SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): May 31, 2005
J. C. PENNEY COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-15274 26-0037077
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation ) Identification No.)
6501 Legacy Drive
Plano, Texas 75024-3698
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (972) 431-1000
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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 13d-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 9.01 Financial Statements and Exhibits.
Attached are the following forms of award under the J. C. Penney Company,
Inc. 2005 Equity Compensation Plan:
Exhibit 10.1 Form of Notice of Stock Option(s), Special Stock Option Grant
Exhibit 10.2 Form of Notice of Restricted Stock Unit Award
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.
J. C. PENNEY COMPANY, INC.
By: /s/ Jeffrey J. Vawrinek
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Jeffrey J. Vawrinek
Assistant Secretary
Date: May 31, 2005
EXHIBIT INDEX
Exhibit Number Description
Exhibit 10.1 Form of Notice of Stock Option(s), Special Stock Option Grant
Exhibit 10.2 Form of Notice of Restricted Stock Unit Award
Exhibit 10.1
JCPenney
J. C. Penney Company, Inc.
2005 Equity
Compensation Plan
Stock Option Program
Notice of Grant of Stock Option(s)
Special Stock Option Grant
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Name Date of Grant Option Price Per Share $
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Employee ID Unit Number Area of Responsibility / District Number
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Number of NSO Shares Granted
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This Notice of Non-Qualified (also known as "Non-Statutory") Stock Option
("NSO") gives you the right to purchase the total number of shares of Common
Stock of 50 cent par value ("Common Stock") of J. C. Penney Company, Inc.
("Company") at the price per share as shown above. This option is subject to all
the terms, rules, and conditions of the J. C. Penney Company, Inc. 2005 Equity
Compensation Plan ("Plan") and the implementing resolutions ("Resolutions")
approved by the Human Resources and Compensation Committee of the Board of
Directors. Capitalized terms not otherwise defined herein shall have the
respective meanings assigned to them in the Plan and the Resolutions. The option
price and number of shares will be adjusted as provided in the Plan in the event
of a stock dividend, stock split, recapitalization, merger, consolidation,
combination or exchange of shares, spinoff, distribution to holders of Common
Stock other than cash dividends, or the like.
Terms of Exercise
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Effective Exercise Date
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When an option exercise instruction is given in conjunction with a sell order
for the underlying stock that is a Sell-to-Cover Order, a Same-Day-Sale Exercise
Order, a Limit Order or a Good-till Cancelled Order, the effective exercise date
shall be the date on which such sale order is executed. For a Cash Payment
(Exercise and Hold) transaction, the effective exercise date will be the date
the requisite funds are received by the Company at its home office in Plano,
Texas, or such other location as the Company may designate, or by a third party
duly designated by the Company at the offices of such third party. For a Stock
Payment transaction, the effective exercise date will be the date the properly
completed option exercise form/instructions and any necessary accompanying
documents and payment are received by the Company at its home office in Plano,
Texas, or such other location as the Company may designate, or by a third party
duly designated by the Company at the offices of such third party. Exercise
instructions received after the close of the New York Stock Exchange for the day
shall be deemed received as of the opening of the next Business Day (a "Business
Day" being any day on which the New York Stock Exchange is open and operating).
An effective exercise date shall never mean a non-Business Day. If any
"effective exercise date," as defined above, falls on a day Common Stock is not
traded, all transactions will be postponed until the next trading day, and the
effective exercise date will be deemed to be the next trading date, unless such
day is after the Normal Expiration Date (as defined below), in which case the
option will expire.
Transferability
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This option may be assigned or transferred by will or the laws of descent and
distribution. No Stock Option will be exercisable except by you or (a) upon your
incapacity, by your guardian or legal representative, or (b) upon your death, by
the beneficiary you have designated on the JCPenney Company Paid-Life Insurance
Beneficiary Designation form or in the absence of such beneficiary, your legal
representative (collectively, "Legal Transferees").
Date Option Becomes Exercisable
-------------------------------
This option will become exercisable ("vest") over a three-year period in
accordance with the following schedule:
Normal Exercise Dates No. of Options that will vest
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This option will be 100% vested on (date).
However, 100% of this option becomes immediately exercisable, without regard to
this date, upon a "Change of Control" (as defined in Attachment A) of the
Company, and 100% of this option becomes immediately exercisable, without regard
to this date, in the event of your employment termination due to retirement,
death, disability, or reduction in force/unit closing as described below.
Additional Exercise Terms Of This Option Are:
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While you are Employed
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While you are employed by the Company, subsidiary, or other entity affiliated
with the Company, you may exercise vested options any time on or after the
Normal Exercise Dates until the Expiration Date of (date) ("Normal Expiration
Date"). This option can be exercised by:
o Cash Payment Method (Exercise and Hold)
o Stock Payment Method
o Same-Day-Sale Method
o Sell To Cover Method
After your Employment Termination
---------------------------------
In all cases, the option exercise period following termination of employment
cannot extend beyond the applicable date described below or the Normal
Expiration Date, whichever comes first.
1) Retirement or Disability: If your employment terminates due to your:
o Retirement at age 60 or more,
o Retirement between ages 55 and 59 with at least 15 years of service, or
o Disability,
before the final Normal Exercise Date, 100% of this option will become
immediately exercisable on such employment termination. This option may be
exercised for a period of five years after such employment termination or
until the option's Normal Expiration Date, whichever comes first.
If your employment terminates due to any of the three circumstances listed
above on or after the final Normal Exercise Date, this option may be
exercised for a period of five years after employment termination or until
the option's Normal Expiration Date, whichever comes first.
2) Reduction in Force or Unit Closing - If your employment terminates due to a
reduction in force or unit closing before the final Normal Exercise Date,
100% of this option will become immediately exercisable on such employment
termination. This option may be exercised for a period of three years after
such employment termination or until the option's Normal Expiration Date,
whichever comes first.
If your employment terminates due to a reduction in force or unit closing
on or after the final Normal Exercise Date, this option may be exercised
for a period of three years after employment termination or until the
option's Normal Expiration Date, whichever comes first.
3) Resignation, Discretionary Dismissal or Resignation in Lieu of
Discretionary Dismissal (excluding Reduction In Force or Unit Closing): If
your employment terminates due to your resignation, discretionary dismissal
or resignation in lieu of a discretionary dismissal, then this option will
expire as of the date of your employment separation.
4) Death: If your employment terminates due to your death before the final
Normal Exercise Date, 100% of this option will become immediately
exercisable on such employment termination. Such exercise must be made by
your Legal Transferee, and must be made within two years after your date of
death; provided, however, that in no event may such exercise be made after
the Normal Expiration Date.
If you die on or after the final Normal Exercise Date and: a) while
employed by the Company; b) during the five-year post-termination exercise
period described above for termination due to retirement or disability; or
c) during the three-year post-termination exercise period described above
for termination due to reduction in force or unit closing, your Legal
Transferee may exercise this option for a period of two years following
your date of death. However, in no event can the exercise period after
death extend beyond the option's Normal Expiration Date. In most cases,
special documentation will be required to exercise an option after your
death.
5) Summary Dismissal or Resignation in Lieu of Summary Dismissal: If you are
given a Summary Dismissal, or allowed to resign in lieu of a Summary
Dismissal, then this option will expire as of the date of your employment
separation.
This stock option grant does not constitute an employment contract. It does not
guarantee employment for the length of the vesting period or for any portion
thereof.
Attachment A
A Change of Control Event will have occurred if there is a change of ownership,
a change of effective control, or a change in ownership of a substantial portion
of the assets of the Company.
1. Change of ownership occurs on the date that a person or persons acting as a
group acquires ownership of stock of the Company that together with stock
held by the such person or group constitutes more than 50 percent of the
total fair market value or total voting power of the stock of such
corporation.
2. Notwithstanding whether the Company has undergone a change of ownership, a
Change of Effective control occurs (a) when a person or persons acting as a
group acquires within a 12-month period 35 percent of total voting power of
the stock of the Company or (b) a majority of the board of Directors is
replaced within 12 months if not previously approved by a majority of the
members. A change in effective control also may occur in any transaction in
which either of the two corporations involved in the transaction has a
Change in Control Event, i.e. multiple change in control events.
3. Change in ownership of a substantial portion of the Company's assets occurs
when a person or persons acting as a group acquires assets that have at
total gross fair market value equal to or more than 40 percent of the total
fair market of all assets of the Company immediately prior to the
acquisition. A transfer of assets by the Company is not treated as a change
in the ownership of such assets if the assets are transferred to -
(i) A shareholder of the Company (immediately before the asset transfer)
in exchange for or with respect to its stock;
(ii) An entity, 50 percent or more of the total value or voting power of
which is owned, directly or indirectly, by the Company;
(iii)A person, or more than one person acting as a group, that owns,
directly or indirectly, 50 percent or more of the total value or
voting power of all the outstanding stock of the Company; or
(iv) An entity, at least 50 percent of the total value or voting power of
which is owned, directly or indirectly, by a person described in
paragraph (iii).
Persons will not be considered to be acting as a group solely because they
purchase assets of the Company at the same time, or as a result of the same
public offering. However persons will be considered to be acting as a group
if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of assets, or similar business
transaction with the Company.
Exhibit 10.2
NOTICE OF RESTRICTED STOCK UNIT AWARD
Name:
Restricted Stock Unit Grant
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A restricted stock unit award for (number) units was granted to you on (date).
Each restricted stock unit shall at all times be deemed to have a value equal to
the then-current fair market value of J. C. Penney Company, Inc. ("Company")
Common Stock of 50(cent) par value ("Common Stock"). This grant is subject to
all the terms, rules, and conditions of the J. C. Penney Company, Inc. 2005
Equity Compensation Plan ("Plan") and the implementing resolutions approved by
the Human Resources and Compensation Committee of the Board of Directors.
The restricted stock unit award shall vest in accordance with the following
schedule provided you are still actively employed on the vesting dates with no
interruption of employment with the Company:
Amount of Total Restricted Stock
Scheduled Vesting Date Units Vesting
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You will be eligible to be credited with a quarterly distribution of an amount
equivalent to the dividend declared on Common Stock on the restricted stock
units until such time as the units are converted to shares of Common Stock. Any
such dividends shall be converted into a number of additional restricted stock
units equal to the aggregate dividend which would have been paid with respect to
the number of restricted stock units then credited to you under this grant
divided by the closing price of the Company Stock on the New York Stock Exchange
on the day on which such dividends are paid. Any such additional restricted
stock units shall vest and be paid out along with the underlying restricted
stock units.
Employment Termination
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If your employment terminates due to death or Disability, the restricted stock
unit grant will immediately vest with no further restrictions. Upon any other
termination, any unvested restricted stock units will be forfeited. The
beneficiary listed on your J. C. Penney Company, Inc., Company-Paid Life
Insurance Beneficiary Designation Form will receive the vested shares covered by
the restricted stock unit award in the case of termination of employment due to
death. If your termination occurs for reasons other than death, you will be
required to wait until six months after such termination date before receiving
such vested shares.
Taxes and Withholding
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At the time the restricted stock units vest, the Company will issue to you, in
cancellation of the restricted stock units, shares of Common Stock. The fair
market value of the shares (the opening JCPenney stock price on the NYSE
multiplied by the number of vested shares) will be included in your W-2 form and
the Company will be required to withhold applicable taxes on such shares. The
Company may collect any withholding taxes due by requesting you send the
withholding amount, by deducting the required amount from your paycheck or other
payment or by retaining and canceling the number of vested shares equal to the
value of the required tax withholding.
Transferability
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Any non-vested restricted stock units are non-transferable.
Effect on Other Benefits
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The value of the shares covered by the restricted stock unit grant will not be
included as compensation or earnings for purposes of any other compensation,
retirement, or benefit plan offered to Company associates.
Change of Control
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The restricted stock unit award vests immediately without regard to the vesting
dates listed above upon a Change of Control of the Company (as defined in
Attachment A).
Administration
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The Human Resources and Compensation Committee of the Company's Board of
Directors has full authority and discretion to decide all matters relating to
the administration and interpretation of the Plan and this award and all such
Committee determinations shall be final, conclusive, and binding.
Attachment A
A Change of Control Event will have occurred if there is a change of ownership,
a change of effective control, or a change in ownership of a substantial portion
of the assets of the Company.
1. Change of ownership occurs on the date that a person or persons acting as a
group acquires ownership of stock of the Company that together with stock
held by the such person or group constitutes more than 50 percent of the
total fair market value or total voting power of the stock of such
corporation.
2. Notwithstanding whether the Company has undergone a change of ownership, a
Change of Effective control occurs (a) when a person or persons acting as a
group acquires within a 12-month period 35 percent of total voting power of
the stock of the Company or (b) a majority of the board of Directors is
replaced within 12 months if not previously approved by a majority of the
members. A change in effective control also may occur in any transaction in
which either of the two corporations involved in the transaction has a
Change in Control Event, i.e. multiple change in control events.
3. Change in ownership of a substantial portion of the Company's assets occurs
when a person or persons acting as a group acquires assets that have at
total gross fair market value equal to or more than 40 percent of the total
fair market of all assets of the Company immediately prior to the
acquisition. A transfer of assets by the Company is not treated as a change
in the ownership of such assets if the assets are transferred to -
(i) A shareholder of the Company (immediately before the asset transfer)
in exchange for or with respect to its stock;
(ii) An entity, 50 percent or more of the total value or voting power of
which is owned, directly or indirectly, by the Company;
(iii)A person, or more than one person acting as a group, that owns,
directly or indirectly, 50 percent or more of the total value or
voting power of all the outstanding stock of the Company; or
(iv) An entity, at least 50 percent of the total value or voting power of
which is owned, directly or indirectly, by a person described in
paragraph (iii).
Persons will not be considered to be acting as a group solely because they
purchase assets of the Company at the same time, or as a result of the same
public offering. However persons will be considered to be acting as a group
if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of assets, or similar business
transaction with the Company.