Pier 1 2007 Annual Report Download - page 123

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Non-Qualified Deferred Compensation Table for the Fiscal Year Ended March 3, 2007
The following table shows the value as of the fiscal year ended March 3, 2007 of each named executive
officer’s total benefit under each non-qualified deferred compensation plan of Pier 1 in which the executive
participates. Pier 1’s non-qualified deferred compensation plans are:
•Pier 1 Benefit Restoration Plan — The Pier 1 Benefit Restoration Plan (“BRP”) was established by Pier
1 in April 1990. The BRP permits select members of management and highly compensated employees
of Pier 1 to defer current compensation (generally W-2 earnings). Additionally, Pier 1 recognizes the
value of the past and present services of employees participating in the BRP by making matching
contributions to employee deferrals plus paying interest earnings on the deferral and match amounts.
Pier 1’s matching contribution is (i) one hundred percent (100%) of the first one percent of the
participant’s compensation deferral, and (ii) fifty percent (50%) of the next four percent of the
participant’s compensation deferral.
Each participant’s deferral and matched amounts are credited at least quarterly with an amount of
interest at an annual rate equal to Moody’s Corporate Bond Index plus 1%. Over the last three fiscal
years, the annual interest rates have ranged from 6.63% to 7.47%. During fiscal 2007, the interest rates
were 6.63% through December 31, 2006 and 7.05% January 1, 2007 through March 3, 2007.
Participants’ accounts are paid to them upon separation from Pier 1 in a lump sum amount unless the
participant has previously elected and qualified for a five-year installment form of payment. Participants
may also elect an in-service lump sum distribution with a 10% penalty for early withdrawal.
Participants’ deferral amounts and the interest earned on those amounts are fully vested. No loans are
permitted. Matching contributions and the interest earned on those contributions are subject to the same
vesting requirements as Pier 1’s 401(k) retirement plan regardless of whether the participant is actually
participating in the 401(k) plan. The 401(k) vesting schedule is 20% per year of service (as defined in
the plan) beginning with two years of service. Participants are fully vested in Pier 1 matching
contributions plus earnings after six years of service with Pier 1.
Effective December 31, 2004, the BRP was closed to further contributions by participants. The plan
was renamed the BRP I and Pier 1 offered after that date the BRP II plan described below. Only vested
account balances remain in the BRP I along with the interest continuing to be earned on those amounts.
•Pier 1 Benefit Restoration Plan II — All unvested BRP I amounts were transferred to the Pier 1 BRP II.
The BRP II has the same purpose as the BRP I, but was adopted to separate the portion of the BRP
that became subject to new deferred compensation taxation laws effective January 1, 2005 generally
referred to as 409A.
BRP II participants may defer pre-tax amounts of up to 20% of their compensation (generally W-2
earnings). Participants’ contributions and the interest earned on those contributions are fully vested. No
loans are permitted. Pier 1’s matching contribution is (i) one hundred percent (100%) of the first one
percent of the participant’s compensation deferral, and (ii) fifty percent (50%) of the next four percent
of the participant’s compensation deferral. Matching contributions and the interest earned on those
contributions are subject to the same vesting requirements as Pier 1’s 401(k) Retirement Plan
irrespective of whether a participant is actually participating in the 401(k) plan. The 401(k) vesting
schedule is 20% per year of service (as defined in the plan) beginning with two years of service.
Participants are fully vested in Pier 1 matching contributions plus earnings after six years of service
with Pier 1.
Each participant’s deferral amount plus the Pier 1 match is credited at least quarterly with an amount of
interest at an annual rate equal to Moody’s Corporate Bond Index plus 1%. Over the last three fiscal
years, the annual interest rates have ranged from 6.63% to 7.47%. During fiscal 2007, the interest rates
were 6.63% through December 31, 2006 and 7.05% January 1, 2007 through March 3, 2007. The
BRP II allows for an in-service lump sum distribution for an unforeseen emergency. Participants, upon
separation from Pier 1, may elect to have their account balance paid out to them in five annual
installments, or may elect a lump sum distribution, subject to delay as required by 409A.
36