Exhibit 10.1


                                                              Exhibit
      10.1

    JCPenney             Notice
      of 2008
      Stock Option Grant 

    
       

      J.
        C. Penney Company, Inc.

    

    
      
        
          	
                  Name

                  [Associate
                    Name]

                	
                   Employee
                    ID

                  [EEID] 

                
	
                  Date
                    of
                    Grant

                  [Grant
                    Date]

                	
                  Option
                    Grant Price Per Share

                   [Grant
                    Price]

                	
                  Number
                    of NSO Shares Granted

                  [Grant
                    Amount] 

                


        
2005
        Equity

    

    Compensation
      Plan

    
      
        

      

    

    This
      Notice of
      Non-Qualified (also known as "Non-Statutory") 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. This option is subject to all the terms, rules,
      and conditions of the J. C. Penney Company, Inc. 2005 Equity Compensation Plan
      (“Plan”) and the implementing resolutions (“Resolutions”) approved by the Human
      Resources and Compensation Committee of the Board of Directors. Capitalized
      terms not otherwise defined herein shall have the respective meanings assigned
      to them in the Plan and the Resolutions. In the event of a change in the
      capitalization of the Company or other similar event, the option grant price
      and
      number of shares shall be adjusted as provided in the Plan.

    


    Terms
      of Exercise

    


    Effective
      Exercise Date

    


    When
      an option
      exercise instruction is given in conjunction with a sell order for the
      underlying stock that is an Exercise-and-Sell to Cover , an Exercise-and-Sell
      Order, a Limit Order or a Good ‘til Cancelled Order, the effective exercise date
      shall be the date on which such sale order is executed. For a Cash Payment
      (Exercise and Hold) transaction, the effective exercise date shall be the date
      the requisite funds are received by the Company at its home office in Plano,
      Texas, or such other location as the Company may designate, or by a third party
      duly designated by the Company at the offices of such third party. For a Stock
      Payment transaction, the effective exercise date shall be the date the properly
      completed option exercise form/instructions and any necessary accompanying
      documents and payment are received by the Company at its home office in Plano,
      Texas, or such other location as the Company may designate, or by a third party
      duly designated by the Company at the offices of such third party. Exercise
      instructions received after the close of the New York Stock Exchange for the
      day
      shall be deemed received as of the opening of the next Business Day (a “Business
      Day” being any day on which the New York Stock Exchange is open and operating).
      An effective exercise date shall never mean a non-Business Day. If any
      "effective exercise date," as defined above, falls on a day Common Stock is
      not
      traded, all transactions shall be postponed until the next trading day, and
      the
      effective exercise date shall be deemed to be the next trading date, unless
      such
      day is after the Normal Expiration Date (as defined
      below), in which case the option shall expire.


    


    Transferability

    


    This
      option may be
      assigned or transferred by will or the laws of descent and distribution. No
      Stock Option shall be exercisable except by you or (a) upon your incapacity,
      by
      your guardian or legal representative, or (b) upon your death, by the
      beneficiary you have designated on the J. C. Penney Company Equity Plan
      Beneficiary Designation Form or in the absence of such beneficiary, your legal
      representative (collectively, "Legal Transferees").

    


    Date
      Option
      Becomes Exercisable

    


    This
      option shall
      become exercisable (“vest”) over a three-year period in accordance with the
      following schedule:

    


    
      	
              Normal
                Vesting Dates

            	
              Percent
                of this Option Grant Vesting

            
	
              March
                12,
                2009

            	
              33-1/3%

            
	
              March
                12,
                2010

            	
              33-1/3%

            
	
              March
                12,
                2011

            	
              33-1/3%

            


    

    


    This
      option shall
      be 100% vested on the third anniversary of the Date of Grant.

    


    However,
      100% of
      this option becomes immediately exercisable, without regard to these dates,
      upon
      a "Change of Control" (as defined in Attachment A) of the Company or an
      Involuntary Separation from Service without Cause under, and as defined in,
      the
      Executive Termination Pay Agreement, and a portion of this option becomes
      immediately exercisable, without regard to these dates, in the event of your
      employment termination due to Retirement, Disability, death, or job
      restructuring/reduction in force/unit closing as described below.



     

    Additional
      Exercise Terms Of This Option Are:

    


    While
      you are
      Employed

    


    While
      you are
      employed by the Company, subsidiary, or other entity affiliated with the
      Company, you may exercise vested options any time
on or after the
Normal Vesting
      Dates until the Expiration Date
      which is the 10th anniversary of the Date of Grant ("Normal
      Expiration Date"). 

     

    
      This
        option can be
        exercised by:

      


      · Cash
        Payment Method
        (Exercise-and-Hold)

      · Stock
        Payment
        Method

      · Exercise-and-Sell
        Method

      · Exercise-and-Sell
        To Cover Method

       

    

    After
      your
      Employment Termination

    


    In
      all
      cases, the option exercise period following termination of employment cannot
      extend beyond the applicable date described below or the Normal Expiration
      Date,
      whichever comes first.

    


    
      	
              1)

            	
              Retirement,
                Death, or Disability: If your employment terminates due to
                your:

            


    

    


    · Retirement
      at age 60 or more,

    · Retirement
      between ages 55 and 59 with at least 15 years of service, 

    · Death,
      or

    · Disability,

    


    before
      the final
Normal Vesting Date, you shall be entitled to a prorated number
      of stock options. The proration shall be based on the ratio of (a) the number
      of
      calendar days from the date of grant to the effective date of termination to
      (b)
      the total number of calendar days in the vesting period. The number of options
      that have already vested shall be subtracted from the prorated amount and the
      remaining prorated options shall become immediately exercisable. Any options
      which have not already vested or for which exercisability is not accelerated
      shall expire on such employment termination. 

    


    If
      your employment
      terminates due to any of the four circumstances listed above, all vested stock
      options may be exercised for a period of five years after employment termination
      or until the option’s Normal Expiration Date, whichever comes
      first. 

    


    2)
      Job
      Restructuring, Reduction in Force or Unit Closing: If your employment
      terminates due to a job restructuring, reduction in force or unit closing before
      the final Normal Vesting Date, you shall be entitled to a
      prorated number of stock options. The proration shall be based on the ratio
      of
      (a) the number of calendar days from the date of grant to the effective date
      of
      termination to (b) the total number of calendar days in the vesting period.
      The
      number of options that have already vested shall be subtracted from the prorated
      amount and the remaining prorated options shall become immediately exercisable.
      Any options which have not already vested or for which exercisability is not
      accelerated shall expire on such employment termination. 

    


    If
      your employment
      terminates due to a job restructuring, reduction in force or unit closing,
      all
      vested options may be exercised for a period of two years after employment
      termination or until the option’s Normal Expiration Date,
      whichever comes first.

    


    3) Resignation,
      Summary Dismissal or Resignation in Lieu of Summary Dismissal, Discretionary
      Dismissal or Resignation in Lieu of Discretionary Dismissal (excluding Reduction
      In Force or Unit Closing): If your employment terminates due to your
      resignation, summary dismissal or resignation in lieu of summary dismissal,
      discretionary dismissal or resignation in lieu of a discretionary dismissal,
      then this option shall expire as of the date of your employment
      termination.

     

     

    
      4) Involuntary Separation
        from Service without Cause under the Executive Termination Pay
        Agreement: If your employment terminates due to an Involuntary
        Separation from Service without Cause under, and as defined, in the Executive
        Termination Pay Agreement, any outstanding options will vest and become
        immediately exercisable 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
      your employment
      terminates due to an Involuntary Separation from Service without Cause under,
      and as defined in, the Executive Termination Pay Agreement, all vested stock
      options may be exercised for a period of 120 days after the effective date
      of
      employment termination or until the option’s Normal Expiration
      Date, whichever comes first. 

     

    


    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.

    
       

       

       

    


    Attachment
      A

    


    A
      Change of Control Event shall have occurred if there is a change of ownership,
      a
      change of effective control, or a change in ownership of a substantial portion
      of the assets of the Company (as “Company” is defined in the J. C. Penney
      Company, Inc. 2005 Equity Compensation Plan).

    


    
      	1.  	
              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.

            


    

    


    
      	2.  	
              Notwithstanding
                whether the Company has undergone a change of ownership, a change
                of
                effective control occurs (a) 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 (b) a majority of the Board of Directors
                is
                replaced within 12 months if not previously approved by a majority
                of the
                members. 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 Event, i.e. multiple change in control
                events.

            


    

    


    
      	3.  	
              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). 

    


    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.