Document:

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.

 

i

 

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

  

 

ii

 

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.

 

2

 

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.

 

3

 

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.

 

4

 

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.

 

6

 

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.

 

8

 

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.

 

9

 

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

  
				

 

10Exhibit 10.4

 

PIER
1 IMPORTS, INC.

 

SUPPLEMENTAL
RETIREMENT PLAN

 

RESTATED
AS OF JANUARY 1, 2009

 

 

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

  	
   

  	
  Code

  	
   

  	
  2

  
	
  2.7

  	
   

  	
  Committee

  	
   

  	
  2

  
	
  2.8

  	
   

  	
  Compensation

  	
   

  	
  2

  
	
  2.9

  	
   

  	
  Early Retirement Date

  	
   

  	
  2

  
	
  2.10

  	
   

  	
  Employer

  	
   

  	
  2

  
	
  2.11

  	
   

  	
  Good Reason

  	
   

  	
  3

  
	
  2.12

  	
   

  	
  Highest Average Compensation

  	
   

  	
  3

  
	
  2.13

  	
   

  	
  Normal Retirement Date

  	
   

  	
  3

  
	
  2.14

  	
   

  	
  Participant

  	
   

  	
  3

  
	
  2.15

  	
   

  	
  Pier 1

  	
   

  	
  3

  
	
  2.16

  	
   

  	
  Regulations

  	
   

  	
  3

  
	
  2.17

  	
   

  	
  Retirement

  	
   

  	
  3

  
	
  2.18

  	
   

  	
  Separation from Service

  	
   

  	
  4

  
	
  2.19

  	
   

  	
  Supplemental Retirement Benefit

  	
   

  	
  4

  
	
  2.20

  	
   

  	
  Target Amount

  	
   

  	
  4

  
	
  2.21

  	
   

  	
  Termination

  	
   

  	
  4

  
	
  2.22

  	
   

  	
  Total and Permanent Disability

  	
   

  	
  4

  
	
  2.23

  	
   

  	
  Years of Credited Service

  	
   

  	
  5

  
	
  2.24

  	
   

  	
  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

  	
   

  	
  6

  
	
  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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V — SURVIVOR BENEFITS

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Death Prior to Commencement of Benefits

  	
   

  	
  9

  
	
  5.2

  	
   

  	
  Death After Commencement of Benefits

  	
   

  	
  10

  
						

 

i

 

	
  5.3

  	
   

  	
  Suicide; Misrepresentation

  	
   

  	
  10

  
	
  5.4

  	
   

  	
  Effect of Payment

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI —BENEFICIARY DESIGNATION

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Death of Participant

  	
   

  	
  10

  
	
  6.2

  	
   

  	
  Amendments

  	
   

  	
  10

  
	
  6.3

  	
   

  	
  No Beneficiary Designation

  	
   

  	
  10

  
	
  6.4

  	
   

  	
  Effect of Payment

  	
   

  	
  11

  
	
  6.5

  	
   

  	
  Death of Beneficiary

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  	
  12

  
	
  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

  	
   

  	
  Domestic Relations Order

  	
   

  	
  14

  
	
  10.7

  	
   

  	
  Captions

  	
   

  	
  14

  
	
  10.8

  	
   

  	
  Governing Law

  	
   

  	
  14

  
	
  10.9

  	
   

  	
  Validity

  	
   

  	
  14

  
	
  10.10

  	
   

  	
  Successors

  	
   

  	
  14

  
	
  10.11

  	
   

  	
  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, was restated effective as of December 5,
2002, was restated effective as of January 1, 2005, was amended effective
as of January 1, 2006, and now is restated effective January 1,
2009.  The purpose of this January 1,
2009 restatement is to cause the Plan to continue to comply with the
requirements of Sections 409A(a)(2), (3) and (4) of the Code and the
Regulations promulgated thereunder.  The
Plan is to be construed and interpreted in accordance with such purpose.  The accrual of benefits for Participants who
have terminated employment with the Employer will be governed by the provisions
of the Plan as in effect on the date of their termination.

 

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 applicable mortality table prescribed by
the Secretary of the United States Department of the Treasury (“Treasury”) or
his delegate in accordance with Internal Revenue Code Section 417(e)(3)(A)(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,
has stolen or embezzled funds of the Employer; or

 

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

 

1

 

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 thirty-five percent (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; and the transaction or
event described in (a), (b) or (c) above, whichever may have
occurred, also constitutes a “change in the ownership or effective control” of
the Employer within the meaning of Section 409A(a)(2)(v) of the Code
and the Regulations.

 

2.6          Code

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

2.7          Committee

 

“Committee”
means the Compensation Committee of Pier 1 or any other Committee chosen by the
Board.

 

2.8          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.

 

2.9          Early Retirement Date

 

“Early
Retirement Date” means the first day of the month coincidental with or next
following the date on which a Participant has a Separation from Service, if the
date of such Separation from Service occurs on or after such Participant’s
attainment of age fifty-five (55) and completion of ten (10) Years of Plan
Participation.

 

2.10        Employer

 

“Employer”
means any of Pier 1, its subsidiaries, including
a trust directly or indirectly owned by Pier 1, and each of their
respective successors.

 

2

 

2.11        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 Plan by any successor as contemplated in this Plan.

 

2.12        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).

 

2.13        Normal Retirement Date

 

“Normal
Retirement Date” means the first day of the month coincidental with or next
following the date on which a Participant has a Separation from Service, if the
date of such Separation from Service occurs on or after such Participant’s
attainment of age sixty-five (65).

 

2.14        Participant

 

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

 

2.15        Pier  1

 

“Pier 1” means
Pier 1 Imports, Inc., a Delaware corporation and its successors.

 

2.16        Regulations

 

“Regulations”
means the final regulations issued by the Treasury on April 10, 2007
regarding the application of Section 409A of the Code.

 

2.17        Retirement

 

Retirement”
means the Participant’s Normal Retirement Date or Early Retirement Date other
than by reason of death or Total and Permanent Disability. Retirement shall
also mean the date as of which a Participant has a Separation from Service
within twenty-four (24) months (or, if
less, any time of 

 

3

 

termination restriction imposed
for purposes of Section 409A(a)(2)(A)(v) of the Code) of a Change of
Control of the Employer 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.

  

 

2.18        Separation
from Service

 

“Separation
from Service” of a Participant means a termination of the Participant’s
employment with the Employer provided that it constitutes a “separation from
service” under Section 1.409A-1(h) of the Regulations.  In the event that a Participant is not deemed
to have incurred a termination of employment with the Employer by virtue of a
military leave, sick leave or other bona fide leave of absence under Section 1.409A-1(h) of
the Regulations, the Participant will be deemed to have experienced a
separation from service at the time and to the extent required under Section 1.409A-1(h) of
the Regulations.

 

2.19        Supplemental
Retirement Benefit

 

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

 

2.20        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).

 

2.21        Termination

 

“Termination”
means a Participant’s Separation from Service for any reason other than
Retirement, death or Total and Permanent Disability.

 

2.22        Total
and Permanent Disability

 

“Total
and Permanent Disability” means a Participant
(i) is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months, or (ii) is,
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, receiving income replacement
benefits for a period of not less than three (3) months under an accident
and health plan covering employees of the Employer.  The Committee’s decision as to total and permanent disability will be
based upon medical reports and/or other evidence satisfactory to the Committee.

 

4

 

2.23        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 Pier 1 Associates’
401 (k) Plan, or any successor tax-qualified retirement plan.

 

2.24        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.  Plan Participation Agreements may vary in
terms and provisions.  To the extent that
a Participant’s Plan Participation Agreement varies the terms of the Plan as
applied to that Participant, the terms of the Participation Agreement shall
control over the Plan.

 

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

  Participation

  	
   

  	
  Vesting

  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 less
  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, Separation from Service due to Total and Permanent Disability, or
death.

 

5

 

ARTICLE IV—SUPPLEMENTAL RETIREMENT BENEFITS

 

4.1                              Benefit

 

Upon
incurring a Separation from Service, 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 ($500,000.00). 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

 

Upon
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

 

Upon
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 has a Retirement event 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).

 

4.5                              Disability Retirement Benefit

 

If a Participant has a Separation from Service due to
Total and Permanent Disability on or before the Participant’s attainment of age
fifty-five (55), Employer shall pay to the Participant the monthly Supplemental
Retirement Benefit calculated under Section 4.3, and the time period from
the separation date to the date the Participant would attain the age of
fifty-five (55) shall be included in the determination of Years of Credited
Service.  If a Participant has a
Separation from Service due to Total and Permanent Disability after the
Participant’s attainment of age fifty-five (55), Employer shall pay to the
Participant the monthly Supplemental Retirement Benefit calculated under Section 4.2,
and the time 

 

6

 

period from the separation date
to the date the Participant would attain the age of sixty-five (65) shall be
included in the determination of Years of Credited Service.

 

4.6                              Termination Benefit

 

If
a Participant has a Separation from Service due to Termination, 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.

 

A Participant desiring payment of his Plan benefit
in a form other than the basic form of payment described in (a) above must
elect the alternative form of payment he desires prior to the commencement of
the benefit payment.  Such election shall
be in writing and shall extend on a uniform basis to any Supplemental
Retirement Benefit paid under the Plan to the Participant.  A Participant may change his Plan Supplemental
Retirement Benefit payment form election and make a new election prior to
commencement of payment of his Plan benefits. 
At commencement of payment of a Participant’s Supplemental Retirement
Benefit, his form of payment election shall become irrevocable. Notwithstanding
the above, whenever the lump sum equivalent of the benefit is not greater than the applicable dollar amount
under Section 402(g)(1)(B) of the Code, 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 but not later than sixty (60) days after the date of the
Participant’s Separation from Service. Benefits payable to a Participant under Section 4.6
as a result of Termination shall commence on the first day of the month
coincidental with or next following the date on which the Participant attains
age sixty-five (65). In no event shall a Participant be permitted
directly or indirectly to designate the taxable year of commencement of payment
of benefits under the Plan. All payments shall be made as of the first
day of the month.

 

7

 

Notwithstanding
this Section 4.8, 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, and with respect to any portion of such
Participant’s Plan benefit which would constitute compensation which is
deferred after December 31, 2004 for purposes of Section 409A of the
Code, no distribution may be made of any such portion from the Plan to such
Participant as a result of his Separation from Service 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.  In the event of any such
payment deferral the periodic payment amount shall be determined as if its
payments commenced as originally provided under the Plan and the first payment
to the Participant shall include an amount equal to the sum of the periodic
payments which would have been paid to such Participant but for the payment
deferral mandated pursuant to Section 409A(a)(2)(B)(i) of the Code.

 

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 has a
Separation from Service due to
Retirement or Total and Permanent Disability, such Participant (for himself and
his dependents) shall have the right to medical reimbursement benefits 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 reimbursement benefits for a period of thirty-six
(36) months from the Employer on the same basis as the Participant would have
had if he had survived.  Such benefits
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
benefits will only be provided if the Participant pays, or reimburses the
Employer for, a portion of the total 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.

 

Upon
Termination of a Participant, 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 medical reimbursement benefits, 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.

 

8

 

Notwithstanding
the foregoing but to the extent and only to the extent required by Section 409A(a)(2)(B)(i) of
the Code, 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,
medical benefit coverage and/or medical benefit payments may not be provided
and/or paid to such Participant as a result of his Separation from Service
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.  Should the
restriction described in this Paragraph be required to be imposed and become
applicable with respect to a Participant, upon the lapse of the six (6) month
deferral restriction, medical coverage and/or medical benefit payments shall be
made retroactively available to such Participant (for the Participant and the
Participant’s dependents) to the date that they otherwise would have been
available under this Section 4.11 and on the basis as contemplated by this
Section 4.11.

 

Medical
reimbursement benefits provided pursuant to this Section 4.11 shall be
subject to the following rules:

 

(a)           The reimbursement arrangement provides an objectively
determinable and nondiscretionary definition of the expenses that are eligible
for reimbursement under such arrangement;

 

(b)           The reimbursement arrangement provides an objective and
specifically prescribed period during which such reimbursements will be
provided (which can be the lifetime of the employee or former employee);

 

(c)           The amount of reimbursable expenses for one year cannot
affect the amount of reimbursable expenses for another year (i.e., carryovers
of unused expense amounts are impermissible);

 

(d)           The reimbursements under the arrangement are made no later
than the last day of the taxable year following the year in which the
reimbursable expense was incurred; and

 

(e)           The participant’s right to a reimbursement may not be
subject to liquidation or exchange.

 

ARTICLE V— SURVIVOR BENEFITS

 

5.1                               Death Prior to Commencement of Benefits

 

(a)           Death at or After
Age 55. If a Participant dies after attainment of age fifty-five (55) and
completion of ten (10) Years of Plan Participation but prior to a
Separation of Service, Employer shall pay a survivor benefit to the Participant’s
Beneficiary equal to the Retirement benefit that would have been provided had
the Participant had a Separation from Service by reason of
Retirement 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 attainment of age fifty-five (55) and
completion of ten (10) Years of Plan Participation but prior to a
Separation of Service, 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,
had a Separation from Service on the date prior to his death and survived
until the age of sixty-five (65).

 

(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 the date of the Participant’s death. In no event
shall a Participant or Beneficiary be permitted to directly or indirectly
designate the taxable year of commencement of payment of death benefits under
the Plan. All payments shall be made as of the first day of the month.

 

9

 

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 or 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.

 

ARTICLE VI—BENEFICIARY DESIGNATION

 

6.1                               Death of Participant

 

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

 

10

 

(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

 

(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.

 

11

 

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.

 

(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 had a Separation
from Service, 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.

 

12

 

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.  In no event shall any provision of this Plan be interpreted to provide or
of any trust established pursuant to this Section 10.2 provide or be
interpreted to provide that any assets of the Employer (whether placed in trust
or not) will become restricted to the provision of benefits under the Plan in
connection with a change in the Employer’s financial health and in no event
will any assets of the Employer, in fact, be so restricted.

 

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.

 

13

 

10.6        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.

 

10.7        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.

 

10.8        Governing Law

 

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

 

10.9        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.

 

10.10      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.

 

10.11      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:

  	
   

  
	
   

  	
   

  	
  Gregory S. Humenesky

  
	
   

  	
   

  	
  Executive Vice President, Human
  Resources

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  December                       ,
  2008

  

 

14

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