Exhibit 10.1 J. C. Penney Management Incentive Comp. Plan


    Exhibit
      10.1


    


     

     

    


    


    


    


    


    J.
      C. PENNEY
      CORPORATION, INC.

    MANAGEMENT

    INCENTIVE
      COMPENSATION PROGRAM

    


    


    EFFECTIVE
      FEBRUARY
      28, 2007

    


    


    


    


    


    


    


    


    


    


    


    


    



    
       

      
        
        

        
        

      

       

    


    J.
      C.
      PENNEY CORPORATION, INC.

    Management

    Incentive
      Compensation Program

    


    


    1.  Purpose
      of Program. The purpose of this Management Incentive Compensation
      Program ("Program") is to continue in effect a fundamental policy which has
      been
      an important factor in the growth and success of J. C. Penney Corporation,
      Inc.,
      and its divisions and subsidiaries (collectively, the "Company"). That policy
      is
      to base a substantial part of the compensation of management employees
      ("associates") of the Company holding positions of responsibility upon the
      operating results of the Company which such associates help to create. Those
      associates will be paid reasonable fixed salaries, but because their aggregate
      yearly remuneration may be affected substantially by variations in the operating
      results of the Company, they will have a direct incentive to put forth their
      best efforts for the development and growth of the Company. “Parent Company”
means J.C. Penney Company, Inc., a Delaware corporation, and any successor
      corporation.

    


    2.  Structure
      of Program. The Program shall consist of separate incentive
      compensation plans ("plan" or "plans") for the following groups of management
      associates: JCPenney Stores, Merchandising, JCPenney Direct, Logistics, and
      Home
      Office support areas. The Board of Directors of the Company ("Board of
      Directors" or “Board") or its delegate may from time to time authorize
      additional plans to be included in the Program or the consolidation of plans
      that are in the Program.

     

    
      
        
        

      

      
        
        

      

      
        
        

      

    

    


    The
      Program and all
      plans shall be administered by, or under the direction of, a committee
      ("Committee") of the Board of Directors of the Parent Company consisting of
      not
      less than three Board members who are not, and who have not within the year
      prior to such service on the Committee been, eligible to participate in any
      plan
      or the Program. The Committee shall have plenary authority to interpret the
      Program and the plans and to make all determinations specified in or permitted
      by the Program and the plans or deemed necessary or desirable for their
      administration or for the conduct of the Committee's business; all
      interpretations and determinations of the Committee may be made on an individual
      or group basis, and shall be final, conclusive, and binding on all interested
      parties; and the Committee may delegate its responsibilities under the Program
      and the plans to persons other than its members, subject to such terms and
      conditions as it shall determine.

    


    3.
       Participants in Plans. Participants in a plan
      for any fiscal year shall be designated by the Committee. Such designation
      may
      be made and, may from time to time be changed, on an individual basis or by
      groups, according to job eligibility, salary, or any other method of
      classification deemed appropriate by the Committee, but only management
      associates (including those who are also directors, but excluding those who
      serve as directors only of the Parent Company) may be so designated by the
      Committee.

    


    4. 
      Determination of Bases of Participation of Participants. The basis on
      which each participant shall participate in a plan shall be determined by the
      Committee, and any bases so determined may be changed from time to time by
      such
      Committee.

     

    
      
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    The
      Committee may
      determine the basis on which each participant shall participate in a plan,
      on an
      individual basis or by groups, according to job eligibility, salary, or any
      other method of classification deemed appropriate by the Committee. The
      Committee may specify that such determination will continue in effect until
      changed by it, in which event the Committee shall not be required to make a
      new
      determination for each fiscal year.

    


    The
      Board of
      Directors of the Parent Company shall determine the basis on which participants
      who are directors of the Parent Company shall participate in a plan, and from
      time to time may change such determination. The Board may specify that such
      determination shall continue in effect until changed by it, in which event
      the
      Board shall not be required to make a new determination for each fiscal year.
      Such initial determination and any such change shall be made only after
      recommendations of the Committee are considered.

    


    5.
       Limit on Incentive Compensation. There are no
      limits on the total amount of incentive compensation payable with respect to
      the
      Program for any fiscal year.

    


    6.
       Determination and Payments of Incentive Compensation.
The method for determining incentive compensation
      payable with respect
      to any plan and the Program for any fiscal year shall be prescribed by the
      Committee, and may be changed from time to time.

     

     

    
      
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    The
      amount of
      incentive compensation payable under the plans shall be computed in accordance
      with the determinations of the Committee, and shall be paid on the basis of
      such
      computation. The Committee shall adopt such rules and procedures as it shall
      deem necessary or desirable in order that the amounts paid under the Program
      be
      verified, and such verification be submitted to the Board of Directors of the
      Parent Company for its approval. Such verified amounts, when approved by the
      Board shall be final, conclusive, and binding on all interested parties,
      including the Company and the plan participants.

    


    The
      Board of
      Directors of the Parent Company or the Committee may permit a participant to
      defer receipt of all or part of any payment under a plan, or the Board or the
      Committee may determine to defer receipt, by all or some participants, of all
      or
      part of any such payment. Any such deferral shall be for such period and in
      accordance with such terms, provisions, and conditions as the Board or the
      Committee shall determine.

    


    7.  Termination
      and Amendment of Plans and Program. Except as provided below, the Board
      of Directors of the Parent Company shall have the power to construe, interpret,
      administer, amend, modify, suspend and terminate the Program or any plan
      established under the Program.

     

        The
      Program or any
      plan established under the Program may be amended at any time, provided however,
      any modification, suspension, amendment or termination within one year before
      or
      two years after a Change in Control may not be made if it would have


     

    
      
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    an
      adverse effect
      on the Participant’s eligibility, benefits and/or rights under the Program or
      any plan established under the Program, except as may be otherwise required
      to
      comply with changes in applicable laws or regulations. 

    


    For
      the purposes of
      this section the following definitions apply. 

     

    Board
      means
      the Board of Directors of J.C. Penney Company, Inc.

     

    Change
      in
      Control means the occurrence of any of the following events:

     

    
      	(i)  	
              any
                individual, entity or group (within the meaning of Section 13(d)(3)
                or 14(d)(2) of the Exchange Act) (a “Person”) becomes the beneficial owner
                (within the meaning of Rule 13d-3 promulgated under the Exchange
                Act) of
                20% or more of the combined voting power of the then-outstanding
                Voting
                Stock of the Company or Corporation; provided, however,
                that:

            


    

     

    (1)  for
      purposes of this Section (i)(1), the following acquisitions shall not
      constitute a Change in Control: (A) any acquisition of Voting Stock of the
      Company or Corporation directly from the Company or Corporation that is approved
      by a majority of the Incumbent Directors, (B) any acquisition of Voting
      Stock of the Company or Corporation by the Company or any Subsidiary,
      (C) any acquisition of Voting Stock of the Company or Corporation by the
      trustee or other fiduciary holding securities under any employee benefit plan
      (or related trust) sponsored or maintained by the Company or any Subsidiary,
      and
      (D) any acquisition of Voting 

     

    
      
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        Stock
          of the
          Company or Corporation by any Person pursuant to a Business Transaction
          that
          complies with clauses (A), (B) and (C) of Section (iii)
          below;

      

       

      (2)  if
        any Person becomes the beneficial owner of 20% or more of combined voting
        power
        of the then-outstanding Voting Stock of the Company or Corporation as a result
        of a transaction described in clause (A) of Section (i)(1) above and such
        Person thereafter becomes the beneficial owner of any additional shares of
        Voting Stock of the Company or Corporation representing 1% or more of the
        then-outstanding Voting Stock of the Company or Corporation, other than in
        an
        acquisition directly from the Company or Corporation that is approved by
        a
        majority of the Incumbent Directors or other than as a result of a stock
        dividend, stock split or similar transaction effected by the Company or
        Corporation in which all holders of Voting Stock are treated equally, such
        subsequent acquisition shall be treated as a Change in Control;

       

      (3)  a
        Change in Control will not be deemed to have occurred if a Person becomes
        the
        beneficial owner of 20% or more of the Voting Stock of the Company or
        Corporation as a result of a reduction in the number of shares of Voting
        Stock
        of the Company or Corporation outstanding pursuant to a transaction or series
        of
        transactions that is approved by a majority of the Incumbent Directors unless
        and until such Person thereafter becomes the beneficial owner of any additional
        shares of Voting Stock of the Company or Corporation representing 1% or more
        of
        the then-outstanding Voting Stock of the Company or Corporation, other than
        as a
        result of a stock dividend, stock split or similar transaction effected by
        the
        Company or Corporation in which all holders of Voting Stock are treated equally;
        and 

       

    

    
      
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    (4)  if
      at least a majority of the Incumbent Directors determine in good faith that
      a
      Person has acquired beneficial ownership of 20% or more of the Voting Stock
      of
      the Company or Corporation inadvertently, and such Person divests as promptly
      as
      practicable but no later than the date, if any, set by the Incumbent Directors
      a
      sufficient number of shares so that such Person beneficially owns less than
      20%
      of the Voting Stock of the Company or Corporation, then no Change in Control
      shall have occurred as a result of such Person’s acquisition; or

     

    
      	(ii)  	
              a
                majority of
                the board of the Company or of the Corporation ceases to be comprised
                of
                Incumbent Directors; or

            


    

     

    
      	(iii)  	
              the
                consummation of a reorganization, merger or consolidation, or sale
                or
                other disposition of all or substantially all of the assets of the
                Company
                or the Corporation, or the acquisition of the stock or assets of
                another
                corporation, or other transaction (each, a “Business Transaction”),
                unless, in each case, immediately following such Business Transaction
                (A) the Voting Stock of the Company outstanding immediately prior to
                such Business Transaction continues to represent (either by remaining
                outstanding or by being converted into Voting Stock of the surviving
                entity or any parent thereof), more than 50% of the combined voting
                power
                of the then outstanding shares of Voting Stock of the entity resulting
                from such Business Transaction (including, without limitation, an
                entity
                which as a result of such transaction owns the Company, Corporation
                or all
                or substantially all of the Company’s or Corporation’s assets either
                directly or through one or more subsidiaries), (B) no Person (other
                than the Company, such entity resulting from such Business Transaction,
                or
                any employee benefit plan (or related trust)


            


    

     

    
      
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    sponsored
      or
      maintained by the Company or any Subsidiary or such entity resulting from such
      Business Transaction) beneficially owns, directly or indirectly, 20% or more
      of
      the combined voting power of the then outstanding shares of Voting Stock of
      the
      entity resulting from such Business Transaction, and (C) at least a
      majority of the members of the Board of Directors of the entity resulting from
      such Business Transaction were Incumbent Directors at the time of the execution
      of the initial agreement or of the action of the Board providing for such
      Business Transaction; or

    
      	(iv)  	
              approval
                by
                the stockholders of the Company of a complete liquidation or dissolution
                of the Company, except pursuant to a Business Transaction that complies
                with clauses (A), (B) and (C) of
                Section (iii).

            


    

     

    Company
      shall mean J. C. Penney Company, Inc., a Delaware corporation, or any successor
      company.

    


    Corporation
      shall mean J. C. Penney Corporation, Inc., a Delaware corporation, or any
      successor company.

    


    Exchange
      Act
      means the Securities Exchange Act of 1934, as amended, and the regulations
      promulgated thereunder. Reference to any section or subsection of the Exchange
      Act includes reference to any comparable or succeeding provisions of any
      legislation that amends, supplements or replaces such section or
      subsection.

    


    Incumbent
      Directors means the individuals who, as of the Effective Date hereof, are
      Directors of the Company or the Corporation, as the context requires, and any
      individual 

     

     

    
      
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    becoming
      a Director
      subsequent to the date hereof whose election, nomination for election by the
      Company’s or Corporation’s stockholders, or appointment, was approved by a vote
      of at least two-thirds of the then Incumbent Directors (either by a specific
      vote or by approval of the proxy statement of the Company in which such person
      is named as a nominee for director, without objection to such nomination);
      provided, however, that an individual shall not be an Incumbent
      Director if such individual’s election or appointment to the Board occurs as a
      result of an actual or threatened election contest (as described in
      Rule 14a-12(c) of the Exchange Act) with respect to the election or removal
      of Directors or other actual or threatened solicitation of proxies or consents
      by or on behalf of a Person other than the Board.

     

    Subsidiary
      shall mean any entity in which the Company, directly or indirectly, beneficially
      owns 50% or more of the Voting Stock.

    


    Voting
      Stock
      means securities entitled to vote generally in the election of
      directors.

     

    8.Effective
      Date. The effective date of the Program shall be February 28,
      2007.

     

     

    

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