Document:

Exhibit 10.1

 

SUMMARY
PLAN DESCRIPTION OF

 

PIER 1
IMPORTS LIMITED SEVERANCE PLAN

 

Restated as
of January 1, 2009

 

NATURE AND
PURPOSE OF PLAN:

 

The Pier 1 Imports Limited
Severance Plan (the “Plan”) is a welfare benefit plan which is intended to
provide severance benefits to certain employees of Pier 1 Imports, Inc.
and its subsidiaries and affiliates (the “Employer”).

 

PLAN
BENEFIT ELIGIBILITY:

 

Employer’s regular employees
who are involuntarily terminated as a result of any reduction in force in
connection with a reorganization of the Employer’s corporate home office and/or
field operations are eligible for Plan severance benefits.  Certain officers of Employer who have
individual employment agreements or post-employment consulting agreements may
not be eligible for Plan severance benefits.

 

YOUR PLAN
CONTRIBUTIONS:

 

You do not have to pay
anything for your Plan coverage.

 

DEFINITION
OF A “YEAR OF SERVICE”:

 

The amount of your Plan
benefits is based in part upon your total “Years of Service” with the Employer.
A “Year of Service” is each twelve consecutive month period of continuous
employment with the Employer determined from your most recent date of hire by
the Employer.  For purposes of
determining your “Years of Service,” any partial year is disregarded.

 

PLAN
BENEFITS:

 

Your Plan severance pay
generally will be as follows:

 

·                                          If you are classified by the Employer as a
non-exempt employee, your Plan severance pay amount is equal to one “Weeks’
Base Pay” (defined below) for each of your Years of Service up to a maximum of
thirteen Weeks’ Base Pay.  If you have
twenty or more Years of Service, your Plan severance pay amount is equal to
twenty Weeks’ Base Pay.

 

·                                          If you are classified by the Employer as an
exempt employee, your Plan severance pay amount is equal to two Weeks’ Base Pay
for each of your Years of Service up to a maximum of twenty Weeks’ Base
Pay.  If you have twenty or more Years of
Service, your Plan severance pay amount is equal to twenty-eight Weeks’ Base
Pay.

 

·                                          If you are classified by the Employer as an
exempt employee and you hold a director level position at the time of
termination, your Plan severance pay amount is equal to three Weeks’ Base Pay
for each of your Years of Service up to a maximum of twenty Weeks’ Base
Pay.  If you have twenty or more Years of
Service, your Plan severance pay amount is equal to twenty-eight Weeks’ Base
Pay.

 

·                                          If you are classified by the Employer as an
exempt employee and you are an officer of the Employer at the time of
termination, your Plan severance pay amount is equal to three Weeks’ Base Pay
for each of your Years of Service up to a maximum of thirty-six Weeks’ Base
Pay.  If 

 

1

 

you
have twenty or more Years of Service, your Plan severance pay amount is equal
to forty-two Weeks’ Base Pay.

 

In all cases, your severance
pay amount will be reduced by any pay in lieu of notice which the Employer pays
to you in connection with your termination of employment.  If you become entitled to a Plan severance
pay benefit, your Plan severance pay will be paid to you in a lump sum cash
payment as soon as practicable after your employment with the Employer is
terminated and the release described below is effective and in no event later
than the fifteenth day of the third calendar month immediately following the
calendar year in which your employment with the Employer is terminated.

 

For purposes of the
foregoing schedule, your “Week Base Pay” is the result obtained by dividing the
annual amount of your base salary or regular hourly pay as in effect
immediately preceding the date of your involuntary termination by fifty-two; provided,
however, regular hourly pay for non-exempt employees who work in field
operations will be based on average weekly hours worked during the six months
preceding the date of termination.  Your “Week
Base Pay” will not be based upon any overtime pay, bonuses, benefits or
incentive or other special compensation.

 

Notwithstanding the
foregoing, the Employer may, on a case-by-case basis with respect to any
individual covered employee or group of covered employees and in its sole and
absolute discretion (i) decrease or increase the severance pay amount
(including, without limitation, a deduction to zero) payable under the Plan to
such individual covered employee or group of covered employees, and/or (ii) include
or exclude certain other severance benefits, such as outplacement services,
available under the Plan to such individual covered employee or group of
covered employees.  Further, the Employer
may on a case-by-case basis and in its sole and absolute discretion waive any
condition or rule imposed under the Plan as a condition for eligibility
for severance pay benefits under the Plan.

 

RELEASE
AGREEMENT:

 

As an absolute condition to
your entitlement to any Plan severance benefits, you will be required to
release the Employer, in a form required by Employer, from any and all claims
and causes of action which you may have against any of them and to agree to
certain confidentiality and nondisclosure agreements.

 

HOW TO
FILE A CLAIM:

 

Generally, the Employer’s
administrative staff will automatically determine if you are eligible for Plan
severance benefits, notify you that you are and distribute your Plan severance
benefit to you after you have delivered the required release.  If your employment with the Employer has terminated,
and you believe that you are entitled to Plan benefits and have not received
them (or any confirmation that you will receive them), a claim for benefits
under the Plan may be made by written notice to the Plan Administrator.

 

CLAIMS
PROCEDURES:

 

For purposes of these procedures, the term “Adverse
Benefit Determination” refers to any denial, reduction or termination of or
failure to provide or make payment (in whole or in part) for a Plan benefit,
including any denial, reduction, termination or failure to provide or make
payment that is based on a determination of a Claimant’s eligibility to
participate in the Plan and the term “Claimant” refers to a person (or an
authorized representative) who has filed or desires to file a claim for a Plan
benefit.

 

In any case of an Adverse Benefit Determination of a
claim for a Plan benefit, the Plan Administrator shall furnish written notice
to the affected Claimant within a reasonable period of time but not later than
ninety days after receipt of such claim for Plan benefits. Any notice that
denies a benefit claim of a Claimant in whole or in part shall, in a manner
calculated to be understood by the Claimant:

 

·                                          State
the specific reason or reasons for the Adverse Benefit Determination;

·                                          Provide
specific reference to pertinent Plan provisions on which the Adverse Benefit
Determination is based;

·                                          Describe
any additional material or information necessary for the Claimant to perfect
the

 

2

 

claim and
explain why such material or information is necessary; and

·                                          Describe
the Plan’s review procedures and the time limits applicable to such procedures,
including a statement of the Claimant’s right to bring a civil action under
section 502(a) of The Employee Retirement Income Security Act of 1974, as
amended (“ERISA”) following an Adverse Benefit Determination on review.

 

A Claimant has the right to have an Adverse Benefit Determination
reviewed in accordance with the following claims review procedure:

 

·                                          The Claimant must submit a written request for such review to the Plan
Administrator not later than 60 days following receipt by the Claimant of the
Adverse Benefit Determination notification;

 

·                                          The Claimant shall have the opportunity to submit written comments,
documents, records, and other information relating to the claim for benefits to
the Plan Administrator;

 

·                                          The Claimant shall have the right to have all comments, documents,
records, and other information relating to the claim for benefits that have
been submitted by the Claimant considered on review without regard to whether
such comments, documents, records or information was considered in the initial
benefit determination; and

 

·                                          The Claimant shall have reasonable access to, and copies of, all documents,
records, and other information relevant to the claim for benefits free of
charge upon request, including (a) documents, records or other information
relied upon for the benefit determination, (b) documents, records or other
information submitted, considered or generated without regard to whether such
documents, records or
other information were relied upon in making the benefit determination, and (c) documents, records or other information that
demonstrates compliance with the standard claims procedure.

 

Notice of the Plan
Administrator’s final benefit determination regarding an Adverse Benefit
Determination will be furnished in writing or electronically to the Claimant
after a full and fair review. Notice of an Adverse Benefit Determination upon review
will:

 

·                                          State the specific reason or reasons for the Adverse Benefit
Determination;

 

·                                          Provide specific reference to pertinent Plan provisions on which the
Adverse Benefit Determination is based;

 

·                                          State
that the Claimant is entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other
information relevant to the Claimant’s claim for benefits including (a) documents,
records or other information relied upon for the benefit determination, (b) documents,
records or other information submitted, considered or generated without regard
to whether such documents, records or other information were relied upon in
making the benefit determination, and (c) documents, records or other
information that demonstrates compliance with the standard claims procedure;
and

 

·                                          Describe the Claimant’s right to bring an action under section 502(a) of
ERISA.

 

The Plan Administrator
shall notify a Claimant of its determination on review with respect to the
Adverse Benefit Determination of the Claimant within a reasonable period of
time but not later than sixty days after the receipt of the Claimant’s request
for review.

 

Completion of the claims
procedures described in this Article will be a condition precedent to the
commencement

 

3

 

of any legal or equitable
action in connection with a claim for benefits under the Plan by a Claimant or
by any other person or entity claiming rights individually or through a
Claimant.

 

TERMINATION
OF PLAN COVERAGE:

 

Your coverage under the Plan
(and, therefore, your potential eligibility for Plan severance benefits)
terminates as of the date you terminate your employment with the Employer
voluntarily, by reason of death or disability or by retirement at or after the
age of 55, or on the date your employment is involuntarily terminated for
cause.

 

PLAN
AMENDMENT OR TERMINATION:

 

The Employer may terminate,
amend or modify the Plan in whole or in part at any time.  Circumstances which might cause the Employer
to amend or terminate the Plan include, but are not limited to, changes in law
mandating that the Plan be revised in certain respects, a determination by the
Employer that the Plan’s provisions or some of them may no longer be suitable
as a result of changes in the circumstances of the Employer or of its employees
or changes in financial circumstances such as significant increases in the cost
of continuing the Plan or significant adverse changes in the Employer’s
financial circumstances.

 

YOUR
RIGHTS UNDER ERISA:

 

As
a participant in the Plan you are entitled to certain rights and protections
under ERISA. ERISA provides that all Plan participants shall be entitled to:

 

Receive Information About
Your Plan and Benefits

 

Examine,
without charge, at the Plan administrator’s office and at other specified
locations, such as worksites and union halls, all documents governing the Plan,
including insurance contracts and collective bargaining agreements, and a copy
of the latest annual report (Form 5500 Series) filed by the Plan with the
U.S. Department of Labor and available at the Public Disclosure Room of
the Pension and Welfare Benefit Administration.

 

Obtain,
upon written request to the Plan administrator, copies of documents governing
the operation of the Plan, including insurance contracts and collective
bargaining agreements, and copies of the latest annual report (Form 5500
Series) and updated summary Plan description. The administrator may make a
reasonable charge for the copies.

 

Receive
a summary of the Plan’s annual financial report. The Plan administrator is
required by law to furnish each participant with a copy of this summary annual
report.

 

Prudent Actions by Plan
Fiduciaries

 

In
addition to creating rights for Plan participants ERISA imposes duties upon the
people who are responsible for the operation of the Plan. The people who
operate your Plan, called “fiduciaries” of the Plan, have a duty to do so
prudently and in the interest of you and other Plan participants and
beneficiaries. No one, including your employer, your union, or any other
person, may fire you or otherwise discriminate against you in any way to
prevent you from obtaining a (pension, welfare) benefit or exercising your
rights under ERISA.

 

Enforce Your Rights

 

If
your claim for a welfare benefit is denied or ignored, in whole or in part, you
have a right to know why this was done, to obtain copies of documents relating
to the decision without charge, and to appeal any denial, all within certain
time schedules.

 

Under
ERISA, there are steps you can take to enforce the above rights. For instance,
if you request a copy of Plan documents or the latest annual report from the
Plan and do not receive them within 30 days, you may file

 

4

 

suit in a Federal court. In
such a case, the court may require the Plan administrator to provide the
materials and pay you up to $1101 a day until you receive the materials,
unless the materials were not sent because of reasons beyond the control of the
administrator. If you have a claim for benefits which is denied or ignored, in
whole or in part, you may file suit in a state or Federal court. In addition,
if you disagree with the Plan’s decision or lack thereof concerning the
qualified status of a domestic relations order or a medical child support
order, you may file suit in Federal court. If it should happen that Plan
fiduciaries misuse the Plan’s money, or if you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file suit in a Federal court. The court will decide who
should pay court costs and legal fees. If you are successful the court may
order the person you have sued to pay these costs and fees. If you lose, the
court may order you to pay these costs and fees, for example, if it finds your
claim is frivolous.

 

Assistance with Your
Questions

 

If
you have any questions about your Plan, you should contact the Plan
administrator. If you have any questions about this statement or about your
rights under ERISA, or if you need assistance in obtaining documents from the
Plan administrator, you should contact the nearest office of the Pension and
Welfare Benefits Administration, U.S. Department of Labor, listed in your
telephone directory or the Division of Technical Assistance and Inquiries,
Pension and Welfare Benefits Administration, U.S. Department of Labor, 200
Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain
publications about your rights and responsibilities under ERISA by calling the
publications hotline of the Pension and Welfare Benefits Administration.

 

	
  ·

  	
   

  	
  NAME OF
  PLAN:

  	
   

  	
  Pier 1 Imports Limited
  Severance Plan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  PLAN YEAR:

  	
   

  	
  January 1 through
  December 31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  TYPE OF
  PLAN:

  	
   

  	
  Severance benefit welfare
  plan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  PLAN
  SPONSOR:

  	
   

  	
  Pier 1 Imports, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  Address:

  	
  100 Pier 1 Place

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Fort Worth, Texas 76102

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone Number:
  817-252-8000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  EMPLOYER IDENTIFICATION
  NUMBER:

  	
   

  	
  75-1729843

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  PLAN NUMBER:

  	
   

  	
  501

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  PLAN ADMINISTRATOR:

  	
   

  	
  Pier 1 Imports, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  FUNDING:

  	
   

  	
  Benefits under the Plan
  are paid out of the general assets of the Employer.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  AGENT FOR
  SERVICE OF LEGAL PROCESS:

  	
   

  	
  The Plan Sponsor or the
  Plan Administrator. Process may be served at the addresses specified above.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  TYPE OF
  ADMINISTRATION:

  	
   

  	
  The Plan is administered
  by the Employer.

  

 

1  This dollar amount is adjusted from time to
time.  You can get information at any
time as to the then current dollar amount upon request to the Plan
administrator.

 

5Exhibit 10.2

 

PIER 1 UMBRELLA TRUST

 

AMENDMENT NO. 1

 

This Amendment No. 1 (“Amendment”) is made to the Pier 1 Umbrella
Trust dated December 21, 2005 (the “Trust Agreement”) by and between Pier
1 Imports, Inc., Pier 1 Imports (U.S.), Inc., and Pier 1 Services
Company on the one hand, and Wachovia Bank National Association, on the other
hand.  This Amendment No. 1 is made
effective January 1, 2009.

 

RECITALS

 

This Amendment is entered into
with reference to the following facts:

 

A.                                   The Trust Agreement
may be amended pursuant to Section 7.02-1 without the Written Consent of
Participants if such amendment is necessary to comply with any laws,
regulations or other legal requirements.

 

B.                                     The Company and
the Trustee now desire to amend the Trust Agreement in order to comply with the
requirements of Section 409A of the Code and the final Treasury
regulations promulgated thereunder.

 

AGREEMENT

 

The Company
and the Trustee hereby agree:

 

1.                                       The
Company and the Trustee incorporate the above recitals into this Amendment and
affirm such recitals are true and correct. 
All capitalized terms used in this Amendment, unless specifically
defined herein, have the same meanings attributed to them in the Trust
Agreement.

 

2.                                       Except
as amended by this Amendment, the Trust Agreement remains unchanged and in full
force and effect.  If there is any
conflict between the provisions of the Trust Agreement and the provisions of
this Amendment, the provisions of this Amendment shall control.

 

3.                                       The following
sentence is hereby added to the end of Section 3.03-1 of the Trust
Agreement:

 

“In the event of any payment by the Trustee pursuant to this paragraph,
the Trustee shall act in accordance with the terms of the subject Plan with
respect to the timing and form of benefit payment.”

 

1

 

IN WITNESS WHEREOF, the Company and the Trustee have caused this
Amendment No.1 to be executed by their respective duly authorized officers
effective January 1, 2009.

 

 

	
  PIER 1 IMPORTS (U.S.), INC.,

  	
   

  	
  PIER 1 IMPORTS, INC.,

  
	
  a Delaware corporation

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Its:   Executive Vice President

  	
   

  	
  Its:   Executive Vice President

  
	
  Date:
  December            ,
  2008

  	
   

  	
  Date: December            ,
  2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRUSTEE:

  
	
  PIER 1 SERVICES COMPANY,

  	
   

  	
  WACHOVIA BANK NATIONAL

  
	
  a Delaware statutory trust

  	
   

  	
  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
  By: Pier 1 Holdings, Inc.,

  	
   

  	
   

  
	
  Its Managing Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Its:   Executive Vice President

  	
   

  	
  Its:

  	
   

  
	
  Date:
  December                 ,
  2008

  	
   

  	
  Date:
  December                       ,
  2008

  
						

 

2

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