As filed with the Securities and Exchange Commission on October 15, 1998
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.)
5200 East La Palma Avenue
Anaheim, California 92807
(714) 693-8066
(Address and telephone number of principal executive offices)
___________________
Pacific Sunwear of California, Inc.
Amended and Restated 1992 Stock Award Plan
(Full title of the plan)
___________________
Greg H. Weaver, Chief Executive Officer
Pacific Sunwear of California, Inc.
5200 East La Palma 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
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per unit price fee
Common Stock 600,000(1) $22.22(2) $13,332,000(2) $3,933(2)
$.01 par shares
value
(1) This Registration Statement covers, in addition
to the number of shares of Common Stock stated above, options and
other rights to purchase or acquire the shares of Common Stock
covered by the Prospectus and, pursuant to Rule 416(c) under the
Securities Act of 1933, as amended (the "Securities Act"), an
indeterminate number of shares which by reason of certain events
specified in the Pacific Sunwear of California, Inc. Amended and
Restated 1992 Stock Option Plan (the "Plan") may become subject to
the Plan.
(2) Pursuant to Rule 457(h), the maximum offering
price, per share and in the aggregate, and the registration fee
were calculated based upon the average of the high and low prices
of the Common Stock on October 9, 1998, as reported on the Nasdaq
National Market System and published in the Western Edition of The
Wall Street Journal.
The Exhibit Index for this Registration Statement is at page 6.
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in
Part I of Form S-8 (plan information and registrant information)
will be sent or given to employees as specified by
Rule 428(b)(1) of the Securities Act. Such documents need not
be filed with the Securities and Exchange Commission (the
"Commission") either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424
of the Securities Act. These documents, which include the
statement of availability required by Item 2 of Form S-8, and
the documents incorporated by reference in this Registration
Statement pursuant to Item 3 of Form S-8 (Part II hereof), taken
together, constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents of Pacific Sunwear of
California, Inc. (the "Company") filed with the Commission are
incorporated herein by reference:
(a) The Company's Registration Statements on Forms S-8 relating
to the Plan (File Nos. 33-65412, 33-88114, 33-97512, and
333-34677) filed with the Commission on July 2,
1993, December 30, 1994, September 28, 1995, and August 29,
1996, respectively.
Item 8. Exhibits
See the attached Exhibit Index on page 6.
SIGNATURES
Pursuant to the requirements of the Securities Act,
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 October 12, 1998.
By: /s/ Greg H. Weaver
Greg H. Weaver,
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes
and appoints Greg H. Weaver and Carl W. Womack, or either of
them individually, his or her true and lawful attorney-in-fact
and agent, with full powers of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and
to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or either of them individually, or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act,
this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Greg H. Weaver Chairman of the Board October 12, 1998
Greg H. Weaver and Chief Executive
Officer (Principal
Executive Officer)
/s/ Carl W. Womack Senior Vice President October 12, 1998
Car. W. Womack Chief Financial Officer and
Secretary (Principal
Financial and Accounting Officer)
Director
Pearson Cummin III
/s/ Peter L. Harris Director October 12, 1998
Peter L. Harris
/s/ Julius Jensen III Director October 12, 1998
Julius Jensen III
/s/ Richard Lyons Director October 12, 1998
Richard Lyons
Director
Sally Frame Kasaks
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
4. Pacific Sunwear of California, Inc. Amended and
Restated 1992 Stock Award Plan (Composite Plan
Document Reflecting May 1998 Amendment to the
Plan and June 8, 1998 Stock Split).
5. Opinion of O'Melveny & Myers LLP (opinion re
legality).
23.1 Consent of Deloitte & Touche LLP (consent of
independent auditors).
23.2 Consent of Counsel (included in Exhibit 5).
24. Power of Attorney (included in this
Registration Statement under "Signatures").
PACIFIC SUNWEAR OF CALIFORNIA, INC.
AMENDED AND RESTATED 1992 STOCK AWARD PLAN
(Composite Plan Document Reflecting May 1998 Amendment
to the Plan and June 8, 1998 Stock Split)
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 2
1.6 Exercise of Awards 3
1.7 No Transferability; Limited Exception to
Transfer Restrictions 3
II. OPTIONS 4
2.1 Grants 4
2.2 Option Price 4
2.3 Option Period 5
2.4 Exercise of Options 5
2.5 Limitations on Grant of Incentive Stock
Options 5
2.6 Non-Employee Director Awards 6
III. STOCK APPRECIATION RIGHTS 7
3.1 Grants 7
3.2 Exercise of Stock Appreciation Rights 7
3.3 Payment 8
IV. RESTRICTED STOCK AWARDS 9
4.1 Grants 9
4.2 Restrictions 9
V. PERFORMANCE SHARE AWARDS 9
5.1 Grants 9
5.2 Special Performance-Based Share Awards 10
VI. OTHER PROVISIONS 11
6.1 Rights of Eligible Employees, Participants
and Beneficiaries 11
6.2 Adjustments Upon Changes in Capitalization 11
6.3 Termination of Employment 12
6.4 Acceleration of Awards 14
6.5 Government Regulations 14
6.6 Tax Withholding 15
6.7 Amendment, Termination and Suspension 15
6.8 Privileges of Stock Ownership;
Nondistributive Intent 16
6.9 Effective Date of the Plan 16
6.10 Term of the Plan 16
6.11 Governing Law 16
6.12 Plan Construction 17
VII. DEFINITIONS 17
7.1 Definitions 17
<PAGE>
PACIFIC SUNWEAR OF CALIFORNIA, INC.
AMENDED AND RESTATED 1992 STOCK AWARD PLAN
(Composite Plan Document Reflecting May 1998 Amendment
to the Plan and June 8, 1998 Stock Split)
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 Awards1 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 granted under this
Plan shall not exceed 3,448,576 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 2,250,000 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 923,062 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 13,500 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 13,500 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 615,375 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; provided that any such amendment shall be
subject to approval by the shareholders of the Company. 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:
(i) Approval by the shareholders of the Company of the
dissolution or liquidation of the Company;
(ii) 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
(iii) 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.
(bb) "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.
(cc) "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.
(dd) "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.
(ee) "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.
(ff) "ROE" shall mean consolidated net income of the Company
and its Subsidiaries (less preferred dividends), divided by
the average consolidated common shareholders equity.
(gg) "Securities Act" means the Securities Act of 1933, as
amended.
(hh) "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).
(ii) "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.
(jj) "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.
(kk) "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]
October 13, 1998
Pacific Sunwear of California, Inc.
5200 East La Palma Avenue
Anaheim, California 92807
Re: Registration on Form S-8 of Pacific
Sunwear of California, Inc. (the
"Company")
Ladies and Gentlemen:
At your request, we have examined the Registration Statement
on Form S-8 to be filed with the Securities and Exchange
Commission in connection with the registration under the
Securities Act of 1933, as amended, of 600,000 shares of Common
Stock, $0.01 par value per share, of the Company (the "Common
Stock"), to be issued pursuant to the Pacific Sunwear of
California, Inc. Amended and Restated 1992 Stock Award Plan (the
"Plan"). We have examined the proceedings heretofore taken and
to be taken in connection with the authorization of the Plan and
the Common Stock to be issued pursuant to and in accordance with
the Plan.
Based upon such examination and upon such matters of fact
and law as we have deemed relevant, we are of the opinion that
the Common Stock has been duly authorized by all necessary
corporate action on the part of the Company and, when issued in
accordance with such authorization, the provisions of the Plan
and relevant agreements duly authorized by and in accordance with
the terms of the Plan, will be validly issued, fully paid and
nonassessable.
We 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. on Form S-8, pertaining to the Pacific
Sunwear of California, Inc. Amended and Restated 1992 Stock Award Plan, of our
report dated March 12, 1998, appearing in the Annual Report on Form 10-K for
Pacific Sunwear of California, Inc. for the year ended February 1, 1998.
/s/ Deloitte & Touche LLP
Costa Mesa, California
October 12, 1998
