Exhibit (d)(2)
BLUEFLY, INC.
STOCK OPTION AGREEMENT
Agreement, made as of the __ day of ______, 2004, between Bluefly, Inc.
(the "Company"), a Delaware corporation, and _____________ (the "Optionee"),
residing at ____________________________________.
The Company has duly adopted the Bluefly, Inc. 1997 Stock Option Plan
(the "Plan"), the terms of which are hereby incorporated by reference. In the
case of any conflict between the provisions hereof and those of the Plan, the
provisions of the Plan shall be controlling. A copy of the Plan (as such may
have been amended to date) will be made available for inspection by the Optionee
during normal business hours at the principal office of the Company. All
capitalized terms used but not defined herein shall have the respective meanings
ascribed to them in the Plan.
In accordance with Section 3 of the Plan, a committee of the Board of
Directors of the Company which administers the Plan (the "Committee") has
adopted a resolution granting the Optionee a stock option (the "Option") under
the Plan to purchase ____________________________________ shares (the "Shares")
of the Company's common stock, par value $.01 per share (the "Common Stock"),
for the price and on the terms and conditions set forth in this Agreement and in
the Plan.
The Option [X] is [ ] is not intended to satisfy the requirements for
an incentive stock option under the Internal Revenue Code of 1986, as amended,
to the fullest extent permitted by law. The Company makes no representations or
warranties as to the income, estate or other tax consequences to the Optionee of
the grant of exercise of the Option or the sale or other disposition of the
Shares acquired pursuant to the exercise thereof.
1. (a) The price at which the Optionee shall have the right to
purchase the Shares under this Agreement is ______ per share, subject to
adjustment as provided in Paragraph 4 below.
(b) Unless the Option is previously terminated pursuant to
the Plan or this Agreement, and subject to the terms of any other agreement
between the Optionee and the Company (including, without limitation, any
employment or other agreement which may provide for, among other things, an
accelerated vesting schedule), the Option shall vest over a Forty-eight (48)
month period as follows: (i) 12.5% of the Option shall vest on the sixth month
anniversary of the date of grant and (ii) 2.0833% of the Option shall vest each
month thereafter until all such Option shall have vested; provided, however,
that all vesting shall cease upon Optionee's termination as an employee of the
Company. The term of each Option shall be 10 years from the date of grant. (the
"Expiration Date"). Except as provided in subparagraph (c) hereof, the Option
shall cease to be exercisable thirty (30) business days after the date the
Optionee terminates services as an employee of the Company or any affiliate of
the Company for reasons other than, retirement, disability or death, and all
rights of the Optionee hereunder shall thereupon terminate.
BLUEFLY STOCK OPTION AGREEMENT
(c) If the Optionee ceases to be an employee of the Company
or any affiliate of the Company and this cessation is due to retirement (as
defined by the Committee in its sole discretion), or to disability (as defined
in each case by the Committee in its sole discretion) or to death, the Option
shall be exercisable as provided in this subparagraph. The Optionee, or in the
event of the Optionee's disability, the Optionee's duly appointed guardian or
conservator, or in the event of the Optionee's death, the Optionee's executor or
administrator, shall have the privilege of exercising the unexercised portion of
the Option which the Optionee could have exercised on the day on which the
Optionee ceased to be an employee of the Company or any affiliate of the
Company, provided, however, that such exercise must be in accordance with the
terms of this Agreement and within (i) three (3) months after the Optionee's
retirement or disability or (ii) (A) twelve (12) months after the Optionee's
death or (B) three (3) months after the Optionee's death if such death occurs
during the three (3) month period following the termination of the Optionee's
employment by reason of retirement or mental or physical disability, as the case
may be. In no event, however, shall the Optionee or the Optionee's executor or
administrator, as the case may be, exercise the Option after the Expiration Date
specified in subparagraph 1(b). For all purposes of this Agreement, an approved
leave of absence shall not constitute an interruption or cessation of the
Optionee's service as an employee of the Company or any affiliate of the
Company.
2. Nothing contained herein shall be construed to confer on the
Optionee any right to continue as an employee of the Company or any affiliate of
the Company or to derogate from any right of the Company or any affiliate
thereof to retire, request the resignation thereof or discharge the Optionee, or
to layoff or require a leave of absence of the Optionee, with or without pay, at
any time, with or without cause.
3. The Option shall not be sold, pledged, assigned, or transferred
in any manner except to the extent that the Option may be exercised by an
executor or administrator as provided in subparagraph 1(c) above. The Option may
be exercised, during the lifetime of the Optionee, only by the Optionee, or in
the event of the Optionee's disability, the Optionee's duly appointed guardian
or conservator.
4. (a) If the outstanding shares of Common Stock are
affected by any (i) subdivision or consolidation of shares, (ii) dividend or
other distribution (whether in the form of cash, shares of Common Stock, other
securities, or other property), (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 of Common Stock or other
securities of the Company, or other similar corporate transaction or event, 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 subject to the unexercised portion of the Option,
and (y) the exercise price with respect to the unexercised portion of the
Option, or if deemed appropriate, make provision for a cash payment with respect
to the unexercised portion of the Option. In computing any adjustment under this
paragraph, any fractional share shall be eliminated.
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BLUEFLY STOCK OPTION AGREEMENT
(b) In the event of (i) a merger or consolidation to which
the Company is a party or (ii) a sale by the Company of all or substantially all
of its assets, the Option shall, after such merger, consolidation or sale
(unless provision has been made by the Committee for a cash payment as set forth
in Paragraph 4(a) above), be exercisable into the kind and number of shares of
stock and/or securities, cash or other property which the Optionee would have
been entitled to receive if the Optionee had held the Common Stock issuable upon
the exercise of the Option immediately prior to such consolidation, merger or
sale, with a corresponding adjustment in the Option Price as reasonably
determined by the Committee to be necessary and appropriate to neither increase
nor decrease the benefits of Optionee hereunder.
5. The Option shall be exercised when written notice of such
exercise, signed by the person entitled to exercise the Option, has been
delivered or transmitted by registered or certified mail, to the Secretary of
the Company at its principal office. Said written notice shall specify the
number of Shares purchasable under the Option which such person then wishes to
purchase and shall be accompanied by such documentation, if any, as may be
required by the Company as provided in Paragraph 7 below and be accompanied by
payment of the aggregate Option price. Such payment shall be in the form of (i)
cash or (ii) the sale of shares underlying options, through a customary
broker-assisted cashless exercise program in a form approved by the Committee
and which does not violate the provisions of Section 402 of the Sarbarnes-Oxley
Act of 2002. Delivery of said notice and such documentation shall constitute an
irrevocable election to purchase the Shares specified in said notice and the
date on which the Company receives said notice and documentation shall, subject
to the provisions of Paragraphs 6 and 7, be the date as of which the Shares so
purchased shall be deemed to have been issued. The person entitled to exercise
the Option shall not have the right or status as a holder of the Shares to which
such exercise relates prior to receipt by the Company of such payment, notice
and documentation.
6. Anything in this Agreement to the contrary notwithstanding, in
no event may the Option be exercisable if the Company shall, at any time and in
its sole and reasonable discretion, determine that (i) the listing, registration
or qualification of any shares otherwise deliverable upon such exercise, upon
any securities exchange or under any state or federal law, or (ii) the consent
or approval of any regulatory body or the satisfaction of withholding tax or
other withholding liabilities, is necessary or reasonably desirable in
connection with such exercise. In such event, such exercise shall be held in
abeyance and shall not be effective unless and until such withholding, listing,
registration, qualification, or approval shall have been effected or obtained
free of any condition which is reasonably unacceptable to the Company.
7. The Committee may require as a condition to the right to
exercise the Option hereunder that the Company receive from the person
exercising the Option, representations, warranties and agreements, at the time
of any such exercise, to the effect that the Shares are being purchased for
investment only and without any present intention
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BLUEFLY STOCK OPTION AGREEMENT
to sell or otherwise distribute such Shares and that the Shares will not be
disposed of in transactions which, in the opinion of counsel to the Company,
would violate the registration provisions of the Securities Act of 1933, as then
amended, and the rules and regulations there under. The certificate issued to
evidence such Shares shall bear appropriate legends summarizing such
restrictions on the disposition thereof.
8. If the Optionee sells or otherwise disposes of any of the Shares
acquired pursuant to the Option on or before the later of (1) the date two (2)
years after the Date of Grant, or (2) the date one (1) year after the date
exercise, the Optionee shall immediately notify the Company in writing of such
disposition. The Optionee agrees that the Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the Optionee
in the event of such a sale or dispostion.
9. This Agreement shall be construed and enforced in accordance
with the laws of the State of New York and applicable Federal law. Subject to
subparagraph 1(c) hereof, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors or assigns, as the case may be.
IN WITNESS WHEREOF, the parties have witnessed this Agreement to be
duly executed and delivered as of the date first above written.
BLUEFLY, INC.
By:
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[name] Name
Optionee Title:
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