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                                                                 Exhibit 10 (b)
                              EMPLOYMENT AGREEMENT


               This EMPLOYMENT AGREEMENT (the "Agreement"), made in the City of
     Plano and the State of Texas, dated as of the first day of August, 1999,
     between J. C. Penney Company, Inc., a Delaware corporation (hereinafter
     called the "Employer"), and Vanessa Castagna (hereinafter called the
     "Employee").

     1.     Employment, Position and Duties
            _______________________________

          1.1     The Employer hereby agrees to employ Employee and the Employee
          hereby agrees to undertake employment with the Employer upon the terms
          and conditions herein set forth.

          1.2     During the Term (as hereafter defined), the Employee will
          serve in the position of Executive Vice President and Chief Operating
          Officer of JCPenney Stores, Catalog and Merchandising.  Employee shall
          faithfully and in conformity with the directions of the Board of
          Directors of the Employer (the "Board") or its delegate perform the
          duties of her employment and shall devote to the performance of such
          duties her full time and attention.

     2    Term of Employment.  Employee's term of employment under this
          __________________
          Agreement will commence on August 1, 1999 (the "Start Date") and,
          subject to the provisions of this Agreement, will terminate on the
          earlier of (i) the fifth anniversary of the Start Date or (ii)
          termination of Employee's employment pursuant to Section 7 of this
          Agreement (the "Termination Date").  Notwithstanding the termination
          date provided in the previous sentence, the term of this Agreement may
          be extended by agreement of the parties.

     3     Compensation
           ____________

          3.1     Salary.     In consideration of her services during the Term,
                  ______
          the Employer shall pay the Employee cash compensation at an annual
          rate of $550,000 ("Base Salary").  Employee's Base Salary shall be
          subject to such increases as may be approved by the Personnel and
          Compensation Committee of the Board (the "Committee") or its delegate.

          3.2     Annual Incentive Compensation.     Employee shall be eligible
                  _____________________________
          to participate in the 1989 Management Incentive Compensation Plan (the
          "Comp Plan").  Employee's annual target incentive shall be 48% of Base
          Salary unless changed by the Committee; provided however that
          Employee's annual incentive award for the 1999 and 2000 fiscal year
          will be not less than 48% of Base Salary, which amount for 1999 shall
          be prorated to reflect Employee's actual period of service during 1999
          after the Start Date.  If the Committee authorizes any annual cash
          incentive program or approves any other annual management incentive
          program or arrangement, Employee will be eligible to participate in
          such plan, program, or arrangement on terms commensurate with
          Employee's position and level of responsibility.

          3.3     Long-Term Incentive Compensation.     Employee shall be
                  ________________________________
          eligible to participate in the EVA Performance Plan (the "EVAPP").
          Employee's annual target

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          participation will be at a level of 23.5% of
          Employee's Base Salary plus annual incentive at 48% of Base Salary
          ("Total Earnings"), unless changed by the Committee; provided however,
          that Employee's long term incentive award to be credited to her EVAPP
          Bonus Bank for the 1999 and 2000 fiscal year will be not less than
          23.5% of her Total Earnings, which amount for 1999 shall be prorated
          to reflect Employee's actual period of service during 1999 (Total
          Earnings plus EVAPP target at $1.00 per unit is defined as "Grand
          Total Earnings").  If the Committee authorizes any long-term incentive
          compensation plan, program, or arrangement, Employee will be eligible
          to participate in such plan, program, or arrangement on terms
          commensurate with her position and level of responsibility.

          3.4     Supplemental Cash Payment     Employee shall be entitled to
                  _________________________
          receive a supplemental cash payment of $2,000,000.  This supplemental
          cash payment shall be payable in three installments as specified
          below, provided that Employee remains employed on each date of payment
          subject to Section 7.  The supplemental cash payment shall be payable
          as follows: $800,000 upon the completion of an initial period of
          employment from Start Date to September 3, 1999, $600,000 on the first
          anniversary of the Start Date, and $600,000 on the second anniversary
          of the Start Date.

     4     Expenses.     During the Term the Employee shall be allowed
           _________
     reimbursement of reasonable expenses necessary for the performance of her
     duties in accordance with the policies of the Employer.

     5    Restricted Stock and Stock Options.
          __________________________________

          5.1     The Employer will grant to the Employee on the Start Date
          43,000 shares of the Employer's common stock (the "Restricted Stock").
          The Restricted Stock will be held in escrow and will be subject to
          forfeiture upon the termination of Employee's employment for any
          reason (subject to Section 7); provided however, that on the third,
          fifth, and tenth anniversary of the Start Date 14,333, 14,333, and
          14,334 (respectively) shares of Restricted Stock will no longer be
          subject to forfeiture and will be released from escrow.

          5.2     The Employer will grant to Employee on the Start Date 1,000
          restricted stock units.  The units will vest three years after the
          grant date provided the Employee remains employed by the Employer
          (subject to Section 7) on that date.  Upon vesting, distribution of
          the stock units will be made in shares of J. C. Penney common stock
          with no restrictions on the vested shares.

          5.3     The Employer will grant to Employee, on the Start Date, an
          option to purchase 57,000 shares of Employer's common stock.  The
          option will have a ten-year term and an exercise price equal to the
          fair market value on the Start Date as defined in the 1997 Equity
          Compensation Plan (mean of the high and low sales prices on July 30
          and August 2).  The option will be exercisable on the third
          anniversary of the Start Date, provided the Employee remains employed
          by the Employer (subject to Section 7) on that date.

          5.4     The Employer will grant to the Employee, on the Start Date, an
          option to purchase 150,000 shares of Employer's common stock.  The
          option will have a ten-year term and an exercise price equal to the
          fair market value on the Start Date as defined in the 1997 Equity
          Compensation Plan (mean of the high and low sales prices on July 30
          and August 2).  The option will vest at the rate of 20% per year;
          beginning on the first anniversary of the Start Date, provided the
          Employee remains employed by the Employer (subject to Section 7) on
          each date.  Vesting may be accelerated if the actual results for the
          fiscal year immediately
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          preceding the vesting date exceed Plan (as determined under the Comp
          Plan for all elements of Employee's responsibility) according to the
          following schedule:

          Exceed plan up to 1%                   30% vesting
          Exceed Plan more than 1% up to 2%      40% vesting
          Exceed Plan more than 2%               50% vesting
          Total vesting percentage cannot exceed 100%

          5.5     The grants of shares of Restricted Stock and Options will be
          made pursuant to and subject to the terms, conditions, and
          restrictions in the Employer's 1997 Equity Plan, as amended.  The
          definitive terms of the grants will be set forth in agreements to be
          provided to Employee promptly after the Start Date.

     6     Employee Benefits.
           __________________
          6.1  During the Term, Employer will provide Employee and her eligible
               dependents, subject to the terms and conditions of the applicable
               plans, participation in all Employer sponsored employee benefit
               plans.  For 1999, the Employee is entitled to three weeks of
               vacation.  For the remainder of the Term, the Employee is
               entitled to five weeks of vacation.

          6.2  For the period from the Start Date until the Employee becomes
               eligible for the Employer's Health Care Plan, the Employer will
               reimburse the Employee for the difference between the COBRA
               premium charged by her former employer and the premium amount she
               paid while an active employee of her former employer.

          6.3  Employee shall be eligible to participate in the Employer's
               Mirror Plan III.  She will be given an opportunity to elect to
               defer compensation under that Plan during August, 1999 for
               compensation to be paid September through December, 1999; and
               during December, 1999, for compensation to be paid in 2000.

     7     Termination of Employment
           _________________________

     The termination of the Employee's employment will be governed by the
     following provisions:

          7.1     Death.          In the event of the Employee's death during
                  _____
          the Term, the Employer will pay to the Employee's beneficiaries or
          estate, as appropriate, as soon as practicable after the Executive's
          death, (I)     unpaid Base Salary to the date of death to which the
          Employee is entitled and any unpaid vacation, (the "Compensation
          Payments"), (ii) the target bonus (at $1.00 per unit) for the Comp
          Plan and EVAPP for the fiscal year in which the Employee's death
          occurs, prorated for the actual period of service for that fiscal
          year, (the "Prorated Bonus"), (iii) any unpaid portion of the
          Supplemental Cash Payment and (iv) any other death benefits payable
          under any employee benefit or compensation plan that is maintained by
          the Employer for the Employee's benefit.  Any unvested Stock Options
          will vest upon her death and her beneficiary will have the earlier of
          five years or the original expiration date of the Option to exercise
          all outstanding Options.  All restrictions on Restricted Stock will be
          removed upon her death.  Unless otherwise stated in this Agreement,
          this Section 7.1

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          will not limit the entitlement of the Employee's
          estate or beneficiaries to any death or other benefits then available
          to the Employee under any life insurance, stock ownership, stock
          options, or other benefit plan or policy that is maintained by the
          Employer for the Employee's benefit.

          7.2     Permanent Disability     If the Employee becomes totally and
                  ____________________
          permanently disabled (as defined in the Employer's Long-Term
          Disability Plan) during the Term, the Employer or Employee may
          terminate the Employee's employment on written notice thereof in
          accordance with Section 12.5, and the Employer will provide to the
          Employee as soon as practicable:  (i) amounts payable pursuant to the
          terms of any applicable disability plan or program, (ii) the Prorated
          Bonus, (iii) the Compensation Payments, (iv) any unpaid portion of the
          Supplemental Cash Payment, and (v) such payments under applicable
          plans and programs, to which the Employee is entitled pursuant to the
          terms of such plans or programs.  Any unvested Stock Options will vest
          upon her disability and she will have the earlier of five years or the
          original expiration date of the Option to exercise all outstanding
          Options.  All restrictions on Restricted Stock will be removed upon
          her disability.

          7.3     Voluntary Termination by Employee; Discharge for Cause
                  _______________________________________________________
          (i) In the event that during the Term the Employee's employment is
          terminated:

          *    by the Employer for Cause (as defined below) or
          *    by the Employee unless for Good Reason (as defined in Section
               7.4) or unless as a result of the Employee's death or disability,

          The Company will pay the Compensation Payments as soon as practicable
          to the Employee and the Employee will be entitled to no other
          compensation, except as otherwise due her under applicable law or the
          terms of any applicable plan or program.  Employee will not be
          entitled to the payment of any bonus in respect of all or any portion
          of the fiscal year in which such termination occurs.

          (ii) For purposes of this Agreement, the Employer will have "Cause" to
          terminate the Employee's employment upon a finding that (a) the
          Employee has been convicted by a court of competent jurisdiction of
          the commission of a felony, (b) the Employee has committed a serious
          breach of the Employer's Statement of Business Ethics, or (c) the
          Employee materially breached any of the express covenants set forth in
          Section 10.1 or 10.3.

          7.4  Involuntary Termination
               _______________________

               (i)  In any case of involuntary termination under this section,
                    Employee will be entitled to payment as described in Section
                    7.5.
               (ii) During the Term, the Employee's employment may be terminated
                    by the Employer for any reason other than for Cause by
                    delivery in accordance with Section 12.5 to the Employee of
                    a notice of termination.  The Employee will be treated for
                    the purposes of this Agreement as having been involuntarily
                    terminated other than for Cause if, during the Term the
                    Employee terminates her employment with the Employer prior
                    to termination for Cause for any of the following reasons
                    (each, a "Good

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                    Reason"): without the Employee's written
                    consent, (a) the Employer has breached any material
                    provision of this Agreement and within 30 days after notice
                    thereof from the Employee, the Employer fails to cure such
                    breach; or (b) a successor or assign (whether direct or
                    indirect, by purchase, merger, consolidation or otherwise)
                    to all or substantially all of the business and/or assets of
                    the Employer fails to assume liability under the Agreement.

          7.5  Termination Payments and Benefits
               _________________________________

               (i)  Form and Amount.  Upon the Employee's involuntary
                    _______________
                    termination other than for Cause; (a) the Employer will pay
                    or provide as soon as practicable to the Employee (1) the
                    Prorated Bonus, (2) the Compensation Payments, (3) such
                    payments under applicable plans or programs to which the
                    Employee is entitled pursuant to the terms of such plans and
                    programs, (4) a payment equal to two times Grand Total
                    Earnings, (5) for 24 months (the "Continuation Period") the
                    continuation of employee welfare benefits set forth in
                    Section 6 except as offset by benefits paid or provided by
                    other sources as set forth in Section 8, or as prohibited by
                    law, and (6) outplacement services by a firm selected by the
                    Employee at the expense of the Employer, in an amount up to
                    $30,000, and (b) notwithstanding any provision to the
                    contrary in the applicable award agreement or in any plan,
                    (i) all restrictions pertaining to the shares of Restricted
                    Stock will lapse, (ii) all Options granted shall become
                    vested and fully exercisable, and (iii) any portion of the
                    Supplemental Cash Payment not yet paid will be paid.  For
                    purposes of determining the period of continuation coverage
                    to which the Employee or any of her dependents is entitled
                    under section 4980B of the Internal Revenue Code of 1986, as
                    amended, (or any successor provision thereto), under any
                    group health plan maintained by the Employer or its
                    affiliates, the Employee will be deemed to have remained
                    employed until the end of the Continuation Period.

               (ii) Time and Manner of Payment.  The cash amounts due to the
                    __________________________
                    Employee pursuant to Section 7.5(i)(a) will be paid by the
                    Employer within 20 business days after the Employee's
                    Termination Date by check payable to the order of the
                    Employee or by wire transfer to an account specified by the
                    Employee; provided however, that any earned bonus included
                    in the Compensation Payment and any payment due under
                    Section 7.5(i)(a)(3) will be paid in accordance with the
                    terms of the applicable plan or program.

               (iii)     Maintenance of Benefits.  During the Continuation
                         ________________________
                         Period, the Employer will use its best efforts to
                         maintain in full force and effect for the continued
                         benefit of the Employee all benefits referenced in
                         Section 7.5(i)(a)(3) or will arrange to make available
                         to the Employee benefits substantially similar to those
                         that the Employee would otherwise have been entitled to
                         receive if her employment had not been terminated.
                         Such benefits will be provided on the same terms and
                         conditions

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                         (including employee contributions toward the
                         premium payments) under which the Employee was entitled
                         to participate immediately prior to her termination.

               (iv) Forfeiture.  Notwithstanding the foregoing provisions of
                    __________
                    Section 7.5, any right of the Employee to receive
                    termination payments and benefits under Section 7.5 will be
                    forfeited to the extent of any amounts payable or benefits
                    to be provided after a material breach of the covenants set
                    forth in Section 10.1, 10.2, or 10.3.

               7.6  Nonduplication of Benefits.  To the extent, and only to the
                    _____________________________
                    extent, a payment or benefit that is paid or provided under
                    this Section 7 would also be paid or provided under the
                    terms of any applicable plan, program, or arrangement,
                    including, without limitation, any severance program, such
                    applicable plan, program, agreement or arrangement will be
                    deemed to have been satisfied by the payment made or benefit
                    provided under this Agreement.

     8    Mitigation and Offset.  The Employee is under no obligation to
          ______________________
          mitigate damages or the amount of any payment or benefit provided for
          hereunder by seeking other employment or otherwise; no amounts earned
          by the Employee after her termination date, whether from self-
          employment, as common law employee, or otherwise, will reduce the
          amount of any payment or benefit under any provision of this
          Agreement; provided however, the Employee's coverage under the
          Employer's welfare benefits as provided in Section 7.5(i)(a)(3) will
          terminate as soon as the Employee becomes covered under any comparable
          employee benefit plan made available by another employer and covering
          the same type of benefits.  The Employee will report to the Employer
          any such benefits actually earned or received by her.

     9    Change-In Control Provisions.
          _____________________________

               9.1  The Employee will be offered any and all change in control
                    protections found in any plan, program or agreement
                    maintained by the Employer as of the Start Date or as
                    adopted at a subsequent date during the Term.

               9.2  If the Employee becomes entitled to payments under Section
                    7.5 because of a change in control of the Employer and it is
                    determined that those payments would be subject to the
                    excise tax imposed by Section 4999 of the Internal Revenue
                    Code, then the Employee shall be entitled to receive an
                    additional payment (a "Gross-Up Payment") in an amount such
                    that, after payment of all taxes (including any interest or
                    penalties imposed with respect to such taxes), including any
                    excise tax imposed on the Gross-Up Payment, the Employee
                    retains an amount of the Gross-Up Payment equal to the
                    excise tax imposed on the payments.

               9.3  The agreements evidencing the grants of the shares of
                    Restricted Stock and the Options will provide that upon the
                    occurrence of a Change in Control (as defined in the
                    agreements), all restrictions pertaining to the shares of
                    Restricted Stock will lapse and all of the Options will
                    become fully vested and exercisable.

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          10   Covenants
               _________

               10.1 Confidentiality.  During the Term, the Employer agrees that
                    _______________
                    it will disclose to Employee its confidential or proprietary
                    information to the extent necessary for Employee to carry
                    out her obligations under this Agreement.  The Employee
                    hereby covenants and agrees that she will not, without the
                    prior written consent of the Employer, during the Term or
                    thereafter disclose to any person not employed by the
                    Employer, or use in connection with engaging in competition
                    with the Employer, any confidential or proprietary
                    information of the Employer.

               10.2 Nonsolicitation.  The Employee hereby covenants and agrees
                    ________________
                    that during the Term and for two years thereafter, she will
                    not, without the prior written consent of the Employer, on
                    her own behalf or on the behalf of any person, firm or
                    company, directly or indirectly, attempt to influence,
                    persuade or induce, or assist any other person in so
                    persuading or inducing, any employee of Employer or its
                    affiliates to give up, or to not commence, employment or a
                    business relationship with the Employer.

               10.3 Noncompetition.  It is recognized by the Employee and
                    _______________
                    Employer that the Employee's duties hereunder will entail
                    the receipt of trade secrets and confidential information,
                    which include not only information concerning the Employer's
                    current operations, procedures, suppliers, and other
                    contacts, but also its short-range and long-range plans, and
                    that such trade secrets and confidential information has
                    been developed by the Employer and its affiliates at
                    substantial cost and constitute valuable and unique property
                    of the Employer.  Accordingly, the Employee acknowledges
                    that the foregoing makes it reasonably necessary for the
                    protection of the Employer's business interests that the
                    Employee not compete with the Employer or any of its
                    affiliates during the Term and for a reasonable and limited
                    period thereafter.  Therefor, during the Term and for a
                    period of one year thereafter, the Employee shall not
                    acquire an additional direct investment of $100,000 or more
                    in a Competing Business (as hereinafter defined) and shall
                    not render personal services to any such Competing Business
                    in any manner, including, without limitation, as owner,
                    partner, director, trustee, officer, employee, consultant,
                    or advisor thereof.

                    If the Employee shall breach the covenants contained in this
                    Section 10, the Employer shall have no further obligation to
                    make any payment to the Employee pursuant to this Agreement
                    and may recover from the Employee all such damages as it may
                    be entitled to at law or in equity.  In addition, the
                    Employee acknowledges that any such breach is likely to
                    result in immediate and irreparable harm to the Employer for
                    which money damages are likely to be inadequate.
                    Accordingly, the Employee consents to injunctive and other
                    appropriate equitable relief upon the institution of
                    proceedings therefor by the Employer in order to protect
                    Employer's rights hereunder.

                    As used in this Agreement, the term "Competing Business"
                    shall mean any business which:

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                    (a)  at the time of the determination, is substantially
                         similar to the whole or a substantial part of the
                         business conducted by the Employer or any of its
                         divisions or affiliates;
                    (b)  at the time of determination, is operating a store or
                         stores which, during its or their fiscal year preceding
                         the determination, had aggregate net sales, including
                         sales in leased and licensed departments, in excess of
                         $250,000,000, if such store or any of such stores is or
                         are located in a city or within a radius of 25 miles
                         from the outer limits of a city where the Employer, or
                         any of its division's or affiliates, is operating a
                         store or stores which, during its or their fiscal year
                         preceding the determination, had aggregate net sales,
                         including sales in leased and licensed departments, in
                         excess of $250,000,000; and
                    (c)  had aggregate net sales at all its locations, including
                         sales in leased and licensed departments and sales by
                         its divisions and affiliates, during its fiscal year
                         preceding that in which the Employee made such an
                         investment therein, or first rendered personal services
                         thereto, in excess of $500,000,000.

          11   Survival.  The expiration or termination of the Term will not
               _________
               impair the rights or obligations of any party hereto that accrue
               hereunder prior to such expiration or termination, except to the
               extent specifically stated herein.  In addition to the foregoing,
               the Employee's covenants contained in Section 10 and 12.1 and the
               Employer's obligations under Section 7 and 12.1 will survive the
               expiration or termination of Employee's employment.

          12   Miscellaneous Provisions.
               _________________________

               12.1 Dispute Resolution.  Any dispute between the parties under
                    __________________
                    this Agreement will be resolved (except as provided below)
                    through informal arbitration by an arbitrator selected under
                    the rules of the American Arbitration Association (located
                    in the city in which the Employer's principal executive
                    offices are based) and the arbitration will be conducted in
                    that location under the rules of said Association.  Each
                    party will be entitled to present evidence and argument to
                    the arbitrator.  The arbitrator will have the right only to
                    interpret and apply the provisions of this Agreement and may
                    not change any of its provisions.  The arbitrator will
                    permit reasonable pre-hearing discovery of facts, to the
                    extent necessary to establish a claim or a defense to a
                    claim, subject to supervision by the arbitrator.  The
                    determination of the arbitrator will be conclusive and
                    binding upon the parties and judgment upon the same may be
                    entered in any court having jurisdiction thereof.  The
                    arbitrator will give written notice to the parties stating
                    his or their determination, and will furnish to each party a
                    signed copy of such determination.  The expenses of
                    arbitration will be borne equally by the Employer and
                    Employee or as the arbitrator otherwise equitably
                    determines.  Notwithstanding the foregoing, the Employer
                    will not be required to seek or participate in arbitration
                    regarding any breach of the Employee's covenants in Section
                    10, but may pursue its remedies for such breach in a court
                    of competent jurisdiction in the city in which the
                    Employer's principal executive offices are based.  Any
                    arbitration or action pursuant to this Section 12.1 will be

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                    governed by and construed in accordance with the substantive
                    laws of the State of Texas, without giving effect to the
                    principles of conflict of laws of such State.

               12.2 Binding on Successors; Assignment.  This Agreement will be
                    _________________________________
                    binding upon and inure to the benefit of the Employer,
                    Employee and each of their respective successors, assigns,
                    personal and legal representatives, executors,
                    administrators, heirs, distributees, devisees, and legatees,
                    as applicable; provided however, that neither this Agreement
                    nor any rights or obligations hereunder will be assignable
                    or otherwise subject to hypothecation by Employee (except by
                    will or by operation of the laws of intestate succession) or
                    by the Employer, except that the Employer may assign this
                    Agreement to any successor (whether by merger, purchase or
                    otherwise) to all or substantially all of the stock, assets
                    or businesses of the Employer, if such successor expressly
                    agrees to assume the obligations of the Employer hereunder.

               12.3 Governing Law.  This Agreement will be governed, construed,
                    _____________
                    interpreted, and enforced in accordance with the substantive
                    law of the State of Texas, without regard to conflicts of
                    laws principles.

               12.4 Severability.  Any provision of this Agreement that is
                    ____________
                    deemed invalid, illegal or unenforceable in any jurisdiction
                    will, as to that jurisdiction, be ineffective, to the extent
                    of such invalidity, illegality or unenforceability, without
                    effecting in any way the remaining provisions hereof in such
                    jurisdiction or rendering that or any other provisions of
                    this Agreement invalid, illegal or unenforceable in any
                    other jurisdiction.  If any covenant should be deemed
                    invalid, illegal or unenforceable because its scope is
                    considered excessive, such covenant will be modified so that
                    the scope of the covenant is reduced only to the minimum
                    extent necessary to render the modified covenant valid,
                    legal and enforceable.

               12.5 Notices.  For all purposes of this Agreement, all
                    _______
                    communications required or permitted to be given hereunder
                    will be in writing and will be deemed to have been duly
                    given when hand delivered or dispatched by electronic
                    facsimile transmission (with receipt thereof confirmed), or
                    five business days after having been mailed by United States
                    registered or certified mail, return receipt requested,
                    postage prepaid, or three business days after having been
                    sent by a nationally recognized overnight courier service,
                    addressed to the Employer at its principal executive office
                    and to the Employee at her principal residence, or to such
                    other address as any party may have furnished to the other
                    in writing and in accordance herewith, except that notices
                    of change of address will be effective only upon receipt.

               12.6 Entire Agreement.  The terms of this Agreement are intended
                    ________________
                    by the parties to be the final expression of their Agreement
                    with respect to the Employee's employment and may not be
                    contradicted by evidence of any prior or contemporaneous
                    agreement.  The parties further intend that this Agreement
                    will constitute the complete and exclusive statement of its
                    terms and that no extrinsic evidence whatsoever may be
                    introduced in any judicial, administrative, or other legal
                    proceedings to vary the terms of this Agreement.

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               12.7 Amendments; Waivers.  This Agreement may not be modified,
                    ____________________
                    amended, or terminated except by an instrument in writing,
                    approved by the Employer and signed by the Employee and the
                    Employer.  Failure on the part of either party to complain
                    of any action or omission, breach or default on the part of
                    the other party, no matter how long the same may continue,
                    will never be deemed to be a waiver of any rights or
                    remedies hereunder, at law or in equity.  The Employee or
                    Employer may waive compliance by the other party with any
                    provision of this Agreement that such other party was or is
                    obligated to comply with or perform only through an executed
                    writing; provided however, that such waiver will not operate
                    as a waiver of, or estoppel with respect to, any other or
                    subsequent failure.


          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
          date and year first above written.



          /s/ James E. Oesterreicher
          ___________________________________
          J. C. Penney Co., Inc.
          By James E. Oesterreicher
          Its Chairman and Chief Executive Officer








          /s/ Vanessa Castagna
          ________________________________
          Vanessa Castagna