Document:

exv10w1

 

Exhibit 10.1

AGREEMENT

     This Agreement (the “Agreement”) is entered into this 13th day of July, 2005, by and
between RedEnvelope, Inc., a Delaware corporation (“RedEnvelope” or the “Company”), on the
one hand, and Scott Galloway, on behalf of himself, R. Ian Chaplin, Martin McClanan, Michael L.
Meyer, Firebrand Partners, LLC, a Delaware limited liability company, Glenn J. Krevlin, Krevlin
Advisors, LLC, a Delaware limited liability company, GJK Capital Management, LLC, a Delaware
limited liability company, Glenhill Capital LP, a Delaware limited partnership, Glenhill Capital
Overseas GP, Ltd., a Cayman Islands exempted company and Glenhill Capital Overseas Master Fund,
L.P., a Cayman Islands exempted limited partnership (collectively, the “Galloway/Krevlin
Group”), on the other hand.

RECITALS

     A. On May 12, 2005, Scott Galloway filed, on behalf of himself, R. Ian Chaplin, Martin
McClanan and Michael L. Meyer (the “Galloway Group”) Amendment No. 3 to the Schedule 13D
initially filed by and on behalf of the Galloway Group on June 30, 2004 (the “Schedule
13D”), indicating that the Galloway Group may consider, among other alternatives, soliciting
authority from RedEnvelope stockholders to elect an alternative slate of nominees for election as
RedEnvelope directors at RedEnvelope’s upcoming 2005 annual meeting of stockholders (the “2005
Stockholder Meeting”).

     B. In a letter dated May 27, 2005, Mr. Galloway provided notice to RedEnvelope, pursuant to
Section 2.5 of the RedEnvelope Bylaws, to nominate himself, Robert M. Perkowitz, John Pound and
Gregory Shove (the “Galloway Candidates”) for election as RedEnvelope directors at the 2005
Stockholder Meeting.

     C. On May 31, 2005, Mr. Galloway filed, on behalf of the Galloway/Krevlin Group, Amendment No.
4 to the Schedule 13D, which included additional members to the group on whose behalf the Schedule
13D was filed and which stated that Mr. Galloway had expressed to the RedEnvelope Board of
Directors (the “Board”) his hope that the RedEnvelope nominating committee would review and
select the Galloway Candidates as Board nominees to be presented to the RedEnvelope stockholders.
Amendment No. 4 to the Schedule 13D then stated the Galloway/Krevlin Group’s intention to consider
a number of alternatives in the event that it is unsuccessful in convincing the RedEnvelope
nominating committee or Board to accept the Galloway Candidates or effect other governance changes,
including soliciting authority from the RedEnvelope stockholders to elect the Galloway Candidates
to the RedEnvelope Board at the 2005 Stockholder Meeting.

     D. On June 14, 2005 and June 17, 2005, the Galloway/Krevlin Group filed Amendments No. 5 and
No. 6, respectively, to the Schedule 13D.

 

 

     E. In a letter dated July 5, 2005, Mr. Galloway made written demand pursuant to Section 220 of
the Delaware General Corporation Law to inspect certain records and lists of RedEnvelope
stockholders and certain other documents (the “Demand Letter”).

     F. Following a rigorous review process that involved careful consideration and evaluation of,
and interviews with, numerous prospective director candidates over the course of the past year, the
RedEnvelope nominating committee has identified three new director candidates, willing and able to
serve on the Board, that the Board (including its nominating committee) deems to be qualified and
suitable to serve on the Board, including one candidate who initially was recommended to the
Board’s nominating committee by the Galloway/Krevlin Group (and who is one of the Galloway
Candidates) and two other candidates acceptable to the Galloway/Krevlin Group, and that the Board
will present to the RedEnvelope stockholders such three candidates as nominees for election to the
Board at the 2005 Stockholder Meeting.

     G. The parties desire to set forth certain covenants and agreements relating to the matters
set forth above, and to resolve amicably their current disputes regarding the individuals to be
presented to the RedEnvelope stockholders as nominees for election to the Board without the burden,
distraction or expense of a proxy contest.

     NOW, THEREFORE, in consideration for the covenants and other agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

AGREEMENT

     1. Covenants of RedEnvelope. RedEnvelope covenants and agrees that, in reliance on
the covenants and agreements of Scott Galloway and the Galloway/Krevlin Group set forth in Section
2 below:

     (a) the Board (including its nominating committee) will nominate, present and recommend for
election to the RedEnvelope stockholders at the 2005 Stockholder Meeting a slate of up to nine (9)
director candidates that includes Greggory Hammond, Brett Hendrickson and John Pound (these three
persons herein referred to as the “New Candidates”), subject to any decision one or more of
such individuals may make not to stand for election (although RedEnvelope currently is not aware of
any such decision not to so stand);

     (b) its Board will appoint at least one of the New Candidates, if elected, to serve on its
Nominating/Corporate Governance Committee, which committee has expanded its charter to include
corporate governance functions and that such committee is charged with, among other things, the
responsibility to, at least annually, review the performance of the Company’s Chief Executive
Officer; and

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     (c) on or before July 15, 2005, it will issue or cause to be issued a press release announcing
the slate of directors, including the New Candidates, that the Board intends to present to the
RedEnvelope stockholders for election at the 2005 Stockholder Meeting. RedEnvelope shall give the
Galloway/Krevlin Group a reasonable opportunity to review and comment on this press release before
its issuance.

     2. Covenants of Scott Galloway and the Galloway/Krevlin Group. Scott Galloway, on
behalf of himself and the other members of the Galloway/Krevlin Group, covenants and agrees that,
in reliance on the covenants and agreements of RedEnvelope set forth in Section 1 above:

     (a) they will not solicit authority, directly or indirectly, from any RedEnvelope stockholder
to elect or vote for any candidate or candidates for election to the Board at the 2005 Stockholder
Meeting other than the candidates nominated by the Board and its nominating committee (the
“Board Nominees”) or otherwise present for consideration to any RedEnvelope stockholder in
connection with the 2005 Stockholder Meeting any candidates other than the Board Nominees, nor will
they engage in any campaign or efforts to have votes withheld from or otherwise discredit any of
the Board Nominees in connection with the 2005 Stockholder Meeting or cause any other party to do,
or assist any other party in doing, any of the foregoing;

     (b) on or before July 13, 2005, they will amend or cause to be amended the Schedule 13D to
indicate that they no longer intend to solicit authority to elect candidates to the Board at the
2005 Stockholder Meeting in light of reaching an agreement with the Company to nominate three
mutually acceptable candidates (who shall not be named in such amendment) for election to the
Company’s Board at such meeting, one of whom will be appointed to sit on the Company’s
Nominating/Corporate Governance Committee, which is charged with, among other things, at least
annually reviewing the performance of the Company’s Chief Executive Officer. (The Galloway/Krevlin
Group shall give RedEnvelope a reasonable opportunity to review and comment on this amendment
before it is filed.); and

     (c) immediately following the Company’s public announcement of the New Candidates in
accordance with this Agreement, Galloway shall rescind notice of his intention to nominate the
Galloway Candidates at the 2005 Stockholder Meeting and agree that the Galloway/Krevlin Group will
not propose or seek to propose any director candidates or any other matters to come before the
stockholders at the 2005 Stockholder Meeting. For purposes of clarity, the demand to inspect
certain records and lists of RedEnvelope stockholders and certain other documents as set forth in
the Demand Letter is hereby rescinded.

     3. No Assurances. No party to this Agreement provides any quarantees or assurances
that each of the Board Nominees will be elected by the stockholders, will

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agree to serve, or will actually serve, a full term if elected and no party makes any
representation or warranty as to the fitness of any Board Nominee to serve on the Board.

     4. General.

          (a) RedEnvelope represents that the individual set forth below as signatory to this Agreement
for RedEnvelope has the authority to execute this Agreement on behalf of RedEnvelope and to bind
RedEnvelope to the terms hereof. Scott Galloway represents that the he has the authority to
execute the Agreement on behalf of himself and the other members of the Galloway/Krevlin Group to
bind each of them to the terms hereof.

          (b) This Agreement shall be governed by the laws of the State of Delaware, without regard to
the conflicts of law provisions thereof.

          (c) This Agreement may be executed in two or more counterparts, each of which shall be deemed
an original and all of which together shall constitute one instrument.

          (d) The terms and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the Parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.

          (e) If one or more provisions of this Agreement are held to be unenforceable under applicable
law, the parties agree to renegotiate such provision(s) in good faith so as to become enforceable
while hewing as closely as possible to the original intent. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision(s), then (i) such
provision shall be excluded from this Agreement, (ii) the balance of this Agreement shall be
interpreted as if such provision were so excluded and (iii) the balance of this Agreement shall
remain enforceable in accordance with its terms.

          (f) Each party acknowledges that its breach of this Agreement would cause irreparable injury
to the other for which monetary damages would not be an adequate remedy. Accordingly, a party will
be entitled to injunctions and other equitable remedies in the event of such a breach by the other
Party (or any of its members).

          (g) This Agreement constitutes the entire agreement between the parties hereto pertaining to
the subject matter hereof, and any and all other written or oral agreements existing between the
parties with respect to the subject matter hereof are expressly canceled.

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     In Witness Whereof, the Parties have caused this Agreement to be executed and delivered
by themselves or their duly authorized officer or attorney-in-fact as of the date first set forth
above.

	 	 	 	 	 
	 

	 	REDENVELOPE, INC.	 	 
	 
	 	 	 	 
	 

	 	/s/ Alison L. May	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Print Name: Alison L. May	 	 
	 
	 	 	 	 
	 

	 	Title: President and CEO	 	 
	 
	 	 	 	 
	 

	 	SCOTT GALLOWAY on behalf of himself and the
other members of the Galloway/Krevlin Group	 	 
	 
	 	 	 	 
	 

	 	/s/ Scott Galloway	 	 
	 

	 	 	 	 
	 

	 	Scott Galloway	 	 
	 
	 	 	 	 
	 

	 	Firebrand Partners, LLC	 	 
	 
	 	 	 	 
	 

	 	/s/ Scott Galloway	 	 
	 

	 	 	 	 
	 

	 	Scott Galloway, Manager	 	 

5exv4w2

 

Exhibit 4.2

THE CRONOS GROUP

2005 EQUITY INCENTIVE PLAN

RESTRICTED STOCK

AWARD AGREEMENT

          Unless otherwise defined herein, the terms defined in The Cronos Group 2005 Equity Incentive
Plan (the “Plan”) shall have the same defined meanings in this Award Agreement
(“Award”).

     I. NOTICE OF GRANT

                                                  

                                                  

                                                  

          Name and Address of Participant

          You have been granted restricted stock, par value $2.00 per share, of The Cronos Group (the
“Company”) subject to the terms and conditions of the Plan and this Award, as follows:

          Date of Grant:                                         

          Total Number of Shares of Restricted Stock Granted: 1,500

          (“Restricted Stock”)

          Vesting Schedule/Lapse of Restrictions.

          (a) Conditional on the Participant’s continued service on the Board of Directors
(“Board”) of the Company, this award shall vest in full on the business day preceding the
next annual meeting of shareholders of the Company at which the term of the Participant as a
director of the Company is to expire (notwithstanding whether such Participant is nominated for
re-election or elected at such annual meeting), unless vesting is accelerated as set forth in
subsection (b) below.

          (b) Notwithstanding the provisions of subsection (a) above, the Restricted Stock granted by
this Award shall fully vest upon the termination of Participant’s service on the Board by reason of
death, Disability or by the Company for reasons other than Cause. If a Participant’s service on
the Board terminates for any reason other than as aforesaid, then any unvested portion of the
Restricted Stock granted by this Award shall be forfeited to the Company, and the Participant shall
have no further right or interest therein.

          (c) The Compensation Committee of the Company (the “Committee”), in its sole
discretion, may accelerate or waive the restrictions on the Restricted Stock

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granted by this Award, in whole or in part, based on service, performance or such other
factors and criteria as the Committee may determine in its sole discretion.

II. AGREEMENT

          1. Stock Certificates.

          (a) The stock certificates evidencing the Restricted Stock awarded hereunder shall be
delivered to and held in custody by the Company, or its designee, until the restrictions thereon
shall have lapsed or any conditions to the vesting of this award have been satisfied. As a
condition to the issuance of the Restricted Stock granted by this Award, the Participant shall
deliver to the Company a Stock Power in the form annexed hereto as Exhibit A duly endorsed
in blank.

          (b) Unless otherwise determined by the Committee, any certificate issued in respect of the
Restricted Stock shall bear the following legend:

“This certificate and the shares of stock represented hereby are subject to the terms and
conditions, including forfeiture provisions and restrictions against transfer, contained in
The Cronos Group’s 2005 Equity Incentive Plan and an agreement entered into between the
registered owner and The Cronos Group. Any attempt to dispose of these shares in
contravention of the applicable restrictions, including by way of sale, assignment,
transfer, pledge, hypothecation or otherwise, shall be null, void and without effect.”

          2. Dividends and Voting Rights. Cash dividends on the Restricted Stock shall only be paid on
Restricted Stock that has vested, and the Participant shall not have the right to vote with respect
to the Restricted Stock until such shares have vested. Stock dividends issued with respect to
Restricted Stock shall be treated as additional shares of Restricted Stock that are subject to the
same restrictions and other terms and conditions that apply to the shares with respect to which
such dividends are issued.

          3. Non-Transferability of Restricted Stock. Subject to the Committee’s discretion under the
Plan to waive such restrictions, the Restricted Stock shall not be sold, transferred, pledged,
assigned or otherwise encumbered until vested. The terms of the Plan and this Award shall be
binding upon the executors, administrators, heirs, successors and assigns of the Participant.

          4. Tax Consequences.

          (a) Participant hereby acknowledges that Participant has: (i) received and read the Company’s
Prospectus, dated July 15, 2005, “The Cronos Group, 2005 Equity Incentive Plan,” including the
summary of the tax consequences of the award of the Restricted Stock, and (ii) been advised to
consult his or her tax adviser with respect to this award of Restricted Stock.

          (b) The Participant shall pay to the Company promptly upon request, and in any event at the
time the Participant recognizes taxable income in respect of the

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Restricted Stock, an amount equal to the taxes the Company determines it is required to
withhold under applicable tax laws with respect to the Restricted Stock. Such payment shall be
made in the form of cash or Stock, including unrestricted Stock owned by the Participant or
Restricted Stock that is granted by this Award; provided that any election by a Participant to settle
such tax withholding obligation with Stock owned by the Participant shall be subject to prior
approval by the Committee, in its sole discretion.

          (c) The Participant shall promptly notify the Company of any election made pursuant to Section
83(b) of the Code and shall provide the Company with a copy of such election. The Participant
shall be solely responsible for properly and timely completing and filing such election.

          5. Entire Agreement.

          (a) The Plan is incorporated herein by reference. The Plan and this Award constitute the
entire agreement of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Participant with respect to
the subject matter hereof, and may not be modified adversely to the Participant’s interest except
by means of a writing signed by the Company and Participant.

          (b) By Participant’s signature and the signature of the Company’s representative below, the
Participant and the Company agree that the Restricted Stock is granted under and governed by the
terms and conditions of the Plan and this Award. Participant has reviewed the Plan and this Award
in their entirety, and has had an opportunity to obtain the advice of counsel prior to executing
this Award. Participant hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any question relating to the Plan and this Award. Participant
further agrees to notify the Company upon any change in the residence address indicated above.

          6. Right to Employment or Service on Board. Neither the Plan nor this Award shall confer on
any Participant any right to be retained, in any position, as a director, employee, or consultant
of the Company.

          7. Severability. The provisions of this Award are severable and if any one or more provisions
are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining
provisions shall nevertheless be binding and enforceable.

          8. Award Subject to Plan. This Award is subject to the Plan, as approved by the shareholders
of the Company. The terms and the provisions of the Plan as it may be amended from time to time
are incorporated herein by reference. In the event of a conflict between any term or provision
contained herein and a term or provision of the Plan, the applicable terms and provisions of the
Plan will govern and prevail.

          9. Amendment. This Award may be amended or modified at any time by an instrument in writing
signed by the parties hereto.

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          10. Governing Law. This Award shall be governed by and construed in accordance with the laws
of the State of New York, without regard to conflicts of law provisions thereof.

          11. Adjustments. If the number of shares of outstanding Stock of the Company is changed as a
result of a stock dividend, stock split or the like without additional consideration to the
Company, the number of shares of Restricted Stock subject to this Award shall be adjusted to
correspond to such change.

 

          IN WITNESS WHEREOF, the Company and Participant have executed this Award as of the Date of
Grant specified above.

	 	 	 	 	 
	 	 	THE CRONOS GROUP
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	 	 	Dennis J. Tietz
	 

	 	 	 	Chief Executive Officer

	 	 	 	 	 
	 	 	PARTICIPANT
	 
	 	 	 	 
	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 

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CONSENT OF SPOUSE

          The undersigned spouse of Participant has read and hereby approves the terms and conditions of
the Plan and this Award. In consideration of the Company’s granting his or her spouse the
Restricted Stock as set forth in the Plan and this Award, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Award and further agrees that
any community property interest shall be similarly bound. The undersigned hereby appoints the
undersigned’s spouse as attorney-in-fact for the undersigned with respect to any amendment or
exercise of rights under the Plan or this Award.

SPOUSE OF PARTICIPANT

                                                            

(signature)

Print Name:                                         

 

EXHIBIT A

STOCK POWER

          For value received, I hereby sell, assign and transfer unto                                         ,                                         common shares of The Cronos
Group (the “Company”) standing in my name on the books of the Company represented by
Certificate(s) Number(s)                     attached hereto, and do hereby irrevocably constitute and appoint Peter J.
Younger and Elinor A. Wexler, and each of them, to transfer the said stock on the books of the
Company with full power of substitution in the premises.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Printed Name:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Social Security Number:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Witness Signature:	 	 
	 

	 	 	 	 	 	 

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