Exhibit 10.1

EXECUTION COPY

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is dated as of September 19, 2007, and
made and entered into by and between The Wet Seal, Inc., a Delaware corporation
(the “Company”), and Steven H. Benrubi (“Executive”).

W I T N E S S E T H:

WHEREAS, the Company desires to employ Executive as Executive Vice President and
Chief Financial Officer of the Company, and Executive desires to be so employed.

Accordingly, in consideration of the premises and the respective covenants and
agreements of the Parties set forth below, and intending to be legally bound
hereby, 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 September 21, 2007 (the “Effective
Date”) and end on the third anniversary of the Effective Date (the “Term”). The
Term may be sooner terminated by either party in accordance with the provisions
of Section 5.

 

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 Three Hundred Thousand Dollars ($300,000)
(“Base Compensation”) payable in twenty-six (26) substantially equal
installments per year.

3.2 Annual Bonus Compensation; 2007 Bonus Compensation. (a) Provided that
Executive is employed as of the end of each of the Company’s respective bonus
periods, Executive shall be eligible to receive annual bonus compensation
targeted at fifty percent (50%) of Base Compensation. The maximum annual bonus
compensation opportunity shall be provided in the Company’s incentive plan.
Subject to the achievement of performance objectives determined by the
Compensation Committee of the Board of Directors of the Company (the
“Committee”), forty percent (40%) of this annual bonus compensation will be
based on the Spring operating income results for the Company as a whole and the
remaining sixty percent (60%) will be based on the Fall operating income results
for the Company as a whole. In order to earn a Spring bonus for each applicable
fiscal year of the Company ending during the Term, Executive must be employed on
the last day of the second quarter of such fiscal year and in order to earn a
Fall bonus for each applicable fiscal year of the Company ending during the
Term, Executive must be employed on the last day of the fourth quarter of that
fiscal year. Any Fall bonus under this provision shall be paid no later than the
15th day of the third month following the end of the fiscal year for which it is
earned and any Spring bonus earned hereunder shall be paid in the third quarter
of such fiscal year. Prior to the commencement of any bonus period, the Company
reserves the right to change the operating metric(s) for purposes of measuring
the bonus earned.

 

1

--------------------------------------------------------------------------------

(b) For purposes of the Fall bonus for fiscal year 2007, such bonus will be
calculated based upon (i) Executive’s base compensation as Vice President and
Controller, at a rate of 30% of such base compensation for the period of
August 1, 2007 through September 20, 2007, and (ii) Executive’s Base
Compensation for the period thereafter at a rate of 50% of such Base
Compensation.

3.3 Options. Pursuant to and subject to the terms of The Wet Seal Inc. 2005
Stock Incentive Plan, as amended and/or restated from time to time (the “Plan”),
on the Effective Date, Executive shall be awarded an option to purchase 60,000
shares of Class A common stock of the Company (“Common Stock”) in accordance
with the stock option agreement attached hereto as Exhibit B (the “Stock Option
Agreement”).

3.4 Restricted Shares. Pursuant to and subject to the terms of the Plan, on the
Effective Date, Executive shall be awarded a restricted stock award consisting
of 90,000 restricted shares of Common Stock in accordance with the restricted
stock award agreement attached hereto as Exhibit C (the “Restricted Stock Award
Agreement”).

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 and made available
to other executives at his level, in accordance with the terms of such plans as
they may be in effect from time to time.

3.6 Vacation. During the Term, Executive shall be entitled to three (3) weeks of
paid vacation per year to be used and accrued in accordance with the Company’s
policy, as it may be established from time to time.

3.7 Expense Reimbursement. 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 during the Term.

 

4. POSITION AND DUTIES

4.1 Position. Executive shall serve as Executive Vice President and Chief
Financial Officer of the Company and report to the Chief Executive Officer of
the Company (“CEO”). Executive shall perform duties consistent with his title
and position and any other reasonable duties determined by the CEO. If requested
by the Board of Directors of the Company (the “Board”), Executive shall serve as
an officer and/or director of any of the Company’s affiliates or subsidiaries
for no additional consideration.

4.2 Duties; 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 shall perform the duties assigned to him to the best of
Executive’s ability and in the best interests of the Company.

 

2

--------------------------------------------------------------------------------

4.3 Compliance with Policies. Executive shall observe all Company’s policies and
all reasonable rules and regulations adopted by the Company in connection with
the conduct of its business, and shall render services in a competent,
conscientious and professional manner and as instructed by the Company in all
matters.

4.4 Officer of the Company. Executive’s position is considered a 16(b) position.
Executive 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 Term, Executive’s
employment shall terminate as of the date of his death. The Company may
terminate Executive due to “Disability” at any time following the Effective
Date, as defined below, upon written notice to Executive. 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 written notice to Executive, subject to compliance by the
Company with the provisions of Section 5.6 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, the term “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;

(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.

 

3

--------------------------------------------------------------------------------

5.4 By Executive For Good Reason. Executive may terminate his employment 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 setting forth Executive’s intention to terminate his
employment with the Company. The Company shall have the opportunity to cure the
“Good Reason” within thirty (30) days of the Company’s receipt of the written
notice from Executive. For purposes of this Agreement, “Good Reason” shall mean
relocating Executive’s place of work, or the executive offices of the Company,
to a location more than fifty (50) miles from the site of the Company’s offices
as of the date of this Agreement.

5.5 By Executive Without Good Reason. Executive may voluntarily terminate his
employment without Good Reason at any time following the Effective Date upon
sixty (60) days written notice to the Company.

5.6 Termination Payment.

(a) Amount.

(i) In the event that Executive’s employment is terminated pursuant to Sections
5.1 through 5.5, Executive shall continue to render services to the Company
pursuant to this Agreement until the date of termination (“Termination Date”)
and shall continue to receive compensation and payment for any unreimbursed
expenses incurred, accrued but unpaid Base Compensation and other accrued
employee benefits as provided in this Agreement, through the Termination Date.
In the event Executive’s employment is terminated without “Cause” pursuant to
Section 5.2, or Executive terminates his employment for “Good Reason” pursuant
to Section 5.4, in each case within the first three years of the Effective Date,
and subject to subpart (c) below, Executive shall receive severance pay in an
amount equal to one times Executive’s Base Compensation, in equal bimonthly
installments paid over a period of twelve (12) months (the “Severance Period”)
with the first installment to be paid on the later of the Company’s first
regular pay date after the Termination Date or the tenth (10th) day after
Executive’s execution of the release described in Section 5.6(c) below. Each
installment of the severance pay shall be deemed a separate payment for the
purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”). Notwithstanding the foregoing, if all or any portion of the severance
payments due under this Section 5.6(a) are determined to be “nonqualified
deferred compensation” subject to Section 409A of the Code, and the Company
determines that Executive is a “specified employee” as defined in
Section 409A(a)(2)(B)(i) of the Code and the regulations and other guidance
issued thereunder, then such severance payments (or portion thereof) shall
commence no earlier than the first day of the seventh month following the month
in which Executive’s termination of employment occurs (with the first such
payment being a lump sum equal to the aggregate severance payments Executive
would have received during such six-month period if no such payment delay had
been imposed).

 

4

--------------------------------------------------------------------------------

(ii) If Executive is terminated (x) without Cause on or after the third
anniversary of the Effective Date or (y) for Cause, then Executive shall not
receive any severance payments.

(iii) Except as provided in this Section 5.6, 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.

(b) Benefits. RESERVED.

(c) Release. Notwithstanding any other provision of this Agreement to the
contrary, Executive acknowledges and agrees that any and all severance payments
to which Executive is entitled under this Section 5.6 are conditional upon, and
subject to, Executive first executing a valid waiver and release of all claims
that Executive may have against the Company, its subsidiaries and affiliates
(and their respective officers and directors) in a form substantially similar to
that attached hereto as Exhibit A, subject to changes as maybe warranted to be
made to such release to preserve the intent thereof for changes in applicable
laws; provided, that, if Executive fails to execute (or revokes) such waiver and
release of all claims within 30 days following the Termination Date, the Company
shall have no obligation to provide the payments contemplated under this
Section 5.6.

 

6. NON-SOLICITATION; NON-COMPETITION

Executive acknowledges that by virtue of Executive’s position as Executive Vice
President and Chief Financial Officer 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, 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, and for a period of one (1) 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 (1) 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
5.5.

 

5

--------------------------------------------------------------------------------

7. TRADE SECRETS

7.1 Executive specifically agrees that Executive will not at any time, whether
during or subsequent to the Term, 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 any customer of the Company to which Executive may obtain access
during the Term. 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

 

6

--------------------------------------------------------------------------------

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 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: (i) to the business of the employer or (ii) 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 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. INJUNCTIVE RELIEF

Executive acknowledges that any violation of any provision of Sections 6 through
9 and Sections 12 through 13 hereof 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 remedy at law to
redress the harm which such violations will cause. Therefore, in the event of
any violation or threatened violation of any provision of Sections 6 through 9
and Sections 12 through 13 by Executive, in addition to any other rights at law
or in equity, Executive agrees that the Company will be entitled to seek
injunctive relief including, but not limited to, temporary and/or permanent
restraining orders to restrain any violation or threatened violation of such
Sections by Executive.

 

11. BLUE PENCIL

It is the desire and intent of the parties that the provisions of Section 6
through 9 and Section 15 hereof 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 Sections 6 through 9
and Section 15 shall be adjudicated to be invalid or unenforceable, such
provision 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

 

7

--------------------------------------------------------------------------------

be invalid and unenforceable, such deletion or reformation to apply only with
respect to the operation of such Section in the particular jurisdiction in which
such adjudication is made. It is expressly agreed that any court or arbitrator
shall have the authority to modify any provision of Sections 6 through 9 and
Section 15 if necessary to render it enforceable, in such manner as to preserve
as much as possible the parties’ original intentions, as expressed therein, with
respect to the scope thereof.

 

12. 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.

 

13. 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.

 

14. GENERAL PROVISIONS

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

14.2 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

Vice President, Human Resources

The Wet Seal, Inc.

26972 Burbank

Foothill Ranch, CA 92610

Facsimile No.: (949) 699 4722

 

8

--------------------------------------------------------------------------------

If to Executive, to such address as shall most currently appear in the records
of the Company.

14.3 Entire Agreement. This Agreement, the Stock Option Agreement, the Release
and the Restricted Stock Award Agreement, as amended from time to time,
constitute the entire agreement of the Parties, and supersedes all prior
agreements.

14.4 Withholding. All payments hereunder shall be subject to any required
withholding of federal, state and local taxes pursuant to any applicable law or
regulation.

14.5 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 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.

14.6 Severability. The paragraphs and provisions of this Agreement are
severable. If any paragraph or provision is found to be unenforceable, the
remaining paragraphs and provisions will remain in full force and effect.

14.7 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 its principles of conflict of laws.

14.8 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.

14.9 Survival. Sections 6 through 13, this Section 14.9 and Section 15 shall
survive the termination or expiration of this Agreement.

 

15. 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.

 

9

--------------------------------------------------------------------------------

(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) 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.

 

10

--------------------------------------------------------------------------------

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

 

THE WET SEAL, INC. By:  

/s/ Joel N. Waller

Name:   Joel N. Waller Title:   President and Chief Executive Officer EXECUTIVE

/s/ Steven H. Benrubi

Steven H. Benrubi

 

11

--------------------------------------------------------------------------------

EXHIBIT A

Form of Release

1. Termination of Employment. Steven H. Benrubi (“Executive”) acknowledges that
his last day of employment with The Wet Seal, Inc. and any of its affiliates
(the “Company”) is                                          (the “Termination
Date”).

2. Full Release. For the consideration set forth in the Employment Agreement, by
and between the Company and Executive, dated as of September 21, 2007 (the
“Employment Agreement”) and for other fair and valuable consideration therefor,
Executive, for himself, his heirs, executors, administrators, successors and
assigns (hereinafter collectively referred to as the “Releasors”), hereby fully
releases and discharges the Company, its parents, subsidiaries, affiliates,
insurers, successors, and assigns, and their respective officers, directors,
officers, employees, and agents (all such persons, firms, corporations and
entities being deemed beneficiaries hereof and are referred to herein as the
“Company Entities”) from any and all actions, causes of action, claims,
obligations, costs, losses, liabilities, damages and demands of whatsoever
character, whether or not known, suspected or claimed, which the Releasors have,
from the beginning of time through the date of this Release, against the Company
Entities arising out of or in any way related to Executive’s employment or
termination of his employment; provided, however, that this shall not be a
release with respect to any amounts and benefits owed to Executive pursuant to
the Employment Agreement upon termination of employment, employee benefit plans
of the Company, or Executive’s right to indemnification as provided in the
Company’s Charter and By-Laws.

3. Waiver of Rights Under Other Statutes. Executive understands that this
Release waives all claims and rights Executive may have under certain federal,
state and local statutory and regulatory laws, as each may be amended from time
to time, including but not limited to, the Age Discrimination in Employment Act
(including the Older Workers Benefit Protection Act) (“ADEA”), Title VII of the
Civil Rights Act; the Employee Retirement Income Security Act of 1974; the Equal
Pay Act; the Rehabilitation Act of 1973; the Americans with Disabilities Act;
the Worker Adjustment and Retraining Notification Act; the California Fair
Employment and Housing Act, the California Family Rights Act, California law
regarding Relocations, Terminations, and Mass Layoffs, the California Labor
Code; and all other statutes, regulations, common law, and other laws in any and
all jurisdictions (including, but not limited to, California) that in any way
relate to Executive’s employment or the termination of his employment.

4. Informed and Voluntary Signature. No promise or inducement has been made
other than those set forth in this Release. This Release is executed by
Executive without reliance on any representation by Company or any of its
agents. Executive states that he is fully competent to manage his business
affairs and understands that he may be waiving legal rights by signing this
Release. Executive hereby acknowledges that he has carefully read this Release
and has had the opportunity to thoroughly discuss the terms of this Release with
legal counsel of his choosing. Executive hereby acknowledges that he fully
understands the terms of this Release and its final and binding effect and that
he affixes his signature hereto voluntarily and of his own free will.

5. Waiver of Rights Under the Age Discrimination Act. Executive understands that
this Release waives all of his claims and rights under the ADEA. The waiver of
Executive’s rights

 

12

--------------------------------------------------------------------------------

under the ADEA does not extend to claims or rights that might arise after the
date this Release is executed. The monies to be paid to Executive are in
addition to any sums to which Executive would be entitled without signing this
Release. For a period of seven (7) days following execution of this Release,
Executive may revoke the terms of this Release by a written document received by
the Chief Financial Officer of the Company no later than 11:59 p.m. of the
seventh day following Executive’s execution of this Release. The Release will
not be effective until said revocation period has expired. Executive
acknowledges that he has been given up to twenty-one (21) days to decide whether
to sign this Release. Executive has been advised to consult with an attorney
prior to executing this Release and has been given a full and fair opportunity
to do so.

6. Waiver Of Civil Code Section 1542. It is the intention of the parties in
signing this Release that it should be effective as a bar to each and every
claim, demand and cause of action stated above. In furtherance of this
intention, Executive hereby expressly waives any and all rights and benefits
conferred upon Executive by the provisions of SECTION 1542 OF THE CALIFORNIA
CIVIL CODE and expressly consents that this Release shall be given full force
and effect according to each and all of its express terms and provisions,
including those relating to unknown and unsuspected claims, demands and causes
of action, if any, as well as those relating to any other claims, demands and
causes of action referred to above. SECTION 1542 provides:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

7. Miscellaneous.

(a) This Release shall be governed in all respects by the laws of the State of
California without regard to its principles of conflict of law.

(b) In the event that any one or more of the provisions of this Release is held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby. Moreover, if any one or more of the provisions contained in
this Release is held to be excessively broad as to duration, scope, activity or
subject, such provisions will be construed by limiting and reducing them so as
to be enforceable to the maximum extent compatible with applicable law.

(c) This Release may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

(d) The paragraph headings used in this Release are included solely for
convenience and shall not affect or be used in connection with the
interpretation of this Release.

(e) This Release, the Employment Agreement, the Stock Option Agreement and the
Restricted Stock Award Agreement represent the entire agreement between the
parties with respect to the subject matter hereto and may not be amended except
in a writing signed by the Company and Executive. If any dispute should arise
under this Release, it shall be settled in accordance with the terms of
Section 15 of the Employment Agreement.

 

13

--------------------------------------------------------------------------------

(f) This Release shall be binding on the executors, heirs, administrators,
successors and assigns of Executive and the successors and assigns of Company
and shall inure to the benefit of the respective executors, heirs,
administrators, successors and assigns of the Company Entities and the
Releasors.

 

THE WET SEAL, INC.

By:

 

 

Name:

 

Title:

  EXECUTIVE

 

Steven H. Benrubi

 

14

--------------------------------------------------------------------------------

EXHIBIT B

THE WET SEAL, INC.

2005 STOCK INCENTIVE PLAN

STOCK OPTION AGREEMENT

This Stock Option Agreement (the “Agreement”) is made and entered into as of
September     , 2007 by and between The Wet Seal, Inc., Delaware corporation
(the “Company”), and Steven H. Benrubi, who is the Executive Vice President and
Chief Financial Officer of the Company (“Participant”). Capitalized terms not
defined herein will have the meaning ascribed to them in the Company’s 2005
Stock Incentive Plan, as amended and/or restated from time to time (the “Plan”)

 

Address:    _________________________       _________________________    Total
Option Shares:    60,000    Exercise Price Per Share:1    $                     
   Date of Grant:    September 21, 2007    Expiration Date:   
September 21, 2017    Type of Stock Option       (Check One):    ¨ Incentive
Stock Option, to the maximum extent permissible    x Nonqualified Stock Option

1. Grant of Option. The Company hereby grants to Participant an option (this
“Option”) to purchase the total number of shares of Common Stock of the Company
set forth above as Total Option Shares (the “Shares”) at the Exercise Price Per
Share, subject to all of the terms and conditions of this Agreement and the
Plan.

2. Exercise Period.

2.1. Provided Participant continues to provide Continuous Service to the Company
or any Subsidiary, the Option will become vested and exercisable with respect to
33 1/3% of the Shares on each of the next three (3) anniversaries of the Date of
Grant until the Option is 100% vested, subject to Executive’s Continuous Service
with the Company on each of those vesting

 

--------------------------------------------------------------------------------

1

The “Exercise Price Per Share” shall be equal to the greater of (a) the closing
price of one share of Stock on the Date of Grant and (b) the 30 market day
average ending on and including the Date of Grant.

 

15

--------------------------------------------------------------------------------

dates. Except as provided in this Agreement, unvested Options will not be
exercisable on or after Participant’s termination of Continuous Service
(“Termination Date”) and will immediately terminate on such Termination Date.

2.2. The Option will expire on the Expiration Date set forth above or earlier as
provided in this Agreement or the Plan.

3. Termination of Continuous Service.

3.1. If Participant’s Continuous Service is terminated, the Options will remain
exercisable as follows:

(a) If Participant’s termination of Continuous Service is due to death, all
unvested Options will terminate and all vested Options will be exercisable by
Participant’s designated beneficiary, or if none, the person(s) to whom such
Participant’s rights under the Option are transferred by will or the laws of
descendent and distribution for one (1) year following the Termination Date (but
in no event beyond the term of the Option).

(b) If Participant’s termination of Continuous Service is due to Disability (as
such term is defined in Participant’s Employment Agreement with the Company
dated as of the date hereof (the “Employment Agreement”)), all unvested Options
will terminate and all vested Options will be exercisable by Participant for one
(1) year following the Termination Date (but in no event beyond the term of the
Option).

(c) If Participant’s termination of Continuous Service is due to termination for
Cause (as such term is defined in the Employment Agreement) or voluntary
termination without Good Reason (as such term is defined in the Employment
Agreement) by the Participant, the Options will terminate on the Termination
Date, regardless of whether the Options were then exercisable.

(d) If Participant’s termination of Continuous Service is due to any other
reason, all unvested Options will terminate on the Termination Date and all
Options (to the extent exercisable as of the Termination Date) will be
exercisable for a period of three (3) months following such Termination Date
(but in no event beyond the term of the Option) and will thereafter terminate.
Participant’s status as an employee will not be considered terminated in the
case of leave of absence agreed to in writing by the Company (including but not
limited to military and sick leave); provided, that, such leave is for a period
of not more than three (3) months or reemployment upon expiration of such leave
is guaranteed by contract or statute.

3.2. Nothing in the Plan or this Agreement will confer on Participant any right
to the continuation of service with the Company, or any of its Subsidiaries, or
interfere in any way with the right of the Company or its Subsidiaries to
terminate his Continuous Service at any time.

4. Manner of Exercise.

4.1. A Participant (or in the case of exercise after Participant’s death or
Disability, Participant’s executor, administrator, heir or legatee, as the case
may be) may exercise his Option by giving written notice of exercise to the
Company in a form approved by the Company specifying the number shares of Common
Stock to be purchased. Such notice must be

 

16

--------------------------------------------------------------------------------

accompanied by the payment in full of the Option exercise price. The exercise
price of the Option may be paid by in the following manner: (i) cash or
certified or bank check, (ii) surrender of Common Stock held by Participant for
at least 6 months prior to exercise (or such longer or shorter period as may be
required to avoid a charge to earnings for financial accounting purposes) or the
attestation of ownership of such shares, in either case, if so permitted by the
Company, (iii) if established by the Company, through a “same day sale”
commitment from Participant and a broker-dealer selected by the Company that is
a member of the National Association of Securities Dealers (an “NASD Dealer”)
whereby Participant irrevocably elects to exercise the Options and to sell a
portion of the Shares so purchased sufficient to pay for the total exercise
price and whereby the NASD Dealer irrevocably commits upon receipt of such
shares to forward the total exercise price directly to the Company, or (iv) by
any combination of the foregoing, and, in all instances, to the extent permitted
by applicable law. A Participant’s subsequent transfer or disposition of any
Common Stock acquired upon exercise of an Option will be subject to any Federal
and state laws then applicable, specifically securities law, and the terms and
conditions of the Plan.

4.2. Upon (a) exercise of a Nonqualified Stock Option or (b) under any other
circumstances determined by the Committee in its sole discretion, the Company
will have the right to require any Participant, and such Participant by
accepting the Awards granted under the Plan agrees, to pay to the Company the
amount of any Federal, state, local income taxes or other taxes incurred by
reason of the exercise of Options granted hereunder that the Company may be
required to withhold with respect thereto. In the event of clauses (a), (b) or
(c), Participant will pay to the Company such amount as the Company deems
necessary to satisfy its minimum tax withholding obligation and such payment
will be made: (i) in cash, (ii) to the extent authorized by the Committee,
having the Company retain shares which would otherwise be delivered upon
exercise of an Option, (iii) to the extent authorized by the Committee,
delivering or attesting to ownership of Shares owned by the holder of the
Options for at least 6 months prior to the exercise of such Options (or such
longer or shorter period as may be required to avoid a change to earnings for
financial accounting purposes), or (iv) any combination of any such methods. For
purposes hereof, Shares will be valued at Fair Market Value.

5. Issuance of Shares. Except as otherwise provided in the Plan or this
Agreement, as promptly as practicable after receipt of such written notification
of exercise and full payment of the Exercise Price and any required income tax
withholding, the Company will issue or transfer to Participant the number of
Shares with respect to which Options have been so exercised (less shares
withheld in satisfaction of tax withholding obligations, if any), and will
deliver to Participant a certificate or certificates therefor, registered in
Participant’s name.

6. Company; Participant.

6.1. The term “Company” as used in this Agreement with reference to Continuous
Service will include the Company and its Subsidiary, if any, as appropriate.

6.2. Whenever the word “Participant” is used in any provision of this Agreement
under circumstances where the provision should logically be construed to apply
to the beneficiaries, the executors, the administrators, or the person or
persons to whom the Options may be transferred by will or by the laws of descent
and distribution, the word “Participant” will be deemed to include such person
or persons.

 

17

--------------------------------------------------------------------------------

7. Non-Transferability. The Options are not transferable by Participant
otherwise than to a designated beneficiary upon death or by will or the laws of
descent and distribution, and are exercisable during Participant’s lifetime only
by him. No assignment or transfer of the Options, or of the rights represented
thereby, whether voluntary or involuntary, by operation of law or otherwise
(except to a designated beneficiary, upon death, by will or the laws of descent
and distribution), will vest in the assignee or transferee any interest or right
herein whatsoever, but immediately upon such assignment or transfer the Options
will terminate and become of no further effect.

8. Rights as Shareholder. Participant or a transferee of the Options will have
no rights as shareholder with respect to any Shares until he or she will have
become the holder of record of such share, and no adjustment will be made for
dividends or distributions or other rights in respect of such Shares for which
the record date is prior to the date upon which he or she will become the holder
of record thereof.

9. Adjustments. Options may be adjusted or terminated in any manner as
contemplated by the Plan.

10. Change of Control. Upon the occurrence of a Change of Control, all Options
will become 100% vested and exercisable; provided, that, Participant is then in
Continuous Service.

11. Compliance with Law. Notwithstanding any of the provisions hereof,
Participant hereby agrees that he will not exercise the Options, and that the
Company will not be obligated to issue or transfer any shares to Participant
hereunder, if the exercise hereof or the issuance or transfer of such shares
will constitute a violation by Participant or the Company of any provisions of
any law or regulation of any governmental authority. Any determination in this
connection by the Committee will be final, binding and conclusive. The Company
will in no event be obliged to register any securities pursuant to the
Securities Act (as now in effect or as hereafter amended) or to take any other
affirmative action in order to cause the exercise of the Options or the issuance
or transfer of shares pursuant thereto to comply with any law or regulation of
any governmental authority.

12. Notice. Every notice or other communication relating to this Agreement will
be in writing, and will be mailed to or delivered to the party for whom it is
intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided; provided,
that, unless and until some other address be so designated, all notices or
communications by Participant to the Company will be mailed or delivered to the
Company at its principal executive office, and all notices or communications by
the Company to Participant may be given to Participant personally or may be
mailed to him at his address as recorded in the records of the Company.

13. Binding Effect. Subject to Section 7 hereof, this Agreement will be binding
upon the heirs, executors, administrators and successors of the parties hereto.

14. Governing Law. This Agreement will be construed and interpreted in
accordance with the laws of the State of California without regard to its
conflict of law principles.

15. Plan. The terms and provisions of the Plan are incorporated herein by
reference, and Participant hereby acknowledges receiving a copy of the Plan. In
the event of a conflict or inconsistency between the discretionary terms and
provisions of the Plan and the provisions of this Agreement, this Agreement will
govern and control.

 

18

--------------------------------------------------------------------------------

16. RESERVED.

17. Tax Consequences. Set forth below is a brief summary as of the Effective
Date of the Plan of some of the federal tax consequences of the exercise of the
Options and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT SHOULD
CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTIONS OR DISPOSING OF THE SHARES.

17.1. There may be a regular federal income tax liability upon the exercise of
the Options. Participant will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the Exercise Price. If
Participant is a current or former employee of the Company, the Company may be
required to withhold from Participant’s compensation or collect from Participant
and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.

17.2. The following tax consequences may apply upon disposition of the Shares.

(a) If the Shares are held for more than twelve (12) months after the date of
the transfer of the Shares pursuant to the exercise of a Nonqualified Stock
Option, any gain realized on disposition of the Shares will be treated as long
term capital gain.

(b) The Company is hereby authorized to withhold from Participant’s
compensation, or collect from Participant, and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income.

18. Successors and Assigns. The Company may assign any of its rights under this
Agreement. This Agreement will be binding upon and inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer
set forth herein, this Agreement will be binding upon Participant and
Participant’s beneficiaries, executors, administrators and the person or persons
to whom this Agreement may be transferred by will or the laws of descent or
distribution.

[THE REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

 

19

--------------------------------------------------------------------------------

THE WET SEAL, INC.             PARTICIPANT By:  

 

           

 

              (Signature)

 

            Steven H. Benrubi (Please print name)            

 

            (Please print title)            

 

20

--------------------------------------------------------------------------------

EXHIBIT C

RESTRICTED STOCK AWARD AGREEMENT

UNDER THE WET SEAL, INC.

2005 STOCK INCENTIVE PLAN

THIS RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”), made as of the      day
of September, 2007 by and between The Wet Seal, Inc. (the “Company”) and Steven
H. Benrubi (“Participant”) who is the Executive Vice President and Chief
Financial Officer of the Company, evidences the grant by the Company of a stock
award of restricted Class A common stock of the Company (the “Restricted Stock”)
to Participant and Participant’s acceptance of the Restricted Stock in
accordance with the provisions of The Wet Seal, Inc. 2005 Stock Incentive Plan,
as amended and/or restated from time to time (the “Plan”). The Company and
Participant agree as follows:

1. Basis for Award. The award of Restricted Stock is made under the Plan
pursuant to Section 9 thereof for service rendered to the Company by
Participant.

2. Stock Awarded.

2.1 Effective as of September 21, 2007 (the “Grant Date”), the Company hereby
awards to Participant, in the aggregate, an award of 90,000 shares of Class A
common stock of the Company (the “Award”) which shall be subject to the
conditions and restrictions set forth in the Plan and this Agreement.

2.2 Shares of Restricted Stock shall be evidenced by book-entry registration
with the Company’s transfer agent, subject to such stop-transfer orders and
other terms deemed appropriate by the Committee to reflect the restrictions
applicable to such Restricted Stock. Notwithstanding the foregoing, if any
certificate is issued in respect of such Restricted Stock, at the sole
discretion of the Committee, such certificate shall be registered in the name of
Participant and shall bear an appropriate legend referring to the terms,
conditions and restrictions applicable to this Award, substantially in the
following form:

“THE TRANSFERABILITY OF THIS CERTIFICATE AND THE CLASS A COMMON STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING
FORFEITURE) CONTAINED IN THE RESTRICTED STOCK AWARD AGREEMENT DATED AS OF
SEPTEMBER 21, 2007, ENTERED INTO BETWEEN THE REGISTERED OWNER AND THE WET SEAL,
INC.”

If a certificate is issued with respect to the Restricted Stock, the Committee
may require that the certificate evidencing such shares be held in custody by
the Company until the restrictions thereon shall have lapsed and that
Participant deliver a stock power, endorsed in blank, relating to the shares
covered by this Award. At the expiration of the restrictions, the Company shall
instruct the transfer agent to release the shares from the restrictions
applicable to such Restricted

 

21

--------------------------------------------------------------------------------

Stock, subject to the terms of the Plan and applicable law or, in the event that
a certificate has been issued, redeliver to Participant (or his legal
representative, beneficiary or heir) share certificates for the shares deposited
with it without any legend except as otherwise provided by the Plan, this
Agreement or applicable law. During the period that Participant holds the
Restricted Stock, Participant shall have the right to receive dividends on and
to vote the Restricted Stock while it is subject to restriction, except as
otherwise provided by the Plan. If the Restricted Stock is forfeited, in whole
or in part, Participant will assign, transfer and deliver any evidence of the
Restricted Stock to the Company and cooperate with the Company to reflect such
forfeiture. By accepting this Award, Participant acknowledges that the Company
does not have an adequate remedy in damages for the breach by Participant of the
conditions and covenants set forth in this Agreement and agrees that the Company
is entitled to and may obtain an order or a decree of specific performance
against Participant issued by any court having jurisdiction.

2.3 Except as provided in the Plan or this Agreement, the restrictions on the
Restricted Stock are that prior to vesting as provided in Section 3 of this
Agreement, the shares will be forfeited by Participant and all of Participant’s
rights to such stock shall immediately terminate without any payment or
consideration by the Company, in the event of any sale, assignment, transfer,
hypothecation, pledge or other alienation of such Restricted Stock made or
attempted, whether voluntary or involuntary, and if involuntary whether by
process of law in any civil or criminal suit, action or proceeding, whether in
the nature of an insolvency or bankruptcy proceeding or otherwise.
Notwithstanding the foregoing, Participant may transfer the Restricted Stock to
his Immediate Family Members (or to corporations, trusts, partnerships or
limited liability companies established for Participant and/or such family
members); provided, that, (i) such transfer is for no consideration other than
securities or other interests in such corporations, trusts, partnerships or
limited liability companies, (ii) the Restricted Stock shall continue to be
subject to the terms, conditions and restrictions herein and (iii) the transfer
is effected through procedures established by the Committee from time to time.

3. Vesting. The restrictions described in Section 2 of this Agreement will lapse
with respect to 33-1/3% of the shares of Restricted Stock (30,000 shares) on
September 21, 2008 and as to an additional 33-1/3% of the shares of Restricted
Stock (30,000 shares) on September 21, 2009 and 33-1/3% of the shares of
Restricted Stock (30,000 shares) on September 21, 2010, provided Participant is
subject to Continuous Service on each of those vesting dates. If Participant
ceases to be subject to Continuous Service at any time prior to the respective
vesting dates, any shares of Restricted Stock that are unvested as of the date
of such cessation of Continuous Service shall automatically be forfeited. Upon
the occurrence of a Change in Control while Participant is subject to Continuous
Service, all restrictions on 100% of the then unvested Restricted Stock shall
automatically lapse on the date the Change of Control shall be consummated and
all of the Restricted Stock shall be vested.

4. Company; Participant. The term “Company” as used in this Agreement with
reference to service shall include the Company and its Affiliates, as
appropriate.

4.1 Whenever the word “Participant” is used in any provision of this Agreement
under circumstances where the provision should logically be construed to apply
to the beneficiaries, the executors, the administrators, or the person or
persons to whom the Restricted Stock may be transferred by will or by the laws
of descent and distribution, the word “Participant” shall be deemed to include
such person or persons.

 

22

--------------------------------------------------------------------------------

5. Adjustments. The Award may be adjusted as provided for in Section 12 of the
Plan.

6. Compliance with Law. Notwithstanding any of the provisions hereof, the
Company will not be obligated to issue or transfer any Restricted Stock to
Participant hereunder, if the vesting thereof or the issuance or transfer of
such Restricted Stock shall constitute a violation by Participant or the Company
of any provisions of any law or regulation of any governmental authority. Any
determination in this connection by the Committee shall be final, binding and
conclusive. The Company will take all appropriate steps, including, to the
extent necessary, the filing of an appropriate registration statement at its
sole expense, such that Participant may sell the Restricted Stock upon the lapse
of the restrictions set forth herein, subject to the Company’s insider trading
policies.

7. No Right to Continued Service. Nothing in this Agreement or in the Plan shall
confer upon Participant any right to continue as an employee of the Company or
shall interfere with or restrict in any way the rights of the Company, which are
hereby expressly reserved, to terminate Participant’s employment at any time for
any reason whatsoever, with or without cause. Except as provided herein,
Participant acknowledges and agrees that the continued vesting of the Restricted
Stock granted hereunder is premised upon his provision of future services with
the Company and the vesting of such Restricted Stock shall not accelerate upon
his termination of service for any reason except as specifically provided
herein.

8. Representations and Warranties of Participant. Participant represents and
warrants to the Company that:

8.1 Agrees to Terms of the Plan. Participant has received a copy of the Plan and
has read and understands the terms of the Plan and this Agreement, and agrees to
be bound by their terms and conditions. In the event of an express conflict or
inconsistency between the terms and provisions of the Plan and the provisions of
this Agreement, the Plan shall govern and control. All capitalized terms not
defined herein shall have the meaning ascribed to them as set forth in the Plan.
Participant acknowledges that there may be adverse tax consequences upon the
vesting of the Restricted Stock or disposition of the shares of Restricted Stock
once vested, and that Participant should consult a tax adviser prior to such
time.

8.2 Cooperation. Participant agrees to sign such additional documentation as may
reasonably be required from time to time by the Company.

9. Taxes. Participant agrees that, to the extent required by law, no later than
the date as of which the restrictions on the Restricted Stock shall lapse with
respect to all or any of the Restricted Stock covered by this Agreement,
Participant shall pay to the Company (in cash, or to the extent permitted by the
Committee, Stock held by Participant for at least six (6) months whose Fair
Market Value on the date the Restricted Stock vests is equal to the amount of
Participant’s tax withholding liability) any federal, state or local taxes of
any kind required by law to be withheld, if any, with respect to the Restricted
Stock for which the restrictions shall lapse. If Participant does not timely
make the payment(s) referred in the immediately preceding sentence, the Company
is hereby authorized to withhold from Participant’s compensation and pay to the
applicable taxing authorities an amount equal to this tax withholding liability.

 

23

--------------------------------------------------------------------------------

10. Notice. Every notice or other communication relating to this Agreement shall
be in writing, and shall be mailed to or delivered to the party for whom it is
intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided; provided,
that, unless and until some other address be so designated, all notices or
communications by Participant to the Company shall be mailed or delivered to the
Company at its principal executive office, and all notices or communications by
the Company to Participant may be given to Participant personally or may be
mailed to him at his address as recorded in the records of the Company.

11. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of California without regard to its
conflict of law principles.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

THE WET SEAL, INC. By:  

 

Name:   Title:   PARTICIPANT

 

Name: Steven H. Benrubi

 

24