Pier 1 2013 Annual Report Download - page 118

The targeted Profit Goal performance-based shares for a given fiscal year, vest pursuant to the following
schedule (with interpolation between the levels):
100% of the Profit Goal target – 100% of the shares;
96% of the Profit Goal target – 90% of the shares;
92% of the Profit Goal target – 80% of the shares;
88% of the Profit Goal target – 70% of the shares;
84% of the Profit Goal target – 60% of the shares; and
80% of the Profit Goal target – 50% of the shares.
Over each three-year performance (vesting) period, if the targeted Profit Goal is not satisfied in any fiscal year,
those Profit Goal performance-based shares that do not vest may still vest if the sum of consecutive years’ Profit
Goals equals or exceeds the sum of the individual consecutive fiscal years’ Profit Goal targets. The Profit Goal for
fiscal 2013 of $218,000,000 was exceeded, as shown in Table 4 above, and 33% of the Profit Goal performance-
based shares granted in fiscal 2013 vested upon the date of filing of Pier 1 Imports’ annual report on Form 10-K.
Approximately 42% of the performance-based shares granted in fiscal 2013 cliff vest as shown in Table 7
below within thirty days of the end of fiscal 2015, provided the NEO is employed on the vesting date. Vesting is
based on Pier 1 Imports’ percentile ranking within the rankings of the annual equivalent return of the TSR of Pier 1
Imports and a peer group using the average closing stock price of Pier 1 Imports and the peer group companies
during the twenty trading days at the beginning of fiscal 2013 and the average closing stock price during the twenty
trading days at the end of fiscal year 2015. The peer group is comprised of the companies in the Russell 1000
Specialty Retail Index, with the addition of any other specialty retailers in Pier 1 Imports’ fiscal 2013 peer group for
executive compensation purposes. For discussion purposes, Pier 1 Imports refers to these grants as the TSR
performance-based shares.
Table 7
Pier 1 Imports’ Percentile Rank
Within TSR Peer Group
Percent of Target Performance-Based
Shares Vested
91% and above 250%
81% - 90% 225%
76% - 80% 200%
70% - 75% 175%
61% - 69% 150%
56% - 60% 125%
50% - 55% 100%
41% - 49% 50%
40% and below 0%
The remaining 40% of shares granted in fiscal 2013 were time-based shares where the restrictions lapse over a
3-year period. These shares vested 33% on April 6, 2013, and will vest 33% on April 6, 2014 and 34% on April 6,
2015 provided that the NEO is employed on the applicable vesting date.
Retirement and Other Plans
Pier 1 Imports offers a supplemental retirement plan which is designed to provide certain executives with post-
employment financial security and to mitigate the effects of deferral limitations on highly compensated individuals
in qualified plans such as Pier 1 Imports’ 401(k) plan. The plan also assists Pier 1 Imports in attracting and retaining
executives. The plan is described and discussed below under the caption “Pension Benefits Table for the Fiscal Year
Ended March 2, 2013.”
36