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Sample Business Contracts

Incentive Compensation Plan - SkyMall Inc.

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                                 SKYMALL, INC.
                          INCENTIVE COMPENSATION PLAN




Plan:          This  plan   shall  be  known  as  the  SkyMall,  Inc.  Incentive
               Compensation Plan (the "Plan").

Objective:     To  incentivize  management to meet SkyMall's earnings  goals and
               other objectives.

Eligibility:   SkyMall's  executive  and  management  employees are  eligible to
               receive  bonuses and stock options under the Plan.  Each year the
               Board will  designate  categories  of  executive  and  management
               employees who are eligible to participate in the Plan.

Earnings
Target:        Each   year  the   Board  establishes  an  earnings  target  (the
               "Targeted  EBITDA")  which  is based  on the  Company's  Earnings
               Before Interest,  Taxes, Depreciation and Amortization ("EBITDA")
               contained in the Company's annual budget approved by the Board of
               Directors.  The Board also  determines  a bonus  percentage  (the
               "Bonus Percentage") for eligible employees.

Bonus 
Payments:      Bonuses,  if  any,  will  be  paid  under  this  Plan as  soon as
               practicable  following the  determination of the Company's annual
               financial  results and sign-off of such results by the  Company's
               independent  public  accountants.  Bonuses for employees who have
               been employed  less than one year will be pro-rated.  No employee
               will be eligible to receive any bonus or stock options under this
               Plan  unless the  employee is employed by the Company on the date
               the bonuses are paid and the stock options are granted.

Stock 
Options:       Immediately  following the  determination of the  cash bonus (the
               "Cash Bonus") amounts payable to employees under the Plan for the
               immediately  preceding  fiscal year (the  "Determination  Date"),
               eligible  employees will also be granted options to purchase that
               number of shares of common  stock of the  Company  determined  by
               dividing  the  employee's  Cash Bonus for the year by the closing
               bid price of the Company's common stock on the first business day
               of the immediately preceding fiscal year.  Calculations resulting
               in a  fraction  of a share  shall be rounded up to the next whole
               share. Such options shall vest over a three-year period at a rate
               of 1/3 per year and shall be priced at the  closing  bid price on
               the Determination Date.



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Incentive Compensation Plan
Page Two



Board 
Approval:      Payment of  Cash  Bonuses and the grant of stock options shall be
               subject to board approval.

Bonus 
Calculations:  Cash  Bonuses  under the  Plan shall be  calculated on an  annual
               basis as follows:

*    Step 1 - Employee's base salary will be multiplied by the Bonus  Percentage
     ("Bonus Dollars").

*    Step 2 - The ratio of the Company's  actual EBITDA for the applicable  year
     to the Targeted EBITDA will be determined (the "EBITDA Ratio").

*    Step 3- The  Bonus  Dollars  will be  multiplied  by the  EBITDA  Ratio  to
     determine the employee's Cash Bonus Potential (the "Cash Bonus Potential"),
     subject to certain limitations including a floor on the EBITDA Ratio of 80%
     and a ceiling on the EBITDA Ratio of 120%.

*    Step 4 - The employee will be reviewed by the employee's supervisor as soon
     as possible  following  the end of the  Company's  fiscal year.  The review
     shall assess the  employee's  contribution  to the goals of the  management
     team as well as the  employee's  progress  during the year toward  specific
     goals. The review process will include a self-evaluation by the employee.

*    Step 5 - The employee  will be paid 50% of the Cash Bonus  Potential  based
     solely on the  performance  of the Company.  The employee will also be paid
     50% of the Cash Bonus Potential  subject to a satisfactory  evaluation from
     the  employee's  supervisor.  If  the  employee  is  not  performing  in  a
     satisfactory  fashion as  determined  by the  employee's  supervisor,  such
     supervisor  shall have the discretion to award any amount of the employee's
     Cash Bonus Potential not to exceed 50%.


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