Exhibit 10.2
PIER 1 IMPORTS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
For a Non-Employee Director
     THIS NON-QUALIFIED STOCK OPTION AGREEMENT is made effective and entered
into as of                                         , by and between PIER 1
IMPORTS, INC., a Delaware corporation (the “Company”), and
                                         (the “Optionee”).
     WHEREAS, the Company adopted the Pier 1 Imports, Inc. 2006 Stock Incentive
Plan (the “Plan”) in order to grant Awards to non-employee directors of the
Company in order to provide them incentives in the success of the Company and to
attract and retain qualified directors; and
     WHEREAS, the Optionee is a non-employee director of the Company, and the
Company desires to grant an Option to purchase Common Stock to the Optionee;
     NOW, THEREFORE, the Company and the Optionee hereby agree as follows:
     1. Grant of Option. The Company hereby grants to the Optionee an option
(“this Option”), subject to the execution of this Option Agreement, on the date
(the “Option Grant Date”) set forth on the execution page hereof (the “Execution
Page”) to purchase from the Company upon the terms and conditions hereinafter
set forth the number of shares (the “Option Shares”) of Common Stock of the
Company indicated on the Execution Page at the Exercise Price set forth on the
Execution Page.
     2. Term of Option; Exercisability. This Option is immediately fully vested
and exercisable. This Option shall be exercisable in full or in part and shall
remain exercisable until the Expiration Date set forth on the Execution Page
(unless it is sooner terminated as hereinafter provided), at which time this
Option shall expire.
     3. Exercise of Option. Notice of the exercise of this Option or any portion
thereof shall be given to the Company, or any other employee of the Company or
an Affiliate who is designated by the Company to accept such notices on its
behalf, specifying the number of shares for which it is exercised; provided,
that no partial exercise of this Option may be for fewer than 100 shares unless
the remaining shares purchasable are fewer than 100 shares. Payment of the
Exercise Price shall be made in full at the time this Option is exercised.
Payment shall be made (i) by certified or cashier’s check, (ii) by delivery and
assignment to the Company of Common Stock owned by the Optionee that has a Fair
Market Value on the first business day preceding the date this Option is
exercised equal to the aggregate purchase price of the Option Shares, (iii) by
irrevocably authorizing a third party to sell Option Shares and remit to the
Company a sufficient portion of the sale proceeds to pay the purchase price, or
(iv) by a combination of (i), (ii) or (iii). Certificates for any shares of
Common Stock delivered in satisfaction of all or a portion of the Exercise Price
shall be appropriately endorsed for transfer and assignment to the Company. For
purposes of determining the amount, if any, of the Exercise Price satisfied by

 

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delivery of shares of Common Stock, such shares shall be valued at Fair Market
Value on the first business day preceding the date of exercise.
     4. Termination of Option. In the event of the termination of the Optionee’s
term of office as a director of the Company, this Option shall terminate in
accordance with the following provisions:

  (i)   upon the death of the Optionee, the Option may be exercised by the
Optionee’s estate or person who acquires the right to exercise such Option by
bequest or inheritance, until the earlier of (a) the Expiration Date, or (b) the
first anniversary of such death;     (ii)   upon the disability (as such term is
defined in the Company’s long-term disability plan) (a “Disability”) of the
Optionee, the Option may be exercised by the Optionee, or in the case of the
Optionee’s subsequent death, by the Optionee’s estate or a person who acquires
the right to exercise such Option by bequest or inheritance, until the earlier
of (a) the Expiration Date or (b) the first anniversary of such Disability;    
(iii)   if the Optionee ceases to be a director of the Company after attaining
the age of 70, other than by reason of death, Disability or removal from office,
the Option may be exercised by the Optionee until the earlier of (a) the
Expiration Date or (b) the third anniversary of the date he or she ceased to be
a Company director; and     (iv)   if, other than as set forth in 4(iii) above,
the Optionee resigns or his or her term of office as a director expires without
the Optionee standing for re-election, this Option may be exercised by the
Optionee until the earlier of (a) the Expiration Date or (b) the 91st day
following such resignation or expiration; provided, that in the event of the
Optionee’s subsequent death after such resignation or expiration but prior to
the end of such period of exercisability, the period during which the Option may
be exercised shall be extended until the earlier of (a) the Expiration Date or
(b) the first anniversary of such resignation or expiration.

In no event shall this Option be exercisable to any extent by any person on or
after the Expiration Date.
     5. Non-Assignability of Option. This Option shall not be transferable by
the Optionee otherwise than by will or the laws of descent and distribution.
During the Optionee’s lifetime, this Option shall be exercisable only by the
Optionee or by his guardian or legal representative. This Option shall not be
subject to execution, attachment or similar process.
     6. Compliance with Laws. The obligation of the Company to sell and issue
Option Shares pursuant to this Option is subject to such compliance as the
Company deems necessary or advisable with federal and state laws, rules and
regulations applying to the authorization, issuance, sale or listing of
securities.

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     7. Relationship to Plan. This Option has been granted pursuant to the Plan
and is in all respects subject to the terms, conditions and definitions of the
Plan, a copy of which may be obtained by the Optionee from the Secretary of the
Company. In the event that any provisions of this Option Agreement shall
conflict with the Plan, the provisions of the Plan shall control. The Optionee
hereby accepts this Option subject to all the terms and provisions of the Plan
and agrees that all decisions under and interpretations of the Plan by the
Committee shall be final, binding and conclusive upon the Optionee and any
permitted transferee. Unless otherwise defined herein or unless the context
requires a different definition, capitalized terms used herein shall have the
meanings assigned to them in the Plan.
     8. No Rights as Stockholder; No Rights to Employment. The Optionee shall
have no rights as a stockholder of the Company; including any voting rights or
any claim to dividends with respect to any Option Shares until such Option
Shares are issued to the Optionee by the Company pursuant to an exercise of the
Option. Nothing contained in this Option shall confer upon the Optionee any
right to employment by the Company or any Affiliate.
     9. Notices. Any notice to be provided hereunder or the Plan shall be in
writing and addressed to the Company at the Company’s principal executive
offices or to the Optionee at the their address shown on the Company’s records,
or such other address provided to the Company by the Optionee in accordance
herewith. Notice shall be given by either hand delivery, overnight courier
service, facsimile transmission (promptly confirmed in writing) or certified
mail (postage prepaid, return receipt requested). Notices given by hand
delivery, overnight courier or facsimile transmission shall be deemed given upon
delivery and notices given by mail shall be deemed given on the earlier of three
days after deposit in the U.S. mail, or on the first date delivery is refused.
     10. Governing Law. This Option Agreement shall be governed by and construed
in accordance with the laws of the State of Texas without giving effect to the
principles of conflict of laws.
     11. Successors and Assigns. This Option shall be binding upon and shall
inure to the benefit of the Company and its successors and assigns.
     12. Counterparts. This Option Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Remainder of This Page Intentionally Left Blank]

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EXECUTION PAGE OF DIRECTOR NON-QUALIFIED STOCK OPTION AGREEMENT
     13. Certain Additional Information. This Paragraph sets forth certain
information referred to in Paragraphs 1 and 2 of this Agreement.

  (a)   The Option Grant Date is                                         , 2006.
    (b)   The number of Option Shares is 6,000.     (c)   The Exercise Price for
each Option Share is $                     per share.     (d)   The Expiration
Date is                                         , 2016.

     IN WITNESS WHEREOF, this Non-Qualified Stock Option Agreement has been
executed by the Company and the Optionee as of the Option Grant Date.

                      COMPANY:       OPTIONEE:        
 
                    Pier 1 Imports, Inc.                
 
                   
By:
                                     
 
       Marvin J. Girouard                
 
       Chairman and Chief Executive Officer       Soc. Sec. #        
 
             
 
   
 
                   
 
          Address:          
 
             
 
   
 
             
 
   
 
             
 
   
 
                   
 
          Email:        
 
             
 
   

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