exv10w3



 




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







 













 










 




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.



1









 





     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

2









 








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,



3









 







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.



4









 





     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.




5









 








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.)