þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended March 1, 2008 . | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
DELAWARE | 75-1729843 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
|
100 Pier 1 Place
Fort Worth, Texas |
76102 |
|
(Address of principal executive offices) | (Zip Code) |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
Common Stock, $1.00 par value | New York Stock Exchange |
Large accelerated filer
|
o | Accelerated filer | þ | |||
Non-accelerated filer
|
o (Do not check if a smaller reporting company) | Smaller reporting company | o |
13
Item 1.
Business
.
(a)
General
Development of
Business
.
3
Table of Contents
(b)
Financial
Information about Industry
Segments
.
(c)
Narrative
Description of
Business
.
4
Table of Contents
(d)
Financial
Information about Geographic
Areas
.
(e)
Available
Information
.
5
Table of Contents
Item 1A.
Risk
Factors
.
6
Table of Contents
7
Table of Contents
8
Table of Contents
9
Table of Contents
10
Table of Contents
11
Table of Contents
Item 1B.
Unresolved
Staff
Comments
.
Item 2.
Properties
.
15
Louisiana
15
Ohio
33
1
Maine
1
Oklahoma
9
26
Maryland
25
Oregon
14
8
Massachusetts
25
Pennsylvania
39
116
Michigan
34
Rhode Island
3
22
Minnesota
20
South Carolina
17
21
Mississippi
7
South Dakota
2
4
Missouri
19
Tennessee
19
78
Montana
6
Texas
84
32
Nebraska
3
Utah
10
4
Nevada
9
Virginia
35
6
New Hampshire
6
Washington
28
12
Table of Contents
43
New Jersey
35
West Virginia
5
18
New Mexico
5
Wisconsin
19
9
New York
46
Wyoming
1
9
North Carolina
34
11
North Dakota
3
11
New Brunswick
2
Ontario
35
14
Newfoundland
1
Quebec
15
2
Nova Scotia
1
Saskatchewan
2
Owned/Leased
Approx. Sq. Ft.
Facility
981,000 sq. ft.
Leased
514,000 sq. ft.
Owned
527,000 sq. ft.
Leased
460,000 sq. ft.
Owned
747,000 sq. ft.
Leased
784,000 sq. ft.
Leased
451,000 sq. ft.
Leased
Item 3.
Legal
Proceedings
.
Item 4.
Submission
of Matters to a Vote of Security
Holders
.
Table of Contents
68
Item 5.
Market
for the Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity
Securities
.
Market Price
High
Low
$
8.00
$
6.48
8.93
5.84
6.52
3.67
6.93
3.28
$
12.65
$
8.07
9.12
5.68
7.81
5.84
6.86
5.95
Cash Dividends
per Share
Cash Dividends
per Share
$
.10
.10
14
Table of Contents
15
Table of Contents
Item 6.
Selected
Financial
Data
.
Year Ended
2008
2007
(1)
2006
2005
2004
($ In millions except per share amounts)
$
1,511.8
1,623.2
1,776.7
1,825.3
1,806.1
$
439.6
474.0
601.7
703.6
760.9
$
487.9
649.0
588.3
549.6
526.1
$
39.8
51.2
56.2
55.8
48.9
$
(88.1
)
(226.2
)
(42.8
)
98.2
186.0
$
5.3
1.9
(0.9
)
(0.9
)
(1.0
)
$
(93.4
)
(228.1
)
(41.9
)
99.1
187.0
$
(96.0
)
(227.2
)
(27.5
)
62.8
117.7
$
(0.4
)
(12.3
)
(2.3
)
0.3
$
(96.0
)
(227.6
)
(39.8
)
60.5
118.0
$
(1.09
)
(2.59
)
(.32
)
.72
1.32
$
(1.09
)
(2.59
)
(.32
)
.71
1.29
$
(.01
)
(.14
)
(.03
)
$
(.01
)
(.14
)
(.03
)
$
(1.09
)
(2.60
)
(.46
)
.69
1.32
$
(1.09
)
(2.60
)
(.46
)
.68
1.29
$
.20
.40
.40
.30
$
3.04
4.13
6.81
7.63
7.66
$
387.9
434.6
575.2
481.0
499.6
2.4
2.5
3.0
2.6
2.8
$
821.9
916.5
1,169.9
1,075.7
1,052.2
$
184.0
184.0
184.0
19.0
19.0
$
267.7
361.1
590.0
664.4
683.6
88.1
87.4
86.6
88.8
91.6
(2.8
)%
0.4
34.5
36.7
37.1
(1)
Fiscal 2007 consisted of a 53-week
year. All other fiscal years presented reflect 52-week years.
(2)
Amounts are from continuing
operations unless otherwise specified.
(3)
Gross profit for fiscal 2007
included a pre-tax charge of $32.5 million for inventory
write-down related to a strategic decision made in the fourth
quarter to liquidate certain inventory by the end of the first
quarter of fiscal 2008.
(4)
The decrease in selling, general
and administrative expense for fiscal 2008 relates primarily to
initiatives to reduce costs company-wide. See detailed
description of these reductions in Item 7.
Managements Discussion and Analysis of Financial Condition
and Results of Operations. Selling, general and administrative
expense in fiscal 2007 included a pre-tax charge of
$32.3 million related to impairment charges on long-lived
store level assets.
(5)
Working capital and current ratio
include the effect of the classification of the office building
held for sale as a current asset in all periods presented.
(6)
In fiscal 2008, the Company
recorded minimal state and foreign tax provisions and provided a
valuation allowance on the deferred tax asset arising from the
tax benefit of fiscal 2008 losses. The decrease in the
Companys effective tax rate for fiscal 2007 was the result
of recording a valuation allowance on its deferred tax assets
during the second quarter and only recording a tax benefit on
the losses for the year that could be carried back.
16
Table of Contents
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
.
17
Table of Contents
2008
2007
2006
(6.9)%
(8.6)%
(2.7)%
(1.7)%
(11.3)%
(7.1)%
$
164
$
168
$
187
48.5%
47.9%
50.2%
29.1%
29.2%
33.9%
32.3%
40.0%
33.1%
(5.8)%
(13.9)%
(2.4)%
(6.4)%
(14.0)%
(1.5)%
$
46.71
$
38.84
$
39.07
8,782
9,230
9,407
(4.9)%
(1.9)%
3.2%
18
Table of Contents
2008
2007
2006
$
1,486,147
$
1,590,854
$
1,753,927
8,366
18,943
15,345
17,319
13,419
7,429
$
1,511,832
$
1,623,216
$
1,776,701
(1)
Other sales consisted primarily of
wholesale sales and royalties received from franchise stores,
Grupo Sanborns, S.A. de C.V., and other third parties.
2008
$
2,641
9,778
(23,860
)
(99,943
)
$
(111,384
)
(1)
Includes a decrease in sales
related to the 53rd week in fiscal 2007 as well as the decrease
in catalog and
e-commerce
sales.
19
Table of Contents
United States
Canada
Total
1,115
80
1,195
65
4
69
(37
)
(1
)
(38
)
1,143
83
1,226
32
2
34
(63
)
(1
)
(64
)
1,112
84
1,196
4
4
(82
)
(1
)
(83
)
1,034
83
1,117
(1)
The Company supplies merchandise
and licenses the Pier 1 Imports name to Grupo Sanborns, S.A. de
C.V. and Sears Roebuck de Puerto Rico, Inc. which sell Pier 1
Imports merchandise primarily in a store within a
store format. At the end of fiscal 2008, there were 31 and
seven locations in Mexico and Puerto Rico, respectively.
20
Table of Contents
March 1, 2008
March 3, 2007
Increase /
Expense
% Sales
Expense
% Sales
(Decrease)
$
229,573
15.2
%
$
261,600
16.1
%
$
(32,027
)
63,970
4.2
%
117,364
7.2
%
(53,394
)
38,341
2.5
%
47,378
2.9
%
(9,037
)
331,884
22.0
%
426,342
26.3
%
(94,458
)
82,244
5.4
%
96,712
6.0
%
(14,468
)
15,470
1.0
%
40,372
2.5
%
(24,902
)
(2,137
)
(0.1
)%
187
0.0
%
(2,324
)
5,972
0.4
%
2,679
0.2
%
3,293
1,763
0.1
%
6,769
0.4
%
(5,006
)
(89
)
0.0
%
4,836
0.3
%
(4,925
)
2,400
0.1
%
(2,400
)
52,791
3.5
%
68,708
4.2
%
(15,917
)
156,014
10.3
%
222,663
13.7
%
(66,649
)
$
487,898
32.3
%
$
649,005
40.0
%
$
(161,107
)
21
Table of Contents
2007
2006
2005
$
1,590,854
$
1,753,927
$
1,807,441
18,943
15,345
10,408
13,419
7,429
7,494
$
1,623,216
$
1,776,701
$
1,825,343
(1)
Other sales consisted primarily of
wholesale sales and royalties received from franchise stores and
from Sears Roebuck de Mexico, S.A. de C.V.
22
Table of Contents
2007
$
27,889
24,472
(184,797
)
(21,049
)
$
(153,485
)
United States
Canada
Total
(2)
1,055
68
1,123
101
13
114
(41
)
(1
)
(42
)
1,115
80
1,195
65
4
69
(37
)
(1
)
(38
)
1,143
83
1,226
32
2
34
(63
)
(1
)
(64
)
1,112
84
1,196
(1)
The Company supplied merchandise
and licensed the Pier 1 name to Grupo Sanborns, S.A. de C.V. and
Sears Roebuck de Puerto Rico, Inc. which sold Pier 1 Imports
merchandise in a store within a store format. At the
end of fiscal 2007, there were 29 and seven locations in Mexico
and Puerto Rico, respectively.
(2)
Total store count included 36 Pier
1 Kids stores and 26 clearance stores at March 3, 2007.
23
Table of Contents
2007
2006
Increase
$
32,300
$
5,840
$
26,460
6,769
1,008
5,761
4,942
4,942
4,494
4,494
4,070
4,070
4,533
4,533
$
57,108
$
6,848
$
50,260
24
Table of Contents
25
Table of Contents
Amount of Commitment per Period
Less Than
1 to 3
3 to 5
More Than
Total
1 Year
Years
Years
5 Years
$
1,066,593
$
227,571
$
389,257
$
278,698
$
171,067
163,037
163,037
165,000
165,000
49,997
24,430
25,567
19,000
19,000
31,556
10,519
21,037
10,509
560
1,121
1,121
7,707
6,213
1,462
2,924
1,827
33,625
9,778
2,801
4,315
16,731
$
1,545,530
$
437,357
$
607,707
$
285,961
$
214,505
$
270,034
1,275,496
$
1,545,530
(1)
As of March 1, 2008, the
Company had approximately $163.0 million of outstanding
purchase orders, which were primarily related to merchandise
inventory. Such orders are generally cancelable at the
discretion of the Company until the order has been shipped. The
table above excludes certain executory contracts for goods and
services that tend to be recurring in nature and similar in
amount year over year and includes $36.6 million in
merchandise letters of credit.
(2)
The Companys convertible debt
is subject to redemption in part or full on February 15,
2011, and the above amounts assume the notes will be repaid or
refinanced at that time. If all notes remain outstanding until
maturity in 2036, the total interest paid would be
$284.2 million.
See Note 7 of the Notes to
Consolidated Financial Statements for further discussion of the
Companys convertible senior notes.
(3)
The Company also has outstanding
standby letters of credit totaling $19.4 million related to
the Companys industrial revenue bonds. This amount is
excluded from the table above as it is not incremental to the
Companys total outstanding commitments.
26
Table of Contents
(4)
The interest rates on the
Companys industrial revenue bonds are variable and reset
weekly. The estimated interest payments included in the table
were calculated based upon the rate in effect at fiscal
2008 year end.
(5)
Represents estimated commitment
fees for trade and standby letters of credit, and unused fees on
the Companys $325 million secured credit facility,
which expires in May 2012, calculated based upon balances and
rates in effect at fiscal 2008 year end.
(6)
Other obligations represent the
Companys liability under various unfunded retirement
plans.
See Note 9 of the Notes to Consolidated Financial
Statements for further discussion of the Companys employee
benefit plans.
(7)
Other obligations also include
approximately $8.5 million of reserves for uncertain tax
positions, including interest and penalties, under Financial
Accounting Standards Board Interpretation No. 48,
Accounting for Uncertainty in Income Taxes An
Interpretation of FASB Statement No. 109, which has
been classified as a current liability. Excluded from this table
is the noncurrent portion of reserves for uncertain tax
positions of $12.3 million for which the Company is not
reasonably able to estimate the timing of future cash flows.
(8)
The above amounts do not include
payments that may be due under employment agreements and post
employment consulting agreements with certain employees. The
terms and amounts under such agreements are disclosed in the
Proxy Statement for the Companys 2008 Annual Meeting of
Shareholders. Subsequent to year end, all post employment
consulting agreements were mutually terminated.
(9)
Subsequent to fiscal 2008 year
end, the Company entered into an agreement to sell its corporate
headquarters. As part of the transaction, the Company will also
enter into a lease agreement to rent office space in the
building.
See Note 3 of the Notes to Consolidated
Financial Statements for further discussion.
25 stores as leases expire or are otherwise ended. The new store
locations will be financed primarily through operating leases.
Total capital expenditures for fiscal 2009 are expected to be
approximately $15 to $18 million. Of this amount, the
Company expects to spend approximately $9 million on store
development, $4 million on information systems enhancements
and approximately $2 million primarily related to the
Companys distribution centers. Additionally, the Company
may spend approximately $3 million related to the office
space the Company will lease upon the anticipated sale of the
Companys headquarters.
27
Table of Contents
28
Table of Contents
29
Table of Contents
30
Table of Contents
Item 7A.
Quantitative
and Qualitative Disclosures about Market
Risk
.
31
Table of Contents
Item 8.
Financial
Statements and Supplementary
Data
.
32
Table of Contents
Year Ended
2008
2007
2006
$
1,511,832
$
1,623,216
$
1,776,701
1,072,280
1,149,257
1,175,011
487,898
649,005
588,273
39,792
51,184
56,229
1,599,970
1,849,446
1,819,513
(88,138
)
(226,230
)
(42,812
)
(8,677
)
(12,456
)
(3,510
)
15,916
16,116
2,610
(1,960
)
(1,767
)
5,279
1,893
(900
)
(93,417
)
(228,123
)
(41,912
)
2,594
(885
)
(14,441
)
(96,011
)
(227,238
)
(27,471
)
(638
)
(17,583
)
(231
)
(5,250
)
(407
)
(12,333
)
$
(96,011
)
$
(227,645
)
$
(39,804
)
$
(1.09
)
$
(2.59
)
$
(0.32
)
$
$
(0.01
)
$
(0.14
)
$
(1.09
)
$
(2.60
)
$
(0.46
)
$
$
0.20
$
0.40
88,083
87,395
86,629
33
Table of Contents
34
Table of Contents
Year Ended
2008
2007
2006
$
(96,011
)
$
(227,645
)
$
(39,804
)
53,608
63,496
78,781
(2,137
)
187
1,781
5,030
36,369
6,024
7,441
5,837
5,464
636
4,157
16,915
10,766
10,440
4,003
4,176
24,576
(14,496
)
639
(3,121
)
236
(15,914
)
(74,550
)
(97,740
)
144,622
(51,646
)
9,757
882
(8,776
)
(14,428
)
(22,778
)
25,616
(16,955
)
(18,011
)
(24,447
)
(5,388
)
7,369
2,765
(1,595
)
(6,966
)
(6,351
)
(25,495
)
2,457
566
(2,558
)
(4,255
)
(2,579
)
(3,226
)
(83,074
)
(104,905
)
(64,297
)
(7,153
)
(28,600
)
(50,979
)
5,674
173
1,401
11,601
10,754
6,986
25,707
3,226
(589
)
(9,712
)
(3,500
)
1,500
21,907
60,240
6,418
31,830
10,388
(17,398
)
(34,667
)
(4,047
)
3,909
4,719
7,641
165,000
69,000
86,500
(69,000
)
(86,500
)
(998
)
(283
)
(6,739
)
(9,145
)
2,911
(12,962
)
118,043
(73,745
)
(86,037
)
64,134
167,178
253,215
189,081
$
93,433
$
167,178
$
253,215
$
14,138
$
12,821
$
8,136
$
1,124
$
2,021
$
21,342
35
Table of Contents
Cumulative
Common Stock
Other
Total
Outstanding
Paid-in
Retained
Comprehensive
Treasury
Unearned
Shareholders
Shares
Amount
Capital
Earnings
Income (Loss)
Stock
Compensation
Equity
86,240
$
100,779
$
141,850
$
656,692
$
(1,426
)
$
(233,526
)
$
$
664,369
(39,804
)
(39,804
)
1,149
1,149
(306
)
(306
)
(38,961
)
(250
)
(4,047
)
(4,047
)
203
(386
)
3,278
(2,256
)
636
746
(3,640
)
12,041
8,401
(34,667
)
(34,667
)
(5,749
)
(5,749
)
86,939
100,779
132,075
582,221
(583
)
(222,254
)
(2,256
)
589,982
(227,645
)
(227,645
)
7,172
7,172
(2,550
)
(2,550
)
(223,023
)
(1,631
)
(1,631
)
185
(4,280
)
2,994
2,256
970
4,494
4,494
674
(1,873
)
9,596
7,723
(17,398
)
(17,398
)
87,798
100,779
130,416
337,178
2,408
(209,664
)
361,117
(5,073
)
(5,073
)
(96,011
)
(96,011
)
(3,017
)
(3,017
)
982
982
(98,046
)
281
(2,974
)
4,533
1,559
4,278
4,278
528
(4,925
)
8,834
3,909
88,607
$
100,779
$
126,795
$
236,094
$
373
$
(196,297
)
$
$
267,744
36
Table of Contents
NOTE 1
DESCRIPTION
OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
37
Table of Contents
38
Table of Contents
39
Table of Contents
40
Table of Contents
2008
2007
2006
$
(96,011
)
$
(227,238
)
$
(27,471
)
(407
)
(12,333
)
$
(96,011
)
$
(227,645
)
$
(39,804
)
88,083
87,395
86,629
$
(1.09
)
$
(2.59
)
$
(.32
)
$
(.01
)
$
(.14
)
$
(1.09
)
$
(2.60
)
$
(.46
)
41
Table of Contents
42
Table of Contents
Pro forma
2006
$
(27,471
)
417
(25,519
)
$
(52,573
)
$
(.32
)
$
(.61
)
$
(.32
)
$
(.61
)
NOTE 2
OFFICE
BUILDING HELD FOR SALE
NOTE 3
SUBSEQUENT
EVENT (UNAUDITED)
43
Table of Contents
NOTE 4
PROPERTIES
2008
2007
$
6,379
$
7,849
29,621
31,463
246,803
256,464
167,542
179,478
73,175
72,010
41
1,557
523,561
548,821
408,609
394,460
$
114,952
$
154,361
NOTE 5
OTHER
ACCRUED LIABILITIES AND NONCURRENT LIABILITIES
2008
2007
$
46,416
$
40,610
24,030
26,035
11,017
10,875
1,351
16,358
19,003
25,663
$
101,817
$
119,541
$
34,887
$
40,552
19,634
23,053
24,276
21,857
15,361
1,306
$
94,158
$
86,768
44
Table of Contents
NOTE 6
COSTS
ASSOCIATED WITH EXIT ACTIVITIES
Lease
Termination
Obligations
$
1,475
3,689
487
(2,792
)
2,859
4,245
(242
)
(4,426
)
2,436
11,573
(1,133
)
(7,248
)
$
5,628
45
Table of Contents
NOTE 7
LONG-TERM
DEBT AND AVAILABLE CREDIT
2008
2007
$
19,000
$
19,000
165,000
165,000
184,000
184,000
$
184,000
$
184,000
46
Table of Contents
Long-term
Debt
165,000
19,000
$
184,000
47
Table of Contents
NOTE 8
CONDENSED
FINANCIAL STATEMENTS
Year Ended March 1, 2008
(In thousands)
Pier 1
Guarantor
Non-Guarantor
Imports, Inc.
Subsidiaries
Subsidiaries
Eliminations
Total
$
$
1,505,011
$
38,155
$
(31,334
)
$
1,511,832
1,068,371
35,466
(31,557
)
1,072,280
1,829
525,279
582
527,690
(1,829
)
(88,639
)
2,107
223
(88,138
)
(2,106
)
7,999
(614
)
5,279
277
(96,638
)
2,721
223
(93,417
)
2,380
214
2,594
277
(99,018
)
2,507
223
(96,011
)
(96,511
)
2,507
94,004
$
(96,234
)
$
(96,511
)
$
2,507
$
94,227
$
(96,011
)
48
Table of Contents
Year Ended March 3, 2007
(In thousands)
Pier 1
Guarantor
Non-Guarantor
Imports, Inc.
Subsidiaries
Subsidiaries
Eliminations
Total
$
$
1,615,951
$
42,780
$
(35,515
)
$
1,623,216
1,145,765
39,114
(35,622
)
1,149,257
1,585
697,075
1,529
700,189
(1,585
)
(226,889
)
2,137
107
(226,230
)
(3,660
)
6,251
(698
)
1,893
2,075
(233,140
)
2,835
107
(228,123
)
(1,101
)
216
(885
)
2,075
(232,039
)
2,619
107
(227,238
)
(229,827
)
2,212
227,615
(638
)
(638
)
(231
)
(231
)
(407
)
(407
)
$
(227,752
)
$
(229,827
)
$
2,212
$
227,722
$
(227,645
)
49
Table of Contents
Year Ended February 25, 2006
(In thousands)
Pier 1
Guarantor
Non-Guarantor
Imports, Inc.
Subsidiaries
Subsidiaries
Eliminations
Total
$
$
1,770,323
$
59,734
$
(53,356
)
$
1,776,701
1,174,228
55,161
(54,378
)
1,175,011
1,163
641,833
1,506
644,502
(1,163
)
(45,738
)
3,067
1,022
(42,812
)
711
(2,288
)
677
(900
)
(1,874
)
(43,450
)
2,390
1,022
(41,912
)
(14,842
)
401
(14,441
)
(1,874
)
(28,608
)
1,989
1,022
(27,471
)
(38,952
)
(10,344
)
49,296
(17,583
)
(17,583
)
(5,250
)
(5,250
)
(12,333
)
(12,333
)
$
(40,826
)
$
(38,952
)
$
(10,344
)
$
50,318
$
(39,804
)
50
Table of Contents
March 1, 2008
(In thousands)
51
Table of Contents
March 3, 2007
(In thousands)
52
Table of Contents
Year Ended March 1, 2008
(In thousands)
Pier 1
Guarantor
Non-Guarantor
Imports, Inc.
Subsidiaries
Subsidiaries
Eliminations
Total
$
7,230
$
(94,318
)
$
4,014
$
$
(83,074
)
(7,153
)
(7,153
)
5,674
5,674
6,986
6,986
(589
)
(589
)
1,500
1,500
6,418
6,418
3,909
3,909
(998
)
(998
)
(69,272
)
72,023
(2,751
)
(65,363
)
71,025
(2,751
)
2,911
(58,133
)
(16,875
)
1,263
(73,745
)
111,163
43,699
12,316
167,178
$
53,030
$
26,824
$
13,579
$
$
93,433
53
Table of Contents
Year Ended March 3, 2007
(In thousands)
Pier 1
Guarantor
Non-Guarantor
Imports, Inc.
Subsidiaries
Subsidiaries
(1)
Eliminations
Total
(1)
$
9,354
$
(117,163
)
$
2,922
$
(18
)
$
(104,905
)
(28,600
)
(28,600
)
173
173
14,998
(3,397
)
11,601
12,962
(2,208
)
10,754
25,707
25,707
(9,712
)
(9,712
)
21,907
21,907
37,435
(5,605
)
31,830
(17,398
)
(18
)
18
(17,398
)
4,618
101
4,719
69,000
69,000
(69,000
)
(69,000
)
(283
)
(283
)
(16,190
)
22,858
(6,668
)
(28,970
)
22,658
(6,668
)
18
(12,962
)
(19,616
)
(57,070
)
(9,351
)
(86,037
)
130,779
100,769
21,667
253,215
$
111,163
$
43,699
$
12,316
$
$
167,178
(1)
Includes cash at discontinued operation at the beginning of
period of $7,100 and $0 at end of period.
54
Table of Contents
(In thousands)
Pier 1
Guarantor
Non-Guarantor
Imports, Inc.
Subsidiaries
Subsidiaries
(1)
Eliminations
Total
(1)
$
3,029
$
(60,152
)
$
16,443
$
(23,617
)
$
(64,297
)
(46,229
)
(4,750
)
(50,979
)
1,401
1,401
3,226
3,226
(3,500
)
(3,500
)
60,240
60,240
(9,889
)
9,889
5,249
(4,750
)
9,889
10,388
(34,667
)
(50
)
(23,567
)
23,617
(34,667
)
(4,047
)
(4,047
)
7,641
7,641
165,000
165,000
86,500
86,500
(86,500
)
(86,500
)
(5,369
)
(1,370
)
(6,739
)
(9,145
)
(9,145
)
9,889
(9,889
)
7,855
(450
)
(7,405
)
127,268
(1,870
)
(21,083
)
13,728
118,043
130,297
(56,773
)
(9,390
)
64,134
482
157,542
31,057
189,081
$
130,779
$
100,769
$
21,667
$
$
253,215
(1)
Includes cash at discontinued operation of $3,359 at beginning
of period and $7,100 at end of period.
55
Table of Contents
NOTE 9
EMPLOYEE
BENEFIT PLANS
56
Table of Contents
2008
2007
$
16,460
$
38,936
498
2,405
764
1,931
5,238
(1,317
)
(6,351
)
(25,495
)
$
16,609
$
16,460
$
16,609
$
16,460
$
(16,609
)
$
(16,460
)
$
(16,609
)
$
(16,122
)
$
(326
)
$
(6,285
)
(16,282
)
(10,175
)
6,311
3,323
$
(10,297
)
$
(13,137
)
$
3,020
$
32
5.00
%
5.50
%
2.75
%
2.75
%
0.00
%
5.00
%
5.50
%
5.00
%
2.75
%
2.75
%
0.00
%
5.00
%
(1)
Actuarial loss for fiscal 2008
includes the impact from the addition of the Companys
President and Chief Executive Officer to the Plan during the
year. Pursuant to his employment agreement, he was entitled to
participate in the Plan with the same level of benefit as his
accrued benefit at his former employer.
(2)
The rate of compensation increase
shown above reflects no increase anticipated for fiscal 2009. An
increase of 5.00% was assumed for fiscal years 2010 and
thereafter.
57
Table of Contents
2008
2007
2006
$
498
$
2,405
$
2,043
764
1,931
1,590
361
804
830
125
3,203
3,463
1,399
5,257
1,008
364
1,512
$
3,511
$
15,112
$
8,934
NOTE 10
MATTERS
CONCERNING SHAREHOLDERS EQUITY
58
Table of Contents
59
Table of Contents
Weighted
Weighted
Average
Exercisable Shares
Average
Fair Value
Weighted
Exercise
at Date
Number of
Average
Shares
Price
of Grant
Shares
Exercise Price
12,273,325
$
15.40
5,746,450
$
12.76
1,477,000
14.26
$
4.75
(397,100
)
7.92
(615,200
)
17.36
12,738,025
15.41
11,438,025
15.54
2,745,500
7.24
3.33
(98,950
)
7.77
(1,716,450
)
14.42
13,668,125
13.95
10,797,625
15.31
724,000
7.71
3.31
(50,775
)
7.43
(1,763,875
)
14.54
12,577,475
13.53
10,983,225
14.18
Weighted
Weighted
Weighted
Average
Average
Average
Remaining
Shares
Exercise Price-
Total
Exercise
Contractual
Currently
Exercisable
Shares
Price
Life (in years)
Exercisable
Shares
4,959,450
$
7.44
6.40
3,710,700
$
7.38
3,787,000
15.12
5.88
3,444,000
15.20
3,831,025
19.84
4.98
3,828,525
19.85
60
Table of Contents
2008
2007
2006
$
3.31
$
3.33
$
4.75
4.68
%
4.95
%
3.84
%
42.43
%
47.15
%
40.00
%
0.25
%
0.40
%
2.20
%
5 years
5 years
5 years
Weighted Average
Grant Date Fair
Options
Value
2,870,500
$
3.61
724,000
3.31
(1,652,250
)
3.46
(348,000
)
3.40
1,594,250
$
3.68
61
Table of Contents
NOTE 11
PROPRIETARY
CREDIT CARD INFORMATION
62
Table of Contents
2007
(1)
2006
$
20,127
$
27,351
118
189
20,245
27,540
11,565
13,907
3,449
6,457
15,014
20,364
$
5,231
$
7,176
(1)
Fiscal 2007 income and costs
include activity through November 21, 2006, when the
Company completed the sale of its proprietary credit card
operations.
63
Table of Contents
2007
2006
$
212,653
$
436,034
$
1,190
$
2,189
$
32,592
$
95,444
NOTE 12
INCOME
TAXES
2008
2007
2006
$
521
$
(25,442
)
$
(2,402
)
22,980
(13,972
)
1,623
(365
)
1,880
1,596
(510
)
450
346
577
(14
)
2,594
(885
)
(14,441
)
(231
)
(5,250
)
$
2,594
$
(1,116
)
$
(19,691
)
64
Table of Contents
2008
2007
$
16,933
$
29,836
75,924
13,835
13,912
15,280
17,584
11,236
9,658
8,665
7,373
8,212
1,949
854
5,111
3,455
2,159
2,785
6,630
5,831
157,233
99,989
(29,898
)
(12,165
)
(1,630
)
(1,553
)
(31,528
)
(13,718
)
(125,705
)
(86,271
)
$
$
2008
2007
2006
$
(32,696
)
$
(79,843
)
$
(14,669
)
(1,240
)
(4,091
)
880
36,498
83,047
(209
)
718
(687
)
241
(716
)
35
$
2,594
$
(885
)
$
(14,441
)
65
Table of Contents
$
13,908
1,880
(1,400
)
(449
)
$
13,939
NOTE 13
COMMITMENTS
AND CONTINGENCIES
Operating
Subtenant
Leases
Income
$
227,571
$
640
206,824
539
182,433
494
157,862
493
120,836
356
171,067
281
$
1,066,593
$
2,803
66
Table of Contents
NOTE 14
DISCONTINUED
OPERATIONS
NOTE 15
SELECTED
QUARTERLY FINANCIAL DATA (UNAUDITED)
Three Months Ended
6/2/2007
9/1/2007
12/1/2007
3/1/2008
$
356,375
$
344,566
$
374,181
$
436,710
87,178
87,524
125,895
138,955
(56,378
)
(43,409
)
(9,962
)
13,738
(.64
)
(.49
)
(.11
)
.16
67
Table of Contents
Three Months Ended
5/27/2006
8/26/2006
11/25/2006
3/3/2007
$
376,092
$
370,698
$
402,714
$
473,712
127,252
105,497
124,583
116,627
(22,765
)
(73,059
)
(72,718
)
(58,696
)
(407
)
(23,172
)
(73,059
)
(72,718
)
(58,696
)
(.26
)
(.84
)
(.83
)
(.67
)
(.01
)
(.27
)
(.84
)
(.83
)
(.67
)
(1)
Fiscal 2008 consisted of
52 weeks, while fiscal 2007 consisted of 53 weeks.
(2)
Gross profit for the fourth quarter
ended March 3, 2007, included the pre-tax effect of a
$32.5 million inventory write-down related to a strategic
decision made in the fourth quarter to liquidate certain
inventory by the end of the first quarter of fiscal 2008.
See
Note 1 of the Notes to Consolidated Financial Statements
for further discussion of this charge.
(3)
Net loss for the fourth quarter
ended March 3, 2007, included the pre-tax effects of a
$6.8 million settlement and curtailment charge related to
retirement plans and a $6.5 million impairment charge on
long-lived assets.
See Note 1 and Note 9 of the
Notes to Consolidated Financial Statements for further
discussion of these charges.
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial
Disclosure
.
Item 9A.
Controls
and
Procedures
.
69
Table of Contents
70
Table of Contents
Item 10.
Directors,
Executive Officers and Corporate
Governance
.
Item 11.
Executive
Compensation
.
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder
Matters
.
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence
.
71
Table of Contents
Item 14.
Principal
Accounting Fees and
Services
.
Item 15.
Exhibits,
Financial Statement
Schedules
.
1.
Financial Statements
2.
Financial Statement Schedules
3.
Exhibits
72
Table of Contents
PIER 1 IMPORTS, INC.
By:
and Chief Executive Officer
Chairman of the Board
May 7, 2008
Director, President and
Chief Executive Officer
May 7, 2008
Executive Vice President and
Chief Financial Officer
May 7, 2008
Principal Accounting Officer
May 7, 2008
Director
May 7, 2008
Director
May 7, 2008
Director
May 7, 2008
Director
May 7, 2008
Director
May 7, 2008
Director
May 7, 2008
73
Table of Contents
Certificate of Incorporation and Amendments thereto,
incorporated herein by reference to Exhibit 3(i) to
Registrants
Form 10-Q
for the quarter ended May 30, 1998.
Bylaws of the Company as amended to date, incorporated herein by
reference to Exhibit 3(ii) to Registrants
Form 10-K
for the year ended February 26, 2005.
Indenture dated February 14, 2006 and Form of
6.375% Convertible Senior Notes due 2036, among Pier 1
Imports, Inc., the Subsidiary Guarantors parties thereto and
JPMorgan Chase Bank, National Association, incorporated herein
by reference to Exhibit 4.1 to the Companys
Form 8-K
filed February 16, 2006.
Registration Rights Agreement dated February 14, 2006,
among Pier 1 Imports, Inc., the Guarantors parties thereto and
the Initial Purchaser named therein, incorporated herein by
reference to Exhibit 4.3 to the Companys
Form 8-K
filed February 16, 2006.
Form of Indemnity Agreement between the Company and the
directors and executive officers of the Company dated
December 4, 2003, incorporated herein by reference to
Exhibit 10.1 to the Companys
Form 10-K
for the year ended February 28, 2004.
The Companys Supplemental Executive Retirement Plan, as
restated January 1, 2005, incorporated herein by reference
to Exhibit 10.4 to the Companys
Form 8-K
filed October 12, 2006.
The Companys Supplemental Retirement Plan, as restated
January 1, 2005, incorporated herein by reference to
Exhibit 10.5 to the Companys
Form 8-K
filed October 12, 2006.
Amendment No. 1 to the Companys Supplemental
Retirement Plan, as restated January 1, 2005, incorporated
herein by reference to Exhibit 10.6 to the Companys
Form 8-K
filed October 12, 2006.
Participation Agreement dated November 9, 2007, by and
between Alexander W. Smith and Pier 1 Imports, Inc.,
incorporated herein by reference to Exhibit 10.1 to the
Companys
Form 8-K
filed November 15, 2007.
Participation Agreement Amendment dated April 20, 2008 by
and between Jay R. Jacobs and Pier 1 Imports, Inc., incorporated
herein by reference to Exhibit 10.5 to the Companys
Form 8-K
filed April 24, 2008.
Participation Agreement Amendment dated April 20, 2008 by
and between Charles H. Turner and Pier 1 Imports, Inc.,
incorporated herein by reference to Exhibit 10.6 to the
Companys
Form 8-K
filed April 24, 2008.
Participation Agreement Amendment dated April 20, 2008 by
and between David A. Walker and Pier 1 Imports, Inc.,
incorporated herein by reference to Exhibit 10.7 to the
Companys
Form 8-K
filed April 24, 2008.
Participation Agreement Amendment dated April 20, 2008 by
and between Gregory S. Humenesky and Pier 1 Imports, Inc.
The Companys Management Restricted Stock Plan, as amended
and restated effective June 30, 2005, incorporated herein
by reference to Exhibit 10.5.1 to the Companys
Form 10-Q
for the quarter ended May 28, 2005.
Form of Restricted Stock Agreement, incorporated herein by
reference to Exhibit 10.5.2 to the Companys
Form 10-Q
for the quarter ended May 28, 2005.
The Companys 1989 Employee Stock Option Plan, amended and
restated as of June 27, 1996, incorporated herein by
reference to Exhibit 10.6.1 to the Companys
Form 10-K
for the year ended February 26, 2005.
Amendment No. 1 to the Companys 1989 Employee Stock
Option Plan, incorporated herein by reference to
Exhibit 10.6.2 to the Companys
Form 10-K
for the year ended February 26, 2005.
The Companys 1989 Non-Employee Director Stock Option Plan,
as amended effective June 28, 1989, incorporated herein by
reference to Exhibit 10(r) to the Companys
Form 10-K
for the fiscal year ended March 3, 1990.
74
Table of Contents
Form of Post-Employment Consulting Agreement between the Company
and its executive officers, incorporated herein by reference to
Exhibit 10(r) to the Companys
Form 10-K
for the fiscal year ended February 29, 1992.
Pier 1 Executive Health Expense Reimbursement Plan, incorporated
herein by reference to Exhibit 10.8 to the Companys
Form 10-K
for the year ended March 3, 2007.
The Companys 1999 Stock Plan, as amended and restated
December 31, 2004, incorporated herein by reference to
Exhibit 10.3 to the Companys
8-K
filed
October 12, 2006.
First Amendment to the Pier 1 Imports, Inc. 1999 Stock Plan, as
amended and restated December 31, 2004, incorporated herein
by reference to Exhibit 10.2 to the Companys
Form 10-Q
for the quarter ended September 1, 2007.
Forms of Director and Employee Stock Option Agreements,
incorporated herein by reference to Exhibit 10.2 to the
Companys
Form 10-Q
for the quarter ended August 28, 1999.
The Companys Stock Purchase Plan, as amended June 25,
2004, incorporated herein by reference to Appendix C,
page C-1,
of the Companys Proxy Statement for the fiscal year ended
February 28, 2004.
Amendment to the Pier 1 Imports, Inc. Stock Purchase Plan.
Employment Agreement between Pier 1 Imports, Inc. and Gregory S.
Humenesky, dated February 28, 2005, incorporated herein by
reference to Exhibit 10.1 to the Companys
Form 8-K
filed March 3, 2005.
Secured Credit Agreement, dated November 22, 2005, among
the Company, certain of its subsidiaries, Bank of America, N.A.,
Wells Fargo Retail Finance, LLC, Wachovia Bank, National
Association, HSBC Bank USA, N.A., JPMorgan Chase Bank, N.A., and
others, incorporated herein by reference to Exhibit 10.1 to
the Companys
Form 8-K
filed November 23, 2005.
First Amendment to Credit Agreement, dated as of July 28,
2006, by and among Pier 1 Imports (U.S.), Inc., Bank of America,
N.A., the facility guarantors party thereto and the lenders
party thereto, incorporated herein by reference to
Exhibit 10.1 to the Companys
Form 8-K
filed July 28, 2006.
Second Amendment to Credit Agreement, dated as of May 31,
2007 by and among Pier 1 Imports (U.S.), Inc., Bank of America,
N.A., the facility guarantors party thereto and the lenders
party thereto, incorporated herein by reference to
Exhibit 10.1 to the Companys
Form 8-K
filed June 5, 2007.
Pier 1 Umbrella Trust, dated December 21, 2005,
incorporated herein by reference to Exhibit 10.1 to the
Companys
Form 8-K
filed December 21, 2005.
Pier 1 Imports, Inc. 2006 Stock Incentive Plan, restated as
amended through March 25, 2008.
Form of Non-Qualified Stock Option Agreement
Non-Employee Director, incorporated herein by reference to
Exhibit 10.2 to the Companys
Form 8-K
filed June 23, 2006.
Form of Non-Qualified Stock Option Agreement
Employee Participant, incorporated herein by reference to
Exhibit 10.3 to the Companys
Form 8-K
filed June 23, 2006.
Form of Restricted Stock Award Agreement (Time Vesting),
incorporated herein by reference to Exhibit 10.4 to the
Companys
Form 8-K
filed June 23, 2006.
Form of Restricted Stock Award Agreement (Performance Vesting),
incorporated herein by reference to Exhibit 10.5 to the
Companys
Form 8-K
filed June 23, 2006.
Non-Employee Director Compensation Plan, incorporated herein by
reference to Exhibit 10.2 to the Companys
Form 10-Q
for the quarter ended August 26, 2006.
Non-Employee Director Compensation Plan, as amended
March 4, 2007, incorporated herein by reference to
Exhibit 10.22.1 to the Companys
Form 10-K
for the year ended March 3, 2007.
Non-Employee Director Compensation Plan, as amended
March 25, 2008.
Benefit Restoration Plan I, as amended and restated
effective January 1, 2005, incorporated herein by reference
to Exhibit 10.1 to the Companys
Form 8-K
filed October 12, 2006.
75
Table of Contents
Benefit Restoration Plan II, as amended and restated effective
January 1, 2005, incorporated herein by reference to
Exhibit 10.2 to the Companys
Form 8-K
filed October 12, 2006.
Employment Agreement by and between Alexander W. Smith and Pier
1 Imports, Inc. dated February 19, 2007, incorporated
herein by reference to Exhibit 10.1 to the Companys
Form 8-K
filed January 30, 2007.
Form of Non-Qualified Stock Option Agreement between Alexander
W. Smith and Pier 1 Imports, Inc., incorporated herein by
reference to Exhibit 10.2 to the Companys
Form 8-K
filed January 30, 2007.
Form of Non-Qualified Stock Option Agreement between Alexander
W. Smith and Pier 1 Imports, Inc., incorporated herein by
reference to Exhibit 10.3 to the Companys
Form 8-K
filed January 30, 2007.
Credit Card Program Agreement by and among Pier 1 Imports
(U.S.), Inc. and Chase Bank USA, N.A., incorporated herein by
reference to Exhibit 10.3 to the Companys
Form 10-Q
for the quarter ended June 2, 2007.
Amendment No. 1 to the Credit Card Program Agreement by and
among Pier 1 Imports (U.S.), Inc. and Chase Bank USA, N.A.,
incorporated herein by reference to Exhibit 10.3 to the
Companys
Form 10-Q
for the quarter ended September 1, 2007.
Amendment No. 2 to the Credit Card Program Agreement by and
among Pier 1 Imports (U.S.), Inc. and Chase Bank USA, N.A.,
incorporated herein by reference to Exhibit 10.4 to the
Companys
Form 10-Q
for the quarter ended September 1, 2007.
Real Estate Purchase Agreement by and between Chesapeake Land
Company, L.L.C. and Pier 1 Services Company.
Subsidiaries of the Company.
Consent of Independent Registered Public Accounting Firm.
Certification of the Chief Executive Officer Pursuant to
Exchange Act
Rule 13a-14(a)/15d-14(a).
Certification of the Chief Financial Officer Pursuant to
Exchange Act
Rule 13a-14(a)/15d-14(a).
Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*
Management Contracts and Compensatory Plans
76
o | A lump sum payment which is the Actuarial Equivalent of the basic form of the Supplemental Retirement Benefit determined under Article IV of the Plan. | ||
o | A monthly joint and survivor annuity with payment continued to the survivor* at one hundred percent (100%). | ||
o | A monthly joint and survivor annuity with payment continued to the survivor* at fifty percent (50%) of the amount paid to the Participant. | ||
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*The survivor is the Beneficiary as defined in the Plan. |
(i) | The Change Election will not take effect until 12 months after the date on which the election is made; | ||
(ii) | If the Change Election relates to a payment other than a payment on account of disability or death (as such terms are defined under the regulations promulgated pursuant to Section 409A of the Code), the payment will be deferred for a period of 5 years after the date such payment is originally scheduled to occur (or in the |
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case of a life annuity or installment payments treated as a single payment, 5 years from the date the first amount was scheduled to be paid); and | |||
(iii) | If the Change Election relates to a payment which is defined as a payment at a specified time or pursuant to a fixed schedule under the regulations promulgated pursuant to Section 409A of the Code, the Change Election may not be made less than 12 months before the date the payment was originally scheduled to be paid (or, in the case of a life annuity or installment payments treated as a single payment, 12 months before the date the first amount was scheduled to be paid). |
Participant
:
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Pier 1 Imports, Inc.
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Senior Vice President and General Counsel, Secretary |
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Pier 1 Imports, Inc.,
a Delaware corporation |
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By: | ||||
Gregory S. Humenesky | ||||
Executive Vice President
March ___, 2008 |
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PIER 1 IMPORTS, INC.
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By: | ||||
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Non-Employee Director Annual Retainer
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$ | 150,000 | |||||
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Audit Committee Chair Annual Retainer
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$ | 25,000 | |||||
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Compensation Committee Chair Annual Retainer
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$ | 25,000 | |||||
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Nominating/Corporate Governance
Committee Chair Annual Retainer
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$ | 10,000 | |||||
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Non-Executive Chairman of the Board Annual Retainer
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$ | 75,000 |
| Pursuant to the Director Deferred Stock Unit Awards program set forth in the Pier 1 Imports, Inc. 2006 Stock Incentive Plan , as amended. | ||
| Each Non-Employee Director may elect to defer all or a portion of the remaining 50% (in whole percentages) of their non-mandatory deferred cash fees (i.e., director, committee chair and chairman annual retainers) for an upcoming fiscal year into an equivalent value of deferred stock units, provided that any such deferral election is made on or before and becomes irrevocable as of the December 31 immediately preceding such fiscal year and is effective for the entire fiscal year. | ||
| Deferrals of the director annual retainer both mandatory and voluntary (other than the portion of the deferral representing committee chair or chairman annual retainers) are credited with an additional 25% of the deferred amount. | ||
| At the time a Non-Employee Director ceases to be a Director of the Company, the deferred stock units credited to such Director at that time shall be adjusted by Pier 1 Imports to remove from the credited amount (i) any portion of the deferred stock units applicable to the time period following the Director ceasing to be a Director of the Company, plus (ii) an amount of deferred stock units equal to any cash compensation paid to the Non-Employee Director for such time period (such units to be valued as of the cash compensation payment date). |
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(a) | Copy of all leases and amendments thereto (if any); | ||
(b) | Copy of the most recent and year-to-date operating and financial statements for the Property; | ||
(c) | Legal description of the Property; | ||
(d) | Copy of the existing title policy; | ||
(e) | Any service or operating contracts; | ||
(f) | Any existing survey; | ||
(g) | Architectural and engineering drawings; | ||
(h) | Most recent real estate tax bills; | ||
(i) | A list of security deposits; | ||
(j) | Copy of physical, environmental or other engineering reports; | ||
(k) | Copy of warranties and guarantees; | ||
(l) | Copies of all correspondence and other information known to Seller relative to violations of law or insurance requirements; | ||
(m) | Copy of certificates of occupancy or compliance or other permits in Sellers possession applicable to the Property; | ||
(n) | Stipulated appraised value for the Land and Building for tax year 2008; and | ||
(o) | Copies of any tax abatement agreements relating to tax concessions granted with respect to the Property (collectively, Sellers Materials ). |
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Buyer: | Chesapeake Land Company, L.L.C. | ||
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6100 N. Western | |||
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Oklahoma City, OK 73118 | |||
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Attention: Chip Keating |
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Phone# (405) 879-8478 | |||
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Email: chip.keating@chk.com | |||
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Fax # (405) 879-8307 | |||
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With a Copy To: | Jackson Walker L.L.P. | ||
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301 Commerce Street, Suite 2400 | |||
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Fort Worth, Texas 76102 | |||
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Attention: Susan A. Halsey | |||
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Phone# (817) 334-7203 | |||
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Email: shalsey@jw.com | |||
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Fax # (405) 879-8307 | |||
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With a Courtesy Copy To: | The Staubach Company | ||
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201 Main Street, Suite 1810 | |||
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Fort Worth, Texas 76102 | |||
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Phone# (817) 334-8105 | |||
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Email: todd.burnette@staubach.com | |||
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Fax # (817) 334-8150 | |||
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Seller: | Pier 1 Services Company | ||
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100 Pier 1 Place | |||
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Fort Worth, TX 76102 | |||
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Attention: General Counsel | |||
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Phone # (817) 252-7630 | |||
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Email: macarter@pier1.com | |||
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Fax # (817) 252-7319 | |||
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With a Copy To: | J. Andrew Rogers | ||
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Kelly Hart & Hallman LLP | |||
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201 Main Street, Suite 2500 | |||
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Fort Worth, Texas 76102 | |||
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Phone# (817) 878-3546 | |||
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Email: andy.rogers@khh.com | |||
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Fax # (817) 878-9242 | |||
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Escrow Agent: | Sendera Title Company | ||
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6125 Interstate 20, Suite 118 | |||
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Fort Worth, TX 76132 | |||
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Attention: Nikki Jackson | |||
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Fax # (817) 263-6279 | |||
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Phone # (817) 263-4445 | |||
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Title Agent: | Rattikin Title Company | ||
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201 Main Street, Suite 800 | |||
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Fort Worth, TX 76102 | |||
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Attention: Larry Townsend |
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Phone# (817) 334-1324 | |||
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Fax # (817) 877-4237 | |||
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Email: ltownsend@rattikintitle.com |
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BUYER : | ||||||||||
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CHESAPEAKE LAND COMPANY, L.L.C.
,
an Oklahoma limited liability company |
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By: | |||||||||
Henry J. Hood, Senior Vice President | ||||||||||
Land and Legal & General Counsel | ||||||||||
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Date: | |||||||||
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SELLER : | ||||||||||
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PIER 1 SERVICES COMPANY, | ||||||||||
a Delaware statutory trust | ||||||||||
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By: |
Pier 1 Holdings, Inc.,
a Delaware corporation, its managing trustee |
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By: | |||||||||
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Date: | |||||||||
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A-i
B-i
File Number: 05-12755 | Policy Number: 7210043-36145 |
1. | The following restrictive covenants of record itemized below (the Company must either insert specific recording data or delete this exception): | |
Covenants as recorded in Cabinet A, Slide 10398, Deed Records of Tarrant County, Texas, but omitting any covenant or restriction based on race, color, religion, sex, handicap, familial status or national origin unless and only to the extent that said covenant (a) is exempt under Chapter 42, Section 3607 of the United States Code or (b) related to handicap but does not discriminate against handicapped persons. | ||
2. | Any discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements. | |
3. | Homestead or community property or survivorship rights, if any, of any spouse of any insured. | |
4. | Any titles or rights asserted by anyone, including but not limited to, persons, the public, corporations, governments or other entities. |
a. | to tidelands, or lands comprising the shores or beds of navigable or perennial rivers and streams, lakes, bays, gulfs or oceans, or | ||
b. | to lands beyond the line of the harbor or bulkhead lines as established or changed by any government, or | ||
c. | to filled-in lands, or artificial islands, or | ||
d. | to statutory water rights, including riparian rights, or | ||
e. | to the area extending from the line of mean low tide to the line of vegetation, or the right of access to that area or easement along and across that area. |
5. | Standby fees, taxes, and assessments by any taxing authority for the year 2006, and subsequent years; and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership, but not those taxes or assessments for prior years because of an exemption granted to a previous owner of the property under Section 11.13, Texas Tax Code, or because of improvements not assessed for a previous tax year. | |
6. | The following matters and all terms of the documents creating or offering evidence of the matters (The Company must insert matters or delete this exception.): |
a. | The following easements as shown by plat recorded in Cabinet A, Slide 10398, Deed Records of Tarrant County, Texas: | ||
A variable width drainage and utilities easement across the Northeast property corner | |||
A fifty foot (50') wide drainage easement across the Northeast portion of the property | |||
A variable width sanitary sewer easement along the Northeast side(s) of the property | |||
A thirty foot (30') wide sanitary sewer easement across the Northwest portion of the property |
B-ii
File Number: 05-12755 | Policy Number: 7210043-36145 |
B-iii
STATE OF TEXAS
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§ | |||
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§ | KNOW ALL MEN BY THESE PRESENTS: | ||
COUNTY OF TARRANT
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§ |
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GRANTOR : | ||||||||
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PIER 1 SERVICES COMPANY, | ||||||||
a Delaware statutory trusty | ||||||||
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By: | Pier 1 Holdings, Inc., | |||||||
a Delaware corporation, | ||||||||
its managing trustee | ||||||||
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By: | |||||||
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Name: |
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Title: |
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STATE OF TEXAS
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§ | |||
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§ | |||
COUNTY OF TARRANT
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D-i
STATE OF TEXAS
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§ | |||
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§ | KNOW ALL MEN BY THESE PRESENTS THAT: | ||
COUNTY OF TARRANT
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§ |
(i) | all fixtures and attached or affixed equipment situated in, on, or about and used in connection with the operation of the Property (Fixtures); | ||
(ii) | to the extent assignable, maintenance agreements, construction agreements, service agreements, contractors bonds, warranties, guaranties, rights of use, licenses, permits, contracts and other intangible rights held by the Assignor pertaining to the buildings, improvements, Fixtures, and/or other properties comprising the Real Property; | ||
(iii) | all master keys and master security cards to the Real Property in Assignors possession; | ||
(iv) | the furniture and equipment listed on Exhibit B attached hereto; and |
E-i
(v) | all furniture and equipment located on the Terrance Floor of the building (i.e., the cafeteria, kitchen and fitness room) as described in the Real Estate Purchase Agreement between the parties dated March ___, 2008. |
ASSIGNOR : | ||||||||
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PIER 1 SERVICES COMPANY, | ||||||||
a Delaware statutory trust | ||||||||
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By: | Pier 1 Holdings, Inc., | |||||||
a Delaware corporation, | ||||||||
its managing trustee | ||||||||
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By: | |||||||
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Name: |
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Title: |
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F-i
SELLER : | ||||||||
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PIER 1 SERVICES COMPANY, | ||||||||
a Delaware statutory trust | ||||||||
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By: | Pier 1 Holdings, Inc., | |||||||
a Delaware corporation, | ||||||||
its managing trustee | ||||||||
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By: | |||||||
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Name: |
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Title: |
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F-ii
Court:
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Tarrant County District Court, TX | |
Date Filed:
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8/29/06 | |
Description:
|
Pier 1 challenged the appraised value the Tarrant Appraisal District (TAD) placed on the Pier 1 corporate headquarters property for the 2006 tax year. TAD conducted a hearing on 07/05/06 and failed to reduce the appraised value of the property. | |
Status:
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8/31/06, Complaint served. 10/05/06, Defendant has filed an Answer. On 02/26/08, the parties agreed to settle this lawsuit at an agreed value of $65,623,260 for the 2006 tax year. An Agreed Judgment is being prepared for the parties signatures. As a part of the settlement of this lawsuit and the 2007 TAD lawsuit below, the parties have signed a stipulation of agreed value of $66,092,936 for the 2008 tax year. The parties will sign a settlement and waiver for the agreed 2008 value. | |
Attorney:
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Kelley B. Hill | |
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Pennington Hill, L.L.P. | |
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1010 Mustang Drive, Suite 101 | |
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Grapevine, TX 76051 | |
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(817) 488-3600 / Fax (817) 488-4545 |
Court:
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County District Court, TX | |
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Date Filed:
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9/4/07 | |
Description:
|
Pier 1 challenged the appraised value the Tarrant Appraisal District (TAD) placed on the Pier 1 corporate headquarters property for the 2007 tax year. TAD conducted a hearing on 07/11/07 and failed to reduce the appraised value of the property. | |
Status:
|
9/4/07, lawsuit was filed. 10/9/07, Received copy of original Answer by TAD. On 02/26/08, the parties agreed to settle this lawsuit at an agreed value of $65,623,260 for the 2007 tax year. An Agreed Judgment is being prepared for the parties signatures. As part of the settlement of this lawsuit and the 2006 TAD lawsuit above, the parties have signed a stipulation of agreed value of $66,092,936 for the 2008 tax year. The parties will sign a settlement and waiver for the agreed 2008 value. |
F-i
Attorney:
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Kelley B. Hill | |
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Pennington Hill, L.L.P. | |
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1010 Mustang Drive, Suite 101 | |
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Grapevine, TX 76051 | |
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(817) 488-3600 / Fax (817) 488-4545 |
| The Property may become part of the Trinity River Vision Project or variations of that project. | ||
| The Property is within the boundaries of the Fort Worth Public Improvement District No. 1 and Tarrant County Water Control Improvement District No. 1 and is subject to the authority of those districts as they may exist from time to time. | ||
| The whole or a portion of the Property may lie within one or more floodplains of the Trinity River. | ||
| The whole or a portion of the Property may lie within an abandoned oxbow of the Trinity River and the subsurface of the Property consist of fill materials placed there by the Army Corp of Engineers during construction of the Trinity River levies and associated river channel work after the floods of the mid 20 th century. | ||
| One or more underground storage tanks have been removed from the property by Seller and its predecessor in interest. | ||
| The Property has one or more subsurface sumps and pumps to handle subsurface water. | ||
| The Property is encumbered by Deed of Trust, Security Agreement, and Assignment of Rents dated May 31, 2007, from Pier 1 Services Company to James C. Chadwick, Trustee, securing the payment of one note of even date therewith in the original principal sum of $2,000,000.00, payable to Bank of America, N.A., said Deed of Trust filed for record under Clerks File No. D207188261, Deed Records of Tarrant County, Texas. This Deed of Trust will be released at closing. |
F-ii
1. | I have reviewed this annual report on Form 10-K of Pier 1 Imports, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date:
May 7, 2008
|
By: |
/s/ Alexander W. Smith
and Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Pier 1 Imports, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date:
May 7, 2008
|
By: |
/s/ Charles H. Turner
Chief Financial Officer |
1. | The annual report of Pier 1 Imports, Inc. for the period ended March 1, 2008 fully complies with the requirements of sections 13(a) and 15(d) of the Securities Exchange Act of 1934; and | ||
2. | The information contained in the above-mentioned report fairly presents, in all material respects, the financial condition and results of operations of Pier 1 Imports, Inc. for the period covered by the report. |
Date:
May 7, 2008
|
By: |
/s/ Alexander W. Smith
and Chief Executive Officer |
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Date:
May 7, 2008
|
By: |
/s/ Charles H. Turner
Chief Financial Officer |