exhibit10pbrsu.htm


    Exhibit
10.1

    JCPenney      Notice of 2009 Annual CEO
Performance Unit Grant

    J. C. Penney Company,
Inc.            

    
      	
               

            	
              Name

            	
                Employee
      ID

            
	
               2005
      Equity

              Compensation
      Plan

            	
              Date of
      Grant

            	
              Number of
      Performance 

              Units
      Granted

            	
              Performance
      Cycle

              Begins:  03/16/2009

              Ends:  03/15/2012

            


    

    
      

    

    
      
        You
have been granted the number of Performance Units listed above in recognition of
your expected future contributions to the success of
JCPenney.   This Performance Unit grant is subject to all the
terms, rules, and conditions of the J. C. Penney Company, Inc. 2005 Equity
Compensation Plan (“Plan”) and the implementing resolutions (“Resolutions”)
approved by the Human Resources and Compensation Committee (“Committee”) of the
Board.  Capitalized terms not otherwise defined herein shall have the
respective meanings assigned to them in the Plan and the
Resolutions.  In the event of a change in capitalization of the
Company or other similar event, the number of units shall be
adjusted as provided in the Plan.

      

      


      Definitions

      Disability – Disability means
totally and permanently disabled within the meaning of the Social Security Act,
provided you either (a) qualified for disability insurance benefits under such
Act, or (b) in the opinion of the organization that administers the Company’s
disability plans, you have a disability which entitles you to such disability
insurance benefits except for the fact that you do not have sufficient quarters
of coverage or have not satisfied any age requirements under such
law.

      


      Performance Units – The
Performance Units granted under this award are restricted stock units with
performance-based vesting features.  Each Performance Unit shall at
all times be deemed to have a value equal to the then-current fair market value
of one share of J. C. Penney Company, Inc. Common Stock of 50¢ par value
(“Common Stock”).

      


      Performance Cycle – The
Performance Cycle is a three-year period beginning on March 16, 2009 and ending
on March 15, 2012.

      


      Performance Measure –The
Performance Measure is the Company’s annualized Total Stockholder Return over
the Performance Cycle. 

      


      Retirement—Retirement means
your separation from service either (1) at or after age 60 or (2) at or after
age 55 with at least 15 years of service with JCPenney or any of its
subsidiaries.

      


      Total Stockholder Return
(“TSR”) – The Company’s cumulative annual stockholder returns, assuming
reinvestment of all dividends on the date paid (assumed to be the ex-dividend
date).  The Company’s cumulative annual stockholder returns will be
calculated based on the closing price of Common Stock on the last trading day
immediately preceding the date of grant and the 60-day trailing average stock
price of Common Stock prior to the last day of the Performance
Cycle.

      


      Vesting of Your Performance
Units

      The
Company’s annualized TSR for the Performance Cycle shall determine whether the
Performance Units granted pursuant to this award will vest.  The
minimum performance level to achieve 100% payout is 11.3% annualized
TSR.  If the annualized TSR is less than 11.3%, no portion of the
Performance Unit award will vest and the Performance Units granted hereunder
will be cancelled.  The maximum payout amount is 100% of Performance
Units granted if annualized TSR is 11.3% or greater.  Within 21⁄2 months following
March 16, 2012 (the “Vesting Date”), the independent members of the Board shall
approve the vesting of Performance Units, if any, based on achievement of the
Performance Measure.  The vested Performance Units shall be
paid in shares of Common Stock as soon as practicable, but in no event later
than 21⁄2 months, after the Vesting Date.

      


      You
shall not be allowed to defer the payment of your shares of Common Stock to a
later date.

      


      Dividend
Equivalents

      You
shall not have any rights as a stockholder until your Performance Units vest and
you are issued shares of Common Stock in cancellation of the vested Performance
Units.

       

      Employment
Termination

      If your
employment terminates during the Performance Cycle because of Retirement,
Disability or death, then you shall be entitled to a prorated number of the
vested Performance Units determined as of the end of the Performance Cycle, and
payable as specified above. The proration shall be based on the ratio of (a) the
number of calendar days from the date of grant to the effective date of
termination to (b) the total number of calendar days in the vesting
period.

       

    

    
      
        1

      

      
         

        The
beneficiary listed on your J. C. Penney Company, Inc. Equity Plan Beneficiary
Designation Form shall receive the vested shares covered by the Performance Unit
award in the case of termination of employment due to death.

        


        If your
employment terminates for any reason other than Retirement, Disability or death,
you shall forfeit any unvested Performance Units at the time of such employment
termination.

        


        Change of
Control

        If a
Change of Control (as defined in Attachment A to this Notice of Grant) occurs
during the Performance Cycle, your Performance Units shall vest and be payable
in shares of Common Stock based on the 60-day trailing average stock price of
Common Stock prior to the closing date of the Change of Control
transaction.  Such payment shall be made as soon as practicable after
the closing date of the Change of Control transaction, but no later than the
deadline for distribution specified in Section 7 of the Plan.

        


        Taxes and
Withholding

        At the
time your Performance Units vest and you are issued shares of Common Stock, the
fair market value of the shares of Common Stock issued to you shall be included
in your W-2 form and the Company shall be required to withhold applicable taxes
on such amount.  Your withholding rate with respect to this award may
not be higher than the minimum statutory rate.  To the extent
permitted by the Committee and applicable laws, regulations, or accounting rules
at the time of vesting, the Company shall retain and cancel the number of issued
shares equal to the value of the required minimum tax withholding in payment of
the required minimum tax withholding due.  For purposes of this grant
notice, “fair market value” means the closing price of the Common Stock on the
New York Stock Exchange on the Vesting Date, or if the Exchange is closed on the
Vesting Date, or if the Common Stock does not trade on such Vesting Date, the
closing price of the Common Stock on the New York Stock Exchange on the last
trading day immediately preceding such date.

        


        Transferability of Your
Performance Units

        The
Performance Units awarded hereunder are non-transferable.

        


        Effect on Other
Benefits

        The
value of the shares covered by the Performance Unit award shall not be included
as compensation or earnings for purposes of any other compensation, retirement,
or benefit plan offered to Company associates.

        


        Administration

        The
Committee has full authority and discretion, subject only to the terms of the
Plan, to decide all matters relating to the administration and interpretation of
the Plan and this Performance Unit award.  The Committee’s
determinations shall be final, conclusive, and binding on you and your heirs,
legatees and designees.

        


        
          This Performance Unit grant
does not constitute an employment contract.  It does not guarantee
employment for the length of the vesting period or for any portion
thereof.

        

      

    

    
       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          2

        

         

        
          Attachment
A

          


          A
Change of Control Event shall have occurred if there is a change of ownership, a
change of effective control, or a change in ownership of a substantial portion
of the assets of the Company (as “Company” is defined in the J. C. Penney
Company, Inc. 2005 Equity Compensation Plan).

          


          
            	
                    1.  

                  	
                    Change
      of ownership occurs on the date that a person or persons acting as a group
      acquires ownership of stock of the Company that together with stock held
      by such person or group constitutes more than 50 percent of the total fair
      market value or total voting power of the stock of the
      Company.

                  


          

          


          
            	
                    2.  

                  	
                    Notwithstanding
      whether the Company has undergone a change of ownership, a change of
      effective control occurs (a) when a person or persons acting as a group
      acquires within a 12-month period 30 percent of the total voting power of
      the stock of the Company or (b) a majority of the Board of Directors is
      replaced within 12 months if not previously approved by a majority of the
      members.  A change in effective control also may occur in any
      transaction in which either of the two corporations involved in the
      transaction has a Change in Control Event, i.e. multiple change in control
      events.

                  


          

          


          
            	
                    3.  

                  	
                    Change
      in ownership of a substantial portion of the Company’s assets occurs when
      a person or persons acting as a group acquires assets that have a total
      gross fair market value equal to or more than 40 percent of the total
      gross fair market value of all assets of the Company immediately prior to
      the acquisition.  A transfer of assets by the Company is not
      treated as a change in the ownership of such assets if the assets are
      transferred to -

                    (i)
      A shareholder of the Company (immediately before the asset transfer) in
      exchange for or with respect to its stock;

                    (ii)
      An entity, 50 percent or more of the total value or voting power of which
      is owned, directly or indirectly, by the Company;

                    (iii)
      A person, or more than one person acting as a group, that owns, directly
      or indirectly, 50 percent or more of the total value or voting power of
      all the outstanding stock of the Company; or

                    (iv)
      An entity, at least 50 percent of the total value or voting power of which
      is owned, directly or indirectly, by a person described in paragraph
      (iii).

                  


          

          
             



          Persons
will not be considered to be acting as a group solely because they purchase
assets of the Company at the same time, or as a result of the same public
offering.  However persons will be considered to be acting as a group
if they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of assets, or similar business transaction with the
Company.

          


          


        

      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    


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