CALCULATION
OF REGISTRATION FEE
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Title
of each class of
securities
to be registered
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Amount
to
be
registered(1)
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Proposed
maximum
offering
price
per
unit(2)
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Proposed
maximum
aggregate
offering price(2)
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Amount of
registration fee(2)
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|
|
Common
Stock of 50¢ par value of J. C. Penney Company, Inc.
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13,388,673
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$26.85
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$359,485,870.05
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$20,059.31
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(1) Pursuant
to Rule 416 under the Securities Act of 1933, the Registrant is also
registering an indeterminable number of shares of Common Stock
as
may be issued from time to
time
as
a result of stock splits and stock dividends.
(2) Estimated
solely for the purpose of calculating the registration fee pursuant to
Rule 457(c) under the Securities Act of 1933, as amended, based on the
average of the high and
low
prices of the Common Stock
reported on the New York Stock Exchange on May 15,
2009.
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PROSPECTUS
SUPPLEMENT
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Filed pursuant
to
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To Prospectus Dated May 19,
2009
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Rule
424(b)(3)
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SEC File No.
333-142317-01
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13,388,673
Shares
J.
C. Penney Company, Inc.
COMMON
STOCK
____________________
The
J. C. Penney Corporation, Inc. Pension Plan Trust (Selling Stockholder) is
offering 13,388,673 shares of common stock of 50¢ par value (common stock) of J.
C. Penney Company, Inc. (Company) contributed by the Company to the Selling
Stockholder in a private transaction. The shares of common stock are
held by State Street Bank and Trust Company, the trustee of the Selling
Stockholder, and may be offered for sale, from time to time, upon the
instructions of Evercore Trust Company, N.A. or its successor, the independent,
third party investment fiduciary appointed to manage the shares of common
stock.
The
shares of common stock to which this prospectus relates may be sold from time to
time through public or private transactions on or off the New York Stock
Exchange (NYSE), and at prevailing market prices or negotiated prices, all as
more fully described under “Plan of Distribution.” The proceeds from
the sale of the shares of common stock to which this prospectus relates are
solely for the account of the Selling Stockholder. The Company will
not receive any of the proceeds from such sales. See “Use of
Proceeds” in the accompanying prospectus.
The
Company’s common stock trades on the NYSE under the symbol “JCP.” On
May 18, 2009, the last reported sale price of our common stock on the NYSE was
$27.16.
Investing
in our common stock involves certain risks. You should carefully
consider the risks described under the “Risk Factors” section beginning on page
S-1 of this prospectus supplement and in our Annual Report on Form 10-K for the
fiscal year ended January 31, 2009 and our other filings with the Securities and
Exchange Commission.
____________________
This
prospectus supplement should be read in conjunction with, and may not be
delivered or utilized without, the prospectus dated May 19, 2009.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
____________________
The
date of this prospectus supplement is May 19, 2009.
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Prospectus
Supplement
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Prospectus
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This
document is in two parts. The first is this prospectus supplement,
which describes the specific terms of this common stock offering. The
second part, the accompanying prospectus, gives more general information, some
of which may not apply to this offering. If the description of the
offering varies between this prospectus supplement and the accompanying
prospectus, you should rely on the information in this prospectus
supplement.
You should rely only on the information
contained in this document, including the information incorporated by reference,
or to which we have referred you. We have not authorized anyone to
provide you with information that is different. Before purchasing any
common stock, you should carefully read both this prospectus supplement and the
accompanying prospectus, together with the additional information described
under the heading “Incorporation by Reference” in the accompanying
prospectus. This document may only be used where it is legal to sell
these securities. You should not assume that the information
contained in this prospectus supplement or the accompanying prospectus is
accurate as of any date other than the respective dates of the prospectus
supplement and the accompanying prospectus.
Investing in our common stock involves
risk. You should carefully consider all of the information included
or incorporated by reference in this prospectus supplement and the accompanying
prospectus before deciding whether to make an investment. In
particular, you should carefully consider the risks and uncertainties included
in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal
year ended January 31, 2009 and incorporated by reference into the accompanying
prospectus as well as those referred to below and the “Cautionary Statement
Regarding Forward-Looking Statements” in the accompanying
prospectus. These risks and uncertainties are not the only ones we
may face. Additional risks and uncertainties not presently known to
us may also impair our business operations. If any of the described
risks actually occurs, our business, financial condition or results of
operations could be materially adversely affected and the value of our common
stock could decline significantly and you may lose all or part of your
investment.
Risks
Relating to Ownership of Our Common Stock
The
market price and trading volume of our common stock may be volatile, which may
make it difficult for you to resell your shares of common stock when you want or
at prices you find attractive.
The market price of our common stock
may fluctuate in response to the following factors, some of which are beyond our
control:
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fluctuations
in our operating results, including results that vary from expectations of
management, analysts
and
investors;
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changes
in investors’ and analysts’ perception of the business risks and
conditions of our business;
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broader
market fluctuations;
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general
financial, economic and political
conditions;
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regulatory
changes affecting our industry generally or our business and
operations;
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·
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announcements
of strategic developments, acquisitions, financings and other material
events by us or our competitors;
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the
sale of a substantial number of shares of our common stock held by
existing security holders in the public market;
and
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·
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general
conditions in the retail industry.
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The
stock markets in general have experienced extreme volatility that has at times
been unrelated to the operating performance of particular
companies. These broad market fluctuations may adversely affect the
trading price of our common stock, make it difficult to predict the market price
of our common stock in the future and cause the value of your investment to
decline.
There
may be future sales or other dilution of our equity, which may adversely affect
the market price of our common stock.
We are not restricted from and
stockholder approval is not required to issue additional common stock, including
securities that are convertible into or exchangeable for, or that represent the
right to receive, common stock except any stockholder approval required by
the NYSE. Sales of a substantial number of shares of our common stock
or other equity-related securities in the public market could depress the market
price of our common stock. We cannot predict the effect that future
sales of our common stock or other equity-related securities would have on the
market price of our common stock.
You
may not receive dividends on the common stock.
Holders of our common stock are only
entitled to receive such dividends as our Board of Directors (Board) may declare
out of funds legally available for such payments. We are a holding
company conducting all of our
S-1
operations
through our wholly owned subsidiary, J. C. Penney Corporation, Inc., and its
subsidiaries. As a result, our ability to make dividend payments on
the common stock depends primarily on the receipt of dividends and other
distributions from our direct and indirect subsidiaries. Although the
Board has historically declared cash dividends on our common stock, it is not
required to do so and may reduce or eliminate our common stock dividend in the
future.
Our
common stock is equity and is subordinate to our existing and future
indebtedness and effectively subordinated to all the indebtedness claims against
our subsidiaries.
Shares of our common stock are equity
interests and do not constitute indebtedness. As such, shares of our
common stock will rank junior to all of our indebtedness and to other non-equity
claims against us and our assets available to satisfy claims against us,
including in a liquidation. In addition, our right to participate in
any distribution of assets of any of our subsidiaries upon the subsidiary’s
liquidation or otherwise, and thus your ability as a holder of the common stock
to benefit indirectly from such distribution, will be subject to the prior
claims of creditors of that subsidiary, except to the extent that any of our
claims as a creditor of such subsidiary may be recognized. As a
result, the common stock effectively is subordinated to all existing and future
liabilities and obligations of our subsidiaries. As of May 15, 2009,
we had approximately $3.4 billion of outstanding long-term
debt.
Anti-takeover
provisions could negatively impact our stockholders.
Provisions of Delaware law and our
Restated Certificate of Incorporation, as amended, and Bylaws, as amended, could
make it more difficult for a third party to acquire control of us or have the
effect of discouraging a third party from attempting to acquire control of
us. For example, we are subject to Section 203 of the Delaware
General Corporation Law, which would make if more difficult for another party to
acquire us without the approval of our Board. Additionally, our
Restated Certificate of Incorporation authorizes our Board to issue preferred
stock, which could be issued as a defensive measure in response to a takeover
proposal. These provisions could make it more difficult for a third
party to acquire us.
The Selling Stockholder may offer the
shares from time to time, depending on market conditions and other factors, in
one or more transactions on the New York Stock Exchange or any other national
securities exchange or automated interdealer quotation system on which shares of
our common stock are then listed, through negotiated transactions or
otherwise. The shares may be sold at prices and on terms then
prevailing, at prices related to the then-current market price or at negotiated
prices. The shares may be offered in any manner permitted by law,
including through brokers, dealers or agents, and directly to one or more
purchasers. Sales of the shares may involve:
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block
transactions in which the broker or dealer engaged will attempt to sell
shares as agent, but may position and resell a portion of the block as
principal to facilitate the
transaction;
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purchases
by a broker or dealer as principal and resale by the broker or dealer for
its account; or
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ordinary
brokerage transactions and transactions in which a broker solicits
purchasers.
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The
independent, third party investment fiduciary and the Selling Stockholder will
act independently of us with respect to the timing, manner and size of each
sale.
The Selling Stockholder may, upon
instructions from the independent, third party investment fiduciary, effect such
transactions by selling shares of common stock to or through
broker-dealers. Such broker-dealers may receive compensation in the
form of discounts or commissions from the Selling Stockholder and may receive
commissions from the purchasers of shares for whom they may act as agent in
amounts to be negotiated. Such compensation may be received if the
broker-dealer acts as either an agent or as a principal. The Selling
Stockholder does not expect these discounts or commissions to exceed what is
customary in the types of transactions involved. Any offering
S-2
price,
and any discounts or concessions allowed or reallowed or paid to dealers, may be
changed from time to time.
The aggregate proceeds to the Selling
Stockholder will be the sales price of the shares of common stock, less
discounts and commissions, if any.
In offering the shares of common stock
covered by this prospectus, the Selling Stockholder and any broker-dealers or
agents who execute sales for the Selling Stockholder may be deemed to be
“underwriters” within the meaning of the Securities Act of 1933, as
amended, in connection with such sales. Any profits realized by
the Selling Stockholder and the compensation of any broker-dealer or agent may
be deemed to be underwriting discounts and commissions. We know of no
existing arrangements between the Selling Stockholder and any broker-dealer or
other agent relating to the sale or distribution of the shares of common
stock. The Company has not engaged any broker-dealer or agent in
connection with the distribution of the shares of common stock.
Broker-dealers and agents, and their
respective affiliates, may be engaged in transactions with, or perform
commercial or investment banking or other services for, us or our subsidiaries
or affiliates, in the ordinary course of business.
All of the shares of common stock to
which this prospectus relates will be listed on the NYSE.
S-3
PROSPECTUS
J.
C. Penney Company, Inc.
COMMON
STOCK
____________________
This
prospectus covers the resale, from time to time, by the J. C. Penney
Corporation, Inc. Pension Plan Trust (Selling Stockholder), of shares of common
stock of 50¢ par value (common stock) of J. C. Penney Company, Inc.
(Company). The number of shares to be sold by the Selling Stockholder
shall be specified from time to time in a prospectus supplement. The
shares of common stock will be held by State Street Bank and Trust Company, the
trustee of the Selling Stockholder (Trustee), and sold upon the instructions
from an independent, third party investment fiduciary appointed to manage the
shares of common stock contributed to the Selling Stockholder. The
investment fiduciary will determine the time and manner of sale of the shares of
common stock. See “Selling Stockholder.”
The
shares of common stock to which this prospectus relates may be sold from time to
time through public or private transactions on or off the New York
Stock Exchange (NYSE), and at prevailing market prices or negotiated
prices, all as will be more fully described in a prospectus
supplement.
The
proceeds from the sale of the shares of common stock to which this prospectus
relates are solely for the account of the Selling Stockholder. The
Company will not receive any of the proceeds from such sales. See
“Use of Proceeds.”
The
Company’s common stock trades on the NYSE under the symbol “JCP.” On
May 18, 2009, the last reported sale price of our common stock on the
NYSE was $27.16.
The
principal executive offices of J. C. Penney Company, Inc. are located at 6501
Legacy Drive, Plano, Texas 75024, and the telephone number is
(972) 431-1000.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
____________________
The
date of this prospectus is May 19, 2009.
TABLE
OF CONTENTS
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission (SEC) using a “shelf” registration process. Under this
shelf process, the Selling Stockholder may offer our shares of common stock in
one or more offerings. This prospectus provides you with a general description
of our common stock. Some transactions in which the Selling
Stockholder offers shares of our common stock under this registration statement
may require that we provide a prospectus supplement that will contain additional
information about the terms of that offering. The prospectus
supplement may also add to, update or change information contained in this
prospectus; accordingly, to the extent inconsistent, information in this
prospectus is superseded by the information in the prospectus
supplement.
You
should rely only on the information in this prospectus, and any supplement to
this prospectus, including the information incorporated by reference. We have
not authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. The Selling Stockholder is not making an offer to sell shares of our
common stock in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing or
incorporated by reference in this prospectus and any prospectus supplement is
accurate only as of the date indicated on the front cover of these documents or
the date of the document incorporated by reference. The Company’s business,
financial condition, results of operations, and other information contained in
the prospectus and any prospectus supplement may have changed since that
date.
Unless
indicated otherwise, as used in this prospectus, the terms “JCPenney,” “we,”
“us,” “our,” or the “Company” refer to J. C. Penney Company,
Inc. and its consolidated subsidiaries.
WHERE
YOU CAN FIND MORE INFORMATION
We
file reports, proxy statements and other information with the SEC. Our filings
with the SEC are available on the Internet at the SEC’s EDGAR website at http://www.sec.gov
or from our website at www.jcpenney.net . You may read and copy any
document that we file with the SEC at the SEC’s Public Reference Room at the
following address:
100
F Street, N.E.
Washington,
D.C. 20549
You
can call the SEC at 1-800-SEC-0330 for more information about the operation of
the Public Reference Room. Our SEC filings are also available at the offices of
the NYSE, 20 Broad Street, New York, New York 10005. For further
information on obtaining copies of our public filings at the NYSE, you can call
(212) 656-5060. Information about us is also available at our website
at www.jcpenney.net.
Our website and the information contained on it are not part of this
prospectus.
INCORPORATION
BY REFERENCE
The
SEC allows us to “incorporate by reference” the information that we file with
the SEC. This means that we can disclose important information to you by
referring you to information and documents that we have filed with the SEC. Any
information that we refer to in this manner is considered part of this
prospectus. Any information that we file with the SEC after the date of this
prospectus will automatically update and supersede the corresponding information
contained in this prospectus.
We
specifically are incorporating by reference the following
documents:
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Our
annual report on Form 10-K for the fiscal year ended January 31, 2009
(other than information contained therein deemed to have been furnished
and not filed in accordance with SEC
rules);
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·
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Our
current reports on Form 8-K filed March 3, 2009, March 17, 2009, April 13,
2009, April 14, 2009, April 28, 2009, May 12, 2009 and our
current report on Form 8-K furnished on May 15, 2009;
and
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·
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Any
future filings that we make with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended, excluding any
information furnished to, rather than filed with, the SEC, after the date
of this prospectus until all of the securities being registered by this
registration statement are sold.
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1
You
may request a free copy of any documents referred to above, including exhibits
specifically incorporated by reference in those documents, by contacting us at
the following address and telephone number:
J.
C. Penney Company, Inc.
6501
Legacy Drive
Plano,
Texas 75024
Telephone:
(972) 431-3436
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and any prospectus supplement, and the documents incorporated herein
by reference may contain forward-looking statements made within the meaning of
the Private Securities Litigation Reform Act of 1995. In some cases, you can
identify forward-looking statements by terminology such as “may,” “should,”
“will,” “expects,” “intends,” “ plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential,” or the negative of these terms or other comparable
terminology. These statements relate to future events or our future financial
performance, and involve known and unknown risks, uncertainties, and other
factors that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. Those risks, uncertainties and other factors
include, but are not limited to, general economic conditions, including
inflation, recession, unemployment levels, consumer spending patterns, credit
availability and debt levels, changes in store traffic trends, the cost of
goods, trade restrictions, changes in tariff, freight, paper and postal rates,
changes in cost of fuel and other energy and transportation costs, increases in
wage and benefit costs, competition and retail industry consolidations, interest
rate fluctuations, dollar and other currency valuations, risks associated with
war, an act of terrorism or pandemic, and a systems failure and/or security
breach that results in the theft, transfer or unauthorized disclosure of
customer, employee or Company information. Furthermore, the Company typically
earns a disproportionate share of its operating income in the fourth quarter due
to holiday buying patterns, and such buying patterns are difficult to forecast
with certainty. Additional information regarding these and other factors may be
contained in our filings with the SEC, especially on Forms 10-K, 10-Q and
8-K. The list of factors identified above and in the aforementioned reports is
not exhaustive and new factors may emerge or changes to these factors may occur
that would impact our business. All such risk factors are difficult to predict
and contain material uncertainties that may affect actual results and may be
beyond our control.
We
also used other factors and assumptions not identified above in deriving the
forward-looking statements. Our failure to realize these other assumptions or
the impact of the other factors may also cause actual results to differ
materially from those projected.
All
written or oral forward-looking statements attributable to us are expressly
qualified in their entirety by the foregoing cautionary statement. You are
cautioned not to rely on the forward-looking statements, which speak only as of
the date of this prospectus or, where applicable, a prospectus supplement or
document incorporated by reference. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. We are under no
duty to update any of the forward-looking statements after the date of any
prospectus supplement nor are we under any obligation to publicly announce the
results of any revisions to any of the forward-looking statements to reflect
actual results, future events or developments, changes in assumptions or changes
in other factors affecting the forward-looking statements.
THE
COMPANY
Since
J. C. Penney Company, Inc.’s founding by James Cash Penney in 1902, the Company
has grown to be a major retailer, operating 1,101 JCPenney department stores
throughout the continental United States, Alaska and Puerto Rico as of May 15,
2009. The Company’s business consists of selling merchandise and services to
consumers through its department stores and Direct (Internet/catalog) channels.
Department stores and Direct generally serve the same type of customers and
provide virtually the same mix of merchandise. Department stores accept returns
from sales made in stores, via the Internet and through catalogs. The Company
markets family apparel and footwear, accessories, fine and fashion jewelry,
beauty products through Sephora inside JCPenney and home furnishings. In
addition, the department stores provide customers with services such as salon,
optical, portrait photography and custom decorating.
On
January 27, 2002, J. C. Penney Company, Inc. was reorganized into a holding
company structure. As part of this restructuring, the former J. C. Penney
Company, Inc. changed its name to “J. C. Penney Corporation, Inc.” and
became a wholly owned subsidiary of a newly formed affiliated holding company.
The new holding company assumed the name “J. C. Penney Company, Inc.” Shares of
common and preferred stock of J. C. Penney Corporation, Inc.
2
outstanding
as of January 27, 2002 were automatically converted into the identical
number and type of shares of common and preferred stock of J. C. Penney Company,
Inc. Shares of common stock of 50¢ par value of J. C. Penney Company, Inc. are
publicly traded on the NYSE under the symbol “JCP.”
J.
C. Penney Company, Inc. derives its operating income and cash flow from J. C.
Penney Corporation, Inc. and is also the co-obligor or guarantor, as the case
may be, on all outstanding debt of J. C. Penney Corporation, Inc. which has been
registered with the SEC.
USE
OF PROCEEDS
This
prospectus covers the resale, from time to time, by the Selling Stockholder of
shares of JCPenney common stock. The number of shares to be sold by
the Selling Stockholder shall be specified from time to time in a prospectus
supplement.
The
registration of the shares of common stock does not necessarily mean that the
Selling Stockholder will sell all or any of the shares of common stock
registered by the registration statement of which this prospectus forms a
part. The Selling Stockholder may offer and sell all or any portion
of the shares of common stock covered by this prospectus and any applicable
prospectus supplement from time to time but is under no obligation to offer or
sell any such shares. Because the Selling Stockholder may sell,
transfer or otherwise dispose of all, some or none of the shares of common stock
covered by this prospectus, or may acquire additional shares from us in the
future, we cannot determine the number of such shares of common stock that will
be sold, transferred or otherwise disposed of by the Selling Stockholder or the
amount or percentage of shares of common stock that will be held by the Selling
Stockholder upon termination of any particular offering.
The Selling Stockholder is a tax-qualified trust that holds the
assets for the J. C. Penney Corporation, Inc. Pension Plan. The
shares of common stock are held in the custody of the Trustee, 2 Avenue de
Lafayette, 2nd Floor, Boston, Massachusetts 02111. We currently
have on-going banking relationships with the Trustee in the ordinary course of
business and expect to continue to have similar relationships with the Trustee
in the future. The shares of common stock are held in a separate
investment account at the Trustee. An independent, third party
investment fiduciary has been appointed by the Benefit Plans Investment
Committee of J. C. Penney Corporation, Inc. (BPIC) to instruct the Trustee as to
any disposition of the shares of common stock held by the Selling
Stockholder. This investment fiduciary will have sole authority to
manage the shares of common stock, subject to general investment criteria
established by the BPIC.
The shares offered by this prospectus
are the only shares of common stock of the Company owned by the Selling
Stockholder as of May 19, 2009.
DESCRIPTION
OF CAPITAL STOCK
As
of May 15, 2009, the Company’s authorized capital stock consisted of
1,250,000,000 shares of common stock of 50¢ par value, of which 222,421,056
shares were issued and outstanding, and 25,000,000 shares of preferred stock,
without par value, of which no shares were issued and outstanding. The
authorized shares of any class of stock may be increased or decreased, as the
case may be, by the affirmative vote of the holders of a majority of the
outstanding shares of the stock entitled to vote. The descriptions set forth
below of the common stock and preferred stock (as hereinafter described)
constitute brief summaries of certain provisions of the Company’s Restated
Certificate of Incorporation, as amended, referred to in this document as its
“Charter,” and its Bylaws, as amended, and are qualified in their entirety by
reference to the relevant provisions of such documents. See “Where You Can Find
More Information” and “Incorporation by Reference” for information on how to
obtain copies of these documents. In this section entitled “Description of
Capital Stock,” when we refer to the “Company,” “JCPenney,” “we,” “our,” or
“us”, we are referring to J. C. Penney Company, Inc. and none of its
subsidiaries.
3
Common
Stock
Holders
of common stock are entitled to one vote per share with respect to each matter
submitted to a vote of the stockholders of JCPenney, including the election of
directors, subject to voting rights that may be established for shares of
preferred stock. Our Charter does not provide for cumulative voting nor are
holders of common stock entitled to any preemptive rights to purchase or
subscribe for any of the Company’s securities. Shares of common stock are
neither redeemable nor convertible, and there are no sinking fund provisions
relating to these shares. Subject to the prior rights of any outstanding shares
of preferred stock, holders of common stock are entitled to receive such
dividends as may be lawfully declared from time to time by our Board of
Directors (Board). Upon any voluntary or involuntary liquidation, dissolution or
winding up of JCPenney, holders of common stock will share equally in the assets
remaining after the Company pays all of its creditors and satisfies all of its
obligations to preferred stockholders.
The
outstanding shares of common stock are fully paid and nonassessable. Additional
shares of common stock may be issued, as authorized by our Board from time to
time, without stockholder approval, except any stockholder approval required by
the NYSE.
BNY
Mellon Shareowner Services is the transfer agent and registrar of the common
stock.
Preferred
Stock
Our
Charter authorizes 25,000,000 shares of preferred stock, without par
value. No shares of preferred stock are issued and
outstanding.
Certain
Charter, Bylaw and Delaware Law Provisions
Our
Charter and Bylaws and the Delaware General Corporation Law contain several
provisions that may make it more difficult to acquire or control us by means of
a tender offer, open market purchases, proxy fight or otherwise.
Election
of Directors; Removal of Directors; Action by Written Consent
Our
directors are elected annually. In a non-contested election, each
director must be elected by the affirmative vote of the majority of the votes
cast with respect to that director’s election. Our Bylaws provide
that in a non-contested election, any nominee for director that is an incumbent
director and does not receive a majority of the votes cast “For” his or her
election must promptly tender his or her resignation, and the Board of
Directors, excluding the director who tenders his or her resignation, must
promptly decide whether to accept or reject the resignation. Absent a
compelling reason for the director to remain on the Board, as determined by the
other directors in the exercise of their business judgment, the Board shall
accept the resignation. The Company will promptly and publicly
disclose the Board’s decision, together with an explanation of how the decision
was reached. In a contested election, directors are elected by a
plurality of the votes of the shares present in person or represented by proxy
at the stockholder meeting and entitled to vote on the election of
directors. Additionally, our Bylaws provide that members of our Board
may be removed, with or without cause, only upon the vote of 80 percent of the
voting power of all classes of our voting stock.
Our
Charter and Bylaws also provide that stockholders may only take action at an
annual or special meeting of the stockholders and not by written consent of
stockholders. The provisions regarding action by written consent require the
vote of 80 percent of the voting power of all classes of our voting stock in
order to remove or amend them.
These
provisions may have the effect of discouraging anyone from attempting to acquire
control of us and could deter open market purchases of our common
stock.
Business
Combinations with Interested Stockholders
Our
Charter provides that approval of business combinations with interested
stockholders requires the vote of 80 percent of the combined voting power of the
then-outstanding shares of all classes and series of our stock entitled to vote
generally in the election of directors.
An
“interested stockholder” is defined in our Charter as a person (other than the
Company, any subsidiary or any employee benefit plan of the Company or any
subsidiary) who or which:
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is
the beneficial owner, directly or indirectly, of ten percent or more of
the voting power of all classes of our voting
stock;
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4
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is
an affiliate of the Company and at any time within the two-year period
before the date in question was the beneficial owner of ten percent or
more of the voting power of all classes of our voting stock;
or
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is
an assignee of shares of voting stock which were owned by an interested
stockholder in the preceding two
years.
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A
“business combination” is defined in our Charter to mean:
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a
merger or consolidation with an interested
stockholder;
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a
sale, lease, exchange, mortgage, pledge, transfer or other disposition of
our property having a fair market value of $100 million or more to an
interested stockholder or a purchase, lease, exchange, mortgage, pledge,
transfer or other acquisition by us from an interested stockholder of
property having such fair market
value;
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an
issuance or transfer by the Company or any subsidiary of any securities of
the Company or any subsidiary to any interested stockholder in exchange
for cash, securities or other property having a fair market value of $100
million or more;
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any
reclassification of securities or recapitalization of the Company that has
the effect of increasing the voting power of an interested stockholder;
and
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transactions
having a similar effect to those listed
above.
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A
business combination will not need to receive the 80 percent vote outlined above
if it meets one of the following tests:
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the
business combination is approved by a majority of the members of the Board
who are not affiliated with the interested stockholder and who were Board
members prior to the interested stockholder becoming an interested
stockholder; or
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the
consideration to be paid by the interested stockholder in the business
combination meets various tests set forth in the Charter designed to
ensure that the form and amount of consideration to be paid by the
interested stockholder is fair to the other
stockholders.
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The
business combination provisions outlined above may have the effect of
discouraging anyone from attempting to acquire control of us and could deter
open market purchases of our common stock.
Stockholder
Proposals and Nominations
Our
Bylaws provide that any stockholder may present a nomination for director at an
annual meeting of stockholders only if advance notice of such nomination has
been delivered to us not less than 90 days prior to the meeting. If an election
of directors is to be held at a special meeting of stockholders, notice by the
stockholder must be received not later than seven days after the notice of such
meeting was given to stockholders. Similarly, any stockholder may present a
proposal at an annual meeting only if advance notice of the proposal has been
delivered to us not less than 90 days prior to the meeting. The foregoing
notices must describe the proposal to be brought at the meeting or the nominee
for director, as applicable, as well as provide personal information regarding
the stockholder giving the notice, the number of shares owned by the
stockholder, his or her interest in such proposal and, with respect to
nominations for director, such information with respect to the nominees as would
be required to be included in a proxy statement filed by us with the SEC. In
addition, our Bylaws provide that only the Board can call special meetings of
stockholders and that the only business that may be brought before a special
meeting is such business specified by the Board in the notice of such meeting.
These procedural requirements could have the effect of delaying or preventing
the submission of matters proposed by any stockholder to a vote of the
stockholders. The provision of the Bylaws containing the procedural requirements
regarding advance notice of nominations for our Board may only be amended by a
vote of 80 percent of the voting power of all classes of our voting
stock.
Delaware
Law
Section 203
of the General Corporation Law of the State of Delaware applies to us. Under
certain circumstances, Section 203 limits the ability of an interested
stockholder to effect various business combinations with the Company for a
three-year period following the time that such stockholder becomes an interested
stockholder. For purposes of Section 203, a “business combination” is
broadly defined to include mergers, asset sales and other transactions resulting
in a financial benefit to the interested stockholder. An “interested
stockholder” is a person who, together with affiliates and associates, owns, or
within the immediately preceding three years did own, 15 percent or more of our
voting stock.
5
An
interested stockholder may not engage in a business combination transaction with
the Company within the three-year period unless:
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before
the stockholder became an interested stockholder, our Board approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested
stockholder;
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upon
consummation of the transaction in which the stockholder became an
interested stockholder, the interested stockholder owned at least 85
percent of our voting stock (excluding shares owned by officers, directors
or certain employee stock purchase plans);
or
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at
or subsequent to such time, the business combination is approved by the
Board and authorized at an annual or special meeting of stockholders, and
not by written consent, by the affirmative vote of at least 66 ⅔ percent
of the outstanding voting stock which is not owned by the interested
stockholder.
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Limitations
on Directors’ Liability
JCPenney’s
Charter eliminates the personal liability of a director to the Company and its
stockholders for certain breaches of his or her fiduciary duty as a director.
This provision does not, however, eliminate or limit the personal liability of a
director:
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for
any breach of such director’s duty of loyalty to the Company or its
stockholders;
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for
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of
law;
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under
the Delaware statutory provision making directors personally liable, under
a negligence standard, for unlawful dividends or unlawful stock
repurchases or redemptions; or
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for
any transaction from which the director derived an improper personal
benefit.
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This
provision offers persons who serve on our Board protection against awards of
monetary damages resulting from breaches of their fiduciary duty (except as
indicated above), including grossly negligent business decisions made in
connection with takeover proposals for the Company and limits our ability or the
ability of one of our stockholders to prosecute an action against a director for
a breach of fiduciary duty. However, the provision does not affect the
availability of equitable remedies such as an injunction or rescission. The SEC
has taken the position that the provision will have no effect on claims arising
under the federal securities laws.
Our
Bylaws provide that we may indemnify any of our officers or directors to the
fullest extent permitted by the Delaware General Corporation Law.
The
legality of the common stock offered hereby has been passed upon for the Company
by Janet L. Dhillon, Executive Vice President, General Counsel and Secretary of
the Company. A copy of this legal opinion was filed as an exhibit to the
registration statement containing this prospectus. As of May 15, 2009, Ms.
Dhillon had outstanding options to purchase 63,796 shares of J. C. Penney
Company, Inc. common stock.
EXPERTS
The
consolidated financial statements of J. C. Penney Company, Inc. as of January
31, 2009 and February 2, 2008 and for each of the years in the three-year period
ended January 31, 2009, and management’s assessment of the effectiveness of
internal control over financial reporting as of January 31, 2009 have been
incorporated by reference herein in reliance upon the reports of KPMG LLP,
independent registered public accounting firm, also incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing. KPMG LLP’s report with respect to the consolidated financial
statements refers to the Company’s adoption of the provisions of the Financial
Accounting Standards Board’s (FASB) Statement of Financial Accounting Standards
(SFAS) No. 157, “Fair Value Measurements” in fiscal year 2008, the measurement
date provisions of SFAS No. 158, “Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans” on February 3, 2008, the recognition and
disclosure provisions of SFAS No. 158 on February 3, 2007, and FASB
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” on February
4, 2007.
6
13,388,673
Shares
J.
C. Penney Company, Inc.
COMMON
STOCK
____________________
PROSPECTUS
SUPPLEMENT
May
19, 2009
____________________