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                                                                   Exhibit 10(b)

J. C. Penney Company, Inc. Retirement Plan For Non-Associate Directors
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ARTICLE I PURPOSE OF PLAN

The purpose of the J. C. Penney Company, Inc. Retirement Plan for Non-Associate
Directors is to provide retirement benefits for members of the Board of
Directors who have not been Associates, to provide competitive compensation for
such members of the Board of Directors, and to enable the Company to attract and
retain directors who are not Associates.

ARTICLE II DEFINITIONS
For the purpose of this Plan the following terms shall have the following
meanings:

ASSOCIATE: Used in the Company's organization interchangeably with the word
"employee" and, for purposes of the Plan, means an employee of the Company or of
any Subsidiary, including an officer who may or may not be a director, but
excluding a director serving only in that capacity.

BOARD OF DIRECTORS: The Board of Directors of the Company.

BOARD SERVICE: The aggregate number of full years plus any fraction of a year
(expressed as 1/12 of a year for each full month or fraction thereof) of active
service as a director of the Company commencing on the date fixed by the Board
of Directors or the stockholders of the Company as the date of election of a
director.

CODE: The Internal Revenue Code of 1986, as amended from time to time.

COMMITTEE: The committee appointed by the Board of Directors to administer the
Plan provided for in Article V.

COMPANY: J. C. Penney Company, Inc., a Delaware corporation.

EARLY RETIREMENT DATE: The date on which an Eligible Director ceases to be a
director of the Company (prior to his Normal Retirement Date) provided that the
director has at least five years of Board Service.

ELIGIBLE DIRECTOR: Subject to paragraph (4) of Article III and paragraph (2) of
Article VII, any person who, after the effective date of the Plan, has at least
five years of Board Service, and who is not entitled to receive benefits under
the Company's Pension Plan for its Associates with the following exceptions: (1)
any person elected or appointed to the Board of Directors after February 12,
1997 and (2) any otherwise eligible Director who makes a one-time election on or
about May 1, 1997, to cease participation in the Plan.

MANDATORY RETIREMENT DATE:  The first day of the month next following the date
of the Annual Meeting of Stockholders of the Company at which an Eligible
Director becomes ineligible for reelection pursuant to the Company's Bylaws.

NORMAL RETIREMENT DATE: The first day of the month next following the date of
the Annual Meeting of Stockholders of the Company on which an Eligible Director
ceases to be a director next following his attainment of age 70.

PLAN: This Retirement Plan for Non-Associate Directors.

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SUBSIDIARY: Any corporation of which the Company owns directly or indirectly at
least 50 percent of the outstanding common stock.

SURVIVING SPOUSE: The person to whom an Eligible Director is legally married at
the time of his death, under the laws of the State in which he is domiciled, or
if he is domiciled outside the United States, under the laws of the State of New
York, and who is living at the date benefits are payable under paragraph (3),
(4), or (5) of Article IV of this Plan.

ARTICLE III PARTICIPATION

(1) An Eligible Director shall participate in the Plan and shall be entitled to
receive benefits under the Plan as provided in Article IV upon reaching his or
her Normal Retirement Date or Mandatory Retirement Date, as the case may be, or
such earlier date as provided in paragraph (3) of this Article III.

(2) Determination of whether an Eligible Director has sustained a permanent
disability sufficient to entitle him to receive benefits under the Plan shall be
made in the sole discretion of the Committee.

(3) Benefits under the Plan shall not be paid to any Eligible Director, whether
or not permanently disabled, prior to such Eligible Director having attained age
65.  Benefits under the Plan may be paid to an Eligible Director on the First
day of any month following his Early Retirement Date and after his having
attained age 65 but prior to his Normal Retirement Date in the sole discretion
of the Committee.

(4) Except in the case of permanent disability, benefits under the Plan shall
not be paid to an Eligible Director who does not make himself available to
provide consulting advice to the Company, as the Company may reasonably request.

(5) Eligible Directors shall not be required or permitted to make any
contributions pursuant to the Plan.

ARTICLE IV BENEFITS

(1) The annual amount of benefit payable under the Plan in monthly installments
to an Eligible Director commencing on or after his or her Normal Retirement
Date, or an earlier date as provided in paragraph (3) of Article III, as the
case may be, shall be:

(a) if an Eligible Director retires on or after his or her Normal Retirement
Date, 100 percent of the annual retainer amount in effect at the time payment is
made, or

(b) if an Eligible Director retires at an Early Retirement Date, 0.833 percent
of the annual retainer amount in effect at the time payment is made for each
full month or portion thereof of Board Service, such benefit not to exceed 100
percent of said annual retainer amount.

(2) If an Eligible Director retires on or after his or her Normal Retirement
Date, or at an Early Retirement Date due to becoming permanently disabled, such
benefits shall be payable for his life.  If an Eligible Director retires at an
Early Retirement Date for any reason other than becoming permanently disabled,
such benefits shall be payable for the lesser of his or her life or term of
Board Service.

(3) If an Eligible Director who retires on or after his or her Normal Retirement
Date or who is deemed permanently disabled is receiving benefits under the Plan
at the date of his death but has not received such benefits for a period of 10
years (120 months), a Surviving Spouse shall receive upon the death of such
Eligible Director 100 percent of the benefits payable to him according to
section 

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(A) of paragraph (1) of this Article IV for the remainder of such 10 year (120
months) period. The benefits under the Plan shall be paid to the Surviving
Spouse in monthly installments commencing on the first day of the month
following such Eligible Director's death and terminating with the installment
payable on the earlier of (a) the expiration of the remainder of such 10 year
(120 months) period, or (b) on the first day of the month in which such
Surviving Spouse dies.

(4) If an Eligible Director dies while in active service as a member of the
Board of Directors or after having retired at an Early Retirement Date but has
not received any benefits under the Plan, a Surviving Spouse shall receive 100
percent of such Eligible Director's benefit which he would have been entitled to
if he had retired on the date of his death pursuant to paragraph (1) of this
Article IV for a 10 year (120 months) period, payable in monthly installments,
commencing on the later of the first day of the month in which such Eligible
Director would have attained age 65 or the first day of the month following such
Eligible Director's death, and terminating with the installment payable on the
earlier of (a) the expiration of such 10 year (120 month) period or (b) on the
first day of the month in which such Surviving Spouse dies.

(5) If an Eligible Director who retires at an Early Retirement Date is receiving
benefits under the Plan at the date of his death but has not received such
benefit for a period equal to the lesser of (a) his Board Service or (b) 10
years (120 months), a Surviving Spouse shall receive upon the death of such
Eligible Director 100 percent of the benefits paid to him according to section
(b) of paragraph (1) of this Article IV for the remainder of his Board Service
or 10 years (120 months), whichever shall be less.  The benefits under the Plan
shall be paid to the Surviving Spouse in monthly installments commencing on the
first day of the month following such Eligible Director's death and terminating
with the installment payable on the earlier of (a) the expiration of the period
equal to such Service or 10 year (120 months) period, as the case may be, or (b)
on the first day of the month in which such Surviving Spouse dies.

(6) If an eligible Director makes the election provided in Article II to cease
participation in the Plan, the lump sum present value of his or her benefit as
of May 1, 1997 shall be transferred to the J. C. Penney Company, Inc., Deferred
Compensation Plan for Directors and no benefit will be paid to such Director
under this Plan.

ARTICLE V ADMINISTRATION

The Plan shall be administered by a committee ("Committee") consisting of one or
more persons appointed from time to time by the Board of Directors out of those
members of the Board of Directors who have never been eligible to participate in
the Plan.  The Committee shall have plenary authority in its discretion, but
subject to the express provisions of the Plan, to interpret the Plan, to
prescribe, amend, and rescind, rules and regulations relating to it, and to make
all other determinations deemed necessary or advisable for the administration of
the Plan. The determinations of the Committee on the foregoing matters shall be
conclusive and binding on all interested parties.

ARTICLE VI FUNDING OF BENEFITS

The Plan shall be unfunded, unless and until a Change of Control (as defined
hereinafter) shall be deemed to have occurred, in which event the Company's
liability for benefits under the Plan shall be funded under an irrevocable trust
which shall, to the extent possible, be subject to the claims of the Company's
general creditors so that Eligible Directors will not be currently taxed upon
the funding of such benefits.

For purposes of this Article VI, a Change of Control shall be deemed to have
occurred if (a) any person or "group" (as determined for purposes of Securities
and Exchange Commission Regulation 13D-G), except any majority-owned subsidiary
or any Company employee benefit plan or any trust or 

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investment manager thereunder, shall have acquired "beneficial ownership" (as
determined for purposes of Securities and Exchange Commission Regulation 13D-G)
of shares of Company common stock having 40% or more of the voting power of all
outstanding shares of Company capital stock, or (b) a merger or consolidation
occurs to which the Company is a party, whether or not the Company is the
surviving corporation in which outstanding shares of Company common stock are
converted into shares of another company (other than a conversion into shares of
voting common stock of the successor corporation or a holding company thereof)
or other securities or cash or other property (excluding payments made solely
for fractional shares); or (c) the sale of all, or substantially all, of the
Company's assets occurs.

ARTICLE VII MISCELLANEOUS

(1) AMENDMENT AND TERMINATION: The Board of Directors of the Company may amend,
modify, suspend, or terminate the Plan at any time, without the consent of the
participants but, in the event of any such amendment, modification, suspension,
or termination, benefit payments which have already accrued, are payable in the
future, or are being paid, will continue in accordance with the Plan as in
effect prior to such amendment, modification, suspension, or termination.

(2) RIGHTS OF DIRECTORS: Neither the establishment of the Plan nor any action
hereafter taken by the Company or by any Subsidiary or the Committee shall be
construed as giving to any director any vested right to a benefit from the Plan
beyond the terms of the Plan.  Nothing in the Plan shall confer on any director
any right to be retained as a director, and the Company retains the right upon
the removal of a director, or a resignation in lieu of removal as determined by
the Committee, to terminate any benefits accrued for the account of or payable
to such director under the Plan.

(3) MISTAKEN INFORMATION: If any information upon which an Eligible Director's
benefit under the Plan is calculated has been misstated by the Eligible Director
or is otherwise mistaken, such benefit shall not be invalidated (unless upon the
basis of the correct information he would not have been entitled to a benefit),
but the amount of the benefit shall be adjusted to the proper amount determined
on the basis of the correct information and any overpayments shall be charged
against future payments to the Eligible Director or his Surviving Spouse, as the
case may be.

(4) LIABILITY: Neither the Board of Directors of the Company or of any
Subsidiary, nor any member of the Committee, nor any person to whom any of them
may delegate any duty or power in connection with administering the Plan shall
be personally liable for any action or failure to act with respect to the Plan.

(5) NONASSIGNABILITY: Benefits payable under the Plan shall not be subject in
any manner to anticipation, assignment, pledge, alienation, or charge by an
Eligible Director or his Surviving Spouse; nor shall any such benefits be in any
manner liable for or subject to the debts or any other liabilities of the
Eligible Director or his Surviving Spouse; nor shall any interest of any
Eligible Director or his Surviving Spouse under the Plan be subject to
garnishment, attachment, lien, or levy of any kind.

(6) CONSTRUCTION: In determining the meaning of any provision of the Plan, words
imparting the masculine gender shall include the feminine and the singular shall
include the plural, unless the context requires otherwise.  Headings of
paragraphs and Articles in the Plan are for the convenience only and are not
intended to modify or affect the meaning of the substantive provisions of the
Plan.

(7) EFFECTIVE DATE: The Plan shall become effective on January 31, 1982; and was
amended on June 28, 1988; November 28, 1989; July 8, 1992; February 14, 1996;
and April 9, 1997.

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