Pier 1 2014 Annual Report Download - page 129

EXECUTIVE COMPENSATION
(2) Generally, under grant agreements pursuant to the 2006 plan, termination of employment for any reason results in a forfeiture to Pier 1 Imports of all unvested restricted stock awards.
However, as discussed in footnote 7 below, all shares of Mr. Smith’s restricted stock awarded pursuant to his employment agreement vest in the event of a voluntary good reason termination
or an involuntary without cause termination. The amounts shown in the table assume that the acceleration of vesting discussed in footnote 4 or 5 below does not occur upon a voluntary
termination of employment.
(3) Under the 2006 plan the administrative committee may, in its discretion, notwithstanding the grant agreement, upon a participant’s retirement fully vest any and all Pier 1 Imports’ common
stock awarded pursuant to a restricted stock award. Although the plan does not define retirement, for the purposes of this table, eligibility for early retirement assumes attainment of age 55
plus 15 years of service with Pier 1 Imports, and eligibility for normal retirement assumes age 65 regardless of years of service. These are the same parameters for early retirement and
normal retirement used in Pier 1 Imports’ stock option awards. As of March 1, 2014, Messrs. Smith, Turner and Benkel and Mmes. David and Leite are respectively ages 61, 56, 45, 50 and
51. Although Mr. Smith has attained the age of 55, he does not have 15 years of service with Pier 1 Imports to be eligible for early retirement under the above assumption. Mr. Turner has 23
years of service and is eligible for early retirement under the above assumption. The amount shown assumes the administrative committee fully vested Mr. Turner’s time-based and
performance-based restricted stock grants under the 2006 plan. Value shown is the NYSE closing price on February 28, 2014, of $18.92 per share times the number of shares.
(4) Under the 2006 plan the administrative committee may, in its discretion, notwithstanding the grant agreement, upon termination without cause, fully vest any and all Pier 1 Imports’ common
stock awarded pursuant to a restricted stock award, unless the award was granted to a “covered employee” (as defined in the applicable Treasury Regulations) and the award was designed to
meet the exception for performance-based compensation under Section 162(m) of the Internal Revenue Code. The chief financial officer, Mr. Turner, is not included as a “covered employee”
under the applicable Treasury Regulations. The amount shown assumes the administrative committee fully vested any and all time-based restricted stock grants and Mr. Turner’s
performance-based restricted stock grants under the 2006 plan. Value shown is the NYSE closing price on February 28, 2014, of $18.92 per share times the number of shares.
(5) Under the 2006 plan the administrative committee may, in its discretion, upon a corporate change (as defined in the plan) fully vest any or all common stock awarded pursuant to a restricted
stock award. Mr. Smith’s restricted stock awards are governed by his employment agreement and no assumption is made regarding administrative committee action fully vesting those
awards. Assuming the administrative committee fully vested the other NEOs’ restricted stock grants under the 2006 plan, then that amount is shown. Value shown is the NYSE closing price
on February 28, 2014, of $18.92 per share times the number of shares.
(6) Under the 2006 plan the administrative committee may, in its discretion, upon death or disability fully vest a restricted stock award, unless the award was granted to a “covered employee” (as
defined in the applicable Treasury Regulations) and the award was designed to meet the exception for performance-based compensation under Section 162(m) of the Internal Revenue Code.
The chief financial officer, Mr. Turner, is not included as a “covered employee” under the applicable Treasury Regulations. Mr. Smith’s restricted stock awards are governed by his
employment agreement and no assumption is made regarding administrative committee action fully vesting those awards. The amounts shown assume that the administrative committee fully
vested the other NEOs’ time-based restricted stock grants and Mr. Turner’s performance-based restricted stock grants under the 2006 plan. Value shown is the NYSE closing price on
February 28, 2014, of $18.92 per share times the number of shares.
(7) If Mr. Smith’s employment ended as of the end of fiscal 2014 due to a voluntary good reason termination or an involuntary without cause termination, then pursuant to his employment
agreement Mr. Smith would be entitled to receive a severance amount equal to two times Mr. Smith’s then-existing base salary and all restricted stock that has been awarded to Mr. Smith
would vest. In the event of Mr. Smith’s disability which results in termination of employment, then pursuant to his employment agreement, Mr. Smith would be entitled to receive 13 weeks of
compensation and benefits. After the 13-week period, Mr. Smith would participate in any Pier 1 Imports short-term or long-term disability plans for which he is eligible. A change in control
of Pier 1 Imports is specifically excluded as grounds by either Pier 1 Imports or Mr. Smith to terminate the employment agreement and a change in control of Pier 1 Imports does not
constitute “good reason” under that agreement. Mr. Smith’s employment agreement is described in the Compensation Discussion and Analysis above under the caption “Executive
Compensation Components — Chief Executive Officer Employment Agreement.”
PIER 1 IMPORTS, INC. 2014 Proxy Statement 51