SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

PAYNER MELISSA

(Last)

(First)

(Middle)

C/O BLUEFLY, INC.

42 WEST 39TH STREET,9TH FLOOR

(Street)

NEW YORK,

10018

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
BLUEFLY INC [ BFLY ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	10% Owner
X	Officer (give title below)	Other (specify below)
	Chief Executive Officer

3. Date of Earliest Transaction (Month/Day/Year)
11/13/2006

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	11/13/2006		A		591,256⁽¹⁾	A	⁽²⁾	591,256	D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Deferred Stock Units	$0	11/13/2006		A		126,904		⁽³⁾	⁽³⁾	Common Stock	126,904	⁽⁴⁾	126,904	D
Deferred Stock Units	$0	11/13/2006		A		4,201,832⁽⁵⁾		⁽⁶⁾	⁽⁶⁾	Common Stock	4,201,832	$0	4,201,832	D
Options	$1.56	11/13/2006		D		1,300,000		⁽⁷⁾	⁽⁷⁾	Common Stock	1,300,000	⁽⁷⁾	0	D
Options	$2.08	11/13/2006		D		500,000		⁽⁷⁾	⁽⁷⁾	Common Stock	500,000	⁽⁷⁾	0	D
Options	$2.49	11/13/2006		D		100,000		⁽⁷⁾	⁽⁷⁾	Common Stock	100,000	⁽⁷⁾	0	D

Explanation of Responses:

1. Represents 591,256 shares of restricted stock, which vest in full on January 1, 2007.

2. Restricted stock granted to the reporting person in exchange for the reporting person forfeiting her right to certain fully vested options that would have been exercisable to purchase an aggregate of 1,665,220 shares of common stock.

3. The deferred stock units vest in eight equal quarterly installments commencing on October 1, 2006. There is no expiration date.

4. Deferred stock units granted to the reporting person in exchange for the reporting person forfeiting her right to certain unvested options that would have been exerciable to purchase an aggregate of 234,780 shares of common stock.

5. The grant of the deferred stock units is subject to shareholder approval of certain amendments to the Company's 2005 Stock Incentive Plan.

6. The deferred stock units vest as follows: (i) one-third vest in four equal quarterly installments commencing on October 1, 2006, (ii) one-third vest in eight equal quarterly installments commencing on October 1, 2006 and (iii) one-third vest in twelve equal quarterly installments commencing on October 1, 2006. There is no expiration date.

7. Disposed of pursuant to the reporting person's forfeiture of options as described in footnotes 2 and 4.

	/s/ Melissa Payner-Gregor	11/15/2006
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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