KNOW YOUR

EMPLOYEE STOCK PURCHASE PLAN

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ESPP GUIDE FOR EMPLOYEES

WELCOME

to Best Buy’s Employee Stock Purchase Plan (ESPP)

The Employee Stock Purchase Plan is an investment program that allows you to purchase Best Buy stock at a discount through automatic payroll deductions.

Here are 3 important things to know about investing in the ESPP:

1 You can purchase stock at a discount.

3 The choice is yours. You choose how much

to invest – anywhere from 1 percent to 20 percent of your eligible compensation. The combination of stock purchased in the spring and fall of each calendar year cannot exceed $25,000 (based on the stock’s fair market value [FMV] at the beginning of each contribution period).

ESPP stock is purchased for you at a 5 percent discount, and this discount is applied to the stock price at the end of the six-month offering period.

2 It’s convenient. Automated payroll

deductions make it easy to invest in Best Buy stock. When you’re enrolled, stock is automatically purchased in your name every six months.

A few things to note: All shares of Best Buy stock acquired through the Employee Stock Purchase Plan must be held by the employee for a minimum of 12 months before those shares can become eligible for liquidation. If an ESPP participant encounters certain financial hardships or elects to leave the company, ESPP shares that have not yet reached the minimum 12-month holding period will be released to the employee without further restriction. Refer to the plan document for additional clarification on financial hardship or call 1-866-MY-BBY-HR (1-866-692-2947) to request a hardship waiver.

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Eligibility To participate in the ESPP, you must have completed a minimum period of service with Best Buy. Full-time and part-time Best Buy employees are eligible to participate in the ESPP after 60 days of continuous service with Best Buy. The only exceptions are if you typically work less than 20 hours per week, have not worked for more than five months in the calendar year, or would own 5 percent or more of Best Buy common stock after purchasing shares under the ESPP. Once you meet these requirements, you can begin in the ESPP on the first day of the month on or after the date you satisfy these requirements, if you’re still eligible on that date.

Enrollment Periods There are also two ESPP enrollment periods each year – one in March and the other in September.

Making Contributions You can contribute 1 percent to 20 percent of your gross eligible pay to the ESPP. Your contributions are taken from each paycheck after taxes have been deducted. In this example, an employee decides to contribute 5 percent of his or her pay to the ESPP. Here’s how that employee’s ESPP contribution is calculated:

ESPP Contributions

Calculations

Gross eligible compensation per paycheck*

$1,000

ESPP contribution percentage

x 5%

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.

DISCONTINUING Contributions You can discontinue making ESPP contributions during any given offering period. Please know that such a request must be made at least 15 business days before the end of the offering period to ensure that your request can be processed in time for the current offering period.

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The Five Percent Discount The ESPP applies a 5 percent discount to the stock price at the end of the six-month offering period. Here’s an example of how it works: Assume that Best Buy stock is $40 per share on the last day of the six-month offering period. The discount you will receive is $2 and the stock purchase price is $38.

ESPP Discount

Calculations

Stock price on last day of offering period

$40

Less 5% Discount

- $2

Discounted stock purchase price

$38

Purchasing Your Best Buy Stock As long as you are participating in the ESPP, your contributions will be taken from your paycheck automatically and the money used to purchase Best Buy stock on the last day of each six-month offering period. Your shares of stock are then deposited into an account in your name about 7 to 10 days after the end of the offering period. Going back to our example, let’s say the employee contributes $650 to the ESPP and the discounted stock purchase price is $38. Here is how the employee’s ESPP purchase is calculated:

ESPP Shares

Calculations

ESPP semi-annual contributions

$650

Discounted stock purchase price

$38

Number of Best Buy shares purchased

17.1

If Your Employment Status Changes If your employment status changes from full-time or part-time to occasional/seasonal or temporary, or if you leave Best Buy during an offering period, any ESPP payroll deductions you have made during that offering period will be refunded to you in your paycheck as soon as administratively possible (usually within one to two paychecks). No stock will be purchased for you when the offering period ends.

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Selling Your ESPP Stock All stock purchased through the ESPP must be held in your account at least 12 months, except in limited circumstances. After that, however, you can sell your stock at any time. Stock can be sold at the current market price on that date, or you can use a “limit order” to set a price at which your shares will be sold in the future. If the market price of Best Buy stock reaches or exceeds the price set in your limit order, the stock is sold automatically by Best Buy’s ESPP administrator. What could be easier?

Some things to note about selling ESPP stock:

• Due to market fluctuations, the actual price you receive for your stock may be different from your limit order price or the price quoted to you on a certain date.

• 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.

Tax Implications of Disposing of Your ESPP Stock 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 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. 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 income on your W-2.

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It’s Easy to Enroll You can enroll in the ESPP only during the two designated ESPP enrollment periods, in March and September each year. The enrollment process is a breeze and can be done online or by telephone:

Enroll online 1 Visit hr.bestbuy.com during the enrollment window, or go directly to netbenefits.com to enroll.

2 Click New User Registration and enter

your Social Security Number, date of birth and zip code.

3 Click Activate and follow the easy step-bystep instructions to enroll.

Enroll by phone 4 Call the HR Support Center at

1-866-MY-BBY-HR (1-866-692-2947).

5 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 New York Stock Exchange.

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

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