BLUE NILE INC
EXHIBIT 10.1
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<DESCRIPTION>EXHIBIT 10.1
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.1
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">June&nbsp;26, 2007
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<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>

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<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>

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<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>
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<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>

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<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="23%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
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    <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>
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    <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>
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<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>
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">The foregoing terms and conditions are hereby accepted:
</DIV>

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    <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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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