GME 2018 Proxy Statement

(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. Incentive Plan Payouts for Performance Periods Ending Fiscal 2017 Performance-based awards may vest in a fiscal year other than the year of grant. Performance results for awards with a performance period measured as of the end of fiscal 2017, and the resulting payouts, are summarized in the table below: Incentive Plan Year of Grant Performance Period Performance Achieved as a % of Target Payout as a % of Targeted Award Amount STI Fiscal 2017 Fiscal 2017 Achieved 87.6% of the targeted fiscal 2017 consolidated operating earnings and 57.6% of the targeted fiscal 2017 operating earnings generated by Technology Brands and the collectibles product category (1) 45.0% LTI (performance-based restricted stock) Fiscal 2016 Fiscal 2017 Achieved 76.8% of the targeted fiscal 2017 consolidated operating earnings (2) 0% LTI (performance-based restricted stock) Fiscal 2016 Fiscal 2017 Achieved 110.1% of the targeted percentage of fiscal 2017 operating earnings from sources other than physical video game products (3) 125.0% __________________________________________ (1) Related to the 2017 STI, with payout tied to percentage of annual salary and percentage attainment of targets set by the Compensation Committee related to consolidated operating earnings and operating earnings generated by Technology Brands and the collectibles product category. See “Short- Term Incentives” section below for further detail. (2) Related to the 2016 performance-based restricted stock grant subject to a performance target tied to achieving a certain consolidated operating earnings target for fiscal 2017. See "Long-Term Incentives" section below for further detail. (3) Related to the 2016 performance-based restricted stock grant subject to a performance target tied to achieving a target percentage of fiscal 2017 operating earnings from sources other than physical video game products. See "Long-Term Incentives" section below for further detail. 2018 Proxy Statement | 25 Compensation Philosophy Our executive officer compensation program is administered by the Compensation Committee of the Board. The program is based upon the following guiding principles: • Total compensation opportunities provided to our NEOs should be competitive and allow us to attract and retain individuals whose skills are critical to our long-term success; • The compensation opportunities we offer should reward and motivate individual and team performance in attaining business objectives and maximizing stockholder value, while avoiding the encouragement of unnecessary or excessive risk-taking; • Compensation awards should be based on the fundamental principle of aligning the long-term interests of our employees with those of our stockholders. Therefore, a meaningful portion of most management employees’ compensation will be in the form of long-term equity compensation. All of the short-term incentives, in the form of annual cash bonuses, and a significant portion of equity compensation for NEOs are tied to performance measures; and • The overall value of the total compensation is intended to be consistent with the level of our operational performance over time and the level of returns provided to stockholders. The compensation program is designed to reward the executive officers for the dedication of their time, efforts, skills and business experience to our operations. The Compensation Committee targets approximately 50% to 60% of each NEO's total compensation be tied to performance measures, and such compensation is therefore at risk. The compensation program is also designed to reward both annual and long-term performance. Annual performance is rewarded through salary and short-term incentives and is measured by our operating earnings and growth, among other factors. Long-term performance is rewarded through performance-based and time-based restricted stock, with approximately 50% of the total long-term incentive compensation mix tied to the achievement of performance measures. The Compensation Committee oversees risks associated with compensation policies and the retention and development of executive talent, including the development of policies that do not encourage excessive risk-taking by our executives. These policies include various factors to help mitigate risk, including fixed compensation components and variable components that include mitigating factors such as a consistent structure across all business units, generally involving consolidated income components; targeted award amounts that are not significant as a percentage of revenue; and vesting periods, equity ownership policies, and claw-back provisions. The Compensation Committee and management also regularly review our compensation policies to determine effectiveness and to assess the risk they present to the Company. Based on this review, we have concluded that our compensation policies and procedures are not reasonably likely to have a material adverse effect on the Company.