Bed, Bath and Beyond 2014 Annual Report Download - page 36

Changes in the Company’s stock options for the fiscal year ended February 28, 2015 were as follows:
(Shares in thousands)
Number of
Stock Options
Weighted Average
Exercise Price
Options outstanding, beginning of period 4,192 $46.85
Granted 523 62.34
Exercised (1,033) 39.73
Forfeited or expired ——
Options outstanding, end of period 3,682 $51.05
Options exercisable, end of period 1,989 $42.69
The weighted average fair value for the stock options granted in fiscal 2014, 2013 and 2012 was $20.96, $22.28 and $22.95,
respectively. The weighted average remaining contractual term and the aggregate intrinsic value for options outstanding as of
February 28, 2015 was 4.1 years and $87.2 million, respectively. The weighted average remaining contractual term and the
aggregate intrinsic value for options exercisable as of February 28, 2015 was 2.9 years and $63.6 million, respectively. The total
intrinsic value for stock options exercised during fiscal 2014, 2013 and 2012 was $33.5 million, $44.6 million and $38.8 million,
respectively.
Net cash proceeds from the exercise of stock options for fiscal 2014 were $41.2 million and the net associated income tax
benefit was $13.9 million.
Restricted Stock
Restricted stock awards are issued and measured at fair market value on the date of grant and generally become vested in five
equal annual installments beginning one to three years from the date of grant, subject, in general, to the recipient remaining
in the Company’s service on specified vesting dates. Vesting of restricted stock awarded to certain of the Company’s executives
is dependent on the Company’s achievement of a performance-based test for the fiscal year of grant and, assuming
achievement of the performance-based test, time vesting, subject, in general, to the executive remaining in the Company’s
service on specified vesting dates. The Company recognizes compensation expense related to these awards based on the
assumption that the performance-based test will be achieved. Vesting of restricted stock awarded to the Company’s other
employees is based solely on time vesting.
Changes in the Company’s restricted stock for the fiscal year ended February 28, 2015 were as follows:
(Shares in thousands)
Number of
Restricted Shares
Weighted Average
Grant-Date
Fair Value
Unvested restricted stock, beginning of period 3,943 $53.66
Granted 852 62.72
Vested (1,042) 45.36
Forfeited (161) 60.68
Unvested restricted stock, end of period 3,592 $57.90
Performance Share Units
Performance share units (‘‘PSUs’’) are issued and measured at fair market value on the date of grant. Vesting of PSUs awarded
to certain of the Company’s executives is dependent on the Company’s achievement of a performance-based test during a
one-year period from the date of grant and during a three-year period from the date of grant and, assuming achievement of
the performance-based test, time vesting, subject, in general, to the executive remaining in the Company’s service on specified
vesting dates. Performance during the one-year period will be based on Earnings Before Interest and Taxes (‘‘EBIT’’) margin
relative to a peer group of the Company comprising 50 companies selected within the first 90 days of the performance period.
Upon achievement of the one-year performance-based test, the corresponding PSUs will vest annually in substantially equal
installments over a three year period starting one year from the date of grant. Performance during the three-year period will
be based on Return on Invested Capital (‘‘ROIC’’) relative to such peer group. Upon achievement of the three-year
performance-based test, the corresponding PSUs will vest on the fourth anniversary date of grant. The awards based on EBIT
margin and ROIC are capped at 150% of target achievement, with a floor of zero. PSUs are converted into shares of common
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
BED BATH & BEYOND 2014 ANNUAL REPORT
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