Exhibit 10.4

RESTRICTED STOCK AWARD AGREEMENT
APRIL 14, 2017 Performance-Based Award (“ROIC”)
 
 
THIS RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) is made effective and
entered into as of April 14, 2017, by and between PIER 1 IMPORTS, INC., a
Delaware corporation (the “Company”), and ______________________ (the
“Grantee”).
WHEREAS, pursuant to the provisions of the Pier 1 Imports, Inc. 2015 Stock
Incentive Plan (the “Plan”), the Committee that administers the Plan has the
authority to grant Awards under the Plan to employees of the Company and its
Affiliates; and
WHEREAS, the Committee has determined that the Grantee be granted a Restricted
Stock Award under the Plan for the number of shares and upon the terms set forth
below;
NOW, THEREFORE, the Company and the Grantee hereby agree as follows:
1.            Grant of Award.  The Grantee is hereby granted a Restricted Stock
Award under the Plan (this “Award”), subject to the terms and conditions
hereinafter set forth, with respect to a maximum __________________(__________)
restricted shares of Common Stock.  Restricted shares of Common Stock covered by
this Award (the “Performance-Based Shares”) shall be represented by a stock
certificate registered in the Grantee’s name, or by uncertificated shares
designated for the Grantee in book-entry form on the records of the Company’s
transfer agent, in each case subject to the restrictions set forth in this
Agreement.  Any stock certificate issued 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 Pier 1 Imports, Inc. 2015 Stock
Incentive Plan and the Restricted Stock Award 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., 100 Pier 1 Place, Fort Worth,
Texas 76102.”
Any Common Stock certificates or book-entry uncertificated shares evidencing
such shares shall be held in custody by the Company or, if specified by the
Committee, with a third party custodian or trustee, until the restrictions
thereon shall have lapsed, and, as a condition of this Award, the Grantee shall
deliver a stock power, duly endorsed in blank, relating to any certificated
restricted shares of Common Stock covered by this Award.
2.            Transfer Restrictions.  Except as expressly provided in this
Agreement and the Plan, this Award and the Performance-Based Shares are
non-transferable otherwise than by will or by the laws of descent and
distribution, and may not otherwise be assigned, pledged or hypothecated or
otherwise disposed of and shall not be subject to execution, attachment or
similar process.  Upon any attempt to effect any such disposition, or upon the
levy of any such process, this Award shall immediately become null and void and
the Performance-Based Shares shall be forfeited.
 
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3.            Restrictions.
(a) Certain Definitions.  For purposes of this Award, the term:
“Cause” means the occurrence of any of the following events:

(i)
refusal by Grantee to follow a lawful direction of any superior officer of the
Company or an Affiliate, provided the direction is not materially inconsistent
with the duties or responsibilities of Grantee’s position;

(ii)
performance deficiencies which are communicated to Grantee in writing as part of
performance reviews and/or other written communications from any superior
officer of the Company or an Affiliate;

(iii)
willful misconduct or reckless disregard by Grantee of his/her duties or of the
interest or property of the Company or its Affiliates;

(iv)
any act by Grantee of fraud against, material misappropriation from, or
significant dishonesty to either the Company or an Affiliate; or

(v)
conviction by Grantee of a felony.

 
“Closing Price(s)” means on any date the closing sale price per share (or if no
closing sale price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid and the average ask
prices) on that date as reported in the composite transactions table for the
principal U.S. national or regional securities exchange on which the common
stock is listed for trading. If the common stock is not listed for trading on a
U.S. national or regional securities exchange on the relevant date, then the
“Closing Price” of the common stock will be the average of the bid and ask
prices (or, if more than one in either case, the average of the average bid and
the average ask prices) for the common stock in the over-the-counter market on
the relevant date as reported by OTC Markets Group Inc. or similar organization.
If the common stock is not so quoted, the “Closing Price” of the common stock
will be such other amount as the Committee may ascertain reasonably to represent
such “Closing Price.” The Closing Price shall be determined without reference to
extended or after-hours trading.
 
“Final Stock Price” means the average of the Closing Prices for the 20 Trading
Days (as herein defined) during the 20-trading-day-period ending on and
including the last Trading Day of the Measurement Period (as hereinafter
defined).
 
“Good Reason” means the occurrence of all of the events listed in either (i) or
(ii) below:

(i)
a material diminution of Grantee’s responsibilities as modified by the Company
or an Affiliate from time to time hereafter, such that Grantee would no longer
have responsibilities substantially equivalent to those of similarly situated
employees at companies with similar revenues and market capitalization; provided
that Grantee gives written notice to the Company of the facts and circumstances
constituting such material diminution within ten (10) days following the
occurrence of such event; the Company (or Affiliate) fails to remedy such
material diminution within ten (10) days following Grantee’s written notice of
such event; and Grantee terminates employment within ten (10) days following the
Company’s or Affiliate’s failure to remedy such material diminution; or

(ii)
the Company or an Affiliate materially reduces Grantee’s base salary without
Grantee’s consent, unless the reduction is applied equally, expressed as
percentage of base salaries, to all similarly situated employees; provided that
Grantee gives written notice to the Company within ten (10) days following
Grantee’s receipt of the notice of reduction in base salary of Grantee’s
objection to the reduction; the Company or Affiliate fails to rescind the notice
of reduction within ten (10) days following Grantee’s written notice; and
Grantee terminates employment within ten (10) days following the Company’s or
Affiliate’s failure to rescind the notice.

 
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“Initial Stock Price” means the average of the Closing Prices for the 20 Trading
Days during the 20-trading-day-period beginning on and including the first
Trading Day of the Measurement Period.
 
“Invested Capital” means for any particular fiscal year, the sum of the
Company’s (i) 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.
 
“Measurement Period” means the Company’s three (3) fiscal years beginning on and
including February 26, 2017 and ending on and including February 29, 2020.
 
“NOPAT” means the Company’s operating income, for any particular fiscal year,
less taxes, with taxes being the product of applying the Company’s effective tax
rate for the applicable fiscal year to the Company’s operating income for that
fiscal year.
 
“Peer Group” means the companies in the Russell 1000 Specialty Retail Index as
constituted on the first day of the Measurement Period, with the addition of any
other specialty retailers included in the Company's peer group for executive
compensation purposes and not included in the Russell 1000 Specialty Retail
Index.  The Company's peer group for executive compensation purposes shall be as
determined by the Committee prior to or within sixty (60) days of the first day
of the Measurement Period.
 
“ROIC” means the Company’s return on invested capital calculated by dividing
NOPAT  by Invested Capital.
 
“TSR” means a company’s total shareholder return, calculated by dividing (i) the
sum of (A) the cumulative amount of such company’s dividends for the Measurement
Period, assuming same day reinvestment into the common stock of the company on
the ex-dividend date, plus (B) the difference of (1) the Final Stock Price for
such company, minus (2) the Initial Stock Price for such company, by (ii) the
Initial Stock Price for such company.
 
The TSR of a component company in the Peer Group and of the Company shall be
adjusted to take into account stock splits, reverse stock splits, and special
dividends that occur during the Measurement Period.  The determination of TSR
shall be subject to the following additional adjustments:

(i)
If during the Measurement Period two component companies of the Peer Group merge
or otherwise combine into a single entity, the surviving entity shall remain a
component company of the Peer Group and the non-surviving entity shall be
removed from the Peer Group.

(ii)
If during the Measurement Period a component company of the Peer Group merges
into or otherwise combines with an entity that is not a component company of the
Peer Group, such component company shall be removed from the Peer Group.

(iii)
If during the Measurement Period a component company of the Peer Group files a
petition for reorganization under ch. 11 of the U.S. Bankruptcy Code or
liquidation under ch. 7 of the U.S. Bankruptcy Code, such component company
shall remain as part of the Peer Group and be designated with a TSR of negative
100%.

(iv)
If a component company of the Peer Group becomes a debtor entity operating under
the protection of the U.S. Bankruptcy Code during the Measurement Period and
subsequently emerges from bankruptcy protection during the Measurement Period,
such component company shall not be reintroduced into the Peer Group.

 
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“Trading Day(s)” means a day on which (i) trading in the common stock generally
occurs on the New York Stock Exchange or, if the common stock is not then listed
on the New York Stock Exchange, on the principal other U.S. national or regional
securities exchange on which the common stock is then listed or, if the common
stock is not then listed on a U.S. national or regional securities exchange, on
the principal other market on which the common stock is then traded, and (ii) a
Closing Price for the common stock is available on such securities exchange or
market.
 
For purposes of the definition of Invested Capital, NOPAT and ROIC, the
“Company” includes the Company’s consolidated subsidiaries.

(b) Vesting.  The target amount of Performance-Based Shares under this Award is
______________ (_____________) Performance-Based Shares (the “Target
Performance-Based Shares”). Provided that (y) the Company’s three-year average
ROIC for the Measurement Period equals or exceeds the threshold percentage as
shown on the table set forth on the execution page hereof (the “Execution
Page”), and (z) the Grantee is employed by the Company or an Affiliate on the
date of filing of the Company’s Annual Report on Form 10-K with the Securities
and Exchange Commission (“SEC”) for the Company’s fiscal year ending February
29, 2020, and subject to the other terms and conditions of this Agreement, the
restrictions on the Performance-Based Shares covered by this Award shall lapse
and such shares shall vest over a range from 50% to 200% of the Target
Performance-Based Shares as shown on the table set forth on the Execution Page. 
Any fractional shares created by such vesting will be rounded down to the
nearest whole share.

The determination by the Committee with respect to the achieving of condition
(y) above shall be effective upon the filing of the Company’s Annual Report on
Form 10-K with the SEC for fiscal year 2020.

(c) TSR Modifier.  Any Performance-Based Shares which vest under this Award will
be increased or decreased by ten percent (10%) as shown in the following table:

Company's Percentile Rank
(as determined below)
Within Peer Group
Modification
of
Vested Shares
75% and above
+ 10%*
above 25% and below 75%
no modification
25% and below
-10%

          *Provided the Company’s absolute TSR is not negative
Any fractional shares created by such modification of vested shares will be
rounded down to the nearest whole share.
 
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The annual equivalent return (“AER”) of the TSR shall be calculated for the
Company and each component company of the Peer Group over the Measurement
Period.  Each AER shall be ranked from highest to lowest.  The percentile rank
of the AER of the Company shall then be determined relative to the AER ranking
of each component company in the Peer Group (the “Company’s Percentile Rank”). 
The Company’s Percentile Rank shall then be utilized, as shown in the table
above, to determine the percentage, if any, of the modification of
Performance-Based Shares that vested under this Award. The AER calculations
shall be derived utilizing a calculation consistent with the annual equivalent
return calculation employed by Bloomberg L.P.’s comparative total return (COMP)
function as of the date of this Agreement.  Performance-Based Shares that vest
under this Award will not be modified upward if the Company’s absolute TSR is
negative.

(d)            Corporate Change. A pro rata portion of the restrictions on the
Target Performance-Based Shares shall lapse and such pro rata portion of shares
shall vest upon (i) a Corporate Change (as defined in the Plan) AND (ii) the
occurrence of one of the following: (a) the Performance-Based Shares covered by
this Award are not assumed by the surviving or acquiring entity or otherwise
equitably converted or substituted in connection with the Corporate Change, or
(b) the Performance-Based Shares covered by this Award are assumed by the
surviving or acquiring entity or otherwise equitably converted or substituted in
connection with the Corporate Change and the termination of Grantee’s employment
by the Company (or the surviving or acquiring entity) without Cause or Grantee’s
resignation for Good Reason occurs within one year after the effective date of
the Corporate Change. The pro rata portion of shares under this Section 3(d)
shall be calculated based on the portion of the Measurement Period that has
elapsed at the time of such vesting associated with a Corporage Change.

(e)            Termination of Employment.  Upon termination of employment of the
Grantee with the Company or any Affiliate of the Company (or the successor of
any such company) for any reason other than as specified in Section 3(d) above,
the Grantee shall forfeit all rights in the Performance-Based Shares to the
extent not vested, and the ownership of such shares shall immediately vest in
the Company.  For purposes of this Award, no termination of Grantee’s employment
shall occur as a result of the transfer of Grantee between the Company and any
Affiliate or as a result of the transfer of the Grantee between two Affiliates. 
The cessation of a relationship between the Company and an Affiliate with which
the Grantee is employed whereby such company is no longer an Affiliate shall
constitute a termination of employment of the Grantee.

4.            Voting and Dividend Rights.  With respect to the Performance-Based
Shares for which the restrictions have not lapsed, the Grantee shall have the
right to vote such shares, but shall not receive any cash dividends paid with
respect to such shares.  Any dividend or distribution payable with respect to
the Performance-Based Shares that shall be paid in shares of Common Stock shall
be subject to the same restrictions provided for herein. Any other form of
dividend or distribution payable on shares of the Performance-Based Shares, and
any consideration receivable for or in conversion of or exchange for the
Performance-Based Shares, unless otherwise determined by the Committee, shall be
subject to the terms and conditions of this Agreement, with such modifications
thereof as the Committee may provide in its absolute discretion.

5.            Distribution Following End of Restrictions.  Upon expiration of
the restrictions provided in Section 3 hereof as to the Performance-Based Shares
and after modification of the number of such shares provided in Section 3(c)
hereof, if any, the Company in its sole discretion will either cause a
certificate evidencing such amount of Common Stock to be delivered to the
Grantee (or in the case of the Grantee’s death after such events cause such
certificate to be delivered to the Grantee’s legal representative, beneficiary
or heir) or provide book-entry uncertificated shares designated for the Grantee
(or, in the case of the Grantee’s death after such events, provide book-entry
uncertificated shares designated for Grantee's legal representative, beneficiary
or heir) on the records of the Company's transfer agent free of the legend or
restriction regarding transferability, as the case may be; provided, however,
that the Company shall not be obligated to issue any fractional shares of Common
Stock.  All Performance-Based Shares which do not vest as provided in Section 3
hereof, shall be forfeited by the Grantee along with all rights thereto, and the
ownership of such shares shall immediately vest in the Company.  All vested
Performance-Based Shares which are not distributed due to a modification as
provided in Section 3(c) hereof, shall be forfeited by the Grantee along with
all rights thereto, and the ownership of such shares shall immediately vest in
the Company.
 
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6.            Tax Withholding.  The obligation of the Company to deliver any
certificate or book-entry uncertificated shares to the Grantee pursuant to
Section 5 hereof shall be subject to the receipt by the Company from the Grantee
of any minimum withholding taxes required as a result of the grant of the Award
or lapsing of restrictions thereon.  The Grantee may satisfy all or part of such
withholding tax requirement by electing to require the Company to purchase that
number of unrestricted shares of Common Stock designated by the Grantee at a
price equal to the Fair Market Value on the date of lapse of the restrictions
or, if such day was not a Trading Day, on the first preceding Trading Day.  The
Company shall have the right, but not the obligation, to sell or withhold such
number of unrestricted shares of Common Stock distributable to the Grantee as
will provide assets for payment of any tax so required to be paid by the Company
for Grantee unless, prior to such sale or withholding, Grantee 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 Grantee. 
In making any such sale, the Company shall be deemed to be acting on behalf and
for the account of Grantee.

7.            Securities Laws Requirements.  The Company shall not be required
to issue shares pursuant to this Award unless and until (a) such shares have
been duly listed upon each stock exchange on which the Company’s Common Stock is
then listed, and (b) the Company has complied with applicable federal and state
securities laws.  The Committee may require the Grantee to furnish to the
Company, prior to the issuance of any shares of Common Stock in connection with
this Award, an agreement, in such form as the Committee may from time to time
deem appropriate, in which the Grantee represents that the Performance-Based
Shares acquired by Grantee under this Award are being acquired for investment
and not with a view to the sale or distribution thereof.

8.            Incorporation of Plan Provisions.  This Agreement is made pursuant
to the Plan and is subject to all of the terms and provisions of the Plan as if
the same were fully set forth herein, and receipt of a copy of the Plan is
hereby acknowledged.  Capitalized terms not otherwise defined herein shall have
the same meanings set forth for such terms in the Plan.  If there is any
conflict between this Agreement and the Plan, the Plan controls.

9.            Miscellaneous.  This Agreement (a) shall be binding upon and inure
to the benefit of any successor of the Company, (b) shall be governed by the
laws of the State of Delaware, and any applicable laws of the United States, and
(c) may not be amended without the written consent of both the Company and the
Grantee.  No contract or right of employment shall be implied by this Agreement,
nor shall this Agreement 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.  The terms and provisions of this Agreement
shall constitute an instruction by the Grantee with respect to any
uncertificated Performance-Based Shares.
 
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This Award along with all other Awards received by the Grantee (including any
proceeds, gains or other economic benefit actually or constructively received by
the Grantee upon any receipt or exercise of any Award) shall be subject to the
provisions of the Company’s claw-back policy as set forth in Section 10 of the
Company’s Code of Business Conduct and Ethics (as amended from time to time)
including any amendments of such claw-back policy adopted to comply with the
requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act
and any rules or regulations promulgated thereunder.
 
 
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EXECUTION PAGE OF RESTRICTED STOCK AWARD AGREEMENT

10.            Certain Additional Information.  This Section 10 sets forth
certain information referred to in Section 3 of this Agreement.  For purposes of
this Agreement, three-year average ROIC shall be expressed as follows:
 
 
Three-Year Average ROIC
=
(
(
NOPAT (FY18)
Invested Capital (FY18)
)
+
(
NOPAT (FY19)
Invested Capital (FY19)
)
+
(
NOPAT (FY20)
Invested Capital (FY20)
)
)
÷ 3

 
 
Performance-Based Award Vesting Schedule
 3–Year Average ROIC
2/26/17 – 2/29/20
(FY18 – FY20)
Percent of Target
Performance-Based Shares
Vested
Less than _______%
0%
*_______% - _______%
50% - 74%
*_______% - _______%
75% - 99%
*_______% - _______%
100% - 124%
*_______% - _______%
125% - 149%
*_______% - _______%
 150% - 174 %
*_______% - _______%
175% - 199%
_______%+
200%

*Vesting of shares between the minimum and maximum three-year average ROIC
targets in each band shall be interpolated.  For example, if three-year average
ROIC is ___%, then 62% of the Target Performance-Based Shares would vest.  If
three-year average ROIC is ___%, then 162% of the Target Performance-Based
Shares would vest.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.

 
COMPANY:
GRANTEE:
Pier 1 Imports, Inc.
         
By: _______________________________________________________
_______________________________________________________
Terry E. London
 
Interim President and CEO
   
Address:_________________________________________________
 
                _________________________________________________
 
Email:___________________________________________________

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