Pier 1 2014 Annual Report Download - page 116

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EXECUTIVE COMPENSATION
Table 6
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 2014 were time-based shares where the restrictions lapse over a 3-year period.
These shares vested 33% on April 12, 2014, and will vest 33% on April 12, 2015 and 34% on April 12, 2016 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 1, 2014.”
In addition, for the same purposes, Pier 1 Imports offers a non-qualified deferred compensation plan known as the Pier 1 Imports,
Inc. Deferred Compensation Plan to its executives and key members of management. The plan also assists Pier 1 Imports in
attracting and retaining executives and key members of management. The plan is described below under the caption “Non-
Qualified Deferred Compensation Table for the Fiscal Year Ended March 1, 2014.”
Chief Executive Officer Compensation
As noted, Mr. Smith’s employment with Pier 1 Imports as its president and chief executive officer is governed by an employment
agreement. Pier 1 Imports utilizes an employment agreement to assure continuity of Mr. Smith’s services and to mitigate
Mr. Smith’s risk of involuntary termination (other than for cause) or Mr. Smith’s voluntary termination based on a good reason,
both events as defined in the agreement.
Mr. Smith’s employment since joining the company in February of 2007 has been governed by employment agreements. On
June 13, 2012, Mr. Smith and Pier 1 Imports entered into the second renewal and extension of his employment agreement,
which became effective March 3, 2013, the first day of fiscal 2014. The term of this agreement is for three fiscal years ending on
February 27, 2016, the last day of fiscal 2016. The agreement is renewable one fiscal year at a time beginning on February 28,
2016, unless Pier 1 Imports or Mr. Smith gives notice of non-renewal at least 60 days prior to that date.
Mr. Smith’s base salary for fiscal 2014 as provided in his employment agreement was $1,250,000. The agreement provides that
the base salary may be adjusted from time-to-time by the compensation committee. He also is eligible to participate in Pier 1
Imports’ short-term and long-term cash incentives during the term of the agreement.
Mr. Smith participated in the short-term incentive program for executives for fiscal 2014. However, the Realized Profit for fiscal
2014 was below the threshold Profit Goal set for fiscal 2014 and, as a result, Mr. Smith did not earn a fiscal 2014 short-term
incentive award. Achievement of the threshold Profit Goal for fiscal 2014 would have resulted in a payment equal to 12% of
Mr. Smith’s base salary, while achievement of 100% of the Profit Goal for fiscal 2014 of $274,000,000 would have resulted in a
payment equal to 115% of Mr. Smith’s base salary and achievement of Realized Profit of $300,000,000 or more would have
resulted in a payment equal to 288% of Mr. Smith’s base salary. That maximum award would be subject to the cap on cash
awards in the Pier 1 Imports, Inc. 2006 Stock Incentive Plan of $3,000,000 during any calendar year (240% of Mr. Smith’s base
salary). Any portion over $3,000,000 would be mandatorily deferred under Mr. Smith’s employment agreement with interest
credited at 3% per year and the deferred amounts plus interest paid upon the expiration of the six-month period following
termination of employment.
38 PIER 1 IMPORTS, INC. 2014 Proxy Statement