**EXHIBIT 10.39****RESTRICTED STOCK AGREEMENT****ALLOY, INC.**     AGREEMENT made as ofthe                     dayof                     ,200     (the “Grant Date”),between Alloy, Inc. (the “Company”), a Delawarecorporation having its principal place of business in New York,New York,and                     of                     ,(the “Participant”).     WHEREAS, the Company has adopted the Alloy, Inc. **[name ofplan]**(the “Plan”) to promote the interests of theCompany by providing an incentive for employees, directors andconsultants of the Company or its Affiliates;     WHEREAS, pursuant to the provisions of the Plan, the Companydesires to offer for sale to the Participant shares of theCompany’s common stock, $.01 par value per share(“Common Stock”), in accordance with the provisions ofthe Plan, all on the terms and conditions hereinafter set forth;     WHEREAS, Participant wishes to accept said offer; and     WHEREAS, the parties hereto understand and agree that any termsused and not defined herein have the meanings ascribed to suchterms in the Plan.     NOW, THEREFORE, in consideration of the premises and the mutualcovenants contained herein and for other good and valuableconsideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereto hereby agree as follows:     1. *Terms of Purchase.* The Participant herebyaccepts the offer of the Company to issue to the Participant, inaccordance with the terms of the Plan and this Agreement,**                    **Sharesof the Company’s Common Stock (such shares, subject toadjustment pursuant to Section 7 of the Plan andSubsection 2.1(i) hereof, the “Granted Shares”)at a purchase price per share of$          (the“Purchase Price”), [such Purchase Price to be paid,pursuant to the provisions of Section 9 of the Plan, byvirtue of past services rendered to the Company,] receipt ofwhich is hereby acknowledged by the Company.[Alternative — Payment shall be made in accordancewith Section 9 of the Plan.]     2.1.     *Company’s LapsingRepurchase Right.*     (a) *Lapsing Repurchase Right.*Except as setforth in Subsection 2.1(b) hereof, if for any reason theParticipant no longer is an employee, director or consultant ofthe Company or an Affiliate priorto                     ,20     , the Company (or its designee)shall have the option, but not the obligation, to purchase fromthe Participant (or the Participant’s Survivor), and, ifthe Company exercises such option, the Participant (or theParticipant’s Survivor) shall be obligated to sell to theCompany (or its designee), at a price per Granted Share equal tothe Purchase Price, all or any part of the Granted Shares setforth in clauses (i), (ii) and (iii) below (the“Lapsing Repurchase Right”). The Company’sLapsing Repurchase Right shall be valid for a period of one yearcommencing with the date of such termination of employment orservice. Notwithstanding any other provision hereof, if theCompany is prohibited during such one year period fromexercising its Lapsing Repurchase Right by Section 160 ofthe Delaware General Corporation Law as amended from time totime (or any successor provision), then the time period duringwhich such Lapsing Repurchase Right may be exercised shall beextended until 30 days after the Company is first not soprohibited.          (i) If such termination is prior    to                     ,    2005, the Company shall have the option to repurchase all of the    Granted Shares acquired by the Participant hereunder.           (ii) If such termination is on or    after                     ,    2005, the Company shall have the option to repurchase all of the    Granted Shares    less                     of    the Granted Shares for each full year elapsed after such date    that the Participant continues to serve as an employee, director    or consultant of the Company or an Affiliate.

 
          (iii) Notwithstanding anything to the contrary contained in    this Agreement, if the Company or an Affiliate terminates the    Participant’s employment or service for “cause”    (as defined in the Plan) or if the Administrator determines,    within 90 days after the Participant’s termination,    that either prior or subsequent to the Participant’s    termination the Participant engaged in conduct that would    constitute “cause,” the Company shall have the option    to repurchase all of the Granted Shares acquired by the    Participant hereunder at the Purchase Price.     (b) *Effect of Termination for Disability or uponDeath*. Except as otherwise provided inSubsection 2.1(a)(iii) above, the following rules apply ifthe Participant ceases to be an employee, director or consultantof the Company or an Affiliate by reason of Disability or death:to the extent the Company’s Lapsing Repurchase Right hasnot lapsed as of the date of Disability or death, as case maybe, the Company may exercise such Lapsing Repurchase Right;provided, however, that the Company’s Lapsing RepurchaseRight shall be deemed to have lapsed to the extent of a pro rataportion of the Granted Shares through the date of Disability ordeath, as would have lapsed had the Participant not becomeDisabled or died, as the case may be. The proration shall bebased upon the number of days accrued in such current vestingperiod prior to the Participant’s date of Disability ordeath, as the case may be.     (c) *Closing*. If the Company exercises theLapsing Repurchase Right, the Company shall notify theParticipant, or, in the case of the Participant’s death,his or her Survivor, in writing of its intent to repurchase theGranted Shares. Such notice may be mailed by the Company up toand including the last day of the time period provided for abovefor exercise of the Lapsing Repurchase Right. The notice shallspecify the place, time and date for payment of the repurchaseprice (the “Closing”) and the number of Granted Shareswith respect to which the Company is exercising the LapsingRepurchase Right. The Closing shall be not less than ten daysnor more than 60 days from the date of mailing of thenotice, and the Participant or the Participant’s Survivorwith respect to the Granted Shares which the Company elects torepurchase shall have no further rights as the owner thereoffrom and after the date specified in the notice. At the Closing,the repurchase price shall be delivered to the Participant orthe Participant’s Survivor and the Granted Shares beingrepurchased, duly endorsed for transfer, shall, to the extentthat they are not then in the possession of the Company, bedelivered to the Company by the Participant or theParticipant’s Survivor.     (d) *Escrow.* The certificates representing allGranted Shares acquired by the Participant hereunder which fromtime to time are subject to the Lapsing Repurchase Right shallbe delivered to the Company and the Company shall hold suchGranted Shares in escrow as provided in thisSubsection 2.1(d). Promptly following receipt by theCompany of a written request from the Participant, the Companyshall release from escrow and deliver to the Participant acertificate for the whole number of Granted Shares, if any, asto which the Company’s Lapsing Repurchase Right has lapsed.In the event of a repurchase by the Company of Granted Sharessubject to the Lapsing Repurchase Right, the Company shallrelease from escrow and cancel a certificate for the number ofGranted Shares so repurchased. Any securities distributed inrespect of the Granted Shares held in escrow, including, withoutlimitation, shares issued as a result of stock splits, stockdividends or other recapitalizations, shall also be held inescrow in the same manner as the Granted Shares.     (e) *Prohibition on Transfer.* The Participantrecognizes and agrees that all Granted Shares which are subjectto the Lapsing Repurchase Right may not be sold, transferred,assigned, hypothecated, pledged, encumbered or otherwisedisposed of, whether voluntarily or by operation of law, otherthan to the Company (or its designee). However, the Participant,with the approval of the Administrator, may transfer the GrantedShares for no consideration to or for the benefit of theParticipant’s Immediate Family (including, withoutlimitation, to a trust for the benefit of the Participant’sImmediate Family or to a partnership or limited liabilitycompany for one or more members of the Participant’sImmediate Family), subject to such limits as the Administratormay establish, and the transferee shall remain subject to allthe terms and conditions applicable to this Agreement prior tosuch transfer and each such transferee shall so acknowledge inwriting as a condition precedent to the effectiveness of suchtransfer. The term “Immediate Family” shall mean theParticipant’s spouse, former spouse, parents, children,stepchildren, adoptive relationships, sisters, brothers, niecesand nephews and grandchildren (and, for this purpose, shall alsoinclude the Participant. The Company shall not be required totransfer any Granted Shares on its books which shall have beensold, assigned or otherwise transferred in violation of thisSubsection 2.1(e), or to treat as the owner of such GrantedShares, or
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to accord the right to vote as such owner or to pay dividendsto, any person or organization to which any such Granted Sharesshall have been so sold, assigned or otherwise transferred, inviolation of this Subsection 2.1(e).     (f) *Failure to Deliver Granted Shares to beRepurchased.* If the Granted Shares to be repurchased bythe Company under this Agreement are not in the Company’spossession pursuant to Subsection 2.1(d) above or otherwiseand the Participant or the Participant’s Survivor fails todeliver such Granted Shares to the Company (or its designee),the Company may elect (i) to establish a segregated accountin the amount of the repurchase price, such account to be turnedover to the Participant or the Participant’s Survivor upondelivery of such Granted Shares, and (ii) immediately totake such action as is appropriate to transfer record title ofsuch Granted Shares from the Participant to the Company (or itsdesignee) and to treat the Participant and such Granted Sharesin all respects as if delivery of such Granted Shares had beenmade as required by this Agreement. The Participant herebyirrevocably grants the Company a power of attorney which shallbe coupled with an interest for the purpose of effectuating thepreceding sentence.     (g) *Adjustments.* The Plan contains provisionscovering the treatment of Shares in a number of contingenciessuch as stock splits and mergers. Provisions in the Plan foradjustment with respect to the Shares and the related provisionswith respect to successors to the business of the Company arehereby made applicable hereunder and are incorporated herein byreference.     3. *Legend.* In addition to any legend requiredpursuant to the Plan, all certificates representing the GrantedShares to be issued to the Participant pursuant to thisAgreement shall have endorsed thereon a legend substantially asfollows:     “The shares represented by this certificate are subject to    restrictions set forth in a Restricted Stock Agreement dated as    of                     ,    200 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.”     4. *Purchase for Investment; Securities LawCompliance.* If the offering and sale of the GrantedShares have not been effectively registered under the1933 Act, the Participant hereby represents and warrantsthat he or she is acquiring the Granted Shares for his or herown account, for investment, and not with a view to, or for salein connection with, the distribution of any such Granted Shares.The Participant specifically acknowledges and agrees that anysales of Granted Shares shall be made in accordance with therequirements of the 1933 Act, in a transaction as to whichthe Company shall have received an opinion of counselsatisfactory to it confirming such compliance. The Participantshall be bound by the provisions of the following legend whichshall be endorsed upon the certificate(s) evidencing the Sharesissued:     “The shares represented by this certificate have been taken    for investment and they may not be sold or otherwise transferred    by any person, including a pledgee, unless (1) either    (a) a Registration Statement with respect to such shares    shall be effective under the Securities Act of 1933, as amended,    or (b) the Company shall have received an opinion of    counsel satisfactory to it that an exemption from registration    under such Act is then available, and (2) there shall have    been compliance with all applicable state securities laws.”     5. *Incorporation of the Plan.* The Participantspecifically understands and agrees that the Granted Sharesissued under the Plan are being sold to the Participant pursuantto the Plan, a copy of which Plan the Participant acknowledgeshe or she has read and understands and by which Plan he or sheagrees to be bound. The provisions of the Plan are incorporatedherein by reference.     6. *Tax Liability of the Participant and Payment ofTaxes.* The Participant acknowledges and agrees that anyincome or other taxes due from the Participant with respect tothe Granted Shares issued pursuant to this Agreement, including,without limitation, the Lapsing Repurchase Right, shall be theParticipant’s responsibility. Without limiting theforegoing, the Participant agrees that, to the extent that thelapsing of restrictions on disposition of any of the GrantedShares or the declaration of dividends on any such shares beforethe lapse of such restrictions on disposition results in theParticipant’s being deemed to be in receipt of earnedincome under the provisions of the Code, the Company shall beentitled to immediate payment from the Participant of the amountof any tax required to be withheld by the Company.
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     Upon execution of this Agreement, the Participant may file anelection under Section 83 of the Code in substantially theform attached as Exhibit B. The Participantacknowledges that if she does not file such an election, as theGranted Shares are released from the Lapsing Repurchase Right inaccordance with Section 2.1, the Participant will haveincome for tax purposes equal to the fair market value of theGranted Shares at such date, less the price paid for the GrantedShares by the Participant.     7. *Equitable Relief.* The Participantspecifically acknowledges and agrees that in the event of abreach or threatened breach of the provisions of this Agreementor the Plan, including the attempted transfer of the GrantedShares 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 threatenedbreach, in addition to any right to damages, the Company shallbe entitled to equitable relief in any court having competentjurisdiction. Nothing herein shall be construed as prohibitingthe Company from pursuing any other remedies available to it forany such breach or threatened breach.     8. *No Obligation to Maintain Relationship.*The Company is not by the Plan or this Agreement obligated tocontinue the Participant as an employee, director or consultantof the Company or an Affiliate. The Participant acknowledges:(i) that the Plan is discretionary in nature and may besuspended or terminated by the Company at any time;(ii) that the grant of the Shares is a one-time benefitwhich does not create any contractual or other right to receivefuture grants of shares, or benefits in lieu of shares;(iii) that all determinations with respect to any suchfuture grants, including, but not limited to, the times whenshares shall be granted, the number of shares to be granted, thepurchase price, and the time or times when each share shall befree from a lapsing repurchase right, will be at the solediscretion of the Company; (iv) that the Participant’sparticipation in the Plan is voluntary; (v) that the valueof the Shares is an extraordinary item of compensation which isoutside the scope of the Participant’s employment contract,if any; and (vi) that the Shares are not part of normal orexpected compensation for purposes of calculating any severance,resignation, redundancy, end of service payments, bonuses,long-service awards, pension or retirement benefits or similarpayments.     9. *Notices.* Any notices required or permittedby the terms of this Agreement or the Plan shall be given byrecognized courier service, facsimile, registered or certifiedmail, return receipt requested, addressed as follows:     If to the Company:     Alloy, Inc.     151 W. 26th Street     11th Floor     New York, NY 10001     Attention: General Counsel      If to the Participant:            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.     10. *Benefit of Agreement.* Subject to theprovisions of the Plan and the other provisions hereof, thisAgreement shall be for the benefit of and shall be binding uponthe heirs, executors, administrators, successors and assigns ofthe parties hereto.     11. *Governing Law.* This Agreement shall beconstrued and enforced in accordance with the laws of the Stateof Delaware, without giving effect to the conflict of lawprinciples thereof. For the purpose of litigating any disputethat arises under this Agreement, whether at law or in equity,the parties hereby consent to
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exclusive jurisdiction in New York and agree that suchlitigation shall be conducted in the courts of New York, NewYork or the federal courts of the United States for the SouthernDistrict of New York.     12. *Severability.* If any provision of thisAgreement is held to be invalid or unenforceable by a court ofcompetent jurisdiction, then such provision or provisions shallbe modified to the extent necessary to make such provision validand enforceable, and to the extent that this is impossible, thensuch provision shall be deemed to be excised from thisAgreement, and the validity, legality and enforceability of therest of this Agreement shall not be affected thereby.     13. *Entire Agreement.* This Agreement,together with the Plan, constitutes the entire agreement andunderstanding between the parties hereto with respect to thesubject matter hereof and supersedes all prior oral or writtenagreements and understandings relating to the subject matterhereof. No statement, representation, warranty, covenant oragreement not expressly set forth in this Agreement shall affector be used to interpret, change or restrict the express termsand provisions of this Agreement provided, however, in anyevent, this Agreement shall be subject to and governed by thePlan.     14. *Modifications and Amendments; Waivers andConsents.* The terms and provisions of this Agreement maybe modified or amended as provided in the Plan. Except asprovided in the Plan, the terms and provisions of this Agreementmay be waived, or consent for the departure therefrom granted,only by written document executed by the party entitled to thebenefits of such terms or provisions. No such waiver or consentshall be deemed to be or shall constitute a waiver or consentwith respect to any other terms or provisions of this Agreement,whether or not similar. Each such waiver or consent shall beeffective only in the specific instance and for the purpose forwhich it was given, and shall not constitute a continuing waiveror consent.     15. *Consent of Spouse.* If the Participant ismarried as of the date of this Agreement, the Participant’sspouse shall execute a Consent of Spouse in the form ofExhibit A hereto, effective as of the date hereof. Suchconsent shall not be deemed to confer or convey to the spouseany rights in the Granted Shares that do not otherwise exist byoperation of law or the agreement of the parties. If theParticipant marries or remarries subsequent to the date hereof,the Participant shall, not later than 60 days thereafter,obtain his or her new spouse’s acknowledgement of andconsent to the existence and binding effect of all restrictionscontained in this Agreement by such spouse’s executing anddelivering a Consent of Spouse in the form of Exhibit A.     16. *Counterparts.* This Agreement may beexecuted in one or more counterparts, and by different partieshereto on separate counterparts, each of which shall be deemedan original, but all of which together shall constitute one andthe same instrument.     17. *Data Privacy.* By entering into thisAgreement, the Participant: (i) authorizes the Company andeach Affiliate, and any agent of the Company or any Affiliateadministering the Plan or providing Plan record keepingservices, to disclose to the Company or any of its Affiliatessuch information and data as the Company or any such Affiliateshall request in order to facilitate the grant of Shares and theadministration of the Plan; (ii) waives any data privacyrights he or she may have with respect to such information; and(iii) authorizes the Company and each Affiliate to storeand transmit such information in electronic form.**[THE NEXT PAGE IS THE SIGNATURE PAGE]**
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     IN WITNESS WHEREOF, the parties hereto have executed thisAgreement as of the day and year first above written. ALLOY, INC.     By:       Name:      Title:      PARTICIPANT:        Print name:
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**Exhibit A****CONSENT OF SPOUSE**     I,                     ,spouseof                     ,acknowledge that I have read the RESTRICTED STOCK AGREEMENTdated asof                     ,200     (the “Agreement”) towhich this Consent is attached as Exhibit A and that I knowits contents. Capitalized terms used and not defined hereinshall have the meanings assigned to such terms in the Agreement.I am aware that by its provisions the Granted Shares granted tomy spouse pursuant to the Agreement are subject to a LapsingRepurchase Right in favor of Alloy, Inc. (the“Company”) and that, accordingly, the Company has theright to repurchase up to all of the Granted Shares of which Imay become possessed as a result of a gift from my spouse or acourt decree and/or any property settlement in any domesticlitigation.     I hereby agree that my interest, if any, in the Granted Sharessubject to the Agreement shall be irrevocably bound by theAgreement and further understand and agree that any communityproperty interest I may have in the Granted Shares shall besimilarly bound by the Agreement.     I agree to the Lapsing Repurchase Right described in theAgreement and I hereby consent to the repurchase of the GrantedShares by the Company and the sale of the Granted Shares by myspouse or my spouse’s legal representative in accordancewith the provisions of the Agreement. Further, as part of theconsideration for the Agreement, I agree that at my death, if Ihave not disposed of any interest of mine in the Granted Sharesby an outright bequest of the Granted Shares to my spouse, thenthe Company shall have the same rights against my legalrepresentative to exercise its rights of repurchase with respectto any interest of mine in the Granted Shares as it would havehad pursuant to the Agreement if I had acquired the GrantedShares pursuant to a court decree in domestic litigation.     **I AM AWARE THAT THE LEGAL, FINANCIAL AND RELATED MATTERSCONTAINED IN THE AGREEMENT ARE COMPLEX AND THAT I AM FREE TOSEEK INDEPENDENT PROFESSIONAL GUIDANCE OR COUNSEL WITH RESPECTTO THIS CONSENT. I HAVE EITHER SOUGHT SUCH GUIDANCE OR COUNSELOR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT IWILL WAIVE SUCH RIGHT.**     Dated as ofthe                     dayof                     ,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 RevenueCode of 1986, as amended (the “Code”), the undersignedhereby elects to include in his gross income as compensation forservices the excess, if any, of the fair market value of theproperty (described below) at the time of transfer over theamount paid for such property.     The following sets for the information required in accordancewith the Code and the regulations promulgated hereunder:     1. The name, address and social security number of theundersigned are:     Name:     Address:     Social Security No.:     2. The description of the property with respect to whichthe election is being made is as follows:                              (                    )    shares (the “Shares”) of Common Stock, $.01 par    value per share, of Alloy, Inc., a Delaware corporation (the    “Company”).     3. This election is made for the calendaryear           ,with respect to the transfer of the property to the Taxpayeron                     .     4. Description of restrictions: The property is subject tothe following restrictions:          If taxpayer’s employment with the Company or an Affiliate    is terminated, the Company may repurchase all or any portion of    the Shares determined as set forth below at the acquisition    price paid by the taxpayer:          A. If the termination takes place on or prior    to                     ,    the Purchase Option will apply to all of the Shares.           B. If the termination takes place    after                     ,    200     , the number of Shares to which    the Purchase Option applies shall    be  (                    )    Shares    less  (                    )    Shares for each full twelve (12) month period elapsed    after                     ,    200     if the taxpayer is employed by    the Company or an Affiliate.     5. The fair market value at time of transfer (determinedwithout regard to any restrictions other than restrictions whichby their terms will never lapse) of the property with respect towhich this election is being made was not more than$           perShare.     6. The amount paid by taxpayer for said property was$           perShare.     7. A copy of this statement has been furnished to theCompany.     Signedthis                     dayof                     ,200 .       Print Name:
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