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                                                                   EXHIBIT 10.11


October 7, 1999



Mr. Alexander Gray
28690 Barn Rock Drive
Hayward, CA 94542-2233

Dear Alex,

I speak for the entire Board in saying how much we have valued the meetings and
conversation we've had with you over the last few weeks. It is clear that your
experience, judgement, and leadership would be of enormous benefit to Replay
Networks. Recognizing that you have other opportunities available to you, we
wish to act decisively to attract your talents to our Company.

On behalf of the Board of Directors, I am pleased to offer you the position of
Executive Vice President, Business Operations. I have attached the details of
your offer in an Appendix to this letter. This offer expires on October 14,
1999.

There are many exciting challenges directly ahead and we have high expectations
for the company. I am confident that with your skills and experience, you will
make a great contribution and will develop your skills at the same time. We
think you'll find this new venture to be a fun and exciting place to work.
You'll be working with a small group of excellent, dedicated professionals
producing an innovative new consumer electronics product and service. We're
looking forward to working with you!

Best regards,


/s/ Kim LeMasters

Kim LeMasters
CEO
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October 7, 1999
Page 2


Appendix

The following sets forth the terms of your employment relationship with Replay
Networks, Inc. (the "Company").
                     -------

1)   Position.
     --------
     a)   You will serve as the Executive Vice President, Business Operations.
          You will report to the Company's CEO.

     b)   You agree to the best of your ability and experience that you will at
          all times loyally and conscientiously perform all of the duties and
          obligations required of and from you pursuant to the express and
          implicit terms hereof, and to the reasonable satisfaction of the
          Company. During the term of your employment, you further agree that
          you will devote all of your business time and attention to the
          business of the Company, the Company will be entitled to all of the
          benefits and profits arising from or incident to all such work
          services and advice, you will not render commercial or professional
          services of any nature to any person or organization, whether or not
          for compensation, without the prior written consent of the Company's
          CEO, and you will not directly or indirectly engage or participate in
          any business that is competitive in any manner with the business of
          the Company. It is understood, however, that your may continue to
          provide incidental consultations to Lucent through December 31, 1999,
          as long as such services do not interfere with your responsibilities
          at the Company.

     c)   Your start date will be November 1, 1999 ("Start Date").

2)   Compensation.
     ------------

     a)   Base Salary.  You will be paid a monthly salary of $20,833.33, which
          -----------
          is equivalent to $250,000 on an annualized basis. Your salary will be
          payable in two equal payments per month pursuant to the Company's
          regular payroll policy (or in the same manner as other officers of the
          Company).

          You will also be eligible to participate in the Company's incentive
          bonus program. The CEO will develop jointly with you the goals and
          objectives connected with the incentive bonus award. Based on the
          achievement of both the Company and individual performance goals, you
          will be eligible to receive an annual bonus of up to 40% of your base
          salary.

     b)   Annual Review.  Your base salary will be reviewed each calendar year
          -------------
          as part of the Company's normal salary review process.

3)   Stock.
     -----

     a)   On your Start Date the Board of Directors will grant you an option to
          purchase 600,000 shares of the Company Common Stock. The exercise
          price for these options will be the fair market price of the Company
          Common Stock at the date of grant.

          The options will vest and become exercisable according to a 4 year
          exercise schedule which calls for the initial vesting of 12.5% of the
          total after the first 6 months of continuous service, and provides for
          monthly vesting at the rate of an additional 1/48/th/ of the shares at
          the close of each month of employment, over the remainder of the
          vesting schedule.
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          October 7, 1999
          Page 3

          Stock, continued.
          ----------------

          The option will be an incentive stock option to the maximum allowed by
          the tax code and will be subject to the terms of the Company's Stock
          Option Plan and the Stock Option Agreement between you and the
          Company. Accordingly, the Board will allow you to elect which portion
          of the shares you obtain in the form of: 1) immediate purchase under
          Section 83(b) of the Internal Revenue Code, subject to re-purchase; 2)
          Incentive Stock Option; 3) Non-Qualified Options. Corporate counsel at
          Venture Law Group will be available to assist you in evaluating the
          tax benefits of these different stock and option programs. The grant
          of the option will be subject to your execution of a mutually
          acceptable option agreement.

          In connection with the exercise of your option, the Company will
          provide a loan of up to $1,000,000. This loan will be evidenced by a
          full recourse promissory note, which will be secured by the shares
          purchased and will provide for interest at the minimum Applicable
          Federal Rate, compounded annually. The term of this Note shall be five
          years, and any interest accrued will be due at such time as the
          principal is due.

4)   Benefits.
     --------

     a)   Insurance Benefits.  The Company will provide you with standard
          ------------------
          medical and dental insurance benefits. In addition, the Company
          currently indemnifies all to the maximum extent permitted by law, and
          you have entered into the Company's standard form of Indemnification
          Agreement giving you such protection. Pursuant to the Indemnification
          Agreement, the Company has agreed to advance any expenses for which
          indemnification is available to the extent allowed by applicable law.

     b)   Vacation, Sick Leave and Holidays.  You will be entitled to three
          ---------------------------------
          weeks paid vacation/sick leave per year, plus eight paid holidays.

     c)   401(K).  You will be eligible to participate in the company's standard
          ------
          401(K) plan.

5)   Severance Agreement.
     -------------------

     a)   If your employment is terminated by the Company or its successor for
          any reason other than Cause (as defined below) or you become subject
          to an Involuntary Termination (as defined below), within 12 months of
          a Change in Control (as defined below), you will be entitled to
          receive continuation of your base salary and insurance benefits for a
          period of 6 months and continued vesting under all stock options or
          restricted stock purchases by the greater of twelve (12) months of
          vesting of fifty (50%) percent of the shares that remain unvested at
          the time of such termination.

     b)   In the event 5a does not apply, and your employment is terminated by
          the Company or its successor for any reason other than Cause (as
          defined below) or you become subject to an Involuntary Termination (as
          defined below), you will be entitled to receive continuation of your
          base salary and insurance benefits and continued vesting under all
          stock options or restricted stock purchases for a period of 6 months
          following the date of termination of your employment.

     c)   "Change in Control" shall mean the Company's merger or consolidation
           -----------------
          with another entity, or a series of related transactions, as a result
          of which the shareholders of the Company immediately prior to the
          transaction own less than 50% of the voting power of the entity
          surviving.

     d)   "Cause" shall mean (I) gross negligence or willful misconduct in the
           -----
          performance of your duties to the Company where such gross negligence
          or willful misconduct has resulted or is likely to result in
          substantial and material damage to the Company or its subsidiaries,
          (ii) repeated unexplained or unjustified absence from the Company,
          (iii) a material and willful violation of any federal or state law;
          (iv) commission of any act of fraud with respect to the Company; (v)
          your material breach of this agreement or your Employee Inventions and
          Confidentiality Agreement; (vi) conviction of a felony or a crime
          involving moral turpitude causing material harm to the standing and
          reputation of the Company, in each case as determined in good faith by
          the Board of Directors of the Company.
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October 7, 1999
Page 4


     e)   "Involuntary Termination" shall include any termination by the Company
           -----------------------
          other than for Cause and your voluntary termination, upon 30 days
          prior written notice to the Company, following (I) a material
          reduction or change in job duties, responsibilities and requirements
          inconsistent with your position with the Company and your prior
          duties, responsibilities and requirements (taking into account the
          difference in job title and duties that may occur following an
          acquisition but that do not actually result in a material change in
          your job duties, responsibilities, and requirements); (ii) any
          reduction of your base compensation (other than in connection with a
          general decrease in base salaries for most similarly situated
          employees); or (iii) your refusal to relocate to a location more than
          50 miles from the Company's current location.

6)   Confidentiality of Terms.  You agree to follow the Company's strict policy
     ------------------------
     that employees must not disclose, either directly or indirectly, any
     information, including any of the terms of this agreement, regarding
     salary, bonuses or stock purchase or option allocations to any person,
     including other employees of the Company; provided, however, that you may
     discuss such terms with members of your immediate family and any legal, tax
     or accounting specialists who provide you with individual legal, tax or
     accounting advice.

7)   Employee Inventions and Confidentiality Agreement.  As an employee of
     -------------------------------------------------
     Replay Networks, you will have access to certain Company confidential
     information and you may, during the course of your employment, develop
     certain information of inventions which will be the property of the
     Company. To protect the interest of the Company, you will need to sign the
     Company's standard "Employee Inventions and Confidentiality Agreement" as a
     condition of your employment.

8)   At-Will Employment.  Notwithstanding the Company's obligation described in
     ------------------
     Section 5 above, your employment with the Company will be on an "at will"
     basis, meaning that either you or the Company may terminate your employment
     at any time for any reason or no reason, without further obligation or
     liability.

To indicate your acceptance of this offer, please sign and date this letter in
the space provided below and return it to Human Resources, attention: Chris
Copeland. This letter sets forth the terms of your employment with the Company
and supersedes any prior representations or agreements, whether written or oral.
This letter may not be modified or amended except by written agreement, signed
by the Company and by you.

                              Very truly yours,

                              REPLAY NETWORKS, INC.


                              By:        /s/ Kim LeMasters
                                 --------------------------------

                              Title:     CEO
                                    -----------------------------


ACCEPTED AND AGREED:

ALEXANDER GRAY

       /s/ Alex Gray
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Signature

       10/8/99
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Date