Exhibit 10.1

                                 DESCRIPTION OF
          EGAMES, INC. FISCAL 2001 EMPLOYEE INCENTIVE COMPENSATION PLAN


         On July 26,  2000,  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 is eligible to earn under the Plan is contingent on the Company
achieving  certain  net income  objectives.  Under the Plan,  each  employee  is
eligible to earn a specified percentage of the employee's total annual salary in
incentive compensation.  These percentages range from 10% of the annual salaries
for  administrative  employees  to 50% of the  annual  salaries  for  the  Chief
Executive Officer and Executive Vice President.

         No bonuses will be earned until the Company has earned net income of at
least  $750,000  (the  "Minimum  Threshold")  during the 2001 fiscal year.  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 $1,500,000
(the 100%  Threshold")  is earned  during the 2001 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  earns net  income  during  the 2001  fiscal  year that
exceeds  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  $1,100,000 during
the 2001  fiscal  year in order to earn the  minimum  bonus  (50%).  There is no
maximum incentive compensation level. If the Company exceeds the 100% Threshold,
then additional incentive compensation will be earned on a linear basis.

     Any  bonuses  earned  under  this  Plan  will  be  paid  subsequent  to the
completion of the 2001 fiscal year's financial statement audit.