Retention Agreement between The Wet Seal, Inc. and Joseph Deckop dated October 28, 2004
This agreement is between The Wet Seal, Inc. and Joseph Deckop, Executive Vice President. It provides Mr. Deckop with a one-time retention payment of $100,000, payable on December 1, 2004, which must be repaid if he leaves voluntarily within 12 months. He is also granted 155,000 shares of restricted stock, vesting over three years, with accelerated vesting and severance pay if he is terminated involuntarily or if there is a change in control of the company. The agreement outlines the terms and conditions for these incentives and protections.
Exhibit 10.5
October 27, 2004
Joseph Deckop
The Wet Seal, Inc.
26972 Burbank
Foothill Ranch, California 92610
Dear Joe:
I would like to formalize our discussions with regard to changes in your employment at The Wet Seal, Inc.
Joe, we would like you to continue your role as Executive Vice President, and the Compensation Committee has agreed to provide and authorized me to offer the following incentives, which includes a one-time retention payment to you.
As the Company transitions through a variety of options over the coming months, the Compensation Committee has approved a one-time retention cash payment of $100,000, which is roughly equal to your current annual target bonus. The award will be paid on December 1, 2004, and would be owed back to the Company in full if you were to leave voluntarily within 12 months.
In addition to this, the Company will grant you 155,000 shares of restricted stock in Wet Seal. The shares would vest 25% on the first anniversary of the grant, and 25% on the second anniversary, and 50% on the third anniversary. The vesting period would be three years. In the event of involuntary termination, vesting will be accelerated on the next tranche of options, e.g., if termination were to occur before the first anniversary of the grant, 25% of the grant would become vested; if termination were to occur after the first but before the second anniversary of the grant, an additional 25% of the grant would become vested. If involuntary termination occurs in connection with a Change in Control (as defined below), then the full grant will be immediately vested.
With regard to severance protection, in the event of involuntary termination (with or without a Change in Control) the Company will pay you an amount equal to one (1) times your base salary in cash on the termination date.
26972 burbank
foothill ______________DECKOP RE EMPLOYMENT
949 ###-###-#### ###-###-#### fax
“Change in Control” means an event consisting of any person or group both (a) becoming the beneficial owner directly or indirectly of 20% or more of the outstanding voting securities of The Wet Seal, Inc. and (b) of whose beneficial share ownership exceeds the numbers of shares owned beneficially by all directors an officers of The Wet Seal, Inc. (excluding shares owned beneficially by any director or officer who is the person or a member of the group). The existence of a “group” and the “beneficial ownership” of shares shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934 and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
I would ask that you please return a signed copy to me agreeing to these terms and conditions so that I may pass this on to the Compensation Committee as soon as possible.
Sincerely,
| /s/ Peter D. Whitford |
| Peter D. Whitford |
| Chairman and Chief Executive Officer |
| /s/ Joseph Deckop |
| Joseph Deckop |
| Executive Vice President |
Date: 10/28/04
_A Ltr to Jeseph Deckop on Wet Seal Letterhead
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