Best Buy 2010 Annual Report Download - page 62

shareholders. The arrangement allows for annual The Compensation Committee also considers stock
increases based on the consumer price index. option grants for new directors at the time they are
Mr. Schulze is not eligible to participate in our equity- appointed to the Board. Because annual director stock
based compensation programs for employees. However, option grants are made in April, special appointment-
he is eligible to receive options to purchase the same based grants are prorated based on the number of
number of shares granted to non-management months remaining prior to the time when the
directors, as described in Director Equity Awards below. Compensation Committee expects to consider the next
In addition, we provided the following benefits to annual director grant.
Mr. Schulze in fiscal 2010: (i) reimbursement of all
Director Stock Ownership Guidelines
business-related expenses, including travel,
entertainment, room and board; (ii) eligibility for The Compensation Committee has established stock
Mr. Schulze and his spouse to participate in health ownership guidelines for our non-management directors.
benefit programs generally available to our employees; Each non-management director is expected to own
(iii) office facilities at our corporate campus, including shares of our common stock equivalent in value to five
full administrative support services; and (iv) eligibility to times their annual cash retainer. Newly appointed
participate in the Retirement Savings Plan and our directors have five years from their date of appointment
Deferred Compensation Plan. to achieve the expected level of stock ownership.
Director Equity Awards Deferred Compensation Plan
A significant portion of director compensation is linked Each calendar year, we offer our directors the
to our stock performance in the form of stock option opportunity to defer up to 100% of their annual and
grants. Each April, in connection with the Compensation committee chair retainers under our Deferred
Committee’s annual review of director compensation, Compensation Plan which is described in Non-Qualified
the Compensation Committee considers a stock option Deferred Compensation Plan on page 56. No company
award for directors. On April 7, 2009, the contributions or matching contributions are made for the
Compensation Committee granted to each then-serving benefit of directors under the Deferred Compensation
director, other than management directors who are Plan.
eligible to participate in our equity-based compensation
programs for employees, an option to purchase Other Benefits
7,500 shares of Best Buy common stock at an exercise We reimburse all directors for travel and other necessary
price of $38.13 per share. The grants were made under business expenses incurred in performance of their
the Omnibus Plan, vested immediately on the grant date services for us. In addition, all directors are covered
and can generally be exercised over a ten-year period. under a directors’ and officers’ indemnity insurance
Messrs. Schulze and Anderson requested that they not policy.
be granted a long-term incentive award and that
options to purchase the number of shares they would
have received be contributed to a discretionary award
pool to be distributed to our employees.
62