Bed, Bath and Beyond 2000 Annual Report Download - page 19

BED BATH & BEYOND ANNUAL REPORT 2000
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5. TRANSACTIONS AND BALANCES WITH RELATED PARTIES
A. The Company has an interest in certain life insurance policies
on the lives of its Co-Chairmen. The beneficiaries of these
policies are related to the aforementioned individuals. The
Company’s interest in these policies is equivalent to the net
premiums paid by the Company. At March 3, 2001 and February
26, 2000, other assets include $4.5 million and $4.0 million,
respectively, representing the Company’s interest in the life
insurance policies.
B. The Company obtains certain payroll services from a related
party. The Company paid fees for such services of $366,000,
$557,000 and $424,000 for fiscal 2000, 1999 and 1998,
respectively.
C. The Company made charitable contributions to the Mitzi and
Warren Eisenberg Family Foundation, Inc. (the “Eisenberg
Foundation”) and the Feinstein Family Foundation, Inc. (the
“Feinstein Foundation”) in the aggregate amounts of $634,000,
$488,000 and $390,000 for fiscal 2000, 1999 and 1998,
respectively. The Eisenberg Foundation and the Feinstein
Foundation are each not-for-profit corporations of which Messrs.
Eisenberg and Feinstein, the Co-Chairmen of the Company, and
their family members are the trustees and officers.
6. LEASES
The Company leases retail stores, as well as warehouses, office
facilities and equipment, under agreements expiring at various
dates through 2021. Certain leases provide for contingent rents
(which are based upon store sales exceeding stipulated amounts
and are immaterial in fiscal 2000, 1999 and 1998), scheduled
rent increases and renewal options generally ranging from five
to fifteen years. The Company is obligated under a majority of
the leases to pay for taxes, insurance and common area
maintenance charges.
As of March 3, 2001, future minimum lease payments under
noncancelable operating leases are as follows:
FISCAL YEAR (in thousands) AMOUNTS
2001 $ 165,057
2002 175,353
2003 173,125
2004 168,773
2005 165,042
Thereafter 1,031,840
Total minimum lease payments $1,879,190
As of March 30, 2001, the Company had executed leases for 62
stores planned for opening in fiscal 2001.
Expenses for all operating leases were $142.6 million, $113.3
million and $89.5 million for fiscal 2000, 1999 and 1998,
respectively.
7. EMPLOYEE BENEFIT PLAN
The Company has a defined contribution 401(k) savings plan
(the “Plan”) covering all eligible employees. Participants may
defer between 1% and 15% of annual pre-tax compensation
subject to statutory limitations. The Company has an option to
contribute an amount as determined by the Board of Directors.
In addition, each participant may elect to make voluntary,
non-tax deductible contributions in excess of the pre-tax
compensation limit up to 15% of compensation. As of March 3,
2001, the Company has made no contributions to the Plan.
8. COMMITMENTS AND CONTINGENCIES
Under terms of employment agreements with its Co-Chairmen
extending through June 2002, which terms are subject to further
extension, the Company is required to pay each a base salary
(which may be increased by the Board of Directors) of $750,000
per annum. The agreements also provide for other terms and
conditions of employment, including termination payments and
pension benefits.
The Company is involved in various claims and legal actions
arising in the ordinary course of business. In the opinion of
management, the ultimate disposition of these matters will not
have a material adverse effect on the Company’s consolidated
financial position, results of operations or liquidity.
9. SUPPLEMENTAL CASH FLOW INFORMATION
The Company paid income taxes of $68.0 million, $67.2 million
and $53.5 million in fiscal 2000, 1999 and 1998, respectively.
10. STOCK OPTION PLANS
Options to purchase shares of the Company’s common stock
have been granted to employees under various stock option
plans. The Company may grant options to purchase not more
than an aggregate of 64.4 million shares of common stock,
subject to adjustment under certain circumstances.