Document:

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                                                                   EXHIBIT 10.13

                            INDEMNIFICATION AGREEMENT

         This Indemnification Agreement (the "Agreement") is made as of April 8,
2002, by and between RedEnvelope, Inc., a Delaware corporation (the "Company"),
and Alison L. May (the "Indemnitee").

         In consideration of the mutual promises made in this Agreement, and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the Company and Indemnitee hereby agree as follows:

         1.       INDEMNIFICATION.

                  (a)      THIRD PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary or
affiliated entity of the Company, by reason of any action or inaction on the
part of Indemnitee while an officer or director or by reason of the fact that
Indemnitee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
damages, judgments, fines and amounts paid in settlement (if such settlement is
approved in advance by the Company, which approval shall not be unreasonably
withheld) actually and reasonably incurred by Indemnitee in connection with such
action, suit or proceeding, whether or not Indemnitee is a successful party in
such action, suit or proceeding, to the fullest extent permitted by applicable
law if Indemnitee acted in good faith and in a manner Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
Indemnitee's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, or, with
respect to any criminal action or proceeding, that Indemnitee had reasonable
cause to believe that Indemnitee's conduct was unlawful.

                  (b)      PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The
Company shall indemnify Indemnitee, to the fullest extent permitted by law, if
Indemnitee was or is a party or is threatened to be made a party to any
threatened, pending or completed action or proceeding by or in the right of the
Company or any subsidiary or affiliated entity of the Company to procure a
judgment in its favor by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary or
affiliated entity of the Company, by reason of any action or inaction on the
part of Indemnitee while an officer or director or by reason of the fact that
Indemnitee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and damages and amounts paid in settlement (if such settlement
is approved in advance by the Company, which approval shall not

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be unreasonably withheld), in each case to the extent actually and reasonably
incurred by Indemnitee in connection with the defense or settlement of such
action, proceeding or suit, whether or not Indemnitee is a successful party in
such action, proceeding or suit, if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company and its stockholders, except that no indemnification
shall be made in respect of any claim, issue or matter as to which Indemnitee
shall have been finally adjudicated by court order or judgment to be liable to
the Company in the performance of Indemnitee's duty to the Company and its
stockholders unless and only to the extent that the court in which such action,
suit or proceeding is or was pending shall determine upon application that, in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such amounts.

                  (c)      MANDATORY PAYMENT OF EXPENSES. Notwithstanding any
other provision herein, to the extent that Indemnitee has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to in
Section 1(a) or Section 1(b) or the defense of any claim, issue or matter
therein, Indemnitee shall be indemnified against any and all expenses (including
attorneys' fees) actually and reasonably incurred by Indemnitee in connection
therewith. For purposes of this paragraph, Indemnitee will be deemed to have
been successful on the merits if the action, suit or proceeding is terminated by
settlement or is dismissed.

                  (d)      CONCLUSIVE PRESUMPTION REGARDING STANDARD OF CONDUCT.
Indemnitee shall be conclusively presumed to have met the relevant standard of
conduct required by applicable law for indemnification pursuant to these
indemnity provisions, unless a determination is made that Indemnitee has not met
such standards: (i) by the Board of Directors of the Company by a majority vote
of a quorum of the disinterested directors thereof; (ii) by the stockholders of
the Company by majority vote; or (iii) in a written opinion of independent legal
counsel retained by the Company. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, rebut the presumption that
Indemnitee met the relevant standards of conduct for indemnification pursuant to
these indemnity provisions.

         2.       NO EMPLOYMENT RIGHTS. Nothing contained in this Agreement is
intended to create in Indemnitee any right to continued employment.

         3.       EXPENSES; INDEMNIFICATION PROCEDURE.

                  (a)      ADVANCEMENT OF EXPENSES. The Company shall advance
all expenses incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil or criminal action, suit or
proceeding referred to in Section l(a) or Section 1(b) hereof (including amounts
actually paid in settlement of any such action, suit or proceeding) to the
fullest extent permitted by applicable law. Indemnitee hereby undertakes to
repay such amounts advanced only if, and to the extent that, it shall ultimately
be determined that Indemnitee is not entitled to be indemnified by the Company
as authorized hereby.

                  (b)      NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall,
as a condition precedent to his or her right to be indemnified under this
Agreement, give the Company notice in

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writing as soon as practicable of any claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the Chief Executive Officer of the Company and
shall be given in accordance with the provisions of Section 12(d) below. In
addition, Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee's power. The failure
to so notify the Company will not relieve the Company from any liability which
it may have to Indemnitee under the indemnity provisions herein; provided,
however, that the Company shall not be required to indemnify Indemnitee for any
liability that would have been avoided had Indemnitee timely provided notice
hereunder to the Company.

                  (c)      PROCEDURE. Any indemnification and advances provided
for in Section 1 and this Section 3 shall be made no later than thirty (30) days
after receipt of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the Company's
Certificate of Incorporation or Bylaws providing for indemnification, is not
paid in full by the Company within thirty (30) days after a written request for
payment thereof has first been received by the Company, Indemnitee may, but need
not, at any time thereafter bring an action against the Company in any court of
competent jurisdiction to recover the unpaid amount of the claim and enforce any
other provision of this Agreement and, subject to Section 11 of this Agreement,
Indemnitee shall also be entitled to recover from the Company all expenses
(including attorneys' fees) of bringing such action or negotiating such matter.
It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in connection with any action, suit or
proceeding in advance of its final disposition) that Indemnitee has not met the
standards of conduct which make it permissible under applicable law for the
Company to indemnify Indemnitee for the amount claimed, but the burden of
proving such defense shall be on the Company and Indemnitee shall be entitled to
receive interim payments of expenses pursuant to Section 3(a) unless and until
such defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists. It is the parties' intention that if the Company
contests Indemnitee's right to indemnification, the question of Indemnitee's
right to indemnification shall be for the court to decide, and neither the
failure of the Company (including its Board of Directors, any committee or
subgroup of the Board of Directors, independent legal counsel, or its
stockholders) to have made a determination that indemnification of Indemnitee is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct required by applicable law, nor an actual determination by the
Company (including its Board of Directors, any committee or subgroup of the
Board of Directors, independent legal counsel, or its stockholders) that
Indemnitee has not met such applicable standard of conduct, shall create a
presumption that Indemnitee has or has not met the applicable standard of
conduct.

                  (d)      NOTICE TO INSURERS. If, at the time of the receipt of
a notice of a claim pursuant to Section 3(b) hereof, the Company has director
and officer liability insurance in effect, the Company shall give prompt notice
of the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.

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                  (e)      SELECTION OF COUNSEL. In the event the Company shall
be obligated under Section 3(a) hereof to pay the expenses of any proceeding
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same proceeding, provided that (i) Indemnitee
shall have the right to employ counsel in any such proceeding at Indemnitee's
expense; and (ii) if (A) the employment of counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense or (C) the Company shall not, in
fact, have employed counsel to assume the defense of such proceeding, then the
fees and expenses of Indemnitee's counsel shall be at the expense of the
Company.

         4.       ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.

                  (a)      SCOPE. Notwithstanding any other provision of this
Agreement, the Company hereby agrees to indemnify the Indemnitee to the fullest
extent permitted by applicable law, notwithstanding that such indemnification is
not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute. In
the event of any change, after the date of this Agreement, in any applicable
law, statute, or rule which expands the right of the Company to indemnify a
member of its board of directors or an officer, such changes shall be deemed to
be within the purview of Indemnitee's rights and the Company's obligations under
this Agreement. In the event of any change in any applicable law, statute or
rule which narrows the right of the Company to indemnify a member of its board
of directors or an officer, such changes, to the extent not otherwise required
by such law, statute or rule to be applied to this Agreement shall have no
effect on this Agreement or the parties' rights and obligations hereunder.

                  (b)      NONEXCLUSIVITY. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee
otherwise may be entitled under the Company's Certificate of Incorporation, its
Bylaws, any agreement, any vote of stockholders or disinterested members of the
Company's Board of Directors, the General Corporation Law of the State of
Delaware, the applicable provisions of California law, or otherwise, both as to
action in Indemnitee's official capacity and as to action in another capacity
while holding such office. The indemnification provided under this Agreement
shall continue as to Indemnitee for any action taken or not taken while serving
in an indemnified capacity even though he or she may have ceased to serve in any
such capacity at the time of any action, suit or other covered proceeding.

         5.       PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred in the investigation, defense, appeal or settlement of any civil or
criminal action, suit or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such expenses, judgments, fines or penalties to which Indemnitee is entitled.

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         6.       MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee
acknowledge that in certain instances, Federal law or public policy may override
applicable state law and prohibit the Company from indemnifying its directors
and officers under this Agreement or otherwise. For example, the Company and
Indemnitee acknowledge that the Securities and Exchange Commission (the "SEC")
has taken the position that indemnification is not permissible for liabilities
arising under certain federal securities laws, and federal legislation prohibits
indemnification for certain ERISA violations. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the SEC to submit the question of indemnification to a court in
certain circumstances for a determination of the Company's right under public
policy to indemnify Indemnitee.

         7.       OFFICER AND DIRECTOR LIABILITY INSURANCE. The Company shall
maintain, at its sole expense, during the period of your service as a director
or officer of the Company or any of its affiliated entities and for such
additional period of time as you are subject to claims arising therefrom,
director and officer liability insurance in such amounts and subject to such
limitations as the Company shall, in good faith, determine and Indemnitee shall
be named as an insured in such a manner as to provide Indemnitee the same rights
and benefits as are accorded to the most favorably insured of the Company's
directors, if Indemnitee is a director; or of the Company's officers, if
Indemnitee is not a director of the Company but is an officer; or of the
Company's key employees, if Indemnitee is not an officer or director but is a
key employee. Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain such insurance if the Company determines in
good faith that such insurance cannot be obtained or maintained on terms that
are commercially reasonable, if the premium costs for such insurance are
substantially disproportionate to the amount of coverage provided, if the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a parent or subsidiary of the Company.

         8.       SEVERABILITY. Nothing in this Agreement is intended to require
or shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 8. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.

         9.       EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

                  (a)      CLAIMS INITIATED BY INDEMNITEE. To indemnify or
advance expenses to Indemnitee with respect to proceedings or claims initiated
or brought voluntarily by Indemnitee and not by way of defense, except with
respect to proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or otherwise as
required under Section 145 of the Delaware General Corporation Law, but such
indemnification or

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advancement of expenses may be provided by the Company in specific cases if the
Board of Directors finds it to be appropriate;

                  (b)      LACK OF GOOD FAITH. To indemnify Indemnitee for any
expenses incurred by Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by Indemnitee
in such proceeding was not made in good faith or was frivolous;

                  (c)      INSURED CLAIMS. To indemnify Indemnitee for expenses
or liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) to the
extent such expenses or liabilities have been paid directly to Indemnitee by an
insurance carrier under a policy of officers' and directors' liability insurance
maintained by the Company; or

                  (d)      CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee
for expenses or the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.

         10.      CONSTRUCTION OF CERTAIN PHRASES.

                  (a)      For purposes of this Agreement, references to the
"Company" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and employees
or agents, so that if Indemnitee is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.

                  (b)      For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company or
any subsidiary or affiliated entity of the Company which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants, or beneficiaries; and if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan,
Indemnitee shall be deemed to have acted in a manner "not opposed to the best
interests of the Company" as referred to in this Agreement.

         11.      ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to recover from the Company all court costs and
expenses, including reasonable attorneys' fees,

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incurred by Indemnitee with respect to such action or in negotiating such
matter, unless as a part of such action, the court of competent jurisdiction
determines that each of the material assertions made by Indemnitee as a basis
for such action were not made in good faith or were frivolous. In the event of
an action instituted by or in the name of the Company under this Agreement or to
enforce or interpret any of the terms of this Agreement, Indemnitee shall be
entitled to be paid all court costs and expenses, including attorneys' fees,
incurred by Indemnitee in defense of such action (including with respect to
Indemnitee's counterclaims and cross-claims made in such action), unless as a
part of such action the court determines that each of Indemnitee's material
defenses to such action were made in bad faith or were frivolous.

         12.      MISCELLANEOUS.

                  (a)      GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California, without regard to conflicts of law provisions
thereof.

                  (b)      ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This
Agreement, along with Indemnitee's offer letter agreement, sets forth the entire
agreement and understanding of the parties relating to the subject matter herein
and merges all prior discussions between them. No modification of or amendment
to this Agreement, nor any waiver of any rights under this Agreement, shall be
effective unless in writing signed by the parties to this Agreement. The failure
by either party to enforce any rights under this Agreement shall not be
construed as a waiver of any rights of such party.

                  (c)      CONSTRUCTION. This Agreement is the result of
negotiations between and has been reviewed by each of the parties hereto and
their respective counsel, if any; accordingly, this Agreement shall be deemed to
be the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.

                  (d)      NOTICES. Any notice, demand or request required or
permitted to be given under this Agreement shall be in writing and shall be
deemed sufficient when delivered personally or sent by telegram or fax, or
forty-eight (48) hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, and addressed to the party to be notified
at such party's address as set forth below or as subsequently modified by
written notice.

                  (e)      COUNTERPARTS. 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.

                  (f)      SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon the Company and its successors and assigns, and inure to the
benefit of Indemnitee and Indemnitee's heirs, legal representatives and assigns.

                  (g)      SUBROGATION. In the event of payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of

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Indemnitee, who shall execute all documents required and shall do all acts that
may be necessary to secure such rights and to enable the Company to effectively
bring suit to enforce such rights.

                            [Signature Page Follows]

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         The parties hereto have executed this Agreement as of the day and year
set forth on the first page of this Agreement.

                                      RedEnvelope, Inc.

                                      By:     /s/ Hilary Billings
                                              __________________________________

                                      Title:  Chairman / CMO
                                              __________________________________

                                      Address: 201 Spear Street, 3rd Floor
                                               San Francisco, CA 94105

                                      Facsimile: (415) 371-1134

AGREED TO AND ACCEPTED:

ALISON L. MAY

/s/ Alison L. May
________________________________________
(Signature)

Address: 22 Jersey Street
         San Francisco, CA 94114

Facsimile:_________________________

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                                                                   EXHIBIT 10.14

                                 April 10, 2002

Dear Hilary,

         This letter agreement sets forth the terms and conditions of your
position with RedEnvelope, Inc. (the "Company").

         1.       POSITION.

                  a.       You will continue to have the titles and
responsibilities of the Chairman of the Board and Chief Marketing Officer of the
Company. You will continue to report directly to the Company's Board of
Directors in your capacity as Chairman and you will report to the Company's
Chief Executive Officer in your capacity as Chief Marketing Officer.

                  b.       You agree to the best of your ability and experience
that you will at all times loyally and conscientiously perform all of your
duties and obligations to the Company. During your employment, you further agree
that you (i) will devote substantially all of your business time and attention
to the business of the Company, at the Company's headquarters or in your home
office (as you determine and as is necessary, in your reasonable judgment, to
fulfill your obligations hereunder); (ii) will not render commercial or
professional services of any nature to any person or organization, whether or
not for compensation, without the prior written consent of the Company's Board
of Directors; and (iii) will not directly or indirectly engage or participate in
any business or activity that is competitive in any manner with the business of
the Company. Nothing in this letter agreement will prevent you from: (i)
accepting speaking or presentation engagements in exchange for honoraria; (ii)
serving on advisory boards or boards of charitable organizations, so long as
such service does not unduly interfere with the performance of your duties to
the Company; or (iii) owning, directly or indirectly, no more than one percent
(1%) of the outstanding equity securities of a corporation whose stock is listed
on a national stock exchange.

         2.       COMPENSATION.

                  a.       BASE SALARY. Commencing April 4, 2002, you will be
paid a base monthly salary of $25,000, which is equivalent to $300,000 on an
annualized basis, subject to applicable tax withholding. Your salary will be
payable pursuant to the Company's regular payroll policy (or in the same manner
as other similarly situated employees of the Company).

                  b.       BONUS. You will not be entitled to a bonus for fiscal
year 2003 (i.e., the fiscal year ending March 31, 2003), unless otherwise
determined by the Company's Board of Directors. You will be eligible, subject to
approval by the Company's Board of Directors, for annual bonuses in subsequent
fiscal years pursuant to an incentive compensation plan that will be developed
by Company management and the Board of Directors.

         3.       STOCK OPTIONS.

                  a.       CURRENT OPTION. You currently hold a total of 888,888
shares, and unexercised options to purchase an additional 630,000 shares, of
Company common stock, in each

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case subject to the vesting requirements and restrictions on transfer set forth
in the respective stock purchase agreements and stock option agreements
therefor.

                  b.       PERCENTAGE INTEREST. If, at any time prior to the
earlier to occur of the closing of: (i) an initial public offering of the
Company's Common Stock ("IPO") or (ii) a Change of Control (as defined below) of
the Company, your total option and shareholdings in the Company are below three
percent (3%) of the total outstanding shares, options, warrants and other
convertible securities (including unallocated stock options), then the Company
will recommend to the Board of Directors that additional options be granted to
you at the then fair market value to ensure that your ownership percentage is
equal to 3%. The vesting schedule associated with any such options will be
identical to the vesting arrangement with the options and stock held by you. In
other words, if you are 75% vested in your options and shares owned prior to
such issuance, then the new issuance shall be vested in 75% of such amount. The
rights granted pursuant to this paragraph shall immediately terminate upon the
closing of an IPO or a Change of Control, whichever occurs first.

                  c.       ADDITIONAL GRANTS. Subject to the discretion of the
Company's Board of Directors, you may be eligible to receive additional grants
of stock options or purchase rights from time to time in the future, on such
terms and subject to such conditions as the Board of Directors shall determine
as of the date of any such grant.

                  d.       SPECIAL OPTION EXERCISE PROVISIONS. Notwithstanding
anything to the contrary in any of your stock option agreements, the 1999 Plan
or any other document or agreement, (i) you will have a period of 12 months
following a termination of your employment relationship with the Company as a
result of your death or disability (or, if earlier, the expiration date of the
term of the option) to exercise any and all stock options held by you that are
vested as of the date of such termination, (ii) your options will be
transferable to a trust for your benefit, or for the benefit of an immediate
family member, as permitted by applicable law, (iii) all of your options will
permit the use of a full-recourse, five-year term promissory note, in the same
form as previously used by you to exercise options (with such changes as the
plan Administrator reasonably deems necessary), as an acceptable form of payment
upon exercise of any of the Shares, and (iv) you will have three years from the
date of termination of your employment (or, if earlier, the expiration date of
the term of the option) for any reason (other than death or disability) to
exercise any and all stock options held by you that are vested as of the date of
such termination.

                  e.       SPECIAL VESTING. In the event of a Change of Control
of the Company, then 25% of your unvested options or shares remaining as of the
effective date of the Change of Control will become immediately vested. As used
herein, a "Change of Control" shall mean any of the following: (i) a merger of
the Company into another entity (other than a merger effected solely for the
purpose of changing the state of domicile of the Company), (ii) any other
transaction in which more than 50% of the voting control of the Company is
transferred (other than an equity financing of the Company in which the Company
is the surviving entity), including, without limitation, the sale of more than
50% of the outstanding shares of the Company's capital stock, (iii) the sale of
all or substantially all of the assets of the Company, or (iv) immediately prior
to the liquidation or dissolution of the Company. If your employment is
terminated by the Company or its successor within the twelve (12) month period
following a Change of Control, for any reason other than

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Cause, then an additional 25% of your unvested options or shares remaining as of
the effective date of the Change of Control will become immediately vested.

                  f.       NOTES EXTENSION. You and the Company acknowledge that
there are currently two promissory notes (the "Notes") outstanding which you
used to finance the purchase of shares of Company stock, each dated July 21,
1999, the first in the principal amount of $19,166.30 and the second in the
principal amount of $24,389.20. The Company will, concurrently with the
execution of this letter agreement, amend the Notes to extend the maturity dates
thereof from July 20, 2003 until July 20, 2007.

         4.       BENEFITS.

                  a.       INSURANCE BENEFITS; INDEMNIFICATION. You will
continue to participate in the standard benefits plans currently available to
other similarly situated employees, including group medical insurance, subject
to any eligibility requirements imposed by such plans. In addition, the Company
currently indemnifies all officers and directors to the maximum extent permitted
by law (and advances expenses for which indemnification is available to the
maximum extent permitted by law) and the Company has entered into its standard
form of Indemnification Agreement with you giving you such protection. The
Company will also maintain, at its sole expense, during the period of your
service as a director or officer of the Company or any of its affiliated
entities and for such additional period of time as you are subject to claims
arising therefrom, director and officer liability insurance in such amounts and
subject to such limitations as the Company shall, in good faith, determine.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain such insurance coverage if the Company determines in good faith that:
(i) such insurance cannot be obtained or maintained on terms that are
commercially reasonable; (ii) if the premium costs for such insurance are
substantially disproportionate to the amount of coverage provided; (iii) if the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit; or (iv) if you are covered by similar insurance maintained
by a parent or subsidiary of the Company.

                  b.       VACATION. You will be entitled to twenty-three (23)
days of paid time off per year (exclusive of Company holidays), subject to the
applicable cap on accrual and other terms of the Company's vacation policy.

         5.       CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT.
You have previously executed, and remain bound by the terms of, the Company's
Confidential Information and Invention Assignment Agreement (the
"Confidentiality Agreement").

         6.       AT-WILL EMPLOYMENT. Subject only to the Company's obligations
described in Section 7 below, your employment with the Company will be on an "at
will" basis, meaning that either you or the Company may terminate your
employment at any time for any reason or no reason, without further obligation.

         7.       SEVERANCE BENEFITS. Upon termination of your employment with
the Company, you will be entitled to receive benefits only as set forth in this
Section 7 or as otherwise provided by applicable law. Your entitlement to these
severance benefits will be conditioned upon your signing (and not revoking) and
delivering to the Company of (i) a general mutual release of all claims
(provided that the Company shall not be required to release any claims arising
from a

                                      -3-

<PAGE>

material breach by you of the Confidentiality Agreement) substantially in the
form attached hereto as Exhibit A and (ii) a resignation from all of your
positions with the Company.

                  a.       In the event of the termination of your employment by
the Company without "Cause", or as a result of your "Constructive Termination"
(as such terms are defined below), you will be entitled to receive (i) a cash
amount equal to twelve (12) months of your then-current base salary (less
applicable tax withholding), which benefit will be paid over the twelve (12)
month period following your execution of the release agreement on the Company's
normal payroll dates in equal installments, and (ii) twelve (12) months,
measured from the date of termination, of continued insurance coverage under
COBRA to be paid for by the Company.

                  b.       For purposes of this letter agreement, "Cause" for
your termination by the Company will mean your: (i) gross negligence in the
performance of your job responsibilities; (ii) failure or refusal to comply with
the lawful directives of the Company's Board of Directors not inconsistent with
your position and responsibilities (other than a refusal to incur any of (i) -
(iv) under the definition of Constructive Termination below); (iii) willful
misconduct that the Company reasonably determines is materially detrimental to
the business or reputation of the Company; (iv) dishonest or fraudulent conduct
in the performance of your job responsibilities or that the Company reasonably
determines is materially detrimental to the business or reputation of the
Company; (v) conviction of a felony; (vi) material breach of your
Confidentiality Agreement or your duties of confidentiality owed to any third
parties as a result of your position with the Company; or (vii) death; provided,
however, that an occurrence of any of (i) through (iii) above shall constitute
Cause hereunder only after the Company has provided you with written notice of
such gross negligence, failure or misconduct and a reasonable opportunity for
you to cure such gross negligence, failure or misconduct (assuming such gross
negligence, failure or misconduct is capable of being cured). For purposes of
the immediately preceding proviso, a majority of the disinterested members of
the Company's Board of Directors shall determine whether a cure has been
effected or whether a reasonable opportunity to cure was provided.

                  c.       For purposes of this letter agreement, "Constructive
Termination" will mean your resignation from all of your positions with the
Company within thirty (30) days following: (i) a material reduction or change in
your title, job duties, authority, responsibilities or job requirements
inconsistent with your position with the Company; (ii) any material reduction of
your base compensation; (iii) any elimination of a material benefit provided to
you pursuant to your employment with the Company; (iv) a relocation of your
place of employment more than twenty-five (25) miles from San Francisco,
California; (v) the Company's failure to cure any material breach by it of the
terms of this letter agreement or the Indemnification Agreement referenced
herein within a reasonable time following written notice from you to the
Company's Board of Directors, in each case under (i) through (v) above, other
than with your written consent; or (vi) the actual occurrence of any
"constructive termination" of you by the Company under any applicable provision
of California law.

                  d.       Notwithstanding the foregoing, in the event that the
Company terminates your employment without Cause and as a result of your
physical or mental impairment which prevents performance of the essential
functions of your position, the amount of cash payment that you would otherwise
be entitled to receive pursuant to Section 7(a)(i) above shall be reduced by

                                      -4-

<PAGE>

the gross amount of disability insurance proceeds that you are entitled to
receive, due to such impairment, during the twelve (12) month period following
such termination.

         8.       ATTORNEY FEES. The Company shall reimburse you for up to
$5,000 of the attorney or other professional fees reasonably incurred by you in
connection with the review and negotiation of the terms of this letter agreement
prior to the date hereof upon submission of an invoice or other suitable
documentation.

         9.       BUSINESS EXPENSES. The Company shall reimburse you, following
submission of appropriate documentation, for the reasonable travel,
entertainment, cellular telephone and other business expenses incurred in
connection with your duties to the Company, subject to the Company's expenditure
and reimbursement guidelines.

                            [signature page follows]

                                      -5-

<PAGE>

To indicate your acceptance of these terms and conditions, please sign and date
this letter in the space below. This letter agreement may not be modified or
amended except by a written agreement, signed by the Company and by you. This
letter agreement will be governed by California law, without regard to the
conflicts of laws provisions thereof. This letter agreement, together with the
related documents referenced above, constitutes the entire agreement between the
parties with respect to the subject matter hereof, and supersedes and replaces
any and all prior or contemporaneous agreements or understandings, either
written or oral, relating to the subject matter hereof including, without
limitation, the letter agreement dated July 1, 1999, along with any amendments
thereto.

Very truly yours,                            ACCEPTED AND AGREED:

REDENVELOPE, INC.                            HILARY BILLINGS

By: /s/ Alison L. May                        /s/ Hilary Billings
   -----------------------------------       -----------------------------------
                                             Signature

Title: Pres & CEO                                     6.10.02
                                             -----------------------------------
                                             Date

                                      -6-

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