UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported) March 25, 2013

BEST BUY CO., INC.
(Exact name of registrant as specified in its charter)
 
Minnesota
 
1-9595
 
41-0907483
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
7601 Penn Avenue South
 
 
Richfield, Minnesota
 
55423
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code (612) 291-1000
 
N/A
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(d) On March 25, 2013, the Board of Directors (the “Board”) of Best Buy Co., Inc. ("Best Buy" or the "registrant") elected Bradbury H. Anderson and Allen U. Lenzmeier as Class 2 directors, effective immediately. Mr. Anderson and Mr. Lenzmeier were nominated by Mr. Richard M. Schulze to serve on the Board pursuant to the Letter Agreement between the registrant and Mr. Schulze described in Item 8.01 below, which description is incorporated herein by reference, and the agreement between the registrant and Mr. Schulze described in Item 8.01 of the registrant's Current Report on Form 8-K filed on December 14, 2012, the description of which is incorporated herein by reference.

It is expected that Mr. Anderson and Mr. Lenzmeier will serve on one or more committees of the Board. Committee assignments are expected to be made at the next regular meeting of the Board, scheduled to be held in April 2013. Once determined, the committee assignment(s) will be disclosed by the registrant in a Current Report on Form 8-K.

There are no transactions or relationships between the registrant and Mr. Anderson that are reportable under Item 404(a) of Regulation S-K.

There is a relationship between the registrant and Mr. Lenzmeier that is reportable under Item 404(a) of Regulation S-K. Mr. Lenzmeier's daughter-in-law, Jessica Zou, has been an employee of Best Buy since May 2003 and is currently a property manager at Best Buy's corporate headquarters. In fiscal 2013, her gross income was approximately $132,000. Mr. Lenzmeier's family member is compensated at a level comparable to the compensation paid to non-family members in similar positions at Best Buy and receives other benefits made generally available to Best Buy employees in similar positions.

Mr. Anderson and Mr. Lenzmeier are expected to stand for election to the registrant's Board at the 2013 Regular Meeting of Shareholders, as provided in the Letter Agreement described in Item 8.01 below. If elected by the shareholders, Mr. Anderson and Mr. Lenzmeier will each serve for a two-year term expiring at the 2015 Regular Meeting of Shareholders and until their successor has been duly elected and qualified, or until their individual earlier death, resignation or removal.
 
Best Buy's Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the registrant.

Item 7.01
Regulation FD Disclosure.

On March 25, 2013, Best Buy issued a news release announcing the appointment of Mr. Anderson and Mr. Lenzmeier to the Board as described above under Item 5.02. A copy of the news release is furnished as Exhibit 99.1 and incorporated herein by reference.

The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that Section unless the registrant specifically incorporates it by reference in a document filed under the Securities Act of 1933, as amended, or the Exchange Act, of the Securities Exchange Act of 1934, as amended.

Item 8.01
Other Events.

On March 25, 2013, Best Buy and Mr. Schulze entered into a Letter Agreement between such parties (the “Letter Agreement”) to set forth, among other things, (i) the duties and responsibilities of Mr. Schulze in his position as the Chairman Emeritus of the Company (the “Chairman Emeritus”), (ii) the compensation to be provided to Mr. Schulze in connection with his preparation and ongoing consultation over the next twelve months with regard to a business plan for the Company, (iii) the compensation and benefits to be provided to Mr. Schulze with respect to his services as Chairman Emeritus and (iv) Mr. Schulze's right to nominate two directors for appointment to the Board until Mr. Schulze reaches the age of 75, pursuant to which Messrs. Anderson and Lenzmeier have been elected to the Board and will be nominated for election for two year terms to the Board at the registrant's 2013 Regular Meeting of Shareholders.

The foregoing description of the principal terms of the Letter Agreement is qualified in its entirety by reference to the Letter Agreement, a copy of which is filed as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.


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Item 9.01
Financial Statements and Exhibits.

(d) Exhibits.

The following Exhibit 99.1 is furnished and Exhibit 99.2 is filed as Exhibits to this Current Report on Form 8-K.

Exhibit No.
 
Description of Exhibit
99.1
 
News release issued March 25, 2013. Any internet address provided in this release is for information purposes only and is not intended to be a hyperlink. Accordingly, no information at any internet address is included herein.
 
 
 
99.2
 
Letter Agreement, dated March 25, 2013, between Best Buy Co., Inc. and Richard M. Schulze



3

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
  
 
 
BEST BUY CO., INC.
 
 
(Registrant)
 
 
 
Date: March 25, 2013
By: 
/s/ KEITH J. NELSEN
 
 
Keith J. Nelsen
 
 
Executive Vice President, General Counsel and Secretary



4


Exhibit 99.1

Founder Richard Schulze Returns to Best Buy as Chairman Emeritus in
Support of the Company's Renew Blue Transformation Efforts


MINNEAPOLIS, March 25, 2013 – Best Buy and its Founder, Richard Schulze, announced today that Mr. Schulze is returning to the company as its Chairman Emeritus. In addition, Mr. Schulze has nominated Brad Anderson and Al Lenzmeier to serve on the Best Buy Board of Directors, pursuant to a previously disclosed agreement between the company and Mr. Schulze.

"Over the past several months, I have come to know and respect Hubert, and have a high regard for the work he and his executive team are doing to revitalize Best Buy for the benefit of all stakeholders," said Schulze. "My dedication to the company that I founded and love is unwavering and, together with Hubert and the Board, I determined that the best way to support Best Buy would be to return in support of the initiatives underway."

"At the same time, it is a great privilege to nominate to the Board two long-time colleagues, Brad Anderson and Al Lenzmeier, who helped build Best Buy into what it is today and will continue adding great value in their new role," Schulze added.

"The Board has full confidence in Hubert and the management team, and is entirely supportive of the company’s Renew Blue transformation efforts," said Hatim Tyabji, chairman of the Best Buy Board of Directors. "My fellow Board members and I are pleased to welcome Dick back to the company as Chairman Emeritus and are confident that the role he will play in support of the management team can only accelerate the progress that Best Buy has already made."

"I am delighted our Founder, Dick Schulze, is returning to the company as its Chairman Emeritus. His passion, wisdom and insight are legendary, and I know I speak for all my colleagues when I say it was wonderful to see him come to our headquarters recently and engage with employees as he and I walked the halls," said Joly. "I look forward to his engagement as we move forward. I am also delighted to have Brad and Al join our Board and to have the company benefit from their experience and wisdom."

Mr. Anderson and Mr. Lenzmeier join the Best Buy Board of Directors, effective immediately. They will stand for election at the company’s annual shareholder meeting in June 2013.


Media Contact:
Matt Furman
Matt.Furman@bestbuy.com
612-231-2992





Exhibit 99.2


Mr. Richard M. Schulze
[REDACTED ADDRESS]

Re:
Chairman Emeritus Position

Dear Dick,

As you know, I am extremely excited to have the opportunity to craft what I believe will be a seminal chapter in Best Buy’s history. While I am aware of our challenges, I have great enthusiasm for the Company’s prospects going forward. In connection with Renew Blue and our transformation of Best Buy I am eager for you to return to the Company that you created and share your wisdom, insight and passion in support of the Company. With that in mind, it is my pleasure to extend you an offer to continue in your role as Chairman Emeritus, with the lifetime honorary title of “Founder and Chairman Emeritus”, on the terms laid out below.

Duties and Responsibilities

As Chairman Emeritus, you will assume duties and responsibilities commensurate with your title and the position of leadership that it implies. As we have discussed, your duties and responsibilities will include the following:

1. helping to maintain and evolve the general corporate culture of Best Buy by engaging, at such times and events as agreed upon between you and the Chief Executive Officer (CEO), in scheduled training and speaking events, including the Company’s Leadership Institute;

2. making yourself reasonably available to attend or speak at Company functions to support or communicate new initiatives or major events, subject to mutual agreement between you and the CEO;

3. subject to the request of the CEO, mentoring up to two high-potential officers of the Company;

4. attending meetings of the Company’s shareholders and participating in any subsequent “Q&A” sessions;

5. participating in regularly scheduled meetings with the CEO, at times mutually agreed upon, and the CEO will make himself reasonably available upon your request.





Additional Matters

The CEO and/or CFO will provide you with monthly financial results as soon as practicable after they become available following month end. In addition, the CEO and/or CFO shall meet with you on a quarterly basis to discuss the financial statements and any other Company information you wish to discuss and to receive your advice and input. Such meetings will be on mutually agreed dates.

As we have advised you, the Company is undertaking a process to appoint additional new independent directors who will have strong backgrounds in retail and/or extensive technology/digital/online expertise. As a courtesy, the Company will provide you with information regarding candidates it intends to nominate for election to the board and provide you with an opportunity to comment on such candidates.

In recognition of your efforts on behalf of both the Company and the shareholders over the last year, the Company will compensate you in an amount not to exceed $2.125 million, in connection with your preparation and ongoing consultation over the next twelve months with regard to a business plan for the Company. The Company will pay you this sum in quarterly installments beginning on the three month anniversary of the signing of this letter agreement. You and any of your designees will present the plan to the CEO/CFO and any of their designees on a date which is mutually agreed upon.

In furtherance of the performance of your duties, you will have for your lifetime the use of your office (or a replacement office provided at the Company’s cost and reasonably acceptable to you) at our corporate headquarters in Minneapolis, as well as the same registered security ID and parking privileges as would be provided to an executive of the Company. As a courtesy, you will notify me in advance when you intend to visit the corporate headquarters.

During such times as you are utilizing your office in the performance of your duties as Chairman Emeritus, you be entitled to the same level of administrative support as an executive of the Company, including the services of a personal administrative assistant. The Company shall pay the pro rata salary of your assistant for the time she spends performing services on your behalf. Additionally, the Company will reimburse you for all reasonable and documented costs and expenses incurred in connection with your assistant’s services. During all such times as your assistant is present at the Company’s headquarters on your behalf, the Company will provide your assistant with the same registered security ID, parking privileges and use of the facilities as would be provided to an employee of the Company.

Additionally, the Company will depict in the corporate headquarters important milestones throughout the Company’s history, substantially as has been displayed in the past, which will be updated from time to time for recent events as appropriate.

Compensation and Benefits

In return for your role as Chairman Emeritus, you will receive an annual base salary of $150,000. You will not be entitled to an annual bonus. You will be entitled to lifetime medical benefits for yourself, your spouse and your eligible dependents in accordance with the plans, practices, programs and policies of the Company in effect generally for the executives of the Company and their dependents. You may elect to receive such medical benefits pursuant to your family office insurance policy; provided that such family office insurance policy is substantially comparable in cost to the medical benefit plans generally in effect for the executives of the Company. You will also be entitled to reimbursement of all of your costs and out of pocket expenses incurred in the performance of your duties as Chairman Emeritus, including with respect to entertainment, accommodations, meals and travel (with air travel expenses being reimbursed at commercial first class rates), and the provision of a Company credit card for that purpose.





Director Representation

In connection with the resumption of your duties as Chairman Emeritus and until you reach the age of 75 you will be entitled to nominate 2 directors for appointment to the Board of Directors. In the event either of your nominated directors resigns from the Board or are forced to leave the Board due to death, disability or serious illness, or are not elected at the applicable meeting of shareholders by the requisite percentage of shareholders for approval, you will have the right to designate their successor, subject to satisfaction of the Company’s director qualification standards and the Board’s approval, which shall not be unreasonably withheld. Each of Brad Anderson and Allen Lenzmeier will be appointed to the Company’s Board of Directors as promptly as practicable and nominated for election for two year terms to the Board at the Company’s 2013 annual meeting of shareholders. It is my understanding you would like to present Mssrs. Anderson and Lenzmeier for membership to the Compensation and Audit Committees, respectively. I will support these appointments in discussions with the Board on these matters. Per Board practice, each director shall be entitled to attend each Committee meeting at their discretion.

This Agreement shall have an initial term which will last until you reach the age of 75 except for any matters above which are specifically agreed to extend longer than the initial term. The parties will meet prior to the end of the term to determine if, and to what extent, they wish to modify, renew or extend this agreement.

Dick, as I have expressed to you many times, I believe that you have a vital role to play at this crucial time in the Company’s history. The terms outlined above will allow you to have a real voice in the Company’s progress. Your return to the Company and support of our leadership team and restructuring plans will provide us with a powerful impetus as we work to build the Company’s momentum. I know that you share my hope that Best Buy’s future will be at least as bright as its past.

Sincerely,
 
 
 
 
BEST BUY CO., INC.
 
 
By:
/s/ Hubert Joly
Hubert Joly
Chief Executive Officer
 
 
March 25, 2013
Date

Agreed to and accepted by:
 
 
 
 
/s/ Richard M. Schulze
Richard M. Schulze
Chairman Emeritus
 
 
March 22, 2013
Date