Document:

EXHIBIT 10.4

 

MOSSIMO,
INC.

 

2005
STOCK OPTION PLAN

 

STOCK
OPTION AGREEMENT

 

Capitalized
terms used without definition in this Stock Option Agreement (the “Option
Agreement”) shall have the meanings given such terms in the Mossimo, Inc.
2005 Stock Option Plan (the “Plan”).

 

I.

 

NOTICE
OF STOCK OPTION GRANT

 

1.      Option.  You have been granted an option to purchase
shares of common stock (the “Shares”) of Mossimo, Inc., a Delaware
corporation (the “Company”), subject to the terms and conditions of the Plan
and this Option Agreement, as follows:

 

	
  Date
  of Grant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise
  Price per Share:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total
  Number of Shares Granted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total
  Exercise Price:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Type
  of Option:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
  10 Years From Date of Grant

  

 

2.      Vesting and Expiration

 

3.      Termination.  So long as
the Optionee maintains Continuous Status as a Director, Employee or Consultant,
this Option may be exercised, in whole or in part, with respect to any vested
Shares, anytime prior to the Expiration Date. If the Optionee’s Continuous
Status as a Director, Employee or Consultant terminates for any reason, the
Optionee shall have that amount of time set forth in Section 9 of the Plan
to exercise any vested Shares, after which time this Option shall expire.

 

II.

 

AGREEMENT

 

1.      Grant of Option. 
The Company hereby grants to the Optionee (the “Optionee”)
named in the Notice of Stock Option Grant set forth above (the “Notice of Grant”)
an option (the “Option”) to purchase the total number of Shares 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, definitions and provisions
of the Plan, which is incorporated herein by reference.

 

2.      Exercise of Option.

 

(a)          Right to Exercise.
This Option shall be exercisable prior to its expiration date only, in
accordance with the Vesting Schedule set out in the Notice of Grant and
with the applicable provisions of the Plan and this Option Agreement.

 

(b)         Method of Exercise.
This Option shall be exercisable by written notice which shall state the
election to exercise the Option, the number of Shares with respect to which the
Option is being exercised, and such other representations and agreements as to
the Optionee’s investment intent with respect to the Shares as may be required
by the Company pursuant to the provisions of the Plan. Such notice is attached
hereto as Exhibit A. The written notice shall be signed by the Optionee
and shall be

 

1

 

delivered in person or
by certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the Exercise Price. This Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the
Exercise Price.

 

(c)          Compliance with Law.
No Shares will be issued pursuant to the exercise of any Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be
listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such shares.

 

3.      Method of Payment.  Subject to Section 8, payment of the Exercise
Price shall be paid by (a) cash, (b) check or (c) any
combination of those methods of payment. In addition, if there is a public
market for the Shares, the Optionee may elect to pay the Exercise Price through
a special sale and remittance procedure under which the Optionee provides
irrevocable written instructions to a designated brokerage firm to effect the
immediate sale of a portion of the purchased Shares and remit to the Company,
out of the sale proceeds available on the settlement date, an amount sufficient
to cover the aggregate option price payable for the purchased Shares plus all
applicable Federal and State income and employment taxes required to be
withheld by the Company by reason of such purchase and/or sale. The Optionee
must also provide such irrevocable written instructions to the Company to
deliver the certificates for the purchased Shares directly to such brokerage
firm to effect the sale transaction. Notwithstanding the above, the Company
shall not be required to permit the Optionee to utilize the sale and remittance
procedure described above if the Company’s legal counsel advises the Company
that the procedure may violate any applicable law, regulation or regulatory
guidance.

 

4.      Optionee’s
Representations.  In the event
the Shares purchasable pursuant to the exercise of this Option have not been
registered under the Securities Act of 1933, as amended, at the time this
Option is exercised, Optionee shall, if required by the Company, concurrently
with the exercise of all or any portion of this Option, deliver to the Company
an investment representation statement in a form reasonably required by the
Company.

 

5.      Non-Transferability of Option; Assignment
by Company.  This Option may
not be transferred in any manner otherwise than by will or by the laws of
descent or distribution and may be exercised during the lifetime of Optionee
only by Optionee; provided, however, that any Nonstatutory Stock Option may be
transferred by Optionee to any member of Optionee’s immediate family, to a partnership
the members of which (other than Optionee) are all members of Optionee’s
immediate family, or to a family trust the beneficiaries of which (other than
Optionee) are all members of Optionee’s immediate family. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of Optionee. The Company may assign any of its rights under this
Option Agreement to single or multiple assignees, and this Option Agreement
shall inure to the benefit of the successors and assigns of the Company.

 

6.      Restrictions on Transfer.  All certificates representing Shares
purchased under this Option Agreement may be imprinted with an appropriate
legend with respect to any applicable restriction on transfer. The Company may
issue appropriate stop-transfer instructions to its transfer agent to ensure
compliance with these transfer restrictions. If the Company transfers its own
securities, it may make appropriate notations to the same effect in its own
records. The Company shall not be required to transfer on its books any Shares
that have been sold or transferred in violation of any of the provisions of the
Plan or this Option Agreement, or to treat as the owner of such Shares or to
accord the right to vote or pay dividends to any purchaser or transferee to
whom such Shares has been sold or transferred.

 

7.      Market Stand-Off Agreement. 
Optionee hereby agrees that if so requested by the
Company or any representative of the underwriters in connection with the first
registration statement of the Company to become effective under the Securities
Act which includes securities to be sold on behalf of the Company to the public
in an underwritten public offering, Optionee shall not sell or otherwise
transfer the Shares or any other securities of the Company during the 180-day
period following the effective date of such registration statement. The Company
may impose stop-transfer instructions with respect to securities subject to the

 

2

 

foregoing
restrictions until the end of such 180-day period. Optionee agrees that the
Company may assign his or her obligation hereunder to any underwriter of the
Company’s initial public offering.

 

8.      Acknowledgments of
Optionee.

 

(a)          NO RIGHT OF EMPLOYMENT.
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF
THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS AGREEMENT, NOR IN THE MOSSIMO, INC. 2005 STOCK OPTION PLAN THAT
IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL
IT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO
TERMINATE OPTIONEE’S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT
CAUSE.

 

(b)         Receipt of Plan.
Optionee acknowledges receipt of a copy of the Plan and represents that he or
she is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option.
Optionee further agrees to notify the Company upon any change in the residence
address indicated above.

 

9.      Notice.  Any notice required or permitted under this
Option Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery or upon deposit in the United States mail by
certified mail, with postage and fees prepaid, addressed to the party at its
address as shown below, or to such other address as such party may designate in
writing from time to time to the other party.

 

10.    Entire Agreement; Governing Law.  The Plan is incorporated herein by reference.
The Plan and this Option 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 the Optionee
with respect to the subject matter hereof, and may not be modified adversely to
the Optionee’s interest except by means of a writing signed by the Company and
Optionee. In case of conflict between the provisions in the Plan and this
Option Agreement, the provisions in the Plan shall prevail. This Option
Agreement is governed by Delaware law except for that body of law pertaining to
conflict of laws.

 

	
  Date:

  	
   

  	
   

  	
  MOSSIMO
  INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  

 

3

 

Exhibit A

 

MOSSIMO,
INC.

 

2005
STOCK OPTION PLAN

 

EXERCISE
NOTICE

 

	
  TO:

  	
  Mossimo, Inc.

  
	
   

  	
  2016
  Broadway

  
	
   

  	
  Santa
  Monica, CA 90404

  
	
   

  	
  ATTN: Chief
  Financial Officer

  

 

 

SUBJECT:                                         NOTICE OF
EXERCISE OF STOCK OPTION

 

In
respect to the stock option granted to the undersigned on
                             ,
to purchase an aggregate of         
shares of the Company’s Common Stock, this is official notice that the
undersigned hereby elects to exercise such option to purchase shares as
follows:

 

	
  NUMBER OF
  SHARES:

  	
   

  	
   

  	
   

  
	
  DATE OF
  PURCHASE: 

  	
   

  	
   

  	
   

  
	
  MODE OF
  PAYMENT:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Certified check, cash or other [specify])

  	
   

  

 

The
shares should be issued as follows:

 

	
  NAME:

  	
   

  	
   

  	
   

  
	
  ADDRESS: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signed:

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  

 

Please
send this notice of exercise to:

 

Mossimo, Inc.

2016
Broadway

Santa
Monica, CA  90404

ATTN:  Chief Financial Officer

 

A-1Exhibit 10.1

 

2006
Qwest Management Bonus Plan Summary

 

Purpose

 

Qwest
Communications International Inc.’s compensation philosophy is to pay for
performance.  The purpose of this bonus
plan is to tie a portion of each participant’s compensation to corporate goals
and individual achievements.

 

Eligibility

 

Except
as set forth below, all Qwest management employees in non-sales-commissioned
positions who are on the payroll during 2006 and who remain on the payroll
until the “close date”, two weeks prior to the bonus pay out date,  are eligible to participate in the 2006 Qwest
Management Bonus Plan.  If a 2006 bonus
is paid, the bonus payout is expected to occur during the first quarter of 2007.

 

Employees
are ineligible for a bonus if their employment terminates, either voluntarily
or involuntarily, prior to the bonus program close date; if they are on other
incentive plans (e.g., sales compensation plans); if they are rated “Unacceptable”
by their supervisor or, in the discretion of the supervisor, their performance
and/or behavior does not warrant a payout. In addition, occupational employees,
interns, contract employees and temporary employees are ineligible for a bonus.

 

Bonus Target Percentages

 

The
target percentage used to calculate the bonus is expressed as a percentage of
base salary. The target percentage varies based on an employee’s job
responsibility and impact on the business.

 

Bonus Calculation

 

The bonus payment is based on
three measures: Corporate Performance, Business Unit Performance, and Individual
Performance.

 

Employees in finance, legal, human resources, public
policy, federal relations, product and marketing, and corporate communications
will be measured on Corporate Performance.  
Employees in business, mass markets, wholesale, network and IT will be
measured 60 percent on Corporate Performance and 40 percent on their business unit
performance. Performance will be scored between 0% -150% for each of the
performance measures described below.

 

1)             Corporate Performance

 

Corporate Performance is determined by the weighted average of revenue
(25 percent), net income (25 percent), cash flow (30 percent) and imperatives
(20 percent). Performance
targets for each measure will be established at the beginning of 2006 and
approved by the Board of Directors.

 

2)             Business
Unit Performance

 

a.               Revenue
Generating Business Units Performance

 

Revenue Generating Business Units Performance is determined
by the weighted average of each business unit’s revenue (50 percent), operating
results (30 percent), and imperatives (20 percent).  Performance targets for each measure will be established
at the beginning of 2006 and approved by the Board of Directors.

 

b.               Network
and Information Technologies Performance

 

Network and IT Performance is determined by the
weighted average of capital expenditures (40 percent), operating results (40
percent), and imperatives (20 percent). 
Performance targets for each measure will be established at the
beginning of 2006 and approved by the Board of Directors.

 

Qwest
reserves the right to amend or cancel this plan either retroactively or
prospectively or otherwise make adjustments that it may deem necessary or
appropriate in its sole discretion. 

 

 

3)             Individual Performance:

 

Individual Performance
is determined in an evaluation by the supervising manager of overall employee
performance compared to established performance objectives and behaviors
exhibited by the employee compared to Qwest’s brand attributes and values.  

 

Individual
bonus awards will be computed by multiplying the weighted result of the
Corporate and Business Unit Performance scores by Individual Performance score.

 

Each
of the above performance targets may be based on non-GAAP measures including
adjustments to the reported GAAP financial statements as determined at the end
of the year and approved by the Board of Directors.  The Board of Directors will certify
performance attainment and approve payout prior to payout date.  The Board of Directors may consider the
impact of any one time or unusual items in determining the percentage
achievement of any performance target.

 

Nothing in the 2006 Qwest Management Bonus Plan is intended to modify
the “At-Will” nature of Qwest employees’ employment.  All Qwest management employees are employed “At-Will.”  This means either the employee or the company
may terminate the employee’s employment with or without cause at any time, and
without advance notice, procedure or formality.

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