EXHIBIT 10.7
PIER 1 IMPORTS, INC.
MANAGEMENT RESTRICTED STOCK PLAN
1. Purpose. The purpose of the Pier 1 Imports, Inc. Management
Restricted Stock Plan (the "Plan") is to further the growth and profitability
of the Company by offering incentives to those key management personnel, who
have the capacity for contributing in substantial measure toward the growth
and profitability of the Company and to attract and retain such key
employees.
2. Definitions. For purposes of the Plan the following terms shall
have the indicated meanings unless otherwise expressly provided or unless the
context otherwise requires:
"Award" means an award of Restricted Stock pursuant to the provisions of
the Plan.
"Board" means the Board of Directors of the Company.
"Committee" means Compensation Committee of the Board or the Committee
appointed by the Board to administer the Plan in accordance with Section 3
hereof.
"Company" means Pier 1 Imports, Inc., a Delaware corporation.
"Employee" means any individual employed by the Company or any
Subsidiary.
"Grantee" means an Employee to whom an Award has been granted hereunder.
"Permanent Disability" means permanent and total disability of the
Grantee, as determined by the Committee in its sole discretion and in
accordance with uniform and non-discriminatory standards adopted by the
Committee.
"Restricted Stock" means the Shares awarded upon the terms and
conditions and subject to the restrictions set forth in Section 6.
"Restricted Stock Agreement" means the agreement pursuant to which
Restricted Stock is issued in accordance with Section 6.
"Retirement" means, in the case of an Employee, a Termination of
Employment by reason of the Employee's retirement at or after his or her
normal retirement date under the Company's Retirement plan.
"Shares" means shares of Common Stock, par value $1.00 per share, of
the Company.
"Subsidiary" means any corporation the majority of the outstanding
voting stock of which is owned, directly or indirectly, by the Company.
"Termination of Employment" means the time when the employee-employer
relationship between the Employee and the Company and its Subsidiaries is
terminated for any reason, including, but not limited to, a termination by
resignation, discharge, death, Permanent Disability, Retirement, or the
disaffiliation of a Subsidiary, but excluding any such termination where
there is a immediate reemployment by either the Company or one of its
Subsidiaries.
3. Administration of the Plan. The Plan shall be administered by
the Committee, which shall consist of not fewer than two members of the Board,
who shall be appointed by and serve at the pleasure of the Board. Each
member of the Committee shall be a "disinterested person" as that term is
defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended, or any successor provision.
Subject to the provisions of the Plan, the Committee shall have
exclusive power to select the Employees who are to participate in the Plan,
to determine the number of Shares to be subject to any Award and the time or
times at which Awards will be granted, to provide additional limitations in
any Awards that are not specifically set forth in the Plan, and to establish
other terms and conditions of each Award. The Committee shall also have the
power to modify or amend the terms of any or all outstanding Awards in any
respect subject to the terms of the Plan, provided that no such amendment may
adversely affect the terms of a Grantee's Award without the Grantee's written
consent. The Committee shall have complete authority to interpret the Plan,
to prescribe, amend and rescind rules and regulations relating to the Plan,
and to make all other determinations necessary or advisable in the
administration of the Plan, all of which determinations shall be final and
binding upon all persons having an interest in the Plan. No member of the
Committee shall be personally liable for any action, determination, or
interpretation taken or made with respect to the Plan, unless such action,
determination, or interpretation constitutes criminal misconduct, gross
negligence or demonstrates bad faith, and all members of the Committee shall
be fully protected by the Company with respect to any such action,
determination or interpretation.
4. Plan Limitations; Stock Subject to the Plan. The maximum number of
shares of Restricted Stock that may be issued or transferred under the Plan
shall be 250,000 shares of Restricted Stock, subject to adjustment pursuant
to the provisions of Section 10. Any shares of Restricted Stock that have
been awarded under the Plan but later are forfeited or otherwise revert to
the Company pursuant to the provisions of an Award may again be issued as
Awards under the Plan.
5. Eligibility for Participation. The Committee shall from time to
time in its absolute discretion select from among the Employees those persons
who, in the opinion of the Committee are in a position to contribute
materially to the growth and success of the Company.
6. Restricted Stock Awards.
(a) Grant of Award. The Committee may, from time to time, grant Awards
to eligible Employees in conjunction with the granting of stock options
pursuant to a stock option plan of the Company. Each Award shall be
evidenced by a Restricted Stock Agreement between the Company and the
Grantee, which Agreement shall contain terms prescribed by the Plan and such
other terms and conditions as the Committee may deem necessary or advisable.
The purchase price of Restricted Stock awarded under the Plan shall not
exceed such amount as may be required for the issuance of such shares under
the jurisdiction of incorporation of the Company. To the extent permissible
by law, the award of Restricted Stock shall be made in consideration of the
services of the Grantee.
(b) Restrictions. Restricted Stock shall be subject to the following
restrictions:
(i) no Restricted Stock may be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of during such time as such Restricted
Stock is subject to the restrictions provided in this Section 6;
(ii) The restrictions with respect to the Restricted Stock shall lapse
in accordance with the provisions established by the Committee and set forth
in each Grantee's Restricted Stock Agreement.
(iii) Each certificate issued with respect to Restricted Stock shall be
registered in the name of the Grantee and deposited, together with a stock
power duly executed in blank by the Grantee, with the Company or, if the
Committee so specifies, with a third party custodian or trustee, and shall
bear the following, or a similar, legend:
"The transferability of this certificate and the shares of Common Stock
represented hereby are subject to the terms, conditions and restrictions
(including forfeiture) contained in the Management Restricted Stock Plan of
Pier 1 Imports, Inc. and the Restricted Stock Agreement entered into between
the registered owner and Pier 1 Imports, Inc. A copy of such Plan and
Agreement is on file in the offices of Pier 1 Imports, Inc., 301 Commerce
Street, 6th Floor, Fort Worth, Texas 76102."
(c) At the expiration of the restrictions provided herein and in the
Restricted Stock Agreement, the Company will cause a new certificate to be
delivered to the Grantee (or in the case of his death to his or her legal
representative, beneficiary or heir), free of any legend provided herein for
such number of Shares as to which such restrictions shall have lapsed;
provided, however, that the Company shall not be required to issue fractional
Shares.
(d) During the applicable period of restriction as to any Restricted
Stock, a Grantee shall be the record owner thereof and shall be entitled to
vote such Shares and receive all dividends and other distributions paid with
respect to such Shares; provided that if any such dividend or distribution is
paid in Shares, the Shares so received shall be subject to the same
restrictions as the Restricted Stock with respect to which such dividend or
distribution was paid. The Committee may provide in the agreement such other
restrictions, terms or conditions with respect to the treatment and holding
of any shares, cash or other property that may be received as consideration
or in exchange for Restricted Stock.
(e) The Committee may accelerate the time at which the restrictions
will lapse or remove any restrictions whenever it may decide in its absolute
discretion that such action is in the best interests of the Company and not
adverse to the interests of the Grantee or his heirs or beneficiaries.
7. Effective Date of the Plan; Shareholder Approval. The Plan shall
become effective upon the approval of the Plan, within 12 months of adoption
by the Board, by the holders of a majority of the Shares present or
represented by proxy and entitled to vote at a duly held meeting of the
shareholders of the Company.
8. Amendment of the Plan. The Board may at any time and from time to
time modify or amend the Plan in any respect; provided, that without approval
of the shareholders of the Company the Board may not increase the maximum
number of shares of Restricted Stock that may be awarded under the Plan
(other than increases due to adjustments in accordance with Section 10),
materially modify the requirements as to eligibility for participation in the
Plan, or otherwise materially increase the benefits accruing to participants
under the Plan. Any modification or amendment to the Plan shall not, without
the written consent of any Grantee, adversely affect the Grantee's rights
under an Award granted prior to such modification or amendment.
9. Termination of the Plan. The Plan shall terminate upon the granting
of Awards equalling the maximum number of Shares of Stock that may be awarded
under the Plan or upon a vote by the Board to terminate the Plan, and
thereafter the function of the Committee will be limited to the
administration of Restricted Stock Agreements. Each Award shall remain in
effect until the restrictions on the Restricted Stock have lapsed or the
Restricted Stock shall revert to the Company in accordance with the terms
hereof. No termination of the Plan shall, without the written consent of the
Grantee, adversely affect the rights or obligations under Awards previously
granted.
10. Dilution and Other Adjustments. In the event of any change in the
number of outstanding Shares by reason of any stock dividend or split,
recapitalization, merger, consolidation, spin-off, reorganization,
combination or exchange of shares, or other similar corporate change, the
Committee shall make such adjustments, if any, as in its sole discretion it
deems equitable in the aggregate number or kind of Restricted Stock or other
stock or securities which may be awarded pursuant to the Plan, and in the
terms and restrictions of each outstanding Award affected thereby. Such
adjustments shall be conclusive and binding upon all parties concerned.
11. Tax Withholding. The Company shall deduct from each Grantee's
salary or wages, or, at the option of the Grantee, the Grantee shall pay to
the Company, the amount of any tax required by any governmental authority to
be withheld on account of an Award or the lapse of restrictions on Restricted
Stock. The Committee may, in its sole discretion, permit a Grantee the right
to satisfy, in whole or in part, any tax withholding requirement resulting
from the lapse of restrictions by electing to require the Company to purchase
that number of unrestricted Shares designated by the Grantee at a price equal
to the closing price for Shares, as reported for consolidated transactions on
the New York Stock Exchange, on the date of lapse of restrictions, or if not
traded on such day on the next preceding day on which trading occurred. The
Company shall not be required to deliver a certificate for any Shares as to
which restrictions shall have lapsed until all such taxes shall have been
paid by the Grantee or the person entitled thereto. The Company shall have
the right, but not the obligation, to sell or withhold such number of Shares
distributable to the person entitled to such distribution as will provide
assets for payment of any tax so required to be paid by the Company for such
person unless, prior to such sale or withholding, such person shall have paid
to the Company the amount of such tax. Any balance of the proceeds of such a
sale remaining after the payment of such taxes shall be paid over to such
person. In making any such sale, the Company shall be deemed to be acting on
behalf and for the account of such person.
12. Applicable Laws and Regulations. The Company's obligation to issue
or deliver any Shares pursuant to an Award shall be subject to such
compliance as the Committee in its sole discretion deems necessary or
advisable with respect to the listing of such Shares upon any securities
exchange, the registration or qualification of such Shares under any federal
or state law or the rulings or regulations of any governmental regulatory
body, or the obtaining of any approval or consent from any federal, state or
other governmental agency.
13. Employment Rights. Nothing in the Plan or in any Restricted Stock
Agreement shall confer upon any Grantee the right to continue in the employ
of the Company or its Subsidiaries or shall interfere with or restrict in any
way the rights of the Grantee's employer to discharge the Grantee at any time
for any reason whatsoever, with or without cause.