Pier 1 2012 Annual Report Download - page 89

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Governance Guidelines, Code of Business Conduct and Ethics and charters for the audit, compensation, and
nominating and corporate governance committees are available on Pier 1 Imports’ web site at www.pier1.com at the
Investor Relations – Corporate Governance link.
Board Leadership Structure
Pier 1 Imports’ bylaws require that the directors elect annually from among themselves a chairman of the
board. The bylaws, however, grant the board of directors discretion as to whether the chairman of the board is an
employee or an officer of Pier 1 Imports. A non-officer, non-employee elected as chairman of the board is
designated as the “non-executive” chairman of the board. Pier 1 Imports’ corporate governance guidelines and
policies contain general guidance that the positions of chairman of the board and chief executive officer should be
held by separate individuals and that the chairman of the board should be a “non-executive.” Provisions are made in
the guidelines and policies for an independent lead director if the roles of chairman of the board and chief executive
officer are combined.
During the last fiscal year, the chairman of the board and chief executive officer roles were held by separate
individuals, and the chairman of the board was a “non-executive” since he was neither an employee nor an officer of
Pier 1 Imports. Currently, the chairman of the board is a non-executive. This structure of separate individuals
holding these positions focuses board leadership and company leadership in separate and distinct individuals. Each
leader can direct her or his respective group on the objectives at hand while at the same time developing and
implementing strategic issues, financial issues and operational policies which affect the short- and long-term welfare
of Pier 1 Imports.
Director Independence
It is Pier 1 Imports’ policy that the board of directors will at all times consist of a majority of independent
directors. In addition, all members of the audit committee, compensation committee, and nominating and corporate
governance committee must be independent directors. To be considered independent, a director must satisfy both
the subjective and objective independence requirements established by the New York Stock Exchange (“NYSE”). In
assessing independence under the subjective test, the board of directors takes into account the standards in the
objective tests, and reviews and discusses additional information provided by the directors and Pier 1 Imports with
regard to each director’s business and personal activities as they may relate to Pier 1 Imports and Pier 1 Imports’
management. Based on the foregoing, as required by NYSE rules, the board of directors makes a subjective
determination as to each independent director that no material relationship exists with Pier 1 Imports. The board of
directors will broadly consider all relevant facts and circumstances relating to a director in determining whether that
director is independent.
Based on the NYSE independence requirements, the board of directors has determined that seven of the eight
members of the board of directors are independent. They are directors Claire H. Babrowski, John H. Burgoyne,
Hamish A. Dodds, Michael R. Ferrari, Brendan L. Hoffman, Terry E. London and Cece Smith. Pier 1 Imports’
president and chief executive officer, Alexander W. Smith, is the eighth member of the board of directors.
Independence for the non-employee directors was considered under both the subjective and objective standards of
the NYSE. In other words, none of the non-employee directors was disqualified from independent status under the
objective standards, and under the subjective standard each non-employee director was determined not to have a
material relationship with Pier 1 Imports.
Meetings of Independent Directors without Management Present
The independent directors of Pier 1 Imports met without management present four times during the last fiscal
year. The non-executive chairman of the board of directors presided over these meetings.
Procedures for Communicating with Directors
The board of directors has established a process by which shareholders and other interested parties can send
communications to board members. Shareholders and other interested parties can send written communications to
one or more members of Pier 1 Imports’ board of directors, addressed to:
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