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J C PENNEY CO INC FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Submission of Matters to a Vote of Security Holders

May 19, 2014

Item 1.01 Entry into a Material Definitive Agreement.

On May 14, 2014, J. C. Penney Corporation, Inc. (the "Corporation"), a wholly-owned subsidiary of J. C. Penney Company, Inc. (the "Company"), entered into a commitment letter (the "Commitment Letter"), with Wells Fargo Securities, LLC, Wells Fargo Bank, National Association, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, JPMorgan Chase Bank, N.A., Barclays Bank PLC and Goldman Sachs Bank USA (collectively, the "Commitment Parties"), under which the Commitment Parties have committed, subject to the terms and conditions set forth in the Commitment Letter, to provide the Corporation with a $2.35 billion senior secured asset-based revolving credit and term loan facility (the "Credit Facility").

The Credit Facility will replace the Amended and Restated Credit Agreement, dated as of January 27, 2012 (as amended and restated as of February 8, 2013, as amended on May 20, 2013, and as otherwise modified prior to the date hereof, the "Existing Credit Facility"). As with the Existing Credit Facility, borrowing availability under the Credit Facility will vary according to the Loan Parties' (as defined below) levels of inventory, credit card receivables and accounts receivable. The Credit Facility is expected to mature five years from the closing date thereof.

All borrowings under the Credit Facility will accrue interest at a rate equal to, at the Corporation's option, a base rate or an adjusted LIBOR rate plus a spread. The proceeds of the Credit Facility will be used (a) to repay or refinance all or a portion of the outstanding borrowings under the Existing Credit Facility, (b) to pay costs, expenses and fees in connection with the Credit Facility and other related transactions, and (c) for working capital and general corporate purposes. As of the date hereof, the Company has outstanding loans in the amount of $650 million under the Existing Credit Facility.

As with the Existing Credit Facility, the Credit Facility will be guaranteed by the Company, the Corporation, J. C. Penney Purchasing Corporation and certain of the Corporation's subsidiaries (collectively, the "Loan Parties"). The Credit Facility will be secured by collateral substantially similar to the Existing Credit Facility (the "ABL Priority Collateral"). Any proceeds of the ABL Priority Collateral will be applied first to the satisfaction of all obligations under the revolving facility and second to the satisfaction of the obligations under the term loan facility.

The commitment by the Commitment Parties to provide the Credit Facility is subject to, among other things, execution of a definitive loan agreement and other loan documentation and the satisfaction of other customary conditions precedent for financings of this type. Under the Commitment Letter, the Corporation undertakes to indemnify the Commitment Parties against certain liabilities and to reimburse the Commitment Parties for certain fees and expenses.

Item 5.07 Submission of Matters to a Vote of Security Holders.

The Company held its Annual Meeting of Stockholders on May 16, 2014. At the Annual Meeting, stockholders considered and voted upon six proposals: (1) to elect ten directors nominated by the Board of Directors for a one-year term expiring at the next annual meeting of stockholders or until their successors are elected and qualified; (2) to ratify the appointment of KPMG LLP as the Company's independent auditor for the fiscal year ending January 31, 2015; (3) to approve the Company's 2014 Long-Term Incentive Plan; (4) to approve amendments to the Company's Restated Certification of Incorporation, as amended, to restrict certain transfers of the Company's common stock in order to protect the tax benefits of the Company's net operating loss carryforwards; (5) to approve the Amended Rights Agreement in


order to protect the tax benefits of the Company's net operating loss carryforwards; and (6) to approve, on an advisory basis, the compensation of the Company's named executive officers as described in the Company's Proxy Statement. The final results of the voting on each proposal were as follows:

1. Election of Directors. Broker Nominee For Against Abstain Non-Votes Colleen Barrett 117,005,970 8,446,970 1,379,409 105,946,922 Thomas Engibous 116,490,037 8,372,704 1,969,608 105,946,922 Kent Foster 116,515,819 8,938,188 1,378,342 105,946,922 Leonard Roberts 116,288,692 8,570,753 1,972,904 105,946,922 Stephen Sadove 117,925,578 7,556,367 1,350,404 105,946,922 Javier Teruel 117,371,506 8,032,705 1,428,138 105,946,922 R. Gerald Turner 116,410,526 9,022,389 1,399,434 105,946,922 Ronald Tysoe 116,935,034 8,551,877 1,345,438 105,946,922 Myron E. Ullman, III 121,516,800 4,154,836 1,160,713 105,946,922 Mary Beth West 114,212,474 10,701,466 1,918,409 105,946,922

2. Ratification of Appointment of Independent Auditor.

For Against Abstain Broker Non-Votes 224,026,982 6,208,401 2,543,888 N/A

3. Approve 2014 Long-Term Incentive Plan.

For Against Abstain Broker Non-Votes 113,743,898 11,311,671 1,776,780 105,946,922 4. Approve Amendments to the Company's Restated Certificate of Incorporation, as amended. For Against Abstain Broker Non-Votes 113,317,007 12,147,797 1,367,545 105,946,922

5. Approve the Amended Rights Agreement.

For Against Abstain Broker Non-Votes 110,030,673 15,648,726 1,152,950 105,946,922

6. Advisory Vote on Compensation of Executive Officers.


For Against Abstain Broker Non-Votes 112,201,201 10,106,774 4,524,374 105,946,922


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Source: Edgar Glimpses