UNITED STATES SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
PROXY STATEMENT
Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
PIER 1 IMPORTS, INC.
(Name of Registrant as Specified In Its Charter)
PIER 1 IMPORTS, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:<PAGE>
<PAGE>
PIER 1 IMPORTS, INC.
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
May 20, 1994
Dear Shareholder:
On behalf of the Board of Directors and Management, you are
cordially invited to attend the Annual Meeting of Shareholders to
be held at 10:00 a.m. local time on Thursday, June 23, 1994, at
the Roundup Inn, Will Rogers Memorial Center Complex, 3400
Crestline Road, Fort Worth, Texas. The formal Notice of the
Annual Meeting of Shareholders and Proxy Statement are attached.
Please read them carefully.
It is important that your shares be voted at the meeting in
accordance with your preference. If you do not plan to attend,
please complete the proxy card located in the envelope's address
window by indicating your vote on the issues presented and sign,
date and return the proxy in the prepaid envelope provided. If
you are able to attend the meeting and wish to vote in person,
you may withdraw your proxy at that time.
Sincerely,
Clark A. Johnson
Chairman and Chief
Executive Officer
<PAGE>
<PAGE>
PIER 1 IMPORTS, INC.
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 23, 1994
The Annual Meeting of Shareholders of Pier 1 Imports, Inc., a Delaware
corporation (the "Company"), will be held on June 23, 1994, at 10:00 a.m.,
local time, at the Roundup Inn, Will Rogers Memorial Center Complex, 3400
Crestline Road, Fort Worth, Texas for the following purposes:
(1) To elect seven Directors to hold office until the next Annual
Meeting of Shareholders.
(2) To consider and vote upon the adoption of the Senior Management
Annual Bonus Plan.
(3) To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only holders of record of Common Stock at the close of business on May
4, 1994, are entitled to notice of and to vote at the Annual Meeting. A
complete list of shareholders entitled to vote will be available for
examination at the Company's offices at 301 Commerce Street, Suite 600, Fort
Worth, Texas by any Company Shareholder during ordinary business hours for a
period of ten days prior to the date of the Annual Meeting.
To ensure that your vote will be counted, please complete, sign and date
the enclosed proxy card and return it promptly in the enclosed prepaid
envelope, whether or not you plan to attend the Annual Meeting. Your proxy
may be revoked in the manner described in the accompanying Proxy Statement at
any time before it has been voted at the Annual Meeting.
By Order of the Board of Directors,
J. Rodney Lawrence
Senior Vice President and Secretary
May 20, 1994
Fort Worth, Texas
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY,
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING<PAGE>
<PAGE>
PIER 1 IMPORTS, INC
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 23, 1994
This Proxy Statement is being furnished to the holders of Common Stock,
par value $1.00 per share (the "Common Stock") of Pier 1 Imports, Inc., a
Delaware corporation (the "Company"), in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the Annual
Meeting of Shareholders to be held on June 23, 1994, and at any adjournments
or postponements thereof. Shareholders representing a majority of the Common
Stock outstanding and entitled to vote must be present in person or
represented by proxy in order to constitute a quorum to conduct business at
the meeting. The Board of Directors has fixed the close of business on May
4, 1994, as the record date for the determination of the Shareholders
entitled to notice of and to vote at the Annual Meeting. On the record date,
37,547,477 shares of Common Stock were outstanding and entitled to be voted
at the meeting. Each share of Common Stock entitles the registered holder
thereof to one vote on each matter submitted to a vote at the meeting.
All shares of Common Stock represented at the Annual Meeting by
properly executed proxies received prior to the meeting, unless the proxies
have been properly revoked prior to voting, will be voted in accordance with
the instructions on such proxies. If no instructions are given, proxies will
be voted in accordance with the recommendations of the Board of Directors, as
noted in this Proxy Statement. Any proxy given pursuant to this solicitation
may be revoked by the person giving it at any time before it is voted.
Proxies may be revoked by delivery to the Corporate Secretary of the Company
at the Company's principal executive offices at 301 Commerce Street, Suite
600, Fort Worth, Texas 76102 of a written notice of revocation bearing a
later date than the proxy, or by duly executing and delivering to the
Corporate Secretary a subsequent proxy relating to the same shares, or by
attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not in and of itself constitute revocation of a proxy).
Holders of a majority of the shares of Common Stock present in person or
represented by proxy and entitled to vote at the Annual Meeting constitute a
quorum.
The accompanying proxy also covers shares of Common Stock held for
participants in the Company's Stock Purchase Plan and will serve as voting
instructions for the Plan administrators to vote such shares.
This Proxy Statement and the accompanying proxy are being first sent to
Shareholders on May 20, 1994.
ELECTION OF DIRECTORS
Seven Directors of the Company are to be elected at the Annual Meeting
to serve until the next Annual Meeting of Shareholders of the Company and
until their respective successors shall have been elected and qualified.
Unless authority to vote for one or more Directors is withheld, proxies will
be voted for the election of the persons listed below or, if any such person
shall unexpectedly become unable or unwilling to accept nomination or
election, for the election of such other person as the Board of Directors may
recommend. Directors will be elected by holders of a majority of the shares
of Common Stock present in person or represented by proxy and entitled to
vote. Votes withheld, including broker non-votes, are neither counted as
voting for nor against and, therefore, will be disregarded. Six of the seven
persons listed below are Directors of the Company now in office and are
nominees for re-election. Also nominated for election as a member on the
Board of Directors is Martin L. Berman.
Nominees for Directors
CLARK A. JOHNSON
Clark A. Johnson, age 63, is Chairman of the Board and Chief Executive
Officer of the Company, is a member of the Executive Committee and since
March 1983 has been a Director of the Company. From May 1985 to March 1988
Mr. Johnson was President and Chief Executive Officer of the Company. He
currently serves as a director of Albertson's Inc., InterTAN, Inc., The
Actava Group Inc., Anacomp, Inc. and Heritage Media Corporation.
CHARLES R. SCOTT
Charles R. Scott, age 66, is Vice Chairman of the Company, is a member
of the Executive Committee and has been a Director of the Company since March
1983. From February 1991 until April 1994 Mr. Scott served as President,
Chief Executive Officer and a director of The Actava Group Inc., and from May
1990 to November 1992 served as Chairman and a director of Intermark, Inc.
Prior to May 1990 he was President of Intermark, Inc. He is also a director
of Bank of California.
MARVIN J. GIROUARD
Marvin J. Girouard, age 54, is President and Chief Operating Officer of
the Company and has been a Director since August 1988. From May 1985 until
August 1988, he served as Senior Vice President - Merchandising of Pier 1
Imports (U.S.), Inc., a wholly owned subsidiary of the Company. He currently
is a director of ENSERCH Corporation.
SALLY F. McKENZIE
Sally F. McKenzie, age 65, has been a Director of the Company since
November 1985 and is Chairman of the Compensation Committee and a member of
the Audit Committee. Mrs. McKenzie has served as a volunteer leader on a
local, regional and national basis for over five years.
JAMES M. HOAK, JR.
James M. Hoak, Jr., age 50, has been Director of the Company since
September 1991 and is Chairman of the Executive Committee and a member of the
Audit Committee. He has served as Chairman of Heritage Media Corporation
since August 1987. From 1971 to 1987 he served as President of Heritage
Communications, Inc. and as its Chairman and director from August 1987 to
December 1990. Since February 1991 he has served as Chairman and director of
Crown Media, Inc. He is a director of Airgas, Inc., Sun Coast Industries,
Inc., and Midwest Resources, Inc. Until April 1994, he served as a Governor
of the American Stock Exchange.
KENNETH N. PONTIKES
Kenneth N. Pontikes, age 54, has been a Director of the Company since
April 1993 and is a member of the Audit and Compensation Committees. He has
served as Chairman and President of Comdisco, Inc. since 1969. He is also a
director of Richardson Electronics and Caremark International.
MARTIN L. BERMAN
Martin L. Berman, age 54, is nominated to become a Director of the
Company. Since February, 1990 he has served as a Managing Director at Smith
Barney Shearson, Inc. ("Smith Barney"), prior to which he served as a
Managing Director at Drexel Burnham Lambert, Incorporated.
The Company has regularly engaged Smith Barney for investment banking
services.
Board Meetings, Committees and Fees
During fiscal year 1994, the Board of Directors of the Company met on
six occasions and took action by unanimous written consent in lieu of a
meeting on four occasions. Each of the Directors attended at least 75% of
the total number of meetings of the Board of Directors and of the Committees
on which he or she served.
Each Director who was not an officer of the Company was paid a fee of
$24,000 during the past fiscal year and also received $1,250 for each Board
meeting attended and $500 for each committee meeting attended. Directors
receive annual grants of stock options covering 3,000 shares per Director
under the Non-Employee Director Stock Option Plan and are eligible to
participate in the Company's Stock Purchase Plan by contributing monthly up
to the full amount of their Director fees and receiving matching
contributions from the Company of from 10% to 50% of their contributions,
depending on length of service with the Company. Directors of the Company
who are employees of the Company serve without compensation for their
services as Directors of the Company.
Executive Committee and Nominating Committee. The Executive Committee
is entitled to exercise all powers of the Board when the Board is not in
session to the extent permitted by law and the Bylaws. The Executive
Committee took action by unanimous written consent in lieu of a meeting on
one occasion during the last fiscal year. Committee members are Directors
Hoak (Chairman), Scott and Johnson.
The Executive Committee also performs the functions of the Nominating
Committee and is responsible for considering and making recommendations to
the Board regarding nominees for election to the Board and Board Committee
assignments. The Executive Committee will consider recommendations submitted
by Shareholders for nominees for election to the Board.
Audit Committee. The Audit Committee recommends independent auditors
for appointment by the Board and is responsible for reviewing the financial
condition of the Company, its internal controls and audit program, the
performance and findings of internal audits, and any action to be taken
thereon by management. Also, it reviews audit and examination reports of the
independent auditors. The Audit Committee held two meetings during the last
fiscal year. Committee members are Directors Pontikes (Chairman), McKenzie
and Hoak.
Compensation Committee. The Compensation Committee establishes and
administers incentive-based compensation plans for senior executive officers
and reviews and makes recommendations to the Board concerning other
compensation policies. The Compensation Committee held three meetings during
the last fiscal year. Committee members are Directors McKenzie (Chairman)
and Pontikes.
<PAGE>
<PAGE>
Security Ownership of Management
The following table and footnotes indicate the ownership on April 1,
1994, of the Company's Common Stock by each Director and nominee, each
executive officer named in the Summary Compensation Table, and all Directors
and executive officers as a group:
Shares Percent
Beneficially of
Name Owned(1)(2) Class
- - ---- ----------- ------
Martin L. Berman . . . . . . . . . . . . . . . 200 * %
Marvin J. Girouard . . . . . . . . . . . . . . 404,700 *
James M. Hoak. . . . . . . . . . . . . . . . . 21,645 *
Clark A. Johnson . . . . . . . . . . . . . . . 660,822 1.7
Sally F. McKenzie. . . . . . . . . . . . . . . 30,065 *
Kenneth N. Pontikes. . . . . . . . . . . . . . 8,177 *
Charles R. Scott . . . . . . . . . . . . . . . 74,419 *
Robert G. Herndon. . . . . . . . . . . . . . . 34,030 *
Adrian G. Long . . . . . . . . . . . . . . . . 27,204 *
James R. Tener . . . . . . . . . . . . . . . . 43,461 *
All Directors and Executive
Officers as a Group. . . . . . . . . . . . . 1,453,128 3.8
_______________
(1) Included in the table are shares acquired through and held by the
Company's Stock Purchase Plan. Also included in the table are shares
issuable within 60 days of April 1, 1994, to Mr. Girouard (57,816
shares), Mr. Hoak (6,000 shares), Mr. Johnson (332,185 shares), Mrs.
McKenzie (24,724 shares), Mr. Pontikes (3,000 shares), Mr. Scott (27,814
shares), Mr. Herndon (4,243 shares), Mr. Long (3,465 shares), Mr. Tener
(14,801 shares) and to all Directors and Executive Officers as a group
(519,561 shares), upon the exercise of stock options granted pursuant to
the Company's 1980 and 1989 Stock Option Plans.
(2) Unless otherwise indicated, the beneficial owner has sole voting and
investment power with respect to its shares.
* Represents less than 1% of the outstanding shares of such class.
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth a summary of the compensation paid during
the past three fiscal years for services rendered in all capacities to the
Company and its subsidiaries by the Chief Executive Officer and the four
other most highly compensated executive officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Other Securities All
Name and Fiscal Annual(1)(2) Restricted Underlying Other(1)(4)
Principal Position Year Salary Bonus Compensation Stock Awards(3) Options(#) Compensation
- - ------------------ ------ --------- --------- ----------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Clark A. Johnson 1994 $580,000 $ 40,600 $37,209 $ 87,093 38,667 $43,716
Chairman and Chief 1993 580,000 556,800 45,804 129,141 43,500 85,136
Executive Officer 1992 550,000 275,000 -- -- --
Marvin J. Girouard 1994 365,000 25,550 28,245 45,630 20,278 51,954
President and Chief 1993 350,000 308,000 24,894 64,944 21,875 72,156
Operating Officer 1992 335,000 381,000 -- -- --
Robert G. Herndon 1994 240,000 16,800 22,013 24,003 10,667 21,116
Executive Vice President 1993 225,000 177,790 21,735 33,404 11,250 32,016
and Chief Financial Officer 1992 195,000 150,000 -- --
James R. Tener (5) 1994 177,000 12,495 13,903 -- 9,917 7,305
Senior Vice President, 1993 170,000 119,000 14,690 -- -- 6,955
Operations
Adrian G. Long (5) 1994 167,000 11,900 15,714 -- 9,444 25,708
Senior Vice President, 1993 155,000 108,500 13,785 -- -- 24,127
Merchandising
________________
<FN>
(1) In accordance with the transitional provisions applicable to executive
compensation disclosure rules adopted by the Securities and Exchange
Commission, amounts of Other Annual Compensation and All Other
Compensation for the 1992 fiscal year have been omitted.
(2) Includes reimbursements for club dues, automobile expenses, financial
planning, medical expenses and the cost of aircraft use.
(3) Dollar value of restricted stock is computed using the closing price of
the Common Stock on May 21, 1993, the date of grant of the restricted
stock. Recipients of such restricted stock awards will receive cash
dividends paid on such stock. Restricted stock held by Messrs. Johnson,
Girouard and Herndon will vest at the times and to the extent that 25%
of the stock options granted in conjunction with the award of restricted
stock have been exercised and the option shares held for two years. The
total amount and the dollar value of restricted stock held at February
26, 1994, were: Mr. Johnson, 20,552 shares ($179,830); Mr. Girouard,
10,539 shares ($92,216); Mr. Herndon, 5,480 shares ($47,950); Mr. Tener,
25,465 shares ($222,819); and Mr. Long, 17,922 shares ($156,818).
Restricted stock held by Messrs. Tener and Long was granted under a
different plan.
(4) Includes Company matching contributions for Messrs. Johnson, Girouard,
Herndon, Tener and Long, respectively, of $5,587, $5,679, $5,718, $5,654
and $5,679 under the Company's 401(k) Retirement Plan, of $1,789,
$1,465, $1,103, $1,460 and $1,379 under the Company's Benefit
Restoration Plan, and of $36,340, $44,810, $14,295, $191 and $18,650
under the Company's Stock Purchase Plan.
(5) Messrs. Tener and Long became executive officers during the 1993 fiscal
year, and accordingly, no information is provided for 1992.
</TABLE>
The Company has entered into Post-Employment Consulting Agreements with
Messrs. Johnson, Girouard, Herndon, Tener and Long (individually, an
"Executive"). Upon termination of the Executive's employment by the Company
prior to retirement other than for "cause" or by the Executive for "good
reason," as defined in the agreements, the Company will retain the Executive
as a consultant for two years and pay a monthly fee equal to his base salary
immediately prior to termination. The Executive will also receive 50% of the
Executive's cost for continuing medical and dental insurance coverage. If
the Executive enters into employment during the consulting period that
provides compensation equal to or greater than the amount of the consulting
fees, the Company will pay the Executive an immediate one-time payment in the
amount of 50% of the difference between the total fees that otherwise would
have been payable during the term of the consulting agreement and the
aggregate fees actually paid prior to reemployment. If the Executive enters
into employment during the consulting period that provides compensation less
than the consulting fees, the Company will reduce the monthly consulting fee
by the amount of the monthly compensation for reemployment and at the end of
the consulting period will pay the Executive 50% of the difference between
the total fees that otherwise would have been payable during the term of the
consulting agreement and the aggregate fees actually paid.
The Company maintains a Supplemental Executive Retirement Plan (the
"Supplemental Plan") to aid in attracting and retaining employees of
exceptional ability by providing certain benefits. Messrs. Johnson, Girouard
and Herndon participate in the Supplemental Plan, which provides that upon
death, disability, attaining age 65 or later retirement from the Company, a
participant will receive annual benefits which, when added to Social Security
retirement benefits, generally equal his or her vested percentage of 50% of
the participant's highest annual compensation received from the Company based
on a three-year average, but in no event more than $250,000. Pre-retirement
and post-retirement death and disability benefits are calculated in a similar
manner, and all benefits are to be paid as a lump sum, in installments over
15 years, or as an annuity. Retirement benefits under the Supplemental Plan
vest for each participant at the rate of 10% per year over 10 years of
service with a maximum of five years of credit allowed for service to the
Company prior to participation in the Supplemental Plan. In the event of
retirement, death, disability or certain terminations of employment within
two years of a change in control of the Company, the benefits under the
Supplemental Plan become vested.
<PAGE>
<PAGE>
Option Grants in the Last Fiscal Year
The following table sets forth information relating to stock options
granted during the fiscal year ending February 26, 1994, to the Chief
Executive Officer and the four other most highly compensated officers.
<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees Price Expiration Grant Date
Name Granted(1) Fiscal Year (per share)(2) Date Present Value(3)
- - ---- ---------- ----------- --------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Clark A. Johnson 38,667 18.6% $9.00 5/21/03 $101,308
Marvin J. Girouard 20,278 9.7 9.00 5/21/03 53,128
Robert G. Herndon 10,667 5.1 9.00 5/21/03 27,948
James R. Tener 9,917 4.8 9.00 5/21/03 24,495
Adrian G. Long 9,444 4.5 9.00 5/21/03 23,327
_______________
<FN>
(1) All options were granted May 21, 1993. Options granted to Messrs.
Johnson, Girouard and Herndon become exercisable in annual installments
of 25% of the amount awarded beginning one year after the date of grant.
Options granted to Messrs. Tener and Long become exercisable in annual
installments of 20% of the amount awarded beginning one year after the
date of grant. With the consent of the administrative committee of the
stock option plan, an employee may elect to satisfy his income tax
withholding obligations by the delivery of previously owned shares or
the withholding of shares otherwise issuable upon exercise of the
option. Options will terminate at the time of termination of employment
if the termination is for cause or for resignation without the consent
of the Company, or three months after termination in the case of any
other termination, or one year after death or disability.
(2) Exercise price is equal to the current market value at the date of
grant.
(3) The present value of options on the date of grant was determined using a
variation of the Black-Scholes option pricing model. The estimated
values under the Black-Scholes option pricing model are based on the
following assumptions at the time of grant: an exercise price equal to
the fair market value of the underlying Common Stock; an option term of
10 years; an interest rate of 6.04% that represents the interest rate on
a U.S. treasury security with a maturity date corresponding to the
option term; dividend payment rate of $.10 per share per year; a
volatility of 38.5% based on Common Stock prices for the one-year period
prior to the date of grant; and standard actuarial assumptions,
estimated from a large universe of option holders, that yield reductions
of 23.4% (for options vesting over four years) and 27.7% (for options
vesting over five years) to reflect the probability of forfeiture of the
option due to termination prior to vesting and reductions of 21.4% (for
options vesting over four years) and 20.2% (for options vesting over
five years) to reflect the probability of a shortened option term due to
termination of employment prior to the option expiration date. These
assumptions were made as of the time of grant and may or may not be
valid assumptions at later points in time. The actual value, if any,
that an executive may realize from the options will be the excess of the
market price of the Common Stock on the day of exercising the options
over the exercise price of the options. The actual value may or may not
be near the value estimated in the table.
</TABLE>
<PAGE>
<PAGE>
Aggregated Option Exercises in the Last Fiscal Year and Fiscal Year-End
Option Values
The following table provides information relating to the exercise of
stock options by the Chief Executive Officer and the other four most highly
compensated executive officers during the last fiscal year, and the number
and value of exercisable and unexercisable stock options held by such
officers at February 26, 1994.
<TABLE>
<CAPTION>
Number of
Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options Options
at Fiscal Year-End at Fiscal Year-End(1)
------------------------ -------------------------
Shares Acquired Value
Name on Exercise Realized(2) Exercisable Unexercisable Exercisable Unexercisable
- - ----- --------------- ----------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Clark A. Johnson -- -- 322,518 100,183 $1,302,648 $160,257
Marvin J. Girouard -- -- 52,746 62,949 127,549 135,750
Robert G. Herndon 2,814 7,035 1,576 19,103 7,045 6,327
James R. Tener -- -- 12,818 17,586 50,867 29,994
Adrian G. Long 1,892 7,887 1,576 11,544 6,414 8,127
______________
<FN>
(1) Computed as the difference between the option exercise prices and $8 3/4
(the closing price of the Common Stock at fiscal year-end).
(2) Computed as the difference between the option exercise prices and the
closing market price of the Common Stock at the date of exercise.
</TABLE>
Board of Directors Compensation Committee Report on Executive Compensation
The Compensation Committee, which is composed entirely of independent,
non-employee directors, establishes and administers incentive-based
compensation plans for the senior executives, who are the Chief Executive
Officer, the Chief Operating Officer and the Chief Financial Officer, and
recommends to the Board of Directors other compensation of the senior
executives and compensation of such other officers as the Compensation
Committee deems appropriate. The Compensation Committee from time to time
retains an independent consultant to assist the Committee in determining
compensation levels and programs.
The Company's overall management compensation philosophy reflects a
strong incentive orientation with an aim that more than half of potential
senior executive compensation result from performance-based compensation
plans. In addition to base salary, executive compensation can include annual
bonus, stock options, restricted stock, benefits and perquisites. The
Compensation Committee's objective is to provide executives with salary and
incentive programs that are valued near the size-adjusted median of
comparable companies in its industry, but with emphasis on performance. As
management responsibility increases, a greater portion of the executive's
compensation is directed toward performance-based programs. These incentive
programs involve short-term bonus plans to reward annual performance and
long-term, stock-based plans to encourage stock ownership and reward the
enhancement of shareholder value.
Section 162(m) of the Internal Revenue Code, enacted in 1993 and
applicable to the current fiscal year, generally prohibits publicly held
companies such as the Company from deducting from corporate income,
compensation paid to the chief executive officer or any of the four other
most highly compensated officers that exceeds $1,000,000 during the tax year.
Qualifying performance-based compensation paid pursuant to plans approved by
shareholders will not be subject to this deduction limitation. It is the
intent of the Compensation Committee to take reasonable measures to obtain
full corporate tax deductions for compensation paid to the Company's
executive officers. In this connection, the Compensation Committee intends
for awards under the Senior Management Annual Bonus Plan and the Company's
employee stock option plan to qualify for the performance-based compensation
exclusion applicable to the deduction limitation.
Base salary levels of senior executive officers are reviewed annually by
the Compensation Committee. Salaries are based primarily upon a review of
past performance of the Company, with emphasis on growth in operating
earnings, and individual performance of the executive. The Compensation
Committee considers the factors it deems relevant, but does not assign
specific weights to different factors. The Compensation Committee also
considers executive salary levels with reference to a peer group of 15 high-
growth retail companies, whose average performance is shown in the Stock
Price Performance Graph below, with the goal of targeting salaries near the
average of salaries paid by the peer group. At the time annual salaries were
established for the 1994 fiscal year, data specifying salary and bonus
components of total cash compensation for the peer group companies was
unavailable for that year as well as the preceding year, and as a result
certain assumptions and estimates were made in comparing peer group salary
compensation levels. Base salary for each of the Company's senior executives
during the last fiscal year fell above but near the median of estimated base
salary for comparable executives of the peer group companies. In evaluating
corporate performance for purposes of establishing the salary of the Chief
Executive Officer for the 1994 fiscal year, the Committee primarily
considered the net earnings of the Company. For the 1994 fiscal year, the
salary of the Chief Executive Officer was not adjusted. The Committee also
considered cost of living inflation in establishing salaries for the other
senior executives.
The Company maintains two annual bonus plans, one for senior executives
and another for other management. During the 1994 fiscal year, the bonus
plan for senior executives established a formula designed to reward for
superior growth in the Company's earnings per share over the prior year
compared to the change in earnings per share of the peer group companies. In
order to receive a bonus, the Company's performance had to rank at least
tenth relative to the companies in the peer group. The Company's earnings
per share declined in the 1994 fiscal year from the prior year due to lower
operating earnings and establishing one-time reserves for store closings and
another write-down. As a result, the Company's performance did not attain a
level under the bonus plan for the last fiscal year sufficient to provide
bonus awards to the senior executives. The Compensation Committee considered
the factors contributing to the decline in net earnings for the year along
with executives' performance and determined to award discretionary bonuses to
each of the senior executives. For the 1995 and future fiscal years the
Compensation Committee has adopted a bonus plan, which is subject to
shareholder approval at this Annual Meeting, to reward for superior growth in
total shareholder return of the Company compared to total shareholder return
of the peer group companies. In order to receive a bonus, the total
shareholder return of the Company must rank at least twelfth relative to the
peer group. From this threshold level, the amount of bonus available to the
two senior executives other than the Chief Executive Officer ranges from
approximately 32% of base salary if the Company ranks tenth in relative
performance with the peer group, up to approximately 110% of base salary if
the Company ranks first. The amount of bonus available to the Chief
Executive Officer ranges from 40% of his base salary if the Company ranks
twelfth in relative performance up to 125% of base salary if the Company
ranks first. The bonus plan provides a more demanding performance objective
to be achieved prior to the payment of any bonus amounts and then pays the
Chief Executive Officer and the other senior executives average to above
average bonus awards, compared to the peer group companies, once the higher
relative threshold has been attained.
The annual bonus for the Company's other executives is dependent upon
the attainment of budgeted levels of pretax earnings and provides bonus
awards based on a formula when earnings meet or exceed certain budgeted
levels. Target bonus amounts are set at from 10 to 35 percent of each
executive's base salary. Bonus targets were established to reflect the
average for bonus targets from a broad spectrum of comparable size companies,
including companies in the peer group.
Long-term incentives are provided through awards under stock option and
restricted stock plans. Under the stock option plan, executives and other
key employees are awarded options to purchase Company stock, typically at a
purchase price of fair market value on the date of grant. The Compensation
Committee may grant options at exercise prices above or below fair market
value. Awards under the stock option plan are designed with the intention of
promoting the success of the Company and retention of the executive with the
Company in a manner that produces value to the employee only when there is a
corresponding increase in value to all shareholders. The Company has two
restricted stock plans to provide long-term incentives and encourage
ownership of stock by management. One plan is currently intended for senior
executives and is implemented in conjunction with the granting of stock
options. The other plan is designed for other executives and provides for
the vesting of restricted stock awards over a ten-year period. Under both
plans, executives may vote and receive dividends on unvested restricted
stock.
Long-term incentives for the senior executives are awarded in a
combination of stock option and restricted stock awards. Restricted stock is
awarded only in conjunction with the granting of stock options and is subject
to such restrictions as the Compensation Committee establishes at the time of
the award. Rights to transfer the restricted stock will be acquired by the
executive only upon the satisfaction of all restrictions. The Company
currently intends to award annually a combination of stock options and
restricted stock awards. During the 1994 fiscal year, stock options with a
four-year vesting schedule and an exercise price at market value were granted
to the Chief Executive Officer, the Chief Operating Officer and the Chief
Financial Officer. The Compensation Committee intends to use stock options
and restricted stock in proportions to produce awards of approximately equal
value. In conjunction with the stock options, restricted stock was awarded
in amounts representing 25% of the shares subject to the corresponding stock
options. The restrictions on the stock will lapse only to the extent the
executive has exercised stock options that were granted in conjunction with
the restricted stock and has held the shares of option stock for two years.
The amounts of the stock option and restricted stock awards are based on the
average long-term incentive compensation of the peer group companies. The
number of currently held options by each executive was not considered in
making stock option and restricted stock awards. During the 1994 fiscal year
the Chief Executive Officer was awarded 9,677 shares of restricted stock
under this plan in conjunction with the granting of options to purchase
38,667 shares under the stock option plan. This stock option/restricted
stock award was based on the value of the average annualized long-term
compensation awarded for chief executive officers in the peer group.
The Company provides benefits and perquisites to executive officers to
respond to competitive practices in the industry. The Compensation Committee
believes these benefits are typical for companies of its size.
COMPENSATION COMMITTEE
Sally F. McKenzie
Kenneth N. Pontikes
<PAGE>
<PAGE>
Company Stock Price Performance Graph
The following table provides an indicator of the percentage change
during the Company's last five fiscal years of cumulative total shareholder
return, assuming the reinvestment of dividends, of the Company's Common
Stock, the S&P 500 Index, the Peer Group, consisting of 15 high-growth retail
companies, and the former peer group presented in last year's proxy
statement. The composition of the peer group was altered to replace three
companies involved in mergers and recapitalizations during the past year.
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
Pier 1 Imports, Inc. 100 85 42 92 108 82
S&P 500 Index 100 119 136 158 174 189
Peer Group 100 137 207 316 373 349
Old Peer Group 100 137 208 316 375 359
The companies comprising the peer group are The Bombay Co., Inc., Charming
Shoppes, Inc., Dayton Hudson Corporation, Dillard Department Stores, Inc.,
Duty Free International, Inc., Fabri-Centers of America, Inc., The Gap, Inc.,
The Home Depot, Inc., The Limited, Inc., Michaels Stores, Inc., Nordstrom,
Inc., The Sherwin-Williams Company, Toys "R" Us, Inc., Wal-Mart Stores, Inc.,
and Walgreen Co.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1988, the Company loaned Mr. Johnson $1,191,928 for the
purchase of shares of the Company's Common Stock in the open market. The
loan is evidenced by an unsecured promissory note which is payable on demand,
and if no demand is made, on December 31, 1997, unless such loan is renewed.
The note accrues interest at a floating rate of interest equal to 0.5% over
the daily weighted average interest rate applicable to the Company's variable
rate indebtedness. The note provides that no less than one-half of the
accrued interest will be due and payable on each December 31 and that the
remaining accrued interest, as of each December 31, will be added to the
principal amount of each note. The loan was granted in conjunction with the
termination of 91,080 stock options and the grant of other options to acquire
45,540 shares of Common Stock. The price per share of the terminated options
was $9.14. Mr. Johnson was permitted to elect to maintain the above-stated
options or to surrender for termination such options, and in consideration
therefor, be granted options to purchase 50% of the shares subject to the
terminated options at an option price equal to the fair market value of the
shares on the date of grant and be loaned funds by the Company to purchase up
to 100% of the shares subject to the terminated options. As of February 26,
1994, the principal amount of Mr. Johnson's promissory note was $776,036.97.
In March 1993 the Company invested $3,000,000 in a limited partnership
fund that invests primarily in securities of companies with small to medium
size market capitalizations. The fund is managed by Whiffletree Corporation,
one of whose principals is Steven E. Berman, a brother of Martin L. Berman.
Whiffletree Corporation is a division of Smith Barney, of which Martin L.
Berman, a nominee to become a director of the Company, is a managing
director. The Company has incurred fees to Whiffletree Corporation of
approximately $82,000 during the last fiscal year.
On April 1, 1994, the Company entered into an agreement with Smith
Barney to act as the trustee of a 401(k) defined contribution plan for the
Company's employees. Additionally, Smith Barney has been retained to select
and monitor management of the plan's funds and to provide investment advice
to participants of the plan as they may request. For these services, the
estimated fees to be paid to Smith Barney in the current fiscal year are
$50,000.
Effective December 21, 1989, a subsidiary of the Company and Berman
Industries, Inc. ("BII"), a company wholly owned by Martin L. Berman, entered
into a Joint Operating and User Agreement (the "User Agreement") for each
company to hold an undivided 1/8 ownership in a Cessna jet aircraft (the
"Aircraft Interest"). The Company acquired the Aircraft Interest for
$420,000 on December 21, 1989, and under the User Agreement sold 50% of the
Aircraft Interest to BII at a price of $210,000. The User Agreement, which
expires December 31, 1994, provides for each company to pay its respective
per-hour and fixed costs of operating the aircraft. BII has the right at any
time to sell its share of the Aircraft Interest to the Company and the
Company has the right to purchase BII's interest for a pro rata portion of
the purchase price paid by BII.
In June 1991, the Company leased from Comdisco, Inc. a mainframe
computer for a period of five years at a rental rate of $91,000 per month.
Mr. Pontikes became a Director of the Company in April 1993 and is standing
for re-election.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than
ten-percent of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission and the New York Stock Exchange
initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Officers, directors and
greater than ten-percent shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, all Section 16(a) filing requirements
applicable to its officers, directors and greater than ten-percent beneficial
owners were observed, except that one report was filed late by Luther A.
Henderson, a prior director of the Company, two reports were filed late by
Adrian G. Long and one report was amended late by Clark A. Johnson.
PROPOSED SENIOR MANAGEMENT ANNUAL BONUS PLAN
On March 24, 1994, the Board of Directors adopted, subject to
Shareholder approval, the Senior Management Annual Bonus Plan. The purpose
of the Plan is to encourage superior performance and to reward senior
executives of the Company for effective service as measured by total
shareholder return of the Company relative to a peer group of high-growth
retail companies. The opportunities for compensation under the Plan are
further intended to strengthen the ability of the Company to retain and
attract the senior management upon which continued growth and profitability
of the Company depend.
In 1993, Section 162(m) of the Internal Revenue Code was enacted to
limit deductibility of compensation in excess of $1,000,000 paid during the
Company's taxable year to the chief executive officer or any of the four
other most highly compensated officers unless the compensation is
performance-based and paid pursuant to plans approved by shareholders. The
Board of Directors intends for the Plan to satisfy the requirements of
Section 162(m) and is submitting the Plan for Shareholder approval in order
to permit full deductibility of all bonus awards under the Plan.
The Plan will be administered by the Compensation Committee, which will
have the power to interpret the Plan and make all determinations necessary or
advisable for the interpretation of the Plan.
The participants in the Plan consist of the Chief Executive Officer, the
Chief Operating Officer and the Chief Financial Officer, who participate in
the Plan during each fiscal year employed in such capacity by the Company.
Upon termination of employment for any reason prior to the end of the fiscal
year, a participant will cease participation and be ineligible to receive any
compensation under the Plan.
Bonus awards are based on total shareholder return for the Company's
Common Stock compared to total shareholder return for the common stock of
each of the companies comprising a peer group of 15 high-growth retail
companies whose average performance and identity are set forth in the Stock
Price Performance Graph above. Total shareholder return is defined as the
percentage change in price of the common stock at the end of the fiscal year
compared to the price of such stock at the end of the prior year plus the
percentage return on dividends paid, other than dividends paid in common
stock, based on the price of the common stock at the end of the prior year.
The amount of bonus awarded to each participant is calculated as a percentage
of the participant's base salary as determined by total shareholder return
for the Company in comparison to each of the peer group companies, with
higher awards provided for superior relative shareholder return for the
Company's Shareholders. For a period of five years from the effective date
of the Plan, the maximum bonus that may be awarded to a participant will be
125% of a base salary no greater than $700,000.
The Compensation Committee may terminate the Plan prior to the
commencement of a fiscal year and may amend the Plan in any respect, except
that material amendments regarding eligible participants, the terms of
performance goals or the maximum amounts payable under the Plan shall be
approved by the Company's Shareholders prior to any payments under the
amended plan.
Had the Plan been in effect during the 1994 fiscal year, no bonuses
would have been awarded to any participant under the Plan. The Plan became
effective as of February 27, 1994, subject to approval by Shareholders.
Adoption of the Plan requires the affirmative vote of the holders of at least
a majority of the shares of Common Stock voting on the Plan. Neither
abstentions nor broker non-votes are counted as voting for or against
approval of the Plan and, therefore, will be disregarded. If the Plan is not
approved by Shareholders, it will not become effective.
OTHER BUSINESS
The Board of Directors is unaware of any matters to be presented for
action at the meeting other than the election of Directors and approval of
the Senior Management Annual Bonus Plan that are set forth in Items 1 and 2
of the accompanying Proxy. If any other business should properly come before
the meeting, the persons named in the proxy intend to vote thereon in
accordance with their best judgment.
Relationship with Independent Auditors
The Board of Directors of the Company annually selects independent
public accountants to serve as auditors for the upcoming fiscal year. The
Board plans to select auditors for the 1995 fiscal year at the meeting of the
Board of Directors which follows the Annual Meeting of Shareholders.
The Board of Directors appointed Price Waterhouse as auditors for the
Company for fiscal year 1994. A representative of Price Waterhouse is
expected to be present at the Annual Meeting of Shareholders and will be
given the opportunity to make a statement if he so desires and to respond to
appropriate questions from Shareholders.
Shareholder Proposals for 1995 Annual Meeting
The date by which Shareholder proposals must be received by the Company
for inclusion in the Proxy Statement for the 1995 Annual Meeting of
Shareholders is January 20, 1995.
Proxy Solicitation
The cost of soliciting proxies will be borne by the Company. The
services of Kissel-Blake, Inc. will be employed for the purpose of
facilitating the solicitation. The fees of Kissel-Blake, Inc. in this
connection will be borne by the Company and are not expected to exceed $5,000
plus mailing and delivery expenses. In addition to solicitations by mail,
officers and regular employees of the Company may solicit proxies personally
and by telephone or other means, for which they will receive no compensation
in addition to their normal compensation. Arrangements may also be made
with brokerage houses and other custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of stock held of
record by such persons, and the Company will reimburse them for their
reasonable out-of-pocket and clerical expenses.
YOUR VOTE IS IMPORTANT
You are encouraged to let us know your preference by completing and
returning the enclosed proxy card.
J. Rodney Lawrence
Secretary
May 20, 1994<PAGE>
<PAGE>
PIER 1 IMPORTS, INC. COMMON STOCK
P 301 Commerce Street, Suite 600 PROXY
R Fort Worth, Texas 76102
O
X PROXY
Y SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS JUNE 23, 1994
The undersigned hereby appoints CLARK A. JOHNSON, MARK L. HART, JR. and J.
RODNEY LAWRENCE, and each of them, proxies with full power of substitution,
to represent and to vote as set forth herein all the shares of the Common
Stock of Pier 1 Imports, Inc. held of record by the undersigned on May 4,
1994, at the annual meeting of shareholders to be held at 10:00 a.m. local
time on June 23, 1994, at the Roundup Inn, Will Rogers Memorial Center
Complex, 3400 Crestline Road, Fort Worth, Texas, and any adjournment thereof.
Election of Directors, Nominees:
Clark A. Johnson, Marvin J. Girouard, Charles R. Scott, Sally F. McKenzie,
James M. Hoak, Jr., Kenneth N. Pontikes and Martin L. Berman.
You are encouraged to specify your choices by marking the appropriate boxes,
SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. The Proxies cannot
vote your shares unless you sign and return this card.
SEE REVERSE SIDE
- - -----------------------------------------------------------------------------
[X] Please mark your votes as in this example
Item 1. Election of Directors: (see reverse)
FOR WITHHELD
[ ] [ ]
For, except vote withheld from the following nominee(s):
__________________________________________________
Item 2. The approval of the proposed Senior Management Annual Bonus Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Item 3. In their discretion, the Proxies are authorized to vote as described
in the Proxy Statement and upon such other business as may properly come
before the meeting or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED SHAREHOLDER; IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE AND "FOR"
THE PROPOSAL IN ITEM 2.
SIGNATURE(S) ________________________________________DATE_______________
SIGNATURE(S) ________________________________________DATE_______________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administer, trustee or guardian,
please give full title as such.<PAGE>
<PAGE>
APPENDIX
The text of the Senior Management Annual Bonus Plan set forth below is
provided to the Securities and Exchange Commission pursuant to Instructions 3
of Item 10 of Schedule 14A and is not part of the definitive proxy statement
distributed to shareholders of the Company.
PIER 1 IMPORTS, INC.
SENIOR MANAGEMENT ANNUAL BONUS PLAN
For the Fiscal Year Ending February 25, 1995
1. Purpose. The purpose of the Pier 1 Imports, Inc. Senior Management
Annual Bonus Plan (the "Plan") is to encourage superior performance and
reward senior management of the Company for effective service as measured by
total shareholder return of the Company relative to a peer group of specialty
retail companies as specifically set forth below. The opportunities for
compensation under the Plan are further intended to strengthen the ability of
the Company to retain and attract the senior management upon which continued
growth and profitability of the Company depend.
2. Definitions. For purposes of the Plan, the following terms shall
have the meanings set forth below unless otherwise expressly provided or
unless the context otherwise requires:
"Committee" means the Compensation Committee of the Board of Directors
of the Company.
"Company" means Pier 1 Imports, Inc., a Delaware corporation.
"CEO" means the Chief Executive Officer of the Company.
"CFO" means the Chief Financial Officer of the Company.
"COO" means the Chief Operating Officer of the Company.
"Participant" means each of the CEO, COO and CFO.
"Peer Group" means the group of companies provided in Section 5(c)
hereof.
"Target Year" means the fiscal year of the Company for which awards are
determined under the Plan.
"Total Shareholder Return" of a company for a year means a fraction,
expressed as a percentage, in which (A) the numerator of the fraction is the
sum (which can be a negative amount) of (i) the price of the publicly traded
common stock of the company at the end of the year minus the price of such
stock at the end of the prior year, plus (ii) the total value (at the time of
payment) of all dividends and other distributions (other than dividends and
distributions consisting of shares of common stock of such company) actually
paid during the year with respect to a single share of common stock, and (B)
the denominator of the fraction is the price of the common stock at the end
of the prior year. The price of the common stock at the end of the prior
year shall be adjusted to reflect stock dividends, stock splits, combinations
of shares and similar changes to the company's capital structure during the
year. For purposes of these calculations, the year for each company shall be
the Target Year. The price of the common stock of a company shall be
determined as the average of the closing prices, as reported for composite
transactions, of such common stock during the 10 consecutive days in which
such common stock was publicly traded ending on the last day of the Target
Year or the year preceding the Target Year, as appropriate.
3. Administration. The Plan shall be administered by the Committee,
which shall have the power to interpret the Plan and to make all other
determinations necessary or advisable for the administration of the Plan.
4. Participation. Each Participant shall participate in the Plan
during each Target Year that the Participant is employed in such capacity by
the Company. If a Participant ceases to be employed by the Company for any
reason prior to the end of a Target Year, such Participant's participation in
the Plan will terminate, and such Participant will be ineligible to receive
any compensation under the Plan for such Target Year.
5. Awards.
(a) Annual awards under the Plan shall be based on Total Shareholder
Return of the Company's Common Stock for the Target Year compared with Total
Shareholder Return for each of the companies constituting the Peer Group. No
awards shall be payable under the Plan to the extent that consolidated net
income (after inclusion of awards hereunder) of the Company shall be less
than zero.
(b) In order to determine awards for each Participant, the Company
shall be ranked relative to each of the Peer Group companies in accordance
with Total Shareholder Return for the Target Year. After the Company's rank
has been established within the Peer Group, the amount of the award for each
Participant shall equal the portion of such Participant's base salary during
the Target Year that is equal to the percent of such Participant's base
salary listed opposite the Company's ranked position in the table set forth
on Exhibit A attached hereto.
(c) The Peer Group shall consist of the high-growth specialty retail
companies listed on Exhibit B attached hereto. In the event that during a
Target Year one or more of the companies comprising the Peer Group shall
dissolve, merge, consolidate, cease to be publicly traded or are no longer
appropriate for comparison in the Peer Group, as determined by the Committee
in its discretion, then such company or companies shall be automatically
deleted from the Peer Group and for each company deleted a company listed
under "Alternate companies" on Exhibit B shall, in the order listed, replace
such deleted company. If the number of companies in the Peer Group that
dissolve, merge, consolidate, cease to be publicly traded or are no longer
appropriate for comparison in the Peer Group, as determined by the Committee
in its discretion, shall be greater than the number listed as "Alternate
companies" on Exhibit B, then the Committee shall select additional companies
for replacement or make such other changes to the Plan that the Committee in
its discretion deems appropriate. The Committee may, in its discretion prior
to the commencement of a Target Year, delete, add or substitute companies in
the Peer Group when in the judgment of the Committee such changes to the Peer
Group advance the purposes of the Plan.
6. Certification and Payment of Awards. As soon as practicable after
the end of a Target Year, the independent certified public accountants for
the Company shall report to the Committee the amount of the awards for the
Participants, along with supporting data for such determination. After
review of such information, and upon determination that the awards conform to
the provisions of the Plan, the Committee shall certify that the awards
conform to the Plan. After such certification, the Company shall pay such
awards in cash to the appropriate Participants.
7. Effective Date; Shareholder Approval. The Plan shall be effective
as of the beginning of the Company's fiscal year ending February 25, 1995;
provided that prior to the completion of such fiscal year, the Plan shall be
approved by the holders of a majority of the shares of Company Common Stock
present or represented by proxy and voting on the Plan at a duly held meeting
of the shareholders of the Company.
8. Amendment of the Plan. The Committee may from time to time modify
or amend the Plan in any respect and make reasonable interpretations of the
Plan to take into account extraordinary or unusual items or events that
affect the purposes of the Plan; provided that any material amendments
regarding eligible Participants, the terms of the performance goals or the
maximum amounts of compensation payable under the Plan shall be approved by
the shareholders of the Company prior to any payments to Participants under
the amended Plan.
9. Termination of the Plan. The Board of Directors of the Company may
terminate the Plan prior to the commencement of any fiscal year to which the
Plan would otherwise apply.
10. Employment Rights. Nothing in the Plan shall confer upon any
Participant the right to continue in the employ of the Company or its
subsidiaries or shall interfere with or restrict in any way the rights of the
Participant's employer to discharge the Participant at anytime for any reason
whatsoever, with or without cause.
