FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 29, 2014
Starbucks
Corporation
(Exact name of registrant as specified in its charter)
Washington | 0-20322 | 91-1325671 |
(State of Incorporation) | (Commission File Number) | (IRS Employer |
Identification No.) |
2401 Utah Avenue South,
Seattle, Washington 98134
(Address of
principal executive
offices) (Zip Code)
(206) 447-1575
(Registrants telephone number,
including area code)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On January 29, 2014, Starbucks Corporation (the Company or Starbucks ) issued a press release announcing a new leadership structure to bolster the companys financial and operating organization globally. In the new structure, Troy Alstead will be promoted to chief operating officer and Scott Maw will be promoted to executive vice president and chief financial officer. A copy of the press release is furnished as Exhibit 99.1.
Effective February 3, 2014, Troy Alstead, chief financial officer and group president, Global Business Services, will be promoted to chief operating officer, responsible for overseeing day-to-day operations of the enterprise. In his new capacity, Mr. Alstead will continue to report to Howard Schultz, chairman, president and ceo, and will be responsible for aligning and prioritizing company investments across business units. Reporting to Mr. Alstead in his new role will be Cliff Burrows, group president, U.S., Americas and Teavana; John Culver, group president, China Asia Pacific, Channel Development and Emerging Brands; Scott Maw, executive vice president and chief financial officer; and his existing senior direct reports. Mr. Alstead will also assume responsibility for oversight of the EMEA (Europe, Middle East & Africa) business segment and will continue to have responsibility for the Global Technology and Global Supply Chain Organizations.
Mr. Alstead, age 50, joined Starbucks in 1992 and has served as chief financial officer and group president, Global Business Services since September 2013. Mr. Alstead previously served as chief financial officer and chief administrative officer from November 2008 to September 2013; chief operating officer, Starbucks Greater China from April 2008 to October 2008; senior vice president, Global Finance and Business Operations from August 2007 to April 2008; and senior vice president, Corporate Finance from September 2004 to August 2007. Mr. Alstead served in a number of other senior positions with Starbucks prior to 2004.
In connection with Mr. Alsteads promotion, the Compensation & Management Development Committee ( CMDC ) of the Board of Directors of the Company approved an annualized base salary of $900,000, an annual bonus target under the Companys Executive Management Bonus Plan of 120% of base salary and an equity grant with an economic value of $1,250,000. The equity grant will consist of approximately 50% stock options that vest annually over 4 years and 50% time-vesting restricted stock units ( RSUs ) that vest in equal tranches on the second and fourth anniversaries of the grant date. The foregoing description is qualified in its entirety by reference to Mr. Alsteads Letter Agreement dated January 29, 2014 which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Also effective February 3, 2014, Scott Maw, age 46, svp, Corporate Finance, will be promoted to executive vice president and chief financial officer and will serve as the Companys principal financial officer and principal accounting officer. In his new role, Mr. Maw will report to Mr. Alstead and oversee the Companys global finance function. Mr. Maw joined Starbucks in August 2011 and has served as svp, Corporate Finance since October 2012. From August 2011 to October 2012, he served as global controller. Prior to joining Starbucks, Mr. Maw served as chief financial officer of SeaBright Insurance Company from February 2010 to August 2011. From October 2008 to February 2010 Mr. Maw served as chief financial officer of the Consumer Banking division of JPMorgan Chase & Co. He has also held various finance leadership positions at General Electric and the Retail Banking division of Washington Mutual.
In connection with Mr. Maws promotion, the CMDC approved an annualized base salary of $550,000, an annual bonus target under the Executive Management Bonus Plan of 75% of base salary and an equity grant with an economic value of $600,000. The equity grant will consist of approximately 50% stock options and 50% time-vesting RSUs, each with the same vesting terms as the grants to Mr. Alstead. The foregoing description is qualified in its entirety by reference to Mr. Maws Letter Agreement dated January 29, 2014 which is attached hereto as Exhibit 10.2 and incorporated herein by reference.
There is no arrangement or understanding between either Mr. Alstead or Mr. Maw and any other person pursuant to which either of them were selected as an officer. There are no family relationships among any of our directors or executive officers (including Mr. Alstead and Mr. Maw). Neither Mr. Alstead nor Mr. Maw has an interest in any transaction since the beginning of the Companys last fiscal year, or any currently proposed transaction, that requires disclosure pursuant to Item 404(a) of Regulation S-K.
2
Item 7.01. Regulation FD Disclosure.
A copy of the Companys press release relating to the foregoing announcements, dated January 29, 2014, is furnished as Exhibit 99.1 to this Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
Exhibit | ||
Number | Description | |
10.1 | Letter Agreement dated January 29, 2014 between Starbucks Corporation and Troy Alstead | |
10.2 | Letter Agreement dated January 29, 2014 between Starbucks Corporation and Scott Maw | |
99.1 | Press Release dated January 29, 2014 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
STARBUCKS CORPORATION | ||
Dated: January 29, 2014 | ||
By: | /s/ Lucy Lee Helm | |
Name: | Lucy Lee Helm | |
Title: | executive vice president, general counsel | |
and secretary |
EXHIBIT INDEX
Index | ||
Number | Description | |
10.1 | Letter Agreement dated January 29, 2014 between Starbucks Corporation and Troy Alstead | |
10.2 | Letter Agreement dated January 29, 2014 between Starbucks Corporation and Scott Maw | |
99.1 | Press Release dated January 29, 2014 |
January 29, 2014
Dear Troy:
Thank you for your contributions to the Companys success and congratulations on your promotion to chief operating officer effective February 3, 2014.
Here Are The Specifics Of Your Offer:
Base Salary
You will be paid at a base salary that annualizes to
$900,000.
Executive Management Bonus
Plan
You will be eligible to participate
in the Executive Management Bonus Plan (EMBP) effective with your
promotion. Your new bonus target will be 120% of your eligible base
salary. For fiscal 2014 your bonus will be prorated based on your
promotion date. From the beginning of fiscal 2014 up to your promotion
date, your potential bonus will be at a 95% bonus target, based on your salary
immediately before your promotion and from your promotion date through fiscal
year end your potential bonus will be at a 120% bonus target, based on your
salary at fiscal year end. For more information about the EMBP, please talk with
your Partner Resources contact. Starbucks Corporation (Starbucks or the
Company) reserves the right to review, change, amend, or cancel incentive
plans at any time.
Promotional Equity
Award
You will be eligible to receive an
equity award with an economic value of $1,250,000 (USD) under the 2005 Key
Employee Sub-Plan to Starbucks Corporation Amended and Restated 2005 Long-Term
Equity Incentive Plan (the "Key Employee Plan") with 50% of the economic value
in the form of restricted stock units and 50% of the economic value in the form
of stock options to purchase shares of Starbucks common stock. Your
eligibility for the restricted stock units and stock options is subject to
approval by the Compensation and Management Development Committee of the Board
of Directors (the "Committee") or its designee. The exercise price of the
options will be the regular trading session closing price of a share of
Starbucks stock on the grant date. The grant date for your equity awards
will be on or after the date of your promotion and otherwise effective in
accordance with the Company equity grant timing guidelines. The
restricted stock units will vest 50% on the second anniversary of the grant date
and 50% on the fourth anniversary of the grant date, subject to your continued
employment. The stock options will vest in equal installments over a
period of four (4) years, beginning on the first anniversary of the grant date,
subject to your continued employment.
To ensure processing of this grant, please sign this offer letter and fax a copy to Stock Administration at 206-903-2956. To confirm the fax was received or if you have any other stock questions, please contact the Stock Administration team at stockadm@starbucks.com.
Long-Term Incentive
Starbucks Total Pay philosophy includes long-term
incentives. Each year, as determined by the Committee, you may be eligible
to receive an equity award under the Key Employee Plan with 50% of the economic
value in the form of performance restricted stock units and 50% of the economic
value in the form of stock options to purchase shares of Starbucks common
stock. Annual awards are typically granted in November and are contingent
upon Committee approval after considering a number of factors. Starbucks
reserves the right to review, change, amend, or cancel long-term incentive plans
at any time.
Stock Ownership
As a senior executive, the Companys executive stock ownership
guidelines will apply to you. The guidelines require covered executives to
achieve a minimum investment in Starbucks stock within five (5) years. Your
minimum investment is currently three (3) times your annual base salary. A copy
of the guidelines will be provided to you.
Executive Life Insurance
You will continue to receive partner life
coverage equal to three (3) times your annualized base salary, paid for by
Starbucks. You may purchase up to an additional two (2) times your annualized
base salary (for a total of five (5) times salary) to a maximum life insurance
benefit of $2,000,000.
Executive Physical Exam
You will continue to be eligible to
participate in Starbucks executive physical program. For more information,
please contact Partner Resources.
Insider Trading Policy
You will continue to be subject to the
restrictions on trading in Company securities as set forth in the Companys
Insider Trading Policy.
Section 16
Obligations
In your new role, you will
continue to be subject to the reporting requirements of Section 16 of the
Securities Exchange Act of 1934, as amended, and responsible for filings with
the Securities Exchange Commission. Starbucks legal counsel will assist you with
your filings.
Recovery of Incentive Compensation
Policy
As a Section 16 officer of the
Company, you will continue to be subject to the Starbucks Recovery of Incentive
Compensation Policy (the Clawback Policy). The Clawback Policy is included in
the consent which you previously signed indicating that you have read and agree
to the terms and conditions of the policy.
Coffee Hedging
As an officer of the Company, you are prohibited from trading
in coffee commodity futures for your own account. If you have further questions,
please talk with your Partner Resources contact.
Your employment with Starbucks will be at will, meaning that either you or the Company will be entitled to terminate your employment at any time and for any reason, not prohibited by law.
On behalf of the entire team, I wish you the best in your new role and look forward to your continued success and partnership.
Warm regards,
/s/ Howard Schultz |
Howard Schultz
chairman, president and
chief executive officer
cc: |
Partner File
Stock Administration (S-HR3) |
|
Enc.: |
Non-Competition
Agreement
Starbucks Recovery of Incentive Compensation Policy Consent |
I accept employment with Starbucks Corporation, or its wholly-owned subsidiaries, according to the terms set forth above.
/s/ Troy Alstead | 1/29/14 | ||
Troy Alstead | Date of Acceptance |
Please fax this signed letter to: Stock Administration at 206-903-2956.
January 29, 2014
Dear Scott:
Thank you for your contributions to the Companys success and congratulations on your promotion to evp and chief financial officer effective February 3, 2014.
Here Are The Specifics Of Your Offer:
Base Salary
You will be paid at a base salary that annualizes to
$550,000.
Executive Management Bonus
Plan
You will be eligible to participate
in the Executive Management Bonus Plan (EMBP) effective with your
promotion. Your new bonus target will be 75% of your eligible base
salary. For fiscal 2014 your bonus will be prorated based on your
promotion date. From the beginning of fiscal 2014 up to your promotion
date, your potential bonus will be under the General Management Incentive Plan
(GMIP) at a 55% bonus target, based on your salary immediately before your
promotion and from your promotion date through fiscal year end your potential
bonus will be under the EMBP at a 75% bonus target, based on your salary at
fiscal year end. For more information about the EMBP, please talk with
your Partner Resources contact. Starbucks Corporation (Starbucks or the
Company) reserves the right to review, change, amend, or cancel incentive
plans at any time.
Promotional Equity
Award
You will be eligible to receive an
equity award with an economic value of $600,000 (USD) under the 2005 Key
Employee Sub-Plan to Starbucks Corporation Amended and Restated 2005 Long-Term
Equity Incentive Plan (the "Key Employee Plan") with 50% of the economic value
in the form of restricted stock units and 50% of the economic value in the form
of stock options to purchase shares of Starbucks common stock. Your
eligibility for the restricted stock units and stock options is subject to
approval by the Compensation and Management Development Committee of the Board
of Directors (the "Committee") or its designee. The exercise price of the
options will be the regular trading session closing price of a share of
Starbucks stock on the grant date. The grant date for your equity awards
will be on or after the date of your promotion and otherwise effective in
accordance with the Company's equity grant timing guidelines. The
restricted stock units will vest 50% on the second anniversary of the grant date
and 50% on the fourth anniversary of the grant date, subject to your continued
employment. The stock options will vest in equal installments over a
period of four (4) years, beginning on the first anniversary of the grant date,
subject to your continued employment.
To ensure processing of this grant, please sign this offer letter and fax a copy to Stock Administration at 206-903-2956. To confirm the fax was received or if you have any other stock questions, please contact the Stock Administration team at stockadm@starbucks.com.
Long-Term Incentive
Starbucks Total Pay philosophy includes long-term
incentives. Each year, as determined by the Committee, you may be eligible
to receive an equity award under the Key Employee Plan with 50% of the economic
value in the form of performance restricted stock units and 50% of the economic
value in the form of stock options to purchase shares of Starbucks common
stock. Annual awards are typically granted in November and are contingent
upon Committee approval after considering a number of factors. Starbucks
reserves the right to review, change, amend, or cancel long-term incentive plans
at any time.
Stock Ownership
As a senior executive, the Companys executive stock ownership
guidelines will apply to you. The guidelines require covered executives to
achieve a minimum investment in Starbucks stock within five (5) years. Your
minimum investment is currently three (3) times your annual base salary. A copy
of the guidelines will be provided to you.
Executive Life
Insurance
You will continue to receive
partner life coverage equal to three (3) times your annualized base salary, paid
for by Starbucks. You may purchase up to an additional two (2) times your
annualized base salary (for a total of five (5) times salary) to a maximum life
insurance benefit of $2,000,000.
Executive Physical
Exam
You will continue to be eligible to
participate in Starbucks executive physical program. For more information,
please contact Partner Resources.
Insider Trading
Policy
You will continue to be subject to
the restrictions on trading in Company securities as set forth in the Companys
Insider Trading Policy.
Section 16 Obligations
In your new role, you will
be subject to the reporting requirements of Section 16 of the Securities
Exchange Act of 1934, as amended, and responsible for filings with the
Securities Exchange Commission. Starbucks legal counsel will assist you with
your filings.
Recovery of Incentive Compensation
Policy
As a Section 16 officer of the
Company, you are also subject to the Starbucks Recovery of Incentive
Compensation Policy (the Clawback Policy). The Clawback Policy is included in
the attached consent which you are required to sign indicating that you have
read and agree to the terms and conditions of the policy.
Coffee Hedging
As an officer of the Company, you are prohibited from trading
in coffee commodity futures for your own account. If you have further questions,
please talk with your Partner Resources contact.
Your employment with Starbucks will be at will, meaning that either you or the Company will be entitled to terminate your employment at any time and for any reason, not prohibited by law.
On behalf of the entire team, I wish you the best in your new role and look forward to your continued success and partnership.
Warm regards,
/s/ Troy Alstead |
Troy Alstead
chief operating officer
cc: |
Partner File
Stock Administration (S-HR3) |
|
Enc.: |
Non-Competition
Agreement
Starbucks Recovery of Incentive Compensation Policy Consent |
I accept employment with Starbucks Corporation, or its wholly-owned subsidiaries, according to the terms set forth above.
/s/ Scott Maw | 1/29/14 | ||
Scott Maw | Date of Acceptance |
Please fax this signed letter to: Stock Administration at 206-903-2956.
Starbucks Strengthens Senior
Leadership Team
New Structure to Bolster
Financial and Operating Organization Globally
ceo Howard Schultz Expands Focus on
Innovation and Next Generation Retailing and Payments
Initiatives
cfo Troy
Alstead promoted to chief operating officer
svp of Corporate Finance Scott
Maw promoted to executive vice president and cfo
Craig Russell promoted to
executive vice president, Global Coffee
SEATTLE (January 29, 2014) Building on record performance in FY 2013 and Q1 FY 2014, Starbucks Coffee Company (NASDAQ: SBUX) today announced a new leadership structure that positions the company to leverage its assets and operations, and gain maximum benefit from the retail, consumer, mobile and digital shifts currently underway in the global marketplace. The company will host a conference call with the financial community to discuss the changes at 2pm PT this afternoon.
These organizational moves map our internal talent to the rapidly evolving retail environment and significant strategic and market opportunities ahead of us, said Howard Schultz, Starbucks chairman, president and ceo. Each of these experienced Starbucks leaders will be working closely with the entire senior leadership team, and me, to bring even greater financial and operational discipline to our business around the world. They will partner with me as I focus on Starbucks mission, growth initiatives and the convergence and integration of our retail and e-commerce, digital, card and mobile assets around the world. There has never been a more exciting time to be a Starbucks partner, Schultz added.
The company announced today the following senior leadership changes which are effective on February 3, 2014:
Schultz to Expand Focus on Innovation
and Next Generation Retailing and Payments Initiatives
In partnership with Starbucks senior leadership team,
including chief digital officer Adam Brotman and chief strategy officer Matt
Ryan, Schultz will expand his focus on innovation in coffee, tea and the
Starbucks Experience
as well as next generation retailing and payments
initiatives in the areas of digital, mobile, card, loyalty and e-commerce to
position Starbucks for its next wave of global growth. He will also continue to
work closely with his Senior Leadership Team to ensure continued disciplined
growth and operational excellence around the world.
Troy Alstead Promoted to chief
operating officer
Building on his 22 years
of experience as a Starbucks partner, Troy Alstead will be promoted to the newly
created position of chief operating officer (coo), responsible for overseeing
the day-to-day operations of the enterprise. Alstead previously served as
Starbucks chief financial officer and group president, Global Business Services.
In his new capacity, Alstead will continue to report to Schultz and will be
responsible for aligning and prioritizing company investments across business
units. Group presidents Cliff Burrows (U.S., Americas and Teavana), John Culver
(China Asia Pacific, Channel Development and Emerging Brands) and EMEA president
Kris Engskov will now report directly to Alstead (Burrows and Culver previously
reported to Schultz; Engskov previously reported to Burrows). Also reporting to
Alstead in his new role is the companys new chief financial officer (see
below), as well as his existing senior direct reports who lead the companys
Global Technology and Global Supply Chain Organizations.
Alstead joined Starbucks in 1992 when the company was privately held and operated just over 100 stores in the U.S. and Canada. Today Starbucks operates more than 20,000 stores in 63 countries. Over the years Alstead has held numerous roles of progressing responsibility in finance and general management at the domestic, international and enterprise levels. He was also one of the original members of Starbucks international team, which included senior leadership roles in EMEA and China.
Scott Maw Promoted to executive vice
president and chief financial officer
Starbucks senior vice president of Corporate Finance, Scott Maw, will be
promoted to executive vice president and chief financial officer. Maw will
report to Alstead and have oversight for Starbucks global finance function. He
joined Starbucks as global controller in 2011 and brings more than two decades
of finance leadership experience to his new role. Prior to Starbucks, Maw
served as cfo of SeaBright Insurance and as cfo of the Consumer Banking division
at JPMorgan Chase. He has also held various finance leadership positions at GE and the Retail Banking division of Washington Mutual.
Craig Russell Promoted to executive
vice president, Global Coffee
Craig
Russell, Starbucks voice and advocate for coffee, will be promoted to executive
vice president, Global Coffee. He previously served as senior vice president for
the same function which he was appointed to in 2012. Russell will continue to
report to Schultz and continue to lead all aspects of the companys coffee
strategy, quality, innovation, purchasing, education and engagement. His team
also oversees Starbucks Farmer Support Centers and works closely with the
companys supply chain operations and global responsibility teams to advance the
companys ethical sourcing efforts. Russell joined Starbucks in 2001 as vice
president of retail operations for Seattles Best Coffee. His tenure at
Starbucks builds on nearly 15 years of restaurant management experience.
Conference Call
Starbucks will hold a conference call today at 2:00 p.m.
Pacific Time to discuss its new leadership structure, which will be hosted by
Schultz. The call will be webcast and can be accessed at http://investor.starbucks.com. A replay of the webcast will be
available through approximately 9:00 p.m. Pacific Time on Thursday, February 27,
2014.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to
ethically sourcing and roasting high-quality arabica coffee. Today, with stores
around the globe, the company is the premier roaster and retailer of specialty
coffee in the world. Through our unwavering commitment to excellence and our
guiding principles, we bring the unique
Starbucks Experience
to life
for every customer through every cup. To share in the experience, please visit
us in our stores or online at www.starbucks.com.