Exhibit 10.18
KNOLL, INC.
1997 STOCK INCENTIVE PLAN
(Amended and Restated as of November 4, 1999)
ARTICLE I
Purpose
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The Knoll, Inc. 1997 Stock Incentive Plan (Amended and Restated as of
November 4, 1999) (the "Plan") is intended as an incentive to encourage stock
ownership by officers, certain other key employees, directors and consultants
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
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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, 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 individuals
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; (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
determine the time or times at which options shall be repriced and the terms
and conditions of such repriced options; (h) 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); (i) to
adopt, amend and rescind such rules and regulations as, in its opinion, may be
advisable in the administration of the Plan; and (j) 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
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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, 2,255,772 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 shall be eligible to receive Restricted
Shares and options under the Plan. In addition, Restricted Shares and options
which are not incentive stock options may be granted to directors, consultants
(including employees of consultants) or other key persons who the Committee
determines shall receive options under the Plan. Notwithstanding anything to
the contrary herein, the maximum number of shares of Stock with respect to
which options may be granted to any individual in any one year shall not exceed
the maximum number of shares of Stock available for issue hereunder, as such
number may change from time to time.
ARTICLE V
Fair Market Value
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"Fair Market Value Per Share" means, 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 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.
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,
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"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
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
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of this Agreement, the Restricted Share Agreement or the Stockholders
Agreement.
ARTICLE VII
Option Exercise Price
---------------------
The option price per share of Stock for each option shall be set by the
Committee at the time of grant, subject to the ability of the Committee to
reprice options pursuant to ARTICLE VIII; provided, however, that the option
price per share of Stock for incentive stock options, subject to ARTICLE IX,
shall not be less than the Fair Market Value Per Share at the time the option
was 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 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 (i)
accelerate the exercisability of any option granted hereunder and (ii) reprice
any option to a lower exercise price. Any such acceleration shall not affect
the terms and conditions of any such option other than with respect to
exercisability.
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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 but rather shall be nonqualified 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 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 Per Share equal to
the amount of such exercise price.
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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
which may be subject to options granted to any one person in any one year, 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.
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, the number or kind of shares of Stock which may
be subject to options granted to any one person in any one year, 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.
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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.
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 legending the
stock certificate as it deems appropriate.
ARTICLE XVI
Employment Rights
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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
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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 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 14, 1997, 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
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thereunder. The expiration date of the Plan, after which no option may be
granted hereunder, shall be February 13, 2007.
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.
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 estate, to sell back to the Company such
options in the event such optionee's employment with the Company is terminated.
ARTICLE XXII
Miscellaneous
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(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.
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(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 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.
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(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.
(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
TKG Acquisition Corp. as of February 14, 1997
and amended by the Board of Directors of
Knoll, Inc. as of May 6, 1997 and
amended and restated as of October 22, 1997
and amended and restated as of November 4, 1999.
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