EXHIBIT 10.3

     
 
  Pacific Sunwear of California, Inc.
 
  ID: 95-3759463
Notice of Grant of Restricted Stock Award
  3450 East Miraloma Ave
and Award Agreement
  Anaheim, CA 92806-2101

 

         
[Name]
  Award Number:    
[Address]
  Plan:   2005
[Address]
  ID:    

 
Effective [                    ] , you have been granted an award of 1,000
shares of Pacific Sunwear of California, Inc. (the Company) common stock. These
shares are restricted until the vest date(s) shown below.
The current total value of the award is [                    ] .
The total price of the award is [                    ] .
The award will vest in increments on the date(s) shown.

          Shares   Full Vest
[       ]
    [       ]  
[       ]
    [       ]  
[       ]
    [       ]  
[       ]
    [       ]  

 
By your signature and the Company’s signature below, you and the Company agree
that this award is granted under and governed by the terms and conditions of the
Company’s Award Plan as amended and the Award Agreement, all of which are
attached and made a part of this document.
 

     
 
   
 
   
Pacific Sunwear of California, Inc.
  Date
 
   
 
   
 
   
[Name]
  Date

 

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PACIFIC SUNWEAR OF CALIFORNIA, INC.
2005 PERFORMANCE INCENTIVE PLAN
TERMS AND CONDITIONS OF RESTRICTED STOCK AWARD
     1. General. These Terms and Conditions of Restricted Stock Award (these
“Terms”) apply to a particular award (“Award”) of restricted shares of Common
Stock of the Corporation (“Restricted Stock”) if incorporated by reference in
the Notice of Grant of Restricted Stock (“Grant Notice”) corresponding to that
particular Award. The recipient of the Award identified in the Grant Notice is
referred to as the “Grantee.” The effective date of grant of the Award as set
forth in the Grant Notice is referred to as the “Award Date.” The Award was
granted under and subject to the Pacific Sunwear of California, Inc. 2005
Performance Incentive Plan (the “Plan”). Capitalized terms are defined in the
Plan if not defined herein. The Award has been granted to the Grantee in
addition to, and not in lieu of, any other form of compensation otherwise
payable or to be paid to the Grantee. The Grant Notice and these Terms are
collectively referred to as the "Award Agreement” applicable to the Award.
     2. Vesting. Subject to Section 7 below, the Award shall vest in percentage
installments of the aggregate number of shares of Restricted Stock subject to
the Award as set forth on the Grant Notice. The Board reserves the right to
accelerate the vesting of the Restricted Stock in such circumstances as it, in
its sole discretion, deems appropriate and any such acceleration shall be
effective only when set forth in a written instrument executed by an officer of
the Corporation.
     3. Continuance of Employment. The vesting schedule requires continued
employment or service through each applicable vesting date as a condition to the
vesting of the applicable installment of the Award and the rights and benefits
under this Award Agreement. Employment or service for only a portion of the
vesting period, even if a substantial portion, will not entitle the Grantee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
in Section 7 below or under the Plan.
     Nothing contained in this Award Agreement or the Plan constitutes an
employment or service commitment by the Corporation, affects the Grantee’s
status as an employee at will who is subject to termination without cause,
confers upon the Grantee any right to remain employed by or in service to the
Corporation or any of its Subsidiaries, interferes in any way with the right of
the Corporation or any of its Subsidiaries at any time to terminate such
employment or services, or affects the right of the Corporation or any of its
Subsidiaries to increase or decrease the Grantee’s other compensation or
benefits. Nothing in this paragraph, however, is intended to adversely affect
any independent contractual right of the Grantee without his or her consent
thereto.
     4. Dividend and Voting Rights. After the Award Date, the Grantee shall be
entitled to cash dividends and voting rights with respect to the shares of
Restricted Stock subject to the Award even though such shares are not vested,
provided that such rights shall terminate immediately as to any shares of
Restricted Stock that are forfeited pursuant to Section 7 below.

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     5. Restrictions on Transfer. Prior to the time that they have become vested
pursuant to Section 2 hereof or Section 7 of the Plan, neither the Restricted
Stock, nor any interest therein, amount payable in respect thereof, or
Restricted Property (as defined in Section 8 hereof) 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 transfers to the Corporation.
     6. Stock Certificates.
          (a) Book Entry Form. The Corporation shall issue the shares of
Restricted Stock subject to the Award either: (a) in certificate form as
provided in Section 6(b) below; or (b) in book entry form, registered in the
name of the Grantee with notations regarding the applicable restrictions on
transfer imposed under this Award Agreement.
          (b) Certificates to be Held by Corporation; Legend. Any certificates
representing shares of Restricted Stock that may be delivered to the Grantee by
the Corporation prior to vesting shall be redelivered to the Corporation to be
held by the Corporation until the restrictions on such shares shall have lapsed
and the shares shall thereby have become vested or the shares represented
thereby have been forfeited hereunder. Such certificates shall bear the
following legend and any other legends the Corporation may determine to be
necessary or advisable to comply with all applicable laws, rules, and
regulations:
“The ownership of this certificate and the shares of stock evidenced hereby and
any interest therein are subject to substantial restrictions on transfer under
an Agreement entered into between the registered owner and Pacific Sunwear of
California, Inc. A copy of such Agreement is on file in the office of the
Secretary of Pacific Sunwear of California, Inc.”
          (c) Delivery of Certificates Upon Vesting. Promptly after the vesting
of any shares of Restricted Stock pursuant to Section 2 hereof or Section 7 of
the Plan, the Corporation shall, as applicable, either remove the notations on
any shares of Restricted Stock issued in book entry form which have vested or
deliver to the Grantee a certificate or certificates evidencing the number of
shares of Restricted Stock which have vested (or, in either case, such lesser
number of shares as may be permitted pursuant to Section 8.5 of the Plan). The
Grantee (or the beneficiary or personal representative of the Grantee in the
event of the Grantee’s death or disability, as the case may be) shall deliver to
the Corporation any representations or other documents or assurances as the
Corporation or its counsel may determine to be necessary or advisable in order
to ensure compliance with all applicable laws, rules, and regulations with
respect to the grant of the Award and the delivery of shares of Common Stock in
respect thereof. The shares so delivered shall no longer be restricted shares
hereunder.
          (d) Stock Power; Power of Attorney. Concurrently with the execution
and delivery of this Award Agreement, the Grantee shall deliver to the
Corporation an executed stock power in the form attached hereto as Exhibit A, in
blank, with respect to such shares. The Corporation shall not deliver any share
certificates in accordance with this Agreement unless and until the Corporation
shall have received such stock power executed by the Grantee. The Grantee, by
acceptance of the Award, shall be deemed to appoint, and does so appoint by

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execution of this Award Agreement, the Corporation and each of its authorized
representatives as the Grantee’s attorney(s)-in-fact to effect any transfer of
unvested forfeited shares (or shares otherwise reacquired by the Corporation
hereunder) to the Corporation as may be required pursuant to the Plan or this
Award Agreement and to execute such documents as the Corporation or such
representatives deem necessary or advisable in connection with any such
transfer.
     7. Effect of Termination of Employment or Services. If the Grantee ceases
to be employed by or ceases to provide services to the Corporation or a
Subsidiary (the date of such termination of employment or service is referred to
as the Grantee’s “Severance Date”), the Grantee’s shares of Restricted Stock
(and related Restricted Property as defined in Section 8 hereof) shall be
forfeited to the Corporation to the extent such shares have not become vested
pursuant to Section 2 hereof or Section 7 of the Plan upon the Severance Date
(regardless of the reason for such termination of employment or service, whether
with or without cause, voluntarily or involuntarily, or due to death or
disability). Upon the occurrence of any forfeiture of shares of Restricted Stock
hereunder, such unvested, forfeited shares and related Restricted Property shall
be automatically transferred to the Corporation as of the Severance Date,
without any other action by the Grantee (or the Grantee’s beneficiary or
personal representative in the event of the Grantee’s death or disability, as
applicable). No consideration shall be paid by the Corporation with respect to
such transfer. The Corporation may exercise its powers under Section 6(d) hereof
and take any other action necessary or advisable to evidence such transfer. The
Grantee (or the Grantee’s beneficiary or personal representative in the event of
the Grantee’s death or disability, as applicable) shall deliver any additional
documents of transfer that the Corporation may request to confirm the transfer
of such unvested, forfeited shares and related Restricted Property to the
Corporation.
     8. Adjustments Upon Specified Events. Upon the occurrence of certain events
relating to the Corporation’s stock contemplated by Section 7.1 of the Plan, the
Administrator shall make adjustments if appropriate in the number and kind of
securities that may become vested under the Award. If any adjustment shall be
made under Section 7.1 of the Plan or an event described in Section 7.3 of the
Plan shall occur and the shares of Restricted Stock are not fully vested upon
such event or prior thereto, the restrictions applicable to such shares of
Restricted Stock shall continue in effect with respect to any consideration,
property or other securities (the “Restricted Property” and, for the purposes of
this Award Agreement, “Restricted Stock” shall include “Restricted Property”,
unless the context otherwise requires) received in respect of such Restricted
Stock. Such Restricted Property shall vest at such times and in such proportion
as the shares of Restricted Stock to which the Restricted Property is
attributable vest, or would have vested pursuant to the terms hereof if such
shares of Restricted Stock had remained outstanding. To the extent that the
Restricted Property includes any cash (other than regular cash dividends), such
cash shall be invested, pursuant to policies established by the Administrator,
in interest bearing, FDIC-insured (subject to applicable insurance limits)
deposits of a depository institution selected by the Administrator, the earnings
on which shall be added to and become a part of the Restricted Property.
     9. Tax Withholding. The Corporation (or any of its Subsidiaries last
employing the Grantee) shall be entitled to require a cash payment by or on
behalf of the Grantee and/or to deduct from other compensation payable to the
Grantee any sums required by federal, state or local tax law to be withheld with
respect to the vesting of any Restricted Stock. Alternatively,

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the Grantee or other person in whom the Restricted Stock vests may irrevocably
elect, in such manner and at such time or times prior to any applicable tax date
as may be permitted or required under Section 8.5 of the Plan and rules
established by the Administrator, to have the Corporation withhold and reacquire
shares of Restricted Stock at their fair market value at the time of vesting to
satisfy any withholding obligations of the Corporation or its Subsidiaries with
respect to such vesting. Any election to have shares so held back and reacquired
shall be subject to such rules and procedures, which may include prior approval
of the Administrator, as the Administrator may impose, and shall not be
available if the Grantee makes or has made an election pursuant to Section 83(b)
of the Code with respect to such Award.
     10. Notices. Any notice to be given under the terms of this Award Agreement
shall be in writing and addressed to the Corporation at its principal office to
the attention of the Secretary, and to the Grantee at the Grantee’s last address
reflected on the Corporation’s payroll records. Any notice shall be delivered in
person or shall be 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. Any such notice shall be given only
when received, but if the Grantee is no longer an Eligible Person, shall be
deemed to have been duly given five business days after the date mailed in
accordance with the foregoing provisions of this Section 10.
     11. Plan. The Award and all rights of the Grantee under this Award
Agreement are subject to the terms and conditions of the provisions of the Plan,
incorporated herein by reference. The Grantee agrees to be bound by the terms of
the Plan and this Award Agreement. The Grantee acknowledges having read and
understanding the Plan, the Prospectus for the Plan, and this Award Agreement.
Unless otherwise expressly provided in other sections of this Award 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
Grantee 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.
     12. Entire Agreement. This Award Agreement and the Plan together 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 may be amended pursuant to Section 8.6 of the Plan. This
Agreement may be amended by the Board from time to time. Any such amendment must
be in writing and signed by the Corporation. Any such amendment that materially
and adversely affects the Grantee’s rights under this Agreement requires the
consent of the Grantee in order to be effective with respect to the Award. The
Corporation may, however, unilaterally waive any provision hereof in writing to
the extent such waiver does not adversely affect the interests of the Grantee
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.
     13. Counterparts. This Award 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.

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     14. Section Headings. The section headings of this Award Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof.
     15. Governing Law. This Award 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.

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EXHIBIT A
STOCK POWER
     FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Award
Agreement between Pacific Sunwear of California, Inc., a California corporation
(the “Corporation”), and the individual named below (the “Individual”) dated as
of                     , 2006, the Individual, hereby sells, assigns and
transfers to the Corporation, an aggregate ___ shares of Common Stock of the
Corporation, standing in the Individual’s name on the books of the Corporation
and represented by stock certificate number(s)
                                                             to which this
instrument is attached, and hereby irrevocably constitutes and appoints
                                                                                                                        
as his or her attorney in fact and agent to transfer such shares on the books of
the Corporation, with full power of substitution in the premises.
Dated                     , ________

     
 
   
 
  Signature
 
   
 
   
 
  Print Name

(Instruction: Please do not fill in any blanks other than the signature line.
The purpose of the assignment is to enable the Corporation to exercise its
sale/purchase option set forth in the Restricted Stock Award Agreement without
requiring additional signatures on the part of the Individual.)