Exhibit 10.1
BEST BUY CO., INC.
NON-QUALIFIED STOCK OPTION AND PERFORMANCE SHARE AWARD
AGREEMENT
[Award Date:
October 11, 2004]
I.
The Award . As of the Award Date
set forth in the Award Notification accompanying this award, Best
Buy Co., Inc. grants to you (i) the number of performance
shares of Best Buy common stock set forth in such Award
Notification (the “Performance Shares”) and
(ii) an option to purchase the number of shares of Best Buy
common stock set forth in such Award Notification (the
“Option”) at the option price per share set forth in
such Award Notification, on the terms and conditions contained in
this Non-Qualified Stock Option and Performance Share Award
Agreement (this “Agreement”) and the Best Buy
Co., Inc. 2004 Omnibus Stock and Incentive Plan (the
“Plan”). Capitalized terms not defined in the
body of this Agreement are defined in the Addendum.
II.
Option
2.1
Duration and Exercisability of
Option . You may not exercise
any portion of the Option prior to one year from the Award Date,
and the Option expires 10 years after the Award Date (the
“Expiration Date”). You may exercise the Option
in cumulative installments of 25% on and after each of the first
four anniversaries of the Award Date. The entire Option will
vest earlier and become exercisable upon your Qualified Retirement,
Disability or death or if your employment is terminated without
Cause or you terminate your employment for Good Reason within 12
months following a Change of Control. The Option may only be
exercised by you during your lifetime, and may not be assigned or
transferred other than by will or the laws of descent and
distribution.
2.2
Exercise and Tax
Withholding. The Option may be exercised
in whole or in part by notice to Best Buy (through the Plan
administrator or other means as shall be specified by Best Buy from
time-to-time) stating the number of shares to be purchased under
the Option and the method of payment. The notice must be
accompanied by payment in full of the exercise price for all shares
designated in the notice. Payment of the exercise price may
be made by cash, check or delivery of previously owned shares of
stock having a Fair Market Value (as defined in the Plan) on the
date of exercise equal to the exercise price. The Option will not
be eligible for treatment as a qualified or incentive stock option
for federal income tax purposes. You are liable for any
federal and state income or other taxes applicable upon the grant
or exercise of the Option or the disposition of the underlying
shares, and you acknowledge that you should consult with your own
tax advisor regarding the applicable tax consequences. Upon
exercise of the Option, Best Buy will withhold from the shares that
would otherwise be delivered to you a number of shares having a
fair market value equal to the amount of all applicable taxes
required by Best Buy to be withheld or collected upon the exercise
of the Option, unless your notice of exercise indicates your desire
to satisfy such withholding obligations through the payment of cash
or the delivery of previously acquired shares of Best Buy common
stock, and such cash or shares are delivered to Best Buy promptly
thereafter.
2.3
Retirement, Disability, Death or
Termination. Upon your Qualified
Retirement, you will have one year from the date of your retirement
to exercise the Option. If you die while employed, the
representative of your estate or your heirs will have one year from
the date of your death to exercise the Option. If you become
Disabled, you will have one year from the effective date of such
classification to exercise the Option. If your employment is
terminated by Best Buy or an Affiliate without Cause or if you
resign or otherwise voluntarily terminate your employment with Best
Buy or an Affiliate, you will have 60 days from the date of your
termination to exercise the Option, to the extent the Option had
vested as of your termination date. In no case, however, may
the Option be exercised after the Expiration Date. The Option
may not be exercised following termination of employment for
Cause.
III.
Performance Shares
3.1
Restricted Period
. The
Performance Shares are subject to the restrictions contained in
this Agreement and the Plan during the period (the
“Restricted Period”) beginning on the Award Date and
ending on the third anniversary of the Award Date, subject to the
provisions of Section 3.3 below. The restrictions will
lapse and the Performance Shares will become transferable and
non-forfeitable as of the third anniversary of the Award Date if
the Vesting Criteria set forth in the attached Vesting Criteria
Schedule have been met. If the Vesting Criteria are not
met as of such date, your rights to the Performance Shares will be
immediately forfeited. The Compensation and Human Resources
Committee will determine in its sole discretion whether the Vesting
Criteria are met.
3.2
Restrictions . The Performance
Shares are subject to the following restrictions during the
Restricted Period:
(a)
The Performance
Shares are subject to forfeiture to Best Buy as provided in this
Agreement and the Plan.
(b)
The Performance
Shares may not be sold, assigned, transferred or pledged during the
Restricted Period. You may not transfer the right to receive
the Performance Shares, other than by will or the laws of descent
and distribution, and any such attempted transfer will be
void.
(c)
The Performance
Shares will be issued in your name, either by book-entry
registration or issuance of a stock certificate, and the
certificate will be held by Best Buy. If a certificate is
issued, the certificate may bear an appropriate legend referring to
the restrictions applicable to the Performance Shares.
3.3
Forfeiture/Acceleration
. If your
employment is terminated by reason of death or Qualified Retirement
or you become Disabled prior to the third anniversary of the Award
Date, the restrictions will lapse and the Performance Shares will
become non-forfeitable and transferable as of the date of such
termination . If, prior to the third
anniversary of the Award Date, your employment is terminated
without Cause or you terminate your employment for Good Reason
within 12 months following a Change in Control, the
restrictions will lapse and the Performance Shares will become
non-forfeitable and transferable as of the date of such
termination. If your employment is terminated prior to the
third anniversary of the Award Date for any other reason, your
rights to all of the Performance Shares will be immediately and
irrevocably forfeited.
3.4
Rights . Upon issuance of the
Performance Shares, you will, subject to the restrictions of this
Agreement and the Plan, have all of the rights of a shareholder
with respect to the Performance Shares, unless and until the
Performance Shares are forfeited, except that you will not have the
right to vote the Performance Shares during the Restricted
Period. Any dividends or other distributions (whether cash,
stock, or otherwise) paid on the Performance Shares during the
Restricted Period will be held by Best Buy until the end of the
Restricted Period, at which time Best Buy will pay you all such
dividends and other distributions, plus interest compounded
quarterly based on the prime interest rate, on any cash dividends
or distributions, less any applicable tax withholding
amounts. If the Performance Shares are forfeited as described
in Section 3.3 of this Agreement, then all rights to such
payments will also be forfeited.
3.5
Income Taxes . You are liable for
any federal and state income or other taxes applicable upon the
grant of the Performance Shares if you make an election under
Section 83(b) of the Internal Revenue Code of 1986, as
amended, within 30 days of the date of grant, or upon the lapse of
the restrictions on the Performance Shares, and the subsequent
disposition of the Performance Shares, and you acknowledge that you
should consult with your own tax advisor regarding the applicable
tax consequences. Upon the lapse of the restrictions on the
Performance Shares, Best Buy will withhold from the Performance
Shares the number of Performance Shares having a fair market value
equal to the amount of all applicable taxes required by Best Buy to
be withh
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