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J.C. Penney Terminates Chief Operating Officer

Reuters
Thursday, 28 Dec 2006 | 4:36 PM ET

U.S. department store operator J.C. Penney said it fired its chief operating officer, Catherine West, after only six months on the job, sending its shares lower.

West, 47, was named executive vice president and COO in June and previously worked for Capital One Financial, where she had been president of its U.S. card business. Her termination was effective immediately, J.C. Penney said in a brief statement.

The company did not give a reason for her firing.

The store operations, property development and logistics departments, which were reporting to West, will now report to Myron "Mike" Ullman, Penney's chairman and chief executive, the
company said.

The Plano, Texas-based company, which operates more than 1,000 stores, would not provide further details. Company spokeswoman Darcie Brossart said she could not comment on the
reason for West's firing.

Citigroup analyst Deborah Weinswig wrote in a research note that West's termination came as a surprise but added that her departure would not represent a big loss for the company, given
her short tenure.

"We believe this decision came as a result of Ms. West not being a good fit for the company," Weinswig wrote.

J.C. Penney's Brossart said West had a severance agreement with the company and the retailer intended to honor the terms of that agreement.

According to a June filing with the Securities & Exchange Commission, West was to earn a base salary of $750,000 -- to be reviewed annually starting in 2007 -- with an additional cash bonus targeted at 75 percent of base salary, but that could be as much as 150 percent of her salary.

West was also to receive stock option awards and restricted stock awards valued at over $20 million in recognition of forfeited benefits at her former employer, Capital One, as well as a minimum cash bonus for 2006 of $1 million.

Starting in 2007, West was to be eligible for long-term incentive awards with a target value of $1.4 million.

West could not immediately be reached for comment.

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J.C. Penney shares, which are up 39% since January, have traded in a 52-week range of $82.45 to $54.20.

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