The following is a repeat of a memo from Bob Sheffield that was included with
one of your December paychecks.  If you have read it, then delete this message
now; if not, please proceed and take advantage of this benefit if you are
eligible.

Beginning in 1992, the Company is pleased to offer a new financial benefit to
all employees who are currently paying insurance premiums through the Company's
medical and dental health plans.

Under Code 125(d) of the Internal Revenue Code, we can offer a benefit referred
to as a "cafeteria plan."  This plan covers many areas.  The management of this
Company has chosen to make this plan available to all the employees of Atari
Games beginning in 1992 on a modified basis.  If you are currently paying
medical and/or dental insurance premiums through your Company payroll check,
this new financial benefit is available beginning next month.

The Company currently pays for a large portion of your medical and dental
insurance premiums.  The Company will continue to pay these premiums.  The
portion of insurance premium that you may be paying for your spouse or for your
dependents is currently being paid by you using dollars after state and federal
income taxes have been deducted from your gross salary.

This Modified Cafeteria Plan will allow you to use monies from your gross
salary before you are taxed by the state and federal governments.  In this
case, the monies that you use to pay your insurance premiums for health care
coverage through what we call the "Premium Payment Plan" is never subject to
Federal Income Tax, FICA (Social Security) Tax, and most state income taxes.
These taxes are not merely deferred, rather, they are eliminated entirely.  The
bottom line is that you can give yourself a discount on the cost of your health
care thereby increasing your take-home pay.

The insurance premiums will be collected through a reduction of your salary.
Your salary will be reduced before any taxes are withheld, and this amount will
then be used by Atari Games to pay your required premium.

Depending on the amount of insurance premiums you pay (up to $1382) and your
federal and state tax rate (up to 40%), you have a real opportunity to increase
your take-home pay.

Since there is a potential reduction in FICA (Social Security) contributions
you may pay, there could be in rare cases where long term retirement benefits
could be impacted.  Please consult with your legal or tax advisor on this
matter.

We are very pleased about this new employee benefit and after you read the
announcement we hope you will agree and enroll in Atari's Premium Payment Plan.
Complete an enrollment form, available from the Payroll Department, and submit
to Payroll no later than January 9, 1992.