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                           CELESTIAL SEASONINGS, INC.

                             STOCK OPTION AGREEMENT


            Agreement made as of the 16th day of June, 1997, between Celestial
Seasonings, Inc., a Delaware corporation (the "Company"), and Stephen B. Hughes
("Grantee").

            i.          Grant of Option.  The Company hereby grants to Grantee,
                  as of the date of grant specified above, a nonqualified option
                  to purchase 165,000 shares of common stock, par value $0.01
                  per share (the "Common Stock"), of the Company (which number
                  of shares may be adjusted pursuant to Paragraph 5 below) at
                  $21.50 per share, subject to the terms and conditions set
                  forth herein.

            ii.         Exercise of Option.  Subject to the earlier termination
                  of the option as provided herein, the option may be exercised,
                  by written notice to the Company in the form attached as
                  Exhibit A hereto, at any time and from time to time after the
                  date of grant; provided however, unless a Change in Control
                  (as defined in Section 5) occurs, such option shall not be
                  exercisable for more than the sum of ( i) 20% of the aggregate
                  number of shares covered by this option multiplied by the
                  number of full years from the date of grant thereof to the
                  date of such exercise, in accordance with the following
                  schedule, plus (ii) the product of 1 % multiplied by the
                  number of full months from the most recent one-year
                  anniversary of the date of grant until the date of exercise
                  (the "Monthly Vesting Percentage") multiplied by the total
                  number of shares covered by this option.  For example, if the
                  date of grant is July 19, 1993 and the date of exercise is
                  between January 19, 1995 and February 18, 1995, the option may
                  be exercised for 30% of the total number of shares covered
                  hereby.

                                              Cumulative Percentage
  Completed Years                              of Shares That May
 From Date of Grant                              Be Exercisable    

 1 but less than 2 years           20% plus Monthly Vesting Percentage
 2 but less than 3 years           40% plus Monthly Vesting Percentage

 3 but less than 4 years           60% plus Monthly Vesting Percentage

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 4 but less than 5 years           80% plus Monthly Vesting Percentage
 5 or more years                   100%

An option shall not be exercisable in any event after the expiration of ten
years from the date of grant.  An option may not be exercised for a fraction of
a share of Common Stock

            iii.        Conditions to Exercise.  The option may not be exercised
                  by Grantee unless all of the following conditions are met:

                              (i)         Legal counsel for the Company must be
                                    satisfied at the time of exercise that the
                                    issuance of shares of Common Stock upon
                                    exercise will be in compliance with the
                                    Securities Act of 1933, as amended (the
                                    "Act") and applicable United States federal,
                                    state, local and foreign laws;

                              (ii)        Grantee must pay at the time of
                                    exercise the full purchase price for the
                                    shares of Common Stock being acquired
                                    hereunder, by (i) paying in United States
                                    dollars by cash, (ii) tendering shares of
                                    Common Stock owned by Grantee which have a
                                    fair market value equal to the full purchase
                                    price for the shares of Common Stock being
                                    acquired, such fair market value to be
                                    determined in such reasonable manner as may
                                    be provided from time to time by the Company
                                    or as may be required in order to comply
                                    with or conform to the requirements of any
                                    applicable or relevant laws or regulations,
                                    (iii) paying in such other form as the
                                    Company may determine in its sole
                                    discretion, or (iv) tendering a combination
                                    of the forms of payment provided for in
                                    Subparagraphs 3(b)(i) through 3(b)(iii)
                                    above; and

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                              (iii)       Grantee must, at all times during the
                                    period beginning with the grant date of the
                                    option and ending on the date of such
                                    exercise, have been employed by the Company,
                                    except (i) if Grantee ceases to be an
                                    employee by reason of Grantee's disability
                                    or early, normal or deferred retirement or
                                    resignation, Grantee may, at any time within
                                    one year of the date of the onset of such
                                    disability or retirement (but in no event
                                    after the expiration of ten years from the
                                    grant date) exercise the option with respect
                                    to the number of shares, determined under
                                    Paragraph 2 above, as to which Grantee could
                                    have exercised the option on the date of the
                                    onset of such disability or retirement or
                                    with respect to such greater number of
                                    shares as determined by the Company in its
                                    sole discretion, and any remaining portion
                                    of the option shall be cancelled by the
                                    Company, (ii) if Grantee ceases to be an
                                    employee by reason of death, the provisions
                                    of Paragraph 4 shall apply, (iii) if
                                    Grantee's employment is terminated for any
                                    other reason (including termination by the
                                    Company for reasons other than death as
                                    described in Paragraph 4 or disability,
                                    retirement or resignation as described
                                    above), Grantee may, at any time within
                                    ninety days of the date of such termination
                                    (but in no event after the expiration of ten
                                    years from the grant date) exercise the
                                    option with respect to the number of shares,
                                    determined under Paragraph 2 above, as to
                                    which Grantee could have exercised the
                                    option on the date of such termination or
                                    with respect to such greater number of
                                    shares as determined by the Company in its
                                    sole discretion, and any remaining portion
                                    of the option shall be cancelled by the
                                    Company.

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            iv.         Transferability.  The option may not be sold, assigned,
                  transferred, pledged, hypothecated or otherwise disposed of by
                  Grantee, except by will or the laws of descent and
                  distribution and is exercisable during Grantee's lifetime only
                  by Grantee.  If Grantee or anyone claiming under or through
                  Grantee attempts to violate this Paragraph 4, such attempt
                  shall be null and void and without effect, and the Company's
                  obligation to make any further payments (stock or cash)
                  hereunder shall terminate.  If at the time of Grantee's death
                  the option has not been fully exercised, Grantee's estate or
                  any person who acquires the right to exercise the option by
                  bequest or inheritance or by reason of Grantee's death may, at
                  any time within fifteen months after the date of Grantee's
                  death (but in no event after the expiration of ten years from
                  the grant date), exercise the option with respect to the
                  number of shares, determined under Paragraph 2 above, as to
                  which Grantee could have exercised the option at the time of
                  Grantee's death, or with respect to such greater number of
                  shares as determined by the Company in its sole discretion. 
                  The applicable requirements of Paragraph 3 above must be
                  satisfied at the time of such exercise.

            v.          Adjustments.  In the event of any change in the number
                  of shares of Common Stock outstanding by reason of any stock
                  split, stock dividend, split-up, split-off, spin-off,
                  recapitalization, merger, consolidation, rights offering,
                  reorganization, combination or exchange of shares, sale by the
                  Company of all or part of its assets, distribution to
                  shareholders other than a normal cash dividend, or other
                  extraordinary or unusual event occurring after the grant date
                  specified above and prior to its exercise in full, the number
                  and kind of shares of Common Stock or other property for which
                  the option may then be exercised and the option price per
                  share may or may not be adjusted so as to reflect such change,
                  all as determined by the Company in its sole discretion.  In
                  the event of the proposed dissolution or liquidation of the
                  Company, the option shall terminate immediately prior to the
                  consummation of such proposed action, unless otherwise
                  provided by the Company.  In the event of a Change in Control,
                  all restrictions on the option shall lapse and Grantee shall
                  be entitled to the full benefit of the option immediately
                  prior to the closing of such Change in Control, and the option
                  shall terminate upon consummation of the Change in Control,
                  unless otherwise provided by the Company.  For purposes of
                  this Agreement, a Change in Control shall mean a sale of all
                  or substantially all of the assets of the Company, or the
                  merger of the Company into another corporation.

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            vi.         Withholding of Tax.  It shall be a condition to the
                  obligation of the Company to furnish shares of Common Stock
                  upon exercise of an option (i) that Grantee (or any person
                  acting under Paragraph 4 above) pay to the Company or its
                  designee, upon its demand, such amount as may be demanded for
                  the purpose of satisfying the Company's obligation to withhold
                  federal, state, local or foreign income, employment or other
                  taxes incurred by reason of the exercise of the option or the
                  transfer of shares thereupon, and (ii) that Grantee (or any
                  person acting under Paragraph 4 above) provide the Company
                  with any forms, documents or other information reasonably
                  required by the Company in connection with the grant.  If the
                  amount requested for the purpose of satisfying the withholding
                  obligation is not paid, the Company may refuse to furnish
                  shares of Common Stock upon exercise of the option.

            vii.        Amendment or Substitution of Awards.  The terms of this
                  Agreement may be amended from time to time by the Company in
                  its sole discretion in any manner that it deems appropriate
                  (including, but not limited to, acceleration of the vesting
                  provisions of the option in Paragraph 2); provided, however,
                  that no such amendment shall adversely affect in a material
                  manner any right of Grantee under this Agreement without
                  Grantee's written consent, unless the Company determines in
                  its sole discretion that there have occurred or are about to
                  occur significant changes in Grantee's position, duties or
                  responsibilities or significant changes in economic,
                  legislative, regulatory, tax, accounting or cost/benefit
                  conditions which are determined by the Company in its sole
                  discretion to have or to be expected to have a substantial
                  effect on the performance of the Company, or any subsidiary,
                  affiliates, division, or department thereof.   The Company
                  may, in its sole discretion, permit Grantee to surrender this
                  grant in order to exercise or realize the rights under other
                  awards, or in exchange for the grant of new awards, or require
                  Grantee to surrender this grant as a condition precedent to
                  the grant of new awards.

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            viii.       Administration.  Any action taken or decision made by
                  the Company's board of directors or the compensation committee
                  of the board or their delegates arising out of or in
                  connection with the construction, administration,
                  interpretation or effect of the Agreement shall lie within its
                  sole and absolute discretion, as the case may be, and shall be
                  final, conclusive and binding on Grantee and all persons
                  claiming under or through Grantee.

            ix.         No Rights as Stockholder.  Unless and until a
                  certificate or certificates representing such shares of Common
                  Stock shall have been issued to Grantee (or any person acting
                  under Paragraph 4 above), Grantee shall not be or have any of
                  the rights or privileges of a stockholder of the Company with
                  respect to shares of Common Stock acquirable upon exercise of
                  the option.  No adjustment shall be made for dividends
                  (ordinary or extraordinary, whether in cash, securities or
                  other property) or distributions or other rights for which the
                  record date is prior to the date such stock certificate is
                  issued to Grantee.

            x.          Investment Representation.  Grantee hereby acknowledges
                  that the shares of Common Stock which Grantee may acquire by
                  exercising the option shall be acquired for investment without
                  a view to distribution, within the meaning of the Act, and
                  shall not be sold, transferred, assigned, pledged or
                  hypothecated in the absence of an effective registration
                  statement for the shares under the Act and applicable state
                  securities laws or an applicable exemption from the
                  registration requirements of the Act and any applicable state
                  securities laws.  Grantee also agrees that the shares of
                  Common Stock which Grantee may acquire by exercising the
                  option will not be sold or otherwise disposed of in any manner
                  which would constitute a violation of any applicable
                  securities laws, whether federal or state.

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            xi.         Registration of Common Stock.  The Company, in its
                  discretion, may postpone the issuance and/or delivery of
                  shares of Common Stock upon any exercise of the option until
                  completion of such registration or other qualification of such
                  shares under any state and/or federal law, rule or regulation
                  as the Company may consider appropriate.

            xii.        Rights of Participants. Neither this Agreement nor the
                  grant of options creates any employment rights in Grantee and
                  the Company shall have no liability for terminating Grantee's
                  employment. Grantee shall have no rights under this Agreement
                  other than as an unsecured general creditor of the Company
                  except that insofar as Grantee may have become entitled to
                  payment of additional compensation by performance of services,
                  Grantee shall have the same rights as other employees under
                  general law.

            xiii.       Notices.  Any notice hereunder to the Company shall be
                  addressed to:  Celestial Seasonings, Inc., 4600 Sleepytime
                  Drive, Boulder, Colorado 80301, Attention:  Secretary, and any
                  notice hereunder to Grantee shall be addressed to Grantee at
                  Grantee's last address on the records of the Company, subject
                  to the right of either party to designate at any time
                  hereafter in writing some other address.  Any notice shall be
                  deemed to have been duly given when delivered personally, by
                  facsimile (receipt verified) or enclosed in a properly sealed
                  envelope, addressed as set forth above, and deposited (with
                  first class postage prepaid) in the United States mail.

            xiv.        Counterparts.  This Agreement may be executed in one or
                  several counterparts, each of which shall constitute one and
                  the same instrument.

            xv.         Binding Effect.  This Agreement shall be binding upon
                  and inure to the benefit of any successors to the Company and
                  all persons lawfully claiming under Grantee.

            xvi.        Governing Law.  The validity, construction,
                  interpretation, administration and effect of this Agreement,
                  shall be governed by the substantive laws, but not the choice
                  of law rules, of the State of Colorado.

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            IN WITNESS WHEREOF, the Company and Grantee have executed this
Agreement as of the date first above written.

CELESTIAL SEASONINGS, INC.



By: ___________________________
    
    



GRANTEE


                                         ______________________________
                                         Stephen B. Hughes

                                         ______________________________
                                         Social Security Number


24461
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                                    EXHIBIT A

                          Form of Letter to be Used on
                            Exercise of Stock Option


                                 _______________
                                            Date

Celestial Seasonings, Inc.
4600 Sleepytime Drive
Boulder, Colorado  80301

Attention: Secretary

Dear Sir:

            I wish to exercise the stock option granted on June __, 1997 and
evidenced by my Option Agreement dated as of June __, 1997 to the extent of
________ shares of the Common Stock of Celestial Seasonings, Inc., at the option
price of $___ per share.  My check in the amount of $________ in payment of the
entire purchase price for these shares accompanies this letter.

            Please issue a certificate for these shares in the following name:

            ___________________________________
                        Name

            ___________________________________
                        Street Address

            ___________________________________
                        City/State/Zip

Very truly yours,


___________________________________
Stephen B. Hughes

___________________________________
Social Security Number
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