GREEN MOUNTAIN COFFEE, INC.
STOCK OPTION AGREEMENT
UNDER 1993 STOCK OPTION PLAN
INCENTIVE STOCK OPTION
As of October 21, 1997
AGREEMENT entered into by and between Green Mountain Coffee, Inc., a
Delaware corporation with its principal place of business in Waterbury, Vermont
(together with its subsidiaries, the "Company"), and the undersigned employee of
the Company (the "Optionee").
WHEREAS, the Company desires to grant the Optionee an incentive stock
option under the Company's 1993 Stock Option Plan, as amended (the "Plan") to
acquire shares of the Company's Common Stock, par value $.10 per share (the
"Shares").
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
ACCORDINGLY, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option. The Company hereby grants to the Optionee an incentive
stock option (the "Option") to purchase all or any part of the number of Shares
shown at the end of this Agreement on the terms and conditions hereinafter set
forth. This option is intended to be treated as an incentive stock option under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. Purchase Price.
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per Share shown at the end of this Agreement.
3. Time of Exercise of Option.
Subject to Section 4 below, the Option shall be first exercisable as
follows:
(i) as to 3,333 Shares October 21, 1998;
(ii) as to 3,333 Shares October 21, 1999; and
(iii) as to 3,334 Shares October 21, 2000.
To the extent the Option is not exercised by the Optionee when it becomes
exercisable, it shall not expire, but shall be carried forward and shall be
exercisable, on a cumulative basis, until the Expiration Date, as hereinafter
defined, subject to the other terms of this Agreement.
4. Term of Options; Exercisability.
(a) Term.
(i) If not earlier terminated as provided below, each Option
shall expire on the date shown at the end of this Agreement
(the "Expiration Date"), as determined by the Board of
Directors of the Company (the "Board"). (ii) Except as
otherwise provided in this Section 4, if the Optionee's
employment by the Company is terminated, the Option granted
to the Optionee hereunder shall terminate on the earlier of
ninety days after the date the Optionee's employment by the
Company is terminated, or (ii) the date on which the Option
expires by its terms.
(iii)If the Optionee's employment is terminated by the Company
for cause or because the Optionee is in breach of any
employment agreement, the Option will terminate on the date
the Optionee's employment is terminated by the Company.
(iv) If the Optionee's employment is terminated by the Company
because the Optionee has become permanently disabled (within
the meaning of Section 22(e)(3) of the Code), such Option
shall terminate on the earlier of (i) one year after the
date such Optionee's employment by the Company is
terminated, or (ii) the date on which the Option expires by
its terms.
(v) In the event of the death of the Optionee, the Option
granted to such Optionee shall terminate on the earlier of
(i) one year after the date such Optionee's employment by
the Company is terminated; or (ii) the date on which the
Option expires by its terms.
(b) Exercisability.
(i) Except as provided below, if the Optionee's employment by
the Company is terminated, the Option granted to the
Optionee hereunder shall be exercisable only to the extent
that the right to purchase shares under such Option has
accrued and is in effect on the date the Optionee's
employment by the Company is terminated.
(ii) If the Optionee's employment is terminated by the Company
because he or she has become permanently disabled, as
defined above, the option granted to the Optionee hereunder
shall be immediately exercisable as to the full number of
Shares covered by such Option, whether or not under the
provisions of Section 3 hereof such Option was otherwise
exercisable as of the date of disability.
(iii)In the event of the death of the Optionee, the Option
granted to such Optionee may be exercised to the full number
of Shares covered thereby, whether or not under the
provisions of Section 3 hereof the Optionee was entitled to
do so at the date of his or her death, by the executor,
administrator or personal representative of such Optionee,
or by any person or persons who acquired the right to
exercise such Option by bequest or inheritance or by reason
of the death of such Optionee.
5. Manner of Exercise of Option.
(a) To the extent that the right to exercise the Option has accrued
and is in effect, the option may be exercised in full or in part by giving
written notice to the Company stating the number of Shares exercised and
accompanied by payment in full for such Shares. No partial exercise may be
made for less than one hundred (100) full shares of Common Stock. Payment
may be either wholly in cash or in whole or in part in Shares already owned
by the person exercising the option, valued at fair market value as of the
date of exercise; provided, however, that payment of the exercise price by
delivery of Shares already owned by the person exercising the Option may be
made only if such payment does not result in a charge to earnings for
financial accounting purposes as determined by the Board. Upon such
exercise, delivery of a certificate for paid-up, non-assessable Shares
shall be made at the principal office of the Company to the person
exercising the option, not less than thirty (30) and not more than ninety
(90) days from the date of receipt of the notice by the Company.
(b) The Company shall at all times during the term of the Option
reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of the option.
6. Non-Transferability.
The right of the Optionee to exercise the Option shall not be
assignable or transferable by the Optionee otherwise than by will or the
laws of descent and distribution, and the Option may be exercised during
the lifetime of the Optionee only by him or her. The Option shall be null
and void and without effect upon the bankruptcy of the Optionee or upon any
attempted assignment or transfer, except as hereinabove provided, including
without limitation any purported assignment, whether voluntary or by
operation of law, pledge, hypothecation or other disposition contrary to
the provisions hereof, or levy of execution, attachment, trustee process or
similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
(a) In the event that for any reason the Shares to be issued upon
exercise of the Option shall not be effectively registered under the
Securities Act of 1933, as amended (the "1933 Act"), upon any date on which
the option is exercised in whole or in part, the person exercising the
Option shall give a written representation to the Company in the form
attached hereto as Exhibit 1 and the Company shall place an "investment
legend", so-called, as described in Exhibit 1, upon any certificate for the
Shares issued by reason of such exercise. (b) The Company shall be under no
obligation to qualify Shares or to cause a registration statement or a
post-effective amendment to any registration statement to be prepared for
the purposes of covering the issue of Shares.
8. Adjustments on Changes in Capitalization.
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Agreement.
9. No Special Employment Rights.
Nothing contained in the Plan or this Agreement shall be construed or
deemed by any person under any circumstances to bind the Company to continue the
employment of the Optionee for the period within which this Option may be
exercised. However, during the period of the Optionee's employment, the Optionee
shall render diligently and faithfully the services which are assigned to the
Optionee from time to time by the Board or by the executive officers of the
Company and shall at no time take any action which directly or indirectly would
be inconsistent with the best interests of the Company.
10. Rights as a Shareholder.
The Optionee shall have no rights as a shareholder with respect to any
Shares which may be purchased by exercise of this option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for such Shares. The
Company may agree to permit the Optionee to withhold Shares purchased upon
exercise of this Option to satisfy the above-mentioned withholding requirement.
IN WITNESS HEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand and seal, all as of the day
and year first above written.
GREEN MOUNTAIN COFFEE, INC. OPTIONEE
By: /s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxx
______________________ ________________________
Xxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxx
President
10,000
________________________
Number of Shares
$10.00
________________________
Purchase Price Per Share
October 21, 2007
________________________
Expiration Date
EXHIBIT 1
TO STOCK OPTION AGREEMENT
Gentlemen:
In connection with the exercise by me as to ________ shares of Common
Stock, $.10 per share par value, of Green Mountain Coffee, Inc. (the "Company")
under the incentive stock option agreement dated as of October 21, 1997, granted
to me under the 1993 Stock Option Plan, as amended, I hereby acknowledge that I
have been informed as follows:
1. The shares of common stock of the Company to be issued to me pursuant to
the exercise of said option have not been registered under the Securities Act of
1933 (the "1933 Act"), and accordingly, must be held indefinitely unless such
shares are subsequently registered under the 1933 Act, or an exemption from such
registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
1933 Act can be made only after the holding period and in limited amounts in
accordance with the terms and conditions provided by that Rule, and in any sale
to which that Rule is not applicable, registration or compliance with some other
exemption under the 1933 Act will be required.
3. The Company is under no obligation to me to register the shares or to
comply with any such exemptions under the 1933 Act.
4. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the shares to me, I
hereby represent and warrant that I am acquiring such shares for my own account
for investment, and that I will not sell, pledge or transfer such shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the 1933 Act. In view of this representation and warranty, I
agree that there may be affixed to the certificates for the shares to be issued
to me, and to all certificates issued hereafter representing such shares (until
in the opinion of counsel, which opinion must be reasonably satisfactory in form
and substance to counsel for the Company, it is no longer necessary or required)
a legend as follows:
"The shares of common stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), and were
acquired by the registered holder, pursuant to a representation and warranty
that such holder was acquiring such shares for his own account and for
investment, with no intention to transfer or dispose of the same, in violation
of the registration requirements of the Act. These shares may not be sold,
pledged, or transferred in the absence of an effective registration statement
under the Act, or an opinion of counsel, which opinion is reasonably
satisfactory to counsel to the Company, to the effect that registration is not
required under the Act."
I further agree that the Company may place a stop order with its Transfer
Agent, prohibiting the transfer of such shares, so long as the legend remains on
the certificates representing the shares.
Very truly yours,
Xxxxxxx X. Xxxxx
