EXHIBIT 10.4

ALLOY, INC.

Restricted Stock Grant Notice

Grant of Restricted Stock under the Company’s

2007 Employee, Director and Consultant Stock Incentive Plan

 

1. Name and Address of Participant:

 

2. Date of Grant:

 

3. Type of Grant: Restricted Common Stock

 

4. Number of Shares Granted

 

5. Lapsing Schedule: The shares of Restricted Stock granted shall lapse and
become fully transferable by Participant as follows:

 

  •  

    

 

  •  

    

 

  •  

    

 

6. Effect of Termination Without “Cause”; Effect of “Change of Control”:

 

  •  

In the event the Company terminates Participant’s employment or service without
“Cause” the Company’s Lapsing Forfeiture Right with regard to the shares of
Restricted Stock granted shall terminate and Participant’s ownership of all such
shares shall become immediately and fully vested.

 

  •  

In the event the Company undergoes a “Change of Control” and a premium equal to
or greater than              is paid, the Company’s Lapsing Forfeiture Right
with regard to the shares of Restricted Stock granted shall terminate and
Participant’s ownership of all such shares shall become immediately and fully
vested.

Each of “Cause” and “Change of Control” are defined in the
                                        , dated as of                     , by
and between Participant and the Company.

The Company and the Participant acknowledge receipt of this Restricted Stock
Grant Notice and agree to the terms of the Restricted Stock Agreement attached
hereto and incorporated by reference herein, the Company’s 2007 Employee,
Director and Consultant Stock Incentive Plan and the terms of this Restricted
Stock Grant as set forth above.

UNLESS YOU RETURN A SIGNED ORIGINAL COPY OF THE ATTACHED RESTRICTED STOCK
AGREEMENT (INCLUDING APPLICABLE EXHIBITS ATTACHED THERETO) TO THE COMPANY WITHIN
TEN (10) DAYS OF RECEIPT OF THIS NOTICE, YOU MAY BE DEEMED TO HAVE REJECTED THE
RESTRICTED STOCK GRANT SET FORTH ABOVE.

You may obtain a copy of the Company’s 2007 Employee, Director and Consultant
Stock Incentive Plan and Plan Description by logging in to your Merrill Lynch
personal account and visiting
https://www9.benefits.ml.com/menu/BOLMenu.asp?MenuListId=10001&&. Also, you may
obtain a copy of the Company’s most recent Annual Report and other information
delivered to Company shareholders by visiting the investor relations pages of
www.alloymarketing.com.

 

ALLOY, INC. By:  

 

Name:  

 

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RESTRICTED STOCK AGREEMENT

ALLOY, INC.

This AGREEMENT is made effective as of the      day of         , 200     (the
“Grant Date”), by and between Alloy, Inc. (the “Company”), a Delaware
corporation, and                                           (the “Participant”).

WHEREAS, the Company has adopted the Alloy, Inc. 2007 Employee, Director and
Consultant Stock Incentive Plan (the “Plan”) to promote the interests of the
Company by providing an incentive for employees, directors and consultants of
the Company or its Affiliates;

WHEREAS, pursuant to the provisions of the Plan, the Company desires to offer to
the Participant shares of the Company’s common stock, $0.01 par value per share
(“Common Stock”), in accordance with the provisions of the Plan, all on the
terms and conditions hereinafter set forth;

WHEREAS, Participant wishes to accept said offer; and

WHEREAS, the parties hereto understand and agree that any terms used and not
defined herein have the meanings ascribed to such terms in the Plan.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

1. Terms of Grant. The Participant hereby accepts the offer of the Company to
issue to the Participant, in accordance with the terms of the Plan and this
Agreement,              Shares of the Company’s Common Stock (such shares,
subject to adjustment pursuant to Section 22 of the Plan and Subsection 2.1(f)
hereof, the “Granted Shares”) at a purchase price of $0.01 per share (the
“Purchase Price”), receipt of which is hereby acknowledged by the Participant’s
prior service to the Company and which amount will be reported as income on the
Participant’s W-2 for this calendar year.

2.1. Forfeiture Provisions.

(a) Lapsing Forfeiture Right. In the event that for any reason the Participant
is no longer an employee, director or consultant of the Company or an Affiliate
prior to                      (the “Termination”), the Participant (or the
Participant’s Survivor) shall, on the date of Termination, immediately forfeit
to the Company (or its designee) all of the Granted Shares which have not yet
lapsed in accordance with the schedule set forth below (the “Lapsing Forfeiture
Right”). The Company’s Lapsing Forfeiture Right shall lapse as to one hundred
percent (100%) of the Granted Shares when the average closing price of a share
of the Company’s Common Stock, as quoted on NASDAQ for ten (10) consecutive
trading days, exceeds                     ; provided, however, notwithstanding
the foregoing, one-third of the Granted Shares shall vest no earlier than
                    ; the second one-third of the Granted Shares shall vest no
earlier than                     ; and the remaining one-third of the Granted
Shares shall vest no earlier than                     . Notwithstanding the
foregoing, in the event:

 

  (i) that the Participant is terminated by the Company without “Cause”, the
Company’s Lapsing Forfeiture Right with regard to the Granted Shares shall
terminate and Participant’s ownership of all such shares shall become
immediately and fully vested.

 

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  (ii) the Company undergoes a “Change of Control” and a premium equal to or
greater than              is paid, the Company’s Lapsing Forfeiture Right with
regard to the Granted Shares shall terminate and Participant’s ownership of all
such shares shall become immediately and fully vested.

Each of “Cause” and “Change of Control” are defined in the
                                        , dated as of                     , by
and between Participant and the Company.

(b) Effect of Termination for Disability or upon Death. To the extent the
Company’s Lapsing Forfeiture Right has not lapsed as of the date of Disability
or death, as case may be, the Company’s Lapsing Forfeiture Right shall
terminate, and the Participant’s ownership of all Granted Shares then owned by
the Participant shall become fully vested. “Disability” is defined in the
                                        , dated as of                     , by
and between Participant and the Company.

(c) Escrow. The certificates representing all Granted Shares acquired by the
Participant hereunder which from time to time are subject to the Lapsing
Forfeiture Right shall be delivered to the Company and the Company shall hold
such Granted Shares in escrow as provided in this Subsection 2.1(c). The Company
shall promptly release from escrow and deliver to the Participant a certificate
for the whole number of Granted Shares, if any, as to which the Company’s
Lapsing Forfeiture Right has lapsed. In the event of forfeiture to the Company
of Granted Shares subject to the Lapsing Forfeiture Right, the Company shall
release from escrow and cancel a certificate for the number of Granted Shares so
forfeited. Any securities distributed in respect of the Granted Shares held in
escrow, including, without limitation, shares issued as a result of stock
splits, stock dividends or other recapitalizations, shall also be held in escrow
in the same manner as the Granted Shares.

(d) Prohibition on Transfer. The Participant recognizes and agrees that all
Granted Shares which are subject to the Lapsing Forfeiture Right may not be
sold, transferred, assigned, hypothecated, pledged, encumbered or otherwise
disposed of, whether voluntarily or by operation of law, other than to the
Company (or its designee). However, the Participant, with the approval of the
Administrator, may transfer the Granted Shares for no consideration to or for
the benefit of the Participant’s Immediate Family (including, without
limitation, to a trust for the benefit of the Participant’s Immediate Family or
to a partnership or limited liability company for one or more members of the
Participant’s Immediate Family), subject to such limits as the Administrator may
establish, and the transferee shall remain subject to all the terms and
conditions applicable to this Agreement prior to such transfer and each such
transferee shall so acknowledge in writing as a condition precedent to the
effectiveness of such transfer. The term “Immediate Family” shall mean the
Participant’s spouse, former spouse, parents, children, stepchildren, adoptive
relationships, sisters, brothers, nieces and nephews and grandchildren (and, for
this purpose, shall also include the Participant. The Company shall not be
required to transfer any Granted Shares on its books which shall have been sold,
assigned or otherwise transferred in violation of this Subsection 2.1(d), or to
treat as the owner of such Granted Shares, or to accord the right to vote as
such owner or to pay dividends to, any person or organization to which any such
Granted Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Subsection 2.1(d).

(e) Failure to Deliver Granted Shares to be Forfeited. In the event that the
Granted Shares to be forfeited to the Company under this Agreement are not in
the Company’s possession pursuant to Subsection 2.1(d) above or otherwise and
the Participant or the Participant’s Survivor fails to deliver such Granted
Shares to the Company (or its designee), the Company may immediately take such
action as is appropriate to transfer record title of such Granted Shares from
the Participant to the Company (or its designee) and treat the Participant and
such Granted Shares in all respects as if delivery of such Granted Shares had
been made as required by this Agreement. The Participant hereby irrevocably
grants the Company a power of attorney which shall be coupled with an interest
for the purpose of effectuating the preceding sentence.

 

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(f) Adjustments. The Plan contains provisions covering the treatment of Shares
in a number of contingencies such as stock splits and mergers. Provisions in the
Plan for adjustment with respect to the Granted Shares and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference.

2.2 General Restrictions on Transfer of Granted Shares.

(a) The Participant acknowledges and agrees that neither the Company nor, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Participant any material information regarding the business of
the Company or affecting the value of the Shares before, at the time of, or
following a Termination, including, without limitation, any information
concerning plans for the Company to make a public offering of its securities or
to be acquired by or merged with or into another firm or entity.

3. Securities Law Compliance. The Participant specifically acknowledges and
agrees that any sales of Granted Shares shall be made in accordance with the
requirements of the Securities Act of 1933, as amended.

4. Rights as a Stockholder. The Participant shall have all the rights of a
stockholder with respect to the Granted Shares, including voting and dividend
rights, subject to the transfer and other restrictions set forth herein and in
the Plan.

5. Legend. In addition to any legend required pursuant to the Plan, if
certificates representing the Granted Shares are issued to the Participant
pursuant to this Agreement, such certificates shall have endorsed thereon a
legend substantially as follows:

“The shares represented by this certificate are subject to restrictions set
forth in a Restricted Stock Agreement dated as of                      with this
Company, a copy of which Agreement is available for inspection at the offices of
the Company or will be made available upon request.”

6. Incorporation of the Plan. The Participant specifically understands and
agrees that the Granted Shares issued under the Plan are being sold to the
Participant pursuant to the Plan, a copy of which Plan the Participant
acknowledges he or she has read and understands and by which Plan he or she
agrees to be bound. The provisions of the Plan are incorporated herein by
reference.

7. Tax Liability of the Participant and Payment of Taxes. The Participant
acknowledges and agrees that any income or other taxes due from the Participant
with respect to the Granted Shares issued pursuant to this Agreement, including,
without limitation, the Lapsing Forfeiture Right, shall be the Participant’s
responsibility. Without limiting the foregoing, the Participant agrees that, to
the extent that the lapsing of restrictions on disposition of any of the Granted
Shares or the declaration of dividends on any such shares before the lapse of
such restrictions on disposition results in the Participant’s being deemed to be
in receipt of earned income under the provisions of the Code, the Company shall
be entitled to immediate payment from the Participant of the amount of any tax
required to be withheld by the Company. The Company may withhold such amount
from the Granted Shares to be delivered to the Participant as set forth in
Section 26 of the Plan.

Upon execution of this Agreement, the Participant may file an election under
Section 83 of the Code in substantially the form attached as Exhibit B. The
Participant acknowledges that if he does

 

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not file such an election, as the Granted Shares are released from the Lapsing
Forfeiture Right in accordance with Section 2.1, the Participant will have
income for tax purposes equal to the fair market value of the Granted Shares at
such date, less the price paid for the Granted Shares by the Participant. The
Participant has been given the opportunity to obtain the advice of his or her
tax advisors with respect to the tax consequences of the purchase of the Granted
Shares and the provisions of this Agreement.

8. Equitable Relief. The Participant specifically acknowledges and agrees that
in the event of a breach or threatened breach of the provisions of this
Agreement or the Plan, including the attempted transfer of the Granted Shares by
the Participant in violation of this Agreement, monetary damages may not be
adequate to compensate the Company, and, therefore, in the event of such a
breach or threatened breach, in addition to any right to damages, the Company
shall be entitled to equitable relief in any court having competent
jurisdiction. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available to it for any such breach or threatened
breach.

9. No Obligation to Maintain Relationship. The Company is not by the Plan or
this Agreement obligated to continue the Participant as an employee, director or
consultant of the Company or an Affiliate. The Participant acknowledges:
(i) that the Plan is discretionary in nature and may be suspended or terminated
by the Company at any time; (ii) that the grant of the Shares is a one-time
benefit which does not create any contractual or other right to receive future
grants of shares, or benefits in lieu of shares; (iii) that all determinations
with respect to any such future grants, including, but not limited to, the times
when shares shall be granted, the number of shares to be granted, the purchase
price, and the time or times when each share shall be free from a lapsing
repurchase or forfeiture right, will be at the sole discretion of the Company;
(iv) that the Participant’s participation in the Plan is voluntary; (v) that the
value of the Shares is an extraordinary item of compensation which is outside
the scope of the Participant’s employment contract, if any; and (vi) that the
Shares are not part of normal or expected compensation for purposes of
calculating any severance, resignation, redundancy, end of service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments.

10. Notices. Any notices required or permitted by the terms of this Agreement or
the Plan shall be given by recognized courier service, facsimile, registered or
certified mail, return receipt requested, addressed as follows:

If to the Company:

Alloy, Inc.

151 W. 26th Street

11th Floor

New York, NY 10001

Attention: Chief Executive Officer

If to the Participant at the address set forth on the Company’s records

or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given on the
earliest of receipt, one business day following delivery by the sender to a
recognized courier service, or three business days following mailing by
registered or certified mail.

11. Benefit of Agreement. Subject to the provisions of the Plan and the other
provisions hereof, this Agreement shall be for the benefit of and shall be
binding upon the heirs, executors, administrators, successors and assigns of the
parties hereto.

 

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12. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of Delaware, without giving effect to the conflict of
law principles thereof. For the purpose of litigating any dispute that arises
under this Agreement, whether at law or in equity, the parties hereby consent to
exclusive jurisdiction in New York and agree that such litigation shall be
conducted in the state courts of New York, New York or the federal courts of the
United States for the Southern District of New York.

13. Severability. If any provision of this Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction, then such provision or
provisions shall be modified to the extent necessary to make such provision
valid and enforceable, and to the extent that this is impossible, then such
provision shall be deemed to be excised from this Agreement, and the validity,
legality and enforceability of the rest of this Agreement shall not be affected
thereby.

14. Entire Agreement. This Agreement, together with the Plan, constitutes the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior oral or written agreements
and understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement not expressly set forth in this
Agreement shall affect or be used to interpret, change or restrict the express
terms and provisions of this Agreement provided, however, in any event, this
Agreement shall be subject to and governed by the Plan.

15. Modifications and Amendments; Waivers and Consents. The terms and provisions
of this Agreement may be modified or amended as provided in the Plan. Except as
provided in the Plan, the terms and provisions of this Agreement may be waived,
or consent for the departure therefrom granted, only by written document
executed by the party entitled to the benefits of such terms or provisions. No
such waiver or consent shall be deemed to be or shall constitute a waiver or
consent with respect to any other terms or provisions of this Agreement, whether
or not similar. Each such waiver or consent shall be effective only in the
specific instance and for the purpose for which it was given, and shall not
constitute a continuing waiver or consent.

16. Consent of Spouse/Domestic Partner. If the Participant has a spouse or
domestic partner as of the date of this Agreement, the Participant’s spouse or
domestic partner shall execute a Consent of Spouse/Domestic Partner in the form
of Exhibit A hereto, effective as of the date hereof. Such consent shall not be
deemed to confer or convey to the spouse or domestic partner any rights in the
Granted Shares that do not otherwise exist by operation of law or the agreement
of the parties. If the Participant subsequent to the date hereof, marries,
remarries or applies to the Company for domestic partner benefits, the
Participant shall, not later than 60 days thereafter, obtain his or her new
spouse/domestic partner’s acknowledgement of and consent to the existence and
binding effect of all restrictions contained in this Agreement by having such
spouse/domestic partner execute and deliver a Consent of Spouse/Domestic Partner
in the form of Exhibit A.

17. Counterparts. This Agreement may be executed in one or more counterparts,
and by different parties hereto on separate counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

18. Data Privacy. By entering into this Agreement, the Participant:
(i) authorizes the Company and each Affiliate, and any agent of the Company or
any Affiliate administering the Plan or providing Plan record keeping services,
to disclose to the Company or any of its Affiliates such information and data as
the Company or any such Affiliate shall request in order to facilitate the grant
of Shares and the administration of the Plan; (ii) waives any data privacy
rights he or she may have with respect to such information; and (iii) authorizes
the Company and each Affiliate to store and transmit such information in
electronic form.

 

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[THE NEXT PAGE IS THE SIGNATURE PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

ALLOY, INC. By:  

 

Name:   Title:   Participant:

 

 

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EXHIBIT A

CONSENT OF SPOUSE/DOMESTIC PARTNER

I,                                         , spouse or domestic partner of
                                        , acknowledge that I have read the
RESTRICTED STOCK AGREEMENT dated as of                      (the “Agreement”) to
which this Consent is attached as Exhibit A and that I know its contents.
Capitalized terms used and not defined herein shall have the meanings assigned
to such terms in the Agreement. I am aware that by its provisions the Granted
Shares granted to my spouse/domestic partner pursuant to the Agreement are
subject to a Lapsing Forfeiture Right in favor of Alloy, Inc. (the “Company”)
and that, accordingly, I may be required to forfeit to the Company any or all of
the Granted Shares of which I may become possessed as a result of a gift from my
spouse/domestic partner or a court decree and/or any property settlement in any
domestic litigation.

I hereby agree that my interest, if any, in the Granted Shares subject to the
Agreement shall be irrevocably bound by the Agreement and further understand and
agree that any community property interest I may have in the Granted Shares
shall be similarly bound by the Agreement.

I agree to the Lapsing Forfeiture Right described in the Agreement and I hereby
consent to the forfeiture of the Granted Shares to the Company by my
spouse/domestic partner or my spouse/domestic partner’s legal representative in
accordance with the provisions of the Agreement. Further, as part of the
consideration for the Agreement, I agree that at my death, if I have not
disposed of any interest of mine in the Granted Shares by an outright bequest of
the Granted Shares to my spouse or domestic partner, then the Company shall have
the same rights against my legal representative to exercise its rights to the
Granted Shares with respect to any interest of mine in the Granted Shares as it
would have had pursuant to the Agreement if I had acquired the Granted Shares
pursuant to a court decree in domestic litigation.

I AM AWARE THAT THE LEGAL, FINANCIAL AND RELATED MATTERS CONTAINED IN THE
AGREEMENT ARE COMPLEX AND THAT I AM FREE TO SEEK INDEPENDENT PROFESSIONAL
GUIDANCE OR COUNSEL WITH RESPECT TO THIS CONSENT. I HAVE EITHER SOUGHT SUCH
GUIDANCE OR COUNSEL OR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT I
WILL WAIVE SUCH RIGHT.

Dated as of the      day of         , 200    .

 

 

Print name:

 

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EXHIBIT B

Election to Include Gross Income in Year

of Transfer Pursuant to Section 83(b)

of the Internal Revenue Code of 1986, as amended

In accordance with Section 83(b) of the Internal Revenue Code of 1986, as
amended (the “Code”), the undersigned hereby elects to include in his gross
income as compensation for services the excess, if any, of the fair market value
of the property (described below) at the time of transfer over the amount paid
for such property.

The following sets for the information required in accordance with the Code and
the regulations promulgated hereunder:

 

1. The name, address and social security number of the undersigned are:

Name:

Address:

Social Security No.:

 

2. The description of the property with respect to which the election is being
made is as follows:

                     (            ) shares (the “Shares”) of Common Stock, $0.01
par value per share, of Alloy, Inc., a Delaware corporation (the “Company”).

 

3. This election is made for the calendar year         , with respect to the
transfer of the property to the Taxpayer on                     .

 

4. Description of restrictions: The property is subject to the following
restrictions:

In the event taxpayer’s employment with the Company or an Affiliate is
terminated, the taxpayer shall forfeit the Shares as set forth below:

 

  A. If the termination takes place on or prior to                      all of
the Shares will be forfeited.

 

  B. If the termination takes place after             , 200    , the number of
Shares forfeited shall be                      (            ) Shares less
                     (            ) Shares for each full twelve (12) month
period elapsed after             , 200     if the taxpayer is employed by the
Company or an Affiliate.

 

5. The fair market value at time of transfer (determined without regard to any
restrictions other than restrictions which by their terms will never lapse) of
the property with respect to which this election is being made was not more than
$             per Share.

 

6. The amount paid by taxpayer for said property was $             per Share.

 

7. A copy of this statement has been furnished to the Company.

 

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Signed this      day of         , 200    .

 

 

Print Name: Print Name:

 

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