BEST BUY CO., INC.
1994
FULL-TIME EMPLOYEE NON-QUALIFIED
STOCK OPTION PLAN
A. PURPOSE.
The purpose of this Full-Time Employee Non-Qualified Stock Option Plan
("Plan") is to further the growth and general prosperity of Best Buy Co., Inc.
("Company") by enabling full-time employees of the Company to acquire shares of
the common stock of the Company under the terms and conditions and in the manner
contemplated by this Plan, thereby increasing their personal interest in the
success of the Company and enabling the Company to obtain and retain the
services of such employees. Options granted under the Plan are intended to be
options which do not meet the requirements of Section 422A of the Internal
Revenue Code of 1986, as amended.
B. ADMINISTRATION.
This Plan shall be administered by the Compensation Committee of the
Company's Board of Directors (the "Committee"). Options may not be granted to
any person while serving on the Committee unless approved by a majority of the
disinterested members of the Board of Directors. Subject to such orders and
resolutions not inconsistent with the provisions of this Plan as may from time
to time be issued or adopted by the Board of Directors, the Committee shall have
full power and authority to interpret the Plan and, to the extent contemplated
herein, shall exercise the discretion granted to it regarding participation in
the Plan and the number of shares to be optioned and sold to each participant.
All decisions, determinations and selections made by the Committee
pursuant to the provisions of the Plan and applicable orders and resolutions of
the Board of Directors shall be final. Each option granted shall be evidenced
by a written agreement containing such terms and conditions as may be approved
by the Committee and which shall not be inconsistent with the Plan and the
orders and resolutions of the Board of Directors with respect thereto.
C. ELIGIBILITY AND PARTICIPATION.
Options may be granted under the Plan to any full-time employee of the
Company who is not an officer of the Company. The Committee shall grant to such
participants options to purchase shares in such amounts as the Committee shall
from time to time determine.
D. SHARES SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section E. herein, an aggregate of
750,000 shares of $0.10 par value common stock of the
Company shall be subject to this Plan from authorized but unissued shares of the
Company. Such number and kind of shares shall be appropriately adjusted in the
event of any one or more stock splits, reverse stock splits or stock dividends
hereafter paid or declared with respect to such stock. If, prior to the
termination of the Plan, shares issued pursuant hereto shall have been
repurchased by the Company pursuant to this Plan, such repurchased shares shall
again become available for issuance under the Plan.
Any shares which, after the effective date of this Plan, shall become
subject to valid outstanding options under this Plan may, to the extent of the
release of any such shares from option by termination or expiration of option(s)
without valid exercise, be made the subject of additional options under this
Plan.
E. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
In the event of a merger, consolidation, reorganization, stock dividend,
stock split, or other change in corporate structure or capitalization affecting
the common shares of the Company, an appropriate adjustment shall be made in the
maximum number of shares available to any one individual and in the number,
kind, exercise price, etc., of shares subject to options granted under the Plan
as may be determined by the Committee.
F. TERMS AND CONDITIONS OF OPTIONS.
The Committee shall have the power, subject to the limitations contained
in this Plan, to prescribe any terms and conditions in respect of the granting
or exercise of any option under this Plan and, in particular, shall prescribe
the following terms and conditions:
(1) Each option shall state the number of shares to which it
pertains.
(2) The Committee shall determine the price at which shares shall
be sold to participants hereunder (the "Exercise Price"), provided however
that in no event shall the Exercise Price be less than the fair market
value of the stock as of the date of grant. Payment of the Exercise Price
shall be made at the time the shares are sold hereunder by cash or check
payable to the Company.
(3) An option shall be exercisable in whole or in part (but not as
to less than twenty-five percent of the original aggregate amount of
shares of common stock made subject to the option) with respect to the
shares included therein until the earlier of (a) the close of business on
the tenth day prior to the proposed effective date of (i) any merger or
consolidation of the Company with any other corporation or entity as a
result of which the holders of the common stock
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of the Company will own less than a majority voting control of the
surviving corporation; (ii) any sale of substantially all of the assets of
the Company or (iii) any sale of common stock of the Company to a person
not a stockholder on the date of issuance of the option who thereby
acquires majority voting control of the Company, subject to any such
transaction actually being consummated, or (b) 4:00 p.m., local standard
time, in Minneapolis, Minnesota, on the date four (4) years after the date
the option was granted. The Company shall give written notice to the
optionee not less than 30 days prior to the proposed effective date of any
of the transactions described in (a) above.
(4) Except in the event of death, an option shall be exercisable
with respect to the shares included therein not earlier than the date one
(1) year following the date of grant of the option, nor later than the
date four (4) years following the date of grant of the option, and,
during the first year that the option may be exercised, the optionee may
exercise such optionee's right only to the extent of fifty percent (50%)
of the shares subject to such option.
(5) Except in the event of death, an option may be exercised only
by the optionee while such optionee is, and has continually been, since
the date of the grant of the option, an employee of the Company. If the
continuous employment of an optionee terminates by reason of death, an
option granted hereunder held by the deceased employee may be exercised to
the extent of all shares subject to the option within one (1) year
following the date of death, but in no event later than four (4) years
after the date of grant of such option, by the person or persons to whom
the participant's rights under such option shall have passed by will or by
the applicable laws of descent and distribution.
(6) An option shall be exercised when written notice of such
exercise has been given to the Company at its principal business office by
the person entitled to exercise the option and full payment for the shares
with respect to which the option is exercised has been received by the
Company. Until the stock certificates are issued, no right to vote or
receive dividends or any other rights as a shareholder shall exist with
respect to optioned shares, notwithstanding the exercise of the option.
G. OPTIONS NOT TRANSFERRABLE.
Options under the Plan may not be sold, pledged, assigned or transferred
in any manner, whether by operation of law or otherwise except by will or the
laws of descent, and may be exercised during the lifetime of an optionee only by
such optionee.
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H. AMENDMENT OR TERMINATION OF THE PLAN.
The Board of Directors of the Company may amend this Plan from time to
time as it may deem advisable and may at any time terminate the Plan, provided
that any such termination of the Plan shall not adversely affect options already
granted and such options shall remain in full force and effect as if the Plan
had not been terminated.
I. AGREEMENT AND REPRESENTATIONS OF PARTICIPANTS.
As a condition precedent to the exercise of any option or portion thereof,
the Company may require the person exercising such option to represent and
warrant at the time of any such exercise that the shares are being purchased
only for investment and without any present intention to sell or distribute such
shares if, in the opinion of counsel for the Company, such a representation is
required under the Securities Act of 1933 or any other applicable law,
regulation or rule of any governmental agency.
In the event legal counsel to the Company renders an opinion to the
Company that shares for options exercised pursuant to this Plan cannot be issued
to the optionee because such action would violate any applicable federal or
state securities laws, then in that event the optionee agrees that the Company
shall not be required to issue said shares to the optionee and shall have no
liability to the optionee other than the return to optionee of amounts tendered
to the Company upon exercise of the option.
J. EFFECTIVE DATE AND TERMINATION OF THE PLAN.
The Plan shall be effective as of April 4, 1994 if approved thereafter by
the Shareholders of the Company. The Plan shall terminate on the earliest of:
(1) The date when all the common shares available under the Plan
shall have been acquired through the exercise of options granted under the
Plan; or
(2) Ten (10) years after the date of approval of the Plan by the
Shareholders of the Company; or
(3) Such other earlier date as the Board of Directors of the
Company may determine.
K. FORM OF OPTION.
Options shall be issued in substantially the form as the Compensation
Committee or the Board may approve.
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