Document:

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

    Exhibit
      10.1

    

     

     

    

    

    

    

    

    J.
      C. PENNEY
      CORPORATION, INC.

    MANAGEMENT

    INCENTIVE
      COMPENSATION PROGRAM

    

    

    EFFECTIVE
      FEBRUARY
      28, 2007

    

    

    

    

    

    

    

    

    

    

    

    

    

    
       

      
        
        

        
        

      

       

    

    J.
      C.
      PENNEY CORPORATION, INC.

    Management

    Incentive
      Compensation Program

    

    

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

    

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

     

    
      
        
        

      

      
        
        

      

      
        
        

      

    

    

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

    

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

    

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

     

    
      
        2

      

      
        
        

      

      
        
        

      

    

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

    

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

    

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

    

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

     

     

    
      
        3

      

      
        
        

      

      
        
        

      

    

    

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

    

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

    

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

     

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

     

    
      
        4

      

      
        
        

      

      
        
        

      

    

     

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

    

    For
      the purposes of
      this section the following definitions apply. 

     

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

     

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

     

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

            

    

     

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

     

    
      
        5

      

      
        
        

      

       

      
        
          
          

        

        
          
          

        

        
          
          

        

      

      
         

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

      

       

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

       

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

       

    

    
      
        6

      

      
        
        

      

      
        
        

      

    

     

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

     

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

            

    

     

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

            

    

     

    
      
        7

      

      
        
        

      

       

       

    

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

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

            

    

     

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

    

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

    

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

    

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

     

     

    
      
        8

      

      
        
        

      

      
        
        

      

    

     

     

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

     

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

    

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

     

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

     

     

    

      9Exhibit
      10.2

    

    

    

     

     

    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

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