Document:

exv10w3

 

EXHIBIT 10.3

PIER 1 IMPORTS, INC.

SUPPLEMENTAL RETIREMENT PLAN

Effective September 28, 1995

Restated as of December 5, 2002

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	PAGE
	ARTICLE I — PURPOSE	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II — DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 
	          2.1

	 	Actuarial Equivalent
	 	 	1	 
	          2.2

	 	Beneficiary
	 	 	1	 
	          2.3

	 	Board
	 	 	1	 
	          2.4

	 	Cause
	 	 	1	 
	          2.5

	 	Change of Control of the Employer
	 	 	2	 
	          2.6

	 	Committee
	 	 	2	 
	          2.7

	 	Compensation
	 	 	2	 
	          2.8

	 	Early Retirement Date
	 	 	2	 
	          2.9

	 	Employer
	 	 	2	 
	          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
	 	 	3	 
	          2.15

	 	Retirement
	 	 	3	 
	          2.16

	 	Supplemental Retirement Benefit
	 	 	4	 
	          2.17

	 	Target Amount
	 	 	4	 
	          2.18

	 	Termination
	 	 	4	 
	          2.19

	 	Total and Permanent Disability
	 	 	4	 
	          2.20

	 	Years of Credited Service
	 	 	4	 
	          2.21

	 	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

	 	Normal Retirement Benefit
	 	 	6	 
	          4.3

	 	Early Retirement Benefit
	 	 	6	 
	          4.4

	 	Change of Control Benefit
	 	 	6	 
	          4.5

	 	Disability Retirement Benefit
	 	 	7	 
	          4.6

	 	Termination Benefit
	 	 	7	 
	          4.7

	 	Form of Benefit Payment
	 	 	7	 
	          4.8

	 	Commencement of Payments
	 	 	7	 
	          4.9

	 	Withholding; Payroll Taxes
	 	 	8	 
	          4.10

	 	Payment to Guardian
	 	 	8	 
	          4.11

	 	Major Medical and Hospitalization Insurance Coverage
	 	 	8	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	PAGE
	ARTICLE V — SURVIVOR BENEFITS	 	 	9	 
	 
	 	 	 	 	 	 
	          5.1

	 	Death Prior to Commencement of Benefits
	 	 	9	 
	          5.2

	 	Death After Commencement of Benefits
	 	 	9	 
	          5.3

	 	Suicide; Misrepresentation
	 	 	9	 
	          5.4

	 	Effect of Payment
	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE VI — BENEFICIARY DESIGNATION	 	 	10	 
	 
	 	 	 	 	 	 
	          6.1

	 	Death of Beneficiary
	 	 	10	 
	          6.2

	 	Amendments
	 	 	10	 
	          6.3

	 	No Beneficiary Designation
	 	 	10	 
	          6.4

	 	Effect of Payment
	 	 	10	 
	          6.5

	 	Death of Beneficiary
	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE VII — ADMINISTRATION	 	 	11	 
	 
	 	 	 	 	 	 
	          7.1

	 	Committee; Duties
	 	 	11	 
	          7.2

	 	Agents
	 	 	11	 
	          7.3

	 	Binding Effect of Decisions
	 	 	11	 
	          7.4

	 	Indemnity of Committee
	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE VIII — CLAIMS PROCEDURE	 	 	11	 
	 
	 	 	 	 	 	 
	          8.1

	 	Claim
	 	 	11	 
	          8.2

	 	Denial of Claim
	 	 	11	 
	          8.3

	 	Review of Claim
	 	 	12	 
	          8.4

	 	Final Decision
	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE IX — TERMINATION, SUSPENSION OR AMENDMENT	 	 	12	 
	 
	 	 	 	 	 	 
	          9.1

	 	Amendment or Termination
	 	 	12	 
	          9.2

	 	Successor Employer
	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE X — MISCELLANEOUS	 	 	13	 
	 
	 	 	 	 	 	 
	          10.1

	 	Unsecured General Creditor
	 	 	13	 
	          10.2

	 	Trust Fund
	 	 	13	 
	          10.3

	 	Nonassignability
	 	 	13	 
	          10.4

	 	Not a Contract of Employment
	 	 	13	 
	          10.5

	 	Participant’s Cooperation
	 	 	13	 
	          10.6

	 	Captions
	 	 	14	 
	          10.7

	 	Governing Law
	 	 	14	 
	          10.8

	 	Validity
	 	 	14	 
	          10.9

	 	Successors
	 	 	14	 
	          10.10

	 	Notice
	 	 	14	 

ii

 

PIER 1 IMPORTS, INC.

SUPPLEMENTAL RETIREMENT PLAN

ARTICLE I — PURPOSE

     The purpose of this Supplemental 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 September 28, 1995. This restatement of the Plan is effective as of
December 5, 2002. 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 Actuarial Equivalent

     “Actuarial Equivalent” means equivalence in value between two (2) or more forms and/or times
of payment based on the mortality table prescribed by the Secretary of the Treasury or his delegate
in accordance with Internal Revenue Code Section 412(l)(7)(C)(ii), and an interest rate equal to
the twenty-four (24) month rolling average of 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”), using the current rate
as of the beginning of the month in which the calculation is made and the twenty-three (23)
previous months.

2.2 Beneficiary

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

2.3 Board

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

2.4 Cause

     “Cause” means that the Participant:

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

PAGE 1 — SUPPLEMENTAL RETIREMENT PLAN

 

 

          (b) Committed an act of deceit, fraud, or willful misconduct or otherwise acted in bad
faith, adverse to the best interests of the Employer.

2.5 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)-5 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.

2.6 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.

2.7 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.

2.8 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 Employer, if such termination date
occurs on or after such 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 business trust directly or
indirectly wholly owned by Pier 1 and their respective successors.

PAGE 2 — SUPPLEMENTAL RETIREMENT PLAN

 

 

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 terminates employment with Employer, if such termination date
occurs on or after such Participant’s attainment of age sixty-five (65).

2.13 Participant

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

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 Early Retirement Date. Retirement shall also mean the date as of

PAGE 3 — SUPPLEMENTAL RETIREMENT PLAN

 

 

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 or Early Retirement Date.

2.16 Supplemental Retirement Benefit

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

2.17 Target Amount

     “Target Amount” means sixty percent (60%) of Highest Average Compensation multiplied by a
fraction, the numerator of which is the Participant’s actual Years of Credited Service, not to
exceed twenty (20), and the denominator of which is twenty (20).

2.18 Termination

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

2.19 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.

2.20 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 RETIREMENT PLAN

 

 

2.21 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 Benefit based upon Years of Plan Participation under the following schedule:

	 	 	 	 	 
	Years of Plan	 	Vesting
	Participation	 	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) Conditions for Immediate Vesting. Regardless of a Participant’s actual Years of
Plan Participation, a Participant shall be one hundred percent (100%) vested in a
Supplemental Retirement Benefit upon Retirement, Retirement based on a Change of Control of
the Employer, termination of employment due to Total and Permanent Disability, or death.

PAGE 5 — SUPPLEMENTAL RETIREMENT PLAN

 

 

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 sixty percent (60%) of the Participant’s Highest Average Compensation. The
computation of said Supplemental Retirement Benefit shall be made in accordance with the provisions
of Articles IV and V, as applicable, but in no event shall the amount of the Supplemental
Retirement Benefit paid annually to any Participant exceed five hundred thousand dollars
($500,000). Notwithstanding the above, a Participant who is terminated for Cause shall forfeit any
right to receive benefits under the Plan.

4.2 Normal Retirement Benefit

     If a Participant retires at a Normal Retirement Date, Employer shall pay to the Participant a
monthly Supplemental Retirement Benefit from this Plan equal to one-twelfth (1/12th) of the
following annual amounts:

          (a) The Target Amount; less

          (b) The Participant’s primary Social Security benefit payable at Retirement.

4.3 Early Retirement Benefit

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

          (a) The Target Amount 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(b) 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 the Participant’s attainment of age sixty-five
(65).

4.4 Change of Control Benefit

     If a Participant retires as a result of a Change of Control of the Employer, Employer shall
pay to the Participant the monthly Supplemental Retirement Benefit calculated under Section 4.2
above except the offset required by Subsection 4.2(b) shall be determined using the Social Security
Act in effect at the date of Retirement due to a Change of Control and assuming zero (0) future
earnings from the Participant’s Retirement date to the Participant’s attainment of age sixty-five
(65).

PAGE 6 — SUPPLEMENTAL RETIREMENT PLAN

 

 

4.5 Disability Retirement Benefit

     If a Participant separates from employment with Employer due to Total and Permanent
Disability, Employer shall pay to the Participant the monthly Supplemental Retirement Benefit
calculated under Section 4.2 or 4.3, as applicable, except that Years of Credited Service shall
continue to accrue from the separation date to the Normal Retirement Date, or Early Retirement
Date, as the case may be.

4.6 Termination Benefit

     If a Participant terminates employment with Employer prior to Retirement, death or Total and
Permanent Disability, Employer shall pay to the Participant the monthly Supplemental Retirement
Benefit calculated under Section 4.2 above except:

          (a) The offset required by Subsection 4.2(b) shall be determined using the Social
Security Act in effect at Termination and assuming level earnings to the Participant’s
attainment of age sixty-five (65); and

          (b) The benefit shall be multiplied by the vesting percentage provided in Section 3.2
above.

4.7 Form of Benefit Payment

     The Supplemental Retirement Benefit determined under Article IV shall be paid in the basic
form provided below unless the Participant elects an alternative form in the form of
payment designation. Any alternative form shall be the Actuarial Equivalent of the basic form
of benefit payment. The basic and alternative forms of payments are as follows:

          (a) Basic Form of Benefit Payment. A monthly single life annuity for the Participant’s
life.

          (b) Alternative Forms of Benefit Payment.

               (i) A monthly joint and survivor annuity with payment continued to the survivor
at one hundred percent (100%); or

               (ii) A monthly joint and survivor annuity with payment continued to the
survivor at fifty percent (50%) of the amount paid to the Participant.

     Notwithstanding the above, whenever the lump sum equivalent of the benefit is $25,000 or less,
the benefit shall be paid in a lump sum.

4.8 Commencement of Payments

     Benefits payable to a Participant under Sections 4.2, 4.3, 4.4 and 4.5 shall commence as soon
as practicable after the appropriate application for benefits has been made but not later than
sixty (60) days after all information necessary to calculate the benefit amount has been received
by Employer. Benefits payable to a Participant under Section 4.6 as a result of Termination shall

PAGE 7 — SUPPLEMENTAL RETIREMENT PLAN

 

 

commence on the first day of the month coincidental with or next following the date on which the
Participant attains age sixty-five (65). All payments shall be made as of the first day of the
month.

4.9 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.

4.10 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 incompetence, minority, 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.

4.11 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 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 4.11 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.

PAGE 8 — SUPPLEMENTAL RETIREMENT PLAN

 

 

ARTICLE V — SURVIVOR BENEFITS

5.1 Death Prior to Commencement of Benefits

          (a) Death at or After Age 55. If a Participant dies after becoming eligible for
Retirement at an Early Retirement Date but prior to Retirement, Employer shall pay a
survivor benefit to the Participant’s Beneficiary equal to the Retirement benefit that would
have been provided had the Participant retired on the day before the Participant’s death
with a fifty percent (50%) joint and survivor annuity form.

          (b) Death Prior to Age 55. If a Participant dies prior to the Early Retirement Date,
Employer shall pay a survivor benefit to the Participant’s Beneficiary equal to the
Termination benefit that would have been provided had the Participant elected a fifty
percent (50%) joint and survivor annuity form.

          (c) Time of Payment. Any benefits payable to a Beneficiary under this section shall
commence as soon as practicable after the appropriate application for benefits has been made
but not later than sixty (60) days after all information necessary to calculate the benefit
amount has been received by Employer. All payments shall be made as of the first day of the
month.

5.2 Death After Commencement of Benefits

     If a Participant dies after benefit payments have commenced under Article IV, a survivor
benefit shall be paid to the Participant’s Beneficiary only if, and to the extent, provided for by
the form of payment under which the Participant was receiving a Supplemental Retirement Benefit,
pursuant to Section 4.7.

5.3 Suicide; Misrepresentation

     No benefit shall be paid to a surviving spouse if the Participant’s death occurs as a result
of suicide during the twelve (12) calendar months beginning with the calendar month following
commencement of participation in this Plan. The Committee may deny payment if death occurs
within twelve (12) months beginning with the calendar month following commencement of
participation in this Plan if the Participant has made a material misrepresentation in any form or
document provided by the Participant to or for the benefit of Employer.

5.4 Effect of Payment

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

PAGE 9 — SUPPLEMENTAL RETIREMENT PLAN

 

 

ARTICLE VI — BENEFICIARY DESIGNATION

6.1 Death of Beneficiary

     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.

6.2 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
filing of a new Beneficiary designation form will cancel all Beneficiary designations previously
filed.

6.3 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 Participants
children in equal shares, by right of representation; or

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

6.4 Effect of Payment

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

6.5 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 Section 6.1
above; or

PAGE 10 — SUPPLEMENTAL RETIREMENT PLAN

 

 

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

ARTICLE VII — ADMINISTRATION

7.1 Committee; Duties

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

7.2 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.

7.3 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.

7.4 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 VIII — CLAIMS PROCEDURE

8.1 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.

8.2 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.

PAGE 11 — SUPPLEMENTAL RETIREMENT PLAN

 

 

     (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.

8.3 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.

8.4 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 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 IX — TERMINATION, SUSPENSION OR AMENDMENT

9.1 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 Section 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.

9.2 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 Section 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.

PAGE 12 — SUPPLEMENTAL RETIREMENT PLAN

 

 

ARTICLE X — MISCELLANEOUS

10.1 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 Section 10.2, 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.

10.2 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 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.

10.3 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.

10.4 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.

10.5 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.

PAGE 13 — SUPPLEMENTAL RETIREMENT PLAN

 

 

10.6 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.

10.7 Governing Law

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

10.8 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.

10.9 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.

10.10 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	 	 

PAGE 14 — SUPPLEMENTAL RETIREMENT PLANexv10w4w2

 

EXHIBIT 10.4.2

FIRST AMENDMENT

TO THE

PIER 1 BENEFIT RESTORATION PLAN

     WHEREAS, PIER 1 IMPORTS, INC. (the “Company”) has heretofore adopted the PIER 1 BENEFIT
RESTORATION PLAN; and

     WHEREAS, such plan was amended and restated effective July 1, 1995 (such amended and restated
plan herein the “Plan”); and

     WHEREAS, the Company desires to amend the Plan’s definition of “Board of Directors” contained
in Section 2.02 of the Plan to state the applicable company as Pier 1 Imports, Inc.; and

     WHEREAS, the Company desires to amend the Plan’s definition of “Company” contained in Section
2.06 of the Plan to include wholly owned non-corporate business trust(s) of the Company;

     NOW, THEREFORE pursuant to Section 11.04 of the Plan, effective October 1, 1996, the Plan is
amended as follows:

	 	1.  	Section 2.02 of the Plan is amended to read as follows:
	 
	 	   	Board of Directors. The term “Board of Directors” shall mean the Board of
Directors of Pier 1 Imports, Inc.
	 
	 	2.  	Section 2.06 of the Plan is amended to read as follows:
	 
	 	   	Company. “Company” shall mean and include the “Employer” and/or
“Participating Affiliate” as such terms are defined in the Pier 1 Associates’ 401(k)
Plan.

     IN WITNESS WHEREOF, the Company has caused this Amendment to be executed as of the stated
effective date.

	 	 	 	 	 
	 	 	PIER 1 IMPORTS, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	E. Mitchell Weatherly
	

	 	 	 	Senior Vice President

1

 

SECOND AMENDMENT

TO THE

PIER 1 BENEFIT RESTORATION PLAN

     WHEREAS, PIER 1 IMPORTS, INC. (the “Company”) has heretofore adopted the PIER 1 BENEFIT
RESTORATION PLAN; and

     WHEREAS, such plan was amended and restated effective July 1, 1995 (such amended and restated
plan herein the “Plan”); and

     WHEREAS, the Plan was amended effective October 1, 1996, by the First Amendment to the Pier 1
Benefit Restoration Plan; and

     WHEREAS, the Plan as amended is hereinafter referred to as the Plan; and

     WHEREAS, the Company desires to further amend the Plan with respect to Plan distributions;

     NOW, THEREFORE pursuant to Section 11.04 of the Plan, effective July 1, 1997, the Plan is
amended as follows:

	 	1.  	Section 6.01 of the Plan is deleted in its entirety and the following language
is substituted in its place:
	 
	 	   	Section 6.01 Distributions. As soon as practicable following the
termination of a Participant’s employment with the Company for any reason (i) the
value (determined as of the date of termination) of such Participant’s vested
interest in his Restoration Account balance shall be paid to him, plus interest
accrued on such amount through the date of distribution, and (ii) the non-vested
portion of a Participant’s Restoration Account balance, if any, plus interest earned
and accrued on such amount shall be forfeited.

2

 

	 	   	Prior to termination of his employment with the Company, a Participant may at any
time elect a “cash-out” distribution equal to ninety percent (90%) of the value
(determined as of the last day of the Plan Quarter immediately preceding a
“cash-out” distribution request) of such Participant’s vested interest in his
Restoration Account balance. Such “cash-out” distribution shall be made as soon as
administratively practical after the Participant has submitted a request in writing
to the Committee that such distribution be made. All other amounts to which
Participant shall be entitled including the remaining ten percent (10%) balance of
the Participant’s vested interest in his Restoration Account balance along with
interest earned on such amount and interest on the Restoration Account balance
accrued after, and Participant deferred compensation and Company matching
contributions made after valuation of such account for purposes of the “cash-out”
shall be forfeited, notwithstanding Section 6.02 of the Plan. If a Participant who
elects such a “cash-out” distribution is not fully vested in his Restoration Account
balance, then in addition to the above forfeitures, the non-vested portion of such
account shall be forfeited along with all earned and accrued interest on such
account.
	 
	 	   	Any Participant who elects “cash-out” distribution of his Restoration Account
balance pursuant to this Section 6.01 shall not be eligible to participate in the
Plan again until the first day of any Plan Quarter following the expiration of
twelve (12) full calendar months from the date that such “cash-out” distribution was
paid to him.

     All capitalized terms herein shall have the meaning set forth in the Plan unless a different
meaning is attributed to such term pursuant to this document.

     IN WITNESS WHEREOF, the Company has caused this Amendment to be executed as of July 1, 1997.

	 	 	 	 	 
	 	 	PIER 1 IMPORTS, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	E. Mitchell Weatherly
	

	 	 	 	Senior Vice President

 

 

THIRD AMENDMENT TO

PIER 1

BENEFIT RESTORATION PLAN

     WHEREAS, Pier 1 Imports, Inc. and other affiliates of Pier 1 Imports, Inc. have
heretofore adopted the Pier 1 Benefit Restoration Plan (the “Plan”); and

     WHEREAS, Pier 1 Imports, Inc. desires to amend the Plan on behalf of it and each of its
affiliates which has adopted the Plan;

     NOW, THEREFORE, the Plan shall be amended effective July 1, 1998 as follows:

     1. The first sentence of Section 6.01 of the Plan shall be deleted and the following two
sentences shall be substituted in its place:

“If a Participant has not elected installment payments pursuant to and in accordance
with Section 6.04, then (i) upon the termination of a Participant’s employment with
the Company for any reason the Participant shall deliver to the Company’s Benefits
Department an account distribution form for the Participant’s Restoration Account,
and (ii) the Participant’s vested portion of his Restoration Account balance shall
be valued and paid to him 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.”

     2. Section 6.04 of the Plan shall be deleted and the following shall be substituted in its
place:

“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 approximately ninety (90) days from the end of the Plan quarter in
which the Participant’s employment with the Company is terminated regardless of
whether an account distribution form is received from the Participant.

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
provided that:

 

 

	 	(1)  	Such Participant has attained the age of
fifty-five (55) as of the date of his termination of employment with
the Company for any reason;
	 
	 	(2)  	Such Participant is fully vested in his
Restoration Account as of the date of his termination of employment
with the Company for any reason; and
	 
	 	(3)  	Such Participant makes 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 and such
election is made at least three hundred sixty-five (365) days prior to
the date that such Participant’s employment with the Company is
terminated for any reason.

Provided that the above conditions are satisfied, the Participant’s Restoration
Account will be valued as of the date of such 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 approximately ninety (90) days from the end of the Plan
quarter in which the Participant’s employment with the Company is terminated. Each
subsequent annual installment payment will be made approximately 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.”

     3. As amended hereby, the Plan is specifically ratified and reaffirmed.

     Signed effective July 1, 1998.

	 	 	 	 	 
	 	 	PIER 1 IMPORTS, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	E. Mitchell Weatherly, Senior Vice President

 

 

FOURTH AMENDMENT

TO THE

PIER 1 BENEFIT RESTORATION PLAN

     WHEREAS, PIER 1 IMPORTS, INC. (the “Company”) has heretofore adopted the PIER 1 BENEFIT
RESTORATION PLAN; and

     WHEREAS, such plan was amended and restated effective July 1, 1995 (such amended and restated
plan herein the “Plan”); and

     WHEREAS, the Company has previously amended the Plan and desires to further amend the Plan’s
definition of “Company” contained in Section 2.06 of the Plan;

     NOW, THEREFORE pursuant to Section 11.04 of the Plan, effective October 1, 1999, the Plan is
amended as follows:

     1. Section 2.06 of the Plan is amended to read as follows:

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.

     IN WITNESS WHEREOF, the Company has caused this Amendment to be executed as of the stated
effective date.

	 	 	 	 	 
	 	 	PIER 1 IMPORTS, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	E. Mitchell Weatherly
	

	 	 	 	Senior Vice President

 

 

FIFTH AMENDMENT

TO THE

PIER 1 BENEFIT RESTORATION PLAN

     WHEREAS, PIER 1 IMPORTS, INC. (the “Company”) has heretofore adopted the PIER 1 BENEFIT
RESTORATION PLAN; and

     WHEREAS, such plan was amended and restated effective July 1, 1995 (such amended and restated
plan herein the “P lan”); and

     WHEREAS, the Company has previously amended the Plan and desires to further amend the Plan;

     NOW, THEREFORE pursuant to Section 11.04 of the Plan, effective July 1, 2002, the Plan is
amended as follows:

	 	1.  	Section 5.02 of the Plan is amended by deleting the two (2) sentences in that
section and replacing them with the following text:
	 
	 	   	“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.”

     As amended hereby, the Plan is specifically ratified and reaffirmed. The Company has executed
this Amendment as of the stated effective date.

	 	 	 	 	 
	 	 	PIER 1 IMPORTS, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	   E. Mitchell Weatherly
	

	 	 	 	  Executive Vice President

 

 

SIXTH AMENDMENT TO

PIER 1 BENEFIT RESTORATION PLAN

(As Amended and Restated Effective July 1, 1995)

     WHEREAS, Pier 1 Imports, Inc. (the “Company”) has heretofore adopted the Pier 1 Benefit
Restoration Plan; and

     WHEREAS, such plan was amended and restated effective July 1, 1995 (such amended and restated
plan herein being referred to as the “Plan”); and

     WHEREAS, the Plan has been amended since July 1, 1995 by five (5) separate amendments and the
Company now desires to further amend the Plan;

     NOW, THEREFORE, pursuant to Section 11.04 of the Plan, the Plan is amended as follows:

     1. Effective
as of January 1, 2004, the second sentence of Section 4.01 of the Plan shall be
deleted and the following shall be substituted therefor:

“The dollar amount of Compensation deferred may not exceed twenty percent
(20%) of the Participant’s Compensation per Plan Year. ”

     2. As amended hereby, the Plan is specifically ratified and reaffirmed.

     IN WITNESS WHEREOF, the Company has caused this amendment to be executed this ___day of
___, 2003.

	 	 	 	 	 
	 	 	PIER 1 IMPORTS, INC.,
	 	 	a Delaware Corporation
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	E. Mitchell Weatherly
	

	 	 	 	Executive Vice President, Human Resources

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