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J. C. Penney Company, Inc.
(the
"Company"), today announced that its Board of Directors has adopted a
stockholder rights plan. The plan, which has a term of one year, is designed
to protect against any potential future use of coercive or abusive takeover
techniques and to help ensure that the Company's stockholders are not deprived
of the opportunity to realize the full and fair value of their investment.
The plan, which was adopted following evaluation and consultation with the
Company's outside advisors, is similar to plans adopted by the Company in the
past and by numerous publicly traded companies.
The plan, which was not adopted in response to any effort to acquire control
of the Company, will continue in effect until August 20, 2014, unless the
rights are redeemed or exchanged for shares of common stock by the Company on
an earlier date.
In connection with the adoption of the stockholder rights plan, the Company's
board of directors declared a dividend of one right for each share of the
Company's common stock held by stockholders of record as of the close of
business on September 3, 2013. Initially, these rights will not be
exercisable and will trade with the shares of the Company's common stock.
Under the plan, these rights will generally be exercisable only if a person
or group becomes an "acquiring person" by (i) acquiring beneficial ownership
of 10% or more of the Company's common stock or, in the case of any person
(including such person's affiliates and associates) that beneficially owns 10%
or more of the Company's outstanding common stock, upon the acquisition of
additional shares by such person, or (ii) commencing a tender offer or
exchange offer which, if consummated, could result in a person owning 10% or
more of the Company's common stock. The term "acquiring person" will not
include certain affiliates of Pershing Square Capital Management, L.P. or
certain affiliates of Vornado Realty Trust so long as such party's beneficial
ownership is permitted under such party's letter agreements with the Company.
If a person or group becomes an acquiring person, each right will generally
entitle the holder, other than the acquiring person, to acquire, for the
exercise price of $55.00 per right, shares of common stock (or, in certain
circumstances, other consideration) having a market value equal to twice the
right's then-current exercise price. The Company's Board of Directors may
redeem the rights at a price of $0.001 per right at any time up to ten days
after a person becomes an acquiring person.
Stockholders are not required to take any action to receive the rights
distribution. Until the rights become exercisable, outstanding stock
certificates (or, in the case of shares reflected on the direct registration
system, by the notations in the book-entry account system of the transfer
agent for the shares) will represent both shares of the Company's common stock
and the rights. The issuance of the rights will have no dilutive effect and
will not impact reported earnings per share for the Company.
The full text of the rights plan will be filed with the Securities and
Exchange Commission.
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