SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 16, 2006
eGames, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-27102 23-2694937
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2000 Cabot Blvd. West, Suite 110, Langhorne, PA 19047-1833
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 750-6606
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
On August 16, 2006, eGames, Inc. (the "Company ") and Lawrence F. Fanelle, the
Company's Vice President of Operations, entered into a Separation Agreement and
General Release of All Claims (the "Severance Agreement") in connection with
the elimination of Mr. Fanelle's position at the Company.
Pursuant to the Severance Agreement, the Company agreed to pay Mr. Fanelle a
lump sum of $79,180, less taxes required to be withheld by law, and pay $10,100
to an outplacement service for Mr. Fanelle. Additionally, under the terms of the
Severance Agreement, 98,000 of Mr. Fanelle's outstanding stock options, with
exercise prices ranging from $0.50 to $0.75, will continue to be exercisable
in accordance with their terms, and Mr. Fanelle was permitted to keep a
Company-owned desktop computer. Mr. Fanelle will also receive payments for his
accrued but unpaid vacation.
The Severance Agreement also provides for a release of claims by Mr. Fanelle.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
eGames, Inc.
By: /s/ Thomas W. Murphy
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Thomas W. Murphy, Vice President
and Chief Financial Officer
Dated: August 18, 2006