8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): September 29, 2006

PACIFIC SUNWEAR OF CALIFORNIA, INC.

(Exact Name of Registrant as Specified in Charter)

California	0-21296	95-3759463
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer
		Identification No.)
3450 East Miraloma Avenue		92806-2101
Anaheim, CA (Address of principal executive offices)		(Zip Code)

(714) 414-4000
Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 10.1

EXHIBIT 99.1

Item 1.01 Entry into a Material Definitive Agreement.

On September 29, 2006, Pacific Sunwear of California, Inc. (the “Company”) and Seth Johnson entered into an Amendment to Employment Agreement and Resignation. Pursuant to the agreement, Mr. Johnson resigned as an officer and director of the Company. The Company will, under the terms of the agreement, pay Mr. Johnson’s base annual salary of $1,040,000 through October 31, 2007 in regular installments in accordance with the Company’s normal payroll schedule. The aggregate salary payments will be approximately $1,127,000. In addition, the Company will pay the costs of continuing Mr. Johnson’s medical, dental and vision insurance through October 31, 2007. The Company expects to record an expense of approximately $1,127,000 during the current fiscal quarter in connection with the agreement.

The full text of the agreement is included as Exhibit 10.1 to this report and is incorporated herein by this reference.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.

As described in Item 1.01 above, on September 29, 2006, Mr. Johnson resigned from his positions as Chief Executive Officer and director of the Company.

On October 1, 2006, the Board appointed its Lead Director, Sally Frame Kasaks, age 61, as Interim Chief Executive Officer. Due to her appointment as Interim Chief Executive Officer, Ms. Kasaks has stepped down temporarily from her positions as Lead Director, chairman of the Nominating and Governance Committee and member of the Compensation Committee. There is no arrangement or understanding pursuant to which Ms. Kasaks was selected as a director, and there are no related party transactions between the Company and Ms. Kasaks reportable under Item 404(a) of Regulation S-K.

Ms. Kasaks has been a business consultant since January 1997, and has been a director of the Company since 1997. She served as the Chairman and Chief Executive Officer of Ann Taylor Stores, Inc., a specialty apparel retailer, from February 1992 to August 1996. From February 1989 to February 1992, Ms. Kasaks was the President and Chief Executive Officer of Abercrombie and Fitch, a specialty apparel retailing division of The Limited, Inc. She was also the Chairman and Chief Executive Officer of The Talbots, Inc., a specialty apparel retailing division of General Mills Co., from November 1985 to September 1988. Ms. Kasaks is currently serving as a director of The Children’s Place, Inc.

In related actions, the Board appointed current director Peter Starrett as Interim Lead Director and the chair of the Company’s Nominating and Governance Committee to fill the vacancy created by Ms. Kasaks’s appointment as Interim Chief Executive Officer. At this time, the Board has not appointed a replacement for Ms. Kasaks to the Compensation Committee.

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Ms. Kasaks will receive compensation of $87,500 per month for her services as Interim Chief Executive Officer, and be entitled to participate in the Company’s employee benefit plans. The Company will also reimburse Ms. Kasaks for certain relocation and travel costs, including the cost of temporary housing in California, and use of a car during the period of her service as Interim Chief Executive Officer. Ms. Kasaks will not receive any equity awards and will not, while serving as Interim Chief Executive Officer, receive fees paid to the Company’s independent directors.

Item 7.01 Regulation FD Disclosure.

Separately, on October 2, 2006, the Company announced sales information for the five weeks of fiscal September ending September 30, 2006, and commented on its prior financial guidance for the third quarter. The full text of the press release is furnished as Exhibit 99.1 to this report.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

10.1	Amendment to Employment Agreement and Resignation, dated September 29, 2006, between the Company and Seth Johnson
99.1	Press Release issued by the Company on October 2, 2006

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: October 2, 2006	Pacific Sunwear of California, Inc.
	/s/ Gerald M. Chaney
	Gerald M. Chaney
	Senior Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit
No.	Description
10.1	Amendment to Employment Agreement and Resignation, dated September 29, 2006, between the Company and Seth Johnson
99.1	Press Release issued by the Company on October 2, 2006

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EX-10.1

Exhibit 10.1

AMENDMENT
to
EMPLOYMENT AGREEMENT
and
RESIGNATION

     This AMENDMENT TO EMPLOYMENT AGREEMENT AND RESIGNATION (this “Amendment”) is dated as of September 29, 2006, by and between Pacific Sunwear of California, Inc., a California corporation (the “Company”), and Seth Johnson (“Executive”).

     WHEREAS, the Company and Executive previously entered into an Employment Agreement, dated October 11, 2004 (the “Agreement”); and

     WHEREAS, in connection with Executive’s voluntary decision to resign from his position as the Company’s Chief Executive Officer and member of the Board of Directors of the Company and as an officer and/or member of the board of directors of each of the Company’s subsidiaries as of September 29, 2006, the Company and Executive desire to further amend the terms of the Agreement as set forth herein;

     NOW, THEREFORE, in consideration of the above recitals which are incorporated by reference and made a part of this Agreement and for such other good and valuable consideration that the parties acknowledge to be adequate, the parties agree as follows:

     1. Section 6(b) of the Agreement is hereby amended by the deletion of the phrase “, by providing Executive thirty (30) days written notice of such termination” and modifying Section 6(b)(iii) as follows:

     (iii) continued payment of Executive’s base salary at an annual rate of $1,040,000 (less applicable withholdings and deductions), in the Company’s normal payroll cycle, for the period of October 1, 2006 through October 31, 2007;

and adding a new Section 6(b)(v) and a new Section 6(b)(vi) as follows:

     (v) continued coverage on the same basis as present of Executive’s health, dental and vision benefits through the term of Executive’s receipt of continued base salary as provided in Section 6(b)(iii), following which Executive shall be eligible for coverage for eighteen months pursuant to COBRA at his own expense; and

     (vi) continuation of Executive’s existing standard employee discount privilege through October 31, 2007.

     2. The text in Section 7 of the Agreement is hereby deleted in its entirety and is replaced with the following:

     TERMINATION BY EMPLOYEE

     (a) TERMINATION. Executive’s resignation effected pursuant to that certain Amendment to Employment Agreement and Resignation, dated as of September 29, 2006, by and between the Company and Executive, shall be treated for all purposes of this Agreement as a termination by the Company without Cause and the provisions of Section 6(b) (including those changes effected by this Amendment) shall apply.

     3. Executive hereby voluntarily resigns from his position as the Company’s Chief Executive Officer, as a member of the Company’s Board of Directors, and as an officer and/or member of the board of directors of each of the Company’s subsidiaries, as of September 29, 2006. In accordance with Section 6(b)(iii) of the Agreement, as modified by this Amendment, the Company shall pay Executive his base salary at an annual rate of $1,040,000 (less applicable withholdings and deductions) for the period of October 1, 2006 through October 31, 2007, in accordance with the Company’s normal payroll schedule, shall pay Executive a “Pro Rata Portion of the Bonus” (as defined in the Agreement), if any, and shall pay the premiums of Executive’s health, dental and vision benefits through October 31, 2007. The Company also shall promptly pay to Executive his accrued but unused vacation through the date hereof and, subject to the submission of customary expense reports, shall promptly pay to him any unreimbursed Company business expenses through the date hereof.

     4. During the period that Executive will continue to receive his base salary pursuant to Section 6(b)(iii) of the Agreement, Executive agrees that he will provide reasonable cooperation to the Company and its directors and officers in the transition of his duties and related matters, and the Company agrees that it will promptly reimburse Executive for any out-of-pocket expenses incurred by Executive in providing such reasonable cooperation.

     5. Except as expressly modified herein, the Agreement shall remain in full force and effect in accordance with its original terms.

     6. Capitalized terms that are not defined herein shall have the meanings ascribed to them in the Agreement.

     7. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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     IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered on the day and year first above written.

PACIFIC SUNWEAR OF CALIFORNIA, INC. “Company”
By:	/s/ Gerald M. Chaney
Name:	Gerald M. Chaney
Title:	Chief Financial Officer
SETH JOHNSON
“Executive”
/s/ Seth Johnson
Seth Johnson

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EX-99.1

Exhibit 99.1

Contact:
Gerald Chaney
SVP, Chief Financial Officer
(714) 414-4003

FOR IMMEDIATE RELEASE

PACIFIC SUNWEAR NAMES SALLY FRAME KASAKS INTERIM CEO

Reports Comparable Stores Sales for September;

Company Re-Affirms Previous Third Quarter Per Share Guidance
Excluding One-Time Item

ANAHEIM, Calif., Oct. 2, 2006 — Pacific Sunwear of California, Inc. (Nasdaq:PSUN) today announced that its Board of Directors has named Lead Director Sally Frame Kasaks as the Company’s interim Chief Executive Officer following the resignation of Seth Johnson.

The Board is initiating a search for a permanent Chief Executive Officer. While in her interim role, Ms. Kasaks will step down temporarily from her positions as Lead Director, chairman of the Nominating and Governance Committee and member of the Compensation Committee. During this time, Board member Peter Starrett will become interim Lead Director and interim chair of the Nominating and Governance Committee.

“On behalf of the Board, I want to thank Seth for his contributions to the Company and wish him well as he pursues other interests,” said Ms. Kasaks “I look forward to working with the entire Pacific Sunwear team to continue the Company’s progress and to find a permanent Chief Executive Officer who will provide outstanding leadership and direction to Pacific Sunwear.”

Ms. Kasaks, 61, a director of the Company since 1997, served as the Chairman and Chief Executive Officer of Ann Taylor Stores, Inc., a specialty apparel retailer, from 1992 to 1996. From 1989 to 1992, Ms. Kasaks was the President and Chief Executive Officer of Abercrombie and Fitch, a specialty apparel retailing division of The Limited, Inc. Prior to that, she served as Chairman and Chief Executive Officer of The Talbots, Inc., a specialty apparel retailing division of General Mills Co., from November 1985 to September 1988. Ms. Kasaks currently serves as a director of The Children’s Place, Inc.

Separately, the Company also announced today that total sales for the five weeks of fiscal September ending September 30, 2006 were $118.2 million, an increase of 4.0 percent over total sales of $113.7 million during the same period last year. Total Company same-store sales for the period declined 2.4 percent from the same period last year. By concept, PacSun same-store sales decreased 1.2 percent and d.e.m.o. same-store sales decreased 9.4 percent compared to the same five-week period last year. Additional information on September and year-to-date sales will be available on October 5, 2006 through the Company’s regularly scheduled press release and its recorded commentary accessible by dialing (714) 414-4210.

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Based on the sales for the quarter to date, the Company remains comfortable with the guidance it previously provided for the third quarter, excluding a one-time, pre-tax charge of approximately $1.1 million, or $0.01 per diluted share, that will be recorded in the third quarter and is associated with the departure of Mr. Johnson. On August 10, 2006, the Company said that it expects to report earnings per share in the range of $0.22 to $0.30 per diluted share for the third quarter.

About Pacific Sunwear of California, Inc.

Pacific Sunwear, operating under three distinct retail concepts, is a leading specialty retailer of everyday casual apparel, accessories and footwear designed to meet the needs of active teens and young adults. As of August 26, 2006, the Company operated 828 PacSun stores, 106 PacSun Outlet stores, 205 d.e.m.o. stores and 9 One Thousand Steps stores for a total of 1,148 stores in 50 states and Puerto Rico. PacSun’s website address is www.pacsun.com, merchandise carried at d.e.m.o. stores can be found at www.demostores.com and information about One Thousand Steps can be found at www.onethousandsteps.com.

Pacific Sunwear Safe Harbor

This press release contains “forward-looking statements” regarding the Company’s third quarter earnings expectations made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company intends that this forward-looking statement be subject to the safe harbors created thereby. The Company is hereby providing cautionary statements identifying important factors that could cause the Company’s actual results to differ materially from those projected in such forward-looking statements. This statement is not a historical fact and involves estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in such forward-looking statements. Such uncertainties include, among others, the following factors: our new concept is untested and may not be profitable or successful; changes in consumer demands and preferences, higher than estimated costs of goods sold or selling, general and administrative costs, competition from other retailers and uncertainties generally associated with apparel retailing; merchandising/fashion sensitivity; sales from private label merchandise; fluctuations in comparable store net sales results; expansion and management of growth; reliance on key personnel; dependence on single distribution facility; economic impact of natural disasters, terrorist attacks or war/threat of war; shortages of supplies and/or contractors, as a result of natural disasters or terrorist acts, could cause unexpected delays in new store openings, relocations or expansions; reliance on foreign sources of production; credit facility financial covenants and other risks outlined in the company’s SEC filings, including but not limited to the Annual Report on Form 10-K for the year ended January 28, 2006 and subsequent periodic reports filed with the Securities and Exchange Commission. Historical results achieved are not necessarily indicative of future prospects of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur after such statements are made. Nonetheless, the Company reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this press release. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.

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