SCHEDULE 14A INFORMATION
Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-I l(c) or 240.14a-12
GREEN MOUNTAIN COFFEE, INC.
(Name of Registrant as Specified In Its Charter)
N/A
_____________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-1 1.
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-1 1 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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the Form or Schedule and the date of its filing.
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<PAGE>
GREEN MOUNTAIN COFFEE, INC.
____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on
Friday, March 20, 1998
____________________
To Our Stockholders:
The Annual Meeting of Stockholders of Green Mountain Coffee, Inc., a
Delaware corporation (the "Company"), will be held on Company premises at the
Pilgrim Industrial Park, Waterbury, Vermont (directions enclosed) on March 20,
1998 at 3:00 p.m. to:
1. elect eight directors; and
2. transact such other business as may properly be brought before the
Annual Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on January 30, 1998
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting. A complete list of those stockholders will
be open to examination by any stockholder, for any purpose germane to the
Meeting, during ordinary business hours at the executive offices of the Company
for a period of 10 days before the Meeting.
All stockholders are cordially invited to attend the Meeting.
Sincerely,
/s/ Robert D. Britt
-------------------
Robert D. Britt
Secretary
Waterbury, Vermont
February 10, 1998
All stockholders are urged to attend the Meeting in person or by proxy.
Whether or not you expect to be present at the Meeting, please mark, sign and
return the enclosed proxy card and return it promptly in the enclosed
postage-paid envelope.
<PAGE>
GREEN MOUNTAIN COFFEE, INC.
33 Coffee Lane
Waterbury, Vermont 05676
Proxy Statement
Introduction
The accompanying proxy is solicited by the Board of Directors (the "Board")
of Green Mountain Coffee, Inc., a Delaware corporation (the "Company") for use
at the Annual Meeting of Stockholders of the Company (the "Annual Meeting"). The
Annual Meeting will be held on Friday, March 20, 1998 at 3:00 p.m.on Company
premises at the Pilgrim Industrial Park, Waterbury, Vermont. This Proxy
Statement and the enclosed form of proxy are first being mailed to stockholders
of record on or about February 10, 1998.
The Company is a Delaware holding company whose only asset is the stock of
Green Mountain Coffee Roasters, Inc., a Vermont corporation ("Roasters"). As
used in this proxy statement, unless the context otherwise requires, references
to the "Company" or "Green Mountain" include the Company, Roasters and Roasters'
inactive subsidiary, Green Mountain Coffee Roasters Franchising Corporation, a
Delaware corporation.
Voting
To vote by proxy, please mark, sign and date the enclosed proxy card and
return it in the postage-paid envelope provided.
As of the close of business on January 30, 1998, the record date for
determining stockholders entitled to notice of and to vote at the Annual
Meeting, 3,530,818 shares of the Company's common stock, par value $0.10 per
share, were outstanding. The presence in person or by proxy of a majority of the
total number of outstanding shares entitled to vote at the Annual Meeting is
necessary to constitute a quorum.
Each stockholder is entitled to one vote for each share of common stock
held as of the record date. Stockholders may not cumulate votes for the election
of directors. Directors are elected by plurality vote. If shares are not voted
by the broker who is the record holder of the shares, or if shares are not voted
in other circumstances in which proxy authority is defective or has been
withheld with respect to any matter, these non-voted shares are not deemed to be
present or represented for purposes of determining whether stockholder approval
of that matter has been obtained, but are counted for quorum purposes.
Solicitation and Revocation of Proxies.
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted FOR the election of
the eight directors proposed by the Board. In addition, shares represented by
your proxy will be voted in the discretion of the Board on any matters that may
properly come before the Annual Meeting and any adjournments. Your proxy will
only be used at the Annual Meeting and any adjournments.
Once you execute and return your proxy to the Board, you may revoke or
change it at any time before it is voted at the Annual Meeting by: (i)
delivering a written notice of revocation to the Secretary of the Company at 33,
Coffee Lane, Waterbury, Vermont 05676; (ii) delivering another signed proxy to
the Secretary; or (iii) attending the Annual Meeting and voting in person.
The Company will bear the entire cost of soliciting the proxies. In
addition to solicitation by mail, the directors, officers and other employees of
the Company may solicit proxies in person, by telephone or by other means
without additional compensation. The Company does not presently intend to retain
professional proxy solicitation assistance or to solicit proxies otherwise than
as described.
Proposals of Stockholders.
Proposals of stockholders intended to be included in the Company's proxy
materials for presentation at the 1999 Annual Meeting of Stockholders must be
received by the Secretary of the Company at 33 Coffee Lane, Waterbury, Vermont
05676 by October 13, 1998.
<PAGE>
PROPOSAL
Election of Directors
At the Annual Meeting, eight directors will be elected to serve until the
next Annual Meeting of Stockholders or until their successors are elected and
qualified. Management recommends that you vote FOR each of the nominees below.
The Board knows of no reason why any nominee might be unable or unwilling to
serve.
The Board is pleased to nominate Ms. Debra J. Kelly-Ennis to serve on the
Board. She will replace Mr. Ian W. Murray, who has resigned from the Board,
effective with the election of his successor at the Annual Meeting. Mr. Murray
had served on the Board since 1993. The Board thanks him for his years of
dedicated service to the Company. The remaining seven nominees are current
members of the Board.
The following sets forth the names and ages of the eight nominees for
election to the Board of Directors of the Company and their respective positions
with the Company.
<TABLE>
Year
First
Name Age Elected Positions with the Company
------------------------- --- ------- --------------------------------------
<S> <C> <C> <C>
Robert P. Stiller 54 1993 Chairman of Board of Directors,
President and Chief Executive Officer
------------------------- --- ------- --------------------------------------
Robert D. Britt 42 1993 Chief Financial Officer, Vice President,
Treasurer, Secretary and Director
------------------------- --- ------- --------------------------------------
Stephen J. Sabol 36 1993 Vice President and Director
------------------------- --- ------- --------------------------------------
Jonathan C. Wettstein 49 1994 Vice President and Director
------------------------- --- ------- --------------------------------------
William D. Davis (1)(2) 48 1993 Director
------------------------- --- ------- --------------------------------------
Jules A. del Vecchio(1)(2) 54 1993 Director
------------------------- --- ------- --------------------------------------
Debra J. Kelly-Ennis 41 - Director nominee
------------------------- --- ------- --------------------------------------
David E. Moran (2) 44 1995 Director
------------------------- --- ------- --------------------------------------
<FN>
(1) Member of Audit Committee of Board of Directors.
(2) Member of Compensation Committee of the Board of Directors.
</FN>
</TABLE>
Certain biographical information regarding each director of the Company is set
forth below:
Robert P. Stiller, founder of Roasters, has served as its President and a
director since its inception in July 1981. In September 1971, Mr. Stiller
co-founded Robert Burton Associates, a company engaged in the development and
sale of E-Z Wider cigarette papers and served as its President and director
until June 1980. Jules A. del Vecchio, a director of the Company, is married to
the sister of Mr. Stiller's wife.
Robert D. Britt has served as Chief Financial Officer of Roasters since May
1993. From July 1992 to April 1993, Mr. Britt served as Chief Financial Officer
for Engineered Coatings, Inc., a manufacturer engaged in the design and
application of high temperature metallic and ceramic coatings to metal parts.
Mr. Britt is a Certified Public Accountant and holds a Master of Business
Administration from the Wharton School at the University of Pennsylvania.
Stephen J. Sabol has served as Vice President of Sales of Roasters since
September 1996. Mr. Sabol served as Vice President of Branded Sales of Roasters
from August 1992 to September 1996. From September 1986 to August 1992, Mr.
Sabol was the General Manager of Roasters responsible for overall performance of
the wholesale division in Maine and New Hampshire.
Jonathan C. Wettstein has served as Vice President of Operations of Roasters
since April 1993. From June 1974 to April 1993, Mr. Wettstein was employed by
Digital Equipment Corporation in a variety of positions including Plant Manager,
Order Administration Manager, Marketing Manager, Business and Materials Manager
and Product Line Controller. Mr. Wettstein holds a Master of Business
Administration from the Harvard Business School.
William D. Davis is currently the Chief Executive Officer, President and Partner
at Waterbury Holdings of Vermont, a specialty foods holding company. Mr. Davis
also currently holds the position of Partner and CEO of affiliates of Waterbury
Holdings of Vermont including McKenzie LLC, All Season's Kitchen LLC, Franklin
County Cheese Corporation, Frank Hahn Incorporated and Rondele Foods LLC. From
January 1985 to October 1994, Mr. Davis was President and Chief Executive
Officer of Cabot Creamery Cooperative, Inc., a dairy food manufacturer.
Jules A. del Vecchio is currently a Vice President of New York Life Insurance
Company and is responsible for communications and agent management and training.
Mr. del Vecchio has been affiliated with New York Life Insurance Company since
1970. Mr. Stiller is married to the sister of Mr. del Vecchio's wife.
Debra J. Kelly-Ennis has been a Senior Vice President of Marketing of Gerber
Foods Company, a subsidiary of Sandoz Ltd., since 1995. From 1993 to 1995, Ms.
Kelly-Ennis was a Vice President of Marketing for the Alpo Pet Food division of
Grand Metropolitan Plc. Prior to that, from 1983 to 1993, Ms. Kelly-Ennis served
in a variety of positions at RJR/Nabisco, the last of such positions being Vice
President Broker Sales, Northeast Region. Ms Kelly-Ennis also serves as a
director of Pulte Corporation.
David E. Moran is currently a partner in the Cambridge Group, a management
consulting company focused on marketing. Before joining the Cambridge Group, he
was a partner at Marketing Corporation of America from July 1984 to June 1992.
Earlier in his career Mr. Moran spent ten years in brand management at General
Foods and International Playtex. While at General Foods, he was Brand Manager of
several of its Maxwell House coffee brands.
<PAGE>
General Information Concerning the Board of Directors and its Committees.
The Board of Directors of the Company met six times in the fiscal year
ended September 27, 1997. During that year each of the directors attended at
least 75% of the aggregate of all meetings of the Board and of all Committees of
which he was a member. The Company does not have a standing nominating
committee.
Audit Committee.
The Audit Committee reviews the engagement of the independent accountants
and their independence. It also reviews the audit and non-audit fees of the
independent accountants and the adequacy of the Company's internal control
procedures. In fiscal 1997, the Audit Committee was composed of Messrs. Davis,
del Vecchio and Murray. The Committee met two times during the fiscal year ended
September 27, 1997.
Compensation Committee.
The Board's standing Compensation Committee, composed of non-employee
directors, establishes, implements and monitors the strategy, policies and plans
of the Company and its subsidiaries for the compensation of all executive
officers of the Company and its subsidiaries. Its duties include reviewing and
determining the compensation of the executive officers of the Company and its
subsidiaries, including setting any Company, subsidiary or business unit
performance goals, and administering the Company's stock option and stock
purchase plans. Directors Davis, del Vecchio, Moran and Murray constituted this
Committee in fiscal 1997. The Committee met four times during the fiscal year
ended September 27, 1997.
The Board of Directors of the Company recommends a vote FOR the election of
each of the eight nominees to the Board of Directors under this Proposal.
Principal Stockholders.
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock as of December 10, 1997 for (1) each of
the Company's directors and nominees, (2) all directors and executive officers
of the Company as a group, (3) each Named Executive Officer and (4) each person
known by the Company to own beneficially 5% or more of the outstanding shares of
its common stock:
<TABLE>
Number of Shares of Percent Ownership
Name and Address of Common Stock of Common Stock
Beneficial Owner Beneficially Owned Outstanding
----------------------------------- -------------------- ---------------
<S> <C> <C>
Robert P. Stiller
c/o Green Mountain Coffee, Inc. 1,951,086 55.3%
33 Coffee Lane
Waterbury, Vermont 05676
----------------------------------- -------------------- ---------------
Robert D. Britt (2)
c/o Green Mountain Coffee, Inc. 50,881 1.4%
33 Coffee Lane
Waterbury, Vermont 05676
----------------------------------- -------------------- ----------------
Stephen J. Sabol (3)
c/o Green Mountain Coffee, Inc. 20,183 0.6%
33 Coffee Lane
Waterbury, Vermont 05676
----------------------------------- ------- ------------ ----------------
Jonathan C. Wettstein (4)
c/o Green Mountain Coffee, Inc. 53,667 1.5%
33 Coffee Lane
Waterbury, Vermont 05676
----------------------------------- -------------------- ----------------
Paul Comey (5)
c/o Green Mountain Coffee, Inc. 34,391 1.0%
33 Coffee Lane
Waterbury, Vermont 05676
----------------------------------- -------------------- ----------------
William D. Davis (6)
c/o Waterbury Speciality Food 7,950 0.2%
159 Bank Street
Burlington, Vermont 05402
----------------------------------- -------------------- ----------------
Jules A. del Vecchio(6)(7)
c/o New York Life Insurance Co. 27,324 0.8%
51 Madison Avenue
New York, New York 10010
----------------------------------- -------------------- ----------------
David E. Moran(8)
16 Tamarack Place 2,500 0.1%
Greenwich, CT 06831
----------------------------------- -------------------- ----------------
Debra J. Kelly-Ellis
770 Bradford Farms Lane NE - *
Grand Rapids, Michigan 49546
----------------------------------- -------------------- ----------------
Ian W. Murray (6)
P.O. Box 23618 3,750 0.1%
Hilton Head, SC 29925
----------------------------------- -------------------- ----------------
Hathaway & Associates
119 Rowayton Avenue 250,000 7.1%
Rowayton, Connecticut 06853
----------------------------------- -------------------- ----------------
All directors and executive
officers as a group (12 persons) 2,197,333 59.2%
(9)
----------------------------------- -------------------- ----------------
<FN>
(1) Includes an aggregate of 117,870 shares of common stock held by Trusts for
the benefit of Mr. Stiller's wife and children and excludes shares owned by
relatives of Mr. Stiller, if any, as to which Mr. Stiller disclaims beneficial
ownership.
(2) Includes 48,291 shares of common stock for Mr. Britt issuable upon exercise
of outstanding stock options exercisable within 60 days. Also includes 2,590
shares over which Mr. Britt shares voting and investment power with his wife.
(3) Includes 1,236 shares of common stock for Mr. Sabol issuable upon exercise
of stock options exercisable within 60 days.
(4) Includes 48,360 shares of common stock for Mr. Wettstein issuable upon
exercise of outstanding stock options exercisable within 60 days.
(5) Includes 24,717 shares of common stock for Mr. Comey issuable upon exercise
of outstanding stock options exercisable within 60 days.
(6) Includes for each person 3,750 shares of common stock issuable upon exercise
of outstanding stock options exercisable within 60 days.
(7) Includes 23,574 shares held of record by Phyllis Grennan Huffman, Mr. del
Vecchio's wife.
(8) Represents shares of common stock for Mr. Moran issuable upon the exercise
of stock options exercisable within 60 days.
(9) Includes an aggregate of 177,818 shares of common stock issuable upon
exercise of stock options held by certain officers of the Company that are
exercisable within the next 60 days.
* Less than 0.1%
</FN>
</TABLE>
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors and person who own more than 10% of the
Company's Common Stock to file reports of ownership and changes in ownership
with the Securities and Exchange Commission, and the NASDAQ. SEC rules require
reporting persons to supply the Company with copies of these reports.
Based solely on its review of the copies of such reports received and
written representations from reporting persons, the Company believes that with
respect to the fiscal year ended September 27, 1997, all reporting persons
timely filed the required reports.
Executive Compensation
Compensation Committee Report
Executive Compensation for FY 1997
The Compensation Committee of the Board of Directors is composed of outside
independent directors, none of whom is currently or was formerly an officer or
employee of the Company. It is responsible for establishing and monitoring the
compensation strategy, policies and plans for all executive officers of the
Company and determines their compensation packages.
The Compensation Committee's fiscal year 1997 policy was to compensate the
executive officers in ways that would: (1) encourage Company growth, (2)
maintain market-competitive compensation, and (3) reward superior performance by
the executive officers. The factors and criteria upon which the Committee
determined the fiscal year 1997 compensation of its executive officers were,
with the exception of market benchmarking, subjective in nature, such as its
perception of each executive officer's performance, experience, responsibilities
and skills. The Committee believes that this approach, rather than tying the
compensation of any of the executive officers to any specific quantitative
measures of performance by the Company, was in the best overall interest of the
Company.
The Compensation Committee was assisted in its review and evaluation of
executive compensation by compensation consultants. The Chief Executive Officer
recommended a fiscal year 1997 salary for each executive officer which reflected
a benchmark to market by the consultants. The Committee accepted the
recommendations.
The Committee established the salary for the Chief Executive Officer, which
it also benchmarked to market compensation rates with the help of the
consultants.
Submitted by the 1997 Compensation Committee,
William D. Davis
Jules A. del Vecchio
David E. Moran
Ian W. Murray
Compensation Committee Interlocks and Insider Participation.
No member of the Compensation Committee is a former or current officer or
employee of the Company or any of its subsidiaries, nor does any executive
officer of the Company serve as an officer, director or member of a compensation
committee of any entity one of whose executive officers or directors is a
director of the Company.
Performance Graph
The following graph compares the percentage change in the cumulative total
stockholder return on the Company's Common Stock during the period from the
Company's initial public offering on September 21, 1993 though September 27,
1997, with the cumulative total return for (i) the Nasdaq National Market Index
(U.S. Companies) and (ii) the Standard & Poor's Smallcap Non-Alcoholic Beverages
Index. The comparison assumes that $100 was invested on September 21, 1993 in
the Company's Common Stock at the closing "ask" price of $13.75 on the first day
of trading, and in each of the foregoing indices, assuming reinvestment of
dividends, if any. The comparison reflected in the graph and table is not
intended to forecast the future performance of the Company's Common Stock and
may not be indicative of such future performance.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
9/21/93 9/25/93 9/24/94 9/30/95 9/28/96 9/27/97
Green Mountain Coffee Roasters, Inc. $ 100 $ 98.18 $ 38.18 $ 43.64 $ 51.82 $ 76.36
NASDAQ - US Index $ 100 $102.93 $104.33 $145.42 $173.08 $236.90
S&P Smallcap Beverage Index $ 100 $104.58 $ 90.58 $114.89 $133.08 $205.74
</TABLE>
Summary Compensation Table
The following table sets forth the aggregate compensation, cash and
non-cash, awarded to, earned by or paid by the Company to its President and
Chief Executive Officer and to the four highest-paid executive officers whose
annual compensation (consisting solely of base salary and bonus, if any)
exceeded $100,000 for the year ended September 27, 1997 (the "Named Executive
Officers"):
<TABLE>
<S> <C> <C> <C> <C> <C>
Long Term Compensation--
Annual Other Securities
Name and Fiscal Compensation Compensation Underlying Stock
Principal Position Year Salary ($) Bonus ($) $(1) Options
- --------------------------------------- -------- -------------- ----------- ------------ -----------------
Robert P. Stiller 1995 189,000 - - -
Chairman of the Board of Directors, 1996 190,419 57,300 - -
President and Chief Executive Officer 1997 244,150 - - -
- --------------------------------------- -------- ------------ ---------- ------------ -----------------
Robert D. Britt 1995 108,800 - 2,000 1,524(2)
Chief Financial Officer, Vice President 1996 109,126 10,000 2,100 - (3)
Treasurer, Secretary and Director 1997 120,924 - 2,896 -
- --------------------------------------- -------- ------------ ----------- ------------ -----------------
Stephen J. Sabol 1995 122,500 - - 1,648(2)
Vice President of Sales and Director 1996 126,622 5,000 2,000 -
1997 130,013 - 1,949 -
- --------------------------------------- -------- ------------ ---------- ------------ -----------------
Jonathan C. Wettstein 1995 119,700 - - 1,616(2)
Vice President of Operations 1996 121,682 6,000 1,400 - (3)
and Director 1997 124,625 - 3,113 -
- --------------------------------------- -------- ------------ ---------- ------------ -----------------
Paul Comey 1995 104,200 - 1,800 1,524 (2)
Vice President of Facilities and 1996 109,340 5,000 2,700 - (3)
Process Engineering 1997 107,882 - 2,694 -
- --------------------------------------- -------- ------------ ---------- ------------ -----------------
<FN>
(1) Represents matching contributions to the Company's 401(k) Plan.
(2) Represents common stock shares issuable upon exercise of options granted
under the Company's 1993 Stock Option Plan
(3) The term of outstanding options to purchase 47,148 shares held by Mr. Britt,
47,148 shares held by Mr. Wettstein and 23,574 shares held by Mr. Comey were
extended in fiscal 1996 for an additional five years and now expire in 2003. The
exercise price of these options exceeded the fair market value of the common
stock at the date of the extension.
</FN>
</TABLE>
Employment Agreements
On March 26, 1993, Roasters entered into an employment agreement with
Robert D. Britt, its Chief Financial Officer, Vice President, Treasurer and
Secretary. The employment agreement provides that Mr. Britt will receive a
minimum base annual salary of $100,000, subject to certain annual cost of living
adjustments, performance based bonuses to be determined from time to time by the
Board of Directors and additional compensation up to a maximum of 200% of his
then base compensation payable over 24 months in the event of a sale of all or
substantially all of the stock or assets of the Company or a merger or
consolidation of the Company in which the Company is not the surviving entity or
any transaction or series of related transactions resulting in Mr. Stiller
owning less than 50% of the Company's issued and outstanding common stock. In
addition, Mr. Britt is entitled to a severance payment equal to 50% of his then
base compensation in the event that he is terminated for any reason other than
(i) for cause or (ii) his voluntary resignation. The employment agreement may be
terminated at any time by Roasters or Mr. Britt.
On July 1, 1993, Roasters entered into an employment agreement with Stephen
J. Sabol, its Vice President of Sales. The employment agreement provides that
Mr. Sabol will receive a minimum base annual salary of $120,000 and performance
based bonuses to be determined from time to time by the Board of Directors. The
employment agreement may be terminated at any time by Roasters or Mr. Sabol.
On July 1, 1993, Roasters entered into an employment agreement with
Jonathan C. Wettstein, its Vice President and Plant Manager. The employment
agreement provides that Mr. Wettstein will receive a minimum base annual salary
of $115,000, performance based bonuses to be determined from time to time by the
Board of Directors and additional compensation up to a maximum of 100% of his
then base compensation in the event of a sale of all or substantially all of the
stock or assets of the Company or a merger or consolidation of the Company in
which the Company is not the surviving entity. In addition, Mr. Wettstein is
entitled to a severance payment consisting of 50% of his then base compensation
in the event that he is terminated for any reason other than (i) for cause or
(ii) his voluntary resignation. The employment agreement may be terminated at
any time by Roasters or Mr. Wettstein.
On July 1, 1993, Roasters entered into an employment agreement with Paul
Comey, its Vice President of Facilities and Process Engineering. The employment
agreement provides that Mr. Comey will receive a minimum base annual salary of $
100,000 and performance-based bonuses to be determined from time to time by the
Board of Directors. The employment agreement may be terminated at any time by
Roasters or Mr. Comey.
Each of the above employment agreements also provides that the officer
shall not (i) disclose or use any confidential information of the Company during
or after the term of his agreement, (ii) compete with the Company or any of its
affiliates during the term of his agreement, or in certain circumstances, for a
period of six months thereafter or (iii) recruit any employee of the Company for
employment in any other business competitive with the Company for a period of
one year after the termination of his agreement.
Aggregated Options Exercises
The following table sets forth information (on an aggregated basis)
concerning each exercise of stock options during the fiscal year ended September
27, 1997 by each of the Named Executive Officers and the final year-end value of
unexercised options.
AGGREGATED OPTION EXERCISES
IN THE FISCAL YEAR ENDED SEPTEMBER 27, 1997
FISCAL YEAR END OPTION VALUES
<TABLE>
Value of Unexercised
Number of Unexercised "In-the-Money" Options
Options at Fiscal Year-End at Fiscal Year-End(2)
Shares Acquired Value -------------------------- ----------------------------
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
- ---------------------- -------------- -------------- ----------- ------------- ----------- -------------
Robert P. Stiller - - - - - -
- ---------------------- -------------- -------------- ------------ ------------- ----------- -------------
Robert D. Britt - - 47,910 762 $ 118,451 $ 1,524
- ---------------------- -------------- -------------- ------------ ------------- ----------- -------------
Stephen J. Sabol 47,148 $ 267,528 824 824 $ 1,648 $ 1,648
- ---------------------- -------------- -------------- ------------ ------------- ----------- -------------
Jonathan C. Wettstein - - 47,956 808 $ 118,543 $ 1,616
- ---------------------- -------------- -------------- ------------ ------------- ----------- -------------
Paul Comey 23,574 $ 159,001 24,336 762 $ 59,988 $ 1,524
- ---------------------- -------------- -------------- ------------ ------------- ----------- -------------
<FN>
(1) Represents excess of the closing sales price on the date of exercise (or, in
the case of the simultaneous sale of shares received upon exercise, the actual
sales price) over the exercise price. Mr. Sabol and Mr. Comey exercised opions
during the 1997 fiscal year which were scheduled to expire on August 31, 1997.
(2) Options are "in-the-money" at the fiscal year-end if the fair market value
of the underlying securities on such date exceeds the exercise or base price of
the option. The amounts set forth represent the difference between the closing
price of the securities underlying the option on September 27, 1997, which was
$10.50 per share, and the exercise price of the applicable options, multiplied
by the applicable number of options.
</FN>
</TABLE>
<PAGE>
Board of Directors Compensation.
Officers are elected annually and serve at the discretion of the Board of
Directors. Directors are elected annually by the Company's stockholders. Each
director (other than those who are also officers of the Company) is paid a
retainer and is reimbursed for ordinary and necessary travel expenses incurred
in connection with attendance at each Board meeting. The annual retainer in
fiscal 1997 was $8,000. In addition, Mr. Murray was paid $1,500 and Mr. Moran,
Mr. del Vecchio and Mr. Davis received $750 each for additional services in
fiscal 1997.
The Company has granted five-year, non-statutory options to purchase 5,000
shares of common stock to each non-employee director under the Company's 1993
Stock Option Plan. Messrs. Davis, del Vecchio and Murray's options were granted
in fiscal 1994 at an exercise price of $6.00 per share and vest ratably over a
four-year period from the date of grant. Mr. Moran's options were granted in
fiscal 1996 at an option price of $6.25 per share and vest ratably over a
four-year period from the date of grant.
Certain Transactions
Mr. Stiller has guaranteed the repayment of the indebtedness incurred by
the Company to the Central Vermont Economic Development Corporation. See Note 7
of "Notes to Consolidated Financial Statements" in the accompanying Annual
Report to Stockholders for a description of the terms of such indebtedness.
Any future transactions between the Company and its officers, directors,
principal stockholders or other affiliates will be on terms no less favorable to
the Company than could be obtained from unaffiliated third parties on an
arms-length basis and will be approved by a majority of the Company's
independent and disinterested directors. Any loans to officers, directors,
principal stockholders or affiliates of any of them will be on terms no less
favorable than could be obtained from unaffiliated third parties and will be
approved by a majority of the Company's independent and disinterested directors,
upon their conclusion that it may reasonably be expected to benefit the Company.
Other Business
The Board of Directors is not aware of any matters not set forth herein
that may come before the Annual Meeting. However, if other matters are properly
brought before the Annual Meeting, it is intended that the persons named in the
accompanying proxy will vote as the Board of Directors directs.
Independent Auditors
Price Waterhouse LLP served as the Company's independent accountants for
fiscal year 1997. The Company expects that a representative of Price Waterhouse
LLP will attend the Annual Meeting. This representative will have an opportunity
to make a statement, if he or she desires, and will be available to respond to
appropriate questions from stockholders.
The Corporation has not selected auditors for the current fiscal year. The
Board of Directors and its Audit Committee will make this decision later in the
year.
By order of the Board of Directors,
/s/ Robert D. Britt
-------------------
Robert D. Britt
Secretary
Dated: February 10, 1998
<PAGE>
GREEN MOUNTAIN COFFEE, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held March 20, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Robert P. Stiller and
Robert D. Britt, and each of them, as proxies with full power of substitution,
to represent and vote all of the shares which the undersigned is entitled to
vote at the Annual Meeting of Stockholders of Green Mountain Coffee, Inc. (the
"Company") to be held on the Company premises at Pilgrim Industrial Park,
Waterbury, Vermont (directions enclosed) on March 20, 1998 at 3:00 p.m. and at
any and all adjournments thereof. The undersigned hereby revokes any
proxies previously given.
1. PROPOSAL 1 - To elect eight directors.
Nominees: Robert P. Stiller, Robert D. Britt, Stephen J. Sabol, Jonathan C.
Wettstein, William D. Davis, Jules A. del Vecchio, Debra J. Kelly-Ennis and
David E. Moran.
[__] FOR all nominees.
[__] WITHHELD from all nominees.
[__] FOR, except vote withheld from the following nominees:
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2. In their discretion on any other business that may properly come before
the Meeting and any adjournments.
(Please sign on reverse.)
<PAGE>
This proxy will be voted as directed or, if no direction is given, will be
voted FOR the nominees under Proposal 1, and in the Board's discretion on all
other matters that may properly come before the Meeting. If this proxy is not
marked to withhold authority to vote for any nominee it will be voted FOR all
nominees.
If you receive more than one proxy card, please sign and return all cards
in the accompanying envelope. Please check your mailing address as it appears on
this card. If it is inaccurate please include your correct address below.
Dated: _______________________________, 1998
______________________________________
(Signature)
(Signature)
______________________________________
(Signature)
(Signature)
Note: Please sign exactly as your name or names appear on this card. Joint
owners should each sign personally. If signing as a fiduciary or attorney,
please give your name and exact title.
