UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
August 7, 2007
Date of Report (date of earliest event reported)
STARBUCKS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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| Washington
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0-20322
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91-1325671 |
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| (State or other jurisdiction
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(Commission File
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(IRS Employer |
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Number)
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Identification No.) |
2401 Utah Avenue South. Seattle, Washington 98134
(Address of principal executive offices)
(206) 447-1575
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
On August 7, 2007 (the “Effective Date”), Starbucks Corporation (the “Company”) entered into a
Credit Agreement with Bank of America, N.A. as Administrative
Agent, Citibank, N.A. and Goldman Sachs Bank USA, as Syndication Agents, and the other lenders party thereto (the
“Credit Agreement”). The Credit Agreement provides for a $400 million unsecured, revolving credit
facility, which is scheduled to mature on August 5, 2008. The Company intends to use the credit
facility for general corporate purposes, which may include the repurchase of Company common stock
under its ongoing share repurchase program as updated and approved by the Company’s board of
directors.
Interest on indebtedness outstanding under the Credit Agreement will be payable at a rate per
annum, selected by the Company, equal to (i) the Eurocurrency Rate plus a margin equal to between
0.110% and 0.270%, or (ii) the Base Rate. An additional 0.25% will be added to the applicable
interest rate set forth above at the end of each three-month period following the Effective Date.
During an event of default under the Credit Agreement, interest on the outstanding amount of
the indebtedness under the Credit Agreement shall bear interest at a rate per annum equal to 2% in
excess of the interest then borne by such borrowings. The Company shall have the option of
selecting the type of borrowing and the length of interest period applicable thereto.
As used herein, “Eurocurrency Rate” shall mean the British Banker’s Association LIBOR Rate
adjusted for statutory reserves at all times, and “Base Rate” shall mean the higher of (a) the
Federal Funds Rate plus 1/2% and (b) the rate of interest at which Bank of America, N.A. announces
from time to time as its “prime rate.”
The Credit Agreement contains a minimum consolidated fixed charge coverage ratio covenant.
The Credit Agreement also contains customary affirmative and negative covenants, including, among
other things, covenants regarding the delivery of financial statements, certificates and notice
requirements, payment obligations (including taxes), preservation of existence, maintenance of
properties and insurance policies, compliance with laws, keeping of records and use of proceeds,
and limitations on incurring indebtedness (applicable to the Company’s subsidiaries only), granting
liens, effecting certain fundamental changes and entering into certain burdensome agreements or
affiliate transactions.
The Credit Agreement contains certain events of default including, among other things,
non-payment of principal, interest or fees, violation of covenants, cross default to certain other
indebtedness, invalidity of any loan document, material judgments, bankruptcy and insolvency events
and change of control, subject in certain instances, to cure periods. Upon an event of default,
the lenders may direct the agent to accelerate the loans and terminate the commitments to lend.
A copy of the Credit Agreement is attached to this report as Exhibit 10.1 and is incorporated
herein by reference as though it were fully set forth herein. The description above is a summary
of the Credit Agreement and is qualified in its entirety by the complete text of the Credit
Agreement itself.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information related to the Credit Agreement discussed under Item 1.01 above is hereby
incorporated by reference under this Item 2.03.