Pier 1 2009 Annual Report Download - page 123

Effect on Authorized but Unissued Shares of Common Stock
Currently, we are authorized to issue up to a total of 500,000,000 shares of common stock, of
which 90,489,276 shares were issued and outstanding as of May 4, 2009. We do not currently intend to
reduce the number of authorized shares of Pier 1 Imports’ common stock.
Effect on Par Value
We intend to amend our Certificate of Incorporation to reduce the par value of Pier 1 Imports’
common stock to $0.001. See Item 3 below for further information. The approval of this proposal is not
conditioned on the approval of Item 3 or Item 4 below.
Reduction in Stated Capital
As a result of the reverse stock split, upon the Effective Time, the stated capital on our balance
sheet attributable to Pier 1 Imports’ common stock, which consists of the par value per share of Pier 1
Imports’ common stock multiplied by the aggregate number of shares of Pier 1 Imports’ common stock
issued and outstanding, will be reduced in proportion to the size of the reverse stock split.
Correspondingly, our paid-in capital account, which consists of the difference between our stated
capital and the aggregate amount paid to us upon issuance of all currently outstanding shares of Pier 1
Imports’ common stock, will be increased by the same amount by which the stated capital is reduced.
The shareholders’ equity, in the aggregate, will remain unchanged. See Item 3 for discussion on how
the proposal to reduce the par value of Pier 1 Imports’ common stock will also affect stated capital.
No Going Private Transaction
Notwithstanding the decrease in the number of outstanding shares following the proposed reverse
stock split, this transaction is not the first step in a ‘‘going private transaction,’’ within the meaning of
Rule 13e-3 of the Exchange Act, and will not produce, either directly or indirectly, any of the effects
described in paragraph (a)(3)(ii) of Rule 13e-3.
Book-Entry Shares
If the reverse stock split is effected, shareholders who hold uncertificated shares (i.e., shares held
in book-entry form and not represented by a physical stock certificate), either as direct or beneficial
owners, will have their holdings electronically adjusted by Mellon Investor Services LLC, the ‘‘exchange
agent’’, through the Depository Trust Company’s Direct Registration System (and, for beneficial
owners, by their brokers or banks that hold in ‘‘street name’’ for their benefit, as the case may be) to
give effect to the reverse stock split.
U.S. shareholders who hold uncertificated shares as direct owners do not need to take any action
in order to receive any cash payment in lieu of fractional shares or other distributions, if any, that may
be declared and payable to holders of record following the reverse stock split. Non-U.S. shareholders
who hold uncertificated shares as direct owners will be sent a letter of transmittal and a W-8BEN form
by the exchange agent and will need to return it properly completed and duly executed in order to
receive any cash payment in lieu of fractional shares or other distributions, if any, that may be declared
and payable to holders of record following the reverse stock split.
Exchange of Stock Certificates
If the reverse stock split is effected, shareholders holding certificated shares (i.e., shares
represented by one or more physical stock certificates) will be required to exchange their old stock
certificate(s) (‘‘Old Certificate(s)’’) for shares held in book-entry form through the Depository Trust
Company’s Direct Registration System representing the appropriate number of shares of Pier 1
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