10-Q

FORM 10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the twelve weeks ended April 13, 2002

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from __________ to ____________

Commission file number 1-12340

GREEN MOUNTAIN COFFEE, INC. (Exact name of registrant as specified in its charter)
Delaware	03-0339228
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
33 Coffee Lane, Waterbury, Vermont 05676
(Address of principal executive offices) (zip code)
(802) 244-5621
(Registrants' telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES [ Ö ] NO [ ]

As of May 3, 2002, 6,750,969 shares of common stock of the registrant were outstanding.

Part I. Financial Information
Item 1. Financial Statements

GREEN MOUNTAIN COFFEE, INC.
Consolidated Balance Sheets
(Dollars in thousands)

	April 13, 2002	September 29, 2001
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$          9,307	$             979
Receivables, less allowances of $452 at April 13, 2002 and $492    at September 29, 2001	9,100	9,142
Inventories	5,436	6,059
Other current assets	697	524
Income tax receivable	-	743
Deferred income taxes, net	475	738
Total current assets	25,015	18,185
Fixed assets, net	17,332	14,397
Investment in Keurig, Incorporated, at cost	6,072	151
Goodwill and other intangibles	1,502	1,546
Other long-term assets	118	144
Deferred income taxes, net	30	73
Total assets	$        50,069	$        34,496
	======	======
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$          2,701	$             195
Accounts payable	5,739	6,099
Accrued compensation costs	1,156	1,682
Income tax payable	70	-
Accrued expenses	1,458	1,664
Total current liabilities	11,124	9,640
Long-term debt	2,642	256
Long-term line of credit	12,820	6,000
Commitments and contingencies
Stockholders' equity:
Common stock, $0.10 par value:    Authorized - 20,000,000 shares; Issued - 7,883,670 and 7,804,647    shares at April 13, 2002 and September 29, 2001, respectively	788	780
Additional paid-in capital	19,133	18,390
Retained earnings	12,250	8,678
Other comprehensive (loss), net of tax	(101)	(219)
ESOP unallocated shares, at cost - 56,746 and 73,800 shares at April 13, 2002 and September 29, 2001, respectively	(1,537)	(2,000)
Treasury shares, at cost - 1,138,273 and 1,137,506 shares at April 13, 2002 and September 29, 2001, respectively	(7,050)	(7,029)
Total stockholders' equity	23,483	18,600
Total liabilities and stockholders' equity	$        50,069	$        34,496
	======	======

The accompanying Notes to Consolidated Financial Statements are an integral part of these financialstatements.

GREEN MOUNTAIN COFFEE, INC.
Consolidated Statements of Operations
(Dollars in thousands except per share data)

	Twelve weeks ended
	April 13, 2002	April 14,   2001
	(unaudited)
Net sales	$        23,013	$        22,741
Cost of sales	13,074	13,174
Gross profit	9,939	9,567
Selling and operating expenses	5,820	5,631
General and administrative expenses	1,836	1,721
Operating income	2,283	2,215
Other income	4	2
Interest expense	(18)	(146)
Income before income taxes	2,269	2,071
Income tax expense	(943)	(858)
Net income	$          1,326	$          1,213
	======	======
Basic income per share:
Weighted average shares outstanding	6,673,261	6,353,999
Net income	$            0.20	$            0.19
Diluted income per share:
Weighted average shares outstanding	7,264,315	7,178,428
Net income	$            0.18	$            0.17

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

GREEN MOUNTAIN COFFEE, INC.
Consolidated Statements of Operations
(Dollars in thousands except per share data)

	Twenty-eight weeks ended
	April 13, 2002	April 14,   2001
	(unaudited)
Net sales	$        55,370	$        53,646
Cost of sales	31,129	31,708
Gross profit	24,241	21,938
Selling and operating expenses	14,160	12,877
General and administrative expenses	3,936	3,608
Operating income	6,145	5,453
Other (expense) income	(7)	15
Interest expense	(95)	(344)
Income before income taxes	6,043	5,124
Income tax expense	(2,471)	(2,091)
Net income	$          3,572	$          3,033
	======	======
Basic income per share:
Weighted average shares outstanding	6,651,112	6,302,420
Net income	$            0.54	$            0.48
Diluted income per share:
Weighted average shares outstanding	7,274,876	7,118,183
Net income	$            0.49	$            0.43

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

GREEN MOUNTAIN COFFEE, INC.
Unaudited Condensed Consolidated Statements of Comprehensive Income
(Dollars in thousands)

	Twelve weeks ended			Twenty-eight weeks ended
		April 13, 2002	April 14, 2001		April 13, 2002	April 14, 2001
Net income		$       1,326	$       1,213		$       3,572	$       3,033
Other comprehensive income, net of tax:
Deferred losses on derivatives designated as cash flow hedges		(14)	(97)		(49)	(235)
Losses on derivatives designated as cash flow hedges included in net income		136	63		167	114
Other comprehensive income (loss)		122	(34)		118	(121)
Comprehensive income		$       1,448	$       1,179		$ 3,690	$       2,912
		=====	=====		=====	=====

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

GREEN MOUNTAIN COFFEE, INC.
Unaudited Consolidated Statement Of Changes In Stockholders' Equity

For the Period Ended April 13, 2002
(Dollars in thousands)

	Common stock		Additional paid-in capital	Retained earnings	Accumulated other compre-hensive (loss)	Treasury stock		ESOP unallocated shares		Stockholders' equity
	Shares	Amount				Shares	Amount	Shares	Amount
Balance at September 29, 2001	7,804,647	$ 780	$ 18,390	$8,678	$ (219)	(1,137,506)	$(7,029)	(73,800)	$(2,000)	$ 18,600
Issuance of common stock under    employee stock purchase plan	14,566	1	256	-	-	-	-	-	-	257
Options exercised	64,457	7	255	-	-	(767)	(21)	-	-	241
Purchase of unallocated ESOP shares	-	-	-	-	-	-	-	(300)	(7)	(7)
Tax benefit from exercise of options	-	-	302	-	-	-	-	-	-	302
Allocation of employee stock purchase plan shares	-	-	(70)	-	-	-	-	17,354	470	400
Other comprehensive income,     net of tax	-	-	-	-	118	-	-	-	-	118
Net income	-	-	-	3,572	-	-	-	-	-	3,572
Balance at April 13, 2002	7,883,670	$ 788	$ 19,133	$12,250	$ (101)	(1,138,273)	$(7,050)	(56,746)	$(1,537)	$ 23,483
	=====	===	====	====	===	=====	====	====	====	====

GREEN MOUNTAIN COFFEE, INC.
Consolidated Statements of Cash Flows

	Twenty-eight weeks ended
	April 13, 2002	April 14, 2001
	(unaudited)
Cash flows from operating activities:
Net income	$      3,572	$      3,033
Adjustments to reconcile net income to net cash    provided by operating activities:
Depreciation and amortization	2,122	1,892
Gain on disposal and abandonment of fixed assets	(32)	(9)
Provision for doubtful accounts	186	530
Tax benefit from exercise of non-qualified options	302	801
Deferred income taxes	306	102
Changes in assets and liabilities:
Receivables	(144)	(1,928)
Inventories	623	376
Income tax payable (receivable)	813	(124)
Other current assets	(173)	(787)
Other long-term assets, net	26	56
Accounts payable	(360)	59
Accrued compensation costs	(126)	185
Accrued expenses	(88)	568
Net cash provided by operating activities	7,027	4,754
Cash flows from investing activities:
Investment in Keurig, Incorporated	(5,921)	-
Capital expenditures for fixed assets	(5,194)	(2,553)
Proceeds from disposals of fixed assets	213	113
Net cash used for investing activities	(10,902)	(2,440)
Cash flows from financing activities:
Purchase of treasury shares	(21)	-
Purchase of unallocated ESOP shares	(7)	-
Proceeds from issuance of common stock	519	871
Proceeds from issuance of long-term debt	5,000	97
Repayment of long-term debt	(108)	(83)
Net change in revolving line of credit	6,820	(2,500)
Net cash provided by (used for) financing activities	12,203	(1,615)
Net increase in cash and cash equivalents	8,328	699
Cash and cash equivalents at beginning of period	979	559
Cash and cash equivalents at end of period	$      9,307	$       1,258
	=====	=====
Non cash activities - release of ESOP shares to participants	$ 400	-

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

Green Mountain Coffee, Inc.
Notes to Consolidated Financial Statements

1. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q, and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements.

In the opinion of management, all adjustments considered necessary for a fair statement of the interim financial data have been included. Results from operations for the twelve week and twenty-eight week periods ended April 13, 2002 are not necessarily indicative of the results that may be expected for the fiscal year ending September 28, 2002.

For further information, refer to the consolidated financial statements and the footnotes included in the Annual Report on Form 10-K for Green Mountain Coffee, Inc. for the fiscal year ended September 29, 2001.

2. Inventories

Inventories consisted of the following:

	April 13,      2002	September 29, 2001
Raw materials and supplies	$     2,780,000	$     3,097,000
Finished goods	2,656,000	2,962,000
	$    5,436,000	$     6,059,000
	======	======

Inventory values above are presented net of $143,000 and $149,000 of obsolescence reserves at April 13, 2002 and September 29, 2001, respectively.

3. Earnings Per Share

The following table illustrates the reconciliation of the numerator and denominator of basic and diluted income per share computations as required by SFAS No. 128 (dollars in thousands, except per share data):

	Twelve weeks ended		Twenty-eight weeks ended
	April 13, 2002	April 14, 2001		April 13, 2002	April 14, 2001
Numerator - basic and diluted earnings per share : Net income	$ 1,326	$ 1,213		$ 3,572	$ 3,033
Denominator:	=====	=====		=====	=====
Basic earnings per share - weighted average shares outstanding	6,673,261	6,353,999		6,651,112	6,302,420
Effect of dilutive securities - stock options	591,054	824,429		623,764	815,763
Diluted earnings per share - weighted average shares outstanding	7,264,315	7,178,428		7,274,876	7,118,183
	=====	=====		=====	=====
Basic earnings per share	$ 0.20	$ 0.19		$ 0.54	$ 0.48
Diluted earnings per share	$ 0.18	$ 0.17		$ 0.49	$ 0.43

For the twelve weeks ended April 13, 2002 and April 14, 2001, options to purchase 92,000 (at exercise prices ranging from $22.75 to $26.83 per share) and 5,500 shares of common stock (at exercise prices ranging from $20.281 to $20.938 per share) respectively, were outstanding but were not included in the computation of diluted income per share because the options' exercise price was greater than the market price of the common shares.

4. Derivative Instruments and Hedging Activities

The Company regularly enters into coffee futures contracts to hedge price-to-be-established purchase commitments of green coffee and therefore designates these contracts as cash flow hedges. At April 13, 2002, the Company held outstanding futures contracts with a fair market value of $(27,000). These futures contracts are hedging coffee purchase commitments that take place in the next fourteen months and the related gains and losses will be reflected in cost of sales in the next five fiscal quarters when the related finished goods inventory is sold. At September 29, 2001, the Company held futures contracts with a total fair market value of $(369,000).

At April 13, 2002, deferred losses on futures contracts designated as cash flow hedges amounted to $170,000 ($101,000 net of taxes). These deferred losses are classified as accumulated other comprehensive losses.

In the twelve and twenty-eight week periods ended April 13, 2002, total losses on futures (gross of tax) included in cost of sales amounted to $232,000 and $284,000, respectively.

5. Investment in Keurig, Incorporated

During the 16 weeks ended January 19, 2002, the Company purchased 281,356 preferred shares of Keurig, Incorporated ("Keurig") for approximately $1,830,000 from third-party investors in Keurig. During the 12 weeks ended April 13, 2002, the Company purchased an additional 317,969 common shares and 304,994 preferred shares of Keurig from third party investors for approximately $4,091,000. The shares of common stock owned by the Company as of April 13, 2002 represent approximately 9.7% of Keurig's outstanding common shares and the total acquired shares (preferred and common) represent approximately 17.5% of Keurig's voting shares. As a result, due to the lack of significant influence over Keurig, the Company continued to use the cost method of accounting for its investment as of April 13, 2002.

In addition to the shares acquired through April 13, 2002, the Company has exercised options it holds from various third-party investors in Keurig to purchase an additional 1,324,885 common shares and 3,925 preferred shares for approximately $8,637,000 plus minor transactional expenses. The acquisition of these additional shares will bring the Company's common stock ownership in Keurig to approximately 49.9% and its ownership of Keurig's total common stock equivalents to 41.9%. The additional acquisition of these shares during the Company's third fiscal quarter will result in the Company's adoption of the equity method of accounting for its investment in Keurig.

At April 13, 2002, the Company had $8,637,000 of cash designated for the investment in additional Keurig shares included in cash and cash equivalents on the accompanying balance sheet.

6. Amendment of Credit Facility and new Term Loan

On April 3, 2002, the Company entered into the Fourteenth Amendment to the Fleet National Bank ("Fleet") Commercial Loan Agreement and Loan Documents (the "Credit Facility"), pursuant to which the Company refinanced its existing $15,000,000 revolving line of credit extending the maturity date one year to March 31, 2004.

In addition, the Company entered into a $5,000,000 two-year term loan (the "Term Loan") with Fleet under the Credit Facility. The Company will make quarterly principal repayments in the amount of $625,000, beginning on June 30, 2002 until March 31, 2004. Interest is paid monthly at LIBOR rates plus 1.75%.

A substantial portion of the line of credit and all the proceeds from the Term Loan are being used to finance the purchase of Keurig shares. The Credit Facility is secured by all the assets of the Company, including a pledge of the Keurig shares. There were no changes to the covenants of the Credit Facility except the Company was able to increase the allowable net capital expenditures it could make in fiscal 2002 from $7.5 million to $10 million. The amount of allowable net capital expenditures was reduced to $6 million in subsequent fiscal years. The Company was in compliance with all covenants of the Credit Facility at April 13, 2002.

At April 13, 2002, $12,820,000 and $5,000,000 were outstanding under the Credit Facility and the Term Loan, respectively.

7. Recent Pronouncements

During 2000, the Financial Accounting Standards Board's Emerging Issues Task Force (EITF) addressed various issues which impact the income statement classification of certain promotional payments. In May 2000, the EITF reached a consensus on Issue 00-14 "Accounting for Certain Sales Incentives". EITF Issue 00-14 provides guidance relating to the income statement classification of certain sales incentives. In April 2001, the EITF reached a consensus on EITF Issue 00-25 "Vendor Income Statement Characterization of Consideration Paid to a Reseller of the Vendor's Products or Services." EITF Issue 00-25 addresses when certain consideration from a vendor to a reseller should be classified in the vendor's income statement as a reduction of revenue. Issue 00-14 and Issue 00-25 were effective for the second quarter of fiscal 2002 for the Company.

The Company has evaluated the impact of adopting these pronouncements on its consolidated financial statements and has reclassified a portion of free goods provided to its customers from selling and operating expenses to cost of sales. For the twelve weeks ended April 13, 2002 and April 14, 2001, the increase in cost of sales (and corresponding decrease in selling and operating expenses) was $176,000 and $113,000, respectively. For the twenty-eight weeks ended April 13, 2002 and April 14, 2001, the increase in cost of sales (and corresponding decrease in selling and operating expenses) was $339,000 and $263,000, respectively. The impact on revenues from the reclassification of considerations paid to resellers (primarily in the form of payments for certain cooperative advertisement programs) was immaterial.

In July 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141 (FAS 141), "Business Combinations" and No. 142 (FAS 142), "Goodwill and Other Intangible Assets." FAS 141 supercedes APB 16. FAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, and establishes specific criteria for the recognition of intangible assets separately from goodwill. Provisions of FAS 141 are effective for the Company's business acquisitions that are consummated after July 1, 2001. FAS 142 supercedes Accounting Principles Board Opinion No. 17, "Intangible Assets," and addresses the accounting for goodwill and intangible assets subsequent to their acquisition. Under FAS 142, goodwill and indefinite lived intangible assets are no longer amortized but are tested for impairment at least annually at the reporting unit level. In addition, the amortization period of intangible assets with finite lives is no longe r limited to forty years. The Company adopted the provisions of FAS 142 in the first quarter of fiscal 2002.

8. Employee Stock Ownership Plan

The Company maintains an Employee Stock Ownership Plan (the "ESOP"). The ESOP is qualified under sections 401(a) and 4975(e)(7) of the Internal Revenue Code. The Board of Directors authorized 17,354 shares to be released to ESOP participants in the sixteen week period ended January 19, 2002. These 17,354 shares had a fair market value of $400,000 and a cost basis of $470,000. The related accrued compensation of $400,000 had been accrued in fiscal year 2001.

For the twenty-eight weeks ended April 13, 2002 and April 14, 2001, the Company recorded compensation costs of $113,000 and $234,000, respectively, to accrue for anticipated stock distributions under the ESOP. On April 13, 2002, the ESOP held 56,746 unearned shares at an average cost of $27.10.

9. ChefExpress.net, Inc.

During the twelve week period ended April 13, 2002, the Company recorded an impairment charge of $52,000 against its minority investment in ChefExpress.net, Inc., reducing the value of that investment to zero. This was due to the fact that the expected sale of ChefExpress.net was not completed and its operations are being closed down.

10. Related party transactions

During the first two fiscal quarters of 2002, the Company used travel services provided by Heritage Flight, a company which leases privately-owned airplanes. A portion of those travel fees were for flights on an airplane owned by Sabre Mountain LLC, which is 50% owned by Spirit Too, LLC, a company whose sole owner is the CEO of Green Mountain Coffee, Inc. The amount of revenues received by Sabre Mountain from trips booked by Green Mountain Coffee amounted to $89,000 in the twenty-eight week period ended April 13, 2002.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

Green Mountain Coffee, Inc. (the "Company" or "Green Mountain") sells coffee to retailers including supermarkets, convenience stores, specialty food stores; food service enterprises including restaurants, hotels, universities and business offices; and directly to individual consumers.

Cost of sales consists of the cost of raw materials including coffee beans, flavorings and packaging materials, a portion of the Company's rental expense, the salaries and related expenses of production and distribution personnel, depreciation on production equipment and freight and delivery expenses. Selling and operating expenses consist of expenses that directly support the sales of the Company's wholesale or consumer direct channels, including media and advertising expenses, a portion of the Company's rental expense, and the salaries and related expenses of employees directly supporting sales. General and administrative expenses consist of expenses incurred for corporate support and administration, including a portion of the Company's rental expense and the salaries and related expenses of personnel not elsewhere categorized.

The Company's fiscal year ends on the last Saturday in September. The Company's fiscal year normally consists of 13 four-week periods with the first, second and third "quarters" ending 16 weeks, 28 weeks and 40 weeks, respectively, after the commencement of the fiscal year.

Coffee Prices and Availability, and General Risk Factors

Green coffee commodity prices are subject to substantial price fluctuations, generally caused by multiple factors including weather, political and economic conditions in certain coffee-producing countries and other supply-related concerns. In recent years, green coffee prices have been under considerable downward pressures due to oversupply. The Company believes that the "C" price of coffee (the price per pound quoted by the Coffee, Sugar and Cocoa Exchange) will remain highly volatile in future fiscal years. In addition to the "C" price, coffee of the quality sought by Green Mountain tends to trade on a negotiated basis at a substantial premium or "differential" above the "C" price. These differentials also are subject to significant variations. In recent years, while the "C" price has been at or near historic lows, differentials have generally been on the rise. In recent months, green coffee prices have leveled off and, due primarily to a higher percentage o f purchases of higher costing organic and Fair Trade coffees, the average cost of green coffee that the Company purchases is rising.

In the past, the Company generally has been able to pass increases in green coffee costs to its customers. However, there can be no assurance that the Company will be successful in passing such fluctuations on to the customers without losses in sales volume or gross margin in the future. Similarly, rapid sharp decreases in the cost of green coffee could also force the Company to lower sales prices before realizing cost reductions in its green coffee inventory. Because Green Mountain roasts over 25 different types of green coffee beans to produce its more than 75 coffee selections, if one type of green coffee bean were to become unavailable or prohibitively expensive, management believes Green Mountain could substitute another type of coffee of equal or better quality, meeting a similar taste profile. However, frequent substitutions could lead to cost increases and fluctuations in gross margins. Furthermore, a worldwide supply shortage of the high-quality arabica coffees the Company purchases could have an adverse impact on the Company and its profitability.

The Company enters into fixed coffee purchase commitments in an attempt to secure an adequate supply of quality coffees. To further reduce its exposure to rising coffee costs, the Company enters into futures contracts to hedge price-to-be-established coffee purchase commitments.

The Company expects to face increasing competition in all its markets, as competitors improve the quality of their coffees to make them more comparable to Green Mountain's. In addition, specialty coffee is now more widely available, and a number of competitors benefit from substantially larger promotional budgets following, among other factors, the acquisition of specialty coffee companies by large, consumer goods multinationals. The Company expects that the continued high quality and wide availability of its coffee across a large array of distribution channels, combined with the added-value of its customer service processes will enable Green Mountain to successfully compete in this environment, although there can be no assurance that it will be able to do so.

Certain statements contained herein are not based on historical fact and are "forward-looking statements" within the meaning of the applicable securities laws and regulations. In addition, the Company's representatives may from time to time make oral forward-looking statements. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statements that do not directly relate to any historical or current fact. Words such as "anticipates," "believes," "expects," "will," "feels," "estimates," "intends," "plans," "projects," and similar expressions, may identify such forward-looking statements. Owing to the uncertainties inherent in forward-looking statements, actual results could differ materially from those set forth in forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, fluctuations in availability and cost of high-quality arabi ca green coffee, competition, terrorist activities and related events, organizational changes, the impact of a weaker economy, business conditions in the coffee industry and food industry in general, the impact of the loss of one or more major customers, delays in the timing of adding new locations with existing customers, the Company's level of success in continuing to attract new customers, Keurig Inc.'s ability to continue to grow in the office coffee service market and success in entering the home brewer market, variances from budgeted sales mix and growth rate, weather and special or unusual events, as well as other risks described in this report and other factors described from time to time in the Company's filings with the Securities and Exchange Commission. Forward-looking statements reflect management's analysis as of the date of this document. The Company does not undertake to revise these statements to reflect subsequent developments.

Results of Operations

	Twelve weeks ended		Twenty-eight weeks ended
	April 13, 2002	April 14, 2001		April 13, 2002	April 14, 2001
Net sales	100.0 %	100.0 %		100.0 %	100.0 %
Cost of sales	56.8 %	57.9 %		56.2 %	59.1 %
Gross profit	43.2 %	42.1 %		43.8 %	40.9 %
Selling and operating expenses	25.3 %	24.8 %		25.6 %	24.0 %
General and administrative expenses	8.0 %	7.6 %		7.1 %	6.7 %
Operating income	9.9 %	9.7 %		11.1 %	10.2 %
Other income	0.0 %	0.0 %		0.0 %	0.0 %
Interest expense	(0.0)%	(0.6)%		(0.2)%	(0.6)%
Income before taxes	9.9 %	9.1 %		10.9 %	9.6 %
Income tax expense	(4.1)%	(3.8)%		(4.4)%	(3.9)%
Net income	5.8 %	5.3 %		6.5 %	5.7 %
	====	====		====	====

GREEN MOUNTAIN COFFEE, INC.

Total Company Coffee Pounds Shipped by Sales Channel - Unaudited

(As a Percent of Total Coffee Pounds Shipped)

Channel	Q2 12 wks. ended 4/13/02	Q2 12 wks. ended 4/14/01	Q2 Y/Y lb. Increase	Q2 % Y/Y lb. Increase	Q2 YTD 28 wks. Ended 4/13/02	Q2 YTD 28 wks. Ended 4/14/01	Q2 YTD Y/Y lb. Increase	Q2 YTD % Y/Y lb. Increase
Supermarkets	25.0%	22.3%	142,000	21.8%	25.7%	24.0%	300,000	18.6%
Convenience Stores	31.1%	30.7%	89,000	9.9%	29.2%	28.4%	268,000	14.1%
Other Retail	3.0%	1.8%	45,000	88.2%	3.5%	2.0%	120,000	87.6%
Restaurants	8.1%	8.7%	5,000	2.0%	8.3%	9.3%	(4,000)	-0.6%
Office Coffee Service Distributors	22.3%	26.0%	(52,000)	-6.9%	22.5%	25.3%	(23,000)	-1.4%
Other Food Service	7.8%	8.5%	(2,000)	-0.8%	7.5%	8.5%	(13,000)	-2.3%
Consumer Direct	2.7%	2.0%	26,000	44.1%	3.3%	2.5%	76,000	45.8%
Totals	3,166,000	2,913,000	253,000	8.7%	7,421,000	6,697,000	724,000	10.8%

Note: Certain prior year customer channel classifications were reclassified to conform to current year classifications.

Wholesale Coffee Pounds Shipped by Geographic Region - Unaudited

(As a Percentage of Total Wholesale Coffee Pounds Shipped)

Region	Q2 12 wks. ended 04/13/02	Q2 12 wks. ended 04/14/01	Q2 Y/Y lb. Increase	Q2 %Y/Y lb. Increase	Q2 YTD 28 wks. Ended 4/13/02	Q2 YTD 28 wks. Ended 4/14/01	Q2 YTD Y/Y lb. Increase	Q2 YTD % Y/Y lb. Increase
Northern New England	27.3%	29.3%	6,000	0.7%	29.3%	30.8%	91,000	4.5%
Southern New England	22.1%	24.1%	(9,000)	-1.3%	22.1%	24.8%	(31,000)	-1.9%
Mid-Atlantic	24.4%	21.5%	138,000	22.5%	23.4%	21.9%	249,000	17.4%
South Atlantic	9.3%	8.7%	40,000	16.1%	8.1%	8.0%	62,000	11.9%
South Central	3.8%	3.8%	8,000	7.3%	4.3%	2.2%	162,000	111.0%
Midwest	2.2%	2.2%	5,000	7.8%	2.0%	2.5%	(15,000)	-9.3%
West	2.6%	2.1%	20,000	33.3%	2.6%	1.9%	61,000	49.2%
Multi-Regional	7.5%	7.2%	25,000	12.2%	7.4%	6.8%	88,000	19.8%
International	0.8%	1.1%	(6,000)	-19.4%	0.8%	1.1%	(19,000)	-25.3%
Totals	3,081,000	2,854,000	227,000	8.0%	7,179,000	6,531,000	648,000	9.9%

Note 1: Excludes coffee pounds shipped in the Consumer Direct channel.

Note 2: The allocation by region of coffee pounds shipped to certain McLane Company, Inc. warehouses for distribution to ExxonMobil convenience stores has been estimated. Starting this quarter, these estimates started to be based on actual McLane's shipment patterns from each McLane warehouse to ExxonMobil convenience stores.

Twelve weeks ended April 13, 2002 versus twelve weeks ended April 14, 2001

Net sales increased by $272,000, or 1.2%, from $22,741,000 for the twelve weeks ended April 14, 2001 (the "2001 period") to $23,013,000 for the twelve weeks ended April 13, 2002 (the "2002 period"). Coffee pounds shipped increased by approximately 253,000 pounds, or 8.7%, from approximately 2,913,000 pounds in the 2001 period to approximately 3,166,000 pounds in the 2002 period. The difference between coffee pounds growth and dollar sales growth was due primarily to changes in sales mix, driven by the continued successful expansion of the Company's business with Exxon Mobil Corporation convenience stores (ExxonMobil). The Company's sales agreement with ExxonMobil, effective since February 2001, provides for lower coffee sales prices and a reduction in its direct purchases of accessories such as cups and lids, offset by lower delivery and ordering costs for Green Mountain Coffee.

The Company delivered its strongest growth for the quarter in the supermarket and convenience store channels, where coffee pounds shipped increased 21.8% and 9.9%, respectively. In the supermarket channel, growth was led by expansion of sales to two customers: Price Chopper Supermarkets, with an increase of 73 store locations during the quarter, and Kings Super Markets, which added the Company's complete bulk, pre-bag and cup coffee program to its 30 locations this past fall. Growth in the convenience store channel continued to be led by sales to ExxonMobil stores. There was a year-over-year slow down in the growth of shipments to ExxonMobil's distributor, McLane Company, Inc. ("McLane"), compared to previous quarters that will also be evident in the Company's third fiscal quarter. This is due to an initial ramp of sales to McLane to load their warehouses in the second and third quarters of fiscal 2001 for distribution to ExxonMobil convenience stores that had formerly been deliver ed directly by Green Mountain Coffee.

Growth in the supermarket and convenience store channels was offset by a 6.9% year-over-year reduction in coffee pounds shipped in the office coffee service (OCS) channel for the quarter.Management believes this decrease was primarily due to a reduction in sales to three large customers, and, to a lesser extent, the impact of a slower economy and increased competition from other roasters. The three customers include one that had gone bankrupt in the third quarter of fiscal 2001; one that had moved much of its business to another roaster and now is expected to move its business back to Green Mountain over the next few quarters; and, a third customer, competing primarily in the water business, who is concentrating less on their coffee program in 2002.

Management now anticipates full-year fiscal 2002 growth in coffee pounds shipped to be in the range of 11% to 13%, and dollar sales growth in the range of 6% to 8%. Management also anticipates third quarter fiscal 2002 growth in coffee pounds shipped to be in the range of 10% to 13%, and dollar sales growth in the range of 8% to 10%.

Gross profit increased by $372,000, or 3.9%, from $9,567,000 for the 2001 period to $9,939,000 for the 2002 period. As a percentage of net sales, gross profit increased 1.1 percentage points from 42.1% for the 2001 period to 43.2% for the 2002 period. The increase in gross profit as a percentage of sales was due primarily to a higher percentage of the Company's total sales being coffee compared to allied products such as cups and lids, and from a shift to higher margin coffee products. Unlike previous quarters, Green Mountain did not benefit from a year-over-year decrease in green coffee prices in the 2002 period. Management presently expects quarter-to-quarter and year-over-year green coffee costs to increase in the third fiscal quarter. It is anticipated that third quarter gross profit margins will be in the range of 42% to 43%. Total year margins are expected to be in the range of 43% to 44%.

Selling and operating expenses increased by $189,000, or 3.4%, from $5,631,000 for the 2001 period to $5,820,000 for the 2002 period. As a percentage of sales, selling and operating expenses increased 0.5 percentage points from 24.8% for the 2001 period to 25.3% for the 2002 period. The increase in selling and operating expense was primarily due to increases in wholesale sales force compensation costs related to being fully staffed in the current period, and was offset, in part, by a decrease in bad debt expense.

General and administrative expenses increased by $115,000, or 6.7%, from $1,721,000 for the 2001 period to $1,836,000 for the 2002 period. As a percentage of sales, general and administrative expenses increased 0.4 percentage points from 7.6% for the 2001 period to 8.0% for the 2002 period. The increase in general and administrative expenses was primarily due to higher compensation and training costs.

As a result of the foregoing and including a reduction of accruals for non-sales person bonus and ESOP expenses of approximately $220,000,operating income increased by $68,000, or 3.1%, from $2,215,000 for the 2001 period to $2,283,000 for the 2002 period.

Interest expense decreased by $128,000, or 87.7%, from $146,000 for the 2001 period to $18,000 for the 2002 period primarily due to lower year-over-year average debt balances outstanding and lower interest rates during the 2002 period. In the 2002 period, the Company capitalized $49,000 of interest expense associated with investments in production equipment currently classified as construction in progress (primarily the installation of the bowl roasters and related conveyance and storage equipment). It is anticipated that interest expense in the third and fourth fiscal 2002 quarters will be in the range of $140,000 to $160,000.

Income tax expense increased $85,000, or 9.9%, from $858,000 for the 2001 period to $943,000 for the 2002 period. The effective tax rate for the 2002 period was 41.6%. It is now expected that the Company's effective tax rate will approximate 41% for the full fiscal 2002 year. This estimate is dependent on the level of book and tax permanent differences and possible changes in the valuation allowance against the deferred tax asset arising from its Vermont manufacturer's investment tax credit during the remainder of fiscal 2002. The ultimate amount of this credit that the Company will be able to use is dependent on many factors, including the amount of taxable income being generated; the percentage of income that is allocable to the State of Vermont; and, the number of disqualifying dispositions of stock options.

Net income increased by $113,000, or 9.3%, from $1,213,000 for the 2001 period to $1,326,000 in the 2002 period. Excluding the future impact of the equity method of accounting for our Keurig investment, full-year earnings per share is expected to be in the range of $0.94 to $0.97. Third quarter earnings per share are expected to be in the range of $0.19 to $0.21. The Company currently estimates that the equity method accounting of its Keurig investment will have a negative impact on earnings per share in the range of $0.04 to $0.06 for the full fiscal year.

Twenty-eight weeks ended April 13, 2002 versus twenty-eight weeks ended April 14, 2001

Net sales increased by $1,724,000, or 3.2%, from $53,646,000 for the twenty-eight weeks ended April 14, 2001 (the "2001 YTD period") to $55,370,000 for the twenty-eight weeks ended April 13, 2002 (the "2002 YTD period"). Coffee pounds shipped increased by approximately 724,000 pounds, or 10.8%, from approximately 6,697,000 pounds in the 2001 YTD period to approximately 7,421,000 pounds in the 2002 YTD period. The difference between coffee pounds growth and dollar sales growth was due primarily to changes in sales mix, driven by the continued successful expansion of the Company's business with Exxon Mobil Corporation convenience stores (ExxonMobil). The Company's sales agreement with ExxonMobil, effective since February 2001, provides for lower coffee sales prices and a reduction in its direct purchases of accessories such as cups and lids, offset by lower delivery and ordering costs for Green Mountain Coffee.

Coffee pounds shipped increases were strongest in the supermarket and convenience store channels with year-over-year pound increases of 300,000 and 268,000, respectively. Wholesale coffee pounds shipped increases were strongest in the Mid-Atlantic region (New York, New Jersey and Pennsylvania) due primarily to increases in sales to Kings Super Markets and Price Chopper Supermarkets and in the South Central region due primarily to sales to McLane for ExxonMobil convenience stores.

Gross profit increased by $2,303,000, or 10.5%, from $21,938,000 for the 2001 YTD period to $24,241,000 for the 2002 YTD period. As a percentage of net sales, gross profit from continuing operations increased 2.9 percentage points from 40.9% for the 2001 YTD period to 43.8% for the 2002 YTD period. The increase in gross profit as a percentage of sales was due primarily to lower green coffee costs, a higher percentage of the Company's total sales being coffee compared to allied products such as cups and lids, and from a shift to higher margin coffee products.

Selling and operating expenses increased by $1,283,000, or 10.0%, from $12,877,000 for the 2001 period to $14,160,000 for the 2002 period. As a percentage of sales, selling and operating expenses increased 1.6 percentage points from 24.0% for the 2001 period to 25.6% for the 2002 period. The increase in selling and operating expense was primarily due to increases in wholesale sales force compensation costs and higher consumer direct promotional expenses, offset, in part, by lower bad debt expense.

General and administrative expenses increased by $328,000, or 9.1%, from $3,608,000 for the 2001 period to $3,936,000 for the 2002 period. As a percentage of sales, general and administrative expenses increased 0.4 percentage points from 6.7% for the 2001 period to 7.1% for the 2002 period. The increase in general and administrative expenses was primarily due to higher compensation, recruiting and relocation costs, and training costs.

As a result of the foregoing and including a year-to-date reduction of accruals for non-sales person bonus and ESOP expenses of approximately $653,000,operating income increased by $692,000, or 12.7%, from $5,453,000 for the 2001 YTD period to $6,145,000 for the 2002 YTD period.

Interest expense decreased by $249,000, or 72.4%, from $344,000 for the 2001 YTD period to $95,000 for the 2002 YTD period primarily due to lower year-over-year average debt balances outstanding and lower interest rates during the 2002 YTD period.

Income tax expense increased $380,000, or 18.2%, from $2,091,000 for the 2001 YTD period to $2,471,000 for the 2002 YTD period. The effective tax rate for the 2002 YTD period was 40.9%. It is now expected that the Company's effective tax rate will approximate 41% for the full fiscal 2002 year. This estimate is dependent on the level of book and tax permanent differences and possible changes in the valuation allowance against the deferred tax asset arising from its Vermont manufacturer's investment tax credit during the remainder of fiscal 2002 as noted above.

Net income increased $539,000, or 17.8%, from $3,033,000 in the 2001 YTD period to $3,572,000 in the 2002 YTD period.

Liquidity and Capital Resources

Working capital increased $5,346,000 to $13,891,000 at April 13, 2002 from $8,545,000 at September 29, 2001. This increase is primarily due to the increase in cash generated through long-term borrowing, which is being held to acquire additional shares of Keurig in the third fiscal quarter of 2002. The increase in cash was offset by a decrease in income tax receivable and an increase in the current portion of long-term debt.

In the 2002 YTD period, cash flow from financing activities included $519,000 generated from the exercise of employee stock options and the employee stock purchase plan, down from $871,000 in the 2001 YTD period. In addition, cash flow from operating activities included a $302,000 tax benefit from the exercise of non-qualified options and disqualifying dispositions of incentive stock options, down from $801,000 in the 2001 YTD period. As options granted under the Company's stock option plans are exercised, the Company will continue to receive proceeds and a tax deduction for disqualifying dispositions; however, neither the amounts nor the timing thereof can be predicted.

In the 2002 YTD period, the Company purchased 586,350 preferred shares and 317,969 common shares of Keurig, Incorporated ("Keurig") for approximately $5,921,000. The Company has exercised options to purchase an additional 3,925 preferred and 1,324,885 common shares of Keurig in the third fiscal quarter of 2002 at a cost of approximately $8,637,000, or $6.50 a share, plus minimal transaction costs. Separate from the Company, a total of 22,500 preferred and common shares were purchased by executives of Green Mountain at $6.50 per share in the third fiscal quarter of 2002. At April 13, 2002, the Company's escrow agent was holding approximately $8,637,000 of the Company's cash in escrow in order to fund these additional purchases. At April 13, 2002, the Company held less than 20% of the outstanding stock of Keurig and the investment was carried at cost. At the end of the third fiscal quarter of 2002, it is expected that Green Mountain will hold approximately 49.9% of the outstanding common shares of Keurig and 41.9% of its total common stock equivalents. The investment will be accounted for under the equity method starting in the third fiscal quarter of 2002. This may negatively impact earnings in future quarters. Notwithstanding, the Company's acquisition of shares of capital stock of Keurig, as a result of contractual limitations and restrictions agreed to by the Company, MD Co., which owns approximately 23% of Keurig's capital stock, effectively controls Keurig - -- having the ability to elect a majority of Keurig's Board of Directors, cause certain types of amendments to Keurig's Certificate of Incorporation, and approve or reject a sale of Keurig's business.

In order to finance the Keurig investment, the Company extended its existing $15,000,000 line of credit with Fleet Bank (Fleet) by one year to March 31, 2004 and entered into a new $5,000,000 term loan agreement with Fleet. The term loan is to be paid back in quarterly installments of $625,000, beginning on June 30, 2002 and ending in March 31, 2004. The interest rate is 175 basis points above LIBOR rates. At April 13, 2002, the outstanding balance on the Fleet line of credit was $12,820,000 and the amount remaining available was $2,180,000. The Fleet credit facility is subject to certain quarterly covenants, and the Company was in compliance with these covenants at April 13, 2002.

During the 2002 YTD period, besides the investment in Keurig, Green Mountain had capital expenditures of $5,194,000, including $3,268,000 for production and distribution equipment, $510,000 for leasehold improvements, $739,000 for equipment on loan to wholesale customers, $405,000 for computer equipment and software, and $272,000 in fixtures. These capital expenditures include installation costs of $1,119,000 for two roasters purchased at auction in fiscal 2001. Once the installation of these two new roasters is completed, the Company's annual roasting capacity in Waterbury, Vermont, is expected to increase from approximately 15 million pounds to 40 to 50 million pounds of roasted coffee. The installation of the roasters and related equipment is expected to be completed in September 2002.

During the 2001 YTD period, Green Mountain had capital expenditures of $2,553,000, including $1,125,000 for equipment on loan to wholesale customers, $566,000 for production and distribution equipment, $484,000 for computer equipment and software, and $255,000 in leasehold improvements. Cash used to fund the capital expenditures in the 2002 and 2001 YTD periods was obtained from net cash provided by operating activities.

The Company currently plans to make net capital expenditures in fiscal 2002 of approximately $9,500,000 to $10,000,000, including the purchase of Keurig K-Cup™ production equipment, which is currently owned by Keurig. The cost of that equipment will be in the range of $1,500,000 to $2,500,000 and the Company has committed to purchase the equipment no later than December 31, 2003. The purchase price decreases the further out in time that the purchase occurs. The Company will pay reduced royalties to Keurig on K-Cup production after this equipment is purchased. Management continuously reviews capital expenditure needs and actual amounts expended may differ from these estimates.

A summary of the Company's cash requirements related to its outstanding long-term debt (excluding the Company's line of credit which terminates on March 31, 2004), future minimum lease payments and green coffee purchase commitments is as follows:

Fiscal Year	Long-term Debt	Lease Commitments	Green Coffee Purchase Commitments	Total
2002, remaining	826,000	574,000	3,228,000	4,628,000
2003	2,575,000	1,069,000	1,879,000	5,523,000
2004	1,942,000	885,000	1,716,000	4,543,000
2005		798,000	146,000	944,000
2006		663,000		663,000
Thereafter		698,000		698,000
Total	5,343,000	4,687,000	6,969,000	16,999,000

Management believes that cash flow from operating activities, existing cash, the currently available credit facility and additional borrowings will provide sufficient liquidity to pay all liabilities in the normal course of business, fund capital expenditures and service debt requirements in fiscal 2002. However, a decrease in operating cash flows, due to a decline in earnings or other factors, may impact the Company's ability to self-fund capital expenditures and other investments, or service debt requirements, and may lead the Company to rely on additional borrowings or an equity offering as sources of funding. Management is presently considering expanding its credit facility in order to position the company for small strategic opportunities similar to last year's Frontier acquisition.

Deferred Income Taxes

The Company had net deferred tax assets of $505,000 at April 13, 2002. These assets are reported net of a deferred tax asset valuation allowance at that date of $1,791,000 (including $1,772,000 related to a Vermont investment tax credit). Presently, the Company believes that the deferred tax assets, net of deferred tax liabilities and the valuation allowance, are realizable and represent management's best estimate, based on the weight of available evidence as prescribed in SFAS 109, of the amount of deferred tax assets which most likely will be realized. However, management will continue to evaluate the amount of the valuation allowance based on near-term operating results and longer-term projections.

Factors Affecting Quarterly Performance

Historically, the Company has experienced variations in sales and earnings from quarter to quarter due to the holiday season and a variety of other factors, including, but not limited to, general economic trends, the cost of green coffee, competition, marketing programs, weather and special or unusual events. Because of the seasonality of the Company's business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

Critical Accounting Policies

Green Mountain prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period (see Note 2 to the Company's Consolidated Financial Statements included in the Annual Report on Form 10-K). Actual results could differ from those estimates.

In December, the Securities and Exchange Commission ("SEC") requested that all registrants list their critical accounting policies in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of their Form 10-K. The SEC defined a critical accounting policy as one which is important to the portrayal of the company's financial condition and results of operations and requires management's subjective or complex judgments. In accordance with this request, the Company has described its critical accounting policies below.

Provision for Doubtful Accounts
Periodically, the Company reviews the adequacy of its provision for doubtful accounts based on historical bad debt expense results and current economic conditions using factors based on the aging of its accounts receivable. In addition, from time-to-time the Company estimates specific additional allowances based on indications that a specific customer may be experiencing financial difficulties. Actual bad debt results could differ materially from the Company's estimates.

Deferred Tax Valuation Allowance
Periodically, management reviews the adequacy of its deferred tax valuation allowance that is primarily related to a Vermont manufacturer's investment tax credit. This review entails estimating: the Company's future taxable income through fiscal 2004; how much of that taxable income will be allocable to Vermont; and, the levels of disqualifying dispositions of stock options, among other factors. A reduction in the valuation allowance can result in the Company reporting its income tax expense at a lower effective Federal and State tax rate. Conversely, an increase in the valuation allowance can result in the Company reporting its income tax at a higher rate. Since future results may differ materially from those estimated by the Company, the Company's estimate of the amount of deferred tax assets that will be ultimately realized could differ materially.

Impairment of Long-Lived Assets
When facts and circumstances indicate that the carrying values of long-lived assets, including fixed assets, investments in other companies and intangibles, may be impaired, an evaluation of recoverability is performed by comparing the carrying value of the assets to projected future cash flows in addition to other quantitative and qualitative analyses. Upon indication that the carrying value of such assets may not be recoverable, the Company recognizes an impairment loss as a charge against current operations. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value, less estimated costs to sell. Judgments made by the Company related to the expected useful lives of long-lived assets and the ability of the Company to realize undiscounted cash flows in excess of the carrying amounts of such assets are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions, and changes in operating performance. As the Comp any assesses the ongoing expected cash flows and carrying amounts of its long-lived assets, these factors could cause the Company to realize a material impairment charge.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in information relating to commodity price risks since the Company's disclosure included in Item 7A of Form 10-K as filed with the Securities and Exchange Commission on December 24, 2001.

At April 13, 2002, the Company had $17,820,000 of debt subject to variable interest rates ( Fleet Bank's prime rate, LIBOR rates for maturities up to one year or Bankers' Acceptance rates). A hypothetical 100 basis point increase in the Bankers' Acceptance, LIBOR and prime rates would result in additional interest expense of $178,000 on an annualized basis.

Part II. Other Information

Item 4. Submission of Matters to a Vote of Security Holders

(a) The Registrant held its 2002 Annual Meeting of Stockholders on April 4, 2002 at the Company's offices located at 81 Demeritt Place in Waterbury, Vermont. The Board of Directors of the Registrant solicited proxies for this meeting pursuant to a proxy statement filed under regulation 14A.

(b-c) At the Annual Meeting the stockholders voted as follows on the following matter:

VOTES

Proposal 1 - to amend the Certificate of Incorporation to institute a classified Board of Directors with staggered terms

For                    Against              Abstain              Not voted

3,826,169          1,217,221         1,307               1,680,942

Proposal 2 - to amend the Certificate of Incorporation to limit the filling of vacancies on the Board of Directors

For                    Against              Abstain              Not voted

3,927,451          1,071,503         45,743               1,680,942

Proposal 3 - to amend the Certificate of Incorporation to eliminate the right of stockholders to take action by written consent

For                    Against              Abstain              Not voted

3,645,703          1,350,032        48,962               1,680,942

Proposal 4 - to amend the Certificate of Incorporation to eliminate the right of stockholders to call a special meeting

For                    Against              Abstain              Not voted

3,613,859          1,381,110         49,728               1,680,942

Election of Directors

Nominee	For	Withheld
Robert P. Stiller   (Class I)	4,443,023	601,674
William D. Davis (Class I)	4,883,013	161,684
Jules A. del Vecchio (Class I)	4,884,507	160,190
Hinda Miller (Class II)	4,885,452	159,245
William G. Hogan (Class II)	4,891,602	153,095
David E. Moran (Class III)	4,883,174	161,523
Kathryn S. Brooks (Class III)	4,889,165	155,532

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

3.1	Certificate of Incorporation, as Amended
3.2	Bylaws, as Amended and Restated
10.1	Shareholder Rights Agreement dated as of April 4, 2002 by and among Keurig, the Company and MD Co. 1
10.2	Second Amended and Restated First Refusal Agreement dated as of February 4, 2002 by and among Keurig, the Company and certain other Keurig stockholders. 1
10.3	Voting Agreement dated as of February 4, 2002 by and among Keurig, the Company and certain other Keurig stockholders. 1
10.4	Stock Rights Agreement dated as of February 4, 2002 by and among Keurig and the holders of Keurig Series B and C Preferred Stock, including the Company. 1
10.5	Fourteenth Amendment of Commercial Loan Agreement and Loan Documents dated April 3, 2002 between the Company and Fleet National Bank. 1
10.6	$5,000,000 Term Promissory Note dated April 3, 2002 issued by the Company in favor of Fleet National Bank. 1
10.7	Stock Pledge and Security Agreement dated April 3, 2002 executed by the Company in favor of Fleet National Bank. 1

(b) Reports on Form 8-K:

Two reports on Form 8-K were filed during the twelve weeks ended April 13, 2002. (i) The first was filed on February 5, 2002 to report under Item 5 of Form 8-K the issuance by the Company of a press release on February 5, 2002 reporting the acquisition by the Company of options to purchase approximately 1.8 million shares of Keurig, Incorporated exercisable on or before April 8, 2002 and the exercise by the Company of options to acquire 281,356 shares of Preferred Stock of Keurig. (ii) The second was filed on April 19, 2002 to report under Item 2 of Form 8-K the exercise by the Company of options to acquire 2,217,859 shares of capital stock of Keurig, Incorporated (including options previously exercised).

___________________________

1Incorporated by reference to the corresponding exhibit number in the Report on Form 8-K on April 19, 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GREEN MOUNTAIN COFFEE, INC.

Date:	5/28/2002	By: /s/ Robert P. Stiller
		Robert P. Stiller,
		President and Chief Executive Officer
Date:	5/28/2002	By        /s/ William G. Hogan
		William G. Hogan,
		Vice President and Chief Financial Officer

EX-3.1

CERTIFICATE OF INCORPORATION, AS AMENDED

OF

GREEN MOUNTAIN COFFEE, INC.

FIRST: The name of the Corporation is GREEN MOUNTAIN COFFEE, INC.

SECOND: The address of the registered office of the Corporation in the State of Delaware in No. 15 East North Street, in the City of Dover, County of Kent. The name of its registered agent at such address is United Corporate Services, Inc.

THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of Capital Stock which the Corporation shall have authority to issue is Twenty One Million (21,000,000) shares, of which Twenty Million (20,000,000) shares shall be Common Stock of the par value of TEN CENTS ($0.10) per share, and One Million (1,000,000) shares shall be Preferred Stock of the par value of TEN CENTS ($0.10) per share.

The designations and the powers, preferences and rights, and the qualifications, limitations or restrictions of the shares of each class of stock are as follows:

1. COMMON STOCK
1. Dividends may be paid upon the Common Stock as and when

declared by the Board of Directors out of any funds legally available therefore.

2. Except as otherwise provided by statute or by any express

provision of this Certificate, all rights to vote and all voting power shall be exclusively vested in the Common Stock and the holders thereof shall be entitled to one vote for each share for the election of directors and upon all other matters.

2. PREFERRED STOCK
1. The Board of Directors of the Corporation is authorized, subject to

limitations prescribed by law and the provisions of the Article FOURTH, to provide for, from time to time, in one or more series of any number, the issuance of shares of Preferred Stock, and, by filing a certificate pursuant to the General Corporation Law of the State of Delaware, to establish the number of shares to be included in each such series and to fix the designation, relative rights, preferences, qualifications and limitations of the shares of each such series. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of each of the following:

1. The number of shares constituting that series and

the distinctive designation of that series;

2. The dividend rate on the shares of the series

whether dividends shall be cumulative and, if so, from which date or dates, and whether they shall be payable in preference to, or in another relation to, the dividends payable on any other class or classes or series of stock;

3. Whether that series shall have voting rights, in

addition to the voting rights provided by law, and, if so, the terms of such voting rights;

4. Whether that series shall have conversion or

exchange privileges, and, if so, the terms and conditions of such conversion or exchange, including provision for adjustment of the conversion or exchange rate in such events as the Board of Directors shall determine;

5. Whether or not the shares of that series shall be

redeemable, and, if so, the terms and conditions of such redemption, including the manner of selecting shares for redemption if less than all such shares are to be redeemed, the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

6. Whether that series shall be entitled to the benefit of

a sinking fund to be applied to the purchase or redemption of shares of that series and, if so, the terms and amounts of such sinking fund;

7. The rights and restrictions of the shares of the series

upon the creation of indebtedness of the Corporation or any subsidiary;

8. The right of the shares of that series in the event of

any voluntary or involuntary liquidation, dissolution or winding up of the Corporation and whether such rights shall be in preference to or in another relation to the comparable rights of any other class or classes or series of stock; and

9. Any other relative, participating optional or other

special, rights, qualifications, limitations or restrictions of that series.

3. GENERAL
1. The Corporation shall be entitled to treat the person in whose name

any share, right or option is registered as the owner thereof, for all purposes, and shall not be bound to recognize any equitable or other claim to or interest in such share, right or option on the part of any other person, whether or not the Corporation shall have notice thereof, save as may be expressly provided by the laws of the State of Delaware.

FIFTH: The name and mailing address of the sole incorporator are as follows:

Rachel Abarbanel  

30 Rockefeller Plaza - 29th Floor

New York, New Yor, 10112                  

SIXTH:     (a) The number of Directors of the Corporation which shall constitute the whole Board of Directions shall be such as from time to time shall be fixed by or in the manner provided in the By-Laws but in no case shall the number be less than one.

                (b) The Board of Directors shall be divided into three classes: Class I, Class II and Class III. The classes shall be as nearly equal in number as the then total number of directors constituting the entire Board of Directors permits, with the three-year term of service of each class staggered to expire in successive years. The directors shall be assigned to a class at the time of their election. Initially, the directors in Classes I and II will hold office for one-year and two-year terms, respectively. The directors appointed to Class I shall initially serve a one-year term and shall be eligible for re-election for a full three-year term at the Corporation's annual meeting of stockholders to be held in 2003. The directors appointed to Class II shall initially serve a two-year term and shall be eligible for re-election for a full three-year term at the annual meeting of stockholders to be held in 2004. The directors appointed to Class III shall initially serve a full three-year term and shall be eligible for re-election for new three-year terms at the annual meeting of stockholders to be held in 2005. At each annual meeting of stockholders, the successors to the class of directors whose term shall then expire shall be elected to hold office for a term expiring at the third succeeding annual meeting of stockholders and each director so elected shall hold office until his successor is elected and qualified, or until his earlier resignation or removal. If the number of directors is changed, any increase or decrease in the number of directors shall be apportioned among the three classes so as to make all classes as nearly equal in number as possible, and the Board of Directors shall decide which class shall contain an unequal number of directors.

                (c) Any vacancies in the Board of Directors for any reason, and any directorships resulting from any increase in the number of directors, may be filled only by the Board of Directors, acting by a majority of the directors then in office (even though such number of directors may constitute less than a quorum) and any directors so chosen shall hold office until the next election of the class for which such directors shall have been chosen and until their successors shall be elected and qualified.

                (d) All corporate powers of the Corporation shall be exercised by the Board of Directors except as otherwise provided herein or by law. In furtherance and not in limitation of the powers conferred by statute and by law the Board of Directors is expressly authorized to make, amend, alter, change, add to or repeal By-Laws of the Corporation, without any action on the part of the stockholders.

                (e) Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

                (f) Notwithstanding anything to the contrary contained in the By-Laws, a special meeting of the stockholders for any purpose or purposes may be called at any time or from time to time by the Chief Executive Officer, a majority of the Board of Directors or the Chairman of the Board of Directors if one has been elected. Special meetings may not be called by any other person or persons. At any special meetings, no business shall be transacted and no corporate action shall be taken other than as stated in the notice of the meeting.

SEVENTH:     (a) No contract or transaction between the Corporation and one or more of its Directors, or between a corporation and any other corporation, partnership, association or other organization in which one or more of its Directors or officers are Directors or officers, or have financial interest, shall be void or voidable solely for this reason, or solely because such Directors or officers are present at or participate in the meeting of the Board of Directors or the committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose if:

                                (1) The material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of the disinterested directors, even thought the disinterested directors be less than a quorum; or

                                (2) The material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

                                (3) The contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee there of, or the stockholders.

In any case described in this Section, any common or interested Director may be counted in determining the existence of a quorum at any meeting of the Board of Directors or any committee which shall authorize any such contract or transaction and may vote thereat to authorize any such contract or transaction. Any Director of the Corporation may vote upon any contract or other transaction between the Corporation and any subsidiary or affiliated corporation without regard to the fact that he is also a Director of such subsidiary or affiliate corporation.

                 (b) To the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended, Director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director.

                (c) Any contract, transaction or act the Corporation or of the Board of Directors which shall be ratified by a majority of a quorum of the stock holders entitled to vote at any annual meeting or at any special meeting call for that purpose shall be as valid and binding as though ratified by every stockholder of the Corporation; provided, however, that any failure of the stockholders to approve or ratify such contract, transaction, or act when and if submitted to them shall not be deemed in any way to invalidate the same or to deprive the Corporation, its Directors or officers of their right to proceed with such contract, transaction or act.

                (d) Each Director, officer and employee, past or present of the Corporation, and each person who serves or may have served at the request of the Corporation as a Director, Trustee, officer or employee of another corporation, association, trust or other entity and their respective heirs, administrators and executors, shall be indemnified by the Corporation in accordance with, and to the fullest extent permitted by, the provisions of the General Corporation Law of the State of Delaware as it may be from time to time be amended. Each agent of the Corporation and each person who serves or may have served at the request of the Corporation as an agent of another corporation, or as an employee or agent of an partnership, joint venture, trust or other enterprise may, in the discretion of the Board of Directors, be indemnified by the Corporation to the same extent as provided herein with respect to the Directors, officers and employees of the Corporation. The provisions of this paragraph (d) shall apply to any membe r of any Committee appointed by the Board of Directors as fully as though such person shall have been an officer or Director of the Corporation.

                (e) The provisions of this Article SEVETH shall be in addition to and not in limitation of any other rights, indemnities, or limitations of liability to which any Director or officer may be entitled, as a matter of law or under any By-Law, agreement, vote of stockholders or otherwise.

EIGHTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title B of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title B of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said Court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the Court to which the said application has been made, be binding on all the creditors or class of creditors, and/or all stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.

NINTH: Meetings of stockholders maybe held within or without the State of Delaware, as the By-Law may provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation. Elections of Directors need not be by written ballot unless the By-Laws of the Corporation shall so provide.

TENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in the Certificate of Incorporation, in the manner now or hereafter prescribed by statute and this Certificate or Incorporation, and all rights conferred upon officers, Directors and stockholders herein are granted subject to this reservation.

EX-3.2

AMENDED AND RESTATED BY-LAWS

OF

GREEN MOUNTAIN COFFEE, INC.

(A Delaware corporation)

ARTICLE I

Offices

SECTION 1. Registered Office. The registered office of the Corporation within the State of Delaware shall be in the City of Dover, County of Kent.

SECTION 2. Other Offices. The Corporation may also have an office or offices other than said registered office at such place or places, either within or without the State of Delaware, as the Board of Directors shall from time to time determine or the business of the Corporation may require.

ARTICLE II

Meetings of Stockholders

SECTION 1. Place of Meetings. All meetings of the stockholders for the election of Directors or for any other purpose shall be held at any such place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of meeting or in a duly executed waiver thereof.

SECTION 2. Annual Meeting. The annual meeting of stockholders shall be held at such date and time as shall be designated from time to time by the Board of Directors and stated in the notice of meeting or in a duly executed waiver thereof. At such annual meeting, the stockholders shall elect, by a plurality vote, a Board of Directors and transact such other business as may properly be brought before the meeting.

SECTION 3. Special Meetings. The Chief Executive Officer, a majority of the Board of Directors or the Chairman of the Board if one has been elected, may call at any time or from time to time a special meeting of stockholders. Special meetings may not be called by any other person or persons.

SECTION 4. Notice of Meetings. Except as otherwise expressly required by statute, written notice of each annual and special meeting of stockholders stating the date, place and given to each stockholder of record entitled to vote thereat not less than ten nor more than sixty days before the date of the meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Notice shall be given personally or by mail and, if by mail, shall be sent in a postage prepaid envelope, addressed to the stockholder at his address as it appears on the records of the Corporation. Notice by mail shall be deemed given at the time when the same shall be deposited in the United States mail, postage prepaid. Notice of any meeting shall not be required to be given to any person who attends such meeting, except when such person attends the meeting in person or by proxy for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, or who, either before or after the meeting, shall submit a signed written waiver of notice, in person or by proxy. Neither the business to be transacted at, nor the purpose of, an annual or special meeting of stockholders need be specified in any written waiver of notice.

SECTION 5. List of Stockholders. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before each meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city, town or village where the meeting is to be held, which place shall be specified in the notice of meeting, or, if not specified, at the place where the meeting is to be held. The list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

SECTION 6. Quorum, Adjournments. The holders of a majority of the voting power of the issued and outstanding stock of the Corporation entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of stockholders, except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented by proxy at any meeting of stockholders, the, stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented by proxy. At such adjourned meeting at which a quorum shall be present or represented by proxy, any business may be transacted which might have been transacted at the meeting as originally called. If the adjournment is for more than thirty days, or, if after adjou rnment a new record date is set, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

SECTION 7. Organization. At each meeting of stockholders, the Chairman of the Board, if one shall have been elected, or, in his absence or if one shall not have been elected, the President, shall act as chairman of the meeting. The Secretary or, in his absence or inability to act, the person whom the chairman of the meeting shall appoint secretary of the meeting, shall act as secretary of the meeting and keep the minutes thereof.

SECTION 8. Order of Business. The order of business at all meetings of the stockholders shall be as determined by the chairman of the meeting.

SECTION 9. Voting. Except as otherwise provided by statute or the Certificate of Incorporation, each stockholder of the corporation shall be entitled at each meeting of stockholders to one vote for each share of capital stock of the Corporation standing in his name on the record of stockholders of the corporation:

    (a) on the date fixed pursuant to the provisions of Section 7 of Article V of these By-Laws as the record date for the determination of the stockholders who shall be entitled to notice of and to vote at such meeting; or

    (b) if no such record date shall have been so fixed, then at the close of business on the day next preceding the day on which notice thereof shall be given, or, if notice is waived, at the close of business on the date next preceding the day on which the meeting is held.

Each stockholder entitled to vote at any meeting of stockholders may authorize another person or persons to act for him by a proxy signed by such stockholder or his attorney-in-fact, but no proxy shall be voted after three years from its date, unless the proxy provides for a longer period. Any such proxy shall be delivered to the secretary of the meeting at or prior to the time designated in the order of business for so delivering such proxies. When a quorum is present at any meeting, the vote of the holders of a majority of the voting power of the issued and outstanding stock of the corporation entitled to vote thereon, present in person or represented by proxy, shall decide any question brought before such meeting, unless the question is one upon which by express provision of statute or of the certificate of incorporation or of these By-Laws, a different vote is required, in which case such express provision shall govern and control the decision of such question. Unless required by st atute, or determined by the chairman of the meeting to be advisable, the vote on any question need not be by ballot. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and shall state the number of shares voted.

SECTION 10. Inspectors. The Board of Directors may, in advance of any meeting of stockholders, appoint one or more inspectors to act at such meeting or any adjournment thereof. If any of the inspectors so appointed shall fail to appear or act, the chairman of the meeting shall, or if inspectors shall not have been appointed, the chairman of the meeting may, appoint one or more inspectors. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall deter-mine the number of shares of capital stock of the corporation outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to v ote, count and tabulate all votes, ballots or consents, determine the results, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the chairman of the meeting, the inspectors shall make a report in writing of any challenge, request or matter determined by them and shall execute a certificate of any fact found by them. No director or candidate for the office of director shall act as an inspector of an election of Directors. Inspectors need not be stockholders.

ARTICLE III

Board of Directors

SECTION 1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The Board of Directors may exercise all such authority and powers of the corporation and do all such lawful acts and things as are not by statute or the Certificate of Incorporation directed or required to be exercised or done by the stockholders.

SECTION 2. Number. The number of Directors constituting the initial Board of Directors shall be as determined in the resolutions of the Incorporator of the Corporation electing the Initial Board of Directors. Thereafter, the number of Directors may be fixed, from time to time, by the affirmative vote of a majority of the entire Board of Directors. Any decrease in the number of Directors shall be effective at the time of the next succeeding annual meeting of stockholders unless there shall be vacancies in the Board of Directors, in which case such decrease may become effective at any time prior to the next succeeding annual meeting to the extent of the number of such vacancies.

SECTION 3. Election and Qualifications. Except as otherwise provided by the Certificate of Incorporation, the directors shall be elected by the stockholders at the annual meeting of stockholders. A director need not be a stockholder. Each director shall hold office until his successor shall have been elected and qualified, or until his death, or until he shall have resigned, or have been removed, as hereinafter provided in these By-Laws.

SECTION 4. Classes. The Board shall be divided into three classes: Class I, Class II and Class III. The classes shall be as nearly equal in number as the then total number of directors constituting the entire Board permits. If the number of directors is changed, any increase or decrease in the number of directors shall be apportioned among the three classes so as to make all classes as nearly equal in number as possible, and the Board shall decide which class shall contain an unequal number of directors. The directors shall be assigned to a class at the time of their election.

SECTION 5. Terms of Office. Initially, the directors in Class I and Class II will hold office for one and two-year terms, respectively. The directors appointed to Class I shall initially serve a one-year term and shall be eligible for re-election for a full three-year term at the Corporation's Annual Meeting of Stockholders to be held in 2003. The directors appointed to Class II shall initially serve a two-year term and shall be eligible for re-election for a full three-year term at the Annual Meeting of Stockholders to be held in 2004. The directors appointed to Class III shall initially serve a full three-year term and shall be eligible for re-election for a new three-year terms at the Annual Meeting of Stockholders to be held in 2004. At each Annual Meeting of Stockholders, the successors to the class of directors whose term shall then expire shall be elected to hold office for a term expiring at the third succeeding Annual Meeting of Stockholders and each director so elected sha ll hold office until his successor is elected and qualified, or until his earlier resignation or removal.

SECTION 6. Place of Meetings. Meetings of the Board of Directors shall be held at such place or places, within or without the State of Delaware, as the Board of Directors may from time to time determine or as shall be specified in the notice of any such meeting.

SECTION 7. Annual Meeting. The Board of Directors shall meet for the purpose of organization, the election of officers and the transaction of other business, as soon as practicable after each Annual Meeting of Stockholders, on the same day and at the same place where such annual meeting- shall be held. Notice of such meeting need not be given. In the event such annual meeting is not so held, the annual meeting of the Board of Directors may be held at such other time or place (within or without the State of Delaware) as shall be specified in a notice thereof given as hereinafter provided in Section 10 of this Article III.

SECTION 8. Regular meetings. Regular meetings of the Board of Directors shall be held at such time and place as the Board of Directors may fix. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day. Notice of regular meetings of the Board of Directors need not be given except as otherwise required by statute or these By-Laws.

SECTION 9. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, if one shall have been elected, or by two or more Directors of the corporation or by the President.

SECTION 10. Notice of Meetings. Notice of each special meeting of the Board of Directors (and of each regular meeting for which notice shall be required) shall be given by the Secretary as hereinafter provided in this Section 10, in which notice shall be stated the time and place of the meeting. Except as otherwise required by these By-Laws, such notice need not state the purposes of such meeting. Notice of each such meeting shall be mailed, postage prepaid, to each director, addressed to him at his residence or usual place of business, by first class mail, at least two days before the day on which such meeting is to be held, or shall be sent addressed to him at such place by telegraph, cable, telex, telecopy or other similar means, or be delivered to him personally or be given to him by telephone or other similar means, at least twenty-four hours before the time at which such meeting is to be held. Notice of any such meeting need not be given to any director who shall, either b efore or after the meeting, submit a signed waiver of notice or who shall attend such meeting, except when he shall attend for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

SECTION 11. Quorum and Manner of Acting. A majority of the entire Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, and, except as otherwise expressly required by statute or the Certificate of Incorporation or these By-Laws, the act of a majority of the entire Board of Directors shall be the act of the Board of Directors. In the absence of a quorum at any meeting of the Board of Directors, a majority of the Directors present thereat may adjourn such meeting to another time and place. Notice of the time and place of any such adjourned meeting shall be given to all of the Directors unless such time and place were announced at the meeting at which the adjournment was taken, in which case such notice shall only be given to the Directors who were not present thereat. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally call ed. The Directors shall act only as a Board and the individual Directors shall have no power as such.

SECTION 12. Organization. At each meeting of the Board of Directors, the Chairman of the Board, if one shall have been elected, or, in the absence of the Chairman of the Board or if one shall not have been elected, the President (or, in his absence, another director chosen by a majority of the Directors present) shall act as chairman of the meeting and preside thereat. The Secretary or, in his absence, any person appointed by the chairman shall act as secretary of the meeting and keep the minutes thereof.

SECTION 13. Resignations. Any director of the Corporation may resign at any time by giving written notice of his resignation to the Corporation. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

SECTION 14. Vacancies. Any vacancy in the Board of Directors, whether arising from death, resignation, removal (with or without cause), an increase in the number of Directors or any other cause, may be filled by the vote of a majority of the Directors then in office, though less than a quorum, or by the sole remaining Director or by the stockholders at the next annual meeting thereof or at a special meeting thereof. Each director so elected shall hold office in the same class of his predecessor until his successor shall have been elected and qualified.

SECTION 15. Removal of Directors. Any Director may be removed for cause, at any time, by the holders of a majority of the voting power of the issued and outstanding capital stock of the Corporation entitled to vote at an election of Directors. For purposes of this section ''cause'' shall be deemed to include without limitation the termination of a Director's employment with the Company provided that the Director was an employee of the Company at the time of his or her most recent election to the Board.

SECTION 16. Compensation. The Board of Directors shall have authority to fix the compensation, including fees and reimbursement of expenses, of Directors for services to the Corporation in any capacity.

SECTION 17. Committees. The Board of Directors may, by resolution passed by a majority of the entire Board of Directors, designate one or more committees, including an executive committee, each committee to consist of one or more of the Directors of the Corporation. The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In addition, in the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

Except to the extent restricted by statute or the Certificate of Incorporation, each such committee, to the extent provided in the resolution creating it, shall have and may exercise all the powers and authority of the Board of Directors and may authorize the seal of the Corporation to be affixed to all papers which require it. Each such committee shall serve at the pleasure of the Board of Directors and have such name as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors.

SECTION 18. Action by Consent. Unless restricted by the Certificate of Incorporation, any action required or permitted to be taken by the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board of Directors or such committee, as the case may be.

SECTION 19. Telephonic Meeting. Unless restricted by the Certificate of Incorporation, any one or more members of the Board of Directors or any committee thereof may participate in a meeting of the Board of Directors or such committee by a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting.

ARTICLE IV

Officers

SECTION 1. Number and Qualifications. The officers of the Corporation shall be elected by the Board of Directors and shall include the President, one or more vice-presidents, the Secretary and the Treasurer. If the Board of Directors wishes, it may also elect as an officer of the Corporation a Chairman of the Board and may elect other officers (including one or more Assistant Treasurers and one or more Assistant Secretaries) as may be necessary or desirable for the business of the Corporation. Any two or more offices may be held by the same person, and no officer except the Chairman of the Board need be a director. Each officer shall hold office until his successor shall have been duly elected and shall have qualified, or until his death, or until he shall have resigned or have been removed, as hereinafter provided in these By-Laws.

SECTION 2. Resignations. Any officer of the Corporation may resign at any time by giving written notice of his resignation to the Corporation. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon receipt. Unless otherwise specified therein, the acceptance of any such resignation shall not be necessary to make it effective.

SECTION 3. Removal. Any officer of the Corporation may be removed, either with or without cause, at any time, by the Board of Directors at any meeting thereof.

SECTION 4. Chairman of the Board. The Chairman of the Board, if one shall have been elected, shall be a member of the Board, an officer of the Corporation and, if present, shall preside at each meeting of the Board of Directors or the stockholders. He shall advise and counsel with the President, and in his absence with other executives of the Corporation, and shall perform such other duties as may from time to time be assigned to him by the Board of Directors.

SECTION 5. The President. The President shall be the chief executive officer of the Corporation. He shall, in the absence of the Chairman of the Board or if a Chairman of the Board shall not have been elected, preside at each meeting of the Board of Directors or the stockholders. He shall perform all duties incident to the office of President and chief executive officer and such other duties as may from time to time be assigned to him by the Board of Directors.

SECTION 6. Vice-President. Each Vice-President shall perform all such duties as from time to time may be assigned to him by the Board of Directors or the President. At the request of the President or in his absence or in the event of his inability or refusal to act, the Vice-President, or if there shall be more than one, the Vice-Presidents in the order determined by the Board of Directors (or if there be no such determination, then the Vice-Presidents in the order of their election), shall perform the duties of the President, and, when so acting, shall have the powers of and be subject to the restrictions placed upon the President in respect of the performance of such duties.

SECTION 7. Treasurer. The Treasurer shall

    (a) have charge and custody of, and be responsible for, all the funds and securities of the Corporation;

    (b) keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation;

    (c) deposit all moneys and other valuables to the credit of the Corporation in such depositories as may be designated by the Board of Directors or pursuant to its direction;

    (d) receive, and give receipts for, moneys due and payable to the Corporation from any source whatsoever;

    (e) disburse the funds of the Corporation and supervise the investments of its funds, taking proper vouchers therefor;

    (f) render to the Board of Directors, whenever the Board of Directors may require, an account of the financial condition of the Corporation; and

    (g) in general, perform all duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board of Directors.

SECTION 8. Secretary. The Secretary shall

    (a) keep or cause to be kept in one or more books provided for the purpose, the minutes of all meetings of the Board of Directors, the committees of the Board of Directors and the stockholders;

    (b) see that all notices are duly given in accordance with the provisions of these By-Laws and as required by law;

    (c) be custodian of the records and the seal of the Corporation and affix and attest the seal to all certificates for shares of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal;

    (d) see that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and

    (e) in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors.

SECTION 9. The Assistant Treasurer. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as from time to time may be assigned by the Board of Directors.

SECTION 10. The Assistant Secretary. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties as from time to time may be assigned by the Board of Directors.

SECTION 11. Officers' Bonds or Other Security. If required by the Board of Directors, any officer of the Corporation shall give a bond or other security for the faithful performance of his duties, in such amount and with such surety as the Board of Directors may require.

SECTION 12. Compensation. The compensation of the officers of the corporation for their services as such officers shall be fixed from time to time by the Board of Directors. An officer of the Corporation shall not be prevented from receiving compensation by reason of the fact that he is also a director of the corporation.

ARTICLE V

Stock Certificates and Their Transfer

SECTION 1. Stock Certificates. Every holder of stock in the Corporation shall be entitled to have a certificate, signed by, or in the name of the Corporation by, the Chairman of the Board or the President or a Vice-President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the corporation. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restriction of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the General Corporation Law of the State of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, a statement that the Corporation will furnish without charge to each stockholder who so requests the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

SECTION 2. Facsimile Signatures. Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to .be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

SECTION 3. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct sufficient to indemnify it against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

SECTION 4. Transfers of Stock. Upon surrender to the corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its records; provided, however, that the Corporation shall be entitled to recognize and enforce any lawful restriction on transfer. Whenever any transfer of stock shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so.

SECTION 5. Transfer Agents and Registrars. The Board of Directors may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars.

SECTION 6. Regulations. The Board of Directors may make such additional rules and regulations, not inconsistent with these By-Laws, as it may deem expedient concerning the issue, transfer and registration of certificates for shares of stock of the Corporation.

SECTION 7. Fixing the Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

SECTION 8. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its records as the owner of shares of stock to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments a person registered on its records as the owner of shares of stock, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares of stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VI

Indemnification of Directors and Officers

SECTION 1. General. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys, fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his con duct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contenders or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

SECTION 2. Derivative Actions. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys, fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, provided that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless an d only to the extent that the court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court of Chancery or such other court shall deem proper.

SECTION 3. Indemnification in Certain Cases. To the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article VI, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith.

SECTION 4. Procedure. Any indemnification under Sections 1 and 2 of this Article VI (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in such Sections 1 and 2. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested Directors So directs, by independent legal counsel in a written opinion, or (c) by the stockholders.

SECTION 5. Advances for Expenses. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall be ultimately determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VI.

SECTION 6. Rights Not-Exclusive. The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any law, by-law, agreement, vote of stockholders or disinterested Directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.

SECTION 7. Insurance. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article VI.

SECTION 8. Definition of Corporation. For the purposes of this Article VI, references to "the Corporation" include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this Article VI with respect to the resulting or surviving corporation as he would if he had served the resulting or surviving corporation in the same capacity.

SECTION 9. Survival of Rights. The indemnification and advancement of expenses provided by or granted pursuant to this Article VI shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

ARTICLE VII

General Provisions

SECTION 1. Dividends. Subject to the provisions of statute and the Certificate of Incorporation, dividends upon the shares of capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting. Dividends may be paid in cash, in property or in shares of stock of the Corporation, unless otherwise provided by statute or the Certificate of Incorporation.

SECTION 2. Reserves. Before payment of any dividend ' there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors may, from time to time, in its absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors may think conducive to the interests of the Corporation. The Board of Directors may modify or abolish any such reserves in the manner in which it was created.

SECTION 3. Seal. The seal of the Corporation shall be in such form as shall be approved by the Board of Directors.

SECTION 4. Fiscal Year. The fiscal year of the Corporation shall be fixed, and once fixed, may thereafter be changed, by resolution of the Board of Directors.

SECTION 5. Checks, Notes, Drafts, Etc. All checks, notes, drafts or other orders for the payment of money of the Corporation shall be signed, endorsed or accepted in the name of the Corporation by such officer, officers, person or persons as from time to time may be designated by the Board of Directors or by an officer or officers authorized by the Board of Directors to make such designation.

SECTION 6. Execution of Contracts, Deeds, Etc. The Board of Directors may authorize any officer or officers, agent or agents, in the name and on behalf of the Corporation to enter into or execute and deliver any and all deeds, bonds, mortgages, contracts and other obligations or instruments, and such authority may be general or confined to specific instances.

SECTION 7. Voting of Stock in Other Corporations. Unless otherwise provided by resolution of the Board of Directors, the Chairman of the Board or the President, from time to time, may (or may appoint one or more attorneys or agents to) cast the votes which the Corporation may be entitled to cast as a shareholder or otherwise in any other corporation, any of whose shares or securities may be held by the Corporation, at meetings of the holders of the shares or other securities of such other corporation. In the event one or more attorneys or agents are appointed, the Chairman of the Board or the President may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent. The Chairman of the Board or the president may, or may instruct the attorneys or agents appointed to, execute or cause to be executed in the name and on behalf of the Corporation and under its seal or otherwise, such written proxies, consents, waivers or other instruments as may be necessary or proper in the circumstances.

ARTICLE VIII

Amendments

These By-Laws may be amended or repealed or new by-laws adopted (a) by action of the stockholders entitled to vote thereon at any annual or special meeting of stockholders or (b) if the Certificate of Incorporation so provides, by action of the Board of Directors at a regular or special meeting thereof. Any by-law made by the Board of Directors may be amended or repealed by action of the stockholders at any annual or special meeting of stockholders.