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Sample Business Contracts

1998 Employee Stock Purchase Plan - Green Mountain Coffee Inc.

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                           GREEN MOUNTAIN COFFEE, INC.
                        1998 EMPLOYEE STOCK PURCHASE PLAN



Article 1 - Purpose.

         This 1998  Employee  Stock  Purchase  Plan (the  "Plan") is intended to
encourage  stock ownership by all eligible  employees of Green Mountain  Coffee,
Inc. (the "Company"), a Delaware corporation, and its participating subsidiaries
(as  defined in Article  17) so that they may share in the growth of the Company
by acquiring or increasing their proprietary  interest in the Company.  The Plan
is  designed  to  encourage  eligible  employees  to remain in the employ of the
Company and its participating  subsidiaries.  The Plan is intended to constitute
an "employee  stock  purchase  plan" within the meaning of Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "Code").

Article 2 - Administration of the Plan.

         The Compensation  Committee of the Board of Directors (the "Committee")
will administer the Plan. The  interpretation  and construction by the Committee
of any  provisions of the Plan or of any option granted under it shall be final,
unless  otherwise  determined by the Board of Directors.  The Committee may from
time to time adopt such rules and  regulations  for  carrying out the Plan as it
may deem best,  provided that any such rules and regulations shall be applied on
a uniform  basis to all  employees  under  the  Plan.  No member of the Board of
Directors or the Committee shall be liable for any action or determination  made
in good faith with respect to the Plan or any option granted under it.

         Notwithstanding  the  foregoing,  the Board of  Directors  shall at all
times  retain  the  power to  administer  this  Plan.  In such  event,  the word
"Committee" wherever used herein shall be deemed to mean the Board of Directors.

Article 3 - Eligible Employees.

         All employees of the Company or any of its  participating  subsidiaries
who have completed 30 days of employment and whose customary  employment is more
than 20 hours per week shall be  eligible to receive  options  under the Plan to
purchase common stock of the Company,  and all eligible employees shall have the
same rights and privileges hereunder.  Persons who are eligible employees on the
first business day of any Payment Period (as defined in Article 5) shall receive
their options as of such day.  Persons who become  eligible  employees after any
date on which options are granted under the Plan shall be granted options on the
first day of the next succeeding  Payment Period on which options are granted to
eligible  employees  under  the Plan.  Directors  who are not  employees  of the
Company  shall not be eligible to receive  options under this Plan. In no event,
however,  may an  employee  be granted an option if such  employee,  immediately
after the option was granted,  would be treated as owning stock  possessing five
percent (5%) or more of the total combined  voting power or value of all classes
of stock of the Company or of any parent corporation or subsidiary  corporation,
as the terms "parent  corporation"  and "subsidiary  corporation" are defined in
Section 424(e) and (f) of the Code. For purposes of determining  stock ownership
under this paragraph,  the rules of Section 424(d) of the Code shall apply,  and
stock which the employee may purchase under outstanding options shall be treated
as stock owned by the employee.

Article 4 - Stock Subject to the Plan.

         The stock  subject to the options under the Plan shall be shares of the
Company's  authorized but unissued common stock,  par value $0.10 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company,  including
shares purchased in the open market. The aggregate number of shares which may be
issued  pursuant to the Plan is 150,000,  subject to  adjustment  as provided in
Article 12. If any option  granted  under the Plan shall expire or terminate for
any reason  without  having been exercised in full or shall cease for any reason
to be exercisable in whole or in part, the  unpurchased  shares subject  thereto
shall again be available under the Plan.

Article 5 - Payment Period and Stock Options.

         The Payment  Periods  shall  consist of the first half of the Company's
fiscal year and the second half of the Company's  fiscal year. The first Payment
Period will be the first half of the Company's 1999 fiscal year.

         Subject  to the  limitations  set forth in the last  paragraph  of this
Article 5, twice each year,  on the first  business day of each Payment  Period,
the Company will grant to each eligible  employee who is then a  participant  in
the Plan an option to purchase on the last day of such  Payment  Period,  at the
Option Price hereinafter  provided for, the number of shares provided in Article
6, on condition that such employee  remains  eligible to participate in the Plan
throughout  the  remainder  of such Payment  Period.  The  participant  shall be
entitled  to  exercise  the  option  so  granted  only  to  the  extent  of  the
participant's  accumulated  payroll  deductions  on the last day of such Payment
Period.  The Option Price per share for each Payment  Period shall be the lesser
of (i) 85% of the average market price of the Common Stock on the first business
day of the Payment Period and (ii) 85% of the average market price of the Common
Stock on the last business day of the Payment Period, in either event rounded up
to avoid  fractions of a dollar  other than 1/4,  1/2, and 3/4. The Option Price
shall be subject to adjustment as provided in Article 12.

         For purposes of the Plan,  the term "average  market price" on any date
means (i) the  average  (on that  date) of the high and low prices of the Common
Stock on the principal national securities exchange on which the Common Stock is
traded, if the Common Stock is then traded on a national securities exchange; or
(ii) the last  reported  sale price (on that  date) of the  Common  Stock on the
Nasdaq  National  Market,  if the Common  Stock is not then traded on a national
securities  exchange;  or (iii) the average of the closing bid and asked  prices
last   quoted  (on  that  date)  by  an   established   quotation   service  for
over-the-counter  securities,  if the Common Stock is not reported on the Nasdaq
National Market;  or (iv) if the Common Stock is not publicly  traded,  the fair
market value of the Common Stock as  determined  by the  Committee  after taking
into  consideration all factors which it deems appropriate,  including,  without
limitation,  recent  sale and  offer  prices  of the  Common  Stock  in  private
transactions negotiated at arm's length.

         For purposes of the Plan,  the term "business day" means a day on which
there is trading on the Nasdaq  National Market or the  aforementioned  national
securities   exchange,   whichever  is  applicable  pursuant  to  the  preceding
paragraph, and if neither is applicable, a day that is not a Saturday, Sunday or
legal holiday in Vermont.

         No employee  shall be granted an option  which  permits the  employee's
right to  purchase  stock  under the Plan,  and under all other  Section  423(b)
employee  stock  purchase  plans of the  Company  and any  parent or  subsidiary
corporations,  to accrue at a rate which exceeds $25,000 of fair market value of
such  stock  (determined  on the date or dates  that  options on such stock were
granted) for each calendar year in which such option is outstanding at any time.
The  purpose of the  limitation  in the  preceding  sentence  is to comply  with
Section  423(b)(8)  of  the  Code.  If  the  participant's  accumulated  payroll
deductions  on the last day of the Payment  Period  would  otherwise  enable the
participant  to  purchase  Common  Stock  in  excess  of the  Section  423(b)(8)
limitation  described  in  this  paragraph,  the  excess  of the  amount  of the
accumulated  payroll  deductions over the aggregate purchase price of the shares
actually purchased shall be promptly refunded to the participant by the Company,
without interest.

Article 6 - Exercise of Option.

         Subject to the  limitations  in Article 16, each eligible  employee who
continues to be a  participant  in the Plan on the last day of a Payment  Period
shall be deemed to have  exercised  his or her  option on such date and shall be
deemed to have  purchased  from the Company such number of full shares of Common
Stock  reserved  for the  purpose of the Plan as the  participant's  accumulated
payroll deductions on such date will pay for at the Option Price, subject to the
Section 423(b)(8)  limitation described in Article 5. In no event may any option
be  exercisable  later  than 27  months  after  the  date of its  grant.  If the
individual is not a participant on the last day of a Payment Period,  then he or
she shall not be  entitled to  exercise  his or her option.  Only full shares of
Common  Stock  may be  purchased  under  the  Plan.  Unused  payroll  deductions
remaining in a participant's account at the end of a Payment Period by reason of
the  inability  to purchase a fractional  share shall be carried  forward to the
next Payment Period.

Article 7 - Authorization for Entering the Plan.

         An  employee  may elect to enter the Plan by filling  out,  signing and
delivering to the Company an authorization:

         A.  Stating the percentage to be deducted regularly from the employee's
 pay;
         B.  Authorizing the  purchase of stock for the employee in each Payment
Period in  accordance  with the terms of the Plan; and
         C.  Specifying the exact name or names in which stock purchased for the
employee is to be issued as provided under Article 11 hereof.

Such  authorization  must be received by the Company at least ten business  days
before the first day of the next succeeding Payment Period and shall take effect
only if the employee is an eligible  employee on the first  business day of such
Payment Period.

         Unless a participant  files a new  authorization  or withdraws from the
Plan, the deductions and purchases under the  authorization  the participant has
on file  under the Plan will  continue  from one  Payment  Period to  succeeding
Payment Periods as long as the Plan remains in effect.

         The Company will accumulate and hold for each participant's account the
amounts deducted from his or her pay. No interest will be paid on these amounts.

Article 8 - Maximum Amount of Payroll Deductions.

         An employee may authorize payroll deductions in an amount (expressed as
a whole percentage) not less than one percent (1%) but not more than ten percent
(10%) of the employee's total compensation, including base pay or salary and any
overtime, bonuses or commissions.

Article 9 - Change in Payroll Deductions.

         Deductions may not be increased or decreased  during a Payment  Period.
However, a participant may withdraw in full from the Plan.

Article 10 - Withdrawal from the Plan.

         An employee  may  withdraw  from the Plan (in whole but not in part) at
any time prior to the last day of a Payment  Period by  delivering  a withdrawal
notice to the Company, in which case the Company will promptly refund the entire
balance of the employee's deductions not previously used to purchase stock under
the Plan.

         To re-enter the Plan,  an employee who has  previously  withdrawn  must
file a new  authorization at least ten business days before the first day of the
next Payment  Period in which he or she wishes to  participate.  The  employee's
re-entry  into the Plan  becomes  effective  at the  beginning  of such  Payment
Period,  provided that he or she is an eligible  employee on the first  business
day of the Payment Period.

Article 11 - Issuance of Stock.

         Certificates  for stock  issued to  participants  shall be delivered as
soon as practicable  after each Payment Period by the Company's  transfer agent,
except as provided in Section 16.

         Stock  purchased under the Plan shall be issued only in the name of the
participant,  or if the participant's authorization so specifies, in the name of
the  participant and another person of legal age as joint tenants with rights of
survivorship.

Article 12 - Adjustments.

         Upon  the  happening  of any  of  the  following  described  events,  a
participant's  rights under options  granted under the Plan shall be adjusted as
hereinafter provided:

         A. In the event that the shares of Common Stock shall be  subdivided or
combined  into  a  greater  or  smaller   number  of  shares,   or  if,  upon  a
reorganization,  split-up,  liquidation,  recapitalization  or the  like  of the
Company,  the shares of Common Stock shall be exchanged for other  securities of
the  Company,  each  participant  shall be entitled,  subject to the  conditions
herein  stated,  to purchase  such number of shares of Common Stock or amount of
other securities of the Company as were exchangeable for the number of shares of
Common Stock that such  participant  would have been entitled to purchase except
for such action,  and appropriate  adjustments shall be made in the Option Price
per share to reflect such subdivision, combination or exchange; and

         B. In the event the  Company  shall  issue any of its shares as a stock
dividend upon or with respect to the shares of stock of the class which shall at
the time be subject to option  hereunder,  each participant upon exercising such
an option shall be entitled to receive  (for the  purchase  price paid upon such
exercise) the shares as to which the participant is exercising his or her option
and, in addition thereto (at no additional  cost),  such number of shares of the
class or classes in which such stock  dividend  or  dividends  were  declared or
paid, and such amount of cash in lieu of fractional  shares,  as is equal to the
number of shares  thereof and the amount of cash in lieu of  fractional  shares,
respectively,  which the participant  would have received if the participant had
been the holder of the shares as to which the  participant  is exercising his or
her option at all times  between the date of the granting of such option and the
date of its exercise.

         Upon the  happening  of any of the  foregoing  events,  the  class  and
aggregate  number of shares set forth in Article 4 hereof  which are  subject to
options  which have been or may be granted  under the Plan and the Option  Price
shall  also be  appropriately  adjusted  to  reflect  the  events  specified  in
paragraphs A. and B. above.  Notwithstanding the foregoing, any adjustments made
pursuant to paragraphs A. or B. shall be made only after the Committee, based on
advice of counsel for the Company,  determines  whether such  adjustments  would
constitute  a  "modification"  (as that term is defined  in  Section  424 of the
Code). If the Committee  determines  that such  adjustments  would  constitute a
modification, it may refrain from making such adjustments.

         If the Company is to be consolidated with or acquired by another entity
in a  merger,  a sale of all or  substantially  all of the  Company's  assets or
otherwise  (an  "Acquisition"),  the  Committee or the board of directors of any
entity assuming the obligations of the Company hereunder (the "Successor Board")
shall,  with respect to options then outstanding under the Plan, either (i) make
appropriate  provision for the continuation of such options by arranging for the
substitution  on an equitable  basis for the shares then subject to such options
either (a) the consideration  payable with respect to the outstanding  shares of
the Common Stock in connection with the Acquisition,  (b) shares of stock of the
successor  corporation,  or a parent or subsidiary of such  corporation,  or (c)
such other securities as the Successor Board deems appropriate,  the fair market
value of which shall not  materially  exceed the fair market value of the shares
of Common Stock subject to such options  immediately  preceding the Acquisition;
or (ii)  terminate  each  participant's  options in exchange  for a cash payment
equal to the excess of (a) the fair market value on the date of the Acquisition,
of the  number  of shares of Common  Stock  that the  participant's  accumulated
payroll  deductions  as of the date of the  Acquisition  could  purchase,  at an
option price  determined  with  reference  only to the first business day of the
applicable  Payment  Period  and  subject  to the  Code  Section  423(b)(8)  and
fractional-share  limitations  on the  amount  of stock a  participant  would be
entitled to purchase,  over (b) the result of multiplying  such number of shares
by such option price.

         The Committee or Successor  Board shall determine the adjustments to be
made under this Article 12, and its determination shall be conclusive.

Article 13 - No Transfer or Assignment of Employee's Rights.

         An employee's  rights under the Plan are the  employee's  alone and may
not be transferred or assigned to, or availed of by, any other person other than
by will or the laws of descent and  distribution.  Any option  granted under the
Plan to an employee may be exercised,  during the employee's  lifetime,  only by
the employee.

Article 14 - Termination of Employee's Rights.

         Whenever a  participant  ceases to be an eligible  employee  because of
retirement,   voluntary  or  involuntary   termination,   resignation,   layoff,
discharge, death or for any other reason, his or her rights under the Plan shall
immediately terminate,  and the Company shall promptly refund, without interest,
the  entire  balance of his or her  payroll  deduction  account  under the Plan.
Notwithstanding   the  foregoing,   eligible  employment  shall  be  treated  as
continuing  intact while a participant is on military leave, sick leave or other
bona  fide  leave  of  absence,  for  up to 90  days,  or  for  so  long  as the
participant's  right to  re-employment  is  guaranteed  either by  statute or by
contract, if longer than 90 days.

         If a  participant's  payroll  deductions  are  interrupted by any legal
process, a withdrawal notice will be considered as having been received from the
participant on the day the interruption occurs.

Article 15 - Termination and Amendments to Plan.

         Unless terminated sooner as provided below, the Plan shall terminate on
September  30, 2008.  The Plan may be  terminated  at any time by the  Company's
Board  of  Directors  but  such  termination   shall  not  affect  options  then
outstanding  under  the  Plan.  It  will  terminate  in  any  case  when  all or
substantially  all of the unissued  shares of stock reserved for the purposes of
the Plan have been  purchased.  If at any time shares of stock  reserved for the
purpose of the Plan remain  available for purchase but not in sufficient  number
to satisfy all then unfilled purchase  requirements,  the available shares shall
be  apportioned  among  participants  in  proportion  to the  amount of  payroll
deductions  accumulated on behalf of each  participant  that would  otherwise be
used to purchase stock, and the Plan shall  terminate.  Upon such termination or
any other  termination of the Plan, all payroll  deductions not used to purchase
stock will be refunded, without interest.

         The  Committee  or the Board of  Directors  may from time to time adopt
amendments to the Plan provided that,  without the approval of the  stockholders
of the Company,  no amendment may (i)  materially  increase the number of shares
that may be issued under the Plan;  (ii) change the class of employees  eligible
to  receive  options  under the Plan,  if such  action  would be  treated as the
adoption  of a new plan for  purposes  of Section  423(b) of the Code;  or (iii)
cause the provisions of Section 16(b) of the Securities  Exchange Act of 1934 to
become inapplicable to the Plan.

Article 16 - Restrictions on the Exercise of Options.

         The other provisions of this Plan notwithstanding:

         A. This Plan shall terminate if the  stockholders of the Company do not
approve  it within  12 months  after  its  adoption  by the Board of  Directors.
Certificates  representing  shares  issuable upon the exercise of options before
stockholder  approval  will be retained by the  Company  until the  stockholders
approve the Plan. If the  stockholders  do not approve the Plan the Company will
issue no shares  under the Plan,  and it will return to the  participants  their
accumulated payroll deductions.

         B. The Committee, in its sole discretion, may require as a condition to
the  exercise of options  that the  underlying  shares be  registered  under the
Securities  Act of 1933,  as  amended,  and that all  other  legal  requirements
necessary,  or  in  the  Committee's  opinion,   desirable  from  the  Company's
standpoint, to the exercise of the options be satisfied or waived.

Article 17 - Participating Subsidiaries.

         The term  "participating  subsidiary"  shall mean any present or future
subsidiary  of the  Company,  as that term is defined  in Section  424(f) of the
Code,  which  is  designated  from  time to time by the  Board of  Directors  to
participate  in the Plan.  The Board of  Directors  shall have the power to make
such designation before or after the Plan is approved by the stockholders.

Article 18 - Optionees Not Stockholders.

         Neither the  granting of an option to an  employee  nor the  deductions
from his or her pay shall  constitute  such employee a stockholder of the shares
covered by an option  until such  shares  have been  actually  purchased  by the
employee.

Article 19 - Application of Funds.

         The  proceeds  received  by the Company  from the sale of Common  Stock
pursuant to options  granted  under the Plan will be used for general  corporate
purposes.

Article 20 - Notice to Company of Disqualifying Disposition.

         By electing to  participate  in the Plan,  each  participant  agrees to
notify the Company in writing immediately after the participant transfers Common
Stock  acquired  under the Plan, if such transfer  occurs within two years after
the first  business  day of the Payment  Period in which such  Common  Stock was
acquired.  Each participant further agrees to provide any information about such
a transfer as may be requested by the Company or any  subsidiary  corporation in
order to assist it in complying with the tax laws. Such  dispositions  generally
are treated as  "disqualifying  dispositions"  under Sections 421 and 424 of the
Code, which have certain tax consequences to participants and to the Company and
its participating subsidiaries.

Article 21 - Withholding of Additional Income Taxes.

         By electing to participate in the Plan, each  participant  acknowledges
that the Company and its  participating  subsidiaries  are  required to withhold
taxes with respect to the amounts deducted from the  participant's  compensation
and  accumulated  for the benefit of the  participant  under the Plan,  and each
participant  agrees  that the  Company and its  participating  subsidiaries  may
deduct additional amounts from the participant's compensation,  when amounts are
added to the participant's  account,  used to purchase Common Stock or refunded,
in order to satisfy  such  withholding  obligations.  Each  participant  further
acknowledges  that when Common Stock is purchased under the Plan the Company and
its participating subsidiaries may be required to withhold taxes with respect to
all or a portion of the  difference  between the fair market value of the Common
Stock purchased and its purchase price,  and each  participant  agrees that such
taxes may be withheld from  compensation  otherwise payable to such participant.
It is intended that tax  withholding  will be accomplished in such a manner that
the full amount of payroll deductions elected by the participant under Article 7
will be used to purchase Common Stock. However, if amounts sufficient to satisfy
applicable tax withholding  obligations have not been withheld from compensation
otherwise payable to any participant,  then, notwithstanding any other provision
of the  Plan,  the  Company  may  withhold  such  taxes  from the  participant's
accumulated  payroll  deductions  and apply the net  amount to the  purchase  of
Common Stock, unless the participant pays to the Company,  prior to the exercise
date,  an amount  sufficient  to  satisfy  such  withholding  obligations.  Each
participant  further   acknowledges  that  the  Company  and  its  participating
subsidiaries   may  be  required  to  withhold  taxes  in  connection  with  the
disposition  of stock acquired under the Plan and agrees that the Company or any
participating  subsidiary may take whatever  action it considers  appropriate to
satisfy such withholding  requirements,  including  deducting from  compensation
otherwise  payable to such  participant  an amount  sufficient  to satisfy  such
withholding  requirements or conditioning any disposition of Common Stock by the
participant  upon the  payment to the  Company or such  subsidiary  of an amount
sufficient to satisfy such withholding requirements.

Article 22 - Governmental Regulations.

         The  Company's  obligation  to sell and deliver  shares of Common Stock
under the Plan is subject to the approval of any governmental authority required
in connection with the authorization, issuance or sale of such shares.

         Government regulations may impose reporting or other obligations on the
Company  with respect to the Plan.  For example,  the Company may be required to
identify  shares of Common Stock  issued  under the Plan on its stock  ownership
records and send tax  information  statements to employees and former  employees
who transfer title to such shares.

Article 23 - No Special Employment Rights.

         The Plan does not,  directly or indirectly,  create in any employee any
right with respect to  continuation  of employment by the Company,  and it shall
not be deemed to interfere in any way with the Company's right to terminate,  or
otherwise modify, an employee's employment at any time.

Article 24 - Participant Assumes Investment Risk.

         By   purchasing   stock   through   participation   in  this  Plan  the
participating  employees  assume  the  complete  risk  of an  investment  in the
Company's common stock,  including the risk of price  fluctuations in the market
for the common stock.  The Company can give no assurance  that the  participants
will be able to resell shares purchased through this Plan for the price they pay
for them under this Plan, or at all.

Article 25 - Governing Law.

         The validity and construction of the Plan shall be governed by the laws
of the State of Delaware,  without  giving effect to the principles of conflicts
of law thereof.

Article 26 - Approval of Board of Directors and Stockholders of the Company.

         The Plan was adopted by the Board of Directors on July 24, 1998.