Green Mountain Coffee (GMC) announced today [Tuesday] that its wholly-owned subsidiary, Green Mountain Coffee Roasters, has been granted options to acquire certain shares of Preferred and Common Stock of Keurig, Incorporated, a private Delaware corporation and the manufacturer of the Keurig® Premium Coffee System(TM).


The options have been granted from early, outside investors in Keurig. The exercise price for all shares subject to the options is US$6.50/share.


Under the terms of the options, Green Mountain has an irrevocable right to purchase a total of approximately 1.8 million shares of the outstanding capital stock of Keurig, prior to 8 April 2002. To date, Green Mountain has exercised options to acquire 281,356 shares of Preferred Stock of Keurig. Green Mountain intends to fund the purchase of additional shares it may acquire through the exercise of options primarily through an existing credit line with Fleet Bank.


Keurig has approximately 5.3 million issued shares of capital stock outstanding including 1.5 million newly issued shares. Assuming Green Mountain purchases all shares subject to the options granted by Keurig shareholders, Green Mountain would own approximately 34% of Keurig, which includes a small number of shares that Green Mountain purchased directly from Keurig several years ago.


Green Mountain was involved in supporting the early research, development and testing of the Keurig system starting in 1994. It was also the first of the current six companies to be licensed to package branded coffee in the patented Keurig K-Cup(TM), a single-serve coffee cartridge used in conjunction with the Keurig coffee brewer. Green Mountain has manufactured over 160 million K-Cups, and produced about 70% of the total K-Cups manufactured worldwide in 2001.


As Keurig’s oldest and most experienced K-Cup partner, Green Mountain has developed extensive knowledge and expertise relating to the manufacture and sale of Keurig K-Cups. Green Mountain continues to produce and distribute more K-Cups than the other five licensees combined. Green Mountain’s business relationship with Keurig has been an important growth driver for Green Mountain.


Robert Stiller, President and CEO of Green Mountain Coffee, said: “I am very optimistic about the long-term growth potential for Keurig. The Keurig system provides Green Mountain Coffee customers and consumers with an unparalleled opportunity to enjoy 18 Green Mountain Coffee selections in businesses and offices everywhere. Longer term, we see a tremendous opportunity to take the Keurig technology into the home market. We look forward to working even more closely with Keurig’s management and Board to realize Keurig’s full growth potential.”


Kevin McBride, Vice President, Sales and Marketing, added, “OCS distributors have been tremendously valuable partners in taking the Keurig brewer and Green Mountain K-Cups to offices across America. Working with them, we believe our enhanced ownership position will give all of us greater motivation to increase the number of Keurig brewer placements and sell more Green Mountain K-Cups.”


GMC, a leader in the specialty coffee industry, drives the majority of its revenue from its wholesale operation that serves supermarkets, convenience stores, offices, and other locations where fine coffees are sold. Green Mountain Coffee also operates a direct mail business and an e-commerce website.