Pier 1 2010 Annual Report Download - page 113

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delivery of the shares to the participant pursuant to the plan. Shares of common stock held by the plan in a
participant’s account may not be sold, assigned, pledged or otherwise dealt with by the participant, and the
participant may request that all of his or her shares be delivered to him or her at any time. Any sale, assignment,
pledge or other transfer of shares held by the plan in a participant’s account, however, will result in the automatic
withdrawal of the participant from the plan. Upon termination of employment, the employee’s participation in the
plan will end and his or her shares will be distributed upon request or automatically at the same time as shares are
distributed to participants as described in the following sentence. All shares in a participant’s account, however, will
be automatically distributed to the participant pursuant to the plan at least once each calendar year without affecting
the participant’s participation in the plan.
A participant’s account is credited with all dividends, if any, paid on full and fractional shares held in his or her
account. All cash dividends are reinvested under the plan in common stock.
Compensation Deductions and Our Contributions
A participant must specify the amount to be withheld from his or her compensation, with a minimum of $2.50
per week and a maximum of 20% of his or her compensation. The plan provides that non-employee directors may
contribute to the plan all or a portion of their cash director fees. Subject to the plan’s limitations, compensation
deductions may be increased or decreased at any time by the participant. Pier 1 Imports will contribute to the plan
an amount equal to 25% of each participant’s compensation deduction. No directors participated in the plan during
the last fiscal year.
Amendment or Termination of the Plan
The board of directors may amend, suspend or terminate the plan at any time. An amendment, suspension or
termination will not result in the forfeiture of any funds contributed by a participant or Pier 1 Imports, or of any
shares or fractional shares purchased for a participant, or of any dividends or other distributions with respect to such
shares, that were effective before the effective date of the amendment, suspension or termination. Certain material
amendments to the plan must be submitted to our shareholders for their approval.
U.S. Federal Income Tax Effects
The amount of Pier 1 Imports’ contribution to the plan is treated as “earned income” to the participant, which is
subject to federal income tax at ordinary rates. Assuming federal income tax withholding requirements are satisfied,
Pier 1 Imports receives a deduction for participants’ and Pier 1 Imports’ contributions to participants’ accounts.
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