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                                                                    Exhibit 10.2
                                                                    ------------

                             FILENE'S BASEMENT CORP.
                           1990 EQUITY INCENTIVE PLAN

                           AS AMENDED OCTOBER 3, 1996


1. PURPOSE
----------

     The purpose of this Equity Incentive Plan (the "Plan") is to advance the
interests of Filene's Basement Corp. (the "Company") by enhancing its ability to
(a) attract and retain employees who are in a position to make significant
contributions to the success of the Company and its subsidiaries, if any; (b)
reward employees for such contributions; and (c) encourage employees to take
into account the long-term interests of the Company through ownership of shares
of the Company's common stock ("Stock").

     The Plan is intended to accomplish these goals by enabling the Company to
grant Awards to eligible employees. Awards may be in the form of Options (as
described in section 6.1), which may include Stock Appreciation Rights (as
described in Section 6.2), Restricted Stock or Unrestricted Stock Awards (as
described in Section 6.3), Deferred Stock Awards (as described in Section 6.4),
Performance Awards (as described in Section 6.5), or loans or supplemental
grants (as described in Section 6.6), or combinations thereof.


2. ADMINISTRATION
-----------------

     The Plan will be administered by the Board of Directors of the Company (the
"Board") or a committee (the "Committee") appointed by the Board. The Committee
shall consist of at least two directors of the Board. A majority of the members
of the Committee shall constitute a quorum, and all determinations of the
Committee shall be made by a majority of its members. Following registration of
the Stock under the Securities Exchange Act of 1934, the Committee shall consist
of the minimum number of directors required under rule 16b-3 under the Act, all
of whom shall be "disinterested persons" within the meaning of that Rule.
References herein to "Committee" shall include the Board where the Board is
administering the Plan.

     The Committee will have authority, not inconsistent with the express
provisions of the Plan and in addition to other authority granted under the
Plan, to (a) grant Awards at such time or times as it may choose; (b) determine
the size of each Award, including the number of shares of Stock subject to the
Award; (c) determine the type or types of Awards; (d) determine the terms and
conditions of each Award; (e) waive compliance by a Participant with any
obligation to be performed by him or her under an Award and waive any term or
condition of an Award; (f) with the consent of the Participant, cancel an
existing Award in whole or in part; (g) grant the

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Participant another Award to replace an Award or portion thereof that has been
canceled; (h) prescribe the form or forms of instruments that are required under
the Plan, including any written notices and elections required of Participants,
or are deemed appropriate by the Committee, and change such forms from time to
time; (i) adopt, amend and rescind rules and regulations for the administration
of the Plan; and (j) interpret the Plan and decide any questions and settle all
controversies and disputes that may arise in connection with the Plan. Such
determinations and actions of the Committee, and all other determinations and
actions of the Committee made or taken under authority granted by any provision
of the Plan, will be conclusive and will being all parties.


3. EFFECTIVE DATE AND TERM OF PLAN
----------------------------------

     The Plan will become effective on the date on which it is approved by the
stockholders of the Company. Grants of Awards under the Plan may be made prior
to that date (but after Board adoption of the Plan), subject to stockholder
approval of the Plan.

     No Award may be granted under the Plan after the tenth anniversary of the
date on which the Plan was adopted by the Board, but Awards previously granted
may extend beyond that date.


4. SHARES SUBJECT TO THE PLAN
-----------------------------

     Subject to adjustment as provided in Section 8.6 below, the aggregate
number of shares of Stock that may be delivered under the Plan will be 400,000.
If any Award requiring exercise by the Participant for delivery of Stock
terminates without having been exercised in full, or if any Award payable in
Stock or cash is satisfied in cash rather than Stock, the number of shares of
Stock as to which such Award was not exercised or for which cash was substituted
will be available for future grants.

     Stock delivered under the Plan may be either authorized but unissued Stock
or previously issued Stock acquired by the Company and held in treasury. No
fractional shares of Stock shall be delivered under the Plan.


5. ELIGIBILITY AND PARTICIPATION
--------------------------------

     Those eligible to receive Awards under the Plan will be persons in the
employ of the Company or any of its subsidiaries ("Employees") who, in the
opinion of the Committee, are in a position to make a significant contribution
to the success of the Company or its subsidiaries. For purposes of this Plan, a
"subsidiary" will be a corporation in which the Company owns,

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directly or indirectly, stock possessing 50% or more of the total combined
voting power of all classes of stock. The Committee will from time to time
select the eligible Employees who are to be granted Awards ("Participants").

6. TYPES OF AWARDS

     6.1 Options
         -------

     (a) NATURE OF OPTIONS. An option is an Award entitling the recipient on
exercise thereof to purchase Stock at a specified exercise price. Stock acquired
pursuant to exercise of an Option granted hereunder shall be subject to such
restrictions on transferability and such rights of repurchase by the Company, if
any, as the Committee shall determine.

     Both "incentive stock options", as defined in section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"), and Options that are not
incentive stock options, may be granted under the Plan. Any Option intended to
qualify as an incentive stock option will be referred to in the Plan as an
"ISO". Instruments evidencing ISO's must contain such provisions as are required
under applicable provisions of the Code. Once an ISO has been granted, no action
by the Committee that would cause the Option to lose its status under the Code
as an incentive stock option will be effective without the consent of the Option
holder.

     (b) EXERCISE PRICE. The exercise price of an Option will be determined by
the Committee subject to the following:

     (1) The exercise price of an Option which is not an ISO may be any amount
which is not less than 50% of the fair market value (as defined in Section 8.8)
per share of the Stock at the time the Option is granted.

     (2) The exercise price of an ISO may not be less that 100% (110% in the
case of an ISO granted to a ten-percent shareholder) of the fair market value
per share of the stock at the time the Option is granted. A "ten-percent
shareholder" is any person who at the time of grant owns directly or indirectly,
or is deemed to own by reason of the attribution rules of section 424(d) of the
Code, stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of any of its subsidiaries.

     (3) In no case may the exercise price paid for Stock which is part of an
original issue of authorized Stock be less than the par value per share of the
Stock.

     (4) The Committee may reduce the exercise price of an Option at any time
after the time of grant, but the Option will be treated as a new Option granted
on the date of the reduction.


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     (c) DURATION OF OPTIONS. The latest date on which an Option may be
exercised will be the tenth anniversary (fifth anniversary, in the case of an
ISO granted to a ten-percent shareholder) of the date the Option was granted, or
such earlier date as may have been specified by the Committee at the time the
Option was granted.

     (d) EXERCISE OF OPTIONS. An Option will become exercisable at such time or
times, and on such conditions, as the Committee may specify. The Committee may
at any time accelerate the time at which all or any part of the Option may be
exercised.

     Any exercise of an Option must be in writing, signed by the proper person
and delivered or mailed to the Company, accompanied by (1) any documents
required by the Committee and (2) payment in full in accordance with paragraph
(e) below for the number of shares which the Option is exercised.

     (e) PAYMENT FOR STOCK. Stock purchased on exercise of an Option must be
paid for as follows: (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (2) if so permitted by the
instrument evidencing the Option (or, in the case of an Option which is not an
ISO, by the Committee at or after grant of the Option), (i) through the delivery
of shares of Stock which have been outstanding for at least six months (unless
the Committee expressly approves a shorter period) and which have a fair market
value on the last business day preceding the date of exercise equal to the
exercise price, or (ii) by delivery of a promissory note of the Option holder to
the Company, payable on such terms as are specified by the Committee (provided
that, if the Stock delivered upon exercise of the Option is an original issue of
authorized stock, at least so much of the exercise price as represents the par
value of such Stock must be paid in cash), or (iii) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (iv) by any combination
of the permissible forms of payment.

     (f) DISCRETIONARY PAYMENTS. If the market price of shares of Stock subject
to an Option (other than an Option which is in tandem with a Stock Appreciation
Right as described in Section 6.2 below) exceeds the exercise price of the
Option at the time of its exercise, the Committee may cancel the Option and
cause the Company to pay in cash to the person exercising the Option an amount
equal to the difference between the fair market value of the Stock which would
have been purchased pursuant to the exercise (determined on the date the Option
is canceled) and the aggregate exercise price which would have been paid. The
Committee may exercise its discretion to take such action only if it has
received a written request from the person exercising the Option, but such a
request will not be binding on the Committee.

     (g) SPECIAL RULE FOR ISO'S. Consistent with section 422 of the Code and any
associated regulations, notices or other official pronouncements of general
applicability, to the extent the


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aggregate fair market value (determined as of the time the Option is granted) of
the shares of Stock with respect to which ISO's are exercisable for the first
time by the Optionee during any calendar year (under all plans of the Company
and its subsidiaries) exceeds $100,000, such Options shall not be treated as
ISO's. Nothing in this special rule shall be construed as limiting the
exercisability of any Option unless the Board provides for such a limitation at
the time of grant.

     6.2 Stock Appreciation Rights.
         -------------------------

     (a) NATURE OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right
entitles the Participant to receive, with respect to each share of Stock as to
which the Right is exercised, the excess of (1) the share's fair market value on
the date of exercise, increased if the Committee so provides by the value of
dividends on the Stock, over (2) its fair market value on the date the right was
granted.

     (b) GRANT OF STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be
granted in tandem with, or independently of, Options granted under the Plan. A
Stock Appreciation Right granted in tandem with an Option which is not an ISO
may be granted either at or after the time the Option is granted. A Stock
Appreciation Right granted in tandem with an ISO may be granted only at the time
the Option is granted.

     (c) RULES APPLICABLE TO TANDEM AWARDS. When Stock Appreciation Rights are
granted in tandem with Options, the following rules will apply:

     (1) The Stock Appreciation Right will be exercisable only at such time or
times as, and to the extent that, the related Option is exercisable and will be
exercisable in accordance with the procedure required for exercise of the
related Option.

     (2) The Stock Appreciation Right will terminate and no longer be
exercisable upon the termination or exercise of the related Option, except that
a Stock Appreciation Right granted with respect to less than the full number of
shares covered by an Option will not be reduced until the number of shares as to
which the related Option has been exercised or has terminated exceeds the number
of shares not covered by the Stock Appreciation Right.

     (3) The Option will terminate and no longer be exercisable upon the
exercise of the related Stock Appreciation Right.

     (4) The Stock Appreciation Right will be transferable only with the related
Option.

     (5) A Stock Appreciation Right granted in tandem with an ISO may be
exercised only when the market price of the Stock subject to the Option exceeds
the exercise price of such

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Option.

     (d) EXERCISE OF INDEPENDENT STOCK APPRECIATION RIGHTS. A Stock Appreciation
Right not granted in tandem with an Option will become exercisable at such time
or times, and on such conditions, as the Committee may specify. The Committee
may at any time accelerate the time at which all or any part of the Right may be
exercised.

     Any exercise of an independent Stock Appreciation Right must be in writing,
signed by the proper person and delivered or mailed to the Company, accompanied
by any other documents required by the Committee.

     6.3 Restricted and Unrestricted Stock.
         ---------------------------------

     (a) NATURE OF RESTRICTED STOCK AWARD. A Restricted Stock Award entitles the
recipient to acquire shares of Stock subject to the restrictions described in
paragraph (d) below ("Restricted Stock") for a price which may be either (i) any
amount which is not less than 50% of the fair market value of the Stock at the
time of purchase or (ii) the par value per share of the Stock.

     (b) ACCEPTANCE OF AWARD. A Participant who is granted Restricted Stock
Award will have no rights with respect to such Award unless, within 60 days (or
such shorter period as the Committee may specify) following the date of the
Award, the Participant accepts the Award by written instrument delivered or
mailed to the Company accompanied by payment in full of the specified purchase
price, if any, of the shares covered by the Award. Payment may be by certified
or bank check or other instruments acceptable to the Committee.

     (c) RIGHTS AS A STOCKHOLDER. A Participant who receives Restricted Stock
will have all the rights of a stockholder with respect to the Stock, including
voting and dividend rights, subject to the restrictions described in paragraph
(d) below and any other conditions imposed by the Committee at the time of
grant. Unless the Committee otherwise determines, certificates evidencing shares
of Restricted Stock will remain in the possession of the Company until such
shares are free of all restrictions under the Plan.

     (d) RESTRICTIONS. Except as otherwise specifically provided by the Plan,
until these restrictions lapse, Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of and, if the
Participant ceases to be an Employee, must be resold to the Company for the
amount of cash paid for the Stock, or forfeited to the Company if no cash was
paid. The restrictions will lapse at such time or times, and on such conditions,
as the Committee may specify. The Committee may at any time accelerate the time
at which the restrictions on all or any part of the shares will lapse.

     (e) OTHER AWARDS SETTLES WITH RESTRICTED STOCK. The Committee may, at the
time any


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award described in this Section 6 is granted, provide that any or all of the
Stock delivered pursuant to the Award will be Restricted Stock.

     (f) UNRESTRICTED STOCK. The Committee may, in its sole discretion, sell to
any Participant shares of stock free of restrictions under the Plan for a price
which may be either (i) any amount which is not less-than 50% of the fair market
value of the Stock at the time of purchase or (ii) the par value per share of
the Stock.

     6.4 Deferred Stock.
         --------------

     (a) NATURE OF DEFERRED STOCK AWARD. A Deferred Stock Award entitles the
recipient to receive shares of Deferred Stock, which is Stock to be delivered in
the future. Delivery of all or any part of the Stock will take place at such
time or times, and on such conditions, as the Committee may specify.

     (b) OTHER AWARDS SETTLED WITH DEFERRED STOCK. The Committee may, at the
time any Award described in this Section 6 is granted, provide that, at the time
Stock would otherwise be delivered pursuant to the Award, the Participant will
instead receive an instrument evidencing the right to future delivery of
Deferred Stock. Delivery of all or any of the Stick will take place at such time
or times, and on such conditions, as the Committee may specify.

     6.5 Performance Awards: Performance Goals.
         -------------------------------------

     (a) NATURE OF PERFORMANCE AWARDS. A Performance Award entitles the
recipient to receive, without payment, an amount , in cash or stock or a
combination thereof (such form to be determined by the Committee), following the
attainment of Performance Goals. Performance Goals may be related to personal
performance, corporate performance, departmental performance or any other
category of performance deemed by the Committee to be important to the success
of the Company. The Committee will determine the Performance Goals, the period
or periods during which performance is to be measured and all other terms and
conditions applicable to the Award.

     (b) OTHER AWARDS SUBJECT TO PERFORMANCE CONDITIONS. The Committee may, at
the time any Award described in this Section 6 is granted, impose the condition
(in addition to any conditions specified or authorized in this Section 6 or any
other provision of the Plan) that Performance Goals be met prior to the
Participant's realization of any payment or benefit under the Award.

     6.6 Loans and Supplemental Grants.
         ------------------------------
 
     The Company may make a loan to a Participant, either on or after the grant
to him or her

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of any Award. Such a loan may be made in connection with either the purchase of
Stock under the Award or the payment of any federal income tax in respect of
income recognized as a result of the Award. The Committee will have full
authority to decide whether to make such a loan and to determine the amount,
terms and conditions of the loan, including the interest rate (which may be
zero), whether the loan is to be secured or unsecured or with or without
recourse against the borrower, the terms on which the loan is to be repaid and
the conditions, if any, under which it may be forgiven. However, no loan may
have a term (including extensions) exceeding ten years in duration.

     In conjunction with this Award, the Committee may at the time such Award is
made or at a later date provide for and make a cash payment to the Participant
not to exceed an amount equal to (a) the amount of any federal, state and local
income tax on ordinary income for which the Participant will be liable with
respect to the Award, plus (b) an additional amount on a grossed-up basis
necessary to make him or her whole after tax, discharging all the Participant's
income tax liabilities arising from all payments under this Section 6. Any cash
payments under this Section 6 will be made at the time the Participant incurs
federal income tax liability with respect to the Award.


7. EVENTS AFFECTING OUTSTANDING AWARDS
   -----------------------------------

     7.1 Retirement, Death and Disability.
         ---------------------------------

     If a Participant ceases to be an Employee after attainment of age 65 (or
retires at such earlier age as may be approved by the Committee, in general or
on an individual basis), or ceases to be an Employee by reason of death or total
and permanent disability (as determined by the Committee, in its sole
discretion) ( the date on which the Participant ceases to be an Employee being
hereinafter referred to as the "Termination Date"), the following rules will
apply:

     (a) Subject to paragraph (c) below, each Option and Stock Appreciation
Right held by the Participant on his or her Termination Date will immediately be
exercisable in full and will continue to be exercisable until the earlier of (1)
the third anniversary of the Termination Date, and (2) the date on which the
Award would be terminated had the Participant remained an Employee. If the
Participant has died, his or her Award may be exercised within such limits by
his or her executor or administrator, or by the person or persons to whom the
Award is transferred by will or the applicable laws of descent and distribution
(the Participant's "legal representative").

     (b) Subject to paragraph (c) below, each share of Restricted Stock held by
the Participant on his or her Termination Date will immediately become free of
the restrictions.


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     (c) If at the Participant's Termination Date exercise of an Option or Stock
Appreciation Right or lapse of restrictions on Restricted Stock was subject to
performance or other conditions (other than conditions relating to the mere
passage of time and continued employment) which had not been satisfied at such
time, the Committee may remove or modify such conditions or provide that the
Participant will receive the benefit of the Award if or when the conditions are
subsequently satisfied. If the Committee does not take such action, however,
such Award will terminate as to the Participant's Termination Date.

     (d) Any payment or benefits under a Deferred Stock Award, Performance
Award, or supplemental grant to which the Participant has not become irrevocably
entitled will be forfeited and the Award canceled as of the Participant's
Termination date (but any loan will continue to be payable according to its
terms), unless otherwise provided in the instrument evidencing the Award or
otherwise agreed to by the Committee.

     If a Participant dies after his or her Termination Date but while an Award
held by him or her is still exercisable, his or her legal representative will be
entitled to exercise such Award until the earlier of (1) the third anniversary
of his or her death and (2) the date on which the Award would have terminated
had the Participant remained an Employee.

     7.2 Other Termination of Employment.
         -------------------------------

     If a Participant ceases to be an Employee for any reason other than those
specified in Section 7.1 above, the following rules will apply:

     (a) All Options and Stock Appreciation Rights held by the Participant that
were not exercisable on the date his or her employment ended will terminate. Any
Awards that were so exercisable will continue to be exercisable until the
earlier of (1) the date which is three months after the date his or her
employment ended and (2) the date on which the Award would have terminated had
the participant remained an Employee.

     (b) All Restricted Stock held by the Participant must be transferred to the
Company in accordance with Section 6.3 above.

     (c) Any payment or benefit under a Deferred Stock Award, Performance Award,
or supplemental grant to which the Participant has not become irrevocably
entitled will be forfeited and the Award canceled, and any loan will become due
and payable, unless otherwise provided in the instrument evidencing the Award or
otherwise agreed to by the Committee.

     For purposes of this Section 7.2, an Employee's employment will not be
considered to have ended (1) in the case of sick leave or other leave of absence
approved for purposes of the Plan by the Committee, so long as his or her right
to reemployment is guaranteed either by statute

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or by contract or under the policy pursuant to which the leave of absence was
granted or if the Committee otherwise so provides in writing, or (2) in the case
of a transfer of employment between affiliated companies, or to the employment
of a corporation (or a parent or subsidiary corporation of such corporation)
issuing or assuming an Award in a transaction to which section 424(a) of the
Code applies.

     7.3 Change in Control
         -----------------

     Not withstanding any other provision of the Plan or of any Award, in the
event of a Change in Control as defined in Exhibit A the following will apply:

     (a) Each outstanding Option and Stock Appreciation Right held by an
individual who has held such Option (or any other option under this Plan or any
other stock option plan of the Company) of Stock Appreciation Right for at least
one year will immediately become exercisable in full.

     (b) Each outstanding share of Restricted Stock held by an individual who
has held such shares (or any other award of Restricted Stock hereunder) for at
least one year will immediately become free of all restrictions and conditions.

     (c) Conditions on Deferred Stock Awards, Performance Awards, and
supplemental grants which relate to the mere passage of time and continued
employment will be removed if the holder of such Award or grant has held them
(or any comparable Award or grant) for at least one year. Performance or other
conditions (other than conditions relating to the mere passage of time and
continued employment) will continue to apply unless otherwise provided in the
instrument evidencing the Awards or in any other agreement between the
Participant and the Company or unless otherwise agreed to by the Committee.

     (d) During the 60-day period following the Change in Control; a Participant
holding an Option or a Stock Appreciation Right will have the right (by giving
written notice to the Company) to surrender all or part of his or her Award to
the Company and receive a cash payment equal to (1) the excess of the value per
share of Stock (as defined below) on the date of exercise over the exercise
price per share, multiplied by (2) the number of shares subject to the
surrendered Award. Such right will not apply to any Option as to which the
Committee expressly excludes such rights at the date of grant. As used in this
paragraph with respect to an election by a Participant to receive cash in
respect of an Award which is not an ISO the term "value per share" will mean the
higher of (i) the highest reported sales price, regular way, of a share of Stock
on the principal stock exchange on which the Stock is traded during the 60-day
period ending on the date of the Change of Control and (ii) if the Change of
Control is the result of an acquisition of Stock by a "person" (as defined in
Exhibit A), the highest price per share of the Stock paid by such a person. In
the case of an election by a Participant to receive cash in respect of an ISO
will

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mean the fair market value (As defined in Section 8.8) unless otherwise agreed
to by the Participant.


8. GENERAL PROVISIONS
   ------------------

     8.1 Documentation of Awards.
         -----------------------

     Awards will be evidenced by written instruments prescribed by the Company
from time to time. Such instruments may be in the form of agreements, to be
executed by both the Participant and the Company, or certificates, letters or
similar instruments, which need not be executed by the Participant but
acceptance of which will evidence agreement to the terms thereof.

     8.2 Rights as a Stockholder: Dividend Equivalents.
         ---------------------------------------------

     Except as specifically provided by the Plan, the receipt of an Award will
not give a Participant rights as a stockholder; the Participant will obtain such
rights, subject to any limitations imposed by the Plan or the instrument
evidencing the Award, upon actual receipt of the Stock. The Committee may,
however, on such conditions as it deems appropriate, provide that a participant
will receive a benefit in lieu of cash dividends that would have been payable on
any or all Stock subject to the Participant's Award had such Stock been
outstanding. Without limitation, the Committee may provide for payment to the
Participant of amounts representing such dividends, either currently or in the
future, or for the investment of such amounts on behalf of the Participant.

     8.3 Conditions on Delivery of Stock.
         -------------------------------

     The Company will not be obligated to deliver any shares of Stock pursuant
to the Plan or to remove restriction from shares previously delivered under the
Plan (a) until all conditions of the Award have been satisfied or removed, (b)
until, in the opinion of the Company's counsel, all applicable federal and state
laws and regulations have been complied with, (c) if the outstanding stock is at
the time listed on any stock exchange, until the shares to be delivered have
been listed or authorized to be listed on such exchange upon official notice of
issuance, and (d) until all other legal matters in connection with the issuance
and delivery of such shares have been approved by the Company's counsel. If the
sale of Stock has not been registered under the Securities Exchange Act of 1933,
as amended, the Company may require, as a condition to exercise of the Award,
such representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act and may require that the certificate
evidencing the Stock bear an appropriate legend restricting transfer. If an
Award is exercised by the Participant's legal representative, the Company will
be under no obligation to deliver Stock pursuant to such exercise until the
Company is satisfied as to the authority of such representative.

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     8.4 Tax Withholding.
         ---------------

     The Company will withhold from any cash payment made pursuant to an Award
an amount sufficient to satisfy all federal, state and local withholding
requirements (the "withholding requirements").

     In the case of an Award pursuant to which Stock may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regards to such requirements, prior to the delivery of any Stock.
If and to the extend that such withholding is required, the Committee may permit
the Participant or such other person to elect at such time and in such manner as
the Committee provides to have the Company hold back from the shares to be
delivered, or to deliver to the Company, Stock having a value calculated to
satisfy the withholding requirements.

     If at the time an ISO is exercised the Committee determines that the
Company could be liable for withholding requirements with respect to a
disposition of the Stock received upon exercise, the Committee may require as a
condition of exercise that the person exercising the ISO agree (a) to inform the
Company promptly of any disposition (within the meaning of section 424(c) of the
Code) of Stock received upon exercise, and (b) to give such security as the
Committee deems adequate to meet the potential liability of the Company for the
withholding requirements and to augment such security from time to time in any
amount reasonably deemed necessary by the Committee to preserve the adequacy of
such security.

     8.5 Nontransferability of Awards.
         ----------------------------

     Except as otherwise specifically provided by the Committee, no Award (other
than an Award in the form of an outright transfer of cash or unrestricted stock)
may be transferred other than by will or by the laws of descent and
distribution, and during an Employee's lifetime an Award requiring exercise may
be exercised only by him or her (or in the event of incapacity, the person or
persons properly appointed to act on his or her behalf).

     8.6 Adjustments in the Event of Certain Transactions.
         ------------------------------------------------

     (a) In the event of a stock dividend, stock split or combination of shares,
recapitalization or other change in the Company's capitalization, or other
distribution with respect to common stockholders other than normal cash
dividends, the Committee will make any appropriate adjustments to the maximum
number of shares that may be delivered under the Plan under Section 4 above.

     (b) In the event referred to in paragraph (a) the Committee will also make
any appropriate


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adjustments to the number and kind of shares of Stock or securities subject to
Awards then outstanding or subsequently granted, any exercise prices relating to
Awards and any other provisions of Awards affected by such change. The Committee
may also make such adjustments to take into account material changes in law or
in accounting practices or principles, mergers, consolidations, acquisitions,
dispositions or similar corporate transactions, or any other event, if it is
determined by the Committee that adjustments are appropriate to avoid distortion
in the operation of the Plan, but no such adjustments other than those required
by law may adversely affect the rights of any Participant (without the
Participant's consent) under any Award previously granted.

     8.7 Employment Rights.
         -----------------

     Neither the adoption of the Plan nor the grant of Awards will confer upon
any person any right to continued employment with the Company or any affiliated
company or affect in any way the right of the Company or any affiliated company
to terminate an employment relationship at any time. Except as specifically
provided by the Committee in any particular case, the loss of existing or
potential profits in Awards granted under the Plan will not constitute an
element of damages in the event of termination of an employment relationship,
even if the termination is in violation of an obligation of the Company to the
Employee.

     8.8 Fair Market Value.
         -----------------

     For purposes of the Plan, fair market value of a share of Stock on any date
shall be the Closing Price of the Stock. The "Closing Price" of Stock on any
business day shall be the last sale price as reported on the principal market on
which the Stock is traded or, if no last sale is reported, then the mean between
the highest bid and the lowest asked prices on that day. If the Stock is not
publicly traded and in such other circumstances as the Committee deems
appropriate, the value of a share of Stock shall be determined by the Committee,
whose determination shall be final and binding.

     8.9 Deferral of Payments.
         --------------------

     The Committee may agreed at any time, upon the request of the Participant,
to defer the date on which any payment under an Award will be made.

     8.10 Past Services as Consideration.
          ------------------------------

     Where a Participant purchases Stock under an Award for a price equal to the
par value of the Stock, the Committee may determine that such price has been
satisfied by past services rendered by the Participant.


                                      -13-
<PAGE>   14


     9. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION
        ---------------------------------------------------------------

     Neither adoption of the Plan nor the grant of Awards to a Participant will
affect the Company's right to grant to such Participant Awards that are not
subject to the Plan, to issue to such Participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
Employees.

     The Committee may at any time discontinue granting Awards under the Plan.
The Board may at any time or times amend the Plan or any outstanding Award for
any purpose which may at any time be permitted by law, or may at any time
terminate the Plan as to any further grants of Awards, provided that (except to
the extent expressly required or permitted by the Plan) no such amendment will,
without the approval of the stockholders of the Company, (a) increase the
maximum number of shares available under the Plan, (b) change the group of
persons eligible to receive Awards under the Plan, (c) extend the time within
which Awards may be granted, or (d) amend the provisions of this Section 9, and
no amendment or termination of the Plan may adversely affect the rights of any
Participant (without his or her consent) under any Award previously granted.

                                      -14-

<PAGE>   15

                                    EXHIBIT A
                                    ---------

                         Definition of Change of Control
                         -------------------------------

"Change of Control" shall mean the occurrence of any one of the following
events:

     (a) any 'person' as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the "1934 Act") (other than (i) the Company,
(ii) any subsidiary of the Company, (iii) any trustee or fiduciary holding
securities under an employee benefit plan of the Company or of any subsidiary of
the Company, or (iv) any company owned directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company), becomes the 'beneficial owner' (as defined
in Section 13(d) of the 1934 Act), together with all Affiliates and Associates
(as such terms are used in Rule 12b-2 of the General Rules and Regulations under
the 1934 Act) of such person, directly or indirectly, of securities of the
Company representing 35% or more of the combined voting power of the Company's
then outstanding securities;

     (b) the stockholders of the Company approve a merger or consolidation of
the Company with any other company, other than (1) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity), 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 65% of the combined voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation or (2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no 'person'
(with the exception given and the method of determining 'beneficial ownership'
used in clause (a) of this definition) acquires mare than 50% of the combined
voting power of the Company's then outstanding securities;

     (c) during any period of two consecutive years (not including any period
prior to the execution of this Agreement), individuals who at the beginning of
such period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clause (a), (b), or (d) of this definition)
whose election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved cease for any reason to constitute at least a majority
thereof; or

     (d) the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all
or substantially all

                                      -15-

<PAGE>   16

of the Company's assets.

In no event shall a Change in Control be deemed to have occurred if prior
thereto the Board by unanimous vote of its members present and voting, including
at least two (2) such members who are employees of the Company (whose assent
shall not be unreasonably withheld), so determine; PROVIDED, that no such
determination shall be effective after an initial public offering of the
Company's Stock. No Change in Control shall be deemed to have occurred solely by
reason of an initial public offering of the Company's Stock.


                                      -16-
<PAGE>   17


                             FILENE'S BASEMENT CORP.

                     AMENDMENT TO 1990 EQUITY INCENTIVE PLAN


     Pursuant to a vote of the Board of Directors of Filene's Basement Corp.
(the "Company") on October 3, 1996, the Company's 1990 Equity Incentive Plan
(the "Plan") has been amended as follows:

1.   Paragraph 1 of Section 2 of the Plan is amended and restated in its 
entirety to read as follows:

     "The Plan will be administered by the Board of Directors of the Company
     (the "Board") or a Committee (the "Committee") appointed by the Board. The
     Committee shall be composed solely of at least two individuals who are
     Non-Employee Directors, as such term is defined in Rule 16b-3 under the
     Securities Exchange Act of 1934, as amended (the "Act"), and Outside
     Directors, as such term is defined in the Internal Revenue Code of 1986, as
     amended. A majority of the members of the Committee shall constitute a
     quorum, and all determinations of the Committee shall be made by a majority
     of its members.""