<SUBMISSION>
<ACCESSION-NUMBER>0000950134-07-014480
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20070625
<ITEMS>5.02
<ITEMS>9.01
<FILING-DATE>20070629
<DATE-OF-FILING-DATE-CHANGE>20070629
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BLUE NILE INC
<CIK>0001091171
<ASSIGNED-SIC>5944
<IRS-NUMBER>911963165
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-50763
<FILM-NUMBER>07951845
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>705 FIFTH AVE S
<STREET2>STE 900
<CITY>SEATTLE
<STATE>WA
<ZIP>98104
<PHONE>2063366700
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>705 FIFTH AVE S
<STREET2>STE 900
<CITY>SEATTLE
<STATE>WA
<ZIP>98104
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>INTERNET DIAMONDS INC
<DATE-CHANGED>20000131
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v31586e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e8vk</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>CURRENT REPORT<BR>
PURSUANT TO SECTION 13 OR 15(d) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>June&nbsp;25, 2007<BR>
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>BLUE NILE, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">DELAWARE
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">000-50763
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">91-1963165</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(STATE OR OTHER JURISDICTION <BR>
OF INCORPORATION)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(COMMISSION FILE<BR>
NUMBER)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. EMPLOYER<BR>
IDENTIFICATION NO.)</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">705 FIFTH AVENUE SOUTH, SUITE 900, SEATTLE, WASHINGTON, 98104<BR>
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">(206)&nbsp;336-6700<BR>
REGISTRANT&#146;S TELEPHONE NUMBER, INCLUDING AREA CODE

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">N/A<BR>
(FORMER NAME OR FORMER ADDRESS IF CHANGED SINCE LAST REPORT)

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))</TD>
</TR>

</TABLE>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<!-- link2 "ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS." -->

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF
CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Appointment of Principal Financial Officer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On June&nbsp;29, 2007, Blue Nile, Inc. (&#147;Blue Nile&#148;) announced that Scott Devitt, age 34, was named Blue
Nile&#146;s Chief Financial Officer effective upon his commencement of employment with Blue Nile, which
is expected to begin on July&nbsp;23, 2007. A copy of our press release naming Mr.&nbsp;Devitt to the
position of Chief Financial Officer is attached hereto as Exhibit&nbsp;99.1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Devitt joins Blue Nile from Stifel Nicolaus &#038; Company, a brokerage and investment banking
company, where he has been since September&nbsp;2004 (including the period from September&nbsp;2004 to
December&nbsp;2005 with predecessor firm Legg Mason, Inc.) most recently as a managing director and
senior analyst. From January&nbsp;2003 to September&nbsp;2004, Mr.&nbsp;Devitt served as vice president of
operations and portfolio management of Sleiman Enterprises, a private shopping center developer.
From June&nbsp;2000 to December&nbsp;2002, Mr.&nbsp;Devitt worked as an associate equity analyst at Legg Mason,
Inc., an investment banking company. From July&nbsp;1997 to March&nbsp;2000, Mr.&nbsp;Devitt served in various
roles at Dell, Inc., a computer systems manufacturer and services provider, most recently as a
finance consultant. Mr.&nbsp;Devitt holds a B.A. in finance from the University of North Florida and an
M.B.A. in corporate finance from the University of Georgia.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to Mr.&nbsp;Devitt&#146;s offer letter, Mr.&nbsp;Devitt will receive an annual base salary of $200,000
and is eligible to receive a pro-rated target annual incentive bonus of $100,000 for fiscal year
2007. This award can range from 0% to 200% of the target depending upon on Blue Nile&#146;s performance
and Mr.&nbsp;Devitt&#146;s individual performance against key objectives. Mr.&nbsp;Devitt will also receive a
sign-on bonus of $200,000, with 50% of his sign-on bonus earned and paid at the start of his
employment and 50% earned on Mr.&nbsp;Devitt&#146;s one year anniversary with Blue Nile. The Company has not
yet determined the individual performance objectives applicable to Mr.&nbsp;Devitt&#146;s bonus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Devitt will be granted an option to purchase 45,000 shares of Blue Nile&#146;s common stock on his
start date. The exercise price of his option will be the closing sales price as quoted on the
NASDAQ Stock Market LLC on the last market trading day prior to his start date. His options will
vest over 4&nbsp;years, with one eighth (1/8) of the shares subject to the option vesting on the six
month anniversary of his start date and one forty-eighth (1/48) of the shares subject to the option
vesting each month thereafter. Additionally, Mr.&nbsp;Devitt will be granted 6,500 restricted stock
units. One fourth (1/4) of the restricted stock units will vest on each anniversary of his start
date as long as he is employed with Blue Nile. Mr.&nbsp;Devitt&#146;s stock option grant and his grant of
restricted stock units will be issued under our 2004 Equity Incentive Plan (the &#147;Plan) and will be
subject to the terms and conditions of such Plan and the award agreements associated with such
grants. The Plan was previously filed with the Securities and Exchange Commission as an Exhibit to
Blue Nile&#146;s Form S-1 Registration Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Devitt will be reimbursed for his reasonable relocation expenses. Additionally, Mr.&nbsp;Devitt
will be eligible to participate in our standard benefits package, including medical and dental
plans, life insurance and disability coverage, as well as our 401(k) Retirement Savings Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The summary of the material terms of the offer letter set forth above is qualified in its entirety
by reference to the offer letter, a copy of which is attached hereto as Exhibit&nbsp;10.1 and
incorporated herein by reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Blue Nile will enter into an indemnity agreement with Mr.&nbsp;Devitt. This indemnity agreement will
provide, among other things, that Blue Nile will indemnify Mr.&nbsp;Devitt, under the circumstances and
to the extent provided for in the agreement, for expenses, witness fees, damages, judgments, fines
and amounts paid in settlement and any other amount he may be required to pay because of any
claims made against him or by him in connection with any action, suit or proceeding which he is or
may be made a party to by reason of his position as an officer or other agent of Blue Nile, and
otherwise to the full extent permitted under Delaware law and our bylaws. A form of indemnity
agreement was previously filed with the Securities and Exchange Commission as an Exhibit to Blue
Nile&#146;s Form S-1 Registration Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Resignation of Principal Financial Officer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Effective as of Mr.&nbsp;Devitt&#146;s start date, Diane Irvine, Blue Nile&#146;s President and Chief Financial
Officer, will resign her position as Chief Financial Officer. Ms.&nbsp;Irvine will continue in her role
as Blue Nile&#146;s President.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Executive Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As previously disclosed on a Form 8-K filed on February&nbsp;12, 2007, Diane Irvine, Blue Nile&#146;s Chief
Financial Officer, was promoted to President effective February&nbsp;6, 2007. On June&nbsp;25, 2007, the
Compensation Committee approved an increase in Ms.&nbsp;Irvine&#146;s compensation to reflect her change in
position, duties and responsibilities. The Compensation Committee approved an increase in Ms.
Irvine&#146;s base salary from $310,000 to $340,000 and an increase in her annual target bonus award from
$186,000 to $238,000. On June&nbsp;25, 2007, the Compensation Committee also approved an increase in
Senior Vice President Darrell Cavens&#146; compensation to reflect an increase in his duties and
responsibilities. The Committee approved an increase in his base salary from $200,000 to $240,000
and an increase in his annual target bonus award from $70,000 to $84,000. These changes will be
retroactively implemented as of February&nbsp;6, 2007.
</DIV>
<!-- link2 "ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>EXHIBIT</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>NUMBER</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>DESCRIPTION</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Offer Letter between Blue Nile, Inc. and Scott Devitt</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restricted Stock Unit Award Agreement and Form of Notice</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Press Release dated June&nbsp;29, 2007 Announcing Scott Devitt as the New Chief Financial Officer</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SIGNATURE" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">BLUE NILE, INC.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By: /s/ Diane M. Irvine</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Diane M. Irvine</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Accounting and Financial Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated: June&nbsp;29, 2007
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>v31586exv10w1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.1
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">June&nbsp;26, 2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Scott Devitt<BR>
13582 Wyecrosse Court<BR>
Bristow, VA 20136

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Scott,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On behalf of Blue Nile, Inc. (the &#147;<B><I>Company</I></B>&#148;), I am pleased to offer you the position of Chief
Financial Officer, reporting to Diane Irvine. The terms of your relationship with the Company will
be as indicated herein.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Position</U>. You will become the Chief Financial Officer for the Company. As
such, you will have responsibilities as determined by the President. The Company may
change your position, duties, and reporting relationship from time to time in its
discretion.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Base Salary</U>. You will be paid a monthly salary of $16,667 less payroll
deductions and all required withholdings which represents an annualized rate of $200,000.
Your wage will be payable in accordance with the Company&#146;s standard payroll policies. The
Company may modify your compensation from time to time in its discretion.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Performance Bonus</U>. You will be eligible to earn an annual performance bonus
with a target payout of $100,000. The target will be pro rated for fiscal year 2007 based
on your start date. Your performance bonus can range from 0% to 200% of target based on the
performance of the Company and your individual performance against key objectives.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Signing Bonus</U>. You will be paid a signing bonus of $200,000, with 50% earned
and paid upon your date of employment and 50% paid on your one year anniversary with the
Company subject to your continued employment at that time.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Stock Options</U>. We will recommend to the Board of Directors or Subcommittee
thereof, that you be granted a non statutory stock option to purchase 45,000 shares of
common stock of the Company. The exercise price will be the closing sales price (or the
closing bid, if no sales were reported) as quoted on the NASDAQ Stock Market LLC on the
last market trading day prior to the date of grant. One eighth (1/8) of the shares subject
to such option will vest on the six month anniversary of your hire date and one
forty-eighth (1/48) of the shares subject to such option will vest each month thereafter as
long as your employment continues with the Company. The Company&#146;s 2004 Equity Incentive
Plan, the Grant Notice and the Stock Option Agreement shall govern the terms of this option
grant in all respects.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Restricted Stock Units</U>. We will recommend to the Board of Board of Directors
or Subcommittee thereof, that you be granted 6,500 restricted stock units. One fourth
(1/4) of the restricted stock units will vest on each anniversary of your hire date as long
as your employment continues with the Company. The Company&#146;s 2004 Equity Incentive Plan,
the Restricted Stock Unit Grant Notice and the Restricted Stock Unit Award Agreement shall
govern the terms of this grant in all respects.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Benefits</U>. You will be eligible to participate in our healthcare and dental
benefits, life and disability insurance, and a 401(k) plan effective on the first of the
month following your date of hire in accordance with the terms of the applicable plans.
The Company may modify your benefits from time to time in its discretion.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Relocation</U>. We will reimburse you for your reasonable relocation expenses.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Standard Employee Agreement</U>. As a condition to your employment, you are
required to sign and comply with the Company&#146;s standard Employee Nondisclosure, Proprietary
Information, Inventions, Nonsolicitation and Noncompetition Agreement.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Employee Handbook</U>. As a Company employee, you will be expected to abide by the
Company&#146;s rules and standards. You further understand that you will be required to
acknowledge and sign that you have received a copy of the Company&#146;s Employee Handbook and
that you understand the Company&#146;s policies set forth in the Company&#146;s Employee Handbook.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Federal Immigration Law</U>. For purposes of federal immigration law, you will be
required to provide to the Company documentary evidence of your identity and eligibility
for employment in the United States. Such documentation must be provided to us within
three (3)&nbsp;business days of your date of hire, or our employment relationship with you may
be terminated.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>At-Will Employment</U>. Your employment is at-will, as defined under applicable
law. This means you may voluntarily quit at any time, for any reason or for no reason,
simply by notifying the Company. Likewise, the Company may terminate your employment at
any time, for any lawful reason or for no reason, with or without cause or advance notice.
This at-will employment relationship cannot be changed except in a writing signed by a
Company officer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">13.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Entire Agreement</U>. This offer letter agreement, together with your Employee
Nondisclosure, Proprietary Information, Inventions, Nonsolicitation and Noncompetition
Agreement, constitutes the complete and exclusive statement of your employment agreement
with the Company. The employment terms in this letter supersede any other agreements or
promises made to you by anyone, whether written or oral.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">14.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Start Date</U>. July&nbsp;23, 2007.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Again, let me indicate how pleased we all are to extend this offer, and how much we look forward to
working together. Please indicate your acceptance by signing and returning the enclosed copy of
this letter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Very truly yours,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-variant: SMALL-CAPS"><B>Blue Nile Inc.</B></FONT>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>/s/ Mark Vadon</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mark Vadon, CEO</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">The foregoing terms and conditions are hereby accepted:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Signed:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>/s/ Scott Devitt</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Scott Devitt</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dated:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6/27/2007</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>v31586exv10w2.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.2
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><FONT style="font-variant: SMALL-CAPS">Blue Nile, Inc. </FONT><BR>
<FONT style="font-variant: SMALL-CAPS">Restricted Stock Unit Grant Notice</FONT><BR>
(<FONT style="font-variant: SMALL-CAPS">2004 Equity Incentive Plan</FONT>)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Blue Nile, Inc. (the &#147;<B><I>Company</I></B>&#148;), pursuant to Section 7(b) of the Company&#146;s 2004 Equity Incentive
Plan (the &#147;<B><I>Plan</I></B>&#148;), hereby awards to Participant a Restricted Stock Unit Award covering the number
of restricted stock units (the &#147;<B><I>Restricted Stock Units</I></B>&#148;) set forth below (the &#147;<B><I>Award</I></B>&#148;). This Award
shall be evidenced by a Restricted Stock Unit Award Agreement (the &#147;<B><I>Award Agreement</I></B>&#148;). This Award
is subject to all of the terms and conditions as set forth herein and in the applicable Award
Agreement and the Plan, each of which are attached hereto and incorporated herein in their
entirety.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Participant:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date of Grant:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Vesting Commencement Date:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Number of Restricted Stock Units:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Payment for Common Stock:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Participant&#146;s services to the Company</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Vesting Schedule</B>: The Restricted Stock Units shall vest <B>&#091;in four equal annual installments
commencing on the first anniversary of the Vesting Commencement Date&#093;</B>.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="26%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Special Tax Withholding Right:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">You may direct the Company
(i)&nbsp;to withhold, from shares
otherwise issuable upon
vesting of the Award, a
portion of those shares with
an aggregate fair market
value (measured as of the
vesting date) equal to the
amount of the applicable
withholding taxes, and (ii)
to make a cash payment equal
to such fair market value
directly to the appropriate
taxing authorities, as
provided in Section&nbsp;10 of the
Award Agreement.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">None</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Delivery Schedule</B>: Delivery of one share of Common Stock for each Restricted Stock Unit which
vests shall occur on the applicable vesting date, provided that delivery may be delayed as provided
in Section&nbsp;3 of the Award Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Additional Terms/Acknowledgements: </B>Participant acknowledges receipt of, and understands and agrees
to, this Grant Notice, the Award Agreement and the Plan. Participant further acknowledges that as
of the Date of Grant, this Grant Notice, the Award Agreement and the Plan set forth the entire
understanding between Participant and the Company regarding the award of the Restricted Stock Units
and the underlying Common Stock and supersede all prior oral and written agreements on that subject
with the exception of (i)&nbsp;Stock Awards previously granted and delivered to Participant under the
Plan, and (ii)&nbsp;the following agreements only:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><FONT style="font-variant: SMALL-CAPS"><B>Other Agreements:</B></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><BR><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="42%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="5" valign="top" align="left"><FONT style="font-variant: SMALL-CAPS"><B>Blue Nile, Inc.</B></FONT> &nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="bottom" align="left"><FONT style="font-variant: SMALL-CAPS"><B>Participant</B></FONT></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
Signature</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="bottom" align="center"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
Signature<BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom"><BR><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><BR><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom"><BR><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-variant: SMALL-CAPS"><B>Attachments</B></FONT>: Award Agreement, and 2004 Equity Incentive Plan
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><FONT style="font-variant: SMALL-CAPS">Blue Nile, Inc. </FONT><BR>
<FONT style="font-variant: SMALL-CAPS">2004 Equity Incentive Plan</FONT><BR>
<FONT style="font-variant: SMALL-CAPS">Restricted Stock Unit Award Agreement</FONT></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Restricted Stock Unit Grant Notice (&#147;<B><I>Grant Notice</I></B>&#148;) and this Restricted Stock
Unit Award Agreement (&#147;<B><I>Agreement</I></B>&#148;), Blue Nile, Inc. (the &#147;<B><I>Company</I></B>&#148;) has awarded you a Restricted
Stock Unit Award pursuant to Section 7(b) of the Company&#146;s 2004 Equity Incentive Plan (the &#147;<B><I>Plan</I></B>&#148;)
for the number of Restricted Stock Units as indicated in the Grant Notice (collectively, the
&#147;<B><I>Award</I></B>&#148;). Defined terms not explicitly defined in this Agreement but defined in the Plan shall
have the same definitions as in the Plan. Subject to adjustment and the terms and conditions as
provided herein and in the Plan, each Restricted Stock Unit shall represent the right to receive
one (1)&nbsp;share of Common Stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The details of your Award, in addition to those set forth in the Grant Notice, are as follows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Number of Restricted Stock Units and Shares of Common Stock.</B></FONT> The number of
Restricted Stock Units in your Award is set forth in the Grant Notice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(a)&nbsp;</B>The number of Restricted Stock Units subject to your Award and the number of shares of
Common Stock deliverable with respect to such Restricted Stock Units may be adjusted from time to
time for Capitalization Adjustments as described in Section 11(a) of the Plan. Except as provided
in Section&nbsp;11 below, you shall receive no benefit or adjustment to your Award with respect to any
cash dividend or other distribution that does not result in a Capitalization Adjustment pursuant to
Section 11(a) of the Plan; <I>provided, however, </I>that this sentence shall not apply with respect to
any shares of Common Stock that are delivered to you in connection with your Award after such
shares have been delivered to you.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(b)&nbsp;</B>Any additional Restricted Stock Units, shares of Common Stock, cash or other property that
becomes subject to the Award pursuant to this Section&nbsp;1 shall be subject, in a manner determined by
the Board, to the same forfeiture restrictions, restrictions on transferability, and time and
manner of delivery as applicable to the other Restricted Stock Units and Common Stock covered by
your Award.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(c)&nbsp;</B>Notwithstanding the provisions of this Section&nbsp;1, no fractional Restricted Stock Units or
rights for fractional shares of Common Stock shall be created pursuant to this Section&nbsp;1. The
Board shall, in its discretion, determine an equivalent benefit for any fractional Restricted Stock
Units or fractional shares that might be created by the adjustments referred to in this Section&nbsp;1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Vesting</B></FONT><B>. </B>The Restricted Stock Units shall vest, if at all, as provided in the
Vesting Schedule set forth in your Grant Notice and the Plan, provided that vesting shall cease
upon the termination of your Continuous Service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Delivery of Shares of Common Stock</B></FONT><B>. </B>Subject to the provisions of this Agreement
and the Plan, in the event one or more Restricted Stock Units vests, the Company shall deliver to
you one (1)&nbsp;share of Common Stock for each Restricted Stock Unit that vests on the applicable
vesting date. However, if a scheduled delivery date falls on a date that is not a business day,
such delivery date shall instead fall on the next following business day. Notwithstanding the
foregoing, in the event that you are subject to the Company&#146;s <B><I>Policy on</I></B>
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Stock Trading by Directors, Officers and Employees </I></B>(or any successor policy) and any shares
covered by your Award are scheduled to be delivered on a day (the &#147;<B><I>Original Delivery Date</I></B>&#148;) that
does not occur during a &#147;window period&#148; applicable to you as determined by the Company in
accordance with such policy, then such shares shall not be delivered on such Original Delivery Date
and shall instead be delivered on the earlier to occur of the following: (i)&nbsp;the first day of the
next &#147;window period&#148; applicable to you pursuant to such policy; or (ii)&nbsp;the day that is sixty (60)
days after the Original Delivery Date. The form of such delivery (<I>e.g.</I>, a stock certificate or
electronic entry evidencing such shares) shall be determined by the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Payment by You</B></FONT><B>. </B>This Award was granted in consideration of your services for the
Company. Subject to Section&nbsp;10 below, except as otherwise provided in the Grant Notice, you will
not be required to make any payment to the Company (other than your past and future services for
the Company) with respect to your receipt of the Award, vesting of the Restricted Stock Units, or
the delivery of the shares of Common Stock underlying the Restricted Stock Units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Securities Law Compliance</B></FONT><B>. </B>You may not be issued any Common Stock under your
Award unless the shares of Common Stock are either (i)&nbsp;then registered under the Securities Act, or
(ii)&nbsp;the Company has determined that such issuance would be exempt from the registration
requirements of the Securities Act. Your Award must also comply with other applicable laws and
regulations governing the Award, and you shall not receive such Common Stock if the Company
determines that such receipt would not be in material compliance with such laws and regulations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Restrictive Legends.</B></FONT> The Common Stock issued under your Award shall be endorsed
with appropriate legends, if any, determined by the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Transfer Restrictions.</B></FONT> Prior to the time that shares of Common Stock have been
delivered to you, you may not transfer, pledge, sell or otherwise dispose of the shares in respect
of your Award. For example, you may not use shares that may be issued in respect of your
Restricted Stock Units as security for a loan, nor may you transfer, pledge, sell or otherwise
dispose of such shares. This restriction on transfer will lapse upon delivery to you of shares in
respect of your vested Restricted Stock Units. Your Award is not transferable, except by will or
by the laws of descent and distribution. Notwithstanding the foregoing, by delivering written
notice to the Company, in a form satisfactory to the Company, you may designate a third party who,
in the event of your death, shall thereafter be entitled to receive any distribution of Common
Stock pursuant to this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Award not a Service Contract</B></FONT><B>. </B>Your Award is not an employment or service
contract, and nothing in your Award shall be deemed to create in any way whatsoever any obligation
on your part to continue in the service of the Company or any Affiliate, or on the part of the
Company or any Affiliate to continue such service. In addition, nothing in your Award shall
obligate the Company or any Affiliate, their respective stockholders, boards of directors or
employees to continue any relationship that you might have as an Employee or Consultant of the
Company or any Affiliate.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Unsecured Obligation</B></FONT><B>. </B>Your Award is unfunded, and even as to any Restricted Stock
Units which vest, you shall be considered an unsecured creditor of the Company with respect to the
Company&#146;s obligation, if any, to issue Common Stock pursuant to this Agreement. You shall not have
voting or any other rights as a stockholder of the Company with respect to the Common Stock
acquired pursuant to this Agreement until such Common Stock is issued to you pursuant to Section&nbsp;3
of this Agreement. Upon such issuance, you will obtain full voting and other rights as a
stockholder of the Company with respect to the Common Stock so issued. Nothing contained in this
Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a
trust of any kind or a fiduciary relationship between you and the Company or any other person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Withholding Obligations.</B></FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(a)&nbsp;</B>On or before the time you receive a distribution of Common Stock pursuant to your Award,
or at any time thereafter as requested by the Company, you hereby authorize any required
withholding from the Common Stock issuable to you and otherwise agree to make adequate provision in
cash for any sums required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or any Affiliate which arise in connection with your Award (the
&#147;<B><I>Withholding Taxes</I></B>&#148;). If specified in your Grant Notice, you may direct the Company to withhold
shares of Common Stock with a Fair Market Value (measured as of the vesting date) equal to the
amount of such Withholding Taxes; <I>provided, however</I>, that the number of such shares of Common Stock
so withheld shall not exceed the amount necessary to satisfy the Company&#146;s required tax withholding
obligations using the minimum statutory withholding rates for federal, state, local and foreign tax
purposes, including payroll taxes, that are applicable to supplemental taxable income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(b)&nbsp;</B>Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied,
the Company shall have no obligation to deliver to you any Common Stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(c)&nbsp;</B>In the event the Company&#146;s obligation to withhold arises prior to the delivery to you of
Common Stock or it is determined after the delivery of Common Stock to you that the amount of the
Company&#146;s withholding obligation was greater than the amount withheld by the Company, you agree to
indemnify and hold the Company harmless from any failure by the Company to withhold the proper
amount.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Dividend Equivalents</B></FONT><B>. </B>In accordance with Section&nbsp;7(b)(v) of the Plan, the
Restricted Stock Units subject to this Award shall be credited with any dividends declared and paid
by the Company on its Common Stock. Such dividend equivalents shall be converted into additional
Restricted Stock Units by dividing (1)&nbsp;the aggregate amount or value of the dividends paid with
respect to that number of shares of Common Stock equal to the number of Restricted Stock Units then
credited by (2)&nbsp;the Fair Market Value per share of Common Stock on the payment date for such
dividend. The additional Restricted Stock Units credited by reason of such dividend equivalents
will be subject to all the terms and conditions, including vesting, of this Award.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>12.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Notices</B></FONT><B>. </B>Any notices provided for in your Award or the Plan shall be given in
writing to each of the other parties hereto and shall be deemed effectively given on the earlier of
(i)&nbsp;the date of personal delivery, including delivery by express courier, or (ii)&nbsp;the date that is
five (5)&nbsp;days after deposit in the United States Post Office (whether or not actually received by
the addressee), by registered or certified mail with postage and fees prepaid, addressed at the
following addresses, or at such other address(es) as a party may designate by ten (10)&nbsp;days&#146;
advance written notice to each of the other parties hereto:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B><FONT style="font-variant: SMALL-CAPS">Company:</FONT></B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Blue Nile, Inc.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attn: General Counsel</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">705 Fifth Avenue South</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Seattle, WA 98104</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B><FONT style="font-variant: SMALL-CAPS">Participant:</FONT></B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Your address as on file with the Company at the time notice is given</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Headings</B></FONT><B>. </B>The headings of the Sections in this Agreement are inserted for
convenience only and shall not be deemed to constitute a part of this Agreement or to affect the
meaning of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>14.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Amendment</B></FONT><B>. </B>This Agreement may be amended only by a writing executed by the
Company and you which specifically states that it is amending this Agreement. Notwithstanding the
foregoing, this Agreement may be amended solely by the Company by a writing which specifically
states that it is amending this Agreement, so long as a copy of such amendment is delivered to you,
and provided that no such amendment adversely affecting your rights hereunder may be made without
your written consent. Without limiting the foregoing, the Company reserves the right to change, by
written notice to you, the provisions of this Agreement in any way it may deem necessary or
advisable to carry out the purpose of the grant as a result of any change in applicable laws or
regulations or any future law, regulation, ruling, or judicial decision, provided that any such
change shall be applicable only to rights relating to that portion of the Award which is then
subject to restrictions as provided herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>15.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Miscellaneous.</B></FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(a)&nbsp;</B>The rights and obligations of the Company under your Award shall be transferable by the
Company to any one or more persons or entities, and all covenants and agreements hereunder shall
inure to the benefit of, and be enforceable by the Company&#146;s successors and assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(b)&nbsp;</B>You agree upon request to execute any further documents or instruments necessary or
desirable in the sole determination of the Company to carry out the purposes or intent of your
Award.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(c)&nbsp;</B>You acknowledge and agree that you have reviewed your Award in its entirety, have had an
opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully
understand all provisions of your Award.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(d)&nbsp;</B>This Agreement shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities exchanges as may be required.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(e)&nbsp;</B>All obligations of the Company under the Plan and this Agreement shall be binding on any
successor to the Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>16.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Governing Plan Document</B></FONT><B>. </B>Your Award is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your Award, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your Award
and those of the Plan, the provisions of the Plan shall control; <I>provided, however</I>, that Section&nbsp;3
of this Agreement shall govern the timing of any distribution of Common Stock under your Award.
The Company shall have the power to interpret the Plan and this Agreement and to adopt such rules
for the administration, interpretation, and application of the Plan as are consistent therewith and
to interpret or revoke any such rules. All actions taken and all interpretations and determinations
made by the Board shall be final and binding upon you, the Company, and all other interested
persons. No member of the Board shall be personally liable for any action, determination, or
interpretation made in good faith with respect to the Plan or this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Effect on Other Employee Benefit Plans.</B></FONT> The value of the Award subject to this
Agreement shall not be included as compensation, earnings, salaries, or other similar terms used
when calculating benefits under any employee benefit plan (other than the Plan) sponsored by the
Company or any Affiliate except as such plan otherwise expressly provides. The Company expressly
reserves its rights to amend, modify, or terminate any or all of the employee benefit plans of the
Company or any Affiliate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>18.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Severability.</B></FONT> If all or any part of this Agreement or the Plan is declared by
any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity
shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or
invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or
invalid shall, if possible, be construed in a manner which will give effect to the terms of such
Section or part of a Section to the fullest extent possible while remaining lawful and valid.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>19.&nbsp;</B><FONT style="font-variant: SMALL-CAPS"><B>Other Documents.</B></FONT> You hereby acknowledge receipt or the right to receive a
document providing the information required by Rule&nbsp;428(b)(1) promulgated under the Securities Act.
In addition, you acknowledge receipt of the Company&#146;s <B><I>Policy on Stock Trading by Directors,
Officers and Employees</I></B>.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">* * * * *
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Restricted Stock Unit Award Agreement shall be deemed to be signed by the Company and the
Participant upon the signing by the Participant of the Restricted Stock Unit Grant Notice to which
it is attached.
</DIV>


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<TYPE>EX-99.1
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<DESCRIPTION>EXHIBIT 99.1
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;99.1
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><IMG src="v31586v3158600.gif" alt="(BLUE NILE LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>FOR IMMEDIATE RELEASE</B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>BLUE NILE ANNOUNCES THE APPOINTMENT OF SCOTT DEVITT AS</B></U><BR>
<U><B>NEW CHIEF FINANCIAL OFFICER</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEATTLE, JUNE 29, 2007 </B>&#151; Blue Nile, Inc. (NASDAQ: NILE) today announced that Scott Devitt has been
named Chief Financial Officer of the Company and will assume this role on July&nbsp;23, 2007. As CFO,
Devitt will have responsibility for the Company&#146;s finance functions, including accounting,
financial reporting, financial planning and analysis, treasury, tax, and investor relations. Devitt
joins Blue Nile from Stifel Nicolaus &#038; Company, where he serves as Managing Director and Senior
Analyst, Internet Consumer Services. Devitt holds an M.B.A. from the University of Georgia and a
B.A. in Finance from the University of North Florida. His in-depth understanding of internet
retail companies and the public markets positions him to have tremendous impact at Blue Nile.
Devitt will report to Diane Irvine, who has served as Blue Nile&#146;s CFO since 1999. Irvine will
complete the transition to her new role as President.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;We are thrilled to have Scott join our team,&#148; said Irvine. &#147;Blue Nile is at an important stage of
its growth. Scott has the talent to help build our business into the world&#146;s dominant jewelry
retailer.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;I am very excited to join the Blue Nile team,&#148; said Devitt. &#147;The Company has achieved strong
financial performance, has a capital efficient business model, and is well positioned as the leader
in online jewelry retailing. I look forward to contributing to Blue Nile&#146;s continued success.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>About Blue Nile, Inc.</B><BR>
Founded in 1999, Blue Nile is the leading online retailer of diamonds and fine jewelry. It has
built a well respected brand by providing consumers with a better way to buy diamonds and fine
jewelry. Blue Nile has established some of the highest quality standards in the industry and
provides consumers with in-depth educational materials and unique online tools that place consumers
in control of the jewelry shopping process. The Blue Nile websites showcase thousands of
independently certified diamonds and fine jewelry at prices significantly below traditional retail.
Blue Nile can be found online at <U>www.bluenile.com</U>, <U>www.bluenile.ca</U> and <U>www.bluenile.co.uk</U>. Blue
Nile&#146;s shares are traded on the Nasdaq Stock Market LLC under the symbol NILE.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Contact:</B><BR>
Blue Nile, Inc.<BR>
Nancy Shipp, (Investors) 206.388.3136<BR>
<U>nancys@bluenile.com </U><BR>
or<BR>
John Baird, (Media) 206.336.6755<BR>
<U>johnb@bluenile.com </U>

</DIV>


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`
end
</TEXT>
</DOCUMENT>
</SUBMISSION>
