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EXHIBIT 10.13
RESTRICTED STOCK
AWARD AGREEMENT
THIS RESTRICTED STOCK AWARD AGREEMENT (this "Agreement") is dated as of the
18th day of September, 1996, by and between PACIFIC SUNWEAR OF CALIFORNIA, INC.,
a California corporation (the "Corporation"), and Xxxx X. Xxxxxx (the
"Participant").
W I T N E S S E T H
WHEREAS, pursuant to the Corporation's 1992 Stock Award Plan (the "Plan"),
the Corporation has granted to the Participant, effective as of September 18,
1996 (the "Award Date"), a restricted stock award (the "Award") upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties hereto agree
as follows:
1. GRANT OF AWARD. (a) The Corporation has granted to the Participant an
Award with respect to an aggregate of 37,500 shares of Restricted Stock (in the
event that the shares have not been issued on or before October 9, 1996, the
date of the Corporation's three-for-two stock split, then the number of shares
to be issued and covered hereby shall be 56,250 and no further adjustment for
such split shall be made), at the price of $.01 per share (the "Price").
Notwithstanding any other provision of this Agreement, the 37,500 shares of
Restricted Stock awarded to Participant by this Agreement are subject to
obtaining the approval by the requisite vote of shareholders at the 1997 Annual
Meeting of the grant and the terms thereof as required under Section 162(m) of
the Internal Revenue Code to make the compensation expense associated with the
Restricted Stock performance compensation. In the event that shareholder
approval is not obtained, the shares of Restricted Stock shall be surrendered to
the Corporation at the Price per share paid by the Participant and this
Agreement shall thereafter be of no force and effect. Capitalized terms used
herein without definition shall have the meanings given to them in the Plan.
(b) The Corporation shall issue a certificate or certificates for the
shares of Restricted Stock subject to the Award, registered in the name of the
Participant, which certificate(s) shall be held by the Corporation until the
restrictions on such shares shall have lapsed and the shares shall thereby have
become vested. The Award shall vest as to 9,375 shares of Common Stock on each
of March 31, 1999, 2000, 2001 and 2002 if, at the time of the vesting date, the
Minimum Rate of Growth in EPS (as defined) has been met on the vesting date.
Minimum Rate of Growth in EPS means that EPS has increased at a rate of 15% or
more per year over the vesting period prior to the scheduled vesting date where
EPS for the year ended January 31, 1997 is the base year (the "Base Year"). For
example, if EPS for the Base Year is $1.00, then it is a condition to vesting of
(i) the first installment of Restricted Stock that EPS for fiscal 1999 equal or
exceed $1.32, (ii) the second installment of Restricted Stock that EPS for
fiscal 2000 equal or exceed $1.51, (iii) the third installment of Restricted
Stock that EPS for
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fiscal 2001 equal or exceed $1.73 and (iv) the fourth installment of Restricted
Stock that EPS for fiscal 2002 equal or exceed $1.98. In the event that audited
financial statements are not available as of a vesting date, then the
determination of satisfaction or non-satisfaction of the Minimum Rate of Growth
in EPS shall be delayed until such audited financial statements become
available. In the event that the Minimum Rate of Growth in EPS is not satisfied
as of a scheduled vesting date, the shares otherwise scheduled to vest on such
date shall not vest but shall remain available for vesting in the event that the
Minimum Rate of Growth in EPS for a later scheduled vesting date is achieved, in
which event the shares previously scheduled to vest as of an earlier date shall
vest. The parties hereto agree that the Minimum Rate of Growth in EPS is based
on the current operations of the Corporation and that in the event of an
acquisition by the Corporation of any business (whether by purchase of assets,
stock or merger), the Minimum Rate of Growth in EPS shall, if possible, be
calculated without regard to the acquisition and, if not possible, the parties
hereto shall negotiate appropriate adjustments to the Maximum Rate of Growth in
EPS.
(c) The Participant shall execute a stock power or stock powers, in blank,
with respect to such certificate(s) and shall deliver the same to the
Corporation. The Participant, by acceptance of the Award, hereby appoints the
Corporation and each of its authorized representatives as the Participant's
attorney(s)-in-fact to effect any transfer of such shares to the Corporation as
may be required pursuant to the Plan or this Agreement and to execute such
documents as the Corporation or such representatives deem necessary or advisable
in connection with any such transfer.
2. RESTRICTED STOCK.(a) Prior to the Vesting Date(s), the shares of
Restricted Stock subject to the Award may not be sold, assigned, transferred,
pledged or otherwise disposed of or encumbered, either voluntarily or
involuntarily.
(b) The Participant shall be entitled to dividend and voting rights with
respect to the shares of Restricted Stock subject to the Award even though such
shares are not vested, provided that such rights shall terminate immediately as
to any Restricted Stock which is forfeited. Any shares receivable by the
Participant pursuant to Section 4.1 of the Plan with respect to the Restricted
Stock will be subject to the restrictions set forth in this Agreement to the
same extent as the shares of Restricted Stock to which such shares relate.
3. LAPSE OF RESTRICTIONS. The shares of Restricted Stock shall vest on the
Vesting Date(s) specified in Section 1(b) hereof, provided that the other
restrictions, if any, set forth in this Agreement with respect to such shares
shall have lapsed on or before the Vesting Date. Promptly after the Vesting
Date, a certificate or certificates evidencing the number of shares of Common
Stock as to which the restrictions have lapsed or such lesser number as may be
permitted pursuant to Section 11 hereof shall be delivered to the Participant.
The Participant shall deliver to the Corporation any written statements required
pursuant to Section 8 hereof.
4. EFFECT OF TERMINATION OF RELATIONSHIP. (a) Upon the date the Participant
is no longer employed by the Company, by reason of death, voluntary resignation,
permanent disability or termination for cause (as those terms are defined in
that certain Employment Agreement dated October 1, 1996 between Participant and
the Corporation (the
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"Employment Agreement")), the Participant's shares of Restricted Stock shall be
forfeited to the extent such shares have not become vested on that date.
(b) Upon forfeiture of shares of Restricted Stock pursuant to (a) above,
the Participant, or the Participant's Beneficiary or Personal Representative, as
the case may be, shall transfer to the Corporation the portion of the Award not
vested at the date of termination of employment, without payment of any
consideration by the Company for such transfer other than an amount equal to the
Price per share of Restricted Stock forfeited. Notwithstanding any such transfer
to the Corporation, or failure, refusal or neglect to transfer, by the
Participant, or the Participant's Beneficiary or Personal Representative, as the
case may be, such nonvested portion of the Award shall be deemed transferred
automatically to the Corporation on the date of termination of employment.
5. NON-ASSIGNABILITY OF AWARD. As set forth in Section 6.1(c) of the Plan,
amounts payable pursuant to the Award shall be paid only to the Participant or
the Participant's Beneficiary or Personal Representative, as the case may be.
Amounts payable under and interests in the Award shall not subject to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge other than by will or the laws of descent and distribution regardless of
any community property or other interest therein of the Participant's spouse or
such spouse's successor in interest. In the event that the spouse of the
Participant shall have acquired a community property interest in the Option, the
Participant, or such transferees, may exercise it on behalf of the spouse of the
Participant or such spouse's successor in interest. Amounts payable under and
interests in the Award shall not, in any manner, be liable for, or subject to,
debts, contracts, liabilities, engagements or torts of the Participant or the
Participant's Beneficiary or Personal Representative.
6. ADJUSTMENTS UPON SPECIFIED CHANGES. As set forth in Section 6.2 of the
Plan, upon the occurrence of specified events relating to the Corporation's
stock, adjustments will be made in the number and kind of shares that may be
issuable under or in the consideration payable with respect to the Award.
7. ACCELERATION. Notwithstanding any other provisions of the Plan or this
Agreement and subject to any applicable restriction imposed by the Securities
Exchange Act of 1934 and the rules thereunder, any Awards hereunder that are not
then vested shall become immediately vested (i) upon the date Participant is no
longer employed by the Company by reason of termination or non-renewal of
Participant's employment by Company without cause (as defined in Section 3(e) of
the Employment Agreement) or (ii) immediately prior to the effective date of (a)
the dissolution or liquidation of the Corporation, (b) the merger or
consolidation or other reorganization of the Corporation with or into one or
more entities other than a subsidiary, 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 shareholders of the Corporation immediately prior to such event
or (c) the sale of substantially all of the Corporation's business assets to a
person or entity which is not a subsidiary. Notwithstanding any other provisions
of the Plan or this Agreement and subject to any applicable restriction imposed
by the Securities Exchange Act of 1934 and the rules thereunder, any Awards
hereunder that are not then vested shall also become immediately vested if (i)
any person or entity or group or affiliated persons or
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entities, including a group which is deemed a "person" by Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), excluding
existing shareholders of the Corporation as of September 18, 1996, first
acquires in one or more transactions ownership of 50% or more of the outstanding
shares of the Common Stock of this Corporation or (ii) during any period of two
consecutive years individuals who at the beginning of such period constitute the
Board of Directors of the Corporation cease for any reason to constitute at
least a majority thereof unless, at the time of election of each new director
during such two year period, such election was approved by the vote of a
majority or more of the remaining directors (excluding Employee) who were also
directors at the beginning of the period; provided, however, that if only two
directors at the time of such vote were directors at the beginning of the
period, then the election of each new director need be approved by the vote of
only one of such two directors. Upon the occurrence of events specified in this
Section 7 where acceleration of the vesting of Awards is not permissible under
the applicable Securities and Exchange Commission rules, any such outstanding
Awards will terminate and any Restricted Stock will be forfeited and the
Corporation shall thereupon pay to the Participant an amount equal to the Price
per share of Restricted Stock forfeited. "Ownership" means beneficial or record
ownership, directly or indirectly, other than (i) by a person owning such shares
merely of record (such as a member of a securities exchange, a nominee or a
securities depositary system), (ii) by a person as a bona fide pledgee of shares
prior to a default and determination to exercise powers as an owner of the
shares, (iii) by a person who is not required to file statements on Schedule 13D
by virtue of Rule 13d-1(b) of the Securities and Exchange Commission under the
Exchange Act, or (iv) by a person who owns or holds shares as an underwriter
acquired in connection with an underwritten offering pending and for purposes of
their public resale or planned private placement or by persons who were
shareholders of the Corporation on or before March 15, 1993 or their respective
successors. Without limitation, the right to acquire ownership shall not of
itself constitute ownership of shares.
8. APPLICATION OF SECURITIES LAWS. (a) No shares of Common Stock may be
issued pursuant to the Award or subsequently offered for sale unless and until
any then applicable requirements of the Securities and Exchange Commission (the
"Commission"), the California Commissioner of Corporations or any other
regulatory agency having jurisdiction and any exchanges upon which the Common
Stock may be listed shall have been fully complied with. Upon the Corporation's
request, the Participant, or any other person entitled to such shares of Common
Stock pursuant to the Award, shall provide written assurance of such compliance
satisfactory to the Corporation.
(b) The Committee may impose such conditions on an Award or on its
acceleration or on the payment of any withholding obligation as may be required
to satisfy applicable regulatory requirements, including, without limitation,
Rule 16b-3 (or any successor rule) promulgated by the Commission pursuant to the
Securities Exchange Act of 1934, as amended.
9. NOTICES. Any notice to be given to the Corporation under the terms of
this Agreement or pursuant to the Plan shall be in writing and addressed to the
Secretary of the Corporation at its principal office and any notice to be given
to the Participant shall be addressed to him or her at the address given beneath
the Participant's signature hereto, or at such other address as either party may
hereafter designate in writing to the other party. Any such notice
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shall be deemed to have been duly given when enclosed in a properly sealed
envelope addressed as aforesaid, registered or certified, and deposited (postage
and registry or certification fee prepaid) in a post office or branch post
office regularly maintained by the United States Government.
10. EFFECT OF AGREEMENT. This Agreement shall inure to the benefit of any
successor or successors of the Corporation. Notwithstanding the foregoing, this
Agreement shall not be assumed by or be binding upon any successor or successors
of the Corporation unless, in accordance with Section 6.1 of the Plan, provision
for assumption of the Award is made in connection with (i) any dissolution or
liquidation, (ii) upon a reorganization, merger or consolidation of the
Corporation with one or more corporations as a result of which the Corporation
is not the surviving corporation, or (iii) upon a sale of substantially all the
property of the Corporation.
11. TAX WITHHOLDING. At the time that the shares of Restricted Stock vest
or are treated as vesting under an election pursuant to Section 83(b) of the
Internal Revenue Code, the Participant may be given the opportunity to elect to
pay such amounts to the Corporation in cash or in Common Stock, in accordance
with procedures established by the Committee, as may be necessary to meet any
withholding requirements imposed by federal, state, local, or foreign tax law
with respect thereto. If such a withholding election is not permitted or not
made, the Corporation may reduce the number of shares delivered at the time of
vesting, but only in the event that a Section 83(b) election has not been made,
by such number of shares as the Corporation may deem appropriate to meet such
withholding requirements.
12. PLAN. The Award and all rights of the Participant thereunder are
subject to, and the Participant agrees to be bound by, all of the terms and
conditions of the provisions of the Plan, incorporated herein by this reference,
to the extent such provisions are applicable to Awards granted to Participants.
In the event of a conflict or inconsistency between the terms and conditions of
this Agreement and of the Plan, except as otherwise stated herein, the terms and
conditions of the Plan shall govern. The Participant acknowledges receipt of a
copy of the Plan, which is made a part hereof by this reference, and agrees to
be bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the Plan that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in the Participant unless such rights are expressly set forth herein or are
otherwise in the sole discretion of the Committee so conferred by appropriate
action of the Committee under the Plan after the date hereof.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Participant has
hereunto set his or her hand as of the date and year first above written.
PACIFIC SUNWEAR OF CALIFORNIA,
INC., A CALIFORNIA CORPORATION
By: __________________________
Title: _______________________
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PARTICIPANT
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(Signature)
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(Print Name)
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(Address)
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(City, State, Zip Code)
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(Social Security Number)
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CONSENT OF SPOUSE
In consideration of the execution of the foregoing Restricted Stock Award
Agreement by the Corporation, I, _________________, the spouse of the
Participant herein named, do hereby join with my spouse in executing the
foregoing Restricted Stock Award Agreement and do hereby agree to be bound by
all of the terms and provisions thereof and of the Plan.
DATED: ____________, 19__. _____________________________
Signature of Spouse
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