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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DCD.C. 20549
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FORM 10-K
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FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED OCTOBER 3, 19991, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________ .
COMMISSION FILE NUMBER:NUMBER 0-20322
STARBUCKS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 91-1325671
(STATE OR OTHER JURISDICTION OF INCORPORATION (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
OR ORGANIZATION)
2401 UTAH AVENUE SOUTH, SEATTLE, WASHINGTON 98134
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (206) 447-1575
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, NO PAR VALUE PER SHARE
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation of S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form l0-K.10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based upon the closing sale price of the Registrant's Common
Stock on December 1, 1999,15, 2000, as reported on the National Market tier of The
Nasdaq Stock Market, Inc. was $4,732,328,104.$7,704,027,788.
As of December 20, 1999,15, 2000, there were 182,699,160188,187,571 shares of the Registrant's
Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the fiscal
year ended October 3, 19991, 2000 have been incorporated by reference into Parts II and
IV of this Annual Report on Form 10-K. Portions of the definitive Proxy
Statement for the Registrant's Annual Meeting of Shareholders to be held on
February 14, 2000March 20, 2001 have been incorporated by reference into Part III of this Annual
Report on Form 10-K.
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CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Certain statements set forth in or incorporated by reference into this
Annual Report on Form 10-K, including anticipated store and market openings,
planned capital expenditures and trends in or expectations regarding the
Company's operations, specifically including the effect of problems associated with the
year 2000, constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such statements are
based on currently available operating , financial and competitive information
and are subject to various risks and uncertainties. Actual future results and
trends may differ materially depending on a variety of factors, including, but
not limited to, coffee and other raw materials prices and availability,
successful execution of internal performance and expansion plans, the impact of
competition, the effect of legal proceedings and other risks detailed herein.
PART I
ITEM 1. BUSINESS
General. Starbucks Corporation and its subsidiaries (collectively
"Starbucks" or the "Company") purchases and roasts high quality whole bean
coffees and sells them, along with fresh, rich-brewed coffees, Italian-style
espresso beverages, cold blended beverages, a variety of pastries and
confections, coffee-related accessories and equipment, and a line of premium
teas, primarily through its Company-operated retail stores. In addition to sales
through its Company-operated retail stores, Starbucks sells coffee and tea
products through other channels of distribution (collectively, "specialty
operations"). Starbucks, through its joint venture partnerships, also produces
and sells bottled Frappuccino(R) coffee drink and a line of premium ice creams.
The Company's objective is to establish Starbucks as the most recognized and
respected brand in the world. To achieve this goal, the Company plans to
continue to rapidly expand its retail operations, grow its specialty operations
and selectively pursue other opportunities to leverage the Starbucks brand
through the introduction of new products and the development of new distribution
channels.
Company-Operated Retail Stores. The Company's retail goal is to become the
leading retailer and brand of coffee in each of its target markets by selling
the finest quality coffee and related products and by providing superior
customer service, thereby building a high degree of customer loyalty. Starbucks
strategy for expanding its retail business is to increase its market share in
existing markets and to open stores in new markets where the opportunity exists
to become the leading specialty coffee retailer. In furtherance of this
strategy, the Company opened 460490 new stores converted 56 stores acquired in May
1998 from Seattle Coffee Holdings Limitedduring the fiscal year ended October
1, 2000 ("Seattle Coffee Company"fiscal 2000") to
Starbucks stores and converted 26 stores acquired in March 1999 from Pasqua Inc.
("Pasqua"), a San Francisco based coffee retailer, to Starbucks stores. As of
October 3, 1999,. At fiscal year end, Starbucks had 2,1352,619
Company-operated stores in 34 states, the District of Columbia and five Canadian
provinces and(which comprise the Company-operated North American retail
operations), as well as the United Kingdom.Kingdom, Thailand and Australia (which
comprise the Company-operated international retail operations). Company-operated
retail stores accounted for approximately 85%84% of net revenues during the fiscal
year ended October 3, 1999 ("fiscal 1999").2000. The Company intends to finance additional growth in the number of
Company-operated retail stores with cash flow from operations, supplemented by debt financing, if
necessary.operations.
Starbucks retail stores are typically clustered in high-traffic,
high-visibility locations. Because the Company can vary the size and format of
its stores, Starbucks stores are located in a variety of settings, including
downtown and suburban retail centers, office buildings, supermarket foyers and
on university campuses. While the Company selectively locates stores in suburban
malls, it focuses on stores that arehave convenient access for pedestrian street traffic.pedestrians and
drivers.
All Starbucks stores offer a choice of regular and decaffeinated coffee
beverages, including at least one "coffee of the day," a broad selection of
Italian-style espresso beverages, cold blended beverages, a selection of teas
and distinctively packaged, roasted whole bean coffees. Starbucks stores also
offer a selection of fresh pastries and other food items, sodas, juices, and
coffee-making equipment and accessories. Each Starbucks store varies its product
mix depending upon the size of the store and its location. Larger stores carry a
broad selection of the Company's whole bean coffees in various sizes and types
of packaging, as well as an assortment of coffee and espresso-making equipment
and accessories such as coffee grinders, drip coffee makers, espresso machines,
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coffee filters, storage containers, travel tumblers and mugs. Smaller Starbucks
stores and kiosks typically sell a full line of coffee beverages, a more limited
selection of whole bean coffees and a few
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accessories such as travel tumblers and logo mugs. Approximately 15% of
Starbucks stores carry a selection of "grab and go" sandwiches and salads.
During fiscal 1999,2000, the Company's retail sales mix by product type was
approximately 69%73% handcrafted beverages, 15%14% food items, 10%8% whole bean coffees,
and 6%5% coffee-making equipment and accessories.
Specialty Operations. Starbucks specialty operations strive to develop the
Starbucks brand outside the Company-operated retail store environment through a
number of channels. Starbucks strategy for expanding its specialty operations is
to reach customers where they work, travel, shop and dine by establishing
relationships with prominent third parties who share Starbucks values and
commitment to quality. These relationships take various forms, including domestic wholesale accounts, domestic retail
store licensing agreements, wholesale accounts, grocery channel licensing
agreements domesticand joint ventures and international
licensing agreements.ventures. Starbucks specialty operations also include
direct-to-consumer marketing channels. In certain licensing situations, the
licensee is a joint venture in which Starbucks has an equity ownership interest.
During fiscal 1999,2000, specialty revenues (which include royalties and fees from
licensees as well as product sales) accounted for approximately 15%16% of the
Company's net revenues.
Domestic Wholesale Accounts. Starbucks sells whole bean and ground coffees
to several types of domestic wholesale accounts, including (i) foodservice
accounts, which include office coffee distributors and institutional foodservice
management companies that service business, industry, education and healthcare
accounts, and hotels, airlines and restaurants; and (ii) warehouse club stores.
During fiscal 1999, sales to domestic wholesale accounts comprised 8% of the
Company's net revenues.
DomesticNorth American Retail Store Licensing. Although the Company does not
generally relinquish operational control of its retail stores in North
America, in situations in which a master concessionaire or another company
controls or can provide improved access to desirable retail space, the
Company may consider licensing its operations. As part of these
arrangements, Starbucks receives license fees and royalties and sells
coffee and related products for resale in the licensed locations. Employees
working in the licensed locations must follow Starbucks detailed
store-operating procedures and attend training classes similar to those
given to Starbucks store managers and employees. As of October 3, 1999,1, 2000, the
Company had 179530 licensed stores in continental North America.
DomesticInternational Retail Store Licensing. Starbucks retail stores located
outside of North America, the United Kingdom, Thailand and Australia are
operated through a number of joint venture and licensing arrangements with
prominent retailers. During fiscal 2000, the Company expanded its
international presence by opening 184 new international licensed stores,
including the first stores in Lebanon, the United Arab Emirates, Qatar,
Hong Kong and Shanghai. At fiscal year end, the Company had 154 stores in
Japan, 47 in Taiwan, 28 in China, 28 in Singapore, 27 in the Philippines,
20 in Hawaii, 15 in New Zealand, 14 in Malaysia, six in South Korea, five
in the United Arab Emirates, four in Kuwait, three in Lebanon, and one in
Qatar.
Wholesale Accounts. Starbucks sells whole bean and ground coffees to
several types of wholesale accounts, including office coffee distributors
and institutional foodservice management companies that service business,
industry, education and healthcare accounts, and hotels, airlines and
restaurants.
Grocery Channel Licensing. In fiscal 1998, Starbucks entered into a
long-term licensing agreement with Kraft Foods, Inc. ("Kraft") to
accelerate the growth of the Starbucks brand into the grocery channel in
the United States. Pursuant to such agreement, Kraft manages all
distribution, marketing, advertising and promotions for Starbucks whole
bean and ground coffee in grocery, warehouse club and mass merchandise
stores. By the end of fiscal 1999,2000, the Company's whole bean and ground
coffees were available throughout the United States in 15 states and
approximately 8,50016,000
supermarkets. The Company expects to achieve national
distribution by the middle of fiscal 2000.
Domestic
Joint Ventures. The Company has two non-retail domestic 50-50 joint
ventures. The North American Coffee Partnership, a joint venture with the
Pepsi-Cola Company, a division of PepsiCo, Inc., was formed in fiscal 1994
to develop and distribute ready-to-drink coffee-based products. In May 1996, The
North American Coffee Partnership introduced bottled Frappuccino coffee drink in
selected supermarkets and other retail points of distribution throughout the
west coast of the United States. By the end
of fiscal 1999,2000, the joint venture was distributing bottled Frappuccino
coffee drink to approximately 200,000250,000 supermarkets, convenience and drug
stores and other locations throughout the United States and Canada. The
Company formed a joint venture with Dreyer's Grand Ice Cream, Inc. in
fiscal 1996 to develop and distribute Starbucks premium coffee ice creams.
By the end of fiscal 1999,2000, the joint venture was distributing 17a variety of
ice cream and novelty products to over 21,000 supermarkets throughout the
United States. (See Note 6 to the Company's consolidated financial
statements, "Joint Ventures, and Other
Investments," incorporated by reference to the Company's
1999Fiscal 2000 Annual Report to Shareholders in Item 8 of this Form 10-K.)
International Licensing. Starbucks retail stores located outside of
continental North America and the United Kingdom are operated through a number
of joint venture and licensing arrangements with prominent retailers. During
fiscal 1999, the Company expanded its international presence by opening 121 new
stores
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outside of North America and the United Kingdom, including the first stores in
China, Malaysia, South Korea, New Zealand and Kuwait. At fiscal year end, the
Company had 82 stores in Japan, 23 in Taiwan, 21 in Singapore, 17 in Hawaii, 14
in the Philippines, 9 in China, 7 in Thailand, 6 in New Zealand, 2 in Malaysia,
2 in Kuwait and 1 in South Korea.
Direct-to-Consumer Marketing. The Company makes fresh Starbucks coffee
and coffee-related products conveniently available via mail order and
on-line. Starbucks publishes and distributes a mail order catalog that
offers its coffees, certain food items and select coffee-making equipment
and accessories, and the Company maintains a web site at www.starbucks.com
with an on-line store that allows customers to browse for and purchase
coffee, gifts and other items via the Internet. Management believes that
the Company's direct-to-consumer operations support its retail store
expansion into new markets and reinforce brand recognition in existing
markets.
Product Supply. Starbucks is committed to selling only the finest whole
bean coffees and coffee beverages. To ensure compliance with its rigorous coffee
standards, Starbucks controls itsit coffee purchasing, roasting and packaging, and
the distribution of coffee to its retail stores. The Company purchases green
coffee beans for its many blends and single origin coffees from coffee-producing
regions around the world and custom roasts them to its exacting standards.
The supply and price of coffee are subject to significant volatility.
Although most coffee trades in the commodity market, coffee of the quality
sought by the Company tends to trade on a negotiated basis at a substantial
premium above commodity coffee prices, depending upon the supply and demand at
the time of purchase. Supply and price can be affected by multiple factors in
the producing countries, including weather, political and economic conditions.
In addition, green coffee prices have been affected in the past, and may be
affected in the future, by the actions of certain organizations and associations
that have historically attempted to influence commodity prices of green coffee
through agreements establishing export quotas or restricting coffee supplies
worldwide.
The Company depends upon its relationshipsrelationship with outside trading companies
and exporters for its supply ofor green coffee. To secure an adequate supply and
to fix costs for future periods, the Company routinely enters into fixed-price
purchase commitments for future deliveries of coffee. As of October 3, 1999,1, 2000, the
Company had approximately $84 million in fixed-price purchase commitments which,
together with existing inventory, is expected to provide an adequate supply of
green coffee for the majority of fiscal 2000.2001. The Company believes, based on
relationships established with its suppliers in the past, that the risk of
non-delivery on such purchase commitments is remote. In addition, the Company
may from time to time purchase and sell coffee futures contracts as a hedging
mechanism to minimize cost risk due to market fluctuations. There can be no assurance
that these activities will successfully protect the Company against the risks of
higher coffee prices or that such activities will not result in the Company
having to pay substantially more for its coffee supply than it would have been
required to pay absent such activities.
In addition to coffee, the Company also purchases significant amounts of
dairy products to support the needs of its retail stores. Fluid milk
requirements are purchased from local processors and distributors to ensure
quality and reliable service. Dairy prices vary throughout the year as supply
and demand fluctuate and are subject to additional changes due to government
regulations. The Company obtains competitive prices through a combination of
competitive bidding and negotiations with its suppliers.
The Company also purchases a broad range of paper and plastic products,
such as paper cups, plastic cold cups, hot cup lids, napkins, straws, shopping
bags and corrugated paper boxes from several companies to support the needs of
its retail stores as well as its manufacturing and distribution operations. The
cost of these materials are somewhat dependent upon commodity paper and plastic
resin costs, but the Company believes it mitigates the effect of short-term raw
material price increases through strategic relationships with key suppliers.
Products other than whole bean coffees and coffee beverages sold in
Starbucks retail stores are obtained through a number of different channels.
Specialty foods, such as fresh pastries and lunch items, are generally purchased
from both regional and local sources based on quality and price. Coffee-making
equipment, such as drip, vacuum and french
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5 press coffee makers, espresso
machines and coffee grinders, are generally purchased directly from their
manufacturers for resale. Coffee-related accessories, including items bearing
the Company's logos and trademarks, are produced and distributed through
contracts with a number of different vendors.
Competition. The Company's primary competitors for coffee beverage sales
are restaurants, coffee shops, and street carts. In almost all markets in which
the Company does business there has been a significant increase in competitionare numerous
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competitors in the specialty coffee beverage business, and management expects
this trend to continue. Although competition in the beverage market is currently
fragmented, a major competitor with substantially greater financial, marketing
and operating resources than the Company could enter this market at any time and
compete directly against the Company.
The Company's whole bean coffees compete directly against specialty coffees
sold at retail through supermarkets, specialty retailers, and a growing number
of specialty coffee stores. Both the Company's whole bean coffees and its coffee
beverages compete indirectly against all other coffees on the market. The
Company believes that its customers choose among retailers primarily on the
basis of product quality, service and convenience, and, to a lesser extent, on
price.
Management believes that supermarkets are the most competitive distribution
channel for specialty whole bean coffee, in part because supermarkets offer
customers a variety of choices without having to make a separate trip to a
specialty coffee store. A number of nationwide coffee manufacturers are
distributing premium coffee products in supermarkets that may serve as
substitutes for the Company's coffees. Regional specialty coffee companies also
sell whole bean coffees in supermarkets.
In addition to the competition generated by supermarket sales of coffee,
Starbucks competes for whole bean coffee sales with franchise operators and
independent specialty coffee stores. In virtually every major metropolitan area
where Starbucks operates and expects to expand, there are local or regional
competitors with substantial market presence in the specialty coffee business.
Starbucks specialty operations also face significant competition from
established wholesale and mail order suppliers, some of whom have greater
financial and marketing resources than the Company.
In addition, to the competition for coffee beverage retail sales and whole
bean coffee, the Company faces intense competition from both restaurants
and other specialty retailers for suitable sites for new stores and qualified
personnel to operate both new and existing stores. There can be no assurance
that Starbucks will be able to continue to secure adequate sites at acceptable
rent levels or that the Company will be able to attract a sufficient number of
qualified workers. Starbucks specialty sales operations also face significant
competition from established wholesale and mail order suppliers, some of whom
have greater financial and marketing resources than the Company.
Patents, Trademarks, Copyrights and Domain Names. The Company owns and/or
has applied to register numerous trademarks and service marks in the United
States, Canada and in more than 125 additional countries throughout the world.
Rights to the trademarks and service marks in the United States are generally
held by Starbucks U.S. Brands Corporation, a wholly-owned subsidiary of the
Company, and are used by the Company under license. Some of the Company's
trademarks, including "Starbucks," the Starbucks logo and "Frappuccino," are of
material importance to the Company. Trademarks are generally valid as long as
they are in use and/or their registrations are properly maintained, and they
have not been found to have become generic. Trademark registrations can
generally be renewed indefinitely so long as the marks are in use.
The Company also owns numerous copyrights for its product packaging,
promotional materials, in-store graphics and training materials, among other
things. The Company also holds patents on certain products, systems and designs.
In addition, the Company has registered and maintains numerous Internet domain
names, including "Starbucks.com" and "Starbucks.net." While valuable, individual
copyrights, patents and domain names currently held by the Company are not
viewed as material to the Company's business.
Research and Development. The Company's Researchresearch and Development department
is comprised ofdevelopment efforts
are led by food scientists, engineers, chemists and techniciansculinarians in the Technical
Support Services and Development department who are responsible for the
formulation and technical development of new equipment, food and beverage products and manufacturing processes.new equipment. Recent
development efforts have resulted in successful flavor line extensions for latte
beverages, Frappuccino blended beverages and new items for the Company's morning
pastry and lunch lines. The department has played a
major rolealso introduced improvements in base
ingredients to aid in the expansiondistribution of the bottled Frappuccino categoryproducts to international markets and
coffee ice
cream offerings. Development of novel coffee ingredients and a new dairy base
have improved the Company's abilityformulation changes to deliver blended Frappuccino worldwide,
while technical support of the tea and juice beverage development has resulted
in new
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formulations and line extensions in the Company's blended fruit and tea beverage
line, Tiazzi(R).tea-based beverages. The Company spent approximately $5.0$4.0
million during fiscal 19992000 on technical research and development activities, in
addition to customary product testing and product and process improvements in
all areas of the Company's business.
Seasonality and Quarterly Results. The Company's business is subject to
seasonal fluctuations. Significant portions of the Company's net revenues and
profits are realized during the first quarter of the Company's fiscal year that
includes the December holiday season. In addition, quarterly results are
affected by the timing
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of the opening of new stores, and the Company's rapid growth may conceal the
impact of other seasonal influences. Because of the seasonality of the Company's
business, results for any quarter are not necessarily indicative of the results
that may be achieved for the full fiscal year.
Employees. As of October 3, 1999,1, 2000, the Company employed approximately 37,00047,000
individuals, approximately 34,00043,000 in retail stores and regional offices and the
remainder in the Company's administrative, specialty, real estate, roasting, and
warehousing operations. At fiscal year end, employees at 12 of the Company's
stores and a group of maintenance mechanics and technicians at one roasting
plant were represented by unions. Starbucks has entered into a labor agreement
governing such stores that extends until July 2001.2001 and is currently in
negotiations with the union representing the roasting plant employees. The
Company believes that its current relations with its employees are good.
ITEM 2. PROPERTIES
Starbucks currently operates fourthree roasting and distribution
facilities -- twoone in the Seattle, Washington area, one in East Manchester
Township, York County, Pennsylvania and onea smaller facility in London, England.
In the Seattle area, the Company owns a roasting plant and distribution facility
of approximately 305,000 square feet and leases atwo warehouse facility offacilities
totaling approximately 156,000200,000 square feet in Kent, Washington (the "Kent
Plant"). The Company also leases approximately 92,000 square feet in a building in Seattle,
Washington pursuant to a lease extendable through 2001 (the "Seattle Plant"). On
September 1, 1999, the Company purchasedowns a 365,000 square foot roasting and distribution
facility that it previously had leased in York County, Pennsylvania (the "York
Plant"). The Company has an option to purchase an additional parcel of land
adjacent to the York Plant until August 2001. In connection with the purchase of
the York Plant, the Company assumed loans totaling approximately $7.7 million
incurred in connection with its development. TheIn addition, the Company also leases a
small roasting and storage facility in London, England that supports its
operations in the United Kingdom. The lease for this facility expires in 20072002
unless extended by the parties.
The Company leases approximately 456,000510,000 square feet of a building located
in Seattle, Washington for administrative offices and has options to lease
approximately 100,00040,000 additional square feet in such building. The Company also
leases approximately 38,000 square feet in a building in Seattle, Washington
pursuant to a lease extendable through June 2001 (the "Resource Center"). The
Company owns 2.36 acres (102,800 square feet) of undeveloped land near its
administrative offices and adjacent to the Seattle Plant,Resource Center, which is used for
parking.
As of October 3, 1999,1, 2000, Starbucks operated a total of 2,1352,619 retail stores.
All Starbucks stores are located in leased premises. The Company also leases
space in approximately 5075 additional locations for regional, district and other
administrative offices, training facilities and storage, not including certain
seasonal retail storage locations.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to various legal proceedings arising in the ordinary
course of its business, but is not currently a party to any legal proceeding
which the Company believes will have a material adverse effect on the financial
position or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of fiscal year 1999.
62000.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The information required by this item is incorporated herein by reference
to the section entitled "Shareholder Information" in the Company's 1999Fiscal 2000
Annual Report to Shareholders.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated herein by reference
to the section entitled "Selected Financial Data" in the Company's 1999Fiscal 2000
Annual Report to Shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is incorporated herein by reference
to the section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's 1999Fiscal 2000 Annual Report
to Shareholders.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is incorporated herein by reference
to the section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Financial Risk Management" in the
Company's 1999Fiscal 2000 Annual Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein by reference
to the Consolidated Financial Statements and the notes thereto in the Company's
1999Fiscal 2000 Annual Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning the directors of the Company and compliance with
Section 16(a) of the Securities Exchange Act of 1934, as amended, is
incorporated herein by reference to the sections entitled "Proposal
1 -- Election of Directors" and "Executive Compensation -- Section 16(a)
Beneficial Ownership Reporting Compliance" in the Company's definitive Proxy
Statement for the Annual Meeting of Shareholders to be held on February 14, 2000March 20, 2001
(the "Proxy Statement"). The Company intends to file the Proxy Statement within
120 days after the end of its fiscal year.
The executive officers of the Company, each of whom serves a one-year term
and until his or her successor is elected and qualified, are as follows:
EXECUTIVE
NAME AGE POSITION EXECUTIVE OFFICER SINCE
---- --- -------- ------------------------------------
Howard Schultz................... 46Schultz....................... 47 chairman of the boardBoard of Directors and chief 1985
executive officerglobal strategist
Orin Smith....................... 57C. Smith........................ 58 director, president and chief executive 1990
operating
officer
Paul D. Davis.................... 42Davis........................ 43 president, Retail North America 1999
Peter Maslen..................... 47Maslen......................... 48 president, Starbucks Coffee International, 1999
International, Inc.
John B. Richards................. 51 president, North American 1997
Operations
Michael Casey.................... 54Casey........................ 55 executive vice president, chief financial 1995
financial
officer and chief administrative officer
E.Eduardo R. (Ted) Garcia............... 52Garcia.............. 53 executive vice president, Supply 1995
Chain and 1995
Coffee Operations
Deidra Wager.....................Shelley B. Lanza..................... 44 executive vice president, Human Resources, 1995
Law and 1993
consultant to Starbucks Coffee
International, Inc.
James Alling..................... 38 senior vice president, Business 1997
Alliances
Bruce Craig...................... 57 seniorCorporate Affairs and Corporate
Social Responsibility, general counsel and
secretary
Deidra Wager......................... 45 executive vice president, Retail 1997
Field Operations
Sharon E. Elliott................1993
Wanda Herndon........................ 48 senior vice president, Human 1994
Resources
David W. Frost................... 49Worldwide Public 1996
Affairs
Darren Huston........................ 34 senior vice president, Business 1999
Development
Deborah Gillotti................. 42 senior vice president and general 1997
manager, Starbucks X
Wanda Herndon.................... 47 senior vice president, 1996
Communications and Public Affairs
Shelley B. Lanza................. 43 senior vice president, Law and 1995
Corporate Affairs and general
counsel
Pedro Y. K. Man.................. 45 senior vice president and 1999
president, Starbucks Coffee Asia
Pacific Ltd.
David M. Olsen................... 53 senior vice president 1991
Arthur I. Rubinfeld.............. 46 senior vice president, Store 1992
Development
Engle Saez....................... 49 senior vice president, Retail 1999
Marketing and Product Management
Michael T. Sweeney............... 41 senior vice president, and 1998
president, Starbucks Coffee
Company (U.K.) Limited
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NAME AGE POSITION EXECUTIVE OFFICER SINCE
---- --- -------- -----------------------
Mark Wesley...................... 45 senior vice president, Store 1999
Development and Asset Management
Mary Williams.................... 50 senior vice president, Coffee 1997
Howard Wollner................... 46 senior vice president, 1998
Administration and Strategic
Alliance ManagementNew Ventures 2000
HOWARD SCHULTZ is the founder of the Company and has been chairman of the
board and chief executive officer since its inception in 1985. Mr. Schultz served as chief executive officer
from 1985 until June 2000, when he transitioned into the role of chief global
strategist. From 1985 to June 1994, Mr. Schultz was also the Company's
president. From September 1982 to December 1985, Mr. Schultz was the director of
Retail Operations and Marketing for Starbucks Coffee Company, a predecessor to
the Company; and from January 1986 to July 1987, he was the chairman of the
board, chief executive officer and president of Il Giornale Coffee Company, a
predecessor to the Company.
ORIN C. SMITH joined the Company in 1990 and has served as president and
chief operatingexecutive officer of the Company since June 1994.2000. From June 1994 to June
2000, Mr. Smith served as the Company's president and chief operating officer.
Prior to June 1994, Mr. Smith served as the Company's vice president and chief
financial officer and later, as its executive vice president and chief financial
officer.
PAUL D. DAVIS joined Starbucks in March 1999 as president of Consumer
Products and was appointed to president, Retail North America in November 1999. In
January 2000, Mr. Davis was promoted to president, North American Operations and
in November 2000 his title was changed to president, North America. Prior to
joining Starbucks, Mr. Davis worked with Frito-Lay, a division of PepsiCo, Inc.
for 14 years where he held several sales, marketing and general management
positions. Most recently, he served as president of Frito-Lay's Canadian
division. Prior to joining Frito-Lay, Mr. Davis held various positions with
Procter & Gamble.
7
9
PETER MASLEN joined Starbucks in August 1999 as president, Starbucks Coffee
International, Inc. Prior to joining Starbucks, Mr. Maslen served in various
executive positions with Mars Inc., PepsiCo, Inc. and most recently Tricon
Global Restaurants from 1992 to 1999, including most recently serving as the
Senior Vice President and General Manager of its Central Europe Operations.
JOHN B. RICHARDS joined the Company in September 1997 as president, Retail
North America and was appointed to president, North American Operations in
November 1999. Prior to joining the Company, Mr. Richards served as the
Executive Vice President of Four Seasons Hotels and Resorts for 10 years. Prior
to that time Mr. Richards held various positions with McKinsey & Company and
Procter & Gamble.division.
MICHAEL CASEY joined Starbucks in August 1995 as senior vice president and
chief financial officer and was promoted to executive vice president, chief
financial officer and chief administrative officer in September 1997. Prior to
joining Starbucks, Mr. Casey served as executive vice president and chief
financial officer of Family Restaurants, Inc. from its inception in 1986. During
his tenure there, he also served as a director from 1986 to 1993, and as
president and chief executive officer of its El Torito Restaurants, Inc.
subsidiary from 1988 to 1993.
E.EDUARDO R. (TED) GARCIA joined Starbucks in April 1995 as senior vice
president, Supply Chain Operations and was promoted to executive vice president,
Supply Chain and Coffee Operations in September 1997. From May 1993 to April
1995, Mr. Garcia was an executive for Gemini Consulting. From January 1990 until
May 1993, he was the vice president of Operations Strategy for Grand
Metropolitan PLC, Food Sector.
DEIDRA WAGER joined Starbucks in 1992 and served as the Company's senior
vice president, Retail Operations from August 1993 to September 1997 when she
was promoted to executive vice president, Retail Marketing and Operations. In
March 1999, Ms. Wager moved to Tokyo, Japan to serve as a consultant to
Starbucks Coffee International, Inc. and work with Starbucks Coffee Japan
Limited. Prior to joining Starbucks, Ms. Wager held several operations positions
with Taco Bell(R), Inc. from 1988 to 1992.
JAMES ALLING joined Starbucks in September 1997 as senior vice president,
Grocery and became senior vice president, Specialty Sales and Marketing in
December 1998. From 1985 to 1997, Mr. Alling held several marketing and general
management positions for Nestle, U.S.A., including serving as the vice president
and general manager of the ground coffee division.
9
10
BRUCE CRAIG joined Starbucks in October 1992 and served as regional and
then zone vice president for the Southwest. In September 1997, Mr. Craig was
promoted to the position of senior vice president, Retail Field Operations.
Prior to joining Starbucks, Mr. Craig served for 21 years with Burger King Corp.
in various positions, including executive vice president/division manager and as
an owner/operator.
SHARON E. ELLIOTT joined Starbucks in 1994 as senior vice president, Human
Resources. From September 1993 to June 1994, Ms. Elliott served as the corporate
director, staffing and development of Allied Signal Corporation. From July 1987
to August 1993, she held several human resources management positions with
Bristol-Myers Squibb, including serving as the director of human
resources -- corporate staff.
DAVID W. FROST joined Starbucks in July 1999 as senior vice president,
Business Development. Prior to joining Starbucks, Mr. Frost served as a managing
director of Chapman Partners and New Millenium Partners, investment and merchant
banking partnerships, from January 1998 to 1999. From December 1995 to November
1997, Mr. Frost was a managing director for KPMG. Prior to that Mr. Frost served
as vice president, Business Development for the Pillsbury Company and the Food
Sector of Grand Metropolitan PLC.
DEBORAH GILLOTTI joined Starbucks in February 1997 as senior vice president
and chief information officer. In August, 1999 she was named as senior vice
president and general manager, Starbucks X. Prior to joining Starbucks, Ms.
Gillotti served as vice president, Corporate MIS for Duracell International,
Inc. (now a division of the Gillette Company). She also held a variety of
management positions for KPMG Peat Marwick Management Consulting from 1989 to
1993 and with GTE Corporation from 1982 to 1989.
WANDA HERNDON joined Starbucks in July 1995 as vice president,
Communications and Public Affairs and was promoted to senior vice president,
Communications and Public Affairs in November 1996. From February 1990 to June
1995, Ms. Herndon held several communications management positions at DuPont
Company. From November 1978 to February 1990, Ms. Herndon held several public
affairs and marketing communications positions at Dow Chemical Company.
SHELLEYSHELLY B. LANZA joined Starbucks in June 1995 as senior vice president, Law
and Corporate Affairs and general counsel.counsel and was promoted to executive vice
president, Human Resources, Law and Corporate Affairs and Corporate Social
Responsibility, general counsel and secretary in March 2000. From 1986 to 1995,
Ms. Lanza served as vice president and general counsel of Honda of America
Manufacturing, Inc. From 1982 to 1986, Ms. Lanza practiced law at the law firm
of Vorys, Sater, Seymour and Pease in Columbus, Ohio.
PEDRO Y. K. MANDEIDRA WAGER joined Starbucks in April 1999 as senior vice president and
president of Starbucks Coffee Asia Pacific Ltd. Prior to joining Starbucks, Mr.
Man spent over eight years with the Pillsbury Company developing and managing
the Haagen Dazs business in Asia. During that time, Mr. Man served in a number
of positions with Haagen Dazs Far East Limited, most recently serving as vice
president, Haagen Dazs, Asia Pacific.
DAVID M. OLSEN joined Starbucks in 19861992 and served as the Company's senior
vice president, CoffeeRetail Operations from September 1991 to October 1997. From November 1987August 1993 to September 1991, Mr. Olsen served as1997 when she
was promoted to executive vice president, Coffee, and from February
1986Retail. In March 1999, Ms. Wager moved
to November 1987, he served as the Company's director of training.
ARTHUR I. RUBINFELD joined the Company in 1992 as senior vice president,
Real Estate. From April 1986Tokyo, Japan to May 1992, Mr. Rubinfeld servedserve as a managing
partner of Epsteen & Associates, a commercial real estate company.
ENGLE SAEZ joined the Company in October 1999 as senior vice president of
Marketing and Product Management. Priorconsultant to joining the Company, Mr. Saez spent
five years as president and CEO of The AtlanticRancher Company, Inc., a direct
mail and Internet marketer of upscale, premium quality apparel, footwear and
accessories. Prior to that time, Mr. Saez held senior management positions with
Stride Rite Corporation, Phillips Van Heusen and The Timberland Company.
MICHAEL T. SWEENEY joined the Company in November 1998 as senior vice
president, International. In August 1999, Mr. Sweeney also was named as the
president of Starbucks Coffee Company (UK)International, Inc.
and work with Starbucks Coffee Japan Limited. Prior to joining Starbucks Mr. Sweeney servedMs.
Wager held several operations with Taco Bell(R), Inc. from September 19951988 to November 1998 as the President of
10
11
Minnesota Pizza Company, a franchise of Papa Johns, International, which
operated 37 locations. From May 1992 to July 1995, Mr. Sweeney served as the
President of Blockbuster Mid-America, a franchisee of Blockbuster Entertainment,
Inc. that operated 35 locations.
MARK WESLEY1992.
WANDA HERNDON joined Starbucks in September 1993 as the real estate manager
for the Southwest Zone and was promoted in September 1994 to director of
Development for the Southwest Zone. In October 1997, Mr. Wesley was promoted to
vice president, Store Development and Asset Management -- Western Region and in
November 1999 he was promoted to his current position, senior vice president,
Store Development and Asset Management.
MARY WILLIAMS joined Starbucks in March 1993July 1995 as vice president,
Green
CoffeeCommunications and Public Affairs and was promoted to senior vice president,
CoffeeCommunications and Public Affairs (now known as Worldwide Public Affairs) in
October 1997.November 1996. From May 1988February 1990 to March 1993,June 1995, Ms. Williams served as president of Klein Bros.
International, Coffee Division.
HOWARD WOLLNERHerndon held several
communications management positions at DuPont Company. From November 1978 to
February 1990, Ms. Herndon held several public affairs and marketing
communications positions at the Dow Chemical Company.
DARREN HUSTON joined Starbucks in January 1992June 1998 as vice president, AdministrationRetail
Strategy and New Business and was promoted to senior vice president, AdministrationNew
Ventures in March 2000. From 1994 to 1998, Mr. Huston worked at McKinsey &
Company and Strategic Alliance Managementwas a leader in October 1998. Prior to joining Starbucks, Mr.
Wollner was executive vice president of Watts Silverstein Associates from July
1990 to July 1991. From 1977 to 1990, Mr. Wollner was associated with Carroon &
Black Corporation where he was president of the Seattle office of C&B Consulting
Group, an employee benefits consulting firm.McKinsey's strategy and marketing practices.
There are no family relationships between any directors or executive
officers of the Company.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the
section entitled "Executive Compensation" in the Company's Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated by reference to the
section entitled "Beneficial Ownership of Common Stock" in the Company's Proxy
Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference to the
section entitled "Executive Compensation -- Certain Transactions" in the
Company's Proxy Statement.
118
1210
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this Annual Report on
Form l0-K:10-K:
1. Financial Statements.
The following financial statements are incorporated by reference in
Part II, Item 8 of this Annual Report on Form 10-K:
Consolidated Balance Sheets as of October 1, 2000 and October 3,
1999;
Consolidated Statements of Earnings for the fiscal years ended
October 1, 2000, October 3, 1999 and September 27, 1998;
Consolidated Statements of Earnings for the fiscal years ending October
3, 1999, September 27, 1998 and September 28, 1997;
Consolidated Statements of Cash Flows for the fiscal years endingended
October 1, 2000, October 3, 1999 and September 27, 1998 and September 28, 1997;
Consolidated Statements of Shareholders' Equity for the fiscal years
endingended October 1, 2000, October 3, 1999 and September 27, 1998 and September 28, 1997;1998;
Notes to Consolidated Financial Statements; and
Independent Auditors' Report.
2. Financial Statement Schedules.
Financial statement schedules are omitted because they are not
required or are not applicable, or the required information is provided in
the consolidated financial statements or notes thereto described in Item
14(a)(1) above.
3. Exhibits.
The Exhibits listed below and on the accompanying Index to Exhibits
immediately following the signature page hereto are filed as part of, or
incorporated by reference into, this Annual Report on Form 10-K.
EXHIBIT
NO.NUMBER DESCRIPTION
- ------------------ -----------
3.1 Restated Articles of Incorporation of Starbucks Corporation
(incorporated herein by reference to Exhibit 3. 13.1 to the
Company's Form 10-Q for the fiscal quarter ended March 31,
1996, filed with the SEC on May 15, 1996)
3.1.1 Amendment dated November 22, 1995 to the Restated Articles
of Incorporation of Starbucks Corporation (incorporated
herein by reference to Exhibit 3.1.1 to the Company's Form
10-Q for the fiscal quarter ended March 31, 1996, filed with
the SEC on May 15, 1996)
3.1.2 Amendment dated March 18, 1996 to the Restated Articles of
Incorporation of Starbucks Corporation (incorporated herein
by reference to Exhibit 3.1.2 to the Company's Form 10-Q for
the quarterly period ended March 31, 1996, filed with the
SEC on May 15, 1996)
3.1.3 Amendment dated March 4, 1999 to the Restated Articles of
Incorporation of Starbucks Corporation (incorporated herein
by reference to Exhibit 3(i) to the Company's Form 10-Q for
the quarterly period ended March 28, 1999, filed with the
SEC on May 12, 1990)
3.2 Amended and Restated Bylaws of Starbucks Corporation
(incorporated herein by reference to Exhibit 3.2 to the
Company's Form 10-Q for the fiscal quarter ended March 31,
1996, filed with the SEC on May 15, 1996)
10.1 Starbucks Corporation Amended and Restated Key Employee
Stock Option Plan -- 1994
(incorporated herein by reference to Appendix A to the
Company's 1994 Proxy Statement filed with the SEC on
December 23, 1994)*
12
13
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10.1.1 Starbucks Corporation Key Employee Stock Option
Plan -- 1994, as amended (incorporated herein by reference
to Exhibit 10.1.1 to the Company's Form 10-K for the fiscal
year ended September 29, 1996, filed with the SEC on
December 26, 1996)*
10.2 Starbucks Corporation Amended and Restated 1989 Stock Option
Plan for Non-Employee Directors (incorporated herein by reference
to Appendix A to the Company's Proxy Statement filed with
the SEC on January 11, 2000)*
10.2 Starbucks Corporation Amended and Restated 1989 Stock Option
Plan for Non-Employee Directors (incorporated herein by
reference to Appendix A to the Company's Proxy Statement
filed with the SEC on January 13, 1999)*
9
11
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.3 Starbucks Corporation 1991 Company-Wide Stock Option Plan,
as amended (incorporated herein by reference to the
Company's Registration Statement No. 33-52528 on Form S-8,
filed with the SEC on Septemberand restated through August 28, 1992)*2000*
10.3.1 Starbucks Corporation 1991 Company-Wide Stock Option
Plan -- Rules of the UK Sub-Plan, as amended (incorporated by reference to Exhibit 10.3.1 to
the Company's Annual Report on Form 10-K for the fiscal year
ended September 29, 1996, filed with the SEC on December 26,
1996)*and restated
through August 28, 2000*
10.4 Starbucks Corporation Employee Stock Purchase Plan -- 1995,
(incorporated herein by reference to Appendix C to the
Company's 1994 Proxy Statement filed with the SEC on
December 23, 1994)*as amended and restated through June 30, 2000*
10.5 Industrial Lease, dated March 31, 1989, between Starbucks
Corporation and the City of Seattle (successor in interest
to David A. Sabey and Sandra L. Sabey) (incorporated(incorporated herein
by reference to Exhibit 10.4 to the Company's Registration
Statement No. 33-47951 on Form S-1, filed with the SEC on
May 15, 1992)
10.6 Office Lease, dated as of July 15, 1993, between First and
Utah Street Associates, L.P. and Starbucks Corporation
(incorporated herein by reference to Exhibit 10.17 to the
Company's Form 10-K for the Fiscal Yearfiscal year ended October 3,
1993, filed with the SEC on December 30, 1993)
10.6.1 Second Amendment to Office Lease, dated as of January 1,
1995, between First &and Utah Street Associates, L.P. and
Starbucks Corporation (incorporated herein by reference to
the Company's Registration Statement No. 33-93974 on Form
S-3, filed with the SEC on June 27, 1995)
10.6.2 Third Amendment to Office Lease, dated as of September 30,
1995, between First and Utah Street Associates, L.P. and
Starbucks Corporation (incorporated herein by reference to
Exhibit 10.19 to the Company's Form 10-K for the fiscal year
ended October l,1, 1995, filed with the SEC on December 28,
1995)
10.6.3 Fourth Amendment to Office Lease dated as of October 31,
1997 between First and Utah Street Associates, L.P. and
Starbucks Corporation
10.6.4 Fifth Amendment to Office Lease dated as of March 5, 1998,
between First and Utah Street Associates, L.P. and Starbucks
Corporation
10.6.5 Sixth Amendment to Office Lease dated as of January 4, 1999,
between First and Utah Street Associates, L.P. and Starbucks
Corporation
10.7 Development Agreement, dated as of February 11, 1994,
between Starbucks Corporation and Host International, Inc.
(incorporated herein by reference to Exhibit 10.18 to the
Company's Form 10-K for the Fiscal Yearfiscal year ended October 2,
1994, filed with the SEC on December 23, 1994)
10.7.1 Development Agreement Addendum regarding Specialty Sandwich
Program dated January 3, 1998 between Starbucks Corporation
and Host International, Inc.
10.7.2 Development Agreement Addendum dated March 2, 1998 between
Starbucks Corporation and Host International, Inc.
10.7.3 Development Agreement Addendum dated April 16, 1998 between
Starbucks Corporation and Host International, Inc.
10.7.4 Development Agreement Addendum dated May 1, 1998 between
Starbucks Corporation and Host International, Inc.
10.8 Special Warranty Deed, dated March 7, 1994, between Kent
North Corporate Park, as grantor and Starbucks Corporation,
as grantee (incorporated herein by reference to Exhibit
10.14 to the Company's Form 10-K for the Fiscal Yearfiscal year ended
October 2, 1994, filed with the SEC on December 23, 1994)
10.9 Joint Venture and Partnership Agreement, dated August 10,
1994, between Pepsi-Cola Company, a division of PepsiCo,
Inc., and Starbucks New Venture Company (incorporated herein
by reference to Exhibit 10 to the Company's Form 10-Q for
the Quarterly Periodquarterly period ended July 3, 1994, filed with the SEC
on August 16, 1994)
10
12
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.10 Lease, dated August 22, 1994, between York County Industrial
Development Corporation and Starbucks Corporation
(incorporated herein by reference to Exhibit l010 to the
Company's Form 10-Q for the Quarterly Period Endedquarterly period ended July 2,
1995, filed with the SEC on August 15, 1995)
13
14
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10.14 Master Licensing Agreement between the Company and ARAMARK
Food and Services Group, Inc. dated as of January 30, 1996,
as amended and restated May 7, 1996Starbucks Corporation Executive Management Bonus Plan
(incorporated herein by reference to Exhibit 10.2310.15 to the
Company's Form l0-Q10-K for the Quarterly Period Ended March 31, 1996, filed with the
SEC on May 15, 1996)fiscal year ended October 3,
1999)*
10.15 Starbucks Corporation Executive Management Bonus Plan*
10.16 Starbucks Corporation Management Deferred Compensation Plan
(incorporated herein by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8 filed with the
SEC on January 1, 1998)*
10.1710.16 Starbucks Corporation 1997 Deferred Stock Plan*
11 Computation of Per Share EarningsPlan (incorporated
herein by reference to Exhibit 10.17 to the Company's Annual
Report on Form 10-K for the fiscal year ended October 3,
1999)*
13 Portions of the 1999Fiscal 2000 Annual Report to Shareholders
21 Subsidiaries of the Registrant
23 Independent Auditors' Consent
27 Financial Data Schedule
- ---------------
* Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K.8-K
The Company did not file anyfiled a Current ReportsReport on Form 8-K duringon August 16, 2000
announcing the fourth
quarterwrite-down of the fiscal year ended October 3, 1999.
14its entire investment in living.com Inc.
11
1513
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
STARBUCKS CORPORATION
By: /s/ HOWARD SCHULTZ
------------------------------------
Howard Schultz
chairman of the Board of Directors
and chief executive officerglobal strategist
December 13, 199915, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ HOWARD SCHULTZ chairman of the Boardboard of December 13, 199915, 2000
- ----------------------------------------------------- Directors------------------------------------------------ directors and chief global
Howard Schultz executive officerstrategist
/s/ ORIN C. SMITH director, president and chief December 10, 199918, 2000
- ----------------------------------------------------- chief operating Officer------------------------------------------------ executive officer
Orin C. Smith
/s/ MICHAEL CASEY executive vice president, chief December 13, 199915, 2000
- ----------------------------------------------------- chief------------------------------------------------ financial officer and chief
Michael Casey chief administrative officer (principal
financial officer and principal
accounting officer)
/s/ BARBARA BASS director December 13, 199910, 2000
- -----------------------------------------------------------------------------------------------------
Barbara Bass
/s/ HOWARD BEHAR director December 10, 19992000
- -----------------------------------------------------------------------------------------------------
Howard Behar
/s/ CRAIG J. FOLEY director December 13, 199915, 2000
- -----------------------------------------------------------------------------------------------------
Craig J. Foley
/s/ GREGORY B. MAFFEI director December 13, 199919, 2000
- -----------------------------------------------------------------------------------------------------
Gregory B. Maffei
/s/ ARLEN I. PRENTICE director December 13, 199915, 2000
- -----------------------------------------------------------------------------------------------------
Arlen I. Prentice
/s/ JAMES G. SHENNAN, JR. director December 10, 199915, 2000
- -----------------------------------------------------------------------------------------------------
James G. Shennan, Jr.
/s/ CRAIG E. WEATHERUP director December 14, 19992000
- -----------------------------------------------------------------------------------------------------
Craig E. Weatherup
1512
1614
EXHIBIT INDEX TO EXHIBITS
EXHIBIT
NO.NUMBER DESCRIPTION
- ------------------ -----------
3.1 Restated Articles of Incorporation of Starbucks Corporation
(incorporated herein by reference to Exhibit 3. 13.1 to the
Company's Form 10-Q for the fiscal quarter ended March 31,
1996, filed with the SEC on May 15, 1996)
3.1.1 Amendment dated November 22, 1995 to the Restated Articles
of Incorporation of Starbucks Corporation (incorporated
herein by reference to Exhibit 3.1.1 to the Company's Form
10-Q for the fiscal quarter ended March 31, 1996, filed with
the SEC on May 15, 1996)
3.1.2 Amendment dated March 18, 1996 to the Restated Articles of
Incorporation of Starbucks Corporation (incorporated herein
by reference to Exhibit 3.1.2 to the Company's Form 10-Q for
the quarterly period ended March 31, 1996, filed with the
SEC on May 15, 1996)
3.1.3 Amendment dated March 4, 1999 to the Restated Articles of
Incorporation of Starbucks Corporation (incorporated herein
by reference to Exhibit 3(i) to the Company's Form 10-Q for
the quarterly period ended March 28, 1999, filed with the
SEC on May 12, 1990)
3.2 Amended and Restated Bylaws of Starbucks Corporation
(incorporated herein by reference to Exhibit 3.2 to the
Company's Form 10-Q for the fiscal quarter ended March 31,
1996, filed with the SEC on May 15, 1996)
10.1 Starbucks Corporation Amended and Restated Key Employee
Stock Option Plan -- 1994 (incorporated herein by reference
to Appendix A to the Company's 1994 Proxy Statement filed with
the SEC on December 23, 1994)*
10.1.1 Starbucks Corporation Key Employee Stock Option
Plan -- 1994, as amended (incorporated herein by reference
to Exhibit 10.1.1 to the Company's Form 10-K for the fiscal
year ended September 29, 1996, filed with the SEC on
December 26, 1996)January 11, 2000)*
10.2 Starbucks Corporation Amended and Restated 1989 Stock Option
Plan for Non-Employee Directors (incorporated herein by
reference to Appendix A to the Company's Proxy Statement
filed with the SEC on January 13, 1999)*
10.3 Starbucks Corporation 1991 Company-Wide Stock Option Plan,
as amended (incorporated herein by reference to the
Company's Registration Statement No. 33-52528 on Form S-8,
filed with the SEC on Septemberand restated through August 28, 1992)*2000*
10.3.1 Starbucks Corporation 1991 Company-Wide Stock Option
Plan -- Rules of the UK Sub-Plan, as amended (incorporated by reference to Exhibit 10.3.1 to
the Company's Annual Report on Form 10-K for the fiscal year
ended September 29, 1996, filed with the SEC on December 26,
1996)*and restated
through August 28, 2000*
10.4 Starbucks Corporation Employee Stock Purchase Plan -- 1995,
(incorporated herein by reference to Appendix C to the
Company's 1994 Proxy Statement filed with the SEC on
December 23, 1994)*as amended and restated through June 30, 2000*
10.5 Industrial Lease, dated March 31, 1989, between Starbucks
Corporation and the City of Seattle (successor in interest
to David A. Sabey and Sandra L. Sabey) (incorporated(incorporated herein
by reference to Exhibit 10.4 to the Company's Registration
Statement No. 33-47951 on Form S-1, filed with the SEC on
May 15, 1992)
10.6 Office Lease, dated as of July 15, 1993, between First and
Utah Street Associates, L.P. and Starbucks Corporation
(incorporated herein by reference to Exhibit 10.17 to the
Company's Form 10-K for the Fiscal Yearfiscal year ended October 3,
1993, filed with the SEC on December 30, 1993)
10.6.1 Second Amendment to Office Lease, dated as of January 1,
1995, between First &and Utah Street Associates, L.P. and
Starbucks Corporation (incorporated herein by reference to
the Company's Registration Statement No. 33-93974 on Form
S-3, filed with the SEC on June 27, 1995)
10.6.2 Third Amendment to Office Lease, dated as of September 30,
1995, between First and Utah Street Associates, L.P. and
Starbucks Corporation (incorporated herein by reference to
Exhibit 10.19 to the Company's Form 10-K for the fiscal year
ended October l,1, 1995, filed with the SEC on December 28,
1995)
10.6.3 Fourth Amendment to Office Lease dated as of October 31,
1997 between First and Utah Street Associates, L.P. and
Starbucks Corporation
10.6.4 Fifth Amendment to Office Lease dated as of March 5, 1998,
between First and Utah Street Associates, L.P. and Starbucks
Corporation
10.6.5 Sixth Amendment to Office Lease dated as of January 4, 1999,
between First and Utah Street Associates, L.P. and Starbucks
Corporation
15
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.7 Development Agreement, dated as of February 11, 1994,
between Starbucks Corporation and Host International, Inc.
(incorporated herein by reference to Exhibit 10.18 to the
Company's Form 10-K for the Fiscal Yearfiscal year ended October 2,
1994, filed with the SEC on December 23, 1994)
10.7.1 Development Agreement Addendum regarding Specialty Sandwich
Program dated January 3, 1998 between Starbucks Corporation
and Host International, Inc.
10.7.2 Development Agreement Addendum dated March 2, 1998 between
Starbucks Corporation and Host International, Inc.
10.7.3 Development Agreement Addendum dated April 16, 1998 between
Starbucks Corporation and Host International, Inc.
10.7.4 Development Agreement Addendum dated May 1, 1998 between
Starbucks Corporation and Host International, Inc.
10.8 Special Warranty Deed, dated March 7, 1994, between Kent
North Corporate Park, as grantor and Starbucks Corporation,
as grantee (incorporated herein by reference to Exhibit
10.14 to the Company's Form 10-K for the Fiscal Yearfiscal year ended
October 2, 1994, filed with the SEC on December 23, 1994)
10.9 Joint Venture and Partnership Agreement, dated August 10,
1994, between Pepsi-Cola Company, a division of PepsiCo,
Inc., and Starbucks New Venture Company (incorporated herein
by reference to Exhibit 10 to the Company's Form 10-Q for
the Quarterly Periodquarterly period ended July 3, 1994, filed with the SEC
on August 16, 1994)
10.10 Lease, dated August 22, 1994, between York County Industrial
Development Corporation and Starbucks Corporation
(incorporated herein by reference to Exhibit l010 to the
Company's Form 10-Q for the Quarterly Period Endedquarterly period ended July 2,
1995, filed with the SEC on August 15, 1995)
10.14 Master Licensing Agreement between the Company and ARAMARK
Food and Services Group, Inc. dated as of January 30, 1996,
as amended and restated May 7, 1996Starbucks Corporation Executive Management Bonus Plan
(incorporated herein by reference to Exhibit 10.2310.15 to the
Company's Form l0-Q10-K for the Quarterly Period Ended March 31, 1996, filed with the
SEC on May 15, 1996)fiscal year ended October 3,
1999)*
10.15 Starbucks Corporation Executive Management Bonus Plan*
10.16 Starbucks Corporation Management Deferred Compensation Plan
(incorporated herein by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8 filed with the
SEC on January 1, 1998)*
10.1710.16 Starbucks Corporation 1997 Deferred Stock Plan*
11 Computation of Per Share EarningsPlan (incorporated
herein by reference to Exhibit 10.17 to the Company's Annual
Report on Form 10-K for the fiscal year ended October 3,
1999)*
13 Portions of the 1999Fiscal 2000 Annual Report to Shareholders
21 Subsidiaries of the Registrant
23 Independent Auditors' Consent
27 Financial Data Schedule
- ---------------
* Management contract or compensatory plan or arrangement.