<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
J.C. PENNEY COMPANY, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- --------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
PRELIMINARY PROXY MATERIALS: 2/28/94
JCPenney William R. Howell
Chairman of the Board
and Chief Executive Officer
April 12, 1994
Dear Stockholders:
On behalf of your Board of Directors and your management, I cordially invite you
to attend the Annual Meeting of Stockholders of your Company. It will be held on
Friday, May 20, 1994, at 10:00 A.M., local time, at the Company's Home Office
located at 6501 Legacy Drive, Plano, Texas 75024-3698.
You will find information regarding the matters to be voted on at the
meeting in the formal Notice of Meeting and Proxy Statement which are included
on the following pages of this booklet.
The vote of each and every stockholder is most important to us. We are
gratified that so many of you have in the past exercised your right to vote your
shares.
WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE SIGN AND RETURN THE ENCLOSED
PROXY IN THE ACCOMPANYING ENVELOPE AS SOON AS POSSIBLE SO THAT YOUR SHARES WILL
BE VOTED AT THE MEETING.
Please note that your completed proxy will not prevent you from attending
the meeting and voting in person should you so choose. We look forward to
seeing you at this meeting. If you plan to attend, please so indicate in the
appropriate box on your proxy. As in the past, there will be a report on
operations, an opportunity to meet your Company's directors and officers, as
well as time for questions. A summary of the meeting will be included in the
First Quarter & Annual Meeting Report to be sent to all our stockholders.
Thank you for your cooperation and continued support and interest in
JCPenney.
Warmest Regards,
W. R. Howell
ANY STOCKHOLDER HAVING A DISABILITY REQUIRING SPECIAL
ASSISTANCE WHO WOULD LIKE TO ATTEND THE ANNUAL
MEETING SHOULD CALL THE SECRETARY OF THE
COMPANY AT (214) 431-1201 AND
REASONABLE EFFORTS WILL BE MADE TO
ACCOMMODATE SUCH NEEDS.
_______________________________________________
CUSTOMER SERVICE IS OUR NUMBER ONE PRIORITY
_______________________________________________
J. C. Penney Company, Inc. . P.O. Box 10001 Dallas, TX 75301-0001
Home Office . 6501 Legacy Drive . Plano, TX 75024-3698
-------------------------------------------------------
<PAGE>
J. C. PENNEY COMPANY, INC.
6501 Legacy Drive, Plano, Texas
75024-3698
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 20, 1994
The Annual Meeting of Stockholders of J. C. Penney Company, Inc. will be held at
the Company's Home Office at 6501 Legacy Drive, Plano, Texas 75024-3698 on
Friday, May 20, 1994, at 10:00 A.M., for the following purposes:
1. to elect three directors for a three-year term as described in the
accompanying proxy materials;
2. to act upon a proposed amendment to the Company's Restated Certificate of
Incorporation, as amended, which would increase the authorized number of
shares of J. C. Penney Company, Inc. Common Stock of 50c par value from
500,000,000 to 1,250,000,000 and the total authorized number of shares of
J. C. Penney Company, Inc. Common Stock of 50c par value and Preferred
Stock without par value (such total authorized number of shares of
Preferred Stock remaining unchanged) from 525,000,000 to 1,275,000,000;
3. to approve the employment of KPMG Peat Marwick as auditors to audit the
accounts of the Company for the fiscal year ending January 28, 1995;
4. to act upon a resolution which the Company has been informed will be
proposed by a stockholder of the Company regarding classification of the
Board;
5. to act upon a resolution which the Company has been informed will be
proposed by a stockholder of the Company regarding submission of the
Company's stockholder rights plan to a stockholder vote; and
6. to transact such other business as may properly come before the meeting.
Stockholders of record at the close of business on March 21, 1994 are
entitled to vote at the meeting. A complete list of those stockholders will be
open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours at the Company's Home Office located at
6501 Legacy Drive, Plano, Texas 75024-3698, for a period of 10 days prior to
the meeting.
Plano, Texas
April 12, 1994 C. R. Lotter, Secretary
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE, & RETURN YOUR PROXY CARD
<PAGE>
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of proxies in the accompanying form.
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE IN ORDER TO BE SURE THAT YOUR
SHARES WILL BE VOTED AT THE MEETING.
You may revoke your proxy at any time before it is exercised at the meeting
by submitting a written revocation, a subsequently dated proxy, or by personal
vote at the meeting.
The enclosed proxy also serves as the voting instruction card for Chemical
Bank as agent ("Agent") holding shares of Common Stock of 50c par value of the
Company ("Common Stock") of record for participants under the Company's Dividend
Reinvestment Plan ("DRIP"). Such voting instructions are intended to cover
Common Stock allocated to accounts of DRIP participants from whom an executed
voting instruction card is received by the Agent by May 17, 1994 ("Voted Stock")
and Common Stock allocated to the accounts of DRIP participants from whom an
executed voting instruction card is not received by the Agent by May 17, 1994
("Undirected Stock"). The Agent will vote as follows: (a) for Voted Stock, in
accordance with the instructions given, and (b) for Undirected Stock, in the
same proportion as the vote for the Voted Stock. Separate voting instruction
cards are also being furnished to participants who beneficially own Voting Stock
(as defined below) in the trusts under the Company's Savings and Profit-Sharing
Retirement Plan ("Savings Plan"), the Company's Savings, Profit-Sharing and
Stock Ownership Plan ("LESOP"), and the JCPenney Financial Services Thrift and
Investment Retirement Plan.
The cost of soliciting proxies will be borne by the Company. In addition
to solicitation by mail, certain directors, officers, and employees of the
Company may solicit proxies in person, by telephone, telegraph, or mail. The
Company has also retained, on behalf of the Board of Directors, Morrow & Co.,
Inc. to aid solicitation by mail, telephone, telegraph, and personal interview,
for a fee of approximately $22,500, plus reasonable expenses, which will be paid
by the Company. The Company may also reimburse brokers and other persons
holding shares in their names, or in the names of nominees, for their expenses
in sending proxy material to principals and obtaining their proxies.
The complete mailing address of the Company's principal executive offices
is J. C. Penney Company, Inc., P. O. Box 10001, Dallas, Texas 75301-0001. The
approximate date on which this proxy statement and the form of proxy were first
sent or given to stockholders was April 12, 1994.
1
<PAGE>
VOTING RIGHTS
Stockholders of record at the close of business on March 21, 1994, the record
date for the Annual Meeting, are entitled to vote at the meeting. At the close
of business on such date, [236,076,727] shares of Common Stock, and [1,080,421]
shares of Series B ESOP Convertible Preferred Stock ("ESOP Preferred Stock")
having a Common Stock voting equivalent of 20 votes per share for a combined
total voting equivalent of [257,685,147] shares ("Voting Stock"), were
outstanding and entitled to vote.
On that date, a trust maintained under the Company's Savings Plan held
[29,798,415] shares of Common Stock representing approximately [11.56%] of the
Voting Stock, and a trust maintained under the LESOP, held [1,080,421] shares of
ESOP Preferred Stock and [6,282,342] shares of Common Stock, representing
approximately [10.82%] of the Voting Stock. The holdings of both Plans
represent approximately [22.38%] of the Voting Stock. These trusts have
disclaimed beneficial ownership of these shares of Voting Stock.
The Company's By-laws require an affirmative vote of the holders of a
majority of the shares of the Voting Stock outstanding and entitled to vote as
of the record date for approval of each proposal presented in this proxy
statement. Abstentions and broker nonvotes are counted only for purposes of
determining whether a quorum is present at the meeting.
GOVERNANCE OF THE COMPANY
BOARD OF DIRECTORS. The Board of Directors is responsible for establishing
broad corporate policies and for overseeing the general performance of the
Company. In keeping with its long-standing practice, all but one of the
Company's directors have principal occupations or employment outside of the
Company. This Board structure is designed to assure that there is independent
review and oversight as well as approval of significant strategic and
management decisions affecting the Company. The Board has seven meetings
scheduled for fiscal 1994.
COMMITTEES OF BOARD OF DIRECTORS. The Board of Directors carries out many of
its functions through five principal standing committees, which are described on
pages 3 and 4 and are composed entirely of directors who are not employees of
the Company. One of these committees, the Committee on Directors, selects and
recommends to the Board nominees for director on the basis of their recognized
experience and achievements, both in commerce and society, and for their ability
to bring a wide diversity of skills and experience to the deliberations of the
Board. Stockholders also may make recommendations of nominees for director to
the Committee on Directors, as explained in greater detail on pages 27 and 28.
CONFIDENTIAL VOTING. In casting their votes, stockholders are also assured that
their votes are accorded confidential voting treatment as provided in the
Company's confidential voting policy described on page 28.
2
<PAGE>
EXECUTIVE COMPENSATION. The Personnel and Compensation Committee of the Board
of Directors, which is composed entirely of non-employee directors, approves,
among other things, the annual salaries of executive officers and recommends to
the full Board for its approval the annual salary of the one employee director.
Please see the Report of Personnel and Compensation Committee on Executive
Compensation, which begins on page 10.
CLASSES OF BOARD OF DIRECTORS. The Company's Restated Certificate of
Incorporation and its By-laws provide for a Board of not less than three
directors as fixed, from time to time, by the Board, and further provide for
three classes of directors to be as nearly equal in number as possible, with
each class serving a three-year term and with one class being elected each year.
Currently, the Board consists of ten members, with two classes consisting of
three directors each and one class consisting of four directors. However, one
director, Mr. Yavitz, will be retiring from the Board effective May 20, 1994, at
which time the Board will consist of nine members with three classes each having
three directors. Of the ten current directors, one is currently a Company
employee and nine have principal occupations or employment which are and have
been outside the Company.
Each director is required to be a stockholder of the Company.
BOARD MEETINGS. During fiscal 1993, seven meetings of the Board were held.
Attendance at such meetings for current directors averaged approximately 99%. In
addition to membership on the Board, directors also serve on one or more of the
principal standing committees of the Board. During fiscal 1993, these
committees held a total of 17 meetings; no current director attended fewer than
89% of the aggregate total of meetings of the Board and committees on which he
or she served.
COMMITTEES
The principal standing committees of the Board of Directors, which are composed
entirely of directors who are not employees of the Company, include the
following:
AUDIT COMMITTEE. The Audit Committee's responsibilities include recommending to
the Board of Directors for stockholder approval the independent auditors for the
annual audit of the Company's consolidated financial statements. The Committee
reviews the audit plans, scope, fees, and audit results of the auditors; reports
on the adequacy of internal accounting controls, non-audit services and related
fees, the Company's ethics program, status of significant legal matters, the
scope of the internal auditors' plans and budget and results of their audits,
and the effectiveness of the Company's program for correcting audit findings.
During fiscal 1993, this Committee met three times. Its members are A. K.
Pye, C. S. Sanford, Jr., Boris Yavitz, and J. D. Williams, who serves as its
Chair.
3
<PAGE>
BENEFIT PLANS REVIEW COMMITTEE. This Committee's responsibilities include
reviewing annually the financial condition and investment performance results of
the Company's retirement plans, annual actuarial valuation reports for the
Company's Pension Plan, and the financial condition, investment performance
results, and actuarial valuation aspects of the Company's welfare plans.
During fiscal 1993, this Committee met two times. Its members are M. A.
Burns, J. D. Williams, Boris Yavitz, and J. C. Pfeiffer, who serves as its
Chair.
COMMITTEE ON DIRECTORS. The Committee on Directors' responsibilities include
making recommendations to the Board with respect to the size, composition, and
functions of the Board of Directors, the qualifications of directors, candidates
for election as directors, and the compensation of directors.
During fiscal 1993, this Committee met two times. Its members are C. H.
Chandler, George Nigh, J. C. Pfeiffer, C. S. Sanford, Jr., and V. E. Jordan,
Jr., who serves as its Chair.
Stockholders may propose nominations for directors in accordance with the
procedures described below on pages 27 and 28.
PERSONNEL AND COMPENSATION COMMITTEE. This Committee's responsibilities include
reviewing the Company's annual and long-term incentive compensation plans,
making recommendations in areas concerning personnel relations, and taking
action or making recommendations with respect to the compensation of executive
officers, including those who are directors. It is also the committee which
administers certain Company incentive compensation and retirement plans.
During fiscal 1993, this Committee met eight times. Its members are M. A.
Burns, V. E. Jordan, Jr., George Nigh, J. C. Pfeiffer, and C. H. Chandler, who
serves as its Chair.
PUBLIC AFFAIRS COMMITTEE. The responsibilities of the Public Affairs Committee
include identifying, analyzing, and bringing to the attention of the Board
social and environmental trends, community affairs, and public policy issues
which may have a potential impact on the business performance and investment
character of the Company, and assuring that Company policy and performance
reflect a sensitivity toward the social and physical environments in which the
Company does business and that such policy and performance are in accord with
the public interest.
During fiscal 1993, this Committee met two times. Its members are M. A.
Burns, V. E. Jordan, Jr., A. K. Pye, J. D. Williams, Boris Yavitz, and George
Nigh, who serves as its Chair.
The mailing address for all of these committees is c/o C. R. Lotter,
Secretary, J. C. Penney Company, Inc., P. O. Box 10001, Dallas, Texas 75301-
1109.
4
<PAGE>
ELECTION OF DIRECTORS (PROPOSAL 1)
As indicated on page 3, under "Classes of Board of Directors," the Board of
Directors has been divided into three classes which, upon the retirement of
Boris Yavitz, will each consist of three directors. At the meeting, three
directors will be elected to hold office for a three-year term expiring at the
1997 Annual Meeting of Stockholders. Other directors will continue in office,
in accordance with their previous election, until the expirations of the terms
of their classes at the 1995 or 1996 Annual Meeting of Stockholders, as the case
may be.
Brief statements setting forth certain information as of March 21, 1994, as
to the Board of Directors' nominees for directors for the three-year term
expiring at the 1997 Annual Meeting of Stockholders and as to each current
director in the classes continuing in office are shown on pages 5 to 7. Each of
the nominees is currently a director of the Company.
If properly executed and timely returned, the accompanying proxy will be
voted for all three nominees for a term expiring at the 1997 Annual Meeting of
Stockholders, except where authority so to vote is withheld. If any nominees
should become unavailable for election for any presently unforeseen reason, the
persons designated as proxies will have full discretion to cast votes for
another person designated by the Board, unless the Board reduces the number of
directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR
DIRECTOR.
NOMINEES FOR DIRECTORS FOR THREE-YEAR TERM EXPIRING 1997
VERNON E. JORDAN, JR., 58
Senior Partner, law firm of Akin, Gump, Strauss, Hauer & Feld since 1992.
Partner since 1982. President from 1977 to 1981 and Executive Director from
1972 to 1977 of the National Urban League. Also, a director of American Express
Company, Bankers Trust Company, Bankers Trust New York Corporation, Corning
Glass Works, Dow Jones & Company, Inc., Revlon Group, Inc., RJR Nabisco, Inc.,
Ryder System, Inc., Sara Lee Corporation, Union Carbide Corporation, and Xerox
Corporation. A trustee of the Brookings Institution, The Ford Foundation, the
Joint Center for Political and Economic Studies; and Chairman of the National
Academy Foundation. Director of the Company since 1973.
JANE C. PFEIFFER, 61
Independent management consultant. Chairman of the Board of National
Broadcasting Company, Inc. from 1978 to 1980. Independent management consultant
from 1976 to 1978. Vice President of Communications and Government Relations of
International Business Machines Corporation from 1972 to 1976. Also, a director
of Ashland Oil, Inc., International Paper Company, The Mutual Life Insurance
Company of New York, and Overseas Development Council. A trustee of The
Conference Board and of the University of Notre Dame. Director of the Company
since 1977.
5
<PAGE>
A. KENNETH PYE, 62
President of Southern Methodist University since 1987. Associated with Duke
University from 1966 to 1987, including Chancellor from 1970 to 1971 and 1976 to
1982, Dean of the School of Law from 1968 to 1970 and 1973 to 1976, and
Professor from 1966 to 1987. Also, a director of Dresser Industries, Inc.
Formerly chair of the Citizens' Commission on the Texas Judicial System from
1991 to 1993 and director of the Dallas Citizens Council from 1989 to 1993.
Formerly President of the Association of American Law Schools from 1977 to 1978;
Chairman of the Board of the Council for International Exchange of Scholars from
1984 to 1987 and of the District of Columbia Neighborhood Legal Services from
1964 to 1966; Fulbright Professor of Law, Germany (1959) and Australia (1974);
and formerly Director of Educational Testing Service from 1978 to 1982 and
PepCom Industries, Inc. from 1979 to 1982. Director of the Company since 1991.
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING 1995
M. ANTHONY BURNS, 51
Chairman, President and Chief Executive Officer of Ryder System, Inc. (a
transportation services company) since 1985, with which he has served in
positions of increasing importance since 1974, including its President since
1979, Chief Executive Officer since 1983, and a director since 1979. Also, a
director of The Chase Manhattan Bank, N. A., The Chase Manhattan Corporation,
Pfizer, Inc., a member of the Board of Governors of the United Way of America,
the American Red Cross and a member of the National Executive Board of the Boy
Scouts of America. A trustee of the University of Miami; a member of the Policy
Committee of The Business Roundtable and of The Business Council; and Vice
Chairman of the Board of Trustees of the National Urban League. Director of the
Company since 1988.
COLBY H. CHANDLER, 68
Formerly Chairman and Chief Executive Officer of Eastman Kodak Company from 1983
to 1990 and its President from 1977 to 1983. Associated with Eastman Kodak
Company since 1950 and a director from 1974 to 1993. Also, a director of
Citicorp, Digital Equipment Corporation, Ford Motor Company, and M.I.T.
Corporation. A trustee of the International Museum of Photography at George
Eastman House, Rochester Institute of Technology, and the University of
Rochester. Director of the Company since 1983.
CHARLES S. SANFORD, JR., 57
Chairman of Bankers Trust New York Corporation and its principal subsidiary,
Bankers Trust Company, since 1987, with which he has served in positions of
increasing importance since 1961, including its Deputy Chairman from 1986 to
1987 and President from 1983 to 1986. Also, a director of Mobil Corporation; a
member of The Business Roundtable and The Business Council; and an overseer of
The Wharton School, University of Pennsylvania. Director of the Company since
1992.
6
<PAGE>
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING 1996
WILLIAM R. HOWELL, 58
Chairman of the Board and Chief Executive Officer of the Company since 1983.
Executive Vice President from 1981 to 1982. Associated with the Company since
1958. Also, a director of Bankers Trust Company, Bankers Trust New York
Corporation, Beta Gamma Sigma, Exxon Corporation, Halliburton Company, National
Retail Federation, and Warner-Lambert Company. A trustee of the National Urban
League. Director of the Company since 1981.
GEORGE NIGH, 66
President of the University of Central Oklahoma since 1992. Formerly Governor
of Oklahoma, during 1963 and from 1979 to 1987. Lieutenant Governor from 1958 to
1963 and from 1967 to 1979. Member of the Oklahoma House of Representatives
from 1950 to 1958. Also, a director of Boatmen's First National Bank of
Oklahoma. Director of the Company since 1987.
JOSEPH D. WILLIAMS, 67
Retired Chairman and Chief Executive Officer of Warner-Lambert Company
(pharmaceuticals, health care, and consumer products) from 1985 to 1991, with
which and with a related company he served in positions of increasing importance
since 1950, including its President and Chief Operating Officer from 1979 to
1985. Also, a director of American Telephone and Telegraph Company, Exxon
Corporation, Rockefeller Financial Services, Inc., Therapeutic Antibodies, Inc.,
Thrift Drug, Inc., and Warner-Lambert Company. A trustee of Columbia
University, Project Hope, and the United Negro College Fund. Director of the
Company since 1985.
7
<PAGE>
MANAGEMENT OWNERSHIP OF COMMON STOCK AND ESOP PREFERRED STOCK
The following table shows, as of March 21, 1994, the beneficial ownership of
shares of Voting Stock by each present director and by the five most highly
compensated executive officers serving as of the last fiscal year ("Named
Executive Officers"), and by all present directors and all executive officers of
the Company as a group. The information includes shares held under certain
restrictions or held by or on behalf of family members or in trusts, which
shares might be deemed to be owned beneficially by directors or executive
officers, and in the case of executive officers, also includes the number of
shares of Voting Stock credited to their accounts under the Company's Savings
Plan and LESOP. As shown in the last two columns, substantial portions of the
shares indicated as beneficially owned are actually unissued shares attributable
to unexercised and unexpired options for Common Stock. The combined beneficial
ownership of shares of Common Stock and Common Stock voting equivalents of each
director and Named Executive Officer and of all directors and executive officers
as a group (not including shares attributable to unexercised and unexpired
options) constitutes less than 1% of the total Voting Stock as of March 21,
1994.
<TABLE>
<CAPTION>
Number
attributable Number
to unexercised attributable
Number and unexpired to options
of Shares options for exercisable within
beneficially Common 60 days of
Name of Group owned Stock March 21, 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Directors:
M. A. Burns 8,400 6,400 6,400 [Numbers to
C. H. Chandler 20,400 6,400 6,400 be revised.]
W. R. Howell 427,214 285,394 285,394
V. E. Jordan, Jr. 10,224 9,600 9,600
George Nigh 6,928 6,400 6,400
J. C. Pfeiffer 9,201 8,400 8,400
A. K. Pye 7,597 3,200 3,200
C. S. Sanford, Jr. 6,400* 2,400 2,400
J. D. Williams 24,400 6,400 6,400
Boris Yavitz 8,765 8,000 8,000
Named Executive Officers:**
R. E. Northam 151,787 91,672 91,672
J. E. Oesterreicher 138,377 90,356 90,356
W. B. Tygart 154,617 98,566 98,566
T. S. Prindiville 102,552 56,533 56,533
All present directors and
executive officers as a
group 1,472,640 903,703 903,703
</TABLE>
* Excludes 4,078,406 shares held in accounts of Bankers Trust Company, of which
Mr. Sanford is the Chairman, but as to which he disclaims beneficial
ownership.
** In addition to Mr. Howell who also serves as a director.
8
<PAGE>
DIRECTORS' FEES
Company employees are not paid additional amounts for serving as directors.
Directors who are not Company employees ("Non-Associate Directors") are paid an
annual retainer of $24,000, plus $1,200 for attendance at each meeting of the
Board, $1,000 for attendance at each meeting of the board of directors of a
wholly-owned Company subsidiary upon which a director may sit, and $1,000 for
attendance at each meeting of any committee of the Board. The chair of the
Audit Committee and the Personnel and Compensation Committee of the Board are
each paid an additional annual fee of $4,500; the chair of the Benefit Plans
Review Committee, the Committee on Directors, and the Public Affairs Committee
of the Board are each paid an additional annual fee of $4,000. Directors are
also reimbursed for expenses incurred for attending any meeting which they
attend in their official capacities as directors. Directors who are
Representatives under an Indemnification Trust Agreement between the Company
and Chemical Bank, as trustee, (currently Directors Jordan, Pfeiffer, Williams,
and Yavitz), are paid an annual retainer of $5,000, plus $600 for each meeting
of the Representatives and are reimbursed for expenses of meeting attendance.
During fiscal 1993, no such meetings were held. Non-Associate Directors are also
paid $800 for each full day of service to the Company in addition to those
services which they perform in connection with Board and committee
responsibilities, and are reimbursed for expenses in connection with their
performance of such services. No director received payment for such services
during fiscal 1993. A director may elect to defer payment of all or part of any
of the above fees, under the terms of a deferred compensation plan for
directors. During fiscal 1993, two directors elected to so defer.
Pursuant to a retirement plan for Non-Associate Directors, any director who
is not entitled to receive benefits under the Company's Pension Plan will be
paid a retirement benefit after serving as a member of the Board for a period of
not less than five years. Annualized benefits will not exceed the then current
annual retainer for directors.
During fiscal 1993, each Non-Associate Director was also automatically
given a tandem restricted stock award/stock option grant under the Company's
1989 Equity Compensation Plan. Each such award/grant consisted of 200 shares of
restricted Common Stock and an option to purchase 800 shares of Common Stock.
All such options became exercisable six months from the date of grant, but
shares which may be acquired upon any such exercise are not transferable until a
director's termination. If on the date of a "Qualifying Termination" the
"option value" of any unexpired option is greater than the fair market value of
the Common Stock covered by the tandem stock award, such stock award will be
forfeited and the stock option will remain exercisable for two years, but if the
option value is less than the fair market value of the Common Stock covered by
the tandem stock award, the stock option will automatically expire and the
tandem stock award will automatically vest. For any "Non-qualifying
Termination", unless otherwise determined by the plan committee, all outstanding
stock awards and unexercised options will be forfeited or canceled, as the case
may be. Generally, termination by reason of misconduct will be considered a
Non-qualifying Termination and all other terminations will be considered
Qualifying Terminations. The shares under option grant are included in the
table on page 8.
9
<PAGE>
Directors are eligible to participate in the Company's Directors'
Charitable Award Program ("Charitable Award Program"). This is designed to
acknowledge the service of directors and to benefit and recognize the mutual
interest of directors and the Company in supporting worthy charitable and
educational institutions. In addition, it enhances the Company's ability to
attract and retain directors of the highest caliber and experience. Pursuant to
the Charitable Award Program, the Company has purchased joint life insurance
policies on groups of directors. Each group generally consists of two directors
with the Company named as the beneficiary of each joint life policy. With
respect to each group, the Company will receive a $1,000,000 death benefit upon
the death of the second director of the group. The Company in turn has
informally agreed to donate a total of $1,000,000; $500,000 upon the earlier of
(i) five years after the date of death of the first director of the group to die
or (ii) the death of the second director of the group, and an additional
$500,000 upon the death of the second director of the group, to one or more
charitable organizations as recommended by the individual directors. Because
all charitable deductions accrue solely to the Company, the individual directors
derive no financial benefits from this Program. The Board may, at any time,
without the consent of any participating director, amend, suspend, or terminate
this Program. All directors currently participate in the Charitable Award
Program.
REPORT OF PERSONNEL AND COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Personnel and Compensation Committee of the Board of Directors
("Committee"), which is composed entirely of non-employee directors, is
responsible for establishing and implementing the annual and long-term
compensation policies for the Company. Based upon its evaluation of the
performance of both the Company and the executive officers, the Committee
determines and approves the annual salaries of these officers and recommends to
the full Board for its approval the annual salary of the Company's Chairman of
the Board and Chief Executive Officer ("CEO"). The Committee also determines
and approves the amounts of annual and long-term incentive compensation payments
to be made to executive officers as well as the awards which may be made to them
under the Company's 1993 Equity Compensation Plan ("Equity Plan") and
predecessor plans. In carrying out these responsibilities the Committee is
advised by outside consultants with respect to the competitiveness of the
Company's executive compensation policies and programs and meets with these
consultants without any Company representative being present.
COMPENSATION PHILOSOPHY. Since the Company's founding in 1902 by James Cash
Penney and as set forth in the Penney Idea adopted in 1913, the JCPenney
compensation philosophy has been based on the following: To reward the men and
women in our organization through participation in what the business produces.
Implementation of this philosophy is based on tying compensation directly to the
achievement of the Company's annual and long-term performance goals.
Through the consistent and fair application of this philosophy the Company
believes it is able to hire and retain executives who are most able to
contribute to the long-term success of the Company and the enhancement of
stockholder value. This is accomplished through a total compensation package
consisting of base salary supplemented with (1) annual profit incentive
compensation and (2) long-term incentive compensation of both cash and stock.
(See "Summary Compensation Table" on page
10
<PAGE>
15.) As an executive officer's Position Responsibility Level ("PRL") increases,
a greater portion of his or her total compensation is based upon Company
performance, and this will be reflected in the annual and long-term incentive
components of such officer's compensation.
BASE SALARY AND INCENTIVE COMPENSATION PAYMENTS
Total annual cash compensation consists of base salary and annual awards under
the Company's short and long-term incentive compensation plans. Base salary is
set by the Committee from a range determined by the officer's PRL. At the
executive officer level, base salary is low by industry standards. Rather,
emphasis is placed upon incentive compensation tied to Company performance. In
determining base salary, consideration is given to the following factors:
responsibilities and tasks; knowledge, skills, and experience; and competitive
positioning, both within and outside the Company. No specific weighting is
given to any of these factors. In determining competitive position,
consideration is given to the companies constituting the S&P 500 Retail Index
for department stores as well as other major retailers in the United States and
selected Fortune 200 companies. It is believed that these are the companies
with which the Company competes for executive talent. In setting base salaries
the Committee considers the competitiveness of the Company's cash compensation
package as compared with the cash compensation packages of these selected
companies. The Committee reviews the total cash compensation salary levels
annually and adjustments are made, on average, annually.
Under the Company's 1989 Management Incentive Compensation Program
("Incentive Program"), annual profit incentive compensation is added to the base
salary. The amount of annual incentive compensation, which is a cash payment,
is based solely on the number of profit incentive units credited to a particular
PRL and the value assigned to each unit. The number of profit incentive units
is a given percentage, based on PRL level, of base salary. The value of each
unit is determined by the Committee and is based on the Company's performance
against two factors: total revenues as measured against the Company's goal for
the year (weighted at approximately 26%), and primary earnings per share for the
current year as measured against primary earnings per share for the preceding
year (weighted at approximately 74%). For certain officers, including certain
executive officers, a portion of their Incentive Program unit value is based
upon the sales and profit results of the particular operating division(s) for
which they have responsibility.
The cash payment of long-term incentive compensation is set by the
Committee under the Company's 1984 Performance Unit Plan ("PUP"). Similar to
the Incentive Program, the annual amount paid under the PUP is based on the
number of performance units credited to a particular PRL and the value assigned
to each unit. The number of performance units is a given percentage, based on
PRL, of base salary and profit incentive compensation valued at one dollar per
unit. The value of each performance unit is determined by the Committee and is
based on the Company's return on equity ("ROE") measured over a three-year
period and earnings per share ("EPS"), as determined by the Committee, measured
over this same period and the five consecutive fiscal years immediately
preceding this three-year period, as well as the Company's financial performance
(i.e., ROE and EPS), relative to a selected group of retail competitors. The
calculation is based upon a matrix award schedule having various performance
unit value
11
<PAGE>
ranges at specified ROE/EPS performance combinations. While there is no
specific weighting of these factors, ROE generally has a greater impact on the
value than does EPS. The select group of competitors includes those making up
the S&P 500 Retail Index for department stores and other major retailers which,
based upon size and target customer, have a reasonable basis for comparison to
the Company. (See "Long-Term Incentive Plan Awards", page 17.)
Currently, the combined payments from these two incentive programs account
for from [39%] to [68%] of the Named Executive Officers' total cash
compensation, depending on the Company's sales and earnings performance and the
executive's PRL.
EQUITY AWARDS. The stock or equity portion of the Company's compensation
package is designed to align the interests of its executives with its
stockholders. Generally, an executive's participation in the Equity Plan and
the size of awards made under the Equity Plan to executive officers are
determined solely by the executive's PRL. Stock options, stock awards, and
shareholder value awards (see pages 8 and 18) have been granted under the Equity
Plan.
On February 28, 1994, options covering approximately 960,000 shares under
the Equity Plan (to approximately 1,700 management employees of the Company and
its subsidiaries) were granted at an option price of [$55.125] per share.
Additionally, shareholder value award units were granted on February 1, 1993 and
February 1, 1994 (see page 18).
The Company has never reduced the exercise prices of outstanding stock
options under the present or any prior option plan.
1993 COMPENSATION. In 1993, the annual profit incentive compensation unit
value under the Incentive Program was $2.12 as compared to $1.95 in 1992 and
$.85 in 1991. This corresponds to similar increases in sales and earnings in
1993 and 1992 following the sharp decrease in 1991 as compared with 1990. As
noted previously, a portion of the unit value for certain officers is based
upon the sales and profit results of the particular operating division(s) for
which they are responsible. Accordingly, the 1993 Incentive Program unit values
for Messrs. Oesterreicher and Tygart were $2.02 and $2.01, respectively.
Correspondingly, the performance unit value under the PUP for 1993 was
[$1.65] as compared to $1.50 in 1992 and $1.40 in 1991. Return on equity was
20.1%, 18.6% and 12.0%, for fiscal years 1993, 1992, and 1991, respectively.
EPS, as determined by the Committee for each of these three years was $3.77
(1993), $3.15 (1992), and $2.12 (1991), and for the preceding five years was
$2.30 (1990) $3.24 (1989), $2.48 (1988), $2.33 (1987), and $1.77 (1986). Due to
its long-term nature, the PUP awards are less sensitive to year-to-year changes
in Company performance than are Incentive Program awards.
CEO COMPENSATION. As shown on the Summary Compensation Table, the CEO's base
salary for 1993 was $691,967. For 1993, over [68%] of his total cash
compensation was comprised of annual and long-term cash incentive awards. (The
comparable percentages for fiscal 1992 and 1991 were 65% and 52%, respectively.)
This level of compensation was based on the same performance factors applicable
to all executive
12
<PAGE>
officers, as discussed in the preceding paragraphs. No unique evaluation factors
are utilized with respect to determining the CEO's compensation. The increase
in CEO compensation in fiscal 1993 over prior years reflects the fact that the
Company's performance exceeded its targets in both the sales and earnings areas
for the second consecutive year. In fiscal 1993, the Company produced the
highest level of earnings in its history.
As discussed above, the Company's executive compensation philosophy emphasizes
incentive compensation tied to Company performance. The Company is currently
studying its performance-based compensation programs in light of new Section
162(m) of the Internal Revenue Code, which, in certain circumstances, limits
the deductibility of executive compensation beginning in the 1994 tax year.
Proposed regulations regarding Section 162(m) were not published by the Internal
Revenue Service until December 20, 1993, and were not finalized prior to the
mailing of this proxy statement. Consequently, the Company concluded that it
was premature to arrive at a final decision on compensation. The provisions of
Section 162(m) would apply to compensation paid to one Company executive.
PERSONNEL AND COMPENSATION COMMITTEE
C. H. Chandler, Chair George Nigh
M. A. Burns J. C. Pfeiffer
V. E. Jordan, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Personnel and Compensation Committee is composed entirely of persons who are
neither employees nor former or current officers of the Company. C. H.
Chandler, M. A. Burns, V. E. Jordan, Jr., George Nigh, and J. C. Pfeiffer are
the members of the Committee. Mr. Jordan is a senior partner of Akin, Gump,
Strauss, Hauer & Feld, which is one of a number of firms which have provided or
will provide legal services to the Company and its subsidiaries.
Mr. Sanford is Chairman of the Board and Chief Executive Officer of Bankers
Trust New York Corporation, on whose Board of Directors and Human Resources
Committee W. R. Howell, the Company's Chairman of the Board and Chief Executive
Officer, serves.
13
<PAGE>
FIVE-YEAR TOTAL STOCKHOLDER RETURN COMPARISON
The following is a line-graph presentation comparing cumulative, five-year
stockholder returns on an indexed basis with the S&P 500 Stock Index and the S&P
500 Retail Index for department stores. A list of these companies follows the
graph below:
<TABLE>
(GRAPH APPEARS HERE)
<CAPTION>
1988 1989 1990 1991 1992 1993
Fiscal Years Ended December 31
<S> <C> <C> <C> <C> <C> <C>
JCPENNEY 100 130 97 117 158 236
S&P 500 100 115 122 156 169 189
S&P DEPT STORES 100 125 123 163 178 202
S&P DEPARTMENT STORES:
JCPenny, Dillards, May, Mercantile, Nordstrom
</TABLE>
The Common Stock prices shown are neither determinative nor indicative of future
performance.
14
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------------------------- -------------------------- ---------------------
Securities
Other Restricted Underlying
Annual Stock Options/ LTIP All Other
Name and Salary Bonus Compensation Award(s) SARs Payouts Compensation
Principal Position Year ($) ($) ($)/(2)/ ($)/(3)/ (#)/(4)/ ($) ($)/(5)/
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Howell, W.R. 1993 691,967 1,048,884 -- -- -- [391,619] 105,771
(Chief Executive 1992 637,528 888,874 95,834 -- 12,000 328,008 56,395
Officer) 1991 582,925 354,273 -- -- 120,000 279,921 52,432
Northam, R.E. 1993 290,118 353,654 368,272 -- -- [135,710] 38,112
(Executive Vice 1992 258,115 289,411 -- -- 3,800 109,763 21,175
President) 1991 247,000 120,721 -- -- 57,000 98,957 20,271
Oesterreicher, J.E. 1993 255,154 314,790 18,671 -- -- [125,396] 32,523
(President, Stores 1992 211,134 242,210/(1)/ 20,853 15,257 14,500 91,616 16,479
and Catalog) 1991 187,051 90,907 -- -- 48,000 70,574 14,265
Tygart, W.B. 1993 244,853 282,989 -- -- -- [114,536] 30,745
(Senior Executive 1992 205,666 225,689/(1)/ -- 8,328 9,300 86,126 16,167
Vice President) 1991 186,942 88,835 -- -- 48,000 70,533 14,368
Prindiville, T.S. 1993 195,144 208,921 44,328 -- -- [79,958] 23,701
(Executive Vice 1992 172,411 169,782 -- -- 3,600 64,221 13,330
President) 1991 164,724 70,708 -- -- 36,000 57,267 12,627
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Does not include $15,257 and $8,328 attributable to incremental stock
awards of 458 and 250 shares of Common Stock granted and vested in 1992
under the Motivational Stock Award Program (see footnote (3) below) to
Messrs. Oesterreicher and Tygart, respectively, which amounts are set forth
in the Restricted Stock Award(s) column. These incremental awards have a
five-year mandatory retention period from the date of vesting and, as a
result, future value realized on these stock award shares may differ from
the value on the date of grant.
(2) Tax benefit rights paid on exercise of certain stock options. No tax
benefit rights have been granted on options since 1987, and cannot be
granted under the Equity Plan.
(3) Due to retention period requirements, future value realized on these stock
award shares may differ from the value on the date of grant reported in
this column. These numbers reflect incremental motivational stock awards
made under the Motivational Stock Award Program ("MSAP") due to promotions
for these individuals in the years shown. The original motivational stock
awards were made in 1987 to key Company executives to retain them during
the Company's relocation from New York to Texas and to motivate them to
increase their efforts on the Company's behalf with respect to its
strategic repositioning. Pursuant to the terms of the MSAP, ability to
issue additional motivational stock awards ended on September 30, 1992.
Stock awards vesting in 1991 have a four-year mandatory retention period
from the date of vesting, and those vesting in 1992 have a five-year
mandatory retention period from the date of vesting. Dividends are paid on
all shares from the date of grant. Messrs. Oesterreicher and Tygart also
received incremental awards as described in footnote (1) above. The
aggregate value of all restricted stock with continuing retention periods
as of January 29, 1994, respectively, is as follows: Mr. Howell $832,104;
Mr. Northam $680,056; Mr. Oesterreicher $647,816; Mr. Tygart $587,288; and
Mr. Prindiville $520,000.
(4) No SARs have been granted since 1987.
(5) Represents Company contributions or allocations on behalf of these
executive officers under the LESOP and the Supplemental Retirement Program
for Management Profit-Sharing Associates, which, for the last fiscal year
were, respectively, as follows: Mr. Howell $13,102 and $92,669; Mr. Northam
$13,102 and $25,010; Mr. Oesterreicher $13,102 and $19,421; Mr. Tygart
$13,102 and $17,643; and Mr. Prindiville $13,102 and $10,599.
15
<PAGE>
AGGREGATE OPTION/SAR EXERCISES AND
FISCAL YEAR-END OPTION/SAR VALUE TABLE
The following table shows stock option exercises by Named Executive Officers
during fiscal 1993, including the aggregate value of gains on the date of
exercise. In addition, this table includes the number of shares covered by both
exercisable and non-exercisable stock options at fiscal year-end. Also reported
are the values for "in-the-money" options which represent the positive spread
between the exercise price of any such existing stock options and the fiscal
1993 year-end price of the Company's Common Stock.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
Shares Acquired Value Exercisable/
Name on Exercise Realized ($)/(1)/ Unexercisable Exercisable/Unexercisable/(2)/
- ------------------------ --------------- ----------------- ----------------------- -------------------------------
<S> <C> <C> <C> <C>
Howell, W.R. 1,477 $ 71,956 165,394 (E) $4,756,220
(Chief Executive 120,000 (U) $2,962,500
Officer)
Northam, R.E. 32,584 $1,052,207 34,672 (E) $ 777,088
(Executive Vice 57,000 (U) $1,407,188
President)
Oesterreicher, J.E. 2,000 $ 53,345 31,856 (E) $ 720,453
(President, Stores and 58,500 (U) $1,185,000
Catalog
Tygart, W.B. -- -- 46,066 (E) $1,235,038
(Senior Executive Vice 52,500 (U) $1,265,015
President)
Prindiville, T.S. 9,801 $ 313,585 20,533 (E) $ 432,065
(Executive Vice 36,000 (U) $ 888,750
President)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Since most shares reported here continue to be held by participants, and
considering certain shares have holding period requirements, the future
value realized on such shares upon actual disposition may differ from the
value reported here on the exercise date.
(2) Value is based on the closing price on the last trading day of the fiscal
year, which, as of January 28, 1994, was $52.00.
16
<PAGE>
LONG-TERM INCENTIVE PLAN AWARDS
The table below represents 1993 payouts under the 1984 Performance Unit Plan
("PUP") and units granted under the Shareholder Value Award Program ("SVA").
The percent of the PUP award earned is based on the Company's performance
against the following indices: (1) average return on equity; (2) average annual
percent increase in earnings per share, as determined by the Committee; and (3)
the performance of a selected group of competitors. The value of each
performance unit, as determined by the Committee, times the number of
performance units yields the annual payout under PUP. (See "Report of Personnel
and Compensation Committee on Executive Compensation - Base Salary and Incentive
Compensation Payments" on pages 11 and 12).
Average ROE and EPS performance will yield the percent of PUP awards earned,
which can range from 0 to 200%. The range of percent of awards earned increases
with improved average ROE and EPS performance. For example, the average ROE and
EPS performance in 1991-93 are 17% and 8.2%, respectively, resulting in an award
range of $1.40 to $1.85 per unit.
The SVA units, which, if earned, will be paid out in restricted stock, vest
depending on the Company's cumulative Total Shareholder Return ("TSR") over a
three-year measurement period relative to the TSR for the S&P 500 Retail Index
for department stores and the S&P 500 Index. Awards will vest, if at all, in
1996.
<TABLE>
<CAPTION>
Estimated Future Payouts
Under Non-Stock Price-Based Plans /(3)/
--------------------------------------------------------
Performance or
Number of Shares, Other Period Until
Units or Other Maturation or Threshold Target Maximum
Name Rights (#) Payout ($ or #) ($) ($)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Howell, W.R. 237,345/(1)/ 1991-1993 $332,283 $385,686 $439,088
(Chief Executive Officer) 4,094/(2)/ 1993-1995 53,222 212,888 425,776
Northam, R.E. 82,249/(1)/ 1991-1993 $115,149 $133,655 $152,161
(Executive Vice 1,945/(2)/ 1993-1995 25,285 101,140 202,280
President)
Oesterreicher, J.E. 75,998/(1)/ 1991-1993 $106,397 $123,497 $140,596
(President, Stores and 2,354/(2)/ 1993-1995 30,602 122,408 244,816
Catalog)
Tygart, W.B. 69,416/(1)/ 1991-1993 $ 97,182 $112,801 $128,420
(Senior Executive Vice 1,945/(2)/ 1993-1995 25,285 101,140 202,280
President)
Prindiville, T.S. 48,459/(1)/ 1991-1993 $ 67,843 $ 78,746 $ 89,649
(Executive Vice 1,228/(2)/ 1993-1995 15,964 63,856 127,712
President)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This number represents the number of PUP performance units granted in fiscal
1993 and is a function of base salary plus profit incentive compensation
valued at one dollar per unit and the individual's PRL.
(2) This number represents the number of SVA units granted in fiscal 1993 and
is based on the individual's PRL.
(3) The amounts shown represent fiscal 1993 award payout ranges for PUP and
theoretical ranges for the SVA unit awards assuming the closing price on the
last trading day of the fiscal year, which, as of January 28, 1994, was
$52.00, and also assuming, for purposes of this table, that all such SVA
units granted vest.
17
<PAGE>
SHAREHOLDER VALUE AWARD PROGRAM. Effective January 31, 1993, the Personnel and
Compensation Committee of the Board of Directors approved the J. C. Penney
Company, Inc. Shareholder Value Award Program as an additional equity incentive
element of the Equity Plan. This Program is intended to encourage and reward
the creation of sustainable stockholder value by providing equity awards which
cause participants to manage the business from the perspective of an owner, with
a personal stake in the Company's long-term growth and profitability.
Participants receive Shareholder Value Awards ("SVAs") which will be paid out
in restricted stock, if and when they vest, depending on the Company's
cumulative Total Shareholder Return ("TSR") over a three-year measurement period
relative to the TSR for the S&P 500 Retail Index for department stores and the
S&P 500 Index. In no case may an SVA vest prior to 1996.
ASSOCIATE STOCK OWNERSHIP GUIDELINES. In 1993, the Company adopted a Stock
Ownership Guidelines Program for certain of its management employees and store
managers. The Guidelines were enacted to further encourage and support a
"stakeholder" mentality among these employees in order to align their interests
with other Company stockholders. Pursuant to the Guidelines, all participants
in the Company's Equity Plan, including store managers, are required to own a
minimum amount of Common Stock based upon a multiple (the "Ownership Multiple")
of their annual base salary. Under the Guidelines, the Ownership Multiples
range from seven times base salary for the CEO to one-half times base salary for
non-officers and store managers. The compliance period for these Guidelines is
five years from the implementation of the Guidelines, or election as officer or
change in status, if later.
RETIREMENT INCOME. The following table shows various estimated maximum
aggregate annual Company-provided retirement incomes payable to management
employees who receive profit incentive compensation and retire at age 60 (the
age at which most management personnel currently voluntarily retire).
18
<PAGE>
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Years of Service
----------------------------------------------------------
Average
Final
Compensation 15 20 25
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
$250,000 $ 87,500 $100,000 $112,500
500,000 175,000 200,000 225,000
750,000 262,500 300,000 337,500
1,000,000 350,000 400,000 450,000
1,250,000 437,500 500,000 562,500
1,500,000 525,000 600,000 675,000
1,750,000 612,500 700,000 787,500
Each additional
$ 50,000 17,500 20,000 22,500
- ---------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Years of Service
----------------------------------------------------------
Average
Final
Compensation 30 35 40
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
$ 250,000 $125,000 $131,250 $137,500
500,000 250,000 262,500 275,000
750,000 375,000 393,750 412,500
1,000,000 500,000 525,000 550,000
1,250,000 625,000 656,250 687,500
1,500,000 750,000 787,500 825,000
1,750,000 875,000 918,750 962,500
Each additional
$ 50,000 25,000 26,250 27,500
- --------------------------------------------------------------------------
</TABLE>
19
<PAGE>
Average Final Compensation for pension formula purposes includes "Salary",
"Bonus", and "LTIP Payouts" as reported under these columns of the Summary
Compensation Table on page 15.
The present annual pension benefit payable after normal retirement (age 60 or
later) to participants in the Company's Pension Plan ("Pension Plan") with
service after December 31, 1988, generally is equal to the sum of .75% times the
"average final compensation" up to the "Average Social Security Wage Base" plus
1.25% times the "average final compensation" in excess of the "Average Social
Security Wage Base" multiplied by the number of years of "credited service".
"Average final compensation" is the average of the highest five consecutive full
calendar years of compensation out of the employee's last ten years in the Plan.
"Average Social Security Wage Base" is the average of the 35 consecutive years
of wages subject to the Social Security Tax, ending with the year an employee
qualifies for unreduced Social Security retirement benefits. The Pension Plan
contains provisions for early retirement and optional forms of benefit payments.
A Supplemental Retirement Program for Management Profit-Sharing Associates
("Supplemental Retirement Program") provides benefits, including Social Security
substitute payments until age 62, to certain management employees, including
executive officers, who voluntarily retire in accordance with the Supplemental
Retirement Program and whose aggregate retirement and estimated Social Security
benefits would otherwise be below specified minimum retirement income levels.
Estimated annual retirement incomes reflected in the table are assumed for
this purpose to comprise the total of (i) the benefit under the Pension Plan,
(ii) the value at retirement of the aggregate of Company contributions made to
the Company's LESOP and predecessor plans, and earnings thereon, and (iii) the
benefit under the Company's Supplemental Retirement Program, assuming the
payment of all such benefits in the form of a straight life annuity. The
Omnibus Budget Reconciliation Act of 1993 limits the amount of annual
compensation which may be taken into account under a "qualified plan" to
$150,000, adjusted for future cost of living increases. Therefore, annual
retirement benefits which exceed Internal Revenue Code limitations for qualified
plans may be paid pursuant to the Supplemental Retirement Program. The
individuals named in the table on page 15 currently have, respectively, the
following years of "credited service" and approximate assumed "average final
compensation" recognized for calculation of benefits under the Supplemental
Retirement Program: Mr. Howell, 35 years, [$2,128,663]; Mr. Northam, 18 years,
[$742,914]; Mr. Oesterreicher, 29 years, [$610,242]; Mr. Tygart, 33 years,
[$577,315]; and Mr. Prindiville, 34 years, [$386,638].
INCREASE OF AUTHORIZED SHARES OF COMMON STOCK (PROPOSAL 2)
The Board of Directors has declared it advisable that the Company's Restated
Certificate of Incorporation, as amended, be amended to increase the authorized
number of shares of Common Stock of the Company of 50c par value from
500,000,000 to 1,250,000,000 and the total authorized shares (including
25,000,000 shares of Preferred Stock of the Company without par value, which
amount was previously authorized and shall remain unchanged) from 525,000,000 to
1,275,000,000. The text of the proposed amendment is set forth as Exhibit A to
this proxy statement.
20
<PAGE>
Of the 500,000,000 shares of Common Stock presently authorized, as of March
21, 1994, [236,032,481] shares were outstanding, [41,700,714] shares were
reserved for issuance pursuant to stock incentive and employee benefit plans,
[9,366] shares were held in the Company's Treasury, and [2,080] shares were
reserved for exchange in connection with previously consummated acquisitions of
other businesses, leaving [222,255,359] shares of Common Stock unreserved and
available for future use. The Company thus has only a limited number of
authorized but unissued shares available for issuance.
The proposed additional shares of Common Stock , if authorized, could be
issued for any proper corporate purpose, including a split of the then
outstanding shares, the sale or contribution to the Company's Savings Plans, in
connection with any employee stock incentive program, the acquisition of other
businesses, or the raising of additional capital for use in the Company's
business. The Board of Directors will make the determinations for future
issuances of authorized shares of Common Stock in the best interests of the
Company, and generally without further action by the stockholders.
The Company does not have any commitment or understanding at this time for
the issuance of any shares of the additional Common Stock. The Board of
Directors believes, however, that the authority to issue such shares will give
the Board the desirable flexibility to issue Common Stock at any time, without
delay, whenever it is in the best interests of the Company. Since the Company
last increased the amount of its authorized Common Stock in 1984, it was able to
effect two two-for-one stock splits. While the Company has no present plans to
split the Common Stock, it wishes to have the ability to do so when such a split
would be in the best interests of all stockholders.
The holders of Common Stock do not presently have pre-emptive rights to
subscribe for any of the Company's securities and will not have any such rights
to subscribe for the additional Common Stock proposed to be authorized.
Subject to such preferences as may be afforded Preferred Stock, holders of
Common Stock will be entitled to receive dividends at such times and in such
amounts as may be determined by the Board of Directors and upon liquidation
will be entitled to share in the remaining assets of the Company in accordance
with their respective interests. Except as provided by law or the resolutions
of the Board of Directors providing for the issue of respective series of
Preferred Stock, the holders of Common Stock will have the exclusive power to
vote and will have one vote per share on each matter submitted to a vote of
stockholders and the authorized shares of any class or classes may be increased
or decreased by the affirmative vote of the holders of a majority of the
outstanding shares of stock of the Company entitled to vote.
The financial statements of the Company as of January 29, 1994 and for the 52
weeks then ended included in the Company's 1993 Annual Report to its
stockholders are incorporated herein by reference.
21
<PAGE>
Of the 25,000,000 shares of Preferred Stock authorized, 1,176,666.7 shares
were issued pursuant to the LESOP, of which 1,082,113.1284 shares are currently
outstanding, the remainder having been converted into Common Stock or cancelled
under the terms of the LESOP, and 1,600,000 shares have been reserved under the
terms of the Rights Agreement adopted in 1990. No further authorization of
shares of Preferred Stock is being requested at this time.
The Board of Directors recommends that the stockholders approve the proposed
increase in authorized shares of Common Stock and total authorized shares and
the proposed amendment to the Company's Restated Certificate of Incorporation,
as amended. Such approval will require the affirmative vote of a majority of
the outstanding shares of Common Stock entitled to vote.
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
APPROVAL OF AUDITORS (PROPOSAL 3)
KPMG Peat Marwick, independent certified public accountants, and members of the
Securities and Exchange Commission Practice Section of the American Institute of
Certified Public Accountants' Division of Certified Public Accounting firms,
have been auditors of the Company's consolidated financial statements since
1916. Their employment for the purpose of auditing the Company's financial
statements for the fiscal year ending January 28, 1995 has been authorized by
the Board, upon the recommendation of the Audit Committee. Stockholder approval
of such employment is requested.
It is anticipated that a representative of KPMG Peat Marwick will attend the
meeting, will be available to respond to appropriate questions, and will have an
opportunity to make a statement should he or she desire so to do.
The total amount paid to KPMG Peat Marwick for all services related to the
fiscal 1993 audit of the Company's consolidated financial statements was
approximately $1,900,000.
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
STOCKHOLDER RESOLUTIONS
The Company has been informed that Evelyn Y. Davis, Watergate Office Building,
2600 Virginia Avenue, N.W., Suite 215, Washington, D.C. 20037, a recordholder
of 100 shares of Common Stock intends to submit a resolution for adoption at the
Annual Meeting, as follows:
22
<PAGE>
STOCKHOLDER RESOLUTION NUMBER ONE (PROPOSAL 4)
RESOLUTION AND REASONS STATED BY SUBMITTING STOCKHOLDER
RESOLVED: "That the shareholders of J. C. Penney recommend that the Board of
Directors take the necessary steps to reinstate the election of directors
ANNUALLY, instead of the stagger system which was recently adopted."
REASONS: "Until recently, directors of J. C. Penney were elected annually by all
shareholders."
"The great majority of New York Stock Exchange listed corporations elect all
their directors each year."
"This insures that ALL directors will be more accountable to ALL shareholders
each year and to a certain extent prevents the self-perpetuation of the Board."
"Last year the owners of 38,471,430 shares representing approximately 29.9% of
shares voting, voted FOR this proposal."
"If you AGREE, please mark your proxy FOR this resolution."
THE BOARD OF DIRECTORS OPPOSES THIS PROPOSAL.
Prior to the 1985 Annual Meeting of Stockholders, directors were elected
annually for a one-year term. At the 1985 meeting, stockholders by a
substantial majority approved amendments to the Company's Restated Certificate
of Incorporation, as amended, and to its By-laws providing, among other things,
that the Board be divided into three classes of directors serving staggered
three-year terms with each class being as nearly equal as possible ("Classified
Board Amendments").
In the proxy statement for that meeting, which contained a detailed
discussion of the reasons for the Board's recommendation, the Board stated that
the overall purpose of the Classified Board Amendments was to assure continuity
and stability in the Company's operations. With a classified Board, it is more
likely that a majority of the directors at any time will have had prior
experience as directors of the Company, thereby facilitating continuity and
planning for the Company's business. The Board believes that the longer time
period required to elect a majority of a classified Board will protect the
interests of stockholders.
The Board continues to hold the view that the reasons set forth in the 1985
proxy statement are valid and that the election of directors by classes should
be continued.
23
<PAGE>
It should be noted that adoption of this proposal would not in itself
"reinstate" the annual election of directors but would simply amount to a
request that the Board take the "necessary steps" to accomplish such
reinstatement.
At the 1993, 1992, 1991, 1990, 1989, and 1988 Annual Meetings of
Stockholders, a stockholder proposal virtually identical to this proposal was
defeated, having received votes of 29.9%, 23.0%, 21.8%, 19.2%, 19.0%, and 19.1%,
respectively, of the outstanding shares entitled to vote on the proposal.
ACCORDINGLY, THE BOARD CONTINUES TO RECOMMEND A VOTE AGAINST THIS PROPOSAL.
The Company has also been informed that the Amalgamated Clothing and Textile
Workers Union, 1808 Swann Street N.W., Second Floor, Washington, D.C. 20009, a
recordholder of 50 shares of Common Stock, intends to submit a resolution for
adoption at the Annual Meeting, as follows:
STOCKHOLDER RESOLUTION NUMBER TWO (PROPOSAL 5)
RESOLUTION AND REASONS STATED BY SUBMITTING STOCKHOLDER
Resolved: The shareholders of J. C. Penney Company, Inc. ("Company") hereby
request the Board of Directors to redeem the Preferred Stock Purchase Rights
issued February 14, 1990 unless said issuance is approved by the affirmative
vote of a majority of the outstanding shares at a meeting of shareholders held
as soon as practical.
This resolution received 40.0% of the vote last year.
In February 1990, the Company's Board of Directors authorized the
distribution of preferred stock purchase rights ("right" or "rights"). These
rights are a type of corporate anti-takeover device commonly known as a poison
pill.
Under its terms, one right was declared for each common share outstanding.
Each right entitles shareholders to purchase, under certain conditions, one two-
hundredth of a share of the Company's Series A Preferred Stock at a purchase
price of $280. The rights will be exercisable only if a person or group
acquires beneficial ownership of 15% or more of the common shares or has
commenced or intends to commence a tender offer upon consummation of which, such
person or group would own 30% or more of the common shares. The Company may
redeem the rights for $.01 per right subject to adjustment.
24
<PAGE>
We believe the terms of the Series A Preferred Stock Purchase Rights are
designed to discourage or thwart an unwanted takeover of our Company. While
management and the Board of Directors should have appropriate tools to ensure
that all shareholders benefit from any proposal to buy the Company, we do not
believe that the future possibility of a takeover justifies the unilateral
implementation of such a poison pill-type device.
We believe that shareholders should have the right to vote on the necessity
of such a powerful tool that could be used to entrench existing management. The
Company already has in place other devices for countering hostile takeover
attempts, including a staggered board of directors.
Rights plans like ours have become increasingly unpopular in recent years.
In 1993, a majority of shareholders at Allergan, Hartmarx and Bowater voted in
favor of proposals asking management to repeal or redeem poison pills.
The effects of poison pill rights plans on the trading value of companies'
stock have been the subject of extensive research. A 1986 study by the Office
of the Chief Economist of the U. S. Securities and Exchange Commission on the
economics of rights plans stated that "The stock-returns evidence suggests that
the effect of poison pills to deter prospective hostile takeover bids outweighs
the beneficial effects that might come from increased bargaining leverage of the
target management." Another more recent 1988 study by Professor Michael Ryngaert
singled out rights plans such as the one authorized by our Company for their
negative effect on shareholder value.
In light of what can best be described as the debatable economic benefit of
our preferred share rights and the undeniably undemocratic way in which they
were assigned to shareholders, we believe these rights should either be redeemed
or voted on.
WE URGE SHAREHOLDERS TO VOTE FOR THIS RESOLUTION.
THE BOARD OF DIRECTORS OPPOSES THIS PROPOSAL.
In February 1990, the Board of Directors unanimously adopted a Rights Agreement
("Rights Plan") and declared a dividend distribution of one Preferred Stock
Purchase Right (collectively, "Rights") on each outstanding share of the
Company's Common Stock. The Rights Plan was established in connection with the
Company's redemption of the rights issued pursuant to its original rights plan
adopted in 1986. The Rights Plan is designed to encourage potential acquirors
to negotiate directly with the Board of Directors, which the Company believes is
in the best position to negotiate on behalf of all stockholders, evaluate the
adequacy of any potential offer, and protect stockholders against potential
abuses during the takeover process, such as partial and two-tiered tender offers
and creeping stock accumulation programs, which do not treat all stockholders
fairly and equally.
25
<PAGE>
The Rights Plan will allow the Board adequate time and flexibility to
negotiate on behalf of the stockholders and enhance the Board's ability to
negotiate the highest possible bid from a potential acquiror, develop
alternatives which may better maximize stockholder values, preserve the long-
term value of the Company for the stockholders, and ensure that all stockholders
are treated fairly and equally. The Rights Plan is not intended to prevent a
takeover on terms that are fair and equitable to all stockholders. The Board of
Directors may, pursuant to the terms of the Rights Plan, redeem the Rights to
permit an acquisition that it determines, in the exercise of its fiduciary
duties, adequately reflects the value of the Company and to be in the best
interests of all stockholders. Moreover, a number of other companies with
existing rights plans have received unsolicited offers and have redeemed their
rights after their directors were satisfied that the offer, as negotiated by the
target company's board of directors, adequately reflected the underlying value
of the company and was fair and equitable to all stockholders. The Board
believes that rather than deterring good-faith negotiations between a potential
acquiror and the Board, the Rights Plan will assist the Board in maximizing the
price paid to stockholders in the event the Company is acquired.
The proponent references two studies regarding the effect of rights plans on
the trading value of the adopting companies' stock. However, March and October
1988 studies by Georgeson & Company, a nationally recognized proxy solicitation
and investor relations firm, found that companies adopting rights plans do not
lessen the value of their stock, and, more importantly, that companies with
rights plans received higher takeover premiums than those companies without
rights plans. The March 1988 Georgeson study concluded that companies with
rights plans received takeover premiums averaging 69% higher than those received
by companies not protected by such plans. Similarly, a March 1993 study by
Robert Comment and G. William Schwert of the Bradley Policy Research Center,
University of Rochester, determined that rights plans do not deter takeovers.
Additionally, Comment and Schwert found that rights plans are associated with
higher takeover premiums for selling stockholders.
The Board specifically examined its fiduciary responsibilities under Delaware
law when it adopted the original rights plan in 1986 and the current Rights
Plan. It is important to note that all but one of the Board's directors have
principal occupations or employment outside of the Company, and that this
preponderance of independent outside directors has consistently been the case
for over fourteen years, thus providing further assurance that the Rights Plan
will not be used for entrenchment purposes. The Board adopted the Rights Plan
with the aim of protecting the interests of all stockholders and maximizing the
value of their investments in the Company. Based on the Board's collective
business experience and knowledge of the Company, it believes that the adoption
of the Rights Plan was a valid exercise of its fiduciary obligations to all
stockholders, and is in accord with the Board's responsibility under Delaware
law to manage and direct the management of the Company's business and affairs.
The Board does not believe that the Rights Plan will deter an acquisition offer
that adequately reflects the underlying value of the Company and that is fair to
all stockholders.
26
<PAGE>
At the 1993 and 1992 Annual Meetings of Stockholders stockholder proposals
virtually identical to this proposal were defeated, having received votes of
34.1% and 31.1%, respectively, of the outstanding shares entitled to vote on the
proposal. Also, substantially similar proposals relating to the original 1986
rights plan were defeated at the 1987 and 1988 Annual Meetings of Stockholders,
receiving votes of only 25.2% and 27.6%, respectively, of the outstanding shares
entitled to vote.
ACCORDINGLY, THE BOARD RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS, NOMINATION
OF DIRECTORS, AND OTHER BUSINESS BY STOCKHOLDERS.
Under the rules of the Securities and Exchange Commission, the date by which
proposals of stockholders intended to be presented at the 1995 Annual Meeting of
Stockholders must be received by the Company for inclusion in its proxy
statement and form of proxy relating to that meeting is December 13, 1994.
Under the Company's By-laws, certain procedures are provided which a
stockholder must follow to nominate persons for election as directors or to
introduce an item of business at an annual meeting of stockholders. These
procedures provide, generally, that stockholders desiring to make nominations
for directors, and/or bring a proper subject of business before the meeting,
must do so by a written notice timely received (not later than 90 days in
advance of such meeting) by the Secretary of the Company containing the name and
address of the stockholder, and a representation that the stockholder is a
holder of record and intends to appear in person or by proxy at the meeting. If
the notice relates to a nomination for director, it must also set forth the name
and address of any nominee(s), all arrangements or understandings between the
stockholder and each nominee, and any other person(s) (naming such person(s))
pursuant to which the nomination(s) are to be made, such other information
regarding each nominee as would have been required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had each nominee been nominated by the Board, and the consent of each
nominee to serve. Notice of an item of business shall include a brief
description of the proposed business and any material interest of the
stockholder in such business.
The chairman of the meeting may refuse to allow the transaction of any
business not presented, or to acknowledge the nomination of any person not made,
in compliance with the foregoing procedures.
27
<PAGE>
Stockholders were advised by a notice to stockholders included with the
February 1, 1994 dividend that any nomination for director and notice of any
such business to be properly brought before the 1994 Annual Meeting had to be
made by stockholders no later than February 19, 1994. It is currently expected
that the 1995 Annual Meeting of Stockholders will be held on or about May 19,
1995, in which event any advance notice of nominations for directors and items
of business (other than proposals intended to be included in the proxy statement
and form of proxy, which as noted above must be received by December 13, 1994)
must be given by stockholders by February 18, 1995. The Company does, however,
retain the right to change this date as it, in its sole discretion, may
determine. Notice of any change will be furnished to stockholders prior to the
expiration of the 90-day advance notice period referred to above. Copies of the
Company's By-laws are available from the Secretary of the Company.
CONFIDENTIAL VOTING
The Company, considering it to be in the best interest of stockholders, has a
policy to the effect that all proxy (voting instruction) cards, ballots, and
vote tabulations which identify the particular vote of a stockholder are to be
kept secret from the Company, its directors, officers, and employees.
Accordingly, proxy cards are returned in envelopes addressed to the tabulator,
which receives and tabulates the proxies. The final tabulation is inspected by
inspectors of election who are independent of the Company, its directors,
officers, or employees. The identity and vote of any stockholder shall not be
disclosed to the Company, its directors, officers, or employees, nor to any
third party except (i) to allow the independent election inspectors to certify
the results of the vote to the Company, its directors, officers, and employees;
(ii) as necessary to meet applicable legal requirements and to assert or defend
claims for or against the Company; (iii) in the event of a proxy solicitation
based on an opposition proxy statement filed, or required to be filed, with the
Securities and Exchange Commission; or (iv) in the event a stockholder has made
a written comment on such material.
OTHER MATTERS
The Board of Directors does not intend to present any other business at the
meeting and knows of no other matters which will be properly presented.
However, if any other matter calling for a vote of stockholders is properly
presented at the meeting, it is the intention of the persons named in the
accompanying proxy to vote in accordance with their judgment on such matters.
C. R. Lotter, Secretary
<PAGE>
EXHIBIT A
PROPOSED AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
The first paragraph of Article FOURTH of the Restated Certificate of
Incorporation, as amended, of J. C. Penney Company, Inc. is hereby amended to
read as follows:
FOURTH: The total number of shares of all classes of stock which the Company
shall have authority to issue is 1,275,000,000 of which 25,000,000 shares shall
be shares of Preferred Stock without par value (hereinafter called Preferred
Stock) and 1,250,000,000 shares shall be shares of Common Stock of 50c par value
(hereinafter called Common Stock).
<PAGE>
APPENDIX
Graphic and Image Material
1. Photographs of nominees for director appear next to their biographies on
pages 5 through 7.
2. Narrative description of performance graphs appear on page 14.
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE
VOTED IN THE MANNER DIRECTED HEREIN. IF NO Please mark
DIRECTION IS MADE, THIS PROXY WILL BE VOTED [ X ] your votes
FOR ELECTION OF ALL DIRECTORS AND FOR as this
PROPOSALS 2 AND 3 AND AGAINST PROPOSALS 4 AND 5.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING
PROPOSALS AS DESCRIBED IN THE PROXY STATEMENT:
- --------------------------------------------------------------------------------
1. Election of Directors (see reverse).
FOR all nominees AUTHORITY WITHHELD
except as noted as to all nominees
[ ] [ ]
2. Approval of Increase in Common and Authorized Shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of Auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE FOLLOWING
PROPOSALS AS DESCRIBED IN THE PROXY STATEMENT:
- --------------------------------------------------------------------------------
4. Stockholder resolution regarding classification of Board.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Stockholder resolution regarding rights dividend.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
PLEASE SIGN AND DATE
Please sign your name exactly as stenciled hereon.
-------------------------------------------------------
SIGNATURE DATE
- -------------------------------------------------------------------------------
J.C. PENNEY COMPANY, INC.
PROXY/VOTING INSTRUCTION CARD
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
TO PARTICIPANTS IN THE JCPENNEY FINANCIAL SERVICES THRIFT
AND INVESTMENT RETIREMENT PLAN.
By properly executing this card on the reverse, you are instructing NationsBank
of Texas, N.A. ("Trustee") to vote, on your behalf, in person or by proxy,
shares of stock held for you in accounts under the JCPenney Financial Services
Thrift and Investment Retirement Plan at the Annual Meeting of Stockholders of
J.C. Penney Company, Inc., to be held at the Company's Home Office, 6501 Legacy
Drive, Plano, Texas 75024-3698, on Friday, May 20, 1994, at 10:00 A.M., local
time, and at any adjournment or postponement thereof, upon such business as
may come before the meeting, including the items set forth on the reverse.
THE TRUSTEE HAS INDICATED ITS INTENT TO VOTE THE SHARES REPRESENTED HEREBY
(A) IF AN INSTRUCTION CARD IS EXECUTED BY YOU AND RECEIVED BY MAY 17, 1994, IN
ACCORDANCE WITH THE DIRECTIONS ON THE REVERSE AND (B) IF NO SUCH INSTRUCTION
CARD IS SO RECEIVED, FOR ELECTION OF ALL DIRECTORS AND FOR PROPOSALS 2 AND 3
AND AGAINST PROPOSALS 4 AND 5.
For your information, a copy of the Board of Directors' Proxy Statement for
the meeting is enclosed herewith.
Nominees for Election of Directors for the term set forth in the Proxy
Statement are V.E. Jordan, Jr., J.C. Pfeiffer, and A.K. Pye. TO WITHHOLD
AUTHORITY TO VOTE FOR ANY NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE
PROVIDED ON THE REVERSE.
Your instructions as to your shares of stock are important and cannot be
followed by the Trustee unless this card is properly executed by you and
received by the Trustee by MAY 17, 1994. Therefore, please sign, date and
return this card promptly in the envelope provided. No postage is required if
this envelope is mailed in the United States.
(Continued on reverse side)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE
VOTED IN THE MANNER DIRECTED HEREIN. IF NO Please mark
DIRECTION IS MADE, THIS PROXY WILL BE VOTED [ X ] your votes
FOR ELECTION OF ALL DIRECTORS AND FOR as this
PROPOSALS 2 AND 3 AND AGAINST PROPOSALS 4 AND 5.
------------------- -------------------
SAVINGS PLAN LESOP
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING
PROPOSALS AS DESCRIBED IN THE PROXY STATEMENT:
- --------------------------------------------------------------------------------
1. Election of Directors (see reverse).
FOR all nominees AUTHORITY WITHHELD
except as noted as to all nominees
[ ] [ ]
2. Approval of Increase in Common and Authorized Shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of Auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE FOLLOWING
PROPOSALS AS DESCRIBED IN THE PROXY STATEMENT:
- --------------------------------------------------------------------------------
4. Stockholder resolution regarding classification of Board.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Stockholder resolution regarding rights dividend.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
PLEASE SIGN AND DATE
Please sign your name exactly as stenciled hereon.
-------------------------------------------------------
SIGNATURE DATE
- -------------------------------------------------------------------------------
J.C. PENNEY COMPANY, INC.
PROXY/VOTING INSTRUCTION CARD
ALLOCATED STOCK
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
TO PARTICIPANTS IN THE COMPANY'S SAVINGS AND PROFIT-SHARING RETIREMENT PLAN
("SAVINGS PLAN") AND THE COMPANY'S SAVINGS, PROFIT-SHARING AND STOCK OWNERSHIP
PLAN ("LESOP"; TOGETHER, "PLANS"):
BY PROPERLY EXECUTING THIS CARD ON THE REVERSE, YOU ARE INSTRUCTING STATE
STREET BANK AND TRUST COMPANY ("TRUSTEE") TO VOTE ON YOUR BEHALF, IN
ACCORDANCE WITH YOUR INSTRUCTIONS, IN PERSON OR BY PROXY, SHARES OF VOTING
STOCK HELD FOR YOU IN ACCOUNTS UNDER THE PLANS ("ALLOCATED STOCK"), AT THE
ANNUAL MEETING OF COMPANY STOCKHOLDERS, TO BE HELD AT THE COMPANY'S HOME
OFFICE, 6501 LEGACY DRIVE, PLANO, TEXAS 75024-3698 ON FRIDAY, MAY 20, 1994,
AT 10:00 A.M., LOCAL TIME, AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF,
UPON SUCH BUSINESS AS MAY COME BEFORE THE MEETING, INCLUDING THE ITEMS SET
FORTH ON THE REVERSE. IF THIS PROXY/VOTING INSTRUCTION CARD IS NOT RECEIVED BY
THE TRUSTEE BY MAY 17, 1994, YOUR ALLOCATED STOCK WILL BE VOTED IN THE SAME
PROPORTION AS INSTRUCTIONS RECEIVED BY THE TRUSTEE BY THAT DATE FROM THE
PLANS' PARTICIPANTS WHO HAVE TIMELY RETURNED THEIR UNALLOCATED/UNDIRECTED
PROXY/VOTING INSTRUCTION CARDS.
For your information, a copy of the Board of Directors' Proxy Statement for
the meeting is enclosed herewith.
Nominees for Election of Directors for the term set forth in the Proxy
Statement are V.E. Jordan, Jr., J.C. Pfeiffer, and A.K. Pye. TO WITHHOLD
AUTHORITY TO VOTE FOR ANY NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE
PROVIDED ON THE REVERSE.
Your instructions as to your Allocated Stock are important and cannot be
followed by the Trustee unless this card is properly executed by you and
received by the Trustee by MAY 17, 1994. Therefore, please sign, date, and
return this card promptly in the envelope provided. No postage is required if
this envelope is mailed in the United States.
(Continued on reverse side)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE
VOTED IN THE MANNER DIRECTED HEREIN. IF NO Please mark
DIRECTION IS MADE, THIS PROXY WILL BE VOTED [ X ] your votes
FOR ELECTION OF ALL DIRECTORS AND FOR as this
PROPOSALS 2 AND 3 AND AGAINST PROPOSALS 4 AND 5.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING
PROPOSALS AS DESCRIBED IN THE PROXY STATEMENT:
- --------------------------------------------------------------------------------
1. Election of Directors (see reverse).
FOR all nominees AUTHORITY WITHHELD
except as noted as to all nominees
[ ] [ ]
2. Approval of Increase in Common and Authorized Shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of Auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE FOLLOWING
PROPOSALS AS DESCRIBED IN THE PROXY STATEMENT:
- --------------------------------------------------------------------------------
4. Stockholder resolution regarding classification of Board.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Stockholder resolution regarding rights dividend.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
PLEASE SIGN AND DATE
Please sign your name exactly as stenciled hereon.
-------------------------------------------------------
SIGNATURE DATE
- -------------------------------------------------------------------------------
J.C. PENNEY COMPANY, INC.
PROXY/VOTING INSTRUCTION CARD
UNALLOCATED AND UNDIRECTED STOCK
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
TO PARTICIPANTS IN THE COMPANY'S SAVINGS AND PROFIT-SHARING RETIREMENT PLAN
("SAVINGS PLAN") AND THE COMPANY'S SAVINGS, PROFIT-SHARING AND STOCK OWNERSHIP
PLAN ("LESOP"; TOGETHER, "PLANS"):
BY PROPERLY EXECUTING THIS CARD ON THE REVERSE, YOU ARE INSTRUCTING STATE
STREET BANK AND TRUST COMPANY ("TRUSTEE") TO VOTE, IN PERSON OR BY PROXY,
SHARES OF VOTING STOCK HELD UNDER THE PLANS (I) NOT YET ALLOCATED TO THE
ACCOUNTS OF PLANS' PARTICIPANTS ("UNALLOCATED STOCK") AND (II) ALLOCATED TO
THE ACCOUNTS OF PLANS' PARTICIPANTS FROM WHOM AN EXECUTED PROXY/VOTING
INSTRUCTION CARD IS NOT RECEIVED BY THE TRUSTEE BY MAY 17, 1994 ("UNDIRECTED
STOCK"), AT THE ANNUAL MEETING OF COMPANY STOCKHOLDERS, TO BE HELD AT THE
COMPANY'S HOME OFFICE, 6501 LEGACY DRIVE, PLANO, TEXAS 75024-3698, ON FRIDAY,
MAY 20, 1994, AT 10:00 A.M., LOCAL TIME, AND AT ANY ADJOURNMENT OR
POSTPONEMENT THEREOF, UPON SUCH BUSINESS AS MAY COME BEFORE THE MEETING,
INCLUDING THE ITEMS SET FORTH ON THE REVERSE. UNDIRECTED STOCK AND UNALLOCATED
STOCK WILL BE VOTED IN THE SAME PROPORTION AS INSTRUCTIONS RECEIVED BY THE
TRUSTEE BY MAY 17, 1994 FROM THE PLANS' PARTICIPANTS WHO RETURN THIS
PROXY/VOTING INSTRUCTION CARD.
For your information, a copy of the Board of Directors' Proxy Statement for
the meeting is enclosed herewith.
Nominees for Election of Directors for the term set forth in the Proxy
Statement are V.E. Jordan, Jr., J.C. Pfeiffer, and A.K. Pye. TO WITHHOLD
AUTHORITY TO VOTE FOR ANY NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE
PROVIDED ON THE REVERSE.
Your instructions as to Unallocated Stock and Undirected Stock are important
and cannot be followed by the Trustee unless this card is properly executed by
you and received by the Trustee by MAY 17, 1994. Therefore, please sign, date,
and return this card promptly in the envelope provided. No postage is required
if this envelope is mailed in the United States.
(Continued on reverse side)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE
VOTED IN THE MANNER DIRECTED HEREIN. IF NO Please mark
DIRECTION IS MADE, THIS PROXY WILL BE VOTED [ X ] your votes
FOR ELECTION OF ALL DIRECTORS AND FOR as this
PROPOSALS 2 AND 3 AND AGAINST PROPOSALS 4 AND 5.
------------------- -------------------
COMMON DRIP
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING
PROPOSALS AS DESCRIBED IN THE PROXY STATEMENT:
- --------------------------------------------------------------------------------
1. Election of Directors (see reverse).
FOR all nominees AUTHORITY WITHHELD
except as noted as to all nominees
[ ] [ ]
2. Approval of Increase in Common and Authorized Shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of Auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE FOLLOWING
PROPOSALS AS DESCRIBED IN THE PROXY STATEMENT:
- --------------------------------------------------------------------------------
4. Stockholder resolution regarding classification of Board.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Stockholder resolution regarding rights dividend.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
I/we plan to attend the meeting [ ]
PLEASE SIGN AND DATE
Please sign your name or names exactly as stenciled
hereon. For a joint account, each joint owner should
sign. Persons signing in a representative capacity
should indicate their capacity.
-------------------------------------------------------
SIGNATURE DATE
-------------------------------------------------------
SIGNATURE DATE
- -------------------------------------------------------------------------------
J.C. PENNEY COMPANY, INC.
PROXY/VOTING INSTRUCTION CARD
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
By properly executing this card on the reverse, you are authorizing M.A.
Burns, W.R. Howell, Boris Yavitz, or any one of them, with power of
substitution in each, to represent and vote the stock owned of record which
you are entitled to vote at the Annual Meeting of Stockholders, to be held at
the Company's Home Office, 6501 Legacy Drive, Plano, Texas 75024-3698, on
Friday, May 20, 1994, at 10:00 A.M., local time, and at any adjournment or
postponement thereof ("Meeting"), upon such business as may come before the
Meeting, including the items set forth on the reverse ("Business").
AS DESCRIBED ON PAGE 1 OF THE PROXY STATEMENT, THIS CARD ALSO PROVIDES VOTING
INSTRUCTIONS AT SUCH MEETING FOR CHEMICAL BANK ("AGENT") FOR SUCH BUSINESS FOR
PARTICIPANTS IN THE COMPANY'S DIVIDEND REINVESTMENT PLAN ("DRIP") BOTH FOR
COMMON STOCK (IF ANY) ALLOCATED TO YOUR ACCOUNTS AND FOR COMMON STOCK
ALLOCATED TO OTHER DRIP PARTICIPANTS' ACCOUNTS FOR WHICH VOTING INSTRUCTIONS
ARE NOT RECEIVED BY MAY 17, 1994 ("UNDIRECTED STOCK"). IF THIS VOTING
INSTRUCTION CARD IS EXECUTED AND RECEIVED BY MAY 17, 1994, THE AGENT WILL VOTE
AS FOLLOWS: (A) FOR COMMON STOCK ALLOCATED TO THE UNDERSIGNED'S ACCOUNTS, IN
ACCORDANCE WITH THE INSTRUCTIONS HEREIN AND (B) FOR UNDIRECTED STOCK, IN THE
SAME PROPORTION AS ALL COMMON STOCK ALLOCATED TO ACCOUNTS FOR WHICH
INSTRUCTION CARDS RECEIVED BY MAY 17, 1994 HAS BEEN VOTED.
Nominees for Election of Directors for the term set forth in the Proxy
Statement are V.E. Jordan, Jr., J.C. Pfeiffer, and A.K. Pye. TO WITHHOLD
AUTHORITY TO VOTE FOR ANY NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE
PROVIDED ON THE REVERSE.
Your vote is important and cannot be recorded by the proxies or Agent unless
this card is properly executed by you and returned. Therefore, please sign,
date and return this card promptly in the envelope provided. No postage is
required if this envelope is mailed in the United States.
(Continued on reverse side)
