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                                                                    Exhibit 4(s)

                                  $600,000,000

                           J. C. PENNEY COMPANY, INC.

                   5% CONVERTIBLE SUBORDINATED NOTES DUE 2008

                          REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

                                                                October 15, 2001
CREDIT SUISSE FIRST BOSTON CORPORATION
J. P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
FIRST UNION SECURITIES, INC.
HSBC SECURITIES (USA) INC.
ROBERTSON STEPHENS, INC.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
FAHNESTOCK & CO. INC.
THE WILLIAMS CAPITAL GROUP, L.P.
    c/o Credit Suisse First Boston Corporation,
      Eleven Madison Avenue,
         New York, N.Y. 10010-3629


Dear Sirs:

     J. C. Penney Company, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several initial purchasers (collectively, the
"Initial Purchasers") named in Schedule A to a purchase agreement dated as of
October 9, 2001 (the "Purchase Agreement"), upon the terms set forth therein,
$600,000,000 aggregate principal amount (plus up to an additional $50,000,000
principal amount) of its 5% Convertible Subordinated Notes due 2008 (the
"Initial Securities"). The Initial Securities will be convertible into shares of
common stock, 50(cent) par value per share, of the Company (the "Common Stock")
at the conversion price set forth in the Offering Circular dated October 9,
2001. The Initial Securities will be issued pursuant to an Indenture, dated as
of October 15, 2001 (the "Indenture"), among the Company and The Bank of New
York, as trustee (the "Trustee"). As an inducement to the Initial Purchasers to
enter into the Purchase Agreement, the Company agrees with the Initial
Purchasers, for the benefit of (i) the Initial Purchasers and (ii) the holders
of the Initial Securities and the Common Stock issuable upon conversion of the
Initial Securities (collectively, the "Securities") from time to time until such
time as such Securities have been sold pursuant to a Shelf Registration
Statement (as defined in Section 1 hereof) (each of the forgoing a "Holder" and
collectively the "Holders"), as follows:

     1. Shelf Registration. (a) The Company shall, at its cost, prepare and, as
promptly as practicable (but in no event more than 90 days after the first date
of original issuance of the Initial Securities (the "First Issue Date")) file
with the Securities and Exchange Commission (the "Commission"), and thereafter
use its best efforts to cause to be declared effective as soon as practicable
(but in no event more than 180 days after the First Issue Date), a registration
statement on Form S-3 (the "Shelf Registration Statement") relating to the offer
and sale of the Transfer Restricted Securities (as defined in Section 5 hereof)
by the Holders thereof from time to time in accordance with the methods of
distribution set forth in the Shelf Registration Statement and Rule 415 under
the Securities Act of 1933, as amended (the "Securities Act") (hereinafter, the
"Shelf Registration"); provided, however, that no Holder (other than an Initial
                       --------  -------
Purchaser) shall be entitled to have the Securities held by it covered by such
Shelf Registration Statement unless such Holder agrees in writing to be bound by
all the provisions of this Agreement applicable to such Holder.

     (b) The Company shall use its best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the prospectus included
therein (the "Prospectus") to be lawfully delivered by

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the Holders of the relevant Securities, for a period of two years (or for such
longer period if extended pursuant to Section 2(h) below) from the date of its
effectiveness or such shorter period that will terminate when all the Securities
covered by the Shelf Registration Statement (i) have been sold pursuant thereto
or (ii) are no longer restricted securities (as defined in Rule 144(k) under the
Securities Act, or any successor rule thereof), assuming for this purpose that
the Holders thereof are not affiliates of the Company (in any such case, such
period being called the "Shelf Registration Period"). The Company shall be
deemed not to have used its best efforts to keep the Shelf Registration
Statement effective during the requisite period if it voluntarily takes any
action that would result in Holders of Securities covered thereby not being able
to offer and sell such Securities during that period, unless (i) such action is
required by applicable law, (ii) such action is based upon an opinion of counsel
that such action is required by applicable law, or (iii) upon the occurrence of
any event contemplated by Section 2(b)(v) below, such action is taken by the
Company in good faith and for valid business reasons and the Company thereafter
complies with the requirements of Section 2(h) hereof.

     (c) Notwithstanding any other provisions of this Agreement to the contrary,
the Company shall cause the Shelf Registration Statement and the Prospectus and
any amendment or supplement thereto, as of the effective date of the Shelf
Registration Statement, amendment or supplement, (i) to comply in all material
respects with the applicable requirements of the Securities Act and the rules
and regulations of the Commission and (ii) not to contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

     (d) Each Holder of Transfer Restricted Securities (as defined in Section
5(d) below) wishing to sell Transfer Restricted Securities pursuant to the Shelf
Registration Statement and Prospectus agrees to deliver written notice to the
Company at least five (5) business days prior to any intended distribution of
Transfer Restricted Securities under the effective Shelf Registration Statement;
such notice (a "Notice and Questionnaire") shall be in such form and include
such information as the Company shall reasonably request to amend the Shelf
Registration Statement or supplement the Prospectus with respect to the intended
distribution of Transfer Restricted Securities by the Holder. From and after the
date the Shelf Registration Statement is declared effective, the Company shall,
as promptly as practicable after the date a Notice and Questionnaire is
delivered (and in any event within five (5) business days after such Notice and
Questionnaire is delivered): (i) if required by applicable law, file with the
Commission a post-effective amendment to the Shelf Registration Statement or
prepare and, if required by applicable law, file a supplement to the Prospectus
or a supplement or amendment to any document incorporated therein by reference
or file any other document required under the Securities Act so that the Holder
delivering such Notice and Questionnaire is named as a selling securityholder in
the Shelf Registration Statement and the Prospectus in such a manner as to
permit such Holder to deliver such Prospectus to purchasers of the Transfer
Restricted Securities in accordance with applicable law and, if the Company
shall file a post-effective amendment to the Shelf Registration Statement, use
its reasonable best efforts to cause such post-effective amendment to be
declared effective under the Securities Act as promptly as is practicable, but
in any event by the date that is forty-five (45) days after the date such
post-effective amendment is required by this clause to be filed; (ii) provide
such Holder copies of any documents filed pursuant to Section 1(d)(i); and (iii)
notify such Holder as promptly as practicable after the effectiveness under the
Securities Act of any post-effective amendment filed pursuant to Section
1(d)(i); provided, however that if such Notice and Questionnaire is delivered
         --------  -------
during a period in which the use of the Prospectus is suspended pursuant to
Section 2(h), the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of such suspension period. Any Holder who,
subsequent to the date the Shelf Registration Statement is declared effective,
provides a Notice and Questionnaire (whether or not such Holder had supplied a
Notice and Questionnaire at the time the Shelf Registration Statement was
declared effective) shall be named as a selling securityholder in the Shelf
Registration Statement and the Prospectus in accordance with the requirements of
this Section 1(d).

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     2. Registration Procedures. In connection with the Shelf Registration
contemplated by Section 1 hereof, the following provisions shall apply:

     (a) The Company shall (i) furnish to each Initial Purchaser, prior to the
filing thereof with the Commission, a copy of the Shelf Registration Statement
and each amendment thereof and each supplement, if any, to the prospectus
included therein and, in the event that an Initial Purchaser (with respect to
any portion of an unsold allotment from the original offering) is participating
in the Shelf Registration Statement, shall use its best efforts to reflect in
each such document, when so filed with the Commission, such comments as such
Initial Purchaser reasonably may propose; and (ii) include the names of the
Holders who propose to sell Securities pursuant to the Shelf Registration
Statement as selling security holders.

     (b) The Company shall give written notice to the Initial Purchasers and the
Holders of the Securities (which notice pursuant to clauses (ii)-(v) hereof
shall be accompanied by an instruction to suspend the use of the Prospectus
until the requisite changes have been made):

          (i) when the Shelf Registration Statement or any amendment thereto has
     been filed with the Commission and when the Shelf Registration Statement or
     any post-effective amendment thereto has become effective;

          (ii) of any request by the Commission for amendments or supplements to
     the Shelf Registration Statement or the prospectus included therein or for
     additional information;

          (iii) of the issuance by the Commission of any stop order suspending
     the effectiveness of the Shelf Registration Statement or the initiation of
     any proceedings for that purpose;

          (iv) of the receipt by the Company or its legal counsel of any
     notification with respect to the suspension of the qualification of the
     Securities for sale in any jurisdiction or the initiation or threatening of
     any proceeding for such purpose; and

          (v) of the happening of any event that requires the Company to make
     changes in the Shelf Registration Statement or the Prospectus in order that
     the Shelf Registration Statement or the Prospectus does not contain an
     untrue statement of a material fact nor omit to state a material fact
     required to be stated therein or necessary to make the statements therein
     (in the case of the Prospectus, in light of the circumstances under which
     they were made) not misleading.

     (c) The Company shall make every reasonable effort to obtain the withdrawal
at the earliest possible time, of any order suspending the effectiveness of the
Shelf Registration Statement.

     (d) The Company shall furnish to each Holder of Securities included within
the coverage of the Shelf Registration, without charge, at least one copy of the
Shelf Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Holder so requests in writing,
all exhibits thereto (including those, if any, incorporated by reference).

     (e) The Company shall, during the Shelf Registration Period, deliver to
each Holder of Securities included within the coverage of the Shelf
Registration, without charge, as many copies of the Prospectus (including each
preliminary prospectus) included in the Shelf Registration Statement and any
amendment or supplement thereto as such person may reasonably request. The
Company consents, subject to the provisions of this Agreement, to the use of the
Prospectus or any amendment or supplement thereto by each of the selling Holders
of the Securities in connection with the offering and sale of the Securities
covered by the Prospectus, or any amendment or supplement thereto, included in
the Shelf Registration Statement.

     (f) Prior to any public offering of the Securities pursuant to the Shelf
Registration Statement, the Company shall register or qualify or cooperate with
the Holders of the Securities included therein and their respective counsel in
connection with the registration or qualification of the Securities for offer
and sale under the securities or "blue sky" laws of such states of the United
States as any Holder of the Securities

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<PAGE>

reasonably requests in writing and do any and all other acts or things necessary
or advisable to enable the offer and sale in such jurisdictions of the
Securities covered by such Registration Statement; provided, however, that the
                                                   -----------------
Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified or (ii) take any action which
would subject it to general service of process or to taxation in any
jurisdiction where it is not then so subject.

     (g) The Company shall cooperate with the Holders of the Securities to
facilitate the timely preparation and delivery of certificates representing the
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered in such names as
the Holders may request a reasonable period of time prior to sales of the
Securities pursuant to the Shelf Registration Statement.

     (h) Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 2(b) above during the period for which the Company is
required to maintain an effective Shelf Registration Statement, the Company
shall as required hereby prepare and file a post-effective amendment to the
Shelf Registration Statement or an amendment or supplement to the Prospectus and
any other required document so that, as thereafter delivered to Holders or
purchasers of Securities, the Prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Company may
                                      --------  -------
delay filing and distributing any such supplement or amendment (and continue the
suspension of the use of the Prospectus) if the Company determines in good faith
that such supplement or amendment would, in the reasonable judgement of the
Company, (i) interfere with or affect the negotiation or completion of a
transaction that is being contemplated by the Company or (ii) involve initial or
continuing disclosure obligations that are not in the best interests of the
Company's stockholders at such time; provided, further, that neither such delay
                                     --------  -------
nor such suspension shall extend for a period of more than 45 consecutive days
or an aggregate of 120 days in any twelve-month period. If the Company notifies
the Initial Purchasers and the Holders in accordance with paragraphs (ii)
through (v) of Section 2(b) above to suspend the use of the Prospectus until the
requisite changes to the Prospectus have been made, then the Initial Purchasers
and the Holders shall suspend use of such prospectus, and the period of
effectiveness of the Shelf Registration Statement provided for in Section 1(b)
above shall be extended by the number of days from and including the date of the
giving of such notice to and including the date when the Initial Purchasers and
the Holders shall have received such amended or supplemented prospectus pursuant
to this Section 2(h).

     (i) Not later than the effective date of the Shelf Registration Statement,
the Company will provide CUSIP numbers for the Initial Securities and the Common
Stock registered under the Shelf Registration Statement, and provide the Trustee
with printed certificates for the Initial Securities, in a form eligible for
deposit with The Depository Trust Company.

     (j) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Shelf
Registration and will make generally available to its security holders (or
otherwise provide in accordance with Section 11(a) of the Securities Act) an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the Shelf
Registration Statement, which statement shall cover such 12-month period.

     (k) The Company shall cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended, (the "Trust Indenture Act") in a timely
manner and containing such changes, if any, as shall be necessary for such
qualification. In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall appoint a
new trustee thereunder pursuant to the applicable provisions of the Indenture.

     (l) The Company may require each Holder of Securities to be sold pursuant
to the Shelf Registration Statement to furnish to the Company such information
regarding the Holder and the

                                       4

<PAGE>

distribution of the Securities as the Company may from time to time reasonably
require for inclusion in the Shelf Registration Statement, and the Company may
exclude from such registration the Securities of any Holder that unreasonably
fails to furnish such information within a reasonable time after receiving such
request.

     (m) The Company shall enter into such customary agreements (including, if
requested, an underwriting agreement in customary form) and take all such other
actions, if any, as any Holder shall reasonably request in order to facilitate
the disposition of the Securities pursuant to the Shelf Registration.

     (n) The Company shall (i) make reasonably available for inspection by the
Holders, any underwriter participating in any disposition pursuant to the Shelf
Registration Statement and any attorney, accountant or other agent retained by
the Holders or any such underwriter, all relevant financial and other records,
pertinent corporate documents and properties of the Company and (ii) cause the
Company's officers, directors, employees, accountants and auditors to supply all
relevant information reasonably requested by the Holders or any such
underwriter, attorney, accountant or agent in connection with the Shelf
Registration Statement, in each case, as shall be reasonably necessary to enable
such persons, to conduct a reasonable investigation within the meaning of
Section 11 of the Securities Act; provided, however, that the foregoing
                                  --------  -------
inspection and information gathering shall be coordinated on behalf of the
Initial Purchasers by you and on behalf of the other parties, by one counsel
designated by and on behalf of such other parties as described in Section 3
hereof.

     (o) In the event of an underwritten offering, the Company shall cause (i)
its counsel to deliver an opinion and updates thereof relating to the Securities
in customary form addressed to such Holders and the managing underwriters, if
any, thereof, and dated, in the case of the initial opinion, the effective date
of such Shelf Registration Statement (it being agreed that the matters to be
covered by such opinion shall include, without limitation, the due incorporation
and good standing of the Company and its subsidiaries; the qualification of the
Company and its subsidiaries to transact business as foreign corporations; the
due authorization, execution and delivery of the relevant agreement of the type
referred to in Section 2(m) hereof; the due authorization, execution,
authentication and issuance, and the validity and enforceability, of the
Securities; the absence of material legal or governmental proceedings involving
the Company and its subsidiaries; the absence of material governmental approvals
required to be obtained in connection with the Shelf Registration Statement, the
offering and sale of the Securities, or any agreement of the type referred to in
Section 2(m) hereof; the compliance as to form of the Shelf Registration
Statement and any documents incorporated by reference therein and of the
Indenture with the requirements of the Securities Act and the Trust Indenture
Act, respectively; and, as of the date of the opinion and as of the effective
date of the Shelf Registration Statement or most recent post-effective amendment
thereto, as the case may be, the absence from the Shelf Registration Statement
and the prospectus included therein, as then amended or supplemented, and from
any documents incorporated by reference therein of an untrue statement of a
material fact or the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading (in
the case of any such documents, in the light of the circumstances existing at
the time that such documents were filed with the Commission under the Exchange
Act of 1934, as amended (the "Exchange Act")); (ii) its officers to execute and
deliver all customary documents and certificates and updates thereof requested
by any underwriters of the Securities; and (iii) its independent public
accountants and the independent public accountants with respect to any other
entity for which financial information is provided in the Shelf Registration
Statement to provide to the selling Holders of the applicable Securities and any
underwriter therefor a comfort letter in customary form and covering matters of
the type customarily covered in comfort letters in connection with primary
underwritten offerings, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards No. 72.

     (p) The Company will use its reasonable best efforts to (a) if the Initial
Securities have been rated prior to the initial sale of such Initial Securities,
confirm such ratings will apply to the Securities covered by a Registration
Statement, or (b) if the Initial Securities were not previously rated, cause the
Securities covered by a Registration Statement to be rated with the appropriate
rating agencies, if so requested by

                                       5

<PAGE>

holders of a majority in aggregate principal amount of Securities covered by the
Shelf Registration Statement, or by the managing underwriters, if any.

     (q) In the event that any broker-dealer registered under the Exchange Act
shall underwrite any Securities or participate as a member of an underwriting
syndicate or selling group or "assist in the distribution" (within the meaning
of the Conduct Rules (the "Rules") of the National Association of Securities
Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company will assist such broker-dealer in complying
with the requirements of such Rules, including, without limitation, by: (i) if
such Rules, including Rule 2720, shall so require, engaging a "qualified
independent underwriter" (as defined in Rule 2720) to participate in the
preparation of the Shelf Registration Statement relating to such Securities, to
exercise usual standards of due diligence in respect thereto and, if any portion
of the offering contemplated by such Registration Statement is an underwritten
offering or is made through a placement or sales agent, to recommend the yield
of such Securities; (ii) indemnifying any such qualified independent underwriter
to the extent of the indemnification of underwriters provided in Section 5
hereof; and (iii) providing such information to such broker-dealer as may be
required in order for such broker-dealer to comply with the requirements of the
Rules.

     (r) The Company will use its best efforts to cause all Underlying Shares to
be listed on the New York Stock Exchange.

     (s) The Company shall use its best efforts to take all other steps
necessary to effect the registration of the Securities covered by a Registration
Statement contemplated hereby.

     3. Registration Expenses. (a) All expenses incident to the Company's
performance of and compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement is ever filed or becomes
effective, including without limitation:

          (i) all registration and filing fees and expenses;

          (ii) all fees and expenses of compliance with federal securities and
     state "blue sky" or securities laws;

          (iii) all expenses of printing (including printing certificates for
     the Securities to be issued and printing of Prospectuses), messenger and
     delivery services and telephone;

          (iv) all fees and disbursements of counsel for the Company;

          (v) all application and filing fees in connection with listing the
     Securities on a national securities exchange or automated quotation system
     pursuant to the requirements hereof; and

          (vi) all fees and disbursements of independent certified public
     accountants of the Company (including the expenses of any special audit and
     comfort letters required by or incident to such performance).

The Company will bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any person, including special experts, retained by the Company.

     (b) In connection with the Shelf Registration Statement required by this
Agreement, the Company will reimburse the Initial Purchasers and the Holders of
Securities covered by the Shelf Registration Statement, for the reasonable fees
and disbursements of not more than one counsel, designated by the Holders of a
majority in principal amount of the Securities covered by the Shelf Registration
Statement (provided that Holders of Common Stock issued upon the conversion of
the Initial Securities shall be

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deemed to be Holders of the aggregate principal amount of Initial Securities
from which such Common Stock was converted) to act as counsel for the Holders in
connection therewith.

     4. Indemnification. (a) The Company agrees to indemnify and hold harmless
each Holder and each person, if any, who controls such Holder within the meaning
of the Securities Act or the Exchange Act (each Holder, and such controlling
persons are referred to collectively as the "Indemnified Parties") from and
against any losses, claims, damages or liabilities or any actions in respect
thereof (including, but not limited to, any losses, claims, damages, liabilities
or actions relating to purchases and sales of the Securities) to which each
Indemnified Party may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Shelf Registration Statement or prospectus
including any document incorporated by reference therein, or in any amendment or
supplement thereto or in any preliminary prospectus relating to the Shelf
Registration, or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse, as
incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action in respect thereof; provided, however, that
                                                       --------  -------
(i) the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Shelf Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to the Shelf Registration in
reliance upon and in conformity with information pertaining to such Holder and
furnished to the Company by or on behalf of such Holder and (ii) with respect to
any untrue statement or omission or alleged untrue statement or omission made in
any preliminary prospectus relating to the Shelf Registration Statement, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Holder from whom the person asserting any such losses, claims,
damages or liabilities purchased the Securities concerned, to the extent that a
prospectus relating to such Securities was required to be delivered by such
Holder under the Securities Act in connection with such purchase and any such
loss, claim, damage or liability of such Holder results from the fact that there
was not sent or given to such person, at or prior to the written confirmation of
the sale of such Securities to such person, a copy of the final prospectus if
the Company had previously furnished copies thereof to such Holder; provided
                                                                    --------
further, however, that this indemnity agreement will be in addition to any
-------  -------
liability which the Company may otherwise have to such Indemnified Party. In the
event of an underwritten public offering, the Company shall also enter into a
customary form of underwriting agreement.

     (b) Each Holder will indemnify and hold harmless the Company, its officers
and directors and each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act from and against any losses,
claims, damages or liabilities or any actions in respect thereof, to which the
Company or any such controlling person may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Shelf Registration
Statement or prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Shelf Registration, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein not misleading, but in each case only
to the extent that the untrue statement or omission or alleged untrue statement
or omission was made in reliance upon and in conformity with information
pertaining to such Holder and furnished to the Company by or on behalf of such
Holder; and, subject to the limitation set forth immediately preceding this
clause, shall reimburse, as incurred, the Company for any legal or other
expenses reasonably incurred by the Company or any such controlling person in
connection with investigating or defending any loss, claim, damage, liability or
action in respect thereof. This indemnity agreement will be in addition to any
liability which such Holder may otherwise have to the Company or any of its
controlling persons.







     (c) Promptly after receipt by an indemnified party under this Section 4 of
notice of the commencement of any action or proceeding (including a governmental
investigation), such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 4, notify the
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying

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party will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof the indemnifying party will not be liable to such
indemnified party under this Section 4 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action, and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.

     (d) If the indemnification provided for in this Section 4 is unavailable or
insufficient to hold harmless an indemnified party under subsections (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsection (a) or (b)
above in such proportion as is appropriate to reflect the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof) as well
as any other relevant equitable considerations. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or such Holder or such other indemnified party, as the case may
be, on the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim which is the subject of this subsection (d). Notwithstanding any other
provision of this Section 4(d), the Holders shall not be required to contribute
any amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Securities pursuant to the Shelf Registration
Statement exceeds the amount of damages which such Holders have otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if any, who
controls such indemnified party within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as such indemnified
party and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act shall have the same rights to
contribution as the Company.

     (e) The agreements contained in this Section 4 shall survive the sale of
the Securities pursuant to the Shelf Registration Statement and shall remain in
full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.

     5. Additional Interest Under Certain Circumstances. (a) Additional interest
(the "Additional Interest") with respect to the Initial Securities shall be
assessed as follows if any of the following events occur (each such event in
clauses (i) through (iii) below being herein called a "Registration Default"):

          (i) the Shelf Registration Statement has not been filed with the
     Commission by the 90th day after the First Issue Date;

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<PAGE>

          (ii) the Shelf Registration Statement has not been declared effective
     by the Commission by the 180th day after the First Issue Date;

          (iii) the Company fails with respect to a Holder of Notes that
     supplies the Notice and Questionnaire described in Section 1(d) above to
     amend or supplement the Shelf Registration Statement in the manner set
     forth in Section 1(d) above;

          (iv) the Shelf Registration Statement is declared effective by the
     Commission, but (A) the Shelf Registration Statement thereafter ceases to
     be effective or (B) the Shelf Registration Statement or the Prospectus
     ceases to be usable in connection with resales of Transfer Restricted
     Securities during the periods specified herein because the Company suspends
     the effectiveness of such Shelf Registration Statement beyond the periods
     set forth in Section 2(h) above; or

          (v) the Shelf Registration Statement is declared effective by the
     Commission, but the Prospectus ceases to be usable in connection with
     resales of Transfer Restricted Securities during the periods specified
     herein and the Company fails to cure by filing a post-effective amendment
     or report pursuant to the Exchange Act.

Each of the foregoing will constitute a Registration Default whatever the reason
for any such event and whether it is voluntary or involuntary or is beyond the
control of the Company or pursuant to operation of law or as a result of any
action or inaction by the Commission.

     Additional Interest shall accrue on the Initial Securities over and above
the interest set forth in the title of the Initial Securities from and including
the date on which any such Registration Default shall occur to but excluding the
date on which all such Registration Defaults have been cured, at a rate of 0.50%
per annum (the "Additional Interest Rate").

     (b) A Registration Default referred to in Section 5(a)(v) hereof shall be
deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related prospectus if such Registration Default
has occurred solely as a result of the filing of a post-effective amendment to
the Shelf Registration Statement to incorporate annual audited financial
information with respect to the Company where such post-effective amendment is
not yet effective and needs to be declared effective to permit Holders to use
the related prospectus; provided, however, that if such Registration Default
                        --------  -------
occurs for a continuous period in excess of 30 days, Additional Interest shall
be payable in accordance with the above paragraph from the day such Registration
Default occurs until such Registration Default is cured.

     (c) Any amounts of Additional Interest due pursuant to Section 5(a) will be
payable in cash on the regular interest payment dates with respect to the
Initial Securities. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest Rate by the principal amount of
the Initial Securities (or, in the case of Notes that have been converted into
Common Stock, by the product of (x) the then applicable Conversion Price (as
defined in the Indenture) of such shares of Common Stock (or, if no Notes are
then outstanding, the Conversion Price that would be in effect if any Notes were
then outstanding) and the number of such shares of Common Stock), further
multiplied by a fraction, the numerator of which is the number of days such
Additional Interest Rate was applicable during such period (determined on the
basis of a 360-day year comprised of twelve 30-day months), and the denominator
of which is 360.

     (d) "Transfer Restricted Securities" means each Security until (i) the date
on which such Security has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or (ii) the
date on which such Security is distributed to the public pursuant to Rule 144
under the Securities Act or is saleable pursuant to Rule 144(k) under the
Securities Act.

     6. Rules 144 and 144A. The Company shall use its best efforts to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder, make publicly available other
information so long as necessary to permit sales of their securities pursuant to
Rules 144 and

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<PAGE>

144A. The Company covenants that it will take such further action as any Holder
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Transfer Restricted Securities without registration under
the Securities Act within the limitation of the exemptions provided by Rules 144
and 144A (including the requirements of Rule 144A(d)(4)). The Company will
provide a copy of this Agreement to prospective purchasers of Securities
identified to the Company by the Initial Purchasers upon request. Upon the
request of any Holder, the Company shall deliver to such Holder a written
statement as to whether it has complied with such requirements, unless such a
statement has been included in the Company's most recent report required to be
filed pursuant to Section 13 or 15(d) under the Exchange Act. Notwithstanding
the foregoing, nothing in this Section 6 shall be deemed to require the Company
to register any of its securities pursuant to the Exchange Act.

     7. Underwritten Registrations. If any of the Transfer Restricted Securities
covered by the Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
administer the offering ("Managing Underwriters") will be selected by the
holders of a majority in aggregate principal amount of such Transfer Restricted
Securities to be included in such offering (provided that holders of Common
Stock issued upon conversion of the Initial Securities shall not be deemed
holders of Common Stock, but shall be deemed to be holders of the aggregate
principal amount of Initial Securities from which such Common Stock was
converted).

     No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Securities on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.

     8. Miscellaneous.

     (a) Remedies. The Company acknowledges and agrees that any failure by the
Company to comply with its obligations under Section 1 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Company's obligations under Sections 1 hereof. The
Company further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.

     (b) No Inconsistent Agreements. The Company will not on or after the date
of this Agreement enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof in any material respect. The
rights granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the Company's
securities under any agreement in effect on the date hereof.

     (c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the holders of a majority in principal amount of the Securities
affected by such amendment, modification, supplement, waiver or consents
(provided that holders of Common Stock issued upon conversion of Initial
Securities shall not be deemed holders of Common Stock, but shall be deemed to
be holders of the aggregate principal amount of Initial Securities from which
such Common Stock was converted). Without the consent of the Holder of each
Initial Security, however, no modification may change the provisions relating to
the payment of Additional Interest.

                                       10

<PAGE>

     (d) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, first-class mail, facsimile
transmission, or air courier which guarantees overnight delivery:

          (1) if to a Holder of the Securities, at the most current address
     given by such Holder to the Company.

          (2) if to the Initial Purchasers;

              Credit Suisse First Boston Corporation
              Eleven Madison Avenue
              New York, NY 10010-3629
              Fax No.:  (212) 325-8278
              Attention:  Transactions Advisory Group

     with a copy to:

              Dewey Ballantine LLP
              1301 Avenue of the Americas
              New York, New York 10019
              Fax No.: (212) 259-6333
              Attention: Morton A. Pierce

          (3) if to the Company, by mail, at its address as follows:

              J. C. Penney Company, Inc.
              P.O. Box 10001
              Dallas, Texas 75301-0001
              Attention: General Counsel

              if to the Company, by hand, facsimile or overnight courier, to its
     address as follows:

              J. C. Penney Company, Inc.
              6501 Legacy Drive
              Plano, Texas 75024-3698
              Fax No.: (972) 431 - 1977
              Attention: General Counsel

     with a copy in either case to:

              J. C. Penney Company, Inc.
              6501 Legacy Drive
              Plano, Texas 75024-3698
              Fax No.: (972) 431 - 2044
              Attention: Treasurer

     All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.

     (e) Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and

                                       11

<PAGE>

shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights or the
rights of Holders hereunder.

     (f) Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.

     (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.

     By the execution and delivery of this Agreement, the Company submits to the
nonexclusive jurisdiction of any federal or state court in the State of New
York.

     (j) Severability. If any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.

     (k) Securities Held by the Company. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities is required
hereunder, Securities held by the Company or its affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.

      [Remainder of Page Intentionally Left Blank; Signature Page Follows]


                                       12

<PAGE>

     If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the several Initial Purchasers and the Company in accordance with its terms.

                                       Very truly yours,

                                       J. C. PENNEY COMPANY, INC.


                                       by

                                             /s/ Robert B. Cavanaugh
                                             -----------------------------------
                                             Name:  Robert B. Cavanaugh
                                             Title: Executive Vice President
                                                    and Chief Financial Officer


Theforegoing Registration Rights Agreement is hereby
 confirmed and accepted as of the date first above written.

CREDIT SUISSE FIRST BOSTON CORPORATION
J. P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
FIRST UNION SECURITIES, INC.
HSBC SECURITIES (USA) INC.
ROBERTSON STEPHENS, INC.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
FAHNESTOCK & CO. INC.
THE WILLIAMS CAPITAL GROUP, L.P.
Acting on behalf of themselves and as the
 Representatives of the several Purchasers.

By: CREDIT SUISSE FIRST BOSTON CORPORATION


by

      /s/ David Russell
      ---------------------------------------
      Name:  David Russell
      Title: Managing Director


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