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 30, 1998
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) 252-8000
(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 July 6, 1998
- ----------------------------- -------------------------------------
Common Stock, $1.00 par value 65,700,457
<PAGE>
PART I
------
Item 1. Financial Statements.
---------------------
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(Unaudited)
Three Months Ended
May 30, May 31,
1998 1997
-------- --------
Net sales $250,508 $229,243
Operating costs and expenses:
Cost of sales (including buying and
store occupancy) 140,821 130,087
Selling, general and administrative expenses 76,290 70,938
Depreciation and amortization 6,996 5,415
-------- --------
224,107 206,440
-------- --------
Operating income 26,401 22,803
Nonoperating (income) and expense:
Interest income (730) (294)
Interest expense 2,128 2,027
-------- --------
1,398 1,733
-------- --------
Income before income taxes 25,003 21,070
Provision for income taxes 9,502 8,431
-------- --------
Net income $ 15,501 $ 12,639
======== ========
Net income per share:*
Basic $.15 $.13
==== ====
Diluted $.14 $.12
==== ====
Average shares outstanding during period,
including common stock equivalents:*
Basic 100,936 100,903
======= =======
Diluted 113,046 112,500
======= =======
* Adjusted to reflect a three for two stock split effected in the form of a
stock dividend declared June 25, 1998.
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIER 1 IMPORTS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
(Unaudited)
May 30, February 28,
1998 1998
-------- ------------
ASSETS
Current assets:
Cash, including temporary investments of $42,795
and $67,972, respectively $ 57,387 $ 80,729
Accounts receivable, net 10,618 12,638
Inventories 240,409 234,180
Prepaid expenses and other current assets 77,343 74,834
-------- --------
Total current assets 385,757 402,381
Properties, net 231,556 216,330
Other assets 35,208 34,699
-------- --------
$652,521 $653,410
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of long-term
debt $ 1,982 $ 1,994
Accounts payable and accrued liabilities 121,252 119,596
-------- --------
Total current liabilities 123,234 121,590
Long-term debt 114,856 114,881
Other non-current liabilities 24,352 24,208
Stockholders' equity:
Common stock, $1.00 par, 500,000,000 shares
authorized, 67,903,000 issued 67,903 67,903
Paid-in capital 165,618 166,824
Retained earnings 178,148 165,345
Cumulative other comprehensive income (1,315) (1,108)
Less - 735,000 and 176,000 common shares in
treasury, at cost, respectively (17,634) (3,149)
Less - unearned compensation (2,641) (3,084)
-------- --------
390,079 392,731
-------- --------
$652,521 $653,410
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
May 30, May 31,
1998 1997
------- -------
Cash flow from operating activities:
Net income $15,501 $12,639
Adjustments to reconcile to net cash provided by
operating activities:
Depreciation and amortization 6,996 5,415
Deferred taxes and other 267 734
Change in cash from:
Inventories (6,229) (783)
Accounts receivable and other current assets (2,227) (2,600)
Accounts payable and accrued expenses (608) (1,205)
Other assets, liabilities, and other, net (303) (954)
------- -------
Net cash provided by operating activities 13,397 13,246
------- -------
Cash flow from investing activities:
Capital expenditures (24,346) (9,550)
Proceeds from disposition of properties 503 509
Beneficial interest in securitized receivables 2,609 (2,935)
Acquisition of national bank charter -- (943)
------- -------
Net cash used in investing activities (21,234) (12,919)
------- -------
Cash flow from financing activities:
Cash dividends (2,698) (1,802)
Purchases of treasury stock (14,742) (1,662)
Proceeds (payments) from sales (purchases) of
stock options exercised, stock purchase plan
and other, net 1,935 1,724
------- -------
Net cash used in financing activities (15,505) (1,740)
------- -------
Change in cash and cash equivalents (23,342) (1,413)
Cash and cash equivalents at beginning of period 80,729 32,280
------- -------
Cash and cash equivalents at end of period $57,387 $30,867
======= =======
The accompanying notes are an integral part of these financial statements.
<PAGE><TABLE>
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MAY 30, 1998
(In thousands)
(Unaudited)
<CAPTION>
Cumulative
Other Total
Common Paid-in Retained Comprehensive Treasury Unearned Stockholders'
Stock Capital Earnings Income Stock Compensation Equity
------- -------- -------- ------------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, February 28, 1998 $67,903 $166,824 $165,345 ($1,108) ($ 3,149) ($3,084) $392,731
--------
Comprehensive income
Net income 15,501 15,501
Other comprehensive income, net of tax:
Foreign currency translation adjustments (207) (207)
--------
Comprehensive income 15,294
--------
Purchases of treasury stock (19,857) (19,857)
Restricted stock grant and amortization 443 443
Stock purchase plan, exercise of stock
options and other (1,206) 5,372 4,166
Cash dividends, declared or paid ($.04
per share) (2,698) (2,698)
------- -------- -------- ------- -------- ------- --------
Balance, May 30, 1998 $67,903 $165,618 $178,148 ($1,315) ($17,634) ($2,641) $390,079
======= ======== ======== ======= ======= ===== ========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
PIER 1 IMPORTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MAY 30, 1998 AND MAY 31, 1997
(Unaudited)
The accompanying unaudited financial statements should be read in
conjunction with the Form 10-K for the year ended February 28, 1998. All
adjustments that are, in the opinion of management, necessary for a fair
statement of the financial position as of May 30, 1998, and the results of
operations and cash flows for the three months ended May 30, 1998 and May 31,
1997 have been made and consist only of normal recurring adjustments. The
results of operations for the three months ended May 30, 1998 and May 31,
1997 are not indicative of results to be expected for the fiscal year because
of, among other things, seasonality factors in the retail business. The
classifications of certain amounts previously reported in the statement of
cash flows for the three months ended May 31, 1997 have been modified to
conform with the May 30, 1998 method of presentation.
Note 1 - Net income per share
Basic net income per share was determined by dividing net income by
the weighted average number of common shares outstanding. Diluted net income
per share amounts are similarly computed, but include the effect, when
dilutive, of the Company's weighted average number of stock options
outstanding and the average number of common shares that would be issuable
upon conversion of the Company's convertible securities. To determine
dilutive net income, interest and debt issue costs, net of any applicable
taxes, have been added back to net income to reflect assumed conversions.
Net income per share for the three months ended May 30, 1998 and May
31, 1997 (adjusted for the stock split effected in the form of a stock
dividend declared June 25, 1998) are calculated as follows:
Three Months Ended
May 30, May 31,
1998 1997
------- -------
(in thousands except per share amounts)
Net income $15,501 $12,639
Assumed conversion of 5 3/4% subordinated
notes:
Plus interest and debt issue costs,
net of tax 838 811
------- -------
Diluted net income $16,339 $13,450
======= =======
Average shares outstanding during period:
Basic 100,936 100,903
Plus assumed exercise of stock options 1,621 1,107
Plus assumed conversion of 5 3/4%
subordinated notes to common stock 10,489 10,490
------- -------
Diluted 113,046 112,500
======= =======
Net income per share:
Basic $.15 $.13
==== ====
Diluted $.14 $.12
==== ====
Note 2 - Subsequent event - three for two stock split
In June 1998, the Company announced a three for two stock split of its
common shares distributable to shareholders of record on July 15, 1998. The
stock split will be effected in the form of a 50% stock dividend. The new
shares will be distributed on July 29, 1998. All per share amounts have been
adjusted to reflect the impact of the stock split. The effect of this stock
split has not been reflected in the May 30, 1998 consolidated balance sheet.
Additionally, the Company announced a 12.5% effective increase in the
Company's quarterly cash dividend on the post split shares. The cash
dividend of $.03 will be paid August 26, 1998 to shareholders of record on
August 12, 1998.
Note 3 - Adoption of new accounting standards
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 130, "Reporting
Comprehensive Income." This standard was adopted by the Company in the first
quarter of fiscal 1999. SFAS No. 130 establishes new rules for the reporting
and display of comprehensive income and its components, which for the Company
includes foreign currency translation adjustments. The impact of the
adoption of this statement was primarily limited to the form and content of
the disclosures on the Company's consolidated balance sheets and statement of
stockholders' equity with no impact to the Company's financial position or
net income. The May 31, 1997 first quarter financial statements have been
reclassified to conform to the requirements of SFAS No. 130.
The components of comprehensive income, net of related tax, for the
first quarter of fiscal 1999 and 1998 are as follows:
Three Months Ended
May 30, May 31,
1998 1997
------- -------
(in thousands)
Net income $15,501 $12,639
Foreign currency translation adjustments (207) (15)
------- -------
Comprehensive income $15,294 $12,624
======= =======
<PAGE>
PART I
------
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
For the first quarter of fiscal 1999, Pier 1 Imports, Inc. ("the
Company") recorded net sales of $250.5 million, a 9.3% increase over the
$229.2 million recorded for the same period in fiscal 1998. Same-store sales
for the first quarter of fiscal 1999 increased 8.3% compared to the first
quarter of fiscal 1998. The growth in same-store sales is primarily a result
of the Company's expanded network television advertising campaign, which
added more networks to the previous advertising schedule, and the increasing
number of remodeled and remerchandised stores. Additionally, the Company
initiated a new credit card program which enables customers to make lower
periodic payments on big ticket purchases. This new credit card program
fueled hard goods sales on furniture and decorative accessories with
increases of 14.4% and 13.4%, respectively, for the first quarter of fiscal
1999 compared to the first quarter of fiscal 1998. Sales on the Company's
proprietary credit card totaled $65.9 million for the first three months of
fiscal 1999, an increase of $5.2 million, or 8.5% over the same period of
fiscal 1998. The Company opened five new stores and closed six stores in
North America during the first quarter of fiscal 1999. After a two year
testing period, the Company decided not to proceed with the concept of mall-
based stores operating under the name "The Market of Pier 1." The remaining
eight test stores were closed during the first quarter of fiscal 1999
bringing the North American store count to 709 at the end of the quarter
compared to 689 stores a year earlier. Stores worldwide, including North
America, Puerto Rico, the United Kingdom, Mexico and Japan, totaled 754 at
the fiscal 1999 first quarter-end.
Gross profit, after related buying and store occupancy costs,
expressed as a percentage of sales, increased 50 basis points to 43.8% for
the first quarter of fiscal 1999 compared to 43.3% for the first quarter of
fiscal 1998. These increases are principally the result of higher
merchandise margins on certain items, particularly furniture and decorative
accessories, offset partially by a slight increase in clearance and
promotional markdowns. Store occupancy costs, as a percentage of sales,
declined to 13.1% during the first three months of fiscal 1999 from 13.3% for
the comparable period of fiscal 1998. This improvement is primarily due to
leveraging relatively fixed store rental rates over a higher sales base.
Selling, general and administrative expenses, including marketing, as
a percentage of sales, improved 40 basis points to 30.5% in the first quarter
of fiscal 1999 compared to the same period a year earlier. In total dollars,
expenses for the first quarter of fiscal 1999 increased $5.4 million over the
first quarter of fiscal 1998. Expenses that normally grow proportionately
with sales and net new stores, such as store salaries, equipment rental,
supplies and marketing, grew by $5.9 million, a 60 basis point increase over
the first quarter of last year as a percentage of sales. These variable
expenses increased primarily due to a 40 basis point increase in marketing
expenses related to the timing of the Company's national television
advertising expenses coupled with the introduction of a major seasonal direct
mail piece. In addition, other selling, general and administrative expenses
grew in the first quarter of fiscal 1999 by $2.7 million related to non-store
compensation costs, offset by a $1.9 million decrease in net proprietary
credit card costs. All other selling, general and administrative expenses
decreased by $1.3 million.
Operating income increased $3.6 million, or 15.8%, to $26.4 million
for the first quarter of fiscal 1999 compared to $22.8 million in the first
quarter of fiscal 1998.
During the first quarter of fiscal 1999, net interest expense declined
$.3 million primarily as a result of increased interest income on higher cash
balances and short-term investments.
The Company's effective income tax rate for fiscal 1999 is estimated
at 38% compared to 40% recorded in the first quarter of fiscal 1998. The
decline in the estimated effective income tax rate is a result of favorable
resolution of a number of federal tax issues as well as state income tax
benefits resulting from certain operational initiatives.
Net income for the first quarter of fiscal 1999 was $15.5 million or
$.14 per share on a diluted basis compared to net income of $12.6 million or
$.12 per share on a diluted basis for the first quarter of fiscal 1998.
These per share amounts have been adjusted to reflect the impact of the three
for two stock split declared June 25, 1998. See: Note 2 of the Notes to
Consolidated Financial Statements.
Liquidity and Capital Resources
Cash, including temporary investments, decreased $23.3 million to
$57.4 million at the end of the first quarter of fiscal 1999 from $80.7
million at fiscal 1998 year-end. This decrease is primarily due to capital
expenditures of $24.3 million, repurchases of the Company's common stock in
open market transactions of $14.7 million and cash dividend payments of $2.7
million. These cash expenditures were partially offset by cash flow from
operations of $13.4 million and decreased beneficial interest in securitized
receivables of $2.6 million. Other investing and financing activities
provided cash of $2.4 million.
During fiscal 1999, the Company estimates capital expenditures to be
approximately $80 million, with the majority of these expenses related to the
Company's store development plans for new and existing locations, including
various store-related technology investments. In the first quarter of fiscal
1999, capital expenditures were $24.3 million. Capital expenditures are
expected to continue to be funded by operations, working capital and bank
lines of credit.
The Company expects working capital requirements will continue to be
funded through cash flow from operations, sales of proprietary credit card
receivables and bank lines of credit. The bank facilities consist of a
committed $65 million competitive advance and revolving credit facility,
which expires in December 1998, all of which was available at the end of the
first quarter of fiscal 1999, other short-term (12-month) bank facilities
used principally for the issuance of letters of credit totaling $146.1
million, $60.6 million of which was available at the end of the first quarter
of fiscal 1999, and other long-term bank facilities of $32.1 million. At the
end of the first quarter of fiscal 1999, the short-term bank facilities
consisted of $4.8 million of committed lines of credit and $141.3 million of
uncommitted lines, while the long-term facilities consisted of $25.6 million
of committed lines of credit and $6.5 million in uncommitted lines. The
Company expects to replace the competitive advance and revolving credit
facility, prior to the existing facility's expiration date, with a five year
$125 million facility that will have substantially similar or better terms.
Additionally, Pier 1 Imports Credit Card Master Trust has issued Series 1997-
2 variable funding certificates maturing October 2002 that provide for a
maximum outstanding principal balance of $50 million. At the end of the
first quarter of fiscal 1999, approximately $9 million was available to be
drawn against the variable funding certificates, and as of May 30, 1998, no
amounts had been drawn against such certificates. The Company's current
ratio at the end of the first quarter of fiscal 1999 was 3.1 to 1 compared to
3.3 to 1 at the end of fiscal 1998.
At the end of fiscal 1998, the Company had utilized commitments from
an unaffiliated party to make available up to $23.6 million for the
development or acquisition of store properties for lease to the Company.
This facility was to expire on June 15, 1998. Prior to the expiration date,
the Company arranged alternative financing by entering into lease agreements
with another unaffiliated party for these store properties. The Company's
minimum operating lease commitments remaining for fiscal 1998 are $74.5
million, and the present value of total existing minimum operating lease
commitments is $398 million. The Company expects to fund these commitments
from operating cash flow.
The Company continues to guarantee certain nursery store leases of
Wolfe Nursery, Inc. ("Wolfe"), a subsidiary of Sunbelt Nursery Group, Inc.
("Sunbelt"). These commitments totaled $2.1 million at the end of the first
quarter of fiscal 1999. In April 1998, Sunbelt initiated bankruptcy
proceedings and as of June 30, 1998, all of the leases were rejected by Wolfe
in these proceedings. The Company believes it has accrued sufficient amounts
to cover any deficiencies in payments on these store lease commitments as a
result of Wolfe's defaults on these leases and its bankruptcy. Any cash
payments to satisfy these guarantees are expected to be funded through
working capital and operations.
In April 1998, the Board of Directors approved the purchase of up to
three million shares of the Company's outstanding common stock. During the
first three months of fiscal 1999, the Company repurchased approximately
698,100 shares of its common stock in open market transactions for
approximately $17.6 million, of which $14.7 million was paid in the first
quarter of fiscal 1999. In addition, approximately 93,000 shares of common
stock were acquired as payment for the exercise of employee stock options.
As of June 30, 1998, the Company has repurchased approximately 2,189,400
shares in open market transactions for approximately $51.9 million.
In June 1998, the Company announced a three for two stock split of its
common shares distributable July 29, 1998 to shareholders of record on July
15, 1998. The stock split will be effected in the form of a 50% stock
dividend. All per share amounts have been adjusted to reflect the impact of
the stock split. The effect of this stock split has not been reflected in
the May 30, 1998 consolidated balance sheet.
In the first quarter of fiscal 1999, the Company paid a $.04 per share
cash dividend and in June 1998 declared a cash dividend of $.03 per share, a
12.5% effective increase in the Company's quarterly cash dividend on the post
split shares, payable on August 26, 1998 to shareholders of record on August
12, 1998. The Company currently expects to continue to pay cash dividends in
fiscal 1999 but to retain most of its future earnings for expansion of the
Company's business.
In June 1998, Standard & Poor's ("S&P") raised the Company's corporate
credit rating to an investment grade of BBB-. In addition, S&P raised the
Company's convertible subordinated debt rating to BB+ from BB-. The
investment grade rating should provide the Company the opportunity to obtain
more favorable interest rates as well as provide an advantage in lease
agreement negotiations on new stores.
Impact of Year 2000 Issues
The Company is in the process of reviewing and addressing its computer
systems with regard to the year 2000 issue. The Company has conducted an
initial review of its computer systems to identify those areas both
internally and externally that could be affected by the year 2000 issue and
has engaged consultants to review its assessments and implementation
strategies. The year 2000 project has been divided into five phases: 1)
awareness, 2) assessment, 3) renovation, 4) validation and 5) implementation.
The Company's systems are in various stages of these phases; some of the
systems have completed the implementation phase and are running in
production. The Company plans to complete the assessment phase of its year
2000 project in the second quarter of fiscal 1999. The Company's strategy
also includes development of contingency plans for critical business
processes in the event of a compliance failure on the part of the Company or
any of its business partners.
Additionally, the Company is in the process of communicating with
service providers and suppliers of merchandise in order to assess their year
2000 readiness and the extent to which the Company may be vulnerable to any
third parties' failure to remediate their own year 2000 issues. If necessary
modifications and conversions by other companies on whose systems the
Company's business processes rely are not completed on time, the year 2000
issue may have an adverse effect on the Company's operations. The areas of
greatest risk include communications systems and elements of the merchandise
supply chain, including procurement, transportation, and import activities.
The Company plans to continue to rely primarily on internal resources
in order to identify, correct or reprogram and test systems for year 2000
compliance. Costs incurred to date for year 2000 remediation have totaled
approximately $1 million, the majority of which consisted of normal salaries
paid to existing employees; such costs were consistent with the Company's
operating budget and have not had a material effect on the results of
operations in any period or on liquidity or financial position. Remaining
remediation costs are not expected to exceed $3 million over the next seven
quarters. Cost estimates will be further refined as the assessment phase
nears completion. Contingency plans include arrangements for engaging
external resources to assist in remediation efforts if necessary.
Significant utilization of such outside resources, although not expected,
could cause remediation costs to increase above the Company's estimates. The
Company's plan provides for internal compliance of all mission-critical
systems by mid-1999.
Impact of Inflation
Inflation has not had a significant impact on the operations of the
Company.
<PAGE>
PART II
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Item 2. Changes in Securities.
---------------------
The Company's Certificate of Incorporation was amended,
effective June 29, 1998 to increase the authorized number of shares of common
stock from 200,000,000 to 500,000,000.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
The Annual Meeting of Shareholders of the Company was held June
25, 1998 for the purpose of electing six (6) Directors to hold office until
the next Annual Meeting of Shareholders and to vote upon the proposed
amendment to the Company's certificate of incorporation. The result of this
vote follows:
Director Election
-----------------
Director FOR WITHHELD
-------- --- --------
Clark A. Johnson 59,465,336 106,149
Marvin J. Girouard 59,478,807 92,678
Martin L. Berman 59,462,781 108,704
Craig C. Gordon 59,480,320 91,165
James M. Hoak, Jr. 59,480,814 90,671
Sally F. McKenzie 59,446,662 124,823
Proposed Amendment to the Company's Certificate of Incorporation
----------------------------------------------------------------
For Against Abstained
--- ------- ---------
36,910,324 22,562,654 98,507
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits See Exhibit Index.
(b) Reports on Form 8-K None.
<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 14, 1998 By: /s/ Marvin J. Girouard
------------- --------------------------------------------
Marvin J. Girouard, President
and Chief Executive Officer
(Principal Executive Officer)
Date: July 14, 1998 By: /s/ Stephen F. Mangum
------------- -------------------------------------------
Stephen F. Mangum, Senior Vice President
and Chief Financial Officer
(Principal Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
3(i) Certificate of Incorporation and Amendments thereto.
27 Financial Data Schedule for Three-Month Period ended May 30,
1998.
EXHIBIT 3(i)
CERTIFICATE OF INCORPORATION
OF
PIER 1 IMPORTS, INC.
The undersigned, in order to form a corporation for the
purposes hereinafter stated, under and pursuant to the provisions of the
General Corporation Law of the State of Delaware, does hereby certify as
follows:
FIRST: The name of the corporation is
PIER 1 IMPORTS, INC.
SECOND: The registered office of the corporation is to be
located at 1209 Orange Street, in the City of Wilmington in the County of New
Castle, in the State of Delaware. The name of its registered agent at such
address is The Corporation Trust Company.
THIRD: The purpose for which the corporation is formed is to
engage in any lawful act or activity for which a corporation may be organized
under the General Corporation Law of the State of Delaware.
FOURTH: The number of shares of stock which the corporation
shall have authority to issue is Twenty-Five Million (25,000,000) shares of
Common Stock having a par value of One Dollar ($1.00) per share and One
Million (1,000,000) shares of Preferred Stock having a par value of One
Dollar ($1.00) per share.
The Board of Directors is authorized, subject to limitations
prescribed by law and the provisions of this Article FOURTH, to provide for
the issuance of the shares of Preferred Stock in one or more series, and by
filing a certificate pursuant to the applicable law of the State of Delaware,
to establish from time to time the number of shares to be included in each
such series, and to fix such voting powers, full or limited, or no voting
powers, and such designations, preferences and relative, participating,
optional or other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each series shall
include, but not be limited to, determination to the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and if so, from which date or dates, and the
relative rights of priority, if any, of payment of dividends on shares of
that series;
(c) Whether that series shall be convertible into, or
exchangeable of any other class or series, and, if so, the terms and
conditions of such conversion or exchange, including provisions for
adjustment of the conversion or exchange rate in such events as the Board of
Directors shall determine;
(d) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution, distribution of assets or
winding up of the corporation, and the relative rights of priority, if any,
of payment of shares of that series;
(e) Whether or not the shares of that series shall be
redeemable for cash property or other rights, and, if so, the terms and
conditions of such redemption, including the date or dates upon or after
which they shall be redeemable;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the terms and
amount of such sinking fund;
(g) Any other relative rights, preferences and limitations
of that series.
Dividends on outstanding shares of Preferred Stock shall be
paid or declared and set apart for payment, before any dividends shall be
paid or declared and set apart for payment, on the Common Stock with respect
to the same dividend period.
FIFTH: The name and address of the Sole Incorporator is as
follows:
NAMEADDRESS
J. Rodney LawrencePier 1 Inc.
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
SIXTH: The number of directors of the corporation shall be
such as from time to time shall be fixed by, or in the manner provided in,
the bylaws. Election of directors need not be by written ballot unless the
bylaws so provide.
SEVENTH: The corporation shall have the power, to the full
extent permitted by Section 145 of the General Corporation Law of the State
of Delaware, as amended from time to time, to indemnify each director,
officer, employee or agent who serves or has served the corporation and each
director, officer, employee or agent who serves or has served at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise.
EIGHTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to
adopt, amend or repeal the bylaws of the corporation.
NINTH: The corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation
in the manner now or hereafter prescribed by law, and all rights and powers
conferred herein on stockholders, directors and officers are subject to this
reserved power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and
seal this 28th day of April, 1986.
/s/ J. Rodney Lawrence
Sole Incorporator
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
PIER 1 IMPORTS, INC.
Pier 1 Imports, Inc. (the "Company"), a corporation organized
and existing under and by virtue of the General Corporation Law of the State
of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of the
Company held on March 25, 1987, resolutions were duly adopted setting forth
the following proposed amendments of the Certificate of Incorporation of the
Company, and directing that they be submitted to the stockholders at the next
annual meeting of stockholders:
A. That Article Seventh of the Company's Certificate of
Incorporation be amended to read as follows:
"SEVENTH: (a) Limitation on Certain
Liability of Directors and Officers. A
director or officer of the corporation shall
not be personally liable to the corporation
or its stockholders for monetary damages for
breach of fiduciary duty as a director or
officer, except for liability (i) for any
breach of the director's or officer's duty of
loyalty to the corporation or its
stockholders, (ii) for acts or omissions not
in good faith or which involve intentional
misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware
General Corporation Law, or (iv) for any
transaction from which the director or
officer is found by a court of law to have
derived an improper personal benefit.
(b) Right to Indemnification. Each person
who was or is made a party or is threatened
to be made a party to or is involved in any
action, suit or proceeding, whether civil,
criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of
the fact that he or she, or a person of whom
he or she is the legal representative, is or
was a director or officer of the corporation,
or is or was serving at the request of the
corporation as a director, officer, employee
or agent of another corporation or of a
partnership, joint venture, trust or other
enterprise, including service with respect to
employee benefit plans, whether the basis of
such proceeding is alleged action in an
official capacity as a director, officer,
employee or agent or in any other capacity
while serving as a director, officer,
employee or agent, shall be indemnified and
held harmless by the corporation to the
fullest extent authorized by the Delaware
General Corporation Law, as the same exists
or may hereafter be amended (but, in the case
of any such amendment, only to the extent
that such amendment permits the corporation
to provide broader indemnification rights
than said law permitted the corporation to
provide prior to such amendment), against all
expense, liability and loss including
attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred
or suffered by such person in connection
therewith and such indemnification shall
continue as to a person who has ceased to be
a director, officer, employee or agent and
shall inure to the benefit of his or her
heirs, executors and administrators; provided
however, that, except as provided in
paragraph (c) hereof, the corporation shall
indemnify any such person seeking
indemnification in connection with a
proceeding (or part thereof) initiated by
such person only if such proceeding (or part
thereof) was authorized by the Board of
Directors of the corporation. The right to
indemnification conferred in this Article
shall be a contract right and shall include
the right to be paid by the corporation the
expenses incurred in defending any such
proceeding in advance of its final
disposition; provided however, that if the
Delaware General Corporation Law requires,
the payment of such expenses incurred by a
director or officer in his or her capacity as
a director or officer (and not in any other
capacity in which service was or is rendered
by such person while a director or officer,
including, without limitation, service to an
employee benefit plan) in advance of the
final disposition of a proceeding, shall be
made only upon delivery to the corporation of
an undertaking, by or on behalf of such
director or officer, to repay all amounts so
advanced if it shall ultimately be determined
that such director or officer is not entitled
to be indemnified under this Article or
otherwise. The corporation may, by action of
its Board of Directors, provide
indemnification to other employees or agents
of the corporation with the same scope and
effect as the foregoing indemnification of
directors and officers.
(c) Right of Claimant to Bring Suit. If a
claim under paragraph (b) of this Article is
not paid in full by the corporation within
forty-five days after a written claim has
been received by the corporation, the
claimant may at any time thereafter bring
suit against the corporation to recover the
unpaid amount of the claim and, if successful
in whole or in part, the claimant shall be
entitled to be paid also the expense of
prosecuting such claim. It shall be a
defense to any such action (other than an
action brought to enforce a claim for
expenses incurred in defending any proceeding
in advance of its final disposition where the
required undertaking, if any is required, has
been tendered to the corporation) that the
claimant has not met the standards of conduct
which make it permissible under the Delaware
General Corporation Law for the corporation
to indemnify the claimant for the amount
claimed, but the burden of proving such
defense shall be on the corporation. Neither
the failure of the corporation (including its
Board of Directors, independent legal
counsel, or its stockholders) to have made a
determination prior to the commencement of
such action that indemnification of the
claimant is proper in the circumstances
because he or she has met the applicable
standard of conduct set forth in the Delaware
General Corporation Law, nor an actual
determination by the corporation (including
its Board of Directors, independent legal
counsel, or its stockholders) that the
claimant has not met such applicable standard
of conduct, shall be a defense to the action
or create a presumption that the claimant has
not met the applicable standard of conduct.
(d) Non-Exclusivity of Rights. The right to
indemnification and the payment of expenses
incurred in defending a proceeding in advance
of its final disposition conferred in this
Article shall not be exclusive of any other
right which any person may have or hereafter
acquire under any statute, provision of the
Certificate of Incorporation, bylaw,
agreement, vote of stockholders or
disinterested directors or otherwise.
(e) Insurance. The corporation may maintain
insurance, at its expense, to protect itself
and any director, officer, employee or agent
of the corporation or another corporation,
partnership, joint venture, trust or other
enterprise against any such expense,
liability or loss, whether or not the
corporation would have the power to indemnify
such person against such expense, liability
or loss under the Delaware General
Corporation Law."
B. That the first paragraph of Article Fourth of the
Company's Certificate of Incorporation be amended to read as
follows:
"FOURTH: The number of shares of stock which
the corporation shall have authority to issue
is One Hundred Million (100,000,000) shares
of Common Stock having a par value of One
Dollar ($1.00) per share and Five Million
(5,000,000) shares of Preferred Stock having
a par value of One Dollar ($1.00) per share."
SECOND: That thereafter, pursuant to resolution of its Board
of Directors, an annual meeting of the stockholders of the Company was duly
called and held on June 24, 1987 upon notice in accordance with Section 222
of the General Corporation Law of the State of Delaware, at which meeting the
necessary number of shares as required by statute were voted in favor of the
amendments.
THIRD: That such amendments were duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law of the
State of Delaware.
FOURTH: That the capital of the Company shall not be reduced
under or by reason of such amendments.
IN WITNESS WHEREOF, Pier 1 Imports, Inc. has caused this certificate to be
signed and attested by its duly authorized officers, this 1st day of July,
1987.
PIER 1 IMPORTS, INC.
By: /s/ Clark A. Johnson
Clark A. Johnson, President
ATTEST:
/s/ J. Rodney Lawrence
J. Rodney Lawrence, Secretary
<PAGE> CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PIER 1 IMPORTS, INC.
Pier 1 Imports, Inc., a Delaware corporation (the
"Corporation"), pursuant to Section 242 of the General Corporation Law of the
State of Delaware hereby certifies that:
FIRST: On August 6, 1987, the Board of Directors of the
Corporation, acting by unanimous consent in accordance with the General
Corporation Law of the State of Delaware and the By-laws of the Corporation,
adopted the following resolution setting forth and recommending a proposed
amendment to the Certificate of Incorporation of the Corporation, as amended
by the Certificate of Designation filed by the Corporation on February 17,
1987 with respect to the Corporation's $.25 Preferred Stock:
RESOLVED, that the Board of Directors hereby adopts and
declares advisable the following amendments to the Company's Certificate of
Incorporation, as amended by the Certificate of Designation filed by the
Company on February 17, 1987 with respect to the Company's $.25 Preferred
Stock (the "Certificate of Designation"):
The designation of the Company's $.25 Preferred Stock is
amended so that it shall be "Formula Rate Preferred Stock,"
and the text of the Certificate of Designation is amended to
read in its entirety as follows:
"RESOLVED: That pursuant to authority conferred upon the
Board of Directors by the Certificate of Incorporation of the
Company, the Board of Directors hereby authorizes the
issuance of up to 5,000,000 shares of the Preferred Stock of
the Company, and hereby fixes the designation, powers,
preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or
restrictions thereof, of such shares, in addition to those
set forth in the Certificate of Incorporation, as follows:
(a) The initial series of Preferred Stock shall be designated
Formula Rate Preferred Stock.
(b) The number of shares constituting the Formula Rate
Preferred Stock shall be 5,000,000 shares.
(c) The Formula Rate Preferred Stock shall have a Par value
of $1.00 Per share.
(d) In the event of a voluntary or involuntary liquidation,
dissolution, or winding up of the Company, the holders of
Formula Rate Preferred Stock shall be entitled to receive,
out of the assets of the Company, whether such assets are
capital or surplus, an amount equal to $.66 2/3 per share of
Formula Rate Preferred Stock (the "Liquidation Preference"),
before any payment shall be made or any assets distributed to
the holders of Common Stock; provided, however, that in the
event the Company effects a stock split, either by way of a
lawful stock dividend to the holders of, or a
reclassification of the shares of, the Formula Rate Preferred
Stock, then the amount of the Liquidation Preference per
share which the holders of the Formula Rate Preferred Stock
shall be entitled to receive shall be adjusted to be equal to
the Liquidation Preference then in effect for shares of
Formula Rate Preferred Stock multiplied by a fraction the
numerator of which is the number of shares of Formula Rate
Preferred Stock outstanding immediately prior to the
distribution of shares (in the case of a stock split by way
of a stock dividend) or the effectiveness of the stock split
(in the case of a stock split by way of a reclassification of
shares) and the denominator of which is the number of shares
of Formula Rate Preferred Stock outstanding immediately after
such stock split. If upon such liquidation, dissolution, or
winding up of the Company the assets thus distributed among
the holders of Formula Rate Preferred Stock shall be
insufficient to permit the payment to such stockholders of
the full preferential amounts aforesaid, then the entire
assets of the Company are to be distributed ratably among the
holders of Formula Rate Preferred Stock. After payment or
distribution to the holders of Formula Rate Preferred Stock
of the full preferential amounts aforesaid, the holders of
Common Stock shall be entitled to receive, ratably, all
remaining assets of the Company. A consolidation or merger
of the Company with or into any other corporation or
corporations, or a sale of all or substantially all of the
assets of the Company, shall not be deemed to be a
liquidation, dissolution, or winding up within the meaning of
this paragraph.
(e) The holders of the Formula Rate Preferred Stock shall be
entitled to receive, subject only to the availability of
funds legally available therefor, a cumulative annual cash
dividend in the sum of Sixteen and Two-Thirds Cents ($.16
2/3) per share, and no more, which shall be payable in one or
more installments, when and as may be declared by the Board
of Directors from time to time; provided, however, that in
the event the Company effects a stock split, either by way of
a lawful stock dividend to the holders of, or a
reclassification of the shares of, the Formula Rate Preferred
Stock, then the amount of dividend per share which the
holders of the Formula Rate Preferred Stock shall be entitled
to receive shall be adjusted to be equal to the per share
dividend then in effect for shares of Formula Rate Preferred
Stock multiplied by a fraction the numerator of which is the
number of shares of Formula Rate Preferred Stock outstanding
immediately prior to the distribution of shares (in the case
of a stock split by way of a stock dividend) or the
effectiveness of the stock split (in the case of a stock
split by way of a reclassification of shares) and the
denominator of which is the number of shares of Formula Rate
Preferred Stock outstanding immediately after such stock
split. The resulting dividend rate shall hereinafter be
referred to as the "Formula Rate." Dividends on the Formula
Rate Preferred Stock shall begin to accrue at the Formula
Rate from and after the date upon which the shares of stock
are distributed (in the case of a stock split by way of a
stock dividend) or the reclassification becomes effective (in
the case of a stock split by way of reclassification of
shares). In the event of any such adjustment the Company
shall (i) prepare a certificate setting forth the calculation
of the Formula Rate which certificate shall be kept by the
Secretary of the Company and made available to any holder of
Formula Rate Preferred Stock who requests such certificate,
and (ii) notify holders of such stock of the adjustment. The
Formula Rate shall continue in effect unless and until the
Company effects another stock split, in which case the
Formula Rate shall be further adjusted pursuant to the
procedure set forth above. Except as provided in this
subparagraph (e), the holders of Formula Rate Preferred Stock
shall not be entitled to receive or participate in any cash
dividends which may be declared by the Board of Directors or
paid by the Company.
(f) The holders of the Formula Rate Preferred Stock are
entitled to vote with the holders of the Common Stock as a
single class, as follows:
1. On matters subject to a vote by holders of Common Stock
the holders of Formula Rate Preferred Stock shall be entitled
to ten (10) votes per share, voting as a single class
together with the Common Stock, which is entitled to one vote
per share.
2. The affirmative vote of at least two-thirds of the shares
of the Formula Rate Preferred Stock, voting as a single
class, shall be required (i) to authorize, effect or validate
any amendment, alteration or repeal of any of the provisions
of the Company's Certificate of Incorporation which would
adversely affect the preferences, special rights or powers of
the Formula Rate Preferred Stock (provided, however, that an
amendment that would authorize or create or increase the
authorized number of shares of any stock ranking junior to
the Formula Rate Preferred Stock shall not be deemed to
adversely affect the preferences, rights or powers of the
Formula Rate Preferred Stock); or (ii) to authorize,
designate or create, or increase the authorized number of
shares of, any capital stock of the Company of any class or
series, or any security convertible into such capital stock,
ranking prior to the Formula Rate Preferred Stock as to
dividends or rights upon liquidation, dissolution or winding
up. In addition, the affirmative vote of the holders of at
least a majority of the Formula Rate Preferred Stock, voting
as a single class, shall be required to authorize, designate
or create or increase the authorized number of shares of, any
class or series of capital stock of the Company or any
security convertible into capital stock of the Company of any
class ranking on a parity with the Formula Rate Preferred
Stock as to dividends and liquidation rights. No affirmative
vote or consent of the holders of the Formula Rate Preferred
Stock is required for the creation, designation or
classification of, or an increase or decrease in the number
of shares of, Formula Rate Preferred Stock out of presently
authorized shares of Preferred Stock.
3. Whenever the cumulative annual dividend on the Formula
Rate Preferred Stock shall be in arrears for as much as one
calendar year, the number of directors of the Company shall
be increased by two, and the holders of the Formula Rate
Preferred Stock shall have, in addition to any other voting
rights, the exclusive and special right, voting separately as
a class, to elect by the affirmative vote of the holders of
at least a majority of the Formula Rate Preferred Stock, two
persons to fill such newly created directorships. Whenever
such right of the holders of the Formula Rate Preferred Stock
shall have vested, it may be exercised initially either at a
special meeting of such holders called as provided below, or
at any annual meeting of stockholders, and thereafter at
annual meetings of stockholders. This special voting right
shall continue until such time as all dividends accumulated
on the Formula Rate Preferred Stock shall have been paid in
full, at which time the special right shall terminate,
subject to revesting in the event of each and every
subsequent default in an annual dividend which continues for
as much as one calendar year. For purposes only of this
subparagraph (3) of this paragraph (f), each holder of
Formula Rate Preferred Stock shall be entitled to cast one
vote for each share of Formula Rate Preferred Stock held by
such holder. At any time when such special voting power
shall have vested in the holders of the shares of Formula
Rate Preferred Stock as provided in this subparagraph (3), a
proper officer of the Company shall, upon the written request
of the holders of record of at least 10% of the number of
shares of Formula Rate Preferred Stock at the time
outstanding, addressed to the Secretary of the Company, call
a special meeting of the holders of shares of Formula Rate
Preferred Stock and of any other class of stock having voting
power, for the purpose of electing directors. Such meeting
shall be held at the earliest practicable date at the
principal office of the Company. If such meeting shall not
be called by a proper officer of the Company within 20 days
after personal service of said written request upon the
Secretary of the Company, or within 20 days after mailing the
same within the United States of America by registered mail
addressed to the Secretary of the Company at its principal
office, then the holders of record of at least 10% of the
number of shares of Formula Rate Preferred Stock at the time
outstanding may designate in writing one of their numbers to
call such meeting at the expense of the Company, and such
meeting may be called by such person so designated upon the
notice required for annual meetings of stockholders and shall
be held at said principal office. Any holder of shares of
Formula Rate Preferred Stock so designated shall have access
to the stock books of the Company for the purpose of causing
meetings of stockholders to be called pursuant to these
provisions. Notwithstanding the provisions of this
subparagraph (3), no such special meeting shall be called
during the 90 days immediately preceding the date fixed for
the next annual meeting of stockholders. At any meeting held
for the purpose of electing directors at which the holders of
shares of Formula Rate Preferred Stock shall have the special
right, voting separately as a class, to elect directors as
provided in this subparagraph (3), the presence, in person or
by proxy, of the holders of a majority of the number of
shares of Formula Rate Preferred Stock at the time
outstanding shall be required to constitute a quorum of such
class for the election of any director by the holders of the
Formula Rate Preferred Stock as a class, each share of
Formula Rate Preferred Stock counting, for purposes only of
determining the presence of such a quorum, as one share of
Formula Rate Preferred Stock. At any such meeting or
adjournment thereof, (i) the absence of a quorum of Formula
Rate Preferred Stock shall not prevent the election of the
directors other than the two directors to be elected by the
holders of shares of Formula Rate Preferred Stock voting as a
class and the absence of a quorum for the election of such
other directors shall not prevent the election of the
directors to be elected by holders of shares of Formula Rate
Preferred Stock voting as a class and (ii) in the absence of
either or both such quorums, a majority of the holders
present in person or by proxy of the stock or stocks which
lack a quorum shall have power to adjourn the meeting for the
election of directors which they are entitled to elect from
time to time, without notice other than announcement at the
meeting, until a quorum shall be present. During any period
the holders of shares of Formula Rate Preferred Stock have
the right to vote as a class for the directors as provided in
this subparagraph (3), the directors so elected by the
holders of the Formula Rate Preferred Stock shall continue in
office until termination of the right of the holders of the
Formula Rate Preferred Stock to vote as a class for two
directors, and any vacancies in the Board of Directors shall
be filled only by vote of a majority (which majority may
consist of only a single director) of the remaining directors
theretofore elected by the class or classes of stock which
elected the director whose office shall have become vacant.
(g) The Company shall have the right, but not the obligation,
to redeem on or at any time after February 1, 1990 (the date
on which the Company gives notice for such redemption is
called the "Redemption Date") all, but not less than all, of
the shares of the Formula Rate Preferred Stock which are
issued and outstanding as of the Redemption Date, upon the
payment of the sum of $1.66 2/3 in cash for each outstanding
share of the Formula Rate Preferred Stock (the "Redemption
Price"); provided, however, that in the event the Company
effects a stock split, either by way of lawful stock dividend
to the holders of, or a reclassification of the shares of,
the Formula Rate Preferred Stock, then the Redemption Price
shall be adjusted to an amount per share equal to ten (10)
times the Formula Rate, as determined pursuant to the
procedure set forth in paragraph (e) of this Certificate of
Designation, such adjusted Redemption Price to take effect
from and after the date upon which such Formula Rate shall
take effect. In the event of any such adjustment the Company
shall (i) prepare a certificate setting forth the calculation
of the adjusted Redemption Price, which certificate shall be
kept by the Secretary of the Company and made available to
any holder of Formula Rate Preferred Stock who requests such
certificate, and which may be set forth in the same
certificate as required by paragraph (e) of this Certificate
of Designation, and (ii) notify holders of such stock of the
adjustment. Payment of the Redemption Price shall be made
within 30 days following the Redemption Date to the holders
of record as of the Redemption Date.
(h) On the Redemption Date the Company shall, and before such
Redemption Date the Company may, deposit for the pro rata
benefit of the holders of the shares of the Formula Rate
Preferred Stock so called for redemption the funds necessary
for such redemption with a bank or trust company in the
Borough of Manhattan, The City of New York having a capital
and surplus of at least $50,000,000. Any monies so deposited
by the Company and unclaimed at the end of five years from
the Redemption Date shall revert to the general funds of the
Company. After such reversion, any such bank or trust
company shall, upon demand, pay over to the Company such
unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof to
such holder and such holder shall look only to the Company
for the payment of the Redemption Price. Any interest
accrued on funds so deposited pursuant to this paragraph (h)
shall be paid from time to time to the Company for its own
account.
(i) Upon the deposit of funds pursuant to paragraph (h) in
respect of shares of the Formula Rate Preferred Stock called
for redemption, notwithstanding that any certificates for
such shares shall not have been surrendered for cancellation,
the shares represented thereby shall no longer be deemed
outstanding, the rights to receive any dividends thereon
shall cease to accrue from and after the Redemption Date and
all rights of the holders of the shares of the Formula Rate
Preferred Stock called for redemption shall cease and
terminate, excepting only the right to receive the Redemption
Price therefor.
(j) In order to conform the dividend rights of the holders of
the shares of $.25 Preferred Stock, as amended by the
foregoing paragraphs of this Certificate, to the intention of
the Board of Directors in declaring a stock split by way of a
stock dividend to holders of the Common and Preferred Stock
of the Company payable on July 2, 1987 to holders of record
as of June 24, 1987, dividends, if any, which may have
accrued (but which have not been declared) on shares of $.25
Preferred Stock at any rate in excess of $.16 2/3 per share
per annum between July 2, 1987, and the date the amendments
to the Certificate effected by these resolutions become
effective shall be, and they hereby are, cancelled."
FURTHER RESOLVED, that, pursuant to Section 242 of the
Delaware General Corporation Law, the proper officers of the
Corporation are hereby authorized and directed to cause the
amendment to the Certificate of Incorporation of the
Corporation, as amended by the Certificate of Designation,
proposed to be adopted by the preceding resolution (the
"Proposed Amendment") to be submitted to the stockholders of
the Corporation at the next Annual Meeting of the
stockholders of the Corporation for the purpose of voting to
approve or disapprove the Proposed Amendment; provided,
however, that the Proposed Amendment need not be submitted to
such a vote if, prior to said Annual Meeting, the Proposed
Amendment shall have been adopted by the written consent of
the stockholders of the Corporation pursuant to Section 228
of the Delaware General Corporation Law.
FURTHER RESOLVED, that, if the Proposed Amendment shall be
approved and adopted by the stockholders of the Corporation
in accordance with the immediately preceding resolution, the
proper officers of the Corporation be, and they hereby are,
authorized and directed to make and execute a Certificate of
Amendment to the Certificate of Incorporation of the
Corporation, setting forth the resolution to so amend the
Certificate of Incorporation and certifying that said
resolution has been duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation
Law, and to cause the same to be filed with the Secretary of
State of the State of Delaware and a certified copy recorded
in the Office of the Recorder of Deeds of New Castle County,
and to do all acts and things whatsoever, whether within or
without the State of Delaware, which may be necessary or
proper to effect said amendment.
SECOND: Thereafter the foregoing proposed amendment was
approved by the written consent of the holders of more than 50% of the voting
power of the Common Stock, par value $1.00 per share and the $.25 Preferred
Stock, par value $1.00 per share (the "Preferred Stock"), of the Corporation,
voting together as a single class, and by the written consent of the holders
of more than 66 1/3% of the Preferred Stock of the Corporation, voting
separately as a class, pursuant to Section 228 of the General Corporation Law
of the State of Delaware.
THIRD: The foregoing amendment was duly adopted in
accordance with the provisions of Section 242 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, Pier 1 Imports, Inc., has caused this
Certificate of Amendment to be duly executed this 29th day of October, 1987.
PIER 1 IMPORTS, INC.
By:/s/ R. G. Herndon
Senior Vice President
ATTEST:
/s/ J. Rodney Lawrence
Secretary
<PAGE> CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PIER 1 IMPORTS, INC.
PIER 1 IMPORTS, INC., organized and existing under the
General Corporation Law of the State of Delaware, does hereby certify:
FIRST: That at a meeting of the Board of Directors of the
corporation held on March 15, 1995, the Board duly adopted a resolution
declaring advisable the following amendment to the Certificate of
Incorporation of the corporation and directing that the amendment be
submitted to the stockholders of the corporation at the next annual meeting
of stockholders:
The first paragraph of Article Fourth of the
corporation's Certificate of Incorporation be
amended to read as follows:
"FOURTH: The number of shares of stock which
the corporation shall have authority to issue
is two hundred million (200,000,000) shares
of Common Stock having a par value of one
dollar ($1.00) per share and five million
(5,000,000) shares of Preferred Stock having
a par value of one dollar ($1.00) per share."
SECOND: That such amendment was duly adopted in accordance
with Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the corporation has caused this
certificate to be executed by its duly authorized officer this 22nd day of
June, 1995.
PIER 1 IMPORTS, INC.
By:/s/ J. Rodney Lawrence
J. Rodney Lawrence
Senior Vice President
<PAGE> CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PIER 1 IMPORTS, INC.
PIER 1 IMPORTS, INC., organized and existing under the
General Corporation Law of the State of Delaware, does hereby certify:
FIRST: That at a meeting of the Board of Directors of the
corporation held on March 19, 1998, the Board duly adopted a resolution
declaring advisable the following amendment to the Certificate of
Incorporation of the corporation and directing that the amendment be
submitted to the stockholders of the corporation at the next annual meeting
of stockholders:
The first paragraph of Article Fourth of the
corporation's Certificate of Incorporation be
amended to read as follows:
"FOURTH: The number of shares of stock which
the corporation shall have authority to issue
is five hundred million (500,000,000) shares
of Common Stock having a par value of one
dollar ($1.00) per share and five million
(5,000,000) shares of Preferred Stock having
a par value of one dollar ($1.00) per share."
SECOND: That such amendment was duly adopted in accordance
with Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the corporation has caused this
certificate to be executed by its duly authorized officer this 25th day of
June, 1998.
PIER 1 IMPORTS, INC.
By _____________________
J. Rodney Lawrence
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> FEB-27-1999
<PERIOD-END> MAY-30-1998
<CASH> 57,387
<SECURITIES> 0
<RECEIVABLES> 10,774
<ALLOWANCES> 156
<INVENTORY> 240,409
<CURRENT-ASSETS> 385,757
<PP&E> 394,073
<DEPRECIATION> 162,517
<TOTAL-ASSETS> 652,521
<CURRENT-LIABILITIES> 123,234
<BONDS> 114,856
<COMMON> 67,903
0
0
<OTHER-SE> 322,176
<TOTAL-LIABILITY-AND-EQUITY> 652,521
<SALES> 250,508
<TOTAL-REVENUES> 250,508
<CGS> 140,821
<TOTAL-COSTS> 140,821
<OTHER-EXPENSES> 6,996
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,128
<INCOME-PRETAX> 25,003
<INCOME-TAX> 9,502
<INCOME-CONTINUING> 15,501
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,501
<EPS-PRIMARY> .15<F1>
<EPS-DILUTED> .14<F1>
<FN>
<F1> Shares outstanding have been adjusted to reflect the three for two stock
split, effected in the form of a stock dividend, to be distributed July 29,
1998. Prior financial data schedules have not been restated to reflect the
stock split.
</FN>
</TABLE>
