TJ Maxx 2004 Annual Report Download - page 71

TJX has a stock incentive plan under which options and other stock awards may be granted to its directors, officers and key
employees. This plan has been approved by TJX’s shareholders and all stock compensation awards are made under this plan. The
Stock Incentive Plan, as amended with shareholder approval, provides for the issuance of up to 145.3 million shares with 33.2 million
shares available for future grants as of January 29, 2005.
Under the Stock Incentive Plan, TJX has granted options for the purchase of common stock, generally within ten years from
the grant date at option prices of 100% of market price on the grant date. Most options outstanding vest over a three-year period
starting one year after the grant, and are exercisable in their entirety three years after the grant date. Outstanding options granted to
directors become fully exercisable one year after the date of grant.
A summary of the status of TJX’s stock options and related Weighted Average Exercise Prices (‘‘WAEP’’) is presented below
(shares in thousands):
Fiscal Year Ended
January 29, 2005 January 31, 2004 January 25, 2003
Shares WAEP Shares WAEP Shares WAEP
Outstanding at beginning of year 43,539 $16.97 37,196 $15.28 29,624 $13.10
Granted 12,828 21.76 12,453 20.20 11,395 19.85
Exercised (6,534) 14.83 (4,914) 12.00 (2,970) 10.94
Forfeitures (1,275) 20.06 (1,196) 18.64 (853) 15.85
Outstanding at end of year 48,558 18.44 43,539 16.97 37,196 15.28
Options exercisable at end of year 25,017 $16.04 21,138 $14.07 16,265 $12.12
TJX realizes an income tax benefit from restricted stock vesting and the exercise of stock options, which results in a decrease in
current income taxes payable and an increase in additional paid-in capital. Such benefits amounted to $20.9 million, $13.6 million
and $11.8 million for fiscal 2005, 2004 and 2003, respectively.
The following table summarizes information about stock options outstanding as of January 29, 2005 (shares in thousands):
Options Outstanding Options Exercisable
Weighted Weighted Weighted
Average Average Average
Contract Life Exercise Exercise
Range of Exercise Prices Shares Remaining Price Shares Price
$ 1.6094 – $10.8750 6,027 4.3 years $ 9.21 6,027 $ 9.21
$10.8751 – $19.8500 18,814 6.7 years 18.13 15,513 17.76
$19.8501 – $23.4600 23,717 9.1 years 21.03 3,477 20.21
Total 48,558 7.6 years $18.44 25,017 $16.04
TJX has also issued restricted stock and performance-based stock awards under the Stock Incentive Plan. Restricted stock
awards are issued at no cost to the recipient of the award, and have restrictions that generally lapse over three to four years from date
of grant. Performance-based shares have restrictions that generally lapse over one to four years when and if specified criteria are met.
The market value in excess of cost is charged to income ratably over the period during which these awards vest. Such pre-tax charges
amounted to $9.4 million, $10.2 million and $3.2 million in fiscal 2005, 2004 and 2003, respectively. The market value of the awards
is determined at date of grant for restricted stock awards, and at the date shares are earned for performance-based awards.
A combined total of 220,000 shares, 600,000 shares and 325,000 shares for restricted and performance-based awards were
issued in fiscal 2005, 2004 and 2003, respectively. No shares were forfeited during fiscal 2005, 2004 or 2003. The weighted average
market value per share of these stock awards at grant date was $22.37, $19.16 and $19.85 for fiscal 2005, 2004 and 2003, respectively.
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