Unassociated Document


    
       

      Exhibit
10.2

      SECOND
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

      


      


      This
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of April 27,
2010, by and between Bluefly, Inc., a Delaware corporation (the “Company”), and
Kara Jenny (“Jenny”).

      


      RECITALS

      


      1.             The
Company currently employs Jenny pursuant to an Amended and Restated Employment
Agreement dated as of March 19, 2008 (as amended to date, the “Previous
Agreement”).

      


      2.             The
parties wish to amend and restate the Previous Agreement in its entirety
pursuant to the terms hereof.

      


      NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and Jenny agree as follows:

      


      1.             TERM

      


      The
Company hereby agrees to employ Jenny as Chief Financial Officer of the Company,
and Jenny hereby agrees to serve in such capacity, for a term ending on December
31, 2012 (as the same may be earlier terminated pursuant to the terms of this
Agreement, the “Employment Term”), upon the terms and subject to the conditions
contained in this Agreement; provided, however, that if the
Company does not provide Jenny with written notice of its desire not to renew
this Agreement at least 90 days prior to the end of the then current term
(including any one year renewal term that is created as a result of this
proviso), this Agreement shall automatically extend for one year from the end of
the then current term.

      


      2.             DUTIES

      


      During
the Employment Term, Jenny shall serve as Chief Financial Officer of the
Company, and shall be responsible for the duties attendant to such office and
such other managerial duties and responsibilities with the Company consistent
with such office as may be reasonably assigned to her from time to
time.

      


      The
principal location of Jenny’s employment shall be in the New York City vicinity
(i.e., within a 20 mile radius), although Jenny understands and agrees that she
will be required to travel from time to time for business
reasons.  Jenny shall diligently and faithfully perform her
obligations under the Agreement and shall devote her full professional and
business time to the performance of her duties as Chief Financial Officer of the
Company during the Employment Term.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      3.             BASE
SALARY

      


      For
services rendered by Jenny to the Company during the Employment Term, the
Company shall, effective as of January 1, 2010, pay her a base salary of
$300,000 per year, payable in accordance with the standard payroll practices of
the Company, subject to annual increases in the sole discretion of the
Compensation Committee of the Company's Board of Directors (the “Compensation
Committee”), taking into account the financial and operating performance of the
Company's business and divisions and a qualitative assessment of Jenny’s
performance during such year.

      


      4.             BONUS; VESTING OF OPTIONS
UPON CHANGE OF CONTROL

      


      a.             During
the Employment Term, Jenny shall be eligible to receive a bonus set by the
Compensation Committee in its sole discretion and based on such factors as it
deems appropriate.  All bonuses shall be paid in accordance with the
Company’s standard payroll practices, net of any applicable
withholding.  No bonus will be payable under this section unless Jenny
is employed on December 31st of the
fiscal year to which such bonus relates.  Any bonus payable under this
section, shall be paid no later than March 15th of the
fiscal year following the fiscal year to which such bonus relates.

      


      b.   
    In the
event that a Change of Control (as defined below) occurs during the term of this
Agreement, one half of any unvested stock options granted to Jenny which are
outstanding as of the date of that Change of Control and have not yet vested
(“Unvested Options”) shall be deemed to be fully vested as of that
date.  Subject to paragraph 7(c), the remaining one half of the
Unvested Options shall vest on the earliest to occur of (x) the scheduled
vesting date and (y) twelve (12) months from the date of such Change of Control,
subject, in each case, to Jenny’s continued employment with the Company on such
dates.

      


      c.             For
purposes of this Agreement, “Change of Control” shall be deemed to occur
upon:

       

      (1)         
  the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent
(50%) or more (on a fully diluted basis) of either (A) the then outstanding
shares of common stock of the Company, taking into account as outstanding for
this purpose such common stock issuable upon the exercise of options or
warrants, the conversion of convertible stock or debt, and the exercise of any
similar right to acquire such common stock (the “Outstanding Company Common
Stock”) or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election

       

      
        
          
          

        

        
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      of
directors (the “Outstanding Company Voting Securities”); provided, however, that for
purposes of this Agreement, the following acquisitions shall not constitute a
Change of Control:  (I) any acquisition by the Company or any
“Affiliate” (as defined below), (II) any acquisition by any employee benefit
plan sponsored or maintained by the Company or any Affiliate, (III) any
acquisition by Quantum Industrial Partners LDC, Soros Fund Management LLC,
and/or SFM Domestic Investments LLC and/or any of their affiliates
(collectively, “Soros”), (IV) any acquisition by Rho Ventures VI, L.P. and/or
any of its affiliates (collectively, “Rho”)or (V) any acquisition which complies
with clauses (A), (B) and (C) of sub-paragraph (a)(5) hereof ;

       

      (2)           Individuals
who, on the date hereof, constitute the Board (the “Incumbent Directors”) cease
for any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof, whose election or
nomination for election was approved by a vote of at least two-thirds of the
Incumbent Directors then on the Board (either by a specific vote or by approval
of the proxy statement of the Company in which such person is named as a nominee
for director, without written objection to such nomination) shall be an
Incumbent Director; provided, however, that no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed to
be an Incumbent Director;

       

      (3)           the
dissolution or liquidation of the Company;

       

      (4)           the
sale of all or substantially all of the business or assets of the Company;
or

       

      (5)           the
consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company that requires the approval
of the Company’s stockholders, whether for such transaction or the issuance of
securities in the transaction (a “Business Combination”), unless immediately
following such Business Combination:  (A) more than fifty percent
(50%) of the total voting power of (x) the corporation resulting from such
Business Combination (the “Surviving Corporation”), or (y) if applicable, the
ultimate parent corporation that directly or indirectly has beneficial ownership
of sufficient voting securities eligible to elect a majority of the directors of
the Surviving Corporation (the “Parent Corporation”), is represented by the
Outstanding Company Voting Securities that were outstanding immediately prior to
such Business Combination (or, if applicable, is represented by shares into
which the Outstanding Company Voting Securities were converted pursuant to such
Business Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of the Company’s Voting
Securities among the holders thereof immediately prior to the Business
Combination, (B) no Person (other than Soros, Rho or any employee benefit plan
sponsored or maintained by the Surviving Corporation or the Parent Corporation),
is or becomes the beneficial owner, directly or indirectly, of thirty percent
(30% ) or more of the total voting power of the outstanding voting securities
eligible to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the
members of the board of directors of the Parent Corporation (or, if
there

       

      
        
          
          

        

        
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      is no
Parent Corporation, the Surviving Corporation) following the consummation of the
Business Combination were Board members at the time of the Board’s approval of
the execution of the initial agreement providing for such Business
Combination.

       

      d.             For
purposes of this Agreement, the term “Affiliate” shall mean any entity that
directly or indirectly is controlled by, controls or is under common control
with the Company.

      


      5.        
     EXPENSE REIMBURSEMENT AND
PERQUISITES

      


      a.             During
the Term of this Agreement, Jenny shall be entitled to reimbursement of all
reasonable and actual out-of­-pocket expenses incurred by her in the
performance of her services to the Company consistent with corporate policies,
if any, provided that the expenses are properly accounted for.  In the
event that any such reimbursement is taxable to Jenny, such reimbursement shall
be made as soon practical upon Jenny’s submission of a request to be reimbursed,
but in all events such reimbursement will be made prior to the end of the
calendar year next following the calendar year in which the applicable expense
was incurred.

      


      b.             During
each calendar year of the Employment Term, Jenny shall be entitled to reasonable
vacation with full pay in accordance with the Company’s then-current vacation
policies; provided, however, that Jenny
shall schedule such vacations at times convenient to the Company.

      


      c.             During
the term of this Agreement, the Company shall provide an annual allowance of ten
thousand dollars ($10,000) for the purchase of term life insurance by the
Company for the benefit of Jenny (which shall be in lieu of any other life
insurance benefit) and the purchase of a supplemental disability insurance
policy.  Jenny shall be entitled to participate in all health
insurance, dental insurance, long-term disability insurance and other employee
benefit plans instituted by the Company from time to time on the same terms and
conditions as other similarly situated employees of the Company, to the extent
permitted by law.

      


      6.          
   NON-COMPETITION;
NON-SOLICITATION

      


      a.             In
consideration of the offer of employment, severance benefits and Options to be
granted to Jenny hereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, during the
Non-Competition Term, Jenny shall not, without the prior written consent of the
Company, anywhere in the world, directly or indirectly, (i) enter into the
employ of or render any services to any Competitive Business; (ii) engage in any
Competitive Business for her own account; (iii) become associated with or
interested in any Competitive Business as an individual, partner, shareholder,
creditor, director, officer, principal, agent, employee, trustee, consultant,
advisor or in any other relationship or capacity; (iv) employ or retain, or have
or cause any other person or entity to employ or retain, any person who was
employed or retained by the Company while Jenny was

       

      
        
          
          

        

        
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      employed
by the Company; or (v) solicit, interfere with, or endeavor to entice away from
the Company, for the benefit of a Competitive Business, any of its customers or
other persons with whom the Company has a contractual
relationship.  For purposes of this Agreement, a “Competitive
Business” shall mean any person, corporation, partnership, firm or other entity
which sells or has plans to sell ten (10) or more brands of luxury or high-end
designer apparel and/or fashion accessories at prices that are consistently
discounted to manufacturer’s suggested retail prices.   However,
nothing in this Agreement shall preclude Jenny from investing her personal
assets in the securities of any corporation or other business entity which is
engaged in a Competitive Business if such securities are traded on a national
stock exchange or in the over-the-counter market and if such investment does not
result in her beneficially owning, at any time, more than three percent (3%) of
the publicly-traded equity securities of such Competitive
Business.  For purposes of this agreement, the “Non-Competition Term”
shall mean a period beginning upon the commencement of the Employment Term and
ending on the two (2) year anniversary of the end of the Employment
Term.

      


      b.             Jenny
and the Company agree that the covenants of non-competition and non-solicitation
contained in this paragraph 6 are reasonable covenants under the circumstances,
and further agree that if, in the opinion of any court of competent
jurisdiction, such covenants are not reasonable in any respect, such court shall
have the right, power and authority to excise or modify such provision or
provisions of these covenants as to the court shall appear not reasonable and to
enforce the remainder of these covenants as so amended.  Jenny agrees
that any breach of the covenants contained in this paragraph 6 would irreparably
injure the Company.  Accordingly, Jenny agrees that the Company, in
addition to pursuing any other remedies it may have in law or in equity, may
obtain an injunction against Jenny from any court having jurisdiction over the
matter, restraining any further violation of this paragraph 6.

      


      7.         
    TERMINATION

      


      a.   
         This Agreement, the
employment of Jenny, and Jenny’s position as Chief Financial Officer of the
Company shall terminate upon the first to occur of:

      


      
        	
              	
                (i)

              	
                her
      death;

              


      

      


      
        	
                 
      

              	
                (ii)

              	
                her
      "permanent disability," due to injury or sickness for a continuous period
      of four (4) months, or a total of eight months in a twenty-four month
      period (vacation time excluded), during which time Jenny is unable perform
      her ordinary and regular duties, provided that the Company shall give
      Jenny thirty (30) days’ written notice prior to any such
      termination;

              


      

      


      
        	
                 
      

              	
                (iii)

              	
                a
      ‘Constructive Termination’ by the Company during the Employment Term,
      which, for purposes of this Agreement shall be deemed to have occurred
      upon (A) the removal of Jenny without her consent from
  her

              


      

       

      
        
          
          

        

        
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      position as
Chief Financial Officer of the Company, or (B) the material breach by the
Company of this Agreement; provided, however, that a Constructive Termination
shall not be deemed to have occurred unless: (1) Jenny gives the Company notice
within ninety (90) days after an event or occurrence which Jenny believes
constitutes a Constructive Termination, specifying the event or occurrence which
Jenny believes constitutes a Constructive Termination; and (2) the Company fails
to cure such act or failure to act within thirty (30) days after receipt of such
notice;

       

      
        	
                 
      

              	
                (iv)

              	
                the
      termination of this Agreement at any time without cause by the
      Company;

              


      

      


      
        	
                 
      

              	
                (v)

              	
                the
      termination of this Agreement for cause, which, for purposes of this
      Agreement, shall mean that (1) Jenny has been convicted of a felony or any
      serious crime involving moral turpitude, or engaged in materially
      fraudulent or materially dishonest actions in connection with the
      performance of her duties hereunder, or (2) Jenny has willfully and
      materially failed to perform her duties hereunder, provided that the
      Company shall provide Jenny with at least ten (10) business days’ prior
      written notice of any such failure to perform and an opportunity to cure
      such failure, to the extent curable or (3) Jenny has willfully or
      negligently breached the terms and provisions of this Agreement in any
      material respect, provided that the Company shall provide Jenny with at
      least ten (10) business days’ prior written notice of any such breach and
      an opportunity to cure such breach, to the extent curable or (4) Jenny has
      failed to comply in any material respect with the Company's policies of
      conduct that have been communicated to her, including with respect to
      trading in securities, provided that the Company shall provide Jenny with
      at least ten (10) business days’ prior written notice of any such failure
      to comply and an opportunity to cure such failure, to the extent curable;
      or

              


      

      


      
        	
                 
      

              	
                (vi)

              	
                the
      termination of this Agreement by Jenny, which shall occur on not less than
      thirty (30) days prior written notice from
  Jenny.

              


      

      


      b.             In
the event that this Agreement is terminated during the Employment Term pursuant
to paragraphs 7(a)(i), 7(a)(ii), 7(a)(v) or 7(a)(vi), the Company shall pay
Jenny her base salary only through the date of termination.  In the
event that this Agreement is terminated during the Employment Term pursuant to
paragraphs 7(a)(iii) or 7(a)(iv), the Company shall pay Jenny, in lieu of all
salary, compensation payments and perquisites set forth in paragraphs 3, 4 and 5
(including bonus payments and unvested option grants, but excluding vested
option grants) and contingent upon her continued performance of her obligations
under Section 6, severance payments (the "Severance Payments") as
follows:

       

      
        
          
          

        

        
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      (i)  the
then-current base salary for a period of one hundred and eighty (180) days,
commencing on the 60th day
after the date of termination; and

      


      (ii)  the
Company shall maintain in effect, or reimburse Jenny for the cost of
maintaining, the medical and dental insurance and hospitalization plans of the
Company, as well as any Company sponsored life insurance policy in which Jenny
participates as of the date of such termination, for a period of one year from
the date of termination.

      


      The
Severance Payments shall be payable in periodic installments in accordance with
the Company's standard payroll practices and will be subject to any applicable
withholding, and shall be conditioned upon Jenny executing a full release of any
claims against the Company, in a form reasonably satisfactory to the Company
within 60 days of such termination, as well as her continued compliance with the
terms of this Agreement.

      


      c.       
     Notwithstanding anything herein to the contrary,
if any payments due under this Agreement would subject Jenny to any tax imposed
under Section 409A of the Code if such payments were made at the time otherwise
provided herein, then the payments that cause such taxation shall be payable in
a single lump sum on the first day which is at least six (6) months after the
date of Jenny’s “separation from service” as set forth in Code Section
409A(2)(A)(i) and the official guidance issued thereunder.

      


      8.             CONFIDENTIALITY

      


      a.     
       Jenny recognizes that the services to
be performed by her are special, unique and extraordinary in that, by reason of
her employment under this Agreement, she may acquire or has acquired
confidential information and trade secrets concerning the operation of the
Company, its  predecessors, and/or its affiliates, the use or
disclosure of which could cause the Company, or its affiliates substantial loss
and damages which could not be readily calculated and for which
no  remedy at law would be adequate.  Accordingly, Jenny
covenants and agrees with the Company that she will not at any time during the
Term of this Agreement or thereafter, except in the performance of her
obligations to the Company or with the prior written consent of the Board of
Directors or as otherwise required by court order, subpoena or other government
process, directly or indirectly, disclose any secret or confidential information
that she may learn or has learned by reason of his association with the
Company.  If Jenny shall be required to make such disclosure pursuant
to court order, subpoena or other government process, she shall notify the
Company of the same, by personal delivery or electronic means, confirmed by
mail, within twenty-four (24) hours of learning of such court order, subpoena or
other government process and, at the Company's expense (such expenses to be
advanced by the Company as reasonably required by Jenny), shall (i) take all
necessary and lawful steps reasonably required by the Company to defend against
the enforcement of such subpoena, court order or government

       

      
        
          
          

        

        
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      process,
and (ii) permit the Company to intervene and participate with counsel of its
choice in any proceeding relating to the enforcement
thereof.   The term "confidential information" includes, without
limitation, information not in the public domain and not previously disclosed to
the public or to the trade by the Company's management with respect to the
Company's or its affiliates' facilities and methods, trade secrets and other
intellectual property, designs, manuals, confidential reports, supplier names
and pricing, customer names and prices paid, financial information or business
plans.

      


      Notwithstanding the preceding
paragraph, “confidential information” shall not include any information
which

      


      
        
          	
                	
                  (i) 

                	
                  was
      publicly known and made generally available in the public domain prior to
      the time of disclosure by the Company to
Jenny;

                


        

      

       

      
        	
                 
      

              	
                (ii)

              	
                becomes
      publicly known and made generally available after disclosure by the
      Company to Jenny through no action of Jenny;
or

              


      

      


      
        	
                 
      

              	
                (iii)

              	
                was
      known to Jenny prior to its disclosure by the Company or is obtained by
      Jenny from a third party without a breach of such third party’s
      obligations of confidentiality.

              


      

      


      b.           
 Jenny confirms that all confidential information is and shall remain the
exclusive property of the Company.  All memoranda, notes, reports,
software, sketches, photographs, drawings, plans, business records, papers or
other documents or computer-stored or disk-stored information kept or made by
Jenny relating to the business of the Company shall be and will remain the sole
and exclusive property of the Company and all such materials containing
confidential information shall be promptly delivered and returned to the Company
immediately upon the termination of his employment with the
Company.

      


      c.       
     Jenny shall make full and prompt disclosure to the
Company of all inventions, improvements, ideas, concepts, discoveries, methods,
developments, software and works of authorship, whether or not copyrightable,
trademarkable or licensable, which are created, made, conceived or reduced to
practice by Jenny while performing her services hereunder to the Company,
whether or not during normal working hours or on the premises of the Company and
which relate in any manner to the business of the Company (all of which are
collectively referred to in this Agreement as "Developments").  All
Developments shall be the sole property of the Company, and Jenny hereby assigns
to the Company, without further compensation, all of her rights, title and
interests in and to the Developments and any and all related patents, patent
applications, copyrights, copyright applications, trademarks and trade names in
the United States and elsewhere.

       

      
        
          
          

        

        
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      d.            At
the Company’s expense, Jenny shall assist the Company in obtaining, maintaining
and enforcing patent, copyright and other forms of legal protection for
intellectual property in any country. Upon the request of the Company and at its
expense, Jenny shall sign all applications, assignments, instruments and papers
and perform all acts necessary or desired by the Company in order to protect its
rights and interests in any Developments.

      


      e.         
   Jenny agrees that any breach of this paragraph 8 will cause
irreparable damage to the Company and that, in the event of such breach, the
Company will have, in addition to any and all remedies of law, including rights
which the Company may have to damages, the right to equitable relief including,
as appropriate, all injunctive relief or specific performance or other equitable
relief.  Jenny understands and agrees that the rights and obligations
set forth in paragraph 8 shall survive the termination or expiration of this
Agreement.

      


      9.    
        REPRESENTATIONS AND
WARRANTIES

      


      a.           
 Jenny represents and warrants to the Company that she was advised to
consult with an attorney of Jenny's own choosing concerning this
Agreement.

      


      b.        
    Jenny represents and warrants to the Company that, to
the best of her knowledge, the execution, delivery and performance of this
Agreement by Jenny complies with all laws applicable to Jenny or to which her
properties are subject and does not violate, breach or conflict with any
agreement by which she or her assets are bound or affected.

      


      10.           GOVERNING
LAW

      


      This
Agreement shall be deemed a contract made under, and for all purposes shall be
construed in accordance with, the internal laws of the State of New York,
without giving effect to its conflict of law provisions.  Any dispute
arising hereunder shall be subject to the exclusive jurisdiction of the federal
and State courts located in New York, New York, and each of the parties hereto
hereby irrevocably submits to such jurisdiction and waives any objection to such
venue.

      


      11.           ENTIRE
AGREEMENT

      


      This
Agreement contains all of the understandings between Jenny and the Company
pertaining to Jenny’s employment with the Company, and it supersedes all
undertakings and agreements, whether oral or in writing, previously entered into
between them, including (without limitation) the Previous
Agreement.

      


      11.           AMENDMENT OR MODIFICATION;
WAIVER

      


      No
provision of this Agreement may be amended or modified unless such amendment or


       

      
        
          
          

        

        
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      modification
is agreed to in writing, signed by Jenny and by an officer of the Company duly
authorized to do so.  Except as otherwise specifically provided in
this Agreement, no waiver by either party of any breach by the other party of
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar provision or condition at
the same or any prior or subsequent time.

      


      12.           NOTICES

      


      Any
notice to be given hereunder shall be in writing and delivered personally or
sent by overnight delivery or certified mail, postage prepaid, return receipt
requested, addressed to the party concerned at the address indicated below or to
such other address as such party may subsequently designate by like
notice:

      


      If to the
Company, to:

      


      Bluefly,
Inc.

      42 West
39th Street

      New York,
NY 10018

      Attn:
Chief Executive Officer

      


      


      If to
Jenny, to:

      


      at the
address then on file in the Company’s payroll system

      


      Any such
notice shall be deemed given upon receipt.

      


      13.           SEVERABILITY

      


      In the
event that any provision or portion of this Agreement shall be determined to be
invalid or unenforceable for any reason, the remaining provisions or portions of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law.

      


      14.           TITLES

      


      Titles of
the paragraphs of this Agreement are intended solely for convenience of
reference and no provision of this Agreement is to be construed by reference to
the title of any paragraphs.

      


      15.           COUNTERPARTS

       

      
        
          
          

        

        
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      This
Agreement may be executed in counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument.

      


      
        
          
          

        

        
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      IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.

       

      
        
          	 
      	
                  BLUEFLY,
      INC.

                	 
      
	 
      	 
      	 
      	 
      
	 
      	
                  By:

                	
                  / s / Melissa Payner

                	 
      
	 
      	 
      	
                  Melissa
      Payner

                  Chief Executive Officer

                	 
      
	 
      	 
      	 
      	 
      
	 	 	 	 
	 
      	 
      	 
      	 
      
	 
      	EMPLOYEE	 
      
	 
      	 
      	 
      	 
      
	 
      	
                  / s / Kara Jenny

                	 
      
	 
      	Kara
      Jenny	 
      


        

         

        
          
            
            

          

          
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