Exhibit 10.1
RESIGNATION AGREEMENT
     This Resignation Agreement (this “Resignation Agreement”) is made and
entered into between Pacific Sunwear of California, Inc. (hereinafter, the
“Company”) and Gerald M. Chaney (hereinafter, “Executive”) as of November 26th,
2007.
     WHEREAS, Executive has been employed by the Company in the capacity of
Senior Vice President, Chief Financial Officer and Secretary;
     WHEREAS, the Company and Executive previously entered into that certain
Severance Agreement as of November 22, 2004 (the “Severance Agreement”);
     WHEREAS, Executive has been designated as a participant in that certain
Executive Severance Plan approved and adopted by the Compensation Committee of
the Board of Directors on August 21, 2007 (the “Executive Severance Plan”); and
     WHEREAS, Executive and the Company have mutually agreed to end Executive’s
employment relationship with the Company effective immediately upon the terms
set forth herein.
     NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and good and valuable other consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
     1. Effective Date. This Resignation Agreement shall become effective on the
eighth day following Executive signing and delivering this Resignation Agreement
and the Release Agreement (the “Effective Date”), provided that Executive does
not revoke the Release Agreement prior to such date.
     2. Resignation. Executive and the Company hereby agree that Executive will
resign as Senior Vice President, Chief Financial Officer and Secretary of the
Company, and that his service in any other capacity for the Company will end,
effective as of the date this Resignation Agreement is signed and delivered by
the Company (the “Separation Date”). Executive also hereby resigns from his
position as an employee, officer, and member of the board of directors of any
and all affiliates of the Company effective as of the Separation Date. Executive
further agrees that he will execute any documents reasonably requested by the
Company or any of its affiliates to effectuate his resignation as employee,
officer or director of the Company and any of its affiliates, as well as to
remove Executive as an authorized signatory for the Company and any of its
affiliates.
     3. Severance Benefits Upon Resignation. Commencing as of the date hereof,
and provided that Executive fully complies with all requirements under this
Resignation Agreement, Executive shall be entitled to receive the “Severance
Benefits” set forth in Section 4.1 of the Executive Severance Plan and detailed
below as if Executive’s employment by the Company had been terminated without
Cause (as defined in the Executive Severance Plan). Notwithstanding the
foregoing and the provisions of Section 5.2(a) of the Severance Plan, the
Company and Executive hereby agree that (i) Executive shall not have an
affirmative duty to seek other employment but (ii) any money or other valuable
consideration earned or otherwise received by

 

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Executive or credited to Executive’s account (whether presently or on a deferred
basis) from the provision of services (whether as an employee, independent
contractor, consultant, advisor, or otherwise) during the 15 months following
the date of this Agreement shall be offset against and serve to decrease the
amount of any payments due hereunder, except that Executive may earn or receive
during such period, without offset, money or other valuable consideration with
an aggregate value not to exceed $50,000 for the provision of services (whether
as an employee, independent contractor, consultant, advisor, or otherwise) to
persons or entities that do not engage in business in the retail industry
(including as manufacturers, vendors and suppliers to such industry) or
otherwise compete with the Company. Executive agrees to notify the Company in
writing immediately upon receiving or earning any such money or other valuable
consideration during such period. The Severance Benefits shall be paid at the
times and in the manner set forth in Section 5.1 of the Executive Severance Plan
and are subject to the Company’s right to withhold applicable federal, state and
local income, employment or other taxes as set forth in Section 5.3 of the
Executive Severance Plan. Executive understands and agrees that the Severance
Benefits detailed below are being provided to Executive in lieu of any benefits
Executive would otherwise be entitled to receive pursuant to the Severance
Agreement or any other severance plan, program, agreement or other arrangement.

  i.   Equal cash payments made by check on a monthly basis for a period of
15 months commencing December 28, 2007 (and on the last pay date of each of the
subsequent 14 months remaining in the 15 month period) equal to $39,333.33 (the
benefit pursuant to Section 4.1(a) of the Executive Severance Plan);     ii.  
Equal cash payments made by check on a monthly basis for a period of 15 months
commencing December 28, 2007 (and on the last pay date of each of the subsequent
14 months remaining in the 15 month period) equal to $9,833.33 (the benefit
pursuant to Section 4.1(b) of the Executive Severance Plan);     iii.   A cash
payment equal to $5,126.04 made by check on December 28, 2007 (the benefit
pursuant to Section 4.1(c) of the Executive Severance Plan); and     iv.  
Payment of or reimbursement for up to $10,000 of outplacement services pursuant
to Section 4.1(d) of the Executive Severance Plan.

     4. Release Agreement. It shall be a condition to the obligations of the
Company to make the payments required hereunder that Executive execute and
deliver to the Company an effective Release Agreement, in the form attached as
Exhibit A (“Release Agreement”), which shall become effective on the eighth day
following the date Executive signs and delivers to the Company the Release
Agreement, provided that Executive does not revoke it before such date pursuant
to the Older Workers Benefit Protection Act.
     5. Restrictive Covenants.
          a. Non-Disparagement. Executive agrees that he will not at any time
after the date hereof (i) directly or indirectly, make or ratify any statement,
public or private, oral or written, to

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any person that disparages, either professionally or personally, the Company,
any of its subsidiaries or any of their respective directors, officers,
employees, stockholders, attorneys, accountants, insurers, agents,
representatives, assigns, successors, or products, past and present, and each of
them, or (ii) make any statement or engage in any conduct that has the purpose
or effect of disrupting the business of the Company or any of its subsidiaries.
Nothing herein shall in any way prohibit Executive from disclosing such
information in a truthful manner as may be required by law, or by judicial or
administrative process or order or the rules of any securities exchange or
similar self-regulatory organization applicable to Executive; provided, however,
upon receiving any subpoena or order from a court or arbitrator requiring him to
testify regarding his employment with the Company or any of its subsidiaries,
Executive shall provide a copy of such subpoena or order to the Company within
72 hours.
          b. Anti-Solicitation. Executive promises and agrees that, for a period
of one (1) year following the date hereof, he will not influence or attempt to
influence customers, vendors, or business partners of the Company or any of its
subsidiaries, either directly or indirectly, to divert their business from the
Company or any of its subsidiaries to any individual, partnership, firm,
corporation or other entity then in competition with the business of the Company
or any subsidiary.
          c. Solicitation of Employees. Executive promises and agrees that, for
a period of one (1) year following the date hereof, he will not directly or
indirectly solicit any employee of the Company or any of its subsidiaries to
terminate his or her employment with the Company or any of its subsidiaries or
to work for any business, individual, partnership, firm, corporation, or other
entity then in competition with the business of the Company or any subsidiary.
          d. Confidentiality. Executive promises and agrees that he will not at
any time after the date hereof, unless compelled by lawful process, disclose or
use for his own benefit or purposes or the benefit or purposes of any other
person, firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise (other than the Company and any of
its subsidiaries or affiliates), any trade secrets, or other confidential data
or information relating to customers, design programs, costs, marketing, sales
activities, promotion, credit and financial data, financing methods, or plans of
the Company or any subsidiary or affiliate of the Company; provided that the
foregoing shall not apply to information which is not unique to the Company (or
subsidiary or affiliate, as applicable) or which is generally known to the
industry or the public other than as a result of Executive’s breach of this
covenant. Executive agrees that, to the extent he has not already done so, he
will return to the Company immediately all memoranda, books, papers, plans,
information, letters and other data, and all copies thereof or therefrom, in any
way relating to the business of the Company or any subsidiary or affiliate of
the Company. Executive further agrees that he has not retained and will not
retain or use for his account at any time any trade names, trademark or other
proprietary business designation used or owned in connection with the business
of the Company or any subsidiary or affiliate of the Company; provided, however,
that Executive may retain his rolodex, address books, information relating to
his compensation or relating to reimbursement of expenses, documents relating to
his participation in employee benefit plans or programs of the Company or any of
its subsidiaries, any agreement between Executive and the Company or a
subsidiary relating to his employment with the Company or a subsidiary, and
other personal property provided that such items do not contain any confidential
information of the Company or a subsidiary.

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          e. Injunctive Relief. Executive expressly agrees that the Company will
or would suffer irreparable injury if he were to breach any of the provisions of
this Section 5 and that the Company would by reason of such conduct be entitled,
in addition to any other remedies, to injunctive relief. Executive consents and
stipulates to the entry of such injunctive relief prohibiting him from engaging
in conduct which violates any of the provisions of this Section 5.
     6. Cooperation.
          a. Litigation. Following the Effective Date, Executive shall cooperate
with the Company in connection with its defense, prosecution or investigation of
any legal matters. Without limiting the generality of the foregoing and for the
avoidance of any doubt, Executive’s duty of cooperation shall include, but shall
not be limited to, (a) meeting with the Company’s and/or its affiliates’
attorneys by telephone or in person in order to state truthfully Executive’s
knowledge of the matters at issue and recollection of events; (b) appearing at
the Company’s and/or its affiliates’ and/or their attorneys’ request as a
witness at depositions, trials, arbitrations, governmental investigations, or
other proceedings, with or without the necessity of a subpoena, in order to
state truthfully the Executive’s knowledge of the matters at issue; and
(c) signing at the Company’s and/or its affiliates’ request declarations or
affidavits that truthfully state the matters of which the Executive has
knowledge, in connection with any legal matters in which Executive has relevant
information.
          b. Audit. Executive shall assist the Company and its subsidiaries in
providing information and legal representations to the auditors of the Company
and its subsidiaries in a form and within a timeframe requested by the Board,
with respect to the Company’s and its Subsidiaries’ financial statements and
operations during the period of Executive’s employment with the Company.
          c. Reimbursement. Within ten days following any month in which
Executive devotes time or incurs travel at the request of the Company, or incurs
any reasonable out-of-pocket expenses, in connection with performing his
obligations under this Section 6, Executive shall submit a written itemized
invoice to the Company that accurately identifies the dates, amount of time, and
brief description of services that Executive performed in connection with such
services, along with any travel or out-of-pocket expenses accompanied by
appropriate receipts. Within 30 days of receiving such an invoice, the Company
will reimburse Executive for any such travel and reasonable out-of-pocket
expenses so incurred to the extent the Executive has provided appropriate
receipts. In addition, effective for services that are performed by Executive
under this Section 6 at the request of the Company after the fifteen (15) month
anniversary of the Effective Date, within 30 days of receiving such an invoice,
the Company shall promptly pay Executive $200 per hour for the time that
Executive actually and reasonably spends cooperating with the Company, its
affiliates, and/or their attorneys or auditors under this Section 6.
     7. Equity Awards. Any stock options, stock appreciation rights, and
restricted stock awards granted to Executive by the Company will, to the extent
not vested on the Separation Date, terminate on the Separation Date and
Executive will not have any rights with respect thereto or in respect thereof.
To the extent any stock options and stock appreciation rights granted to
Executive by the Company are vested on the Separation Date, Executive will have
only a limited period of time to exercise those awards (to the extent Executive
should desire to

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exercise those awards), with the limited period determined pursuant to the terms
and conditions of the respective award. As to the restricted stock award granted
to Executive by the Company on or about April 2, 2007, all of the shares subject
to such award will be forfeited to the Company on the Separation Date and
Executive will not have any rights with respect thereto or in respect thereof.
As to that award, Executive agrees to execute and deliver any and all additional
documents, and to take any and all other actions, that the Company may request
to effect and confirm the transfer of such shares to the Company as of the
Separation Date.
     8. Miscellaneous.
          a. This Resignation Agreement may be executed in one or more
counterparts. All of such counterparts shall constitute one and the same
agreement.
          b. This Resignation Agreement, together with the Release Agreement,
constitutes the entire agreement of the parties hereto relating to the subject
matter hereof, and there are no written or oral terms or representations made by
either party other than those contained herein.
          c. This Resignation Agreement supersedes all prior agreements between
the parties concerning the subject matter hereof.
          d. This Resignation Agreement may only be amended in writing signed by
both parties. No waiver by any part of any breach of this Resignation Agreement
shall be deemed to be a waiver by any party of any preceding or succeeding
breach.
          e. The validity, interpretation, performance and enforcement of this
Resignation Agreement shall be governed by the laws of the State of California
without regard to conflicts of law principles.
          f. The headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Resignation
Agreement.
[Signature page follows]

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     IN WITNESS WHEREOF, the parties have executed this Resignation Agreement as
of the date indicated below.

           
EXECUTIVE:
         
 
         
/s/ Gerald M. Chaney
      Date: November 26, 2007  
Gerald M. Chaney
       

              COMPANY:        
 
            Pacific Sunwear of California, Inc.        
 
           
By:
  /s/ Sally Frame Kasaks       Date: November 27, 2007
 
           
 
  Sally Frame Kasaks        
 
  Chief Executive Officer        

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Exhibit A
RELEASE AGREEMENT
     This Release Agreement (this “Release Agreement”) is entered into this 26th
day of November 2007 by and between Gerald M. Chaney, an individual
(“Executive”), and Pacific Sunwear of California, Inc., a California corporation
(the “Company”).
WHEREAS, Executive has been employed by the Company or one of its subsidiaries;
and
     WHEREAS, Executive’s employment by the Company or one of its subsidiaries
has ended and, in connection with that certain Resignation Agreement, dated
November 26, 2007, between the Company and Executive (the “Resignation
Agreement”), the Company and Executive desire to enter into this Release
Agreement upon the terms set forth herein;
     NOW, THEREFORE, in consideration of the covenants undertaken and the
releases contained in this Release Agreement, and in consideration of the
obligations of the Company (or one of its subsidiaries) to pay severance
benefits (conditioned upon this Release Agreement) under and pursuant to the
Resignation Agreement, Executive and the Company agree as follows:
          1. End of Employment. Executive’s employment with the Company ended on
November 26, 2007 (the “Separation Date”). Executive waives any right or claim
to reinstatement as an employee of the Company and each of its affiliates.
Executive hereby confirms that Executive does not hold any position as an
officer, director, employee, member, manager and in any other capacity with the
Company and each of its affiliates. Executive acknowledges and agrees that
Executive has received all amounts owed for his regular and usual salary
(including, but not limited to, any severance (other than any benefits due
pursuant to the Resignation Agreement), overtime, bonus, accrued vacation,
commissions, or other wages), reimbursement of expenses, and usual benefits, and
that all payments due to Executive from the Company have been received.
          2. Release. Executive, on behalf of himself, his descendants,
dependents, heirs, executors, administrators, assigns, and successors, and each
of them, hereby covenants not to sue and fully releases and discharges the
Company and each of its parents, subsidiaries and affiliates, past and present,
as well as its and their trustees, directors, officers, members, managers,
partners, agents, attorneys, insurers, employees, stockholders, representatives,
assigns, and successors, past and present, and each of them, hereinafter
together and collectively referred to as the “Releasees,” with respect to and
from any and all claims, wages, demands, rights, liens, agreements or contracts
(written or oral), covenants, actions, suits, causes of action, obligations,
debts, costs, expenses, attorneys’ fees, damages, judgments, orders and
liabilities of whatever kind or nature in law, equity or otherwise, whether now
known or unknown, suspected or unsuspected, and whether or not concealed or
hidden (each, a “Claim”), which he now owns or holds or he has at any time
heretofore owned or held or may in the future hold as against any of said
Releasees (including, without limitation, any Claim arising out of or in any way
connected with Executive’s service as an officer, director, employee, member or
manager of any Releasee, Executive’s separation from his position as an officer,
director, employee, manager and/or member, as applicable, of any Releasee, or
any other transactions, occurrences, acts or omissions or any loss, damage or
injury whatever), whether known or unknown, suspected or unsuspected,

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resulting from any act or omission by or on the part of said Releasees, or any
of them, committed or omitted prior to the date of this Release Agreement
including, without limiting the generality of the foregoing, any Claim under
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act, the Family and Medical Leave
Act of 1993, the California Fair Employment and Housing Act, the California
Family Rights Act, or any other federal, state or local law, regulation, or
ordinance, or any Claim for severance pay, bonus, sick leave, holiday pay,
vacation pay, life insurance, health or medical insurance or any other fringe
benefit, workers’ compensation or disability (the “Release”); provided, however,
that the foregoing Release does not apply to any obligation of the Company to
Executive pursuant to any of the following: (1) any equity-based awards
previously granted by the Company to Executive, to the extent that such awards
continue after the end of Executive’s employment with the Company in accordance
with the applicable terms of such awards (and subject to any limited period in
which to exercise such awards following such end of employment); (2) any right
to indemnification that Executive may have pursuant to the Bylaws of the
Company, its Articles of Incorporation or under any written indemnification
agreement with the Company (or any corresponding provision of any subsidiary or
affiliate of the Company) or applicable state law with respect to any loss,
damages or expenses (including but not limited to attorneys’ fees to the extent
otherwise provided) that Executive may in the future incur with respect to his
service as an employee, officer or director of the Company or any of its
subsidiaries or affiliates; (3) with respect to any rights that Executive may
have to insurance coverage for such losses, damages or expenses under any
Company (or subsidiary or affiliate) directors and officers liability insurance
policy; (4) any rights to continued medical or dental coverage that Executive
may have under COBRA (or similar applicable state law); (5) any rights to
severance benefits payable under the Resignation Agreement; (6) any rights to
payment of benefits that Executive may have under a retirement plan sponsored or
maintained by the Company that is intended to qualify under Section 401(a) of
the Internal Revenue Code of 1986, as amended; or (7) Executive’s vested benefit
(currently approximately $230,419.00) under and payable in accordance with the
Company’s Executive Deferred Compensation Plan. In addition, this Release does
not cover any Claim that cannot be so released as a matter of applicable law.
Executive acknowledges and agrees that he has received any and all leave and
other benefits that he has been and is entitled to pursuant to the Family and
Medical Leave Act of 1993.
          3. 1542 Waiver. It is the intention of Executive in executing this
Release Agreement that the same shall be effective as a bar to each and every
Claim hereinabove specified. In furtherance of this intention, Executive hereby
expressly waives any and all rights and benefits conferred upon him by the
provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly consents
that this Release Agreement (including, without limitation, the Release set
forth above) shall be given full force and effect according to each and all of
its express terms and provisions, including those related to unknown and
unsuspected Claims, if any, as well as those relating to any other Claims
hereinabove specified. SECTION 1542 provides:
     “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”

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Executive acknowledges that he may hereafter discover Claims or facts in
addition to or different from those which Executive now knows or believes to
exist with respect to the subject matter of this Release Agreement and which, if
known or suspected at the time of executing this Release Agreement, may have
materially affected this settlement. Nevertheless, Executive hereby waives any
right, Claim or cause of action that might arise as a result of such different
or additional Claims or facts. Executive acknowledges that he understands the
significance and consequences of such release and such specific waiver of
SECTION 1542.
          4. ADEA Waiver. Executive expressly acknowledges and agrees that by
entering into this Release Agreement, Executive is waiving any and all rights or
Claims that he may have arising under the Age Discrimination in Employment Act
of 1967, as amended (the “ADEA”), which have arisen on or before the date of
execution of this Release Agreement. Executive further expressly acknowledges
and agrees that:
     A. In return for this Release Agreement, the Executive will receive
consideration beyond that which the Executive was already entitled to receive
before entering into this Release Agreement;
     B. Executive is hereby advised in writing by this Release Agreement to
consult with an attorney before signing this Release Agreement;
     C. Executive has voluntarily chosen to enter into this Release Agreement
and has not been forced or pressured in any way to sign it;
     D. Executive was given a copy of this Release Agreement on November 21,
2007 and informed that he had twenty one (21) days within which to consider this
Release Agreement and that if he wished to execute this Release Agreement prior
to expiration of such 21-day period, he should execute the Endorsement attached
hereto;
     E. Executive was informed that he had seven (7) days following the date of
execution of this Release Agreement in which to revoke this Release Agreement,
and this Release Agreement will become null and void if Executive elects
revocation during that time. Any revocation must be in writing and must be
received by the Company during the seven-day revocation period. In the event
that Executive exercises his right of revocation, neither the Company nor
Executive will have any obligations under this Release Agreement;
     F. Nothing in this Release Agreement prevents or precludes Executive from
challenging or seeking a determination in good faith of the validity of this
waiver under the ADEA, nor does it impose any condition precedent, penalties or
costs from doing so, unless specifically authorized by federal law.
          5. No Transferred Claims. Executive warrants and represents that the
Executive has not heretofore assigned or transferred to any person not a party
to this Release Agreement any released matter or any part or portion thereof and
he shall defend, indemnify and hold the Company and each of its affiliates
harmless from and against any claim (including the payment of attorneys’ fees
and costs actually incurred whether or not litigation is commenced) based on or
in connection with or arising out of any such assignment or transfer made,
purported or claimed.

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          6. Compliance With Resignation Agreement. Executive warrants and
represents that Executive has complied fully with his obligations pursuant to
the Resignation Agreement and Executive covenants that he will continue to abide
by the applicable provisions of the Resignation Agreement.
          7. Severability. It is the desire and intent of the parties hereto
that the provisions of this Release Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision of this
Release Agreement shall be adjudicated by a court of competent jurisdiction to
be invalid, prohibited or unenforceable under any present or future law, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Release Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction; furthermore, in lieu
of such invalid or unenforceable provision there will be added automatically as
a part of this Release Agreement, a legal, valid and enforceable provision as
similar in terms to such invalid or unenforceable provision as may be possible.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Release Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
          8. Counterparts. This Release Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
          9. Successors. This Release Agreement is personal to Executive and
shall not, without the prior written consent of the Company, be assignable by
Executive. This Release Agreement shall inure to the benefit of and be binding
upon the Company and its respective successors and assigns and any such
successor or assignee shall be deemed substituted for the Company under the
terms of this Release Agreement for all purposes. As used herein, “successor”
and “assignee” shall include any person, firm, corporation or other business
entity which at any time, whether by purchase, merger, acquisition of assets, or
otherwise, directly or indirectly acquires the ownership of the Company,
acquires all or substantially all of the Company’s assets, or to which the
Company assigns this Release Agreement by operation of law or otherwise.
          10. Governing Law. THIS RELEASE AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH UNITED STATES FEDERAL LAW AND, TO THE EXTENT NOT
PREEMPTED BY UNITED STATES FEDERAL LAW, THE LAWS OF THE STATE OF CALIFORNIA,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE
(WHETHER OF THE STATE OF CALIFORNIA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE LAWS OF ANY JURISDICTION OTHER THAN UNITED STATES FEDERAL LAW AND THE LAW OF
THE STATE OF CALIFORNIA TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING,
APPLICABLE FEDERAL LAW AND, TO THE EXTENT NOT PREEMPTED BY APPLICABLE FEDERAL
LAW, THE INTERNAL LAW OF THE STATE OF CALIFORNIA, WILL CONTROL THE
INTERPRETATION AND CONSTRUCTION OF THIS RELEASE AGREEMENT, EVEN IF UNDER SUCH
JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF
SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

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          11. Amendment and Waiver. The provisions of this Release Agreement may
be amended and waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Release Agreement shall be construed as a waiver of such
provisions or affect the validity, binding effect or enforceability of this
Release Agreement or any provision hereof.
          12. Descriptive Headings. The descriptive headings of this Release
Agreement are inserted for convenience only and do not constitute a part of this
Release Agreement.
          13. Construction. Where specific language is used to clarify by
example a general statement contained herein, such specific language shall not
be deemed to modify, limit or restrict in any manner the construction of the
general statement to which it relates. The language used in this Release
Agreement shall be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction shall be applied against
any party.
          14. Arbitration. The Company and Executive hereby consent to the
resolution by mandatory and binding arbitration of all claims or controversies
arising out of or in connection with this Release Agreement that the Company may
have against Executive, or that Executive may have against the Company or
against any of its officers, directors, employees or agents acting in their
capacity as such. Each party’s promise to resolve all such claims or
controversies by arbitration in accordance with this Release Agreement rather
than through the courts is consideration for the other party’s like promise. It
is further agreed that the decision of an arbitrator on any issue, dispute,
claim or controversy submitted for arbitration, shall be final and binding upon
the Company and Executive and that judgment may be entered on the award of the
arbitrator in any court having proper jurisdiction.
     Except as otherwise provided in this procedure or by mutual agreement of
the parties, any arbitration shall be before a sole arbitrator (the
“Arbitrator”) selected from Judicial Arbitration & Mediation Services, Inc.,
Orange County, California, or its successor (“JAMS”), or if JAMS is no longer
able to supply the arbitrator, such arbitrator shall be selected from the
American Arbitration Association, and shall be conducted in accordance with the
provisions of California Civil Procedure Code Sections 1280 et. seq. as the
exclusive remedy of such dispute.
     The Arbitrator shall interpret this Release Agreement, any applicable
Company policy or rules or regulations, any applicable substantive law (and the
law of remedies, if applicable) of the state in which the claim arose, or
applicable federal law. In reaching his decision, the Arbitrator shall have no
authority to change or modify any lawful Company policy, rule or regulation, or
this Release Agreement. Except as provided in the next paragraph, the
Arbitrator, and not any federal, state or local court or agency, shall have
exclusive and broad authority to resolve any dispute relating to the
interpretation, applicability, enforceability or formation of this Release
Agreement, including but not limited to, any claim that all or any part of this
Release Agreement is voidable. The Arbitrator shall have the authority to decide
dispositive motions. Following completion of the arbitration, the arbitrator
shall issue a written decision disclosing the essential findings and conclusions
upon which the award is based.

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     Notwithstanding the foregoing, provisional injunctive relief may, but need
not, be sought by Executive or the Company in a court of law while arbitration
proceedings are pending, and any provisional injunctive relief granted by such
court shall remain effective until the matter is finally resolved by the
Arbitrator in accordance with the foregoing. Final resolution of any dispute
through arbitration may include any remedy or relief which would otherwise be
available at law and which the Arbitrator deems just and equitable. The
Arbitrator shall have the authority to award full damages as provided by law.
Any award or relief granted by the Arbitrator hereunder shall be final and
binding on the parties hereto and may be enforced by any court of competent
jurisdiction.
     The Company shall pay the reasonable fees and expenses of the Arbitrator
and of a stenographic reporter, if employed. Each party shall pay its own legal
fees and other expenses and costs incurred with respect to the arbitration.
          15. Nouns and Pronouns. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and
vice-versa.
          16. Legal Counsel. Each party recognizes that this is a legally
binding contract and acknowledges and agrees that they have had the opportunity
to consult with legal counsel of their choice. Executive acknowledges and agrees
that he has read and understands this Release Agreement completely, is entering
into it freely and voluntarily, and has been advised to seek counsel prior to
entering into this Release Agreement and he has had ample opportunity to do so.
          The undersigned have read and understand the consequences of this
Release Agreement and voluntarily sign it. The undersigned declare under penalty
of perjury under the laws of the State of California that the foregoing is true
and correct.
[Signature page follows.]

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     IN WITNESS WHEREOF, the parties have executed this Release Agreement as of
the date first written above.

         
 
  “Executive”    
 
       
 
 
 
               Gerald M. Chaney    

            PACIFIC SUNWEAR OF CALIFORNIA, INC.,
a California corporation,
      By:                  Sally Frame Kasaks               Chief Executive
Officer     

A-7

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ENDORSEMENT
     I,                                         , hereby acknowledge that I was
given 21 days to consider the foregoing Release Agreement and voluntarily chose
to sign the Release Agreement prior to the expiration of the 21-day period.
     I declare under penalty of perjury under the laws of the United States and
the State of California that the foregoing is true and correct.
     EXECUTED this                     day of
                                        2007, at  
                                       , California.

         
 
             
 
  Print Name: