Document:

Exhibit 10.D

 

PERFORMANCE-BASED

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

THIS AGREEMENT is entered into and effective as of                           ,
20     (the “Date of Grant”), by and between Ecolab Inc.
(the “Company”) and                                             
(the “Grantee”).

 

A.                   The Company
has adopted the Ecolab Inc. 2010 Stock Incentive Plan (the “Plan”), authorizing
the Board of Directors of the Company, or a committee as provided for in the
Plan (the Board or such a committee to be referred to as the “Committee”), to
grant restricted Stock Unit Awards to certain employees of the Company and its
Subsidiaries.

 

B.                     The Company
desires to give the Grantee an incentive to advance the interests of the
Company by granting to the Grantee an award of restricted stock units pursuant
to the Plan.

 

Accordingly,
the parties agree as follows:

 

ARTICLE 1.                              GRANT
OF AWARD.

 

The Company hereby grants to the Grantee a performance-based
restricted Stock Unit Award (the “Award”) consisting of                          units
(the “Award Units”), each of which is a bookkeeping entry representing the
right to receive one share of the Company’s common stock, par value $1.00 per
share (the “Common Stock”).  The Award
and Award Units are subject to the terms, conditions, restrictions and risk of
forfeiture set forth in this Agreement and in the Plan.

 

ARTICLE 2.                              VESTING
OF AWARD UNITS.

 

2.1                 Subject to Article 5 below, some or all of the
Award Units will vest and become non-forfeitable (“Vested”) on December 31,
20     (the “Vesting Date”), provided that (a) the
Committee has certified that the Company has achieved a level of average annual
Return on Invested Capital (as defined below) of at least         
percent for the three (3) year period from January 1, 20    
to December 31, 20     (the “Performance Period”), and
(b) the Grantee remains in the continuous employ of or service with the
Company or any Subsidiary until the Vesting Date.  The number of Award Units that will Vest on
the Vesting Date will be determined in accordance with Section 2.2 below.

 

2.2                 The
following chart sets forth the percentage of the Award Units (or of a portion
of the Award Units as provided in Section 5.1 of this Agreement) that will
vest on the Vesting Date based upon the Company’s level of achievement of
average annual Return on Invested Capital for the Performance Period:

 

	
  Average Annual Return on

  Invested Capital Level

  	
   

  	
  Vested Award Unit

  Percentage

  	
   

  
	
  Threshold
  Level — [ %]

  	
   

  	
  [   ]

  	
   

  
	
  Maximum
  Level — [ %]

  	
   

  	
  [   ]

  	
   

  

 

The actual
percentage of Award Units that will Vest based upon the Company’s achievement
of average annual Return on Invested Capital between the Threshold Level and
Maximum Level will be interpolated on a straight line basis, with the
corresponding number of Vested Award Units resulting from such determination
rounded up to the next whole Award Unit. 
If the average annual Return on Invested Capital for the Performance
Period is below the Threshold Level, no Award Units will Vest.  Any Award Units that do not Vest on the
Vesting Date will be forfeited.

 

 

2.3                 The
Committee shall certify the level of average annual Return on Invested Capital
for the Performance Period and the percentage of Award Units that Vest as
provided in Section 2.2 above no later than March 1, 20    .

 

2.4                 For the
purposes of this Agreement, average annual Return on Invested Capital is
calculated by dividing (i) the average of the Company’s Net Operating
Profit After Taxes (as defined below) for each of the three fiscal years during
the Performance Period, by (ii) the average of the Company’s Invested
Capital (as defined below) as of the last day of the fiscal quarter immediately
preceding the Performance Period and of each fiscal quarter during the
Performance Period.  “Net Operating
Profit After Taxes” is defined as the Company’s operating income multiplied by
1 minus the Company’s effective tax rate, each as reported in the Company’s
consolidated financial statements for each fiscal year during the Performance
Period, adjusted to eliminate the after-tax effects of
any acquisition during the Performance Period that was approved by the
Board as well as (a) the cumulative
effects of accounting or tax changes, (b) gains and losses from
discontinued operations, (c) extraordinary gains or losses, and (d) charges
for restructurings, each as defined by generally accepted accounting principles
and as identified in the Company’s financial statements (including accompanying
notes), management’s discussion and analysis or other filings with the
Securities and Exchange Commission by the Company.  “Invested
Capital” is defined as the Company’s (a) total assets less cash and cash
equivalents, minus (b) total liabilities less short-term and long-term
debt, each as reported by the Company as of the end of the fiscal quarters
described above and adjusted to eliminate the impact of the same factors
identified in the previous sentence.

 

2.5                 The
Committee may adjust the calculation of Return on Invested Capital applicable
to the Award Units under the circumstances, for the purpose and to the extent
contemplated by Section 3.2(c) of the Plan.  Further, the actual number of Award Units
that become Vested based upon achieving the specified level of average annual
Return on Invested Capital during the Performance Period may be adjusted (but only
downward if the Grantee is a Covered Employee and this Award is intended to be
Performance-Based Compensation subject to Section 17 of the Plan) by the
Committee in its sole and absolute discretion based on such factors as the
Committee determines to be appropriate and/or advisable.

 

ARTICLE 3.                              SETTLEMENT
OF VESTED AWARD UNITS.

 

Except as may otherwise be provided in Section 5.2
below, Vested Award Units will be paid to the Grantee by no later than March 15,
20    .  Each Vested
Award Unit will be paid to the Grantee in one share of Common Stock, provided
that the Company will have no obligation to issue shares of Common Stock
pursuant to this Agreement unless and until the Grantee has satisfied any
applicable tax obligations pursuant to Article 9 below and such issuance
otherwise complies with all applicable law. 
Prior to the time the Vested Award Units are settled, the Grantee will
have no rights other than those of a general creditor of the Company.  The Award Units represent an unfunded and
unsecured obligation of the Company.

 

ARTICLE 4.                              GRANT
RESTRICTIONS.

 

4.1                 Transferability.  Any attempt to transfer, assign or encumber
the Award Units other than in accordance with this Agreement and the Plan will
be null and void, and will result in the immediate termination and forfeiture
of the Award and all Award Units that have not yet Vested.

 

4.2                 Dividends
and Other Distributions.  Subject to Article 6 of this Agreement,
the Grantee will have no right to receive dividends, dividend equivalents or
other distributions with respect to Award Units.

 

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ARTICLE 5.                              TERMINATION
OF EMPLOYMENT OR OTHER SERVICE; CHANGE IN CONTROL.

 

5.1                 Termination
of Employment or Other Service.  This Award is considered a Stock Unit Award
subject to a service-based vesting condition and to the achievement of a
specified Performance Criterion as a condition to vesting for purposes of Section 12
of the Plan.  Except as otherwise
provided in this Section 5.1, the effect of the termination of the Grantee’s
employment or other service with the Company and all Subsidiaries prior to the
Vesting Date of this Award will be as provided in Sections 12.1(c), 12.2(c),
12.3(b) and 12.5 of the Plan.  If
the Grantee’s employment by or other service with the Company and all
Subsidiaries is terminated by the Company or any Subsidiary without Cause prior
to the Vesting Date, then (i) for purposes of Section 2.1(b) of
this Agreement, the Grantee will be deemed to have been in the continuous
employ of or service with the Company or any Subsidiary until the Vesting Date
with respect to one-third of the Award Units if such termination occurs during
the second year of the Performance Period and with respect to two-thirds of the
Award Units if the such termination occurs during the third year of the
Performance Period, and (ii) for purposes of determining the number of
Vested Award Units on the Vesting Date under Section 2.2 of this
Agreement, the Vested Award Unit Percentage determined in accordance with Section 2.2
will be applied to the number of Award Units as to which the service-based
vesting condition is deemed satisfied in accordance with clause (i) of
this sentence, rather than to the total number of Award Units.

 

5.2                 Change in
Control.  If a Change in Control
occurs prior to the Vesting Date, the effect on this Award shall be as provided
in Section 14.2 of the Plan.  If
vesting of Award Units should be accelerated in accordance with Section 14.2
of the Plan, Vested Unit Awards will be settled and paid to the Grantee no
later than two and one-half months after the end of the Grantee’s taxable year
in which the Award Units became Vested.

 

ARTICLE 6.                              ADJUSTMENTS.

 

The number and kind of securities subject to this Award will
be subject to adjustment under the circumstances and to the extent specified in
Section 4.3 of the Plan.

 

ARTICLE 7.                              RIGHTS
AS A STOCKHOLDER.

 

The Grantee will have no rights as a stockholder with
respect to any of the Award Units until the Award Units are settled following
vesting and the Grantee becomes the holder of record of shares of Common Stock.

 

ARTICLE 8.                              EMPLOYMENT
OR SERVICE.

 

Nothing in this Agreement will be construed to (a) limit
in any way the right of the Company to terminate the employment or service of
the Grantee at any time, or (b) be evidence of any agreement or
understanding, express or implied, that the Company will retain the Grantee in
any particular position at any particular rate of compensation or for any
particular period of time.

 

ARTICLE 9.                              WITHHOLDING
TAXES.

 

By accepting this Award, the Grantee (i) acknowledges his or her
obligation to pay any federal, foreign, state and local withholding or
employment-related taxes attributable to this Award as provided in Section 13
of the Plan, and (ii) consents and directs the Company or its third party
administrator to withhold the number of shares of Common Stock issuable upon
the vesting of some or all of the Award

 

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Units
as the Company, in its sole discretion, deems necessary to satisfy such
withholding obligations.  For purposes of satisfying the
Grantee’s withholding and employment-related tax obligations, shares withheld
by the Company will be valued at their Fair Market Value on the date of
settlement.

 

ARTICLE 10.                        PERFORMANCE-BASED
COMPENSATION.

 

Any payment of Common Stock received for the Vested Award
Units is intended to qualify as “performance-based compensation” for purposes
of Section 162(m) of the Internal Revenue Code, and no action will be
taken which would cause such payment to fail to satisfy the requirements of
such exemption.

 

ARTICLE 11.                        AUTHORIZATION
TO RELEASE AND TRANSFER NECESSARY PERSONAL INFORMATION.

 

The Grantee hereby explicitly and unambiguously consents to
the collection, use and transfer, in electronic or other form, of the Grantee’s
personal data by and among, as applicable, the Company and its Subsidiaries for
the exclusive purpose of implementing, administering and managing the Grantee’s
participation in the Plan.  The Grantee
understands that the Company may hold certain personal information about the
Grantee, including, but not limited to, the Grantee’s name, home address and
telephone number, date of birth, social security number (or any other social or
national identification number), salary, nationality, job title, number of
Award Units and/or shares of Common Stock held and the details of all Award
Units or any other entitlement to shares of Common Stock awarded, cancelled,
vested, unvested or outstanding for the purpose of implementing, administering
and managing the Grantee’s participation in the Plan (the “Data”).  The Grantee understands that the Data may be
transferred to the Company or to any third parties assisting in the
implementation, administration and management of the Plan, that these
recipients may be located in the Grantee’s country or elsewhere, and that any
recipient’s country (e.g., the United States) may have different data privacy
laws and protections than the Grantee’s country.  The Grantee understands that he or she may
request a list with the names and addresses of any potential recipients of the
Data by contacting his or her local human resources representative or the
Company’s stock plan administrator.  The
Grantee authorizes the recipients to receive, possess, use, retain and transfer
the Data, in electronic or other form, for the sole purpose of implementing,
administering and managing the Grantee’s participation in the Plan, including
any requisite transfer of such Data to a broker or other third party assisting
with the administration of Award Units under the Plan or with whom shares of
Common Stock acquired pursuant to the vesting of the Award Units or cash from
the sale of such shares may be deposited. 
Furthermore, the Grantee acknowledges and understands that the transfer
of the Data to the Company or to any third parties is necessary for the Grantee’s
participation in the Plan.  The Grantee
understands that the Grantee may, at any time, view the Data, request
additional information about the storage and processing of the Data, require
any necessary amendments to the Data or refuse or withdraw the consents herein
by contacting the Grantee’s local human resources representative or the Company’s
stock plan administrator in writing.  The
Grantee further acknowledges that withdrawal of consent may affect his or her
ability to vest in or realize benefits from the Award Units, and the Grantee’s
ability to participate in the Plan.  For
more information on the consequences of refusal to consent or withdrawal of
consent, the Grantee understands that he or she may contact his or her local
human resources representative or the Company’s stock plan administrator.

 

ARTICLE 12.                        SUBJECT
TO PLAN.

 

12.1                       Terms
of Plan Prevail. 
The Award and the Award Units granted pursuant to this Agreement have
been granted under, and are subject to the terms of, the Plan.  The terms of the Plan are incorporated by
reference in this Agreement in their entirety, and the Grantee acknowledges
having received a copy of the Plan.  The
provisions of this Agreement will be interpreted as to be consistent with

 

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the Plan, and any ambiguities in this Agreement will be
interpreted by reference to the Plan.  In
the event that any provision in this Agreement is inconsistent with the terms
of the Plan, the terms of the Plan will prevail.  References in this Agreement to specific
Sections of the Plan refer to those Sections of the Plan as in effect on the
Date of Grant.

 

12.2                       Definitions.  Unless otherwise defined in this Agreement,
the terms capitalized in this Agreement have the same meanings as given to such
terms in the Plan.

 

ARTICLE 13.                        MISCELLANEOUS.

 

13.1                       Binding
Effect.  This Agreement will
be binding upon the heirs, executors, administrators and successors of the
parties hereto.

 

13.2                       Governing Law. 
This Agreement and all rights and obligations under this Agreement will
be construed in accordance with the Plan and governed by the laws of the State
of Minnesota without regard to conflicts of law provisions.  Any legal proceeding related to this Agreement
will be brought in an appropriate Minnesota court, and the parties to this
Agreement consent to the exclusive jurisdiction of the court for this purpose.

 

13.3                       Entire
Agreement. 
This Agreement and the Plan set forth the entire agreement and
understanding of the parties hereto with respect to the grant, vesting and
payment of this Award and the administration of the Plan and supersede all
prior agreements, arrangements, plans and understandings relating to the grant,
vesting and payment of this Award and the administration of the Plan.

 

13.4                       Amendment
and Waiver. 
Other than as provided in the Plan, this Agreement may be amended,
waived, modified or canceled only by a written instrument executed by the
parties hereto or, in the case of a waiver, by the party waiving compliance.

 

13.5                       Captions.  The Article, Section and paragraph
captions in this Agreement are for convenience of reference only, do not
constitute part of this Agreement and are not to be deemed to limit or
otherwise affect any of the provisions of this Agreement.

 

13.6                       Electronic
Delivery and Execution.  The Grantee hereby consents and agrees to
electronic delivery of any documents that the Company may elect to deliver
(including, but not limited to, plan documents, prospectus and prospectus
supplements, grant or award notifications and agreements, account statements,
annual and quarterly reports, and all other forms of communications) in
connection with this and any other Incentive Award made or offered under the
Plan.  The Grantee understands that,
unless revoked by giving written notice to the Company pursuant to the Plan,
this consent will be effective for the duration of the Agreement.  The Grantee also understands that the Grantee
will have the right at any time to request that the Company deliver written
copies of any and all materials referred to above.  The Grantee hereby consents to any and all
procedures the Company has established or may establish for an electronic
signature system for delivery and acceptance of any such documents that the
Company may elect to deliver, and agrees that the Grantee’s electronic
signature is the same as, and will have the same force and effect as, the
Grantee’s manual signature.  The Grantee
consents and agrees that any such procedures and delivery may be effected by a
third party engaged by the Company to provide administrative services related
to the Plan.

 

13.7                       Address
for Notice. 
All notices to the Company shall be in writing and sent to the Company’s
General Counsel at the Company’s corporate headquarters.  Notices to the Grantee shall be addressed to
the Grantee at the address as from time to time reflected in the Company’s or
Subsidiary’s employment records as the Grantee’s address.

 

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13.8                       Severability.  In the event that any provision in this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.

 

13.9                       Appendix.  Notwithstanding any provision of this
Agreement to the contrary, this grant of Award Units and the shares of Common
Stock acquired under the Plan shall be subject to any and all special terms and
provisions, if any, as set forth in the Appendix for the Grantee’s country of
residence.

 

13.10                 Counterparts.  For the convenience of the parties hereto,
this Agreement may be executed in any number of counterparts, each such
counterpart to be deemed an original instrument, and all such counterparts
together to constitute the same agreement.

 

The parties to this Agreement have executed this Agreement
effective the day and year first above written.

 

	
   

  	
   

  	
  ECOLAB INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  [By
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  GRANTEE

  
	
  the
  Grantee acknowledges having

  	
   

  	
   

  
	
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6Exhibit 10.1

 

AMENDED AND RESTATED

 

KNOLL, INC.

 

2010 STOCK INCENTIVE
PLAN

(effective as of May 5, 2010)

 

1.                                      Purpose

 

The Amended and Restated Knoll, Inc. 2010 Stock Incentive Plan, as
set forth herein and as amended from time to time, (the “Plan”) is intended to
provide incentives that will attract, retain, motivate and reward highly
competent persons as officers, certain other key employees, directors and
consultants of Knoll, Inc. (the “Company”) or any of its subsidiary
corporations, limited liability companies or other forms of business entities
now existing or hereafter formed or acquired (“Subsidiaries”), by providing
them opportunities to acquire shares of the common stock, par value $.01 per
share, of the Company (“Common Stock”) or to receive monetary payments based on
the value of such shares pursuant to Awards (as defined in Section 4)
described herein.  Furthermore, the Plan
is intended to assist in further aligning the interests of the Company’s
officers, other key employees, directors and consultants with those of its
stockholders.

 

2.                                      Administration

 

a.             The
Plan shall be administered by a committee (the “Committee”) which shall be the
Compensation Committee of the Board of Directors of the Company (the “Board”)
or another committee appointed by the Board from among its members.  Unless the Board determines otherwise, the
Committee shall be comprised solely of at least two members who each shall
qualify as a (i) “Non-Employee Director” within the meaning of Rule 16b-3(b)(3) (or
any successor rule) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and (ii) an “outside director” within the meaning of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations
thereunder.  The Committee is authorized,
subject to the provisions of the Plan to establish such rules and
regulations as it deems necessary for the proper administration of the Plan, to
make such determinations and interpretations and to take such action in
connection with the Plan and any Awards granted hereunder as it deems necessary
or advisable, in its sole discretion. 
All determinations and interpretations made by the Committee shall be
binding and conclusive on all participants and their legal representatives.

 

b.             No
member of the Board, no member of the Committee and no agent of the Committee
who is an employee of the Company shall be liable for any act or failure to act
hereunder, except in circumstances involving his or her bad faith, gross
negligence or willful misconduct, or for any act or failure to act hereunder by
any other member or employee or by any agent to whom duties in connection with
the administration of this Plan have been delegated.  The Company shall indemnify members of the
Board, members of the Committee and any agent of the Committee who is an
employee of the Company against any and all liabilities or expenses to which
they may be subjected by reason of any act or failure to act with respect to
their duties

 

 

on behalf of the Plan, except in circumstances involving such person’s
bad faith, gross negligence or willful misconduct.

 

c.             The
Committee shall have the authority to grant Awards to officers, other key
employees, directors and consultants of the Company or any of its
Subsidiaries.  The Committee may delegate
to one or more of its members, or to one or more agents, such administrative
duties as it may deem advisable, and the Committee, or any person to whom it
has delegated duties as aforesaid, may employ one or more persons to render
advice with respect to any responsibility the Committee or such person may have
under the Plan.  The Committee may employ
such legal or other counsel, consultants and agents as it may deem desirable
for the administration of the Plan and may rely upon any opinion or computation
received from any such counsel, consultant or agent.  Expenses incurred by the Committee in the
engagement of such counsel, consultant or agent shall be paid by the Company or
any of its Subsidiaries whose employees have benefited from the Plan, as
determined by the Committee.

 

3.                                      Participants

 

Participants shall consist of such officers, other key employees,
directors and consultants (including employees of a consultant, provided that
such employee is actually providing bona fide consulting services to the
Company) of the Company or any of its Subsidiaries as the Committee in its sole
discretion determines to have significant responsibility for the success and
future growth and profitability of the Company and whom the Committee may
designate from time to time to receive Awards under the Plan.  Designation of a participant in any year
shall not require the Committee to designate such person to receive an Award in
any other year or, once designated, to receive the same type or amount of Award
as granted to the participant in any other year.  The Committee shall consider such factors as
it deems pertinent in selecting participants and in determining the type and
amount of Awards.

 

4.                                      Types of Awards and Vesting Restrictions

 

a.             Awards
under the Plan may be granted in any one or a combination of (1) Stock
Options, (2) Stock Appreciation Rights, (3) Stock Awards, (4) Performance
Awards and (5) Stock Units (each as described above an “Award,” and
collectively, “Awards”).  Stock Awards,
Performance Awards and Stock Units may, as determined by the Committee in its
discretion, constitute Performance-Based Awards, as described in Section 11.  Awards shall be evidenced by Award agreements
(which need not be identical) in such forms as the Committee may from time to
time approve; provided, however,
that in the event of any conflict between the provisions of the Plan and any
such agreements, the provisions of the Plan shall prevail.

 

b.             Awards
shall be subject to forfeiture as determined by the Committee and set forth in
the applicable Award agreement, provided however, that:

 

(1)                                  No more than
one-third of any Stock Award or Stock Unit shall become vested in any single
annual period, except, as determined by the Committee, in the case of the
participant’s death, disability or retirement or a Change in Control (as
defined in Section 13b), provided that this restriction shall not apply to
(A) a Performance Award (as defined in

 

2

 

Section 10) or (B) an
Award that is  granted in lieu of cash
compensation foregone at the election of an employee, director or consultant of
the Company; and

 

(2)                                  A Stock Award
or Stock Unit that is a Performance Award shall become vested no sooner than
the first anniversary of the date of grant of such Award except, as determined
by the Committee, in the case of the participant’s death, disability or
retirement or a Change in Control.

 

5.                                      Common Stock Available Under the Plan

 

a.             Shares Available.  Subject to any adjustments made in accordance
with Section 12, the aggregate number of shares of Common Stock that may
be granted or issued pursuant to Awards, including shares of Common Stock
subject to Stock Options, shall be 2,000,000 shares of Common Stock, all of
which may be issued pursuant to the exercise of Incentive Stock Options, which
may be authorized and unissued or treasury shares.

 

b.             Individual Limitation.  The number of shares of Common Stock with
respect to which Stock Options and Stock Appreciation Rights may be granted to
any individual during any calendar year shall not exceed 500,000 shares of
Common Stock, subject to adjustment in accordance with Section 12.  The number of shares of Common Stock with
respect to which Stock Awards, Performance Awards and Stock Units may be
granted during any calendar year shall not exceed 250,000 shares of Common
Stock, subject to adjustment in accordance with Section 12.

 

c.             Shares Underlying Awards That Again Become Available.  Any shares of Common Stock subject to a Stock
Option, Stock Appreciation Right, Stock Award, Performance Award, or Stock Unit
which for any reason is cancelled or forfeited shall again be available for
Awards under the Plan.  The preceding
sentence shall apply only for purposes of determining the aggregate number of
shares of Common Stock subject to Awards pursuant to Section 5a but shall
not apply for purposes of determining the maximum number of Awards that any
individual participant may be granted in any calendar year.

 

6.                                      Stock Options

 

a.             In General.  The Committee is authorized to grant Stock
Options to officers, other key employees, directors and consultants of the
Company or any of its Subsidiaries and shall, in its sole discretion, determine
such participants in the Plan who will receive Stock Options and the number of
shares of Common Stock underlying each Stock Option.  Stock Options may be (i) incentive stock
options (“Incentive Stock Options”) within the meaning of Section 422 of
the Code, or (ii) Stock Options which do not qualify as Incentive Stock
Options (“Nonqualified Stock Options”). 
The Committee may grant to any participant one or more Incentive Stock
Options, Nonqualified Stock Options, or both types of Stock Options.  Each Stock Option shall be subject to such
terms and conditions consistent with the Plan as shall be determined by the
Committee and as set forth in the Award agreement.  In addition, each Stock Option shall be
subject to the following limitations set forth in this Section 6.

 

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b.             Exercise Price.  Each Stock Option granted hereunder shall
have such per-share exercise price as the Committee may determine on the date
of grant; provided, however,
subject to Section 6(e), that the per-share exercise price shall not be
less than 100 percent of the Fair Market Value (as defined in Section 16)
of Common Stock on the date the Stock Option is granted.

 

c.             Payment of Exercise Price.  The Stock Option exercise price may be paid
in cash or, in the discretion of the Committee, by the delivery of shares of Common
Stock then owned by the participant, by the withholding of shares of Common
Stock for which a Stock Option is exercisable, or by a combination of these
methods.  In the discretion of the
Committee, a payment may also be made by delivering a properly executed
exercise notice to the Company together with a copy of irrevocable instructions
to a broker to deliver promptly to the Company the amount of sale or loan
proceeds to pay the exercise price with the requirement of the broker same day
reconciliation or as otherwise determined by the Company.  To facilitate the foregoing, the Company may
enter into agreements for coordinated procedures with one or more brokerage
firms.  The Committee may prescribe any
other method of paying the exercise price that it determines to be consistent
with applicable law and the purpose of the Plan, including, without limitation,
in lieu of the exercise of a Stock Option by delivery of shares of Common Stock
then owned by a participant for at least six months, providing the Company with
a notarized statement attesting to the number of shares owned, where upon
verification by the Company, the Company would issue to the participant only
the number of incremental shares to which the participant is entitled upon
exercise of the Stock Option.  In
determining which methods a participant may utilize to pay the exercise price,
the Committee may consider such factors as it determines are appropriate; provided, however, that with respect to
Incentive Stock Options, all such discretionary determinations shall be made at
the time of grant and specified in the Award agreement.

 

d.             Exercise Period.  Stock Options granted under the Plan shall be
exercisable at such time or times as specified in the Plan and the Award
agreement; provided, however,
that no Stock Option shall be exercisable later than ten years after the date
it is granted.

 

e.             Limitations on Incentive Stock Options.  Incentive Stock Options may be granted only
to participants who are officers or other key employees of the Company or any
of its Subsidiaries on the date of grant. 
The aggregate market value (determined as of the time the Stock Option
is granted) of Common Stock with respect to which Incentive Stock Options
(under all option plans of the Company) are exercisable for the first time by a
participant during any calendar year shall not exceed $100,000.  For purposes of the preceding sentence,
Incentive Stock Options shall be taken into account in the order in which they
are granted.  Incentive Stock Options may
not be granted to any participant who, at the time of grant, owns stock
possessing (after the application of the attribution rules of Section 424(d) of
the Code) more than 10 percent of the total combined voting power of all
outstanding classes of stock of the Company or any of its Subsidiaries, unless
the exercise price is fixed at not less than 110 percent of the Fair Market
Value of Common Stock on the date of grant and the exercise of such option is
prohibited by its terms after the expiration of 5 years from the date of grant
of such option.

 

4

 

7.                                      Stock Appreciation Rights

 

The Committee is authorized to grant Stock Appreciation Rights to
officers, other key employees, directors and consultants of the Company or any
of its Subsidiaries and shall, in its sole discretion, determine such
participants who will receive Stock Appreciation Rights and the number of
shares of Common Stock with respect to each Stock Appreciation Right.  A “Stock Appreciation Right” shall mean a
right to receive a payment in cash, Common Stock or a combination thereof, in
an amount equal to the excess of (x) the Fair Market Value (or some lesser
amount), of a specified number of shares of Common Stock on the date the Stock
Appreciation Right is exercised over (y) the Fair Market Value of such
shares of Common Stock on the date the Stock Appreciation Right is granted, or
other specified valuation (which shall be no less than the Fair Market Value as
of the date the Stock Appreciation Right is granted) (the “Grant Price”), with
the number of shares of Common Stock represented by the Stock Appreciation
Right as determined by the Committee. 
Each Stock Appreciation Right shall be subject to such terms and
conditions consistent with the Plan as shall be determined by the Committee and
as set forth in the Award agreement.

 

8.                                      Stock Awards

 

The Committee is authorized to grant Stock Awards to officers, other
key employees, directors and consultants of the Company or any of its
Subsidiaries and shall, in its sole discretion, determine such participants in
the Plan who will receive Stock Awards and the number of shares of Common Stock
underlying each Stock Award.  A “Stock
Award” is an immediate grant of a specified number of shares of Common Stock,
with such number of shares of Common Stock determined by the Committee.  Each Stock Award shall be subject to such
terms and conditions consistent with the Plan as shall be determined by the
Committee and as set forth in the Award agreement, including, without limitation,
restrictions on the sale or other disposition of such shares, and the right of
the Company to reacquire such shares for no consideration upon termination of
the participant’s employment within specified periods.  The Committee may require the participant to
deliver a duly signed stock power, endorsed in blank, relating to Common Stock
covered by such Stock Award and/or that the stock certificates evidencing such
shares be held in custody or bear restrictive legends until the restrictions
thereon shall have lapsed.  The Stock
Award agreement shall specify whether the participant shall have, with respect
to the shares of Common Stock subject to a Stock Award, all of the rights of a
holder of shares of Common Stock, including the right to receive dividends and
to vote the shares.

 

9.                                      Stock Units

 

a.             In General.  The Committee is authorized to grant Stock
Units to officers, other key employees, directors and consultants of the
Company or any of its Subsidiaries and shall, in its sole discretion, determine
such officers, other key employees, directors and consultants who will receive
Stock Units and the number of shares of Common Stock with respect to each Stock
Unit.  The Committee shall determine the
criteria for the vesting of Stock Units. 
A Stock Unit granted by the Committee shall provide payment in shares of
Common Stock at such time as the Award agreement shall specify.  Shares of Common Stock issued pursuant to
this Section 9 may

 

5

 

be issued with or without other payments therefor as may be required by
applicable law or such other consideration as may be determined by the
Committee.  The Committee shall determine
whether a participant granted a Stock Unit shall be entitled to a Dividend
Equivalent Right (as defined below). 
Each Stock Unit shall be subject to such terms and conditions consistent
with the Plan as shall be determined by the Committee and as set forth in the
Award agreement.

 

b.             Payout. 
Upon vesting of a Stock Unit, unless the Committee has determined to
defer payment with respect to such unit or a participant has elected to defer
payment under Section 10(c), shares of Common Stock representing the Stock
Units shall be distributed to the participant unless the Committee, with the
consent of the participant, provides for the payment of the Stock Units in cash
or partly in cash and partly in shares of Common Stock equal to the value of
the shares of Common Stock which would otherwise be distributed to the
participant.

 

c.             Definitions.  A “Stock Unit” shall mean a notional account
representing one share of Common Stock. 
A “Dividend Equivalent Right” shall mean the right to receive the amount
of any dividend paid on the share of Common Stock underlying a Stock Unit,
which shall be payable in cash or in the form of additional Stock Units, at the
time set forth in the Award Agreement or as deferred pursuant to Section 10(c).

 

10.                               Performance Awards

 

a.             In General.  The Committee is authorized to grant
Performance Awards to officers and other key employees, directors and
consultants of the Company or any of its Subsidiaries and shall, in its sole
discretion, determine such participants who will receive Performance Awards,
provided however that directors may not receive Incentive Stock Options.  A “Performance Award” is a Stock Option,
Stock Award or Stock Unit, the vesting or payment of which is conditioned on
the satisfaction of performance criteria. 
Each Performance Award shall be subject to such terms and conditions
consistent with the Plan as shall be determined by the Committee and as set
forth in the Award agreement.  The
Committee shall set performance targets at its discretion which, depending on
the extent to which they are met, will determine the number and/or value of
Performance Awards that will be paid out to the participants, and may attach to
such Performance Awards one or more restrictions.  Performance targets may be based upon,
without limitation, Company-wide, divisional and/or individual performance.

 

b.             Adjustment of Performance Targets.  With respect to those Performance Awards that
are not intended to qualify as Performance-Based Awards (as described in Section 11),
the Committee shall have the authority at any time to make adjustments to
performance targets for any outstanding Performance Awards which the Committee
deems necessary or desirable to prevent dilution or enlargement of the rights
of participants in the event of, in recognition of, or in anticipation of, any
unanticipated, unusual nonrecurring or extraordinary corporate item,
transaction, event or development; or in response to, or in anticipation of,
changes in applicable laws, regulations, accounting principles, or business
conditions.

 

c.             Payout. 
Payment of earned Performance Awards may be made in shares of Common
Stock, in cash or any combination of the two and shall be made in accordance
with the terms and conditions prescribed or authorized by the Committee.  The participant may elect to

 

6

 

defer, or the Committee may require or permit the deferral of, the
receipt of Performance Awards, provided that, the election to defer receipt of
Performance Awards must occur no later than thirty (30) days after such
Performance Award is granted, and otherwise in compliance with applicable tax
law.

 

11.                               Performance-Based Awards

 

a.             In General.  All Stock Options and Stock Appreciation
Rights granted under the Plan, and the compensation attributable to such
Awards, are intended to qualify as  “performance-based
compensation” (as such term is used in Section 162(m) of the Code and
the regulations thereunder) and thus be exempt from the deduction limitation
imposed by Section 162(m) of the Code.  Stock Awards, Performance
Awards and Stock Units may be granted in a manner such that such Awards
qualify as “performance-based compensation” and thus be exempt from the
deduction limitation imposed by Section 162(m) of the Code  All Awards that qualify as “performance-based
compensation” are referred to herein as “Performance-Based Awards.”  An Award shall qualify as a Performance-Based
Award only if at the time of grant the Committee is comprised solely of two or
more “outside directors” (as such term is used in Section 162(m) of
the Code and the regulations thereunder).

 

b.             Performance Measures.  Stock Awards, Performance Awards, and Stock
Units granted under the Plan should qualify as Performance-Based Awards if, as
determined by the Committee, in its discretion, either the granting or vesting
of such Award is subject to the achievement of a performance target or targets
based on one or more performance measures. 
The Committee may use the following performance measures (either
individually or in any combination) to set performance targets with respect to
Awards intended to qualify as Performance-Based Awards:  operating profits, revenue growth, gross
profit margin, operating profit margin, net sales; pretax income before
allocation of corporate overhead and bonus; budget; earnings per share; net
income; division, group or corporate financial goals; return on stockholders’
equity; return on assets; attainment of strategic and operational initiatives;
appreciation in and/or maintenance of the price of Common Stock or any other
publicly-traded securities of the Company; market share; gross profits;
earnings before interest and taxes; earnings before interest, taxes,
depreciation and amortization; economic value-added models; comparisons with
various stock market indices; and/or reductions in costs.

 

c.             Adjustment of Performance Measures.  The Committee shall have the authority at any
time to make adjustments to performance measures for any outstanding
Performance-Based Awards which the Committee deems necessary or desirable to
prevent dilution or enlargement of the rights of participants in the event of,
in recognition of, or in anticipation of, any unanticipated, unusual
nonrecurring or extraordinary corporate item, transaction, event or
development; or in response to, or in anticipation of, changes in applicable
laws, regulations, accounting principles, or business conditions.

 

12.                               Adjustment Provisions

 

If there shall be any change in Common Stock of the Company, through
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, reverse stock split,

 

7

 

split up, spinoff, combination of shares, exchange of
shares, dividend in kind or other like change in capital structure or
distribution (other than normal cash dividends) to stockholders of the Company,
an adjustment shall be made to each outstanding Stock Option and Stock
Appreciation Right such that each such Stock Option and Stock Appreciation
Right shall thereafter be exercisable for such securities, cash and/or other
property as would have been received in respect of Common Stock subject to such
Stock Option or Stock Appreciation Right had such Stock Option or Stock
Appreciation Right been exercised in full immediately prior to such change or
distribution, and such an adjustment shall be made successively each time any such
change shall occur.  In addition, in the
event of any such change or distribution, in order to prevent dilution or
enlargement of participants’ rights under the Plan, the Committee shall have
the authority to adjust, in an equitable manner, the number and kind of shares
that may be issued under the Plan, the number and kind of shares subject to
outstanding Awards, the exercise price applicable to outstanding Awards, and
the Fair Market Value of Common Stock and other value determinations applicable
to outstanding Awards.  Appropriate
adjustments may also be made by the Committee in the terms of any Awards under
the Plan to reflect such changes or distributions and to modify any other terms
of outstanding Awards on an equitable basis, including modifications of
performance targets and changes in the length of performance periods.  In addition, other than with respect to Stock
Options, Stock Appreciation Rights and other Awards intended to constitute
Performance-Based Awards, the Committee is authorized to make adjustments to
the terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events affecting the Company or any of
its Subsidiaries or the financial statements of the Company, or in response to
changes in applicable laws, regulations, or accounting principles.  Notwithstanding the foregoing, (i) any
adjustment with respect to an Incentive Stock Option shall comply with the rules of
424(a) of the Code, (ii) any adjustment with respect to a Stock
Option that is not an Incentive Stock Option shall comply with the rules of
Section 409A of the Code, and (iii) in no event shall any adjustment
be made which would render any Incentive Stock Option granted hereunder other
than an incentive stock option for purposes of Section 422 of the Code.

 

13.                               Change In Control

 

a.             Accelerated Vesting.  Notwithstanding any other provision of this
Plan, if there is a Change in Control of the Company (as defined in Section 13b),
all unvested Awards granted under the Plan shall become fully vested
immediately upon the occurrence of the Change of Control, unless otherwise
determined by the Committee as set forth in the Award Agreement, and such
vested Awards shall be paid out or settled, as applicable, to the extent
determined by the Committee. 
Notwithstanding the foregoing, to the extent an amount is subject to Section 409A
of the Code, no amounts payable pursuant to this Section 13 shall be
payable unless the event triggering such payment would constitute a “change in
control” as defined in Section 409A of the Code.

 

b.             Definition.  For purposes of this Section 13, (i) if
there is an employment agreement or a change in control agreement between the
participant and the Company or any of its Subsidiaries in effect, “Change in
Control” shall have the same definition as the definition of “Change in Control”
contained in such employment agreement or change in control agreement (unless
such definition does not comply with Section 409A(2)(c)(v) of the
Code), or (ii) if

 

8

 

“Change in Control” is not defined in such employment agreement or
change in control agreement (or such definition does not comply with Section 409A(2)(c)(v) of
the Code), or if there is no employment agreement or change in control
agreement between the participant and the Company or any of its Subsidiaries in
effect, a “Change in Control” of the Company shall be deemed to have occurred
upon any of the following events:

 

(1)                                  any person or
other entity (other than any of the Company’s Subsidiaries or any employee
benefit plan sponsored by the Company or any of its Subsidiaries) including any
person as defined in Section 13(d)(3) of the Exchange Act, becomes
the beneficial owner, as defined in Rule 13d-3 under the Exchange Act,
directly or indirectly, of more than 50% of the total combined voting power of
all classes of capital stock of the Company normally entitled to vote for the
election of directors of the Company (the “Voting Stock”);

 

(2)                                  the Company
consummates the sale of all or substantially all of the property or assets of
the Company;

 

(3)                                  the Company
consummates a consolidation or merger of the Company with another corporation
(other than with any of the Company’s Subsidiaries), and as a result,  the stockholders of the Company immediately
before the occurrence of the consolidation or merger own, in the aggregate, not
more than 50% of the Voting Stock of the surviving entity; or

 

(4)                                  a change in the
Company’s Board occurs with the result that, within any 12-month period, the
members of the Board as of the beginning of such period (the “Incumbent
Directors”) no longer constitute a majority of such Board, provided that any
person becoming a director (other than a director whose initial assumption of
office is in connection with an actual or threatened election contest or the
settlement thereof, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose election or
nomination for election was supported by at least a majority of the then
Incumbent Directors shall be considered an Incumbent Director for purposes
hereof.

 

This definition shall be interpreted and applied as
necessary to avoid imposition of the taxes and interest under Section 409A
of the Code.

 

14.                               Transferability

 

Each Award granted under the Plan to a participant shall not be
transferable otherwise than by will or the laws of descent and distribution and
shall be exercisable, during the participant’s lifetime, only by the
participant.  Notwithstanding the
foregoing, the Committee may in its sole discretion allow for the transfer of
an Award (other than an Incentive Stock Option) to other persons or entities,
subject to such conditions or limitations as the Committee may establish.

 

9

 

15.                               Other Provisions

 

Awards granted under the Plan may also be subject to such other
provisions (whether or not applicable to the Award granted to any other
participant) as the Committee determines on the date of grant to be
appropriate, including, without limitation, for the installment purchase of
Common Stock under Stock Options, for the installment exercise of Stock
Appreciation Rights, to assist the participant, excluding an officer or a
director, in financing the acquisition of Common Stock, for the forfeiture of,
or restrictions on resale or other disposition of, Common Stock acquired under
any form of the Award, for the acceleration of exercisability or vesting of
Awards in the event of a change in control of the Company, or to comply with
federal and state securities laws, or understandings or conditions as to the
participant’s employment, in addition to those specifically provided for under
the Plan.  In addition, except as
otherwise provided herein, a participant may defer receipt or payment of any
Award granted under this Plan, in accord with the terms of any deferred
compensation plan or arrangement of the Company.

 

16.                               Fair Market Value

 

For purposes of this Plan and any Awards granted hereunder, Fair Market
Value shall mean (i) the closing price of Common Stock on the date of
calculation (or on the last preceding trading date if Common Stock was not
traded on such date) if Common Stock is readily tradeable on a national
securities exchange or other market system or (ii) if Common Stock is not
readily tradeable, the amount determined by the Committee in a manner
consistent with Section 409A of the Code, or, in the case of shares of
Common Stock underlying Incentive Stock Options, the amount determined by the
Committee in a manner consistent with Section 422 of the Code.

 

17.                               Withholding

 

At such time that the delivery of shares of Common Stock or other
disposition of an Award to a participant becomes subject to tax withholding
requirements, the Company may require that the participant 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 elect
to pay such amount by having the Company withhold shares of Common Stock which
would otherwise be delivered to such participant having an aggregate Fair
Market Value equal to such amount.

 

18.                               Tenure

 

A participant’s right, if any, to continue to serve the Company as an
officer, other key employee, director or otherwise shall not be enlarged or
otherwise affected by his or her designation as a participant under the Plan.

 

19.                               Unfunded Plan

 

Participants shall have no right, title, or interest whatsoever in or
to any investments which the Company may make to aid it in meeting its obligations
under the Plan.  Nothing contained in the
Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship between
the Company and any

 

10

 

participant, beneficiary, legal representative or any
other person.  To the extent that any
person acquires a right to receive payments from the Company under the Plan,
such right shall be no greater than the right of an unsecured general creditor
of the Company.  All payments to be made
hereunder shall be paid from the general funds of the Company and no special or
separate fund shall be established and no segregation of assets shall be made
to assure payment of such amounts except as expressly set forth in the
Plan.  The Plan is not intended to be
subject to the Employee Retirement Income Security Act of 1974, as amended.

 

20.                               No Fractional Shares

 

No
fractional shares of Common Stock shall be issued or delivered pursuant to the
Plan or any Award.  The Committee shall
determine whether cash, or Awards, or other property shall be issued or paid in
lieu of fractional shares or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.

 

21.                               Duration, Amendment and Termination

 

No Award shall be granted more than ten years after the Effective Date;
provided, however, that the terms and
conditions applicable to any Award granted prior to such date may thereafter be
amended or modified by mutual agreement between the Company and the participant
or such other persons as may then have an interest therein.  Also, by mutual agreement between the Company
and a participant under this Plan or under any other present or future plan of
the Company, Awards may be granted to such participant in substitution and
exchange for, and in cancellation of, any Awards previously granted to such
participant under this Plan, or any other present or future plan of the
Company, provided that, such substitution or exchange is permitted under
applicable law, including, but not limited to, Sections 409A and 422 of the
Code.  The Board or the Committee may
amend the Plan from time to time or suspend or terminate the Plan at any time.  However, no action authorized by this Section 21
shall reduce the amount of any existing Award or change the terms and
conditions thereof without the participant’s consent.  Notwithstanding the foregoing in this Section 21,
no amendment of the Plan and no amendment of any Award shall, without approval
of the stockholders of the Company, (i) increase the total number of
shares which may be issued under the Plan or the maximum number of shares with
respect to Stock Options, Stock Appreciation Rights and other Awards that may
be granted to any individual under the Plan; (ii) modify the requirements
as to eligibility for Awards under the Plan; (iii) permit Stock Options,
Stock Appreciation Rights or other Awards encompassing rights to purchase
Common Stock to be repriced, replaced or regranted through cancellation, or by
lowering the per-share exercise price of a previously granted Stock Option or
the Grant Price of a previously granted Stock Appreciation Right, or the
purchase price of any other previously granted Award that encompasses the right
to purchase Common Stock; or (iv) have the effect of disqualifying any
Incentive Stock Options previously granted hereunder.

 

11

 

22.                               Compliance with Law

 

a.             Governing
Law.  This Plan, Awards granted hereunder
and actions taken in connection herewith shall be governed and construed in
accordance with the laws of Delaware (regardless of the law that might
otherwise govern under applicable Delaware principles of conflict of laws).

 

b.             Section 409A
Compliance.  Notwithstanding any other
provision of this Plan to the contrary, all Awards under this Plan shall be
designed and administered in a manner that does not result in the imposition of
tax or penalties under Section 409A of the Code.

 

23.                               Severability

 

In case any provision of this Plan shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining  provisions shall not in any way be affected
or impaired thereby.

 

24.                               Effective Date

 

a.             The
Plan shall be effective as of the date on which the Plan is approved by the
stockholders of the Company at an annual meeting or any special meeting of
stockholders of the Company (the “Effective Date”) and such approval of
stockholders shall be a condition to the right of each participant to receive
Awards hereunder.

 

b.             This
Plan shall terminate on the 10th anniversary of the Effective Date (unless
sooner terminated by the Board).

 

*   *   *

 

As adopted by the Board of Directors of 

Knoll, Inc. as of May 5, 2010

 

12

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