PACIFIC SUNWEAR OF CALIFORNIA, INC.
EMPLOYEE STOCK PURCHASE PLAN
TABLE OF CONTENTS
Page
1. PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. ELIGIBILITY. . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS. . . . . . . . . 4
5. OFFERING PERIODS . . . . . . . . . . . . . . . . . . . . . . . 4
6. PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . . 4
7. METHOD OF PAYMENT OF CONTRIBUTIONS . . . . . . . . . . . . . . 4
8. GRANT OF OPTION. . . . . . . . . . . . . . . . . . . . . . . . 5
9. EXERCISE OF OPTION . . . . . . . . . . . . . . . . . . . . . . 6
10. DELIVERY . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
11. TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS . . . . . 6
12. ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . 7
13. DESIGNATION OF BENEFICIARY . . . . . . . . . . . . . . . . . . 8
14. TRANSFERABILITY. . . . . . . . . . . . . . . . . . . . . . . . 8
15. USE OF FUNDS; INTEREST . . . . . . . . . . . . . . . . . . . . 9
16. REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
17. ADJUSTMENTS OF AND CHANGES IN THE STOCK. . . . . . . . . . . . . 9
18. POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS . . . . . . . . . 9
19. TERM OF PLAN; AMENDMENT OR TERMINATION . . . . . . . . . . . . . 10
20. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
21. CONDITIONS UPON ISSUANCE OF SHARES . . . . . . . . . . . . . . . 10
22. PLAN CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . 11
23. EMPLOYEES' RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . 11
24. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 11
PACIFIC SUNWEAR OF CALIFORNIA, INC.
EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the Pacific Sunwear
of California, Inc. Employee Stock Purchase Plan (this "Plan").
1. PURPOSE
The purpose of this Plan is to provide Eligible Employees
with an incentive to advance the best interests of the
Corporation (and those Subsidiaries which may be designated
by the Committee as "Participating Corporations") by
providing a method whereby they may voluntarily purchase
Common Stock at a favorable price and upon favorable terms.
2. DEFINITIONS
Capitalized terms used herein which are not otherwise defined
shall have the following meanings.
"Account" shall mean the bookkeeping account maintained
by the Corporation, or by a recordkeeper on behalf of the
Corporation, for a Participant pursuant to Section 7(a).
"Board" shall mean the Board of Directors of the
Corporation.
"Change in Control" shall mean any of the following:
a. Approval by the shareholders of the Corporation
of the dissolution or liquidation of the Corporation;
b. Approval by the shareholders of the Corporation
of an agreement to merge or consolidate, or otherwise
reorganize, with or into one or more entities other than
Subsidiaries, as a result of which less than 50% of the
outstanding voting securities of the surviving or
resulting entity are, or are to be, owned by former
shareholders of the Corporation;
c. Approval by the shareholders of the Corporation
of the sale of substantially all of the Corporation's
business assets to a person or entity that is not a
Subsidiary.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Committee" shall mean the committee appointed by the
Board to administer this Plan pursuant to Section 12.
"Common Stock" shall mean the common stock of the
Corporation.
"Company" shall mean the Corporation and its
Subsidiaries.
"Compensation" shall mean an Eligible Employee's regular
earnings, overtime pay, sick pay, shift differential, shift
premium, vacation pay, incentive compensation, commissions
and bonuses. Compensation also includes any amounts
contributed as salary reduction contributions to a plan
qualifying under Section 401(k), 125 or 129 of the Code. Any
other form of remuneration is excluded from Compensation,
including (but not limited to) the following: prizes,
awards, housing allowances, stock option exercises, stock
appreciation rights, restricted stock exercises, performance
awards, auto allowances, tuition reimbursement and other
forms of imputed income. Notwithstanding the foregoing,
Compensation shall not include any amounts deferred under or
paid from the Corporation's Executive Deferred Compensation
Plan.
"Contributions" shall mean all bookkeeping amounts
credited to the Account of a Participant pursuant to
Section 7(a).
"Corporation" shall mean Pacific Sunwear of California,
Inc., a California corporation.
"Eligible Employee" shall mean any employee of the
Corporation, or of any Subsidiary which has been designated
in writing by the Committee as a "Participating Corporation"
(including any Subsidiaries which have become such after the
date that this Plan is approved by shareholders).
Notwithstanding the foregoing, "Eligible Employee" shall not
include any employee who (i) has not as of the Grant Date
completed at least three months of continuous full-time
employment with the Company, (ii) whose customary employment
is for 20 hours per week or less; or (iii) whose customary
employment is for not more than five months in a calendar
year. In addition, no Officer shall be an Eligible Employee.
"Effective Date" shall mean January 1, 1998.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Exercise Date" shall mean, with respect to an Offering
Period, the last day of that Offering Period.
"Fair Market Value" shall mean the closing price of a
Share on The New York Stock Exchange on such date (or, in the
event that the Common Stock is not traded on such date, on
the immediately preceding trading date), as reported in The
Wall Street Journal or, in the event the Common Stock is not
listed on The New York Stock Exchange, the "Fair Market
Value" shall be the closing price of the Common Stock for
such date (or, in the event that the Common Stock is not
traded on such date, on the immediately preceding trading
date), as reported by the National Association of Securities
Dealers Automated Quotation ("NASDAQ") or, if such price is
not reported, the mean of the bid and asked prices per Share
as reported by NASDAQ or, if such prices are not so listed or
reported, as determined by the Committee (or its delegate),
in its discretion.
"Grant Date" shall mean the first day of each Offering
Period.
"Offering Period" shall mean the six-consecutive month
periods commencing on each January 1 and July 1.
"Officer" shall mean (i) any individual who is a named
officer of the Corporation pursuant to the Corporation's By-
Laws, and (ii) any other individual who the Committee
determines, in its sole discretion, to be (A) a highly
compensated employee (within the meaning of Section 414(q) of
the Code) and (B) an officer of the Company for purposes of
this Plan.
"Option" shall mean the stock option to acquire Shares
granted to a Participant pursuant to Section 8.
"Option Price" shall mean the per share exercise price
of an Option as determined in accordance with Section 8(b).
"Participant" shall mean an Eligible Employee who has
elected to participate in this Plan and who has filed a valid
and effective Subscription Agreement to make Contributions
pursuant to Section 6.
"Plan" shall mean this Pacific Sunwear of California,
Inc. Employee Stock Purchase Plan, as amended from time to
time.
"Rule 16b-3" shall mean Rule 16b-3 promulgated under
Section 16.
"Section 16" shall mean Section 16 of the Exchange Act.
"Share" shall mean a share of Common Stock.
"Subscription Agreement" shall mean the written agreement
filed by an Eligible Employee with the Corporation pursuant
to Section 6 to participate in this Plan.
"Subsidiary" shall mean any corporation in an unbroken
chain of corporations (beginning with the Corporation) in
which each corporation (other than the last corporation) owns
stock possessing 50% or more of the total combined voting
power of all classes of stock in one or more of the other
corporations in the chain.
3. ELIGIBILITY
Any person employed as an Eligible Employee as of a Grant
Date shall be eligible to participate in this Plan during the
Offering Period in which such Grant Date occurs, subject to
the Eligible Employee satisfying the requirements of
Section 6.
4. STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS
The total number of Shares to be made available under this
Plan is 120,000 authorized and unissued or treasury shares of
Common Stock, or Shares repurchased on the open market,
subject to adjustments pursuant to Section 17. In the event
that all of the Shares made available under this Plan are
subscribed prior to the expiration of this Plan, this Plan
may be terminated in accordance with Section 19.
5. OFFERING PERIODS
During the term of this Plan, the Corporation will offer
Options to purchase Shares to all Participants during each
Offering Period. Each Option shall become effective on the
Grant Date. The term of each Option shall be six months and
shall end on the Exercise Date. The first Offering Period
shall commence on or after the Effective Date. Offering
Periods shall continue until this Plan is terminated in
accordance with Section 18 or 19, or, if earlier, until no
Shares remain available for Options pursuant to Section 4.
6. PARTICIPATION
An Eligible Employee may become a participant in this Plan by
completing a Subscription Agreement on a form approved by and
in a manner prescribed by the Committee (or its delegate).
To become effective, a Subscription Agreement must be filed
with the Corporation prior to the start of the Offering
Period with respect to which it is to become effective and
must set forth the percentage of the Eligible Employee's
Compensation (which shall be a whole percentage point not
less than 1% and not more than 10%) to be credited to the
Participant's Account as Contributions each pay period.
Subscription Agreements shall contain the Eligible Employee's
authorization and consent to the Corporation's withholding
from his or her Compensation the amount of his or her
Contributions. Subscription Agreements shall remain valid
for all Offering Periods until (i) an Eligible Employee's
participation terminates pursuant to the terms hereof, or
(ii) until a new Subscription Agreement becomes effective.
7. METHOD OF PAYMENT OF CONTRIBUTIONS
(a) The Corporation shall maintain on its books, or cause to
be maintained by a recordkeeper, an Account in the name
of each Participant. The percentage of Compensation
elected to be applied as Contributions by a Participant
shall be deducted from such Participant's Compensation
on each payday during the period for payroll deductions
set forth below and such payroll deductions shall be
credited to that Participant's Account as soon as
administratively practicable after such date. A
Participant may not make any additional payments to his
or her Account. A Participant's Account shall be
reduced by any amounts used to pay the Option Price of
Shares acquired, or by any other amounts distributed
pursuant to the terms hereof.
(b) Payroll deductions with respect to an Offering Period
shall commence as of the first day of the payroll period
which coincides with or immediately follows the
applicable Grant Date and shall end on the last day of
the payroll period which coincides with or immediately
precedes the applicable Exercise Date, unless sooner
terminated by the Participant as provided in this
Section or until his or her participation terminates
pursuant to Section 11.
(c) A Participant may terminate his or her Contributions
during an Offering Period by completing and filing with
the Corporation, in such form and on such terms as the
Committee (or its delegate) may prescribe, a written
withdrawal form which shall be signed by the
Participant. Such termination shall be effective as
soon as administratively practicable after its receipt
by the Corporation.
(d) A Participant may discontinue or otherwise change the
level of his or her Contributions (within Plan limits)
effective as of the next Grant Date by completing and
filing with the Corporation, on such terms as the
Committee (or its delegate) may prescribe, a new
Subscription Agreement.
8. GRANT OF OPTION
(a) On each Grant Date, each Eligible Employee who is a
participant during that Offering Period shall be granted
an Option to purchase a number of Shares. The Option
shall be exercised on the Exercise Date. The number of
Shares subject to the Option shall be determined by
dividing the Participant's Account balance as of the
applicable Exercise Date by the Option Price.
(b) The Option Price per Share of the Shares subject to an
Option shall be the lesser of: (i) 90% of the Fair
Market Value of a Share on the applicable Grant Date; or
(ii) 90% of the Fair Market Value of a Share on the
applicable Exercise Date.
(c) Notwithstanding anything else contained herein, a person
who is otherwise an Eligible Employee shall not be
granted any Option or other right to purchase Shares
under this Plan to the extent (i) it would, if
exercised, cause the person to own "stock" (as such term
is defined for purposes of Section 423(b)(3) of the
Code) possessing 5% or more of the total combined voting
power or value of all classes of stock of the
Corporation, or any Subsidiary, or (ii) such Option
causes such individual to have rights to purchase stock
under this Plan and any other plan of the Company
qualified under Section 423 of the Code which accrue at
a rate which exceeds $25,000 of the fair market value of
the stock of the Corporation or of a Subsidiary
(determined at the time the right to purchase such Stock
is granted) for each calendar year in which such right
is outstanding. For this purpose a right to purchase
Shares accrues when it first become exercisable during
the calendar year. In determining whether the stock
ownership of an Eligible Employee equals or exceeds the
5% limit set forth above, the rules of Section 424(d) of
the Code (relating to attribution of stock ownership)
shall apply.
9. EXERCISE OF OPTION
Unless a Participant's Plan participation is terminated as
provided in Section 11, his or her Option for the purchase of
Shares shall be exercised automatically on the Exercise Date
for that Offering Period, without any further action on the
Participant's part, and the maximum number of whole Shares
subject to such Option shall be purchased at the Option Price
with the balance of such Participant's Account. If any
amount (which is not sufficient to purchase a whole Share)
remains in a Participant's Account after the exercise of his
or her Option on the Exercise Date: (i) such amount shall be
credited to such Participant's Account for the next Offering
Period, if he or she is then a Participant; or (ii) if such
Participant is not a Participant in the next Offering Period,
or if the Committee so elects, such amount shall be refunded
to such Participant as soon as administratively practicable
after such date.
10. DELIVERY
As soon as administratively practicable after the Exercise
Date, the Corporation shall deliver to each Participant a
certificate representing the Shares purchased upon exercise
of his or her Option. The Corporation may make available an
alternative arrangement for delivery of Shares to a
recordkeeping service. The Committee (or its delegate), in
its discretion, may either require or permit the Participant
to elect that such certificates be delivered to such
recordkeeping service. In the event the Corporation is
required to obtain from any commission or agency authority to
issue any such certificate, the Corporation will seek to
obtain such authority. Inability of the Corporation to
obtain from any such commission or agency authority which
counsel for the Corporation deems necessary for the lawful
issuance of any such certificate shall relieve the
Corporation from liability to any Participant except to
return to the Participant the amount of the balance in his or
her Account.
11. TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS
(a) Upon a Participant's termination from employment with
the Company for any reason or in the event that a
Participant is no longer an Eligible Employee or if the
Participant elects to terminate Contributions pursuant
to Section 7(c), at any time prior to the last day of an
Offering Period in which he or she participates, such
Participant's Account shall be paid to him or her or in
cash, or, in the event of such Participant's death, paid
to the person or persons entitled thereto under
Section 13, and such Participant's Option and
participation in the Plan shall be automatically
terminated.
(b) A Participant's termination from Plan participation
precludes the Participant from again participating in
this Plan during that Offering Period. However, such
termination shall not have any effect upon his or her
ability to participate in any succeeding Offering
Period, provided that the applicable eligibility and
participation requirements are again then met. A
Participant's termination from Plan participation shall
be deemed to be a revocation of that Participant's
Subscription Agreement and such Participant must file a
new Subscription Agreement to resume Plan participation
in any succeeding Offering Period.
12. ADMINISTRATION
(a) The Board shall appoint the Committee, which shall be
composed of not less than two members of the Board.
Each member of the Committee, in respect of any
transaction at a time when an affected Participant may
be subject to Section 16 of the Exchange Act, shall be
a "non-employee director" within the meaning of Rule
16b-3 promulgated under Section 16. The Board may, at
any time, increase or decrease the number of members of
the Committee, may remove from membership on the
Committee all or any portion of its members, and may
appoint such person or persons as it desires to fill any
vacancy existing on the Committee, whether caused by
removal, resignation, or otherwise. The Board may also,
at any time, assume or change the administration of this
Plan.
(b) The Committee shall supervise and administer this Plan
and shall have full power and discretion to adopt, amend
and rescind any rules deemed desirable and appropriate
for the administration of this Plan and not inconsistent
with the terms of this Plan, and to make all other
determinations necessary or advisable for the
administration of this Plan. The Committee shall act by
majority vote or by unanimous written consent. No
member of the Committee shall be entitled to act on or
decide any matter relating solely to himself or herself
or any of his or her rights or benefits under this Plan.
The Committee shall have full power and discretionary
authority to construe and interpret the terms and
conditions of this Plan, which construction or
interpretation shall be final and binding on all parties
including the Corporation, Participants and
beneficiaries. The Committee may delegate ministerial
non-discretionary functions to third parties, including
officers of the Corporation.
(c) Any action taken by, or inaction of, the Corporation,
the Board or the Committee relating to this Plan shall
be within the absolute discretion of that entity or
body. No member of the Board or Committee, or officer
of the Corporation shall be liable for any such action
or inaction.
13. DESIGNATION OF BENEFICIARY
(a) A Participant may file, in a manner prescribed by the
Committee (or its delegate), a written designation of a
beneficiary who is to receive any Shares or cash from
such Participant's Account under this Plan in the event
of such Participant's death. If a Participant's death
occurs subsequent to the end of an Offering Period but
prior to the delivery to him or her of any Shares
deliverable under the terms of this Plan, such Shares
and any remaining balance of such Participant's Account
shall be paid to such beneficiary (or such other person
as set forth in Section 13(b)) as soon as
administratively practicable after the Corporation
receives notice of such Participant's death and any
outstanding unexercised Option shall terminate. If a
Participant's death occurs at any other time, the
balance of such Participant's Account shall be paid to
such beneficiary (or such other person as set forth in
Section 13(b)) in cash as soon as administratively
practicable after the Corporation receives notice of
such Participant's death and such Participant's Option
shall terminate. If a Participant is married and the
designated beneficiary is not his or her spouse, spousal
consent shall be required for such designation to be
effective.
(b) Beneficiary designations may be changed by the
Participant (and his or her spouse, if required) at any
time on forms provided and in the manner prescribed by
the Committee (or its delegate). If a Participant dies
with no validly designated beneficiary under this Plan
who is living at the time of such Participant's death,
the Corporation shall deliver all Shares and/or cash
payable pursuant to the terms hereof to the executor or
administrator of the estate of the Participant, or if no
such executor or administrator has been appointed, the
Corporation, in its discretion, may deliver such Shares
and/or cash to the spouse or to any one or more
dependents or relatives of the Participant, or if no
spouse, dependent or relative is known to the
Corporation, then to such other person as the
Corporation may designate.
14. TRANSFERABILITY
Neither Contributions credited to a Participant's Account nor
any Options or rights with respect to the exercise of Options
or right to receive Shares under this Plan may be
anticipated, alienated, encumbered, assigned, transferred,
pledged or otherwise disposed of in any way (other than by
will, the laws of descent and distribution, or as provided in
Section 13) by the Participant. Any such attempt at
anticipation, alienation, encumbrance, assignment, transfer,
pledge or other disposition shall be without effect and all
amounts shall be paid and all shares shall be delivered in
accordance with the provisions of this Plan. Amounts payable
or Shares deliverable pursuant to this Plan shall be paid or
delivered only to the Participant or, in the event of the
Participant's death, to the Participant's beneficiary
pursuant to Section 13.
15. USE OF FUNDS; INTEREST
All Contributions received or held by the Corporation under
this Plan will be included in the general assets of the
Corporation and may be used for any corporate purpose. No
interest will be paid to any Participant or credited to his
or her Account under this Plan.
16. REPORTS
Statements shall be provided to Participants as soon as
administratively practicable following each Exercise Date.
Each Participant's statement shall set forth, as of such
Exercise Date, that Participant's Account balance immediately
prior to the exercise of his or her Option, the Fair Market
Value of a Share, the Option Price, the number of whole
Shares purchased and his or her remaining Account balance, if
any.
17. ADJUSTMENTS OF AND CHANGES IN THE STOCK
In the event that the Shares shall be changed into or
exchanged for a different number or kind of shares of stock
or other securities of the Corporation or of another
corporation (whether by reason of merger, consolidation,
recapitalization, stock split, combination of shares, or
otherwise), or if the number of Shares shall be increased
through a stock split or the payment of a stock dividend,
then there shall be substituted for or added to each Share
theretofore reserved for sale under this Plan, the number and
kind of shares of stock or other securities into which each
outstanding Share shall be so changed, or for which each such
Share shall be exchanged, or to which each such Share is
entitled, as the case may be, or the number or kind of
securities which may be sold under this Plan and the purchase
price per Share shall be appropriately adjusted consistent
with such change in such manner as the Committee (or its
delegate) may deem equitable to prevent substantial dilution
or enlargement of rights granted to, or available for,
Eligible Employees under this Plan.
18. POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS
Upon a dissolution of the Corporation, an event described in
Section 17 that the Corporation does not survive, or the
occurrence of a Change in Control, the Plan and, if prior to
the last day of an Offering Period, any outstanding Option
granted with respect to that Offering Period shall terminate,
subject to any provision that has been expressly made by the
Committee through a plan or reorganization approved by the
Board or otherwise for the survival, substitution,
assumption, exchange or other settlement of the Plan and
Options. In the event a Participant's Option is terminated
pursuant to this Section 18, such Participant's Account shall
be paid to him or her in cash without interest.
19. TERM OF PLAN; AMENDMENT OR TERMINATION
(a) This Plan shall become effective as of the Effective
Date. No new Offering Periods shall commence on or
after the tenth anniversary of the Effective Date and
this Plan shall terminate on such date unless sooner
terminated pursuant to Section 18 or this Section 19.
(b) The Board may amend, modify or terminate this Plan at
any time without notice. Shareholder approval for any
amendment or modification shall not be required, except
to the extent required by Section 423 of the Code or
other applicable law, or deemed necessary or advisable
by the Board. No amendment, modification, or
termination pursuant to this Section 18(b) shall,
without written consent of the Participant, affect in
any manner materially adverse to the Participant any
rights or benefits of such Participant or obligations of
the Corporation under any Option granted under this Plan
prior to the effective date of such change. Changes
contemplated by Section 17 shall not be deemed to
constitute changes or amendments requiring Participant
consent. Notwithstanding the foregoing, the Committee
shall have the right to designate from time to time the
Subsidiaries whose employees may be eligible to
participate in this Plan and such designation shall not
constitute any amendment to this Plan requiring
shareholder approval.
20. NOTICES
All notices or other communications by a Participant to the
Corporation contemplated by this Plan shall be deemed to have
been duly given when received in the form and manner
specified by the Committee (or its delegate) at the location,
or by the person, designated by the Committee (or its
delegate) for that purpose.
21. CONDITIONS UPON ISSUANCE OF SHARES
Shares shall not be issued with respect to an Option unless
the exercise of such Option and the issuance and delivery of
such Shares complies with all applicable provisions of law,
domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, any
applicable state securities laws, the rules and regulations
promulgated thereunder, and the requirements of any stock
exchange upon which the Shares may then be listed.
As a condition precedent to the exercise of any Option, if,
in the opinion of counsel for the Corporation such a
representation is required under applicable law, the
Corporation may require any person exercising such Option to
represent and warrant that the Shares subject thereto are
being acquired only for investment and without any present
intention to sell or distribute such Shares.
22. PLAN CONSTRUCTION
(a) It is the intent of the Corporation that transactions in
and affecting Options in the case of Participants who
are or may be subject to the prohibitions of Section 16
satisfy any then applicable requirements of Rule 16b-3
so that such persons (unless they otherwise agree) will
be entitled to the exemptive relief of Rule 16b-3 in
respect of those transactions and will not be subject to
avoidable liability thereunder. Accordingly, this Plan
shall be deemed to contain and the Shares issued upon
exercise thereof shall be subject to, such additional
conditions and restrictions as may be required by Rule
16b-3 to qualify for the maximum exemption from
Section 16 with respect to Plan transactions.
(b) This Plan and Options are intended to qualify under
Section 423 of the Code.
(c) If any provision of this Plan or of any Option would
otherwise frustrate or conflict with the intents
expressed above, that provision to the extent possible
shall be interpreted so as to avoid such conflict. If
the conflict remains irreconcilable, the Committee may
disregard the provision if it concludes that to do so
furthers the interest of the Corporation and is
consistent with the purposes of this Plan as to such
persons in the circumstances.
23. EMPLOYEES' RIGHTS
Nothing in this Plan (or in any agreement related to this
Plan) shall confer upon any Eligible Employee or Participant
any right to continue in the service or employ of the Company
or constitute any contract or agreement of service or
employment, or interfere in any way with the right of the
Company to reduce such person's compensation or other
benefits or to terminate the services or employment or such
Eligible Employee or Participant, with or without cause, but
nothing contained in this Plan or any document related hereto
shall affect any other contractual right of any Eligible
Employee or Participant. No Participant shall have any
rights as a shareholder until a certificate for Shares has
been issued in the Participant's name following exercise of
his or her Option. No adjustment will be made for dividends
or other rights as a shareholder for which a record date is
prior to the issuance of such Share certificate. Nothing in
this Plan shall be deemed to create any fiduciary
relationship between the Corporation and any Participant.
24. MISCELLANEOUS
(a) This Plan and related documents shall be governed by,
and construed in accordance with, the laws of the State
of California. If any provision shall be held by a
court of competent jurisdiction to be invalid and
unenforceable, the remaining provisions of this Plan
shall continue to be fully effective.
(b) Captions and headings are given to the sections of this
Plan solely as a convenience to facilitate reference.
Such captions and headings shall not be deemed in any
way material or relevant to the construction of
interpretation of this Plan or any provision hereof.
(c) The adoption of this Plan shall not affect any other
compensation or incentive plans in effect for the
Company. Nothing in this Plan shall be construed to
limit the right of the Company (i) to establish any
other forms of incentives or compensation for employees
of the Company, or (ii) to grant or assume options
(outside the scope of and in addition to those
contemplated by this Plan) in connection with any proper
corporate purpose.
25. EFFECTIVE DATE
This Plan shall be effective on the Effective Date, subject,
however, to the approval of this Plan by the shareholders of the
Company within twelve months after the date on which the Board
approved this Plan. Notwithstanding anything else contained herein
to the contrary, no Shares shall be issued or delivered under this
Plan until such shareholder approval is obtained and, if such
shareholder approval is not obtained within such 12-month period of
time, all Contributions credited to a Participant's Account
hereunder shall be refunded to such Participant (without interest)
as soon as practicable after the end of such 12-month period.