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Sample Business Contracts

Stock Option Agreement - Green Mountain Coffee Inc. and James K. Prevo

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                  AMENDED AND RESTATED STOCK OPTION AGREEMENT


         AMENDED AND RESTATED STOCK OPTION  AGREEMENT,  dated as of December 21,
1999 (the  "Agreement"),  by and  between  JAMES K.  PREVO,  and GREEN  MOUNTAIN
COFFEE,  INC.,  a Delaware  corporation  with its  principal  place of  business
located at 33 Coffee Lane, Waterbury, Vermont 05676 (the "Corporation").

         WHEREAS,  the parties hereto are parties to that Stock Option Agreement
effective  as of April 15,  1993,  as amended on July 21, 1993 and July 26, 1996
(the  "Original  Agreement"),  which  granted  options  to James K.  Prevo  (the
"Optionee") to acquire shares of the Corporation's  Common Stock, par value $.10
per share ("Common  Stock")  pursuant to certain terms and conditions  contained
therein.

         WHEREAS,  the parties  hereto  desire to amend and restate the Original
Agreement  as more  fully set forth  herein  such that the terms and  conditions
contained in this agreement shall supercede and replace the terms and conditions
set forth in the Original  Agreement as if this  Agreement had been the Original
Agreement on its effective date.

         NOW THEREFORE, in consideration of the mutual covenants and obligations
herein contained, the Corporation and the Optionee do hereby agree as follows:

         1. GRANT OF OPTION.  The Corporation  hereby grants to the Optionee the
right,  privilege,  and option to purchase (the "Option")  from the  Corporation
Eleven Thousand Seven Hundred Eighty-Seven  (11,787) shares of Common Stock (the
"Optioned  Shares"),  in the manner and subject to conditions  set forth in this
Agreement,  at Eight  Dollars  and Two Cents  ($8.02)  per share (the  "Exercise
Price").

         2. TERM OF OPTION.  The  Option,  to the extent  not  exercised,  shall
terminate on the earlier of (a) April 15, 2008,  which is the  fifteenth  (15th)
anniversary  of the initial  grant date of April 15, 1993 (the "Grant  Date") or
(b) the  date on  which  the  Optionee's  employment  with  the  Corporation  is
terminated for Cause. The term "Cause" as used herein shall mean and include any
of the following events:  fraud or dishonesty,  misappropriation or embezzlement
by the  Optionee  involving  the  Corporation  or any  subsidiary  or  affiliate
thereof; any violation of civil or criminal law; breach of confidentiality;  the
willful  engaging by the Optionee in conduct  which has or could  reasonably  be
expected  to have a material  adverse  effect on the  Corporation  or any of its
subsidiaries  or  affiliates;  or the  material  breach by the  Optionee  of any
representations,  warranties,  agreements  or covenants  made by the Optionee in
this Agreement or any other agreement between the Corporation and the Optionee.

         3. TIME OF  EXERCISE  OF OPTION.  The Option  may be  exercised  by the
Optionee (or, in the event of the  Optionee's  death,  by the  Optionee's  legal
representative  or heirs) as to the Optioned  Shares on or after the Grant Date,
prior to the termination date as determined in accordance with Section 2 hereof.

         4. METHOD OF  EXERCISE  OF OPTION.  The Option  shall be  exercised  by
written notice (the "Notice of Exercise") from the Optionee (or, in the event of
the Optionee's death, from the Optionee's legal  representative or heirs) to the
Corporation  designating  the number of Optioned  Shares to be purchased and the
desired  date of  purchase,  which shall be not less than ten (10) nor more than
thirty  (30)  days  thereafter,  accompanied  by cash or by  check,  subject  to
collection  and  payable  to the order of the  Corporation,  in  payment  of the
Exercise Price for the designated number of Optioned Shares.

         5.  DELIVERY  OF  SHARES.  Upon  receipt  by the  Corporation  from the
Optionee of a Notice of Exercise and payment in full of the  Exercise  Price for
the designated number of Optioned Shares, the Corporation shall deliver, as soon
as  administratively  feasible,  to the Optionee a certificate for such Optioned
Shares  issued  in the name of the  Optionee  (the  "Issued  Shares").  Any such
certificate shall bear conspicuously on its face the following legend:

         "The shares represented by this certificate are "restricted securities"
         as  defined  in and for  purposes  of Rule 144  promulgated  under  the
         Securities Act of 1933, as amended (the "Act") and in the absence of an
         effective  registration  statement,  these  shares  may  not  be  sold,
         transferred,  pledged,  or hypothecated  except in compliance with Rule
         144 or another exemption from registration pursuant to the Act. "

         6.  RIGHTS  PRIOR TO  EXERCISE  OF OPTION.  The Option may not be sold,
transferred,  assigned, pledged,  hypothecated,  or otherwise disposed of in any
way except upon the Optionee's death pursuant to the Optionee's will or the laws
of the State of Vermont regarding a testator's estate, a spouse's elective share
or other similar  provision (the recipient of any such permitted  transfer shall
be know as a "Permitted  Transferee").  The Optionee or any Permitted Transferee
shall have no rights as a shareholder  with respect to any Optioned Shares until
delivery,  in accordance with the provisions of Section 5 of this Agreement,  of
such Optioned Shares as Issued Shares. Any Permitted Transferee shall be subject
to the  Section  7 of this  Agreement  as if the  Permitted  Transferee  was the
Optionee.

         7. RESTRICTED  SHARES.  The Optionee  acknowledges  that (a) the Issued
Shares shall be  "restricted  securities" as defined in and for purposes of Rule
144 promulgated under the Securities Act of 1933, as amended (the "Act"), (b) in
the absence of an effective registration statement, the Issued Shares may not be
sold,  transferred,  pledged, or hypothecated except in compliance with Rule 144
or another  exemption from  registration  pursuant to the Act and (c) the Issued
Shares  will be  evidenced  by a  certificate  bearing  the  legend set forth in
Section 5 of this Agreement.

         8. NO PREEMPTIVE RIGHTS. The Optionee acknowledges that the acquisition
of any Optioned  Shares as Issued Shares under this Agreement does not confer on
the Optionee any preemptive right to purchase, subscribe to, or be first offered
any shares of any class of stock of the  Corporation,  presently or subsequently
authorized,  or  any  notes,  debentures,  bonds,  or  other  securities  of the
Corporation  convertible  into,  or carrying  options or  warrants to  purchase,
shares of any class of the stock of the  Corporation,  presently or subsequently
authorized.

         9.  ADJUSTMENTS.  In the event of any  combination  or  division of the
shares of Common  Stock of the  Corporation,  or the payment of any  dividend on
such stock in shares of such stock, or any  recapitalization in which such stock
is changed into a different security,  appropriate  adjustments shall be made to
the Optioned  Shares as necessary to allow the  provisions of this  Agreement to
operate as if such event(s) had not occurred.

         10. NOTICES.  All exercises of options,  offers,  acceptances, or other
notices  pursuant  to this  Agreement shall  be  made in  writing and  delivered
within the applicable  time period to the party  entitled to such  notice  under
this  Agreement.  Any  such notice  shall be effective  either when  tendered in
person to the party  entitled  to such notice;  or on the  third (3rd) day after
being deposited in the  United States  mail in a sealed envelope,  registered or
certified, with postage and postal charges prepaid,  addressed to the address of
such party as set forth above,  or at such other address as may be designated by
any  of the  parties  hereto by notice  to the  other  parties  and  if  to  the
 Corporation,  with a copy to H. Kenneth Merritt, Jr.,  Esq., Merritt & Merritt,
30 Main Street, Suite 330, P.O. Box 5839, Burlington, VT  05402.

         11. MISCELLANEOUS.

             11.1     ASSIGNMENT.  Except  as  otherwise  specifically  provided
herein, this Agreement may not be assigned by any of the parties hereto.

             11.2     BINDING EFFECT.  This  Agreement shall be binding upon the
parties  hereto   and   their   respective    heirs,    distributees,   personal
representatives, successors and assigns.

             11.3     AMENDMENTS.  No  modifications,  amendment, addition to or
termination of this  Agreement, nor waiver of  any  of its  provisions, shall be
valid or enforceable unless in writing and signed by all of the parties hereto.

             11.4     SEVERABILITY.  The  invalidity or  unenforceability of any
provisions hereof  shall in no way affect the  validity or enforceability of any
other provisions.

             11.5     ENTIRE  AGREEMENT.  This   Agreement  contains  the entire
agreement  between  the  parties  hereto  with  respect  to  the  subject matter
contained  herein  and  supersedes,  nullifies, voids and  renders of no further
force or effect all  prior agreements  between  the parties  hereto with respect
to the subject matter contained herein.

             11.6     WAIVER. Failure to insist upon strict  compliance with any
of the terms,  covenants, or conditions  hereof  shall not be deemed a waiver of
such term,  covenant or condition nor shall any waiver or  relinquishment of any
right or power  hereunder at any  one time or more  times be  deemed a waiver or
relinquishment of such right or power at any other time or times.

             11.7     COUNTERPARTS.  This  Agreement  may  be   executed  in any
number of  counterparts,  each of which shall be  deemed an original, and all of
which together shall be deemed one and the same instrument.

             11.8     TITLES.  The  titles of  all  Sections are for convenience
 only and  shall not  be  considered  in construing  the  provisions hereof.

             11.9     GOVERNING LAW.  This  Agreement  shall be  governed by and
construed in accordance with the laws of the State of Vermont.


<PAGE>


         IN  WITNESS  WHEREOF,  each of the  parties  hereto has  executed  this
Agreement for the purposes  contained  herein as of the year and day first above
written.

                                                    GREEN MOUNTAIN COFFEE, INC.


                                                    By:   /s/ Robert P. Stiller
                                                    ---------------------------
                                                    Robert P. Stiller, President


                                                    By:   /s/ James K. Prevo
                                                    ----------------------------
                                                    James K. Prevo