DEF 14A 1 gme_def14a2017.htm DEF 14A Document



 
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
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
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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.
 
 
 
 
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Proxy Statement and Notice of
2017 Annual Meeting of Stockholders

June 27, 2017
Grapevine, Texas



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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 27, 2017 at 1:00 p.m., Central Daylight Time, at GameStop's Corporate Headquarters located at 625 Westport Parkway, Grapevine, Texas 76051. At the annual meeting, you will be asked to:
(1)
Elect 10 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)
Provide an advisory, non-binding vote on the frequency of advisory votes on the compensation of our named executive officers;
(4)
Ratify our Audit Committee’s appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending February 3, 2018;
(5)
Approve an amendment and restatement of our certificate of incorporation to change the stockholder voting requirement for removal of directors from a supermajority (80%) of stockholders and only for cause, to a simple majority of stockholders with or without cause, and to make other technical and conforming changes; and
(6)
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 5, 2017.
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 12, 2017






IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 27, 2017:

This Proxy Statement, form of proxy and 2016 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 12, 2017, 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 2016 Annual Report. This Proxy Statement and the form of proxy are first being distributed and made available to stockholders on or about May 12, 2017.

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
 
 
Stock Vested and Option Exercises
Pension Plans and Nonqualified Deferred Compensation
 
 
PROPOSAL 3: ADVISORY VOTE ON THE FREQUENCY OF ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXEUTIVE OFFICERS
 
 



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 27, 2017
1:00 p.m., Central Daylight Time
Location:
GameStop Corporate Headquarters
625 Westport Parkway, Grapevine, Texas 76051
Record Date:
May 5, 2017
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.
Advisory Vote on the Frequency of Advisory Votes on Executive Compensation (Every One, Two or Three Years)
FOR Every One Year
4.
Ratification of Appointment of Independent Registered Accounting Firm
FOR
5.
Amendment and Restatement of Company Certificate of Incorporation
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 — 10 Directors
Board Meetings Held in Fiscal 2016 — 14
Number of Independent Directors — 8
Board Responsible for Risk Oversight
Board Contains a Lead Independent Director
Code of Conduct for Directors, Officers and Employees
Regular Executive Sessions with Independent Directors
Equity Ownership Requirements for Directors and Officers
Separate Chairman and CEO
Anti-Hedging Policy
Average Age of Directors — 62
Executive Compensation Tied to Performance Measures
Mandatory Retirement Age — 72
Claw-back Policy



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2017 Proxy Statement | 1


Nominees for Election as Director
Name 
Age
Director Since (1)
Occupation
Independent
 
Committee Memberships
Daniel A. DeMatteo
69
2002
Executive Chairman, GameStop Corp.
 
 
 
J. Paul Raines
53
2012
Chief Executive Officer, GameStop Corp.
 
 
 
Jerome L. Davis
62
2005
Executive Vice President & Chief Revenue Officer, Metropolitan Washington Airports Authority
ü
 
Nominating & Corporate Governance
Thomas N. Kelly Jr.
70
2012
Former Chief Operating Officer, Nextel Corporation
ü
 
Compensation
Shane S. Kim
54
2011
Former Corporate Vice President, Microsoft Corporation
ü
 
Audit, Compensation
Steven R. Koonin
59
2007
Chief Executive Officer, The Atlanta Hawks
ü
 
Nominating & Corporate Governance
Stephanie M. Shern
69
2002
Former Vice Chairman and Global Director of Retail and Consumer Products, EY LLP
ü
 
Audit
Gerald R. Szczepanski
68
2002
Former Chairman, Gadzooks, Inc.
ü
 
Compensation
Kathy P. Vrabeck
53
2012
Senior Client Partner, Consumer Markets, Korn Ferry International
ü
 
Audit
Lawrence S. Zilavy
66
2005
LR Enterprises Management, LLC
ü
 
Audit, Nominating & Corporate Governance
_______________________________
(1) Includes predecessor companies
FISCAL 2016 BUSINESS HIGHLIGHTS
Our transformation continued to progress in fiscal 2016, as our non-physical gaming businesses drove gross margin expansion and significantly contributed to our earnings. Our physical gaming business experienced a challenging environment, driving an 11% decline in comparable store sales. Despite the headwinds, our executive management team completed the following initiatives in support of our overall strategy and continued to demonstrate disciplined capital allocation:
 
Achieved a record gross margin rate of 35.0%;
 
Continued the growth of the Technology Brands business, increasing revenues by $280 million to $814 million;
 
Added more than 500 AT&T authorized retailer stores to our Technology Brands business;
 
Grew collectibles sales by 60% to $494 million;
 
Grew our non-physical gaming contribution to 37% of adjusted operating earnings from 25% in fiscal 2015;
 
Continued the growth of PowerUp Rewards and our other customer loyalty programs to over 52 million members;
 
Repurchased 3.0 million shares of common stock at an average price of $24.94 per share for a total of $75.1 million; and
 
Paid quarterly dividends of $0.37 per share, which represents an increase of 2.8% compared to fiscal 2015.
EXECUTIVE COMPENSATION
Our executive compensation program is based on the following guidelines:
 
Competitive compensation 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 opportunities designed to be consistent with the level of our operational performance over time and the level of returns provided to stockholders; and
 
50% to 60% of each of our name executive officers' total compensation to be tied to performance measures.


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2017 Proxy Statement | 2


Compensation Pay Mix
A significant portion of the 2016 compensation program for our named executive officers was performance-based, with payouts linked to the attainment of certain defined performance measures. For fiscal 2016, 58% of our CEO's total targeted compensation and 52%, on average, of our other named executive officers' total targeted compensation were tied to performance measures:
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(1)
Subject to a performance condition of $200 million in consolidated net income for fiscal 2016 to be eligible for tax deductibility under Section 162(m).
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 2017 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 2016 and 2015:
 
 
Fiscal Year
 
 
2016
 
2015
Audit Fees
 
$
3,968,000

 
$
3,284,000

Audit-Related Fees
 
21,000

 
101,000

Tax Fees
 
382,000

 
483,000

All Other Fees
 

 

Total
 
$
4,371,000

 
$
3,868,000




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2017 Proxy Statement | 3


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 10 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 select the frequency of every one, two or three years for an advisory, non-binding vote on our executive compensation
FOR Every One Year
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 3, 2018
FOR
5.
To approve the amendment and restatement of our certificate of incorporation to provide that any director may be removed from office with or without cause by majority stockholder vote and to make other technical and conforming changes
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 5, 2017 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, 101,263,816 shares of common stock were issued and 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 10 nominees for director identified in this Proxy Statement; (2) FOR the approval of the compensation of our Named Executive Officers (as defined in "Proposal 1: Election of Directors—Executive Officers"); (3) FOR an annual advisory vote on the compensation of our Named Executive Officers; (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 3, 2018; and (5) FOR the amendment and restatement of our certificate of incorporation to provide that any director may be removed from office with or without cause by majority stockholder vote and to make other technical and conforming changes.
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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2017 Proxy Statement | 4


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, 3 and 5, 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 Proposals 2 and 3 are 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 and determinations regarding the frequency of advisory votes on our executive compensation.
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 2017 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


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2017 Proxy Statement | 5


to recommend to the Board whether the Board should accept the resignation, and the Board will be required to act on the recommendation, 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.
Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation. The frequency of the advisory vote on our executive compensation receiving the greatest number of votes (every one, two or three years) will be considered the frequency recommended by our stockholders. Abstentions and broker non-votes will therefore have no effect on the result of such vote.
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 3, 2018 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.
Amendment and Restatement of Our Certificate of Incorporation. Amendment and restatement of our certificate of incorporation to change the stockholder voting requirement for removal of directors from a supermajority (80%) of stockholders and only for cause, to a simple majority of stockholders with or without cause, and to make other technical and conforming changes requires the affirmative vote of at least 80% of all outstanding shares of common stock entitled to vote. Abstentions and broker non-votes will therefore have the same effect as votes cast against such proposal.
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 have retained Alliance Advisors, a professional soliciting organization, to assist in soliciting proxies. We expect the proxy solicitation fees for Alliance Advisors to be less than $10,000. 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 77842-2170; 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 77842-2170; or by calling Computershare at 1-800-522-6645 (outside the United States, phone


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2017 Proxy Statement | 6


1-201-680-6578) and providing such information. 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: Matt Hodges, Vice President of Public 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 2018 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 2018 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 2018 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 2016 Annual Report with this Proxy Statement. The 2016 Annual Report includes our audited financial statements for our fiscal year ended January 28, 2017 ("fiscal 2016"), along with other financial information about us. Our 2016 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 www.gamestop.com and clicking on the “Investor Relations” link within the “Corporate” link;
writing to Matt Hodges, our Vice President of Public 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.



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2017 Proxy Statement | 7


PROPOSAL 1: ELECTION OF DIRECTORS
Composition of the Board
 
The Board currently consists of 10 directors. Each current director is standing for reelection.
The Board has established a director retirement age of 72, 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.
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 5, 2017:
Name 
 
Age
 
Director Since*
 
Position with the Company
 
Audit Committee
 
Compensation Committee
 
Nominating & Corporate Governance Committee
Daniel A. DeMatteo
 
69
 
2002
 
Executive Chairman and Director
 
 
 
 
 
 
J. Paul Raines
 
53
 
2012
 
Chief Executive Officer and Director
 
 
 
 
 
 
Jerome L. Davis
 
62
 
2005
 
Director
 
 
 
 
 
  x **
Thomas N. Kelly Jr.
 
70
 
2012
 
Director
 
 
 
x
 
 
Shane S. Kim
 
54
 
2011
 
Director
 
x
 
x
 
 
Steven R. Koonin
 
59
 
2007
 
Director
 
 
 
 
 
x
Stephanie M. Shern
 
69
 
2002
 
Director
 
  x **
 
 
 
 
Gerald R. Szczepanski
 
68
 
2002
 
Director
 
 
 
  x **
 
 
Kathy P. Vrabeck
 
53
 
2012
 
Director
 
x
 
 
 
 
Lawrence S. Zilavy
 
66
 
2005
 
Director (1)
 
x
 
 
 
x
__________________________________________
*
Includes predecessor companies
**
Committee Chair
(1) 
Lead Independent Director
The Board believes that each director has valuable individual 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. As indicated in the following biographies, our directors have extensive experience in a variety of fields including retail, entertainment, video games, consumer marketing, finance, real estate, consulting and communications, each of which the Board believes provides valuable knowledge related to the key components of the Company’s business. In addition, the Board believes that its Board members and nominees, as indicated in the following biographies, have each demonstrated significant leadership skills as a chief executive officer or chief operating officer, as a senior partner in a large services firm or as executive management in other large corporations. All of our current Board members have experience in oversight of publicly-traded companies due to their experience on the Board and the boards of directors of other companies. The Board believes that the skills and experience of each standing director and nominee qualify them to serve as a director of the Company.


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2017 Proxy Statement | 8


Nominees for Election as Director
 
The following individuals are nominees for director at the 2017 annual meeting:
Daniel A. DeMatteo
 
Director since 2002
Age 69
Executive Chairman, GameStop Corp.
 
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 20 years of experience growing GameStop and its predecessor companies into the world’s largest omnichannel video game retailer and over 25 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.
J. Paul Raines
 
Director since 2012
Age 53
Chief Executive Officer, GameStop Corp.
 
Other Public Company Directorships:
• J.C. Penney Company, Inc. (since 2016)
 
• Advance Auto Parts, Inc. (2010 - 2016)
GameStop Committees:
• None
 
Mr. Raines is a director and is our Chief Executive Officer. Prior to being named Chief Executive Officer in June 2010, he served as Chief Operating Officer, a position he held since joining the Company in September 2008. As Chief Executive Officer, Mr. Raines has led the on-going transformation of GameStop from the leading global physical video game retailer into a global family of specialty retail brands by building online and digital platforms and expanding the Company’s efforts beyond the video game category, to include a portfolio of AT&T wireless and Apple technology retail brands through its acquisitions of Spring Mobile and Simply Mac.
Prior to joining GameStop, Mr. Raines spent eight years with The Home Depot, Inc., a home improvement retailer (“Home Depot”) in various management positions in retail operations, including as Executive Vice President of U.S. Stores and President of the Southern Division. Prior to Home Depot, he spent four years in global sourcing for L.L. Bean, Inc., a privately-held outdoor apparel and equipment retailer, and 10 years with Kurt Salmon Associates in their consumer products group. Mr. Raines is a member of the Board of Trustees of the Georgia Tech Foundation, a non-profit organization.
Director Qualifications: Mr. Raines brings to the Board extensive experience in the strategic, operational and merchandising aspects of retail businesses. He also has broad international experience in Latin America, Europe and Asia. The Board benefits from Mr. Raines’ insights gained from his experience and expertise in the areas of retail store operations, customer service, manufacturing, marketing, loss prevention, real estate, supply chain and global sourcing. Mr. Raines currently serves on the Board of Directors of J.C. Penney and previously served on the Board of Directors of Advance Auto Parts as chair of the Compensation Committee and as a member of the Finance Committee and Nominating and Corporate Governance Committee. Mr. Raines’ director experience provides the Board with a unique perspective into corporate management and board dynamics at other retail public companies.


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Jerome L. Davis
 
Director since 2005
Age 62
Executive Vice President & Chief Revenue Officer, Metropolitan Washington Airports Authority
Other Public Company Directorships:
• Apogee Enterprises, Inc. (since 2004)
GameStop Committees:
• Nominating and Corporate Governance Committee, Chair
Mr. Davis is a director and Chair of the Nominating and Corporate Governance Committee. Mr. Davis has served as a director since October 2005. Mr. Davis is Executive Vice President & Chief Revenue Officer for Metropolitan Washington Airports Authority, an independent airport authority, in Washington, D.C. since September 2014.  Mr. Davis was President of Jerome L. Davis & Associates, LLC, a consulting firm focusing on executive coaching and leadership development from 2006 until August 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 January 2010 to June 2012. Mr. Davis was Global Vice President, Service Excellence for Electronic Data Systems, a business and technology services company, from July 2003 until October 2005. From May 2001 to July 2003, he served in various capacities at Electronic Data Systems, including Chief Client Executive Officer and President, Americas for Business Process Management. Prior to joining Electronic Data Systems, Mr. Davis served as President and Executive Officer of the Commercial Solutions Division of Maytag Corporation, a home and commercial appliance company, from October 1999 until May 2001. Mr. Davis served as Senior Vice President of Sales and Corporate Officer for Maytag Appliances Division from March 1998 to September 1999. From March 1992 to February 1998, Mr. Davis was Vice President of National Accounts and Area Vice President for Frito-Lay, Inc., a division of PepsiCo that manufactures, markets and sells corn chips, potato chips and other snack foods ("Frito-Lay"). Mr. Davis also held senior executive positions in Sales and Marketing with Procter & Gamble, a consumer goods company, from 1977 to 1992. Mr. Davis is currently a director and a member of the Compensation Committee and the Nominating and Corporate Governance Committee of Apogee Enterprises, Inc. (“Apogee”), where he has been a director since 2004. He previously chaired the Finance and Enterprise Risks Committee of Apogee for five years.
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 marketing and sales, strategy development, international business, leadership development, succession planning, real estate development, executive compensation and information technology. 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.
Thomas N. Kelly Jr.
 
Director since 2012
Age 70
Former Chief Operating Officer, Nextel Corporation
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 in the communications and wireless industries brings valuable insight in supporting the advancement of our mobile wireless retail and digital strategies.
Shane S. Kim
 
Director since 2011
Age 54
Former Corporate Vice President, Microsoft Corporation
Other Public Directorships
• None
 
GameStop Committees
• Audit Committee, Compensation Committee
Mr. Kim is a director and a member of the Compensation Committee. He has served as a director at GameStop since July 2011 and also serves as a director on the board of SCUF Gaming, a private company. SCUF Gaming is a global leader in high-end controllers and accessories customized for hardcore and professional video game players. Mr. Kim worked for Microsoft Corporation, leading provider of software and technology solutions (“Microsoft”), for almost 20 years, retiring in January 2010. For the last 15 years at Microsoft, Mr. Kim was with Microsoft’s Interactive Entertainment Business division, most recently as its Corporate Vice President of Strategy and Business Development. Before that, Mr. Kim was the Corporate Vice President of Microsoft Game Studios, where he oversaw a team of approximately 1,000 programmers, designers, artists and producers developing a broad range of Xbox 360 and Windows titles. Since retiring from Microsoft in January 2010, Mr. Kim has been an independent adviser to companies in the interactive entertainment and digital media industries.


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2017 Proxy Statement | 10


Director Qualifications: Mr. Kim brings to the Board over 20 years of experience in the constantly evolving video game industry and the associated rapidly changing technological landscape. His broad video game knowledge, his knowledge of Microsoft (one of our largest suppliers) and business experience bring valuable insight in supporting the advancement of the Company’s business and digital strategies.
Steven R. Koonin
 
Director since 2007
Age 59
Chief Executive Officer, The Atlanta Hawks
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 and serves on the boards of directors of the Georgia Aquarium, the Fox Theatre, the Atlanta Symphony Orchestra and Emory Healthcare.
Director Qualifications: Mr. Koonin brings to the Board 15 years of executive leadership experience with a leading provider of media 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.
Stephanie M. Shern
 
Director since 2002
Age 69
Former Vice Chairman and Global Director of Retail and Consumer Products, EY LLP
Other Public Company Directorships:
• Koninklijke Ahold Delhaize N.V. (formerly Koninklijke Ahold N.V.) (since 2005)
 
• Abercrombie & Fitch Co. (since 2014)
 
• The Scotts Miracle-Gro Company (2003 - 2014)
 
• CenturyLink. Inc. (formerly Embarq Corporation) (2006 - 2009)
GameStop Committees:
• Audit Committee, Chair
 
Mrs. Shern is a director and Chair of the Audit Committee and has served in these capacities since 2002. From 1995 until 2001, Mrs. Shern was the Vice Chair and Global Director of Retail and Consumer Products for EY LLP, a professional services organization (“EY”), and a member of EY's Management Committee. Mrs. Shern became a Partner at EY in 1981 and was with that firm for over 30 years. Mrs. Shern is currently a director of Koninklijke Ahold Delhaize N.V. (“Royal Ahold Delhaize”), where she serves as a member of the Audit Committee. She is also a member of the Board of Directors and Audit Committee of Abercrombie & Fitch. Mrs. Shern has also served as a director of CenturyLink Inc. and Scotts Miracle-Gro. Mrs. Shern is a Certified Public Accountant ("CPA") and a member of the American Institute of CPAs and the New York State Society of CPAs. She is also a member of Pennsylvania State University’s Smeal College Accounting Advisory Board and a founding member of Tapestry Network’s Lead Director Network.
Director Qualifications: Mrs. Shern brings to the Board vast leadership, financial, international, marketing/consumer industry and retail experience from a more than 40-year finance career focused significantly on retail and consumer industries in both the United States and abroad. In addition, as a current member of the Audit Committees of Royal Ahold Delhaize and Abercrombie & Fitch and as a past member of Audit Committees of the boards of directors of other public companies, Mrs. Shern has extensive financial experience. This experience has proven valuable to the Board, where Mrs. Shern serves as Chair of the Audit Committee and as the “audit committee financial expert,” as that term is defined in the applicable rules and regulations of the SEC.
Gerald R. Szczepanski
 
Director since 2002
Age 68
Former Chairman, Gadzooks, Inc.
 
Other Public Company Directorships:
• Rush Enterprises, Inc. (2008 - 2015)
GameStop Committees:
• Compensation Committee, Chair
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.


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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.
Kathy P. Vrabeck
 
Director since 2012
Age 53
Senior Client Partner, Consumer Markets, Korn Ferry International
 
Other Public Company Directorships:
• AVP, Inc. (2006 - 2008)
 
GameStop Committees:
• Audit Committee
 
Ms. Vrabeck is a director and a member of the Audit 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.
Lawrence S. Zilavy
 
Director since 2005
Age 66
LR Enterprises Management, LLC
Other Public Directorships
• The Hain Celestial Group, Inc. (since 2002)
 
• 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 serves on the Board of Directors of The Hain Celestial Group, Inc., a natural and organic food and personal care products company, where he is a member of the Audit Committee and chairperson of the Corporate Governance and Nominating Committee. 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.
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.




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2017 Proxy Statement | 12


Meetings and Committees of the Board
 
The Board met 14 times during fiscal 2016. All directors attended 75% or more of the aggregate of all of the meetings of the Board and the committees thereof on which they served during fiscal 2016.
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 Stephanie M. Shern (Chair), Shane S. Kim, Kathy P. Vrabeck and Lawrence S. Zilavy, all of whom are “independent” directors under the listing standards of the NYSE. 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 Board has also determined that Mrs. Shern has 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. The Audit Committee met 10 times during fiscal 2016.
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 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
Producing an annual report on executive compensation for inclusion in the Company’s proxy statement.


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The current members of the Compensation Committee are Gerald R. Szczepanski (Chair), Thomas N. Kelly Jr. and Shane S. Kim, all of whom meet 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 2016.
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 and Lawrence S. Zilavy, all of whom meet 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 5 times during fiscal 2016.
Minimum Qualifications
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 MattersOther 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 by-law 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. The complete text of our By-laws, 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 MattersProxy Access Director Nominees” later in this proxy statement.


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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.
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 2016 Stock Ownership Guideline
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 a director who retires after reaching age 72 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.
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 January 28, 2017, each of our executive officers and non-employee directors was in compliance with our equity ownership policy.


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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 2016, 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 2017 annual meeting and be available to address questions or concerns raised by stockholders. Each of the Company’s 10 directors attended the Company's 2016 annual meeting.
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., Shane S. Kim, Steven R. Koonin, Stephanie M. Shern, Gerald R. Szczepanski, Kathy P. Vrabeck and Lawrence S. Zilavy 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 and are comprised exclusively of independent directors under the foregoing standards. The Board did not determine Messrs. Raines and DeMatteo to be independent because of their 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 nine other directors of which eight 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 and 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 oversee the execution of our strategic initiatives, including the implementation of the Company’s multi-concept retail strategy and provide guidance to the senior management team, including our Chief Executive Officer. Mr. J. Paul Raines, the Chief Executive Officer of the Company, also serves as a director. The Board believes that Mr. Raines’ 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, including the existing video game store base, international operations, mobile and digital initiatives and our diversification into other retail concepts, including AT&T and Cricket branded wireless stores, Simply Mac branded Apple reseller stores and our collectibles business. The Board believes that at this time our stockholders are best served by this structure as it helps facilitate the Company’s continuing transformation to a multi-concept


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retailer. 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, general counsel, 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.
Director Compensation
 
In fiscal 2016, 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. In prior years, long-term cash awards were also granted; however, this practice was eliminated during the year ended January 31, 2015 (“fiscal 2014”). For the fiscal year ended February 3, 2018 (“fiscal 2017”), the compensation structure for each non-employee director will remain consistent with the fiscal 2016 director compensation structure. 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.
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 2016:
Name
 
Fees Earned and
Paid in Cash (1)
 
Stock
Awards (2)
 
All Other
Compensation (3)
 
Total
Jerome L. Davis(4)
 
$
140,000

 
$
140,000

 
$
37,500

 
$
317,500

R. Richard Fontaine(5)
 
54,000

 

 
37,500

 
91,500

Thomas N. Kelly Jr.(4)
 
140,000

 
140,000

 
37,500

 
317,500

Shane S. Kim(4)
 
140,000

 
140,000

 
37,500

 
317,500

Steven R. Koonin(4)
 
140,000

 
140,000

 
37,500

 
317,500

Stephanie M. Shern(4)
 
140,000

 
140,000

 
37,500

 
317,500

Gerald R. Szczepanski(4)
 
140,000

 
140,000

 
37,500

 
317,500

Kathy P. Vrabeck(4)
 
140,000

 
140,000

 
37,500

 
317,500

Lawrence S. Zilavy(4)
 
140,000

 
140,000

 
37,500

 
317,500

____________________________
(1)
Represents amounts earned and paid for service in fiscal 2016.
(2)
Reflects the grant date fair values in accordance with FASB ASC Topic 718 for the fiscal 2016 grants of 5,418 shares of restricted stock for each of the Board members based on the closing price of our common stock on the date of grant. Grants of restricted shares vest after one year following the grant date, subject to continued service to the Company as well as accelerated vesting in the case of retirement under certain circumstances. The assumptions used by the Company in calculating the grant date fair value are incorporated herein by reference to Note 12 to the Company’s consolidated financial statements in its Annual Report on Form 10-K, filed March 27, 2017.


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(3)
Reflects long-term cash awards granted in fiscal year ended February 1, 2014 ("fiscal 2013"). The awards vest in equal annual increments over a three-year period after the grant date, subject to continued service to the Company; awards may accelerate vesting in the case of retirement under certain circumstances. The amounts reflected represent the amount of the awards vested during fiscal 2016. No long-term cash awards were granted subsequent to fiscal 2013.
(4)
As of January 28, 2017, each of the named directors held 5,418 shares of restricted stock that have not vested.
(5)
Mr. Fontaine retired from the Board effective June 21, 2016.
Executive Officers
 
The following table sets forth the names and ages of our executive officers and the positions they hold:
Name 
Age
Position with the Company
Daniel A. DeMatteo
69
Executive Chairman
J. Paul Raines
53
Chief Executive Officer
Tony D. Bartel
53
Chief Operating Officer
Robert A. Lloyd
55
Executive Vice President and Chief Financial Officer
Michael P. Hogan
58
Executive Vice President, Strategic Business and Brand Development
Michael K. Mauler
56
Executive Vice President and President, GameStop International
Michael T. Buskey
68
Executive Vice President, Human Resources and ThinkGeek Stores
Troy W. Crawford
49
Senior Vice President, Chief Accounting Officer
In this Proxy Statement, the term “Named Executive Officers” means our Chief Executive Officer (our Principal Executive Officer, or "PEO"), our Executive Vice President and Chief Financial Officer (our Principal Financial Officer, or "PFO"), and our Executive Chairman, Chief Operating Officer and Executive Vice President, Strategic Business and Brand Development, who were our three most highly compensated executives other than our PEO and PFO in fiscal 2016.
Roles of Executive Chairman and Chief Executive Officer
The Company employs an Executive Chairman (Mr. DeMatteo) and a Chief Executive Officer (Mr. Raines). 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. As Chief Executive Officer, Mr. Raines 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.
Tony D. Bartel is Chief Operating Officer of GameStop, a role he has held since January 2015. He served as President from 2010 to January 2015 and Executive Vice President of Merchandising and Marketing from 2007 to 2010. Prior to that, Mr. Bartel was the Senior Vice President of International Finance, a role he held since joining GameStop in 2005. Mr. Bartel joined GameStop from NCH Corporation, a marketer of maintenance products, where he was the Chief Administrative Officer from 2003 to 2005. From 1989 to 2003, Mr. Bartel held various positions with PepsiCo, a beverage company, and Yum! Brands, Inc., an American fast food company, including Operational Finance, Strategic Planning, Controller and eventually Chief Financial Officer of Pizza Hut. Prior to 1989, Mr. Bartel held various positions with the public accounting firm of KPMG Peat Marwick. Mr. Bartel currently serves on the Board of Directors of Sonic Corp.
Robert A. Lloyd is Executive Vice President and Chief Financial Officer, a role he has held since 2010. Mr. Lloyd also served as our 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 North Texas, a non-profit organization.
Michael P. Hogan is the Executive Vice President of Strategic Business and Brand Development, a role he has held since August 2012. He joined GameStop in 2008 as Senior Vice President and Chief Marketing Officer, in which capacity he served until August 2012. Previously, Mr. Hogan served as a Principal with Strategic Frameworking, a strategic consulting firm. Mr. Hogan also served as a Senior Vice President of Marketing at Dean Foods Company, a food and beverage company, and as Vice President of International Marketing at Frito-Lay. Mr. Hogan currently serves on the Board of Directors of Arcbest Corp, a publicly traded transportation company, and Feed the Children, a non-profit organization.


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Michael K. Mauler is the Executive Vice President and President of GameStop International, a role he has held since 2010. Mr. Mauler was formerly the Company’s Senior Vice President of Supply Chain and International Support, a position he held since 2005. Prior to that, Mr. Mauler was the Vice President of Logistics of Electronics Boutique, a computer video games retailer. Mr. Mauler has also held senior management positions for Baxter Healthcare, a health care company, Dade Behring, a company which manufactured testing machinery and supplies for the medical diagnostics industry, and Fisher Scientific, a multinational, biotechnology product development company, where he led operations for 22 countries.
Michael T. Buskey is the Executive Vice President, Human Resources and ThinkGeek Stores, a role he has held since January 2017. Mr. Buskey was formerly the Company's Executive Vice President and President of U.S. Stores. He joined GameStop in 2010 as Senior Vice President of Human Resources. Previously, Mr. Buskey served as Senior Vice President of Human Resources and U.S. Store Operations for Home Depot. Mr. Buskey has more than 30 years of retail leadership experience in human resources and store operations.
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.
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 5, 2017 ) beneficially owned on May 5, 2017 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. 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 5, 2017 was 101,263,816.
 
 
Shares Beneficially Owned
Name
 
Number (1)
 
%
FMR LLC
 
15,281,106

(2) 
15.1
245 Summer Street
 
 
 
 
Boston, MA 02210
 
 
 
 
The Vanguard Group
 
8,183,568

(3) 
8.1
100 Vanguard Boulevard
 
 
 
 
Malvern, PA 19355
 
 
 
 
BlackRock, Inc.
 
7,833,349

(4) 
7.7
55 East 52nd Street
 
 
 
 
New York, NY 10055
 
 
 
 
Iridian Asset Management LLC
 
6,234,619

(5) 
6.2
276 Post Road West
 
 
 
 
Westport, CT 06880
 
 
 
 
J. Paul Raines
 
898,223

(6) 
*
Robert A. Lloyd
 
236,439

(7) 
*
Daniel A. DeMatteo
 
380,256

(8) 
*
Tony D. Bartel
 
545,032

(9) 
*
Michael P. Hogan
 
241,298

(10) 
*
Jerome L. Davis
 
44,704

(11) 
*
Thomas N. Kelly Jr.
 
23,748

(11) 
*
Shane S. Kim
 
25,774

(11) 
*
Steven R. Koonin
 
18,494

(11) 
*
Stephanie M. Shern
 
10,925

(11) 
*
Gerald R. Szczepanski
 
34,354

(11) 
*
Kathy P. Vrabeck
 
18,154

(11) 
*
Lawrence S. Zilavy
 
24,414

(11) 
*
All Directors and Officers as a group (16 persons)
 
2,892,740

(12) 
2.8


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________________________________
*
Less than 1.0%.
(1)
Shares of common stock that an individual or group has a right to acquire within 60 days after May 5, 2017 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. 7 to Schedule 13G filed with the SEC on February 14, 2017, FMR LLC has the sole power to vote or to direct the vote with respect to 2,515,651 of these shares and sole power to dispose or direct the disposition with respect to 15,281,106 of these shares.
(3)
Based on information included in its Amendment No. 5 to Schedule 13G filed with the SEC on February 13, 2017, The Vanguard Group has the sole power to vote or to direct the vote with respect to 61,265 of these shares, the sole power to dispose or direct the disposition with respect to 8,116,061 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 67,507 of these shares.
(4)
Based on information included in its Amendment No. 9 to Schedule 13G filed with the SEC on January 24, 2017, BlackRock, Inc. has the sole power to vote or to direct the vote with respect to 7,394,433 of these shares and sole power to dispose or direct the disposition with respect to 7,833,349 of these shares.
(5)
Based on information included in its Schedule 13G filed with the SEC on February 2, 2017, Iridian Asset Management LLC has the shared power to vote or to direct the vote with respect to 6,234,619 of these shares and the shared power to dispose or direct the disposition with respect to 6,234,619 of these shares.
(6)
Of these shares, 241,740 are issuable upon exercise of stock options (all of which are vested as of May 5, 2017 ) and 355,834 are unvested restricted shares.
(7)
Of these shares, 53,660 are issuable upon exercise of stock options (all of which are vested as of May 5, 2017 ) and 104,926 are unvested restricted shares.
(8)
Of these shares, 138,480 are issuable upon exercise of stock options (all of which are vested as of May 5, 2017 ) and 72,922 are unvested restricted shares.
(9)
Of these shares, 132,900 are issuable upon exercise of stock options (all of which are vested as of May 5, 2017 ) and 170,871 are unvested restricted shares.
(10)
Of these shares, 66,480 are issuable upon exercise of stock options (all of which are vested as of May 5, 2017 ) and 85,504 are unvested restricted shares.
(11)
Of these shares, 5,418 are unvested restricted shares.
(12)
Of these shares, 671,600 are issuable upon exercise of stock options (all of which are vested as of the record date), 1,014,407 are unvested restricted shares and 5,200 shares are held in each of two trusts for the benefit of the children of one of our Executive Officers.
Compensation Committee Interlocks and Insider Participation
 
The members of the Compensation Committee are Gerald R. Szczepanski (Chair), Thomas N. Kelly Jr. and Shane S. Kim, 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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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 the growth and 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 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, and may include situational bonuses, as appropriate, in recognition of meeting unique, time-sensitive performance challenges that may arise.
4.
The overall value of the incentive and total compensation opportunities 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 2011 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 2017 annual meeting of stockholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the 2016 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 the growth, profitability, cash flow and high level of performance necessary for GameStop to produce ongoing and sustained value for our stockholders. During the past few years, we have transformed from the world’s largest specialty retailer of physical video game products into a family of retail brands selling many of the world’s most popular technologies and pop-culture products. Our vision is to continue to expand our business as a global family of specialty retail brands. Our mission is to continue to be the world’s largest omnichannel retailer of new and pre-owned and value video game products, to continue to grow sales of digital products, to expand the sales of collectible products through our video game stores and www.thinkgeek.com, to increase the number of our pop culture-themed stores and to strategically grow our Technology Brands segment to further diversify our revenue streams. The Compensation Committee will continue to develop and recommend compensation programs to support this mission and our efforts to expand our business as a global family of specialty retail brands.
Specific Named Executive Officers ("NEOs") covered in this Compensation Discussion and Analysis are:
J. Paul Raines - Chief Executive Officer
Robert A. Lloyd - Executive Vice President and Chief Financial Officer
Daniel A. DeMatteo - Executive Chairman
Tony D. Bartel - Chief Operating Officer
Michael P. Hogan - Executive Vice President of Strategic Business and Brand Development
2016 Performance
Company Operational Performance
In fiscal 2016, we continued to make progress on our strategic initiatives to develop as a global multichannel retailer of one of the largest entertainment categories — video games, both digital and physical, as well as to expand our business in collectibles and other retail concepts, which we refer to as Technology Brands. Although we underperformed in our Video Game Brands segments, we made substantial progress in our non-gaming business. These factors were reflected in our executive compensation outcomes. Under the leadership of our executive management team, we completed the following initiatives in fiscal 2016 in support of our overall strategy:
Expanded gross margins nearly 400 basis points to a record of 35.0%;
Continued the growth of the Technology Brands business, from revenues of $534 million in fiscal 2015 to $814 million in fiscal 2016;
Grew collectibles sales by 60% to $494 million in fiscal 2016 from $310 million in fiscal 2015;
Grew our non-physical gaming contribution to 37% of adjusted operating earnings in fiscal 2016 from 25% in fiscal 2015; and
Continued the growth of PowerUp Rewards and our other customer loyalty programs, expanding from approximately 46 million members at the end of fiscal 2015 to over 52 million members by the end of fiscal 2016.
Capital Deployment
Additionally, under the effective leadership of our executive management team, we continued to demonstrate disciplined capital allocation, with the following accomplishments:
Repurchased 3.0 million shares of common stock at an average price of $24.94 per share for a total of $75.1 million, bringing cumulative share repurchases since the inception of our share repurchase program in January 2010 to 77.2 million shares at an average price of $25.64 per share for a total of $2.0 billion;
Paid quarterly dividends of $0.37 per share, or $1.48 annually, in fiscal 2016, which represents an increase of 2.8% annually in comparison to dividends of $1.44 per share paid in fiscal 2015; and
Added more than 500 stores to our Technology Brands business in fiscal 2016 with Spring Mobile completing acquisitions of additional AT&T resellers, for total consideration of $440.3 million, net of cash acquired;
In March 2017, we continued to deliver on our commitment to return value and capital to stockholders by announcing an increase in the quarterly dividend by an additional 2.7% in March 2017 to $0.38 per share.


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Shareholder Return
The following chart illustrates our total shareholder return (after considering the Company's dividend payments) during fiscal 2016 and our cumulative three-year total shareholder return, each in comparison to the total shareholder return for the Standard & Poor's 500 (the "S&P 500") over the same time frames:
gme_tsr2017a01.jpg
2016 Compensation Program Summary
In 2016, the three primary components of our NEOs’ total target compensation were salary, short-term incentive and long-term incentive, as described below:
Program
Description
Purpose
Salary
Fixed cash compensation
Reward for level of responsibility, experience and sustained individual performance.
Short-Term Incentive ("STI")
Cash compensation based on the following performance measures:
75% based on fiscal 2016 consolidated operating earnings
25% based on fiscal 2016 Technology Brands operating earnings
Reward for achievement against specific objective financial goals and strategic goals.
Long-Term Incentive ("LTI")
50% of total — time-based restricted stock subject to vesting based on continued service.(1)
Reward for creation of stockholder value and to retain executives for the long-term.
50% of total — performance-based restricted stock based the following measures:
50% based on fiscal 2017 consolidated operating earnings
50% based on percentage of fiscal 2017 operating earnings from sources other than physical video games
Reward for achievement against specific objective financial goals and creation of stockholder value.
__________________________________________
(1)
Subject to a performance condition of $200 million in consolidated net income for fiscal 2016 to be eligible for tax deductibility under Section 162(m). See “Section 162(m) Compliance” below for further detail.


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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, asset impairments and 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 & Analysis, we make reference to the use of operating earnings as a performance measure for certain incentives and awards. See Annex I for a reconciliation of our operating earnings to our adjusted operating earnings.
Please refer to the "Other Considerations" section below for a discussion of other indirect elements of our compensation program.
A significant portion of the 2016 compensation program for our NEOs was performance-based, with payouts linked to the attainment of certain defined performance goals, including the Company's operating earnings, net income and Technology Brands operating earnings. The charts below summarize the mix of pay elements for the CEO, and all other NEOs, based on target compensation for fiscal 2016.
compmix2017a01.jpg
(1)
Subject to a performance condition of $200 million in consolidated net income for fiscal 2016 to be eligible for tax deductibility under Section 162(m). See “Section 162(m) Compliance” below for further detail.
Incentive Plan Payouts for Performance Periods Ending Fiscal 2016
Performance 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 2016, 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 2016
 
Fiscal 2016
 
Achieved 88.0% of the targeted fiscal 2016 consolidated operating earnings and 102.5% of the targeted fiscal 2016 Technology Brands operating earnings(1)
74%
LTI (Performance-based restricted stock)
 
Fiscal 2014
 
Fiscal 2016
 
Achieved 81.5% of the targeted return on fiscal 2016 invested capital(2)
0%
LTI (Performance-based restricted stock)
 
Fiscal 2015
 
Fiscal 2016
 
Achieved 86.5% of the targeted fiscal 2016 net income(3)
55%
__________________________________________
(1)
Related to the 2016 STI, with payout tied to percentage of annual salary and percentage attainment of consolidated operating earnings and Technology Brands operating earnings targets set by Compensation Committee. See “Short-Term Incentives” below for further detail. See also Annex I for a reconciliation of our operating earnings to our adjusted operating earnings.
(2)
Related to the 2014 performance-based restricted stock grant subject to a performance target tied to achieving a certain return on invested capital target for fiscal 2016. See Long-Term Incentives section below for further detail.
(3)
Related to the 2015 performance-based net income grant subject to a performance target tied to achieving a certain consolidated net income target for fiscal 2016. See Long-Term Incentives section below for further detail.


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2017 Proxy Statement | 24


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 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 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. Compensation may include situational bonuses, as appropriate, in recognition of meeting unique, time-sensitive performance challenges that may arise; and
The overall value of the incentive and total compensation opportunities will be designed to be consistent with the level of our operational performance over time and the level of returns provided to stockholders.
The compensation program is designed to reward the executive officers for the dedication of their time, efforts, skills and business experience to our operations. The Compensation Committee targets approximately 50% to 60% of each NEO's total compensation be tied to performance measures and such compensation is therefore at risk. The compensation program is also designed to reward both annual and long-term performance. Annual performance is rewarded through salary and short-term incentives and is measured by our operating earnings and growth, among other factors. Long-term performance is rewarded through performance-based and time-based restricted stock, with approximately 50% of the total long-term incentive compensation mix tied to the achievement of performance measures.
The Compensation Committee oversees risks associated with compensation policies and the retention and development of executive talent, including the development of policies that do not encourage excessive risk-taking by our executives. These policies include various factors to help mitigate risk, including fixed compensation components and variable components that include mitigating factors such as a consistent structure across all business units, generally involving consolidated income components; targeted award amounts that are not significant as a percentage of revenue; and vesting periods, equity ownership policies, and claw-back provisions. The Compensation Committee and management also regularly review our compensation policies to determine effectiveness and to assess the risk they present to the Company. Based on this review, we have concluded that our compensation policies and procedures are not reasonably likely to have a material adverse effect on the Company.
Response to Advisory Vote on Executive Compensation
 
A substantial majority of our stockholders (93% of votes cast) approved the fiscal 2015 compensation for our NEOs at the 2016 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 intends to make changes to the program where it determines it 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 executive officers, 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 2011 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 a 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 to 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 to the Board and evaluating the Company’s pay practices.


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2017 Proxy Statement | 25


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 which are approximately 0.5x to 2x the Company's revenue and 0.2x to 5x the Company's market capitalization. The specific companies included in our fiscal 2016 peer group are listed below:
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
In general, not later than 90 days after the start of each fiscal year of the Company (and before 25% of the relevant performance period has elapsed), the Compensation Committee establishes in writing a performance target ("Target") for the annual short-term cash incentives and long-term performance-based restricted stock incentives. Targets are typically based on budgeted financials. Because the Target is established in the first 90 days of the fiscal year, the attainment of the Target is substantially uncertain at the time the Target is established.
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 consist of base salary and short-term and long-term incentive awards, and cover 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 2016 compensation program.
Base Salaries
In determining the base salaries of the NEOs for fiscal 2016, the Compensation Committee considered, among other things, the Company's growth and continued expansion of our mobile, collectible and digital businesses in fiscal 2015, projections for fiscal 2016, the responsibilities of each NEO, the individual's experience, 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.
In February 2016, the Board set salaries for fiscal 2016 for the NEOs as follows:
Named Executive Officer
 
Base Salary
J. Paul Raines
 
$
1,288,000

Robert A. Lloyd
 
709,000

Daniel A. DeMatteo
 
550,000

Tony D. Bartel
 
927,000

Michael P. Hogan
 
620,000

Mr. DeMatteo's base salary remained unchanged from fiscal 2015, Mr. Hogan received a salary increase of 15% over his fiscal 2015 base salary. Other NEOs received base salary increases of 3% from fiscal 2015.


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2017 Proxy Statement | 26


Short-Term Incentives
In addition to a base salary, each NEO 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.
STI payouts were determined based on the achievement of consolidated operating earnings and Technology Brands operating earnings. These metrics aligned with the Company’s business strategy of driving earnings and focusing on expanding the Technology Brands retail concept. The STI was also subject to a net earnings performance condition for purposes of achieving tax deductibility under Section 162(m).
Performance Measures
The final STI payouts for the NEOs were ultimately based 75% on consolidated operating earnings and 25% on Technology Brands operating earnings. Payouts associated with each of the two performance measures were based on the following scale. 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%
 
75%
85%
 
50%
Less than 85% of Target
 
None
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.
Targets for Each Named Executive Officer
Target STI opportunities for fiscal 2016 for our NEOs were as follows (which remain unchanged from fiscal 2015 for all NEOs):
Named Executive Officer
 
Percentage of
Base Salary
J. Paul Raines
 
200%
Robert A. Lloyd
 
100%
Daniel A. DeMatteo
 
150%
Tony D. Bartel
 
125%
Michael P. Hogan
 
100%
Payouts
In determining the final STI payout for fiscal 2016, the Compensation Committee assessed consolidated operating earnings and Technology Brands operating earnings, 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 operating earnings (fiscal 2016)
 
$705 million
 
$621 million
 
88.0%
 
65.0%
 
75.0%
 
49%
Technology brands operating earnings (fiscal 2016)
 
$88 million(1)
 
$90 million
 
102.5%
 
102.0%(1)
 
25.0%
 
25%
Total payout
 
 
 
 
 
 
 
 
 
 
 
74%
(1)
When determining the final STI payouts, the Compensation Committee used discretion to increase the initial Target of $50 million established for Technology Brands operating earnings in contemplation of the acquisitions made during fiscal 2016. This reduced the associated payout to each of the NEOs from an earned percentage of 125% under the initial Technology Brands operating earnings Target to 102% under the revised Target.


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2017 Proxy Statement | 27


The following STI payouts were made for fiscal 2016 to our NEOs:
Named Executive Officer
 
STI Payout
J. Paul Raines
 
$
1,906,240

Robert A. Lloyd
 
524,660

Daniel A. DeMatteo
 
610,500

Tony D. Bartel
 
857,475

Michael P. Hogan
 
458,800

Long-Term Incentive Awards
Form of Fiscal 2016 Long-Term Incentive Awards
The Compensation Committee met on February 22, 2016 and, upon ratification by the Board on February 23, 2016, awarded a combination of time-based restricted stock and performance-based restricted stock for fiscal 2016 to be granted to the NEOs as of February 26, 2016 (collectively, the “2016 LTI Awards”). Time-based restricted stock and performance-based restricted stock were granted to align the interests of the NEOs with the interests of the Company's stockholders, offer NEOs an incentive for the achievement of superior performance over time and foster the retention of key management personnel. To determine the amount of equity 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 target grant date fair value of the 2016 LTI Awards was determined effective as of February 22, 2016, with the number of shares determined effective as of the grant date of February 26, 2016. The target grant date fair value for each of Messrs. Raines, Lloyd, Bartel, and Hogan represents 90% of the targeted value of the 2015 LTI Awards in recognition of the Company's efforts to reduce Selling, General and Administrative costs. The target value for Mr. DeMatteo's 2016 LTI Award was set at $1,200,000, approximately 50% of the targeted value of his 2015 LTI Award, reflecting his continually evolving role as Executive Chairman. Each LTI award was comprised of 50% time-based restricted stock and 50% performance-based restricted stock, which balances the retentive and performance-based nature of the total LTI award.
Time-based restricted stock awards are subject to a three-year ratable vesting schedule and achieving consolidated net income of $200 million for fiscal 2016 to achieve tax deductibility under Section 162(m). This performance condition was met for fiscal 2016.
Performance-based restricted stock awards are subject to performance against pre-determined fiscal 2017 operating earnings targets, to be measured subsequent to the completion of the audited consolidated financial statements for fiscal 2017. Operating earnings was selected as a measure to focus on the long-term profitability of the Company. Additionally, given the Company is focused on diversifying its business, a second-year performance period was selected recognizing the difficulty in setting goals for a longer time period. Awards are subject to one additional year of time-based vesting following the end of the performance period to provide for additional retention of NEOs. Each NEO is entitled to receive the performance-based restricted stock according to the performance achievement scale shown below. Straight-line interpolation is applied between levels shown.
If the Performance Period Results are:
 
Then the Percentage of the
Target Award Received is:
125% or more of Target
 
200%
110%
 
125%
100% (Target)
 
100% (Target)
90%
 
75%
85%
 
50%
Less than 85% of Target
 
None


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2017 Proxy Statement | 28


The Compensation Committee awarded the NEOs restricted stock in fiscal 2016 as follows:
Named Executive Officer
Time-Based
Restricted Stock
Grant
(1)
Performance-
Based Restricted
Stock Grant
(2)
Total Shares of
Restricted
Stock
Awarded
Total Targeted
Award Value
(3)(4)
J. Paul Raines
73,680

 
73,680

 
147,360

 
$
4,500,000

 
Robert A. Lloyd
24,780

 
24,780

 
49,560

 
1,512,000

 
Daniel A. DeMatteo
19,650

 
19,650

 
39,300

 
1,200,000

 
Tony D. Bartel
35,370

 
35,370

 
70,740

 
2,160,000

 
Michael P. Hogan
17,700

 
17,700

 
35,400

 
1,080,000

 
__________________________________________
(1)
Time-based restricted stock, subject to a performance condition intended to achieve tax deductibility under Section 162(m) of the Code. The award vests in equal installments on February 26th of each of the years 2017 through 2019, subject to continued service to the Company and the achievement of a certain level of consolidated net income in fiscal 2016.
(2)
Performance-based restricted stock subject to fiscal 2017 operating earnings. Determination of earned awards is subject to the completion of the audited consolidated financial statements for fiscal 2017. The earned shares will vest subject to continued service with the Company through February 26, 2019.
(3)
The fair value of stock-denominated awards is based on the closing price of our common stock of $30.54 per share on the grant date of February 26, 2016.
(4)
In addition, in fiscal 2016, the Compensation Committee recommended and the Board approved an adjustment to the 2012 performance-based restricted stock grant that was based on the Company's return on invested capital for fiscal 2014 after it was determined that each recipient was entitled to 5% more of the grant. The adjustment resulted in an additional distribution of 2,130 shares to Mr. Raines, 900 shares to Mr. Lloyd, 1,335 shares to Mr. DeMatteo and 1,275 shares to Mr. Bartel. Mr. Hogan did not receive the 2012 performance grant.
Achievement of Fiscal 2015 Long-Term Incentive Awards
A portion of the fiscal 2015 restricted stock awards were subject to performance against a pre-determined fiscal 2016 consolidated net income Target. 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. Each NEO is entitled to receive the performance-based restricted stock according to the performance achievement scale shown below. Straight-line interpolation is applied between levels shown.
If the Performance Period Results are:
Then the Percentage of the
Target Award Received is:
115% or more of Target
150%
110%
125%
100% (Target)
100% (Target)
90%
75%
85%
50%
Less than 85% of Target
None
In determining the final payout, the Compensation Committee measured the Company's performance, as shown below.
Performance Measure
 
Target
 
Performance Achieved
 
Performance-Based Restricted Stock Earned
Fiscal 2016 consolidated net income
 
$420 million
 
86.5%
 
55%
Based on the actual results, the number of earned performance-based restricted stock by NEO is as follows:
Named Executive Officer
Number of Earned Performance-Based Restricted Stock Payout
J. Paul Raines
34,254

 
Robert A. Lloyd
11,517

 
Daniel A. DeMatteo
17,127

 
Tony D. Bartel
16,451

 
Michael P. Hogan
8,234

 


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2017 Proxy Statement | 29


Achievement of Fiscal 2014 Long-Term Incentive Awards
A portion of the fiscal 2014 restricted stock awards was subject to performance against a pre-determined fiscal 2016 return on invested capital ("ROIC") Target. At the end of the performance period, the fiscal 2016 ROIC did not meet the minimum threshold of 14.45%, which was required for payout. As a result, none of the 2014 performance-based restricted stock awards were earned by the NEOs.
In determining the final payout, the Compensation Committee assessed ROIC, as shown below.
Performance Measure
 
Target
 
Actual
 
Performance Achieved as a % of Target
 
Performance-Based Restricted Stock Earned
Fiscal 2016 ROIC
 
17.0%
 
13.9%
 
81.5%
 
0%
Section 162(m) Compliance
In order to structure the STI as potentially deductible amounts under Section 162(m), the STI plan was subject to a performance condition of $200 million consolidated net income in fiscal 2016. This performance condition was met in fiscal 2016 and determined the maximum bonus pool from which the NEO’s STI payouts could be paid. The maximum bonus pool was established at 150% of the Target payout opportunities for all NEOs indicated above. In awarding the final STI payouts to each NEO, the Compensation Committee exercised its discretion to reduce the maximum amount available for each NEO under the pool. The basis for this exercise of negative discretion by the Compensation Committee was the Company’s performance against the operating earnings Targets as described in the "Short-Term Incentives" section above.
In order to structure the time-based restricted stock as potentially deductible amounts under Section 162(m), the LTI plan was subject to a performance condition of $200 million consolidated net income in fiscal 2016. As mentioned above, this performance condition was met in fiscal 2016.
2017 Compensation Program Summary
Provided below is a summary of key compensation decisions made in fiscal 2017.
Fiscal 2017 Salaries and STI Opportunities
In setting the base salaries of these executive officers for fiscal 2017, the Compensation Committee considered, among other things, the Company’s financial performance and achievements in our diversification strategy during fiscal 2016, projections for fiscal 2017 and the responsibilities of each NEO, the results of the benchmarking against the peer group, and the recommendations received from ClearBridge following its research.
For fiscal 2017, the Compensation Committee made no changes to the base salary of Messrs. Raines, Lloyd, Bartel and Hogan. Due to the ongoing evolution of Mr. DeMatteo's role as Executive Chairman, Mr. DeMatteo's base salary was reduced by $250,000.
For fiscal 2017, the Compensation Committee recommended, and the Board approved, no change to the Target STI opportunity (as a percentage of base salary) for any NEO.
Salaries and Target STI payouts for fiscal 2017 for our NEOs are as follows: 
Named Executive Officer
 
Base Salary
Target STI Percentage of
Base Salary
J. Paul Raines
 
$
1,288,000

 
200%
Robert A. Lloyd
 
709,000

 
100%
Daniel A. DeMatteo
 
300,000

 
150%
Tony D. Bartel
 
927,000

 
125%
Michael P. Hogan
 
620,000

 
100%
2017 Long-Term Incentive Grants
The Compensation Committee met on February 27, 2017 and, upon ratification by the Board on February 28, 2017, approved a combination of time-based and performance-based restricted stock for fiscal 2017 to be granted as of March 3, 2017 (collectively, the “2017 LTI Awards”). The target grant date fair value of the 2017 LTI Awards was determined effective as of February 27, 2017, with the number of shares determined effective as of the grant date of March 3, 2017. The target grant date fair value for each of Messrs. Raines, Lloyd, Bartel and Hogan represents 100% of the targeted value of the 2016 LTI Awards. The target grant date fair value for Mr. DeMatteo's 2017 LTI Award was set at $750,000, reflecting his continually evolving role as Executive Chairman. The LTI award is comprised of 50% time-based restricted stock and 50% performance-based restricted stock, which balances the retentive and performance-based nature of the total LTI award.


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Time-based restricted stock awards are subject to a three-year ratable vesting schedule and a performance condition based on consolidated net income in fiscal 2017 intended to achieve tax deductibility under Section 162(m). Performance-based restricted stock awards are subject to vesting both on the basis of continued service to the Company and the achievement of a certain consolidated operating earnings Target and a certain operating earnings Target for the amount of operating earnings coming from sources other than physical gaming for the fiscal year ended February 2, 2019 ("fiscal 2018"), with such Targets to be measured following the completion of fiscal 2018. Performance-based restricted stock awards are subject to one additional year of time-based vesting following the end of the performance period. The Compensation Committee awarded the NEOs restricted stock as follows:
Named Executive Officer
Time-Based
Restricted Stock
Grant
(1)
 
Performance-Based
Restricted Stock
Grant
(2)
 
Total Shares of
Restricted
Stock
Awarded
 
Total Targeted
Award Value
(3)
J. Paul Raines
89,010

 
 
89,010

 
 
178,020

 
 
$
4,500,000

 
Robert A. Lloyd
29,910

 
 
29,910

 
 
59,820

 
 
1,512,000

 
Daniel A. DeMatteo
14,850

 
 
14,850

 
 
29,700

 
 
750,000

 
Tony D. Bartel
42,750

 
 
42,750

 
 
85,500

 
 
2,160,000

 
Michael P. Hogan
21,390

 
 
21,390

 
 
42,780

 
 
1,080,000

 
 ____________________________
(1)
Time-based restricted stock, subject to a performance condition intended to achieve tax deductibility under Section 162(m) of the Code. The award vests in equal installments on March 3rd of each of the years 2018 through 2020, subject to continued service to the Company and the achievement of a certain level of consolidated net income in fiscal 2017.
(2)
Performance-based restricted stock subject to fiscal 2018 operating earnings Targets measured at the end of fiscal 2018. Determination of earned awards is subject to the completion of the audited consolidated financial statements for fiscal 2018. The earned shares will vest subject to continued service with the Company through March 3, 2020.
(3)
The fair value of stock-denominated awards is based on the closing price of our common stock of $25.28 per share on the grant date of March 3, 2017.
 
Employment Agreements and Severance/Change in Control Benefits
 
The Company entered into new employment agreements with J. Paul Raines, Robert A. Lloyd, Daniel A. DeMatteo, Tony D. Bartel and Michael P. Hogan effective May 10, 2013, and on November 13, 2013, the Company further amended and restated its employment agreement with Mr. Raines (collectively, as amended, the "Employment Agreements"). The Employment Agreements replaced all prior employment agreements that we had previously entered into with such executive officers. In addition to certain changes with respect to the triggers for and the payment of severance, as described below, the Employment Agreements also differ from the prior agreements with these executives in that (A) the term of each of the Employment Agreements is "at will" and may be terminated by the Company or the executive at any time and (B) each executive is restricted from competing with GameStop 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.
Pursuant to the Employment Agreements, each executive’s employment may terminate upon death or disability, by GameStop with or without cause (as defined) or by the executive within twelve months of a good reason event. If an executive’s employment is terminated due to death or disability, or by the Company with cause or by the executive without good reason, the executive is entitled to payment of base salary through the date of death, disability or termination of employment.
Cause includes any of the following: (i) conviction of, or plea of nolo contendere to, a felony or any crime involving fraud or dishonesty; (ii) willful misconduct, whether or not in the course of service, that results (or that, if publicized, would be reasonably likely to result) in material and demonstrable damage to the business or reputation of the Company; (iii) material breach by the executive of any agreement with, policy of or duty owed to the Company or any of its subsidiaries; or (iv) willful refusal by the executive to perform his duties to the Company or the lawful direction of his or her supervisor that is not the result of a disability. If a cause event set forth in subsection (iii) or (iv) occurs, the executive will have a 30-day period in which to cure the event if the Board determines that such event is capable of cure.
Good reason includes the following: (i) a material diminution in the executive’s base salary or the executive’s target annual bonus opportunity; (ii) a material diminution in the executive’s authority, duties, or responsibilities; (iii) the Company relocates the executive’s principal worksite outside of the Dallas/Ft. Worth metropolitan area; or (iv) in the event of a sale of substantially all the business and assets of the Company, a failure of the Company to assign, or a refusal of the principal purchaser of assets to assume, the Company’s then continuing obligations under the Employment Agreements. The Company generally has a 30-day period after notification by the executive to cure any good reason event.


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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 Chief Executive Officer and the Executive Chairman). 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.
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 2011 Incentive Plan, as amended, including upon a change of control.
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 2016 are detailed in "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 “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 GovernanceClaw-back Policy” above. The Company has not historically had any restatements or adjustments of this nature.
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 GovernanceAnti-Hedging Policy” above.
Retirement Policy
In February 2015, the retirement policy (the “Retirement Policy”), recommended by the Compensation Committee and approved by the Board in March 2014, became effective with respect to individuals, including any NEO who meets the criteria described below, providing for vesting of certain awards granted under the 2011 Incentive Plan upon such employee’s retirement. Pursuant to the Retirement Policy, employees who attain a minimum age of 55 and a minimum period of service with the Company and its affiliates of 10 years and whose age plus service equals or exceeds 70, will, upon termination (other than a for cause termination) (an “Eligible Retirement”), become vested with respect to certain unvested awards granted under the 2011 Incentive Plan. Messrs. DeMatteo and Lloyd are currently eligible to retire and receive the vesting provided by the Retirement Policy. Additional details regarding the Retirement Policy are included in the "Employment Agreements and Potential Payments Upon Termination or Change in Control" section below.
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 ($18,000 for 2016). 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.


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2017 Proxy Statement | 32


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 certain of their unvested restricted shares of stock once the underlying shares vested in fiscal 2016. 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).
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 2016 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. Raines, Bartel, Lloyd and Hogan utilized the third party financial planning services in fiscal 2016.
In addition, Messrs. Raines, Lloyd, DeMatteo, Bartel and Hogan are eligible to use the Company plane for personal use. Mr. Raines and Mr. DeMatteo used the plane for personal use in each of the fiscal years 2016, 2015 and 2014. Mr. Lloyd used the plane for personal use in fiscal 2016 and fiscal 2015, but did not use the plane for personal use in fiscal 2014. Mr. Bartel and Mr. Hogan did not use the plane for personal use during fiscal 2016, fiscal 2015 or fiscal 2014.
The amounts disclosed in the “All Other Compensation” column of the Summary Compensation Table for the personal use of the Company plane represent actual incremental costs to operate the plane. The aggregate incremental cost 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.
Our NEOs are fully responsible for the personal income tax liability associated with their perquisites, including the use of the Company plane for personal reasons. The Company does not provide a tax gross-up with respect to such imputed income. None of the NEOs receives any other compensation or benefits which would be defined as perquisites.
Tax and Accounting Implications
 
Impact of Section 162(m) of the Internal Revenue Code
The Compensation Committee has considered the potential impact of Section 162(m) of the Code, adopted under the Revenue Reconciliation Act of 1993. This section disallows a tax deduction for any publicly held corporation, for individual compensation exceeding $1,000,000 in any taxable year paid to its chief executive officer or any of its three other most highly-compensated officers (other than the chief financial officer) unless (i) the compensation is payable solely on account of the attainment of performance goals, (ii) the performance goals are determined by a committee of two or more outside directors, (iii) the material terms under which compensation is to be paid are disclosed to and approved by stockholders and (iv) the determining committee certifies that the performance goals were met. Because it is generally desirable for the Company to qualify to the extent possible the compensation of its executives for deductibility under applicable tax laws, the Company obtained stockholder approval for the 2011 Incentive Plan, which permits for the payment of compensation in


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2017 Proxy Statement | 33


compliance with the above guidelines. The most recent stockholder approval of the 2011 Incentive Plan for this purpose occurred at the 2013 annual meeting of stockholders.
However, the Compensation Committee retains the ability to exercise discretion and to retain flexibility in the payment of compensation that may outweigh the advantages of qualifying all compensation as exempt from the limit of Section 162(m) of the Code.
Accounting for Stock-Based Compensation
The Company records share-based compensation expense in earnings based on the grant-date fair value of options or restricted stock granted in accordance with Financial Accounting Standards Board Accounting Standards Codification 718, Compensation–Stock Compensation (“ASC 718”).
 
Summary Compensation Table
The following table (the “Summary Compensation Table”) sets forth the compensation earned during the fiscal years indicated by our PEO, our PFO and our three other most highly compensated executive officers.
Name and Principal Position
Year
(1)
 
Salary
(2)
 
Stock
Awards
(3)(7)
 
Option
Awards
(3)
 
Non-Equity
Incentive Plan
Compensation
(4)
 
All Other
Compensation
(5)
 
Total
J. Paul Raines
2016
 
$
1,285,077

 
$
4,500,374

 
$

 
$
1,906,240

 
$
125,813

 
$
7,817,504

Chief Executive Officer
2015
 
1,246,923

 
5,002,330

 

 
2,650,000

 
240,644

 
9,139,897

2014
 
1,201,346

 
3,751,078

 
1,250,236

 
2,057,000

 
344,916

 
8,604,576

Robert A. Lloyd
2016
 
707,385

 
1,513,562

 

 
524,660

 
70,541

 
2,816,148

Executive Vice President and Chief Financial Officer
2015
 
685,462

 
1,681,901

 

 
729,280

 
59,583

 
3,156,226

2014
 
653,904

 
1,261,915

 
420,085

 
556,750

 
121,046

 
3,013,700

Daniel A. DeMatteo
2016
 
550,000

 
1,200,222

 

 
610,500

 
75,634

 
2,436,356

Executive Chairman
2015
 
556,731

 
2,501,165

 

 
874,500

 
72,244

 
4,004,640

2014
 
821,865

 
1,875,539

 
625,304

 
1,147,500

 
184,802

 
4,655,010

Tony D. Bartel
2016
 
924,923

 
2,160,400

 

 
857,475

 
52,029

 
3,994,827

Chief Operating Officer
2015
 
896,538

 
2,402,371

 

 
1,192,500

 
45,463

 
4,536,872

2014
 
853,558

 
1,802,736

 
600,069

 
726,750

 
143,820

 
4,126,933

Michael P. Hogan(6)
2016
 
613,923

 
1,081,116

 

 
458,800

 
62,539

 
2,216,378

Executive Vice President, Strategic Business and Brand Development
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 

 ____________________________
(1)
Reflects fiscal 2016, 2015 and 2014.
(2)
Reflects salary paid for fiscal 2016, 2015 and 2014, all of which consisted of 52 weeks.
(3)
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 (or in the case of the stock options, the estimated Black-Scholes fair value) on the date of grant. The assumptions we used to calculate the grant date fair values of the option awards and stock awards are incorporated herein by reference to Note 12 to the consolidated financial statements included in our Annual Report on Form 10-K, filed March 27, 2017. A portion of the restricted shares granted will vest in equal annual increments over a three-year period after the grant date, subject to continued service to the Company. The remaining restricted shares granted are subject to certain performance measures and will vest, if at all, based on the achievement of such measures at the end of each respective performance period, subject to confirmation by the Compensation Committee and continued service to the Company. For fiscal 2016, 50% 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 value of the fiscal 2016 performance-based awards would be as follows: Mr. Raines - $4,500,374; Mr. LLoyd - $1,513,562; Mr. DeMatteo - $1,200,222; Mr. Bartel - $2,160,400 and Mr. Hogan - $1,081,116.
(4)
For fiscal 2016, reflects incentive-based bonuses earned in fiscal 2016 but paid in March 2017. For fiscal 2015, reflects incentive-based bonuses earned in fiscal 2015 but paid in April 2016. For fiscal 2014, reflects incentive-based bonuses earned in fiscal 2014 but paid in April 2015.
(5)
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 and (b) the amounts contributed by the Company to our 401(k) retirement savings plan. See details of these amounts in the "All Other Compensation" table below.
(6)
Michael P. Hogan became one of the three other most highly compensated executive officers in fiscal 2016. As such, compensation for fiscal years 2015 and 2014 are not listed.
(7)
Fiscal 2016 stock awards exclude the Board approved adjustment to the 2012 performance grant that was based on the Company's return on invested capital for fiscal 2014 after it was determined that each recipient was entitled to 5% more of the grant. The adjustment resulted in an additional distribution of 2,130 shares to Mr. Raines, 900 shares to Mr. Lloyd, 1,335 shares to Mr. DeMatteo, and 1,275 shares to Mr. Bartel.


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2017 Proxy Statement | 34


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 2016:
Name
 
Personal Use of Company Aircraft & Ground Transportation (1)
 
401(k)
Matching
Contributions
 
Life Insurance
 
Long-term Disability
 
Financial Services
 
Total
($)
J. Paul Raines
 
$
79,584

 
$
5,886

 
$
9,972

 
$
16,116

 
$
14,255

 
$
125,813

Robert A. Lloyd
 
14,052

 
10,921

 
8,579

 
22,734

 
14,255

 
70,541

Daniel A. DeMatteo
 
4,540

 
11,023

 

 
60,071

 

 
75,634

Tony D. Bartel
 

 
10,683

 
10,975

 
16,116

 
14,255

 
52,029

Michael P. Hogan
 

 
10,813

 
8,957

 
28,514

 
14,255

 
62,539

 ____________________________
(1)
Personal use of Company aircraft is valued based on the aggregate incremental costs to the Company to operate the aircraft. As described more fully in the "Other Considerations" section above, the aggregate incremental cost 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. The use of the Company airplane by Mr. Raines was as a result of Mr. Raines' medical condition and is the Compensation Committee's preferred means of travel for Mr. Raines. Our NEOs are fully responsible for the personal income tax liability associated with their perquisites. The Company does not provide a tax gross-up with respect to such imputed income.
Grants of Plan-Based Awards in Fiscal 2016
The following table shows all grants of plan-based awards, which consisted of grants of time-based and performance-based restricted shares of our common stock and grants of annual performance-based bonuses under the 2011 Incentive Plan, as amended, granted to the NEOs for fiscal 2016.
 
 
 
Estimated Future Payouts
Under Non-Equity Incentive Plan
Awards (1)
 
Estimated Future Payouts
Under Equity Incentive
Plan Awards (3)
 
All Other
Stock
Awards:
Number
of
Shares of
Stock or
Units
(#)(4)(6)
 
Grant
Date
Fair Value
of Stock Awards
($)(5)(6)
Name
Grant
Date
 
Threshold
($)(2)
 
Target
($)
 
Maximum
($)
 
Threshold
(#)(2)
 
Target
(#)
 
Maximum
(#)
 
 
J. Paul Raines
2/26/2016
 
$
1,288,000

 
$
2,576,000

 
$
3,220,000

 
 
 
 
 
 
 
 
 

 
2/26/2016
 
 
 
 
 
 
 
36,840

 
73,680

 
147,360

 
 
 
$
2,250,187

 
2/26/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
73,680

 
2,250,187

Robert A. Lloyd
2/26/2016
 
354,500

 
709,000

 
886,250

 

 

 

 
 
 

 
2/26/2016
 
 
 
 
 
 
 
12,390

 
24,780

 
49,560

 
 
 
756,781

 
2/26/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
24,780

 
756,781

Daniel A. DeMatteo
2/26/2016
 
412,500

 
825,000

 
1,031,250

 

 

 

 

 

 
2/26/2016
 
 
 
 
 
 
 
9,825

 
19,650

 
39,300

 
 
 
600,111

 
2/26/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
19,650

 
600,111

Tony D. Bartel
2/26/2016
 
579,375

 
1,158,750

 
1,448,438

 

 

 

 
 
 

 
2/26/2016
 
 
 
 
 
 
 
17,685

 
35,370

 
70,740

 
 
 
1,080,200

 
2/26/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
35,370

 
1,080,200

Michael P. Hogan
2/26/2016
 
310,000

 
620,000

 
775,000

 

 

 

 

 

 
2/26/2016
 
 
 
 
 
 
 
8,850

 
17,700

 
35,400

 
 
 
540,558

 
2/26/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
17,700

 
540,558

 ____________________________
(1)
Non-Equity Incentive Plan Awards were granted under the 2011 Incentive Plan, as amended.
(2)
If at least 85% of Target is achieved.
(3)
Equity Incentive Plan Awards were granted under the 2011 Incentive Plan and consist of the portion of the fiscal 2016 long-term incentive grant related to restricted shares of common stock subject to achievement of performance targets. For additional information on the grant, refer to the discussion under “Long-term Incentive Awards” in the Compensation Discussion and Analysis above.
(4)
Other Stock Awards were granted under the 2011 Incentive Plan and consist of the portion of the fiscal 2016 long-term incentive grant related to restricted shares of common stock subject to continued service to the Company. For additional information on the grant, refer to the discussion under “Long-term Incentive Awards” in the Compensation Discussion and Analysis above.


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2017 Proxy Statement | 35


(5)
The grant date fair value of each equity award was computed in accordance with ASC 718 based on the closing price of common stock on the grant date. For the restricted stock subject to performance measures, the grant date fair value was determined based on the vesting of 100% of the restricted shares, which was the performance threshold the Company believed to be the probable outcome to be achieved under the grants as of the date of the grant.
(6)
Stock awards shown in this table exclude the additional shares issued during fiscal 2016 in respect to the 2012 performance grant that was based on the Company's return on invested capital for fiscal 2014, after it was determined that each recipient was entitled to 5% more in respect to that grant. The adjustment resulted in an additional distribution of 2,130 shares to Mr. Raines, 900 shares to Mr. Lloyd, 1,335 shares to Mr. DeMatteo, and 1,275 shares to Mr. Bartel.
Outstanding Equity Awards at Fiscal 2016 Year-End
The following table provides information for the executive officers named in the Summary Compensation Table regarding outstanding equity awards held as of January 28, 2017 by those executive officers. The year-end values in the table for the market value of shares that have not vested have been calculated based on the $24.31 per share closing price of common stock on January 27, 2017 (the last trading date of the fiscal year).
 
 
 
 
Option Awards
 
Stock Awards
Name
 
Grant Date
 
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable(1)
 
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(1)
 
Option
Exercise
Price ($)
 
Option
Expiration
Date
(1)
 
Number of
Shares or
Units of
Stock That
Have Not
Vested (#)(2)
 
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(2)
 
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or Other
Rights
That Have
Not Vested(#)(3)
 
Equity Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or Other
Rights That
Have
Not Vested ($)(3)
J. Paul Raines
 
2/26/16
 

 

 

 

 
73,680

 
1,791,161

 
73,680

 
1,791,161

 
 
3/6/15
 

 

 

 

 
41,520

 
1,009,351

 
62,280

 
1,514,027

 
 
3/7/14
 
67,380

 
33,690

 
38.52

 
3/6/24

 
19,747

 
480,050

 
32,460

 
789,103

 
 
2/22/13
 
140,670

 

 
24.82

 
2/21/23

 

 

 

 

Robert A. Lloyd
 
2/26/16
 

 

 

 

 
24,780

 
602,402

 
24,780

 
602,402

 
 
3/6/15
 

 

 

 

 
8,103

 
196,984

 
20,940

 
509,051

 
 
3/7/14
 
22,640

 
11,320

 
38.52

 
3/6/24

 
3,856

 
93,739

 
10,920

 
265,465

 
 
2/22/13
 
19,700

 

 
24.82

 
2/21/23

 

 

 

 

Daniel A. DeMatteo
 
2/26/16
 

 

 

 

 
19,650

 
477,692

 
19,650

 
477,692

 
 
3/6/15
 

 

 

 

 
12,051

 
292,960

 
31,140

 
757,013

 
 
3/7/14
 
33,700

 
16,850

 
38.52

 
3/6/24

 
5,731

 
139,321

 
16,230

 
394,551

 
 
2/22/13
 
87,930

 

 
24.82

 
2/21/23

 

 

 

 

Tony D. Bartel
 
2/26/16
 

 

 

 

 
35,370

 
859,845

 
35,370

 
859,845

 
 
3/6/15
 

 

 

 

 
19,940

 
484,741

 
29,910

 
727,112

 
 
3/7/14