Pier 1 2011 Annual Report Download - page 110

Pier 1 Imports is presenting this proposal, which gives you as a shareholder the opportunity to inform Pier 1
Imports as to how often you wish to include a proposal, similar to PROPOSAL NO. 3 above, in our proxy
statement. In particular, we are asking whether the advisory vote should occur every year, every other year, or every
three years. Pier 1 Imports asks that you support a frequency period of every year (an annual vote) for future
non-binding, advisory shareholder votes on the compensation of our named executive officers.
Pier 1 Imports’ compensation policies and procedures are developed with short- and long-term objectives in
mind, which is consistent with annual shareholder approval. Setting an annual period for holding this shareholder
vote will enhance shareholder communication by providing a clear, simple means for Pier 1 Imports to obtain
information on investor sentiment about our executive compensation policies, principles, objectives and practices.
We believe an annual advisory vote will be the most effective timeframe to engage with shareholders to understand
and respond to the vote results.
As with your vote on PROPOSAL NO. 3 above, your vote on this proposal is advisory, and therefore not
binding on Pier 1 Imports, the compensation committee, or the board of directors. The vote will not be construed to
create or imply any change to the fiduciary duties of Pier 1 Imports or the board of directors, or to create or imply
any additional fiduciary duties for Pier 1 Imports or the board of directors. However, our board of directors values
the opinion of our shareholders and if the frequency period of every year does not receive the highest number of
votes, we will consider our shareholders’ concerns and the board of directors will evaluate any appropriate next
steps.
Shareholders have the opportunity to choose among four options (holding the vote every year, every other year,
or every three years, or abstaining) and, therefore, shareholders will not be voting to approve or disapprove the
recommendation of the board of directors. The frequency (every year, every other year, or every three years) that
receives the highest number of votes of the shares of common stock present in person or represented by proxy at the
annual meeting and entitled to vote on this proposal will indicate the choice of shareholders as the frequency for
future non-binding, advisory shareholder votes on the compensation of Pier 1 Imports’ named executive officers.
Because Section 14A prescribes the format in which this proposal is submitted to shareholders, and does not permit
the customary “FOR,” “AGAINST” and “ABSTAIN” choices, abstentions will not be counted as a vote for or
against any of the choices. Broker non-votes will not be considered entitled to vote on this proposal and will not be
counted.
The board of directors unanimously recommends a vote for a frequency of “EVERY YEAR” for future
non-binding, advisory shareholder votes on the compensation of Pier 1 Imports’ named executive officers.
PROPOSAL NO. 5 – Proposal to Ratify the Audit Committee’s Approval to Engage Ernst & Young LLP as
Pier 1 Imports’ Independent Registered Public Accounting Firm for Fiscal 2012
The audit committee has approved engaging Ernst & Young LLP as Pier 1 Imports’ independent registered
public accounting firm for fiscal 2012. Ernst & Young LLP served as Pier 1 Imports’ independent registered public
accounting firm for fiscal 2011 and has served in that capacity since fiscal 1996. Although approval or ratification
of such engagement is not required, Pier 1 Imports is seeking the shareholders’ ratification of the audit committee’s
approval to engage Ernst & Young LLP because we believe that allowing shareholders to express their view on the
matter is good corporate governance. SEC Rule 10A-3(b)2 requires that the audit committee “…must be directly
responsible for the appointment…of any registered public accounting firm….” Since the audit committee must
follow this requirement, the ratification is not binding on Pier 1 Imports. Any failure of the shareholders to ratify the
audit committee’s approval to engage Ernst & Young LLP as Pier 1 Imports’ independent registered public
accounting firm would, however, be considered by the audit committee in determining whether to engage Ernst &
Young LLP.
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 ratify the approval to engage Ernst & Young
LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2012. Abstentions will be counted as
represented and entitled to vote on this proposal and will have the effect of a vote “AGAINST” the proposal.
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