EXHIBIT 10.2
PACIFIC SUNWEAR OF CALIFORNIA, INC.
1999 STOCK AWARD PLAN
[YEAR] PERFORMANCE-BASED BONUS AWARD AGREEMENT
THIS [YEAR] PERFORMANCE-BASED BONUS AWARD AGREEMENT (this "Agreement") is
entered into by and between PACIFIC SUNWEAR OF CALIFORNIA, INC., a California
corporation (the "Company"), and [Executive Name] (the "Participant") as of this
___ day of _______, _____.
W I T N E S S E T H
WHEREAS, the Company has adopted the Pacific Sunwear of California, Inc.
1999 Stock Award Plan, as amended and restated March 27, 2003 (the "Plan"); and
WHEREAS, the Company's Compensation Committee (the "Committee") has
determined that the Participant is eligible to be granted a Performance-Based
Award pursuant to Section 5.2 of the Plan and has granted the Participant a
Performance-Based Award upon the terms and conditions set forth herein and in
the Plan (the "Award"); and
WHEREAS, the Award has been granted to the Participant in addition to, and
not in lieu of, any other form of compensation otherwise payable or to be paid
to the Participant;
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. CAPITALIZED TERMS. Capitalized terms used herein and not otherwise defined
herein shall have the meaning assigned to such terms in the Plan.
2. GRANT OF AWARD. This Agreement evidences the Company's grant to the
Participant, subject to the terms and conditions hereof and of the Plan,
of an Award with respect to the Company's ______ fiscal year (the
"Performance Period"). The bonus payable in respect of the Award will be
calculated under Appendix A hereto if the Performance Target set forth
therein (minimum EPS of the Company for the Performance Period) is
achieved. The bonus payable in respect of the Award will increase, as set
forth in Appendix A hereto, for certain levels of EPS of the Company for
the Performance Period in excess of the minimum EPS of the Company for
that period. No bonus will be payable if such minimum EPS of the Company
is not achieved for the Performance Period. For purposes of determining
the Participant's bonus in accordance with Appendix A, the Participant's
"Target Bonus" is $_________. The maximum amount that will be paid
pursuant to the Award shall not exceed the limitation contained in Section
5.2(c) of the Plan.
3. FORFEITURE OF AWARD; EARLY TERMINATION; ADJUSTMENT. Should the
Participant's employment by the Company terminate for any reason prior to
the last day of the Performance Period, the Bonus payable in respect of
the Award shall equal: (1) the amount that would otherwise have been paid
in respect of the Award had the Participant remained an employee of the
Company throughout the Performance Period, multiplied by
(2) a fraction of the numerator of which is the total number of days in
the Performance Period that the Participant was as employee of the Company
and the denominator of which is 365. Such amount shall otherwise be paid
at the same time and on the same terms and conditions as though the
Participant's employment by the Company had not terminated.
4. CONTINUANCE OF EMPLOYMENT. Notwithstanding any commitment of the
Participant to remain in the service or employ of the Company (or any
affiliate), the Award shall not confer upon the Participant any right ---
with respect to the continuation of his or her service or employment by
the Company (or any affiliate) or alter or interfere in any way with the
right of the Company (or any affiliate) at any time to terminate such
service or employment or to change the compensation of the Participant or
other terms of his or her service or employment; and neither shall these
terms alter or in any way affect the rights of the Company (or any
affiliate) or the Participant under any other written employment agreement
between them, except as expressly provided herein.
5. TIMING AND MANNER OF PAYMENT. Subject to any changes imposed by or allowed
under the provisions of the Plan, benefits with respect to the Award shall
be calculated pursuant to Section 2 and Appendix A. The Committee shall
determine, in accordance with such provisions and after the end of the
Performance Period, the specific amount to the paid to the Participant
with respect to this Award. No payment shall be made with respect to the
Award unless and until the Committee has certified, by resolution or other
appropriate action in writing, that the amount thereof has been accurately
determined in accordance with the terms, conditions and limits of the
Award and that the applicable Performance Target was, in fact, satisfied.
Any amount payable with respect to the Award shall be paid in cash as soon
as practicable following such certification by the Committee. No interest
or other earnings shall be paid on or accrue with respect to such amount
for the period between the end of the Performance Period and the date of
actual payment.
6. ADJUSTMENTS. To preserve the intended incentives and benefits of the
Award, the Committee shall (i) adjust the Performance Targets applicable
to the Award to reflect any material change in corporate capitalization,
any material corporate transaction (such as a reorganization, combination,
separation, merger, acquisition, or any combination of the foregoing), or
any complete or partial liquidation of the Company, (ii) calculate
Performance Targets without regard for any change in accounting policies
or practices affecting the Company and/or the Business Criteria or the
Performance Targets, and (iii) adjust Business Criteria and Performance
Targets or other features of an Award to reflect the effects of any
special charges to the Company's earnings; in each case only to the extent
consistent with the requirements of Section 162(m) of the Code to qualify
the Award as "qualified performance-based compensation" thereunder.
7. TAX WITHHOLDING. The Company shall reduce any amount otherwise payable
with respect to the Award by the amount of any federal, state and/or local
income and/or employment tax withholding that may be required with respect
to such payment.
8. DISSOLUTION OF THE COMPANY, CERTAIN MERGERS. In the event of the
dissolution of the Company or a merger, reorganization or other event in
which the Company ceases to be a publicly-traded company in respect of its
Common Stock, the Committee may terminate the Performance Period as of or
immediately prior to such event and pro-rate the Target Bonus and
Performance Targets by multiplying each relevant amount by a fraction, the
numerator of which is the number of days in the shortened Performance
Period and the denominator of which is 365.
9. DEATH OF THE PARTICIPANT. If the Participant dies prior to receiving any
payment due with respect to the Award (other than an amount deferred under
a Company deferred compensation program, the payment of which shall be
governed by the terms of such program), such payment shall be made to his
designated beneficiary. A Participant's designated beneficiary shall be
the beneficiary designated by the Participant, in a manner determined by
the Committee to receive amounts due the Participant in the event of his
death. In the absence of an effective designation, a Participant's
designated beneficiary shall be deemed to be his or her spouse, or, if he
or she has no spouse at the time of his or her death, his or her estate.
10. AWARD NON-TRANSFERABLE. Except as expressly provided in Section 9 above,
the Award is non-transferable. No benefit payable with respect to the
Award shall be subject in any manner to anticipation, alienation, sale,
transfer, pledge, assignment, encumbrance or charge, and any such
attempted action shall be void and no such benefit shall be in any manner
liable for or subject to debts, contracts, liabilities, engagements or
torts of the Participant. This Agreement shall, however, be binding upon
any successor to all or substantially all of the business and/or assets of
the Company.
11. GOVERNING LAW. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of California,
without regard to the conflict of laws principles thereof.
12. AMENDMENT. This Agreement may only be amended in writing by an instrument
signed by both parties. Adjustments pursuant to Section 6 shall not,
however, be considered amendments requiring Participant consent.
13. CONSTRUCTION. It is the intent of the Company that the Award satisfy and
be interpreted in a manner that satisfies the applicable requirements
under Section 162(m) of the Code to qualify the Award as "qualified
performance-based compensation" thereunder. Any provision, application or
interpretation of the Plan inconsistent with this intent to satisfy the
standards in Section 162(m) of the Code shall be disregarded.
14. GENERAL TERMS. The Award and any payment in respect thereof are subject
to, and the Company and the Participant agree to be bound by, the
provisions of the Plan. The provisions of the Plan are incorporated herein
by this reference. Provisions of the Plan that grant discretionary
authority to the Committee or the Board shall not create any rights in the
Participant, unless such rights are expressly set forth herein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first written above.
PARTICIPANT PACIFIC SUNWEAR OF
CALIFORNIA, INC.
a California Corporation
______________________________ By: ________________________________
[Executive Name]
Name: ______________________________
______________________________ Title: _____________________________
[YEAR] AWARD AGREEMENT
APPENDIX A
NAME OF PARTICIPANT: [EXECUTIVE NAME]
Percentage of Target
Bonus Which Will be
Paid If Specified Level
of the Performance
Performance Target is Satisfied
Business Criteria* Target Level in the Performance Period**
----------------- ------------ ---------------------------
Company "EPS" (as such
term is defined in the Plan)
No portion of the Target Bonus shall be paid if the Company's EPS for the
Performance Period is less than the Performance Target of $____.
* EPS of the Company will be determined on a consolidated basis.
**Amounts are not cumulative.