Exhibit 10.7

STOCK OPTION CERTIFICATE

For «Number» Shares

Issued Pursuant to the
Amended and Restated 2001 Incentive Plan of
GAMESTOP CORP.

     THIS CERTIFIES that on ___, 20___, (the “Issuance Date”), «Name» (the
“Holder”) was granted an option (the “Option”) to purchase, at the option price
of $  ___ per share (the “Exercise Price”), up to «Number» fully paid and
non-assessable shares of the Class A Common Stock, $.001 par value per share
(the “Shares”), of GAMESTOP CORP., a Delaware corporation (the “Company”), upon
and subject to the following terms and conditions:

     (a) Terms of the Plan. The Option is granted pursuant to, and is subject to
the terms and conditions of, the Amended and Restated 2001 Incentive Plan of the
Company (the “Plan”), the terms, conditions and definitions of which are hereby
incorporated herein as though set forth at length, and the receipt of a copy of
which the Holder hereby acknowledges by his signature below. Capitalized terms
used herein shall have the meanings set forth in the Plan, unless otherwise
defined herein.

     (b) Expiration. This Option shall expire at 11:59 p.m., ___, 20___[Tenth
Anniversary of Issuance Date], unless earlier terminated in accordance with this
Option Certificate or the Plan.

     (c) Exercise. This Option may be exercised or surrendered during the
Holder’s lifetime only by the Holder or his/her guardian or legal representative
or by a Permitted Assignee, as provided in Sections 9.4, 9.6 and 9.7 of the
Plan. THIS OPTION SHALL NOT BE TRANSFERABLE BY THE HOLDER OTHERWISE THAN BY WILL
OR BY THE LAWS OF DESCENT AND DISTRIBUTION, SUBJECT TO THE TERMS AND CONDITIONS
OF THE PLAN.

     This Option shall vest and be exercisable as set forth below:

     (i) If the Holder has been continuously employed by the Company or any of
its subsidiaries or affiliates on ___, 20___[First Anniversary of Issuance Date]
(the “First Vesting Date”), this Option shall vest and be exercisable in
accordance with its terms with respect to [One-Third] of the Shares.

     (ii) If the Holder has been continuously employed by the Company or any of
its subsidiaries or affiliates on ___, 20___[Second Anniversary of Issuance
Date], this Option shall vest and be exercisable in accordance with its terms
with respect to an additional [One-Third] of the Shares.

     (iii) If the Holder has been continuously employed by the Company or any of
its subsidiaries or affiliates on ___, 20___[Third Anniversary of Issuance
Date], this Option shall vest and be exercisable. in accordance with its terms
with respect to an additional [One-Third] of the Shares.

     (iv) All unvested portions of this Option shall vest in full and be fully
exercisable in accordance with the terms hereunder, notwithstanding any vesting
restrictions to the contrary, immediately prior to the occurrence of a “Change
in Control”, as hereinafter defined. A “Change in Control” shall be defined as
and shall be deemed to occur if: (i) any person or entity, or any persons or
entities acting as a group, acquire beneficial ownership of

 

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more than 35% by vote of the voting securities of the Company; or (ii) there
shall have occurred a change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended, as in effect on the date hereof, whether or not the Company is then
subject to such reporting requirement, or (iii) the Company has merged or
consolidated with, or sold substantially all of its assets to, another company.

     This Option shall be exercised by the Holder (or by his/her executors,
administrators, guardian or legal representative or by a Permitted Assignee, as
provided in Sections 9.4, 9.6 and 9.7 of the Plan) as to all or part of the
Shares, by the giving of written notice of exercise to the Company, specifying
the number of Shares to be purchased, accompanied by payment of the full
Exercise Price for the Shares being purchased. Full payment of such purchase
price shall be made at the time of exercise and shall be made (i) in cash or by
certified check or bank check or wire transfer of immediately available funds,
(ii) with the consent of the Committee, by delivery of a promissory note in
favor of the Company upon such terms and conditions as determined by the
Committee, (iii) with the consent of the Committee, by tendering previously
acquired Shares (valued at its Fair Market Value, as determined by the Committee
as of the date of tender) that have been owned for a period of at least six
months (or such other period to avoid accounting charges against the Company’s
earnings), (iv) if Shares are traded on a national securities exchange, the
Nasdaq Stock Market, Inc. or quoted on a national quotation system sponsored by
the National Association of Securities Dealers, Inc. and the Committee
authorizes this method of exercise, through the delivery of irrevocable
instructions to a broker approved by the Committee to deliver promptly to the
Company an amount equal to the purchase price, or (v) with the consent of the
Committee, any combination of (i), (ii), (iii) and (iv). In connection with a
tender of previously acquired Shares pursuant to clause (iii) above, the
Committee, in its sole discretion, may permit the Holder to constructively
exchange Shares already owned by the Holder in lieu of actually tendering such
Shares to the Company, provided that adequate documentation concerning the
ownership of the Shares to be constructively tendered is furnished in form
satisfactory to the Committee. The notice of exercise, accompanied by such
payment, shall be delivered to the Company at its principal business office or
such other office as the Committee may from time to time direct, and shall be in
such form, containing such further provisions consistent with the provisions of
the Plan, as the Committee may from time to time prescribe. In no event may any
Option granted hereunder be exercised for a fraction of a Share. The Company
shall effect the transfer of Shares purchased pursuant to an Option as soon as
practicable, and, within a reasonable time thereafter, such transfer shall be
evidenced on the books of the Company. No person exercising an Option shall have
any of the rights of a holder of Shares subject to an Option until certificates
for such Shares shall have been issued following the exercise of such Option. No
adjustment shall be made for cash dividends or other rights for which the record
date is prior to the date of such issuance.

     (d) Termination of Employment. In the event of the termination of the
Holder’s employment or separation from service for any reason (other than death,
disability or termination for cause as provided below), this Option, to the
extent not previously exercised or expired, to the extent vested on the date of
such termination shall be exercisable as of such termination for a period not to
exceed three months after the date of such termination, provided, however, that
the Committee shall have the absolute discretion to increase such period or to
decrease such period to a period of not less than two weeks.

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     In the event of the termination of the Holder’s employment for cause, the
Option and all rights granted hereunder shall be forfeited and deemed canceled
and no longer exercisable on the day of such termination of employment. For the
purposes of this Stock Option Certificate, the term “cause” shall be defined as:
(i) any act of fraud or embezzlement in respect of the Company or any of their
respective funds, properties or assets; (ii) conviction of the Holder of a
felony under the laws of the United States or any state thereof; (iii) willful
misconduct or gross negligence by the Holder in connection with the performance
of his or her duties to the Company; (iv) intentional dishonesty by the Holder
in the performance of his or her duties to the Company; (v) engagement by the
Holder in the use of illegal substances or alcohol, which use has impaired the
Holder’s ability, as determined by the Board of Directors of the Company, on an
ongoing basis, to perform his or her duties to the Company; and (vi) breach by
the Holder of any terms and conditions set forth in any non-competition,
non-solicitation and/or non-disclosure agreement executed by the Holder. A
determination of cause shall be made by the Board of Directors of the Company.

     (e) In the event (i) the Holder dies while in the service of the Company or
any of its subsidiaries or affiliates or (ii) the Holder’s service with the
Company or any of its subsidiaries or affiliates is terminated due to his total
disability, the terms and conditions of Sections 9.6 and 9.7 of the Plan shall
apply.

     (f) Adjustments. The number of Shares subject to this Option, and the
exercise price, shall be subject to adjustment in accordance with Section 9.9 of
the Plan.

     (g) Delivery of Share Certificates. Within a reasonable time after the
exercise of this Option, the Company shall cause to be delivered to the person
entitled thereto a certificate for the Shares purchased pursuant to the exercise
of this Option. If this Option shall have been exercised with respect to less
than all of the Shares subject to this Option, the Company shall also cause to
be delivered to the person entitled thereto a new Option Certificate in
replacement of this Option Certificate if surrendered at the time of the
exercise of this Option, indicating the number of Shares with respect to which
this Option remains available for exercise, or this Option Certificate shall be
endorsed to give effect to the partial exercise of this Option.

     (h) Withholding. In the event that the Holder elects to exercise this
Option or any part thereof, and if the Company or any subsidiary or affiliate of
the Company shall be required to withhold any amounts (the “Withholding Taxes”)
by reason of any federal, state or local tax laws, rules or regulations in
respect of the issuance of Shares to the Holder pursuant to the Option or the
exercise or disposition (in whole or in part) of the Option, the Company or such
subsidiary or affiliate shall be entitled to deduct and withhold such amounts
from any payments to be made to the Holder. In any event, the Holder shall make
available to the Company or such subsidiary or affiliate, promptly when
requested by the Company or such subsidiary or affiliate, sufficient funds to
meet the requirements of such withholding; and the Company or such subsidiary or
affiliate shall be entitled to take and authorize such steps as it may deem
advisable in order to have such funds available to the Company or such
subsidiary or affiliate out of any funds or property due or to become due to the
Holder.

     (i) Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Option such number of Shares as shall be required for issuance or delivery upon
exercise hereof.

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     (j) Rights of Holder. Nothing contained herein shall be construed to confer
upon the Holder any right to be continued in the employ of the Company and/or
any subsidiary or affiliate of the Company or derogate from any right of the
Company and/or any subsidiary or affiliate of the Company to retire, request the
resignation of, or discharge the Holder at any time, with or without cause. The
Holder shall not, by virtue hereof, be entitled to any rights of a shareholder
in the Company, either at law or in equity, and the rights of the Holder are
limited to those expressed herein and are not enforceable against the Company
except to the extent set forth herein.

     (k) Registration; Legend. The Company may postpone the issuance and
delivery of Shares upon any exercise of this Option until (a) the admission of
such Shares to listing on any stock exchange or exchanges on which Shares of the
Company of the same class are then listed and (b) the completion of such
registration or other qualification of such Shares under any state or federal
law, rule or regulation as the Company shall determine to be necessary or
advisable. The Holder shall make such representations and furnish such
information as may, in the opinion of counsel for the Company, be appropriate to
permit the Company, in light of the then existence or non-existence with respect
to such Shares of an effective Registration Statement under the Securities Act
of 1933, as amended, to issue the Shares in compliance with the provisions of
that or any comparable act.

     The Company may cause the following or a similar legend to be set forth on
each certificate representing Shares or any other security issued or issuable
upon exercise of this Option unless counsel for the Company is of the opinion as
to any such certificate that such legend is unnecessary:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS
ESTABLISHED BY AN OPINION FROM COUNSEL TO THE COMPANY.

     (l) Amendment. The Company may at any time or from time to time amend the
terms and conditions of this Option in accordance with the Plan.

     (m) Notices. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, or overnight courier, addressed as
follows: if to the Company, at the office of GameStop Corp., 2250 William D.
Tate Avenue, Grapevine, Texas 76051, or at such other address as the Company by
notice to the Holder may designate in writing from time to time; and if to the
Holder, at the address shown below his/her signature on this Option Certificate,
or at such other address as the Holder by notice to the Company may designate in
writing from time to time. Notices shall be effective upon receipt.

     (n) Interpretation. A determination of the Committee, in its sole
discretion, as to any questions which may arise with respect to the
interpretation of the provisions of this Option and

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of the Plan shall be final and binding. The Committee, in its sole discretion,
may authorize and establish such rules, regulations and revisions thereof as it
may deem advisable.

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     IN WITNESS WHEREOF, the parties have executed this Option Certificate as of
the date set forth above.

                  GAMESTOP CORP.
 
                By:    

      Name:   David W. Carlson

      Title:   Executive Vice President and Chief Financial Officer
ACCEPTED:
           
 
           
 
           
«Name»
           
 
           
 
           
Address
           
 
           
 
           
City                     State                     Zip Code
           
 
           
 
           
Social Security/ID Number
           

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