Pier 1 2011 Annual Report Download - page 58

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Net periodic benefit cost included the following actuarially determined components during fiscal 2011,
2010 and 2009 (in thousands):
2011 2010 2009
Service cost $ 1,121 $ 897 $ 923
Interest cost 674 764 923
Amortization of unrecognized prior service cost 410 410 551
Amortization of net actuarial loss 108 20 445
Settlement charges 145 40 -
Curtailment charge - 353 368
Net periodic benefit cost $ 2,458 $ 2,484 $ 3,210
As of February 26, 2011 and February 27, 2010, accumulated other comprehensive loss included amounts
that had not been recognized as components of net periodic benefit cost related to prior service cost of
$1,965,000 and $2,375,000, and net actuarial loss of $2,723,000 and $625,000, respectively. During fiscal 2011,
$2,351,000 was recognized in other comprehensive income related to net actuarial loss for the period. The
estimated prior service cost and net actuarial loss that will be amortized from accumulated other comprehensive
loss into net periodic cost in fiscal 2012 are $410,000 and $453,000, respectively.
NOTE 7 – MATTERS CONCERNING SHAREHOLDERS’ EQUITY
On March 23, 2006, the Board of Directors approved the adoption of the Pier 1 Imports, Inc. 2006 Stock
Incentive Plan (the “2006 Plan”). The 2006 Plan was approved by the shareholders on June 22, 2006. The
aggregate number of shares available for issuance under the 2006 Plan included a new authorization of 1,500,000
shares, plus shares (not to exceed 560,794 shares) that remained available for grant under the Pier 1 Imports, Inc.
1999 Stock Plan (the “1999 Stock Plan”) and the Pier 1 Imports, Inc. Management Restricted Stock Plan,
increased by the number of shares (not to exceed 11,186,150 shares) subject to outstanding awards on March 23,
2006, under these prior plans that cease to be subject to such awards. As of February 26, 2011, there were a total
of 4,395,127 shares available for grant under the 2006 Plan.
Stock option grants – On January 27, 2007, the Board of Directors approved an employment agreement
effective February 19, 2007 for the Company’s President and Chief Executive Officer (the “CEO”). Under the
employment agreement, the CEO received stock option grants. As of February 26, 2011, outstanding options
covering 2,000,000 shares were exercisable. The options were granted as an employment inducement award, and
not under any stock option or other equity incentive plan adopted by the Company.
During fiscal 2011, the Board of Directors approved stock options grants under the 2006 Plan of 6,000
shares. As of February 26, 2011, and February 27, 2010, outstanding options covering 1,181,325 and 1,261,025
shares were exercisable under the 2006 Plan, respectively. Options were granted at exercise prices equal to the
fair market value of the Company’s common stock at the date of grant. Employee options issued under the 2006
Plan vest over a period of four years and have a term of ten years from the grant date. The employee options are
fully vested upon death, disability or retirement of the employee. The 2006 Plan’s administrative committee also
has the discretion to take certain actions with respect to stock options, such as accelerating the vesting, upon
certain corporate changes (as defined in the 2006 Plan). Non-employee director options are fully vested on the
date of grant, and are exercisable for a period of ten years.
The 1999 Stock Plan provided for the granting of options to directors and employees with an exercise
price not less than the fair market value of the common stock on the date of the grant. The 1999 Stock Plan
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