Pier 1 2015 Annual Report Download - page 105

ITEMS OF BUSINESS TO BE ACTED UPON AT THE MEETING
General
The plan has been designed to replace the Pier 1 Imports, Inc. 2006 Stock Incentive Plan, which will terminate on March 23,
2016. The purpose of the plan is to promote the interests of Pier 1 Imports and its shareholders by encouraging employees of
Pier 1 Imports and its non-employee directors to acquire or increase their equity interest in Pier 1 Imports, and to relate
compensation to performance goals of Pier 1 Imports, thereby giving them an added incentive to work towards the continued
growth and success of Pier 1 Imports. The board of directors also contemplates that through the plan, Pier 1 Imports will be
better able to compete for the services of personnel needed for growth and success. However, nothing in the plan will operate or
be construed to prevent Pier 1 Imports from granting awards outside of such plan. In the opinion of Pier 1 Imports, the plan is not
subject to any of the provisions of the Employee Retirement Income Security Act of 1974.
The full text of the plan is set forth in Appendix A to this proxy statement. The material features of the plan are summarized below,
but this summary is qualified in its entirety by reference to the full text of the plan.
Types of Awards
The plan permits the granting of the following types of awards to employees and non-employee directors: stock options to
purchase shares of common stock, which may be either incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, or non-qualified options that do not constitute incentive stock options; restricted stock awards;
restricted stock unit awards; performance awards; phantom stock awards; and stock appreciation rights. Each type of award is
summarized below. The plan also provides for granting deferred stock units to non-employee directors who are not employees of
Pier 1 Imports.
Effective Date and Duration of the Plan
The plan was adopted by the board of directors on April 2, 2015, subject to approval by Pier 1 Imports’ shareholders. The plan
will become effective upon approval by Pier 1 Imports’ shareholders and no awards will be granted under the plan prior to such
approval. Except with respect to awards then outstanding, if not sooner terminated, the plan will terminate on the tenth
anniversary of the date the plan was approved by Pier 1 Imports’ shareholders, and no further awards may be granted after such
date.
Administration
The plan will be administered by a committee appointed by the board of directors, or any duly appointed subcommittee of such
committee and shall be comprised solely of two or more “outside directors” as defined in Section 162(m) of the Internal Revenue
Code of 1986, and applicable interpretive authority thereunder and within the meaning of the term “Non-Employee Director” as
defined in Rule 16b-3 of the Securities Exchange Act of 1934, as amended. Subject to the terms and conditions of the plan, the
committee has authority to determine which employees or directors receive awards under the plan and when to determine the
type and terms of an award, and to determine the number of shares to be issued pursuant to such awards (within the limits of the
plan), to interpret the plan and all awards and to administer the plan. Such committee, in its sole discretion, may delegate any or
all of its power and duties under the plan to the chief executive officer or to an officer or a group of officers of Pier 1 Imports,
subject to such limitations on such delegated powers and duties as such committee may impose; provided, however, that the
committee may not delegate its powers if such delegation would result or potentially result in an award which is intended to
qualify as performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code of 1986 failing to so
qualify.
Shares Subject to the Plan
The aggregate number of shares of common stock that may be issued under the plan will not exceed 2,500,000 shares plus the
number of shares of common stock which remain available for grant under the Pier 1 Imports, Inc. 2006 Stock Incentive Plan as
of the plan’s effective date (which amount is 2,924,592 shares as of April 27, 2015), increased by the number of shares subject
to outstanding awards under the Pier 1 Imports, Inc. 2006 Stock Incentive Plan as of the plan’s effective date (which amount is
3,551,658 shares as of April 27, 2015) that cease for any reason to be subject to such awards (other than by reason of exercise
or settlement of the awards to the extent that they are exercised for or settled in vested and non-forfeitable shares of common
stock), subject to adjustment in the event of stock splits and certain other corporate events. The aggregate maximum number of
shares of common stock that may be issued under the plan through incentive stock options will not exceed 2,500,000 shares.
The maximum number of shares of common stock that may be subject to awards denominated in shares of common stock
granted to any one individual during any calendar year may not exceed 750,000 shares and the maximum amount of
PIER 1 IMPORTS, INC. 2015 Proxy Statement 23