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☐ | Fee paid previously with preliminary materials. |
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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100 Pier 1 Place Fort Worth, Texas 76102 May 16, 20189, 2019 Dear Shareholder: The board of directors and management cordially invite you to attend Pier 1 Imports’ annual meeting of shareholders to be held at 10:00 a.m., local time, on Tuesday,Wednesday, June 26, 2018,19, 2019, at our corporate headquarters, Mezzanine Level, Conference Center Room C, 100 Pier 1 Place, Fort Worth, Texas 76102. The formal notice of the annual meeting of shareholders and proxy statement are attached. We have chosen to furnish our proxy statement and annual report to our shareholders over the Internet, as allowed by the rules of the Securities and Exchange Commission. Rather than mailing paper copies, we believe that thise-proxy process will expedite shareholder receipt of the proxy materials, lower our expenses associated with this process and eliminate unnecessary printing and paper usage. As a shareholder of Pier 1 Imports, you are receiving by mail (or email)e-mail) a Notice of Internet Availability of Proxy Materials (“Notice”(the “Notice”), which will instruct you on how to access and review the proxy statement and annual report over the Internet. The Notice will also instruct you how to vote your shares over the Internet. Shareholders who would like to receive a paper copy of the Pier 1 Imports proxy statement and annual report, free of charge, should follow the instructions onin the Notice. Shareholders who request paper copies will also receive a proxy card or voting instruction form which will instruct them on how to vote their shares by mail, by telephone, or over the Internet. It is important that your shares be voted at the meeting in accordance with your preference. If you do not plan to attend, you may vote your shares by following the instructions in the Notice, proxy card, or voting instruction form. If you are able to attend the meeting and wish to vote in person, you may withdraw your proxy at that time. See the response to the question “How do I vote?” in the proxy statement for a more detailed description of voting procedures and the response to the question “Do I need an admission ticket to attend the annual meeting?” in the proxy statement for our procedures for admission to the meeting. Sincerely, | | | 
 | |  
| Alasdair B. JamesCheryl A. Bachelder
President andInterim Chief Executive Officer
| | Terry E. London Chairman of the Board |
100 Pier 1 Place Fort Worth, Texas 76102 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held June 26, 201819, 2019 Notice is hereby given that the annual meeting of shareholders of Pier 1 Imports, Inc., a Delaware corporation (“Pier 1 Imports” or “the Company”the “Company”), will be held on Tuesday,Wednesday, June 26, 2018,19, 2019, at 10:00 a.m., local time, at Pier 1 Imports’ corporate headquarters, Mezzanine Level, Conference Center Room C, 100 Pier 1 Place, Fort Worth, Texas 76102 for the following purposes, as more fully described in the accompanying proxy statement: | | | Proposal No. 1 – | | to elect as directors the nineeight nominees named in the accompanying proxy statement to hold office until the next annual meeting of shareholders and until their successors are duly elected and qualified; | Proposal No. 2 – | | to vote to adopt anon-binding, advisory resolution to approve the compensation of Pier 1 Imports’ named executive officers; and | Proposal No. 3 – | to approve an amendment to Pier 1 Imports’ Restated Certificate of Incorporation to effect a reverse stock split of Pier 1 Imports common stock and a corresponding reduction in authorized shares, in the discretion of the board of directors, at any time prior to the 2020 annual meeting of shareholders; and | Proposal No. 4 – | to vote to ratify the audit committee’s engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2019.2020. |
In their discretion, the proxies are authorized to vote, as described in the accompanying proxy statement, upon any other business as may properly come before the annual meeting or any adjournment or postponement of the meeting. Only shareholders of record at the close of business on April 27, 2018,22, 2019, are entitled to receive notice of, and to vote their shares at, the annual meeting. We are pleased to take advantage of the Securities and Exchange Commission rules that allow issuers to furnish proxy materials to their shareholders over the Internet. We believe that this e-proxy process allows us to provide you with the information you need while lowering the costs associated with the annual meeting. You are cordially invited to attend the annual meeting in person. However, to ensure that your vote is counted at the annual meeting, please vote as promptly as possible. By order of the board of directors, 
Michael A. Carter
Executive Vice President, Chief Legal and Compliance Officer and General Counsel,Corporate Secretary May 16, 20189, 2019 Fort Worth, Texas
100 Pier 1 Place Fort Worth, Texas 76102 TABLE OF CONTENTSTable of Contents
| | | COMPENSATION | | 21 | PROPOSAL NO. 2 – ADVISORY APPROVALOFTHE COMPENSATIONOF PIER 1 IMPORTS’ NAMED EXECUTIVE OFFICERS | | 21 | COMPENSATION DISCUSSIONAND ANALYSIS | | 22 | Executive Summary and Message from the Compensation Committee | | 22 | IntroductionOur Executive Team and Key Leadership Transitions
| | 2423 | Fiscal 20182019 Business Performance | | 24 | Executive SummaryFiscal 2019 Compensation Actions and Decisions
| | 2725 | Chief Executive OfficerCEO PayAt-A-Glance at a Glance
| | 2826 | Aligning Pay with Performance | | 2926 | Compensation Factors and Governance for Fiscal 2018
| | 30 | Shareholder Input on Executive Compensation | | 3128 | Peer Group Used for Comparison | 28 | Elements of the Executive Compensation Program | | 3229 | Analysis of Fiscal 20182019 Compensation | | 3329 | Retirement and Other Plans | | 3734 | Pier 1 Imports’ Guidelines on Share Ownership | | 3834 | Pier 1 Imports’ Policy on Section 162(m)Compensation Factors and Governance for Fiscal 2019
| | 3835 | COMPENSATION COMMITTEE INTERLOCKSAND INSIDER PARTICIPATION RISK | | 3836 | COMPENSATION RISK COMMITTEE INTERLOCKSAND INSIDER PARTICIPATION | | 3836 | COMPENSATION COMMITTEE REPORT | | 3936 | SUMMARY COMPENSATION TABLEFORTHE FISCAL YEARS ENDED MARCH 2, 2019, MARCH 3, 2018, ANDFEBRUARY 25, 2017AND FEBRUARY 27, 2016 | | 4037 | GRANTSOF PLAN-BASED AWARDSFORTHE FISCAL YEAR ENDED MARCH 3, 2018 2, 2019 | | 4239 | OUTSTANDING EQUITY AWARDS TABLEFORTHE FISCAL YEAR ENDED MARCH 3, 2018 2, 2019 | | 4440 | OPTIONSTOCK VESTED TABLEFORTHE FISCAL YEAR EXERCISESAND STOCK VESTED TABLEFORTHE FISCAL YEAR ENDED MARCH 3, 2018 2, 2019
| | 4541 | NON-QUALIFIED DEFERRED COMPENSATION TABLEFORTHE FISCAL YEAR ENDED MARCH 3, 2018 2, 2019 | | 4642 | POTENTIAL PAYMENTS UPON TERMINATIONOR CHANGEIN CONTROL | | 48 | | 43 | | | CHIEF EXECUTIVE OFFICER PAY RATIO | | 50 | | 44 | | | PROPOSAL NO. 3 – REVERSE STOCK SPLIT | 45 | | | EQUITY COMPENSATION PLAN INFORMATION | | 51 | | 52 | | | AUDIT MATTERS | | 5253 | AUDIT COMMITTEE REPORTAUDIT COMMITTEE REPORT
| | 5253 | RELATIONSHIPRELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
| | 5354 | PROPOSAL NO. 34 – RATIFICATIONOF ENGAGEMENTOF ERNST & YOUNGLLP | | 5354 | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES | | 5354 | PRE-APPROVALOF NON-AUDIT FEES | | 5354 | | | | | QUESTIONS AND ANSWERS REGARDING THE PROXY STATEMENT AND ANNUAL MEETING | | 5455 | | | OTHER BUSINESS | | 5759 | | | SHAREHOLDER PROPOSALS FOR 20192020 ANNUAL MEETING OF SHAREHOLDERS | | 5759 | | | YOUR VOTE IS IMPORTANT | 59 | | 57 | appendix a – certificate of amendment to the restated certificate of incorporation of pier 1 imports, inc. | 60 |
VOTING INFORMATIONVoting Information
Who is entitled to vote at the annual meeting? Holders of our common stock at the close of business on April 27, 2018,22, 2019, are entitled to vote their shares at the annual meeting. As of that date, there were 82,968,67585,013,806 shares of common stock outstanding and entitled to vote. Each share of common stock is entitled to one vote on each matter properly brought before the annual meeting. Other than common stock, there are no voting securities of Pier 1 Imports outstanding. How do I vote? You may vote using any of the following methods: | | | •●By Internet | | •●By telephone | If you are a shareholder of record, you will need the control number included on the Notice to access the proxy materials. Follow the instructions in the Notice to vote your shares electronically over the Internet. Voting over the Internet authorizes the proxies approved by the board of directors and named in the proxy card to vote your shares in the same manner as if you marked, signed and returned a proxy card. If you are a beneficial owner of shares, you may vote your shares electronically over the Internet by following the instructions sent to you by your broker, bank or other intermediary. | | If you are a shareholder of record, you may vote your shares telephonically by calling the toll-free number that is referenced in the proxy materials available over the Internet or by mail. Voting by telephone authorizes the proxies approved by the board of directors and named in the proxy card to vote your shares in the same manner as if you marked, signed and returned a proxy card. If you are a beneficial owner of shares, you may vote your shares telephonically by following the instructions sent to you by your broker, bank or other intermediary. | •●By mail | | •●In person at the annual meeting | If you are a shareholder of record, you may request printed copies of the proxy materials, which will include a proxy card, from us by following the instructions onin the Notice, which will include a proxy card.Notice. If you are a beneficial owner of shares, you may vote your shares by mail by following the instructions sent to you by your broker, bank or other intermediary. Be sure to complete, sign and date the proxy card or voting instruction form and return it in the prepaid envelope. | | All shareholders of record may vote in person at the annual meeting. You can request a ballot at the meeting. You may also be represented by another person at the annual meeting by executing a proper proxy designating that person. If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or other intermediary and present it to the inspector of election with your ballot to be able to vote at the annual meeting. |
| | | | | Internet and telephone voting facilities for shareholders of record will be available 24 hours a day, and will close at 11:59 p.m. Eastern Time on June 25, 2018. The availability of Internet and telephone voting for beneficial ownersInternet and telephone voting facilities for shareholders of record will be available 24 hours a day, and will close at 11:59 p.m., Eastern Daylight Time, on June 18, 2019. The availability of Internet and telephone voting for you as a beneficial owner will depend on the voting processes of your broker, bank or other intermediary. We therefore recommend that you follow the voting instructions in the materials provided to you by your broker, bank or other intermediary. If you vote over the Internet or by telephone, you do not have to return a proxy card or voting instruction form. If you are located outside the United States and Canada, please use the Internet or mail voting methods. Your vote is important. Your timely response can save Pier 1 Imports the expense of attempting to contact you regarding your vote.
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PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 1 | | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 1 |
Roadmap of VotingVoting Matters Shareholders will be asked to vote on the following proposals: | | | | | | |
| | BOARD
RECOMMENDATION |
| Proposal No. 1 – Election of Directors (page 3) | | | | | The board of directors is seeking the election of nineeight director nominees. The board of directors believes that the nineeight director nominees possess the qualifications to provide effective leadership and oversight of Pier 1 Imports’ management and to effectively direct the long-term strategy of Pier 1 Imports. | |
| FOR EACH DIRECTOR
NOMINEE |
| Proposal No. 2 – Advisory Approval of the Compensation of Pier 1 Imports’ Named Executive Officers (page 21) | | | | | Pier 1 ImportsThe board of directors is seeking approval of anon-binding, advisory resolution to approve the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis, compensation tables and narrative discussion below under the caption “Compensation.”
| | | FOR | | Proposal No. 3 – Approval of an Amendment to Pier 1 Imports’ Restated Certificate of Incorporation to Effect a Reverse Stock Split of Pier 1 Imports common stock and a corresponding reduction in authorized shares (page 45) | | The board of directors is seeking adoption and approval by the shareholders of an amendment to Pier 1 Imports’ Restated Certificate of Incorporation to effect a reverse stock split and a corresponding reduction in authorized shares, in the discretion of the board of directors, at any time prior to the 2020 annual meeting of shareholders. | FOR | Proposal No. 4 – Ratification of Engagement of Ernst & Young LLP (page 53)54) | | | | | The board of directors and the audit committee are seeking ratification of the engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2019.2020. | | | FOR | |
In their discretion, the proxies are authorized to vote, as described in this proxy statement, upon any other business as may properly come before the annual meeting or any adjournment or postponement of the meeting. We are not aware of any additional matters that will be presented for consideration at the annual meeting. Additional Information Please see the Questions and Answers section beginning on page 5455 for important information about the proxy materials, voting, the annual meeting, and related documents and communications. | | | 2 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 2
GOVERNANCEGOVERNANCE
The board of directors believes that good corporate governance is a prerequisite to achieving business success. Pier 1 Imports’ board of directors has adopted written corporate governance guidelines and policies designed to strengthen our corporate governance. Pier 1 Imports’ Corporate Governance Guidelines include information related to the board’s role and responsibilities, director qualifications and standards for determining whether a director is independent. Each standing committee of the board of directors has adopted a charter, which sets forth the role and responsibilities of the respective committee. In addition, we have adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers and employees, including our chief executive officer, chief financial officer and principal accounting officer. The nominating and corporate governance committee is responsible for overseeing and reviewing the Corporate Governance Guidelines and the Code of Business Conduct and Ethics at least annually, and recommending any proposed changes to the full board for approval. The Pier 1 Imports Corporate Governance Guidelines, Code of Business Conduct and Ethics and charters for the audit, compensation, and nominating and corporate governance committees are available on our website atwww.pier1.com by selecting “Investor Relations” under the “OUR COMPANY” section on the home page, selecting “Corporate Governance” then “Documents and Charters.” The Code of Business Conduct and Ethics may be amended, modified, or waived by the board of directors, and waivers may also be granted by the nominating and corporate governance committee, subject to the disclosure and other provisions of the Securities Exchange Act of 1934 (the “Exchange Act”), the rules thereunder and the applicable rules of the New York Stock Exchange (“NYSE”), and may be posted on our website within four days of such approval. PROPOSAL NO. 1 – Election of Directors The shareholders will vote to electon the election as directors of the nineeight nominees named below at the annual meeting of shareholders. Those elected will serve on the board of directors until the next annual meeting of shareholders and until their successors are duly elected and qualified. The board of directors, upon the recommendation of the nominating and corporate governance committee, has nominated each person listed below to stand for election. Although we do not anticipate that any of the nominees will be unable or unwilling to serve as a director, in the event that is the case, the board of directors may reduce its size or choose a substitute for that nominee. The individuals named as proxies cannot vote for more than eight nominees for election as directors at the annual meeting. In order to be elected, a nominee for election as a director must receive the affirmative vote of a majority of the votes cast with respect to such nominee by the shares of common stock present in person or represented by proxy at the annual meeting and entitled to vote on the election of directors. An “affirmative vote of a majority of the votes cast” means that the number of votes cast “For” a nominee exceeds the number of votes cast “Against” the nominee. Abstentions and brokernon-votes are not considered as votes cast.cast and, therefore, will have no effect on Proposal No. 1. Pursuant to our bylaws, all incumbent directors are required to deliver an irrevocablepre-election resignation to the corporate secretary prior to the filing of this proxy statement with the Securities and Exchange Commission (“SEC”). If a director fails to receive an affirmative vote of a majority of the votes cast for herhis or hisher election, the nominating and corporate governance committee, or other committee of independent directors designated by the board of directors, will determine whether to accept such resignation in accordance with theour bylaws. Board Member Qualification Criteria The board of directors has adoptedBoard Member Qualification Criteria,which are contained in Appendix C to the Corporate Governance Guidelines, that set out the attributes and qualifications considered by the nominating and corporate governance committee in evaluating nominees for director. The primary qualities and characteristics the nominating and corporate governance committee looks for in nominees for director are: leadership and management experience; ● | | leadership and management experience; |
relevant knowledge and diversity of background and experience; and ● | | relevant knowledge and diversity of background and experience; and |
personal and professional ethics, integrity and professionalism. ● | | personal and professional ethics, integrity and professionalism. |
The nominating and corporate governance committee believes that the board of directors should be comprised of individuals who have achieved a high level of distinction in their careers. As a group, the board of directors should possess a diverse and broad range of skills, perspectives and experience relevant to Pier 1 Imports’ business, such as: knowledge of the consumer and retail industry; ● | | knowledge of the consumer and retail industry; |
digital/e-Commerce and technology experience; ● | | digital/e-Commerce and technology experience; |
international experience; and ● | | international experience; and |
knowledge of public company director duties and responsibilities and governance processes. ● | | knowledge of public company director duties and responsibilities and governance processes. |
The nominating and corporate governance committee considers whether each nominee contributes to the diverse and broad range of skills, perspectives and experience required of Pier 1 Imports’ board of directors. | | | PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 3 | 2018 Proxy Statement | | 3 |
Nominees forfor Director The nominating and corporate governance committee believes the nineeight nominees possess the primary qualities and characteristics that it looks for in nominees for director. The specific experiences, qualifications, attributes and skills of each individual which support herhis or hisher nomination are included in the individual discussions below. The following illustrations show the average age, average tenure (as of May 16, 2018)March 2, 2019), and gender breakdown for the group of nominees with comparisons to the Company’s peer group for executive compensation purposes and companies in the S&P 500.  
The board of directors unanimously recommends a vote “For” the election of each of the following nominees as a director. | | | | | CLAIRE H. BABROWSKI
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| | Ms. Babrowski brings to the board experience in key leadership roles in leading global and domestic multi-unit retail companies. She possesses significant experience in operations, finance and international and general management, as well as global exposure.
| | Director Since: 2011
Age:60
Committees: Audit, Compensation
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| | | | | ●
| | Retail Executive Experience:
Ms. Babrowski most recently served as executive vice president and chief operating officer of Toys “R” Us, Inc. from 2007 to 2010. From 2005 to 2006, Ms. Babrowski worked for RadioShack Corporation serving as executive vice president and chief operating officer, and then president, chief operating officer and acting chief executive officer, overseeing RadioShack’s global operations and marketing and branding. She began her career at McDonald’s Corporation, spending 30 years in various roles, including direct responsibility for McDonald’s Asia Pacific, Middle East and Africa operations, and eventually serving as senior executive vice president and chief restaurant operations officer.
| | | | ●
| | Director Experience:
From 2006 to 2016 Ms. Babrowski served as a director, audit committee member and nominating and corporate governance committee member of Delhaize Group, a Belgian company whose American Depository Receipts are traded on the NYSE and whose ordinary shares are traded on the NYSE Euronext in Brussels. While at Delhaize, Ms. Babrowski served on several ad hoc board committees which considered from time to time various transactions. Ms. Babrowski previously served as a director and chairman of Chipotle Mexican Grill, Inc. She also previously served on the board of managers of QCE Finance LLC, which is the ultimate parent company of Quiznos, from February 2012 through May 2014, including serving as the chair of its operations and development committee and serving on the marketing committee.
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| | | 4 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
| | Ms. Bachelder was appointed interim chief executive officer on December 18, 2018. She is a restaurant industry executive who brings to the board over 3540 years of retail brand building, guest experience, human capital, operations and operationsfinancial perspective from her recent leadership of a global public company. | | Director Since: 2012 Age: Age:6263 Committees: CompensationOther Public Company Board:
(Chair)US Foods Holding Corp.
Other Company Board: Chick-fil-A, Inc. |
| | | | | ● | | Retail and Consumer Executive Experience: Ms. Bachelder most recently served as chief executive officer of Popeyes Louisiana Kitchen, Inc., from 2007 to 2017, a quick service restaurant with more than 2,600 locations worldwide.worldwide, from 2007 to 2017. From January 2001 to September 2003, she served as the president and chief concept officer for KFC Corporation in Louisville, Kentucky, where she was directly responsible for the U.S. business. From June 1995 to December 2000, Ms. Bachelder served as vice president, marketing and product development for Domino’sDomino���s Pizza, Inc. She has previouslyPrior thereto, she held multiple executive positions with consumer industry companies including RJR Nabisco Inc., The Gillette Company and Procter & Gamble.Gamble Co. | | | | ● | | Director Experience: Ms. Bachelder currently serves as a director and nominating and corporate governance committee member of US Foods Holding Corp., a leading food service distributor, and as a director of Chick-fil-A, Inc., a family owned and privately held restaurant company based in Atlanta, Georgia. She previously served on the board of Popeyes Louisiana Kitchen, Inc. from November 2006 to March 2017. She served2017 and on the board of True Value CorporationCompany from July 2006 through February 2013. |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 4
| ROBERT Robert L. BASSBass
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| | Mr. Bass brings to the board a broad consumer and retail background including significant experience in big box operations and supply chain. He is currently head of global supply chain operations for Best Buy Co., Inc. | | Director Since: 2018 Age: Age:4950 Committee: Audit |
| | | | | ● | | Retail and Other Executive Experience: Mr. Bass currently serves as chief supply chain officer for Best Buy Co., Inc., a retailer of technology products, services and solutions in the United States, Canada and Mexico, a position he has held since October 2017. In his current role, Mr. Bass is responsible for full supply chain strategy in Best Buy’sday-to-day operations, including overseeing more than 20 distribution centers fulfilling over 1,000 stores. Mr. Bass joined Best Buy in August 2013 as vice president, supply chain, and was promoted to senior vice president, supply chain in December 2015 prior to serving in his current position. | | | | ● | | Other Relevant Experience: From July 2002 to August 2013, Mr. Bass held store operations and supply chain positions at Target Corporation, a general merchandising retailer operating in the United States, including serving as a district manager for stores, as a director within store operations and as senior director, supply chain. Prior to that, Mr. Bass spent the first 10 years of his career as a commercial pilot serving in a captain’s leadership role first with Midwest Airlines and later with Sun Country Airlines. |
 
| | Mr. Dodds brings to the board over 30 years of executive experience in the shipping, retail, consumer goods and hospitality industries. He has lived and worked in Europe, the Middle East, Africa, South America and the United States, gaining extensive international experience in finance, franchising, joint ventures and brand management. | | Director Since: 2011 Age: Age:6162 Committee:Committees: Nominating and Corporate Governance (Chair) Other Public Company Boards:Board: Dave & Buster’s Entertainment, Inc. Other Company Board: Fogo de Chão, Inc. |
| | | | | ● | | Entertainment and Consumer Goods Executive Experience: Mr. Dodds most recently served as president and chief executive officer of Hard Rock International from 2004 through 2017, where he oversaw the strategic development and operations of restaurants, hotels, casinos and live music venues in more than 70 countries, includinghands-on involvement in global logistics and brand building. Mr. Dodds haspreviously served as the chief executive officer of the Central America Beverage Corporation (CABCORP) and as division president for PepsiCo Beverages covering South America, Central America and the Caribbean. | | | | ● | | Director Experience: Mr. Dodds currently serves as a director, audit committee member and finance committee member of Dave & Buster’s Entertainment, Inc., an American restaurant and entertainment business, and as a director of Fogo de Chão, Inc., a restaurant holding company based in Texas. Previously Mr. Dodds served as a board member and compensation committee member for CABCORP. | | | | ● | | Other Relevant Experience: Mr. Dodds is a fellow member of the Institute of Chartered Management Accountants and has served in a variety of general management and financial positions for PepsiCo, The Burton Group (now Arcadia Group) in the United Kingdom, and Overseas Containers, Ltd. |
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 5 |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 5
 
| | Mr. Hoffman brings to the board a broad retail background including experience in direct marketing, fulfillment ande-Commerce operations. | | Director Since: 2011 Age: Age:4950 Committee:Committees: Audit Other Public Company Boards:Board: Vince Holding Corp. |
| | | | | ● | | Retail Executive Experience: Since October 2015, Mr. Hoffman has served as the chief executive officer of Vince Holding Corp., a leading contemporary fashion brand with worldwide distribution, including over 2,500 distribution locations across more than 40 countries. From February 2012 to September 2014, Mr. Hoffman served as president and chief executive officer of theBon-Ton Stores, Inc., a department store chain with over 260 stores in more than 20 states, including nine furniture galleries and five clearance centers. From October 2008 to February 2012, Mr. Hoffman served as president and chief executive officer of Lord & Taylor, a division of Hudson’s Bay Company. Prior to that, Mr. Hoffman served six years as president and chief executive officer of Neiman Marcus Direct, where he oversaw the growth of neimanmarcus.com and the launch and growth of bergdorfgoodman.com and had direct responsibility for its international operations. | | | | ● | | Director Experience: Mr. Hoffman currently serves as a director of Vince Holding Corp. | | | | ● | | Other Relevant Experience: Mr. Hoffman held previous positions as vice president of Last Call Clearance Division at Neiman Marcus Stores, divisional merchandise manager of Bergdorf Goodman, Inc., a subsidiary of the Neiman Marcus Group, and divisional merchandise manager of Lord & Taylor, where he began his retail career in the executive training program. Mr. Hoffman also serves on the advisory board of the Jay H. Baker Retailing Initiative at The Wharton School. |
| | | | | ALASDAIR B. JAMES
| 
| | Mr. James became president and chief executive officer and joined the board on May 1, 2017. He brings to the board over 25 years of retail and consumer goods experience in the U.S., U.K. and China, including marketing, sales, brand management, customer data analytics, supply chain consolidation, digital/omni-channel transformation and implementation of consumer-facing initiatives.
| | Director Since: 2017
Age:47
|
| | | | | ●Katherine M. A. (“Allie”) Kline |
| RetailMs. Kline brings to the board deep marketing, communications and transformation expertise. Most recently she served as chief marketing and communications officer for Oath Inc., the Verizon Communications, Inc. subsidiary consisting of 20+ distinctive digital brands reaching 1 billion consumers including AOL, HuffPost, MAKERS, TechCrunch, Tumblr, and Yahoo.
| Director Since: 2018 Age: 47 Committee: Compensation Other Public Company Board: Huntington Bancshares Incorporated |
● | Executive Experience: PriorMs. Kline most recently served as chief marketing and communications officer for Oath, from Oath’s formation in 2017 following Verizon’s acquisition of Yahoo to joining Pier 1 Imports, Mr. JamesJuly 2018, where she was employed by Sears Holdings Corporation as president of Kmart from August 2014 to March 2017. In that role he oversaw Kmart’s operations, merchandising mix,responsible for all consumer and localizationB2B marketing, external and internal communications, brand strategy as welland creative, and corporate citizenship and cause marketing. She also served as the strategic shift to a consumer-focused, digitally-enabled retailer. Prior to joining Sears Holdings, he served in various roles at Tesco PLC, a multinational grocery and general merchandise retailer, from June 2007 to August 2013, including commercial directorhead of MAKERS, Oath’s prominent womens media brand. Ms. Kline held the global business unit, as well as executive vice president and commercial directorposition of Tesco China. From June 2001 to June 2007, Mr. James served in various roles at GlaxoSmithKline PLC, a pharmaceutical company, including global marketing director for future brands. Prior to that, Mr. James spent his early career in internationalchief marketing and account management at PepsiCo.communications officer for AOL from 2013 to 2017 prior to and following Verizon’s acquisition of AOL in 2015.
| | | | ● | | Other Relevant Information:Director Experience:
The termsMs. Kline currently serves as a director of Mr. James’ employment provide that Mr. James will be nominatedHuntington Bancshares Incorporated, a regional bank holding company headquartered in Columbus, Ohio. She also serves as a director of National Forest Foundation, the non-profit partner of the U.S. Forest Service. She previously chaired the Oath Foundation board, was a member of the executive committee for election tothe Internet Advertising Bureau board of directors, and served on the board of directors for each election period occurring during his employment and the board will recommend his election to the shareholders of Pier 1 Imports.The Female Quotient.
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| | | | | TERRY E. LONDON
| | 
| | Other Relevant Experience: From 2011 to 2012, Ms. Kline held the position of chief marketing officer for 33across, a leading data and analytics company in the digital advertising space. Prior to that from 2008 to 2011, Ms. Kline held the position of vice president, marketing for Brand Affinity Technologies, a digital sports and celebrity endorsement marketing platform. Earlier in her career she held digital media and marketing leadership positions with Launch Ideas, Unicast (acquired by Sizmek), InterVU (acquired by Akamai Technologies), and the Washington Wizards. |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 6
 | Mr. London serves as thenon-executive chairman of the board. He served as interim president and chief executive officer and chairman of the board from January 1, 2017 through April 30, 2017, and executive chairman from May 1, 2017 through July 31, 2017 when he reassumed his role asnon-executive chairman of the board. He provides the board with significant finance, accounting, media and public company board knowledge and experience. | | Director Since: 2003 Chairman of the Board Age: 69 Committee:Age:68 Committees: Nominating and Corporate Governance
Other Public Company Boards:Board: Johnson Outdoors Inc. |
| | | | | ● | | Entertainment Executive Experience: Mr. London served as the chairman of the London Broadcasting Company, Inc., a Texas-based company formed to acquire and operate Texas media properties, until July 2015. Earlier in his career, Mr. London served as president and chief executive officer, chief financial officer and chief operating officer of Gaylord Entertainment Company, a hotel, resort, entertainment and media company. | | | | ● | | Director Experience: Mr. London currently serves as a director of Johnson Outdoors Inc., a leading global innovator of outdoor recreation equipment and technology, and previously served as a director of Bass Pro Shops, Inc. In his role as a director on other boards, Mr. London has served as the chairmanchair of the audit committee and member of the compensation committee. | | | | ● | | Other Relevant Experience: Mr. London served as interim president and chief executive officer and chairman of the board of Pier 1 Imports from January 1, 2017 through April 30, 2017, and executive chairman of the board from May 1, 2017 through July 31, 2017 when he reassumed his role as non-executive chairman of the board. He is a certified public accountant and was voted the Broadcaster of the Year in 2011 by the Texas Association of Broadcasters. |
| | | 6 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
 
| | Mr. Peel brings to the board extensive human resources and broad business expertise and public company board experience. | | Director Since: 2013 Age: Age:6869 Committees:Committees: Compensation (Chair), Nominating and Corporate Governance Other Public Company Boards:Board: Sleep Number Corporation |
| | | | | ● | | Consumer Goods Executive Experience: Mr. Peel spent 17 years at General Mills, a global manufacturer and marketer of consumer food products, where he served as seniorexecutive vice president, worldwide human resources from 1991 to 2007 and as executive vice president of human resources and global business services from 2007 to 2008. From 1977 to 1991, Mr. Peel served in various capacities for PepsiCo, including as senior vice president, human resources for PepsiCo Worldwide Foods from 1987 to 1991, and as senior vice president, human resources for the Pepsi-Cola Bottling Group from 1984 to 1987. | | | | ● | | Director Experience: Mr. Peel has served on the board of directors of Sleep Number Corporation (formerly known as Select Comfort Corporation), a U.S.-based manufacturer of the Sleep Number and Comfortaire beds as well as foundations and bedding accessories, since 2003, previously serving as chair of its compensation and management development committee. He currently serves as chair of its corporate governance and nominating committee. | | | | ● | | Other Relevant Experience: In January 2018, Mr. Peel joined ghSMART & Company, Inc. as senior advisor and founding member of the firm’s chairman’s counsel. Mr. Peel is also chair of the board of trustees of DeVry University and a member of the board of managers of HireRight Corporation. Through his company, Peel Global Advisory, LLC, he provides human capital consulting services for a wide range of businesses ranging from start-ups to Fortune 500 companies. Previously, Mr. Peel was a Yale University officer and served as vice president, human resources and administration from October 2008 until his retirement in July 2017. |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 7
 
| | Ms. Sardini’s 20 plus20-plus years serving in senior financial management positions for branded consumer products and media companies brings extensive, multi-faceted experience to the board. | | Director Since: 2013 Age: Age:6869 Committee:Committees: Audit (Chair) Other Public Company Boards:Board: TreeHouse Foods, Inc. Other Company Board: Ideal Protein |
● | | Retail and Other Executive Experience: From 2002 until her retirement in 2012, Ms. Sardini served as the chief financial officer of Weight Watchers International, Inc., where she oversaw global operations and successfully negotiated the acquisition of WeightWatchers.com and other targets. She served as chief financial officer of Vitamin Shoppe.com, Inc. from 1999 to 2001, and as executive vice president and chief financial officer for the Children’s Television Workshop from 1995 to 1999. In addition, Ms. Sardini held finance positions ranging from controller to chief financial officer at QVC, Inc., Chris Craft Industries and the National Broadcasting Company. | | | | ● | | Director Experience: Ms. Sardini currently serves on the board of directors of TreeHouse Foods, Inc., a manufacturer of packaged foods and beverages with more than 50 manufacturing facilities across the United States, Canada and Italy, where she chairs the compensation committee, and where she previously served as lead independent director, audit committee chair and as a member of its nominating and governance committee. Since January of 2016, Ms. Sardini has served as a director and audit committee chair of Ideal Protein, a privately heldprivately-held company, where she has served as chair of the board since 2017 and currently serves as chair of the board since 2017.audit committee. | | | | ● | | Other Relevant Experience: Currently,In 2013, Ms. Sardini serves in afounded her consulting and advisory capacitypractice providing strategic and operational guidance to early andmid-stage technology-based consumer companies and private equity firms. In addition to providing client consulting services, Ms. Sardini also currently serves on the advisory boards of To The Market, PetTrax and Everplans. Previously, she served on the advisory board of Learnvest.com and the board of Promise Project Fund for the City of New York.
|
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 7 |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 8
Key Skills and QualitiesQualities of the Board The following are key areas of expertise in which the members of the board have extensive management and leadership experience. The individual biographies on pages 4 through 78 provide additional information about each nominee’s specific background and experience. | | | CRITERIA | | DEFINITION | BOARD EXPERIENCE | Public Company Board Experience | | Experience serving on an outside public company board (last five years) and contributing to strategic planning, CEO succession and capital investment and allocation decisions | | INDUSTRY EXPERIENCES | Public Company CEO | | Current or recently retired (last three years) CEO of a public company | Consumer and Retail Industry | | Current or recently retired executive or director with significant experience leading a large organization with P&L ownership or as a major functional leader in a consumer-facing company or within the retail industry | Home Furnishings Industry | | Current or recently retired executive or director in the home goods industry | Public Company M&A Experience | | Experience with M&A transactions as an executive or director | International Experience | | Experience leading a global business and understanding the challenges of entering new markets and navigating local and regional geopolitical sensitivities | FUNCTIONAL SKILLS | Financial Expertise | | Identified as a qualified financial expert and/or has experience as a CEO, CFO or other senior financial leader | Digital /e-Commerce | | Executive who understands the digital world and broader digital transformation and has experience implementing digital and omni-channel strategies and/or building ane-Commerce platform | Marketing and Branding | | Current or retired CMO or CEO of a business with strong brands who has a strong foundation in consumer insights, understanding consumer trends and building/maintaining great brands | Merchandising | | Experience as a CMO or other executive leading merchandising for a retail company | Human Capital | | Current or retired CHRO or senior executive leading the human resources function in a large public company | Supply Chain | | Active or recently retiredC-Suite level executive who has helped abest-in-class organization transform their supply chain operations from a strategic standpoint and has experience withnon-conveyable products | Operations | | Experience as an operations executive (COO, SVP Operations) or CEO with direct experience overseeing store operations, real estate or back-office operations | Technology | | Experience as a CIO/CTO or other relevant experience at a large company |
| | | 8 | | PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 9 | 2018 Proxy Statement |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PIER 1 IMPORTS – BOARD SKILLS MATRIX | | TERRY E.
LONDON (NON-
EXECUTIVE
CHAIRMAN) | | ALASDAIR B.
JAMES (CEO) | | CLAIRE H.
BABROWSKI | | CHERYL A.
BACHELDER | | ROBERT L.
BASS | | HAMISH A.
DODDS | | BRENDAN L.
HOFFMAN | | MICHAEL A.
PEEL | | ANN M.
SARDINI | | | BOARD EXPERIENCE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Outside Public Company Board Experience | | | | ✓ | | | | | | | | | | ✓ | | | | | ✓ | | | | | | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | COMPETENCIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | INDUSTRY EXPERIENCES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Recent Public Company CEO (last 3 yrs.) | | | | ✓ | | | | | ✓ | | | | | | | | | | ✓ | | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | Consumer and Retail Industry | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | Home Furnishings Industry | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | ✓ | | | | | | | | | Public Company M&A Experience | | | | ✓ | | | | | | | | | | ✓ | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | International Experience | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | FUNCTIONAL SKILLS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial Expertise | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | | | | | | ✓ | | | | | ✓ | | | | | | | | | | ✓ | | | | Digital /e-Commerce | | | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | | | | ✓ | | | | Marketing and Branding | | | | | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | | | | | | ✓ | | | | | ✓ | | | | | | | | | | | | | | Merchandising | | | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | ✓ | | | | | ✓ | | | | | | | | | | | | | | Human Capital | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | | | Supply Chain | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | Operations | | | | | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | ✓ | | | | | | | | | | ✓ | | | | Technology | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | DEMOGRAPHICS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gender (33.33% female) | | | | M | | | | | M | | | | | F | | | | | F | | | | | M | | | | | M | | | | | M | | | | | M | | | | | F | | | | Age (average = 59.1) | | | | 68 | | | | | 47 | | | | | 60 | | | | | 62 | | | | | 49 | | | | | 61 | | | | | 49 | | | | | 68 | | | | | 68 | | | |
| | | | | | | | | PIER 1 IMPORTS BOARD SKILLS MATRIX | TERRY E.
LONDON (NON-
EXECUTIVE
CHAIRMAN) | CHERYL A.
BACHELDER (INTERIM CEO) | ROBERT L.
BASS | HAMISH A.
DODDS | BRENDAN L.
HOFFMAN | KATHERINE M. A. (“ALLIE”) KLINE | MICHAEL A.
PEEL | ANN M.
SARDINI | BOARD EXPERIENCE | | | | | | | | | Outside Public Company Board Experience | ✓ | ✓ | | ✓ | ✓ | | ✓ | ✓ | COMPETENCIES | | | | | | | | | INDUSTRY EXPERIENCES | | | | | | | | | Recent Public Company CEO
(last 3 years) | ✓ | ✓ | | | ✓ | | | | Consumer and Retail Industry | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | Home Furnishings Industry | | | | | ✓ | | ✓ | | Public Company M&A Experience | ✓ | ✓ | | ✓ | | ✓ | | ✓ | International Experience | ✓ | ✓ | ✓ | ✓ | ✓ | | ✓ | ✓ | FUNCTIONAL SKILLS | | | | | | | | | Financial Expertise | ✓ | ✓ | | ✓ | ✓ | | | ✓ | Digital / e-Commerce | | | | | ✓ | ✓ | | ✓ | Marketing and Branding | | ✓ | | ✓ | ✓ | ✓ | | | Merchandising | | | | ✓ | ✓ | | | | Human Capital | | | | | | | ✓ | | Supply Chain | | | ✓ | | | | | | Operations | ✓ | ✓ | ✓ | ✓ | ✓ | | | ✓ | Technology | | | | | ✓ | | | | DEMOGRAPHICS | | | | | | | | | Gender (37.5% female) | M | F | M | M | M | F | M | F | Age (average = 59.77) | 69 | 63 | 50 | 62 | 50 | 47 | 69 | 69 |
The lack of a✓for a particular item does not mean that the director does not possess that skill, quality or experience. Pier 1 Imports looks to each director to be knowledgeable in each of the desired areas; however, the✓indicates an exceptional skill, quality or experience that the director brings to the board based on herhis or hisher individual background. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 10
Board LeadershipLeadership Structure Pier 1 Imports’ bylaws require that the directors elect annually from among themselves a chairman of the board. The bylaws, however, grant the board of directors discretion as to whether the chairman of the board is an employee or an officer of Pier 1 Imports. Anon-officer,non-employee elected as chairman of the board is designated as the“non-executive” “non-executive” chairman of the board. Pier 1 Imports’ Corporate Governance Guidelines contain general guidance that the positions of chairman of the board and chief executive officer should be held by separate individuals and that the chairman of the board should be a“non-executive. “non-executive.” Provisions are made in the guidelines for an independent lead director if the roles of chairman of the board and chief executive officer are combined. Historically, since 2007, the roles of chairman and chief executive officer have been filled by separate individuals. This structure of separate individuals holding these positions focuses board
leadership and company leadership in separate and distinct individuals. Each leader can direct herhis or hisher respective group on the objectives at hand while at the same time developing and implementing strategies and financial and operational policies that affect the short- and long-term value of Pier 1 Imports. Terry London began serving as Provisions are made in the Corporate Governance Guidelines for an independentnon-executive chairman in fiscal 2013 and served in this role until the departure of Alexander W. Smith as president and chief executive officer on December 31, 2016. At that time, Mr. London was appointed to the position of interim president and chief executive officer effective January 1, 2017.
Mr. London’s appointment effectively combined lead director if the roles of chairman of the board and chief executive officer during his tenure as interim presidentare combined.
Currently, the chairman of the board and chief executive officer. Due toofficer roles are held by separate individuals. The chairman of the fact Mr. London’s serviceboard has served in this role throughout the most recent fiscal year. He is neither an employee nor an officer of Pier 1 Imports and is therefore considered a non-executive chairman. During the prior fiscal year, the chairman temporarily served as interim president and chief executive officer was temporary in nature, the board of directors determined not to appoint a lead director at the time of his appointment. | | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 9 |
Onfrom January 1, 2017 through April 3,30, 2017, we announced the appointment of Alasdair B. James as president and chief executive officer effective May 1, 2017. The board of directors appointed Mr. London as executive chairman upon Mr. James assuming his role as president and chief executive officer. Mr. London served in the role of executive chairmanfrom May 1, 2017 through July 31, 2017, atfollowing which time he reassumed the role ofnon-executive chairman of the board. chairman.
Director Nomination Process Internal Process for Identifying Candidates Members of the nominating and corporate governance committee or other Pier 1 Imports’ directors or executive officers may, from time to time, identify potential candidates for nomination for election to our board of directors. The nominating and corporate governance committee typically considers candidates for nomination to our board of directors around March (the first month of the fiscal year) of each year. All proposed nominees, including candidates recommended for nomination by shareholders in accordance with the procedures described below, are evaluated in light of our Corporate Governance Guidelines, theBoard Member Qualification Criteriaand the projected needs of the board of directors at the time. The nominating and corporate governance committee may retain a search firm to assist in identifying potential candidates for nomination to the board of directors. The search firm’s responsibilities may include identifying and evaluating candidates believed to possess the qualities and characteristics set forth in theBoard Member Qualification Criteria, as well as providing background information on potential nominees and interviewing and screening nominees if requested to do so by the committee. In April of 2018, the nominating and corporate governance committee recommended the nomination of Robert L. Bass to the board of directors. Mr. Bass was identified by a third-party search firm. On April 5, 2018, the board of directors increased the size of the board from nine to ten directors and elected Mr. Bass as a director. Ms. McCague notified the Company of her intent not to stand forre-election as a director on April 2, 2018. The size of the board is expected to be reduced to nine directors following the expiration of Ms. McCague’s term as a director at the annual meeting of shareholders.committee.
Shareholder Recommendations for Directors The nominating and corporate governance committee will consider candidates recommended by shareholders for nomination for election to Pier 1 Imports’ board of directors. In order for a candidate recommended by a shareholder to be considered by the nominating and corporate governance committee for inclusion as a nominee for director at the 20192020 annual meeting of shareholders, the candidate must meet theBoard Member Qualification Criteriadescribed above and must consent to and be expressly interested in and willing to serve as a Pier 1 Imports director. The nominating and corporate governance committee will then consider the independence of the candidate and evaluate the candidate in light of our Corporate Governance Guidelines andBoard Member Qualification Criteriadescribed above. A shareholder who wishes to recommend a candidate for consideration by the nominating and corporate governance committee for inclusion in the proxy statement as a nominee for director at the 20192020 annual meeting of shareholders should forward by certified or express mail the candidate’s name, business or residence address, principal occupation or employment and a description of the candidate’s qualifications to the chair of the nominating and corporate governance committee, in care of the corporate secretary, at Pier 1 Imports, Inc., 100 Pier 1 Place, Fort Worth, Texas 76102. To be properly considered by the committee, Pier 1 Imports’ corporate secretary must receive the recommendation and all required information no later than 5:00 p.m., local time, on January 16, 2019.10, 2020. The corporate secretary will send properly submitted shareholder recommendations to the chair of the nominating and corporate governance committee. Individuals recommended to the nominating and corporate governance committee by shareholders in accordance with these procedures will be evaluated by the nominating and corporate governance committee in the same manner as individuals who are recommended through other means. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 11
Shareholder NominationsNominations at Annual Meeting Pier 1 Imports’ bylaws also permit a shareholder to propose a candidate for election as a director who is not otherwise nominated by the board of directors through the process described above if the shareholder complies with the shareholder criteria, advance notice, shareholder and nominee information, consent and other provisions contained in the bylaws. To comply with these provisions of our bylaws, a shareholder who wishes to nominate a director for election at the 20192020 annual meeting of shareholders must provide us written notice in proper form accompanied by the requisite materials and information no earlier than February 26, 201920, 2020 and no later than March 28, 2019.21, 2020, provided that the date of the annual meeting is not more than 30 days before or after June 19, 2020. You may contact our corporate secretary to confirm the specific information that you must provide with the advance notice. No shareholder followed the above procedures to recommend an individual for nomination for election to the board of directors at Pier 1 Imports’ 20182019 annual meeting of shareholders, and no shareholder gave us advance written notice that the shareholder intends to nominate a person for election to the board of directors at the 2019 annual meeting of shareholders. Changes in Board Composition During Fiscal 2019 On April 4, 2018, Cynthia P. McCague notified the Company of her intent not to stand for re-election as a director at the 2018 annual meeting of shareholders.In April of 2018, the nominating and corporate governance committee recommended the nomination of Robert L. Bass to the board of directors. Mr. Bass was identified by a third-party search firm. On April 5, 2018, the board of directors increased the size of the board from nine to ten directors and elected Mr. Bass as a director. The size of the board was reduced accordingly from ten to nine directors on June 26, 2018 following the expiration of Ms. McCague’s term as a director at the annual meeting of shareholders. In September of 2018, the nominating and corporate governance committee recommended the nomination of Katherine M. A. (“Allie”) Kline to the board of directors. Ms. Kline was identified by a third-party search firm. On September 25, 2018, the board of directors increased the size of the board from nine to ten directors and elected Ms. Kline as a director. On April 4, 2019, the board of directors decreased the size of the board from ten to nine directors following the resignation of Alasdair B. James as the Company’s president and chief executive officer and as a member of the board of directors. Claire H. Babrowski notified the Company of her intent not to stand for re-election as a director on April 1, 2019. The size of the board is expected to be reduced to eight directors following the expiration of Ms. Babrowski’s term as a director at the annual meeting of shareholders. Director Attendance at Board and Committee Meetings and at the Annual Meeting of Shareholders In fiscal 2019, each incumbent director attended at least 75% of the total number of board of directors meetings and meetings of the committees on which he or she served and that were held during the time of his or her service as a director and/or committee member. Although we have no formal policy on the matter, all directors are encouraged to attend Pier 1 Imports’ annual meeting of shareholders. All directors standing for re-election at the Pier 1 Imports 2018 annual meeting of shareholders were in attendance at the meeting. The board of directors met 11 times in fiscal 2019. Committees of the Board of Directors and Risk Oversight The standing committees of the board of directors are the audit committee, the compensation committee, and the nominating and corporate governance committee. Each committee functions pursuant to a charter that is available on our website atwww.pier1.com by selecting “Investor Relations” under the “OUR COMPANY” section on the home page, selecting “Corporate Governance” then “Documents and Charters.” The following isInformation regarding the members of each committee who served during fiscal 2019, along with a brief description of the roles and responsibilities of each committee:committee, is provided below. Audit Committee. The members of the audit committee were: Claire H. Babrowski (through September 25, 2018) Robert L. Bass (joined September 25, 2018) The audit committee’s purpose is to: ● | • | assist the board of directors with oversight of: |
| ¡o | | the integrity of Pier 1 Imports’ financial statements, |
| | | 10 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
| ¡ | | Pier 1 Imports’ system of internal control, |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 12
| ¡o | | Pier 1 Imports’ compliance with legal and regulatory requirements, |
| ¡o | | Pier 1 Imports’ independent registered public accounting firm’s qualifications and independence (including the hiring, compensation and retention of such firm), and |
| ¡o | | the performance of Pier 1 Imports’ internal audit function; |
prepare the audit committee report that is included in this proxy statement; and ● | | prepare the audit committee report that is included in this proxy statement; and |
● | | discuss with management Pier 1 Imports’ major financial risk exposures and the guidelines and policies governing risk assessment and management at Pier 1 Imports. Each member of the audit committee is independent pursuant to the NYSE independence requirements. The board of directors has determined that each member is financially literate within the meaning of NYSE listing standards, and Ms. Sardini and Mr. Hoffman have each been designated as an audit committee financial expert, as defined by the SEC, and therefore each has accounting or related financial management expertise. The audit committee met 13 times in fiscal 2019. Compensation Committee. The members of the compensation committee were: Michael A. Peel (Chair) (appointed Chair on December 18, 2018) Cheryl A. Bachelder (Chair through December 18, 2018) Katherine M. A. (“Allie”) Kline (joined September 25, 2018) The compensation committee’s purpose is to: | • | develop, review, approve and modify Pier 1 Imports’ major financial risk exposurescompensation philosophy as necessary to achieve our overall business strategies and the guidelinesgoals, attract and policies governing risk assessmentretain key executives, link compensation to organizational performance and management at Pier 1 Imports.provide competitive compensation opportunities; |
discharge (except to the extent otherwise governed by an existing employment contract or other arrangement approved by the board of directors or compensation committee) the board of directors’ responsibilities relating to compensation of Pier 1 Imports’ non-employee directors, chief executive officer, executive officers and other senior officers who report directly to Pier 1 Imports’ chief executive officer; establish, oversee and administer (except to the extent delegated in a governing plan document or otherwise) the policies and plans that govern the components of the compensation of the individuals identified in the preceding bullet, including, but not limited to, cash, equity, short- and long-term incentive compensation, bonus, special or supplemental benefits and perquisites; and receive a report from Pier 1 Imports’ management regarding succession planning, and the development and retention of executive management talent to ensure leadership continuity and organizational strength to achieve Pier 1 Imports’ business strategies and goals. The compensation committee may retain outside compensation consulting firms to assist in the evaluation of executive officer and non-employee director compensation, and has the authority to obtain advice and assistance from independent legal counsel and other compensation advisers. The compensation committee retained Willis Towers Watson as its executive compensation consultant for fiscal 2019. Willis Towers Watson reported directly and was accountable to the compensation committee. Pier 1 Imports’ management may, from time to time, retain an outside consultant for assistance in the formulation of new compensation programs and retirement plans and the modification of existing compensation programs and retirement plans. For fiscal 2019, Pier 1 Imports’ management did not retain an outside consultant to advise on executive compensation. Each member of the compensation committee is independent pursuant to the NYSE independence requirements. The compensation committee met 11 times in fiscal 2019. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 13
Nominating and Corporate Governance Committee. The members of the nominating and corporate governance committee were: Cheryl A. Bachelder (June 26, 2018 through December 18, 2018) Cynthia P. McCague (through June 26, 2018) Michael A. Peel (joined February 1, 2019) The nominating and corporate governance committee’s purpose is to: consider and make recommendations to the board of directors regarding nominees for election as directors to the board and the membership of the various board of directors’ committees; oversee corporate governance matters, including the Pier 1 Imports, Inc. Corporate Governance Guidelines described above on page 3; and assist and advise the board of directors with respect to CEO succession planning. Each member of the nominating and corporate governance committee is independent pursuant to the NYSE independence requirements. The nominating and corporate governance committee met six times in fiscal 2019. Risk Oversight The board of directors exercises its risk oversight responsibilities directly and through delegation of specific responsibilities to the board’s committees through their charters. As part of fulfilling its role in risk oversight, the audit committee receives periodic reports from Pier 1 Imports’ management regarding their assessment and management of the full range of risks affecting Pier 1 Imports. These risks include strategic risks such as brand strategy, merchandise, in-store experience and talent management,management; operational risks such as inventory and supply chain management, cybersecurity and information technology,technology; and financial, compliance and other risks, including product safety, financial reporting, and compliance with federal, state and local laws. The audit committee updates the full board of directors regarding material risk developments. From time to time the entire board, another committee of the board or a specially designated committee of the board may assist the audit committee in this process. This process is also used to develop the risk factors set forth in Pier 1 Imports’ Annual Report on Form10-K and in other filings with the SEC. Each member of the audit committee is independent pursuant to the NYSE independence requirements. The board of directors has determined that each member is an audit committee financial expert, as defined by the SEC, and therefore has accounting or related financial management expertise and is financially literate within the meaning of NYSE listing standards.
Compensation Committee.The compensation committee’s purpose is to:
● | | develop, review, approve and modify Pier 1 Imports’ compensation philosophy as necessary to achieve our overall business strategies and goals, attract and retain key executives, link compensation to organizational performance and provide competitive compensation opportunities; |
● | | discharge (except to the extent otherwise governed by an existing employment contract or other arrangement approved by the board of directors or compensation committee) the board of directors’ responsibilities relating to compensation of Pier 1 Imports’non-employee directors, chief executive officer, executive officers and other senior officers who report directly to Pier 1 Imports’ chief executive officer; |
● | | establish, oversee and administer (except to the extent delegated in a governing plan document or otherwise) the policies and plans that govern the components of the compensation of those individuals, including, but not limited to, cash, equity, short- and long-term incentives, bonus, special or supplemental benefits and perquisites; and |
● | | receive a report from Pier 1 Imports’ management regarding succession planning, and the development and retention of executive management talent to ensure leadership continuity and organizational strength to achieve Pier 1 Imports’ business strategies and goals. |
The compensation committee may retain outside compensation consulting firmsconsiders whether the Company’s incentive plans encourage participants to assist intake risks that would be reasonably likely to have a material adverse impact on the evaluation of executive officerCompany, andnon-employee director compensation, and has the authority to obtain advice and assistance from independent legal counsel and other compensation advisers. The compensation committee and board of directors believe that Pier 1 Imports’ success has resulted, in large part, from our ability to successfully attract, motivate and retain a qualified executive management team and that our future success will depend on our ability to continue to do so. Accordingly, Pier 1 Imports’ overall compensation philosophy is to structure our executive program to attract and retain highly skilled and motivated individuals who will lead Pier 1 Imports to successful short- and long-term performance and create shareholder value. We accomplish this by creating total compensation packages that are competitive in the retail industry, fair and equitable among our executives and provide strong incentives for the long-term success and performance of Pier 1 Imports. The compensation committee will continue to administer and develop Pier 1 Imports’ compensation programs in a manner designed to achieve these objectives. The compensation committee also believes that the total compensation opportunity provided for the executive officers must be evaluated against the compensation of comparable peer group companies.
Base salary and short- and long-term incentive compensation recommendations for the executive officers are typically presented to the compensation committee at one or more of the committee’s meetings priorextent necessary, reviews and discusses with management any related risk mitigation features and disclosures determined to the beginning of the fiscal year and during the first month of the fiscal year. The presentations include recommendations by Pier 1 Imports’ chief executive officer, human resources compensation group, or both, on those elements of compensation, plus recommended plan design changes, if any, and a summary of all proposed awards to all eligible levels of management. The presentations may also include survey data from a peer group of retail companies for the compensation committee’s consideration along with studies and recommendations from an outside compensation consultant. At a meeting occurring around the first month of the fiscal year, the compensation committee and board of directors consider for approval compensation for the current fiscal year with awards generally made in April. Short- and long-term incentive compensation targets for the year are set as part of approval by the compensation committee and board of directors.
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 11 |
be advisable.
The compensation committee retained Willis Towers Watson as its executive compensation consultant for fiscal 2018. Willis Towers Watson reported directly and was accountable to the compensation committee. Willis Towers Watson provided market data and recommendations to the compensation committee for fiscal 2018 regarding base salary, short- and long-term incentive elements of total executive compensation, and other services as directed by the committee. The market data was from a peer group of specialty retailers, all of which were publicly traded at the time the market data was provided, in addition to data provided by the Towers Watson Compensation Data Bank Retail/Wholesale Services Executive Database. Willis Towers Watson did not provide any other services to Pier 1 Imports during fiscal 2018, other than providingnon-customized survey data used by management to evaluate employee compensation.
In compliance with SEC and NYSE requirements regarding the independence of compensation consultants, Willis Towers Watson has provided the compensation committee with a letter confirming its independence and the independence of its respective partners, consultants and employees who advise the compensation committee on executive compensation matters.
In addition to the compensation committee consultant described above, Pier 1 Imports’ management may, from time to time, retain an outside consultant for assistance in the formulation of new compensation programs and retirement plans and the modification of existing compensation programs and retirement plans. For fiscal 2018, Pier 1 Imports’ management did not retain an outside consultant to recommend the amount or form of executive compensation.
Each member of the compensation committee is independent pursuant to the NYSE independence requirements.
Nominating and Corporate Governance Committee.The nominating and corporate governance committee is responsible for considering and making recommendations to the board of directors regarding nominees for election as directors to the board and the membership of the various board of directors’ committees. The nominating and corporate governance committee is also responsible for board succession planning and overseeing corporate governance matters, including the Pier 1 Imports, Inc. Corporate Governance Guidelines described above on page 3. Each member of the nominating and corporate governance committee is independent pursuant to the NYSE independence requirements.
| | | 12 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
Director Attendance at Board and Committee Meetings
and at the Annual Meeting of Shareholders
In fiscal 2018, each director attended at least 75% of the total number of board of directors meetings and meetings of the committees on which he or she served and that were held during the time of her or his service as a director and/or committee member. Although we have no formal policy on the matter, all directors are encouraged to attend Pier 1 Imports’ annual meeting of shareholders. All directors then serving attended the 2017 Pier 1 Imports annual meeting of shareholders. Committee memberships, the number of meetings of the full board and each standing committee, and each director’s dates of service for fiscal 2018 are shown in the table below.
| | | | | | | | | | | | | | | | | NAME | | BOARD OF DIRECTORS | | | AUDIT COMMITTEE | | | COMPENSATION
COMMITTEE | | | NOMINATING AND
CORPORATE GOVERNANCE
COMMITTEE | | Claire H. Babrowski | | | | | | | | | | | | | | | | | 02/26/2017 to 03/03/2018 | | | Member | | | | Member | | | | | | | | | | 02/26/2017 to 12/30/2017 | | | | | | | | | | | | | | | Chair | | 12/31/2017 to 03/03/2018 | | | | | | | | | | | Member | | | | | | Cheryl A. Bachelder | | | | | | | | | | | | | | | | | 02/26/2017 to 03/03/2018 | | | Member | | | | | | | | Chair | | | | | | Hamish A. Dodds | | | | | | | | | | | | | | | | | 02/26/2017 to 03/03/2018 | | | Member | | | | | | | | | | | | | | 02/26/2017 to 12/30/2017 | | | | | | | Member | | | | | | | | Member | | 12/31/2017 to 03/03/2018 | | | | | | | | | | | | | | | Chair | | Brendan L. Hoffman | | | | | | | | | | | | | | | | | 02/26/2017 to 03/03/2018 | | | Member | | | | Member | | | | | | | | | | Alasdair B. James | | | | | | | | | | | | | | | | | 05/01/2017 to 03/03/2018 | | | Member | | | | | | | | | | | | | | Terry E. London | | | | | | | | | | | | | | | | | 02/26/2017 to 07/31/2017 | | | Executive Chairman | | | | | | | | | | | | | | 08/01/2017 to 03/03/2018 | | | Non-Executive Chairman | | | | | | | | | | | | | | 12/31/2017 to 03/03/2018 | | | | | | | | | | | | | | | Member | | Cynthia P. McCague | | | | | | | | | | | | | | | | | 02/26/2017 to 03/03/2018 02/26/2017 to 12/30/2017 | | | Member | | | | | | | | Member | | | | Member | | Michael A. Peel | | | | | | | | | | | | | | | | | 02/26/2017 to 03/03/2018 02/26/2017 to 12/30/2017 | | | Member | | | | | | | | Member | | | | Member | | Ann M. Sardini | | | | | | | | | | | | | | | | | 02/26/2017 to 03/03/2018 | | | Member | | | | Chair | | | | | | | | | | Number of Meetings in Fiscal 2018 | | | 13 | | | | 11 | | | | 8 | | | | 7 | |
Director Independence and Related Person Transactions Independence Considerations It is Pier 1 Imports’ policy that the board of directors will at all times consist of a majority of independent directors. In addition, all members of the audit committee, the compensation committee and the nominating and corporate governance committee must be independent directors. To be considered independent, a director must satisfy both the subjective and objective independence requirements established by the NYSE. In assessing independence, under the subjective test, the board of directors takes into accountmust affirmatively determine that the standardsdirector has no disqualifying relationship as set forth in the objectivelisting tests of the NYSE’s corporate governance standards, and reviews and discusses additional information provided by the directors andhas no material relationship with Pier 1 Imports, with regard to each director’s business and personal activitieseither directly or indirectly as they may relate to Pier 1 Imports and Pier 1 Imports’ management. Based on the foregoing, as required by NYSE rules, the boarda partner, shareholder or officer of directors makesan organization that has a subjective determination as to each independent director that no material relationship exists with Pier 1 Imports. The board of directors will broadly consider all relevant facts and circumstances relating to a director in determining whether that director is independent.
Based on the NYSE independence requirements, the board of directors has determined that nine of the ten currentall members of the board of directors are independent. They arewho served at any time during fiscal 2019 were independent during their service, except for Mr. James and Ms. Babrowski,Bachelder. Ms. Bachelder Mr. Bass, Mr. Dodds, Mr. Hoffman, Mr. London, Ms. McCague, Mr. Peel and Ms. Sardini. Ms. McCague notified the Company ofwas determined to be independent prior to her intent not to stand forre-electionappointment as a director on April 4, 2018. Pier 1 Imports’ president andinterim chief executive officer effective December 18, 2018 following the resignation of Alasdair B. James,James; however, she is an employee director. | | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 13 |
Independence for thenon-employee directors was considered under both the subjective and objective standards of the NYSE. In other words, none of thenon-employee directors were disqualified from independent status under the objective standard, and eachnon-employee director was determined not to have a material relationship with Pier 1 Imports under the subjective standard. Mr. London was not considered to be independent during his tenurewhile she serves in that role.
The board of directors determined that the former service of Mr. London as interim president and chief executive officer and chairman of the board of Pier 1 Imports from January 1, 2017 through April 30, 2017, and as executive chairman. Following Augustchairman from May 1, 2017 the date on which Mr. Londonthrough July 31, 2017, when he reassumed his role asnon-executive chairman of the board, evaluateddoes not preclude a finding of independence with respect to Mr. London’s roleLondon. In making this determination, the board of directors considered the fact that NYSE has specifically provided within its independence tests (through commentary) that such former service should not disqualify a director from being considered independent following that employment and relationships with Pier 1 Imports pursuant tothat compensation received for such former service need not be considered in determining independence under the requirements described above and affirmatively determined he had resumed his independent status.tests within the NYSE automatic disqualifiers.
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 14
For its independence determination, ourthe board of directors, with input from the nominating and corporate governance committee, considered relationships that, while not constituting related party transactions in which a director had a direct or indirect material interest, nonetheless involved transactions between Pier 1 Imports and a company with which a director is or may be affiliated, whether through employment status or by virtue of family relationships. Included in the committee’s review were the following transactions, which occurred in the ordinary course of business. All of these matters were below the relevant thresholds for independence as set forth in the NYSE Listing Manual and our Corporate Governance Guidelines.Listed Company Manual. DIRECTOR | | MATTERS CONSIDERED | DIRECTORClaire H. Babrowski
| | MATTERS CONSIDEREDOrdinary course of business transactions with Sogeti USA, LLC, a member of Capgemini Group. Ms. Babrowski’s brother had formerly been employed within Capgemini Group until June 2018.
| Robert L. Bass | | Ordinary course of business transactions with Best Buy Co., Inc., including the sublease by Pier 1 Imports (U.S.), Inc., a subsidiary of Pier 1 Imports, of one store. Mr. Bass has served as chief supply officer for Best Buy Co., Inc. since 2017. He was not involved in the negotiation of the terms of the sublease, which occurred prior to his joining Best Buy Co., Inc., and has no direct or indirect material interest in any of the business transactions with Best Buy Co., Inc. | Claire H. BabrowskiKatherine M. A. (“Allie”) Kline
| | Ordinary course of business transactions with Sogeti, a wholly-owned subsidiaryVerizon Business for telephone service, with the payments made by Pier 1 Imports in each of the Capgemini Group.last three fiscal years being nominal in amount. Ms. Kline formerly served as chief marketing and communications officer for AOL from 2013 to 2017 prior to and following Verizon’s acquisition of AOL in 2015. Ordinary course banking transactions by several Pier 1 stores with branches of the banking subsidiaries of Huntington Bancshares Incorporated, with such transactions being nominal in amount in each of the last three fiscal years. Ms. Kline was elected as a director of Huntington Bancshares Incorporated on April 18, 2019. Her only interest in the underlying business relationship arises from her service as a director of Huntington Bancshares Incorporated. |
Related Person Transaction Policies and Procedures As part of our Code of Business Conduct and Ethics, Pier 1 Imports’ board of directors has adopted written Related Person Transaction Policies and Procedures that are administered by the nominating and corporate governance committee. Our Code of Business Conduct and Ethics is available on our website atwww.pier1.com by selecting “Investor Relations” under the “OUR COMPANY” section on the home page, selecting “Corporate Governance” then “Documents and Charters.” The policy applies to any transaction or series of transactions in which Pier 1 Imports is directly or indirectly a participant, the amount involved exceeds $120,000 annually and a related person has a direct or indirect material interest. The policy defines a “related person” as any (a) person who is or was (since the beginning of the last fiscal year for which Pier 1 Imports has filed a Form10-K and proxy statement, even if they dothe person does not presently serve in that role) an executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of Pier 1 Imports common stock, or (c) immediate family member of any of the foregoing. Transactions that fall within the policy (“interested transactions”) will be reviewed by the nominating and corporate governance committee for approval, ratification or other action. Based on its consideration of all of the relevant facts and circumstances, the nominating and corporate governance committee will decide whether or not to approve the interested transaction and will approve only those interested transactions that are believed to be in the best interest of Pier 1 Imports. The policy provides that certain interested transactions are deemed to bepre-approved, even if the aggregate amount involved will exceed $120,000. Those interested transactions are: (a) employment of executive officers, (b) director compensation, (c) certain transactions with other companies if the aggregate amount involved does not exceed the greater of $1,000,000 or 2% of the other company’s total annual revenues, (d) certain charitable contributions by Pier 1 Imports if the aggregate amount involved does not exceed the lesser of $10,000 or 2% of the organization’s total annual receipts, (e) transactions where all shareholders receive proportional benefits (e.g., dividends), (f) transactions involving competitive bids, (g) regulated transactions, and (h) certain banking-related services. In addition, the policy delegates to the chair of the nominating and corporate governance committee the authority topre-approve or ratify any interested transaction in which the aggregate amount involved is expected to be less than $250,000. During fiscal 2018,2019, the chair of the nominating and corporate governance committee did notpre-approve or ratify any transactions. Transactions with Related Persons During fiscal 2018,2019, there were no transactions in which Pier 1 Imports was or will become a participant and in which any related person had or will have a direct or indirect material interest that required review and approval by the nominating and governance committee. We indemnify our directors and executive officers to the fullest extent permitted by law and have also entered into agreements with these individuals contractually obligating us to provide this indemnification.
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 15
Meetings of Independent DirectorsDirectors without Management Present The independent directors of Pier 1 Imports met without management present during the last fiscal year at regularly scheduled executive sessions. Mr. London, while serving asThe non-executive chairman of the board of directors presided over the meetings of the independent directors. While Mr. London served as interim president and chief executive officer and executive chairman, the independent directors were authorized to select an independent director to preside over each executive session or any other matter requiring action by the independent directors. Typically, one of the chairs of the board’s standing committees presided over those sessions. | | | 14 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
Procedures for Communicating with Directors The board of directors has established a process by which shareholders and other interested parties can send communications to board members. Shareholders and other interested parties can send written communications to one or more members of Pier 1 Imports’ board of directors, addressed to: [Name of Board Member], Board of Directors Pier 1 Imports, Inc. c/o Corporate Secretary 100 Pier 1 Place Fort Worth, Texas 76102 In addition, shareholders and other interested parties may communicate with the chair of the audit committee, compensation committee, or nominating and corporate governance committee by sending an email toauditchair@pier1.com,compchair@pier1.com, orcorpgovchair@pier1.com, respectively, as well as with the independent directors as a group by sending an email toindependentdirectors@pier1.com, or the chairman of the board by sending an email toboardchair@pier1.com. Communications are distributed to the board of directors or to the individual director or directors, as appropriate, depending on the subject matter and facts and circumstances outlined in the communication. Communications that are not related to the duties and responsibilities of the board of directors or a committee will not be distributed, including spam, junk mail and mass mailings, product concerns or inquiries, new product suggestions, résumés and other forms of job inquiries, surveys and business solicitations or advertisements. In addition, we will not distribute unsuitable material to our directors, including material that is unduly hostile, threatening or illegal. Non-Employee Director Compensation for the Fiscal Year Ended March 3, 20182, 2019 Fees Paid to Directors In general,Beginning in fiscal 2019, we made significant changes to our board of director compensation program to better align our directors’ compensation with the market and our peers. Effective June 26, 2018, we decreased the annual cash retainer payable to non-employee directors whofrom $150,000 to $85,000 and added an equity award valued at $100,000 to further link the interests of our non-employee directors with our shareholders. Each committee chair continued to receive an annual cash retainer of $25,000, and the chairman of the board continued to receive an annual cash retainer of $125,000. All retainers are payable in equal monthly installments on the last business day of each fiscal month.
The annual equity awards are made to each non-employee director following his or her election at each annual meeting and consist of a number of restricted stock units (“RSUs”) valued at $100,000 based on the 30-day trailing average of the closing price of the common stock of Pier 1 Imports employees do not receive any compensationas of the grant date. The RSUs will vest in full on the date of the following year’s annual meeting of shareholders. The award agreements for theirthe RSUs provide for accelerated vesting upon death or disability and upon the occurrence of a corporate change, as defined in the award agreements. Ms. Kline was appointed as a non-employee director on September 25, 2018 and received an equity award of RSUs valued at $75,000, which was prorated for her actual service during the board activities. year, based on the 30-day trailing average of the closing price of the common stock of Pier 1 Imports as of the grant date. The RSUs will vest on September 25, 2019. Future equity awards will be made annually after her election to the board at the annual meeting. For fiscal 2018,2019, non-employee directors fees consisted of: | ● | | An annual cash retainer of $150,000. |
| ● | | An additional annual cash retainer of $25,000 for each committee chair, following the increase in retainer fees to the nominating and corporate governance committee to $25,000 in line with the other committee fees. |
| ● | | An annual cash retainer of $125,000 for the chairman of the board. |
For fiscal 2018,non-employee directors did not receive additional fees for attending meetings, nor did they receive stock option or restricted stock grants.meetings. During fiscal 2018,2019, each
non-employee director was eligible to participate in the Pier 1 Imports’ Director Deferred Stock Unit Program, the Pier 1 Imports, Inc. Stock Purchase Plan and the Pier 1 Imports, Inc. Deferred Compensation Plan. In general, directors who are Pier 1 Imports employees do not receive any compensation for their board activities. At the end of fiscal 2018 and the beginning of fiscal 2019 we made the following significant changes to our board of director compensation program to better align with the market and our peers, which are effective June 26, 2018:
| ● | | Non-employee directors will receive an annual cash retainer of $85,000. |
| ● | | Non-employee directors will also receive an annual equity award following their election at each annual meeting consisting of a number of restricted stock units valued at $100,000 based on the30-day trailing average of the closing price of the common stock of Pier 1 Imports as of the grant date. The restricted stock units will vest in full over aone-year period ending on the date of the following year’s annual meeting of shareholders. |
The board of directors increased the equity portion of non-employee director compensation to further link their interests with our shareholders. Each committee chair will continue to receive an annual cash retainer of $25,000, and the chairman of the board will continue to receive an annual cash retainer of $125,000.
During Mr. London’s serviceMs. Bachelder began serving as interim president and chief executive officer from January 1, 2017 to April 30, 2017on December 18, 2018, and as executive chairman from May 1, 2017 to July 31, 2017, he continued to receive an annual cash retainer, paid monthly, of $125,000 for his service as chairman; however, he ceased receivingwill forgo thenon-employee director cash retainer of $150,000$85,000 during hisher dual-service period. In recognition for his past service as chairman of the board, and in order to provide an incentive for his continued service as chairman of the board, Mr. London received a grant of 142,857 shares of time-based restricted stock on May 1, 2017, with vesting to occur 40% on each of the first two anniversaries of the grant date and 20% on the third anniversary, provided he is still serving as a director on the respective vest dates. He began receiving his annualnon-employee director cash retainer again in August of 2017.
During fiscal 2018, all of ournon-employee directors, other than Mmes. Babrowski and Sardini, participated in Pier 1 Imports’Imports offers its directors a Director Deferred Stock Unit Program. The programProgram (the “DSU Program”) that provides an optional deferral of up to 100% of the monthly cash director fees.retainers earned by the directors. Deferred feesretainers (but not committee chair or chairman fees)retainers) are matched 25% by Pier 1 Imports and the total deferred feesretainers and matching contributions are converted into an equivalent value of deferred stock units (“DSUs”) up to a maximum calendar year limit of 750,000 units per individual. Deferred feesretainers plus matching contributions are converted to DSUs based on the closing price of Pier 1 Imports common stock on the last trading day of the fiscal month in which the fees are payable.were earned. The DSUs are credited to an account maintained by Pier 1 Imports for each non-employee
PIER 1 IMPORTS, INC.non-employee | 2019 Proxy Statement | 16
director. Each DSU is the economic equivalent of one share of Pier 1 Imports common stock. Each DSUstock, and is eligible to receive dividends payable on Pier 1 Imports common stock in additional DSUs equal to the dividend per share of common stock divided by the closing price of Pier 1 | | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 15 |
Imports common stock on the dividend payable date. The DSUs do not have voting rights. The DSUs will be exchangedone-for-one for shares of Pier 1 Imports common stock on the date the person ceases to be a member of the board of directors and the shares will be transferred to the person within five business days of such date, except that DSUs will be settled in cash to the extent applicable plan limitations at such time preclude the issuance of Pier 1 Imports common stock. During fiscal 2019, Messrs. Dodds and Peel and Ms. McCague elected to defer a portion of their cash retainers to the DSU Program. Mmes. Babrowski and Sardini and Mr. Dodds participatedDirectors may participate in the Pier 1 Imports, Inc. Stock Purchase Plan during fiscal 2018.(the “SPP”). The stock purchase plan is a broad-based plan available to allnon-employee directors and all eligible employees. The planSPP provides thatnon-employee directors may contribute to the planSPP all or a portion of their monthly cash director fees.retainers, and Pier 1 Imports will contribute to the planSPP an amount equal to 25% of eachnon-employee director’s contribution. The contributed funds are
used to make monthly purchases of shares of Pier 1 Imports common stock based on the NYSE closing price for Pier 1 Imports common stock on the last trading day of the calendar month. Shares purchased are allocated to the accounts of participants in proportion to the funds received from each respective account. All shares in a participant’s account are automatically released to the participant at least once each calendar year without affecting the participant’s participation in the plan.SPP. The participant may hold the released shares in the planSPP or sell or transfer the released shares. A participant’s account is credited with all dividends paid on shares held in herhis or hisher account and those cash dividends are reinvested under the planSPP in Pier 1 Imports common stock. Mmes. Babrowski and Sardini participated in the SPP during fiscal 2019. None of thenon-employee directors participated in the Pier 1 Imports, Inc. Deferred Compensation Plan in fiscal 2018.2019. No dividends were paid in fiscal 2019. Fiscal 20182019 Non-Employee Director Compensation Table The following table sets forth a summary of thenon-employee director compensation with respect to the fiscal year ended March 3, 2018,2, 2019, for services rendered in all capacities to Pier 1 Imports:Imports. We provide limited perquisites to our directors including the opportunity to purchase Pier 1 Imports merchandise at a discount. No director had perquisites in an amount greater than $10,000 for fiscal 2019. | NAME | | FEES EARNED OR PAID IN CASH(1) ($) | | STOCK AWARDS(4) ($) | | ALL OTHER
COMPENSATION(5) ($) | | TOTAL ($) | FEES EARNED OR PAID IN CASH (1) ($) | RESTRICTED STOCK UNIT AWARDS (2) ($) | STOCK AWARDS ($) | TOTAL ($) | Claire H. Babrowski(2) | | | $180,833 | | | | $ | 0 | | | $37,813 | | | $ | 218,646 | | | Claire H. Babrowski | | $104,964 | $107,998 | $26,241 (3) | $231,205 | Cheryl A. Bachelder | | | $175,000 | | | | $ | 63,720 | | | – | | | $ | 238,720 | | $106,917 | $107,998 | - | $206,917 | Robert L. Bass | | $ 93,697 | $107,998 | - | $193,697 | Hamish A. Dodds | | | $154,167 | | | | $ | 38,717 | | | $15,625 | | | $ | 208,509 | | $129,964 | $107,998 | $17,660 (4) | $247,624 | Brendan L. Hoffman | | | $150,000 | | | | $ | 34,342 | | | $ 0 | | | $ | 184,342 | | $104,964 | $107,998 | - | $204,964 | Terry E. London(3) | | | $211,607 | | | | $ | 60,367 | | | – | | | $ | 271,974 | | | Cynthia P. McCague | | | $150,000 | | | | $ | 32,443 | | | – | | | $ | 182,443 | | | Katherine M. A. (“Allie”) Kline (5) | | $ 37,845 | $ 61,249 | - | $112,845 | Terry E. London | | $229,964 | $107,998 | - | $329,964 | Cynthia P. McCague (6) | | $ 46,071 | - | $ 5,759 (4) | $ 51,830 | Michael A. Peel | | | $150,000 | | | | $ | 61,175 | | | – | | | $ | 211,175 | | $110,262 | $107,998 | $11,350 (4) | $221,612 | Ann M. Sardini | | | $175,000 | | | | $ | 0 | | | $16,500 | | | $ | 191,500 | | $129,964 | $107,998 | $ 9,000 (3) | $238,964 |
(1) | | This column represents the amount of cash compensation earned in fiscal 20182019 for board and committee service. As described in footnotefootnotes 3 and 4 below, certain percentagesin lieu of thissome or all of their cash compensation, were deferred by certain directors intoelected to receive DSUs pursuant to the Pier 1 Imports’Imports Director Deferred Stock Unit Program. |
(2) | DSU Program or shares of common stock pursuant to the SPP. Ms. BabrowskiBachelder no longer received aone-time payment of $10,000 in recognition of the additional time associated with theher director retainers after her appointment as interim chief executive officer search.on December 18, 2018. |
(3)(2)
| | While serving as interim president and chief executive officer during fiscalEffective June 26, 2018, (from February 26, 2017 – April 30, 2017) and as executive chairman (from May 1, 2017 – July 31, 2017), Mr. London continued to receive anthe annual cash retainer for servingpayable to non-employee directors was decreased from $150,000 to $85,000 and an equity award of RSUs valued at $100,000 was added. Ms. Babrowski, Ms. Bachelder, Mr. Bass, Mr. Dodds, Mr. Hoffman, Mr. London, Mr. Peel and Ms. Sardini each received 36,363 RSUs, which will vest in full as chairman of the board of directors, but did not receiveJune 19, 2019, the annual retainer fornon-employee directors. Mr. London’s compensation for servingmeeting date. Ms. Kline was appointed as interim presidenta non-employee director on September 25, 2018, and chief executive officer and as executive chairman is presented in the Summary Compensation Tablereceived a prorated equity award of RSUs valued at $75,000. Ms. Kline received 41,666 RSUs which will vest on page 40. September 25, 2019. |
(4)(3)
| | This columnamount represents the dollar value of Pier 1 Imports’ 25% match on monthly cash retainer fees contributed by each director into the SPP. These amounts were converted to common stock and are held by the SPP until released to the participant. The number of shares is calculated using the closing price of Pier 1 Imports common stock on the last trading day of each calendar month in which the contributions were made. |
(4) | This amount represents the dollar value of Pier 1 Imports’ 25% match on monthly cash retainer fees (but not committee chair or chairman fees) deferred by each director into the Pier 1 Imports’Imports Director Deferred Stock UnitDSU Program. This column also includes dividends paid on DSUs held in her or his account. These amounts were converted to DSUs as shown in the table below. The dollar amount represents the grant date fair value of suchthe DSUs granted in fiscal 20182019 in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”). The number of DSUs is calculated using the closing price of Pier 1 Imports common stock on the last trading day of eachthe fiscal month in which the fees were earned, which price was used to calculate the grant date fair value of the DSUs. For dividends, the number of DSUs is calculated using the closing price of Pier 1 Imports common stock on the dividend payable date.earned. |
(5) | | See Fiscal 2018 All Other Compensation table below. |
Ms. Kline was appointed as a non-employee director on September 25, 2018. | | | 16 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
(6) | Ms. McCague did not stand for re-election as a director at the annual meeting of shareholders on June 26, 2018. |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 17
The following table shows fiscal 20182019 DSUs forgranted to eachnon-employee director given herhis or hisher deferral percentage and Pier 1 Imports’ match: | NAME | | DEFERRAL % | | FISCAL
YEAR 2018
FEES
DEFERRED ($) | | DSUS
CONVERTED
FROM
DEFERRED
FEES (#) | | DSUS
CONVERTED
FROM 25%
COMPANY
MATCH (#) | | DIVIDENDS
DEFERRED
DURING
FISCAL
YEAR 2018 ($) | | DSUS
CONVERTED
FROM
DEFERRED
DIVIDENDS (#) | | AGGREGATE DSUS OWNED AT FISCAL 2018 YEAR-END (#) | DEFERRAL % | FISCAL YEAR 2019 FEES DEFERRED ($) | DSUS CONVERTED FROM DEFERRED FEES (#) | DSUS CONVERTED FROM 25% COMPANY MATCH (#) | AGGREGATE DSUS OWNED AT FISCAL 2019 YEAR-END (#) | Claire H. Babrowski | | 0% | | | $ | 0 | | | | | 0 | | | | | 0 | | | | $ | 0 | | | | | 0 | | | | | 0 | | 0% | - | Cheryl A. Bachelder | | 100%/0%(1) | | | $ | 145,833 | | | | | 29,976 | | | | | 6,423 | | | | $ | 32,470 | | | | | 7,578 | | | | | 139,125 | | 0% | - | 139,125 | Robert L. Bass | | 0% | - | Hamish A. Dodds | | 50%/70%(1) | | | $ | 82,917 | | | | | 18,882 | | | | | 4,505 | | | | $ | 18,717 | | | | | 4,342 | | | | | 85,087 | | 70%/50%(1) | $87,308 | 58,174 | 11,540 | 154,801 | Brendan L. Hoffman | | 50%/0%(1) | | | $ | 62,500 | | | | | 12,847 | | | | | 3,212 | | | | $ | 18,717 | | | | | 4,342 | | | | | 77,759 | | 0% | - | 77,759 | Katherine M. A. (“Allie”) Kline | | 0% | - | Terry E. London | | 10%/0%(1) | | | $ | 11,295 | | | | | 2,643 | | | | | 360 | | | | $ | 58,827 | | | | | 13,401 | | | | | 221,397 | | 0% | - | 221,397 | Cynthia P. McCague | | 50% | | | $ | 75,000 | | | | | 16,542 | | | | | 4,135 | | | | $ | 13,693 | | | | | 3,199 | | | | | 63,639 | | | Cynthia P. McCague (2) | | 50% | $23,036 | 8,542 | 2,135 | - | Michael A. Peel | | 100%/50%(1) | | | $ | 137,500 | | | | | 29,388 | | | | | 7,347 | | | | $ | 26,800 | | | | | 6,266 | | | | | 120,477 | | 50%/0%(1) | $45,964 | 29,420 | 7,026 | 156,923 | Ann M. Sardini | | 0% | | | $ | 0 | | | | | 0 | | | | | 0 | | | | $ | 0 | | | | | 0 | | | | | 0 | | 0% | - |
(1) | | Effective January 1, 2018,2019, Messrs. Dodds and Peel elected to defer 70%50% and 50%0%, respectively, of their annual cash fees, and Ms. Bachelder and Messrs. Hoffman and London elected to no longer defer any of their cash fees.retainers. |
(2) | Ms. McCague did not stand for re-election to the board at the 2018 annual meeting of shareholders. On June 26, 2018, 74,316 DSUs were converted, one-for-one, to 74,316 shares of Pier 1 Imports common stock and delivered to Ms. McCague. |
The following table shows the Pier 1 Imports common stock closing price by month used to calculate the number of DSUs to be received for deferred director fees plus any Pier 1 Imports’ match, including the closing prices for the dividend payment dates.match. This closing price also represents the grant date fair value of each DSU in accordance with FASB ASC Topic 718. | | | FISCAL MONTH IN WHICH
FEES WERE EARNED | | CLOSING PRICE OF PIER 1 IMPORTS COMMON STOCK ON LAST TRADING DAY OF EACH FISCAL MONTH | March 20172018 | | $7.16 3.43 | April 20172018 | | $6.74 2.32 | May 20172018 | | $5.23 2.42 | June 20172018 | | $5.19 2.58 | July 20172018 | | $4.69 2.13 | August 20172018 | | $4.19 1.84 | September 20172018 | | $4.19 1.51 | October 20172018 | | $4.41 1.55 | November 20172018 | | $4.45 1.44 | December 20172018 | | $4.14 0.43 | January 20182019 | | $3.64 0.82 | February 20182019 | | $3.16 1.42 |
| | | DATE OF DIVIDEND | | CLOSING PRICE OF PIER 1 IMPORTS
COMMON STOCK
| May 10, 2017
| | $6.87
| August 2, 2017
| | $4.52
| November 1, 2017
| | $4.19
| January 31, 2018
| | $3.32
|
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 17 |
The following table describes each component of All Other Compensation for fiscal 2018:
| | | | | | | | | | | | | FISCAL 2018 ALL OTHER COMPENSATION | | NAME | | PAYMENTS
RELATING
TO STOCK
PURCHASE
PLAN(1) | | | OTHER
EXPENSES(2) | | | TOTAL ALL OTHER
COMPENSATION | | Claire H. Babrowski | | | $37,813 | | | | $0 | | | | $37,813 | | Cheryl A. Bachelder | | | N/A | | | | – | | | | – | | Hamish A. Dodds | | | $15,625 | | | | – | | | | $15,625 | | Brendan L. Hoffman | | | N/A | | | | $0 | | | | $ 0 | | Terry E. London | | | N/A | | | | – | | | | – | | Cynthia P. McCague | | | N/A | | | | – | | | | – | | Michael A. Peel | | | N/A | | | | – | | | | – | | Ann M. Sardini | | | $16,500 | | | | $0 | | | | $16,500 | |
(1) | This column reports aggregate matching contributions to the account of each director who participated in the Stock Purchase Plan. |
(2) | Perquisites and personal benefits aggregating less than $10,000 are not shown. |
Other Governance Matters Prohibition on Hedging and Pledging We have a written insider trading policy that, among other things, prohibits directors, officers and employees from selling short a Pier 1 Imports security, from trading in options on a Pier 1 Imports security, including calls, puts, and other derivative securities, from engaging in other forms of hedging or monetization transactions, such as equity swaps, exchange funds, collars or variable forwards, with respect to a Pier 1 Imports security, holding Pier 1 Imports securities in a margin account or pledging Pier 1 Imports securities as collateral for a loan, or placing standing or limit orders on a Pier 1 Imports security (except standing or limit orders under approved ruleRule 10b5-1 trading plans). Clawback Policy We have a policy with respect to the recovery of cash and equity-based incentive compensation, commonly referred to as a “clawback policy,” applicable to our executive officers (as defined under Rule3b-7 of the Exchange Act). The policy appears in Pier 1 Imports’ Code of Business Conduct and Ethics, available on our website atwww.pier1.comby selecting “Investor Relations” under the “OUR COMPANY” section on the home page, selecting “Corporate Governance” then “Documents and Charters,” and governs the recovery of incentive-based compensation given the occurrence of certain events which could lead to an adjustment of that compensation. | | | 18 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 18
SHARE OWNERSHIP Security Ownership of Directors and Executive Officers The following table indicates the beneficial ownership of Pier 1 Imports common stock by each director nominee, each named executive officer shown below in the table included under the caption “Summary Compensation Table for the Fiscal Years Ended March 2, 2019, March 3, 2018, and February 25, 2017, and February 27, 2016,” and all directors and executive officers as a group, as of April 27, 2018,22, 2019, unless otherwise indicated below: | | NAME OF BENEFICIAL OWNER | | COMMON SHARES
BENEFICIALLY
OWNED(1)(2) | | PERCENT
OF CLASS | SHARES OF COMMON STOCK BENEFICIALLY OWNED(1)(2)(3) | PERCENT OF CLASS | Claire H. Babrowski | | | | 77,627 | | | | | * | | 217,333 | * | Cheryl A. Bachelder | | | | 141,187 | | | | | * | | 907,477 | 1.07% | Michael R. Benkel | | | | 354,325 | | | | | * | | | Jeffrey N. Boyer | | | | 19,784 | | | | | * | | | Catherine David | | | | 410,956 | | | | | * | | | Robert L. Bass | | 36,363 | * | Robert E. Bostrom | | 657,894 | * | Kelly N. Cook | | - | * | Hamish A. Dodds | | | | 122,257 | | | | | * | | 232,423 | * | Mark R. Haley | | 262,752 | * | Brendan L. Hoffman | | | | 77,759 | | | | | * | | 114,122 | * | Alasdair B. James | | | | 616,046 | | | | | * | | 68,275 | * | Katherine M. A. (“Allie”) Kline | | - | * | Terry E. London | | | | 364,254 | | | | | * | | 410,617 | * | Cynthia P. McCague | | | | 65,916 | | | | | * | | | Michael A. Peel | | | | 122,755 | | | | | * | | 193,286 | * | Darla D. Ramirez | | | | 54,831 | | | | | * | | | Ann M. Sardini | | | | 56,871 | | | | | * | | 133,686 | * | Bhargav J. Shah | | | | 163,517 | | | | | * | | | William H. Savage | | 274,374 | * | Nancy A. Walsh | | | | 182,481 | | | | | * | | 478,261 | * | All directors and executive officers as a group (18 individuals) | | | | 3,311,409 | | | | | 3.96 | % | | All directors and executive officers as a group (15 individuals) | | 4,295,599 | 4.99% |
* | | Represents less than 1% of the outstanding shares of the class. |
(1) | | The table includes shares that the person has the right to acquire within 60 days of April 27, 2018, upon the exercise of stock options: Mr. Benkel (10,000 shares). The table also includes unvested shares of restricted stock over which the person has sole voting power. |
(2) | | The table includes DSUs as of April 27, 2018,22, 2019, for Ms. Bachelder (139,125 DSUs), Mr. Dodds (88,701(162,504 DSUs), Mr. Hoffman (77,759 DSUs), Mr. London (221,397 DSUs), Ms. McCague (65,916 DSUs) and Mr. Peel (122,755(156,923 DSUs). The DSUs will be exchangedone-for-one for shares of Pier 1 Imports common stock when the director ceases to be a member of the board of directors, as described above under the caption“Non-Employee “Non-Employee Director Compensation for the Fiscal Year Ended March 3, 20182, 2019 – Fees Paid to Directors.” A DSU is the economic equivalent of one share of Pier 1 Imports common stock and does not carry any voting rights. |
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 19 |
(3) | The table includes 36,363 RSUs vesting within 60 days of April 22, 2019 for all directors except Ms. Kline. For directors who elected to defer the conversion of their RSUs, the RSUs will be exchanged one-for-one for shares of Pier 1 Imports common stock when the deferral election chosen by the director lapses. All such deferrals will lapse as of the director’s termination of service to the board. |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 19
Security Ownership of CertainCertain Beneficial Owners The following table indicates the ownership by each person who is known by Pier 1 Imports as of April 27, 2018,22, 2019, to beneficially own more than 5% of Pier 1 Imports common stock:stock based on 85,013,806 shares outstanding: | | | | | | | | | | | NAME AND ADDRESS OF BENEFICIAL OWNER | COMMON SHARES BENEFICIALLY OWNED | PERCENT COMMON SHARES
BENEFICIALLY
OWNED
| | PERCENT
OF CLASS | Towle & Co.
1610 Des Peres Road, Suite 250
St. Louis, MO 63131
| | | | 8,722,580 | (1) | | | | 10.51 | % | Dimensional Fund Advisors LP Building One 6300 Bee Cave Road Austin, TX 78746 | 6,635,202 (1) | | | 7,044,967 | (2) | | | | 8.49 | %7.8% | The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
| | | | 6,128,633 | (3) | | | | 7.39 | % | BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 5,511,193 (2) | | | 5,600,050 | (4) | | | | 6.75 | %6.5% | JPMorgan Chase & CoCharles Schwab Investment Management Inc.
211 Main Street San Francisco, CA 94105 270 Park Avenue New York, NY 10017
| 4,413,120 (3) | | | 4,290,482 | (5) | | | | 5.17 | %5.2% |
(1) | | Based on information contained in a Schedule 13G filed with the SEC on February 7, 2018. Towle & Co. has sole voting power over the 8,722,580 shares shown and sole dispositive power over the 8,722,580 shares shown. The Schedule 13G filed by Towle & Co. provides information as of February 7, 2018, and, consequently, the beneficial ownership of Towle & Co. may have changed between February 7, 2018 and the printing of this proxy statement. |
(2) | | Based on information contained in a Schedule 13G/A filed with the SEC on February 9, 2018,8, 2019, Dimensional Fund Advisors LP has sole voting power over 6,762,6746,363,165 of the shares shown and sole dispositive power over the 7,044,9676.635,202 shares shown. The Schedule 13G13G/A filed by Dimensional Fund Advisors LP provides information as of February 9,December 31, 2018, and, consequently, the beneficial ownership of Dimensional Fund Advisors LP may have changed between February 9, 2018 andprior to the printing of this proxy statement. |
(3)(2)
| | Based on information contained in a Schedule 13G/A filed with the SEC on February 9, 2018, The Vanguard Group has sole voting power over 88,435 of the shares shown, shared voting power over 8,241 of the shares shown, sole dispositive power over 6,037,564 of the shares shown, and shared dispositive power over 91,069 of the shares shown. The Schedule 13G/A filed by The Vanguard Group provides information as of February 7, 2018, and, consequently, the beneficial ownership of The Vanguard Group may have changed between February 9, 2018 and the printing of this proxy statement. |
(4) | | Based on information contained in a Schedule 13G/A filed with the SEC on January 29, 2018,6, 2019, BlackRock, Inc. has sole voting power over 5,370,6835,207,480 of the shares shown and sole dispositive power over the 5,600,0505,511,193 shares shown. The Schedule 13G/A filed by BlackRock, Inc. provides information as of January 24,December 31, 2018, and, consequently, the beneficial ownership of BlackRock, Inc. may have changed between January 29, 2018 andprior to the printing of this proxy statement. |
(5)(3)
| | Based on information contained in a Schedule 13G filed with the SEC on January 11, 2018, JPMorgan Chase & CoFebruary 14, 2019, Charles Schwab Investment Management Inc. has sole voting power over 3,777,382 shares shown and sole dispositive power over the 4,290,4824,413,120 shares shown. The scheduleSchedule 13G filed by JPMorgan Chase & CoCharles Schwab Investment Management Inc. provides information as of January 11,December 31, 2018, and, consequently, the beneficial ownership of JPMorgan Chase & CoCharles Schwab Investment Management Inc. may have changed between January 11, 2018 andprior to the printing of this proxy statement. |
Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of Pier 1 Imports’ equity securities, to file with the SEC reports disclosing their ownership and changes in ownership of Pier 1 Imports common stock or other equity securities. Our executive officers, directors and greater than 10% shareholders are required by SEC regulations to furnish Pier 1 Imports with copies of all Section 16(a) reports they file. To our knowledge, and based solely on a review of the furnished Section 16(a) reports, all Section 16(a) filing requirements applicable to Pier 1 Imports’ executive officers, directors and greater than 10% beneficial owners during the last fiscal year2019 were met. | | | 20 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 20
COMPENSATION PROPOSAL NO. 2 – Advisory Approval of the Compensation of Pier 1 Imports’ Named Executive Officers A proposal to adopt anon-binding, advisory resolution to approve the compensation of Pier 1 Imports’ named executive officers as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission,SEC, including the Compensation Discussion and Analysis, compensation tables and narrative discussion under the caption “Compensation.” Under rules adopted by the SEC pursuant to Section 14A of the Exchange Act, our shareholders are entitled to vote not less frequently than every three years upon an advisory,non-binding resolution approving the compensation of Pier 1 Imports’ named executive officers (“NEOs”), as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, compensation tables and narrative discussion (commonly called the“say-on-pay “say-on-pay vote”). At our annual meeting of shareholders held on June 22, 2017, our shareholders indicated in an advisory vote that they overwhelmingly favored an annualsay-on-pay vote. In accordance with this vote, we intend to hold an annual say-on-pay vote until the next vote on say-on-pay frequency, which is scheduled to occur at the 2023 annual meeting of shareholders. Accordingly, we are soliciting anon-binding, advisory shareholder vote on Pier 1 Imports’ executive compensation as described in this proxy statement. Shareholders are being asked to vote on the following resolution: | | | | | | | RESOLVED, that the compensation of Pier 1 Imports’ named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion under the caption “Compensation,” is hereby APPROVED. | | |
The compensation of the NEOs is discussed and disclosed below in the Compensation Discussion and Analysis, compensation tables and narrative under the caption “Compensation.” As discussed in those disclosures, the board of directors and management believe that our compensation policies, principles, objectives and practices are focused on pay for performance and are strongly aligned with the long-term interests of our shareholders. Our compensation programs are designed to enable us to attract and retain talented and experienced senior executives to lead Pier 1 Imports successfully in a competitive environment. Your vote on this resolution is advisory, and therefore not binding on Pier 1 Imports, the compensation committee, or the board of directors. The vote will not be construed to create or imply any change to the fiduciary duties of the board of directors, or to create or imply any additional fiduciary duties for the board of directors. However, Pier 1 Imports’ board of directors values the opinions of shareholders, and, if the shareholders do not adopt the resolution set forth above, the compensation committee will consider shareholder concerns and evaluate whether any actions are necessary to address those concerns. The affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the annual meeting and entitled to vote on this resolution is required to approve this resolution. Abstentions will be counted as represented and entitled to vote on this resolution and will have the effect of a vote “Against” the resolution. Brokernon-votes will not be considered entitled to vote on this resolution and will not be counted in determining the number of shares necessary for approval of the resolution. | | | | | | | The board of directors unanimously recommends a vote “For” thenon-binding, advisory resolution to approve the compensation of Pier 1 Imports’ named executive officers as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission,SEC, including the Compensation Discussion and Analysis, compensation tables and narrative discussion under the caption “Compensation.” | | |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 21
Compensation Discussion and Analysis Executive Summary and Message from the Compensation Committee Fiscal 2019 was a challenging year for the company and business performance was disappointing. In April 2018, Pier 1 began to change its merchandise, marketing, and store presence designed to make the overall offering more relevant to changing customer wants and needs. While we believe that the objectives of this transformation were sound, the amount of simultaneous changes to the Company’s business model proved to exceed the Company’s executional capabilities. The acceleration of category promotion cadence and continued variation in customer shopping and buying patterns further compounded these executional shortfalls. As a result of these challenges, the Company took decisive action to narrow the strategic focus and improve execution, while at the same time strengthening the senior leadership team and making sure we retained key leaders essential to performance improvement and future success. Particularly with tightening labor markets and the transition the Company was undergoing, the attraction and retention of the top talent required to achieve the Company’s short- and long-term objectives was an important consideration. Our objectives were, and they remain, to keep our executive compensation programs highly performance oriented and geared to important executional milestones, differentiate compensation actions based on criticality to the business, and maintain affordability. To accomplish this, in fiscal 2019 the measurement period for our long-term incentive program was reduced, the goal setting process carefully focused on strategic plan objectives, and the mix of pay shifted to aid retention. We believe these compensation actions struck the best balance between short- and long-term and between performance orientation and retention. Nonetheless, Company results fell short of expectations which greatly impacted the compensation earned by named executive officers and leaders throughout the Pier 1 Imports business. There was no short-term incentive payout for fiscal 2019, making it the fifth fiscal year out of the last six in which there was zero payout. While the pay for performance design of our compensation programs was clearly in evidence in fiscal 2019, we are also working hard to upgrade and motivate the Pier 1 Imports organization to fully accomplish the Company’s transformation plan and business objectives. We believe these actions will translate into improved performance in the coming fiscal year and beyond and will continue to monitor closely how our compensation programs can best be utilized to incentivize organizational excellence. COMPENSATION COMMITTEE Michael A. Peel, Chair Claire H. Babrowski Katherine M. A. (“Allie”) Kline
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 22
Our Executive Team and Key Leadership Transitions We continued to experience significant transition in our leadership team for fiscal 2019 particularly as we shifted our strategic focus. | | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 21 |
| COMPENSATIONFiscal 2019 Leadership Transitions
Cheryl A. Bachelder was appointed Interim Chief Executive Officer on December 18, 2018, replacing Mr. James who stepped down as President and Chief Executive Officer. Donna N. Colaco was appointed Chief Customer Officer on December 3, 2018. This newly-created role was designed to bring together merchandising, product development, planning and allocations, stores, marketing and e-Commerce to continue to strengthen our customer-centric mindset across the Company. Robert E. Bostrom was appointed as Executive Vice President, Chief Legal and Compliance Officer and Corporate Secretary on January 23, 2019, replacing Michael A. Carter who retired from the Company in September 2018. Lance J. Wills was appointed Executive Vice President and Chief Information Officer on February 4, 2019, replacing Bhargav J. Shah who stepped down on November 30, 2018. Kelly N. Cook stepped down as Executive Vice President and Chief Marketing Officer on February 19, 2019. | |
Compensation Discussion and Analysis
Message from the Compensation Committee
Fiscal 2018 was the start of what we believe will be a significant transformation for the Pier 1 Imports business to grow our customer base with a highly relevant and differentiated brand, style and value proposition. To support this new vision, which we refer to as Pier 1 2021: A New Day, we hired new leadership in key positions, strengthened our focus on pay for performance, and repositioned our executive compensation philosophy and principles, which will lead to changes to our executive compensation programs for fiscal 2019. We have set significant and aspirational milestones for our business and tied executive compensation programs specifically to those milestones. We believe we are well-positioned for fiscal 2019 and the future.
A New Leadership Team
To accomplish the Pier 1 2021 vision, assembling abest-in-class leadership team is a top priority. In April 2017, the board recruited Alasdair James to become our president and chief executive officer effective May 1, 2017. Mr. James came to the position with deep industry expertise and a compelling vision for the future. His leadership has focused the organization and instilled renewed energy for the future.
Beyond the appointment of Mr. James, we welcomed other key leaders whose vast experiences will further drive our transformational business strategies.
| • | Kelly Cook, executive vice president, marketing and chief marketing officer, started with Pier 1 Imports in March 2018. Ms. Cook’s expertise will be critical in launching a new brand strategy to drivetop-line growth. |
| • | Nancy Walsh, executive vice president and chief financial officer, started with Pier 1 Imports in January 2018. Ms. Walsh’s significant retail experience will be invaluable to our profit improvement initiatives. |
| • | William Savage, executive vice president, sourcing, started with Pier 1 Imports in December 2017. Mr. Savage’s deep retail sourcing experience will accelerate our cost savings and inventory goals. |
| • | Bhargav Shah, senior vice president and chief information officer, started with Pier 1 Imports in August 2017. Mr. Shah’s broad-based technology, digital and supply chain expertise will fuel the growth of our IT and digital strategy. |
While there was substantial rebuilding of our leadership team in fiscal 2018, we believe the new team in place is a strong one that has the talent, expertise, drive and passion to deliver the results defined in our three-year strategic plan.
Our Commitment to Pay for Performance
Pier 1 Imports’ performance in fiscal 2018 did not meet our expectations for shareholder value creation, and as such, pay for our executives was impacted as follows:
| • | None of our current named executive officers received a base pay increase (only small increases were provided for our former chief financial officer and our interim chief financial officer) |
| • | No bonuses were paid to our named executive officers for fiscal 2018 performance |
| • | No vesting occurred for our fiscal 2016-2018 performance-based restricted stock and our other outstanding performance-based stock awards are currently not projected to vest |
While our pay programs are designed to be competitive with the market and our peers when targeted performance is achieved, our executives have actually earned significantly less than the compensation targets for their positions in recent years. This clear relationship between performance and pay reflects a compensation plan design that is highly results driven and closely aligned with shareholder interests. We believe we now have the transformational strategies and leadership team in place to deliver sustainable long-term value to our shareholders and, by doing so, the competitiveness of the actual compensation levels paid to company executives will be restored to targeted levels.
Repositioning our Executive Compensation Philosophy and Principles
As we begin the implementation of Pier 1 2021: A New Day with a talented new team in place, we determined that it was time for a thoughtful review of our compensation philosophy and principles. The alignment of pay and performance remains a cornerstone of our philosophy – married with the goals of high team engagement and retention – to bring the Pier 1 2021 vision to fruition.
| | | 22 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
Highlights of our Fiscal 2019 Executive Compensation Philosophy
| • | Decisive and differentiated action for specific leadership talent required to accomplish the plan |
| • | Performance tightly linked to the key execution milestones of the transformation |
| • | Goals balanced to reflect both individual accountability and team collaboration required to deliver results |
| • | Attention to short-term foundational requirements, while building to long-term sustainable performance |
| • | Consideration given to affordability over time |
| • | Aimed to ensure we build a high-performance company that delivers substantial value creation over time |
Highlights of our Fiscal 2019 Executive Compensation Programs
| • | Changed metrics for short- and long-term incentive plans to align more directly with the results and outcomes of our strategic transformation |
| • | Shifted mix slightly of our long-term incentive vehicles to increase retention value while still maintaining a strong connection to creating shareholder value |
| • | Developed a goal-setting process that maintains a high degree of rigor and challenge while reflecting the rapidly changing nature of both our business and the broader retail industry |
The compensation committee is committed to assessing our executive compensation programs on a regular basis. We strongly believe that in the near term, the above actions were necessary to drive performance, retention and motivation of our leadership team – all of which are essential to a successful transformation. As we monitor the execution of the business plan, the committee will regularlyre-evaluate its compensation approach and adjust as merited.
In conclusion, Pier 1 Imports is pursuing a bold transformation of the Company, requiring new strategy, a new set of metrics and outcomes and a leadership team that is energized, excited and focused. The actions we have taken as a compensation committee reflect these priorities while also continuing to drive a strongpay-for-performance orientation. We are convinced that these compensation plans will allow Pier 1 Imports to attract and retain the very best leadership to drive successful results for both the Company and its shareholders and is the foundation for our support of the board’s recommendation to vote “YES” onsay-on-pay (Proposal No. 2).
COMPENSATION COMMITTEE
Cheryl A. Bachelder, Chair
Claire H. Babrowski
Michael A. Peel
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 23 |
Introduction
At Pier 1 Imports, our ability to successfully attract, motivate and retain a qualified executive management team in a challenging and highly competitive retail environment is essential to our success. It is important that we offer competitive compensation that is structured to promote the long-term success and performance of our Company, is in the best interest of our shareholders, and delivers value to our executives. With this in mind, we set out to ensure our fiscal year 2018 executive compensation programs met the following objectives and philosophy:
In fiscal 2018, we had significant transition in leadership as we built a strong executive team that would be well positioned to lead us through a successful transformation. This Compensation Discussion and Analysis describes the compensation of our named executive officers listed in the table below for fiscal 2018:2019, and includes our executive officers who served as chief executive officer during the fiscal year, our former chief financial officer, and our three other most highly compensated executive officers serving at the end of the fiscal year, as well as Kelly Cook, a former executive officer who would have been among the most highly compensated executive officers had she been serving as of the fiscal year end.
| | | | | NAMED EXECUTIVE OFFICERS | POSITION | POSITION
| | DATES IN ROLE | Alasdair B. James
| | | Cheryl A. Bachelder | President andInterim Chief Executive Officer
| | Appointed May 1, 2017 | Nancy A. Walsh
| | Executive Vice President and Chief Financial Officer
| | Appointed January 25,December 18, 2018
| Michael R. Benkel Nancy A. Walsh (1)
| | Executive Vice President, Global Supply Chain
| | Appointed July 26, 2015
| Bhargav J. Shah
| | Senior Vice President and Chief Information Officer
| | Appointed August 7, 2017
| Terry E. London
| | Former Interim President and Chief Executive Officer
| | Served January 1, 2017 – April 30, 2017
| Darla D. Ramirez
| | Former Interim Chief Financial Officer
| | Served October 4, 2017 – January 24, 2018
| Jeffrey N. Boyer
| | Former Executive Vice President and Chief Financial Officer | | Served July 27, 2015January 25, 2018 – October 3, 2017April 17, 2019 | Catherine David William H. Savage
| Executive Vice President, Global Supply Chain | Appointed December 7, 2017 | Mark R. Haley | Executive Vice President, Store Sales & Operations | Appointed June 26, 2018 | Robert E. Bostrom | Executive Vice President, Chief Legal and Compliance
Officer and Corporate Secretary | Appointed January 23, 2019 | Alasdair B. James | Former President and Chief Executive Officer | Served May 1, 2017 – December 18, 2018 | Kelly N. Cook | Former Executive Vice President Merchandisingand Chief Marketing Officer | | Served August 3, 2009March 19, 2018 – May 1, 2018 February 19, 2019 |
| | | | | | (1) | Fiscal 2018 Leadership Transitions
On May 1, 2017, Mr. James joined Pier 1 Imports as president and chief executive officer, replacing Mr. London who had been serving as the interim president and chief executive officer and executive chairman between January 1, 2017 and April 30, 2017. Mr. London continued to serve as executive chairman through July 31, 2017, after which Mr. London returned to his former role asnon-executive chairman.
On January 25, 2018, Ms. Walsh joined Pier 1 Imports as executive vice presidentdeparted from the Company effective April 17, 2019 and chief financial officer, replacing Ms. Ramirezwas succeeded by Deborah Rieger-Paganis, who had beenis serving as the interim chief financial officer since the departureofficer. Ms. Rieger-Paganis is employed as a managing director of the formerAlixPartners, LLP, a global consulting firm, and will continue in that capacity while serving as interim chief financial officer, Mr. Boyer, in October 2017. Ms.officer. Darla D. Ramirez, continued in her role as the Company’s principal accounting officer, andwas appointed to succeed Ms. Walsh as vice president – controller of Pier 1 Imports’ operating subsidiaries subsequent to Ms. Walsh’s hire.interim principal financial officer.
| | |
Fiscal 2018 Business Performance
Fiscal 2018 was a challenging yearAdditionally, we have included disclosure within this Compensation Discussion and was marked by inconsistent financial performanceAnalysis for Donna N. Colaco due to the fact that Ms. Colaco is a combinationkey member of factors, including aour leadership team and her compensation was similar to our other most highly promotional competitive environment, a lack of freshness in our assortments and a value equation that did not compel customers to buy.
Fiscal 2018 financial results include:
● Net sales decreased 1.6% to $1.8 billion.
● Company comparable sales on a52-week basis decreased 2.0%.
● E-Commerce sales exceeded $450 million, with sales penetration reaching approximately 26%, up from approximately 20%compensated executive officers in fiscal 2017.2019.
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 23
| | | 24 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
●Fiscal 2019 Business Performance Selling, general and administrative expenses were $576.9 million, or 32.1% of net sales, compared to $587.8 million, or 32.1% of net sales, during
In fiscal 2017, reflecting ongoing cost control measures. ● Net income was $11.6 million, or $0.14 per share. Adjusted net income(non-GAAP) was $16.8 million, or $0.21 per share.(1)
● Positive cash flow from operations of $66 million.
● Cash and cash equivalents atyear-end of $135 million.
● Inventories at the end of fiscal 2018 decreased 13.4% to $347.4 million, compared to $401.0 million at the end of fiscal 2017.
● A total of 15 net stores closed in fiscal 2018 as part of the real estate optimization initiative announced in fiscal 2016.
(1) | | This proxy statement references adjusted net income and adjusted earnings per share, which exclude the impact of legal and regulatory costs related to Californiawage-and-hour litigation and an ongoing Consumer Product Safety Commission inquiry and the related tax impact.2019, Pier 1 Imports believesthese non-GAAP financial measures are useful in comparing its year-over-year operating performance. Adjusted net income and adjusted earnings per share should be considered supplemental and not a substitute for Pier 1 Imports’ net income and earnings per share results reported in accordance with GAAP for the periods presented. See page 27 of the Pier 1 Imports Annual Report onForm 10-K for the fiscal year ended March 3, 2018, as filed with the SEC on May 1, 2018 for a reconciliation of these amounts. |
We recently embarked on a new three-year strategic plan Pier 1 2021: A New Day, designed to improve the Company’s brand proposition, capture operating efficiencies and drive sales growthgrowth. Execution issues related to product and capturemarketing resulted in disappointing financial performance, particularly during the second half of the year. Our results include:
Company comparable sales decreased 11% compared to fiscal 2018; Net sales decreased 13.7% to $1.6 billion compared to fiscal 2018; Net loss of $198.8 million, or ($2.46) per share; Inventory of $347.6 million, flat to fiscal 2018 year end; and Cash and cash equivalents of $54.9 million at year end, $50 million of borrowings under the Company’s FILO tranche and an undrawn revolver facility. Pier 1 Imports has developed an action plan to reset its operating efficiencies. While we are moving quickly to facilitate change, ourmodel and rebuild the business for the future. Our fiscal 20182019 results did not meet the threshold performance needed to deliver payouts (asas shown in the charts below).below. Therefore, highlighting a strong commitment to ourpay-for-performance philosophy, our named executive officers did not receive payouts under the short-term incentive plan awardsprogram and no vesting occurred for our fiscal 2016-20182017-2019 performance-based restricted stock awards. In addition, no performance-based restricted shares were earned under the first fiscal year of our 2019-2021 performance
cycle based on the Earnings Per Share as adjusted measure.FISCAL 20182019 PERFORMANCE SHORT-TERM INCENTIVE  
| | | PROFIT GOAL
Dollars in Millions
| | MERCHANDISE MARGIN
Dollars in Millions
|  | |  |
LONG-TERM INCENTIVE | | | 3-YEAR PROFIT GOAL
Dollars in Millions
| | RELATIVE3-YEAR TOTAL SHAREHOLDER
RETURN PERFORMANCE
|   
* Earnings per share of ($2.46) was not adjusted due to the difference between the target and actual performance for this metric. No threshold was established for fiscal 2019. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 24
| | 
|
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 25 |
Under Pier 1 2021: A New Day, the Company will be focused on:
Fiscal 2019 Compe● Improving brandproposition by segmenting the marketplacensation Actions and focusing on targeted consumer groups, refining merchandise assortments, delivering value, ensuring that Pier 1 fits her style and creating ease of shopping; ● Driving sales growth through new marketing strategies around content, digital communications and customer experience, reimagining the shopping experience and leveraging and strengthening the Company’s omni-channel platform; and
● Capturing operating efficiencies through initiatives across pricing and promotion, inventory reduction, sourcing and supply chain.
We remain fully committed to apay-for-performance culture. Our leadership is equally committed to transforming the business through the successful execution of Pier 1 2021: A New Day to create value for our shareholders.Decisions
In view of the challenges facing our business, we articulated the factors impacting pay and made compensation decisions accordingly. This relationship is outlined below: | | | 26Our Principles | •Take decisive and differentiated action for specific leadership talent required to accomplish our strategic plan •Tightly link performance with the key execution milestones of our business strategy •Focus attention on short-term foundational requirements, while building to long-term sustainable performance •Consider affordability over time | Factors that Guided Our Decisions | •PIERFinancial performance of the Company that was below expectations •Our pay-for-performance philosophy and objectives •Need for a strong leadership team to drive our business transformation •Market pay practices of our peer group and broader competitors for leadership talent •The dynamic and challenging retail environment | Key Fiscal 2019 Compensation Decisions | Short-Term Incentives •Fiscal 2019 short-term incentive performance targets for profit and revenue were not met; therefore, no named executive officers received a short-term incentive award payout. Long-Term Incentives •No vesting occurred for our fiscal 2017-2019 performance-based restricted stock awards based on the Profit Goal and ROIC performance measures. •No performance-based restricted shares were earned under the first fiscal year of our 2019-2021 performance cycle based on the earnings per share as adjusted measure. •Named executive officers employed before June 29, 2018, with the exception of Mr. Savage, received the following grants of performance-based restricted stock and time-based restricted stock. oApproximately 50% of the restricted stock granted for fiscal 2019 was performance-based, vesting based on the achievement of Earnings Per Share as adjusted. oApproximately 50% of the restricted stock granted for fiscal 2019 was time-based, vesting in substantially equal amounts on each of the first three anniversaries of the grant date. •In lieu of the annual long-term performance-based incentive award and per his offer letter, Mr. Savage received a one-time performance-based restricted stock award based on attaining significant cost savings in sourcing expenses over a three-year period. •In lieu of the annual long-term time-based incentive award and per her offer letter, Ms. Cook received a one-time long-term incentive award vesting in substantially equal installments over a three-year period. •Mr. Bostrom and Ms. Colaco, who were hired after June 29, 2018, received a time-based restricted stock award in connection with their employment; they will be eligible for and participate in the fiscal 2020 long-term incentive program similar to the other executives. •Ms. Bachelder was provided a time-based restricted stock award upon her appointment as interim chief executive officer. •Named executive officers who separated from the Company during fiscal 2019 forfeited all unvested performance-based and time-based long-term incentive awards except for a limited number of shares of time-based restricted stock that were vested in connection with Mr. James’ separation. Select One-Time Cash Retention Awards •Due to the significant leadership transition and continued uncertainty within our business, we believed it was critical to take action to secure the commitment of our leadership team. •To that end, we provided select one-time cash retention awards to Ms. Walsh, Mr. Haley, Mr. Savage and Ms. Cook between December 2018 and January 2019. oThe awards for Ms. Walsh, Mr. Savage and Mr. Haley are subject to a pro-rata clawback in the event the executive leaves Pier 1 IMPORTS, INC.Imports other than for good reason or is terminated for cause as set forth in the respective agreement. o | 2018 Proxy StatementThe award provided to Ms. Cook will be paid in December 2019. New-Hire Cash Awards •Mr. Bostrom, Ms. Colaco and Ms. Cook received one-time cash awards in connection with their employment, subject to a pro-rata clawback as set forth in the respective agreements. |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 25
CEO Pay at a Glance Mr. James served as President and Chief Executive SummaryOfficer from May 1, 2017 until December 18, 2018. | | | | | | | | | | | | | | | | | | | | Factors That Guided Our Decisions | | | | ● Financial performance of the Company that was below expectations ● Executive compensation philosophy and objectives ● Need for a strong leadership team to drive our business transformation ● Market pay practices of our peer group and broader competitors for leadership talent ● The dynamic and challenging retail environment | | Key Fiscal 2018 Compensation Decisions | | | | The compensation decisions outlined below demonstrate our strong, sustained commitment to paying for performance. New Named Executive Officer Pay Packages Filling key executive positions in fiscal 2018 was a top priority. The compensation committee designed pay packages that are competitive within the retail industry and our peer group in order to attract and retain key talent to lead the development and execution of Pier 1 2021: A New Day. | | | | | | | | | | | | | | | Alasdair B. James President and CEO | | Nancy A. Walsh CFO | | Bhargav J. Shah CIO | | | | | Starting Salary | | | | $1,000,000 | | | | | $575,000 | | | | | $425,000 | | | | | | Signing Bonus | | | | $300,000(1) | | | | | $200,000(2) | | | | | $150,000 | (3) | | | | | New-Hire Grants | | |
| $1,000,000 (stock options) $500,000 (time-based
restricted stock) |
| | |
| $750,000 (time-based
restricted stock) |
| | | | | | | | | | Long-Term Incentive Grant (Time-Based Restricted Stock) | | | | $500,000 | | | | | | | | | | $170,000 | | | | | | Long-Term Incentive Grant (Performance-Based Restricted Stock) | | | | $1,500,000 | | | | | | | | | | $255,000 | | | | | | (1) Subject to a clawback if he left the Company or was terminated for cause within 12 months of his May 1, 2017 hire date. (2) Subject to a pro rata clawback in the event she leaves the Company or is terminated for cause within 12 months of her January 25, 2018 hire date. (3) Payment to offset forfeited short-term incentive opportunity related to his transition. | | | | | | Short-Term Incentive ● All named executive officers were eligible to receive short-term incentive awards in fiscal 2018, except for Ms. Walsh, due to her hire date, and Mr. London, who did not participate. ● Fiscal 2018 short-term incentive performance targets for Profit Goal and merchandise margin dollars were not met, therefore no named executive officers received a short-term incentive award payout. Long-Term Incentives ● Named executive officers employed before April 14, 2017 received the following grants of performance-based restricted stock and time-based restricted shares. ¡ Approximately 60% of the shares granted for fiscal 2018 were performance-based, with half vesting based on achievement of a cumulative three-year Profit Goal (Profit Goal performance-based shares) and the other half vesting based on three-year average ROIC (ROIC performance-based shares). ¡ Approximately 40% of the shares granted for fiscal 2018 were time-based, vesting in substantially equal amounts on each of the first three anniversaries of the grant date. ● The awards are subject to an increase or decrease of 10% based on a TSR modifier. ● Named executive officers hired after April 14, 2017 received the grants set forth in the table above. ● No vesting occurred for our fiscal 2016-2018 performance-based restricted stock awards based on the Profit Goal and TSR performance measures. | |
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 27 |
| | | Fiscal Year 2019
Program Updates
| | To support a key objective of our executiveMr. James’ target total direct compensation plan — attracting, motivating(base salary, target short-term incentive grant and retaining a highly qualified and effective executive team — and reflect the unique and transformational priorities for our business, we are updating features of ourtarget long-term incentive plansgrants) for fiscal 2019 as follows:
● Changing the metricswas generally aligned with our broader executive compensation program and philosophy and a significant portion of Mr. James’ total direct compensation was “at-risk.” Illustrated in the short-table below, the majority of outstanding equity awards and long-term incentive plans to align more directly with the results and outcomes of our strategic plan
● Changing the mix of our long-term incentive vehicles to increase the retention value while still maintaining a strong connection to creating shareholder value
● Developing a goal setting process that maintains a high degree of rigor and challenge while reflecting the uncertain nature of both our business and the broader retail industry
As we monitor the execution of the business plan, the committee will regularlyre-evaluate the compensation approach and adjust as merited.
|
Chief Executive Officer PayAt-A-Glance
Mr. James’ target total direct compensation (base salary, target short-term incentive and target long-term incentive grants) for fiscal 2018 was determined when he was hired in May 2017. A significant portion of Mr. James’ total direct compensation is“at-risk.” Hisnew-hire grants included a substantial stock option award that provides a direct link between his future compensation and the value he creates for shareholders, and 75% of his annual long-term incentive award is performance based. To the extent stock price increases and target performance measures are not achieved, or they are exceeded, our chief executive officer’s resulting compensation will be below or above the target total compensation, supporting ourpay-for-performance philosophy.
CHIEF EXECUTIVE OFFICER FISCAL 2018 COMPENSATION MIX
MR. JAMES’ LONG-TERM INCENTIVE PAY “AT RISK”
| | | | | | | | | TARGET OR FAIR MARKET VALUE AT GRANT
| | | RISK METRIC
| Annual Awards
| | | | | | | Performance-Based
Restricted Stock
| | performance-based cash awards were forfeited upon Mr. James’ separation. | |
CHIEF EXECUTIVE OFFICER TARGET VERSUS REALIZED COMPENSATION | TARGET VALUE AT GRANT | VALUE REALIZED | Base Salary | $1,000,000 | $815,385 | | | | Short-Term Incentive | $1,250,000 | $ 0 | | | | Annual Awards in Fiscal Year 2019 | | | Performance-Based Restricted Stock | $ 687,500 | $ 0 | Time-Based Restricted Stock | $ 687,500 | $ 0 | Performance-Based Long-Term Cash | $1,000,000 | $ 0 | | | | Annual Awards in Fiscal Year 2018 | | | Performance-Based Restricted Stock | $1,500,000 | $ 0 | Time-Based Restricted Stock | $ 500,000 | $ 57,677 | | | | Awards Related to Mr. James’ Hire in Fiscal Year 2018 | | | Stock Options | $1,000,000 | $ 0 | Time-Based Restricted Stock | $ 500,000 | $ 72,349 (1) |
$1,500,000(1)
| | | 50% Profit Goal —three-year cliff vest
50% ROIC — three-year cliff vest
Represents 71,633 shares of time-vested restricted stock that were vested in connection with Mr. James’ separation, valued at the closing share price of $1.01 on December 18, 2018. | |
Time-Based Restricted Stock
| | | $500,000
| | | vest 33% year 1; 33% year 2;
34% year 3
| Awards Related to Mr. James’ Hire
| | | | | | | Stock Options
| | | $1,000,000
| | | vest 25% year 3; 25% year 4; 50%
year 5
| Time-Based Restricted Stock
| | | $500,000 | | | three-year cliff vest
|
| | | 28 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
Interim CEO Pay During Mr. London’s servicesMs. Bachelder’s service as interim president and chief executive officer, he receivedshe will receive a base salary of $1.25 million but no short- or long-termwill not be eligible to receive a short-term incentive awards. When he returned to his role as chairman, he receivedaward. Ms. Bachelder was provided a grant of 142,857 shares of time-based restricted stock award of 729,927 shares, vesting in recognition for his past service as chairmansubstantially equal installments over a three-year period, which was valued at $1.0 million based on the thirty-day trailing average of the board,Company’s common stock as of December 18, 2018, the date of her appointment as interim chief executive officer. Due to the difference in the stock price between the time the award was determined and in order to provide an incentive for his continued service as chairmanthe actual grant date, the fair value of the board. See page 36 for further detailsaward on the LTI grant.grant date was $226,277. Ms. Bachelder will forgo her cash directors’ retainers during her period of dual service. Aligning Pay with Performance The importance of executiveHaving a committed leadership cannot be overstatedteam in today’splace is critical to our future success in this challenging business and the highly competitive retail industry. Our executives must be incentivized to stay with the Company and motivated to execute as a team to achieve our strategic transformation in the short term, which we believe will lead to positive long-term results and value creation for our shareholders.
To accomplish this focus,these results, we provide both short-short-term and long-term incentives to our executives to encourage the effective management of major functions, teamwork, and strategy development and execution, which we believe will contribute to increased shareholder value. Therefore, the majority of named executive officer compensation is“at-risk” “at-risk” and tied to Pier 1 Imports’ performance. We continue to set rigorous performance, targets based on profitability as well as other financial return metrics inwith the near term while considering Pier 1 Imports’ performance compared to its peers.
Rewarding results linked to short- and long-term Company performance (pay for performance) is one of the four principles that comprise our executive compensation philosophy. To ensure that we are adhering to this principle, we evaluate the degree of alignmentexception of our incentive compensation to our business results, which are reflected in our performance metrics. The three performance metrics used in ourinterim chief executive compensation program for fiscal 2018 align with our strategy for long-term value creation and included the following:officer.
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 26
Profit Goal Earnings before interest, taxes, depreciation and amortization, and which may be adjusted for certain recurringnon-cash items and unusual ornon-recurring items each as determined by the compensation committee Merchandise Margin Dollars Gross Profit plus delivery and fulfillment net costs and store occupancy costs Return on Invested Capital (ROIC) Calculated by dividing the Company’s operating income for any particular fiscal year, less taxes, by the sum of (i) the average of the beginning and ending fiscal year inventory balances, plus (ii) the average of the beginning and ending fiscal year net fixed asset balances, less (iii) the average of the beginning and ending fiscal year accounts payable balances
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 29 |
BothSpecifically for fiscal 2019, our goal was to focus our executive team on clear and simple metrics aligned with critical measures of success for our transformation. To this end, we changed the measures in both our short-term and long-term incentive plans focusing on Operating Cash EBITDA, Net Sales, and Earnings Per Share as adjusted for fiscal 2019. Long-term incentive awards granted in fiscal 2017 that were eligible to vest in fiscal 2019 were based on Profit Goal and the ROIC performance-based shares granted in fiscal 2018 are subject to an increase or decrease of 10% as shown in the table below based on Pier 1 Imports’ Total Shareholder Return percentile rank within a peer group comprised of all of the companies in the Russell 1000 Specialty Retail Index as of the beginning of fiscal 2018 plus any other specialty retailers in Pier 1 Imports’ fiscal 2018 peer group.metrics.
| | | COMPANY’S PERCENTILE
RANK WITHIN PEER GROUPFISCAL 2019 PERFORMANCE METRICS
| Operating Cash EBITDA | MODIFICATION OF VESTED SHARESThe Company’s fiscal 2019 consolidated operating cash earnings before interest, taxes, depreciation and amortization from all domestic and international operations, but not including discontinued operations, unusual or non-recurring charges nor recurring non-cash items.
| Net Sales | The Company’s fiscal 2019 net sales. | Earnings Per Share as adjusted | The achievement of targeted Earnings Per Share as adjusted for specified significant unusual or non-recurring or recurring non-cash items or events as provided in the 2015 Plan for a given fiscal year period, with such adjustments to be determined by the compensation committee. | 75th% and above
| | + 10%*FISCAL 2017 – FISCAL 2019 LONG-TERM INCENTIVE PERFORMANCE METRICS
| above 25th% and below 75th%
| | no modification
| 25th% and below
| | -10%
|
* | | Provided Pier 1 Imports’ absolute TSR is not negative |
The structure of our program ensures that as an executive’s scope of responsibility increases, a greater portion of that executive’s compensation will come from performance-based pay. For fiscal 2018, our compensation program was designed based on the following objectives and metrics:
| | | | | | | | | SHORT-TERM INCENTIVE
| | LONG-TERM INCENTIVE
| | LONG-TERM INCENTIVE
| Type of Award
| | Annual Award
| | Performance-Based Restricted Stock (60% of award)
| | Time-Based Restricted Stock (40% of award)
| Form
| | Cash
| | Equity
| | Equity
| Objective
| | Reward achievement of short-term corporate performance goals
| | ● Reward long-term financial results that drive shareholder value creation
● Reinforce ownership in the Company
| | ● Reward long-term shareholder value creation
● Reinforce ownership in the Company
● Support retention of executives
| Time Horizon
| | 1 year
| | 3 years
| | 3 years
| Metrics
| | 80% Profit Goal
20% merchandise margin dollars
| | 50% Profit Goal
50% ROIC
Stock Price
Profit Goal and ROIC long-term incentive awards are subject to a +/- 10% modifier for Total Shareholder Return above the 75th percentile or below the 25th percentile compared to the peer group
| | Stock Price
Continued Employment
|
Compensation Factors and Governance for Fiscal 2018
The compensation committee evaluates many factors when designing executive compensation plans and targets. The following table outlines our key practices:
| | | WHAT WE DO
| | WHAT WE DON’T DO
| ✓Set aggressive short- and long-term performance metrics and have a majority of targeted pay for executives tied to performance
✓Use long-term incentives to encourage management retention
✓Tie a significant portion of executives’ pay to performance metrics critical to the business
✓Mitigate undue risk by using a cap on maximum payouts for short- and long-term plans and performing an annual internal risk assessment of compensation programs
✓Have stock ownership guidelines that reinforce alignment between shareholders and our executive officers
✓Maintain a clawback policy
✓Have an independent compensation consultant reporting directly to the compensation committee
| | Ò Have employment agreements
Ò Applyacross-the-board base salary increases
Ò Have taxgross-ups upon change in control
Ò Automatically vest equity awards under stock incentive plans upon a change in control
Ò Allow hedging, short sales, option trading or pledging of Pier 1 Imports common stock
Ò Pay dividends on unvested restricted stock or above-market earnings on deferred compensation arrangements
Ò Reprice underwater stock options
|
| | | 30 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
Role of the Compensation Committee
The compensation committee determines the appropriate level of compensation for all executive officers, including the chief executive officer.
Role of the Independent Executive Compensation Consultant
Willis Towers Watson, the compensation committee’s independent executive compensation consultant, provided consulting advice regarding executive compensation in fiscal year 2018, as well as data from the Willis Towers Watson Compensation Data Bank Retail/Wholesale Services Executive Database and public sources such as proxy filings. These resources ensure that we maintain competitive compensation practices compared to our peers and the broader retail industry.
During fiscal 2018, Willis Towers Watson did not provide any other services to Pier 1 Imports other than executive compensation consulting.
Shareholder Input on Executive Compensation
In evaluating the design of our executive compensation programs and the specific compensation decisions for each of our named executive officers, the compensation committee considers shareholder input, including the advisory“say-on-pay” vote at our annual meeting.
In 2017, approximately 97% of the votes cast approved the compensation for our named executive officers.
Shareholder Engagement
Our board of directors and our compensation committee value the opinions of our shareholders. In fiscal 2018, we continued with the compensation foundation developed in fiscal 2017 which reflected shareholder feedback, sound corporate governance and continued alignment of pay with performance. To that end, we:
| ● | | Continued focus on performance-based long-term equity with three-year cliff vesting |
| ● | | Continued to apply a comprehensive target-setting process to ensure rigorous performance goals are established for both our short- and long-term plans |
| ● | | Continued to evaluate executive salaries on acase-by-case basis rather than utilizingacross-the-board increases |
| ● | | Continued to include analysis of external data in the setting of our named executive officers’ compensation |
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 31 |
Peer Group Used for Comparison
The fiscal 2018 peer group included the following companies, which at the time of selection were publicly traded and were direct competitors, retail industry competitors and/or local area competitors for executive talent:
| | | | | Bed Bath & Beyond Inc.
Chico’s FAS Inc.
DSW, Inc.
Finish Line, Inc.
Fossil Group, Inc.
| | Haverty Furniture Companies, Inc.
Kirkland’s, Inc.
Restoration Hardware Holdings, Inc.
Select Comfort Corp.
Stage Stores, Inc.
| | Stein Mart, Inc.
The Container Store Group, Inc.
Ulta Salon, Cosmetics & Fragrance, Inc.
Williams Sonoma, Inc.
|
These companies were selected by the compensation committee, with the advice of its independent executive compensation consultant, because their revenues and/or operating characteristics are comparable to those of Pier 1 Imports.
Total Compensation Target
We generally target total compensation packages for executive officers to reflect the 50th percentile of Pier 1 Imports’ peer group when planned financial and operational goals are achieved. We design our total compensation packages to provide pay above or below the 50th percentile compared to our peer group when results exceed or do not meet planned financial and operational goals.
In some cases, the compensation required to attract new executives may result in compensation packages exceeding the 50th percentile due to the intense competition for talent in the retail sector.
Elements of the Executive Compensation Program
The following chart highlights key elements of our executive compensation program and how each is linked to the objectives of our executive compensation philosophy.
| | | | | | | | | OBJECTIVE
| | TYPE OF
COMPENSATION
| | KEY FEATURES
| Base Salary
| | To provide competitive fixed pay that is tied to the market and allows us to attract, retain and motivate executives within the national retail and broader market
| | Cash
| | Based on individual skills, experience, responsibilities and performance over time
| Short-Term Incentive
| | To encourage focus on business performance
| | Cash
| | •Rewards achievement of short-term corporate performance goals
•Pays only if threshold performance levels or above are met
| Long-Term
Incentives
Performance-Based Restricted Stock
| | To increase multi-year profitability and stock price and to demonstrate effective use of Pier 1 Imports’ capital
| | Long-Term Equity
| | •Rewards achievement of long-term corporate performance goals
•Vests only if threshold performance levels or above are met
•Links value to stock price
| Long-Term
Incentives
Time-Based
Restricted Stock
| | To closely align executive and shareholder interests and aid in retention
| | Long-Term Equity
| | •Promotes retention and enhances executive stock ownership
•Links value to stock price
| Executive Agreements
| | To ensure named executive officers remain focused on creating sustainable performance
| | Benefit
| | Protects the Company and the named executive officers from certain termination events by providing economic stability
| Other Benefits
| | To aid in attracting and retaining executive talent
| | Benefit
| | Includes:
•Non-qualified deferred compensation plan
•Employee Stock Purchase Plan
•Broad-based benefits available to all employees
|
| | | 32 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
Analysis of Fiscal 2018 Compensation
Base Salary
Base salaries for the named executive officers reflect the individual’s skills, experience, responsibilities and performance over time. The compensation committee determines the base salary, and any increases, for named executive officers using external surveys of salary practices for positions with similar levels of responsibility within our peer group as well as the broader industry and taking into account the performance of the individual and the Company.
The compensation committee reviews base salaries for our named executive officers annually but does not uniformly raise base salaries each year.
In fiscal 2018, none of our NEOs received a base salary increase with the exception of Mr. Boyer who received a 5% increase prior to his departure; and Ms. Ramirez, who received a base salary increase of 13% that was partially merit-based and partially in connection with her interim role.
| | | | | | | | | | | | | | | | | | | | NAMED EXECUTIVE OFFICER | | ANNUALIZED FISCAL
2017 BASE SALARY | | ANNUALIZED FISCAL
2018 BASE SALARY | | PERCENT INCREASE | | | | | Alasdair B. James | | | | N/A | | | $1,000,000 | | | | N/A | | | | | | Nancy A. Walsh | | | | N/A | | | $ 575,000 | | | | N/A | | | | | | Bhargav J. Shah | | | | N/A | | | $ 425,000 | | | | N/A | | | | | | Michael R. Benkel | | | | $360,000 | | | $ 360,000 | | | | 0% | | | | | | Terry E. London(Former Interim President and Chief Executive Officer,
January 1, 2017 through April 30, 2017) | | | | $875,000 | | | $ 875,000 | | | | 0% | | | | | | Darla D. Ramirez(Former Interim Chief Financial Officer, October 4,
2017 through January 24, 2018) | | | | $221,000 | | | $ 250,000 | | | | 13% | | | | | | Jeffrey N. Boyer(Former Executive Vice President and Chief Financial
Officer, resigned October 3, 2017) | | | | $500,000 | | | $ 525,000 | | | | 5% | | | | | | Catherine David(Former Executive Vice President, Merchandising,
resigned May 1, 2018) | | | | $450,000 | | | $ 450,000 | | | | 0% | |
Short-Term Incentives
No Bonus Payouts for Fiscal Year 2018
Our aggressive target levels of performance for fiscal 2018 were not achieved; therefore, no named executive officer received an award payout.
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 33 |
Our short-term incentive program is designed to reward our executives for overall Company financial performance over the fiscal year. Eighty percent of the incentive was based upon achievement of the Profit Goal and 20% was based upon achievement of merchandise margin dollars.
Merchandise Margin Dollars
Aligns product assortments with Pier 1 Imports’ customers’ tastes to provide a strong value proposition, and promotes increased efficiencies within Pier 1 Imports’ supply chain.
| A measureThe Company’s consolidated operating cash earnings before interest, taxes, depreciation and amortization from all domestic and international operations, but not including discontinued operations, adjusted for certain recurring non-cash items and unusual or non-recurring items as determined by the compensation committee, measured from the beginning of Pier fiscal year 2017 through the end of fiscal year 2019.
| ROIC | Calculated by dividing the Company’s operating income for any particular fiscal year, less taxes, by the sum of (i) the average of the beginning and ending fiscal year inventory balances; plus (ii) the average of the beginning and ending fiscal year net fixed asset balances, less (iii) the average of the beginning and ending fiscal year accounts payable balances. |
The structure of our program ensures that as an executive’s scope of responsibility increases, a greater portion of that executive’s compensation will come from performance-based pay. For fiscal 2019, the performance-based components of our compensation program were designed with the following objectives and framework: | | | | SHORT-TERM INCENTIVE | LONG-TERM INCENTIVE | Objective | •Reward achievement of short-term corporate performance goals | •Reward long-term financial results and drive shareholder value creation •Reinforce ownership in the Company •Support retention of executives | Type of Award | Annual Award | Performance-Based Restricted Stock
comprises 50% of the award Time-Based Restricted Stock comprises
50% of the award | Form | Cash | Equity | Time Horizon | 1 Imports’ financialyear | 3 years | Metrics | Operating Cash EBITDA, weighted 50% Net Sales, weighted 50% | Earnings Per Share as adjusted Stock price Continued employment | Material Changes from Fiscal 2018 |
Changed metric to replace Merchandise Margin dollars with Net Sales to focus on top-line growth; weighted Operating Cash EBITDA and operational performance designedNet Sales equally
|
Shifted mix slightly of our long-term incentive vehicles to rewardincrease retention value while still maintaining a strong connection to creating shareholder value
| | Changed metric from Operating Cash EBITDA and ROIC to Earnings Per Share as adjusted to focus executives on a key transformation metric | | Earnings Per Share as adjusted will be measured for high levelseach of operating performance, which will leadthe three fiscal years in the period due to increased profitability over time. This goal focuses on factors that an individual participant’s actions can affect because it largely eliminates the effectslevel of financinguncertainty during the transformation, with the opportunity to “bank” shares earned each fiscal year; each fiscal year was weighted at one-third and tax decisions as well as unusual charges.only a target level was set for fiscal 2019
|
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 27
Shareholder Input on Executive Compensation In evaluating the design of our executive compensation programs and the specific compensation decisions for each of our named executive officers, the compensation committee considers shareholder input, including the advisory “say-on-pay” vote at our annual meeting. In 2018, approximately 91% of the votes cast approved the compensation for our named executive officers. Shareholder Engagement Our board of directors and our compensation committee value the opinions of our shareholders. In fiscal 2019, we made changes to our principles and programs that continue to support the foundations we have used historically and those which reflect shareholder feedback, sound corporate governance and a balance of retention with continued alignment of pay with performance. To that end, we continued to: Focus on performance-based long-term equity with three-year cliff vesting Apply a comprehensive target-setting process to ensure rigorous performance goals are established for both our short- and long-term plans Evaluate executive salaries on a case-by-case basis rather than utilizing across-the-board increases Analyze external data when setting our named executive officers’ compensation Further, we believe the changes we made to our programs are well aligned to important metrics and results that are critical for our shareholders and for our strategic transformation. Peer Group Used for Comparison The fiscal 2019 peer group included the following companies, which at the time of selection were publicly traded and were direct competitors, retail industry competitors and/or local area competitors for executive talent: Bed Bath & Beyond Inc. Chico’s FAS, Inc. Designer Brands Inc. Fossil Group, Inc. Haverty Furniture Companies, Inc. | Kirkland’s, Inc. RH Sleep Number Corporation Stage Stores, Inc. Stein Mart, Inc. | The Container Store Group, Inc. The Michaels Companies, Inc. Ulta Beauty, Inc. Williams-Sonoma, Inc. |
These companies were selected by the compensation committee, with the advice of its independent executive compensation consultant, because their revenues and/or operating characteristics are comparable to those of Pier 1 Imports. Total Compensation Target We generally target total compensation packages for executive officers to reflect the 50th percentile of Pier 1 Imports’ peer group when planned financial and operational goals are achieved. We design our total compensation packages to provide pay above or below the 50th percentile compared to our peer group when results exceed or do not meet planned financial and operational goals. Given our recent performance, pay realized by executives has been below the market 50th percentile and a significant rebound of our stock price as well as improved performance would be required for executives to realize this positioning. In some cases, the compensation required to attract new executives may result in compensation packages exceeding the 50th percentile due to the intense competition for talent in the retail sector. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 28
Elements of the Executive Compensation Program The following chart highlights key elements of our executive compensation program and how each is linked to the objectives of our executive compensation philosophy. | | | | | | | | | OBJECTIVE | TYPE OF
COMPENSATION | KEY FEATURES | Base Salary | To provide competitive fixed pay that is tied to the market and allows us to attract, retain and motivate executives within the national retail industry and broader market | Cash | •Based on individual skills, experience, responsibilities and performance over time | Short-Term Incentive | To encourage focus on short-term business performance | Cash | •Rewards achievement of short-term corporate performance goals •Pays only if threshold performance levels or above are met • | Long-Term Incentive Performance-Based Restricted Stock | To increase multi-year profitability and stock price | Long-Term Equity | •Rewards achievement of long-term corporate performance goals •Vests only if threshold performance levels or above are met •Links value to stock price | Long-Term Incentive Time-Based Restricted Stock | To closely align executive and shareholder interests and aid in retention | Long-Term Equity | •Promotes retention and enhances executive stock ownership •Links value to stock price | Executive Agreements | To ensure named executive officers remain focused on creating sustainable performance | Benefit | •Protects the Company and the named executive officers from certain termination events by providing economic stability through salary continuation for a fixed period | Other Benefits | To aid in attracting and retaining executive talent | Benefit | •Non-qualified deferred compensation plan •Pier 1 Imports, Inc. Stock Purchase Plan •Broad-based benefits available to all employees |
Analysis of Fiscal 2019 Compensation Base Salary Base salaries for the named executive officers reflect the individual’s skills, experience, responsibilities and performance over time. The compensation committee determines the base salary, and any increases, for named executive officers using external surveys of salary practices for positions with similar levels of responsibility within our peer group as well as the broader industry and taking into account the performance of the individual and the Company.
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 29
The compensation committee reviews base salaries for our executives annually but does not uniformly raise base salaries each year. In fiscal 2019, Ms. Walsh and Mr. Haley received base salary increases of 7% and 27%, respectively, to ensure their competitiveness to the market. KEY EXECUTIVE | ANNUALIZED FISCAL 2018 BASE SALARY | ANNUALIZED FISCAL 2019 BASE SALARY | PERCENT INCREASE | Cheryl A. Bachelder | N/A | $1,250,000 | N/A | Nancy A. Walsh | $ 575,000 | $ 615,000 | 7% | William H. Savage | $ 450,000 | $ 450,000 | 0% | Mark R. Haley | $ 300,000 (1) | $ 380,000 | 27% | Robert E. Bostrom | N/A | $ 615,000 | N/A | Alasdair B. James | $1,000,000 | $1,000,000 | 0% | Kelly N. Cook | N/A | $ 450,000 | N/A | Donna N. Colaco | N/A | $ 700,000 | N/A |
(1) | During fiscal 2019, Mr. Haley received two increases in salary to reflect his increased contribution to the business and his promotion to executive vice president in April of 2018 (in April 2018 increased to $345,000 and in December 2018 increased to $380,000). |
Short-Term Incentive Program No Bonus Payouts for Fiscal Year 2019 Our aggressive target levels of performance for fiscal 2019 were not achieved; therefore, no named executive officer received a short-term incentive award payout. Our executives have not received short-term incentive program payouts in five of the last six fiscal year periods. Our short-term incentive program is designed to reward our executives for overall Company financial performance over the fiscal year. Fifty percent of the incentive was based upon achievement of the Operating Cash EBITDA goal and 50% was based upon achievement of the Net Sales goal. The metrics were adjusted for fiscal 2019 to align with our strategic transformation ensuring a focus on critical top-line growth balanced with profitability and operations. This focus resulted in the replacement of Merchandise Margin Dollars with Net Sales.
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 30
When setting the Operating Cash EBITDA and Net Sales goals for the fiscal year short-term incentive program, the compensation committee reviewed the Company’s actual performance in fiscal 2018 and considered management’s projections for fiscal 2019. The goals set for our leadership team were rigorous and challenging and reflected our strategic plan. Further, the goals for our executives were set at more aggressive levels than for the broader company population. All named executive officers were eligible to receive a cash award in fiscal 2019, except for Ms. Bachelder, who did not participate in the program. Further, Mses. Colaco and Walsh and Mr. Bostrom were eligible to participate in the fiscal 2019 short-term incentive program at 125% of their respective salaries per their offer letters upon hire. No new hires were guaranteed any portion of the short-term incentive as it had to be earned along with the other members of the executive management team. Mr. Bostrom and Ms. Colaco will maintain the 125% target award level for fiscal 2020 and participate at a level commensurate with other senior officers in subsequent years. The short-term incentive program targets for the other NEOs were unchanged from fiscal 2018 and reflect a competitive award compared to Pier 1 Imports’ peer group when performance results are achieved. The targets for each key executive are shown below. No award payout was possible unless the realized Operating Cash EBITDA and Net Sales for fiscal 2019 met or exceeded the threshold level. | FISCAL 2019 ANNUAL SHORT-TERM INCENTIVE OPPORTUNITY AS A PERCENTAGE OF BASE SALARY | | KEY EXECUTIVE | AT THRESHOLD PERFORMANCE LEVELS | AT TARGET PERFORMANCE LEVELS | AT MAXIMUM PERFORMANCE LEVELS | ACTUAL FISCAL 2019 AWARD | Cheryl A. Bachelder (1) | N/A | N/A | N/A | N/A | Nancy A. Walsh (2) | 37.5% | 125% | 250% | $0 | William H. Savage | 22.5% | 75% | 150% | $0 | Mark R. Haley | 22.5% | 75% | 150% | $0 | Robert E. Bostrom (2) | 37.5% | 125% | 250% | $0 | Alasdair B. James (3) | 37.5% | 125% | 250% | N/A | Kelly N. Cook (3) | 22.5% | 75% | 150% | N/A | Donna N. Colaco (2) | 37.5% | 125% | 250% | $0 |
(1) | Ms. Bachelder did not participate in the short-term incentive program for fiscal 2019. |
(2) | Ms. Walsh, Mr. Bostrom and Ms. Colaco were eligible to receive a cashtarget short-term incentive award inequal to 125% of their respective base salaries for fiscal 2018, except for 2019 per their offer letter upon hire. |
(3) | Mr. London, who did not participate in the program,James and Ms. Walsh dueCook were not eligible to receive a short-term incentive payout for fiscal 2019 because they departed prior to the timingend of her hire date. Ms. Walsh received asign-on bonus of $200,000 after thirty days of employment subjectthe fiscal year. The short-term incentive program requires participants to a pro rata clawback in the event she leavesbe employed with Pier 1 Imports or is terminated for cause within 12 monthsat the end of her hire date. She will be eligible to participate in the fiscal 2019 short-term incentive program at 125% of her salary, and atyear to receive a level commensurate with other senior officers in subsequent years.cash award. |
Long-Term Incentive Program Our long-term incentive program is designed to reward performance over the long term and to serve as a retention tool. In fiscal 2019, we made significant changes to our long-term incentive program to better align with our strategic transformation and the executive compensation principles determined by the compensation committee. | | | 34 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
In setting the short-term incentive program targets for fiscal 2018, the compensation committee reviewed the Company’s actual performance in fiscal 2017 and considered management’s projections for fiscal 2018, while also ensuring the target performance percentage levels were competitive when compared to Pier 1 Imports’ peer group. The targets for each named executive officer are shown below. The fiscal 2018 Profit Goal at target represented an increase above the actual amount of the Profit Goal achieved, or Realized Profit, for fiscal 2017. No award payout was possible unless the Realized Profit for 2018 met or exceeded the threshold.
| | | | | | | | | | | | | | | | | | | | | | | FISCAL 2018 ANNUAL SHORT-TERM INCENTIVE OPPORTUNITY
AS A PERCENTAGE OF BASE SALARY | | | | | | | | | | NAMED EXECUTIVE OFFICER | | AT THRESHOLD
PERFORMANCE
LEVELS | | | AT TARGET
PERFORMANCE
LEVELS | | | AT MAXIMUM
PERFORMANCE
LEVELS | | | ACTUAL
FISCAL 2018
AWARD | | | | | | | Alasdair B. James | | | 30% | | | | 100% | | | | 200% | | | | $0 | | | | | | | Nancy A. Walsh(1) | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | | | | Bhargav J. Shah | | | 22.5% | | | | 75% | | | | 150% | | | | $0 | | | | | | | Michael R. Benkel | | | 22.5% | | | | 75% | | | | 150% | | | | $0 | | | | | | | Terry E. London(Former Interim President and Chief Executive Officer, January 1, 2017 through April 30, 2017)(2) | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | | | | Darla D. Ramirez(Former Interim Chief Financial Officer, October 4, 2017 through January 24, 2018) | | | 9% | | | | 30% | | | | 60% | | | | $0 | | | | | | | Jeffrey N. Boyer(Former Executive Vice President and Chief Financial Officer, resigned October 3, 2017)(3) | | | 22.5% | | | | 75% | | | | 150% | | | | N/A | | | | | | | Catherine David(Former Executive Vice President, Merchandising, resigned May 1, 2018) | | | 22.5% | | | | 75% | | | | 150% | | | | $0 | |
(1) | | Ms. Walsh was not eligible to receive a short-term incentive payout for fiscal 2018 because she was hired late in the fiscal year. |
(2) | | Mr. London did not participate in the short-term incentive program for fiscal 2018. |
(3) | | Mr. Boyer was not eligible to receive a short-term incentive payout for fiscal 2018 because he departed prior to the end of the fiscal year. The program requires participants to be employed with Pier 1 Imports at fiscal year end to receive a cash award. |
Long-Term Incentives
Our long-term incentive program is designed to reward performance over the long term and to serve as a retention tool. During fiscal 2018, equity grants were a mix of performance-based restricted stock targeting achievement of two different performance measures with a 10% modifier based on total shareholder return (TSR), and time-based restricted stock.
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 35 |
Approximately 60% of the shares granted at target in fiscal 2018 were performance-based, with half vesting based on achievement of a cumulative three-year Profit Goal and the other half vesting based on three-year average ROIC. Both awards can be modified upwards or downwards based on relative total shareholder return over the period. The performance metrics were designed to align with our long-term strategy by accomplishing the following:
● Profit Goal: Reward core performance without having to factor in financing decisions, accounting decisions or tax environments.
● ROIC: Reward efficient use of capital to generate returns over an asset base.
● TSR: Align with shareholder value creation.
The Profit Goal and ROIC performance targets were based on the three-year business plan and set by the compensation committee after a detailed review which included benchmarking performance and evaluating the practices of peer group companies. The shares vest if Pier 1 Imports achieves the specified performance over a three-year fiscal period ending with fiscal 2020. Participants will receive:
● 50% of the award at the threshold level
● 100% of the award at the target level, and
● 200% of the award at the maximum level
These amounts are prior to application of the 10% TSR modifier discussed above.
Approximately 40% of the shares granted at target in fiscal 2018 were time-based, vesting in substantially equal amounts on the first, second and third anniversary of the grant date.
2016 Performance-Based Share Grants Did Not VestRealize Value in Fiscal 20182019
Performance-based restricted stock grants awarded in fiscal 20162017 were eligible to vest in April of fiscal 2018.2019. These grants were tied to a three-year fiscal performance period ending with fiscal 2018 based on the achievement of Profit Goal and TSRROIC performance metrics. Performance for each of the metrics was below threshold levels, and no shares vested as a result.
In addition toAdditionally, no performance-based restricted shares were earned under the annual grants described above, we madefirst fiscal year of our 2019-2021 performance cycle based on the following grants to newly-hired named executive officers in fiscal 2018:Earnings Per Share as adjusted measure.
| ● | | Mr. James, as part of his offer of employment, received a grant of stock options valued at $1,000,000 on May 2, 2017 (vesting 25% on the third anniversary of the grant, 25% on the fourth anniversary, and 50% on the fifth anniversary). Mr. James also received a grant of restricted stock valued at $500,000 (cliff vesting on the third anniversary). Mr. James’ annual long-term incentive grants included $1,500,000 in performance-based restricted stock (cliff vesting at the end of a three-year performance period ending in fiscal 2020) and $500,000 in time-based restricted stock (vesting in substantially equal installments on each of the first three anniversaries of the grant date). Mr. James’ mix of 75% performance-based restricted stock is higher than the other named executive officers, whose performance-based awards are 60% of the total award. |
| ● | | Ms. Walsh, as part of her offer of employment, received a grant of restricted stock on January 25, 2018, valued at $750,000, vesting in substantially equal installments on each of the first three anniversaries of the grant date. |
| ● | | Mr. Shah, as part of his offer of employment, received a grant of restricted stock on August 8, 2017, valued at $425,000,
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 31
| | KEY CHANGE | RATIONALE | Slightly shifted the blend of vehicles from 60% performance-based restricted stock and 40% of which was time-based (vesting in substantially equal installments on each of the first three anniversaries of the grant date) and 60% of which were performance-based (cliff vesting at the end of a three-year period ending in fiscal 2021). |
We also made a grant of time-based restricted stock to Terry London on May 1, 2017, valued at $1,000,000, in recognition for his past service as chairman of50% and 50% respectively
| Enhance the board and in orderretention value while still maintaining a strong connection to provide an incentive for his continued service as chairman of the board. The grant will vest 40% on each of the first two anniversaries of the grant date and 20% on the third anniversary, provided he is still serving as a director on the vest date. | | | 36 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
| COMPENSATION creating shareholder value
|
Changed the metric in the performance-based restricted stock program to Earnings Per Share as adjusted | The table below providesSimplify the plan and focus executives on a breakdownsingle metric critical to a successful turnaround and well aligned to creating shareholder value over the long-term
| Adjusted the measurement period on the performance-based restricted stock from a three-year period to three one-year periods | Reflect the uncertainty within our business and focus on critical Earnings Per Share as adjusted milestones required for a successful long-term turnaround | |
During fiscal 2019, equity grants were a mix of performance-based restricted stock, targeting the achievement of Earnings Per Share as adjusted, and time-based restricted stock. Approximately 50% of the restricted shares granted at target in fiscal 2019 were performance-based, with vesting based on achievement of Earnings Per Share targets, adjusted for specified significant unusual or non-recurring or recurring non-cash items or events as provided in the 2015 Plan for a given fiscal year period, with such adjustments to be determined by the compensation committee. 
The Earnings Per Share as adjusted performance target was based on the three-year business plan and set by the compensation committee. The vesting schedule over the three years is as follows:
| | Fiscal 2019-2021 Adjusted Earnings Per Share Vesting Schedule | Earnings Per Share As Adjusted Vesting Schedule for FY 2019 | Threshold | N/A | Target | 1/3 X 100% = 33% of the awards granted to the namedtotal Target Performance-Based Restricted Shares | Maximum | N/A | Earnings Per Share As Adjusted Vesting Schedule for each of FY 2020 and FY 2021 | Threshold | 1/3 X 75% = 25% of total Target Performance-Based Restricted Shares | Target | 1/3 X 100% = 33% (fiscal 2020) or 34% (fiscal 2021) of total Target Performance-Based Restricted Shares | Maximum | 1/3 X 250% = 83% of total Target Performance-Based Restricted Shares |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 32
Approximately 50% of the restricted shares granted at target in fiscal 2019 were time based, vesting in substantially equal amounts on the first, second and third anniversary of the grant date. For fiscal 2019, Earnings Per Share as adjusted was below target, therefore no restricted shares were earned for the first fiscal year of the three-fiscal-year performance period. Executives that were not eligible for or were appointed subsequent to the grant of the annual award described above received the following awards: Ms. Bachelder was provided a time-based restricted stock award of 729,927 shares which was valued at $1,000,000 based on the thirty-day trailing average of the Company’s common stock as of December 18, 2018, the date of her appointment as interim chief executive officer. Due to the difference in stock price between the time the award was determined and the actual grant date, the fair value of the award on the grant date was $226,277. In addition to his annual time-based restricted stock award, Mr. Savage received a one-time performance-based restricted stock award valued at $337,500 that will vest based on the attainment of specific and challenging cost savings in terms of sourcing expenses over a three-year performance period. In lieu of the annual long-term time-based incentive award and per her offer letter, Ms. Cook received a one-time long-term incentive award valued at $225,000, vesting in substantially equal installments over a three-year period. Mr. Bostrom, as part of his offer of employment, received a grant of time-based restricted stock on January 23, 2019, valued at $375,000, vesting in equal installments on each of the first three anniversaries of the grant date. Ms. Colaco, as part of her offer of employment, received a grant of time-based restricted stock on December 3, 2018, valued at $600,000, vesting in equal installments on each of the second and third anniversaries of the grant date. The table below provides a breakdown of the awards granted to key executives in fiscal 2019. KEY EXECUTIVE | PERFORMANCE – BASED RESTRICTED SHARES AT TARGET (1) | TIME-BASED RESTRICTED
SHARES (2) | VALUE AT TARGET (3) | NOTES | Cheryl A. Bachelder | N/A | 729,927 | $1,000,000 | Award made in connection with commencement of the Interim CEO role | Nancy A. Walsh | 209,090 | 104,545 | $ 575,000 | Awards forfeited upon departure | William H. Savage | 147,378 | 81,818 | $ 562,500 | | Mark R. Haley | 94,090 | 47,045 | $ 258,750 | | Robert E. Bostrom | N/A | 657,894 | $ 375,000 | Award made in connection with employment | Alasdair B. James | 500,000 | 250,000 | $1,375,000 | Awards forfeited upon departure | Kelly N. Cook | 245,454 | 71,884 | $ 562,500 | Awards forfeited upon departure | Donna N. Colaco | N/A | 384,615 | $ 600,000 | Award made in connection with employment |
(1) | Named executive officers inmust be employed on the date of filing of Pier 1 Imports’ Annual Report on Form 10-K with the SEC for fiscal 2018.2021 to be eligible for vesting and to receive the shares contemplated by the award. | | | | | | | | | | | | | | | | | | | | | | | | | | NAMED EXECUTIVE OFFICER | | PROFIT GOAL
PERFORMANCE – BASED RESTRICTED STOCK
SHARES AT TARGET(1) | | ROIC
PERFORMANCE – BASED RESTRICTED STOCK
SHARES AT TARGET(1) | | TIME-BASED RESTRICTED
STOCK
SHARES(2) | | STOCK
OPTION
SHARES | | VALUE AT
TARGET(3) | Alasdair B. James | | | | 107,450 | | | | | 107,450 | | | | | 143,266 | | | | | 310,969 | | | | | $3,500,000 | | Nancy A. Walsh | | | | N/A | | | | | N/A | | | | | 182,481 | | | | | N/A | | | | | $ 750,000 | | Michael R. Benkel | | | | 15,651 | | | | | 15,653 | | | | | 20,869 | | | | | N/A | | | | | $ 360,000 | | Bhargav J. Shah | | | | 27,419 | | | | | 27,420 | | | | | 36,558 | | | | | N/A | | | | | $ 425,000 | | Terry E. London(Former Interim President and Chief Executive Officer, January 1, 2017 through April 30, 2017) | | | | N/A | | | | | N/A | | | | | 142,857 | | | | | N/A | | | | | $1,000,000 | | Darla D. Ramirez(Former Interim Chief Financial Officer, October 4, 2017 through January 24, 2018) | | | | 2,732 | | | | | 2,732 | | | | | 5,464 | | | | | N/A | | | | | $ 75,000 | | Jeffrey N. Boyer(Former Executive Vice President and Chief Financial Officer, resigned October 3, 2017) | | | | 22,825 | | | | | 22,827 | | | | | 30,434 | | | | | N/A | | | | | $ 525,000 | | Catherine David(Former Executive Vice President, Merchandising, resigned May 1, 2018) | | | | 19,565 | | | | | 19,566 | | | | | 26,086 | | | | | N/A | | | | | $ 450,000 | |
(1) | Named executive officers must be employed on the date of filing of Pier 1 Imports’ Annual Report on Form10-K with the SEC for fiscal 2020 to be eligible for vesting and to receive the shares contemplated by the award. |
(2) | Named executive officers must be employed on the vesting date to receive the shares. Restricted shares vest in substantially equal installments over a three-year period. |
(3) | (3) | Number of restricted shares is determined by dividing the target value by the target value by the30-day trailing average of the closing price of Pier 1 Imports common stock as of the grant date. Grant date fair value may differ from target value as a result of differences between the stock price on the grant date and the30-day trailing average stock price. |
Special One-Time Cash Retention Award and Bonus for Ms. Ramirez
In September of 2017, the Company awarded Ms. Ramireza one-time special cash retention award of $125,000 to retain her services during the chief financial officer transition. Ms. Ramirez’s award will vest on September 5, 2018, one year from the award date, and is contingent on her continued service through the vest date. In addition, following Ms. Walsh’s appointment as chief financial officer, Ms. Ramirez received a discretionary cash bonus of $15,000 upon completion of her service as interim chief financial officer.
Retirement and Other Plans
We offer anon-qualified deferred compensation plan, referred to as the Pier 1 Imports, Inc. Deferred Compensation Plan, to our executives and key members of management. The plan 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 us in attracting and retaining executives and key members of management. The plan is described and discussed below under the caption“Non-Qualified Deferred Compensation Table for the Fiscal Year Ended March 3, 2018.”
We have historically maintained a supplemental executive retirement plan for certain executive officers. During fiscal 2018, no named executive officer participated in the supplemental retirement plan.
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 37 |
Pier 1 Imports’ Guidelines on Share Ownership
Our board of directors believes it is critical for executives to be closely aligned with shareholders’ interests over both the short and long term. Our stock ownership guidelines are designed to accomplish this linkage. These guidelines provide a targeted ownership level of shares of Pier 1 Imports common stock for each named executive officer position equal toas of the grant date. Grant date fair value may differ from target value as a multipleresult of his or her base salary. The targeted ownership level should be acquired within five years of election as an officer. Shares counted toward ownership include shares beneficially owned directly or indirectly (other than shares which might be acquired by exercise of an option or unvested performance-based restricted stock)differences between the stock price on the grant date and unvested time-based restricted stock.the 30-day trailing average stock price.
|
One-Time Cash Awards Between December 2018 and January 2019, the Company experienced significant leadership changes against a backdrop of continued uncertainty in the business. To help secure key leaders and ensure they remained focused on driving performance and executing on the business strategy, the Company made select one-time retention cash awards. The awards provided to Ms. Walsh, Mr. Savage and Mr. Haley are subject to a pro-rata clawback in the event the executive leaves Pier 1 Imports without good reason or is terminated for cause for the term specified in the award agreement. The award provided to Ms. Cook will be paid in December 2019. NAMED EXECUTIVE OFFICER | CASH AWARD | Nancy A. Walsh | $615,000 | William H. Savage | $450,000 | Mark R. Haley | $380,000 | Kelly N. Cook | $450,000 |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 33
In addition, Mr. Haley received a cash retention award of $345,000 that was granted and paid in May 2018, subject to a pro rata clawback as described above. Mr. Bostrom received a sign-on bonus of $375,000 upon commencement of employment. Ms. Colaco received a sign-on bonus of $300,000 after sixty days of employment. Ms. Cook received a sign-on bonus of $75,000 after sixty days of employment and an additional $50,000 payable upon completion of one year of service, which was paid following her separation from service. Each sign-on bonus is subject to a pro rata clawback as described above. Retirement and Other Plans We offer a non-qualified deferred compensation plan, referred to as the Pier 1 Imports, Inc. Deferred Compensation Plan, to our executives and key members of management. This plan 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. This plan also assists us in attracting and retaining executives and key members of management. This plan is described and discussed below under the caption “Non-Qualified Deferred Compensation Table for the Fiscal Year Ended March 2, 2019.” We have historically maintained a supplemental executive retirement plan for certain executive officers. During fiscal 2019, no named executive officer participated in the supplemental retirement plan. Pier 1 Imports’ Guidelines on Share Ownership Our board of directors believes it is critical for executives to be closely aligned with shareholders’ interests over both the short and long term. Our stock ownership guidelines are designed to accomplish this linkage. These guidelines provide a targeted ownership level of shares of Pier 1 Imports common stock for each named executive officer position equal to a multiple of his or her base salary. The targeted ownership level should be acquired within five years of election as an officer. | | | | POSITION | OWNERSHIP GUIDELINE | | | | | | POSITION | | OWNERSHIP GUIDELINE
| | | Chief Executive Officer | | 6 times base salary | | | Executive Vice President | 2.5 times base salary | | | Senior Vice President | 2 times base salary | | | Vice President | 1 times base salary | | | Senior Executive Vice President
| | 3 times base salary
| | | Executive Vice President
| | 2.5 times base salary
| | | Senior Vice President
| | 2 times base salary
| | | Vice President
| | 1 times base salary
|
The guidelines provide that once an executive achieves compliance, such executive will remain in compliance with the guidelines provided that he or she continues to hold or beneficially own the same or a greater number of eligible shares and/or units that were sufficient at that time to meet the targeted ownership level.
Our board of directors has also adopted stock ownership guidelines for its
|
The guidelines provide that once an executive achieves compliance, such executive will remain in compliance with the guidelines provided that he or she continues to hold or beneficially own the same or a greater number of eligible shares that were sufficient at that time to meet the targeted ownership level. Our board of directors has also adopted stock ownership guidelines for its non-employee directors to encourage direct ownership in Pier 1 Imports. These guidelines were updated to reflect the new director compensation structure and state that each non-employee directors to encourage direct ownership in Pier 1 Imports. These guidelines will be updated to reflect the new director compensation structure and state that eachnon-employee director should, within five years of becoming a member of the board of directors, acquire ownership of shares of Pier 1 Imports common stock equal in value to five times the non-employee director annual cash retainer (i.e., 5 X $85,000) effective as of June 29, 2018. Shares counted toward ownership for executives and directors include shares beneficially owned directly or indirectly (other than shares which might be acquired by exercise of an option or unvested performance-based restricted stock), unvested time-based restricted stock and DSUs credited to the non-employee directors. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 34
Compensation Factors and Governance for Fiscal 2019 The compensation committee evaluates many factors when designing executive compensation plans and targets. The following table outlines our key practices: WHAT WE DO | WHAT WE DON’T DO | ✓Set aggressive short-term and long-term performance metrics and have a majority of targeted pay for executives tied to performance ✓Use long-term incentives to encourage management retention ✓Tie a significant portion of executives’ pay to performance metrics critical to the business ✓Mitigate undue risk by using a cap on maximum payouts for short-term and long-term plans and performing an annual internal risk assessment of compensation programs ✓Have stock ownership guidelines that reinforce alignment between shareholders and our executive officers ✓Maintain a clawback policy ✓Have an independent compensation consultant reporting directly to the compensation committee | ✘Have employment agreements ✘Apply across-the-board base salary increases ✘Have tax gross-ups upon a change in control ✘Automatically vest equity awards under stock incentive plans upon a change in control ✘Allow hedging, short sales, option trading or pledging of Pier 1 Imports common stock equal in value to five times the non-employee✘ director annual retainer (i.e., 5 X $85,000) effective as of June 26, 2018. Shares counted toward ownership include shares beneficially owned directly or indirectly (other than shares which might be acquired by exercise of an option orPay dividends on unvested performance-based restricted stock), unvested time-based restricted stock and DSUs credited to thenon-employee director.or above-market earnings on deferred compensation arrangements
Pier 1 Imports’ Policy on Section 162(m)✘Reprice underwater stock options
|
Role of the Compensation Committee Throughout our strategic transformation, the compensation committee has been instrumental in the development of appropriate programs designed to attract, retain and motivate as well as stabilize our leadership team. The compensation committee has thoughtfully partnered with leadership to redefine our executive compensation principles and ensure our programs support those principles, while maintaining a focus on performance metrics and goals that are aligned with shareholder interests. | | | We have historically considered the effect of limitations on deductibility of compensation for federal income tax purposes. Historically, section 162(m) of the Internal Revenue Code of 1986 generally denied public companies like PierStep 1 Imports a federal income tax deduction for compensation paid to the
The chief executive officer and the chief human resources officer present and make pay and incentive recommendations for all executives to the compensation committee. The chief executive officer does not make a recommendation as to his or anyher own pay. The timing of these discussions is generally at the end of a fiscal year or the beginning of the three other most highly compensated officers (not including the principal financial officer) that exceeded $1,000,000 for each such officer during the tax year unless such compensation was qualifying performance-based compensation. The Tax Cuts and Jobs Act, enacted in December of 2017, eliminated the exception for deductibility for qualifying performance-based compensation paid pursuant to plans approved by shareholders. Fornext fiscal 2018, the deductibility of officer compensation was not limited by Section 162(m).year. | Compensation Committee Interlocks and Insider Participation
Each director of Pier 1 Imports who served as a member of the compensation committee during the fiscal year ended March 3, 2018 is identified above under the caption “Director Attendance at Board and Committee Meetings and at the Annual Meeting of Shareholders.” During fiscal 2018, there were no compensation committee interlocks or insider participation.
Compensation Risk
Pier 1 Imports’ internal audit department assists us in assessing compensation risk by conducting an annual risk assessment of our compensation policies. Internal audit’s evaluation consists of a review of all incentive plans and their compensation elements: base salary, short- and long-term incentives, performance measurement mechanics, compensation features and performance targets. Based on that assessment, we do not believe that our compensation policies, principles, objectives or practices are structured to promote inappropriate risk taking by our executives or employees whose behavior would be most affected by performance-based incentives. We believe that this focus on our overall compensation program encourages our employees to take a balanced approach that focuses on increasing and sustaining Pier 1 Imports’ profitability.
| | | 38 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
Compensation Committee ReportStep 2
The compensation committee has reviewedconsiders survey data from
Pier 1 Imports’ peer group, and discussedbroader industry studies and recommendations from its independent executive compensation consultant, Willis Towers Watson. | Step 3 The compensation committee confirms prior-year performance metrics and approves current fiscal year compensation within the first 45 days of the fiscal year with managementan effective date for new awards generally in April or May. Long- and short-term incentive compensation grants for the Compensation Discussionfiscal year, as well as long-term incentive vesting and Analysis above. Based on the review and discussion,short-term incentive award payouts, if any, are awarded after approval by the compensation committee has recommended to theand board of directors that the Compensation Discussion and Analysis be included in Pier 1 Imports’ 2018 proxy statement.directors. |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 35
| COMPENSATION COMMITTEE Cheryl A. Bachelder, Chair
Claire H. Babrowski
Michael A. Peel
|
Role of the Independent Executive Compensation Consultant Willis Towers Watson, the compensation committee’s independent executive compensation consultant, provided consulting advice regarding executive compensation in fiscal year 2019, as well as data from the Willis Towers Watson Compensation Data Bank Retail/Wholesale Services Executive Database and public sources such as proxy filings. Willis Towers Watson reported directly to, and was accountable to, the compensation committee. In compliance with SEC and NYSE requirements regarding independence, Willis Towers Watson has provided the compensation committee with a letter confirming its independence and the independence of its respective partners, consultants and employees who advise the compensation committee on executive compensation matters. The compensation committee reviewed the factors specified in the NYSE corporate governance standards and the letter, dated March 27, 2019 from Willis Towers Watson, and determined that Willis Towers Watson was independent and did not have any conflicts of interest. During fiscal 2019, Willis Towers Watson did not provide any other services to Pier 1 Imports other than executive compensation consulting. Compensation Risk Pier 1 Imports’ internal audit department assists us in assessing compensation risk by conducting an annual risk assessment of our compensation policies. Internal audit’s evaluation consists of a review of all incentive plans and their compensation elements: base salary, short-term and long-term incentives, performance measurement mechanics, compensation features and performance targets. Based on that assessment, we do not believe that our compensation policies, principles, objectives or practices are structured to promote inappropriate risk taking by our executives or employees whose behavior would be most affected by performance-based incentives. We believe that this focus on our overall compensation program encourages our employees to take a balanced approach that focuses on increasing and sustaining Pier 1 Imports’ profitability.
Compensation Committee Interlocks and Insider Participation With respect to fiscal 2019 and from March 3, 2019 through the date of this proxy statement, no executive officer of the Company served as a member of the board of directors or compensation committee of another entity, one of whose executive officers served on the Company’s compensation committee or board of directors, and no member of the compensation committee had any relationship with the Company that would require disclosure under Item 404 of Regulation S-K. The compensation committee is currently comprised of Michael A. Peel (Chair), Claire H. Babrowski and Katherine M. A. (“Allie”) Kline. Mr. Peel and Ms. Babrowski each served as a member of the compensation committee throughout fiscal 2019. Ms. Kline was appointed to the compensation committee on September 25, 2018. Cheryl A. Bachelder resigned as a member and chair of the compensation committee effective December 18, 2018, in connection with her appointment as interim chief executive officer. Compensation Committee Report The compensation committee has reviewed and discussed with management the Compensation Discussion and Analysis above. Based on the review and discussion, the compensation committee has recommended to the board of directors that the Compensation Discussion and Analysis be included in Pier 1 Imports’ 2019 proxy statement. COMPENSATION COMMITTEE Michael A. Peel, Chair Claire H. Babrowski
Katherine M. A. (“Allie”) Kline PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 36
| | | COMPENSATION | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 39 |
Summary Compensation Table for the Fiscal Years Ended March 3, 2018, February 25, 2017, and February 27, 2016
The following table sets forth a summary of the compensation in the past three
|
Summary Compensation Table for the Fiscal Years Ended March 2, 2019, March 3, 2018, and February 25, 2017 The following table sets forth a summary of the compensation in the past two fiscal years for services rendered in all capacities to Pier 1 Imports and its subsidiaries by the interim chief executive officer, the former president and chief executive officer, the former chief financial officer, the three other most highly compensated executive officers, and one additional officer for whom disclosure would have been required but for the fact that the individual was not serving as a Pier 1 Imports executive officer at the end of fiscal 2019. None of our NEOs were serving as such for the fiscal year ended February 25, 2017. NAME AND PRINCIPAL POSITION | FISCAL YEAR | SALARY (1) ($) | BONUS (2) ($) | STOCK AWARDS (3) ($) | OPTION AWARDS ($) | NON-EQUITY INCENTIVE PLAN COMPENSATION (4) ($) | CHANGE IN PENSION VALUE AND NON-QUALIFIED DEFERRED COMPENSATION EARNINGS ($) | ALL OTHER COMPENSATION (5) ($) | TOTAL ($) | Cheryl A. Bachelder Interim Chief Executive Officer | 2019 | $234,154 | - | $ 334,275 | - | - | - | $108,031 | $ 676,460 | (appointed December 18, 2018) | | | | | | | | | | Alasdair B. James Former President and | 2019 | $815,385 | - | $ 892,498 | - | - | - | $267,606 | $1,975,489 | Chief Executive Officer (resigned December 18, 2018) | 2018 | $826,923 | $300,000 | $1,674,782 | $1,001,320 | - | - | $ 78,568 | $3,881,593 | Nancy A. Walsh Former Executive Vice President | 2019 | $584,231 | $615,000 | $ 373,225 | - | - | - | $202,507 | $1,774,963 | and Chief Financial Officer (departed April 17, 2019) | 2018 | $ 48,654 | $200,000 | $ 671,530 | - | - | - | $ 23,335 | $ 943,519 | William H. Savage Executive Vice President, | 2019 | $450,000 | $450,000 | $ 370,107 | - | - | - | $129,256 | $1,399,363 | Global Supply Chain | | | | | | | | | | Mark R. Haley Executive Vice President, | 2019 | $345,288 | $725,000 | $ 167,949 | - | - | - | $ 26,870 | $1,265.107 | Store Sales and Operations | | | | | | | | | | Robert E. Bostrom Executive Vice President, | 2019 | $ 54,404 | $375,000 | $ 572,368 | - | - | - | $100,647 | $1,102,419 | Chief Legal and Compliance Officer and Corporate Secretary (appointed January 23, 2019) | | | | | | | | | | Kelly N. Cook Former Executive Vice President | 2019 | $418,846 | $575,000 | $ 366,007 | - | - | - | $ 71,179 | $1,431,032 | and Chief Marketing Officer (resigned February 19, 2019) | | | | | | | | | |
(1) | This column represents the amount of base salary earned during each fiscal year. |
(2) | For fiscal 2019, this column represents the following bonus payments: for Mr. Bostrom, a signing bonus subject to a clawback if employment is terminated by Pier 1 Imports for cause or by him voluntarily prior to twelve months from the date of hire; for Ms. Walsh and its subsidiariesMr. Savage, retention bonuses granted and paid in fiscal 2019 subject to a clawback if employment is terminated by Pier 1 Imports for cause or by the chief executive officer,voluntarily prior to February 29, 2020; for Mr. Haley, a retention bonus of $345,000 paid in May 2018 and a retention bonus of $380,000 paid in January 2019, each subject to a clawback if his employment is terminated by Pier 1 Imports for cause or by him voluntarily prior to twelve months from the former interim chief executive officer, the chief financial officer, the former chief financial officer, the former interim chief financial officer,date of payment or February 29, 2020, respectively; and the three other most highly compensated executive officers.for Ms. Cook $125,000 in sign-on bonus, as well as a retention bonus of $450,000 granted in fiscal 2019 that will be paid in fiscal 2020. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NAME AND
PRINCIPAL
POSITION | | FISCAL YEAR | | SALARY (1) ($) | | BONUS (2) ($) | | STOCK AWARDS (3) ($) | | OPTION AWARDS (4)
($) | | NON-EQUITY INCENTIVE PLAN COMPENSATION (5)
($) | | CHANGE IN PENSION VALUE AND NON-QUALIFIED DEFERRED COMPENSATION EARNINGS ($) | | ALL OTHER
COMPENSATION (6)
($) | | TOTAL ($) | Alasdair B. James President and Chief Executive Officer (appointed May 1, 2017) | | 2018 | | | $ | 826,923 | | | | $ | 300,000 | | | | $ | 1,674,782 | | | | | 1,001,320 | | | | $ | 0 | | | | $ | 0 | | | | $ | 78,568 | | | | $ | 3,881,593 | | Terry E. London (7) Former Interim President and Chief Executive Officer (January 1, 2017 through April 30, 2017) | | 2018 | | | $ | 370,192 | | | | $ | 0 | | | | $ | 939,999 | | | | | N/A | | | | | N/A | | | | $ | 0 | | | | $ | 2,901 | | | | $ | 1,313,092 | | | | 2017 | | | $ | 134,615 | | | | $ | 0 | | | | | N/A | | | | | N/A | | | | | N/A | | | | $ | 0 | | | | $ | 528 | | | | $ | 135,143 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nancy A. Walsh Executive Vice President and Chief Financial Officer (appointed January 25, 2018) | | 2018 | | | $ | 48,654 | | | | $ | 200,000 | | | | $ | 671,530 | | | | | N/A | | | | | N/A | | | | $ | 0 | | | | $ | 23,335 | | | | $ | 943,519 | | Jeffrey N. Boyer Former Executive Vice President and Chief Financial Officer (resigned October 3, 2017) | | 2018 | | | $ | 332,404 | | | | $ | 0 | | | | $ | 350,977 | | | | | N/A | | | | $ | 0 | | | | $ | 0 | | | | $ | 21,767 | | | | $ | 705,148 | | | | 2017 | | | $ | 500,000 | | | | $ | 0 | | | | $ | 466,359 | | | | | N/A | | | | $ | 177,000 | | | | $ | 0 | | | | $ | 33,308 | | | | $ | 1,176,667 | | | | 2016 | | | $ | 298,077 | | | | $ | 0 | | | | $ | 480,671 | | | | | N/A | | | | $ | 0 | | | | $ | 0 | | | | $ | 153,530 | | | | $ | 932,278 | | Darla D. Ramirez (8) Former Interim Chief Financial Officer (October 4, 2017 through January 24, 2018) | | 2018 | | | $ | 235,740 | | | | $ | 15,000 | | | | $ | 54,012 | | | | | N/A | | | | $ | 0 | | | | $ | 0 | | | | $ | 18,550 | | | | $ | 323,302 | | Catherine David Former Executive Vice President, Merchandising (resigned May 1, 2018) | | 2018 | | | $ | 450,000 | | | | $ | 225,000 | | | | $ | 300,840 | | | | | N/A | | | | $ | 0 | | | | $ | 0 | | | | $ | 33,614 | | | | $ | 1,009,454 | | | | 2017 | | | $ | 450,000 | | | | $ | 0 | | | | $ | 436,868 | | | | | N/A | | | | $ | 159,300 | | | | $ | 0 | | | | $ | 31,694 | | | | $ | 1,077,862 | | | | 2016 | | | $ | 446,923 | | | | $ | 0 | | | | $ | 532,391 | | | | | N/A | | | | $ | 0 | | | | $ | 0 | | | | $ | 34,917 | | | | $ | 1,014,231 | | Michael R. Benkel Executive Vice President, Global Supply Chain | | 2018 | | | $ | 360,000 | | | | $ | 180,000 | | | | $ | 240,667 | | | | | N/A | | | | $ | 0 | | | | $ | 0 | | | | $ | 34,919 | | | | $ | 815,586 | | | | 2017 | | | $ | 360,000 | | | | $ | 0 | | | | $ | 350,131 | | | | | N/A | | | | $ | 127,440 | | | | $ | 0 | | | | $ | 27,037 | | | | $ | 864,608 | | | | 2016 | | | $ | 360,000 | | | | $ | 0 | | | | $ | 426,762 | | | | | N/A | | | | $ | 0 | | | | $ | 0 | | | | $ | 27,037 | | | | $ | 813,799 | | Bhargav J. Shah Senior Vice President and Chief Information Officer (appointed August 7, 2017) | | 2018 | | | $ | 237,019 | | | | $ | 150,000 | | | | $ | 294,294 | | | | | N/A | | | | $ | 0 | | | | $ | 0 | | | | $ | 49,767 | | | | $ | 731,080 | |
(1) | | This column represents the amount of base salary earned during each fiscal year. |
(2) | | This column represents the following bonus payments: for Mr. James and Ms. Walsh, signing bonuses subject to a clawback if employment is terminated by Pier 1 Imports for cause or voluntarily prior to twelve months from the date of hire; for Mr. Shah, a payment to offset forfeited short-term incentive opportunity related to his transition; for Ms. David and Mr. Benkel, retention bonuses granted in fiscal 2017 that vested in 2018; and for Ms. Ramirez, a completion bonus following her service as interim chief financial officer. |
(3) | (3) | This column represents the accounting grant date fair value of all time-based and performance-based restricted stock awards and restricted stock units issued during the fiscal year. These amounts reflect the accounting expense for these awards in accordance with accounting rules, and do not necessarily correspond to the actual value that will be recognized by the NEO. For time-based and performance-based restricted stock awards and restricted stock units, fair value is calculated using the closing price of Pier 1 Imports common stock on the date of grant. If the date of grant occurs on a day when Pier 1 Imports common stock is not traded, then the closing price on the last trading day before the date of grant is used. For these awards, the closing price on the date of grant for fiscal 2018 awards was $6.68 for Mr. James. The closing prices on the grant dates for the other NEOs were $6.58, $6.59, $4.60 and $3.68. The amounts shown exclude the impact of forfeitures related to service-based vesting conditions. |
| | For performance-based awards, the grant date fair value is based on the probable outcome of Pier 1 Imports achieving performance thresholds. The amounts in the table assume thresholds are met and the threshold number of shares awarded will vest. If the grant date fair value associated with all performance-based awards issued in fiscal 2018 had been valued at maximum performance, the total grant date fair value of stock awards reported for fiscal 2018 would have been: for Mr. James, $4,085,531, for Mr. London, no change, for Ms. Walsh, no change, for Mr. Boyer, $856,968, for Ms. Ramirez, $114,564, for Ms. David, $734,531, for Mr. Benkel, $587,611 and for Mr. Shah, $738,378. The performance-based shares awarded on April 14, 2017, May 2, 2017 and August 8, 2017 are subject to an increase or decrease of 10% based on TSR as discussed above in Compensation Discussion and Analysis (“TSR Modifier”). The fair value for the TSR Modifier on performance-based restricted stock awards was $5.99, which was determined by a valuation model. Maximum performance dollar value includes the increase in applicable awards related to the TSR Modifier, however; threshold dollar value in the table above was not adjusted for the TSR Modifier. |
(4) | | This column represents the accounting grant date fair value of stock options granted during the fiscal year, determined in accordance with FASB ASC Topic 718. The grant was valued in accordance with the Black Scholes valuation model. The assumptions used in determining the grant date fair value of the stock options include the following: risk free rate of 1.942%; expected life of five years; volatility of 65.901%; and dividend yield of 3.00%. |
(5) | | This column reflects annual cash awards earned under the short-term incentive program. Mr. London did not participate in the fiscal 2017 or 2018 short-term incentive program. Ms. Walsh was not eligible for the fiscal 2018 short-term incentive program. No short-term incentive cash awards were earned during fiscal years 2016 and 2018. |
(6) | | See Fiscal 2018 All Other Compensation table below. |
(7) | | Mr. London was appointed interim president and chief executive officer on January 1, 2017. Mr. London was appointed to serve as executive chairman upon Mr. James assuming his role as president and chief executive officer on May 1, 2017, and served in this role through July 31, 2017, following which he reassumed the role ofnon-executive chairman of the board. |
(8) | | Ms. Ramirez was appointed vice president – controller and interim chief financial officer on October 4, 2017 and served in the role until Ms. Walsh’s appointment as executive vice president and chief financial officer on the date her employment began, January 25, 2018. |
| | | 40 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
The following table describes each component of All Other Compensation for fiscal 2018.
| | | | | | | | | | | | | | | | | | | | | | | | | | FISCAL 2018 ALL OTHER COMPENSATION | NAME | | PAYMENTS RELATING
TO EMPLOYEE
SAVINGS PLANS (1) | | DISABILITY
INSURANCE
PREMIUMS (2) | | LIFE
INSURANCE
PREMIUMS (3) | | OTHER
BENEFITS (4) | | TOTAL ALL OTHER
COMPENSATION | Alasdair B. James (appointed May 1, 2017) | | | | $16,154 | | | | | $2,901 | | | | | $ 623 | | | | | $58,890 | | | | | $78,568 | | Terry E. London (January 1, 2017 through April 30, 2017) | | | | $ 0 | | | | | $ 0 | | | | | $2,901 | | | | | – | | | | | $ 2,901 | | Nancy A. Walsh (appointed January 25, 2018) | | | | $ 0 | | | | | $ 378 | | | | | $ 0 | | | | | $22,957 | | | | | $23,335 | | Jeffrey N. Boyer (resigned October 3, 2017) | | | | $17,312 | | | | | $3,026 | | | | | $1,429 | | | | | – | | | | | $21,767 | | Darla D. Ramirez (October 4, 2017 through January 24, 2018) | | | | $18,292 | | | | | $ 0 | | | | | $ 258 | | | | | – | | | | | $18,550 | | Catherine David (resigned May 1, 2018) | | | | $28,404 | | | | | $3,802 | | | | | $1,408 | | | | | – | | | | | $33,614 | | Michael R. Benkel | | | | $31,066 | | | | | $2,977 | | | | | $ 876 | | | | | – | | | | | $34,919 | | Bhargav J. Shah (appointed August 7, 2017) | | | | $10,053 | | | | | $1,284 | | | | | $ 228 | | | | | $38,202 | | | | | $49,767 | |
(1) | | This column reports Pier 1 Imports’ aggregate matching and employer discretionary contributions to the NEOs 401(k) savings account, Deferred Compensation Plan account and Stock Purchase Plan account. Those contributions are set forth in the Fiscal 2018 Matching Contributions table below. |
(2) | | This column reports premiums paid on behalf of the NEOs for supplemental disability insurance coverage. |
(3) | | This column reports premiums paid on behalf of the NEOs for basic term life insurance. |
(4) | | Perquisites and personal benefits if any, for each NEO (other than Mr. James, Ms. Walsh and Mr. Shah), which are less than $10,000 in the aggregate are not shown. Amounts shown in this column report reimbursements for moving and relocation expenses for Mr. James, Ms. Walsh and Mr. Shah. |
The following table describes aggregate matching and employer discretionary contributions to the NEO’s 401(k) savings account, Deferred Compensation Plan account and Stock Purchase Plan account.
| | | | | | | | | | | | | | | | | FISCAL 2018 MATCHING CONTRIBUTIONS | | NAME | | 401(k) | | | DCP | | | SPP | | | TOTAL | | Alasdair B. James (appointed May 1, 2017) | | $ | 0 | | | $ | 16,154 | | | $ | 0 | | | $ | 16,154 | | Terry E. London (January 1, 2017 through April 30, 2017) | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | Nancy A. Walsh (appointed January 25, 2018) | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | Jeffrey N. Boyer (resigned October 3, 2017) | | $ | 5,215 | | | $ | 9,972 | | | $ | 2,125 | | | $ | 17,312 | | Darla D. Ramirez (October 4, 2017 through January 24, 2018) | | $ | 8,496 | | | $ | 8,046 | | | $ | 1,750 | | | $ | 18,292 | | Catherine David (resigned May 1, 2018) | | $ | 8,100 | | | $ | 18,279 | | | $ | 2,025 | | | $ | 28,404 | | Michael R. Benkel | | $ | 8,100 | | | $ | 14,623 | | | $ | 8,343 | | | $ | 31,066 | | Bhargav J. Shah (appointed August 7, 2017) | | $ | 4,904 | | | $ | 1,471 | | | $ | 3,678 | | | $ | 10,053 | |
Pier 1 Imports’ 401(k) and Stock Purchase Plan are broad based plans available to all eligible employees on anon-discriminatory basis.
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 41 |
Grants of Plan-Based Awards for the Fiscal Year Ended March 3, 2018
We granted short-term incentive cash awards to the NEOs for fiscal 2018 pursuant to the Pier 1 Imports, Inc. 2015 Stock Incentive Plan as described in Compensation Discussion and Analysis – Analysis of Fiscal 2018 Compensation – Short-Term Incentive above.
We granted long-term incentive awards to NEOs as described in Compensation Discussion and Analysis –Analysis of Fiscal 2018 Compensation – Long-Term Incentive.Those grants were made pursuant to the Pier 1 Imports, Inc. 2015 Stock Incentive Plan with the exception of a portion of Mr. James’ time-based restricted stock and stock options, which were granted as inducement grants outside of the Plan.
The restricted stock awards (performance-based and time-based) granted in fiscal 2018 have voting rights but are not eligible to receive cash dividends prior to vesting.
The following table sets forth information relating to grants of plan-based awards during the fiscal year ended March 3, 2018 included in the “Summary Compensation Table for the Fiscal Years Ended March 3, 2018, February 25, 2017, and February 27, 2016.”
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NAME | | GRANT
DATE | | ESTIMATED FUTURE PAYOUTS UNDERNON-EQUITY INCENTIVE PLAN AWARDS (2) | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS (3) | | ALL OTHER
STOCK
AWARDS:
NUMBER
OF SHARES
OF STOCK
OR UNITS (#) | | ALL OTHER
OPTION
AWARDS:
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS (#) | | EXERCISE
OR BASE
PRICE OF
OPTION
AWARDS
($/Share) | | GRANT
DATE FAIR
VALUE OF
STOCK
AND
OPTION
AWARDS (4) ($) | | | | THRESHOLD ($) | | TARGET ($) | | MAXIMUM ($) | | THRESHOLD (#) | | TARGET (#) | | MAXIMUM (#) | | | | | Alasdair B. James (appointed May 1, 2017) | | | | 05/02/2017 | | | | $ | 250,000 | | | | $ | 833,333 | | | | $ | 1,666,667 | | | | | | | | | | N/A | | | | | | | | | | | | | | | N/A | | | | | N/A | | | | | N/A | | | | | | 05/02/2017 | | | | | | | | | | | | | | | | | | | | 48,352 | | | | | 107,450 | | | | | 236,390 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 358,883 | | | | | | 05/02/2017 | | | | | | | | | | | | | | | | | | | | 48,352 | | | | | 107,450 | | | | | 236,390 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 358,883 | | | | | | 05/02/2017 | | | | | | | | | | | | | | | | | | | | | | | | | N/A | | | | | | | | | | 71,633 | | | | | N/A | | | | | N/A | | | | $ | 478,508 | | | | | | 05/02/2017 | | | | | | | | | | | | | | | | | | | | | | | | | N/A | | | | | | | | | | 71,633 | | | | | N/A | | | | | N/A | | | | $ | 478,508 | | | | | | 05/02/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 277,220 | | | | $ | 6.68 | | | | $ | 892,648 | | | | | | 05/02/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 33,749 | | | | $ | 6.68 | | | | $ | 108,672 | | Terry E. London (1) | | | | 05/01/2017 | | | | | | | | | | | | | | | | | | | | | | | | | N/A | | | | | | | | | | 142,857 | | | | | N/A | | | | | N/A | | | | $ | 939,999 | | (January 1, 2017 through April 30, 2017) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nancy A. Walsh (1) | | | | 01/25/2018 | | | | | | | | | | | | | | | | | | | | | | | | | N/A | | | | | | | | | | 182,481 | | | | | N/A | | | | | N/A | | | | $ | 671,530 | | (appointed January 25, 2018) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jeffrey N. Boyer (resigned October 3, 2017) | | | | 04/06/2017 | | | | $ | 67,969 | | | | $ | 226,563 | | | | $ | 453,125 | | | | | | | | | | N/A | | | | | | | | | | | | | | | N/A | | | | | N/A | | | | | N/A | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | 10,271 | | | | | 22,825 | | | | | 50,215 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 75,212 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | 10,272 | | | | | 22,827 | | | | | 50,219 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 75,205 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | N/A | | | | | | | | | | 30,434 | | | | | N/A | | | | | N/A | | | | $ | 200,560 | | Darla D. Ramirez (October 4, 2017 through January 24, 2018) | | | | 04/06/2017 | | | | $ | 21,259 | | | | $ | 70,863 | | | | $ | 141,725 | | | | | | | | | | N/A | | | | | | | | | | | | | | | N/A | | | | | N/A | | | | | N/A | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | 1,229 | | | | | 2,732 | | | | | 6,010 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 9,002 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | 1,229 | | | | | 2,732 | | | | | 6,010 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 9,002 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | N/A | | | | | | | | | | 5,464 | | | | | N/A | | | | | N/A | | | | $ | 36,008 | | Catherine David (resigned May 1, 2018) | | | | 04/06/2017 | | | | $ | 101,250 | | | | $ | 337,500 | | | | $ | 675,000 | | | | | | | | | | N/A | | | | | | | | | | | | | | | N/A | | | | | N/A | | | | | N/A | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | 8,804 | | | | | 19,565 | | | | | 43,043 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 64,463 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | 8,804 | | | | | 19,566 | | | | | 43,045 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 64,470 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | N/A | | | | | | | | | | 26,086 | | | | | N/A | | | | | N/A | | | | $ | 171,907 | | Michael R. Benkel | | | | 04/06/2017 | | | | $ | 81,000 | | | | $ | 270,000 | | | | $ | 540,000 | | | | | | | | | | N/A | | | | | | | | | | | | | | | N/A | | | | | N/A | | | | | N/A | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | 7,042 | | | | | 15,651 | | | | | 34,432 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 51,567 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | 7,043 | | | | | 15,653 | | | | | 34,436 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 51,573 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | N/A | | | | | | | | | | 20,869 | | | | | N/A | | | | | N/A | | | | $ | 137,527 | | Bhargav J. Shah (appointed August 7, 2017) | | | | 08/08/2017 | | | | $ | 55,781 | | | | $ | 185,938 | | | | $ | 371,875 | | | | | | | | | | N/A | | | | | | | | | | | | | | | N/A | | | | | N/A | | | | | N/A | | | | | | 08/08/2017 | | | | | | | | | | | | | | | | | | | | 12,338 | | | | | 27,419 | | | | | 60,321 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 63,061 | | | | | | 08/08/2017 | | | | | | | | | | | | | | | | | | | | 12,339 | | | | | 27,420 | | | | | 60,324 | | | | | | | | | | N/A | | | | | N/A | | | | $ | 63,066 | | | | | | 08/08/2017 | | | | | | | | | | | | | | | | | | | | | | | | | N/A | | | | | | | | | | 36,558 | | | | | N/A | | | | | N/A | | | | $ | 168,167 | |
(1) | | Mr. London and Ms. Walsh were not eligible to participate in the short-term incentive program. |
(2) | | These columns show the potential value of the payout for each NEO under the annual short-term incentive cash award described above (grant date April 6, 2017, other than Mr. James whose grant date was May 2, 2017 and Mr. Shah whose grant date was August 8, 2017) if the threshold, target or maximum amount of the Profit Goal and merchandise margin dollars goal for fiscal 2018 was met. Mr. Boyer departed on October 3, 2017 and was not eligible to receive a payout. The calculations for the short-term incentives are based on the NEOs’ fiscal 2018 annual base salary. The fiscal 2018 annual base salary in effect for incentive cash award calculations for Mr. James was $1,000,000; for Mr. Boyer was $500,000 for the period February 26, 2017 through May 6, 2017 and $525,000 for the period May 7, 2017 through October 3, 2017; for Ms. Ramirez was $221,000 for the period February 26, 2017 through May 6, 2017, $228,500 for the period May 7, 2017 through September 30, 2017 and $250,000 for the period October 1, 2017 through March 3, 2018; for Ms. David was $450,000; for Mr. Benkel was $360,000; and for Mr. Shah $425,000. The Realized Profit and merchandise margin dollars for fiscal 2018 were below the threshold set for Fiscal 2018 and, as a result, no fiscal 2018 short-term incentives were earned. |
| | | 42 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
(3) | | These columns show the potential number of shares that will vest for each NEO (other than Mr. London and Ms. Walsh) under the Profit Goal performance-based shares awarded if the threshold, target, or maximum amount of the fiscal 2018-2020 Profit Goal is met. These columns also show the potential number of shares that will vest under the ROIC performance-based shares awarded if the threshold, target, or maximum three-year average ROIC is met. Both the Profit Goal and the ROIC performance-based shares are subject to the TSR Modifier. The effect of the increase or decrease related to the TSR Modifier is included in the threshold and maximum columns above. |
(4) | | This column represents the aggregate grant date fair value of performance-based and time-based restricted stock awarded during the fiscal year, computed in accordance with FASB ASC Topic 718. Refer to footnote 3 of the Summary Compensation Table for additional information. |
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 43 |
Outstanding Equity Awards Table for the Fiscal Year Ended March 3, 2018
The following table provides information on the current outstanding stock option and unvested restricted stock awards held by each NEO as of the end of fiscal 2018. Market value was determined using the closing price of Pier 1 Imports common stock on the date of $3.16 (the NYSEgrant. If the date of grant occurs on a day when Pier 1 Imports common stock is not traded, then the closing price on March 2, 2018, which was the last trading day before the date of grant is used. For these awards, the closing price on the date of grant for fiscal 2018)2019 awards was: for Ms. Bachelder, $2.97 and $0.31; for Mr. James, Ms. Walsh, Mr. Savage, and Mr. Haley, $2.38; for Mr. Bostrom, $0.87; and for Ms. Cook, $2.38 and $3.06. The amounts shown exclude the impact of forfeitures related to service-based vesting conditions.
|
| For performance-based awards, the grant date fair value is based on the probable outcome of Pier 1 Imports achieving performance thresholds, except for Mr. Savage’s award, which is shown at target. The amounts in the table assume thresholds are met and the threshold number of shares awarded will vest, or target for Mr. Savage. If the grant date fair value associated with all performance-based awards issued in fiscal 2019 had been valued at maximum performance, the total grant date fair value of stock awards reported for fiscal 2019 would have been: for Ms. Bachelder, no change; Mr. James, $1,785,001; for Ms. Walsh, $746,451; for Mr. Savage, $545,487; for Mr. Haley, $335,902; for Mr. Bostrom, no change, and for Ms. Cook, $804,145. |
(4) | This column reflects annual cash awards earned under the short-term incentive program. No short-term incentive cash awards were earned during fiscal years 2019 and 2018. |
(5) | See Fiscal 2019 All Other Compensation table below. |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 37
The following table describes each component of All Other Compensation for fiscal 2019. | | | | | | | | FISCAL 2019 ALL OTHER COMPENSATION | | | | | | | | | | | | | | | | | NAME | PAYMENTS RELATING TO EMPLOYEE SAVINGS PLANS (1) | DISABILITY INSURANCE PREMIUMS (2) | LIFE INSURANCE PREMIUMS (3) | SEVERANCE (4) | RELOCATION (5) | OTHER BENEFITS (6) | TOTAL ALL OTHER COMPENSATION | | | | | | | | | | | | | | | | | Cheryl A. Bachelder (appointed December 18, 2018) | - | $ 840 | $ 274 | - | - | $106,917 | $108,031 | | | | | | | | | | | | | | | | | Alasdair B. James (resigned December 18, 2018) | - | $3,192 | $ 685 | $184,615 | $ 79,114 | - | $267,606 | | | | | | | | | | | | | | | | | Nancy A. Walsh (departed April 17, 2019) | - | $4,917 | $2,322 | - | $195,268 | - | $202,507 | | | | | | | | | | | | | | | | | William H. Savage | $13,392 | $4,778 | $2,322 | - | $108,764 | - | $129,256 | | | | | | | | | | | | | | | | | Mark R. Haley | $23,510 | $2,567 | $ 793 | - | - | - | $ 26,870 | | | | | | | | | | | | | | | | | Robert E. Bostrom (appointed January 23, 2019) | - | $ 647 | - | - | $100,000 | - | $100,647 | | | | | | | | | | | | | | | | | Kelly N. Cook (resigned February 19, 2019) | $18,391 | $3,788 | $1,051 | $ 5,192 | $ 42,757 | - | $ 71,179 | | | | | | | | |
(1) | This column reports Pier 1 Imports’ aggregate matching and employer discretionary contributions to the NEOs’ 401(k) savings account, Deferred Compensation Plan account and SPP account. Those contributions are set forth in the Fiscal 2019 Matching Contributions table below. |
(2) | This column reports premiums paid on behalf of the NEOs for supplemental disability insurance coverage. |
(3) | This column reports premiums paid on behalf of the NEOs for basic term life insurance. |
(4) | This column reports severance paid pursuant to executive agreements. Future severance payments are subject to continued compliance with non-competition and other covenants. |
(5) | This column reports reimbursements for moving and relocation expenses. Amounts shown include gross ups for tax purposes pursuant to our relocation plan in the amounts of $37,178 for Mr. James; $79,973 for Ms. Walsh; $43,441 for Mr. Savage; and $15,382 for Ms. Cook. |
(6) | Perquisites and personal benefits, if any, for each NEO, which are less than $10,000 in the aggregate, are not shown. For Ms. Bachelder, amount consists of director retainers earned in fiscal 2019 prior to her appointment as interim chief executive officer. |
The following table describes aggregate matching and employer discretionary contributions to the NEOs’ 401(k) savings account, Deferred Compensation Plan account and SPP account. | | | | | FISCAL 2019 MATCHING CONTRIBUTIONS | | | | | | NAME | 401(k) | DCP | SPP | TOTAL | | | | | | | | | | | Cheryl A. Bachelder (appointed December 18, 2018) | - | - | - | - | | | | | | | | | | | Alasdair B. James (resigned December 18, 2018) | - | - | - | - | | | | | | | | | | | Nancy A. Walsh (departed April 17, 2019) | - | - | - | - | | | | | | | | | | | William H. Savage | $13,392 | - | - | $13,392 | | | | | | | | | | | Mark R. Haley | $13,298 | $7,536 | $2,676 | $23.510 | | | | | | | | | | | Robert E. Bostrom (appointed January 23, 2019) | - | - | - | - | | | | | | | | | | | Kelly N. Cook (resigned February 19, 2019) | $ 9,720 | $8,671 | - | $18,391 | | | | | |
Pier 1 Imports’ 401(k) plan and SPP are broad based plans available to all eligible employees on a non-discriminatory basis.
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 38
Grants of Plan-Based Awards for the Fiscal Year Ended March 2, 2019 We granted short-term incentive cash awards to the NEOs for fiscal 2019 pursuant to the Pier 1 Imports, Inc. 2015 Stock Incentive Plan as described in Compensation Discussion and Analysis – Analysis of Fiscal 2019 Compensation – Short-Term Incentive Program above. We granted long-term incentive awards to NEOs as described in Compensation Discussion and Analysis –Analysis of Fiscal 2019 Compensation – Long-Term Incentive Program. Those grants were made pursuant to the Pier 1 Imports, Inc. 2015 Stock Incentive Plan with the exception of a time-based award granted to each of Ms. Bachelder and Mr. Bostrom, which were granted as inducement grants outside of the 2015 Stock Incentive Plan. The restricted stock awards (performance-based and time-based) granted in fiscal 2019 have voting rights but are not eligible to receive cash dividends prior to vesting. The following table sets forth information relating to grants of plan-based awards during the fiscal year ended March 2, 2019 included in the “Summary Compensation Table for the Fiscal Years Ended March 2, 2019, March 3, 2018, and February 25, 2017.” | | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS (2) | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS (3) | | | NAME | GRANT DATE | THRESHOLD ($) | TARGET ($) | MAXIMUM ($) | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS (4) (#) | GRANT DATE FAIR VALUE OF STOCK AWARDS (5) ($) | Cheryl A. Bachelder (1) | 06/26/2018 | | | | | | | 36,363 | $107,998 | (appointed December 18, 2018) | 12/28/2018 | | | | | | | 729,927 | $226,277 | Alasdair B. James | 04/30/2018 | $375,000 | $1,250,000 | $2,500,000 | | | | | | (resigned December 18, 2018) | 06/29/2018 | | | | - | 83,333 | 83,333 | | - | | 06/29/2018 | | | | 62,499 | 83,333 | 208,333 | | $148,748 | | 06/29/2018 | | | | 62,500 | 83,333 | 208,334 | | $148,750 | | 06/29/2018 | | | | | | | 250,000 | $595,000 | | 07/11/2018 | $500,000 | $1,000,000 | $1,500,000 (6) | | | | | | Nancy A. Walsh | 04/30/2018 | $219,344 | $ 731,147 | $1,462,293 | | | | | | (departed April 17, 2019) | 06/29/2018 | | | | - | 34,848 | 34,848 | | - | | 06/29/2018 | | | | 26,136 | 34,848 | 87,120 | | $ 62,204 | | 06/29/2018 | | | | 26,136 | 34,848 | 87,122 | | $ 62,204 | | 06/29/2018 | | | | | | | 104,545 | $248,817 | William H. Savage | 04/30/2018 | $101,250 | $ 337,500 | $ 675,000 | | | | | | | 06/29/2018 | | | | - | 73,689 | 147,378 | | $175,380 (3) | | 06/29/2018 | | | | | | | 81,818 | $194,727 | Mark R. Haley | 04/30/2018 | $ 78,015 | $ 260,052 | $ 520,103 | | | | | | | 06/29/2018 | | | | - | 15,681 | 15,681 | | - | | 06/29/2018 | | | | 11,761 | 15,681 | 39,204 | | $ 27,991 | | 06/29/2018 | | | | 11,761 | 15,682 | 39,205 | | $ 27,991 | | 06/29/2018 | | | | | | | 47,045 | $111,967 | Robert E. Bostrom | 01/23/2019 | $ 24,143 | $ 80,475 | $ 160,950 | | | | | | (appointed January 23, 2019) | 01/23/2019 | | | | | | | 657,894 | $572,368 | Kelly N. Cook | 04/30/2019 | $ 93,998 | $ 313,326 | $ 626,653 | | | | | | (resigned February 19, 2019) | 06/29/2018 | | | | - | 40,909 | 40,909 | | - | | 06/29/2018 | | | | 30,681 | 40.908 | 102,272 | | $ 73,021 | | 06/29/2018 | | | | 30,681 | 40,909 | 102,273 | | $ 73,021 | | 03/19/2018 | | | | | | | 71,884 | $219,965 |
(1) | Ms. Bachelder was not eligible to participate in the short-term incentive program. The RSUs granted to Ms. Bachelder on June 26, 2018 were part of her compensation as a non-employee director. |
(2) | These columns show the potential value of the payout for each NEO under the annual short-term incentive cash award described above if the threshold, target or maximum Operating Cash EBITDA and Net Sales goals for fiscal 2019 were met. Mr. James, Ms. Walsh and Ms. Cook were not eligible to receive a payout due to their departure dates. The calculations for the short-term incentives are based on the NEOs’ fiscal 2019 annual base salary. The fiscal 2019 annual base salary in effect for incentive cash award calculations for Mr. James was $1,000,000; for Ms. Walsh was $575,000 for the period of March 4, 2018 to December 1, 2018 and $615,000 for the period of December 2, 2018 to March 2, 2019; for Mr. Savage was $450,000; for Mr. Haley was $300,000 for the period of March 4, 2018 to April 28, 2018, $345,000 for the period of April 29, 2018 to December 1, 2018, and $380,000 for the period of December 2, 2018 through March 2, 2019; for Mr. Bostrom was $615,000; and for Ms. Cook was $450,000. The Operating Cash EBITDA and Net Sales goals for fiscal 2019 were below the threshold set for fiscal 2019 and, as a result, no fiscal 2019 short-term incentives were earned. |
(3) | These columns show the potential number of performance-based shares that will vest for each NEO (other than Ms. Bachelder and Mr. Bostrom) if the threshold, target, or maximum amount of the Earnings Per Share as adjusted performance goal for fiscal years 2019, 2020 and 2021 is met, except for Mr. Savage whose sourcing-based performance grant is shown at target. For fiscal 2019, there were no threshold or maximum payout targets established for the EPS as adjusted performance metric. |
(4) | This column reflects time-based restricted stock that vests in substantially equal installments over a three-year period. |
(5) | This column represents the aggregate grant date fair value of performance-based and time-based restricted stock awarded during the fiscal year, computed in accordance with FASB ASC Topic 718. Refer to footnote 3 of the Summary Compensation Table for additional information. |
(6) | Represents performance-based long-term incentive award granted to Mr. James payable in cash based on the achievement of EPS as adjusted for the fiscal year beginning on and including March 1, 2020 and ending on and including February 27, 2021. This award was forfeited upon Mr. James’ departure from the Company. |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 39
Outstanding Equity Awards Table for the Fiscal Year Ended March 2, 2019 The following table provides information on the current outstanding unvested restricted stock awards and restricted stock units held by each NEO as of the end of fiscal 2019. Market value was determined using the closing price of Pier 1 Imports common stock of $1.42 (the NYSE closing price on March 1, 2019, which was the last trading day of fiscal 2019). | | STOCK AWARDS / UNITS | NAME | GRANT DATE (1) | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (2) (#) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (4) (#) | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) | Cheryl A. Bachelder (appointed December 18, 2018) | 06/26/2018 | 36,363 | $ 51,635 (3) | | | | 12/28/2018 | 729,927 | $1,036,496 | | | Alasdair B. James (resigned December 18, 2018) | N/A | N/A | N/A | N/A | N/A | Nancy A. Walsh (5) (departed April 17, 2019) | 01/25/2018 | 122,263 | $ 173,613 | | | | 06/29/2018 | 104,545 | $ 148,454 | | | | 06/29/2018 | | | 209,090 | $296,908 | William H. Savage | 12/07/2017 | 32,915 | $ 46,739 | | | | 06/29/2018 | 81,818 | $ 116,182 | | | | 06/29/2018 | | | 147,378 | $209,277 | Mark R. Haley | 04/15/2016 | 3,824 | $ 5,430 | | | | 04/14/2017 | 7,613 | $ 10,810 | | | | 06/29/2018 | 47,045 | $ 66,804 | | | | 05/24/2016 | | | 18,548 | $ 26,338 | | 04/14/2017 | | | 18,746 | $ 26,619 | | 06/29/2018 | | | 94,090 | $133,608 | | 05/24/2016 | | | 18,552 | $ 26,344 | | 04/14/2017 | | | 18,748 | $ 26,622 | Robert E. Bostrom (appointed January 23, 2019) | 01/23/2019 | 657,894 | $ 934,209 | | | Kelley N. Cook (resigned February 19, 2019) | N/A | N/A | N/A | N/A | N/A |
(1) | For better understanding, this column has been included showing the accounting award date of the restricted stock awards and restricted stock units. |
(2) | Time-based restricted stock awards and restricted stock units to the NEOs vest according to the following schedule: |
| | GRANT DATE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NAME | | GRANT
DATE (1) | | OPTION AWARDS | | STOCK AWARDS | | | | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#) EXERCISABLE | | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#) UNEXERCISABLE | | EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
UNEARNED
OPTIONS (#) | | OPTION
EXERCISE
PRICE ($) | | OPTION
EXPIRATION
DATE | | NUMBER OF
SHARES OR
UNITS OF
STOCK
THAT HAVE
NOT
VESTED (3)
(#) | | MARKET
VALUE OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED ($) | | EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT HAVE
NOT
VESTED (4)
(#) | | EQUITY
INCENTIVE
PLAN
AWARDS:
MARKET OR
PAYOUT
VALUE OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT HAVE
NOT VESTED ($) | Alasdair B. James (appointed May 1, 2017) | | | | 05/02/2017 | | | | | | | | | | 310,969 | (2) | | | | | | | | | $6.68 | | | | | 05/02/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | 05/02/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 143,266 | | | | | $452,721 | | | | | | | | | | | | | | | | 05/02/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 236,390 | | | | | $746,992 | | | | | | 05/02/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 236,390 | | | | | $746,992 | | Terry E. London (January 1, 2017 through April 30, 2017) | | | | 05/01/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 142,857 | | | | | $451,428 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nancy A. Walsh (appointed January 25, 2018) | | | | 01/25/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 182,481 | | | | | $576,640 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jeffrey N. Boyer (resigned October 3, 2017) | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Darla D. Ramirez (October 4, 2017 January 24, 2018) | | | | 04/10/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 915 | | | | | $ 2,891 | | | | | | | | | | | | | | | | 04/15/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,702 | | | | | $ 11,698 | | | | | | | | | | | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,464 | | | | | $ 17,266 | | | | | | | | | | | | | | | | 05/11/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,302 | | | | | $ 13,594 | | | | | | 05/24/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,076 | | | | | $ 19,200 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,010 | | | | | $ 18,992 | | | | | | 05/11/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,078 | | | | | $ 3,406 | | | | | | 05/24/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,078 | | | | | $ 19,206 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,010 | | | | | $ 18,992 | | Catherine David (resigned May 1, 2018) | | | | 04/10/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,640 | | | | | $ 14,662 | | | | | | | | | | | | | | | | 04/15/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18,273 | | | | | $ 57,743 | | | | | | | | | | | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 26,086 | | | | | $ 82,432 | | | | | | | | | | | | | | | | 10/16/2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 40,760 | | | | | $128,802 | | | | | | | | | | | | | | | | 05/11/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 34,116 | | | | | $107,807 | | | | | | 05/24/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 44,998 | | | | | $142,194 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 43,043 | | | | | $136,016 | | | | | | 05/11/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,824 | | | | | $ 21,564 | | | | | | 05/24/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 45,001 | | | | | $142,203 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 43,045 | | | | | $136,022 | | Michael R. Benkel | | | | 09/15/2008 | | | | | 10,000 | | | | | | | | | | | | | | | $4.24 | | | | | 09/15/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | 04/10/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,713 | | | | | $ 11,733 | | | | | | | | | | | | | | | | 04/15/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 14,619 | | | | | $ 46,196 | | | | | | | | | | | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 20,869 | | | | | $ 65,946 | | | | | | | | | | | | | | | | 10/16/2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 40,760 | | | | | $128,802 | | | | | | | | | | | | | | | | 05/11/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 27,292 | | | | | $ 86,243 | | | | | | 05/24/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 35,998 | | | | | $113,754 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 34,432 | | | | | $108,805 | | | | | | 05/11/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,460 | | | | | $ 17,254 | | | | | | 05/24/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 36,000 | | | | | $113,760 | | | | | | 04/14/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 34,436 | | | | | $108,818 | | Bhargav J. Shah (appointed August 7, 2017) | | | | 08/08/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 36,558 | | | | | $115,523 | | | | | | | | | | | | | | | | 08/08/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 60,321 | | | | | $190,614 | | | | | | 08/08/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 60,324 | | | | | $190,624 | |
| (1) | | For better understanding of this table, an additional column has been included showing the accounting award date of the stock options and restricted stock awards. |
(2) | | Options granted to Mr. James on May 2, 2017 vest 25% on the third and fourth anniversaries of the grant date and 50% on the fifth anniversary. |
(3) | | Time-based restricted stock awards to the NEOs vest according to the following schedule: |
VESTING | | | GRANT DATE
| | VESTING
| 04/10/2015, 04/15/2016, 04/14/2017, 12/07/2017,
08/08/2017 and 01/25/2018 and 06/29/2018
| | 33%, 33%, 33% and 34%, respectively, on each anniversary of the grant date provided that the participant is employed on the vesting date. | 06/26/2018 | 100% on June 19, 2019, the date of the 2019 annual meeting of shareholders. | 12/28/2018 and 01/23/2019 | one-third on each of the first, second and third anniversaries of the date of grant, provided that the participant is employed on the vesting date. | 10/16/2014
| | 50% on October 16, 2019 and 50% on October 16, 2020 provided that the participant is employed on the vesting date.
|
(3) | RSUs granted to Ms. Bachelder on June 26, 2018 were part of her non-employee director compensation. | 05/02/2017
| | 40%, 40%, 20%, respectively, on each anniversary of the grant date provided that the participant is serving as a director on the vesting date.
|
(4) | Performance-based restricted stock awards to the NEOs vest according to the following schedule, provided that the participant is employed on the vesting date, which is the date of filing of Pier 1 Imports’ Annual Report on Form 10-K for the applicable fiscal year for Profit Goal, ROIC and EPS, as adjusted performance-based shares. | 05/02/2017
| | 71,633 shares vest 33%, 33% and 34%, respectively, on each anniversary of the grant date provided that the participant is employed on the vesting date.
| 05/02/2017
| | 71,633 shares vest on May 2, 2020 (three-year cliff vest) provided that the participant is employed on the vesting date.
|
GRANT
DATE | VESTING | PERFORMANCE MEASURE | MEASUREMENT PERIODS |
| | | 44 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
05/24/2016
| COMPENSATION
| 100% (cliff vest) | Profit Goal | Fiscal 2017-2019 (cumulative) |
(4) | Performance-based restricted stock awards to the NEOs vest according to the following schedule, provided that the participant is employed on the vesting date, which is the date of filing of Pier 1 Imports’ Annual Report on Form10-K for the applicable fiscal year for Profit Goal performance-based shares and is within 30 days of the end of the measurement period for TSR performance-based shares.04/14/2017 | 100% (cliff vest) | Profit Goal | Fiscal 2018-2020 (cumulative) | 05/24/2016 | 100% (cliff vest) | ROIC | Fiscal 2017-2019 (three-year average) |
04/14/2017 | 100% (cliff vest) | ROIC | Fiscal 2018-2020 (three-year average) | 06/29/2018 | 100% (cliff vest) | EPS, as adjusted | Fiscal 2019-2021 (banked yearly) |
Number of shares for the performance-based grants shown in the table above is the maximum amount. The threshold, target and maximum amount of performance-based shares for fiscal 2019 are shown above in the table included under the caption “Grants of Plan-Based Awards for the Fiscal Year Ended March 2, 2019.” (5) | Ms. Walsh’s unvested performance-based and time-based restricted stock were forfeited upon her departure effective April 17, 2019. |
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 40
Stock Vested Table for the Fiscal Year Ended March 2, 2019 The following table provides information for each NEO about the number of shares for which forfeiture restrictions lapsed upon the vesting of restricted stock awards and the value realized. In each event the value realized is before payment of any applicable withholding tax and broker commissions. | | | | | | | | | | GRANT
DATE | STOCK AWARDS (1) | NAME | NUMBER OF SHARES ACQUIRED ON VESTING (#) | VALUE REALIZED ON VESTING ($) | Cheryl A. Bachelder (appointed December 18, 2018) | - | - | Alasdair B. James (resigned December 18, 2018) | 95,271 | $130,026 | Nancy A. Walsh (departed April 17, 2019) | 60,218 | $ 55,401 | William H. Savage | 16,211 | $ 20,588 | Mark R. Haley | 8,480 | $ 28,731 | Robert E. Bostrom (appointed January 23, 2019) | - | - | Kelly N. Cook (resigned February 19, 2019) | - | - |
(1) | | VESTING
| | PERFORMANCE
MEASURE
| | MEASUREMENT
PERIODS
| 05/11/2015
| | 100% (cliff vest)
| | Profit Goal
| | Fiscal 2016-2018 (cumulative)
| 05/24/2016
| | 100% (cliff vest)
| | Profit Goal
| | Fiscal 2017-2019 (cumulative)
| 04/14/2017, 05/02/2017
and 08/08/2017
| | 100% (cliff vest) | | Profit Goal | | Fiscal 2018-2020 (cumulative) | 05/11/2015
| | 100% (cliff vest)
| | TSR v. peers
| | End of fiscal 2018
| 05/24/2016
| | 100% (cliff vest)
| | ROIC
| | Fiscal 2017-2019 (three-year average)
| 04/14/2017, 05/02/2017
and 08/08/2017
| | 100% (cliff vest) | | ROIC | | Fiscal 2018-2020 (three-year average) |
Number of shares shown for TSR performance-based shares is the maximum amount. Number of shares for the 05/11/2015, 05/24/2016, 04/14/2017, 05/02/2017 and 08/08/2017 Profit Goal performance-based shares and the 05/24/2016, 04/14/2017, 05/02/2017 and 08/08/2017 ROIC performance-based shares is the maximum amount. The increase related to the TSR Modifier is included in the maximum amount for the Profit Goal and ROIC performance-based shares. The threshold, target and maximum amount of performance-based shares for fiscal 2018 are shown above in the table included under the caption “Grants of Plan-Based Awards for the Fiscal Year ended March 3, 2018.”
Option Exercises and Stock Vested Table for the Fiscal Year Ended March 3, 2018
The following table provides information for each NEO about the number of shares for which forfeiture restrictions lapsed upon the vesting of restricted stock awards and the value realized. In each event the value realized is before payment of any applicable withholding tax and broker commissions.
| | | | | | | | | | | | | | | | OPTION AWARDS | | STOCK AWARDS(1) | | | NAME | | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | | VALUE REALIZED ON EXERCISE ($) | | NUMBER OF SHARES ACQUIRED ON VESTING (#) | | | VALUE REALIZED ON VESTING ($) | | Alasdair B. James (appointed May 1, 2017) | | 0 | | – | | | 0 | | | | – | | Terry E. London (January 1, 2017 through April 30, 2017) | | 0 | | – | | | 0 | | | | – | | Nancy A. Walsh (appointed January 25, 2018) | | 0 | | – | | | 0 | | | | – | | Jeffrey N. Boyer (resigned October 3, 2017) | | 0 | | – | | | 15,208 | | | | $ 91,001 | | Darla D. Ramirez (October 4, 2017 through January 24, 2018) | | 0 | | – | | | 3,507 | | | | $ 24,096 | | Catherine David (resigned May 1, 2018) | | 0 | | – | | | 18,684 | | | | $128,770 | | Michael R. Benkel | | 0 | | – | | | 15,140 | | | | $104,396 | | Bhargav J. Shah (appointed January 25, 2018) | | 0 | | – | | | 0 | | | | – | |
(1) | | The value realized on the vesting of restricted stock awards is equal to the closing market price of Pier 1 Imports common stock on the date of vesting (or the last trading day before vesting, if applicable) times the number of shares acquired upon vesting. The Number of Shares Acquired on Vesting and Value Realized on Vesting columns include shares that were withheld at the time of vesting to satisfy tax withholding requirements. |
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 45 |
Non-Qualified Deferred Compensation Table for the Fiscal Year Ended March 3, 2018
The following table shows the value as of the fiscal year ended March 3, 2018 of each NEO’s total benefit, other than Mr. London and Ms. Walsh, under thenon-qualified deferred compensation plans of Pier 1 Imports in which the NEO participates. Mr. London and Ms. Walsh did not participate in thenon-qualified deferred compensation plans during fiscal 2018. Ournon-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, we 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. 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 equal to a daily average Moody’s Corporate Bond Index plus 1% until the account balance is distributed to the participant. |
● | | Pier 1 Imports, Inc. Deferred Compensation Plan – Effective January 1, 2011, the Pier 1 Imports, Inc. Deferred Compensation Plan (“DCP”) was adopted. The DCP permits select members of management and highly compensated employees of Pier 1 Imports to defer up to 50% of their compensation (generallyW-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. Historically, matching contributions and the earnings on those contributions were subject to the same vesting requirements as Pier 1 Imports’ 401(k) retirement plan regardless of whether the participant actually participated 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. As of January 1, 2018, the vesting schedule for matching contributions to the DCP changed to a three-year cliff vesting schedule based on years of service as defined under the DCP. |
| | We may credit to any participant’s account an amount we determine in our sole and complete discretion. A participant is vested in a discretionary contribution in accordance with a vesting schedule, which could be time-based, performance-based, or both, as determined by Pier 1 Imports. If vesting is time-based, then no vesting can occur for a period of twelve months from the date the discretionary contribution is credited to the participant’s account. If vesting is performance-based, then the performance period cannot end on or before the date that is thesix-month anniversary of the date the discretionary contribution is credited to the participant’s account. Subject to plan rules, participants may elect to have their discretionary contribution paid to them upon vesting or after separation from Pier 1 Imports, provided such separation occurs after vesting. |
| | Each participant may allocate their deferral amounts and Pier 1 Imports’ matching contributions and any discretionary contributions among different deemed investment crediting options, which cover various asset classes. Participant accounts are credited with the same earnings or losses as the deemed investment crediting options and are subject to the same investment risk as an actual investment in the deemed investment crediting options. Subject to plan rules, participants may elect to have their deferral account balance paid to them while employed or after separation from Pier 1 Imports; provided, however, that upon separation of employment, any unpaid amounts elected to be paid while employed will be paid after separation of employment. Vested matching account balances are distributed to participants only after separation from Pier 1 Imports. |
| | | 46 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
Trusts have been established for the purpose of setting aside funds to be used to settle obligations under thenon-qualified deferred compensation plans described above. Refer to note 5 to the Pier 1 Imports, Inc. consolidated financial statements in the 2018 Form10-K for additional information about the trust assets.
| | | | | | | | | | | | | | | | | | | | | | | | | | NAME | | EXECUTIVE CONTRIBUTIONS IN LAST FISCAL YEAR(1) ($) | | REGISTRANT CONTRIBUTIONS IN LAST FISCAL YEAR(2) ($) | | AGGREGATE EARNINGS IN LAST FISCAL YEAR ($) | | AGGREGATE WITHDRAWALS / DISTRIBUTIONS ($) | | AGGREGATE BALANCE AT LAST FISCAL YEAR-END(5) ($) | Alasdair B. James (appointed May 1, 2017) | | | | | | | | | | | | | | | | | | | | | | | | | | DCP | | | | $ 26,923 | | | | | $16,154 | | | | | $ 2,457 | (3) | | | | $0 | | | | | $ 45,534 | | Terry E. London (January 1, 2017 through April 30, 2017) | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | Nancy A. Walsh (appointed January 25, 2018) | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | Jeffrey N. Boyer (resigned October 3, 2017) | | | | | | | | | | | | | | | | | | | | | | | | | | DCP | | | | $ 16,620 | | | | | $ 9,972 | | | | | $ 43,936 | (3) | | | | $0 | | | | | $ 268,731 | (6) | Darla D. Ramirez (October 4, 2017 through January 24, 2018) | | | | | | | | | | | | | | | | | | | | | | | | | | BRP II | | | | N/A | | | | | N/A | | | | | $ 520 | (4) | | | | $0 | | | | | $ 11,178 | | DCP | | | | $ 11,787 | | | | | $ 8,046 | | | | | $ 11,486 | (3) | | | | $0 | | | | | $ 157,353 | | Catherine David (resigned May 1, 2018) | | | | | | | | | | | | | | | | | | | | | | | | | | BRP II | | | | N/A | | | | | N/A | | | | | $ 7,934 | (4) | | | | $0 | | | | | $ 170,645 | | DCP | | | | $209,423 | | | | | $18,279 | | | | | $324,857 | (3) | | | | $0 | | | | | $2,305,446 | | Michael R. Benkel | | | | | | | | | | | | | | | | | | | | | | | | | | BRP II | | | | N/A | | | | | N/A | | | | | $ 2,012 | (4) | | | | $0 | | | | | $ 43,265 | | DCP | | | | $ 36,000 | | | | | $14,623 | | | | | $ 58,188 | (3) | | | | $0 | | | | | $ 429,511 | | Bhargav J. Shah (appointed August 7, 2017) | | | | | | | | | | | | | | | | | | | | | | | | | | DCP | | | | $ 2,452 | | | | | $ 1,471 | | | | | ($ 32 | )(3) | | | | $0 | | | | | $ 3,891 | |
(1) | | Reflects participation in the DCP by each NEO during fiscal 2018. Executive contribution amounts are included in each NEO’s salary amount in the table included in the Summary Compensation Table for the Fiscal Years Ended March 3, 2018, February 25, 2017, and February 27, 2016 above. Mr. London and Ms. Walsh did not participate in the DCP. |
(2) | | Reflects Pier 1 Imports’ matching and any discretionary contributions credited to the DCP account of each NEO during fiscal 2018. These amounts are included as 2018 compensation in the All Other Compensation column in the Summary Compensation Table for the Fiscal Years Ended March 3, 2018, February 25, 2017, and February 27, 2016 above. |
(3) | | Reflects any earnings/losses of the deemed investment crediting options held in the participant’s DCP account. |
(4) | | Reflects interest earnings on BRP II accounts during fiscal 2018. The interest earnings are the total amount of interest payments received. Messrs. James, London, Boyer and Shah and Ms. Walsh did not participate in the BRP II. |
(5) | | As of March 3, 2018, all of the NEOs that participate in BRP II are fully vested. Mr. Benkel and Mmes. David and Ramirez were fully vested in the DCP. Mr. Boyer was 40% vested on his resignation date, and Messrs. James and Shah were 20% vested in DCP matching contributions and earnings on those contributions. |
(6) | | These amounts, subject to any earnings/losses, were paid to Mr. Boyer on April 23, 2018 in connection with his resignation. |
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 47 |
Potential Payments upon Termination or Change in Control
The following table shows potential payments to the NEOs under existing agreements, plans or arrangements to which they are a party for various scenarios including a change in control or termination of employment, assuming the event occurred on March 3, 2018 and, where applicable, using the closing price of Pier 1 Imports common stock on the date of $3.16 (the NYSE closing pricevesting (or the last trading day before vesting, if applicable) times the number of shares acquired upon vesting. The Number of Shares Acquired on March 2, 2018). Potential paymentsVesting and Value Realized on Vesting columns include shares that were withheld at the time of vesting to satisfy tax withholding requirements.
|
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 41
Non-Qualified Deferred Compensation Table for the Fiscal Year Ended March 2, 2019 The following table shows the value as of the fiscal year ended March 2, 2019 of each NEO’s total benefit, other than Mses. Bachelder and Walsh and Messrs. Bostrom and Savage, under the Pier 1 Imports, Inc. Deferred Compensation Plan (“DCP”). 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. Historically, matching contributions and the earnings on those contributions were subject to the same vesting requirements as Pier 1 Imports’ 401(k) retirement plan regardless of whether the participant actually participated in the 401(k) plan. The 401(k) plan’s vesting schedule is 20% per year of service (as defined in the 401(k) 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. As of January 1, 2018, the vesting schedule for matching contributions to the DCP changed to a three-year cliff vesting schedule based on years of service as defined under the DCP. We may credit to any participant’s account an amount we determine in our sole and complete discretion. A participant is vested in a discretionary contribution in accordance with a vesting schedule, which could be time-based, performance-based, or both, as determined by Pier 1 Imports. If vesting is time-based, then no vesting can occur for a period of twelve months from the date the discretionary contribution is credited to the participant’s account. If vesting is performance-based, then the performance period cannot end on or before the date that is the six-month anniversary of the date the discretionary contribution is credited to the participant’s account. Subject to DCP rules, participants may elect to have their discretionary contribution paid to them upon vesting or after separation from Pier 1 Imports, provided such separation occurs after vesting. Each participant may allocate their deferral amounts and Pier 1 Imports’ matching contributions and any discretionary contributions among different deemed investment crediting options, which cover various asset classes. Participant accounts are credited with the same earnings or losses as the deemed investment crediting options and are subject to the same investment risk as an actual investment in the deemed investment crediting options. Subject to DCP rules, participants may elect to have their deferral account balance paid to them while employed or after separation from Pier 1 Imports; provided, however, that upon separation of employment, any unpaid amounts elected to be paid while employed will be paid after separation of employment. Vested matching account balances are distributed to participants only after separation from Pier 1 Imports. Trusts have been established for the purpose of setting aside funds to be used to settle obligations under the DCP. Refer to note 5 to the Pier 1 Imports, Inc. consolidated financial statements in the Fiscal 2019 Form 10-K for additional information about the trust assets. NAME | EXECUTIVE CONTRIBUTIONS IN FISCAL 2019 (1) ($) | REGISTRANT CONTRIBUTIONS IN FISCAL 2019 (2) ($) | AGGREGATE GAINS/LOSSES IN FISCAL 2019 (3) ($) | AGGREGATE WITHDRAWALS / DISTRIBUTIONS ($) | AGGREGATE BALANCE AT FISCAL 2019 YEAR-END (4) ($) | Cheryl A. Bachelder (appointed December 18, 2018) | | | | | | DCP | N/A | N/A | N/A | N/A | N/A | Alasdair B. James (resigned December 18, 2018) | | | | | | DCP | - | - | ($ 144) | - | $ 32,800 (5) | Nancy A. Walsh (departed April 17, 2019) | | | | | | DCP | N/A | N/A | N/A | N/A | N/A | William H. Savage | | | | | | DCP | N/A | N/A | N/A | N/A | N/A | Mark R. Haley | | | | | | DCP | $12,058 | $7,536 | ($3,884) | - | $135,543 | Robert E. Bostrom (appointed January 23, 2019) | | | | | | DCP | N/A | N/A | N/A | N/A | N/A | Kelly N. Cook (resigned February 19, 2019) | | | | | | DCP | $14,452 | $8,671 | $ 255 | - | $ 23,378 (6) |
(1) | Reflects participation in the NEOs upon termination of employment under Pier 1 Imports’non-qualified deferred compensation arrangementsDCP by each NEO during fiscal 2019. Executive contribution amounts are discussed above underincluded in each NEO’s salary amount in the caption“Non-Qualified Deferredtable included in the Summary Compensation Table for the Fiscal YearYears Ended March 3, 2018.” Mr. London was not serving as an executive officer and was not employed by Pier 1 Imports on2, 2019, March 3, 2018 and isFebruary 25, 2017 above. Ms. Bachelder, Ms. Walsh, Mr. Savage and Mr. Bostrom did not includedparticipate in the table below.DCP. |
(2) | Reflects Pier 1 Imports’ matching and any discretionary contributions credited to the DCP account of each NEO during fiscal 2019. These amounts are included as 2019 compensation in the All Other Compensation column in the Summary Compensation Table for the Fiscal Years Ended March 2, 2019, March 3, 2018 and February 25, 2017 above. |
(3) | Reflects any gains/losses of the deemed investment crediting options held in the participant’s DCP account. |
(4) | As of March 2, 2019, Mr. Boyer voluntarily terminated his employment priorJames was 20% vested, Mr. Haley was 100% vested and Ms. Cook was 0% vested in DCP matching contributions and earnings on those contributions. |
(5) | This amount reflects forfeitures of $12,590 and will be distributed subsequent to the fiscal year end, subject to any gains/losses. |
(6) | This amount, subject to any gains/losses and is not included in the table below. These disclosures are based on the terms and provisionsless forfeitures of the agreements, plans and arrangements as they existed at the end of Pier 1 Imports’ fiscal 2018$8,899 was distributed subsequent to year end.
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PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 42
Potential Payments upon Termination or Change in Control The following table shows potential payments to the NEOs under existing agreements, plans or arrangements to which they are a party for various scenarios including a change in control or termination of employment without cause or for good reason, assuming the event occurred on March 2, 2019 and, where applicable, using the closing price of Pier 1 Imports common stock of $1.42 (the NYSE closing price on March 1, 2019). Potential payments to the NEOs upon termination of employment under Pier 1 Imports’ DCP are discussed above under the caption “Non-Qualified Deferred Compensation Table for the Fiscal Year Ended March 2, 2019.” Mr. James and Ms. Cook separated from service prior to the end of the fiscal year, so amounts shown reflect actual payments received or accrued as of March 2, 2019. These disclosures are based on the terms and provisions of the agreements, plans and arrangements as they existed at the end of Pier 1 Imports’ fiscal 2019 and our interpretation of those terms and provisions at that time. One or more of the plans identified may allow the compensation committee to amend the plan or award agreements pursuant to the plan, subject in particular situations to certain restrictions. In such an event, the disclosures shown below would vary depending on the amendment or restriction. NAME | TERMINATION WITHOUT CAUSE / GOOD REASON ($) | CHANGE IN CONTROL ($) | DEATH / DISABILITY ($) | Cheryl A. Bachelder (appointed December 18, 2018) | | | | Restricted Stock Awards | | | | Time-based | $1,036,496 (3) | $1,036,496 (4) | - | Restricted Stock Units | - | $ 51,635 (4) | $51,635 (5) | Alasdair B. James (resigned December 18, 2018) | | | | Severance | $2,000,000 (1) | N/A | N/A | Restricted Stock Awards | | | | Time-based | $ 72,349 (1) | N/A | N/A | Nancy A. Walsh (departed April 17, 2019) | | | | Severance | $ 615,000 (2) | N/A | N/A | Restricted Stock Awards | | | | Time-based | - | $ 322,067 (4) | - | Performance-based | - | $ 296,908 (4) | - | William H. Savage | | | | Severance | $ 450,000 (2) | N/A | N/A | Restricted Stock Awards | | | | Time-based | - | $ 162,921 (4) | - | Performance-based | - | $ 209,277 (4) | - | Mark R. Haley | | | | Restricted Stock Awards | | | | Time-based | - | $ 83,044 (4) | - | Performance-based | - | $ 239,531 (4) | - | Robert E. Bostrom (appointed January 23, 2019) | | | | Severance | $ 615,000 (2) | N/A | N/A | Restricted Stock Awards | | | | Time-based | $ 934,209 (3) | - | - | Kelly N. Cook (resigned February 19, 2019) | | | | Severance | $ 900,000 (6) | N/A | N/A |
(1) | Pursuant to his executive severance agreement, Mr. James will receive salary continuation for 24 months following his termination, equal to two times Mr. James’ base salary in effect as of his separation from service, subject to his continued compliance with non-competition and other covenants. In addition, Mr. James received accelerated vesting of 71,633 shares of restricted stock in connection with his separation of service, which was valued based on the closing share price of $1.01 on December 18, 2018. |
(2) | Ms. Walsh, Mr. Savage and Mr. Bostrom each have an executive agreement which provides for cash severance equal to one year’s salary in the event of the executive’s termination without cause or good reason, subject to his or her continued compliance with non-competition and other covenants. In addition, the executive will receive reasonable outplacement benefits. Payment of these amounts is conditioned on the executive’s adherence to a one-year restriction on competition and solicitation. Entitlement to any unvested awards under the short-term incentive or long-term incentive plans is based on the terms of the governing plan document. Ms. Walsh left the Company effective April 17, 2019. As of May 2, 2019, the Company and Ms. Walsh had not yet finalized the terms of her separation from service with the Company. |
(3) | Under the 2006 Plan and the 2015 Plan, the compensation committee may, in its discretion, notwithstandingupon termination without cause or for good reason (as defined in the grant agreement, upon a participant’s retirementplan) fully vest any andor all Pier 1 Imports common stock awarded pursuant to restricted stock award. Currently, none of the Company’s award agreements provide for accelerated vesting upon a termination without cause or for good reason, except for Mr. Bostrom’s restricted stock award agreement. Ms. Bachelder’s restricted stock award provides for acceleration upon her non-voluntary termination of board service. |
(4) | Under the 2006 Plan and the 2015 Plan, the compensation committee may, in its discretion, upon a corporate change (as defined in the plan) fully vest any or all common stock underlying a restricted stock award. AlthoughThe fiscal 2019 form of award agreements for grants of restricted stock provide for double trigger vesting following a corporate change. The amounts shown assume the plans do 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 3, 2018, Messrs. James, Benkel and Shah and Mmes. Walsh, Ramirez and David are respectively ages 47, 49, 42 and 57, 55 and 54, therefore no amounts are included in the table for retirement. | | | | | | | NAME | | TERMINATION
WITHOUT
CAUSE / GOOD
REASON
($)
| | CHANGE IN
CONTROL
($)
| | DEATH /
DISABILITY
($)
| Alasdair B. James
(appointed May 1, 2017)
| | | | | | | Severance
| | $2,000,000(1) | | N/A | | N/A | Restricted Stock Awards
| | | | | | | Time-based
| | $ 452,721(1) | | $452,721(2) | | $452,721(5) | Performance-based
| | | | | | | Profit Goal Shares
| | $ 339,542(1) | | $339,542(2) | | $ 0(5) | ROIC Shares
| | $ 339,542(1) | | $339,542(2) | | $ 0(5) | | | | | | | | Nancy A. Walsh
(appointed January 25, 2018)
| | | | | | | Severance
| | $ 575,000(1) | | N/A | | N/A | Restricted Stock Awards
| | | | | | | Time-based
| | $ 576,640(1) | | $576,640 (4) | | $576,640(5) | Darla D. Ramirez
(October 4, 2017 through January 24, 2018)
| | | | | | | Restricted Stock Awards
| | | | | | | Time-based
| | $ 31,856(3) | | $ 31,856 (4) | | $ 31,856(5) | Performance-based
| | | | | | | Profit Goal Shares
| | $ 0(3) | | $ 51,786(4) | | $ 0(5) | TSR Shares
| | $ 0(3) | | $ 3,406(4) | | $ 0(5) | ROIC Shares
| | $ 0(3) | | $ 38,198(4) | | $ 0(5) | | | | | | | | Catherine David
(resigned May 1, 2018)
| | | | | | | Restricted Stock Awards
| | | | | | | Time-based
| | $ 154,837(3) | | $154,837(4) | | $154,837(5) | Time-based (Career Share Grants)
| | $ 128,802(3) | | $128,802(4) | | $128,802(5) | Performance-based
| | | | | | | Profit Goal Shares
| | $ 0(3) | | $386,016(4) | | $ 0(5) | TSR Shares
| | $ 0(3) | | $ 21,564(4) | | $ 0(5) | ROIC Shares
| | $ 0(3) | | $278,225(4) | | $ 0(5) | | | | | | | | Michael R. Benkel
| | | | | | | Restricted Stock Awards
| | | | | | | Time-based
| | $ 123,875(3) | | $123,875(4) | | $123,875(5) | Time-based (Career Share Grants)
| | $ 128,802(3) | | $128,802(4) | | $128,802(5) | Performance-based
| | | | | | | Profit Goal Shares
| | $ 0(3) | | $308,802(4) | | $ 0(5) | TSR Shares
| | $ �� 0(3) | | $ 17,254(4) | | $ 0(5) | ROIC Shares
| | $ 0(3) | | $222,578(4) | | $ 0(5) | | | | | | | | Bhargav J. Shah
(appointed August 7, 2017)
| | | | | | | Restricted Stock Awards
| | | | | | | Time-based
| | $ 115,523(3) | | $115,523(4) | | $115.523(5) | Performance-based
| | | | | | | Profit Goal Shares
| | $ 0(3) | | $190,614(4) | | $ 0(5) | ROIC Shares
| | $ 0(3) | | $190,624(4) | | $ 0(5) | | | | | | | |
| | | 48 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
(1) | Mr. James and Ms. Walsh are each parties to executive severance agreements which provide for cash severance equal to one year’s salary for Ms. Walsh and two years’ salary for Mr. James in the event of the executive’s termination without cause or good reason. In addition, each executive will receive reasonable outplacement benefits. Entitlement to any unvested awards under the short-term incentive or long-term incentive plans is based on the terms of the governing plan document. For purposes of this table, we have assumed such awards would vest at target levels. Payment of these amounts is conditioned on the executive’s adherence to aone-year restriction on competition and solicitation. |
(2) | Mr. James’ offer letter states in the event of a change in control, if the successor does not assume the awards or successor assumes awards but terminates the employee without cause or the employee resigns with good reason,compensation committee fully vested all time-based awards, restricted stock or options will fully vest. All performance-based awards will vest at target and payout on a pro rata basis based on time elapsed prior to change in control or termination of employment. All of Mr. James’ stock options have an exercise price that was higher than the closing sales price of the Company’s common stock as of March 3, 2018. |
(3) | Under the 2006 Plan and the 2015 Plan the compensation 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. If, however, 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 of 1986, this column assumes that the award was not accelerated. The amounts shown assume the compensation committee fully vested any and all time-based restricted stock grants. |
(4) | Under the 2006 Plan and the 2015 Plan the compensation 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. The fiscal 2018 form of award agreements for grants of restricted stock provide for double trigger vesting following a corporate change. The amounts shown assume the compensation committee fully vested the restricted stock grants for Messrs. Benkel and Shah and Mmes. Walsh, Ramirez and David under the 2006 Plan and/or the 2015 Plan, as applicable. |
(5) | Under the 2006 Plan and the 2015 Plan the compensation committee may, in its discretion, upon death or disability, fully vest a restricted stock award. If, however, 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 of 1986, this column assumes that the award was not accelerated. The amounts shown assume the compensation committee fully vested any and all time-based restricted stock grants. |
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 49 |
CHIEF EXECUTIVE OFFICER PAY RATIO
Under Section 953(b) of the Dodd-Frank Wall Street Reformoutstanding restricted stock grants under the 2006 Plan and/or the 2015 Plan, as applicable, except for Mr. Bostrom’s agreement, which does not provide for such acceleration.
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(5) | Under the 2006 Plan and Consumer Protection Act and Item 402(u) of RegulationS-K,the Company is required to provide2015 Plan, the ratiocompensation committee may, in its discretion, upon death or disability, fully vest any or all common stock underlying a restricted stock award. Currently, none of the annual total compensation of Mr. James, who has served as the Company’s chiefaward agreements provide for accelerated vesting upon death or disability, except for Ms. Bachelder’s RSU award agreement. |
(6) | Pursuant to her executive officer since May 1, 2017,agreement, Ms. Cook will receive salary continuation for 12 months following her termination equal to the annual total compensation of the median employee of the Company (the “Pay Ratio Disclosure”). The annual total compensation for fiscal 2018 for Mr. James for purposes of Pay Ratio Disclosure was $4,064,959 and for the median employee was $6,580, resulting in a ratio of 618 to 1.
To determine the median employee, we applied the following methodology:
| ● | | We identified our total employee population as of March 3, 2018, including full-time, part-time, temporary and seasonal workers, but excluding the chief executive officer. |
| ● | | For our U.S. employees, we usedW-2 Box 1 wages for fiscal year 2018, beginning February 26, 2017 through March 3, 2018. |
| ● | | For our Canadian employees, we used taxable wages for fiscal year 2018, beginning February 26, 2017 through March 3, 2018, and translated the results to the U.S. dollar equivalent based on the exchange rate as of March 2, 2018. |
Using this methodology, we determined that the median employee was a limited-time employee located in the U.S. with an annual total compensation of $6,580 for fiscal 2018, calculated in accordance with the requirements of Item 402(c)(2)(x) of RegulationS-K, which includes base pay, overtime pay and the Company’s matching contribution to that employee’s 401(k) plan.
Because Mr. James did not serve as the chief executive officer for the full fiscal year, we elected to annualize his compensation as provided in the rule. The portions annualized by the Company includedone times her base salary as well as the Company’s matching contributions to Mr. James’ deferred compensation plan and disability and life insurance premiums. No other adjustments were made to the remaining components of Mr. James’ annual total compensation as reported in the fiscal 2018 Summary Compensation Table. As a result of these annualizing adjustments, for purposes of the Pay Ratio Disclosure, Mr. James’ annual total compensation of $4,064,959 for fiscal 2018 differs from the amount of $3,881,593 reported in the fiscal 2018 Summary Compensation Table (see page 40).
Further, Mr. James received certain awards in connection with his employment that will not be part of his ongoing compensation, including asign-on bonus, long-term incentive awards granted as inducement awards and relocation benefits. If we exclude thoseone-time awards, his annualized compensation would have been $2,226,241, resulting in a pay ratio of approximately 338 to 1.
| | | 50 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth certain information regarding Pier 1 Imports’ equity compensation planseffect as of March 3, 2018.
| | | | | | | | | | | | | | | | PLAN CATEGORY | | NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANT AND RIGHTS | | WEIGHTED-AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS | | NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN THE FIRST COLUMN) | Equity compensation plans approved by Shareholders | | | | | | | | | | | | | | | | Pier 1 Imports, Inc. 2006 Stock Incentive Plan | | | | 74,300 | | | | | $9.11 | | | | | 0 | | Pier 1 Imports, Inc. 2015 Stock Incentive Plan | | | | 297,220 | | | | | $6.69 | | | | | 6,023,157 | (1) | Pier 1 Imports, Inc. Stock Purchase Plan | | | | – | | | | | – | | | | | 2,476,267 | | Equity compensation plans not approved by Shareholders (2) | | | | 33,749 | | | | | $6.68 | | | | | 0 | | | | | | Total: | | | | 405,269 | | | | | $7.13 | | | | | 8,499,424 | |
(1) | | As of April 27, 2018, the plan had 6,313,500 shares available for issuance. |
(2) | | Equity compensation plans not approved by shareholders represent the employment inducement stock option awards granted to Mr. James on May 2, 2017. |
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 51 |
AUDIT MATTERS
Audit Committee Report
Each memberher separation from service, subject to her continued compliance with non-competition and other covenants. Ms. Cook also will receive a payment of the audit committee is an independent director,$450,000 in December 2019 pursuant to the independence requirementsterms of her severance.
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PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 43
CHIEF EXECUTIVE OFFICER PAY RATIO Under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, the Company is required to provide the ratio of the annual total compensation of the Company’s chief executive officer to the annual total compensation of the median employee of the Company (“Pay Ratio Disclosure”). We have provided the ratio of the annual total compensation of Cheryl A. Bachelder, who has served as interim chief executive officer since December 18, 2018, to that of the median employee determined as of March 2, 2019. The annual total compensation for fiscal 2019 for Ms. Bachelder for purposes of Pay Ratio Disclosure, which is annualized as described below, was $1,699,111 and for the median employee was $6,503, resulting in a ratio of 261 to 1. To determine the median employee, we applied the following methodology: We identified our total employee population as of March 2, 2019, including full-time, part-time, temporary and seasonal workers, but excluding the chief executive officer. For our U.S. employees, we used W-2 Box 1 wages for fiscal year 2019, beginning March 4, 2018 through March 2, 2019. For our Canadian employees, we used taxable wages for fiscal year 2019, beginning March 4, 2018 through March 2, 2019, and translated the results to the U.S. dollar equivalent based on the exchange rate as of March 1, 2019. Using this methodology, we determined that the median employee was a limited-time employee located in the U.S. with an annual total compensation of $6,503 for fiscal 2019, calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, which includes base pay, overtime pay and the Company’s matching contribution to that employee’s 401(k) plan. Because Ms. Bachelder did not serve as the interim chief executive officer for the full fiscal year, we elected to annualize her compensation as provided in Item 402(u) of Regulation S-K. The portions annualized by the Company included base salary of $1,250,000 as well as disability and life insurance premiums. In addition, cash retainers and RSU grants earned for her service as a director during fiscal 2019 were included as compensation. No other adjustments were made to the remaining components of Ms. Bachelder’s annual total compensation as reported in the fiscal 2019 Summary Compensation Table. As a result of these annualizing adjustments, for purposes of the Pay Ratio Disclosure, Ms. Bachelder’s annual total compensation of $1,699,111 for fiscal 2019 differs from the amount of $676,460 reported for fiscal 2019 in the Summary Compensation Table for the Fiscal Years Ended March 2, 2019, March 3, 2018 and February 25, 2017 (see page 37).
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 44
PROPOSAL NO. 3 – REVERSE STOCK SPLIT Approval of an Amendment to Pier 1 Imports’ Restated Certificate of Incorporation to Effect a Reverse Stock Split of Pier 1 Imports Common Stock and a Corresponding Reduction in Authorized Shares General Pier 1 Imports is asking shareholders to adopt and approve a proposed amendment to our Restated Certificate of Incorporation to effect a reverse stock split (the “Reverse Stock Split”) of our issued and outstanding common stock and to reduce the number of authorized shares of our common stock by a corresponding ratio (collectively, the “Reverse Stock Split Amendment”). On April 18, 2019, our board of directors unanimously approved and declared advisable the proposed Reverse Stock Split Amendment, and recommends that our shareholders adopt and approve the proposed Reverse Stock Split Amendment. If approved by shareholders, this proposal will authorize the board of directors, in its discretion, to amend our Restated Certificate of Incorporation to effect a Reverse Stock Split at a ratio of 1-for-5, 1-for-10 or 1-for-20, with such ratio to be determined by the board of directors, and to effect a corresponding reduction in the number of authorized shares. The effective date of the Reverse Stock Split will be determined at the discretion of the board of directors, and may occur as soon as the day following the 2019 annual meeting, or at any time prior to the annual meeting of shareholders to be held in 2020. The effective date of the Reverse Stock Split will be publicly announced by Pier 1 Imports prior to its occurrence. The board of directors may determine in its discretion not to effect the Reverse Stock Split and not to file any amendment to our Restated Certificate of Incorporation. The number of authorized shares of our common stock after giving effect to the Reverse Stock Split, if and when effected, will depend on the Reverse Stock Split ratio that is ultimately determined by the board of directors. As of April 22, 2019, we had 500,000,000 shares of authorized common stock and 85,013,806 shares of common stock issued and outstanding. The proposed Reverse Stock Split Amendment will result in a reduction of the total number of shares of Pier 1 Imports common stock that we are authorized to issue by a corresponding ratio. The table below illustrates the impact of each Reverse Stock Split ratio along with the corresponding effect (without consideration of the number of resulting fractional shares of common stock that will be exchanged for cash) on: The number of shares of authorized common stock as adjusted to correspond with the Reverse Stock Split ratio; The number of shares of common stock issued and outstanding; The number of shares of common stock reserved for future issuance under our equity compensation plans; and The number of shares of common stock that will remain authorized and available for issuance, including treasury shares. STATUS | SHARES OF COMMON STOCK AUTHORIZED | SHARES OF COMMON STOCK ISSUED AND OUTSTANDING | SHARES OF COMMON STOCK RESERVED FOR FUTURE ISSUANCE | SHARES OF COMMON STOCK AVAILABLE FOR FUTURE ISSUANCE | Pre-Reverse Stock Split | 500,000,000 | 85,013,806 | 1,123,612 | 413,862,582 | After 1:5 Reverse Stock Split | 100,000,000 | 17,002,761 | 224,722 | 82,772,516 | After 1:10 Reverse Stock Split | 50,000,000 | 8,501,381 | 112,361 | 41,386,258 | After 1:20 Reverse Stock Split | 25,000,000 | 4,250,690 | 56,181 | 20,693,129 |
If we effect the Reverse Stock Split, then, except for adjustments that may result from the treatment of fractional shares as described below, each shareholder will hold the same percentage of the then-outstanding shares of common stock immediately following the Reverse Stock Split that such shareholder held immediately prior to the Reverse Stock Split. The par value of our common stock will remain unchanged at $0.001 per share. No fractional shares of common stock will be issued as a result of the Reverse Stock Split. Instead, any shareholder who would be entitled to receive a fractional share as a result of the Reverse Stock Split will receive a cash payment in lieu of such fractional share. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 45
| PROPOSAL NO. 3 – REVERSE STOCK SPLIT |
If the proposed Reverse Stock Split Amendment is adopted and approved by our shareholders and the board of directors elects to effect the Reverse Stock Split, we will file a Certificate of Amendment to our Restated Certificate of Incorporation with the Delaware Secretary of State, substantially in the form of the Certificate of Amendment attached as Appendix A to this proxy statement, that sets forth the Reverse Stock Split Amendment and the Reverse Stock Split ratio as determined by the board of directors. We anticipate that the Certificate of Amendment will be effective immediately upon filing with the Delaware Secretary of State. The board of directors also may determine in its discretion not to effect the Reverse Stock Split and not to file the Certificate of Amendment. Background and Reasons for the Reverse Stock Split Our common stock is currently quoted on NYSE under the symbol “PIR”. On January 11, 2019, Pier 1 Imports received notice from NYSE that Pier 1 Imports was no longer in compliance with NYSE continued listing criteria set forth in Section 802.01C of the NYSE Listed Company Manual, which require listed companies to maintain an average closing share price of at least $1.00 over a period of 30 consecutive trading days. Pursuant to Section 802.01C of the NYSE Listed Company Manual, Pier 1 Imports has a period of six months following the receipt of notice to regain compliance with the minimum share price criteria. We can regain compliance with the minimum share price criteria at any time during the six-month cure period if, on the last trading day of any calendar month during the cure period or on the last trading day of the cure period, we have (i) a closing share price of at least $1.00 and (ii) an average closing share price of at least $1.00 over the 30-trading-day period ending on such date. If these criteria are not satisfied at the expiration of the six-month cure period, NYSE may commence suspension and delisting procedures. NYSE has reserved the right to reevaluate its continued listing determinations relating to companies who are notified of non-compliance with respect to NYSE's qualitative continued listing criteria, including if our shares of common stock trade at sustained levels that are considered to be abnormally low. We believe that the Reverse Stock Split, by increasing our stock price, will make our common stock more attractive to a broader range of institutional and other investors. Many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. Some of those policies and practices may function to make the processing of trades in low-priced stocks economically unattractive to brokers. Because brokers’ commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current trading prices of our common stock can result in individual shareholders paying transaction costs that are a higher percentage of the value of the transaction than would be the case if the share price were substantially higher. We believe that the Reverse Stock Split, when effected, will make our common stock a more attractive and cost-effective investment for many investors. Our board of directors has determined that it is in the best interests of Pier 1 Imports and its shareholders to maintain the listing of Pier 1 Imports common stock on NYSE. We may not be able to meet the $1.00 average closing share price criteria of NYSE unless we effect the Reverse Stock Split. Our board of directors recommends approval of the proposed Reverse Stock Split Amendment so that the Reverse Stock Split may be implemented to the extent necessary to maintain NYSE listing of our common stock. Reducing the number of outstanding shares of our common stock through the Reverse Stock Split is intended, absent other factors, to increase the per share market price of our common stock. However, other factors, such as our financial results, market conditions and the market perception of our business, may adversely affect the market price of our common stock. As a result, there can be no assurance that the Reverse Stock Split, if implemented, will produce the intended results, that the market price of our common stock will increase following the implementation of the Reverse Stock Split or that the market price of our common stock will not decrease in the future. Additionally, we cannot assure you that the market price per share of our common stock after the Reverse Stock Split will increase in proportion to the reduction in the number of shares of our common stock outstanding before the Reverse Stock Split. Accordingly, the total market capitalization of our common stock after the Reverse Stock Split may be lower than the total market capitalization before the Reverse Stock Split. Delaware General Corporation Law does not require a reduction in the total number of authorized shares of our common stock at the time of the Reverse Stock Split. As a matter of good governance, our board of directors has determined to implement a pro rata reduction in the total number of authorized shares of common stock at the time of the Reverse Stock Split. Accordingly, if shareholders adopt and approve the proposed Reverse Stock Split Amendment and the Reverse Stock Split is implemented, the authorized number of shares of our common stock also will be reduced by a corresponding ratio.
Board Discretion to Implement the Reverse Stock Split The board of directors believes that shareholder adoption and approval of a range of Reverse Stock Split ratios is in the best interests of our shareholders because it provides the board of directors with the flexibility to achieve the desired results of the Reverse Stock Split and because it is not possible to predict market conditions at the time the Reverse Stock Split is implemented. If our shareholders approve this proposal, the board of directors will implement the Reverse Stock Split only upon a determination that the Reverse Stock Split is in the best interests of the shareholders at that time. The board of directors will then select the ratio for the Reverse Stock Split from the range adopted and approved by the shareholders that the board of directors determines to be advisable and in the best interests of the shareholders, considering relevant market conditions at the time the Reverse Stock Split is to be implemented. The factors that the board of directors may consider in determining the Reverse Stock Split ratio include, but are not limited to, the following:
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the historical and projected trading price and trading volume of our common stock; general economic and other related conditions prevailing in our industry and in the marketplace; our ability to meet the continued listing standards of NYSE, including the common stock price criteria; and the anticipated impact of a particular ratio on our ability to reduce administrative and transactional costs. The board of directors intends to select the Reverse Stock Split ratio that it believes will be most likely to achieve the anticipated benefits of the Reverse Stock Split described above. The Reverse Stock Split is not intended as, and will not have the effect of, a “going private transaction” covered by Rule 13e-3 under the Exchange Act. Following the implementation of the Reverse Stock Split, we will continue to be subject to the periodic reporting requirements of the Exchange Act. Certain Risks and Potential Disadvantages Associated with the Reverse Stock Split We cannot assure you that the proposed Reverse Stock Split will increase our stock price. We expect that the Reverse Stock Split will increase the per share trading price of our common stock. However, the effect of the Reverse Stock Split on the per share trading price of our common stock cannot be predicted with any certainty, and the history of reverse stock splits for other companies is varied, particularly since some investors may view a reverse stock split negatively. It is possible that the per share trading price of our common stock after the Reverse Stock Split will not increase in the same proportion as the reduction in the number of our outstanding shares of common stock following the Reverse Stock Split. In addition, although we believe the Reverse Stock Split may enhance the marketability of our common stock to certain potential investors, we cannot assure you that, if implemented, our common stock will be more attractive to investors. Even if we implement the Reverse Stock Split, the per share trading price of our common stock may decrease due to factors unrelated to the Reverse Stock Split, including our future performance. If the Reverse Stock Split is consummated and the per share trading price of our common stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the Reverse Stock Split. We cannot assure you that we will regain and continue in compliance with the continued listing criteria of the NYSE. Even if our shareholders adopt and approve the proposed Reverse Stock Split Amendment and the Reverse Stock Split is effected, there can be no assurance that we will regain compliance with the NYSE continued listing criteria and/or continue to meet the NYSE continued listing criteria. The proposed Reverse Stock Split may decrease the liquidity of our common stock and result in higher transaction costs. The liquidity of our common stock may be negatively impacted by the Reverse Stock Split, given the reduced number of shares that will be outstanding after the Reverse Stock Split, particularly if the per share trading price does not increase as a result of the Reverse Stock Split. In addition, if the Reverse Stock Split is implemented, it will increase the number of our shareholders who own "odd lots" of fewer than 100 shares of common stock. Brokerage commissions and other costs of transactions in odd lots are generally higher than the costs of transactions of more than 100 shares of common stock. Accordingly, the Reverse Stock Split may not achieve the desired result of increasing the marketability of our common stock. Effects of the Reverse Stock Split General The principal effect of the Reverse Stock Split, if implemented by the board of directors, will be to proportionately decrease the number of issued and outstanding shares of our common stock based on the ratio selected by our board of directors, which will result in each shareholder owning a reduced number of shares of common stock after the effective date of the Reverse Stock Split. The actual number of shares issued and outstanding and ultimately owned by each shareholder after giving effect to the Reverse Stock Split, if implemented, will depend on the ratio for the Reverse Stock Split that is ultimately determined by our board of directors. The Reverse Stock Split will affect all holders of our common stock uniformly and will not affect any shareholder’s percentage ownership interest in the Company, except that, as described below under “Mechanics of the Reverse Stock Split—Fractional Shares,” holders of common stock otherwise entitled to a fractional share as a result of the Reverse Stock Split will receive cash in lieu of such fractional share. In addition, the Reverse Stock Split will not affect any shareholder’s proportionate voting power, subject to the treatment of fractional shares. The Reverse Stock Split may result in some shareholders owning “odd lots” of less than 100 shares of common stock. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots may be higher than the costs of transactions in “round lots” of even multiples of 100 shares. After the effective time of the Reverse Stock Split, our common stock will have a new Committee on Uniform Securities Identification Procedures, or CUSIP, number, which is a number used to identify our common stock. Stock certificates with prior CUSIP numbers will no longer be valid. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 47
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Effect on Capital Stock Pursuant to our Restated Certificate of Incorporation, our capital stock consists of 520,000,000 shares, which includes 500,000,000 shares of common stock, par value $0.001, and 20,000,000 shares of preferred stock, par value $1.00 per share, none of which are outstanding. The proposed Reverse Stock Split will have no impact on the total authorized number of shares of preferred stock or the par value of the preferred stock, and will have no impact on the par value of the common stock. If the proposed Reverse Stock Split is implemented, the shares of authorized common stock will be reduced in proportion to the Reverse Stock Split ratio selected by the board of directors as illustrated in the table above. Accounting Matters As a result of the Reverse Stock Split, at the effective time of the Reverse Stock Split, the stated capital on Pier 1 Imports’ balance sheet attributable to our common stock, which consists of the par value per share of our common stock multiplied by the aggregate number of shares of our common stock issued and outstanding, will be reduced in proportion to the Reverse Stock Split ratio chosen by the board of directors. Correspondingly, Pier 1 Imports’ additional paid-in capital account, which consists of the difference between Pier 1 Imports’ stated capital and the aggregate amount paid to Pier 1 Imports upon issuance of all currently outstanding shares of common stock, will be credited with the amount by which the stated capital is reduced. Pier 1 Imports’ shareholders’ equity, in the aggregate, will remain unchanged. The historical earnings or loss per share of our common stock reported in all financial reports published after the effective date of the Reverse Stock Split will be restated to reflect the proportionate decrease in the number of outstanding shares of common stock for all periods presented so that the results are comparable. Effect on Pier 1 Imports' Stock Incentive Plans and Stock Purchase Plan The proposed Reverse Stock Split will reduce the number of shares of common stock available for issuance under our equity compensation plans in proportion to the Reverse Stock Split ratio selected by the board. As of April 22, 2019, we had approximately 3,892,303 shares of unvested restricted stock, 1,090,277 shares subject to unvested restricted stock units and director deferred stock units and 33,425 shares subject to stock options outstanding under our stock incentive plans. Under the terms of our 2015 Plan and our 2006 Plan, the proposed Reverse Stock Split will cause a reduction in the number of shares of common stock issuable upon exercise, vesting or conversion of such awards in proportion to the Reverse Stock Split ratio and will cause a proportionate increase in any exercise price of such awards, with any resulting fractional shares rounded up to the next whole share. The board of directors has also authorized any changes to our stock incentive plans that are necessary, desirable or appropriate to give effect to the Reverse Stock Split, if any, including any applicable, technical conforming changes. The shares held in the SPP will be reduced in proportion to the Reverse Stock Split ratio. The SPP provides for fractional shares to be held by participants; therefore, fractional shares will be credited to the participants’ accounts. Mechanics of the Reverse Stock Split Shares Held in Book-Entry or Through a Broker, Bank or Other Intermediary If you hold registered shares of our common stock in book-entry form, you do not need to take any action to receive your post-Reverse Stock Split shares of our common stock in registered book-entry form or your cash payment in lieu of fractional shares, if applicable. If you are entitled to post-Reverse Stock Split shares of our common stock, a transaction statement will automatically be sent to your address of record as soon as practicable after the effective time of the Reverse Stock Split indicating the number of shares of our common stock you then hold. In addition, if you are entitled to a payment of cash in lieu of fractional shares, a check will be mailed to you at your registered address as soon as practicable after the effective time. By signing and cashing this check, you will warrant that you owned the shares of Pier 1 Imports' common stock for which you received the cash payment. If you hold your shares of common stock in street name, your broker, bank or other intermediary will be instructed to effect the Reverse Stock Split for their beneficial holders holding shares of our common stock in "street name" in the same manner as registered holders; however, these brokers, banks or other intermediaries may apply their own specific procedures for processing the Reverse Stock Split. If you hold your shares of our common stock with a broker, bank or other intermediary, and you have any questions in this regard, we encourage you to contact your bank, broker or other intermediary. Exchange of Shares Held in Certificate Form If you hold any of your shares of our common stock in certificate form, you will receive a transmittal letter from our transfer agent, Computershare, Inc., as soon as practicable after the effective time of the Reverse Stock Split. The transmittal letter will be accompanied by instructions specifying how you can deliver your stock certificates to the transfer agent and exchange them for shares of common stock held in book-entry form through the Depository Trust Company’s Direct Registration System. We will not issue new certificates, and following the reverse stock split, shares will be held only in book-entry form. Shareholders will not have to pay any transfer fee or other fee in connection with such exchange. As soon as practicable after your delivery to the transfer agent of the transmittal letter and your stock certificate(s), you will receive a transaction statement showing the post-Reverse Stock Split shares of common stock you own in book-entry form together with any payment of cash in lieu of fractional shares to which you are entitled. After the effective time of the Reverse Stock Split, any shares of common stock you hold in certificate form representing pre-split shares of common stock cannot be traded for value, other than in accordance with the exchange procedures described above, and cannot be PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 48
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used for either transfers or deliveries of your shares to other persons. Accordingly, you must exchange your stock certificates for shares held in book-entry form in order to trade your shares for value or to effect transfers or deliveries of your shares after the Reverse Stock Split. As soon as practicable after the surrender to the transfer agent of any stock certificates, together with a properly completed and duly executed transmittal letter and any other documents the transfer agent may specify, the transfer agent will adjust its records to reflect that the shares of common stock represented by such stock certificates are held in book-entry form in the name of such person. DO NOT SEND YOUR STOCK CERTIFICATES TO PIER 1 IMPORTS OR OUR TRANSFER AGENT NOW. YOU MUST SEND THEM TO THE TRANSFER AGENT ONLY AFTER YOU RECEIVE THE TRANSMITTAL LETTER FROM THE TRANSFER AGENT. No service charges, brokerage commissions or transfer taxes will be payable by any holder of stock certificates in connection with the exchange of such holder’s stock certificates representing pre-Reverse Stock Split shares for the appropriate number of post-Reverse Stock Split shares, except that if any book-entry shares are to be issued in a name other than that in which the existing stock certificates are registered, it will be a condition of such issuance that (1) the person requesting such issuance must pay to us any applicable transfer taxes or establish to our satisfaction that such taxes have been paid or are not payable, (2) the transfer complies with all applicable federal and state securities laws, and (3) the surrendered stock certificate is properly endorsed and otherwise in proper form for transfer. Shareholders should not destroy any stock certificates and must not submit any stock certificates until the Company has announced the completion of the Reverse Stock Split and the shareholder has received a transmittal letter from the transfer agent. Any shareholder whose stock certificates have been lost, stolen or destroyed will be entitled to receive new shares of common stock in book-entry form only after complying with the requirements that we and our transfer agent customarily apply in connection with the replacement of lost, stolen or destroyed stock certificates. Fractional Shares Shareholders will not receive fractional shares of common stock in connection with the Reverse Stock Split. Instead, the transfer agent will aggregate all fractional shares and sell them as soon as practicable after the effective time at the then-prevailing prices on the open market, on behalf of those shareholders who would otherwise be entitled to receive a fractional share as a result of the Reverse Stock Split. We expect that the transfer agent will conduct the sale in an orderly fashion at a reasonable pace and that it may take several days to sell all of the aggregated fractional shares of our common stock. After the transfer agent's completion of such sale, shareholders who would have been entitled to a fractional share will instead receive a cash payment from the transfer agent in an amount equal to their respective pro rata shares of the total proceeds of that sale net of any brokerage costs incurred by the transfer agent to sell such stock. The cash payment is subject to applicable U.S. federal and state income tax and state abandoned property (or escheat) laws. After the Reverse Stock Split, a shareholder will have no further interest in the Company with respect to any fractional share interest, and a shareholder otherwise entitled to a fractional share will not have any voting, dividend or other rights with respect to the fractional share except the right to receive a cash payment as described above. Shareholders will not be entitled to receive interest for the period of time between the effective time of the Reverse Stock Split and the date payment is made for their fractional share interests. In addition, under the escheat laws of certain states, funds due for fractional share interests that are not timely claimed after the funds are made available may be required to be paid to the designated agent for each such state. Thereafter, shareholders otherwise entitled to receive such funds may have to obtain the funds directly from the state to which they were paid. If you do not hold sufficient shares of Pier 1 Imports common stock at the effective time of the Reverse Stock Split to receive at least one share following the Reverse Stock Split, you will receive cash and will no longer be a holder of Pier 1 Imports common stock. Shares of our common stock held in certificate form and shares of our common stock held in “street name” by your broker, bank or other intermediary for the same shareholder will be considered to be held in separate accounts and will not be aggregated when effecting the Reverse Stock Split and determining fractional share interests. Effective Time The effective time of the Reverse Stock Split, if the proposed Reverse Stock Split Amendment is adopted and approved by shareholders and the Reverse Stock Split is implemented at the direction of the board of directors, will be the date and time set forth in the Certificate of Amendment that is filed with the Delaware Secretary of State. Such filing may occur as soon as the day following the annual meeting or at any time prior to the annual meeting of shareholders to be held in 2020. However, the exact timing of the Reverse Stock Split will be determined by our board of directors based on its evaluation as to when such action will be the most advantageous to Pier 1 Imports and its shareholders. The Reverse Stock Split may be delayed or abandoned without further action by the shareholders at any time prior to the filing of the Certificate of Amendment with the Delaware Secretary of State, notwithstanding shareholder adoption and approval of the proposed Reverse Stock Split, if the board of directors, in its sole discretion, determines that it is in the best interests of Pier 1 Imports and its shareholders to delay or abandon the Reverse Stock Split. If the Certificate of Amendment implementing the Reverse Stock Split has PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 49
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not been filed with the Delaware Secretary of State on or before the date of the annual meeting of shareholders to be held in 2020, the board of directors will be deemed to have abandoned the Reverse Stock Split. Appraisal Rights Under the Delaware General Corporation Law, our shareholders are not entitled to dissenter's rights or appraisal rights with respect to the Reverse Stock Split and we will not independently provide our shareholders with any such rights. Interest of Certain Persons in Matters to be Acted Upon No officer or director has any substantial interest, direct or indirect, by security holdings or otherwise, in the Reverse Stock Split that is not shared by all of our other shareholders. Certain U.S. Federal Income Tax Consequences of the Reverse Stock Split The following discussion is a general summary of certain U.S. federal income tax consequences of the Reverse Stock Split that may be relevant to shareholders for U.S. federal income tax purposes. This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations promulgated thereunder, administrative rulings and judicial decisions as of the date of this proxy statement, all of which may change, possibly with retroactive effect, resulting in U.S. federal income tax consequences that may differ from those discussed below. This discussion applies only to holders of our common stock that are U.S. Holders (as defined below) and does not address all aspects of federal income taxation that may be relevant to such holders in light of their particular circumstances or to holders that may be subject to special tax rules, including: (i) holders subject to the alternative minimum tax; (ii) banks, insurance companies, or other financial institutions; (iii) tax-exempt organizations; (iv) dealers in securities or commodities; (v) regulated investment companies or real estate investment trusts; (vi) partnerships (or other flow-through entities for U.S. federal income tax purposes and their partners or members); (vii) traders in securities that elect to use a mark-to-market method of accounting for their securities holdings; (viii) U.S. Holders whose "functional currency" is not the U.S. dollar; (ix) persons holding our common stock as a position in a hedging transaction, "straddle," "conversion transaction" or other risk reduction transaction; (x) persons who acquire shares of our common stock in connection with employment or other performance of services; or (xi) U.S. expatriates. If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a holder that is a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. We have not sought, and will not seek, an opinion of counsel or a ruling from the Internal Revenue Service ("IRS") regarding the U.S. federal income tax consequences of the Reverse Stock Split and there can be no assurance that the IRS will not challenge the statements and conclusions set forth below or that a court would not sustain any such challenge. The following summary does not address any U.S. state or local or any foreign tax consequences, any estate, gift or other non-U.S. federal income tax consequences, or the Medicare tax on net investment income. EACH HOLDER OF COMMON STOCK SHOULD CONSULT SUCH HOLDER'S OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT TO SUCH HOLDER. For purposes of the discussion below, a "U.S. Holder" is a beneficial owner of shares of our common stock that for U.S. federal income tax purposes is: (1) an individual citizen or resident of the United States; (2) a corporation (including any entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, or any state or political subdivision thereof; (3) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (4) a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect to be treated as a U.S. person. The board of directors intends the Reverse Stock Split to be treated as a "recapitalization" under Section 368(a)(1)(E) of the Code, although no assurances are provided in this regard. In such case, a U.S. Holder generally should not recognize gain or loss upon the proposed Reverse Stock Split, except with respect to cash received in lieu of a fractional share of our common stock, as discussed below. A U.S. Holder's aggregate tax basis in the shares of our common stock received pursuant to the Reverse Stock Split should equal the aggregate tax basis of the shares of our common stock surrendered (excluding any portion of such basis that is allocated to any fractional share of our common stock), and such U.S. Holder's holding period in the shares of our common stock received should include the holding period in the shares of our common stock surrendered. Holders of shares of our common stock acquired on different dates and at different prices should consult their own tax advisors regarding the allocation of the tax basis and holding period of such shares. A U.S. Holder that receives cash in lieu of a fractional share of our common stock pursuant to the Reverse Stock Split should recognize capital gain or loss in an amount equal to the difference between the amount of cash received and the U.S. Holder's tax basis in the shares of our common stock surrendered that is allocated to such fractional share. Such capital gain or loss should be long-term capital gain or loss if the U.S. Holder's holding period for our common stock surrendered exceeded one year at the effective time of the Reverse Stock Split. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 50
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Payments of cash made in lieu of a fractional share of our common stock may, under certain circumstances, be subject to information reporting and backup withholding. To avoid backup withholding, each holder of our common stock that does not otherwise establish an exemption must furnish on applicable IRS forms its taxpayer identification number and comply with the applicable certification procedures. Backup withholding is not an additional tax and amounts withheld will be allowed as a credit against the holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided the required information is timely furnished to the IRS. Holders of our common stock should consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them. Vote Required Under Delaware General Corporate Law, the affirmative vote of the holders of a majority of the outstanding shares of common stock entitled to vote at the annual meeting is required to adopt and approve the proposed amendment to our Restated Certificate of Incorporation to effect the Reverse Stock Split in the discretion of the board of directors and the corresponding reduction in authorized shares of common stock. Because adoption and approval of the proposed amendment to our Restated Certificate of Incorporation to effect the Reverse Stock Split in the discretion of the board of directors requires a majority of the outstanding shares, an abstention with respect to the Reverse Stock Split proposal will have the same effect as a vote "against" the proposal. Brokers have discretion to vote on this Proposal No. 3 pursuant to NYSE rules, therefore, no broker non-votes are anticipated with respect to this proposal. The board of directors unanimously recommends a vote “For” the approval of an amendment to the Pier 1 Imports’ Restated Certificate of Incorporation to effect a reverse stock split of Pier 1 Imports common stock and a corresponding reduction in authorized shares, in the discretion of the board of directors, at any time prior to the 2020 annual meeting of shareholders. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 51
EQUITY COMPENSATION PLAN INFORMATION The following table sets forth certain information regarding Pier 1 Imports’ equity compensation plans as of March 2, 2019. PLAN CATEGORY | NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANT AND RIGHTS (1) | WEIGHTED-AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (2) | NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN THE FIRST COLUMN) (3) | Equity compensation plans approved by shareholders | | | | Pier 1 Imports, Inc. 2006 Stock Incentive Plan | 301,349 | $15.66 | - (4) | Pier 1 Imports, Inc. 2015 Stock Incentive Plan | 814,651 | $ 6.82 | 6,590,046 | Pier 1 Imports, Inc. Stock Purchase Plan | - | - | 1,338,747 | Equity compensation plans not approved by shareholders | - | - | 278,949 (5) | | | | | Total: | 1,116,000 | $11.39 | 8,207,742 |
(1) | This column includes 33,425 shares subject to outstanding stock options granted under the SEC and NYSE. In accordance with the committee’s written charter, the committee assists the board of directors in overseeing the quality and integrity of Pier 1 Imports’ accounting, auditing and financial reporting practices. In performing its oversight function, the committee reviewed and discussed Pier 1 Imports’ audited consolidated financial statements as of and for the fiscal year ended March 3, 2018, with management and Ernst & Young LLP, Pier 1 Imports’ independent registered public accounting firm for fiscal 2018, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments2006 Plan and the clarity2015 Plan, 750,005 shares subject to outstanding DSUs granted under the 2006 Plan and the 2015 Plan and 332,570 shares subject to outstanding unvested RSUs granted under the 2015 Plan. |
(2) | The weighted-average exercise price calculation does not include outstanding DSUs or outstanding unvested RSUs, which are convertible to shares of disclosures reflected in the financial statements. stock for no consideration. |
(3) | All of these shares are available for issuance pursuant to grants of full-value stock awards. |
(4) | The committee also discussed with Ernst & Young LLP all matters required2006 Stock Incentive Plan had no shares available for issuance. |
(5) | Equity compensation plans not approved by applicable Public Company Accounting Oversight Board standards and, with and without management present, discussed and reviewed the results of the independent registered public accounting firm’s examination of the consolidated financial statements. The committee obtained from Ernst & Young LLP a formal written statement describing all relationships between the firm and Pier 1 Imports that might affect the firm’s independence consistent with applicable requirements of the Public Company Accounting Oversight Board regarding their communications with the audit committee concerning independence. The committee also discussed with Ernst & Young any relationships that may have an impact on its objectivity and independence and was satisfied that the firm is independent. The committee also considered whether the provision ofnon-audit services by Ernst & Young LLP to Pier 1 Imports is compatible with maintaining the firm’s independence.
Based on the above-described review and discussions with management and Ernst & Young LLP, the committee recommended to the board of directors that Pier 1 Imports’ audited consolidated financial statements be included in Pier 1 Imports’ Annual Report on Form10-Kshareholders represent shares available for the fiscal year ended March 3, 2018, for filing with the SEC.employment inducement awards.
AUDIT COMMITTEE
Ann M. Sardini, Chair
Claire H. Babrowski
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PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 52
AUDIT MATTERS Audit Committee Report Each member of the audit committee is an independent director, pursuant to the independence requirements of the SEC and NYSE. In accordance with the audit committee’s written charter, the audit committee assists the board of directors in overseeing the quality and integrity of Pier 1 Imports’ accounting, auditing and financial reporting practices. In performing its oversight function, the audit committee reviewed and discussed Pier 1 Imports’ audited consolidated financial statements as of and for the fiscal year ended March 2, 2019, with management and Ernst & Young LLP, Pier 1 Imports’ independent registered public accounting firm for fiscal 2019, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures reflected in the financial statements. The audit committee also discussed with Ernst & Young LLP all matters required by applicable Public Company Accounting Oversight Board standards and, with and without management present, discussed and reviewed the results of the independent registered public accounting firm’s examination of the consolidated financial statements. The audit committee obtained from Ernst & Young LLP a formal written statement describing all relationships between that firm and Pier 1 Imports that might affect the firm’s independence consistent with applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young LLP’s communications with the audit committee concerning independence. The audit committee also discussed with Ernst & Young LLP any relationships that may have an impact on its objectivity and independence and was satisfied that the firm is independent. The audit committee also considered whether the provision of non-audit services by Ernst & Young LLP to Pier 1 Imports is compatible with maintaining the firm’s independence. Based on the above-described review and discussions with management and Ernst & Young LLP, the committee recommended to the board of directors that Pier 1 Imports’ audited consolidated financial statements be included in Pier 1 Imports’ Annual Report on Form 10-K for the fiscal year ended March 2, 2019, for filing with the SEC. AUDIT COMMITTEE Ann M. Sardini, Chair Robert L. Bass Brendan L. Hoffman PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 53
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Relationship with Independent Registered
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Relationship with Independent Registered Public Accounting Firm The audit committee is directly responsible for the appointment, compensation, retention and oversight of Pier 1 Imports’ independent registered public accounting firm. As described below, the audit committee has approved the engagement of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2020. The audit committee engaged Ernst & Young LLP as our independent registered public accounting firm for fiscal 2019 and the shareholders ratified that engagement at the annual meeting of the shareholders held on June 26, 2018. A representative of Ernst & Young LLP is expected to be present at the annual meeting of shareholders and will be given the opportunity to make a statement if he or she so desires and to respond to appropriate questions from shareholders. PROPOSAL NO. 4 – Ratification of Engagement of Ernst & Young LLP A proposal to ratify the audit committee’s engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2020. The audit committee has approved the engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2020. Ernst & Young LLP served as our independent registered public accounting firm for fiscal 2019 and has served in that capacity since fiscal 1996. Although approval or ratification of such engagement is not required, we are seeking the shareholders’ ratification of the audit committee’s engagement of Ernst & Young LLP as the board of directors and management believe that allowing shareholders to express their view on the matter is good corporate governance. SEC and NYSE rules require that the audit committee must be directly responsible for the appointment of any registered public accounting firm. As described below, the audit committee has approved the engagement of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2019. The audit committee engaged Ernst & Young LLP as our independent registered public accounting firm for fiscal 2018 and the shareholders ratified that engagement at the annual meeting of the shareholders held on June 22, 2017. A representative of Ernst & Young LLP is expected to be present at the annual meeting of shareholders and will be given the opportunity to make a statement if he or she so desires and to respond to appropriate questions from shareholders.
PROPOSAL NO. 3 – Ratification of Engagement of Ernst & Young LLP
A proposal to ratify the audit committee’s engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2019.
The audit committee has approved the engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2019. Ernst & Young LLP served as our independent registered public accounting firm for fiscal 2018 and has served in that capacity since fiscal 1996. Although approval or ratification of such engagement is not required, we are seeking the shareholders’ ratification of the audit committee’s engagement of Ernst & Young LLP as the board of directors and management believe that allowing shareholders to express their view on the matter is good corporate governance. SEC and NYSE rules require that the audit committee “…must be directly responsible for the appointment…of any registered public accounting firm…” While shareholder ratification is not binding on Pier 1 Imports, any failure of the shareholders to ratify the audit committee’s engagement of Ernst & Young LLP as our independent registered public accounting firm would be considered by the audit committee in engaging Ernst & Young LLP for future services.
The affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the annual meeting and entitled to vote on this proposal is required to ratify the engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2020. Abstentions will be counted as represented and entitled to vote on this proposal and will have the effect of a vote “Against” the proposal. Brokers have discretion to vote on this Proposal No. 4 pursuant to NYSE rules, therefore, no broker non-votes are anticipated with respect to this proposal.
The board of directors unanimously recommends a vote “For” the ratification of the audit committee’s engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2020. Independent Registered Public Accounting Firm Fees The following table presents fees incurred for professional services rendered by Ernst & Young LLP, Pier 1 Imports’ independent registered public accounting firm, for fiscal years ended March 2, 2019 and March 3, 2018. | March 2, 2019 | March 3, 2018 | Audit Fees (1) | $1,251,000 | $1,238,600 | Audit-Related Fees (2) | $19,000 | $33,000 | Tax Fees (3) | $54,000 | $26,800 | All Other Fees (4) | $2,000 | $2,000 | Total Fees | $1,326,000 | $1,300,400 |
(1) | Includes fees for services related to the annual audit of the consolidated financial statements, required statutory audits, if any, reviews of Pier 1 Imports’ quarterly reports on Form 10-Q, the independent registered public accounting firm’s report on Pier 1 Imports’ internal control over financial reporting, as required under Section 404 of the Sarbanes-Oxley Act of 2002, and any registration statements during the respective periods. |
(2) | Includes fees for services related to the SPP audit. |
(3) | Includes fees for services related to tax compliance, tax advice and tax planning. |
(4) | Includes fees for subscription to online research tool. |
Pre-approval of Non-audit Fees The audit committee has adopted a policy that requires advance approval of all audit, audit related, tax and other services performed by the independent registered public accounting firm. The policy provides for pre-approval by the audit committee of specifically defined audit, audit related and tax services. Unless the specific service has been previously pre-approved with respect to a fiscal year, the audit committee must approve the permitted service before the independent registered public accounting firm is engaged to perform it. The audit committee has delegated to the chair of the audit committee, or any of its other members, authority to approve permitted services up to $50,000 per engagement provided that any pre-approval decisions are reported to the audit committee at its next scheduled meeting. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 54
QUESTIONS AND ANSWERS REGARDING THE PROXY STATEMENT AND ANNUAL MEETING Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials? Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the Internet or, upon your request, have delivered printed versions of these proxy materials to you by mail. These proxy materials are being provided in connection with our solicitation of proxies for use at the annual meeting of shareholders to be held on Wednesday, June 19, 2019, at 10:00 a.m., local time, or at any adjournment or postponement thereof. Accordingly, we sent a Notice on or about May 9, 2019, to Pier 1 Imports’ shareholders entitled to receive notice of and to vote at the meeting. All shareholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, shareholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. We encourage shareholders to take advantage of the availability of the proxy materials over the Internet. You are invited to attend the annual meeting and are requested to vote on the proposals described in this proxy statement. The annual meeting will be held at Pier 1 Imports’ corporate headquarters located at 100 Pier 1 Place, Fort Worth, Texas 76102, on the Mezzanine Level in Conference Center Room C. How can I access the proxy materials electronically? The Notice will provide you with instructions regarding how to: view Pier 1 Imports’ proxy materials for the annual meeting over the Internet; and instruct Pier 1 Imports to send future proxy materials to you electronically by email. Our proxy materials are also available on our website at www.pier1.com/annualreport. If you previously elected to access your proxy materials over the Internet, you will not receive a Notice or printed proxy materials in the mail. Instead, you will receive an email with a link to the proxy materials and voting instructions. Choosing to receive future proxy materials by email will save us the cost of printing and mailing documents to you thereby lowering the costs associated with the annual meeting. If you choose to receive future proxy materials by email, you will receive an email message next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials by email will remain in effect until you terminate it. Shareholders of Record: To elect to receive our future proxy statement and annual report materials and notice of Internet availability of proxy materials electronically and manage your account, you may enroll in Investor Center offered by our transfer agent, Computershare Inc. Log into, or activate, your Investor Centeraccount by going to http://www.computershare.com/investor and following the step-by-step instructions through the enrollment process. Beneficial Owners: If you hold your shares in a brokerage account or with a bank or other intermediary, you may also have the opportunity to receive or access copies of these proxy materials electronically. Please review the information provided in the proxy materials or the Notice mailed to you by your broker, bank or other intermediary regarding the availability of this service. What is included in these proxy materials? You will receive the Pier 1 Imports, Inc. 2019 Annual Report, which includes the notice of annual meeting of shareholders, this proxy statement for the annual meeting and the fiscal 2019 Form 10-K. If you requested printed versions of these proxy materials by mail, these proxy materials also include the proxy card or voting instruction form for the annual meeting. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 55
| QUESTIONS AND ANSWERS REGARDING THE PROXY STATEMENT AND ANNUAL MEETING |
How do I change the number of copies of the Notice and other proxy materials being delivered to my household for future mailings? Although we are permitted to send a single Notice and any other proxy materials to shareholders who share the same address through a procedure called “householding,” we have determined that this procedure is not cost effective. However, if you hold your shares through a broker, bank or other intermediary, your intermediary may household the Notice and other proxy materials. If your intermediary households the Notice and other proxy materials and you would like additional copies of the Notice and any other proxy materials, or if you are currently receiving multiple copies of the Notice or other proxy materials and would like to request householding, please contact your broker, bank or intermediary. What is the difference between holding shares as a shareholder of record and as a beneficial owner? If your shares are registered directly in your name with our transfer agent, Computershare Inc., you are considered the “shareholder of record” with respect to those shares. The Notice has been sent directly to you by us. If your shares are held in a brokerage account or with a broker, bank or other intermediary, you are considered the “beneficial owner” of these shares. The Notice has been forwarded to you by your broker, bank or other intermediary that is considered, with respect to those shares, the shareholder of record. As the beneficial owner, you have the right to instruct your broker, bank or other intermediary how to vote your shares by following their instructions for voting over the Internet or by telephone, or by following their instructions to request a voting instruction form that can be completed and returned by mail. What can I do if I change my mind after I vote my shares? If you are a shareholder of record, you can revoke your proxy prior to the completion of voting at the annual meeting by: sending written notice to Pier 1 Imports’ corporate secretary at 100 Pier 1 Place, Fort Worth, Texas 76102 which must be received prior to June 18, 2019; timely delivering a valid, later-dated proxy; or voting in person at the annual meeting. If you are a beneficial owner of shares, you may submit new voting instructions by contacting your broker, bank or other intermediary. You may also vote in person at the annual meeting if you obtain a legal proxy from your broker, bank or other intermediary and present it to the inspector of election with your ballot. Will my Notice include all my shares? If you are a shareholder of record, you will receive only one Notice for all the shares of Pier 1 Imports common stock you hold: and, if you are also a Pier 1 Imports employee, the Notice will also include all the shares of Pier 1 Imports common stock you hold: in book-entry form for restricted stock, if any, including restricted stock you received under the Pier 1 Imports, Inc. 2006 Stock Incentive Plan or the Pier 1 Imports, Inc. 2015 Stock Incentive Plan. If you are a beneficial owner of shares, the voting instructions you receive from your broker, bank or other intermediary will show the shares of Pier 1 Imports common stock held by it on your behalf. You may receive multiple notices if you have more than one account that holds Pier 1 Imports common stock. What happens if I do not give specific voting instructions? If you are a shareholder of record and you sign and return a proxy card without giving specific instructions, the proxy holders will vote your shares in the manner recommended by the board of directors on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the annual meeting. See the response to the question below captioned “Could other matters be decided at the annual meeting?” PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 56
| QUESTIONS AND ANSWERS REGARDING THE PROXY STATEMENT AND ANNUAL MEETING |
If you are a beneficial owner of shares and do not provide your broker, bank or other intermediary with specific voting instructions, then under the rules of the NYSE, your broker, bank or other intermediary may only vote on matters for which it has discretionary power to vote. If your broker, bank or other intermediary does not receive instructions from you on how to vote your shares and such holder does not have discretion to vote on the matter, then that holder will inform the inspector of election that it does not have the authority to vote on the matter with respect to your shares and your shares will not be voted on that matter. Who will count the votes? Representatives of our transfer agent, Computershare Inc., will tabulate the votes and act as inspector of election. Is there a list of shareholders entitled to vote at the annual meeting? The names of shareholders of record entitled to vote at the annual meeting will be available at the annual meeting and for ten days prior to the meeting for any purpose germane to the meeting, between the hours of 8:30 a.m. and 5:00 p.m., local time, at our corporate headquarters at 100 Pier 1 Place, Fort Worth, Texas 76102, by contacting Pier 1 Imports’ corporate secretary at (817) 252-8000. What constitutes a quorum? The presence of the holders of a majority of the outstanding shares of common stock entitled to vote at the annual meeting, present in person or represented by proxy, is necessary to constitute a quorum. How are abstentions and “broker non-votes” counted in determining the presence of a quorum? Abstentions and “broker non-votes” are counted as present and entitled to vote for purposes of determining a quorum. A “broker non-vote” occurs when a broker, bank or other intermediary holding shares for a beneficial owner does not vote on a particular proposal because that holder does not have discretionary voting power to vote on that proposal and has not received voting instructions from the beneficial owner. What are the voting requirements to elect the directors and to approve, or advise the board of directors with respect to, each of the proposals discussed in this proxy statement? PROPOSAL | VOTE REQUIRED | DISCRETIONARY VOTING ALLOWED? | No. 1 – Election of Directors | Affirmative vote of a majority of the votes cast by the shares present in person or represented by proxy at the annual meeting and entitled to vote
on the election of directors | No | No. 2 – Advisory Approval of the Compensation of Pier 1 Imports’ Named Executive Officers | Affirmative vote of a majority of the shares present in person or represented by proxy at the annual meeting and entitled to vote on this proposal is requiredthe matter | No | No. 3 – Approval of an Amendment to ratifyPier 1 Imports’ Restated Certificate of Incorporation to Effect a Reverse Stock Split of Pier 1 Imports Common Stock and a Corresponding Reduction in Authorized Shares | Affirmative vote of a majority of the engagementshares outstanding and entitled to vote on the matter | Yes | No. 4 – Ratification of Engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2019. Abstentions will be counted as represented and entitled to vote on this proposal and will have the effect of a vote “Against” the proposal. | The board of directors unanimously recommends aAffirmative vote “For” the ratification of the audit committee’s engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2019.
Independent Registered Public Accounting Firm Fees
The following table presents fees incurred for professional services rendered by Ernst & Young LLP, Pier 1 Imports’ independent registered public accounting firm, for fiscal years ended March 3, 2018 and February 25, 2017.
| | | | | | | | | | | | MARCH 3, 2018 | | | FEBRUARY 25, 2017 | | Audit Fees (1) | | $ | 1,238,600 | | | $ | 1,172,900 | | Audit Related Fees (2) | | $ | 33,000 | | | $ | 33,000 | | Tax Fees (3) | | $ | 26,800 | | | $ | 81,868 | | All Other Fees (4) | | $ | 2,000 | | | $ | 2,111 | | Total Fees | | $ | 1,300,400 | | | $ | 1,289,879 | |
(1) | | Includes fees for services related to the annual audit of the consolidated financial statements, required statutory audits, if any, reviews of Pier 1 Imports’ quarterly reports on Form10-Q, the independent registered public accounting firm’s report on Pier 1 Imports’ internal control over financial reporting, as required under Section 404 of the Sarbanes-Oxley Act of 2002, and any registration statements during the respective periods. |
(2) | | Includes fees for services related to the Pier 1 Imports, Inc. Stock Purchase Plan and Pier 1 Imports’ consolidated balance sheet audits. |
(3) | | Includes fees for services related to tax compliance, tax advice and tax planning. |
(4) | | Includes fees for subscription to online research tool. |
Pre-approval ofNon-audit Fees
The audit committee has adopted a policy that requires advance approval of all audit, audit related, tax and other services performed by the independent registered public accounting firm. The policy provides forpre-approval by the audit committee of specifically defined audit, audit related and tax services. Unless the specific service has been previouslypre-approved with respect to a fiscal year, the audit committee must approve the permitted service before the independent registered public accounting firm is engaged to perform it. The audit committee has delegated to the chair of the audit committee, or any of its other members, authority to approve permitted services up to $50,000 per engagement provided that anypre-approval decisions are reported to the committee at its next scheduled meeting.
| | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 53 |
QUESTIONS AND ANSWERS REGARDING
THE PROXY STATEMENT AND ANNUAL MEETING
Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the Internet or, upon your request, have delivered printed versions of these materials to you by mail. These materials are being provided in connection with our solicitation of proxies for use at the annual meeting of shareholders to be held on Tuesday, June 26, 2018, at 10:00 a.m. local time or at any adjournment or postponement thereof. Accordingly, we sent a Notice on or about May 16, 2018, to Pier 1 Imports’ shareholders entitled to receive notice of and to vote at the meeting.
All shareholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, shareholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. We encourage shareholders to take advantage of the availability of the proxy materials over the Internet.
You are invited to attend the annual meeting and are requested to vote on the proposals described in this proxy statement. The annual meeting will be held at Pier 1 Imports’ corporate headquarters located at 100 Pier 1 Place, Fort Worth, Texas 76102, on the Mezzanine Level in Conference Center Room C.
How can I access the proxy materials electronically?
The Notice will provide you with instructions regarding how to:
● | | view Pier 1 Imports’ proxy materials for the annual meeting over the Internet; and |
● | | instruct Pier 1 Imports to send future proxy materials to you electronically by email. |
Our proxy materials are also available on our website atwww.pier1.com/annualreport.
If you previously elected to access your proxy materials over the Internet, you will not receive a Notice or printed proxy materials in the mail. Instead, you will receive an email with a link to the proxy materials and voting instructions.
Choosing to receive future proxy materials by email will save us the cost of printing and mailing documents to you thereby lowering the costs associated with the annual meeting. If you choose to receive future proxy materials by email, you will receive an email message next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials by email will remain in effect until you terminate it.
Shareholders of Record: To elect to receive our future proxy statement and annual report materials and notice of Internet availability of proxy materials electronically and manage your account, you may enroll in Investor Center offered by our transfer agent, Computershare Inc. Log into, or activate, your Investor Centeraccount by going tohttp://www.computershare.com/investorand following thestep-by-step instructions through the enrollment process.
Beneficial Owners: If you hold your shares in a brokerage account or with a bank or other intermediary, you may also have the opportunity to receive or access copies of these materials electronically. Please review the information provided in the proxy materials or the Notice mailed to you by your broker, bank or other intermediary regarding the availability of this service.
What is included in these materials?
You will receive the Pier 1 Imports, Inc. 2018 Annual Report, which includes the notice of annual meeting of shareholders, this proxy statement for the annual meeting and the 2018 Form10-K.
If you requested printed versions of these materials by mail, these materials also include the proxy card or voting instruction form for the annual meeting.
How do I change the number of copies of the Notice and other proxy materials being delivered to my household for future mailings?
Although we are permitted to send a single Notice and any other proxy materials to shareholders who share the same address through a procedure called “householding,” we have determined that this procedure is not cost effective. However, if you hold your shares through a broker, bank or other intermediary, your intermediary may household the Notice and other proxy materials. If your intermediary households the Notice and other proxy materials and you would like additional copies of the Notice and any other proxy materials, or if you are currently receiving multiple copies of the Notice or other proxy materials and would like to request householding, please contact your broker, bank or intermediary.
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| QUESTIONS AND ANSWERS REGARDING THE PROXY STATEMENT AND ANNUAL MEETING
|
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
If your shares are registered directly in your name with our transfer agent, Computershare Inc., you are considered the “shareholder of record” with respect to those shares. The Notice and the Notice of Annual Meeting of Shareholders have been sent directly to you by us.
If your shares are held in a brokerage account or with a bank or other intermediary, you are considered the “beneficial owner” of these shares. The Notice has been forwarded to you by your broker, bank or other intermediary that is considered, with respect to those shares, the shareholder of record. As the beneficial owner, you have the right to instruct your broker, bank or other intermediary how to vote your shares by following their instructions for voting over the Internet or by telephone, or by following their instructions to request a voting instruction form that can be completed and returned by mail.
What can I do if I change my mind after I vote my shares?
If you are a shareholder of record, you can revoke your proxy prior to the completion of voting at the annual meeting by:
● | | sending written notice to Pier 1 Imports’ corporate secretary at 100 Pier 1 Place, Fort Worth, Texas 76102 which must be received prior to June 25, 2018; |
● | | timely delivering a valid, later-dated proxy; or |
● | | voting in person at the annual meeting. |
If you are a beneficial owner of shares, you may submit new voting instructions by contacting your broker, bank or other intermediary. You may also vote in person at the annual meeting if you obtain a legal proxy from your broker, bank or other intermediary and present it to the inspector of election with your ballot.
Will my Notice include all my shares?
If you are a shareholder of record, you will receive only one Notice for all the shares of Pier 1 Imports common stock you hold:
● | | in certificate form; and |
and, if you are also a Pier 1 Imports employee, the Notice will also include all the shares of Pier 1 Imports common stock you hold:
● | | in the Pier 1 Imports, Inc. Stock Purchase Plan; and |
● | | in book-entry form for restricted stock, if any, including restricted stock you received under the Pier 1 Imports, Inc. 2006 Stock Incentive Plan or the Pier 1 Imports, Inc. 2015 Stock Incentive Plan. |
If you are a beneficial owner of shares, the voting instructions you receive from your broker, bank or other intermediary will show the shares of Pier 1 Imports common stock held by it on your behalf. You may receive multiple notices if you have more than one account that holds Pier 1 Imports common stock.
What happens if I do not give specific voting instructions?
If you are a shareholder of record and you sign and return a proxy card without giving specific instructions, the proxy holders will vote your shares in the manner recommended by the board of directors on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the annual meeting. See the response to the question below captioned “Could other matters be decided at the annual meeting?”
If you are a beneficial owner of shares and do not provide your broker, bank or other intermediary with specific voting instructions, then under the rules of the NYSE, your broker, bank or other intermediary may only vote on matters for which it has discretionary power to vote. If your broker, bank or other intermediary does not receive instructions from you on how to vote your shares and such holder does not have discretion to vote on the matter, then that holder will inform the inspector of election that it does not have the authority to vote on the matter with respect to your shares and your shares will not be voted on that matter.
Who will count the votes?
Representatives of our transfer agent, Computershare Inc., will tabulate the votes and act as inspector of election.
Is there a list of shareholders entitled to vote at the annual meeting?
The names of shareholders of record entitled to vote at the annual meeting will be available at the annual meeting and for ten days prior to the meeting for any purpose germane to the meeting, between the hours of 8:30 a.m. and 5:00 p.m., local time, at our corporate headquarters at 100 Pier 1 Place, Fort Worth, Texas 76102, by contacting Pier 1 Imports’ corporate secretary at (817)252-8000.
What constitutes a quorum?
The presence of the holders of a majority of the outstanding shares of common stock entitled to vote at the annual meeting, present in person or represented by proxy is necessary to constitute a quorum.
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| QUESTIONS AND ANSWERS REGARDING THE PROXY STATEMENT AND ANNUAL MEETING
|
How are abstentions and “brokernon-votes” counted in determining the presence of a quorum?
Abstentions and “brokernon-votes” are counted as present and entitled to vote for purposes of determining a quorum. A “brokernon-vote” occurs when a broker, bank or other intermediary holding shares for a beneficial owner does not vote on a particular proposal because that holder does not have discretionary voting power to vote on that proposal and has not received voting instructions from the beneficial owner.
What are the voting requirements to elect the directors and to approve, or advise the board of directors with respect to, each of the proposals discussed in this proxy statement?
| | | | | PROPOSAL | | VOTE
REQUIRED
| | DISCRETIONARY
VOTING
ALLOWED?
| No. 1 – Election of Directors
| | Affirmative vote of a majority of the votes cast by the shares present in person or represented by proxy at the annual meeting and entitled to vote on the election of directors
| | No | No. 2 – Advisory Approval of the Compensation of Pier 1 Imports’ Named Executive Officers
| | Affirmative vote of a majority of the shares present in person or represented by proxy at the annual meeting and entitled to vote on the matter
| | No | No. 3 – Ratification of Engagement of Ernst & Young LLP
| | Affirmative vote of a majority of the shares present in person or represented by proxy at the annual meeting and entitled to vote on the matter
| | Yes |
If you are a beneficial owner of shares, your broker, bank or other intermediary is entitled to vote your shares on the ratification of the engagement of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2019, even if they, as the holder of record, do not receive voting instructions from you. If you are a beneficial owner, your broker, bank or other intermediary is not entitled to vote on the election of directors or thenon-binding, advisory resolution to approve the compensation of our named executive officers absent voting instructions from you. Without your voting instructions, a brokernon-vote will occur on these proposals.matter
| How are abstentions and “brokernon-votes” counted in voting?Yes
Election of Directors:
A “majority of the votes cast” means that the number of votes cast “For” a nominee for director exceeds the number of votes cast “Against” the nominee. Abstentions and brokernon-votes are not considered as votes cast.
Other Proposals:
Brokernon-votes will not be counted as a vote either “For” or “Against” Proposal No. 2(non-binding, advisory resolution to approve the fiscal 2018 compensation of Pier 1 Imports’ named executive officers). An abstention will have the same effect as a vote “Against” Proposals No. 2 and No. 3 (ratification of the
engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2019).
Could other matters be decided at the annual meeting?
As of the date we began to deliver the Notice, we did not know of any matters to be brought before the annual meeting other than those described in this proxy statement.
If you vote your shares over the Internet or by telephone, or you sign and return a proxy card or voting instruction form, and other matters are properly presented at the annual meeting for consideration, the proxies appointed by the board of directors (the persons named in your proxy card) will have the discretion to vote on those matters for you.
|
| | | 56 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
If you are a beneficial owner of shares, your broker, bank or other intermediary is entitled to vote your shares on the ratification of the engagement of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2020, and to approve an amendment to our Restated Certificate of Incorporation to effect a reverse stock split and corresponding reduction in authorized shares, in the discretion of the board of directors, even if they, as the holder of record, do not receive voting instructions from you. If you are a beneficial owner, your broker, bank or other intermediary is not entitled to vote on the election of directors or the non-binding, advisory resolution to approve the compensation of our named executive officers absent voting instructions from you. Without your voting instructions, a broker non-vote will occur on these proposals. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 57
| QUESTIONS AND ANSWERS REGARDING THE PROXY STATEMENT AND ANNUAL MEETING |
Who will pay for the cost of this proxy solicitation?
We have hired Innisfree M&A Incorporated to assist in soliciting proxies. We will pay all costs associated with the solicitation, including Innisfree’s fees, which are $15,000 plus expenses. In addition to solicitations by mail, Pier 1 Imports’ officers and employees may solicit proxies on behalf of Pier 1 Imports personally and by telephone or other means, for which they will receive no compensation beyond their normal compensation. We may also make arrangements with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of stock held of record by such persons, and we will reimburse them for their reasonableout-of-pocket and clerical expenses.
Do I need an admission ticket to attend the annual meeting?
You will need an admission ticket or proof of stock ownership to enter the annual meeting. If you are a shareholder of record, your admission ticket is the Notice mailed (or sent electronically) to you or the admission ticket attached to your proxy card if you elected to receive a paper copy of the proxy materials. If you plan to attend the annual meeting, please bring it with you to the annual meeting.
If you are a beneficial owner of shares and you plan to attend the annual meeting, you must present proof of your ownership of Pier 1 Imports common stock, such as a bank or brokerage account statement, to be admitted to the annual meeting.
Pier 1 Imports’ corporate headquarters is accessible to disabled persons and, upon request, it will provide wireless headsets for hearing amplification. Sign interpretation also will be provided upon request. To request either of these accommodations, please contact our Investor Relations Department on or before June 11, 2018. You may make your request by mail to Pier 1 Imports, Inc., Attn.: Investor Relations Department, 100 Pier 1 Place, Fort Worth, Texas 76102 or by telephone at (888)807-4371.
No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the annual meeting. If you have any further questions about attending the meeting, please call Pier 1 Imports’ Investor Relations Department at (888)807-4371.
OTHER BUSINESS
We do not plan to act on any matters at the meeting other than those described in this proxy statement. If any other business should properly come before the meeting, the persons named in the proxy will vote as described above under the question “Could other matters be decided at the annual meeting?”
SHAREHOLDER PROPOSALS FOR 2019 ANNUAL MEETING OF SHAREHOLDERS
To be included in the proxy statement relating to the 2019 annual meeting of shareholders, shareholder proposals made pursuant to SEC Rule14a-8 must be received by Pier 1 Imports’ corporate secretary no later than 5:00 p.m., local time, January 16, 2019.
In order to bring a matter before the 2019 annual meeting of shareholders that is not contained in the proxy statement, a shareholder must comply with the shareholder criteria, advance notice, shareholder information and other provisions of Pier 1 Imports’ bylaws governing shareholders bringing matters before the annual meeting. Pier 1 Imports’ bylaws require that it receive written notice of the matter in proper form with the requisite materials and information no earlier than February 26, 2019, and no later than March 28, 2019. You may contact Pier 1 Imports’ corporate secretary to find out what specific information regarding the matter must be included with the advance notice.
YOUR VOTE IS IMPORTANT
You are encouraged to let us know your preferences by voting over the Internet or by telephone, or, should you request one, by completing and returning a proxy card or voting instruction form.
Michael A. Carter
Executive Vice President, Compliance and General Counsel, Secretary
May 16, 2018
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How are abstentions and “broker non-votes” counted in voting? Election of Directors: A “majority of the votes cast” means that the number of votes cast “For” a nominee for director exceeds the number of votes cast “Against” the nominee. Abstentions and broker non-votes are not considered as votes cast. Other Proposals: Broker non-votes will not be counted as a vote either “For” or “Against” Proposal No. 2 (non-binding, advisory resolution to approve the fiscal 2019 compensation of Pier 1 Imports’ named executive officers). An abstention will have the same effect as a vote “Against” Proposals No. 2, No. 3 (approval of an Amendment to Pier 1 Imports’ Restated Certificate of Incorporation to effect a reverse stock split) and No. 4 (ratification of the engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2020). Could other matters be decided at the annual meeting? As of the date we began to deliver the Notice, we did not know of any matters to be brought before the annual meeting other than those described in this proxy statement. If you vote your shares over the Internet or by telephone, or you sign and return a proxy card or voting instruction form, and other matters are properly presented at the annual meeting for consideration, the proxies appointed by the board of directors (the persons named in your proxy card) will have the discretion to vote on those matters for you. Who will pay for the cost of this proxy solicitation? We have hired Innisfree M&A Incorporated to assist in soliciting proxies. We will pay all costs associated with the solicitation, including Innisfree’s fees, which are $15,000 plus expenses. In addition to solicitations by mail, Pier 1 Imports’ officers and employees may solicit proxies on behalf of Pier 1 Imports personally and by telephone or other means, for which they will receive no compensation beyond their normal compensation. We may also make arrangements with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of stock held of record by such persons, and we will reimburse them for their reasonable out-of-pocket and clerical expenses. Do I need an admission ticket to attend the annual meeting? You will need an admission ticket or proof of stock ownership to enter the annual meeting. If you are a shareholder of record, your admission ticket is the Notice mailed (or sent electronically) to you or the admission ticket attached to your proxy card if you elected to receive a paper copy of the proxy materials. If you plan to attend the annual meeting, please bring it with you to the annual meeting. If you are a beneficial owner of shares and you plan to attend the annual meeting, you must present proof of your ownership of Pier 1 Imports common stock, such as a bank or brokerage account statement, to be admitted to the annual meeting. Pier 1 Imports’ corporate headquarters is accessible to disabled persons and, upon request, it will provide wireless headsets for hearing amplification. Sign interpretation also will be provided upon request. To request either of these accommodations, please contact our Investor Relations Department on or before June 5, 2019. You may make your request by mail to Pier 1 Imports, Inc., Attn.: Investor Relations Department, 100 Pier 1 Place, Fort Worth, Texas 76102 or by telephone at (888) 807-4371. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the annual meeting. If you have any further questions about attending the meeting, please call Pier 1 Imports’ Investor Relations Department at (888) 807-4371. PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 58
OTHER BUSINESS We do not plan to act on any matters at the meeting other than those described in this proxy statement. If any other business should properly come before the meeting, the persons named in the proxy will vote as described above under the question “Could other matters be decided at the annual meeting?” SHAREHOLDER PROPOSALS FOR 2020 ANNUAL MEETING OF SHAREHOLDERS To be included in the proxy statement relating to the 2020 annual meeting of shareholders, shareholder proposals made pursuant to SEC Rule 14a-8 must be received by Pier 1 Imports’ corporate secretary no later than 5:00 p.m., local time, January 10, 2020. In order to bring a matter before the 2020 annual meeting of shareholders that is not contained in the proxy statement, a shareholder must comply with the shareholder criteria, advance notice, shareholder information and other provisions of Pier 1 Imports’ bylaws governing shareholders bringing matters before the annual meeting. Pier 1 Imports’ bylaws require that it receive written notice of the matter in proper form with the requisite materials and information no earlier than February 20, 2020, and no later than March 21, 2020, provided that the date of the annual meeting is not more than 30 days before or after June 19, 2020. You may contact Pier 1 Imports’ corporate secretary to find out what specific information regarding the matter must be included with the advance notice. YOUR VOTE IS IMPORTANT You are encouraged to let us know your preferences by voting over the Internet or by telephone, or, should you request one, by completing and returning a proxy card or voting instruction form. 
Robert E. Bostrom Executive Vice President, Chief Legal and Compliance Officer and Corporate Secretary May 9, 2019 PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 59
APPENDIX A CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
PIER 1 IMPORTS, INC. PIER 1 IMPORTS, INC., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify as follows: FIRST: That at a meeting of the Board of Directors of the Corporation, resolutions were duly adopted setting forth a proposed amendment of the Restated Certificate of Incorporation of said Corporation, declaring said amendment to be advisable and calling a meeting of the shareholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows: RESOLVED, that upon the filing and effectiveness (the "Effective Time") pursuant to the General Corporation Law of the State of Delaware (the "DGCL") of this Certificate of Amendment to the Restated Certificate of Incorporation of the Corporation, each [•](1) shares of the Corporation’s Common Stock issued and outstanding or held in treasury shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one validly issued, fully paid and non-assessable share of Common Stock, par value $0.001 per share, of the Corporation. No fractional shares will be issued. In lieu thereof, the Corporation's transfer agent shall aggregate all fractional shares and sell them as soon as practicable after the Effective Time at the then-prevailing prices on the open market, on behalf of those shareholders who would otherwise be entitled to receive a fractional share, and after the transfer agent's completion of such sale, shareholders shall receive a cash payment from the transfer agent in an amount equal to their respective pro rata shares of the total net proceeds of that sale. Each certificate that immediately prior to the Effective Time represented shares of Common Stock (an “Old Certificate”) shall thereafter represent that number of shares of Common Stock into which the shares of Common Stock represented by the Old Certificate shall have been combined, subject to the elimination of fractional share interests as described above. FURTHER RESOLVED, that upon the Effective Time, the first paragraph of Article FOURTH of the Corporation's Restated Certificate of Incorporation is hereby amended to read in its entirety as set forth below: “FOURTH: The total number of shares of all classes of stock which the corporation shall have authority to issue is five hundred twenty million (520,000,000) [[•] ([•])].(1) The total number of shares of stock which the corporation shall have authority to issue are divided into two classes, five hundred million (500,000,000)[[•] ([•])](1) shares of which are designated as Common Stock having a par value of one-tenth of one cent ($0.001) per share (the “Common Stock”), and twenty million (20,000,000) shares of which are designated as Preferred Stock having a par value of one dollar ($1.00) per share (the “Preferred Stock”).” FURTHER RESOLVED: This Certificate of Amendment shall become effective as of [ ], 2019 at [ ] [a.m./p.m.]. (1) Amounts to be set based on reverse stock split ratio of either 1-for-5, 1-for-10 or 1-for-20 and a corresponding reduction in authorized shares as determined by the Board of Directors in its discretion. SECOND: The foregoing amendment was duly adopted by the shareholders of the Corporation in accordance with Section 242 of the General Corporation Law of the State of Delaware on June 19, 2019, at an Annual Meeting of the Shareholders of the Corporation, and such amendment has not been subsequently modified or rescinded. | | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement | | 57 |
PIER 1 IMPORTS, INC.
ANNUAL MEETING OF SHAREHOLDERS
Pier 1 Imports, Inc.’s Corporate Headquarters
100 Pier 1 Place
Fort Worth, Texas 76102
at 10:00 a.m., local time
on June 26, 2018
Reminder: You must present your admission documents as described above under the question “Do I need an admission ticket to attend the annual meeting?” at the admissions table in order to attend the Pier 1 Imports, Inc. Annual Meeting of Shareholders. Doors will open at 9:00 a.m., local time.
Parking will be available on a first-come, first-served basis.
If you have any further questions about attending the meeting, please call
Pier 1 Imports’ Investor Relations Department at (888)807-4371.
IN WITNESS WHEREOF, said corporation has caused this certificate to be signed this ________________ day of ________________, 2019. | | | 58 | | PIER 1 IMPORTS, INC. | 2018 Proxy Statement |
By:_______________________________________ Name: ____________________________________ Title:______________________________________ | | | Using a black inkpen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. | | ☒ |
Admission Ticket on Reverse Side
Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Eastern Time, on June 25, 2018.
Vote by Internet
Go towww.investorvote.com/PIR
Or scan the QR code with your smartphone
Follow the steps outlined on the secure website
Vote by telephone
Call toll free1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone.
Outside the USA, US territories & Canada call1-781-575-2300.
Follow the instructions provided by the recorded message.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.
PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 60
Pier 1 Imports, Inc. Annual Meeting of Shareholders Pier 1 Imports, Inc.’s Corporate Headquarters 100 Pier 1 Place Fort Worth, Texas 76102 at 10:00 a.m., local time on June 19, 2019 Reminder: You must present your admission documents as described above under the question “Do I need an admission ticket to attend the annual meeting?” at the admissions table in order to attend the Pier 1 Imports, Inc. Annual Meeting of Shareholders. Doors will open at 9:00 a.m., local time. Parking will be available on a first-come, first-served basis. If you have any further questions about attending the meeting, please call Pier 1 Imports’ Investor Relations Department at (888) 807-4371 | | | | | q | | To vote by mail, mark, sign and date your proxy card and detach and return it in the enclosed envelope. | | q |
| | | | | A | | Proposals — | | The Board of Directors recommends a vote “FOR” the election as a director of each of the nominees named in Proposal | | | | | No. 1 and a vote “FOR” Proposal Nos. 2 and 3. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1. | | Election of Directors: | | For | | Against | | Abstain | | | | For | | Against | | Abstain | | | | For | | Against | | Abstain | | + | | | PIER 1 IMPORTS, INC. | 2019 Proxy Statement | 61
01 - Claire H. Babrowski
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| | 02 - Cheryl A. Bachelder
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| | 03 - Robert L. Bass
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| | | | | 04 - Hamish A. Dodds
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| | 05 - Brendan L. Hoffman
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| | 06 - Alasdair B. James
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| | | | | 07 - Terry E. London
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| | 08 - Michael A. Peel
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| | 09 - Ann M. Sardini
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| | | | | | | | | | | | | | | | | | | | | | 2. | | Anon-binding, advisory resolution to approve the compensation of Pier 1 Imports’ named executive officers as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion in the Proxy Statement under the caption “Compensation.” | | For ☐ | | Against ☐ | | Abstain ☐ | | 3. | | The ratification of the audit committee’s engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2019. | | | | For ☐ | | Against ☐ | | Abstain ☐ |
NOTE: In their discretion, the proxies are authorized to vote, as described in the Proxy Statement, upon any other business as may properly come before the Annual Meeting or any adjournment or postponement of the meeting.
| | | B | | Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below |
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
| | | | | | | | | Date (mm/dd/yyyy) — Please print date below. | | | | Signature 1 — Please keep signature within the box. | | | | Signature 2 — Please keep signature within the box. |
IF VOTING BY MAIL, YOUMUST COMPLETE AND SIGN SECTION B ABOVE.
FOR ADDRESS CHANGES OR COMMENTS, PLEASE COMPLETE SECTION C ON THE REVERSE SIDE OF THIS CARD.
02SU2D
| | | | | | | | | Admission Ticket
Pier 1 Imports, Inc.
2018 Annual Meeting of Shareholders
Tuesday, June 26, 2018 at 10:00 a.m. local time
Pier 1 Imports, Inc. Corporate Headquarters
Mezzanine Level, Conference Center Room C
100 Pier 1 Place, Fort Worth, Texas 76102
If you plan to attend the meeting in person, please bring thisADMISSION TICKET with you to the meeting.
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Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders to be held on June 26, 2018.You can view Pier 1 Imports, Inc.’s 2018 Annual Report, which includes Pier 1 Imports, Inc.’s Form 10-K for the fiscal year ended March 3, 2018, Notice of Annual Meeting, and 2018 Proxy Statement, on the Internet at: http://www.investorvote.com/PIR
q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.qUsing a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be received by 11:59 p.m., Eastern Time, on June 18, 2019. Online Go to www.investorvote.com/PIR or scan the QR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/PIR Annual Meeting Proxy Card • IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. • 2. A non-binding, advisory resolution to approve the compensation of Pier 1 Imports’ named executive officers as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion in the Proxy Statement under the caption “Compensation.” 4. The ratification of the audit committee’s engagement of Ernst & Young LLP as Pier 1 Imports’ independent registered public accounting firm for fiscal 2020. Proposals-TheBoardofDirectorsrecommendsavote“FOR”theelectionasadirectorofeachofthenomineesnamedinProposalNo. 1andavote“FOR”ProposalNos.2,3and4.A + 1. Election of Directors: For Against Abstain 01 - Cheryl A. Bachelder 02 - Robert L. Bass 04 - Brendan L. Hoffman 05 - Katherine M. A. (“Allie”) Kline 07 - Michael A. Peel 08 - Ann M. Sardini For Against Abstain For Against Abstain For Against Abstain 03 - Hamish A. Dodds 06 - Terry E. London For Against Abstain 3. A proposal to approve an amendment to Pier 1 Imports’ Restated Certificate of Incorporation to effect a reverse stock split of Pier 1 Imports common stock and a corresponding reduction in authorized shares, in the discretion of the board of directors, at any time prior to the 2020 annual meeting of shareholders. NOTE: In their discretion, the proxies are authorized to vote, as described in the Proxy Statement, upon any other business as may properly come before the Annual Meeting or any adjournment or postponement of the meeting. AuthorizedSignatures—Thissectionmustbecompletedforyourvotetobecounted.—DateandSignBelowB Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. + 031X2D
| | | | |  | | PIER 1 IMPORTS, INC.
Admission Ticket Pier 1 Imports, Inc. 2019 Annual Meeting of Shareholders Wednesday, June 19, 2019 at 10:00 a.m., local time, Pier 1 Imports, Inc. Corporate Headquarters Mezzanine Level, Conference Center Room C 100 Pier 1 Place, Fort Worth, Texas 76102 If you plan to attend the meeting in person, please bring This ADMISSION TICKET with you to the meeting. Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders to be held on June 19, 2019. You can view Pier 1 Imports, lnc.’s 2019 Annual Report, which includes Pier 1 Imports, lnc.’s Form 10-K for the fiscal year ended March 2, 2019, Notice of Annual Meeting, and 2019 Proxy Statement, on the internet at: http://www.investorvote.com/PIR Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/PIR • IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. • Proxy — Pier 1 Imports, Inc. + The Board of Directors of Pier 1 Imports, Inc. solicits this proxy for use at the Annual Meeting of Shareholders on June 19, 2019. The shareholder whose signature appears on the reverse side of this proxy card hereby appoints ROBERT E. BOSTROM and GEORGE R. MCKOWN, and each of them, proxy or proxies with full power of substitution and revocation as to each of them, to represent and to vote as set forth on this proxy card or as directed by telephone or Internet all the shares of the common stock of Pier 1 Imports, Inc. held of record by the shareholder on April 22, 2019, at the Annual Meeting of Shareholders to be held at 10:00 a.m., local time, on June 19, 2019 at Pier 1 Imports, Inc. Corporate Headquarters, Mezzanine Level, Conference Center Room C, 100 Pier 1 Place, Fort Worth, Texas 76102, or any adjournment or postponement of the meeting. This proxy, when properly executed, will be voted in the manner directed by the shareholder. If no direction is made, this proxy will be voted “FOR” the election as a director of each of the nominees named in Proposal No. 1 and voted “FOR” Proposal Nos. 2, 3 and 4. The proxies are authorized to vote, as described in the Proxy Statement, in their discretion, upon any other business as may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting. You are encouraged to specify your choices by marking the appropriate boxes (SEE REVERSE SIDE) but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations. The proxies cannot vote your shares unless you sign and return this card or vote by telephone or the Internet. Non-VotingItemsC Change of Address — Please print new address below. Comments — Please print your comments below. + 100 Pier 1 Place, Fort Worth, Texas 76102
PROXY
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The Board of Directors of Pier 1 Imports, Inc. solicits this proxy for use at the Annual Meeting of Shareholders on June 26, 2018.
The shareholder whose signature appears on the reverse side of this proxy card hereby appoints TERRY E. LONDON, MICHAEL W. TANKERSLEY and MICHAEL A. CARTER, and each of them, proxy or proxies with full power of substitution and revocation as to each of them, to represent and to vote as set forth on this proxy card or as directed by telephone or Internet all the shares of the common stock of Pier 1 Imports, Inc. held of record by the shareholder on April 27, 2018, at the Annual Meeting of Shareholders to be held at 10:00 a.m. local time on June 26, 2018 at Pier 1 Imports, Inc. Corporate Headquarters, Mezzanine Level, Conference Center Room C, 100 Pier 1 Place, Fort Worth, Texas 76102, or any adjournment or postponement of the meeting.
This proxy, when properly executed, will be voted in the manner directed by the shareholder. If no direction is made, this proxy will be voted “FOR” the election as a director of each of the nominees named in Proposal No. 1 and voted “FOR” Proposal Nos. 2 and 3. The proxies are authorized to vote, as described in the Proxy Statement, in their discretion, upon any other business as may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.
You are encouraged to specify your choices by marking the appropriate boxes (SEE REVERSE SIDE) but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations. The proxies cannot vote your shares unless you sign and return this card or vote by telephone or the Internet.
(Continued and to be marked, dated, and signed on the other side)
| | | | | Change of Address— Please print new address below. | | | | Comments— Please print your comments below. |
IF VOTING BY MAIL, YOUMUST COMPLETE AND SIGN SECTION B ON THE REVERSE SIDE OF THIS CARD.
| | | | | ⬛ | | FOR ADDRESS CHANGES OR COMMENTS, PLEASE COMPLETE SECTION C ABOVE. | | + |
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