Exhibit
      10.1

    
 

    J.
      C. PENNEY CORPORATION, INC.

    


    MIRROR
      SAVINGS PLAN 

    


    


    


    AMENDED
      AND RESTATED, EFFECTIVE DECEMBER 31, 2007

    


    


    


    


    


    


    
      
        
        

      

      
        
        

      

      
        
        

      

    

    


     

    J.
      C. PENNEY CORPORATION, INC.

    


    MIRROR
      SAVINGS PLAN 

    


    Amended
      and Restated Effective 

    At
      11:59 p.m. on December 31, 2007

    


    


    INTRODUCTION

    


    


    The
      J.
      C. Penney Corporation, Inc. Mirror Savings Plans I and II were adopted effective
      January 1, 1999 as part of a program to redesign the Company's qualified and
      non-qualified savings plans to optimize the retirement savings opportunities
      for
      Associates.

    


    


    Effective
      December 31, 2006, the J.C. Penney Corporation Inc. Mirror Savings Plan I and
      III were closed to new deferrals and new participants. Effective on January
      1,
      2007, the J.C. Penney Corporation, Inc. amended and restated Mirror Savings
      Plan
      II and renames the plan the J.C. Penney Corporation, Inc. Mirror Savings Plan.
      As of the December 31, 2007, Mirror Savings Plans I and III are merged into
      the
      Mirror Savings Plan and the Mirror Savings Plan is the surviving plan.


    


    The
      Plans are maintained by the Company on an unfunded basis primarily for the
      purpose of providing deferred compensation to a select group of management
      or
      highly compensated employees.

    


    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 above effective
      date and each Participant who had a Separation from Service prior to the above
      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 above effective date, the provisions
      of the Plan as in effect at the time each such Participant commenced receiving
      benefits will continue to be applicable. Set forth in Appendix B for reference
      only is a copy of the Plan as in effect on October 3, 2004, and amendments
      to
      that Plan adopted after that date. Unless otherwise indicated, no provision
      of
      the Plan as amended and restated shall amend any provision of the Plan in
      Appendix B. 

    


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

    


    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    


    


    J.
      C.
      PENNEY CORPORATION, INC.

    MIRROR
      SAVINGS PLAN 

    


    TABLE
      OF CONTENTS

     

    
      


      TABLE
        OF CONTENTS

      
        
          	 Article	 	 	 Page
	 	 	 	 
	
                  ARTICLE ONE

                	 	DEFINITIONS............................................................................................	1
	 	 	 	 
	
                  ARTICLE
                    TWO

                	
                	ELIGIBILITY
                  AND
                  PARTICIPATION.....................................................	5
	 	 	 	 
	
                  2.01

                	 	Eligibility
                  Determined for Each Plan
                  Year..............................................	5
	
                  2.02

                	 	
                  Eligible
                    Associate.....................................................................................

                	5
	
                  2.03

                	 	Participation...............................................................................................	5
	
                  2.04

                	 	Election
                  to
                  Defer........................................................................................	6
	
                  2.05

                	 	Deferral
                  Amounts.......................................................................................	7
	
                  2.06

                	 	Investment
                  Elections................................................................................	8
	
                   

                	 	 	 
	
                  ARTICLE
                    THREE

                	 	BENEFITS..............................................................................................	9 
	
                   

                	 	 	 
	
                  3.01

                	 	Establishment
                  of
                  Accounts.......................................................................	9
	
                   3.02

                	
                	Personal
                  Accounts....................................................................................	9
	
                  3.03

                	 	Company
                  Accounts...................................................................................	9
	
                  3.04

                	 	Mirror
                  Company Matching
                  Contribution..................................................	10
	
                  3.05

                	 	Mirror
                  Retirement Account
                  Contribution..................................................	10
	
                  3.06

                	 	Mirror
                  Discretionary
                  Contribution.............................................................	11
	 	 	 	 
	
                  ARTICLE
                    FOUR

                	 	TRANSFERS...........................................................................................	13
	
                   

                	 	 	 
	
                  4.01

                	 	Personal
                  Accounts....................................................................................	13
	
                  4.02

                	 	Company
                  Accounts...................................................................................	13
	 	 	 	 
	
                  ARTICLE
                    FIVE

                	 	VESTING.................................................................................................	14
	 	 	 	 
	
                  5.01

                	 	Personal
                  Accounts....................................................................................	14
	
                  5.02

                	 	
                  Company
                    Accounts...................................................................................

                	14
	
                  5.03

                	 	Forfeitures..................................................................................................	15
	 	 	 	 
	
                  ARTICLE
                    SIX

                	
                	TYPE
                  OF
                  PLAN.........................................................................................	16
	 	 	 	 
	
                  6.01

                	 	Top
                  Hat
                  Plan..............................................................................................	16
	
                  6.02

                	 	No
                  Funding................................................................................................	16
	 	 	 	 
	
                  ARTICLE
                    SEVEN

                	
                	DISTRIBUTIONS........................................................................................	
                  17

                
	 	 	 	 
	
                  7.01

                	 	 Normal
                  Form of
                  Payment........................................................................	17


        

         

        
           

           

           

        

      

      
        
          	
                   7.02

                	 	
                  
                    Payment
                      Event............................................................................................

                  

                	17
	
                   7.03

                	 	Payment
                  Commencement
                  Date................................................................	17
	
                   7.04

                	 	Delayed
                  for
                  Specific
                  Employees...............................................................	17
	
                  7.05

                	 	Death............................................................................................................	18
	
                   7.06

                	 	Subsequent
                  Changes in Time and Form of
                  Benefit................................	18
	
                   7.07

                	 	Distribution
                  for an Unforseeable
                  Emergency...........................................	18
	
                   7.08

                	 	Fund-Specific
                  Installments or Unforseeable Emergency Distributions.	19 
	
                   7.09

                	 	Form
                  of
                  Payments.......................................................................................	19 
	
                   7.10

                	 	Change
                  in
                  Control.......................................................................................	19
	
                   7.11

                	 	Reemployed
                  Participants.......................................................................... 	20 
	
                   7.12

                	 	Prohibition
                  on Acceleration of
                  Payment.................................................. 	20
	
                  7.13

                	
                   

                	Limited
                  Cashouts.......................................................................................	20
	 	 	 	 
	
                  ARTICLE EIGHT

                	 	AMENDMENT
                  AND
                  TERMINATION.........................................................	22
	 	 	 	 
	
                   8.01

                	 	Plan
                  Amendment.........................................................................................	22
	
                   8.02

                	 	Plan
                  Termination.........................................................................................	22
	 	 	 	 
	
                  ARTICLE
                    NINE

                	 	MISCELLANEOUS.....................................................................................	23
	 	 	 	 
	
                   9.01

                	 	Plan
                  Administration.....................................................................................	23
	
                  9.02

                	 	Plan
                  Expenses............................................................................................	23
	
                   9.03

                	 	
                  Effect
                    on
                    Other
                    Benefits.............................................................................

                	23
	
                   9.04

                	 	No
                  Guarantee
                  of
                  Employment...................................................................	24
	
                   9.05

                	 	Disclaimer
                  of
                  Liability.................................................................................	24
	
                   9.06

                	 	Severability..................................................................................................	24
	
                   9.07

                	 	Successors..................................................................................................	24
	
                   9.08

                	 	Governing
                  Law............................................................................................	24
	
                   9.09

                	
                   

                	Construction.................................................................................................	25
	
                   9.10

                	 	Taxes............................................................................................................	25
	
                   9.11

                	 	Non-Assignability........................................................................................	25
	
                   9.12

                	 	Claims
                  Procedure.......................................................................................	25
	 	 	 	 
	
                  Exhibit
                    A

                	 	Examples
                  of
                  Calculations for the Company Matching Contribution	 
	 	 	 	 
	
                  Appendix
                    A

                	 	Document
                  History	 
	 	 	 	 
	
                   Appendix
                    B

                	 	Prior
                  Mirror
                  Savings Plan document	 


        

      

       

    

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    ARTICLE
      ONE

    


    DEFINITIONS

    


    As
      used
      herein, the following words and phrases have the following respective meanings
      unless the context clearly indicates otherwise.

    


     Active
      Participant:
      A
      Participant who defers part of his or her Compensation for a Plan Year (or
      part
      thereof) pursuant to an election to defer.

    


    Associate:
      Any
      person who is classified as an associate and employed by an Employer if the
      relationship between the Employer and such person constitutes the legal
      relationship of employer and employee.

    


    Beneficiary:
      The
      person or persons designated by the Participant on a beneficiary form required
      by the Company for this purpose to receive benefits payable under the Plan
      because of the Participant's death.

    


    Code:
      The
      Internal Revenue Code of 1986, as amended from time to time.

    


    Company:
      On
      and after January 27, 2002, 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.

    


    Company
      Account:
      A
      phantom account established in accordance with Article Three to which Mirror
      Company Matching, Mirror Retirement Account and Mirror Discretionary
      contributions plus earnings are credited.

    


    Compensation:
      The
      same meaning as the term “Compensation” is defined in the Savings
      Plan.

    


    For
      all
      purposes under the Plan, a Participant’s “Compensation” shall exclude any awards
      (cash or otherwise) under the J.C. Penney Company, Inc. 2005 Equity Compensation
      Plan.

    


    For
      purposes of applying a Participant’s election to defer, a Participant’s
      Compensation for a Plan Year shall: (i) include any cash incentive payments
      under the Management Incentive Compensation Program related to services
      performed during such year by the Associate (and exclude any such payments
      in
      the current Plan Year related to a prior Plan Year’s services), and (ii) include
      amounts deferred by the Active Participant pursuant to Section 2.05 of the
      Plan.

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    Compensation
      for a Plan Year shall be determined without regard to the limitations on annual
      compensation under Section 401(a)(17) of the Code and without regard to
      deferrals to this Plan.

    


    An
      Associate who is in the service of the armed forces of the United States during
      any period in which his or her reemployment rights are guaranteed by law will
      be
      considered to have received the same rate of Compensation during his or her
      absence that he or she was receiving immediately prior to his or her absence,
      provided he or she returns to employment with an Employer within the time such
      rights are guaranteed by law.

     

    Controlled
      Group:
      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 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).

    


    


    Eligible
      Associate:
      An
      Associate who has satisfied the eligibility requirements of the Plan for a
      Plan
      Year in accordance with Section 2.02.

    


    Employer:
      The
      Company and any subsidiary company or affiliate of the Company that is a
      Participating Employer as defined in Article I of the Savings Plan.

    


    ERISA:
      The
      Employee Retirement Security Act of 1974, as amended from time to
      time.

    


    Exchange
      Act:
      The
      Securities Exchange Act of 1934, as amended from time to time.

    


    Human
      Resources and Compensation Committee:
      The
      Human Resources and Compensation Committee of the Board of Directors of the
      Parent Company.

    


    Human
      Resources Committee:
      The
      Human Resources Committee of the Company.

    


    Mirror
      Company Matching Contributions:
      The
      phantom amounts deemed to be contributed by the Company for each Plan Year
      as
      determined under Section 3.04.

    


    Mirror
      Discretionary Contributions:
      The
      phantom amounts deemed to be contributed by the Company for each Plan Year
      as
      determined under Section 3.06.

    


    
      
        2

      

      
        
        

        
        

      

      
        
        

      

    

    Mirror
      Investment Funds:
      Phantom funds established as book reserve entries in the books and records
      of
      the Company to which a Participant's deferral amounts under the Plan are
      credited based on the investment elections of the Participant.
      The investment returns of such funds shall be assumed to match the returns
      of
      the same investment funds available to participants under the Savings Plan.
      No
      phantom fund shall be established in this Plan for any self directed brokerage
      account in the Savings Plan.

    


    Mirror
      Retirement Account Contributions:
      The
      phantom amounts deemed to be contributed by the Company for each Plan Year
      as
      determined under Section 3.05.

    


    Parent
      Company:
      J. C.
      Penney Company, Inc., a Delaware corporation, and any successor
      corporation.

    


    Participant:
      An
      Eligible Associate who participates in the Plan in accordance with Article
      Two,
      and who has not yet received a distribution of the entire amount of his or
      her
      vested benefits under the Plan.

    


    Payment Commencement Date:
      The
      date upon which payment of a Particpant’s benefits is scheduled to begin as
      determined under Section 7.03.

    


    Payment
      Event: The
      event set forth in Section 7.02 upon which a Participant’s  benefits
      may be paid.

    


    Personal
      Account:
      A
      phantom account established in accordance with Article Three to which a
      Participant's deferral amounts plus earnings are credited.

    


    Plan:
      The
      J.C. Penney Corporation Inc. Mirror Savings Plan, as amended from time to
      time.

    


    Plan
      Administrator: The
      Benefits Administration Committee.

    


    Plan
      Year:
      Each
      calendar year.

    


    Savings
      Plan:
      Prior
      to January 27, 2002, the J. C. Penney Company, Inc. Savings, Profit-Sharing
      and
      Stock Ownership Plan, as amended from time to time, and on and after January
      27,
      2002, the J. C. Penney Corporation, Inc. Savings, Profit-Sharing and Stock
      Ownership Plan, as amended from time to time.

    


    Separation
      from Service:
      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 as defined above. An
      Eligible Associate or Participant who transfers from one Employer to another
      Employer or to another member of the Controlled Group as defined in the
      preceding sentence without a break in employment shall not be deemed to have
      a
      Separation from Service.

    


    
      
        3

      

      
        
        

        
        

      

      
        
        

      

    

    Specified
      Employee:
      A
      “specified employee” within the meaning of Code section 409A, as determined in
      accordance with the rules specified by the Board of Directors in resolutions
      dated December 12, 2007.

    


    Valuation
      Date:
      With
      respect to all Mirror Investment Funds, each day of a calendar year on which
      the
      New York Stock Exchange is open.

    


    With
      respect to transactions or distributions initiated by a Participant or
      Beneficiary, (a) the date of receipt by the Plan Administrator of the request
      if
      it is received prior to the close of the New York Stock Exchange, or (b) the
      next trading day if the request is received after the close of the New York
      Stock Exchange.

    


    With
      respect to distributions not initiated by a Participant, the date the
      distribution is processed.


    
      
        4

      

      
        
        

        
        

      

      
        
        

      

    


    ARTICLE
      TWO

    


    ELIGIBILITY
      AND PARTICIPATION

    


    2.01
       Eligibility
      Determined for Each Plan Year

    


    The
      eligibility of each Associate to participate in the Plan as an Active
      Participant is determined for each Plan Year in accordance with Section 2.02
      below. Eligibility for, or participation in, the Plan for a Plan Year does
      not
      give an Associate the right to defer part of his or her Compensation under
      the
      Plan for any other Plan Year.

    


    2.02
       Eligible
      Associate

    


    An
      Associate shall be eligible to participate in the Plan as an Active Participant
      for a Plan Year if the Associate for the preceding Plan Year had:

    


    (a) Satisfied
      the eligibility requirements to make deferrals to the Savings Plan;
      and

    


    (b)
      Earnings in excess of $100,000 (as adjusted in accordance with Section 414(q)(1)
      of the Code) comprised as follows: 

    


    
      	(1)  	
              If
                a current Associate, such earnings will be based on his actual
                Compensation through October 31 of such year plus his or her projected
                earnings from November 1 through December 31 of such year determined
                by
                using his or her Base Salary (as defined below) in effect on October
                31 of
                such year.

            


    

    


    
      	(2)  	
              If
                an Associate was not an Associate in the preceding Plan Year, he
                or she
                shall be eligible to participate in the year of hire or rehire if
                in
                addition to meeting the requirements of Section 2.02(a) above, he
                or she
                is expected to have projected Base Salary of at least an amount in
                excess
                of $100,000 (as adjusted in accordance with Section 414(q)(1) of
                the Code)
                in the current Plan Year based on his rate of Base Salary.
                

            


    

    


    Base
      Salary shall mean the aggregate amount of the base pay rate (before any
      deductions of contributions or deferrals), commissions and amounts under the
      J.C. Penney Corporation, Inc. Management Incentive Compensation Program due
      and
      payable to an Eligible Associate in the applicable Plan Year designated by
      his
      or her Employer as the Eligible Associate's monthly pay as reflected on the
      Employer's personnel records including any such amounts otherwise due and
      payable with respect to which his or her election to defer
      applies.


    
      
        5

      

      
        
        

        
        

      

      
        
        

      

    

     

    2.03
       Participation

    


    An
      Eligible Associate for a Plan Year shall participate in the Plan for that Plan
      Year as an Active Participant by making a timely election to defer in accordance
      with Section 2.04 below. An Eligible Associate who fails to satisfy the
      requirements of Section 2.04 below shall not be allowed to make an election
      to
      defer and shall not be an Active Participant for the applicable Plan
      Year.

    


    A
      Participant who is not an Active Participant for a Plan Year shall continue
      to
      participate in the Plan in all respects except that such Participant shall
      not
      have the right to defer part of his or her Compensation under the Plan for
      that
      Plan Year, and shall
      not be entitled to a Mirror Company Matching Contribution or a Mirror
      Discretionary Contribution (as determined under Sections 3.04 or 3.06,
      respectively) for that Plan Year. A Participant hired on or after January 1,
      2007, shall be entitled to receive a Mirror Retirement Account Contribution
      (as
      determined under 3.05) regardless of whether he or she is an Active
      Participant.

    


    2.04  Election
      to Defer

    


    (a) All
      elections to defer for a Plan Year must be made in accordance with Treasury
      Regulation section 1.409A-2(a), and its successor, and in a manner approved
      by
      the Plan Administrator. An Eligible Associate for a Plan Year may elect to
      defer
      a percentage (as described in Section 2.05 below) of his or her Compensation
      for
      such Plan Year by filing an election no later than the December 31 preceding
      the
      Plan Year during which the services giving rise to the Compensation are
      performed. With respect to cash incentive amounts, such deferral election must
      be submitted no later than the December 31 preceding the Plan Year during which
      the services giving rise to the cash incentive amounts are performed, even
      though such cash incentive amounts may be payable in a Plan Year subsequent
      to
      performance of the relevant services. 

    


    (b) To
      the
      extent permitted by Treasury Regulation section 1.409A-2(a)(7), and its
      successor, a newly Eligible Associate who has never participated in the Plan
      or
      in an agreement, method, program, or other arrangement that would be aggregated
      with this Plan under Code section 409A or Treasury Regulation section
      1.409A-1(c)(2), or its successor may file his or her election with the Plan
      Administrator within 30 days of his or her first date of eligibility for
      participation in the Mirror Plan but such election shall apply only to
      Compensation paid for services performed after the election and the amount
      of
      Compensation deferred shall be pro-rated, to the extent required, pursuant
      to
      Treasury Regulation section 1.409A-2(a)(7) or its successor. If the election
      to
      defer is not made within 30 days or if the Eligible Associate is not otherwise
      newly eligible within the meaning of the preceding sentence, the Eligible
      Associate will not be allowed to make an election for the current Plan Year.
      An
      Eligible Associate who was previously eligible to participate in the Plan may
      be
      treated as a newly Eligible Associate if:

    


    
      
        6

      

      
        
        

        
        

      

      
        
        

      

    

    (1) the
      Eligible Associate became ineligible to elect to defer, prior to a complete
      distribution of the Eligible Associate’s Account and following the distribution
      of all remaining amounts from his or her account, the Eligible Associate has
      subsequently become eligible to elect to participate again; or

    


    (2) the
      Eligible Associate, has not been eligible to defer at any time during the
      24-month period ending on the date the Eligible Associate becomes eligible
      again, regardless of whether the Eligible Associate has a current Account
      balance or if the Eligible Associate’s Account was credited with earnings or
      losses during such 24-month period. 

    


    Clauses
      (1) and (2) shall be applied by taking into account by treating an agreement,
      method, program, or other arrangement that would be aggregated with this Plan
      under Code section 409A or Treasury Regulation section 1.409A-1(c)(2) as if
      it
      were part of this Plan for purposes of determining the Participant’s eligibility
      to defer or receipt of all remaining amounts.

    


    (c) An
      Active Participant cannot change or terminate his or her election to defer
      during a Plan Year for that Plan Year. However, an Eligible Associate may change
      his or her election to defer for a subsequent Plan Year by filing a new election
      with the Plan Administrator by December 31 of the preceding Plan
      Year.

    


    An
      election to defer also shall terminate:

    


    
      	 	 	
              (1)

            	
              at
                the end of the Plan Year;

            


    

    


    
      	 	 	
              (2)

            	
              if
                the Plan is terminated, or

            


    

    


    (3)
      in
      the
      event of a Participant’s request for a distribution due to an unforeseeable
      emergency which is determined to exist under Section 7.07 or in the event the
      Participant receives a hardship distribution as described in Treasury Regulation
      section 1.401(k)-1(d)(3). 

    


    2.05  Deferral
      Amounts

    


    An
      Active Participant for a Plan Year may defer 

    


    (a)
      up
      to 14% of his Compensation in that Plan Year up to the earnings dollar limit,
      and,

    


    (b)
      up
      to 75% of his Compensation in that Plan Year that exceeds the earnings dollar
      limit. 

    


    All
      deferral amounts shall be in whole percentages and made by payroll deduction.
      The earnings dollar limit of an Active Participant for a Plan Year shall be
      

     

    
 

    
      
        7

      

      
        
        

        
        

      

      
        
        

      

    

    $225,000,
      as adjusted for cost of
      living increases in accordance with Section 401(a)(17) of the Code.


     

    2.06
       Investment
      Elections

    


    A
      Participant shall complete an election, in the manner determined by the Plan
      Administrator, requesting that all of his or her future deferral amounts (in
      whole percentages) be applied to the hypothetical purchase for him or her,
      as of
      the earliest practicable Valuation Date after such amounts are deferred, of
      units in his or her Personal Accounts within
      any one or more of the available Mirror Investment Funds in each case at a
      price
      equal to the value of such units as of such Valuation Date.

    


    Such
      election initially must be made prior to the commencement of his or her
      participation in the Plan and may be changed at any time during the Plan Year
      in
      accordance with the procedures established by the Plan Administrator. Each
      such
      election shall be effective as soon as administratively feasible following
      receipt by the Plan Administrator or its delegate of the Participant's
      election.

    


    In
      the
      event that no timely election by the Participant is on file with the Plan
      Administrator, such Participant shall be deemed to have elected that all
      deferral amounts shall be applied to the hypothetical purchase for him or her
      of
      units in the Personal Account within the Mirror Investment Fund that is the
      “Interest Income Fund” under the Savings Plan. Effective March 1, 2008, in the
      event that no timely election by the Participant is on file with the Plan
      Administrator, such Participant shall be deemed to have elected that all
      deferral amounts shall be applied to the purchase for him or her of units in
      the
      Personal Account within the Mirror Investment Fund that is the appropriate
      “Target Retirement Investment Fund” under the Savings Plan.


    
      
        8

      

      
        
        

        
        

      

       

    


    ARTICLE
      THREE

    


    BENEFITS

    


    3.01
       Establishment
      of Accounts

    


    A
      Personal Account and a Company Account within each Mirror Investment
      Fund shall
      be established for each Participant in the Plan as if assets were invested
      in a
      trust. All amounts credited to the Personal Accounts and Company Accounts of
      a
      Participant shall at all times be held in the Company's general funds as part
      of
      the Company's general assets, unless a trust is established pursuant to Section
      7.10(b).

    


    The
      value, including gains and losses, credited to such accounts and funds shall
      be
      determined by the Plan Administrator pursuant to procedures established by
      the
      Plan Administrator based on the same manner that the value is determined under
      the Savings Plan. As of each Valuation Date, the net asset value of a unit
      shall
      equal the net asset value of a unit as determined under the Savings
      Plan.

    


    3.02
       Personal
      Accounts

    


    All
      amounts deferred by an Active Participant pursuant to Article Two shall be
      credited to his or her Personal Accounts within his or her Mirror Investment
      Funds specified in his or her investment election under Section
      2.06.

    


    3.03 Company
      Accounts

    


    All
      Company contributions shall be credited to the Company Account of each Active
      Participant at each pay period. All Mirror Retirement Account Contributions
      and
      Mirror Discretionary Contributions shall be credited to each Active
      Participant’s Company Account within 2 1⁄2 months after the Company’s fiscal year
      end.

    


    A
      Mirror Company Matching Contribution, a Mirror Retirement Account Contribution
      and a Mirror Discretionary Contribution (as determined under Sections 3.04,
      3.05
      and 3.06 below, respectively) shall be deemed to be invested in his or her
      Company Account within the Mirror Investment Funds in accordance with the Active
      Participant’s Investment election for his or her Personal Accounts under Section
      2.06 of this Plan. In the event an Active Participant does not make an
      investment election, the Active Participant will be deemed to have elected
      the
      Mirror Investment Fund in accordance with Section 2.06.

    


    Any
      amount of Company matching contributions credited to the Participant's Company
      account under the Savings Plan and subsequently cancelled so that said plan
      could satisfy the actual contribution percentage test (as described in the
      Savings Plan) shall be credited to his or her Company Account within the Mirror
      Investment Fund that is according to the Participant’s investment election in
      the year paid to the extent permissible under Section 409A of the
      Code.

    


    
      
        9

      

      
        
        

        
        

      

      
        
        

      

    

    All
      amounts credited to the Company Accounts of a Participant shall be subject
      to
      the vesting provisions of Article Five.

    


    
      	3.04  	
              Mirror
                Company Matching Contribution

            


    

    


    For
      each Active Participant who has completed one year of employment and 1,000
      hours
      of service, the
      Company will credit to the Mirror Company Matching Contribution account a
      matching contribution for each Active Participant in an amount equal to (i)
      50%
      (or such other percent as may be determined from time to time by the Human
      Resources and Compensation Committee) of the Active Participant's deferral
      contribution to the Plan for each payroll period that does not exceed 6% of
      the
      Active Participant's Compensation for the payroll period reduced by (ii) the
      maximum matching contribution the Active Participant could have received under
      the Savings Plan. Each Active Participant's matching contribution will be
      calculated in the same manner as in the examples attached to the Plan as Exhibit
      A.  

    


    An
      Active Participant who had a Separation from Service shall vest in the Mirror
      Company Matching Account contribution if he or she terminated:

    


    (a) At
      or
      after age 65

    
      	 	
              (b)

            	
              Due
                to a permanent and total disability within the meaning of the Social
                Security Act, provided the participant either (a) has qualified for
                disablity insurance benefits under such Act, or (b) in the opinion
                of the
                organization that administers the Corporation’s disability plans has a
                disability which would entitle him to such disabiliy insurance benefits
                except for the fact that he does not have sufficient quarters of
                coverage
                or has not satisfied any age requirements under such law.
                

            


    

    (c)Due
      to
      death, or

    (d)Due
      to
      job restructuring, reduction in force or unit closing determined by the Company
      entitling the Participant to serverance pay under the Company’s then existing
      Separation Pay Plan.

    


    3.05 Mirror
      Retirement Account Contributions

    


    For
      each Participant hired or rehired on or after January 1, 2007, who has
      completed one year of employment and 1,000 hours of service and with
      Compensation in excess of the earnings dollar limit, the Company shall
      contribute an amount to the Mirror Plan equal to the difference between the
      Active Participant’s Compensation and the earnings dollar limit multiplied by
      2%. 

    


    An
      Active Participant must be in the active employ of an Employer on December
      31 of
      the Plan Year to receive credit for a Mirror Retirement Account Contribution
      for
      that Plan Year; provided, however, that an Active Participant who had a
      Separation from Service before December 31 of said year shall receive credit
      for
      one-twelfth of the 

     

    
      
        10

      

      
        
        

        
        

      

      
        
        

      

    

     

    Mirror
      Retirement Account contribution for each month or part of a month employed
      during the Plan Year if he or she terminated:

    


    
      	(a)  	
              At
                or after age 65 

            


    

    
      	(b)  	
              Due
                to a permanent and total disability within the meaning of the Social
                Security Act, provided the participant either (i) has qualified for
                disablity insurance benefits under such Act, or (ii) in the opinion
                of the
                organization that administers the Corporation’s disability plans has a
                disability which would entitle him to such disabiliy insurance benefits
                except for the fact that he does not have sufficient quarters of
                coverage
                or has not satisfied any age requirements under such law.
                

            


    

    
      	(c)  	
              Due
                to death, or 

            


    

    
      	(d)  	
              Due
                to job restructuring, reduction in force or unit closing determined
                by the
                Company entitling the Participant to serverance pay under the Company’s
                then existing Separation Pay Plan.

            


    

    


    An
      Associate shall not have a right or claim to any of the amounts contributed
      as a
      Mirror Retirement Account Contribution if the Associate is summarily dismissed,
      or otherwise has an involuntary Separation from Service due to a summary
      dismissal as defined by the Company’s policies and procedures (including
      resignation in lieu thereof), unless the Benefits Administration Committee,
      in
      its sole discrection, determines that such Associate shall be eligible for
      such
      benefits notwithstanding such summary dismissal.

    


    3.06 Mirror
      Discretionary Contribution

    


    Pursuant
      to Section 3.03 of the Savings Plan, a Discretionary Contribution shall be
      credited for each Active Participant to the Company Account in the Mirror Plan
      in accordance with the calculated deferral percentage of the Active Participant
      and in a manner deemed appropriate by the Human Resources and Compensation
      Committee. 

    


    An
      Active Participant must be in the active employ of an Employer on December
      31 of
      the Plan Year to receive credit for a Mirror Discretionary Contribution for
      that
      Plan Year; provided, however, that an Active Participant who had a Separation
      from Service before December 31 of said year shall receive credit for
      one-twelfth of the Mirror
      Discretionary Contribution for each month employed during the Plan Year if
      he or
      she terminated:

     

    
      	(a)  	
              At
                or after age 65; 

            


    

    
      	(b)  	
              Due
                to a permanent and total disability within the meaning of the Social
                Security Act, provided the participant either (i) has qualified for
                disablity insurance benefits under such Act, or (ii) in the opinion
                of the
                organization that administers the Corporation’s disability plans has a
                disability which would entitle him to such disabiliy insurance benefits
                except for the fact that he does not have sufficient quarters of
                coverage
                or has not satisfied any age requirements under such law.
                

            


    

     

    
      
        11

      

      
        
        

        
        

      

      
        
        

      

    

     

    
      	
              (c)  

            	
              Due
                to death, or

            


    

    
      	(d)  	
              Due
                to a job restructuring, reduction in force or unit closing determined
                by
                the Company entitling the Participant to serverance pay under the
                Company’s then existing Separation Pay
                Plan.

            


    

    


    An
      Associate shall not have a right or claim to any of the amounts contributed
      as a
      Mirror Discretionary Contribution if the Associate is summarily dismissed,
      or
      otherwise has an involuntary Separation from Service due to a summary dismissal
      as defined by the Company’s policies and procedures (including resignation in
      lieu thereof), unless the Benefits Administration Committee, in its sole
      discrection, determines that such Associate shall be eligible for such benefits
      notwithstanding such summary dismissal..

    


    


    


    



    
      
        12

      

      
        
        

        
        

      

      
        
        

      

    


    


    


    ARTICLE
      FOUR

    


    TRANSFERS

    


    4.01  Personal
      Accounts

    


    A
      Participant may elect, once in each calendar day of the Plan Year, to transfer
      an amount (in whole percentages) equal to the value of all or part of his or
      her
      units in his or her Personal Accounts within any one or more of the Mirror
      Investment Funds to another one or more of his or her Personal Accounts within
      the Mirror Investment Funds. The value of such units shall be determined as
      of
      the Valuation Date. A transfer is effective only if made in the manner
      determined by the Plan Administrator.

    


    4.02  Company
      Accounts

    


    A
      Participant may elect, once in each calendar day of the Plan Year, to transfer
      an amount (in whole percentages) equal to the value of all or part of his or
      her
      units in his or her Company Accounts within any one or more of the Mirror
      Investment Funds to another one or more of his or her Company Accounts within
      the Mirror Investment Funds. The value of such units shall be determined as
      of
      the Valuation Date. A transfer is effective only if made in the manner
      determined by the Plan Administrator.

    


    Notwithstanding
      any other provision of the Plan, a Participant who wishes to make transfers
      from
      both his or her Personal Accounts and Company Accounts during the same day,
      must
      do so as part of the same transaction.


    
      
        13

      

      
        
        

        
        

      

      
        
        

      

    


    ARTICLE
      FIVE

    


    VESTING

    


    5.01    
      Personal
      Accounts

    


    A
      Participant shall be 100% vested in the value of his or her Personal Accounts
      within his or her Mirror Investment Funds at all times without regard to whether
      he or she is a Participant in the Plan for any future Plan Year.

    


    
      	5.02  	
               
                Company Accounts

            


    

    


    (a)     This
      Section 5.02 applies to Mirror Company Matching Contributions described in
      Section 3.04, Mirror Retirement Account Contributions described in 3.05; and
      Mirror Discretionary Contributions described in Section 3.06. A Participant
      shall be 100% vested in the value of his or her Company Accounts within his
      or
      her Mirror Investment Funds upon completion of three full years of service,
      and
      shall have no vested interest prior to that time, for amounts (including
      earnings attributable thereto) credited for Plan Years beginning on or after
      January 1, 2007. 

    


    (b)     For
      amounts
      (including earnings attributable thereto) credited as Mirror Company Matching
      Contributions for Plan Years before January 1, 2007, such amounts will vest
      in
      the same vesting percentage attributable to the value of his or her Company
      accounts under the Savings Plan based on his or her full years of service (as
      defined in the Savings Plan) in accordance with the following
      table:

     

    
      	
               Full
                years of service 

            	
               Vested
                Percentage

            
	 	 
	 Less
              than 1	
               0%

            
	 1	
               20%

            
	 2	
               40%

            
	 3	
               60%

            
	 4	
               80%

            
	 5
              or
              more	
               100%

            


    

    


    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.

    


    (c)     Change
      in
      Control Plan.
      If the
      Board of Directors of the Company exercises its discretion under Section 7.10
      to
      terminate the Plan because of a Change in Control and a Participant is a
      participant in the J.C. Penney Corporation, Inc. Change in Control Plan (“Change
      in Control Plan”), the Participant’s non-vested amount in his Company Account
      will become 100% vested and nonforfeitable without regard to his or her 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 

     

    
      
        14

      

      
        
        

        
        

      

      
        
        

      

    

     

    Change
      in Control Plan, his or her interest in the Company Account will become 100%
      vested and nonforfeitable without regard to his or her years of service or
      age.

    


    5.03
       Forfeitures
      

    


    A
      Participant who is less than 100% vested in the value of his or her Company
      Accounts as of his or her Separation from Service shall forfeit the non-vested
      value of his or her Company Accounts. In the event the Participant subsequently
      is re-employed by an Employer within five years, the amount forfeited (without
      earnings) hereunder shall be restored to his or her Company Accounts in the
      same
      manner as the amount, if any, forfeited by his or her Savings Plan Company
      Accounts would be restored by purchasing units in accordance with the
      Participant’s investment election in effect at the time of his or her Separation
      from Service using the current market value as of the date of
      employment.

    



    
      
        15

      

      
        
        

        
        

      

      
        
        

      

    


    ARTICLE
      SIX

    


    TYPE
      OF
      PLAN

    


    6.01
       Top
      Hat Plan

    


    The
      Plan is intended to be a "pension plan" as defined in ERISA and is maintained
      by
      the Company on an unfunded basis primarily for the purpose of providing deferred
      compensation to a select group of management or highly compensated employees.
      As
      such, the Plan is intended to be construed so as not to provide income to any
      Participant or Beneficiary for purposes of the Code prior to actual receipt
      of
      benefit payments under the Plan.

    


    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 and section 2520.104-24
      of Chapter 29 of the Code of Federal Regulations, participation in the Plan
      shall be restricted by the Plan Administrator to the extent necessary to assure
      that it will be such a plan within the meaning of such sections.

    


    6.02
       No
      Funding

    


    Plan
      benefits shall be payable solely from the general assets of the Company. The
      Company shall not be required to, but may at its discretion, segregate or
      physically set aside any funds or assets attributable to Plan benefits, subject
      to the limitations of Code section 409A on funding such benefits. The Company
      shall retain title to and beneficial ownership of all assets of the Company,
      including any assets which may be used to pay Plan benefits. The cost of the
      Plan shall be expensed and a book reserve shall be maintained on the Company's
      financial statements.

    


    No
      Participant or Beneficiary shall be deemed to have, pursuant to the Plan, any
      legal or equitable interest in any specific assets of the Company. To the extent
      that any Participant or Beneficiary acquires any right to receive Plan benefits,
      such right shall arise merely as a result of a contractual obligation and shall
      be no greater than, nor have any preference or priority over, the rights of
      any
      general unsecured creditor of the Company.

    


     

    



    
      
        16

      

      
        
        

        
        

      

      
        
        

      

    


    


    ARTICLE
      SEVEN

    


    DISTRIBUTIONS

    


    7.01 
      Normal
      Form of Payment 

    


    Except
      as otherwise provided in this Plan, benefits will be paid in the form of five
      substantially equal annual installments.

    


    7.02 
      Payment
      Event.
      

    


    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. 

    


    7.03 
      Payment
      Commencement Date.
      

    


    The
      Payment Commencement Date for a Participant (including a Specified Employee)
      whose Payment Event under Section 7.02 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 7.04.
      For all other Participants, the Payment Commencement Date for benefits under
      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. 

    


    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.

    


    7.04 
      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. During
      this period, interest will accrue in accordance with the Participant’s
      investment election. 


    
      
        17

      

      
        
        

        
        

      

      
        
        

      

    


    


    7.05  
      Death

    


    If
      a
      Participant has a Separation from Service by reason of death, the Participant's
      Beneficiary 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.
      If a
      Participant has a Separation from Service (other than by death) and subsequently
      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 payble at the same time as described in Section 7.03. 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.
       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. If
      the
      Beneficiary dies before receiving all benefits to which he was entitled under
      the Plan, the amount shall be paid to the Beneficiary’s estate in accordance
      with the installment schedule set forth above.

    


    7.06
        Subsequent
      Changes in Time and Form of Benefit

    


    No
      Participant can make a subsequent election to delay a payment or change the
      form
      of a payment.

    


    7.07
       Distribution
      for an Unforeseeable Emergency

    


    A
      Participant or Beneficiary entitled to vested benefits under the Plan may
      request a single-sum distribution to satisfy a severe financial hardship
      resulting from an unforeseen event or emergency beyond his control. The
      distribution shall be limited to the amount necessary to satisfy the severe
      financial hardship (including any applicable federal, state or local taxes
      attributable to such distribution), and shall not exceed the current value
      of
      vested benefits payable to or on behalf of the Participant or
      Beneficiary.

    


    An
      unforeseeable event or emergency shall have the meaning as that term is defined
      within Treasury Regulation section 1.409A-3(i)(3), or its successor.


    


    The
      determination of the existence of a severe financial hardship and the approval
      of an unforeseeable emergency distribution shall be made by the Chief Human
      Resources and Administration Officer, (or his successor by title or position)
      or
      his delegate except as provided below. Approval shall be given only if, taking
      into account all of the facts and circumstances, continued deferral of benefits
      or adherence to the Plan's payment schedule would result in a severe financial
      hardship to the Participant or Beneficiary. Approval shall not be granted if
      such hardship is or may be relieved through insurance, by liquidation of his
      or
      her assets (to the extent such liquidation would not itself cause severe
      financial hardship), or by terminating his or her election to defer. The amount
      of payment permitted hereunder shall in no event 

     

     

    
      
        18

      

      
        
        

        
        

      

      
        
        

      

    

    exceed
      the amount permitted under Treasury Regulation section 1.409A-3(i)(3)(ii),
      or
      its 

    successor.


    With
      respect to a Participant who is subject to Section 16(b) of the Exchange Act,
      the determination of the existence of a severe financial hardship and the
      approval of the hardship distribution shall be made by the Human Resources
      and
      Compensation Committee.

    


    7.08  
      Fund-Specific Installments or Unforeseeable Emergency
      Distributions

    


    The
      payment to a Participant or Beneficiary of installments or an unforeseeable
      emergency distribution shall reduce the value of his or her accounts in his
      or
      her Mirror Investment Fund(s) as designated by the Participant or Beneficiary.
      In the event the Participant or Beneficiary fails to designate the Mirror
      Investment Funds from which payment is to be made, the value of Mirror
      Investment Funds shall be reduced on a pro-rata basis.

    


    7.09 
      Form
      of Payments.

    


    Payment
      of all benefits from the Plan shall be made only by check. No payments of
      Company stock shall be permitted.

    


    7.10 
      Change
      in Control

    


    (a) Authority
      of the Board of Directors.
      Upon
      a Change in Control as defined in Section 7.10(c), the Board of Directors of
      the
      Parent Company 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 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 5.02(c); (ii) fund a grantor trust in accordance with the provisions
      of
      Section 7.10(b); 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 Section 5.02(a) or
      (b).

    


    (b) 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 been
      earned or vested 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, to the extent permitted by Code section 409A and the regulations
      thereunder, transfer to the

     

     

    
      
        19

      

      
        
        

        
        

      

      
        
        

      

    

    grantor
      trust an amount necessary to pay all amounts contributed or vested under the
      Plan 

    during
      the preceding twelve months.

    


    (c) 
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 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 terms 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.

    


    7.11 
      Reemployed
      Participants

    


    If
      the
      Participant is reemployed, his or her scheduled payments under Section 7.01
      shall continue. Any additional benefits payable to or on behalf of the
      Participant because of a subsequent Separation from Service shall be paid in
      the
      normal form of payment in accordance with this Article 7. A reemployed
      Participant will be allowed to make a new election to defer to the extent
      permitted under Section 2.04 above.

     

    7.12 
      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 7.07, and Section 7.13, 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 of the Company will have the discretion to accelerate payments in
      accordance with the provisions of Treasury Regulation section 1.409A-3(j)(4)(ix)
      or its successor). 

    


    7.13 
      Limited
      Cashouts.
      

    


    If
      a
      Participant under this Plan has no benefits due under the Supplemental
      Retirement Program for Management Profit-Sharing Associates of the J.C. Penney
      Corporation, Inc. or the J.C. Penney Corporation, Inc. Benefit Restoration
      Plan,
      and if a Participant’s or Beneficiary's benefit under this Plan when combined
      with the Participant’s or Beneficiary's benefit under 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 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, provided that the payment
      results in the

     

    
      
        20

      

      
        
        

        
        

      

      
        
        

      

    

    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 7.04 with an adjustment
      for interest in accordance with the Participant’s investment
      election.  


    



    
      
        21

      

      
        
        

        
        

      

      
        
        

      

    


    ARTICLE
      EIGHT

    


    AMENDMENT
      AND TERMINATION

    


    8.01 
      Plan
      Amendment

    


    The
      Human Resources and Compensation Committee may amend the Plan at any time and
      from time to time, without prior notice to any Participant or Beneficiary;
      provided, however, that the Human Resources Committee also may make amendments
      that relate primarily to the administration of the Plan, are applied in a
      uniform and consistent manner to all Participants, and are reported to the
      Human
      Resources and Compensation Committee.

    


    8.02 
      Plan
      Termination

    


    The
      Board of Directors of the Parent Company may terminate or discontinue the Plan
      at any time. If the Plan is terminated, it shall be on such terms and conditions
      as the Board of Directors of the Parent Company shall deem
      appropriate.
      The
      Board of Directors of the Parent Company 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 as provided under Section 7.10 of the Plan, must comply
      with the provisions of Code section 409A and Treasury Regulation section
      1.409A-3(j)(4)(ix), or its successor.

    


    



    
      
        22

      

      
        
        

        
        

      

      
        
        

      

    


    ARTICLE
      NINE

    


    MISCELLANEOUS

    


    9.01 
      Plan
      Administration

    


    The
      Plan shall be administered under the direction of the Human Resources and
      Compensation Committee. Except as otherwise provided below, the Benefits
      Administration Committee shall be considered the Plan Administrator for purposes
      of ERISA.

    


    The
      Human Resources and Compensation Committee may delegate all or some of the
      responsibility for the administration of the Plan to the Human Resources
      Committee or the Benefits Administration Committee in which case such Committee
      shall assume such delegated power and authority in administering the Plan to
      that extent; provided, however, that in no event shall the Human Resources
      Committee or the Benefits Administration Committee have any power or authority
      with respect to matters involving a Participant who is a member of the Executive
      Board of the Company or a Participant who is subject to Section 16(b) of the
      Exchange Act.

    


    The
      Plan Administrator has the authority and discretion to construe and interpret
      the Plan in a manner consistent with the requirements of Code Section 409A.
      As
      part of this authority, the Plan Administrator has the discretion to resolve
      inconsistencies or ambiguities in the language of the Plan, to supply omissions
      from or correct deficiencies in the language of the Plan, and to adopt rules
      for
      the administration of the Plan which are not inconsistent with the terms of
      the
      Plan. The Plan Administrator also has the authority and discretion to resolve
      all questions of fact relating to any claim for benefits as to any matter for
      which the Plan Administrator has responsibility. All determinations of the
      Plan
      Administrator are final and binding on all parties.

    


    Each
      person considered to be a fiduciary with respect to the Plan shall have only
      those powers and responsibilities as are specifically given that person under
      this Plan. It is intended that each such person shall be responsible for the
      proper exercise of his or her own powers and responsibilities, and shall not
      be
      responsible for any act or failure to act of any other person considered to
      be a
      fiduciary or any act or failure to act of any person considered to be a
      non-fiduciary.

    


    9.02 
      Plan
      Expenses

    


    All
      Plan administration expenses incurred by the Company or the Plan Administrator
      shall be paid by the Company.

    


    9.03 
      Effect
      on Other Benefits

    


    Participation
      in the Plan shall not reduce any welfare benefits or retirement benefits offered
      by the Company, except that the amounts deferred under the Plan and


     

     

    
      
        23

      

      
        
        

        
        

      

      
        
        

      

    

    any
      Plan benefits shall not be considered "Compensation" for purposes of the Savings
      Plan.

    


    9.04 
      No
      Guarantee of Employment

    


    Neither
      participation in the Plan nor any action taken under the Plan shall confer
      upon
      a Participant any right to continue in the employ of an Employer or affect
      the
      right of such Employer to terminate the Participant's employment at any time.
      

    


    9.05 
      Disclaimer
      of Liability

    


    The
      Employer shall be solely responsible for the payment of Plan benefits hereunder.
      The members of the Human Resources and Compensation Committee, the Human
      Resources Committee, and the Benefits Administration Committee and the officers,
      directors, employees, or agents of the Company or any other Employer, shall
      not
      be liable for such benefits. Unless otherwise required by law, no such person
      shall be liable for any action or failure to act, except where such act or
      omission constitutes gross negligence or willful or intentional
      misconduct.

    


    9.06 Severability

    


    If
      any
      provision of the Plan shall be held invalid or unenforceable, such invalidity
      or
      unenforceability shall apply only to that provision, and shall not affect or
      render invalid or unenforceable any other provision of the Plan. In such event,
      the Plan shall be administered and construed as if such invalid or unenforceable
      provision were not contained herein. If the application of any Plan provision
      to
      any Participant or Beneficiary shall be held invalid or unenforceable, the
      application of such provision to any other Participant or Beneficiary shall
      not
      in any manner be affected thereby.

    


    9.07 Successors

    


    The
      Plan and any election to defer shall be binding on (i) the Company and its
      successors and assigns, (ii) any Employer and its successors and assigns, (iii)
      each Participant, (iv) each Beneficiary, and (v) the heirs, distributees, and
      legal representatives of each Participant and Beneficiary.

    


    9.08 Governing
      Law

    


    Except
      to the extent that the Plan may be subject to the provisions of ERISA or the
      Code, the Plan shall be construed and enforced according to the laws of the
      State of Texas without giving effect to the conflict of laws principles thereof.
      In the event limitations imposed by ERISA on legal actions do not apply, the
      laws of the State of Texas shall apply, and a cause of action under the Plan
      must be brought no later than four years after the date the action
      accrues.


    
      
        24

      

      
        
        

        
        

      

      
        
        

      

    

    


    9.09 
      Construction

    


    As
      used
      herein, the masculine shall include the feminine, the singular shall include
      the
      plural, and vice versa, unless the context clearly indicates otherwise. Titles
      and headings herein are for convenience only and shall not be considered in
      construing the Plan. The words "hereof," "hereunder", and other similar
      compounds of the word "here" shall mean and refer to the entire Plan and not
      to
      any particular provision or Section.

    


    9.10 
      Taxes

    


    Any
      taxes imposed on Plan benefits shall be the sole responsibility of the
      Participant or Beneficiary. The Company shall deduct from Plan benefits any
      federal taxes, state taxes, local taxes, or other taxes required to be withheld.
      The Company shall, unless the Plan Administrator elects otherwise, withhold
      such
      taxes at the applicable flat rate percentage. The Company shall also deduct
      from
      any payment of Compensation, including any cash incentive payments, on the
      date
      such payment would have been made if not deferred under this Plan Social
      Security and Medicare taxes or other taxes required to be withheld on such
      date.

    


    9.11 
      Non-Assignabilty

    


    Unless
      otherwise required by law, and prior to distribution to a Participant or
      Beneficiary, Plan benefits shall not be subject to assignment, transfer, sale,
      pledge, encumbrance, alienation, or charge by such Participant or Beneficiary,
      and any attempt to do so shall be void. Plan benefits shall not be liable for
      or
      subject to garnishment, attachment, execution, or levy, or liable for or subject
      to the debts, contracts, or liabilities of the Participant or Beneficiary;
      provided, however, that the Company may offset from the payment of any Plan
      benefits to a Participant or Beneficiary amounts owed by the Participant to
      an
      Employer, in all events subject to the requirements of Code section
      409A.

    


    9.12 
      Claims
      Procedure

    


    If
      a
      Participant or Beneficiary ("claimant") does not receive the benefits which
      the
      claimant believes he or she is entitled to receive under the Plan, the claimant
      may file a claim for benefits with the Chief Human Resources and Administration
      Officer (or his or her delegate). All claims must be made in writing no later
      than the time prescribed by Treasury Regulation section 1.409A-3(g) and must
      be
      signed by the claimant. If the claimant does not furnish sufficient information
      to determine the validity of the claim, the Chief Human Resources and
      Administration Officer (or his or her delegate) will indicate to the claimant
      any additional information which is required.

    


    Each
      claim will be approved or disapproved by the Chief Human Resources and
      Administration Officer (or his or her delegate) within 90 days following receipt
      of the 

     

    
      
        25

      

      
        
        

        
        

      

      
        
        

      

    

    information
      necessary to process the claim. In the event the Chief Human Resources and
      Administration Officer (or his or her delegate) denies a claim for benefits
      in
      whole or in part, the Chief Human Resources and Administration Officer (or
      his
      or her delegate) will notify the claimant in writing of the denial of the claim.
      Such notice by the Chief Human Resources and Administration Officer (or his
      or
      her 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, 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 procedures and time limits as set forth below, and a statement that
      the
      claimant is entitled to bring court action only after exhausting all internal
      procedures . 

    


    A
      claimant may appeal a denial of his or her claim by requesting a review of
      the
      decision by the Plan Administrator. An appeal must be submitted in writing
      within 180 days after the denial and must (i) request a review of the claim
      for
      benefits under the Plan, (ii) set forth all the grounds upon which the
      claimant's request for review is based and any facts in support thereof, and
      (iii) set forth any issues or comments which the claimant deems pertinent to
      the
      appeal.

    


    The
      Plan Administrator will make a full and fair review of each appeal and any
      written materials submitted in connection with the appeal. The Plan
      Administrator 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. The claimant will be given the
      opportunity to review pertinent documents or materials upon submission of a
      written request to the Plan Administrator, provided the Plan Administrator
      finds
      the requested documents or materials pertinent to the appeal. On the basis
      of
      its review, the Plan Administrator will make an independent determination of
      the
      claimant's eligibility for benefits under the Plan.

    


    The
      decision of the Plan Administrator on any claim for benefits will be final
      and
      conclusive upon all parties thereto. In the event the Plan Administrator denies
      an appeal in whole or in part, the Plan Administrator will give written notice
      of the decision to the claimant, which notice will set forth, in a manner
      calculated to be understood by the claimant, the specific reasons for such
      denial and specific reference to the pertinent Plan provisions on which the
      decision was based and provide any other additional information, as applicable,
      required by 29 Code of Federal Regulations 2560.503-1. 

    


    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.


    
      
        26

      

      
        
        

        
        

      

      
        
        

      

    

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    


    
      	
               

            	
              Example
                One:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              250,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              5.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              10.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              5.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              5.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((b)-(c))*(d)

            	
              8,500

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              2,500

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              3,000

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              12,540

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              26,540

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              15,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              7,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              12,540

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              6,270

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              1,230

            


    

    


    
      
        27

      

      
        
        

        
        

      

      
        
        

      

    

    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Two:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              150,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              20,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              3.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              1.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((a)-(c))*(d)

            	
              3,900

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              200

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              8,754

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              12,854

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              9,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              4,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              8,754

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              4,377

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              123

            


    


    
      
        28

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Three:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              2,000,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              300,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              3.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              5.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              0.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              10.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((b)-(c))*(e)

            	
              6,600

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(g)

            	
              30,000

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b)-(c))*(e)

            	
              74,000

            	
               

            
	
              (l)

            	
              Lesser
                of Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i))*.06, if (a)>(b) then
                (b)-(i)*.06

            	
              12,804

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              123,404

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              120,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              60,000

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              12,804

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              6,402

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              53,598

            
	 	 	 	 
	
              Note:
                If a participant hits the compensation limit before his incentive
                compensation is paid (as in the above example), the formula is changed
                to
                use the appropriate percentage election and so that the deferrals
                on the
                Incentive Compensation do not reduce the compensation used in the
                Savings
                Plan.

            


    


    
      
        29

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Four:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              450,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              6.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              6.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              6.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((b)-(c))*(d)

            	
              10,200

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              3,000

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              13,800

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              12,408

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              39,408

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              27,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              13,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              12,408

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              6,204

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              7,296

            


    

    



    
      
        30

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Five:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              150,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              1.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              1.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((a)-(c))*(d)

            	
              1,000

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              500

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              8,910

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              10,410

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              9,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              4,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              8,910

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              4,455

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              45

            


    


    
      
        31

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Six:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              150,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              4.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              0.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((a)-(c))*(d)

            	
              4,000

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              0

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              8,760

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              12,760

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              9,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              4,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              8,760

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              4,380

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              120

            


    

    



    
      
        32

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Seven:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              150,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              2.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              6.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((a)-(c))*(d)

            	
              2,000

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              3,000

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              8,700

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              13,700

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              9,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              4,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              8,700

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              4,350

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              150

            


    

    



    
      
        33

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Eight:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              200,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              1.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              1.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((a)-(c))*(d)

            	
              1,500

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              500

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              11,880

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              13,880

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              12,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              6,000

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              11,880

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              5,940

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              60

            


    


    
      
        34

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Nine:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              450,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              14.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              10.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((b)-(c))*(d)

            	
              23,800

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              5,000

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              11,472

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              40,272

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              27,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              13,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              11,472

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              5,736

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              7,764

            


    


    
      
        35

      

      
        
        

        
        

      

      
        
        

      

    


     Appendix
      A

    

      DOCUMENT
        HISTORY

      


      This
        document contains the plans adopted on July 8, 1998 by the J. C. Penney Company,
        Inc. Board of Directors effective January 1, 1999 as amended on the dates
        and
        under the authorities noted below:

       

       

      
        	
              	
                December
                  11, 1998

              	
                Human
                  Resources Committee

                 

              


        	
              	
                January
                  1, 1999 

              	
                Effective
                  Date

                 

              


        	
              	
                July
                  14, 1999 

              	
                Board
                  of Directors

                 

              


        	
              	
                December
                  10, 1999

              	
                Human
                  Resources Committee

                 

              


        	
              	
                December
                  11,
                  2000

              	
                Human
                  Resources Committee

              




      
        	 	
                March
                  22, 2001

              	
                Human
                  Resources and Compensation
                  Committee

              


      

      


      
        	 	
                June
                  1, 2001

              	
                Director
                  of Human Resources

              


      

      


      
        	 	
                October
                  10, 2001

              	
                Human
                  Resources Committee

              


      

      


      
        	 	
                January,
                  27, 2002

              	
                Chief
                  HR and Admin. Officer

              


      

      


      
        	 	
                June
                  1, 2002

              	
                Director
                  of Human Resources

              


      

      


      
        	 	
                November
                  14, 2006

              	
                Human
                  Resources and Compensation
                  Committee

              


      

      


      
        	 	
                February
                  28, 2007

              	
                Human
                  Resources and Compensation
                  Committee

              


      

      


      
        	 	
                September
                  20, 2007

              	
                Human
                  Resources and

              


      

      
        	 	 	
                Compensation
                  Committee

              


      

      


      
        	 	
                December
                  31, 2007

              	
                Human
                  Resources and 

              


      

      
        	 	 	
                Compensation
                  Committee

              


      

    


    


    
      
 

    


    
      
        36

      

      
        
        

        
        

      

      
        
        

        
        

      

    

    
 

    


    


     

     

    J.
      C. PENNEY CORPORATION, INC.

    


    MIRROR
      SAVINGS PLAN 

    


    


    


    AMENDED
      AND RESTATED, EFFECTIVE FEBRUARY 28, 2007

    


    


    


    


    


    


    


    


    


    


    


    


    


    



    
      
        
        

      

      
        
        

        
        

      

      
        
        

        
        

      

    



    


    


    


    J.
      C. PENNEY CORPORATION, INC.

    


    MIRROR
      SAVINGS PLAN 

    


    Amended
      and Restated Effective February 28, 2007

    


    


    INTRODUCTION

    


    


    The
      J.
      C. Penney Corporation, Inc. Mirror Savings Plans I and II (“Plans”) were adopted
      effective January 1, 1999 as part of a program to redesign the Company's
      qualified and non-qualified savings plans to optimize the retirement savings
      opportunities for Associates.

    


    The
      Plans are maintained by the Company on an unfunded basis primarily for the
      purpose of providing deferred compensation to a select group of management
      or
      highly compensated employees.

    


    Effective
      December 31, 2006, the J.C. Penney Corporation Inc. Mirror Savings Plan I was
      closed to new deferrals and new participants. Effective on January 1, 2007,
      the
      J.C. Penney Corporation, Inc. amends and restates Mirror Savings Plan II and
      renames the plan the J.C. Penney Corporation, Inc. Mirror Savings Plan.



    
      
        
        

      

      
        
        

      

       

    

    J.
      C.
      PENNEY CORPORATION, INC.

    MIRROR
      SAVINGS PLAN 

    


    TABLE
      OF CONTENTS

    
      
        	
                 Article

              	 	 	 Page
	 	 	 	 
	
                ARTICLE ONE

              	 	DEFINITIONS............................................................................................	1
	
                 

              	 	 	 
	
                ARTICLE
                  TWO

              	
              	ELIGIBILITY
                AND
                PARTICIPATION.....................................................	4
	
                 

              	 	 	 
	
                2.01

              	 	Eligibility
                Determined for Each Plan
                Year..............................................	4
	
                2.02

              	 	
                Eligible
                  Associate.....................................................................................

              	4
	
                2.03

              	 	Participation...............................................................................................	5
	
                2.04

              	 	Election
                to
                Defer........................................................................................	5
	
                2.05

              	 	Deferral
                Amounts.......................................................................................	6
	
                2.06

              	 	Investment
                Elections................................................................................	6
	
                 

              	 	 	 
	
                ARTICLE
                  THREE

              	 	BENEFITS..............................................................................................	7 
	 	 	 	 
	
                3.01

              	 	Establishment
                of
                Accounts.......................................................................	7
	
                3.02

              	
              	Personal
                Accounts....................................................................................	7
	
                3.03

              	 	Company
                Accounts...................................................................................	7
	
                3.04

              	 	Mirror
                Company Matching
                Contribution..................................................	8
	
                3.05

              	 	Mirror
                Retirement Account
                Contribution..................................................	8
	
                3.06

              	 	Mirror
                Discretionary
                Contribution.............................................................	9
	 	 	 	 
	
                ARTICLE
                  FOUR

              	 	TRANSFERS...........................................................................................	10
	
                 

              	 	 	 
	
                4.01

              	 	Personal
                Accounts....................................................................................	10
	
                4.02

              	 	Company
                Accounts...................................................................................	10
	 	 	 	 
	
                ARTICLE
                  FIVE

              	 	VESTING.................................................................................................	11
	 	 	 	 
	
                5.01

              	 	Personal
                Accounts....................................................................................	11
	
                5.02

              	 	
                Company
                  Accounts...................................................................................

              	11
	
                5.03

              	 	Forfeitures..................................................................................................	11
	 	 	 	 
	
                ARTICLE
                  SIX

              	
              	TYPE
                OF
                PLAN.........................................................................................	12
	 	 	 	 
	
                6.01

              	 	Top
                Hat
                Plan..............................................................................................	12
	
                6.02

              	 	No
                Funding................................................................................................	12
	 	 	 	 
	
                ARTICLE
                  SEVEN

              	
              	DISTRIBUTIONS........................................................................................	
                13

              
	 	 	 	 
	
                7.01

              	 	 Normal
                Form of
                Payment........................................................................	13


      

       

      
         

         

         

         

         

         

      

    

    
      
        	
                 7.02

              	 	
                
                  Separation
                    from
                    Service...........................................................................

                

              	13
	
                 7.03

              	 	Death............................................................................................................	13
	
                 7.04

              	 	Alternate
                Form of
                Payment........................................................................	14
	
                 7.05

              	 	Hardship
                Distribution..................................................................................	14
	
                 7.06

              	 	Fund-Specific
                Installments or Hardship
                Distributions.............................	15
	
                 7.07

              	 	Form
                of
                Payments.......................................................................................	15
	
                 7.08

              	 	Change
                of
                Control.......................................................................................	16 
	
                 7.09

              	 	Reemployed
                Participants...........................................................................	19 
	 	 	 	 
	 	 	 	 
	
                ARTICLE EIGHT

              	 	AMENDMENT
                AND
                TERMINATION.........................................................	20
	
                 

              	 	 	 
	
                 8.01

              	 	Plan
                Amendment.........................................................................................	20
	
                 8.02

              	 	Plan
                Termination.........................................................................................	20
	
                 8.03

              	 	Automatic
                Plan
                Termination.......................................................................	20
	 	 	 	 
	
                ARTICLE
                  NINE

              	 	MISCELLANEOUS.....................................................................................	21
	 	 	 	 
	
                 9.01

              	 	Plan
                Administration.....................................................................................	21
	
                9.02

              	 	Plan
                Expenses............................................................................................	21
	
                 9.03

              	 	
                Effect
                  on
                  Other
                  Benefits.............................................................................

              	21
	
                 9.04

              	 	No
                Guarantee
                of
                Employment...................................................................	22
	
                 9.05

              	 	Disclaimer
                of
                Liability.................................................................................	22
	
                 9.06

              	 	Severability..................................................................................................	22
	
                 9.07

              	 	Successors..................................................................................................	22
	
                 9.08

              	 	Governing
                Law............................................................................................	 22
	
                 9.09

              	
                 

              	Construction.................................................................................................	 23
	
                 9.10

              	 	Taxes............................................................................................................	 23
	
                 9.11

              	 	Non-Assignability........................................................................................	 23
	
                 9.12

              	 	Claims
                Procedure.......................................................................................	 23
	 	 	 	 
	
                ARTICLE
                  TEN

              	 	SECTION
                409A
                TRANSITION
                RELIEF....................................................	 25
	 	 	 	 
	
                 10.01

              	 	Priority
                over
                Other
                Provisions....................................................................	 25
	
                 10.02

              	
                 

              	Cancellation
                of Deferrals and Termination of Participation...................	 25
	
                 10.03

              	 	
                Change
                  in
                  Payment Elections or Conditions on or Before

                December
                  31,
                  2006...................................................................................

              	 25
	 	 	 	 
	
                Exhibit
                  A

              	 	Examples
                of
                Calculations for the Company Matching Contribution	 
	 	 	 	 
	
                Appendix
                  A

              	 	Document
                History	 


      

    

     

    
      
        
        

      

      
        
        

      

       

    

    


    ARTICLE
      ONE

    


    DEFINITIONS

    


    As
      used
      herein, the following words and phrases have the following respective meanings
      unless the context clearly indicates otherwise.

    


     Active
      Participant:
      A
      Participant who defers part of his or her Compensation for a Plan Year (or
      part
      thereof) pursuant to an election to defer.

    


    Associate:
      Any
      person who is classified as an associate and employed by an Employer if the
      relationship between the Employer and such person constitutes the legal
      relationship of employer and employee.

    


    Beneficiary:
      The
      person or persons designated by the Participant on a beneficiary form required
      by the Company for this purpose to receive benefits payable under the Plan
      because of the Participant's death.

    


    Code:
      The
      Internal Revenue Code of 1986, as amended from time to time.

    


    Company:
      On
      and after January 27, 2002, 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.

    


    Company
      Account:
      A
      phantom account established in accordance with Article Three to which Mirror
      Company Matching, Mirror Retirement Account and Mirror Discretionary
      contributions plus earnings are credited.

    


    Compensation:
      The
      total cash remuneration payable to an Associate for a Plan Year by his or her
      Employer, that qualifies as wages as the term wages is defined in Code section
      3401 (a), determined without regard to any reduction for workers' compensation
      and state disability insurance reimbursements, and all other compensation
      payments for which his or her Employer is required to furnish the Associate
      a
      written statement under Code sections 6041(d), 6051(a)(3) and 6052, reduced
      by
      any extraordinary items of special pay.

    


    In
      addition, Compensation includes any contributions made by the Associate's
      Employer on behalf of the Associate pursuant to a deferral election under any
      employee benefit plan containing a cash or deferred arrangement under Section
      401(k) of the Code, and any amounts that would have been received as cash but
      for an election to receive benefits under a cafeteria plan meeting the
      requirements of Section 125 of the Code.


    
      
         

        
        

      

      
        
        

      

       

    


        Compensation
      also includes eligible cash incentive payments in the year paid to the
      Associate, and amounts deferred by the Active Participant pursuant to Section
      2.05 of the Plan.

    


    Compensation
      for a Plan Year shall be determined without regard to the limitations on annual
      compensation under Section 401(a)(17) of the Code and without regard to
      deferrals to this Plan.

    


    An
      Associate who is in the service of the armed forces of the United States during
      any period in which his or her reemployment rights are guaranteed by law will
      be
      considered to have received the same rate of Compensation during his or her
      absence that he or she was receiving immediately prior to his or her absence,
      provided he or she returns to employment with an Employer within the time such
      rights are guaranteed.

    


    Eligible
      Associate:
      An
      Associate who has satisfied the eligibility requirements of the Plan for a
      Plan
      Year in accordance with Section 2.02.

    


    Employer:
      The
      Company and any subsidiary company or affiliate of the Company that is a
      Participating Employer as defined in Article I of the Savings Plan.

    


    ERISA:
      The
      Employee Retirement Security Act of 1974, as amended from time to
      time.

    


    Exchange
      Act:
      The
      Securities Exchange Act of 1934, as amended from time to time.

    


    Human
      Resources and Compensation Committee:
      The
      Human Resources and Compensation Committee of the Board of Directors of the
      Parent Company.

    


    Human
      Resources Committee:
      The
      Human Resources Committee of the Company.

    


    Mirror
      Company Matching Contributions:
      The
      phantom amounts deemed to be contributed by the Company for each Plan Year
      as
      determined under Section 3.04.

    


    Mirror
      Discretionary Contributions:
      The
      phantom amounts deemed to be contributed by the Company for each Plan Year
      as
      determined under Section 3.06.

    


    Mirror
      Investment Funds:
      Phantom funds established as book reserve entries in the books and records
      of
      the Company to which a Participant's deferral amounts under the Plan are
      credited based on the investment elections of the Participant.
      The investment returns of such funds shall be assumed to match the returns
      of
      the same investment funds available to participants under the Savings
      Plan.


    
      
        2

        
        

      

      
        
        

        
        

      

       

    

     

    Mirror
      Retirement Account Contributions:
      The
      phantom amounts deemed to be contributed by the Company for each Plan Year
      as
      determined under Section 3.05.

    


    Parent
      Company:
      J. C.
      Penney Company, Inc., a Delaware corporation, and any successor
      corporation.

    


    Participant:
      An
      Eligible Associate who participates in the Plan in accordance with Article
      Two,
      and who has not yet received a distribution of the entire amount of his or
      her
      vested benefits under the Plan.

    


    Personal
      Account:
      A
      phantom account established in accordance with Article Three to which a
      Participant's deferral amounts plus earnings are credited.

    


    Plan:
      The
      J.C. Penney Corporation Inc. Mirror Savings Plan, as amended from time to
      time.

    


    Plan
      Year:
      Each
      calendar year.

    


    Savings
      Plan:
      Prior
      to January 27, 2002, the J. C. Penney Company, Inc. Savings, Profit-Sharing
      and
      Stock Ownership Plan, as amended from time to time, and on and after January
      27,
      2002, the J. C. Penney Corporation, Inc. Savings, Profit-Sharing and Stock
      Ownership Plan, as amended from time to time.

    


    Separation
      from Service:
      The
      termination of employment of an Eligible Associate or a Participant because
      of
      retirement, resignation, discharge, disability or death.
      An
      Eligible Associate or Participant who transfers from one Employer to another
      Employer without a break in employment shall not be deemed to have a Separation
      from Service.

    


    Valuation
      Date:
      With
      respect to all Mirror Investment Funds, each day of a calendar year on which
      the
      New York Stock Exchange is open.

    


    With
      respect to transactions or distributions initiated by a Participant or
      Beneficiary, (a) the date of receipt by the plan administrator of the request
      if
      it is received prior to the close of the New York Stock Exchange, or (b) the
      next trading day if the request is received after the close of the New York
      Stock Exchange.

    


    With
      respect to distributions not initiated by a Participant, the date the
      distribution is processed.


    
      
        3

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    ARTICLE
      TWO

    


    ELIGIBILITY
      AND PARTICIPATION

    


    2.01
       Eligibility
      Determined for Each Plan Year

    


    The
      eligibility of each Associate to participate in the Plan as an Active
      Participant is determined for each Plan Year in accordance with Section 2.02
      below. Eligibility for, or participation in, the Plan for a Plan Year does
      not
      give an Associate the right to defer part of his or her Compensation under
      the
      Plan for any other Plan Year.

    


    2.02
       Eligible
      Associate

    


    An
      Associate shall be eligible to participate in the Plan as an Active Participant
      for a Plan Year if the Associate for the preceding Plan Year had:

    


    (a) Satisfied
      the eligibility requirements to make deferrals to the Savings Plan;
      and

    


    (b)
      Earnings in excess of $100,000 (as adjusted in accordance with Section 414(q)(1)
      of the Code) 

    


    
      	(1)  	
              If
                a current Associate, such earnings will be based on his actual
                Compensation through October 31 of such year plus his or her projected
                earnings from November 1 through December 31 of such year determined
                by
                using his or her base salary (as defined below) in effect on October
                31 of
                such year.

            


    

    


    
      	(2)  	
              If
                an Associate was not an Associate in the preceding Plan Year, he
                or she
                shall be eligible to participate in the year of hire or rehire if
                in
                addition to meeting the requirements of Section 2.02(a) above, he
                or she
                is expected to have projected earnings of at least an amount in excess
                of
                $100,000 (as adjusted in accordance with Section 414(q)(1) of the
                Code) in
                the current Plan Year based on his Base Salary.


            


    

    


    Base
      salary shall mean the aggregate amount of the base pay rate (before any
      deductions of contributions or deferrals), commissions and amounts under the
      J.C. Penney Corporation, Inc. Management Incentive Compensation Plan due and
      payable to an Eligible Associate in the applicable Plan Year designated by
      his
      or her Employer as the Eligible Associate's monthly pay as reflected on the
      Employer's personnel records including any such amounts otherwise due and
      payable with respect to which his or her election to defer applies.

     

    
      
        4

        
        

      

      
        
        

      

       

    


    2.03
       Participation

    


    An
      Eligible Associate for a Plan Year shall participate in the Plan for that Plan
      Year as an Active Participant by making a timely election to defer in accordance
      with Section 2.04 below. An Eligible Associate who fails to satisfy the
      requirements of Section 2.04 below shall not be allowed to make an election
      to
      defer and shall not be an Active Participant for the applicable Plan
      Year.

    


    A
      Participant who is not an Active Participant for a Plan Year shall continue
      to
      participate in the Plan in all respects except that such Participant shall
      not
      have the right to defer part of his or her Compensation under the Plan for
      that
      Plan Year, and shall
      not be entitled to a Mirror Company Matching Contribution or a Mirror
      Discretionary Contribution (as determined under Sections 3.04 or 3.06,
      respectively) for that Plan Year. A Participant hired on or after January 1,
      2007, shall be entitled to receive a Mirror Retirement Account Contribution
      (as
      determined under 3.05) regardless of whether he or she is an Active
      Participant.

    


    2.04  Election
      to Defer

    


    All
      elections to defer for a Plan Year must be made in a manner approved by the
      plan
      administrator. An Eligible Associate for a Plan Year may elect to defer a
      percentage (as described in Section 2.05 below) of his or her Compensation
      for
      such Plan Year by filing an election which must be received by the plan
      administrator by December 31 of the preceding Plan Year. A newly Eligible
      Associate must file his or her election with the plan administrator within
      30
      days of his or her first date of eligibility for participation in the Mirror
      Plan. An Active Participant cannot change or terminate his or her election
      to
      defer during a Plan Year for that Plan Year except to the extent allowed under
      the hardship provisions of Section 7.05. However, an Eligible Associate may
      change his or her election to defer for a subsequent Plan Year with the plan
      administrator by December 31 of the preceding Plan Year.

    


    An
      election to defer also shall terminate:

    


    
      	 	 	
              (a)

            	
              at
                the end of the Plan Year;

            


    

    


    
      	 	 	
              (b)

            	
              if
                the Eligible Associate or Participant has a Separation from Service
                with
                an Employer, or

            


    

    


    (c)   
      if
      the
      Plan is terminated, or

    


    
      	 	 	
              (d)
                

            	
              upon
                a Change of Control that occurs before the date that payment of
                Compensation would have been made if not
                deferred.

            


    

     

    
      
        5

        
        

      

      
        
        

      

       

    


    2.05  Deferral
      Amounts

    


    An
      Active Participant for a Plan Year may defer 

    


    (a)
      up
      to 14% of his Compensation in that Plan Year up to the earnings dollar limit,
      and,

    


    (b)
      up
      to 75% of his Compensation in that Plan Year that exceeds the earnings dollar
      limit. 

    


    All
      deferral amounts shall be in whole percentages and made by payroll deduction.
      The earnings dollar limit of an Active Participant for a Plan Year shall be
      $225,000, as adjusted for cost of living increases in accordance with Section
      401(a)(17) of the Code. 

    


    2.06
       Investment
      Elections

    


    A
      Participant shall complete an election, in the manner determined by the plan
      administrator, requesting that all of his or her future deferral amounts (in
      whole percentages) be applied to the purchase for him or her, as of the earliest
      practicable Valuation Date after such amounts are deferred, of units in his
      or
      her Personal Accounts within
      any one or more of the Mirror Investment Funds in each case at a price equal
      to
      the value of such units as of such Valuation Date.

    


    Such
      election initially must be made prior to the commencement of his or her
      participation in the Plan and may be changed at any time during the Plan Year.
      Each such election shall be effective as soon as administratively feasible
      following receipt by the plan administrator or its delegate of the Participant's
      election.

    


    In
      the
      event that no timely election by the Participant is on file with the plan
      administrator, such Participant shall be deemed to have elected that all
      deferral amounts shall be applied to the purchase for him or her of units in
      the
      Personal Account within the Mirror Investment Fund that is the Interest Income
      Fund.


    
      
        6

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    ARTICLE
      THREE

    


    BENEFITS

    


    3.01
       Establishment
      of Accounts

    


    A
      Personal Account and a Company Account within each Mirror Investment
      Fund shall
      be established for each Participant in the Plan as if assets were invested
      in a
      trust. All amounts credited to the Personal Accounts and Company Accounts of
      a
      Participant shall at all times be held in the Company's general funds as part
      of
      the Company's general assets, unless a trust is established pursuant to Section
      7.08.

    


    The
      value, including gains and losses, of such accounts and funds shall be
      determined by the plan administrator in the same manner that the value is
      determined under the Savings Plan. As of each Valuation Date, the net asset
      value of a unit shall equal the net asset value of a unit as determined under
      the Savings Plan.

    


    3.02
       Personal
      Accounts

    


    All
      amounts deferred by an Active Participant pursuant to Article Two shall be
      credited to his or her Personal Accounts within his or her Mirror Investment
      Funds specified in his or her investment election.

    


    3.03 Company
      Accounts

    


    All
      Company matching contributions shall be credited to the Company Account of
      each
      Active Participant at each pay period. All Mirror Retirement Account
      Contributions and Mirror Discretionary Contributions shall be credited to each
      Active Participant’s Company Account within 2 1⁄2 months of the Plan Year
      end.

    


    A
      Mirror Company Matching Contribution, a Mirror Retirement Account Contribution
      and a Mirror Discretionary Contribution (as determined under Sections 3.04,
      3.05
      and 3.06 below, respectively) shall be deemed to be invested in his or her
      Company Account within the Mirror Investment Funds in accordance with the Active
      Participant’s Investment election for his or her Personal Accounts under Section
      2.06 of this Plan. In the event an Active Participant does not make an
      investment election, the Active Participant will be deemed to have elected
      the
      Mirror Investment Fund that is the Interest Income Fund.

    


    Any
      amount of Company matching contributions credited to the Participant's Company
      account under the Savings Plan and subsequently cancelled so that said plan
      could satisfy the actual contribution percentage test (as described in the
      Savings Plan) shall be credited to his or her Company Account within the Mirror
      Investment Fund that is according to the Participant’s investment election in
      the year paid.


    
      
        7

      

    

     

     

     

    All
      amounts credited to the Company Accounts of a Participant shall be subject
      to
      the vesting provisions of Article Five.

    


    
      	3.04  	
              Mirror
                Company Matching Contribution

            


    

    


    For
      each Active Participant who has completed one year of employment and 1,000
      hours
      of service, the
      Company will credit to the Mirror Company Matching Contribution account a
      matching contribution for each Active Participant in an amount equal to (i)
      50%
      (or such other percent as may be determined from time to time by the Human
      Resources and Compensation Committee) of the Active Participant's deferral
      contribution to the Plan for each payroll period that does not exceed 6% of
      the
      Active Participant's Compensation for the payroll period reduced by (ii) the
      maximum matching contribution the Active Participant could have received under
      the Savings Plan. Each Active Participant's matching contribution will be
      calculated in the same manner as in the examples attached to the Plan as Exhibit
      A.  

    


    An
      Active Participant who had a Separation from Service shall vest in the Mirror
      Company Matching Account contribution if he or she terminated:

    


    
      	(a)  	
              At
                or after age 65

            


    

    
      	(b)  	
                  Due
                to
                disability as defined under Section 409A(a)(2)(C) of the
                Code

            


    

    
      	(c)  	
              Due
                to death, or

            


    

    
      	(d)  	
                  Due
                to
                Company-approved reduction in force or unit
                closing.

            


    

    


    3.05 Mirror
      Retirement Account Contributions

    


    For
      each Participant hired or rehired on or after January 1, 2007, who has
      completed one year of employment and 1,000 hours of service and with
      Compensation in excess of the earnings dollar limit, the Company shall
      contribute an amount to the Mirror Plan equal to the difference between the
      Active Participant’s Compensation and the earnings dollar limit multiplied by
      2%. 

    


    An
      Active Participant must be in the active employ of an Employer on December
      31 of
      the Plan Year to receive credit for a Mirror Retirement Account Contribution
      for
      that Plan Year; provided, however, that an Active Participant who had a
      Separation from Service before December 31 of said year shall receive credit
      for
      one-twelfth of the Mirror Retirement Account contribution for each month or
      part
      of a month employed during the Plan Year if he or she terminated:

    


    
      	(a)  	
              At
                or after age 65 

            


    

    
      	(b)  	
              Due
                to disability as defined under Section 409A(a)(2)(C) of the
                Code

            


    

    
      	(c)  	
              Due
                to death, or 

            


    

    
      	(d)  	
              Due
                to Company-approved reduction in force or unit
                closing.

            


    

    


    An
      Associate shall not have a right or claim to any of the amounts contributed
      as a
      Mirror Retirement Account Contribution if the Associate is summarily discharged,
      as defined by the Company (including resignation in lieu thereof), unless the
      Benefits


    
      
        8

      

    

     

    
 

    Administration
      Committee, in its sole discretion, determines that such Associate shall be
      eligible for such benefits notwithstanding such summary discharge.

    


    3.06 Mirror
      Discretionary Contribution

    


    Pursuant
      to Section 3.03 of the Savings Plan, a Discretionary Contribution shall be
      credited for each Active Participant to the Company Account in the Mirror Plan
      in accordance with the calculated deferral percentage of the Active Participant
      and in a manner deemed appropriate by the Human Resources and Compensation
      Committee. 

    


    An
      Active Participant must be in the active employ of an Employer on December
      31 of
      the Plan Year to receive credit for a Mirror Discretionary Contribution for
      that
      Plan Year; provided, however, that an Active Participant who had a Separation
      from Service before December 31 of said year shall receive credit for
      one-twelfth of the Mirror Discretionary Contribution for each month employed
      during the Plan Year if he or she terminated:

     

    
      	(a)  	
              At
                or after age 65 

            


    

    
      	(b)  	
              Due
                to disability as defined under Section 409A(a)(2)(C) of the
                Code

            


    

    
      	(c)  	
              Due
                to death, or

            


    

    
      	(d)  	
              Due
                to a Company-approved reduction in force or unit
                closing.

            


    

    


    An
      Associate shall not have a right or claim to any of the amounts contributed
      as a
      Discretionary Contribution if the Associate is summarily discharged, as defined
      by the Company (including resignation in lieu thereof), unless the Benefits
      Administration Committee, in its sole discretion, determines that such Associate
      shall be eligible for such benefits notwithstanding such summary
      discharge.

    


    


     

    


    


    



    
      
        9 

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    ARTICLE
      FOUR

    


    TRANSFERS

    


    4.01  Personal
      Accounts

    


    A
      Participant may elect, once in each calendar day of the Plan Year, to transfer
      an amount (in whole percentages) equal to the value of all or part of his or
      her
      units in his or her Personal Accounts within any one or more of the Mirror
      Investment Funds to another one or more of his or her Personal Accounts within
      the Mirror Investment Funds. The value of such units shall be determined as
      of
      the Valuation Date. A transfer is effective only if made in the manner
      determined by the plan administrator.

    


    4.02  Company
      Accounts

    


    A
      Participant may elect, once in each calendar day of the Plan Year, to transfer
      an amount (in whole percentages) equal to the value of all or part of his or
      her
      units in his or her Company Accounts within any one or more of the Mirror
      Investment Funds to another one or more of his or her Company Accounts within
      the Mirror Investment Funds. The value of such units shall be determined as
      of
      the Valuation Date. A transfer is effective only if made in the manner
      determined by the plan administrator.

    


    Notwithstanding
      any other provision of the Plan, a Participant who wishes to make transfers
      from
      both his or her Personal Accounts and Company Accounts during the same day,
      must
      do so as part of the same transaction.


    
      
        10

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    ARTICLE
      FIVE

    


    VESTING

    


    5.01
       Personal
      Accounts

    


    A
      Participant shall be 100% vested in the value of his or her Personal Accounts
      within his or her Mirror Investment Funds at all times without regard to whether
      he or she is a Participant in the Plan for any future Plan Year.

    


    
      	5.02  	
              Company
                Accounts

            


    

    


    This
      Section 5.02 applies to Mirror Company Matching Contributions described in
      Section 3.04, Mirror Retirement Account Contributions described in 3.05; and
      Mirror Discretionary Contributions described in Section 3.06. A Participant
      shall be 100% vested in the value of his or her Company Accounts within his
      or
      her Mirror Investment Funds upon completion of three full years of service,
      and
      no vested interest prior to that time, for amounts credited for Plan Years
      beginning on or after January 1, 2007. 

    


    For
      amounts credited as Mirror Company Matching Contributions for Plan Years before
      January 1, 2007, such amounts will vest in the same vesting percentage
      attributable to the value of his or her Company accounts under the Savings
      Plan
      based on his or her full years of service (as defined in the Savings Plan)
      in
      accordance with the following table:

    


    
      	 Full
              years of service 	 Vested
              Percentage
	 	 
	 Less
              than 1	 0%
	 1	 20%
	 2	 40%
	 3	 60%
	 4	 80%
	 5
              or
              more	 100%


    

    


    5.03
       Forfeitures

    


    A
      Participant who is less than 100% vested in the value of his or her Company
      Accounts as of his or her Separation from Service shall forfeit the non-vested
      value of his or her Company Accounts. In the event the Participant subsequently
      is re-employed by an Employer within five years, the amount forfeited (without
      earnings) hereunder shall be restored to his or her Company Accounts in the
      same
      manner as the amount, if any, forfeited by his or her Savings Plan Company
      Accounts would be restored by purchasing units in accordance with the
      Participant’s investment election in effect at the time of his or her Separation
      from Service using the current market value as of the date of
      employment.

    


    
      
        11

        
        

      

      
        
        

      

       

    


    ARTICLE
      SIX

    


    TYPE
      OF
      PLAN

    


    6.01
       Top
      Hat Plan

    


    The
      Plan is intended to be a "pension plan" as defined in ERISA and is maintained
      by
      the Company on an unfunded basis primarily for the purpose of providing deferred
      compensation to a select group of management or highly compensated employees.
      As
      such, the Plan is intended to be construed so as not to provide income to any
      Participant or Beneficiary for purposes of the Internal Revenue Code prior
      to
      actual receipt of benefit payments under the Plan.

    


    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 and section 2520.104-24
      of Chapter 29 of the Code of Federal Regulations, participation in the Plan
      shall be restricted by the plan administrator to the extent necessary to assure
      that it will be such a plan within the meaning of such sections.

    


    Notwithstanding
      any other provision of the Plan, if the benefits of a Participant become taxable
      prior to distribution from the Plan, such amounts shall be distributed as soon
      as practicable to the affected Participant.

    


    6.02
       No
      Funding

    


    Plan
      benefits shall be payable solely from the general assets of the Company. The
      Company shall not be required to, but may at its discretion, segregate or
      physically set aside any funds or assets attributable to Plan benefits. The
      Company shall retain title to and beneficial ownership of all assets of the
      Company, including any assets which may be used to pay Plan benefits. The cost
      of the Plan shall be expensed and a book reserve shall be maintained on the
      Company's financial statements.

    


    No
      Participant or Beneficiary shall be deemed to have, pursuant to the Plan, any
      legal or equitable interest in any specific assets of the Company. To the extent
      that any Participant or Beneficiary acquires any right to receive Plan benefits,
      such right shall arise merely as a result of a contractual obligation and shall
      be no greater than, nor have any preference or priority over, the rights of
      any
      general unsecured creditor of the Company.

     

    



    
      
        12

        
        

      

      
        
        

      

       

    

     

    ARTICLE
      SEVEN

    


    DISTRIBUTIONS

    


    7.01 Normal
      Form of Payment

    


    The
      normal form of payment of benefits under the Plan shall be 5 substantially
      equal
      annual installments payable in accordance with Section 7.02 below.

    


    7.02 Separation
      from Service

    


    A
      Participant who has a Separation from Service for a reason other than death
      shall be entitled to receive the vested benefits in his or her Personal Accounts
      and Company Accounts in 5 substantially equal annual installments.

    


    The
      first annual installment shall be paid in January following the year in which
      occurs his or her Separation from Service. Each annual installment thereafter
      shall be paid in January of each year. Payment dates shall be determined by
      the
      plan administrator.

    


    Notwithstanding
      the foregoing, if the present value of the Participant’s vested benefits does
      not exceed $5,000, such benefits shall be distributed to the Participant in
      a
      single sum payment in January following the year in which occurs the later
      of
      (a) his or her Separation from Service or (b) the date of receipt by the plan
      administrator of the Participant’s notice of employment termination. Such
      present value shall be determined as of the date of receipt by the plan
      administrator of the Participant’s notice of employment termination; provided,
      however, that if the Participant had a Separation from Service before January
      1,
      2000, such present value shall be determined as of December 31, 1999. The
      payment date shall be determined by the plan administrator.

    


    7.03 Death

    


    The
      Beneficiary of a Participant who (1) has a Separation from Service because
      of
      death, or (2) dies after his or her Separation from Service but before receiving
      all of his or her vested Plan benefits shall be entitled to receive the
      remaining annual installments to which the Participant was entitled as of the
      date of death. The first annual installment payable to the Beneficiary shall
      be
      paid in January following the Participant's date of death, or, if later, after
      satisfactory proof of death is received by the plan administrator. Each annual
      installment thereafter shall be paid in January of each year. Payment dates
      shall be determined by the plan administrator.

    


    Notwithstanding
      the foregoing, if the present value of the Participant’s vested benefits does
      not exceed $5,000, such benefits shall be distributed to the Beneficiary of
      the
      Participant in a single sum payment in January following the Participant’s date
      of


    
      
        13

      

    

     

     

     

    death,
      or, if later, after satisfactory proof of death is received by the plan
      administrator. The payment date shall be determined by the plan
      administrator.

    


    A
      single-sum distribution shall be paid to the estate of the Participant if as
      of
      the date of death (1) no valid beneficiary designation by the Participant is
      on
      file with the plan administrator, (2) the Beneficiary has predeceased the
      Participant, or (3) the Beneficiary has died within 30 days after the
      Participant’s date of death.

    


    A
      single-sum distribution shall be paid to the estate of the Beneficiary if the
      Beneficiary dies before receiving all benefits to which he or she was entitled
      under the Plan.

    


    7.04
       Alternate
      Form of Payment

    


    A
      Participant entitled to receive benefits under Section 7.02 above may make
      an
      irrevocable election to receive (1) not more than 15 substantially equal annual
      installments, or (2) a single-sum distribution. The election must be made prior
      to the Participant's Separation from Service in a manner authorized by the
      plan
      administrator. If no election has been made by the Participant, benefits shall
      be paid in the normal form of payment in accordance with Section 7.02
      above.

    


    The
      first annual installment or single-sum distribution shall be paid in January
      following the year in which occurs his or her Separation from Service; provided,
      however, that the first annual installment or single-sum distribution shall
      not
      be paid until the January following the expiration of at least one calendar
      year
      after the year in which the Participant's election is made. Each annual
      installment thereafter shall be paid in January of each year.

    


    A
      Participant also may make an irrevocable election to defer payment of the first
      installment or single-sum distribution to January of a later year provided
      the
      election is made prior to the Participant's
      Separation from Service in a manner authorized by the plan administrator. If
      no
      election has been made by the Participant, benefits shall commence in accordance
      with Section 7.02 or Section 7.04 above, whichever is applicable.

    


    A
      Participant who elects both to change the normal form of payment and to defer
      payment must make the elections at the same time.

    


    7.05
       Hardship
      Distribution

    


    A
      Participant or Beneficiary entitled to vested benefits under the Plan may
      request a single-sum distribution to satisfy a severe financial hardship
      resulting from an unforeseen event or emergency (as defined below) beyond his
      control. The distribution shall be limited to the amount necessary to satisfy
      the severe financial hardship (including any applicable federal, state or local
      taxes attributable to such distribution),


    
      
        14

        
        

      

      
        
        

      

       

    


    and
      shall not exceed the current value of vested benefits payable to or on behalf
      of
      the Participant or Beneficiary.

    


    An
      unforeseen event or emergency may include, but is not limited to, a sudden
      and
      unexpected illness or accident of the Participant or Beneficiary or his or
      her
      dependent, loss of his or her property due to casualty,
      or other similar extraordinary and unforeseeable circumstances arising as the
      result of events beyond his or her control, but shall not include the purchase
      of his or her home or the college expenses of his or her child.

    


    The
      determination of the existence of a severe financial hardship and the approval
      of a hardship distribution shall be made by the Chief Human Resources and
      Administration Officer, (or his successor by title or position) or his delegate
      except as provided below. Approval shall be given only if, taking into account
      all of the facts and circumstances, continued deferral of benefits or adherence
      to the Plan's payment schedule would result in a severe financial hardship
      to
      the Participant or Beneficiary. Approval shall not be granted if such hardship
      is or may be relieved through insurance, by liquidation of his or her assets
      (to
      the extent such liquidation would not itself cause severe financial hardship),
      or by terminating his or her election to defer.

    


    With
      respect to a Participant who is a member of the Executive Board of the Company
      or a Participant who is subject to Section 16(b) of the Exchange Act, the
      determination of the existence of a severe financial hardship and the approval
      of the hardship distribution shall be made by the Human Resources and
      Compensation Committee.

    


    In
      the
      case of a Participant or Beneficiary who receives a partial hardship
      distribution while receiving benefit payments, the regular payment schedule
      of
      the Participant or Beneficiary shall continue following such
      distribution.

    


    
      	7.06  	
              Fund-Specific
                Installments or Hardship
                Distributions

            


    

    


    The
      payment to a Participant or Beneficiary of installments or a hardship
      distribution shall reduce the value of his or her accounts in his or her Mirror
      Investment Fund(s) as designated by the Participant or Beneficiary. In the
      event
      the Participant or Beneficiary fails to designate the Mirror Investment Funds
      from which payment is to be made, the value of his or her Mirror Investment
      Funds shall be reduced on a pro-rata basis.

    


    7.07 Form
      of Payments

    


    Payment
      of all benefits from the Plan shall be made only by check. No payments of
      Company stock shall be permitted.

     

    
      
        15

        
        

      

      
        
        

      

       

    


    7.08 Change
      of Control

    


    At
      the
      time of commencement of participation in the Plan, a Participant may make an
      irrevocable election to have his or her Plan benefits paid in a single-sum
      immediately upon a Change of Control (as hereafter defined). If the Participant
      makes such an election as described above, his or her vested Plan benefits
      shall
      be paid in a single-sum upon a Change of Control.

    


    If
      the
      Participant does not make such an election, then, upon a Change of Control,
      assets of the Parent Company in an amount sufficient to pay benefits then due
      under the Plan shall immediately be transferred to a grantor trust to be
      established by the Parent Company for the purpose of paying benefits hereunder,
      and the Personal Account and Company Account shall thereafter be paid to the
      Participant from such trust in accordance with the terms of the Plan; provided
      that at the time of such Change of Control, the Participant may make an
      irrevocable election to have his or her Plan benefits paid in a single-sum
      immediately, in which event the Participant’s benefits shall be reduced by 10%
      as a penalty for early withdrawal, and the Participant shall receive a
      single-sum payment of only 90% of his or her benefits otherwise payable under
      the Plan. On each anniversary date of the date of a Change of Control, the
      Parent Company shall transfer to the grantor trust an amount necessary to pay
      all benefits accrued under the plan during the preceding twelve
      months.

    


    For
      purposes of this Section 7.08, a Change of Control shall be deemed to have
      occurred if the event set forth in any one of the following paragraphs shall
      have occurred:

     

        (a)  any
      Person is or becomes the Beneficial Owner, directly or indirectly, of securities
      of the Parent Company (not including in the securities beneficially owned by
      such Person any securities acquired directly from the Parent Company or its
      Affiliates) representing 50% or more of the combined voting power of the Parent
      Company’s then outstanding securities; or

    


    (b) during
      any period of two consecutive calendar years, the following individuals cease
      for any reason to constitute a majority of the number of directors then serving
      as directors of the Parent Company: individuals, who on July 14, 1999 constitute
      the Board of Directors of the Parent Company and any new director (other than
      a
      director whose initial assumption of office is in connection with the settlement
      of an actual or threatened election contest, including but not limited to a
      consent solicitation, relating to the election of directors of the Parent
      Company) whose appointment or election by the Board of Directors of the Parent
      Company or nomination for election by the Parent Company’s stockholders was
      approved or recommended by a vote of at least two-thirds of the directors then
      still in office who either were directors on July 14, 1999 or whose appointment,
      election or nomination for election was previously so approved or recommended;
      or


    
      
        16

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    (c) there
      is consummated a merger or
      consolidation of the Parent Company or any direct or indirect subsidiary of
      the
      Parent Company with any other corporation of entity, other than

    


    
      	(i)  	
              a
                merger or consolidation which would result in the voting securities
                of the
                Parent Company outstanding immediately prior to such merger or
                consolidation continuing to represent (either by remaining outstanding
                or
                by being converted into voting securities of the surviving entity
                or any
                Parent thereof), in combination with the ownership of any trustee
                or other
                fiduciary holding securities under an employee benefit plan of the
                Parent
                Company or any subsidiary of the Parent Company, at least 50% of
                the
                combined voting power of the securities of the Parent Company, such
                surviving entity or any Parent thereof outstanding immediately after
                such
                merger or consolidation, or

            


    

    


    
      	(ii)  	
              a
                merger or consolidation effected solely to implement a recapitalization
                of
                the Parent Company (or similar transaction) in which no Person is
                or
                becomes the Beneficial Owner, directly or indirectly, of securities
                of the
                Parent Company (not including in the securities beneficially owned
                by such
                Person any securities acquired directly from the Parent Company or
                its
                Affiliates) representing 50% or more of the combined voting power
                of the
                Parent Company’s then outstanding securities;
                or

            


    

    


    (d) the
      stockholders of the Parent Company approve a plan of complete liquidation or
      dissolution of the Parent Company, or there is consummated a sale or disposition
      by the Parent Company or any of its subsidiaries of any assets which
      individually or as part of a series of related transactions constitute all
      or
      substantially all of the Parent Company’s consolidated assets, other than any
      such sale or disposition to an entity at least 50% of the combined voting power
      of the voting securities of which are owned by stockholders of the Parent
      Company in substantially the same proportions as their ownership of the voting
      securities of the Parent Company immediately prior to such sale or disposition;
      or

    


    (e)  the
      execution of a binding agreement that if consummated would result in a Change
      of
      Control of a type specified in subparagraphs (a) or (c) above (an “Acquisition
      Agreement”) or of a binding agreement for the sale of disposition of assets
      that, if consummated, would result in a Change of Control of a type specified
      in
      subparagraph (d) above (an “Asset Sale Agreement”) or the adoption by the Board
      of Directors if the Parent Company of a plan of complete liquidation or
      dissolution of the Parent Company that, if consummated, would result in a Change
      of Control of a type specified in subparagraph (d) above (a “Plan of
      Liquidation”), provided, however, that a Change of Control of the type specified
      in this subparagraph (e) shall not be deemed to exist or have occurred as a
      result of the execution of such Acquisition Agreement or Asset Sale Agreement,
      or the adoption of such a Plan of Liquidation, from and after the Abandonment
      Date. As used in this subparagraph (e), the term “Abandonment Date” shall mean
      the date on which


    
      
        17

        
        

      

      
        
        

      

       

    


    
      	(i)  	
              an
                Acquisition Agreement, Asset Sale Agreement or Plan of Liquidation
                is
                terminated (pursuant to its terms or otherwise) without having been
                consummated,

            


    

    


    
      	(ii)  	
              the
                parties to an Acquisition Agreement or Asset Sale Agreement abandon
                the
                transactions contemplated thereby,

            


    

    


    
      	(iii)  	
              the
                Parent Company abandons a Plan of Liquidation,
                or

            


    

    


    
      	(iv)  	
              a
                court or regulatory body having competent jurisdiction enjoins or
                issues a
                cease and desist or stop order with respect to or otherwise prevents
                the
                consummation of, or a regulatory body notifies the Parent Company
                that it
                will not approve an Acquisition Agreement, Asset Sale Agreement or
                Plan of
                Liquidation or the transactions contemplated thereby and such injunction,
                order or notice has become final and not subject to appeal;
                or

            


    

    


    (f) the
      Board of Directors of the Parent Company adopts a resolution to the effect
      that,
      for purposes of this Plan, a Change of Control has occurred.

    


    Notwithstanding
      the foregoing, a Change of Control shall not be deemed to have occurred by
      virtue of the consummation of any transaction or series of integrated
      transactions immediately following which the record holders of the common stock
      of the Parent Company immediately prior to such transaction or series of
      transactions continue to have substantially the same proportionate ownership
      in
      an entity (i) which owns all or substantially all of the assets of the Parent
      Company immediately following such transaction or series of transactions, (ii)
      which is intended to reflect or track the value or performance of a particular
      division, business segment or subsidiary of the Parent Company, or (iii) which
      is an affiliated company, subsidiary, or spin-off entity owned by the
      stockholders of the Parent Company in substantially the same proportions as
      their ownership of stock of the Parent Company on the date of such
      spin-off.

    


    As
      used
      in connection with the foregoing definition of Change of Control, “Affiliate”
shall have the meaning set forth in Rule 12b-2 promulgated under Section 12
      of
      the Exchange Act; “Beneficial Owner” shall have the meaning set forth in Rule
      13d-3 under the Exchange Act; “Exchange Act” shall mean the Securities Exchange
      Act of 1934, as amended from time to time; “Parent” shall mean any entity that
      becomes the Beneficial Owner of at least 50% of the voting power of the
      outstanding voting securities of the Parent Company or of an entity that
      survives any merger or consolidation of the Parent Company or any direct or
      indirect subsidiary of the Parent Company; and ‘Person” shall have the meaning
      given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
      13(d) and 14(d) thereof, except that such term shall not include (i) the Parent
      Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding
      securities under an employee benefit plan of the Parent Company or any of its
      Affiliates, (iii) an underwriter temporarily holding securities pursuant to
      an
      offering of such securities, or (iv) a corporation or entity owned, directly
      or
      indirectly, by the


    
      
        18

      

    


    stockholders
      of the Parent Company in substantially the same proportions as their ownership
      of stock of the Parent Company.

    


    7.09 Reemployed
      Participants

    


    If
      the
      Participant is reemployed, his or her scheduled payments under Section 7.02
      or
      Section 7.04 shall cease and his or her election, if any, under Section 7.04
      shall be void. The Participant may make a new election under Section 7.04 prior
      to his or her subsequent Separation from Service that shall apply to any unpaid
      benefits and to any additional benefits payable to or on behalf of the
      Participant because of a subsequent Separation from Service.

    


    If
      no
      new election is made by the Participant, benefits shall be paid in the normal
      form of payment in accordance with Section 7.02 above.


    
      
        19

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    ARTICLE
      EIGHT

    


    AMENDMENT
      AND TERMINATION

    


    8.01 Plan
      Amendment

    


    The
      Human Resources and Compensation Committee may amend the Plan at any time and
      from time to time, without prior notice to any Participant or Beneficiary;
      provided, however, that the Human Resources Committee also may make amendments
      that relate primarily to the administration of the Plan, are applied in a
      uniform and consistent manner to all Participants, and are reported to the
      Human
      Resources and Compensation Committee.

    


    8.02 Plan
      Termination

    


    The
      Board of Directors of the Parent Company may terminate or discontinue the Plan
      at any time. If the Plan is terminated, it shall be on such terms and conditions
      as the Board of Directors of the Parent Company shall deem
      appropriate.

    


    


    8.03 Automatic
      Plan Termination

    


    This
      Plan is expressly conditioned on the continued deferral of income tax on amounts
      deferred by a Participant under the Plan until such amounts are actually
      distributed to the Participant. If, as a result of an adverse determination
      by
      the Internal Revenue Service or a change in the tax laws or applicable income
      tax regulations, amounts deferred by Participants under the Plan become subject
      to income tax prior to the actual distribution of such amounts, the Plan and
      each election to defer hereunder shall automatically terminate as of the
      effective date of such change in the law without any formal action by the Board
      of Directors to terminate the Plan.


    
      
        20

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    ARTICLE
      NINE

    


    MISCELLANEOUS

    


    9.01 Plan
      Administration

    


    The
      Plan shall be administered under the direction of the Human Resources and
      Compensation Committee. Except as otherwise provided below, the Benefits
      Administration Committee shall be considered the plan administrator for purposes
      of ERISA.

    


    The
      Human Resources and Compensation Committee may delegate all or some of the
      responsibility for the administration of the Plan to the Human Resources
      Committee or the Benefits Administration Committee in which case such Committee
      shall assume such delegated power and authority in administering the Plan to
      that extent; provided, however, that in no event shall the Human Resources
      Committee or the Benefits Administration Committee have any power or authority
      with respect to matters involving a Participant who is a member of the Executive
      Board of the Company or a Participant who is subject to Section 16(b) of the
      Exchange Act.

    


    The
      plan administrator has the authority and discretion to construe and interpret
      the Plan. As part of this authority, the plan administrator has the discretion
      to resolve inconsistencies or ambiguities in the language of the Plan, to supply
      omissions from or correct deficiencies in the language of the Plan, and to
      adopt
      rules for the administration of the Plan which are not inconsistent with the
      terms of the Plan. The plan administrator also has the authority and discretion
      to resolve all questions of fact relating to any claim for benefits as to any
      matter for which the plan administrator has responsibility. All determinations
      of the plan administrator are final and binding on all parties.

    


    Each
      person considered to be a fiduciary with respect to the Plan shall have only
      those powers and responsibilities as are specifically given that person under
      this Plan. It is intended that each such person shall be responsible for the
      proper exercise of his or her own powers and responsibilities, and shall not
      be
      responsible for any act or failure to act of any other person considered to
      be a
      fiduciary or any act or failure to act of any person considered to be a
      non-fiduciary.

    


    9.02 Plan
      Expenses

    


    All
      Plan administration expenses incurred by the Company or the plan administrator
      shall be paid by the Company.

    


    9.03 Effect
      on Other Benefits

    


    Participation
      in the Plan shall not reduce any welfare benefits or retirement benefits offered
      by the Company, except that the amounts deferred under the Plan
      and


    
      
        21

      

    

     

    any
      Plan benefits shall not be considered "Compensation" for purposes of the Savings
      Plan.

    


    9.04 No
      Guarantee of Employment

    


    Neither
      participation in the Plan nor any action taken under the Plan shall confer
      upon
      a Participant any right to continue in the employ of an Employer or affect
      the
      right of such Employer to terminate the Participant's employment at any time.
      

    


    9.05 Disclaimer
      of Liability

    


    The
      Employer shall be solely responsible for the payment of Plan benefits hereunder.
      The members of the Human Resources and Compensation Committee and the Human
      Resources Committee, and the officers, directors, employees, or agents of the
      Company or any other Employer, shall not be liable for such benefits. Unless
      otherwise required by law, no such person shall be liable for any action or
      failure to act, except where such act or omission constitutes gross negligence
      or willful or intentional misconduct.

    


    9.06 Severability

    


    If
      any
      provision of the Plan shall be held invalid or unenforceable, such invalidity
      or
      unenforceability shall apply only to that provision, and shall not affect or
      render invalid or unenforceable any other provision of the Plan. In such event,
      the Plan shall be administered and construed as if such invalid or unenforceable
      provision were not contained herein. If the application of any Plan provision
      to
      any Participant or Beneficiary shall be held invalid or unenforceable, the
      application of such provision to any other Participant or Beneficiary shall
      not
      in any manner be affected thereby.

    


    9.07 Successors

    


    The
      Plan and any election to defer shall be binding on (i) the Company and its
      successors and assigns, (ii) any Employer and its successors and assigns, (iii)
      each Participant, (iv) each Beneficiary, and (v) the heirs, distributees, and
      legal representatives of each Participant and Beneficiary.

    


    9.08 Governing
      Law

    


    Except
      to the extent that the Plan may be subject to the provisions of ERISA, the
      Plan
      shall be construed and enforced according to the laws of the State of Texas
      without giving effect to the conflict of laws principles thereof. In the event
      limitations imposed by ERISA on legal actions do not apply, the laws of the
      State of Texas shall apply, and a cause of action under the Plan must be brought
      no later than four years after the date the action accrues.

     

    
      
        22 

        
        

      

      
        
        

      

       

    


    9.09 Construction

    


    As
      used
      herein, the masculine shall include the feminine, the singular shall include
      the
      plural, and vice versa, unless the context clearly indicates otherwise. Titles
      and headings herein are for convenience only and shall not be considered in
      construing the Plan. The words "hereof," "hereunder", and other similar
      compounds of the word "here" shall mean and refer to the entire Plan and not
      to
      any particular provision or Section.

    


    9.10 Taxes

    


    Any
      taxes imposed on Plan benefits shall be the sole responsibility of the
      Participant or Beneficiary. The Company shall deduct from Plan benefits any
      federal taxes, state taxes, local taxes, or other taxes required to be withheld.
      The Company shall, unless the plan administrator elects otherwise, withhold
      such
      taxes at the applicable flat rate percentage. The Company shall also deduct
      from
      any payment of Compensation, including any cash incentive payments, on the
      date
      such payment would have been made if not deferred under this Plan Social
      Security and Medicare taxes or other taxes required to be withheld on such
      date.

    


    9.11 Non-Assignabilty

    


    Unless
      otherwise required by law, and prior to distribution to a Participant or
      Beneficiary, Plan benefits shall not be subject to assignment, transfer, sale,
      pledge, encumbrance, alienation, or charge by such Participant or Beneficiary,
      and any attempt to do so shall be void. Plan benefits shall not be liable for
      or
      subject to garnishment, attachment, execution, or levy, or liable for or subject
      to the debts, contracts, or liabilities of the Participant or Beneficiary;
      provided, however, that the Company may offset from the payment of any Plan
      benefits to a Participant or Beneficiary amounts owed by the Participant to
      an
      Employer.

    


    9.12 Claims
      Procedure

    


    If
      a
      Participant or Beneficiary ("claimant") does not receive the benefits which
      the
      claimant believes he or she is entitled to receive under the Plan, the claimant
      may file a claim for benefits with the Chief Human Resources and Administration
      Officer (or his or her delegate). All claims must be made in writing and must
      be
      signed by the claimant. If the claimant does not furnish sufficient information
      to determine the validity of the claim, the Chief Human Resources and
      Administration Officer (or his or her delegate) will indicate to the claimant
      any additional information which is required.

    


    Each
      claim will be approved or disapproved by the Chief Human Resources and
      Administration Officer (or his or her delegate) within 90 days following receipt
      of the information necessary to process the claim. In the event the Chief Human
      Resources and Administration Officer (or his or her delegate) denies a claim
      for
      benefits in whole or in part, the Chief Human Resources and Administration
      Officer (or his or her


    
      
        23

      

    

     

    
 

    delegate)
      will notify the claimant in writing of the denial of the claim. Such notice
      by
      the Chief Human Resources and Administration Officer (or his or her 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, 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. If no action is taken by the Chief Human Resources
      and Administration Officer (or his or her delegate) on or a claim within 90
      days, the claim will be deemed to be denied for purposes of the review procedure
      below.

    


    A
      claimant may appeal a denial of his or her claim by requesting a review of
      the
      decision by the plan administrator. An appeal must be submitted in writing
      within six months after the denial and must (i) request a review of the claim
      for benefits under the Plan, (ii) set forth all the grounds upon which the
      claimant's request for review is based and any facts in support thereof, and
      (iii) set forth any issues or comments which the claimant deems pertinent to
      the
      appeal.

    


    The
      plan administrator will make a full and fair review of each appeal and any
      written materials submitted in connection with the appeal. The plan
      administrator 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. The claimant will be given the
      opportunity to review pertinent documents or materials upon submission of a
      written request to the plan administrator, provided the plan administrator
      finds
      the requested documents or materials pertinent to the appeal. On the basis
      of
      its review, the plan administrator will make an independent determination of
      the
      claimant's eligibility for benefits under the Plan.

    


    The
      decision of the plan administrator on any claim for benefits will be final
      and
      conclusive upon all parties thereto. In the event the plan administrator denies
      an appeal in whole or in part, the plan administrator will give written notice
      of the decision to the claimant, which notice will set forth, in a manner
      calculated to be understood by the claimant, the specific reasons for such
      denial and specific reference to the pertinent Plan provisions on which the
      decision was based. 


    
      
        24

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    


    ARTICLE
      TEN

    


    SECTION
      409A TRANSITION RELIEF

    


    10.01   Priority
      over Other Provisions 

    


    The
      provisions set forth in this Article will supersede any conflicting provisions
      of the Plan.

    


    10.02 Cancellation
      of Deferrals and Termination of Participation 

    


    Any
      amount subject to Code section 409A paid to a Participant during 2005 that
      would
      otherwise violate the requirements of Code section 409A(a)(2), (3), or (4)
      will
      be treated as a distribution in termination of the Participant’s participation
      in the Plan or a cancellation of the Participant's deferral election. The
      amounts subject to termination or cancellation will be includible in the
      Participant’s income in the calendar year 2005. This paragraph applies to (i)
      payments in 2005 to a specified employee, as that term is defined in Code
      section 409A(a)(2)(B)(i), within six months after the date of the Participant’s
      separation from service, as that term is defined by the Secretary; (ii) payments
      in 2005 pursuant to the election of an alternate form of payment under Section
      7.04; and (iii) any other payments in 2005 otherwise in violation of Code
      section 409A(a)(2), (3), or (4).

    


    10.03 Change
      in Payment Elections or Conditions on or Before December 31,
      2006 

    


    With
      respect to amounts subject to Code section 409A, a Participant may make a new
      payment election on or before December 31, 2006, as permitted by the preamble
      to
      the Proposed Regulations; and the election will not be treated as a change
      in
      the timing and form of payment under Code section 409A(a)(4) or an acceleration
      of a payment under Code section 409A(a)(3); provided, however, that a
      Participant cannot in 2006 change payment elections with respect to payments
      that the Participant would otherwise receive in 2006, or to cause payments
      to be
      made in 2006. Any election made by a Participant on or before December 31,
      2006
      (including an election made before January 1, 2005) that applies to an amount
      accrued under the Plan subject to Code section 409A will be treated as a new
      election under this paragraph unless an election in 2006 would apply to amounts
      that otherwise would be payable in 2006.


    
      
        25

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    


    
      	
               

            	
              Example
                One:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              250,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              5.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              10.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              5.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              5.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((b)-(c))*(d)

            	
              8,500

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              2,500

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              3,000

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              12,540

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              26,540

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              15,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              7,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              12,540

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              6,270

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              1,230

            


    

    



    
      
        26

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Two:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              150,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              20,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              3.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              1.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((a)-(c))*(d)

            	
              3,900

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              200

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              8,754

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              12,854

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              9,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              4,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              8,754

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              4,377

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              123

            


    


    
      
        27

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Three:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              2,000,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              300,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              3.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              5.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              0.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              10.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((b)-(c))*(e)

            	
              6,600

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(g)

            	
              30,000

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b)-(c))*(e)

            	
              74,000

            	
               

            
	
              (l)

            	
              Lesser
                of Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i))*.06, if (a)>(b) then
                (b)-(i)*.06

            	
              12,804

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              123,404

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              120,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              60,000

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              12,804

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              6,402

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              53,598

            
	 	 	 	 
	
              Note:
                If a participant hits the compensation limit before his incentive
                compensation is paid (as in the above example), the formula is changed
                to
                use the appropriate percentage election and so that the deferrals
                on the
                Incentive Compensation do not reduce the compensation used in the
                Savings
                Plan.

            


    


    
      
        28

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Four:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              450,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              6.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              6.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              6.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((b)-(c))*(d)

            	
              10,200

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              3,000

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              13,800

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              12,408

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              39,408

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              27,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              13,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              12,408

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              6,204

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              7,296

            


    

    



    
      
        29

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Five:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              150,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              1.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              1.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((a)-(c))*(d)

            	
              1,000

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              500

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              8,910

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              10,410

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              9,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              4,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              8,910

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              4,455

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              45

            


    


    
      
        30

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Six:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              150,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              4.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              0.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((a)-(c))*(d)

            	
              4,000

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              0

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              8,760

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              12,760

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              9,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              4,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              8,760

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              4,380

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              120

            


    

    



    
      
        31

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Seven:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              150,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              2.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              6.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((a)-(c))*(d)

            	
              2,000

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              3,000

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              8,700

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              13,700

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              9,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              4,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              8,700

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              4,350

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              150

            


    

    



    
      
        32

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Eight:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              200,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              1.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              1.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((a)-(c))*(d)

            	
              1,500

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              500

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              11,880

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              13,880

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              12,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              6,000

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              11,880

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              5,940

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              60

            


    


    
      
        33

        
        

      

      
        
        

        
        

      

      
        
        

      

    


    Exhibit
      A

    Examples
      of Mirror Company Matching Contribution

    
      	
               

            	
              Example
                Nine:

            	
               

            	
               

            
	
              (a)

            	
              Gross
                Compensation

            	
              450,000

            	
               

            
	
              (b)

            	
              401(a)(17)
                Compensation

            	
              220,000

            	
               

            
	
              (c)

            	
              Incentive
                Compensation

            	
              50,000

            	
               

            
	
              (d)

            	
              Mirror
                Plan Election for Compensation below 401(a)(17)

            	
              14.00%

            	
               

            
	
              (e)

            	
              Mirror
                Plan Election for Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (f)

            	
              Mirror
                Plan Election for Incentive Compensation below 401(a)(17)

            	
              10.00%

            	
               

            
	
              (g)

            	
              Mirror
                Plan Election for Incentive Compensation above 401(a)(17)

            	
              0.00%

            	
               

            
	
              (h)

            	
              Match
                Percentage

            	
              0.50

            	
               

            
	
               

            	 	 	
               

            
	
              Post
                2005 FORMULA

            
	
               

            	
               

            	
               

            	
               

            
	
              (i)

            	
              Mirror
                Plan calculated deferrals for compensation below 401(a)(17):
                ((b)-(c))*(d)

            	
              23,800

            	
               

            
	
              (j)

            	
              Mirror
                Plan calculated deferrals for Incentive Compensation:
                (c)*(f)

            	
              5,000

            	
               

            
	
              (k)

            	
              Mirror
                Plan calculated deferrals for compensation above 401(a)(17):
                ((a)-(b))*(e)

            	
              0

            	
               

            
	
              (l)

            	
              Lesser
                or Gross Compensation or 401(a)(17) Compensation minus Mirror Plan
                calculated deferrals for compensation below 401(a)(17) times 6%:
                If
                (a)<(b) then ((a)-(i)-(j))*.06, if (a)>(b) then
                (b)-(i)-(j)*.06

            	
              11,472

            	
               

            
	
              (m)

            	
              equals
                total calculated deferral amount: (i)+(j)+(k)+(l)

            	
              40,272

            	
               

            
	
              (n)

            	
              Lesser
                of calculated percentage or 6% of gross comp: If (w)/(a)<6% then
                (a)*(m)/(a), if (m)/(a)>6% then (a)*6%

            	
              27,000

            	
               

            
	
              (o)

            	
              Times
                match rate: (n)*(h)

            	
               

            	
              13,500

            
	
              (p)

            	
              LESS

            	
               

            	
               

            
	
              (q)

            	
              401(a)(17)
                Compensation minus Mirror Plan calculated deferrals for compensation
                below
                401(a)(17) times 6%: (l)

            	
              11,472

            	
               

            
	
              (r)

            	
              Times
                match rate: (q)*(h)

            	
               

            	
              5,736

            
	
              Total
                Mirror Plan contributions new formula: (o)-(r)

            	
              7,764

            


    


    
      
        34 

        
        

      

      
        
        

        
        

      

      
        
        

      

    


     Appendix
      A

    

      DOCUMENT
        HISTORY

      


      This
        document contains the plans adopted on July 8, 1998 by the J. C. Penney Company,
        Inc. Board of Directors effective January 1, 1999 as amended on the dates
        and
        under the authorities noted below:

       

       

      
        	
              	
                December
                  11, 1998

              	
                Human
                  Resources Committee

                 

              


        	
              	
                January
                  1, 1999

              	
                Effective
                  Date

                 

              


        	
              	
                July
                  14, 1999

              	
                Board
                  of Directors

                 

              


        	
              	
                December
                  10, 1999

              	
                Human
                  Resources Committee

                 

              


        	
              	
                December
                  11, 2000

              	
                Human
                  Resources Committee

                 

              


      

      
        	 	
                March
                  22, 2001

              	
                Human
                  Resources and Compensation
                  Committee

              


      

      


      
        	 	
                June
                  1, 2001

              	
                Director
                  of Human Resources

              


      

      


      
        	 	
                October
                  10, 2001

              	
                Human
                  Resources Committee

              


      

      


      
        	 	
                January,
                  27, 2002

              	
                Chief
                  HR and Admin. Officer

              


      

      


      
        	 	
                June
                  1, 2002

              	
                Director
                  of Human Resources

              


      

      


      
        	 	
                November
                  14, 2006

              	
                Human
                  Resources and Compensation
                  Committee

              


      

      


      
        	 	
                February
                  28, 2007

              	
                Human
                  Resources and Compensation
                  Committee

              


      

    

     

     

    35

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    


      


      SECTION
        409A RESOLUTIONS

      OF

      THE
        HUMAN RESOURCES AND COMPENSATION COMMITTEE 

      OF
        THE 

      BOARD
        OF DIRECTORS OF 

      J.
        C. PENNEY COMPANY, INC. 

      


      WHEREAS,
        the American Jobs Creation Act of 2004 (the “Act”) amended the Internal Revenue
        Code of 1986 to add section 409A governing the inclusion in gross income
        of
        deferred compensation under nonqualified deferred compensation plans, effective
        with respect to amounts deferred in taxable years beginning after December
        31,
        2004, and in taxable years beginning before January 1, 2005, if the plan
        under
        which the deferral is made is materially modified after October 3,
        2004;

      


      WHEREAS,
        section 409A is a significant departure from existing laws governing the
        timing
        of inclusion in gross income of amounts deferred under nonqualified deferred
        compensation plans and sets out broad requirements that nonqualified deferred
        compensation plans must meet in order to avoid the current inclusion in gross
        income of amounts deferred under such plans;

      


      WHEREAS,
        the Act provides that the Secretary of the Treasury (the “Secretary”) will have
        the authority to prescribe such regulations as are necessary to carry out
        the
        purposes of section 409A and to provide exceptions to certain requirements
        of
        section 409A during the transition period for plans to come into compliance
        with
        section 409A;

      


      WHEREAS,
        the Secretary to date has issued guidance related to certain requirements
        of
        section 409A and will be issuing further guidance in the form of final
        regulations;

      


      WHEREAS,
        section 409A and the guidance define a nonqualified deferred compensation
        plan
        as a plan that provides for the deferral of compensation and provide that,
        with
        certain exceptions, a deferral of compensation occurs if the service provider
        has a legally binding right during a taxable year to compensation that has
        not
        been actually or constructively received and included in gross income and
        that,
        pursuant to the terms of the plan, is payable to the service provider in
        a later
        year;

      


      WHEREAS,
        section 409A applies to a number of the Company’s arrangements, including the
        Supplemental Retirement Program for Management Profit - Sharing Associates
        of J.
        C. Penney Corporation, Inc.; the J. C. Penney Corporation, Inc. Benefit
        Restoration Plan; and the J. C. Penney Corporation, Inc. Mirror Savings Plans
        I,
        II, and III (collectively, the “Plans”);

      


      WHEREAS,
        compensation under the Plans that is subject to section 409A may not be
        distributed earlier than (1) separation from service, (2) disability, (3)
        death,
        (4) a specified time or pursuant to a fixed schedule, (5) a change in control
        event, or (6) the occurrence of an unforeseeable emergency;

       

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      WHEREAS,
        section 409A provides that distributions to officers having annual compensation
        greater than $130,000 (adjusted for inflation and limited to 50 employees)
        may
        not be made before the date which is six months after the date of separation
        from service (or, if earlier, the date of death of the employee);

      


      WHEREAS,
        section 409A provides that the Plans may not permit the acceleration of the
        time
        or schedule of any payment under the Plans, except as provided in regulations
        by
        the Secretary;

      


      WHEREAS,
        section 409A and the guidance require that compensation for services performed
        during a taxable year may be deferred at the participant’s election only if the
        election to defer is made no later than the close of the preceding taxable
        year,
        or at such other time as provided in Treasury regulations, or that the Plan
        may
        specify the time and form of payment no later than the time the service provider
        first has a legally binding right to the compensation;

      


      WHEREAS,
        the requirements of section 409A related to subsequent changes in the time
        and
        form of payment provide that the Plans may allow a subsequent election to
        delay
        the timing or form of distributions only if (1) the plan requires that such
        election cannot be effective for at least 12 months after the date on which
        the
        election is made; (2) except in the case of elections relating to distributions
        on account of death, disability, or unforeseeable emergency, the plan requires
        that the payment with respect to which such election is made be deferred
        for a
        period of not less than 5 years from the date such payment would otherwise
        have
        been paid; and (3) the plan requires that an election related to a distribution
        to be made upon a specified time may not be made less than 12 months prior
        to
        the date of the first scheduled payment;

      


      WHEREAS,
        the guidance issued by the Secretary provides that the Plans must be operated
        through December 31, 2006, in good faith compliance with the provisions of
        section 409A and the guidance and that the Plans must be amended to comply
        with
        the provisions and the regulations thereunder by December 31, 2006;
        and

      


      WHEREAS,
        the Secretary has provided for certain relief measures the Plans can adopt
        during the transition period for coming into compliance with section 409A;
        and
        the Committee has determined that the Plans need to be amended to provide
        for
        the transition relief set forth in Questions and Answers 19(c) and 20 of
        Internal Revenue Service Notice 2005-1, as clarified and extended in the
        preamble to the proposed regulations issued on October 4, 2005 (the "Proposed
        Regulations").

      


      NOW,
        THEREFORE, BE IT RESOLVED that the Supplemental Retirement Program for
        Management Profit-Sharing Associates of J. C. Penney Corporation, Inc. be,
        and
        it hereby is, amended to add a new Article X at the end thereof to read as
        follows, effective as of January 1, 2005;

      


      Article
        X. Section 409A Transition Relief

      


      (1)  Priority
        over Other Provisions:
        The provisions set forth in this Article will supersede any conflicting
        provisions of the Plan.

       

      
        
          2

        

        
          
          

          
          

        

        
          
          

        

      

      (2)  Termination
        of Participation:
        Any amount subject to Code section 409A paid to an Eligible Management Associate
        during 2005 that would otherwise violate the requirements of Code section
        409A(a)(2), (3), or (4) will be treated as a distribution in termination
        of the
        Eligible Management Associate's participation in the Plan within the meaning
        of
        IRS Notice 2005-1, Q&A-20. The amounts subject to termination will be
        includible in the Eligible Management Associate's income in calendar year
        2005.
        This paragraph applies to (i) payments in 2005 to a specified employee, as
        that
        term is defined in Code section 409A(a)(2)(B)(i), within six months after
        the
        date of the Eligible Management Associate's separation from service, as that
        term is defined by the Secretary; (ii) payments in 2005 pursuant to an election
        under Paragraph (1) of Article V to delay the commencement of annual benefits;
        (iii) payments in 2005 pursuant to the election of the installment option
        under
        paragraph (4) of Article V; and (iv) any other payments in 2005 otherwise
        in
        violation of Code section 409A(a)(2), (3) or (4). 

      


      (3)  Change
        in Payment Elections or Conditions on or Before December 31,
        2006:
        With respect to amounts subject to Code section 409A, an Eligible Management
        Associate may make a new payment election on or before December 31, 2006,
        as
        permitted by the preamble to the Proposed Regulations; and the election will
        not
        be treated as a change in the timing and form of payment under Code section
        409A(a)(4) or an acceleration of a payment under Code section 409A(a)(3);
        provided, however, that an Eligible Management Associate cannot in 2006 change
        a
        payment election with respect to payments that the Eligible Management Associate
        would otherwise receive in 2006, or cause payments to be made in 2006. Any
        election made by an Eligible Management Associate on or before December 31,
        2006
        (including an election made before January 1, 2005) that applies to an amount
        accrued under the Plan subject to Code section 409A will be treated as a
        new
        election under this paragraph unless an election in 2006 would apply to amounts
        that otherwise would be payable in 2006. 

      


      RESOLVED
        that the J. C. Penney Corporation, Inc. Benefit Restoration Plan be, and
        it
        hereby is, amended to add a new Article X at the end there of to
read
        as follows, effective as of January 1, 2005:

      


      Article
        X. Section 409A Transition Relief

      


      (1)  Priority
        over Other Provisions:
        The provisions set forth in this Article will supersede any conflicting
        provisions of the Plan.

       

      (2)  Termination
        of Participation:
        Any amount subject to Code section 409A paid to a Participant during 2005
        that
        would otherwise violate the requirements of Code section 409A(a)(2), (3),
        or (4)
        will be treated as a distribution in termination of the Participant’s
        participation in the Plan within the meaning of IRS Notice 2005-1, Q&A-20.
        The amounts subject to termination will be includible in the Participant’s
        income in calendar year 2005. This paragraph applies to (i) payments in


       

      
        
          3

        

        
          
          

          
          

        

        
          
          

        

      

       

      2005
        to a specified employee, as that term is defined in Code section
        409A(a)(2)(B)(i), within six months after the date of the Participant’s
        separation from service, as that term is defined by the Secretary; (ii) payments
        in 2005 pursuant to the election of the installment option under paragraph
        (3)
        of Article V; and (iii) any other payments in 2005 otherwise in violation
        of
        Code section 409A(a)(2), (3), or (4). 

      


      (3)  Change
        in Payment Elections or Conditions on or Before December 31,
        2006:
        With respect to amounts subject to Code section 409A, a Participant may make
        a
        new payment election on or before December 31, 2006, as permitted by the
        preamble to the Proposed Regulations; and the election will not be treated
        as a
        change in the timing and form of payment under Code section 409A(a)(4) or
        an
        acceleration of a payment under Code section 409A(a)(3); provided, however,
        that
        a participant cannot in 2006 change payment elections with respect to payments
        that the Participant would otherwise receive in 2006, or cause payments to
        be
        made in 2006. Any election made by a Participant on or before December 31,
        2006
        (including an election made before January 1, 2005) that applies to an amount
        accrued under the Plan subject to Code section 409A will be treated as a
        new
        election under this paragraph unless an election in 2006 would apply to amounts
        that otherwise would be payable in 2006.

      


          RESOLVED
        that, the J. C. Penney Corporation, Inc. Mirror Savings Plans I, II, and
        III be,
        and they hereby are, amended to add a new Article Ten to
        read
        as follows, effective as of January 1, 2005:

      


      ARTICLE
        TEN

      


      SECTION
        409A TRANSITION RELIEF

      


      	10.01  	
               Priority
                over Other Provisions 

            


      


      The
        provisions set forth in this Article will supersede any conflicting provisions
        of the Plan.

      


      10.02 Cancellation
        of Deferrals and Termination of Participation 

      


      Any
        amount subject to Code section 409A paid to a Participant during 2005 that
        would
        otherwise violate the requirements of Code section 409A(a)(2), (3), or (4)
        will
        be treated as a distribution in termination of the Participant’s participation
        in the Plan or a cancellation of the Participant's deferral election. The
        amounts subject to termination or cancellation will be includible in the
        Participant’s income in the calendar year 2005. This paragraph applies to (i)
        payments in 2005 to a specified employee, as that term is defined in Code
        section 409A(a)(2)(B)(i), within six months after the date of the Participant’s
        separation from service, as that term is defined by the Secretary; (ii) payments
        in 2005 pursuant to the election of an alternate form of payment under Section
        7.04; and 

       

      
        
          4

        

        
          
          

          
          

        

        
          
          

        

      

       

      (iii)
        any other payments in 2005 otherwise in violation of Code section 409A(a)(2),
        (3), or (4).

      


      
        	 	
                10.03

              	
                Change
                  in Payment Elections or Conditions on or Before December 31,
                  2006 

              


      

      


      With
        respect to amounts subject to Code section 409A, a Participant may make a
        new
        payment election on or before December 31, 2006, as permitted by the preamble
        to
        the Proposed Regulations; and the election will not be treated as a change
        in
        the timing and form of payment under Code section 409A(a)(4) or an acceleration
        of a payment under Code section 409A(a)(3); provided, however, that a
        participant cannot in 2006 change payment elections with respect to payments
        that the Participant would otherwise receive in 2006, or to cause payments
        to be
        made in 2006. Any election made by a Participant on or before December 31,
        2006
        (including an election made before January 1, 2005) that applies to an amount
        accrued under the Plan subject to Code section 409A will be treated as a
        new
        election under this paragraph unless an election in 2006 would apply to amounts
        that otherwise would be payable in 2006.

      


      and;

      


      RESOLVED
        that the officers of the Company and its counsel be, and each of them hereby
        is,
        authorized to take all such further action, and to execute and deliver all
        such
        further instruments and documents, in the name and on behalf of the Company,
        and
        under its corporate seal or otherwise, and to pay all such expenses as shall
        in
        their judgment be necessary, proper, or advisable in order fully to carry
        out
        the intent and effectuate the purposes of the foregoing resolutions and each
        of
        them.

       

       

       

       

       

       

      5