STARBUCKS CORP, DEF 14A, 1997-01-24

STARBUCKS CORP
DEF 14A, 1997-01-24
EATING & DRINKING PLACES

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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the registrant [X]
Filed by a party other than the registrant [ ]

Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule
14a-12

STARBUCKS CORPORATION
(Name of Registrant as specified in its Charter)

STARBUCKS CORPORATION
(Name of Person(s) Filing Proxy Statement)

Payment of filing fee (Check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which
transaction applies:

Common Stock, no par value

(2) Aggregate number of securities to which
transaction applies: As of December 27, 1996: 77,957,065

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: N.A.

(4) Proposed maximum aggregate value of transaction: N.A.

[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the form or
schedule and the date of its filing.

(1) Amount previously paid:

(2) Form, schedule or registration statement no.:

(3) Filing party:

(4) Date filed:

[Starbucks logo]

Seattle, Washington
January 24, 1997

Dear Shareholders:

You are cordially invited to attend the Starbucks
Corporation Annual Meeting of Shareholders to be held on
Thursday, March 6, 1997, at 10:00 a.m. (Pacific time) at the
Company's Kent Roasting Plant, 18411--77th Place South,
Kent, Washington. Directions to the Kent Roasting Plant are
included with this Notice of Annual Meeting and Proxy
Statement.

The matters to be acted upon are described in the
accompanying Notice of Annual Meeting and Proxy Statement.
At the meeting, we will also report on Starbucks operations
and respond to any questions you may have.

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN
TO ATTEND, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED.
PLEASE SIGN, DATE, AND MAIL THE ENCLOSED PROXY CARD AS SOON
AS POSSIBLE IN THE ENCLOSED POSTAGE PREPAID ENVELOPE IN
ORDER TO ENSURE THAT YOUR VOTE IS COUNTED. IF YOU ATTEND
THE MEETING, YOU WILL, OF COURSE, HAVE THE RIGHT TO VOTE
YOUR SHARES IN PERSON.

Very truly yours,

/s/Howard Schultz

Howard Schultz
chairman and
chief executive officer

STARBUCKS CORPORATION
2401 Utah Avenue South
Seattle, Washington 98134

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 6, 1997

To the Shareholders:

The Annual Meeting of the Shareholders of Starbucks
Corporation, a Washington corporation, will be held at the
Company's Kent Roasting Plant, 18411--77th Place South,
Kent, Washington, on Thursday, March 6, 1997, at 10:00 a.m.
(Pacific time) for the following purposes:

1. To elect two Class 1 directors to serve until the Annual
Meeting of Shareholders for the 1999 fiscal year and until
their respective successors are elected and qualified;

2. To approve a 7,025,000 share increase in the number of
shares reserved for issuance under the Company's Key
Employee Stock Option Plan - 1994;

3. To approve the material terms of the objective
performance goals under the Company's Executive Management
Bonus Plan;

4. To ratify the selection of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending
September 28, 1997; and

5. To transact such other business as may properly come
before the meeting or any adjournment thereof.

Only shareholders of record at the close of business on
December 27, 1996 will be entitled to notice of, and to vote
at, the Annual Meeting and any adjournments thereof.

The Company's Proxy Statement is submitted herewith.
Financial and other information concerning the Company is
contained in the enclosed Annual Report for the fiscal year
ended September 29, 1996.

By Order of the Board of Directors

/s/ G. Scott Greenburg
G. Scott Greenburg
secretary

Seattle, Washington
January 24, 1997

YOUR VOTE IS IMPORTANT

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED
TO DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT AS
PROMPTLY AS POSSIBLE IN THE ENCLOSED STAMPED AND ADDRESSED
ENVELOPE IN ORDER THAT THE PRESENCE OF A QUORUM MAY BE
ASSURED. THE GIVING OF SUCH PROXY DOES NOT AFFECT YOUR
RIGHT TO REVOKE IT LATER OR VOTE YOUR SHARES IN PERSON IN
THE EVENT THAT YOU SHOULD ATTEND THE MEETING.

STARBUCKS CORPORATION
2401 Utah Avenue South
Seattle, Washington 98134

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS
March 6, 1997

This Proxy Statement is furnished by the Board of
Directors of Starbucks Corporation, a Washington corporation
(the "Company" or "Starbucks"), to the holders of common
stock, no par value, of the Company (the "Common Stock"), in
connection with the solicitation of proxies by the Board of
Directors for use at the Annual Meeting of Shareholders of
the Company for fiscal year 1996 (the "Annual Meeting"), to
be held at 10:00 a.m. (Pacific time) on Thursday, March 6,
1997, at the Company's Kent Roasting Plant, 18411--77th
Place South, Kent, Washington, and at any adjournment
thereof. Directions to the Kent Roasting Plant are provided
at the end of this Proxy Statement.

A proxy delivered pursuant to this solicitation is
revocable at the option of the person giving the same at any
time before it is exercised. A proxy may be revoked, prior
to its exercise, by executing and delivering a later dated
proxy card to the Secretary of the Company prior to the
Annual Meeting, delivering written notice of revocation of
the proxy to the Secretary of the Company prior to the
Annual Meeting, or attending and voting at the Annual
Meeting. Attendance at the Annual Meeting, in and of
itself, will not constitute a revocation of a proxy. Unless
previously revoked, the shares represented by the enclosed
proxy will be voted in accordance with the shareholder's
directions if the proxy is duly executed and returned prior
to the Annual Meeting. If no directions are specified, the
shares will be voted for (i) the election of the directors
recommended by the Board of Directors; (ii) the approval of
a 7,025,000 share increase in the number of shares reserved
for issuance under the Company's Key Employee Stock Option
Plan - 1994 (the "Key Employee Option Plan"); (iii) the
approval of the material terms of the objective performance
goals under the Company's Executive Management Bonus Plan;
and (iv) the ratification of the selection by the Board of
Directors of Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending September
28, 1997, and in accordance with the discretion of the named
proxies on other matters properly brought before the Annual
Meeting.

The presence in person or by proxy of holders of record
of a majority of the outstanding shares of Common Stock is
required to constitute a quorum for the transaction of
business at the Annual Meeting. Under Washington law and
the Company's Articles of Incorporation, if a quorum is
present, a nominee for election to a position on the Board
of Directors will be elected as a Director if the votes cast
for the nominee exceed the votes cast against the nominee
and exceed the votes cast for any other nominee for that
position. Abstentions and "broker non-votes" (shares held
by a broker or nominee as to which a broker or nominee
indicates on the proxy that it does not have the authority,
either express or discretionary, to vote on a particular
matter) are counted for purposes of determining the presence
or absence of a quorum for the transaction of business at
the Annual Meeting. For the election of directors, an
abstention from voting and broker non-votes will have the
legal effect of neither a vote for nor against the nominee.
For all other matters, an abstention from voting and broker
non-votes, since they are not affirmative votes, will have
the same practical effect as a vote against the respective
matters. Proxies and ballots will be received and tabulated
by ChaseMellon Shareholder Services, L.L.C., the Company's
transfer agent.

This Proxy Statement and the enclosed proxy card are
first being mailed to shareholders on or about January 24,
1997.

The expense of preparing, printing, and mailing this
Proxy Statement and the proxies solicited hereby will be
borne by the Company. In addition to the use of the mails,
proxies may be solicited by directors, officers, and other
employees of the Company, without additional remuneration,
in person, or by telephone, telegraph or facsimile
transmission. The Company will also request brokerage
firms, banks, nominees, custodians, and fiduciaries to
forward proxy materials to the beneficial owners of shares
of Common Stock as of the record date and will provide

reimbursement for the cost of forwarding the proxy materials
in accordance with customary practice. The Company has
retained ChaseMellon Shareholder Services, L.L.C., to aid in
the solicitation of proxies. Your cooperation in promptly
signing and returning the enclosed proxy card will help to
avoid additional expense.

At December 27, 1996, the Company had 77,957,065 shares
of Common Stock outstanding, and there were no outstanding
shares of any other class of stock. Each share of Common
Stock entitles the holder thereof to one vote. Only
shareholders of record at the close of business on December
27, 1996, will be entitled to notice of, and to vote at, the
Annual Meeting.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth as of December 1, 1996
the number of shares of Common Stock held by each person
known to the Company to own beneficially more than 5% of the
outstanding shares of Common Stock. Each 5% shareholder has
sole voting and dispositive power with respect to all shares
so owned.

[CAPTION]
<TABLE>
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership (1) of Class (2)
- -----------------------------------------------------------------
<S> <C> <C>
Putnam Investment Management 5,339,695 6.86%
One Post Office Square
Boston, Massachusetts 02109

American Century Investments, Inc. 4,342,200 5.58%
4500 Main Street
Kansas City, Missouri 64111

</TABLE>

(1) Based upon filings with the Securities and Exchange
Commission made by Putnam Investment Management ("Putnam")
and American Century Investments, Inc. (formerly Twentieth
Century Companies ("American Century"). Both Putnam and
American Century are Investment Advisers registered under
section 203 of the Investment Advisers Act of 1940. Both
Putnam and American Century manage fund accounts for the
benefit of their clients. The receipt of dividends, or the
proceeds from the sale of securities, are credited to the
account which holds or held such securities.

(2) Based upon 77,786,819 shares of Common Stock
outstanding as of December 1, 1996.

The following table sets forth as of December 1, 1996,
the number of shares of Common Stock owned beneficially by
all directors and nominees for directors of the Company, the
Named Executive Officers (as defined under "Executive
Compensation" below), and all directors and executive
officers of the Company as a group. Unless otherwise noted
and except as community property laws may apply, the person
named has sole voting and investment power over the shares
reflected opposite such person's name. The Company has been
provided such information by its directors, nominees for
directors, and executive officers.

[CAPTION]
<TABLE>

Name and Address of Amount and Nature Percent of
Beneficial Owner of Beneficial Ownership Class(1)
- -----------------------------------------------------------------
<S> <C> <C>
James G. Shennan, Jr. 219,898(2)(3) *
Jeffrey H. Brotman 299,025(4) *
Arlen I. Prentice 175,284(5)(6) *
Craig J. Foley 53,200(7) *
Adrian D.P. Bellamy 25,000 *
Barbara Bass 3,500 *
Howard Schultz 3,445,588(8) 4.3%
Orin C. Smith 321,996 (9) *
M. Michael Casey 22,282(10) *
Scott Bedbury 16,666(11) *
Howard P. Behar 59,178 *
All Directors and
Executive Officers as
a Group (21 persons) 5,505,554(12) 6.8%

</TABLE>
- -----------------------------------------

*Less than 1%.

(1) Based upon 77,786,819 shares of Common Stock
outstanding as of December 1, 1996.
(2) Includes 68,500 shares subject to options that are
exercisable within 60 days.
(3) Includes 23,330 shares held by Trinity Ventures II,
L.P. ("TVII"), of which Mr. Shennan is a general partner;
6,948 shares held by Trinity Ventures III, L.P. ("TVIII"),
of which Mr. Shennan is a general partner; and 34,680 shares
held by the Shennan Family Partnership, of which Mr. Shennan
is a general partner. Under federal securities laws, Mr.
Shennan is deemed to beneficially own only those shares
equal to the greater of his interest in each partnerships'
(i) capital accounts or (ii) profit and losses. With
respect to each of TVII and TVIII, Mr. Shennan disclaims
beneficial ownership of such shares.
(4) Includes 163,672 shares subject to options that are
exercisable within 60 days.
(5) Includes 64,000 shares subject to options that are
exercisable within 60 days.
(6) Includes 19,500 shares held by the Prentice Family
Partnership, which is a general partnership of which Mr.
Prentice is a general partner. Under federal securities
laws, Mr. Prentice is deemed to beneficially own only those
shares equal to the greater of his interest in the
partnership (i) capital accounts or (ii) profit and losses.
Mr. Prentice disclaims beneficial ownership of such shares.
(7) Includes 52,000 shares subject to options that are
exercisable within 60 days.
(8) Includes 1,446,796 shares subject to options that are
exercisable within 60 days.
(9) Includes 306,230 shares subject to options that are
exercisable within 60 days.
(10) Includes 20,000 shares subject to options that are
exercisable within 60 days.
(11) Includes 16,666 shares subject to options that are
exercisable within 60 days.
(12) Includes 2,763,731 shares subject to options that are
exercisable within 60 days.

1. ELECTION OF DIRECTORS AND MANAGEMENT INFORMATION

The Bylaws of the Company, as amended, provide that the
Board of Directors shall be divided into three classes, with
such classes to be as nearly equal in number as the total
number of directors constituting the entire Board permits.
As of September 29, 1996, the Company's Board of Directors
consisted of nine members, with three members in each of
Class 1, 2, and 3. After the Annual Meeting, the Company's
Board of Directors will consist of eight members, with two
members in Class 1, and three members in each of Classes 2
and 3. At the expiration of each class' term, directors are
to be elected to serve for a term of three years and until
their respective successors have been elected and qualified.
The terms of office of Class 1, 2 and 3 directors are
scheduled to expire at the annual meetings of shareholders
for the 1996, 1997 and 1998 fiscal years, respectively.

At the Annual Meeting, shareholders will elect two
Class 1 directors to serve until the annual meeting of
shareholders for the 1999 fiscal year and until successors
are elected and qualified. Unless otherwise directed, the
persons named in the proxy intend to cast all proxies in
favor of Mr. Howard Behar and Mr. James G. Shennan, Jr. to
serve as Class 1 directors of the Company. In the event
that Mr. Behar or Mr. Shennan should become unavailable for
election to the Board of Directors for any reason, the
persons named in the proxy have discretionary authority to
vote the proxies for the election of other nominees to be
designated to fill each such vacancy by the Board of
Directors of the Company.

INFORMATION ABOUT THE NOMINEES

Class 1 Directors; term expires at annual meeting for fiscal
1996:

HOWARD P. BEHAR, 52, was appointed to the Board of
Directors of the Company, effective January 1, 1996, on
December 20, 1995. Mr. Behar has served as president of
Starbucks International 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.

JAMES G. SHENNAN, JR., 55, has been a director of the
Company since March 1990. Mr. Shennan has served as a
general partner of Trinity Ventures, a venture capital
organization, since 1989. From 1986 to 1988, he served as
the president and chief executive officer of Addison
Consultancy Group, a marketing consulting firm; and from
1974 to 1988, Mr. Shennan served as the president and chief
executive officer of Aidcom International, PLC (a
predecessor of Addison Consultancy Group), a publicly-held
marketing services company located in the United Kingdom,
and its predecessor, S&O Consultants, an international
marketing, design and research consulting organization. Mr.
Shennan serves on the board of directors of a number of
privately-held, consumer-oriented companies in which Trinity
Ventures has made an investment.

INFORMATION ABOUT DIRECTORS WHOSE TERMS OF OFFICE CONTINUE
AFTER THE ANNUAL MEETING

Class 2 Directors; terms expire at annual meeting for fiscal
1997:

JEFFREY H. BROTMAN, 54, has been a director of the
Company since March 1989. Mr. Brotman is a founder of Costco
Wholesale Corporation (now, PriceCostco, Inc.), a membership-
only wholesale club, and a number of other specialty retail
chains. Mr. Brotman, presently the chairman of PriceCostco,
Inc., served as the chairman of the Board of Directors of
Costco Wholesale Corporation, the predecessor to
PriceCostco, Inc., from its inception in 1983 to October
1993. He is on the Board of Directors of Seafirst Bank; The
Sweet Factory, a candy retailer; and Garden Botanika, Inc.,
a cosmetics and skin care retailer.

ARLEN I. PRENTICE, 59, has been a director of the
Company since February 1986. Mr. Prentice is a founder of
Kibble & Prentice, Inc., a financial services firm. Mr.
Prentice has served as a co-chairman and the chief executive
officer of Kibble & Prentice, Inc. since June 1972. Mr.
Prentice presently serves as a director of Western Drug
Distributors (d.b.a., Drug Emporium Northwest); Northland
Telecommunications Corporation, Percon, Inc., a distributor
of bar code systems; and Flow International Inc., a
manufacturer and distributor of high pressure water jet
cutting systems.

ORIN C. SMITH, 54, was appointed to the Board of
Directors of the Company, effective January 1, 1996, on
December 20, 1995. Mr. Smith has served as president and
chief operating officer of the Company since June 1994.
From March 1990 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. Mr. Smith presently serves as a director of
Oakley, Inc., a designer, manufacturer and distributor of
high-performance sunglasses and goggles.

Class 3 Directors; terms expire at annual meeting for fiscal
1998:

CRAIG J. FOLEY, 52, has been a director of the Company
since March 1990. Mr. Foley has served as president of
Wickham Capital Corp., a venture capital firm, since
February 1994. He has also served as a principal of
Phillips-Smith Specialty Retail Group, a venture capital
firm, since April 1994. From February 1982 to February
1994, Mr. Foley served on the Board of Directors of
Chancellor Capital Management, Inc., (formerly, Citicorp
Investment Management) and, as managing director of its
Alternative Asset Management Group, served as a financial
advisor to various entities. Mr. Foley serves as a director
of the EuroEnterprise and CITITECH, both of which are
offshore closed end funds; Jamba Juice, a retailer of juice-
based products; TODO WRAPS, a restaurant concept; and We're
Entertainment, a retailer of collectibles.

HOWARD SCHULTZ, 43, 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.

BARBARA BASS, 45, was appointed to the Board of
Directors of the Company, effective January 1, 1996, on
December 20, 1995. Since 1993, Ms. Bass has been the
president of Gerson Bakar Foundation. From 1989 to 1992,
Ms. Bass was president and chief executive officer of the
Emporium Weinstock Division of Carter Hawley Hales Stores,
Inc. She is on the Board of Directors of DFS Group Limited,
a retailer of luxury branded merchandise; and The Bombay
Company, Inc., a retailer.

INFORMATION ABOUT DIRECTORS WHOSE TERMS OF OFFICE WILL NOT
CONTINUE AFTER THE ANNUAL MEETING

Class 1 Director; term expires at annual meeting for fiscal
1996:

ADRIAN D.P. BELLAMY, 54, has been a director of the
Company since his appointment by the Board of Directors on
May 17, 1995. Mr. Bellamy is a director of companies and is
chairman of Airport Group International Holdings L.L.C., a
Lockheed Martin/Soros Capital joint venture in airport
management, and on the Board of Compass Limited, a shoe
manufacturer and retailer; The Gap Inc., a retailer; and
Gucci Group N.V., the parent company of all Gucci operations
world-wide. From 1983 to 1995, Mr. Bellamy was Chairman and
chief executive officer of DFS Group Limited, a retailer of
luxury branded merchandise.

Committees

The Company's Board of Directors has standing
Compensation, Special Compensation and Audit Committees; the
Company has no standing nominating committee. The members
of each Committee and the functions performed thereby are
described below:

Compensation Committee. During fiscal 1996, the
Compensation Committee was comprised of Mr. Foley, Chairman,
and Mr. Prentice and Mr. Bellamy. For fiscal 1997, the
Compensation Committee will be comprised of Mr. Prentice,
Chairman, and Mr. Foley and Ms. Bass. The Compensation
Committee reviews current remuneration of the directors and
of the executive officers of the Company and makes
recommendations to the Board of Directors regarding
appropriate periodic adjustment of such amounts. The
Compensation Committee also makes all determinations
concerning the Company's grants of stock options to officers
and employees of the Company who are eligible for such
options under each of the Company's Key Employee Option Plan
and 1991 Company-Wide Stock Option Plan.

Audit Committee. During fiscal 1996, the Audit
Committee was comprised of Mr. Bellamy, Chairman, and Mr.
Brotman and Mr. Shennan. For fiscal 1997, the Audit
Committee will be comprised of Mr. Shennan, Chairman, and
Mr. Brotman and Ms. Bass. The Audit Committee reviews the
planned scope of the services of the Company's independent
auditors; reviews financial statements and the auditors'
opinion letter; recommends the independent auditors for the
following fiscal year; reviews the recommendations of the
independent auditors relating to accounting, internal

controls, and other matters; and reviews internal controls
and accounting procedures with the Company's financial
staff.

Special Compensation Committee. The Special
Compensation Committee is comprised of Mr. Foley and Ms.
Bass. The Special Compensation Committee reviews
remuneration of certain executive officers of the Company,
including, but not limited to the chairman, president, and
president of Starbucks International under the Company's
Executive Management Bonus Plan. The Special Compensation
Committee is also charged with the administration of the
Executive Management Bonus Plan, and the selection of the
objective measures for which bonuses under the Executive
Management Bonus Plan are granted.

During the fiscal year ended September 29, 1996, the
Compensation Committee met 3 times, the Audit Committee met
3 times, and the entire Board of Directors met 5 times. The
Special Compensation Committee was created December 20, 1996
and accordingly did not meet during the fiscal year ended
September 29, 1996. Each director attended at least 75
percent of all Board meetings and meetings of Committees on
which they served during the periods they served.

EXECUTIVE COMPENSATION

Summary of Compensation

The following table summarizes the annual compensation
for services rendered, and long-term compensation awards
granted, during fiscal years 1996, 1995, and 1994 for each
of the Company's chief executive officer and its four most
highly compensated executive officers (collectively referred
to herein as the "Named Executive Officers") whose salary
and bonus exceeded $100,000 in fiscal 1996.

SUMMARY COMPENSATION TABLE
[CAPTION]
<TABLE>
Annual Long-Term
Compensation Compensation Awards
- -----------------------------------------------------------------------------------------------
Name and Principal All Other
Position Fiscal Year Salary($) Bonus($) Options Compensation($)(1)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Howard Schultz 1996 493,654 0 500,000 177,565
chairman and chief 1995 333,269 201,000 430,000 177,142
executive officer 1994 291,869 175,000 0 178,292

Orin C. Smith 1996 394,231 0 250,000 2,231
president and chief 1995 250,000 125,000 280,000 1,258
operating officer 1994 185,270 105,000 0 1,754

M. Michael Casey
senior vice president 1996 235,817 23,625 (2) 0 0 (4)
and chief financial 1995 32,761 (3) 64,728 (2) 100,000 0 (4)
officer 1994 0 0 0 0

Scott Bedbury
senior vice 1996 258,894 0 20,000 0 (4)
president - 1995 72,115 (3) 33,300 100,000 0 (4)
marketing 1994 0 0 0 0

Howard P. Behar 1996 252,885 0 100,000 1,588
president - Starbucks 1995 199,001 100,000 120,000 2,263
International 1994 175,323 92,500 0 1,267

</TABLE>

- -----------------
(1) Includes the Company's contributions to the Company's
401(k) Plan with respect to each Named Executive Officer and
payment of the term life portions of insurance premiums for
split dollar life insurance policies with respect to Mr.
Schultz.
(2) Paid in accordance with the offer letter to Mr. Casey
dated June 21, 1995.
(3) Mr. Casey was hired effective August 1, 1995, and Mr.
Bedbury was hired effective June 5, 1995.
(4) Mr. Casey and Mr. Bedbury were not eligible for the
Company's 401(k) Plan during the fiscal years listed.

GRANTS OF STOCK OPTIONS

The following table summarizes the Options granted
during fiscal year 1996 to each of the Named Executive
Officers:

[CAPTION]
<TABLE>
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for
Option Term(1)
- -------------------------------------------------------------------------------------------------------------------
% of Total
Options Granted
Options to Employees in Exercise or Base Expiration
Name Granted(#) Fiscal Year Price ($/share) Date 5%($) 10%($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Howard Schultz 250,000 10.80% 18.8125 10/02/05 2,957,770 7,495,570
250,000 10.80% 23.5000 10/02/05 3,694,756 9,363,237
Orin C. Smith 125,000 5.40% 18.8125 10/02/05 1,478,885 3,747,785
125,000 5.40% 23.5000 10/02/05 1,847,378 4,681,618
M. Michael Casey 0 0.00% N/A N/A N/A N/A
Scott Bedbury 20,000 0.86% 18.8125 10/02/05 236,622 599,646
Howard P. Behar 50,000 2.16% 18.8125 10/02/05 591,554 1,499,114
50,000 2.16% 23.5000 10/02/05 738,951 1,872,647

</TABLE>
- ----------------

(1) Potential realizable value is based on an assumption
that the stock price of the Common Stock appreciates at the
annual rate shown (compounded annually) from the date of
grant until the end of the option term. These numbers are
calculated based on the requirements of the Securities and
Exchange Commission and do not reflect the Company's
estimate of future stock price performance.

EXERCISES OF STOCK OPTIONS

The following table provides information on option
exercises in fiscal 1996 by the Named Executive Officers and
the value of such officers' unexercised options on September
29, 1996.

AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

[CAPTION]
<TABLE>
Number of Unexercised Value of Unexercised
Options at Fiscal in-the-Money Options at
Year-End (#)(2) Fiscal Year-End ($)(3)
- ----------------------------------------------------------------------------------------------------------------------
Shares Acquired
Name on Exercise (#) Value Realized ($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Howard Schultz 18,000 342,000 1,137,463/786,665 28,382,636/11,556,147
Orin C. Smith 52,006 986,901 145,328/436,666 3,190,301/6,696,121
M. Michael Casey 0 0 20,000/80,000 256,250/1,025,000
Scott Bedbury 5,000 63,125 15,000/100,000 240,000/1,561,250
Howard P. Behar 73,338 1,231,606 0/179,998 0/2,807,871

</TABLE>

- ---------------
(1) Market value of underlying securities at exercise date,
minus the exercise price of such options.
(2) Future exercisability is subject to vesting and the
optionee remaining employed by the Company.
(3) Value is calculated assuming the fair market value of
the securities underlying the option at fiscal year-end less
the exercise price multiplied by the number of in-the-money
options held. There is no guarantee that if and when these
options are exercised they will have this value.

COMPENSATION OF DIRECTORS

Directors (other than directors who are executive
officers of the Company) receive an annual retainer of
$10,000 per year, $1,000 per board meeting attended, and
$500 per committee meeting attended.

All of the Company's non-employee directors participate
in the Company's 1989 Stock Option Plan for Non-Employee
Directors, as amended (the "Outside Director Option Plan").
Under the terms of the Outside Director Option Plan, non-
employee directors are annually awarded stock options for
the purchase of up to 20,000 shares of Common Stock at a per
share exercise price equal to the fair market value on the
date of grant. During the fiscal year ended September 29,
1996, each of Messrs. Bellamy, Foley, Prentice, and Shennan
received options to purchase 20,000 shares of Common Stock
exercisable at $16.5625 per share.

Pursuant to the terms of a Consulting/Employment
Agreement, dated as of January 14, 1995, between the Company
and Jeffrey H. Brotman (the "Brotman Agreement"), Mr.
Brotman, a director of the Company, has provided consulting
services to the Company, specifically in the areas of
strategic planning, capital formation, real estate matters,
major corporate negotiations, and other business planning
matters, as requested by, and subject to the direction of,
the chairman of the Company's Board of Directors. The
Brotman Agreement provides that each year during the term of
the agreement Mr. Brotman is to receive from the Company
stock options to purchase 20,000 shares of Common Stock
exercisable at the fair market value per share on such date.
During the fiscal year ended September 29, 1996, Mr. Brotman
was granted options to purchase 20,000 shares of Common
Stock at an exercise price of $16.5625 per share.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Arlen I. Prentice, a member of the Compensation
Committee of the Company's Board of Directors, is a Co-
Chairman and the chief executive officer of Kibble &
Prentice, Inc., a company that, together with its wholly-
owned subsidiary, provides insurance brokerage and employee
benefits administrative and consulting services to the
Company. During fiscal 1996, payments by the Company to
Kibble & Prentice, Inc. and such subsidiary for such
services aggregated $262,215, excluding premiums.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION*

The Compensation Committee of the Board of Directors is
responsible for setting compensation levels for the
Company's executive officers and for overseeing the
administration of certain of the Company's stock option
plans. No members of the Compensation Committee are
officers or employees of the Company. All decisions by the
Compensation Committee are reviewed by the entire Board of
Directors, other than decisions relating to each of the
Company's Key Employee Option Plan and its 1991 Company-Wide
Stock Option Plan, which are made solely by the Compensation
Committee in order that grants under such plans satisfy the
requirements under Rule 16b-3, promulgated under the
Securities Exchange Act of 1934, as amended.

It has been the practice of the Compensation Committee
to make compensation decisions with appropriate input from
the Company's chief executive officer and by reviewing
executive compensation surveys prepared for that purpose by
outside compensation consultants. Such surveys reflect
compensation levels and practices for persons holding
comparably responsible positions at targeted peer group
companies. Based on this information and the Company's
underlying compensation philosophy, the Committee recommends
executive officer compensation packages to the Board of
Directors for approval.

The Compensation Committee believes that executive
officer compensation should be closely aligned with the
performance of the Company on both a short-term and long-
term basis, and that such compensation should assist the
Company in attracting and retaining key executives critical
to its long-term success. To that end, the Compensation
Committee's policy is that the compensation package for
executive officers should consist of three components: (i)
an annual base salary; (ii) the potential to earn incentive
bonuses each fiscal year, the amount of which is dependent
on the Company's overall performance and the individual's
performance during the prior fiscal year, and (iii) stock
option awards designed to align shareholder interests with
those of management by providing long-term incentives for
the Company's key employees.

During fiscal 1996, net revenues increased by 50% over
fiscal 1995; net earnings increased 61% over fiscal 1995;
and earnings per share increased by 50% over fiscal 1995.
These results were achieved despite unusually high coffee
costs the Company faced during the fiscal year. Sales in
both the Company's specialty sales and direct response
operations also increased. In addition, the Company opened
307 new stores, and licensees opened 26 stores during fiscal
1996, compared to 230 new Company stores and 23 new licensed
stores in fiscal 1995. Further, the Company successfully
entered the new markets of North Carolina, Rhode Island and
Ontario, Canada and opened the first two stores outside of
North America in Tokyo, Japan. In addition, during fiscal
1996, among other things, the Company successfully
introduced several new proprietary products, forged several
new strategic alliances to further develop and leverage the
Starbucks brand, and announced two strategic partnerships on
the international front.

For fiscal 1996, the Compensation Committee determined
that total direct compensation (base salary, incentive
bonus, and long-term incentives through stock option awards)
should be established at the 50th - 75th percentile of
targeted peer group companies given similar annual sales,
with a more than proportionate amount of the total direct
compensation awarded as a long-term incentive. For this
period, Mr. Schultz' total direct compensation was

- ---------------
* The report of the Compensation Committee shall not be
deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any
filing under either the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended
(together, the "Acts"), except to the extent that the
Company specifically incorporates such report by reference;
and further, such report shall not otherwise be deemed filed
under the Acts.

competitive. For fiscal 1997, the Compensation Committee
has chosen to reflect the Company's outstanding performance
on long-term success measures (which are observed to be at
the top end of the comparison groups) by setting total
direct compensation at the 75th percentile of peer group
companies.

Base salaries for executive officers are reviewed on an
annual basis and at the time of promotion or other increase
in responsibilities. Any increase or decrease in salary is
based on a determination of both the level of responsibility
of an individual and the individual's performance. In
fiscal 1996, base salary was targeted at the 50th percentile
of the peer group. During this period, actual base salary
earnings of Mr. Schultz were $493,654, approximating the
target. For fiscal 1997, base compensation for executive
officers will remain as close to the 50th percentile as
possible while avoiding salary compression with positions
reporting to these officers.

Bonuses represent an opportunity for each executive
officer to earn additional annual cash compensation in an
amount tied to a percentage of each officer's base salary.
The percentages of base salary targeted for bonus payout for
executive officers are established by the Compensation
Committee generally at the end of each fiscal year for the
following fiscal year. Actual bonus payout to an executive
officer in relation to the guideline is a function of two
measures for the prior fiscal year: the Company's overall
performance and the individual's performance. The fiscal
1996 guidelines for the Company's executive officers ranged
from 40% to 120% of base salary (with Mr. Schultz' bonus
guidelines at 60% of base salary and a maximum of twice that
target).

The Budget Reconciliation Act of 1993 (the "Act")
amended the Internal Revenue Code of 1986, as amended (the
"Code"), to add Section 162(m), which prohibits a deduction
by any publicly-held corporation for compensation paid to a
"covered employee" in excess of $1 million per year (the
"Dollar Limitation"). A covered employee is an employee
who, on the last day of the Company's taxable year, is the
chief executive officer of the Company or an employee who
appears in the Summary Compensation Table by reason of being
one of the four most highly compensated executive officers
(other than the chief executive officer) for the taxable
year. As a result of the amount of the Dollar Limitation,
the deductibility of compensation paid in 1996 was not
affected by the Act. It is anticipated that the
deductibility of compensation paid to certain Named
Executive Officers of the Company in fiscal 1997 and
thereafter could be affected by the Act. Therefore, in
December 1996, the Compensation Committee adopted the
Starbucks Corporation Executive Management Bonus Plan (the
"Executive Management Bonus Plan") which is to be
administered by the Special Compensation Committee, subject
to shareholder approval of the material terms of the
performance goals thereunder. (See Proposal 3 for a
description of the Executive Management Bonus Plan). Under
the Act, objectively measured compensation awards paid in
accordance with the Executive Management Bonus Plan
generally will not be applied toward the Dollar Limitation.
For fiscal 1997, bonus guidelines will range from 40% to
130% of base salary (with Mr. Schultz' bonus guidelines set
at 65% of base salary and a maximum of twice that target) to
be commensurate with peer group companies. The maximum
amount payable in any year would be $1,000,000.

Long-term, performance-based compensation of executive
officers takes the form of option awards under the Company's
Key Employee Option Plan. The Compensation Committee
believes that equity-based compensation ensures that the
Company's executive officers have a continuing stake in the
long-term success of the Company. All options granted by
the Company have been granted with an exercise price equal
to or in excess of the market price of the Company's Common
Stock on the date of grant and, accordingly, will have value
only if the Company's stock price increases. In granting
options under the Key Employee Option Plan, the Compensation
Committee generally takes into account each executive's
responsibilities, relative position in the Company, and past
grants. For fiscal 1996, Mr. Schultz was granted an
aggregate of 500,000 options to purchase shares of Common
Stock.

As noted above, the Company's compensation policy is
primarily based on performance. Section 162(m) of the
Internal Revenue Code imposes a limitation on the
deductibility of non-performance-based compensation in
excess of $1 million paid to Named Executive Officers. The
Compensation Committee currently intends to continue to
manage its executive compensation program for Named
Executive Officers so as to preserve the related federal
income tax deductions.

Respectfully submitted,

Arlen I. Prentice, Chairman
Craig Foley
Barbara Bass

PERFORMANCE GRAPH

The following graph depicts the Company's stock price
performance from June 26, 1992 (the date on which quotations
for the Common Stock first appeared on the NASDAQ National
Market) through September 29, 1996, relative to the
performance of the NASDAQ Stock Market (U.S. Companies), the
NASDAQ Eating and Drinking Establishments Index, and the
NASDAQ Retail Index (published by NASDAQ). All indices
shown in the graph have been reset to a base of 100 as of
June 26, 1992, and assume an investment of $100 on that date
and the reinvestment of dividends paid since that date. The
Company has not paid cash dividends on its Common Stock.
The lines represent fiscal year end index levels; if the
Company's fiscal year ended on a Sunday, the preceding
trading day was used. The chart set forth below was
prepared by the Center for Research in Security Prices,
which holds a license to use the NASDAQ indices listed
below.

[GRAPH APPEARS HERE]

[CAPTION]
<TABLE>

6/26/92 10/1/92 10/1/93 9/30/94 10/1/95 9/29/96
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Starbucks Corp. 100% 137% 285% 215% 352% 653%
NASDAQ Stock
Market 100% 106% 140% 142% 196% 231%
NASDAQ Eating
and Drinking
Establishments 100% 120% 141% 122% 132% 132%
NASDAQ Retail 100% 107% 121% 120% 132% 157%

</TABLE>

CERTAIN TRANSACTIONS

The Company supplies whole bean coffees under contract
to PriceCostco, Inc. ("PriceCostco"), a membership-only
wholesale club, of which Jeffrey H. Brotman, a director of
the Company, is Chairman of the Board. During fiscal 1996,
the Company's sales to PriceCostco aggregated $22,659,000.

On April 15, 1996, the Company loaned to Howard
Schultz, the Company's chairman of the board and chief
executive officer, the principal amount of $2,000,000, as
evidenced by a promissory note bearing interest at 6% per
annum and due and payable on December 31, 1996. This note,
including accrued interest, was paid in full on May 14,
1996.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), requires the Company's
directors and executive officers, and persons who own more
than 10% of the Common Stock, to file with the Securities
and Exchange Commission (the "SEC") initial reports of
beneficial ownership ("Forms 3") and reports of changes in
beneficial ownership of Common Stock and other equity
securities of the Company ("Forms 4"). Officers, directors,
and greater than 10% shareholders of the Company are
required by SEC regulations to furnish to the Company copies
of all Section 16(a) reports that they file. To the
Company's knowledge, based solely on a review of the copies
of such reports furnished to the Company and written
representations that no other reports were required, all
Section 16(a) filing requirements applicable to its
officers, directors, and greater than 10% beneficial owners
were complied with for the fiscal year ended September 29,
1996, other than as follows: during fiscal 1996, Jeffrey H.
Brotman, a director of the Company, reported one transaction
in a late Form 4 filing and another transaction in a second
late Form 4 filing, and Craig Foley, a director of the
Company, reported one transaction in a late Form 4 filing.

2. APPROVAL OF AMENDMENT TO KEY EMPLOYEE STOCK OPTION
PLAN - 1994

At the meeting, the Board of Directors will request
that the shareholders approve an amendment to the Key
Employee Option Plan to increase by 7,025,000 the number of
shares reserved for issuance under the Key Employee Option
Plan. The Key Employee Option Plan, as approved by the
shareholders at the Company's Annual Meeting of Shareholders
on February 15, 1995, originally reserved 6,000,000 shares
for issuance. The Board believes that stock options are
essential to attract and retain the best available personnel
for positions of substantial responsibility, to encourage
ownership of the Common Stock by employees of the Company
and its subsidiaries, and to promote the Company's success.
The Board of Directors believes that the number of shares
currently available for issuance will be insufficient to
achieve the purposes of the Key Employee Option Plan unless
additional shares are authorized. The Board of Directors
approved the amendment to the number of shares reserved
under the Key Employee Option Plan, from 6,000,000 to
13,025,000, on December 3, 1996. The Board adopted this
increase in shares reserved for issuance under the Key
Employee Option Plan, and recommends its approval by the
shareholders, in order to allow the Company to continue to
offer stock options to key employees as a part of its
overall compensation package. Other non-material changes
have been made to the Key Employee Option Plan to reflect
changes in the Beneficial Ownership rules under Section 16
of the Securities Exchange Act of 1934. These changes are
reflected in the following description. A copy of the Key
Employee Option Plan as amended, including the proposed
increase of shares authorized to 13,025,000, may be obtained
upon written request to the Company's Investor Relations
Department at the address listed on page 20.

DESCRIPTION OF THE KEY EMPLOYEE OPTION PLAN

The Key Employee Option Plan provides for the granting
of both incentive stock options and nonqualified stock
options, as those terms are described below, to employees of
and consultants to the Company. The Key Employee Option
Plan was adopted to be effective for a ten-year period that
commenced as of September 27, 1994. 6,000,000 shares of the
Company's Common Stock currently are reserved for issuance
under the Key Employee Option Plan. The 6,000,000 shares

reserved for issuance reflect the Company's two-for-one
stock split effected in the form of a stock dividend, paid
on December 1, 1995.

An incentive stock option is a stock option that is
intended to qualify for favorable tax treatment under
Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"). A nonqualified stock option is any stock
option that does not qualify as an "incentive stock option"
and will not qualify for any special tax benefits to the
optionee. The federal income tax consequences of an
employee's participation in the Key Employee Option Plan are
discussed below.

The Key Employee Option Plan will be administered by
the Compensation Committee of the Board of Directors in
accordance with the provisions of Rule 16b-3 promulgated
under the Exchange Act. The Committee shall have full power
and authority to administer and interpret the Key Employee
Option Plan and to adopt, from time to time, such
guidelines, rules, regulations, agreements, and instruments
for the administration of the Key Employee Option Plan as
the Committee deems necessary or advisable. In addition,
the Committee may engage a qualified brokerage or other
financial services firm to assist it in the administration
of the Key Employee Option Plan.

Because the officers and employees who may participate
and the amount of their options are determined by the
Committee, in its sole discretion, it is not possible to
state the names or positions of, or the number of options
that may be granted to, the Company's officers and employees
and consultants. The maximum number of options to purchase
shares of Common Stock, however, that may be granted to any
employee in any one year is 1,000,000 (which reflects the
Company's two-for-one stock split effected in the form of a
stock dividend, paid on December 1, 1995).

The Committee will establish the time or times at which
options may be exercised and whether all of the options may
be exercisable at one time or in increments over time. The
option price shall be set by the Committee at the time of
the granting of an option. For incentive stock options, the
option price may not be less than the fair market value of
the Common Stock on the date of grant. For nonqualified
stock options, the option price may be less than, equal to,
or greater than the fair market value of the Company's stock
on the date of grant. In the event of stock dividends,
splits, and similar capital changes, the Key Employee Option
Plan provides for appropriate adjustments in the number of
shares available for options and the number and option
prices of shares subject to outstanding options.

The closing price of the Company's Common Stock on the
Nasdaq National Market on December 27, 1996 was $30.50.

The term of each option shall be no more than ten years
from the date of grant. Options granted to employees expire
ninety days following termination of employment (but in no
event later than the date of expiration of the term of the
option as set forth in the option agreement), unless the
employee has been terminated for misconduct that is
willfully or wantonly harmful to the Company, in which case
the option shall expire immediately. In the case of total
and permanent disability or death of an employee, the option
terminates twelve months from the date that the employee
ceases work as a result of that employee's disability or
death (but in no event later than the date of expiration of
the term of such option as set forth in the option
agreement). In the event of such disability or death, the
Committee has the authority to extend the foregoing
expiration dates of any outstanding option in circumstances
it deems appropriate, provided that it may not extend an
option beyond the original term of such option (e.g., ten
years from date of grant).

The purchase price of option shares may be paid in
cash, by means of a cash equivalent, or in accordance with
procedures for a "cashless exercise" as the same may be
established from time to time by the Company and, if
applicable, a brokerage firm that the Company may retain to
facilitate exercises of options and sales of shares under
this Plan. For nonqualified options, the option holder must
also pay the Company, at the time of purchase, the amount of
federal, state, and local withholding taxes required to be
withheld by the Company. The Committee may permit an
optionee to pay such withholding taxes by having the Company
withhold shares of Common Stock that has a fair market value
at the time of exercise equal to the amount required to be
withheld.

Notwithstanding any vesting requirements of an option,
in the event of a proposed merger, reorganization,
separation, or other corporate transaction, wherein the
Company is not to be the surviving corporation an optionee
may purchase the full amount of shares of Common Stock for
which options have been granted, whether vested or unvested.
In the event that the Company is the survivor of a proposed
merger, reorganization, separation, or other such corporate
transaction, the Committee shall have the right to
substitute or assume options. The number of shares reserved
for the Key Employee Option Plan may be increased by the
corresponding number of options assumed and, in the case of
a substitution, by the net increase in the number of shares
subject to options before and after the substitution.

In the event of a proposed dissolution or liquidation
of the Company, during the period that commences as of the
date that the shareholders approved the dissolution and ends
seven days prior to the dissolution, an optionee may
conditionally purchase the full amount of shares of Common
Stock for which options have been granted, whether vested or
unvested.

The Key Employee Option Plan may be modified, amended,
or terminated by the Committee except with respect to
options granted prior to such action. The Committee shall
have the authority to adopt such modifications, procedures,
and subplans as may be necessary or desirable to comply with
provisions of the laws of foreign countries in which the
Company or its subsidiaries may operate to assure the
viability of the benefits from options granted to employees
employed in such countries and to meet the objectives of the
Plan. Notwithstanding the foregoing, shareholder approval
is required for any amendment which increases the number of
shares subject to the Key Employee Option Plan (other than
in connection with automatic adjustments due to changes in
capitalization or the assumption or substitution of options
in connection with mergers or acquisitions) or which is
otherwise subject to shareholder approval pursuant to Rule
16b-3 promulgated under the Exchange Act.

The issuance of stock upon exercise of options is
subject to the registration with the Securities and Exchange
Commission of the shares reserved by the Company for the Key
Employee Option Plan.

The options are nonassignable otherwise than (i) by
will or by the laws of descent and distribution, or (ii) in
the case of a Nonqualified Stock Option, by gift or, with
the consent of the Company, for value to immediate family
members of the optionee, partnerships of which the only
partners are members of the optionee's immediate family, and
trusts established solely for the benefit of such immediate
family members.

FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE KEY EMPLOYEE
OPTION PLAN

The federal income tax consequences of an employee's
participation in the Key Employee Option Plan are complex
and subject to change. The following discussion, is only a
summary of the general rules applicable to options.
Recipients of options under the Key Employee Option Plan
should consult their own tax advisors since a taxpayer's
particular situation may be such that some variation of the
general rules would apply.

INCENTIVE STOCK OPTIONS

If an option granted under the Key Employee Option Plan
is treated as an incentive stock option, the optionee will
not recognize any income upon either the grant or the
exercise of the option and the Company will not be allowed a
deduction for federal tax purposes with respect to such
grant or exercise. Upon a sale of the shares, the tax
treatment to the optionee and the Company will depend
primarily upon whether the optionee has met certain holding
period requirements at the time he or she sells the shares.
In addition, as discussed below, the exercise of an
incentive stock option may subject the optionee to
alternative minimum tax liability.

If an optionee exercises an incentive stock option and
does not dispose of the shares received within two years
after the date of the grant of such option or within one
year after transfer of the shares to him or her, any gain
realized upon disposition will be characterized as long-term
capital gain. In such case, the Company will not be
entitled to a federal tax deduction.

If the optionee disposes of the shares either within
two years after the date that the option is granted or
within one year after the transfer of the shares to him or
her, such disposition will be treated as a disqualifying
disposition and an amount equal to the lesser of (1) the
fair market value of the shares on the date of exercise
minus the purchase price, or (2) the amount realized on the
disposition minus the purchase price, will be taxed as
ordinary income to the optionee in the taxable year in which
the disposition occurs. The excess, if any, of the amount
realized upon disposition over the fair market value at the
time of the exercise of the option will be treated as long-
term capital gain if the shares have been held for more than
one year following the exercise of the option. In the event
of a disqualifying disposition, the Company may withhold
income taxes from the optionee's compensation with respect
to the ordinary income realized by the optionee as a result
of the disqualifying disposition.

The exercise of an incentive stock option may subject
an optionee to alternative minimum tax liability because the
excess of the fair market value of the shares at the time an
incentive stock option is exercised over the purchase price
of the shares is included in income for purposes of the
alternative minimum tax even though it is not included in
the taxable income for purposes of determining the regular
tax liability of an incentive stock option recipient.
Consequently, an optionee may be obligated to pay
alternative minimum tax in the year he or she exercises an
incentive stock option.

In general, there will be no federal income tax
deductions allowed to the Company upon the grant, exercise,
or termination of an incentive stock option. However, in
the event an optionee sells or disposes of stock received
upon the exercise of an incentive stock option in a
disqualifying disposition, the Company will be entitled to a
deduction for federal income tax purposes in an amount equal
to the ordinary income, if any, recognized by the optionee
upon disposition of the shares, provided that the deduction
is not otherwise disallowed under the Code.

NONQUALIFIED STOCK OPTIONS

Nonqualified stock options granted under the Key
Employee Option Plan do not qualify as "incentive stock
options" and will not qualify for any special tax benefits
to the optionee. An optionee will not recognize any taxable
income at the time he or she is granted a nonqualified
option. However, upon its exercise, the optionee will
recognize ordinary income for federal tax purposes measured
by the excess of the then fair market value of the shares
over the option exercise price. The income realized by the
optionee will be subject to income tax withholding by the
Company out of the current earnings paid to the optionee.
If such earnings are insufficient to pay the tax, the
optionee will be required to make a direct payment to the
Company for the tax liability.

The optionee's basis for determination of gain or loss
upon the subsequent disposition of shares acquired upon the
exercise of a nonqualified stock option will be the amount
paid for such shares plus any ordinary income recognized as
a result of the exercise of such option. Upon a disposition
of any shares acquired pursuant to the exercise of a
nonqualified stock option, the difference between the sale
price and the optionee's basis in the shares will be treated
as a capital gain or loss and will be characterized as long-
term capital gain or loss if the shares have been held for
more than one year at the date of their disposition.

In general, there will be no federal tax consequences
to the Company upon the grant or termination of a
nonqualified stock option or a sale or disposition of the
shares acquired upon the exercise of a nonqualified stock
option. However, upon the exercise of a nonqualified stock
option, the Company will be entitled to a deduction for
federal income tax purposes equal to the amount of ordinary
income that an optionee is required to recognize as a result
of the exercise, provided that the deduction is not
otherwise disallowed under the Code.

VOTE REQUIRED AND BOARD RECOMMENDATION

The affirmative vote of the holders of a majority of
the shares of Common Stock represented at the meeting is
required for approval of the amendment to the Key Employee
Option Plan. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE APPROVAL OF THE AMENDMENT TO THE KEY EMPLOYEE OPTION
PLAN.

3. APPROVAL OF THE MATERIAL TERMS OF THE PERFORMANCE GOALS UNDER
THE STARBUCKS CORPORATION EXECUTIVE MANAGEMENT BONUS PLAN

INTRODUCTION

At the Annual Meeting, the Company's shareholders will
be requested to consider and act upon a proposal to approve
the material terms of the performance goals under the
Starbucks Corporation Executive Management Bonus Plan (the
"Executive Management Bonus Plan").

On December 20, 1996, the Compensation Committee and
the Special Compensation Committee adopted the Executive
Management Bonus Plan, subject to approval by the Company's
shareholders of the material terms of the performance goals
thereunder. The purpose of the Executive Management Bonus
Plan is to provide the Company with the ability to provide
incentive compensation that is linked to the profitability
of the Company's businesses and increases in shareholder
value.

Although no shareholder approval is required for the
Company to enact and maintain the Executive Management Bonus
Plan, shareholder approval of the Executive Management Bonus
Plan's objective performance goals is required to ensure tax
deductibility by the Company of bonuses payable under the
Executive Management Bonus Plan.

DESCRIPTION

Set forth below is a summary of certain important
features of the Executive Management Bonus Plan and a
description of the material terms of the performance goals
thereunder that shareholders are being asked to approve.

Administration. The Executive Management Bonus Plan
will be administered by the Special Compensation Committee
of the Board. Among other things, the Special Compensation
Committee will have the authority to select participants in
the Executive Management Bonus Plan from among the Company's
executive officers and to determine the performance goals,
target amounts and other terms and conditions of awards
under the Executive Management Bonus Plan (subject to the
terms of the Executive Management Bonus Plan). The Special
Compensation Committee also will have the authority to
establish and amend rules and regulations relating to the
Executive Management Bonus Plan and to make all other
determinations necessary and advisable for the
administration of the Executive Management Bonus Plan. All
decisions made by the Special Compensation Committee
pursuant to the Executive Management Bonus Plan will be made
in the Special Compensation Committee's sole discretion and
will be final and binding.

Eligibility. The chairman, presidents, and senior vice
presidents of the Company and its subsidiaries as
recommended by the Compensation Committee and designated by
the Special Compensation Committee are eligible to be
granted awards under the Executive Management Bonus Plan.

Terms of Awards. Awards under the Executive Management
Bonus Plan will consist of cash amounts payable upon the
achievement, during a specified performance period, of
specified objective and subjective performance goals.
Seventy percent (70%) of the awards available will be based
upon specified objective performance goals, and thirty
percent (30%) of the awards available will be based upon
specific subjective performance goals. At the beginning of
a performance period for a given award, the Special
Compensation Committee will establish the performance
goal(s) (both objective and subjective) and the target
amount of the award, which will be earned if the performance
goal(s) are achieved in full, together with any lesser
amount that will be earned if the performance goal(s) are
only partially achieved. After the end of the performance
period, the Special Compensation Committee will certify the
extent to which the performance goals are achieved and
determine the amount of the award that is payable; provided
that the Special Compensation Committee will have the
discretion to determine that the actual amount paid with
respect to an award will be less than (but not greater than)
the amount earned.

Objective Performance Goals. The Executive Management
Bonus Plan provides that at the beginning of each plan
period (the Company's fiscal year), the Special Compensation
Committee selects specific objective measures among return
on capital, earnings per share, sales growth and volume,
and/or return on assets (collectively the "Objective
Performance Measures"). Single or multiple Objective
Performance Measures may be selected. The Objective
Performance Measures, if met, will comprise seventy percent
(70%) of the bonuses available under the Executive
Management Bonus Plan. If the Objective Performance
Measures selected by the Special Compensation Committee are
not met in full, no bonus is payable under the objective
portion (70%) of the Executive Management Bonus Plan.

For the 1997 fiscal year, the Special Compensation
Committee has selected the Company's earnings per share as
the Objective Performance Measure. Thus, if approved by
shareholders, 70% of the individual bonuses available under
the Executive Management Bonus Plan will be based on growth
of the Company's earnings per share. The actual awards to
be paid under the Executive Management Bonus Plan (or that
would have been payable under the Plan for the 1996 Fiscal
Year, had the Executive Management Bonus Plan then been in
effect) cannot be determined at this time since the awards
are dependent on the Company's financial performance for the
1997 Fiscal Year. If the Objective Performance Measures are
met, however, the maximum dollar amount payable to any
participant in any one year under the Objective Performance
Measures is $1,000,000.

Subjective Performance Goals. The Executive Management
Bonus Plan provides further that the remaining thirty
percent (30%) of the total bonus payout available is to be
based on individual goals with corresponding percentage
weights designed to measure a participant's achievements
(the "Subjective Performance Measures"). Such Subjective
Performance Goals differ from participant to participant,
are established at the beginning of each plan period, and
will be paid to the recipients regardless of whether this
proposal is approved by the shareholders of the Company.

The Special Compensation Committee will also determine
the amounts of the target awards that will be paid if the
Objective Performance Measures and Subjective Performance
Measures are met and the method by which such amounts will
be calculated.

REASON FOR SHAREHOLDER APPROVAL

The Executive Management Bonus Plan has been designed
to take into account certain limits on the ability of a
public corporation to claim tax deductions for compensation
paid to certain highly compensated executives. Section
162(m) of the Code generally denies a corporate tax
deduction for annual compensation exceeding $1 million paid
to the chief executive officer and the four other most
highly compensated officers of a public corporation. (See
"Executive Compensation -- Compensation Committee Report",
above.) However, "Qualified Executive Management Bonus Plan
compensation" is exempt from this limitation. Qualified
Executive Management Bonus Plan compensation is compensation
paid based solely upon the achievement of objective
performance goals, the material terms of which are approved
by the shareholders of the paying corporation. The
shareholders of the Company are thus being asked to approve
the material terms of the objective performance goals under
the Executive Management Bonus Plan, as described above.

VOTE REQUIRED AND BOARD RECOMMENDATION

Approval of the performance goals under the Starbucks
Corporation Executive Management Bonus Plan requires the
affirmative approval of the holders of a majority of the
Common Shares present in person, or by proxy, at the Annual
Meeting.

THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF THE
PERFORMANCE GOALS UNDER THE EXECUTIVE MANAGEMENT BONUS PLAN
IS IN THE BEST INTERESTS OF ALL SHAREHOLDERS AND,
ACCORDINGLY, RECOMMENDS A VOTE FOR THIS PROPOSAL.

4. RATIFICATION OF SELECTION OF AUDITORS

The Board of Directors will request that the
shareholders ratify its selection of Deloitte & Touche LLP,
independent auditors, to examine the consolidated financial
statements of Starbucks for the fiscal year ending September
28, 1997. Deloitte & Touche LLP examined the consolidated
financial statements of the Company for the fiscal year
ended September 29, 1996. Representatives of Deloitte &
Touche LLP will be present at the Annual Meeting to make a
statement if they desire to do so and respond to questions
by shareholders. The affirmative vote of a majority of the
shares represented at the meeting is required for the
ratification of the Board's selection of Deloitte & Touche
LLP as the Company's independent auditors for the fiscal
year ending September 28, 1997. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION OF
DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS OF THE
COMPANY.

PROPOSALS OF SHAREHOLDERS

Shareholder proposals to be presented at the Company's
next Annual Meeting of Shareholders and included in the
Company's Proxy Statement relating to such meeting must be
received by the Company at its executive offices no later
than September 19, 1997.

OTHER BUSINESS

It is not intended by the Board of Directors to bring
any other business before the meeting, and so far as is
known to the Board, no matters are to be brought before the
meeting except as specified in the notice of the meeting.
However, as to any other business which may properly come
before the meeting, it is intended that proxies, in the form
enclosed, will be voted in respect thereof, in accordance
with the judgment of the persons voting such proxies.

STARBUCKS CORPORATION
By Order of the Board of
Directors

/s/G.Scott Greenburg

G. Scott Greenburg
secretary

Seattle, Washington
January 24, 1997

10-K REPORT AVAILABLE

A copy of the Company's annual report on Form 10-K, as
filed with the Securities and Exchange Commission, will be
furnished without charge to shareholders upon request to:

Investor Relations
Starbucks Corporation
2401 Utah Avenue South
Seattle, Washington 98134
(206) 447-1575 x7118

DIRECTIONS TO STARBUCKS ANNUAL SHAREHOLDERS MEETING
March 6, 1997

Traveling North or South on I-5:
Take Exit 154 to I-405 North
Take Exit 1 (West Valley Highway)
Turn Right on West Valley Highway
Turn Left on 180th Avenue South
Turn Right on 80th Avenue South
Turn Right on 184th Street

Traveling North or South on I-405:
Take Exit 2 (Kent/Auburn South 167)
Travel South on 167
Take 180th Valley Highway Exit
Turn Left on East Valley Highway
Turn Right on 180th Avenue South
Turn Left on 80th Avenue South
Turn Right on 184th Street

The Kent Roasting Plant is on the left:
18411 77th Place South
Kent, Washington

[FRONT]

PROXY

FOR ANNUAL MEETING OF THE SHAREHOLDERS

STARBUCKS CORPORATION

This Proxy Is Solicited On Behalf Of The Board of Directors

The undersigned hereby appoints Howard Schultz and Orin
C. Smith (collectively, the "Proxies"), and each of them,
with full power of substitution, as proxies to vote the
shares which the undersigned is entitled to vote at the
Annual Meeting of the Company to be held at the Company's
Kent Roasting Plant 18411--77th Place South, Kent,
Washington, on Thursday, March 6, 1997 at 10:00 a.m. and at
any adjournments thereof.

1. FOR Election of directors: [ ] Howard P. Behar and
James G. Shennan, Jr.

WITHHOLD AUTHORITY To Vote for the following Directors:
_________________________________

2. [ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal to approve a 7,025,000 share increase in the number
of shares reserved for issuance under the Company's Key
Employee Stock Option Plan - 1994.

3. [ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal to approve the material terms of the objective
performance goals under the Company's Executive Management
Bonus Plan.

4. [ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal to ratify the selection of Deloitte & Touche LLP as
the Company's independent auditors for the fiscal year
ending September 28, 1997.

5. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the
meeting.

[REVERSE]

This proxy when properly signed will be voted and will
be voted in the manner directed herein by the undersigned
shareholder. If NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, 3, AND 4.

______________________________
Signature

______________________________
Signature, if held jointly

Dated: ____________________, 1997

IMPORTANT - PLEASE SIGN AND RETURN PROMPTLY. When
shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee, or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in
partnership name by an authorized person.