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PROSPECTUS Registration No. 333-85191
---------- Filed pursuant to Rule 424(b)(3)
1,384,858 Shares
Knoll, Inc.
Common Stock
This prospectus relates to the offer and sale of up to 1,384,858 shares
of our common stock owned by certain of our stockholders. The selling
stockholders may offer their shares publicly or through private transactions at
prevailing market prices or at negotiated prices.
We will not receive any of the proceeds from the sale of the shares by
the selling stockholders. We have agreed to bear all expenses (other than
selling discounts, concessions or commissions) in connection with the
registration and sale of the shares being offered by the selling stockholders.
Our common stock is listed on the NYSE under the symbol "KNL." On
August 19, 1999, the closing price of the common stock, as reported by the NYSE,
was $26-13/16 per share.
We have entered into a merger agreement with Warburg, Pincus Ventures,
L.P. under which a company to be formed by Warburg will merge into Knoll. As a
result of the merger, Warburg and certain members of our management (together
with Knoll employees who may retain shares of common stock issued under Knoll's
stock incentive plans) will become the owners of 100% of the common stock. If
the merger is completed, the shares owned by our public stockholders (including
shares purchased under this prospectus) will be converted into the right to
receive the merger consideration of $28.00 per share. However, completion of the
merger remains subject to various conditions. See "Knoll -- Recent Developments
- -- Merger Agreement."
See "Risk Factors" beginning on page 3 for a discussion of certain
factors that should be considered by prospective investors.
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You should read this prospectus and any prospectus supplement carefully
before you invest.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is August 20, 1999.
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You should rely only on the information contained in or incorporated by
reference in this prospectus or any prospectus supplement. Neither we nor any
selling stockholder has authorized anyone to provide you with different
information. We are not making an offer of shares in any state where the offer
is not permitted. You should not assume that the information in this prospectus
or any prospectus supplement is accurate as of any date other than the date on
the front of those documents.
TABLE OF CONTENTS
PAGE
----
ABOUT THIS PROSPECTUS..........................................................1
KNOLL..........................................................................1
RISK FACTORS...................................................................3
FORWARD-LOOKING INFORMATION...................................................10
USE OF PROCEEDS...............................................................10
SELLING STOCKHOLDERS..........................................................11
PLAN OF DISTRIBUTION..........................................................12
GENERAL INFORMATION...........................................................13
LEGAL OPINIONS................................................................13
EXPERTS.......................................................................13
WHERE YOU CAN FIND MORE INFORMATION...........................................13
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC utilizing a "shelf" registration process. From time to time, we may
provide a prospectus supplement to add, update or change information contained
in this prospectus. You should read both this prospectus and any prospectus
supplement together with the additional information described under the heading
"Where You Can Find More Information."
KNOLL
General
We are engaged in the design, manufacture and distribution of office
furniture products and accessories, focusing on the middle to high-end of the
contract furniture market. Our principal executive offices are located at 1235
Water Street, East Greenville, Pennsylvania 18041, and our telephone number is
(215) 679-7991. Our web-site is www.knoll.com.
We offer a broad range of office furniture products and accessories
that support our strategy of being a one-stop source for quality office
furniture. Our five basic product categories offered in North America are as
follows:
o office systems,
o seating,
o storage solutions and filing cabinets,
o desks and casegoods and
o tables.
We also offer specialty products that are sold under the KnollStudio,
KnollExtra, KnollTextiles and Spinneybeck names. KnollStudio features our
signature design classics, including high image side chairs, sofas, desks and
tables for both office and home use, while KnollExtra, KnollTextiles and
Spinneybeck feature products that complement our office system and seating
product categories.
Recent Developments -- Merger Agreement
On June 21, 1999, we announced that we had entered into an Agreement
and Plan of Merger (as amended on July 29, 1999, the "Merger Agreement") under
which a company to be formed by Warburg, Pincus Ventures, L.P. ("Warburg") will
merge into Knoll (the "Merger"). As a result of the Merger, Warburg and certain
members of our management (together with Knoll employees who may retain shares
of common stock issued under Knoll's stock incentive plans) will become the
owners of 100% of the common stock.
If the Merger is completed, the shares owned by our public stockholders
(including shares purchased under this prospectus) will be converted into the
right to receive the merger consideration of
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$28.00 per share. If the Merger is not completed prior to November 18,
1999, the merger consideration of $28.00 per share will be increased at an
annual rate of 6.5% from November 18, 1999 until the earlier of the completion
of the Merger or January 17, 2000. However, there will not be any additional
payment if the Merger is completed prior to November 18, 1999.
Completion of the Merger is subject to, among other things:
o approval of the Merger Agreement at our 1999 annual meeting of
stockholders by the holders of at least a majority of the outstanding
common stock;
o receipt of financing for the transaction as provided in the Merger
Agreement;
o receipt of consents to the Merger from the holders of a majority of
our outstanding senior subordinated notes;
o the special committee of Knoll's board of directors shall not have
withdrawn its recommendation that:
o the Merger is fair to and in the best interest of Knoll's public
stockholders, and
o Knoll's board of directors approve the Merger Agreement;
o there shall have been no material adverse change in the business,
assets, liabilities, results of operations or financial condition of
Knoll since December 31, 1998, except as set forth in Knoll's SEC
filings; and
o holders of not more than 10% of the issued and outstanding shares of
common stock shall have exercised their rights of dissent from the
Merger under the Delaware General Corporation Law.
Warburg and certain members of management, who together own a majority
of the outstanding shares of common stock, have agreed to vote their shares in
favor of the Merger. Accordingly, approval of the Merger by our stockholders is
assured. In addition, we have received a commitment from Bank of America, N.A.,
The Chase Manhattan Bank and Merrill Lynch & Co. to provide, subject to certain
conditions, the financing necessary to complete the Merger. We also have entered
into an agreement with the holder of a majority of our outstanding senior
subordinated notes. Under this agreement, the holder consented to the Merger,
and Knoll agreed to pay the holder (and the other holders of such notes who
similarly consent), promptly after completion of the Merger, $120 per $1,000
principal amount of the notes owned by such holder. We currently expect to
complete the Merger in October 1999.
On June 21, 1999, we also announced that we had entered into a
Memorandum of Understanding with counsel to the plaintiffs in the stockholder
lawsuits arising in connection with the proposed Merger. The Memorandum of
Understanding provides for the settlement of these lawsuits based on the payment
of a per share merger consideration of $28.00 and is subject to, among other
things, completion of definitive documentation relating to the settlement, court
approval and completion of the Merger. Since settlement of the stockholder
lawsuits is a condition to the receipt of financing under the financing
commitments we have received, it is effectively a condition to the closing of
the Merger as well.
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Under the Merger Agreement, the shares of common stock owned by the
selling stockholders upon completion of the Merger will remain outstanding and
will not be converted into the right to receive the merger consideration.
Accordingly, in order to liquidate a portion of their interests in Knoll, the
selling stockholders may sell the shares offered under this prospectus prior to
the Merger. As noted above, if the Merger is completed, any such shares that you
purchase from the selling stockholders will be converted into the right to
receive the merger consideration.
If the Merger is completed, our common stock will cease to be listed on
the New York Stock Exchange and will be deregistered under the Securities
Exchange Act.
RISK FACTORS
Before you invest in our securities, you should be aware of various
risks, including those described below. You should carefully consider these risk
factors together with all other information included or incorporated in this
prospectus before you decide to invest in the common stock.
In particular, we believe that the likelihood of the closing of the
Merger is the most significant factor affecting the market price of the common
stock as of the date of this prospectus. If the Merger is completed, each
stockholder will receive the merger consideration of $28.00 per share but will
not have the ability to benefit from any future appreciation in the value of the
common stock. However, if the Merger is not completed for any reason, the market
price of the common stock will be more likely to reflect the other risks of
ownership of the common stock, including those described below. Moreover,
although we believe completion of the Merger is likely, the market price of the
common stock may decrease substantially if we do not close the Merger for any
reason or if the closing is postponed or delayed for a significant period of
time.
The market value of the common stock is strongly affected by the
pendency of the Merger.
As described above, we intend to complete the Merger, in which our
public stockholders would receive $28.00 per share. If the Merger is not
completed prior to November 18, 1999, the merger consideration of $28.00 per
share will be increased at an annual rate of 6.5% from November 18, 1999 until
the earlier of the completion of the Merger or January 17, 2000. However, there
will not be any additional payment if the Merger is completed prior to November
18, 1999. The Merger is currently expected to close in October 1999.
We believe that completion of the Merger is likely because, among other
things, Warburg and certain members of our management own a majority of the
common stock and have informed us that they intend to vote in favor of adopting
the Merger Agreement, we have received written financing commitments with
respect to the Merger and we have received the consent to the Merger from the
holder of a majority of our outstanding senior subordinated notes. If the Merger
is completed, you will receive the merger consideration of $28.00 per share
(plus the additional payment, if any, described above), but you will not have
the opportunity to share in Knoll's future earnings and growth.
However, as completion of the Merger remains subject to various
conditions, we cannot assure you that the Merger will be completed. The merger
consideration represents a premium of approximately 84% over the $15.25 closing
market price of the common stock on March 23, 1999, the last full trading day
before we announced we had received the initial merger proposal from Warburg and
management. If the Merger is not completed for any reason or if it is
significantly delayed, the
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price of the common stock may trade at a level substantially below its current
price. See "Knoll -- Recent Developments -- Merger Agreement."
Competition in the furniture industry may affect our ability to grow
and to conduct our business profitably.
The office furniture industry is highly competitive, with a significant
number of competitors offering similar products. Many of our competitors,
especially those in North America, are large and have significantly greater
financial, marketing, manufacturing and technical resources than we do.
Our most significant competitors in our primary markets are:
o Steelcase Inc.,
o Herman Miller, Inc.,
o Haworth, Inc. and
o HON INDUSTRIES Inc.
These competitors have a substantial volume of furniture installed at
businesses throughout the country. This installed base of furniture provides
these competitors with a continual source of demand for further products and
enhancements. Moreover, the products of these competitors have strong acceptance
in the marketplace. It is also possible that our competitors will develop
alternative product designs that could give them a competitive advantage over
us.
We also face significant price competition from our competitors and may
encounter competition from new market entrants. We cannot assure you that we
will be able to compete successfully in our markets in the future.
Our efforts to grow our business face many challenges.
We are seeking to increase our sales and market share by introducing
new products and products for new category segments where our current market
share is relatively low. We cannot assure you that our new products will achieve
the same degree of success as that achieved historically by our products.
Additionally, we cannot assure you that we will be able to replicate our
historical success in the office systems category in markets for other furniture
products, such as tables, seating and storage.
Our strategy for introducing new products involves continuing our
practice of aligning with independent architects and designers who are able to
design high quality products consistent with our image. It is possible that we
may fail to create successful relationships with independent architects and
designers with whom we desire to form relationships or that these relationships
may fail to produce designs of sufficient quality that achieve consumer
acceptance.
The introduction of new products requires the coordination of the
design, manufacturing and marketing of these products. Our success in these
areas may be adversely affected by factors beyond our control. For example, new
product lines may involve materials, processes and equipment with which we are
not experienced or are less experienced. Accordingly, we may launch a particular
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product later than we originally anticipated, which could have an adverse effect
on the success of the product.
Further, our growth strategy depends in part on our ability to increase
our production volume on a timely basis while maintaining product quality.
Manufacturers often encounter difficulties in increasing production volumes,
including problems involving delays, quality control and shortages of qualified
personnel. We may encounter these or other problems.
Our growth strategy also depends on selling a broader range of products
to existing customers, developing new customers in our existing markets and
expanding into new secondary markets. We may be impeded by factors beyond our
control, including general economic factors and business conditions affecting
these markets or these customers. Moreover, we may encounter difficulties
hiring, developing or training successful sales personnel and dealers. We must
also continue to develop our management information systems.
We have borrowed substantial amounts from creditors and are subject to
restrictive debt covenants.
As of June 30, 1999, we had total consolidated outstanding debt of
approximately $164.2 million. Moreover, we may incur additional indebtedness
from time to time to finance acquisitions or capital expenditures or for other
purposes.
Our indebtedness could have important consequences to holders of the
common stock, because:
o a portion of our cash flow from operations must be dedicated to fund
scheduled payments of principal and debt service and will not be
available for other purposes;
o our ability to obtain additional debt financing in the future for
working capital, capital expenditures, research and development or
acquisitions may be restricted; and
o our level of indebtedness could limit our flexibility to react to
changes in the office furniture industry or in economic conditions
generally.
Additionally, the terms of our revolving credit facility and senior
subordinated notes impose certain operating and financial restrictions on us.
These restrictions may limit our ability to respond to changing business and
economic conditions and to secure additional financing, if needed. We might also
be prevented from engaging in transactions to further our growth or other
transactions we consider beneficial. A breach of any of these restrictions could
result in a default under our revolving credit facility or the indenture
relating to the senior subordinated notes, thereby resulting in the acceleration
of payments under the obligations. If payments to the lenders under the
revolving credit facility or payments to the holders of the notes were to be
accelerated, it is possible that our assets would not be sufficient to repay our
indebtedness in full.
We depend on key personnel.
Our operations are dependent, to a significant extent, on the continued
efforts of certain of our executive officers, including Burton B. Staniar, our
Chairman, John H. Lynch, our President and Chief Executive Officer, and Kathleen
G. Bradley and Andrew B. Cogan, our Executive Vice Presidents. Knoll has entered
into one-year employment agreements with Messrs. Staniar, Lynch and
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Cogan, subject to automatic one-year extensions unless Knoll or the
employee gives 60 days notice not to renew. These agreements contain one-year
non-competition provisions.
If these executives become unable to continue in their present role, or
if we are unable to attract and retain other skilled employees, our business
could be materially adversely affected.
We rely on our dealers but generally only have short term commitments
from them.
We rely, to some extent, on a network of independent dealers to market
our products to customers. Our dealers currently operate primarily under
one-year non-exclusive agreements. It is possible that our dealers will choose
to end their relationships with us. If they do so, we may not be able to replace
them satisfactorily.
In addition, consolidation of the office furniture distribution
industry has altered our dealer relationships. We have ended some relationships
with dealers that have been purchased by a consolidator or who carry the
products of our major competitors. Because we have a preference for locally
owned entrepreneurial dealers that offer primarily Knoll products, we may
terminate additional dealers that do not satisfy this preference in the future.
The loss of certain dealers or the termination of dealer relationships could
result in disputes or hinder the way we market and distribute our products.
Knoll is controlled by Warburg and management.
Warburg and our directors, officers and other management employees
beneficially own approximately 60% of the common stock. As a result, these
stockholders have the power to elect our Board of Directors and take other
corporate actions requiring stockholder approval, as well as to dictate our
corporate direction and policies.
In addition, under a stockholders agreement, Warburg and other
stockholders who together own approximately 60% of the common stock have agreed
to vote their shares for four directors designated by Warburg if Warburg owns
50% or more of the common stock, three directors if it owns 25% or more, two
directors if it owns 15% or more and one director if it owns 5% or more. Since
Warburg owns more than 50% of the common stock, it is entitled under the
stockholders agreement to nominate four Board members. Accordingly, Warburg has
the ability to substantially influence any corporate action requiring Board
approval.
In addition, Messrs. Staniar and Lynch have employment agreements which
provide that they will be appointed to the Board of Directors during the
duration of their employment.
In addition, we cannot assure you that in any transfer of a controlling
interest in Knoll any other holders of common stock will be allowed to
participate in any such transaction or will realize any premium with respect to
their shares. These factors may discourage or prevent certain types of
transactions involving an actual or potential change of control.
We rely on patents and other intellectual property.
We own numerous United States and foreign patents, trademarks and
service marks in order to protect certain of our innovations and designs. In
addition, we possess a wide array of unpatented proprietary know-how and common
law trademarks and service marks. Our ability to compete
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effectively with other companies depends, to a significant extent, on our
ability to maintain the proprietary nature of our intellectual property.
However, we may not be sufficiently protected by the claims of our
various patents, trademarks and service marks. Additionally, we may not receive
the pending or contemplated patents, trademarks or service marks for which we
have applied or filed. Our business could be materially adversely affected if we
were unable to maintain the proprietary nature of our intellectual property with
respect to its significant current or proposed products or if our products are
determined to infringe the rights of others.
Additionally, our existing patents, trademarks or service marks may be
challenged, invalidated, canceled, narrowed or circumvented. It is also not
certain that the rights we have been granted will provide significant
proprietary protection or competitive advantages.
In the past, certain of our products have been copied and sold by
others. We try to vigorously enforce our intellectual property rights. However,
we cannot assure you that the copying and sale of our products by others would
not materially adversely affect the sale of our products.
The "year 2000" risk may adversely affect us.
The inability of existing computers used by us and others to recognize
and properly process data as the year 2000 approaches may cause many computer
software applications to fail or reach erroneous results. We have assessed
potential issues for us that may result from the year 2000 problem and are in
the process of replacing our existing North American manufacturing and business
information systems with a new system, which we believe to be year 2000
compliant. We are also taking actions to address issues related to embedded
chips in our manufacturing equipment that may not be year 2000 compliant.
Although we anticipate that the project will be completed during the third
quarter of 1999, we cannot assure you that this will occur. We have experienced
and expect to continue to experience operational issues related to the project
implementation. We are developing and will continue to develop plans to address
these issues as they arise.
In the event we are unable to complete the implementation of the
project on a timely basis, our ability to take customer orders, manufacture and
deliver products on a timely basis, invoice customers and collect payments may
be impaired. We cannot reasonably estimate at this time the amount of lost
revenue or additional expenses that might be expected if this occurs. Failure to
implement the project on a timely basis could have a material adverse effect on
us.
Additionally, the year 2000 readiness of our vendors, dealers and other
third parties (such as utility companies, the U.S. government and customers) on
which we rely could impact our operations. Any failure by us or our vendors,
dealers and other third parties to correct a material year 2000 problem in a
timely manner could result in an interruption in, or a failure of, certain of
our business operations. We have not yet adopted a year 2000 contingency plan.
We may have material environmental liabilities.
We are subject to extensive and changing federal, state, local and
foreign environmental laws and regulations as a result of both our past and
present business operations and the past and present ownership and operation of
our manufacturing plants and real property. These laws and regulations include
those relating to discharges to air, water and land, the handling and disposal
of solid and hazardous waste and the cleanup of properties affected by hazardous
substances. We cannot predict
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what environmental legislation or regulations will be enacted in the future, how
existing or future laws or regulations will be administered or interpreted or
what environmental conditions may be found to exist. We may have to spend
material amounts to comply with more stringent laws or regulations that may be
enacted, or with a stricter interpretation of existing laws. We may also have
potential environmental liabilities of which we are currently unaware.
We are involved from time to time in administrative and judicial
proceedings and inquiries relating to environmental matters, and it is possible
that an administrative judicial proceeding could impose fines, remedial payments
or other costs on us. We have been identified as a potentially responsible party
pursuant to the Comprehensive Environmental Response Compensation and Liability
Act ("CERCLA") for remediation costs associated with waste disposal sites we may
have previously used. CERCLA imposes liability without regard to fault or the
legality of the disposal. The remediation costs at these CERCLA sites are
unknown, but we do not expect any liability we may have under CERCLA to be
material, based on the information currently known to us.
We may experience labor disruptions.
Some of our employees in Grand Rapids, Michigan and in Italy are
represented by unions. While we believe that relations with these unions are
positive, we may encounter difficulties administering our current union
contracts or in negotiating new contracts. In addition, we have experienced
brief work stoppages from time to time at our facilities in Italy as a result of
national and local issues. Although these work stoppages to date have not had a
material effect on us, we may experience further work stoppages, which
individually or in the aggregate could have a material adverse effect on us.
We may be affected by exchange rate fluctuations.
Our foreign sales and certain expenses are transacted in foreign
currencies. In 1998, approximately 9.6% of our revenues and 27.3% of our
expenses were denominated in currencies other than U.S. dollars. Our production
costs, profit margins and competitive position are affected by the strength of
the currencies in countries where we manufacture or purchase goods relative to
the strength of the currencies in countries where our products are sold.
We periodically review our foreign currency exposure and evaluate
whether we should enter into hedging transactions. We generally do not hedge our
foreign currency exposure and may determine not to do so in the future.
Therefore, we presently are, and may continue to be, vulnerable to the effects
of currency exchange rate fluctuations.
The office furniture industry is affected by numerous economic factors
and by quarterly fluctuations.
Fluctuations in office furniture industry revenues may be driven by a
variety of macroeconomic factors, such as white-collar employment levels and
corporate cash flows. Office furniture industry revenues are also affected by
factors such as corporate reengineering and restructuring, technology demands,
ergonomic, health and safety concerns and corporate relocations. Current or
future economic or industry trends may adversely affect our business.
In addition, in certain years we have experienced variability in our
sales from quarter to quarter.
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The large amount of shares eligible for future sale or registration
could have an adverse effect on the market price of the common stock.
Sales of a substantial number of shares of common stock in the public
market or the perception that such sales could occur could adversely affect
prevailing market prices for the common stock. As of August 9, 1999, we had
outstanding 39,667,596 shares of common stock, excluding 1,073,703 shares of
common stock which have been granted under our stock incentive plans but have
not vested. Of the shares outstanding, approximately 17.3 million shares of
common stock, including the 1,384,858 shares offered pursuant to this
prospectus, will be freely tradable without restriction under the Securities Act
of 1933, as amended (the "Securities Act"), except for any such shares which may
have been acquired by an "affiliate" of Knoll.
The remaining shares (approximately 22.4 million) will be eligible for
sale in the public market subject to compliance with the volume limitations and
other restrictions of Rule 144 under the Securities Act. In addition, we have
filed registration statements under the Securities Act covering the sale of an
aggregate of 3,055,772 shares of common stock reserved for issuance or sale
under our stock incentive plans, retirement savings plan and employee stock
purchase plan.
Additionally, there are outstanding options to purchase a total of
2,283,848 shares of common stock, of which options to purchase 422,398 shares of
common stock are currently vested and exercisable.
We have granted all the selling stockholders and certain other members
of management registration rights with respect to all of the shares of common
stock held by them prior to our initial public offering, whether vested or
unvested. We may also provide for the registration of shares of common stock
held or acquired in the future by employees pursuant to compensation
arrangements, thereby permitting such shares to be sold in the public market
from time to time. The sale of such shares could have an adverse effect on the
market price of the common stock and on our ability to raise equity capital in
the public markets.
We have not paid dividends on our common stock and are restricted under
our debt instruments from doing so.
The indenture relating to our senior subordinated notes and our
revolving credit facility restrict, among other things, our ability to pay
dividends. We have not paid dividends on our common stock since our initial
public offering in May 1997. We do not anticipate paying any cash dividends on
the common stock in the foreseeable future.
Anti-takeover provisions in our charter and Delaware law could
adversely affect the market price of our securities.
Our certificate of incorporation authorizes the issuance of preferred
stock without stockholder approval. The Board is authorized to determine the
terms of any preferred stock we may issue. If we were to issue preferred stock,
the issuance could make it more difficult for a third party to acquire Knoll.
This might discourage third parties from acquiring or proposing to acquire
significant amounts of the common stock and could adversely affect the
prevailing market price of the common stock.
The rights of holders of common stock will be subject to, and may be
adversely affected by, the rights of holders of any preferred stock that we may
issue in the future.
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In addition, under certain circumstances, Section 203 of the Delaware
General Corporation Law makes it more difficult for an "interested stockholder"
(generally a 15% stockholder) to effect various business combinations with a
corporation for a three-year period.
FORWARD-LOOKING INFORMATION
This prospectus includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The Act
provides a "safe harbor" for forward-looking statements to encourage companies
to provide prospective information about themselves so long as they identify
these statements as forward-looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from
their anticipated results. All statements other than statements of historical
fact we make in this prospectus or in any document incorporated by reference are
forward-looking. In particular, our statements regarding the completion of the
Merger, industry prospects and our future results of operations or financial
position are forward-looking statements. Forward-looking statements reflect our
current expectations and are inherently uncertain. Our actual results may differ
significantly from our expectations. The section entitled "Risk Factors"
describes some, but not all, of the factors that could cause these differences.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares. All
proceeds will be received by the selling stockholders. See "Selling
Stockholders."
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SELLING STOCKHOLDERS
<TABLE>
The following table provides certain information with respect to the
common stock beneficially owned by the selling stockholders as of August 9,
1999, and the number of shares offered hereunder. Because the selling
stockholders may offer some or all of the shares in an offering that is not
underwritten on a firm commitment basis, no estimate can be given as to the
number of shares that will be held by any selling stockholder after completion
of the offering. See "Plan Of Distribution." To the extent required, the
specific number of shares to be sold, the name of the selling stockholder
effecting such sale, the names of any agent, dealer or underwriter participating
in such sale, and any applicable commission or discount with respect to the sale
will be set forth in a supplement to this prospectus. The nature of the
positions, offices or other material relationships that certain selling
stockholders have had with Knoll or any of our predecessors or affiliates within
the past three years are set forth in documents incorporated herein by
reference. The shares offered by means of this prospectus may be offered from
time to time by the selling stockholders named below:
<CAPTION>
Shares Beneficially Number of Shares Beneficially
Owned Prior to the Shares Owned After the
Selling Stockholders Offering(1) Offered Offering(1) Percent
- ------------------------------ --------------------- -------------- ---------------------- --------------
<S> <C> <C> <C> <C>
Burton B. Staniar 1,063,744 492,688 571,056 1.4%
John H. Lynch 720,896 358,635 362,261 *
Kathleen G. Bradley 200,919 171,284 29,635 *
Andrew B. Cogan 237,584 110,809 126,775 *
Douglas J. Purdom 220,491 146,745 73,746 *
Other selling stockholders (2) 132,843 104,697 28,146 *
- ------------------
* Less than 1%.
(1) Each named person is deemed to be the beneficial owner of securities
that may be acquired within 60 days through the exercise of options,
warrants or other rights, if any. These exclude shares and/or options
granted to the selling stockholders under Knoll's stock incentive plans
that have not yet vested and will not vest within 60 days.
(2) Comprised of three Knoll executives who, in the aggregate, beneficially
owned less than 1% of the outstanding shares of common stock prior to the
offering.
</TABLE>
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PLAN OF DISTRIBUTION
We are registering the shares on behalf of the selling stockholders and
their successors (including donees and pledgees, who may sell shares they
receive from the selling stockholders after the date of this prospectus). The
selling stockholders or their successors may sell all of the shares from time to
time in transactions involving cross or block trades or otherwise on the
over-the-counter market through Nasdaq, or on one or more other securities
markets and exchanges, in privately negotiated transactions or through writing
options or engaging in other hedging transactions with respect to the shares.
They may also sell their shares in accordance with Rule 144 under the Securities
Act. They may sell the shares at fixed prices that may change, at market prices
prevailing at the time of sale, at prices relating to prevailing market prices
or at negotiated prices. The selling stockholders may sell the shares to or
through broker-dealers (whether acting as agents or brokers, or acting as
principals). These broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders and/or the
purchasers (which compensation may be in excess of customary commissions).
The selling stockholders have advised us that they have not entered
into any agreements, understandings or arrangements for the sale of the shares
with any underwriters or broker-dealers and that no underwriter or coordinating
broker is now acting in connection with the proposed sale of shares. We will not
receive any proceeds from the sale of the shares by the selling stockholders. We
may suspend use of this prospectus under certain circumstances.
The selling stockholders and broker-dealers who assist in the sale of
the shares may be "underwriters" within the meaning of Section 2(11) of the
Securities Act. Any commissions or profit they earn on any resale of the shares
may be underwriting discounts and commissions under the Securities Act. Selling
stockholders who are "underwriters" within the meaning of Section 2(11) of the
Securities Act will be subject to the prospectus delivery requirements of the
Securities Act. Under the rules and regulations of the Securities Exchange Act,
any person engaged in a distribution of the shares may be limited in its ability
to engage in market activities with respect to such shares. In addition, each
selling stockholder will be subject to applicable provisions of the Exchange Act
and the rules and regulations thereunder, which provisions may limit the timing
of purchases and sales of any of the shares by the selling stockholders. The
foregoing may affect the marketability of the shares.
We will pay all expenses (other than selling commissions and fees and
stock transfer taxes) of the registration and sale of the shares. We also have
agreed to indemnify the selling stockholders and broker-dealers who assist in
the sale of the shares against certain liabilities, including liabilities under
the Securities Act. The selling stockholders may indemnify any agent, dealer or
broker-dealer that assists them in selling the shares against certain
liabilities, including liabilities arising under the Securities Act.
We cannot guarantee that the selling stockholders will sell any or all
of the shares.
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GENERAL INFORMATION
Underwriters, dealers and agents that participate in the distribution
of the offered securities may be underwriters as defined in the Securities Act,
and any discounts or commissions they receive from us and any profit on the
resale of the offered securities by them may be treated as underwriting
discounts and commissions under the Securities Act. To the extent required, any
underwriters or agents will be identified and their compensation described in a
prospectus supplement.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, us or our subsidiaries in the ordinary course of their
businesses.
LEGAL OPINIONS
The validity of the shares of common stock offered by this prospectus
will be passed upon for Knoll by Willkie Farr & Gallagher, New York, New York.
EXPERTS
The consolidated financial statements and schedule of Knoll, Inc. and
The Knoll Group, Inc. (Predecessor) appearing in Knoll's Annual Report on Form
10-K for the year ended December 31, 1998 have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial statements and
schedule are incorporated herein in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement of which this prospectus forms a
part. The registration statement, including the attached exhibits, contains
additional information about our common stock. The rules and regulations of the
SEC allow us to omit some of the information included in the registration
statement from this prospectus.
In addition, we file annual, quarterly and special reports, proxy
statements and other information with the SEC. Our SEC filings are available to
the public over the Internet at the SEC's web site at http://www.sec.gov. You
may also read and copy any document we file at the SEC's public reference rooms
in Washington, D.C., New York, New York and Chicago, Illinois. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available at the offices of The New York Stock Exchange, in
New York, New York.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by
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reference our documents listed below and any future filings we make
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until the selling stockholders sell all of the shares.
o Annual Report on Form 10-K, as amended by the Annual Report on Form
10-K/A for the year ended December 31, 1998;
o Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999
and June 30, 1999;
o Current Reports on Form 8-K, filed March 24, 1999 and June 22, 1999;
and
o The description of our common stock set forth in our registration
statement filed under the Securities Exchange Act on Form 8-A on May
6, 1997, including any amendment or report for the purpose of
updating such description.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Knoll, Inc.
Investor Relations
1235 Water Street
East Greenville, Pennsylvania 18041
(215) 679-7991
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