Exhibit 10.5

            J. C. PENNEY COMPANY, INC. 2001 EQUITY COMPENSATION PLAN


                        NOTICE OF RESTRICTED STOCK AWARD
                 -- ---- NON-ASSOCIATE DIRECTOR ANNUAL GRANT --




NON-ASSOCIATE DIRECTOR:
-------------------------
                Restricted Stock Award

                Date of Grant




TERMS AND PROVISIONS OF GRANT:
-----------------------------


The attached Plan Prospectus for the 2001 Equity  Compensation Plan, approved by
stockholders  on May 18,  2001contains  all of the terms and  provisions  of the
above  restricted  stock grant.  The shares  awarded may not be sold,  assigned,
pledged  or  otherwise  encumbered  or  disposed  of  prior  to  the  Director's
separation from Board service. If a Director's  separation from Board service is
for any reason other than a Qualified  Termination  as defined in the Plan,  the
restricted stock award will be forfeited or canceled.