Pier 1 2009 Annual Report Download - page 148

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Grants of Plan-Based Awards for the Fiscal Year Ended February 28, 2009
During fiscal 2009, Pier 1 Imports maintained a short-term incentive plan (pursuant to the Pier 1
Imports, Inc. 2006 Stock Incentive Plan) for its executives and key members of management in which
the named executive officers participated. Under the plan, incentive awards in the form of cash are
paid if Pier 1 Imports attains certain targeted levels of adjusted consolidated operating cash earnings
before interest, taxes, depreciation, and amortization from all domestic and international operations,
but not including discontinued operations, unusual or non-recurring charges nor recurring non-cash
items, each as determined by the compensation committee, or a subcommittee. We refer to this
measure as the Profit Goal. The participant must be employed at the end of the fiscal year to receive
any cash incentive award. An executive’s cash incentive award potential is expressed as a percentage of
his annual base salary for the fiscal year. The cash incentive award target for Mr. Smith was 100% of
his annual base salary and for Messrs. Turner, Humenesky and Jacobs and Ms. Leite was 75% of their
annual base salary. Mr. Walker was not employed with Pier 1 Imports at the end of fiscal 2009. The
short-term incentive plan is further described in the Compensation Discussion and Analysis above.
Neither the threshold nor the minimum level of the Profit Goal was achieved for fiscal 2009, and no
short-term incentive compensation was earned pursuant to the plan.
During fiscal 2009, Pier 1 Imports granted under the Pier 1 Imports, Inc. 2006 Stock Incentive
Plan time-based restricted stock awards. These time-based awards vest 33%, 33% and 34% each year
over a three-year period beginning on the first anniversary of the grant date provided that the
participant is employed at the vesting date. Time-based restricted stock grants for fiscal 2009 to
Messrs. Turner, Humenesky and Jacobs and Ms. Leite were 15,000 shares each and to Mr. Walker were
10,000 shares. Mr. Walker forfeited all of his unvested restricted stock awards upon his termination.
Mr. Smith was not granted any of these awards in fiscal 2009. Long-term incentives to Mr. Smith are
pursuant to his employment agreement as described in the Compensation Discussion and Analysis
above.
During fiscal 2009, Pier 1 Imports granted under the Pier 1 Imports, Inc. 2006 Stock Incentive
Plan non-qualified stock options of 35,000 to Mr. Walker and 45,000 each to Messrs. Turner,
Humenesky and Jacobs and Ms. Leite that vest equally over a four-year period beginning on the first
anniversary of the grant date. The options terminate 10 years from the date of grant. Mr. Walker’s
stock option vesting accelerated pursuant to the stock option grant agreement upon the end of his
employment given his age and years of service with Pier 1 Imports. Those fully vested options may be
exercised during the three years following his termination. Mr. Smith was not granted any of these
awards in fiscal 2009. Long-term incentives to Mr. Smith are pursuant to his employment agreement as
described in the Compensation Discussion and Analysis above.
The following table sets forth information relating to grants of plan-based awards during the fiscal
year ended February 28, 2009 to the executive officers named in the Summary Compensation Table.
Pier 1 Imports distributes long-term incentive awards as soon as possible following receipt of all
required approvals. Stock options are granted at the closing price of Pier 1 Imports’ common stock on
the date of the grant. Pier 1 Imports’ practice is for the grants of stock options and restricted stock to
be made on the day following board of directors approval allowing Pier 1 Imports to provide
information to the market, if any, that may require disclosure as a result of Pier 1 Imports’ board of
directors meeting at which the grants were approved. Delays in the grant date may occur pending
quarterly earnings releases and conference calls or as otherwise directed by the board of directors. For
fiscal 2009, the grant date was delayed pending Pier 1 Imports’ fourth quarter and year-end earnings
release and conference call.
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