EXHIBIT 10.2
BLUE NILE, INC.

CHANGE OF CONTROL SEVERANCE PLAN
Section 1. Introduction.
          The Blue Nile, Inc. Change of Control Severance Plan (the “Plan”) is
established effective March 4, 2009. The purpose of the Plan is to provide for
the payment of severance benefits to certain eligible executives of Blue Nile,
Inc. or, following a Change of Control (as defined below), the surviving entity
resulting from such transaction or the parent company of such surviving entity
(the “Company”). This Plan supersedes any severance plan, policy or practice
with respect to Qualifying Terminations (as defined below), whether formal or
informal, written or unwritten, previously announced or maintained by the
Company. This Plan document also is the Summary Plan Description for the Plan.
Section 2. Eligibility For Benefits.
          (a) General Rules. Subject to the requirements of the Plan, the
Company will grant the severance benefits described in Section 3 to Eligible
Employees.
               (1) Definition of “Eligible Employee.” For purposes of this Plan,
Eligible Employees are those employees of the Company determined by the Plan
Administrator, in its sole discretion, to be eligible for severance benefits
under the Plan. The Plan Administrator shall make the determination of whether
an employee is an Eligible Employee, and such determination shall be binding and
conclusive on all persons. The Plan Administrator shall maintain a current
schedule of Eligible Employees with the General Counsel of the Company or such
other Company officer as may be designated by the Plan Administrator. Temporary
employees and independent contractors are not eligible for severance benefits
under the Plan.
               (2) Obligations of Eligible Employees. In order to receive any
benefits under the Plan:
                    (i) the Eligible Employee must suffer a Qualifying
Termination;
                    (ii) the Eligible Employee must remain on the job until the
date of his or her Qualifying Termination;
                    (iii) the Eligible Employee must execute and return to the
Company a general waiver and release in substantially the form attached hereto
as Exhibit A, Exhibit B or Exhibit C, as applicable, within the time frame set
forth therein (the “Release”) and such release must become effective in
accordance with its terms — but not later than the 60th day following the
termination of employment — provided, however, the Plan Administrator has the
authority, in its discretion, to modify the form of the release as necessary to
comply with changes in applicable law and to incorporate the release into a
termination agreement with the Eligible Employee; and
                    (iv) the Eligible Employee must remain in compliance with
his or her continuing obligations to the Company, including obligations under
his or her Employee Nondisclosure, Proprietary Information, Inventions,
Nonsolicitation and Noncompetition Agreement (such form, or any similar form,
the “Proprietary Agreement”).
          (b) Exceptions to Benefit Entitlement. An employee who otherwise is an
Eligible Employee will not receive benefits under the Plan (or will receive
reduced benefits under the Plan) in the following circumstances, as determined
by the Company in its sole discretion:

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               (1) The employee is covered by any other severance or separation
pay plan, policy or practice of the Company or has executed an individually
negotiated employment contract or agreement with the Company relating to
severance benefits, in either case with respect to severance benefits payable
upon an event that constitutes a Qualifying Termination (used herein as defined
herein), and such agreement, plan, policy or practice is in effect on his or her
termination date. In such case, the employee’s severance benefit upon a
Qualifying Termination, if any, shall be governed by the terms of such
agreement, plan, policy or practice.
               (2) The employee’s employment terminates other than as a result
of a Qualifying Termination (including a termination for Cause prior to the
effective date of a previously scheduled Qualifying Termination, or a
termination as a result of death or disability, or the employee voluntarily
terminates employment with the Company other than as a Resignation for Good
Reason). Voluntary terminations include, but are not limited to, resignation,
retirement, failure to return from a leave of absence on the scheduled date
and/or termination in order to accept employment with another entity (including
but not limited to any entity that is wholly or partly owned (directly or
indirectly) by the Company or an affiliate of the Company).
               (3) The employee has not signed an enforceable Proprietary
Agreement covering the employee’s period of employment with the Company (and
with any predecessor) and does not confirm in writing that he or she is and
shall remain subject to the terms of that Proprietary Agreement.
          (c) Definition of “Cause”. “Cause” for termination includes one of the
following events that has a material negative impact on the business or
reputation of the Company:
               (1) indictment or conviction of any felony or any crime involving
dishonesty or moral turpitude;
               (2) dishonesty which is not the result of an inadvertent or
innocent mistake by employee with respect to the Company;
               (3) employee’s continued willful violation of his or her
obligations to the Company after there has been delivered to employee a written
demand for performance from the Company’s Board of Directors (the “Board”) which
describes the basis for the Board’s belief that employee has not substantially
satisfied his or her obligations to the Company;
               (4) employee’s violation or breach of any material written
Company policy, agreement with the Company, or any statutory or fiduciary duty
to the Company; or
               (5) damaging or misappropriating or attempting to damage or
misappropriate any property, including any confidential or proprietary
information, of the Company.
          (d) Definition of “Change of Control”. A “Change of Control” means the
occurrence, in a single transaction or in a series of related transactions, of
any one or more of the following events:
               (1) any Exchange Act Person becomes the Owner, directly or
indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then outstanding securities
other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because the level of Ownership held by any Exchange Act Person (the
“Subject Person”) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided
that if a Change of Control would occur (but for the operation of this sentence)
as a result of the acquisition of voting securities by the Company, and after
such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not
occurred, increases the percentage of the then outstanding voting securities
Owned by the Subject Person over the designated percentage threshold, then a
Change of Control shall be deemed to occur;

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               (2) there is consummated a merger, consolidation or similar
transaction involving (directly or indirectly) the Company and, immediately
after the consummation of such merger, consolidation or similar transaction, the
stockholders of the Company immediately prior thereto do not Own, directly or
indirectly, outstanding voting securities representing more than fifty percent
(50%) of the combined outstanding voting power of the surviving Entity in such
merger, consolidation or similar transaction or more than fifty percent (50%) of
the combined outstanding voting power of the parent of the surviving Entity in
such merger, consolidation or similar transaction;
               (3) there is consummated a sale, lease, license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries, other than a sale, lease, license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by
stockholders of the Company in substantially the same proportions as their
Ownership of the Company immediately prior to such sale, lease, license or other
disposition; or
               (4) during any two (2) year period, individuals who, on the date
this Plan is adopted by the Board, are members of the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the members of
the Board; (provided, however, that if the appointment or election (or
nomination for election) of any new Board member was approved or recommended by
a majority vote of the members of the Incumbent Board then still in office, such
new member shall, for purposes of this Plan, be considered as a member of the
Incumbent Board).
          (e) Definition of “Entity”. “Entity” means a corporation, partnership,
limited liability company or other entity.
          (f) Definition of “Exchange Act Person”. An “Exchange Act Person”
means any natural person, entity or “group” (within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended), except that
“Exchange Act Person” shall not include (1) the Company or any subsidiary of the
Company, (2) any employee benefit plan of the Company or any subsidiary of the
Company or any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any subsidiary of the Company, (3) an underwriter
temporarily holding securities pursuant to an offering of such securities,
(4) an entity owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company; or (5) any natural person, entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) that,
as of the effective date of this Plan, is the owner, directly or indirectly, of
securities of the Company representing more than fifty percent (50%) of the
combined voting power of the Company’s then outstanding securities.
          (g) Definition of “Own,” “Owned,” “Owner,” “Ownership”. A person or
Entity shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to
have acquired “Ownership” of securities if such person or Entity, directly or
indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to
direct the voting, with respect to such securities.
          (h) Definition of “Qualifying Termination”. A “Qualifying Termination”
means the Eligible Employee suffers an involuntary termination without Cause or
a Resignation for Good Reason, in either case that (i) constitutes a “separation
from service” (as defined under Treasury Regulation Section 1.409A-1(h)),
(ii) occurs other than as a result of death or disability, and (iii) occurs on
or (A) within twenty-four (24) months following the effective date of the Change
of Control in the case of the Executive Chairman and Chief Executive Officer or
(B) within twelve (12) months following the effective date of the Change of
Control in the case of all other Eligible Employees.
          (g) Definition of “Resignation for Good Reason”. A “Resignation for
Good Reason” means the Eligible Employee has resigned from all positions he or
she then holds with the Company (or any successor thereto):

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               (1) because one of the following actions has been taken without
his or her express written consent:
                    (i) there is a material reduction (where material is
considered greater than 10%) of the Eligible Employee’s annual base salary;
                    (ii) there is a material change in the Eligible Employee’s
position or responsibilities (including the person or persons to whom the
Eligible Employee has reporting responsibilities);
                    (iii) the Eligible Employee is required to relocate his or
her principal place of employment to a location that would increase his or her
one way commute distance by more than twenty-five (25) miles; or
                    (iv) the Company materially breaches its obligations under
this Plan or any then-existing employment agreement with the Eligible Employee;
and
               (2) the Eligible Employee provides written notice to the
Company’s Board within the 30-day period immediately following such action; and
               (3) such action is not remedied by the Company within thirty
(30) days following the Company’s receipt of such written notice; and
               (4) the Eligible Employee’s resignation is effective not later
than sixty (60) days after the expiration of such thirty (30) day cure period.
Section 3. Amount Of Benefit.
          (a) Severance Benefits. Subject to the terms and conditions of the
Plan, the Eligible Employee shall receive the severance benefits set forth on
the Participation Notice provided to the Eligible Employee, in the substantially
attached hereto as in Exhibit D, at the time such individual is designated an
Eligible Employee, or as may be amended thereafter by the Plan Administrator.
The Eligible Employee must sign and return the Participation Notice to the
Company within thirty (30) days after designation to agree to the terms and
conditions of the Plan.
          (b) Additional Benefits. Notwithstanding the foregoing, the Company
may, in its sole discretion, authorize benefits in an amount in addition to
those benefits set forth in Section 3(a) to an Eligible Employee. The provision
of any such benefits to an Eligible Employee shall in no way obligate the
Company to provide such benefits to any other Eligible Employee or to any other
employee, even if similarly situated. Receipt of benefits under this Plan
pursuant to such exceptions may be subject to a covenant of confidentiality and
non-disclosure.
          (c) Certain Reductions. The Company shall reduce an Eligible
Employee’s severance benefits under this Plan, in whole or in part, by any other
severance benefits, pay in lieu of notice, or other similar benefits payable to
the Eligible Employee by the Company in connection with the Eligible Employee’s
Qualifying Termination, including but not limited to any payments or benefits
that are due pursuant to (i) any other severance plan, policy or practice, or
any individually negotiated employment contract or agreement with the Company
relating to severance benefits, in each case, as is in effect on the Eligible
Employee’s termination date, (ii) any applicable legal requirement, including,
without limitation, the Worker Adjustment and Retraining Notification Act (the
“WARN Act”), or (iii) any Company policy or practice providing for the Eligible
Employee to remain on the payroll without being in active service for a limited
period of time after being given notice of the termination of the Eligible
Employee’s employment. The benefits provided under this Plan are intended to
satisfy, to the greatest extent possible, any and all statutory obligations that
may arise out of an Eligible Employee’s termination of employment, and the Plan
Administrator shall so construe and implement the terms of the Plan. In the
Company’s sole discretion, such reductions may be applied on a retroactive
basis, with severance benefits previously paid being recharacterized as payments
pursuant to the Company’s statutory obligation.

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          (d) Best After Tax. If any payment or benefit (including payments and
benefits pursuant to this Plan) that an Eligible Employee would receive in
connection with a Change of Control from the Company or otherwise (“Payment”)
would (i) constitute a “parachute payment” within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for
this sentence, be subject to the excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), then the Company shall cause to be determined, before any
amounts of the Payment are paid to the Eligible Employee, which of the following
two alternative forms of payment would maximize the Eligible Employee’s
after-tax proceeds: (i) payment in full of the entire amount of the Payment (a
“Full Payment”), or (ii) payment of only a part of the Payment so that the
Eligible Employee receives the largest payment possible without the imposition
of the Excise Tax (a “Reduced Payment”), whichever amount results in the
Participant’s receipt, on an after-tax basis, of the greater amount of the
Payment notwithstanding that all or some portion of the Payment may be subject
to the Excise Tax. For purposes of determining whether to make a Full Payment or
a Reduced Payment, the Company shall cause to be taken into account all
applicable federal, state and local income and employment taxes and the Excise
Tax (all computed at the highest applicable marginal rate, net of the maximum
reduction in federal income taxes which could be obtained from a deduction of
such state and local taxes). If a Reduced Payment is made, (i) the Payment shall
be paid only to the extent permitted under the Reduced Payment alternative, and
the Eligible Employee shall have no rights to any additional payments and/or
benefits constituting the Payment, and (ii) reduction in payments and/or
benefits shall occur in the following order: (1) reduction of cash payments; (2)
cancellation of accelerated vesting of equity awards other than stock options;
(3) cancellation of accelerated vesting of stock options; and (4) reduction of
other benefits paid to the Eligible Employee. In the event that acceleration of
compensation from the Eligible Employee’s equity awards is to be reduced, such
acceleration of vesting shall be canceled in the reverse order of the date of
grant.
               The independent professional firm engaged by the Company for
general tax audit purposes as of the day prior to the effective date of the
Change of Control shall make all determinations required to be made under this
Section 3(d). If the firm so engaged by the Company is serving as accountant or
auditor for the individual, entity or group effecting the Change of Control, the
Company shall appoint a nationally recognized independent professional firm to
make the determinations required hereunder. The Company shall bear all expenses
with respect to the determinations by such firm required to be made hereunder.
               The firm engaged to make the determinations hereunder shall
provide its calculations, together with detailed supporting documentation, to
the Company and the Eligible Employee within thirty (30) calendar days after the
date on which the Eligible Employee’s right to a Payment is triggered (if
requested at that time by the Company or the Eligible Employee) or such other
time as requested by the Company or the Eligible Employee. If the firm
determines that no Excise Tax is payable with respect to a Payment, either
before or after the application of the Reduced Amount, it shall furnish the
Company and the Eligible Employee with a statement reasonably acceptable to the
Eligible Employee that no Excise Tax will be imposed with respect to such
Payment. Any good faith determinations of the firm made hereunder shall be
final, binding and conclusive upon the Company and the Eligible Employee.
          (e) Code Section 409A. The Company intends that each installment of
the payments and benefits provided under the Plan (the “Plan Payments”) is a
separate “payment” for purposes of Code Section 409A (together, with any state
law of similar effect, “Section 409A”), and that all payments under this Plan
are exempt from Section 409A, to the greatest extent possible, pursuant to
Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9).
However, if the Company determines that some or all of the Plan Payments
constitute “deferred compensation” under Section 409A and at the time of a
Qualifying Termination an Eligible Employee is a “specified employee” of the
Company or any successor entity thereto, as such term is defined in
Section 409A(a)(2)(B)(i) (a “Specified Employee”), then, solely to the extent
necessary to avoid the incurrence of the adverse personal tax consequences under
Section 409A, the timing of the Plan Payments shall be delayed as follows: on
the earlier to occur of (i) the date that is six months and one day after the
termination date or (ii) the date of the Eligible Employee’s death (such earlier
date, the “Delayed Initial Payment Date”), the Company shall (A) pay to the
Eligible Employee a lump sum amount equal to the sum of the Plan Payments that
the Eligible Employee would otherwise have received through the Delayed Initial
Payment Date (including reimbursement for any premiums paid by the Eligible
Employee for health insurance coverage under COBRA) if the commencement of the
payment of the Plan Payments had not been delayed pursuant to this paragraph and
(B) commence paying the balance of the Plan Payments in accordance with the
applicable payment schedules set forth on Exhibit D.

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Section 4. Company Property.
          (a) Return of Company Property. An Eligible Employee will not be
entitled to any severance under the Plan unless and until the Eligible Employee
returns all Company Property, unless otherwise expressly permitted by the
Company to retain one or more items of Company Property. For this purpose,
“Company Property” means all paper and electronic company documents (and all
copies thereof) created and/or received by the Eligible Employee during his or
her period of employment with the Company and other Company Property which the
Eligible Employee had in his or her possession or control at any time,
including, but not limited to, Company and/or Employer files, notes, drawings
records, plans, forecasts, reports, studies, analyses, proposals, agreements,
financial information, research and development information, sales and marketing
information, operational and personnel information, specifications, code,
software, databases, computer-recorded information, tangible property and
equipment (including, but not limited to, leased vehicles, computers, computer
equipment, software programs, facsimile machines, mobile telephones, servers),
credit and calling cards, entry cards, identification badges and keys; and any
materials of any kind which contain or embody any proprietary or confidential
information of the Company and/or an Employer (and all reproductions thereof in
whole or in part). As a condition to receiving benefits under the Plan, Eligible
Employees must not make or retain copies, reproductions or summaries of any such
Company Property. However, an Eligible Employee is not required to return his or
her personal copies of documents evidencing the Eligible Employee’s hire,
termination, compensation, benefits and stock options and any other
documentation received as a shareholder of the Company.
          (b) Transition of Work. An Eligible Employee will not be entitled to
any severance benefit under the Plan unless and until the Eligible Employee
(1) has satisfactorily transitioned his or her work and information concerning
his or her work to the Company to the extent reasonably requested in writing by
the Company and (2) has provided the Company with all logins, passwords,
passcodes and similar information created by the Eligible Employee for
documents, email and electronic files that the Eligible Employee created or used
on Company systems.
Section 5. Withholdings and Deductions.
          All payments under the Plan will be subject to applicable withholding
for federal, state and local taxes. If an Eligible Employee is indebted to the
Company at his or her termination date, the Company reserves the right to offset
any Play Payments by the amount of such indebtedness. Additionally, if an
Eligible Employee is subject to withholding for taxes related to any non-Plan
benefits, the Company may offset any Plan Payments by the amount of such
withholding taxes. However, Plan Payments will not be subject to any other
deductions such as, but not limited to, 401(k) plan contributions and/or 401(k)
loan repayments or other employee benefit and benefit plan contributions.
Section 6. Right To Interpret Plan; Amendment and Termination.
          (a) Exclusive Discretion. The Plan Administrator is the Compensation
Committee of the Board of Directors. As Plan Administrator, the Company is the
named fiduciary charged with the responsibility for administering the Plan. The
Plan Administrator shall have the exclusive discretion and authority to
establish rules, forms, and procedures for the administration of the Plan and to
construe and interpret the Plan and to decide any and all questions of fact,
interpretation, definition, computation or administration arising in connection
with the operation of the Plan, including, but not limited to, the eligibility
to participate in the Plan and amount of benefits paid under the Plan. The Plan
Administrator may delegate any or all of its administrative duties to an officer
of the Company and any such delegation shall convey with it the full
discretionary authority of the Plan Administrator to carry out the delegated
duties. The Company or the Plan Administrator shall indemnify and hold harmless
any person to whom it delegated its responsibilities; provided, however, such
person does not act with gross negligence or willful misconduct. The rules,
interpretations, computations and other actions of the Plan Administrator or its
delegate shall be binding and conclusive on all persons.
          (b) Termination; Amendment.

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               (1) This Plan will automatically terminate on the third
anniversary of the adoption of the Plan if no Change of Control has occurred by
that date. If a Change of Control has occurred by that date, this Plan will
terminate on the date that is twenty-four (24) months and one (1) day after the
effective date of the Change of Control; provided, however, that no such
termination shall affect the right to any unpaid benefit of any Eligible
Employee whose Qualifying Termination date has occurred prior to such date, and
such unpaid benefit rights shall continue to be governed by the terms of this
Plan.
               (2) The Company reserves the right to amend this Plan (including
the Exhibits hereto) and the benefits provided hereunder at any time prior to a
Change of Control of the Company; provided, however, that no such amendment
shall affect the right to any unpaid benefit of any Eligible Employee whose
Qualifying Termination date has occurred prior to amendment of the Plan.
               (3) Any purported amendment or termination of this Plan (and the
exhibits and appendices hereto) upon or following a Change of Control of the
Company will not be effective as to any Eligible Employee who has not consented,
in writing, to such amendment or termination. Any action amending or terminating
the Plan shall be in writing and executed by a duly authorized executive officer
of the Company.
Section 7. No Implied Employment Contract.
          The Plan shall not be deemed (i) to give any employee or other person
any right to be retained as an employee of or other service provider to the
Company or (ii) to interfere with the right of the Company to discharge any
employee or other person at any time, with or without cause, which right is
hereby reserved.
Section 8. Legal Construction.
          This Plan is intended to be governed by and shall be construed in
accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”)
and, to the extent not preempted by ERISA, the laws of the State of Washington
(without regard to principles of conflict of laws).
Section 9. Claims, Inquiries And Appeals.
          (a) Applications for Benefits and Inquiries. Any application for
benefits, inquiries about the Plan or inquiries about present or future rights
under the Plan must be submitted to the Plan Administrator in writing by an
applicant (or his or her authorized representative). The Plan Administrator is:
The Compensation Committee of the Board of Directors
Attn: General Counsel
705 Fifth Avenue S., Suite 900
Seattle, WA 98104
          (b) Denial of Claims. In the event that any application for benefits
is denied in whole or in part, the Plan Administrator must provide the applicant
with written or electronic notice of the denial of the application, and of the
applicant’s right to review the denial. Any electronic notice will comply with
the regulations of the U.S. Department of Labor. The notice of denial will be
set forth in a manner designed to be understood by the applicant and will
include the following:
               (1) the specific reason or reasons for the denial;
               (2) references to the specific Plan provisions upon which the
denial is based;

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               (3) a description of any additional information or material that
the Plan Administrator needs to complete the review and an explanation of why
such information or material is necessary; and
               (4) an explanation of the Plan’s review procedures and the time
limits applicable to such procedures, including a statement of the applicant’s
right to bring a civil action under Section 502(a) of ERISA following a denial
on review of the claim, as described in Section 10(d) below.
          This notice of denial will be given to the applicant within ninety
(90) days after the Plan Administrator receives the application, unless special
circumstances require an extension of time, in which case, the Plan
Administrator has up to an additional ninety (90) days for processing the
application. If an extension of time for processing is required, written notice
of the extension will be furnished to the applicant before the end of the
initial ninety (90) day period.
          This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the application.
          (c) Request for a Review. Any person (or that person’s authorized
representative) for whom an application for benefits is denied, in whole or in
part, may appeal the denial by submitting a request for a review to the Plan
Administrator within sixty (60) days after the application is denied. A request
for a review shall be in writing and shall be addressed to:
Blue Nile, Inc.
Attn: General Counsel
705 Fifth Avenue S., Suite 900
Seattle, WA 98104
          A request for review must set forth all of the grounds on which it is
based, all facts in support of the request and any other matters that the
applicant feels are pertinent. The applicant (or his or her representative)
shall have the opportunity to submit (or the Plan Administrator may require the
applicant to submit) written comments, documents, records, and other information
relating to his or her claim. The applicant (or his or her representative) shall
be provided, upon request and free of charge, reasonable access to, and copies
of, all documents, records and other information relevant to his or her claim.
The review shall take into account all comments, documents, records and other
information submitted by the applicant (or his or her representative) relating
to the claim, without regard to whether such information was submitted or
considered in the initial benefit determination.
          (d) Decision on Review. The Plan Administrator will act on each
request for review within sixty (60) days after receipt of the request, unless
special circumstances require an extension of time (not to exceed an additional
sixty (60) days), for processing the request for a review. If an extension for
review is required, written notice of the extension will be furnished to the
applicant within the initial sixty (60) day period. This notice of extension
will describe the special circumstances necessitating the additional time and
the date by which the Plan Administrator is to render its decision on the
review. The Plan Administrator will give prompt, written or electronic notice of
its decision to the applicant. Any electronic notice will comply with the
regulations of the U.S. Department of Labor. In the event that the Plan
Administrator confirms the denial of the application for benefits in whole or in
part, the notice will set forth, in a manner calculated to be understood by the
applicant, the following:
               (1) the specific reason or reasons for the denial;
               (2) references to the specific Plan provisions upon which the
denial is based;

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               (3) a statement that the applicant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to his or her claim; and
               (4) a statement of the applicant’s right to bring a civil action
under Section 502(a) of ERISA.
          (e) Rules and Procedures. The Plan Administrator will establish rules
and procedures, consistent with the Plan and with ERISA, as necessary and
appropriate in carrying out its responsibilities in reviewing benefit claims.
The Plan Administrator may require an applicant who wishes to submit additional
information in connection with an appeal from the denial of benefits to do so at
the applicant’s own expense.
          (f) Exhaustion of Remedies. No legal action for benefits under the
Plan may be brought until the applicant (i) has submitted a written application
for benefits in accordance with the procedures described by Section 9(a) above,
(ii) has been notified by the Plan Administrator that the application is denied,
(iii) has filed a written request for a review of the application in accordance
with the appeal procedure described in Section 9(c) above, and (iv) has been
notified that the Plan Administrator has denied the appeal. Notwithstanding the
foregoing, if the Plan Administrator does not respond to an applicant’s claim or
appeal within the relevant time limits specified in this Section 9, the
applicant may bring legal action for benefits under the Plan pursuant to Section
502(a) of ERISA.
Section 10. Basis Of Payments To And From Plan.
          The Plan shall be unfunded, and all benefits under the Plan shall be
paid only from the general assets of the Company. An Eligible Employee’s right
to receive payments under the Plan is no greater than that of the Company’s
unsecured general creditors. Therefore, if the Company were to become insolvent,
the Eligible Employee might not receive benefits under the Plan.
Section 11. Other Plan Information.
          (a) Employer and Plan Identification Numbers. The Employer
Identification Number assigned to the Company (which is the “Plan Sponsor” as
that term is used in ERISA) by the Internal Revenue Service is 91-1963165. The
Plan Number assigned to the Plan by the Plan Sponsor pursuant to the
instructions of the Internal Revenue Service is 510.
          (b) Ending Date for Plan’s Fiscal Year and Type of Plan. The date of
the end of the fiscal year for the purpose of maintaining the Plan’s records is
December 31. The Plan is a welfare benefit plan.
          (c) Agent for the Service of Legal Process. The agent for the service
of legal process with respect to the Plan is:
Blue Nile, Inc.
Attn: General Counsel
705 Fifth Avenue S., Suite 900
Seattle, WA 98104
          (d) Plan Sponsor and Administrator. The Plan Sponsor and the “Plan
Administrator” of the Plan is:

9

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Blue Nile, Inc.
Attn: General Counsel
705 Fifth Avenue S., Suite 900
Seattle, WA 98104
          The Plan Sponsor’s and Plan Administrator’s telephone number is
(206) 336-6700 and facsimile number is (206) 336-6809.
Section 12. Statement Of ERISA Rights.
          Participants in this Plan are entitled to certain rights and
protections under ERISA. If you are an Eligible Employee, you are considered a
participant in the Plan and, under ERISA, you are entitled to:
          (a) Receive Information About Your Plan and Benefits
               (1) Examine, without charge, at the Plan Administrator’s office
and at other specified locations, such as worksites, all documents governing the
Plan and a copy of the latest annual report (Form 5500 Series), if applicable,
filed by the Plan with the U.S. Department of Labor and available at the Public
Disclosure Room of the Employee Benefits Security Administration;
               (2) Obtain, upon written request to the Plan Administrator,
copies of documents governing the operation of the Plan and copies of the latest
annual report (Form 5500 Series), if applicable, and an updated (as necessary)
Summary Plan Description. The Administrator may make a reasonable charge for the
copies; and
               (3) Receive a summary of the Plan’s annual financial report, if
applicable. The Plan Administrator is required by law to furnish each
participant with a copy of this summary annual report.
          (b) Prudent Actions by Plan Fiduciaries. In addition to creating
rights for Plan participants, ERISA imposes duties upon the people who are
responsible for the operation of the employee benefit plan. The people who
operate the Plan, called “fiduciaries” of the Plan, have a duty to do so
prudently and in the interest of you and other Plan participants and
beneficiaries. No one, including your employer, your union or any other person,
may fire you or otherwise discriminate against you in any way to prevent you
from obtaining a Plan benefit or exercising your rights under ERISA.
          (c) Enforce Your Rights. If your claim for a Plan benefit is denied or
ignored, in whole or in part, you have a right to know why this was done, to
obtain copies of documents relating to the decision without charge, and to
appeal any denial, all within certain time schedules as set forth in detail in
Section 10 herein.
               Under ERISA, there are steps you can take to enforce the above
rights. For instance, if you request a copy of Plan documents or the latest
annual report from the Plan, if applicable, and do not receive them within
30 days, you may file suit in a Federal court and you are not required to follow
the claims procedure set forth in Section 10 herein. In such a case, the court
may require the Plan Administrator to provide the materials and pay you up to
$110 a day until you receive the materials, unless the materials were not sent
because of reasons beyond the control of the Plan Administrator.
               If you have completed the claims and appeals procedure described
in Section 10 and have a claim for benefits which is denied or ignored, in whole
or in part, you may file suit in a state or Federal court.

10

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               If you are discriminated against for asserting your rights, you
may seek assistance from the U.S. Department of Labor, or you may file suit in a
Federal court. The court will decide who should pay court costs and legal fees.
If you are successful, the court may order the person you have sued to pay these
costs and fees. If you lose, the court may order you to pay these costs and
fees, for example, if it finds your claim is frivolous.
          (d) Assistance with Your Questions. If you have any questions about
the Plan, you should contact the Plan Administrator. If you have any questions
about this statement or about your rights under ERISA, or if you need assistance
in obtaining documents from the Plan Administrator, you should contact the
nearest office of the Employee Benefits Security Administration, U.S. Department
of Labor, listed in your telephone directory or the Division of Technical
Assistance and Inquiries, Employee Benefits Security Administration, U.S.
Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You
may also obtain certain publications about your rights and responsibilities
under ERISA by calling the publications hotline of the Employee Benefits
Security Administration or accessing its website at http://www.dol.gov/ebsa/.
Section 13. GENERAL PROVISIONS.
          (a) Notices. Any notice, demand or request required or permitted to be
given by either the Company or an Eligible Employee pursuant to the terms of
this Plan shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, with postage prepaid, and addressed to
the parties, in the case of the Company, at the address set forth in Section
12(d) and, in the case of an Eligible Employee, at the address as set forth in
the Company’s employment file maintained for the Eligible Employee as previously
furnished by the Eligible Employee or such other address as a party may request
by notifying the other in writing.
          (b) Transfer and Assignment. The rights and obligations of an Eligible
Employee under this Plan may not be transferred or assigned without the prior
written consent of the Company. This Plan shall be binding upon any person who
is a successor by merger, acquisition, consolidation or otherwise to the
business formerly carried on by the Company without regard to whether or not
such person or entity actively assumes the obligations hereunder. Following a
Change of Control, any references to the “Company” in this Plan shall be deemed
to be references also to any successor to the company.
          (c) Waiver. Any party’s failure to enforce any provision or provisions
of this Plan shall not in any way be construed as a waiver of any such provision
or provisions, nor prevent any party from thereafter enforcing each and every
other provision of this Plan. The rights granted the parties herein are
cumulative and shall not constitute a waiver of any party’s right to assert all
other legal remedies available to it under the circumstances.
          (d) Severability. Should any provision of this Plan be declared or
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
          (e) Section Headings. Section headings in this Plan are included for
convenience of reference only and shall not be considered part of this Plan for
any other purpose.
Section 14. Circular 230 Disclaimer.
          THE FOLLOWING DISCLAIMER IS PROVIDED IN ACCORDANCE WITH THE INTERNAL
REVENUE SERVICE’S CIRCULAR 230 (21 CFR PART 10). ANY ADVICE IN THIS PLAN IS NOT
INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED BY YOU FOR THE PURPOSE OF
AVOIDING ANY PENALTIES THAT MAY BE IMPOSED ON YOU. ANY ADVICE IN THIS PLAN WAS
WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF PARTICIPATION IN THE COMPANY’S
CHANGE OF CONTROL SEVERANCE PLAN. YOU SHOULD SEEK ADVICE BASED ON YOUR
PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

11

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Section 15. Execution.
          To record the adoption of the Plan as set forth herein, effective as
of March 4, 2009, Blue Nile, Inc. has caused its duly authorized officer to
execute the same this 4th day of March, 2009.
Blue Nile, Inc.
By: /s/ Diane Irvine
Title: Chief Executive Officer

12

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For Employees Age 40 or Older
Individual Termination
Exhibit A
RELEASE AGREEMENT
     I understand and agree completely to the terms set forth in the Blue Nile,
Inc. Change of Control Severance Plan (the “Plan”).
     I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof. I am not relying on any promise or representation by the Company that is
not expressly stated therein. Certain capitalized terms used in this Release are
defined in the Plan.
     I hereby confirm my obligations under my Proprietary Agreement with the
Company.
     Except as otherwise set forth in this Release, I hereby generally and
completely release the Company and their current and former directors, officers,
employees, stockholders, shareholders, partners, agents, attorneys,
predecessors, successors, parent and subsidiary entities, insurers, affiliates,
and assigns (collectively, the “Released Parties”) from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are in
any way related to events, acts, conduct, or omissions occurring prior to my
signing this Agreement (collectively, the “Released Claims”). The Released
Claims include, but are not limited to: (1) all claims arising out of or in any
way related to my employment with the Company or its affiliates, or the
termination of that employment; (2) all claims related to my compensation or
benefits, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company or its affiliates; (3) all claims for
breach of contract, wrongful termination, and breach of the implied covenant of
good faith and fair dealing; (4) all tort claims, including claims for fraud,
defamation, emotional distress, and discharge in violation of public policy; and
(5) all federal, state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967 (as amended) (“ADEA”), the federal Employee Retirement
Income Security Act of 1974 (as amended), the Washington Law Against
Discrimination, the Washington Family Leave Act, as amended, the Washington
Minimum Wage Act, as amended, and Chapter 49.60 of the Revised Code of
Washington. Notwithstanding the foregoing, the following are not included in the
Released Claims (the “Excluded Claims”): (1) any rights or claims for
indemnification I may have pursuant to any written indemnification agreement
with the Company to which I am a party, the charter, bylaws, or operating
agreements of the Company, or under applicable law; or (2) any rights which are
not waivable as a matter of law. In addition, nothing in this Release prevents
me from filing, cooperating with, or participating in any proceeding before the
Equal Employment Opportunity Commission or the Department of Labor, except that
I hereby waive my right to any monetary benefits in connection with any such
claim, charge or proceeding. I hereby represent and warrant that, other than the
Excluded Claims, I am not aware of any claims I have or might have against any
of the Released Parties that are not included in the Released Claims.
     I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the ADEA. I also acknowledge that the consideration
given for the Released Claims is in addition to anything of value to which I was
already entitled. I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (a) the Released Claims do not apply to
any rights or claims that arise after the date I sign this Release; (b) I should
consult with an attorney prior to signing this Release (although I may choose
voluntarily not to do so); (c) I have twenty-one (21) days to consider this
Release (although I may choose to voluntarily to sign it sooner); (d) I have
seven (7) days following the date I sign this Release to revoke the Release by
providing written notice to an officer of the Company; and (e) the Release will
not be effective until the date upon which the revocation period has expired
unexercised, which will be the eighth day after I sign this Release (“Effective
Date”).
     I hereby represent that I have been paid all compensation owed and for all
hours worked, I have received all the leave and leave benefits and protections
for which I am eligible, and I have not suffered any on-the-job injury for which
I have not already filed a workers’ compensation claim.
1.

 

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For Employees Age 40 or Older
Individual Termination
     I acknowledge that to become effective, I must sign and return this Release
to the Company so that it is received not later than twenty-one (21) days
following the date it is provided to me, and I must not revoke it thereafter.

                  Employee    
 
           
 
  Name:        
 
           
 
           
 
  Date:        
 
           

2.

 

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For Employees Age 40 or Older
Group Termination
Exhibit B
RELEASE AGREEMENT
     I understand and agree completely to the terms set forth in the Blue Nile,
Inc. Change of Control Severance Plan (the “Plan”).
     I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof. I am not relying on any promise or representation by the Company that is
not expressly stated therein. Certain capitalized terms used in this Release are
defined in the Plan.
     I hereby confirm my obligations under my Proprietary Agreement with the
Company.
     Except as otherwise set forth in this Release, I hereby generally and
completely release the Company and their current and former directors, officers,
employees, stockholders, shareholders, partners, agents, attorneys,
predecessors, successors, parent and subsidiary entities, insurers, affiliates,
and assigns (collectively, the “Released Parties”) from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are in
any way related to events, acts, conduct, or omissions occurring prior to my
signing this Agreement (collectively, the “Released Claims”). The Released
Claims include, but are not limited to: (1) all claims arising out of or in any
way related to my employment with the Company or its affiliates, or the
termination of that employment; (2) all claims related to my compensation or
benefits, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company or its affiliates; (3) all claims for
breach of contract, wrongful termination, and breach of the implied covenant of
good faith and fair dealing; (4) all tort claims, including claims for fraud,
defamation, emotional distress, and discharge in violation of public policy; and
(5) all federal, state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967 (as amended) (“ADEA”), the federal Employee Retirement
Income Security Act of 1974 (as amended), the Washington Law Against
Discrimination, the Washington Family Leave Act, as amended, the Washington
Minimum Wage Act, as amended, and Chapter 49.60 of the Revised Code of
Washington. Notwithstanding the foregoing, the following are not included in the
Released Claims (the “Excluded Claims”): (1) any rights or claims for
indemnification I may have pursuant to any written indemnification agreement
with the Company to which I am a party, the charter, bylaws, or operating
agreements of the Company, or under applicable law; or (2) any rights which are
not waivable as a matter of law. In addition, nothing in this Release prevents
me from filing, cooperating with, or participating in any proceeding before the
Equal Employment Opportunity Commission or the Department of Labor, except that
I hereby waive my right to any monetary benefits in connection with any such
claim, charge or proceeding. I hereby represent and warrant that, other than the
Excluded Claims, I am not aware of any claims I have or might have against any
of the Released Parties that are not included in the Released Claims.
     I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the ADEA. I also acknowledge that the consideration
given for the Released Claims is in addition to anything of value to which I was
already entitled. I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (a) the Released Claims do not apply to
any rights or claims that arise after the date I sign this Release; (b) I should
consult with an attorney prior to signing this Release (although I may choose
voluntarily not to do so); (c) I have forty-five (45) days to consider this
Release (although I may choose to voluntarily to sign it sooner); (d) I have
seven (7) days following the date I sign this Release to revoke the Release by
providing written notice to an officer of the Company; and (e) the Release will
not be effective until the date upon which the revocation period has expired
unexercised, which will be the eighth day after I sign this Release (“Effective
Date”).
     I have received with this Release all of the information required by the
ADEA, including without limitation a detailed list of the job titles and ages of
all employees who were terminated in this group termination and the ages of all
employees of the Company in the same job classification or organizational unit
who were not terminated,
1.

 

--------------------------------------------------------------------------------

 

For Employees Age 40 or Older
Group Termination
along with information on the eligibility factors used to select employees for
the group termination and any time limits applicable to this group termination
program.
     I hereby represent that I have been paid all compensation owed and for all
hours worked, I have received all the leave and leave benefits and protections
for which I am eligible, and I have not suffered any on-the-job injury for which
I have not already filed a workers’ compensation claim.
     I acknowledge that to become effective, I must sign and return this Release
to the Company so that it is received not later than forty-five (45) days
following the date it is provided to me, and I must not revoke it thereafter.

                  Employee    
 
           
 
  Name:        
 
           
 
           
 
  Date:        
 
           

2.

--------------------------------------------------------------------------------

 

For Employees Under Age 40
Individual and Group Termination
Exhibit C
RELEASE AGREEMENT
     I understand and agree completely to the terms set forth in the Blue Nile,
Inc. Change of Control Severance Plan (the “Plan”).
     I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof. I am not relying on any promise or representation by the Company that is
not expressly stated therein. Certain capitalized terms used in this Release are
defined in the Plan.
     I hereby confirm my obligations under my Proprietary Agreement with the
Company.
     Except as otherwise set forth in this Release, I hereby generally and
completely release the Company and their current and former directors, officers,
employees, stockholders, shareholders, partners, agents, attorneys,
predecessors, successors, parent and subsidiary entities, insurers, affiliates,
and assigns (collectively, the “Released Parties”) from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are in
any way related to events, acts, conduct, or omissions occurring prior to my
signing this Agreement (collectively, the “Released Claims”). The Released
Claims include, but are not limited to: (1) all claims arising out of or in any
way related to my employment with the Company or its affiliates, or the
termination of that employment; (2) all claims related to my compensation or
benefits, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company or its affiliates; (3) all claims for
breach of contract, wrongful termination, and breach of the implied covenant of
good faith and fair dealing; (4) all tort claims, including claims for fraud,
defamation, emotional distress, and discharge in violation of public policy; and
(5) all federal, state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the Washington Law Against
Discrimination, the Washington Family Leave Act, as amended, the Washington
Minimum Wage Act, as amended, and Chapter 49.60 of the Revised Code of
Washington. Notwithstanding the foregoing, the following are not included in the
Released Claims (the “Excluded Claims”): (1) any rights or claims for
indemnification I may have pursuant to any written indemnification agreement
with the Company to which I am a party, the charter, bylaws, or operating
agreements of the Company, or under applicable law; or (2) any rights which are
not waivable as a matter of law. In addition, nothing in this Release prevents
me from filing, cooperating with, or participating in any proceeding before the
Equal Employment Opportunity Commission or the Department of Labor, except that
I hereby waive my right to any monetary benefits in connection with any such
claim, charge or proceeding. I hereby represent and warrant that, other than the
Excluded Claims, I am not aware of any claims I have or might have against any
of the Released Parties that are not included in the Released Claims.
     I hereby represent that I have been paid all compensation owed and for all
hours worked, I have received all the leave and leave benefits and protections
for which I am eligible, and I have not suffered any on-the-job injury for which
I have not already filed a workers’ compensation claim.
     I acknowledge that to become effective, I must sign and return this Release
to the Company so that it is received not later than fourteen (14) days
following the date it is provided to me.

                  Employee    
 
           
 
  Name:        
 
           
 
           
 
  Date:        
 
           

1.

 

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Exhibit D
Blue Nile, Inc.
Change of Control Severance Plan
Participation Notice
You,                     , have been designated as an Eligible Employees under
the Blue Nile, Inc. Change of Control Severance Plan (the “Plan”). You are
eligible for the following severance benefits upon a Qualifying Termination,
subject to the terms and conditions of the Plan:
1. Severance Benefits.
     o Cash Severance. The Company shall make a lump sum payment of “Cash
Severance” to the Eligible Employee in an amount equal to [___] x (Base Salary +
Target Bonus). The Cash Severance will be paid in a lump sum on the 60th day
after the date of the separation from service.
     o COBRA Premium Benefit. If the Eligible Employee was enrolled in a group
health plan (i.e., medical, dental, or vision plan) sponsored by the Company or
an affiliate of the Company immediately prior to the Qualifying Termination, the
Eligible Employee may be eligible to continue coverage under such group health
plan (or to convert to an individual policy) at the time of the Eligible
Employee’s termination of employment under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (together with any state law of similar effect,
“COBRA”). The Company will notify the Eligible Employee of any such right to
continue such coverage at the time of termination pursuant to COBRA. No
provision of this Plan will affect the continuation coverage rules under COBRA,
except that the Company’s payment, if any, of applicable insurance premiums, or
waiver of any cost of coverage under any self-funded group health plan, will be
credited as payment by the Eligible Employee for purposes of the Eligible
Employee’s payment required under COBRA. Therefore, the period during which an
Eligible Employee may elect to continue the Company’s or its affiliate’s group
health plan coverage at his or her own expense under COBRA, the length of time
during which COBRA coverage will be made available to the Eligible Employee, and
all other rights and obligations of the Eligible Employee under COBRA (except
the obligation to pay insurance premiums that the Company pays, if any, or, with
respect to a self-funded plan, any obligation to pay the cost of coverage to the
Company that the Company waives, if any) will be applied in the same manner that
such rules would apply in the absence of this Plan.
If an Eligible Employee timely elects continued coverage under COBRA, the
Company shall pay the full amount of the Eligible Employee’s COBRA premiums, or
shall provide coverage under any self-funded plan, on behalf of the Eligible
Employee for the Eligible Employee’s continued coverage under the Company’s
group health plans, including coverage for the Eligible Employee’s eligible
dependents, for up to [___] months following the Eligible Employee’s Qualifying
Termination; provided, however, that no such premium payments shall be made, and
no coverage shall be provided under any self-funded group health plan, following
the date on which the Eligible Employee and his eligible dependents cease (or
would cease) to be eligible for continued coverage under COBRA. Each Eligible
Employee shall be required to notify the Company immediately if the Eligible
Employee becomes covered by a group health plan of a subsequent employer. Upon
the conclusion of such period of insurance premium payments made by the Company,
or the provision of coverage under a self-funded group health plan, the Eligible
Employee will be responsible for the timely payment of the full amount of
premiums (or payment for the cost of coverage) required under COBRA for the
duration of the COBRA period. For purposes of this Section 1(b), any applicable
insurance premiums that are paid by the Company shall not include any amounts
payable by the Eligible Employee under an Internal Revenue Code Section 125
health care reimbursement plan, which amounts, if any, are the sole
responsibility of the Eligible Employee.
     o Accelerated Vesting. The vesting and exercisability of all
then-outstanding compensatory equity awards held by the Eligible Employee shall
be accelerated such that the awards are fully vested and exercisable as of the
date of the Qualifying Termination.
     2. Timing of Payments: Notwithstanding the payment schedules set forth
above, no benefits will be paid prior to the effective date of the Release.
Instead, on the first regular payroll pay day following the effective date of
the Release, the Company will pay the Eligible Employee the benefits the
Eligible Employee would otherwise have received on or prior to such date
pursuant to the original schedule but for the delay in payment related to the
effectiveness of the Release,
1.

 

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with the balance of the benefits being paid as originally scheduled. With
respect to COBRA payments, Executive may be required to pay the COBRA premiums
directly until the Release is effective, and the Company will reimburse the
Executive on the first regular payroll pay date following the effective date of
the Release.
     3. Definitions: The following definitions shall apply for purposes of this
Appendix A:
“Base Salary” shall mean the greater of the Eligible Employee’s base salary in
effect immediately prior to (i) the Change of Control or (ii) the date of the
Qualifying Termination. Base Salary does not include variable forms of
compensation such as bonuses, incentive compensation, commissions, expenses or
expense allowances.

  o   “Target Bonus” shall mean the target annual incentive bonus, expressed in
dollars, which the Eligible Employee is eligible to earn in the fiscal year in
which (A) the Change of Control occurs or (B) the Qualifying Termination occurs,
whichever of (A) or (B) is greater.

     The foregoing severance benefits are subject to all of the terms and
conditions of the Plan, including reduction against any other severance owed to
the Eligible Employee.
I accept my designation as an Eligible Employee and agree to be bound by the
terms and conditions of the Plan.

     
 
Signature
   
 
   
 
Print Name
   

2.