J.C. Penney Company, Inc. Agreement to Respect Confidential Information

            

Andrew Drexler                                            May 15, 2015

    

    

Andy:    

                        

I am pleased to extend this offer of employment as SVP, Chief Accounting Officer and Controller with J. C. Penney Corporation, Inc. (“J.C. Penney”) Depending on your organization, you may be employed by J. C. Penney Corporation, Inc., or one of its subsidiaries, (e.g., JCP Logistics, Inc., J. C. Penney Purchasing Corporation, JCP Procurement, Inc. or JCPenney Puerto Rico, Inc)., reporting to me. Your new office will be in 6501 Legacy Drive, Plano, Texas 75024. I propose a start date of Monday, June 8^th 2015 and am excited to work with you. The components of your offer are below.

Your annualized base salary will be $380,000.

In addition to your base salary, you will receive a one-time sign-on bonus in the amount of $300,000 less applicable taxes, within 60 days of your date of hire.  To receive this sign-on bonus, you must sign and return the attached sign-on bonus agreement.

After you commence employment with JCPenney, you will receive an equity award on the date of grant with a fair market value of $525,000. The award will be your choice of either (1) 100% time-based restricted stock units (“TBRSUs”) or (2) 50% TBRSUs and 50% stock options. One-third of the equity will vest on each of the first three anniversaries of the grant date. The vesting of equity awards is contingent on your active employment with the Company on the applicable vesting date with no break in service.

The grant date will be the third full trading date following the date your employment begins. The terms and conditions of your equity award will be provided in your award notice, which will be distributed following your grant date.

You are also eligible to participate in a performance-based bonus program. Your target bonus opportunity is 50% of your base salary. Assuming employment for a full fiscal year, your bonus amount at target would be $190,000, for total annual earnings of $570,000. For the initial fiscal year of your employment following your start date, your bonus will be prorated based upon the actual duration of your participation in the program, assuming continued employment through the end of the fiscal year.

Your position entitles you to participate in J.C. Penney’s Long-Term Incentive Compensation Program. Long-term incentive awards are made on an annual basis, typically in the first quarter, and are subject to approval by the Human Resources and Compensation Committee (“HRCC”) of the Board of Directors. Each year, the HRCC determines the amount and type of awards that will be delivered in the annual grant. Award amounts are determined by position and individual performance. Past awards have consisted of stock options, TBRSUs, and/or performance-based restricted stock units.  

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Relocation

To assist with your move, attached is a summary of the relocation benefits provided by JCPenney.   Upon acceptance of the offer and clear background check, JCPenney will initiate your relocation with our provider Altair Global Relocation.   To ensure your move is as smooth as possible, Altair will contact you directly to administer the relocation benefits.  Before any benefits can be initiated, Associate will be required to acknowledge 12-month payback agreement (administered by Altair).   

We offer a comprehensive benefits package. A listing of our benefits programs is attached.

The terms and conditions of this offer letter supersede any previous representations concerning any terms or conditions of your employment with J.C. Penney.  Additionally, this offer, including referenced agreements, is governed by the federal and state law of the State of Texas, without regard to choice of law provisions of any other state. While we are confident that we will have a mutually beneficial employment relationship, employment with J.C. Penney is voluntary and at-will and does not create a contract for employment. Under this relationship, J.C. Penney may, at any time, decide to end an individual’s employment with or without cause, prior notice or discipline at J.C. Penney’s sole discretion. Likewise, any employee is free to end his or her employment at any time for any reasons with or without notice. Nothing in this offer or any attached agreement is intended to alter the at-will employment relationship.

This offer of employment and your continued employment with J.C. Penney are expressly contingent upon J.C. Penney receiving the following:

Please confirm your acceptance of this offer by signing below and returning the signed offer letter along with signed agreements to Brynn Evanson ( ***@***), EVP Human Resources.

We are excited about the opportunity to work with you and welcome you to the J.C. Penney team!  I look forward to partnering with you as we work to return to profitable growth.

Regards,

/s/ Ed Record

My signature acknowledges that I am accepting your offer of employment as outlined in the offer letter. I acknowledge that this is not a contract of employment.

 

While you have been hired based on your prior accomplishments and experiences, we ask that you do not bring any confidential business information with you from any prior employer(s). Confidential information is information that may be marked as “confidential”, “proprietary” or “privileged” or any other business information that may not be known by the public.  While bringing such information to J.C. Penney may seem innocent, it is a violation of our Statement of Business Ethics to do so - a violation at which can result in disciplinary action up to and including termination of your employment. Further, doing so can expose both you and J.C. Penney to civil and criminal liability.

 

The type of confidential information that should not be shared with us is the same type of information that J.C. Penney would not want you to share with our competitors.  If you have any questions whether the information you have from any prior employer(s) is confidential information, please contact your Human Resources Representative to discuss.         

  

Please sign below to acknowledge your understanding and agreement. 

In addition to your base salary, you will receive a one-time sign-on bonus in the amount of $300,000 less applicable taxes, within 60 days of your date of hire.

By accepting this bonus and signing the agreement below, if you voluntarily terminate your employment with J.C. Penney Corporation, Inc. (“J.C. Penney”) Your offer of employment is with J. C. Penney Corporation, Inc. or one of its subsidiaries. or your employment is terminated for cause, including specifically, a breach of any of J.C. Penney’s policies, practices, procedures or Statement of Business Ethics as determined by J.C. Penney, within 24 months of your start date, you agree to reimburse J.C. Penney for a pro-rata portion of the sign-on bonus according to the following:

To the extent permitted by law, team member agrees that J.C. Penney may deduct reimbursement payments from team member’s final paycheck and/or vacation payout. If reimbursement payments are not timely paid, J.C. Penney shall be entitled to recover reasonable collection agency fees and attorney's fees incurred by J.C. Penney because of such noncompliance. Nothing in this agreement is intended to alter the at-will employment relationship between you and J.C. Penney.

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