Document:

AGMT OF INTENT TO SELL SJKI COMMON STOCK, MAY 21, 2004

 Exhibit 10.5 
  
 AGREEMENT 
  
 This Agreement, dated May 21, 2004, is entered into by and between Bob Gray, an individual (“Mr. Gray”) and St. John Knits International,
Incorporated, a Delaware corporation (“SJKI”). 
  
 Pursuant to Section 3.11 of the Stockholders’ Agreement, dated July 7, 1999 (the “SA”), Mr. Gray has notified SJKI of his intent to sell to SJKI common stock owned or controlled by him in return for consideration equal to
Five Million Dollars ($5,000,000). 
  
 Mr. Gray and SJKI have,
pursuant to the terms of Section 3.11(c) of the SA, agreed that the fair market value of the shares for this transaction shall be $30.00 per share. Both parties waive any right to have the fair market value determined in accordance with the
definition of Fair Market Value as set forth in the SA. 
  
 The
parties also agree that the payment described above shall occur as soon as reasonably practicable after the execution of this Agreement. 
  
 Executed this 21st
day of May, 2004. 
  

									
	 ST. JOHN KNITS INTERNATIONAL,
 INCORPORATED,
 a Delaware corporation
	 	 	 	 BOB GRAY,
 an individual

			
	 	 	 	 	 
	 Name:
	 	Bruce Fetter	 	 	 	 	 	 
	 Title:
	 	Co-Chief Executive OfficerFORM OF TIME OPTION AGMT FOR AMENDED AND RESTATED SJKI 1999 STOCK OPTION PLAN

 Exhibit 10.6 
  
 FORM OF 
 TIME
OPTION AGREEMENT 
  
 THIS AGREEMENT (the “Agreement”),
is made effective as of the [    ] day of [            ], [    ], (hereinafter called the “Grant Date”), between ST. JOHN KNITS
INTERNATIONAL, INCORPORATED, a Delaware corporation (hereinafter called the “Company”), and [NAME] (hereinafter called the “Participant”): 
  
 R E C I T A L S: 
  
 WHEREAS, the Company has adopted the Amended and Restated St. John Knits
International, Incorporated 1999 Stock Option Plan (the “Plan”), which Plan is incorporated herein by reference and made a part of this Agreement. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan;

  
 WHEREAS, the Committee has determined that it would be in the
best interests of the Company and its stockholders to grant the option provided for herein (the “Option”) to the Participant pursuant to the Plan and the terms set forth herein; and 
  
 WHEREAS, simultaneous with the Company’s grant of this Option to the
Participant, the Participant acknowledges that Participant shall, if the Participant has not already, become a party to the Management Stockholders’ Agreement between and among St. John Knits, Inc., the Company, Vestar/Gray Investors LLC,
Vestar/SJK Investors LLC and all other members of management of the Company who have received or will receive options to acquire shares of Common Stock (the “Management Stockholders’ Agreement”). 
  
 NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties agree as follows: 
  
 1. Grant of the
Option. The Company hereby grants to the Participant the right and option (the “Option”) to purchase, on the terms and conditions hereinafter set forth, all or any part of an aggregate of [NUMBER] shares of Common Stock, subject
to adjustment as set forth in the Plan. The per share purchase price of the shares of Common Stock subject to the Option (the “Exercise Price”) shall be $[PRICE]. The Option is intended to be a non-qualified stock option, and is not
intended to be treated as an option that complies with Section 422 of the Internal Revenue Code of 1986, as amended. 
  
 2. Vesting. At any time, the portion of the Option which has become vested and exercisable as described in this Section 2 is hereinafter referred
to as the “Vested Portion.” 
  
 (a) Time Vesting.
Subject to paragraphs (b) and (c) of this Section 2, the Option shall vest and become exercisable with respect to twenty percent (20%) of the shares of Common Stock initially covered by the Option on each of the first, second, third, fourth and
fifth anniversaries of the Grant Date. 

 (b) Termination of Employment. If the Participant’s employment with the Company is terminated
for any reason, the Option shall, to the extent not then vested, be canceled by the Company without consideration and the Vested Portion of the Option shall remain exercisable for the period set forth in Section 3(a). 
  
 (c) Change of Control. Notwithstanding any other provisions of this
Agreement to the contrary, in the event of a change of control, the Option shall, to the extent not then vested and not previously canceled, immediately become fully vested and exercisable. For purposes of this Agreement, a change of control shall
be deemed to occur as determined in the sole discretion of the Committee. 
  
 3. Exercise of Option. 
  
 (a)
Period of Exercise. Subject to the provisions of the Plan and this Agreement, the Participant may exercise all or any part of the Vested Portion of the Option at any time prior to the earliest to occur of: 
  
 (i) the tenth anniversary of the Grant Date; 
  
 (ii) six months following the date of the Participant’s termination of
employment as a result of death or Disability; 
  
 (iii) ninety
days following the date of the Participant’s termination of employment by the Company without Cause (other than as a result of death or Disability) or by the Participant for Good Reason; and 
  
 (iv) the date of the Participant’s termination of employment by the
Company for Cause or by the Participant without Good Reason. 
  
 For purposes of this Agreement: 
  
 “Cause” shall mean “cause” as defined in any employment agreement entered into by and between the Participant and the Company or any of its Subsidiaries which is in effect as of or after the Grant Date (as the same may
be amended in accordance with the terms thereof) or if not defined therein or if there shall be no such agreement, “Cause” shall mean (i) willful malfeasance or willful misconduct in connection with the performance of his duties as such,
(ii) the commission of (a) any felony or (b) a misdemeanor involving moral turpitude; 
  
 “Disability” shall mean “disability” as defined in any employment agreement entered into by and between the
Participant and the Company or any of its Subsidiaries which is in effect as of or after the Grant Date (as the same may be amended in accordance with the terms thereof) or if not defined therein or if there shall be no such agreement, as defined in
the Company long-term disability plan as in effect from time to time, or if there shall be no plan or if not defined therein, the Participant’s becoming physically or mentally incapacitated and consequent inability for a period of six (6)
months in any twelve (12) consecutive month period to perform the Participant’s duties to the Company or any Subsidiary; 
  

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 “Good Reason” shall mean, if the Participant has entered into an employment
agreement with the Company or any of its Subsidiaries which is in effect as of or after the Grant Date, the occurrence of such events which, under the terms of such employment agreement (as the same may be amended in accordance with the terms
thereof), would expressly enable the Participant to resign from employment and be treated under such employment agreement as though the Participant’s employment had been terminated by the Company without “Cause” or, if the employment
agreement does not include such provisions or if there shall be no such employment agreement, “Good Reason” shall mean: (i) the Company or any Subsidiary has failed to pay the Participant his salary; (ii) the office where the Participant
performs his duties is moved more than 30 miles from where the Participant performed the Participant’s duties on the Grant Date; (iii) a substantial reduction of the Participant’s base salary (other than an across the board reduction
similarly affecting other comparable employees of the Company or its Subsidiaries) or (iv) a substantial diminution of the Participant’s duties, which, in each case, has not been remedied within a reasonable time specified by the Participant
that is not less than thirty (30) days after delivery to the Company of written notice describing the event constituting Good Reason. 
  
 (b) Method of Exercise. 
  
 (i) Subject to Section 3(a), the Vested Portion of the Option may be exercised by delivering to the Company at its principal office written notice of
intent to so exercise; provided that, the Option may be exercised with respect to whole shares of Common Stock only. Such notice shall specify the number of shares of Common Stock for which the Option is being exercised and shall be
accompanied by payment in full of the Exercise Price. The payment of the Exercise Price shall be made in cash or, subject to the consent of the Committee, in shares of Common Stock which have been owned by the Participant for at least six months,
such shares to be valued at their Fair Market Value (as such term is defined in the Management Stockholders’ Agreement) as of the date of exercise. 
  
 (ii) Notwithstanding any other provision of the Plan or this Agreement to the contrary, the Option may not be exercised prior to the completion of any
registration or qualification of the Option or the shares of Common Stock that is required to comply with applicable state and federal securities or any ruling or regulation of any governmental body or national securities exchange that the Committee
shall in its sole discretion determine in good faith to be necessary or advisable. 
  
 (iii) Upon the Company’s determination that the Option has been validly exercised as to any of the shares of Common Stock, the Company shall issue certificates in the Participant’s name for such shares.
However, the Company shall not be liable to the Participant for damages relating to any delays in issuing the certificates to him, any loss of the certificates, or any mistakes or errors in the issuance of the certificates or in the certificates
themselves. 
  
 (iv) In the event of the Participant’s death,
the Vested Portion of the Option shall remain exercisable by, the Participant’s executor or administrator, or the person or persons to whom the Participant’s rights under this Agreement shall pass by will or by the laws of descent and
distribution as the case may be, to the extent set forth in Section 3(a) (any of the 
  

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 foregoing, a “Permitted Transferee”). Any heir or legatee of the Participant shall take rights herein granted
subject to the terms and conditions hereof. During the Participant’s lifetime, the Option is exercisable only by the Participant. 
  
 (v) As a condition to exercising the Option, the Participant shall become a party to the Management Stockholders’ Agreement. 
  
 4. No Right to Continued Employment. Neither the Plan nor this
Agreement shall be construed as giving the Participant the right to be retained in the employ of, or in any consulting relationship to, the Company or any Affiliate. Further, the Company or an Affiliate may at any time dismiss the Participant or
discontinue any consulting relationship, free from any liability or any claim under the Plan or this Agreement, except as otherwise expressly provided herein. 
  

5. Legend on Certificates. To the extent provided by the Management Stockholders’ Agreement, the certificates representing the shares of
Common Stock purchased by exercise of the Option shall contain a legend stating that they are subject to the Management Stockholders’ Agreement and may be subject to such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such shares are listed, and any applicable Federal or state laws, and the Committee may cause an
additional legend or legends to be put on any such certificates to make appropriate reference to such other restrictions. 
  
 6. Transferability. The Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant
otherwise than to a Permitted Transferee, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided that the
designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the Option to a Permitted Transferee shall be effective to bind the Company unless the
Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the Permitted Transferee or Transferees of the terms and
conditions hereof. 
  
 7. Withholding. A Participant shall
be required to pay to the Company or any Affiliate, and the Company shall have the right and is hereby authorized to withhold, any applicable withholding taxes in respect of an Option, its exercise or any payment or transfer under an Option or under
the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such withholding taxes. 
  

8. Securities Laws; Representations. 
  
 (a) Upon the acquisition of any shares of Common Stock pursuant to the exercise of the Option, the Participant will make or enter into such written
representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws or with this Agreement. 
  

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 (b) Participant represents and warrants that Participant, either alone or with a representative advisor,
has sufficient knowledge and experience in financial and business matters that Participant is capable of evaluating the merits and risks of this Option grant and, in the event such Option is exercised, the ownership of such shares of Common Stock.

  
 9. Notices. Any notice necessary under this Agreement
shall be addressed to the Company in care of its Secretary at the principal executive office of the Company and to the Participant at the address appearing in the personnel records of the Company for the Participant or to either party at such other
address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee. 
  

10. Choice of Law. THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. 
  
 11.
Option Subject to Plan and Management Stockholders’ Agreement. By entering into this Agreement the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan and the Management Stockholders’
Agreement. The Option is subject to the Plan and the Management Stockholders’ Agreement. The terms and provisions of the Plan and the Management Stockholders’ Agreement as they may be amended from time to time in accordance with their
respective terms are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan or the Management Stockholders’ Agreement, the applicable terms and
provisions of the Plan or the Management Stockholders’ Agreement, as applicable, will govern and prevail. In the event of a conflict between any term or provision of the Plan and any term or provision of the Management Stockholders’
Agreement, the applicable terms and provisions of the Management Stockholders’ Agreement will govern and prevail. 
  
 12. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement. 
  

			
	 ST. JOHN KNITS INTERNATIONAL,
 INCORPORATED

		
	 By:
	 	  

	 Title:
	 	  

  
 Agreed and acknowledged as of
the date 
 first above written: 
  

	
	

	[NAME]

  

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