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Edward J. Record                                    January 28, 2014
 

Edward:
                        
I am pleased to extend this offer of employment as Executive Vice President,
Chief Financial Officer with J. C. Penney Company, Inc. (“J.C. Penney”),
reporting to me. Your office will be located in the Company’s headquarters
building at 6501 Legacy Drive, Plano Texas 75024. Your start date will be
determined based on a mutually agreeable date. The components of your offer are
below.

Salary Compensation
Your annualized base salary will be $750,000.

Performance-Based Annual Bonus
You are also eligible to participate in a company performance-based annual bonus
program. Your target bonus opportunity is 75% of your base salary and your
maximum bonus opportunity is 150% of your base salary. Assuming employment for a
full fiscal year, your bonus amount at target would be $562,500, for total
annual earnings of $1,312,500. Should the company achieve maximum results, your
bonus would be $1,125,000 for total annual earnings of $1,875,000.

For 2014, your target bonus will be prorated based upon the date that your
employment commences and your actual bonus will be no less than 50% of the
prorated target amount. The timing of your bonus payout will be consistent with
the standard payout cycle for bonuses for the 2014 fiscal year.

Inducement Awards
In addition to your base salary and annual bonus, you will receive a one-time
cash sign-on bonus in the amount of $1,500,000 less applicable taxes, within 60
days of the date your employment commences.  To receive this sign-on bonus, you
must sign and return the attached sign-on bonus agreement. The $1,500,000
sign-on bonus will be reduced by the target value of any equity awards at your
current employer that vest on or before your start date. The value of the equity
awards will be based on the closing price of SSI stock as of 1/10/14 ($21.11).
The cash sign-on bonus will also be reduced by the amount of any annual
incentive (bonus) compensation paid by your current employer for your
performance in the 2013 fiscal year if paid out prior to your start date.

As a further inducement to your acceptance of this offer, after you commence
employment with JCPenney, you will receive an equity award having a fair market
value of $2,000,000 on the date of grant. The award will be delivered 100% as
time-based restricted stock units (“TBRSUs”). The TBRSUs will vest one-third per
year over three years, and will be subject to the other terms and conditions set
forth in the notice of grant relating to your award.
 
The grant date for your equity inducement award is expected to be the third full
trading date following the date of public release of Company earnings for the
fiscal quarter in which your employment begins.

Long-term Incentive Awards
Your position entitles you to participate in J.C. Penney’s Long-Term Incentive
Award Program. Long-term incentive awards are made on an annual basis, typically
in the first quarter, and are subject to approval by the Human Resources and
Compensation Committee (“HRCC”) of the Board of Directors.

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Award amounts are determined based on position and individual performance. Past
awards have consisted of stock options, time-based restricted stock units, and
performance-based restricted stock units.  

Relocation
To assist with your move, JCPenney will provide relocation benefits as specified
in the attached Executive Level Homeowner Relocation Guide. A representative
will be contacting you to discuss and coordinate your move.

Benefits
We offer a comprehensive benefits package. A listing of our benefit programs is
attached. In addition to the standard benefits, JCPenney provides an allowance
of up to $3,000 for an annual health exam.

The terms and conditions of this offer letter supersede any previous
representations concerning any terms or conditions of your employment with J.C.
Penney.  Additionally, this offer, including referenced agreements, is governed
by federal law and the laws of the State of Texas, without regard to choice of
law provisions of any other state. While we are confident that we will have a
mutually beneficial employment relationship, employment with J.C. Penney is
voluntary and at-will and does not create a contract for employment. Under this
relationship, J.C. Penney may, at any time, decide to end an individual’s
employment with or without cause, prior notice or discipline at J.C. Penney’s
sole discretion. Likewise, any employee is free to end his or her employment at
any time for any reasons with or without notice. Nothing in this offer or any
attached agreement is intended to alter the at-will employment relationship.

This offer of employment is expressly contingent upon J.C. Penney’s receiving
the following:

•
I-9 Required documentation - Please remember to bring documentation to support
the I-9 Statement that shows your eligibility to work in the United States. A
list of acceptable documents is attached for your review. There is no need to
print this form out, but please use as reference. You will complete this form
electronically on your first day.

•
Acceptable results from satisfactory completion of a background investigation. 

•
Your signed agreement to respect confidential information (this agreement is
attached to your offer letter).

•
Your signed agreement to participate in the J.C. Penney Binding Arbitration
Program. This agreement can be found at
www.jcpenney.net/associate_arbitration_agreement. You will sign this document
electronically on your first day of employment.

•
Your signed agreement to certify your compliance with J.C. Penney’s Statement of
Business Ethics. The Statement of Business Ethics can be found at
http://phx.corporate-ir.net/External.Fileitem=UGFyZW50SUQ9MTQyNjY0 fENoa W
xkSUQ9LTF8VHlwZT0z&t=1. You will sign the associated Certificate of Compliance
on your first day of employment.

•
Satisfactory assurance that you are not subject to any non-compete or other
restrictive covenant that could impair your ability to perform the job
responsibilities of the position you are offered.  If you are subject to any
such restrictions, please provide us with a copy of relevant documents at your
earliest convenience.

If any one of the above conditions is not satisfied this offer shall not be
effective.

Please confirm your acceptance of this offer by signing below and returning the
signed offer letter along with signed agreements to Brynn Evanson (email:
bevanson@jcp.com), EVP, Human Resources.

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We are excited about the opportunity to work with you and welcome you to the
JCPenney team!  I look forward to partnering with you as we work to return to
profitable growth.

Regards,

/s/ Myron E. (Mike) Ullman, III

Myron E. (Mike) Ullman, III
Chief Executive Officer

J.C. Penney
6501 Legacy Drive
Plano, TX, 75024
www.jcp.com

My signature acknowledges that I am accepting your offer of employment as
outlined in the offer letter. I acknowledge that this is not a contract of
employment.

Name (Print):    Edward J. Record                

Signature:    /s/ Edward J. Record             

Date:        2/12/2014                    

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J.C. Penney Company, Inc.
Agreement to Respect Confidential Information
 
 
Congratulations and welcome to J.C. Penney! We are pleased and excited that you
have agreed to join our team.
 
While you have been hired based on your prior accomplishments and experiences,
we ask that you do not bring any confidential business information with you from
any prior employer(s). Confidential information is information that may be
marked as “confidential”, “proprietary” or “privileged” or any other business
information that may not be known to the public. While bringing such information
to J.C. Penney may seem innocent, doing so can expose both you and J.C. Penney
to civil and criminal liability.
 
The type of confidential information that should not be shared with us is the
same type of information that J.C. Penney would not want you to share with our
competitors. If you have any questions whether the information you have from any
prior employer(s) is confidential information, please contact your Human
Resources Representative to discuss.
  
Please sign below to acknowledge your understanding and agreement.
  
Name (Print):    Edward J. Record                

Signature:    /s/ Edward J. Record            

Date:        2/12/2014                    

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J. C. Penney Company, Inc.
Sign-On Bonus Agreement

In addition to your base salary and annual bonus, you will receive a one-time
inducement cash sign-on bonus in the amount of $1,500,000 less applicable taxes,
within 60 days of the date your employment commences. The $1,500,000 sign-on
bonus will be reduced by the target value of any equity awards at your current
employer that vest on or before your start date. The value of the equity awards
will be based on the closing price of SSI stock as of 1/10/14 ($21.11). The cash
sign-on bonus will also be reduced by the amount of any annual incentive (bonus)
compensation paid by your current employer for your performance in the 2013
fiscal year if paid out prior to your start date.

By accepting this bonus and signing the agreement below, if you voluntarily
terminate your employment with J.C. Penney Company, Inc. (“J.C. Penney”) or your
employment is terminated for cause, including specifically, a breach of any of
J.C. Penney’s policies, practices, procedures or Statement of Business Ethics as
determined by J.C. Penney, within 12 months of your start date, you agree to
reimburse J.C. Penney for a pro-rata portion of the sign-on bonus according to
the following:

•
The amount of the sign-on bonus you will be required to reimburse J.C. Penney
will be determined by multiplying the amount of the sign-on bonus you received
by a fraction

◦
The numerator of which is the number of whole calendar months that remain
between the date of your termination and the first anniversary of your start
date, and

◦
The denominator of which is 12

•
You will not be required to reimburse J.C. Penney for any portion of your
sign-on bonus if your employment is involuntarily terminated by J.C. Penney for
any reason other than for cause, or if your employment is terminated as a result
of your death or disability.

To the extent permitted by law, you agree that J.C. Penney may deduct
reimbursement payments from your final paycheck and/or vacation payout. If
reimbursement payments are not timely paid, J.C. Penney shall be entitled to
recover reasonable collection agency fees and attorney's fees incurred by J.C.
Penney because of such noncompliance. Nothing in this agreement is intended to
alter the at-will employment relationship between you and J.C. Penney.
 
Name (Print):    Edward J. Record                

Signature:    /s/ Edward J. Record             

Date:        2/12/2014                    

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