EXHIBIT 10.53
RedEnvelope, Inc.
ANNUAL BONUS PLAN
I. INTRODUCTION

  A.   THE OBJECTIVE OF THE ANNUAL INCENTIVE PLAN is to financially reward
employees for their contributions to the success and profitability of
RedEnvelope, Inc.     B.   PARTICIPANTS: This plan applies to RedEnvelope, Inc.
full-time and part-time employees who 1.) began work on or before the first day
of the Company’s fourth fiscal quarter, 2.) are employed on the day bonuses are
paid, and 3.) are not enrolled in any other bonus, sales, or incentive plan.    
C.   CHANGES IN PLAN: The Company reserves the right to modify the Annual Bonus
Plan in total or in part, at any time. Any such change must be in writing and
approved by the Compensation Committee of the Board of Directors. The
Compensation Committee or plan designers reserve the right to interpret the plan
document as needed.     D.   ENTIRE AGREEMENT: This Plan is the entire agreement
between RedEnvelope, Inc. and the employee regarding the subject matter of this
Plan and supersedes all prior compensation or incentive plans or any written or
verbal representations regarding the subject matter of this Plan.

II. BONUS PLAN ELEMENTS

  A.   ELIGIBLE EARNINGS are defined as base wages or salary payments, overtime,
shift differentials, and payments made for time off. Eligible earnings do not
include moving or relocation allowances, educational reimbursements, or other
bonuses or commissions. The eligible earnings received during the fiscal year
represent the basis for the bonus calculation.     B.   BONUS TARGET is a
percentage level of eligible earnings determined by each participant’s position.
    C.   COMPANY PERFORMANCE FACTOR is based on the Company achieving an
established a net income target. The net income target must be achieved for any
bonus to be paid. The Board of Directors will approve the applicable target for
each fiscal year within the first 90 days of each fiscal year.     D.  
INDIVIDUAL PERFORMANCE FACTOR is based on the manager’s evaluation of the
participant’s performance and contribution for the fiscal year. This factor may
range from 25% to 175% of an individual’s target bonus. The assigned factor may
also be a zero resulting in no bonus based on the manager’s evaluation of
performance and contribution.     E.   BONUS FORMULA AND CALCULATION EXAMPLE:
Assume participant with eligible earnings of $50,000 at the 5% target level,
individual performance factor of 115%, and Company performance of 100% of
target.

SAMPLE CALCULATION:

                                                      Individual     Eligible
Earnings   Target Incentive   Company Achievement   Performance   Annual Bonus
Amount
$50,000 X
    5% X       100% X       115% =     $ 2,875.00  

In this example, the total bonus equals 5.75% of eligible earnings.

  F.   BONUS PAYMENTS: Bonuses will be paid as soon as practicable after the
Company announces its financial results for the fiscal year, which generally
occurs in May. All bonus payments will be made net of applicable withholding
taxes.     G.   TRANSFERS: Employees who are participants in the Plan and who
transfer to a new position not governed by this Plan will be eligible on a
pro-rata basis for the applicable period and paid as defined by the Plan. Any
exceptions to the Plan must be designated in writing and approved by the Chief
Executive Officer.     H.   EMPLOYMENT AT WILL: The employment of all Plan
participants at RedEnvelope is for an indefinite period of time and is
terminable at any time by either party, with or without cause being shown or
advance notice by either party. This Plan shall not be construed to create a
contract of employment for a specified period of time between RedEnvelope, Inc.
and any Plan participant.