JCPenney 2015 Annual Report Download - page 117

2.18 “Service Recipient” shall mean the person, within the meaning of Treasury Regulation section 1.409A-1(g) or any
successor thereto, for whom the services are performed and with respect to whom the legally binding right to
compensation arises, and all persons with whom such person would be considered a single employer under Code
section 414(b) (employees of controlled group of corporations), and all persons with whom such person would be
considered a single employer under Code section 414(c) (employees of partnerships, proprietorships, etc., under
common control), using the “at least 50 percent” ownership standard, within the meaning of Code section 409A and
Treasury Regulation section 1.409A-1(h)(3) or any successor thereto.
2.19 “Severance Bonus” shall mean the actual incentive compensation payable to the Executive under the terms of the
Management Incentive Compensation Program for the fiscal year in which the Executive experiences an Involuntary
Separation from Service other than for Cause, prorated for the Executive’s actual period of service for the fiscal year,
less any amounts previously paid to the Executive under the incentive compensation program for that fiscal year. If the
incentive compensation formula under the Management Incentive Compensation Program for the fiscal year in which
the Executive’s Involuntary Separation from Service other than for Cause occurs includes an individual performance
component/goal, for purposes of calculating the actual incentive compensation payable to the Executive for that fiscal
year the portion of the incentive compensation attributable to the achievement of the individual performance
component/goal will be determined at target for that fiscal year.
2.20 “Severance Period” shall mean the following period, based on the Executive’s title at the time of termination of the
Executive’s employment with the Corporation:
Title Severance Period
Executive Vice Presidents and above 18 months
Senior Vice President 12 months
2.21 “Voluntary Separation from Service ” shall mean a Separation from Service other than as a result of the Executive’s
death, Permanent Disability, or an Involuntary Separation from Service.
3. Covenants and Representations of the Executive. The Executive hereby acknowledges that the Executive’s duties to the
Corporation require access to and creation of the Corporation’s confidential or proprietary information and trade secrets
(collectively, the “Proprietary Information”). The Proprietary Information has been and will continue to be developed by the
Corporation and its subsidiaries and affiliates at substantial cost and constitutes valuable and unique property of the
Corporation. The Executive further acknowledges that due to the nature of the Executive’s position, the Executive will have
access to Proprietary Information affecting plans and operations in every location in which the Corporation (and its subsidiaries
and affiliates) does business or plans to do business throughout the world, and the Executive’s decisions and recommendations
on behalf of the Corporation may affect its operations throughout the world. Accordingly, the Executive acknowledges that the
foregoing makes it reasonably necessary for the protection of the Corporation’s business interests that the Executive agree to
the following covenants in connection with the Executive’s Involuntary Separation from Service other than for Cause and
receipt of benefits under this Agreement or the Executive’s Voluntary Separation from Service: