Pier 1 2007 Annual Report Download - page 94

(1) On February 19, 2007, Mr. Girouard retired from Pier 1 as chairman of the board of directors, as president
and chief executive officer, and as an employee.
(2) Mr. Hoak announced to Pier 1’s nominating and corporate governance committee on March 21, 2007 his
intention not to stand for re-election to the board of directors at the annual meeting of shareholders. He
cited his reasons as pursuit of other business and personal matters and not because of any disagreement on
any matter relating to Pier 1’s operations, policies or practices.
(3) Effective February 19, 2007, Mr. Smith became an employee of Pier 1, was appointed president and chief
executive officer, was elected to the board of directors and became a member of the executive committee
by virtue of his position as chief executive officer of Pier 1.
Non-Employee Director Compensation for the Fiscal Year Ended March 3, 2007
Fees Paid to Directors
Directors who are Pier 1 employees do not receive any compensation for their board activities. Each
director who was not a Pier 1 employee received the following cash compensation for services to the board
during fiscal 2007:
• an annual fee of $33,000 payable monthly;
• $1,750 for each board meeting attended in person;
• $1,000 for each board meeting attended by telephone;
• $750 for each committee meeting attended in person; and
• $500 for each committee meeting attended by telephone.
An annual audit committee chairman and compensation committee chairman fee of $12,500 (payable
monthly) was also paid during fiscal 2007. Additionally, effective February 19, 2007, Pier 1 began to pay an
annual (payable monthly) non-executive chairman of board fee of $75,000. The non-executive chairman fee
was $2,671.23 for the time period from February 19, 2007 through the end of fiscal 2007.
All of Pier 1’s non-employee directors participate in Pier 1’s Director Deferred Stock Unit Program as set
forth in the Pier 1 Imports, Inc. 2006 Stock Incentive Plan and the Pier 1 Imports, Inc. 1999 Stock Plan. The
program provides that directors must defer one-half, and may choose to defer up to all, of their meeting and
retainer fees. Deferred fees are matched 50% by Pier 1 and the total deferred fees and matching contributions
are converted into an equivalent value of deferred stock units (“DSU’s”). Directors Thomas, Hoak and Katz
deferred all of their cash fees last fiscal year, and directors, Burgoyne, Ferrari and London, deferred 50% of
their cash fees last fiscal year. Deferred fees plus matching contributions are converted to DSU’s based on the
closing price of Pier 1’s common stock on the first business day following the month in which the fees are
earned. The DSU’s are credited to an account maintained by Pier 1 for each non-employee director. Each DSU
is the economic equivalent of one share of Pier 1’s common stock. Each DSU is eligible to receive dividends
payable in additional DSU’s equal to the dividend per share of common stock divided by the closing price of
Pier 1’s common stock on each payable date. Pier 1 discontinued its quarterly cash dividend on October 2,
2006. The DSU’s are settled on the first day of the first month following 90 days after the person ceases being
a member of the board of directors, subject to additional delays required by applicable law, if any. The DSU’s
are settled in shares of Pier 1’s common stock. The value of any fractional DSU is paid in cash based upon
the closing price of Pier 1’s common stock on the date of the termination of the director’s service as a
director.
On March 23, 2006, the board of directors granted 5,000 deferred stock units to each of Messrs. Hoak
and Thomas. The DSU’s were awarded in recognition of their efforts and service, in their role as members of
the executive committee, in connection with the sale of The Pier Retail Group Limited, a former subsidiary of
Pier 1, the convertible senior notes transaction which closed on February 14, 2006, and other strategic matters.
The awards were effective on April 3, 2006, and were in lieu of fees for certain executive committee
meetings.
7