J C PENNEY CO INC (Form: 8-K, Received: 07/24/2017 17:14:56)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 24, 2017

J. C. PENNEY COMPANY, INC.

(Exact name of registrant as specified in its charter)



Delaware	1-15274		26-0037077
(State or other jurisdiction of incorporation )	(Commission File No.)		(IRS Employer Identification No.)
6501 Legacy Drive Plano, Texas		75024-3698
(Address of principal executive offices)		(Zip code)

Registrant's telephone number, including area code: (972) 431-1000

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Act of 1934 (§240.12b-2 of this chapter)
Emerging Growth Company	□



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	□



Item 5.02	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b) and (c) Effective July 24, 2017, the Board of Directors of J. C. Penney Company, Inc. (the “Company”) has elected Jeffrey Davis, 54, as Executive Vice President and Chief Financial Officer of the Company. In connection with Mr. Davis’ election, Andrew S. Drexler will cease to serve as the Company’s interim Chief Financial Officer effective July 24, 2017. Mr. Drexler continues to serve as the Company’s Senior Vice President, Chief Accounting Officer and Controller.

Mr. Davis most recently served as Senior Vice President and Chief Financial Officer of Darden Restaurants, Inc. (food service industry) from 2015 to 2016. Prior to that, he served in positions of increasing responsibility with Wal-Mart Stores, Inc. (retailer) from 2006 to 2015, including Executive Vice President and Chief Financial Officer for the Wal-Mart U.S. segment from 2014 to 2015, Treasurer of Wal-Mart Stores, Inc. from 2010 to 2014, Senior Vice President, Finance and Strategy for the Wal-Mart U.S. segment from 2009 to 2010, and Vice President, Finance, US Stores Operations/Specialty Division from 2006 to 2009.

In connection with his employment, Mr. Davis and the Company entered into a letter agreement dated July 24, 2017 describing certain terms of his employment. A copy of the letter agreement is filed herewith as Exhibit 10.1 and is incorporated herein by reference. As an executive officer of the Company, Mr. Davis will be eligible to enter into the Company’s standard form of indemnification agreement, a copy of which was filed as Exhibit 10(ii)(ab) to the Company’s Annual Report on Form 10-K for the fiscal year ended January 26, 2002, and to participate in the J. C. Penney Corporation, Inc. 2011 Change in Control Plan, a copy of which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 14, 2011.

Mr. Davis and the Company have not entered into an employment agreement. There are no arrangements or understandings between Mr. Davis and any other person pursuant to which he was elected as an executive officer of the Company.

In connection with his employment, Mr. Davis will receive base salary, annual incentive compensation, and long-term incentive awards as set forth in the letter agreement. In addition, as an inducement to join the Company, he will receive a cash signing bonus, also as set forth in the letter agreement. Mr. Davis will also be eligible to enter into an Executive Termination Pay Agreement, the form of which was filed as Exhibit 10.33 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2016.

A copy of the press release announcing Mr. Davis’ election is attached hereto as Exhibit 99.1.



Item 9.01	Financial Statements and Exhibits.

(d)	Exhibit 10.1	Letter Agreement dated July 24, 2017 between J. C. Penney Company, Inc. and Jeffrey Davis
	Exhibit 99.1	J. C. Penney Company, Inc. News Release dated July 24, 2017

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	J. C. PENNEY COMPANY, INC.

By:	/s/ Brynn Evanson Brynn Evanson Executive Vice President, Human Resources

Date: July 24, 2017

EXHIBIT INDEX



Exhibit Index	Description
10.1	Letter Agreement dated July 24, 2017 between J. C. Penney Company, Inc. and Jeffrey Davis
99.1	J. C. Penney Company, Inc. News Release dated July 24, 2017

Exhibit 10.1

July 22, 2017

Dear Jeff Davis:

I am pleased to extend this offer of employment as EVP Chief Financial Officer with J.C. Penney Corporation, Inc. (“J.C. Penney”) ¹ , reporting to me. Your new office will be in 6501 Legacy Drive, Plano, Texas 75024. Your start date will be July 24, 2017. The components of your offer are below.

Compensation

Your annualized base salary will be $700,000.

Performance-Based Bonus

You are eligible to participate in a performance-based bonus program. Your annual target bonus opportunity is 75% of your base salary. Assuming employment for a full fiscal year, your bonus opportunity at target would be $525,000, for total annual earnings opportunity of $1,225,000. For the 2017 fiscal year your bonus will be prorated based upon the actual duration of your participation in the program, assuming continued employment through the end of the fiscal year.

Inducement Awards

In addition to your base salary and performance-based bonus, you will receive a one-time sign-on bonus of $50,000 less applicable taxes, within 30 days of your date of hire. Also, if the loss on the sale of your home is greater than $150,000 then you will be eligible to receive an additional bonus up to $50,000 to assist you with the loss. Please note you will need to provide documentation for the loss of sale to receive the additional bonus up to $50,000. To receive either sign-on bonus, you must sign and return the attached sign-on bonus agreement.

After you commence employment with J.C. Penney, you will receive an equity award having a fair market value of $500,000 on the date of grant. The equity award will be granted as follows: 50% as performance-based restricted stock units (“PBRSUs”), 25% as time-based restricted stock units (“TBRSUs”) and 25% as stock options. The PBRSUs earned and TBRSUs both vest on the third anniversary of the grant date, and one-third of the stock options will vest on each of the first three anniversaries of the grant date. The vesting of the equity awards is contingent on your active employment with the Company on the applicable vesting date with no break in service. The awards will be subject to other terms and conditions as set forth in your award agreements, which will be delivered following your grant date.

The grant date for your equity inducement awards will be the third full trading date following the date your employment begins.

Long-term Incentive Compensation

Your position entitles you to participate in J.C. Penney’s Long-Term Incentive Compensation Program.

Long-term incentive awards are made on an annual basis, typically in the first quarter, and are subject to approval by the Human Resources and Compensation Committee (“HRCC”) of the Board of Directors. Each year, the HRCC determines the amount and type of awards that will be delivered in the annual grant. Award amounts are determined by position and individual performance. For the

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1 Depending on your organization, you may be employed by J.C. Penney Corporation, Inc., or one of its subsidiaries, (e.g., JCP Logistics, Inc., J.C. Penney Purchasing Corporation, JCP Procurement, Inc. or JCPenney Puerto Rico, Inc.).

2018 fiscal year, your Long-Term Incentive Award will have a grant date target economic value of $1,000,000. Past awards have consisted of stock options, time-based restricted stock units, and/or performance-based restricted stock units.

Relocation

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

Benefits

We offer a comprehensive benefits package. In addition to the standard benefits offering, J.C. Penney currently offers an annual allowance for a health exam.

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

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


•	I-9 required documentation - Please remember to bring documentation to support the I-9 Statement that shows your eligibility to work in the United States. You will complete this form electronically on your first day.


•	Acceptable results from a background investigation.


•	Your signature agreement to respect confidential information (this agreement is attached to your offer letter).


•	Your signature agreement to participate in the J.C. Penney Binding Arbitration Program. You will sign this document electronically on your first day of employment.


•	Your signature agreement to certify your compliance with J.C. Penney’s Statement of Business Ethics. You will sign the associated Certificate of Compliance on your first day of employment.


•	Satisfactory assurance that you are not subject to any non-compete or other restrictive covenant that could impair your ability to perform the job responsibilities of the position you are offered or could subject the company to potential liability. If you are subject to any such restrictions, please provide us with a copy of relevant documents.

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

We are excited about the opportunity to work with you and welcome you to the J.C. Penney team! I look forward to partnering with you as we continue to drive our Private Brands, Omnichannel and Revenue Per Customer growth strategies.

Regards,

/s/ Marvin Ellison

Marvin Ellison

Chairman & Chief Executive Officer

J.C. Penney

6501 Legacy Drive

Plano, TX, 75024

www.jcpenney.com

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

Name (Print): Jeffrey A. Davis

Signature: /s/ Jeffrey A. Davis

Date: July 24, 2017

J.C. Penney Company, Inc.

Agreement to Respect Confidential Information

Congratulations and welcome to J.C. Penney! We are pleased and excited that you have agreed to join our team. With your help, we will accelerate our growth strategies.

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

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

Please sign below to acknowledge your understanding and agreement.

Name (Print): Jeffrey A. Davis

Signature: /s/ Jeffrey A. Davis

Date: July 24, 2017

J.C. Penney Corporation, Inc.

Bonus Agreement

In addition to your base salary, you will receive a one-time sign-on bonus in the amount of $50,000 less applicable taxes, within 30 days of your date of hire.

If the loss on the sale of your home is greater than $150,000, you will receive an additional bonus up to $50,000 to assist you with the loss, provided we receive documentation for the total loss on sale of your home. This one-time bonus in an amount up to $50,000, less applicable taxes, will be paid within 30 days of the sale of your home.

By accepting this bonus agreement and signing the agreement below, if you voluntarily terminate your employment with J.C. Penney Corporation, Inc. (“J.C. Penney”) ² or your employment is terminated for cause, including specifically, a breach of any of J.C. Penney’s policies, practices, procedures or Statement of Business Ethics as determined by J.C. Penney, within 12 months of your start date, you agree to reimburse J.C. Penney for the full amount of any bonus or bonuses received.

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

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

Name (Print): Jeffrey A. Davis

Signature: /s/ Jeffrey A. Davis

Date: July 24, 2017

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2 Your offer of employment is with J.C. Penney Corporation, Inc. or one of its subsidiaries.

Exhibit 99.1

JCPENNEY ELECTS JEFFREY DAVIS AS CHIEF FINANCIAL OFFICER

PLANO, Texas - (July 24, 2017) - J. C. Penney Company, Inc. [NYSE: JCP] today announced that Jeffrey Davis is joining the Company as executive vice president and chief financial officer, effective today. He will succeed Andrew Drexler, who has been serving as interim chief financial officer while the Company completed its search. Davis will report to Marvin R. Ellison, chairman and chief executive officer of JCPenney.

“On behalf of the board of directors and executive leadership, I’m pleased to welcome Jeff to JCPenney. He brings decades of finance, treasury and strategy experience from a host of leading companies, and will make an outstanding addition to our team,” said Ellison. “Jeff’s expertise will also be a tremendous asset to JCPenney as we continue to differentiate our business in a competitive retail climate and further strengthen our balance sheet moving forward.”

In his role, Davis will be responsible for all financial operations of the Company, including the oversight of finance teams at the JCPenney home office and shared services center in Salt Lake City. Among his primary objectives will be to continue the Company’s progress in identifying earnings growth opportunities, optimizing pricing, exercising SG&A discipline, managing inventory levels and deleveraging debt.

“JCPenney is a mainstay in American retailing, and I’m proud to have the opportunity to sustain its rich legacy alongside a group of dedicated associates committed to differentiating the Company from its traditional competitors,” said Davis. “I look forward to working with our teams in Plano and Salt Lake to continue strengthening the financial position of JCPenney, further propelling the Company’s momentum.”

Davis most recently served as chief financial officer at Darden Restaurants, overseeing finance and accounting, corporate reporting, tax, internal audit, treasury and investor relations. He also maintained oversight of Darden’s real estate acquisitions, as well as the company’s restaurant development.

Prior to Darden, Davis served as executive vice president and chief financial officer for Walmart U.S. stores. Upon joining Walmart in 2006, he served as vice president of finance for its U.S. specialty division before assuming positions of increasing responsibility, including senior vice president of finance and strategy, followed by a promotion to senior vice president and treasurer. Before Walmart, Davis held multiple finance-related positions with Lakeland Tours, McKesson Corporation and The Hillman Company.

JCPenney Media Relations:

(972) 431-3400 or jcpnews@jcp.com

Follow @jcpnews on Twitter for the latest announcements and Company information.

Investor Relations:

(972) 431-5500 or jcpinvestorrelations@jcpenney.com

About JCPenney:

J. C. Penney Company, Inc. (NYSE:JCP), one of the nation's largest apparel and home furnishings retailers, is on a mission to ensure every customer’s shopping experience is worth her time, money and effort. Whether shopping jcp.com or visiting one of over 1,000 store locations across the United States and Puerto Rico, she will discover a broad assortment of products from a leading portfolio of private, exclusive and national brands. Supporting this value proposition is the warrior spirit of over 100,000 JCPenney associates worldwide, who are focused on the Company's three strategic priorities of strengthening private brands, becoming a world-class omnichannel retailer and increasing revenue per customer. For additional information, please visit jcp.com.

Forward-Looking Statements:

This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expect" and similar expressions identify forward-looking statements, which include, but are not limited to, statements regarding the Company’s financial position, sales, gross margin, selling, general and administrative expenses, earnings and cash flows. Forward-looking statements are based only on the Company's current assumptions and views of future events and financial performance. They are subject to known and unknown risks and uncertainties, many of which are outside of the Company's control that may cause the Company's actual results to be materially different from planned or expected results. Those risks and uncertainties include, but are not limited to, general economic conditions, including inflation, recession, unemployment levels, consumer confidence and spending patterns, credit availability and debt levels, changes in store traffic trends, the cost of goods, more stringent or costly payment terms and/or the decision by a significant number of vendors not to sell us merchandise on a timely basis or at all, trade restrictions, the ability to monetize non-core assets on acceptable terms, the ability to implement our strategic plan including our omnichannel initiatives, customer acceptance of our strategies, our ability to attract, motivate and retain key executives and other associates, the impact of cost reduction initiatives, our ability to generate or maintain liquidity, implementation of new systems and platforms, changes in tariff, freight and shipping rates, changes in the cost of fuel and other energy and transportation costs, disruptions and congestion at ports through which we import goods, increases in wage and benefit costs, competition and retail industry consolidations, interest rate fluctuations, dollar and other currency valuations, the impact of weather conditions, risks associated with war, an act of terrorism or pandemic, the ability of the federal government to fund and conduct its operations, a systems failure and/or security breach that results in the theft, transfer or unauthorized disclosure of customer, employee or Company information, legal and regulatory proceedings and the Company’s ability to access the debt or equity markets on favorable terms or at all. There can be no assurances that the Company will achieve expected results, and actual results may be materially less than expectations. Please refer to the Company's most recent Form 10-Q for a further discussion of risks and uncertainties. Investors should take such risks into account and should not rely on forward-looking statements when making investment decisions. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We do not undertake to update these forward-looking statements as of any future date.

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