Exhibit 10.9


 


November 5, 2004


 


Terri Luke


8 Celonova Place


Foothill Ranch CA 92610


 


Dear Terri:


 


On behalf of Gamefly, Inc. (the “Company”), I am pleased to offer you
the position of Vice President, Business Process and Information Systems 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 Vice President, Business Process and Information Systems at the
of the Company, working out of the Company’s headquarters office in Los
Angeles, California and your home office. Initially, you will be expected to be
in Company’s headquarters office at least three days per week. Subsequently,
you will work with the Company to determine an appropriate commuting schedule.


 


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 no later than January 3, 2005. This offer is
conditioned on your ability, between November 15, 2004 and your start
date, to be a consultant to the Company and provide at least 12 hours per week
of consulting services at an hourly rate of no more than $100.00.


 

















 


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 $10,833.33, which is equivalent
to $130,000 on an annualized basis. Your salary will be payable every two weeks
pursuant to the Company’s regular payroll policy.


 


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


 


c.                                            Bonus. You will be eligible for the
Company’s cash bonus plan. Your bonus for the current fiscal year will be
pro-rated from your start date.


 


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 85,000 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 and vision insurance benefits effective from your
Start Date. Dental insurance and flexible benefit account participation will
become effective on the 1st day of the month following your
Start Date while participation in the Company’s 401(k) savings plan is
effective the 1st day of the month following your 6th month anniversary of your Start Date.


 


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 supersedes 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/
  David Hodess

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  David
  Hodess

  
	
   

  	
  Printed
  Name 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  President,
  CEO

  
	
   

  	
  Title

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGREED AND ACCEPTED:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Terri J. Luke

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  Terri J. Luke

  
	
   

  	
  Printed
  Name

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  8 Celonova Place

  
	
   

  	
   

  	
  Foothill
  Ranch, CA 92610