Document:

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                                                                   EXHIBIT 10.20

                                REDENVELOPE, INC.

                                 1999 STOCK PLAN

                     (As amended and restated effective upon
                     the Company's Initial Public Offering)

      1. PURPOSES OF THE PLAN. The purposes of this 1999 Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. This Plan permits the granting of Options, Stock Purchase Rights and
Stock Awards to eligible persons. Options granted under the Plan may be
Incentive Stock Options (as defined under Section 422 of the Code) or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant of an Option and subject to the applicable provisions of Section 422 of
the Code, as amended, and the regulations promulgated thereunder.

      2. DEFINITIONS. As used herein, the following definitions shall apply:

            (a) "ADMINISTRATOR" means the Board or its Committee appointed
pursuant to Section 4 of the Plan.

            (b) "AFFILIATE" means an entity other than a Subsidiary in which the
Company owns an equity interest or which, together with the Company, is under
common control of a third person or entity.

            (c) "APPLICABLE LAWS" means the legal requirements relating to the
administration of stock option, purchase and award plans under applicable U.S.
state corporate laws, rules and regulations; U.S. federal and applicable state
securities laws, rules and regulations; other U.S. federal and applicable state
laws, rules and regulations; the Code; any Stock Exchange rules or regulations
to which the Company may be subject; and the applicable laws, rules and
regulations of any other country or jurisdiction where Plan Awards are or may be
granted, as such laws, rule, regulations and requirements shall be in place from
time to time.

            (d) "AWARD" means an Option, Stock Purchase Right or Stock Award
issued under the Plan, as reflected in a written document (including in
electronic form), the form(s) of which shall be approved from time to time by
the Administrator, reflecting the terms of the Award granted under the Plan and
shall include any documents attached to or incorporated into such written
document, including a notice of grant, a form of exercise notice or similar
documents.

            (e) "BOARD" means the Board of Directors of the Company.

            (f) "CAUSE" for termination of a Participant's Continuous Service
Status will exist if the Participant is terminated by the Company for any of the
following reasons: (i) Participant's willful failure substantially to perform
his or her legal duties and responsibilities to the Company after a specific
request has been made of the Participant to so perform; (ii)
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Participant's deliberate violation of a Company policy; (iii) Participant's
commission of any act of fraud, embezzlement, dishonesty or any other willful
misconduct that has caused or is reasonably expected to result in material
injury to the Company; (iv) any act or omission that constitutes a knowing
misrepresentation involving or related to the Company's financial statements;
(v) unauthorized use or disclosure by Participant of any proprietary information
or trade secrets of the Company or any other party to whom the Participant owes
an obligation of nondisclosure as a result of his or her relationship with the
Company; or (vi) Participant's willful breach of any of his or her obligations
under any written agreement or covenant with the Company. The determination as
to whether a Participant is being terminated for Cause shall be made in good
faith by the Company and shall be final and binding on the Participant. The
foregoing definition does not in any way limit the Company's ability to
terminate a Participant's employment or consulting relationship at any time as
provided in Section 5(d) below, and the term "Company" will be interpreted to
include any Subsidiary, Parent or Affiliate, as appropriate.

            (g) "CHANGE OF CONTROL" means

                  (1) a sale of all or substantially all of the Company's
assets; or

                  (2) any merger, consolidation or other business combination
transaction of the Company with or into another corporation, entity or person,
other than a transaction in which the holders of at least a majority of the
shares of voting capital stock of the Company outstanding immediately prior to
such transaction continue to hold (either by such shares remaining outstanding
or by their being converted into shares of voting capital stock of the surviving
entity) a majority of the total voting power represented by the shares of voting
capital stock of the Company (or the surviving entity) outstanding immediately
after such transaction; or

                  (3) the direct or indirect acquisition (including by way of a
tender or exchange offer) by any person, or persons acting as a group, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing a majority of the voting power of the then outstanding shares of
capital stock of the Company; or

                  (4) the individuals who, as of the effective date of the
Company's initial public offering of its securities, are members of the Board
(the "Incumbent Board"), cease for any reason to constitute at least fifty
percent (50%) of the Board; provided however that if the election, or nomination
for election by the Company's stockholders, of any new director was approved by
a vote of at least fifty percent (50%) of the Incumbent Board, such new Director
shall be considered as a member of the Incumbent Board.

            (h) "CODE" means the Internal Revenue Code of 1986, as amended.

            (i) "COMMITTEE" means one or more committees or subcommittees of the
Board appointed by the Board to administer the Plan in accordance with Section 4
below.

            (j) "COMMON STOCK" means the Common Stock of the Company.

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            (k) "COMPANY" means RedEnvelope, Inc., a Delaware corporation.

            (l) "CONSULTANT" means any person, including an advisor, who renders
services to the Company, or any Parent or Subsidiary, and is compensated for
such services, and any director of the Company whether compensated for such
services or not, and who qualifies as a "consultant or advisor" under the rules
applicable to Form S-8 (promulgated under the Securities Act of 1933, as
amended) as such Form may be amended from time to time (or pursuant to any
successor form thereto).

            (m) "CONTINUOUS SERVICE STATUS" means the absence of any
interruption or termination of service as an Employee or Consultant to the
Company or a Parent, Subsidiary or Affiliate. Continuous Service Status shall
not be considered interrupted in the case of: (i) sick leave; (ii) military
leave; (iii) any other leave of absence approved by the Administrator, provided
that such leave is for a period of not more than 90 days, unless reemployment
upon the expiration of such leave is guaranteed by contract or statute, or
unless provided otherwise pursuant to Company policy adopted from time to time;
or (iv) in the case of transfers between locations of the Company or between the
Company, its Parent(s), Subsidiaries, Affiliates or their respective successors.
Unless otherwise determined by the Administrator, a change in status from an
Employee to a Consultant or from a Consultant to an Employee will not constitute
an interruption of Continuous Status as an Employee or Consultant.

            (n) "CORPORATE TRANSACTION" means a sale of all or substantially all
of the Company's assets, or a merger, consolidation or other capital
reorganization or business combination transaction of the Company with or into
another corporation, entity or person, or the direct or indirect acquisition
(including by way of a tender or exchange offer) by any person, or persons
acting as a group, of beneficial ownership or a right to acquire beneficial
ownership of shares representing a majority of the voting power of the then
outstanding shares of capital stock of the Company.

            (o) "DIRECTOR" means a member of the Board.

            (p) "EMPLOYEE" means any person, including officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
by the Company of a director's fee to a Director shall not be sufficient to
constitute "employment" of such Director by the Company.

            (q) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

            (r) "FAIR MARKET VALUE" means, as of any date, the fair market value
of Common Stock determined as follows:

                  (i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the National
Market of the National Association of Securities Dealers, Inc. Automated
Quotation ("Nasdaq") System, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported), as quoted
on such system or exchange on the date of determination, as quoted on such

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system or exchange on the date of determination, or if no trading occurred on
the date of determination, on the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

                  (ii) If the Common Stock is quoted on the Nasdaq System (but
not on the National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
for the last market trading day prior to the time of determination, as reported
in The Wall Street Journal or such other source as the Administrator deems
reliable; or

                  (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.

            (s) "INCENTIVE STOCK OPTION" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable Option agreement.

            (t) "INVOLUNTARY TERMINATION" means termination of a Participant's
Continuous Service Status under the following circumstances: (i) termination
without Cause by the Company or a Subsidiary, Parent or Affiliate, as
appropriate; or (ii) voluntary termination by the Participant within 30 days
following (A) a material reduction in the Participant's job responsibilities,
provided that neither a mere change in title alone nor reassignment following a
Change of Control to a position that is substantially similar to the position
held prior to the Change of Control shall constitute a material reduction in job
responsibilities; (B) relocation by the Company or a Subsidiary, Parent or
Affiliate, as appropriate, of the Participant's work site to a facility or
location more than 50 miles from the Participant's principal work site for the
Company at the time of the Change of Control; or (C) a reduction in
Participant's then-current base salary by at least 10%, provided that an
across-the-board reduction in the salary level of all other employees or
consultants in positions similar to the Participant's by the same percentage
amount as part of a general salary level reduction shall not constitute such a
salary reduction.

            (u) "LISTED SECURITY" means any security of the Company that is
listed or approved for listing on a national securities exchange or designated
or approved for designation as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc.

            (v) "NAMED EXECUTIVE" means any individual who, on the last day of
the Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer). Such officer status shall
be determined pursuant to the executive compensation disclosure rules
promulgated under the Exchange Act, in conjunction with Code Section 162(m) and
regulations and interpretations promulgated thereunder.

            (w) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable Option
agreement.

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            (x) "OPTION" means a stock option granted pursuant to the Plan.

            (y) "OPTION EXCHANGE PROGRAM" means any program approved by the
Administrator whereby outstanding Options are exchanged for Options with a lower
exercise price, including a program in which the only change made to Options is
to lower the exercise price.

            (z) "OPTIONED STOCK" means the Common Stock subject to an Option,
Stock Purchase Right or Stock Award.

            (aa) "OPTIONEE" means an Employee or Consultant who receives an
Option.

            (bb) "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code, or any successor provision.

            (cc) "PARTICIPANT" shall mean any holder of one or more Options,
Stock Purchase Rights or Stock Awards, or the Shares issuable or issued upon
exercise of such Awards, under the Plan.

            (dd) "PLAN" means this 1999 Stock Plan.

            (ee) "REPORTING PERSON" means an officer, Director, or greater than
10% stockholder of the Company within the meaning of Rule 16a-2 under the
Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the
Exchange Act.

            (ff) "RESTRICTED STOCK" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 10 below.

            (gg) "RULE 16B-3" means Rule 16b-3 promulgated under the Exchange
Act, as the same may be amended from time to time, or any successor provision.

            (hh) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 15 of the Plan.

            (ii) "STOCK EXCHANGE" means any stock exchange or consolidated stock
price reporting system on which prices for the Common Stock are quoted at any
given time.

            (jj) "STOCK PURCHASE RIGHT" means the right to purchase Common Stock
pursuant to Section 10 below.

            (kk) "STOCK AWARDS" means awards specified under Section 12 of the
Plan.

            (ll) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code, or any successor
provision.

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            (mm) "TEN PERCENT HOLDER" means a person who owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary.

      3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 15 of
the Plan, the maximum aggregate number of Shares that may be sold under the Plan
is 26,100,000 Shares of Common Stock (before giving effect to the stock split to
be effected in connection with the Company's initial public offering), plus an
annual increase on the first day of each of the Company's fiscal years beginning
in each of 2005 through 2009 equal to the lesser of (a) 5,000,000 Shares (before
giving effect to the stock split to be effected in connection with the Company's
initial public offering), (b) 4% of the Shares outstanding on the last day of
the immediately preceding fiscal year, or (c) such lesser number of Shares as
the Board shall determine; provided however that the maximum number of Shares
that may be added in any year pursuant to this sentence shall not result in the
Plan's having available for issuance an aggregate number of Shares that exceeds
4% of the "fully diluted" (as defined below) Shares of outstanding Common Stock
as of the last day of the immediately preceding fiscal year. For purposes of
illustrating how this formula is intended to work, if the number of Shares
remaining available as of the last day of the immediately preceding fiscal year
equaled 4.5% of the fully diluted Shares, then no additional Shares would be
added for the year, and if the number of Shares remaining available as of the
last day of the immediately preceding fiscal year equaled 2.5% of the fully
diluted Shares, then the number of Shares that would be added for the year would
equal 1.5% of the fully diluted Shares (but in any event not more than 5,000,000
Shares (before giving effect to the stock split to be effected in connection
with the Company's initial public offering)). For purposes of this Section 3,
outstanding Shares on a "fully diluted" basis shall be the number of Shares that
is equal to (i) the number of Shares of Common Stock issued and then
outstanding, plus (ii) all Shares subject to or available for Awards under this
Plan, the Company's Employee Stock Purchase Plan and its Directors' Stock Option
Plan.

      The Shares may be authorized, but unissued, or reacquired Common Stock. If
an Option expires or becomes unexercisable for any reason without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares that were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant under the Plan. In addition,
any Shares of Common Stock that are retained by the Company upon exercise of an
Option or Stock Purchase Right in order to satisfy the exercise or purchase
price for such Option or Stock Purchase Right or any withholding taxes due with
respect to such exercise shall be treated as not issued and shall continue to be
available under the Plan. Shares issued under the Plan and later repurchased by
the Company pursuant to any repurchase right that the Company may have or
forfeited to the Company under any forfeiture restrictions that may apply to
such Shares shall become available for future grant under the Plan.

      4. ADMINISTRATION OF THE PLAN.

            (a) GENERAL. The Plan shall be administered by the Board or a
Committee, or a combination thereof, as determined by the Board. The Plan may be
administered by different administrative bodies with respect to different
classes of Participants and, if permitted by the

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Applicable Laws, the Board may authorize one or more officers to grant Awards
under the Plan. The Plan shall be administered in a manner designed to comply
with the Applicable Laws.

            (b) COMMITTEE COMPOSITION. If a Committee has been appointed
pursuant to this Section 4, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time the
Board may increase the size of any Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies (however caused) and remove all members of
a Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws and, in the case of a Committee administering
the Plan pursuant to Rule 16b-3 or Code Section 162(m), then to the extent
permitted or required by such rules. The Committee shall conform to the
Applicable Laws.

            (c) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any Stock Exchange, the Administrator
shall have the authority, in its discretion:

                  (i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(r) of the Plan;

                  (ii) to select the Consultants and Employees to whom Awards
may from time to time be granted;

                  (iii) to determine whether and to what extent Awards are
granted;

                  (iv) to determine the number of Shares of Common Stock to be
covered by each Award granted hereunder;

                  (v) to approve forms of Award agreements for use under the
Plan, which forms may differ from Participant to Participant as to the terms and
conditions imposed thereby;

                  (vi) except to the extent specifically prohibited by the terms
of the Plan, to determine the terms and conditions of any Award granted
hereunder, which terms and conditions include but are not limited to the
exercise or purchase price, the time or times when Awards may be exercised
(which may be based on performance criteria), the basis on which participants
shall vest in Optioned Stock, any vesting and/or exercisability acceleration or
waiver of forfeiture restrictions, and any restriction or limitation regarding
any Option, Optioned Stock, Stock Purchase Right, Restricted Stock or Stock
Award, based in each case on such factors as the Administrator, in its sole
discretion, shall determine;

                  (vii) subject to the requirements of Section 17(b) below and
except to the extent specifically prohibited by the terms of the Plan, to amend
the terms of any outstanding Award;

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                  (viii) to adjust the vesting or exercisability of an Award,
Optioned Stock or Restricted Stock held by a Participant as a result of a change
in the terms or conditions under which such person is providing services to the
Company (e.g., to proportionately slow down vesting in the event a Participant
goes from a full- to part-time service provider);

                  (ix) subject to Section 17(b) below, to initiate an Option
Exchange Program, including to reduce the exercise price of any Option to the
then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted, and to make any other amendments or adjustments in connection therewith
to any Option that the Administrator determines, in its discretion and under the
authority granted to it hereunder, to be necessary or advisable;

                  (x) to construe and interpret the terms of the Plan and Awards
granted under the Plan; and

                  (xi) in order to fulfill the purposes of the Plan and without
amending the Plan in any material way that would require stockholder approval,
to take the following actions that would permit the granting of Awards to
Participants who are foreign nationals or employed outside of the United States
in order to recognize differences in local law, tax policies or customs: modify
the Plan; create a subplan that utilizes Shares reserved under the Plan; grant
Awards to such Participants with terms that differ from Awards granted to
U.S.-based Participants; or modify such Awards.

            (c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Participants and on all other parties.

      5. ELIGIBILITY.

            (a) RECIPIENTS OF GRANTS. Nonstatutory Stock Options, Stock Purchase
Rights and Stock Awards may be granted to Employees and Consultants. Incentive
Stock Options may be granted only to Employees.

            (b) TYPE OF OPTION. Each Option shall be designated in the
applicable Option agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such designations, to the
extent that the aggregate Fair Market Value of Shares with respect to which
Options designated as Incentive Stock Options are exercisable for the first time
by any Optionee during any calendar year (under all plans of the Company or any
Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares subject to an Incentive Stock Option shall
be determined as of the date of grant of such Option.

            (c) AT-WILL RELATIONSHIP. Neither the Plan nor the receipt of any
Award hereunder shall confer upon a Participant any right with respect to
continuation of employment or consulting relationship with the Company, nor
shall it interfere in any way with such

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Participant's right or the Company's right to terminate his or her employment or
consulting relationship at any time, with or without cause.

      6. TERM OF PLAN. The Plan shall become effective upon its adoption by the
Board. Upon the amendment and restatement of the Plan which becomes effective
upon the effective date of the Company's initial public offering, the Plan term
shall end on April 11, 2013, unless sooner terminated under Section 15 of the
Plan or subsequently extended with the approval of the Company's stockholders;
provided, however that no Incentive Stock Options may be granted under the Plan
after March 1, 2009.

      7. TERM OF OPTIONS. The term of each Option shall be the term stated in
the applicable Option agreement; provided however that the term shall be no more
than ten years from the date of grant thereof or such shorter term as may be
provided in the Option agreement. However, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted is a Ten
Percent Holder, the term of such Option shall be five years from the date of
grant thereof or such shorter term as may be provided in the Option agreement.

      8. LIMITATION ON GRANTS TO EMPLOYEES. Subject to adjustment as provided in
Section 15 below, the maximum number of Shares that may be subject to Options
granted to any one Employee under this Plan for any fiscal year of the Company
shall be 4,000,000 Shares (before giving effect to the stock split to be
effected in connection with the Company's initial public offering).

      9. OPTION EXERCISE PRICE AND CONSIDERATION.

            (a) The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Administrator and set forth in the Option agreement, but shall be subject to the
following:

                  (i) In the case of an Incentive Stock Option that is:

                        (A) granted to an Employee who, at the time of grant is
a Ten Percent Holder, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.

                        (B) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

                  (ii) In the case of a Nonstatutory Stock Option that is:

                        (A) granted on any date on which the Common Stock is not
a Listed Security to a person who at the time of grant is a Ten Percent Holder,
the per Share exercise price shall be no less than 110% of the Fair Market Value
per Share on the date of the grant if required by the Applicable Laws and, if
not so required, shall be such price as is determined by the Administrator.

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                        (B) granted on any date on which the Common Stock is not
a Listed Security to any other eligible person, the per Share exercise price
shall be no less than 85% of the Fair Market Value per Share on the date of
grant if required by the Applicable Laws and, if not so required, shall be such
price as is determined by the Administrator.

                        (C) granted on any date on which the Common Stock is a
Listed Security to any eligible person, the per Share Exercise Price shall be
such price as determined by the Administrator (subject to any requirements
imposed by applicable state law that the Participant pay at least the per Share
par value for the Shares being exercised), provided that if such eligible person
is, at the time of the grant of such Option, a Named Executive of the Company,
the per Share Exercise Price shall be no less than 100% of the Fair Market Value
on the date of grant if such Option is intended to qualify as performance-based
compensation under Section 162(m) of the Code.

                  (iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price other than as required above pursuant to a
merger or other corporate transaction.

            (b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, check or
wire transfer; (2) delivery of Optionee's promissory note with such recourse,
interest, security and redemption provisions as the Administrator determines to
be appropriate; (subject to the provisions of Section 153 of the Delaware
General Corporation Law, Section 402 of the Sarbanes-Oxley Act of 2002 and any
other Applicable Law), (3) cancellation of indebtedness of the Company to the
Optionee; (4) other Shares that (x) in the case of Shares acquired upon exercise
of an Option, either have been owned by the Optionee for more than six months on
the date of surrender or such other period as may be required to avoid a charge
to the Company's earnings or were not acquired, directly or indirectly, from the
Company, and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which such Option shall be
exercised; (5) authorization for the Company to retain from the total number of
Shares as to which the Option is exercised that number of Shares having a Fair
Market Value on the date of exercise equal to the exercise price for the total
number of Shares as to which the Option is exercised; (6) if, as of the date of
exercise of an Option the Company then is permitting Participants to engage in a
"same-day sale" cashless brokered exercise program involving one or more
brokers, through such a program that complies with the Applicable Laws
(including without limitation the requirements of Regulation T and other
applicable regulations promulgated by the Federal Reserve Board) and that
ensures prompt delivery to the Company of the amount required to pay the
exercise price and any applicable withholding taxes; (7) any combination of the
foregoing methods of payment; or (8) such other consideration and method of
payment for the issuance of Shares to the extent permitted under the Applicable
Laws. In making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company, and the Administrator may refuse to
accept a particular form of consideration at the time of any Option

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exercise if, in its sole discretion, acceptance of such form of consideration is
not in the bests interests of the Company at such time.

      10. EXERCISE OF OPTION.

            (a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such conditions
(including no conditions) as determined by the Administrator, consistent with
the term of the Plan and reflected in the Option agreement, including vesting
requirements and/or performance criteria with respect to the Company and/or the
Optionee; provided however that, if required under the Applicable Laws, the
Option (or Shares issued upon exercise of the Option) shall comply with the
requirements of Section 260.140.41(f) and (k) of the Rules of the California
Corporations Commissioner. The Administrator may permit Optionees to exercise
Options as to unvested Optioned Stock and the Administrator may accelerate the
vesting and exercisability of outstanding Options or waive other restrictions
that apply to such Options.

      The Administrator shall have the discretion to determine whether and to
what extent the vesting of Options shall be tolled during any unpaid leave of
absence; provided, however, that in the absence of such determination, vesting
of Options shall be tolled during any such unpaid leave (unless otherwise
required by the Applicable Laws). In the event of military leave, vesting shall
toll during any unpaid portion of such leave, provided that, upon a
Participant's returning from military leave (under conditions that would entitle
him or her to protection upon such return under the Uniform Services Employment
and Reemployment Rights Act), he or she shall be given vesting credit with
respect to Options to the same extent as would have applied had the Participant
continued to provide services to the Company throughout the leave on the same
terms as he or she was providing services immediately prior to such leave.

      An Option may not be exercised for a fraction of a Share.

      An Option shall be deemed exercised when written notice of such exercise
has been given to the Company in accordance with the terms of the Option by the
person entitled to exercise the Option and the Company has received full payment
for the Shares with respect to which the Option is exercised. Full payment may,
as authorized by the Administrator, consist of any consideration and method of
payment allowable under Section 9(b) of the Plan. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned Stock, not withstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly upon exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 15 of the
Plan.

      Exercise of an Option in any manner shall result in a decrease in the
number of Shares that thereafter may be available, both for purposes of the Plan
and for sale under the Option, by the number of Shares as to which the Option is
exercised.

                                      -11-
<PAGE>
            (b) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP. In the
event of termination of an Optionee's Continuous Service Status with the Company
for any reason other than pursuant to Section 10(c) or 10(d) below, such
Optionee may, but only within three months (or such other period of time, not
less than 30 days, as is determined by the Administrator) after the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option agreement), exercise his or her Option to the
extent that the Optionee was vested in the Optioned Stock at the date of such
termination. To the extent that the Optionee was not vested in the Optioned
Stock at the date of such termination, or if the Optionee does not exercise the
Option to the extent so vested within the time specified above, the Option shall
terminate and the Optioned Stock underlying the unexercised portion of the
Option shall revert to the Plan. No termination shall be deemed to occur and
this Section 10(b) shall not apply if (i) the Optionee is a Consultant who
becomes an Employee, or (ii) the Optionee is an Employee who becomes a
Consultant.

            (c)   DISABILITY OF OPTIONEE.

                  (i) Notwithstanding Section 10(b) above, in the event of
termination of an Optionee's Continuous Service Status as a result of his or her
total and permanent disability (within the meaning of Section 22(e)(3) of the
Code), such Optionee may, but only within twelve months (or such other period of
time as is determined by the Administrator, with such determination in the case
of an Incentive Stock Option made at the time of grant of the Option) from the
date of such termination (but in no event later than the expiration date of the
term of such Option as set forth in the Option agreement), exercise the Option
to the extent he or she was vested in the Optioned Stock at the date of such
termination. To the extent that the Optionee was not vested in the Optioned
Stock at the date of termination, or if the Optionee does not exercise such
Option to the extent so vested within the time specified above, the Option shall
terminate and the Optioned Stock underlying the unexercised portion of the
Option shall revert to the Plan.

                  (ii) In the event of termination of an Optionee's Continuous
Service Status as a result of a disability which does not fall within the
meaning of total and permanent disability (as set forth in Section 22(e)(3) of
the Code), such Optionee may, but only within twelve months (or such other
period of time as is determined by the Administrator, with such determination in
the case of an Incentive Stock Option made at the time of grant of the Option)
from the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option agreement), exercise
the Option to the extent he or she was vested in the Optioned Stock at the date
of such termination. However, to the extent that such Optionee fails to exercise
an Option that is an Incentive Stock Option (within the meaning of Section 422
of the Code) within three months of the date of such termination, the Option
will not qualify for Incentive Stock Option treatment under the Code. To the
extent that the Optionee was not vested in the Optioned Stock at the date of
termination, or if the Optionee does not exercise such Option to the extent so
vested within the time period specified above, the Option shall terminate and
the Optioned Stock underlying the unexercised portion of the Option shall revert
to the Plan.

                                      -12-
<PAGE>
            (d) DEATH OF OPTIONEE. Notwithstanding Section 10(b) above, in the
event of the death of an Optionee during the period of Continuous Service Status
since the date of grant of the Option, or within 30 days following termination
of the Optionee's Continuous Service Status, the Option may be exercised, at any
time within twelve months following the date of death (but in no event later
than the expiration date of the term of such Option as set forth in the Option
agreement), by such Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent that the
Optionee was vested in the Optioned Stock at the date of death or, if earlier,
the date of termination of the Optionee's Continuous Service Status. To the
extent that the Optionee was not vested in the Optioned Stock at the date of
death or termination, as the case may be, or if the Optionee or his or her
estate or other person acquiring the right to exercise the Option as a result of
his or her death does not exercise such Option to the extent so vested within
the time specified above, the Option shall terminate and the Optioned Stock
underlying the unexercised portion of the Option shall revert to the Plan.

            (e) EXTENSION OF EXERCISE PERIOD. The Administrator shall have full
power and authority to extend the period of time for which an Option is to
remain exercisable following termination of an Optionee's Continuous Status as
an Employee or Consultant from the periods set forth in Sections 10(b), 10(c)
and 10(d) above or in the Option agreement to such greater time as the Board
shall deem appropriate, provided that in no event shall such Option be
exercisable later than the date of expiration of the term of such Option as set
forth in the Option agreement.

      11. STOCK PURCHASE RIGHTS.

            (a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other Awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid, the form of consideration that may be used to
purchase shares (which form of consideration shall be consistent with those
forms set forth in Section 9(b) above), and the time within which such person
must accept such offer. If required by the Applicable Laws, the purchase price
of Shares subject to Stock Purchase Rights shall not be less than 85% of the
Fair Market Value of the Shares as of the date of the offer, or, in the case of
a Ten Percent Holder, the price shall not be less than 100% of the Fair Market
Value of the Shares as of the date of the offer. If the Applicable Laws do not
impose the requirements set forth in the preceding sentence, the purchase price
of Shares subject to Stock Purchase Rights shall be as determined by the
Administrator (subject to any requirements imposed by applicable state law that
the Participant pay at least the per Share par value for the Shares being
exercised). The offer to purchase Shares subject to Stock Purchase Rights shall
be accepted by execution of a Restricted Stock Purchase agreement in the form
determined by the Administrator.

            (b) REPURCHASE OPTION.

                                      -13-
<PAGE>
                  (i) GENERAL. Unless the Administrator determines otherwise,
the Restricted Stock Purchase agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's Continuous Service Status for any reason. The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase agreement shall be
such price as is determined by the Administrator and permitted under the
Applicable Laws. The repurchase option shall lapse at such rate and upon such
conditions as the Administrator may determine; provided, however, that with
respect to Stock Purchase Rights granted on any date on which the Common Stock
is not a Listed Security and if then required by the Applicable Laws, with
respect to a purchaser who is not an officer, Director or Consultant of the
Company or of any Parent or Subsidiary of the Company, it shall lapse at a
minimum rate of 20% per year.

                  (ii) LEAVE OF ABSENCE. The Administrator shall have the
discretion to determine whether and to what extent the lapsing of Company
repurchase rights shall be tolled during any unpaid leave of absence; provided,
however, that in the absence of such determination, such lapsing shall be tolled
during any such unpaid leave (unless otherwise required by the Applicable Laws).
In the event of military leave, the lapsing of Company repurchase rights shall
toll during any unpaid portion of such leave, provided that, upon a
Participant's returning from military leave (under conditions that would entitle
him or her to protection upon such return under the Uniform Services Employment
and Reemployment Rights Act), he or she shall be given "vesting" credit with
respect to Shares purchased pursuant to the Restricted Stock Purchase agreement
to the same extent as would have applied had the Participant continued to
provide services to the Company throughout the leave on the same terms as he or
she was providing services immediately prior to such leave.

            (c) OTHER PROVISIONS. The Restricted Stock Purchase agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase agreements need not be the
same with respect to each purchaser.

            (d) RIGHTS AS A STOCKHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 15
of the Plan.

      12. STOCK AWARDS. In addition to Options and Stock Purchase Rights and
subject to Section 3 above, the Administrator may also, in its discretion, grant
other forms of equity-based awards ("Stock Awards") under the Plan, including
stock bonus awards, restricted stock awards (including awards involving
restricted stock units), stock appreciation rights, phantom stock rights and
similar types of awards. In accordance with Section 4 above, the Administrator
shall have the authority to determine the terms and conditions of Stock Awards.

      13. TAXES.

                                      -14-
<PAGE>
            (a) As a condition of the grant, vesting or exercise of an Award, or
of the issuance of Shares, granted under the Plan, the Participant (or in the
case of the Participant's death, the person exercising the Award) shall make
such arrangements as the Administrator may require for the satisfaction of any
applicable federal, state, local or foreign withholding tax obligations that may
arise in connection with such grant, vesting, exercise or issuance. The Company
shall not be required to issue any Award or Shares under the Plan until such
obligations are satisfied. If the Administrator allows the withholding or
surrender of Shares to satisfy a Participant's tax withholding obligations under
this Section 13 (whether pursuant to Section 13(c), (d) or (e), or otherwise),
the Administrator shall not allow Shares to be withheld in an amount that
exceeds the minimum statutory withholding rates for federal and state tax
purposes, including payroll taxes.

            (b) In the case of an Employee and in the absence of any other
arrangement, the Employee shall be deemed to have directed the Company to
withhold or collect from his or her compensation an amount sufficient to satisfy
such tax obligations from the next payroll payment otherwise payable after the
date of an exercise of the Award.

            (c) This Section 13(c) shall apply only after the date, if any, upon
which the Common Stock becomes a Listed Security. In the case of Participant
other than an Employee (or in the case of an Employee where the next payroll
payment is not sufficient to satisfy such tax obligations, with respect to any
remaining tax obligations), in the absence of any other arrangement and to the
extent permitted under the Applicable Laws, the Participant shall be deemed to
have elected to have the Company withhold from the Shares to be issued upon
exercise of the Award that number of Shares having a Fair Market Value
determined as of the applicable Tax Date (as defined below) equal to the amount
required to be withheld. For purposes of this Section 13, the Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined under the Applicable Laws (the "Tax
Date").

            (d) If permitted by the Administrator, in its discretion, a
Participant may satisfy his or her tax withholding obligations upon exercise of
an Award by surrendering to the Company Shares that have a Fair Market Value
determined as of the applicable Tax Date equal to the amount required to be
withheld. In the case of Shares previously acquired from the Company that are
surrendered under this Section 13(d), such Shares must have been owned by the
Participant for more than six (6) months on the date of surrender (or such other
period of time as is required for the Company to avoid adverse accounting
charges).

            (e) Any election or deemed election by a Participant to have Shares
withheld to satisfy tax withholding obligations under Section 13(c) or (d) above
shall be irrevocable as to the particular Shares as to which the election is
made and shall be subject to the consent or disapproval of the Administrator.
Any election by a Participant under Section 13(d) above must be made on or prior
to the applicable Tax Date.

            (f) In the event an election to have Shares withheld is made by a
Participant and the Tax Date is deferred under Section 83 of the Code because no
election is filed under

                                      -15-
<PAGE>
Section 83(b) of the Code, the Participant shall receive the full number of
Shares with respect to which the Award is exercised but such Participant shall
be unconditionally obligated to tender back to the Company the proper number of
Shares on the Tax Date.

      14. NON-TRANSFERABILITY OF AWARDS. Options, Stock Purchase Rights and
Stock Awards may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent or
distribution; provided however that, after the date, if any, upon which the
Common Stock becomes a Listed Security, the Administrator may in its discretion
grant transferable Nonstatutory Stock Options pursuant to Option agreements
specifying (i) the manner in which such Nonstatutory Stock Options are
transferable and (ii) that any such transfer shall be subject to the Applicable
Laws. The designation of a beneficiary by an Optionee will not constitute a
transfer. An Award may be exercised, during the lifetime of the holder of the
Award, only by such holder or a transferee permitted by this Section 14.

      15. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, CORPORATE TRANSACTIONS AND
CERTAIN OTHER TRANSACTIONS.

            (a) CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders of the Company or any other action required by the Applicable Laws,
the following shall be proportionately adjusted for any increase or decrease in
the number of issued Shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination, recapitalization or
reclassification of the Common Stock (including any change in the number of
Shares of Common Stock effected in connection with a change of domicile of the
Company), or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company:

                  (i) the number of Shares of Common Stock covered by each
            outstanding Award;

                  (ii) the specified numbers of Shares set forth in each of
            Section 3(a), the final sentence of Section 3 and Section 8 above;

                  (iii) the number of Shares of Common Stock that have been
            authorized for issuance under the Plan but as to which no Awards
            have yet been granted or that have been returned to the Plan upon
            cancellation or expiration of an Award; and

                  (iv) the price per Share of Common Stock covered by each such
            outstanding Award;

provided however that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Administrator, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by

                                      -16-
<PAGE>
reason thereof shall be made with respect to, the number or price of Shares of
Common Stock subject to an Award.

            (b) DISSOLUTION OR LIQUIDATION. In the event of the dissolution or
liquidation of the Company, each outstanding Award shall terminate immediately
prior to the consummation of such action, unless otherwise provided by the
Administrator.

            (c) CORPORATE TRANSACTIONS. In the event of a Corporate Transaction,
each outstanding Award shall be assumed or an equivalent award shall be
substituted by the successor corporation or a Parent or Subsidiary of such
successor corporation, unless such successor corporation does not agree to
assume the outstanding Awards or to substitute equivalent awards, in which case
such Awards shall terminate upon the consummation of the transaction.

            For purposes of this Section 15(c), an Award shall be considered
assumed, without limitation, if, at the time of issuance of the stock or other
consideration upon a Corporate Transaction, each holder of an Award would be
entitled to receive upon exercise of the Award the same number and kind of
shares of stock or the same amount of property, cash or securities as such
holder would have been entitled to receive upon the occurrence of the
transaction if the holder had been, immediately prior to such transaction, the
holder of the number of Shares of Common Stock covered by the Award at such time
(after giving effect to any adjustments in the number of Shares covered by the
Award as provided for in this Section 15); provided however that if such
consideration received in the transaction is not solely common stock of the
successor corporation or its Parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received upon
exercise of the Award to be solely common stock of the successor corporation or
its Parent equal to the Fair Market Value of the per Share consideration
received by holders of Common Stock in the transaction.

            (d) CERTAIN DISTRIBUTIONS. In the event of any distribution to the
Company's stockholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per Share of Common Stock covered by each
outstanding Award to reflect the effect of such distribution.

      16. TIME OF GRANTING AWARDS. The date of grant of an Award shall, for all
purposes, be the date on which the Administrator makes the determination
granting such Award, or such other date as is determined by the Administrator;
provided however that in the case of any Incentive Stock Option, the grant date
shall be the later of the date on which the Administrator makes the
determination granting such Incentive Stock Option or the date of commencement
of the Optionee's employment relationship with the Company. Notice of the
determination shall be given to each Employee or Consultant to whom an Award is
so granted within a reasonable time after the date of such grant.

      17. AMENDMENT AND TERMINATION OF THE PLAN.

            (a) AUTHORITY TO AMEND OR TERMINATE. Subject to the Applicable Laws,
the Board may at any time amend, alter, suspend, discontinue or terminate the
Plan, but no

                                      -17-
<PAGE>
amendment, alteration, suspension, discontinuation or termination (other than an
adjustment made pursuant to Section 15 above) shall be made that would
materially and adversely affect the rights of any Participant under any
outstanding Award, without his or her consent as required in Section 17(b)
below. To the extent required by the Applicable Laws, the Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a degree
as required.

            (b) EFFECT OF AMENDMENT OR TERMINATION. No amendment or termination
of the Plan shall materially and adversely affect Awards already granted, unless
mutually agreed otherwise between the Participant and the Administrator, which
agreement must be in writing and signed by the Participant and the Company.

      18. CONDITIONS UPON ISSUANCE OF SHARES. Notwithstanding any other
provision of the Plan or any agreement entered into by the Company pursuant to
the Plan, the Company shall not be obligated, and shall have no liability for
failure, to issue or deliver any Shares under the Plan unless such issuance or
delivery would comply with the Applicable Laws, with such compliance determined
by the Company in consultation with its legal counsel.

      As a condition to the exercise of an Award, the Company may require the
person exercising such Award to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by law.

      19. RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

      20. AGREEMENTS. Awards shall be evidenced by written agreements in such
form(s) as the Administrator shall from time to time approve.

      21. STOCKHOLDER APPROVAL. If required by the Applicable Laws, continuance
of the Plan shall be subject to approval by the stockholders of the Company
within twelve months before or after the date the Plan is adopted or amended in
any material respect requiring stockholder approval. Such stockholder approval
shall be obtained in the degree and manner required under the Applicable Laws.

      22. GOVERNING LAW. The Plan, Awards made under the Plan and any written
agreements reflecting such Awards shall be governed by and construed and
interpreted in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of law.

                                      -18-
<PAGE>
                                REDENVELOPE, INC.

                                 1999 STOCK PLAN

                          NOTICE OF STOCK OPTION GRANT

<<Optionee>>
<<OptioneeAddress1>>
<<OptioneeAddress2>>

      You have been granted an option to purchase Common Stock of RedEnvelope,
Inc., (the "Company") as follows:

      Board Approval Date:         <<BoardApprovalDate>>

      Date of Grant (Later
      of Board Approval Date or
      Commencement of
      Employment/Consulting):      <<GrantDate>>

      Exercise Price Per Share:    <<ExercisePrice>>

      Total Number of Shares
      Granted:                     <<NoofShares>>

      Total Exercise Price:        <<TotalExercisePrice>>

      Type of Option:              <<NoSharesISO>> Shares Incentive Stock
      Option

                                   <<NoSharesNSO>> Shares Nonstatutory Stock
      Option

      Expiration Date:             <<Term>>/<<ExpirDate>>

      Vesting Commencement Date:   <<VestingCommenceDate>>

      Vesting/Exercise Schedule:   So long as your employment or
                                   consulting relationship with the
                                   Company continues such that there is no
                                   interruption or termination of your
                                   Continuous Service Status, the Shares
                                   underlying this Option shall vest and
                                   become exercisable in accordance with
                                   the following schedule:  25% of the
                                   Shares subject to the Option shall vest
                                   and become exercisable on the 12 month
                                   anniversary of the Vesting Commencement
                                   Date and 1/48th of the total number of
                                   Shares subject to the Option shall vest
                                   and become exercisable each month
                                   thereafter.

                                      -19-
<PAGE>

      Vesting Acceleration:        Notwithstanding the above, in the event
                                   you are Involuntarily Terminated (as
                                   defined in the Plan) by the Company or
                                   its successor at the time of, or within
                                   12 months following consummation of,
                                   the Change of Control, then the rate at
                                   which you vest in the Option Shares
                                   shall accelerate, and this Option (or
                                   an award substituted therefore) shall
                                   become exercisable, as to 25% of the
                                   then-unvested Shares (but only up to
                                   the total number of Option Shares set
                                   forth above) as of immediately prior to
                                   the effective date of termination of
                                   your Continuous Service Status.

      Termination Period:          Option may be exercised for three (3)
                                   months after termination of employment
                                   or consulting relationship except as
                                   set out in Section 5 of the Stock
                                   Option Agreement (but in no event later
                                   than the Expiration Date).  Optionee is
                                   responsible for keeping track of these
                                   exercise periods following termination
                                   for any reason of his or her service
                                   relationship with the Company.  The
                                   Company will not provide further notice
                                   of such periods.

      Transferability:             This Option may not be transferred.

      By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the RedEnvelope, Inc. 1999 Stock Plan and the Stock
Option Agreement, both of which are attached and made a part of this document.

      In addition, you agree and acknowledge that your rights to any Shares
underlying the Option will be earned only as you provide services to the Company
over time, that the grant of the Option is not as consideration for services you
rendered to the Company prior to your Vesting Commencement Date, and that
nothing in this Notice or the attached documents confers upon you any right to
continue your employment or consulting relationship with the Company for any
period of time, nor does it interfere in any way with your right or the
Company's right to terminate that relationship at any time, for any reason, with
or without cause.

                                          RedEnvelope, Inc.

                                          By:
------------------------------                --------------------------------
<<Optionee>>                              Name:
                                               -------------------------------
                                          Title:
                                                 -----------------------------

                                      -20-
<PAGE>
                                REDENVELOPE, INC.

                                 1999 STOCK PLAN

                             STOCK OPTION AGREEMENT

         1. GRANT OF OPTION. RedEnvelope, Inc., a Delaware corporation (the
"Company"), hereby grants to <<Optionee>> ("Optionee"), an option (the "Option")
to purchase the total number of shares of Common Stock (the "Shares") set forth
in the Notice of Stock Option Grant (the "Notice"), at the exercise price per
Share set forth in the Notice (the "Exercise Price") subject to the terms,
definitions and provisions of the RedEnvelope, Inc. 1999 Stock Plan (the "Plan")
adopted by the Company, which is incorporated in this Agreement by reference.
Unless otherwise defined in this Agreement, the terms used in this Agreement
shall have the meanings defined in the Plan. This Stock Option Agreement shall
be deemed executed by the Company and Optionee upon execution by such parties of
the Notice.

         2. DESIGNATION OF OPTION. This Option is intended to be an Incentive
Stock Option as defined in Section 422 of the Code only to the extent so
designated in the Notice, and to the extent it is not so designated or to the
extent the Option does not qualify as an Incentive Stock Option, it is intended
to be a Nonstatutory Stock Option.

         Notwithstanding the above, if designated as an Incentive Stock Option,
in the event that the Shares subject to this Option (and all other Incentive
Stock Options granted to Optionee by the Company or any Parent or Subsidiary,
including under other plans of the Company) that first become exercisable in any
calendar year have an aggregate fair market value (determined for each Share as
of the date of grant of the option covering such Share) in excess of $100,000,
the Shares in excess of $100,000 shall be treated as subject to a Nonstatutory
Stock Option, in accordance with Section 5(c) of the Plan.

         3. EXERCISE OF OPTION. This Option shall be exercisable during its term
in accordance with the Vesting/Exercise Schedule set out in the Notice and with
the provisions of Section 10 of the Plan as follows:

                  (a) RIGHT TO EXERCISE.

                      (i) This Option may not be exercised for a fraction of
a share.

                      (ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Section 5 below, subject to the limitations contained in this Section 3.

                      (iii) In no event may this Option be exercised after the
Expiration Date of the Option as set forth in the Notice.
<PAGE>
            (b) METHOD OF EXERCISE.

                            (i) This Option shall be exercisable by delivering
to the Company (or its designee) a written notice of exercise (in the form
attached as Exhibit A or in any other form of notice approved by the Plan
Administrator including pursuant to electronic exercise procedures) which shall
state Optionee's election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other representations
and agreements as to the holder's investment intent with respect to such Shares
as may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by Optionee and shall be delivered to the Company
(or its designee) by such means as are determined by the Plan Administrator in
its discretion to constitute adequate delivery (including pursuant to electronic
exercise procedures). The written notice shall be accompanied by payment of the
Exercise Price. This Option shall be deemed to be exercised upon receipt by the
Company (or its designee) of such written notice accompanied by the Exercise
Price.

                            (ii) As a condition to the exercise of this Option
and as further set forth in Section 13 of the Plan, Optionee agrees to make
adequate provision for federal, state or other tax withholding obligations, if
any, which arise upon the vesting or exercise of the Option, or disposition of
Shares, whether by withholding, direct payment to the Company, or otherwise.

                            (iii) The Company is not obligated, and will have no
liability for failure, to issue or deliver any Shares upon exercise of the
Option unless such issuance or delivery would comply with the Applicable Laws,
with such compliance determined by the Company in consultation with its legal
counsel. This Option may not be exercised until such time as the Plan has been
approved by the stockholders of the Company, or if the issuance of such Shares
upon such exercise or the method of payment of consideration for such shares
would constitute a violation of any applicable federal or state securities or
other law or regulation, including any rule under Part 221 of Title 12 of the
Code of Federal Regulations as promulgated by the Federal Reserve Board. As a
condition to the exercise of this Option, the Company may require Optionee to
make any representation and warranty to the Company as may be required by the
Applicable Laws. Assuming such compliance, for income tax purposes the Shares
shall be considered transferred to Optionee on the date on which the Option is
exercised with respect to such Shares.

         4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of
the following, or a combination of the following, at the election of Optionee:

            (a) cash, check or wire transfer; or

            (b) following the date, if any, upon which the Common Stock is a
Listed Security, and if the Company is at such time permitting "same day sale"
cashless brokered exercises, delivery of a properly executed exercise notice
together with irrevocable instructions to a broker participating in such
cashless brokered exercise program to deliver promptly to the Company the amount
required to pay the exercise price (and applicable withholding taxes).

                                      -2-
<PAGE>
         5. TERMINATION OF RELATIONSHIP. Following the date of termination of
Optionee's Continuous Service Status for any reason (the "Termination Date"),
Optionee may exercise the Option only as set forth in the Notice and this
Section 5. To the extent that Optionee is not vested in the Option Shares as of
the Termination Date, or if Optionee does not exercise this Option within the
Termination Period set forth in the Notice or the termination periods set forth
below, the Option shall terminate in its entirety. In no event, may any Option
be exercised after the Expiration Date of the Option as set forth in the Notice.

            (a) TERMINATION. In the event of termination of Optionee's
Continuous Service Status other than as a result of Optionee's disability or
death, Optionee may, to the extent otherwise so entitled at the date of such
termination (the "Termination Date"), exercise this Option during the
Termination Period set forth in the Notice.

            (b) OTHER TERMINATIONS. In connection with any termination other
than a termination covered by Section 5(a), Optionee may exercise the Option
only as described below:

            (i) TERMINATION UPON DISABILITY OF OPTIONEE. In the event of
termination of Optionee's Continuous Service Status as a result of Optionee's
disability, Optionee may, but only within twelve months from the Termination
Date, exercise this Option to the extent Optionee was vested in the Option
Shares as of such Termination Date.

            (ii) DEATH OF OPTIONEE. In the event of the death of Optionee (a)
during the term of this Option and while an Employee or Consultant of the
Company and having been in Continuous Service Status since the date of grant of
the Option, or (b) within thirty (30) days after Optionee's Termination Date,
the Option may be exercised at any time within twelve months following the date
of death by Optionee's estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent Optionee was vested
in the Option Shares as of the Termination Date.

         6. NON-TRANSFERABILITY OF OPTION. [EXCEPT AS OTHERWISE SET FORTH IN THE
NOTICE,] [T]his Option may not be transferred in any manner otherwise than by
will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by him or her. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of
Optionee.

         7. TAX CONSEQUENCES. Below is a brief summary as of the date of this
Option of certain of the federal tax consequences of exercise of this Option and
disposition of the Shares under the laws in effect as of the Date of Grant. THIS
SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.

                  (a) INCENTIVE STOCK OPTION.

                           (i) TAX TREATMENT UPON EXERCISE AND SALE OF SHARES.
If this Option qualifies as an Incentive Stock Option, there will be no regular
federal income tax liability upon

                                      -3-
<PAGE>
the exercise of the Option, although the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price will be
treated as an adjustment to the alternative minimum tax for federal tax purposes
and may subject Optionee to the alternative minimum tax in the year of exercise.
If Shares issued upon exercise of an Incentive Stock Option are held for at
least one year after exercise and are disposed of at least two years after the
Option grant date, any gain realized on disposition of the Shares will also be
treated as long-term capital gain for federal income tax purposes. If Shares
issued upon exercise of an Incentive Stock Option are disposed of within such
one-year period or within two years after the Option grant date, any gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the difference between the Exercise
Price and the lesser of (i) the fair market value of the Shares on the date of
exercise, or (ii) the sale price of the Shares.

                           (ii) NOTICE OF DISQUALIFYING DISPOSITIONS. With
respect to any Shares issued upon exercise of an Incentive Stock Option, if
Optionee sells or otherwise disposes of such Shares on or before the later of
(i) the date two years after the Option grant date, or (ii) the date one year
after the date of exercise, OPTIONEE SHALL IMMEDIATELY NOTIFY THE COMPANY IN
WRITING OF SUCH DISPOSITION. Optionee acknowledges and agrees that he or she may
be subject to income tax withholding by the Company on the compensation income
recognized by Optionee from the early disposition by payment in cash or out of
the current earnings paid to Optionee.

                  (b) NONSTATUTORY STOCK OPTION. If this Option does not qualify
as an Incentive Stock Option, there may be a regular federal (and state) income
tax liability upon the exercise of the Option. Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price. If Optionee is an Employee, the Company will
be required to withhold from Optionee's compensation or collect from Optionee
and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise. If Shares issued upon exercise
of a Nonstatutory Stock Option are held for at least one year, any gain realized
on disposition of the Shares will be treated as long-term capital gain for
federal income tax purposes.

         8. EFFECT OF AGREEMENT. Optionee acknowledges receipt of a copy of the
Plan and represents that he or she is familiar with the terms and provisions
thereof (and has had an opportunity to consult counsel regarding the Option
terms), and hereby accepts this Option and agrees to be bound by its contractual
terms as set forth herein and in the Plan. Optionee hereby agrees to accept as
binding, conclusive and final all decisions and interpretations of the Plan
Administrator regarding any questions relating to the Option. In the event of a
conflict between the terms and provisions of the Plan and the terms and
provisions of the Notice and this Agreement, the Plan terms and provisions shall
prevail. The Option, including the Plan, constitutes the entire agreement
between Optionee and the Company on the subject matter hereof and supersedes all
proposals, written or oral, and all other communications between the parties
relating to such subject matter.

                                      -4-
<PAGE>
                                    EXHIBIT A

                               NOTICE OF EXERCISE

To:               RedEnvelope, Inc.
Attn:             Stock Option Administrator
Subject:          Notice of Intention to Exercise Stock Option

         This is official notice that the undersigned ("Optionee") intends to
exercise Optionee's option to purchase         shares of RedEnvelope, Inc.
Common Stock, under and pursuant to the Company's 1999 Stock Plan and the Stock
Option Agreement dated         , as follows:

                  Grant Number:
                                      ------------------------------------------

                  Date of Purchase:
                                      ------------------------------------------

                  Number of Shares:
                                      ------------------------------------------

                  Purchase Price:
                                      ------------------------------------------

                  Method of Payment
                  of Purchase Price:
                                      ------------------------------------------

         Social Security No.:
                                    --------------------------------------------

         The shares should be issued as follows:

                  Name:
                               ----------------------------------------

                  Address:
                               ----------------------------------------

                               ----------------------------------------

                               ----------------------------------------

                  Signed:
                               ----------------------------------------

                  Date:
                               ----------------------------------------

                                      -5-
<PAGE>
                                REDENVELOPE, INC.

                                 1999 STOCK PLAN

                       RESTRICTED STOCK PURCHASE AGREEMENT

         This Restricted Stock Purchase Agreement (the "Agreement") is made as
of <<Date>>, by and between RedEnvelope, Inc., a Delaware corporation (the
"Company"), and <<Purchaser>> ("Purchaser") pursuant to the Company's 1999 Stock
Plan (the "Plan") Stock Plan. To the extent any capitalized terms used in this
Agreement are not defined, they shall have the meaning ascribed to them in the
Plan.

         1. SALE OF STOCK. Subject to the terms and conditions of this
Agreement, on the Purchase Date (as defined below) the Company will issue and
sell to Purchaser, and Purchaser agrees to purchase from the Company,
<<NoofShares>> shares of the Company's Common Stock (the "Shares") at a purchase
price of $<<PurchasePrice>> per Share for a total purchase price of
$<<TotalPurchasePrice>>. The term "Shares" refers to the purchased Shares and
all securities received in replacement of the Shares or as stock dividends or
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares.

         2. PURCHASE. The purchase and sale of the Shares under this Agreement
shall occur at the principal office of the Company, in accordance with Section
11 of the Plan, simultaneously with the execution of this Agreement by the
parties or on such other date as the Company and Purchaser shall agree (the
"Purchase Date"). On the Purchase Date, the Company will deliver to Purchaser a
certificate representing the Shares to be purchased by Purchaser (which shall be
issued in Purchaser's name) against payment of the purchase price therefor by
Purchaser by check made payable to the Company.

         3. LIMITATIONS ON TRANSFER. In addition to any other limitation on
transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares while the Shares are subject
to the Company's Repurchase Option (as defined below). After any Shares have
been released from the Repurchase Option, Purchaser shall not assign, encumber
or dispose of any interest in such Shares except in compliance with the
provisions below and applicable securities laws.

                  (a) REPURCHASE OPTION.

                           (i) In the event of the voluntary or involuntary
termination of Purchaser's Continuous Service Status for any reason (including
death or disability), with or without cause, the Company shall upon the date of
such termination (the "Termination Date") have an irrevocable, exclusive option
(the "Repurchase Option") for a period of [90 DAYS] from such date to repurchase
all or any portion of the Shares held by Purchaser as of the Termination Date
which have not yet been released from the Company's Repurchase Option at [THE
ORIGINAL

                                      -6-
<PAGE>
PURCHASE PRICE PER SHARE SPECIFIED IN SECTION 1] (adjusted for any stock splits,
stock dividends and the like).

                           (ii) Unless the Company notifies Purchaser within [90
DAYS] from the date of termination of Purchaser's employment or consulting
relationship that it does not intend to exercise its Repurchase Option with
respect to some or all of the Shares, the Repurchase Option shall be deemed
automatically exercised by the Company as of the [90TH DAY] following such
termination, provided that the Company may notify Purchaser that it is
exercising its Repurchase Option as of a date prior to such [90TH DAY]. Unless
Purchaser is otherwise notified by the Company pursuant to the preceding
sentence that the Company does not intend to exercise its Repurchase Option as
to some or all of the Shares to which it applies at the time of termination,
execution of this Agreement by Purchaser constitutes written notice to Purchaser
of the Company's intention to exercise its Repurchase Option with respect to all
Shares to which such Repurchase Option applies. The Company, at its choice, may
satisfy its payment obligation to Purchaser with respect to exercise of the
Repurchase Option by either (A) delivering a check to Purchaser in the amount of
the purchase price for the Shares being repurchased, or (B) [IN THE EVENT
PURCHASER IS INDEBTED TO THE COMPANY, CANCELING AN AMOUNT OF SUCH INDEBTEDNESS
EQUAL TO THE PURCHASE PRICE FOR THE SHARES BEING REPURCHASED, OR (C) BY A
COMBINATION OF (A) AND (B) SO THAT THE COMBINED PAYMENT AND CANCELLATION OF
INDEBTEDNESS EQUALS SUCH PURCHASE PRICE]. In the event of any deemed automatic
exercise of the Repurchase Option pursuant to this Section 3(a)(ii) in which
Purchaser is indebted to the Company, such indebtedness equal to the purchase
price of the Shares being repurchased shall be deemed automatically canceled as
of the [90TH DAY] following termination of Purchaser's employment or consulting
relationship unless the Company otherwise satisfies its payment obligations. As
a result of any repurchase of Shares pursuant to this Section 3(a), the Company
shall become the legal and beneficial owner of the Shares being repurchased and
shall have all rights and interest therein or related thereto, and the Company
shall have the right to transfer to its own name the number of Shares being
repurchased by the Company, without further action by Purchaser.

                           (iii) <<Initial%Unvested>> of the Shares shall
initially be subject to the Repurchase Option. <<CliffVestAmount>> of the total
number of shares shall be released from the Repurchase Option on the
<<CliffMonthNumber>> month anniversary of the Vesting Commencement Date (as set
forth on the signature page of this Agreement), and an additional
<<MonthlyVesting%>> of the total number of Shares shall be released from the
Repurchase Option each month after the date of issuance of the Shares on the
Monthly Vesting Date (as set forth on the signature page of this Agreement),
until all Shares are released from the Repurchase Option. Fractional shares
shall be rounded to the nearest whole share. Notwithstanding the above, in the
event that the Purchaser is Involuntarily Terminated (as defined in the Plan) at
the time of or within 12 months following consummation of the Change of Control,
then the rate at which the Company's Repurchase Option lapses shall accelerate
as to 25% of the Shares that would otherwise then be subject to such Repurchase
Right (but only up to the total number of Shares set forth in Section 1 above)
as of immediately prior to the effective date of termination of the Purchaser's
Continuous Service Status.

                                      -7-
<PAGE>
                  (b) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of
Shares or any interest therein will receive and hold such Shares or interest
subject to the provisions of this Agreement, including insofar as applicable the
Company's Repurchase Option. Any sale or transfer of the Shares shall be void
unless the provisions of this Agreement are satisfied.

                  (c) TERMINATION OF RIGHTS. Upon the expiration or exercise of
the Repurchase Option, a new certificate or certificates representing the Shares
not repurchased shall be issued, on request, without the legend referred to in
Section 5(a) below and delivered to Purchaser.

         4. ESCROW OF UNVESTED SHARES. For purposes of facilitating the
enforcement of the provisions of Section 3 above, Purchaser agrees, immediately
upon receipt of the certificate(s) for the Shares subject to the Repurchase
Option, to deliver such certificate(s), together with an Assignment Separate
from Certificate in the form attached to this Agreement as Exhibit A executed by
Purchaser and by Purchaser's spouse (if required for transfer), in blank, to the
Secretary of the Company, or the Secretary's designee, to hold such
certificate(s) and Assignment Separate from Certificate in escrow and to take
all such actions and to effectuate all such transfers and/or releases as are in
accordance with the terms of this Agreement. Purchaser hereby acknowledges that
the Secretary of the Company, or the Secretary's designee, is so appointed as
the escrow holder with the foregoing authorities as a material inducement to
make this Agreement and that said appointment is coupled with an interest and is
accordingly irrevocable. Purchaser agrees that said escrow holder shall not be
liable to any party hereof (or to any other party). The escrow holder may rely
upon any letter, notice or other document executed by any signature purported to
be genuine and may resign at any time. Purchaser agrees that if the Secretary of
the Company, or the Secretary's designee, resigns as escrow holder for any or no
reason, the Board of Directors of the Company shall have the power to appoint a
successor to serve as escrow holder pursuant to the terms of this Agreement.

         5. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.

                  (a) LEGENDS. The certificate or certificates representing the
Shares shall bear the following legend (as well as any legends required by
applicable state and federal corporate and securities laws):

                      THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.

                   (b) STOP-TRANSFER NOTICES. Purchaser agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

                  (c) REFUSAL TO TRANSFER. The Company shall not be required (i)
to transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the

                                      -8-
<PAGE>
provisions of this Agreement or (ii) to treat as owner of such Shares or to
accord the right to vote or pay dividends to any purchaser or other transferee
to whom such Shares shall have been so transferred.

         6. NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a Parent, Subsidiary or
Affiliate of the Company, to terminate Purchaser's employment or consulting
relationship, for any reason, with or without cause.

         7. SECTION 83(b) ELECTION. Purchaser understands that Section 83(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary
income the difference between the amount paid for the Shares and the fair market
value of the Shares as of the date any restrictions on the Shares lapse. In this
context, "restriction" means the right of the Company to buy back the Shares
pursuant to the Repurchase Option set forth in Section 3(a) of this Agreement.
Purchaser understands that Purchaser may elect to be taxed at the time the
Shares are purchased, rather than when and as the Repurchase Option expires, by
filing an election under Section 83(b) (an "83(b) Election") of the Code with
the Internal Revenue Service within 30 days from the date of purchase. Even if
the fair market value of the Shares at the time of the execution of this
Agreement equals the amount paid for the Shares, the election must be made to
avoid income under Section 83(a) in the future. Purchaser understands that
failure to file such an election in a timely manner may result in adverse tax
consequences for Purchaser. Purchaser further understands that an additional
copy of such election form should be filed with his or her federal income tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that the foregoing is only a summary of the effect of
United States federal income taxation with respect to purchase of the Shares
hereunder, and does not purport to be complete. Purchaser further acknowledges
that the Company has directed Purchaser to seek independent advice regarding the
applicable provisions of the Code, the income tax laws of any municipality,
state or foreign country in which Purchaser may reside, the tax consequences of
Purchaser's death and the decision as to whether or not to file an 83(b)
Election in connection with the acquisition of the Shares.

         Purchaser agrees that he will execute and deliver to the Company with
this executed Agreement a copy of the Acknowledgment and Statement of Decision
Regarding Section 83(b) Election (the "Acknowledgment"), attached hereto as
Exhibit B. Purchaser further agrees that Purchaser will execute and submit with
the Acknowledgment a copy of the 83(b) Election, attached hereto as Exhibit C,
if Purchaser has indicated in the Acknowledgment his or her decision to make
such an election.

         8. 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
Delaware, without giving effect to principles of conflicts of law.

                                      -9-
<PAGE>
            (b) ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This 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) SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, 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 be enforceable in accordance with its terms.

            (d) 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.

            (e) NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient when delivered personally or
sent by telegram or fax or 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 or fax number as set forth below or as
subsequently modified by written notice.

            (f) 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.

            (g) SUCCESSORS AND ASSIGNS. The rights and benefits of this
Agreement shall inure to the benefit of, and be enforceable by the Company's
successors and assigns. The rights and obligations of Purchaser under this
Agreement may only be assigned with the prior written consent of the Company.

                            [Signature Page Follows]

                                      -10-
<PAGE>
         The parties have executed this Agreement as of the date first set forth
above.

                                        COMPANY:

                                        REDENVELOPE, INC.

                                        By:
                                           -------------------------------------
                                        Title:
                                              ----------------------------------
                                        Address:
                                                --------------------------------

                                                --------------------------------

         PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT
TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE OR
CONSULTANT AT THE WILL OF THE COMPANY. PURCHASER FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS AGREEMENT SHALL CONFER UPON PURCHASER ANY RIGHT WITH
RESPECT TO CONTINUATION OF SUCH EMPLOYMENT OR CONSULTING RELATIONSHIP WITH THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH PURCHASER'S RIGHT OR THE
COMPANY'S RIGHT TO TERMINATE PURCHASER'S EMPLOYMENT OR CONSULTING RELATIONSHIP
AT ANY TIME, WITH OR WITHOUT CAUSE.

                                                     PURCHASER:

                                                     <<PURCHASER>>

                                                     ---------------------------
                                                     (Signature)

                                                     Address:

                                                     ---------------------------

                                                     ---------------------------

Vesting Commencement
Date:
     --------------------

I, _____________________, spouse of <<Purchaser>>, have read and
hereby approve the foregoing Agreement. In consideration of the Company's
granting my spouse the right to purchase the Shares as set forth in the
Agreement, I hereby agree to be irrevocably bound by the Agreement and further
agree that any community property or similar interest that I may have in the
Shares shall be similarly bound by the Agreement. I hereby appoint my spouse as
my attorney-in-fact with respect to any amendment or exercise of any rights
under the Agreement.

                                                     ---------------------------
                                                      Spouse of <<Purchaser>>

                                      -11-
<PAGE>
                                    EXHIBIT A

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

         FOR VALUE RECEIVED and pursuant to that certain Common Stock Purchase
Agreement between the undersigned ("Purchaser") and RedEnvelope, Inc. (the
"Company") dated <<Date>> (the "Agreement"), Purchaser hereby sells, assigns and
transfers unto the Company                              (      ) shares
of the Common Stock of the Company standing in Purchaser's name on the Company's
books and represented by Certificate No.     , and does hereby irrevocably
constitute and appoint                           to transfer said stock on the
books of the Company with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.

Dated:
      ------------------------

                                         Signature:

                                         ------------------------------
                                        <<Purchaser>>

                                         ------------------------------
                                         Spouse of <<Purchaser>> (if applicable)

Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to enable the Company to exercise its repurchase
option set forth in the Agreement without requiring additional signatures on the
part of Purchaser.
<PAGE>
                                    EXHIBIT B

                    ACKNOWLEDGMENT AND STATEMENT OF DECISION
                        REGARDING SECTION 83(b) ELECTION

         The undersigned has entered a stock purchase agreement with
RedEnvelope, Inc., a Delaware corporation (the "Company"), pursuant to which the
undersigned is purchasing                shares of Common Stock of the Company
(the "Shares"). In connection with the purchase of the Shares, the undersigned
hereby represents as follows:

         1. The undersigned has carefully reviewed the stock purchase agreement
pursuant to which the undersigned is purchasing the Shares.

         2. The undersigned either [check and complete as applicable]:

         (a)      has consulted, and has been fully advised by, the
                  undersigned's own tax advisor,                        ,
                  whose business address is                             ,
                  regarding the federal, state and local tax consequences of
                  purchasing the Shares, and particularly regarding the
                  advisability of making elections pursuant to Section 83(b) of
                  the Internal Revenue Code of 1986, as amended (the "Code") and
                  pursuant to the corresponding provisions, if any, of
                  applicable state law; or

         (b)      has knowingly chosen not to consult such a tax advisor.

         3.       The undersigned hereby states that the undersigned has decided
                  [check as applicable]:

         (a)      to make an election pursuant to Section 83(b) of the
                  Code, and is submitting to the Company, together with the
                  undersigned's executed Common Stock Purchase Agreement, an
                  executed form entitled "Election Under Section 83(b) of the
                  Internal Revenue Code of 1986"; or

         (b)      not to make an election pursuant to Section 83(b) of the Code.
<PAGE>
         4. Neither the Company nor any subsidiary or representative of
the Company has made any warranty or representation to the undersigned with
respect to the tax consequences of the undersigned's purchase of the Shares or
of the making or failure to make an election pursuant to Section 83(b) of the
Code or the corresponding provisions, if any, of applicable state law.

Date:
       ------------------------------              -----------------------------
                                                   <<Purchaser>>

Date:
      ------------------------------              ------------------------------
                                                  Spouse of <<Purchaser>>
<PAGE>
                                    EXHIBIT C

                          ELECTION UNDER SECTION 83(b)

                      OF THE INTERNAL REVENUE CODE OF 1986

         The undersigned taxpayer hereby elects, pursuant to Section 83(b) of
the Internal Revenue Code, to include in taxpayer's gross income for the current
taxable year, the amount of any compensation taxable to taxpayer in connection
with taxpayer's receipt of the property described below:

1.       The name, address, taxpayer identification number and taxable year of
         the undersigned are as follows:

         NAME OF TAXPAYER: <<Purchaser>>

         NAME OF SPOUSE:

         ADDRESS:
                         -------------------------------------

                         -------------------------------------

         IDENTIFICATION NO. OF TAXPAYER:

         IDENTIFICATION NO. OF SPOUSE:

         TAXABLE YEAR:

2.       The property with respect to which the election is made is described as
         follows:               shares of the Common Stock $     par value, of
         RedEnvelope, Inc., a Delaware corporation (the "Company").

3.       The date on which the property was transferred is:

4.       The property is subject to the following restrictions:

         Repurchase option at cost in favor of the Company upon termination of
         taxpayer's employment or consulting relationship.

5.       The fair market value at the time of transfer, determined without
         regard to any restriction other than a restriction which by its terms
         will never lapse, of such property is: $               .

6.       The amount (if any) paid for such property:  $

The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.

The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.

Dated:
      ----------------                             -----------------------------
                                                   Taxpayer
Dated:
      ----------------                             -----------------------------
                                                   Spouse of Taxpayer
<PAGE>
                                     RECEIPT

         RedEnvelope, Inc. hereby acknowledges receipt of a check in the amount
of $___________ given by <<Purchaser>> as consideration for Certificate No. ____
________________ for __________ shares of Common Stock of RedEnvelope, Inc.

Dated:
      -------------

                                               RedEnvelope, Inc.

                                           By:
                                                  ---------------------------

                                           Title:
                                                  ------------------------------
<PAGE>
                               RECEIPT AND CONSENT

         The undersigned hereby acknowledges receipt of a photocopy of
Certificate No.         for             shares of Common Stock of RedEnvelope,
Inc. (the "Company").

         The undersigned further acknowledges that the Secretary of the Company,
or his or her designee, is acting as escrow holder pursuant to the Restricted
Stock Purchase Agreement Purchaser has previously entered into with the Company.
As escrow holder, the Secretary of the Company, or his or her designee, holds
the original of the aforementioned certificate issued in the undersigned's name.

Dated:
      -----------------

                                                         -----------------------
                                                         <<Purchaser>><PAGE>
                                                                   EXHIBIT 10.21

                                REDENVELOPE, INC.

                        2003 DIRECTORS' STOCK OPTION PLAN

      1. PURPOSES OF THE PLAN. The purposes of this Directors' Stock Option Plan
are to attract and retain the best available personnel for service as Directors
of the Company, to provide additional incentive to the Outside Directors of the
Company to serve as Directors, and to encourage their continued service on the
Board.

            All options granted hereunder shall be nonstatutory stock options.

      2. DEFINITIONS. As used herein, the following definitions shall apply:

            (a) "APPLICABLE LAWS" means the legal requirements relating to the
administration of stock option plans, including under applicable U.S. state
corporate laws, U.S. federal and applicable state securities laws, other U.S.
federal and state laws, the Code, any Stock Exchange rules or regulations and
the applicable laws, rules and regulations of any other country or jurisdiction
where Options are granted under the Plan, as such laws, rules, regulations and
requirements shall be in place from time to time.

            (b) "BOARD" means the Board of Directors of the Company.

            (c) "CHANGE OF CONTROL" means any of the following transactions:

                  (1) a sale of all or substantially all of the Company's
assets,

                  (2) any merger, consolidation or other business combination
transaction of the Company with or into another corporation, entity or person,
other than a transaction in which the holders of at least a majority of the
shares of voting capital stock of the Company outstanding immediately prior to
such transaction continue to hold (either by such shares remaining outstanding
or by their being converted into shares of voting capital stock of the surviving
entity) a majority of the total voting power represented by the shares of voting
capital stock of the Company (or the surviving entity) outstanding immediately
after such transaction,

                  (3) the direct or indirect acquisition (including by way of a
tender or exchange offer) by any person, or persons acting as a group, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing a majority of the voting power of the then outstanding shares of
capital stock of the Company, or

                  (4) the individuals who, as of the effective date of the
Company's initial public offering of its securities, are members of the Board
(the "Incumbent Board"), cease for any reason to constitute at least fifty
percent (50%) of the Board; provided however that if the election, or nomination
for election by the Company's stockholders, of any new director was
<PAGE>
approved by a vote of at least fifty percent (50%) of the Incumbent Board, such
new director shall be considered as a member of the Incumbent Board.

            (d) "CODE" means the Internal Revenue Code of 1986, as amended.

            (e) "COMMON STOCK" means the Common Stock of the Company.

            (f) "COMPANY" means RedEnvelope, Inc., a Delaware corporation.

            (g) "CONTINUOUS STATUS AS A DIRECTOR" means the absence of any
interruption or termination of service as a Director.

            (h) "DIRECTOR" means a member of the Board.

            (i) "EMPLOYEE" means any person, including any officer or Director,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient in and of itself to
constitute "employment" by the Company.

            (j) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

            (k) "FAMILY MEMBER" means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Optionee's household (other than a tenant or employee), a trust in which these
persons have more than fifty percent of the beneficial interest, a foundation in
which these persons (or the Optionee) control the management of assets, and any
other entity in which these persons (or the Optionee) own more than fifty
percent of the voting interests.

            (l) "OPTION" means a stock option granted pursuant to the Plan. All
options shall be nonstatutory stock options (i.e., options that are not intended
to qualify as incentive stock options under Section 422 of the Code).

            (m) "OPTIONED STOCK" means the Common Stock subject to an Option.

            (n) "OPTIONEE" means an Outside Director who receives an Option.

            (o) "OUTSIDE DIRECTOR" means a Director who is not an Employee.

            (p) "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

            (q) "PLAN" means this 2003 Directors' Stock Option Plan.

            (r) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.

                                      -2-
<PAGE>
            (s) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

      3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares which may be sold under the
Plan is 5,265,000 Shares of Common Stock (before giving effect to a stock split
effected in connection with the Company's initial public offering). The Shares
may be authorized, but unissued, or reacquired Common Stock.

      If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan has been terminated, become available for future grant
under the Plan. In addition, any Shares of Common Stock that are retained by the
Company upon exercise of an Option in order to satisfy the exercise price for
such Option, or any withholding taxes due with respect to such exercise, shall
be treated as not issued and shall continue to be available under the Plan. If
Shares that were acquired upon exercise of an Option are subsequently
repurchased by the Company, such Shares shall not in any event be returned to
the Plan and shall not become available for future grant under the Plan.

      4. ADMINISTRATION OF AND GRANTS OF OPTIONS UNDER THE PLAN.

            (a) ADMINISTRATOR. Except as otherwise required herein, the Plan
shall be administered by the Board.

            (b) PROCEDURE FOR GRANTS. All grants of Options hereunder shall be
automatic and nondiscretionary and shall be made strictly in accordance with the
following provisions:

                  (i) No person shall have any discretion to select which
Outside Directors shall be granted Options or to determine the number of Shares
to be covered by Options granted to Outside Directors.

                  (ii) Each Outside Director shall automatically be granted an
Option (the "Initial Option") to purchase 468,400 Shares (before giving effect
to a stock split effected in connection with the Company's initial public
offering) on the date on which he or she first becomes an Outside Director
(where such date occurs after the effective date of this Plan), whether through
election by the stockholders of the Company or appointment by the Board of
Directors to fill a vacancy; provided however that a Director who is also an
Employee who becomes an Outside Director by virtue of ceasing to be an Employee
(while remaining a Director) shall not be eligible to receive an Initial Option.

                   (iii) Each Outside Director, including an Outside Director
who did not receive an Initial Option grant, shall be automatically granted an
Option (the "Annual Option") to purchase 117,100 Shares (before giving effect to
a stock split effected in connection with the Company's initial public offering)
on the date of each Annual Meeting of the Company's stockholders immediately
following which such Outside Director is serving on the Board,

                                      -3-
<PAGE>
provided that, on such date, he or she shall have served on the Board as an
Outside Director for at least six (6) months prior to the date of such Annual
Meeting; provided however that, notwithstanding the above, the number of Shares
subject to an Annual Option granted to an Outside Director who is Chairman of
the Board immediately following the Annual Meeting of the Company's
stockholders shall be 234,200 Shares (before giving effect to a stock split
effected in connection with the Company's initial public offering).

                  (iv) Notwithstanding the provisions of subsections (ii) and
(iii) hereof, in the event that a grant would cause the number of Shares subject
to outstanding Options plus the number of Shares previously purchased upon
exercise of Options to exceed the aggregate number of Shares reserved for
issuance under the Plan (as set forth in Section 3 above subject to Section 11
below), then each such automatic grant shall be for that number of Shares
determined by dividing the total number of Shares remaining available for grant
by the number of Outside Directors receiving an Option on the automatic grant
date. Any further grants shall then be deferred until such time, if any, as
additional Shares become available for grant under the Plan through action of
the stockholders to increase the number of Shares which may be issued under the
Plan or through cancellation or expiration of Options previously granted
hereunder.

                  (v) Notwithstanding the provisions of subsections (ii) and
(iii) hereof, any grant of an Option made before the Company has obtained
stockholder approval of the Plan in accordance with Section 17 hereof shall be
conditioned upon obtaining such stockholder approval of the Plan in accordance
with Section 17 hereof.

                  (vi) The terms of each Initial Option granted hereunder shall
be as follows:

                        (1) each Initial Option shall be exercisable only while
the Outside Director remains a Director of the Company, except as set forth in
Section 9 below;

                        (2) the exercise price per Share shall be 100% of the
fair market value per Share on the date of grant of each Initial Option,
determined in accordance with Section 8 hereof;

                        (3) each Initial Option shall vest and become
exercisable at the rate of twenty five percent (25%) of the Shares subject to
the Initial Option on each of the first, second, third and fourth anniversaries
of the date of grant of the Initial Option (subject to the continuing service
requirement set forth in Section 4(b)(vi)(1) above).

                  (vii) The terms of each Annual Option granted hereunder shall
be as follows:

                        (1) each Annual Option shall be exercisable only while
the Outside Director remains a Director of the Company, except as set forth in
Section 9 below;

                        (2) the exercise price per Share shall be 100% of the
fair market value per Share on the date of grant of each Annual Option,
determined in accordance with Section 8 hereof;

                        (3) each Annual Option shall vest and become exercisable
at the rate of one hundred percent (100%) of the Shares subject to the Annual
Option on the day

                                      -4-
<PAGE>
before the first anniversary of the date of grant of the Annual Option (subject
to the continuing service requirement set forth in Section 4(b)(vii)(1) above).

            (c) POWERS OF THE BOARD. Subject to the provisions and restrictions
of the Plan, the Board shall have the authority, in its discretion: (i) to
determine, upon review of relevant information and in accordance with Section
8(b) of the Plan, the fair market value of the Common Stock; (ii) to determine
the exercise price per Share of Options to be granted, which exercise price
shall be determined in accordance with Section 8 of the Plan; (iii) to interpret
the Plan; (iv) to prescribe, amend and rescind rules and regulations relating to
the Plan; (v) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted
hereunder; and (vi) to make all other determinations deemed necessary or
advisable for the administration of the Plan.

            (d) EFFECT OF BOARD'S DECISION. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.

            (e) SUSPENSION OR TERMINATION OF OPTION. If the Chief Executive
Officer or his or her designee reasonably believes that an Optionee has
committed an act of misconduct, such officer may suspend the Optionee's right to
exercise any option pending a determination by the Board (excluding the Outside
Director accused of such misconduct). If the Board (excluding the Outside
Director accused of such misconduct) determines an Optionee has committed an act
of embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the
Company, breach of fiduciary duty or deliberate disregard of the Company rules
resulting in loss, damage or injury to the Company, or if an Optionee makes an
unauthorized disclosure of any Company trade secret or confidential information,
engages in any conduct constituting unfair competition, induces any Company
customer to breach a contract with the Company or induces any principal for whom
the Company acts as agent to terminate such agency relationship, neither the
Optionee nor his or her estate shall be entitled to exercise any Option
whatsoever. In making such determination, the Board of Directors (excluding the
Outside Director accused of such misconduct) shall act fairly and shall give the
Optionee an opportunity to appear and present evidence on Optionee's behalf at a
hearing before the Board or a committee of the Board.

      5. ELIGIBILITY. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) above. An Outside Director who has been granted an Option may, if
he or she is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.

            The Plan shall not confer upon any Optionee any right with respect
to continuation of service as a Director or nomination to serve as a Director,
nor shall it interfere in any way with any rights which the Director or the
Company may have to terminate his or her directorship at any time.

      6. TERM OF PLAN; EFFECTIVE DATE. The Plan shall become effective on the
effectiveness of the registration statement under the Securities Act of 1933, as
amended, relating

                                      -5-
<PAGE>
to the Company's initial public offering of securities. It shall continue in
effect for a term of ten (10) years unless sooner terminated under Section 13 of
the Plan.

      7. TERM OF OPTIONS. The term of each Option shall be ten (10) years from
the date of grant thereof unless an Option terminates sooner pursuant to Section
9 below.

      8. EXERCISE PRICE AND CONSIDERATION.

            (a) EXERCISE PRICE. The per Share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be 100% of the fair market
value per Share on the date of grant of the Option.

            (b) FAIR MARKET VALUE. The fair market value shall be determined by
the Board; provided however that in the event the Common Stock is traded on the
Nasdaq National Market or listed on a stock exchange, the fair market value per
Share shall be the closing sales price on such system or exchange on the date of
grant of the Option (or, in the event that the Common Stock is not traded on
such date, on the immediately preceding trading date), as reported in The Wall
Street Journal, or if there is a public market for the Common Stock but the
Common Stock is not traded on the Nasdaq National Market or listed on a stock
exchange, the fair market value per Share shall be the mean of the bid and asked
prices of the Common Stock in the over-the-counter market on the date of grant,
as reported in The Wall Street Journal (or, if not so reported, as otherwise
reported by the National Association of Securities Dealers Automated Quotation
("Nasdaq") System).

            (c) FORM OF CONSIDERATION. The consideration to be paid for the
Shares to be issued upon exercise of an Option shall consist entirely of (i)
cash or check, (ii) other Shares of Common Stock having a fair market value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which the Option shall be exercised (which shall have been held for at least six
months), (iii) if the Company is then allowing exercise of Options pursuant to a
same-day sale/cashless-brokered exercise program, the consideration received by
the Company from a broker pursuant to such a program (provided that such a
program shall not involve the Company's extending or arranging for the extension
of credit to an Optionee); or (iv) any combination of such methods of payment
and/or any other consideration or method of payment as shall be permitted under
applicable corporate law.

      9. EXERCISE OF OPTION.

            (a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option
granted hereunder shall be exercisable at such times as are set forth in Section
4(b) above; provided however that no Options shall be exercisable prior to
stockholder approval of the Plan in accordance with Section 17 below has been
obtained.

                  An Option may not be exercised for a fraction of a Share.

                  An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Option by the

                                      -6-
<PAGE>
person entitled to exercise the Option and full payment for the Shares with
respect to which the Option is exercised has been received by the Company (or
its designee). Full payment may consist of any consideration and method of
payment allowable under Section 8(c) of the Plan. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. A share certificate for the number of Shares so acquired
shall be issued to the Optionee as soon as practicable after exercise of the
Option. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as
provided in Section 11 of the Plan.

                  Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

            (b) TERMINATION OF CONTINUOUS STATUS AS A DIRECTOR. If an Outside
Director ceases to serve as a Director for any reason (other than as a result of
his or her death or disability), he or she may, but only within ninety (90) days
after the date he or she ceases to be a Director of the Company, exercise his or
her Option to the extent that he or she was vested in the Optioned Stock at the
date of such termination. Notwithstanding the foregoing, in no event may the
Option be exercised after its term set forth in Section 7 has expired. To the
extent that such Outside Director was not vested in the Optioned Stock at the
date of such termination, or does not exercise such Option (to the extent he or
she was vested in the Optioned Stock) within the time specified above, the
Option shall terminate and the Shares underlying the unexercised portion of the
Option shall revert to the Plan.

            (c) DISABILITY OF OPTIONEE. Notwithstanding Section 9(b) above, in
the event a Director is unable to continue his or her service as a Director with
the Company as a result of his or her total and permanent disability (as defined
in Section 22(e)(3) of the Code), he or she may, but only within twelve (12)
months from the date of such termination, exercise his or her Option to the
extent he or she was vested in the Optioned Stock at the date of such
termination. Notwithstanding the foregoing, in no event may the Option be
exercised after its term set forth in Section 7 has expired. To the extent that
he or she was not vested in the Optioned Stock at the date of termination, or if
he or she does not exercise such Option (to the extent he or she was vested in
the Optioned Stock) within the time specified above, the Option shall terminate
and the Shares underlying the unexercised portion of the Option shall revert to
the Plan.

            (d) DEATH OF OPTIONEE. Notwithstanding Section 9(b) above, in the
event of the death of an Optionee: (A) during the term of the Option who is, at
the time of his or her death, a Director of the Company and who shall have been
in Continuous Status as a Director since the date of grant of the Option, or (B)
three (3) months after the termination of Continuous Status as a Director, the
Option may be exercised, at any time within twelve (12) months following the
date of death, by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent the
Optionee was vested in the Optioned Stock on the last day of his or her
Continuous Status as a Director.

                                      -7-
<PAGE>
Notwithstanding the foregoing, in no event may the Option be exercised after its
term set forth in Section 7 has expired. To the extent that an Optionee was not
vested in the Optioned Stock at the date of death or termination, or if he or
she does not exercise such Option (to the extent he or she was vested in the
Optioned Stock) within the time specified above, the Option shall terminate and
the Shares underlying the unexercised portion of the Option shall revert to the
Plan.

      10. NONTRANSFERABILITY OF OPTIONS. The Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than (a)
by will, (b) by the laws of descent or distribution, or (c) by gift or pursuant
to a domestic relations order to a Family Member of the Optionee. The
designation of a beneficiary by an Optionee does not constitute a transfer. An
Option may be exercised during the lifetime of an Optionee only by the Optionee
or a transferee permitted by this Section.

      11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS.

            (a) ADJUSTMENT. Subject to any required action by the stockholders
of the Company, the number of shares of Common Stock covered by each outstanding
Option, the number of Shares of Common Stock set forth in Sections 4(b)(ii) and
(iii) above, and the number of Shares of Common Stock which have been authorized
for issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the price per Share of Common Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock (including any such change in the number of Shares of Common
Stock effected in connection with a change in domicile of the Company) or any
other increase or decrease in the number of issued Shares of Common Stock
effected without receipt of consideration by the Company; provided however that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option.

            (b) CHANGE OF CONTROL. In the event of a Change of Control,
outstanding Options shall be assumed, or equivalent awards shall be substituted
for such outstanding Options, by the successor corporation or its parent or
subsidiary (the "Successor Corporation"). In the event that the Successor
Corporation does not agree to assume, or substitute new awards for, outstanding
Options, then the vesting and exercisability of outstanding Options shall
accelerate in full as of immediately prior to consummation of the Change of
Control and the Options shall terminate effective upon consummation of the
Change of Control.

            With regard to Options that are assumed, or with respect to which
new awards are substituted for, in connection with a Change of Control, in the
event the Continuous Status as a Director of an Optionee holding such an Option
is involuntarily terminated other than for cause

                                      -8-
<PAGE>
at the time of or within 12 months following the Change of Control, then the
vesting of each such outstanding Option shall accelerate such that each Optionee
shall have the right to exercise his or her Option as to an additional 25% of
the Optioned Stock that would, but for this sentence, otherwise be unvested
(such vesting acceleration to be effective as of immediately prior to the
effective time of termination of the Optionee's Continuous Status of a
Director).

            For purposes of this Section 11(b), an Option shall be considered
assumed, without limitation, if, at the time of issuance of the stock or other
consideration upon such Change of Control, each Optionee would be entitled to
receive upon exercise of an Option the same number and kind of shares of stock
or the same amount of property, cash or securities as the Optionee would have
been entitled to receive upon the occurrence of such transaction if the Optionee
had been, immediately prior to such transaction, the holder of the number of
Shares of Common Stock covered by the Option at such time (after giving effect
to any adjustments in the number of Shares covered by the Option as provided for
in this Section 11); provided however that if such consideration received in the
transaction was not solely common stock of the Successor Corporation, the
Administrator may, with the consent of the Successor Corporation, provide for
the consideration to be received upon exercise of the Option to be solely common
stock of the Successor Corporation equal to the fair market value of the per
Share consideration received by holders of Common Stock in the transaction.

            (c) CERTAIN DISTRIBUTIONS. In the event of any distribution to the
Company's stockholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per Share of Common Stock covered by each
outstanding Option to reflect the effect of such distribution.

      12. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of an Option grant shall be given to each Outside Director to whom an
Option is so granted within a reasonable time after the date of such grant.

      13. AMENDMENT AND TERMINATION OF THE PLAN.

            (a) AMENDMENT AND TERMINATION. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
provided that, to the extent necessary to comply with the Applicable Laws, the
Company shall obtain approval of the stockholders of the Company to Plan
amendments.

            (b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan that would impair the rights of any Optionee shall not
affect Options already granted to such Optionee and such Options shall remain in
full force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.

                                      -9-
<PAGE>
      14. CONDITIONS UPON ISSUANCE OF SHARES. Notwithstanding any other
provision of the Plan or any agreement entered into by the Company pursuant to
the Plan, the Company shall not be obligated, and shall have no liability for
failure, to issue or deliver any Shares under the Plan unless such issuance or
delivery would comply with the Applicable Laws. Such compliance shall be
determined by the Company in consultation with its legal counsel.

            As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by law.

      15. RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

      16. OPTION AGREEMENT. Options shall be evidenced by written option
agreements in such form as the Board shall approve.

      17. STOCKHOLDER APPROVAL. If required by the Applicable Laws, continuance
of the Plan following its adoption by the Board shall be subject to approval by
the stockholders of the Company. Such stockholder approval shall be obtained in
the manner and to the degree required under the Applicable Laws.

                                      -10-
<PAGE>
                                REDENVELOPE, INC.

                        2003 DIRECTORS' STOCK OPTION PLAN

                          NOTICE OF STOCK OPTION GRANT

<<Optionee>>
<<OptioneeAddress1>>
<<OptioneeAddress2>>

      You have been granted an option to purchase Common Stock of RedEnvelope,
Inc. (the "Company") as follows:

<TABLE>
<S>                                      <C>
      Date of Grant                      <<GrantDate>>

      Vesting Commencement Date          <<VestingStartDate>>

      Exercise Price per Share           <<ExercisePrice>>

      Total Number of Shares Granted     <<SharesGranted>>

      Total Exercise Price               <<TotalExercisePrice>>

      Expiration Date                    <<ExpirDate>>

      Vesting Schedule:                   So long as your Continuous Status as a
                                          Director continues, this Option shall
                                          vest and may be exercised, in whole or
                                          in part, in accordance with the
                                          following schedule:

                                          INITIAL OPTIONS:  25% of the total
                                          number of Shares subject to the Option
                                          shall vest and become exercisable on
                                          the each of the first, second, third
                                          and fourth anniversaries of the Vesting
                                          Commencement Date.

                                          ANNUAL OPTIONS:  100% of the total
                                          number of Shares subject to the Option
                                          shall vest and become exercisable on
                                          the day before the first anniversary of
                                          the Vesting Commencement Date.
</TABLE>
<PAGE>
<TABLE>
<S>                                      <C>
      Termination Period:                 This Option may be exercised as to
                                          vested Shares only for 90 days after
                                          termination of your Continuous Status
                                          as a Director (or such longer period as
                                          may be applicable upon your death or
                                          termination of your Continuous Status
                                          as a Director as a result of your
                                          disability, as provided in the Plan),
                                          but in no event later than the
                                          Expiration Date as provided above.

                                          The Plan also provides for earlier
                                          termination of the Option in
                                          connection with Change of Control
                                          transactions.
</TABLE>

      By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the 2003 Directors' Stock Option Plan and the
Nonstatutory Stock Option Agreement, all of which are attached and made a part
of this document.

OPTIONEE:                             REDENVELOPE, INC.

_______________________________       By:____________________________________
Signature

                                      Title:_________________________________
_______________________________
Print Name

                                      -2-
<PAGE>
                                REDENVELOPE, INC.

                       NONSTATUTORY STOCK OPTION AGREEMENT

      1. GRANT OF OPTION. The Board of Directors of the Company hereby grants to
the Optionee named in the Notice of Stock Option Grant attached to this
Agreement (the "Optionee"), an option (the "Option") to purchase a number of
Shares, as set forth in the Notice of Stock Option Grant, at the exercise price
per share set forth in the Notice of Stock Option Grant (the "Exercise Price"'),
subject to the terms and conditions of the 2003 Directors' Stock Option Plan
(the "Plan"), which is incorporated herein by reference. (Capitalized terms not
defined herein shall have the meanings ascribed to such terms in the Plan.)

      2. EXERCISE OF OPTION.

            (a) RIGHT TO EXERCISE. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Stock Option Grant
and the applicable provisions of the Plan and this Nonstatutory Stock Option
Agreement. In the event of Optionee's death, disability or other termination of
Optionee's membership on the Company's Board as an Outside Director, the
exercisability of the Option is governed by the applicable provisions of the
Plan and this Nonstatutory Stock Option Agreement.

            (b) METHOD OF EXERCISE. This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of vested
Shares in respect of which the Option is being exercised (the "Exercised
Shares"), and such other representations and agreements as may be required by
the Company pursuant to the provisions of the Plan. The Exercise Notice shall be
signed by the Optionee and shall be delivered in person or by certified mail to
the Secretary of the Company (or shall otherwise be exercised by following the
procedures, including electronic procedures, designated by the Company from time
to time). The Exercise Notice shall be accompanied by payment (in accordance
with Section 3 below) of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by such aggregate Exercise
Price.

            No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with all relevant provisions of
Applicable Law compliance with which is deemed by the Company and its counsel to
be necessary or desirable. Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date the
Option is exercised with respect to such Exercised Shares.

      3. METHOD OF PAYMENT. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:

            (a) cash, check or wire or other electronic transfer;
<PAGE>
            (b) if the Company is at such time permitting "same day sale"
cashless-brokered exercises, delivery of a properly executed exercise notice
together with irrevocable instructions to a broker participating in such program
to deliver promptly to the Company the amount required to pay the exercise price
(and applicable withholding taxes); or

            (c) surrender of other Shares which (i) have been owned by the
Optionee for more than six (6) months on the date of surrender, and (ii) have a
Fair Market Value on the date of surrender equal to the aggregate Exercise Price
of the Exercised Shares.

      4. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than (a) by will, (b) by the laws of descent or
distribution, or (c) by gift or pursuant to a domestic relations order to a
Family Member of the Optionee. Except as otherwise permitted by the preceding
sentence, the Option may be exercised during the lifetime of Optionee only by
the Optionee or a transferee permitted by Section 10 of the Plan. The terms of
the Plan and this Nonstatutory Stock Option Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.

      5. TERM OF OPTION. This Option may be exercised only within the term set
out in the Notice of Stock Option Grant, and may be exercised during such term
only in accordance with the Plan and the terms of this Nonstatutory Stock Option
Agreement.

      6. TAX CONSEQUENCES. Set forth below is a brief summary of certain federal
tax consequences relating to this Option under the law in effect as of the date
of grant. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT HIS OR HER OWN TAX
ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

            (a) EXERCISING THE OPTION. Since this Option does not qualify as an
incentive stock option under Section 422 of the Code, the Optionee may incur
regular federal income tax liability upon exercise. The Optionee will be treated
as having received compensation income (taxable at ordinary income tax rates)
equal to the excess, if any, of the fair market value of the Exercised Shares on
the date of exercise over their aggregate Exercise Price.

            (b) DISPOSITION OF SHARES. If the Optionee holds the Option Shares
for more than one year, gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes. If the
Optionee holds the Option Shares for one year or less, gain realized on
disposition of the Shares will be treated as short-term capital gain.

      7. EFFECT OF AGREEMENT. Optionee acknowledges receipt of a copy of the
Plan and represents that he or she is familiar with the terms and provisions
thereof (and has had an opportunity to consult counsel regarding the Option
terms), and hereby accepts this Option and agrees to be bound by its contractual
terms as set forth herein and in the Plan. Optionee hereby agrees to accept as
binding, conclusive and final all decisions and interpretations of the Plan
Administrator regarding any questions relating to the Option. In the event of a
conflict between the terms and provisions of the Plan and the terms and
provisions of the Notice and this

                                      -2-
<PAGE>
Agreement, the Plan terms and provisions shall prevail. The Option, including
the Plan, constitutes the entire agreement between Optionee and the Company on
the subject matter hereof and supersedes all proposals, written or oral, and all
other communications between the parties relating to such subject matter.

      By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Nonstatutory Stock Option Agreement.
You reviewed the Plan and this Nonstatutory Stock Option Agreement in their
entirety, have had an opportunity to obtain the advice of counsel prior to
executing this Nonstatutory Stock Option Agreement and fully understand all
provisions of the Plan and Nonstatutory Stock Option Agreement. You hereby agree
to accept as binding, conclusive and final all decisions or interpretations of
the Administrator upon any questions relating to the Plan and Nonstatutory Stock
Option Agreement.

                                          REDENVELOPE, INC.

__________________________________        By:_______________________________
<<Optionee>>
                                          Title:____________________________

                                CONSENT OF SPOUSE

      The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of the Plan and this Nonstatutory Stock Option Agreement. In
consideration of the Company's granting his or her spouse the right to purchase
Shares as set forth in the Plan and this Nonstatutory Stock Option Agreement,
the undersigned hereby agrees to be irrevocably bound by the terms and
conditions of the Plan and this Nonstatutory Stock Option Agreement 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 Nonstatutory Stock Option Agreement.

                                          __________________________________
                                          Spouse of Optionee

                                      -3-
<PAGE>
                                    EXHIBIT A

                               NOTICE OF EXERCISE

To:         RedEnvelope, Inc.

Attn:       Stock Option Administrator

Subject:    Notice of Intention to Exercise Stock Option

      This is official notice that the undersigned ("Optionee") intends to
exercise Optionee's option to purchase __________ shares of RedEnvelope, Inc.
Common Stock, under and pursuant to the Company's 2003 Directors' Stock Option
Plan and the Nonstatutory Stock Option Agreement dated _______________, as
follows:

      Grant Number:             ________________________________________

      Date of Purchase:         ________________________________________

      Number of Shares:         ________________________________________

      Purchase Price:           ________________________________________

      Method of Payment of
      Purchase Price:           ________________________________________

      Social Security No.:      ________________________________________

      The shares should be issued as follows:

            Name:         _____________________

            Address:      _____________________

                          _____________________

                          _____________________

            Signed:       _____________________

            Date:         _____________________

                                      -4-

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