Exhibit 10.3


 


This PERFORMANCE STOCK UNIT AGREEMENT is entered into as of ____________, 20__
(the “Grant Date”), between BED BATH & BEYOND INC. (the “Company”) and ____________________
(“you”).


 


1.       Performance Stock Unit
Grant. Subject to the restrictions, terms and conditions of the Plan and this Agreement, the Company hereby awards you the
number of Performance Stock Units (the “Performance Stock Units”) specified in paragraph 7 below. The Performance
Stock Units are subject to certain restrictions as set forth in the Plan and this Agreement.


 


2.       The Plan. The Performance
Stock Units are entirely subject to the terms of the Company’s 2012 Incentive Compensation Plan, as amended from time
to time (the “Plan”). A description of key terms of the Plan is set forth in the Prospectus for the Plan. Capitalized
terms used but not defined in this Agreement have the meanings set forth in the Plan.


 


3.       Restrictions on Transfer.
You will not sell, transfer, pledge, hypothecate, assign or otherwise dispose of (any such action, a “Transfer”)
the Performance Stock Units, except as set forth in the Plan or this Agreement. Any attempted Transfer in violation of the Plan
or this Agreement will be void and of no effect.


 


4.       Payment. With respect
to each Performance Stock Unit that vests in accordance with the schedule set forth in paragraph 8 below, you will be entitled
to receive a number of shares of Common Stock equal to one times the Payment Percentage set forth opposite the Achievement Percentage
in paragraph 7 below. Subject to paragraph 5 below, and further subject to satisfaction of the Performance Goals, you will be paid
such share(s) of Common Stock with respect to each vested Performance Stock Unit within thirty (30) days following the later of:
(i) the applicable vesting date set forth in paragraph 7 below; and (ii) the date of certification of the Achievement Percentage
attained with respect to the applicable Performance Goal (as defined below) by the Committee, to the extent administratively practicable.


 


5.       Forfeiture; Certain Terminations.
Except as provided in this paragraph: (i) upon your Termination, all unvested Performance Stock Units shall immediately be forfeited
without compensation; and (ii) upon the failure to attain a Performance Goal (as defined below), any unvested Performance Stock
Units subject to any such unachieved Performance Goal shall immediately be forfeited without compensation. Notwithstanding anything
herein to the contrary, the Performance Stock Units will vest in full upon a Termination by reason of your death or Disability.
In the event of your Termination by the Company without Cause or, if provided in an agreement between you and the Company in effect
as of the Grant Date, by you for Good Reason or due to a Constructive Termination without Cause, as each such term (or concept
of like import) is defined in that agreement, the Performance Stock Units will vest upon, and subject to, the certification by
the Committee of attainment of the applicable Performance Goal regardless of whether or not you are employed on the date of certification.


 


6.       Rights with Regard to
Performance Stock Units. On and after the Grant Date, you will have the right to receive dividend equivalents with respect
to the shares of Common Stock underlying the Performance Stock Units ultimately achieved under the Performance Goal described in
paragraph 7, subject to the terms and conditions of this paragraph. Notwithstanding anything herein to the contrary, in no event
shall a dividend equivalent be issued or paid with respect to any Performance Stock Unit that has been forfeited pursuant to paragraph
5. If the Company pays a dividend (whether in cash or stock) on its Common Stock shares, or its Common Stock shares are split,
or the Company pays to holders of its Common Stock other shares, securities, monies, warrants, rights, options or property representing
a dividend or distribution in respect of the Common Stock, then the Company will credit a deemed dividend or distribution to a
book entry account on your behalf with respect to each share of Common Stock underlying the Performance Stock Units held by you,
provided that your right to actually receive such cash or property shall be subject to the same restrictions as the Performance
Stock Units to which the cash or property relates, and the cash or property shall be paid to you at the same time you receive the
payment of the shares of Common Stock underlying the Performance Stock Units. Unless otherwise determined by the Committee, dividend
equivalents shall not be deemed to be reinvested in Common Stock and shall be treated as uninvested at all times, without crediting
any interest or earnings. Except as provided in this paragraph, you will have no rights as a holder of Common Stock with respect
to the Performance Stock Units unless and until the Performance Stock Units become vested hereunder and you become the holder of
record of the Common Stock underlying the Performance Stock Units.


 






     


     

    

 





7.       Grant Size; Performance
Goals. Performance Stock Units covered by this award: _____________. Fifty percent (50%) of the Performance Stock Units will
be subject to a one-year performance goal (the “One-Year Goal”) and the remaining fifty percent (50%) of the
Performance Stock Units will be subject to a three-year performance goal (the “Three-Year Goal”). In allocating
the Performance Stock Units between the One-Year Goal and the Three-Year Goal, any remaining fractional share of Common Stock underlying
the Performance Stock Units shall be allocated to the Three-Year Goal. The One-Year Goal and the Three-Year Goal (each a “Performance
Goal”) have been set forth in a resolution adopted by the Committee and separately communicated to you (the “Resolution”).
The following schedules set forth the Achievement Percentages and Payment Percentages applicable to Performance Stock Units subject
to each Performance Goal, in the event that over the periods in which the Performance Stock Units are subject to a One-Year Goal
and a Three-Year Goal, as applicable (the “Performance Period”), the Company’s Total Shareholder Return
(as calculated pursuant to the formula described in the Resolution) is either flat or positive:


 


	Performance Stock Units Subject to One-Year Goal	Performance
    Stock Units Subject to Three-Year Goal
	Achievement 

Percentage (% of Peer 

Group Average)1	
        Payment Percentage of 

Common Stock 

Underlying PSUs

         
	Achievement 

Percentage (% of Peer 

Group Average)	Payment Percentage of 

Common Stock 

Underlying PSUs
	200% or Greater	150%	180% or Greater	150%
	185-199%	110%	145-179%	110%
	125-184%	100%	100-144%	100%
	100-124%	90%	70-99%	90%
	80-99%	75%	60-69%	75%
	70-79%	50%	50-59%	50%
	60-69%	25%	40-49%	25%
	<60%	0%	<40%	0%


 


The following schedules set forth the Achievement Percentages and Payment Percentages
applicable to Performance Stock Units subject to each Performance Goal, in the event that over the Performance Period, the Company’s
Total Shareholder Return (as calculated pursuant to the formula described in the Resolution) is negative:


 


 


	Performance Stock Units Subject to One-Year Goal	Performance
    Stock Units Subject to Three-Year Goal
	Achievement 

Percentage (% of Peer 

Group Average)2	
        Payment Percentage of 

Common Stock 

Underlying PSUs

         
	Achievement 

Percentage (% of Peer 

Group Average)	Payment Percentage of 

Common Stock 

Underlying PSUs
	200% or Greater	100%	180% or Greater	100%
	185-199%	100%	145-179%	100%
	125-184%	100%	100-144%	100%
	100-124%	90%	70-99%	90%
	80-99%	75%	60-69%	75%
	70-79%	50%	50-59%	50%
	60-69%	25%	40-49%	25%
	<60%	0%	<40%	0%


 


8.       Vesting Schedule.
Except in the case of death or Disability, your vesting in any portion of the Performance Stock Units is contingent on attainment
of the applicable Performance Goal before the first applicable Vesting Date and on the subsequent certification of that attainment
by the Committee. In the event a Performance Goal is not attained during the one-year performance period or the three-year performance
period, as applicable, all of the Performance Stock Units subject to such Performance Goal shall be forfeited without compensation.
Subject to the attainment of the applicable Performance Goal and the subsequent certification described above, unless you experience
a Termination before the applicable Vesting Date, the Performance Stock Units will become vested in accordance with the following
vesting schedules:


 


__________________________ 




1 The “Peer Group Average” applicable to the One-Year Goal
and the Three-Year Goal is based on the peer group of companies selected by the Committee prior to the Grant Date and
separately communicated to you.


2 The “Peer Group Average” applicable to the One-Year Goal and the Three-Year
Goal is based on the peer group of companies selected by the Committee prior to the Grant Date and separately communicated to you.


 






     


     

    

 


 


	Vesting Date	
        Percent Vested Subject to

        One-Year Goal
	
        Percent Vested Subject to

        Three-Year Goal

	1st anniversary of Grant Date	50%	N/A
	2nd anniversary of Grant Date	50%	N/A
	3rd anniversary of Grant Date	N/A	50%
	4th anniversary of Grant Date	N/A	50%


 


For purposes of the payment of applicable withholding taxes required by applicable
law, the number of shares of Common Stock underlying the Performance Stock Units to which you become entitled on payment shall
be automatically reduced by the Company to cover the applicable minimum statutorily required withholding obligation, except that
you may elect to pay some or all of the amount of such obligation in cash in a manner acceptable to the Company. In the event that
the amount of tax withholding is automatically reduced, it is the intent of this Agreement that any deemed “sale” of
the shares of Common Stock underlying the Performance Stock Units withheld will be exempt from liability under Section 16(b) of
the Exchange Act pursuant to Rule 16b-3. Fractional Performance Stock Units shall not vest but shall instead be accumulated for
vesting as whole Performance Stock Units in accordance with Company policy, with vesting scheduled to occur on the next succeeding
Vesting Date and in no event later than the final Vesting Date. All unscheduled and scheduled blackout periods (each, a “BP”)
are determined by the Company. If any shares of Common Stock underlying vested Performance Stock Units are scheduled to be paid
during a BP to which you are subject, (i) you will be paid the applicable shares of Common Stock on the scheduled payment date
(net of any shares withheld by the Company to pay minimum required taxes), but (ii) you will be unable to sell such shares of Common
Stock until the earliest date on which all BPs to which you are subject have expired.


 


Subject to paragraph 5 above, all vesting will occur only on the appropriate Vesting
Dates, with no proportionate or partial vesting in the period prior to any such date. Except as otherwise provided in the preceding
paragraph, when any Performance Stock Unit becomes vested, the Company (unless it determines a delay is required under applicable
law or rules) will, on the payment date described in paragraph 4 above (or promptly thereafter) issue and deliver to you a stock
certificate registered in your name or will promptly recognize ownership of your shares through uncertificated book entry or another
similar method, subject to applicable federal, state and local tax withholding in the manner described herein or otherwise acceptable
to the Committee. Subject to the provisions of this Agreement, you will be permitted to transfer shares of Common Stock following
your receipt thereof, but only to the extent permitted by applicable law or rule.


 


9.       Code Section 409A.
Although the Company does not guarantee the particular tax treatment of any payment under this Agreement, payments made under this
Agreement are intended to comply with, or be exempt from, the applicable requirements of Section 409A of the Code and the Plan
and this Agreement shall be limited, construed and interpreted in accordance with such intent.  To the extent any payment
made under this Agreement constitutes “non-qualified deferred compensation” pursuant to Section 409A of the Code, the
provisions of Section 13.13(b) of the Plan (including, without limitation, the six-month delay relating to “specified employees”)
shall apply.


 


10.    Notice. Any notice or communication
to the Company concerning the Performance Stock Units must be in writing and delivered in person, or by U.S. mail, to the following
address (or another address specified by the Company): Bed Bath & Beyond Inc., Finance Department – Stock Administration,
650 Liberty Avenue, Union, New Jersey 07083.


 





	BED BATH & BEYOND INC.	 	 
	By:  	 	 	 
	 	An Authorized Officer	 	Recipient (You)