[Remainderof page intentionally left blank.Signature pagefollows.]

 

THIRD AMENDMENT to INDEMNIFICATION TRUST AGREEMENT, effective as of June 1st, 2008 ("Third Amendment"), by and among J. C. Penney Company, Inc., a Delaware corporation and J. C. Penney Corporation, Inc., a Delaware corporation and wholly-owned subsidiary of J. C. Penney Company, Inc. (herein collectively called the "Company"), and JPMorgan Chase Bank (as successor to Chemical Bank), a bank organized and existing under the laws of the State of New York, as trustee ("Trustee").

The Company and Trustee have heretofore executed an Indemnification Trust Agreement, dated as of July 30, 1986, as amended March 30, 1987 and January 27, 2002 ("Trust Agreement"), for the benefit of the Indemnitees (as defined on page 1 of the Trust Agreement).  Pursuant to Section 9(d) of the Trust Agreement, upon the written consent of the Representatives (as defined in Section 4(a) of the Trust Agreement), the Company and the Trustee now wish to amend the section of the Trust Agreement described below to reflect a change in the timing of payment by the Company to each Representative of his or her annual fee under the Trust Agreement.

NOW, THEREFORE, the Company and the Trustee agree that:

1.	Section 4(e) of the Trust Agreement shall be amended and restated in its entirety as follows:

(e)  In consideration for their services hereunder to the beneficiaries hereof, each Representative shall be paid by the Company an annual fee of $5,000 (payable monthly in arrears for each full or partial month of service as a Representative or by such other payment method that the Company deems appropriate), plus $600 for attendance at each meeting (whether by presence in person or by means of conference telephone or similar communications equipment) of Representatives regarding any matter relating to this Trust Agreement, and shall be reimbursed for expenses of meeting attendance.

2.	This Third Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together constitute one and the same instrument.

3.	This Third Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Third Amendment as of the date(s) set forth below.

J. C. PENNEY COMPANY, INC.

ATTEST                                                          By   /s/ Jeffrey J. Vawrinek                                                 

Name   Jeffrey J. Vawrinek      Title   Acting Secretary                                                             

Date   May 20, 2008                                                            

By  /s/ Charlotte M. Thacker                                                     

Name   Charlotte M. Thacker                                                             

Title   Manager - Office of the Coporate

         Secretary & Assistant Secretary                                                             

Date  May 20, 2008                                                              

ATTEST                                                          By   /s/ Jeffrey J. Vawrinek                    

Name  Jeffrey J. Vawrinek                       

Title   VP, Associate General Counsel    

                                and Acting Secretary                        

Date    May 20, 2008                                                            

By   /s/ Charlotte M. Thacker                                                      

Name   Charlotte M. Thacker                                                                

Title     Manager - Office of the Corporate  

Date    May 20, 2008                                                            

JPMORGAN CHASE BANK

ATTEST                                                          By     /s/ Janet Hudnall                                                   

Name  Janet Hudnall                                                               

Title     Vice President & Senior         

                                    Fiduciary Officer                 Date   5/9/2008                                                            

By   /s/ Allison T. Heath                                                    

Name  Allison T. Heath                                                               

Title   Vice President & Fiduciary Officer                                                              

Date   5/9/2008                                                            

We, the undersigned, being Representatives, as defined in the Indemnification Trust Agreement between J. C. Penney Company, Inc., J. C. Penney Corporation, Inc. and JPMorgan Chase Bank (as successor to Chemical Bank), dated as of July 30, 1986, as amended March 30, 1987 and January 27, 2002, hereby approve the Third Amendment to Indemnification Trust Agreement, effective as of June 1st, 2008.

Dated as of the date(s) set forth below.

By        /s/ Colleen C. Barrett                                      

Name       Colleen C. Barrett     

Date          5/9/2008             

By       /s/ Thomas J. Engibous  

Name       Thomas J. Engibous  

Date          5/9/2008                

By       /s/ Burl Osborne                      

Name       Burl Osborne      

Date         5/9/2008                     

By       /s/ R. Gerald Turner                  

Name       R. Gerald Turner   

Date         5/9/2008