Exhibit 10.7


 


PIER 1 IMPORTS


NON-EMPLOYEE
DIRECTOR COMPENSATION PLAN


ADOPTED JUNE
24, 1999


AS AMENDED DECEMBER 15, 2008


 


Cash Compensation (payable in advance at beginning of each fiscal year
on the first business day of such fiscal year)


 


	
  ·

  	
   

  	
  Non-Employee Director Annual Retainer

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  ·

  	
   

  	
  Audit Committee Chair Annual Retainer

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  ·

  	
   

  	
  Compensation Committee Chair Annual
  Retainer

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  ·

  	
   

  	
  Nominating/Corporate Governance Committee
  Chair Annual Retainer

  	
   

  	
  $

  	
  10,000

  	
   

  
	
  ·

  	
   

  	
  Non-Executive Chairman of the Board Annual
  Retainer

  	
   

  	
  $

  	
  75,000

  	
   

  



 


Director Deferred Stock Units


 


·                  Pursuant to the Director Deferred
Stock Unit Awards program  set forth in
the Pier 1 Imports, Inc. 2006 Stock Incentive Plan,
as amended (the “Plan”).


·                  Each Non-Employee Director may elect
to defer up to 100% (in whole percentages) of their cash fees (i.e., director,
committee chair and chairman annual retainers) for the period January 1,
2009 through February 28, 2009 into an equivalent value of deferred stock
units (up to the Plan’s maximum calendar year limit of 375,000 units per
individual), provided that any such deferral election is made on or before and
becomes irrevocable as of December 31, 2008.  These fees are payable January 2, 2009.


·                  Each Non-Employee Director may elect
to defer up to 100% (in whole percentages) of their cash fees (i.e., director,
committee chair and chairman annual retainers) for an upcoming fiscal year into
an equivalent value of deferred stock units (up to the Plan’s maximum calendar
year limit of 375,000 units per individual), provided that any such deferral
election is made on or before and becomes irrevocable as of the December 31
immediately preceding such fiscal year and is effective for the entire fiscal
year.


·                  Deferrals of the director annual
retainer (other than the portion of the deferral representing committee chair
or chairman annual retainers) are credited with an additional 25% of the
deferred amount.


·                  At the time a Non-Employee Director
ceases to be a Director of the Company, the deferred stock units credited to
such Director at that time shall be adjusted by Pier 1 Imports to remove from
the credited amount (i) any portion of the deferred stock units applicable
to the time period following the Director ceasing to be a Director of the
Company, plus (ii) an amount of deferred stock units equal to any cash
compensation paid to the Non-Employee Director for such time period (such units
to be valued as of the cash compensation payment date). The adjusted amount of
deferred stock units will be converted on a share-to-share basis and paid to
the Non-Employee Director in the form of a single distribution of Pier 1
Imports, Inc. common stock within 30 days, except that deferred units will
be paid in cash to the extent that applicable Plan limitations at such time
preclude Plan distributions of Pier 1 Imports, Inc. common stock.


 


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