<PAGE>
                                                                   Exhibit 10(a)











                              J. C. PENNEY COMPANY, INC.

                          1999 SEPARATION ALLOWANCE PROGRAM

                                         FOR

                         PROFIT-SHARING MANAGEMENT ASSOCIATES





                               Effective July 14, 1999





                           This document was adopted by the
                          Board of Directors of J. C. Penney
                            Company, Inc. on July 14, 1999


<PAGE>
                              J. C. PENNEY COMPANY, INC.
                          1999 SEPARATION ALLOWANCE PROGRAM
                                         FOR
                         PROFIT-SHARING MANAGEMENT ASSOCIATES


                                     ARTICLE ONE
                                DESCRIPTION OF PROGRAM


     1.01      Establishment of Program
               ________________________

               J. C. Penney Company, Inc. ("Company") hereby establishes this
               1999 Separation Allowance Program for Profit-Sharing Management
               Associates of the Company and each designated Subsidiary
               ("Program"). The Program shall become effective as of July 14,
               1999.

     1.02      Purposes of Program
               __________________

               The purposes of the Program are to:

               (a)  fulfill the moral imperative inherent in The Penney Idea,
                    particularly, the precepts "to improve constantly the human
                    factor in our business" and "to reward the men and women in
                    our organization through participation in what the business
                    produces";

               (b)  attract and retain key associates;

               (c)  allay associate job security fears and concerns;

               (d)  improve associate morale and dedication;

               (e)  increase associate productivity by eliminating extraneous
                    distractions and anxieties; and

               (f)  help ensure that associates receive the benefits they
                    legitimately earn in the normal course of their employment,
                    all of which are in the best interest of the Company and its
                    stockholders.

                                          1
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     1.03      Types of Benefits
               _________________

               The Program is an "employee benefit plan" within the meaning of
               Section 3(3) of ERISA.  The Program consists primarily of (i)
               severance benefits provided under an unfunded "employee welfare
               benefit plan" within the meaning of Section 3(1) of ERISA, (ii)
               other welfare benefits provided under one or more existing
               "employee welfare benefit plans", within the meaning of Section
               3(1) of ERISA, maintained by the Company, and (iii) enhanced
               pension benefits under the SRP, an existing "employee pension
               benefit plan" within the meaning of Section 3(2) of ERISA.

     1.04      Administration
               ______________

               The Chairman of the Board of Directors of the Company shall
               appoint a committee to administer the Program ("Committee")
               consisting of at least three Participants, one of whom shall be
               the Executive Vice President and Chief Human Resources and
               Administration Officer (or his successor by title or position
               prior to a Change of Control), who shall act as Chairman.  The
               Committee shall have the full authority and discretion to adopt
               such rules and procedures as it deems necessary or appropriate
               for the implementation of the Program and to interpret the
               Program in order to carry out its function of administration.

                                          2
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                                     ARTICLE TWO
                                     DEFINITIONS

     2.01      For purposes of this Program the following terms shall have the
               following meanings:

               Change of Control shall be deemed to have occurred if the event
               _________________
               set forth in any one of the following paragraphs shall have
               occurred:

               (a)     any Person is or becomes the Beneficial Owner, directly
               or indirectly, of securities of the Company (not including in the
               securities beneficially owned by such Person any securities
               acquired directly from the Company or its Affiliates)
               representing 50% or more of the combined voting power of the
               Company's then outstanding securities; or

               (b)     during any period of two consecutive calendar years, the
               following individuals cease for any reason to constitute a
               majority of the number of directors then serving as directors of
               the Company: individuals, who on the Effective Date, constitute
               the Board of Directors of the Company and any new director (other
               than a director whose initial assumption of office is in
               connection with the settlement of an actual or threatened
               election contest, including but not limited to a consent
               solicitation, relating to the election of directors of the
               Company) whose appointment or election by the Board of Directors
               of the Company or nomination for election by the Company's
               stockholders was approved or recommended by a vote  of at least
               two-thirds of the directors then still in office who either were
               directors on the Effective Date or whose appointment, election or
               nomination for election was previously so approved or
               recommended; or

               (c)     there is consummated a merger or consolidation of the
               Company or any direct or indirect subsidiary of the Company with
               any other corporation or entity, other than (i) a merger or
               consolidation which would result in the voting securities of the
               Company outstanding immediately prior to such merger  or
               consolidation continuing to represent (either by remaining
               outstanding or by

                                         3
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               being converted into voting securities of the surviving entity or
               any Parent thereof), in combination with the ownership of any
               trustee or other fiduciary holding securities under an employee
               benefit plan of the Company or any subsidiary of the Company, at
               least 50% of the combined voting power of the securities of the
               Company, such surviving entity or any Parent thereof outstanding
               immediately after such merger or consolidation, or (ii) a merger
               or consolidation effected solely to implement a recapitalization
               of the Company (or similar transaction) in which no Person is or
               becomes the Beneficial Owner, directly or indirectly, of
               securities of the Company (not including in the securities
               beneficially owned by such Person any securities acquired
               directly from the Company or its Affiliates) representing 50% or
               more of the combined voting power of the Company's then
               outstanding securities; or

               (d)     the stockholders of the Company approve a plan of
               complete liquidation or dissolution of the Company, or there is
               consummated a sale or disposition by the Company or any of its
               subsidiaries of any assets which individually or as part of a
               series of related transactions constitute all or substantially
               all of the Company's consolidated assets, other than any such
               sale or disposition to an entity at least 50% of the combined
               voting power of the voting securities of which are owned by
               stockholders of the Company in substantially the same proportions
               as their ownership of the voting securities of the Company
               immediately prior to such sale or disposition; or

               (e)     the execution of a binding agreement that if consummated
               would result in a Change of Control of a type specified in
               paragraphs (a) or (c) above (an "Acquisition Agreement") or of a
               binding agreement for the sale or disposition of assets that, if
               consummated, would result in a Change of Control of a type
               specified in paragraph (d) above (an "Asset Sale Agreement") or
               the adoption by the Board of Directors of the Company of a plan
               of complete liquidation or dissolution of the Company that, if
               consummated, would result in a Change of Control of a type
               specified in paragraph (d) above (a "Plan of

                                          4
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               Liquidation"), provided, however, that a Change of Control of the
               type specified in this paragraph (e) shall not be deemed to exist
               or have occurred as a result of the execution of such Acquisition
               Agreement or Asset Sale Agreement, or the adoption of such a Plan
               of Liquidation, from and after the Abandonment Date.  As used in
               this paragraph (e), the term "Abandonment Date" shall mean the
               date on which (i) an Acquisition Agreement, Asset Sale Agreement
               or Plan of Liquidation is terminated (pursuant to its terms or
               otherwise) without having been consummated, (ii) the parties to
               an Acquisition Agreement or Asset Sale Agreement abandon the
               transactions contemplated thereby, (iii) the Company abandons a
               Plan of Liquidation, or (iv) a court or regulatory body having
               competent jurisdiction enjoins or issues a cease and desist or
               stop order with respect to or otherwise prevents the consummation
               of, or a regulatory body notifies the Company that it will not
               approve an Acquisition Agreement, Asset Sale Agreement or Plan of
               Liquidation or the transactions contemplated thereby and such
               injunction, order or notice has become final and not subject to
               appeal; or

               (f)     the Board adopts a resolution to the effect that, for
               purposes of this Program, a Change of Control has occurred.

               Notwithstanding the foregoing, a Change of Control shall not be
               deemed to have occurred by virtue of the consummation of any
               transaction or series of integrated transactions immediately
               following which the record holders of the common stock of the
               Company immediately prior to such transaction or series of
               transactions continue to have substantially the same
               proportionate ownership in an entity (i) which owns all or
               substantially all of the assets of the Company immediately
               following such transaction  or series of transactions, (ii) which
               is intended to reflect or track the value or performance of a
               particular division, business segment or subsidiary of the
               Company, or (iii) which is an affiliated company, subsidiary, or
               spin-off entity owned by the stockholders of the Company in
               substantially the same proportions as their

                                         5
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               ownership of stock of the Company on the date of such spin-off.

               As used in connection with the foregoing definition of Change of
               Control, "Affiliate" shall have the meaning set forth in Rule
               12b-2 promulgated under Section 12 of the Exchange Act;
               "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
               under the Exchange Act; "Exchange Act" shall mean the Securities
               Exchange Act of 1934, as amended from time to time; "Parent"
               shall mean any entity that becomes the Beneficial Owner of at
               least 50% of the voting power of the outstanding voting
               securities of the Company or of an entity that survives any
               merger or consolidation of the Company or any direct or indirect
               subsidiary of the Company; and "Person" shall have the meaning
               given in Section 3(a)(9) of the Exchange Act, as modified and
               used in Sections 13(d) and 14(d) thereof, except that such
               term shall not include (i) the Company or any of its
               subsidiaries, (ii) a trustee or other fiduciary holding
               securities under an employee benefit plan of the Company or any
               of its Affiliates, (iii) an underwriter temporarily holding
               securities pursuant to an offering of such securities, or (iv) a
               corporation or entity owned, directly or indirectly, by the
               stockholders of the Company in substantially the same
               proportions as their ownership of stock of the Company.

               Code shall mean the Internal Revenue Code of 1986, as amended
               ____
               from time to time.

               Company shall mean J. C. Penney Company, Inc., a Delaware
               _______
               corporation and any successor company.

               Compensation shall mean the annual base salary rate of a
               ____________
               Participant, plus annual profit incentive or profit-sharing
               compensation units, valued at $1.00 per unit, under the Company's
               1989 Management Incentive Compensation Program or similar
               existing plans for regional, district, and store profit- sharing
               management associates (or any successor plans thereto), plus
               long-term incentive compensation awards, if any, valued at $1.00
               per unit (or, in the case of Eckerd Corporation, at target),
               under the J. C. Penney Company, Inc. EVA

                                          6
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               Performance Plan (or any successor plan thereto), all as in
               effect as of his Employment Termination.  As applied to a
               Participant employed by a Subsidiary, Compensation shall include
               the same elements of pay to the extent the Subsidiary maintains
               similar or comparable pay arrangements.

                                          7
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               Constructive Termination shall mean a resignation from employment
               ________________________
               with the Company or a Subsidiary (as appropriate) after a Change
               of Control on account of an action or actions directed at a
               Participant making it reasonable for the Participant to resign,
               such as:

               (a)  demotion, or

               (b)  decrease in salary or rate of incentive or bonus-type
               compensation, or

               (c)  change in reporting responsibilities, duties, or status
               inconsistent with pre-Change of Control responsibilities, duties,
               or status, or

               (d)  involuntary relocation or transfer, or

               (e)  discontinuance of any employee welfare benefit, incentive
               compensation, equity compensation, or retirement plan (without
               equivalent compensating remuneration or replacement by a plan
               providing substantially similar benefits) or any action that
               materially reduces such Participant's benefits or payments under
               such plans, or

               (f)  any other action which has an equivalent adverse economic
               effect on such Participant.

               Drugstore Associate shall mean an employee of Eckerd Corporation
               ___________________
               or any other Subsidiary that is a retail drugstore company.

               Effective Date shall mean July 14, 1999.
               ______________

               Employment Termination shall be deemed to have occurred for a
               ______________________
               Participant when he involuntarily ceases to be an employee of the
               Company or a Subsidiary after a Change of Control because of
               either an actual termination or Constructive Termination for any
               reason other than death, disability, Normal Retirement, or as a
               result of a valid Summary Dismissal.

               ERISA shall mean the Employee Retirement Income Security Act of
               _____
               1974, as amended from time to time.

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               Normal Retirement shall mean retirement at or after a
               _________________
               Participant's normal retirement date as determined in accordance
               with the J. C. Penney Company, Inc. Pension Plan.

               Participant shall mean any Profit-Sharing Management Associate of
               ___________
               the Company or of a Subsidiary who has satisfied the eligibility
               criteria of Article Three of the Program, and who has not
               received all Severance Benefits to which he is entitled under the
               Program.

               Profit-Sharing Management Associate shall mean
               ___________________________________

               (a)     any regular associate of the Company or a Subsidiary
               classified under the Company's personnel policy as management and
               who is participating in an annual profit incentive or
               profit-sharing compensation program (other than the J. C.
               Penney Company, Inc. Savings, Profit-Sharing and Stock
               Ownership Plan) of the Company on the Effective Date or
               thereafter, and

               (b)     any employee of a Subsidiary classified under the
               Subsidiary's personnel policy as management and who is
               participating in a bonus or annual profit incentive or profit-
               sharing compensation program of the Subsidiary or the Company
               (other than a qualified retirement plan of the Subsidiary or the
               Company) on the Effective Date or thereafter.

               Severance Pay shall mean the cash severance payments payable to a
               _____________
               Participant under the Program pursuant to the schedule for
               Severance Pay benefits set forth in Section 4.01 of the Program.

               Severance Benefits shall mean Severance Pay and the other
               __________________
               benefits described in Article Four of the Program payable to a
               Participant.

               SRP shall mean the (a) Supplemental Retirement Program for
               ___
               Management Profit-Sharing Associates of J. C. Penney Company,
               Inc., (b) Supplemental Retirement Program for Eligible
               Management Associates of JCPenney Financial Services, and
               (c) Supplemental Retirement Program for Management

                                          9
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               Profit-Sharing Associates of Thrift Drug, Inc., as they may be
               amended from time to time.

               Subsidiary shall mean any corporation that is owned, in whole or
               __________
               in part, by the Company and is a participating employer in the J.
               C. Penney Company, Inc. Pension Plan, unless the Company's Human
               Resources Committee, prior to a Change of Control, determines
               that any such corporation shall not be a Subsidiary under the
               Program.

               Summary Dismissal shall mean employment termination on account of
               _________________
               commission of an act or acts of dishonesty that constitute a
               felony and which results in personal enrichment of the
               Participant at the expense of the Company or Subsidiary (as
               appropriate), including resignation in lieu of such dismissal.

                                          10
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                                    ARTICLE THREE
                                     ELIGIBILITY

     3.01      Eligibility on the Effective Date
               _________________________________

               Each person who is a Profit-Sharing Management Associate on the
               Effective Date shall participate in the Program on the Effective
               Date.

     3.02      Future Eligibility
               __________________

               Each person who becomes a Profit-Sharing Management Associate
               after the Effective Date but prior to a Change of Control shall
               participate in the Program on the first day such person becomes a
               Profit-Sharing Management Associate.

     3.03      Loss of Management Status
               _________________________

               In the event a Participant prior to a Change of Control ceases to
               be a Profit-Sharing Management Associate, his participation in
               the Program shall cease on the date he ceases to be a Profit-
               Sharing Management Associate.  He shall participate in the
               Program again prior to a Change of Control on the first day he
               again becomes a Profit-Sharing Management Associate.

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                                     ARTICLE FOUR
                                       BENEFITS

     4.01      Severance Pay
               _____________

               If a Participant incurs an Employment Termination within a two-
               year period following a Change of Control, he shall become
               entitled to Severance Pay in accordance with the following
               schedule.

                    Length of Service              Severance Pay
                    _________________              _____________
               At Least     But Less Than
               ________     _____________
                6 months       2 years          6 months Compensation
                2 years        5 years         12 months Compensation
                5 years       10 years         18 months Compensation
               10 years                        24 months Compensation

               Severance Pay shall be paid in a lump sum as soon as practicable
               after Employment Termination and shall be in lieu of any cash
               severance payments otherwise payable to such Participant on
               account of his separation from service under any severance pay
               program (other than this Program) maintained by the Company or a
               Subsidiary.

               In the event a Participant is entitled to any cash severance
               payments that are payable in the event of termination of
               employment pursuant to a written employment contract ("contract
               payments") between the Participant and the Company or a
               Subsidiary, Severance Pay otherwise payable to the Participant
               under this Section 4.01 shall be reduced by the amount of such
               contract payments without regard to (a) how such contract
               payments are defined in the contract, and (b) whether such
               contract payments have been received by the Participant.

     4.02      Stock Options
               _____________

               Notwithstanding any provision of the Company's outstanding stock
               option plans, if a Participant becomes entitled to Severance Pay
               under this Program and, at that time, holds non-qualified stock
               options granted by the Company, he also shall have the right to
               exercise any or all of such non-qualified stock options until the
               earlier of:

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               (a)     5 years after the Participant's Employment Termination,
               or

               (b)     the normal termination date of the stock option grant
               that would apply without regard to any termination of employment.

               The Participant's post-termination right to exercise such stock
               options shall be in accordance with rules prescribed by the
               Committee similar to the rules applicable to employment
               termination by reason of retirement under the Company's
               outstanding stock option plans.

     4.03      Medical and Dental Coverage
               ___________________________

               A.  Subsidized COBRA Premiums:  Except as otherwise provided in
                   __________________________
               this Section 4.03, if a Participant becomes entitled to Severance
               Pay under this Program, and at that time is covered by a Company-
               offered health care plan subject to the Consolidated Omnibus
               Budget Reconciliation Act of 1986, as amended ("COBRA"), he shall
               be entitled to purchase continued medical (including HMO) and
               dental coverage, if any, available under COBRA, and the cost of
               such COBRA coverage shall be shared by the Company and the
               Participant in the same proportion that exists between the
               Company and active participants in the health care plan ("active
               rate").

               The maximum duration of the Company-provided cost of COBRA
               coverage at the active rate shall be 18 months, or such earlier
               date when such Participant and/or covered family members become
               entitled to other group medical coverage from another employer.

               B.  Retiree Coverage:  For the purposes of determining
                   _________________
               eligibility for retiree coverage under the J. C. Penney Company,
               Inc. Voluntary Employees' Beneficiary Association Medical Benefit
               Plan and Dental Benefit Plan (collectively "Health Care Plans"),
               a Participant who is covered under the Health Care Plans and who
               becomes entitled to Severance Pay under this Program shall need
               only 70 points (age plus years of service) at his Employment
               Termination.  The age 55 minimum requirement of the

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               Health Care Plans shall be waived and 5 years shall be added to
               the Participant's medical eligibility service to determine the
               Company's contribution toward the premium.  Retiree medical and
               dental coverage and benefits shall be provided under the terms of
               the Health Care Plans, subject to the foregoing modifications of
               the eligibility rules.

               A Participant who is a Drugstore Associate and becomes entitled
               to Severance Pay under this Program shall be eligible for the
               retiree coverage described in the preceding paragraph payable
               under the medical plan maintained by Eckerd Corporation only if
               such person as of December 31, 1997 was

               (a)     in the active employ of Thrift Drug, Inc. or Fay's
               Incorporated, and

               (b)     age 55 or older and had completed at least 15 years of
               service.

               C.  Limitations:  If any Participant qualifies for, and secures,
                   ____________
               continued medical and dental coverage at his Employment
               Termination (a) under the Health Care Plans or (b) pursuant to
               Article IV, paragraph (5) of the SRP, the Company's obligation to
               provide continued medical and dental coverage under this Section
               4.03 and COBRA shall be deemed satisfied.

               D. Subsidiary:  The obligations and rights arising under this
                  ___________
               Section 4.03 shall apply to a Subsidiary and Participants who are
               employed by that Subsidiary under the same conditions and to the
               same extent such Subsidiary maintains corresponding coverage for
               its employees including continued coverage, if any, after
               employment termination and retirement.

               E. Funding: The obligations of the Company or Subsidiary (as
                  ________
               appropriate) to arrange for, and make available, continued
               medical and dental coverage upon a Participant's Employment
               Termination under either (a) this Section 4.03, or (b) Article
               IV, paragraph (5) of the SRP shall be funded by the Company or
               Subsidiary (as appropriate) as soon as practicable after the
               Employment Termination.  Such funding shall be accomplished by
               establishing an irrevocable trust for the deposit of all required

                                          14
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               contributions and for the payment of all benefits. The Company or
               Subsidiary (as appropriate) shall fund such trust on a sound
               actuarial basis so as to guarantee prompt payment of these
               benefits to eligible Participants (including covered family
               members).

               F. Secured Coverage:  The continued coverage of a Participant
                  _________________
               (including covered family members) under either (a) this Section
               4.03, or (b) Article IV, paragraph (5) of the SRP, or (c) under
               the Health Care Plans, once secured, shall not be terminated or
               decreased by the Company or Subsidiary (as appropriate) without
               the written consent of all of the affected Participants.

     4.04      Supplemental Retirement Benefits
               ________________________________

               A.  Eligible Participants:  Notwithstanding any provision of the
                   ______________________
               SRP to the contrary, if a Participant becomes entitled to
               Severance Pay under this Program or if the SRP is terminated
               within 5 years after a Change of Control, and, at that time, in
               either case, he

               (a)  is an Eligible Management Associate (within the meaning of
               the SRP), and

               (b)  is age 45 or older with at least 5 years of Credited Service
               (within the meaning of the SRP), he also shall become entitled to
               the same SRP benefits (as adjusted by this Section 4.04) he would
               have become vested in under Article VIII, paragraph (2) of the
               SRP as if the SRP had been terminated on the day before his
               Employment Termination.

               B.     Enhanced SRP Benefit:  In calculating such SRP benefit,
                      _____________________
               the Participant

               (a)  shall receive credit for an additional 5 years of Credited
               Service (provided that total Credited Service under the SRP does
               not exceed 40 years), and

               (b)  shall, if age 55 or less, be deemed to be 5 years older than
               his actual age, or if age 56 to 59, be deemed to be age 60, and

                                          15
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               (c) shall have his Severance Pay counted as Compensation (within
               the meaning of the SRP) as if paid in substantially equal monthly
               installments commencing with his Employment Termination, and

               (d)  for purposes of clause (ii) of subparagraph (b) of paragraph
               (1) of Article IV of the SRP, the single life, no-death-benefit
               annuity equivalent shall not exceed the equivalent determined by
               ascribing to the Company common stock, as of the Valuation Date
               (within the meaning of the SRP), a value equal to the average of
               the mean of the high and low sales prices (as reported in the
               composite transaction table covering transactions of New York
               Stock Exchange-listed securities) for each trading day in the two
               calendar quarters immediately preceding the calendar quarter in
               which a Change of Control occurs, and

               (e)  the amount payable shall be limited to the amount payable
               under the SRP at age 60 assuming such Participant remained in
               employment up to age 60 at a Compensation (within the meaning of
               the SRP) level equal to that of the calendar year immediately
               preceding his Employment Termination.

     4.05      Term Life Insurance Coverage for SRP Participants
               _________________________________________________

               A.  Eligible Participants:  Notwithstanding any provision of the
                   ______________________
               J. C. Penney Company, Inc. Group Life Insurance Plan (the "Life
               Insurance Plan") to the contrary, if a Participant becomes
               entitled to Severance Pay under this Program, and, at that time,
               is an Eligible Management Associate (within the meaning of the
               SRP), he shall become entitled to purchase term life insurance
               coverage and the Company shall arrange for, and make available
               under the Life Insurance Plan, coverage as of his Employment
               Termination in accordance with this Section 4.05.

               B.  Amount and Duration of Coverage:  Term life insurance
                   ________________________________
               coverage shall be based on a Participant's Annual Earnings for
               Benefits (within the meaning of the Life Insurance Plan), and
               shall consist in part of coverage paid for entirely by the
               Company, and in part of optional additional coverage paid for by
               the

                                          16
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               Participant at a cost not to exceed a monthly rate of 24c per
               $1,000.  The amount and duration of coverage shall be limited in
               accordance with the following schedule.  Any life insurance
               benefits to which a Participant may become entitled on account of
               Company-paid coverage shall be paid solely from the insurance
               policy or policies provided under the Life Insurance Plan, and
               any life insurance benefits to which a Participant may become
               entitled on account of Associate-paid coverage shall be paid
               solely from the insurance policy or policies provided under the
               J. C. Penney Company, Inc. Associate-Paid Insured Group Term Life
               Insurance Plan.

          Age at Employment
             Termination        Term Life Insurance Coverage
          _________________     ____________________________

                              Company Paid                     Participant Paid
                              _____________                    ________________

          Under age 60   1 x Annual Earnings for          1 x Annual Earnings
                         Benefits remaining constant up   for Benefits remaining
                         to age 60 with a 10% per year    constant until age 65
                         decrease thereafter on the       when this coverage
                         first day of the month after     expires.
                         each birthday starting at age 61
                         until age 70 when this coverage
                         expires.  Notwithstanding the
                         preceding sentence, if at the
                         end of the first 5 years of
                         coverage the Participant is
                         still under age 60, this
                         coverage expires.

          Age 60 to 69   Same as above if age 60 -        Same as above if
                         if over age 60, the initial      under age 65 - if
                         coverage is 10% less for each    over age 65, this
                         year over age 60 and thereafter  coverage is not
                         decreases annually to same       available.
                         level as if coverage

                                          17
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                         started at age 60 and expired
                         at age 70.

               C.  Limitations:  If a Participant qualifies for continued term
                   ____________
               life insurance coverage at his Employment Termination under
               Article Four, paragraph (5) of the SRP, including, if applicable,
               enhanced benefits under Article VIII, paragraph (1) of the SRP,
               the Company's obligations under this Section 4.05 shall be deemed
               satisfied.

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     4.06      Associate-Paid Retiree Term Life Insurance
               __________________________________________

               Notwithstanding any provision of the J. C. Penney Company, Inc.
               Associate-Paid Group Term Life Insurance Plan to the contrary, if
               a Participant becomes entitled to Severance Pay under this
               Program, then for purposes of determining the Participant's
               eligibility for retiree coverage under such plan (a) the age 55
               minimum requirement shall be waived, and (b) the number of points
               required based on age at Employment Termination and eligibility
               service (within the meaning of said plan) shall be 70.  Retiree
               life insurance benefits shall be paid solely from the insurance
               policy or policies provided under said plan.

               A Participant who is a Drugstore Associate shall not be eligible
               for the benefits described in this Section 4.06.

     4.07      Annual Incentive Compensation Awards
               ____________________________________

               If a Participant becomes entitled to Severance Pay under this
               Program, and he

               (a) is a participant in the Company's 1989 Management Incentive
               Compensation Program (or any successor plan thereto), he shall
               receive a pro-rata award of annual incentive compensation valued
               at $1.00 per unit for his months of service in the fiscal year in
               which occurs his Employment Termination, or

               (b) is a Drugstore Associate who is a participant in the Eckerd
               Corporation Key Management Bonus Plan (or any successor plan
               thereto), he shall receive a pro-rata award of annual bonus
               valued at the target payout percentage for his months of service
               in the fiscal year in which occurs his Employment Termination.

               Such benefit shall be paid to the Participant in a lump sum as
               soon as practicable after Employment Termination.

                                          19
<PAGE>
     4.08      EVA Awards
               __________

               If a Participant becomes entitled to Severance Pay under this
               Program and is a participant in the J. C. Penney Company, Inc.
               1998 EVA Performance Plan, he shall receive his entire bonus
               reserve account under said plan and shall receive a pro-rata EVA
               award valued at $1.00 per unit (or, in the case of Eckerd
               Corporation, at the target payout percentage) for his months of
               service in the fiscal year in which occurs his Employment
               Termination.  Such benefits shall be paid in a lump sum as soon
               as practicable after Employment Termination.

     4.09      Relocation
               __________

               If a Participant has relocated himself (including his family)

               (a) at the request and authorization of the Company and such
               relocation occurs within one year prior to a Change of Control,
               and

               (b) becomes entitled to Severance Pay under this Program as a
               result of a Change of Control occurring within two years after
               his Company-authorized relocation date, he also shall become
               entitled to relocation benefits (assistance and reimbursements)
               to change his domicile, if he wishes.  Such benefits shall be
               determined in accordance with the procedures in effect at the
               time he relocated, but in no event will they exceed the aggregate
               cost to the Company of such benefits he received at that time.

     4.10      Code Section 280G Gross-Up
               __________________________

               Anything in the Program to the contrary notwithstanding, if a
               Participant becomes entitled to Severance Pay and/or other
               benefits under the Program and it shall be determined (as
               hereafter provided) that any payment or distribution by the
               Company or a Subsidiary to or for the benefit of the Participant,
               whether paid or payable or distributed or distributable pursuant
               to the terms of the Program or otherwise pursuant to or by reason
               of any other agreement, policy, plan, program or

                                          20
<PAGE>
               arrangement, including without limitation any stock option, stock
               appreciation right or similar right, or the lapse or termination
               of any restriction on or the vesting or exercisability of any of
               the foregoing (a "Payment"), would be subject to the excise tax
               imposed by Section 4999 of the Code (or any successor provision
               thereto) by reason of being "contingent on a change in ownership
               or control" of the Company, within the meaning of Section 280G of
               the Code (or any successor provision thereto) or to any similar
               tax imposed by state or local law, or any interest or penalties
               with respect to such excise tax (such tax or taxes, together with
               any such interest or penalties, are hereafter collectively
               referred to as the "Excise Tax"), then the Participant shall be
               entitled to receive an additional payment or payments (a "Gross-
               Up Payment") in an amount such that, after payment by the
               Participant of all taxes (including any interest or penalties
               imposed with respect to such taxes other than interest and
               penalties imposed by reason of the Employee's failure to timely
               file a tax return or pay taxes shown due on his return),
               including any Excise Tax, imposed upon the Gross-Up Payment, the
               Participant retains an amount of the Gross-Up Payment equal to
               the Excise Tax imposed upon the Payments.  No Gross-Up Payment
               will be made with respect to the Excise Tax, if any, attributable
               to (a) any incentive stock option, as defined by Section 422 of
               the Code ("ISO") granted prior to the Effective Date of the
               Program (unless a comparable Gross-Up Payment has theretofore
               been made available with respect to such option), or (b) any
               stock appreciation or similar right, whether or not limited,
               granted in tandem with any ISO described in clause (a).
               Procedures for determining the amount of the Gross-Up Payment and
               other matters related to the Gross-Up Payment are set forth in
               Exhibit A attached to and made a part of the Program.

                                          21
<PAGE>
                                     ARTICLE FIVE
                              AMENDMENT AND TERMINATION

     5.01      Amendment
               _________

               The Program may be amended by the Company's Board of Directors
               provided, however, that

               (a)  any amendment which would have an adverse effect on any
               Participant's Program benefits and/or rights or

               (b)  any amendment after a Change of Control,

               cannot be approved without the written consent of all of the
               affected Participants.

     5.02      Termination
               ___________

               The Program shall continue for a term of five years from the
               Effective Date, provided, however, that it shall be renewed
               automatically for subsequent five- year periods unless the Board
               of Directors of the Company shall decide to terminate the Program
               by duly adopting a resolution stating that the Program shall not
               be renewed.  Such resolution shall be adopted at least sixty days
               before the end of any of the above five-year periods.

               If, however, a Change of Control occurs during the term of the
               Program, the Program shall continue until the Company and each
               Subsidiary (as appropriate) shall have fully performed all of
               their obligations under the Program with respect to all
               Participants, and shall have paid all Severance Benefits under
               the Program in full to all Participants.

                                          22
<PAGE>
                                     ARTICLE SIX
                                    MISCELLANEOUS

     6.01      Participant Rights
               __________________

               The Company and each Subsidiary intend this Program to constitute
               a legally enforceable obligation between (a) the Company or
               Subsidiary (as appropriate) and (b) each Participant, and that
               said obligation shall be subject to enforcement under Section
               502(a) of ERISA.

               It is also intended that the Program shall confer vested and non-
               forfeitable rights for each Participant to receive benefits to
               which the Participant is entitled under the terms of the Program
               with Participants being third party beneficiaries.

               Nothing in the Program, however, shall be construed to confer on
               any Participant any right to continue in the employ of the
               Company or a Subsidiary or to affect in any way the right of the
               Company or Subsidiary to terminate a Participant's employment
               without prior notice at any time for any reason or no reason.

     6.02      Claims Procedure
               ________________

               A.  Allocation of Claims Responsibility:  With respect to any
                   ____________________________________
               claim for benefits which are provided exclusively under the
               Program (e.g., severance pay), the claim shall be approved or
               disapproved by the Committee within 90 days following the receipt
               of the information necessary to process the claim.  In the event
               the Committee denies a claim for benefits in whole or in part,
               the Committee shall notify the claimant in writing of the denial
               of the claim.  Such notice by the Committee shall also set forth,
               in a manner calculated to be understood by the claimant, the
               specific reason for such denial, the specific Plan provisions on
               which the denial is based, a description of any additional
               material or information necessary to perfect the claim with an
               explanation of why such material or information is necessary, and
               an explanation of the Program's appeal and arbitration procedures
               as set forth

                                         23
<PAGE>
               below.  If no action is taken by the Committee on a claim within
               90 days, the claim shall be deemed to be denied for purposes of
               the appeals and arbitration procedure.

               With respect to any claim for benefits which, under the terms of
               the Program, are provided under another employee benefit plan
               maintained by the Company (i.e., group health, life insurance,
               and SRP benefits), the Committee shall determine claims regarding
               the Participant's eligibility under the Program in accordance
               with the preceding paragraph, but the administration of any other
               claim with respect to such benefits (including the amount of such
               benefits) shall be subject to the claims procedure specified in
               such other employee benefit plan.

               B.  Appeal or Arbitration:  In the event the Committee denies a
                   ______________________
               claim for benefits which are provided exclusively under the
               Program (e.g., severance pay), or denies a claim regarding the
               claimant's eligibility under the Program, the Participant
               (including his duly authorized representative) shall have the
               option:

               (a)  to file an appeal of his denied claim with the Committee (or
               any successor committee thereto) which shall be the named
               fiduciary for review of denied claims under Sections 402(a)(2) of
               ERISA, and shall have the same authority and discretion as the
               Committee would have with respect to deciding the appeal, or

               (b)  submit such denied claim to an arbitration panel for binding
               and final decision.

               If a Participant chooses to prosecute his appeal under (a) above,
               his appeal must be submitted in writing 60 days after the claim
               is denied by the Committee and must (i) request a review of the
               claim for benefits under the Program or regarding eligibility for
               Program benefits, (ii) set forth all of the grounds upon which
               the claimant's request for review is based and any facts in
               support thereof, and (iii) set forth any issues or comments which
               the claimant deems pertinent to the appeal.  The

                                         24
<PAGE>
               Committee (or successor) shall make a full and fair review of
               each appeal and any written materials submitted in connection
               with the appeal.  The Committee (or successor) shall act upon
               each appeal within 60 days after receipt thereof unless special
               circumstances require an extension of the time for processing, in
               which case a decision shall be rendered as soon as possible but
               not later than 120 days after the appeal is received.  The
               claimant shall be given the opportunity to review pertinent
               documents or materials upon submission of a written request to
               the Committee (or successor), provided the Committee
               (or successor) finds the requested documents or materials are
               pertinent to the appeal.  On the basis of its review, the
               Committee (or successor) shall make an independent determination
               of the claimant's eligibility for benefits under the Program.
               In the event the Committee (or successor) denies an appeal in
               whole or in part, it shall give written notice of the decision to
               the claimant, which notice shall set forth in a manner calculated
               to be understood by the claimant the specific reasons for such
               denial and which shall make specific reference to the pertinent
               Program provisions on which the decision was based.  The decision
               of the Committee (or successor) on any appeal shall be final and
               conclusive upon all parties thereto, subject to any rights of the
               claimant to bring a civil action pursuant to Section 502 of
               ERISA.

               If a Participant chooses to submit his denied claim to an
               arbitration panel under (b) above, it shall be heard, promptly,
               before a panel of three independent arbitrators, one selected by
               the Company or Subsidiary (as appropriate), one selected by the
               Participant, and a third selected by the two other arbitrators.
               In the event that agreement cannot be reached on the selection of
               the third arbitrator, such arbitrator shall be selected by the
               American Arbitration Association ("AAA").  All arbitrators shall
               be selected from a list provided by the AAA. All matters
               presented to a panel shall be decided by majority vote.  All
               decisions of the arbitration panel shall be conclusive and
               binding upon the Company, Subsidiary, Participant, and all
               interested parties.  These arbitration provisions shall be

                                          25
<PAGE>
               binding, valid, enforceable and irrevocable and shall survive the
               termination of this Program.  Any final decision of the
               arbitrator so chosen may be enforced by a court of competent
               jurisdiction.

               Appeals with respect to any claim for benefits which, under the
               terms of the Program, are provided under another employee benefit
               plan maintained by the Company (i.e., group health, life
               insurance, and SRP benefits), shall be subject to the claims
               appeals procedure specified in such other employee benefit plan
               in lieu of the appeals and arbitration provisions above.

               C.  Civil Enforcement Under ERISA:  If a Participant believes
                   ______________________________
               dispute resolution options described in Section 6.02-B above
               would be futile or cause irreparable harm to his rights and/or
               benefits under the Program, he may, in his sole discretion, elect
               to enforce his rights and/or recover his benefits under the
               Program pursuant to Section 502(a) of ERISA.  After a Change of
               Control, the Company or Subsidiary (as appropriate) shall treat a
               Participant who takes such an enforcement action pursuant to
               Section 502(a) of ERISA as having exhausted his administrative
               remedies under the Program.

     6.03      Governing Law
               _____________

               Except to the extent the Program is subject to the provisions of
               ERISA, the Program shall be construed and governed in accordance
               with the laws of the State of Delaware (regardless of the law
               that might otherwise govern under applicable Delaware principles
               of conflict of laws).

     6.04      Expenses
               ________

               All Program administration expenses incurred by the Committee
               shall be paid by the Company and all other administration
               expenses incurred by the Company or Subsidiary shall be paid by
               the Company or Subsidiary (as appropriate).  All expenses of a
               Participant incurred in successfully enforcing his rights and/or
               to recover his benefits under Section 6.02 of the Program,
               including but not limited to,

                                          26
<PAGE>
               attorney's fees, court costs, arbitration costs, and other
               expenses shall be paid by the Company. The Company shall pay, or
               reimburse the Participant for such fees, costs and expenses,
               promptly upon presentment of appropriate documentation.

     6.05      Effect on Other Benefits
               ________________________

               Except as otherwise provided herein, the Program shall not affect
               any Participant's rights or entitlement under any other
               retirement or employee benefit plan offered to him by the Company
               or Subsidiary (as appropriate) as of his Employment Termination.

     6.06      Successors
               __________

               The Program shall be binding upon any successor in interest of
               the Company or Subsidiary (as appropriate) and shall inure to the
               benefit of, and be enforceable by, a Participant's assigns or
               heirs.

     6.07      Severability
               ____________

               The various provisions of the Program are severable and any
               determination of invalidity or unenforceability of any one
               provision shall not have any effect on the remaining provisions.

     6.08      Construction
               ____________

               In determining the meaning of the Program, words imparting the
               masculine gender shall include the feminine and the singular
               shall include the plural, unless the context requires otherwise.
               Headings of sections and subsections of the Program are for
               convenience only and are not intended to modify or affect the
               meaning of the substantive provisions of the Program.

     6.09      References to Law, Regulations and Other Plans
               ______________________________________________

               Each reference in the Program to the Code or ERISA or regulations
               thereunder, or to any plan, program or document of the Company or
               Subsidiary, shall include any amendments or successor provisions

                                         27
<PAGE>
               thereto without the necessity of amending the Program for such
               changes.

                                         28
<PAGE>
                                      Exhibit A

                       Procedures Relating to Gross-Up Payments
                       ________________________________________


                    (a) Subject to the provisions of paragraph (e) hereof, all
               determinations required to be made under Section 4.10 of the
               Program, including whether an Excise Tax is payable by the
               Participant and the amount of such Excise Tax and whether a
               Gross-Up Payment is required to be paid by the Company to the
               Participant and the amount of such Gross-Up Payment, shall be
               made by a nationally recognized accounting firm (the "Accounting
               Firm") selected by the Participant in his sole discretion.  The
               Participant shall direct the Accounting Firm to submit its
               determination and detailed supporting calculations to both the
               Company and the Participant within 15 calendar days after the
               date of the Participant's Employment Termination, if applicable,
               and any other such time or times as may be requested by the
               Company or the Participant.  If the Accounting Firm determines
               that any Excise Tax is payable by the Participant, the Company
               shall pay the required Gross-Up Payment to the Participant within
               five business days after the receipt of such determination and
               calculations.  If the Accounting Firm determines that no Excise
               Tax is payable by the Participant, it shall, at the same time as
               it makes such determination, furnish the Participant with an
               opinion that he has substantial authority not to report any
               Excise Tax on his federal, state, local income or other tax
               return.  As a result of the uncertainty in the application of
               Section 4999 and other applicable provisions of the Code (or any
               successor provisions thereto) and the possibility of similar
               uncertainty regarding applicable state or local tax law at the
               time of any determination by the Accounting Firm hereunder, it is
               possible that Gross-Up Payments that shall not have been made by
               the Company should have been made (an "Underpayment"), consistent
               with the calculations required to be made hereunder.  In the
               event that the Company exhausts or fails to pursue its remedies
               pursuant to paragraph (e) hereof and the Participant thereafter
               is required to make a payment of any Excise Tax, the Participant
               shall direct the Accounting Firm to determine the amount of the
               Underpayment that has occurred and to submit its determination
               and detailed supporting calculations to both the Company and the
               Participant as promptly as possible.  Any such Underpayment shall
               be promptly paid by the Company to, or for the benefit of, the

                                          29
<PAGE>
               Participant within five business days after receipt of such
               determination and calculations.

                    (b) The Company and the Participant shall each provide the
               Accounting Firm access to and copies of any books, records and
               documents in the possession of the Company or the Participant, as
               the case may be, reasonably requested by the Accounting Firm, and
               otherwise cooperate with the Accounting Firm in connection with
               the preparation and issuance of the determination contemplated by
               paragraph (a) hereof.  Any determination by the Accounting Firm
               as the amount of the Gross-Up Payment shall be binding upon the
               Company and the Participant.

                    (c) The federal, state and local income or other tax returns
               filed by the Participant shall be prepared and filed on a
               consistent basis with the determination of the Accounting Firm
               with respect to the Excise Tax payable by the Participant.  The
               Participant shall make proper payment of the amount of any Excise
               Tax, and at the request of the Company, provide to the Company
               true and correct copies (with any amendments) of his federal
               income tax return as filed with the Internal Revenue Service and
               corresponding state and local tax returns, if relevant, as filed
               with the applicable taxing authority, and such other documents
               reasonably requested by the Company, evidencing such payment.  If
               prior to the filing of Participant's federal income tax return,
               or corresponding state or local tax return, if relevant, the
               Accounting Firm determines that the amount of the Gross-Up
               Payment should be reduced, the Participant shall within five
               business days pay to the Company the amount of such reduction.

                    (d) The fees and expenses of the Accounting Firm for its
               services in connection with the determinations and calculations
               contemplated by paragraphs (a) and (c) hereof shall be borne by
               the Company.  If such fees and expenses are initially paid by the
               Participant, the Company shall reimburse the Participant the full
               amount of such fees and expenses within five business days after
               receipt from the Participant of a statement therefor and
               reasonable evidence of this payment thereof.

                    (e) The Participant shall notify the Company in writing of
               any claim by the Internal Revenue Service that, if successful,
               would require the payment by the Company of a Gross-Up Payment.
               Such notification shall be given as

                                          30
<PAGE>
               promptly as practicable but no later than 10 business days after
               the Participant actually receives notice of such claim and the
               Participant shall further apprise the Company of the nature of
               such claim and the date on which such claim is requested to be
               paid (in each case, to the extent known by the Participant).  The
               Participant shall not pay such claim prior to the earlier of (a)
               the expiration of the 30-calendar-day period following the date
               on which he gives such notice to the Company and (b) the date
               that any payment of amount with respect to such claim is due.  If
               the Company notifies the Participant in writing prior to the
               expiration of such period that it desires to contest such claim,
               the Participant shall:

                         (1) provide the Company with any written records or
               documents in his possession relating to such claim reasonably
               requested by the Company;

                         (2) take such action in connection with contesting such
               claim as the Company shall reasonably request in writing from
               time to time, including without limitation accepting legal
               representation with respect to such claim by an attorney
               competent in respect to the subject matter and reasonably
               selected by the Company;

                         (3) cooperate with the Company in good faith in order
               effectively to contest such claim; and

                         (4) permit the Company to participant in any
               proceedings relating to such claim;

               provided, however, that the Company shall bear and pay directly
               all costs and expenses (including interest and penalties)
               incurred in connection with such contest and shall indemnify and
               hold harmless the Participant, on an after-tax basis, for and
               against any Excise Tax or income tax, including interest and
               penalties with respect thereto, imposed as a result of such
               representation and payment of costs and expenses.  Without
               limiting the foregoing provisions of this paragraph (e), the
               Company shall control all proceedings taken in connection with
               the contest of any claim contemplated by this paragraph (e) and,
               at its sole option, may pursue or forego any and all
               administrative appeals, proceedings, hearings and conferences
               with the taxing authority in respect of such claim (provided,
               however, that the Participant may participate therein at his own
               cost and expense) and may, at its option, either

                                          31
<PAGE>
               direct the Participant to pay the tax claimed and sue for a
               refund or contest the claim in any permissible manner, and the
               Participant agrees to prosecute such contest to a determination
               before any administrative tribunal, in a court of initial
               jurisdiction and in one or more appellate courts, as the Company
               shall determine; provided, however, that if the Company directs
               the Participant to pay the tax claimed and sue for a refund, the
               Company shall advance the amount of such payment to the
               Participant on a interest-free basis and shall indemnify and hold
               the Participant harmless, on an after-tax basis, from any Excise
               Tax or income tax or other tax, including interest or penalties
               with respect thereto, imposed with respect to such advance; and
               provided further, however, that any extension of the statute of
               limitations relating to payment of taxes for the taxable year of
               the Participant with respect to which the contested amount is
               claimed to be due is limited solely to such contested amount.
               Furthermore, the Company's control of any such contested claim
               shall be limited to issues with respect to which a Gross-Up
               Payment would be payable hereunder and the Participant shall be
               entitled to settle or contest, as the case may be, any other
               issue raised by the Internal Revenue Service or any other taxing
               authority.

                    (f) If, after the receipt by the Participant of an amount
               advanced by the Company pursuant to paragraph (e) hereof, the
               Participant receives any refund with respect to such claim, the
               Participant shall (subject to the Company's complying with the
               requirements of paragraph (e) hereof) promptly pay to the Company
               the amount of such refund (together with any interest paid or
               credited thereon after any taxes applicable thereto).  If, after
               the receipt by the Participant of an amount advanced by the
               Company pursuant to paragraph (e) hereof, a determination is made
               that the Participant shall not be entitled to any refund with
               respect to such claim and the Company does not notify the
               Participant in writing of its intent to contest such denial or
               refund prior to the expiration of 30 calendar days after such
               determination, then such advance shall be forgiven and shall not
               be required to be repaid and the amount of such advance shall
               offset, to the extent thereof, the amount of Gross-Up Payment
               required to be paid pursuant to Section 4.10 of the Program.

                                          32
<PAGE>
                              J. C. PENNEY COMPANY, INC.
                          1999 SEPARATION ALLOWANCE PROGRAM
                                         FOR
                         PROFIT-SHARING MANAGEMENT ASSOCIATES

                                  TABLE OF CONTENTS
                                  _________________

     Article                                                                Page
     _______                                                                ____

     ARTICLE ONE     DESCRIPTION OF PROGRAM  . . . . . . . . . . . . . . . .  1

          1.01 Establishment of Program  . . . . . . . . . . . . . . . . . .  1
          1.02 Purposes of Program  . . . . .. . . . . . . . . . . . . . . .  1
          1.03 Types of Benefits   . . . . . . . . . . . . . . . . . . . . .  2
          1.04 Administration  . . . . . . . . . . . . . . . . . . . . . . .  2

     ARTICLE TWO     DEFINITIONS   . . . . . . . . . . . . . . . . . . . . .  3

     ARTICLE THREE     ELIGIBILITY   . . . . . . . . . . . . . . . . . . . . 10

          3.01 Eligibility on the Effective Date   . . . . . . . . . . . . . 10
          3.02 Future Eligibility   .  . . . . . . . . . . . . . . . . . . . 10
          3.03 Loss of Management Status   . . . . . . . . . . . . . . . . . 10

     ARTICLE FOUR     BENEFITS   . . . . . . . . . . . . . . . . . . . . . . 11

          4.01 Severance Pay   . . . . . . . . . . . . . . . . . . . . . . . 11
          4.02 Stock Options   . . . . . . . . . . . . . . . . . . . . . . . 11
          4.03 Medical and Dental Coverage   . . . . . . . . . . . . . . . . 12
          4.04 Supplemental Retirement Benefits  . . . . . . . . . . . . . . 14
          4.05 Term Life Insurance Coverage for SRP Participants   . . . . . 15
          4.06 Associate-Paid Retiree Term Life Insurance  . . . . . . . . . 17
          4.07 Annual Incentive Compensation Awards  . . . . . . . . . . . . 17
          4.08 EVA Awards  . . . . . . . . . . . . . . . . . . . . . . . . . 18
          4.09 Relocation  . . . . . . . . . . . . . . . . . . . . . . . . . 18
          4.10 Code Section 280G Gross-Up  . . . . . . . . . . . . . . . . . 18

     ARTICLE FIVE     AMENDMENT AND TERMINATION  . . . . . . . . . . . . . . 20

          5.01 Amendment   . . . . . . . . . . . . . . . . . . . . . . . . . 20
          5.02 Termination   . . . . . . . . . . . . . . . . . . . . . . . . 20

<PAGE>
     ARTICLE SIX     MISCELLANEOUS   . . . . . . . . . . . . . . . . . . . . 21

          6.01 Participant Rights  . . . . . . . . . . . . . . . . . . . . . 21
          6.02 Claim Procedures  . . . . . . . . . . . . . . . . . . . . . . 21
          6.03 Governing Law   . . . . . . . . . . . . . . . . . . . . . . . 24
          6.04 Expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . 24
          6.05 Effect on Other Benefits  . . . . . . . . . . . . . . . . . . 25
          6.06 Successors  . . . . . . . . . . . . . . . . . . . . . . . . . 25
          6.07 Severability  . . . . . . . . . . . . . . . . . . . . . . . . 25
          6.08 Construction  . . . . . . . . . . . . . . . . . . . . . . . . 25
          6.09 References to Law, Regulations and Other Plans  . . . . . . . 25


     EXHIBIT A     PROCEDURES RELATING TO GROSS-UP PAYMENTS  . . . . . . . . 27

                                         ii