EXHIBIT
10.2

    EXECUTION
COPY

    EXHIBIT
A

    


    NON-QUALIFIED
STOCK OPTION AGREEMENT

     

    AGREEMENT
made as of June 1, 2010, by and between Frederick’s of Hollywood Group Inc., a
New York corporation (the “Company”), and Thomas Rende (the
“Employee”).

     

    WHEREAS,
effective on June 1, 2010 (the “Grant Date”), pursuant to the terms and
conditions of the Company’s Amended and Restated 1988 Stock Option Plan (the
“Plan”), the Compensation Committee of the Board of Directors of the Company
(the “Committee”) authorized the grant to the Employee of an option (the
“Option”) to purchase an aggregate of 100,000 shares of the authorized but
unissued Common Stock of the Company, $.01 par value (the “Common Stock”),
conditioned upon the Employee’s acceptance thereof upon the terms and conditions
set forth in this Agreement and subject to the terms of the Plan;
and

     

    WHEREAS,
the Employee desires to acquire the Option on the terms and conditions set forth
in this Agreement.

     

    IT IS
AGREED:

     

    1.           Grant of Stock
Option.  The Company hereby grants the Employee the Option to
purchase all or any part of an aggregate of 100,000 shares of Common Stock (the
“Option Shares”) on the terms and conditions set forth herein and subject to the
provisions of the Plan.

     

    2.           Non-qualified Stock
Option.  The Option represented hereby is not intended to be an
Option which qualifies as an “Incentive Stock Option” under Section 422 of the
Internal Revenue Code of 1986, as amended.

     

    3.           Exercise
Price.  The exercise price of the Option shall be $0.84 per
share, subject to adjustment as hereinafter provided.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    4.           Vesting and Exercisability.  Subject
to the terms and conditions of the Plan, and
provided that the Employee has remained continuously employed by the Company as
of each vesting date except as otherwise
provided herein, this Option shall vest and
become exercisable in three (3) annual
installments as follows: (i) 25,000 Option Shares on each of the
first and second anniversaries of the Grant
Date and (ii) 50,000 Option Shares on the
third anniversary of the Grant
Date.  After a portion of the Option becomes exercisable, it shall
remain exercisable except as otherwise provided herein, until the close of
business on the day immediately preceding the tenth anniversary of the Grant
Date (the “Exercise Period”).

     

    5.    
      Effect of Termination of
Employment.

     

    5.1           Termination Due to
Death.  If Employee’s employment by the Company terminates by
reason of death, the portion of the Option, if any, that was exercisable as of
the date of death may thereafter be exercised by the Employee’s designated beneficiary (or, if no
beneficiary is designated, by the legal representative of the estate or
by the legatee of the Employee under the will of the Employee) for a period of one (1) year from the date of
such death or until the expiration of the Exercise Period, whichever period is
shorter.  The portion of the Option, if any, which was not exercisable
as of the date of death shall immediately expire upon death.

     

    5.2           Termination Due to
Disability.  If Employee’s employment by the Company terminates
by reason of “Disability” (as such term is defined in the Employment Agreement,
dated as of June 1, 2010, between the Company and Employee, or any successor
agreement (“Employment Agreement”)), the portion of the Option, if any, that was
exercisable as of the date of termination of employment may thereafter be
exercised by Employee for a period of one (1) year from the date of termination
of employment or until the expiration of the Exercise Period, whichever period
is shorter.  The portion of the Option, if any, which was not
exercisable as of the date of such termination of employment shall immediately
expire on the date of such termination of employment.

     

    5.3           Termination for
Cause.  If Employee’s employment by the Company is terminated
for “Cause” (as such term is defined in the Employment Agreement), (i) this
Option, whether or not exercisable, shall immediately expire and (ii) the
Company may require the Employee to pay to the Company the economic value of any
Option Shares purchased hereunder by the Employee within the six (6) month
period prior to the date of such termination of employment.  For this purpose, the term “economic value” means
the difference between the Fair Market Value of the Option Shares on the date of
such termination of employment (or the sales price of such shares if the Option
Shares were sold during such six (6) month period) and the Exercise Price of
such shares.  In such event, the Employee hereby agrees to remit to
the Company, in cash, by no later than thirty (30)
days after the date of termination or the date established under the Employment
Agreement for curing any conduct amounting to Cause has expired,
whichever is later, an amount equal to the economic value as defined
above.


    
      
         


      

      
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    5.4           Termination by the Company
Without Cause or by Employee for Good Reason.  If Employee’s
employment is terminated by the Company without “Cause” (as such term is defined
in the Employment Agreement) or by Employee for “Good Reason” (as such term is
defined in the Employment Agreement), then the portion of the Option which is
exercisable on the date of termination of employment and any additional portion
of the Option which would have otherwise vested on or prior to June 1, 2013 if
employment had continued through that date shall continue to vest as scheduled
and shall continue to be exercisable thereafter, absent the death of Employee
(in which case the Option shall be exercisable by the Employee’s personal
representative or heirs, as the case may be, within one year after the date of
death of the Employee), until the expiration of the Exercise
Period.

     

    5.5           Other
Termination.  If Employee’s employment is terminated for any
reason other than (i) death, (ii) Disability, (iii) for Cause, (iv) without
Cause by the Company or (v) by the Employee for Good Reason (a) prior to June 1,
2013, then the portion of the Option, if any, that was exercisable as of the
date of termination of employment may thereafter be exercised by the Employee
for a period of ninety (90) days from the date of termination of employment, and any remaining unvested portion of the Option shall
expire on the date of termination or (b) on or after June 1, 2013, then
the portion of the Option that was exercisable as of the date of termination of
employment may thereafter be exercised by the Employee until the expiration of
the Exercise Period, and any remaining unvested portion of the Option shall
expire on the date of termination.

     

    6.           Withholding
Tax.  Not later than the date as of which an amount first
becomes includible in the gross income of the Employee for Federal income tax
purposes with respect to the Option, the Employee shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount (“Withholding Tax”).  The obligations
of the Company under the Plan and pursuant to this Agreement shall be
conditional upon such payment or arrangements with the Company and the Company
shall, to the extent permitted by law, have the right to deduct any Withholding
Taxes from any payment of any kind otherwise due to the Employee from the
Company.


    
      
         


      

      
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    7.           Adjustments.

     

    7.1           In
the event of a stock split, stock dividend, combination of shares, or any other
similar change in the Common Stock of the Company as a whole, the Board of
Directors of the Company shall make equitable, proportionate adjustments in the
number and kind of shares covered by the Option and in the option price
hereunder.

     

    7.2           In
the event of any reclassification or reorganization of the outstanding shares of
Common Stock other than a change covered by Section 7.1 or that solely affects
the par value of such shares of Common Stock, or in the case of any merger or
consolidation of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
that does not result in any reclassification or reorganization of the
outstanding shares of Common Stock), the Employee shall have the right
thereafter (until the expiration of the right of exercise of this Option) to
receive upon the exercise hereof after such event, for the same aggregate
Exercise Price payable hereunder immediately prior to such reclassification,
reorganization, merger or consolidation, the amount and kind of consideration
receivable by a holder of the number of shares of Common Stock of the Company
obtainable upon exercise of this Option immediately prior to such
event.  The provisions of this Section 7.2 shall similarly apply to
successive reclassifications, reorganizations, mergers or consolidations, sales
or other transfers.

     

    8.           Method of
Exercise.

     

    8.1           Notice to the
Company.  The Option shall be exercised in whole or in part by
written notice in substantially the form attached hereto as Exhibit A directed
to the Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.

     

    8.2           Delivery of Option
Shares.  The Company shall deliver a certificate for the Option
Shares to the Employee as soon as practicable after payment
therefor.


    
      
         


      

      
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    8.3           Payment of Purchase
Price.  The Employee shall make cash payments by certified or
bank check, in each case payable to the order of the Company; the Company shall
not be required to deliver certificates for Option Shares until the Company has
confirmed the receipt of good and available funds in payment of the purchase
price thereof and of the Withholding Taxes, if any.

     

    9.           Nonassignability.  The
Option shall not be assignable or transferable except by will or by the laws of
descent and distribution in the event of the death of the
Employee.  No transfer of the Option by the Employee by will or by the
laws of descent and distribution shall be effective to bind the Company unless
the Company shall have been furnished with written notice thereof and a copy of
the will and such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions of the Option.

     

    10.         Company
Representations.  The Company hereby represents and warrants to
the Employee that:

     

    (i)          
 the Company, by appropriate and all required action, is duly authorized to
enter into this Agreement and consummate all of the transactions contemplated
hereunder; and

     

    (ii)           the
Option Shares, when issued and delivered by the Company to the Employee in
accordance with the terms and conditions hereof, will be duly and validly issued
and fully paid and non-assessable.

     

    11.         Employee
Representations.  The Employee hereby represents and warrants
to the Company that:

     

    (i)         
  he is acquiring the Option and shall acquire the Option Shares for
his own account and not with a view towards the distribution
thereof;

     

    (ii)           he
has received a copy of all reports and documents required to be filed by the
Company with the Commission pursuant to the Exchange Act within the last 24
months and all reports issued by the Company to its stockholders;

     

    (iii)          he
understands that he must bear the economic risk of the investment in the Option
Shares, which cannot be sold by him unless they are registered under the
Securities Act of 1933 (the “1933 Act”) or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;


    
      
         


      

      
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    (iv)         he
has had both the opportunity to ask questions and receive answers from the
officers and directors of the Company and all persons acting on its behalf
concerning the terms and conditions of the offer made hereunder and to obtain
any additional information to the extent the Company possesses or may possess
such information or can acquire it without unreasonable effort or expense
necessary to verify the accuracy of the information obtained pursuant to clause
(ii) above;

     

    (v)           he
is aware that the Company shall place stop transfer orders with its transfer
agent against the transfer of the Option Shares in the absence of registration
under the 1933 Act or an exemption therefrom as provided herein;
and

     

    (vi)          in
the absence of an effective registration statement under the 1933 Act, the
certificates evidencing the Option Shares shall bear the following
legend:

     

    “The
shares represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933.  The shares
may not be sold or transferred in the absence of such registration or an
exemption therefrom under said Act.”

     

    12.         Restriction on Transfer of
Option Shares.  Anything in this Agreement to the contrary
notwithstanding, the Employee hereby agrees that he shall not sell, transfer by
any means or otherwise dispose of the Option Shares acquired by the Employee
without registration under the 1933 Act, or in the event that they are not so
registered, unless (i) an exemption from the 1933 Act registration requirements
is available thereunder, and (ii) the Employee has furnished the Company with
notice of such proposed transfer and the Company’s legal counsel, in its
reasonable opinion, shall deem such proposed transfer to be so
exempt.

     

    13.         Miscellaneous.

     

    13.1         Notices.  All
notices, requests, deliveries, payments, demands and other communications which
are required or permitted to be given under this Agreement shall be in writing
and shall be either delivered personally or sent by registered or certified
mail, or by private courier, return receipt requested, postage prepaid to the
parties at their respective addresses set forth herein, or to such other address
as either shall have specified by notice in writing to the
other.  Notice shall be deemed duly given hereunder when delivered or
mailed as provided herein.


    
      
         


      

      
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    13.2         Plan Paramount; Conflicts
with Plan.  This Agreement and the Option shall, in all
respects, be subject to the terms and conditions of the Plan, whether or not
stated herein.  In the event of a conflict between the provisions of
the Plan and the provisions of this Agreement, the provisions of the Plan shall
in all respects be controlling.

     

    13.3         Shareholder
Rights.  The Employee shall not have any of the rights of a
shareholder with respect to the Option Shares until such shares have been issued
after the due exercise of the Option.

     

    13.4         Waiver.  The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other or subsequent
breach.

     

    13.5         Entire
Agreement.  This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof.  This
Agreement may not be amended except by writing executed by the Employee and the
Company.

     

    13.6         Binding Effect;
Successors.  This Agreement shall inure to the benefit of and
be binding upon the parties hereto and, to the extent not prohibited herein,
their respective heirs, successors, assigns and
representatives.  Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto and as provided
above, their respective heirs, successors, assigns and representatives any
rights, remedies, obligations or liabilities.

     

    13.7         Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to choice of
law provisions.

     

    13.8         Headings.  The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any of
the terms or provisions of this Agreement.


    
      
         


      

      
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    13.9         Section
409A.  The Option granted hereunder is intended to be exempt
from the provisions of Section 409A of the Internal Revenue Code of 1986, as
amended (“Section 409A ”).  To the extent that the Options or any
payments or benefits provided hereunder are considered deferred compensation
subject to Section 409A, the Company intends for this Agreement and the Option
to comply with the standards for nonqualified deferred compensation established
by Section 409A (the “409A Standards”).  Notwithstanding anything
herein to the contrary, to the extent that any terms of this Agreement or the
Option would subject the Employee to gross income inclusion, interest or an
additional tax pursuant to Section 409A, those terms are to that extent
superseded by the 409A Standards.  The Company reserves the right to
amend the Option granted hereunder to cause such Option to comply with or be
exempt from Section 409A.


    
      
         


      

      
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    IN
WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and
year first above written.

     

    
      
        	
                EMPLOYEE:

              	 	
                FREDERICK’S
      OF HOLLYWOOD GROUP INC.

              
	 
      	 	 
      
	
                /s/ Thomas Rende

              	 	
                By:

              	
                /s/ Thomas J. Lynch

              
	
                Name:  Thomas
      Rende

              	 	
                Name:

              	
                Thomas
      J. Lynch

              
	 
      	 	
                Title

              	
                Chief
      Executive Officer

              
	
                Address:

              	 	 
      
	
                  

              	 	 
      
	
                  

              	 	 
      


      

    


    
      
         


      

      
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    EXHIBIT
A

    


    FORM
OF NOTICE OF EXERCISE OF OPTION

    


    
      
        	
                   

              	 
      	 
      
	
                DATE

              	 
      	 
      


      

    

    


    Frederick’s
of Hollywood Group Inc.

    1115
Broadway

    11th
Floor

    New York,
New York  10010

    


    Attention:  The
Board of Directors

    


    Re:           Purchase of Option
Shares

    


    Gentlemen:

    


    In
accordance with my Stock Option Agreement dated as of June 1, 2010 (“Agreement”)
with Frederick’s of Hollywood Group Inc. (the “Company”), I hereby irrevocably
elect to exercise the right to purchase _________ shares of the Company’s common
stock, par value $.01 per share (“Common Stock”), which are being purchased for
investment and not for resale.

    


    As
payment for my shares, enclosed is a certified or bank check payable to
Frederick’s of Hollywood Group Inc. in the sum of $ .

    


    I hereby
represent, warrant to, and agree with, the Company that

    


    (i)           I
acquired the Option and shall acquire the Option Shares for my own account and
not with a view towards the distribution thereof;

    


    (ii)         
I have received a copy of all reports and documents required to be filed by the
Company with the Commission pursuant to the Exchange Act within the last 24
months and all reports issued by the Company to its stockholders;

    


    (iii)         I
understand that I must bear the economic risk of the investment in the Option
Shares, which cannot be sold by me unless they are registered under the
Securities Act of 1933 (the “1933 Act”) or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;

     

    (iv)   
     I have had both the opportunity to ask questions
and receive answers from the officers and directors of the Company and all
persons acting on its behalf concerning the terms and conditions of the offer
made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;

    


    (v)   
      I am aware that the Company shall place stop
transfer orders with its transfer agent against the transfer of the Option
Shares in the absence of registration under the 1933 Act or an exemption
therefrom as provided herein;


    
      
         


      

      
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    (vi)  
      my rights with respect to the Option Shares
shall, in all respects, be subject to the terms and conditions of this Company’s
Amended and Restated 1988 Stock Option Plan and this Agreement; and

    


    (vii) 
      in the absence of an effective registration
statement under the 1933 Act, the certificates evidencing the Option Shares
shall bear the following legend:

    


    “The
shares represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933.  The shares
may not be sold or transferred in the absence of such registration or an
exemption therefrom under said Act.”

    


    Kindly
forward to me my certificate at your earliest convenience.

    


    Very
truly yours,

    


    
      
        
          
            
              
                
                  
                    	
                              

                          	 	
                              

                          	 
	
                            (Signature)

                          	 	
                            (Address)

                          	 
	
                              

                          	 	
                              

                          	 
	
                            (Print
      Name)

                          	 	
                            (Address)

                          	 
	 
      	 	 
      	 
	 
      	 	
                              

                          	 
	 
      	 	
                            (Social
      Security Number)

                          	 


                  

                

              

            

          

        

      

    

     

    
      
         


      

      
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