Letter Agreement dated April 15, 2019 between J. C. Penney Company, Inc. and Steve Whaley

Dear Steve:

                        

I am pleased to extend this offer of employment as SVP Principal Accounting Officer and Controller with J.C. Penney Corporation, Inc. (“J.C. Penney”)¹, reporting to me. Your new office will be in 6501 Legacy Drive, Plano, Texas 75024. Your start date will be April 29, 2019. The components of your offer are below.

Your annualized base salary will be $500,000.

You are eligible to participate in a performance-based bonus program. Your annual target bonus opportunity is 50% of your base salary. Assuming employment for a full fiscal year, your bonus opportunity at target would be $250,000, for total annual cash earnings opportunity of $750,000. For the 2019 fiscal year 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.

In addition to your base salary and performance-based bonus, you will receive a one-time cash sign-on bonus of $70,000 less applicable taxes, within 30 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 J.C. Penney, you will receive an equity award having a fair market value of $550,000 on the date of grant. The equity award will be granted as follows:

The vesting of the equity awards is contingent on your active employment with the Company on the applicable vesting date with no break in service. The awards will be subject to other terms and conditions as set forth in your award agreements, which will be delivered following your grant date. The grant date for your equity inducement awards will be the third full trading date following the date your employment begins.

______________________

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. For the 2020 fiscal year, your Long-Term Incentive Award will have a grant date target economic value of $350,000. Past awards have consisted of stock options, time-based restricted stock units, performance cash and/or performance-based restricted stock units.  

Relocation

We offer a comprehensive benefits package. In addition to the standard benefits offering, J.C. Penney currently offers senior vice presidents an annual allowance up to $5,000 for a health exam.

We recognize the need to provide protection to our executive officers in the event of an executive officer’s involuntary termination of employment without Cause from JCPenney. Accordingly, you are eligible for the company’s senior vice president termination pay agreement (TPA).

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!

Best Regards,

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 $70,000 less applicable taxes, within 30 days of your date of hire.

By accepting this bonus agreement and signing the agreement below, if you voluntarily terminate your employment with J.C. Penney Corporation, Inc. (“J.C. Penney”)² 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 100% of any bonus or bonuses received.

You will not be required to reimburse J.C. Penney for any portion of your bonus or bonuses if your employment is involuntarily terminated by J.C. Penney for any reason other than for cause, or if your employment is terminated as a result of your death or disability.

To the extent permitted by law, associate agrees that J.C. Penney may deduct reimbursement payments from associate’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.