Exhibit 10.1



                      NOTICE OF RESTRICTED STOCK UNIT AWARD

                         Name: ------------------------

Restricted Stock Unit Grant
- ----------------------------
A  restricted  stock  unit  award  for  --------  units  was  granted  to you on
- --------------.  Each restricted stock unit shall at all times be deemed to have
a value equal to the  then-current  fair market  value of J. C. Penney  Company,
Inc. Common Stock of 50(cent) par value ("Common  Stock").  The restricted stock
unit grant is 100% vested as of --------------. This grant is subject to all the
terms,  rules,  and  conditions  of the J. C. Penney  Company,  Inc. 2001 Equity
Compensation Plan ("Plan").

You will be eligible to be credited with a quarterly  distribution  of an amount
equivalent  to the  dividend  declared on Common Stock on the  restricted  stock
units until such time as the units are converted to shares of Common Stock.  Any
such dividends shall be converted into a number of additional  restricted  stock
units equal to the aggregate dividend which would have been paid with respect to
the  number of  restricted  stock  units then  credited  to you under this grant
divided by the closing price of the Company Stock on the New York Stock Exchange
on the day on which such  dividends  are paid.  Any such  additional  restricted
stock  units  shall vest  immediately  and be treated in the same  manner as the
original restricted stock units.

Payment Date
- -------------
If your employment  terminates for any reason,  other than death,  disability or
reduction   in   force/unit   closing  (as  defined  in  the  Plan),   prior  to
- ----------------,  the  restricted  stock  award  will  be  forfeited.  If  your
employment  terminates  due to death,  disability  or  reduction  in  force/unit
closing prior to  --------------,  the restricted  stock award will  immediately
vest with no further  restrictions.  The beneficiary listed on your J. C. Penney
Company,  Inc.,  Company-Paid Life Insurance  Beneficiary  Designation Form will
receive the vested shares  covered by the stock award in the case of termination
of employment due to death.

Taxes and Withholding
- ---------------------
At the time the Company issues to you, in cancellation  of the restricted  stock
units,  shares of Common Stock, the fair market value of the shares (the average
of the high and low JCPenney stock price on the NYSE multiplied by the number of
vested  shares)  will be  included  in your  W-2 form  and the  Company  will be
required to withhold  applicable  taxes on such shares.  The Company may collect
any  withholding  taxes due by requesting you send the  withholding  amount,  by
deducting  the  required  amount  from  your  paycheck  or other  payment  or by
retaining  and  canceling  the number of vested shares equal to the value of the
required tax withholding.

Effect on Other Benefits
- -------------------------
The value of the shares covered by the  restricted  stock unit grant will not be
included as  compensation  or earnings for  purposes of any other  compensation,
retirement, or benefit plan offered to Company associates.

Administration
- ---------------
The  Human  Resources  and  Compensation  Committee  of the  Company's  Board of
Directors has full  authority and  discretion to decide all matters  relating to
the  administration  and  interpretation of the Plan and this award and all such
Committee determinations shall be final, conclusive, and binding.