J. C. Penney Company, Inc. Form 8-K
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): February 28, 2007
J.
C. PENNEY COMPANY, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction
of
incorporation )
|
1-15274
(Commission
File No.)
|
26-0037077
(I.R.S.
Employer Identification No.)
|
|
6501
Legacy Drive
Plano,
Texas
(Address
of principal executive offices)
|
75024-3698
(Zip
code)
|
Registrant's
telephone number, including area code: (972)
431-1000
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(b) under the Exchange
Act (17 CFR 240.13e-4(b))
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers
(e) (1) 2006
Incentive Compensation Award, 2007 Base Salary, 2007 Target Incentive
Opportunity, and 2007 Equity Award for CEO. Pursuant
to the J. C. Penney Corporation, Inc. Management Incentive Compensation Program
(“Incentive Program”), annual cash incentive compensation is awarded to eligible
associates based upon the achievement of pre-set performance goals. For the
Company’s executive officers, incentive compensation payouts are measured (i)
50% based upon total Company sales and operating profit from continuing
operations, and (ii) 50% based upon the executive officer’s individual
performance. On February 28, 2007, the independent members of the Company’s
Board of Directors (“Board”) determined the Incentive Program payment amount for
fiscal 2006 for Myron E. Ullman, III, Chairman and Chief Executive Officer
(“CEO”) of the Company. Based upon an assessment to be discussed in the
Compensation Discussion and Analysis section of the Company’s 2007 proxy
statement, which will be filed with the Securities and Exchange Commission
and
posted on the Company’s website, the independent directors awarded Mr. Ullman a
cash incentive payment of $2,673,750 for fiscal 2006.
On
February 28, 2007, the independent members of the Board also set Mr. Ullman’s
2007 base salary at $1,500,000 and approved his 2007 target incentive
opportunity percentage under the Incentive Program, which was set at 125% of
Mr.
Ullman’s base salary. The independent directors of the Board further determined
that Mr. Ullman’s 2007 equity award value should be set at $8,000,000 to be
delivered half in the form of stock options and half as performance-based
restricted stock units under the Company’s 2005 Equity Compensation Plan. Mr.
Ullman’s equity award will be effective at the time of the Company’s annual
grant of equity awards, which will occur in March 2007.
Each
of these determinations will be discussed in the Compensation Discussion and
Analysis section of the Company’s 2007 proxy statement, which will be filed with
the Securities and Exchange Commission and posted on the Company’s website.
(2)
Management Incentive Compensation Program Amendments. On
February 28, 2007, the independent directors of the Board approved amendments
to
the Incentive Program which prevent termination of the Incentive Program and
amendments to the Incentive Program that would reduce the compensation payable
thereunder within one year prior to or two years after a change in control
of J.
C. Penney Company, Inc. or J. C. Penney Corporation, Inc. A copy of the amended
and restated Incentive Program is filed herewith as Exhibit 10.1 and is
incorporated herein by reference.
Also,
the Human Resources and Compensation Committee of the Board (“HRCC”) approved a
change to the administration of the Incentive Program to provide that if (i)
an
associate is terminated for cause at any time on or before the payment date
of
incentive compensation under the Incentive Program, or (ii) an associate
voluntarily terminates employment on or before the last day of the fiscal year,
other than for retirement at or after age 60, retirement between ages 55 and
59
with at least 15 years of service, or due to permanent and total disability,
such associate shall not be entitled to receive compensation under the Incentive
Program for such year.
(3)
Mirror Savings Plan Amendments. On
February 28, 2007, the HRCC amended the J. C. Penney Corporation, Inc. Mirror
Savings Plan to clarify that the Company matching contribution is available
to
participants hired both before and after January 1, 2007, and to synchronize
the
accelerated vesting provisions applicable to the Company match, retirement,
and
discretionary contribution accounts for associates terminating employment at
or
after age 65, or due to disability, death, or a Company-approved reduction
in
force or unit closing. A copy of the amended and restated Mirror Savings Plan
is
filed herewith as Exhibit 10.2 and is incorporated herein by
reference.
(4)
Change in Control Plan Amendments.
On February 28, 2007, the Board approved certain amendments to the J. C. Penney
Corporation, Inc. Change in Control Plan (the “Plan”). The purpose of the
amendments is to (i) clarify the definition of Employment Termination under
the
Plan; (ii) clarify that when employment termination occurs on the last day
of
the fiscal year the incentive compensation benefit payable under the Plan will
be the greater of 100% of the target award under the Incentive Program or the
actual Incentive Program payout earned; (iii) clarify that there will be no
double counting of age and/or service credit when determining the retirement
benefit due under the Plan because of a provision in an underlying retirement
plan that also provides for age and/or service credit; and (iv) modify the
additional years of age and service credit provided under the Plan to make
them
consistent with similar provisions under the Company’s retiree medical, dental,
discount and life insurance plans. A copy of the amended and restated Plan
is
filed herewith as Exhibit 10.3 and incorporated herein by reference.
Item
5.03 Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year
On
February 28, 2007, the Board amended Article II, Section 8 of the Company's
Bylaws with respect to the manner in which directors of the Company are to
be
elected. A copy of the Company's Bylaws, as amended, is filed herewith as
Exhibit 3.1 and is incorporated herein by reference.
Item
8.01 Other
Events
On
February 28, 2007, the Board approved revised Corporate Governance Guidelines,
which, among other things, (i) include a new policy on review and consideration
of related person transactions, and (ii) clarify the Board’s policy regarding
recovery of compensation from a participant in the Company’s compensation plans
or programs in the event of a financial restatement arising out of the willful
actions or gross negligence of such participant. Also, on February 28, 2007,
the
HRCC adopted stock ownership goals for members of the Company’s Executive Board,
which are intended to further align the interests of the Company’s senior
management with the interests of the Company’s stockholders. Under these
ownership goals, members of the Company’s senior management team are expected to
own a number of shares valued at a specified multiple of the executive’s annual
base salary, ranging from one times base salary for Senior Vice Presidents
and
Executive Vice Presidents to five times base salary for the CEO. The stock
ownership goals are set forth in the Corporate Governance Guidelines. A copy
of
the revised Corporate Governance Guidelines is filed herewith as Exhibit 99.1.
Item
9.01 Financial
Statements and Exhibits
Exhibit
3.1
J.
C. Penney Company, Inc. Bylaws, as amended as of February 28, 2007
Exhibit
10.1 Amended
and Restated J. C. Penney Corporation, Inc. Management Incentive Compensation
Program
Exhibit
10.2 Amended
and Restated J. C. Penney Corporation, Inc. Mirror Savings Plan
Exhibit
10.3 Amended
and Restated J. C. Penney Corporation, Inc. Change in Control Plan
Exhibit
99.1 J.
C. Penney Company, Inc. Corporate Governance Guidelines
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/
Michael T. Theilmann
Michael
T.
Theilmann
Executive
Vice President,
Chief
Human Resources and
Administration
Officer
Date:
March 6, 2007
EXHIBIT
INDEX
|
Exhibit
Number
|
|
Description
|
Exhibit
3.1
J.
C. Penney Company, Inc. Bylaws, as amended as of February
28, 2007
Exhibit
10.1 Amended
and Restated J. C. Penney Corporation, Inc. Management Incentive
Compensation
Program
Exhibit
10.2 Amended
and Restated J. C. Penney Corporation, Inc. Mirror Savings Plan
Exhibit
10.3 Amended
and Restated J. C. Penney Corporation, Inc. Change in Control Plan
Exhibit
99.1 J.
C. Penney Company, Inc. Corporate Governance Guidelines