Pier 1 2011 Annual Report Download - page 108

Performance measures established for an award may thereafter be subject to adjustment for specified
significant unusual or non-recurring or recurring non-cash items or events, including but not limited to (a) asset
write-downs; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting
principles or other laws or provisions affecting reported results; (d) any reorganization and restructuring programs;
(e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 [now codified as
the Financial Accounting Standards Board’s Accounting Codification Standards subtopic 225-20, Extraordinary and
Unusual Items] and/or unusual or non-recurring items discussed in management’s discussion and analysis of
financial condition and results of operations appearing in Pier 1 Imports’ annual report to shareholders for the
applicable year; (f) discontinued operations, acquisitions or divestitures; and (g) foreign exchange and/or currency
translation gains and losses. The performance measures may be absolute, relative to one or more other companies,
or relative to one or more indexes, and may be contingent upon future performance of Pier 1 Imports, or any
affiliate, division (including business units and lines of business), or department of Pier 1 Imports.
Maximum Award
The maximum number of shares of Pier 1 Imports’ common stock that may be subject to awards denominated
in shares of Pier 1 Imports’ common stock granted to any one individual during any calendar year may not exceed
375,000 shares and the maximum amount of compensation that may be paid under all performance awards
denominated in cash (including the fair market value of any shares paid in satisfaction of such performance awards)
granted to any one individual during any calendar year may not exceed $3 million.
General
The board of directors believes that it is in the best interests of Pier 1 Imports and its shareholders to enable
Pier 1 Imports to implement compensation arrangements that qualify as tax-deductible performance-based
compensation under the 2006 plan. The board of directors is therefore asking shareholders to approve, for
Section 162(m) purposes, the material terms of the performance goals set forth above. However, nothing in this
proposal precludes the board of directors or the compensation committee from making any payment or granting
awards that do not qualify for tax deductibility under Section 162(m).
Shareholders are not being asked to approve any amendment to the plan or to re-approve the plan itself. The
complete text of the plan can be found as Exhibit 10.10 to the 2011 Form 10-K.
Vote Required
The affirmative vote of a majority of the shares of common stock present in person or represented by proxy at
the annual meeting and entitled to vote on this proposal is required to approve the material terms of the performance
goals under the Pier 1 Imports, Inc. 2006 Stock Incentive Plan for the purposes of compensation deductibility under
Section 162(m) of the Internal Revenue Code. Abstentions will be counted as represented and entitled to vote on
this proposal and will have the effect of a vote “AGAINST” the proposal. Broker non-votes will not be considered
entitled to vote on this proposal and will not be counted in determining the number of shares necessary for approval
of the proposal.
The board of directors unanimously recommends a vote “FOR” approval of the material terms of the
performance goals under the Pier 1 Imports, Inc. 2006 Stock Incentive Plan for the purposes of compensation
deductibility under Section 162(m) of the Internal Revenue Code.
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