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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------------------
FORM 10-K
[ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 28, 1997
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: 0-20322
STARBUCKS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
WASHINGTON 91-1325671
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
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
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. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing sale price of the Registrants Common Stock on
December 1, 1997, as reported on the National Market tier of The Nasdaq Stock
Market, Inc. was $3,126,611,409.
As of December l, 1997, there were 86,263,599 shares of the Registrant's Common
Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrants Annual Report to Shareholders for the fiscal year
ended September 28, 1997 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 5, 1998 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 openings, planned
capital expenditures and trends in or expectations regarding the Company's
operations, 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
availability of financing, the volatility of interest rates and securities
prices, 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, a variety of pastries and confections and coffee-related
accessories and equipment, primarily through its Company-operated retail stores.
In addition to sales through its Company-operated retail stores, Starbucks sells
primarily whole bean coffees through a specialty sales group and a direct
response business. Starbucks, through its joint venture partnerships, also
produces and sells bottled Frappuccino(TM) coffee drink and a line of premium
coffee ice creams. The Company's objective is to establish Starbucks as the most
recognized and respected brand of coffee in the world. To achieve this goal, the
Company plans to continue to rapidly expand its retail operations, grow its
specialty sales and direct response businesses, and selectively pursue other
opportunities to leverage the Starbucks brand through the introduction of new
products and the development of new distribution channels.
Starbucks is committed to selling only the finest whole bean coffees and
coffee beverages. To ensure compliance with its rigorous coffee standards,
Starbucks is vertically integrated, with the Company controlling its coffee
purchasing, roasting and distribution through its retail stores. The Company
purchases green coffee beans for its many blends and varietals from
coffee-producing regions around the world and custom roasts them to its exacting
standards. To allow customers to extend the Starbucks experience to their homes,
the Company continually works with leading manufacturers to develop innovative
and often proprietary coffee-making equipment and accessories.
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. During the fiscal year ended
September 28, 1997 ("fiscal 1997"), the Company entered 18 new markets in
continental North America, including the major markets of Phoenix, AZ, Detroit,
MI and Miami, FL. As of September 28, 1997, Starbucks had 1,270 Company-operated
stores in 28 states, the District of Columbia and three Canadian provinces.
Company-operated retail stores accounted for approximately 86% of net revenues
during fiscal 1997. The Company and its licensees intend to open 350 new stores
in continental North America during the fiscal year ended September 27, 1998
("fiscal 1998") and to have 2,000 locations by the year 2000. The Company
intends to use cash flow from operations to finance such growth, supplemented by
additional debt or equity financing, if necessary.
Starbucks 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 are convenient for pedestrian street traffic.
All Starbucks stores offer a choice of regular or decaffeinated coffee
beverages including a "coffee of the day," a broad selection of Italian-style
espresso beverages and distinctively packaged, roasted whole bean coffees.
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Starbucks stores also offer a selection of fresh pastries and other food items,
sodas, juices, tea, 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, 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 accessories such as travel tumblers and logo mugs. During fiscal 1997,
the Company's retail sales mix by product type was approximately 63% coffee
beverages, 14% whole bean coffees, 16% food items, and 7% coffee-making
equipment and accessories.
Specialty Sales. Starbucks specialty sales operations strive to develop
the Starbucks brand outside the retail store environment. The Company's
specialty sales operations reach customers as they shop, travel, work and dine
through relationships with retailers, airlines, hotels and office supply
companies, and numerous fine dining and food service establishments. Through
joint ventures, the Company has developed and introduced new products to
customers of supermarkets, convenience and drug stores. The Company's specialty
sales business also reaches customers through its international operations and
new supermarket initiative. During fiscal 1997, specialty sales revenues (which
include royalties and fees from licensees as well as sales of products to
licensees and joint ventures) accounted for approximately 12% of the Company's
net revenues.
Licensees and Joint Ventures. Although the Company does not generally
relinquish operational control of its stores in North America, in situations in
which a master concessionaire controls desirable retail space, the Company may
consider licensing its operations. As part of such arrangements, Starbucks
receives license fees and royalties and sells coffee for resale in the licensed
locations. Employees working in the licensed locations must follow Starbucks
detailed store-operating procedures and attend the same core training classes
given to Starbucks store managers and employees. As of September 28, 1997, the
Company had 94 licensee-operated stores in continental North America.
In addition to its relationships with licensees, the Company has entered
into joint ventures with the Pepsi-Cola Company, a division of PepsiCo, Inc.
("Pepsi"), and Dreyer's Grand Ice Cream, Inc. ("Dreyer's"). The joint venture
with Pepsi, The North American Coffee Partnership, 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. In mid-1997, the joint venture began to
distribute Frappuccino to additional supermarkets, convenience and drug stores
on the west coast as well as key cities in the midwest and northeast United
States. The Company's joint venture with Dreyer's was formed in early fiscal
1996 to develop and distribute Starbucks premium coffee ice creams. During
fiscal 1997, the Company expanded the product line produced and distributed
through the joint venture from six flavors of ice cream to eight flavors of ice
cream and two novelty products, including two low-fat ice creams and a low-fat
blended coffee bar. (See Note 5 to the Company's consolidated financial
statements, "Joint Ventures and Other Investments," incorporated by reference to
the Company's 1997 Annual Report to Shareholders in Item 8 of this Form 10-K.)
International. Starbucks considers locations outside of continental
North America to be part of its international operations. In fiscal 1995 and
1996, the Company entered into agreements to develop Starbucks stores in Japan,
Hawaii and Singapore. By the end of fiscal 1997, ten Starbucks stores were
operating in Japan, four were operating in Hawaii and three were operating in
Singapore. During fiscal 1997, the Company continued its international expansion
by entering into an agreement with Rustan Coffee Corporation, a part of the
Rustan Group, to develop Starbucks retail business in the Philippines. The first
store opened in December 1997 and two additional stores are expected to open by
the end of fiscal 1998. The Company also continued its expansion into the
Pacific Rim by entering into agreements with President Chain Store and ESCO (a
subsidiary of Shinsegae Department Store Co., Ltd.) to develop Starbucks retail
stores in Taiwan and the Republic of Korea, respectively.
Supermarket Test. Late in fiscal 1997, Starbucks initiated a major
supermarket test of its whole bean and ground coffees in the greater Chicago,
Illinois area. The Chicago test follows a more limited test conducted in early
1997 in Portland, Oregon and encompasses approximately 500 grocery stores. The
Company is offering five new caffeinated blends and one new decaffeinated blend
in both whole bean and ground form. The packaging and merchandising of the new
blends has been designed to be distinctive and eye-catching on the supermarket
aisle. The
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Company is conducting the test to gauge both consumer response and the effects
of potential cannibalization of its retail business and is planning to extend
the supermarket test to an additional market by mid-1998.
Direct Response. The Company's direct response operations ensure that
fresh Starbucks coffee and products are 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. The Company also operates a standing order coffee delivery service
and an electronic store on America Online that allows customers to order their
favorite coffee and products on-line. Starbucks ships products to customers
located in all 50 states and in many foreign countries. Direct response sales
accounted for approximately 2% of the Company's net revenues in fiscal 1997.
Management believes that the Company's direct response operations support its
retail store expansion into new markets and reinforce brand recognition in
existing markets.
Product Supply. Coffee is the world's second largest traded commodity
and its supply and price 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, such as the
International Coffee Organization and the Association of Coffee Producing
Countries, which 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 direct contacts with exporters in countries
of origin and outside brokers for its supply of 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
with such exporters and brokers. As of September 28, 1997, the Company had
approximately $54 million in fixed price purchase commitments which, together
with existing inventory, is expected to provide an adequate supply of green
coffee well into fiscal 1998. 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 to provide additional price
protection. 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. The Company did not purchase or sell any futures contracts in fiscal
1997.
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 local sources based on quality and price. Coffee-making equipment, such as
drip and french 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 whole bean coffees compete directly against
specialty coffees sold at retail through supermarkets, specialty retailers, and
a growing number of specialty coffee stores. The Company's coffee beverages
compete directly against all restaurant and beverage outlets that serve coffee
and a growing number of espresso stands, carts, and 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 pose the greatest competitive
challenge in the whole bean coffee market, in part because supermarkets offer
customers the convenience of not having to make a separate trip to a specialty
coffee store. A number of nationwide coffee manufacturers, such as Kraft Foods,
Inc., The Procter & Gamble Company, and Nestle USA, Inc., 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.
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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.
The Company's primary competitors for coffee beverage sales are
restaurants, shops, and street carts. In almost all markets in which the Company
does business there has been a significant increase in competition 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.
In addition to the competition for whole bean coffee and coffee beverage
retail sales, 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 and direct response businesses 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 and Copyrights. The Company owns and/or has applied
to register numerous trademarks and service marks in the United States, Canada
and in more than eighty additional countries throughout the world. Rights to the
trademarks and service marks in the United States are held by Starbucks U.S.
Brands Corporation, a wholly-owned subsidiary of the Company, and are used by
the Company under license. One of the Company's subsidiaries, The Coffee
Connection, Inc. ("The Coffee Connection"), also owns a number of trademarks and
service marks in the United States, Canada and elsewhere, including
registrations for "The Coffee Connection" name and logo. 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 and systems. While
valuable, individual copyrights and patents currently held by the Company are
not viewed as material to the Company's business.
Research and Development. The Company's Research and Development
department is comprised of chemists, engineers, food scientists and technicians
responsible for the formulation and technical development of new food, beverage
and equipment products. The department has played a major role in the
development of bottled Frappuccino and coffee ice cream products, as well as the
development of a home espresso machine with a new portafilter system that
accommodates both ground coffee and espresso filter packs ("pods"). The Company
spent approximately $2.6 million during fiscal 1997 on technical research and
development activities, in addition to customary product testing and development
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 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 September 28, 1997, the Company employed approximately
25,000 individuals, approximately 22,000 in retail stores and regional offices
and the remainder in the Company's administrative, sales, real estate, direct
response, roasting, and warehousing operations. At fiscal year end, ten of the
Company's stores (out of a total of 1,270 Company-operated stores in continental
North America) were unionized. In July 1997,
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Starbucks and the Canadian Auto Workers Union entered into a labor agreement
governing such stores that extends for two years. The Company believes that its
current relations with its employees are excellent.
ITEM 2. PROPERTIES
Starbucks currently operates three roasting and distribution facilities
- - - two in the Seattle, Washington area, and one in East Manchester Township, York
County, Pennsylvania. In the Seattle area, the Company leases approximately
92,000 square feet in one building pursuant to a lease extendable through 2009
(the "Seattle Plant"), owns an additional roasting plant and distribution
facility of approximately 305,000 square feet located in Kent, Washington, and
leases a warehouse facility of approximately 156,000 square feet in Kent,
Washington. The Company has a lease agreement with York County Industrial
Development Corporation for a roasting and distribution facility (the "York
Plant"), providing for approximately 365,000 square feet initially. The lease
has a 15-year term and the Company has an option to purchase the land and
building within five years of the date of occupancy. Such option to purchase
also provides that the Company may purchase, within seven years of occupancy,
additional land adjacent to the York Plant that would expand it to 1,000,000
square feet. The Company is party to a letter of intent and a commitment letter
which provide that in the event that the Company exercises its option to
purchase the York Plant, the Company will have the right to assume loans
incurred in connection with its development. The Company has determined that it
no longer needs its much-smaller roasting plant located in Boston (which
formerly operated as the roasting plant for The Coffee Connection) and has
sublet it to a third party. The lease on this facility runs through 2002.
The Company also leases approximately 350,000 square feet of a building
located in Seattle, Washington for administrative offices and has options to
lease approximately 250,000 additional square feet in such building. The Company
owns 2.36 acres (102,800 square feet) of undeveloped land near its
administrative offices and adjacent to the Seattle Plant, which is currently
used for parking.
As of September 28, 1997, Starbucks operated a total of 1,270 retail
stores. All Starbucks stores are located in leased premises. The Company also
leases space in approximately 50 additional locations for regional, district and
other administrative offices, training facilities and storage, not including
spaces within retail stores used for such purposes and 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 1997.
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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
1997 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
1997 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 1997 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 "Financial Risk Management" in the Company's
1997 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 1997 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 5, 1998 (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:
Name Age Position Executive Officer Since
---- --- -------- -----------------------
Howard Schultz 44 chairman of the board and chief 1985
executive officer
Orin Smith 55 director, president and chief 1990
operating officer
Howard Behar 53 director and president, Starbucks 1989
Coffee International, Inc.
John Richards 49 president, Retail, North America 1997
Michael Casey 52 executive vice president, chief 1995
financial officer and chief
administrative officer
E. R. (Ted) Garcia 50 executive vice president, Supply Chain 1995
Operations
Deidra Wager 42 executive vice president, Retail 1993
Marketing and Operations Services
James Alling 36 senior vice president, Grocery 1997
Scott Bedbury 40 senior vice president, Brand 1995
Development
Bruce Craig 55 senior vice president, Retail Field 1997
Operations
Vincent Eades 38 senior vice president, Specialty Sales 1995
and Marketing
Sharon E. Elliott 46 senior vice president, Human Resources 1994
Deborah Gillotti 40 senior vice president and chief 1997
information officer
Wanda Herndon 45 senior vice president, Communications 1996
and Public Affairs
Shelley B. Lanza 41 senior vice president, Law and 1995
Corporate Affairs and general counsel
Judy Meleliat 40 senior vice president, Marketing 1997
David M. Olsen 51 senior vice president 1991
Arthur I. 44 senior vice president, Store 1992
Rubinfeld Development
Don Valencia 45 senior vice president, Research and 1997
Development
Mary Williams 48 senior vice president, Coffee 1997
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HOWARD SCHULTZ is the founder of the Company and has been chairman of
the board and chief executive officer since its inception in 1985. 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 SMITH joined the Company in 1990 and has served as president and
chief operating officer of the Company since June 1994. 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.
HOWARD BEHAR joined the Company in 1989 and has served as president of
Starbucks Coffee International, Inc. since June 1994. From February 1993 to June
1994, Mr. Behar served as the Company's executive vice president, Sales and
Operations. From February 1991 to February 1993, Mr. Behar served as senior vice
president, Retail Operations of the Company and from August 1989 to January
1991, he served as the Company's vice president, Retail Stores.
JOHN RICHARDS joined the Company in September 1997 as president, Retail,
North America. 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.
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. R. (TED) GARCIA joined Starbucks in April 1995 as senior vice
president, Supply Chain Operations and was promoted to executive vice president,
Supply Chain 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
Services. From September 1992 to August 1993, Ms. Wager served as the Company's
vice president, Operation Services. From March 1992 to September 1992, she was
the Company's California regional manager. From September 1988 to March 1992,
Ms. Wager held several operations positions with Taco Bell(R), Inc., including
having served as its director of operations systems development.
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JAMES ALLING joined Starbucks in September 1997 as senior vice
president, Grocery. 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.
SCOTT BEDBURY joined Starbucks in June 1995 as senior vice president,
Marketing and became the senior vice president, Brand Development in November
1997. From November 1987 to October 1994, Mr. Bedbury held the position of
worldwide director of advertising for Nike, Inc. Prior to joining Nike, Inc.,
Mr. Bedbury was vice president for Cole and Weber Advertising in Seattle,
Washington, which is an affiliate of Ogilvy and Mather.
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.
VINCENT EADES joined Starbucks in April 1995 as senior vice president,
Specialty Sales and Marketing. From February 1993 to April 1995, Mr. Eades
served as a regional sales manager for Hallmark Cards, Inc. From August 1989 to
February 1993, Mr. Eades was general manager of the Christmas Celebrations
business unit at Hallmark Cards, Inc.
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.
DEBORAH J. GILLOTTI joined Starbucks in February 1997 as senior vice
president and chief information officer. 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 several management
positions for KPMG Peat Marwick Management Consulting from 1989 to 1993.
WANDA HERNDON, joined Starbucks in July 1995 as vice president,
Communications and Public Affairs and was promoted to senior vice president,
Communication and Public Affairs in November 1996. From February 1990 to June
1995, Ms. Herndon held several communications management positions at DuPont.
From November 1978 to February 1990, Ms. Herndon held several public affairs and
marketing communications positions for Dow Chemical Company.
SHELLEY B. LANZA joined Starbucks in June 1995 as senior vice president,
Law and Corporate Affairs and general counsel. 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.
JUDY MELELIAT joined Starbucks in October 1997 as vice president,
Marketing Operations and was promoted to senior vice president, Marketing in
November 1997. Prior to joining Starbucks, Ms. Meleliat was vice president of
Marketing for InfoAccess. From September 1995 to June 1996, she served at Edmark
Corporation as the vice president of Sales for the Education Channel. From
September 1987 to September 1995, Ms. Meleliat held several executive management
positions at Egghead Software.
DAVID M. OLSEN joined Starbucks in 1986 and served as the Company's
senior vice president, Coffee from September 1991 to October 1997. From November
1987 to September 1991, Mr. Olsen served as vice president, Coffee, and from
February 1986 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 1986 to May 1992, Mr. Rubinfeld served as a managing
partner of Epsteen & Associates, a commercial real estate company.
DON VALENCIA joined Starbucks in November 1993 as vice president,
Research and Development and was promoted to senior vice president, Research and
Development in October 1997. From 1980 to 1993, Mr. Valencia was president of
Immuno Concepts, Incorporated, a biomedical company.
9
11
MARY WILLIAMS joined Starbucks in March 1993 as vice president, Green
Coffee and was promoted to senior vice president, Coffee in October 1997. From
May 1988 to March 1993, Ms. Williams served as president of Klein Bros.
International, Coffee Division.
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.
10
12
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:
1.Financial Statements.
The following financial statements incorporated by reference to
the Company's 1997 Annual Report to Shareholders in Part II, Item 8:
Consolidated Balance Sheets as of September 28, 1997 and September
29, 1996;
Consolidated Statements of Earnings for the fiscal years ending
September 28, 1997, September 29, 1996 and October 1, 1995;
Consolidated Statements of Cash Flows for the fiscal years ending
September 28, 1997, September 29, 1996 and October 1, 1995;
Consolidated Statements of Shareholders' Equity for the fiscal years
ending September 28, 1997, September 29, 1996 and October 1, 1995;
Notes to Consolidated Financial Statements.
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. Description
3.1 Restated Articles of Incorporation of Starbucks
Corporation (incorporated herein by reference to Exhibit
3. 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)
3.2 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)
11
13
4.1 Indenture, dated as of October 24, 1995, between Starbucks
Corporation and First Interstate Bank of Washington, N.A.,
as Trustee (incorporated herein by reference to Exhibit
4.3 to the Company's Form l0-K for the fiscal year ended
October 1, 1995, filed with the SEC on December 28, 1995)
4.2 Form of Debenture relating to the Indenture described in
Exhibit 4.1 hereto (incorporated herein by reference to
Exhibit 4.4 to the Company's Form l0-K for the fiscal year
ended October 1, 1995, filed with the SEC on December 28,
1995)
10.1 Starbucks Corporation 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)*
10.2 Starbucks Corporation 1989 Stock Option Plan for
Non-Employee Directors, as amended (incorporated herein by
reference to Appendix B to the Company's 1994 Proxy
Statement filed with the SEC on December 23, 1994)*
10.2.1 Starbucks Corporation 1989 Stock Option Plan for
Non-Employee Directors, as amended (incorporated herein by
reference to Exhibit 10.2.1 to the Company's Form 10-K for
the fiscal year ended on September 29, 1996, filed with
the SEC on December 26, 1996)*
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 September 28, 1992)*
10.3.1 Starbucks Corporation 1991 Company-Wide Stock Option 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)*
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)*
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
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 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 & 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)
12
14
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, 1995, filed with the SEC on December
28, 1995)
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 Year ended October 2,
1994, filed with the SEC on December 23, 1994)
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
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 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
l0 to the Company's Form 10-Q for the Quarterly Period
Ended July 2, 1995, filed with the SEC on August 15, 1995)
10.11 Starbucks Corporation Amended and Restated
Consulting/Employment Agreement with Jeffrey H. Brotman,
dated as of January 14, 1995 (incorporated herein by
reference to Exhibit 10.14 to the Company's Form 10-K for
the Fiscal Year ended October l, 1995, filed with the SEC
on December 28, 1995)*
10.12 Protective Covenants Agreement dated March 31, 1995, among
Starbucks Corporation, Noah's New York Bagels, Inc. and
certain shareholders of Noah's New York Bagels, Inc.
(incorporated herein by reference to the Company's
Registration Statement No. 33-91780 on Form S-3, filed
with the SEC on April 28, 1995)
10.13 Merger Agreement among Noah's New York Bagels, Inc.
Shareholders and Certain Optionholders of Noah's New York
Bagels, Inc., Einstein Brothers Bagels, Inc. and NNYB
Acquisition Corporation, dated January 22, 1996
(incorporated herein by reference to Exhibit 10.21 to the
Company's Form 10-Q for the Quarterly Period Ended March
31, 1996, filed with the SEC on May 15, 1996)
10.13.1 Amendment dated February l, 1996, to Merger Agreement
among Noah's New York Bagels, Inc., Shareholders and
Certain Optionholders of Noah's New York Bagels, Inc.,
Einstein Brothers Bagels, Inc. and NNYB Acquisition
Corporation dated January 22, 1996 (incorporated herein by
reference to Exhibit 10.22 to the Company's Form 10-Q for
the Quarterly Period Ended March 31, 1996, filed with the
SEC on May 15, 1996)
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, 1996 (incorporated
herein by reference to Exhibit 10.23 to the Company's Form
l0-Q for the Quarterly Period Ended March 31, 1996, filed
with the SEC on May 15, 1996)
11 Computation of Per Share Earnings
12 Ratio of Earnings to Fixed Charges
13
15
13 Portions of the 1997 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.
No reports on Form 8-K were filed by the Company during the fiscal
quarter ended September 28, 1997.
14
16
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 officer
December 19, 1997
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 Board of Directors December 19, 1997
- - -------------------------- and chief executive officer
Howard Schultz
/s/ Orin C. Smith director, president and chief operating December 16, 1997
- - -------------------------- officer
Orin C. Smith
/s/ Howard Behar director, president of Starbucks Coffee December 19, 1997
- - -------------------------- International, Inc.
Howard Behar
/s/ Michael Casey executive vice president, chief financial December 19, 1997
- - ------------------------- officer and chief administrative officer
Michael Casey (principal financial officer and principal
accounting officer)
/s/ Barbara Bass director December 15, 1997
- - --------------------------
Barbara Bass
/s/ Jeffrey H. Brotman director December 22, 1997
- - --------------------------
Jeffrey H. Brotman
/s/ Craig J. Foley director December 16, 1997
- - --------------------------
Craig J. Foley
/s/ Arlen I. Prentice director December 15, 1997
- - --------------------------
Arlen I. Prentice
/s/ James G. Shennan, Jr. director December 12, 1997
- - --------------------------
James G. Shennan, Jr.
15
17
EXHIBIT INDEX
Exhibit No. Description Page No.
3.1 Restated Articles of Incorporation of Starbucks Corporation
(incorporated herein by reference to Exhibit 3.1 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)
3.2 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)
4.1 Indenture, dated as of October 24, 1995, between Starbucks
Corporation and First Interstate Bank of Washington, N.A., as
Trustee (incorporated herein by reference to Exhibit 4.3 to
the Company's Form l0-K for the fiscal year ended October 1,
1995, filed with the SEC on December 28, 1995)
4.2 Form of Debenture relating to the Indenture described in
Exhibit 4.1 hereto (incorporated herein by reference to
Exhibit 4.4 to the Company's Form l0-K for the fiscal year
ended October 1, 1995, filed with the SEC on December 28,
1995)
10.1 Starbucks Corporation 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)*
10.2 Starbucks Corporation 1989 Stock Option Plan for Non-Employee
Directors, as amended (incorporated herein by reference to
Appendix B to the Company's 1994 Proxy Statement filed with
the SEC on December 23, 1994)*
10.2.1 Starbucks Corporation 1989 Stock Option Plan for Non-Employee
Directors, as amended (incorporated herein by reference to
Exhibit 10.2.1 to the Company's Form 10-K for the fiscal year
ended on September 29, 1996, filed with the SEC on December
26, 1996)*
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 September 28, 1992)*
10.3.1 Starbucks Corporation 1991 Company-Wide Stock Option 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)*
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)*
E-1
18
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 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 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 & Utah Street Associates, L.P. and Starbucks
Corporation (incorporated herein by reference to the Company's
Registration Statement No. 33-93974 on Form 5-3, 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, 1995, filed with the SEC on December 28,
1995)
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 Year ended October 2, 1994,
filed with the SEC on December 23, 1994)
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 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 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 l0 to the
Company's Form 10-Q for the Quarterly Period Ended July 2,
1995, filed with the SEC on August 15, 1995)
10.11 Starbucks Corporation Amended and Restated
Consulting/Employment Agreement with Jeffrey H. Brotman, dated
as of January 14, 1995 (incorporated herein by reference to
Exhibit 10.14 to the Company's Form 10-K for the Fiscal Year
ended October l, 1995, filed with the SEC on December 28,
1995)*
10.12 Protective Covenants Agreement dated March 31, 1995, among
Starbucks Corporation, Noah's New York Bagels, Inc. and
certain shareholders of Noah's New York Bagels, Inc.
(incorporated herein by reference to the Company's
Registration Statement No. 33-91780 on Form 5-3, filed with
the SEC on April 28, 1995)
10.13 Merger Agreement among Noah's New York Bagels, Inc.
Shareholders and Certain Optionholders of Noah's New York
Bagels, Inc., Einstein Brothers Bagels, Inc. and NNYB
Acquisition Corporation, dated January 22, 1996 (incorporated
herein by reference to Exhibit 10.21 to the Company's Form
10-Q for the Quarterly Period Ended March 31, 1996, filed with
the SEC on May 15, 1996)
10.13.1 Amendment dated February l, 1996, to Merger Agreement among Noah's
New York Bagels, Inc., Shareholders and Certain Optionholders of
Noah's New York
E-2
19
Bagels, Inc., Einstein Brothers Bagels, Inc. and NNYB Acquisition
Corporation dated January 22, 1996 (incorporated herein by
reference to Exhibit 10.22 to the Company's Form 10-Q for the
Quarterly Period Ended March 31, 1996, filed with the SEC on May
15, 1996)
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, 1996 (incorporated herein by
reference to Exhibit 10.23 to the Company's Form l0-Q for the
Quarterly Period Ended March 31, 1996, filed with the SEC on
May 15, 1996)
11 Computation of Per Share Earnings E-4
12 Ratio of Earnings to Fixed Charges E-5
13 Portions of the 1997 Annual Report to Shareholders E-6
21 Subsidiaries of the Registrant E-34
23 Independent Auditors' Consent E-35
27 Financial Data Schedule E-36
- - -------------
* Management contract or compensatory plan or arrangement.
E-3