This May 19, 2000 Agreement, as amended on June 1, 2000 and on June 14,
2000, was entered into between the Company and the following senior
executives: X. X. Xxxxx; X. X. Xxxxx; X. X. Xxxxxxxxx; X. X. Xxxxxx;
X. X. XxXxx; X. X. Xxxxxxx; and X. X. Xxxxxx.
Exhibit 10 (a)
May 19, 2000
TO: ___________________
RE: X. X. PENNEY COMPANY, INC.
SUCCESSION SEVERANCE AGREEMENT
Dear __________:
As you are aware, I have announced my intention to retire and that a
search is underway for my successor. The Company considers you a key
officer and needs your best efforts, skills and dedication to assure that
the best interests of all of its stockholders are protected while the
search is underway. The Company recognizes that the prospect of a new Chief
Executive Officer may create an element of uncertainty with regard to your
own personal interests and needs. In order to assure the continued
availability of your best efforts, skills and dedication during this
period, the Company offers, in consideration of your continued services
until 90 days after the date upon which my successor is in place, (such
date in place to be determined by the Company's Board of Directors), to
provide you with a lump severance payment and certain other benefits, under
the conditions and as set forth below:
1. Succession Severance Arrangement (Arrangement). The Company
agrees to continue your employment in your present position and at your
present compensation level until 90 days after the date upon which my
successor is in place. If, within three months following the date upon
which my successor is in place, your employment by the Company terminates,
voluntarily or involuntarily, for any reason other than disability or
death, you shall receive the Severance Payment set forth below, together
with all the other benefits (Other Benefits) provided for in the 1999
Separation Allowance Program for Profit-Sharing Management Associates
("Program") or your employment contract, as the case may be.
(a) The Severance Payment will be paid to you immediately upon your
termination of employment in one lump sum, subject to applicable
withholding taxes.
(b) This Arrangement shall terminate upon the expiration of six
months from the date my successor is in place or as provided in
paragraph 2 below.
TO: ___________________
May 19, 2000
Page 2
For the purposes of this Arrangement, Severance Payment shall mean an
amount equal to the sum of the following:
I. Three times your then current annual base rate of salary, plus
II. Three times the annual Management Incentive Compensation Plan
award for which you are eligible based on your salary at the time
the Severance Payment is computed, payable at the target level
($1.00 unit value), plus
III. Three times the Economic Value Added Performance Plan award for
which you are eligible, payable at the target level ($1.00 unit
value)calculated on your salary at the time the Severance Payment
is computed, without regard to any negative balance in your Bonus
Reserve Account under that Plan.
IV. If you become entitled to the Severance Payment under this
Arrangement and/or Other Benefits, you shall also be entitled to
receive the Code Section 280G Gross-Up Payment described in
Section 4.10 of the Program, if applicable.
2. Term of this Agreement. The term of this Arrangement is one year
_____________________________
beginning May 19, 2000 unless terminated earlier as provided in
paragraph 1 (b) above. This Arrangement may be renewed for an
additional one year term if my successor is not in place and if the
Board of Directors of the Company delivers written notice to you not
less than thirty (30) days prior to May 19, 2001.
3. Miscellaneous.
(a) The Severance Payment under this Arrangement is in lieu of any
severance pay under Section 4.01 of the Program or under the
provisions of that certain Form of Severance Agreement entered into by
you effective February 8, 2000 (Severance Agreement) should either of
those agreements also be triggered. If you receive a Severance Payment
under this Arrangement, you shall also be entitled to receive
immediately the Other Benefits to which you may be entitled without
the need for an actual or constructive termination of employment. If
your employment is not terminated within three months after the date
upon which my successor is in place, then you shall continue to be
entitled to all the benefits, including Severance Pay, provided for in
the Program for the remaining term of the two year period provided for
in the Program after a Change of Control or pursuant to the terms of
the Enhanced Severance Agreement as the case may be.
TO: ___________________
May 19, 2000
Page 3
(b) You shall not be required to mitigate the amount of any Severance
Payment paid to you under this Arrangement by seeking other
employment or otherwise, nor shall the amount of any Severance
Payment be reduced by any compensation earned by you as the
result of employment by another employer, by retirement benefits,
by offset against any amount claimed to be owed by you to the
Company, or otherwise.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, share exchange, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and to agree to perform
this agreement in the same manner and to the same extent that the
Company would be required to perform it if no such successor
existed.
4. Notices. Any notice required or permitted by this Arrangement shall
_______
be given by registered or certified mail, return receipt requested,
addressed to the Company at its then principal office, or to you at
your address specified on page 1 of this Arrangement, or to either
party hereto at such other address or addresses as you or the Company
may from time to time specify for such purpose in a notice similarly
given.
5. Governing Law. This Arrangement shall be construed and governed in
_____________
accordance with the laws of the State of Delaware (regardless of the
law that might otherwise govern under applicable Delaware principles
of conflict of laws).
TO: ___________________
May 19, 2000
Page 4
Please indicate your acceptance of this agreement by signing one copy
of this letter in the space provided and returning it to me. The other copy
is for your files.
Sincerely,
X. X. XXXXXX COMPANY, INC.
By /s/ X. X. Xxxxxxxxxxxxx
_______________________________
X. X. Xxxxxxxxxxxxx
Chairman of the Board and
Chief Executive Officer
AGREED TO AND ACCEPTED this 24 day of May , 2000
_______ _____
/s/
_______________________________
June 1, 2000
TO: ___________________
RE: X. X. PENNEY COMPANY, INC.
SUCCESSION SEVERANCE AGREEMENT -
AMENDMENT
Dear __________:
Reference is made to that Succession Severance Agreement dated May 19,
2000. Paragraph 1, line 4 of that Agreement is hereby amended as follows:
1. Strike the following language: "following the date upon which my
successor is in place".
2. Insert in place of that language the word "thereafter".
Sincerely,
X. X. XXXXXX COMPANY, INC.
By /s/ X. X. Xxxxxxxxxxxxx
______________________________
X. X. Xxxxxxxxxxxxx
Chairman of the Board and
Chief Executive Officer
AGREED TO AND ACCEPTED this 1st day of June, 2000
_____ ______
/s/
______________________________
June 14, 2000
TO: ___________________
RE: X. X. PENNEY COMPANY, INC.
SUCCESSION SEVERANCE AGREEMENT -
AMENDMENT
Dear ___________________:
Reference is made to our previous Amendment of your Succession Severance
Agreement dated June 1, 2000. It has been called to my attention that to
conform Paragraph 3(a) of the Agreement with the intent of the Agreement
and the Amendment, the following revision should be made to Paragraph 3(a),
line 8 of the Succession Severance Agreement:
* The reference to "three months" in line 8 shall be changed to
"six months."
There is no need for you to execute this document, but it should be held by
you as part of the Agreement and the earlier Amendment.
Sincerely,
X. X. XXXXXX COMPANY, INC.
By: /s/ X. X. Xxxxxxxxxxxxx
______________________________
X. X. Xxxxxxxxxxxxx
Chairman of the Board and
Chief Executive Officer
