This excerpt taken from the BBBY DEF 14A filed Jun 1, 2009.
Stock Options. In general, an optionee will recognize no taxable income upon the grant of a non-qualified stock option and the Company will not receive a deduction at the time of such grant. Upon exercise of a non-qualified stock option, an optionee generally will recognize ordinary income in an
amount equal to the excess of the fair market value of the common stock on the date of exercise over the exercise price. Upon a subsequent sale of the common stock by the optionee, the optionee will recognize short-term or long-term capital gain or loss, depending upon his holding period for the common stock. Subject to the limitations of Section 162(m) of the Code and Section 280G of the Code (as described below), the Company will generally be allowed a deduction equal to the amount recognized by the optionee as ordinary income.
This excerpt taken from the BBBY DEF 14A filed May 24, 2006.
The following table sets forth information as of February 25, 2006 for each of the executive officers of the Company named in the Summary Compensation Table with respect to options granted during fiscal 2005 and their potential value (at the end of the option term assuming certain levels of appreciation of the Companys common stock).