Document:

Exhibit 10

Exhibit 10.8

PROSPECTUS

BEST BUY CO., INC.

 

1,000,000 Shares

Common Stock

($.10 par value)

 

BEST BUY CO., INC.

2000 Restricted Stock Award Plan,

as Amended and Restated

 

Shares of Best Buy Co., Inc. (the “Company”)

common stock, par value $0.10 per share (the “Common Stock”), covered by this

Prospectus may be granted by the Company to certain  employees, directors, consultants and

independent contractors (collectively, the “Eligible Recipients”) of the

Company or its directly and indirectly majority-owned subsidiaries

(“Affiliates”) under the Company’s 2000 Restricted Stock Award Plan, as amended

and restated (the “Plan”).  Each

Eligible Recipient receiving a stock award (each, a “Participant”) will be

granted Common Stock subject to the restrictions on transferability and the

risk of forfeiture set forth in the award.

 

THIS PROSPECTUS MAY NOT BE USED FOR REOFFERS OR RESALES OF

COMMON STOCK ACQUIRED HEREUNDER. ANY “AFFILIATE” OF THE COMPANY, AS DEFINED IN

RULE 405 OF THE GENERAL RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE

COMMISSION, MAY PUBLICLY REOFFER OR RESELL COMMON STOCK ACQUIRED ONLY PURSUANT

TO AN AVAILABLE REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN APPLICABLE

EXEMPTION FROM REGISTRATION SUCH AS PROVIDED IN RULE 144 UNDER THE SECURITIES ACT

OF 1933.

 

ELIGIBLE RECIPIENTS ARE ADVISED TO CONSULT WITH LEGAL COUNSEL

CONCERNING THE SECURITIES AND TAX LAW IMPLICATIONS OF THEIR ACQUISITIONS OR

DISPOSITIONS OF SHARES ACQUIRED PURSUANT TO THE PLAN.

 

THIS DOCUMENT CONSTITUTES

PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933.

 

THESE SECURITIES HAVE NOT

BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY

STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR

ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS

PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

No person is authorized to give any

information or to make any representation not contained in this Prospectus, and

any information or representations not contained herein must not be relied upon

as having been authorized by the Company. 

This Prospectus does not constitute an offer of any securities other

than the securities to which it relates or an offer to any person in any

jurisdiction where such offer would be unlawful.  Neither the delivery of this Prospectus nor any sales made

hereunder shall, under any circumstances, create any implication that there has

been no change in the affairs of the Company since the date hereof or since the

date of any documents incorporated herein by reference.

 

The date of this Prospectus is March 31, 2002

 

 

TABLE OF CONTENTS

 

	

  AVAILABLE

  INFORMATION

  	

   

  
	

   

  	

   

  
	

  PURPOSE AND

  ADMINISTRATION OF THE PLAN

  	

   

  
	

   

  	

   

  
	

  DESCRIPTION OF STOCK AWARDS

  	

   

  
	

   

  	

  Stock Awards

  
	

   

  	

  Period of Plan; Amendments

  
	

   

  	

  Vesting

  
	

   

  	

  Dividends

  and Distributions on Unvested Shares

  
	

   

  	

  Termination

  of Employment or Other Service; Risk of Forfeiture

  
	

   

  	

  Restrictions

  on Transfer

  
	

   

  	

  Change of Control

  
	

   

  	

  No Right to Continued

  Employment

  
	

   

  	

   

  
	

  FEDERAL INCOME TAX

  TREATMENT

  	

   

  
	

   

  	

   

  
	

  LEGAL MATTERS

  	

   

  
	

   

  	

   

  
	

  EXPERTS

  	

   

  
			

 

2

 

AVAILABLE INFORMATION

 

The Company is subject to the informational requirements of

the Securities Exchange Act of 1934 (the “Exchange Act”) and in accordance

therewith files reports and other information with the Securities and Exchange

Commission (the “Commission”).  Reports,

proxy statements and other information filed by the Company can be inspected

and copied at the public reference facilities maintained by the Commission at

450 Fifth Street, N.W., Washington, D.C. 20549.  Copies of such material also can be obtained from the Public

Reference Section of the Commission in Washington, D.C. (at the address above)

at prescribed rates.  The Commission

also maintains a web site that contains reports, proxy and information

statements and other information regarding registrants, such as the Company,

that file electronically with the Commission. 

The web site’s address is www.sec.gov. 

In addition, reports, proxy statements and other information concerning

the Company can be inspected at the offices of the New York Stock Exchange, 20

Broad Street, New York, N.Y. 10005.

 

The Company has filed a registration

statement on Form S-8 under the Securities Act of 1933 (the “Registration Statement”)

to register the shares of Common Stock issuable upon an award of stock under

the Plan. This Prospectus omits certain information which is contained in the

Registration Statement. The information omitted may be obtained from the

Commission’s office in Washington, D.C. (at the address above) upon payment of

the fees prescribed by the rules and regulations of the Commission, or examined

there or at the Commission’s web site without charge.

 

The following documents filed by the Company

with the Commission are incorporated herein by reference:

 

(a)          The Company’s Annual Report

on Form 10-K for the fiscal year ended March 3, 2001.

 

(b)

      All other reports filed by

the Company pursuant to Section 13(a) or 15(d) of the Securities Exchange Act

of 1934 for periods since March 3, 2001.

 

(c)          The description of the

Common Stock of the Company contained in its registration statement on Form 8-A

filed with the Commission pursuant to Section 12 of the Exchange Act .

 

All documents subsequently filed by

the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act,

prior to the filing of a post-effective amendment which indicates that all

shares of Common Stock offered hereby have been issued or which deregisters all

shares of Common Stock then remaining unissued, shall be deemed to be

incorporated herein by reference and to be a part hereof from the date of

filing of such documents.

 

The Company will provide without charge to

each person participating in the Plan, upon the written or oral request of any

such person, a copy of all documents containing the Plan information required

by Part I of Form S-8 and a copy of any or all of the documents incorporated by

reference in the Registration Statement (excluding exhibits to such documents

unless specifically incorporated by reference).  Requests for such copies, or any additional information about the

Plan or the administration thereof, should be directed to Human Resources -

Benefits Department, Best Buy Co., Inc., 7075 Flying Cloud Drive, Eden Prairie,

Minnesota, 55344, (952) 947-2360 or (800) 846-6673.

 

3

 

PURPOSE AND

ADMINISTRATION OF THE PLAN

 

The purpose of the Plan is to advance the

interests of the Company and its shareholders by enabling the Company and its

Affiliates to attract and retain persons of ability to perform services for the

Company and its Affiliates by providing an incentive to such individuals

through equity participation in the Company and by rewarding such individuals

who contribute to the achievement by the Company and its Affiliates of their

respective economic objectives.  Grants

of Common Stock also enable employees and others providing services to the

Company and its Affiliates to increase their personal interest in the success

of the Company.  In accordance with this

belief, the Board of Directors of the Company adopted the Plan on April 28,

2000, and the Plan was duly approved by the shareholders of the Company on June

22, 2000.  One million shares of Common

Stock were reserved for issuance pursuant to the Plan.  The number and kind of shares reserved for

issuance will be appropriately adjusted in the event of any one or more stock

splits, reverse stock splits or stock dividends paid or declared with respect

to the Common Stock.  As of the date of

this Prospectus, 150,849 shares of Common Stock had been issued pursuant to the

Plan.

 

The Plan is administered by the Compensation

and Human Resources Committee (the “Committee”) of the Company’s Board of

Directors, whose members may not receive awards under the Plan unless the grant

of such award is approved by a majority of the disinterested directors of the

Company.  To the extent consistent with

corporate law, the Committee may delegate to any officers of the Company its

duties, power and authority under the Plan pursuant to any conditions or

limitations it may establish, but only the Committee or the entire Board of

Directors may exercise such duties, power and authority with respect to

Eligible Recipients who are subject to Section 16 of the Exchange Act.

 

The Board of Directors is currently comprised

of Bradbury H. Anderson, Robert T. Blanchard, Jack W. Eugster, Kathy J. Higgins

Victor, Elliot S. Kaplan, Allen U. Lenzmeier, Richard M. Schulze, Mark C.

Thompson, Frank D. Trestman, Hatim A. Tyabji and James C. Wetherbe.   Directors are elected on a staggered basis

for a two-year term and until their successors are duly elected and

qualified.  Directors may be removed

from office with or without cause by the shareholders.

 

The members of the Compensation and Human

Resources Committee are Frank D. Trestman, Kathy J. Higgins Victor and James C.

Wetherbe.  Compensation and Human

Resources Committee members receive no additional compensation for administering

the Plan.

 

Under

the Plan, stock awards may be granted to Eligible Recipients who, in the

judgment of the Committee, have contributed, are contributing or are expected

to contribute to the achievement of economic objectives of the Company or its

Affiliates.  Subject to the terms of the

Plan, the Committee has the authority to determine, on a case by case basis,

the provisions of any stock award, including the Participants, the nature and

extent of the award made to each Participant and the form of written agreement

evidencing the award (the “Award Agreement”), the time at which awards are

granted, and the restrictions to which the vesting of such stock awards may be

subject.  The Committee’s determinations

need not be uniform.  The determination

of the Committee is conclusive, and no member of the Committee or the Board of

Directors will be liable for any action made in good faith with respect to the

Plan or any stock award granted under the Plan.  The Committee has the authority to amend or modify the terms of

any outstanding stock award, but if the amendment or modification would

adversely affect a Participant, the Committee must obtain such Participant’s

consent.

 

The Plan is not subject to the provisions of

the Employee Retirement Income Security Act of 1974.

 

DESCRIPTION

OF STOCK AWARDS

 

The Plan provides for the grant of shares of

Common Stock.  The Plan is not qualified

under Section 401(a) of the Internal Revenue Code.  Because tax results may vary due to individual circumstances,

each Participant in the Plan is urged to consult his or her personal tax

advisor with respect to the state and federal tax consequences of the grant and

vesting of and declaration of dividends on shares of Common Stock issued

pursuant to the Plan.

 

4

 

Stock

Awards

 

Awards of Common Stock made to Eligible

Recipients under the Plan will be subject to such terms and conditions,

consistent with the provisions of the Plan, as may be determined by the

Committee in its sole discretion. There is no limitation on the number of

shares of Common Stock which may be awarded to any Eligible Recipient under the

Plan.  As of the date of this

Prospectus, Eligible Recipients had received awards of stock pursuant to the

Plan.

 

Period of Plan; Amendments

 

Subject to earlier termination of the Plan,

no awards of stock under the Plan may be granted after June 22, 2010. The Board

of Directors of the Company may suspend or terminate the Plan or any portion

thereof at any time, and may amend the Plan from time to time, but no amendment

will be effective without shareholder approval if such approval is required by

the Exchange Act or the rules of the stock exchange on which the Company’s

securities are listed.  No termination,

suspension or amendment of the Plan may adversely affect any outstanding award

of Common Stock without the consent of the affected Participant.

 

Vesting

 

The Committee determines the vesting schedule

of each stock award made pursuant to the Plan; provided, however, that no more

than twenty-five percent (25%) of shares subject to a stock award may vest upon

the grant of the award and, thereafter, no more than twenty-five percent (25%)

of the shares subject to the award may vest on each of the subsequent three

anniversary dates of the grant of the award.  

At such time as shares subject to stock awards vest, the risk of

forfeiture and restrictions on transfer thereof will terminate.  Subject to the provisions of the Plan, the

Committee may impose such other restrictions or conditions on the vesting of a

stock award as it deems appropriate. 

With respect to shares that have vested, Participants will have all

voting, dividend, liquidation and other rights that are afforded to the holders

of shares of Common Stock issued other than pursuant to the Plan.

 

Dividends and Distributions on Unvested Shares

 

Subject to the discretion of the Committee,

any dividends or distributions paid with respect to unvested shares of Common

Stock will be subject to the same restrictions as the unvested shares with

respect to which such dividends or distributions were paid or issued.  The Committee may withhold such payments

with or without paying interest on any dividends or distributions so

withheld.  Additionally, the Committee

may require, subject to the consent of affected Participants, that such dividends

and distributions be reinvested in unvested shares of Common Stock.  All stock dividends, stock rights, and stock

issued upon split-ups or reclassifications shall be subject to the same

restrictions as the unvested shares with respect to which such stock dividends,

stock rights, or other issuances were declared or issued.

 

Termination of Employment or Other Service; Risk of

Forfeiture

 

Except as otherwise provided in an Award

Agreement, if a Participant’s employment or other service with the Company and

all Affiliates is terminated because of death, disability or retirement, all

shares of Common Stock subject to an award made pursuant to the Plan then held

by such Participant shall become fully vested and the risk of forfeiture and

restrictions on transfer of such shares shall terminate.  However, unless otherwise provided in an

Award Agreement, if a Participant’s employment or other service with the

Company and all Affiliates is terminated for any other reason, all unvested

shares subject to an award made pursuant to the Plan then held by such

Participant will be forfeited and cancelled. 

The Committee may, however, at any time and in its sole discretion,

cause such unvested shares to vest or continue to vest following such

termination of employment or service.

 

Restrictions on Transfer

 

Except pursuant to the Participant’s will or

the laws of descent and distribution or as otherwise expressly set forth in an

Award Agreement, prior to the vesting of shares subject to an award made

pursuant to the Plan, no right or interest of any Participant in such shares

may be assigned, transferred, or encumbered in any way during the lifetime of

the Participant.  Subject to the

approval of the Committee, however, a Participant may make a gift of shares

subject to an award made pursuant to the Plan to a spouse, child, stepchild,

grandchild or legal dependent, or to a

 

5

 

trust for the benefit thereof.  In such event, the donee will be required to

enter into an agreement with the Company confirming that such shares are

subject to the same restrictions in the hands of the donee as they were in the

hands of the donor.

 

To enforce these restrictions on transfer,

the Committee may require a Participant to keep his or her stock certificates,

together with duly endorsed stock powers, in the custody of the Company or its

transfer agent.  In the alternative,

evidence of stock ownership, together with such stock powers, may be required

to be maintained in a non-certificated book-entry stock account with the

Company’s transfer agent.  Stock

certificates evidencing the shares awarded under the Plan may bear a legend

referring to the terms, conditions and restrictions applicable to such shares.

 

In addition to the restrictions on transfer

of shares contained in the Plan or in an Award Agreement, shares of Common

Stock acquired pursuant to the Plan by executive officers or directors of the

Company or persons otherwise in a position to control the Company may be resold

only pursuant to the registration requirements of the Securities Act of 1933,

as amended, Rule 144 thereunder, or another applicable exemption

therefrom.  Sales of such shares are

subject to the antifraud provisions of the federal and state securities

laws.  Each Participant is advised to

consult with legal counsel concerning the securities law implications of his or

her disposition of shares pursuant to the Plan.

 

Change of

Control

 

Subject to the discretion of the Committee or

the terms of an Award Agreement, if a change of control of the Company occurs,

all outstanding unvested shares of Common Stock subject to an award made

pursuant to the Plan shall become fully vested and shall no longer be subject

to the risk of forfeiture or restrictions on transfer of such shares.  However, if, with respect to any

Participant, such acceleration of vesting would, when added to any other

payments received by such person from the Company or its Affiliates, constitute

a “parachute payment” under Section 280G(b)(2) of the Internal Revenue Code,

then the number of shares for which vesting will accelerate will be reduced so

that such acceleration will not result in the imposition of the excise tax

under Section 4999 of the Internal Revenue Code.  This restriction will not apply if the Participant is subject to

a separate agreement with the Company or its Affiliates that expressly

addresses the potential application of Section 280G or 4999, in which event the

applicable terms of such other agreement will govern.

 

As defined in the Plan, a “change of control”

of the Company means:

 

(i)                                     the sale,

lease, exchange or other transfer, directly or indirectly, of substantially all

of the assets of the Company (in one transaction or in a series of related

transactions) to a person or entity that is not controlled by the Company;

 

(ii)                                  the approval by

the shareholders of the Company of any plan or proposal for the liquidation or

dissolution of the Company;

 

(iii)                               a merger or

consolidation to which the Company is a party if the shareholders of the

Company immediately prior to the effective date of such merger or consolidation

have “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act),

immediately following the effective date of such merger or consolidation, of

securities of the surviving corporation representing (A) more than 50%, but not

more than 80%, of the combined voting power of the surviving corporation’s then

outstanding securities ordinarily having the right to vote at elections of

directors, unless such merger or consolidation has been approved in advance by

the members of the Board of Directors who were directors of the Company at the

time the Plan was adopted or were elected to or nominated for the Company’s

Board of Directors with the approval thereof (the “Incumbent Directors”), or

(B) 50% or less of the combined voting power of the surviving corporation’s

then outstanding securities ordinarily having the right to vote at elections of

directors (regardless of any approval by the Incumbent Directors);

 

(iv)                              any person becomes after the adoption of

the Plan the “beneficial owner” (as defined in Rule 13d-3 under the Exchange

Act), directly or indirectly, of (A) 20% or more, but not 50% or more, of the

combined voting power of the Company’s outstanding securities ordinarily having

the right to vote

 

6

 

at elections of directors,

unless the transaction resulting in such ownership has been approved in advance

by the Incumbent Directors, or (B) 50% or more of the combined voting power of

the Company’s outstanding voting securities (regardless of approval by the

Incumbent Directors); or

 

(v)                                 the Incumbent

Directors cease for any reason to constitute at least a majority of the Board

of Directors.

 

No Right to Continued Employment

 

Nothing in the Plan will interfere with or

limit the right of the Company or its Affiliates to terminate the employment or

service of any Eligible Recipient or Participant at any time.

 

7

 

FEDERAL INCOME TAX TREATMENT

 

A Participant will recognize taxable income

at the time the award is granted to the extent that some of the shares subject

to the award are immediately vested and are not subject to restrictions under

Section 16(b) of the Exchange Act. 

Thereafter, the Participant will recognize ordinary income as the

restrictions on the other shares subject to the award lapse.  The amount of such ordinary income will be

equal to the market value of the shares at the time of the grant or lapse.  However, the Participant may elect under

Section 83(b) of the Internal Revenue Code to recognize ordinary income in an

amount equal to the market value of the shares subject to the award at the time

the award is granted.  In such event,

upon a subsequent sale of the shares, the change in the market value of the

shares would be treated as a capital gain or loss.  The Company or its applicable Affiliate will generally be allowed

a corresponding income tax deduction as and when ordinary income is recognized

by the Participant.

 

The Company or its applicable Affiliate is

entitled to withhold and deduct from future wages of a Participant (or from

other amounts that may be due and owing to a Participant from the Company or an

Affiliate), or make other arrangements for the collection of, all legally

required amounts necessary to satisfy any and all federal, state and local

withholding and employment-related tax requirements attributable to an award of

stock, including, without limitation, the grant, vesting of or payment of

dividends with respect to such shares. 

Alternatively, the Company may require the Participant to remit promptly

the amount of such withholding to the Company before taking any action,

including issuing any shares of Common Stock, with respect to a proposed award

under the Plan.

 

LEGAL

MATTERS

 

The validity of the issuance of the shares of

Common Stock offered hereby will be passed upon for the Company by Robins,

Kaplan, Miller & Ciresi L.L.P., Minneapolis, Minnesota. Elliot S. Kaplan, a

member of Robins, Kaplan, Miller & Ciresi L.L.P., is the Secretary and a

director of the Company. At March 31, 2002, attorneys at Robins, Kaplan, Miller

& Ciresi L.L.P. beneficially owned 273,294 shares of Common Stock.

 

EXPERTS

 

Ernst & Young, independent auditors, have

audited our consolidated financial statements included in our Annual Report on

Form 10-K for the year ended March 3, 2001 as set forth in their report, which

is incorporated by reference in this prospectus and elsewhere in the

registration statement.  Our financial

statements are incorporated by reference in reliance on Ernst & Young LLP’s

report, given on their authority as experts in accounting and auditing.

 

8Sept. 26, 2000

E.Z. advanced previously $ 100,000. - to e- fusion.
Interest at 8% p.a. , to be paid monthly. To this date no
interest payment has been made. Payments must be put up-to-date.

E.Z. will advance another $ 100,000. - to e-fusion. There will
be no further advances.

Terms and conditions on this second advance are the same as on
the initial advance. i.e. 8% to be paid monthly.

Loan is 100% guaranteed by Software Entertainment Ltd.

50% of the loan is guaranteed by Richard Arnold personally.

In case of a sale of SEL it is agreed that these loans will be paid off from
such sale proceeds, so that each shareholder (E.Z. and R.A.) have equal
financial investments in e-fusion.

It is agreed that all necessary documentation, i.e. promissory notes,
guarantees, shareholders agreements, escrow agreement of shares etc. will be
finalised after the advance of the second loan, but will be completed in an
efficient manner.

It is agreed that these loans may be rearranged from E.Z. perso-
nally to a corporate entity of so desired.

/s/ Richard Arnold
------------------------------
Richard Arnold

/s/ Erwin Zecha
------------------------------
Erwin Zecha

<PAGE>

Feb. 18, 2000

E.Z. will advance $ 100,000 in increments as needed to
Virtual Net Concepts ( or ?? )

Interest rate would be 8% p.a. and has to be paid monthly
($666.66 per month ).

All shares will be held in escrow, and will be assigned to the other
shareholders after E.Z. loan has been paid back.

If loan is not paid in full, plus any accrued interest, after two years (from
date of the FIRST advance) , E.Z. will get additional 10% of shares, to bring
his holdings to 40%.

If after two years loan plus interest is not paid back in full, E.Z. at his
option can purchase all outstanding shares at book value ( i.e. retained
earnings plus contributed capital ), or he can sell his shares to the other
shareholders for book value PLUS any loans owing to him.

At the option of the other shareholders, they may lend money to
the Company under the same terms and conditions as E.Z.' s loan,
which money may then be used to pay off E.Z.' s loan. In this
case E.Z. will NOT have the option to buy out the other share-
holders.

If book value should be negative, price for the outstanding
shares will be $1.00

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