Pier 1 2011 Annual Report Download - page 107

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Eligibility and Participation
The 2006 plan is administered by the compensation committee of the board of directors and all members of the
compensation committee are independent directors. The plan authorizes the compensation committee to grant
awards to employees of Pier 1 Imports and its affiliates and directors of Pier 1 Imports. Based on past compensation
practices, Pier 1 Imports expects that a range of 600 to 650 persons annually will receive awards under the plan.
Business Criteria on Which Performance Goals are Based
The compensation committee may grant performance awards that may be paid in shares of common stock, cash
or a combination of both. The compensation committee will establish the number of shares subject to or the
maximum cash value of the performance award, as applicable, and the performance period over which the
performance applicable to the award will be measured, and the performance measures which constitute the business
criteria on which the performance goal for a performance award is based. The performance measures established by
the compensation committee for a performance award will be based on the following business criteria, either
individually, alternatively, or in any combination:
• the fair market value of Pier 1 Imports’ common stock;
• Pier 1 Imports’ earnings per share;
• Pier 1 Imports’ or an affiliate’s market share;
• the market share of a business unit of Pier 1 Imports designated by the compensation committee;
• Pier 1 Imports’ or an affiliate’s sales;
• the sales of a business unit of Pier 1 Imports designated by the compensation committee;
• the net income (before or after taxes) of Pier 1 Imports, an affiliate or any business unit of Pier 1
Imports designated by the compensation committee;
• the cash flow (including one or more of cash flows from operating, investing and financing activities)
or return on investment of Pier 1 Imports, an affiliate or any business unit of Pier 1 Imports
designated by the compensation committee;
• the earnings or income before or after interest, taxes, depreciation, and/or amortization of Pier 1
Imports, an affiliate or any business unit of Pier 1 Imports designated by the compensation
committee (including but not limited to earnings [including one or more of net profit after tax; gross
profit; operating profit; earnings before interest; earnings before interest and taxes; earnings before
interest, taxes and depreciation; earnings before interest, taxes, depreciation and amortization; and
net earnings], earnings per share, earnings per share from continuing operations, operating income,
pre-tax income, operating income margin, net income and margins [including one or more of gross,
operating and net income margins]);
• economic value added (measured by factors such as sales, revenues, costs, expenses, returns
[including one or more of return on actual or proforma assets, net assets, non-cash assets, equity,
common equity, investment, capital, invested capital, and net capital employed], economic value
added, cash generation, cost reductions, unit volume, working capital and strategic plan development
and implementation);
• the return on capital, assets or shareholders’ equity achieved by Pier 1 Imports or an affiliate; or
• the total shareholders’ return (including total shareholder return relative to an index or peer group)
achieved by Pier 1 Imports.
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