Benefit in a calendar year exceeds $5,250, only the
amount above the $5,250 limitation will be excluded from the Education Assistance
Plan benefit (see Taxable Payments below).
b. The Education Assistance Plan benefit does not include any tuition coverage from
merit-based academic scholarships and private scholarships.
c. Starbucks may include the amount of any Starbucks Tuition Benefit in an Eligible
Partner’s ordinary income if necessary in the discretion of Starbucks to assure that
the Program meets the requirements of Code Section 127.
d. If the Starbucks Tuition Benefit to (a) officers of Starbucks, (b) highly compensated
employees of Starbucks (as defined by Code Section 414(q)), or (c) Partners who
are spouses or dependents of those listed in (a) and (b) of this paragraph results in
prohibited discrimination or exceeds benefit limitations under Treasury Regulation
Sections 1.127-2(e) and (f), the such Eligible Partners will receive the Starbucks
Tuition Benefit as taxable ordinary income.
3) Limitations: Limitations under the Education Assistance Plan are consistent with
payment Limitations associated with the Starbucks Tuition Benefit.
4) Funding: Starbucks shall contribute the amount required to pay Benefits under The Plan
out of the general assets of the Employer at the time such Benefits are to be paid.
5) Administration and Claims Procedure: The Administration and Claims Procedure of The
Plan are consistent with this Program.
Taxable Tuition Coverage
The Eligible Partner shall be responsible for any income tax liability arising from any Starbucks
Tuition Benefit payment received under this Plan, whether or not Starbucks withheld tax on
those benefits.
With respect to any benefit provided by Starbucks that does not qualify for exclusion under
section 127 of the Code (or under applicable state law), Starbucks will include the value of the
benefit in the partner's wages, apply the appropriate payroll taxes (e.g., federal and state
income tax withholding, and FICA taxation), and report it as additional income on Form W-2 and
the relevant state employee wage statement.