Pier 1 2012 Annual Report Download - page 59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
contribute up to 20% of the eligible portions of compensation. The Company contributes an amount equal to 25%
of the employee’s contributions. Company contributions to the plan were $342,000, $179,000 and $16,000 in
fiscal years 2012, 2011 and 2010, respectively. The Company’s stock purchase plan was suspended during
portions of fiscal years 2011 and 2010.
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 25,
2012, all 20,000,000 shares of preferred stock were available for future issuance.
Dividends – On April 5, 2012, subsequent to year end, the Company’s Board of Directors declared a
$0.04 per share quarterly cash dividend on the Company’s outstanding shares of common stock. The $0.04
quarterly cash dividend will be paid on May 2, 2012 to shareholders of record on April 18, 2012.
Shares reserved for future issuances – As of February 25, 2012, the Company had approximately
10,828,019 shares of common stock reserved for future issuances under the stock plans. This amount includes
stock options outstanding, director deferred stock units and shares available for future grant.
Share repurchase plan – On March 25, 2011, the Board of Directors authorized an initial $100,000,000
for repurchases of the Company’s common stock. As of September 6, 2011, the Company had completed this
$100,000,000 initial share repurchase program and purchased a total of 9,498,650 shares of its common stock at a
weighted average cost of $10.53 per share. On October 13, 2011, the Board of Directors authorized a new
$100,000,000 share repurchase program and $100,000,000 remained available for repurchase at the end of fiscal
2012. Subsequent to year end, the Company utilized a total of $15,160,000 to repurchase 845,400 shares of the
Company’s common stock at a weighted average price per share, including fees, of $17.93 and as of April 20,
2012, $84,840,000 remained available for repurchase.
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 2012, 2011 and 2010, the Company received payments
related to this agreement of $0, $6,250,000 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
agreement, the Company continued to support the card through marketing programs and receive additional
payments over the life of the agreement for transaction level incentives, marketing support and other program
terms.
On December 30, 2010, the Company entered into a new program agreement with Chase, effective
January 1, 2011, with an original term of 18 months (the term was subsequently reduced to 15 months when
conversion to a new provider was completed). In conjunction with this agreement, the Company and Chase
terminated the original program agreement between the Company and Chase in consideration of payment to the
Company from Chase of $28,326,000 plus all remaining sums due to the Company by Chase. The Company was
entitled to future payments over the term of the new program agreement based on revolving credit card sales, and
certain other credit and account related matters. In addition, the Company received total payments of $1,574,000,
$4,489,000 and $8,738,000 related to these program agreements during fiscal 2012, 2011 and 2010, respectively.
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