##### Table of Contents





FORM 10-K
  (Mark One)[ x ] Annual Report Pursuant to Section 13
    or 15(d) of the Securities Exchange Act of 1934For the fiscal year ended: January 30,
    2010
    or[  ] Transition Report Pursuant to
    Section 13 or 15(d) of the Securities Exchange Act of
    1934
    For the transition period
    from
    to     
  PACIFIC SUNWEAR OF CALIFORNIA,
    INC.
   California 
    (State of incorporation)

95-3759463
    (I.R.S. Employer Identification No.)3450 E. Miraloma Ave., Anaheim, CA
    (Address of principal executive offices)

92806
    (Zip Code)    (714) 414-4000
    Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, par value $0.01 per share

The NASDAQ Stock Market LLC (Nasdaq Global Select Market)   Securities
    Registered Pursuant to Section 12(g) of the Act:
    None.
  
    Indicate by check mark if the registrant is a well-known
    seasoned issuer, as defined in Rule 405 of the Securities Act.
    Yes [ ] No [X]
    Indicate by check mark if the registrant is not required to file
    reports pursuant to Section 13 or 15(d) of the Act.
    Yes [ ] No [X]
    Indicate by check mark whether the registrant (1) has filed
    all reports required to be filed by Section 13 or 15(d) of
    the Securities Exchange Act of 1934 during the preceding
    12 months (or for such shorter period that the registrant
    was required to file such reports), and (2) has been
    subject to such filing requirements for the past 90 days.
    Yes [X] No [ ]
    Indicate by check mark whether the registrant has submitted
    electronically and posted on its corporate Web site, if any,
    every Interactive Data File required to be submitted and posted
    pursuant to Rule 405 of
    Regulation S-T
    (§ 232.405 of this chapter) during the preceding
    12 months (or for such shorter period that the registrant
    was required to submit and post such files).
    Yes [ ] No [ ]
    Indicate by check mark if disclosure of delinquent filers
    pursuant to Item 405 of Regulation S-K is not contained
    herein, and will not be contained, to the best of the
    registrants knowledge, in definitive proxy or information
    statements incorporated by reference in Part III of this
    Form 10-K
    or any amendment to this
    Form 10-K.
    [ ]
    Indicate by check mark whether the registrant is a large
    accelerated filer, an accelerated filer, a non-accelerated
    filer, or a smaller reporting company. See the definitions of
    large accelerated filer, accelerated
    filer and smaller reporting company in
    Rule 12b-2
    of the Exchange Act. (Check one):  Large accelerated
    filer [ ]
    Accelerated
    filer [X]
    Non-accelerated
    filer [ ]
    Smaller reporting
    company [ ]   
    Indicate by check mark whether the registrant is a shell company
    (as defined in
    Rule 12b-2
    of the Exchange Act). Yes [ ] No [X]      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 





PACIFIC SUNWEAR
    OF CALIFORNIA, INC.FORM 10-K
    For the Fiscal Year Ended January 30, 2010
    Index
   
 Page #PART IItem 1.


Business


2Item 1A.


Risk Factors


8Item 1B.


Unresolved Staff Comments


14Item 2.


Properties


14Item 3.


Legal Proceedings


15Item 4.


Reserved


15PART IIItem 5.


Market For Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


16Item 6.


Selected Financial Data


18Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


19Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


29Item 8.


Financial Statements and Supplementary Data


30Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


30Item 9A.


Controls and Procedures


30Item 9B.


Other Information


32PART IIIItem 10.


Directors, Executive Officers, and Corporate
    Governance


32Item 11.


Executive Compensation


32Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


32Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


32Item 14.


Principal Accounting Fees and Services


32PART IVItem 15.


Exhibits, Financial Statement Schedules


32Signatures


33EX-10.23EX-10.24EX-21.1EX-23.1EX-31.1EX-32.1




---



PART I  ITEM 1. BUSINESS
      (714) 414-4000; www.pacsun.com . Form 10-K, Form 10-Q, Form 8-K,
    Fiscal Year

Year-End Date

# of Weeks2010

January 29, 2011

522009

January 30, 2010

522008

January 31, 2009

522007

February 2, 2008

522006

February 3, 2007

532005

January 28, 2006

52   Our Mission and
    Strategies
    Strong Emphasis on Brands. up-and-coming, ® ® ®
     2     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



Localized Assortment Planning.
  New Strategic Marketing Initiatives.
  Elimination of Value Store Designation.
  Merchandising
  Merchandise.
  Fiscal Year2009

2008

2007Young Mens Apparel

45%

41%

38%Juniors Apparel

43%

42%

33%Accessories and Footwear

12%

17%

29%Total

100%

100%

100%      Pacific
    Sunwear of California, Inc. Form 10-K
    2009     3




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##### Table of Contents



Brands. up-and-coming
  ® ® ®
  Vendor and Contract Manufacturer Relationships.
    Merchandising, Planning, Allocation and Distribution.
     4     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



E-commerce. www.pacsun.com. e-mail
  Stores
  Locations.
  Real Estate Strategy. and/or
    Store Operations.
  Competition
     Pacific
    Sunwear of California, Inc. Form 10-K
    2009     5




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##### Table of Contents



Trademarks and
    Service Marks
  ® ® ® ® ® ®
  Information
    Technology
  open-to-buy,
  point-of-sale look-up,
  Seasonality
    Working Capital
    Concentration
    Employees
    Executive Officers.
  Executive Officer

Age

TitleGary H. Schoenfeld


47


President, Chief Executive Officer and DirectorCharles Mescher


36


Sr. Vice President, General Merchandise Manager, Young MensChristine Lee


39


Sr. Vice President, General Merchandise Manager, JuniorsRobert Cameron


50


Sr. Vice President, MarketingMichael L. Henry


39


Sr. Vice President, Chief Financial Officer and SecretaryCraig E. Gosselin


50


Sr. Vice President, General Counsel and Human Resources   Gary H. Schoenfeld
   6     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



tm
  Charles Mescher
  Christine Lee
  Robert Cameron
  Michael L. Henry
  Craig E. Gosselin
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     7




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##### Table of Contents



ITEM 1A.
    RISK
    FACTORS  Cautionary Note
    Regarding Forward-Looking Statements
  This report on
    Form 10-K
    contains forward-looking statements within the
    meaning of Section 27A of the Securities Act of 1933, as
    amended, and Section 21E of the Exchange Act, and we intend
    that such forward-looking statements be subject to the safe
    harbors created thereby. We are providing cautionary statements
    identifying important factors that could cause our actual
    results to differ materially from those projected in the
    forward-looking statements contained herein. Any statements that
    express, or involve discussions as to, expectations, beliefs,
    plans, objectives, assumptions, future events or performance
    (often, but not always identifiable by the use of words or
    phrases such as will result, expects to,
    will continue, anticipates,
    plans, intends, estimated,
    projects and outlook) are not historical
    facts and may be forward-looking and, accordingly, such
    statements involve estimates, assumptions and uncertainties
    which could cause actual results to differ materially from those
    expressed in the forward-looking statements. Examples of
    forward-looking statements in this report include, but are not
    limited to, the following categories of expectations about:
  
    our branding and merchandising strategies, including our
    plans to work with our heritage brands to reinvigorate the
    PacSun shopping experience and our plans to expand the number of
    stores in which we carry footwear during fiscal 2010,
    our localization strategies, including our belief
    that redefining our merchandise assortment planning strategies
    could improve both our sales and merchandise margin performance
    and our expectations that the full impact of our
    localization strategies will begin to take effect in
    the second half of fiscal 2010,
    our plans to eliminate our value store
    designations and our belief that such plans will lead to
    improved sales and merchandise margin performance versus fiscal
    2009,
    forecasts of future sales activity, inventory levels and
    selling, general and administrative expenses,
    the sufficiency of working capital, operating cash flows and
    available credit to meet our operating and capital expenditure
    requirements,
    our capital expenditure plans for fiscal 2010,
    forecasts of future store closures, expansions, relocations
    and store refreshes, including planned fiscal 2010
    activities,
    future borrowings and repayments under our credit facility,
    and
    future increases in occupancy expenses  All forward-looking statements included in this report are
    based on information available to us as of the date hereof, and
    are subject to risks and uncertainties that could cause actual
    results to differ materially from those expressed in the
    forward-looking statements. We assume no obligation to update or
    revise any such forward-looking statements to reflect events or
    circumstances that occur after such statements are made.
  Our failure to identify and respond appropriately to changing
    consumer preferences and fashion trends in a timely manner could
    have a material adverse impact on our business and
    profitability.
   8     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



We face significant competition from both
    vertically-integrated and brand-based competitors which could
    have a material adverse effect on our business.
  Our failure to reverse declining sales in our Juniors
    business would have a material adverse impact on our business
    and profitability.
  We have previously changed certain of our merchandising and
    real estate strategies with the goal of improving our operating
    results. We may continue to modify our strategies going forward
    and we cannot be certain that our existing or modified
    strategies will be successful in improving our store
    productivity or profitability.
  Our comparable store net sales results fluctuate
    significantly, which can cause volatility in our operating
    performance and stock price.
  Our net sales, operating income and inventory levels
    fluctuate on a seasonal basis. back-to-school back-to-school
  Our customers may not prefer our proprietary brand
    merchandise, which may negatively impact our profitability.
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     9




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##### Table of Contents



Our foreign sources of production may not always be reliable,
    which may result in a disruption in the flow of new merchandise
    to our stores.
  The loss of key personnel could have a material adverse
    effect on our business at any time.
  We operate our business from one corporate headquarters
    facility and one distribution facility which exposes us to
    significant operational risks.
  Our business depends on our ability to operate existing
    stores that achieve acceptable levels of profitability. Any
    failure to do so may negatively impact our stock price and
    operational performance.
   10     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



We have stated our intention to pursue a merchandise
    assortment planning strategy based on localization, which may
    not be successful in improving our store productivity or
    profitability.
  The continued volatility in the U.S. economy has
    adversely affected consumer spending, which could negatively
    impact our business, operating results and stock price.
    Our current or prospective vendors may be unable or unwilling
    to supply us with adequate quantities of their merchandise in a
    timely manner or at acceptable prices, which could have a
    material adverse impact on our business.
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     11




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##### Table of Contents



Consolidation in the commercial retail industry may affect
    our ability to successfully negotiate favorable rent terms for
    our stores in the future.
  Any reinvestment in our existing store base may not result in
    improved operating performance. Conversely, the lack of any
    reinvestment may cause many of our stores to appear less
    attractive to customers.
  Any material failure, interruption or security breach of our
    computer systems or information technology may adversely affect
    the operation of our business and our financial results.
  and/or and/or
  The effects of terrorism or war could significantly impact
    consumer spending and our operational performance.
   12     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



Adverse outcomes of litigation matters or failure to comply
    with federal or state regulations could significantly affect our
    operating results.
  Our inability or failure to protect our intellectual property
    or our infringement of others intellectual property could
    have a negative impact on our operating results.
  Selling merchandise over the Internet carries particular
    risks that can have a negative impact on our business. and/or
     Pacific
    Sunwear of California, Inc. Form 10-K
    2009     13




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##### Table of Contents



Our stock price can fluctuate significantly due to a variety
    of factors, which can negatively impact our total market
    value.
    We caution that the risk factors described above could cause
    actual results or outcomes to differ materially from those
    expressed in any forward-looking statements made by us or on
    behalf of the Company. Further, we cannot assess the impact of
    each such factor on our business or the extent to which any
    factor, or combination of factors, may cause actual results to
    differ materially from those contained in any forward-looking
    statements.
  ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES  Form 10-K.
  Form 10-K.
   14     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



Alabama


8Alaska


3Arizona


20Arkansas


4California


116Colorado


21Connecticut


9Delaware


4Florida


68Georgia


16Hawaii


9Idaho


5Illinois


26Indiana


18Iowa


9Kansas


7Kentucky


7Louisiana


11Maine


5Maryland


19Massachusetts


22Michigan


26Minnesota


16Mississippi


5Missouri


15Montana


4Nebraska


4Nevada


10New Hampshire


7New Jersey


24New Mexico


7New York


36North Carolina


21North Dakota


4Ohio


33Oklahoma


8Oregon


12Pennsylvania


49Rhode Island


2South Carolina


11South Dakota


2Tennessee


15Texas


69Utah


11Vermont


4Virginia


26Washington


25West Virginia


7Wisconsin


18Wyoming


2Puerto Rico


14   ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    RESERVED   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     15




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##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    Fiscal 2009


Fiscal 2008High


Low


High


Low1st Quarter

$
4.63


$
1.08


$
14.04


$
10.622nd Quarter

$
4.88


$
2.85


$
13.23


$
7.003rd Quarter

$
7.25


$
3.26


$
8.76


$
2.544th Quarter

$
6.19


$
3.15


$
3.53


$
0.72      16     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



PERFORMANCE
    GRAPH
    COMPARISION OF
    5 YEAR CUMULATIVE TOTAL
    RETURN(1)
    
  Calculated
    Returns(1)

01/29/05

01/28/06

02/03/07

02/02/08

01/31/09

1/30/10Pacific Sunwear

100

100

83

49

5

15NASDAQ Composite Index

100

112

123

118

73

106NASDAQ Retail Trade Index

100

107

103

99

61

107     Common Stock Repurchase and Retirement
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     17




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##### Table of Contents



ITEM 6. SELECTED
    FINANCIAL DATA
    Fiscal Year2009


2008


2007


2006


2005Consolidated Statement of Operations Data:Net sales

$
1,027


$
1,255


$
1,306


$
1,241


$
1,206Gross margin (after buying, distribution and occupancy costs)


259



320



414



407



453Operating (loss)/income from continuing operations


(81
)


(61
)


70



101



188(Loss)/income from continuing operations


(70
)


(39
)


46



65



120(Loss)/income from continuing operations per share, diluted

$
(1.07
)

$
(0.59
)

$
0.65


$
0.91


$
1.59Consolidated Operating Data:Comparable store net sales
    +/(-)(1)


(20.0
)%


(5.2
)%


3.4
%


(4.2
)%


3.5
%Average net sales($)/square
    foot(2)

$
275


$
339


$
350


$
347


$
370Average net sales($)/store
    (000s)(2)

$
1,062


$
1,298


$
1,334


$
1,263


$
1,369Stores open at end of period


894



932



954



965



907Capital expenditures ($ million)

$
23


$
81


$
106


$
158


$
109Consolidated Balance Sheet Data:Working capital

$
117


$
98


$
187


$
195


$
304Total assets

$
477


$
570


$
752


$
773


$
808Long-term debt

$



$



$



$



$
Shareholders
    equity(3)

$
307


$
372


$
483


$
503


$
547          18     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K. Form 10-K).
  Executive
    Overview
    Comparable (or same store) sales
  Net merchandise margins
  Operating margin
  Store sales trends
  Cash flow and liquidity (working capital)
  Critical
    Accounting Policies
     Pacific
    Sunwear of California, Inc. Form 10-K
    2009     19




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##### Table of Contents



Recognition of Revenue
  Valuation of Inventories and/or
  Store Operating Lease Accounting
  Evaluation of Long-Lived Assets
    Stock-Based Compensation Expense
   20     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



Form 10-K
  Evaluation of Income Taxes
    Results of
    Operations
    Fiscal Year2009


2008


2007Net sales


100.0
%


100.0
%


100.0
%Cost of goods sold (including buying, distribution and occupancy
    costs)


74.8



74.5



68.3Gross margin


25.2



25.5



31.7Selling, general and administrative expenses


33.1



30.4



26.4Operating (loss)/income from continuing operations


(7.9
)


(4.9
)


5.3Other income, net






0.2



0.2(Loss)/Income from continuing operations before income tax
    expense


(7.9
)


(4.7
)


5.5Income tax (benefit)/expense


(1.1
)


(1.5
)


2.1(Loss)/Income from continuing operations


(6.8
)%


(3.2
)%


3.4
%Number of stores open at end of period


894



932



954Total square footage (in 000s)


3,457



3,588



3,658    Pacific
    Sunwear of California, Inc. Form 10-K
    2009     21




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##### Table of Contents



Fiscal 2009
    Compared to Fiscal 2008
  Net
    Sales
    $millions


Attributable to$
(230
)

20% decline in comparable store net sales in fiscal 2009
    compared to fiscal 2008.  Total transactions declined 13% and
    the average sale declined 8%. Average unit retail declined 9%.(13
)

Store closures.8


Increase due to non-comparable sales from new, expanded or
    relocated stores not yet included in the comparable store base.7


Increase in net sales attributable to e-commerce.$
(228
)

Total     Gross
    Margin
    %


Attributable to(3.3
)

Deleverage of occupancy costs as a result of the 20% same-store
    sales decline for fiscal 2009. Occupancy charges as a percentage
    of net sales were 18.8% ($193 million) in fiscal 2009 compared
    to 15.5% ($194 million) in fiscal 2008.2.7


Increase in merchandise margin to 48.1% ($494 million) in fiscal
    2009 from 45.4% ($570 million) in fiscal 2008, primarily due to
    a decrease in markdown and promotional activity in 2009 compared
    to 2008.0.3


Decrease in buying and distribution costs.(0.3
)

Total     Selling, General
    and Administrative Expenses
     22     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



%


Attributable to1.6


Increase in store payroll and payroll-related expenses as a
    percentage of net sales, due to the deleveraging of these
    expenses against the 20% same store sales decline in fiscal
    2009. In dollars, payroll expense decreased $21 million.0.9


Increase in depreciation expense as a percentage of sales,
    primarily due to the deleveraging of these expenses against the
    20% same store sales decline in fiscal 2009. Total SG&A
    depreciation was $68 million in fiscal 2009 compared to $72
    million in fiscal 2008.(0.1
)

Decrease in asset impairment charges in the current year to $27
    million compared to $35 million in fiscal 2008.0.3


Increase in all other SG&A expenses as a percentage of
    sales.2.7


Total     Other
    (Expense)/Income, net
    Income
    Taxes
  Form 10-K,
  Net Loss and Net
    Loss per Share
    About
    Non-GAAP Financial Measures
     Pacific
    Sunwear of California, Inc. Form 10-K
    2009     23




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##### Table of Contents



Fiscal 2008
    Compared to Fiscal 2007
  Net
    Sales
    $millions


Attributable to$
(63
)

5% decline in comparable store net sales in fiscal 2008 compared
    to fiscal 2007. The average sale transaction declined 9%,
    partially offset by a 4% increase in total transactions. For
    fiscal 2008, comparable store net sales declined 1% in the first
    half and 9% in the second half. The larger decline in the second
    half of the year was consistent with the overall economic
    downturn.(28
)

Store closures.26


Increase due to non-comparable sales from new, expanded or
    relocated stores not yet included in the comparable store base.14


Increase in net sales attributable to e-commerce.$
(51
)

Total     Gross
    Margin
     24     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



%


Attributable to(4.7
)

Decline in merchandise margin to 45.4% in fiscal 2008 from 50.1%
    in fiscal 2007, or $85 million, due to increased markdowns and
    promotional activity associated with the precipitous decline in
    consumer spending and the overall economic environment,
    particularly in the latter half of fiscal 2008.(1.4
)

Increase in occupancy charges as a percentage of net sales to
    15.5% ($194 million) in fiscal 2008 from 14.1% ($184 million) in
    fiscal 2007. Deleverage of occupancy costs as a result of the 5%
    same-store sales decline in fiscal 2008.(0.1
)

Increase in other costs.(6.2
)

Total     Selling, General
    and Administrative Expenses
    %


Attributable to2.3


Increase in asset impairment charges, including a $15 million
    increase in store impairments, $8 million related to the
    materials handling equipment in the Companys former
    Anaheim distribution center, and $6 million related to the
    impairment of goodwill.0.7


Increase in payroll and payroll-related expenses ($2 million)
    due to deleveraging these expenses against the (5%) decline in
    same-store sales results. In dollars, store payroll expenses
    were down approximately $1 million.0.5


Increase in depreciation expense ($4 million), primarily due to
    the impact of accelerated depreciation associated with store
    closures and relocations, and new depreciation on existing
    stores from our refresh program.0.5


Increase in other SG&A expenses.4.0


Total   Goodwill
    Impairment
    Other
    (Expense)/Income, net
     Pacific
    Sunwear of California, Inc. Form 10-K
    2009     25




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##### Table of Contents



Income
    Taxes
    Liquidity and
    Capital Resources
    Fiscal Year Ended

January 30,

January 31,

February 2,(In thousands)

2010

2009

2008Net cash provided by operating activities

$87,451

$33,915

$115,641Net cash used in investing activities

(19,759)

(55,659)

(98,163)Net cash provided by/(used in) financing activities

623

(51,067)

27,842NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

$68,315

$(72,811)

$45,320   Operating Cash
    Flows
       26     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



Working
    Capital
    $millions

Description$98

Working capital at January 31, 200968

Increase in cash and cash equivalents, primarily due to the
    collection of income taxes receivable of approximately $54
    million, and a reduction in inventory purchases among other
    items (see cash flows statement).(43)

Net decrease in other current assets primarily related to
    decreases in income taxes receivable of $29 million and prepaids
    of $15 million.(11)

Decrease in inventories, net of accounts payable, primarily as a
    result of our efforts during fiscal 2009 to reduce overall
    inventory levels in response to the current economic environment
    and sales performance.5

Net decrease in other current liabilities.$117

Working capital at January 30, 2010   Investing Cash
    Flows
    Financing Cash
    Flows
    Credit
    Facility
  Form 10-K,
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     27




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##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodContractual Obligations



Less than

1-3

3-5

More than(In $millions)

Total

1 year

years

years

5 yearsOperating lease obligations

$484

$93

$155

$115

$121Capital lease obligations

<1

<1

<1



ASC 740 (FIN 48) obligations including interest and
    penalties

1



1



Letters of credit

9

9





Total

$495

$102

$157

$115

$121       Operating Leases Form 10-K).
       28     Pacific
    Sunwear of California, Inc. Form 10-K 2009




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##### Table of Contents



Indemnifications
      Off-Balance Sheet
    Arrangements
    Recent Accounting
    Pronouncements
  Form 10-K,
  Inflation
    Seasonality and
    Quarterly Results
  back-to-school
  ITEM 7A. QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Form 10-K).
     Pacific
    Sunwear of California, Inc. Form 10-K
    2009     29




---



##### Table of Contents



ITEM 8. FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA    ITEM 9.
    CHANGES
    IN, AND DISAGREEMENTS WITH, ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A. CONTROLS
    AND PROCEDURES  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
  Rule 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f). Internal Control 
    Integrated Framework Internal
    Control  Integrated Framework
  Form 10-K,
    Changes in
    Internal Control Over Financial Reporting
     30     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Internal Control 
    Integrated Framework Managements Report on
    Internal Control over Financial Reporting
        Internal Control  Integrated Framework
         Pacific
    Sunwear of California, Inc. Form 10-K
    2009     31




---



##### Table of Contents



ITEM 9B. OTHER
    INFORMATION   PART III ITEM 10. DIRECTORS,
    EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE  Form 10-K.
 ITEM 11. EXECUTIVE
    COMPENSATION  Form 10-K.
  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Form 10-K.
 ITEM 13. CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE  Form 10-K.
 ITEM 14. PRINCIPAL
    ACCOUNTING FEES AND SERVICES  Form 10-K.
 PART IV ITEM 15. EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES  (a) 1.
    The financial statements listed in the Index to
    Consolidated Financial Statements at
    page F-1
    are filed as a part of this report.  2.
    Financial statement schedules are omitted because they are not
    applicable or the required information is shown in the
    consolidated financial statements or notes thereto.     32     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



SIGNATURES      By:
    /s/  Gary
    H. Schoenfeld     Date: March 31, 2010
    Signature

Title

Date/s/  Gary
    H. SchoenfeldGary
    H. Schoenfeld

President, Chief Executive Officer and Director
    (Principal Executive Officer)

March 31, 2010/s/  Michael
    L. HenryMichael
    L. Henry

Senior Vice President, Chief Financial Officer and Secretary
    (Principal Financial and Accounting Officer)

March 31, 2010/s/  Peter
    StarrettPeter
    Starrett

Non-Employee Chairman of the Board

March 31, 2010/s/  Brett
    BrewerBrett
    Brewer

Non-Employee Director

March 31, 2010/s/  William
    C. CobbWilliam
    C. Cobb

Non-Employee Director

March 31, 2010/s/  Pearson
    C. Cummin IIIPearson
    C. Cummin III

Non-Employee Director

March 31, 2010/s/  Michael
    GoldsteinMichael
    Goldstein

Non-Employee Director

March 31, 2010/s/  George
    R. MrkonicGeorge
    R. Mrkonic

Non-Employee Director

March 31, 2010/s/  Thomas
    M. MurnaneThomas
    M. Murnane

Non-Employee Director

March 31, 2010/s/  Grace
    NicholsGrace
    Nichols

Non-Employee Director

March 31, 2010    Pacific
    Sunwear of California, Inc. Form 10-K
    2009     33




---



##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  CONSOLIDATED
    FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED:
  JANUARY 30, 2010 (Fiscal
    2009)
 JANUARY 31, 2009 (Fiscal
    2008)
 FEBRUARY 2, 2008 (Fiscal
    2007)
  Report of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets as of
    January 30, 2010 and January 31, 2009


F-3Consolidated Statements of Operations and
    Comprehensive Operations for each of the three fiscal years in
    the period ended January 30, 2010


F-4Consolidated Statements of Shareholders
    Equity for each of the three fiscal years in the period ended
    January 30, 2010


F-5Consolidated Statements of Cash Flows for each of
    the three fiscal years in the period ended January 30,
    2010


F-6Notes to Consolidated Financial Statements


F-7    Pacific
    Sunwear of California, Inc. Form 10-K
    2009     F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            Internal Control  Integrated Framework
       F-2     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
 CONSOLIDATED
    BALANCE SHEETS  January 30,


January 31,(In thousands, except share and per share amounts)

2010


2009ASSETSCURRENT ASSETS:Cash and cash equivalents

$
93,091


$
24,776Merchandise inventories


89,665



107,205Other current assets


16,166



58,943Total current assets


198,922



190,924PROPERTY AND EQUIPMENT, NET:Gross property and equipment


641,127



665,236Less: Accumulated depreciation and amortization


(392,127
)


(341,892
)Total property and equipment, net


249,000



323,344Assets held for sale






3,682Deferred income taxes


4,024



21,984Other assets


25,272



29,575TOTAL ASSETS

$
477,218


$
569,509LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable

$
38,481


$
45,263Other current liabilities


43,742



47,564Total current liabilities


82,223



92,827LONG-TERM LIABILITIES:Deferred lease incentives


39,207



52,313Deferred rent


21,396



23,008Other long-term liabilities


27,714



29,374Total long-term liabilities


88,317



104,695Commitments and contingencies (Note 12)SHAREHOLDERS EQUITY:Preferred stock, $.01 par value; 5,000,000 shares
    authorized; none issued






Common stock, $.01 par value; 170,859,375 shares
    authorized; 65,748,069 and 65,174,144 shares issued and
    outstanding, respectively


657



652Additional paid-in capital


7,294



2,306Retained earnings


298,727



369,029Total shareholders equity


306,678



371,987TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

$
477,218


$
569,509   See notes to consolidated
    financial statements.
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     F-3




---



##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
 CONSOLIDATED
    STATEMENTS OF OPERATIONS AND COMPREHENSIVE OPERATIONS  (In thousands, except share and per share amounts)

January 30,


January 31,


February 2,FISCAL YEAR ENDED

2010


2009


2008Net sales

$
1,027,101


$
1,254,886


$
1,306,028Cost of goods sold, including buying, distribution and occupancy
    costs


768,498



934,779



892,102Gross margin


258,603



320,107



413,926Selling, general and administrative expenses


339,728



381,008



344,295Operating (loss)/income from continuing operations


(81,125
)


(60,901
)


69,631Other (expense)/income, net


(276
)


2,369



3,012(Loss)/income from continuing operations before income tax
    (benefit)/expense


(81,401
)


(58,532
)


72,643Income tax (benefit)/expense


(11,099
)


(19,287
)


26,836(Loss)/income from continuing operations


(70,302
)


(39,245
)


45,807Loss from discontinued operations, net of tax effects






(24,577
)


(76,174
)Net loss

$
(70,302
)

$
(63,822
)

$
(30,367
)Comprehensive loss

$
(70,302
)

$
(63,822
)

$
(30,367
)(Loss)/income from continuing operations per share:Basic

$
(1.07
)

$
(0.59
)

$
0.66Diluted

$
(1.07
)

$
(0.59
)

$
0.65Net loss per share:Basic

$
(1.07
)

$
(0.96
)

$
(0.44
)Diluted

$
(1.07
)

$
(0.96
)

$
(0.44
)Weighted average shares outstanding:Basic


65,442,887



66,652,088



69,749,536Diluted


65,442,887



66,652,088



70,020,500   See notes to consolidated
    financial statements.
   F-4     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
 CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY  Common





AdditionalStock


Common


Paid-in


Retained(In thousands, except share amounts)

Shares


Stock


Capital


Earnings


TotalBALANCE, February 3, 2007


69,560,077


$
696


$
5,783


$
496,874


$
503,353Employee stock plans


466,433



4



4,291







4,295Stock-based compensation










6,398







6,398Tax benefits related to exercise of stock options










289







289FIN 48 adoption adjustment (see Note 10)














(623
)


(623
)Net loss














(30,367
)


(30,367
)BALANCE, February 2, 2008


70,026,510


$
700


$
16,761


$
465,884


$
483,345Repurchase and retirement of common stock


(5,347,544
)


(53
)


(52,858
)






(52,911
)Employee stock plans


495,178



5



1,799







1,804Stock-based compensation










5,167







5,167Tax benefit deficiencies related to exercise of stock options










(1,596
)






(1,596
)Reclassify negative additional paid-in capital to retained
    earnings(1)










33,033



(33,033
)


Net loss














(63,822
)


(63,822
)BALANCE, January 31, 2009


65,174,144


$
652


$
2,306


$
369,029


$
371,987Employee stock plans


573,925



5



662







667Stock-based compensation










6,370







6,370Tax benefit deficiencies related to exercise of stock options










(2,044
)






(2,044
)Net loss














(70,302
)


(70,302
)BALANCE, January 30, 2010


65,748,069


$
657


$
7,294


$
298,727


$
306,678     See notes to consolidated
    financial statements.
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     F-5




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##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  (In thousands)

January 30,


January 31,


February 2,FISCAL YEAR ENDED

2010


2009


2008CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(70,302
)

$
(63,822
)

$
(30,367
)Adjustments to reconcile net loss to net cash provided by
    operating activities:Depreciation and amortization


70,367



76,433



80,323Asset impairment (including goodwill)


27,012



35,348



59,829Stock compensation


6,370



5,167



6,398Loss on disposal of equipment


968



4,668



4,507Gain on sale of Anaheim distribution center






(10,768
)


(Tax benefit deficiencies)/tax benefits related to stock-based
    compensation


(2,044
)


(1,596
)


289Excess tax benefits related to stock-based compensation






(5
)


(292
)Change in operating assets and liabilities:Merchandise inventories


17,540



62,977



35,031Other current assets


43,043



(6,125
)


(6,563
)Other assets


22,680



(2,738
)


(14,891
)Accounts payable


(6,782
)


(17,086
)


(4,232
)Other current liabilities


(4,413
)


(17,887
)


3,552Deferred lease incentives


(13,106
)


(21,699
)


(15,359
)Deferred rent


(1,612
)


(4,661
)


(2,950
)Other long-term liabilities


(2,270
)


(4,291
)


366Net cash provided by operating activities


87,451



33,915



115,641CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment


(23,498
)


(80,934
)


(106,363
)Proceeds from sale of property and equipment


3,739



275



Proceeds from sale of Anaheim distribution center






25,000



Purchases of
    available-for-sale
    short-term investments










(171,400
)Maturities of
    available-for-sale
    short-term investments










202,900Purchases of
    held-to-maturity
    short-term investments (Note 7)










(23,300
)Net cash used in investing activities


(19,759
)


(55,659
)


(98,163
)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from employee stock purchase plan and exercise of stock
    options


727



1,850



4,295Principal payments under capital lease and long-term debt
    obligations


(104
)


(11
)


(45
)Borrowings under long-term debt obligations (Note 7)










23,300Borrowings under credit facility






235,689



Principle payments under credit facility






(235,689
)


Repurchase and retirement of common stock






(52,911
)


Excess tax benefits related to stock-based compensation






5



292Net cash provided by/(used in) financing activities


623



(51,067
)


27,842NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS


68,315



(72,811
)


45,320CASH AND CASH EQUIVALENTS, beginning of fiscal year


24,776



97,587



52,267CASH AND CASH EQUIVALENTS, end of fiscal year

$
93,091


$
24,776


$
97,587SUPPLEMENTAL DISCLOSURES OF CASH
    FLOW INFORMATION:Cash paid for interest

$
3


$
601


$
6Cash (refunded)/paid for income taxes

$
(54,072
)

$
(14,937
)

$
10,668SUPPLEMENTAL DISCLOSURES OF
    NON-CASH TRANSACTIONS:Increase/(decrease) in accrued property and equipment

$
65


$
(5,707
)

$
(6,358
)Purchases of property pursuant to capital lease obligations

$
730


$
20



11   See notes to consolidated
    financial statements.
   F-6     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (all amounts in thousands, except share and per share amounts,
    unless otherwise indicated)  1.
    NATURE OF
    BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES  Nature of Business e-commerce
      Fiscal Year

Year-End Date


# of Weeks2010


January 29, 2011


522009


January 30, 2010


522008


January 31, 2009


522007


February 2, 2008


52
   Principles of Consolidation
  Basis of Presentation
  Use of Estimates
  Fair Value of Financial Instruments
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     F-7




---



##### Table of Contents



Cash and Cash Equivalents
  Merchandise Inventories and/or
  Property and Equipment
  Property Category

Depreciation TermBuildings

39 yearsBuilding improvements

Lesser of remaining estimated useful life of the building or
    estimated useful life of the improvementLeasehold improvements

Lesser of remaining lease term (at inception, generally
    10 years) or estimated useful life of the improvementFurniture, fixtures and equipment

Generally 5 years (ranging from 3 to 15 years),
    depending on the nature of the asset   Other Long-Lived Assets
  Income Taxes
     F-8     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



Insurance Reserves
  Revenue Recognition
  Fiscal Year(in $000s)

2009


2008


2007Beginning balance

$
436


$
722


$
794Provisions


20,440



24,144



25,667Usage


(20,365
)


(24,430
)


(25,739
)Ending balance

$
511


$
436


$
722   E-commerce
    Shipping and Handling Revenues and Expenses
  Customer Loyalty Programs dollar-for-dollar
  Cost of Goods Sold, including Buying, Distribution and
    Occupancy Costs
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     F-9




---



##### Table of Contents



Vendor Allowances
  Straight-Line Rent
  Deferred Lease Incentives
  Selling, General and Administrative Expenses
  Advertising Costs
  Stock-Based Compensation
  Fiscal Year(in $000s)

2009


2008


2007Stock-based compensation expense included in cost of goods sold

$
4,024


$
1,972


$
2,335Stock-based compensation expense included in selling, general
    and administrative expenses


2,346



3,351



3,416Total stock-based compensation expense

$
6,370


$
5,323


$
5,751   Earnings Per Share
  Fiscal Year2009


2008


2007Incremental shares










270,964Anti-dilutive options and non-vested shares


2,311,974



2,564,554



2,308,227     Vendor and Merchandise Concentrations
   F-10     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



Fiscal Year2009


2008


2007Young Mens Apparel


45%



41%



38%Juniors Apparel


43%



42%



33%Accessories and Footwear


12%



17%



29%Total


100%



100%



100%   Recent Accounting Pronouncements
  2010-06,
  2010-09,
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     F-11




---



##### Table of Contents



2.
    OTHER CURRENT
    ASSETS    January 30,


January 31,2010


2009Prepaid expenses

$
10,801


$
25,573Non-trade accounts receivable


3,749



3,119Income taxes receivable


1,616



30,251Total other current assets

$
16,166


$
58,943   3.
    PROPERTY AND
    EQUIPMENT, NET    January 30,


January 31,2010


2009Leasehold improvements

$
302,339


$
325,540Furniture, fixtures and equipment


287,223



288,634Buildings and building improvements


40,338



39,835Land


11,227



11,227Total gross property and equipment


641,127



665,236Less accumulated depreciation


(392,127
)


(341,892
)Property and equipment, net

$
249,000


$
323,344   4.
    IMPAIRMENT OF
    LONG-LIVED ASSETS  Store Assets
  Goodwill
  5.
    ASSETS HELD FOR
    SALE    6.
    FAIR VALUE
    MEASUREMENTS     F-12     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents




    Level 1:  Quoted market prices in active
    markets for identical assets or liabilities
    Level 2:  Observable market based inputs
    that are corroborated by market data
    Level 3:  Unobservable inputs that are not
    corroborated by market data    Fair Value Measurements at January 30, 2010Quoted Prices

Significantin Active

Other

SignificantMarkets for

Observable

UnobservableIdentical Assets

Inputs

InputsTotal

(Level 1)

(Level 2)

(Level 3)Long-lived assets held and used

$
249


$



$



$
249     7.
    INDUSTRIAL
    REVENUE BOND TRANSACTION  OLATHE, KANSAS    10-year
  8.
    CREDIT
    FACILITY     Pacific
    Sunwear of California, Inc. Form 10-K
    2009     F-13




---



##### Table of Contents



9.
    OTHER CURRENT
    LIABILITIES    January 30,


January 31,2010


2009Accrued gift cards

$
12,617


$
12,134Accrued compensation and benefits


12,362



13,584Sales taxes payable


4,444



5,177Accrued capital expenditures


1,802



1,737Deferred taxes






1,218Other current liabilities


12,517



13,714Total other current liabilities

$
43,742


$
47,564   10.
    INCOME
    TAXES    2009


2008


2007Current income taxes:Federal

$
(28,665
)

$
(34,309
)

$
24,035State


824



(254
)


5,663Total current


(27,841
)


(34,563
)


29,698Deferred income taxes:Federal


10,566



13,554



170State


6,176



1,722



(3,032
)Total deferred


16,742



15,276



(2,862
)Total income tax (benefit)/expense

$
(11,099
)

$
(19,287
)

$
26,836    F-14     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



2009


2008


2007(Benefit)/provision for income taxes at statutory rate

$
(28,490
)

$
(20,486
)

$
25,425State income taxes,net of federal income tax benefit


(2,238
)


(775
)


1,240Valuation allowance


20,129



1,727



Life insurance proceeds










(1,215
)Other


(500
)


247



1,386Total income tax (benefit)/expense

$
(11,099
)

$
(19,287
)

$
26,836     January 30,


January 31,2010


2009Current net deferred tax asset/(liability)

$
2,348


$
(1,218
)Long-term net deferred tax asset


28,289



24,64130,637



23,423Valuation allowance


(26,613
)


(2,657
)Overall net deferred tax asset

$
4,024


$
20,766Deferred tax assets:Net operating loss and tax credit carryforwards

$
31,207


$
40,770Deferred lease incentives


16,445



21,937Deferred rent


7,413



7,318Deferred and stock-based compensation


2,425



3,562Inventory cost capitalization


2,582



2,450Sublease loss reserves


195



268Other


2,362



1,93262,629



78,237Deferred tax liabilities:Depreciation and amortization

$
(28,085
)

$
(45,726
)Prepaid expenses


(2,500
)


(5,519
)State income taxes


(1,407
)


(3,569
)(31,992
)


(54,814
)Net deferred taxes before valuation allowance


30,637



23,423Less valuation allowance


(26,613
)


(2,657
)$
4,024


$
20,766   Form 10-K Form 10-Q
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     F-15




---



##### Table of Contents



January 30,


January 31,


February 2,2010


2009


2008Unrecognized tax benefits, opening balance

$
1,199


$
1,652


$
2,444Gross increases  tax positions in prior period


44



78



295Gross decreases  tax positions in prior period


(270
)


(432
)


(542
)Gross increases  tax positions in current period






1



1Lapse of statute of limitations


(134
)


(100
)


(546
)Unrecognized tax benefits, ending balance

$
839


$
1,199


$
1,652        F-16     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



11.
    STOCK
    COMPENSATION      Fiscal Year2009

2008

2007Stock Options

ESPP

Stock Options

ESPP

Stock Options

ESPPExpected Option Life

4 years

0.5 years

4 years

0.5 years

4 years

0.5 yearsExpected Stock Volatility

69.4% - 78.3%

97.2% -130.0%

40.3% - 63.5%

45.4% - 57.0%

34.7% - 37.9%

31.9% - 45.4%Risk-free Interest Rates

1.5% - 2.0%

.33% - .48%

1.2% - 3.0%

2.1% - 3.2%

3.1% - 4.9%

3.2% - 5.0%Expected Dividends

None

None

None

None

None

None   Stock Options
         Pacific
    Sunwear of California, Inc. Form 10-K
    2009     F-17




---



##### Table of Contents



Weighted-Weighted-

Average

AggregateAverage

Remaining

IntrinsicExercise

Contractual

ValueStock Options

Shares


Price

Term (Yrs.)

($000s)Outstanding at January 31, 2009


2,219,248


$
18.57Granted


2,716,150



3.05Exercised






0.00Forfeited or expired


(1,151,670
)


11.65Outstanding at January 30, 2010


3,783,728


$
9.54

4.78

$1,143Vested and expected to vest at January 30, 2010


2,801,002


$
11.52

4.21

$750Exercisable at January 30, 2010


1,181,556


$
19.32

2.30

$7     Options Outstanding

Options ExercisableWeighted

Weighted



WeightedAverage

Average



AverageNumber

Remaining

Exercise

Number

ExerciseRange of Exercise
    Prices

Outstanding

Contractual Life

Price

Exercisable

Price$ 1.20  $ 3.98

2,205,800

6.51

$
3.27

3,000

$
1.203.98   7.26

11,953

1.27


7.26

11,953


7.267.26   9.49

121,965

3.49


8.99

76,590


8.889.49  12.69

66,790

2.19


12.09

66,790


12.0912.69  18.67

425,332

2.29


13.66

212,274


13.9718.67  23.98

686,892

2.21


20.65

546,087


20.8923.98  28.90

264,996

2.36


25.96

264,862


25.96$ 1.20  $28.90

3,783,728

4.78

$
9.54

1,181,556

$
19.32   Non-vested Shares
  Weighted-AverageGrant-DateNon-vested Shares

Shares


Fair ValueOutstanding at January 31, 2009


577,971


$
15.85Granted


304,506



2.48Vested


(214,692
)


13.02Forfeited or expired


(186,245
)


11.79Outstanding at January 30, 2010


481,540


$
10.23    F-18     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



Non-vested Share Units
  Weighted-Average


AggregateRemaining


IntrinsicContractual


ValueNon-vested Share Units

Shares


Term (Yrs.)


($000s)Outstanding at January 31, 2009


100,000Granted


186,480Released


Forfeited


Outstanding at January 30, 2010


286,480



0.33


$
1,008Vested and expected to vest at January 30, 2010


271,226



0.21


$
955Exercisable at January 30, 2010






0.00


$
     Employee Stock Purchase Plan
    (ESPP)
  12.
    COMMITMENTS AND
    CONTINGENCIES  Operating Leases
   Pacific
    Sunwear of California, Inc. Form 10-K
    2009     F-19




---



##### Table of Contents



Fiscal year ending:January 29, 2011

$
92,995February 3, 2012


83,149February 2, 2013


71,781February 2, 2014


61,547January 31, 2015


53,695Thereafter


121,013Total future operating lease commitments

$
484,180     Litigation
  Indemnities, Commitments, and Guarantees
  Letters of Credit
  13.
    RETIREMENT
    PLANS       F-20     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



14.
    SEGMENT
    REPORTING    15.
    DISCONTINUED
    OPERATIONS      Lease


EmployeeTermination


Retention and


AgencyCosts


Severance Costs


Fees


TotalLiability at February 2,
    2008(1)

$
4.0


$
3.4


$



$
7.4Cash payments


(47.8
)


(6.0
)


(4.0
)


(57.8
)Charges to expense


45.7



2.8



4.0



52.5Adjustments to
    liability(2)


(1.9
)


(0.2
)






(2.1
)Liability at January 31, 2009

$



$



$



$
           (In thousands, except per share amounts)

January 30,


January 31,


February 2,Fiscal Year Ended

2010


2009


2008Net sales

$



$
27,051


$
153,697Loss before income tax benefit

$



$
(40,683
)

$
(125,512
)Income tax benefit

$



$
(16,106
)

$
(49,338
)Loss from discontinued operations

$



$
(24,577
)

$
(76,174
)Loss from discontinued operations per diluted share

$



$
(0.37
)

$
(1.09
)    Pacific
    Sunwear of California, Inc. Form 10-K
    2009     F-21




---



##### Table of Contents



16.
    QUARTERLY
    FINANCIAL DATA (UNAUDITED)    First


Second


Third


FourthFISCAL YEAR ENDED JANUARY 30, 2010:

Quarter


Quarter


Quarter


QuarterNet sales

$
223,465


$
242,794


$
268,280


$
292,562Gross margin


61,274



57,708



73,441



66,180Operating loss


(8,743
)


(14,155
)


(10,905
)


(36,499
)Net loss


(8,743
)


(14,155
)


(10,905
)


(36,499
)Loss per share


(0.13
)


(0.22
)


(0.17
)


(0.56
)Weighted average shares outstanding


65,207,991



65,370,465



65,563,721



65,629,371FISCAL YEAR ENDED JANUARY 31,
    2009:Net sales

$
266,867


$
312,726


$
323,612


$
351,681Gross margin


75,465



95,258



92,776



56,608(Loss)/income from continuing operations


(11,969
)


3,708



(3,520
)


(27,464
)Net (loss)/income


(37,102
)


2,796



(2,474
)


(27,042
)(Loss)/income from continuing operations per share, diluted


(0.17
)


0.06



(0.05
)


(0.42
)Net (loss)/income per share, diluted


(0.53
)


0.04



(0.04
)


(0.42
)Weighted average shares outstanding, diluted


69,915,802



66,704,159



64,968,707



65,059,597      F-22     Pacific
    Sunwear of California, Inc. Form 10-K 2009




---



##### Table of Contents



INDEX TO
    EXHIBITS
  Incorporated by ReferenceExhibit #

Exhibit Description

Form

Filing Date3
.1

Third Amended and Restated Articles of Incorporation of the
    Company


10-Q



8/31/043
.2

Certificate of Determination of Preferences of Series A
    Junior Participating Preferred Stock of the Company


8-K



12/24/983
.3

Fifth Amended and Restated Bylaws of the Company


8-K



4/3/094
.1

Specimen stock certificate


S-1



2/4/9310
.1*

Form of Indemnity Agreement between the Company and each of its
    executive officers and directors


S-1



2/4/9310
.2*

Pacific Sunwear of California, Inc. Executive Deferred
    Compensation Plan and Trust Agreement


10-K



3/17/9510
.3*

Pacific Sunwear of California, Inc. Executive Deferred
    Compensation Plan, as amended and restated effective
    May 30, 2001


10-K



4/1/0910
.4*

Pacific Sunwear of California, Inc. Executive Deferred
    Compensation Plan, as amended and restated effective
    December 31, 2008 (subject to section 409A deferrals)


10-K



4/1/0910
.5*

Amended and Restated Pacific Sunwear of California, Inc. 1999
    Stock Award Plan dated March 24, 2004


10-Q



5/21/0410
.6*

Pacific Sunwear of California, Inc. 2005 Performance Incentive
    Plan


8-K



5/24/0510
.7*

Amended and Restated Pacific Sunwear of California, Inc.
    Employee Stock Purchase Plan dated November 17, 2004


10-Q



12/9/0410
.8*

Form of Performance-Based Bonus Award Agreement


10-Q



12/9/0410
.9*

Form of Notice of Director Stock Appreciation Right Award
    Agreement


8-K



5/23/0610
.10*

Form of Notice of Employee Stock Appreciation Right Award
    Agreement


8-K



5/23/0610
.11*

Form of Notice of Employee Restricted Stock Award Agreement


8-K



5/23/0610
.12*

Pacific Sunwear of California, Inc. Executive Severance Plan, as
    amended and restated as of November 20, 2008


10-K



4/1/0910
.13*

Employment Agreement, dated April 1, 2005 between the
    Company and Thomas M. Kennedy


10-K



4/12/0510
.14*

Amendment No. 1, dated December 14, 2006, to the
    Employment Agreement between the Company and Thomas M. Kennedy


8-K



12/18/0610
.15*

Amendment No. 2, dated September 28, 2007, to the
    Employment Agreement between the Company and Thomas M. Kennedy


10-Q



12/3/0710
.16*

Employment Separation and General Release Agreement between the
    Company and Thomas M. Kennedy, dated as of December 12, 2008


8-K



12/15/0810
.17*

Employment Agreement, dated as of May 22, 2007, between the
    Company and Sally Frame Kasaks


8-K



5/23/0710
.18*

Amendment No. 1, effective December 31, 2008, to the
    Employment Agreement and Restricted Stock Unit Award Agreement
    between the Company and Sally Frame Kasaks


10-K



4/1/0910
.19*

Form of Stock Appreciation Rights Agreement between the Company
    and Sally Frame Kasaks


8-K



5/23/0710
.20*

Form of Restricted Stock Unit Award Agreement between the
    Company and Sally Frame Kasaks


8-K



5/23/0710
.21*

Employment Agreement, dated as of June 16, 2009, between
    the Company and Gary H. Schoenfeld


8-K



6/17/0910
.22*

Letter Agreement, dated as of June 16, 2009 between the
    Company and Sally Frame Kasaks


8-K



6/17/0910
.23*+

Summary of Board of Directors Compensation for fiscal 201010
.24*+

Summary of Named Executive Officers Annual Compensation for
    fiscal 2010




---



##### Table of Contents



Incorporated by ReferenceExhibit #

Exhibit Description

Form

Filing Date10
.25

Credit Agreement, dated as of April 29, 2008, with JPMorgan
    Chase Bank, N.A., as Administrative Agent, Bank of America,
    N.A., as Syndication Agent, BB&T Company, U.S. Bank
    National Association and Wells Fargo Foothill, Inc., as
    Co-Documentation Agents, and J.P. Morgan Securities Inc.
    and Banc of America Securities LLC, as Joint Bookrunners and
    Joint Lead Arrangers, and a syndicate of other lenders


8-K



5/2/0810
.26

Security Agreement, dated as of April 29, 2008, by the
    Company, Pacific Sunwear Stores Corp., Miraloma Corp., and
    certain future subsidiaries of the Company, and JPMorgan Chase
    Bank, N.A., as Administrative Agent


8-K



5/2/0810
.27

First Amendment to Credit Agreement, dated as of August 1,
    2008, with JPMorgan Chase Bank, N.A., as Administrative Agent,
    and a syndicate of other lenders


10-Q



8/29/0810
.28

Trust Indenture, dated as of July 17, 2007, between
    the City of Olathe, Kansas and U.S. Bank National Association,
    as Trustee


8-K



7/23/0710
.29

Lease Agreement, dated as of July 17, 2007, between the
    City of Olathe, Kansas and Pacific Sunwear Stores Corp.


8-K



7/23/0721
.1+

Subsidiaries of the Registrant23
.1+

Consent of Independent Registered Public Accounting Firm31
.1+

Written statements of Gary H. Schoenfeld and Michael L. Henry
    pursuant to section 302 of the Sarbanes-Oxley Act of 200232
.1+

Written statement of Gary H. Schoenfeld and Michael L. Henry
    pursuant to section 906 of the Sarbanes-Oxley Act of 2002