Pier 1 2011 Annual Report Download - page 118

Download and view the complete annual report

Please find page 118 of the 2011 Pier 1 annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

The plan required participants to be employed with Pier 1 Imports at the end of each respective quarter and
year-end to receive an incentive cash award, if any, for that performance period. The plan allowed Pier 1 Imports’
chief executive officer to reduce the cash award of a participant as a result of individual performance. Pier 1 Imports
believes that these target percentage levels were competitive when compared to Pier 1 Imports’ peer group as
identified at the beginning of the fiscal year.
The actual quarterly Profit Goals shown in Table 2 above resulted in participants earning 100% of their fiscal
2011 quarterly incentive cash awards. The actual annual Profit Goal attained for fiscal 2011 was $128,700,000 and
the short-term incentive plan achieved its desired intent of increasing the operational and financial year-over-year
performance of Pier 1 Imports. That actual annual Profit Goal resulted in participants earning the maximum of their
annual incentive cash award. When combined, the quarterly and annual incentive cash awards had the effect of each
participant’s short-term incentive cash award equaling 200% of their respective fiscal 2011 short-term incentive
potential.
Long-term Incentives – Pier 1 Imports designs its long-term incentive awards to support Pier 1 Imports’ overall
objectives of long-term company profitability, competitiveness in the retail industry, and retention of executives.
Pier 1 Imports’ long-term incentive plan for fiscal 2011 was comprised of restricted stock grants that were equally
divided between time-based and performance-based shares, except for Mr. Turner who was granted an additional
18,000 time-based shares in special recognition for his long-term contributions in returning Pier 1 Imports to
profitability. Pier 1 Imports believes that restricted stock provides a long-term incentive opportunity that is both
competitive in the retail industry and serves as a retention tool.
The restrictions on time-based shares lapse over a 3-year period and vested 33% on April 9, 2011, and will vest
33% on April 9, 2012 and 34% on April 9, 2013 provided that the participant is employed on each such date. A
summary of the time-based shares awarded to the named-executive officers in fiscal 2011 is included in Table 4
below.
Table 4
Named Executive Officer Time-Based Shares
(#)
Vesting
Charles H. Turner 42,000
33% on 4/9/2011
33% on 4/9/2012
34% on 4/9/2013
Catherine David 18,000
33% on 4/9/2011
33% on 4/9/2012
34% on 4/9/2013
Gregory S. Humenesky 12,500
33% on 4/9/2011
33% on 4/9/2012
34% on 4/9/2013
Sharon M. Leite 15,500
33% on 4/9/2011
33% on 4/9/2012
34% on 4/9/2013
The performance-based shares granted in fiscal 2011 vest 33% upon Pier 1 Imports satisfying the targeted
Profit Goal established by the compensation committee for fiscal 2011 (the same measure utilized for the annual
short-term incentives described above) and will vest 33% and 34% for each of the following two fiscal years,
respectively, upon Pier 1 Imports satisfying the targeted Profit Goal established by the compensation committee for
the respective fiscal year. Vesting for each fiscal year is also conditioned upon the named executive officer being
employed on the date of filing of Pier 1 Imports’ annual report on Form 10-K with the SEC for the applicable fiscal
year.
34