PACIFIC SUNWEAR OF CALIFORNIA, INC. EXECUTIVE DEFERRED COMPENSATION PLAN

Exhibit 10.3

PACIFIC SUNWEAR OF CALIFORNIA, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN

(As Amended and Restated May 30, 2001)

(This Version of the Plan Applies to Deferred Compensation Amounts that are Grandfathered for
Purposes of Section 409A of the Code)

TABLE OF CONTENTS

TABLE OF CONTENTS
(continued)

PACIFIC SUNWEAR OF CALIFORNIA, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

(As Amended and Restated May 30, 2001) ¹

     WHEREAS, Pacific Sunwear of California, Inc. (the “Corporation”) maintains the Pacific Sunwear of California, Inc. Executive Deferred Compensation Plan (the “Plan”) to provide supplemental retirement income benefits for a select group of management and highly compensated employees through deferrals of salary and bonuses and through the Corporation’s contributions;

     WHEREAS, the Plan was established effective as of March 1, 1995; and

     WHEREAS, it is believed that the amendment and restatement of the Plan is advisable and in the best interests of the Corporation;

     RESOLVED, that the Plan be, and it hereby is, amended and restated in its entirety this 30th day of May, 2001, as follows:

ARTICLE I

TITLE AND DEFINITIONS

1.1 — Title .

     The Plan shall be known as the Pacific Sunwear of California, Inc. Executive Deferred Compensation Plan.

1.2 — Definitions .

     Whenever the following words and phrases are used in the Plan, with the first letter capitalized, they shall have the meanings specified below.

     “Account” or “Accounts” shall mean a Participant’s Deferral Account and/or Company Contribution Account.

     “Beneficiary” or “Beneficiaries” shall mean the person or persons, including a trustee, personal representative or other fiduciary, last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder in the event of the Participant’s death. No beneficiary designation shall become effective until it is filed with the Committee. If there is no Beneficiary designation in effect, or if there is no surviving designated Beneficiary, then the Participant’s surviving spouse shall be the Beneficiary. If there is no surviving spouse to receive any benefits payable in accordance with the preceding sentence, the duly appointed and currently acting personal representative of the participant’s estate (which shall include either the Participant’s probate estate or living trust) shall be the Beneficiary. In any case where there is no such personal representative of the Participant’s estate duly appointed and acting in that capacity within 90 days after the Participant’s death (or such extended period as the Committee determines is reasonably necessary to allow such personal representative to be appointed, but not to exceed 180 days after the Participant’s death), then

Beneficiary shall mean the person or persons who can verify by affidavit or court order to the satisfaction of the Committee that they are legally entitled to receive the benefits specified hereunder. In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead be paid (a) to that person’s living parent(s) to act as custodian, (b) if that person’s parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or (c) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.

     “Board of Directors” or “Board” shall mean the Board of Directors of the Corporation.

     “Bonus” shall mean any cash incentive compensation earned by a Participant from the Company in addition to the Participant’s Salary. For Plan Years beginning on or before January 19, 1999, “Bonus” shall be determined after reduction for salary deferral contributions to any plans qualified under Section 401(k) or 125 of the Code.

     “Change of Control” shall mean:

     (i) Approval by the shareholders of the Corporation of the dissolution or liquidation of the Corporation;

     (ii) Approval by the shareholders of the Corporation of an agreement to merge or consolidate, or otherwise reorganize, with or into one or more entities other than Subsidiaries, as a

result of which less than 50% of the outstanding voting securities of the surviving or resulting entity are, or are to be, owned by former shareholders of the Corporation; or

     (iii) Approval by the shareholders of the Corporation of the sale of substantially all of the Corporation’s business assets to a person or entity which is not a Subsidiary.

     “Code” shall mean the Internal Revenue Code of 1986, as amended.

     “Committee” shall mean the Committee appointed by the Board to administer the Plan in accordance with Article IX.

     “Company” shall mean the Corporation and each corporation which is a member of a controlled group of corporations (within the meaning of Section 414(b) of the Code) of which the Corporation is a component member.

     “Company Contribution Account” shall mean the bookkeeping account maintained by the Committee for each Participant that is credited with an amount equal to the Company Contribution Amount, if any, and earnings or losses pursuant to Section 4.2.

     “Company Contribution Amount” shall equal the amount described in Section 4.2.

     “Compensation” shall mean the Salary and Bonus that the Participant is entitled to for services rendered to the Company.

     “Corporation” shall mean Pacific Sunwear of California, Inc. and any successor corporation.

     “Deferral Account” shall mean the bookkeeping account maintained by the Committee for each Participant that is credited with amounts equal to (1) the portion of the Participant’s Salary that he or she elects to defer, (2) the portion of the Participant’s Bonus that he or she elects to defer, and (3) investment gains and losses pursuant to Section 4.1.

     “Disabled” or “Disability” means a physical or mental state that would qualify a Participant for disability benefits under the Corporation’s Long Term Disability Plan, because of medically determinable bodily injury, mental impairment or disease sustained after the date of such person’s designation as a Participant, as determined by the Committee. The Committee may rely on the conclusions reached by any insurance carrier that has issued an insurance policy to the Company covering the Participant or any physician chosen by or otherwise acceptable to the Committee.

     “Early Retirement Age” shall mean age 50 with 10 years of service.

     “Effective Date” shall mean March 1, 1995.

     “Eligible Employee” shall mean officers and other highly compensated employees of the Company at the Vice President level or higher who are selected by the Committee to participate in the Plan.

     “Employee Savings Plan” shall mean the Pacific Sunwear of California, Inc. Employee Savings Plan.

     “Fund” or “Funds” shall mean one or more of the investments selected by the Committee pursuant to Section 3.2.

     “Investment Return” shall mean, for each Fund, an amount equal to the net investment performance of such Fund for the applicable period, as determined by the Committee.

     “Normal Retirement Age” shall mean age 55.

     “Participant” shall mean any Eligible Employee who elects to defer Compensation in accordance with Section 3.1.

     “Payment Eligibility Date” shall mean the date as soon as administratively practical following the date a Participant terminates employment, retires after attaining Early or Normal Retirement Age, or dies.

     “Plan” shall mean the Pacific Sunwear of California, Inc. Executive Deferred Compensation Plan set forth herein, now in effect, or as amended from time to time.

     “Plan Year” shall mean the 12 consecutive month period beginning on January 1, provided, however, that the first Plan Year shall be a short year beginning on March 1, 1995 and ending on December 31, 1995.

     “Salary” or “Salaries” shall mean the Participant’s base salary earned as an employee of the Company. For Plan Years beginning on or before January 19, 1999, “Salary” shall be determined after reduction for salary deferral contributions to any plans qualified under Section 401(k) or 125 of the Code.

     “Subsidiary” shall mean any corporation or other entity a majority or more of whose outstanding voting stock or voting power is beneficially owned directly or indirectly by the Corporation.

ARTICLE II

PARTICIPATION

2.1 — Participation .

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

ARTICLE III

DEFERRAL ELECTIONS

3.1 — Elections to Defer Compensation .

     (a)  Election Period .

     (1) Current Employees . Each current employee who is an Eligible Employee may elect to defer Compensation by filing with the Committee an election that conforms to the requirements of this Section 3.1, on a form provided by the Committee, no later than February 28, 1995. Such election will be effective for Salary earned during the period between March 1, 1995 and December 31, 1995 and for the Bonus earned in 1995.

     (2) Other Employees . Each other employee who becomes an Eligible Employee after March 1, 1995, or any Eligible Employee who fails to elect to defer Compensation when first eligible, and any Eligible Employee who has terminated a prior Compensation deferral election may elect to defer Compensation, by filing an election, on a form provided by the Committee, on or before December 1. Such election will be effective for Salary earned during the pay period beginning on or after the following January 1 and the Bonus paid with respect to services performed in the Plan Year beginning on the following January 1.

     (b)  General Rule . The amount of Compensation which an Eligible Employee may elect to defer is as follows:

     (1) Any percentage or dollar amount of Salary up to 90%; and/or

     (2) Any percentage or dollar amount of Bonus up to 100%;

provided, however, that no election shall be effective to reduce the Compensation paid to an employee for a calendar year to an amount which is less than the sum of: (i) the amount that the Company is required to

withhold from such employee’s Compensation for such calendar year for purposes of federal, state and local (if any) income and employment tax (including FICA withholding), and (ii) the amount that the Company is required to withhold from such employee’s Compensation for such calendar year for contributions to any employee benefit plan (other than the Plan).

     (c)  Minimum Deferrals . For each year during which an Eligible Employee is a Participant, the minimum amount that may be elected under Section 3.1(b) is $2,500.

     (d)  Duration of Deferral Election . Any deferral election made under paragraph (a) of this Section 3.1 shall remain in effect and be irrevocable, notwithstanding any change in the Participant’s Salary or Bonus, until changed or terminated in accordance with the terms of this paragraph (d); provided, however, that such election shall terminate for any Plan Year for which the Participant is not an Eligible Employee. Subject to the minimum deferral requirement of Section 3.1(c) and the limitations of Section 3.1(b), a Participant shall file a new election each year with the Committee by December 31 (or such earlier deadline that the Committee may establish and announce with respect to any year), for Compensation earned during the pay period beginning after January 1 of the immediately following calendar year, and may increase, decrease or terminate his or her Salary and/or Bonus deferral election, in accordance with the terms of this Section 3.1.

3.2 — Investment Elections .

     The Committee shall select, from time to time, one or more mutual funds, indices, or contracts as the Funds for determining the amount of earnings (or losses) to be credited to the Participant’s Account. The Committee shall notify Participants of the Funds available from time to time. The Committee may, at any time without notice, change the number, types and/or particular Funds available; provided that the number and types of Funds offered shall not be materially diminished following a Change of Control.

     In making the designation pursuant to this Section 3.2, the Participant may specify (on a form and in a manner approved by the Committee) that all or any whole percentage of his Account be deemed to be invested in one or more of the Funds. Effective as of the end of any calendar month (or more frequently as may be approved by the Committee), a Participant may change (on a form and in a manner approved by the Committee) the designation made under this Section 3.2 by filing an election, on a form provided by the Committee, prior to the applicable deadline established by the Committee. If a Participant fails to elect a Fund under this Section 3.2, he or she shall be deemed to have elected the Money Market Fund (or such other Fund as may be selected by the Committee as the “default” Fund and announced to Participants).

     Although the Participant may designate a Fund or Funds for the deemed investment of his Account, neither the Committee nor the Company will have any obligation to actually invest the amounts deferred under the Plan in any particular investment. In the event that the Company invests any funds in any commercial investment, fund or contract used as a Fund under the Plan, title to and beneficial ownership of such invested funds shall at all times remain that of the Company and no Participant, Beneficiary or any other person shall have any interest whatsoever in such invested funds. Unless otherwise provided by the Committee, a Participant shall not be permitted to make separate Fund elections for his Deferral Account and for his Company Contribution Account.

3.3 — Alternative Election Methods .

     Notwithstanding anything else contained herein to the contrary, the Committee may require or permit Participant elections and/or consents under this Plan to be made by means of such electronic media as the Committee may prescribe. Reasonable efforts will be used to process electronic media consents and elections made under this Plan. Notwithstanding the preceding sentence or anything else in this Plan to the contrary, neither the Company, the Committee, nor any other person guarantees that any consent or election will be so processed and such persons have no obligation to ensure that the ability to make elections is available at any particular time (for example, and without limitation, electronic media may not be available to Participants from time to time due to factors beyond such persons’ control). The Committee may adopt new or alternative rules for electronic media consents and elections as it deems appropriate in its sole and complete discretion (including, without limitation, eliminating any electronic media system and re-implementing a requirement of written forms, establishing the effective date and the notice date for any type of consent or election and limiting the number of any particular elections that may be made by a Participant during any specified period). In order to be effective, each consent and/or election must be made on such other rules as the Committee may prescribe.

ARTICLE IV

ACCOUNTS

4.1 — Deferral Account .

     The Committee shall establish and maintain a Deferral Account for each Participant under the Plan. Each Participant’s Deferral Account shall be further divided into separate subaccounts (“mutual fund subaccounts”), each of which corresponds to a mutual fund or contract elected by the Participant pursuant to Section 3.2. A Participant’s Deferral Account shall be credited as follows:

     (a) As of the first day of each month, the Committee shall credit the mutual fund subaccounts of the Participant’s Deferral Account with an amount equal to Salary deferred by the Participant during each pay period ending in that month in accordance with the Participant’s election under Section 3.2; that is, the portion of the Participant’s deferred Salary that the Participant has elected to be deemed to be invested in a certain type of mutual fund shall be credited to the mutual fund subaccount corresponding to that mutual fund;

     (b) As of the first day of the month in which the Bonus or partial Bonus would have been paid, the Committee shall credit the mutual fund subaccounts of the Participant’s Deferral Account with an amount equal to the portion of the Bonus deferred by the Participant’s election under Section 3.2; that is, the portion of the Participant’s deferred Bonus that the Participant has elected to be deemed to be invested in a particular type of mutual fund shall be credited to the mutual fund subaccount corresponding to that mutual fund; and

     (c) As of the last day of each month, each mutual fund subaccount of a Participant’s Deferral Account shall be credited with earnings and debited with losses in an amount equal to that determined by multiplying the balance credited to such mutual fund subaccount as of the first day of the month (for this purpose, the amounts credited pursuant to Sections 4.1(a) and (b) and transfers between mutual fund

subaccounts that month, and the amounts debited pursuant to any distributions and/or transfers between mutual fund subaccounts that month, shall be deemed credited or debited as of the first day of the month) by the Investment Return for the corresponding Fund selected by the Committee pursuant to Section 3.2.

     (d) Notwithstanding anything to the contrary in this Section 4.1, if the Committee permits Participants to change the Funds elected by Participants pursuant to Section 3.2 more frequently than on a monthly basis, credits pursuant to this Section 4.1 and pursuant to Section 4.2(b) shall also be permitted to be made more frequently than effective as of the first or last day of each month, in which case transfers between mutual fund subaccounts during the month, amounts debited pursuant to any distributions and other debits and credits shall also be permitted to be made more frequently than on a monthly basis (and, for purposes of clarity and without limiting the generality of the foregoing, credits and debits may be made as of the date the amount would have otherwise been paid, is distributed from the Plan, or the date on which a transfer occurs, as applicable).

4.2 — Company Contribution Account .

     The Committee shall establish and maintain a Company Contribution Account for each Participant under the Plan. Each Participant’s Company Contribution Account shall be further divided into separate mutual fund subaccounts corresponding to the mutual fund or contract elected by the Participant pursuant to Section 3.2. A Participant’s Company Contribution Account shall be credited as follows:

     (a) As of the first day of each Plan Year following a bonus declaration, if any, the Committee shall credit the mutual fund subaccounts of the Participant’s Company Contribution Account with an amount equal to the Company Contribution Amount, if any, applicable to that Participant; that is, t