Exhibit 10.2(b)(ii)
 
December 4, 2008
 
Mr. Joseph Melvin
133 Stephen Mather Road
Darien, CT 06820
 
Dear Joseph:
 
This letter (the “2008 Letter”) supplements the letter dated April 18, 1997 (the
“1997 Letter”) that confirms the terms of your employment as President and Chief
Operating Officer of Finlay Fine Jewelry Corporation (the “Company”). The
purpose of this 2008 Letter is to clarify the time and form of payments
specified under the 1997 Letter with the intent of addressing Section 409A of
the Internal Revenue Code of 1986, as amended.
 
Except as set forth below, the 1997 Letter remains in effect. Capitalized terms
used and not otherwise defined in this 2008 Letter have the meaning ascribed to
them in the 1997 Letter.
 
Annual Bonus:
The Annual Bonus, if any, shall be paid no later than March 15th of the calendar
year following the end of the calendar year in which the applicable fiscal year
to which such Annual Bonus relates ends.
   
Severance:
Upon termination of your employment by the Company without cause (not including
death or disability) or if you terminate employment with the Company because the
Company gives you a lesser title, you shall receive one year of Base Salary
payable in accordance with the Company’s payroll practices and subject to the
Delay Period set forth under the Subsection (c) of the Section titled “Code
Section 409A” below.
   
Code Section 409A:
(a)             It is intended that the payments and benefits under the 1997
Letter, as supplemented by this 2008 Letter (collectively, the “Letters”) be
exempt from, or comply with, Section 409A of Code and the regulations and
guidance promulgated thereunder (collectively “Code Section 409A”), and all
provisions of the Letters shall be construed in a manner consistent with the
requirements under Code Section 409A.  The Company shall have no liability to
you with regard to any failure to comply with Code Section 409A.
     
(b)             A termination of employment shall not be deemed to have occurred
for purposes of any provision of the Letters providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “Separation from Service” within the meaning of Code
Section 409A and, for purposes of any such provision of the Letters, references
to “termination,” “termination of employment” or like terms shall mean
Separation from Service.

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Mr. Joseph Melvin
December 4, 2008
Page 2
 

 
(c)             Solely to the extent any payments and/or benefits provided
pursuant to the Letters constitute “deferred compensation” as defined under Code
Section 409A, if you are deemed on the date of termination of your employment to
be a “specified employee,” within the meaning of that term under Section
409A(a)(2)(B) of the Code and using the identification methodology selected by
the Company from time to time, or if none, the default methodology, then any
such payment or benefit, to the extent required to be delayed in compliance with
Section 409A(a)(2)(B) of the Code, shall not be made or provided prior to the
earlier of (i) the expiration of the six-month period measured from the date of
your Separation from Service or (ii) the date of your death (the “Delay
Period”).  On the first day of the seventh month following the date of your
Separation from Service or, if earlier, on the date of your death, all payments
delayed pursuant to this Subsection (c) (whether they would have otherwise been
payable in a single sum or in installments in the absence of such delay) shall
be paid or reimbursed to you in a lump sum, and any remaining payments and
benefits due under the Letters shall be paid or provided in accordance with the
normal payment dates set forth in the Letters.  Promptly following the
expiration of such six-month period, all compensation suspended pursuant to the
foregoing sentence (whether it would have otherwise been payable in a single sum
or in installments in the absence of such suspension) shall be paid or
reimbursed to you in a lump sum.
     
(d) With regard to any provision in the Letters that provides for reimbursement
of costs and expenses or in-kind benefits, except as permitted by Code Section
409A, (i) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, (ii) the amount of expenses
eligible for reimbursement, or in-kind benefits, provided during any taxable
year shall not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year, provided, that the foregoing
clause (ii) shall not be violated with regard to expenses reimbursed under any
arrangement covered by Section 105(b) of the Code solely because such expenses
are subject to a limit related to the period the arrangement is in effect, and
(iii) such payments shall be made on or before the last day of your taxable year
following the taxable year in which the expense was incurred.

 

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Mr. Joseph Melvin
December 4, 2008
Page 3
 
If you agree with the terms of this 2008 Letter clarifying the time and form of
payments specified under the 1997 Letter, please so indicate by signing and
returning the enclosed copy, whereupon this letter shall constitute a binding
agreement between you and the Company.
 

  Sincerely,      
FINLAY FINE JEWELRY CORPORATION
 
By:
/s/ Joyce Manning
   
Name: Joyce Manning
   
Title EVP Administration
     
Accepted and agreed:
           /s/ Joseph Melvin      
Joseph Melvin
 

 
 
 

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