Proxy Statement (definitive) (def 14a)

Date : 05/14/2019 @ 9:16PM
Source : Edgar (US Regulatory)
Stock : GameStop Corp Holding Company (GME)
Quote : 5.83  0.22 (3.92%) @ 7:06PM

Proxy Statement (definitive) (def 14a)




 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.    )
Filed by the Registrant     þ                               Filed by a Party other than the Registrant     ¨
Check the appropriate box:  
¨

Preliminary Proxy Statement
¨

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ
Definitive Proxy Statement
¨
Definitive Additional Materials
¨
Soliciting Material Pursuant to (§)240.14a-12
 
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Gamestop Corp.
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
 
þ
No fee required.
 
 
¨

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
(1)
Title of each class of securities to which transaction applies: 
 
 
 
 
(2)
Aggregate number of securities to which transaction applies:
 
 
 
 
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
 
 
(4)
Proposed maximum aggregate value of transaction:
 
 
 
 
(5)
Total fee paid:
 
 
 
¨

Fee paid previously with preliminary materials.
¨

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
 
 
 
(1)
Amount Previously Paid:
 
 
 
 
(2)
Form, Schedule or Registration Statement No.:
 
 
 
 
(3)
Filing Party:
 
 
 
 
(4)
Date Filed:

 











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2019
Notice of Annual Meeting of Stockholders and
Proxy Statement
















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Notice of Annual Meeting of Stockholders

Dear Stockholder:
We invite you to attend our Annual Meeting of Stockholders on Tuesday, June 25, 2019 at 1:00 p.m. , Central Daylight Time, at the Hilton Southlake Town Square located at 1400 Plaza Place, Southlake, Texas, 76092. At the annual meeting, you will be asked to:
(1)
Elect 11 directors, each to serve as a member of our Board of Directors until the next annual meeting of stockholders and until such director's successor is elected and qualified;
(2)
Provide an advisory, non-binding vote on the compensation of our named executive officers;
(3)
Approve the GameStop Corp. 2019 Incentive Plan;
(4)
Ratify our Audit Committee’s appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending February 1, 2020 ; and
(5)
Transact such other business as may properly come before the annual meeting and at any adjournment or postponement of the annual meeting.
Our Proxy Statement provides information that you should consider when you vote your shares.
You are entitled to vote at the annual meeting or at any adjournment or postponement thereof if you were a holder of record of our Class A Common Stock at the close of business on May 3, 2019 .
Your vote is important to us. Whether or not you plan to attend the annual meeting, please vote your shares electronically via the Internet, by telephone or, if you receive a paper copy of the proxy materials, by signing, dating and completing the accompanying proxy card in the enclosed postage-paid envelope. Voting electronically via the Internet, by telephone, or by returning your proxy card in advance of the annual meeting does not deprive you of your right to attend the annual meeting. If you attend the annual meeting, you may vote your shares in person, even if you have previously submitted a proxy via the Internet, by telephone or in writing. Our Proxy Statement includes additional instructions on voting procedures for stockholders whose shares are held by a brokerage firm or other custodian.
Thank you for your continued interest in GameStop Corp.

Sincerely,
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Daniel A. DeMatteo
Executive Chairman

May 14, 2019






IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 25, 2019:
This Proxy Statement, form of proxy and 2018 Annual Report are
available at http://investor.gamestop.com.
Except as otherwise stated, information on our website is not a part of this Proxy Statement.
This year we are again providing access to our proxy materials over the Internet under the U.S. Securities and Exchange Commission’s “notice and access” rules. On or about May 14, 2019, we mailed to stockholders a Notice of Internet Availability of Proxy Materials, which contains instructions on how to access this Proxy Statement, a form of proxy and our 2018 Annual Report. This Proxy Statement and the form of proxy are first being distributed and made available to stockholders on or about May 14, 2019.
If you are receiving paper copies of future annual reports and proxy statements in the mail, you may elect to receive an e-mail that will provide an electronic link to these documents. Choosing to receive your proxy materials online will save us the cost of producing and mailing documents to you and will conserve natural resources. With electronic delivery, we will notify you by e-mail as soon as the Annual Report and Proxy Statement are available on the Internet, and you can easily submit your stockholder votes online. If you are a stockholder of record, you may enroll in the electronic delivery service at the time you vote by selecting electronic delivery if you vote on the Internet, or at any time in the future by going directly to www.proxypush.com/gme, selecting the “Request Materials” option, and following the enrollment instructions.






TABLE OF CONTENTS
 
 
Pension Plans  and Nonqualified Deferred Compensation
 
 
 
 



PROXY STATEMENT SUMMARY
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all the information that you should consider. We encourage you to read the entire proxy statement prior to voting.
ANNUAL MEETING OF STOCKHOLDERS
Date and Time:
Tuesday, June 25, 2019
1:00 p.m. , Central Daylight Time
Location:
Hilton Southlake Town Square
1400 Plaza Place, Southlake, Texas, 76092
Record Date:
May 3, 2019
AGENDA AND VOTING RECOMMENDATIONS
Business Items
Board Voting Recommendation
Page
Reference
1.
Election of Directors
FOR Each Director Nominee
2.
Advisory Vote on Executive Compensation
FOR
3.
Approve the GameStop Corp. 2019 Incentive Plan
FOR
4.
Ratification of Appointment of Independent Registered Accounting Firm
FOR
How to Cast Your Vote
:
www.proxypush.com/gme
 
 
*
Sign, date and return your proxy card or voting instruction form.
 
 
 
 
 
 
 
 
 
 
 
 
)
(855) 847-1311
 
 
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In person—You may vote your shares in person at the annual meeting.
CORPORATE GOVERNANCE
Highlights of the Company's corporate governance guidelines and related elements include the following:
Size of Board: 11 Directors (1)
Board Meetings Held in Fiscal 2018: 23
Number of Independent Directors: 9
Board Responsible for Risk Oversight
Directors are Elected Annually
Code of Conduct for Directors, Officers and Employees
Board Contains a Lead Independent Director
Equity Ownership Requirements for Directors and Officers
Regular Executive Sessions with Independent Directors
Anti-Hedging Policy
Separate Chairman and CEO
Executive Compensation Tied to Performance Measures
Average Age of Directors: 61
Claw-back Policy
Mandatory Retirement Age: 75
Proxy Access Provisions in our Bylaws
_____________________________________
(1)
Reflects the number of nominees for director at the 2019 annual meeting.


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2019 Proxy Statement  | 1


Nominees for Election as Director
The Board has nominated the 11 director nominees listed in the table below for election at the 2019 annual meeting. Each of the director nominees (other than Mr. Sherman, Ms. Dunn, Mr. Fernandez and Ms. Teffner) was elected at the 2018 annual meeting of stockholders to serve as director until the 2019 annual meeting and until such director nominee's successor is elected and qualified. Mr. Sherman and Ms. Teffner were appointed to the Board effective April 15, 2019 and August 13, 2018, respectively. Ms. Dunn and Mr. Fernandez were appointed to the Board effective April 22, 2019.
Name 
Age
Director Since (1)
Occupation
Independent
 
Committee Memberships
Daniel A. DeMatteo
71
2002
Executive Chairman, GameStop Corp.
 
 
 
George E. Sherman
57
2019
Chief Executive Officer, GameStop Corp.
 
 
 
Jerome L. Davis
64
2005
Executive Vice President & Chief Revenue Officer, Metropolitan Washington Airports Authority
ü
 
Nominating & Corporate Governance
Lizabeth Dunn
45
2019
Chief Executive Officer, Pro4ma Inc.
ü
 
Nominating & Corporate Governance, Compensation
Raul J. Fernandez
52
2019
Vice Chairman, Monumental Sports & Entertainment
ü
 
Audit
Thomas N. Kelly Jr.
72
2012
Former Chief Operating Officer, Nextel Corporation
ü
 
Compensation
Steven R. Koonin
61
2007
Chief Executive Officer, The Atlanta Hawks
ü
 
Nominating & Corporate Governance
Gerald R. Szczepanski
70
2002
Former Chairman, Gadzooks, Inc.
ü
 
Audit, Compensation
Carrie W. Teffner
52
2018
Former Executive Vice President and Chief Financial Officer, Crocs, Inc.
ü
 
Audit
Kathy P. Vrabeck
55
2012
Senior Client Partner, Consumer Markets, Korn Ferry International
ü
 
Audit, Compensation
Lawrence S. Zilavy
68
2005
LR Enterprises Management, LLC
ü
 
Audit, Nominating & Corporate Governance
_______________________________
(1) Includes predecessor companies
FISCAL 2018 BUSINESS HIGHLIGHTS
Business highlights for fiscal 2018 include:
 
Total global sales from continuing operations decreased 3.1% to $8.3 billion, while consolidated comparable store sales decreased 0.3%;
 
Accessories sales increased 22.0% on the strength of controller and headset sales;
 
Collectible sales increased 11.2% to $707.5 million due to continued growth in both domestic and international stores;
 
Pre-owned sales declined 13.2%, reflecting declines in hardware and software;
 
Sold our Spring Mobile business for cash proceeds of $727.9 million, net of transaction costs and preliminary adjustments; and
 
Paid quarterly dividends of $0.38 per share, which remained unchanged from fiscal 2017.


2   | 2019 Proxy Statement


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EXECUTIVE COMPENSATION
Our executive compensation program is based on the following principles:
 
Competitive compensation opportunities to attract and retain individuals whose skills are critical to our long-term success;
 
Reward and motivate individual and team performance in attaining business objectives and maximizing stockholder value;
 
Meaningful portion of total compensation in the form of long-term equity compensation to align interests of our named executive officers with those of our stockholders;
 
Total compensation designed to be consistent with the level of our operational performance over time and the level of returns provided to stockholders; and
 
Meaningful portion of each of our named executive officers' total compensation opportunities to be tied to performance measures.
Compensation Pay Mix
A significant portion of the compensation program for the named executive officers is performance-based, with payouts linked to the attainment of certain defined performance measures. For our CEO, George E. Sherman, who was appointed effective April 15, 2019, 54% of his total targeted compensation is tied to performance measures. For our other currently-employed NEOs, 48%, on average, of total targeted compensation for fiscal 2018 was tied to performance measures. The charts below summarize the mix of pay elements for Mr. Sherman, based on target compensation for fiscal 2019, and all other NEOs, based on target compensation for fiscal 2018:
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2019 Proxy Statement  | 3


GAMESTOP CORP. 2019 INCENTIVE PLAN
The Compensation Committee approved, subject to the approval of the Company’s stockholders at the 2019 annual meeting, the GameStop Corp. 2019 Incentive Plan (the “2019 Plan”). The 2019 Plan, if approved by stockholders, will replace the GameStop Corp. 2011 Incentive Plan (the “2011 Plan”).
Key features of GameStop Corp. 2019 Incentive Plan are as follows:
 
Shares Requested.  Authorization of 6,500,000 shares of GameStop Corp. common stock
 
No Liberal Share Recycling.  The 2019 Plan does not provide for the recycling of shares withheld for taxes.
 
Minimum Vesting Requirements . The 2019 Plan requires that any stock-based awards which are: (i) performance based shall have a minimum vesting period of one year or (ii) tenured (time-based) shall have a minimum vesting period of three years, subject to certain exceptions.
 
No Dividends Paid Currently on Unvested Awards.  Dividends or dividend equivalents payable with respect to 2019 Plan awards will be subject to the same vesting terms as the related award.
 
No Option or SAR Repricing.  The 2019 Plan prohibits the repricing of stock options and stock appreciation rights without stockholder approval.
 
No Automatic Acceleration Upon a Change in Control.  The 2019 Plan reflects the Company’s current practice not to provide for automatic equity award vesting upon a change in control.
INDEPENDENT AUDITORS
As a matter of good corporate governance, we are submitting our selection of Deloitte & Touche LLP ("Deloitte") to audit the financial statements of the Company for fiscal 2019 for ratification by the stockholders. If the stockholders should not ratify the appointment of Deloitte, the Audit Committee will reconsider the appointment. Deloitte has served as our independent registered public accounting firm since 2013.
The following table sets forth information regarding fees for professional services rendered by Deloitte in fiscal 2018 and 2017 :
 
 
Fiscal Year
 
 
2018
 
2017
Audit Fees
 
$
5,184,000

 
$
4,258,000

Audit-Related Fees
 
54,000

 
20,000

Tax Fees
 
574,000

 
572,000

All Other Fees
 
73,000

 

Total
 
$
5,885,000

 
$
4,850,000



4   | 2019 Proxy Statement


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Information About The Annual Meeting and Voting
1. What am I Voting on?
 

Our Board of Directors ("Board") of GameStop Corp. ("GameStop," the "Company," "we," "us," or "our") is soliciting your vote for the following:
Business Items
Board Voting Recommendation
Page
Reference
1.
To elect the 11 nominees identified in this Proxy Statement to serve as directors on the Board
FOR Each Director Nominee
2.
To approve, on an advisory, non-binding basis, our executive compensation
FOR
3.
To approve the GameStop Corp. 2019 Incentive Plan
FOR
4.
To ratify our Audit Committee's appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending February 1, 2020
FOR
The Board knows of no other business that will be presented for consideration at the annual meeting. If any other matter should be properly presented at the annual meeting or any adjournment or postponement of the annual meeting for action by the stockholders, the persons named in the proxy card will vote the proxy in accordance with their best judgment on such matter.
2. Who Is Entitled to Vote?
 
Holders of record of shares of common stock as of the close of business on May 3, 2019 are entitled to notice of and to vote at the annual meeting. Shares of common stock can be voted only if the stockholder is present in person or is represented by proxy at the annual meeting. As of the record date, 102,268,940 shares of common stock were issued, outstanding and entitled to vote.
3. How Do I Vote?
 
Stockholders of Record . If you are a stockholder of record, there are several ways for you to vote your shares of common stock at the annual meeting:
Voting by Internet. You may vote your shares through the Internet by signing on to the website www.proxypush.com/gme and following the procedures described therein. Internet voting is available 24 hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on the proxy card. The procedures allow you to appoint a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote through the Internet, you should not return your proxy card.
Voting by Mail. If you choose to vote by mail, simply complete the enclosed proxy card, date and sign it, and return it in the postage-paid envelope provided. If you sign your proxy card and return it without marking any voting instructions, your shares will be voted: (1) FOR the election of the director nominees identified in this Proxy Statement; (2) FOR the approval of the compensation of our Named Executive Officers (as defined in Proposal 2); (3) FOR the approval of the GameStop Corp. 2019 Incentive Plan; and (4) FOR the ratification of our Audit Committee’s appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending February 1, 2020 .
Voting by Telephone. You may vote your shares by telephone by calling toll-free 1-855-847-1311. Telephone voting is available 24 hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on the proxy card. The procedures allow you to appoint a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote by telephone, you should not return your proxy card.
In Person Attendance. You may vote your shares in person at the annual meeting. Even if you plan to attend the annual meeting in person, we recommend that you submit your proxy card by mail or voting instructions via the Internet or by telephone by the applicable deadline so that your vote will be counted if you later decide not to attend the annual meeting.


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2019 Proxy Statement  | 5


Beneficial Owners . If you are a stockholder whose shares are held in “street name” (i.e., in the name of a broker or other custodian) you may vote the shares in person at the annual meeting only if you obtain a legal proxy from the broker or other custodian giving you the right to vote the shares. Alternatively, you may have your shares voted at the annual meeting by following the voting instructions provided to you by your broker or custodian. Although most brokers offer voting via the Internet, by telephone, and mail, availability and specific procedures will depend on their voting arrangements. If you do not provide voting instructions to your broker or other custodian, your shares are referred to as “uninstructed shares.” Under rules of the New York Stock Exchange ("NYSE"), your broker or other custodian does not have discretion to vote uninstructed shares on non-routine matters, such as Proposals 1, 2 and 3, and, accordingly, may not vote uninstructed shares in the votes on such Proposals. However, your broker or other custodian has discretion to vote your shares on Proposal 4 (Ratification of the Appointment of our Independent Registered Public Accounting Firm). See below “What is a Broker Non-Vote?”
4. How May You Revoke or Change Your Vote?
 
You may revoke your proxy at any time before it is voted at the annual meeting by any of the following methods:
Submitting a later-dated proxy via the Internet, over the telephone or by mail.
Sending a written notice, including by fax, to our Secretary. You must send any written notice of a revocation of a proxy so as to be delivered before the taking of the vote at the annual meeting to:
GameStop Corp
625 Westport Parkway
Grapevine, Texas 76051
Attention: Secretary
Attending the annual meeting and voting in person. Your attendance at the annual meeting will not in and of itself revoke your proxy. You may also vote your shares at the annual meeting, if you choose to do so.
5. What Constitutes a Quorum?
 
A quorum of common stockholders is required to hold a valid annual meeting of stockholders. Unless a quorum is present at the annual meeting, no action may be taken at the annual meeting except the adjournment thereof to a later time. The holders of a majority of the outstanding shares of common stock entitled to vote at the meeting must be present in person or by proxy to constitute a quorum. All valid proxies returned will be included in the determination of whether a quorum is present at the annual meeting. The shares of a stockholder whose ballot on any or all proposals is marked as “abstain” will be treated as present for quorum purposes. If a broker indicates on the proxy that it does not have discretionary authority as to certain shares to vote on a particular matter, those uninstructed shares, constituting “broker non-votes,” will be considered as present for determining a quorum, but will not be voted with respect to that matter.
6. What Is a Broker Non-Vote?
 
A “broker non-vote” occurs when a nominee (such as a custodian or bank) holding shares for a beneficial owner returns a signed proxy but does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.
7. What Vote Is Required to Approve Each Proposal?
 
Voting Rights Generally. Each share of common stock is entitled to one vote on each matter to be voted on at the annual meeting. Stockholders have no cumulative voting rights. Although the advisory vote on Proposal 2 is non-binding, as provided by law, the Compensation Committee of the Board and the Board will review the results of the vote and, consistent with our record of stockholder engagement, will consider the results of the vote when making future compensation decisions.
Election of Directors. Our Bylaws provide that, in an uncontested election, a nominee for director is elected only if such nominee receives the affirmative vote of a majority of the total votes cast for and against such nominee. The majority voting standard would not apply in contested elections, and directors are elected by a plurality of the votes cast in a contested election.
The majority voting standard will apply to the election of directors at the 2019 annual meeting. Accordingly, a nominee for election to the Board will be elected if the number of votes cast “for” such nominee exceeds the number of votes cast “against” that nominee. Abstentions and broker non-votes will not be treated as votes cast in the election of a director and will therefore have no effect on the result of such vote.
The Board has also adopted a resignation policy which is included in our Bylaws, under which a director nominated for re-election who fails to receive the required majority of votes cast for re-election will be required to tender his or her resignation to the Board. Within 90 days following certification of the stockholder vote, the Nominating and Corporate Governance Committee of the Board will be required to recommend to the Board whether the Board should accept the resignation, and the Board will be required to act on the recommendation,


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taking into account any factors it considers relevant, and publicly disclose its decision and the rationale behind it. The director whose resignation is under consideration will not participate in the recommendation of the Nominating and Corporate Governance Committee or the decision of the Board regarding his or her resignation.
Advisory Vote on Executive Compensation. Approval on an advisory, non-binding basis of the compensation of our Named Executive Officers requires the affirmative vote of a majority of all votes cast on this Proposal. Abstentions and broker non-votes will therefore have no effect on the result of such vote. As an advisory vote, the proposal to approve the compensation of our Named Executive Officers is not binding upon us. However, the Compensation Committee of the Board, which is responsible for designing and administering our executive compensation programs, and the Board, value the opinions expressed by our stockholders and will consider the results of the vote when making future compensation decisions.
Approval of the GameStop 2019 Incentive Plan. Approval of our 2019 Incentive Plan requires the affirmative vote of a majority of the shares present at the meeting and entitled to vote on this Proposal. If you indicate on your proxy card that you wish to “ABSTAIN” from voting on this Proposal, your shares will not be voted on this Proposal. Abstentions are not counted in determining the number of shares voted “FOR” or “AGAINST” this Proposal, but will be counted as present and entitled to vote on this Proposal. Accordingly, an abstention will have the effect of a vote against this Proposal. Broker non-votes are not counted in determining the number of shares voted for or against this Proposal and will not be counted as present and entitled to vote on this Proposal.
Ratification of Appointment of Independent Registered Public Accounting Firm. Ratification of our Audit Committee’s appointment of Deloitte as our independent registered public accounting firm for our fiscal year ending February 1, 2020 requires the affirmative vote of a majority of all votes cast on this Proposal. Abstentions will therefore have no effect on the result of such vote. If the stockholders should not ratify the appointment of Deloitte, the Audit Committee will reconsider the appointment.
8. Who Counts the Votes?
 
We have engaged Computershare, our transfer agent, as our inspector of elections to receive and tabulate votes. Computershare will separately tabulate “for” and “against” votes, abstentions and broker non-votes. Computershare will also certify the results and determine the existence of a quorum and the validity of proxies and ballots.
9. Who Pays the Cost of Solicitation of Proxies?
 
We will pay for the cost of preparing, assembling, printing, mailing and distributing these proxy materials. Our directors, officers and employees may solicit proxies or votes in person, by telephone, or by electronic communication. Such individuals will not receive any additional compensation for these solicitation activities. We will, upon request, reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation material to the beneficial owners of our stock.
10. What Does it Mean if I Receive More Than One Proxy Card?
 
Some of your shares may be registered differently or held in more than one account. You should vote each of your accounts via the Internet, by telephone or mail. If you mail proxy cards, please sign, date and return each proxy card to assure that all of your shares are voted. If you hold your shares in registered form and wish to combine your stockholder accounts in the future, you should contact our transfer agent, Computershare, at P.O. Box 30170, College Station, TX 77842-3170; or by calling Computershare at 1-800-522-6645 (outside the United States, phone 1-201-680-6578) and providing such information. Combining accounts reduces excess printing and mailing costs, resulting in savings for us that benefit you as a stockholder.
11. What if I Receive Only One Set of Proxy Materials Although There Are Multiple Stockholders at My Address?
If you and other residents at your mailing address own shares of common stock you may have received a notice that your household will receive only one Annual Report, Proxy Statement and Notice of Internet Availability of Proxy Materials. If you hold shares of common stock in street name, you may have received this notice from your broker or other custodian and the notice may apply to each company in which you hold shares through that broker or custodian. This practice of sending only one copy of proxy materials is known as “householding.” The reason we do this is to attempt to conserve natural resources. If you did not respond to a timely notice that you did not want to participate in householding, you were deemed to have consented to the process. If the foregoing procedures apply to you, one copy of our Annual Report, Proxy Statement and Notice of Internet Availability of Proxy Materials has been sent to your address. You may revoke your consent to householding at any time by sending your name, the name of your brokerage firm, and your account number to Computershare at P.O. Box 30170, College Station, TX 77842-3170; or by calling Computershare at 1-800-522-6645 (outside the United States, phone 1-201-680-6578) and providing such information.


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2019 Proxy Statement  | 7


The revocation of your consent to householding will be effective 30 days following its receipt. In any event, if you did not receive an individual copy of this Proxy Statement, our Annual Report and Notice of Internet Availability of Proxy Materials, we will send a copy to you, free of charge, if you address your written request to GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051, Attention: Mike Loftus, Vice President, Global Controller and Investor Relations or by calling at (817) 424-2000. If you are receiving multiple copies of our Annual Report, Proxy Statement and Notice of Internet Availability of Proxy Materials, you can request householding by contacting Investor Relations in the same manner.
12. How Do I Submit a Stockholder Proposal for Next Year’s Annual Meeting?
 
Stockholder proposals may be submitted for inclusion in the proxy statement for our 2020 annual meeting of stockholders in accordance with Rule 14a-8 of the Securities and Exchange Commission (“SEC”). See “Other Matters—Proposals Pursuant to Rule 14a-8” later in this proxy statement. In addition, eligible stockholders are entitled to nominate and include in our proxy statement for our 2020 annual meeting Director nominees, subject to limitations and requirements in our Bylaws. See “Other Matters—Proxy Access Director Nominees” later in this proxy statement. Any stockholder who wishes to propose any business at the 2020 annual meeting other than for inclusion in our proxy statement pursuant to Rule 14a-8 or pursuant to the proxy access provisions in our Bylaws must provide timely notice and satisfy the other requirements for stockholders proposals in our Bylaws. See “Other Matters—Other Proposals and Nominees” later in this proxy statement. Proposals should be sent via registered, certified, or express mail to: Secretary, GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051.
13. What is Included in the Proxy Materials?
 
We have furnished our 2018 Annual Report with this Proxy Statement. The 2018 Annual Report includes our audited financial statements for our fiscal year ended February 2, 2019 ("fiscal 2018 "), along with other financial information about us. Our 2018 Annual Report is not part of the proxy solicitation materials.
You can obtain, free of charge, a copy of our Form 10-K, which includes our audited financial statements, by:
accessing our website at http://investor.gamestop.com and clicking on the “Investor Relations” link then the “Financial Information” link;
writing to Mike Loftus, Vice President, Global Controller and Investor Relations, at 625 Westport Parkway, Grapevine, Texas 76051; or
calling at: (817) 424-2000.
You can also obtain a copy of our Form 10-K and other periodic filings that we make with the SEC from the SEC’s EDGAR database at www.sec.gov.
14. How Can I Access the Proxy Materials Electronically?
 
Your notice of the Internet availability of the proxy materials, proxy or voting instruction card will contain instructions on how to:
view our proxy materials for the annual meeting on the Internet; and
instruct us to send our future proxy materials to you electronically by e-mail.
Our proxy materials are also available on our website at http://investor.gamestop.com and clicking on the “Investor Relations” link then the “Shareholder Info” link. Our proxy materials will be available during the voting period on www.proxypush.com/gme.
Your notice of Internet availability of the proxy materials, proxy card or voting instruction card will contain instructions on how you may request access to proxy materials electronically on an ongoing basis. Choosing to access your future proxy materials electronically will help us conserve natural resources and reduce the costs of printing and distributing our proxy materials. If you choose to access future proxy materials electronically, you will receive an e-mail with instructions containing a link to the website where those materials are available and a link to the proxy voting website. Your election to access proxy materials by e-mail will remain in effect until you terminate it.



8   | 2019 Proxy Statement


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PROPOSAL 1: ELECTION OF DIRECTORS
The Company
GameStop Corp., a Fortune 500 company headquartered in Grapevine, Texas, is a global, multichannel video game and consumer electronics retailer. GameStop operates over 5,800 stores across 14 countries. The company's consumer product network also includes www.gamestop.com; Game Informer® magazine, the world's leading print and digital video game publication; and ThinkGeek, www.thinkgeek.com, the premier retailer for the global geek community featuring exclusive and unique video game and pop culture products.

Composition of the Board; Cooperation Agreement
The Board currently consists of 12 directors. Each current director is standing for reelection except for Mr. Kim, who will be retiring at the 2019 annual meeting of stockholders. Each current director (other than Mr. Sherman, Ms. Dunn, Mr. Fernandez and Ms. Teffner) was elected at the 2018 annual meeting of stockholders to serve as a director until the 2019 annual meeting and until such director nominee's successor is elected and qualified. Mr. Sherman and Ms. Teffner were appointed to the Board effective April 15, 2019 and August 13, 2018, respectively. On April 19, 2019, the Board appointed Ms. Dunn and Mr. Fernandez to serve as directors of the Company effective April 22, 2019.
On April 1, 2019, the Company announced its entry into a cooperation agreement dated as of March 29, 2019 (the “Cooperation Agreement”) with Permit Capital Enterprise Fund, L.P., Permit Capital, LLC, Permit Capital GP, L.P. and John C. Broderick (together, “Permit Enterprise”) and Hestia Capital Partners LP, Hestia Capital Management, LLC and Kurtis J. Wolf (together “Hestia Capital” and Hestia Capital and Permit Enterprise, together, the “Investor Group”). In the Cooperation Agreement, Permit Enterprise represented to the Company that it beneficially owned, as of the date of the Cooperation Agreement, 1,107,925 shares of common stock and Hestia Capital represented to the Company that it beneficially owned, as of the date of the Cooperation Agreement, 206,900 shares of common stock .
Pursuant to the Cooperation Agreement, the Company agreed to appoint a new independent director (the “Investor Nominee”) from among a group of candidates identified by the Investor Group to the Board within 30 days of the date of the Cooperation Agreement, and Ms. Dunn is the Investor Nominee. Upon her appointment to the Board, Ms. Dunn joined the Nominating and Corporate Governance Committee and the Compensation Committee of the Board in accordance with the Cooperation Agreement. In the Cooperation Agreement, the Company also agreed to nominate an additional independent director (the “Company Nominee”), and Mr. Fernandez is the Company Nominee. Upon his appointment to the Board, Mr. Fernandez joined the Audit Committee. In the Cooperation Agreement, the Company agreed to nominate each of the Investor Nominee and Company Nominee for election as a director of the Company at the 2019 Annual Meeting. The Cooperation Agreement further provides that in the event the Investor Nominee (Ms. Dunn) resigns as a director or otherwise refuses to or is unable to serve for any reason as a director at any time, for so long as each of Permit Enterprise and Hestia Capital beneficially owns, and has continuously been since March 29, 2019 the beneficial owner of, at least 80% of the shares of common stock that each such group member beneficially owned as of March 29, 2019, the Investor Group will have the right to submit the name of a replacement director to the Board for its approval (such approval not to be unreasonably withheld, delayed or conditioned) in accordance with the Board’s internal procedures and the Company’s charter documents and immediately following such approval, the Board shall appoint such replacement director to the Board; provided, that if any proposed replacement director is not so approved by the Board, then the Investor Group will have the right to submit additional names of proposed replacement directors to the Board for its reasonable approval in accordance with the Board’s internal procedures and the Company’s charter documents until the Board so approves a replacement director; provided, further, that any such proposed replacement director will (i) be independent of each member of the Investor Group, (ii) be considered an independent director of the Company under the listing rules of New York Stock Exchange, (iii) have a comparable amount of business experience as the Investor Nominee being replaced and (iv) be in equally good standing in all material respects as the Investor Nominee being replaced.
The Board has established a director retirement age of 75, unless the Executive Chairman grants a waiver as permitted under the retirement policy. Currently, none of our directors is of retirement age. Background information and qualifications with respect to our Board and nominees for election as directors appear below. See “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for information regarding such persons’ holdings of equity securities of the Company.


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2019 Proxy Statement  | 9


The following table sets forth the names and ages of our current directors, the year they first became a director, the positions they hold with the Company, and the standing committees of the Board on which they serve as of May 3, 2019 :
Name 
 
Age
 
Director Since*
 
Position with the Company
 
Audit Committee
 
Compensation Committee
 
Nominating & Corporate Governance Committee
Daniel A. DeMatteo
 
71
 
2002
 
Executive Chairman
 
 
 
 
 
 
George E. Sherman
 
57
 
2019
 
Chief Executive Officer
 
 
 
 
 
 
Jerome L. Davis
 
64
 
2005
 
Director
 
 
 
 
 
  x **
Raul J. Fernandez
 
52
 
2019
 
Director
 
x
 
 
 
 
Lizabeth Dunn
 
45
 
2019
 
Director
 
 
 
x
 
x
Thomas N. Kelly Jr.
 
72
 
2012
 
Director
 
 
 
x
 
 
Shane S. Kim
 
56
 
2011
 
Director
 
 
 
 
 
 
Steven R. Koonin
 
61
 
2007
 
Director
 
 
 
 
 
x
Gerald R. Szczepanski
 
70
 
2002
 
Director
 
x
 
  x **
 
 
Carrie W. Teffner
 
52
 
2018
 
Director
 
x **
 
 
 
 
Kathy P. Vrabeck
 
55
 
2012
 
Director
 
x
 
x
 
 
Lawrence S. Zilavy
 
68
 
2005
 
Director (1)
 
x
 
 
 
x
__________________________________________
*
Includes predecessor companies
**
Committee Chair
(1)
Lead Independent Director
Director Qualifications
Our business is managed under the direction of our Board of Directors. Our corporate governance policies include Board membership qualifications and we strive to have a Board with a mix of skills and experiences that, taken together, provide us with the variety and depth of knowledge necessary for effective oversight, direction and vision for the Company. The following matrix presents qualifications and experiences the Board considered to recommend each director nominee for election:
Qualifications and Experience
Dan A.
DeMatteo
George E.
Sherman
Jerome L.
Davis
Lizabeth
Dunn
Raul J.
Fernandez
Thomas N.
Kelly Jr.
Steven R.
Koonin
Gerald R.
Szczepanski
Carrie W.
Teffner
Kathy P.
Vrabeck
Lawrence S.
Zilavy
Business experience in a senior leadership position  provides the perspective and practical understanding of leading a business organization
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Finance/accounting  experience gained from experience as a CEO, finance or accounting executive, or audit committee member is important because accurate financial reporting and effective internal controls are critical to our success
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International operations  experience is useful in providing the insight and perspective necessary to maintain and grow our business outside of the U.S.
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Marketing or brand management experience is valuable because of the strategic importance of consumer positioning and brand management in the specialty retail business
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Other public company board  experience provides directors with the insight and perspective that enhances the Board's effectiveness
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Retail  experience provides an understanding of strategic and operational issues facing specialty retail companies
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Video game industry  experience is important to our success as the world's largest omnichannel video game retailer
l
 
 
 
l
 
 
 
 
l
 


10   | 2019 Proxy Statement


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Nominees for Election as Director
 
The following individuals are nominees for director at the 2019 annual meeting:
 
DANIEL A. DEMATTEO
 
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Director since   2002
Age   71
 
Other Public Company Directorships:
• Barnes & Noble Education, Inc. (since 2015)
 
GameStop Committees:
• None
 
Mr. DeMatteo is a director and Executive Chairman, a position he has held since June 2010. He served as our Chief Executive Officer from August 2008 to June 2010. He served as Vice Chairman and Chief Operating Officer from March 2005 to August 2008. Prior to March 2005, Mr. DeMatteo served as President and Chief Operating Officer of the Company or our predecessor companies since November 1996.
Director Qualifications:  Mr. DeMatteo brings to the Board over 20 years of experience growing GameStop and its predecessor companies into the world’s largest omnichannel video game retailer and over 30 years of experience as an executive officer in the video game industry. As one of the founders of GameStop, Mr. DeMatteo has demonstrated a record of leadership, innovation and achievement. With his experience with the Company in the roles of Executive Chairman, Vice Chairman, Chief Executive Officer, President and Chief Operating Officer, Mr. DeMatteo provides the Board a unique and valuable perspective on the Company’s operations, strategy and business, including his perspective on the formula for success that has brought the Company to its current industry-leading position. The Company also benefits from Mr. DeMatteo’s entrepreneurial spirit and his extensive network of contacts and relationships within the video game industry as we pursue new opportunities in our continued business transformation.
 
 
 
 
 
 
Executive Chairman, GameStop Corp.

 
 
 
 
 
 
George E. Sherman
 
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Director since   2019
Age   57
 
Other Public Company Directorships:
• None
 
GameStop Committees:
• None
 
Mr. Sherman is a director and is our Chief Executive Officer. Prior to his appointment as the Chief Executive Officer in April 2019, Mr. Sherman served since January 2017 as the Chief Executive Officer of Victra, one of the largest authorized retailers for Verizon Wireless in the U.S. with more than 1,140 Verizon branded retail stores in 46 states. Mr. Sherman, who has a long background in the retail industry, had previously served three years (April 2013 to December 2016) as president of Advance Auto Parts based out of its operations center in Raleigh, North Carolina and as interim CEO from January through April 2016. During his tenure, he helped merge and integrate Raleigh-based General Parts International following its acquisition in 2014. Mr. Sherman has also served in senior leadership roles at Best Buy and Home Depot.
Director Qualifications:  Mr. Sherman brings to the Board more than 25 years of experience in the retail industry, having served in senior management positions overseeing merchandising, marketing, supply chain, store operations, e-commerce and business development.
 
 
 
 
 
 
Chief Executive Officer, GameStop Corp.

 
 
JEROME L. DAVIS
 
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Director since   2005
Age   64
 
Other Public Company Directorships:
• Apogee Enterprises, Inc. (since 2004)
 
GameStop Committees:
• Nominating and Corporate Governance Committee, Chair
 
Mr. Davis has served as the Executive Vice President and Chief Revenue Officer of the Metropolitan Washington Airports Authority in Washington, D.C., which manages and operates Ronald Reagan National and Dulles International Airports, since September 2014. He previously served as Corporate Vice President of Food and Retail for Waste Management, Inc., the leading provider of integrated environmental solutions in North America, from 2010 to 2012.  Mr. Davis was Global Vice President, Service Excellence for Electronic Data Systems, a business and technology services company, from 2003 to 2005.  From 2001 to 2003 at Electronic Data Systems he served as Chief Client Executive Officer and President, Americas for Business Process Management. From 1991 to 2001 he served as President of the Commercial Solutions Division of Maytag Corporation, and as Senior Vice President of Sales for Maytag’s Appliances Division, from 1998 to 1999. He also served in executive positions at Frito Lay and senior positions at Procter & Gamble.

Director Qualifications:  Mr. Davis brings to the Board more than 35 years of experience in Fortune 500 growth oriented companies and extensive expertise and insight in multiple areas including executive leadership, strategy, sales and business development, marketing, information technology, business operations, international, commercial real estate development, consumer/retail consulting, investor relations, corporate governance, finance and enterprise risks, and public company board experience. In addition, his experience as a director of Apogee, including committee service, has given him insights and perspectives on finance, governance, human resources and compensation which benefit the Board.
 
 
 
 
 
 
Executive Vice President & Chief Revenue Officer, Metropolitan Washington Airports Authority

 
 
 
 


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2019 Proxy Statement  | 11


 
Lizabeth Dunn
 
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Director since   2019
Age   45
 
Other Public Company Directorships:
• None
 
GameStop Committees:
• Compensation Committee
 
 
• Nominating & Corporate Governance
 
Ms. Dunn is the Founder and CEO of Pro4ma Inc., an information technology services consulting firm that provides cloud-based data forecasting and predictive analytics tools to retailers. She also is the Founder and CEO of Talmage Advisers, a retail and branded consumer products consulting firm that provides a full range of services across brand strategy, pricing analysis, financial benchmarking and transactional due diligence. Prior to founding these firms, Ms. Dunn served in various senior consulting and financial analyst roles for leading financial firms and retail organizations, including Macquarie Group, FBR, Thomas Weisel, Prudential Equity Group, Bear Stearns, Gap Inc. and Liz Claiborne.
Director Qualifications:  Ms. Dunn brings to the Board 20+ years experience in the retail industry, including experience as a top equity analyst in the retail sector for over a decade.
 
 
 
 
Chief Executive Officer, Pro4ma Inc.

 
 
 
 
Raul J. Fernandez
 
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Director since   2019
Age   52
 
Other Public Company Directorships:
• Kate Spade & Co. (2000 - 2017)
 
GameStop Committees:
• Audit Committee
 
Mr. Fernandez serves as Vice Chairman and Owner of Monumental Sports & Entertainment, a private partnership that co-owns the NBA’s Washington Wizards, the NHL’s 2018 Stanley Cup Champion Washington Capitals, the WNBA’s Washington Mystics, Team Liquid eSports and Wizards District Gaming NBA 2K, as well as co-owns and operates Capital One Arena in Washington, DC. He also serves as Special Advisor and Limited Partner to General Atlantic Partners, a growth equity firm. Mr. Fernandez previously served in several leadership roles at various technology companies, including as Chairman and CEO for ObjectVideo, a leading developer of intelligent video surveillance software. Mr. Fernandez served as a director for Kate Spade & Co. from 2000 through 2017.
Director Qualifications:  Mr. Fernandez brings to the board valuable insight into the world of eSports through his role as Vice Chairman of Monumental Sports & Entertainment, which owns two professional eSports teams.
 
 
 
 
Vice Chairman, Monumental Sports & Entertainment
 
 
 
 
THOMAS N. KELLY JR.
 
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Director since   2012
Age   72
 
Other Public Company Directorships:
• The Scotts Miracle-Gro Company (since 2006)
 
GameStop Committees:
• Compensation Committee
 
Mr. Kelly is a director and a member of the Compensation Committee. He has served as a director since July 2012. Mr. Kelly served as Executive Vice President, Transition Integration of Sprint Nextel Corp., a global communications company ("Sprint Nextel"), from December 2005 until April 2006. He served as the Chief Strategy Officer of Sprint Nextel from August 2005 until December 2005. He served as the Executive Vice President and Chief Operating Officer of Nextel Communications, Inc., a global communications company (“Nextel”), which became Sprint Nextel, from February 2003 until August 2005, and as Executive Vice President and Chief Marketing Officer of Nextel from 1996 until February 2003. Mr. Kelly currently serves on the Board of The Scotts Miracle-Gro Company (“Scotts Miracle-Gro") where he has served as Lead Independent Director and currently serves as the Chairperson of the Innovation and Technology Committee, and a member of the Audit Committee and the Compensation and Organization Committee.
Director Qualifications:  Mr. Kelly brings to the Board extensive board experience as well as more than 25 years of leadership in the communications and wireless industries. His broad business knowledge brings valuable insight in supporting our strategic initiatives.
 
 
 
 
 
 
Former Chief Operating Officer, Nextel Corporation

 
 
 
 


12   | 2019 Proxy Statement


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STEVEN R. KOONIN
 
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Director since   2007
Age   61
 
Other Public Company Directorships:
• None
 
GameStop Committees:
• Nominating and Corporate Governance Committee
 
Mr. Koonin   is a director and has served as a director since June 2007. Mr. Koonin is a member of the Nominating and Corporate Governance Committee. Mr. Koonin is the Chief Executive Officer of the National Basketball Association's Atlanta Hawks, a professional basketball team, a position he has held since April of 2014. He formerly served as the President of Turner Entertainment Networks, a media conglomerate, which includes Turner Network Television ("TNT"), Turner Broadcasting System ("TBS"), truTV and Turner Classic Movies ("Turner"). Mr. Koonin joined TBS in 2000 and was promoted to President of Turner in 2006. Mr. Koonin was responsible for the rebranding of TNT and TBS and for the development of some of the most successful programming in cable television history. He also led the rebrand of Court TV as truTV. Prior to joining Turner, Mr. Koonin spent 14 years with The Coca-Cola Company, a beverage company (“Coca-Cola”), including serving as Vice President of Consumer Marketing. In addition to leading the Atlanta Hawks organization, Mr. Koonin is extremely active in the Atlanta community. He serves as the Vice Chairman of the Georgia Aquarium, on the Executive Committee of the Metro Chamber of Commerce and as a board member of the Fox Theater.
Director Qualifications:  Mr. Koonin brings to the Board 18 years of executive leadership experience with leading providers of media and live entertainment and nearly 15 years of experience with a globally-recognized consumer brand. Through his executive leadership experience at both Turner and Coca-Cola, he brings to the Board deep knowledge of the entertainment industry and content creation and delivery, as well as consumer branding strategy and tactics and insight into promoting growth strategies for consumer businesses.
 
 
 
 
 
 
Chief Executive Officer, The Atlanta Hawks


 
 
 
 
 
 
 
 
 
GERALD R. SZCZEPANSKI
 
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Director since   2002
Age   70
 
Other Public Company Directorships:
• Rush Enterprises, Inc. (2008 - 2015)
 
GameStop Committees:
• Compensation Committee, Chair
 
 
• Audit Committee
 
Mr. Szczepanski is a director and has served as a director for the Company and its predecessor companies since 2002. Mr. Szczepanski is Chair of the Compensation Committee. Mr. Szczepanski is currently retired. Mr. Szczepanski was the co-founder, and, from 1994 to 2005, the Chairman and Chief Executive Officer of Gadzooks, Inc., a publicly-traded specialty retailer of casual clothing and accessories for teenagers. Mr. Szczepanski served on the board of directors of Rush Enterprises, Inc. a publicly-traded full-service, integrated retailer of commercial vehicles and related services.
Director Qualifications:  Mr. Szczepanski brings to the Board over 35 years of experience in the retail business. He has extensive leadership experience as both a former chairman and chief executive officer of a public company in the specialty retail industry.
 
 
 
 
 
 
Former Chairman, Gadzooks, Inc.


 
 
CARRIE W. TEFFNER
 
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Director since   2018
Age   52
 
Other Public Company Directorships:
• Ascena Retail Group, Inc. (since 2018)
 
GameStop Committees:
• Audit Committee, Chair
 
Ms. Teffner   is a director and chair of the Audit Committee. She has served as a director at GameStop since August 2018. Ms. Teffner served at Crocs, Inc. in the roles of Executive Vice President and Chief Financial Officer from December 2015 through August 2018, and as Executive Vice President, Finance and Strategic Projects from August 2018 through April 1, 2019. Before assuming her executive positions at Crocs, she served on the Crocs board of directors, which she joined in June 2015. Prior to joining Crocs, she served as Executive Vice President and Chief Financial Officer at PetSmart and, before that, at Weber-Stephen Products. Prior to those roles, she served as Senior Vice President and Chief Financial Officer of Timberland and spent 21 years in various leadership positions at Sara Lee Corporation. Ms. Teffner currently serves as the Interim Executive Chair of the board of directors at Ascena Retail Group, Inc.
Director Qualifications:  Ms. Teffner brings to the Board more than 30 years of financial and operational leadership experience in the consumer goods and retail industries, which provides valuable insight in support of our strategies.
 
 
 
 
 
 
Interim Executive Chair,
ascena retail group, inc.


 
 


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2019 Proxy Statement  | 13


 
KATHY P. VRABECK
 
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Director since   2012
Age   55
 
Other Public Company Directorships:
• AVP, Inc. (2006 - 2008)
 
GameStop Committees:
• Audit Committee
 
 
• Compensation Committee
 
Ms. Vrabeck is a director and a member of the Audit Committee and Compensation Committee. She has served as a director since June 2012. She is a Senior Client Partner in the Los Angeles office of Korn Ferry International, a global talent and organizational advisory firm, where she is a member of Korn Ferry's Digital Practice, working closely with consumer and technology clients. Prior to joining Korn Ferry in October 2015, she was a Partner at Heidrick & Struggles International, Inc., an executive search firm ("Heidrick & Struggles"), where she served as both Global Sector Leader of their Media, Entertainment and Digital practice and partner-in-charge of the Los Angeles office. Prior to joining Heidrick & Struggles in July 2011, Ms. Vrabeck was with Legendary Entertainment, a media company, from March 2009 to March 2011 where she served as President, Legendary Digital and was responsible for the creation, management and delivery of digital entertainment, with a focus on video games, across current and next-generation platforms. From May 2007 to November 2008, Ms. Vrabeck was with Electronic Arts, Inc., a developer, marketer, publisher and distributor of video games ("EA"), where she served as President, EA Casual Entertainment and led EA's efforts in the fastest growing segments of the video game market: mobile, online, social networking and global media sales. Prior to joining EA, Ms. Vrabeck was with Activision, Inc., a video game publisher ("Activision"), from August 1999 to April 2006 where she served as President, Activision Publishing, overseeing Activision's product development and global brand management and publishing operations. Earlier in her career, Ms. Vrabeck held various marketing, sales and finance positions with ConAgra, The Pillsbury Company, Quaker Oats and Eli Lilly and Company. Ms. Vrabeck currently serves on the DePauw University Board of Trustees.
Director Qualifications : Ms. Vrabeck brings to the Board over 10 years of experience in senior executive leadership positions with major game and film makers. Her digital entertainment knowledge, her knowledge of two of the Company's largest suppliers and her business experience bring valuable insight in supporting the advancement of our business and digital strategies.
 
 
 
 
 
 
Senior Client Partner, Consumer Markets, Korn Ferry International

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LAWRENCE S. ZILAVY
 
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Director since   2005
Age   68
 
Other Public Company Directorships:
• The Hain Celestial Group, Inc. (2002 - 2018)
 
 
• Barnes & Noble, Inc. (2006 - 2010)
 
GameStop Committees:
• Audit Committee
 
 
• Nominating and Corporate Governance Committee
 
Mr. Zilavy   is a director and a member of the Audit Committee and the Nominating and Corporate Governance Committee as well as our lead independent director. He has served as a director since October 2005. Since October 2009, Mr. Zilavy has been employed by a private family investment office. Mr. Zilavy was a Senior Vice President of Barnes & Noble College Booksellers, Inc., a college book retailer, from May 2006 to September 2009. He was Executive Vice President, Corporate Finance and Strategic Planning for Barnes & Noble, Inc., a bookseller and retailer of content, digital media and education products (“Barnes & Noble”), from May 2003 until November 2004 and was Chief Financial Officer of Barnes & Noble from June 2002 through April 2003. Prior to joining Barnes & Noble, Mr. Zilavy had a 25-year career in banking. Mr. Zilavy served on the Board of Directors of The Hain Celestial Group, Inc., a natural and organic food and personal care products company from 2002 to 2018. Mr. Zilavy also served as a director of Barnes & Noble from 2006 to 2010.
Director Qualifications:  Mr. Zilavy brings to the Board significant senior executive-level experience in a large specialty retail company and experience on public company boards. This experience, together with Mr. Zilavy’s 25 years of experience as a banker, provides the Board strong financial, operating and governance expertise.
 
 
 
 
LR Enterprises Management, LLC




 
 
 
 
 
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF EACH NOMINEE FOR DIRECTOR NAMED ABOVE. PROXIES SOLICITED BY THIS PROXY STATEMENT WILL BE VOTED FOR EACH NOMINEE NAMED ABOVE UNLESS A VOTE AGAINST A NOMINEE OR AN ABSTENTION IS SPECIFICALLY INDICATED.




14   | 2019 Proxy Statement


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Meetings and Committees of the Board
 
The Board met 23 times during fiscal 2018 . Each incumbent director who served on the Board at any time during fiscal 2018 attended 75% or more of the aggregate of all of the meetings of the Board and the committees thereof on which they served (held during the period in fiscal 2018 that he or she served).
The Board has three standing committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee.
Audit Committee
The Audit Committee assists the Board in fulfilling its oversight responsibility and reviews:
The adequacy and integrity of the Company’s financial statements, financial reporting process and internal system of accounting controls;
The appointment, termination, compensation, retention and oversight of the independent registered public accountants;
The scope of the audit performed by the independent registered public accounting firm of the books and records of the Company;
The internal audit function and plan;
The Company’s compliance with legal and regulatory requirements;
The Company’s Code of Business Conduct and Ethics; and
With management and the independent auditor any related party transactions and approves such transactions, if any.
In addition, the Audit Committee has established procedures for the receipt, retention and treatment of confidential and anonymous complaints regarding the Company’s accounting, internal accounting controls and auditing matters. The Board has adopted a written charter setting out the functions of the Audit Committee (the “Audit Committee Charter”), a copy of which is available on the Company’s website at http://investor.gamestop.com and is available in print to any stockholder who requests it in writing to the Company’s Secretary, GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051. As required by the Audit Committee Charter, the Audit Committee will continue to review and reassess the adequacy of the Audit Committee Charter annually and recommend any changes to the Board for approval.
The current members of the Audit Committee are Carrie W. Teffner (Chair), Lawrence S. Zilavy, Gerald R. Szczepanski, Kathy P. Vrabeck and Raul J. Fernandez, each of whom is an “independent” director under the listing standards of the NYSE. The Board has determined that Ms. Teffner and Mr. Zilavy have the requisite attributes of an “audit committee financial expert” as defined by regulations promulgated by the SEC and that such attributes were acquired through relevant education and/or experience. In addition to meeting the independence standards of the NYSE, each member of the Audit Committee is financially literate and meets the independence standards established by the SEC. The Audit Committee met 10 times during fiscal 2018 . Ms. Teffner joined the Audit Committee on August 13, 2018, and Mr. Fernandez joined the Audit Committee on April 22, 2019.
Compensation Committee
The Compensation Committee is primarily responsible for:
Annually reviewing and approving corporate goals and objectives relevant to the Executive Chairman and the Chief Executive Officer compensation, evaluating the Executive Chairman’s and the Chief Executive Officer’s performance and, either as a committee or together with the other independent directors of the Company (as directed by the Board), determining and approving the Executive Chairman’s and Chief Executive Officer’s compensation level based on this evaluation;
Working together with the Executive Chairman and Chief Executive Officer, annually reviewing and approving, for the other Named Executive Officers and other executive officers, the annual base salary level, the annual incentive opportunity level, the long-term incentive opportunity level, employment agreements, severance arrangements, and change of control agreements/provisions, in each case as, when and if appropriate, and any special or supplemental benefits;
Working together with the Executive Chairman and Chief Executive Officer, annually reviewing and making recommendations to the Board with respect to the compensation programs and policies applicable to the Company’s officers and directors, including incentive-compensation plans, equity-based plans and severance and retirement plans;
Engaging executive compensation advisers, if desired, to assist the Compensation Committee in conducting its duties;
Administering our equity-based incentive plans, including the GameStop Corp. Amended and Restated 2011 Incentive Plan (the “2011 Incentive Plan”) and our Fourth Amended and Restated 2001 Incentive Plan (the “2001 Incentive Plan”) and, if Proposal 3 is approved at the 2019 annual meeting, our 2019 Incentive Plan; and
Producing an annual report on executive compensation for inclusion in the Company’s proxy statement.


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2019 Proxy Statement  | 15


The current members of the Compensation Committee are Gerald R. Szczepanski (Chair), Thomas N. Kelly Jr., Kathy P. Vrabeck and Lizabeth Dunn, each of whom meets the independence standards of the NYSE and the SEC. The Board has adopted a written charter setting out the functions of the Compensation Committee, a copy of which is available on the Company’s website at http://investor.gamestop.com and is available in print to any stockholder who requests it in writing to the Company’s Secretary, GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051. The Compensation Committee met 6 times during fiscal 2018 . Ms. Dunn joined the Compensation Committee on April 22, 2019.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is primarily responsible for:
Reviewing and recommending to the Board candidates for service on the Board and its committees, including the nomination of existing directors;
Periodically reviewing and making recommendations to the Board regarding the size and composition of the Board and its committees;
Annually reviewing the independence of the directors;
Overseeing the Company’s orientation process for newly elected directors and regularly assessing the adequacy of and need for additional director continuing education programs;
Overseeing the annual performance evaluation of the Board and its committees and management; and
Periodically reviewing and recommending changes to the Company’s Corporate Governance Guidelines.
The current members of the Nominating and Corporate Governance Committee are Jerome L. Davis (Chair), Steven R. Koonin, Lawrence S. Zilavy and Lizabeth Dunn, each of whom meets the independence standards of the NYSE. The Board has adopted a written charter setting out the functions of the Nominating and Corporate Governance Committee, a copy of which can be found on our website at http://investor.gamestop.com and is available in print to any stockholder who requests it in writing to the Company’s Secretary, GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051. The Nominating and Corporate Governance Committee met 7 times during fiscal 2018 . Ms. Dunn joined the Nominating and Corporate Governance Committee on April 22, 2019.
Minimum Qualifications
The Nominating and Governance Committee ensures that the Board possesses the right mix of skills and experiences to provide effective guidance and oversight to management as it executes the Company’s long-term strategy. The Nominating and Corporate Governance Committee does not set specific minimum qualifications for directors except to the extent required to meet applicable legal, regulatory and stock exchange requirements, including, but not limited to, the independence requirements of the NYSE and the SEC, as applicable. Nominees for director are selected on the basis of outstanding achievement in their personal careers; board experience; wisdom; integrity; diversity; ability to make independent, analytical inquiries; understanding of the business environment; and willingness to devote adequate time to Board duties. The Nominating and Corporate Governance Committee and the Board believe that Board membership should reflect diversity in its broadest sense, including diversity of skills, background, gender and ethnicity. While the selection of qualified directors is a complex and subjective process that requires consideration of many intangible factors, the Nominating and Corporate Governance Committee believes that each director should have a basic understanding of (i) the principal operational and financial objectives and plans and strategies of the Company, (ii) the results of operations and financial condition of the Company and its business segments, and (iii) the relative standing of the Company and its business segments in relation to their competitors.
Nominating Process
The Nominating and Corporate Governance Committee will consider recommendations for director candidates from a variety of sources (including incumbent directors, stockholders (in accordance with the procedures described below), Company management and third-party search firms). When nominating an incumbent director for re-election at an annual meeting, the Nominating and Corporate Governance Committee considers the director’s performance on the Board and its committees and the director’s qualifications in light of the Nominating and Corporate Governance Committee’s assessment of the Board’s needs. The Nominating and Corporate Governance Committee has not adopted any criteria for evaluating a candidate for nomination to the Board that differ depending on whether the candidate is nominated by a stockholder, an incumbent director, Company management, third-party search firm or other source.
Consideration of Stockholder-Nominated Directors
In addition to proposing a candidate for possible nomination by the Nominating and Corporate Governance Committee, any stockholder is entitled to directly nominate one or more candidates for election to the Board of Directors in accordance with the Company’s Bylaws. See “Other Matters Other Proposals and Nominees” later in this proxy statement. Also, in March 2017, our Board amended the Bylaws to include a proxy access provision. The proxy access bylaw allows a stockholder, or a group of up to 25 stockholders, owning 3% or more of our outstanding common stock continuously for at least three years, to nominate and include in our proxy materials director nominees constituting up to two individuals or 25% of the Board (whichever is greater), provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in Article III of the Bylaws.


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The complete text of our Bylaws, as amended, is available on our website at http://investor.gamestop.com and is available in print to any stockholder who requests it in writing to the Company’s Secretary, GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051. See “Other Matters Proxy Access Director Nominees” elsewhere in this proxy statement.
As discussed above in this Proposal 1 under “Composition of Board; Cooperation Agreement,” our Board appointed each of Ms. Dunn and Mr. Fernandez as new independent directors of the Board effective April 22, 2019. In accordance with the Cooperation Agreement, the Company included Ms. Dunn and Mr. Fernandez as nominees to the Board for election at the 2019 annual meeting and has recommended, and will solicit proxies for, the election of Ms. Dunn and Mr. Fernandez at the 2019 annual meeting.
In addition, and subject to certain terms and conditions, if prior to the date that is 15 calendar days prior to the last day of the advance notice period for the submission by stockholders of director nominations for consideration at the 2020 annual meeting of the Company’s stockholders, Ms. Dunn resigns as a director or otherwise refuses to or is unable to serve for any reason as a director, then the Investor Group will have the right to submit the name of a replacement director to the Board for its approval (such approval not to be unreasonably withheld) in accordance with the Board’s internal procedures and the Company’s charter documents; provided, that if any proposed replacement director is not so approved by the Board, then the Investor Group will have the right to submit additional names of proposed replacement directors to the Board for its reasonable approval in accordance with the Board’s internal procedures and the Company’s charter documents until the Board so approves a replacement director.
Annual Board Evaluation Process
The Board recognizes that a robust and constructive evaluation process is an essential part of good corporate governance and board effectiveness. The evaluation processes utilized by the Board are designed and implemented under the direction of the Nominating and Corporate Governance Committee and aim to assess Board and committee effectiveness as well as individual Director performance and contribution levels. The Corporate Governance Committee and full Board consider the results of the annual evaluations in connection with their review of Director nominees to ensure the Board continues to operate effectively.

Each year our Directors complete governance questionnaires and self-assessments. These questionnaires and assessments, and feedback from discussions between members of the Nominating and Corporate Governance Committee and individual Directors, facilitate a candid assessment of: (i) the Board’s performance in areas such as business strategy, risk oversight, talent development and succession planning and corporate governance; (ii) the Board’s structure, composition and culture; and (iii) the mix of skills, qualifications and experiences of our Directors.
Corporate Governance
 
Codes of Ethics
The Company has adopted a Code of Ethics for Senior Financial and Executive Officers that is applicable to the Company’s Executive Chairman, Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Accounting Officer, and any Executive Vice President of the Company or Vice President of the Company employed in a finance or accounting role. The Company also has adopted a Code of Standards, Ethics and Conduct applicable to all of the Company’s management-level employees and non-employee directors. The Code of Ethics for Senior Financial and Executive Officers and the Code of Standards, Ethics and Conduct are available on the Company’s website at http://investor.gamestop.com and are available in print to any stockholder who requests them in writing to the Company’s Secretary, GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051. In accordance with SEC rules, the Company intends to disclose any amendment (other than any technical, administrative or other non-substantive amendment) to either of the above Codes, or any waiver of any provision thereof with respect to certain specified officers listed above, on the Company’s website at http://investor.gamestop.com within four business days following such amendment or waiver.
Claw-back Policy
The Company has adopted a claw-back policy which requires the Board, when permitted by law, to require reimbursement of annual incentive payments or long-term incentive payments from a current or former executive officer of the Company where the payment was predicated upon achieving certain financial results or other operating metrics, and either (1) the Board determines in its good faith judgment that such financial results or other operating metrics were achieved in whole or part as a result of fraud or other misconduct on the part of such executive, or fraud or other misconduct of other employees of the Company of which such executive had knowledge, whether or not such conduct results in any restatement of Company financial statements filed with the SEC, or (2) such financial results or other operating metrics were the subject of a restatement of Company financial statements filed with the SEC, and a lower payment would have been made to the executive officer based upon the restated financial results. The Company will, to the fullest extent possible under applicable law, seek to recover from the individual executive officer, in the case of (1), the full amount of the individual executive officer’s incentive payments for the relevant period (including, at a minimum, for the three-year period prior to such financial results), and in the case of (2), the amount by which the individual executive officer’s incentive payments for the relevant period (including, at a minimum, for the three-year period prior to the restatement of financial results) exceeded the lower payment that would have been made based on the restated financial results.


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2019 Proxy Statement  | 17


Equity Ownership Policy
The Board believes that it is important for each executive officer and non-employee director of the Company to have a financial stake in the Company to help align the executive officer’s and non-employee director’s interests with those of the Company’s stockholders. To that end, the Company has an equity ownership policy requiring that each executive officer and non-employee director of the Company maintain ownership of common stock with a value of at least the following:
Executive Officer or Non-employee Director  
Fiscal 2018 Stock Ownership Guidelines
Executive Chairman
5 times base salary
Chief Executive Officer
5 times base salary
Chief Operating Officer or Executive Vice President
3 times base salary
Non-employee Director
$275,000
New executive officers or non-employee directors of the Company will be given a period of five (5) years to attain full compliance with these requirements. These requirements will be reduced by 50% for executive officers after the executive officer reaches the age of 62 in order to facilitate appropriate financial planning.
For purposes of these determinations, (i) stock ownership includes shares of common stock which are directly owned or owned by family members residing with the executive officer or non-employee director, or by family trusts, as well as vested options and vested restricted stock, and unvested restricted stock or equivalents, unless they are subject to achievement of performance targets, and common stock or stock equivalents credited to such executive officer or non-employee director under any deferred compensation plan, and (ii) common stock shall be valued per share using the 200-day trailing average NYSE per share closing price. As of February 2, 2019 , each of our executive officers and non-employee directors was in compliance with our equity ownership policy.
Anti-Hedging Policy
Given that the aim of ownership of common stock is to ensure that employees and directors of the Company have a direct personal financial stake in the Company’s performance, hedging transactions on the part of employees and directors of the Company could be contrary to that purpose. Therefore, the Company has adopted an anti-hedging policy which states that the implementation by an employee or director of the Company of hedging strategies or transactions using short sales, puts, calls or other types of financial instruments (including, but not limited to, prepaid variable forward contracts, equity swaps, collars, and exchange funds) based upon the value of common stock and applied to equity securities granted to such employee or director, or held, directly or indirectly, by such employee or director, is strictly prohibited.
Corporate Governance Guidelines; Certifications
The Board has adopted Corporate Governance Guidelines. The Corporate Governance Guidelines are available on the Company’s website at http://investor.gamestop.com and are available in print to any stockholder who requests them in writing to the Company’s Secretary, GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051.
On an annual basis, our Chief Executive Officer submits to the NYSE the annual certification required by Section 303A.12(a) of the NYSE Listed Company Manual. In addition, the Company has filed with the SEC as exhibits to its Annual Report on Form 10-K, for fiscal 2018 , the certifications of its Chief Executive Officer and Chief Financial Officer required pursuant to Section 302 of the Sarbanes-Oxley Act relating to the quality of its public disclosure.
Communications Between Stockholders and Interested Parties and the Board
Stockholders and other interested persons seeking to communicate with the Board should submit any communications in writing to the Company’s Secretary, GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051. Any such communication must state the number of shares beneficially owned by the stockholder making the communication. The Company’s Secretary will forward such communication to the full Board or to any individual director or directors (including the presiding director of the executive sessions of the non-management directors or the non-management directors as a group) to whom the communication is directed.
Attendance at Annual Meetings
All members of the Board are expected to attend in person the Company’s 2019 annual meeting and be available to address questions or concerns raised by stockholders. All of the directors that stood for re-election at the 2018 annual meeting of stockholders attended the 2018 annual meeting.


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Director Independence; Independence Determination
The Board has adopted the definition of independence in the listing standards of the NYSE. In its assessment of director independence, the Board considers all commercial, charitable and other relationships and transactions that any director or member of his or her immediate family may have with us, with any of our affiliates or with any of our consultants or advisers.
The Board has affirmatively determined that each of Jerome L. Davis, Thomas N. Kelly Jr., Steven R. Koonin, Gerald R. Szczepanski, Carrie W. Teffner, Kathy P. Vrabeck, Lawrence S. Zilavy, Lizabeth Dunn and Raul J. Fernandez is independent under the NYSE standards as well as under standards set forth in SEC regulations, and that the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee are comprised exclusively of independent directors under the foregoing standards. The Board did not determine Messrs. DeMatteo, Kim and Sherman to be independent because of their recent or current executive positions with the Company.
The non-management directors of the Company hold regularly scheduled executive sessions without management present at least once annually and the independent directors hold at least one meeting annually with only independent directors present. Our lead independent director, Mr. Zilavy, is the presiding director for each non-management or independent director executive session.
Board Leadership Structure
The Board's current leadership structure is comprised of an Executive Chairman position that is separate from the Chief Executive Officer position, as well as eleven other directors of which nine are independent, including a lead independent director. Under the Board’s current structure, Mr. DeMatteo is the Executive Chairman and is also a member of management. As a former Chief Executive Officer of the Company, the Board believes that Mr. DeMatteo’s in-depth knowledge of our business and its challenges, as well as his experience in the video game industry as a whole, make him the best qualified person to serve as Executive Chairman. In addition, this structure facilitates better communication between management and the Board and allows Mr. DeMatteo to more effectively provide guidance to the senior management team, including the Chief Executive Officer. Mr. George Sherman, the Chief Executive Officer of the Company also serves as a director. The Board believes that Mr. Sherman’s service as a director further enhances the Board’s oversight of our day-to-day operations and provides additional management expertise with respect to the complexities of our business units. The Board believes that at this time our stockholders are best served by this structure. All directors play an active role in overseeing the Company’s business both at the Board and committee level. For additional oversight, our lead independent director presides over regularly scheduled meetings with the other non-management directors to discuss and evaluate the Company’s business without members of management present. This structure, together with our other corporate governance practices, provides strong independent oversight of management while ensuring clear strategic direction for the Company.
Risk Oversight
Responsibility for risk oversight resides with the full Board. Committees have been established to help the Board carry out this responsibility by focusing on key areas of risk inherent in the business. The Audit Committee oversees risk associated with financial and accounting matters, including compliance with legal and regulatory requirements, related-party transactions and the Company’s financial reporting and internal control systems. The Audit Committee also oversees the Company’s internal audit function and regularly meets separately with the Company’s head of internal audit, Chief Legal Officer, external auditors and other financial and executive management. 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 the Company’s compensation policies to determine effectiveness and to assess the risk they present to the Company. Based on this review, the Company has concluded that its compensation policies and procedures are not reasonably likely to have a material adverse effect on the Company. In addition, at least annually, the Board conducts a formal business review including a risk assessment related to the Company’s existing business and new initiatives. Because overseeing risk is an ongoing process and inherent in the Company’s strategic decisions, the Board also discusses risk throughout the year at other meetings in relation to specific topics or actions.


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2019 Proxy Statement  | 19


Director Compensation
 
In fiscal 2018 , total compensation for each non-employee director was set at $280,000, which consisted of a $140,000 cash retainer and a restricted stock grant valued at approximately $140,000 which vests after one year. For the fiscal year ended February 1, 2020 (“fiscal 2019 ”), the compensation structure for each non-employee director will remain consistent with the fiscal 2018 director compensation structure, except that, if Mr. Fernandez and Ms. Dunn are elected to the Board at the 2019 annual meeting, then on or around the date of the 2019 annual meeting, each of them will receive an additional 2,698 shares for their service from their appointment date of April 22, 2019 through the date of the 2019 annual meeting. We reimburse our directors for expenses in connection with attendance at Board and committee meetings. Other than with respect to reimbursement of expenses, directors who are our employees do not receive additional compensation for their services as directors, and none of the directors receive additional compensation for their services as committee chairpersons or as our lead independent director. For a director who retires after reaching age 75 or ceases to serve after at least 10 years of Board service to the Company, with the consent of the Compensation Committee, all awards granted to such director fully vest upon termination of Board service.
Additionally, because the Board believes that it is important for each director of the Company to have a financial stake in the Company to help align the director’s interests with those of the Company’s stockholders, we require our directors maintain a certain level of ownership of common stock. For a description of the equity ownership policy, see "Corporate Governance-Equity Ownership Policy" above.
The following table provides information regarding compensation earned by our non-employee directors during fiscal 2018 , except for Shane S. Kim. Mr. Kim served as the Company's Interim Chief Executive Officer from May 31, 2018 to April 15, 2019, therefore, all compensation he earned from the Company in fiscal 2018 is included in the Summary Compensation Table.
Name
Fees Earned and
Paid in Cash (1)
 
Stock
Awards (2)
 
Total
Jerome L. Davis (3)
$
140,000

 
$
140,000

 
$
280,000

Thomas N. Kelly Jr. (3)
$
140,000

 
$
140,000

 
$
280,000

Steven R. Koonin (3)
$
140,000

 
$
140,000

 
$
280,000

Stephanie M. Shern (4)
$
70,000

 
$

 
$
70,000

Gerald R. Szczepanski (3)
$
140,000

 
$
140,000

 
$
280,000

Carrie W. Teffner (5)
$
70,000

 
$
140,000

 
$
210,000

Kathy P. Vrabeck (3)
$
140,000

 
$
140,000

 
$
280,000

Lawrence S. Zilavy (3)
$
140,000

 
$
140,000

 
$
280,000

____________________________
(1)
Represents amounts earned and paid for service in fiscal 2018.
(2)
Reflects the grant date fair values in accordance with FASB ASC Topic 718 for the fiscal 2018 grants of 9,353 shares of restricted stock for each of the Board members, except for Ms. Teffner, who was granted 9,080 shares. Grants of restricted shares vest after one year following the grant date, typically on or around the date of the annual meeting of stockholders, subject to continued service to the Company as well as accelerated vesting in the case of retirement if approved by the Compensation Committee.
(3)
As of February 2, 2019 , this director held 9,353 shares of restricted stock that had not vested.
(4)
Ms. Shern retired from the Board, effective June 30, 2018.
(5)
Ms. Teffner joined the Board effective August 16, 2018. As of February 2, 2019 , she held 9,080 shares of restricted stock that have not vested.


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Executive Officers
 
The following table sets forth the names and ages of our executive officers and the positions they hold:
Name 
Age
Title
Daniel A. DeMatteo
71
Executive Chairman
George E. Sherman
57
Chief Executive Officer
Robert A. Lloyd
57
Chief Operating Officer and Chief Financial Officer
Daniel J. Kaufman
59
Executive Vice President, Chief Transformation Officer
Troy W. Crawford
51
Senior Vice President, Chief Accounting Officer
Roles of Executive Chairman and Chief Executive Officer
The company employs an Executive Chairman (Mr. DeMatteo) and a Chief Executive Officer (Mr. Sherman). As Executive Chairman, Mr. DeMatteo is responsible for the leadership and coordination of the activities of the Board, for overseeing the strategic direction of the Company and for providing guidance to the Company’s Chief Executive Officer and other executives. The Chief Executive Officer has responsibility for development and execution of our strategic plans and for leadership and oversight of all of the Company’s day-to-day operations and performance.
Business Experience of Executive Officers
Information with respect to executive officers of the Company who are also directors or nominees for director is set forth in “Information Concerning the Directors and Nominees” above.
Robert A. Lloyd currently serves as Chief Operating Officer and Chief Financial Officer, a role he has held since May 2018. Mr. Lloyd previously served as Executive Vice President and Chief Financial Officer since 2010. Mr. Lloyd also served as our Senior Vice President and Chief Accounting Officer, a position he held from 2005 to 2010. Prior to that, Mr. Lloyd was the Vice President - Finance of GameStop or its predecessor companies from 2000 and was the Controller of GameStop’s predecessor companies from 1996 to 2000. From 1988 to December 1996, Mr. Lloyd held various financial management positions as Controller or Chief Financial Officer, primarily in the telecommunications industry. Prior to 1988, Mr. Lloyd held various positions with the public accounting firm of EY. Mr. Lloyd is a CPA. Mr. Lloyd currently serves on the Board of Directors of the Make-A-Wish Foundation of America, a non-profit organization.
Daniel J. Kaufman currently serves as Executive Vice President, Chief Transformation Officer, a role he transitioned to effective May 10, 2019. Previously, Mr. Kaufman served as Chief Legal and Administrative Officer and Corporate Secretary since March 2018, and prior to that, had served as Chief Legal Officer and Corporate Secretary since 2016. Mr. Kaufman also served as Senior Vice President, General Counsel and Corporate Secretary from 2005 through 2016. Before joining GameStop, Mr. Kaufman was employed by Electronics Boutique Holdings Corp. from January 2002, where he was serving as Senior Vice President, General Counsel and Corporate Secretary at the time of its acquisition by GameStop. In addition to his responsibilities at GameStop, Mr. Kaufman serves on the Board of Directors of Five Below, Inc., a discount retailer, and of the National Liberty Museum, a non-profit organization. Mr. Kaufman previously served as a director of the Entertainment Merchants Association, a trade organization.
Troy W. Crawford is the Senior Vice President and Chief Accounting Officer, a role he has held since June 2010. He joined GameStop in 2006 as Vice President-Controller. From 1993 to 2006, Mr. Crawford held various financial management positions including Controller at CompUSA, a consumer electronics retailer. Prior to 1993 he held various finance and accounting positions with Cinemark USA, Inc., a motion picture exhibition company. Mr. Crawford is a CPA.


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2019 Proxy Statement  | 21


Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
The following table sets forth the number of shares of our common stock (including common stock that may be purchased pursuant to the exercise of options, warrants or otherwise within 60 days of May 3, 2019 ) beneficially owned on May 3, 2019 by each Director, each of the named executive officers, each holder of 5% or more of our common stock and all of our directors and executive officers as a group. The table below excludes Mr. Mauler, who departed the Company in May 2018, and Messrs. Bartel and Hogan, both of whom departed the Company in February 2018. Except as otherwise noted, the individual director or executive officer or his or her family members had sole voting and investment power with respect to the identified securities. Except as otherwise noted, the address of each person listed below is GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051. The total number of shares of our common stock outstanding as of May 3, 2019 was 102,268,940 .
 
 
Shares Beneficially Owned
Name
 
Number (1)
 
%
FMR LLC
 
15,201,883

(2)  
14.9
245 Summer Street
 
 
 
 
Boston, MA 02210
 
 
 
 
BlackRock, Inc.
 
15,143,071

(3)  
14.9
55 East 52 nd  Street
 
 
 
 
New York, NY 10055
 
 
 
 
The Vanguard Group
 
10,363,882

(4)  
10.2
100 Vanguard Boulevard
 
 
 
 
Malvern, PA 19355
 
 
 
 
Dimensional Fund Advisors LP
 
7,200,453

(5)  
7.1
6300 Bee Cave Road
 
 
 
 
Austin, TX 78746
 
 
 
 
George E. Sherman
 
1,174,497

(6)  
1.1
Daniel A. DeMatteo
 
399,442

(7)  
*
Robert A. Lloyd
 
306,736

(8)  
*
Daniel J. Kaufman
 
104,548

(9)  
*
Troy W. Crawford
 
82,592

(10)  
*
Jerome L. Davis
 
60,606

(11)  
*
Lizabeth Dunn
 

 
*
Raul J. Fernandez
 

 
*
Thomas N. Kelly Jr.
 
39,650

(11)  
*
Shane S. Kim
 
137,661

(12)  
*
Steven R. Koonin
 
34,396

(11)  
*
Gerald R. Szczepanski
 
50,256

(11)  
*
Carrie W. Teffner
 
9,080

(13)  
*
Kathy P. Vrabeck
 
34,056

(11)  
*
Lawrence S. Zilavy
 
40,316

(11)  
*
All Current Directors and Officers as a group (15 persons)
 
2,473,836

(14)  
2.4
________________________________
*
Less than 1.0%.
(1)
Shares of common stock that an individual or group has a right to acquire within 60 days after May 3, 2019 pursuant to the exercise of options, warrants or other rights are deemed to be outstanding for the purpose of computing the beneficial ownership of shares and percentage of such individual or group, but are not deemed to be outstanding for the purpose of computing the beneficial ownership of shares and percentage of any other person or group shown in the table.
(2)
Based on information included in its Amendment No. 9 to Schedule 13G filed with the SEC on February 13, 2019, FMR LLC has the sole power to vote or to direct the vote with respect to 1,773,743 of these shares and sole power to dispose or direct the disposition with respect to 15,201,883 of these shares.
(3)
Based on information included in its Amendment No. 12 to Schedule 13G filed with the SEC on January 28, 2019, BlackRock, Inc. has the sole power to vote or to direct the vote with respect to 14,799,316 of these shares and sole power to dispose or direct the disposition with respect to 15,143,071 of these shares.
(4)
Based on information included in its Amendment No. 8 to Schedule 13G filed with the SEC on February 11, 2019, The Vanguard Group has the sole power to vote or to direct the vote with respect to 100,167 of these shares, the sole power to dispose or direct the disposition with respect to 10,263,278


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of these shares and the shared power to vote or direct to vote with respect to 12,123 of these shares and the shared power to dispose or direct the disposition with respect to 100,604 of these shares.
(5)
Based on information included in its Amendment No. 1 to Schedule 13G filed with the SEC on February 8, 2019, Dimensional Fund Advisors LP has the sole power to vote or to direct the vote with respect to 7,105,983 of these shares and the sole power to dispose or direct the disposition with respect to 7,200,453 of these shares.
(6)
Of these shares, 1,174,497 are unvested restricted shares.
(7)
Of these shares, 138,480 are issuable upon exercise of stock options (all of which are vested as of May 3, 2019 ) and 47,493 are unvested restricted shares.
(8)
Of these shares, 53,660 are issuable upon exercise of stock options (all of which are vested as of May 3, 2019 ) and 113,117 are unvested restricted shares.
(9)
Of these shares, 58,894 are unvested restricted shares.
(10)
Of these shares, 17,345 are unvested restricted shares.
(11)
Of these shares, 9,353 are unvested restricted shares.
(12)
Of these shares, 105,338 are unvested restricted shares.
(13)
Of these shares, 9,080 are unvested restricted shares.
(14)
Of these shares, 192,140 are issuable upon exercise of stock options (all of which are vested as of May 3, 2019 ), and 1,581,882 are unvested restricted shares.
Compensation Committee Interlocks and Insider Participation
 
The members of the Compensation Committee are Gerald R. Szczepanski (Chair), Thomas N. Kelly Jr., Kathy P. Vrabeck and Lizabeth Dunn, none of whom has ever been an employee of the Company. No member of the Compensation Committee had a relationship requiring disclosure in this Proxy Statement under Items 404 or 407 of SEC Regulation S-K.




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2019 Proxy Statement  | 23



PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
We believe that it is appropriate to solicit the views of our stockholders regarding the compensation of our named executive officers. Accordingly, and in accordance with SEC rules implemented under Section 14A of the Securities Exchange Act of 1934 (the "Exchange Act"), the Company seeks a non-binding advisory vote from our stockholders on the compensation of our Named Executive Officers as described in this Proxy Statement.
As discussed more fully in the “Compensation Discussion and Analysis” in this Proxy Statement, the Compensation Committee believes the Company’s named executive officers should be compensated commensurate with their success in maintaining a high level of performance necessary for the Company to produce ongoing and sustained value for our stockholders. The Company’s executive officer compensation program is based on the following guiding principles:
1.
Total compensation opportunities provided by the Company to its named executive officers should be competitive and allow the Company to attract and retain individuals whose skills are critical to the long-term success of the Company.
2.
The compensation offered by the Company 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.
3.
Compensation awards should be based on the fundamental principle of aligning the long-term interests of GameStop’s employees with those of GameStop’s 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 large portion of equity compensation for Named Executive Officers, are tied to performance measures.
4.
Incentive and total compensation are designed to be consistent with the level of the Company’s operational performance over time and the level of returns provided to stockholders.
In response to the advisory vote on the frequency of the advisory vote on executive compensation at our 2017 annual meeting, we provide this advisory vote on executive compensation on an annual basis. This is an advisory vote and is not binding upon the Company, the Compensation Committee or the Board. Therefore, stockholders are not ultimately voting for the approval or disapproval of the Board's recommendation on this proposal. The result of the vote will not impact any compensation that has already been paid or awarded to the executive officers. However, because we value the views of our stockholders, our Compensation Committee, which is responsible for, among other things, designing and administering the Company’s executive compensation program, will review and consider the results of this advisory vote when considering future decisions with respect to executive compensation.
We strongly encourage stockholders to read the “Compensation Discussion and Analysis,” the compensation tables and the accompanying narrative disclosures in this Proxy Statement which discuss in greater detail the compensation of our executive officers, the Company’s compensation philosophy and the factors that the Compensation Committee considered in making compensation decisions.
Accordingly, the Board recommends that stockholders vote FOR the following resolution:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2019 annual meeting of stockholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the 2018 Summary Compensation Table and the other related tables and disclosure.”
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF THE RESOLUTION ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS. PROXIES SOLICITED BY THIS PROXY STATEMENT WILL BE VOTED FOR THE PROPOSAL ABOVE UNLESS A VOTE AGAINST THE PROPOSAL OR AN ABSTENTION IS SPECIFICALLY INDICATED.


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Compensation Discussion and Analysis
Executive Summary
 
Introduction
The Compensation Committee believes that our senior executives should be compensated commensurate with their success in maintaining profitability and high level of performance necessary for GameStop to produce ongoing and sustained value for our stockholders. During the several years leading up to fiscal 2018, our vision was to grow sales by strategically expanding our former Technology Brands segment and continuing to invest in our collectibles product category. In fiscal 2018, we divested in Spring Mobile, which comprised the significant majority of our former Technology Brands segment, in order to focus on our core video games business including the continued expansion of our collectibles business. The Compensation Committee developed and recommended the fiscal 2018 compensation program to support this change in focus.
Changes in Senior Management During Fiscal 2018
On February 4, 2018, the Board appointed Michael K. Mauler to the position of Chief Executive Officer of the Company, succeeding Daniel A. DeMatteo, who assumed the position of Interim Chief Executive Officer on November 13, 2017. On February 7, 2018, Tony Bartel, former Chief Operating Officer, and Michael Hogan, former Executive Vice President, Strategic Business and Brand Development, ceased employment with the Company. Mr. Mauler resigned from employment with the Company on May 9, 2018. On May 31, 2018, the Board appointed Shane S. Kim as Interim Chief Executive Officer, succeeding Daniel A. DeMatteo, who had assumed the position of Interim Chief Executive Officer upon Mr. Mauler’s resignation. Mr. Kim has served on the Board since 2011. In addition, on May 31, 2018, the Board appointed Robert A. Lloyd, Chief Financial Officer, to the additional position of Chief Operating Officer. On March 21, 2019, the Board appointed George Sherman to the position of Chief Executive Officer, effective April 15, 2019, succeeding Mr. Kim. These changes to our senior management team underscored many of the Compensation Committee's actions during fiscal 2018 (as described in this Compensation Discussion and Analysis), specifically to achieve the goal of retaining key executives during this critical period of management transition.
Named Executive Officers
This Compensation Discussion and Analysis covers the fiscal 2018 compensation for the following Named Executive Officers ("NEOs"), as determined under SEC rules (titles below reflect executives' roles as of the end of fiscal 2018 ):
Name 
Title
Shane S. Kim
Interim Chief Executive Officer
Michael Mauler
Former Chief Executive Officer
Daniel A. DeMatteo
Executive Chairman and Former Interim Chief Executive Officer
Robert A. Lloyd
Chief Operating Officer and Chief Financial Officer
Daniel J. Kaufman
Executive Vice President, Chief Legal and Administrative Officer
Troy W. Crawford
Senior Vice President, Chief Accounting Officer
Tony D. Bartel
Former Chief Operating Officer
Michael P. Hogan
Former Executive Vice President of Strategic Business and Brand Development
Fiscal 2018 Company Performance
In fiscal 2018 , our total global sales from continuing operations decreased 3.1% to $8.3 billion and our consolidated comparable store sales decreased 0.3%. The decrease in sales was primarily driven by a decline in pre-owned video game sales and new software sales, as well as the impact of the 53 rd week in fiscal 2017. These declines were partially offset by a 22.0% increase in sales of accessories, driven by higher demand for controllers and headsets, and an 11.2% increase in sales of collectibles as a result of continued investment in this category. Our adjusted net income from continuing operations decreased by 22.9% to $218.4 million, primarily due to the decline in sales and a shift in product mix to lower margin categories. See Annex I for a reconciliation of net income to adjusted net income.
In January 2019, we completed the sale of our Spring Mobile business for cash proceeds of $727.9 million. Spring Mobile had comprised the significant majority of our former Technology Brands segment.
We paid quarterly dividends of $0.38 per share, or $1.52 annually, in fiscal 2018, which remained unchanged from dividends paid in fiscal 2017.


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2019 Proxy Statement  | 25


2018 Compensation Program Summary
In 2018 , the primary components of our NEOs’ total target compensation were various combinations of 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.

Provide competitive fixed compensation to attract and retain executive talent
Short-Term Incentive ("STI")
Cash compensation based on one of the following performance measures:
fiscal 2018 net income (1)
fiscal 2018 operating earnings from our U.S. Video Game Brands segment (2)
Reward for achievement against specific objective financial goals and strategic goals achieved in one year.

Foster pay-for-performance philosophy by aligning actual compensation with financial performance
Long-Term Incentive ("LTI")
Time-based restricted stock subject to vesting based on continued service
Reward for creation of stockholder value and to retain executives for the long-term.
Time-based cash subject to vesting based on continued service
Reward to retain executives for the long-term.
Performance-based restricted stock based on fiscal 2018 and 2019 cumulative consolidated operating earnings
Reward for achievement against specific objective financial goals achieved in greater than one year and creation of stockholder value.
__________________________________________
(1)    Each of the eligible NEOs, with the exception of Mr. Crawford, were granted STI based upon this performance measure.
(2)    Mr. Crawford was granted STI based upon this performance measure.
Messrs. DeMatteo and Lloyd's compensation included salary, STI, and LTI of which 50% was time-based restricted stock and 50% was performance-based restricted stock. Mr. Kaufman's compensation included salary, STI, and LTI of which 25% was time-based restricted stock, 25% was time-based cash award, and 50% was performance-based restricted stock. Mr. Crawford's compensation included salary, STI and LTI of which 50% was time-based restricted stock and 50% was time-based cash award.
In addition, on May 31, 2018, the Board approved a one-time, special cash retention program to encourage the retention of select key employees of the Company who serve in positions of critical financial, strategic, and/or operational importance. Messrs. Lloyd, Kaufman and Crawford received grants under the retention program and will become entitled to payment of 50% of their award amounts on each of May 31, 2019 and May 31, 2020, provided in each case they remain in service through that date. See "Retention Program" under "Key Elements of Compensation" for additional information. Unless otherwise noted, discussions in this proxy statement regarding total compensation or the allocation of total compensation among various elements exclude this retention program as it is intended to be a one-time incentive and not part of our regular, ongoing compensation program.
In connection with Mr. Kim's appointment as Interim Chief Executive Officer, effective May 31, 2018, Mr. Kim received a one-time grant of restricted stock with a fair market value of $1,500,000 on the date of grant. The restricted stock will vest on May 31, 2019, subject to Mr. Kim's continued service through such date, whether as an employee, director or other service provider.
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 performance measure 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.


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A significant portion of the compensation program for the named executive officers is performance-based, with payouts linked to the attainment of certain defined performance measures. For our CEO, George E. Sherman, who was appointed effective April 15, 2019, 54% of his total targeted compensation is tied to performance measures. For our other currently-employed NEOs, 48%, on average, of total targeted compensation for fiscal 2018 was tied to performance measures. The charts below summarize the mix of pay elements for Mr. Sherman, based on target compensation for fiscal 2019, and all other NEOs, based on target compensation for fiscal 2018:
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Incentive Plan Payouts for Performance Periods Ending Fiscal 2018
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 2018 , 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 2018
 
Fiscal 2018
 
Achieved 85.8% of the targeted fiscal 2018 consolidated net income (1)
71.0%
 
 
 
Achieved 96.0% of the targeted fiscal 2018 United States Video Game Brands segment operating earnings (2)
92.0%
LTI (performance-based restricted stock)
 
Fiscal 2017
 
Fiscal 2018
 
Achieved 67.3% of the targeted fiscal 2018 consolidated operating earnings (3)
0%
 
 
 
Achieved 70.2% of the targeted percentage of fiscal 2018 operating earnings from sources other than physical video game products (4)
0%
__________________________________________
(1)
Applies to all NEOs, except for Mr. Crawford, with payout tied to percentage of annual salary and percentage attainment of a target set by the Compensation Committee related to consolidated net income. See “Short-Term Incentives” section below for further detail.
(2)
Applies to only Mr. Crawford with payout tied to percentage of annual salary and percentage attainment of a target related to operating earnings from the United States Video Game Brands segment. See “Short-Term Incentives” section below for further detail.
(3)
Related to 50% of the 2017 performance-based restricted stock grant subject to a performance target tied to achieving a certain consolidated operating earnings target for fiscal 2018. See "Long-Term Incentives" section below for further detail.
(4)
Related to 50% of the 2017 performance-based restricted stock grant subject to a performance target tied to achieving a target operating earnings from sources other than physical video game products for fiscal 2018. See "Long-Term Incentives" section below for further detail.


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2019 Proxy Statement  | 27


Realizable Compensation
A significant portion of the NEO compensation program is performance-based and includes long-term incentives that are generally comprised of time-based restricted stock awards ("RSAs"), to reward for creation of stockholder value, and performance-based restricted stock awards ("PSAs") tied to Company objectives to reward for performance. The graph below presents the average target compensation compared to the average realizable compensation for fiscal years 2016 through 2018 for Dan A. DeMatteo and Rob A. Lloyd. Messrs DeMatteo and Lloyd are the only currently-employed NEOs of the Company in each of the fiscal years 2016 through 2018.

3-Year Average 2016-2018 NEO Pay - Target vs. Realizable
REALIZEDPAYCHARTV4.JPG
__________________________________________
(1)
Target pay includes base salary, target short-term incentive cash bonus, and restricted stock awards at their grant date fair value.
(2)
Realizable pay includes base salary, annual short-term incentive cash bonus payout, and stock awards valued at our closing stock price on the last trading day of fiscal 2018 of $11.24. Realizable pay excludes the target number of shares for the fiscal 2018 PSAs of 29,472 and 71,625 shares for Messrs. DeMatteo and Lloyd, respectively, as the Company currently estimates that the fiscal 2018 PSAs will not be earned. The performance period for the fiscal 2018 PSAs concludes at the end of fiscal 2019.
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.



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The compensation program is designed to reward the executive officers for performance as well as for the dedication of their time, efforts, skills and business experience to our operations. The Compensation Committee generally targets that 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 financial performance and growth, among other factors. Long-term performance is generally 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.
Response to Advisory Vote on Executive Compensation
 
A substantial majority of our stockholders (90% of votes cast) approved the fiscal 2017 compensation for our NEOs at the 2018 annual meeting of stockholders. We interpreted these results, coupled with discussions that we have had from time to time with investors regarding compensation, as a validation of our executive compensation program. As a result, we have retained our general approach to executive compensation as described more fully in the "Key Elements of Compensation" section below. Nonetheless, the Compensation Committee continues to work with its independent consultant to consider alternatives and may revise the program from time to time as it determines appropriate.
Compensation Determination Process
 
The Compensation Committee of the Board has the responsibility to develop compensation levels for the NEOs. In determining annual compensation levels for NEOs, the Compensation Committee, along with executive management, bases its decision on the individual’s performance and potential to improve stockholder value, the financial performance of the Company over the preceding fiscal year, projections for the Company's upcoming fiscal year, historical compensation for each NEO, the amount of shares available to be granted under our incentive plan and the results of reviews, surveys or other information from our compensation consultants.
The Compensation Committee considers the recommendations of the Executive Chairman and the Chief Executive Officer in determining compensation for the executive officers and employees other than the Executive Chairman and the Chief Executive Officer.
The Compensation Committee has the authority under its charter to retain an independent compensation consultant to assist in the evaluation of executive compensation, whose research and viewpoints provide one of several data points used by the Compensation Committee in developing specific recommendations for the Board. The Compensation Committee believes that such a consultant can play an essential role in the process of providing an impartial evaluation of compensation programs and practices, developing effective recommendations for the Board and evaluating the Company’s pay practices.
The Compensation Committee retains ClearBridge Compensation Group (“ClearBridge”) to advise on matters related to non-employee director and executive compensation. ClearBridge reports directly to the Compensation Committee and does not provide any other services to the Company. The Compensation Committee reviewed the independence of ClearBridge under SEC rules and NYSE listing standards regarding compensation consultants and has concluded that ClearBridge’s work for the Compensation Committee is independent and does not raise any conflicts of interest.
ClearBridge gathers benchmark data from our peer group, which the Compensation Committee considers among other factors ( e.g. , individual performance and potential, job responsibilities, historical compensation levels, etc.) in assessing and determining total compensation opportunities for the NEOs. Our selected peer group is generally comprised of specialty retailers, selected based on companies with revenue in the range of 0.5x and 2x the Company's revenue, with an additional reference to enterprise value. The specific companies included in our fiscal 2018 peer group are listed below (this group was unchanged from fiscal 2017):
Abercrombie & Fitch
Bed Bath & Beyond
Kohl's
O'Reilly Automotive
Advance Auto Parts
Dick's Sporting Goods
L Brands
Ross Stores
AutoZone
Foot Locker
Nordstrom
Tiffany & Co.
Barnes & Noble
Gap
Office Depot
Williams-Sonoma


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2019 Proxy Statement  | 29


Key Elements of Compensation
 
The Company maintains employment agreements with each of the NEOs to cover the key elements of the Company’s executive compensation package, which consists of base salary and short-term and long-term incentive awards, and covers severance and termination benefits. These employment agreements and the Company’s policies with respect to each of the key elements of its executive compensation package are discussed below. In addition, while the elements of compensation described below are considered separately, the Compensation Committee also considers and reviews the full compensation package afforded by the Company to its executive officers, including insurance and other benefits. See below for details on the Company's 2018 compensation program.
Base Salaries
In determining the base salaries of these executive officers for fiscal 2018 , the Compensation Committee considered, among other things, the Company’s financial performance and achievements during fiscal 2017 , projections for fiscal 2018 , the additional responsibilities of each NEO given the organizational changes in fiscal 2018, the results of the benchmarking against the peer group, and the recommendations received from ClearBridge following its research. The base salary is intended to be competitive with base salaries paid to executive officers with comparable qualifications, experience and responsibilities at other companies of comparable size, growth and operations.
The base salaries for the NEOs in fiscal 2018 were as follows:
 
 
Fiscal 2018 Base Salary
Named Executive Officer
 
Initial
 
Adjusted
Shane S. Kim
 
$
1,500,000

 
n/a
Daniel A. DeMatteo (1)
 
$
400,000

 
$
500,000

Robert A. Lloyd
 
$
709,000

 
$
900,000

Daniel J. Kaufman
 
$
600,000

 
$
750,000

Troy W. Crawford
 
$
416,000

 
$
500,000

______________________________
(1)
Mr. DeMatteo served as the Company's Interim Chief Executive Officer from November 13, 2017 to February 4, 2018, for which his base salary was temporarily set to $900,000 from November 13, 2017 to March 1, 2018. Mr. DeMatteo's base salary was reset to $400,000 at March 1, 2018.
In February 2018 , the Board set the initial salaries for the NEOs. Mr. DeMatteo's initial base salary for fiscal 2018 was increased by $100,000 compared to fiscal 2017 in recognition of the importance of the continued engagement and expected increase in the time commitment of Mr. DeMatteo to Company matters in his role as Executive Chairman. Mr. Lloyd's initial base salary for fiscal 2018 was unchanged compared to fiscal 2017. Mr. Kim was appointed to the role of Interim Chief Executive Officer in May 2018, with a base salary, at an annualized rate, of $1,500,000 that was unchanged during fiscal 2018. In light of changes to the Company's senior executive ranks during the first several months of fiscal 2018, the Board implemented additional compensation changes effective May 31, 2018, including adjustments to base salaries, with the goal of retaining key executives and avoiding the disruption that would be caused by further changes in the Company's senior executive ranks (see "Changes in Senior Management During Fiscal 2018" under "Executive Summary" of this Compensation Discussion and Analysis for further information). In addition, effective May 31, 2018, the Board appointed Mr. Lloyd, Chief Financial Officer, to the additional position of Chief Operating Officer.
Short-Term Incentives
In addition to a base salary, each NEO, with the exception of Mr. Kim, is eligible for a performance-based annual cash STI. The purpose of the STI is to motivate management to drive performance in the short-term. A STI opportunity was not included in Mr. Kim's compensation for his service as Interim Chief Executive Officer.
STI payouts for fiscal 2018 were determined based on the achievement of a consolidated net income target for each of the NEOs excluding Mr. Crawford. This metric was selected by the Compensation Committee in order to focus the NEOs on total company results, rather than encouraging the NEOs to focus on certain business units within the Company. Mr. Crawford's STI payout for fiscal 2018 was determined based on the achievement of an operating earnings target for our U.S. Video Game Brands segment.
Targets for Each Named Executive Officer
For each NEO, a target STI in an amount equal to a percentage of their base salary is pre-determined by the Compensation Committee, with input from the Executive Chairman and Chief Executive Officer (other than for themselves), for each fiscal year.


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Target STI opportunities for fiscal 2018 for our NEOs were as follows (which remain unchanged from fiscal 2017 , with the exception of Mr. Lloyd whose target STI increased from 100% in fiscal 2017 to 125% in fiscal 2018):
Named Executive Officer
 
Percentage of
Base Salary
Shane S. Kim
 
n/a (1)
Daniel A. DeMatteo
 
150%
Robert A. Lloyd
 
125%
Daniel J. Kaufman
 
100%
Troy W. Crawford
 
75%
______________________________
(1)
A STI opportunity was not included in Mr. Kim's compensation for his service as Interim Chief Executive Officer.
Performance Measures
The final STI payouts for each of the NEOs eligible for STI were determined based on the scale below. Straight-line interpolation is applied between levels shown.
If the Performance Period Results are:
 
Then the Percentage of the
Target Award Earned for Each Measure is:
125% or more of Target
 
125%
110%
 
110%
100% (Target)
 
100% (Target)
90%
 
80%
75%
 
50%
Less than 75% of Target
 
None
Payouts
In determining the final STI payout for fiscal 2018 for each of the eligible NEOs, the Compensation Committee assessed the achievement of the targets, as shown below.
Performance Measure
 
Target
 
Actual
 
Performance Achieved as a % of Target
 
STI Earned
 
Weighting Percentage of Overall STI
 
Payout as a % of Target
Consolidated net income
(fiscal 2018) (1)
 
$333 million
 
$286 million
 
85.8%
 
71%
 
100%
 
71%
U.S. Video Game Brands segment operating earnings (fiscal 2018) (2)
 
$310 million
 
$298 million
 
96.0%
 
92%
 
100%
 
92%
______________________________
(1)    The consolidated net income target was utilized for each of the eligible NEOs, with the exception of Mr. Crawford.
(2)    The operating earnings target for our U.S. Video Game Brands was utilized for Mr. Crawford.
The following STI payouts were made for fiscal 2018 to our NEOs:
Named Executive Officer
 
STI Payout
Shane S. Kim (1)
 
n/a

Daniel A. DeMatteo (2)
 
$
497,000

Robert A. Lloyd (2)
 
$
742,246

Daniel J. Kaufman (2)
 
$
497,000

Troy W. Crawford (2)
 
$
345,000

______________________________
(1)
A STI opportunity was not included in Mr. Kim's compensation for his service as Interim Chief Executive Officer.
(2)
The base salaries for each NEO were adjusted during fiscal 2018 (see "Base Salaries" above). STI Payout amounts were based on the weighted-average base salary for each NEO during fiscal 2018, with the exception of Mr. Crawford as his STI Payout amount was based upon his year-end base salary.


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2019 Proxy Statement  | 31


Long-Term Incentive Awards
Form of Fiscal 2018 Long-Term Incentive Awards
The Compensation Committee determines the amount of equity and cash awards to grant to each NEO. The Compensation Committee considered, among other things, the Company’s overall performance, projections for the Company's upcoming fiscal years, each NEO’s individual contributions to the Company’s overall performance, including individual contributions toward achievement of strategic objectives, and comparisons of long-term incentives and total compensation of similar positions within the Company’s peer group.
The Compensation Committee awarded the NEOs restricted stock and cash in fiscal 2018 , the " 2018 LTI Awards," as follows:
Named Executive Officer
Time-Based
Restricted Stock
Grant
Performance-
Based Restricted
Stock Grant
Total Shares of
Restricted
Stock
Awarded
Time-Based Cash
Total Targeted
Award Value
Shane S. Kim
105,338

 

 
105,338

 
$

 
$
1,500,000

 
Daniel A. DeMatteo
29,472

 
29,472

 
58,944

 
$

 
$
920,000

 
Robert A. Lloyd
71,625

 
71,625

 
143,250

 
$

 
$
2,220,000

 
Daniel J. Kaufman
23,490

 
46,980

 
70,470

 
$
375,000

 
$
1,500,000

 
Troy W. Crawford
23,490

 

 
23,490

 
$
375,000

 
$
750,000

 
In connection with Mr. Kim's appointment as Interim Chief Executive Officer, effective May 31, 2018, Mr. Kim received a one-time grant of restricted stock that will vest on May 31, 2019, subject to Mr. Kim's continued service through such date, whether as an employee, director or other service provider.
Messrs. DeMatteo and Lloyd were granted LTI awards on February 23, 2018, with initial targeted values of $750,000 and $1,680,000, respectively. Their LTI awards consisted of 50% time-based restricted stock and 50% performance-based restricted stock. Effective May 31, 2018, the Board increased the annual equity award targeted values for Messrs. DeMatteo and Lloyd to $1,000,000 and $2,475,000, respectively, in the form of 50% time-based restricted stock and 50% performance-based restricted stock. The increase for Mr. DeMatteo was in recognition of the importance of the continued engagement and expected increase in the time commitment of Mr. DeMatteo to Company matters in his role as Executive Chairman. The increase for Mr. Lloyd was in connection with his appointment to the additional position of Chief Operating Officer. The additional restricted stock awards were granted to Messrs. DeMatteo and Lloyd pro-rated for the period following the effective date of May 31, 2018 through the end of fiscal 2018. These awards are subject to the same vesting criteria and other terms of the annual long-term incentive awards granted on February 23, 2018, except that these additional awards are not subject to accelerated vesting under the Company's Retirement Policy.
Mr. Kaufman was granted LTI awards on February 23, 2018, which were comprised of 50% in performance-based restricted stock, 25% in time-based restricted stock and 25% in time-based cash. Mr. Crawford was granted LTI awards on February 23, 2018, which were comprised of 50% in time-based restricted stock and 50% in time-based cash.
Time-based restricted stock and cash 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).
Performance-based restricted stock awards are subject to vesting both on the basis of continued service to the Company and the achievement of a consolidated cumulative operating earnings Target for the fiscal years ended February 2, 2019 ("fiscal 2018") and February 1, 2020 ("fiscal 2019"), with the Target to be measured following the completion of fiscal 2019. Operating earnings was selected as a measure to focus on the long-term profitability of the Company. 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 granted performance-based awards 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


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The service requirements otherwise applicable to these awards are waived in certain scenarios; see "Other Considerations—Retirement Policy" and "Employment Agreements and Severance/Change in Control Benefits" elsewhere in this Proxy Statement.
Achievement of Fiscal 2017 Long-Term Incentive Awards
A portion of the fiscal 2017 restricted stock awards were subject to performance against pre-determined fiscal 2018 consolidated operating earnings Targets. These 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 (other than for those who are retirement eligible). These performance-based restricted stock awards were subject to the performance scale shown below.
If the Performance Period Results are:
 
Then the Percentage of the
Target Award Earned for Each Measure 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 Company's actual performance against the relevant targets was as follows:
Portion of
2017 LTI Grant
Performance Measure
 
Target
 
Performance Achieved as a Percentage of Target
 
Performance-Based Restricted Stock Earned
50%
Fiscal 2018 consolidated operating earnings
 
$625 million
 
67.3%
 
0%
50%
Fiscal 2018 consolidated operating earnings from sources other than physical video game products
 
$355 million
 
70.2%
 
0%
Based on the actual results, no performance-based restricted stock was earned by the NEOs with respect to their 2017 LTI awards.
Retention Program
On May 31, 2018, the Board approved a one-time, special cash retention program to encourage the retention of select key employees of the Company who serve in positions of critical financial, strategic, and/or operational importance. Messrs. Lloyd, Kaufman and Crawford participate in the retention program. They will each become entitled to payment of 50% of their award amounts on each of May 31, 2019 and May 31, 2020, provided in each case they remain in service through that date. These awards would vest and be paid on an accelerated basis in the event of a termination without cause or resignation with good reason (in each case, as defined in the applicable Executive Employment Agreement) prior to the otherwise applicable payment date, provided the executive executes a release. Messrs. Lloyd, Kaufman and Crawford were granted retention awards as follows:
Named Executive Officer
 
Retention Award Amount
Robert A. Lloyd
 
$
2,000,000

Daniel J. Kaufman
 
$
2,000,000

Troy W. Crawford
 
$
1,000,000

2019 Compensation Program
Provided below is a summary of key compensation decisions made in fiscal 2019 .
Fiscal 2019 Salaries and STI Opportunities
In setting the base salaries of the executive officers for fiscal 2019 , the Compensation Committee considered, among other things, the Company’s financial performance and achievements during fiscal 2018 , projections for fiscal 2019 and the responsibilities of our executive officers, the results of the benchmarking against the peer group, and the recommendations received from ClearBridge following its research.


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2019 Proxy Statement  | 33


Base salaries and Target STI percentages for our NEOs, for fiscal 2019 , are unchanged from the base salaries and target STI percentages in effect at the end of fiscal 2018, with the exceptions of Mr. Sherman who was appointed Chief Executive Officer effective April 2019, and Mr. Crawford, whose base salary was increased 3.5%. Base salaries and Target STI payouts for fiscal 2019 are as follows:
Name
Title
Base Salary
Target STI Percentage of
Base Salary
Daniel A. DeMatteo
Executive Chairman
$
500,000

 
150%
George E. Sherman
Chief Executive Officer
$
1,100,000

 
150%
Robert A. Lloyd
Chief Financial Officer and Chief Operating Officer
$
900,000

 
125%
Daniel J. Kaufman
Executive Vice President, Chief Transformation Officer
$
750,000

 
100%
Troy W. Crawford
Senior Vice President, Chief Accounting Officer
$
517,500

 
75%
2019 Long-Term Incentive Grants
In March 2019, the Board appointed Mr. Sherman as Chief Executive Officer, effective April 15, 2019. In connection with his appointment as Chief Executive Officer, Mr. Sherman was granted a “make whole” equity award with a grant date value (at the target-level of performance) of $6,000,000 and a 2019 annual equity award with a grant date value (at the target-level of performance) of $4,500,000. Each of these awards consist of 50% time-vested restricted stock and 50% performance-based restricted stock. Based on the Company’s closing stock price on April 15, 2019, Mr. Sherman was granted 587,249 shares of time-based restricted stock and 587,248 shares of performance-based restricted stock. The 587,248 shares of performance-based restricted stock represent the number of shares that would be earned at target levels of achievement (the “Target Shares”) based on certain performance targets to be determined later in fiscal 2019. The actual number of shares that may be earned in respect to the performance-based portion of the awards will vary between 0 to 200% of the Target Shares, depending on actual performance, with any above-target shares being issued at the time that performance is determined.
Mr. Sherman’s long-term incentive award grants were made outside of GameStop’s Amended and Restated 2011 Incentive Plan, but have terms generally consistent with the relevant terms of that plan. The time-based portion of the awards will vest in three equal annual installments, on the first, second and third anniversaries of April 15, 2019 (the “Grant Date”), subject to Mr. Sherman’s continuous service with  the Company  through the applicable vesting date. The performance goals applicable to the performance-based portion of the awards have not yet been determined. Those goals will be established at the same time as, and will be substantially the same as, the performance goals that will be applicable to 2019 long-term incentive awards issued to the other NEOs. To the extent earned, the performance-based shares will vest on the third anniversary of the Grant Date, subject to Mr. Sherman’s continuous service with  the Company  through that date. In each case, the awards are subject to accelerated vesting upon certain termination events set forth in Mr. Sherman’s Employment Agreement.
In May 2019, the Compensation Committee approved, upon ratification of the Board, a combination of time-based restricted stock, time-based cash awards and performance-based restricted stock for fiscal 2019 (collectively, the "2019 LTI Awards"). The 2019 LTI Awards are again comprised of 50% time-based restricted stock and 50% performance-based restricted stock, except for Troy W. Crawford whose 2019 LTI Awards are comprised of 50% time-based restricted stock and 50% time-based cash. Time-based restricted stock awards and time-based cash awards are subject to a three-year ratable vesting schedule. Performance-based restricted stock awards are subject to vesting both on the basis of continued service to the Company and the achievement of certain performance targets to be determined later in fiscal 2019. The fiscal 2019 awards are subject to accelerated vesting in certain severance and retirement scenarios. The Compensation Committee approved the following 2019 LTI Awards:
Named Executive Officer
Time-Based
Restricted Stock
Grant
Performance-
Based Restricted
Stock Grant
Total Shares of
Restricted
Stock
Awarded
Time-Based Cash
Total Targeted
Award Value
Daniel A. DeMatteo
56,760

 
56,760

 
113,520

 
$

 
$
1,000,000

 
Robert A. Lloyd
140,490

 
140,490

 
280,980

 
$

 
$
2,475,000

 
Daniel J. Kaufman
85,140

 
85,140

 
170,280

 
$

 
$
1,500,000

 
Troy W. Crawford
28,950

 

 
28,950

 
$
255,000

 
$
510,000

 

On May 8, 2019, the Company and Mr. Kaufman agreed that he would step down from the roles of Chief Legal and Administrative Officer and Corporate Secretary and assume the role of Chief Transformation Officer ("CTO"), effective May 10, 2019. In connection with these changes in his role, the Company and Mr. Kaufman entered into an amendment to his Employment Agreement on May 8, 2019 reflecting his new title and the following additional changes: (i) upon a severance event or disability termination, performance-based equity awarded during or after 2019 would remain outstanding and vest, if at all, based on actual performance through the end of the applicable performance period (rather than vesting at target, as the existing agreement previously provided and continues to provide with respect to pre-2019 performance-based equity awards); (ii) upon a severance event during the 2020 fiscal year, in addition to his other severance rights, Mr. Kaufman would be eligible to receive a pro-rata annual bonus for the year of termination, based on actual performance in that year; and (iii) any severance benefits payable to Mr. Kaufman will be conditioned on his execution of a release of claims.


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The CTO position is a challenging role that will be crucial to our successful transformation. Given his executive skills, experience and deep familiarity with our organization, we concluded that Mr. Kaufman is uniquely qualified to fill this role and lead our transformation process. The CTO role will require Mr. Kaufman’s full time and attention and, therefore, he was asked to step down from his former roles of Chief Legal and Administrative Officer and Corporate Secretary, and his former duties were reassigned to other employees. However, the CTO position is a not a permanent role within our organization. Upon conclusion of the transformation process, it is not expected that Mr. Kaufman will have the opportunity to resume his former duties or be offered another senior executive position with us. Therefore, in consideration for Mr. Kaufman’s agreement to accept the CTO position and waive his right to resign now with Good Reason as a result of the reassignment of his former duties, the Company has agreed that, if Mr. Kaufman remains in service with the Company through June 1, 2020 (the expected end date for the CTO position), a resignation from employment by Mr. Kaufman during June 2020 will be treated as a resignation with Good Reason. Upon a Good Reason resignation, Mr. Kaufman would be entitled to the severance benefits contemplated by his Employment Agreement, as amended.
Employment Agreements and Severance/Change in Control Benefits
 
The Company has entered into employment agreements with each of the NEOs (“Employment Agreements”). The term of each of the Employment Agreements is “at will” and may be terminated by the Company or executive at any time, and each executive is restricted from competing with the Company for two years after termination of employment regardless of the reason for the termination.
Under the terms of the Employment Agreements, each executive shall be entitled to all benefits afforded to management personnel or as determined by the Board, including, but not limited to, insurance programs, vacation, sick leave and 401(k) benefits.
Upon an executive’s termination of employment without cause or by the executive with good reason, the executive, subject to an effective release, would receive an amount equal to two times (A) the executive’s base salary plus (B) the executive’s target bonus. Such amount would be paid in a lump sum. If such termination occurred within 18 months following a change in control (as defined in the Employment Agreements) the “two” would be replaced by two and one-half (three in the case of the Executive Chairman and the Chief Executive Officer). The executive would also receive continuation of medical benefits for up to 18 months. Additionally, any time-based equity grants made to the executive would become fully vested. Any performance-based equity grants made to the executive will remain outstanding and will vest, if at all, based on actual performance through the end of the applicable performance period, with the exception of pre-2019 performance-based awards granted to Mr. Kaufman, which would vest at the target level.
If the executive’s employment with the Company is terminated due to death or disability, then the same treatment with respect to equity would apply; provided that if the executive’s employment terminates due to death, all performance-based equity grants will vest and be paid at the target level. Any options held by the executive will generally remain outstanding until the earlier of the original stated expiration date of the option, one year from the date of termination or any accelerated expiration date of the options provided under the applicable incentive plan, as amended, including upon a change of control, with the exception of Mr. Kaufman whose options would not be extended.
The triggering events which would result in the payment of the severance amounts described above were selected because they provide employees with a guaranteed level of financial protection upon loss of employment and are considered competitive with severance provisions being offered currently in the market. The estimated payments upon a hypothetical termination for each of the NEOs as of the end of fiscal 2018 (and the actual payments, in the case of Messrs. Bartel, Hogan and Mauler are detailed in "Employment Agreements and Potential Payments upon Termination or Change in Control" below.
Other Considerations
 
Stock Ownership
The Company has adopted a stock ownership policy which requires its NEOs and non-employee directors to be stockholders in the Company. The Compensation Committee believes that ownership of stock of the Company that is material to the income of the individuals involved is sufficient to provide the required incentive to such officers and non-employee directors and align their interests with the interests of the Company’s stockholders. For a description of the stock ownership policy, see “Corporate Governance Equity Ownership Policy” above.
Claw-back of Awards
The Company has adopted a formal claw-back policy to recover past compensation awards from executive officers in the event of fraud or a restatement. For a description of the claw-back policy, see “Corporate Governance Claw-back Policy” above. The Company has not historically had any restatements or adjustments of this nature.


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2019 Proxy Statement  | 35


Anti-Hedging
The Company has adopted a formal anti-hedging policy prohibiting its employees and non-employee directors from entering into any form of hedging strategies or transactions using short sales, puts, calls or other types of financial instruments to protect against a loss in value of common stock. For a description of the anti-hedging policy, see “Corporate Governance Anti-Hedging Policy” above.
Retirement Policy
The Company maintains a retirement policy for its employees (including NEOs) which provides for accelerated vesting of annual incentive awards under certain circumstances (the “Retirement Policy”). Employees who attain a minimum age of 55, complete a minimum period of service with the Company and its affiliates of 10 years and whose age plus years of service equal or exceed 70 are considered “retirement eligible” under the Retirement Policy. The purpose of the Retirement Policy is to encourage and reward loyalty and long service. The Retirement Policy is administered by the Compensation Committee and will generally not apply to the stock awards of any employee whose employment is terminated “for cause.”
To be subject to the Retirement Policy, an award held by a retirement eligible grantee must be outstanding for six months. Once an award is subject to the Retirement Policy, any otherwise applicable service-based risk of forfeiture is waived, although shares subject to the award will generally remain non-transferable until the earlier of retirement or the otherwise applicable vesting date. Performance-based awards remain outstanding and subject to the applicable performance conditions following retirement, and were previously subject to proration to reflect the portion of the performance period actually worked by the grantee. The Retirement Policy was amended to remove the proration feature in February 2018. The exercise period for stock options is generally extended until the first anniversary of retirement. By virtue of their age and service to the Company, Messrs. DeMatteo, Lloyd and Kaufman are each “retirement eligible” under the Retirement Policy.
Retirement Benefits
Each of the Company’s executive officers is entitled to participate in the Company’s defined contribution 401(k) plan on the same basis as all other eligible employees. The Company matches the contributions of participants, subject to certain criteria. Under the terms of the 401(k) plan, as prescribed by the Internal Revenue Service (“IRS”), the contribution of any participating employee is limited to a maximum percentage of annual pay or a maximum dollar amount ($18,500 pre-tax and $6,000 catch-up for 2018 ). Our executive officers are subject to these limitations and therefore the Company does not consider its retirement benefits to be a material portion of the compensation program for our executive officers.
Life Insurance
We maintain an executive life insurance plan for our key executives which became effective in 2012. As part of this plan, we pay recoverable premiums on split-dollar life insurance policies that provide a death benefit to beneficiaries designated by each participating executive. The portion of the death benefit payable to the executive’s beneficiary is equal to two times the base salary that was in effect at the time the executive first commenced participation in the plan. Participating executives become vested under the plan upon the first of (i) the executive’s tenth anniversary of continuous participation in the plan, (ii) the executive’s attainment of age 65, or (iii) the executive’s death. If a vested executive terminates employment with the Company prior to attaining age 65, the executive may then elect to receive from the Company an assignment of their policy. If a vested executive terminates employment from the Company after attaining age 65 but prior to participating in the plan for 10 years, the Company will continue to pay premiums on their policy through the tenth anniversary of the executive’s commencement of participation in the plan and the executive may then elect to receive an assignment of the policy. In either case, if the executive assumes the policy, the Company will first withdraw from the policy its full cash value.
Dividends
Under the terms of the 2011 Incentive Plan and related award agreements, dividends on unvested shares are accrued and will only be paid upon vesting of the underlying shares. Accordingly, our NEOs received dividends on the shares subject to their restricted stock award once those awards became vested in fiscal 2018. If above-target performance results in a NEO earning an above-target number of shares from performance-based awards, the NEO will also receive a dividend equivalent credit equal to the dividends that would have been paid on the additional earned shares had those shares been issued on the original grant date of the performance-based award. Those dividend equivalent credits will be paid only if and when the underlying shares vest (generally, upon satisfaction of time-based service criteria following the end of the applicable performance period or in the event of accelerated vesting due to death, disability or retirement eligibility).
Benefits and Perquisites
The Company maintains traditional health and welfare benefit plans and a qualified 401(k) plan, which are generally offered to all employees (subject to basic plan eligibility requirements) and are consistent with the types of benefits offered by other similar corporations. In addition to these traditional benefits, the Company offered in fiscal 2018 certain executive level perquisites to key executives, including all NEOs, which are designed to be competitive with the compensation practices of similar corporations, including life insurance and disability insurance commensurate with executive salaries, third-party financial planning services and annual physical examinations. Messrs. Mauler, Lloyd, Kaufman, Crawford, Bartel, and Hogan utilized the third-party financial planning services in fiscal 2018 .


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The NEOs are eligible to use the Company plane for personal use. However, only Mr. DeMatteo used the plane for personal use in fiscal 2018. We value the benefit of personal use of the plane based on the incremental costs to operate the plane, which is calculated based on the portion of the total variable operating costs for the fiscal year that was incurred as a result of personal use of the aircraft. These variable operating costs were provided by the third party retained to pilot and maintain the Company plane and include the following:
fuel;
crew expenses;
ground services;
aircraft telecommunication;
catering & aircraft supplies;
aircraft parts & supplies;
maintenance labor & expenses;
aircraft cleaning;
international fees; and
navigation and weather services.
The variable operating costs are divided by the total nautical miles flown by the Company plane during the year to arrive at a variable cost per nautical mile. This cost per nautical mile is then multiplied by the number of nautical miles incurred for personal use to arrive at the aggregate incremental cost attributable to the NEO. Additionally, while it happens rarely, if an aircraft flies empty before picking up or after dropping off a passenger flying for personal reasons, this "deadhead" segment would be included in the calculation of aggregate incremental cost.
The Company provides reimbursements to the NEOs to cover the additional income taxes associated with their company-paid life and disability insurance premiums and company provided financial planning assistance and annual physical examinations.
Compensation Committee Report on Executive Compensation
 
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with members of the Company’s management. Based on such review and discussions and relying thereon, we have recommended to the Board that the Compensation Discussion and Analysis set forth above be included in the Company’s 2018 Annual Report on Form 10-K and in this Proxy Statement.
Compensation Committee
Gerald R. Szczepanski, Chair
Thomas N. Kelly Jr.
Kathy P. Vrabeck
Lizabeth Dunn



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2019 Proxy Statement  | 37


Summary Compensation Table
The following table (the “Summary Compensation Table”) sets forth the compensation earned during the fiscal years indicated by our NEOs. The titles shown in the following table reflect the executives' roles as of the last day of fiscal 2018.
Name and Principal Position
Year
(6)
 
Salary
(7)
 
Bonus
(8)
 
Stock
Awards
(9)
 
Non-Equity
Incentive Plan
Compensation
(10)
 
All Other
Compensation
(11)
 
Total
Shane S. Kim (1)
2018
 
$
1,021,795

 
$
25,000

 
$
1,500,013

 
$

 
$
33,165

 
$
2,579,973

Interim Chief Executive Officer
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 

Michael Mauler (2)
2018
 
284,308

 

 
3,500,305

 

 
36,598

 
3,821,211

Former Chief Executive Officer
2017
 
592,000

 

 
1,081,478

 
266,400

 
91,669

 
2,031,547

2016
 
590,615

 

 
1,081,116

 
438,080

 
54,780

 
2,164,591

Daniel A. DeMatteo (3)
2018
 
502,692

 

 
920,638

 
497,000

 
103,629

 
2,023,959

Executive Chairman and
Former Interim Chief Executive Officer
2017
 
440,385

 

 
750,816

 
338,409

 
100,327

 
1,629,937

2016
 
550,000

 

 
1,200,222

 
610,500

 
75,634

 
2,436,356

Robert A. Lloyd
2018
 
831,681

 

 
2,221,893

 
742,246

 
82,793

 
3,878,613

Chief Operating Officer and Chief Financial Officer

2017
 
709,000

 

 
1,512,250

 
319,050

 
92,471

 
2,632,771

2016
 
707,385

 

 
1,513,562

 
524,660

 
70,541

 
2,816,148

Daniel J. Kaufman (4)
2018
 
693,671

 
375,000

 
1,125,406

 
497,000

 
72,471

 
2,763,548

Executive Vice President, Chief Legal and Administrative Officer
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 

Troy W. Crawford (4)
2018
 
467,492

 
255,000

 
375,135

 
345,000

 
52,783

 
1,495,410

Senior Vice President, Chief Accounting Officer

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tony D. Bartel (5)
2018
 
46,350

 

 

 

 
4,241,066

 
4,287,416

Former Chief Operating Officer
2017
 
927,000

 

 
2,161,440

 
521,438

 
75,291

 
3,685,169

2016
 
924,923

 

 
2,160,400

 
857,475

 
52,029

 
3,994,827

Michael P. Hogan (5)
2018
 
31,000

 

 

 

 
2,535,152

 
2,566,152

Former Executive Vice President, Strategic Business and Brand Development
2017
 
620,000

 

 
1,081,478

 
279,000

 
73,701

 
2,054,179

2016
 
613,923

 

 
1,081,116

 
458,800

 
62,539

 
2,216,378

  ____________________________
(1)
Mr. Kim served as the Company's Interim Chief Executive Officer from May 31, 2018 to April 15, 2019. Mr. Kim was not employed by the Company prior to May 31, 2018 and has served as a director since 2011. The salary amount presented for Mr. Kim includes $58,333 representing his cash retainer earned as a non-employee director from the beginning of fiscal 2018 through May 31, 2018.
(2)
Mr. Mauler served as our Chief Executive Officer from February 4, 2018 to May 9, 2018 and resigned from employment with the Company on May 9, 2018. Mr. Mauler forfeited the stock awards granted in fiscal 2018.
(3)
Mr. DeMatteo served as the Company's Interim Chief Executive Officer from November 13, 2017 to February 4, 2018, for which his base salary was temporarily set to $900,000 from November 13, 2017 to March 1, 2018. His base salary was reset to $400,000 at March 1, 2018. Mr. DeMatteo again assumed the interim Chief Executive Officer role from May 9, 2018 to May 31, 2018 and received a base salary increase to $500,000, effective May 31, 2018. Throughout these periods, Mr. DeMatteo has continued to serve as Executive Chairman.
(4)
Messrs. Kaufman and Crawford each became one of the three other most highly compensated executive officers in fiscal 2018. As such, compensation for fiscal years 2017 and 2016 is not listed.
(5)
On February 7, 2018, Messrs. Bartel and Hogan ceased employment with the Company.
(6)
Reflects fiscal 2018 , 2017 and 2016 .
(7)
Reflects salary paid for fiscal 2018 , 2017 and 2016 .
(8)
Reflects cash bonuses paid during fiscal 2018. Mr. Kim's bonus was in connection with his relocation to Grapevine, Texas to serve as Interim Chief Executive Officer. Mr. Kaufman's bonus relates to the time-based cash award which was granted along with the fiscal 2018 grants of restricted stock awards, the vesting of which was accelerated under our Retirement Policy. Mr. Crawford's bonus relates to one tranche of each of fiscals 2015, 2016, and 2017 cash awards granted along with the restricted stock awards for each respective year. Each recipient of a cash award received the right to an amount of cash consideration that was fixed on the award date and vests ratably over a three-year service period, subject to accelerated vesting upon attainment of retirement eligibility and other terms.


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(9)
Reflects the grant date fair value for the designated fiscal years for the restricted stock awards in accordance with ASC 718 based on the common stock price on the date of grant. The assumptions used by the Company in calculating the grant date fair value are incorporated herein by reference to Note 13 to the Company’s consolidated financial statements in its Annual Report on Form 10-K, filed April 2, 2019. For the fiscal 2018 LTI awards, for Messrs. DeMatteo and Lloyd, 50% of the stock awards include performance-based restricted shares and for Mr. Kaufman, 67% of the stock awards include performance-based restricted shares. If these performance-based awards are earned at the maximum of 200% of the target award, then the grant date fair market value of the performance-based shares would be as follows: Mr. DeMatteo - $920,638; Mr. Lloyd - $2,221,893; and Mr. Kaufman - $1,500,541. Mr. Crawford's fiscal 2018 LTI award does not include any performance-based restricted shares. Mr. Mauler forfeited his 2018 stock awards upon his separation from the Company effective on May 9, 2018.
(10)
Reflects incentive-based bonuses earned in each fiscal year.
(11)
The amounts reported in the "All Other Compensation" column represent the sum of (a) the aggregate incremental cost to the Company of all perquisites and other personal benefits, including the personal use of the Company plane, premiums on life insurance and long-term disability insurance, third party financial planning services and annual physical examinations; (b) the amounts contributed by the Company to our 401(k) retirement savings plan and medical expense reimbursement plan; and (c) post-employment payments made in connection with terminations. See details of these amounts for fiscal 2018 in the "All Other Compensation" table below.
All Other Compensation
The following table provides information regarding the amounts reported in the "All Other Compensation" column of the Summary Compensation Table above for fiscal 2018 :
Name
 
Personal Use of Company Plane (1)
 
401(k)
Matching
Contributions
 
Life Insurance (2)
 
Long-term Disability (2)
 
Financial Services (2)
 
Medical Reimbursement (3)
 
Severance Payments (4)
 
Total
($)
Shane S. Kim
 
$

 
$

 
$
96

 
$
23,975

 
$

 
$
9,094

 
$

 
$
33,165

Michael Mauler
 

 
9,634