Bed, Bath and Beyond 2003 Annual Report Download - page 22

BED BATH& BEYOND ANNUAL REPORT 2003
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Defined Benefit Plan
The Company has a non-contributory defined benefit pension plan for the CTS employees who meet specified age
and length-of-service requirements. The benefits are based on years of service and the employee’s compensation near
retirement. The Company utilizes a December 31 measurement date for this plan. For the year ended February 28,
2004, the net periodic pension cost was not material to the Company’s results of operations. As of February 28, 2004,
the Company has recorded an $8.3 million pension liability within deferred rent and other liabilities in the accompa-
nying consolidated financial statements.
10. COMMITMENTS AND CONTINGENCIES
The Company maintains employment agreements with its Co-Chairmen, which extend through 2007. The agreements
provide for a base salary (which may be increased by the Board of Directors), termination payments, post-retirement
benefits and other terms and conditions of employment. In addition, the Company maintains employment agree-
ments with other executives which provide for severance pay.
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.
The Company had certain purchase obligations totaling $644.0 million as of February 28, 2004 which consisted
of purchase orders for merchandise and capital expenditures. Typically these purchase orders, which are not included
in the Company’s consolidated balance sheet, allow the Company to cancel the orders without recourse.
11. SUPPLEMENTAL CASH FLOW INFORMATION
The Company paid income taxes of $226.7 million, $151.8 million and $89.8 million in fiscal 2003, 2002 and 2001,
respectively.
12. STOCK OPTION PLANS
Options to purchase shares of the Company’s common stock have been granted to employees under various
stock option plans, which plans aggregated 64.4 million shares of common stock, subject to adjustment under certain
circumstances. Option grants, which are issued at market value on the date of grant, generally become exercisable in
five equal installments beginning one to three years after the date of grant, and in all events, expire ten years after
the date of grant. All option grants are non-qualified.
The Stock Option and Compensation committees determine the number of shares and the option price per
share for all options issued under the stock option plans.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)