- Leading up to the Annual Meeting, your Board has proactively engaged with stockholders, including the Dissident Stockholders, representing 87% of our outstanding shares as of
April 20, 2020, and directly received favorable stockholder feedback and encouragement for GameStop’s Board refreshment, corporate strategy, capital allocation and corporate governance initiatives
- Even though your Board has appointed five new independent directors with highly valuable and relevant skillsets within the last two years (including two appointed pursuant to the cooperation agreement entered into in 2019 with the Dissident Stockholders), the Dissident Stockholders continue to press their transparently self-motivated argument that your newly refreshed Board requires two additional candidates, both of whom lack necessary skillsets and relevant expertise
- Your Board recruited GameStop’s new management team in 2019, and they are successfully executing GameStop’s turnaround strategy and steering the Company through the COVID-19 crisis with prudent decision making on capital allocation, debt reduction and protecting and enhancing our brand
The full text of the letter from
Dear GameStop Stockholders,
Thank you, as always, for your investment in
GameStop’s Focus on Stockholder Value vs. the Dissident Stockholders’ Selfish and Misguided Opportunism
Your Board has consistently demonstrated that it is focused on delivering returns to stockholders. In
In hindsight, the Dissident Stockholders’ proposal would have been disastrous. Fortunately, your Board first paid down
GameStop’s capital allocation and operationally-driven working capital strategy have directly enabled us to navigate the COVID-19 pandemic with increased financial flexibility, a stronger balance sheet, and sufficient liquidity to protect and enhance stockholder value. As you consider how to vote your shares, we urge you to consider the disastrous financial position the Company would be in today had your Board pursued the Dissident Stockholders’ short-term focused and self-serving buyback strategy.
GameStop’s New & Reinvigorated Board and Management Team
The Dissident Stockholders’ reason for initiating this proxy fight—that your Board requires additional refreshment and lacks an independent stockholder voice—is baseless. Your Board firmly believes in a diversity of perspectives and experience within the boardroom and appreciates constructive stockholder input into Board and management refreshment. Rest assured that your Board has been proactively engaging with numerous stockholders (including the Dissident Stockholders) to receive their collective input and ensure that the next phase of refreshment would represent all our stockholders’ interests and objectives. Your Board held discussions with stockholders, who as of
In the span of two years, your Board’s proactive refreshment process has included:
- The 2019 appointment of two new independent directors pursuant to the Cooperation Agreement with the Dissident Stockholders;
March 2020appointment of three new independent directors, William Simon, James Symancykand Reginald Fils-Aimé, who collectively bring significant retail, gaming, turnaround, digital and omnichannel expertise that complements the incumbent directors’ skillsets;
March 2020announcement that four incumbent directors, Dan DeMatteo, Steve Koonin, Gerald Szczepanskiand Larry Zilavy, would retire at the 2020 Annual Meeting;
March 2020announcement of Lead Independent Director Kathy Vrabeck’sappointment as Board Chair, effective following the 2020 Annual Meeting; and
March 2020announcement that, to ensure comprehensive and detailed knowledge transfer, two more incumbent directors, Thomas Kellyand Jerome L. Davis, will retire at the 2021 Annual Meeting.
Following the 2020 Annual Meeting:
- 9 out of 10 directors will be independent, and
- 7 out of 10 directors will have Board tenures of 2 years of less.
In addition to the thoroughly refreshed Board, your Board appointed
Under the leadership of this refreshed executive management team,
The Dissident Stockholders’ Selfish Campaign and Lack of Constructive Engagement
Despite the differences in perspectives, in early 2019, the Board approved entering into a Cooperation Agreement with the Dissident Stockholders to avoid wasting valuable stockholder capital on a costly and unnecessary proxy fight, and your Board has continued to make efforts to engage constructively with the Dissident Stockholders ever since.
Representatives of the Company met with the Dissident Stockholders in person and by phone several times throughout 2019 to discuss their feedback, and the Dissident Stockholders have been given significant access to and input into the Board refreshment process. Rather than take advantage of this significant opportunity to constructively participate in the Board refreshment process, the Dissident Stockholders single-mindedly reiterated their desire to directly insert themselves onto your Board, without regard for the requisite criteria for director skillsets or the recent Board refreshment—even though we already provided them with representation by settling with them in 2019 and adding their nominee to your Board.
Your Board would welcome open and constructive engagement with the Dissident Stockholders, as we value all stockholders’ feedback. Unfortunately, the Dissident Stockholders have consistently dismissed your Board’s good-faith efforts to solicit and respond to their feedback and instead persist in nominating two candidates with significantly limited skillsets to your Board, pursuing their self-interested aims at the cost of all other
Our Board refreshment process has been both thoughtful and deliberate in incorporating our stockholders’ collective feedback and policy perspective, that stockholder value is not created simply by adding a new board member and that skillset, experience, chemistry, and continuity all matter. Being a stockholder, by itself, does not make a candidate qualified to serve on your Board. In contrast to GameStop’s directors, who possess strong financial, operational, retail, video game and omnichannel experience, among other relevant skills, the Dissident Stockholders have nominated two candidates, both of whom severely lack the qualifications and experience necessary to execute the Company’s ongoing transformation plan.
The Choice is Clear- Please VOTE on the BLUE Proxy Card
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR ALL” OF YOUR BOARD’S 10 NOMINEES USING THE ENCLOSED BLUE PROXY CARD.
Vote your shares FOR ALL of the 10 director nominees proposed by your Board, via the Internet or telephone or by mail by promptly marking, signing and dating the enclosed BLUE proxy card and returning it in the enclosed postage-paid envelope.
Please do not return or otherwise vote any White proxy card sent to you by the Dissident Stockholders.
No matter how many shares you own, your vote is extremely important. Please act today and make your voice heard regarding the future of the Company by supporting your Board and management team.
We believe that GameStop’s highly qualified and experienced Board of Directors is best-positioned to oversee the continued successful execution of GameStop’s Reboot plan and deliver substantial value to ALL of our stockholders. On behalf of the Board of Directors and our management team, thank you for your continued support and your investment in
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon management’s current beliefs, views, estimates and expectations, including as to the Company’s industry, business strategy, goals and expectations concerning its market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information, including expectations as to future operating profit improvement. Such statements include without limitation those about the Company’s expectations for fiscal 2020, future financial and operating results, projections, expectations and other statements that are not historical facts. All statements regarding targeted and expected benefits of our transformation, the GameStop Reboot plan, capital allocation, profit improvement and cost-savings initiatives, and expected fiscal 2020 results, are forward-looking statements. Forward-looking statements are subject to significant risks and uncertainties and actual developments, business decisions and results may differ materially from those reflected or described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those reflected or described in the forward-looking statements: the uncertain impact, effects and results of pursuit of operating, strategic, financial and structural initiatives, including the GameStop Reboot strategic plan; volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital and credit; the impact of the COVID-19 outbreak on capital markets and our business; our inability to obtain sufficient quantities of product to meet consumer demand, including due to supply chain disruptions on account of trade restrictions, political instability, COVID-19, labor disturbances and product recalls; the timing of release and consumer demand for new and pre-owned products; our ability to continue to expand, and successfully open and operate new stores for our collectibles business; risks associated with achievement of anticipated financial and operating results from acquisitions; our ability to sustain and grow our console digital video game sales; our ability to establish and profitably maintain the appropriate mix of digital and physical presence in the markets we serve; our ability to assess and implement technologies in support of our omnichannel capabilities; the impact of goodwill and intangible asset impairments; cost reduction initiatives, including store closing costs; risks related to changes in, and our continued retention of, executives and other key personnel and our ability to attract and retain qualified employees in all areas of the organization; changes in consumer preferences and economic conditions; increased operating costs, including wages; disruptions to our information technology systems including but not limited to security breaches of systems protecting consumer and employee information or other types of cybercrimes or cybersecurity attacks; risks associated with international operations; increased competition and changing technology in the video game industry; changes in domestic or foreign laws and regulations that reduce consumer demand for, or increase prices of, our products or otherwise adversely affect our business; our effective tax rate and the factors affecting our effective tax rate, including changes in international, federal or state tax, trade and other laws and regulations; the costs and outcomes of legal proceedings and tax audits; our use of proceeds from the sale of our Spring Mobile business; and unexpected changes in the assumptions underlying our outlook for fiscal 2020. Additional factors that could cause our results to differ materially from those reflected or described in the forward-looking statements can be found in
Participants in the Solicitation
The directors, executive officers and certain other members of management and employees of the Company may be deemed “participants” in the solicitation of proxies from stockholders in connection with the matters to be considered at the Annual Meeting. Information regarding the persons who may, under the rules of the
If you have questions about how to vote your shares or need additional copies of the proxy materials, please call the firm assisting us with the solicitation of proxies:
INNISFREE M&A INCORPORATED
Stockholders may call:
1(877) 750-9501 (toll-free from the
+1(412) 232-3651 (from other countries)
IMPORTANT NOTE: Please simply discard any White proxy cards sent to you by
If you have already voted using a White proxy card, you can change your vote by using the enclosed BLUE
proxy card to vote by telephone, Internet or by mail.
Only your latest-dated vote will count.
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/68caf3fc-5781-4510-bf81-67d80aab708d
Source: GameStop Corporation