EXHIBIT 10.3
PACIFIC SUNWEAR OF CALIFORNIA, INC.
2005 PERFORMANCE INCENTIVE PLAN
RESTRICTED STOCK UNIT AWARD AGREEMENT
THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this "Agreement") is dated
as of May 24, 2007 by and between Pacific Sunwear of California, Inc., a
California corporation (the "Corporation"), and Sally Frame Kasaks (the
"Participant").
W I T N E S S E T H
WHEREAS, pursuant to the Pacific Sunwear of California, Inc. 2005
Performance Incentive Plan (the "Plan"), the Corporation has granted to the
Participant effective as of the date hereof (the "Award Date"), a credit of
restricted stock units under the Plan (the "Award"), upon the terms and
conditions set forth herein and in the Plan.
NOW THEREFORE, in consideration of services rendered and to be rendered
by the Participant, and the mutual promises made herein and the mutual benefits
to be derived therefrom, the parties agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meaning assigned to such terms in the Plan.
2. Grant. Subject to the terms of this Agreement, the Corporation hereby
grants to the Participant an Award with respect to an aggregate of 100,000 stock
units (subject to adjustment as provided in Section 7.1 of the Plan) (the
"Restricted Stock Units"). As used herein, the term "stock unit" shall mean a
non-voting unit of measurement which is deemed for bookkeeping purposes to be
equivalent to one outstanding share of the Corporation's Common Stock (subject
to adjustment as provided in Section 7.1 of the Plan) solely for purposes of the
Plan and this Agreement. The Restricted Stock Units shall be used solely as a
device for the determination of the payment to eventually be made to the
Participant if such Restricted Stock Units vest pursuant to Section 3, Section 8
or Section 9. The Restricted Stock Units shall not be treated as property or as
a trust fund of any kind.
Reference is made to that certain Employment Agreement (the "Employment
Agreement"), dated as of May 22, 2007, between the Corporation and the
Participant. The Award is in complete satisfaction of the rights of the
Participant to be granted restricted stock units by the Corporation pursuant to
Section 3(d)(2) of the Employment Agreement.
3. Vesting. Subject to Section 8 below, the Award shall vest and become
nonforfeitable with respect to one-hundred (100%) of the total number of
Restricted Stock Units (subject to adjustment under Section 7.1 of the Plan) on
January 31, 2010.
4. Continuance of Employment. Except as otherwise provided herein, the
vesting schedule requires continued employment through the vesting date as a
condition to the vesting of the Award and the rights and benefits under this
Agreement. Employment for only a portion of the vesting period, even if a
substantial portion, will not entitle the Participant to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of employment as provided in Section 8 below or under
the Plan.
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Nothing contained in this Agreement or the Plan constitutes an
employment or service commitment by the Corporation, affects the Participant's
status as an employee at will who is subject to termination without cause,
confers upon the Participant any right to remain employed by or in service to
the Corporation or any Subsidiary, interferes in any way with the right of the
Corporation or any Subsidiary at any time to terminate such employment or
services, or affects the right of the Corporation or any Subsidiary to increase
or decrease the Participant's other compensation or benefits. Nothing in this
paragraph, however, is intended to adversely affect the terms of the Employment
Agreement or any other independent contractual right of the Participant without
her consent thereto.
5. Dividend and Voting Rights.
(a) Limitations on Rights Associated with Units. The Participant
shall have no rights as a stockholder of the Corporation, no dividend rights
(except as expressly provided in Section 5(b) with respect to Dividend
Equivalent Rights) and no voting rights, with respect to the Restricted Stock
Units and any shares of Common Stock underlying or issuable in respect of such
Restricted Stock Units until such shares of Common Stock are actually issued to
and held of record by the Participant. No adjustments will be made for dividends
or other rights of a holder for which the record date is prior to the date of
issuance of the stock certificate.
(b) Dividend Equivalent Rights Distributions. As of any date that
the Corporation pays an ordinary cash dividend on its Common Stock, the
Corporation shall pay the Participant an amount equal to the per share cash
dividend paid by the Corporation on its Common Stock on such date multiplied by
the number of Restricted Stock Units remaining subject to this Award as of the
related dividend payment record date. No such payment shall be made with respect
to any Restricted Stock Units which, as of such record date, have either been
paid pursuant to Section 7 or terminated pursuant to Section 8.
6. Restrictions on Transfer. Neither the Award, nor any interest therein
or amount or shares payable in respect thereof may be sold, assigned,
transferred, pledged or otherwise disposed of, alienated or encumbered, either
voluntarily or involuntarily. The transfer restrictions in the preceding
sentence shall not apply to (a) transfers to the Corporation, or (b) transfers
by will or the laws of descent and distribution.
7. Timing and Manner of Payment of Restricted Stock Units. On or as soon
as administratively practical following the vesting of the Award pursuant to
Section 3, Section 8 or Section 9 (and in any event within seventy-five (75)
days following such vesting event), the Corporation shall deliver to the
Participant a number of shares of Common Stock (either by delivering one or more
certificates for such shares or by entering such shares in book entry form, as
determined by the Corporation in its discretion) equal to the number of
Restricted Stock Units subject to this Award that vest on the applicable vesting
date, unless such Restricted Stock Units terminate prior to the given vesting
date pursuant to Section 8; provided, however, that any payment hereunder of the
Restricted Stock Units that is triggered by a termination of the Participant's
employment or services shall be subject to Section 29(c) of the Employment
Agreement. The Corporation's obligation to deliver shares of Common Stock or
otherwise make payment with respect to vested Restricted Stock Units is subject
to the condition precedent that the Participant or other person entitled under
the Plan to receive any shares with respect to the
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vested Restricted Stock Units deliver to the Corporation any representations or
other documents or assurances required pursuant to Section 8.1 of the Plan. The
Participant shall have no further rights with respect to any Restricted Stock
Units that are paid or that terminate pursuant to Section 8 hereof or Section 7
of the Plan.
8. Effect of Termination of Employment. The Participant's Restricted
Stock Units shall terminate to the extent such units have not become vested
prior to the first date the Participant is no longer employed by the
Corporation, regardless of the reason for the termination of the Participant's
employment and regardless of whether the Participant continues to serve
thereafter as a member of the Board or otherwise provides services to the
Corporation in any capacity other than as an employee; provided, however, that
in the event that the Participant's employment is terminated by the Corporation
without Cause (as defined in the Employment Agreement) or by the Participant for
Good Reason (as defined in the Employment Agreement), the Restricted Stock
Units, to the extent then outstanding and unvested, shall become fully vested as
of the date of the termination of the Participant's employment. If any unvested
Restricted Stock Units are terminated hereunder, such Restricted Stock Units
shall automatically terminate and be cancelled as of the applicable termination
date without payment of any consideration by the Corporation and without any
other action by the Participant, or the Participant's beneficiary or personal
representative, as the case may be.
9. Adjustments; Change in Control. Upon the occurrence of certain events
relating to the Corporation's stock contemplated by Section 7.1 of the Plan
(including, without limitation, an extraordinary cash dividend on such stock),
the Administrator shall make adjustments in accordance with such section in the
number of Restricted Stock Units then outstanding and the number and kind of
securities that may be issued in respect of the Award. No such adjustment shall
be made with respect to any ordinary cash dividend for which dividend
equivalents are paid pursuant to Section 5(b). In the event that the vesting of
the Restricted Stock Units is accelerated pursuant to Section 7 of the Plan and
a successor corporation refuses to assume the Plan and the then-outstanding
awards under the Plan (including any then-outstanding Restricted Stock Units) in
connection with an event that constitutes a change in ownership or effective
control of the Corporation (within the meaning of Section 409A of the Code and
regulations and other guidance of the Internal Revenue Service promulgated
thereunder), and, thus, the Plan and the then-outstanding awards thereunder
(including any then-outstanding Restricted Stock Units) will be terminated in
connection with such event, the Restricted Stock Units shall terminate and be
paid in connection with such event in a manner compliant with Treas. Reg.
Section 1.409A-3(j)(4)(ix)(B) promulgated under the Code (or any similar
successor provision).
10.Tax Withholding. Subject to Section 8.1 of the Plan, upon any
distribution of shares of Common Stock in respect of the Restricted Stock Units,
the Corporation shall automatically reduce the number of shares to be delivered
by (or otherwise reacquire) the appropriate number of whole shares, valued at
their then fair market value (with the "fair market value" of such shares
determined in accordance with the applicable provisions of the Plan), to satisfy
any withholding obligations of the Corporation or its Subsidiaries with respect
to such distribution of shares at the minimum applicable withholding rates. In
the event that the Corporation cannot legally satisfy such withholding
obligations by such reduction of shares, or in the event of a cash payment or
any other withholding event in respect of the Restricted Stock Units, the
Corporation (or a Subsidiary) shall be entitled to require a cash payment by or
on behalf of the Participant
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and/or to deduct from other compensation payable to the Participant any sums
required by federal, state or local tax law to be withheld with respect to such
distribution or payment.
11.Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Corporation at its principal office to
the attention of the Secretary, and to the Participant at the Participant's last
address reflected on the Corporation's records, or at such other address as
either party may hereafter designate in writing to the other. Any such notice
shall be given only when received, but if the Participant is no longer an
employee of the Corporation, shall be deemed to have been duly given by the
Corporation when enclosed in a properly sealed envelope addressed as aforesaid,
registered or certified, and deposited (postage and registry or certification
fee prepaid) in a post office or branch post office regularly maintained by the
United States Government.
12.Plan. The Award and all rights of the Participant under this
Agreement are subject to the terms and conditions of the provisions of the Plan,
incorporated herein by reference. The Participant agrees to be bound by the
terms of the Plan and this Agreement. The Participant acknowledges having read
and understanding the Plan, the Prospectus for the Plan, and this Agreement.
Unless otherwise expressly provided in other sections of this Agreement,
provisions of the Plan that confer discretionary authority on the Board or the
Administrator do not (and shall not be deemed to) create any rights in the
Participant unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Board or the Administrator so conferred by
appropriate action of the Board or the Administrator under the Plan after the
date hereof.
13.Entire Agreement. This Agreement and the Plan, together with the
Employment Agreement, constitute the entire agreement and supersede all prior
understandings and agreements, written or oral, of the parties hereto with
respect to the subject matter hereof. The Plan and this Agreement may be amended
pursuant to Section 8.6 of the Plan. Such amendment must be in writing and
signed by the Corporation. The Corporation may, however, unilaterally waive any
provision hereof in writing to the extent such waiver does not adversely affect
the interests of the Participant hereunder, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
14.Limitation on Participant's Rights. Participation in the Plan confers
no rights or interests other than as herein provided. This Agreement creates
only a contractual obligation on the part of the Corporation as to amounts
payable and shall not be construed as creating a trust. Neither the Plan nor any
underlying program, in and of itself, has any assets. The Participant shall have
only the rights of a general unsecured creditor of the Corporation with respect
to amounts credited and benefits payable, if any, with respect to the Restricted
Stock Units, and rights no greater than the right to receive the Common Stock as
a general unsecured creditor with respect to the Restricted Stock Units, as and
when payable hereunder.
15.Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
16.Section Headings. The section headings of this Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof.
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17.Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California without regard
to conflict of law principles thereunder.
18.Construction. It is intended that the terms of the Award will not
result in the imposition of any tax liability pursuant to Section 409A of the
Code. This Agreement shall be construed and interpreted consistent with that
intent.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on
its behalf by a duly authorized officer and the Participant has hereunto set her
hand as of the date and year first above written.
PACIFIC SUNWEAR OF CALIFORNIA, INC., a PARTICIPANT
California corporation
By:
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Signature
Print Name:
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Its:
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Print Name
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