Exhibit 10.4

Execution Copy

THE WET SEAL, INC.

CHANGE IN CONTROL AND SEVERANCE AGREEMENT

This Change in Control and Severance Agreement (the “Agreement”) is made and
entered into by and between John Goodman (“Executive”) and The Wet Seal, Inc., a
Delaware corporation (the “Company”), this 7th day of January, 2013, effective
as of the date Executive commences employment with the Company (the “Effective
Date”).

WHEREAS, The Board of Directors of the Company (the “Board”) recognizes that
Executive’s role at the Company and that the possibility of an acquisition of
the Company or an involuntary termination can be a distraction to Executive and
can cause Executive to consider alternative employment opportunities. The Board
has determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued dedication and
objectivity of Executive, notwithstanding the possibility, threat or occurrence
of such an event.

WHEREAS, the Board believes that it is in the best interests of the Company and
its shareholders to provide Executive with an incentive to continue Executive’s
employment and to motivate Executive to maximize the value of the Company upon a
Change in Control (as defined below) for the benefit of its stockholders.

WHEREAS, the Board believes that it is imperative to provide Executive with
severance benefits upon certain terminations of Executive’s service to the
Company that enhance Executive’s financial security and provide incentive and
encouragement to Executive to remain with the Company notwithstanding the
possibility of such an event.

WHEREAS, unless otherwise defined herein, capitalized terms used in this
Agreement are defined in Section 10 below.

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NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, including the agreements set forth below, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. Term of Agreement.

This Agreement shall become effective as of the Effective Date and terminate
upon the date that all obligations of the parties hereto with respect to this
Agreement have been satisfied.

2. At-Will Employment.

The Company and Executive acknowledge that Executive’s employment shall be
“at-will,” as defined under applicable law. If Executive’s employment terminates
for any reason, Executive shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement, the
Indemnification Agreement, the Company’s bylaws (as may be amended from time to
time), the Company’s Restated Certificate of Incorporation (as may be amended
from time to time), and/or any other agreement evidencing the grant to Executive
of equity compensation that is hereafter entered into by the parties.

3. Covered Termination Other Than During a Change in Control Period.

If Executive experiences a Covered Termination at any time other than during a
Change in Control Period, and if Executive delivers to the Company a general
release of all claims against the Company and its affiliates that becomes
effective and irrevocable in accordance with Section 15(a)(v) hereof in the form
of Exhibit A hereto (a “Release of Claims”), then in addition to any accrued but
unpaid salary, bonus (including any bonus for any completed prior fiscal year,
paid when it otherwise would have been paid had Executive continued employment),
vacation and expense reimbursement payable in accordance with applicable law, or
benefits (other than severance) under any Company benefit plan, program or
practice (provided or paid in accordance

 

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with the terms thereof) (the “Accrued Amounts”) the Company shall provide
Executive with the following:

(a) Severance. Executive shall be entitled to receive an amount equal to two
times (2x) Executive’s annual base salary at the rate in effect immediately
prior to the Termination Date (but not less than the rate of his Base Salary
under the employment agreement entered into by the Executive and the Company as
of the same date hereof (the “Employment Agreement”)) paid in a single cash lump
sum, less authorized deductions and applicable withholding taxes, on the first
payroll date following the date the Release of Claims becomes effective and
irrevocable.

(b) Equity Awards. Each outstanding and unvested equity award, including,
without limitation, each stock option and restricted stock award, held by
Executive that vests solely based upon Executive’s continued employment shall
automatically become vested and, if applicable, exercisable and any forfeiture
restrictions or rights of repurchase thereon shall immediately lapse, as of
immediately prior to the Termination Date with respect to that number of shares
of Company Class A Common Stock that would have vested had Executive continued
employment with the Company through the first anniversary of the Termination
Date. In addition, any time-based vesting requirement with respect to any
outstanding and unvested performance-based equity award, including, without
limitation, any performance-based stock option and performance stock award, held
by Executive as of the Termination Date shall be waived such that any such
outstanding and unvested performance-based equity award shall immediately vest
and, if applicable, become exercisable and any forfeiture restrictions or rights
of repurchase thereon shall immediately lapse, as of immediately prior to the
Termination Date with respect to all of the shares of Company Class A Common
Stock subject thereto for which the applicable performance goal has been
achieved, provided that, if the performance period for any such equity awards
has not yet expired and

 

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Executive’s termination of employment occurs on or after the date on which at
least fifty percent (50%) of the performance period applicable to any such
equity awards has lapsed, the employment condition shall be deemed satisfied but
the performance goals shall be adjusted to account for, and measured through,
the fiscal quarter end nearest to the Termination Date and any vesting based on
the performance goals shall be prorated based on the period of the performance
measuring period during which Executive was employed by the Company (the
acceleration described in this paragraph, the “Partial Acceleration”).

(c) Continued Healthcare. If Executive elects to receive continued healthcare
coverage pursuant to the provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), the Company shall directly
pay, or reimburse Executive for, the premium for Executive and Executive’s
covered dependents, if any, through the earliest of (i) the twenty-four
(24) month anniversary of the Termination Date, (ii) the date Executive and
Executive’s covered dependents, if any, become eligible for healthcare coverage
under another employer of Executive plan(s) and (iii) the date that Executive
and/or Executive’s covered dependents, if any, become no longer eligible for
COBRA. Any such payment or reimbursement shall be subject to any required
withholding taxes. After the Company ceases to pay premiums pursuant to the
preceding sentence, Executive may, if eligible, elect to continue healthcare
coverage at Executive’s expense in accordance the provisions of COBRA.

(d) Pro Rata Bonus. In the event Executive’s Covered Termination occurs after
fifty percent (50%) or more of the measurement period for Executive’s annual
bonus has lapsed, Executive shall receive a pro rata bonus for the fiscal year
of termination based on achievement of the applicable performance goals for the
fiscal year of termination adjusted to account for, and measured through, the
fiscal quarter end nearest to the Termination Date and the number of days in

 

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the fiscal year during which Executive was employed as compared to 365. Such
bonus, if any, shall be paid in a single cash lump sum, less authorized
deductions and applicable withholding taxes, on the first payroll date following
the date the Release of Claims becomes effective and irrevocable (the “Pro Rata
Bonus”).

4. Covered Termination During a Change in Control Period.

If Executive experiences a Covered Termination during a Change in Control
Period, and if Executive executes and does not revoke a Release of Claims in
accordance with Section 15(a)(v) hereof, then in addition to any Accrued
Amounts, the Company shall provide Executive with the following:

(a) Severance. Executive shall be entitled to receive an amount equal to two
times (2x) the sum of Executive’s annual base salary and annual target bonus
opportunity, in each case, at the rate in effect immediately prior to the
Termination Date (but in no event less than the rates specified in the
Employment Agreement) payable in a cash lump sum, less authorized deductions and
applicable withholding taxes, on the first payroll date following the date the
Release of Claims becomes effective and irrevocable.

(b) Equity Awards. Each outstanding and unvested equity award, including,
without limitation, each stock option, restricted stock award and performance
stock award, held by Executive shall automatically become vested and, if
applicable, exercisable and any forfeiture restrictions or rights of repurchase
thereon shall immediately lapse, as of immediately prior to the Termination Date
with respect to one hundred percent (100%) of the unvested shares underlying
Executive’s equity awards (with any performance goals deemed achieved at
target). In all other respects Executive’s equity awards shall continue to be
bound by and subject to the terms of their respective agreements and equity
plans.

 

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(c) Continued Healthcare. If Executive elects to receive continued healthcare
coverage pursuant to the provisions of COBRA, the Company shall directly pay, or
reimburse Executive for, the premium for Executive and Executive’s covered
dependents, if any, through the earliest of (i) the twenty-four (24) month
anniversary of the Termination Date, (ii) the date Executive and Executive’s
covered dependents, if any, become eligible for healthcare coverage under
another employer of Executive plan(s) and (iii) the date that Executive and/or
Executive’s covered dependents, if any, become no longer eligible for COBRA. Any
such payment or reimbursement shall be subject to any required withholding
taxes. After the Company ceases to pay premiums pursuant to the preceding
sentence, Executive may, if eligible, elect to continue healthcare coverage at
Executive’s expense in accordance the provisions of COBRA.

(d) Pro Rata Bonus. In the event Executive’s Covered Termination occurs after
fifty percent (50%) or more of the measurement period for Executive’s annual
bonus has lapsed, Executive shall receive a Pro Rata Bonus.

5. Non-Renewal of Employment Agreement.

In the event the Company provides Executive a Notice of Non-Renewal in
accordance with Section 1(b) of the Employment Agreement and Executive’s
employment with the Company terminates at the end of the then current Term (as
defined in the Employment Agreement) (a “Non-Renewal Termination”), and if
Executive executes and does not revoke a Release of Claims in accordance with
Section 15(a)(v) hereof, then in addition to any Accrued Amounts, the Company
shall provide Executive with Partial Acceleration.

6. In Contemplation.

In the event Executive is terminated in Contemplation of a Change in Control,
Executive shall receive the amounts under Section 3 hereof, provided that, if
the Change of Control actually

 

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occurs and that Change in Control satisfies the requirements of Treasury
Regulation 1.409A-3(i)(5), upon such Change in Control an extra payment and
vesting shall be immediately made to Executive of any difference between the
amounts due under Section 3 and the amounts due under Section 4.

7. Other Terminations.

If Executive’s service with the Company is terminated by the Company or by
Executive for any or no reason other than as a Covered Termination or a
Non-Renewal Termination, then Executive shall only be entitled to Accrued
Amounts and, if as a result of death or a Disability Termination, Executive
shall receive a pro rata bonus for the fiscal year of termination based on
achievement of the applicable performance goals for the fiscal year of
termination and the number of days in the fiscal year during which Executive was
employed as compared to 365. Such bonus, if any, shall be paid when it would
have been paid if Executive had continued employment.

8. Deemed Resignation.

Upon termination of Executive’s employment for any reason, Executive shall be
deemed to have resigned from all offices and directorships, if any, then held
with the Company or any of its affiliates, and, at the Company’s request,
Executive shall execute such documents as are necessary or desirable to
effectuate such resignations.

9. Limitation on Payments.

Notwithstanding anything in this Agreement to the contrary, if any payment or
distribution Executive would receive pursuant to this Agreement or otherwise
(“Payment”) would (a) constitute a “parachute payment” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and
(b) but for this sentence, be subject to the excise tax imposed by Section 4999
of the Code (the “Excise Tax”), then such Payment shall either be (i) delivered
in full or (ii) delivered as to such lesser extent which would result in no
portion of such Payment being subject to

 

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the Excise Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income and payroll taxes and the Excise Tax,
results in the receipt by Executive on an after-tax basis, of the largest
payment, notwithstanding that all or some portion the Payment may be taxable
under Section 4999 of the Code. The accounting firm engaged by the Company for
general audit purposes as of the day prior to the effective date of the Change
in Control or, in the event such accounting firm is precluded from performing
calculations hereunder, such other accounting firm of national reputation
determined by the Company, and reasonably acceptable to Executive, shall perform
the foregoing calculations. The Company shall bear all expenses with respect to
the determinations by such accounting firm required to be made hereunder. The
accounting firm shall provide its calculations to the Company and Executive
within fifteen (15) calendar days after the date on which Executive’s right to a
Payment is triggered (if requested at that time by the Company or Executive) or
such other time as requested by the Company or Executive. Any good faith
determinations of the accounting firm made hereunder shall be final, binding and
conclusive upon the Company and Executive. Any reduction in payments and/or
benefits pursuant to this Section 9 will occur in the following order:
(1) reduction of cash payments; (2) cancellation of accelerated vesting of
equity awards other than stock options (with the later vesting reduced first)
(3) cancellation of accelerated vesting of stock options (with the later vesting
reduced first) and (4) reduction of other benefits payable to Executive.

10. Definition of Terms.

The following terms referred to in this Agreement shall have the following
meanings:

(a) Cause. “Cause” means (i) any act of material willful misconduct or material
dishonesty by Executive in the performance of his duties; (ii) any willful
failure, neglect or refusal by Executive to attempt in good faith to perform his
duties under this Agreement or to follow the

 

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lawful instructions of the Board (except as a result of physical or mental
incapacity or illness) which is not promptly cured after written notice;
(iii) Executive’s commission of any fraud or embezzlement against the Company
(whether or not a misdemeanor); (iv) any material breach of the Employment
Agreement, which breach has not been cured by Executive (if curable) within
thirty (30) days after written notice thereof to Executive by the Company;
(v) Executive’s being convicted of (or pleading guilty or nolo contendere to)
any felony or misdemeanor involving theft, embezzlement, dishonesty or moral
turpitude; and/or (vi) Executive’s failure to materially comply with the
material policies of the Company in effect from time to time relating to
conflicts of interest, ethics, codes of conduct, insider trading, or
discrimination and harassment, or other breach of Executive’s fiduciary duties
to the Company, which failure or breach is materially injurious to the business
or reputation of the Company.

(b) Change in Control. “Change in Control” means either:

(i) any “person” (as such term is defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes, after the Effective
Date, a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than
fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities eligible to vote for the election of the Board (the
“Company Voting Securities”); provided, however, that an event described in this
clause (i) shall not be deemed to be a Change in Control if any of following
becomes such a beneficial owner: (A) the Company or any majority-owned
subsidiary (provided, that this exclusion applies solely to the ownership levels
of the Company or the majority-owned subsidiary), (B) any tax-qualified,
broad-based employee benefit plan sponsored or maintained by the Company or any
majority-owned subsidiary, (C) any

 

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underwriter temporarily holding securities pursuant to an offering of such
securities, or (D) any person pursuant to a Non-Qualifying Transaction (as
defined in clause (ii)); or

(ii) the consummation of a merger, consolidation, statutory share exchange or
similar form of corporate transaction involving the Company or any of its
subsidiaries that requires the approval of the Company’s stockholders, whether
for such transaction or the issuance of securities in the transaction (a
“Business Combination”), unless immediately following such Business Combination:
(A) more than fifty percent (50%) of the total voting power of (x) the
corporation resulting from such Business Combination (the “Surviving
Corporation”), or (y) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of one hundred (100%) of the
voting securities eligible to elect directors of the Surviving Corporation (the
“Parent Corporation”), is represented by Company Voting Securities that were
outstanding immediately prior to such Business Combination (or, if applicable,
is represented by shares into which such Company Voting Securities were
converted pursuant to such Business Combination), and such voting power among
the holders thereof is in substantially the same proportion as the voting power
of such Company Voting Securities among the holders thereof immediately prior to
the Business Combination, (B) no person (other than any employee benefit plan
(or related trust) sponsored or maintained by the Surviving Corporation or the
Parent Corporation), is or becomes the beneficial owner, directly or indirectly,
of more than fifty percent (50%) of the total voting power of the outstanding
voting securities eligible to elect directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation) and (C) at least a
majority of the members of the board of directors of the Parent Corporation (or
if there is no Parent Corporation, the Surviving Corporation) following the
consummation of the Business Combination were members of the Board as of the
date hereof at the time of the Board’s approval of the execution of the initial
agreement

 

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providing for such Business Combination (any Business Combination which
satisfies all of the criteria specified in (A), (B) and (C) above shall be
deemed to be a “Non-Qualifying Transaction”).

(c) Change in Control Period. “Change in Control Period” means the 12-month
period of time commencing upon a Change in Control.

(d) “Contemplation of a Change in Control” means a Covered Termination that
occurs as a result of an action directed or requested by a person that directly
or indirectly undertakes a transaction that constitutes a Change in Control of
the Company.

(e) Covered Termination. “Covered Termination” means Executive’s resignation for
Good Reason or the termination of Executive’s employment by the Company other
than for Cause that, in each case and to the extent necessary, constitutes a
Separation from Service (as defined below), provided, that in no event shall a
Non-Renewal Termination constitute a Covered Termination.

(f) “Disability Termination” means a termination of employment by the Company of
the Executive after the Executive has been unable for 180 days in any 365 day
period to perform his material duties because of physical or mental incapacity
or illness.

(g) Good Reason. “Good Reason” means the occurrence, without Executive’s written
consent, of any of the following: (i) a material diminution in Executive’s base
compensation; (ii) a material diminution in Executive’s job responsibilities,
duties or authorities, (iii) a material change of at least fifty (50) miles in
the geographic location at which Executive must regularly perform Executive’s
services or (iv) any material breach of the Employment Agreement by the Company.
Notwithstanding the foregoing, Executive shall not be deemed to have “Good
Reason” unless: (x) the condition giving rise to such resignation continues more
than thirty (30) days following Executive’s providing to the Company a written
notice of detailing such condition (y)

 

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such written notice is provided to the Company within ninety (90) days of the
initial occurrence of such condition and (z) Executive’s resignation is
effective within thirty (30) days following the expiration of the Company cure
period pursuant to subclause (x). For the avoidance of doubt, the provision by
the Company of a Notice of Non-Renewal shall not constitute Good Reason
hereunder.

(h) Termination Date. “Termination Date” means the date Executive experiences a
Covered Termination.

11. Assignment and Successors.

The Company may, subject to the next sentence and only with the Employment
Agreement, assign its rights and obligations under this Agreement to any
successor to all or substantially all of the business or the assets of the
Company (by merger or otherwise). Any successor to the Company (whether direct
or indirect and whether by purchase, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company’s business and/or assets
shall assume the obligations under this Agreement and the Employment Agreement
and agree expressly to perform the obligations under this Agreement in the same
manner and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. For all purposes under this
Agreement, the term “Company” shall include any successor to the Company’s
business and/or assets in accordance with the first sentence of this Section
which executes and delivers the assumption agreement described in this
Section 11 or which becomes bound by the terms of this Agreement by operation of
law. This Agreement shall be binding upon and inure to the benefit of the
Company, Executive and their respective successors, permitted assigns, personnel
and legal representatives, executors, administrators, heirs, distributees,
devisees, and legatees, as applicable. None of Executive’s rights or obligations
may be assigned or transferred by Executive, other than

 

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Executive’s rights to payments hereunder, which may be transferred only by will
or operation of law.

12. Notices.

Any notice, request, claim, demand, document and other communication hereunder
to any party shall be effective upon receipt (or refusal of receipt) and shall
be in writing and delivered personally or sent by facsimile or certified or
registered mail, postage prepaid (or if it is sent through any other method
agreed upon by the parties), as follows:

(i) if to the Company:

Company: The Wet Seal, Inc.

Address: 26972 Burbank

Foothill Ranch, CA 92610

Attn: Board of Directors

Facsimile: (949) 206-4977

(ii) if to Executive, at the address set forth in Executive’s personnel file
with the Company; or

(iii) at any other address as any party shall have specified by notice in
writing to the other party.

13. Confidentiality; Non-Disparagement.

(a) Confidentiality. Executive shall enter into and abide by the Company’s
standard Confidentiality and Non-Solicitation Agreement (the “Confidential
Information Agreement”). Notwithstanding the foregoing or anything in the
Confidential Information Agreement to the contrary, in the event of a conflict
or inconsistency between the Confidential Information Agreement and this
Agreement or the Employment Agreement, the terms of this

 

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Agreement or the Employment Agreement, as applicable, shall apply. For the
purposes of the Confidential Information Agreement, this Agreement shall be
deemed to be an employment agreement.

(b) Non-Disparagement. Executive agrees that he shall not disparage, criticize
or defame the Company, its affiliates and their respective affiliates,
directors, officers, agents, partners, shareholders or employees, either
publicly or privately, except in the reasonable good faith performance of his
duties to the Company. The Company agrees that for the same period it shall not,
and it shall instruct its officers and members of its Board to not, disparage,
criticize or defame Executive, either publicly or privately. Nothing in this
Section 13(b) shall have application to any evidence, testimony or disclosure
required by any court, arbitrator or government agency.

14. Dispute Resolution.

The parties agree that if any disputes should arise between Executive and the
Company (including claims against its employees, officers, directors,
shareholders, agents, successors and assigns) relating or pertaining to or
arising out of Executive’s employment with the Company, the dispute will be
submitted exclusively to binding arbitration before a neutral arbitrator in
accordance with the rules of the American Arbitration Association in Los
Angeles, California. This means that disputes will be decided by an arbitrator
rather than a court or jury, and that both Executive and the Company waive their
respective rights to a court or jury trial, except to enforce the decision of
the arbitrator. The parties understand that the arbitrator’s decision will be
final and exclusive, and cannot be appealed. Nothing in this Agreement is
intended to prevent either Executive or the Company from obtaining injunctive
relief in court to prevent irreparable harm pending the conclusion of any such
arbitration. Notwithstanding the foregoing, Executive and the

 

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Company each have the right to resolve any issue or dispute over intellectual
property rights by Court action instead of arbitration.

15. Miscellaneous Provisions.

(a) Section 409A.

(i) Separation from Service. Notwithstanding any provision to the contrary in
this Agreement, no amount deemed deferred compensation subject to Section 409A
of the Code shall be payable pursuant to Sections 3, 4 or 5 above unless
Executive’s termination of employment constitutes a “separation from service”
with the Company within the meaning of Section 409A of the Code and the
Department of Treasury regulations and other guidance promulgated thereunder
(“Separation from Service”) and, except as provided under Section 15(a)(ii) of
this Agreement, any such amount shall not be paid, or in the case of
installments, commence payment, until the sixtieth (60th) day following
Executive’s Separation from Service. Any installment payments that would have
been made to Executive during the sixty (60) day period immediately following
Executive’s Separation from Service but for the preceding sentence shall be paid
to Executive on the sixtieth (60th) day following Executive’s Separation from
Service and the remaining payments shall be made as provided in this Agreement.

(ii) Specified Employee. Notwithstanding any provision to the contrary in this
Agreement, if Executive is deemed at the time of his separation from service to
be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code,
to the extent delayed commencement of any portion of the benefits to which
Executive is entitled under this Agreement is required in order to avoid a
prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion
of Executive’s benefits shall not be provided to Executive prior to the earlier
of (A) the expiration of the six (6)-month period measured from the date of
Executive’s Separation from

 

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Service or (B) the date of Executive’s death. Upon the first business day
following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period,
all payments deferred pursuant to this Section 15(a)(ii) shall be paid in a lump
sum to Executive, and any remaining payments due under this Agreement shall be
paid as otherwise provided herein.

(iii) Expense Reimbursements. To the extent that any reimbursements payable
pursuant to this Agreement are subject to the provisions of Section 409A of the
Code, any such reimbursements payable to Executive pursuant to this Agreement
shall be paid to Executive no later than December 31 of the year following the
year in which the expense was incurred, the amount of expenses reimbursed in one
year shall not affect the amount eligible for reimbursement in any subsequent
year, and Executive’s right to reimbursement under this Agreement will not be
subject to liquidation or exchange for another benefit.

(iv) Installments. For purposes of Section 409A of the Code (including, without
limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)),
Executive’s right to receive any installment payments under this Agreement shall
be treated as a right to receive a series of separate payments and, accordingly,
each such installment payment shall at all times be considered a separate and
distinct payment.

(v) Release. Notwithstanding anything to the contrary in this Agreement, to the
extent that any payments due under this Agreement as a result of Executive’s
termination of employment are subject to Executive’s execution and delivery of a
Release of Claims, (A) the Company shall deliver the Release of Claims to
Executive within ten (10) business days following the Termination Date, (B) if
Executive fails to execute the Release of Claims on or prior to the Release
Expiration Date (as defined below) or timely revokes his acceptance of the
Release of Claims thereafter, Executive shall not be entitled to any payments or
benefits otherwise conditioned

 

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on the Release of Claims, and (C) in any case where the Termination Date and the
Release Expiration Date fall in two separate taxable years, any payments
required to be made to Executive that are conditioned on the Release of Claims
and are treated as nonqualified deferred compensation for purposes of
Section 409A shall be made in the later taxable year. For purposes of this
Section 15(a)(v), “Release Expiration Date” shall mean the date that is
twenty-one (21) days following the date upon which the Company timely delivers
the Release of Claims to Executive or, in the event that Executive’s termination
of employment is “in connection with an exit incentive or other employment
termination program” (as such phrase is defined in the Age Discrimination in
Employment Act of 1967), the date that is forty-five (45) days following such
delivery date. To the extent that any payments of nonqualified deferred
compensation (within the meaning of Section 409A) due under this Agreement as a
result of Executive’s termination of employment are delayed pursuant to this
Section 15(a)(v), such amounts shall be paid in a lump sum on the first payroll
date following the date that Executive executes and does not revoke the Release
of Claims (and the applicable revocation period has expired) or, in the case of
any payments subject to Section 15(a)(v)(C), on the first payroll period to
occur in the subsequent taxable year, if later.

(b) Withholding. The Company shall be entitled to withhold from any amounts
payable under this Agreement any federal, state, local or foreign withholding or
other taxes or charges which the Company is required to withhold. The Company
shall be entitled to rely on an opinion of counsel if any questions as to the
amount or requirement of withholding shall arise.

(c) Amendment; Waiver. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, signed by Executive and approved
by the Board. By an instrument in writing similarly executed, Executive or,
following approval by the Board, the individual authorized by the Board in such
approval, as applicable, may waive compliance by the

 

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other party with any specifically identified provision of this Agreement that
such other party was or is obligated to comply with or perform; provided,
however, that such waiver shall not operate as a waiver of, or estoppel with
respect to, any other or subsequent failure. No failure to exercise and no delay
in exercising any right, remedy, or power hereunder preclude any other or
further exercise of any other right, remedy, or power provided herein or by law
or in equity.

(d) Entire Agreement. The terms of this Agreement, collectively with the
Employment Agreement and the Confidential Information Agreement, is intended by
the Parties to be the final expression of their agreement with respect to the
employment of Executive by the Company and supersede all prior understandings
and agreements, whether written or oral. The parties further intend that this
Agreement, collectively with the Employment Agreement and the Confidential
Information Agreement, shall constitute the complete and exclusive statement of
their terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding to vary the terms of this
Agreement.

(e) Choice of Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of California.

(f) Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.

(g) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and
the same instrument.

(Signature page follows)

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year set forth
below.

 

THE WET SEAL, INC. By:  

 

Title:  

Chairman of the Board of Directors

Date:   January 7, 2013 EXECUTIVE

 

John Goodman

Date:   January 7, 2013

SIGNATURE PAGE TO CHANGE IN CONTROL AND SEVERANCE AGREEMENT

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Exhibit A

Form of Release

1. Termination of Employment. John Goodman (“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 Change in Control and
Severance Agreement, by and between the Company and Executive, dated as of
January 7, 2013 (the “Severance 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, 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 Severance Agreement upon termination of employment, employee
benefit plans of the Company, Executive’s equity awards and equity in the
Company, or Executive’s right to indemnification as provided in Executive’s
Indemnification Agreement with the Company, the Company’s bylaws (as amended
from time to time), the Restated Certificate of Incorporation of the Company (as
amended from time to time), any other plan or agreement or at law, or
Executive’s coverage under any directors and officers liability insurance
policies.

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

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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 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 the 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.

 

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(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 and the Severance 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
arbitration provisions of the Severance Agreement.

(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.

IN WITNESS WHEREOF, the parties hereto have executed this Release on
                    , 20        .

 

THE WET SEAL, INC. By:  

 

  Name:   Title:

 

John Goodman

 

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