Exhibit 10.9.2

COST PLUS, INC.

2004 STOCK PLAN

STOCK OPTION AWARD AGREEMENT

Unless otherwise defined herein, the terms defined in the 2004 Stock Plan will
have the same defined meanings in this Award Agreement.

 

I. NOTICE OF STOCK OPTION GRANT

Name                                                      

Residence Address:

_______________________________

_______________________________

You have been granted an option to purchase Common Stock of the Company, subject
to the terms and conditions of the Plan and this Award Agreement, as follows:

 

Date of Grant    _____________________ Vesting Commencement Date   
_____________________ Exercise Price per Share    $____________________ Total
Number of Shares Granted    _____________________ Total Exercise Price   
$____________________ Type of Option:    ¨ Incentive Stock Option   
x Nonstatutory Stock Option Term/Expiration Date:    _____________________

Vesting Schedule:

Subject to accelerated vesting as set forth in the Plan, this Option may be
exercised, in whole or in part, in accordance with the following schedule:

1/4 of the Shares subject to the Option will vest twelve months after the
Vesting Commencement Date, and 1/4 of the Shares subject to the Option will vest
each year thereafter on the same day of the month as the Vesting Commencement
Date, subject to Participant continuing to be a Service Provider through each
vesting date.

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Termination Period:

This Option shall be exercisable for three months after Participant ceases to be
a Service Provider, unless such termination is due to Participant’s death or
Disability, in which case this Option shall be exercisable for one (1) year
after Participant ceases to be Service Provider. Notwithstanding the foregoing,
in no event may this Option be exercised after the Term/Expiration Date as
provided above.

 

II. AGREEMENT

 

  A. Grant of Option.

The Administrator hereby grants to the individual named in the Notice of Grant
attached as Part I of this Agreement (the “Participant”) an option (the
“Option”) to purchase the number of Shares, as set forth in the Notice of Grant,
at the exercise price per Share set forth in the Notice of Grant (the “Exercise
Price”), subject to the terms and conditions of the Plan, which is incorporated
herein by reference. Subject to Section 18(c) of the Plan, in the event of a
conflict between the terms and conditions of the Plan and the terms and
conditions of this Award Agreement, the terms and conditions of the Plan will
prevail.

If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this
Option is intended to qualify as an Incentive Stock Option under Section 422 of
the Code. However, if this Option is intended to be an Incentive Stock Option,
to the extent that it exceeds the $100,000 rule of Code Section 422(d) it will
be treated as a Nonstatutory Stock Option (“NSO”). Further, if for any reason
this Option (or portion thereof) shall not qualify as an ISO, then, to the
extent of such nonqualification, such Option (or portion thereof) shall be
regarded as a NSO granted under the Plan. In no event shall the Administrator,
the Company or any Parent or Subsidiary or any of their respective employees or
directors have any liability to Participant (or any other person) due to the
failure of the Option to qualify for any reason as an ISO.

 

  B. Exercise of Option.

(a) Right to Exercise. This Option is exercisable during its term in accordance
with the Vesting Schedule set out in the Notice of Grant and the applicable
provisions of the Plan and this Award Agreement.

(b) Method of Exercise. This Option is exercisable by delivery of an exercise
notice, in the form attached as Exhibit A (the “Exercise Notice”), which will
state the election to exercise the Option, the number of Shares with respect to
which the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise Notice will be completed by Participant and
delivered to the Company. The Exercise Notice will be accompanied by payment of
the aggregate Exercise Price as to all Exercised Shares together with any
applicable withholding taxes. This Option will be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice accompanied by
such aggregate Exercise Price.

No Shares will be issued pursuant to the exercise of this Option unless such
issuance and exercise comply with Applicable Laws. Assuming such compliance, for
income tax purposes the Exercised Shares will be considered transferred to
Participant on the date the Option is exercised with respect to such Exercised
Shares.

 

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  C. Method of Payment.

Payment of the aggregate Exercise Price will be by any of the following, or a
combination thereof, at the election of Participant:

1. cash;

2. check;

3. consideration received by the Company under a formal cashless exercise
program adopted by the Company in connection with the Plan; or

4. surrender of other Shares which (A) shall be valued at its Fair Market Value
on the date of exercise, and (B) must be owned free and clear of any liens,
claims, encumbrances or security interests, if accepting such Shares, in the
sole discretion of the Administrator, shall not result in any adverse accounting
consequences to the Company.

 

  D. Non-Transferability of Option.

This Option may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Participant only by
Participant. The terms of the Plan and this Award Agreement will be binding upon
the executors, administrators, heirs, successors and assigns of Participant.

 

  E. Term of Option.

This Option may be exercised only within the term set out in the Notice of
Grant, and may be exercised during such term only in accordance with the Plan
and the terms of this Award Agreement.

 

  F. Tax Obligations.

1. Withholding Taxes. Participant agrees to make appropriate arrangements with
the Company (or the Parent or Subsidiary employing or retaining Participant) for
the satisfaction of all Federal, state, local and foreign income and employment
tax withholding requirements applicable to the Option exercise. Participant
acknowledges and agrees that the Company may refuse to honor the exercise and
refuse to deliver Shares if such withholding amounts are not delivered at the
time of exercise.

2. Notice of Disqualifying Disposition of ISO Shares. If the Option granted to
Participant herein is an ISO, and if Participant sells or otherwise disposes of
any of the Shares acquired pursuant to the ISO on or before the later of (1) the
date two years after the Grant Date, or (2) the date one year after the date of
exercise, Participant will immediately notify the Company in writing of such
disposition. Participant agrees that Participant may be subject to income tax
withholding by the Company on the compensation income recognized by Participant.

 

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3. Code Section 409A. Under Code Section 409A, an Option that vests after
December 31, 2004 (or that vested on or prior to such date but which was
materially modified after October 3, 2004) that was granted with a per Share
exercise price that is determined by the Internal Revenue Service (the “IRS”) to
be less than the Fair Market Value of a Share on the date of grant (a “discount
option”) may be considered “deferred compensation.” An Option that is a
“discount option” may result in (i) income recognition by Participant prior to
the exercise of the Option, (ii) an additional twenty percent (20%) federal
income tax, and (iii) potential penalty and interest charges. The “discount
option” may also result in additional state income, penalty and interest tax to
the Participant. Participant acknowledges that the Company cannot and has not
guaranteed that the IRS will agree that the per Share exercise price of this
Option equals or exceeds the Fair Market Value of a Share on the date of grant
in a later examination. Participant agrees that if the IRS determines that the
Option was granted with a per Share exercise price that was less than the Fair
Market Value of a Share on the date of grant, Participant shall be solely
responsible for Participant’s costs related to such a determination.

 

  G. Entire Agreement; Governing Law.

The Plan is incorporated herein by reference. The Plan and this Award Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Participant with respect to the subject matter
hereof, and may not be modified adversely to Participant’s interest except by
means of a writing signed by the Company and Participant. This Award Agreement
is governed by the internal substantive laws, but not the choice of law rules,
of California.

 

  H. NO GUARANTEE OF CONTINUED SERVICE.

PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT
THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED
AN OPTION OR PURCHASING SHARES HEREUNDER). PARTICIPANT FURTHER ACKNOWLEDGES AND
AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE, CONSULTANT OR NON-EMPLOYEE
DIRECTOR FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT
INTERFERE WITH PARTICIPANT’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE
PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

[Remainder of Page Intentionally Left Blank]

 

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By Participant’s signature and the signature of the Company’s representative
below, Participant and the Company agree that this Option is granted under and
governed by the terms and conditions of the Plan and this Award Agreement.
Participant has reviewed the Plan and this Award Agreement in their entirety,
has had an opportunity to obtain the advice of counsel prior to executing this
Award Agreement and fully understands all provisions of the Plan and Award
Agreement. Participant hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions
relating to the Plan and Award Agreement. Participant further agrees to notify
the Company upon any change in the residence address indicated below.

 

PARTICIPANT:     COST PLUS, INC.         Name/Signature     By           Title

 

Residence Address:      

 

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EXHIBIT A

COST PLUS, INC.

2004 STOCK PLAN

EXERCISE NOTICE

Cost Plus, Inc.

200 Fourth Street

Oakland, CA 94607

Attention: Corporate Secretary

1. Exercise of Option. Effective as of today,                                 ,
            , the undersigned (“Purchaser”) hereby elects to purchase
                                shares (the “Shares”) of the Common Stock of
Cost Plus, Inc. (the “Company”) under and pursuant to the 2004 Stock Plan (the
“Plan”) and the Award Agreement dated                                 (the
“Award Agreement”). The purchase price for the Shares will be
$                                , as required by the Award Agreement.

2. Delivery of Payment. Purchaser herewith delivers to the Company the full
purchase price for the Shares any required withholding taxes to be paid in
connection with the exercise of the Option.

3. Representations of Purchaser. Purchaser acknowledges that Purchaser has
received, read and understood the Plan and the Award Agreement and agrees to
abide by and be bound by their terms and conditions.

4. Rights as Shareholder. Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the Shares, no right to vote or receive dividends or any other
rights as a shareholder will exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares so acquired will be
issued to Participant as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date of issuance, except as provided in Section 16 of the Plan.

5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser’s purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted with any tax consultants
Purchaser deems advisable in connection with the purchase or disposition of the
Shares and that Purchaser is not relying on the Company for any tax advice.

6. Successors and Assigns. The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this Exercise Notice shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Exercise Notice shall be
binding upon Participant and his or her heirs, executors, administrators,
successors and assigns.

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7. Severability; Interpretation. In the event that any provision hereof becomes
or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Exercise Notice shall continue in full force and effect. Any
dispute regarding the interpretation of this Exercise Notice shall be submitted
by Participant or by the Company forthwith to the Administrator which shall
review such dispute at its next regular meeting. The resolution of such a
dispute by the Administrator shall be final and binding on all parties.

8. Entire Agreement; Governing Law. The Plan and Award Agreement are
incorporated herein by reference. This Agreement, the Plan and the Award
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser’s interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.

 

Submitted by:     Accepted by: PURCHASER:     COST PLUS, INC.        
Name/Signature     By           Title

 

Residence Address:     Address:       

200 Fourth Street

Oakland, CA 94607

                    Date Received

 

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