Pier 1 2009 Annual Report Download - page 127

Non-U.S. Holders
Non-U.S. Holders who exchange shares of Pier 1 Imports’ common stock pursuant to the reverse
stock split generally should be subject to tax in the manner described above under ‘‘U.S. Holders,’’
except that any capital gain realized by a Non-U.S. Holder as a result of receiving cash in lieu of a
fractional share of Pier 1 Imports’ common stock generally should not be subject to U.S. federal
income or withholding tax if the Non-U.S. Holder certifies under penalties of perjury that it is a
Non-U.S. Holder and neither we nor the exchange agent has actual knowledge to the contrary unless:
• the Non-U.S. Holder is an individual who holds Pier 1 Imports’ common stock as a capital asset,
is present in the U.S. for 183 days or more during the taxable year of the reverse stock split and
meets certain other conditions;
• the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in
the U.S. (and, if certain income tax treaties apply, is attributable to a Non-U.S. Holder’s
permanent establishment in the U.S.); or
• we are or have been a ‘‘United States real property holding corporation’’ for U.S. federal
income tax purposes at any time within the shorter of the five-year period ending on the
Effective Time, or the period that the Non-U.S. Holder held the shares of Pier 1 Imports’
common stock. We do not believe that we have been, currently are, or will become, a United
States real property holding corporation.
Individual Non-U.S. Holders who are subject to U.S. federal income tax because they are present
in the United States for 183 days or more during the year of the reverse stock split will be taxed on
their gain (including gain from the sale of shares of Pier 1 Imports’ common stock and net of
applicable U.S. losses from sales or exchanges of other capital assets recognized during the year) at a
flat rate of 30% or such lower rate as may be specified by an applicable income tax treaty. Other
Non-U.S. Holders subject to U.S. federal income tax with respect to gain recognized as a result of
receiving cash in lieu of a fractional share of common stock generally will be taxed on such gain in the
same manner as if they were U.S. Holders and, in the case of foreign corporations, may be subject to
an additional branch profits tax at a 30% rate or such lower rate as may be specified by an applicable
income tax treaty.
Information Reporting and Backup Withholding. In general, backup withholding and information
reporting will not apply to payment of cash in lieu of a fractional share of Pier 1 Imports’ common
stock to a Non-U.S. Holder pursuant to the reverse stock split if the Non-U.S. Holder certifies under
penalties of perjury that it is a Non-U.S. Holder and neither we nor the exchange agent has actual
knowledge to the contrary. Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules may be refunded or allowed as a credit against the Non-U.S. Holder’s
U.S. federal income tax liability, if any, provided that certain required information is timely furnished
to the IRS. In certain circumstances the amount of cash paid to a Non-U.S. Holder in lieu of a
fractional share of Pier 1 Imports’ common stock, the name and address of the beneficial owner and
the amount, if any, of tax withheld may be reported to the IRS.
Vote Required
The affirmative vote of a majority of the outstanding shares of common stock entitled to vote is
required to approve the amendment of the Certificate of Incorporation of Pier 1 Imports, Inc. to effect
a reverse stock split of Pier 1 Imports’ common stock having a split ratio between, and including,
1-for-2 and 1-for-20, as will be selected by the board of directors prior to the time of filing such
Certificate of Amendment with the Delaware Secretary of State. If a proxy card is signed and returned
but no direction is made, the persons named in your proxy will vote your shares ‘‘FOR’’ this proposal.
Any shares not voted (whether by abstention or otherwise) will have the same effect as a vote
‘‘AGAINST’’ this proposal.
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