Exhibit 10.3


 


PIER 1


 


BENEFIT RESTORATION PLAN II


 


AS AMENDED AND RESTATED EFFECTIVE
JANUARY 1, 2009


 

















 


PIER 1


 


BENEFIT RESTORATION PLAN II


 


AS AMENDED AND RESTATED EFFECTIVE
JANUARY 1, 2009


 


The Pier 1 Benefit
Restoration Plan was established effective as of April 1, 1990, by the
Company.  The purpose of the Pier 1
Benefit Restoration Plan is to permit select members of management and highly
compensated employees of the Company to defer current compensation.  In addition, the Company desires and intends
by the adoption and maintenance of this Benefit Restoration Plan to recognize
the value to the Company of the past and present services of employees covered
by the Benefit Restoration Plan and to encourage and assure their continued
service to the Company by making more adequate provision for their future
retirement security.  The Pier 1 Benefit Restoration Plan was previously amended and restated
effective as of December 20, 1991 and was amended and restated again effective as of July 1,
1995.  Subsequent to July 1, 1995
the Pier 1 Benefit Restoration Plan was amended six (6) times. Effective
as of January 1, 2005, the portion of the Pier 1 Benefit
Restoration Plan which is subject to
certain deferred compensation taxation laws was separated from the portion
which is not subject to such laws, was renamed the Pier 1 Benefit Restoration
Plan II and was amended and restated. 
Effective as of January 1, 2009, the Pier 1 Benefit Restoration
Plan II is hereby amended and restated as hereinafter set forth in this instrument.


 


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PIER 1


 


BENEFIT RESTORATION PLAN II


 


TABLE OF CONTENTS


 


	
  ARTICLE

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  Title, Effective
  Date and Purpose of Restatement

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  Definitions and
  Construction of the Plan Documents

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  Eligibility

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV

  	
   

  	
  Deferral of
  Compensation

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V

  	
   

  	
  Restoration
  Account

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI

  	
   

  	
  Distribution

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII

  	
   

  	
  Beneficiary

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII

  	
   

  	
  Administration of
  the Plan

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX

  	
   

  	
  Claims Procedure

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X

  	
   

  	
  Nature of Company’s
  Obligation

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI

  	
   

  	
  Miscellaneous

  	
   

  	
  9

  



 


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ARTICLE I


TITLE, EFFECTIVE DATE AND
PURPOSE OF RESTATEMENT


 


Section 1.01                                Title.   This Plan shall be known as the Pier 1
Benefit Restoration Plan II (hereinafter
referred to as the “Plan”).


 


Section 1.02                                Effective
Date.   The original effective date of this Plan was April 1, 1990.  The effective date of this restatement is January 1,
2009.


 


Section 1.03                                Purpose of Restatement.   The
purpose of this January 1, 2009 restatement is to cause the Plan to comply
with the final regulations and requirements of Sections 409A(a)(2), (3) and
(4) of the Code.  The Plan is to be
construed and interpreted in accordance with such purpose.


 


ARTICLE II


DEFINITIONS AND CONSTRUCTION
OF THE PLAN DOCUMENTS


 


As used herein, the
following words and phrases
shall have the meanings specified below unless a different meaning is clearly
required by the context:


 


Section 2.01                                Beneficiary.   “Beneficiary” shall mean the person or
persons designated by a Participant as being entitled to receive any benefits
under this Plan.


 


Section 2.02                                Board of
Directors.   The term “Board of Directors”
shall mean the Board of Directors of Pier 1 Imports, Inc.


 


Section 2.03                                Code.   “Code” shall mean the Internal Revenue Code
of 1986, as amended.


 


Section 2.04                                Committee.   “Committee” means the Compensation Committee
of the Board of Directors of Pier 1 Imports, Inc. or such other committee
as may be designated by such board.  The
Committee shall be the plan administrator for purposes of ERISA and shall
manage and administer the Plan in accordance with this document, except for the
administrative functions required to be performed by the Company as set forth
in this document.


 


Section 2.05                                Compensation.   “Compensation” shall mean Compensation, as
defined in the 401(k) Plan; provided, however, that (i) no limit on
annual compensation, pursuant to Code Section 401(a)(17), shall apply, and
(ii) “Compensation” shall not include any forms of bonus payment other
than annual Fiscal Year bonus payments.


 


Section 2.06                                Company.   “Company” shall mean and include the “Employer”
and/or “Adopting Employers”, as such terms are defined in the Pier 1 Associates’
401(k) Plan.


 


Section 2.07                                Compensation
Deferral Agreement.   “Compensation
Deferral Agreement” means the written form of agreement referred to in Section 3.02
hereof which is prescribed by the Company and executed and submitted by a
Participant to the Company before the relevant Election Date.


 


Section 2.08                                Election Date.   The “Election Date” is the date established
by the Company as the date on or
before which an Executive must submit a valid Compensation Deferral Agreement
to the Company.  The applicable Election
Dates for an Executive who has been
designated by the Committee as eligible to participate in the Plan are as
follows: (i) in the case of the first Taxable Year in which an Executive
initially becomes eligible to participate in the Plan, a date which is no later
than the thirtieth (30th) day immediately following the date the Executive
initially became eligible to participate in the 


 


1

















 


Plan, and (ii) for
any Taxable Year following the first Taxable Year in which an Executive becomes
eligible to participate in the Plan, a date which is no later than the last day
of the immediately preceding Taxable Year. 
For purposes of the preceding sentence:


 


(1)                                  A Participant who terminates employment with the Company and who is
thereafter reemployed by the Company and designated upon such reemployment or
thereafter as eligible to participate in the Plan shall upon such designation
be deemed to be initially eligible to participate in the Plan;


 


(2)                                  A Participant who voluntarily suspends his deferrals of Compensation
under the Plan and who thereafter desires to resume such Compensation deferrals
shall not be deemed to be initially eligible to participate in the Plan; and


 


(3)                                  A Participant who ceases to be eligible to participate in the Plan for
any reason but who remains employed with the Company and thereafter again
becomes eligible to participate in the Plan shall not be deemed to be initially
eligible to participate in the Plan.


 


Section 2.09                                ERISA. “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.


 


Section 2.10                                Executive. “Executive”
shall mean any management employee or highly compensated employee of the
Company.


 


Section 2.11                                Fiscal Year. “Fiscal
Year” shall mean the Company’s fiscal year.


 


Section 2.12                                401(k) Plan.
“401(k) Plan” shall mean the Pier 1 Associates 401(k) Plan, as it
shall be amended from time to time.


 


Section 2.13                                Participant. “Participant”
means an Executive who is participating in the Plan within the meaning of Article III
hereof.


 


Section 2.14                                Plan. “Plan”
means this Pier 1 Benefit Restoration Plan II, described in this instrument, as amended from time to time.


 


Section 2.15                                Plan Year.  The “Plan Year” is the calendar year.


 


Section 2.16                                Restoration
Account.  “Restoration Account” is the
account described in Article V as a bookkeeping record for each
Participant of this Plan.  A Participant’s Restoration Account shall
consist of amounts attributable to Compensation deferrals for Taxable Years
from and after December 31, 2004 and of amounts credited as of December 31,
2004 to their Restoration Accounts under the Pier 1 Benefit Restoration Plan
document as then in effect which for any reason are considered as amounts
deferred after December 31, 2004 for purposes of Section 409A of the
Code. A Participant’s Restoration Account may, at the discretion of the
Company, include one or more sub-accounts to reflect the amounts credited to a
Participant under the various terms of this Plan.


 


Section 2.17                                Taxable Year.  “Taxable Year” is a
twelve (12) consecutive month period beginning January 1 and ending December 31.


 


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ARTICLE III


ELIBIBILITY


 


Section 3.01                                Eligibility.  Eligibility for participation in this Plan
shall be determined by the Company, in its sole discretion; provided, however,
that no Executive shall be selected for participation in this Plan unless he
qualifies as a member of a select group of management or as a highly
compensated employee of the Company within the meaning of Section 201(2) of
ERISA, and such Executive has met the eligibility service requirement of the
401(k) Plan.


 


Section 3.02                                Participation.  An Executive, after having been notified by
the Company that he is eligible for participation, shall complete and timely
return to the Company a duly executed Compensation Deferral Agreement.  No Compensation Deferral Agreement shall be
effective before acceptance by the Company.


 


Section 3.03                                Subsequent
Eligibility.  If deferrals of
Compensation are stopped, pursuant to Section 4.05 or Section 4.08
hereof, such Participant shall lose his eligibility for participation in this
Plan until he is again selected by the Company pursuant to Section 3.01
hereof.


 


ARTICLE IV


DEFERRAL OF COMPENSATION


 


Section 4.01                                Compensation
Deferral.  Through the timely delivery to
the Company of an executed Compensation Deferral Agreement a Participant shall
defer the receipt of a dollar amount of Compensation otherwise payable to the
Participant in the future for services that have yet to be rendered.  The dollar amount of Compensation deferred may
not exceed twenty percent (20%) of the Participant’s Compensation per Plan
Year.  Amounts so deferred shall be
credited to such Participant’s Restoration Account.


 


Section 4.02                                Company
Matching Contribution.  With respect to
Compensation deferred under Section 4.01, the Company shall credit to a
Participant’s Restoration Account an additional amount equal to the sum of (i) one
hundred percent (100%) of the first one percent (1%) of a Participant’s elected
Compensation deferral, and (ii) fifty percent (50%) of the next four
percent (4%) of the Participant’s elected Compensation deferral.  The foregoing sum shall be credited to such
Participant’s Restoration Account.


 


Section 4.03                                Initial
Compensation Deferral Agreement.  An
Executive selected to participate in the Plan pursuant to Section 3.02,
must submit a written Compensation Deferral Agreement to the Company on or
before the applicable Election Date following such Executive’s initial
eligibility.  A valid Compensation
Deferral Agreement submitted on or before the applicable Election Date
following the Executive’s initial eligibility shall cause Compensation to be
deferred beginning the first day of the first
full payroll period coincident with or immediately following the date the Compensation
Deferral Agreement is submitted by the eligible Executive to the Company.  An Executive who has been selected to
participate in the Plan pursuant to Section 3.02 but who declines to
participate at that time may thereafter submit a written Compensation Deferral
Agreement to the Company for a subsequent Taxable Year as his initial
Compensation Deferral Agreement provided that he is still eligible for Plan
participation and provided that such agreement is submitted prior to the
beginning of such Taxable Year.  Such
Compensation Deferral Agreement shall cause Compensation to be deferred
beginning the first day of the first full payroll period coincident with or
immediately following the January 1 of such Taxable Year and shall be
effective for all full payroll periods beginning in such Taxable Year.  In no event, however, may a Compensation
Deferral Agreement provide for deferral of Compensation that has been earned as
of the date the Compensation Deferral Agreement is executed by the Participant.


 


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Section 4.04                                Duration of a
Compensation Deferral Agreement.  A
Compensation Deferral Agreement shall remain in effect until revoked or
modified by the execution of a new Compensation Deferral Agreement by the
Participant.


 


Section 4.05                                Compensation
Deferral Agreement Changes.  On or before
the applicable Election Date for a Taxable Year, a Participant may
elect by a written Compensation Deferral Agreement submitted to the Company to
stop, increase or decrease the amount of Compensation deferrals for such Taxable Year.  A Compensation deferral change elected by a
Participant with respect to a Taxable Year shall be effective for all full
payroll periods beginning in such Taxable Year.  No change in Compensation deferrals will be
permitted for any Taxable Year
after the beginning of such Taxable
Year or commencement date for such deferrals in the case of initial eligibility
to participate in the Plan.


 


Section 4.06                                Compensation Deferral Suspension. 
Any Participant who elects a “cash-out” distribution of his Restoration
Account balance under the Pier 1 Benefit Restoration Plan I pursuant to Section 6.01
thereof shall (i) forfeit that amount of deferred Compensation, Company
matching contributions and earnings under this Plan as are necessary to
preserve the status of the “cash-out” distribution provision of the Pier 1
Benefit Restoration Plan I as a benefit that has not been materially modified
for purposes of Section 409A of the Code, and (ii) have his
participation under this Plan suspended in accordance with the terms of Section 6.01
of the Pier 1 Benefit Restoration Plan I. 
The Participant’s participation under this Plan shall be automatically
resumed in accordance with the terms of Section 6.01 of the Pier 1 Benefit
Restoration Plan I.


 


Section 4.07                                Annual Bonus Deferrals. Compensation deferrals for annual bonus amounts
which are payable with respect to any Fiscal Year beginning after the Taxable
Year in which the Executive first becomes eligible to participate in the Plan
will be effected based upon his Compensation deferral election made prior to
the beginning of the Taxable Year in which such Fiscal Year begins.  The annual bonus amount on which Compensation
deferrals are to be effected for the Fiscal Year beginning in the Taxable Year
in which an Executive first became eligible to and first elected to participate
in the Plan shall be reduced to reflect the portion of such annual bonus
payment, if any, which is based upon service completed by such Executive prior
to the date of his Compensation deferral election.


 


Section 4.08                                Change in Employment Status. 
Compensation deferrals shall stop for any Participant who has a change
in employment status and continuation of his Compensation deferrals would cause
this Plan to cease to be a plan which covers a select group of management or
highly compensated employees within the meaning of Section 201(2) of
ERISA.


 


ARTICLE V


RESTORATION ACCOUNT


 


Section 5.01                                Restoration
Account.  Each Participant’s Restoration Account shall as of January 1, 2005
be credited with the dollar amount equal to the portion of his Restoration
Account as of December 31, 2004 which constitutes amounts deferred after December 31,
2004 for purposes of Section 409A of the Code.  Thereafter, Compensation elected to be
deferred by a Participant under a written Compensation Deferral Agreement and
Company matching contributions shall be credited in a dollar amount to the Restoration Account of such Participant.


 


Section 5.02                                Interest.  Each Participant’s Restoration Account balance
shall be credited at least quarterly with an amount of interest at an annual
rate equal to Moody’s Corporate Bond Index, or comparable index if Moody’s
Corporate Bond Index is no longer available, plus 1% where the Index is
averaged on a daily basis for a period determined by the Committee from time to
time.


 


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ARTICLE VI


DISTRIBUTION


 


Section 6.01                                Distributions.
If a Participant has not elected installment payments pursuant to and in
accordance with Section 6.04, then upon the termination of a Participant’s
employment with the Company for any reason (including death), the Participant’s vested portion of
his Restoration Account balance shall be valued and paid to him (or his
Beneficiary) in accordance with Section 6.04 and the non-vested portion of
such Restoration Account balance plus interest earned and accrued on such
amount, if any, shall be forfeited.  For
purposes of the Plan, a Participant will only be deemed to have terminated
employment with the Company if the facts and circumstances are such that he has
had a separation from service with the Company pursuant to guidance issued by
the Internal Revenue Service under Section 409A of the Code.


 


Section 6.02                                Nonforfeitable
Right to Employee Contributions.  Except
as set forth in Section 4.06 hereof, the Participant shall have a one
hundred percent (100%) nonforfeitable and vested right to the value of his
Restoration Account attributable to his Compensation deferrals under Section 4.01
hereof and the interest earned on such deferrals under Section 5.02
hereof.


 


Section 6.03                                Vesting of
Company Matching Contributions.  A
Participant is vested in any Company matching contributions arising under Section 4.02
of this Plan (plus interest thereon pursuant to Section 5.02) according to
the provisions of the 401(k) Plan that are applicable to the vesting of
Employer matching contributions under such 401(k) Plan, irrespective of
whether a Participant is actually participating in the 401(k) Plan.


 


Section 6.04                                Time and Form of
Distributions.  Unless a Participant has
elected an installment form of payment and such election satisfies the
conditions and provisions of this Section 6.04, the distribution of the
vested portion of a Participant’s Restoration Account shall be made in cash
only in the form of a single lump sum payment equaling the value (determined as
of the date of such Participant’s termination of employment with the Company)
of the Participant’s vested portion of his Restoration Account plus interest
accrued on such amount through the date of distribution.  A Participant’s lump sum distribution payment will be made no later than ninety
(90) days following the date the Participant’s employment with the Company is terminated regardless of whether
an account distribution form is received from the Participant. In no event
shall a Participant be permitted directly or indirectly to designate the
taxable year of payment of such benefit.


 


The distribution of a
Participant’s Restoration Account may be made to such Participant in the form
of annual installments over a period of five (5) years commencing as described below provided
that such election will be effective
only if:


 


(1)                                  Such
Participant has attained the age of fifty-five (55) as of the date of his
termination of employment with the Company; and


 


(2)                                  Such
Participant is fully vested in his Restoration Account as of the date of his
termination of employment with the Company.


 


Subject
to the special election right described in Section 6.05 below, a
Participant’s election to receive distribution of his Restoration Account in
the form of annual installments must be made at the time that he first elects
to effect Compensation deferrals under the Plan, shall be non-revocable and
shall be made in writing on a form prescribed by the Company and
filed with the Benefits Department of the Company.  Provided that the above
conditions are satisfied, the Participant’s Restoration Account will be 


 


5

















 


valued as of the date of the Participant’s termination of
employment with the Company.  The
Restoration Account as valued shall be distributed in five (5) equal
annual installments to the Participant. 
The first annual installment will be made no later than ninety (90) days
from the date the Participant’s
employment with the Company is terminated. In no event shall a Participant be
permitted directly or indirectly to designate the taxable year of payment of
such benefit. Each subsequent annual
installment payment will be made no later than ninety (90) days following December 31st
of each year beginning with the year of the initial distribution.  The undistributed balance of a Participant’s
Restoration Account shall be credited with interest in accordance with Section 5.02
on the same basis and in the same manner as interest is credited on the
Restoration Accounts of Participants who are active employees of the Company,
and each annual installment shall include the interest accrued on the
undistributed balance through the date of distribution of such payment.


 


Section 6.05                                Special Election Right.  If a
Participant failed to elect distribution of his Restoration Account in the form
of annual installments at the time described in Section 6.04, such
Participant may thereafter make a non-revocable election in writing on a form
prescribed by the Company and filed with the Benefits Department of the Company
to receive payment of his Restoration Account in the form of installment
payments provided that such election will not take effect until at least twelve
(12) months after the date on which it filed with the Benefits Department of
the Company and will be effective only if:


 


(1)                                  Such Participant has attained the age of fifty-five (55) as of the date
of his termination of employment with the Company; and


 


(2)                                  Such Participant is fully vested in his Restoration Account as of the
date of his termination of employment with the Company.


 


(3)                                  Such
Participant remains employed with the Company for at least twelve (12) months
after the election is filed with the Company.


 


Provided that the above conditions are satisfied,
the Participant’s Restoration Account will be valued as of the date of
commencement of such Participant’s Restoration Account installment
distributions.  The Restoration Account
as valued shall be distributed in five (5) equal annual installments to
the Participant.  The first annual
installment will be made no later than ninety (90) days from:


 


(1)                                  the date the Participant’s employment with the Company is terminated if
such termination was by reason of death or disability within the meaning of Section 409A(2)(
C) of the Code; or


 


(2)                                  the fifth anniversary of the date of the Participant’s termination of
employment if such termination was for any reason other than death or
disability within the meaning of Section 409A(2)( C) of the Code.


 


In no event shall a
Participant be permitted directly or indirectly to designate the taxable year
of payment of such first annual installment. Each subsequent annual installment payment will be made no later than
ninety (90) days following December 31st of each year beginning with the
year of the initial distribution.  The
undistributed balance of a Participant’s Restoration Account shall be credited
with interest in accordance with Section 5.02 on the same basis and in the
same manner as interest is credited on the Restoration Accounts of Participants
who are active employees of the Company, and each annual installment shall
include the interest accrued on the undistributed balance through the date of
distribution of such payment.


 


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Section 6.06                                Loans.  No loans to Participants of amounts in a
Participant’s Restoration Account shall be permitted.


 


Section 6.07                                Key Employee Distributions. 
Notwithstanding any other provisions of this Article VI, in the
case of any Participant who is a “key employee” as such term is defined in Section 416(i) of
the Code without regard to paragraph (5) thereof, no distribution may be
made from the Plan to such Participant as a result of his separation from
service with the Company before the date which is six (6) months after the
date of such separation from service (or, if earlier, the date of death of the
Participant following such separation from service) unless such separation from
service was by reason of any of the events described in Sections
409A(a)(2)(A)(ii), (iii), (iv), (v) or (vi) of the Code.


 


Section 6.08                                Hardship Withdrawals.  A
Participant who has incurred an unforeseeable emergency (as hereinafter
described) may, with the consent of the Company in its sole discretion,  withdraw from his Restoration Account an
amount not in excess of the amount necessary to satisfy such emergency plus
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution, which maximum amount shall be determined after taking into
account the extent to which such hardship is or may be relieved through
reimbursement of compensation by insurance or otherwise or by liquidation of
the Participant’s assets (to the extent that the liquidation of such assets
would not itself cause severe financial hardship).  Any such withdrawal may be requested by
submitting a written request to the Company which shall include such
information as the Company may request in order to determine if the
requirements described in this Section 6.08 are satisfied such that the
withdrawal may be approved.  For purposes
of this Section 6.08, the term “unforeseeable emergency” means a severe
financial hardship to the Participant resulting from an illness or accident of
the Participant, the Participant’s spouse or a dependent (as defined in Section 152(a) of
the Code) of the Participant, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.


 


ARTICLE VII


BENEFICIARY


 


Section 7.01                                Beneficiaries.  If a Participant is participating in the 401(k) Plan,
except as otherwise provided below, at any relevant time for purposes of this
Plan a Participant’s Beneficiaries (and their respective shares and priorities)
shall be those Beneficiaries (and their respective shares and priorities) then
currently designated pursuant to the 401(k) Plan or specially designated
by the Participant pursuant to the 401(k) Plan, as the case may be.  To the extent that a Participant is not
participating in the 401(k) Plan, and except as otherwise provided below,
a Participant may designate a Beneficiary or Beneficiaries pursuant to a
beneficiary designation form.  A
beneficiary election form will be provided to a Participant who is not
participating in the 401(k) Plan upon written request by the Participant
to the Company.  If a Participant fails
to have a beneficiary pursuant to the 401(k) Plan or fails to deliver to
the Company a beneficiary election form for this Plan, the Company shall have
the right to distribute the vested portion of such Participant’s Restoration
Account to the respective estate of such Participant.


 


Section 7.02                                Proper
Beneficiary.  If the Company is in doubt
as to the proper Beneficiary to receive payments hereunder, the Company shall
have the right to withhold such payments until the matter is finally
adjudicated.  However, any payment made
by the Company, in good faith and in accordance with this Plan, shall fully
discharge the Company from all further obligations with respect to that
payment.


 


Section 7.03                                Minor or
Incompetent Beneficiary.  In making any
payments to or for the benefit of any minor or an incompetent Participant or
Beneficiary, the Company, in its sole and absolute discretion may make a
distribution to a legal or natural guardian of a minor or a court appointed
guardian 


 


7

















 


or representative of such incompetent.  The receipt by a guardian or a court
appointed guardian or representative shall be a complete discharge to the
Company and Committee.  Neither the
Committee nor the Company shall have any responsibility to see to the proper
application of any payments so made.


 


ARTICLE VIII


ADMINISTRATION OF THE PLAN


 


Section 8.01                                Majority
Vote.  All resolutions or other actions
taken by the Committee shall be made or taken according to the procedures in
effect for resolutions or actions by the Plan Administrator of the 401(k) Plan.


 


Section 8.02                                Finality of
Determination.  Subject to the Plan, the
Company shall, from time to time, establish forms and procedures for the
administration of the Plan.  Except as
herein otherwise expressly provided, the Committee shall have the exclusive
right to interpret the Plan and to decide any and all matters arising thereunder
or in connection with the administration of the Plan, and it shall endeavor to
act, whether by general rules or by particular decisions, so as not to
discriminate in favor of or against any person. 
The decisions, actions and records of the Committee shall be conclusive
and binding upon the Company and all persons having or claiming to have any
right or interest in or under the Plan.


 


Section 8.03                                Certificates
and Reports.  The members of the
Committee and the officers and directors of the Company shall be entitled to
rely on all certificates and reports made by any duly appointed accountants,
and on all opinions given by any duly appointed legal counsel, which legal
counsel may be counsel for the Company.


 


Section 8.04                                Indemnification
and Exculpation.  The Company shall
indemnify and save harmless each member of the Committee against any and all
expenses and liabilities arising out of his membership and service on the
Committee.  Expenses against which a
member of the Committee shall be indemnified hereunder shall include, without
limitation, the amount of any settlement or judgment, costs, counsel fees, and
related charges reasonably incurred in connection with a claim asserted, or a
proceeding brought or settlement thereof. 
The foregoing right of indemnification shall be in addition to any other
rights to which any such member of the Committee may be entitled as a matter of
law.


 


Section 8.05                                Expenses.  The expenses of administering the Plan shall
be borne by the Company.


 


ARTICLE IX


CLAIMS PROCEDURE


 


Section 9.01                                Written
Claim.  Retirement benefits and the value
of a Participant’s Restoration Account shall be paid in accordance with the
provisions of this Plan and any applicable Compensation Deferral
Agreement.  The Participant, or a
designated Beneficiary or any other person claiming through the Participant
shall make a written request for benefits under this Plan.  This written claim shall be mailed or
delivered to the Company.


 


Section 9.02                                Denied
Claim.  If the claim is denied, in full
or in part, the Company shall provide a written notice within ninety (90) days
setting forth the specific reasons for denial, and any additional material or
information necessary to perfect the claim, and an explanation of why such
material or information is necessary, and appropriate information and explanation
of the steps to be taken if a review of the denial is desired.


 


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Section 9.03                                Review
Procedure.  If the claim is denied and
review is desired, the Participant (or Beneficiary) shall notify the Committee
in writing within sixty (60) days after receipt of the written notice of denial
(a claim shall be deemed denied if the Committee does not take any action
within the aforesaid ninety (90) day period). 
In requesting a review, the Participant or his Beneficiary may request a
review of the Plan or other pertinent documents, may submit any written issues
and comments, may request an extension of time for such written submission of
issues and comments, and may request that a hearing be held before the Committee,
but the decision to hold a hearing shall be within the sole discretion of the
Committee.


 


Section 9.04                                Committee
Review.  The decision on the review of
the denied claim shall be rendered by the Committee within sixty (60) days
after the receipt of the request for review (if a hearing is not held) or
within sixty (60) days after the hearing if one is held.  The decision shall be written and shall state
the specific reasons for the decision including reference to specific
provisions of this Plan or a Compensation Deferral Agreement on which the
decision is based.


 


ARTICLE X


NATURE OF COMPANY’S OBLIGATION


 


Section 10.01                          Company’s
Payment Obligation.  The Company’s
obligations under this Plan shall be an unfunded and unsecured promise to
pay.  The Company shall not be obligated
under any circumstances to fund its financial obligations under this Plan.


 


Section 10.02                          Creditor
Status.  Any assets which the Company may
acquire or set aside to help cover its financial liabilities are and must
remain general assets of the Company subject to the claims of its
creditors.  Neither the Company nor this
Plan gives the Participant any beneficial ownership interest in any asset of
the Company.  All rights of ownership in
any such assets are and remain in the Company and Participants and their
beneficiaries shall have only the rights of general creditors of the Company.


 


Section 10.03                          No Promise of
Employment.  Neither this Plan nor any
agreement or writing executed pursuant hereto, including, but not limited to,
any Compensation Deferral Agreement, shall be construed to promise or guarantee
future employment of any person.


 


Section 10.04                          No Guarantee of
Tax Deferral.  Neither this Plan nor any
agreement or writing executed pursuant hereto, shall be construed as a
representation or assurance that any amounts in a Participant’s Restoration
Account shall not be subject to taxation until such amounts are paid or
distributed to such Participant or any of his Beneficiaries.


 


ARTICLE XI


MISCELLANEOUS


 


Section 11.01                          Written Notice.
 Any notice which shall be or may be
given under the Plan or a Compensation Deferral Agreement shall be in writing
and shall be mailed by United States mail, postage prepaid.  If notice is to be given to the Company, such
notice shall be addressed to the Company, Attn: Pier 1 Benefit Restoration
Plan, at the address of the Company’s principal offices.  If notice is to be given to the Committee,
such notice shall be addressed to the Committee of the Pier 1 Benefit
Restoration Plan, at the address of the Company’s principal offices. If notice
is to be given to a Participant, such notice shall be addressed to the address
shown in such Participant’s Compensation Deferral Agreement.


 


Section 11.02                          Change of
Address.  Any party may, from time to
time, change the address to which notices shall be mailed by giving written
notice of such new address.


 


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Section 11.03                          Merger,
Consolidation or Acquisition.  The Plan
shall be binding upon the Company, its assigns, and any successor Company which
shall succeed to substantially all of its assets and business through merger,
acquisition or consolidation, and upon a Participant, his Beneficiary, assigns,
heirs, executors and administrators.


 


Section 11.04                          Amendment and
Termination.  The Company retains the
sole and unilateral right to terminate, amend, modify, or supplement this Plan,
in whole or in part, at any time.  This
right includes the right to make retroactive amendments.  However, no Company action under this right
shall reduce the amount of the Restoration Account, whether vested or not, of
any Participant or his Beneficiary.


 


Section 11.05                          Nontransferability.  Except insofar as prohibited by applicable
law, no sale, transfer, alienation, assignment, pledge, collateralization or
attachment of any benefits under this Plan shall be valid or recognized by the
Company.  Neither the Participant, his
spouse, or designated Beneficiary shall have any power to hypothecate,
mortgage, commute, modify, or otherwise encumber in advance of any of the
benefits payable hereunder, nor shall any of said benefits be subject to
seizure for the payment of any debts, judgments, alimony maintenance, owed by
the Participant or his Beneficiary, or be transferable by operation of law in
the event of bankruptcy, insolvency, or otherwise.


 


Section 11.06                          Legal
Fees.  All reasonable legal fees incurred
by any Participant (or former Participant) or Beneficiary to successfully
enforce his valid rights under this Plan shall be paid by the Company in addition
to sums due under this Plan.


 


Section 11.07                          Withholding for
Taxes.  The Company shall be entitled to
withhold from payments due under the Plan or from other payments of
Compensation to a Participant any and all taxes of any nature required by any
government to be withheld from compensation paid to employees.


 


Section 11.08                          Domestic Relations Orders.  All or
any portion of a Participant’s Plan benefit will be paid to an individual other
than such Participant pursuant to and in accordance with the provisions of a
domestic relations order but only if such domestic relations order satisfies
all of the requirements to be a “qualified domestic relations order” within the
meaning of Section 414(p) of the Code and only if the timing of
payment or payments under the order comply with the distribution timing
requirements of Section 409A of the Code.


 


Section 11.09                          Gender and
Number.  Wherever the context so
requires, masculine pronouns include the feminine and singular words shall
include the plural.


 


Section 11.10                          Applicable Law.  This Plan shall be governed by the laws of
the State of Texas.


 


IN WITNESS WHEREOF, the
Company has caused this instrument to be executed by its duly authorized
officer effective as of January 1, 2009.


 


 


	
   

  	
  Pier 1 Imports, Inc. for itself and on

  behalf of the Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  December                           ,
  2008

  
				



 


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