Pier 1 2013 Annual Report Download - page 133

highest three-year average of annual salary and bonus offset by Social Security retirement benefits. Messrs. Smith
and Turner are each entitled to a lump-sum payment of the actuarial equivalent of their respective benefit.
Mr. Turner’s annual life annuity amount cannot exceed $500,000. Mr. Smith’s benefit calculation is not subject to
this limitation. For certain participants the plan also provides that in the event of disability or retirement, those
participants and their dependents have the lifetime right to participate in comparable major medical and
hospitalization insurance coverage as made available generally to Pier 1 Imports employees and their dependents. If
the executive elects such coverage, he or she must pay a portion of the total premium. In the event of termination of
employment for reasons other than cause and prior to retirement eligibility, the participant and his or her dependents
have the right to participate in such comparable major medical and hospitalization insurance coverage during the
15 years immediately after the date the participant attains age 65. If the participant elects such coverage, he or she
must pay the total premium associated with the coverage.
The following table shows the present value of each NEO’s total accumulated benefit under Pier 1 Imports’
Supplemental Retirement Plan as of the fiscal year ended March 2, 2013.
Name
Number of Years
Credited Service(1)
(#)
Present Value of
Accumulated
Benefit(2)
($)
Payments During Last
Fiscal Year
($)
Alexander W. Smith 13.67 $13,750,842 $0
Charles H. Turner 22 $ 5,953,906 $0
(1) For Mr. Turner, the number of years of credited service for plan purposes equals the years of credited
vesting service as determined by Pier 1 Imports’ 401(k) plan for the participant, regardless of
whether the participant is actually participating in the 401(k) plan. The years of credited service
shown for Mr. Turner equals his years of employment with Pier 1 Imports. Pursuant to his initial
employment agreement, Mr. Smith was entitled to participate in the Supplemental Retirement Plan so
as to achieve the same level of benefit as his accrued benefit under the supplemental executive
retirement plan of his former employer. Therefore, in fiscal 2008 Mr. Smith was credited with
10 years of plan participation upon enrollment in the plan and 6.67 years of credited service as of his
employment date with Pier 1 Imports. The additional 6.67 years of credited service accounts for
$6,709,445 of his total present value of accumulated benefit of $13,750,842. As of the end of fiscal
2013, Mr. Smith has achieved seven additional years of credited service based upon his employment
date.
(2) Includes the present value of medical insurance premiums payable in the event of early retirement.
Benefits under the plan for each participant are prorated for years of credited service with Pier 1 Imports of less
than 20 years. In addition, each participant becomes vested in that benefit based on years of plan participation under
the following schedule:
Years of Plan Participation Vesting Percentage
Less than 1 0%
1 but less than 2 10%
2 but less than 3 20%
3 but less than 4 30%
4 but less than 5 40%
5 but less than 6 50%
6 but less than 7 60%
7 but less than 8 70%
8 but less than 9 80%
9 but less than 10 90%
10 or more 100%
Vesting is accelerated to 100% upon an early retirement, normal retirement, termination of employment in certain
circumstances within 24 months of a change in control (“double-trigger”) of Pier 1 Imports, or death or disability of
the participant. Messrs. Smith and Turner each have more than 10 years of plan participation.
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