GameStop 2006 Annual Report Download - page 37

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in December 2005. Before the hearing on the summary judgment motion, the parties agreed to attempt to resolve the
matter without further litigation. The matter now has been resolved and both the District Court and Second Circuit
proceedings have been dismissed with prejudice. The settlement did not have a material impact on the Company’s
financial position or results of operations.
On February 14, 2005, and as amended, Steve Strickland, as personal representative of the Estate of Arnold
Strickland, deceased, Henry Mealer, as personal representative of the Estate of Ace Mealer, deceased, and Willie
Crump, as personal representative of the Estate of James Crump, deceased, filed a wrongful death lawsuit against
GameStop, Sony, Take-Two Interactive, Rock Star Games and Wal-Mart (collectively, the “Defendants”) and Devin
Moore in the Circuit Court of Fayette County, Alabama, alleging that Defendants’ actions in designing, manu-
facturing, marketing and supplying Defendant Moore with violent video games were negligent and contributed to
Defendant Moore killing Arnold Strickland, Ace Mealer and James Crump. Plaintiffs are seeking damages of
$600 million under the Alabama wrongful death statute and punitive damages. GameStop and the other defendants
intend to vigorously defend this action. The Defendants filed a motion to dismiss the case on various grounds, which
was heard in November 2005 and was denied. The Defendants appealed the denial of the motion to dismiss and on
March 24, 2006, the Alabama Supreme Court denied the Defendants’ application. Discovery is proceeding.
Mr. Moore was found guilty of capital murder in a criminal trial in Alabama and was sentenced to death in August
2005. We do not believe there is sufficient information to estimate the amount of the possible loss, if any, resulting
from the lawsuit.
On April 18, 2006, former and current store managers Charles Kohler, James O. Little, III, Jason Clayton, Nick
Quintois, Kirk Overby and Amy Johnson (collectively the “plaintiffs”) filed a complaint against the Company in the
U.S. District Court for the Eastern District of Louisiana, alleging that GameStop’s salaried retail managers were
misclassified as exempt in violation of the FLSA and should have been paid overtime. The plaintiffs sought to
represent all current and former salaried retail managers who were employed by GameStop (as well as a subsidiary
of EB) for the three years before April 18, 2006. The Company filed a motion to dismiss, transfer or stay the case
based on the pendency of a prior action. After the parties fully briefed the motion but were still awaiting the court’s
decision, they negotiated a settlement of the plaintiffs’ individual claims. In November 2006, the court approved the
settlement and the case has been dismissed. The settlement did not have a material impact on the Company’s
financial position or results of operations.
In the ordinary course of our business, the Company is, from time to time, subject to various other legal
proceedings. Management does not believe that any such other legal proceedings, individually or in the aggregate,
will have a material adverse effect on the Company’s operations or financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the 14 weeks ended February 3, 2007.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Price Range of Common Stock
The Company’s Class A common stock is traded on the New York Stock Exchange (“NYSE”) under the
symbol “GME”. The Company’s Class B common stock was traded on the NYSE under the symbol “GME.B” until
February 7, 2007 when, immediately following approval by a majority of the Class B common stockholders in a
Special Meeting of the Company’s Class B common stockholders, all outstanding Class B common shares were
converted into Class A common shares on a one-for-one basis.
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