Exhibit 10.2
Blue Nile, Inc.
Compensation Program for Non-Employee Directors (the “2012 Program”)
Effective Date: April 30, 2012
Annual Cash Compensation
Retainer: $40,000 (may elect to receive stock in lieu of cash)
Committee Fee: $3,000
Audit Committee Chair Fee: $10,000                
Compensation Committee Chair Fee: $5,000
Nominating and Corporate Governance Committee Fee: $5,000
Non-Employee Chair Fee: $100,000

Retainer. The $40,000 retainer (the “Retainer”) is earned in quarterly
installments, with each quarterly installment of the Retainer becoming fully
vested and payable on the date of the first regular Board meeting of that
quarter, subject to continued service on the Board as of such date. In lieu of
cash, and prior to the start of each fiscal year, a director may elect to
receive 100% of the Retainer for that next fiscal year as four quarterly fully
vested stock awards under our 2004 Equity Incentive Plan (the “EIP”), with each
award covering a number of shares that have a Fair Market Value (as defined in
the EIP) on the date of grant equal to $10,000. The stock award is granted on
the third trading day following our quarterly public announcement of our
financial earnings, subject to continued service through such date.

Committee Fee. A single $3,000 committee fee is earned in quarterly
installments, each quarterly installment of such fee becoming fully vested and
payable on the date of the first regular Board meeting of that quarter, subject
to continued service on the Board as of such date, to each non-employee director
who serves on one or more committees in that quarter.

Committee Chair Fees. Due to the time commitment involved in serving as a chair
of a committee, in addition to the $3,000 committee fee, each committee chair
receives an additional fee that is earned in quarterly installments, with each
quarterly installment of such fee becoming fully vested and payable on the date
of the first regular Board meeting of that quarter, subject to continued service
on the Board as of such date. The Audit Committee Chair fee is $10,000 annually,
and the Compensation Committee Chair fee and the Nominating and Corporate
Governance Committee Chair fee are each $5,000 annually.

Non Employee Board Chair Fee. Due to the time commitment involved in serving as
the non-employee Chairman of the Board, the non-employee Chairman of the Board
receives an additional $100,000 fee annually, and such fee is earned in
quarterly installments, with each quarterly installment of such fee becoming
fully vested and payable on the date of the first regular Board meeting of that
quarter, subject to continued service on the Board as of such date.

Prorated Payments for New Directors: Each non-employee director who is elected
or appointed after the start of the fiscal year will earn and be paid quarterly
amounts of the Retainer and applicable committee or Chairman fees for each
quarter in which he or she attends at least one regular Board meeting, with such
amount(s) paid on the date of the first such meeting such Director attends in
that quarter. No payments will be made for quarters prior to the first day of
service.

Equity Compensation
Annual Equity Grant: an award with a value of $63,000
Annual Non-Employee Board Chair Grant: an award with a value of $100,000
Initial Option Grant: 11,250 shares One Time Stock Option Grant Upon Full
Vesting of Initial Option Grant: 9,000 shares

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Annual Equity Grant. Each non-employee director will be granted an annual equity
grant for a number of shares having a value equal to $63,000 on the first
trading day following the first regular Annual Meeting of stockholders for that
year. The annual grant vests every three (3) months from the date of the grant
for one year. These grants cease vesting as of the date a non-employee director
no longer serves on the Board of Directors.

Each Non-Employee Director must elect, prior to the start of the fiscal year in
which the Annual Meeting is to take place, to receive the Annual Equity Grant in
the form of either (i) 100% as RSUs or (ii) 100% as Options. In the absence of a
timely election, the Annual Stock Retainer will be granted as 100% Options. The
number of shares subject to the RSUs will be equal to the value of the Annual
Stock Retainer divided by the Fair Market Value as of the grant date. The number
of shares subject to the Options will be equal to the number of shares having a
grant date fair value equal to the value of the Annual Stock Retainer, as
calculated in accordance with Topic 718 of the Financial Accounting Standards
Board Accounting Standards Codification.

Annual Non-Employee Board Chair Grant. The non-employee Chairman of the Board
will be granted an annual equity grant for a number of shares having a value
equal to $100,000 on the first trading day following the first regular Annual
Meeting of stockholders for that year. The annual grant vests every three (3)
months from the date of the grant for one year and ceases vesting as of the date
a non-employee director no longer serves on the Board of Directors.

The non-employee Chairman of the Board must elect, prior to the start of the
fiscal year in which the Annual Meeting is to take place, to receive this grant
in the form of either (i) 100% as RSUs or (ii) 100% as Options. In the absence
of a timely election, this grant will be granted as 100% Options. The number of
shares subject to the RSUs will be equal to the value of the Annual Stock
Retainer divided by the Fair Market Value as of the grant date. The number of
shares subject to the Options will be equal to the number of shares having a
grant date fair value equal to the value of the Annual Stock Retainer, as
calculated in accordance with Topic 718 of the Financial Accounting Standards
Board Accounting Standards Codification.

Initial Option Grant. Each director will be granted, on the date of his or her
election or appointment, an initial stock option covering 11,250 shares. This
initial grant vests monthly from his or her election or appointment date, with
respect to 1/30th of the shares subject to the grant for the first 12 months
following the date of grant and 1/60th of the shares subject to the grant for
the subsequent 36 months. These option grants cease vesting as of the date a
non-employee director no longer serves on the Board of Directors.

One Time Stock Option Grant Upon Full Vesting of Initial Option Grant. On the
fourth anniversary of the grant of an initial stock option grant, such
non-employee director will be granted a new stock option covering 9,000 shares.
This grant vests monthly from the date of the grant for four years. These
options cease vesting as of the date a non-employee director no longer serves on
our Board of Directors.

Additional Terms and Conditions

Election Timing: Solely with respect to grants made in 2012 on or after the
Effective Date of the 2012 Program by individuals who are directors as of the
Effective Date, all elections as to the form of the Equity Compensation piece of
the annual compensation (that is, as to Options or RSUs) must be made on or
before May 17, 2012, that is the day prior to the first regular Annual Meeting
of stockholders in 2012 and the election made by each director in November 2011
as to the form of the cash Retainer will control the form of payment for
quarterly Retainer installments that become vested and payable after the
Effective Date of the 2012 Program (that is, as to cash or fully vested stock
awards). For individuals who become non-employee directors on or after May 17,
2012, such election must be made on or before the date he or she is appointed or
elected as a non-employee director.
All options will be granted with an exercise price equal to the Fair Market
Value of the Common Stock on the date of grant, will have a 10 year term and a
general post-termination exercise period of 12 months, subject to earlier
termination or extension as provided in the EIP and the Applicable Award
Agreement.The vesting of the equity awards granted to non-employee directors
under this 2012 Program will become fully vested as of the earlier to occur of:
(x) the date of

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the Non-Employee Director's termination of service due to death or Disability
and (y) immediately prior to a Change in Control (subject to continued service
as of such time). The unvested portions of any RSUs or Options are forfeited
upon any other termination.
Section 409A: Notwithstanding anything to the contrary in this 2012 Program, if
a Director is deemed by the Company at the time of such director's Separation
from Service to be a “specified employee” for purposes of Code Section
409A(a)(2)(B)(i), and if any of the payments upon Separation from Service set
forth herein and/or under any other agreement with the Company are deemed to be
“deferred compensation,” then to the extent delayed commencement of any portion
of such payments is required to avoid a prohibited distribution under Code
Section 409A(a)(2)(B)(i) and the related adverse taxation under Code Section
409A, such payments shall not be provided to such Director prior to the earliest
of (i) the date that is six months and one day after the date of such Director's
Separation from Service, (ii) the date of the Director's death, or (iii) such
earlier date as permitted under Code Section 409A without the imposition of
adverse taxation. On the first business day following the expiration of such
applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant
to this paragraph shall be paid in a lump sum to the Director, and any remaining
payments due shall be paid as otherwise provided herein or in the applicable
agreement.
Capitalized Terms: Capitalized terms that are not defined herein will have the
meaning set forth in the EIP, and, if not defined therein, in the Applicable
Award Agreement.
Forms of Award Agreement: On or before May 16, 2012, the General Counsel of the
Company will make such clarifying changes to the form of stock option agreement
and restricted stock unit award agreement as are necessary to conform such forms
for use under this 2012 Program.

DEADLINE FOR ELECTIONS
Elections for the Annual Equity Grant must be made on the 2012 Election Form.
This 2012 Election Form must be submitted by May 16, 2012. Once the Election
Form is submitted, the elections made are irrevocable. Non-Employee Directors
will receive a new Election Form in late 2012 in order to make an election for
the Annual Board Retainer to be earned for service from and after the 2013
Meeting.
To ensure compliance with Internal Revenue Service Circular 230, you are hereby
notified that any discussion of tax matters set forth in this notice was written
in connection with the promotion or marketing of the transactions or matters
addressed herein and was not intended or written to be used, and cannot be used
by you, for the purpose of avoiding tax-related penalties under federal, state
or local tax law. You should seek advice based on your particular circumstances
from an independent tax advisor.