Current Report Filing (8-k)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 18, 2019

 

 

PIER 1 IMPORTS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-07832		75-1729843
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)
100 Pier 1 Place Fort Worth, Texas				76102
(Address of principal executive offices)				(Zip Code)

Registrant’s telephone number, including area code: [phone]

Not Applicable

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		PIR		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

---

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of President

On July 19, 2019, Pier 1 Imports, Inc. (the “Company”) announced that Douglas (Doug) A. Diemoz, age 51, has been appointed to serve as the President of the Company. The Board of Directors of the Company (the “Board”) approved the appointment of Mr. Diemoz on July 18, 2019. Mr. Diemoz will start his employment on July 22, 2019, and become an executive officer of the Company at that time. Mr. Diemoz will report to Cheryl A. Bachelder, the Interim Chief Executive Officer of the Company, and will be responsible for the day-to-day operation and performance of the Company’s business, to include the functions of merchandise buying, planning and allocations, marketing, field and e-Commerce operations, global supply chain, information technology and human resources. He will be accountable for delivering the fiscal plan, as approved by the Board.

From July 2015 to April 2017, Mr. Diemoz served as Chief Executive Officer of Crate & Barrel (the corporate name of which is Euromarket Designs, Inc. and which is wholly-owned by Otto GmbH & Co. KG), which operates a chain of retail stores specializing in housewares, furniture and home accessories and also offers online shopping. From March 2014 to July 2015, Mr. Diemoz served as Chief Development Officer of Restoration Hardware Inc., a home-furnishings company selling its merchandise through its retail stores, catalog and online. Prior thereto, he served in leadership positions with MEXX, an international fashion company based in The Netherlands (from 2011-2013, with his last position being Chief Executive Officer (from 2012-2013)), Williams-Sonoma, Inc., a consumer retail company selling kitchenwares and home furnishings (from 2002-2011, with his last position being Senior Vice President, Pottery Barn Brands Financial Operations (from 2007-2011)) and The Gap, Inc., a clothing and accessories retailer (from 1997-2002, with his last position being Senior Director Finance, Old Navy Division (from 2001-2002)).

The Company has determined that neither Mr. Diemoz nor any of his immediate family members has had (nor does any propose to have) a direct or indirect interest in any transaction in which the Company or any of the Company’s subsidiaries was (or is proposed to be) a participant, that would be required to be disclosed under Item 404(a) of SEC Regulation S-K. In addition, the Company has determined that there are no family relationships between Mr. Diemoz and any current executive officer or director of the Company.

The terms of Mr. Diemoz’s employment are set forth in an offer letter (which includes an Employment Term Sheet), dated July 15, 2019, from the Company’s employing subsidiary Pier 1 Services Company (Pier 1 Services Company and Pier 1 Imports, Inc. are collectively referred to as “Pier 1”) to Mr. Diemoz, and accepted by Mr. Diemoz on July 15, 2019 (the “Employment Letter”). Pursuant to the Employment Letter, Mr. Diemoz will receive a base salary of $1,000,000 per year, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”). He will be eligible pursuant to Pier 1’s short-term incentive program to earn a target annual cash incentive payment of 125% of his base salary, prorated based on the date Mr. Diemoz commences employment, for the remainder of the fiscal year ending February 29, 2020 (“Fiscal 2020”), and then in the fiscal year ending February 27, 2021 (“Fiscal 2021”) and future years will participate in Pier 1’s annual short-term cash incentive program at a level commensurate with other senior officers as determined by the Compensation Committee. He will receive a sign on bonus of $700,000 upon completing 60 days of employment with Pier 1 that is subject to clawback by Pier 1 if his employment is terminated by Pier 1 for “cause” or by Mr. Diemoz “without good reason” (as such terms are defined in the Executive Agreement described below) within 12 months after his employment begins, pursuant to a Sign-On Bonus Repayment Agreement.

Upon the commencement of his employment, Mr. Diemoz will receive a grant of restricted stock units (“RSUs”) having a grant date value of $1,500,000 (150% of his base salary) awarded as follows:

 

•

37,500 stock-settled RSUs (the “Stock-Settled RSUs”) which will vest and settle in shares of the Company’s common stock on a one-for-one basis in equal annual installments on the first, second and third anniversaries of the grant date, subject to Mr. Diemoz’s continued employment with Pier 1; and

 

•

a number of cash-settled RSUs (the “Cash-Settled RSUs”) having a grant date value equal to $1,500,000 less the grant date value of the Stock-Settled RSUs (with the grant date value based on a 30-day trailing average closing price of the Company’s common stock). The Cash-Settled RSUs will vest and settle in cash (based on the closing price of the Company’s common stock on the vesting date) in equal annual installments on the first, second and third anniversaries of the grant date, subject to Mr. Diemoz’s continued employment with Pier 1. Alternatively, Pier 1 may determine to settle the award of Cash-Settled RSUs in shares of the Company’s common stock on a one-for-one basis.

The Stock-Settled RSUs and the Cash-Settled RSUs will vest in full in the event Mr. Diemoz’s employment is terminated by Pier 1 without “cause” or by Mr. Diemoz for “good reason” (as such terms are defined in the Executive Agreement described below).

Mr. Diemoz will be eligible for grants of future equity awards under Pier 1’s long-term incentive plan at a level commensurate with other senior officers, as determined by the Compensation Committee.

 

2

---

Mr. Diemoz will receive a relocation payment of up to $90,000 in accordance with Pier 1’s standard relocation policy, subject to pro rata clawback if his employment is terminated by Pier 1 for “cause” or by Mr. Diemoz without “good reason” (as such terms are defined in the Executive Agreement described below) within 12 months after his employment begins.

The summary of the terms applicable to Mr. Diemoz’s employment set forth herein is qualified in its entirety by reference to the Employment Letter and the Sign-On Bonus Repayment Agreement, which are included with this Current Report on Form 8-K as Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated herein by reference.

Upon the commencement of his employment, Mr. Diemoz and the Company will enter into an Executive Agreement (the “Executive Agreement”), the terms of which are summarized below.

Term.  The Executive Agreement will have an initial two-year term, followed by automatic renewal on an annual basis, unless otherwise terminated by the Company or Mr. Diemoz by providing notification to the contrary at least 90 days prior to the date on which the additional term would have automatically began. However, if a change of control (as defined in the Executive Agreement) occurs during the original term or an additional term, the term of the Executive Agreement will extend until the later of the expiration of the original term or the additional term, as applicable, or the 18-month anniversary of such change of control.

Benefits . If Mr. Diemoz’s employment terminates during the term of the Executive Agreement, the Company will, in all cases, pay Mr. Diemoz all accrued but unpaid compensation earned by Mr. Diemoz through the date of termination.

If the employment of Mr. Diemoz is terminated by the Company without “cause” (as defined in the Executive Agreement) other than as a result of his death or disability, or Mr. Diemoz for “good reason” (as defined in the Executive Agreement) during the term (other than during the three months prior to, or the 18 months following, a change of control) and Mr. Diemoz executes a release of claims acceptable to the Company, the Company will pay the following:

 

•

salary continuation in bi-weekly installments for 12 months following the termination date;

 

•

a pro-rated portion of Mr. Diemoz’s bonus under the short-term cash bonus plan of the Company in which Mr. Diemoz was eligible to participate in the year of the termination date, based on actual performance during the applicable bonus period and the number of days in such bonus period that elapse prior to the termination date;

 

•

a lump sum equal to the monthly cost (including any portion of the cost paid by Mr. Diemoz) to provide group medical, dental, vision and/or prescription drug plan benefits sponsored by the Company and maintained by Mr. Diemoz as of the termination date, multiplied by 12; and

 

•

reasonable outplacement services for up to 12 months following the termination date.

If the employment of Mr. Diemoz is terminated by the Company without cause, due to Mr. Diemoz’s death or disability or by Mr. Diemoz for good reason, in each case during the three months prior to, or the 18 months following, a change of control and Mr. Diemoz executes a release of claims acceptable to the Company, the Company will pay the following:

 

•

a lump sum equal to 24 months of Mr. Diemoz’s base salary in effect on the termination date;

 

•

a lump sum equal to the monthly cost (including any portion of the cost paid by Mr. Diemoz) to provide group medical, dental, vision and/or prescription drug plan benefits sponsored by the Company and maintained by Mr. Diemoz as of the termination date, multiplied by 24; and

 

•

reasonable outplacement services for up to 12 months following the termination date.

Upon the termination of Mr. Diemoz’s employment for any reason, any outstanding equity awards held by Mr. Diemoz will vest (if at all) in accordance with the terms of the respective award agreements.

Restrictive Covenants . The Executive Agreement will impose various restrictive covenants on Mr. Diemoz, including non-competition, non-solicitation, non-disparagement, and confidentiality covenants. The non-competition covenant will prohibit Mr. Diemoz from engaging in certain activities with identified competitors of the Company during his employment and for a period of 12 months after the termination of his employment (or for a period of 18 months if the termination occurs during the three months prior to, or the 18 months following, a change of control). The non-solicitation covenant will prohibit Mr. Diemoz from engaging in certain solicitation activities during his employment and for a period of 12 months after the termination of his employment.

 

3

---

The foregoing summary of the terms of the Executive Agreement is qualified in its entirety by reference to the form of Executive Agreement, which is included with this Current Report on Form 8-K as Exhibit 10.3 and incorporated herein by reference.

Formation of Office of the Chief Executive Officer

On July 18, 2019, the Board formed the Office of the Chief Executive Officer with the purpose to allow for effective management of the Company’s business during the transition in leadership and the further implementation of the Company’s action plan. The members of the Office of the Chief Executive Officer are: (i) Cheryl A. Bachelder, in her capacity as the Interim Chief Executive Officer of the Company; (ii) Mr. Diemoz, in his capacity as the President of the Company; (iii) Robert J. Riesbeck, in his capacity as the Chief Financial Officer of the Company; and (iv) Robert E. Bostrom, in his capacity as the Chief Legal and Compliance Officer and Corporate Secretary of the Company. Ms. Bachelder, in her capacity as the Interim Chief Executive Officer of the Company, will lead the Office of the Chief Executive Officer, with each of the other members of the Office of the Chief Executive Officer reporting to Ms. Bachelder.

In furtherance of Ms. Bachelder’s positions as the Interim Chief Executive Officer of the Company and the leader of the Office of the Chief Executive Officer, the Board has delegated to Ms. Bachelder the following additional duties and responsibilities:

 

•

guiding, supervising and directing the implementation of the strategies adopted by the Company, including being responsible for the analysis and consideration of strategic alternatives;

 

•

reviewing periodically the Company’s overall vision, business plan, financial performance and other activities with the President of the Company;

 

•

providing counsel, advice and support to the management team of the Company, including the members of the Office of the Chief Executive Officer;

 

•

advising and mentoring the new President of the Company, and assisting with the President’s transition to his new role;

 

•

serving as the liaison between the Board and the President of the Company on sensitive issues, as appropriate;

 

•

being available to speak on behalf of the Company, when appropriate, to investment analysts, participating in earnings calls and providing guidance to the President of the Company, in the event the President of the Company is to participate in earnings calls; and

 

•

assisting the President of the Company, when appropriate, with developing and enhancing key relationships externally, including with shareholders of the Company, investment analysts and the community.

 

Item 8.01

Other Events.

On July 19, 2019, the Company issued a news release announcing the appointment of Mr. Diemoz to serve as the President of the Company. A copy of this news release is included as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

Item 9.01

Financial Statements and Exhibits.

(a)-(c) Not applicable.

 

4

---

(d) Exhibits :

The following exhibits are included with this Current Report on Form 8-K:

 

Exhibit No.		Description
10.1		Offer letter (including Employment Term Sheet), dated July 15, 2019, from Pier 1 Services Company to Doug Diemoz, as accepted by Mr. Diemoz on July 15, 2019
10.2		Form of Sign-On Bonus Repayment Agreement to be entered into between Pier 1 Services Company and Douglas A. Diemoz
10.3		Form of Executive Agreement to be entered into between Pier 1 Imports, Inc. and Douglas A. Diemoz
99.1		News Release issued by Pier 1 Imports, Inc. on July 19, 2019

[Remainder of page intentionally left blank; signature page follows.]

 

5

---

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 hereunto duly authorized.

 

						PIER 1 IMPORTS, INC.
Date: July 19, 2019				By:		/s/ Robert E. Bostrom
						Robert E. Bostrom, Chief Legal and Compliance Officer and Corporate Secretary

 

6