Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is dated as of March 4, 2006, and made
and entered into by and between The Wet Seal, Inc., a Delaware corporation (the
“Company”), and Greg Gemette (the “Executive”).

WHEREAS, the Company desires to employ Executive as President, Arden B.
Merchandise, division of the Company, and Executive desires to be so employed;
and

WHEREAS, the Company and Executive (collectively, the “Parties”) desire their
employment relationship to be governed by the terms set forth below.

THEREFORE, the Parties agree as follows:

 

  1. EMPLOYMENT

The Company hereby employs Executive and Executive hereby accepts employment
upon the terms and conditions set forth below.

 

  2. TERM

The term of this Agreement shall begin on March 13, 2006 (the “Effective Date”)
and end on March 13, 2009 (the “Term”). The period during which Executive is an
employee of the Company is referred to herein as the “Employment Period.”

 

  3. COMPENSATION

3.1 Base Compensation. For the services to be rendered by Executive under this
Agreement, Executive shall be entitled to receive commencing as of the Effective
Date, salary at the annual rate of Four Hundred Thousand Dollars ($400,000)
(“Base Compensation”) payable in twenty-six (26) substantially equal
installments per year. The Base Compensation shall be reviewed annually for
increase by the Company’s Board of Directors (“Board”).

3.2 Annual Bonus Compensation. Provided that Executive is employed as of the end
of the Company’s fiscal year (January 31), Executive shall be eligible to
receive bonus compensation of 50% of base compensation. This will be based on
achieving certain pre-determined operating income and gross margin targets (70%
Arden B. division and 30% Wet Seal Corporate targets), 40% payable in Spring and
60% payable in Fall. Executive shall not be eligible for a bonus under this
provision if he is not employed as of the end of the fiscal year for which it is
awarded. Any bonus under this provision shall be paid no later than the end of
March of the fiscal year following the fiscal year for which it is awarded.
Executives Spring 2006 bonus payment shall be guaranteed at 100% payment of the
Spring target and paid no later than August 31, 2006.

3.3 Options. Subject to the approval of the Compensation and Options Committee
of the Board, pursuant to and subject to the terms of the Company’s stock option
plan(s), Executive shall be granted options to purchase 50,000 shares of common
stock of the

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Company. The options shall vest equally over 3 years and the exercise price
shall be set in accordance with the terms of the plan under which such options
are granted and shall be subject to a written option agreement in a form
acceptable to the Company. Should there be a change in control of over 50%
ownership at Wet Seal Inc. or Arden B division, all remaining stock options,
whether vested or not vested will vest immediately. For purposes of this
Agreement “change of control” includes, but is not limited to, a merger or
consolidation of the Company with or into another entity or any other corporate
reorganization or the sale, transfer or other disposition of all or
substantially all ( 50% or more) of the Company’s assets.

Restricted Shares. Subject to the approval of the Compensation and Options
Committee of the Board, pursuant to and subject to the terms of the Company’s
restricted grant plan(s), Executive shall be awarded restricted grants in the
amount of 120,000 shares, vesting equally in three installments of 40,000 shares
each, effective with the anniversary of Executives hire date. Should there be a
change in control of over 50% ownership at Wet Seal Inc. or Arden B division,
all remaining stock options, whether vested or not vested will vest immediately.
For purposes of this Agreement “change of control” includes, but is not limited
to, a merger or consolidation of the Company with or into another entity or any
other corporate reorganization or the sale, transfer or other disposition of all
or substantially all (50% or more) of the Company’s assets.

3.4 If there is a change in the control of the Arden B. division, all remaining
grants in 3.3 and 3.4 vest immediately.

3.5 Benefits. Executive shall be entitled to participate in all pension and
welfare benefit, medical, dental, vision, life insurance, disability and any
other benefit or insurance plans established by the Company in accordance with
the terms of such plans as they may be in effect from time to time.

3.6 Vacation and Other Benefits. Executive shall be entitled to three weeks
vacation per year in accordance with the Company’s vacation policy, as it shall
be in effect from time to time.

3.7 Relocation. Executive shall be entitled to relocation, including 90 days
temporary housing, a lump sum payment of $30,000, and up to 2 house-hunting
trips for Executive and family. Further details are available under separate
cover.

3.8 Expense Reimbursement and Legal Fees: Executive shall be reimbursed for
reasonable business expenses actually incurred, in accordance with the Company’s
expense reimbursement policy as it may be in effect from time to time. The
Company’s shall pay for Executive’s reasonable attorneys’ fees and costs
associated with the negotiation and preparation of this agreement in an amount
not to exceed $2,000 (two-thousand dollars).

 

  4. POSITION AND DUTIES

4.1 Position. Executive shall serve as President, Arden B. Merchandise division
of the Company, and report to the President and Chief Executive Officer of the
Wet Seal Inc.

 

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4.2 Devotion of Time and Effort. Executive shall use Executive’s good faith best
efforts and judgment (a) in performing Executive’s duties required hereunder and
(b) to act in the best interests of the Company. Executive shall devote such
time, attention and energies to the business of the Company as are reasonably
necessary to satisfy Executive’s required responsibilities and duties hereunder.
Executive may engage in other activities for Executive’s own account while
employed hereunder, including without limitation, charitable, community and
other business activities, provided that such other activities do not materially
interfere with the performance of Executive’s duties hereunder or compete with
the company.

4.3 Officer of the Company. Your position is considered a 16(b) position. You
will be an Officer of this company and accountable for fiscal and fiduciary
responsibilities associated with such.

 

  5. TERMINATION

5.1 Due to Death or Disability. If Executive dies during the Employment Period,
Executive’s employment shall terminate as of the date of his death. The Company
may terminate Executive if he becomes “disabled,” as defined below, upon written
notice to Executive, unless prohibited by law. For purposes of this Agreement,
the term “Disability” shall mean a physical or mental incapacity as a result of
which Executive becomes unable to continue the proper performance of Executive’s
duties hereunder for six (6) consecutive calendar months or for shorter periods
aggregating one hundred eighty (180) business days in any twelve (12) month
period, or, if this provision is inconsistent with any applicable law, for such
period or periods as permitted by law.

5.2 By the Company Without “Cause”. The Company may terminate Executive’s
employment without “cause” (as hereinafter defined) at any time following the
Effective Date, upon thirty (30) days written notice to Executive, subject to
compliance by the Company with the provisions of Section 5.5 hereof.

5.3 By the Company for Cause. The Company may terminate Executive’s employment
for “Cause” at any time. For purposes of this Agreement, “Cause” shall mean:

(a) Executive’s conviction of, or plea of nolo contendere to, a felony or any
crime or involving the Company;

(b) Executive’s commission of any act of theft, embezzlement or misappropriation
against the Company;

(c) The gross neglect, malfeasance or nonfeasance of Executive in the
performance of the services contemplated hereunder, when such conduct causes or
has the likelihood of causing material economic harm to the Company;

(d) A material breach of this Agreement by Executive;

(e) Any willful misconduct or unethical behavior related to Executive’s duties
hereunder or insubordination by Executive;

 

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(f) The sexual, or other harassment by Executive of any employee, independent
contractor or customer of the Company; and/or

(g) Executive’s use of illegal drugs or abuse of alcohol or legally prescribed
drugs.

5.4 By Executive For Good Reason. Executive may terminate his employment only
for Good Reason as defined below. In the event Executive seeks to terminate his
employment for Good Reason, Executive shall provide thirty (30) days written
notice to the Company describing the claimed event or circumstance and setting
forth Executive’s intention to terminate his employment with the Company. In all
cases, the Company shall have the opportunity to cure any “Good Reason”
identified by Executive within thirty (30) days of the Company’s receipt of the
written notice from Executive. For purposes of this Agreement, “Good Reason”
shall mean:

(a) The Company’s material beach of any of its obligations hereunder;

(b) Relocating Executive’s place of work, or the executive offices of the
Company, to a location other than in the County of Orange or the County of Los
Angeles, State of California, without Executive’s written consent; or

(c) A material reduction, without cause, in Executive’s title, responsibilities
or duties.

5.5 Termination Payment:

(a) Amount. In the event that Executive’s employment is terminated pursuant to
Sections 5.1 through 5.4, Executive shall continue to render services to the
Company pursuant to this Agreement until his date of death or the date of
termination (“Termination Date”) and shall continue to receive compensation and
payment for any unreimbursed expenses incurred and other accrued employee
benefits as provided in this Agreement, through the Termination Date. In the
event Executive’s employment is terminated without “Cause” or by Executive for
Good Reason, pursuant to Section 5.2, or 5.4 and subject to subpart (c) below,
Executive shall receive severance pay in an amount equal to six (6) months
Compensation, in equal bimonthly installments paid over a period of six (6)
months (the “Severance Period”) with the first payment occurring on the latter
of the first regular pay date after the Termination Date or the tenth (10th) day
after execution of the release described in subpart (c) below. Except as
provided in this Section 5.5, Executive shall not be entitled to any other
payments in connection with his employment and/or the termination thereof, and
shall have no further right to receive compensation or other consideration from
the Company or have any other remedy whatsoever against the Company, as a result
of the termination of this Agreement or the termination of Executive. In no way
does severance payment include any unearned, ineligible bonus compensation.
Executive shall have no duty of mitigation and shall not be subject to any right
of offset with respect to any compensation received by Executive on or after the
termination of his employment.

 

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(b) Benefits. In the event Executive’s employment is terminated pursuant to
Section 5.2, the Executive may timely elect to continue healthcare coverage
through COBRA.

(c) Release. To be eligible to receive severance pay under this Section 5.5,
Executive must execute and deliver (and not revoke, if a revocation period is
required by law) a release of all claims against the Company and any of its
parents, subsidiaries, affiliates, shareholders, members, partners, investors,
officers, directors, agents and employees in a form acceptable to the Company.

 

  6. NON-SOLICITATION, NON-COMPETITION

Executive acknowledges that by virtue of Executive’s position as President,
Arden B. Merchandise division of the Company, and Executive’s employment
hereunder, he will have advantageous familiarity with and knowledge about the
Company and will be instrumental in establishing and maintaining goodwill
between the Company and its customers, which goodwill is the property of the
Company. Therefore, Executive agrees as follows:

(a) During the Term of this Agreement, Executive will not engage (either
directly or indirectly, as shareholder, partner, officer, director, consultant,
employee or otherwise) in any enterprise, nor perform any services of any kind
whatsoever for or provide any financial assistance to any enterprise, in the
retail clothing business other than through the Company or its subsidiaries and
their successors.

(b) During the Term of this Agreement, and for a period of one year following
the end of the Term, Executive will not, either for himself or for any other
person or entity, directly or indirectly (i) solicit, induce, recruit or
encourage any of the Company’s employees to terminate their relationship with
the Company, and/or (ii) attempt to solicit, induce, recruit or encourage any of
the Company’s employees to terminate their relationship with the Company;
provided, however, that this restriction shall apply for one year following the
termination of Executive’s employment, in the event Executive’s employment is
terminated prior to the end of the Term pursuant to, and in accordance with,
Sections 5.1 through 5.4;

(c ) During the Term of this Agreement, except where the Company gives Executive
thirty (30) days written notice of its intention to terminate Executive without
cause and within the final one hundred twenty (120) days of the Term, Executive
shall not seek, or negotiate for, employment other than with the Company;
provided, however, that this restriction shall not apply following the
termination of Executive’s employment prior to the end of the Term pursuant to,
and in accordance with, Sections 5.1 through 5.4; This provision is not intended
to prohibit Executive from establishing and maintaining social and professional
relationships with captains of industry and human resource professionals
including, but not limited to executive search firms. Such relationships are not
intended to encourage, solicit or induce Wet Seal Inc., employees to terminate
their relationship with the Company.

(d) Executive acknowledges that any violation of any provision of this Section 6
by Executive will cause irreparable damage to the Company, that such damages
will be incapable of precise measurement and that, as a result, the Company will
not have an adequate

 

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remedy at law to redress the harm which such violations will cause. Therefore,
in the event of any violation of any provision of this Section 6 by Executive,
Executive agrees that the Company will be entitled to injunctive relief
including, but not limited to, temporary and/or permanent restraining orders to
restrain any violation of this Section 6 by Executive; and

(e) It is the desire and intent of the parties that the provisions of this
Section 6 shall be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any portion of this Section 6 shall be adjudicated to be invalid
or unenforceable, this Section 6 shall be deemed amended either to conform to
such restrictions as the court or arbitrator may allow, or to delete therefrom
or reform the portion thus adjudicated to be invalid and unenforceable, such
deletion or reformation to apply only with respect to the operation of this
Section 6 in the particular jurisdiction in which such adjudication is made. It
is expressly agreed that the arbitrator in any arbitration hereunder shall have
the authority to modify this Section 6 if necessary to render it enforceable, in
such manner as to preserve as much as possible the parties’ original intentions,
as expressed herein, with respect to the scope hereof.

 

  7. TRADE SECRETS

7.1 Executive specifically agrees that Executive will not at my time, whether
during or subsequent to the Employment Period, in any fashion, form or manner,
except in furtherance of Executive’s duties at the Company or with the specific
written consent of the Company, either directly or indirectly use or divulge,
disclose or communicate to any Person in, any manner whatsoever, any
confidential information of any kind, nature or description concerning any
matters affecting or relating to the business of the Company (the “Proprietary
Information”), including (i) all information, formulae, compilations, software
programs (including object codes and source codes), devices, methods,
techniques, drawings, plans, experimental and research work, inventions,
patterns, processes and know-how, whether or not patentable, and whether or not
at a commercial stage related to the Company or any subsidiary thereof (ii)
buying habits or practices of any of its customers, (iii) the Company’s
marketing methods and related data, (iv) the Company’s costs of materials, (v)
the prices it obtains or has obtained or at which it sells or has sold its
products or services, (vi) lists or other written records used in the Company’s
business, (vii) compensation paid to employees and other terms of employment or
(viii) any other confidential information of, about or concerning the business
of the Company, its manner of operation, or other confidential data of any kind,
nature or description (excluding any information that is or becomes publicly
known or available for use through no fault of Executive or as directed by Court
order). The parties hereto stipulate that as between them, Proprietary
Information constitutes trade secrets that derive independent economic value,
actual or potential, from not being generally known to the public or to other
Persons who can obtain economic value from its disclosure or use and that
Proprietary Information is the subject of efforts which are reasonable under the
circumstances to maintain its secrecy and of which this Section 7.1. is an
example, and that any breach of this Section 7.1 shall be a material breach of
this Agreement. All Proprietary Information shall be and remain the Company’s
sole property.

7.2 Executive agrees to keep confidential and not to use or divulge except in
furtherance of Executive’s duties at the Company any confidential or proprietary
information of

 

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any customer of the Company to which Executive may obtain access during the
Employment Period. Executive acknowledges and agrees that a breach of this
Section 7.2 shall be a material breach of this Agreement.

 

  8. INVENTIONS

8.1 Executive agrees to disclose promptly to the Company any and all concepts,
designs, inventions, discoveries and improvements related to the Company’s
business (collectively, “Inventions”) that Executive may conceive, discover or
make from the beginning of Executive’s employment with Company until the
termination thereof; whether such is made solely or jointly with others, whether
or not patentable, of which the conception or making involves the use of the
Company’s time, facilities, equipment or personnel.

8.2 Executive agrees to assign, and does hereby assign, to the Company (or its
nominee) Executive’s right, title and interest in and to any and all Inventions
that Executive may conceive, discover or make, either solely or jointly with
others, patentable or unpatentable, from the beginning of Executive’s employment
with the Company until the termination thereof.

8.3 Executive agrees to sign at the request of the Company any instrument
necessary for the filing and prosecution of patent applications in the United
States and elsewhere, including divisional, continuation, revival, renewal or
reissue applications, covering any Inventions and all instruments necessary to
vest title to such Inventions in the Company (or its nominee). Executive further
agrees to cooperate and assist the Company in preparing, filing and prosecuting
any and all such patent applications and in pursuing or defending any litigation
upon inventions covered hereby. The Company shall bear all expenses involved in
the prosecution of such patent applications it desires to have filed. Executive
agrees to sign at the request of the Company any and all instruments necessary
to vest title in the Company (or its nominee) to any specific patent application
prepared by the Company and covering Inventions which Executive has agreed to
assign to the Company (or its nominee) pursuant to Section 8.2 above.

8.4 The provisions of Sections 8.2 and 8.3 do not apply to any invention which
qualifies fully under the provisions of Section 2870 of the California Labor
Code, which provides in substance that provisions in an employment agreement
providing that an employee shall assign or offer to assign rights in an
invention to his or her employer do not apply to an invention for which no
equipment, supplies, facilities, or trade secret information of the employer was
used and which was developed entirely on the employee’s own time, except for
those inventions that either (a) relate, at the time of conception or reduction
to practice of the invention: (1) to the business of the employer or (2) to the
employer’s actual or demonstrably anticipated research or development, or (b)
result from any work performed by the employee for the employer.

 

  9. SHOP RIGHTS

The Company shall also have a perpetual, royalty-free, non-exclusive right to
use in its business, and to make, use, license and sell products, processes
and/or services derived from any inventions, discoveries, designs, improvements,
concepts, ideas, works of authorship, whether patentable or not, including
processes, methods, formulae, techniques or know-how

 

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related thereto, that are not within the scope of “Inventions” as defined above,
but which are conceived or made by Executive during regular working hours or
with the use of the facilities, materials or personnel of the Company.

 

  10. COPYRIGHT

Executive agrees that any work prepared for the Company that is eligible for
copyright protection under any U.S. or foreign law shall be a work made for hire
and ownership of all copyrights (including all renewals and extensions therein)
shall vest in the Company. In the event any such work is deemed not to be a work
made for hire for any reason, Executive hereby irrevocably grants, transfers and
assigns all right, title and interest in such work and all copyrights in such
work and all renewals and extensions thereof to the Company, and agrees to
provide all assistance reasonably requested by the Company in the establishment,
preservation and enforcement of its copyright in such work, such assistance to
be provided at the Company’s expense but without any additional compensation to
Executive. Executive agrees to and does hereby irrevocably waive all moral
rights with respect to the work developed or produced hereunder, including any
and all rights of identification of authorship and any and all rights of
approval, restriction or limitation on use or subsequent modifications.

 

  11. EXECUTIVE’S DUTIES ON TERMINATION

Upon termination of his employment, Executive will return immediately to the
Company all of the Company’s property in Executive’s possession or control,
including, but not limited to, phone cards, credit cards, reports, Proprietary
Information, software, keys, files, data, customer lists, equipment, and all
other tangible and intangible property belonging to the Company or relating to
Executive’s employment with the Company.

 

  12. THE COMPANY’S REPRESENTATIONS

The Company hereby represents and warrants that (a) it has the right to enter
into this Agreement and to incur the obligations incurred by it herein, (b) this
Agreement has been duly and validly authorized by the Company, and (c) the
provisions of this Agreement do not violate any other contracts or agreements to
which it is a party and that would adversely affect its ability to perform its
obligation hereunder.

 

  13. EXECUTIVE’S REPRESENTATIONS

Executive hereby represents and warrants that (a) he has the right to enter into
this Agreement and to grant the rights granted by him herein and (b) the
provisions of this Agreement do not violate any other contracts or agreements to
which he is a party and that would adversely affect his ability to perform his
obligation hereunder.

 

  15. GENERAL PROVISIONS

15.1 Assignment, Binding Effect. Neither the Company nor Executive may assign,
delegate or otherwise transfer this Agreement or any of their respective rights
or

 

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obligations hereunder without the prior written consent of the other party,
except that the Company may assign this Agreement to its successors (through
acquisition, merger, reorganization or otherwise), and affiliate, parent or
subsidiary corporations. Any attempted prohibited assignment or delegation shall
be void. This Agreement shall be binding upon and inure to the benefit of any
permitted successors or assigns of the parties and the heirs, executors,
administrators and/or personal representatives of Executive.

15.2 Notices. All notices, requests, demands and other communications that are
required or may be given under this Agreement shall be in writing and shall be
deemed to have been duly given when received if personally delivered; when
transmitted if transmitted by telecopy, electronic or digital transmission
method with electronic confirmation of receipt; the day after it is sent, if
sent for next-day delivery to a domestic address by recognized overnight
delivery service (e.g., FedEx); and upon receipt, if sent by certified or
registered mail, return receipt requested. In each case notice shall be sent to:

If to the Company

Ms. Pamela O’Connor

SVP, Human Resources

The Wet Seal, Inc.

26972 Burbank

Foothill Ranch, CA 92610

Facsimile No.: (949) 699 4722

If to Executive:

Gregory S. Gemette

c/o Glen H. Ackerman, Esq.

P.O. Box 3176

Clearwater Beach, Florida 33767

With a copy to:

Glen H. Ackerman, Esq.

P.O. Box 3176

Clearwater, Florida 33767

Any party may change its address for the purpose of this Section 15.2 by giving
the other party written notice of its new address in the manner set forth above.

15.3 Entire Agreement. This Agreement constitutes the entire agreement of the
parties, and supersedes all prior agreements.

15.4 Amendments; Waivers. This Agreement may be amended or modified, and any of
the terms and covenants may be waived, only by a written instrument executed by
the

 

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parties hereto, or, in the case of a waiver, by the party waiving compliance.
Any waiver by any party in any one or more instances of any term or covenant
contained in this Agreement shall neither be deemed to be nor construed as a
further or continuing waiver of any such term or covenant of this Agreement.

15.5 Provisions Severable. In case any one or more provisions of this Agreement
shall be invalid, illegal or unenforceable, in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not, in any way, be affected or impaired thereby. If any provision hereof is
determined by any court of competent jurisdiction or an arbitrator to be invalid
or unenforceable by reason of such provision extending the covenants and
agreements contained herein for too great a period of time or over too great a
geographical area, or being too extensive in any other respect, such provision
shall be interpreted to extend only over the maximum period of time and
geographical area, and to the maximum extent in all other respects, as to which
it is valid and enforceable, all as determined by such court or such arbitrator.

15.6 Governing Law. This Agreement shall be construed, performed and enforced in
accordance with, and governed by the laws of the State of California without
giving effect to the principles of conflict of laws thereof.

15.7 Counterparts. This Agreement may be executed in one or more counterparts
and delivered by facsimile, each of which shall. be deemed an original, but all
of which shall together constitute the same instrument.

15.8 Survival. Sections 2 and 5 through 16 shall survive the termination or
expiration of this Agreement.

 

  16. SERVICES UNIQUE

The services to be performed by Executive pursuant to this Agreement are of a
special, unique, unusual, extraordinary and intellectual character which gives
them a peculiar value, the loss of which cannot be reasonably or adequately
compensated by damages in an action at law. Company may seek, but shall not be
limited to, equitable relief, by injunction or otherwise, in the event of a
default by Executive.

 

  17. ARBITRATION

In recognition of the fact that differences may arise between Executive and the
Company relating to certain aspects of Executive’s employment or the termination
of Executive’s employment, and in recognition of the fact that resolution of any
differences in the courts is rarely timely or cost effective for either party,
both the Company and Executive mutually agree to arbitrate disputes under the
following terms and conditions in order to establish and gain the benefits of a
speedy, impartial and cost-effective dispute resolution procedure.

 

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(a) Except as set forth in subparagraph (e) below, any dispute arising out of or
in any way related to Executive’s employment with the Company, will be decided
exclusively by final and binding arbitration, in Orange County, California,
pursuant to the procedures required by California law, including the California
Arbitration Act, California Code of Civil Procedure §§ 1281, et seq. and
governing case law including Armendariz v. Foundation Health Psychcare Servs.,
Inc., 24 Cal.4th 83 (2000). The Claims covered include, but are not limited to,
claims for wages or other compensation due; claims for breach of any contract or
covenant, express or implied; tort claims; claims for discrimination, including
but not limited to discrimination based on race, sex, sexual orientation,
religion, national origin, age, marital status, handicap, disability or medical
condition or harassment on any of the foregoing bases; claims for benefits,
except as excluded herein; and claims for violation of any federal, state or
other governmental constitution, statute, ordinance, regulation, or public
policy. This agreement to arbitrate disputes shall not be deemed to apply to a
dispute if an agreement to arbitrate such a dispute is prohibited by law.

(b) The arbitrator may award any form of remedy or relief (including injunctive
relief) that would otherwise be available in court. Any award pursuant to said
arbitration shall be accompanied by a written opinion of the arbitrator setting
forth the reason for the award. The award rendered by the arbitrator shall be
conclusive and binding upon the parties hereto, and judgment upon the award may
be entered, and enforcement may be sought in, any court of competent
jurisdiction. To the extent not inconsistent with applicable laws, the
Arbitrator will have the authority to hear and grant motions.

(c) Except as required under governing law, including Armendariz v. Foundation
Health Psychcare Servs., Inc., 24 Cal.4th 83 (2000), each party shall pay its
own expenses of arbitration and the expenses of the arbitrator (including
compensation) shall be borne equally by the parties.

(d) EXECUTIVE AND THE COMPANY UNDERSTAND THAT, ABSENT THIS AGREEMENT, EXECUTIVE
AND THE COMPANY WOULD HAVE THE RIGHT TO SUE EACH OTHER IN COURT, AND THE RIGHT
TO A JURY TRIAL, BUT, BY THIS AGREEMENT, GIVE UP THAT RIGHT AND AGREE TO RESOLVE
BY ARBITRATION ANY AND ALL GRIEVANCES DIRECTLY OR INDIRECTLY RELATED TO THIS
AGREEMENT, EXECUTIVE’S EMPLOYMENT OR THE TERMINATION THEREOF.

(e) Notwithstanding the above, Executive or the Company shall be entitled to
seek injunctive or other equitable, provisional relief from a court of competent
jurisdiction in Orange County, California upon a showing that any potential
arbitration award would be rendered ineffectual without such relief. However, if
any party seeks or obtains such injunctive relief, the merits of the dispute
and/or determination of any appropriate remedy (other than equitable,
provisional relief) shall be resolved in accordance with this Agreement.

(f) In the event that any of the foregoing arbitration provisions is held to be
unenforceable, such provision shall be deemed stricken and the remainder shall
be fully enforceable.

(g) This agreement to arbitrate disputes shall apply to disputes involving the
Company as well as the Company’s parents, affiliates, subsidiaries, successors,
assigns, officers, directors, shareholders, employees and agents. Any
controversy regarding whether a particular dispute is subject to arbitration
shall be decided by the arbitrator.

 

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

 

THE “COMPANY”

By:

 

/s/    JOEL WALLER

Title:

 

President and Chief Executive Officer

 

“EXECUTIVE”

/s/    GREG GEMETTE

Greg Gemette

 

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