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                                  BLUEFLY, INC.
                             2000 STOCK OPTION PLAN

SECTION 1. PURPOSE

         The purposes of this Bluefly, Inc. 2000 Stock Option Plan (the "Plan")
are to encourage selected employees and consultants of Bluefly, Inc. (together
with any successor thereto, the "Company" ) and its Affiliates (as defined
below) to acquire a proprietary interest in the growth and performance of the
Company, to generate an increased incentive to contribute to the Company's
future success and prosperity, thus enhancing the value of the Company for the
benefit of its shareholders, and to enhance the ability of the Company and its
Affiliates to attract and retain qualified individuals upon whom, in large
measure, the sustained progress, growth, and profitability of the Company
depend.

SECTION 2. DEFINITIONS

         As used in the Plan, the following terms shall have the meanings set
forth below:

         (a) "Affiliate" shall mean any entity that, directly or through one or
more intermediaries, is controlled by, controls or is under common control with
the Company.

         (b) "Board" shall mean the Board of Directors of the Company.

         (c) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

         (d) "Committee" shall mean a committee of the Board designated by the
Board to administer the Plan and composed of not less than two directors.

         (e) "Consultant" shall mean any Person who contracts to provide
services to the Company as an independent contractor.

         (f) "Fair Market Value" shall mean, with respect to Shares or other
securities (i) the closing price per Share of the Shares on the principal
exchange on which the Shares are then trading, if any, on such date, or, if the
Shares were not traded on such date, then on the next preceding trading day
during which a sale occurred; or (ii) if the Shares are not traded on an
exchange but are quoted on NASDAQ or a successor quotation system, (1) the last
sales price (if the Shares are then listed as a National Market Issue under the
NASDAQ National Market System) or (2) the mean between the closing
representative bid and asked prices (in all other cases) for the Shares on such
date as reported by NASDAQ or such successor quotation system; or (iii) if the
Shares are not publicly traded on an exchange and not quoted on NASDAQ or a
successor quotation system, the mean between the closing bid and asked prices
for the Shares on


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such date as determined in good faith by the Committee; or (iv) if the
provisions of clauses (i), (ii) and (iii) shall not be applicable, the fair
market value established by the Committee acting in good faith.

         (g) "Key Employee" shall mean any regular full-time employee of the
Company or its present and future Affiliates (other than any employee who is an
officer or director of the Company or its present and future Affiliates).

         (h) "Incentive Stock Option" shall mean, if this Plan is approved by
the stockholders of the Company within 12 months after this Plan is adopted,
each Option granted to a Key Employee if and to the extent such Option qualifies
as an "inventive stock option" within the meaning of Section 422 of the Code.

         (i) "Option" shall mean an option granted under Section 6 of the Plan.

         (j) "Option Agreement" shall mean a written agreement, contract, or
other instrument or document evidencing an Option granted under the Plan.

         (k) "Participant" shall mean a Key Employee or Consultant who has been
granted an Option under the Plan.

         (l) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.

         (m) "Shares" shall mean the common stock of the Company, $.01 par
value, and such other securities or property as may become the subject of
Options pursuant to an adjustment made under Section 4(b) of the Plan.

SECTION 3.        ADMINISTRATION

         (a) Generally. The Plan shall be administered by the Committee. Unless
otherwise expressly provided in the Plan, all designations, determinations,
interpretations and other decisions under or with respect to the Plan or any
Option shall be within the sole discretion of the Committee, may be made at any
time, and shall be final, conclusive, and binding upon all Persons, including
the Company, any Affiliate, any Participant, any holder or beneficiary of any
Option, any shareholder of the Company or any Affiliate, and any employee of the
Company or of any Affiliate.

         (b) Powers. Subject to the terms of the Plan and applicable law, the
Committee shall have full power and authority in its discretion to: (i)
designate Participants; (ii) determine the number of Shares to be covered by
Options; (iii) determine the terms and conditions of any Option; (iv) determine
whether, to what extent, and under what circumstances Options may be settled or
exercised in cash, Shares, other Options, or other property, or canceled,
forfeited, or


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suspended, and the method or methods by which Options may be settled, exercised,
canceled, forfeited, or suspended; (v) interpret and administer the Plan and any
instruments or agreements relating to, or Options granted under, the Plan; (vi)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (vii) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.

         (c) Reliance, Indemnification. The Committee may employ attorneys,
consultants, accountants or other persons and the Committee, the Company and its
officers and directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. No member of the Committee shall be personally
liable for any action, determination or interpretation taken or made in good
faith with respect to the Plan, or Options granted thereunder and all members of
the Committee shall be fully indemnified and protected by the Company in respect
of any such action, determination or interpretation.

SECTION 4. SHARES AVAILABLE FOR OPTIONS

         (a) Shares Available. Subject to adjustment as provided in Section
4(b):

                  (i) Limitation on Number of Shares. Options issuable under the
         Plan are limited such that the maximum aggregate number of Shares which
         may issued pursuant to, or by reason of, Options is 500,000. Further,
         no Participant shall be granted in any one fiscal year Options to
         purchase more than 100,000 Shares. To the extent that an Option granted
         to a Key Employee or Consultant ceases to remain outstanding by reason
         of termination of rights granted thereunder, forfeiture or otherwise,
         the Shares subject to such Option shall again become available for
         award under the Plan to Key Employees and Consultants; provided,
         however, that in the case of the cancellation or termination of an
         Option in the same fiscal year that such Option was granted, both the
         cancelled Option and the newly granted Option shall be counted in
         determining whether the recipient has received the maximum number of
         such Options under the Plan for such fiscal year.

                  (ii) Accounting for Awards. For purposes of this Section 4,
         the number of Shares covered by an Option to a Key Employee or
         Consultant shall be counted on the date of grant of such Option against
         the aggregate number of Shares available for granting Options under the
         Plan to Key Employees and Consultants.

                  (iii) Sources of Shares Deliverable Under Options. Any Shares
         delivered pursuant to an Option may consist, in whole or in part, of
         authorized and unissued Shares or of treasury Shares.

         (b) Adjustments. In the event that the Committee shall determine that
any (i) subdivision or consolidation of Shares, (ii) dividend or other
distribution (in the form of Shares), (iii) recapitalization or other capital
adjustment of the Company or (iv) merger, consolidation or other reorganization
of the Company or other rights to purchase Shares or other securities of the


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Company, or other similar corporate transaction or event, affects the Shares
such that an adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in such
manner as it may deem necessary to prevent dilution or enlargement of the
benefits or potential benefits intended to be made under the Plan, adjust any or
all of (x) the number and type of Shares which thereafter may be made the
subject of Options, (y) the number and type of Shares subject to outstanding
Options, and (z) the grant, purchase, or exercise price with respect to an
Option or, if deemed appropriate, make provision for a cash payment to the
holder of an outstanding Option, provided, however, in each case, that the
number of Shares subject to any Option denominated in Shares shall always be a
whole number.

SECTION 5. ELIGIBILITY

         Options may be granted only to Key Employees and Consultants; provided,
however, that Incentive Stock Options may be granted only to Key Employees of
the Company and those Affiliates which are a "subsidiary corporation" of the
Company (within the meaning of Section 424(f) of the Code). In determining the
Persons to whom Options shall be granted and the number of Shares to be covered
by each Option, the Committee shall take into account the nature of the Person's
duties, such Person's present and potential contributions to the success of the
Company and such other factors as it shall deem relevant in connection with
accomplishing the purposes of the Plan. A Key Employee or Consultant who has
been granted an Option or Options under the Plan may be granted an additional
Option or Options.

SECTION 6. OPTION

         The Committee is hereby authorized to grant Options to Participants
upon the following terms and the conditions and with such additional terms and
conditions, in either case not inconsistent with the provisions of the Plan, as
the Committee shall determine:

                  (a) Exercise Price. The purchase price per Share purchasable
         under Options shall be the price determined by the Committee.

                  (b) Option Term. The term of each Option shall be fixed by the
         Committee.

                  (c) Time and Method of Exercise. The Committee shall determine
         the time or times at which an Option may be exercised in whole or in
         part, and the method or methods by which, and the form or forms in
         which, payment of the option price with respect thereto may be made or
         deemed to have been made (including, without limitation, (i) cash,
         Shares, outstanding Options or other consideration, or any combination
         thereof, having a Fair Market Value on the exercise date equal to the
         relevant option price and (ii) a broker-assisted cashless exercise
         program established by the Committee). The payment of the exercise
         price of an Option may be made in a single payment or transfer, in
         installments, or on a deferred basis, in each case in accordance with
         rules and procedures established by the Committee.



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                  (d) Early Termination. The unexercised portion of any Option
         granted to a Key Employee under the Plan will generally be terminated,
         unless otherwise determined by the Committee, (i) thirty (30) days
         after the date on which the Key Employee's employment is terminated for
         any reason other than (A) Cause (as defined below), (B) retirement or
         mental or physical disability, or (C) death; (ii) immediately upon the
         termination of the Key Employee's employment for Cause; (iii) three
         months after the date on which the Key Employee's employment is
         terminated by reason of retirement or mental or physical disability; or
         (iv)(A) 12 months after the date on which the Key Employee's employment
         is terminated by reason of the death of the Key Employee, or (B) three
         months after the date on which the Key Employee shall die if such death
         shall occur during the three-month period following the termination of
         the Key Employee's employment by reason of retirement or mental or
         physical disability. The term "Cause," as used herein, shall mean (w)
         the Key Employee's willful misconduct or fraud in the performance of
         his duties under such Key Employee's employment arrangement with the
         Company, (x) the continued failure or refusal of the Key Employee
         (following written notice thereof) to carry out any reasonable request
         of the Company for the provision of services under such Key Employee's
         employment arrangement with the Company, (y) the material breach by the
         Key Employee of his employment arrangement with the Company or (z) the
         entering of a plea of guilty or nolo contendere to or the conviction of
         the Key Employee for a felony or any other criminal act involving moral
         turpitude, dishonesty, theft or unethical business conduct.

                  (e) No Cash Consideration for Awards. Awards shall be granted
         for no cash consideration or such minimal cash consideration as may be
         required by applicable law.

                  (f) Limits on Transfer of Options. No Option and no right
         under any such Option, shall be assignable, alienable, saleable, or
         transferable by a Participant otherwise than by will or by the laws of
         descent and distribution. Each Option, and each right under any such
         Option, shall be exercisable during the Participant's lifetime, only by
         the Participant or, if permissible under applicable law, by the
         Participant's guardian or legal representative. No Option and no right
         under any such Option, may be pledged, alienated, attached, or
         otherwise encumbered, and any purported pledge, alienation, attachment,
         or encumbrance thereof shall be void and unenforceable against the
         Company or any Affiliate.

                  (g) Share Certificates. All certificates for Shares or other
         securities of the Company delivered under the Plan pursuant to any
         Option or the exercise thereof shall be subject to such stop transfer
         orders and other restrictions as the Committee may deem advisable under
         the Plan or the rules, regulations, and other restrictions of the
         Securities and Exchange Commission, any stock exchange upon which such
         Shares or other securities are then listed, and any applicable Federal
         or state securities laws, and the Committee may cause a legend or
         legends to be put on any such certificates to make appropriate
         reference to such restrictions.


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                  (h) Any Option which is an Incentive Stock Option shall be
         subject to, and comply with the requirements of, Section 422 of the
         Code.

SECTION 7. AMENDMENT AND TERMINATION

         Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Option Agreement or in the Plan:

         (a) Amendments to the Plan. The Plan may be wholly or partially amended
or otherwise modified, suspended or terminated at any time or from time to time
by the Board, but no amendment without the approval of the shareholders of the
Company shall be made if shareholder approval would be required under any law or
rule of any governmental authority, stock exchange or other self-regulatory
organization to which the Company is subject. Neither the amendment, suspension
or termination of the Plan shall, without the consent of the holder of such
Option, alter or impair any rights or obligations under any Option theretofore
granted.

         (b) Adjustments of Options Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee shall be authorized to make adjustments in
the terms and conditions of, and the criteria included in, Options in
recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4(b) hereof) affecting the Company, any
Affiliate, or the financial statements of the Company or any Affiliate or of
changes in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
enlargement of the benefits or potential benefits to be made available under the
Plan.

         (c) Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Option in the manner and to the extent it shall
deem desirable to carry the Plan into effect.

SECTION 8. ELECTION TO HAVE SHARES WITHHELD

         (a) In combination with or in substitution for cash withholding or any
other legal method of satisfying federal and state withholding tax liability, a
Participant may elect to have Shares withheld by the Company or to have Shares
sold in a broker-assisted transaction in order to satisfy federal and state
withholding tax liability (a "share withholding election"), provided (i) the
Committee shall have adopted procedures providing for a withholding election;
and (ii) the share withholding election is made on or prior to the date on which
the amount of withholding tax liability is determined (the "Tax Date"). If the
Committee adopts procedures for broker-assisted transactions, a Participant
shall also be permitted to satisfy the exercise price of Options through
withholding of Shares rather than cash payments in the manner prescribed by the
Committee.



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         (b) A share withholding election shall be deemed made when written
notice of such election, signed by the Participant, has been hand delivered or
transmitted by registered or certified mail to the Secretary of the Company at
its then principal office. Delivery of said notice shall constitute an
irrevocable election to have Shares withheld.

         (c) If a Participant has made a share withholding election pursuant to
this Section 8, then on the Tax Date, such Participant will be unconditionally
obligated to tender back to the Company the number of Shares having an aggregate
fair market value (as determined in good faith by the Committee), equal to the
amount of tax required to be withheld plus cash for any fractional amount.

SECTION 9. GENERAL PROVISIONS

         (a) No Rights to Awards. No Key Employee or Consultant shall have any
claim to be granted any Option under the Plan, and there is no obligation for
uniformity of treatment of Key Employees or Consultants or holders or
beneficiaries of Options under the Plan. The terms and conditions of Options
need not be the same with respect to each recipient.

         (b) No Limit on Other Plans. Nothing contained in the Plan shall
prevent the Company or any Affiliate from adopting or continuing in effect other
or additional compensation arrangements and such arrangements may be either
generally applicable or applicable only in specific cases.

         (c) No Right to Employment. The grant of an Option shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment, free from any liability, or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Option
Agreement.

         (d) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of New York and applicable Federal law.

         (e) Severability. If any provision of the Plan or any Option is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction, or would disqualify the Plan or any Option under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be construed or deemed amended
without, in the determination of the Committee, materially altering the intent
of the Plan, such provision shall be deemed void, stricken and the remainder of
the Plan and any such Option shall remain in full force and effect.

         (f) No Trust or Fund Created. Neither the Plan nor any Option shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person


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acquires a right to receive payments from the Company or any Affiliate pursuant
to an Option, such right shall be no greater than the right of any unsecured
general creditor of the Company or any Affiliate.

         (g) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Option, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated, or otherwise eliminated.

         (h) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision hereof.

SECTION 10. EFFECTIVE DATE OF THE PLAN

         The Plan is effective as of July 1, 2000 (the "Effective Date").

SECTION 11. TERM OF THE PLAN

         The Plan shall continue until the earlier of (i) the date on which all
Options issuable hereunder have been issued, (ii) the termination of the Plan by
the Board or (iii) June 30, 2010. However, unless otherwise expressly provided
in the Plan or in an applicable Option Agreement, any Option theretofore granted
may extend beyond such date and the authority of the Committee to amend, alter,
adjust, suspend, discontinue, or terminate any such Option or to waive any
conditions or rights under any such Option, and the authority of the Board to
amend the Plan, shall extend beyond such date.





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