Stock Option Agreement - Green Mountain Coffee Inc. and Kevin McBride
GREEN MOUNTAIN COFFEE, INC.
STOCK OPTION AGREEMENT
UNDER 1999 STOCK OPTION PLAN
INCENTIVE STOCK OPTION
September 13, 1999
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").
The Company desires to grant, the Optionee an incentive stock option
under the Company's 1999 Stock Option Plan, as amended (the "Plan") to acquire
shares of the Company's Common Stock, par value $.10 per share (the "Shares").
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 incentive stock options
(collectively, 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 set forth at the end of this
Agreement.
3. Time of Exercise of Option.
This Option shall be first exercisable as to a third of the Shares on
each of the first three anniversary dates of this Agreement.
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.
4. Term of Options; Exercisability.
(a) Term.
(i) 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,
such 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
twenty five (25) 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/ Bob Stiller /s/ Kevin McBride
------------------- -----------------
Bob Stiller Kevin McBride
President
75,000
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Number of Shares
$7.625
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Purchase Price Per Share
September 13, 2009
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Expiration Date
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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 April 1, 1999 granted to me
under the 1999 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,
Optionee