Exhibit 10.7
BEST BUY CO., INC.
1994
FULL-TIME EMPLOYEE NON-QUALIFIED
STOCK OPTION PLAN
1998 AMENDMENT AND RESTATEMENT
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.
(the "Company"), and its directly and indirectly wholly-owned subsidiaries
(collectively, the "Companies") by enabling full-time employees of the Companies
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 Companies and enabling the Companies 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 and Human Resources
Committee (the "Committee") of the Company's Board of Directors (the "Board").
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. 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, 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 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 with respect thereto.
C. ELIGIBILITY AND PARTICIPATION.
Options may be granted under the Plan to any full-time employee of the
Companies who is not an officer of the Companies. 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
1,500,000 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 stock of the Company, an appropriate adjustment may be made
in the number and kind of shares subject to and the exercise prices of options
granted under the Plan as 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 price at which shares shall be sold to participants
hereunder (the "Exercise Price") shall be the Fair Market Value of the
Company's common stock on the date of grant. Payment of the Exercise
Price shall be made at the time the shares are sold hereunder by check
payable to the Company, or by surrender of outstanding shares of common
stock of the Company which have a Fair Market Value on the date of
surrender equal to the Exercise Price of the shares as to which the
option is being exercised, or by a combination thereof.
(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 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 Companies or (iii) any sale of common stock of
the Company to a person not a shareholder 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) the
close of business on the date ten (10) 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 disability, death or normal
retirement, 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 ten (10) years
following the date of grant of the option; provided, however, that
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; and provided further,
however, that in the event of a change in status of an employee from
full-time to part-time or seasonal, such employee shall continue to
have the right to exercise an option following such change in status
but only to the extent of the shares available for acquisition on the
date of such change in status (the "Change in Status Date").
(5) Except in the event of disability, death or normal
retirement, 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 any of the Companies; provided, however,
that a former employee shall continue to have the right to exercise an
option for a period of thirty (30) days following such termination to
the extent of the shares available for acquisition on the date of such
former employee's termination. If the continuous employment of an
optionee terminates by reason of disability, death or normal
retirement, an option granted hereunder held by the disabled, deceased
or retired employee may be exercised to the extent of all shares
subject to the option (or, with respect to a disabled, deceased or
retired part-time or seasonal employee, to the extent of the shares
available for acquisition on the Change in Status Date) within one (1)
year following the date of disability or death or five (5) years
following the date of normal retirement, but in no event later than ten
(10) years after the date of grant of such option, by the disabled or
retired employee or 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. For purposes of this Plan only, (a)
an employee shall be deemed "disabled" if the employee is unable to
perform his or her usual duties for the Companies as a result of
physical or mental disability, and such inability to perform continues
or is expected to continue for at least twelve (12) consecutive months,
and (b) "normal retirement" shall mean retirement on or after age 60 so
long as the employee has served the Companies continuously for at least
the three (3) years immediately preceding retirement. Notwithstanding
the foregoing, the changes made in Sections F(4) and (5) pursuant to
the amendments hereto adopted on April 24, 1998 (relating to the
vesting of
options in the event of normal retirement), shall be effective only for
options granted hereunder on and after April 24, 1998.
(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.
H. AMENDMENT OR TERMINATION OF THE PLAN.
The Board 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 OPTIONEES.
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 is effective as of April 4, 1994. The Plan shall terminate on
the earliest of:
(1) The date when all the 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 may determine.
K. WITHHOLDING TAXES.
The Companies shall have the right to take any action that may be
necessary in the opinion of the Companies to satisfy all obligations for the
payment of any federal, state or local taxes of any kind, including FICA taxes,
required by law to be withheld with respect to the exercise of an option granted
hereunder. If stock is withheld or surrendered to satisfy tax withholding, such
stock shall be the Fair Market Value of the Company's common stock on the date
of exercise.
L. FAIR MARKET VALUE.
"Fair Market Value" shall mean the last reported sale price of the
Company's common stock on the date of grant, as quoted on by the New York Stock
Exchange. If the Company's common stock ceases to be listed for trading on the
New York Stock Exchange, "Fair Market Value" shall mean the value determined in
good faith by the Board.
M. COMPLIANCE WITH RULE 16B-3 AND SECTION 162(M).
With respect to employees subject to Section 16 of the Securities
Exchange Act of 1934, as amended, or Section 162(m) of the Code, transactions
under the Plan are intended to comply with all applicable conditions of such
Rule 16b-3 and avoid loss of the deduction referred to in paragraph (1) of such
Section 162(m). Anything in the Plan to the contrary notwithstanding, to the
extent any provision of the Plan or action by the Committee fails to so comply
or avoid the loss of such deduction, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
N. FORM OF OPTION.
Options shall be issued in substantially the form as the Committee or
the Board may approve.