Stock Option Agreement - Green Mountain Coffee Inc. and James K. Prevo
GREEN MOUNTAIN COFFEE, INC.
STOCK OPTION AGREEMENT
UNDER 1993 STOCK OPTION PLAN
INCENTIVE STOCK OPTION
As of July 31, 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 to 50% of the Shares covered by the
Option on July 31, 1998 and as to the remaining 50% on July 31, 1999.
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; provided, however, no such
agreement may be made by an Optionee who is an officer or director within
the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, except pursuant to a standing election to so withhold Shares
purchased upon exercise of an Option, such election to be made in the form
set forth in Exhibit 2 hereto and to be made not less than six (6) months
prior to the date of such exercise. such election may be revoked by the
Optionee only upon six (6) months prior written notice to the Company.
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/ Robert P. Stiller
________________________
Robert P. Stiller
By: /s/ James K. Prevo
________________________
James K. Prevo
7 Hillside Drive
Williston, Vermont 05495
________________________
Address
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Social Security Number
6,000
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Number of Shares:
$9.625
________________________
Purchase Price Per Share
July 31, 2007
________________________
Expiration Date
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
Gentlemen:
In connection with the exercise by me as to 6,000 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 July 31, 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,
/s/ James K. Prevo
------------------
James K. Prevo
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), the Company shall withhold from the shares issuable upon
such exercise such number of shares as is equal in value to the federal and
state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months prior written notice to the Company.
OPTIONEE:
____________________________
Signature
Name: James K. Prevo
______________________
Printed
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Social Security Number