<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:
[_] Preliminary Proxy Statement
[X] 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>
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,
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
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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 Insert sig
April 12, 1994 C. R. Lotter, Secretary
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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 Divi-
dend Reinvestment Plan ("DRIP"). Such voting instructions are intended to
cover Common Stock allocated to accounts of DRIP participants from whom an ex-
ecuted voting instruction card is received by the Agent by May 17, 1994
("Voted Stock") and Common Stock allocated to the accounts of DRIP partici-
pants 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. Sep-
arate 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 Com-
pany may solicit proxies
1
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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 Com-
pany 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 ap-
proximate date on which this proxy statement and the form of proxy were first
sent or given to stockholders was April 12, 1994.
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, 236,591,970 shares of Common Stock, and 1,075,706
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 258,106,090 shares ("Voting Stock"), were outstand-
ing and entitled to vote.
On that date, a trust maintained under the Company's Savings Plan held
29,692,666 shares of Common Stock representing approximately 11.50% of the Vot-
ing Stock, and a trust maintained under the LESOP held 1,075,706 shares of ESOP
Preferred Stock and 6,449,516 shares of Common Stock, representing approxi-
mately 10.83% of the Voting Stock. The holdings of both Plans represent approx-
imately 22.33% 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.
2
<PAGE>
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 Com-
pany. 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 4 through 6 and are composed entirely of directors who are not employ-
ees of the Company. One of these committees, the Committee on Directors, se-
lects 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 delib-
erations of the Board. Stockholders also may make recommendations of nominees
for director to the Committee on Directors, as explained in greater detail on
pages 38 and 39.
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 39.
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 Com-
pensation, which begins on page 15.
CLASSES OF BOARD OF DIRECTORS. The Company's Restated Certificate of Incorpora-
tion 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
3
<PAGE>
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 di-
rectors. 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. At-
tendance 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 commit-
tees 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 follow-
ing:
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 Com-
mittee 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 mat-
ters, 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.
4
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BENEFIT PLANS REVIEW COMMITTEE. This Committee's responsibilities include re-
viewing 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 re-
sults, 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, candi-
dates for election as directors, and the compensation of directors.
During fiscal 1993, this Committee met two times. Its members are C. H. Chan-
dler, 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 pro-
cedures described below on pages 38 and 39.
PERSONNEL AND COMPENSATION COMMITTEE. This Committee's responsibilities include
reviewing the Company's annual and long-term incentive compensation plans, mak-
ing recommendations in areas concerning personnel relations, and taking action
or making recommendations with respect to the compensation of executive offi-
cers, including those who are directors. It is also the committee which admin-
isters 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 so-
cial and environmental trends, community affairs, and public policy issues
which
5
<PAGE>
may have a potential impact on the business performance and investment charac-
ter 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 pub-
lic 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, Secre-
tary, J. C. Penney Company, Inc., P. O. Box 10001, Dallas, Texas 75301-1109.
ELECTION OF DIRECTORS (PROPOSAL 1)
As indicated on pages 3 and 4, 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 di-
rectors 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 7 through 11. 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 Stock-
holders, except where authority so to vote is withheld. If any nominees should
become unavailable for election for any presently unforeseen reason, the per-
sons designated as proxies will have full discretion to cast votes for another
person designated by the Board, unless the Board reduces the number of direc-
tors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR
DIRECTOR.
6
<PAGE>
NOMINEES FOR DIRECTORS FOR
THREE-YEAR TERM EXPIRING 1997
(PHOTO OF VERNON E. JORDAN, JR., 58
VERNON E. JORDAN, JR. Senior Partner, law firm of Akin, Gump, Strauss, Hauer
APPEARS HERE) & 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, Bank-
ers Trust New York Corporation, Corning Glass Works,
Dow Jones & Company, Inc., Revlon Group, Inc., RJR Na-
bisco, Inc., Ryder System, Inc., Sara Lee Corporation,
Union Carbide Corporation, and Xerox Corporation. A
trustee of the Brookings Institution, The Ford Founda-
tion, the Joint Center for Political and Economic
Studies; and Chairman of the National Academy Founda-
tion. Director of the Company since 1973.
(PHOTO OF JANE C. PFEIFFER, 61
JANE C. PFEIFFER Independent management consultant. Chairman of the
APPEARS HERE) Board of National Broadcasting Company, Inc. from 1978
to 1980. Independent management consultant from 1976
to 1978. Vice President of Communications and Govern-
ment Relations of International Business Machines Cor-
poration from 1972 to 1976. Also, a director of
Ashland Oil, Inc., International Paper Company, The
Mutual Life Insurance Company of New York, and Over-
seas Development Council. A trustee of The Conference
Board and of the University of Notre Dame. Director of
the Company since 1977.
7
<PAGE>
(PHOTO OF A. KENNETH PYE, 62
A. KENNETH PYE President of Southern Methodist University since 1987.
APPEARS HERE) Associated with Duke University from 1966 to 1987, in-
cluding 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 di-
rector 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 Dis-
trict 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.
8
<PAGE>
MEMBERS OF BOARD OF DIRECTORS
CONTINUING IN OFFICE
TERM EXPIRING 1995
M. ANTHONY BURNS, 51
(PHOTO OF Chairman, President and Chief Executive Officer of Ry-
M. ANTHONY BURNS der System, Inc. (a transportation services company)
APPEARS HERE) since 1985, with which he has served in positions of
increasing importance since 1974, including its Presi-
dent 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 Cor-
poration, Pfizer, Inc., a member of the Board of Gov-
ernors 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.
(PHOTO OF COLBY H. CHANDLER, 68
COLBY H. CHANDLER Formerly Chairman and Chief Executive Officer of East-
APPEARS HERE) man Kodak Company from 1983 to 1990 and its President
from 1977 to 1983. Associated with Eastman Kodak Com-
pany since 1950 and a director from 1974 to 1993. Al-
so, a director of Citicorp, Digital Equipment Corpora-
tion, Ford Motor Company, and M.I.T. Corporation. A
trustee of the International Museum of Photography at
George Eastman House, Rochester Institute of Technolo-
gy, and the University of Rochester. Director of the
Company since 1983.
9
<PAGE>
(PHOTO OF CHARLES S. SANFORD, JR., 57
CHARLES S. Chairman of Bankers Trust New York Corporation and its
SANFORD, JR. principal subsidiary, Bankers Trust Company, since
APPEARS HERE) 1987, with which he has served in positions of in-
creasing 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.
10
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MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING 1996
(PHOTO OF WILLIAM R. HOWELL, 58
WILLIAM R. HOWELL Chairman of the Board and Chief Executive Officer of
APPEARS HERE) 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 Fed-
eration, and Warner-Lambert Company. A trustee of the
National Urban League. Director of the Company since
1981.
(PHOTO OF GEORGE NIGH, 66
GEORGE NIGH President of the University of Central Oklahoma since
APPEARS HERE) 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.
(PHOTO OF JOSEPH D. WILLIAMS, 67
JOSEPH D. WILLIAMS Retired Chairman and Chief Executive Officer of Warn-
APPEARS HERE) er-Lambert Company (pharmaceuticals, health care, and
consumer products) from 1985 to 1991, with which and
with a related company he served in positions of in-
creasing importance since 1950, including its Presi-
dent 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 Ne-
gro College Fund. Director of the Company since 1985.
11
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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 Ex-
ecutive Officers"), and by all present directors and all executive officers of
the Company as a group. The information includes shares held under certain re-
strictions 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 of-
ficers, 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 attribut-
able to unexercised and unexpired options for Common Stock. The combined bene-
ficial ownership of shares of Common Stock and Common Stock voting equivalents
of each director and Named Executive Officer and of all directors and execu-
tive 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 Number
attributable attributable
to unexercised to options
Number and unexpired exercisable
of shares options for within
beneficially Common 60 days of
Name or Group owned Stock March 21, 1994
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Directors:
M. A. Burns 8,400 6,400 6,400
C. H. Chandler 20,400 6,400 6,400
W. R. Howell 447,505 297,694 277,694
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 161,377 101,172 91,672
J. E. Oesterreicher 150,231 101,856 90,356
W. B. Tygart 164,589 104,218 94,718
T. S. Prindiville 109,037 62,533 56,533
All present directors and executive
officers as a group 1,559,421 967,859 882,579
- -------------------------------------------------------------------------------
</TABLE>
* Excludes 4,028,095 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.
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DIRECTORS' FEES
Company employees are not paid additional amounts for serving as directors. Di-
rectors 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 Au-
dit 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 at-
tend in their official capacities as directors. Directors who are Representa-
tives 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 Repre-
sentatives 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 an-
nual 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 Eq-
uity Compensa-
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tion 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 termi-
nation. 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 cov-
ered 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, termina-
tion 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 12.
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 direc-
tors and the Company in supporting worthy charitable and educational institu-
tions. In addition, it enhances the Company's ability to attract and retain di-
rectors 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 sec-
ond 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 charita-
14
<PAGE>
ble 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 Pro-
gram. 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 ("Commit-
tee"), 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 Com-
pany and the executive officers, the Committee determines and approves the an-
nual salaries of these officers and recommends to the full Board for its ap-
proval the annual salary of the Company's Chairman of the Board and Chief Exec-
utive 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 carry-
ing 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 rep-
resentative 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 com-
pensation 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 be-
lieves 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 stock-
15
<PAGE>
holder value. This is accomplished through a total compensation package con-
sisting of base salary supplemented with (1) annual profit incentive compensa-
tion and (2) long-term incentive compensation of both cash and stock. (See
"Summary Compensation Table" on page 22.) 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 exec-
utive officer level, base salary is low by industry standards. Rather, emphasis
is placed upon incentive compensation tied to Company performance. In determin-
ing base salary, consideration is given to the following factors: responsibili-
ties 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 re-
views 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
16
<PAGE>
of each unit is determined by the Committee and is based on the Company's per-
formance against two factors: total revenues as measured against the Company's
goal for the year (weighted at approximately 26% in 1993), and primary earnings
per share for the current year as measured against primary earnings per share
for the preceding year (weighted at approximately 74% in 1993). For certain of-
ficers, including certain executive officers, a portion of their Incentive Pro-
gram 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 Incen-
tive 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
ranges at specified ROE/EPS performance combinations. While there is no spe-
cific 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 25.)
Currently, the combined payments from these two incentive programs account for
from 39% to 68% of the Named Executive Officers' total cash compensation, de-
pending on the Company's sales and earnings performance and the executive's
PRL.
17
<PAGE>
EQUITY AWARDS. The stock or equity portion of the Company's compensation pack-
age 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 12 and 27) 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 $55.313 per share. Addition-
ally, shareholder value award units were granted on February 1, 1993 and Febru-
ary 1, 1994 (see page 27).
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 pre-
viously, 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 $1.80
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 $3.79 (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.
18
<PAGE>
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 officers, as discussed in the preceding paragraphs. No unique
evaluation factors are utilized with respect to determining the CEO's compensa-
tion. 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 Inter-
nal 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.
19
<PAGE>
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. Jor-
dan 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 Com-
pany and its subsidiaries.
Mr. Sanford is Chairman of the Board and Chief Executive Officer of Bankers
Trust New York Corporation. W. R. Howell, the Company's Chairman of the Board
and Chief Executive Officer, serves on the Board of Directors and Human Re-
sources Committee of Bankers Trust New York Corporation.
20
<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:
(GRAPH APPEARS HERE)
<TABLE>
<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:
JcPenney, Dillards, May Mercantile, Nordstrom
</TABLE>
The Common Stock prices shown are neither determinative nor indicative of fu-
ture performance.
21
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
-----------------------------
Annual Compensation Awards Payouts
---------------------------------- --------------------- -------
Securities
Other Restricted Underlying
Annual Stock Options/ LTIP All Other
Salary Bonus Compensation Award(s) SARs Payouts Compensation
Name and 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 -- -- -- 427,221 105,771
(Chief Executive Offi-
cer) 1992 637,528 888,874 95,834 -- 12,000 328,008 56,395
1991 582,925 354,273 -- -- 120,000 279,921 52,432
Northam, R.E. 1993 290,118 353,654 368,272 -- -- 148,047 38,112
(Executive Vice Presi-
dent) 1992 258,115 289,411 -- -- 3,800 109,763 21,175
1991 247,000 120,721 -- -- 57,000 98,957 20,271
Oesterreicher, J.E. 1993 255,154 314,790 18,671 -- -- 136,796 32,523
(President, Stores and
Catalog) 1992 211,134 242,210 (1) 20,853 15,257 14,500 91,616 16,479
1991 187,051 90,907 -- -- 48,000 70,574 14,265
Tygart, W.B. 1993 244,853 282,989 -- -- -- 124,949 30,745
(Senior Executive Vice
President) 1992 205,666 225,689 (1) -- 8,328 9,300 86,126 16,167
1991 186,942 88,835 -- -- 48,000 70,533 14,368
Prindiville, T.S. 1993 195,144 208,921 44,328 -- -- 87,226 23,701
(Executive Vice Presi-
dent) 1992 172,411 169,782 -- -- 3,600 64,221 13,330
1991 164,724 70,708 -- -- 36,000 57,267 12,627
</TABLE>
- --------------------------------------------------------------------------------
22
<PAGE>
(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 bene-
fit 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 strate-
gic repositioning. Pursuant to the terms of the MSAP, ability to issue ad-
ditional 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 re-
ceived incremental awards as described in footnote (1) above. The aggre-
gate 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 execu-
tive 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 $10,599.
23
<PAGE>
AGGREGATE OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
The following table shows stock option exercises by Named Executive Officers
during fiscal 1993, including the aggregate value of gains on the date of ex-
ercise. In addition, this table includes the number of shares covered by both
exercisable and non-exercisable stock options at fiscal year-end. Also re-
ported are the values for "in-the-money" options which represent the positive
spread between the exercise price of any such existing stock options and the
fiscal 1993 year-end price of the Company's Common Stock.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized ($)(1) Unexercisable Unexercisable(2)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Howell, W.R. 1,477 $ 71,956 165,394 (E) $4,756,220
(Chief Executive Offi-
cer) 120,000 (U) $2,962,500
Northam, R.E. 32,584 $1,052,207 34,672 (E) $ 777,088
(Executive Vice Presi-
dent) 57,000 (U) $1,407,188
Oesterreicher, J.E. 2,000 $ 53,345 31,856 (E) $ 720,453
(President, Stores and
Catalog) 58,500 (U) $1,185,000
Tygart, W.B. -- -- 46,066 (E) $1,235,038
(Senior Executive Vice
President) 52,500 (U) $1,265,015
Prindiville, T.S. 9,801 $ 313,585 20,533 (E) $ 432,065
(Executive Vice Presi-
dent) 36,000 (U) $ 888,750
</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.
24
<PAGE>
LONG-TERM INCENTIVE PLAN AWARDS
The table on page 26 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 perfor-
mance 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 perfor-
mance 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 16 and 17).
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 in-
creases with improved average ROE and EPS performance. For example, the aver-
age ROE and EPS performance in 1991-93 are 17% and 8.3%, respectively, result-
ing in an award range of $1.40 to $1.85 per unit.
The SVA units, which, if earned, will be paid out in restricted stock, vest
depending on the Company's cumulative Total Shareholder Return ("TSR") over a
three-year measurement period relative to the TSR for the S&P 500 Retail Index
for department stores and the S&P 500 Index. Awards will vest, if at all, in
1996.
25
<PAGE>
<TABLE>
<CAPTION>
Estimated Future Payouts
Under Non-Stock Price-
Based Plans (3)
---------------------------
Performance or
Number of Shares, Other Period Until
Units or Other Maturation or Threshold Target Maximum
Name Rights (#) Payout ($ or #) ($) ($)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Howell, W.R. 237,345 (1) 1991-1993 $332,283 $385,686 $439,088
(Chief Executive Offi-
cer) 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 Presi-
dent) 1,945 (2) 1993-1995 25,285 101,140 202,280
Oesterreicher, J.E. 75,998 (1) 1991-1993 $106,397 $123,497 $140,596
(President, Stores and
Catalog) 2,354 (2) 1993-1995 30,602 122,408 244,816
Tygart, W.B. 69,416 (1) 1991-1993 $ 97,182 $112,801 $128,420
(Senior Executive Vice
President) 1,945 (2) 1993-1995 25,285 101,140 202,280
Prindiville, T.S. 48,459 (1) 1991-1993 $ 67,843 $ 78,746 $ 89,649
(Executive Vice Presi-
dent) 1,228 (2) 1993-1995 15,964 63,856 127,712
</TABLE>
- -------------------------------------------------------------------------------
(1) This number represents the number of PUP performance units granted in fis-
cal 1993 and is a function of base salary plus profit incentive compensa-
tion 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.
26
<PAGE>
SHAREHOLDER VALUE AWARD PROGRAM. Effective January 31, 1993, the Personnel and
Compensation Committee of the Board of Directors approved the J. C. Penney Com-
pany, 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 cumula-
tive Total Shareholder Return ("TSR") over a three-year measurement period rel-
ative 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 Own-
ership 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 aggre-
gate 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).
27
<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
- -------------------------------------------
<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>
Average Final Compensation for pension formula purposes includes "Salary",
"Bonus", and "LTIP Payouts" as reported under these columns of the Summary Com-
pensation Table on page 22.
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 So-
cial Security Wage Base" multiplied by the number of years of "credited serv-
ice." "Average final compensation" is the average of the highest five consecu-
tive full calendar years of compensation
28
<PAGE>
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 Secu-
rity substitute payments until age 62, to certain management employees, includ-
ing executive officers, who voluntarily retire in accordance with the Supple-
mental 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 pay-
ment 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 22 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, $2,140,530; Mr. Northam, 18 years, $747,026; Mr. Oesterreicher, 29
years, $614,042; Mr. Tygart, 33 years, $580,786; and Mr. Prindiville, 34 years,
$389,060.
29
<PAGE>
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 autho-
rized 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.
Of the 500,000,000 shares of Common Stock presently authorized, as of March
21, 1994, 236,591,970 shares were outstanding, 41,123,546 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 busi-
nesses leaving 222,273,038 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 is-
sued for any proper corporate purpose, including a split of the then outstand-
ing shares, the sale or contribution to the Company's Savings Plans, in con-
nection 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 issu-
ances of authorized shares of Common Stock in the best interests of the Compa-
ny, 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 Direc-
tors believes, however, that the authority to issue such shares will give the
Board the desirable flexibility to issue Common Stock at any time, without de-
lay, 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
30
<PAGE>
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 sub-
scribe 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 Pre-
ferred 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 stock-
holders, 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 outstand-
ing 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 stockhold-
ers are incorporated herein by reference.
Of the 25,000,000 shares of Preferred Stock authorized, 1,176,666.7 shares
were issued pursuant to the LESOP, of which 1,075,705.8784 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
31
<PAGE>
affirmative vote of a majority of the outstanding shares of Common Stock enti-
tled 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 ap-
proximately $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:
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
32
<PAGE>
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 annu-
ally for a one-year term. At the 1985 meeting, stockholders by a substantial
majority approved amendments to the Company's Restated Certificate of Incorpo-
ration, 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 over-
all 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 experi-
ence as directors of the Company, thereby facilitating continuity and planning
for the Company's business. The Board believes that the longer time period re-
quired 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.
It should be noted that adoption of this proposal would not in itself "rein-
state" the annual election of directors but
33
<PAGE>
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, hav-
ing received votes of 29.9%, 23.0%, 21.8%, 19.2%, 19.0%, and 19.1%, respective-
ly, 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 re-
quest the Board of Directors to redeem the Preferred Stock Purchase Rights is-
sued 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 pur-
chase price of $280. The rights will be exercisable only if a person or group
acquires beneficial ownership of 15% or
34
<PAGE>
more of the common shares or has commenced or intends to commence a tender of-
fer 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.
We believe the terms of the Series A Preferred Stock Purchase Rights are de-
signed to discourage or thwart an unwanted takeover of our Company. While man-
agement 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 be-
lieve that the future possibility of a takeover justifies the unilateral imple-
mentation 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 at-
tempts, 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 fa-
vor 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 re-
deemed or voted on.
WE URGE SHAREHOLDERS TO VOTE FOR THIS RESOLUTION.
35
<PAGE>
THE BOARD OF DIRECTORS OPPOSES THIS PROPOSAL.
In February 1990, the Board of Directors unanimously adopted a Rights Agree-
ment ("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 poten-
tial abuses during the takeover process, such as partial and two-tiered tender
offers and creeping stock accumulation programs, which do not treat all stock-
holders fairly and equally.
The Rights Plan will allow the Board adequate time and flexibility to negoti-
ate 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, ade-
quately 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
36
<PAGE>
companies' stock. However, March and October 1988 studies by Georgeson & Compa-
ny, 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, deter-
mined 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 pre-
ponderance 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.
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 Stock-
holders, receiving votes of
37
<PAGE>
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 stock-
holder must follow to nominate persons for election as directors or to intro-
duce an item of business at an annual meeting of stockholders. These procedures
provide, generally, that stockholders desiring to make nominations for direc-
tors, 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 re-
lates 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 busi-
ness not presented, or to acknowledge
38
<PAGE>
the nomination of any person not made, in compliance with the foregoing proce-
dures.
Stockholders were advised by a notice to stockholders included with the Febru-
ary 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 deter-
mine. Notice of any change will be furnished to stockholders prior to the expi-
ration 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. Accord-
ingly, proxy cards are returned in envelopes addressed to the tabulator, which
receives and tabulates the proxies. The final tabulation is inspected by in-
spectors of election who are independent of the Company, its directors, offi-
cers, or employees. The identity and vote of any stockholder shall not be dis-
closed 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.
39
<PAGE>
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. Howev-
er, if any other matter calling for a vote of stockholders is properly pre-
sented at the meeting, it is the intention of the persons named in the accompa-
nying proxy to vote in accordance with their judgment on such matters.
C. R. Lotter, Secretary
40
<PAGE>
EXHIBIT A
PROPOSED AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
The first paragraph of Article FOURTH of the Restated Certificate of Incorpora-
tion, 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 shares, 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).
41
<PAGE>
APPENDIX
Graphic and Image Material
1. Photographs of nominees for director appear next to their biographies on
pages 7 through 11.
2. Narrative description of performance graphs appear on page 21.
<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)
