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EXHIBIT 10.27
THE WET SEAL, INC.
2005 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
This Stock Option Agreement (the " Agreement ") is
made and entered into as of the date of grant set forth below (the
" Date of Grant ") by and between The Wet Seal, Inc.,
Delaware corporation (the " Company "), and
participant named below (" Participant ").
Capitalized terms not defined herein will have the meaning ascribed
to them in the Company’s 2005 Stock Incentive Plan (the "
Plan ").
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Participant:
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Total Option Shares:
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Exercise Price Per Share:
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Date of Grant:
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Type of Stock Option
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(Check One):
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¨ Incentive Stock Option, to the maximum extent
permissible
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x Nonqualified Stock Option
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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 set forth
above (the " Exercise Price "), subject to all of the
terms and conditions of this Agreement and the Plan. If designated
as an Incentive Stock Option above, the Option is intended to
qualify as an "incentive stock option" (the " ISO ")
within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the " Code "), although the
Company makes no representation or guarantee that such Option will
qualify as an ISO. The Option will be an ISO to the maximum extent
permitted under the Code and any portion which cannot qualify will
be a Nonqualified Stock Option
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 subject thereto
on each of the next three (3) anniversaries of the Date of
Grant until the Option is 100% vested. 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.
Page 1 of 6
2.2 The Option will expire on the date five
(5) years from the Date of Grant, or earlier as provided in
this Agreement or the Plan.
3. Termination of Continuous Service .
3.1 If Participant’s Continuous Service is terminated,
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, 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, the Option will terminate on the
Termination Date, regardless of whether the Option was 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. The
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 or
her Continuous Service at any time.
4. Manner of Exercise .
4.1 A Participant (or in the case of exercise after
Participant’s death or incapacity, Participant’s
executor, administrator, heir or legatee, as the case may be) may
exercise his or her 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
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 the 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
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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 the Participant and a broker-dealer
selected by the Company that is a member of the National
Association of Securities Dealers (an "NASD Dealer") whereby the
Participant irrevocably elects to exercise the Option 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) disposition of shares of Common Stock acquired
pursuant to the exercise of an Incentive Stock Option granted
pursuant to the Plan with
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