Pier 1 2008 Annual Report Download - page 130

(9) Upon termination of employment with the consent of Pier 1 Imports, optionees have until the earlier of
(a) the expiration of the option term, or (b) the 91st day after the date of termination (three months in the
1989 Plan) to exercise the shares vested as of termination. No named executive officer has stock options
with an intrinsic value.
(10) Upon termination for cause, all options terminate at the termination of employment.
(11) Upon a change in control event (as defined in the 1999 Plan), options granted under the 1999 Plan would
automatically vest unless Pier 1 Imports’ board of directors determines otherwise prior to the change in
control event. Under the 2006 Plan, upon a corporate change (as defined in the plan) the vesting of
options may be accelerated, the options may be surrendered for a cash payment or adjusted at the discre-
tion of the Committee or the Committee may determine to make no changes to the options. The 1989
Plan does not address change in control. Assuming that upon a change in control or corporate change an
acceleration of the vesting of the options granted under the 1999 Plan and 2006 Plan occurs, no named
executive officer has stock options with an intrinsic value. The exercise term would be determined by the
Committee.
(12) Upon the death or disability of an optionee, the options granted under the 1999 Plan and the 2006 Plan
become fully exercisable to the extent of all unexercised shares, and may be exercised by the optionee,
or in the case of death by the optionee’s estate, until the earlier of (a) the expiration of the option term,
or (b) the first anniversary date of such death or disability. Options granted under the 1989 Plan allow in
the event of disability or death of an optionee that the optionee, or the executor or administrator of the
optionee’s estate, may exercise the options to the extent they are vested until the earlier of (a) expiration
of the option term, or (b) the first anniversary of the date of death or disability. No named executive
officer has stock options with an intrinsic value.
(13) If Mr. Smith’s employment ended as of the end of fiscal 2008 due to a voluntary good reason termination
or an involuntary without cause termination, then pursuant to his employment agreement Mr. Smith
would be entitled to receive through the term of the agreement his compensation and benefits and
1,000,000 shares of Option 2 would vest. At the end of fiscal 2008, Option 2 had no intrinsic value.
Mr. Smith would also be entitled to receive the bonus earned in fiscal 2008 as set forth in the Summary
Compensation Table above. In the event of Mr. Smith’s disability which results in termination of employ-
ment, then pursuant to his employment agreement Mr. Smith would be entitled to receive 13 weeks of
compensation and benefits, and any vesting of Option 2 which occurs in the 13-week period. After the
13-week period Mr. Smith would participate in any Pier 1 Imports short-term or long-term disability
plans to which he is eligible. Change in control does not constitute a termination event under the agree-
ment, and the death of Mr. Smith ends the employment agreement.
(14) Post-employment consulting agreement amounts shown are the maximum consulting fee payable, which
amount is subject to reduction when payment of full retirement benefits begin. As mentioned in the
Compensation Discussion and Analysis above, these agreements have been mutually terminated by the
parties as of April 20, 2008.
OTHER BUSINESS
Pier 1 Imports does not plan to act on any matters at the meeting other than those described in this proxy
statement. If any other business should properly come before the meeting, the persons named in the proxy will
vote in accordance with their best judgment.
Shareholder Proposals for 2009 Annual Meeting
To be included in the proxy statement relating to the 2009 annual meeting of shareholders, shareholder
proposals made pursuant to SEC Rule 14a-8 must be received by Pier 1 Imports’ corporate secretary no later
than 5:00 p.m., local time, January 15, 2009.
In order to bring a matter before the 2009 annual meeting of shareholders that is not contained in the
proxy statement, a shareholder must comply with the advance notice provisions of Pier 1 Imports’ by-laws.
Pier 1 Imports’ by-laws require that it receive notice of the matter no earlier than March 22, 2009, and no
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