GME 2018 Proxy Statement

2017 Compensation Program Summary In 2017, the three primary components of our NEOs’ total target compensation were salary, short-term incentive and long-term incentive, as described below: Program Description Purpose Salary Fixed cash compensation Reward for level of responsibility, experience and sustained individual performance. Short-Term Incentive ("STI") Cash compensation based on the following performance measures: • 60% based on fiscal 2017 consolidated operating earnings • 40% based on fiscal 2017 operating earnings generated by Technology Brands and the collectibles product category Reward for achievement against specific objective financial goals and strategic goals achieved in one year. Long-Term Incentive ("LTI") 50% of total — time-based restricted stock subject to vesting based on continued service. (1) Reward for creation of stockholder value and to retain executives for the long-term. 50% of total — performance-based restricted stock based the following measures: • 50% based on fiscal 2018 consolidated operating earnings • 50% based on fiscal 2018 operating earnings from sources other than physical video game products Reward for achievement against specific objective financial goals achieved in greater than one year and creation of stockholder value. __________________________________________ (1) Subject to a performance condition of $200 million in consolidated net income for fiscal 2017 to be eligible for tax deductibility under Section 162 (m). See “Section 162(m) Compliance” below for further detail. For purposes of determining performance results against a pre-established target, the Compensation Committee may make certain adjustments to reported results prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Compensation Committee provides for certain adjustments when it believes the adjustments provide a performancemeasure that best represents actual performance results that are within the executives’ sphere of control and accountability. Actual performance results may be adjusted to eliminate the effects of, among other things, goodwill and asset impairments, restructuring charges, acquisitions, debt retirement expenses, foreign currency changes, buybacks of the Company’s shares, and the impact to income taxes related to the difference in budgeted and actual income tax rates. Throughout this Compensation Discussion and Analysis, when we make reference to the use of operating earnings or net income as a performance measure for certain incentives and awards, we are actually referring to these measures as adjusted based on the definitions approved by our Compensation Committee. See Annex I for a reconciliation of our operating earnings to our adjusted operating earnings and our net income to our adjusted net income. Please refer to the "Other Considerations" section below for a discussion of other indirect elements of our compensation program. A significant portion of the 2017 compensation program for our NEOs was performance-based, with payouts linked to the attainment of certain defined performance goals, including the Company's operating earnings, net income and operating earnings generated by our Technology Brands segment and collectibles product category. The charts below summarize the mix of pay elements for J. Paul Raines, the CEO when the compensation targets were set, and all other NEOs, based on target compensation for fiscal 2017. 24 | 2018 Proxy Statement