exv10w2



 






EXHIBIT 10.2




PIER 1 IMPORTS, INC.




SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN




Effective May 1, 1986



Restated as of December 5, 2002




 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	PAGE	 
	ARTICLE I —PURPOSE
	 	1	 
	 
	 	 	 	 
	ARTICLE II —DEFINITIONS
	 	1	 
	 
	 	 	 	 
	2.1 
	Beneficiary	 	1	 
	2.2 
	Board	 	1	 
	2.3 
	Cause	 	1	 
	2.4 
	Change of Control of the Employer	 	2	 
	2.5 
	Committee	 	2	 
	2.6 
	Compensation	 	2	 
	2.7 
	Deferred Retirement Date	 	2	 
	2.8 
	Early Retirement Date	 	2	 
	2.9 
	Employer	 	3	 
	2.10 
	Good Reason	 	3	 
	2.11 
	Highest Average Compensation	 	3	 
	2.12 
	Normal Retirement Date	 	3	 
	2.13 
	Participant	 	3	 
	2.14 
	Pier 1	 	4	 
	2.15 
	Retirement	 	4	 
	2.16 
	Supplemental Retirement Benefit	 	4	 
	2.17 
	Termination	 	4	 
	2.18 
	Total and Permanent Disability	 	4	 
	2.19 
	Years of Credited Service	 	4	 
	2.20 
	Years of Plan Participation	 	5	 
	 
	 	 	 	 
	ARTICLE III —PARTICIPATION AND VESTING
	 	5	 
	 
	 	 	 	 
	3.1 
	Participation	 	5	 
	3.2 
	Supplemental Retirement Benefit Vesting	 	5	 
	 
	 	 	 	 
	ARTICLE IV —SUPPLEMENTAL RETIREMENT BENEFITS
	 	6	 
	 
	 	 	 	 
	4.1 
	Benefit	 	6	 
	4.2 
	Retirement; Disability; Death	 	6	 
	4.3 
	Adjustments for Deferred Retirement Benefit	 	6	 
	4.4 
	Adjustments for Early Retirement Benefit	 	7	 
	4.5 
	Termination	 	7	 
	4.6 
	Form of Benefit Payment	 	7	 
	4.7 
	Withholding; Payroll Taxes	 	8	 
	4.8 
	Payments	 	8	 
	4.9 
	Payment to Guardian	 	8	 
	4.10 
	Major Medical and Hospitalization Insurance Coverage	 	9	 
	 
	 	 	 	 
	ARTICLE V —BENEFICIARY DESIGNATION
	 	9	 
	 
	 	 	 	 
	5.1 
	Beneficiary Designation	 	9	 






(i)









 






	 	 	 	 	 
	 	 	PAGE	 
	5.2 
	Amendments	 	9	 
	5.3 
	No Beneficiary Designation	 	10	 
	5.4 
	Effect of Payment	 	10	 
	5.5 
	Death of Beneficiary	 	10	 
	 
	 	 	 	 
	ARTICLE VI —ADMINISTRATION
	 	10	 
	 
	 	 	 	 
	6.1 
	Committee; Duties	 	10	 
	6.2 
	Agents	 	10	 
	6.3 
	Binding Effect of Decisions	 	11	 
	6.4 
	Indemnity of Committee	 	11	 
	 
	 	 	 	 
	ARTICLE VII —CLAIMS PROCEDURES
	 	11	 
	 
	 	 	 	 
	7.1 
	Claim	 	11	 
	7.2 
	Denial of Claim	 	11	 
	7.3 
	Review of Claim	 	11	 
	7.4 
	Final Decision	 	11	 
	 
	 	 	 	 
	ARTICLE VIII —TERMINATION, SUSPENSION OR AMENDMENT
	 	12	 
	 
	 	 	 	 
	8.1 
	Amendment or Termination	 	12	 
	8.2 
	Successor Employer	 	12	 
	 
	 	 	 	 
	ARTICLE IX —MISCELLANEOUS
	 	12	 
	 
	 	 	 	 
	9.1 
	Unsecured General Creditor	 	12	 
	9.2 
	Trust Fund	 	12	 
	9.3 
	Nonassignability	 	13	 
	9.4 
	Not a Contract of Employment	 	13	 
	9.5 
	Suicide	 	13	 
	9.6 
	Participant’s Cooperation	 	13	 
	9.7 
	Terms	 	13	 
	9.8 
	Captions	 	13	 
	9.9 
	Governing Law	 	14	 
	9.10 
	Validity	 	14	 
	9.11 
	Successors	 	14	 
	9.12 
	Notice	 	14	 








(ii)









 








PIER 1 IMPORTS, INC.




SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN




ARTICLE I —PURPOSE




     The purpose of this Supplemental Executive Retirement Plan (hereinafter referred to as the
“Plan”) is to provide supplemental retirement benefits for a select group of management or highly
compensated employees of Pier 1 Imports, Inc. It is intended that the Plan will aid in retaining
and attracting employees of exceptional ability by providing such individuals with these benefits.
This Plan was originally effective as of May 1, 1986. This restatement of the Plan shall only
apply with respect to Participants who are actively employed by the Employer after December 5,
2002. The prior provisions of the Plan will continue to apply with respect to Participants who
terminated employment with the Employer prior to December 5, 2002.



ARTICLE II —DEFINITIONS




     For the purposes of this Plan, the following terms shall have the meanings indicated unless
the context clearly indicates otherwise:



2.1 Beneficiary




     “Beneficiary” means the person, persons or entity entitled under Article V to receive Plan
benefits after a Participant’s death.



2.2 Board




     “Board” means the Board of Directors of Pier 1 Imports, Inc.



2.3 Cause




     “Cause” means that the Participant:




     (a) Has misappropriated, stolen or embezzled funds of the Employer; or




     (b) Has committed an act of deceit, fraud, dereliction of duty, or gross or willful
misconduct; or




     (c) Has been convicted of either a felony or a crime involving moral turpitude or
entered a plea of nolo contendre in response to an indictment for such crime or felony; or




     (d) Has intentionally disclosed confidential information of the Employer except when
such disclosure is made pursuant to the direction of the Employer or in accordance with
Employer policy; or



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     (e) Has engaged in competitive behavior against the Employer, has purposely aided a
competitor of the Employer or has misappropriated or aided in misappropriating a material
opportunity of the Employer.



2.4 Change of Control of the Employer




     “Change of Control of the Employer” shall be deemed to have occurred if:




     (a) Any “person” (as defined in Sections 3(a)(9) and 13(d)(3) of the Securities
Exchange Act of 1934 (the “Act”)) becomes the “beneficial owner” (as defined in Rules
13(d)-3 and 13(d)-S under the Act) of securities of Pier 1, representing 35% or more of the
voting power of the outstanding securities of Pier 1 having the right under ordinary
circumstances to vote at an election of the Board of Directors of Pier 1; or




     (b) There shall occur a change in the composition of a majority of the Board of
Directors within a two (2) year period which change shall not have been affirmatively
approved by a majority of the Board of Directors as constituted immediately prior to the
commencement of such period; or




     (c) At any meeting of the stockholders of Employer called for the purpose of electing
directors, a majority of persons nominated by the Board of Directors for election as
directors shall fail to be elected.



2.5 Committee




     “Committee” means the Employees Retirement Plan Committee appointed to administer the
Employees Retirement Plan for the employees of Pier 1 Imports, Inc. or any successor tax-qualified
retirement plan, or any other Committee chosen by the Board.



2.6 Compensation




     “Compensation” for a calendar year means the sum of (i) the rate at which salary is being paid
to a Participant as of the last day of that calendar year, (ii) any bonuses actually paid to a
Participant during that calendar year excluding bonuses that were first payable during and deferred
from a previous calendar year and (iii) any bonuses that were payable to a Participant during that
calendar year which were deferred for payment to a subsequent year.



2.7 Deferred Retirement Date




     “Deferred Retirement Date” means the first day of the month coincident with or next following
the date that the Participant terminates employment with the Employer after the Participant’s
Normal Retirement Date.



2.8 Early Retirement Date




     “Early Retirement Date” means the first day of the month coincidental with or next following
the date on which a Participant terminates employment with the Employer, if such


PAGE 2 – SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


 









 







termination date occurs after the Participant’s attainment of age fifty-five (55) and
completion of ten (10) Years of Plan Participation.



2.9 Employer




     “Employer” means any of Pier 1, its subsidiaries, including a trust directly or indirectly
owned by Pier 1 and each of their respective successors.



2.10 Good Reason




     “Good Reason” means, without the written consent of the Participant:




     (a) A reduction in the Participant’s base salary or a reduction in the Participant’s
benefits received from the Employer (other than in connection with an across-the-board
reduction in salaries and/or benefits for similarly situated employees of the Employer or
pursuant to the Employer’s standard retirement policy), in each case as in effect
immediately prior to a Change of Control; or




     (b) The relocation of the Participant’s full-time office to a location greater than
fifty (50) miles from the Employer’s current corporate office; or




     (c) A reduction in the Participant’s corporate title as in effect immediately prior to
a Change of Control; or




     (d) The failure by the Employer to obtain the assumption of this agreement by any
successor as contemplated in this Plan.



2.11 Highest Average Compensation




     “Highest Average Compensation” means the sum of the Participant’s Compensation for his highest
paid three (3) full calendar years of employment with Employer prior to termination of employment
(whether or not such years are consecutive) divided by three (3); provided, however, that if the
Participant has been employed for less than three (3) full calendar years, the “Highest Average
Compensation” shall be determined by using the sum of the Participant’s Compensation for his number
of completed months of employment divided by the number of his actual completed months of
employment multiplied by twelve (12).



2.12 Normal Retirement Date




     “Normal Retirement Date” means the first day of the month coincidental with or next following
the date on which a Participant attains age sixty-five (65).



2.13 Participant




     “Participant” means any individual who is participating or has participated in this Plan
pursuant to Article III.


PAGE 3 – SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


 









 





2.14 Pier 1




     “Pier 1” means Pier 1 Imports, Inc., a Delaware corporation and its successors.



2.15 Retirement




     “Retirement” means separation from employment with the Employer at the Participant’s Normal
Retirement Date or Deferred Retirement Date or Early Retirement Date. Retirement shall also mean
the date as of which a Participant separates from employment within twenty-four (24) months of a
Change of Control of the Employer due to termination of the employment of a Participant without
regard to Years of Credited Service unless such separation is:




	 	(a)  	By the Employer for Cause; or
	 
	 	(b)  	Because of Total and Permanent Disability; or
	 
	 	(c)  	Because of the Participant’s death; or
	 
	 	(d)  	By the Participant other than:
	 
	 	   	For Good Reason; or
	 
	 	   	Upon the Participant’s voluntary separation from employment after his/her
Normal Retirement Date, Deferred Retirement Date or Early Retirement Date.





2.16 Supplemental Retirement Benefit




     “Supplemental Retirement Benefit” means the benefit determined under Article IV of this Plan.



2.17 Termination




     “Termination” means separation from employment with the Employer for any reason other than
Retirement, death or Total and Permanent Disability.



2.18 Total and Permanent Disability




     “Total and Permanent Disability” means a physical or mental condition which has resulted in
the Participant being eligible for benefits under the Employer’s group long-term disability income
plan.



2.19 Years of Credited Service




     “Years of Credited Service” means the years of credited vesting service with the Employer,
determined in accordance with the provisions of The Employees Retirement Plan of the Employer, or
any successor tax-qualified retirement plan.


PAGE 4 – SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


 









 





2.20 Years of Plan Participation




     “Years of Plan Participation” means the total number of full years in which a Participant has
participated in the Plan.



ARTICLE III —PARTICIPATION AND VESTING




3.1 Participation




     Participation in this Plan shall be limited to those employees of the Employer nominated by
the Chief Executive Officer of Pier 1 and approved by the Committee and by the Board, and who elect
to participate in this Plan by executing a Participation Agreement in the form designated by the
Committee.



3.2 Supplemental Retirement Benefit Vesting





     (a) Vesting Percentage. Each Participant shall become vested in a Supplemental
Retirement Plan Benefit based upon the following schedule:



	 	 	 	 	 
	 	 	Vesting	 
	Years of Credited Service	 	Percentage	 
	 
	Less than 1
	 	 	0	%
	1 but less than 2
	 	 	10	 
	2 but less than 3
	 	 	20	 
	3 but less than 4
	 	 	30	 
	4 but less than 5
	 	 	40	 
	5 but less than 6
	 	 	50	 
	6 but less than 7
	 	 	60	 
	7 but lass than 8
	 	 	70	 
	8 but less than 9
	 	 	80	 
	9 but less than 10
	 	 	90	 
	l0 or more
	 	 	100	 
	 






     (b) Prior Years of Credited Service. For purposes of this Plan, Years of Credited
Service earned prior to the May 1, 1986 date of Plan adoption by the Employer shall be
limited to five (5),




     (c) Conditions for Immediate Vesting. Regardless of a Participant’s actual Years of
Credited Service or age, a Participant shall be one hundred percent (100%) vested in a
Supplemental Retirement Benefit upon Retirement, termination of employment due to Total and
Permanent Disability, or death.

PAGE 5 – SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN



 









 






     (d) Initial Participants. Notwithstanding anything in this Article to the contrary,
any employee of the Employer who becomes a Participant in this Plan within 30 days of the
original May 1, 1986 effective date of this Plan shall be at least fifty percent (50%)
vested in any Plan Benefits herein upon attaining age fifty-five (55).



ARTICLE IV —SUPPLEMENTAL RETIREMENT BENEFITS




4.1 Benefit




     Upon separation from employment, a Participant shall receive a Supplemental Retirement Benefit
from this Plan which, along with the Participant’s benefits from primary Social Security, shall
equal approximately fifty percent (50%) of the Participant’s Highest Average Compensation. The
computation of said Supplemental Retirement Benefit shall be made in accordance with the following
provisions of this Article IV.



4.2 Retirement; Disability; Death




     If a Participant separates from employment due to Retirement, Total and Permanent Disability,
or death prior to the commencement of benefits under this Plan, the Employer shall pay to the
Participant a Supplemental Retirement Benefit calculated as follows:




     (a) Fifty percent (50%) times the Participant’s Highest Average Compensation.




     (b) Increase the amount determined in (a) by six percent (6%) compounded annually for
fifteen (15) years.




     (c) Sum the annual amounts determined in (b).




     (d) The sum of a Participant’s primary Social Security benefit determined at the time
of and according to the laws in effect at the Participant’s Retirement date increased two
percent (2%) compounded annually for fifteen (15) years. However, if a Participant
separates from employment before the Normal Retirement Date, the primary Social Security
benefit shall be determined based upon the primary Social Security benefit the Participant
would have received at the Normal Retirement Date based upon the assumption the Participant
will receive no future compensation after the date of separation from employment and based
upon the relevant Social Security law at the time of separation from employment.




     (e) (c) offset by (d) divided by one hundred eighty (180).



4.3 Adjustments for Deferred Retirement Benefit




     If the Participant separates from employment at a Deferred Retirement Date, the Employer shall
pay to the Participant a Supplemental Retirement Benefit as calculated in paragraph 4.2 above, but
adjusted as follows:


PAGE 6 – SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


 









 






     (a) The percentage of Highest Average Compensation set forth in paragraph 4.2(a) shall
be increased by five (5) percentage points for each Year of Credited Service performed past
the Participant’s Normal Retirement Date, but in no event shall the increase be more than
fifteen (15) percentage points;




     (b) The calculation of Highest Average Compensation shall not take into consideration
any Compensation earned after the Participant attains age 65; and




     (c) The Participant shall forfeit twenty percent (20%) of the Supplemental Retirement
Benefit otherwise due for each Year of Credited Service performed past the Participant’s
attained age seventy (70).



4.4 Adjustments for Early Retirement Benefit




     If a Participant separates from employment at an Early Retirement Date but before his Normal
Retirement Date, the Employer shall pay to the Participant a Supplemental Retirement Benefit as
calculated under Section 4.2 above except:




     (a) The sum amount described in subsection 4.2(c) shall be reduced by five-twelfths
percent (5/12%) for each full calendar month by which the Participant’s Early Retirement
Date precedes the Participant’s attainment of age sixty-five (65); and




     (b) The offset required by subsection 4.2(d) shall be determined using the Social
Security Act in effect at Early Retirement Date and assuming zero (0) future earnings from
the Participant’s Early Retirement Date to his attainment of age sixty-five (65).



4.5 Termination




     If a Participant separates from employment due to Termination, the Employer shall pay to the
Participant the Supplemental Retirement Benefit calculated under paragraph 4.2 above, multiplied by
the vesting percentage of benefit as provided in paragraph 3.2 above.



4.6 Form of Benefit Payment




     Effective as of December 20, 1991, each Participant shall, upon becoming a Participant,
irrevocably elect in writing that his or her benefits under this Plan be paid in one of the
following forms:




     (a) Equal monthly installments paid over a period of one hundred eighty (180) months;




     (b) A lump sum;




     (c) An annuity for the life of the Participant; or




     (d) A joint and survivor annuity over the lives of Participant and the Participant’s
Beneficiary.


PAGE 7 – SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


 









 





     Those individuals who are already Participants on December 20, 1991, but who are not yet
receiving benefits under this Plan, shall within ten (10) days after such date irrevocably elect in
writing one of the foregoing forms for the payment of his or her benefits under this Plan. The
forms of payment specified in subparagraphs (b), (c) and (d) above shall be the actuarial and
financial equivalents of the form of payment specified in subparagraph (a) above.



     For purposes of determining actuarial equivalence, the benefits referred to in subparagraphs
(b), (c) and (d) above shall be discounted at a rate equal to the lesser of (i) the Pension Benefit
Guaranty Corporation interest rate for immediate annuities, as published in Appendix B to Part 2619
of Title 29 of the Code of Federal Regulations, or any successor or replacement rate (the “PBGC
rate”) in effect on January 1 of each year; or (ii) a twenty-four (24) month rolling average of the
PBGC rate, using the current rate as of the beginning of the month in which the calculation is made
and the twenty-three (23) previous months.



     Beginning January 1, 1996, the vested, accrued benefit shall be calculated as of January 1 of
each year for each Participant, and in no event shall the vested, accrued benefit be less than such
benefit calculated for a previous year. For example, if a Participant has elected a lump-sum
benefit and the lump-sum benefit as of January 1, 1996 is $750.000 but, due to an increase in the
discount rate, drops to $700,000 as of January 1, 1997, the Participant’s vested, accrued lump-sum
benefit as of January 1, 1997 would be $750,000.



4.7 Withholding; Payroll Taxes




     To the extent required by the law in effect at the time payments are made, the Employer shall
withhold from payments made hereunder any taxes required to be withheld from a Participant’s wages
by the federal, state or local government.



4.8 Payments




     Any benefit due under this Article shall be paid as set forth below:




     (a) Supplemental Retirement Benefits due as a result of a Participant’s Retirement
shall be paid within thirty (30) days of the earlier of the date of such Retirement or
death:




     (b) Supplemental Retirement Benefits due as a result of Termination or Total and
Permanent Disability shall be paid within thirty (30) days of the earlier of the
Participant’s attaining age sixty-five (65) or death;




     (c) Supplemental Retirement Benefits due as a result of death shall be paid within
thirty (30) days of the death of the Participant.



4.9 Payment to Guardian




     If a Plan benefit is payable to a minor or a person declared incompetent or to a person
incapable of handling the disposition of property, the Committee may direct payment of such Plan
benefit to the guardian, legal representative or person having the care and custody of such minor,
incompetent or person. The Committee may require proof of incompetency, minority,


PAGE 8 – SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


 









 







incapacity or guardianship as it may deem appropriate prior to distribution of the Plan
benefit. Such distribution shall completely discharge the Committee and Employer from all
liability with respect to such benefit.



4.10 Major Medical and Hospitalization Insurance Coverage




     If a Participant separates from employment by reason of Retirement or Total and Permanent
Disability, such Participant (for himself and his dependents) shall have the right to medical
benefit coverage to be provided by the Employer until the death of the Participant; provided,
however, that if the Participant is survived by a spouse, such spouse shall have the right to
continued medical coverage for a period of thirty-six months from the Employer on the same basis as
the Participant would have had if he had survived. Such coverage shall be comparable to the
Employer-provided major medical and hospitalization insurance coverage, if any, made available
generally to the Employer’s active employees and their dependents. Such coverage will only be
provided if the Participant pays, or reimburses the Employer for, a portion of the total premium
for such major medical coverage equal to the amount such Participant would have been required to
pay or reimburse the Employer had he been covered as an active employee of the Employer. Premium
payments or reimbursements required to be paid by a Participant pursuant to this Section 4.10 shall
be made by the Participant at such times and in such form as the Employer shall establish pursuant
to reasonable payment methods.



     If a Participant separates from employment for any reason other than Retirement or Total and
Permanent Disability, such Participant (for the Participant and the Participant’s dependents) shall
have the right to participate, during the fifteen (15) years immediately after the date such
Participant attains age sixty-five (65), in the Employer-provided major medical coverage, if any,
made available generally to the Employer’s active employees and their dependents; provided,
however, that such Participant pays, or reimburses the Employer for, the total premium (i.e.,
Employer and employee portions) for such major medical coverage at such times as the Employer’s
active employees pay their respective contributions for such major medical coverage.



ARTICLE V—BENEFICIARY DESIGNATION




5.1 Beneficiary Designation




     Each Participant shall have the right, at any time, to designate any person or persons as his
Beneficiary or Beneficiaries (both primary and contingent) to whom payment under this Plan shall be
paid in the event of death prior to complete distribution to the Participant of the benefits due
under the Plan. Each Beneficiary designation shall be in a written form prescribed by the
Committee and will be effective only when filed with the Committee during the Participant’s
lifetime. If a Participant’s Compensation is community property, any Beneficiary designation shall
be valid or effective only as permitted under applicable law.



5.2 Amendments




     Any Beneficiary designation may be changed by a Participant without the consent of any
designated Beneficiary by the filing of a new Beneficiary designation with the Committee. The

PAGE 9 – SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN



 









 







filing of a new Beneficiary designation form will cancel all Beneficiary designations
previously filed.



5.3 No Beneficiary Designation




     If any Participant fails to designate a Beneficiary in the manner provided above, or if the
Beneficiary designated by a deceased Participant predeceases the Participant, the Committee, in its
discretion, shall direct the Employer to distribute such Participant’s benefits (or the balance
thereof) as follows:




     (a) To the Participant’s surviving spouse, if any; or




     (b) If the Participant shall have no surviving spouse, then to the Participant’s
children in equal shares, by right of representation; or




     (c) If the Participant shall have no surviving spouse or children, then to the
Participant’s estate.



5.4 Effect of Payment




     Payment to the Beneficiary shall completely discharge Employer’s obligations under this Plan.



5.5 Death of Beneficiary




     Following commencement of payment of Plan benefits, if the Beneficiary designated by a
deceased Participant dies before receiving complete distribution of the benefits, the Committee
shall direct the Employer to distribute the balance of such benefits:




     (a) As designated by the Beneficiary in accordance with the provisions in paragraph 5.1
above; or




     (b) If the Beneficiary shall not have made such designation, then to the Beneficiary’s
estate.



ARTICLE VI—ADMINISTRATION




6.1 Committee; Duties




     This Plan shall be administered by the Committee. Members of the Committee may be
Participants under this Plan.



6.2 Agents




     The Committee may appoint an individual to be the Committee’s agent with respect to the
day-to-day administration of the Plan. In addition, the Committee may, from time to time, employ
other agents and delegate to them such administrative duties as it sees fit, and may from time to
time consult with counsel who may be counsel to the Employer.


PAGE 10 – SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


 









 





6.3 Binding Effect of Decisions




     The decision or action of the Committee with respect to any question arising out of or in
connection with the administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and binding upon all persons having any interest
in the Plan.



6.4 Indemnity of Committee




     The Company shall indemnify and hold harmless the members of the Committee against any and all
claims, loss, damage, expense or liability arising from any action or failure to act with respect
to this Plan, except in the case of gross negligence or willful misconduct by the Committee.



ARTICLE VII —CLAIMS PROCEDURES




7.1 Claim




     Any person claiming a benefit, requesting an interpretation or ruling under the Plan, or
requesting information under the Plan shall present the request in writing to the Committee which
shall respond in writing as soon as practicable.



7.2 Denial of Claim




     If the claim or request is denied, the written notice of denial shall be made within ninety
(90) days of the date of receipt of such claim or request by the Committee and shall state:




 (a) The reason for denial, with specific reference to the Plan provisions on which the denial
is based.




 (b) A description of any additional material or information required and an explanation of why
it is necessary.




 (c) An explanation of the Plan’s claims review procedure.



7.3 Review of Claim




     Any person whose claim or request is denied or who has not received a response within ninety
(90) days may request review by notice given in writing to the Committee within sixty (60) days of
receiving a response or one hundred fifty (150) days from the date the claim was received by the
Committee. The claim or request shall be reviewed by the Committee who may, but shall not be
required to, grant the claimant a hearing. On review, the claimant may have representation,
examine pertinent documents, and submit issues and comments in writing.



7.4 Final Decision




     The decision on review shall normally be made within sixty (60) days after the Committee’s
receipt of a request for review. If an extension of time is required for a hearing or

PAGE 11 – SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN



 









 







other special circumstances, the claimant shall be notified and the time shall be one hundred
twenty (120) days after the Committee’s receipt of a request for review. The decision shall be in
writing and shall state the reason and the relevant Plan provisions. All decisions on review shall
be final and bind all parties concerned.



ARTICLE VIII—TERMINATION, SUSPENSION OR AMENDMENT




8.1 Amendment or Termination




     The Board may, in its sole discretion, amend or terminate this Plan at any time, in whole or
in part; provided, however, that no such amendment or termination shall adversely affect the
benefits of Participants which have vested in accordance with paragraph 3.2 above prior to such
action, the benefits of any Participant who has previously retired, or the benefits of any
Beneficiary of a Participant who has died; provided further, however, that the amendment or
termination of this Plan shall not alter in any manner the timing or form of benefit payments under
this Plan.



8.2 Successor Employer




     The provisions of this Plan shall be binding upon and inure to the benefit of any successor or
assign of the Employer. If a successor Employer amends or terminates this Plan, no such amendment
or termination shall adversely affect the benefits of Participants which have vested in accordance
with paragraph 3.2 above prior to such action, the benefits of any Participant who has previously
retired, or the benefits of any Beneficiary of a Participant who has previously died.



ARTICLE IX—MISCELLANEOUS




9.1 Unsecured General Creditor




     Benefits to be provided under this Plan are unfunded obligations of the Employer.
Participants and their Beneficiaries, heirs, successors, and assigns shall have no secured interest
or claim in any property or assets of Employer, nor shall they be Beneficiaries of, or have any
rights, claims or interests in any life insurance policies, annuity contracts or the proceeds
therefrom owned or which may be acquired by Employer (“Policies”). Except as provided in paragraph
9.2, such Policies or other assets of Employer shall not be held under any trust for the benefit of
Participants, their Beneficiaries, heirs, successors or assigns, or be considered in any way as
collateral security for the fulfilling of the obligations of Employer under this Plan.



9.2 Trust Fund




     Employer shall be responsible for the payment of all benefits provided under the Plan. At its
discretion, Employer may establish one (1) or more trusts, with such trustees as the Board may
approve, for the purpose of providing for the payment of such benefits. Although such a trust
shall be irrevocable, its assets shall be held for payment of all Employer’s general creditors in
the event of insolvency. To the extent any benefits provided under the Plan are paid from any

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such trust, Employer shall have no further obligation to pay them. If not paid from the
trust, such benefits shall remain the obligation of Employer.



9.3 Nonassignability




     Neither a Participant nor any other person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate or convey in advance of
actual receipt the amounts, if any, payable hereunder, or any part thereof. No part of the amounts
payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or any other person,
nor be transferable by operation of law in the event of a Participant’s or any other person’s
bankruptcy or insolvency.



9.4 Not a Contract of Employment




     The terms and conditions of this Plan shall not be deemed to constitute a contract of
employment between Employer and the Participant, and the Participant (or his Beneficiary) shall
have no rights against the Employer except as may otherwise be specifically provided herein.
Moreover, nothing in this Plan shall be deemed to give a Participant the right to be retained in
the service of Employer or to interfere with the right of Employer to discipline or discharge him
at any time.



9.5 Suicide




     Notwithstanding the provisions of Article IV, no benefit shall be paid to a Beneficiary if the
Participant’s death occurs as a result of suicide during the twelve (12) successive calendar months
beginning with the calendar month following the commencement of an individual’s participation in
this Plan.



9.6 Participant’s Cooperation




     A Participant will cooperate with Employer by furnishing any and all information requested by
Employer in order to facilitate the payment of benefits hereunder, and by taking such physical
examinations and such other action as may be requested by Employer.



9.7 Terms




     Whenever any words are used herein in the masculine, they shall be construed as though they
were used in the feminine in all cases where they would so apply; and wherever any words are used
herein in the singular or in the plural, they shall be construed as though they were used in the
plural or the singular, as the case may be, in all cases where they would so apply.



9.8 Captions




     The captions of the articles, sections and paragraphs of this Plan are for convenience only
and shall not control or affect the meaning or construction of any of its provisions.


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9.9 Governing Law




     The provisions of this Plan shall be construed and interpreted according to the laws of the
State of Delaware.



9.10 Validity




     In case any provision of this Plan shall be illegal or invalid for any reason, said illegality
or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal and invalid provision had never been inserted herein.



9.11 Successors




     The provisions of this Plan shall bind and inure to the benefit of Employer and its successors
and assigns. The term successors as used herein shall include any corporate or other business
entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or
substantially all of the business and assets of Employer, and successors of any such corporation or
other business entity.



9.12 Notice




     Any notice or filing required or permitted to be given to the Committee under the Plan shall
be sufficient if in writing and hand delivered, or sent by registered or certified mail, to any
member of the Committee, the President of the Employer, or the Employer’s Statutory Agent. Such
notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of
three (3) days following the date shown on the postmark or on the receipt for registration or
certification.



PIER 1 IMPORTS, INC.




	 	 	 
	By:
	 	 
	

	 	

	

	 	     E. Mitchell Weatherly
	

	 	     Executive Vice President – Human Resources





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