Exhibit 10.7


 


July 29, 2002


 


Michael Gimlett


Address TBD


 


Dear Mike:


 


Please note that this
Offer Letter supersedes the Offer Letter dated July 14, 2002 previously
sent to you.


 


On
behalf of Gamefly, Inc. (the “Company”), I am pleased to offer you
the position of Director, Merchandising at the
Company.  We look forward to your future
success in this position.


 


The
terms of your new position with the Company are as set forth below:


 


1.                                       Position.


 


a.  You will become the Director,
Merchandising of the Company, working out of the Company’s headquarters office in Santa Monica, California.


 


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 Board
of Directors, 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.  Nothing in this letter
agreement will prevent you from accepting speaking or presentation engagements
in exchange for honoraria or from serving on boards of charitable
organizations, or from owning no more than one percent (1%) of the outstanding
equity securities of a corporation whose stock is listed on a national stock
exchange.


 


2.                                       Start Date.  Subject to
fulfillment of any conditions imposed by this letter agreement, you will
commence this new position with the Company on August 1, 2002.


 


3.                                       Proof of Right to Work. 
For
purposes of federal immigration law, you will be required to provide to the
Company documentary evidence of your identity and eligibility for employment in
the United States.  Such documentation
must be provided to us within three (3) business days of your date of
hire, or our employment relationship with you may be terminated.


 

















 


4.                                       Compensation.


 


a.                                       Base Salary.  You will be
paid a monthly salary of $5,000.00, which is equivalent to $60,000 on an
annualized basis.  Upon the closing of
the Company’s second round of financing, you will be paid a monthly salary of
$8,333.33, which is the equivalent of $100,000 on an annualized basis.  Your salary will be payable in two equal
payments per month pursuant to the Company’s regular payroll policy.


 


b.                                      Annual Review.  Your base salary
will be reviewed at the end of each calendar year  as
part of the Company’s normal salary review process.


 


c.                                       Moving Allowance. 
The Company will also pay a moving allowance applicable to any moving
expenses you incur in relocating to the Los Angeles area.  This allowance has a maximum limit of $5000
and is payable immediately upon you submission of receipts showing that you
have paid the moving company.  You will
vest with respect to any paid moving allowance in 12 equal monthly installments
for each of the 12 months during which you continue to be employed by the
Company following the payment of the moving allowance.  If the Company terminates your employment
with cause prior to the end of this 12 month period, or if you end your
employment with the Company, you will be obligated to refund to the Company the
unvested portion of any paid moving allowance.


 


5.                                       Stock Options.


 


a.                                       Initial Grant.  In connection
with the commencement of your employment, the Company will recommend that the
Board of Directors grant you an option to purchase 117,500 shares of the
Company’s Common Stock (“Shares”) with an exercise price equal to the
fair market value on the date of the grant. 
These option shares will vest at the rate of one fourth (1/4th) of the total shares on the one year anniversary of
your Start Date and 1/48th of
the total shares on the monthly anniversary of your Start Date thereafter.  Vesting will, of course, depend on your
continued employment with the Company. 
The option will be an incentive stock option to the maximum extent
allowed by the tax code and will be subject to the terms of the Company’s 2002
Stock Plan and the stock option agreement between you and the Company


 


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


 


6.                                       Benefits.


 


a.                                       Insurance Benefits.  The Company
will provide you with standard medical insurance benefits effective the later
of your Start Date or the date on which the Company puts a medical insurance
plan in place.  We anticipate offering
dental and vision coverage at some date in the future.


 


b.                                      Vacation.  You will be
entitled to two weeks paid vacation per year, pro-rated for the remainder of
this calendar year.


 

















 


7.                                       Confidential Information
and Invention Assignment Agreement.  Your acceptance of this offer and commencement
of employment with the Company is contingent upon the execution, and delivery
to an officer of the Company, of the Company’s Confidential Information and
Invention Assignment Agreement attached as Exhibit A (the “Confidentiality
Agreement”), prior to or on your Start Date.


 


8.                                       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.


 


9.                                       At-Will Employment.  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.


 


We are
all delighted to be able to extend you this offer and look forward to working
with you.  To indicate your acceptance of
the Company’s offer, please sign and date this letter in the space provided
below and return it to me, along with a signed and dated copy of the
Confidentiality Agreement. This letter, together with the Confidentiality
Agreement, set forth the terms of your employment with the Company and
supersede any prior representations or agreements, whether written or
oral.  This letter may not be modified or
amended except by a written agreement, signed by the Company and by you.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  GAMEFLY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Sean Spector

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  Sean Spector

  
	
   

  	
  Printed Name

  
	
   

  	
   

  
	
   

  	
  VP

  
	
   

  	
  Title

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGREED AND ACCEPTED:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Mike Gimlett

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  Mike Gimlett

  
	
   

  	
  Printed Name

  
	
   

  	
   

  
	
   

  	
  Address: