Exhibit 10.7
AMENDED AND RESTATED GAMESTOP CORP.
SUPPLEMENTAL COMPENSATION PLAN
     GameStop Corp., a Delaware corporation (the “Company”), hereby adopts this
Amended and Restated GameStop Corp. Supplemental Compensation Plan (the “Plan”).
The Company intends that bonus compensation payable pursuant to this Plan shall
constitute “performance-based compensation” within the meaning of Section 162(m)
(“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations from time to time promulgated thereunder.
     1. Purposes of Plan. The purposes of the Plan are to provide personal
incentive and financial rewards to senior management who, because of the extent
of their responsibilities, can and do make significant contributions to the
success of the Company by their ability, industry, loyalty and exceptional
services, by making them participants in that success.
     2. Eligible Employees. The Company’s Chief Executive Officer (the “CEO”),
the Company’s Chief Operating Officer (the “COO”), and such other executive
officers of the Company and its subsidiaries and affiliates as may from time to
time be designated as Plan participants by the Committee (as defined herein),
shall be eligible to receive cash bonus awards under the Plan. The CEO, the COO
and each other executive officer designated by the Committee concurrently with
or prior to the establishment of the applicable Target (defined below) pursuant
to Section 6 below for any Plan Year (defined below) (or, if later, prior to the
commencement of such individual’s service as an executive officer or such other
time as shall be specified under Section 162(m)) shall be an “Eligible
Participant” for such Plan Year.
     3. Plan Year. The Plan Year shall be the fiscal year of the Company.
     4. Effective Date. The GameStop Corp. Supplemental Compensation Plan was
adopted by the board of directors of GameStop Holdings Corp. (f/k/a GameStop
Corp.) on May 14, 2003 and became effective on July 3, 2003 upon approval of the
material terms thereof by the then applicable stockholders and was assumed by
the Company on October 3, 2005. This amendment and restatement was adopted by
the Board of Directors on May 10, 2006 and shall become effective upon approval
of the material terms hereof by the Company’s stockholders in accordance with
the requirements of Section 162(m).
     5. Administration.
     (a) The Committee. The term “Committee” as used herein shall mean the
Committee of the Board of Directors or such other committee of the Board of
Directors designated to administer this Plan, in either case consisting of two
or more members of the Board and with each such member qualifying as an outside
director as defined under Section 162(m).
     (b) Authority. Subject to the provisions of the Plan, the Committee shall
interpret the Plan and the awards granted under the Plan, shall make all other
determinations necessary or advisable for the administration of the Plan and
shall correct any defect or supply any omission or reconcile any inconsistency
in the Plan or in any award, in the manner and to the extent the Committee deems
desirable to carry the Plan or award into effect.
     (c) Procedure. All determinations of the Committee shall be made by not
less than a majority of its members at a meeting at which a quorum is present. A
majority of the entire Committee shall constitute a quorum for the transaction
of business. Any action required or permitted to be taken at a meeting of the
Committee may be taken without a meeting, if a unanimous written consent which
sets forth the action is signed by each member of the Committee and filed with
the minutes of the proceedings of the Committee. No member of the Committee
shall be liable, in the absence of bad faith, for any act or omission with
respect to his services. Without limiting the generality of the foregoing or the
scope of any applicable provision of the Company’s Certificate of Incorporation
or Bylaws or any indemnification agreement, no member of the Committee shall be
liable for any action or determination made in good faith with respect to

 

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the Plan or any award granted thereunder.
     6. Awards. Not later than 90 days after the commencement of each Plan Year
(and before 25% of the relevant period of service for each Eligible Participant
has elapsed), the Committee shall establish in writing separately for each
Eligible Participant (a) the percentage of such Eligible Participant’s base
salary that shall be the subject of an award and (b) a performance target (the
“Target”), the attainment of which shall be substantially uncertain. The
Committee may use the following performance measures (either individually or in
any combination) to set performance targets: net sales; pretax income before
allocation of corporate overhead and bonus; budget; earnings per share; net
income; division, group or corporate financial goals; return on stockholders’
equity; return on assets; attainment of strategic and operational initiatives;
appreciation in and/or maintenance of the price of the Class A common stock or
any other publicly-traded securities of the Company; market share; gross
profits; earnings before taxes; earnings before interest and taxes; earnings
before interest, taxes, depreciation and amortization; economic value-added
models; comparisons with various stock market indices; and/or reductions in
costs. Targets which are based in whole or part on per share amounts, such as
earnings per share, shall be, and, at the discretion of the Committee, any other
Targets may be, subject to adjustment for recapitalizations, dividends, stock
splits and reverse splits, reorganizations, issuances of additional shares,
redemptions of shares, option or warrant exercises, reclassifications,
significant acquisitions and divestitures or other extraordinary events.
     Each Eligible Participant will receive a cash bonus in the amount of the
pre-determined percentage of his or her base salary (the “Target Bonus”) as
follows:

              Then the Percentage of the If the Plan Year Results were:   Target
Bonus Received is:
Less than 85% of Target
  None  
85% or more but less than 90% of Target
    50 %
90% or more but less than 100% of Target
    75 %
100% or more but less than 110% of Target
    100 %
110% or more but less than 125% of Target
    110 %
125% or more of Target
    125 %

     Notwithstanding the foregoing, in no event shall the maximum cash bonus
payable to any Eligible Participant under the Plan exceed $2,500,000 with
respect to any Plan Year. Cash bonuses will not become payable and will not be
paid until the Committee certifies the extent to which the Target has been
attained. The Committee has no discretion to increase the amount of compensation
that would otherwise be due upon attainment of the Target.
     7. Form and Payment of Awards. Awards to Eligible Participants shall be
made only when the Committee has certified that the Targets have been attained.
Awards shall be made in cash and shall be payable in a lump sum. To comply with
Section 409A of the Code, certification of Targets and payment of awards shall
be made not later than the later of (i) the 15th day of the third month
following the Eligible Participant’s first taxable year in which the award is no
longer subject to a substantial risk of forfeiture (within the meaning of
Section 409A of the Code) or (ii) the 15th day of the third month following the
Company’s first taxable year in which the award is no longer subject to a
substantial risk of forfeiture (within the meaning of Section 409A of the Code).
     All awards shall be paid from the general funds of the Company and no
special or separate fund shall be established and no other segregation of assets
shall be made to assure the payment of awards hereunder. An Eligible Participant
shall have no right, title, or interest whatsoever in or to any investments
which the Company may make to aid it in meeting its obligations hereunder.
Nothing contained in this instrument, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship, between the Company and an Eligible Participant or any
other person. To the extent that any person acquires a right to receive payments
from the Company, such right shall be no greater than the right of an unsecured
creditor.

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     Except as provided in the following sentence, an Eligible Participant must
be employed by the Company or one of its subsidiaries or affiliates on the last
day of the Plan Year to be eligible to receive an award for such Plan Year. If
an Eligible Participant dies or becomes incapacitated, any award so made shall
be paid to his estate or legal representative at such time and in such manner as
if he were living or not incapacitated, prorated for the portion of the Plan
Year in which services were rendered.
     8. Amendment. The Board of Directors of the Company retains the authority
to amend the Plan, subject to the stockholder approval requirements of
Section 162(m).
     9. Section 162(m) of the Code. Unless otherwise determined by the
Committee, the provisions of this Plan shall be administered and interpreted in
accordance with Section 162(m) of the Code to ensure the deductibility by the
Company or its subsidiaries of the payment of Awards.
     10. Tax Withholding. The Company or any subsidiary shall have the right to
make all payments or distributions pursuant to the Plan to an Eligible
Participant, net of any applicable Federal, State and local taxes required to be
paid or withheld. The Company or any subsidiary shall have the right to withhold
from wages, Awards or other amounts otherwise payable to such Eligible
Participant such withholding taxes as may be required by law, or to otherwise
require the Eligible Participant to pay such withholding taxes. If the Eligible
Participant shall fail to make such tax payments as are required, the Company or
any subsidiary shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to such Eligible
Participant or to take such other action as may be necessary to satisfy such
withholding obligations.

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