Sample Business Contracts


Stock Option Agreement - Green Mountain Coffee Inc. and Paul Comey


                           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/ Robert P. Stiller                         /s/ Paul Comey   
         ______________________                        ________________________
         Robert P. Stiller                             Paul Comey
         President
                                                       10,000
                                                       ________________________
                                                       Number of Shares

                                                       $10.00  
                                                       ________________________
                                                       Purchase Price Per Share

                                                       October 21, 2007 
                                                       ________________________ 

<PAGE>

                                    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,


                                            Paul Comey




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