<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ST. JOHN KNITS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock
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(2) Aggregate number of securities to which transaction applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
N/A
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid:
N/A
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[_] Fee paid previously with preliminary materials.
N/A
-------------------------------------------------------------------------
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
N/A
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
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(3) Filing Party:
N/A
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(4) Date Filed:
N/A
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Notes:
<PAGE>
ST. JOHN KNITS, INC.
17422 DERIAN AVENUE
IRVINE, CALIFORNIA 92614
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 25, 1998
----------------
To the Shareholders of St. John Knits, Inc.:
Please take notice that the 1998 Annual Meeting of Shareholders of St. John
Knits, Inc. will be held at the Company's office, located at 17522 Armstrong
Avenue, Irvine, California on Wednesday, March 25, 1998 at 2:30 p.m. California
time, for the following purposes:
1. To elect six members of the Board of Directors to hold office for a one-
year term and until their respective successors are elected and qualified.
2. To approve a proposed amendment to the Company's 1993 Stock Option Plan,
as amended, (i) to increase the number of authorized shares of Common Stock
of the Company reserved for issuance thereunder and (ii) to provide an
individual limit on the number of shares subject to options granted in any
one calendar year.
3. To consider and act upon such other matters as may properly come before
the Annual Meeting or any adjournment thereof.
The Board of Directors has fixed January 30, 1998 as the record date for
determining the shareholders entitled to receive notice of and to vote at the
Annual Meeting or any adjournment or postponement thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person. A majority of the outstanding shares must be represented at the meeting
in order to transact business. Consequently, if you are unable to attend in
person, please execute the enclosed Proxy and return it in the enclosed
addressed envelope. Your promptness in returning the Proxy will assist in the
expeditious and orderly processing of the proxies. If you return your Proxy,
you may nevertheless attend the meeting and vote your shares in person, if you
wish.
By Order of the Board of Directors,
ST. JOHN KNITS, INC.
[LOGO OF SIGNATURE OF ROBERT E. GRAY]
Robert E. Gray
Chairman of the Board and
Chief Executive Officer
February 17, 1998
Irvine, California
<PAGE>
ST. JOHN KNITS, INC.
17422 DERIAN AVENUE
IRVINE, CALIFORNIA 92614
----------------
1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 25, 1998
----------------
PROXY STATEMENT
----------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of St. John Knits, Inc. (the "Company"), for
use at the 1998 Annual Meeting of Shareholders to be held at the Company's
office, located at 17522 Armstrong Avenue, Irvine, California on Wednesday,
March 25, 1998 at 2:30 p.m. California time, and any and all postponements or
adjournments thereof (the "Annual Meeting"). This Proxy Statement is being
mailed to the Company's shareholders on or about February 25, 1998.
MATTERS TO BE CONSIDERED AND RECORD DATE
The 1998 Annual Meeting has been called to elect six directors to hold
office until the next annual meeting of shareholders and until their
successors are elected and qualified, to approve the proposed amendment to the
Company's 1993 Stock Option Plan, as amended (the "Plan"), (i) to increase the
number of authorized shares of the Company's common stock (the "Common Stock")
reserved for issuance thereunder from 1.6 million shares to 2.35 million
shares and (ii) to provide an individual limit on the number of shares subject
to options granted in any one calendar year (the "Plan Amendment") and to
transact such other business as may properly come before the meeting.
On January 30, 1998, the record date fixed by the Board of Directors, the
Company had outstanding 16,714,548 shares of common stock.
QUORUM AND VOTING REQUIREMENTS
The presence in person or by proxy of a majority of shares entitled to vote
at any meeting of shareholders will constitute a quorum for the transaction of
business. The shareholders are entitled to one vote per share on all matters
to be considered at the meeting. The Company's Restated Articles of
Incorporation provide that there is no cumulative voting in the election of
directors.
The director nominees who receive the greatest number of votes at the Annual
Meeting will be elected to the Board of Directors of the Company. The
affirmative vote of a majority of shares present at the Annual Meeting, in
person or by proxy, and entitled to vote and voting and not abstaining, is
required to approve the Plan Amendment. Abstentions and broker non-votes are
counted for purposes of determining a quorum, but are not considered as having
voted for purposes of determining the outcome of a vote.
SOLICITATION OF PROXIES
SHAREHOLDERS ARE URGED, WHETHER OR NOT THEY EXPECT TO ATTEND THE ANNUAL
MEETING, TO COMPLETE, SIGN, DATE, AND RETURN THE ACCOMPANYING PROXY IN THE
ENCLOSED ENVELOPE. Your executed Proxy may be revoked at any time before it is
exercised by filing with the Secretary of the Company at the Company's
principal executive offices a written notice of revocation or a duly executed
Proxy bearing a later date. The execution of the enclosed Proxy will not
affect your right to vote in person should you find it convenient to attend
the meeting and desire to vote. Your vote at the Annual Meeting will revoke
your previously executed Proxy; attendance at the Annual Meeting will not in
and of itself constitute the revocation of a Proxy.
<PAGE>
Votes cast at the Annual Meeting will be tabulated by representatives of
Harris Trust Company of California, the persons appointed by the Board of
Directors to act as inspectors of election for the Annual Meeting. The
inspectors of election will determine the number of shares outstanding, the
shares represented at the Annual Meeting, the existence of a quorum and the
authenticity, validity and effect of proxies; receive votes or ballots; hear
and determine all challenges and questions in any way arising in connection
with the right to vote; determine when the polls will close; and determine the
results of the election.
Unless otherwise directed in the accompanying Proxy, the proxy holders will
vote FOR the election of the six director nominees listed below and FOR the
Plan Amendment. As to any other matters that may properly come before the
Annual Meeting, the proxy holders will vote in accordance with their best
judgment, although the Company does not presently know of any such other
matters.
Proxies for the Annual Meeting are being solicited by mail directly and
through brokerage and banking institutions. The Company will pay all expenses
in connection with the solicitation of proxies. In addition to the use of the
mail, proxies may be solicited by directors, officers and regular employees of
the Company personally, without extra compensation, by telephone, telegraph,
telefax or similar means. The Company may reimburse brokers and other persons
holding stock in their names, or in the names of nominees, for their expenses
in sending proxy materials to principals and obtaining their proxies. Beacon
Hill Partners, Inc. has been engaged to assist in solicitation for which it
will receive from the Company approximately $2,750.
PROPOSAL 1
ELECTION OF DIRECTORS
Six directors are to be elected as directors at the 1998 Annual Meeting to
serve one-year terms and until their respective successors shall be elected
and qualified. It is the intention of the person(s) named in the Proxy Card to
vote the proxies in favor of the election of directors of the six nominees
named below unless authority is withheld in accordance with the instructions
on the Proxy Card. All six nominees are presently directors of the Company. In
the event the nominees named below refuse or are unable to serve as directors
(which is not anticipated), the persons named as proxies reserve full
discretion to vote for any and all persons as may be nominated.
DIRECTOR NOMINEES
The following sets forth certain information concerning the six nominees for
election as directors of the Company:
<TABLE>
<CAPTION>
SERVED AS
NAME POSITION WITH THE COMPANY AGE DIRECTOR SINCE
---- ------------------------- --- --------------
<C> <S> <C> <C>
Robert E. Gray Chairman of the Board and Chief
Executive Officer 72 1962
Marie St. John Gray Vice-Chairman of the Board,
Chief Designer and Secretary 61 1962
Kelly A. Gray President 31 1994
Roger G. Ruppert Senior Vice President--Finance
and Chief Financial Officer 54 1994
Richard A. Gadbois, III Director 40 1993
David A. Krinsky Director 49 1993
</TABLE>
BIOGRAPHICAL INFORMATION
Robert E. Gray, a co-founder of the Company, has served as Chairman of the
Board and Chief Executive Officer of the Company since its inception in 1962.
Prior to forming the Company, Mr. Gray held various sales and production
positions with Cannady Creations, a small sportswear company, from 1952 to
1962, his last position being General Manager. He graduated from the
University of Southern California with a B.A. degree in political science and
psychology. Mr. Gray is the husband of Marie St. John Gray and the father of
Kelly A. Gray.
2
<PAGE>
Marie St. John Gray, a co-founder of the Company, has served as Chief
Designer of the Company since its inception in 1962, Vice-Chairman of the
Board since 1988 and Secretary of the Company since March 1993. Prior to
forming the Company, Ms. Gray was a fashion model, served as hostess of the
Queen For a Day television show and was a fit model for some of the leading
designers in the Los Angeles area. Ms. Gray was born in Yugoslavia and
educated in Austria. Ms. Gray is the wife of Robert E. Gray and the mother of
Kelly A. Gray.
Kelly A. Gray, a director of the Company since October 1994, became
President of the Company in April 1996. She served as Creative Director of the
Company from June 1991 and Executive Vice President--Creative Director from
December 1995 until April 1996. Ms. Gray also heads the Company's retail
boutique division and has design responsibilities for the St. John product
line and the Company's Griffith & Gray line. In addition, she has also been
the Company's Signature Model since 1982. Prior to becoming Creative Director,
Ms. Gray headed the Company's advertising department from 1988 to June 1991.
Prior to heading the advertising department of the Company, Ms. Gray held
various other administrative positions with the Company. Ms. Gray is the
daughter of Robert E. Gray and Marie St. John Gray.
Roger G. Ruppert is a certified public accountant and was appointed as a
director of the Company in October 1994. He has served as Senior Vice
President--Finance and Chief Financial Officer of the Company since October
1986. Prior to joining the Company, Mr. Ruppert was Vice President--Finance
and Chief Financial Officer of Cardis Corporation, a publicly traded auto
parts distributor, from October 1985 to October 1986. Mr. Ruppert was with
Arthur Andersen & Co. for nine years prior to joining Cardis Corporation. He
graduated with a B.S. degree in engineering from the U.S. Naval Academy and
also received an M.B.A. from the University of California, Los Angeles.
Richard A. Gadbois, III is a Senior Vice President of Corporate Executive
Services for Merrill Lynch. Previously, from 1989 to March 1994, he was a
Senior Vice President of Corporate Executive Services and a member of the
Chairman's Advisory Council of Prudential Securities Incorporated, where he
specialized in the development of a private banking service for entrepreneurs.
Prior to joining Prudential Securities, Mr. Gadbois held a similar position as
Senior Vice President, Executive Services/Corporate Finance at Shearson Lehman
Hutton where he worked from 1979 to 1989. Mr. Gadbois graduated with a B.A.
degree from the University of California, Santa Barbara in 1979, majoring in
economics.
David A. Krinsky is a partner in the law firm of O'Melveny & Myers.
Previously, he was a partner in the law firm of Pettis, Tester, Kruse &
Krinsky from 1987 to August 1994. Prior to the formation of Pettis, Tester,
Kruse & Krinsky, Mr. Krinsky was a partner in the law firm of Gibson, Dunn &
Crutcher from 1982 to 1987. He received a B.A. and a J.D. degree from the
University of Southern California and an M.A. degree from Rutgers University.
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
The Board of Directors has two standing committees: (i) the Audit Committee;
and (ii) the Compensation Committee. The Audit Committee meets with the
Company's independent auditors, makes recommendations to the Board of
Directors concerning the acceptance of the reports of such auditors and the
accounting policies and procedures of the Company and reviews financial plans
and operating results of the Company. The Audit Committee is comprised of
Messrs. Gadbois and Krinsky. During fiscal year 1997, the Audit Committee held
three meetings. The Compensation Committee meets with management and makes
recommendations to the Board of Directors concerning the annual compensation
for all executive officers and key employees of the Company. The Compensation
Committee is comprised of Messrs. Gadbois and Krinsky. During fiscal year
1997, the Compensation Committee met once. The Board of Directors does not
have a standing nominating committee.
During the fiscal year ended November 2, 1997, the Board held 15 meetings.
Each director attended at least 75% of the meetings of the Board and its
committees on which they served during their period of service.
3
<PAGE>
DIRECTOR COMPENSATION
Directors holding salaried positions with the Company will not receive
compensation for their services as a director. Other directors will receive
$25,000 annually for their services as directors of the Company. During fiscal
year 1997, the Board granted each of the outside directors, Messrs. Gadbois
and Krinsky, stock options covering 5,000 shares of the Company's Common
Stock.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
David A. Krinsky, a director and a director-nominee of the Company, is a
partner in the law firm of O'Melveny & Myers, which has rendered legal
services to the Company in the past and is expected to provide legal services
to the Company with respect to various matters in the future.
PROPOSAL 2
PLAN AMENDMENT
PROPOSED AMENDMENT TO THE PLAN
On February 13, 1998, the Board approved, subject to shareholder approval,
the amendments reflected in the Plan Amendment. The Plan provides for a limit
on the aggregate number of shares of the Company's Common Stock that may be
delivered pursuant to awards thereunder. The first provision of the Plan
Amendment increases this aggregate limit from 1.6 million shares to 2.35
million shares, an increase of 750,000 shares. The second provision of the
Plan Amendment provides that no more than 150,000 shares may be subject to all
options granted under the Plan to any one individual in any calendar year.
SUMMARY DESCRIPTION OF THE PLAN
The principal terms of the Plan are summarized below. This summary is
qualified in its entirety by the full text of the Plan, a copy of which is
available upon request from the Chief Financial Officer of the Company,
Mr. Roger G. Ruppert, 2722 Michelson Drive, Irvine, California 92612.
Capitalized terms used in this summary are used as defined in the Plan.
The purpose of the Plan is to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentives to the Employees, Directors and Consultants of the Company, and to
promote the success of the Company's business. The Plan was adopted by the
Company's shareholders and Board of Directors during January 1993. In January
1997, the Plan was amended to provide for the acceleration of Options upon
certain events as described below.
Awards. The Plan authorizes the grant of stock options.
Administration. The Plan will be administered by the Board or by a committee
appointed by the Board (for Plan purposes, "Board" means the Board of
Directors of the Company or any committee to the extent that the Board of
Directors of the Company has delegated administrative power over the Plan to
that committee). The Plan is currently administered by the Board of Directors
of the Company.
Subject to the other terms of the Plan, the Board (i) determines the
Employees, Directors and Consultants who will receive Options, (ii) determines
the time when Options will be granted, the number of Shares subject to the
Options, the exercise prices, and the terms and conditions of Options and
(iii) has the authority to interpret the provisions of the Plan and any Option
granted under the Plan and to adopt rules and regulations to administer the
Plan. The Board may permit the recipient of an Option to pay the exercise
price of the Option in the form of cash, the delivery of previously owned
Common Shares, a cashless exercise, or other consideration that may be
acceptable to the Board. The Board may accelerate the receipt or vesting of
benefits pursuant to an Option,
4
<PAGE>
extend the term of an Option (subject to the maximum 10-year term on Options
under the Plan), and make certain adjustments to an outstanding Option and
authorize the conversion, succession or substitution of an Option, as
described generally below.
Eligibility. Persons eligible to receive Options under the Plan include
employees of the Company (or any parent or subsidiary of the Company,
including officers), members of the Board and certain consultants to the
Company (or any parent or subsidiary of the Company). Subject to the power of
the Board to determine eligible persons to whom Options will be granted, there
are currently six eligible Directors and approximately 3,300 eligible
Employees (which includes four Directors).
Transfer Restrictions. Options granted under the 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.
Limits on Awards; Authorized Shares. The maximum aggregate number of Shares
which may be optioned and sold under the Plan is currently 1.6 million Shares
of authorized but unissued Common Stock of the Company. As of January 28,
1998, there remained 485,668 Shares available to be granted under the Plan.
The proposed Plan Amendment would increase the maximum aggregate Share limit
by 750,000 Shares, for a new aggregate Share limit of 2.35 million Shares. The
proposed Plan Amendment also would provide that the maximum number of Shares
in the aggregate that may be subject to all Options granted under the Plan to
any one individual in any calendar year is 150,000 Shares.
As is customary in incentive plans of this nature, the number and kind of
shares available under the Plan and the then outstanding Options, as well as
exercise or purchase prices and share limits, are subject to adjustment in the
event of certain changes in the Common Stock, reorganizations,
recapitalizations, reclassifications, stock dividends, stock splits, or
reverse stock splits, or similar events affecting the Common Stock.
The Plan will not limit the authority of the Board to grant awards or
authorize any other compensation, with or without reference to the Common
Stock, under any other plan or authority.
Stock Options. An option is the right to purchase Common Stock at a future
date at a specified price (the "exercise price"). The exercise price of
Incentive Stock Options (intended as incentive stock options within the
meaning of Section 422(b) of the Code and referred to herein as an "ISOs")
must be not less than the fair market value of a share of Common Stock on the
date the option is granted (110% with respect to optionees who own at least
10% of the outstanding Common Stock). Nonstatutory Stock Options shall have
such exercise prices as determined by the Board. Generally, each option will
expire not more than 10 years after the date of grant (five years with respect
to optionees who own at least 10% of the outstanding Common Stock).
An option may either be an Incentive Stock Option or a Nonstatutory Stock
Option. ISO benefits are taxed differently from Nonstatutory Stock Options, as
described under "Federal Income Tax Treatment of Options under the Plan"
below. ISOs are also subject to more restrictive terms and are limited in
amount by the Code and the Plan. Full payment for Shares purchased on the
exercise of any option must be made at the time of such exercise in a manner
approved by the Board.
Acceleration of Awards; Possible Early Termination of Awards. Upon the
occurrence of a merger, liquidation, sale of substantially all the assets of
the Company, or similar events affecting the Company, all the unvested
installments of the then outstanding Options will automatically become fully
vested and exercisable. Upon the occurrence of a "Terminating Transaction,"
Options will generally terminate unless provision has been made for their
continuance, assumption, or conversion. A "Terminating Transaction" is
generally defined in the Plan as a reorganization, merger, or similar
corporate transaction as a result of which the Company goes out of existence
or becomes a subsidiary of another corporation, or a sale of all or
substantially all of the Company's assets.
5
<PAGE>
Termination of or Changes to the Plan. 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 will obtain shareholder approval for any
amendment to the Plan, but only in such a manner and to such a degree as
required under applicable law. The Plan will terminate on March 9, 2003,
unless earlier terminated by the Board. Outstanding Options may be amended,
subject, however, to the consent of the holder if the amendment adversely
affects the rights of the holder.
Securities Underlying Awards. The market value of the Company's Common Stock
as of January 28, 1998 was $38.9375 per Share. Upon receipt of shareholder
approval for the Plan Amendment, the Company plans to register under the
Securities Act of 1933, as amended, the additional Shares made available under
the Plan.
FEDERAL INCOME TAX TREATMENT OF OPTIONS UNDER THE PLAN
The federal income tax consequences of the Plan under current federal law,
which is subject to change, are summarized in the following discussion which
deals with general tax principles applicable to the Plan. This summary is not
intended to be exhaustive and, among other considerations, does not describe
state, local or international tax consequences.
With respect to Nonstatutory Stock Options, the Company is generally
entitled to deduct and the Optionee recognizes taxable income in an amount
equal to the difference between the Option exercise price and the fair market
value of the Shares at the time of exercise. With respect to ISOs, the Company
is generally not entitled to a deduction nor does the participant recognize
income at the time of exercise.
If an Option is accelerated under the Plan in connection with a change in
control (as this term is used under the Code), the Company may not be
permitted to deduct the portion of the compensation attributable to the
acceleration ("parachute payments") if it exceeds certain threshold limits
under the Code (and certain related excise taxes may be triggered).
Furthermore, if the compensation attributable to Options is not
"performance-based" within the meaning of Section 162(m) of the Code, the
Company may not be permitted to deduct the aggregate non performance-based
compensation in excess of $1,000,000 in certain circumstances.
SPECIFIC BENEFITS
For information regarding Options granted to executive officers of the
Company, see the material under the heading "Executive Compensation and Other
Information" following this Proposal 2 discussion.
The number and type of Options to be granted in the future under the Plan,
and the number of Shares subject thereto, has not been considered by the Board
and cannot be determined at this time. If the Plan Amendment had been in
effect in fiscal 1997, the Company expects that the grants would not have been
substantially different from those described under the captions "Option Grants
in Last Fiscal Year" and "Director Compensation."
THE BOARD OF DIRECTORS HAS APPROVED AND RECOMMENDS THAT THE STOCKHOLDERS
VOTE "FOR" THE PLAN AMENDMENT. Proxies solicited by the Board will be so voted
unless shareholders specify otherwise in their proxies. Broker non-votes and
abstentions on this proposal have the effect described on page 1. All members
of the Board are eligible for awards under the Plan.
6
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth information regarding the executive officers
of the Company:
<TABLE>
<CAPTION>
YEARS
WITH
NAME POSITION AGE COMPANY
---- -------- --- -------
<S> <C> <C> <C>
Robert E. Gray Chairman and Chief Executive Officer 72 35
Marie St. John Gray Vice-Chairman, Chief Designer and Secretary 61 35
Kelly A. Gray President 31 15
Roger G. Ruppert Senior Vice President--Finance and Chief Financial Officer 54 11
David C. Frankel Executive Vice President 31 2
Karla R. Guyer Senior Vice President--Marketing 46 18
Bruce A. Fetter Senior Vice President and Chief Operating Officer 43 1
</TABLE>
BIOGRAPHICAL INFORMATION
Robert E. Gray. See information under "Election of Directors."
Marie St. John Gray. See information under "Election of Directors."
Kelly A. Gray. See information under "Election of Directors."
Roger G. Ruppert. See information under "Election of Directors."
David C. Frankel was appointed Executive Vice President of the Company
during July 1996. Prior to joining the Company, Mr. Frankel held the position
of Senior Institutional Research Analyst with The Siedler Companies, Inc., an
institutional brokerage firm based in Los Angeles. Previously, he was an
Equity Research Analyst at PaineWebber Inc. concentrating on the apparel
industry. Over the previous five years, Mr. Frankel held various positions in
sales, merchandising and production operations with Liz Claiborne, Inc. Mr.
Frankel received a B.A. degree in economics from the University of
Pennsylvania and received an M.B.A. from Columbia Business School with
concentrations in marketing and finance.
Karla R. Guyer has been Senior Vice President--Marketing of the Company
since 1993. Previously, she was Vice President--National Sales Manager since
August 1990. Ms. Guyer also served in various sales-related positions with the
Company from 1980 to 1990. Prior to joining the Company, Ms. Guyer worked for
Bullock's as a department manager of designer dresses and furs. Ms. Guyer
attended Fullerton College in California.
Bruce A. Fetter was appointed Senior Vice President and Chief Operating
Officer during November 1997. He joined the Company in January 1997 as Vice
President-Distribution and in April was appointed Senior Vice President--
Operations. From August 1994 to December 1996 he held the position of Vice
President--Logistics for Bob's Stores, a division of the Melville Corporation.
Prior to this Mr. Fetter spent seventeen years with Mervyns, a Division of
Dayton Hudson, in various supply chain management and store management
positions including, Director--Operations and Director--Physical Distribution.
Mr. Fetter graduated with a B.S. degree from the University of Southern
California in 1976, majoring in business.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of January 23, 1998, regarding
the beneficial ownership of the Company's Common Stock by: (i) each person who
is known by the Company to be the beneficial owner of more than 5% of the
Common Stock; (ii) each of the directors and director nominees of the Company;
(iii) each executive officer listed in the Summary Compensation Table below;
and (iv) all current directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
APPROXIMATE
NUMBER OF
SHARES
BENEFICIALLY PERCENTAGE
NAME OWNED OWNED
---- ------------ ----------
<S> <C> <C>
Pilgrim Baxter & Associates(/1/)................. 907,100 5.4%
1255 Drummers Lane, Suite 300
Wayne, Pennsylvania 19087
Robert E. Gray(/2/).............................. 1,208,479 7.0%
Marie St. John Gray(/2/)......................... 1,208,479 7.0%
Kelly A. Gray(/3/)............................... 607,904 3.6%
Diane M. Griffiths(/4/).......................... 135,292 *
Roger G. Ruppert(/5/)............................ 24,333 *
David C. Frankel(/6/)............................ 16,666 *
Richard A. Gadbois, III(/7/)..................... 16,665 *
David A. Krinsky(/7/)............................ 15,665 *
All current directors and executive officers as a
group (ten persons)(/8/)........................ 2,029,170 11.7%
</TABLE>
- --------
* Less than 1%.
(1) Information is as of February 14, 1997 and is based on a Schedule 13G
filed with the Securities and Exchange Commission by Pilgrim Baxter &
Associates ("Pilgrim Baxter"). Pilgrim Baxter reported that it has shared
voting power and shared dispositive power with respect to 907,100 shares
and beneficially owns approximately 5.4% of the Company's shares.
(2) Includes 703,839 shares which are owned by the Gray Family Trust, of which
Robert E. Gray and Marie St. John Gray serve as co-Trustees. In addition,
includes 54,640 shares which are owned by the Kelly Ann Gray Trust, of
which Robert E. Gray and Marie St. John Gray serve as co-Trustees, and
also includes 450,000 shares ("Option Shares") issuable upon exercise of
options exercisable at or within 60 days of January 23, 1998. Robert E.
Gray and Marie St. John Gray hold 370,000 Option Shares and 80,000 Option
Shares, respectively.
(3) Includes 60,000 shares issuable upon exercise of options exercisable at or
within 60 days of January 23, 1998.
(4) Diane M. Griffiths resigned from her employment with the Company on
November 4, 1997. Information provided above includes transactions which
occured after her resignation. Includes 135,292 shares which are owned by
the Griffiths Family Trust, of which Diane M. Griffiths serves as co-
Trustee.
(5) Includes 23,333 shares issuable upon exercise of options exercisable at or
within 60 days of January 23, 1998.
(6) Includes 16,666 shares issuable upon exercise of options exercisable at or
within 60 days of January 23, 1998.
(7) Includes 11,665 shares issuable upon exercise of options exercisable at or
within 60 days of January 23, 1998.
(8) Includes 576,995 shares issuable upon exercise of options exercisable at
or within 60 days of January 23, 1998.
8
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation for services in all
capacities to the Company of the following persons (the "Named Executive
Officers"): (i) the chief executive officer during fiscal year 1997 and (ii)
the other four most highly compensated executive officers of the Company:
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION(/5/)
---------------------------
ALL OTHER
YEAR SALARY(/1/) BONUS(/1/) COMPENSATION
---- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Robert E. Gray 1997 $1,569,535(/2/) $ -- $1,189
Chairman and Chief Executive 1996 1,564,331(/2/) -- 1,423
Officer 1995 1,263,325(/2/) -- 1,872
Marie St. John Gray 1997 419,457 -- 321
Vice-Chairman, Chief 1996 396,298 -- 408
Designer and Secretary 1995 389,643 50,000 570
Kelly A. Gray 1997 604,616(/3/) -- 1,510
President 1996 558,685(/3/) -- 1,831
1995 482,366(/3/) -- 2,442
David C. Frankel 1997 259,123 -- --
Executive Vice President 1996 62,500 -- --
1995 -- -- --
Diane M. Griffiths 1997 232,691 -- 1,510
Senior Vice President-- 1996 252,885 -- 1,831
Design(/4/) 1995 254,960 10,000 2,442
</TABLE>
- --------
(1) The amounts shown in this column include amounts and awards accrued during
each of fiscal years 1997, 1996 and 1995 that were earned but not paid in
such fiscal year.
(2) These amounts include $500,000, $500,000 and $208,333 of annual salary for
fiscal years 1997, 1996 and 1995, respectively, that was earned but
deferred pursuant to the Employment Agreement, as amended, dated June 1,
1995 by and between the Company and Mr. Gray.
(3) These amounts include modeling fees of $250,000 which were paid to Ms.
Gray during each of fiscal years 1997, 1996 and 1995.
(4) Diane Griffiths resigned from her employment by the Company on November 4,
1997.
(5) The Company has concluded that the aggregate amount of perquisites and
other personal benefits, securities or property paid to each of the listed
officers for each of the fiscal years 1997, 1996 and 1995 did not exceed
the lesser of 10% of such officer's total annual salary and bonus for each
such year or $50,000. Therefore, any such amounts are not included in the
table.
EMPLOYMENT AGREEMENTS
During fiscal 1995, the Company entered into an Employment Agreement with
Robert E. Gray commencing June 1, 1995 for three years. During fiscal 1997
this agreement was amended to extend the term to May 31, 1999. The Company
also entered into new Employment Agreements with Marie St. John Gray and Kelly
A. Gray, effective January 1, 1998 for one year. The agreements require each
employee to devote substantially his or her full business time and attention
and best efforts to the affairs of the Company during the term of the
agreements. The agreements currently provide for the payment of a base salary
at the rate of $975,000 for Robert E. Gray, $500,000 for Marie St. John Gray
and $400,000 for Kelly A. Gray. Mr. Gray's employment agreement also provides
for additional annual compensation of $500,000 to be deferred. Under Kelly A.
Gray's employment
9
<PAGE>
agreement, the Company also compensates Ms. Gray $250,000 each year for her
position as the Signature Model of the Company. The agreements provide for the
payment of severance benefits upon the termination of the employee's
employment. Under the agreements (excluding Mr. Gray's), such severance
benefits in certain circumstances would include payment to the employee of the
employee's base salary for the longer of the remaining term of the agreement
or six months. Under Mr. Gray's employment agreement, such severance benefits
in certain circumstances would include payment to him of all base salary and
all deferred compensation payments through May 31, 1999.
As of July 22, 1996, the Company entered into a letter agreement with David
C. Frankel regarding his employment as Executive Vice President of the
Company. The letter agreement generally provides for an annual base salary of
$250,000, a discretionary bonus and stock options covering up to 50,000 shares
of the Company's Common Stock. During fiscal 1997, Diane M. Griffiths was
employed by the Company subject to an employment agreement which was effective
January 1, 1997. Subsequent to the end of fiscal 1997 Ms. Griffiths resigned
from her employment with the Company and her employment agreement terminated.
RETIREMENT PLAN
The Company maintains the Employees' Profit Sharing Plan, as amended (the
"Retirement Plan"), a qualified profit-sharing plan for the benefit of all
eligible employees. The Retirement Plan contemplates the sharing of profits
and is funded annually by cash contributions at the discretion of the
Company's Board of Directors. The Retirement Plan was funded in each of fiscal
years 1997, 1996 and 1995 with contributions of $500,000.
STOCK OPTION PLAN
During fiscal 1997 and 1996, the Company granted 197,000 and 28,000 stock
options, respectively, under the Plan (each stock option referenced herein
covers one share of the Common Stock). At November 2, 1997, 842,988 stock
options were outstanding under the Plan with exercise prices ranging from
$8.50 to $45.75, and 668,644 of such outstanding options were exercisable. At
November 2, 1997, the Plan had 514,668 stock options available for future
grant. For further information about the Plan, see "Proposal 2--Plan
Amendment--Summary Description of the Plan."
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to the Named
Executive Officers concerning the number of stock options granted during the
fiscal year ended November 2, 1997:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF STOCK
NUMBER OF TOTAL OPTIONS PRICE APPRECIATION FOR
SECURITIES GRANTED TO OPTION TERM
UNDERLYING EMPLOYEES IN EXERCISE EXPIRATION ----------------------
NAME OPTIONS FISCAL YEAR PRICE DATE 5% 10%
---- ----------- -------------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Gray.......... 50,000 25.4% $39.125 5/02/07 $ 63.73 $ 101.48
David C. Frankel........ 25,000 12.7% 44.625 12/16/06 72.69 115.75
David C. Frankel........ 25,000 12.7% 45.000 2/10/07 73.30 116.72
</TABLE>
10
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during the fiscal year
ended November 2, 1997 and unexercised options held by each such officer as of
November 2, 1997:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END FISCAL YEAR-END(/1/)
------------------------- -------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Gray.......... -- -- 370,000 -- $10,193,000 --
Marie St. John Gray..... -- -- 80,000 -- 2,535,000 --
Kelly A. Gray........... -- -- 60,000 -- 1,901,000 --
David C. Frankel........ -- -- -- 50,000 -- --
Diane M. Griffiths(/2/). -- -- 80,000 -- 2,529,000 --
</TABLE>
- --------
(1) The per share dollar value of the options is equal to the difference
between the fair market value of one share of Common Stock and the per
share exercise price of the options. The closing price per share of the
Common Stock at November 2, 1997 was $40.188, as reported by the New York
Stock Exchange.
(2) Diane Griffiths resigned from her employment by the Company on November 4,
1997. On January 15, 1998, Diane Griffiths exercised options to purchase
80,000 shares of Common Stock.
11
<PAGE>
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
report of the Compensation Committee and the Performance Graph shall not be
deemed to be incorporated by reference into any such filings.
COMPENSATION REPORT
The Compensation Committee of the Board of Directors (the "Committee") is
comprised of two independent outside directors. No member of the Committee is
a former or current officer or employee of the Company or any of its
subsidiaries. The Committee is responsible for setting and administering the
policies that govern compensation for executive officers and key employees.
The Committee evaluates the performance of management and determines
compensation policies and levels.
EXECUTIVE COMPENSATION PHILOSOPHY
The Company believes that compensation should reflect the value created for
its shareholders, while supporting the business strategies and long-range
plans of the Company. Accordingly, the Company's executive compensation
program is based on guiding principles designed to align compensation with the
Company's business strategy and performance. These principles are:
(i) to attract and retain key executives critical to the long-term
success of the Company who are of the highest caliber;
(ii) to motivate executives to enhance long-term shareholder value by
building appropriate ownership in the Company; and
(iii) to provide salary increases to key executives whose efforts can be
reflected in the Company's annual and long-term plans and goals.
EXECUTIVE COMPENSATION COMPONENTS
The Company's executive compensation is based on three principal components,
each of which is intended to serve the Company's overall compensation
philosophy.
Base Salary. Base salary for each executive is intended to be determined
principally by the following factors:
(i) the executive's contribution to the Company's business;
(ii) the executive's length of service with the Company; and
(iii) the executive's unique talents and abilities with respect to the
Company's operations.
Salaries for executive officers are provided in employment agreements
between the Company and the executive officers. Such salaries are reviewed by
the Committee on an annual basis.
Annual Bonuses. The Company does not award bonuses to its executive
officers, except in extraordinary situations. The Company believes that an
executive officer is always expected to perform his or her duties to the best
of his or her ability. Consequently, the Company believes that an annual base
salary itself should provide for that performance, and a bonus generally
should not be paid.
Stock Options. Executive officers are eligible to receive grants of
incentive stock options and nonstatutory stock options under the Company's
1993 Stock Option Plan (the "Plan"). The Plan is an integral part of the
Company's compensation system. The Plan is designed to encourage and create
ownership of the Common Stock by key employees. Through the Plan, long-range
interests of key employees are aligned with shareholders'
12
<PAGE>
interests as these employees build meaningful stakes in the Company. Awards to
executive officers must be granted with exercise prices at least equal to the
fair market value of the underlying Common Stock at the date of grant. Stock
options generally vest in installments over multiple years.
CEO COMPENSATION
The Company entered into a three-year employment agreement with Mr. Gray
effective June 1, 1995 which was subsequently amended to extend the term
through May 31, 1999. The agreement requires Mr. Gray to devote substantially
his full business time and attention and best efforts to the affairs of the
Company during the term of the agreement. The agreement provides for the
payment of a base salary at the rate of $975,000 per year. The agreement also
provides for additional compensation totaling $500,000 per year to be
deferred. The agreement provides for the payment of severance benefits upon
termination of Mr. Gray's employment. Under certain circumstances, such
severance benefits would include a lump sum payment to Mr. Gray equal to his
then base salary for the remaining term of the agreement and all remaining
deferred compensation payments called for through the end of such term. As
discussed above, Mr. Gray generally shall not be entitled to an annual bonus.
In fiscal 1997, Mr. Gray received a grant of 50,000 stock options, all of
which vested immediately.
The executive compensation practices of the Company are constantly re-
evaluated to ensure their support of the strategic goals of the Company and
their contribution to the creation of shareholder value.
The foregoing report has been furnished by the Committee:
Richard A. Gadbois, III
David A. Krinsky
December 16, 1997
13
<PAGE>
COMPANY STOCK PRICE PERFORMANCE
The following graph assumes that $100 was invested on March 10, 1993 in each
of St. John Knits, Inc., the S&P 500 Index and the S&P Textile-Apparel
Manufacturers Index ("Textile Index"). It also assumes reinvestment of
dividends, where applicable.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG ST. JOHN KNITS, INC., THE S&P 500 INDEX
AND THE S&P TEXTILE-APPAREL MANUFACTURERS INDEX
FOR THE PERIOD FROM MARCH 10, 1993 TO NOVEMBER 2, 1997
<TABLE>
<CAPTION>
Measurement Period [ST. JOHN S&P S&P TEXTILES
(Fiscal Year Covered) KNITS, INC.] 500 INDEX (APPAREL)
- ------------------- ------------ --------- ------------
<S> <C> <C> <C>
Measurement Pt- 3/11/93 $100 $100 $100
FYE 10/31/93 $ 96 $107 $ 74
FYE 10/31/94 $175 $112 $ 89
FYE 10/29/95 $275 $141 $ 83
FYE 11/03/96 $539 $175 $103
FYE 11/02/97 $467 $231 $118
</TABLE>
* The historical stock performance shown on the graph is not intended to and
may not be indicative of future stock performance.
14
<PAGE>
CERTAIN TRANSACTIONS
The Company leases its corporate office and manufacturing facility in
Irvine, California from GM Properties, a partnership in which the Gray Family
Trust has a 50% general partnership interest. The lease is for a five-year
term expiring on May 30, 2001, with the Company having the option to extend
the lease for another five-year term at a lease amount to be agreed upon. The
current base monthly lease payment under this lease is approximately $57,000,
with annual increases of 4%. During fiscal years 1997, 1996 and 1995, the
Company paid GM Properties $621,000, $645,000 and $600,000, respectively,
under this lease.
The Company leases its Alhambra, California manufacturing facility from
Alhambra Partners, a limited partnership in which the Gray Family Trust has a
65% general partnership interest. The lease is for a five-year term expiring
on August 31, 2001, with the Company having the option to extend the lease for
a five-year term at a lease amount to be agreed upon. The current base monthly
lease payment under this lease is approximately $23,000, with annual increases
of 4%. During fiscal years 1997, 1996 and 1995, the Company paid Alhambra
Partners $263,000, $321,000 and $302,000, respectively, under this lease.
The Company periodically rents certain personal property from Ocean Air
Charters, Inc. ("Ocean"), in which Robert E. Gray and Marie St. John Gray are
the sole shareholders. During fiscal years 1997, 1996 and 1995, the Company
paid $30,000, $37,000 and $3,000, respectively, with respect to such property.
In addition, the Company and Ocean each hold a 50% ownership interest in a
partnership ("Partnership") which owns an airplane. As of November 2, 1997,
each partner had a net capital investment in the Partnership of approximately
$1,270,000. During fiscal years 1997, 1996 and 1995, the Partnership leased
the airplane to the Company and received lease payments totaling $840,000,
$572,000 and $240,000, respectively. As of April 1, 1997, the Company and the
Partnership entered into a lease agreement for the airplane expiring March 31,
1998, at a lease rate of $70,000 per month.
Each of the arrangements between the Company and entities controlled by the
Gray family is, in the opinion of management, on terms no less favorable to
the Company than those that were available from persons not affiliated with
the Company.
In addition, see "Compensation Committee Interlocks and Insider
Participation."
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission ("SEC") initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Executive officers, directors and greater-than ten percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely on its review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended November 2, 1997, all
Section 16(a) filing requirements applicable to its executive officers,
directors and greater-than ten percent beneficial owners were satisfied.
AUDITORS
The Board of Directors has selected Arthur Andersen LLP as its independent
public accountants for the fiscal year ending November 1, 1998. Arthur
Andersen LLP also served as the Company's independent public accountants for
the fiscal year ended November 2, 1997. A representative of this firm will be
in attendance at the Annual Meeting to answer any questions from shareholders
relating to the financial statements of the Company and to make a statement,
if he or she desires to do so.
15
<PAGE>
NOMINATIONS AND SHAREHOLDER PROPOSALS
The Company's Bylaws require that all nominations for persons to be elected
directors, other than those made by the Board of Directors, be made pursuant to
written notice to the Secretary of the Company. The notice must be received not
less than 60 nor more than 90 days prior to the meeting at which the election
will take place (or not later than 10 days after notice or public disclosure of
such meeting date if such disclosure occurs less than 70 days prior to the date
of such meeting). The notice must set forth all information relating to each
nominee that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required pursuant to the Securities
Exchange Act of 1934, as amended. The notice must also include the
shareholder's name and address as they appear on the Company's books and the
class and number of shares of stock beneficially owned by such shareholder.
In addition, the Bylaws require that for business to be properly brought
before an annual meeting by a shareholder, the Secretary of the Company must
have received written notice thereof not less than 60 nor more than 90 days
prior to the meeting (or not later than 10 days after notice or public
disclosure of such meeting date if such disclosure occurs less than 70 days
prior to the date of the meeting). The notice must set forth (i) a brief
description of the business desired to be brought before the meeting and the
reasons therefor; (ii) the shareholder's name and address as they appear on the
Company's books; (iii) the class and number of shares of stock beneficially
owned by the shareholder; and (iv) any material interest of the shareholder in
such business.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the Company's 1999
annual meeting and included in the proxy statement and form of proxy for that
meeting must be received by the Company no later than October 28, 1998.
OTHER MATTERS
The Board of Directors knows of no other matters other than those described
herein that will be presented for consideration at the Annual Meeting. If,
however, any other business shall properly come before the Annual Meeting, the
proxy holders will, as to such items, vote the shares represented by proxies in
accordance with their best judgment.
ANNUAL REPORT
A copy of the 1997 Summary Annual Report to Shareholders, together with a
copy of the Company's annual report on Form 10-K, as filed with the Securities
and Exchange Commission, without exhibits, is being mailed to each shareholder
of record together with the proxy materials. Copies of exhibits to the annual
report on Form 10-K are available, but a reasonable fee per page will be
charged to the requesting shareholder. Shareholders may make requests in
writing to Roger G. Ruppert, Chief Financial Officer, St. John Knits, Inc.,
2722 Michelson Drive, Irvine, California 92612.
By Order of the Board of Directors
[LOGO OF SIGNATURE OF ROBERT E. GRAY]
Robert E. Gray
February 17, 1998
Irvine, California
16
<PAGE>
AMENDMENT NO. II
TO THE
ST. JOHN KNITS, INC.
1993 STOCK OPTION PLAN
WHEREAS, St. John Knits, Inc. (the "Corporation") maintains the St.
John Knits, Inc. 1993 Stock Option Plan, as amended (the "Plan");
WHEREAS, the Board of Directors, after discussion and deliberation,
has determined that it is advisable and in the best interests of the Corporation
and its stockholders to increase the number of shares of the Corporation's
Common Stock (the "Common Stock") which may be issued or delivered pursuant to
the Plan and options granted thereunder by an additional 750,000 shares of
Common Stock (the "Additional Shares"), and to provide that the maximum number
of shares of Common Stock in the aggregate that may be subject to all options
granted under the Plan to any one individual in any calendar year is 150,000
shares; and
WHEREAS, the Board of Directors has the authority to amend the Plan,
subject, however, to the requisite approval of the Corporation's stockholders in
certain circumstances as set forth in the Plan;
RESOLVED, that the Plan be, and it hereby is, amended as set forth
below, such amendments to take effect immediately, subject, however, to the
approval of the Corporation's stockholders:
1. The first Sentence of Section 5 of the Plan is amended to read as
follows:
"The maximum aggregate number of Shares which may be
obtained and sold under this Plan is 2,350,000 Shares of
authorized but unissued Common Stock of the Company."
2. Section 5 of the Plan is amended by adding the following sentence
at the end thereof:
"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."
RESOLVED FURTHER, that the amendments to the Plan approved herein be
presented to the stockholders of the Corporation at the 1998 annual meeting of
stockholders.
<PAGE>
IN WITNESS WHEREOF, this Amendment to the Plan is executed as of this
thirteenth day of February, 1998, by the undersigned duly authorized officer of
the Corporation.
ST. JOHN KNITS, INC.
By: /s/ Roger Ruppert
--------------------------------------
Name: Roger Ruppert
Title: Senior Vice President-Finance/Chief
Financial Officer
2
<PAGE>
- ------------------------------------------------------------------------------
PROXY PROXY
ST. JOHN KNITS, INC.
This Proxy Is Solicited On Behalf Of The Board of Directors For The Annual
Meeting of Shareholders--March 25, 1998
The undersigned hereby appoints Robert E. Gray and Roger G. Ruppert, and
each of them, with full power of substitution, as proxies to represent the
undersigned and vote all shares of stock which the undersigned is entitled to
vote at the Annual Meeting of Shareholders of St. John Knits, Inc. to be held on
March 25, 1998, and at any postponements or adjournments thereof, as specified
below, and to vote in accordance with their best judgement on such other
business as may properly come before the Meeting and at any postponements or
adjournments thereof.
Unless otherwise specified by the undersigned, this proxy will be voted FOR
Proposal 1 and FOR Proposal 2 and will be voted by the proxyholders in
accordance with their best judgement as to any other matters properly transacted
at the Meeting and at any postponements or adjournments thereof. To vote in
accordance with the Board of Directors' recommendations just sign on the reverse
side, no boxes need to be checked.
[_] Check here if you plan to attend the
meeting.
New Address: _________________________
_______________________________________
_______________________________________
[_] Check here for address change.
(Continued and to be signed on reverse side)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(continued from reverse side)
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
[ ]
<TABLE>
<S> <C> <C> <C>
1. Election of Directors: Nominees: Robert E. Gray, WITHHELD
Marie St. John Gray, Kelly A. Gray, Roger G. Ruppert, FOR all from all FOR all nominees, except vote withheld from the
David A. Krinsky and Richard A. Gadbois, III nominees nominees following nominee(s):
---------------------------------
[_] [_] [_] ________________________________________
2. Approval of the amendment to the Company's
1993 Stock Option Plan, as amended, to increase the FOR AGAINST ABSTAIN
number of authorized shares of Common Stock of the [_] [_] [_]
Company reserved for issuance thereunder from 1.6
million shares to 2.35 million shares and to provide
an individual limit on the number of shares subject Dated: ________________________, 1998
to options granted in any one calendar year.
____________________________________
Signature of Shareholder
-----------------------------------
Printed Name of Shareholder
-----------------------------------
Title (if applicable)
PLEASE VOTE, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS.
IF ACTING AS ATTORNEY, EXECUTOR, TRUSTEE,
OR IN REPRESENTATIVE CAPACITY, SIGN NAME
AND INDICATE TITLE. IF SHARES ARE IN
THE NAMES OF MORE THAN ONE PERSON, EACH
SHOULD SIGN.
____________________________________________________________________________________________________________________________________
</TABLE>
