Fill and Sign the Resolved that the Shareholders of J Form

SHAREHOLDER PROPOSAL RESOLVED: That the shareholders of J. C. Penney Company, Inc. request the Board of Directors to prepare a report at reasonable expense which describes the Company s actions to ensure that it does not and will not do business with foreign suppliers who manufacture items for sale in the United States using forced labor, convict labor, or illegal child labor, or who fail to satisfy all applicable laws a nd standards protecting their employees wages, benefits, working conditions, freedom of association, and other rights. SUPPORTING STATEMENT As U.S. companies increasingly import goods from overseas, there is growing concern about working conditions in many nations which fall far below the most basic standards of fair and humane treatment. Several years ago, a controversy arose after reports that goods manufactured by convicts in Chinese prisons were being imported into the United States for sale to consumers. The Tariff Act of 1930 makes it illegal to import any goods made by forced labor, including convict labor. China s use of prison labor and its record on human rights generally were also issues in the recent debate about whether China should enjoy ‘most favored nation” trading status with the United States. Public concern has also been voiced in the wake of reports about the manufacture of retail items using illegal child labor, unsafe or unhealthy working conditions, and violations of other labor laws. When questions about such practices first arose, many retailers and manufacturers denied any knowing involvement with suppliers who engage in them. Some companies went a step further and adopted sourcing” standards which declare that the company will not do business with foreign suppliers who exploit their workers manufacture items for import and sale in the United States. More recently, the White House has issued a set of sourcing principles which it is urging American businesses to adopt in dealing with overseas suppliers. J. C. Penney imports many goods into this country, and we believe that the shareholders have a strong interest in learning what steps the Company is taking to monitor and control the conditions under which the goods it sells are produced. We believe that it makes good business sense to have strict sourcing standards and to enforce them vigorously, as reports that a company s overseas suppliers are exploiting workers may damage the company s reputation and generate a consumer backlash. In our view, it is not enough for a company merely to have standards which may look good on paper; effective enforcement is also required. There are subterfuges which suppliers can use to import into the United States goods made by forced labor. Also, when the federal government enforces applicable laws in this area, it may hold companies liable for their supplier s actions. We therefore ask the Board to prepare a report which would give investors data about J. C. Penney s efforts to assure that it is not doing business with overseas suppliers who exploit workers and information to indicate that the Company is vigorously monitoring supplier performance. WE URGE YOU TO VOTE FOR THIS RESOLUTION! The Board of Directors Supports This Proposal for the Following Reasons: The stated goals of this proposal are consistent with the long-standing policy of the Company. The Company has always been committed to the highest ethical conduct and strict compliance with the law in all its business dealings, including its important relationships with its many suppliers. The Company is deeply concerned about this issue and, as a result, over the years has developed a comprehensive program to address the matters set forth in the proposal. The Company s commitment to the goals expressed in the stockholder proposal has been and remains a fundamental part of our business policy. The Company s Board of Directors has therefore asked management to prepare for its review a report describing the Company s actions in this important area, which will be made available to stockholders at the Annual Meeting. Accordingly, the Board recommends a vote FOR this proposal. J. C. Penney Company. Inc. 4/10/96