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): February 9, 2011

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

(d)  On February 9, 2011, the Board of Directors of J. C. Penney Company, Inc. (“Company”) elected William A. Ackman  and Steven Roth as members of the Board of Directors.   Mr. Ackman and Mr. Roth will serve on the Finance Committee and the Committee of the Whole of the Board of Directors. In lieu of the pro rata compensation otherwise payable to him upon his election as a director, Mr. Ackman has donated such compensation to The Bowery Mission, a charitable organization dedicated to serving hungry and homeless individuals in New York City. Mr. Roth has waived payment of the pro rata compensation otherwise payable to him. In addition, Mr. Ackman and Mr. Roth are eligible to enter into the Company’s standard form of indemnif ication agreement, a copy of which is filed as Exhibit 10.54 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2010. There are no arrangements or understandings between Mr. Ackman or Mr. Roth and any other person pursuant to which they were elected as directors.

Mr. Ackman is the Founder, Chief Executive Officer and Managing Member of the General Partner of Pershing Square Capital Management, L.P. (“Pershing Square”), a registered investment adviser.  In addition, Mr. Ackman serves as Chairman of the Board of The Howard Hughes Corporation (“HHC”), a real estate development company in which Mr. Ackman and his affiliated Pershing Square entities have economic exposure to approximately 27.5% of HHC’s common stock, including a 13.8% beneficial ownership interest.  HHC, through an affiliated entity, is the landlord for one of the Company’s leased store locations. During fiscal 2010, the Company made payments under this lease totaling approximately $242,000. The lease is currently expected to continue through fiscal 2011 and beyond. In fisc al 2011, the Company expects to make payments under the lease of approximately $231,000 plus any 2011 property taxes assessed and paid indirectly through the landlord. Mr. Ackman does not have any direct or indirect material interest in this lease arrangement.

Mr. Roth is Chairman of the Board of Vornado Realty Trust (“Vornado”) and the beneficial owner of approximately 5% of Vornado’s outstanding common shares, and is also the managing general partner of Interstate Properties (“Interstate”). In November 2010, Vornado purchased certain land and improvements from the Company at its Springfield Mall location for approximately $8.3 million. Additionally, the Company, through its subsidiaries, pays rent, common area maintenance fees, utility expenses, and property taxes to Vornado and Interstate, and their affiliated entities, with respect to a number of store locations. During fiscal 2010, such payments totaled approximately $17.2 million.  The leases are currently expected to continue through fiscal 2011 and beyond. In fiscal 2011, the Company e xpects to make similar payments with respect to such store locations of approximately $15.7 million, plus any 2011 property taxes assessed and paid indirectly through the landlords.  Mr. Roth has no direct or indirect material interest in these transactions.

In connection with Mr. Ackman’s election to the Board of Directors, the Company has entered into a letter agreement with Pershing Square pursuant to which Pershing Square has agreed to maintain the confidentiality of any Company information received by Pershing Square in connection with Mr. Ackman’s directorship.  A copy of the agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01         Financial Statements and Exhibits.

(d)      Exhibit 99.1 Letter Agreement, dated as of February 8, 2011, between J. C. Penney Company, Inc. and Pershing Square Capital Management, L.P.

SIGNATURES

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/ Michael Dastugue Michael Dastugue Executive Vice President and Chief Financial Officer

Date:  February 10, 2011

EXHIBIT INDEX

Exhibit Number                      Description

99.1 Letter Agreement, dated as of February 8, 2011, between J. C. Penney Company, Inc. and Pershing  Square Capital Management, L.P.

EX-99.1

Exhibit 99.1

[Pershing Square Letterhead]

February 8, 2011

J.C. Penney Company, Inc.

Attention:  Mr. Myron E. Ullman, III

Chairman of the Board and Chief Executive Officer

6501 Legacy Drive

Plano, TX 75024

Dear Mike:

I am delighted to join the J.C. Penney Company, Inc. (“J.C. Penney”) board, and I look forward to making a contribution to the company.

This letter, intended solely for the benefit of J.C. Penney, contains a series of undertakings by myself, my firm and the investment funds that we advise (collectively, “Pershing Square” or “we”).  These undertakings will be effective while I am a J.C. Penney director, and are intended to be legally binding on Pershing Square (which I am authorized to bind) and to address various issues that we have discussed.

We are sensitive to J.C. Penney’s concerns regarding confidentiality and other regulatory issues, and feel that it would be appropriate to restrict ourselves as set forth in this letter in order to address those considerations.  To that end, I hereby undertake, consistent with my fiduciary duties and confidentiality obligations as a  J.C. Penney director, to refrain from communicating to anyone (whether to any company in which we have an investment or otherwise) confidential information I learn in my capacity as a director of J.C. Penney; provided that I may communicate such information to members of my firm, Pershing Square, and our outside advisors, Kirkland & Ellis; provided, further, that Pershing Square shall be (and shall cause such persons) to be bound by the same confidentiality restrictions that are otherwise applicable to me.

In addition, this letter memorializes that, subject to applicable law, all of Pershing Square’s personnel have agreed to maintain the confidentiality of J.C. Penney’s nonpublic information they obtain through my service on the J.C. Penney board and not to trade in, or cause Pershing Square or any company in which we have an investment or otherwise to trade in, J.C. Penney securities in violation of law while in possession of such nonpublic material information.

Furthermore, we agree that, in connection with my service on the J.C. Penney board, I will comply with the policies (as applied to me on a reasonable and good faith basis) applicable generally to directors of J.C. Penney as currently in effect (together with changes to such policies imposed on a reasonable and good faith basis), and except as otherwise agreed between Pershing Square and J.C. Penney, Pershing Square and its controlled affiliates will not engage in the

J.C. Penney Company, Inc.

February 8, 2011

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purchase or sale of J.C. Penney securities during J.C. Penney blackout periods under the restriction calendar currently in effect, together with changes to such calendar or unscheduled blackout periods (in either case imposed on a reasonable and good faith basis).  J.C. Penney shall not be responsible for compliance by Pershing Square or me with the securities laws, including regulations relating to insider trading.

I look forward to working together with you and the board.

Very truly yours,

PERSHING SQUARE CAPITAL MANAGEMENT, L.P.

By:  PS Management GP, LLC, its General Partner

/s/ William A. Ackman                  

William A. Ackman, Managing Member

AGREED:

J.C. PENNEY COMPANY, INC.

/s/ Myron E. Ullman, III                                                           

Myron E. Ullman, III

Chairman of the Board and Chief Executive Officer

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