Notice of Performance-Contingent Stock Option Grant
[logo.jpg]
Name
[Participant Name]
Employee ID 
Date of Grant
[Grant Date]
Option Grant Price Per Share
[Grant Price]
Number of NSO Shares Granted
[Shares Granted]

--------------------------------------------------------------------------------

This Notice of Non-Qualified Performance-Contingent Stock Option ("NSO") gives
you the right to purchase the total number of shares of Common Stock of 50¢ par
value ("Common Stock") of J. C. Penney Company, Inc. ("Company") at the Option
Grant Price Per Share as shown above. Unless otherwise noted, this grant is
subject to all the terms, rules, and conditions of the J. C. Penney Company,
Inc. 2012 Long-Term Incentive Plan (“Plan”) and the implementing resolutions
(“Resolutions”) approved by the Human Resources and Compensation Committee
(“Committee”) of the Company’s Board of Directors (“Board”). Capitalized terms
not otherwise defined herein shall have the respective meanings assigned to them
in the Plan and the Resolutions.

Definitions

Performance Period – The Performance Period is the four (4) year period
beginning on the Date of Grant (“Grant Date”) listed above and ending with the
fourth anniversary of the Grant Date.

Stock Price Appreciation Metric – The closing stock price of the Company’s
Common Stock must be at least 50% higher than the Grant Price for a period of 20
consecutive trading days. For purposes of this Grant Notice, “trading day” shall
mean any day on which the Company’s Common Stock trades on the New York Stock
Exchange.

Vesting Terms
This NSO will vest on the first anniversary of the Grant Date (the “Vest date”)
and will become fully exercisable if the Stock Price Appreciation Metric is
satisfied during the Performance Period.

If the Stock Price Appreciation Metric is not achieved by the fourth anniversary
of the Grant Date, 100% of the award will be forfeited.

You must remain continuously employed by the Company through the Vest date
(unless your Employment terminates due to your Retirement, Disability, death,
job restructuring, reduction in force, or unit closing) to Vest in your NSO;
otherwise the NSOs granted will be forfeited.
  
Employment Termination

If your Employment terminates prior to the Vest date due to Retirement,
Disability, death, job restructuring, reduction in force, or unit closing , your
NSOs will vest on a pro-rata basis. The pro-rata portion of your NSOs that will
vest will be determined by multiplying the “Number of NSO Shares Granted” above
by a fraction, the numerator of which is the number of months from the Grant
Date to the effective date of your termination of Employment, inclusive, and the
denominator of which is 12.

If the Stock Price Appreciation Metric has not been met at the time of your
termination, any pro-rata vested NSOs will remain outstanding but not
exercisable unless the Stock Price Appreciation Metric is satisfied by the end
of the Performance Period. If the Stock Price Appreciation Metric has not been
met by the end of the Performance Period all pro-rata vested NSOs will be
forfeited. Any NSOs for which vesting is not accelerated will expire on such
Employment termination.

Notwithstanding the foregoing, if you are party to a termination agreement, and
your Employment is terminated due to an involuntary termination of Employment
without Cause under, and as defined in that termination agreement, then the
number of NSOs that will become exercisable will be determined according to the
terms of the underlying termination agreement subject to (a) the execution and
delivery of a release in such form as may be required by the Company and (b) the
expiration of the applicable revocation period for such release.

If you voluntarily terminate your Employment or your Employment is terminated
for Cause prior to your Vest date then all unvested and unexercised NSO will
expire as of the date of your Employment termination.
 
Notwithstanding anything in the Plan to the contrary, if you experience an
Employment Termination following a Change in Control before your Vest date, your
NSOs will vest on a pro-rata basis. The pro-rata portion of your NSOs that will
vest will be determined by multiplying the “Number of NSO Shares Granted” above
by a fraction, the numerator of which is the number of months from the Grant
Date to the effective date of your Employment Termination, inclusive, and the
denominator of which is 12. If the Stock Price Appreciation Metric has not been
met at the time of your Employment

1
(Rev. 03/2014) – SOPC2014MEU

--------------------------------------------------------------------------------

Termination, any pro-rata vested NSOs will remain outstanding but not
exercisable unless the Stock Price Appreciation Metric is satisfied by the end
of the Performance Period. If the Stock Price Appreciation Metric has not been
met by the end of the Performance Period all pro-rata vested NSOs will be
forfeited. Any NSOs for which vesting is not accelerated will expire on such
Employment Termination.

If the Stock Price Appreciation Metric is met and the NSOs become exercisable,
the NSOs will remain exercisable until the original expiration date of the NSO,
which will be 10 years from the date of grant.
Recoupment
As provided in Section 12.19 of the Plan this Award is subject to any
compensation recoupment policy adopted by the Board or the Committee prior to or
after the effective date of the Plan, and as such policy may be amended from
time to time after its adoption.

This stock option grant does not constitute an employment contract. It does not
guarantee employment for the length of the vesting period or for any portion
thereof.

2
(Rev. 03/2014) – SOPC2014MEU