<PAGE>
As filed with the Securities and Exchange Commission
on August 20, 1998
Registration Statement No. 333-
-------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BEST BUY CO., INC.
-------------------------------------------------
(Exact name of issuer as specified in its charter)
Minnesota 41-0907483
--------------------------- ---------------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
7075 Flying Cloud Drive
Eden Prairie, Minnesota 55344
---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Best Buy Co., Inc.
1997 Employee Non-Qualified Stock Option Plan
---------------------------------------------
(Full title of the plan)
Richard M. Schulze
7075 Flying Cloud Drive Copy of communications to:
Eden Prairie, MN 55344
- -----------------------
(Name and address of Anne M. Rosenberg
agent for service) Robins, Kaplan, Miller & Ciresi L.L.P.
2800 LaSalle Plaza
(612) 947-2000 800 LaSalle Avenue
- ----------------------- Minneapolis, MN 55402-2015
(Telephone number, (612) 349-8500
including area code,
of agent for service)
(cover page is continued on next page)
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Title of Proposed Proposed
securities Amount maximum maximum Amount of
to be to be offering price aggregate registration
registered registered (1) per share (2) offering price fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
par value
$.10 per share 11,400,000 $51.75 $589,950,000 $174,035
shares
- --------------------------------------------------------------------------------
</TABLE>
(1) An undetermined number of additional shares may be issued if the
anti-dilution provisions of the Plan become operative.
(2) The shares are to be offered at prices not presently determinable.
Pursuant to Rule 457(h), the offering price is estimated solely for the
purpose of determining the registration fee on the basis of the average
of the high and low sale prices of the Registrant's Common Stock
reported on the New York Stock Exchange on August 13, 1998.
Exhibit Index on Page 10.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
are incorporated in this Registration Statement by reference:
1. Registrant's Annual Report on Form 10-K for the year ended February 28,
1998.
2. All other reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (the "1934 Act") for periods
ended or as of dates subsequent to March 1, 1998.
3. The description of the Registrant's Common Stock contained in its
Registration Statement on Form 8-A filed with the Commission pursuant to
Section 12 of the 1934 Act.
All documents hereafter filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a post-effective
amendment which indicates that all the securities offered hereby have been sold
or which deregisters all securities then remaining unsold, shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of filing
such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Elliot S. Kaplan, a director and Secretary of the Registrant, is also a
member of the law firm of Robins, Kaplan, Miller & Ciresi L.L.P., which will be
rendering an opinion as to the legality of the securities being registered.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is subject to the Minnesota Business Corporation Act,
Minnesota Statutes, Chapter 302A. Minnesota Statutes, Section 302A.521,
provides that a corporation shall indemnify any person made or threatened to be
made a party to a proceeding by reason of the former or present official
capacity of such person against judgments, penalties, fines, including, without
limitation, excise taxes assessed against such person with respect to an
employee benefit plan, settlements and reasonable expenses, including attorneys'
fees and disbursements, incurred by such person in connection with the
proceeding, if, with
3
<PAGE>
respect to the acts or omissions of such person complained of in the proceeding,
such person (1) has not been indemnified therefor by another organization or
employee benefit plan; (2) acted in good faith; (3) received no improper
personal benefit and Section 302A.255 (with respect to director conflicts of
interest), if applicable, has been satisfied; (4) in the case of a criminal
proceeding, had no reasonable cause to believe the conduct was unlawful; and (5)
reasonably believed that the conduct was in the best interests of the
corporation in the case of acts or omissions in such person's official capacity
for the corporation, or reasonably believed that the conduct was not opposed to
the best interests of the corporation in the case of acts or omissions in such
person's official capacity for other affiliated organizations.
In addition, the Registrant's Articles of Incorporation provide that a
director of the Registrant shall not be personally liable to the Registrant or
its shareholders for monetary damages for breach of fiduciary duty as a director
except for liability (1) for any breach of the director's duty of loyalty to the
Registrant or its shareholders; (2) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (3) for
paying a dividend or approving a stock repurchase in violation of Minnesota
Statutes, Section 302A.551; (4) for violating the securities registration or
anti-fraud provisions of Minnesota Statutes, Section 80A.23; (5) for any
transaction from which the director derived an improper personal benefit; or (6)
for acts or omissions occurring prior to the date when the relevant provision of
the Articles of Incorporation became effective. The Articles of Incorporation
do not limit directors' liability for violations of the federal securities laws.
The Articles of Incorporation are consistent with the Minnesota Business
Corporation Act and if such Act is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Registrant would be eliminated or limited to the fullest
extent permitted by Minnesota law.
As of September 1, 1997, the Registrant obtained a Directors' and Officers'
Liability Insurance Policy, with coverage of $30 million, subject to various
deductibles and exclusions from coverage. There is no coverage for liabilities
arising in connection with the filing of a registration statement by the
Registrant under the Securities Act of 1933 (the "1933 Act") or under any
underwriting agreement entered into in connection with a public offering of
securities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
4
<PAGE>
ITEM 8. EXHIBITS.
The following are filed as exhibits to this Registration Statement:
<TABLE>
<CAPTION>
Exhibits
--------
<S> <C>
4.1 Amended and Restated Articles of Incorporation of the
Registrant, as amended, defining the rights of holders of
its Common Stock (as filed herewith and as incorporated
by reference to Exhibit 3.1 filed as part of the
Registrant's Annual Report on Form 10-K for the fiscal
year ended February 26, 1994 [File No. 1-9595]).
4.2 Amended and Restated By-Laws of the Registrant, as amended,
defining the rights of holders of its Common Stock
(incorporated by reference to Exhibit 4.2 filed as part of
the Registrant's Registration Statement on Form S-3 [Reg.
No. 33-43065]; Exhibit 3.1 filed as part of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended November
30, 1991 [File No. 1-9595]; Exhibit 3.3 filed as part of
the Registrant's Annual Report on Form 10-K for the fiscal
year ended February 25, 1995 [File No. 1-9595] and Exhibit
3.3 filed as part of the Registrant's Annual Report on
Form 10-K for the fiscal year ended March 1, 1997 [File No.
1-9595]).
4.3 Best Buy Co., Inc. 1997 Employee Non-Qualified Stock Option
Plan, as amended.
5 Opinion of Robins, Kaplan, Miller & Ciresi L.L.P. as to the
shares of Common Stock being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Robins, Kaplan, Miller & Ciresi L.L.P.
(contained in their opinion filed as Exhibit 5).
24 Power of Attorney (included on signature page hereto).
</TABLE>
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
a. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
i. to include any prospectus required by Section 10(a)(3) of the
1933 Act;
5
<PAGE>
ii. to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and
iii. to include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
PROVIDED, HOWEVER, that paragraphs (i) and (ii), above, do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the 1934
Act that are incorporated by reference in this Registration Statement;
b. That, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
c. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering;
d. That, for purposes of determining any liability under the 1933
Act, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the 1934 Act that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
e. Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being
6
<PAGE>
registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
1933 Act and will be governed by the final adjudication of such issue.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Eden Prairie, State of Minnesota, on this 19th
day of August, 1998.
BEST BUY CO., INC.
By: /s/ Richard M. Schulze
--------------------------------
Richard M. Schulze
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints RICHARD
M. SCHULZE and ALLEN U. LENZMEIER, and each of them, his true and lawful
attorneys-in-fact and agents, each acting alone, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to the Registration Statement on Form S-8 and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, each acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, each acting alone, or his substitute or substitutes, may lawfully do or
cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on August 19, 1998.
Signature Title
- --------- -----
/s/ Richard M. Schulze Chairman, Chief Executive Officer
- ------------------------ (principal executive officer) and Director
Richard M. Schulze
/s/ Allen U. Lenzmeier Executive Vice President and Chief
- ------------------------ Financial Officer (principal financial
Allen U. Lenzmeier officer)
/s/ Robert C. Fox Senior Vice President-Finance and
- ------------------------ Treasurer (principal accounting
Robert C. Fox officer)
8
<PAGE>
/s/ Bradbury H. Anderson Director
- ------------------------
Bradbury H. Anderson
/s/ Culver Davis, Jr. Director
- ------------------------
Culver Davis, Jr.
Director
- ------------------------
Yvonne R. Jackson
/s/Elliot S. Kaplan Director
- ------------------------
Elliot S. Kaplan
/s/ Frank D. Trestman Director
- ------------------------
Frank D. Trestman
Director
- ------------------------
Hatim A. Tyabji
Director
- ------------------------
James C. Wetherbe
9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS
- --------
<S> <C>
4.1 Amended and Restated Articles of Incorporation of the Registrant,
as amended, defining the rights of holders of its Common Stock
(as filed herewith and as incorporated by reference to Exhibit
3.1 filed as part of the Registrant's Annual Report on Form
10-K for the fiscal year ended February 26, 1994 [File No.
1-9595]).
4.2 Amended and Restated By-Laws of the Registrant, as amended,
defining the rights of holders of its Common Stock (incorporated
by reference to Exhibit 4.2 filed as part of the Registrant's
Registration Statement on Form S-3 [Reg. No. 33-43065]; Exhibit
3.1 filed as part of the Registrant's Quarterly Report on Form
10-Q for the quarter ended November 30, 1991 [File No. 1-9595];
Exhibit 3.3 filed as part of the Registrant's Annual Report
on Form 10-K for the fiscal year ended February 25, 1995 [File
No. 1-9595] and Exhibit 3.3 filed as part of the Registrant's
Annual Report on Form 10-K for the fiscal year ended March 1,
1997 [File No. 1-9595]).
4.3 Best Buy Co., Inc. 1997 Employee Non-Qualified Stock Option Plan,
as amended.
5 Opinion of Robins, Kaplan, Miller & Ciresi L.L.P. as to the
shares of Common Stock being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Robins, Kaplan, Miller & Ciresi L.L.P. (contained in
their opinion filed as Exhibit 5).
24 Power of Attorney (included on signature page hereto).
</TABLE>
10
<PAGE>
ARTICLES OF AMENDMENT OF
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
BEST BUY CO., INC.
WE, THE UNDERSIGNED, being officers of Best Buy Co., Inc., a Minnesota
corporation subject to the provisions of Minnesota Statutes, Chapter 302A, of
the Minnesota Business Corporation Act, do hereby certify that the resolutions
as hereinafter set forth were adopted on the 25th day of June, 1998, by the
affirmative vote of the holders of a majority of the voting power of the shares
present and entitled to vote:
RESOLVED:
The Shareholders of this corporation do hereby amend Article IV of the
corporation's Amended and Restated Articles of Incorporation to read as
follows:
ARTICLE IV
CAPITAL
The aggregate number of shares of all classes of stock which this
corporation shall have the authority to issue is Four Hundred Million
Four Hundred Thousand (400,400,000) shares consisting of:
(1) 400,000,000 shares of Common Stock, par value of $.10 per share;
and
(2) 400,000 shares of Preferred Stock, par value of $1.00 per share.
The holders of shares of Common Stock shall have one vote for each
share of Common Stock held of record on each matter submitted to the
holders of shares of Common Stock.
RESOLVED
FURTHER:
The Chairman and Chief Executive Officer and the Secretary of this
corporation shall be, and they each hereby are, authorized, empowered and
directed to make, execute and acknowledge such document(s) as may be
required by Minnesota Statutes, Chapter 302A, to reflect this amendment to
the Amended and Restated Articles of Incorporation and to cause such
document to be filed for record in the manner required by law.
/s/ Richard M. Schulze
-----------------------------------------
Richard M. Schulze
Chairman and Chief Executive Officer
/s/ Elliot S. Kaplan
-----------------------------------------
Elliot S. Kaplan
Secretary
<PAGE>
BEST BUY CO., INC.
SECOND AMENDED AND RESTATED
1997
EMPLOYEE NON-QUALIFIED
STOCK OPTION PLAN
A. PURPOSE.
The purpose of this 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 current key employees of the Companies, who have been
or will be given responsibility for the administration of the affairs of the
Companies and upon whose judgment, initiative and effort the Companies were or
are largely dependent for the successful conduct of their business, 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
involvement in 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 (the "Code").
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 (i) key executive personnel,
including officers, senior management employees and members of the Board who are
employees of any of the Companies; (ii) staff management employees, including
managers, supervisors, and their functional equivalents for: warehousing,
service, merchandising, leaseholds, installation, and finance and
administration; (iii) line management employees, including retail store and
field managers, supervisors and their functional equivalents; and (iv) any
employee having served the Companies continuously
<PAGE>
for a period of not less than ten (10) years. 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
20,000,000 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 (a) if payment is made by check payable to the Company, at the time
the shares are sold hereunder, or (b) if payment is made pursuant to an
irrevocable election to surrender 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,
no later than the settlement date for the shares sold in the market to
cover the Exercise Price, or (c) by a combination thereof, UNLESS an option
is exercised in connection with a deferral election pursuant to the
Deferred Compensation Plan, defined below, in which case payment of the
Exercise Price shall be made as provided in Section N. herein.
2
<PAGE>
(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 UNLESS the optionee is precluded,
pursuant to the Deferred Compensation Plan, defined below, from exercising
the minimum portion of the option because the optionee is unable to deliver
enough shares of common stock to cover the full Exercise Price therefor, in
which case the optionee may exercise the option 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 second through fourth
years following the date of grant, the optionee may exercise such
optionee's right to acquire only twenty-five percent (25%) of the shares
subject to such option together with any shares that the optionee had
previously been able to acquire; 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 as 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
3
<PAGE>
deceased employee'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
4
<PAGE>
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 become effective as of April 18, 1997, if approved
thereafter by the Company's shareholders. 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
Company's shareholders; 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. DEFERRAL OF OPTION GAIN.
Participants in the Company's Deferred Compensation Plan, effective as of
April 1, 1998 (the "Deferred Compensation Plan"), may be able to defer the gain,
if any, upon exercise of options
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granted hereunder pursuant to and in accordance with the terms of the
Deferred Compensation Plan. The Deferred Compensation Plan provides, among
other things, that to defer any gain with respect to an option, the Exercise
Price must be satisfied utilizing shares of the Company's common stock held
at least six months prior to exercise. In the event any deferral election is
made with respect to an option, if the optionee is unable to deliver the
requisite number of shares of the Company's common stock to cover the full
Exercise Price prior to the expiration of such option, the portion of the
option that corresponds to the portion of the full Exercise Price not covered
shall be forfeited.
O. FORM OF OPTION.
Options shall be issued in substantially the form as the Committee or the
Board may approve.
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August 19, 1998
Best Buy Co., Inc.
7075 Flying Cloud Drive
Eden Prairie, MN 55344
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-8 (the
"Registration Statement") of even date herewith of Best Buy Co., Inc., a
Minnesota corporation (the "Company"), relating to a proposed public offering of
an additional 11,400,000 shares of the Company's common stock, par value $.10
per share (the "Common Stock"), pursuant to the Best Buy Co., Inc. 1997 Employee
Non-Qualified Stock Option Plan, as amended, we, as counsel for the Company,
have examined such corporate records and other documents, including the
Registration Statement, and have reviewed such matters of law as we have deemed
relevant hereto, and, based upon such examination and review, it is our opinion
that all necessary corporate action on the part of the Company has been taken to
authorize the issuance and sale of an additional 11,400,000 shares of Common
Stock by the Company, and that when issued and sold as contemplated in the
Registration Statement, such shares will be validly issued, fully paid and
nonassessable.
We hereby consent to being named in the Registration Statement, and in the
Prospectus related thereto, as counsel for the Company who have passed upon
legal matters in connection with the issuance of the Common Stock. We further
consent to the filing of this opinion as an exhibit to the Registration
Statement.
Yours very truly,
/s/ Robins, Kaplan, Miller & Ciresi L.L.P.
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Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Best Buy Co., Inc. 1997 Employee Non-Qualified
Stock Option Plan of our report dated March 31, 1998, with respect to the
consolidated financial statements of Best Buy Co., Inc. incorporated by
reference in its Annual Report (Form 10-K) for the year ended February 28,
1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
August 17, 1998
