Pier 1 2015 Annual Report Download - page 107

ITEMS OF BUSINESS TO BE ACTED UPON AT THE MEETING
Performance Awards
The committee may grant employees and non-employee directors performance awards payable in shares of common stock,
cash or a combination of both. No performance award may provide for dividends or dividend equivalents to be paid on an
unvested award.
The committee shall establish the number of shares subject to or the maximum cash value of the performance award, as
applicable, and the performance period over which the performance applicable to the award shall be measured and the
performance measures which constitute the business criteria on which the performance goal for a performance award is based.
The performance measures established by the committee for a performance award shall be based upon one or more of the
following: (1) the fair market value of Pier 1 Imports common stock, (2) Pier 1 Imports’ earnings per share, (3) Pier 1 Imports’ or an
affiliate’s market share, (4) the market share of a business unit and/or retail channel, division or other operation of Pier 1 Imports
designated by the committee, (5) Pier 1 Imports’ or an affiliate’s sales, (6) the sales of a business unit and/or sales through a retail
channel, or sales through a division or other operation of Pier 1 Imports designated by the committee, (7) the net income of Pier 1
Imports, an affiliate, business unit, retail channel, division or other operation of Pier 1 Imports designated by the committee, (8) the
cash flow or return on investment of Pier 1 Imports, an affiliate, business unit, retail channel, division or other operation of Pier 1
Imports designated by the committee, (9) the earnings before or after interest, taxes, depreciation, and/or amortization of Pier 1
Imports, an affiliate, business unit, retail channel, division or other operation of Pier 1 Imports designated by the committee,
(10) economic value, (11) the return on capital, invested capital, assets or stockholders’ equity achieved by Pier 1 Imports or an
affiliate, or (12) the total shareholders’ return achieved by Pier 1 Imports. If the committee intends that a performance award
complies with Section 162(m) of the Internal Revenue Code of 1986, with respect to a performance award granted to a “covered
employee” within the meaning of Treasury Regulation 1.162-27(c)(2), the committee shall establish the performance measures
either prior to the beginning of the award’s performance period or within the first 90 days of such performance period provided
that the outcome of the performance measures being established is then substantially uncertain, but not later than the date that
25% of the award’s performance period has lapsed. In no event shall a performance award which is an award of shares of
common stock vest prior to the expiration of a one-year period following the grant thereof. At the time an award is made, Pier 1
Imports and the participant will enter into an agreement setting forth the matters contemplated by the plan and such other matters
as the committee may determine to be appropriate.
Phantom Stock Awards and Stock Appreciation Rights
The committee may grant employees and non-employee directors phantom stock awards, which are rights to receive shares of
common stock (or cash equal to the fair market value of a specified number of shares of common stock), or rights to receive an
amount equal to any appreciation in the fair market value of common stock over a specified period of time, which vest over a
period of time as established by the committee, without satisfaction of any performance criteria or objectives. A phantom stock
award may include a stock appreciation right that is granted independently of an option or a stock appreciation right that is
granted in tandem with an option. Any phantom stock award which is a stock appreciation right will have a maximum term of ten
years and shall represent an award that measures appreciation only with reference to appreciation over the fair market value of
the stock which is subject to the award as of the date of its grant. At the time an award is made, Pier 1 Imports and the
participant will enter into an agreement setting forth the matters contemplated by the plan and such other matters as the
committee may determine to be appropriate, including the period over which the phantom stock award shall vest; provided,
however, that no phantom stock award will vest in full prior to the expiration of a one-year period from the date of its grant.
Director Deferred Stock Unit Awards
The plan provides for participation by non-employee directors of Pier 1 Imports in a deferred stock program. Each non-employee
director may elect to defer all or any portion of their cash fees into a deferred stock unit account maintained by Pier 1 Imports
provided that such deferral election for a taxable year is made prior to the beginning of such taxable year. Deferred director
annual retainer fees (but not committee chair or chairman annual retainers) are matched 25% by Pier 1 Imports and the total
deferred fees and matching contributions are converted into an equivalent value of deferred stock units up to the plan’s maximum
calendar year limit of 750,000 units per individual. The number of deferred stock units issued is based on the fair market value of
Pier 1 Imports common stock on the date of crediting the deferred fees and matching contributions. When a non-employee
director’s position terminates, the deferred stock units are exchanged into common stock and delivered to the departing director
within five business days. Under the plan, deferred stock units are credited with dividends paid on Pier 1 Imports common stock.
Amendment and Termination of the Plan
The board of directors may terminate the plan at any time with respect to any shares of common stock for which awards have
not been granted. The board of directors shall have the right to alter or amend the plan or any part thereof from time to time;
PIER 1 IMPORTS, INC. 2015 Proxy Statement 25