Pier 1 2007 Annual Report Download - page 114

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vesting conditions. As Mr. Girouard and Mr. Weatherly retired in fiscal 2007, the fair value of their options
was fully expensed in fiscal 2007. For additional information on the valuation assumptions with respect to
the fiscal 2007 grants and grants made prior to fiscal 2007, refer to note #11 to the Pier 1 Imports, Inc.
consolidated financial statements in the 2007 Form 10-K. These amounts reflect Pier 1’s accounting
expense for these awards, and do not necessarily correspond to the actual value that will be recognized by
the named executive officers.
Option 1 granted to Mr. Smith to purchase 1,000,000 shares of Pier 1’s common stock on February 19,
2007 will vest on February 19, 2008. The grant is being expensed over two years at $2.88 per share. If
Mr. Smith fails to be employed with Pier 1 between February 19, 2008 and February 28, 2009 and
Mr. Smith ends such employment without good reason (as defined in Mr. Smith’s employment agreement),
then he forfeits 50% of the option. In accordance with SFAS 123R, no grant date fair value has been deter-
mined for Mr. Smith’s Option 2 performance based options of 2,000,000 shares. This value will be deter-
mined when the performance targets related to these options are set by the board.
(4) This column represents the sum of the change in pension value and above market earnings on non-quali-
fied deferred compensation earnings for fiscal 2007 for each of the named executive officers. During fiscal
2007, Mr. Smith did not participate in a Pier 1 defined benefit plan or non-qualified deferred compensation
plan.
The change in pension value was:
$2,399,604 for Mr. Girouard;
$93,452 for Mr. Turner;
$21,788 for Mr. Jacobs;
$70,324 for Mr. Schneider;
$131,611 for Mr. Walker; and
$350,530 for Mr. Weatherly.
See the Pension Benefits Table below for additional information.
The above market earnings in fiscal 2007 on non-qualified deferred compensation plan(s) in which the
named executive officer participated were:
$10,788 for Mr. Girouard;
$518 for Mr. Turner;
$1,049 for Mr. Jacobs;
$970 for Mr. Schneider;
$686 for Mr. Walker; and
$923 for Mr. Weatherly.
Above market earnings represent the difference between 120% of the long-term applicable Federal Rate at
the time the rate for the plan was selected and the 6.63% and 7.05% annual interest credited in calendar
years 2006 and 2007, respectively, by Pier 1 on salary deferred by the named executive officers plus Pier
1 match amounts under non-qualified deferral compensation plans described in the Non-Qualified Deferred
Compensation Table below. Additional information on these plans and each named executive officer’s par-
ticipation is shown in that table.
27