EXHIBIT 10.12
  
  Company
 1.
    
    Position. You will become the Senior Vice President of Technology for the
Company. As such, you will have responsibilities as determined by me.2.
    
    Base Salary. You will be paid a monthly salary of $19,166.67 less payroll
deductions and all required withholdings, which represents an annualized rate of $230,000.
Your wage will be payable in accordance with the Companys standard payroll policies.
The Company may modify your compensation from time to time as it deems necessary.3.
    
    Performance Bonus. You will be paid an annual performance bonus with an
annualized target payout of $60,000. 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.4.
    
    Stock Options. We will recommend to the Board of Directors or Subcommittee
thereof, that you be granted a non statutory stock option to purchase 27,500 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 National Market on the
last market trading day prior to the date of grant. One fourth (1/4) of the shares
subject to such option will vest on the first year 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s 2004 Equity
Incentive Plan, the Grant Notice and the Stock Option Agreement shall govern the terms of
this option grant in all respects.5.
    
    Benefits. You will be eligible to receive healthcare and dental benefits,
life and disability insurance, transportation allowance, and a 401(k) plan effective on
the first of the month following your date of hire. The Company may modify your benefits
from time to time as it deems necessary.6.
    
    Employee Discount Program. An exception to our standard policy of offering
favorable retail pricing is a discount that is granted to our employees. You will be
eligible for Blue Niles Employee Discount Program, which offers a special benefit in the
form of a significant discount on Blue Nile products.7.
    
    Standard Employee Agreement. As a condition to your employment, you are
required to sign and comply with the Companys standard Employee Nondisclosure,
Proprietary Information, Inventions, Nonsolicitation and Noncompetition Agreement relating
to the protection of the Companys proprietary and confidential information and assignment
of inventions. In addition, you will be required to abide by the Companys strict policy
that prohibits any new employee from using or bringing with him or her from any previous
employer any confidential information, trade secrets, or proprietary materials or
processes of such former employer.8.
    
    Employee Handbook. As a Company employee, you will be expected to abide by
the Company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s Employee Handbook and
that you understand the Companys policies set forth in the Companys Employee Handbook.9.
    
    Federal Immigration Law. 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) business days of your date of hire, or our employment relationship
with you may be terminated.




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10.
    
    At-Will Employment. 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 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.11.
    
    Entire Agreement. This 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.12.
    
    Start Date. To be determined.