Exhibit 10.1

March 11, 2009

Mr. Arthur E. Reiner

Finlay Enterprises, Inc.

529 Fifth Avenue

New York, NY. 10017

Re: Retention Bonus Payments

Dear Art:

This letter (the “Letter”) sets forth the terms of your eligibility to receive
two retention bonus payments as described in Paragraph 1 below. This Letter
shall be effective as of March 6, 2009 (the “Effective Date”).

1. Retention Bonus Payments. (a) Within five days following the Effective Date,
in recognition of your agreement not to terminate your employment with Finlay
Enterprises, Inc., a Delaware corporation (the “Parent”), and Finlay Fine
Jewelry Corporation, a Delaware corporation (the “Operating Company”, and
collectively referred to herein as the “Company”), at this time, and as
consideration for your continued employment with the Company beyond the
scheduled expiration of the term of your employment agreement dated as of
January 30, 2005, as subsequently amended (the “Employment Agreement”), among
you, the Parent and the Operating Company, you shall receive a lump sum
retention bonus payment in the amount of Five Hundred Thousand Dollars
($500,000.00).

(b) Within five days following the earlier of (i) the consummation of the sale
of certain inventory, fixtures and related assets of the Operating Company, and
(ii) April 1, 2009 (such earlier date, the “Payment Date”), as consideration for
your continued employment with the Company through the Payment Date, you shall
receive an additional lump sum retention bonus payment in the amount of Five
Hundred Thousand Dollars ($500,000.00), provided that you have been continuously
employed by the Company from the Effective Date of this Letter through the
Payment Date. Notwithstanding anything herein to the contrary, if you are not
employed by the Company for any reason whatsoever (whether voluntarily or
involuntarily on your part) on the Payment Date, your right to the payment
pursuant to this paragraph 1(b) shall immediately expire.

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Mr. Arthur E. Reiner

March 11, 2009

Page 2

2. Forfeiture of Severance Benefit Under Employment Agreement. You hereby
forfeit and waive your right to the “Severance Amount” to which you otherwise
may have been eligible to receive under Section 9 of the Employment Agreement.
All other terms and conditions of the Employment Agreement continue in full
force and effect solely to the extent provided therein. The parties acknowledge
that the amount of each of the retention bonus payments described in Paragraph 1
above, as well as both retention bonus payments in the aggregate, is materially
less than the Severance Amount.

3. No Right to Continued Employment. Nothing herein contained shall be held or
construed to create any liability or obligation upon the Company to retain you
in its service, or require you to remain in the Company’s employ (other than as
may be necessary to qualify for any payments hereunder). You shall remain
subject to discharge or discipline to the same extent as if this Letter had not
been put into effect.

4. Withholding. The Company shall have the right to make such provisions as it
deems necessary or appropriate to satisfy any obligations it may have to
withhold federal, state or local income or other taxes incurred by reason of
payments pursuant to this Letter.

5. Code Section 409A. Although the Company does not guarantee to you any
particular tax treatment relating to payments under this Letter, the payments
described in Paragraph 1 above are intended to be exempt from the applicable
requirements of Section 409A of the Internal Revenue Code of 1986, as amended
(“Section 409A”) and shall be limited, construed and interpreted in accordance
with such intent. In no event whatsoever shall the Company be liable for any
additional tax, interest or penalties that may be imposed on you by Section 409A
or any damages for failing to comply with Section 409A.

6. Entire Agreement. This Letter sets forth the entire understanding between you
and the Company with respect to the subject matter hereof and supersedes all
prior or contemporaneous plans, agreements and understandings (whether oral or
written) between the Company, on the one hand, and you, on the other hand,
relating to such subject matter.

7. Miscellaneous. This Letter shall be governed by the laws of the State of New
York (including Section 5-1401 of the New York General Obligations Law). No
provision in this Letter may be amended unless such amendment is agreed to in
writing and signed by you and an authorized officer of the Company.

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Mr. Arthur E. Reiner

March 11, 2009

Page 3

This Letter shall have no effect until it has been signed and returned to the
Company.

We look forward to your continued employment with the Company.

 

Sincerely,

FINLAY ENTERPRISES, INC.

By

   /s/ Bruce E. Zurlnick         Bruce E. Zurlnick, SVP & CFO

FINLAY FINE JEWELRY CORPORATION

By

   /s/ Bruce E. Zurlnick         Bruce E. Zurlnick, SVP & CFO

 

 

Acknowledged & Accepted:

/s/ Arthur E. Reiner

 

Arthur E. Reiner