Exhibit 10.61

Notice of Restricted Stock Unit Grant

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Name
Edward J. Record
Employee ID 
Date of Grant
May 20, 2014
Number of Restricted Stock Units Granted
223,964

Restricted Stock Unit Grant
Subject to the terms of this Notice of Restricted Stock Unit Grant (“Notice”),
the J. C. Penney Company, Inc. (the “Company”) hereby grants Edward J. Record
(“You” or “Your”) the number of Restricted Stock Units listed above. The number
of restricted stock units listed above was determined by dividing $2 million,
the agreed on value of Your Restricted Stock Unit award, by the Fair Market
Value of the Common Stock on May 20, 2014. Each Restricted Stock Unit will at
all times be deemed to have a value equal to the then-current Fair Market Value
of one share of Common Stock.

Definitions
For purposes of this Notice, unless the context requires otherwise, the
following terms will have the meanings indicated below:

“Board” will mean the Board of Directors of the Company.

“Cause” will mean:

(a)
“cause” or “summary dismissal,” as the case may be, as that term may be defined
in any written agreement between You and the Company that may at any time be in
effect; or

(b)
in the absence of a definition in a then-effective agreement between You and the
Company (as determined by the Board), termination of Your employment with the
Company on the occurrence of one or more of the following events:

 
(i) Your failure to substantially perform Your duties with the Company as
determined by the Board or the Company;

(ii) Your willful failure or refusal to perform specific directives of the
Board, or the Company, which directives are consistent with the scope and nature
of Your duties and responsibilities;

(iii) Your conviction of a felony; or

(iv) A breach of Your fiduciary duty to the Company or any act or omission by
You that (A) constitutes a violation of the Company’s Statement of Business
Ethics, (B) results in the assessment of a criminal penalty against the Company,
(C) is otherwise in violation of any federal, state, local or foreign law or
regulation (other than traffic violations and other similar misdemeanors), (D)
adversely affects or could reasonably be expected to adversely affect the
business reputation of the Company, or (E) otherwise constitutes willful
misconduct, gross negligence, or any act of dishonesty or disloyalty.

“Change in Control” will generally have the meaning specified in section 409A of
the Code, and any regulations and guidance issued thereunder and will include a
change of ownership, a change of effective control, or a change in ownership of
a substantial portion of the assets of the Company. Generally, subject to
section 409A:

(a)
A change of ownership occurs on the date that a person or persons acting as a
group acquires ownership of stock of the Company that together with stock held
by such person or group constitutes more than 50 percent of the total fair
market value or total voting power of the stock of the Company.

(b)
Notwithstanding whether the Company has undergone a change of ownership, a
change of effective control occurs (i) when a person or persons acting as a
group acquires within a 12-month period 30 percent of the total voting power of
the stock of the Company, or (ii) a majority of the Board is replaced within a
12-month period by directors whose

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appointment or election is not approved by a majority of the members of the
Board before the appointment or election. A change in effective control also may
occur in any transaction in which either of the two corporations involved in the
transaction has a Change in Control as defined in this Notice (i.e., multiple
change in control events). For purposes of this Notice, any acquisition by the
Company of its own stock within a 12-month period, either through a transaction
or series of transactions, that, immediately following such acquisition, results
in the total voting power of a person or persons acting as a group to equal or
exceed 30 percent of the total voting power of the stock of the Company will not
constitute a change in effective control of the Company.

(c)
A change in ownership of a substantial portion of the Company’s assets occurs
when a person or persons acting as a group acquires assets that have a total
gross fair market value equal to or more than 40 percent of the total gross fair
market value of all assets of the Company immediately prior to the acquisition.
A transfer of assets by the Company is not treated as a change in the ownership
of such assets if the assets are transferred to:

 
(i) A shareholder of the Company (immediately before the asset transfer) in
exchange for or with respect to its stock;
 
(ii) An entity, 50 percent or more of the total value or voting power of which
is owned, directly or indirectly, by the Company;

(iii) A person, or more than one person acting as a group, that owns, directly
or indirectly, 50 percent or more of the total value or voting power of all the
outstanding stock of the Company; or

(iv) An entity, at least 50 percent of the total value or voting power of which
is owned, directly or indirectly, by a person described in paragraph (iii),
immediately above.

Persons will not be considered to be acting as a group solely because they
purchase assets of the Company at the same time, or as a result of the same
public offering; however, persons will be considered to be acting as a group if
they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of assets, or similar business transaction with the
Company.

“Code” will mean the Internal Revenue Code of 1986, as amended.

“Company” will mean J. C. Penney Company, Inc., the Corporation or any successor
thereto, for whom the services are performed and with respect to whom the
legally binding right to compensation arises, and all persons with whom the
Corporation would be considered a single employer under Code section 414(b)
(employees of controlled group of corporations), and all persons with whom the
Corporation would be considered a single employer under Code section 414(c)
(employees of partnerships, proprietorships, etc., under common control), using
the “at least 50 percent” ownership standard, within the meaning of Code Section
409A and Treasury Regulation section 1.409A-1(h)(3) or any successor thereto.

“Common Stock” will mean the $0.50 par value common stock of the Company.

“Corporation” will mean J. C. Penney Corporation, Inc.

“Disability” will mean disability as defined in any then effective long-term
disability plan maintained by the Company that covers You, or if such a plan
does not exist at any relevant time, “Disability” means Your permanent and total
disability within the meaning of section 22(e)(3) of the Code.

“Fair Market Value” of the Common Stock on any date will be the closing price on
such date as reported in the composite transaction table covering transactions
of New York Stock Exchange (“Exchange”) listed securities, or if such Exchange
is closed, or if the Common Stock does not trade on such date, the closing price
reported in the composite transaction table on the last trading date immediately
preceding such date, or such other amount as the Board may ascertain reasonably
to represent such fair market value; provided however, that such determination
will be in accordance with the requirements of Treasury Regulation section
1.409A-1(b)(5)(iv), or its successor.

“Good Reason” will mean, following a Change in Control, a condition resulting
from any of the actions listed below taken by the Company that is directed at
You without Your consent:
 

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(a)
a material decrease in Your salary or incentive compensation opportunity (the
amount paid at target as a percentage of salary under the Corporation’s
Management Incentive Compensation Program or any successor program then in
effect); or

(b)
failure by the Company to pay You a material portion of Your current base
salary, or incentive compensation within seven days of its due date; or

(c)
a material adverse change in reporting responsibilities, duties, or authority;
or

(d)
a material diminution in the authority, duties, or responsibilities of the
supervisor to whom You are required to report without a corresponding increase
in Your authority, duties or responsibilities; or

(e)
a requirement that You report to a corporate officer or employee other than the
Chief Executive Officer of the Company; or

(f)
a material diminution in the budget over which You retain authority; or

(g)
the Company requires You to change Your principal location of work to a location
more than 50 miles from the location thereof immediately prior to such change;
or

 
(h)
discontinuance of any material paid time off policy, fringe benefit, welfare
benefit, incentive compensation, equity compensation, or retirement plan
(without substantially equivalent compensating remuneration or a plan or policy
providing substantially similar benefits) in which You participate or any action
that materially reduces Your benefits or payments under such plans;

provided, however, that You must provide notice to the Corporation of the
existence of any condition described above within 90 days of the initial
existence of the condition, upon the notice of which the Corporation will have
30 days during which it or the Company may remedy the condition. Any separation
from service as a result of a Good Reason condition must occur as of the later
of (i) two years after the Change in Control, or (ii) 180 days after the initial
existence of the condition described in (a) through (h) above that constitutes
“Good Reason.”

“Involuntary Separation from Service” will mean Your separation from service due
to the independent exercise of the unilateral authority of the Company to
terminate Your services, other than due to Your implicit or explicit request,
where You were willing and able to continue performing services, within the
meaning of Code Section 409A and Treasury Regulation section 1.409A-1(n)(1) or
any successor thereto.

“Restricted Stock Unit” means an award that represents an unsecured promise by
the Company to issue a share of Common Stock to You subject to restrictions or a
substantial risk of forfeiture

“Retirement” will mean Your termination of employment with the Company other
than for Cause on or after the date You attain age 55 with at least 15 years of
service, or on or after You attain age 60 with at least 10 years of service.

Vesting of Your Restricted Stock Units
The Restricted Stock Units will vest, and the restrictions on Your Restricted
Stock Units will lapse, according to the following vesting schedule, PROVIDED
YOU REMAIN CONTINUOUSLY EMPLOYED BY THE COMPANY THROUGH THE VESTING DATE (unless
Your employment terminates due to Your Disability, death, or if You are party to
an Executive Termination Pay Agreement (“ETPA”), an Involuntary Separation from
Service without Cause as defined in the ETPA).

Vesting Date
Percent Vesting
May 20, 2015
33-1/3%
May 20, 2016
33-1/3%
May 20, 2017
33-1/3%

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Your vested Restricted Stock Units will be paid out in shares of Common Stock as
soon as practicable on or following the earlier of (i) Your termination of
employment as a result of Your Disability or death, or (ii) the applicable
vesting date provided in the vesting table above.  Notwithstanding the
foregoing, if You are a specified employee as defined under Section 409A of the
Code and the related Treasury regulations thereunder and any portion of Your
Restricted Stock Unit award is, or becomes subject to the requirements of
section 409A of the Code, Your vested Restricted Stock Units will be paid out in
shares of Common Stock as soon as practicable following the earlier of (i) the
date that is six months following Your termination of service due to Your
Retirement, (ii) the date of Your death, and (iii) the next applicable vesting
date provided in the vesting table above. You will not be allowed to defer the
payment of Your shares of Common Stock to a later date.

Dividend Equivalents
You will not have any rights as a stockholder until Your Restricted Stock Units
vest and You are issued shares of Common Stock in cancellation of the vested
Restricted Stock Units. You will, however, accrue dividend equivalents on the
unvested Restricted Stock Units in the amount of any quarterly dividend declared
on the Common Stock. Dividend equivalents will continue to accrue until Your
Restricted Stock Units vest and You receive actual shares of Common Stock in
cancellation of the vested Restricted Stock Units. The dividend equivalents will
be credited as additional Restricted Stock Units in Your account to be paid out
in shares of Common Stock on the vesting date along with the Restricted Stock
Units to which they relate. The number of additional Restricted Stock Units to
be credited to Your account will be determined by dividing the aggregate
dividend payable with respect to the number of Restricted Stock Units in Your
account by the Fair Market Value of the Common Stock on the dividend record
date. The additional Restricted Stock Units credited to Your account are subject
to all of the terms and conditions of this Restricted Stock Unit award and You
will forfeit Your additional Restricted Stock Units in the event that You
forfeit the Restricted Stock Units to which they relate.
Acceleration of Vesting
If prior to May 20, 2017 Your employment is terminated as a result of Your death
or Disability, or in the event of an Involuntary Separation from Service by the
Company for any reason other than Cause prior to May 20, 2017, then the
restrictions will lapse with respect to all unvested Restricted Stock Units and
all unvested Restricted Stock Units will become fully vested and nonforfeitable
on the date of any such termination of Your employment. The number of Restricted
Stock Units to which You are entitled will be distributed as provided in
“Vesting of Your Restricted Stock Units” above.

If following a Change in Control You terminate Your employment for Good Reason,
then the restrictions will lapse with respect to all unvested Restricted Stock
Units and the Restricted Stock Units will become fully vested and nonforfeitable
on the date of any such termination of Your employment. The number of Restricted
Stock Units to which You are entitled will be distributed as provided in
“Vesting of Your Restricted Stock Units” above.
You may designate a beneficiary to receive any shares of Common Stock in which
You may vest if Your employment is terminated as a result of Your death by
completing a beneficiary designation form in such form as may be prescribed from
time to time by the Company. The beneficiary listed on Your beneficiary
designation form will receive the vested shares covered by the Restricted Stock
Unit award in the case of termination of employment due to death.

If You experience an Involuntary Separation from Service for Cause, or You
voluntarily resign, any unvested Restricted Stock Units will be cancelled on the
effective date of Your employment termination and a result of the Involuntary
Separation from Service for Cause or Your resignation.
Recoupment                                        
Equity awards are subject to the Company’s currently effective recoupment
policy, as that policy may be amended from time to time by the Board or
applicable statute or regulations. Under the recoupment policy, the Human
Resources and Compensation Committee of the Board may require the Company, to
the extent permitted by law, to cancel any of Your outstanding equity awards,
including both vested and unvested awards, and/or to recover financial proceeds
realized from the exercise of awards in the event of (i) a financial restatement
arising out of the willful actions, including without limitation fraud or
intentional misconduct, or gross negligence of any participant in the Company’s
compensation plans or programs, including without limitation, cash bonus and
stock incentive plans, welfare plans, or deferred compensation plans, or (ii)
other events as established by applicable statute or regulations.

Taxes and Withholding
The vesting of any Restricted Stock Units and the related issuance of shares of
Common Stock will be subject to the satisfaction of all applicable federal,
state, and local income and employment tax withholding requirements. Your
withholding rate with respect to this award may not be higher than the minimum
statutory rate. The Company will retain and cancel the number of issued shares
equal to the value of the required minimum tax withholding in payment of the
required minimum tax withholding due or will require that You satisfy the
required minimum tax withholding, if any, or any other applicable federal,
state, or local income or employment tax withholding by such other means as the
Company, in its sole discretion, deems reasonable.

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Changes in Capitalization and Similar Changes
In the event of any change in the value or number of shares of Common Stock
outstanding, or the assumption and conversion of this Restricted Stock Unit
award, by reason of any stock dividend, stock split, dividend or distribution,
whether in cash, shares or other property (other than a normal cash dividend),
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination or exchange of shares, an equitable and proportionate adjustment
will be made to the number and class of shares which may be issued on vesting of
the Restricted Stock Units in this Notice.

Miscellaneous

(a)
Dispute Resolution. Any dispute between the parties under this Notice will be
resolved (except as provided below) through informal arbitration by an
arbitrator selected under the rules of the American Arbitration Association for
arbitration of employment disputes (located in the city in which the Company’s
principal executive offices are based) and the arbitration will be conducted in
that location under the rules of said Association. Each party will be entitled
to present evidence and argument to the arbitrator. The arbitrator will have the
right only to interpret and apply the provisions of this Notice and may not
change any of its provisions. The arbitrator will permit reasonable pre-hearing
discovery of facts, to the extent necessary to establish a claim or a defense to
a claim, subject to supervision by the arbitrator. The determination of the
arbitrator will be conclusive and binding upon the parties and judgment upon the
same may be entered in any court having jurisdiction thereof. The arbitrator
will give written notice to the parties stating the arbitrator’s determination,
and will furnish to each party a signed copy of such determination. The expenses
of arbitration will be borne equally by the Company and You or as the arbitrator
equitably determines consistent with the application of state or federal law;
provided, however, that Your share of such expenses will not exceed the maximum
permitted by law. To the extent applicable, in accordance with Code section 409A
and Treasury Regulation section 1.409A-3(i)(1)(iv)(A) or any successor thereto,
any payments or reimbursement of arbitration expenses which the Company is
required to make under the foregoing provision will meet the requirements below.
The Company will reimburse You for any such expenses, promptly upon delivery of
reasonable documentation, provided, however, all invoices for reimbursement of
expenses must be submitted to the Company and paid in a lump sum payment by the
end of the calendar year following the calendar year in which the expense was
incurred. All expenses must be incurred within a 20 year period following Your
separation from service as defined in section 409A of the Code and the
applicable Treasury regulations thereunder. The amount of expenses paid or
eligible for reimbursement in one year under this Section governing the
resolution of disputes under this Notice will not affect the expenses paid or
eligible for reimbursement in any other taxable year. The right to payment or
reimbursement under this Section governing the resolution of disputes under this
Notice will not be subject to liquidation or exchange for another benefit.

Any arbitration or action pursuant to this Section governing the resolution of
disputes under this Notice will be governed by and construed in accordance with
the substantive laws of the State of Delaware and, where applicable, federal
law, without giving effect to the principles of conflict of laws of such State.
The mandatory arbitration provisions of this Section will supersede in their
entirety the J.C. Penney Alternative, a dispute resolution program generally
applicable to employment terminations.

(b)
No Right to Continued Employment. Nothing in this award will confer on You any
right to continue in the employ of the Company or affect in any way the right of
the Company to terminate Your employment without prior notice, at any time, for
any reason, or for no reason.

(b)
Unsecured General Creditor. Neither You nor Your beneficiaries, heirs,
successors, and assigns will have a legal or equitable right, interest or claim
in any property or assets of the Company. For purposes of the payments under
this Notice, any of the Company's assets will remain assets of the Company and
the Company's obligation under this Notice will be merely that of an unfunded
and unsecured promise to issue shares of Common Stock to You in the future
pursuant to the terms of this Notice.

(c)
Stockholder Rights. You (including for purposes of this Section, Your legatee,
distributee, guardian, legal representative, or other third party, as the Board
or its designee may determine) will have no stockholder rights with respect to
any shares of Common Stock subject to the award under this Notice until such
shares of Common Stock are issued to You. Shares of Common Stock will be deemed
issued on the date on which they are issued in Your name.

(d)
Indemnification. Each person who is or will have been a member of the Board or
any committee of the Board will be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense that may be imposed

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on or reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be made party or in which he may be
involved by reason of any determination, interpretation, action taken or failure
to act under this Notice and against and from any and all amounts paid by him in
settlement thereof, with the Company’s approval, or paid by him in satisfaction
of any judgment in any such action, suit or proceeding against him, provided he
will give the Company an opportunity, at its own expense, to handle and defend
the same before he undertakes to handle and defend it on his own behalf. The
foregoing right of indemnification will not be exclusive and will be independent
of any other rights of indemnification to which such persons may be entitled
under the Company’s Certificate of Incorporation, By-laws, by contract, as a
matter of law, or otherwise.

(e)
Transferability of Your Restricted Stock Units. No unearned Restricted Stock
Unit under this Notice, may be sold, assigned, pledged, or transferred other
than by will or the laws of descent and distribution and any attempt to do so
will be void. To the extent and under such terms and conditions as determined by
the Board or a subcommittee thereof vested with such authority, You may assign
or transfer the Restricted Stock Units granted under this Notice without
consideration (i) to Your spouse, children, or grandchildren (including any
adopted and step children or grandchildren), parents, grandparents, or siblings,
(ii) to a trust for Your benefit or for the benefit of one or more of the
persons referred to in clause (i), (iii) to a partnership, limited liability
company or corporation in which You or the persons referred to in clause (i) are
the only partners, members or shareholders, or (iv) for charitable donations;
provided that any such assignee shall be bound by and subject to all of the
terms and conditions of this Notice and will, to the extent necessary, execute
an agreement satisfactory to the Company evidencing such obligations; and
provided further that the assignee will remain bound by the terms and conditions
of this Notice. The Company shall cooperate with any assignee and the Company’s
transfer agent in effectuating any transfer permitted herein.

(f)
Cessation of Obligation. The Company's liability will be defined only by this
Notice. Upon distribution to You of all shares of Common Stock due under this
Notice, all responsibilities and obligations of the Company will be fulfilled
and You will have no further claims against the Company for further performance
under this Notice.

(g)
Effect on Other Benefits. The value of the shares of Common Stock covered by
this Restricted Stock Unit award will not be included as compensation or
earnings for purposes of any other compensation, Retirement, or benefit plan
offered to Company associates.

(h)
Administration. This Notice will be administered by the Board, or its designee.
The Board, or its designee, has full authority and discretion to decide all
matters relating to the administration and interpretation of this Notice. The
Board’s, or its designee’s, determinations will be final, conclusive, and
binding on You and Your heirs, legatees and designees.

(i)
Entire Notice and Governing Law. This Notice constitutes the entire agreement
between You and the Company with respect to the subject matter hereof and
supersedes in its entirety all prior undertakings and agreements between You and
the Company with respect to the subject matter hereof, and may not be modified
adversely to Your interest except by means of a writing signed by the You and
the Company. Nothing in this Notice (except as expressly provided herein) is
intended to confer any rights or remedies on any person other than You and the
Company. This Restricted Stock Unit award will be governed by the internal laws
of the State of Delaware, regardless of the dictates of Delaware conflict of
laws provisions.

(j)
Interpretive Matters. The captions and headings used in this Notice are inserted
for convenience and will not be deemed a part of the award or this Notice for
construction or interpretation.

(k)
Notice. For all purposes of this Notice, all communications required or
permitted to be given hereunder will be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof confirmed), or five business days after
having been mailed by United States registered or certified mail, return receipt
requested, postage prepaid, or three business days after having been sent by a
nationally recognized overnight courier service, addressed to the Company at its
principal executive office, c/o the Company’s General Counsel, and to You at
Your principal residence, or to such other address as any party may have
furnished to the other in writing and in accordance herewith, except that
notices of change of address will be effective only on receipt.

(l)
Severability and Reformation. The Company intends all provisions of this Notice
to be enforced to the fullest extent permitted by law. Accordingly, should a
court of competent jurisdiction determine that the scope of any provision of
this Notice is too broad to be enforced as written, the court should reform the
provision to such narrower scope as it determines to be enforceable. If,
however, any provision of this Notice is held to be wholly illegal, invalid, or
unenforceable under

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present or future law, such provision will be fully severable and severed, and
this Notice will be construed and enforced as if such illegal, invalid, or
unenforceable provision were never a part hereof, and the remaining provisions
of this Notice will remain in full force and effect and will not be affected by
the illegal, invalid, or unenforceable provision or by its severance.

(m)
Counterparts. This Notice may be executed in several counterparts, each of which
will be deemed to be an original, but all of which together will constitute one
and the same Notice.

(n)
Amendments; Waivers. This Notice may not be modified, amended, or terminated
except by an instrument in writing, approved by the Company and signed by You
and the Company. Failure on the part of either party to complain of any action
or omission, breach or default on the part of the other party, no matter how
long the same may continue, will never be deemed to be a waiver of any rights or
remedies hereunder, at law or in equity. The Executive or the Company may waive
compliance by the other party with any provision of this Notice that such other
party was or is obligated to comply with or perform only through an executed
writing; provided, however, that such waiver will not operate as a waiver of, or
estoppel with respect to, any other or subsequent failure.

(o)
No Inconsistent Actions. The parties hereto will not voluntarily undertake or
fail to undertake any action or course of action that is inconsistent with the
provisions or essential intent of this Notice. Furthermore, it is the intent of
the parties hereto to act in a fair and reasonable manner with respect to the
interpretation and application of the provisions of this Notice.

(p)
No Issuance of Certificates. To the extent this Notice provides for issuance of
stock certificates to reflect the issuance of shares of Common Stock in
connection with this award, the issuance may be effected on a non-certificate
basis, to the extent not prohibited by applicable law or the applicable rules of
any stock exchange on which the Common Stock is traded.

(q) Compliance with Applicable Legal Requirements. Notwithstanding anything
contained herein to the contrary, the Company will not be required to sell or
issue shares of Common Stock in connection with the award under this Notice if
the issuance thereof would constitute a violation by You or the Company of any
provisions of any law or regulation of any governmental authority or any
national securities exchange or inter-dealer quotation system or other forum in
which shares of Common Stock are quoted or traded (including without limitation
Section 16 of the Securities Exchange Act of 1934); and, as a condition of any
sale or issuance of shares of Common Stock under this Notice, the Board or its
designee may require such agreements or undertakings, if any, as the Board or
its designee may deem necessary or advisable to assure compliance with any such
law or regulation. The grant and operation of this award, as evidenced by this
Notice, and the obligation of the Company to sell and deliver shares of Common
Stock, will be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as may
be required.

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