Exhibit 10.17
KNOLL, INC.
1996 STOCK INCENTIVE PLAN
(Amended and Restated as of November 4, 1999)
ARTICLE I
Purpose
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The Knoll, Inc. 1996 Stock Incentive Plan (Amended and Restated as of
November 4, 1999) (the "Plan") is intended as an incentive to encourage stock
ownership by officers and certain other key employees of Knoll, Inc. (the
"Company") in order to increase their proprietary interest in the Company's
success and to encourage them to remain in the employ of the Company.
The term "Company," when used in the Plan or a related Restricted
Share agreement or option agreement with reference to eligibility and
employment, shall include the Company and its subsidiaries. The word
"subsidiary," when used in the Plan, shall mean any subsidiary of the Company
within the meaning of Section 424(f) of the Internal Revenue Code of 1986, as
amended (the "Code").
It is intended that certain options granted under this Plan will
qualify as "incentive stock options" under Section 422 of the Code.
ARTICLE II
Administration
--------------
The Plan shall be administered by a Committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board") and shall
consist of not less than two members. During any such time that the Company
is subject to Section 16(b) of the Securities Exchange Act of 1934 (the
"Exchange Act") each member of the Committee shall, unless otherwise
determined by the Board, be a "Non-Employee Director" within the meaning of
the rules promulgated under Section 16(b) and during any such time that the
Company is subject to Section 162(m) of the Code each member of the Committee
shall, unless otherwise determined by the Board, be an "outside director"
within the meaning of Section 162(m) of the Code. Subject to the provisions
of the Plan, the Committee shall have sole authority, in its absolute
discretion: (a) to determine which of the eligible employees of the Company
shall be granted shares of restricted stock ("Restricted Shares") and which
shall be granted options; (b) to make grants of Restricted Shares, incentive
stock options and nonqualified options to acquire Common Stock; (c) to
determine the times when Restricted Shares and options shall be granted and
the number of shares to be granted or optioned; (d) to determine the option
price of the shares subject to each option,
which price shall be not less than the minimum specified in ARTICLE VII; (e) to
determine the nature of any rights and restrictions to be imposed on Restricted
Shares granted under the Plan; (f) to determine the time or times when each
option becomes exercisable, the duration of the exercise period and any other
restrictions on the exercise of options issued hereunder; (g) to prescribe the
form or forms of agreements for Restricted Shares granted under the Plan and
the form or forms of the option agreements for options granted under the Plan
(which forms shall be consistent with the terms of the Plan but need not be
identical); (h) to adopt, amend and rescind such rules and regulations as, in
its opinion, may be advisable in the administration of the Plan; and (i) to
construe and interpret the Plan, the rules and regulations, the Restricted
Share agreements and the option agreements under the Plan and to make all other
determinations deemed necessary or advisable for the administration of the
Plan. All decisions, determinations and interpretations of the Committee shall
be final and binding on all grantees and optionees.
ARTICLE III
Stock
-----
The stock to be granted or optioned under the Plan shall be shares of
authorized but unissued Common Stock of the Company, par value $.01 per share,
or previously issued shares of Common Stock reacquired by the Company (the
"Stock"). Under the Plan, the total number of shares of Stock which may be
granted or purchased pursuant to options granted hereunder shall not exceed,
in the aggregate, 1,500,000 shares, except as such number of shares shall be
adjusted in accordance with the provisions of ARTICLE XII hereof.
The number of shares of Stock available for issuance or grant of
options under the Plan shall be decreased by the sum of (i) the number of
Restricted Shares which are granted and then outstanding, (ii) the number of
shares with respect to which options have been issued and are then outstanding
and (iii) the number of shares issued upon exercise of options. In the event
that any Restricted Shares are forfeited or that any outstanding option under
the Plan for any reason expires, is terminated or is canceled without exercise
prior to the end of the period during which options may be granted, the
Restricted Shares so forfeited and the shares of Stock called for by the
unexercised portion of such option shall again be available for grant or
issuance under the Plan.
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ARTICLE IV
Eligibility of Participants
---------------------------
Subject to ARTICLE IX in the case of incentive stock options, officers
and other key employees of the Company (excluding any person who is a member of
the Committee) shall be eligible to receive Restricted Shares and options under
the Plan. In addition, options which are not incentive stock options may be
granted to directors, consultants or other key persons (excluding any person
who is a member of the Committee) who the Committee determines shall receive
options under the Plan.
As of any grant date which is prior to the occurrence of an initial
public offering of the Stock ("IPO"), it shall be a condition to the grant of
Restricted Shares or options under the Plan that the grantee or optionee
execute a Joinder Agreement in the form attached to the Knoll, Inc. Amended and
Restated Stockholders Agreement (Common Stock Under Stock Incentive Plans) (the
"Stockholders Agreement") agreeing to be bound by the terms of such Agreement.
ARTICLE V
Fair Market Value
-----------------
"Fair Market Value" means, (1) as of any date prior to an IPO, the
Fair Market Value of the Company's Stock on such date, as determined by the
Board in good faith, and (2) at the time of an IPO, the per share price to the
public in such IPO, less any underwriting discount, multiplied by the number of
shares of Stock issued and outstanding immediately prior to the time such IPO
occurs.
"Fair Market Value Per Share" means (1) prior to an IPO, the Fair
Market Value per share of Stock, determined on a Fully Diluted Basis, (2) at
the time of an IPO, the per share price to the public in such IPO less any per
share underwriting discount, and (3) after an IPO, as of any date when the
Stock is quoted on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") National Market System ("NMS") or listed on one or
more national securities exchanges, the closing price reported on NASDAQ-NMS
or the principal national securities exchange on which such Stock is listed and
traded on the date of determination. If, after an IPO, the Stock is not
quoted on NASDAQ-NMS or listed on an exchange, or representative quotes are
not otherwise available, the Fair Market Value Per Share shall mean the amount
determined by the Board in good faith to be the fair market value per share of
Stock.
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"Fully Diluted Basis" means, with regard to determining Fair Market
Value Per Share, the amount determined by dividing (1) the sum of (i) the Fair
Market Value as of the date of determination, plus (ii) the exercise or
conversion price, if any, associated with any dilutive options, warrants or
other securities which could be exchanged for Stock, by (2) the sum of (i) the
total number of shares of Stock outstanding, plus (ii) the number of shares of
Stock subject to such dilutive options, warrants or other securities.
ARTICLE VI
Terms and Conditions of Restricted Shares
-----------------------------------------
Restricted Shares will become unrestricted and vest only in accordance
with a vesting period set by the Committee with respect to each grant of
Restricted Shares (the "Restriction Period"). The Committee may provide in
the Restricted Share Agreement for acceleration of the Restriction Period and
accelerated vesting upon termination of the grantee's employment by reason of
death or disability, or by the Company without Cause, or upon any other event
for which the Committee determines, in its discretion, that such acceleration
is appropriate. With respect to each grant of Restricted Shares, "Cause" shall
have the meaning given such term in a grantee's Restricted Share Agreement.
During the Restriction Period, Restricted Shares shall constitute
issued and outstanding shares of Stock for all corporate purposes but unless
and until such Restricted Shares shall have become vested (i.e., the date at
which such shares shall not be subject to forfeiture) (a) the Company shall
retain custody of the stock certificate or certificates representing such
shares, (b) the Company will retain custody of all dividends and distributions
("Retained Distributions") made or declared thereon (and such Retained
Distributions shall be subject to the same restrictions, terms and vesting and
other conditions as are applicable to the Restricted Shares) until such time,
if ever, as the Restricted Shares with respect to which such Retained
Distributions shall have been made, paid or declared shall have become vested,
and such Retained Distributions shall not bear interest or be segregated in a
separate account; provided, however, that in the event such retained dividends
or distributions are taxable to the grantee in the year of payment,
notwithstanding their failure to have become vested by the date of payment,
the Company shall arrange for the release to the grantee of such part of the
retained dividiends or distributions as are sufficient to cover the taxes
payable by the grantee with respect thereto; (c) the grantee of such Restricted
Shares shall not be entitled to vote such shares, and (d) except as otherwise
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permitted by the Stockholders Agreement, the grantee of such Restricted Shares
may not, whether voluntarily or involuntarily, sell, assign, transfer, pledge,
exchange, encumber or dispose of the Restricted Shares or any Retained
Distributions thereon or his interest in any of them (it being understood that,
except to the extent so permitted, any sale, assignment, transfer, pledge,
exchange, or disposition (i) before the shares shall have become vested shall
be null and void and of no effect and (ii) after the shares shall have become
vested shall only be as permitted under the terms of the Stockholders
Agreement). Except as set forth in any applicable Restricted Share Agreement,
any Restricted Shares which have not vested as of, or by reason of, a grantee's
termination of employment shall be immediately forfeited to the Company and the
grantee and any permitted transferee shall have no further rights in respect of
such forfeited shares.
With respect to Restricted Shares which have become vested pursuant to
the provisions of the Restricted Share Agreement, the Company shall promptly
deliver the Stock certificate or certificates representing such shares to the
grantee, registered in the name of the grantee. The Company may endorse such
legends on such certificates as may be required by law or under the terms of
this Agreement, the Restricted Share Agreement or the Stockholders Agreement.
ARTICLE VII
Option Exercise Price
---------------------
Subject to ARTICLE IX in the case of incentive stock options, (i) in
the case of each option granted under the Plan which is not an incentive stock
option, the option exercise price shall be not less than the Fair Market Value
Per Share at the time the option was granted and (ii) in the case of each
option granted under the Plan which is an incentive stock option, the option
exercise price shall not be less than the Fair Market Value Per Share at the
time the option is granted.
ARTICLE VIII
Exercise and Terms of Options
-----------------------------
The Committee shall determine the dates after which options may be
exercised, in whole or in part. If an option is exercisable in installments,
installments or portions thereof which are exercisable and not exercised
shall remain exercisable.
Any other provision of the Plan to the contrary notwithstanding, but
subject to ARTICLE IX in the case of incentive
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stock options, no option shall be exercised after the date ten years from the
date of grant of such option (the "Termination Date").
Options shall become exercisable only in accordance with the exercise
schedule set forth in the option agreement entered into with respect to each
grant of options (the "Option Agreement"). The Committee may provide in the
Option Agreement for acceleration of exercisability upon termination of the
optionee's employment by reason of death, disability, or by the Company without
Cause, or upon any other event for which the Committee determines, in its
discretion, that such acceleration is appropriate, including a change in
control of the Company. With respect to each grant of options, "Cause" shall
have the meaning given such term in the optionee's Option Agreement.
Notwithstanding the foregoing provisions of this ARTICLE VIII or the
terms of any option agreement, the Committee may in its sole discretion
accelerate the exercisability of any option granted hereunder. Any such
acceleration shall not affect the terms and conditions of any such option other
than with respect to exercisability.
ARTICLE IX
Special Provisions Applicable
to Incentive Stock Options Only
-------------------------------
To the extent the aggregate Fair Market Value Per Share (determined as
of the time the option is granted in accordance with Article V) with respect
to which any options granted hereunder which are intended to be incentive
stock options may be exercisable for the first time by the optionee in any
calendar year (under this Plan or any other stock option plan of the Company
or any parent or subsidiary thereof) exceeds $100,000, such options shall not
be considered incentive stock options.
No incentive stock option may be granted to an individual who, at the
time the option is granted, owns directly, or indirectly within the meaning of
Section 424(d) of the Code, stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or of any parent
or subsidiary thereof, unless such option (i) has an option price of at least
110 percent of the Fair Market Value Per Share on the date of the grant of such
option; and (ii) cannot be exercised more than five years after the date it is
granted.
Each optionee who receives an incentive stock option must agree to
notify the Company in writing immediately after the optionee makes a
disqualifying disposition of any Stock acquired
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pursuant to the exercise of an incentive stock option. A disqualifying
disposition is any disposition (including any sale) of such Stock made within
the period which is (a) two years after the date the optionee was granted the
incentive stock option or (b) one year after the date the optionee acquired
Stock by exercising the incentive stock option.
ARTICLE X
Payment for Shares
------------------
Payment for shares of Stock purchased under an option granted hereunder
shall be made in full upon exercise of the option, by certified or bank
cashier's check payable to the order of the Company or by any other means
acceptable to the Company. The Committee, in its discretion, may allow an
optionee to pay such exercise price by having the Company withhold shares of
Stock being purchased having an aggregate Fair Market Value equal to the amount
of such exercise price.
ARTICLE XI
Non-Transferability of Option Rights
------------------------------------
No option shall be transferable except by will or the laws of descent
and distribution. During the lifetime of the optionee, the option shall be
exercisable only by him. The Committee may, however, in its sole discretion,
allow for transfer of options which are not incentive stock options to other
persons or entities, subject to such conditions or limitations as it may
establish.
ARTICLE XII
Adjustment for Recapitalization, Merger, etc.
---------------------------------------------
The aggregate number of shares of Stock which may be granted or
purchased pursuant to options granted hereunder, the number of shares of Stock
covered by each outstanding option and the price per share thereof in each
such option shall be appropriately adjusted for any increase or decrease in the
number of outstanding shares of stock resulting from a stock split or other
subdivision or consolidation of shares of Stock or for other capital
adjustments or payments of stock dividends or distributions or other increases
or decreases in the outstanding shares of Stock without receipt of
consideration by the Company. Any adjustment shall be conclusively determined
by the Committee.
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In the event of any change in the outstanding shares of Stock by reason
of any recapitalization, merger, consolidation, spin-off, combination or
exchange of shares or other corporate change, or any distributions to common
shareholders other than cash dividends, the Committee shall make such
substitution or adjustment, if any, as it deems to be equitable, as to the
number or kind of shares of Stock or other securities issued or reserved for
issuance pursuant to the Plan, and the number or kind of shares of Stock or
other securities covered by outstanding options, and the option price thereof.
In instances where another corporation or other business entity is being
acquired by the Company, and the Company has assumed outstanding employee
option grants and/or the obligation to make future or potential grants under a
prior existing plan of the acquired entity, similar adjustments are permitted
at the discretion of the Committee.
The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its sole
discretion. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to an option.
ARTICLE XIII
No Obligation to Exercise Option
--------------------------------
The granting of an option shall impose no obligation on the recipient
to exercise such option.
ARTICLE XIV
Use of Proceeds
---------------
The proceeds received from the sale of Stock pursuant to the Plan shall
be used for general corporate purposes.
ARTICLE XV
Rights as a Stockholder
-----------------------
An optionee or a transferee of an option shall have no rights as a
stockholder with respect to any share covered by his option until he shall have
become the holder of record of such share, and he shall not be entitled to any
dividends or distributions or other rights in respect of such share for which
the record date is prior to the date on which he shall have become the holder
of record thereof.
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Notwithstanding anything herein to the contrary, the Committee, in its
sole discretion, may restrict the transferability of all or any number of
shares issued under the Plan upon the exercise of an option by lending the
stock certificate as it deems appropriate.
ARTICLE XVI
Employment Rights
-----------------
Nothing in the Plan or in any agreement related to options or
Restricted Shares granted hereunder shall confer on any optionee or grantee any
right to continue in the employ of the Company or any of its subsidiaries,
or to be evidence of any agreement or understanding, express or implied, that
the Company or any if its subsidiaries will employ the optionee or grantee in
any particular position or at any particular rate of remuneration, or for any
particular period of time, or to interfere in any way with the right of the
Company or any of its subsidiaries to terminate the optionee's employment at
any time.
ARTICLE XVII
Compliance with the Law
-----------------------
The Company is relieved from any liability for the nonissuance or
non-transfer or any delay in issuance or transfer of any shares of Stock
subject to options under the Plan which results from the inability of the
Company to obtain or any delay in obtaining from any regulatory body having
jurisdiction, all requisite authority to issue or transfer shares of Stock of
the Company either upon exercise of the options under the Plan or shares of
Stock issued as a result of such exercise, if counsel for the Company deems
such authority necessary for lawful issuance or transfer of any such shares.
Appropriate legends may be placed on the stock certificates evidencing shares
issued upon exercise of options to reflect such transfer restrictions.
Each option granted under the Plan is subject to the requirement that
if at any time the Committee determines, in its discretion, that the listing,
registration or qualification of shares of Stock issuable upon exercise of
options is required by any securities exchange or under any state or Federal
law, or that the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the grant of
options or the issuance of shares of Stock, no shares of Stock shall be issued,
in whole or in part, unless such listing, registration, qualification, consent
or approval has been effected
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or obtained free of any conditions or with such conditions as are acceptable
to the Committee.
ARTICLE XVIII
Cancellation of Options
-----------------------
The Committee, in its discretion, may, with the consent of any
optionee, cancel any outstanding option hereunder.
ARTICLE XIX
Effective Date and Expiration Date of Plan
------------------------------------------
The Plan is effective as of February 29, 1996, the date of adoption of
the Plan by the Company's Board, subject to approval by the stockholders of
the Company in a manner which complies with Section 422(b)(1) of the Code and
the Treasury Regulations thereunder. The expiration date of the Plan, after
which no option may be granted hereunder, shall be February 28, 2006.
ARTICLE XX
Amendment or Discontinuance of Plan
-----------------------------------
The Board may, without the consent of the Company's stockholders or
optionees under the Plan, at any time terminate the Plan entirely and at any
time or from time to time amend or modify the Plan, provided that no such
action shall adversely affect Restricted Shares or options theretofore granted
hereunder without the grantee's or optionee's consent, and provided further
that no such action by the Board, without approval of the stockholders, may
(a) increase the total number of shares of Stock which may be purchased
pursuant to options granted under the Plan, except as contemplated in Article
XII; (b) expand the class of employees eligible to receive options under the
Plan; (c) decrease the minimum option price; (d) extend the maximum term of
options granted hereunder, or (e) extend the term of the Plan.
ARTICLE XXI
Repurchase of Options
---------------------
In granting options hereunder, the Committee may in its discretion, and
on terms it considers appropriate, require an optionee, or the executors or
administrators of an optionee's
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estate, to sell back to the Company such options in the event such optionee's
employment with the Company is terminated.
ARTICLE XXII
Miscellaneous
-------------
(a) Grants of options and Restricted Shares shall be evidenced by
agreements (which need not be identical) in such forms as the Committee may
from time to time approve. Such agreements shall conform to the terms and
conditions of the Plan and may provide that the grant of any Restricted Share
or option under the Plan and Stock acquired upon the exercise of options shall
also be subject to such other conditions (whether or not applicable to any
other grantee or optionee) as the Committee determines appropriate, including,
without limitation, provisions to assist the Optionee in financing the purchase
of Stock through the exercise of options, provisions for the forfeiture of,
or restrictions on, resale or other disposition of shares under the Plan,
provisions giving the Company the right to repurchase shares acquired under
the Plan in the event the participant elects to dispose of such shares, and
provisions to comply with Federal and state securities laws and Federal and
state income tax withholding requirements.
(b) At such time that the delivery of shares of Stock to a grantee or
optionee becomes subject to tax withholding requirements, the Company may
require that the grantee or optionee pay to the Company such amount as the
Company deems necessary to satisfy its obligation to withhold Federal, state
or local income or other taxes. The Committee, in its discretion, may allow
the grantee or optionee to pay such amount by having the Company withhold
shares of Stock which would otherwise be delivered to such grantee or optionee
having an aggregate Fair Market Value equal to such amount.
(c) If the Committee shall find that any person to whom any amount is
payable under the Plan is unable to care for his affairs because of illness or
accident, or is a minor, or has died, then any payment due to such person or
his estate (unless a prior claim therefor has been made by a duly appointed
legal representative) may, if the Committee so directs the Company, be paid to
his spouse, child, relative, an institution maintaining or having custody of
such person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a
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complete discharge of the liability of the Committee and the Company therefor.
(d) No member of the Committee shall be personally liable by reason
of any contract or other instrument executed by such member or on his behalf
in his capacity as a member of the Committee nor for any mistake of judgment
made in good faith, and the Company shall indemnify and hold harmless each
member of the Committee and each other employee, officer or director of the
Company to whom any duty or power relating to the administration or
interpretation of the Plan may be allocated or delegated, against any cost or
expense (including counsel fees) or liability (including any sum paid in
settlement of a claim) arising out of any act or omission to act in connection
with the Plan unless arising out of such person's own fraud or bad faith;
provided, however, that approval of the Company's Board shall be required for
the payment of any amount in settlement of a claim against any such person.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Certificate of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.
(e) The Plan shall be governed by and construed in accordance with the
internal laws of the State of Delaware without reference to the principles of
conflicts of law thereof.
(f) No provision of the Plan shall require the Company, for the
purpose of satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which contributions are made
or otherwise to segregate any assets, nor shall the Company maintain separate
bank accounts, books, records or other evidence of the existence of a
segregated or separately maintained or administered fund for such purposes.
Optionees shall have no rights under the Plan other than as unsecured general
creditors of the Company, except that insofar as they may have become entitled
to payment of additional compensation by performance of services, they shall
have the same rights as other employees under general law.
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(g) Each member of the Committee and each member of the Company's
Board shall be fully justified in relying, acting or failing to act, and shall
not be liable for having so relied, acted or failed to act in good faith, upon
any report made by the independent public accountant of the Company and upon
any other information furnished in connection with the Plan by any person or
persons other than such member.
(h) Except as otherwise specifically provided in the relevant plan
document, no payment under the Plan shall be taken into account in determining
any benefits under any pension, retirement, profit-sharing, group insurance or
other benefit plan of the Company.
(i) The expenses of administering the Plan shall be borne by the
Company.
(j) Masculine pronouns and other words of masculine gender shall
refer to both men and women.
* * *
As adopted by the Board of Directors of Knoll, Inc.,
formerly T.K.G. Acquisition Corp., as of February 28, 1996
and amended and restated as of November 4, 1999.
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