UNITED STATES SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
PROXY STATEMENT
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(Amendment No. )
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240.14a-12
PIER 1 IMPORTS, INC.
(Name of Registrant as Specified In Its Charter)
PIER 1 IMPORTS, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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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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PIER 1 IMPORTS, INC.
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
May 19, 2000
Dear Shareholder:
On behalf of the Board of Directors and Management, you are cordially
invited to attend the Annual Meeting of Shareholders to be held at 10:00
a.m., local time, on Thursday, June 22, 2000, at the Renaissance Worthington
Hotel, Pecos I room, 200 Main Street, Fort Worth, Texas. The formal Notice
of the Annual Meeting of Shareholders and Proxy Statement are attached.
Please read them carefully.
It is important that your shares be voted at the meeting in accordance
with your preference. If you do not plan to attend, please complete the
proxy card located in the envelope's address window by indicating your vote
on the issues presented and sign, date and return the proxy in the prepaid
envelope provided. If you are able to attend the meeting and wish to vote
in person, you may withdraw your proxy at that time.
Sincerely,
Marvin J. Girouard
Chairman and Chief Executive Officer
PIER 1 IMPORTS, INC.
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 22, 2000
The Annual Meeting of Shareholders of Pier 1 Imports, Inc., a Delaware
corporation (the "Company"), will be held on June 22, 2000, at 10:00 a.m.,
local time, at the Renaissance Worthington Hotel, Pecos I room, 200 Main
Street, Fort Worth, Texas for the following purposes:
(1) To elect six Directors to hold office until the next Annual
Meeting of Shareholders.
(2) To transact any other business as may properly come before the
Annual Meeting or any adjournment.
Only holders of record of Common Stock at the close of business on May
3, 2000, are entitled to notice of and to vote at the Annual Meeting. A
complete list of shareholders entitled to vote will be available for
examination at the Company's offices at 301 Commerce Street, Suite 600, Fort
Worth, Texas by any Company Shareholder during ordinary business hours for a
period of ten days prior to the date of the Annual Meeting.
To ensure that your vote will be counted, please complete, sign and
date the enclosed proxy card and return it promptly in the enclosed prepaid
envelope, whether or not you plan to attend the Annual Meeting. Your proxy
may be revoked in the manner described in the accompanying Proxy Statement
at any time before it has been voted at the Annual Meeting.
By Order of the Board of Directors,
J. Rodney Lawrence
Senior Vice President and Secretary
May 19, 2000
Fort Worth, Texas
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY,
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING
PIER 1 IMPORTS, INC.
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
________________________
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 22, 2000
This Proxy Statement is being furnished to the holders of Common Stock,
par value $1.00 per share (the "Common Stock"), of Pier 1 Imports, Inc., a
Delaware corporation (the "Company"), in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the Annual
Meeting of Shareholders to be held on June 22, 2000, and at any adjournments
or postponements thereof. Shareholders representing a majority of the
Common Stock outstanding and entitled to vote must be present in person or
represented by proxy in order to constitute a quorum to conduct business at
the meeting. The Board of Directors has fixed the close of business on May
3, 2000, as the record date for the determination of the Shareholders
entitled to notice of and to vote at the Annual Meeting. On the record
date, 98,754,714 shares of Common Stock were outstanding and entitled to be
voted at the meeting. Each share of Common Stock entitles the registered
holder thereof to one vote on each matter submitted to a vote at the
meeting.
All shares of Common Stock represented at the Annual Meeting by
properly executed proxies received prior to the meeting, unless the proxies
have been properly revoked prior to voting, will be voted in accordance with
the instructions on such proxies. If no instructions are given, proxies
will be voted in accordance with the recommendations of the Board of
Directors, as noted in this Proxy Statement. Any proxy given pursuant to
this solicitation may be revoked by the person giving it at any time before
it is voted. Proxies may be revoked by delivery to the Corporate Secretary
of the Company at the Company's principal executive offices at 301 Commerce
Street, Suite 600, Fort Worth, Texas 76102 of a written notice of revocation
bearing a later date than the proxy, or by duly executing and delivering to
the Corporate Secretary a subsequent proxy relating to the same shares, or
by attending the Annual Meeting and voting in person (although attendance at
the Annual Meeting will not in and of itself constitute revocation of a
proxy). The accompanying proxy card also contains instructions on voting by
telephone in place of executing and returning the card. Shares voted by
telephone may be revoked by providing subsequent telephone voting
instructions or by using any method described above for revoking proxies.
With regard to all proposals submitted for Shareholder vote, abstentions are
not counted as voting for approval of a matter and, therefore, will have the
same effect as a vote "against" the matter, even though the Shareholder may
interpret such action differently. Votes withheld, including broker non-
votes, are neither counted as voting for nor against a matter and,
therefore, as to that matter will not be treated as shares present and will
be disregarded.
The accompanying proxy also covers shares of Common Stock held for
participants in the Company's Stock Purchase Plan and will serve as voting
instructions for the Plan administrators to vote such shares.
This Proxy Statement and the accompanying proxy are being first sent to
Shareholders on May 19, 2000.
ELECTION OF DIRECTORS
Six Directors of the Company are to be elected at the Annual Meeting to
serve until the next Annual Meeting of Shareholders of the Company and until
their respective successors shall have been elected and qualified. Unless
authority to vote for one or more Directors is withheld, proxies will be
voted for the election of the persons listed below or, if any such person
shall unexpectedly become unable or unwilling to accept nomination or
election, for the election of such other person as the Board of Directors
may recommend. Directors will be elected by holders of a majority of the
shares of Common Stock present in person or represented by proxy and
entitled to vote. The persons listed below are Directors of the Company now
in office and are nominees for re-election. The Board of Directors
recommends a vote "FOR" the nominees.
Nominees for Directors
MARVIN J. GIROUARD
Marvin J. Girouard, age 60, has served as Chairman and Chief Executive
Officer of the Company and has been a member of the Executive Committee
since December 1998. He has been a Director of the Company since August
1988. From June 1998 to February 1999, Mr. Girouard served as President and
Chief Executive Officer of the Company and from August 1988 to June 1998,
Mr. Girouard served as President and Chief Operating Officer. From May 1985
until August 1988, he served as Senior Vice President - Merchandising of
Pier 1 Imports (U.S.), Inc., a wholly owned subsidiary of the Company. He
is also a Director of Tandy Brands Accessories, Inc. and Brinker
International, Inc.
SALLY F. McKENZIE
Sally F. McKenzie, age 71, has been a Director of the Company since
November 1985 and is a member of the Audit Committee. Mrs. McKenzie has
served as a civic leader on a local, regional and national basis for more
than ten years.
JAMES M. HOAK, JR.
James M. Hoak, Jr., age 56, has been a Director of the Company since
September 1991 and is Chairman of the Executive Committee and Chairman of
the Audit Committee. He has served as Chairman and a Principal of Hoak
Capital Corporation (private equity investment firm) since September 1991.
He also served as Chairman of HBW Holdings, Inc. (an investment bank) from
July 1996 to November 1999, and continues to serve as a director of this
firm. He served as Chairman of Heritage Media Corporation (a broadcasting
and marketing services firm) from its inception in August 1987 to its sale
in August 1997. From February 1991 to January 1995, he served as Chairman
and Chief Executive Officer of Crown Media, Inc. (a cable television
company). He is also a Director of PanAmSat Corporation, TeleCorp PCS,
Inc., and Texas Industries, Inc.
TOM M. THOMAS
Tom M. Thomas, age 58, has been a Director of the Company since
September 1998 and is Chairman of the Compensation Committee and is a member
of the Executive Committee. Mr. Thomas has served as Senior Partner of
Thomas & Culp, L.L.P. since 1994.
JOHN H. BURGOYNE
John H. Burgoyne, age 58, has been a Director of the Company since
February 1999 and is a member of the Compensation Committee. Mr. Burgoyne
has served as President of Burgoyne and Associates since March 1996. From
May 1995 to March 1996 Mr. Burgoyne served as the General Manager of IBM's
Travel Industry sector for their Asia Pacific Region. Prior to that time he
served as the President and General Manager of IBM China Corporation Ltd.
MICHAEL R. FERRARI
Michael R. Ferrari, age 60, has been a Director of the Company since
February 1999 and is a member of the Audit Committee. Dr. Ferrari has
served as Chancellor of Texas Christian University since July 1998 and has
served as Professor of Management in the M. J. Neeley School of Business at
Texas Christian University since July 1998. From 1985 to 1998, he served as
President of Drake University.
Board Meetings, Committees and Fees
During the last fiscal year, the Board of Directors of the Company met
on seven occasions. Each of the Directors attended at least 75% of the
total number of meetings of the Board of Directors and of the Committees on
which he or she served.
Each Director who was not an officer of the Company was paid a fee of
$33,000 during the past fiscal year and also received $1,750 for each Board
meeting attended, $1,000 for each telephonic Board Meeting attended and $750
for each committee meeting attended. Directors participating in the
Director Deferred Stock Program must defer 50%, and may elect to defer up to
100%, of their cash fees, which are matched 50% by the Company, into an
equivalent value of deferred stock units. Upon retirement from the Board,
Directors receive shares of Common Stock in exchange for their deferred
stock units. Messrs. Burgoyne, Ferrari, Hoak and Thomas deferred all of
their cash fees last year. Each Director receives an annual grant of stock
options under the Company's 1999 Stock Plan covering 6,000 shares of Common
Stock. In fiscal year 2000 Messrs. Burgoyne, Ferrari and Thomas each
received one-time grants of 5,000 shares as new directors. Mrs. McKenzie
participates in the Company's Stock Purchase Plan by making monthly
contributions and receives 50% matching contributions from the Company.
Directors of the Company who are employees of the Company serve without
compensation for their services as Directors of the Company.
Executive/Nominating Committee. The Executive Committee is entitled to
direct and manage the business and affairs of the Company in the intervals
between Board meetings, with all the powers and authority of the Board in
the management of the business and affairs of the Company to the extent
permitted by law and the By-laws. The Executive Committee also performs the
functions of the nominating committee and is responsible for considering and
making recommendations to the Board regarding nominees for election to the
Board. The Executive Committee will consider recommendations submitted by
Shareholders for nominees for election to the Board. The Executive
Committee met on one occasion during the last fiscal year. Executive
Committee members are Directors Hoak (chairman), Girouard and Thomas.
Audit Committee. The Audit Committee provides assistance to the Board
in fulfilling its oversight responsibility relating to the Company's
accounting, auditing, financial reporting and systems of internal controls
regarding finance and accounting. The Audit Committee recommends a firm of
independent auditors for appointment by the Board and reviews their
performance, consults with management on the appointment of internal
auditors and reviews their performance, and reviews with management and the
independent auditors the adequacy of the Company's financial controls and
reporting process. The Audit Committee also reviews the Company's quarterly
and year-end financial statements. The Audit Committee held five meetings
during the last fiscal year. Audit Committee members are Directors Hoak
(chairman), McKenzie and Ferrari.
Compensation Committee. The Compensation Committee establishes, amends
and oversees the Company's administration of incentive-based and other
compensation plans for senior executive officers and such other executive
officers as the Compensation Committee deems appropriate. It also oversees
the Company's administration of other compensation benefit plans and
recommends to the Board compensation of Directors and changes in or the
establishment of compensation plans for the Company's employees. The
Compensation Committee held four meetings and took action by unanimous
written consent on one occasion during the last fiscal year. Compensation
Committee members are Directors Thomas (chairman) and Burgoyne. During the
last fiscal year the Compensation Committee also included Director Hoak and
former director Craig C. Gordon.
Security Ownership of Management
The following table indicates the ownership on April 1, 2000, of the
Company's Common Stock by each Director and nominee, each executive officer
named in the Summary Compensation Table, and all Directors and executive
officers as a group:
Shares Percent
Beneficially of
Name Owned(1)(2) Class
- ---- ----------- ------
John H. Burgoyne. . . . . . . 21,485 *
Marvin J. Girouard. . . . . . 1,584,360 1.6%
Michael R. Ferrari. . . . . . 20,180 *
James M. Hoak, Jr.. . . . . . 188,654 *
Sally F. McKenzie . . . . . . 26,022 *
Jay R. Jacobs . . . . . . . . 128,518 *
J. Rodney Lawrence. . . . . . 192,553 *
Phil E. Schneider . . . . . . 214,098 *
Tom M. Thomas . . . . . . . . 23,854 *
Charles H. Turner . . . . . . 110,508 *
All Directors and Executive
Officers as a Group . . . . 2,837,306 2.84%
- ------------------
(1) Included in the table are shares acquired through and held by the
Company's Stock Purchase Plan. Also included in the table are shares
issuable within 60 days of April 1, 2000, to Mr. Burgoyne (11,000
shares), Mr. Girouard (608,041 shares), Mr. Ferrari (11,000 shares),
Mr. Hoak (54,264 shares), Mrs. McKenzie (19,500 shares), Mr. Jacobs
(97,950 shares), Mr. Lawrence (131,813 shares), Mr. Schneider (142,865
shares), Mr. Thomas (11,000 shares), Mr. Turner (83,063 shares) and to
all Directors and Executive Officers as a group (1,413,062 shares),
upon the exercise of stock options granted pursuant to the Company's
stock option plans.
(2) Unless otherwise indicated, the beneficial owner has sole voting and
investment power with respect to his or her shares. Includes 1,680
shares over which Mr. Hoak has shared voting and investment power and
15,000 shares over which Mr. Lawrence has shared voting and investment
power.
* Represents less than 1% of the outstanding shares of such class.
EXECUTIVE COMPENSATION
The following table sets forth a summary of the compensation with
respect to the past three fiscal years for services rendered in all
capacities to the Company and its subsidiaries by the Chief Executive
Officer, and the four other most highly compensated executive officers. The
number of shares of restricted stock and common stock subject to stock
options during the 1998 fiscal year has been adjusted to reflect the effect
of the three for two stock split effected as a stock dividend in July 1998.
Summary Compensation Table
Annual Compensation Long-Term Compensation
--------------------------------- ---------------------------
Other Securities All
Name and Fiscal Annual Restricted Underlying Other
Principal Position Year Salary Bonus Compensation(1) Stock Awards(2) Options(#) Compensation(3)
- ------------------ ------ -------- -------- ------------ --------------- ---------- -----------
Marvin J. Girouard 2000 $755,000 $495,470 $40,658 $ -- 200,000 $167,428
Chairman and Chief 1999 725,000 511,125 38,220 -- 100,000 160,342
Executive Officer 1998 600,000 675,000 42,296 481,250 150,000 171,151
Charles H. Turner 2000 250,000 115,000 30,998 -- 50,000 29,993
Senior Vice President, 1999 225,000 105,750 26,207 -- 30,000 28,481
Finance, Chief 1998 195,000 146,250 26,948 231,000 72,000 24,798
Financial Officer
and Treasurer
Jay R. Jacobs 2000 250,000 115,000 23,845 -- 50,000 27,591
Senior Vice President, 1999 225,000 105,750 23,012 -- 30,000 32,339
Merchandising 1998 185,000 138,750 20,635 231,000 72,000 19,741
J. Rodney Lawrence 2000 200,000 75,000 26,363 -- 50,000 26,861
Senior Vice President, 1999 190,000 71,440 24,246 -- 30,000 26,059
Legal Affairs 1998 180,000 125,000 34,497 231,000 72,000 27,813
Phil E. Schneider 2000 190,000 70,000 26,362 -- 50,000 20,492
Senior Vice President, 1999 175,000 65,800 25,113 -- 30,000 19,295
Marketing 1998 160,000 115,000 21,903 231,000 72,000 20,046
- ----------------
<FN>
(1) Includes reimbursements for club dues, automobile expenses, financial planning and medical expenses.
(2) Dollar value of restricted stock is computed using the closing price of the Common Stock, on the date of
grant of the restricted stock. Recipients of restricted stock awards receive cash dividends paid on such
stock. The restricted stock grants for the 1998 fiscal year to Messrs. Girouard (37,500 shares), Turner
(18,000 shares), Jacobs (18,000 shares), Lawrence (18,000 shares) and Schneider (18,000 shares) vest 25%
annually on each of the four anniversaries of the date of grant. The total amount and the dollar value
of restricted stock held at February 26, 2000, were: Mr. Girouard, 84,825 shares ($657,393.75); Mr.
Turner, 9,000 shares ($69,750), Mr. Jacobs, 9,000 shares ($69,750), Mr. Lawrence, 9,000 shares ($69,750)
and Mr. Schneider, 9,000 shares ($69,750).
(3) Includes in fiscal year 2000 Company matching contributions under the Company's 401(k) Retirement Plan of
$4,942 for Mr. Girouard, $5,219 for Mr. Turner, $5,354 for Mr. Jacobs, $4,953 for Mr. Lawrence and $4,995
for Mr. Schneider; matching contributions under the Company's Benefit Restoration Plan of $37,497 for Mr.
Girouard, $6,635 for Mr. Turner, $4,289 for Mr. Jacobs, $8,215 for Mr. Lawrence and $7,748 for Mr.
Schneider; and matching contributions under the Company's Stock Purchase Plan of $124,989 for Mr.
Girouard, $18,140 for Mr. Turner, $17,947 for Mr. Jacobs, $13,692 for Mr. Lawrence and $7,748 for Mr.
Schneider.
The Company has entered into Post-Employment Consulting Agreements with
Messrs. Girouard, Turner, Jacobs, Lawrence, Schneider and three other
executive officers (individually, an "Executive"). Upon termination of the
Executive's employment by the Company prior to retirement other than for
"cause" or by the Executive for "good reason," as defined in the agreements,
the Company will retain the Executive as a consultant for a maximum of two
years, depending on the Executive's number of years of service as an officer
of the Company, and pay a monthly fee equal to one-twelfth of his base salary
immediately prior to termination. The Executive will also receive 50% of the
Executive's cost for continuing medical and dental insurance coverage. If
the Executive enters into employment during the consulting period that
provides compensation equal to or greater than the amount of the consulting
fees, the Company will pay the Executive an immediate one-time payment in the
amount of 50% of the difference between the total fees that otherwise would
have been payable during the term of the consulting agreement and the
aggregate fees actually paid prior to reemployment. If the Executive enters
into employment during the consulting period that provides compensation less
than the consulting fees, the Company will reduce the monthly consulting fee
by the amount of the monthly compensation for reemployment and at the end of
the consulting period will pay the Executive 50% of the difference between
the total fees that otherwise would have been payable during the term of the
consulting agreement and the aggregate fees actually paid.
The Company maintains two Supplemental Retirement Plans to aid in
attracting and retaining key executives. Messrs. Girouard, Lawrence and one
other executive officer participate and are fully vested in a plan which
provides that upon death, disability, retirement or other termination (but
commencing at retirement age), a participant will receive annual benefits
over 15 years (or a discounted lump-sum) which, when added to Social Security
retirement benefits, generally equal his vested percentage of 50% of his
highest average annual salary and bonus (based on a three-year average), but
in no event more than $500,000. If a participant retires after age 65, the
percentage of his highest average annual salary and bonus (prior to age 65)
used to calculate his benefit is increased above 50% by 5% for each year of
service after age 65, but not greater than 65%. All participants in the plan
have elected to receive benefits in a lump-sum distribution. Messrs. Turner,
Jacobs, Schneider and two other executive officers participate in a different
supplemental retirement plan which provides that upon death, disability,
retirement or other termination (but commencing at retirement age), a
participant will receive an annuity based on annual benefits which, when
added to Social Security retirement benefits, generally equal a percentage
(calculated as 3% multiplied by the participant's total number of years of
service to a maximum of 60%) of the participant's highest average annual
salary and bonus (based on a three-year average), but in no event more than
$500,000. If a participant retires prior to age 65, the percentage of his
highest average annual salary and bonus used to calculate his benefit is
reduced by 5% for each year his retirement precedes age 65. Benefits vest
for each participant at the rate of 10% per year of participation in the
plan. The years of credited service in the plan for Mr. Turner are 8 years,
Mr. Jacobs, 22 years and Mr. Schneider, 13 years; and, the years of
participation in the plan for Mr. Turner are 4 years, Mr. Jacobs, 4 years and
Mr. Schneider 4 years.
Option Grants in the Last Fiscal Year
The following table sets forth information relating to stock options
granted during the fiscal year ended February 26, 2000, to the executive
officers named in the Summary Compensation Table.
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price Expiration Grant Date
Name Granted(1) Fiscal Year (per share)(2) Date Present Value(3)
- ---- ---------- ----------- -------------- ---------- ----------------
Marvin J. Girouard 200,000 8.57% $5.8125 09/14/09 $596,200
Charles H. Turner 50,000 2.14 5.8125 09/14/09 149,050
Jay R. Jacobs 50,000 2.14 5.8125 09/14/09 149,050
J. Rodney Lawrence 50,000 2.14 5.8125 09/14/09 149,050
Phil E. Schneider 50,000 2.14 5.8125 09/14/09 149,050
- ----------------
<FN>
(1) Options to Messrs. Girouard, Turner, Jacobs, Lawrence and Schneider covering 200,000,
50,000, 50,000, 50,000 and 50,000 respectively, were granted on September 14, 1999, and
become exercisable in annual installments of 25% on each of the four anniversaries of the
date of grant. The administrative committee of the stock option plan may permit an
employee to tender previously owned shares to pay the exercise price of an option and may
permit an employee to satisfy his income tax withholding obligations up to the minimum
statutory rate by the delivery of previously owned shares or the withholding of shares
otherwise issuable upon exercise of the option. Options will terminate at the time of
termination of employment if the termination is for "cause" or for resignation without the
consent of the Company, or three months after termination in the case of any other
termination, one year after death or disability, or 3 years after retirement.
(2) Exercise price is equal to the current market value at the date of grant.
(3) The present value of options on the date of grant was determined using a variation of the
Black-Scholes option pricing model. The estimated values under the Black-Scholes option
pricing model are based on the following assumptions at the time of grant: an exercise
price equal to the fair market value of the underlying Common Stock; option term of 6
years; interest rate of 5.79%, which represents the interest rate at the option grant date
of U.S. treasury securities having a six-year maturity; dividend payment rate of $.12 per
share per year; and a volatility factor of 51.5%, which is based on Common Stock prices
for a six-year period prior to the date of grant. For purposes of determining these
option valuations, a term of six years was used for the length of the option term rather
than the actual 10-year option term. Six years represents the historical average length
of time from grant date to exercise date for all options previously granted by the
Company. These assumptions were made as of the time of grant and may or may not be valid
assumptions at later points in time. The actual value, if any, that an executive may
realize from the options will be the excess of the market price of the Common Stock on the
day of exercising the options over the exercise price of the options. The actual value may
or may not be near the value estimated in the table.
Aggregated Option Exercises in the Last Fiscal Year and Fiscal Year-End
Option Values
The following table provides information relating to the exercise of
stock options by the executive officers named in the Summary Compensation
Table during the last fiscal year, and the number and value of exercisable
and unexercisable stock options held by such officers at February 26, 2000.
Number of
Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options Options
at Fiscal Year-End at Fiscal Year-End(1)
------------------------ -------------------------
Shares Acquired Value
Name on Exercise Realized(2) Exercisable Unexercisable Exercisable Unexercisable
- ----- -------------- ----------- ----------- ------------- ----------- -------------
Marvin J. Girouard -- $-- 608,041 350,000 $904,473 $387,500
Charles H. Turner -- -- 83,063 131,000 89,859 117,500
Jay R. Jacobs -- -- 97,950 131,000 106,320 117,500
J. Rodney Lawrence -- -- 131,813 131,000 251,051 117,500
Phil E. Schneider -- -- 142,865 131,000 320,779 117,500
- -----------------
<FN>
(1) Computed as the difference between the option exercise prices and $7.75 (the closing price of the
Common Stock at fiscal year-end).
(2) Computed as the difference between the option exercise prices and the closing market price of the
Common Stock at the date of exercise.
Board of Directors Compensation Committee Report on Executive Compensation
The Compensation Committee, which is composed entirely of independent,
non-employee directors, establishes and administers incentive-based
compensation plans for the senior executive, who is the Chief Executive
Officer, and recommends to the Board of Directors other compensation for the
senior executives and compensation for such other officers as the
Compensation Committee deems appropriate. The Compensation Committee may
from time to time retain an independent consultant to assist the Committee in
determining compensation levels and programs.
The Company's overall management compensation philosophy reflects a
strong incentive orientation with an aim that more than half of potential
senior executive compensation results from performance-based compensation
plans. In addition to base salary, executive compensation can include annual
bonus, stock options, restricted stock, benefits and perquisites. As
management responsibility increases, a greater portion of the executive's
compensation is directed toward performance-based programs with larger
percentages of potential compensation related to the price of the Company's
Common Stock. These incentive programs involve short-term bonus plans to
reward annual performance and long-term, stock-based plans to reward the
enhancement of shareholder value.
Section 162(m) of the Internal Revenue Code generally prohibits publicly
held companies such as the Company from deducting from corporate income all
compensation paid to the chief executive officer or any of the four other
most highly compensated officers that exceeds for each officer $1,000,000
during the tax year. Qualifying performance-based compensation paid pursuant
to plans approved by shareholders will not be subject to this deduction
limitation. It is the intent of the Compensation Committee to take
reasonable measures to obtain full corporate tax deductions for compensation
paid to the Company's executive officers.
Base salary levels of senior executive officers are reviewed annually by
the Compensation Committee. Salaries are based primarily upon Company growth
and individual performance of the executive during the preceding year. The
Compensation Committee considers the factors it deems relevant, but does not
assign specific weights to different factors. During the 2000 fiscal year,
the salary for the office of the Chief Executive Officer increased by $30,000
to $755,000.
During the 2000 fiscal year, the Company maintained an annual bonus plan
for senior executives and other employees that paid bonus awards based on the
attainment of budgeted levels of pretax income, excluding certain non-
recurring items. The Compensation Committee believes that pretax operating
income is the main determinant for establishing shareholder value. The
target bonus for the Chief Executive Officer was 75% of base salary for
fiscal 2000 pretax income attaining a level 9.8% higher than pretax income
for the prior year. The plan provided for a minimum bonus of 15% of base
salary for attaining a pretax income level of 91% of plan and a maximum bonus
of 150% of base salary for pretax income increasing 27.2% over the prior
year. The target bonus amounts for other plan participants were set at from
10% to 50% of each participant's base salary, depending on the level of
responsibility of the participant, and reflected the average for bonus
targets from a broad spectrum of comparable size companies. In fiscal 2000,
the Chief Executive Officer did not earn a bonus under the annual plan.
At the end of August 1999, Pier 1's overall performance, as compared to
the business plan, was such that the Compensation Committee felt it was
necessary to take extraordinary measures to incent Pier 1 management to
achieve extraordinary results for the remaining half of fiscal year 2000.
The Compensation Committee instituted a 6 month bonus plan that would provide
an incentive for management to meet or beat the revised business plan for the
last 6 months of the year. The target bonus for the Chief Executive Officer
was set at 37.5% of base salary for the 6 month plan or 1/2 of the target for
the full year plan. The target bonuses for other participants was set at 5%
to 25% of base salaries, respectively. The Chief Executive Officer earned
$495,470 under the 6 month plan.
Long-term incentives are provided through the grant of stock options.
Under the stock option plan, executives and other key employees may be
awarded options to purchase Company stock, which in the past have always been
at a purchase price of fair market value on the date of grant. Awards under
the stock option plan are designed with the intention of promoting the
success of the Company and retention of the executive with the Company in a
manner that produces value to the employee only when there is a corresponding
increase in value to all shareholders. In the past, restricted stock awards
were made to senior executives in conjunction with granting of stock options;
however, this practice was discontinued in fiscal year 1999. Executives may
vote and receive dividends on unvested restricted stock.
Long-term incentives for the senior executives have been awarded in a
combination of stock option and restricted stock awards. Restricted stock
has been awarded only at the time of the granting of stock options and
subject to restrictions that the Compensation Committee established at the
time of the award. Rights to transfer the restricted stock by the executive
vest only upon the satisfaction of all restrictions. For the past five
years, the Company has awarded annually stock options to the Chief Executive
Officer and the Chief Operating Officer and restricted stock awards were
granted in conjunction with the grant of stock options to the Chief Executive
Officer and Chief Operating Officer in each of the first three years of the
five year period. All stock options were granted with exercise prices of
market value at the dates of grant, and the restricted stock was awarded in
amounts generally representing 25% of the shares subject to stock options.
The Compensation Committee, however, has determined to discontinue the use of
restricted stock as part of long-term compensation and will award restricted
stock in the future only in exceptional circumstances. The amount of awards
to each executive were determined to reward the executive for Company and
stock performance and to provide incentives for the executive to remain with
the Company. The number of currently held options by each executive was not
considered in making stock option and restricted stock awards. During the
2000 fiscal year, the Chief Executive Officer was granted an option to
purchase 200,000 shares under the stock option plan.
COMPENSATION COMMITTEE
Tom M. Thomas
John H. Burgoyne
Company Stock Performance Graph
The following graph provides an indicator of the percentage change
during the Company's last five fiscal years of cumulative total shareholder
return, assuming the reinvestment of dividends, of the Company's Common
Stock, the S&P 500 Index and the S&P Retail Stores Composite Index.
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
Pier 1 Imports, Inc. 100 141 189 440 215 222
S&P 500 Index 100 135 170 229 275 307
S&P Retail Stores
Composite Index 100 110 136 208 305 293
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10%
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission and the New York Stock Exchange initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and greater than
10% shareholders are required by Securities and Exchange Commission
regulations to furnish the Company with copies of all Section 16(a) forms
they file. To the Company's knowledge, based solely on review of the copies
of the reports furnished to the Company, all Section 16(a) filing
requirements applicable to its officers, directors and greater than 10%
beneficial owners during the last fiscal year were observed.
OTHER BUSINESS
No other matters are scheduled to be presented for action at the meeting
other than the matters described in this Proxy Statement. If any other
business should properly come before the meeting, the persons named in the
proxy intend to vote thereon in accordance with their best judgment.
Relationship with Independent Auditors
The Board of Directors of the Company annually selects independent
public accountants to serve as auditors for the upcoming fiscal year. The
Board plans to select auditors for the 2001 fiscal year at the meeting of the
Board of Directors which follows the Annual Meeting of Shareholders.
The Board of Directors appointed Ernst & Young LLP as auditors for the
Company for fiscal year 2000. 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.
Shareholder Proposals for 2001 Annual Meeting
The date by which Shareholder proposals must be received by the Company
for inclusion in the Proxy Statement for the 2001 Annual Meeting of
Shareholders is January 19, 2001.
A Shareholder desiring to bring a matter before the 2001 Annual Meeting
of Shareholders that will not be contained in the Proxy Statement, including
the nomination of an individual for election as a director, must comply with
the advance notice provisions of the Company's By-laws. The By-laws require
that notice of the matter must be received by the Company no earlier than
March 26, 2001, and no later than April 25, 2001. The Secretary of the
Company may be contacted to obtain the specific information regarding the
matter that must be provided to the Company with the advance notice.
Proxy Solicitation
The cost of soliciting proxies will be borne by the Company. The
services of Georgeson Shareholder Communications Inc. will be employed for
the purpose of facilitating the solicitation. The fees of Georgeson
Shareholder Communications Inc. in this connection will be borne by the
Company and are not expected to exceed $5,000 plus mailing and delivery
expenses. In addition to solicitations by mail, officers and regular
employees of the Company may solicit proxies personally and by telephone or
other means, for which they will receive no compensation in addition to their
normal compensation. Arrangements may also be made with brokerage houses and
other custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial owners of stock held of record by such persons,
and the Company will reimburse them for their reasonable out-of-pocket and
clerical expenses.
YOUR VOTE IS IMPORTANT
You are encouraged to let us know your preference by completing and
returning the enclosed proxy card.
J. Rodney Lawrence
Secretary
May 19, 2000
APPENDIX A
PIER 1 IMPORTS, INC.
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
PROXY
Solicited on Behalf of the Board of Directors for Annual Meeting of
Shareholders, June 22, 2000
The undersigned hereby appoints MARVIN J. GIROUARD, MARK L. HART, JR.
and J. RODNEY LAWRENCE, and each of them, proxies with full power of
substitution, to represent and to vote as set forth herein all the shares of
the Common Stock of Pier 1 Imports, Inc. held of record by the undersigned on
May 3, 2000, at the annual meeting of shareholders to be held at 10:00 a.m.
local time on June 22, 2000 at the Renaissance Worthington Hotel, Pecos I
room, 200 Main Street, Fort Worth, Texas, and any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed
by the undersigned shareholder. If no direction is made, this proxy will be
voted "FOR" the election of the directors nominated.
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.
(Continued and to be signed and dated on the reverse side)
- -----------------------------------------------------------------------------
Please mark your votes as
indicated in this example [x]
Proposal 1. Election of Directors
FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ]
listed below for all nominees listed below
Nominees: 01 Marvin J. Girouard, 02 Sally F. McKenzie, 03 James M. Hoak, Jr.,
04 Tom M. Thomas, 05 John H. Burgoyne and 06 Michael R. Ferrari
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name in the space below.)
*Exceptions _______________________________________________________________
Proposal 2. In their discretion, the Proxies are authorized to vote
as described in the Proxy Statement and upon such other
business as may properly come before the meeting or any
adjournment thereof.
Change of Address and/or [ ] Please date, sign and return promptly in the
Comments Mark Here enclosed envelope.
Signature___________________ Signature_____________________ Date_____________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
- -----------------------------------------------------------------------------
TO VOTE BY TELEPHONE
YOUR VOTE IS IMPORTANT! - YOU CAN VOTE BY TELEPHONE OR
BY MAILING BACK YOUR SIGNED AND DATED PROXY CARD
TO VOTE BY PHONE: Call toll-free 1-800-840-1208 on a touch tone telephone 24
hours a day-7days a week
There is NO CHARGE to you for this call. - Have your proxy card in hand.
You will be asked to enter a Control Number, which is located in the box in
the lower right hand corner of this form
OPTION 1: To vote as the Board of Directors recommends on ALL proposals,
press 1
When asked, please confirm by Pressing 1.
OPTION 2: If you choose to vote on each Proposal separately, press 0. You
will hear these instructions:
Proposal 1 - To vote FOR ALL nominees, press 1; to WITHHOLD FOR
ALL nominees, press 9
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and
listen to the instructions
When asked, please confirm by Pressing 1.
NOTE: IF YOU VOTE BY TELEPHONE, THERE IS NO NEED TO MAIL BACK YOUR PROXY
CARD.
THANK YOU FOR VOTING.