Exhibit 10.2
    

    

    

    
      RESTRICTED STOCK AWARD AGREEMENT
FEBRUARY 26, 2012
      PERFORMANCE-BASED AWARD
    

    
      THIS RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) is
      made effective and entered into as of February 26, 2012, by and
      between PIER 1 IMPORTS, INC., a Delaware corporation (the “Company”),
      and ALEXANDER W. SMITH (the “Grantee”).
    

    
      WHEREAS, pursuant to the provisions of the Pier 1 Imports, Inc. 2006
      Stock Incentive Plan, as restated and amended (the “Plan”),
      the Committee that administers the Plan has the authority to grant
      Awards under the Plan to employees of the Company; 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 ONE HUNDRED EIGHTY-SEVEN THOUSAND FIVE HUNDRED (187,500) restricted
      shares of Common Stock (the “Performance-Based Shares”).  Restricted
      shares of Common Stock covered by this Award 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 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. 2006 Stock
      Incentive Plan, as restated and amended, 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 herein, this Award and the restricted shares of Common Stock
      issued with respect to this Award 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
      restricted shares of Common Stock relating thereto shall be forfeited.
    

    
      
        

        

      

      
        
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      3.        Restrictions.  The
      restrictions on SIXTY-TWO THOUSAND FIVE HUNDRED (62,500) shares of
      Common Stock covered by this Award shall lapse and such shares shall
      vest annually provided that, in each case, (x) the Company satisfies
      certain EBITDA (as hereinafter defined) targets for the fiscal years of
      the Company ending March 2, 2013, March 1, 2014, and February 28, 2015,
      which EBITDA targets are to be established by the Board or the Committee
      prior to or within the first quarter of each such fiscal year (the “Performance
      Measure”), and (y) the Grantee is employed by the Company on the
      last day of each such respective Company fiscal year.
    

    
      “EBITDA” shall mean the Company's adjusted consolidated operating cash
      earnings before interest, taxes, depreciation and amortization from all
      domestic and international operations, but not including discontinued
      operations, unusual or non-recurring charges or recurring non-cash
      items, each as determined by the Committee.
    

    
      With respect to any Performance-Based Shares that vest based on
      satisfying an EBITDA target for a given Company fiscal year, vesting
      shall occur pursuant to the following schedule:
    

    
      100% of the EBITDA target – 62,500 shares;
    

    
      96% of the EBITDA target – 56,250 shares;
    

    
      92% of the EBITDA target – 50,000 shares;
    

    
      88% of the EBITDA target – 43,750 shares;
    

    
      84% of the EBITDA target – 37,500 shares; and
    

    
      80% of the EBITDA target – 31,250 shares.
    

    
      Additionally, vesting of shares between the fixed percentage points of
      the EBITDA target for a given Company fiscal year shall be
      interpolated.  For example, if 94% of the EBITDA target is achieved,
      then 53,125 shares would vest.
    

    
      If the Company’s aggregate consolidated EBITDA for any two consecutive
      fiscal years occurring during the three-fiscal year period beginning
      February 26, 2012, applicable to the grant of the Performance-Based
      Shares equals or exceeds the sum of the EBITDA targets for those two
      fiscal years, then any portion of any Performance-Based Shares that did
      not vest in the first fiscal year shall vest at the time the
      Performance-Based Shares vest for the second fiscal year.  Further, if
      the Company’s aggregate consolidated EBITDA for the three-fiscal year
      period beginning February 26, 2012, applicable to the grant of the
      Performance-Based Shares equals or exceeds the sum of the EBITDA targets
      for those three fiscal years, then all of the shares subject to that
      grant that did not vest shall vest at the time the Performance-Based
      Shares vest for the third fiscal year.
    

    
      Further, notwithstanding any other provision of this Agreement to the
      contrary, in the event that the Grantee is employed by the Company on
      the last day of any fiscal year of the Company in which any of the
      Performance-Based Shares vest pursuant to this Agreement, the Grantee
      shall be entitled to the vesting of the Performance-Based Shares for
      that fiscal year, as set forth above, regardless of whether the
      Grantee’s employment terminates prior to the formal determination of
      vesting (i.e., based on EBITDA calculations) for such fiscal year, as
      set forth in this Section 3. The determination by the Company with
      respect to the achieving of the EBITDA targets for vesting of the
      Performance-Based Shares shall occur upon the filing of the Company's
      Annual Report on Form 10-K with the Securities and Exchange Commission
      for each respective Company fiscal year.
    

    
      
        

        

      

      
        
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      The employment of the Grantee with the Company is governed by the terms
      and provisions of the Employment Agreement between the Company and the
      Grantee dated December 15, 2009 (the “Employment Agreement”).  If
      Grantee's employment is terminated by the Company for “Cause” or by
      Grantee without “Good Reason” (as such terms are defined in the
      Employment Agreement), the Common Stock covered by this Award, to the
      extent not vested, shall terminate and be forfeited by the Grantee.  If
      Grantee's employment is terminated by the Company without Cause or by
      Grantee for Good Reason then any portion of the Common Stock covered by
      this Award, to the extent not vested as of the termination date, shall
      become vested and unrestricted as of such termination date. Upon
      “Non-Renewal by the Company” (as such term is defined in the Employment
      Agreement) then any portion of the Common Stock covered by this Award,
      to the extent not vested, shall become vested and unrestricted on the
      expiration of the Term (as such term is defined in the Employment
      Agreement). All rights and ownership in the shares of Common Stock
      covered by this Award as to which the restrictions thereon shall not
      have lapsed shall immediately vest in the Company.
    

    
      4.  Voting and Dividend Rights.  With respect to the
      Common Stock covered by this Award 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 restricted shares of
      Common Stock covered by this Award 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 restricted shares of Common Stock covered by this Award, and any
      consideration receivable for or in conversion of or exchange for the
      restricted shares of Common Stock covered by this Award, unless
      otherwise determined by the Committee, shall be subject to the terms and
      conditions of this Restricted Stock Award Agreement or with such
      modifications thereof as the Committee may provide in its absolute
      discretion.
    

    
      5.  Distribution Following End of Restrictions.  Upon
      attainment of the Performance Measure and the expiration of the
      restrictions provided in Section 3 hereof as to the restricted shares of
      Common Stock covered by this Award, 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 his death after such
      events cause such certificate to be delivered to his or her legal
      representative, beneficiary or heir) or provide book-entry
      uncertificated shares designated for the Grantee (or, in the case of his
      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 in the event of certificated shares.  
    

    
      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 the Common Stock did not trade on such day, on the
      first preceding day on which trading occurred.  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.
    

    
      
        

        

      

      
        
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      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 shares
      acquired by him 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 Restricted
      Stock Award 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.
    

    
      9.  Miscellaneous.  This Restricted Stock Award
      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.  The value of the Performance-Based Shares shall be equal to
      the Fair Market Value on the date of lapse of the restrictions or, if
      the Common Stock did not trade on such day, on the first preceding day
      on which trading occurred.
    

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


    	
          
            COMPANY:
          

        	
           
        	
          GRANTEE:
        
	

        	

        	

        	
           
        
	
          
            Pier 1 Imports, Inc.
          

        	

        	

        
	

        	

        	

        	
           
        
	

        	

        	

        	
           
        
	
          
            By:
          

        	
          
             
          

        	

        	
           
        
	

        	
          Michael A. Carter
        	

        	
          Alexander W. Smith
        
	

        	
          Senior V.P. and General Counsel,
        	

        	

        
	

        	
          Secretary
        	

        	

        


    

    
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