As filed with the Securities and Exchange Commission on August 29, 1997.
Registration No. 333-____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
PACIFIC SUNWEAR OF CALIFORNIA, INC.
(Exact name of registrant as specified in its charter)
___________________
California 95-3759463
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5037 East Hunter Avenue, Anaheim, California 92807
(Address of principal executive offices)
PACIFIC SUNWEAR OF CALIFORNIA, INC.
FIFTH AMENDED AND RESTATED
1992 STOCK AWARD PLAN
(Full title of the plan)
Greg. H. Weaver
Chief Executive Officer
5037 East Hunter Avenue, Anaheim, California 92807
(Name and address of agent for service)
___________________
Telephone number, including area code, of agent for service:
(714) 693-8066
___________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered<2> per unit<3> price<3> fee<3>
<S> <C> <C> <C> <C>
Common Stock, 200,000 $33.375 $6,675,000.00 $2,022.73
par value $0.01<1> shares
<FN>
<1> This Registration Statement covers, in addition to the
number of shares of Common Stock stated above, other rights
to purchase the shares of Common Stock covered by the
Prospectus.
(2) In October, 1996, the registrant effected a three-for-two
split of its authorized shares of Common Stock (the "Stock
Split"). On July 2, 1993, the registrant registered
262,500 shares of Common Stock (or 175,000 shares of
pre-Stock Split Common Stock) available for grant under the
registrant's 1992 Stock Award Plan on a Registration
Statement on Form S-8 (Registration No. 33-65412), on
December 30, 1994 the registrant registered 203,534 shares of
Common Stock (or 135,689 shares of pre-Stock Split Common
Stock) available for grant under the registrant's Amended and
Restated 1992 Stock Award Plan on a Registration Statement
on Form S-8 (registration No. 33-88114) and on September 28, 1995,
the registrant registered an additional 600,000 shares of Common
Stock (or 400,000 shares of pre-Stock Split Common Stock) under
the registrant's Second Amended and Restated 1992 Stock Award
Plan on a Registration Statement on Form S-8
(Registration No. 33-97512).
(3) The aggregate offering price for 200,000 shares of Common
Stock registered hereby is estimated solely for the purpose
of calculating the registration fee pursuant to Rule 457(c)
which is based on the average of the high and low prices of
the Common Stock on the National Association of Securities
Dealers Automated Quotation System - National Market System
for August 27, 1997.
</FN>
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Pursuant to General Instruction E of Form S-8, the
Registration Statement No. 33-65412 on Form S-8 of the registrant
filed with the Securities and Exchange Commission on July 2, 1993,
relating to the registrant's 1992 Stock Award Plan, the Registration
Statement No. 33-88114 on Form S-8 of the registrant filed with the
Securities and Exchange Commission on December 30, 1994 relating to
the registrant's Amended and Restated 1992 Stock Award Plan and the
Registration Statement No. 33-97512 on Form S-8 of the registrant
filed with the Securities and Exchange Commission on September 29,
1995, relating to the Second Amended and Restated 1992 Stock Award
Plan, are hereby incorporated by this reference.
ITEM 8. EXHIBITS
See the attached Exhibit Index.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant 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 Anaheim, State of California, on August 20, 1997.
By: /s/ Greg H. Weaver
-----------------------------
Greg H. Weaver,
President and Chief Executive
Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Pacific
Sunwear of California, Inc., do hereby constitute and appoint Greg
H. Weaver and Carl W. Womack, or either of them, our true and
lawful attorneys and agents, to do any and all acts and things in
our name and behalf in our capacities as directors and officers and
to execute any and all instruments for us and in our names in the
capacities indicated below, which said attorneys and agents, or
either of them, may deem necessary or advisable to enable said
corporation to comply with the Securities Act of 1933, as amended,
and any rules, regulations, and requirements of the Securities and
Exchange Commission, in connection with this Registration
Statement, including specifically, but without limitation, power
and authority to sign for us or any of us in our names and in the
capacities indicated below, any and all amendments (including post-
effective amendments) to this Registration Statement, or any
related registration statement that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as
amended; and we do hereby ratify and confirm all that the said
attorneys and agents, or either of them, shall do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Greg H. Weaver President, Chief Executive Officer August 20, 1997
Greg H. Weaver and Director (Principal Executive
Officer)
/s/ Carl W. Womack Senior Vice President, Chief August 20, 1997
Carl W. Womack Financial Officer and Secretary
(Principal Financial and Accounting
Officer)
/s/ Julius Jensen III Chairman of the Board of Directors August 20, 1997
Julius Jensen III
/s/ Pearson Cummin III Director August 20, 1997
Pearson Cummin III
/s/ Peter L. Harris Director August 20, 1997
Peter L. Harris
___________________ Director August __, 1997
James B. McCurry
/s/ Sally Frame Kasakas Director August 20, 1997
Sally Frame Kasakas
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
4.1 Pacific Sunwear of California, Inc. Fifth Amended and
Restated 1992 Stock Award Plan
5.1 Opinion of O'Melveny & Myers LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page to the
Registration Statement at page 3)
<PAGE>
PACIFIC SUNWEAR OF CALIFORNIA, INC.
FIFTH AMENDED AND RESTATED 1992 STOCK AWARD PLAN
MARCH __, 1997
<PAGE>
TABLE OF CONTENTS
Page
I. THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Administration. . . . . . . . . . . . . . . . . . . . . . 1
1.3 Participation . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Stock Subject to the Plan . . . . . . . . . . . . . . . . . 2
1.5 Grant of Awards . . . . . . . . . . . . . . . . . . . . . . 3
1.6 Exercise of Awards. . . . . . . . . . . . . . . . . . . . . 3
1.7 No Transferability; Limited Exception to Transfer
Restrictions. . . . . . . . . . . . . . . . . . . . . . . . 3
II. OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Grants. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Option Price. . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Option Period . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Exercise of Options . . . . . . . . . . . . . . . . . . . . 6
2.5 Limitations on Grant of Incentive Stock Options . . . . . . 6
2.6 Non-Employee Director Awards. . . . . . . . . . . . . . . . 7
III. STOCK APPRECIATION RIGHTS . . . . . . . . . . . . . . . . . . . . . 9
3.1 Grants. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Exercise of Stock Appreciation Rights . . . . . . . . . . . 9
3.3 Payment . . . . . . . . . . . . . . . . . . . . . . . . . .10
IV. RESTRICTED STOCK AWARDS. . . . . . . . . . . . . . . . . . . . . . .11
4.1 Grants. . . . . . . . . . . . . . . . . . . . . . . . . . .11
4.2 Restrictions. . . . . . . . . . . . . . . . . . . . . . . .11
V. PERFORMANCE SHARE AWARDS . . . . . . . . . . . . . . . . . . . . . .11
5.1 Grants. . . . . . . . . . . . . . . . . . . . . . . . . . .11
5.2 Special Performance-Based Share Awards. . . . . . . . . . .11
VI. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . .13
6.1 Rights of Eligible Employees, Participants and
Beneficiaries . . . . . . . . . . . . . . . . . . . . . . .13
6.2 Adjustments Upon Changes in Capitalization. . . . . . . . .14
6.3 Termination of Employment . . . . . . . . . . . . . . . . .15
6.4 Acceleration of Awards. . . . . . . . . . . . . . . . . . .17
6.5 Government Regulations. . . . . . . . . . . . . . . . . . .17
6.6 Tax Withholding . . . . . . . . . . . . . . . . . . . . . .18
6.7 Amendment, Termination and Suspension . . . . . . . . . . .18
6.8 Privileges of Stock Ownership; Nondistributive Intent . . .19
6.9 Effective Date of the Plan. . . . . . . . . . . . . . . . .20
6.10 Term of the Plan. . . . . . . . . . . . . . . . . . . . . .20
6.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . .20
6.12 Plan Construction . . . . . . . . . . . . . . . . . . . . .20
VII. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
7.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . .21
<PAGE>
PACIFIC SUNWEAR OF CALIFORNIA, INC.
FIFTH AMENDED AND RESTATED 1992 STOCK AWARD PLAN
I. THE PLAN.
1.1 Purpose.
The purpose of this Plan is to promote the success of the
Company by providing an additional means to attract, motivate and
retain key personnel through the grant of Options and other Awards
that provide added long term incentives for high levels of
performance and for significant efforts to improve the financial
performance of the Company.
1.2 Administration.
(a) This Plan shall be administered by the Committee.
Action of the Committee with respect to the administration of this
Plan shall be taken pursuant to a majority vote or the unanimous
written consent of its members. In the event action by the
Committee is taken by written consent, the action shall be deemed
to have been taken at the time specified in the consent or, if none
is specified, at the time of the last signature. The Committee may
delegate administrative functions to individuals who are officers
or employees of the Company.
(b) Subject to the express provisions of this Plan, the
Committee shall have the authority to construe and interpret this
Plan and any agreements defining the rights and obligations of the
Company and Participants under this Plan, to further define the
terms used in this Plan, to prescribe, amend and rescind rules and
regulations relating to the administration of this Plan, to
determine the duration and purposes of leaves of absence which may
be granted to Participants without constituting a termination of
their employment or consulting services for purposes of this Plan
and to make all other determinations necessary or advisable for the
administration of this Plan. The determination of the Committee on
any of the foregoing matters shall be conclusive.
(c) Any action taken by, or inaction of, the Company, any
Subsidiary, 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 Company or any
Subsidiary, shall be liable for any such action or inaction.
(d) Subject to the requirements of Section 7.1(h), the
Board, at any time it so desires, may 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.
(e) In making any determination or in taking or not taking
any action under this Plan, the Committee or the Board, as the case
may be, may obtain and may rely upon the advice of experts,
including professional advisors to the Company. No director,
officer or agent of the Company shall be liable for any such action
or determination taken or made or omitted in good faith.
(f) The Committee may delegate ministerial, non-
discretionary functions to individuals who are officers or
employees of the Company.
1.3 Participation.
Awards may be granted only to Eligible Employees. An
Eligible Employee who has been granted an Award may, if otherwise
eligible, be granted additional Awards if the Committee shall so
determine. Except as provided in Section 2.6 below, members of the
Board who are not officers or employees of the Company shall not be
eligible to receive Awards.
1.4 Stock Subject to the Plan.
The stock to be offered under this Plan shall be shares of
the Company's authorized but unissued Common Stock. The aggregate
amount of Common Stock that may be issued or transferred pursuant
to Awards (including, but not limited to, Incentive Stock Options)
granted under this Plan shall not exceed the sum of 1,266,034
(after giving effect to the one-for-1.45 reverse stock split
effected in February 1993 and the 3-for-2 stock split effected in
October 1996) shares, subject to adjustment as set forth in Section
6.2. The maximum number of shares of Common Stock that may be
delivered pursuant to options qualified as Incentive Stock Options
granted under this Plan is 1,000,000 shares, subject to adjustment
as set forth in Section 6.2. If any Option and any related Stock
Appreciation Right shall lapse or terminate without having been
exercised in full, or any Common Stock subject to a Restricted
Stock Award shall not vest or any Common Stock subject to a
Performance Share Award or a Performance-Based Award shall not have
been transferred, the unpurchased, unvested or nontransferred
shares subject thereto shall again be available for purposes of
this Plan.
1.5 Grant of Awards.
Subject to the express provisions of this Plan, the
Committee shall determine from the class of Eligible Employees
those individuals to whom Awards under this Plan shall be granted,
the terms of Awards (which need not be identical) and the number of
shares of Common Stock subject to each Award; provided, however,
that the aggregate number of shares of Common Stock subject to
Awards that may be granted to any employee in any twelve month
period may not exceed 410,250, subject to adjustment as described
in Section 6.2 of the Plan. Each Award shall be subject to the
terms and conditions set forth in this Plan and such other terms
and conditions established by the Committee as are not inconsistent
with the purpose and provisions of this Plan. The grant of an
Award is made on the Award Date.
1.6 Exercise of Awards.
An Option or Stock Appreciation Right shall be deemed to be
exercised when the Secretary of the Company receives written notice
of such exercise from the Participant, together with payment of the
purchase price made in accordance with Section 2.2(a), except to
the extent payment may be permitted to be made following delivery
of written notice of exercise in accordance with Section 2.2(b).
Notwithstanding any other provision of this Plan, the Committee may
impose, by rule and in Award Agreements, such conditions upon the
exercise of Awards (including, without limitation, conditions
limiting the time of exercise to specified periods) as may be
required to satisfy applicable regulatory requirements.
1.7 No Transferability; Limited Exception to Transfer
Restrictions.
(a) Limit On Exercise and Transfer. Unless otherwise
expressly provided in (or pursuant to) this Section 1.7, by
applicable law and by the Award Agreement, as the same may be
amended, (i) all Awards are non-transferable and shall not be
subject in any manner to sale, transfer, anticipation, alienation,
assignment, pledge, encumbrance or charge; Awards shall be
exercised only by the Participant; and (ii) amounts payable or
shares issuable pursuant to an Award shall be delivered only to (or
for the account of) the Participant.
(b) Exceptions. The Committee may permit Awards to be
exercised by and paid to certain persons or entities related to the
Participant, including but not limited to members of the
Participant's immediate family, charitable institutions, or trusts
or other entities whose beneficiaries or beneficial owners are
members of the Participant's immediate family and/or charitable
institutions, pursuant to such conditions and procedures as the
Committee may establish. Any permitted transfer shall be subject
to the condition that the Committee receive evidence satisfactory
to it that the transfer is being made for estate and/or tax
planning purposes on a gratuitous or donative basis and without
consideration (other than nominal consideration). Notwithstanding
the foregoing, Incentive Stock Options and Restricted Stock Awards
shall be subject to any and all additional transfer restrictions
under the Code.
(c) Further Exceptions to Limits On Transfer. The exercise
and transfer restrictions in Section 1.7(a) shall not apply to:
(i) transfers to the Company,
(ii) the designation of a beneficiary to receive
benefits in the event of the Participant's death or, if the
Participant has died, transfers to or exercise by the
Participant's beneficiary, or, in the absence of a validly
designated beneficiary, transfers by will or the laws of descent
and distribution,
(iii) transfers pursuant to a QDRO order if approved or
ratified by the Committee,
(iv) if the Participant has suffered a disability,
permitted transfers or exercises on behalf of the Participant by
his or her legal representative, or
(v) the authorization by the Committee of "cashless
exercise" procedures with third parties who provide financing
for the purpose of (or who otherwise facilitate) the exercise of
Awards consistent with applicable laws and the express
authorization of the Committee.
Notwithstanding the foregoing, Incentive Stock Options and
Restricted Stock Awards shall be subject to any and all
additional transfer restrictions under the Code.
II. OPTIONS.
2.1 Grants.
One or more Options may be granted to any Eligible Employee.
Each Option so granted shall be designated by the Committee as
either a Nonqualified Stock Option or an Incentive Stock Option.
2.2 Option Price.
(a) The purchase price per share of Common Stock covered
by each Option shall be determined by the Committee, but in the
case of Incentive Stock Options shall not be less than 100% (110%
in the case of a Participant who owns more than 10% of the total
combined voting power of all classes of stock of the Company) of
the Fair Market Value of the Common Stock on the date the Incentive
Stock Option is granted. The purchase price of any shares
purchased shall be paid in full at the time of each purchase in one
or a combination of the following methods: (i) in cash or by check
payable to the order of the Company, (ii) if authorized by the
Committee or specified in the Option being exercised, by a
promissory note made by the Participant in favor of the Company,
upon the terms and conditions determined by the Committee, and
secured by the Common Stock issuable upon exercise in compliance
with applicable law (including, without limitation, state corporate
law and federal margin requirements) or (iii) if authorized by the
Committee or specified in the Option being exercised, by shares of
Common Stock of the Company already owned by the Participant;
provided, however, that any shares delivered which were initially
acquired upon exercise of a stock option must have been owned by
the Participant at least six months as of the date of delivery.
Shares of Common Stock used to satisfy the exercise price of an
Option shall be valued at their Fair Market Value on the date of
exercise.
(b) In addition to the payment methods described in
subsection (a), the Option may provide that the Option can be
exercised and payment made by delivering a properly executed
exercise notice together with irrevocable instructions to a bank or
broker to promptly deliver to the Company the amount of sale or
loan proceeds necessary to pay the exercise price and, unless
otherwise allowed by the Committee, any applicable tax withholding
under Section 6.6. The Company shall not be obligated to deliver
certificates for the shares unless and until it receives full
payment of the exercise price therefor.
2.3 Option Period.
Each Option and all rights or obligations thereunder shall
expire on such date as shall be determined by the Committee, but
not later than 10 years after the Award Date, and shall be subject
to earlier termination as hereinafter provided.
2.4 Exercise of Options.
Except as otherwise provided in Sections 6.3 and 6.4, an
Option may become exercisable, in whole or in part, on the date or
dates specified in the Award Agreement and thereafter shall remain
exercisable until the expiration or earlier termination of the
Option. No Option shall be exercisable for at least six months
after the Award Date, except in the case of death or Total
Disability. The Committee may, at any time after grant of the
Option and from time to time, increase the number of shares
exercisable at any time so long as the total number of shares
subject to the Option is not increased. No Option shall be
exercisable except in respect of whole shares, and fractional share
interests shall be disregarded. Not less than 10 shares of Common
Stock may be purchased at one time unless the number purchased is
the total number at the time available for purchase under the terms
of the Option.
2.5 Limitations on Grant of Incentive Stock Options.
(a) To the extent that the aggregate fair market value of
stock with respect to which incentive stock options first become
exercisable by a Participant in any calendar year exceeds $100,000,
taking into account both Common Stock subject to Incentive Stock
Options under this Plan and stock subject to incentive stock
options under all other plans of the Company, such options shall be
treated as nonqualified stock options. For purposes of determining
whether the $100,000 limit is exceeded, the fair market value of
stock subject to options shall be determined as of the date the
options are awarded. In reducing the number of options treated as
incentive stock options to meet the $100,000 limit, the most
recently granted options shall be reduced first. To the extent a
reduction of simultaneously granted options is necessary to meet
the $100,000 limit, the Company may, in the manner and to the
extent permitted by law, designate which shares of Common Stock are
to be treated as shares acquired pursuant to the exercise of an
Incentive Stock Option.
(b) There shall be imposed in any Award Agreement relating
to Incentive Stock Options such terms and conditions as are
required in order that the Option be an "incentive stock option" as
that term is defined in Section 422 of the Code.
(c) No Incentive Stock Option may be granted to any person
who, at the time the Incentive Stock Option is granted, owns shares
of outstanding Common Stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company,
unless the exercise price of such Option is at least 110% of the
Fair Market Value of the stock subject to the Option and such
Option by its terms is not exercisable after the expiration of five
years from the date such Option is granted.
2.6 Non-Employee Director Awards.
(a) Participation. Awards under this Section 2.6 shall be
made only to Non-Employee Directors.
(b) Option Grants. As and when any person who is not then
an officer or employee of the Company shall become a director of
the Company, there shall be granted automatically (without any
action by the Board or the Committee) a Nonqualified Stock Option
(the grant or award date of which shall be the date such person
takes office) to such person to purchase 6,000 shares of Common
Stock.
(c) Subsequent Annual Options. In each calendar year
during the term of the Plan, commencing with the 1997 annual
meeting, there shall be granted automatically (without any action
by the Committee or the Board) a Nonqualified Stock Option to
purchase 6,000 shares of Common Stock to each Non-Employee Director
who is re-elected as a director of the Company or who continues as
a director (the grant or award date of which shall be the date of
the annual meeting of shareholders in each such year).
(d) Option Price. The purchase price per share of the
Common Stock covered by each Option granted pursuant to this
Section 2.6 shall be one hundred percent of the Fair Market Value
of the Common Stock on the Award Date. The purchase price of any
shares purchased shall be paid in full at the time of each purchase
in cash or by check or in shares of Common Stock valued at their
Fair Market Value on the business day next preceding the date of
exercise of the Option, or partly in such shares and partly in
cash.
(e) Option Period. Each Option granted under this Section
2.6 and all rights or obligations thereunder shall expire on the
tenth anniversary of the Award Date and shall be subject to earlier
termination as provided below.
(f) Exercise of Options. Except as otherwise provided in
Sections 2.6(g) and 2.6(h), each Option granted under this Section
2.6 shall become exercisable (i) as to one-quarter of the covered
shares on the earlier of (A) the first anniversary of the Award
Date, or (B) the day immediately preceding the first regularly
scheduled Annual Meeting of shareholders first occurring after the
Award Date; and (ii) as to an additional 1/36th of the covered
shares each month thereafter (using the Award Date as the date of
monthly vesting). This provision shall be effective with respect
to all outstanding Options granted pursuant to this Section 2.6 and
all future Options granted pursuant to this Section 2.6 and the
vesting of such Options shall be determined in accordance herewith.
(g) Termination of Directorship. If a Non-Employee
Director Participant's services as a member of the Board terminate,
each Option granted pursuant to Section 2.6(b) or (c) hereof held
by such Non-Employee Director Participant which is not then
exercisable shall terminate; provided, however, that if a Non-
Employee Director Participant's services as a member of the Board
terminate by reason of death or Total Disability, the Committee
may, in its discretion, consider to be exercisable a greater
portion of any such Option than would otherwise be exercisable,
upon such terms as the Committee shall determine. If a Non-
Employee Director Participant's services as a member of the Board
terminate by reason of death or Total Disability, any portion of
any such Option which is then exercisable may be exercised for one
year after the date of such termination or the balance of such
Option's term, whichever period is shorter. If a Non-Employee
Director Participant's services as a member of the Board terminate
for any other reason, any portion of any such Option which is then
exercisable may be exercised for three months after the date of
such termination or the balance of such Option's term, whichever
period is shorter.
(h) Acceleration Upon an Event. Immediately prior to the
occurrence of an Event, in order to protect the holders of Options
granted under this Section 2.6, each Option granted under Section
2.6(b) or (c) hereof shall become exercisable in full.
(i) Adjustments. The specific numbers of shares stated in
the foregoing provisions of Section 2.6(b) and (c) hereof and the
consideration payable for such shares shall be subject to
adjustment in certain events as provided in Section 6.2 of this
Plan.
(j) Effective Date of Section 2.6. This Section 2.6 shall
be effective as of the date of Board approval (March 23, 1994),
subject to shareholder approval within twelve months after such
date.
III. STOCK APPRECIATION RIGHTS.
3.1 Grants.
In its discretion, the Committee may grant Stock
Appreciation Rights concurrently with the grant of Options. A
Stock Appreciation Right shall extend to all or a portion of the
shares covered by the related Option. A Stock Appreciation Right
shall entitle the Participant who holds the related Option, upon
exercise of the Stock Appreciation Right and surrender of the
related Option, or portion thereof, to the extent the Stock
Appreciation Right and related Option each were previously
unexercised, to receive payment of an amount determined pursuant to
Section 3.3. Any Stock Appreciation Right granted in connection
with an Incentive Stock Option shall contain such terms as may be
required to comply with the provisions of Section 422 of the Code
and the regulations promulgated thereunder. In its discretion, the
Committee may also grant Stock Appreciation Rights independently of
any Option subject to such conditions as the Committee may in its
absolute discretion provide.
3.2 Exercise of Stock Appreciation Rights.
(a) A Stock Appreciation Right granted concurrently with
an Option shall be exercisable only at such time or times, and to
the extent, that the related Option shall be exercisable and only
when the Fair Market Value of the stock subject to the related
Option exceeds the exercise price of the related Option.
(b) In the event that a Stock Appreciation Right granted
concurrently with an Option is exercised, the number of shares of
Common Stock subject to the related Option shall be charged against
the maximum amount of Common Stock that may be issued or
transferred pursuant to Awards under this Plan. The number of
shares subject to the Stock Appreciation Right and the related
Option of the Participant shall also be reduced by such number of
shares.
(c) If a Stock Appreciation Right granted concurrently with
an Option extends to less than all the shares covered by the
related Option and if a portion of the related Option is thereafter
exercised, the number of shares subject to the unexercised Stock
Appreciation Right shall be reduced only if and to the extent that
the remaining number of shares covered by such related Option is
less than the remaining number of shares subject to such Stock
Appreciation Right.
(d) A Stock Appreciation Right granted independently of any
Option shall be exercisable pursuant to the terms of the Award
Agreement but in no event earlier than six months after the Award
Date, except in the case of death or Total Disability.
3.3 Payment.
(a) Upon exercise of a Stock Appreciation Right and
surrender of an exercisable portion of the related Option, the
Participant shall be entitled to receive payment of an amount
determined by multiplying
(i) the difference obtained by subtracting the
exercise price per share of Common Stock under the related
Option from the Fair Market Value of a share of Common Stock on
the date of exercise of the Stock Appreciation Right, by
(ii) the number of shares with respect to which
the Stock Appreciation Right shall have been exercised.
(b) The Committee, in its sole discretion, may settle the
amount determined under paragraph (a) above solely in cash, solely
in shares of Common Stock (valued at Fair Market Value on the date
of exercise of the Stock Appreciation Right), or partly in such
shares and partly in cash, provided that the Committee shall have
determined that such exercise and payment are consistent with
applicable law. In any event, cash shall be paid in lieu of
fractional shares. Absent a determination to the contrary, all
Stock Appreciation Rights shall be settled in cash as soon as
practicable after exercise. The exercise price for the Stock
Appreciation Right shall be the exercise price of the related
Option. Notwithstanding the foregoing, the Committee may, in the
Award Agreement, determine the maximum amount of cash or stock or
a combination thereof which may be delivered upon exercise of a
Stock Appreciation Right.
(c) Upon exercise of a Stock Appreciation Right granted
independently of any Option, the Participant shall be entitled to
receive payment of an amount based on a percentage, specified in
the Award Agreement, of the difference obtained by subtracting the
Fair Market Value per share of Common Stock on the Award Date from
the Fair Market Value per share of Common Stock on the date of
exercise of the Stock Appreciation Right. Such amount shall be
paid as described in paragraph (b) above.
IV. RESTRICTED STOCK AWARDS.
4.1 Grants.
Subject to Section 1.4, the Committee may, in its
discretion, grant one or more Restricted Stock Awards to any
Eligible Employee. Each Restricted Stock Award agreement shall
specify the number of shares of Common Stock to be issued to the
Participant, the date of such issuance, the price, if any, to be
paid for such shares by the Participant and the restrictions
imposed on such shares, which restrictions shall not terminate
earlier than six months after the Award Date.
4.2 Restrictions.
(a) Shares of Common Stock included in Restricted Stock
Awards may not be sold, assigned, transferred, pledged or otherwise
disposed of or encumbered, either voluntarily or involuntarily,
until such shares have vested.
(b) Participants receiving Restricted Stock shall be
entitled to dividend and voting rights for the shares issued even
though they are not vested, provided that such rights shall
terminate immediately as to any forfeited Restricted Stock.
(c) In the event that the Participant shall have paid cash
in connection with the Restricted Stock Award, the Award Agreement
shall specify whether and to what extent such cash shall be
returned upon a forfeiture (with or without an earnings factor).
V. PERFORMANCE SHARE AWARDS.
5.1 Grants.
The Committee may, in its discretion, grant Performance
Share Awards to Eligible Employees based upon such factors as the
Committee shall determine. A Performance Share Award agreement
shall specify the number of shares of Common Stock subject to the
Performance Share Award, the price, if any, to be paid for such
shares by the Participant and the conditions upon which issuance to
the Participant shall be based, which issuance shall not be earlier
than six months after the Award Date.
5.2 Special Performance-Based Share Awards.
Without limiting the generality of the foregoing, and in
addition to options granted under other provisions of this Plan,
other performance-based awards within the meaning of Section 162(m)
of the Code ("Performance-Based Awards"), whether in the form of
restricted stock, performance stock, phantom stock, or other
rights, the vesting or payment of which depends on the degree of
achievement of the Performance Goals relative to preestablished
targeted levels for the Company and/or one or more of its
Subsidiaries or divisions, may be granted under this Plan. An
award that is intended to satisfy the requirements of this Section
5.2 shall be designated as a Performance-Based Award at the time of
grant.
(a) Eligible Class. The eligible class of persons for
Performance-Based Awards under this Section shall be the executive
officers of the Company.
(b) Performance Goal Alternatives. The specific
performance goals for Performance-Based Awards granted under this
Section shall be, on an absolute or relative basis, one or more of
the Performance Goals, as selected by the Committee in its sole
discretion. The Committee shall establish in the applicable Award
Agreement the specific performance target(s) relative to the
Performance Goal(s) which must be attained before the compensation
under the Performance-Based Award becomes payable. The specific
targets shall be determined within the time period permitted under
Section 162(m) of the Code (and any regulations issued thereunder)
so that such targets are considered to be preestablished and so
that the attainment of such targets is substantially uncertain at
the time of their establishment. The applicable performance
measurement period may not be less than one nor more than 10 years.
(c) Maximum Performance-Based Award. Notwithstanding any
other provision of the Plan to the contrary, the maximum number of
shares which may be delivered pursuant to awards that are granted
as Performance-Based Awards under this Section 5.2 to any
Participant in any calendar year shall not exceed 410,250 shares,
either individually or in the aggregate, subject to adjustment as
provided in Section 6.2. Awards that are cancelled during the year
shall be counted against this limit to the extent required by
Section 162(m) of the Code.
(d) Committee Certification. Before any Performance-Based
Award under this Section 5.2 is paid, the Committee must certify in
writing that the Performance Goal(s) and any other material terms
of the Performance-Based Award were satisfied; provided, however,
that a Performance-Based Award may be paid without regard to the
satisfaction of the applicable Performance Goal in the event of a
change in control event in accordance with Section 162(m) of the
Code and Section 6.2.
(e) Terms and Conditions of Awards. The Committee will
have the discretion to determine the restrictions or other
limitations of the individual awards granted under this Section 5.2
including the authority to reduce awards, payouts or vesting or to
pay no awards, in its sole discretion, if the Committee preserves
such authority at the time of grant by language to this effect in
its authorizing resolutions or otherwise.
(f) Adjustments for Changes in Capitalization and other
Material Changes. In the event of a change in corporate
capitalization, such as a stock split or stock dividend, or a
corporate transaction, such as a merger, consolidation, spinoff,
reorganization or similar event, or any partial or complete
liquidation of the Company, or any similar event consistent with
regulations issued under Section 162(m) of the Code including,
without limitation, any material change in accounting policies or
practices affecting the Company and/or the Performance Goals or
targets, then the Committee may make adjustments to the Performance
Goals and targets relating to outstanding Performance-Based Awards
to the extent such adjustments are made to reflect the occurrence
of such an event; provided, however, that adjustments described in
this subsection may be made only to the extent that the occurrence
of an event described herein was unforeseen at the time the targets
for a Performance-Based Award were established by the Committee.
VI. OTHER PROVISIONS.
6.1 Rights of Eligible Employees, Participants and
Beneficiaries.
(a) Status as an Eligible Employee shall not be construed
as a commitment that any Award will be made under this Plan to any
Eligible Employee generally.
(b) Nothing contained in this Plan (or in Award Agreements
or in any other documents related to this Plan or to Awards) 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 of such Eligible Employee or Participant, with or
without cause, but nothing contained in this Plan or any document
related thereto shall affect any other contractual right of any
Eligible Employee or Participant.
(c) No Participant, Beneficiary or other person shall have
any right, title or interest in any fund or in any specific asset
(including shares of Common Stock) of the Company by reason of any
Award granted hereunder. Neither the provisions of this Plan (or
of any documents related hereto), nor the creation or adoption of
this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind
or a fiduciary relationship between the Company and any
Participant, Beneficiary or other person. To the extent that a
Participant, Beneficiary or other person acquires a right to
receive an Award hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Company.
6.2 Adjustments Upon Changes in Capitalization.
(a) If the outstanding shares of Common Stock are changed
into or exchanged for cash or a different number or kind of shares
or securities of the Company or of another issuer, or if additional
shares or new or different securities are distributed with respect
to the outstanding shares of the Common Stock, through a
reorganization or merger to which the Company is a party, or
through a combination, consolidation, recapitalization,
reclassification, stock split, stock dividend, reverse stock split,
stock consolidation or other capital change or adjustment, an
appropriate adjustment shall be made in the number and kind of
shares or other consideration that is subject to or may be
delivered under this Plan and pursuant to outstanding Awards. A
corresponding adjustment to the consideration payable with respect
to Awards granted prior to any such change and to the price, if
any, paid in connection with Restricted Stock Awards or Performance
Share Awards or Performance-Based Awards shall also be made. Any
such adjustment, however, shall be made without change in the total
payment, if any, applicable to the portion of the Award not
exercised but with a corresponding adjustment in the price for each
share. Corresponding adjustments shall be made with respect to
Stock Appreciation Rights based upon the adjustments made to the
Options to which they are related or, in the case of Stock
Appreciation Rights granted independently of any Option, based upon
the adjustments made to Common Stock.
(b) Upon the dissolution or liquidation of the Company, or
upon a reorganization, merger or consolidation of the Company with
one or more corporations as a result of which the Company is not
the surviving corporation, the Plan shall terminate.
Notwithstanding the foregoing, the Committee may provide in writing
in connection with, or in contemplation of, any such transaction
for any or all of the following alternatives (separately or in
combinations): (i) for the assumption by the successor corporation
of the Awards theretofore granted or the substitution by such
corporation for such Awards of awards covering the stock of the
successor corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and
prices; (ii) for the continuance of this Plan by such successor
corporation in which event this Plan and the Awards shall continue
in the manner and under the terms so provided; or (iii) for the
payment in cash or shares of Common Stock in lieu of and in
complete satisfaction of such Awards.
(c) In adjusting Awards to reflect the changes described
in this Section 6.2, or in determining that no such adjustment is
necessary, the Committee may rely upon the advice of independent
counsel and accountants of the Company, and the determination of
the Committee shall be conclusive. No fractional shares of stock
shall be issued under this Plan on account of any such adjustment.
6.3 Termination of Employment.
(a) If the Participant's service to or employment by the
Company terminates for any reason other than Retirement, death or
Total Disability, the Participant shall have, subject to earlier
termination pursuant to or as contemplated by Section 2.3, three
months or such shorter period as is provided in the Award
Agreements from the date of termination of services or employment
to exercise any Option to the extent it shall have become
exercisable on the date of termination of employment, and any
Option not exercisable on that date shall terminate.
Notwithstanding the preceding sentence, in the event the
Participant is discharged for cause as determined by the Committee
in its sole discretion, all Options shall lapse immediately upon
such termination of services or employment.
(b) If the Participant's service to or employment by the
Company terminates as a result of Retirement or Total Disability,
the Participant or Participant's Personal Representative, as the
case may be, shall have, subject to earlier termination pursuant to
or as contemplated by Section 2.3, 12 months (or, in the case of
Incentive Stock Options where the Participant terminates as a
result of Retirement, three months) or such shorter period as is
provided in the Award Agreements from the date of termination of
services or employment to exercise any Option to the extent it
shall have become exercisable by the date of termination of
services or employment and any Option not exercisable on that date
shall terminate.
(c) If the Participant's service to or employment by the
Company terminates as a result of death while the Participant is
rendering services to the Company or is employed by the Company or
during the 12 month period (or, in the case of Incentive Stock
Options where the Participant has terminated as a result of
Retirement, three month period) referred to in subsection (b)
above, the Participant's Option shall be exercisable by the
Participant's Beneficiary, subject to earlier termination pursuant
to or as contemplated by Section 2.3, during the 12 month period or
such shorter period as is provided in the Award Agreements
following the Participant's death, as to all or any part of the
shares of Common Stock covered thereby to the extent exercisable on
the date of death (or earlier termination).
(d) Each Stock Appreciation Right granted concurrently with
an Option shall have the same termination provisions and
exercisability periods as the Option to which it relates. The
termination provisions and exercisability periods of any Stock
Appreciation Right granted independently of an Option shall be
established in accordance with Section 3.2(d). The exercisability
period of a Stock Appreciation Right shall not exceed that provided
in Section 2.3 or in the related Award Agreement and the Stock
Appreciation Right shall expire at the end of such exercisability
period.
(e) In the event of termination of services to or
employment with the Company for any reason, (i) shares of Common
Stock subject to the Participant's Restricted Stock Award shall be
forfeited in accordance with the provisions of the related Award
Agreement to the extent such shares have not become vested on that
date; and (ii) shares of Common Stock subject to the Participant's
Performance Share Award or Performance-Based Award shall be
forfeited in accordance with the provisions of the related Award
Agreement to the extent such shares have not been issued or become
issuable on that date.
(f) In the event of termination of services to or
employment with the Company for any reason, other than discharge
for cause, the Committee may, in its discretion, increase the
portion of the Participant's Award available to the Participant, or
Participant's Beneficiary or Personal Representative, as the case
may be, upon such terms as the Committee shall determine.
(g) If an entity ceases to be a Subsidiary, such action
shall be deemed for purposes of this Section 6.3 to be a
termination of services or employment of each consultant or
employee of that entity who does not continue as a consultant or as
an employee of another entity within the Company.
(h) Upon forfeiture of a Restricted Stock Award pursuant
to this Section 6.3, the Participant, or his or her Beneficiary or
Personal Representative, as the case may be, shall transfer to the
Company the portion of the Restricted Stock Award not vested at the
date of termination of services or employment, without payment of
any consideration by the Company for such transfer unless the
Participant paid a purchase price in which case repayment, if any,
of that price shall be governed by the Award Agreement.
Notwithstanding any such transfer to the Company, or failure,
refusal or neglect to transfer, by the Participant, or his or her
Beneficiary or Personal Representative, as the case may be, such
nonvested portion of any Restricted Stock Award shall be deemed
transferred automatically to the Company on the date of termination
of services or employment. The Participant's original acceptance
of the Restricted Stock Award shall constitute his or her
appointment of the Company and each of its authorized
representatives as attorney(s)-in-fact to effect such transfer and
to execute such documents as the Company or such representatives
deem necessary or advisable in connection with such transfer.
6.4 Acceleration of Awards.
Unless prior to an Event the Board determines that, upon its
occurrence, there shall be no acceleration of Awards or determines
those Awards which shall be accelerated and the extent to which
they shall be accelerated, upon the occurrence of an Event (i) each
Option and each related Stock Appreciation Right shall become
immediately exercisable to the full extent theretofore not
exercisable, (ii) Restricted Stock shall immediately vest free of
restrictions and (iii) the number of shares covered by each
Performance Share Award or Performance-Based Award shall be issued
to the Participant; subject, however, to compliance with applicable
regulatory requirements, including without limitation and Section
422 of the Code. For purposes of this section only, the Board
shall mean the Board as constituted immediately prior to the Event.
6.5 Government Regulations.
This Plan, the granting of Awards under this Plan and the
issuance or transfer of shares of Common Stock (and/or the payment
of money) pursuant thereto are subject to all applicable federal
and state laws, rules and regulations and to such approvals by any
regulatory or governmental agency (including without limitation "no
action" positions of the Commission) which may, in the opinion of
counsel for the Company, be necessary or advisable in connection
therewith. Without limiting the generality of the foregoing, no
Awards may be granted under this Plan, and no shares shall be
issued by the Company, nor cash payments made by the Company,
pursuant to or in connection with any such Award, unless and
until, in each such case, all legal requirements applicable to the
issuance or payment have, in the opinion of counsel to the Company,
been complied with. In connection with any stock issuance or
transfer, the person acquiring the shares shall, if requested by
the Company, give assurances satisfactory to counsel to the Company
in respect of such matters as the Company may deem desirable to
assure compliance with all applicable legal requirements.
6.6 Tax Withholding.
(a) Upon the disposition by a Participant or other person
of shares of Common Stock acquired pursuant to the exercise of an
Incentive Stock Option prior to satisfaction of the holding period
requirements of Section 422 of the Code, or upon the exercise of a
Nonqualified Stock Option, the exercise of a Stock Appreciation
Right, the vesting of a Restricted Stock Award or the payment of a
Performance Share Award or Performance-Based Award, the Company
shall have the right to (i) require such Participant or such other
person to pay by cash or check payable to the Company, the amount
of any taxes which the Company may be required to withhold with
respect to such transactions or (ii) deduct from amounts paid in
cash the amount of any taxes which the Company may be required to
withhold with respect to such cash amounts. The above
notwithstanding, in any case where a tax is required to be withheld
in connection with the issuance or transfer of shares of Common
Stock under this Plan, the Participant may elect, pursuant to such
rules as the Committee may establish, to have the Company reduce
the number of such shares issued or transferred by the appropriate
number of shares to accomplish such withholding; provided, the
Committee may impose such conditions on the payment of any
withholding obligation as may be required to satisfy applicable
regulatory requirements.
(b) The Committee may, in its discretion, permit a loan
from the Company to a Participant in the amount of any taxes which
the Company may be required to withhold with respect to shares of
Common Stock received pursuant to a transaction described in
subsection (a) above. Such a loan will be for a term, at a rate of
interest and pursuant to such other terms and rules as the
Committee may establish.
6.7 Amendment, Termination and Suspension.
(a) The Board may, at any time, terminate or, from time to
time, amend, modify or suspend this Plan (or any part hereof). In
addition, the Committee may, from time to time, amend or modify any
provision of this Plan except Section 6.4 and, with the consent of
the Participant, make such modifications of the terms and
conditions of such Participant's Award as it shall deem advisable.
The Committee, with the consent of the Participant, may also amend
the terms of any Option to provide that the Option price of the
shares remaining subject to the original Award shall be
reestablished at a price not less than 100% of the Fair Market
Value of the Common Stock on the effective date of the amendment.
No modification of any other term or provision of any Option which
is amended in accordance with the foregoing shall be required,
although the Committee may, in its discretion, make such further
modifications of any such Option as are not inconsistent with or
prohibited by this Plan. No Awards may be granted during any
suspension of this Plan or after its termination.
(b) Any amendment that would materially (i) increase the
benefits accruing to Participants, (ii) increase the aggregate
number of shares which may be issued under this Plan, or
(iii) modify the requirements of eligibility for participation in
this Plan, shall be subject to shareholder approval only to the
extent then required by Section 422 of the Code or any successor
provisions, rules or statutes thereto, by a majority of the
shareholders.
(c) In the case of Awards issued before the effective date
of any amendment, suspension or termination of this Plan, such
amendment, suspension or termination of the Plan shall not, without
specific action of the Board or the Committee and the consent of
the Participant, in any way modify, amend, alter or impair any
rights or obligations under any Award previously granted under the
Plan.
6.8 Privileges of Stock Ownership; Nondistributive Intent.
A Participant shall not be entitled to the privilege of
stock ownership as to any shares of Common Stock not actually
issued to him or her. Upon the issuance and transfer of shares to
the Participant, unless a registration statement is in effect under
the Securities Act and applicable state securities law, relating to
such issued and transferred Common Stock and there is available for
delivery a prospectus meeting the requirements of Section 10 of the
Securities Act, the Common Stock may be issued and transferred to
the Participant only if he or she represents and warrants in
writing to the Company that the shares are being acquired for
investment and not with a view to the resale or distribution
thereof. No shares shall be issued and transferred unless and
until there shall have been full compliance with any then
applicable regulatory requirements (including those of exchanges
upon which any Common Stock of the Company may be listed).
6.9 Effective Date of the Plan.
This Plan shall be effective upon its approval by the Board,
subject to approval by the shareholders of the Company within
twelve months from the date of such Board approval.
6.10 Term of the Plan.
Unless previously terminated by the Board, this Plan shall
terminate at the close of business on November 17, 2002, and no
Awards shall be granted under it thereafter, but such termination
shall not affect any Award theretofore granted.
6.11 Governing Law.
This Plan and the documents evidencing Awards and all other
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.
6.12 Plan Construction.
(a) Rule 16b-3. It is the intent of the Company that
transactions in and affecting Awards in the case of Participants
who are or may be subject to Section 16 of the Exchange Act satisfy
any then applicable requirements of Rule 16b-3 so that such persons
(unless they otherwise agree) will be entitled to the benefits of
Rule 16b-3 or other exemptive rules under Section 16 of the
Exchange Act in respect of those transactions and will not be
subjected to avoidable liability thereunder. In furtherance of
such intent and the Company's intent to satisfy any applicable
state securities laws, the Awards granted under all of the
provisions of the Plan, in the discretion of the Committee, may be
deemed granted under a separate plan if so required,
notwithstanding the designation of this document as a single plan
for convenience of reference and to establish certain provisions
and limitations applicable to all authorized Awards. If any
provision of the Plan or of any Award would frustrate or otherwise
conflict with the intent 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 Company and is consistent with the purposes of the Plan as
to such persons in the circumstances.
(b) Section 162(m). It is the further intent of the
Company that Options or Stock Appreciation Rights with an exercise
or base price not less than Fair Market Value on the date of grant
and Performance-Based Awards under Section 5.2 of this Plan that
are granted to or held by a Section 16 Person shall qualify as
performance-based compensation under Section 162(m) of the Code,
and this Plan shall be interpreted consistent with such intent.
VII. DEFINITIONS.
7.1 Definitions.
(a) "Award" means an Option, which may be designated as a
Nonqualified Stock Option or an Incentive Stock Option, a Stock
Appreciation Right, a Restricted Stock Award, Performance Share
Award or Performance-Based Award, in each case granted under this
Plan.
(b) "Award Agreement" means a written agreement setting
forth the terms of an Award.
(c) "Award Date" means the date upon which the Committee
took the action granting an Award or such later date as is
prescribed by the Committee or, in the case of Options granted
under Section 2.6, the date specified in such Section 2.6.
(d) "Beneficiary" means the person, persons, trust or
trusts entitled by will or the laws of descent and distribution to
receive the benefits specified under this Plan in the event of a
Participant's death, and shall mean the Participant's executor or
administrator if no other Beneficiary is designated and able to act
under the circumstances.
(e) "Board" means the Board of Directors of the Company.
(f) "Cash Flow" shall mean cash and cash equivalents
derived from either (i) net cash flow from operations or (ii) net
cash flow from operations, financings and investing activities, as
determined by the Committee at the time an Incentive is granted.
(g) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(h) "Commission" means the Securities and Exchange
Commission.
(i) "Committee" means the Board or a committee appointed
by the Board to administer this Plan, which committee shall be
comprised only of two or more directors or such greater number of
directors as may be required under applicable law, each of whom (i)
in respect of any transaction at a time when the affected
Participant may be subject to Section 162(m) of the Code, shall be
an "outside director" within the meaning of Section 162(m) of the
Code and (ii) in respect of any transaction at a time when the
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(b)(3) under the Exchange Act.
(j) "Common Stock" means the Common Stock of the Company.
(k) "Company" means Pacific Sunwear of California, Inc.,
a California corporation, and its successors.
(l) "Eligible Employee" means an officer or key employee
of the Company and consultants to the Company whether or not such
consultants are employees.
(m) "EPS" shall mean earnings per common share on a fully
diluted basis determined by dividing (i) net earnings, less
dividends on preferred stock of the Company and its Subsidiaries by
(ii) the weighted average number of common shares and common shares
equivalents outstanding.
(n) "Event" means any of the following:
(1) Approval by the shareholders of the Company of the
dissolution or liquidation of the Company;
(2) Approval by the shareholders of the Company 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 Company; or
(3) Approval by the shareholders of the Company of the
sale of substantially all of the Company's business assets to a
person or entity which is not a Subsidiary.
(o) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(p) "Fair Market Value" means (i) if the stock is listed
or admitted to trade on a national securities exchange, the closing
price of the stock on the Composite Tape, as published in the
Western Edition of The Wall Street Journal, of the principal
national securities exchange on which the stock is so listed or
admitted to trade, on such date, or, if there is no trading of the
stock on such date, then the closing price of the stock as quoted
on such Composite Tape on the next preceding date on which there
was trading in such shares; (ii) if the stock is not listed or
admitted to trade on a national securities exchange, the last price
for the stock on such date, as furnished by the National
Association of Securities Dealers, Inc. ("NASD") through the NASDAQ
National Market Reporting System or a similar organization if the
NASD is no longer reporting such information; (iii) if the stock is
not listed or admitted to trade on a national securities exchange
and is not reported on the National Market Reporting System, the
mean between the bid and asked price for the stock on such date, as
furnished by the NASD; or (iv) if the stock is not listed or
admitted to trade on a national securities exchange, is not
reported on the National Market Reporting System and if bid and
asked prices for the stock are not furnished by the NASD or a
similar organization, the values established by the Committee for
purposes of the Plan.
(q) "Incentive Stock Option" means an option which is
designated as an incentive stock option within the meaning of
Section 422 of the Code, the award of which contains such
provisions as are necessary to comply with that section.
(r) "Non-Employee Director" means a member of the Board who
is not an officer or employee of the Company.
(s) "Non-Employee Director Participant" means a Non-
Employee Director who has been granted an Option under Section 2.6.
(t) "Nonqualified Stock Option" means an option which is
designated as a Nonqualified Stock Option and shall include any
Option intended as an Incentive Stock Option that fails to meet the
applicable legal requirements thereof.
(u) "Option" means an option to purchase Common Stock under
this Plan. An Option shall be designated by the Committee as a
Nonqualified Stock Option or an Incentive Stock Option.
(v) "Participant" means an Eligible Employee who has been
granted an Award.
(w) "Performance Goal" shall mean EPS or ROE or Cash Flow
or Total Stockholder Return, and "Performance Goals" means any
combination thereof.
(x) "Performance-Based Awards" shall mean an Award of a
right to receive shares of Common Stock or other compensation
(including cash) under Section 5.2, the issuance or payment of
which is contingent upon, among other conditions, the attainment of
performance objectives specified by the Committee.
(y) "Performance Share Award" means an award of shares of
cash or Common Stock under Section 5.1, the issuance of which is
contingent upon attainment of performance objectives specified by
the Committee.
(z) "Personal Representative" means the person or persons
who, upon the disability or incompetence of a Participant, shall
have acquired on behalf of the Participant by legal proceeding or
otherwise the power to exercise the rights and receive the benefits
specified in this Plan.
(aa) "Plan" means the Pacific Sunwear of California,
Inc. 1992 Stock Award Plan, as amended.
(ab) "QDRO" shall mean an order requiring the transfer
of an Award or portion thereof pursuant to a state domestic
relations law to the spouse, former spouse, child or other
dependent of a Participant. Such order must be in a form
substantially identical to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended.
(ac) "Restricted Stock" means those shares of Common
Stock issued pursuant to a Restricted Stock Award which are subject
to the restrictions set forth in the related Award Agreement.
(ad) "Restricted Stock Award" means an award of a fixed
number of shares of Common Stock to the Participant subject,
however, to payment of such consideration, if any, and such
forfeiture provisions, as are set forth in the Award Agreement.
(ae) "Retirement" means retirement from employment by or
providing services to the Company or any Subsidiary after age 65
and, in the case of employees, in accordance with the retirement
policies of the Company then in effect.
(af) "ROE" shall mean consolidated net income of the
Company and its Subsidiaries (less preferred dividends), divided by
the average consolidated common shareholders equity.
(ag) "Securities Act" means the Securities Act of
1933, as amended.
(ah) "Stock Appreciation Right" means a right to
receive a number of shares of Common Stock or an amount of cash, or
a combination of shares and cash, determined as provided in Section
3.3(a).
(ai) "Subsidiary" means any corporation or other entity
a majority or more of whose outstanding voting stock or voting
power is beneficially owned directly or indirectly by the Company.
(aj) "Total Disability" means a "permanent and total
disability" within the meaning of Section 22(e)(3) of the Code and,
in the case of Awards other than Incentive Stock Options, such
other disabilities, infirmities, afflictions or conditions as the
Committee by rule may include.
(ak) "Total Stockholder Return" shall mean with respect
to the Company or its Subsidiaries or other entities (if measured
on a relative basis), the (i) change in the market price of its
common stock (as quoted in the principal market on which it is
traded as of the beginning and ending of the period) plus dividends
and other distributions paid, divided by (ii) the beginning quoted
market price, all of which is adjusted for any changes in equity
structure, including but not limited to stock splits and stock
dividends.
[O'Melveny & Myers LLP Letterhead]
August
29th
1 9 9 7
Pacific Sunwear of California, Inc.
5037 East Hunter Avenue
Anaheim, California 92807
Re: Registration Statement on Form S-8
Ladies & Gentlemen:
We are rendering this opinion to you in connection with
a Registration Statement on Form S-8 (the "Registration Statement")
covering the registration with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, of 200,000
shares (the "Shares") of Common Stock, $0.01 par value, of Pacific
Sunwear of California, Inc., a California corporation (the
"Company"), issuable upon the exercise of awards granted or to be
granted under the Company's Fifth Amended and Restated 1992 Stock
Award Plan (the "Plan"). We are familiar with the proceedings
heretofore taken by you in connection with the authorization and
issuance of the Shares.
In connection with this opinion, we have examined such
documents and have reviewed such matters of fact and questions of
law as we have considered necessary for purposes hereof. On the
basis of such examination and review and, subject to proceedings
being duly taken and completed by you as now contemplated by us as
your counsel prior to the issuance of the Shares, we are of the
opinion that the Shares to be issued under the Plan will, when
issued and sold in accordance with the terms of the Plan, be duly
authorized, validly issued, fully paid and non-assessable shares of
Common Stock of the Company.
We hereby consent to the use of this opinion as an
exhibit to the Registration Statement.
Respectfully submitted,
/s/ O'MELVENY & MYERS LLP
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Pacific Sunwear of California, Inc. pertaining to the
Pacific Sunwear of California, Inc. Fifth Amended and Restated
1992 Stock Award Plan on Form S-8 of our report dated March 11,
1997, appearing in the Annual Report on Form 10-K of Pacific
Sunwear of California, Inc. for the year ended February 2, 1997.
Costa Mesa, California
August 25, 1997
