Exhibit 10.1

 

THE WET SEAL, INC.

 

July 6, 2005

 

Mr. Michael Gold

YM inc.

50 Dufflaw Road

Toronto, Ontario M6A2W1

 

Dear Michael:

 

We are pleased to set forth the framework of your continuing relationship as a
consultant to The Wet Seal, Inc. (the “Company”).

 

Position and Duties:   You have been consulting for us since November 1, 2004
and shall continue to serve as a consultant to the Company in the manner you are
presently acting, routinely working with our merchants and buyers, consulting
with the Board and the Company’s Chief Executive Officer concerning the
merchandising of the stores of our Wet Seal division and the retention of
appropriate executive personnel for that division. We will discuss with you any
plans for the opening or closing of Wet Seal stores. You will be provided
regularly (weekly/monthly and quarterly) with financial and other information
you believe necessary for proper management of the division and you will be
invited to attend board meetings as an observer subject to the confidentiality
provisions contemplated hereby. Effective Date:   January 1, 2005 (Grant Date).

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Term:   Through and including January 31, 2007. Cash Payment:   $4,000,000
payable in the following manner: $2,100,000 upon the execution of this Agreement
and $1,900,000 in 19 equal monthly installments of $100,000 commencing as of
July 1, 2005 ($4,000,000 total). Equity:   Restricted Stock – Time Based. A
grant of 2,000,000 shares, which shall vest on January 28, 2006 in accordance
with the terms of the Award Agreement attached as Exhibit A hereto.    
Performance Shares. A grant of 3,500,000 shares which shall vest in accordance
with the schedule contained in the Award Agreement, attached as Exhibit A (The
Company acknowledges that 300,000 of these Performance Shares, must be issued
under a separate Performance Grant pursuant to a shareholder approved plan
within the next 30 days.) Conflict of Interest:   You have disclosed to the
Company the extent and the nature of your retail businesses and the Company
acknowledges that there are no conflicts of interest which shall affect the
performance of your duties hereunder. You agree that if you or any of your
affiliates find or are offered a store location in the United States or any of
its territories for your business, the Company shall be given written notice of
the location of the store and its intended purpose and a period of 7 days to
object to your opening such store. If the Company objects, you will not open the
store. Sale of Company:   All unvested shares will vest upon a change in control
as defined in Section 2.3 of the Company’s 2005 Stock Incentive Plan, as amended
from time to time.

 

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Restrictive Covenants:   Standard confidentiality and non-solicitation
provisions shall apply. Restrictions on Resale:   The restricted shares and the
performance shares (collectively, the “Shares”) will be unregistered under the
securities laws. The Company shall include the Shares under a registration
statement on Form S-8 to be filed with the Securities and Exchange Commission as
promptly as practicable.     In the event the registration statement on Form S-8
covering the resale of the Shares is not available at the time you wish to sell
your vested Shares, the Company will use its reasonable best efforts, at it’s
expense, to file one or more registration statements covering the resale of the
vested Shares at such times and in such amounts of Shares as you request, and
shall maintain the effectiveness of the registration statement(s) until you have
sold all of the vested Shares or until such time as they may be sold by you
without the necessity of a registration statement under applicable law.
Governing Law:   California. Dispute Resolution:   Binding Arbitration.

 

Very truly yours,

 

THE WET SEAL, INC.

 

By:

 

/s/ JOEL WALLER

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    Joel Waller, President Agreed:

/s/ MICHAEL GOLD

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Michael Gold

 

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