As filed with the Securities and Exchange Commission on August 23, 2012
Registration No. 333-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CHEROKEE INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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95-4182437 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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Incorporation or organization) |
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Identification No.) |
5990 Sepulveda Blvd.
Suite 600
Sherman Oaks, Ca. 91411
(818) 908-9868
(Address of principal executive offices and zip code)
Cherokee Inc. 2013 Stock Incentive Plan
Option to Purchase 30,000 Shares Pursuant to a Non-Plan Stock Option Agreement
(Full title of the Plans)
Henry Stupp
Chief Executive Officer
5990 Sepulveda Blvd.
Suite 600
Sherman Oaks, Ca. 91411
(818) 908-9868
(Name, address and telephone number, including area code, of agent for service)
Copy to:
Scott M. Stanton, Esq.
Morrison & Foerster LLP
12531 High Bluff Drive, Suite 100
San Diego, California 92130
(858) 720-5100
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer o |
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Accelerated filer x |
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Non-accelerated filer o |
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Smaller reporting company o |
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(Do not check if a smaller reporting company) |
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CALCULATION OF REGISTRATION FEE
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Title of Securities to be Registered |
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Amount to
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Proposed maximum
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Proposed maximum
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Amount of
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Common Stock, $.02 par value per share |
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743,815 shares |
(2)(3) |
$ |
12.05 |
(4) |
$ |
8,959,252 |
(4) |
$ |
1,222.04 |
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Common Stock, $.02 par value per share |
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30,000 shares |
(5) |
$ |
14.03 |
(6) |
$ |
420,900 |
(6) |
$ |
57.41 |
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Total |
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773,815 shares |
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$ |
9,380,152 |
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$ |
1,279.45 |
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(1) |
Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “ Securities Act ”), this Registration Statement shall also cover any additional securities that may be offered or issued in connection with any stock dividend, stock split, recapitalization or other similar transaction effected without receipt of consideration that increases the outstanding number of shares of the Registrant’s Common Stock, $.02 par value per share (“ Common Stock ”). |
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(2) |
Represents the sum of (i) 700,000 additional shares of Common Stock authorized to be issued under the Registrant’s 2013 Stock Incentive Plan (the “ 2013 Plan ”), and (ii) 43,815 shares of Common Stock previously reserved but unissued under the Registrant’s 2006 Incentive Award Plan, as amended (the “ 2006 Plan ”) that are now authorized to be issued under the 2013 Plan. An additional 1,186,000 shares of Common Stock subject to outstanding awards under the 2006 Plan as of August 16, 2013 may become issuable under the 2013 Plan pursuant to Section 3(a) of the 2013 Plan. See footnote 3 below. |
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(3) |
No future grants will be awarded under the 2006 Plan, but outstanding awards granted under the 2006 Plan continue to be governed by its terms. Any such shares of Common Stock that are subject to awards under the 2006 Plan which are forfeited, terminate or expire unexercised and would otherwise have been returned to the share reserve under the 2006 Plan will be available for issuance as Common Stock under the 2013 Plan. See footnote 2 above. |
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(4) |
Estimated solely for the purpose of calculating the registration fee. Pursuant to Rule 457(c) and Rule 420(h) under the Securities Act, the proposed maximum offering price per share and the proposed maximum aggregate offering price have been determined on the basis of the average of the high and low prices of the Registrant’s Common Stock reported on the Nasdaq Global Select Market on August 20, 2013. |
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(5) |
Represents shares of Common Stock issuable upon the exercise of a stock option granted pursuant to a Non-Plan Stock Option Agreement. |
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(6) |
The price per share and aggregate offering price are calculated on the basis of $14.03, the exercise price of the shares subject to the outstanding non-plan stock option agreement. |
PART I
INFORMATION REQUIRED IN THE
SECTION 10(A) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
*Information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act of 1933, as amended (the “ Securities Act ”), and the Note to Part I of Form S-8. In accordance with the rules and regulations of the Commission and the instructions to Form S-8, such documents are not being filed with the Commission either as part of this Form S-8 or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the Securities and Exchange Commission (the “ Commission ”) are incorporated by reference herein:
a. The Registrant’s Annual Report on Form 10-K/A for the fiscal year ended February 2, 2013 filed with the Commission on May 6, 2013, which includes audited financial statements for the Registrant’s latest fiscal year.
b. The Registrant’s Definitive Proxy Statement on Schedule 14A, filed with the Commission on May 31, 2013.
c. The Registrant’s Quarterly Report on Form 10-Q for the three month period ended May 4, 2013, filed with the Commission on June 13, 2013.
d. The Registrant’s Current Reports on Form 8-K, filed with the Commission on June 27, 2013 and July 18, 2013.
e. All other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), since the end of the fiscal year covered by the audited financial statements described in (a) above.
f. The description of the Registrant’s Common Stock contained in the Registrant’s Statement on Form 10, filed April 24, 1995 pursuant to Section 12(b) or 12(g) of the Exchange Act, including any amendment or report filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Registration Statement, and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which de-registers all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents; except as to any portion of any future annual or quarterly report to stockholders or document or current report furnished under current Items 2.02 or 7.01 of Form 8-K that is not deemed filed under such provisions. Any statement contained in a document 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 statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Under Section 145 of the Delaware General Corporation Law, the Registrant has broad powers to indemnify its directors and officers against liabilities that they may incur in such capacities, including liabilities under the Securities Act.
The Registrant’s Amended and Restated Certificate of Incorporation limits the liability of directors to the maximum extent permitted by Delaware law. Delaware law provides that directors of a company will not be personally liable to the Registrant or its stockholders for monetary damages for breach of their fiduciary duties as directors, except liability for (a) any breach of their duty of loyalty to the Registrant or its stockholders, (b) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law or (d) any transaction from which the directors derived an improper personal benefit.
The Registrant’s amended and restated Bylaws provide for indemnification of its directors, officers, employees and agents to the maximum extent permitted by Delaware law, and that such right of indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent of the Registrant. The Registrant’s amended and restated Bylaws also authorize the Registrant to advance funds to a director or officer for costs and expenses (including attorneys’ fees) incurred in a suit or proceeding upon receipt of an undertaking by such director or officer to repay such amounts if it is ultimately determined that he or she is not entitled to be indemnified.
The Registrant has entered into indemnification agreements with its directors and certain executive officers, in addition to indemnification provided for in its charter documents, and the Registrant intends to enter into indemnification agreements with any new directors and other executive officers in the future.
The Registrant has obtained a policy of directors’ and officers’ liability insurance that insures the Registrant’s directors and officers against the cost of defense, settlement or payment of a judgement under certain circumstances.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Cherokee Inc. 2013 Stock Incentive Plan (1)
4.2 Stock Option Agreement, dated as of March 25, 2013, by and between Cherokee Inc. and Jason Boling
5.1 Opinion of Morrison & Foerster LLP
23.1 Consent of Morrison & Foerster LLP (contained in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
23.3 Consent of Moss Adams LLP
24.1 Power of Attorney (see Signature Page)
(1) Incorporated by reference to Appendix A of the Cherokee Inc. Definitive Proxy Statement for the 2013 Annual Meeting of Stockholders, which was filed with the Commission on May 31, 2013.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;
provided, however , that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant, Cherokee Inc., 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 Sherman Oaks, State of California, on August 23, 2013.
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CHEROKEE INC. |
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By: |
/s/ Henry Stupp |
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Henry Stupp |
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Chief Executive Officer |
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(Principal Executive Officer) |
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By: |
/s/ Jason Boling |
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Jason Boling |
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Chief Financial Officer |
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(Principal Financial Officer and Principal Accounting Officer) |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Henry Stupp and Jason Boling, and each of them, as attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendment to this Registration Statement and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming the said attorney-in-fact 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 by the following persons in the capacities and on the date indicated.
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Signature |
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Title |
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Date |
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/s/ Henry Stupp |
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Chief Executive Officer (principal executive officer) |
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August 23, 2013 |
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Henry Stupp |
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/s/ Jason Boling |
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Chief Financial Officer (principal financial and accounting officer) |
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August 23, 2013 |
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Jason Boling |
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/s/ Jess Ravich |
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Chairman, Director |
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August 23, 2013 |
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Jess Ravich |
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/s/ Keith Hull |
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Director |
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August 23, 2013 |
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Keith Hull |
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/s/ Timothy Ewing |
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Director |
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August 23, 2013 |
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Timothy Ewing |
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/s/ Robert Galvin |
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Director |
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August 23, 2013 |
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Robert Galvin |
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Director |
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Frank Tworecke |
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INDEX TO EXHIBITS
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Exhibit
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Document |
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4.1 |
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Cherokee Inc. 2013 Stock Incentive Plan (1) |
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4.2 |
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Stock Option Agreement, dated as of March 25, 2013, by and between Cherokee Inc. and Jason Boling |
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5.1 |
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Opinion of Morrison & Foerster LLP |
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23.1 |
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Consent of Morrison & Foerster LLP (contained in Exhibit 5.1) |
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23.2 |
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Consent of Ernst & Young LLP |
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23.3 |
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Consent of Moss Adams LLP |
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24.1 |
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Power of Attorney (see Signature Page) |
(1) Incorporated by reference to Appendix A of the Cherokee Inc. Definitive Proxy Statement for the 2013 Annual Meeting of Stockholders, which was filed with the Commission on May 31, 2013.
Exhibit 4.2
CHEROKEE INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated March 25, 2013, is made by and between Cherokee Inc., a Delaware corporation, hereinafter referred to as the “Company,” and Jason Boling, an executive officer of the Company, hereinafter referred to as “Optionee.”
WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase shares of its Common Stock, par value $0.02 per share (“Common Stock”); and
WHEREAS, following the approval by the Company’s Board of Directors (the “Board”) of that certain Offer Letter (the “Offer Letter”) between the Company and the Optionee, dated as of February 22, 2013, and following the approval by the Compensation Committee of the Board (the “Committee”) on March 25, 2013 of the non-qualified stock option (the “Option”) provided for herein, the Committee has determined that it would be to the advantage and best interest of the Company and its stockholders to grant the Option to the Optionee as an inducement to commence an employment relationship with the Company as an executive officer and as an incentive for increased efforts during such service, and has advised the Company thereof and instructed the undersigned officer to issue said Option; and
WHEREAS, this Option constitutes a material inducement to the Optionee to accept employment with the Company, consistent with Nasdaq Rule 5635(c)(4), which employment commenced on March 25, 2013; and
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
GRANT OF OPTION
1.1 Grant of Option . As contemplated by Section 3(c) of the Offer Letter, and in consideration of the Optionee’s agreement to remain in the service of the Company as an executive officer and for other good and valuable consideration, effective as of March 25, 2013 (the “Date of Grant”), the Company irrevocably grants to the Optionee the option to purchase any part or all of an aggregate of 30,000 shares of Common Stock, upon the terms and conditions set forth in this Agreement. The Option is comprised of 30,000 Non-Qualified Stock Options, with the vesting schedule shown on page two, Section 2.1(a). “Non-Qualified Stock Option” shall mean an option not intended to qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code, as amended (the “Code”) and the regulations promulgated thereunder.
1.2 Purchase Price . The purchase price of the shares of Common Stock covered by the Option shall be $14.03 per share without commission or other charge (which was the closing sale price on the Date of Grant).
1.3 Consideration to the Company . The Option is issued in full satisfaction of any obligation of the Company to issue stock options to the Optionee in connection with the commencement of
his employment pursuant to the Offer Letter or otherwise. In the event of any conflict between the terms of this Agreement and the Offer Letter, this Agreement shall control; provided , however , that the foregoing shall not apply to Section 2.1(c) below.
ARTICLE II
PERIOD OF EXERCISABILITY
2.1 Commencement of Exercisability .
(a) Subject to Sections 2.3 and 4.7, the Option shall vest and become exercisable as follows:
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Vesting Dates |
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Number of
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Total Stock Options that Become
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Option
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Option
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March 25, 2014 |
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10,000 |
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10,000 |
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$ |
14.03 |
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3/25/2020 |
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March 25, 2015 |
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10,000 |
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20,000 |
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$ |
14.03 |
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3/25/2020 |
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March 25, 2016 |
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10,000 |
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30,000 |
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$ |
14.03 |
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3/25/2020 |
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Total |
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30,000 |
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(b) No portion of the Option which has not become vested at such time that the Optionee no longer serves as an employee of the Company (the “Service Termination Date”) shall thereafter become exercisable, except as may be otherwise provided by the Committee.
(c) Notwithstanding the foregoing, the entire unvested portion of the Option may become fully exercisable in connection with a Change of Control Event (as defined in the Offer Letter) as set forth in, and subject to the terms and conditions of, the Offer Letter.
2.2 Duration of Exercisability . The installments provided for in Section 2.1(a) are cumulative. Each such installment which becomes exercisable pursuant to Section 2.1 shall remain exercisable until it becomes unexercisable under Section 2.3.
2.3 Expiration of Option . The Option may not be exercised to any extent by anyone after the first to occur of the following events:
(a) The expiration of seven (7) years from the Date of Grant; or
(b) The expiration of ninety (90) days following the Service Termination Date.
ARTICLE III
EXERCISE OF OPTION
3.1 Person Eligible to Exercise . During the lifetime of the Optionee, only the Optionee may exercise the Option or any portion thereof. After the death of the Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 2.3, be exercised by the Optionee’s personal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution.
3.2 Partial Exercise . Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 2.3; provided , however , that each partial exercise shall be for whole shares only.
3.3 Manner of Exercise . The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary or the Secretary’s office of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 2.3:
(a) A written notice complying with the applicable rules established by the Committee stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Optionee or other person then entitled to exercise the Option or such portion of the Option;
(b) Full cash payment to the Secretary of the Company for the shares with respect to which the Option, or portion thereof, is exercised. However, the Committee may in its sole and absolute discretion (i) allow a delay in payment up to thirty (30) days from the date the Option, or portion thereof, is exercised; (ii) allow payment, in whole or in part, through the delivery of shares of Common Stock which have been owned by the Optionee for at least six months, duly endorsed for transfer to the Company with a Fair Market Value (as defined below) on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof; (iii) allow payment, in whole or in part, through the surrender of shares of Common Stock then issuable upon exercise of the Option having a Fair Market Value on the date of Option exercise equal to the aggregate exercise price of the Option or exercised portion thereof; (iv) allow payment, in whole or in part, through the delivery of a notice that the Optionee has placed a market sell order with a broker with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price, provided that payment of such proceeds is then made to the Company upon settlement of such sale; or (v) allow payment through any combination of the consideration provided in the foregoing subparagraphs (ii), (iii) and (iv);
(c) Such representations and documents as the Committee, in its absolute discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act of 1933, as amended (the “Securities Act”) and any other federal or state securities laws or regulations. The Committee may, in its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars; and
(d) In the event the Option or portion thereof shall be exercised pursuant to Section 3.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option.
(e) “Fair Market Value” shall mean, as of any date, the value of the Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq Global Select Market, Nasdaq Global Market or the Nasdaq Capital Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the last market trading day prior to the day of determination; or
(ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Board.
3.4 Conditions to Issuance of Stock Certificates . The shares of Common Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificate or certificates for shares of Common Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on which such Common Stock is then listed; and
(b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Committee shall, in its absolute discretion, deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares, including payment of all amounts which, under federal, state or local tax law, the Company (or other employer corporation) is required to withhold upon exercise of the Option; and
(e) The lapse of such reasonable period of time following the exercise of the Option as the Committee may from time to time establish for reasons of administrative convenience.
3.5 Rights as Stockholder . The holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until certificates representing such shares shall have been issued by the Company to such holder.
ARTICLE IV
OTHER PROVISIONS
4.1 Administration . The Committee shall have the power to interpret this Agreement and to adopt such rules for the administration, interpretation and application of this Agreement as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be final and binding upon the Optionee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to this Agreement or the Option. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under this Agreement, except with respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations or rules issued thereunder, are required to be determined in the sole discretion of the Committee.
4.2 Option Not Transferable .
(a) Neither the Option nor any interest or right therein or part thereof shall be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the Option has been exercised, or the shares underlying such Option have been issued, and all restrictions applicable to such shares have lapsed. Neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Optionee or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.
(b) During the lifetime of the Optionee, only the Optionee may exercise the Option (or any portion thereof). After the death of the Optionee, any exercisable portion of an Option may, prior to the time when such portion becomes unexercisable under the Option Agreement, be exercised by the Optionee’s personal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution.
4.3 Shares to Be Reserved . The Company shall at all times during the term of the Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement.
4.4 Notices . Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary, and any notice to be given to the Optionee shall be addressed to the Optionee at the address given beneath the Optionee’s signature hereto. By a notice given pursuant to this Section 4.4, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to the Optionee shall, if the Optionee is then deceased, be given to the Optionee’s personal representative if such representative has previously informed the Company of such representative’s status and address by written notice under this Section 4.4. Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.
4.5 Titles . Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
4.6 Construction . This Agreement shall be administered, interpreted and enforced under the laws of the State of California without regard to conflicts of laws thereof.
4.7 Conformity to Securities Laws . The Optionee acknowledges that the Option is intended to conform to the extent necessary with all provisions of the Securities Act and the Securities Exchange Act of 1934, as amended and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.
4.8 Amendment . Except as otherwise set forth herein regarding the Committee’s authority regarding the terms of the Option, this Agreement may only be amended by a written agreement executed by the Optionee and the Company and subject to the prior approval of any such amendment by the Committee.
4.9 Taxes . The Optionee may incur tax liability as a result of the Optionee’s exercise of, or subsequently disposition of the Common Stock underlying, the Option. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE COMON STOCK UNDERLYING THE OPTION.
4.10 Adjustments Upon Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by the Option, the exercise price of the Option, as well as any other terms that the Committee determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or similar transaction affecting the Common Stock, (ii) any other increase or decrease in the number of issued Common Stock effected without receipt of consideration by the Company, or (iii) any other transaction with respect to Common Stock including a corporate merger, consolidation, acquisition of property or stock, separation (including a spin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete) or any similar transaction; provided, however that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” In the event of any distribution of cash or other assets to stockholders other than a normal cash dividend, the Committee shall also make such adjustments as provided in this Section 4.10 or substitute, exchange or grant an award to effect such adjustments (collectively “Adjustments”). Any such Adjustments to the Option will be effected in a manner that precludes the enlargement of rights and benefits under the Option. In connection with the foregoing adjustments, the Committee may, in its discretion, prohibit the exercise of the Option or other issuance of Common Stock, cash or other consideration pursuant to the Option during certain periods of time. Except as the Committee determines, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of shares of Common Stock subject to the Option.
4.11 Limitations Applicable to Section 16 Persons . Notwithstanding any other provision of this Agreement, the Option shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
4.12 Section 409A . This Agreement and the Option shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued or amended after the Date of Grant. Notwithstanding any provision of this Agreement to the contrary, in the event that following the Date of Grant the Committee determines that the Option may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Date of Grant), the Committee may adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (1) exempt the Option from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Option, or (2) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.
4.13 Further Assurances . The Optionee shall from time to time and at all times hereafter make, do, execute, or cause or procure to be made, done and executed such further acts, deeds, conveyances, consents and assurances without further consideration, which may reasonably be requested by the Committee in its discretion to effect the intent of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.
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CHEROKEE INC. |
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By: |
/s/ Henry Stupp |
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Name: |
Henry Stupp |
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Title: |
Chief Executive Officer |
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JASON BOLING |
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By: |
/s/ Jason Boling |
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Name: |
Jason Boling |
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EXHIBIT A
FORM OF EXERCISE NOTICE
Cherokee Inc.
5990 Sepulveda Blvd, Suite 600
Sherman Oaks, CA 91411
Attention: Corporate Secretary
Re: Exercise of Stock Option
Ladies and Gentlemen:
1. Exercise of Option . The undersigned Optionee, , was granted an option (the “Option”) to purchase shares of the Common Stock, par value $0.02 per share (“Common Stock”), of Cherokee Inc., a Delaware corporation (the “Company”), effective as of , pursuant to the Stock Option Agreement, dated (the “Option Agreement”). The undersigned hereby elects to exercise the Option as follows:
The undersigned hereby elects to exercise the Option as to shares of the Common Stock, in accordance with Section 2.1 of the Option Agreement (the “Shares”).
2. Payment . The undersigned has enclosed herewith (representing full payment for such Shares in accordance with Section 3.3 of the Option Agreement). The undersigned authorizes payroll withholding and otherwise will make adequate provision for the tax withholding obligations of the Company, if any, with respect to such exercise.
3. Binding Effect. The undersigned agrees that the Shares are being acquired in accordance with and subject to the terms, provisions and conditions of the Option Agreement set forth therein, to all of which the undersigned hereby expressly assent. This Agreement shall inure to the benefit of and be binding upon the heirs, executors, administrators, successors and assigns of the undersigned.
EXHIBIT 5.1
OPINION OF MORRISON & FOERSTER LLP
August 23, 2013
Cherokee Inc.
5990 Sepulveda Boulevard
Sherman Oaks, California 91411
Re: Cherokee Inc. 2013 Stock Incentive Plan
Stand-Alone Stock Option Agreement
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-8 (the “ Registration Statement ”) of Cherokee Inc. (the “ Company ”) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended (the “ Securities Act ”), of (i) an aggregate of 743,815 shares of your common stock, par value $0.02 (the “ Plan Shares ”) which will be issuable under the Cherokee Inc. 2013 Stock Incentive Plan (the “ Plan ”), and (ii) an aggregate of 30,000 shares of your common stock, par value $0.02 (the “ Option Agreement Shares ”, and collectively with the Plan Shares, the “ Shares ”) issuable under a certain stand-alone stock option agreement entered on March 25, 2013 between the Company and Jason Boling (the “ Option Agreement ”).
We have examined the originals, or photostatic or certified copies, of such records of the Company and certificates of officers of the Company and of public officials and such other documents as we have deemed relevant and necessary as the basis for the opinion set forth below. In our examination, we have assumed the genuineness of all signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies. For the purpose of the opinion rendered below, we have assumed that in connection with (i) the issuance of the Plan Shares, the Company will receive the consideration for such Shares required by the terms of the Plan, and (ii) the issuance of the Option Agreement Shares, the Company will receive the consideration for such Shares required by the terms of the Option Agreement.
Based upon the foregoing examination and in reliance thereon, and subject to the qualifications, assumptions and limitations stated herein and in reliance on the statements of fact contained in the documents that we have examined, we are of the opinion that the Shares, when issued and sold in accordance with the terms set forth in the Plan or the Option Agreement, as the case may be, will be legally issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
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Very truly yours, |
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/s/ Morrison & Foerster LLP |
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Morrison & Foerster LLP |
EXHIBIT 23.2
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the Cherokee Inc. 2013 Stock Incentive Plan and the Option to Purchase 30,000 Shares Pursuant to a Non-Plan Stock Option Agreement of Cherokee Inc. of our reports dated April 30, 2013, with respect to the consolidated financial statements of Cherokee Inc. and the effectiveness of internal control over financial reporting of Cherokee Inc. included in its Annual Report (Form 10-K/A) for the year ended February 2, 2013, filed with the Securities and Exchange Commission.
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/s/ ERNST & YOUNG LLP |
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Los Angeles, California |
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August 20, 2013 |
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EXHIBIT 23.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement (Form S-8) of Cherokee Inc. of our report dated April 12, 2012, relating to the consolidated financial statements of Cherokee Inc., appearing in the Annual Report (Amendment No. 1 to Form 10-K) of Cherokee Inc. for the year ended February 2, 2013, filed with the U.S. Securities and Exchange Commission.
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/s/ Moss Adams LLP |
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Los Angeles, California |
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August 20, 2013 |
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