Pier 1 2011 Annual Report Download - page 62

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
there was $5,436,000 of total unrecognized compensation expense related to restricted stock that will be
recognized over a weighted average period of 1.88 years. The total fair value of restricted stock awards vested
was $2,454,000, $1,648,000 and $1,076,000 in fiscal 2011, 2010 and 2009, respectively.
Director deferred stock units – The 2006 Plan and the 1999 Stock Plan also authorize director deferred
stock unit awards to non-employee directors. During fiscal 2011, each director deferred a portion of their
director’s cash fees into a deferred stock unit account. The annual retainer fees deferred (other than committee
chairman and chairman annual retainers) received a 25% matching contribution from the Company in the form of
director deferred stock units. As of February 26, 2011 and February 27, 2010, there were 747,262 shares and
1,002,287 shares deferred, but not delivered, under the 2006 Plan and the 1999 Stock Plan. All future deferred
stock unit awards will be from shares available for grant under the 2006 Plan. During fiscal 2011, approximately
117,537 director deferred stock units were granted, 339,513 were delivered, and 33,049 were cancelled.
Compensation expense for the director deferred stock awards was $579,000, $149,000 and $1,015,000 in fiscal
2011, 2010 and 2009, respectively.
Stock purchase plan – Substantially all Company employees and all non-employee directors are eligible
to participate in the Pier 1 Imports, Inc. Stock Purchase Plan under which the Company’s common stock is
purchased on behalf of participants at market prices through regular payroll deductions. Each employee may
contribute up to 20% of the eligible portions of compensation. The Company contributes 25% of the employee’s
contributions. Prior to June 20, 2008, a participant could contribute up to 10% of eligible compensation, and the
Company contributed from 10% to 100% of the participant’s contribution, depending on length of participation
and date of entry into the plan. Company contributions to the plan were $179,000, $16,000 and $263,000 in fiscal
years 2011, 2010, and 2009, respectively. The Company’s stock purchase plan was suspended during portions of
fiscal 2011, 2010, and 2009.
Preferred Stock – On July 1, 2009, the shareholders of the Company approved an amendment to increase
the authorized number of Pier 1 Imports’ shares of preferred stock from 5,000,000 shares to 20,000,000 shares; to
shorten the description of the authority of the Board of Directors to issue such shares; and to eliminate the terms
and provisions of the Formula Rate Preferred Stock from the Certificate of Incorporation. As of February 26,
2011, all 20,000,000 shares of preferred stock were available for future issuance.
Shares reserved for future issuances – As of February 26, 2011, the Company had approximately
12,353,000 shares reserved for future issuances under the stock plans. This amount includes stock options
outstanding, director deferred units and shares available for future grant.
Share repurchase plan – Subsequent to year end, the Company’s Board of Directors approved an initial
share repurchase program that authorizes the repurchase of up to $100,000,000 of the Company’s common stock
in open market or private transactions. The timing of the repurchases will depend on several factors including,
but not limited to, prevailing market conditions and prices.
NOTE 8 – PROPRIETARY CREDIT CARD INFORMATION
During fiscal 2007, the Company sold its proprietary credit card operations to Chase Bank USA, N.A.
(“Chase”). The sale was comprised of the Company’s proprietary credit card receivables, certain charged-off
accounts, and the common stock of Pier 1 National Bank. The Company received cash proceeds for the majority
of the sales price and was entitled to receive additional proceeds of $10,750,000, plus any accrued interest, over
the life of a long-term program agreement. In fiscal 2011, 2010 and 2009, the Company received payments
related to this agreement of $6,250,000, $1,500,000 and $1,500,000, respectively. In addition, the Company and
Chase entered into a private-label credit card program agreement with an original term of ten years. Under this
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