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2010 Employee Stock Purchase Plan (ESPP) Guide

 2010 EMPLOYEE STOCK
PURCHASE PLAN (ESPP)

W H AT ’ S I N S I D E
Welcome...............................................................................................................................1
Eligibility ...............................................................................................................................1
ESPP At A Glance ..................................................................................................................2
Easy Access To ESPP Info ........................................................................................................3
ESPP Lingo ............................................................................................................................3
Making Contributions..........................................................................................................4 - 5
Purchasing Best Buy Stock ...................................................................................................6 - 7
Purchased Stock.....................................................................................................................8
Disposition Of ESPP Stock .......................................................................................................8
Tax Implications Of Disposing Your ESPP Stock ..........................................................................9
Investment Return vs. Risk ......................................................................................................10
How To Enroll And Make Changes To Your Account ...............................................................11
Enrollment Tips.....................................................................................................................12
For Questions ......................................................................................................................12
Best Buy’s Securities Trading Policy ........................................................................................13
 OWN THE STORE!

THE BEST BUY EMPLOYEE STOCK PURCHASE PLAN

As a member of the Best Buy team, you are eligible to participate in the Best Buy Employee
Stock Purchase Plan, also known as the “ESPP.” The ESPP is an investment program that allows
you to purchase Best Buy stock at a discount through automatic payroll deductions. This
brochure describes the ESPP and all of the things that make it a great deal for our employees.

There’s something else that you should know about the ESPP. Something you won’t find in a
prospectus. With the Best Buy ESPP, you actually get to own the store. Think about it for a
minute. When you come to work at Best Buy, you are making an investment. You invest your

WELCOME
time, your talent and your creative energy in the work you do each day. When you own
stock, you have a personal stake in Best Buy and get to share in the future of the Company!

We encourage you to review this guide to see if the ESPP is right for you. As with any
investment program, we also recommend that you consult with your tax or financial advisor
before enrolling.
1

WELCOME
ELIGIBILITY
Full-time and part-time Best Buy employees* are eligible to participate in the ESPP the first
of the month coincident with or following 60 days of continuous, active employment with
Best Buy or its designated subsidiaries.

*Any employee who typically works less than 20 hours per week or for not more than five months in any calendar year, or
would own 5 percent or more of Best Buy common stock after a grant of an option to purchase shares under the ESPP, is not
eligible to participate in the Plan.

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 E S P P AT A G L A N C E

Choice
You get to choose your contribution level, anywhere from 1 percent to 20 percent of your gross eligible compensation.

Convenience
You contribute to the ESPP through payroll deductions and stock is automatically purchased in your name
every six months.

Discount
ESPP stock is purchased for you at a 15 percent discount, and this discount is applied to the lower of the stock
E S P P AT A G L A N C E

price at the beginning or the end of the six-month offering period. This means your discount may be much
larger than 15 percent (see page 6 for an example).

Flexibility
You can increase your contribution percentage prior to each offering period, decrease it one time during an
offering period or end your participation at any time.

Accessibility
Aside from a few brief “freeze” periods, you can sell previously purchased stock from your account at any time
and can withdraw your contribution from the ESPP prior to the next stock purchase date. Just be sure to comply
2 with securities laws and Best Buy’s own Securities Trading Policy (see page 13) when selling Best Buy stock.
E S P P AT A G L A N C E

Immediate ownership
Once stock is purchased for you, you own it. There are no vesting requirements.

Portability
You can take your stock with you if you leave Best Buy. It’s yours!

Easy account access

Up-to-date, personalized account information is available on the Web and by phone. Plus, you receive printed
statements following each purchase and stock transaction.

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EASY ACCESS TO ESPP

Web Telephone
• eGO HR Support Center website • If you don’t have online access, call the eGO
w or HR Support Center at 1-866-MY-BBY-HR
www.eGOfromAnywhere.com (1-866-692-2947).
or
www.mybbyrewards.com > My Stock (LTIP) Representatives are available between the hours
& Employee Stock Purchase (ESPP) of 5 p.m. Sunday and midnight Friday Eastern Time,
excluding holidays of the New York Stock Exchange.

ACCESS TO ESPP
ESPP Capital gain
Profit from the disposition of a capital asset, such as stock. Capital gains may be
LINGO
short-term (held for 12 months or less) or long-term (held for more than 12 months).

Capital loss
Loss from the disposition of a capital asset, such as stock. To establish a net position 3
for tax purposes, capital losses are used to offset capital gains.

ESPP LINGO
Cost basis
Your cost basis in your stock is your purchase price, plus ordinary taxable income,
plus fees upon disposition.

Dispose, disposing or disposition

The sale, exchange, gift or other transfer of title of Company stock.

Disqualifying disposition
A disqualifying disposition occurs if stock purchased under an ESPP is disposed
during a holding period, which continues for two years after the grant of the
purchase right and one year after its actual purchase.

Fair Market Value

The daily value of the Company stock, defined as the last reported sale price for
a given day as quoted on the New York Stock Exchange (NYSE).

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 MAKING CONTRIBUTIONS
Once enrolled, you can contribute 1 percent to 20 percent of your gross eligible compensation to the ESPP.
Payroll deductions will be taken from each paycheck on an after-tax basis. No cash contributions outside of
these payroll deductions are allowed and ESPP contributions that accumulate during the six-month offering
period do not earn interest.

Example
Let’s say an employee elects to contribute 5 percent of their gross eligible compensation to the ESPP. Here
is how that employee’s ESPP contribution is calculated:

Gross eligible compensation per paycheck* $1,000

ESPP contribution percentage x 5%

CONTRIBUTIONS

ESPP dollar contribution each pay period $50

ESPP semi-annual contribution ($50 X 13 pay periods) $650

*Compensation for ESPP purposes is defined as the cash compensation you receive from Best Buy, including salary, wages, overtime
pay, commissions, shift differentials, and sick, vacation, holiday and shutdown pay, unless the Plan Administrator specifically excludes
it. However, it excludes non-cash compensation, fringe benefits, employee discounts, expense reimbursement or allowances, long-
term disability payments, workers’ compensation payments, welfare benefits, and company contributions to benefit plans and income
from company stock plans.

Remember, your take-home pay will be reduced by the amount of your ESPP contributions. In this example,
4
the employee would have $50 fewer in each paycheck. Please note that this is only an example and is not
a recommendation of how much to contribute to the ESPP.
CONTRIBUTIONS

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WHEN CONTRIBUTIONS BEGIN
There are two ESPP offering periods each year—one begins on the first Friday in April and the other on the
first Friday in October. There are also two ESPP enrollment periods each year—one in March and the other
in September. Once you enroll, your payroll deductions will begin at the start of the next offering period.

Changing Your Contribution Percentage

Increasing Your Contribution

Let’s say Best Buy’s future is looking pretty good and you want to catch the wave. You can increase your
contribution percentage, but it will not take effect until the next offering period. Said another way, you cannot
increase your ESPP contribution percentage for the offering period you are already in, only future offering
periods. Also, contribution increases must be made during the semi-annual enrollment periods.

CONTRIBUTIONS
Decreasing Your Contributions
Concerned that money could get tight after you enroll? No worries. You can reduce your ESPP contribution
percentage one time during any given offering period. Contribution percentages must be stated in whole
percentages and the minimum contribution level is an even 1 percent. Contribution reductions must be made
at least 20 days before the end of the offering period to ensure that your request can be processed in time
for the current offering period*. If you decide to decrease your participation in the ESPP, the change will take
effect as soon as administratively possible—typically within one or two paychecks.

5
Stopping or Withdrawing Your Contributions
Car broke down. There’s a ‘59 Stratocaster on eBay. You’re planning your dream vacation. Here again,

CONTRIBUTIONS
no worries. You can stop your ESPP contributions at any time and decline to participate for the remainder
of the current offering period. You will receive a refund in your paycheck as soon as possible—typically within
one or two paychecks—for any contributions made during that offering period. No stock will be purchased
for you when the offering period ends and you will not collect any interest for the time your money was in the
ESPP. As with contribution increases and decreases, withdrawals from the ESPP must be made at least 20 days
before the end of the offering period*.

*Unless otherwise provided by the Plan Administrator.

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 T H E 15 P E R C E N T D I S C O U N T
The ESPP applies a 15 percent discount to the lower of the stock price at the beginning or end of the six-month
offering period.

Assume:
• On the first day of the offering period, Best Buy stock is $40 per share.

• On the last day of the offering period, the stock price is $50 per share. Since the $40 stock price at the
beginning of the offering period is lower than the $50 stock price at the end of the same offering period, the
15 percent discount would be applied to the $40 price. This results in an actual purchase price of $34 per
share of stock.
PURCHASING STOCK

Lower of the stock price on first day or last day of offering period $40.00
Less 15% Discount - 6.00
Discounted stock purchase price $34.00

On the purchase date in this example, the current price of Best Buy stock is actually $50 per share. So,
you are really buying the stock at about a 32 percent discount from its current price ($34 = 68% of $50).
As shown below, the same would happen if Best Buy’s stock price declined from $50 to $40 during the
offering period. With the ESPP, your minimum discount is 15 percent.

6
PURCHASING STOCK

The stock prices used in this example are for illustrative purposes only. No one can predict what the price of Best Buy stock will be in the future. In addition,
past performance of Best Buy stock is not an indication of future results. All amounts shown in this guide are expressed in United States dollars.

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PURCHASING BEST BUY STOCK
As long as you are a participating and eligible employee, your accumulated payroll deductions will be used
to purchase Best Buy stock on the last day of the six-month offering period.

Your accumulated payroll deductions are divided by the discounted stock purchase price. The number that
results is the number of whole and fractional shares of stock purchased for you.

Your shares are then deposited into an account on your behalf approximately 7 to 10 days following the last
day of an offering period. Let’s say an employee contributes $650 to the ESPP and the discounted stock purchase
price is $34. Here is how the employee’s ESPP purchase is calculated:

ESPP semi-annual contributions $650

PURCHASING STOCK
Discounted stock purchase price $34.00
Number of Best Buy shares purchased 19.1176

ESPP limits
There are limits on the amount of stock you can purchase through the ESPP:

• The Internal Revenue Code limits the amount of stock that any ESPP participant can purchase in a single
calendar year. The stock cannot exceed a total value of $25,000 based on the “Fair Market Value” (see
the “ESPP Lingo” table on page 3) at the beginning of an offering period.

• The Plan limits the number of shares of stock that any ESPP participant can purchase in a single calendar 7

year to 10,000 shares.

PURCHASING STOCK
C H A N G E S I N E M P L O Y M E N T S TAT U S
If your employment status changes from full-time or part-time to occasional/seasonal or temporary,
or if your Best Buy employment ends during an offering period, any ESPP payroll deductions you
have made during that offering period will be refunded in your paycheck as soon as administratively
possible (typically within one to two paychecks). No stock will be purchased for you when the offering
period ends.

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 W H AT H A P P E N S T O T H E S T O C K A F T E R I T ’ S P U R C H A S E D
After the stock is purchased, it is held in an ESPP account—in your name—by Best Buy’s ESPP administrator.
Your account gives you the same ownership rights as a stock certificate. You can hold your stock indefinitely
as an investment, or you can dispose of some or all of it. Shortly after each offering period, you will
receive a statement for your ESPP account in the mail. You can also go to eGO or mybbyrewards.com to
view this information.

Stock splits
In the event of a stock split or reverse stock split, the stock reserved under the ESPP will be adjusted
proportionately. For any other change affecting Best Buy Common Stock, the Board of Directors of the
PURCHASING/SELLING

Company will make any necessary adjustments.

Dividends
Dividends are periodic payments made by the Company to shareholders. If the Board of Directors declares
a dividend, you will be entitled to cash dividends on the shares of stock you own on the dividend record
date. Best Buy’s ESPP administrator will deposit the dividend in your ESPP account as cash.

DISPOSITION OF ESPP STOCK

You can “dispose” of your stock (see the “ESPP Lingo” table on page 3) at any time after the purchase date.
Stock can be disposed of during the New York Stock Exchange trading hours, using market or limit orders.
8
A market order is an order to sell your stock at the current market price. Limit orders allow you to set the
price at which your shares are sold. If the price of the stock reaches or exceeds your specified price after
PURCHASING/SELLING

you place your limit order, the order will be executed automatically by Best Buy’s ESPP administrator.

IF YOU... THEN...

Place an order prior to 2:45 p.m. Central Time Your order will be sent to market that day.

Place an order on or after 2:45 p.m. Central Time Your order will be processed during the next
available trading day.

• Due to market fluctuation, the actual price you receive may differ from your limit price or quoted price.

• Disposing of your stock does not prevent you from participating in future offering periods.

• Employees in Canada are entitled to sell their Best Buy shares through an exchange or market outside of
Canada, or to a person or company outside of Canada, but are precluded by law from knowingly selling
their shares to a person or company in Canada.

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TA X I M P L I C AT I O N S O F D I S P O S I N G Y O U R E S P P S T O C K
There are tax implications to disposing of your stock. While you should seek the advice of your personal
tax or financial advisor for specific information, here are some facts to keep in mind:

• State and local taxes vary, and all taxes are subject to change.

• The market price of the stock on the date you dispose of it, compared with your cost basis in the stock,
will determine whether or not you have a gain or loss on the disposition.

• The way in which your disposal of the stock is taxed will depend on how long you have held the stock and
the amount you receive on the sale.

To receive favorable tax treatment, you must hold your stock for at least 18 months from the stock purchase

TA X I M P L I C AT I O N S
date. Best Buy will not withhold taxes from the disposition of stock; however, Best Buy’s ESPP administrator will
be required to withhold if you have not certified your tax status (see page 12). It’s your responsibility to report
the disposition of your stock on your tax return and to report the appropriate portion as ordinary taxable
income. In addition, Best Buy will report any income related to disqualifying dispositions on your W-2.

IF YOU… WITHIN… THEN…

Dispose of your stock 18 months from the stock
purchase date
You must include as ordinary taxable
income:
The amount by which the Fair Market Value of the
stock on the date it was purchased exceeds your
purchase price for the stock. 9

You must include as capital gain (or

TA X I M P L I C AT I O N S
loss):
Any additional gain (or loss) realized on the
disposition of the stock.

IF YOU… AFTER… THEN…

Dispose of your stock 18 months or more have
passed since the stock
purchase date
You must include as ordinary taxable
income the lesser of:
15% of the Fair Market Value of stock on the
first day of the Offering Period in which it was
purchased, OR
The amount, if any, by which the Fair Market
Value of the stock on the date you dispose of it
exceeds your purchase price for the stock.

You must include as a capital gain

(or loss):
Any additional gain (or loss) realized on the
disposition of the stock.

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 INVESTMENT RETURN VS. RISK
As with any investment, you hope to make more money than you invest. This is your return. However, there
is a chance that the value of your original investment may decrease. This is the risk. Any stock investment
carries the risk of loss because stock prices vary with market conditions.

There is a potential for investment losses under the ESPP. During your participation in the ESPP, your cost
of stock purchased may exceed the current market price of Best Buy stock, causing an investment loss if
you elect to dispose of stock at that time. In addition, because the ESPP purchases only Best Buy Common
Stock (investment in one single stock), it has a higher potential for risk than a fund contribution diversified
investments in a variety of stocks.

Your payroll deductions to the ESPP are an investment for the future. Holding Best Buy stock for the long-term
(as opposed to disposing of it immediately after the purchase date) can potentially be rewarding.
RETURN VS. RISK

Stock prices do go up and down over time, due to general economic conditions or specific situations that
affect a certain business or industry. In addition, you must remember that past performance of Best Buy stock
is not an indication of future results.

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RETURN VS. RISK

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HOW TO ENROLL AND MAKE CHANGES TO YOUR ACCOUNT
Note: You may only enroll in the ESPP during the two designated ESPP enrollment periods in March
and September each year.

Enroll via Web

Step 1: Go to eGO, www.eGOfromAnywhere.com or www.mybbyrewards.com

Step 2: Click on My Stock (LTIP) & Employee Stock Purchase (ESPP) link

Step 3: Click on the New User Registration link. You will need to enter your Social Security Number,
Date of Birth and Zip Code.

HOW TO ENROLL
Step 3: Then click the Activate link and follow the step-by-step instructions to enroll.

The system will guide you through your desired enrollment or election change steps.

Enroll via telephone (if you don’t have Web access)

Step 1: Call the eGO HR Support Center at 1-866-MY-BBY-HR (1-866-692-2947).

Step 2: Follow the prompts to access the Employee Stock Purchase Plan. Representatives are available
between the hours of 5 p.m. Sunday and midnight Friday Eastern Time, excluding holidays of the 11

New York Stock Exchange.

HOW TO ENROLL
If you do not have a password, you can talk to a representative who will set one up for you.

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 ENROLLMENT TIP

Certify your tax status during enrollment

U.S. Federal law requires that all ESPP participants certify their tax status before disposing of stock. This
ensures that income taxes related to your ESPP account are handled correctly and that taxes are not
withheld unnecessarily when you sell your stock. If you enroll over the telephone, you can request that
an IRS Form W-9 be sent to you if you are a U.S. citizen, or a Form W-8BEN if you are not a U.S. citizen.
If you enroll on the Web, you may complete the form on the system. If you don’t complete and return this
form before disposing of stock, backup tax withholding at a rate of 28 percent may be deducted from the
gross proceeds of your stock transaction(s) and dividends.

FOR QUESTIONS
ENROLLMENT TIPS

For more detailed Plan information, visit www.mybbyrewards.com or call the eGO HR Support Center at
1-866-MY-BBY-HR (1-866-692-2947), Monday through Friday between 8:00 a.m. – 6:00 p.m. Central Time.

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QUESTIONS

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BEST BUY’S SECURITIES TRADING POLICY

As an employee and owner of Best Buy stock, you should familiarize yourself with the Company’s Securities
Trading Policy (“Policy”) which describes rules and restrictions for trading in Best Buy stock and securities as
well as other companies’ stock and securities. In addition, employees at all times are subject to Federal and
state securities laws which prohibit, among other things, trading in securities while in possession of material,
non-public information. Violation of securities laws or the Policy could result in disciplinary action up to and
including termination and potential legal liability. Please refer to the full Policy available on ETK or
the eGO HR Support Center website for more details. For questions or concerns regarding this Policy,
contact the eGO HR Support Center at 1-866-MY-BBY-HR (1-866-692-2947). For personal investment
advice, please contact your own attorney or investment advisor.

Your rights as a shareholder

TRADING POLICY
By purchasing shares under the ESPP, you have the same rights as any other Best Buy shareholder, including
the right to vote on important corporate issues, such as electing the Board of Directors. Consult the Plan
document or Prospectus for more information on shareholder rights.

This document provides an overview of the Best Buy Co., Inc. 2008 Employee Stock Purchase Plan. The actual provisions of the Plan are governed by
13
Federal laws and the Plan. If there is any conflict between this document and the official Plan document, the official Plan document will govern.

TRADING POLICY

1-866-MY-BBY-HR
is your HR Support Center
Online via eGO, www.eGOfromAnywhere.com or
www.mybbyrewards.com or by phone at 1-866-MY-BBY-HR

12/2009