Exhibit 10.4
PACIFIC SUNWEAR OF CALIFORNIA, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective December 31, 2008)
(This Version of the Plan Applies to Deferred Compensation Amounts that are
Subject to Section 409A
of the Code)

 

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PACIFIC SUNWEAR OF CALIFORNIA, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective December 31, 2008)1
     WHEREAS, Pacific Sunwear of California, Inc. (the “Corporation”) maintains
the Pacific Sunwear of California, Inc. Executive Deferred Compensation Plan
(the “Plan”) to provide supplemental retirement income benefits for a select
group of management and highly compensated employees through deferrals of salary
and bonuses and through the Corporation’s contributions;
     WHEREAS, the Plan was established effective as of March 1, 1995; and
     WHEREAS, it is believed that the amendment and restatement of the Plan is
advisable and in the best interests of the Corporation in order to establish
documentary compliance, and to permit ongoing operational compliance, with
respect to Section 409A of the Code for amounts arising from deferrals of
compensation earned or determined after December 31, 2004, and to amounts that
vested after December 31, 2004;
     RESOLVED, that the Plan be, and it hereby is, amended and restated in its
entirety effective as of the 31st day of December, 2008, as follows:
 

1   This version of the Plan applies to amounts arising from deferrals of
compensation earned or determined after December 31, 2004, and to amounts that
vested after December 31, 2004. This version of the Plan is intended to comply
with Section 409A of the Code.

 

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ARTICLE I
TITLE AND DEFINITIONS
1.1 — Title.
     The Plan shall be known as the Pacific Sunwear of California, Inc.
Executive Deferred Compensation Plan.
1.2 — Definitions.
     Whenever the following words and phrases are used in the Plan, with the
first letter capitalized, they shall have the meanings specified below.
     “Account” or “Accounts” shall mean a Participant’s Deferral Account and/or
Company Contribution Account.
     “Beneficiary” or “Beneficiaries” shall mean the person or persons,
including a trustee, personal representative or other fiduciary, last designated
in writing by a Participant in accordance with procedures established by the
Committee to receive the benefits specified hereunder in the event of the
Participant’s death. No beneficiary designation shall become effective until it
is filed with the Committee. If there is no Beneficiary designation in effect,
or if there is no surviving designated Beneficiary, then the Participant’s
surviving spouse shall be the Beneficiary. If there is no surviving spouse to
receive any benefits payable in accordance with the preceding sentence, the duly
appointed and currently acting personal representative of the participant’s
estate (which shall include either the Participant’s probate estate or living
trust) shall be the Beneficiary. In any case where there is no such personal
representative of the Participant’s estate duly appointed and acting in that
capacity within 90 days after the Participant’s death (or such extended period
as the Committee determines is reasonably necessary to allow such

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personal representative to be appointed, but not to exceed the earlier of
(i) 180 days after the Participant’s death and (ii) the latest date payment may
be made on account of the Participant’s death in accordance with Treasury
Regulation Section 1.409A-3(d)), then Beneficiary shall mean the person or
persons who can verify by affidavit or court order to the satisfaction of the
Committee that they are legally entitled to receive the benefits specified
hereunder. In the event any amount is payable under the Plan to a minor, payment
shall not be made to the minor, but instead be paid (a) to that person’s living
parent(s) to act as custodian, (b) if that person’s parents are then divorced,
and one parent is the sole custodial parent, to such custodial parent, or (c) if
no parent of that person is then living, to a custodian selected by the
Committee to hold the funds for the minor under the Uniform Transfers or Gifts
to Minors Act in effect in the jurisdiction in which the minor resides. If no
parent is living and the Committee decides not to select another custodian to
hold the funds for the minor, then payment shall be made to the duly appointed
and currently acting guardian of the estate for the minor or, if no guardian of
the estate for the minor is duly appointed and currently acting within 60 days
after the date the amount becomes payable, payment shall be deposited with the
court having jurisdiction over the estate of the minor.
     “Board of Directors” or “Board” shall mean the Board of Directors of the
Corporation.
     “Bonus” shall mean any cash incentive compensation earned by a Participant
from the Company in addition to the Participant’s Salary.
     “Change of Control” shall mean:
     (i) Approval by the shareholders of the Corporation of the dissolution or
liquidation of the Corporation;

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     (ii) Approval by the shareholders of the Corporation 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 Corporation; or
     (iii) Approval by the shareholders of the Corporation of the sale of
substantially all of the Corporation’s business assets to a person or entity
which is not a Subsidiary.
     “Code” shall mean the Internal Revenue Code of 1986, as amended.
     “Committee” shall mean the Committee appointed by the Board to administer
the Plan in accordance with Article IX.
     “Company” shall mean the Corporation and each corporation which is a member
of a controlled group of corporations (within the meaning of Section 414(b) of
the Code) of which the Corporation is a component member.
     “Company Contribution Account” shall mean the bookkeeping account
maintained by the Committee for each Participant that is credited with an amount
equal to the Company Contribution Amount, if any, and earnings or losses
pursuant to Section 4.2.
     “Company Contribution Amount” shall equal the amount described in
Section 4.2.
     “Compensation” shall mean the Salary and Bonus that the Participant is
entitled to for services rendered to the Company.
     “Corporation” shall mean Pacific Sunwear of California, Inc. and any
successor corporation.

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     “Deferral Account” shall mean the bookkeeping account maintained by the
Committee for each Participant that is credited with amounts equal to (1) the
portion of the Participant’s Salary that he or she elects to defer, (2) the
portion of the Participant’s Bonus that he or she elects to defer, and
(3) investment gains and losses pursuant to Section 4.1.
     “Disabled” or “Disability” means a physical or mental state that would
qualify a Participant for disability benefits under the Corporation’s Long Term
Disability Plan, because of medically determinable bodily injury, mental
impairment or disease sustained after the date of such person’s designation as a
Participant, as determined by the Committee. The Committee may rely on the
conclusions reached by any insurance carrier that has issued an insurance policy
to the Company covering the Participant or any physician chosen by or otherwise
acceptable to the Committee.
     “Early Retirement Age” shall mean age 50 with 10 years of service as
determined for purposes of the Employee Savings Plan.
     “Effective Date” shall mean March 1, 1995.
     “Eligible Employee” shall mean officers and other highly compensated
employees of the Company at the Vice President level or higher who are selected
by the Committee to participate in the Plan.
     “Employee Savings Plan” shall mean the Pacific Sunwear of California, Inc.
Employee Savings Plan.
     “Fund” or “Funds” shall mean one or more of the investments selected by the
Committee pursuant to Section 3.2.

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     “In-Service Election” shall mean any election a Participant makes pursuant
to Section 6.1(a).
     “Investment Return” shall mean, for each Fund, an amount equal to the net
investment performance of such Fund for the applicable period, as determined by
the Committee.
     “Normal Retirement Age” shall mean age 55.
     “Participant” shall mean any Eligible Employee who elects to defer
Compensation in accordance with Section 3.1.
     “Payment Eligibility Date” shall mean the date a Participant has a
Separation from Service.
     “Plan” shall mean the Pacific Sunwear of California, Inc. Executive
Deferred Compensation Plan set forth herein, as amended from time to time.
     “Plan Year” shall mean the 12 consecutive month period beginning on January
1.
     “Retirement” shall mean a Participant’s Separation from Service upon or
following the Participant’s attainment of Early Retirement Age or Normal
Retirement Age.
     “Qualifying Change in Control” shall mean a Change of Control that is also
a “change in the ownership or effective control” of the Company, or a change “in
the ownership of a substantial portion of the assets” of the Company within the
meaning of Section 409A of the Code.
     “Salary” or “Salaries” shall mean the Participant’s base salary earned as
an employee of the Company.
     “Separation from Service” shall mean, as to a particular Participant, a
termination of services provided by the Participant to the Company, whether
voluntarily or involuntarily, due to Retirement,

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while totally Disabled or otherwise, as determined by the Committee in
accordance with Section 409A of the Code and Treasury
Regulation Section 1.409A-1(h). In determining whether a Participant has
experienced a Separation from Service, the following provisions shall apply:
     (i) For a Participant who provides services to the Company as an employee,
except as otherwise provided in clause (iii) below, a Separation from Service
shall occur when the Participant has experienced a termination of employment
with the Company. A Participant shall be considered to have experienced a
termination of employment for this purpose when the facts and circumstances
indicate that the Participant and the Company reasonably anticipate that either
(A) no further services will be performed by the Participant for the Company
after the applicable date, or (B) that the level of bona fide services the
Participant will perform for the Company after such date (whether as an employee
or as an independent contractor) will permanently decrease to no more than 20%
of the average level of bona fide services performed by the Participant (whether
as an employee or an independent contractor) over the immediately preceding
36-month period (or the full period of services to the Company if the
Participant has been providing services to the Company less than 36 months).
However, if the Participant is on military leave, sick leave, or other bona fide
leave of absence, the employment relationship between the Participant and the
Company shall be treated as continuing intact, provided that the period of such
leave does not exceed 6 months, or if longer, so long as the Participant retains
a right to reemployment with the Company under an applicable statute or by
contract. If the period of a military leave, sick leave, or other bona fide
leave of absence exceeds 6 months and the Participant does not retain a right to
reemployment under an applicable statute or by contract, the employment
relationship shall be considered to be terminated for purposes of the Plan as of
the first day immediately following the end of such 6-month period. In applying
the provisions of this paragraph, a leave of absence shall be considered a bona
fide

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leave of absence only if there is a reasonable expectation that the Participant
will return to perform services for the Company.
     (ii) For a Participant who provides services to the Company as an
independent contractor, except as otherwise provided in clause (iii) below, a
Separation from Service shall occur upon the expiration of the contract (or in
the case of more than one contract, all contracts) under which services are
performed for the Company, provided that the expiration of such contract(s) is
determined by the Committee to constitute a good-faith and complete termination
of the contractual relationship between the Participant and the Company.
     (iii) For a Participant who provides services to the Company as both an
employee and an independent contractor, a Separation from Service generally
shall not occur until the Participant has ceased providing services for the
Company as both an employee and as an independent contractor, as determined in
accordance with the provisions set forth in clauses (i) and (ii) above.
Similarly, if a Participant either (A) ceases providing services for the Company
as an independent contractor and begins providing services for the Company as an
employee, or (ii) ceases providing services for the Company as an employee and
begins providing services for the Company as an independent contractor, the
Participant will not be considered to have experienced a Separation from Service
until the Participant has ceased providing services for the Company in both
capacities, as determined in accordance with clauses (i) and (ii) above.
     Notwithstanding the foregoing provisions in this definition, if a
Participant provides services for the Company as both an employee and as a
member of the Board, to the extent permitted by Treasury
Regulation Section 1.409A-1(h)(5) the services provided by the Participant as a
director shall not be taken into account in determining whether the Participant
has experienced a Separation from Service as an

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employee, and the services provided by such Participant as an employee shall not
be taken into account in determining whether the Participant has experienced a
Separation from Service as a director, for purposes of the Plan.
     “Specified Employee” shall mean a Participant who, as of the date of the
Participant’s Separation from Service, is a “specified employee” within the
meaning of Treasury Regulation Section 1.409A-1(i).
     “Subsidiary” shall mean 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 Corporation.
     “Unforeseeable Emergency” shall mean a severe financial hardship to the
Participant resulting from an illness or accident of the Participant, the
Participant’s Beneficiary, or the Participant’s spouse or dependent (as defined
in Code Section 152, without regard to Sections 152(b)(1), (b)(2) and
(d)(1)(B)); loss of the Participant’s property due to casualty (including the
need to rebuild a home following damage to a home not otherwise covered by
insurance, for example, not as a result of a natural disaster); or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the Participant’s control.

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ARTICLE II
PARTICIPATION
2.1 — Participation.
     An Eligible Employee shall become a Participant in the Plan by electing to
defer a portion of his or her Compensation in accordance with Section 3.1.

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ARTICLE III
DEFERRAL ELECTIONS
3.1 — Elections to Defer Compensation.
     (a) Election Period. An Eligible Employee may elect to defer Compensation
for a particular Plan Year, by filing an election, on a form provided by the
Committee, on or before the December 31 immediately preceding that Plan Year (or
such earlier deadline that the Committee may establish and announce with respect
to any year). Such election will be effective for Salary earned during the pay
period beginning on or after the following January 1 and the Bonus paid with
respect to services performed in the Plan Year beginning on the following
January 1. Notwithstanding the foregoing, an employee who first becomes an
Eligible Employee during a Plan Year and was not previously eligible to
participate in this Plan, or in any plan required to be aggregated with this
Plan under Treasury Regulation Section 1.409A-1(c)(2)(i), may elect to defer
Compensation for such Plan Year by filing an initial election, on a form
provided by the Committee, on or before the thirtieth day after the date the
employee becomes an Eligible Employee. Such initial election will be effective
for Salary earned in such Plan Year after the date of the initial election, and
for the Bonus paid with respect to services performed in such Plan Year after
the date of the initial election (which portion of the Bonus shall be no greater
than the total Bonus paid with respect to services performed in such Plan Year
multiplied by the ratio of the number of days remaining in such Plan Year after
the initial election over the total number of days in such Plan Year). Any such
initial election filed by a new Eligible Employee shall be irrevocable once
made.
     (b) General Rule. The amount of Compensation which an Eligible Employee may
elect to defer is as follows:
          (1) Any percentage or dollar amount of Salary up to 50%; and/or
          (2) Any percentage or dollar amount of Bonus up to 100%.

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     (c) Changes to Deferral Election. A deferral election made by an Eligible
Employee with respect to a particular Plan Year shall become irrevocable on the
deadline for the making of the related election (and, except for initial
elections described in Section 3.1(a) above, in no case later than December 31
immediately preceding the year with respect to which the deferral election is
made). A deferral election shall be valid only as to Compensation for the Plan
Year with respect to which the deferral election is made. An Eligible Employee
must make a new deferral election with respect to each Plan Year for which he or
she elects to make deferrals under this Plan.
3.2 — Investment Elections.
     The Committee shall select, from time to time, one or more mutual funds,
indices, or contracts as the Funds for determining the amount of earnings (or
losses) to be credited to the Participant’s Account. The Committee shall notify
Participants of the Funds available from time to time. The Committee may, at any
time without notice, change the number, types and/or particular Funds available;
provided that the number and types of Funds offered shall not be materially
diminished following a Change of Control.
     In making the designation pursuant to this Section 3.2, the Participant may
specify (on a form and in a manner approved by the Committee) that all or any
whole percentage of his Account be deemed to be invested in one or more of the
Funds. Effective as of the end of any calendar month (or more frequently as may
be approved by the Committee), a Participant may change (on a form and in a
manner approved by the Committee) the designation made under this Section 3.2 by
filing an election, on a form provided by the Committee, prior to the applicable
deadline established by the Committee. If a Participant fails to elect a Fund
under this Section 3.2, he or she shall be deemed to have elected the Money
Market Fund (or

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such other Fund as may be selected by the Committee as the “default” Fund and
announced to Participants).
     Although the Participant may designate a Fund or Funds for the deemed
investment of his Account, neither the Committee nor the Company will have any
obligation to actually invest the amounts deferred under the Plan in any
particular investment. In the event that the Company invests any funds in any
commercial investment, fund or contract used as a Fund under the Plan, title to
and beneficial ownership of such invested funds shall at all times remain that
of the Company and no Participant, Beneficiary or any other person shall have
any interest whatsoever in such invested funds. Unless otherwise provided by the
Committee, a Participant shall not be permitted to make separate Fund elections
for his Deferral Account and for his Company Contribution Account.
3.3 — Alternative Election Methods.
     Notwithstanding anything else contained herein to the contrary, the
Committee may require or permit Participant elections and/or consents under this
Plan to be made by means of such electronic media as the Committee may
prescribe. Reasonable efforts will be used to process electronic media consents
and elections made under this Plan. Notwithstanding the preceding sentence or
anything else in this Plan to the contrary, neither the Company, the Committee,
nor any other person guarantees that any consent or election will be so
processed and such persons have no obligation to ensure that the ability to make
elections is available at any particular time (for example, and without
limitation, electronic media may not be available to Participants from time to
time due to factors beyond such persons’ control). The Committee may adopt new
or alternative rules for electronic media consents and elections as it deems
appropriate in its sole and complete discretion (including, without limitation,
eliminating any electronic media system and re-implementing a requirement of
written forms, establishing the effective date and the

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notice date for any type of consent or election and limiting the number of any
particular elections that may be made by a Participant during any specified
period). In order to be effective, each consent and/or election must be made on
such other rules as the Committee may prescribe.

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ARTICLE IV
ACCOUNTS
4.1 — Deferral Account.
     The Committee shall establish and maintain a Deferral Account for each
Participant under the Plan, which may be divided into separate subaccounts based
on the Plan Year to which the deferral of Compensation relates. Each
Participant’s Deferral Account shall be further divided into separate
subaccounts (“mutual fund subaccounts”), each of which corresponds to a mutual
fund or contract elected by the Participant pursuant to Section 3.2. A
Participant’s Deferral Account shall be credited as follows:
     (a) As of the first day of each month, the Committee shall credit the
mutual fund subaccounts of the Participant’s Deferral Account with an amount
equal to Salary deferred by the Participant during each pay period ending in
that month in accordance with the Participant’s election under Section 3.2; that
is, the portion of the Participant’s deferred Salary that the Participant has
elected to be deemed to be invested in a certain type of mutual fund shall be
credited to the mutual fund subaccount corresponding to that mutual fund;
     (b) As of the first day of the month in which the Bonus or partial Bonus
would have been paid, the Committee shall credit the mutual fund subaccounts of
the Participant’s Deferral Account with an amount equal to the portion of the
Bonus deferred by the Participant’s election under Section 3.2; that is, the
portion of the Participant’s deferred Bonus that the Participant has elected to
be deemed to be invested in a particular type of mutual fund shall be credited
to the mutual fund subaccount corresponding to that mutual fund; and
     (c) As of the last day of each month, each mutual fund subaccount of a
Participant’s Deferral Account shall be credited with earnings and debited with
losses in an amount equal to that determined by

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multiplying the balance credited to such mutual fund subaccount as of the first
day of the month (for this purpose, the amounts credited pursuant to
Sections 4.1(a) and (b) and transfers between mutual fund subaccounts that
month, and the amounts debited pursuant to any distributions and/or transfers
between mutual fund subaccounts that month, shall be deemed credited or debited
as of the first day of the month) by the Investment Return for the corresponding
Fund selected by the Committee pursuant to Section 3.2
     (d) Notwithstanding anything to the contrary in this Section 4.1, if the
Committee permits Participants to change the Funds elected by Participants
pursuant to Section 3.2 more frequently than on a monthly basis, credits
pursuant to this Section 4.1 and pursuant to Section 4.2(b) shall also be
permitted to be made more frequently than effective as of the first or last day
of each month, in which case transfers between mutual fund subaccounts during
the month, amounts debited pursuant to any distributions and other debits and
credits shall also be permitted to be made more frequently than on a monthly
basis (and, for purposes of clarity and without limiting the generality of the
foregoing, credits and debits may be made as of the date the amount would have
otherwise been paid, is distributed from the Plan, or the date on which a
transfer occurs, as applicable).
4.2 — Company Contribution Account.
     The Committee shall establish and maintain a Company Contribution Account
for each Participant under the Plan, which may be divided into separate
subaccounts based on the Plan Year to which the Company Contribution Amount
relates. Each Participant’s Company Contribution Account shall be further
divided into separate mutual fund subaccounts corresponding to the mutual fund
or contract elected by the Participant pursuant to Section 3.2. Beginning on and
after January 1, 2006, a Participant’s Company Contribution Account shall be
credited as follows:

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     (a) As of the first day of each Plan Year, the Committee shall credit the
mutual fund subaccounts of the Participant’s Company Contribution Account with
an amount equal to the Company Contribution Amount, if any, applicable to that
Participant; that is, the portion of the Company Contribution Amount, if any,
which the Participant elected to be deemed to be invested in a certain type of
mutual fund shall be credited to the corresponding mutual fund subaccount.
Unless otherwise determined by the Committee, a Participant’s Company
Contribution Amount for any Plan Year shall be equal to 50% of the Salary
deferred by the Participant for the immediately preceding Plan Year, up to 10%
of the Participant’s Salary for the immediately preceding Plan Year (with Salary
being determined before giving effect to any Salary deferrals under the Plan or
the Employee Savings Plan, such that the maximum Company Contribution Amount is
equal to 5% of the Participant’s Salary); provided that no additional credits
shall be made pursuant to this paragraph (a) with respect to deferrals in 2009
or any subsequent Plan Year; and
     (b) As of the last day of each month, each mutual fund subaccount of a
Participant’s Company Contribution Account shall be credited with earnings or
losses in an amount equal to that determined by multiplying the balance credited
to such mutual fund subaccount as of the first day of the month (for this
purpose, the amounts credited pursuant to Section 4.2(a), transfers between
mutual fund subaccounts that month, forfeitures and any distributions that
month, shall be deemed credited or debited as of the first day of the month) by
the Investment Return for the corresponding Fund selected by the Committee
pursuant to Section 3.2.
     (c) For the avoidance of doubt, any portion of a Participant’s Company
Contribution Account that is forfeited before becoming vested pursuant to
Article V shall not be re-allocated to the Account of any other Participant(s),
but instead shall be forfeited and the Company shall have no further obligation
to the Participant (or any other Participant or person) with respect thereto.

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     (d) From time-to-time in its sole discretion, the Board may provide that
additional Company Contribution Amounts be credited to some or all Participants,
according to the terms and conditions determined by the Board.

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ARTICLE V
VESTING
5.1 — Deferral Account.
     A Participant’s Deferral Account shall be 100% vested at all times.
5.2 — Company Contribution Account.
     (a) The portion of each Participant’s Company Contribution Account
attributable to the Company Contribution Amount allocated to the Participant for
any Plan Year shall become nonforfeitable at the rate of 25% for each year of
vesting service completed by the Participant. The year of vesting service begins
on January 1 of the year for which the Company Contribution Amount was made, and
a year of vesting service is completed only if the Participant remains an
employee of the Company through December 31 of a year. The Company Contribution
Accounts attributable to each years’ Company Contribution Amount shall vest
separately according to the four-year schedule. The Committee shall determine
the extent to which the Investment Return is attributable to the Company
Contribution Amount allocated for any Plan Year.
     (b) When a Participant’s employment terminates (other than a termination of
employment due to a Disability or death, or upon or following the Participant’s
attainment of Early Retirement Age or Normal Retirement Age), the portion of his
or her Company Contribution Account which is not vested shall immediately be
forever forfeited, and the Company shall have no obligation to the Participant
(or Beneficiary) with respect to such forfeited amount.

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     (c) A Participant shall become fully vested in the amounts credited to his
or her Company Contribution Account: if (i) his or her employment terminates due
to his or her Disability or death, (ii) his or her employment terminates upon or
following the Participant’s attainment of Early Retirement Age or Normal
Retirement Age, or (iii) a Change of Control occurs.

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ARTICLE VI
DISTRIBUTIONS
6.1 — Distribution of Deferred Compensation.
     (a) In-Service Distributions. As part of a deferral election timely made in
accordance with Article III or as part of a special election made prior to
December 31, 2008 in accordance with the transition rule under Section 409A of
the Code, a Participant may elect (on the form provided by the Committee to
defer Compensation under Section 3.1) to receive the deferred portion of Salary
earned and/or Bonus paid with respect to services performed in an applicable
Plan Year (including any earnings and losses debited or credited thereon) or a
specified portion thereof in a lump sum payable during a specified month of a
calendar year that is at least three calendar years following the Plan Year to
which the deferral of Compensation relates; provided that a Participant may not
elect to receive any portion of the Company Contribution Amount credited to a
Participant’s Company Contribution Account with respect to the services
performed in any Plan Year prior to the calendar year following the Plan Year in
which the portion of the Company Contribution Amount was ordinarily scheduled to
vest pursuant to Section 5.2(a). Payment shall be made pursuant to any such
In-Service Election if the applicable initial payment date elected occurs prior
to the date of the Participant’s Separation from Service or the date of a
Qualifying Change in Control.
     (b) Separation From Service for Reasons Other than Retirement. As part of a
deferral election timely made in accordance with Article III or as part of a
special election made prior to December 31, 2008 in accordance with the
transition rule under Section 409A of the Code, a Participant may elect (on the
form provided by the Committee to defer Compensation under Section 3.1) to
receive the deferred portion of Salary earned and/or Bonus paid with respect to
services performed in an applicable Plan Year (including any earnings and losses
debited or credited thereon) (i) in a lump sum payable in the month

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following the month in which the Participant’s Separation from Service for
reasons other than Retirement occurs or (ii) in three substantially equal annual
installments, with the first installment commencing in the calendar year
following the year in which the Participant’s Separation from Service for
reasons other than Retirement occurs and the remaining annual installments being
paid in the two calendar years thereafter. If the Participant does not make any
payment election, payment upon the Participant’s Separation from Service for
reasons other than Retirement shall automatically be made in a lump sum payable
in the month following the month in which the Participant’s Separation from
Service for reasons other than Retirement occurs. Payment shall be made pursuant
to this Section 6.1(b) if the Participant’s Separation from Service for reasons
other than Retirement occurs prior to any applicable initial payment date
elected pursuant to an In-Service Election or the date of a Qualifying Change in
Control. In the event of a Qualifying Change in Control occurring after the
Participant’s Separation from Service for reasons other than Retirement, any
remaining unpaid installments for the applicable Plan Year shall be accelerated
and paid in the month following the month in which the Qualifying Change in
Control occurs.
     (c) Separation from Service Due to Retirement. As part of a deferral
election timely made in accordance with Article III or as part of a special
election made prior to December 31, 2008 in accordance with the transition rule
under Section 409A of the Code, a Participant may elect (on the form provided by
the Committee to defer Compensation under Section 3.1) to receive the deferred
portion of Salary earned and/or Bonus paid with respect to services performed in
an applicable Plan Year (including any earnings and losses debited or credited
thereon) (i) in a lump sum payable in the month following the month in which the
Participant’s Retirement occurs or (ii) in two to fifteen substantially equal
annual installments, with the first installment commencing in the calendar year
following the year in which the Participant’s Retirement occurs and the
remaining annual installments being paid in subsequent calendar years
thereafter. If the Participant does not make any payment election, payment upon
the Participant’s

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Retirement shall automatically be made in a lump sum payable in the month
following the month in which the Participant’s Retirement occurs. Payment shall
be made pursuant to this Section 6.1(c) if the Participant’s Retirement occurs
prior to any applicable initial payment date elected pursuant to an In-Service
Election or the date of a Qualifying Change in Control. In the event of a
Qualifying Change in Control occurring after the Participant’s Retirement, any
remaining unpaid installments for the applicable Plan Year shall be accelerated
and paid in the month following the month in which the Qualifying Change in
Control occurs.
     (d) Qualifying Change in Control. If a Qualifying Change in Control occurs
prior to the Participant’s Separation from Service or any applicable initial
payment date elected pursuant to an In-Service Election, the deferred portion of
Salary earned and/or Bonus paid with respect to services performed in an
applicable Plan Year shall be paid in the month following the month in which the
Qualifying Change in Control occurs. Payment may also be made in connection with
a Qualifying Change in Control in the circumstances described in Sections 6.1(b)
and 6.1(c).
     (e) Company Contribution Account. The vested portion of the Company
Contribution Amount credited to a Participant’s Company Contribution Account
with respect to services performed in any Plan Year shall automatically be paid
in the same manner as the Salary deferral for such Plan Year.
     (f) Earnings Credits. The unpaid portion of a Participant’s Accounts shall
continue to be credited monthly (or more frequently) with earnings pursuant to
Article IV of the Plan until all amounts credited to his or her Accounts under
the Plan have been distributed. If installment payments are made under the Plan,
the Committee shall adjust the amount of the installments as it deems
appropriate to take into account investment gains or losses which occur during
the period of installment payments are made.

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Such adjustments shall be made so that the total payments to the Participant
equal the Participant’s Accounts, adjusted for investment gains and losses.
     (g) Changes to Deferral Elections. A Participant may elect to change a
deferral election (including an automatic election) after the period allowed for
the initial deferral election by submitting a new deferral election to the
Committee on the form provided by the Committee for such purpose, subject to the
following conditions: (1) the new deferral election shall not be effective
unless made at least twelve months before the applicable payment or commencement
date scheduled under any prior In-Service Election; (2) the new deferral
election must defer a lump sum payment or commencement of installment payments
for a period of at least five years from the date that the lump sum would have
been paid or installment payments would have commenced under the prior deferral
election and (3) the election shall not be effective until twelve months after
it is filed with the Committee. The payment schedules available under a new
deferral election are those specified in Sections 6.1(a), 6.1(b) and 6.1(c) (as
applicable), subject to the conditions specified in this paragraph.
6.2 — Inability to Locate Participant.
     In the event that the Committee is unable to locate a Participant or
Beneficiary within two years following the Participant’s Payment Eligibility
Date, the amount allocated to the Participant’s Deferral Account and Company
Contribution Account shall be forfeited. If, after such forfeiture, the
Participant or Beneficiary later claims such benefit, such benefit shall, in the
Committee’s discretion, be reinstated without interest or earnings and will be
payable on a schedule that complies with Section 409A of the Code, provided that
Section 6.2 shall still apply.

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6.3 — Payment by Trust.
     The Company may cause the payment of benefits under the Plan to be made in
whole or in part by the Trustee of the Pacific Sunwear of California, Inc. Trust
Agreement for Executive Deferred Compensation Plan (the “Trust”). The Committee
shall direct the Trustee to pay the Participant’s or Beneficiary’s benefit at
the time and in the amount described in Article VI or Article VII to the extent
of the amounts allocated to Participant. In the event the amounts allocated to
the Participant are not sufficient to provide the full amount of benefit payable
to the Participant, the Company shall pay for the remainder of such benefit at
the time set forth in the Plan.
6.4 — Hardship Distributions.
     A Participant may submit a hardship distribution request to the Committee
in writing setting forth the reasons for the request. The Committee will have
the sole authority to approve or deny such requests. Upon a finding that the
Participant has suffered an Unforeseeable Emergency, the Committee may in its
discretion, permit the Participant to cease any on-going deferrals and
accelerate distributions of benefits under the Plan in the amount reasonably
necessary to alleviate the Unforeseeable Emergency. The Company will pay any
accelerated distribution of benefits as soon as administratively practical after
approval by the Committee, and in any event no later than the month following
approval.
6.5 — Loans.
     There shall be no loans permitted under the Plan.

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6.6 — Disability.
     If a Participant becomes totally Disabled, such Participant’s eligibility
and participation in the Plan will continue uninterrupted. Upon a finding that
the Participant has suffered a Disability where any medically determinable
physical or mental impairment results in the Participant’s inability to perform
the duties of his or her position or any substantially similar position and
where such impairment can be expected to result in death or can be expected to
last for a continuous period of not less than six months, the Committee may in
its discretion, permit the Participant to cease any on-going deferrals. Any such
cessation of ongoing deferrals must occur by the later of the end of the
calendar year when such Disability occurs or the fifteenth day of the third
month following the occurrence of such Disability.

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6.7 Permissible Distributions.
     The Committee may, in its discretion, accelerate distributions of benefits
under the Plan to the extent necessary to fulfill a domestic relations order (as
defined in Section 414(p)(1)(B) of the Code), if the benefits are distributed to
an individual other than the Participant. In its discretion, and in accordance
with the requirements of Treasury Regulation Section 1.409A-3(j)(4)(vi), the
Committee may accelerate distributions of benefits under the Plan to pay FICA or
other employment taxes imposed on compensation deferred under the Plan. In
addition, the Committee may, in its discretion, accelerate distributions of
benefits under the Plan in accordance with the requirements of Treasury
Regulation Section 1.409A-3(j)(4)(vii) or (xi), as applicable, if benefits under
the Plan are subject to federal, state, local or foreign taxes prior to the
distribution of Plan benefits.
6.8 Liability for Payment.
     Each entity within the Company shall be solely liable for the payment of
deferred Compensation under the Plan (together with earnings) with respect to a
Participant to the extent that such deferred Compensation would have otherwise
been payable to the Participant by that entity.
6.9 — Six-Month Delay in Payment for Specified Employees.
     Notwithstanding anything herein to the contrary, in the event that a
Participant who is a Specified Employee is entitled to a distribution from the
Plan due to the Participant’s Separation from Service, the lump sum payment or
the commencement of installment payments, as the case may be, shall not occur
before the date that is the earlier of (1) six months following the
Participant’s Separation from Service for reasons other than death or (2) the
Participant’s death. Any payments delayed pursuant to this Section 6.9 (whether
they would have been paid in a single lump sum or installments in the absence of
such delay)

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shall be paid to the Participant in a lump sum within thirty days after the
expiration of the required delay period, and any remaining payments or
distributions due under the Plan shall be paid in accordance with the normal
payment schedule provided for in the Plan.

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ARTICLE VII
DEATH BENEFITS
7.1 — [Reserved]
7.2 — Death Before or After Termination of Employment.
     If a Participant dies at any time before or after termination of employment
and before his Account has been paid in full (either in a lump sum or
installment payments), his Beneficiary shall receive the balance of the
Participant’s Account as of the date of death in accordance with Section 7.3.
7.3 — Payment of Death Benefits.
     Notwithstanding anything to the contrary in Article VI, the death benefit
payable pursuant to Section 7.2 shall be paid in a lump sum in the month
following the month in which the Participant’s death occurs.

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ARTICLE VIII
ARBITRATION
8.1 — Arbitration.
     (a) A Participant or, following the Participant’s death, a Beneficiary
(collectively referred to in this section as “Claimant”) may, if he desires,
submit any claim for payment under the Plan or any dispute regarding the
interpretation of the Plan to arbitration. This right to select arbitration
shall be solely that of the Claimant, and the Claimant may decide whether or not
to arbitrate in his discretion. The “right to select arbitration” does not
impose on the Claimant a requirement to submit a dispute for arbitration. The
Claimant may, in lieu of arbitration, bring an action in appropriate civil
court. The Claimant retains the right to select arbitration, even if a civil
action (including, without limitation, an action for declaratory relief) is
brought by the Company or any other fiduciary of the Plan prior to the
commencement of arbitration. If arbitration is selected by the Claimant after a
civil action concerning the Claimant’s dispute has been brought by a person
other than the Claimant, the Company, the trustee of any grantor trust that
holds assets for the purpose of making benefit payments under the Plan
(“Trustee”), and the Claimant shall take such actions as are necessary or
appropriate, including dismissal of the civil action, so that the arbitration
can be timely heard. Once arbitration is commenced, it may not be discontinued
without the unanimous consent of all parties to the arbitration. During the
lifetime of the Participant only he can use the arbitration procedure set forth
in this section.
     (b) Any claim for arbitration may be submitted as follows: if the Claimant
disagrees with an interpretation of the Plan by the Company or any fiduciary of
the Plan, or disagrees with the calculation of his benefit under the Plan, such
claim may be filed in writing with an arbitrator of the Claimant’s choice who is
selected by the method described in the next four sentences. The first step of
the selection shall consist of the Claimant submitting in writing a list of five
potential arbitrators to the Company and to the

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Trustee. Each of the five arbitrators must be either (1) a member of the
National Academy of Arbitrators located in the state of the Claimant’s principal
residence or (2) a retired California Superior Court or Appellate Court judge.
Within one week after receipt of the list, the Trustee and the Company shall
jointly select one of the five arbitrators as the arbitrator of the dispute in
question. If the Trustee and Company fail to select an arbitrator in a timely
manner (including failure to select an arbitrator by reason of disagreement
between the Trustee and the Company as to the arbitrator to be selected), the
Claimant then shall designate one of the five arbitrators as the arbitrator of
the dispute in question.
     (c) The arbitration hearing shall be held within seven days (or as soon
thereafter as possible) after the selection of the arbitrator. No continuance of
said hearing shall be allowed without the mutual consent of the Claimant, the
Trustee, and the Company. Absence from or nonparticipation at the hearing by any
party shall not prevent the issuance of an award. Hearing procedures that will
expedite the hearing may be ordered at the arbitrator’s discretion, and the
arbitrator may close the hearing in his sole discretion when he decides he has
heard sufficient evidence to justify issuance of an award.
     (d) The arbitrator’s award shall be rendered as expeditiously as possible
and in no event later than one week after the close of the hearing. In the event
the arbitrator finds that the Claimant is entitled to the benefits he claimed,
the arbitrator shall order the Company and/or the Trustee to pay such benefits,
in the amounts and at such time as the arbitrator determines. The obligation of
the Trustee to pay such benefits shall not, however, exceed the assets of the
trust, and the Company shall be jointly and severally liable for any amount that
the Trustee is ordered to pay. The award of the arbitrator shall be final and
binding on the parties. The Company shall thereupon pay the Claimant immediately
the amount that the arbitrator orders to be paid in the manner described in the
award. The award may be enforced in any appropriate court as soon as possible
after its rendition. If any action is brought to confirm the award, no appeal
shall be taken by any party from any decision rendered in such action.

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     (e) If the arbitrator determines either that the Claimant is entitled to
the claimed benefits or that the claim by the Claimant was made in good faith,
the arbitrator shall direct the Company to pay to the Claimant, and Company
agrees to pay to the Claimant in accordance with such order, an amount equal to
the Claimant’s expenses in pursuing the claim, including attorneys’ fees.

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ARTICLE IX
ADMINISTRATION
9.1 — Committee.
     A committee shall be appointed by, and serve at the pleasure of, the Board
of Directors. The number of members comprising the Committee shall be determined
by the Board which may from time to time vary the number of members. A member of
the Committee may resign by delivering a written notice of resignation to the
Board. The Board may remove any member by delivering a certified copy of its
resolution of removal to such member. Vacancies in the membership of the
Committee shall be filled promptly by the Board.
9.2 — Committee Action.
     The Committee shall act at meetings by affirmative vote of a majority of
the members of the Committee. Any action permitted to be taken at a meeting may
be taken without a meeting if, prior to such action, a written consent to the
action is signed by all members of the Committee and such written consent is
filed with the minutes of the proceedings of the Committee. A member of the
Committee shall not vote or act upon any matter which relates solely to himself
or herself as a Participant. The Chairman or any other member or members of the
Committee designated by the Chairman may execute any certificate or other
written direction on behalf of the Committee.

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9.3 — Powers and Duties of the Committee.
     (a) The Committee, on behalf of the Participants and their Beneficiaries,
shall enforce the Plan in accordance with its terms, shall be charged with the
general administration of the Plan, and shall have all powers necessary to
accomplish its purposes, including, but not by way of limitation, the following:
          (1) To select the funds or contracts to be the Funds in accordance
with Section 3.2 hereof;
          (2) To construe and interpret the terms and provisions of the Plan;
          (3) To compute and certify to the amount and kind of benefits payable
to Participants and their Beneficiaries;
          (4) To maintain all records that may be necessary for the
administration of the Plan;
          (5) To provide for the disclosure of all information and the filing or
provision of all reports and statements to Participants, Beneficiaries or
governmental agencies as shall be required by law;
          (6) To make and publish such rules for the regulation of the Plan and
procedures for the administration of the Plan as are not inconsistent with the
terms hereof; and
          (7) To appoint a plan administrator or any other agent, and to
delegate to them such powers and duties in connection with the administration of
the Plan as the Committee may from time to time prescribe.

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9.4 — Construction and Interpretation.
     The Committee shall have full discretion to construe and interpret the
terms and provisions of the Plan, which interpretation or construction shall be
final and binding on all parties, including but not limited to the Company and
any Participant or Beneficiary. The Committee shall administer such terms and
provisions in a uniform and nondiscriminatory manner and in full accordance with
any and all laws applicable to the Plan.
9.5 — Information.
     To enable the Committee to perform its functions, the Company shall supply
full and timely information to the Committee on all matters relating to the
Compensation of all Participants, their death or other cause of termination, and
such other pertinent facts as the Committee may require.
9.6 — Compensation, Expenses and Indemnity.
     (a) The members of the Committee shall serve without compensation for their
services hereunder.
     (b) The Committee is authorized at the expense of the Company to employ
such legal counsel as it may deem advisable to assist in the performance of its
duties hereunder. Expenses and fees in connection with the administration of the
Plan shall be paid by the Company.
     (c) To the extent permitted by applicable state law, the Company shall
indemnify and save harmless the Committee and each member thereof, the Board of
Directors and any delegate of the Committee who is an employee of the Company
against any and all expenses, liabilities and claims, including legal fees to
defend against such liabilities and claims arising out of their discharge in
good

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faith of responsibilities under or incident to the Plan, other than expenses and
liabilities arising out of willful misconduct. This indemnity shall not preclude
such further indemnities as may be available under insurance purchased by the
Company or provided by the Company under any bylaw, agreement or otherwise, as
such indemnities are permitted under state law.
9.7 — Statements.
     Under procedures established by the Committee, a Participant shall receive
a statement with respect to such Participant’s Accounts on a regular basis, but
no less frequently than quarterly. In addition, the Committee may make Account
information available to Participants over the internet. However, neither the
Company, the Committee, nor any other person is required to provide such
information over the internet and such persons do not guarantee the accuracy of
any of such information provided over the internet.
9.8 — Disputes.
     (a) A person who believes that he or she is being denied a benefit to which
he or she is entitled under the Plan (hereinafter referred to as “Claimant”) may
file a written request for such benefit with the Committee, setting forth his or
her claim. The request must be addressed to the Committee at the Corporation’s
principal place of business.
     (b) Upon receipt of a claim, the Committee shall advise the Claimant that a
reply will be forthcoming within ninety (90) days and shall, in fact, deliver
such reply within such period. The Committee may, however, extend the reply
period for an additional ninety (90) days for special circumstances.

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     If the claim is denied in whole or in part, the Committee shall inform the
Claimant in writing, using language calculated to be understood by the Claimant,
setting forth: (1) the specific reason or reasons for such denial; (2) the
specific reference to pertinent provisions of the Plan on which such denial is
based; (3) a description of any additional material or information necessary for
the Claimant to perfect his or her claim and an explanation why such material or
such information is necessary; (4) appropriate information as to the steps to be
taken if the Claimant wishes to submit the claim for review; and (5) the time
limits for requesting a review under subsection (c).
     (c) Within sixty (60) days after the receipt by the Claimant of the written
opinion described above, the Claimant may request in writing that the Committee
review the determination. Such request must be addressed to the Committee, at
the Corporation’s principal place of business. The Claimant or his or her duly
authorized representative may, but need not, review the pertinent documents and
submit issues and comments in writing for consideration by the Committee.
     (d) Within sixty (60) days after the Committee’s receipt of a request for
review, after considering all materials presented by the Claimant, the Committee
will inform the Claimant in writing, in a manner calculated to be understood by
the Claimant, of its decision setting forth the specific reasons for the
decision and containing specific references to the pertinent provisions of the
Plan on which the decision is based. If special circumstances require that the
sixty (60) day time period be extended, the Committee will so notify the
Claimant and will render the decision as soon as possible, but no later than one
hundred twenty (120) days after receipt of the request for review.

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ARTICLE X
MISCELLANEOUS
10.1 — Unsecured General Creditor.
     Participants and their Beneficiaries, heirs, successors, and assigns shall
have no legal or equitable rights, claims, or interest in any specific property
or assets of the Company. No assets of the Company shall be held under any
trust, or held in any way as collateral security for the fulfilling of the
obligations of the Company under the Plan. Any and all of the Company’s assets
shall be, and remain, the general unpledged, unrestricted assets of the Company.
The obligations of each entity within the Company under the Plan shall be merely
that of an unfunded and unsecured promise of that entity to pay money in the
future, and the rights of the Participants and Beneficiaries shall be no greater
than those of unsecured general creditors. It is the intention of the Company
that the Plan be unfunded for purposes of the Internal Revenue Code and for
purposes of Title I of ERISA.
10.2 — Restriction Against Assignment.
     The Company shall pay all amounts payable hereunder only to the person or
persons designated by the Plan and not to any other person or corporation. No
part of a Participant’s Accounts shall be liable for the debts, contracts, or
engagements of any Participant, his or her Beneficiary, or successors in
interest, nor shall a Participant’s Accounts be subject to execution by levy,
attachment, or garnishment or by any other legal or equitable proceeding, nor
shall any such person have any right to alienate, anticipate, commute, pledge,
encumber, or assign any benefits or payments hereunder in any manner whatsoever.
If any Participant, Beneficiary or successor in interest is adjudicated bankrupt
or purports to anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge any distribution or payment from the Plan, voluntarily or involuntarily,
the Committee, in its discretion, may cancel such distribution or payment (or

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any part thereof) to or for the benefit of such Participant, Beneficiary or
successor in interest in such manner as the Committee shall direct.
10.3 — Withholding.
     There shall be deducted from each payment made under the Plan or any other
compensation payable to the Participant (or Beneficiary) all taxes which are
required to be withheld by the Company in respect to such payment or the Plan.
The Company shall have the right to reduce any payment (or compensation) by the
amount of cash sufficient to provide the amount of said taxes.
10.4 — Amendment, Modification, Suspension or Termination.
     The Corporation may amend, modify, suspend or terminate the Plan in whole
or in part, except that (a) no amendment, modification, suspension or
termination shall have any retroactive effect to reduce any amounts allocated to
a Participant’s Accounts, and (b) Section 8.1 may not be amended with respect to
any Participant or Beneficiary following the date the Participant or Beneficiary
makes a claim for benefits under the Plan. In the event that the Plan is
terminated and liquidated in circumstances satisfying the requirements of
Treasury Regulation Section 1.409A-3(j)(4)(ix), the amounts credited to a
Participant’s Accounts (including any previously unvested amounts) shall be
distributed to the Participant or, in the event of his or her death, his or her
Beneficiary at the earliest time permitted by Treasury
Regulation Section 1.409A-3(j)(4)(ix).
10.5 — Governing Law.
     The Plan shall be construed, governed and administered in accordance with
applicable federal law and, to the extent not preempted by such federal law, the
laws of the State of California. If any provision

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of this instrument shall be held by a court of competent jurisdiction to be
invalid or unenforceable, the remaining provisions hereof shall continue to be
fully effective.
10.6 — Payments on Behalf of Persons Under Incapacity.
     In the event that any amount becomes payable under the Plan to a person
who, in the sole judgement of the Committee, is considered by reason of physical
or mental condition to be unable to give a valid receipt therefore, the
Committee may direct that such payment be made to any person found by the
Committee, in its sole judgement, to have assumed the care of such person. Any
payment made pursuant to such determination shall constitute a full release and
discharge of the Committee and the Company.
10.7 — Headings, etc. Not Part of Agreement.
     Headings and subheadings in the Plan are inserted for convenience of
reference only and are not to be considered in the construction of the
provisions hereof.
10.8 — Section 409A.
     The Plan shall be construed and interpreted to the maximum extent
reasonably possible to avoid the imputation of any tax, penalty, or interest
pursuant to Section 409A of the Code.

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     IN WITNESS WHEREOF, the Corporation has caused this document to be executed
by its duly authorized officer effective as of the 31st day of December, 2008.

            PACIFIC SUNWEAR OF CALIFORNIA, INC.
      By:           Its:     

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