FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended May 27, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from [ ] to [ ]
Commission File Number 1-7832
PIER 1 IMPORTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1729843
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
301 Commerce Street, Suite 600, Fort Worth, Texas 76102
(Address of principal executive offices, including zip code)
(817) 878-8000
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ]. No [ ].
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Shares outstanding as of June 30, 1995
Common Stock, $1.00 par value 39,345,127
<PAGE>
<PAGE>
PART I
------
Item 1. Financial Statements.
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands except per share amounts)
(Unaudited)
Three Months Ended
May 27, May 28,
1995 1994
-------- --------
Net sales $176,815 $161,486
Operating costs and expenses:
Cost of sales (including buying and
store occupancy) 107,677 96,135
Selling, general and administrative expenses 52,058 50,188
Depreciation and amortization 4,123 3,853
-------- --------
163,858 150,176
-------- --------
Operating income 12,957 11,310
Interest income (702) (305)
Interest expense 3,272 3,604
-------- --------
Income before income taxes 10,387 8,011
Provision for income taxes 4,152 2,476
-------- --------
Net income $ 6,235 $ 5,535
======== ========
Net income per share $.16 $.14
==== ====
Average shares outstanding during period,
including common stock equivalents 39,827 39,596
====== ======
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
PIER 1 IMPORTS, INC.
CONSOLIDATED BALANCE SHEET
(In thousands except share data)
(Unaudited)
May 27, Feb. 25,
1995 1995
-------- --------
ASSETS
Current assets:
Cash, including temporary investments of $26,265
and $46,173, respectively $ 34,981 $ 54,203
Accounts receivable, net 72,846 64,229
Inventories 204,263 200,968
Other current assets 31,708 33,487
-------- --------
Total current assets 343,798 352,887
Properties, net 104,771 105,618
Other assets 34,750 30,219
-------- --------
$483,319 $488,724
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of long-term debt $ 4,220 $ 2,638
Accounts payable and accrued liabilities 81,026 82,419
-------- --------
Total current liabilities 85,246 85,057
Long-term debt 143,032 154,432
Deferred income taxes 2,537 2,538
Other non-current liabilities 20,731 21,501
Stockholders' equity:
Common stock, $1.00 par, 200,000,000 shares
authorized, 39,877,000 and 37,826,000 issued,
respectively 39,877 37,826
Paid-in capital 110,627 93,833
Retained earnings 84,568 97,315
Cumulative currency translation adjustments (1,123) (1,195)
Less - 134,000 and 162,000 common shares in
treasury, at cost, respectively (1,208) (1,477)
Less - subscriptions receivable and unearned
compensation (968) (1,106)
-------- --------
231,773 225,196
-------- --------
$483,319 $488,724
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
May 27, May 28,
1995 1994
-------- --------
Cash flow from operating activities:
Net income $ 6,235 $ 5,535
Adjustments to reconcile to net cash used in
operating activities:
Depreciation and amortization 4,123 3,853
Deferred taxes and other 1,046 3,307
Change in cash from:
Inventories (3,295) 2,164
Accounts receivable and other current assets (6,857) (7,829)
Accounts payable and accrued expenses 2,752 (9,065)
Store-closing reserve (4,043) (325)
Other assets, liabilities, and other, net (193) (563)
------- -------
Net cash used in operating activities (232) (2,923)
------- -------
Cash flow from investing activities:
Capital expenditures (3,969) (3,971)
Proceeds from disposition of properties 213 3
Loan to Sunbelt Nursery Group, Inc. -- (9,600)
Other investments (5,000) (1,193)
------- -------
Net cash used in investing activities (8,756) (14,761)
------- -------
Cash flow from financing activities:
Cash dividends (1,208) (939)
Retirement of long-term debt (11,500) --
Net borrowings under line of credit agreements 1,600 22,000
Proceeds from sales of capital stock, treasury
stock, and other, net 874 468
------- -------
Net cash (used in) provided by financing
activities (10,234) 21,529
------- -------
Change in cash (19,222) 3,845
Cash at beginning of year 54,203 17,123
------- -------
Cash at end of period $34,981 $20,968
======= =======
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE><TABLE>
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MAY 27, 1995
(In thousands)
(Unaudited)
<CAPTION>
Cumulative Subscriptions
Currency Receivable Total
Common Paid-in Retained Translation Treasury and Unearned Stockholders'
Stock Capital Earnings Adjustments Stock Compensation Equity
------ ------- -------- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, February 25, 1995 $37,826 $ 93,833 $97,315 $(1,195) $(1,477) $(1,106) $225,196
Restricted stock grant and
amortization 7 44 (129) 138 60
Stock Purchase Plan,
exercise of stock options
and other 166 489 365 398 1,418
Currency translation
adjustments 72 72
Cash dividends, declared
or paid (1,208) (1,208)
Five percent stock dividend 1,878 16,261 (18,139) --
Net income 6,235 6,235
------- -------- ------- ------- ------- ------- --------
Balance, May 27, 1995 $39,877 $110,627 $84,568 $(1,123) $(1,208) $ (968) $231,773
======= ======== ======= ======= ======= ======= ========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
/TABLE
<PAGE>
<PAGE>
PIER 1 IMPORTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MAY 27, 1995 AND MAY 28, 1994
(Unaudited)
The accompanying unaudited financial statements should be read in
conjunction with the Form 10-K for the year ended February 25, 1995. All
adjustments that are, in the opinion of management, necessary for a fair
statement of the financial position as of May 27, 1995, and the results of
operations and cash flows for the three months ended May 27, 1995 and May 28,
1994 have been made and consist only of normal recurring adjustments. The
results of operations for the three months ended May 27, 1995 and May 28,
1994 are not indicative of results to be expected for the fiscal year because
of, among other things, seasonality factors in the retail business.
Note 1 - Commitments and contingencies - Sunbelt Nursery Group, Inc.
In April 1995, Sunbelt Nursery Group, Inc. ("Sunbelt") defaulted on the
13 nursery store subleases that comprise the $22.8 million of non-revolving
store development financing, and the Company terminated the subleases.
Sunbelt has also defaulted on three nursery store leases guaranteed by the
Company. The Company continues to negotiate with Sunbelt regarding a
settlement of the Company's claims as a result of the defaults.
In July 1995, the Company announced that, based upon the then current
status of these negotiations and on recently completed analyses of the costs
resulting from the termination of the 13 nursery store subleases, the
estimated cost to disengage from its financial support of Sunbelt would range
from $14 million to $17.5 million. The outcome of negotiations for an
agreement with Sunbelt and Sunbelt's performance under the agreement may
reduce the high end of the range. The Company will record a charge in the
fiscal 1996 second quarter of $14 million, or $9.6 million on an after-tax
basis representing $.24 per share. The charge reflects the Company's lease
termination losses resulting from the disposition of the 13 nursery stores
and other expected costs.
<PAGE>
<PAGE>
PART I
------
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Pier 1 Imports, Inc. ("the Company") recorded net sales of $176.8
million for the first quarter of fiscal 1996, a 9.5% increase compared to the
same period of fiscal 1995. New stores contributed a majority of the sales
growth with 16 stores opened and one store closed during the first three
months of fiscal 1996. Same-store sales for the first quarter of fiscal 1996
increased approximately 3% versus the same period a year ago. This
improvement resulted from a continued increase in hard goods merchandise
sales such as furniture and decorative accessories, offset partially by a
decrease in soft goods merchandise sales which includes apparel and jewelry.
Hard goods and soft goods sales contributed approximately 90% and 10%,
respectively, of total sales during the first three months of fiscal 1996.
Sales on the Company's proprietary credit card were $42.9 million, or 24.3%
of total sales, during the first quarter of fiscal 1996, an increase of $10.7
million, or 33.2%, over the same period last year. The Company's store count
aggregated 643 at fiscal 1996 first quarter-end compared to 590 at fiscal
1995 first quarter-end.
Gross profit, after related buying and store occupancy costs, expressed
as a percentage of sales, decreased to 39.1% for the first quarter of fiscal
1996 from 40.5% for the same period of fiscal 1995. This decline was
primarily due to a shift in advertising and promotional strategies to
stimulate customer traffic which resulted in higher promotional discounts
during this year's first quarter. Store occupancy costs, as a percentage of
sales, increased 30 basis points to 15.5% during the first three months of
fiscal 1996 from 15.2% for the same period of fiscal 1995 due to slightly
higher occupancy rates on new stores opened in the fiscal 1996 first quarter.
The Company opened 16 new stores during the first quarter of fiscal 1996
compared to four new stores opened in the comparable period of fiscal 1995.
Selling, general and administrative expenses, including marketing, as a
percentage of sales, decreased 170 basis points to 29.4% in the first quarter
of fiscal 1996 from 31.1% for the comparable period of fiscal 1995. In total
dollars, expenses for the first quarter of fiscal 1996 increased $1.9 million
over the first quarter of fiscal 1995, primarily due to a $3.0 million
increase attributable to expenses that normally increase proportionately with
sales, such as store salaries, and a $0.7 million increase in net proprietary
credit card costs. These increases were partially offset by a $1.1 million
decrease in bonuses primarily due to changes in the store manager bonus
program, and a shift of marketing expenditures (estimated at $1.8 million),
from the first quarter to later quarters during the current fiscal year, as
the Company's national television campaign is scheduled to begin in the
second quarter of fiscal 1996. The Company expects its marketing
expenditures this fiscal year to be approximately the same percentage of
sales as fiscal year 1995. Other various general and administrative expenses
increased by $1.1 million.
Net interest expense declined $0.7 million during the first quarter of
fiscal 1996 compared to the same period of fiscal 1995 due to lower effective
interest rates coupled with lower debt levels, net of cash balances.
The Company's effective income tax rate for fiscal 1996 increased to
40.0% compared to 31.0% for fiscal 1995. The increase is primarily due to the
benefit of tax- favored foreign income last fiscal year coupled with the tax
benefit from the sale of Sunbelt Nursery Group, Inc. ("Sunbelt") common stock
recognized in fiscal year 1995.
Operating income increased $1.7 million to $13.0 million during the
first quarter of fiscal 1996 compared to $11.3 million in the first quarter
of fiscal 1995. Fiscal 1996 first quarter net income aggregated $6.2
million, or $.16 per share, versus net income of $5.5 million, or $.14 per
share, for the same period last year.
Liquidity and Capital Resources
Cash, including temporary investments, declined to $35.0 million at the
end of the first quarter of fiscal 1996 from $54.2 million at fiscal 1995
year-end, primarily due to the retirement of $11.5 million of the Company's
convertible notes, capital expenditures of $4.0 million, payments on the
store-closing program of $4.0 million, investments in The Pier Retail Group
Limited of $5.0 million, a $3.3 million increase in inventory levels as a
result of seasonal build-up, and an $8.5 million increase in the Company's
proprietary credit card receivable due to various promotions and incentives
offered during the first quarter of fiscal 1996. These cash expenditures
were partially offset by net income and non-cash related items aggregating
$11.4 million, changes in other working capital of $4.2 million and cash flow
from other investing and financing activities of $1.5 million. Cash flow
from operations improved $2.7 million during the first three months of fiscal
1996 over the prior year period.
The Company previously announced that, depending upon market conditions,
it may utilize a portion of its surplus cash during fiscal 1996 to purchase
up to $25 million of the Company's 6 7/8% convertible notes in order to
reduce debt service costs and future earnings per share dilution. During the
first quarter of fiscal 1996, the Company purchased $11.5 million of these
notes, leaving $63.5 million of the Company's 6 7/8% convertible notes
outstanding at the end of the first quarter of fiscal 1996.
Final cash requirements to fund the store-closing program from fiscal
1994 for lease terminations are expected to be approximately $7.8 million for
the remainder of fiscal 1996 and will be funded through working capital and
operations. During the first quarter of fiscal 1996, approximately $4.0
million was expended and charged against the reserve for lease termination
costs.
Working capital requirements will continue to be provided by cash and
$168.5 million in short-term revolving lines of credit. Under these lines of
credit at May 27, 1995, $1.6 million was outstanding in the form of short-
term borrowings and an additional $68.5 million was committed under letters
of credit. The Company's current ratio at the end of the first quarter of
fiscal 1996 was 4.0 to 1 compared to 4.1 to 1 at fiscal year end 1995 and 3.3
to 1 at the end of the first quarter of fiscal 1995. The Company's minimum
operating lease commitments remaining for fiscal 1996 are $74 million, and
the present value of total existing minimum operating lease commitments is
$386 million.
During the first three months of fiscal 1996, the Company paid a $.03
per share cash dividend, distributed a 5% stock dividend and has declared a
cash dividend of $.03 per share payable on August 16, 1995 to shareholders of
record on August 2, 1995. The Company currently expects to continue paying
modest cash dividends in fiscal 1996 and intends to retain most of its future
earnings for expansion of the Company's business.
In April 1993, the Company sold its 49.5% ownership interest in Sunbelt
to General Host Corporation ("General Host") and committed to provide Sunbelt
up to $25 million of non-revolving store development financing through April
1996. In October 1994, in connection with the sale by General Host of its
49.5% interest in Sunbelt to a third party unrelated to the Company or
General Host, the Company agreed to extend $22.8 million of the non-revolving
store development financing to Sunbelt until June 30, 1998, at market rental
rates. The Company also guarantees other Sunbelt store lease commitments
aggregating $6.0 million with a present value of approximately $4.6 million.
In April 1995, Sunbelt defaulted on the 13 nursery store subleases that
comprise the $22.8 million of non-revolving store development financing, and
the Company terminated the subleases. Sunbelt has also defaulted on three
nursery store leases guaranteed by the Company. The Company continues to
negotiate with Sunbelt regarding a settlement of the Company's claims as a
result of the defaults.
In July 1995, the Company announced that, based upon the then current
status of these negotiations and on recently completed analyses of the costs
resulting from the termination of the 13 nursery store subleases, the
estimated cost to disengage from its financial support of Sunbelt would range
from $14 million to $17.5 million. The outcome of negotiations for an
agreement with Sunbelt and Sunbelt's performance under the agreement may
reduce the high end of the range. The Company will record a charge in the
fiscal 1996 second quarter of $14 million, or $9.6 million on an after-tax
basis representing $.24 per share. The cash requirements, which will be
funded through working capital and operations, will not have a significant
impact on the Company's liquidity, but the charge to earnings will have a
material impact on fiscal 1996 second quarter earnings. The charge reflects
the Company's lease termination losses resulting from the disposition of the
13 nursery stores and other expected costs.
Management continues to believe that earnings from Company store
operations for the fiscal year ending March 2, 1996 will increase 12% to 15%
over the previous year.
<PAGE>
<PAGE>
PART II
-------
Item 2. Change in Securities.
--------------------
On June 23, 1995, the Company's Certificate of Incorporation
was amended to increase the number of shares of authorized common
stock from 100,000,000 shares to 200,000,000 shares.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
The Annual Meeting of Shareholders of the Company was held
June 22, 1995 for the purposes of electing seven (7) Directors to
hold office until the next Annual Meeting of Shareholders and to
vote upon an amendment to the Company's Certificate of Incorporation
to increase the Company's authorized common stock.
Director Election
-----------------
Director FOR WITHHELD
-------- --- --------
Clark A. Johnson 32,629,556 1,134,303
Marvin J. Girouard 32,654,301 1,109,558
Martin L. Berman 32,672,475 1,091,384
Craig C. Gordon 33,029,977 733,882
James M. Hoak, Jr. 32,976,910 786,949
Sally F. McKenzie 33,043,169 720,690
Charles R. Scott 32,823,932 939,927
Amendment to the Company's Certificate of Incorporation to Increase
the Company's Authorized Common Stock
-------------------------------------------------------------------
FOR AGAINST ABSTAINED
--- ------- ---------
25,910,695 7,678,993 174,171
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits See exhibit index.
(b) Reports on Form 8-K None.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PIER 1 IMPORTS, INC. (Registrant)
Date: July 10, 1995 By: /s/ Clark A. Johnson
------------- -------------------------------------------
Clark A. Johnson, Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer)
Date: July 10, 1995 /s/ Robert G. Herndon
------------- -------------------------------------------
Robert G. Herndon, Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
Date: July 10, 1995 /s/ Susan E. Barley
------------- -------------------------------------------
Susan E. Barley, Vice President and
Controller
(Principal Accounting Officer)
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
10.2.4 Eleventh Amendment to Lease Contract By and Between
City Center Development Co. and Pier 1 Imports (U.S.), Inc.
dated April 10, 1995
10.5.1 Pier 1 Benefit Restoration Plan As Amended and Restated
Effective July 1, 1995
27 Financial Data Schedule for Three-Month Period
EXHIBIT 10.2.4
ELEVENTH AMENDMENT TO LEASE CONTRACT
BY AND BETWEEN
CITY CENTER DEVELOPMENT CO.
AND
PIER 1 IMPORTS (U.S.), INC.
THIS ELEVENTH AMENDMENT TO LEASE CONTRACT ("Amendment") is made and
entered into to be effective as of the 10th day of April, 1995 ("Effective
Date"), by and between CITY CENTER DEVELOPMENT CO., a Texas general
partnership ("Landlord") and PIER 1 IMPORTS (U.S.), INC., a Delaware
corporation (successor-in-interest to Pier 1 Imports - Texas, Inc.)
("Tenant").
WHEREAS, Landlord and Tenant entered into that certain Lease Contract
("Lease") dated July 19, 1985, covering office space on the 6th, 7th, and 8th
floors of City Center Tower II ("Building") located at 301 Commerce Street,
Block 40, City Addition to the City of Fort Worth, Tarrant County, Texas and
on the ground floor of City Center Parking Garage ("Garage") located at 201
Commerce Street, Fort Worth, Texas; and
WHEREAS, the Leased Premises are now comprised of approximately (a)
18,848 square feet of Rentable Area on the 5th floor of the Building, (b)
18,794 square feet of Rentable Area on the 6th floor of the Building, (c)
21,916 square feet of Rentable Area on the 7th floor of the Building, (d)
22,274 square feet of Rentable Area on the 8th floor of the Building, (e)
22,096 square feet of Rentable Area on the 9th floor of the Building, (f)
10,878 square feet of Rentable Area, plus 1,356 square feet of Month-to-Month
Space on the 10th floor of the Building, (g) 8,122 square feet of Rentable
Area on the street level of the Garage, and (h) 4,079 square feet of Rentable
Area in the basement of Texas Commerce Tower at 201 Main Street, Block 36,
Original Town of Fort Worth, Tarrant County, Texas;
WHEREAS, the Lease was subsequently amended as of October 29, 1985,
December 16, 1985, April 23, 1987, March 1, 1988, December 30, 1988, February
28, 1989, August 1, 1990, September 1, 1993, January 1, 1994, and March 1,
1994 (whereby, among other items, such amendments provided that the Leased
Premises were expanded to include space on the 5th, 9th, and 10th floors of
the Building and space in the basement of Texas Commerce Tower); and
WHEREAS, Landlord and Tenant desire to further amend the Lease as
provided below.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Landlord and Tenant amend the Lease as
follows:
1. Leased Premises. Paragraph 36 of the Lease (as previously amended)
is further amended to provide that from and after the 10th Floor Expansion
Date (defined below in this paragraph), the Leased Premises shall be
increased to include the approximately 9,770 square feet of Rentable Area
located on the 10th floor of the Building previously defined in the Lease as
the "10th Floor Expansion Space". The 10th Floor Expansion Space is outlined
on the floorplan attached to this Eleventh Amendment as Exhibit "A" and
includes the 1,356 square feet of Rentable Area located on the 10th floor of
the Building which was previously defined as the "Month-to-Month Space".
Tenant vacated the Month-to-Month Space on April 10, 1995; therefore, from
April 10, 1995 until the 10th Floor Expansion Date, no Rent shall accrue for
the Month-to-Month Space. From and after the 10th Floor Expansion Date, all
of the Rentable Area on the 10th floor of the Building shall be included in
the Leased Premises for the Term expiring February 28, 2004. The 10th Floor
Expansion Date is the later to occur of (i) July 10, 1995, or (ii)
substantial completion of tenant improvements to the 10th Floor Expansion
Space.
2. Base Rent. Paragraph 2 of the Tenth Amendment to the Lease, which
amended the Base Rent applicable to the Leased Premises, is modified to add
the following provision:
Notwithstanding the foregoing Base Rent provisions applicable to
the portions of the Leased Premises other than the 10th Floor Expansion
Space, Tenant shall pay Landlord or Landlord's assigns Base Rent for
the 10th Floor Expansion Space only (9,770 square feet of Rentable
Area) in the amount of $17.00 per square foot of Rentable Area of the
10th Floor Expansion Space per year, comprised of a Fixed Rent
Component of $11.00 and a Variable Maintenance Component of $6.00 which
is subject to escalation in the same manner as the Variable Maintenance
Component for the remainder of the Leased Premises. Base Rent for the
10th Floor Expansion Space shall accrue from and after the 10th Floor
Expansion Date.
3. Tenant Improvement Allowance for the 10th Floor Expansion Space.
As provided in Paragraph 40.C. set forth in the Tenth Amendment to the Lease,
Landlord shall provide Tenant with a tenant improvement allowance of $15.00
per square foot of Rentable Area of the 10th Floor Expansion Space.
4. Temporary Space. For the period from April 10, 1995, until August
1, 1995, Tenant may occupy for its temporary use approximately 1,195 square
feet of Rentable Area on the 12th floor of the Building ("Temporary Space").
No Base Rent will accrue for the Temporary Space during this period, but
Tenant shall pay its prorata share of all Utility Costs attributable to the
Temporary Space during the period of Tenant's occupancy. Tenant's use and
occupancy of the Temporary Space is subject to all of the terms and
conditions of this Lease other than the Term, Rent, and tenant improvement
and other monetary allowance provisions of the Lease. Tenant accepts the
Temporary Space in AS IS condition, and Landlord is not required to make any
improvements or modifications to the Temporary Space.
All capitalized terms not otherwise defined in this Eleventh Amendment
have the meanings assigned to such terms in the Lease.
Except as specifically set forth in this Eleventh Amendment, the Lease
as previously amended is ratified and remains in full force and effect as
written.
IN WITNESS WHEREOF, the parties have executed this Eleventh Amendment
on this the 24th day of May, 1995, to be effective as of the 10th day of
April, 1995.
CITY CENTER DEVELOPMENT CO., PIER 1 IMPORTS (U.S.), INC.,
a Texas general partnership a Delaware corporation
By: Sid R. Bass, Inc.,
Thru Line Inc., By:/s/ E. Mitchell Weatherly
Keystone, Inc., and -------------------------
Lee M. Bass, Inc., Name: E. Mitchell Weatherly
its general partners
Title: Senior Vice President,
By: /s/ W. Robert Cotham Human Resources
----------------------
W. Robert Cotham,
Vice President of each
named corporation
EXHIBIT 10.5.1
PIER 1
BENEFIT RESTORATION PLAN
AS AMENDED AND RESTATED EFFECTIVE JULY 1, 1995
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. Effective December
20, 1991, the Pier 1 Benefit Restoration Plan was amended and restated.
Effective as of July 1, 1995, the Pier 1 Benefit Restoration Plan is being
amended and restated as hereinafter set forth in this instrument.
<PAGE>
<PAGE>
PIER 1
BENEFIT RESTORATION PLAN
TABLE OF CONTENTS
ARTICLE
I Title and Effective Date
II Definitions and Construction of Plan Document
III Eligibility
IV Deferral of Compensation
V Restoration Account
VI Distribution
VII Beneficiary
VIII Administration of Plan
IX Claims Procedure
X Nature of Company's Obligation
XI Miscellaneous
<PAGE>
<PAGE>
ARTICLE I
TITLE AND EFFECTIVE DATE
Section 1.01 Title. This Plan shall be known as the Pier 1 Benefit
Restoration Plan (hereinafter referred to as the "Plan").
Section 1.02 Effective Date. The effective date of this Plan shall
be April 1, 1990.
ARTICLE II
DEFINITIONS AND CONSTRUCTION OF THE PLAN DOCUMENT
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 the Company.
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.
Section 2.05 Compensation. "Compensation" shall mean Compensation,
as defined in the 40l(k) Plan; provided, however, that no limit on annual
compensation, pursuant to Code Section 401(a)(17), shall apply.
Section 2.06 Company. "Company" shall mean the "Employer," as such
term is defined in the 40l(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 Committee and executed and
submitted by a Participant to the Committee before the relevant Election
Date.
Section 2.08 Election Date. The "Election Date" is the date
established by this Plan as the date on or before which an Executive must
submit a valid Compensation Deferral Agreement to the Committee. The
applicable Election Dates are as follows: (a) 30 days after adoption of the
Plan for Executives who are declared eligible to participate at the time the
Plan is adopted, or (b) the last day of any Plan Quarter of any Plan Year if
(a) above does not apply.
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 employed by the Company.
Section 2.11 40l(k) Plan. "40l(k) Plan" shall mean the Pier 1
Associates 401(k) Plan, as it shall be amended from time to time.
Section 2.12 Participant. "Participant" means an Executive who is
participating in the Plan within the meaning of Article III hereof.
Section 2.13 Plan. "Plan" means this Pier 1 Benefit Restoration
Plan, described in this instrument, as amended from time to time.
Section 2.14 Plan Year. The "Plan Year" is the calendar year.
Section 2.15 Plan Quarter. A "Plan Quarter" is one-fourth (or three
(3) months) of a Plan 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 and may, at the discretion of the Committee, include one or more
sub-accounts to reflect the amounts credited to a Participant under the
various terms of this Plan.
ARTICLE III
ELIGIBILITY
Section 3.01 Eligibility. Eligibility for participation in this
Plan shall be determined by the Committee, in its sole discretion, on an
individual basis; 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.
Section 3.02 Participation. An Executive, after having been
notified by the Committee that he is eligible for participation, shall
complete and timely return to the Committee a duly executed Compensation
Deferral Agreement. No Compensation Deferral Agreement shall be effective
before acceptance by the Company.
Section 3.03 Subsequent Eligibility. If a Participant stops,
pursuant to Section 4.05 hereof, his deferrals of Compensation hereunder,
such Participant shall lose his eligibility for participation in this Plan
until he is again selected by the Committee pursuant to Section 3.01 hereof.
ARTICLE IV
DEFERRAL OF COMPENSATION
Section 4.01 Compensation Deferral. Through the timely delivery to
the Committee 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 fifteen percent
(15%) 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 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 Committee 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 immediately
succeeding Plan Quarter after the Plan Quarter in which the Compensation
Deferral Agreement is submitted by the eligible Executive to the Company. 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 both the Participant and the Company.
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 Revocation or Reduction of Deferrals. On or before any
applicable Election Date, 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 any of the Plan Quarters remaining under
this Plan. No change in Compensation deferrals will be permitted for any
Plan Quarter after the beginning of such Plan Quarter.
ARTICLE V
RESTORATION ACCOUNT
Section 5.01 Restoration Account. 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 a
separate Restoration Account for each Participant.
Section 5.02 Interest. Each Participant's Restoration Account
balance shall be credited at the end of each Plan Quarter with an amount of
interest calculated at a rate equal to the rate of return given by the
Company to other unsecured creditors of the Company. This rate shall be
determined at the beginning of each Plan Year by the Committee; provided,
however, that if for any Plan Year the Committee does not determine a rate
for such Plan Year, the rate as determined for the immediately preceding Plan
Year shall be used.
ARTICLE VI
DISTRIBUTION
Section 6.01 Distribution of Restoration Account Balance. Except as
provided below, distribution or withdrawal of the vested value of a
Participant's Restoration Account balance shall be made in accordance with
the provisions for distributions or withdrawals of account balances under the
401(k) Plan, irrespective of whether a Participant is actually participating
in the 401(k) Plan. However, no withdrawals are permitted that are
predicated solely on the fact that Participant has attained age 59 1/2 years.
Moreover, no withdrawal or distribution to a Participant may be made by
reason of financial hardship.
Section 6.02 Nonforfeitable Right to Employee Contributions. 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 shall vest 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 Lump Sum Distributions in Cash. All distributions of a
Participant's Restoration Account shall be made in cash only and only in the
form of a lump sum.
Section 6.05 Loans. No loans to Participants of amounts in a
Participant's Restoration Account shall be permitted.
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 Committee. 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 Committee 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 the Committee's determination and 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 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 40l(k) Plan.
Section 8.02 Finality of Determination. Subject to the Plan, the
Committee shall, from time to time, establish rules, 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.
Section 8.06 Cash-Out of Non-qualifying Participants.
Notwithstanding anything in this Plan or any Compensation Deferral Agreement
to the contrary, the Committee may remove from participation in the Plan any
Participant whose participation, according to any regulation (whether
proposed, temporary, or final), ruling, court case or administrative
interpretation, causes or may cause the Plan, in the sole discretion of the
Committee, to fail to qualify as a plan described in Section 201(2) of ERISA
or any successor statutory provision. Participants so removed may,
notwithstanding the Plan or any Compensation Deferral Agreement, be
distributed immediately in one lump sum the vested balance of their
Restoration Accounts.
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 Committee.
Section 9.02 Denied Claim. If the claim is denied, in full or in
part, the Committee 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.
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 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.
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 Acceleration of Payment. The Company reserves the
right to accelerate the payment of any benefits payable under this Plan at
any time without the consent of the Participant, his estate, his Beneficiary
or any other person claiming through the Participant.
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 on this 6th day of June, 1995,
effective as of July 1, 1995.
COMPANY
By: /s/ E. Mitchell Weatherly
-------------------------
Title: Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENT OF OPERATIONS AND BALANCE SHEET AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-02-1996
<PERIOD-END> MAY-27-1995
<CASH> 8,716
<SECURITIES> 26,265
<RECEIVABLES> 75,938
<ALLOWANCES> 3,092
<INVENTORY> 204,263
<CURRENT-ASSETS> 343,798
<PP&E> 217,519
<DEPRECIATION> 112,748
<TOTAL-ASSETS> 483,319
<CURRENT-LIABILITIES> 85,246
<BONDS> 143,032
<COMMON> 39,877
0
0
<OTHER-SE> 191,896
<TOTAL-LIABILITY-AND-EQUITY> 483,319
<SALES> 176,815
<TOTAL-REVENUES> 176,815
<CGS> 107,677
<TOTAL-COSTS> 163,858
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,272
<INCOME-PRETAX> 10,387
<INCOME-TAX> 4,152
<INCOME-CONTINUING> 6,235
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,235
<EPS-PRIMARY> .16
<EPS-DILUTED> 0
</TABLE>
