Pier 1 2013 Annual Report Download - page 134

No NEO who participates in the plan qualifies for normal retirement under the plan, which requires a
participant’s attainment of age 65. A participant qualifies for early retirement if the participant has at least 10 years
of plan participation and retires at or after age 55 and before age 65. If a participant retires from Pier 1 Imports after
age 55 but before age 65, the calculated benefit prior to adjustment for Social Security benefits is reduced by 5% for
each year that retirement precedes age 65. Messrs. Smith and Turner are eligible for early retirement.
Refer to note #5 to the Pier 1 Imports, Inc. consolidated financial statements in the 2013 Form 10-K for a
discussion of the valuation method and material assumptions applied in quantifying the present value of the current
accrued benefit for the plan shown in the “Pension Benefits Table for the Fiscal Year Ended March 2, 2013” above.
Non-Qualified Deferred Compensation Table for the Fiscal Year Ended March 2, 2013
The following table shows the value as of the fiscal year ended March 2, 2013 of each NEO’s total benefit
under the non-qualified deferred compensation plans of Pier 1 Imports in which the executive participates. Pier 1
Imports’ non-qualified deferred compensation plans are:
•Pier 1 Benefit Restoration Plan II – The Pier 1 Benefit Restoration Plan II (“BRP II”) permitted select
members of management and highly compensated employees of Pier 1 Imports to defer compensation.
Additionally, Pier 1 Imports recognized the value of the past and present services of employees
participating in the BRP II by making matching contributions to employee deferrals plus paying interest
on the deferral and match amounts.
BRP II participants could defer pre-tax amounts of up to 20% of their compensation (generally W-2
earnings). Participants’ contributions and the interest earned on those contributions are fully vested. No
loans are permitted. Pier 1 Imports’ matching contribution was (i) 100% of the first one percent of the
participant’s compensation deferral, and (ii) 50% of the next four percent of the participant’s
compensation deferral. Matching contributions and the interest earned on those contributions are subject
to the same vesting requirements as Pier 1 Imports’ 401(k) retirement plan regardless of whether the
participant is actually participating in the 401(k) plan. The 401(k) vesting schedule is 20% per year of
service (as defined in the plan) beginning with two years of service. Participants are fully vested in Pier 1
Imports’ matching contributions plus earnings at six years of service with Pier 1 Imports.
Each participant’s deferral amount plus the Pier 1 Imports match is credited at least quarterly with an
amount of interest at an annual rate equal to a daily average Moody’s Corporate Bond Index plus 1%.
Over the last three fiscal years, the annual interest rates have ranged from 4.72% to 7.47%. During fiscal
2013, the interest rates were 5.81% through December 31, 2012 and 4.72% January 1, 2013 through
March 2, 2013. Unless participants elect to have their account balance paid out to them in five annual
installments, then upon separation from Pier 1 Imports their current balance is paid out to them in a lump-
sum distribution, subject to delay as required by the deferred compensation taxation laws generally
referred to as 409A.
During fiscal 2011, BRP II was closed to further deferral elections by participants. The final participant
contributions and Pier 1 Imports matching contributions to BRP II were credited to the plan in fiscal 2012.
Account balances in BRP II will continue to earn interest at an annual rate as described above. Effective
January 1, 2011, the Pier 1 Imports, Inc. Deferred Compensation Plan (“DCP”) described below was
adopted.
•Pier 1 Imports, Inc. Deferred Compensation Plan – The DCP permits select members of management
and highly compensated employees of Pier 1 Imports to defer up to 50% of their compensation (generally
W-2 earnings). Participants’ compensation deferrals and earnings on those deferrals are fully vested. No
loans are permitted. Pier 1 Imports’ matching contribution is (i) 100% of the first one percent of the
participant’s compensation deferral, and (ii) 50% of the next four percent of the participant’s
compensation deferral. Matching contributions and the earnings on those contributions are subject to the
same vesting requirements as Pier 1 Imports’ 401(k) retirement plan regardless of whether the participant
is actually participating in the 401(k) plan. The 401(k) plan’s vesting schedule is 20% per year of service
(as defined in the plan) beginning with two years of service. Participants are fully vested in Pier 1
Imports’ matching contributions plus earnings at six years of service with Pier 1 Imports.
52