Alison L.
May
22 Jersey Street
San Francisco, CA 94114
|
|
|
|
|
Re:
|
|
Separation Agreement and General
Release
|
This letter, upon
your signature, will constitute the agreement (hereafter
“Agreement”) between you and RedEnvelope, Inc.
(“Company”) on the terms of your separation from
employment with the Company.
1. You shall
resign as Chief Executive Officer and as a member of the Board of
Directors of the Company effective at the start of business on
February 21, 2006 (the “Resignation Date”). Your
employment with the Company shall continue after such date until
the close of business on March 31, 2006 (“Separation
Date”) during which time you shall serve as a special advisor
to the newly hired Chief Executive Officer of the Company. As of
the Resignation Date, you will not say or do anything purporting to
bind the Company and as of the close of business on the Separation
Date, you will no longer represent to anyone that you are still an
employee of the Company. Commencing on April 1, 2006 and
continuing through June 30, 2006 (the “Consulting
Period”), you shall provide consulting services as reasonably
requested by the Company during regular business hours, Monday
— Friday, on issues and projects related to strategic
planning, product development and shareholder relations. The
Company shall compensate you for such consulting services through a
weekly retainer of $1,200 and at the rate of $150 an hour for each
hour of service provided in excess of 8 hours in a week. You agree
that you will submit an invoice by the last day of each month for
the services rendered during such month.
2. On the
Separation Date you shall receive your final paycheck, including
all salary and other compensation due through March 31, 2006
and a check for your accrued but unused PTO and Float
Time.
3. You agree
that you shall return to the Company all Company property that is
in your possession as of the Separation Date, including, without
limitation, personal computer(s), keys, documents, files, records,
data, confidential or proprietary information.
4. In
consideration for your promises and covenants in this Agreement,
the Company will pay you a severance amount of $285,000.00
(“Severance Amount”) as outlined in your Offer Letter
with the Company dated March 12, 2002. This severance amount
will be paid in biweekly installments, less applicable payroll
deductions and all required withholdings, in accordance with the
Company’s regular payroll schedule, during the twelve
(12) calendar months following the later of the Separation
Date and the Effective Date of this Agreement (as defined below).
As additional consideration for such promises and covenants, the
Company will
Alison L.
May
March 30, 2006
Page 2
reimburse you
for up to twelve (12) months of premiums to continue your and
your eligible dependents’ healthcare insurance coverage under
COBRA (as defined below), should you elect to continue such
coverage. Any tax obligations which may arise out of these payments
are your sole responsibility, and you agree to indemnify and defend
the Company from and against any and all taxes, interest,
penalties, claims or other liabilities of any kind arising from or
related to your failure to pay tax obligations owed by you as a
result of these payments. You acknowledge and agree that you are
not otherwise entitled to the Severance Amount or any COBRA premium
reimbursements being paid to you under this Agreement.
5. As of the
Separation Date you will no longer be eligible to participate in
any of the Company’s benefits or compensation plans, except
as provided by law, under the terms of the applicable plans, or as
provided in this paragraph. Your existing coverage under the
Company’s group health insurance plan (and, if applicable,
the existing group health coverage of your eligible dependents)
will terminate on March 31, 2006. Prior to that date, the
Company will provide you information regarding your rights to elect
continuation of this health insurance coverage, at your own expense
(except as set forth in paragraph 4), under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”),
provided you make a timely election to do so. Nothing in this
Agreement will impair any rights you may have to elect continued
health insurance coverage under COBRA.
6. All
vesting of any existing grants to you of Company stock options
shall cease as of the last day of the Consulting Period. Any rights
you may have to exercise any Company stock options that have vested
as of such date, and the time periods and procedures for such
exercise, are governed by the terms of: (1) any existing
Notice of Stock Option Grants and Stock Option Agreements, signed
by both you and the Company (collectively “Stock
Agreements”); and (2) the Company’s 1999 Stock
Plan (“Stock Plan”). Nothing in this Separation
Agreement will affect any existing, vested rights you may have
under the Stock Agreements or Stock Plan. All vested shares not
exercised by the end of the period specified in your Stock
Agreements will be forfeited. All unvested shares will expire as of
the last day of the Consulting Period. You acknowledge and agree
that any incentive stock options that you hold will retain their
status as incentive stock options for tax purposes until the date
that is three (3) months after the Separation Date, after
which they will be treated for tax purposes as nonstatutory stock
options, subject to ordinary income realization and required tax
withholding at the time of exercise.
7. Except as
otherwise provided in this Agreement, on behalf of yourself and
your representatives, agents, heirs and assigns, you waive,
release, discharge and promise never to assert any and all claims,
liabilities or obligations of every kind and nature (hereinafter,
“Claims”), whether known or unknown, suspected or
unsuspected, claimed or unclaimed, that you ever had, now have or
might have as of the date you sign this Agreement against the
Company and/or any of its past or present officers, directors,
employees, shareholders, parents, subsidiaries, affiliates,
representat
|
