GME 2018 Proxy Statement

The target grant date fair value of the 2017 LTI Awards was determined on February 28, 2017, with the number of shares determined effective as of the grant date of March 3, 2017. The target grant date fair value for each of Messrs. Raines, Lloyd, Bartel, Hogan and Mauler was consistent with the targeted value of the 2016 long-term incentive awards. The target value for Mr. DeMatteo's 2017 LTI Award was set at $750,000, approximately 63% of the targeted value of his 2016 long-term incentive awards, reflecting his continually evolving role as Executive Chairman. Each LTI award was comprised of 50% time-based restricted stock and 50% performance-based restricted stock, a structure designed to balance the retentive and performance-based nature of the total long-term incentive award. Time-based restricted stock awards are subject to a three-year ratable vesting schedule (subject to accelerated vesting upon attainment of retirement eligibility, death, disability, and certain severance events) and achieving a performance condition based on consolidated net income for fiscal 2017, adjusted for certain items, to achieve tax deductibility under Section 162(m). This performance condition was met for fiscal 2017. Performance-based restricted stock awards are subject to vesting both on the basis of continued service to the Company and the achievement of a certain consolidated operating earnings Target and a certain operating earnings Target for the amount of operating earnings coming from sources other than physical video game products for the fiscal year ended February 2, 2019 ("fiscal 2018"), with such Targets to be measured following the completion of fiscal 2018. Operating earnings was selected as a measure to focus on the long- term profitability of the Company. Additionally, given the Company is focused on diversifying its business, a second-year performance period was selected recognizing the difficulty in setting goals for a longer time period. Awards are subject to one additional year of time- based vesting following the end of the performance period to provide for additional retention of NEOs. Each NEO is entitled to receive the performance-based restricted stock according to the performance achievement scale shown below. Straight-line interpolation is applied between levels shown. If the Performance Period Results are: Then the Percentage of the Target Award Received is: 125% or more of Target 200% 110% 125% 100% (Target) 100% (Target) 87.5% 75% 75% 50% Less than 75% of Target None The Compensation Committee awarded the NEOs restricted stock in fiscal 2017 as follows: Named Executive Officer Time-Based Restricted Stock Grant (1) Performance- Based Restricted Stock Grant (2) Total Shares of Restricted Stock Awarded Total Targeted Award Value (3) 89,010 89,010 178,020 $ 4,500,000 Daniel A. DeMatteo 14,850 14,850 29,700 $ 750,000 Robert A. Lloyd 29,910 29,910 59,820 $ 1,512,000 Tony D. Bartel 42,750 42,750 85,500 $ 2,160,000 Michael P. Hogan 21,390 21,390 42,780 $ 1,080,000 Michael Mauler 21,390 21,390 42,780 $ 1,080,000 __________________________________________ (1) Time-based restricted stock, subject to a performance condition intended to achieve tax deductibility under Section 162(m) of the Code. The award vests in equal installments on March 3 rd of each of the years 2018 through 2020, subject to continued service to the Company and the achievement of a certain level of consolidated net income in fiscal 2018. (2) Performance-based restricted stock subject to fiscal 2018 operating earnings Targets measured at the end of fiscal 2018. Determination of earned awards is subject to the completion of the audited consolidated financial statements for fiscal 2018. The earned shares will vest subject to continued service with the Company through March 3, 2020. (3) The fair value of stock-denominated awards is based on the closing price of our common stock of $25.28 per share on the grant date of March 3, 2017. The service requirements otherwise applicable to these awards are waived in the case of retirement eligibility, death, disability and certain severance events, but in each case other than death, any performance conditions remain applicable. In the case of death, the awards that are otherwise subject to performance condition are settled at the target level. 2018 Proxy Statement | 29