Pier 1 2011 Annual Report Download - page 135

Potential Payments upon Termination or Change in Control
The following table shows potential payments to our named executive officers under existing contracts,
agreements, plans or arrangements to which they are a party for various scenarios including a change in control or
termination of employment, assuming the event occurred on February 26, 2011 and, where applicable, using the
closing price of Pier 1 Imports’ common stock of $9.78 (the NYSE closing price on February 25, 2011). The table
below does not include normal (versus early) retirement payout information because as of February 26, 2011 none
of the named executive officers who participate in Pier 1 Imports’ Supplemental Retirement Plan was eligible for
normal retirement. For additional information regarding the Supplemental Retirement Plan, see the information
above under the caption “Pension Benefits Table for the Fiscal Year Ended February 26, 2011.” Potential payments
to our named executive officers upon termination of employment under Pier 1 Imports’ non-qualified deferred
compensation arrangements are discussed above under the caption “Non-Qualified Deferred Compensation Table
for the Fiscal Year Ended February 26, 2011.”
These disclosures are based on the terms and provisions of the agreements, plans and arrangements as they
existed at the end of Pier 1 Imports’ fiscal 2011, and Pier 1 Imports’ interpretation of those terms and provisions at
that time. One or more of the plans identified may allow the administrative committee of such plan to amend the
plan or award grant agreements pursuant to the plan, subject in particular situations to certain restrictions. In such an
event, the disclosures shown below would vary depending on the amendment or restriction.
In fiscal 2010, as noted in the fiscal 2010 Compensation Discussion and Analysis, Pier 1 Imports established a
long-term incentive cash award under the Pier 1 Imports, Inc. 2006 Stock Incentive Plan. The profit goals (as
described in that award) for fiscal 2010 and fiscal 2011 were met and each participant has earned two-thirds of the
long-term incentive cash award. All awards earned under the long-term incentive cash award are payable at the end
of fiscal 2012 provided the participant is employed on such date. Under the 2006 plan, upon a corporate change (as
defined in the plan) the plan’s administrative committee may, in its discretion, pay participants an amount equal to
the earned portion of the long-term incentive cash award. The table below does not include potential payments of
the earned two-thirds of the long-term incentive cash awards because (a) it has not been the normal policy of the
administrative committee to accelerate the payment of long-term incentive awards and (b) the earned amounts are
shown above in the table included under the caption “Summary Compensation Table for the Fiscal Years Ended
February 26, 2011, February 27, 2010 and February 28, 2009.”
Mr. Smith’s employment agreement contains non-solicitation and non-competition terms binding Mr. Smith
for one year following termination of employment. Additionally, stock option grants under the Pier 1 Imports, Inc.
1999 Stock Plan and 2006 plan (as described in the footnotes below) are subject to certain non-competition,
non-solicitation and confidentiality agreements which, if violated by an optionee during employment, or within
three years after termination of employment in the event of early retirement, will result in termination of the option
grant.
51