In accordance with New York Stock Exchange rules regarding equity inducement awards, J. C. Penney company, Inc. announced that it is granting previously disclosed equity awards to Ron Johnson, its newly appointed chief executive officer, and Michael R. Francis, the company's new president. The company had disclosed these awards in connection with the announcements of Mr. Johnson's and Mr. Francis' appointments in June and October, respectively.
Mr. Johnson's award of 1,660,578 restricted stock units (RSUs) was granted yesterday, Nov. 1, 2011, when he assumed the position of chief executive officer of the company. The vesting date for these RSUs is Jan. 27, 2012, but may vest earlier in the case of employment termination due to death or disability, if Mr. Johnson terminates his employment at the company for “good reason” or if the company terminates his employment for any reason other than cause. This RSU award was designed to partially replace the value of equity granted by Mr. Johnson's former employer, Apple, Inc., which was scheduled to vest in March 2012 and September 2014 but was forfeited upon termination of employment.
Mr. Francis' award of 1,000,000 RSUs will be granted on Nov. 16, 2011. The RSUs will vest in thirds, on the fourth, fifth and sixth anniversaries, respectively, of the grant date, provided Mr. Francis remains continuously employed with the company through those dates. The award vests pro rata if Mr. Francis is terminated for any reason other than cause, and it will fully vest if employment terminates in certain cases within two years following a change of control of the company.
