Document:

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                                                                   EXHIBIT 10.32

                                   ALLOY, INC.
         COMPENSATION ARRANGEMENTS FOR CERTAIN NAMED EXECUTIVE OFFICERS

Fiscal year ended January 31, 2005 ("Fiscal 2004") bonuses and fiscal year
ending January 31, 2006 ("Fiscal 2005") salaries have been set for certain named
executive officers of Alloy, Inc. as follows:

<Table>
<Caption>
Named Executive         Position                          Fiscal 2004 Bonus     Fiscal 2005 Salary   Other Compensation
----------------        --------                          -----------------     ------------------   ------------------
<S>                     <C>                               <C>                   <C>                  <C>

Matthew C. Diamond      Chief Executive Officer and
                        Chairman                          None                  $420,000                $31,232.67(1)

James K. Johnson, Jr.   President and Chief Financial
                        Officer/Chief Operating Officer   None                  $420,000                $31,601.97(1)

Samuel. A. Gradess      Executive Vice President          None                  $150,000                $37,247.57(1)

Robert Bernard          Chief Executive Officer,          $120,000 payable in   $600,000                $20,000.00(3)
                        Merchandise Division              cash and 100,000
                                                          options(2)
</Table>

(1) Represents dollar value of insurance paid by Alloy, Inc. with respect to a
split dollar life insurance policy, which policy, including death benefits, will
be assigned to the Company during Fiscal 2005.

(2) 25,000 options vesting on each of March 7, 2006, 2007, 2008 and 2009.

(3) Represents amount paid to Mr. Bernard to be applied to a term life
insurance policy for the benefit of a beneficiary to be designated by
Mr. Bernard.<PAGE>
                                                                   EXHIBIT 10.33

                                  ALLOY, INC.
DESCRIPTION OF OUTSIDE DIRECTOR COMPENSATION ARRANGEMENTS FOR FISCAL YEAR ENDING
                                JANUARY 31, 2006

         For services rendered during fiscal year ending January 31, 2006,
("Fiscal 2005"), Alloy, Inc. (the "Company") will pay to each non-employee
member (each, an "Outside Director") of the Company's Board of Directors (the
"Board") a quarterly retainer of $6,000. Additionally, the Company will pay to
each Outside Director $1,000 for each meeting of the Board attended, whether in
person or telephonically. The Company also will pay to each Outside Director a
quarterly amount of $2,000 per standing committee on which such member serves
and an additional $1,500 per quarter for each standing committee on which such
member serves as chairman. In addition, the Company will pay the lead
independent director of the Board $35,000 per fiscal year, which amount is
payable quarterly in equal installments.

         In addition to the cash compensation described above, upon the
appointment or initial election of an Outside Director, such director is
automatically granted an option to purchase 5,000 shares of Company common stock
under one or more of the then existing stock option plans of the Company. These
options vest equally on each of the first four anniversaries of the grant date,
provided that the optionee is still an Outside Director of the Company at the
opening of business on such date. Each option has a term of ten years and the
exercise price for each option is equal to the closing price for the common
stock on the business day immediately preceding the date of grant, as reported
on the NASDAQ National Market or other principal amount on which the Company's
common stock is listed for trading. The Company also issues to each Outside
Director on an annual basis, without cost to such director, the number of shares
of Company common stock that could be purchased for $50,000 at the closing price
of such common stock on the trading date immediately preceding the award of such
shares. These restricted stock shares are issued pursuant to one or more of the
existing stock option plans of the Company as restricted stock. These shares are
subject to lapsing rights of repurchase on the part of the Company under the
applicable plan documents, which repurchase entitles the Company to repurchase
the shares at $0.01 per share and which rights to lapse equally on each of the
first three anniversaries of the grant date. Such shares are also subject to the
terms and conditions of the applicable option plan of the Company under which
they are awarded and the execution and delivery of the execution and delivery of
restricted stock agreements with each recipient. To the extent practical, these
shares of restricted stock are to be issued to February 1st of each year, except
that the shares issuable in respect of Fiscal 2005 will be issued on May 1,
2005.EXHIBIT 10.34

 

EXHIBIT 10.34

NON-QUALIFIED STOCK OPTION AGREEMENT

ALLOY, INC.

     
AGREEMENT made as of «GRANTDATE» between Alloy, Inc.
(the “Company”), a Delaware corporation, and
«FIRSTNAME» «LASTNAME» (the
“Participant”).

     
WHEREAS, the Company desires to grant to the Participant an
Option to purchase shares of its common stock, par value
$.01 per share (the “Shares”), under and for the
purposes set forth in the Company’s 2002 Non-Qualified
Option Plan (the “Plan”); and

     
WHEREAS, the Company and the Participant understand and agree
that any terms used and not defined herein have the same
meanings as in the Plan; and

     
WHEREAS, the Company and the Participant each intend that the
Option granted herein shall be a Non-Qualified Option.

     
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth and for other good and valuable
consideration, the parties hereto agree as follows:

     
1. GRANT OF OPTION. The Company hereby grants
to the Participant the right and option to purchase all or any
part of an aggregate of «SHARESWRITTEN»
(«SHARESNUM») Shares, on the terms and conditions and
subject to all the limitations set forth herein and in the Plan,
which is incorporated herein by reference. The Participant
acknowledges receipt of a copy of the Plan.

     
2. PURCHASE PRICE. The purchase price of the
Shares covered by the Option shall be $«PRICE» per
Share, subject to adjustment, as provided in the Plan, in the
event of a stock split, reverse stock split or other events
affecting the holders of Shares. Payment shall be made in
accordance with Paragraph 7 of the Plan.

     
3. EXERCISABILITY OF OPTION. Subject to the
terms and conditions set forth in this Agreement and the Plan,
the Option granted hereby shall become exercisable as follows:

	 	 	 
	
    On or after the first anniversary of

    the date of this Agreement	 	
    up to «VEST1WRIT»

    («VEST1NUM») Shares
	
    On or after the second anniversary of

    the date of this Agreement	 	
    up to an additional «VEST2WRIT» («VEST2NUM»)
    Shares
	
    On or after the third anniversary of

    the date of this Agreement	 	
    up to an additional «VEST3WRIT» («VEST3NUM»)
    Shares
	
    On or after the fourth anniversary of

    the date of this Agreement	 	
    up to an additional «VEST4WRIT» («VEST4NUM»)
    Shares

     
The foregoing rights are cumulative and are subject to the other
terms and conditions of this Agreement and the Plan.

     
4. TERM OF OPTION. The Option shall terminate
ten (10) years from the date of this Agreement, but shall
be subject to earlier termination as provided herein or in the
Plan.

     
If the Participant ceases to be an employee, director or
consultant of the Company or of an Affiliate (for any reason
other than the death or Disability of the Participant or
termination of the Participant for “cause” (as defined
in the Plan)), the Option may be exercised, if it has not
previously terminated, within three (3) months after the
date the Participant ceases to be an employee, director or
consultant of the Company or an Affiliate, or within the
originally prescribed term of the Option, whichever is earlier,
but may not be exercised thereafter. In such event, the Option
shall be exercisable only to the extent that the Option has
become exercisable and is in effect at the date of such
cessation of employment, directorship or consultancy.

 

     
Notwithstanding the foregoing, in the event of the
Participant’s Disability or death within three
(3) months after the termination of employment,
directorship or consultancy, the Participant or the
Participant’s Survivors may exercise the Option within one
(1) year after the date of the Participant’s
termination of employment, directorship or consultancy, but in
no event after the date of expiration of the term of the Option.

     
In the event the Participant’s employment, directorship or
consultancy is terminated by the Company or an Affiliate for
“cause” (as defined in the Plan), the
Participant’s right to exercise any unexercised portion of
this Option shall cease as of such termination, and this Option
shall thereupon terminate. Notwithstanding anything herein to
the contrary, if subsequent to the Participant’s
termination, but prior to the exercise of the Option, the Board
of Directors of the Company determines that, either prior or
subsequent to the Participant’s termination, the
Participant engaged in conduct which would constitute
“cause,” then the Participant shall immediately cease
to have any right to exercise the Option and this Option shall
thereupon terminate.

     
In the event of the Disability of the Participant, as determined
in accordance with the Plan, the Option shall be exercisable
within one (1) year after the Participant’s
termination of service or, if earlier, within the term
originally prescribed by the Option. In such event, the Option
shall be exercisable:

		
	 	     
    (a) To the extent exercisable but not exercised as of the
    date of Disability; and
	 
	 	     
    (b) In the event rights to exercise the Option accrue
    periodically, to the extent of a pro rata portion of any
    additional rights to exercise the Option as would have accrued
    had the Participant not become Disabled prior to the end of the
    accrual period which next ends following the date of Disability.
    The proration shall be based upon the number of days during the
    accrual period prior to the date of Disability.

     
In the event of the death of the Participant while an employee,
director or consultant of the Company or of an Affiliate, the
Option shall be exercisable by the Participant’s Survivors
within one (1) year after the date of death of the
Participant or, if earlier, within the originally prescribed
term of the Option. In such event, the Option shall be
exercisable:

		
	 	     
    (x) To the extent exercisable but not exercised as of the
    date of death; and
	 
	 	     
    (y) In the event rights to exercise the Option accrue
    periodically, to the extent of a pro rata portion of any
    additional rights to exercise the Option as would have accrued
    had the Participant not died prior to the end of the accrual
    period which next ends following the date of death. The
    proration shall be based upon the number of days during the
    accrual period prior to the Participant’s death.

     
5. METHOD OF EXERCISING OPTION. Subject to
the terms and conditions of this Agreement, the Option may be
exercised by written notice to the Company at its principal
executive office, in substantially the form of
Exhibit A attached hereto. Such notice shall state
the number of Shares with respect to which the Option is being
exercised and shall be signed by the person exercising the
Option. Payment of the purchase price for such Shares shall be
made in accordance with Paragraph 7 of the Plan. The
Company shall deliver a certificate or certificates representing
such Shares as soon as practicable after the notice shall be
received, provided, however, that the Company may delay issuance
of such Shares until completion of any action or obtaining of
any consent, which the Company deems necessary under any
applicable law (including, without limitation, state securities
or “blue sky” laws). The certificate or certificates
for the Shares as to which the Option shall have been so
exercised shall be registered in the name of the person or
persons so exercising the Option (or, if the Option shall be
exercised by the Participant and if the Participant shall so
request in the notice exercising the Option, shall be registered
in the name of the Participant and another person jointly, with
right of survivorship) and shall be delivered as provided above
to or upon the written order of the person or persons exercising
the Option. In the event the Option shall be exercised, pursuant
to Section 4 hereof, by any person or persons other than
the Participant, such notice shall be accompanied by appropriate
proof of the right of such person or persons to exercise the
Option. All Shares that shall be purchased upon the exercise of
the Option as provided herein shall be fully paid and
nonassessable.

2

 

     
6. PARTIAL EXERCISE. Exercise of this Option
to the extent above stated may be made in part at any time and
from time to time within the above limits, except that no
fractional share shall be issued pursuant to this Option.

     
7. NON-ASSIGNABILITY. The Option shall not be
transferable by the Participant otherwise than by will or by the
laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I
of the Employee Retirement Income Security Act or the rules
thereunder. Except as provided in the previous sentence, the
Option shall be exercisable, during the Participant’s
lifetime, only by the Participant (or, in the event of legal
incapacity or incompetency, by the Participant’s guardian
or representative) and shall not be assigned, pledged or
hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted transfer, assignment, pledge,
hypothecation or other disposition of the Option or of any
rights granted hereunder contrary to the provisions of this
Section 7, or the levy of any attachment or similar process
upon the Option shall be null and void.

     
8. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
The Participant shall have no rights as a stockholder with
respect to Shares subject to this Agreement until registration
of the Shares in the Company’s share register in the name
of the Participant. Except as is expressly provided in the Plan
with respect to certain changes in the capitalization of the
Company, no adjustment shall be made for dividends or similar
rights for which the record date is prior to the date of such
registration.

     
9. CAPITAL CHANGES AND BUSINESS SUCCESSIONS.
The Plan contains provisions covering the treatment of Options
in a number of contingencies such as stock splits and mergers.
Provisions in the Plan for adjustment with respect to stock
subject to Options 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.

     
10. TAXES. The Participant acknowledges that
upon exercise of the Option the Participant will be deemed to
have taxable income measured by the difference between the then
fair market value of the Shares received upon exercise and the
price paid for such Shares pursuant to this Agreement. The
Participant acknowledges that any income or other taxes due from
him or her with respect to this Option or the Shares issuable
pursuant to this Option shall be the Participant’s
responsibility. The Participant agrees that the Company may
withhold from the Participant’s remuneration, if any, the
appropriate amount of federal, state and local withholding
attributable to such amount that is considered compensation
includable in such person’s gross income. At the
Company’s discretion, the amount required to be withheld
may be withheld in cash from such remuneration, or in kind from
the Shares otherwise deliverable to the Participant on exercise
of the Option. The Participant further agrees that, if the
Company does not withhold an amount from the Participant’s
remuneration sufficient to satisfy the Company’s income tax
withholding obligation, the Participant will reimburse the
Company on demand, in cash, for the amount under-withheld.

     
11. PURCHASE FOR INVESTMENT. Unless the
offering and sale of the Shares to be issued upon the particular
exercise of the Option shall have been effectively registered
under the Securities Act of 1933, as now in force or hereafter
amended (the “1933 Act”), the Company shall be
under no obligation to issue the Shares covered by such exercise
unless and until the following conditions have been fulfilled:

		
	 	     
    (a) The person(s) who exercise the Option shall warrant to
    the Company, at the time of such exercise, that such person(s)
    are acquiring such Shares for their own respective accounts, for
    investment, and not with a view to, or for sale in connection
    with, the distribution of any such Shares, in which event the
    person(s) acquiring such Shares shall be bound by the provisions
    of the following legend which shall be endorsed upon the
    certificate(s) evidencing the Shares issued pursuant to such
    exercise:

		
	 	
    “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;” and

3

 

		
	 	     
    (b) If the Company so requires, the Company shall have
    received an opinion of its counsel that the Shares may be issued
    upon such particular exercise in compliance with the
    1933 Act without registration thereunder. Without limiting
    the generality of the foregoing, the Company may delay issuance
    of the Shares until completion of any action or obtaining of any
    consent, which the Company deems necessary under any applicable
    law (including without limitation state securities or “blue
    sky” laws).

     
12. RESTRICTIONS ON TRANSFER OF SHARES. If,
in connection with a registration statement filed by the Company
pursuant to the Securities Act, the Company or its underwriter
so requests, the Participant will agree not to sell any Shares
for a period not to exceed 180 days following the
effectiveness of such registration.

     
13. NO OBLIGATION TO MAINTAIN RELATIONSHIP.
The Company is not by the Plan or this Option obligated to
continue the Participant as an employee, director or consultant
of the Company.

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

     
If to the Company to: The Company at its principal business
office.

     
If to the Participant to: The Participant at the address
set forth below.

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 upon the earlier of receipt, one
business day following delivery to a recognized courier service
or three business days following mailing by registered or
certified mail.

     
15. GOVERNING LAW. This Agreement shall be
construed and enforced in accordance with the law of the State
of Delaware, without giving effect to the conflict of law
principles thereof.

     
16. 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.

     
17. ENTIRE AGREEMENT. This Agreement,
together with the Plan, embodies 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.

     
18. MODIFICATIONS AND AMENDMENTS. The terms
and provisions of this Agreement may be modified or amended as
provided in the Plan.

     
19. WAIVERS AND CONSENTS. 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.

4

 

     
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and the Participant has
hereunto set his or her hand, all as of the day and year first
above written.

		
	 	
    ALLOY, INC.

			
	 	By: 	
     

		
	 	
     

	 	
    Name: 
	 	
    Title:   
	 
	 	
    PARTICIPANT
	 
	 	
     

	 	
    Signature
	 
	 	
    Name: «FIRSTNAME» «LASTNAME»

			
	 	Address: 	
    c/o Alloy, Inc.

		
	 	
    151 West 26th Street
	 	
    11th Floor
	 	
    New York, New York 10001

5

 

Exhibit A

NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION

[Form For Registered Shares]

TO: ALLOY, INC.

IMPORTANT NOTICE: This form of Notice of Exercise may only be
used at such time as the Company has filed a Registration
Statement with the Securities and Exchange Commission under
which the issuance of the Shares for which this exercise is
being made is registered and such Registration Statement remains
effective.

Ladies and Gentlemen:

     
I hereby exercise my Non-Qualified Stock Option to
purchase                      shares
(the “Shares”) of the common stock, par value
$.01 per share, of Alloy, Inc. (the “Company”),
at the exercise price of $«PRICE» per share,
pursuant to and subject to the terms of that certain
Non-Qualified Stock Option Agreement between the undersigned and
the Company dated as of «GRANTDATE».

     
I understand the nature of the investment I am making and the
financial risks thereof. I am aware that it is my responsibility
to have consulted with competent tax and legal advisors about
the relevant national, state and local income tax and securities
laws affecting the exercise of the Option and the purchase and
subsequent sale of the Shares.

     
I am paying the option exercise price for the Shares as
follows:                     

     
Please issue the stock certificate for the Shares (check one):
[          ]
to me; or
[          ]
to me
and                     ,
as joint tenants with right of survivorship and mail the
certificate to me at the following
address:                    

     
My mailing address for shareholder communications, if different
from the address listed above,
is:                    

		
	 	
    Very truly yours,
	 	
     

	 	
    «FIRSTNAME» «LASTNAME»
	 	
     

	 	
    Date
	 
	 	
    «SSNO»
	 	
    Social Security Number

A-1

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