Exhibit 10(ii)(ac)
J. C. PENNEY CORPORATION, INC.
1989 MANAGEMENT
INCENTIVE COMPENSATION PROGRAM
================================================================================
ADOPTED BY BOARD OF DIRECTORS
JANUARY 31, 1989
EFFECTIVE FEBRUARY 1, 1989
AS AMENDED THROUGH FEBRUARY 20, 2002
(NO STOCKHOLDER APPROVAL REQUIRED)
================================================================================
J. C. PENNEY CORPORATION, INC.
1989 Management
Incentive Compensation Program
1. Purpose of Program. The purpose of this 1989 Management Incentive
Compensation Program ("Program") is to continue in effect a fundamental policy
which has been an important factor in the growth and success of J. C. Penney
Corporation, Inc., and its divisions and subsidiaries (collectively, the
"Company"). That policy is to base a substantial part of the compensation of
management employees ("associates") of the Company holding positions of
responsibility upon the operating results of the Company which such associates
help to create. Those associates will be paid reasonable fixed salaries, but
because their aggregate yearly remuneration may be affected substantially by
variations in the operating results of the Company, they will have a direct
incentive to put forth their best efforts for the development and growth of the
Company.
2. Structure of Program. The Program shall initially consist of separate
incentive compensation plans ("plan" or "plans") for the following groups of
associates: (1) general management, (2) merchandising, and (3) catalog. The
Board of Directors of the Company ("Board of Directors" or "Board") may from
time to time authorize additional plans to be included in the Program or the
consolidation of plans that are in the Program.
The Program and all plans shall be administered by, or under the direction
of, a committee ("Committee") of the Board of Directors consisting of not less
than three Board members who are not, and who have not within the year prior to
such service on the
Committee been, eligible to participate in any plan or the Program. The
Committee shall have plenary authority to interpret the Program and the plans
and to make all determinations specified in or permitted by the Program and the
plans or deemed necessary or desirable for their administration or for the
conduct of the Committee's business; all interpretations and determinations of
the Committee may be made on an individual or group basis, and shall be final,
conclusive, and binding on all interested parties; and the Committee may
delegate its responsibilities under the Program and the plans to persons other
than its members, subject to such terms and conditions as it shall determine.
3. Participants in Plans. Participants in a plan for any fiscal year shall be
designated by the Committee. Such designation may be made and, may from time to
time be changed, on an individual basis or by groups, according to position
responsibility level, salary, or any other method of classification deemed
appropriate by the committee, but only management associates (including those
who are also directors, but excluding those who serve as directors only of J. C.
Penney Company, Inc.) may be so designated by the Committee.
4. Determination of Bases of Participation of Participants. The basis on which
each participant shall participate in a plan shall be determined by the
Committee, and any bases so determined may be changed from time to time by such
Committee.
-2-
The Committee may determine the basis on which each participant shall
participate in a plan, on an individual basis or by groups, according to
position responsibility level, salary, or any other method of classification
deemed appropriate by the Committee. The Committee may specify that such
determination will continue in effect until changed by it, in which event the
Committee shall not be required to make a new determination for each fiscal
year.
The Board of Directors shall determine the basis on which participants who
are directors of J. C. Penney Company, Inc. shall participate in a plan, and
from time to time may change such determination. The Board may specify that such
determination shall continue in effect until changed by it, in which event the
Board shall not be required to make a new determination for each fiscal year.
Such initial determination and any such change shall be made only after
recommendations of the Committee are considered.
5. Limit on Incentive Compensation. There are no limits on the total amount of
incentive compensation payable with respect to the Program for any fiscal year.
6. Determination and Payments of Incentive Compensation. The method for
determining incentive compensation payable with respect to any plan and the
Program for any fiscal year shall be prescribed by the Committee, and may be
changed from, time to time, and the Committee shall determine for each fiscal
year the value of the incentive compensation unit under any plan included in the
Program.
-3-
The amount of incentive compensation payable under the plans shall be
computed in accordance with the determinations of the Committee, and shall be
paid on the basis of such computation. The Committee shall adopt such rules and
procedures as it shall deem necessary or desirable in order that the amounts
paid under the Program be verified, and such verification be submitted to the
Board for its approval. Such verified amounts, when approved by the Board shall
be final, conclusive, and binding on all interested parties, including the
Company and the plan participants.
The Board or the Committee may permit a participant to defer receipt of all
or part of any payment under a plan, or the Board or the committee may determine
to defer receipt, by all or some participants, of all or part of any such
payment. Any such deferral shall be for such period and in accordance with such
terms, provisions, and conditions as the Board or the Committee shall determine.
7. Termination and Amendment of Plans and Program. The Board of Directors shall
have power to construe, interpret, administer, amend, modify, suspend, and
terminate the Program or any plan established under the Program.
8. Effective Date. The effective date of the Program shall be February 1, 1989.
-4-