As filed with the Securities and Exchange Commission on July 1,
1998.
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
ST. JOHN KNITS, INC.
(Exact name of registrant as specified in its charter)
___________________
California 95-2245070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
17422 Derian Avenue, Irvine, California 92614
(Address of principal executive offices)
ST. JOHN KNITS, INC. 1993 STOCK OPTION PLAN
(Full title of the plan)
Robert E. Gray
Chief Executive Officer
St. John Knits, Inc.
17422 Derian Avenue
Irvine, California 92614
(Name and address of agent for service)
___________________
Telephone number, including area code, of agent for service:
(949) 863-1171
___________________
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per unit price fee
Common Stock, 750,000<1> $39.1875<2> $29,390,625<2>$8,671<2>
without par value shares
<1>This Registration Statement covers, in addition to the
number of shares of Common Stock stated above, options and
other rights to purchase or acquire the shares of Common
Stock covered by the Prospectus and, pursuant to Rule
416(c) under the Securities Act of 1933, as amended (the
"Securities Act"), an indeterminate number of shares which
by reason of certain events specified in the St. John
Knits, Inc. 1993 Stock Option Plan (the "Plan") may become
subject to the Plan.
<2>Pursuant to Rule 457(h), the maximum offering price, per
share and in the aggregate, and the registration fee were
calculated based upon the average of the high and low
prices of the Common Stock on June 29, 1998, as reported on
the New York Stock Exchange and published in the Western
Edition of The Wall Street Journal.
The Exhibit Index included in this Registration Statement
is at page S-3.
The Prospectus which contains the information
required pursuant to Section 10(a) of the Securities
Act relates to a Registration Statement on Form S-8
under the Securities Act filed with the Commission on
March 11, 1994.
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in
Part I of Form S-8 (plan information and registrant information)
will be sent or given to employees as specified by Rule 428(b)(1)
of the Securities Act. Such documents need not be filed with the
Securities and Exchange Commission (the "Commission") either as
part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424 of the Securities Act.
These documents, which include the statement of availability
required by Item 2 of Form S-8, and the documents incorporated by
reference in this Registration Statement pursuant to Item 3 of Form
S-8 (Part II hereof), taken together, constitute a prospectus that
meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3.INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of St. John Knits, Inc. (the
"Company") filed with the Commission are incorporated herein by
reference:
(a) Annual Report on Form 10-K for the Company's fiscal year
ended November 2, 1997, as amended;
(b) Quarterly Reports on Forms 10-Q for the Company's
quarterly periods ended February 1, 1998 and May 3, 1998;
(c) The description of the Company's Common Stock which is
contained in a registration statement filed by the
Company under Section 12 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), including any
amendment or report filed for the purpose of updating
such description.
All documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to
the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated
by reference into the prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein
or in a document, all or a portion of which is incorporated or
deemed to be incorporated by reference herein, shall be deemed to
be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or amended, to constitute a part
of this Registration Statement.
ITEM 4.DESCRIPTION OF SECURITIES
ITEM 5.INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the original issuance of the Common Stock
registered hereby is passed on for the Company by O'Melveny & Myers
LLP. David A. Krinsky is a partner in such law firm, is a member
of the Company's Board of Directors, and holds options granted
under the Plan to acquire shares of Common Stock.
ITEM 6.INDEMNIFICATION OF DIRECTORS AND OFFICERS
ITEM 7.EXEMPTION FROM REGISTRATION CLAIMED
ITEM 8.EXHIBITS
See the attached Exhibit Index at page S-3.
ITEM 9.UNDERTAKINGS
The information and contents of a Registration Statement
on Form S-8 which was filed with the Commission by the Company on
March 11, 1994, is incorporated herein by reference. Except for
required opinions, consents, signature pages and any information
required in this Registration Statement that is not in the above
mentioned Registration Statement, the information required by Part
II to be contained in this Registration Statement is omitted in
accordance with General Instruction E to Form S-8.
SIGNATURES
Pursuant to the requirements of the Securities Act, the
Company certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Irvine,
State of California, on May 27, 1998.
ST. JOHN KNITS, INC.
By: /s/ Robert E. Gray
Robert E. Gray
Its: Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Robert E. Gray his or her true and lawful attorney-in-fact
and agent with full powers of substitution and resubstitution, for
him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Robert E. Gray Chairman of the Board and Chief May 27, 1998
Robert E. Gray Executive Officer
(Principal Executive Officer)
/s/ Marie St. John Gray Vice-Chairman of the Board, May 27, 1998
Marie St. John Gray Chief Designer and Secretary,
Director
/s/ Kelly A. Gray President, Director May 27, 1998
Kelly A. Gray
/s/ Roger G. Ruppert Senior Vice President -- May 27, 1998
Roger G. Ruppert Finance and Chief Financial,
Officer Director (Principal
Financial and Accounting Officer)
/s/ Richard A. Gadbois, III Director May 27, 1998
Richard A. Gadbois, III
/s/ David A. Krinsky Director May 27, 1998
David A. Krinsky
EXHIBIT INDEX*
Exhibit
Number Description
4. St. John Knits, Inc. 1993 Stock Option
Plan, as amended.
5. Opinion of Counsel (opinion re
legality).
23.1 Consent of Arthur Andersen LLP
(consent of independent accountants).
23.2 Consent of Counsel (included in
Exhibit 5).
24. Power of Attorney (included in this
Registration Statement under
"Signatures").
________________________
* Each exhibit index and exhibit of a Registration Statement on Form
S-8 which was filed with the Commission by the Company on March 11,
1994, is incorporated herein by reference.
ST. JOHN KNITS, INC.
1993 STOCK OPTION PLAN
(Composite Plan document incorporating Amendment No. I, adopted
January 7, 1997, and Amendment No. II, adopted February 13, 1998)
1. Purpose. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to
the Employees, Directors and Consultants of the Company and to
promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock
Options or Nonstatutory Stock Options, at the discretion of the
Board and as reflected in the terms of the written option
agreement.
2. Definitions. As used herein, the following definitions
shall apply:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(c) "Committee" shall mean the Committee appointed by
the Board of Directors in accordance with paragraph (b) of
Section 3 of the Plan, if one is appointed.
(d) "Common Stock" shall mean the Common Stock of the
Company.
(e) "Company" shall mean St. John Knits, Inc., a
California corporation.
(f) "Consultant" shall mean any person who is engaged by
the Company or any Parent or Subsidiary to render consulting
services and is compensated for such consulting services,
including compensation through Options granted under this Plan;
provided that the term Consultant shall not include directors who
are not compensated for their services or are paid only a
director's fee by the Company.
(g) "Continuous Status as an Employee, Director or
Consultant" shall mean the absence of any interruption or
termination of service as an Employee, Director or Consultant (as
the case may be). Continuous Status as an Employee, Director or
Consultant shall not be considered interrupted in the case of
sick leave, military leave, or any other leave of absence
approved by the Board; provided that such leave is for a period
of not more than 90 days or reemployment upon the expiration of
such leave is guaranteed by contract or statute.
(h) "Director" means a member of the Board.
(i) "Disability" means a total and permanent disability
as that term is defined in Section 22(e)(3) of the Code.
(j) "Disinterested Person" shall have the meaning set
forth in Rule 16b-3 and shall mean a director who has not, during
the one-year period prior to the date he or she is appointed to
the Committee or during the period he or she is on the Committee,
received an option grant or stock issuance under this Plan or any
other stock plan of the Company or any Parent or Subsidiary of
the Company, other than as permitted by Rule 16b-3; provided,
however, if Rule 16b-3 is amended after the effective date of
this Plan, "Disinterested Person" shall have the meaning set
forth in such amended Rule 16b-3.
(k) "Employee" shall mean any person, including officers
and directors, employed by the Company or any Parent or
Subsidiary of the Company. The payment of a director's fee by the
Company shall not be sufficient to constitute "employment" by the
Company.
(l) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(m) "Fair Market Value" shall mean: (a) if Shares are
exchange-traded or traded on the NASDAQ national market system
("NMS"), the closing sales or last sales price per share of the
Shares; (b) if Shares are regularly traded in any over-the-
counter market other than NMS, the average of the bid and asked
prices per share of the Shares; and (c) if Shares are not traded
as described in (a) and (b) of this Section 2(m), the per share
fair market value of the Shares as determined in good faith by
the Board on such basis as the Board in its sole discretion shall
choose. Fair Market Value as of a given date with respect to
subparagraphs (a), (b) and (c) shall be determined as of the
close of business on the day prior to the date of determination,
or if no trading in the Shares takes place on such date, on the
next preceding trading day on which there has been such trading.
(n) "Incentive Stock Option" shall mean an Option
intended to qualify as an incentive stock option within the
meaning of Section 422(b) of the Code.
(o) "Nonstatutory Stock Option" shall mean an Option not
intended to qualify as an Incentive Stock Option.
(p) "Option" shall mean a stock option granted pursuant
to the Plan.
(q) "Optionee" shall mean an Employee, Director or
Consultant who receives an Option.
(r) "Option Termination Date" shall mean the date of
expiration of the term of such Option as set forth in the written
option agreement.
(s) "Parent" shall mean a "parent corporation", whether
now or hereafter existing, as defined in Section 424(e) of the
Code.
(t) "Plan" shall mean this St. John Knits, Inc. 1993
Stock Option Plan.
(u) "Restricted Shareholder" shall mean an Optionee who,
at the time the Option is granted, owns stock representing more
than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary of
the Company.
(v) "Rule 16b-3" shall mean Rule 16b-3 promulgated by
the Securities and Exchange Commission under the Exchange Act, as
such rule may be amended from time to time.
(w) "Share" shall mean a share of the Common Stock, as
adjusted in accordance with Section 10 of the Plan.
(x) "Subsidiary" shall mean a "subsidiary corporation",
whether now or hereafter existing, as defined in Section 424(f)
of the Code.
(y) "Terminating Transaction" shall mean any of the
following events: (a) the dissolution or liquidation of the
Company; (b) a reorganization, merger or consolidation of the
Company with one or more other corporations (except with respect
to a transaction, the purpose of which is to change the domicile
of the Company), as a result of which the Company goes out of
existence or becomes a subsidiary of another corporation (which
shall be deemed to have occurred if another corporation shall
own, directly or indirectly, fifty percent (50%) or more of the
aggregate voting power of all outstanding equity securities of
the Company); or (c) a sale of all or substantially all of the
Company's assets.
3. Administration.
(a) The Plan shall be administered by the Board, which
shall have sole authority in its absolute discretion (i) to
determine which Employees, Directors and Consultants shall
receive Options, (ii) subject to the express provisions of the
Plan, to determine the time when Options shall be granted, the
number of Shares subject to the Options, the exercise prices, and
the terms and conditions of Options other than those terms and
conditions fixed under the Plan, and (iii) to interpret the
provisions of the Plan and any Option granted under the Plan. The
Board shall adopt by resolution such rules and regulations as may
be required to carry out the purposes of the Plan and shall have
authority to do everything necessary or appropriate to administer
the Plan. All decisions, determinations and interpretations of
the Board shall be final and binding on all Optionees.
(b) The Board may delegate administration of the Plan to
a Committee of no less than two Directors, each of which shall be
Disinterested Persons unless the Board expressly declares that it
does not require the Plan to comply with the requirements of Rule
16b-3. The Board may from time to time remove members from, or
add members to, the Committee, and vacancies on the Committee
shall be filled by the Board. Furthermore, the Board at any time
by resolution may abolish the Committee and revest in the Board
the administration of the Plan. (For purposes of this Plan
document, the term "Board" shall mean the Committee to the extent
that the Board's powers have been delegated to the Committee.)
4. Eligibility.
(a) Incentive Stock Options may be granted only to
Employees who render services which contribute to the success of
the Company. Nonstatutory Stock Options may be granted only to
Employees, Directors or Consultants who render services which
contribute to the success of the Company.
(b) The Plan shall not confer upon any Optionee any
right to continue as an Employee, Director or Consultant of the
Company, nor shall it interfere in any way with Optionee's right
or the Company's right to terminate Optionee's employment or
relationship as a Director or Consultant at any time, with or
without cause.
(c) The determination as to whether an Employee,
Director or Consultant is eligible to receive Options hereunder
shall be made by the Board in its sole discretion, and the
decision of the Board shall be binding and final.
5. Number of Shares. The maximum aggregate number of Shares
which may be optioned and sold under this Plan is 2,350,000
Shares of authorized but unissued Common Stock of the Company. In
the event that Options granted under the Plan shall terminate or
expire without being exercised, in whole or in part, the Shares
subject to such unexercised Options may again be optioned and
sold under this Plan. The maximum number of Shares in the
aggregate that may be subject to all Options granted under this
Plan to any one individual in any calendar year is 150,000
Shares.
6. Term of the Plan. The Plan shall be effective as of
January 13, 1993, and shall continue in effect until the close of
business on January 12, 2003, unless terminated earlier.
7. Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as
is determined by the Board in its sole discretion, but, in the
case of Incentive Stock Options only, shall be subject to the
following:
(i) for an Incentive Stock Option granted to a
Restricted Shareholder, the per Share exercise price shall be
no less than 110% of the Fair Market Value per Share on the
date of grant; and
(ii) for an Incentive Stock Option Granted to
any Employee (other than a Restricted Shareholder), the per
Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant.
(b) The consideration to be paid for the Shares to be
issued upon exercise of an Option shall consist of full payment
in cash or cash equivalents or, with the consent of the Board,
one of the alternative forms specified below:
(i) full payment in shares of Common Stock (duly
endorsed for transfer to the Company) held by the Optionee for
the requisite period necessary to avoid a charge to the
Company's earnings for financial reporting purposes and valued
at Fair Market Value on the date of delivery; or
(ii) full payment through a combination of cash
or cash equivalents and shares of Common Stock (duly endorsed
for transfer to the Company) held by the Optionee for the
requisite period necessary to avoid a charge to the Company's
earnings for financial reporting purposes and valued at Fair
Market Value on the date of delivery; or
(iii) full payment effected through a broker-dealer
sale and remittance procedure pursuant to which the Optionee
(A) shall provide irrevocable written instructions to a
designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to
cover the aggregate option price payable for the purchased
Shares plus all applicable Federal and State income and
employment taxes required to be withheld by the Company by
reason of such purchase and (B) shall provide written
directives to the Company to deliver the certificates for the
purchased Shares directly to such brokerage firm in order to
complete the sale transaction; or
(iv) any other legal consideration that may be
acceptable to the Board.
8. Exercise of Options.
(a) Vesting of Options. Any Option granted hereunder
shall be exercisable at such times and under such conditions as
determined by the Board, including performance criteria with
respect to the Company and/or the Optionee, and as shall be
permissible under the terms of the Plan.
(b) Procedure for Exercise. An Option may be exercised
at any time as to all or any portions of the Shares as to which
it is then exercisable, except that an Option may not be
exercised for a fraction of a Share and may be subject to any
provision in the written option agreement governing the minimum
number of Shares as to which the Option may be exercised. An
Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the
Option and full payment for the Shares with respect to which the
Option is exercised has been received by the Company. Full
payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 7(b)
of the Plan.
(c) Termination of Options. All installments of an
Option shall expire and terminate on such date(s) as the Board
shall determine, but in no event later than ten (10) years from
the date such Option was granted (except that an Incentive Stock
Option granted to a Restricted Shareholder shall by its terms not
be exercisable after the expiration of five (5) years from the
date such Option was granted).
(d) Death or Termination of Service of Optionee. The
following provisions shall govern the exercise period applicable
to any Options held by an Optionee at the time of his or her
death or termination of service with the Company or any Parent or
Subsidiary of the Company:
(i) Termination of Continuous Status as an
Employee, Director or Consultant. In the event of termination
of an Optionee's Continuous Status as an Employee, Director or
Consultant (as the case may be) for any reason other than
Optionee's death or Disability, such Optionee may only
exercise the Option within three (3) months (or such shorter
period as specified in the written option agreement) after the
date of such termination.
(ii) Disability of Optionee. In the event of
termination of an Optionee's Continuous Status as an Employee,
Director or Consultant as a result of the Optionee's
Disability, the Optionee may only exercise the Option within
twelve (12) months (or such shorter period as is specified in
the written option agreement) from the date of such
termination.
(iii) Death of Optionee. In the event of
termination of an Optionee's Continuous Status as an Employee,
Director or Consultant as a result of the Optionee's death,
the Option may only be exercised any time within twelve (12)
months (or such shorter period as is specified in the written
option agreement) following the date of death by the
Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance.
(iv) Limitations. Each Option shall, during the
limited exercise period under this Section 8(d), be
exercisable only as to the Shares for which the Option is
exercisable on the date of the Optionee's death or termination
of service with the Company. Under no circumstances shall any
Option become exercisable under this Section 8(d) after the
Option Termination Date. Upon the earlier of the expiration of
such limited exercise period or the Option Termination Date,
the Option shall terminate and cease to be exercisable.
(v) Immediate Termination. Should (A) the
Optionee's Continuous Status as an Employee, Director or
Consultant be terminated for misconduct (including, but not
limited to, any act of dishonesty, willful misconduct, fraud
or embezzlement) or (B) the Optionee make any unauthorized use
or disclosure of confidential information or trade secrets of
the Company or any Parent or Subsidiary, then in any such
event all outstanding Options granted to the Optionee under
this Plan shall terminate immediately and cease to be
exercisable.
(vi) Board Discretion to Accelerate. The Board
shall have complete discretion, exercisable either at the time
the Option is granted or at any time the Option remains
outstanding, to permit one or more Options granted under this
Plan to be exercised during the limited exercise period
applicable under this Section 8(d), not only for the number of
Shares for which each such Option is exercisable at the time
of the Optionee's death or termination of service but also for
one or more subsequent installments of Shares for which the
Option would otherwise have become exercisable had such death
or termination of service not occurred.
(e) Extensions. Notwithstanding the provisions covering
the exercisability of Options following death or termination of
service, as described in Section 8(d), the Board may, in its sole
discretion, with the consent of the Optionee or the Optionee's
estate (in the case of the death of Optionee), extend the period
of time during which the Option shall remain exercisable,
provided that in no event shall such extension go beyond the
Option Termination Date. In the case of Incentive Stock Options,
extensions under this Section 8(e) may result in loss of the
favorable treatment accorded to incentive stock options under the
Code.
9. Restrictions on Grants of Options and Issuance of Shares.
(a) Regulatory Approvals. No Shares shall be issued or
delivered upon exercise of an Option unless and until there shall
have been compliance with all applicable requirements of the
Securities Act of 1933, as amended, (the "1933 Act"), and any
other requirement of law or of any regulatory body having
jurisdiction over such issuance and delivery. The inability of
the Company to obtain any required permits, authorizations or
approvals necessary for the lawful issuance and sale of any
Shares hereunder on terms deemed reasonable by the Board shall
relieve the Company, the Board, and any Committee of any
liability in respect of the non-issuance or sale of such Shares
as to which such requisite permits, authorizations, or approvals
shall not have been obtained.
(b) Representations and Warranties. As a condition to
the granting or exercise of any Option, the Board may require the
person receiving or exercising such Option to make any
representation and/or warranty to the Company as may be required
(or deemed appropriate by the Board, in its discretion) under any
applicable law or regulation, including but not limited to a
representation that the Option and/or Shares are being acquired
only for investment and without any present intention to sell or
distribute such Option and/or Shares, if such a representation is
required under the 1933 Act or any other applicable law, rule, or
regulation.
(c) Shareholder Approval. The exercise of Options under
the Plan also is conditioned on approval of the Plan by the vote
or written consent of the holders of a majority of the
outstanding shares of the Company's Common Stock, and no Option
shall be exercisable hereunder unless and until the Plan has been
so approved.
10. Option Adjustments.
(a) Change in Capitalization. If the outstanding shares
of Common Stock of the Company are increased, decreased, changed
into or exchanged for a different number or kind of shares of the
Company through reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock
split, upon authorization by the Board an appropriate and
proportionate adjustment shall be made in the number or kind of
shares, and the per-share option price thereof, which may be
issued in the aggregate and to any individual Optionees under the
Plan upon exercise of Options granted under the Plan; provided,
however, that no such adjustment need be made if, upon the advice
of counsel, the Board determines that such adjustment may result
in the receipt of federal taxable income to holders of Options
granted under the Plan or the holders of Common Stock or other
classes of the Company's securities.
(b) Corporate Reorganizations. Upon the occurrence of a
Terminating Transaction, the vesting of all unvested installments
of the Options shall be automatically accelerated and thereby all
outstanding Options shall be fully vested, and all Optionees
shall have the right, at such time immediately prior to the
consummation of the Terminating Transaction (as the Board shall
designate), to exercise all of their Options to the full extent
not previously exercised. Upon consummation of the Terminating
Transaction, the Plan shall terminate and any Options which have
not been exercised as permitted in the immediately preceding
sentence shall terminate.
11. Option Agreement. The terms and conditions of Options
granted under the Plan shall be evidenced by a written option
agreement executed by the Company and the person to whom the
Option is granted. Each option agreement shall incorporate the
Plan by reference and shall include such provisions as are
determined to be necessary or appropriate by the Board.
12. Limitations on Incentive Stock Options. In the event that
the aggregate fair market value of Shares (determined as of the
date of grant of the Option covering such Shares) with respect to
which Incentive Stock Options are exercisable for the first time
by an Employee during any calendar year under this Plan and any
other plan of the Company exceeds $100,000, Options with respect
to and to the extent of such excess shall be treated as
Nonstatutory Stock Options. This Section 12 shall be applied by
taking Options which are intended to be Incentive Stock Options
into account in the order in which they were granted.
13. Amendment or Termination of the Plans.
(a) Board Authority. The Board may amend, suspend,
alter, or terminate the Plan at any time. To the extent necessary
or desirable to comply with Rule 16b-3 of the Exchange Act, the
Code or any other applicable law or regulation, the Company shall
obtain shareholder approval of any amendment to the Plan only in
such a manner and to such a degree as required under applicable
law.
(b) Limitation on Board Authority. Furthermore, the Plan
may not, without the approval of the shareholders, be amended in
any manner that would cause Incentive Stock Options issued
hereunder to fail to qualify as Incentive Stock Options as
defined in Section 422(b) of the Code. Notwithstanding the
foregoing, no amendment, suspension or termination of the Plan
shall adversely affect Options granted on or prior to the date
thereof, as evidenced by the execution of an option agreement by
both the Company and the Optionee, without the consent of such
Optionee.
(c) Contingent Grants Based on Amendments. Options may
be granted in reliance on and consistent with any amendment
adopted by the Board and which is necessary to enable such
Options to be granted under the Plan, even though such amendment
requires future shareholder approval; provided, however, that any
such contingent Option by its terms may not be exercised prior to
shareholder approval of such amendment, and provided further,
that in the event shareholder approval is not obtained within
twelve months of the date of grant of such contingent Option,
then such contingent Option shall be deemed cancelled and no
longer outstanding.
14. Options Not Transferable. Options granted under this Plan
may not be sold, pledged, hypothecated, assigned, encumbered,
gifted or otherwise transferred or alienated in any manner,
either voluntarily or involuntarily by operation of law, other
than by will or the laws of descent or distribution, and may be
exercised during the lifetime of an Optionee only by such
Optionee.
15. No Rights in Shares Before Issuance and Delivery. Neither
the Optionee, his or her estate nor his or her transferees by
will or the laws of descent and distribution shall be, or have
any rights or privileges of, a shareholder of the Company with
respect to any Shares issuable upon exercise of the Option unless
and until certificates representing such Shares shall have been
issued and delivered notwithstanding exercise of the Option. No
adjustment will be made for a dividend or other rights where the
record date is prior to the date such stock certificates are
issued, except as provided in Section 10.
16. Taxes. The Board shall make such provisions and take such
steps as it deems necessary or appropriate for the withholding of
any federal, state, local and other tax required by law to be
withheld with respect to the grant or exercise of an Option under
the Plan, including, without limitation, the deduction of the
amount of any such withholding tax from any compensation or other
amounts payable to an Optionee by the Company, or requiring an
Optionee (or the Optionee's beneficiary or legal representative)
as a condition of granting or exercising an Option to pay to the
Company any amount required to be withheld, or to execute such
other documents as the Board deems necessary or desirable in
connection with the satisfaction of any applicable withholding
obligation. In the discretion of the Board, upon exercise of a
Nonstatutory Stock Option, the Optionee may request the Company
to withhold from the Shares to be issued upon such exercise that
number of Shares (based on the Fair Market Value of the Shares as
of the day notice of exercise is received by the Company) that
would satisfy any tax withholding requirement.
17. Legends on Options and Stock Certificates. Each option
agreement and each certificate representing Shares acquired upon
exercise of an Option shall be endorsed with all legends, if any,
required by applicable federal and state securities laws to be
placed on the option agreement and/or the certificate. The
determination of which legends, if any, shall be placed upon
option agreements and/or the certificates representing Shares
shall be made by the Board in its sole discretion and such
decision shall be final and binding.
18. Availability of Plan. A copy of this Plan shall be
delivered to the Secretary of the Company and shall be shown by
the Secretary to any eligible person making reasonable inquiry
concerning the Plan.
19. Applicable Law. This Plan shall be governed by and
construed in accordance with the laws of the State of California.
[O'Melveny & Myers LLP Letterhead]
May
27th
1 9 9 8
(714) 760-9600 744,574-006
St. John Knits, Inc.
17422 Derian Avenue
Irvine, California 92713
Re: Registration Statement on Form S-8 of
St. John Knits, Inc. (the "Company")
Ladies and Gentlemen:
At your request, we have examined the Registration
Statement on Form
S-8 to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of
1933, as amended, of 750,000 additional shares of Common Stock,
without par value, of the Company (the "Common Stock"), to be
issued pursuant to the St. John Knits, Inc. 1993 Stock Option
Plan (the "Plan"). At your request, we have examined the
proceedings heretofore taken and to be taken in connection with
the authorization of the Plan and the Common Stock to be issued
pursuant to and in accordance with the Plan.
Based upon such examination and upon such matters of
fact and law as we have deemed relevant, we are of the opinion
that the Common Stock has been duly authorized by all necessary
corporate action on the part of the Company and, when issued in
accordance with such authorization, the provisions of the Plan
and relevant agreements duly authorized by and in accordance with
the terms of the Plan, will be validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to
the Registration Statement.
Respectfully submitted,
/s/ O'Melveny & Myers LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated December 15, 1997
included in the St. John Knits, Inc. Form 10-K for the year ended November 2,
1997, and to all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Orange County, California
June 4, 1998
