Document:

EXHIBIT 10.31

 

Performance Vesting

 

RESTRICTED SHARE AGREEMENT

UNDER THE

KNOLL INC.

2010 STOCK INCENTIVE PLAN

 

THIS AGREEMENT is made effective as of the          day of                       , 20     (the “Grant Date”), between Knoll, Inc., a Delaware corporation (the “Company”), and                                (the “Grantee”).  Except as otherwise specifically provided herein, capitalized terms used herein shall have the meanings attributed thereto in the Knoll, Inc. 2010 Stock Incentive Plan (the “Plan”).  All references to employment and termination of employment herein shall also relate to any consulting relationship, directorship or similar relationship between the Company or a Subsidiary and the Grantee, and the termination thereof.

 

WHEREAS, pursuant to the Plan, the Company desires to grant the Grantee Restricted Shares on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Grant of Restricted Shares.  The Company hereby grants to the Grantee                                Restricted Shares (the “Restricted Shares”) on the terms and conditions set forth herein.  The Restricted Shares granted hereunder shall be registered in the Grantee’s name, but the certificates evidencing such Restricted Shares shall be appropriately legended and retained by the Company during the period prior to the vesting of such shares as set forth in Section 3 hereof (the “Restriction Period”).  Upon request, the Grantee shall execute a stock power, in blank, with respect to such Restricted Shares and deliver the same to the Company.  The Grantee expressly acknowledges receipt of a copy of the Plan and agrees to be bound by all of the provisions of this Agreement and the Plan.

 

2.                                       Non-Transferability.  During the Restriction Period, the Grantee may not sell, transfer, pledge, or otherwise encumber or dispose of the Restricted Shares.

 

3.                                       Vesting and Lapse of Restrictions; Forfeiture.

 

(a)                                  Definitions.  For purposes of this Agreement, the following capitalized terms shall have the following meanings:

 

(i)                                     “Cause” means Cause as defined in any employment agreement between the Grantee and the Company or any Subsidiary or, in the absence of any such definition, means (A) the substantial and continued failure of the Grantee to perform material duties reasonably required of the Grantee by the Company or any Subsidiary or the Company’s Board of Directors, as applicable (it being understood that a failure to attain performance objectives shall not in and of itself be treated as a failure to perform material duties for purpose of this clause (A)) for a period of not less than thirty (30) consecutive days, provided notice in 

 

 

writing from the Company or its Board of Directors, as applicable, is given to the Grantee specifying in reasonable detail the circumstances constituting such substantial and continued failure, (B) conduct by the Grantee substantially disloyal to the Company which conduct is identified in reasonable detail by notice in writing from the Company or the Board of Directors, as applicable, and which conduct, if susceptible of cure, is not cured by the Grantee within 30 days of the Grantee’s receipt of such notice, (C) any act of fraud, embezzlement or misappropriation by the Grantee against the Company or any Subsidiary, (D) the conviction of the Grantee of a felony or plea by the Grantee of guilty or “nolo contendre” to the charge of a felony, or (E) in the case of a Grantee who is a director of the Company, removal of the Grantee from the Board of Directors for cause under applicable law.  The definition of “Cause” herein shall not modify, amend or otherwise affect the definition of “Cause” in any employment or other agreement with the Company or any Subsidiary.

 

(ii)                                  “Disability” means Disability as defined in any employment agreement between the Grantee and the Company or any Subsidiary or, in the absence of any such definition, means any physical or mental disability or infirmity that prevents the performance of the Grantee’s duties with the Company or Subsidiary for a period of (i) ninety (90) consecutive days or (ii) one hundred eighty (180) non-consecutive days during any twelve (12) month period.  The definition of “Disability” herein shall not modify, amend or otherwise affect the definition of “Disability” in any employment or other agreement with the Company or any Subsidiary.

 

(iii)                               [Deleted]

 

(iv)                              “Material Acquisition or Divestiture” shall mean any acquisition or divestiture or other business combination not involving a Change in Control, that has or will result in an increase or decrease in Operating Profits exceeding $                         USD (the “Materiality Threshold”).  An acquisition (or business combination) will be deemed to result in an increase in Operating Profits exceeding the Materiality Threshold if the acquired business’s operating profits measured over the most recently completed fiscal year immediately preceding the date of acquisition (or business combination) exceeded $                           USD.  A divestiture will be deemed to result in a decrease in Operating Profits exceeding the Materiality Threshold if the divested business’ operating profits measured over the most recently completed fiscal year  immediately preceding the divestiture exceeded $                           USD.

 

(v)                                 “OP Determination Date” shall mean the date on which the Committee under the Plan makes a final determination of Operating Profits for any fiscal year.

 

(vi)                              “Operating Profits” for any fiscal year means the Company’s net operating income for such fiscal year.  The determination of “Operating Profits” shall be made from the Company’s books and records.  Such books and records shall be maintained in accordance with U.S. generally accepted accounting principles and the Company’s internal accounting policies and procedures consistently applied over each of the fiscal years during the Restriction Period.  Notwithstanding the foregoing, extraordinary and one-time items of income and expense, such as gains on sales of fixed assets, transactions outside of the ordinary course of

 

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business (bank refinancings, IPO/Secondary stock offerings, etc.), and restructuring costs, in each case, shall be excluded from the determination of Operating Profits for the fiscal year in which the extraordinary or one-time item of income or expense occurs.  In the event that a Material Acquisition or Divestiture occurs, other than the divestiture of a business that generated an operating loss in the twelve (12) months preceding such divestiture, the Operating Profits target for the fiscal year of the transaction (on a pro rata basis) and all subsequent fiscal years (on a full basis) shall be adjusted to eliminate the impact of the addition of Operating Profits, or the decrease of Operating Profits resulting from the transaction, but only to the extent that additional Operating Profits or the decreased Operating Profits exceed the Materiality Threshold.  For example, the acquisition of an entity that generated Operating Profits of $                         USD in the 12 months preceding the acquisition shall cause an upward adjustment in the Operating Profit Targets by $                             USD for the year of acquisition (on a pro rata basis) and for all future years (on a full basis).  The Company’s Finance Department shall make an initial determination of Operating Profits for each fiscal year during the Restriction Period.  The Company’s auditors shall review the Finance Department’s determination.  The Committee shall take into account the Finance Department’s determination and the Company’s auditors’ review and make the final determination of Operating Profits as soon as practicable after the end of each fiscal year.

 

(vii)                           “Potential Vesting Date” shall mean the Trading Day that is the fourth Trading Day immediately following the date that the Company publicly announces earnings for any fiscal quarter or any fiscal year.

 

(viii)                        “Pro Rata Vested Amount” shall have the meaning set forth in Section 3(e)(i) below.

 

(ix)                                “Qualified Termination” shall mean a termination of employment with the Company and all Subsidiaries on account of Disability, death or upon a Without Cause Termination.

 

(x)                                   “Subsidiary” shall mean an entity that the Company owns, whether directly or indirectly, greater than fifty percent (50%) of such entity’s capital stock.

 

(xi)                                [Deleted]

 

(xii)                             “Trading Day” shall mean any day that the New York Stock Exchange is open for trading.

 

(xiii)                          “Without Cause Termination” shall mean a termination of employment by the Company or a Subsidiary without Cause.

 

(b)                                 Cliff Vesting on Third Anniversary.  Except as otherwise specifically provided in this Section 3, the vesting of any Restricted Share is contingent on the Grantee’s continuous employment by the Company or a Subsidiary (or service on the board of the Company or any subsidiary), from the Grant Date through the vesting date.  The Restriction

 

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Period with respect to any Restricted Share shall commence on the Grant Date and shall lapse as to such Restricted Share on the date that such share becomes vested pursuant to this Section 3.  Except as otherwise provided in this Section 3 and to the extent such vesting has not been accelerated pursuant to the achievement of Operating Profit targets or upon a termination of employment or a Change in Control, as set forth below, the Restricted Shares shall vest, and the restrictions imposed thereon shall lapse, on the third anniversary of the Grant Date.

 

(c)                                  Accelerated Vesting on Achievement of Operating Profit Targets.  The Restricted Shares may vest, and the restrictions imposed thereon may lapse, earlier upon the Company’s achievement of Operating Profits as follows: (i) one-third (1/3) of the Restricted Shares shall vest on the next Potential Vesting Date following the OP Determination Date for the first fiscal year (commencing with fiscal 2011) that the Company achieves $                                   USD in Operating Profits; and (ii) an additional one-third (1/3) of the Restricted Shares shall vest on the next Potential Vesting Date following the OP Determination Date for the first fiscal year (commencing with fiscal 2012) that the Company achieves $                                     USD in Operating Profits.  Notwithstanding the foregoing, no more than one-third (1/3) of the Restricted Shares shall vest on the first or second Potential Vesting Date; provided, however, that if an annual Operating Profits target is missed on the first Potential Vesting Date, two-thirds (2/3) of the Restricted Shares will vest on the second Potential Vesting Date if the Company achieves $                                   USD in Operating Profits on the next potential Vesting Date following the second OP Determination Date.

 

(d)                                 Accelerated Vesting on a Change in Control.  Notwithstanding anything herein to the contrary, in the event that a Change in Control (as defined in Exhibit A hereto) occurs while the Grantee is employed with the Company or a Subsidiary, a pro rata portion of the Restricted Shares shall immediately become fully vested and the restrictions imposed thereon shall lapse on a pro rata basis upon such Change of Control.  The number of Restricted Shares that shall vest on account of a Change in Control shall be determined by multiplying all of the Restricted Shares (including vested and unvested) by a fraction, the numerator of which shall be the number of full months of employment from the Grant Date through the date of the Change in Control and the denominator of which shall be 36, and then subtracting the number of Restricted Shares that had vested prior to the date of the Change in Control; provided, however, that in no event shall a Change in Control result in forfeiture of any Restricted Shares vested prior to such Change in Control.  Notwithstanding anything herein to the contrary, to the extent that a Change in Control occurs following December 31 of a fiscal year in which the Company achieves an Operating Profit Target for the first time but prior to the next Potential Vesting Date following the OP Determination Date for such fiscal year, the number of Restricted Shares subject to vesting on that next Potential Vesting Date following such OP Determination Date shall immediately vest upon such Change in Control.

 

(e)                                  Accelerated Vesting on Termination of Employment.  If the Grantee shall cease to be employed by the Company and all Subsidiaries by reason of a Qualified Termination, a pro rata portion of the Restricted Shares shall immediately vest and the Restriction Period thereon shall lapse on a pro rata basis as follows:

 

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(i)                                     The number of Restricted Shares that shall vest in the event of a Qualified Termination shall be determined by multiplying all of the Restricted Shares (including vested and unvested) by a fraction, the numerator of which shall be the number of full months of employment from the Grant Date through the date of termination and the denominator of which shall be 36, and then subtracting the number of Restricted Shares that had vested prior to the date of the Qualified Termination (the “Pro Rata Vested Amount”); provided, however that in no event shall a Qualified Termination result in forfeiture of any Restricted Shares vested prior to such Qualified Termination.

 

(ii)                                  The date of such pro rata vesting in the event of a Qualified Termination shall be the date on which such Qualified Termination occurs.

 

(f)                                    Forfeiture on Termination of Employment.  If the Grantee’s employment with the Company and all Subsidiaries is terminated for any reason, except as specifically provided in this Section 3(f) and except for those Restricted Shares that are subject to pro rata vesting upon a Qualified Termination, the Restricted Shares, to the extent not vested prior to such termination, shall be immediately forfeited to the Company and the Grantee shall have no further rights with respect to such shares, but all vested shares shall continue to be owned by the Grantee.  Notwithstanding anything herein to the contrary, to the extent that Grantee’s employment with the Company and all Subsidiaries is terminated for any reason following December 31 of a fiscal year in which the Company achieves an Operating Profit target for the first time but prior to the next Potential Vesting Date following the OP Determination Date for such fiscal year, the number of Restricted Shares subject to vesting on that next Potential Vesting Date shall not be forfeited upon such termination of employment but rather such Restricted Shares shall immediately vest on the date of such termination.

 

(g)                                 Committee Determination.  Except as otherwise provided in Section 3, whether employment has been terminated for the purposes of this Agreement, and the reasons therefore, shall be determined by the Committee, whose determination shall be final, binding and conclusive.

 

4.                                       Delivery of Share Certificates.  Upon the vesting of any Restricted Shares granted hereunder but subject to satisfaction of the federal, state and local tax withholding requirements set forth below, the stock certificates evidencing such Restricted Shares shall be delivered promptly to the Grantee.  In the case of the Grantee’s death, such certificates will be delivered to the beneficiary designated in writing by the Grantee pursuant to a form of designation provided by the Company, to the Grantee’s legatee or legatees, or to his personal representatives or distributees, as the case may be.

 

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

 

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6.                                       Governing Law.  This Agreement shall be construed and interpreted in accordance with the internal laws of the State of Delaware, without reference to the principles of conflicts of law thereof.  Each party hereby irrevocably consents and submits to the personal jurisdiction of and venue in the United States District Court - District of Delaware and the Delaware State courts, in any legal action, equitable suit or other proceeding arising out of or related to this Agreement.

 

7.                                       Withholding.  The delivery to the Grantee of stock certificates representing Restricted Shares that have vested shall be subject to the payment by the Participant to the Company of all federal, state or local taxes required by law to be withheld by the Company.  The Grantee may be required to pay to the Company in cash or cash equivalents, either prior to or concurrent with the delivery of certificates representing Restricted Shares that have vested, the amount required by law to be withheld by the company.  The Company, in its sole discretion, may withhold from the number of shares of Common Stock to be delivered upon vesting of the Restricted Shares such number of shares having an aggregate fair market value equal to minimum amount of the federal, state and local taxes required by law to be withheld by the Company.  The Committee may establish other rules and procedures to allow the Grantee to satisfy and to facilitate the required tax withholding from time to time.

 

8.                                       No Employment Rights.  The establishment of the Plan and the grant of Restricted Shares hereunder shall not be construed as granting to the Grantee the right to remain in the employ of the Company or any Subsidiary, nor shall the Plan or this Agreement be construed as limiting the right of the Company or any Subsidiary to discharge the Grantee from employment at any time for any reason whatsoever, with or without Cause.

 

9.                                       No Liability.  No member of the Committee or the Board of Directors of the Company shall be personally liable by reason of any contract or other instrument executed by such member or on his or her behalf in his or her capacity as a member of the Committee or Board nor for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each member of the Committee, each member of the Board 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 or this Agreement 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 or this Agreement unless arising out of such person’s own fraud or bad faith; provided, however, that approval of the 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.

 

10.                                 Headings.  Headings are for the convenience of the parties and are not deemed to be a part of this Agreement.

 

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11.                                 Plan.  The terms of the Plan, a copy of which is attached hereto, are made part of this Agreement and are incorporated herein by reference.  In the event of any conflict between the terms of the Plan and the terms of this Agreement, the terms of the Plan shall govern.

 

EXECUTED effective as of the day and year first written above.

 

 

	
 
    	
 
    	
KNOLL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
GRANTEE:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    

 

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EXHIBIT A

 

Change In Control

 

For purposes of this Agreement, a “Change in Control” of the Company shall be deemed to have occurred upon any of the following events:

 

(i)                                     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 Securities Exchange Act of 1934, as amended (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”);

 

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

 

(iii)                               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

 

(iv)                              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.EXHIBIT 10.32

 

NON-QUALIFIED
 STOCK OPTION AGREEMENT
 UNDER THE
 KNOLL, INC.
 2010 STOCK INCENTIVE PLAN

 

THIS AGREEMENT, made as of this        day of           , 20     by and between Knoll, Inc., a Delaware corporation (the “Company”), and                              (the “Optionee”).

 

W  I  T  N  E  S  S  E  T  H:

 

WHEREAS, the Optionee is now employed or engaged as a consultant by the Company or one of its subsidiaries in a key capacity, or is a director of the Company, and the Company desires to have Optionee remain in such employment and to afford Optionee the opportunity to acquire, or enlarge, Optionee’s ownership of the Company’s Common Stock, par value $.01 per share (“Stock”), so that Optionee may have a direct proprietary interest in the Company’s success (all references to employment hereinafter shall relate to any consulting, directorship or similar relationship, as applicable, and all references to employment or termination of employment with or by the Company shall include employment with or by any of the Company’s direct or indirect subsidiaries, as applicable);

 

NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties hereto hereby agree as follows:

 

1.                                       Grant of Option.  Subject to the terms and conditions set forth herein and in the Company’s 2010 Stock Incentive Plan as amended and/or restated (the “Plan”), the Company hereby grants to the Optionee, during the period commencing on the date of this Agreement and ending years from the date hereof (the “Termination Date”), the right and option (the right to purchase any one share of Stock hereunder being an “Option”) to purchase from the Company, at a price of $[xx.xx] per share, an aggregate of                      shares of Stock.  The Optionee expressly acknowledges receipt of a copy of the Plan and agrees to be bound by all of the provisions of the Plan.

 

2.                                       Limitations on Exercise of Option.  Subject to compliance with the terms and conditions set forth herein, the Optionee may exercise       % of the Options on and after                           , 20      , an additional       % of the Options on and after                        , 20    , an additional       % of the Options on and after                        , 20      , and an additional     % of the Options on and after                 , 20    .  Notwithstanding the vesting provisions in this Section 2, upon a Change in Control (following the date hereof), as defined in the Plan, 100% of the Options, to the extent not previously exercised, shall become fully vested and exercisable.

 

3.                                       Termination of Employment.

 

A.                                   If prior to the Termination Date, the Optionee shall cease to be employed by the Company by reason of a disability, as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), or by reason of retirement on or after age 65, the Options shall remain exercisable until the earlier of the Termination Date or one year after the

 

 

date of cessation of employment to the extent the Options were exercisable at the time of cessation of employment.

 

B.                                     If the Optionee shall cease to be employed by the Company prior to the Termination Date by reason of death, or the Optionee shall die while entitled to exercise any of the Options pursuant to paragraph 3(A) or the second sentence of paragraph 3(C), the executor or administrator of the estate of the Optionee or the person or persons to whom the Options shall have been validly transferred by the executor or administrator pursuant to will or the laws of descent and distribution shall have the right, until the earlier of the Termination Date or one year after the date of death, to exercise the Options to the extent that the Optionee was entitled to exercise them on the date of death, subject to any other limitation contained herein on the exercise of the Options in effect on the date of exercise.

 

C.                                     If the Optionee voluntarily terminates employment with the Company for reasons other than death, disability, or retirement on or after age 65, or if the Optionee’s employment with the Company is terminated for Cause, as hereinafter defined, unless otherwise provided by the Committee, the Options, to the extent not exercised prior to such termination, shall lapse and be canceled.  If the Company terminates the Optionee’s employment without Cause as hereinafter defined, the Options, to the extent exercisable immediately prior to such termination, shall continue to be exercisable until the earlier of the Termination Date or ninety (90) days after the date of such termination.  For purposes of the immediately preceding sentence, any days during the above-mentioned 90-day period that the Optionee is prohibited from selling Stock into the public market on account of any underwriters’ lock-up period or any blackout period imposed by the Company, shall (without duplication) not be counted.

 

D.                                    For purposes of this Agreement, unless otherwise provided in an employment agreement between the Company and the Optionee, “Cause” shall mean:  (i) the substantial and continued failure of the Optionee to perform material duties reasonably required of the Optionee by the Company or any Subsidiary or the Company’s Board of Directors, as applicable (it being understood that a failure to attain performance objectives shall not in and of itself be treated as a failure to perform material duties for purpose of this clause (i)) for a period of not less than thirty (30) consecutive days, provided notice in writing from the Company or its Board of Directors, as applicable, is given to the Optionee specifying in reasonable detail the circumstances constituting such substantial and continued failure, (ii) conduct by the Optionee substantially disloyal to the Company which conduct is identified in reasonable detail by notice in writing from the Company or the Board of Directors, as applicable, and which conduct, if susceptible of cure, is not cured by the Optionee within 30 days of the Optionee’s receipt of such notice, (ii) any act of fraud, embezzlement or misappropriation by the Optionee against the Company or any Subsidiary, (iv) the conviction of the Optionee of a felony or plea by the Optionee of guilty or “nolo contendre” to the charge of a felony, or (v) in the case of an Optionee who is a director of the Company, removal of the Optionee from the Board of Directors for cause under applicable law.  The definition of “Cause” herein shall not modify, amend or otherwise affect the definition of “Cause” in any employment or other agreement with the Company or any Subsidiary.  For purposes of this paragraph, the term “Subsidiary” means an entity that the Company owns, whether directly or indirectly, greater than fifty percent (50%) of such entity’s capital stock.

 

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E.                                      Except as otherwise provided in paragraph 3(D) hereof, whether employment has been or could have been terminated for the purposes of this Agreement, and the reasons therefor, shall be determined by the Committee, whose determination shall be final, binding and conclusive.

 

F.                                      After the expiration of any exercise period described in either of paragraphs 3(A), 3(B) or 3(C) hereof, the Options shall terminate together with all of the Optionee’s rights hereunder, to the extent not previously exercised.  All vesting with respect to the Options shall cease upon the Optionee’s termination of employment with the Company and all Options to the extent unvested at the time of termination shall expire.

 

4.                                       Method of Exercising Option.

 

A.                                   The Optionee may exercise any or all of the Options by delivering to the Company a written notice signed by the Optionee stating the number of Options that the Optionee has elected to exercise at that time, together with full payment of the purchase price of the shares to be thereby purchased from the Company.  Payment of the purchase price of the shares may be made by certified or bank cashier’s check payable to the order of the Company, or, in the sole discretion of the Committee, (i) by surrender or delivery to the Company of shares of Stock or other property acceptable to the Committee in its sole discretion, which Stock or other property shall have a value equal to the purchase price, (ii) after the date of an initial public offering, by delivery to the Committee of a copy of irrevocable instructions to a stockbroker to deliver promptly to the Company an amount of sale or loan proceeds sufficient to pay the purchase price, or (iii) by such other means as the Committee shall allow in it discretion.  Notwithstanding anything herein to the contrary, the Company shall not directly or indirectly extend or maintain credit, or arrange for the extension of credit, in the form of a personal loan to or for any director or executive officer of the Company hereunder in violation of Section 402 of the Sarbanes-Oxley Act of 2002.

 

B.                                     At the time of exercise, the Optionee shall 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 incurred by reason of the exercise or the transfer of shares thereupon.  The Committee may, in its sole discretion, allow for the withholding of shares of Stock by the Company having a value equal to the amount necessary to satisfy all or part of the tax withholding requirements.

 

5.                                       Issuance of Shares.  Subject to any limitations set forth in the Plan, as promptly as practical after receipt of such written notification and full payment of such purchase price and any required income tax withholding amount, the Company shall issue or transfer to the Optionee the number of shares with respect to which Options have been so exercised, and shall deliver to the Optionee a certificate or certificates therefor, registered in the Optionee’s name.

 

6.                                       Successors.  Whenever the word “Optionee” is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Options may be

 

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transferred by will or by the laws of descent and distribution, the word “Optionee” shall be deemed to include such person or persons.

 

7.                                       Non-Transferability.  The Options are not transferable by the Optionee other than by will or the laws of descent and distribution and are exercisable during the Optionee’s lifetime only by Optionee.  No assignment or transfer of the Options, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except by will or the laws of descent and distribution), shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Options shall terminate and become of no further effect.

 

8.                                       Rights as Stockholder.  The Optionee or a transferee of the Options shall have no rights as a stockholder with respect to any share covered by the Options until Optionee shall have become the holder of record of such share, and no adjustment shall be made for dividends or distributions or other rights in respect of such share for which the record date is prior to the date upon which Optionee shall become the holder of record thereof.

 

9.                                       Recapitalizations, Reorganizations, etc.

 

A.                                   The existence of the Options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Stock or the rights thereof or convertible into or exchangeable for Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

 

B.                                     The shares with respect to which the Options are granted are shares of Stock of the Company as presently constituted, but if, and whenever, prior to the delivery by the Company of all of the shares of the Stock with respect to which the Options are granted, the Company shall effect a subdivision or consolidation of shares of the Stock outstanding, without receiving compensation therefor in money, services or property, the number and price of shares remaining under the Options shall be appropriately adjusted.  Such adjustment shall be made by the Committee, whose determination as to what adjustment shall be made, and the extent thereof, shall be final, binding and conclusive.  Any such adjustment may provide for the elimination of any fractional share which might otherwise become subject to the Options.

 

C.                                     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 or shares of Stock or other securities covered by the Options and the Option price thereof.  The Committee shall notify the Optionee of any intended sale of all or substantially all of the Company’s assets within a reasonable time prior to such sale.

 

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D.                                    Except as hereinbefore expressly provided, the issue by the Company of shares of stock of any class, or securities convertible into or exchangeable for shares of stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of options, rights or warrants to subscribe therefor, or to purchase the same, or upon conversion of shares or obligation of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Stock subject to the Options.

 

10.                                 Compliance with Law.  Notwithstanding any of the provisions hereof, the Optionee hereby agrees that Optionee will not exercise the Options, and that the Company will not be obligated to issue or transfer any shares to the Optionee hereunder, if the exercise hereof or the issuance or transfer of such shares shall constitute a violation by the Optionee or the Company of any provisions of any law or regulation of any governmental authority.  Any determination in this connection by the Committee shall be final, binding and conclusive.  The Company shall in no event be obliged to register any securities pursuant to the Securities Act of 1933 (as now in effect or as hereafter amended) or to take any other affirmative action in order to cause the exercise of the Options or the issuance or transfer of shares pursuant thereto to comply with any law or regulation of any governmental authority.

 

11.                                 Notice.  Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided, provided that, unless and until some other address be so designated, all notices or communications by the Optionee to the Company shall be mailed or delivered to the Company at its principal executive office, and all notices or communications by the Company to the Optionee may be given to the Optionee personally or may be mailed to Optionee at the Optionee’s last known address, as reflected in the Company’s records.

 

12.                                 Non-Qualified Options.  The Options granted hereunder are not intended to be incentive stock options within the meaning of Section 422 of the Code.

 

13.                                 Binding Effect.  Subject to Section 7 hereof, this Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.

 

14.                                 Governing Law.  This Agreement shall be construed and interpreted in accordance with the internal laws of the State of Delaware, United States of America, without reference to the principles of conflicts of law thereof.  The parties hereto agree that any action arising out of or relating to this Agreement must be brought in the United States District Court of Delaware.  Alternatively, provided only that the United States District Court for Delaware is deemed to lack subject-matter jurisdiction, the parties consent and agree that any such matter provided for in this sub-paragraph shall be brought in Delaware State court.  All parties hereto expressly agree and consent to the exclusive jurisdiction of the Delaware courts (i.e., Delaware Federal and Delaware State Courts, respectively).

 

15.                                 Plan.  The terms and provisions of, and the defined terms used in, the Plan are incorporated herein by reference.  Unless a different meaning is expressly set forth herein, the defined terms used in this Agreement shall have the same meaning given to such terms in the

 

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Plan.  In the event of a conflict or inconsistency between discretionary terms and provisions of the Plan and the express provisions of this Agreement, this Agreement shall govern and control.  In all other instances of conflicts or inconsistencies or omissions, the terms and provisions of the Plan shall govern and control.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	
 
    	
 
    	
KNOLL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
OPTIONEE:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

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