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                                                              EXHIBIT 10(ii)(aj)


                           J. C. PENNEY COMPANY, INC.
                           1998 EVA PERFORMANCE PLAN

     1.  Purposes of Plan.  The general purposes of the 1998 EVA Performance
Plan ("Plan") are to motivate selected management associates of J. C. Penney
Company, Inc. ("Company") and its subsidiaries to continue and increase their
efforts on the Company's behalf to achieve consistent corporate performance over
a long-term horizon and produce sustained improvements in economic value added
for the Company's stockholders and to assist the Company in continuing to
attract, retain, and develop management personnel capable of assuring the
Company's future success.

     2.  Administration of Plan.  The Plan shall be administered by, or under
the direction of, a committee ("Committee") of the Board of Directors of the
Company ("Board") consisting of not less than three Board members who shall not
be eligible, while serving on the Committee, to receive payments under the Plan.
The Committee shall have plenary authority to interpret the Plan and to make all
determinations specified in or permitted by the Plan or deemed necessary or
desirable for its administration or for the conduct of the Committee's business.
All interpretations and determinations of the Committee may be made on an
individual or group basis, and shall be final, conclusive, and binding on all
interested parties.

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     3.  Eligibility and Bases of Participation.  Performance units under the
Plan may be awarded to such general management associates (which term as used
herein includes, without limitation, officers of the Company), regional and
district management associates, and such other selected management associates of
the Company and its subsidiaries ("Participants"), and in such  amounts, as the
Committee shall determine.  The Committee may determine that an otherwise
eligible associate, who remains employed by the Company or a subsidiary, shall
not prospectively participate in the Plan.  In determining the Participants who
are to receive performance unit awards and the number of units to be awarded,
the Committee may take into account the nature of services rendered by the
respective associates, their respective contributions to the Company's success,
their respective position responsibility levels and salaries, and such other
factors as the Committee in its discretion shall deem relevant in light of the
purposes of the Plan.

     4.  Valuation of Performance Unit Awards.  Subject to the provisions of
Sections 6, 7, and 8 of the Plan, performance units shall be awarded to
Participants on an annual basis.  The Committee shall determine for each fiscal
year a method or methods for measuring performance and for calculating the
dollar value of each performance unit which may be awarded for such fiscal year.
The total dollar value of all performance units awarded for each fiscal year
shall be calculated in accordance with such determinations of the Committee, and
awards shall be credited to each Participant's bonus reserve account (as
described in Section 5) on the basis of such calculation.  The Committee shall
adopt such rules and procedures as shall be necessary or desirable in order that
such

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calculation will be verified, and such verified calculation shall be submitted
to the Board and shall be final, conclusive, and binding on all interested
parties.

     5.  Award Payment.  A bonus reserve account shall be established for each
Participant for the purpose of making payments to such Participant under the
Plan.  Each fiscal year, the total dollar value of all performance units awarded
to a Participant for such fiscal year, calculated in accordance with Section 4,
shall be credited to such Participant's bonus reserve account.  Any payments to
such Participant under the Plan in a fiscal year, as determined by the
Committee, shall be made from such Participant's bonus reserve account in cash
at the time or times determined by the Committee.  Any amounts not paid to the
Participant in a fiscal year shall remain in such Participant's bonus reserve
account.  The amounts held in the bonus reserve accounts are subject to
reduction prior to distribution based upon future Company results.  Positive
amounts held in the bonus reserve accounts shall be credited with interest on an
annual basis as of the last day of the fiscal year using an interest rate equal
to the Moody's Single A Corporate Bond Yield in effect as of that date.  Except
(a) for payment on account of death under Section 7, or (b) for deduction to
cover Federal (including "FICA"), state, or local withholding taxes arising on
issuance of stock under any Company stock option or other equity compensation
program, or (c) where a Participant relinquishes part or all of an award payment
to extinguish an indebtedness to the Company or a subsidiary, no award or right
thereunder shall be assignable or transferable, and any attempt to do so shall
be void.

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     6.  Employment Termination.  Except as otherwise provided in this Section
6, the Committee shall prescribe rules covering, and may determine in individual
cases, the effect, if any, on, the payment of awards for any fiscal year if (a)
a Participant's employment with the Company or a subsidiary terminates for any
reason or (b) a Participant terminates employment and, before or after such
termination, commits any act, or fails to take any action which, in the opinion
of the Committee, results or may result in a detriment to the Company or a
subsidiary.

     A Participant shall not receive an award for any fiscal year if prior to
payment the Participant is given a summary dismissal, or resigns in lieu of
summary dismissal, under the Company's personnel procedures in effect from time
to time.  All determinations by the Company with respect to the foregoing for
Plan purposes shall be final, conclusive, and binding on all interested parties.

     7.  Death.  The Committee shall prescribe rules covering, and may determine
in individual cases, the effect, if any, on, the payment of awards for any
fiscal year if a Participant or former Participant should die before such
payment.  The Committee may permit a Participant to designate one or more
beneficiaries to receive payment of an award in the event of death, and to
change or revoke any such designation, on a form or forms approved by the
Committee, which must be filed with the Company to be effective.

     8.  Transfers and Leaves of Absence.  The Committee shall prescribe rules

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covering, and may determine in individual cases, the effect, if any, on, the
payment of awards for any fiscal year if a Participant incurs a change of duties
or position which renders such Participant ineligible to continue to be a
Participant, or if a Participant is granted an excused absence or approved leave
of absence or is placed on layoff under the Company's personnel procedures in
effect from time to time.

     9.  Right to Continued Employment.  Nothing in the Plan shall confer on a
Participant any right to continue in the employ of the Company or any subsidiary
or affect in any way the right of the Company or any subsidiary to terminate
such Participant's employment at any time.

     10. Effective Date.  The effective date of the Plan shall be February 1,
1998.

     11. Termination and Amendment.  The Board of Directors may terminate the
Plan or make such amendments as it shall deem advisable, including, but not
limited to, any amendments to conform to or reflect any change in any law,
regulation, or ruling applicable to the Plan.  No termination or amendment of
the Plan may adversely affect the right to payment of an award without the
consent of the person to whom the award is payable.

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