J. C. Penney Company, Inc. Supplemental Term Life Insurance Plan

J. C. PENNEY CORPORATION, INC.

SUPPLEMENTAL TERM LIFE INSURANCE PLAN

FOR MANAGEMENT PROFIT-SHARING ASSOCIATES

AS AMENDED AND RESTATED

JULY 1, 2007

















J. C. PENNEY CORPORATION, INC.

SUPPLEMENTAL TERM LIFE INSURANCE PLAN

FOR MANAGEMENT PROFIT-SHARING ASSOCIATES





TABLE OF CONTENTS



Page
Article 1 Introduction 1


Article 2 Definitions 2


Article 3 Participation 5


Article 4 Life Insurance Benefits 6


Article 5 Funding of Benefits 8


Article 6 Administration of the Plan 9


Article 7 Adoption By Participating Employers 17


Article 8 Amendment and Termination 18


Article 9 Miscellaneous Provisions 22


Appendix I Participating Subsidiaries 25




ARTICLE 1



INTRODUCTION






1.1 Purpose Of Plan. The J. C. Penney Corporation, Inc. Supplemental Term Life Insurance Plan For Management Profit-Sharing Associates (the "Plan") is an "employee welfare benefit plan" pursuant to ERISA. The purpose of the Plan is to permit eligible retired profit-sharing management Associates of J.C. Penney Corporation, Inc. and certain designated subsidiaries who elect to participate to purchase group term life insurance benefits directly from the Insurer (as hereinafter defined). This document, together with the Policies (as hereinafter defined) will be construed as a single group term life insurance plan. Capitalized terms used throughout the Plan have the meanings set forth in Article 2 unless the context clearly requires otherwise or another definition is expressly assigned to the term in a particular usage.



The Policies covered by this Plan are listed below and attached hereto:



b7 J.C. Penney Corporation, Inc. Active and Retired Management Profit Sharing Associates- Associate Term Life Coverage Basic Plan




1.2 Plan Status . The Plan is intended to satisfy the requirements of an after-tax option pursuant to the cafeteria plan requirements under Section 125(d) of the Code.



1.3 Suppression Of Prior Plan . This document is effective July 1, 2007 except as otherwise provided herein. All prior versions of the Plan document are hereby suppressed or superseded. The Plan was originally adopted effective January 1, 1978.





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ARTICLE 2



DEFINITIONS



2.1 " Administrator " means the Benefits Administration Committee of the Company or such other person or committee as may be appointed from time to time by the Human Resources Committee of the Company or any successor thereto ("HR Committee").



2.2 "Annual Earnings for Benefits " means the greater of (i) the Participant's "Annual Earnings for Benefits" for purposes of the Associate-Paid Plan on the Participant's retirement date or (ii) for a retired Participant who is reemployed by a Participating Employer and who becomes eligible for the Associate-Paid Plan and later loses eligibility under the Associate-Paid Plan, such retired Participant's Annual Earnings for Benefits at such time as the Participant lost eligibility under the Company-Paid Plan.



2.3 " Associate " means a person who is employed by a Participating Employer and paid through a participating employer's payroll system. The term "Associate" does not include a person who is classified as an independent contractor by the Participating Employer for purposes of federal income tax reporting and withholding. The designation of an "Associate" by the Company shall be final and not subject to any redetermination of employment classification by any taxing authority such as the Internal Revenue Service or any other governmental authority or agency. The term "Associate" does not include any person who performs services for a Participating Employer as a "leased employee" within the meaning of Code Section 414 (n), or who performs services through an agreement with a leasing organization. The term "Associate" does not include a person covered by a collective bargaining agreement that does not expressly provide for participation in the Plan, provided that the representative of the person with whom the collective bargaining agreement is executed has had an opportunity to bargain in good faith concerning Plan benefits.



2.4 " Associate-Paid Plan " means the J.C. Penney Corporation, Inc. Associate-Paid Group Term Life Insurance Plan, as amended from time to time.



2.5 " Claims Administrator " means the entity or entities, individuals or committees appointed from time to time pursuant to Article 6 or for fully insured option benefits, the Insurer.



2.6 " Code " means the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder. Reference to any section or subsection of the Code includes reference to any comparable or succeeding provisions of any legislation, that amends, supplements or replaces such section or subsection.



2.7 "Company " means J. C. Penney Corporation, Inc., a Delaware corporation, or any successor corporation.



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2.8 "Company-Paid Plan " means the J. C. Penney Corporation, Inc. Group Term Life Insurance Plan, as amended from time to time.



2.9 " Date of Disability", "Disabled", and "Disability " have the meanings set forth in the Company-Paid Plan.



2.10 " ERISA " means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder. Reference to any section or subsection of ERISA includes reference to any comparable or succeeding provisions of any legislation, that amends, supplements or replaces such section or subsection.



2.11 "Insurer " means the insurance company or companies issuing the Policy or Policies.



2.12 " MSRP Retiree " means a former Associate who retired from a Participating Employer and who is eligible to receive Associate-paid life insurance coverage under the terms of the Supplemental Retirement Program for Management Profit-Sharing Associates of J.C. Penney Corporation, Inc., as amended from time to time. The term "MSRP Retiree" also includes any additional former Associate so designated from time to time in the discretion of the Board of Directors of the Participating Employer or the Benefits Administration Committee or the HR Committee of the Company in accordance with the provisions of the Supplemental Retirement Program.



2.13 "Participant " means an MSRP Retiree who has satisfied the eligibility requirements of Article 3, has purchased life insurance coverage under the terms of the Plan, and whose coverage under the Plan has not terminated.



2.14 " Participating Employer " means the Company and any subsidiary or affiliate of the Company which is designated as a Participating Employer under the Plan by the HR Committee, excluding, however, any division of the Company or of a subsidiary or affiliate that is designated by the HR Committee as ineligible to participate in the Plan. Appendix I contains a list of the Participating Employers currently participating in the Plan that have adopted the Plan pursuant to Article 7.



2.15 " Plan " means the J.C. Penney Corporation, Inc. Supplemental Group Term Life Insurance Plan for Management Profit-Sharing Associates, as set forth herein and as may be amended from time to time.



2.16 "Policy " or " Policies " means the life insurance policies through which Plan benefits are provided, which are incorporated by reference into the Plan.



2.17 " Plan Year " means the period with respect to which the records of the Plan are maintained, which will be the 12-month period beginning on January 1 and ending on December 31.



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2.18 " Supplemental Retirement Program " means the Supplemental Retirement Program for Management Profit-Sharing Associates of J. C. Penney Corporation, Inc., as amended from time to time.



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ARTICLE 3



PARTICIPATION



3.1 Eligibility For Coverage . An Associate who qualifies as an MSRP Retiree will be eligible to purchase coverage under the Plan, effective upon retirement, provided the MSRP Retiree was a participant in the Associate-Paid Plan immediately prior to retirement, but only if the MSRP Retiree properly completes the enrollment procedures required by the Administrator within 31 days after retirement. If the MSRP Retiree has assigned his term life insurance provided by the Associate-Paid Plan, the assignee may elect the coverage provided by this Section 3.1. No late enrollment procedures are available for MSRP Retirees. Notwithstanding the foregoing, an MSRP Retiree who was receiving coverage under the Associate-Paid or the Company-Paid Plan on account of Disability on the MSRP Retiree's retirement date will not become eligible to purchase coverage under this Plan.



3.2 Termination of Coverage . A Participant's coverage under the Plan will terminate automatically on the earliest to occur of the following: (i) the last day of the month in which the Participant attains age 65; (ii) subject to Article 8, the date on which the Plan is terminated, or amended to terminate coverage with respect to any group or class of MSRP Retirees that includes the Participant; (iii) the date on which the Policy under which the Participant's benefits are provided is cancelled or terminated and not replaced; iv) the last day of the month in which the Participant fails to make any required premium payment; (v) the last day of the month in which the Participant becomes eligible for coverage under the Company-Paid Plan or Associate-Paid Plan as an active Associate; or (vi) the date of the Participant's death. A Participant whose coverage is terminated pursuant to subsection (v) above, shall again become eligible to participate in the Plan on the first day of the month on or after the date he or she ceases to be an active Associate eligible for coverage under the Company-Paid Plan or Associate-Paid Plan.



3.3 Enrollment Procedures . The Administrator may from time to time prescribe enrollment procedures and forms that are consistent with the terms of the Plan.



3.4 Coverage Not Extended by Payment . The duration of a Participant's coverage is determined solely by the terms of the Plan, and coverage which has otherwise terminated will not be extended even if premium payments for the terminated coverage continue to be made and/or processed on behalf of the Participant.





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ARTICLE 4



LIFE INSURANCE BENEFITS



4.1 Amount of Life Insurance . An MSRP Retiree may purchase life insurance coverage under the Policies in an amount equal to 100% of the MSRP Retiree's Annual Earnings for Benefits from $1,000 up to $2,000,000. Coverage will be rounded to the next higher $1,000 if it is not already an even multiple of $1,000.



4.2 Evidence of Good Health . To the extent required by the Plan, applicable Policies, the Insurer or the Administrator, Participants will be required to provide evidence of good health satisfactory to the Insurer or Administrator as a condition to coverage.



4.3 Payment of Benefits . Except as provided in 4.7, the Insurer will pay benefits payable under the Policy or Plan to the beneficiary or beneficiaries as soon as practicable after receipt by the Insurer of properly submitted claims. Benefits will be paid in a single lump sum payment unless the Participant (or the beneficiary, if applicable) elects a different method of payment offered by the Insurer.



4.4 Designation of Beneficiary . Except as provided in 4.7, a Participant may designate one or more beneficiaries to receive the life insurance benefits under the Plan with respect to coverage on the Participant's life, or may change a prior beneficiary designation, in accordance with procedures specified by the Administrator from time to time. If no beneficiary has been designated under a Policy (or the beneficiary is not alive on the date of the Participant's death), benefits will be paid as provided in the Policy.



4.5 Benefit Limitation . Benefits under the Plan are subject to the terms of the Policies and to applicable state law.



4.6 Recovery of Overpayment . Any amounts paid to any person in excess of the amount to which he is entitled under the Plan will be repaid by that person to the Insurer promptly following receipt by the person of a notice of such excess payments. In the event such repayment is not made, such repayment may be made, at the discretion of the Insurer, by reducing or suspending any future payments due under the Plan to the person and by taking such other or additional action as may be permitted by applicable law.



4.7 Accelerated Payment Option . A Participant who is terminally ill (as hereinafter defined) may elect to receive a prepayment, as an accelerated payment option, up to the lesser of $250,000 or 50% of the applicable life insurance benefit under the Plan. The balance of the life insurance benefit under the Plan will be paid to the Participant's beneficiary upon the Participant's death, subject to the terms of the Plan. The accelerated payment option will be paid to the Participant in a lump sum, or in twelve equal monthly installments if the Participant so elects. If the Participant dies



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before receiving the full amount of the accelerated payment option under this Section, the remainder will be paid to the beneficiary or beneficiaries as part of the balance of the life insurance benefit, subject to the terms of the Plan. For purposes of this Plan, a Participant will be considered to be "terminally ill" if the Participant furnishes to the Insurer satisfactory proof that the Participant's life expectancy is twelve months or less.



4.8 Payment Satisfied Claim . Any payment for the benefit of a Participant, the Participant's estate or the Participant's beneficiary that is made in accordance with the foregoing provisions of this Article or that is made as a settlement to any claim or lawsuit, will, to the extent of the payment, be in full satisfaction of all claims under the Plan against the Participating Employers, the Insurer and the Administrator, any of whom may require such payee, as a condition precedent to such payment, to execute a release acknowledging receipt of such payment. No interest will be paid on any underpayment of benefits or on any benefit payments that have been delayed for any reason, unless required by law.



4.9 No Double Payment . Under no condition will the Plan pay more than one benefit on account of a Participant's death. If a Participant has coverage under the Plan at the time of his or her death under more than one of the Plan's provisions, the Plan will pay only under the one applicable provision with the highest amount of coverage.



4.10 Alienation and Assignment . The interests of the Participants and their beneficiaries under the Plan are not in any way subject to their debts or other obligations, and may be transferred or assigned only to the extent permitted by the applicable Policy or a Qualified Domestic Relations Order.



4.11 Qualified Domestic Relations Orders . To the extent required by Section 609 of ERISA with respect to life insurance plans, benefits available under the Plan will be provided in accordance with the applicable requirements of any Qualified Domestic Relations Order (as defined in Section 609 of ERISA). The Administrator will establish procedures, consistent with this Section, to determine whether an order is a Qualified Domestic Relations Order and to administer the provision of Plan benefits under such a qualified order.





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ARTICLE 5



FUNDING OF BENEFITS



5.1 Associate-Paid Premiums . The Participants will pay all or a portion of the cost of premiums with respect to benefits under the Policies as determined by the Administrator in its discretion from time to time. The Administrator will have full and exclusive power to determine the cost of coverage to be paid by each Participant, and to adjust the required cost from time to time. In establishing the amount of required Participant cost, the Administrator may rely on tables, appraisals, valuations, projections, opinions, and reports furnished by agents employed or engaged by the Administrator or the Company, and may take into account the projected or anticipated costs and expenses relating to the Plan, including without limitation administrative costs and insurance premiums. Premiums required of Participants will be treated as fixed premium payments, and neither the Participants nor any beneficiary will be entitled to any dividend, credit, refund, or rebate under any Policy on account of actual claims experience, investment performance, or similar factors, but all such dividends, credits, refunds, and rebates shall be the sole property of the Company, except to the extent that the aggregate amount of such dividends, credits, refunds, or rebates exceeds the aggregate payments made by the Participating Employers for the employer portion of the cost of premiums under the Policies. The amount of any such excess shall be applied by the Administrator in its discretion from time to time for the benefit of Participants or their beneficiaries.



5.2 Participating Employer Obligations . The Participating Employers will pay the portion, if any, of the cost of premiums with respect to benefits under the Policies as determined by the Administrator in its discretion from time to time. The Participating Employers' obligations under the Plan are limited to the payment of such portion of applicable premiums due under any Policies in force, and no Participant or beneficiary will have any claim or cause of action against any Participating Employer on account of the failure of an Insurer to pay benefits due under the Policies.



5.3 Source of Benefits . Benefits under the Plan will be paid solely from the Policies and only to the extent provided under such Policies. Any payment for the benefit of a Participant that is made in accordance with the terms of the Policies will, to the extent of the payment, be in full satisfaction of all claims under the Plan against the Participating Employers, the Administrator, and the Insurer, any of whom may require such payee, as a condition precedent to such payment, to execute a release acknowledging receipt of such payment.





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ARTICLE 6



ADMINISTRATION OF THE PLAN



6.1 General Powers and Duties of the Administrator . The Administrator will have the full power, responsibility, and discretion to administer the Plan and to construe and apply Plan provisions, and will be the named fiduciary with respect to the operation and administration of the Plan, except with respect to the specific responsibilities delegated to the claims Administrator performed by the Insurer pursuant to the Policies or delegated to the Insurer or another fiduciary pursuant to Section 6.3 or 6.4. The Administrator, and all other persons with discretionary control respecting the operation, administration, control, and/or management of the Plan will perform their duties under the Plan solely in the interests of Participants.



6.2 Specific Powers and Duties of the Administrator . The Administrator will administer the Plan and have the full authority and discretion necessary to accomplish that purpose, including without limitation the authority and discretion to: (i) resolve all questions relating to the eligibility of Associates to become or continue as Participants, (ii) determine the amount of benefits, if any, payable to Participants under the Plan and determine the time and manner in which such benefits are to be paid, except where payment of claims has been allocated to a Claims Administrator or Insurer, (iii) engage any administrative, legal, medical, accounting, clerical, or other services it deems appropriate in administering the Plan, (iv) construe and interpret the Plan, supply omissions from, correct deficiencies in and resolve inconsistencies or ambiguities in the language of the Plan, resolve inconsistencies or ambiguities between the provisions of this document and the provisions of any agreement with a Claims Administrator or any Policy, and adopt rules for the administration of the Plan which are not inconsistent with the terms of the Plan document or Policy, (v) compile and maintain all records it determines to be necessary, appropriate or convenient in connection with the administration of the Plan, (vi) review the performance of any Insurer or Claims Administrator with respect to the Insurer's or Claims Administrator's administrative duties, privacy practices, responsibilities and obligations under the Plan, (vii) resolve all questions of fact relating to any matter for which it has administr ...