Entertainment Games, Inc. – ‘10KSB’ for 6/30/00 – EX-10.21

On:  Thursday, 9/28/00, at 12:07pm ET   ·   For:  6/30/00   ·   Accession #:  948703-0-10   ·   File #:  0-27102

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Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       10KSB Fiscal Year 2000                                47    272K 
 2: EX-10.20    Stipulation and Consent Judgement                      8     28K 
 3: EX-10.21    Fiscal 2000 Employee Incentive Comp. Plan              1      8K 
 4: EX-21.1     Subsidiaries                                           1      4K 
 5: EX-23.1     Consent of Independent Auditors                        1      6K 
 6: EX-27.1     Art. 5 FDS for 10-Ksb                                  1      7K 

EX-10.21   —   Fiscal 2000 Employee Incentive Comp. Plan

                                                                 Exhibit 10.21

DESCRIPTION OF
EGAMES, INC. 2000 EMPLOYEE INCENTIVE COMPENSATION PLAN

         On July 19,  1999,  the  Board  of  Directors  of  eGames,  Inc.  ("the
Company")   approved  the  adoption  of  a   company-wide   Employee   Incentive
Compensation Plan (the "Plan").  The amount of incentive  compensation that each
Company  employee  was  eligible  to earn under the Plan was  contingent  on the
Company achieving certain net income  objectives.  Under the Plan, each employee
was  eligible to earn a specified  percentage  of the  employee's  total  annual
salary in incentive  compensation.  These percentages  ranged from 10% of annual
salary for  administrative  employees to 50% of the annual  salary for the Chief
Executive Officer.                                                              

         No bonuses were to be earned until the Company had earned net income of
at least $1,135,000 (the "Minimum Threshold") during the 2000 fiscal year, which
amount was equivalent to the net income earned in fiscal 1998. Upon reaching the
Minimum  Threshold,  plus the amount  required to pay the bonuses  earned if the
Minimum  Threshold were achieved,  then 50% of the potential bonus to which each
employee was eligible  would be earned.  If net income of  $3,100,000  (the 100%
Threshold")  was earned during the 2000 fiscal year, plus the amount required to
pay the bonuses earned when that net income level had been  achieved,  then 100%
of the potential bonus to which each employee was eligible would be earned.     

         If the  Company  earned net income  during  the 2000  fiscal  year that
exceeded  the  Minimum  Threshold,  plus the amount  required to pay the bonuses
earned,  then each  employee  would earn a bonus equal to the  percentage of the
potential  bonus to which they were eligible equal to the percentage of earnings
as measured  against the 100%  Threshold.  For  example,  if an employee  earned
$50,000  per year and was  eligible  to earn a bonus  equal to 10% of his or her
salary if the 100% Threshold were met, then that employee would be paid a $5,000
bonus if the 100% Threshold were met.                                           

         On the date of adoption of the Plan,  based on the number of  employees
of the Company and their  respective bonus  percentages,  the Company would have
been required to achieve pre-bonus  earnings of approximately  $1,400,000 during
the 2000  fiscal  year in order to earn the minimum  bonus  (50%).  There was no
maximum  incentive   compensation  level.  If  the  Company  exceeded  the  100%
Threshold,  then additional  incentive  compensation would be earned on a linear
basis.                                                                          

         Any bonuses earned were to be paid  subsequent to the completion of the
2000 fiscal year's financial  statement audit. Since the Company did not achieve
the 50% minimum  pre-bonus  earnings level,  the Company did not pay any bonuses
out under this Plan.                                                            

Dates Referenced Herein

This ‘10KSB’ Filing		Date		Other Filings
Filed on:		9/28/00		None on these Dates
For Period End:		6/30/00
		7/19/99
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