8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

_________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 15, 2009

J. C. PENNEY COMPANY, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation ) 1-15274 (Commission File No.) 26-0037077 (IRS Employer  Identification No.)

6501 Legacy Drive Plano, Texas   (Address of principal executive offices)   75024-3698   (Zip code)

Registrant's telephone number, including area code: (972) 431-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry Into a Material Definitive Agreement.

The information set forth below under Item 3.02 regarding the Registration Rights Agreement is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

On May 18, 2009, J. C. Penney Company, Inc. (“Company”) made a contribution of 13,388,673 shares of the Company’s common stock of 50¢ par value (“Shares”) to the J. C. Penney Corporation, Inc. Pension Plan Trust (“Plan Trust”) in consideration for a credit against future funding obligations to the Plan Trust of the Company’s wholly owned subsidiary, J. C. Penney Corporation, Inc. The Shares were valued for purposes of the contribution at $25.3946 per share, or $340 million in the aggregate. The Shares were contributed to the Plan Trust in a private placement transaction made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. A copy of the Contribution Agreement related to the private placement of the Shares is furnished herewith as Exhibit 99.1.

On May 18, 2009, the Company also entered into a Registration Rights Agreement (“Registration Rights Agreement”) with Evercore Trust Company, N.A., in its capacity as the investment manager of the Shares. The Registration Rights Agreement provides, among other things, that the Company will prepare and file with the Securities and Exchange Commission (“SEC”) a shelf registration statement on Form S-3 covering the resale of the Shares by the Plan Trust. The Company must use its reasonable commercial efforts to cause such registration statement to remain continuously effective until the earlier of (a) the date on which all Shares are sold, and (b) the date which is 90 days after the date on which the number of Shares held by the Plan Trust is less than one percent of the Company’s outstanding common stock. The Company registered the resale of the Shares by the Plan Trust with the SEC on May 19, 2009.

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement filed as Exhibit 10.1 hereto and incorporated herein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

           (e) On May 15, 2009, the Company’s stockholders approved the J. C. Penney Company, Inc. 2009 Long-Term Incentive Plan (“2009 Plan”), which was submitted to stockholders for approval at the Company’s 2009 Annual Meeting of Stockholders. The 2009 Plan replaces the J. C. Penney Company, Inc. 2005 Equity Compensation Plan.

The 2009 Plan will be administered by, or under the direction of, a committee of the Board of Directors (“Committee”) constituted in such a manner as to comply at all times with Rule 16b-3 or any successor rule promulgated by the SEC under the Securities Exchange Act of 1934, as amended, and Section 162(m) of the Internal Revenue Code of 1986, as amended (“Code”).

The 2009 Plan allows for grants of (i) stock options, stock appreciation rights and stock awards (collectively, “Equity Awards”) and cash incentive awards (together, “Awards”) to associate participants selected by the Committee or its delegate and (ii) Equity Awards to non-associate Director participants. Under the 2009 Plan, Awards to associate participants are subject to such conditions as

continued employment, qualifying termination, passage of time and/or satisfaction of performance criteria as specified in the 2009 Plan or set by the Committee. The amounts of Awards granted will vary. The terms of each Equity Award will be set forth in a grant notice provided by the Company to the recipient of the Equity Award.

The maximum number of shares of the Company’s common stock that may be issued or delivered pursuant to Equity Awards granted under the 2009 Plan is 13,100,000. In no event may more than: (i) 5,900,000 shares of common stock be issued as stock awards over the term of the 2009 Plan; (ii) 5,000,000 shares of common stock be issued pursuant to incentive stock options within the meaning of Section 422 of the Code over the term of the 2009 Plan; or (iii) 3,000,000 shares of common stock be granted as Equity Awards, singly or in combination, to any participant in any two consecutive fiscal years. Cash incentive awards to any individual associate participant may not exceed the product of $2,000,000 and the number of years in the performance cycle.

The 2009 Plan was approved by the Company’s Board of Directors on March 26, 2009, subject to the approval of the Company’s stockholders. It became effective on May 15, 2009 and will expire (unless earlier terminated by the Board of Directors) on May 31, 2012.

The foregoing description of the 2009 Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the 2009 Plan. A copy of the 2009 Plan was filed as Annex A to the Company’s 2009 Notice of Annual Meeting of Stockholders and Proxy Statement filed on Schedule 14A with the SEC on March 31, 2009 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibit 10.1	Registration Rights Agreement dated May 18, 2009, by and between J. C. Penney Company, Inc. and Evercore Trust Company, N.A., as investment manager of a segregated account in the J. C. Penney Corporation, Inc. Pension Plan Trust.
	Exhibit 10.2	J. C. Penney Company, Inc. 2009 Long-Term Incentive Plan (incorporated by reference to Annex A to the Company's 2009 Notice of Annual Meeting of Stockholders and Proxy Statement filed on Schedule 14A, SEC File No. 001-15274).
	Exhibit 99.1	Contribution Agreement dated May 18, 2009, by and between J. C. Penney Company, Inc. and Evercore Trust Company, N.A., as investment manager of a segregated account in the J. C. Penney Corporation, Inc. Pension Plan Trust.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

J. C. PENNEY COMPANY, INC.
By:	/s/ Janet L. Dhillon
	Janet L. Dhillon
	Executive Vice President,
	General Counsel and Secretary

Date:  May 21, 2009

EXHIBIT INDEX

Exhibit Number		Description
	Exhibit 10.1	Registration Rights Agreement dated May 18, 2009, by and between J. C. Penney Company, Inc. and Evercore Trust Company, N.A., as investment manager of a segregated account in the J. C. Penney Corporation, Inc. Pension Plan Trust.
	Exhibit 10.2	J. C. Penney Company, Inc. 2009 Long-Term Incentive Plan (incorporated by reference to Annex A to the Company's 2009 Notice of Annual Meeting of Stockholders and Proxy Statement filed on Schedule 14A, SEC File No. 001-15274).
	Exhibit 99.1	Contribution Agreement dated May 18, 2009, by and between J. C. Penney Company, Inc. and Evercore Trust Company, N.A., as investment manager of a segregated account in the J. C. Penney Corporation, Inc. Pension Plan Trust.

EX-10.1

Exhibit 10.1

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT, dated as of May 18, 2009 (the “Agreement”), is made by and between J. C. PENNEY COMPANY, INC., a Delaware corporation, having an office at 6501 Legacy Drive, Plano, Texas 75024 (the “Company”), and EVERCORE TRUST COMPANY, N.A., solely in its capacity as duly appointed and acting investment manager (the “Manager”) of a segregated account held in the J. C. PENNEY CORPORATION, INC. PENSION PLAN TRUST (the “Trust”) created under the J. C. PENNEY CORPORATION, INC. PENSION PLAN (the “Plan”).

RECITALS

WHEREAS, the Company has agreed to contribute an aggregate of 13,388,673 shares (the “Registrable Shares”), of its Common Stock of 50¢ par value (“Common Stock”) to the Trust (the “Contribution”); and

WHEREAS, the Registrable Shares immediately following such Contribution will be held in a single segregated account in the Trust (the “Segregated Account”); and

WHEREAS, pursuant to the Investment Management Agreement, dated as of May 18, 2009, among the Manager, the Benefit Plans Investment Committee (the “Committee”) of J. C. Penney Corporation, Inc. (“JCPenney”), and JCPenney (the “Investment Management Agreement”), the Manager has been appointed as a “fiduciary” of the Trust, as defined in Section 3(21) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), but only to the extent of the assets in the Segregated Account, with the authority to act on behalf of the Trust with respect to all assets held in the Segregated Account; and

WHEREAS, the Company has agreed to grant certain registration rights with respect to the Registrable Shares held in the Segregated Account, on the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, pursuant to the Investment Management Agreement, the Manager has full power and authority to execute and deliver this Agreement for the benefit of the Trust and to take any actions required or permitted to be taken in connection with this Agreement.

NOW, THEREFORE, in consideration of the premises and mutual promises set forth herein, the parties hereto hereby agree as follows:

1.    Registration; Compliance With the Securities Act.

1.1Registration Procedures and Expenses.  The Company hereby agrees that it shall:

(a)prepare and file with the Securities and Exchange Commission (the “SEC”), as soon as reasonably practicable after the date of the Contribution, but in no event more than 30 days after the Contribution, a shelf registration statement on Form S-3 covering the Registrable Shares, except to the extent it has an existing shelf registration statement covering the Common Stock which may be used for the purposes contemplated herein (such new or existing registration statement and any successor registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), hereinafter referred to as the “Registration Statement”), to enable the Manager to sell the Registrable Shares from time to time in the manner contemplated by the plan of distribution set forth in the Registration Statement, as amended by any prospectus supplement or post-effective amendment thereto, and use its reasonable commercial efforts to cause such Registration Statement, if not effective on the date of the Contribution, to be declared effective as promptly as reasonably possible after filing and to remain continuously effective until the earlier of (i) the date on which all Registrable Shares are sold and (ii) the date which is 90 days after the date on which the number of Registrable Shares held by the Trust is less than one percent of the shares of Common Stock then outstanding (the “Registration Period”); provided, however, that it shall not be required to file such Registration Statement or cause such Registration Statement to be declared effective during the pendency of any suspension period pursuant to Sections 1.2(c) or (d) below;

(b)prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act, or if no such filing is required, as included in the Registration Statement (the “Prospectus”), as may be necessary to keep the Registration Statement effective at all times until the end of the Registration Period; provided, however, that it shall not be required to file any such amendment or prospectus supplement during the pendency of any suspension period pursuant to Sections 1.2(c) or (d) below;

(c)furnish the Manager with such reasonable number of copies of the Prospectus in conformity with the requirements of the Securities Act, and such other documents as the Manager may reasonably request, in order to facilitate the public sale or other disposition of all or any of the Registrable Shares by the Manager;

(d)use its reasonable commercial efforts to file documents required of the Company for normal blue sky clearance in such states as the Manager shall reasonably designate in writing; provided, however, that the Company shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented;

(e)use its reasonable commercial efforts to cause the Registrable Shares to be listed on the New York Stock Exchange (the “NYSE”) as soon as reasonably practicable after the date of the Contribution; and

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(f)bear all expenses in connection with the actions contemplated by paragraphs (a) through (e) of this Section 1.1 and the registration of the Registrable Shares pursuant to the Registration Statement, including reasonable fees and expenses of legal counsel to the Manager incurred in connection with the registration and sale of the Registrable Shares, such fees and expenses of legal counsel not to exceed $30,000 in the aggregate, but excluding underwriting discounts, brokerage fees and commissions incurred by the Manager, the Trust or the Plan, if any.

It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 1.1 that the Manager shall provide such reasonable assistance to the Company and furnish, or cause to be furnished, to the Company in writing such information regarding the Manager, the Registrable Shares to be sold, and the intended method or methods of disposition of the Registrable Shares, as shall be required to effect the registration of the Registrable Shares and as may be required from time to time under the Securities Act and the rules and regulations thereunder.

1.2       Transfer of Registrable Shares After Registration; Suspension.

(a)The Manager agrees that it will not offer to sell or make any sale, assignment, pledge, hypothecation or other transfer with respect to the Registrable Shares that would constitute a sale within the meaning of the Securities Act except pursuant to either (i) the Registration Statement referred to in Section 1.1, or (ii) Rule 144 under the Securities Act or any successor rule thereto (as such rule may be amended from time to time, “Rule 144”), and that it will promptly notify the Company of any changes in the information set forth in the Registration Statement regarding the Manager or the intended plan of distribution of the Registrable Shares to the extent required by applicable securities laws.

(b)The Manager and the Company agree that the Registrable Shares may be sold in one or more privately-negotiated block trades; provided, however, that no such block trade may exceed 500,000 shares and provided further that no more than one privately-negotiated block sale may be made to a single purchaser or affiliates of such purchaser within a twelve-month period.

(c)In addition to any suspension rights under paragraph (d) below, the Company may, upon the happening of any event that, in the judgment of the Company’s legal counsel, renders advisable the suspension of the disposition of Registrable Shares covered by the Registration Statement or use of the Prospectus due to pending corporate developments, public filings with the SEC or similar events, suspend the disposition of Registrable Shares covered by the Registration Statement or use of the Prospectus for a period of not more than ninety (90) days on written notice to the Manager (which notice will not disclose the content of any material non-public information and will indicate the date of the beginning and end of the intended suspension, if known), in which case the Manager, upon receipt of such written notice, shall discontinue (or cause the Trust to discontinue) disposition of Registrable Shares covered by the Registration Statement or use of the Prospectus until copies of a supplemented or amended Prospectus are

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distributed to the Manager or until the Manager is advised in writing by the Company that the disposition of Registrable Shares covered by the Registration Statement or use of the applicable Prospectus may be resumed; provided, that such right to suspend the disposition of Registrable Shares covered by the Registration Statement or use of the Prospectus shall not be exercised by the Company for more than one hundred twenty (120) days in any twelve-month period.  The suspension and notice thereof described in this Section 1.2(c) shall be held in confidence and not disclosed by the Manager, except as required by law.

(d)Subject to paragraph (e) below, in the event of:  (i) any request by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to a Registration Statement or related Prospectus or for additional information; (ii) the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose; (iii) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Shares for sale in any jurisdiction or the initiation of any proceedings for such purpose; or (iv) any event or circumstance that necessitates the making of any changes in the Registration Statement or Prospectus, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, then the Company shall deliver a certificate in writing to the Manager (the “Suspension Notice”) to the effect of the foregoing (which notice will not disclose the content of any material non-public information and will indicate the date of the beginning and end of the intended suspension, if known), and, upon receipt of such Suspension Notice, the Manager will refrain (or cause the Trust to refrain) from selling any Registrable Shares pursuant to the Registration Statement (a “Suspension”) until the Manager’s receipt of copies of a supplemented or amended Prospectus prepared and filed by the Company, or until it is advised in writing by the Company that the current Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in any such Prospectus.  In the event of any Suspension, the Company will use its reasonable commercial efforts to cause the use of the Prospectus so suspended to be resumed as soon as possible after delivery of a Suspension Notice to the Manager.  The Suspension and Suspension Notice described in this Section 1.2(d) shall be held in confidence and not disclosed by the Manager, except as required by law.

(e)The Manager may sell Registrable Shares under the Registration Statement provided that neither a Suspension nor a suspended disposition under Section 1.2(c) hereof is then in effect, the Manager sells in accordance with the plan of distribution in the Prospectus, and the Manager arranges for delivery of a current

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Prospectus to any transferee receiving such Registrable Shares in compliance with the Prospectus delivery requirements of the Securities Act.

1.3  Indemnification.  For the purpose of this Section 1.3, the term “Registration Statement” shall include any preliminary or final Prospectus, exhibit, supplement or amendment included in or relating to the Registration Statement referred to in Section 1.1.

(a)Indemnification by the Company.  The Company agrees to indemnify and hold harmless the Manager (including, for purposes of this Section 1.3, the officers, directors, employees and agents of the Manager), and each person, if any, who controls the Manager within the meaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), from and against any and all losses, claims, damages, liabilities or expenses, joint or several, to which the Manager or such controlling person may become subject under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Company, which consent shall not be unreasonably withheld or delayed), only to the extent such losses, claims, damages, liabilities or expenses (or actions in respect thereof as contemplated below) arise out of or are based upon (i) any failure on the part of the Company to comply with the covenants and agreements contained in this Agreement, or (ii) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state in any of them a material fact required to be stated therein or necessary to make the statements in any of them, in light of the circumstances under which they were made, not misleading, and will reimburse the Manager and each such controlling person for any legal and other expenses as such expenses are reasonably incurred by the Manager or such controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Prospectus or any amendment or supplement of the Registration Statement or Prospectus in reliance upon and in conformity with information furnished in writing to the Company by the Manager, (ii) any untrue statement or omission of a material fact required to make such statement not misleading in any Prospectus that is corrected in any subsequent Prospectus that was delivered to the Manager before the pertinent sale or sales by the Manager, or (iii) any untrue statement or alleged untrue statement or omission or alleged omission in the Registration Statement, the Prospectus, or any amendment or supplement thereto, when used or distributed by the Manager during a period in which the disposition of Registrable Shares is properly suspended under Section 1.2(c) or a Suspension is properly in effect under Section 1.2(d).  The Manager hereby agrees that if the Manager or any of its controlling persons is not entitled to indemnification for any loss, claim, damage, liability or expense pursuant to this Section 1.3(a) as a result of Section 1.3(a)(i), (ii) or

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(iii) above, then neither the Manager nor any of its controlling persons shall be entitled to indemnification for such loss, claim, damage, liability or expense pursuant to the terms of the indemnification provisions set forth in the Investment Management Agreement or that certain engagement letter dated May 5, 2009 among JCPenney, the Manager and the Committee.

(b)Indemnification by the Manager.  To the extent permitted by applicable law, the Manager will indemnify and hold harmless the Company, the Benefit Plans Investment Committee of JCPenney, JCPenney, each of the Company’s and JCPenney’s directors, each of the Company’s and JCPenney’s officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (the “JCPenney Indemnitees”), from and against any and all losses, claims, damages, liabilities or expenses to which the JCPenney Indemnitees may become subject under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Manager, which consent shall not be unreasonably withheld or delayed) only to the extent such losses, claims, damages, liabilities or expenses (or actions in respect thereof as contemplated below) arise out of or are based upon (i) any failure on the part of the Manager to comply with the covenants and agreements contained in this Agreement respecting the sale of the Registrable Shares, or (ii) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state in any of them a material fact required to be stated therein or necessary to make the statements in any of them not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Prospectus, or any amendment or supplement thereto, in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Manager, and the Manager will reimburse the JCPenney Indemnitees for any legal and other expenses as such expenses are reasonably incurred by the JCPenney Indemnitees in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the Manager shall not be liable for any such untrue statement or alleged untrue statement or omission or alleged omission with respect to which the Manager has delivered to the Company in writing a correction before the occurrence of the transaction from which such loss was incurred.  In no event shall the liability of the Manager under this Section 1.3 be greater than the aggregate fees received by the Manager pursuant to the Investment Management Agreement.

(c)          Indemnification Procedure.

(i)Promptly after receipt by an indemnified party under this Section 1.3 of written notice of the threat or commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 1.3, promptly notify the indemnifying party in writing of the claim; provided,

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however, that the omission so to notify the indemnifying party will not relieve the indemnifying party from any liability which it may have to any indemnified party under the indemnity agreement contained in this Section 1.3 or otherwise, to the extent it is not prejudiced as a result of such failure.

(ii)In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and to the extent that it may wish, jointly with all other indemnifying parties similarly notified, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be a conflict between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to the indemnified party or other indemnified parties that are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties.  Upon receipt of notice from the indemnifying party or other indemnified parties that are different from  such indemnified party of its election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 1.3 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless:

(1)The indemnified party shall have employed such counsel in connection with the assumption of legal defenses in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (other than local counsel), approved by such indemnifying party representing all of the indemnified parties who are parties to such action); or

(2)The indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action.

In each such case, the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party.

(d)Contribution.  If the indemnification provided for in this Section 1.3 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage, liability or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on

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the other hand in connection with the statements or omissions that resulted in such loss, claim, damage, liability or expense, as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party 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 indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.  The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 1.3(c) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 1.3(d) were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the immediately preceding paragraph.  Notwithstanding the provisions of this Section 1.3(d), in no event shall the Manager be required to contribute any amount in excess of the aggregate fees received by the Manager pursuant to the Investment Management Agreement.  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 or entity who was not guilty of such fraudulent misrepresentation.

(e)Surviving Obligations.  The obligations of the Company and the Manager under this Section 1.3 shall survive the completion of the disposition of the Registrable Shares under this Section 1, and otherwise.

1.4    Rule 144 Information.  For such period as the Trust or the Plan holds any Registrable Shares received pursuant to the Contribution, the Company shall use its reasonable best efforts to file all reports required to be filed by it under the Securities Act, the Exchange Act and the rules and regulations thereunder and shall use its reasonable best efforts to take such further action to the extent required to enable the Manager to sell the Registrable Shares pursuant to Rule 144.

1.5Rights of the Trust.  All of the rights and benefits conferred on the Manager pursuant to this Agreement (other than the right to indemnification provided in Section 1.3) are intended to inure to the benefit of the Trust.

2.   Miscellaneous.

2.1     Governing Law.  This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York, irrespective of the choice of laws principles of the State of New York, as to all matters, including matters of validity, construction, effect, enforceability, performance and remedies.

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2.2Force Majeure.  Neither party will have any liability for damages or delay due to fire, explosion, lightning, pest damage, power failure or surges, strikes or labor disputes, water or flood, acts of God, the elements, war, civil disturbances, acts of civil or military authorities or the public enemy, acts or omissions of communications or other carriers, or any other cause beyond a party’s reasonable control (other than that which arises from the gross negligence or willful misconduct of such party), whether or not similar to the foregoing, that prevent such party from materially performing its obligations hereunder.

2.3Entire Agreement; Modification; Waivers.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and shall supersede all previous negotiation, commitments and writings with respect to the matters discussed herein.  This Agreement may not be altered, modified or amended except by a written instrument signed by all parties.  The failure of any party to require the performance or satisfaction of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent subsequent enforcement of such term of obligation or be deemed a waiver of any subsequent breach.

2.4Severability.  The provisions of this Agreement are severable, and in the event that any one or more provisions are deemed illegal or unenforceable the remaining provisions shall remain in full force and effect unless the deletion of such provision shall cause this Agreement to become materially adverse to either party, in which event the parties shall use reasonable commercial efforts to arrive at an accommodation that best preserves for the parties the benefits and obligations of the offending provision.

2.5Notices.  Except as otherwise expressly provided, any notice, request, demand or other communication permitted or required to be given under this Agreement shall be in writing, shall be sent by one of the following means to the Company or the Manager at the addresses set forth below (or to such other address as shall be designated hereunder by notice to the other parties and persons receiving copies, effective upon actual receipt), and shall be deemed conclusively to have been given:  (a) on the first business day following the day timely deposited with Federal Express (or other equivalent national overnight courier) or United States Express Mail, with the cost of delivery prepaid or for the account of the sender; (b) on the fifth business day following the day duly sent by certified or registered United States mail, postage prepaid and return receipt requested; or (c) when otherwise actually received by the addressee on a business day (or on the next business day if received after the close of normal business hours or on any non-business day).

If to the Company:

J. C. Penney Company, Inc.

6501 Legacy Drive

Mail Stop 1304

Plano, Texas 75024-3698

Attn:  Michael D. Porter

Fax: (972) 431-2044

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If to the Manager:

Evercore Trust Company, N. A.

1009 New York Avenue

6th Floor

Washington, DC 20001

Fax:  (202) 471-3510

Attn:  Norman P. Goldberg

2.6Title and Headings.  Titles and headings to sections herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

2.7Execution in Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

2.8Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Company and the Manager and their respective successors and permitted assigns.  None of the rights or obligations under this Agreement shall be assigned by the Manager without the prior written consent of the Company and the Trust in their sole discretion.

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IN WITNESS WHEREOF, each of the Company and the Manager has caused this Agreement to be duly executed on its behalf by its duly authorized officer as of the date first written above.

J. C. PENNEY COMPANY, INC.
By:	/s/ Robert B. Cavanaugh
	Name: Robert B. Cavanaugh
	Title: Executive Vice President and Chief Financial Officer

EVERCORE TRUST COMPANY, N.A., as Investment Manager of a Segregated Account in the J. C. Penney Corporation, Inc. Pension Plan Trust
By:	/s/ Norman P. Goldberg
	Name:  Norman P. Goldberg
	Title:  Managing Director

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EX-99.1

Exhibit 99.1

J. C. Penney Company, Inc.

13,388,673 Shares of Common Stock of 50¢ par value

Contribution Agreement

May 18, 2009

Evercore Trust Company, N.A.

  As Investment Manager of a Segregated Account in the

  J. C. Penney Corporation, Inc. Pension Plan Trust

1009 New York Avenue, 6th Floor

Washington, D.C. 20001

Ladies and Gentlemen:

J. C. Penney Company, Inc. (the “Company”) has agreed to satisfy a future funding obligation of its wholly-owned subsidiary, J. C. Penney Corporation, Inc., to the J. C. Penney Corporation, Inc. Pension Plan Trust (the “Trust”) created under the J. C. Penney Corporation, Inc. Pension Plan by contributing to the Trust 13,388,673 shares of the Company’s Common Stock of 50¢ par value (the “Shares”).  In order to accomplish such contribution, the Company hereby issues and sells the Shares to the Trust in consideration of the satisfaction of such funding obligation.  By executing this Contribution Agreement (the “Agreement”), Evercore Trust Company, N.A. as Investment Manager (the “Manager”) of a segregated account in the Trust, accepts the Shares on behalf of the Trust.

The Shares will be subject to the registration rights set forth in the Registration Rights Agreement, dated the date hereof (the “Registration Rights Agreement”), by and between the Company and the Manager.  Pursuant to the Registration Rights Agreement, and in accordance with the terms therein, the Company will agree, for the benefit of the Trust, (i) to file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”) with respect to the resale of the Shares by the Trust and (ii) to use its reasonable commercial efforts to cause the Registration Statement to be declared effective under the Securities Act of 1933, as amended (the “1933 Act”), and to maintain the effectiveness of such Registration Statement.

1.The Company represents and warrants to the Manager as of the date hereof (the “Closing Date”), that:

(a)   The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware;

(b)   The authorized and outstanding capital stock of the Company as of January 31, 2009 is as set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2009 as filed with the Commission (including any amendment thereof filed prior to the date of this Agreement);

(c)   The Shares have been duly authorized and, when issued to and accepted by the Trust, will be fully paid and non-assessable;

(d)   This Agreement has been duly authorized, executed and delivered by the Company and the Registration Rights Agreement has been duly authorized, executed and delivered by the Company, and each constitutes a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles and except as to the enforceability of the indemnification or contribution provisions contained therein;

(e)   The issuance of the Shares to the Trust and the compliance by the Company with all of the provisions of the Registration Rights Agreement and this Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any material indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound, nor will such action result in any violation of the provisions of the Restated Certificate of Incorporation, as amended, or Bylaws, as amended of the Company or the charter or bylaws of any of its subsidiaries or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their respective properties;

(f)   The Company is subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended;

(g)   Neither the Company nor any person acting on its behalf has offered or sold the Shares by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the 1933 Act;

(h)   No commission within the meaning of Section 408(e)(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), brokerage fee or other charge will become due or payable in connection

	with the execution and delivery of this Agreement and the transactions contemplated hereby, including the contribution of the Shares; and
(i)	Subject to compliance by the Manager with Section 3 hereof and the accuracy of the Manager’s representations stated herein, it is not necessary in connection with the offer, sale and delivery of the Shares by the Company to the Trust to register the Shares under the 1933 Act.

2.The Company and the Manager agree and acknowledge that the aggregate value of the Shares on the date hereof is $340,000,000 and that such amount shall be applied as a credit against the obligation to fund the Trust for purposes of the Internal Revenue Code of 1986, as amended, and ERISA.  For purposes of this Agreement, the amount of such credit shall be considered the purchase price paid by the Trust for the Shares.

3.The Manager, acting on behalf of the Trust:

(a)   Acknowledges that the Shares have not been registered under the 1933 Act and are being issued to the Trust in reliance upon an exemption from such registration under the 1933 Act;

(b)   Represents that the Trust is an institutional “accredited investor” within the meaning of Rule 501 under the 1933 Act;

(c)   Confirms that the Manager has been informed that the Shares are “restricted securities” under the 1933 Act and may not be resold or transferred until the Shares are first registered under the federal securities laws or unless an exemption from such registration is available;

(d)   Is aware of the adoption of Rule 144 under the 1933 Act (“Rule 144”) by the Commission, which permits limited public resale of securities acquired in a nonpublic offering, subject to the satisfaction of certain conditions, including, among other things:  the availability of certain current public information about the issuer, the sale being through a broker in an unsolicited “broker’s transaction” and the amount of securities being sold during any three (3) month period not exceeding specified limitations;

(e)   Represents that prior to accepting the contribution of the Shares on behalf of the Trust, it acquired sufficient information about the Company to reach an informed and knowledgeable decision to accept the contribution of the Shares.  The Manager has such knowledge and experience in financial and business matters as to make it capable of evaluating the risks of the prospective investment and to make an informed investment decision.  The Trust is able to bear the economic risk of its investment in the Shares;

(f)   Agrees that the Trust shall make no disposition of the Shares except pursuant to an effective Registration Statement or, alternatively, if requested by the Company, the Manager shall have provided the Company an opinion of counsel (which opinion of counsel may be rendered by counsel to the Company) in form and substance reasonably satisfactory to the Company, that (i) the proposed disposition does not require registration of the Shares under the 1933 Act or (ii) all appropriate action necessary for compliance with the registration requirements of the 1933 Act or of any exemption from registration available under the 1933 Act (including Rule 144) has been taken.  The Company shall not be required (i) to transfer on its books any Shares that have been sold or transferred in violation of the provisions of this Agreement nor (ii) to treat as the owner of the Shares, or otherwise to accord voting or dividend rights to, any transferee to whom the Shares have been transferred in contravention of this Agreement;

(g)   Agrees that the Trust shall make no disposition of the Shares that is contrary to the terms of the Registration Rights Agreement, as amended from time to time;

(h)   Acknowledges that, in order to reflect the restrictions on the disposition of the Shares, the Shares will be endorsed with restrictive legends, including the following legend (or substantially similar legend);

“The securities represented hereby have not been registered or qualified under the Securities Act of 1933 or the securities laws of any state, and may be offered and sold only if registered and qualified pursuant to federal and state securities laws or if the Company is provided an opinion of counsel reasonably satisfactory to the Company that registration and qualification under federal and state laws is not required.”

If required by the authorities of any state in connection with the issuance of the Shares, the legend or legends required by such state authorities shall also be endorsed on such shares.

(i)   Represents that as of the date of this Agreement, there are no selling arrangements between the Manager, acting on behalf of the Trust, and any underwriter, broker or dealer.

4.It is understood that, except as provided in the Registration Rights Agreement and the Engagement Letter, dated May 5, 2009, by and among Evercore Trust Company, N.A., the Benefit Plans Investment Committee of J. C. Penney Corporation, Inc. and J. C. Penney Corporation, Inc., the Trust will pay all of its own costs and expenses, including the fees of counsel.

5.This Agreement shall be binding upon, and inure solely to the benefit of, the Trust, the Manager, the Company and each person who controls the Company or the Trust, respectively, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement.  No purchaser of any Shares from the Trust shall be deemed a successor or assign by reason merely of such purchase.

6.This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

7.This Agreement may be executed by the parties hereto in counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.

If the foregoing is in accordance with your understanding, please sign and return to us five counterparts hereof, and upon the acceptance hereof by the Manager, this letter and such acceptance hereof shall constitute a binding agreement between each of the Manager and the Company.

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

Accepted as of the date hereof:
EVERCORE TRUST COMPANY, N.A.
As Investment Manager of a Segregated Account in the  J. C. Penney Corporation, Inc. Pension Plan Trust
By:	/s/ Norman P. Goldberg
	Name: Norman P. Goldberg
	Title:   Managing Director