Pier 1 2007 Annual Report Download - page 104

February 1, 2007, Mr. Thomas remained chairman of the executive committee and a member of the
nominating and corporate governance committee and effective February 19, 2007 he became the non-executive
chairman of the board. Mr. Thomas has been a shareholder of the Winstead PC law firm (formerly known as
Winstead Sechrest & Minick P.C.) since August 2005. From September 2001 to July 2005, he was a senior
partner of Kolodey, Thomas & Blackwood, LLP, a law firm. He was also senior partner of Thomas & Culp,
LLP, a law firm, from 1994 to August 2001.
The board of directors unanimously recommends a vote “FOR” the election of each of the above
named nominees as directors.
ITEM 2 — Shareholder Proposal
William C. Thompson, Jr., Comptroller of the City of New York, as custodian and a trustee of the
New York City Employees’ Retirement System (93,569 shares owned as of January 8, 2007), the New York
City Teachers’ Retirement System (110,582 shares owned as of January 8, 2007), the New York City Police
Pension Fund (41,434 shares owned as of January 8, 2007), and the New York City Fire Department Pension
Fund (10,541 shares owned as of January 8, 2007), and as custodian of the New York City Board of Education
Retirement System (4,125 shares owned as of January 8, 2007), has submitted the following proposal in
accordance with Rule 14a-8 of the Securities and Exchange Act of 1934. Mr. Thompson has indicated to Pier
1 that each of the above systems intend to continue to hold at least $2,000 of Pier 1’s common stock through
the date of Pier 1’s annual shareholders meeting. Mr. Thompson’s address is c/o The City of New York, Office
of the Comptroller, 1 Centre Street, New York, New York 10007-2341.
To be approved, the proposal must receive the affirmative vote of a majority of the shares of the common
stock present in person or represented by proxy and entitled to vote at the annual meeting. The persons named
in your proxy will vote your shares “AGAINST” this proposal unless you vote “FOR” the proposal.
The board of directors unanimously recommends a vote “AGAINST” this proposal.
Pay-for-Superior-Performance Proposal
Resolved: That the shareholders of Pier 1 Imports, Inc. (“Company”) request that the Board of Director’s
Executive Compensation Committee establish a pay-for-superior-performance standard in the Company’s
executive compensation plan for senior executives (“Plan”), by incorporating the following principles into the
Plan:
1. The annual incentive or bonus component of the Plan should utilize defined financial performance
criteria that can be benchmarked against a disclosed peer group of companies, and provide that an
annual bonus is awarded only when the Company’s performance exceeds its peers’ median or
mean performance on the selected financial criteria;
2. The long-term compensation component of the Plan should utilize defined financial and/or stock
price performance criteria that can be benchmarked against a disclosed peer group of companies.
Options, restricted shares, or other equity or non-equity compensation used in the Plan should be
structured so that compensation is received only when the Company’s performance exceeds its
peers’ median or mean performance on the selected financial and stock price performance
criteria; and
3. Plan disclosure should be sufficient to allow shareholders to determine and monitor the pay and
performance correlation established in the Plan.
Supporting Statement: We feel it is imperative that compensation plans for senior executives be
designed and implemented to promote long-term corporate value. A critical design feature of a well-conceived
executive compensation plan is a close correlation between the level of pay and the level of corporate
performance relative to industry peers. We believe the failure to tie executive compensation to superior
corporate performance; that is, performance exceeding peer group performance, has fueled the escalation of
executive compensation and detracted from the goal of enhancing long-term corporate value.
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