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          II. **Severance****.**               (a) Subject to Sections II(b) and II(c) below, the Company shall pay as severance pay toIndividual the following benefits (collectively the “Severance Benefits”):                    1. **Severance Pay****.**The Company shall provide as severance pay to Individual the cashsum of $826,667.00 (the “Severance Pay”), to be paid as follows: (a) the Company shallpay to Individual the cash sum of $413,333.50, representing one-half of the total amount ofSeverance Pay due hereunder, on June 10, 2009; and (b) the Company shall pay the remainingone-half of the Severance Pay in six equal monthly installments of $68,888.92 beginning on theCompany’s first regular payroll date in July 2009 and continuing on the Company’s first regularpayroll date each month thereafter until and including December 2009. Notwithstanding theforegoing provisions, if a “Change in Control Event” (as defined in the Executive Severance Plan)occurs at any time after the Separation Date, the aggregate amount of any remaining unpaidinstallments of Severance Pay due under this Section shall be paid to Individual in cash in alump sum on the later of (x) June 10, 2009, and (y) thirty (30) days after the occurrence of suchChange in Control Event. All payments under this Section shall be paid without interest.                    2. **Benefits Payment****.**The Company shall pay to Individual a cash payment equal tothe expected aggregate cost, as reasonably determined by the Compensation Committee of theCompany’s Board of Directors, of premiums that would be charged to the Individual to continuemedical coverage pursuant to COBRA (the “Benefits Payment”) for twelve (12) monthsfollowing the Separation Date. The Benefits Payment shall be paid to the Individual in a lumpsum (without interest) on June 10, 2009.                    3. **Outplacement Services****.**The Company shall either pay directly or reimburseIndividual for the costs of outplacement services obtained by Individual within the 12-monthperiod following the Separation Date up to a maximum of $10,000 (the “OutplacementBenefit”). The Outplacement Benefit shall be subject to the Company’s expense reimbursementpolicies in effect immediately prior to the Severance Date and applicable to the Company’sexecutives generally and shall be fully paid or reimbursed, as applicable, by the Company notlater than the end of the Individual’s third taxable year following 2008. Notwithstandinganything to the contrary herein, the payment or reimbursement of the Outplacement Benefitincurred during the six (6) month period following the Separation Date, if any, shall beaccumulated and paid by the Company on June 10, 2009 (subject to Individual’s compliance with theCompany’s expense reimbursement policies).               (b) The Company’s obligation to pay the Severance Benefits (or any portion thereof, asapplicable) is subject to the condition precedent that Individual shall have complied with therestrictive covenants set forth in Section VII hereof. The Company shall have no obligation to payany portion of the Severance Benefits at any time after a breach by Individual of any covenant setforth in Section VII. Notwithstanding the foregoing provisions of this Section II(b), however, inno event shall the amount of the Severance Benefit actually paid by the Company to Individual beless than Five Thousand Dollars ($5,000) in the aggregate, regardless of any breach by Individualof the foregoing, which amount the parties agree (in and
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of itself) is good and sufficient consideration for the Release and other obligations ofIndividual under this Separation Agreement.               (c) The Company’s obligation to pay the Severance Benefits (or any portion thereof, asapplicable) is further subject to the condition precedent that Individual shall not have revokedthe Release set forth in Section III hereof pursuant to any revocation rights afforded byapplicable law. The Company shall have no obligation to pay the Severance Benefit to Individualunless and until the Release becomes irrevocable by Individual under the Age Discrimination inEmployment Act of 1967.               (d) The Severance Benefits payable under this Separation Agreement are in lieu of any and allseverance and other benefits to which Individual may otherwise be entitled under his EmploymentAgreement and/or the Company’s Executive Severance Plan as a result of Individual’s termination ofemployment with the Company. Individual agrees that the Severance Benefits received hereundershall not be deemed a part of Individual’s compensation for purposes of the determination ofbenefits under any other employee pension, welfare or other benefit plans or arrangements, if any,provided by the Company or any of its subsidiaries, except where explicitly provided under theterms of such plans or arrangements. Notwithstanding the foregoing provisions, all SeveranceBenefits provided hereunder shall be in addition to, and not in substitution for, any pensionrights under the any tax-qualified pension or retirement plan in which Individual participates, andany disability, workers’ compensation or other Company benefit plan distribution that Individual isentitled to (other than severance benefits), under the terms of any such plan as of the SeparationDate.          III. **Release****.**Individual, on behalf of himself, his descendants, dependents, heirs,executors, administrators, assigns, and successors, and each of them, hereby covenants not to sueand 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, andsuccessors, past and present, and each of them, hereinafter together and collectively referred toas 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 ofwhatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected orunsuspected, and whether or not concealed or hidden (each, a “Claim”), which he now owns orholds or he has at any time heretofore owned or held or may in the future hold as against any ofsaid Releasees (including, without limitation, any Claim arising out of or in any way connectedwith Individual’s service as an officer, director, employee, member or manager of any Releasee,Individual’s separation from her position as an officer, director, employee, manager and/or member,as applicable, of any Releasee, or any other transactions, occurrences, acts or omissions or anyloss, damage or injury whatever), whether known or unknown, suspected or unsuspected, resultingfrom any act or omission by or on the part of said Releasees, or any of them, committed or omittedprior to the date of this Release Agreement including, without limiting the generality of theforegoing, any Claim under Title VII of the Civil Rights Act of 1964, the Age Discrimination inEmployment Act of 1967, the Americans with Disabilities Act, the Family and Medical Leave Act of1993, the California Fair Employment and Housing Act, the California Family Rights Act, or anyother federal, state or local law, regulation, or ordinance, or any Claim
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for severance pay, bonus, sick leave, holiday pay, vacation pay, life insurance, health ormedical insurance or any other fringe benefit, workers’ compensation or disability (the“Release”); provided, however, that the foregoing release does not apply to any obligationof the Company to Individual pursuant to any of the following: (1) any equity-based awardspreviously granted by the Company to Individual, to the extent that such awards continue after thetermination of Individual’s employment with the Company in accordance with the applicable terms ofsuch awards (and subject to any limited period in which to exercise such awards following suchtermination of employment); (2) any right to indemnification that Individual may have pursuant tothe Bylaws of the Company, its Articles of Incorporation or under any written indemnificationagreement with the Company (or any corresponding provision of any subsidiary or affiliate of theCompany) or applicable state law with respect to any loss, damages or expenses (including but notlimited to attorneys’ fees to the extent otherwise provided) that Individual may in the futureincur with respect to her service as an employee, officer or director of the Company or any of itssubsidiaries or affiliates; (3) with respect to any rights that Individual may have to insurancecoverage 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 dentalcoverage that Individual may have under COBRA; (5) any rights to payment of benefits thatIndividual may have under a retirement plan sponsored or maintained by the Company that is intendedto qualify under Section 401(a) of the Internal Revenue Code of 1986, as amended; (6) Individual’sbenefit under and in accordance with the terms and conditions of the Company’s Executive DeferredCompensation Plan; or (7) any rights or benefits that Individual has under this SeparationAgreement. In addition, this Release does not cover any Claim that cannot be so released as amatter of applicable law. Individual acknowledges and agrees that he has received any and allleave and other benefits that he has been and is entitled to pursuant to the Family and MedicalLeave Act of 1993.          IV. **1542 Waiver****.**It is the intention of Individual in executing this SeparationAgreement that the same shall be effective as a bar to each and every Claim hereinabove specified.In furtherance of this intention, Individual hereby expressly waives any and all rights andbenefits conferred upon her by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE andexpressly consents that this Separation Agreement (including, without limitation, the Release setforth above) shall be given full force and effect according to each and all of its express termsand provisions, including those related to unknown and unsuspected Claims, if any, as well as thoserelating to any other Claims hereinabove specified. SECTION 1542 provides:          “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITORDOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OFEXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVEMATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”Individual acknowledges that he may hereafter discover Claims or facts in addition to or differentfrom those which Individual now knows or believes to exist with respect to the subject matter ofthis Separation Agreement and which, if known or suspected at the time of executing this SeparationAgreement, may have materially affected this settlement. Nevertheless,
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Individual hereby waives any right, Claim or cause of action that might arise as a result of suchdifferent or additional Claims or facts. Individual acknowledges that he understands thesignificance and consequences of the foregoing Release and such specific waiver of SECTION 1542.          V. **ADEA Waiver****.**Individual expressly acknowledges and agrees that by entering intothis Separation Agreement, he is waiving any and all rights or claims that he may have arisingunder the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), which havearisen on or before the date of execution of this Separation Agreement. Individual furtherexpressly acknowledges and agrees that:               (a) In return for this Separation Agreement, he will receive consideration beyond that whichhe was already entitled to receive before entering into this Separation Agreement;               (b) He is hereby advised in writing by this Separation Agreement to consult with an attorneybefore signing this Separation Agreement;               (c) He has voluntarily chosen to enter into this Separation Agreement and has not been forcedor pressured in any way to sign it;               (d) He was given a copy of this Separation Agreement on December 9, 2008 and informed that hehad forty-five (45) days within which to consider the Separation Agreement and that if he wished toexecute this Separation Agreement prior to expiration of such 45-day period, he should execute theAcknowledgement and Waiver attached hereto as Exhibit A;               (e) Nothing in this Separation Agreement prevents or precludes Individual from challenging orseeking a determination in good faith of the validity of this waiver under the ADEA, nor does itimpose any condition precedent, penalties or costs from doing so, unless specifically authorized byfederal law; and               (f) He was informed that he has seven (7) days following the date of execution of thisSeparation Agreement in which to revoke this Separation Agreement, and this Separation Agreementwill become null and void if Individual elects revocation during that time. Any revocation must bein writing and must be received by the Company during the seven-day revocation period. In theevent that Individual exercises his right of revocation, neither the Company nor Individual willhave any obligations under this Separation Agreement.          VI. **No Transferred Claims****.**Individual warrants and represents that Individual has notheretofore assigned or transferred to any person not a party to this Separation Agreement anyreleased matter or any part or portion thereof and he shall defend, indemnify and hold the Companyand 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 connectionwith or arising out of any such assignment or transfer made, purported or claimed.
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          VII. **Restrictive Covenants****.**               **A. ****Anti-Solicitation****.**Individual promises and agrees that, for a period of one (1)year following the Separation Date, he will not directly encourage customers of the Company or anyof its subsidiaries, or directly or indirectly through any third party influence or attempt toinfluence any vendor, supplier, brand, product or merchandise designer or consultant, landlord,bank, lender or investor in, of or to the Company or any of its subsidiaries (collectively referredto herein as “Company Business Partners”), to refrain from, reduce the level of or ceasedoing business with the Company or any of its subsidiaries; *provided, however,*that nothingcontained in this Section A. shall be construed to prohibit, limit or restrict Individual (subjectto Individual’s compliance with the other restrictive covenants set forth in this Article VII) fromengaging in, entering the employ of or rendering services to any other business (including anybusiness that competes with that of the Company or any of its subsidiaries) and, in connectiontherewith, soliciting or entering into independent commercial relationships with any of the CompanyBusiness Partners for the benefit of such business.               **B. ****No Solicitation of Employees****.**Individual promises and agrees that, for a period ofone (1) year following the Separation Date, he will not directly or indirectly solicit any personwho Individual knows is an employee of the Company or any of its subsidiaries to work for anybusiness, individual, partnership, firm, corporation or other entity then in competition with thebusiness of the Company or any subsidiary; *provided, however,*that the foregoing provision shallnot prohibit or restrict Individual from so soliciting any person whose employment with the Companyor any of its subsidiaries terminated prior to the commencement of such solicitation.               **C. ****Confidentiality****.**Individual promises and agrees that he will not at any time afterthe Separation Date, unless compelled by lawful process, disclose or use for his own benefit orpurposes or the benefit or purposes of any other person, firm, partnership, joint venture,association, corporation or other business organization, entity or enterprise (other than theCompany and any of its subsidiaries or affiliates), any trade secrets, or other confidential dataor information relating to customers, design programs, costs, marketing, sales activities,promotion, credit and financial data, financing methods, or plans of the Company or any subsidiaryof the Company; provided that the foregoing shall not apply to information which is notunique to the Company (or subsidiary, as applicable) or which is generally known to the industry orthe public other than as a result of Individual’s breach of this covenant. Individual 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, inany way relating to the business of the Company or any subsidiary of the Company. Individualfurther agrees that he has not retained and will not retain or use for his account at any time anytrade names, trademark or other proprietary business designation used or owned in connection withthe business of the Company or any subsidiary of the Company; provided, however, that Individualmay retain his rolodex, address books, information relating to his compensation or relating toreimbursement of expenses, documents relating to his participation in employee benefit plans orprograms of the Company or any of its subsidiaries, any agreement between Individual and theCompany or a subsidiary relating to his employment with the Company or a subsidiary, and otherpersonal property provided that such items do not contain any confidential information of theCompany or a subsidiary.
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               **D. ****Non-Disparagement****.**Individual promises and agrees that, for a period of one (1)year following the Separation Date, he will not by any means issue or communicate any private orpublic statement that may be critical or disparaging of the Company or its subsidiaries, or of anyof their respective products, merchandise, services, directors or officers. The Company promisesand agrees that it will not by any means issue or communicate any private or public statement thatmay be critical or disparaging of Individual. However, nothing in this paragraph shall affectIndividual’s or the Company’s ability or obligation to provide complete and truthful testimony orother information in connection with any (i) governmental and/or regulatory investigation orproceeding, (ii) required public, governmental or regulatory disclosure or filing, or (iii)pleadings, discovery and/or trial in litigation.               **E. ****Solicitation of Proxies****.**Individual promises and agrees that, for a period of one(1) year following the Separation Date, he will not initiate, propose or submit any stockholderproposal, or solicit proxies (or written consents), or assist or participate in any other way,directly or indirectly, in any solicitation of proxies (or written consents), or otherwise become a“participant” in a “solicitation” (as such terms are defined under the Securities Exchange Act of1934, as amended) in opposition to any management proposal or any recommendation or proposal of theCompany’s Board of Directors (including, without limitation, with respect to the election ofdirectors), or recommend, request, discuss with or induce or attempt to induce any other person orgroup to take any such actions, or otherwise seek to advise, encourage or influence any otherperson or group with respect to the voting of (or the execution of a written consent in respect of)any voting securities of the Company in opposition to any proposal, director nomination orrecommendation of the Board of Directors.               **F. ****Injunctive Relief****.**Individual expressly agrees that the Company will or wouldsuffer irreparable injury if he were to breach any of the provisions of this Section VII and thatthe Company would by reason of such conduct be entitled, in addition to any other remedies, toinjunctive relief. Individual consents and stipulates to the entry of such injunctive reliefprohibiting his from engaging in conduct which violates any of the provisions of this Section VII.          VIII. **Miscellaneous**               **A. ****Company Insider Trading Restrictions****.**The Company agrees to immediately notifyGoldman Sachs, as the administrative brokerage for Individual’s stock options and equity grants,that as of the Separation Date Individual is no longer considered a “company insider” for thepurposes of trading of any Company stock options. Individual hereby acknowledges that he ispersonally responsible for complying with all applicable securities laws regarding trading while inpossession of material inside information.               **B. ****Section 16 Officer Status/SEC Reporting Requirements****.**The parties herebyacknowledge and agree that as of the Separation Date, Individual will cease to be considered anofficer of the Company who is subject to Section 16 of the Securities Exchange Act of 1934.Individual may be subject to certain additional filings and Section 16 considerations for a periodof up to six (6) months following the Separation Date, in the event he engages in any transactionin Company common stock. Individual is encouraged to coordinate
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with his own personal legal advisor, as may be relevant for any transaction in Company stockwithin a period of up to six (6) months following the Separation Date.               **C. ****Return of Company Property****.**On the Separation Date, Individual shall return theCompany laptop computer, cellular phone, employee identification, and all other equipment, devices,or items provided to Individual by the Company. Except as otherwise provided herein, all Companyprovided services will be discontinued as of the Separation Date.               **D. ****Successors****.**     (i) This Separation Agreement is personal to Individual and shall not, without theprior written consent of the Company, be assignable by Individual. However, shouldIndividual die during the twelve (12) month period following the Separation Date, then, solong as Individual had not theretofore materially breached his obligations under thisSeparation Agreement, (and such material breach remains uncured following notice thereof)the Company agrees to pay any then remaining balance of the Severance Benefits toIndividual’s heirs or his estate, as applicable.     (ii) This Separation Agreement shall inure to the benefit of and be binding upon theCompany and its respective successors and assigns and any such successor or assignee shallbe deemed substituted for the Company under the terms of this Separation Agreement for allpurposes. 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 theCompany, acquires all or substantially all of the Company’s assets, or to which the Companyassigns this Separation Agreement by operation of law or otherwise.               **E. ****Waiver****.**No waiver of any breach of any term or provision of this SeparationAgreement shall be construed to be, nor shall be, a waiver of any other breach of this SeparationAgreement. No waiver shall be binding unless in writing and signed by the party waiving thebreach.               **F. ****Modification****.**This Separation Agreement shall not be modified by any oralagreement, either express or implied, and all modifications hereof shall be in writing and signedby the parties hereto.               **G. ****Complete Agreement****.**This Separation Agreement embodies the entire agreement of theparties hereto respecting the matters within its scope. This Separation Agreement supersedes allprior agreements of the parties hereto on the subject matter hereof, including, without limitation,the Employment Agreement and the Executive Severance Plan. Any prior negotiations, correspondence,agreements, proposals, or understandings relating to the subject matter hereof shall be deemed tobe merged into this Separation Agreement and to the extent inconsistent herewith, suchnegotiations, correspondence, agreements, proposals, or understandings shall be deemed to be of noforce or effect. As of the date of this Separation Agreement, there are no representations,warranties or agreements, whether express or implied, or oral or written, with respect to thesubject matter hereof, except as set forth herein. Notwithstanding the foregoing, the Company’srights under any confidentiality, trade secret,
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proprietary information, inventions or similar agreement to which Individual was a party orotherwise bound are not integrated into this Agreement and such rights of the Company shallcontinue in effect.               **H. ****Severability****.**In the event that a court of competent jurisdiction determines thatany portion of this Separation Agreement is in violation of any statute or public policy, then onlythe portions of this Separation Agreement which violate such statute or public policy shall bestricken, and all portions of this Separation Agreement which do not violate any statute or publicpolicy shall continue in full force and effect. Furthermore, any court order striking any portionof this Separation Agreement shall modify the stricken terms as narrowly as possible to give asmuch effect as possible to the intentions of the parties under this Separation Agreement.               **I. ****Governing Law****.**This Separation Agreement and the legal relations hereby createdbetween the parties hereto shall be governed by and construed under and in accordance with theinternal laws of the State of California, without regard to conflicts of laws principles thereof.               **J. ****Legal Counsel; Mutual Drafting****.**Each party recognizes that this is a legallybinding contract and acknowledges and agrees that they have had the opportunity to consult, andhave consulted, with legal counsel of their choice. Each party has cooperated in the drafting,negotiation and preparation of this Separation Agreement. Hence, in any construction to be made ofthis Separation Agreement, the same shall not be construed against either party on the basis ofthat party being the drafter of such language. Individual agrees and acknowledges that he has readand understands this Separation Agreement, is entering into it freely and voluntarily, and has beenadvised to seek counsel prior to entering into this Separation Agreement, has had ample opportunityto do so, and has had the benefit of such counsel.               **K. ****Notices****.**All notices under this Separation Agreement shall be in writing and shallbe either personally delivered or mailed postage prepaid, by certified mail, return receiptrequested: (i) if to the Company:    Pacific Sunwear of California, Inc.Attention: Chief Financial Officer3450 East Miraloma AvenueAnaheim, California 92806   with a copy to:    Pacific Sunwear of California, Inc.Attention: Senior Vice President, Human Resources3450 East Miraloma AvenueAnaheim, California 92806 (ii) if to Individual:    At the address on file with the Company
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Notice shall be effective when personally delivered, or five (5) business days after being somailed. Any party may change its address for purposes of giving future notices pursuant to thisAgreement by notifying the other party in writing of such change in address, such notice to bedelivered or mailed in accordance with the foregoing.               **L. ****On-going Communication with the Company****.**For the purposes of coordinating andcontrolling any ongoing communications, contacts, or interactions between Individual and theCompany following the Separation Date, Caroline Kenyon is to be the sole and exclusive point ofcontact between Individual and the Company. Any and all communications, contacts, questions,requests, or other interactions of any nature by Individual or on Individual’s behalf whatsoevermust be directed to Ms. Kenyon, as the exclusive point of contact with and “entry” to the Companyfor any matter dealing with the Company, or for any matter which arises from or relates in any wayto Individual’s involvement with the Company. This arrangement includes, by way of example and notas any limitation or restriction on the generality of the foregoing, requests involving employeebenefit questions, matters involving any transaction with equity awards Individual beneficiallyowns from whatever source, or matters of administration of any aspect of this Separation Agreement.Ms. Kenyon will arrange for contact with, response by, or communication with, the applicablepersonnel of the Company on a case-by-case basis. Ms. Kenyon may be reached at (714) 414-4395. IfMs. Kenyon is not then employed by the Company, the Company will designate the appropriate newcontact person.               **M. ****Litigation / Audit Cooperation****.**Following the Separation Date, Individual shallreasonably cooperate with the Company and its subsidiaries in connection with: (a) any internal orgovernmental investigation or administrative, regulatory, arbitral or judicial proceeding involvingthe Company and any of its subsidiaries with respect to matters relating to Individual’s employmentwith or service as a member of the board of directors of the Company or any of its subsidiaries(collectively, “Litigation”); or (b) any audit of the financial statements of the Companyor any of its subsidiaries with respect to the period of time when Individual was employed by theCompany or any of its subsidiaries (“Audit”). Individual acknowledges that suchcooperation may include, but shall not be limited to, Individual making himself available to theCompany or any of its subsidiaries (or their respective attorneys or auditors) upon reasonablenotice for: (i) interviews, factual investigations, and providing declarations or affidavits thatprovide truthful information in connection with any Litigation or Audit; (ii) appearing at therequest of the Company or any of its subsidiaries to give testimony without requiring service of asubpoena or other legal process; (iii) volunteering to the Company or any of its subsidiariespertinent information related to any Litigation or Audit; (iv) providing information and legalrepresentations to the auditors of the Company or any of its subsidiaries, in a form and within atime frame requested by the Company’s Board of Directors, with respect to the Company’s or any ofits subsidiaries’ opening balance sheet valuation of intangibles and financial statements for theperiod in which Individual was employed by the Company or any of its subsidiaries; and (v) turningover to the Company or any of its subsidiaries any documents relevant to any Litigation or Auditthat are or may come into Individual’s possession. The Company shall reimburse Individual forreasonable travel expenses incurred in connection with providing the services under this SectionVIII(M), including lodging and meals, upon Individual’s submission of receipts. If, due to anactual or potential conflict of interest, it is necessary for Individual to retain separate counselin connection with providing the services under this Section VIII(M), and such counsel is nototherwise supplied by and at the expense of the Company (pursuant to
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indemnification rights of the Individual or otherwise), the Company shall further reimburseIndividual for the reasonable fees and expenses of such separate counsel.               **N. ****Counterparts****.**This Separation Agreement may be executed in any number ofcounterparts, each of which shall be deemed an original and all of which together shall constituteone and the same instrument.               **O. ****Arbitration****.**Any controversy arising out of or relating to this SeparationAgreement, its enforcement or interpretation, or because of an alleged breach, default, ormisrepresentation in connection with any of its provisions, or any other controversy arising out ofIndividual’s employment or the termination thereof, including, but not limited to, any state orfederal statutory claims, shall be submitted to arbitration in Orange County, California, before asole arbitrator selected from Judicial Arbitration and Mediation Services, Inc., Orange County,California, or its successor (“JAMS”), or if JAMS is no longer able to supply thearbitrator, such arbitrator shall be selected from the American Arbitration Association, and shallbe conducted in accordance with the provisions of California Code of Civil Procedure §§ 1280 etseq. as the exclusive forum for the resolution of such dispute. Pursuant to California Code ofCivil Procedure § 1281.8, provisional injunctive relief may, but need not, be sought by eitherparty to this Separation Agreement in a court of law while arbitration proceedings are pending, andany provisional injunctive relief granted by such court shall remain effective until the matter isfinally determined by the Arbitrator. Final resolution of any dispute through arbitration mayinclude any remedy or relief which the Arbitrator deems just and equitable, including any and allremedies provided by applicable state or federal statutes. At the conclusion of the arbitration,the Arbitrator shall issue a written decision that sets forth the essential findings andconclusions upon which the Arbitrator’s award or decision is based. Any award or relief granted bythe Arbitrator hereunder shall be final and binding on the parties hereto and may be enforced byany court of competent jurisdiction. The parties acknowledge and agree that they are herebywaiving any rights to trial by jury in any action, proceeding or counterclaim brought by either ofthe parties against the other in connection with any matter whatsoever arising out of or in any wayconnected with this Separation Agreement or Individual’s employment. The parties agree that (i)the Company shall be responsible for payment of the forum costs of any arbitration hereunder,including the Arbitrator’s fee, in connection with any proceeding to enforce the terms of thisSeparation Agreement, and (ii) the Arbitrator shall have discretion, if the Arbitrator determinesit to be appropriate, to award reasonable attorneys’ fees and costs to the party prevailing in anysuch proceeding.               **P. ****Number and Gender****.**Where the context requires, the singular shall include theplural, the plural shall include the singular, and any gender shall include all other genders.               **Q. ****Headings****.**The section headings in this Separation Agreement are for the purpose ofconvenience only and shall not limit or otherwise affect any of the terms hereof.               **R. ****Taxes****.**The Company has the right to withhold from any payment hereunder or underany other agreement between the Company and Individual the amount required by law to be withheldwith respect to such payment or other benefits provided to Individual. Other than as to suchwithholding right, Individual shall be solely responsible for any taxes due as a result of thepayments and benefits received by Individual contemplated by this Separation Agreement.
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          I have read the foregoing Separation Agreement and I accept and agree to the provisions itcontains and hereby execute it voluntarily with full understanding of its consequences.          EXECUTED this 12th day of December, 2008, at Los Angeles County, California.      **“Individual”**   /s/ Thomas M. Kennedy  Thomas M. Kennedy           EXECUTED this 12th day of December, 2008, at Orange County, California.      **“Company”**