EXHIBIT 10.64

J. C. PENNEY CORPORATION, INC.

BENEFIT RESTORATION PLAN

AS AMENDED AND RESTATED

EFFECTIVE December 31, 2007

and As Further Amended Through December 9, 2008

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TABLE OF CONTENTS

 

Article

   Page

Article 1 Introduction

   1

Article 2 Definitions

   2

Article 3 Participation

   8

Article 4 Benefits

   9

Article 5 Form and Commencement of Benefit Payments

   12

Article 6 Administration

   15

Article 7 Type of Plan

   16

Article 8 Change in Control

   17

Article 9 Miscellaneous

   18

Article 10 Claims Procedures

   20

Appendix I. Participating Employers

   22

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J. C. PENNEY CORPORATION, INC.

BENEFIT RESTORATION PLAN

ARTICLE 1

INTRODUCTION

J. C. Penney Corporation, Inc., a Delaware corporation (formerly, J. C. Penney
Company, Inc.), amends and completely restates the J. C. Penney Corporation,
Inc. Benefit Restoration Plan (formerly the J. C. Penney Company, Inc. Benefit
Restoration Plan) effective as of 11:59 P.M. on December 31, 2007. The Plan is
maintained by the Company primarily for the purpose of providing benefits for
eligible Associates in excess of the limit on benefits and contributions imposed
by Code section 415 and the compensation limit under Code section 401(a)(17).

This document amends and completely restates the portion of the Supplemental
Retirement Program for Management Profit-Sharing Associates of J. C. Penney
Corporation, Inc. that provided benefits that would have been payable under the
J. C. Penney Corporation, Inc. Pension Plan and the J. C. Penney Corporation,
Inc. Savings, Profit-Sharing and Stock Ownership Plan but for the limits on
benefits, contributions, and compensation imposed on retirement plans qualified
under the Code. With respect to Associates who terminated employment prior to
August 1, 1995, benefits payable to such Associates are determined pursuant to
the terms and conditions of the Supplemental Retirement Program for Management
Profit-Sharing Associates of J. C. Penney Corporation, Inc. in effect as of
July 31, 1995.

The provisions of the Plan as amended and restated herein will apply to the
entire benefit of each Participant who is an Associate on or after the Effective
Date and each Participant who had a Separation from Service prior to the
Effective Date and had not commenced receiving benefit payments under the Plan
as of the Effective Date. For all other Participants who have commenced
receiving benefits under the Plan as of the Effective Date, the provisions of
the Plan as in effect at the time each such Participant commenced receiving
benefits will continue to be applicable. Unless otherwise indicated, no
provision of the Plan as amended and restated shall amend any provision of the
Plan as in effect on October 3, 2004 (“previous Plan”) and amendments to the
previous Plan adopted after that date.

Words and phrases with initial capital letters used throughout the Plan are
defined in Article 2.

 

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ARTICLE 2

DEFINITIONS

2.1 Actuarial Equivalent or Actuarially Equivalent means a form of benefit
payment under which the aggregate payments expected to be received are equal in
value to the aggregate payments expected to be received under a different form
of benefit payment using the interest rate and other factors set forth in this
Section.

(a) This paragraph applies to determine the present value of a Plan Benefit
payable to a Participant or a Spouse in the form of five annual installments or
an immediate lump sum payment. “Actuarial Equivalent” or “Actuarially
Equivalent” means an amount equal to the greater of (i) the present value of the
monthly Plan Benefit payable on the applicable Payment Commencement Date to the
Participant in the form of a Single Life Annuity, or to the Spouse in the form
of a “qualified preretirement survivor annuity” as defined in Section 4.2,
calculated by using the Applicable Interest Rate, the Applicable Mortality
Table, and the applicable Early Retirement Factors or Early Reduction Factors or
(ii) the present value of the Plan Benefit payable as a Single Life Annuity to
the Participant or as a qualified preretirement survivor annuity to the Spouse
on the Participant’s Normal Retirement Date (or the present value of the late
Plan Benefit, if applicable, payable to a Participant on the first day of the
month immediately following the Participant’s Separation from Service during any
month after the month in which he attains Normal Retirement Age) calculated by
using the Applicable Interest Rate and the Applicable Mortality Table.

(b) This paragraph applies to determine the present value of a Plan Benefit
payable to an alternate payee pursuant to a domestic relations order. “Actuarial
Equivalent” or “Actuarially Equivalent” means an amount calculated applying the
methodology in Section 2.1(a) using the alternate payee’s applicable
commencement date, the Applicable Interest Rate, the Applicable Mortality Table,
and the applicable Early Retirement Factors or Early Reduction Factors.

(c) For purposes of Section 2.14, “Actuarial Equivalent” or “Actuarially
Equivalent” will be determined using the Applicable Interest Rate under
Section 2.2 and the Applicable Mortality Table under Section 2.3.

2.2 Applicable Interest Rate means, for a Participant who has a Separation from
Service after the Effective Date, the adjusted first, second, and third segment
rates under Code section 417(e)(3)(C) and (D), determined with regard to the
2008 through 2011 phase-in provisions of Code section 417(e)(3)(D)(iii), for the
month of August preceding a Payment Commencement Date occurring during the next
following January 1 through June 30 period and for the month of February
preceding a Payment Commencement Date occurring during the next following July 1
through December 31 period. Notwithstanding the foregoing, for purposes of
calculating the phase-in of the Applicable Interest Rate, 1% will be added to
the annual rate of interest on 30-year Treasury securities for the
above-determined month. If a Participant has a Separation from Service prior to
the Effective Date, the Applicable Interest Rate is the annual rate of interest
on 30-year Treasury securities for the month of August, 2006, plus 1%.

 

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2.3 Applicable Mortality Table means, for a Participant who has a Separation
from Service after the Effective Date, the mortality table as prescribed by the
Secretary of the Treasury under Code section 417(e)(3)for the Plan Year
containing the Payment Commencement Date. If a Participant has a Separation from
Service prior to the Effective Date, the Applicable Mortality Table is the
mortality table as prescribed by the Secretary of the Treasury under Code
section 417(e)(3) as in effect for August, 2006.

2.4 Associate means any person who is employed by a Controlled Group Member if
the relationship between a Controlled Group Member and such person would
constitute the legal relationship of employer and employee, including an officer
who may or may not be a director, but excluding a director serving only in that
capacity, and excluding any employee of a Controlled Group Member substantially
all the operations of which are outside the United States unless United States
Social Security contributions are made on behalf of such employee.

2.5 Beneficiary means one or more persons or entities, including contingent
Beneficiaries, entitled to receive a distribution of a Participant’s interest in
the Plan in the event of his death.

2.6 Benefits Administration Committee means the committee appointed by the Human
Resources Committee and authorized by Article 6 to administer the Plan.

2.7 Board of Directors means the Board of Directors of the Parent Company.

2.8 Change in Control Plan means the J. C. Penney Corporation, Inc. Change in
Control Plan, as amended from time to time.

2.9 Code means the Internal Revenue Code of 1986, as amended from time to time.
References to “regulations” are to regulations published by the Secretary of the
Treasury under applicable provisions of the Code, unless otherwise expressly
indicated.

2.10 Company means the J. C. Penney Corporation, Inc., a Delaware corporation.
The term “Company” will also include any successor employer, if the successor
employer expressly agrees in writing as of the effective date of succession to
continue the Plan.

2.11 Controlled Group means the Company and all other corporations, trades, and
businesses, the employees of which, together with employees of the Company, are
required by the first sentence of subsection (b), by subsection (c), by
subsection (m), or by subsection (o) of Code section 414 to be treated as if
they were employed by a single employer. For purposes of

 

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determining if a Separation from Service has occurred, the Controlled Group will
be determined under Code sections 414(b) and 414(c) and Treasury Regulation
section 1.414(c) – 2 by using the language “at least 50 percent” instead of “at
least 80 percent” each place it appears in Code section 1563(a)(1), (2), and
(3).

2.12 Controlled Group Member means each corporation or unincorporated trade or
business that is or was a member of a Controlled Group, but only during such
period as it is or was such a member.

2.13 Early Retirement Age means the date on which a Participant (i) has attained
age 55 and has completed at least 15 years of service (as determined under the
Pension Plan) or (ii) if the Participant first participated in the Pension Plan
prior to January 1, 1989, has attained age 60 without regard to his years of
service.

2.14 Early Reduction Factors mean the factors set forth in this Section for use
under Section 2.1 for a Participant (or Spouse or alternate payee) whose Payment
Event is before the Participant’s Early Retirement Age. If a Payment Event is
before the Participant’s Early Retirement Age, the factors used in the present
value calculations under Sections 2.1(a)(i) and 2.1(b) for each month that a
Payment Commencement Date is earlier than the date the Participant would have
attained Normal Retirement Age will be equal to 0.5833% for each month between
the ages of 65 and 60, 0.4167% for each month between the ages of 60 and 55, and
for each month before age 55, such factors that will result in a Plan Benefit
(or, if applicable, a qualified preretirement survivor annuity) that is
Actuarially Equivalent to a Plan Benefit (or, if applicable a qualified
preretirement survivor annuity) commencing at age 55. For these purposes, a
“qualified preretirement survivor annuity” shall be an annuity as defined in
Section 4.2.

2.15 Early Retirement Factors mean the factors set forth in this Section for use
under Section 2.1 for a Participant (or Spouse or alternate payee) whose Payment
Event occurs on or after the Participant’s Early Retirement Age. If a Payment
Event is on or after the Participant’s Early Retirement Age, the factors used in
the present value calculation under Sections 2.1(a)(i) and 2.1(b) will be equal
to 0.3333% for each month between the ages of 65 and 60, and by 0.4167% for each
month between the ages of 60 and 55 that the Payment Commencement Date is
earlier than the date the Participant would have attained Normal Retirement Age.

2.16 Effective Date means December 31, 2007, at 11:59 P.M.

2.17 ERISA means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

2.18 Human Resources Committee means the Human Resources Committee of the
Company.

 

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2.19 Human Resources and Compensation Committee means the Human Resources and
Compensation Committee of the Board of Directors.

2.20 Normal Retirement Age means age 65.

2.21 Normal Retirement Benefit means the retirement benefit payable to a
Participant on the Normal Retirement Date, determined in accordance with the
applicable provisions of Article 4 of the Pension Plan.

2.22 Normal Retirement Date means the first day of the month immediately
following a Participant’s attainment of age 65.

2.23 Parent Company means the J. C. Penney Company, Inc., a Delaware
corporation, and any successor corporation.

2.24 Participant means an eligible Associate or former Associate of a
Participating Employer who has satisfied the conditions for participating in the
Plan as set forth in Article 3 and who has not received a complete distribution
of benefits.

2.25 Participating Employer means the Company and any other Controlled Group
Member or organizational unit of the Company or of a Controlled Group Member
which is designated as a Participating Employer under the Plan by the Human
Resources Committee or the board of directors of the Company; provided, however,
that if any such designation would substantially increase the cost of the Plan
to the Company, such designation shall be subject to the sole discretion of the
Board of Directors.

2.26 Payment Commencement Date means the date upon which payment of a Plan
Benefit is scheduled to begin as determined under Section 5.3.

2.27 Payment Event means the event set forth in Section 5.2 upon which an amount
of deferred compensation under this Plan may be paid.

2.28 Pension Benefit means the amount of a Participant’s Normal Retirement
Benefit payable to a Participant pursuant to the provisions of the Pension Plan
on his Normal Retirement Date (or if the Participant has attained age 65, the
late retirement benefit payable under Section 4.6, or its successor, of the
Pension Plan as of the first day of the month immediately following his
Separation from Service) which the Participant has earned as of the first day of
the month immediately following his Separation from Service.

 

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2.29 Pension Plan means the J. C. Penney Corporation, Inc. Pension Plan
(formerly, the J. C. Penney Company, Inc. Pension Plan) adopted effective
February 1, 1966, as amended from time to time.

2.30 Pension Plan Participant means an Associate or former Associate who is
treated as a participant under the Pension Plan.

2.31 Plan means the J. C. Penney Corporation, Inc. Benefit Restoration
Plan(formerly, the J. C. Penney Company, Inc. Benefit Restoration Plan) adopted
effective August 1, 1995, as amended from time to time.

2.32 Plan Benefit means the benefit payable to a Participant on his Normal
Retirement Date, determined in accordance with the provisions of Article 4 of
this Plan or, where applicable, the qualified preretirement survivor annuity, as
defined in Section 4.2, payable to a Spouse on the Participant’s Normal
Retirement Date, as the case may be.

2.33 Plan Year means the twelve-month period beginning on January 1 and ending
on December 31 of each calendar year.

2.34 Prior Plan means the Supplemental Retirement Program for Management
Profit-Sharing Associates of J. C. Penney Corporation, Inc. (formerly the
Supplemental Retirement Program for Management Profit-Sharing Associates of J.
C. Penney Company, Inc.)as in effect on July 31, 1995.

2.35 Separation from Service means the date an Associate dies, retires, or
otherwise has a termination of employment from the Controlled Group within the
meaning of Code section 409A and Treasury Regulation section 1.409A-1(h), or its
successor, taking into account the definition of Controlled Group for such
purpose in Section 2.11.

2.36 Single Life Annuity means an annuity with no ancillary benefits, consisting
of equal monthly payments beginning as of a designated commencement date and
ending with the monthly payment due immediately prior to his death.

2.37 Specified Employee means a “specified employee” within the meaning of Code
section 409A and Treasury Regulation section 1.409A-1(i), or its successor, as
determined in accordance with the rules specified by the Board of Directors in
resolutions dated December 12, 2007.

 

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2.38 Spouse means the individual to whom an Associate is legally married under
the laws of the State (within the meaning of section 3(10) of ERISA) in which
the Associate is domiciled, or if domiciled outside the United States, under the
laws of the State of Texas, subject to federal legal requirements.

2.39 Unrestricted Benefit means the Pension Benefit determined without applying
the provisions of the Pension Plan relating to the limitation on compensation
under Code section 401(a)(17) or the limitation on benefits under Code section
415.

 

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ARTICLE 3

PARTICIPATION

For purposes of Section 4.1, any Associate of a Participating Employer who is a
Pension Plan Participant on or after August 1, 1995, and whose retirement
pension benefit payable pursuant to the terms of the Pension Plan is limited by
operation of the annual benefit limits under Code section 415 or the
compensation limits under Code section 401(a)(17) shall be a Participant in the
Plan. In addition, an active or former Associate for whom a benefit was accrued
under Paragraph (2) of Article III of the Prior Plan and whose benefit under
Paragraph (2) of Article III under the Prior Plan had not been completely
distributed to such Associate at July 31, 1995, will also be a Participant in
the Plan.

 

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ARTICLE 4

BENEFITS

4.1 Pension Plan Participant Benefit. A Participant shall be entitled to a Plan
Benefit equal in amount to his Unrestricted Benefit less his Pension Benefit.

Additionally, a benefit shall be accrued for each Participant for whom a benefit
was accrued under Paragraph (2) of Article III of the Prior Plan at July 31,
1995, and whose accrued benefit had not been completely distributed from the
Prior Plan. The value of the Participant’s Prior Plan benefit under Paragraph
(2) of Article III determined as of July 31, 1995, will become an accrued
benefit under this Plan and will be distributed to the Participant pursuant to
the terms of this Plan. The distribution to a Participant from this Plan of such
Prior Plan accrued benefit will completely discharge the Company and each other
Participating Employer from any further liability for such benefit.

4.2 Death Benefit. If a Participant who has a vested interest in his benefit is
married at the time such Participant has a Separation from Service by reason of
death, the Participant’s Spouse will receive a benefit in the form of five equal
annual installments commencing as of the first day of the month after the
Participant’s death. The amount of such death benefit will be calculated under
Section 2.1(a) by reference to the Single Life Annuity that would be payable to
the Spouse as a “qualified preretirement survivor annuity” based on the
Participant’s Plan Benefit, and such amount then will be adjusted to reflect
payment over five years in the manner described in Section 5.1. For these
purposes, a “qualified preretirement survivor annuity” means a monthly annuity
for the life of the Spouse of a deceased Participant equal to the monthly
annuity that the Spouse would have received under a qualified joint and survivor
annuity, with the survivor annuity being equal to 100% of the amount of the
monthly annuity payable during the joint lives of the Participant and his Spouse
if the Participant dies on or after the day he attains Early Retirement Age or
Normal Retirement Age and 50% if the Participant dies prior to the day he
attains Early Retirement Age. The calculation of the qualified joint and
survivor annuity shall be determined by reference to the factors used under
Exhibits E and G to Appendix I to the Pension Plan, or their successors, to
convert an immediate single life annuity to a joint and 50% or 100% survivor
annuity, as appropriate. No benefit under this Plan will be payable to a single
Participant who has a Separation from Service due to death.

If a Participant who has a Separation from Service (other than by death) and who
is either married or single at the time of his subsequent death dies before
payment of his vested benefit has begun under the Plan, the Participant’s
Beneficiary will receive the benefit in the form of five equal annual
installments equal to the amount that would have been payable to a Participant
under Section 5.1 and at the same time the Participant would have received his
benefit under Sections 5.3 and 5.4. If no Beneficiary has been designated by
such a Participant, the Beneficiary will be deemed to be the Spouse for a
married Participant and the estate for a single Participant.

In the event of the death of a Participant after his benefit has commenced and
before all installments have been paid, the remaining unpaid installments shall
be paid to his Beneficiary in accordance with the payment schedule of the
Participant.

 

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4.3 Vested Benefit.

(a) Vesting Schedule. For purposes of the benefit provided by Section 4.1, the
interest of each Participant in his benefit will become vested and
nonforfeitable in accordance with the following schedule:

 

Years of Service

   Percentage Vested and
Nonforfeitable

Less than 5

   0

5 or more

   100

For purposes of this Section 4.3, a Participant will have the same number of
years of service under this Plan as the Participant has under the Pension Plan.
Notwithstanding anything in the Plan to the contrary, a Participant will only be
entitled to payment of a benefit under the Plan if the Participant’s interest in
his benefit is vested at the time payment is scheduled to commence.

(b) Accelerated Vesting. A Participant’s interest in his benefit will become
100% vested and nonforfeitable without regard to his years of service on his
attainment of Normal Retirement Age while he is an Associate. Notwithstanding
the foregoing, a Participant who attains age 60 while an Associate will become
fully vested in his benefit without regard to his years of service if he became
a participant in the Pension Plan before January 1, 1989, or if he was a
participant in the JCPenney Financial Services Pension Plan.

(c) Change in Control Plan. If the Board of Directors exercises its discretion
under Section 8.1 to terminate the Plan because of a Change in Control (as
defined in Section 8.3) and a Participant is a participant in the Change in
Control Plan, the Participant’s interest in his Plan Benefit will become 100%
vested and nonforfeitable without regard to his years of service or age. If a
Participant who is also a participant in the Change in Control Plan has an
“employment termination” following a “change in control” as those terms are
defined in the Change in Control Plan, his interest in his Plan Benefit will
become 100% vested and nonforfeitable without regard to his years of service or
age.

 

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4.4 Qualified Unit Closings. A Participant who has an involuntary Separation
from Service as a result of a Qualified Unit Closing (as hereinafter defined)
will receive credit for additional months of service and additional months of
age, based on the Participant’s years of service (before applying the provisions
of this Section) in accordance with the schedule set forth below, solely for
purposes of determining whether the Participant has attained Early Retirement
Age or Normal Retirement Age at his Separation from Service, and not for
purposes of determining the amount of the Participant’s Plan Benefit or for any
other purpose.

 

Years of Service at

Separation from Service

   Months of Additional
Age and Service

Less than 10

   0

At least 10 but less than 15

   12

At least 15 but less than 20

   18

20 or more

   24

For purposes of this Section, a Qualified Unit Closing means the complete or
partial discontinuance of business at a store or other business unit of a
Participating Employer, provided the Associates employed at the store or other
business unit are eligible for separation pay.

 

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ARTICLE 5

FORM AND COMMENCEMENT OF BENEFIT PAYMENTS

5.1 Form of Benefit Payments. Except as otherwise provided in this Plan,
benefits will be paid in the form of five equal annual installments. The present
value of such installments will be equal to the amount determined under
Section 2.1. For a Participant who has a Separation from Service after the
Effective Date, the amount of such annual installments will be calculated by
using only the adjusted first segment rate of the Applicable Interest Rate,
determined with regard to the 2008 through 2011 phase-in provisions of Code
section 417(e)(3)(D)(iii). For a Participant who has a Separation from Service
prior to the Effective Date, the amount of such annual installments will be
calculated by using the Applicable Interest Rate under Section 2.2 that applies
to such Participant. The lookback and stability periods set forth in Section 2.2
will apply in determining the adjustment.

5.2 Payment Events. The Payment Event for a Participant will be the later of
(i) Separation from Service or (ii) January 1, 2008; provided, however, that if
a Specified Employee’s Separation from Service (other than by reason of death)
occurs prior to January 1, 2008, and the date of such Separation from Service
plus six months is after January 1, 2008, Separation from Service will be the
deemed Payment Event for such a Specified Employee.

5.3 Payment Commencement Date. The Payment Commencement Date for a Participant
(including a Specified Employee) whose Payment Event under Section 5.2 is
Separation from Service will be the first day of the month following the date of
his Separation from Service; provided, however, that the actual time of the
first payment to a Specified Employee will be determined in accordance with the
provisions of Section 5.4. For all other Participants, the Payment Commencement
Date for benefits under Section 4.1 will be January 1, 2008, or as soon as
practicable thereafter, but no later than the time required for payment under
Treasury Regulation section 1.409A-3(d), or its successor. Subsequent
installments for all Participants, including Specified Employees, will be paid
on the first through fourth anniversaries of the Payment Commencement Date.

The Payment Commencement Date in the case of a death benefit will be determined
under Section 4.2. For an alternate payee, the Payment Commencement Date will be
the applicable commencement date as provided in a domestic relations order that
conforms with the requirements of Code section 409A and Treasury Regulation
section 1.409A-3(j)(4)(ii), or its successor.

 

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5.4 Delay for Specified Employees. If a Participant is a Specified Employee as
of the date of his Separation from Service and his Payment Event is Separation
from Service (other than by reason of death), payment will not be made before
the date that is six months after the date of Separation from Service. The first
payment to such a Specified Employee will be paid on the first day of the
seventh month following the date of Separation from Service. The initial
installment payment to a Specified Employee whose Separation from Service occurs
after December 31, 2007, will include an interest adjustment. Such adjustment
will be calculated by using only the adjusted first segment rate of the
Applicable Interest Rate, determined with regard to the 2008 through 2011
phase-in provisions of Code section 417(e)(3)(D)(iii). The lookback and
stability periods set forth in Section 2.2 will apply in determining the
adjustment. Notwithstanding the foregoing, no interest will be paid to a
Specified Employee whose Separation from Service occurs before January 1, 2008.
If a Specified Employee dies after a Separation from Service but prior to the
expiration of the six-month delay, benefit payments under Section 4.2 will
commence to the Beneficiary in accordance with the provisions of Section 4.2.

5.5 Subsequent Changes in Time and Form of Payment. No Participant can make a
subsequent election to delay a payment or change the form of payment.

5.6 Prohibition on Acceleration of Payment. Except as provided in Code section
409A, Treasury regulation section 1.409A-3(j)(4) or its successor, this Section,
Section 5.7, and Article 8, neither the Participant nor the Company can
accelerate the time or schedule of any payment or amount scheduled to be paid
pursuant to the terms of the Plan. The Benefits Administration Committee will
have the discretion to accelerate payments in accordance with the provisions of
Code section 409A and Treasury Regulation section 1.409A-3(j)(4), or its
successor (provided that only the Board of Directors will have the discretion to
accelerate payment in accordance with the provisions of Treasury Regulation
section 1.409A-3(j)(4)(ix), or its successor).

5.7 Limited Cashouts. If the present value, as determined herein, of a
Participant’s or Beneficiary’s benefit under Sections 4.1 or 4.2, when combined
with the present value of a Participant’s or Beneficiary’s interest in any other
agreements, methods, programs, or other arrangements with respect to which
deferrals of compensation are treated as having been deferred under a single
nonqualified deferred compensation plan under Code section 409A and Treasury
Regulation section 1.409A-1(c)(2), or its successor, is equal to or less than
the applicable dollar

 

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amount under Code section 402(g)(1)(B), in effect for the year of distribution,
the Benefits Administration Committee will distribute the benefit in the form of
an immediate lump sum payment that is the Actuarial Equivalent of such vested
Plan Benefit on the Payment Commencement Date, provided that the Participant is
not also a Participant in the J. C. Penney Corporation, Inc. Mirror Savings
Plan, or its successor, and the payment results in the termination and
liquidation of the entirety of the Participant’s interest under this Plan and
all other agreements, methods, programs, or other arrangements aggregated with
this Plan and is in accordance with Treasury regulation section
1.409A-3(j)(4)(v), or its successor. In the case of a Specified Employee, the
benefit will be paid at the time specified in Section 5.4, with the comparable
adjustment for interest as described in Section 5.4.

 

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ARTICLE 6

ADMINISTRATION

The Benefits Administration Committee will administer the Plan and will have the
full authority and discretion to accomplish that purpose, including without
limitation, the authority and discretion to

 

(i) interpret the Plan in a manner consistent with the requirements of Code
section 409A (and the regulations thereunder) and correct any defect, supply any
omission or reconcile any inconsistency or ambiguity in the Plan in the manner
and to the extent that the Benefits Administration Committee deems desirable to
carry on the purpose of the Plan consistent with Code section 409A and the
regulations thereunder;

 

(ii) resolve all questions relating to the eligibility of Associates to become
or continue as Participants;

 

(iii) determine the amount of benefits payable to Participants and authorize and
direct the Company with respect to the payment of benefits under the Plan;

 

(iv) make all other determinations and resolve all questions of fact necessary
or advisable for the administration of the Plan; and

 

(v) make, amend, and rescind such rules as it deems necessary for the proper
administration of the Plan.

The Benefits Administration Committee will keep a written record of its actions
and proceedings regarding the Plan and all dates, records, and documents
relating to its administration of the Plan.

Any action taken or determination made by the Benefits Administration Committee
will be conclusive on all parties. No member of the Benefits Administration
Committee will vote on any matter relating specifically to such member. In the
event that a majority of the members of the Benefits Administration Committee
will be specifically affected by any action proposed to be taken (as opposed to
being affected in the same manner as each other Participant in the Plan), such
action will be taken by the Human Resources Committee.

 

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ARTICLE 7

TYPE OF PLAN

The Plan is a plan which is unfunded. Benefits under the Plan are paid from the
general assets of the Company.

The portion of this Plan in Section 4.1 which comprises the benefit determined
due to the limit on annual benefits under the Pension Plan imposed by Code
section 415 constitutes a separable part of this Plan which is maintained by the
Company solely for the purpose of providing benefits for certain Associates in
excess of the limitations on benefits imposed by Code section 415. This
separable portion of the Plan shall be construed according to the provisions of
ERISA applicable to such plans.

The remaining portion of the Plan is maintained by the Company primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees. The Plan shall be construed according to the
provisions of ERISA applicable to such plans.

In the event that it should subsequently be determined by statute or by
regulation or ruling that the Plan is not “a plan which is unfunded and is
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees” within the meaning
of sections 201(2), 301(a)(3), 401(a)(1), and 4021(b)(6) of ERISA, participation
in the Plan shall be restricted by the Benefits Administration Committee to the
extent necessary to assure that it will be such a plan within the meaning of
such sections.

 

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ARTICLE 8

CHANGE IN CONTROL

8.1 Authority of the Board of Directors. Upon a Change in Control as defined in
Section 8.3, the Board of Directors will have the discretion and the authority
to (i) terminate and liquidate the Plan pursuant to its irrevocable action taken
within the 30 days preceding or the 12 months following a Change in Control and
in accordance with Code section 409A and Treasury Regulation section
1.409A-3(j)(4)(ix)(B), or its successor (in which event the benefit of each
Participant who is also a participant in the Change in Control Plan will
automatically vest as provided in Section 4.3(c)); (ii) fund a grantor trust in
accordance with the provisions of Section 8.2; or (iii) provide that each
Participant’s benefit in the Plan will become 100% vested and nonforfeitable as
of the date of the Change in Control without regard to his years of service
under the Pension Plan.

8.2 Grantor Trust. To the extent permitted by Code section 409A and the
regulations thereunder, the Board of Directors will have the discretion and the
authority to transfer assets of the Parent Company, in an amount sufficient to
pay benefits that have accrued under the Plan up to the date of the Change in
Control, to a grantor trust to be established by the Parent Company for the
purpose of paying benefits hereunder; and the Participant’s vested benefits
shall thereafter be paid to the Participant from such trust in accordance with
the terms of the Plan. On each anniversary date of the date of the Change in
Control, the Parent Company shall transfer , to the extent permitted by Code
section 409A and the regulations thereunder, to the grantor trust an amount
necessary to pay all benefits accrued under the Plan during the preceding twelve
months.

8.3 Change in Control Event. For the purpose of determining whether a Change in
Control has occurred with respect to a Participant, a Change in Control means a
change in control event within the meaning of Code section 409A and Treasury
Regulation section 1.409A-3(i)(5), or its successor, including a change in the
ownership of the corporation, a change in the effective control of the
corporation, or a change in the ownership of a substantial portion of the assets
of the corporation as such events are defined in Treasury Regulation sections
1.409A-3(i)(5)(v), (vi), and (vii). For this purpose, “corporation” has the
meaning given in Treasury Regulation section 1.409A-3(i)(5)(ii), or its
successor.

 

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ARTICLE 9

MISCELLANEOUS

9.1 Amendment and Termination. The Human Resources and Compensation Committee
may amend or modify the Plan at any time, without prior notice; provided,
however, that any such amendment or modification which would substantially
increase the cost of the Plan to the Company shall require approval of the Board
of Directors.

The Board of Directors may suspend, discontinue, or terminate the Plan at any
time without prior notice or approval. Any termination and liquidation of the
Plan, including any termination and liquidation of the Plan upon a Change in
Control, must comply with the provisions of Code section 409A and Treasury
Regulation section 1.409A-3(j)(4)(ix), or its successor.

Subject to the foregoing, in no event will any amendment, modification,
suspension, discontinuance, or termination adversely affect the Plan Benefit
payable pursuant to Section 4.1 for any Participant for whom benefit payments
have already begun in accordance with the Plan as in effect prior to the
effective date of the amendment, modification, suspension, discontinuance, or
termination unless otherwise required to comply with applicable law.

Each amendment to the Plan by the Human Resources and Compensation Committee or
the Board of Directors will be made only pursuant to unanimous written consent
or by majority vote at a meeting. Upon such action by the Human Resources and
Compensation Committee or the Board of Directors, the Plan will be deemed
amended as of the date specified as the effective date by such action or in the
instrument of amendment. The effective date of any amendment may be before, on,
or after the date of such action of the Human Resources and Compensation
Committee or the Board of Directors.

9.2 Rights of Associates. Neither the establishment of the Plan nor any action
thereafter taken by the Company, the Parent Company, or any Controlled Group
Member or by the Benefits Administration Committee shall be construed as giving
to any Associate any vested right to a benefit from the Plan or a right to be
retained in employment or any specific position or level of employment with the
Company or any Controlled Group Member. Moreover, no Associate shall have any
right or claim to any benefits under this Plan if the Associate has an
involuntary Separation from Service due to a summary dismissal as defined in the
Company’s policies and procedures, including resignation in lieu thereof, unless
the Benefits Administration Committee, in its discretion, determines that such
Associate shall be eligible for such benefits notwithstanding such summary
dismissal.

 

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9.3 Mistaken Information. If any information upon which a Participant’s benefit
under the Plan is calculated has been misstated by the Participant or is
otherwise mistaken, such benefit shall not be invalidated (unless upon the basis
of the correct information the Participant would not have been entitled to a
benefit), but the amount of the benefit shall be adjusted to the proper amount
determined on the basis of the correct information and, to the extent permitted
by Code section 409A, any overpayments shall be charged against future payments
to the Participant or his Beneficiary or otherwise required to be repaid by the
recipient.

9.4 Liability. Neither the Board of Directors (including any committees thereof)
of the Parent Company, the Company, or of any Participating Employer, nor any
member of the Benefits Administration Committee or the Human Resources Committee
nor any person to whom any of them may delegate any duty or power in connection
with administering the Plan shall be personally liable for any action or failure
to act with respect to the Plan.

9.5 Reemployed Participant. If a retired Participant again becomes an Associate
of a Participating Employer, the payment of benefits hereunder shall continue.
Upon such Associate’s subsequent Separation from Service, he shall be entitled
to receive any applicable benefits, if any, under Article 4 pursuant to the
provisions of this Plan, reduced by prior payments from this Plan.

9.6 Construction. In determining the meaning of any provision of the Plan, words
imparting the masculine gender shall include the feminine and the singular shall
include the plural, unless the context requires otherwise. Headings of Articles,
Sections and Subsections in the Plan are for convenience and reference only and
are not intended to modify or affect the meaning of the substantive provisions
of the Plan.

9.7 Non-assignability of Benefits. The benefits payable hereunder or the right
to receive future benefits under the Plan may not be anticipated, alienated,
pledged, encumbered, or subjected to any charge or legal process, and if any
attempt is made to do so, or a person eligible for any benefits becomes
bankrupt, the interest under the Plan of the person affected may be terminated
by the Benefits Administration Committee which, in its sole discretion, may
cause the same to be held or applied for the benefit of one or more of the
dependents of such person or make any other disposition of such benefits that it
deems appropriate, in all events subject to the requirements of Code section
409A.

9.8 Governing Law. Except to the extent that the Plan may be subject to the
provisions of ERISA, the Plan will be construed and enforced according to the
laws of the State of Texas, without giving effect to the conflict of laws
principles thereof. Except as otherwise required by ERISA, every right of action
by a Participant, former Participant, or Beneficiary with respect to the Plan
shall be barred after the expiration of three years from the date of Separation
from Service of the Participant or the date of receipt of the notice of denial
of a claim for benefits, if earlier. In the event ERISA’s limitations on legal
actions do not apply, the laws of the State of Texas with respect to limitations
of legal actions shall apply and the cause of action must be brought no later
than four years after the date the action accrues.

 

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ARTICLE 10

CLAIMS PROCEDURES

If an Associate, or an authorized representative of an Associate, does not
receive the benefits which he believes he is entitled to receive under the Plan,
he may file a claim for benefits with the Benefits Administration Committee or
its delegate. All claims will be made in writing no later than the time
prescribed by Treasury Regulation section 1.409A-3(g), or its successor, and
will be signed by the claimant or the claimant’s authorized representative. If
the claimant does not furnish sufficient information to determine the validity
of the claim, the Benefits Administration Committee or its delegate will advise
the claimant in writing of any additional information that is required.

Each claim will be approved or disapproved by the Benefits Administration
Committee or its delegate within 60 days following the receipt of the
information necessary to process the claim, unless special circumstances require
an extension of time for processing, in which case a decision will be rendered
as soon as possible but not later than 120 days after receipt of the information
necessary to process the claim. Notice of the extension must be provided to the
claimant or the claimant’s authorized representative before the expiration of
the original 60-day period and indicate the special circumstances requiring the
extension of time and the date by which the Plan expects to make a
determination.

In the event the Benefits Administration Committee or its delegate denies a
claim for benefits in whole or in part, the Benefits Administration Committee or
its delegate will notify the claimant in writing of the denial of the claim.
Such notice by the Benefits Administration Committee or its delegate will also
set forth, in a manner calculated to be understood by the claimant, the specific
reasons for such denial, the specific Plan provisions on which the denial is
based, and a description of any additional material or information necessary to
perfect the claim, with an explanation of why such material or information is
necessary and an explanation of the Plan’s claim review procedure as set forth
below.

A claimant may appeal a denial of his claim by requesting a review of the
decision by the Benefits Administration Committee or a person designated by the
Benefits Administration Committee, which person will be a named fiduciary under
Section 402(a)(2) of ERISA for purposes of this Article. An appeal must be
submitted in writing within 60 days after the denial and must (i) request a
review of the claim for benefits under the Plan, (ii) set forth all of the
grounds upon which claimant’s request for review is based and any facts,
documents, records, or other information in support thereof, and (iii) set forth
any issues or comments which the claimant deems pertinent to the appeal. The
Benefits Administration Committee or the named fiduciary designated by the
Benefits Administration Committee will make a full and fair review of each
appeal and any written materials submitted in connection with the appeal,
without regard to whether the information was submitted under the initial claim
determination. The Benefits Administration Committee or the named fiduciary
designated by the Benefits Administration Committee will act upon each appeal
within 60 days after receipt thereof unless special circumstances require an
extension of the time for processing, in which case a decision will be rendered
as soon as possible but not later than 120 days after the appeal is received.
Notice of the extension must be provided to the claimant or the

 

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claimant’s authorized representative before the expiration of the original
60-day period and indicate the special circumstances requiring the extension of
time and the date by which the Plan expects to make a determination. The
claimant will be given the opportunity to review pertinent documents or
materials upon submission of a written request to the Benefits Administration
Committee or named fiduciary, provided the Benefits Administration Committee or
named fiduciary finds the requested documents or materials are pertinent to the
appeal.

On the basis of its review, the Benefits Administration Committee or named
fiduciary will make an independent determination of the claimant’s eligibility
for benefits under the Plan. The decision of the Benefits Administration
Committee or named fiduciary on any claim for benefits will be final and
conclusive upon all parties thereto. In the event the Benefits Administration
Committee or named fiduciary denies an appeal in whole or in part, it will give
written or electronic notice of the decision to the claimant or the claimant’s
authorized representative, which notice will set forth in a manner calculated to
be understood by the claimant the specific reasons for such denial and which
will make specific reference to the pertinent Plan provisions on which the
decision was based and provide other additional information, as applicable,
required by 29 Code of Federal Regulations section 2560.503-1, or its successor.

If the claimant’s claim or appeal is approved, any resulting payment of benefits
will be made no later than the time prescribed for payment of benefits by
Treasury Regulation section 1.409A-3(g), or its successor.

 

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APPENDIX I

Participating Employers

J. C. Penney Corporation, Inc.

J.C. Penney Funding Corporation

J. C. Penney Private Brands, Inc.

JCP Receivables, Inc.

JCPenney Puerto Rico, Inc.

JCP Logistics L.P.

JCP Media L.P.

JCP Overseas Services, Inc.

JCP Procurement L.P.

JCP Publications Corp.

(formerly JCP Media Corporation)

The Original Arizona Jean Company

 

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