Amended 1993 Executive Stock Based Incentive Plan


                                The Talbots, Inc.
         Amended and Restated 1993 Executive Stock Based Incentive Plan
                      (As Amended Through March 6, 2001)


                  1.  Purpose.  The  purpose of the Amended  and  Restated  1993
Executive Stock Based Incentive Plan (the "Plan") is to advance the interests of
The Talbots,  Inc. (the "Company") and its shareholders by providing  incentives
to certain key employees of the Company and its  affiliates and to certain other
key  individuals who perform  services for these  entities,  including those who
contribute  significantly to the strategic and long-term performance  objectives
and growth of the Company and its affiliates.

                  2.  Administration.  The Plan shall be administered  solely by
the  Compensation  Committee  (the  "Committee")  of the Board of Directors (the
"Board") of the Company, as such Committee is from time to time constituted,  or
any successor committee the Board may designate to administer the Plan; provided
that if at any time Rule 16b-3 or any  successor  rule ("Rule  16b-3") under the
Securities  Exchange Act of 1934, as amended (the  "Exchange  Act"),  so permits
without  adversely  affecting  the  ability  of the  Plan  to  comply  with  the
conditions  for exemption  from Section 16 of the Exchange Act (or any successor
provision) provided by Rule 16b-3, the Committee may delegate the administration
of the Plan in  whole or in part,  on such  terms  and  conditions,  and to such
person or  persons  as it may  determine  in its  discretion,  as it  relates to
persons  not  subject  to  Section  16 of the  Exchange  Act (or  any  successor
provision). The membership of the Committee or such successor committee shall be
constituted  so as to comply at all times with the  applicable  requirements  of
Rule 16b-3.

                  The  Committee has all the powers vested in it by the terms of
the Plan set forth herein, such powers to include exclusive authority (except as
may be delegated as permitted  herein) to select the key employees and other key
individuals  to be granted  awards under the Plan  ("Awards"),  to determine the
type,  size and terms of the Award to be made to each  individual  selected,  to
modify the terms of any Award that has been granted,  to determine the time when
Awards  will be  granted,  to  establish  performance  objectives,  to make  any
adjustments  necessary  or  desirable  as a result of the  granting of Awards to
eligible individuals located outside the United States and to prescribe the form
of the  instruments  embodying  Awards  made under the Plan.  The  Committee  is
authorized  to  interpret  the Plan and the Awards  granted  under the Plan,  to
establish,  amend and  rescind  any rules and  regulations  relating to the Plan
(including,  but not limited to, vesting requirements,  if any), and to make any
other   determinations   which  it  deems   necessary  or   desirable   for  the
administration  of the Plan. The Committee (or its delegate as permitted herein)
may correct any defect or supply any omission or reconcile any  inconsistency in
the Plan or in any Award in the manner and to the  extent  the  Committee  deems
necessary or desirable  to carry it into effect.  Any decision of the  Committee
(or its delegate as permitted herein) in the  interpretation  and administration
of the  Plan,  as  described  herein,  shall be  within  its  sole and  absolute
discretion and shall be final,  conclusive and binding on all parties concerned.
The Committee  may act only by a majority of its members in office,  except that
the  members  thereof  may  authorize  any one or more of their  members  or any
officer of the  Company to execute and  deliver  documents  or to take any other
ministerial  action on behalf of the Committee with respect to Awards made or to
be made to Plan  participants.  No member of the Committee and no officer of the
Company  shall be liable for anything  done or omitted to be done by him, by any
other  member of the  Committee  or by any officer of the Company in  connection
with the  performance  of  duties  under the Plan,  except  for his own  willful
misconduct or as expressly provided by statute. Determinations to be made by the
Committee under the Plan may be made by its delegates.

                  3.  Participation.   (a)  Affiliates.   If  an  Affiliate  (as
hereinafter  defined) of the Company  wishes to  participate in the Plan and its
participation  shall have been approved by the Board upon the  recommendation of
the Committee,  the board of directors or other  governing body of the Affiliate
shall adopt a resolution  in form and  substance  satisfactory  to the Committee
authorizing  participation  by the Affiliate in the Plan with respect to its key
employees or other key individuals  performing  services for it. As used herein,
the term  "Affiliate"  means any entity in which the Company  has a  substantial
direct or indirect  equity  interest,  as  determined  by the  Committee  in its
discretion.

                  An  Affiliate  participating  in the  Plan  may  cease to be a
participating  company  at any time by  action  of the Board or by action of the
board of  directors  or other  governing  body of such  Affiliate,  which latter
action shall be effective not earlier than the date of delivery to the Secretary
of the Company of a certified copy of a resolution of the  Affiliate's  board of
directors or other governing body taking such action.  If the  participation  in
the Plan of an Affiliate shall terminate,  such termination shall not relieve it
of any  obligations  therefor  incurred  by it under the Plan,  except as may be
approved by the Committee.

                           (b) Participants.  Consistent with the purpose of the
Plan, the Committee  shall have  exclusive  power (except as may be delegated as
permitted  herein)  to  select  the key  employees  and  other  key  individuals
performing the services for the Company and its  Affiliates who may  participate
in the Plan and be granted Awards under the Plan.  Eligible  individuals  may be
selected individually or by groups or categories, as determined by the Committee
in  its  discretion.  No  non-employee  director  of the  Company  or any of its
Affiliates shall be eligible to receive an Award under the Plan.

                  4. Awards  under the Plan.  (a) Types of Awards.  Awards under
the Plan may include,  but need not be limited to, one or more of the  following
types,  either alone or in any combination  thereof:  (i) "Stock  Options," (ii)
"Stock Appreciation Rights," (iii) "Restricted Stock," (iv) "Performance Grants"
and (v) any other type of Award deemed by the Committee in its  discretion to be
consistent with the purposes of the Plan (including,  but not limited to, Awards
of or options or similar rights granted with respect to unbundled stock units or
components  thereof,  and  Awards  to be made to  participants  who are  foreign
nationals or are employed or  performing  services  outside the United  States.)
Stock Options,  which include  "Nonqualified Stock Options" and "Incentive Stock
Options" or  combinations  thereof,  are rights to purchase common shares of the
Company  having a par value of $0.01 per share and stock of any other class into
which such shares may thereafter be changed (the "Common Shares").  Nonqualified
Stock Options and Incentive  Stock options are subject to the terms,  conditions
and restrictions  specified in Paragraph 5. Stock Appreciation Rights are rights
to receive (without payment to the Company) cash,  Common Shares,  other Company
securities (which may include, but need not be limited to, unbundled stock units
or  components  thereof,  debentures,   preferred  stock,  warrants,  securities
convertible into Common Shares or other property,  and other types of securities
including,  but not limited to,  those of the  Company or an  Affiliate,  or any
combination thereof ("Other Company Securities")) or property, or other forms of
payment, or any combination  thereof,  as determined by the Committee,  based on
the increase in the value of the number of Common Shares  specified in the Stock
Appreciation  Right.  Stock  Appreciation  Rights  are  subject  to  the  terms,
conditions and restrictions specified in Paragraph 6. Shares of Restricted Stock
are Common Shares which are issued subject to certain  restrictions  pursuant to
Paragraph 7.  Performance  Grants are  contingent  awards  subject to the terms,
conditions  and  restrictions  described in  Paragraph 8,  pursuant to which the
participant  may become entitled to receive cash,  Common Shares,  Other Company
Securities or property,  or other forms of payment, or any combination  thereof,
as determined by the Committee.

                           (b)  Maximum  Number of Shares  that Shall be Issued;
Award Limitation.  There shall be issued under the Plan (as Restricted Stock, in
payment of  Performance  Grants,  pursuant to the  exercise of Stock  Options or
Stock Appreciation  Rights, or in payment of or pursuant to the exercise of such
other Awards as the Committee, in its discretion, may determine) an aggregate of
not more than 11,920,000 Common Shares (as adjusted, pursuant to Paragraph 15(a)
hereof,  for the Company's  2-for-1 stock split effective  November 7, 2000) and
Other Company Securities,  all subject to such further adjustment as provided in
Paragraph  15(a)  hereof.  For purposes of this  Paragraph  4(b),  Other Company
Securities  shall be counted  against  the  maximum  number of Common  Shares as
required by Rule 16b-3.  Common Shares and, to the extent they constitute equity
securities,  Other Company  Securities issued pursuant to the Plan may be either
authorized  but  unissued  shares,  treasury  shares,  reacquired  shares or any
combination thereof. Unless prohibited by Rule 16b-3, any Common Shares or Other
Company   Securities  subject  to  repurchase  or  forfeiture  rights  that  are
reacquired by the Company  pursuant to such rights or any Common Shares or Other
Company  Securities  previously counted against the maximum number of shares set
forth  above in  respect of any Award that is  canceled,  terminated  or expires
unexercised in whole or in part will be available for issuance under new Awards.
In addition,  to the extent not  prohibited by Rule 16b-3,  any Common Shares or
Other  Company  Securities  withheld by or tendered to the Company in connection
with the payment of the exercise  price of an Award or the  satisfaction  of the
tax  withholding  obligations  upon the  exercise or vesting of an Award will be
available for issuance  under new Awards.  Effective for and with respect to any
and all Stock  Option  grants  under the Plan on and after  January 1, 2000,  no
participant  may be granted Stock Options  covering in the aggregate more than 5
million Common Shares in a period of any three (3)  consecutive  calendar years,
subject to adjustment in accordance with Paragraph 15(a) hereof.

                           (c) Rights  with  respect to Common  Shares and Other
Securities.

                           (i) Unless  otherwise  determined by the Committee in
                  its  discretion,  a participant to whom an Award of Restricted
                  Stock  has been  made  (and any  person  succeeding  to such a
                  participant's  rights pursuant to the Plan) shall have,  after
                  issuance  of a  certificate  for the  number of Common  Shares
                  awarded and prior to the expiration of the  Restricted  Period
                  or the  earlier  repurchase  of such  Common  Shares as herein
                  provided, ownership of such Common Shares, including the right
                  to  vote  the  same  and  to   receive   dividends   or  other
                  distributions  made or paid with respect to such Common Shares
                  (provided that such Common Shares, and any new,  additional or
                  different shares, or Other Company Securities or property,  or
                  other  forms of  consideration  which the  participant  may be
                  entitled to receive  with  respect to such Common  Shares as a
                  result of a stock split, stock dividend or any other change in
                  the corporation or capital structure of the Company,  shall be
                  subject  to  the   restrictions   hereinafter   described   as
                  determined  by  the  Committee  in its  discretion),  subject,
                  however, to the options,  restrictions and limitations imposed
                  thereon pursuant to the Plan. Notwithstanding the foregoing, a
                  participant  with  whom an  Award  agreement  is made to issue
                  Common  Shares  in the  future,  shall  have  no  rights  as a
                  shareholder  with  respect  to Common  Shares  related to such
                  agreement until issuance of a certificate to him.

                           (ii) Unless otherwise  determined by the Committee in
                  its  discretion,  a  participant  to  whom a  grant  of  Stock
                  options, Stock Appreciation Rights,  Performance Grants or any
                  other  Award is made  (and  any  person  succeeding  to such a
                  participant's  rights  pursuant  to the  Plan)  shall  have no
                  rights as a  shareholder  with respect to any Common Shares or
                  as a holder with respect to other securities, if any, issuable
                  pursuant to any such Award until the date of the issuance of a
                  stock  certificate  to him for  such  Common  Shares  or other
                  instrument  of  ownership,  if  any.  Except  as  provided  in
                  Paragraph  15,  no  adjustment  shall be made  for  dividends,
                  distributions   or   other   rights   (whether   ordinary   or
                  extraordinary, and whether in cash, securities, other property
                  or other forms of consideration,  or any combination  thereof)
                  for which  the  record  date is prior to the date  such  stock
                  certificate  or other  instrument  of  ownership,  if any,  is
                  issued.

                  5. Stock Options. The Committee may grant Stock Options either
alone, or in conjunction with Stock Appreciation  Rights,  Performance Grants or
other Awards, either at the time of grant or by amendment  thereafter;  provided
that an Incentive  Stock  Option may be granted only to an eligible  employee of
the Company or its parent or subsidiary corporation. Each Stock Option (referred
to herein  as an  "Option")  granted  under the Plan  shall be  evidenced  by an
instrument in such form as the Committee  shall  prescribe  from time to time in
accordance  with  the  Plan and  shall  comply  with  the  following  terms  and
conditions, and with such other terms and conditions, including, but not limited
to,  restrictions  upon the Option or the Common  Shares  issuable upon exercise
thereof, as the Committee, in its discretion, shall establish:

                           (a) The option  price may be equal to or greater than
the fair market  value of the Common  Shares  subject to such option at the time
the Option is granted, as determined by the Committee;  provided,  however, that
in the case of an Incentive  Stock  option  granted to such an employee who owns
stock  representing  more than ten percent of the voting power of all classes of
stock of the Company or of its parent or subsidiary (a "Ten Percent  Employee"),
such option  price shall not be less than 110% of such fair market  value at the
time the Option is granted;  but in no event will such option price be less than
the par value of such Common Shares.

                           (b) The  Committee  shall  determine  the  number  of
Common Shares to be subject to each Option.  The number of Common Shares subject
to  an  outstanding  Option  may  be  reduced  on  a  share-for-share  or  other
appropriate  basis,  as determined by the  Committee,  to the extent that Common
Shares under such Option are used to calculate the cash,  Common  Shares,  Other
Company  Securities or property,  or other forms of payment,  or any combination
thereof, received pursuant to exercise of a Stock Appreciation Right attached to
such option,  or to the extent that any other Award granted in conjunction  with
such option is paid.

                           (c)   The   Option   may  not  be   sold,   assigned,
transferred,  pledged,  hypothecated or otherwise disposed of, except by will or
the laws of  descent  and  distribution,  and shall be  exercisable  during  the
grantee's lifetime only by him. Unless the Committee determines  otherwise,  the
Option shall not be  exercisable  for at least  twelve  months after the date of
grant, unless the grantee ceases employment or performance of service before the
expiration of such twelve-month period by reason of his disability as defined in
Paragraph 12 or his death.

                           (d) The Option shall not be exercisable:

                           (i) in the case of any Incentive Stock Option granted
                  to a Ten Percent Employee,  after the expiration of five years
                  from the date it is  granted,  and,  in the case of any  other
                  option,  after the expiration of ten years from the date it is
                  granted.  Any Option may be exercised  during such period only
                  at  such  time  or  times  and  in  such  installments  as the
                  Committee may establish;

                           (ii)  unless  payment  in full is made for the shares
                  being  acquired  thereunder  at the  time  of  exercise;  such
                  payment shall be made in such form (including, but not limited
                  to, cash,  Common Shares,  or any combination  thereof) as the
                  Committee may determine in its discretion; and

                           (iii)  unless  the person  exercising  the Option has
                  been, at all times during the period  beginning  with the date
                  of the grant of the  option  and ending no later than the date
                  which is  three  months  prior  to the date of such  exercise,
                  employed by or otherwise  performing  services for the Company
                  or an Affiliate,  or a corporation,  or a parent or subsidiary
                  of a  corporation,  substituting  or assuming  the option in a
                  transaction  to which Section  425(a) of the Internal  Revenue
                  Code of 1986, as amended, or any successor statutory provision
                  thereto (the "Code"), is applicable, except that

                           (A) in the case of any Nonqualified  Stock Option, if
                  such  person  shall  cease  to be  employed  by  or  otherwise
                  performing  services for the Company or an Affiliate solely by
                  reason  of a  period  of  Related  Employment  as  defined  in
                  Paragraph   14,  he  may,   during   such  period  of  Related
                  Employment,  exercise the  Nonqualified  Stock Option as if he
                  continued such employment or performance of service; or

                           (B) if such  person  shall cease such  employment  or
                  performance of services by reason of his disability as defined
                  in Paragraph 12 or early,  normal or deferred retirement under
                  a qualified  retirement program of the Company or an Affiliate
                  (or such other plan or  arrangement  as may be approved by the
                  Committee, in its discretion,  for this purpose) while holding
                  an  option  which  has not  expired  and has  not  been  fully
                  exercised,  such  person,  at any time within  three years (or
                  such other period  determined by the Committee) after the date
                  he ceased such  employment or  performance of services (but in
                  no event  after the  option has  expired),  may  exercise  the
                  Option  with  respect  to any shares as to which he could have
                  exercised the Option on the date he ceased such  employment or
                  performance  of  services,  or with  respect  to such  greater
                  number of shares as determined by the Committee; or

                           (C) if any person to whom an Option has been  granted
                  shall die holding an option  which has not expired and has not
                  been fully exercised, his executors,  administrators, heirs or
                  distributees,  as the case may be, may, at any time within one
                  year (or such other period  determined by the Committee) after
                  the  date of death  (but in no  event  after  the  option  has
                  expired), exercise the option with respect to any shares as to
                  which the decedent could have exercised the option at the time
                  of his death, or with respect to such greater number of shares
                  as determined by the Committee.

                           (D) in the case of any Nonqualified  Stock Option, if
                  such person  shall cease such  employment  or  performance  of
                  services by reason of his "termination without cause" (as such
                  term is defined  in the  employment  agreement  then in effect
                  between  the Company and such  person,  or if there  exists no
                  such employment  agreement or no such defined term in any such
                  employment  agreement,  then as determined by the Committee in
                  its  discretion) by the Company or an Affiliate  while holding
                  an  Option  which  has not  expired  and has  not  been  fully
                  exercised,  such  person,  at any time within  three years (or
                  such  other  shorter  period  as  may  be  determined  by  the
                  Committee in its  discretion  or as may be expressly set forth
                  in any such  employment  agreement)  after  the date he ceased
                  such  employment or  performance  of services (but in no event
                  after the Option has  expired),  may  exercise the Option with
                  respect to any share as to which he could have  exercised  the
                  Option on the date he ceased such employment or performance of
                  services,  or with respect to such greater number of shares as
                  determined by the Committee.

                           (e) In the case of an  Incentive  Stock  Option,  the
amount of aggregate  fair market value of Common Shares  (determined at the time
of grant of the option  pursuant to subparagraph 5 (a) of the Plan) with respect
to which  incentive  stock  options  are  exercisable  for the first  time by an
employee  during  any  calendar  year  (under  all such  plans  of his  employer
corporation  and its parent  and  subsidiary  corporations)  shall not exceed an
amount to be determined by the Committee.

                           (f)  It  is  the  intent  of  the  Company  that  the
Nonqualified Stock Options granted under the Plan not be classified as Incentive
Stock  Options,  that the  Incentive  Stock  Options  granted  under the Plan be
consistent  with and  contain or be deemed to contain  all  provisions  required
under  Section  422 and the  other  appropriate  provisions  of the Code and any
implementing  regulations (and any successor provisions  thereof),  and that any
ambiguities in  construction  shall be  interpreted in order to effectuate  such
intent.

                  6. Stock  Appreciation  Rights.  The Committee may grant Stock
Appreciation  Rights  either  alone,  or  in  conjunction  with  Stock  Options,
Performance Grants or other Awards,  either at the time of grant or by amendment
thereafter. Each Award of Stock Appreciation Rights granted under the Plan shall
be evidenced by an instrument in such form as the Committee shall prescribe from
time to time in  accordance  with the Plan and shall  comply with the  following
terms and conditions,  and with such other terms and conditions,  including, but
not limited to,  restrictions upon the Award of Stock Appreciation Rights or the
Common  Shares  issuable  upon  exercise  thereof,  as  the  Committee,  in  its
discretion, shall establish:

                           (a) The  Committee  shall  determine  the  number  of
Common  Shares to be  subject to each Award of Stock  Appreciation  Rights.  The
number of Common Shares  subject to an outstanding  Award of Stock  Appreciation
Rights  may be reduced  on a share  for-share  or other  appropriate  basis,  as
determined by the  Committee,  to the extent that Common Shares under such Award
of Stock  Appreciation  Rights are used to calculate  the cash,  Common  Shares,
Other  Company  Securities  or  property,  or  other  forms of  payment,  or any
combination  thereof received pursuant to exercise of an option attached to such
Award of Stock  Appreciation  Rights,  or to the  extent  that any  other  Award
granted in conjunction with such Award of Stock Appreciation Rights is paid.

                           (b) The Award of Stock Appreciation Rights may not be
sold,  assigned,  transferred,  pledged,  hypothecated or otherwise disposed of,
except by will or the laws of descent and distribution, and shall be exercisable
during the  grantees'  lifetime  only by him.  Unless the  Committee  determines
otherwise,  the Award of Stock Appreciation  Rights shall not be exercisable for
at least  twelve  months  after the date of grant,  unless  the  grantee  ceases
employment or performance of services before the expiration of such twelve-month
period by reason of his disability as defined in Paragraph 12 or his death.

                           (c) The Award of Stock Appreciation  Rights shall not
be exercisable:

                           (i) in the case of any  Award  of Stock  Appreciation
                  Rights that are attached to an Incentive  Stock option granted
                  to a Ten Percent Employee,  after the expiration of five years
                  from the date it is  granted,  and,  in the case of any  other
                  Award of Stock  Appreciation  Rights,  after the expiration of
                  ten  years  from the date it is  granted.  Any  Award of Stock
                  Appreciation  Rights may be exercised  during such period only
                  at  such  time  or  times  and  in  such  installments  as the
                  Committee may establish;

                           (ii)  unless the  option or other  Award to which the
                  Award of Stock Appreciation  Rights is attached is at the time
                  exercisable; and

                           (iii) unless the person exercising the Award of Stock
                  Appreciation  Rights  has been at all times  during the period
                  beginning  with the date of the grant  thereof  and  ending no
                  later than the date which is three months prior to the date of
                  such exercise,  employed by or otherwise  performing  services
                  for the Company or an Affiliate, except that

                                    (A)  in  the  case  of any  Award  of  Stock
                  Appreciation Rights (other than those attached to an Incentive
                  Stock Option), if such person shall cease to be employed by or
                  otherwise  performing services for the Company or an Affiliate
                  solely by reason of a period of Related  Employment as defined
                  in  Paragraph  14,  he may,  during  such  period  of  Related
                  Employment, exercise the Award of Stock Appreciation Rights as
                  if he continued such employment or performance of services; or

                                    (B)  if  such   person   shall   cease  such
                  employment  or  performance  of  services  by  reason  of  his
                  disability  as defined  in  Paragraph  12 or early,  normal or
                  deferred  retirement under a qualified  retirement  program of
                  the Company or an Affiliate (or such other plan or arrangement
                  as may be approved by the Committee,  in its  discretion,  for
                  this  purpose)  while  holding an Award of Stock  Appreciation
                  Rights which has not expired and has not been fully exercised,
                  such person may, at any time within three years (or such other
                  period  determined by the Committee)  after the date he ceased
                  such  employment or  performance  of services (but in no event
                  after the Award of Stock  Appreciation  Rights  has  expired),
                  exercise the Award of Stock  Appreciation  Rights with respect
                  to any shares as to which he could have exercised the Award of
                  Stock   Appreciation   Rights  on  the  date  he  ceased  such
                  employment or performance of services, or with respect to such
                  greater number of shares as determined by the Committee; or

                                    (C) if any  person to whom an Award of Stock
                  Appreciation  Rights  has been  granted  shall die  holding an
                  Award of Stock  Appreciation  Rights which has not expired and
                  has not been fully exercised,  his executors,  administrators,
                  heirs or  distributees,  as the case may be,  may, at any time
                  within  one year  (or  such  other  period  determined  by the
                  Committee)  after the date of death (but in no event after the
                  Award of Stock Appreciation Rights has expired),  exercise the
                  Award of Stock Appreciation  Rights with respect to any shares
                  as to which the  decedent  could have  exercised  the Award of
                  Stock  Appreciation  Rights at the time of his death,  or with
                  respect to such greater  number of shares as determined by the
                  Committee.

                                    (D)  in  the  case  of any  Award  of  Stock
                  Appreciation Rights (other than those attached to an Incentive
                  Stock Option),  if such person shall cease such  employment or
                  performance of services by reason of his "termination  without
                  cause" (as such term is defined  in the  employment  agreement
                  then in effect  between  the Company  and such  person,  or if
                  there exists no such  employment  agreement or no such defined
                  term in any such employment  agreement,  then as determined by
                  the  Committee  in  its  discretion)  by  the  Company  or  an
                  Affiliate while holding an Award of Stock Appreciation  Rights
                  which has not expired and has not been fully  exercised,  such
                  person,  at any time within three years (or such other shorter
                  period as may be determined by the Committee in its discretion
                  or as may be  expressly  set  forth  in  any  such  employment
                  agreement)  after  the  date  he  ceased  such  employment  or
                  performance  of  services  (but in no event after the Award of
                  Stock Appreciation Rights has expired), may exercise the Award
                  of Stock  Appreciation  Rights with respect to any share as to
                  which he could have exercised the Award of Stock  Appreciation
                  Rights on the date he ceased such employment or performance of
                  services,  or with respect to such greater number of shares as
                  determined by the Committee.

                           (d) An  Award  of  Stock  Appreciation  Rights  shall
entitle  the holder  (or any  person  entitled  to act under the  provisions  of
subparagraph  6 (c) (iii) (C)  hereof) to  exercise  such Award or to  surrender
unexercised the Option (or other Award) to which the Stock Appreciation Right is
attached  (or any portion of such  option or other  Award) to the Company and to
receive from the Company in exchange  therefor,  without payment to the Company,
that number of Common Shares that have an aggregate,  value equal to (or, in the
discretion of the  Committee,  less than) the excess of the fair market value of
one share,  at the time of such  exercise,  over the  exercise  price (or option
price, as the case may be) per share,  times the number of shares subject to the
Award or the Option (or other Award), or portion thereof,  which is so exercised
or  surrendered,  as the case may be. The  Committee  shall be  entitled  in its
discretion  to elect to settle the  obligation  arising out of the exercise of a
Stock  Appreciation  Right by the payment of cash or Other Company Securities or
property,  or other forms of payment, or any combination  thereof, as determined
by the  Committee,  equal to the  aggregate  value of the Common Shares it would
otherwise be obligated to deliver.  Any such election by the Committee  shall be
made as soon as practicable after the receipt by the Committee of written notice
of the exercise of the Stock  Appreciation  Right.  The value of a Common Share,
Other Company  Securities or property,  or other forms of payment  determined by
the  Committee  for this purpose  shall be the fair market value  thereof on the
last business day next  preceding the date of the election to exercise the Stock
Appreciation  Right,  unless  the  Committee,  in  its  discretion,   determines
otherwise.

                           (e) A Stock  Appreciation  Right may provide  that it
shall be deemed to have been  exercised at the close of business on the business
day  preceding the  expiration  date of the Stock  Appreciation  Right or of the
released  option  (or other  Award),  or such  other  date as  specified  by the
Committee,  if at such time such Stock  Appreciation Right has a positive value.
Such  deemed  exercise  shall be settled or paid in the same manner as a regular
exercise thereof as provided in subparagraph 6 (d) hereof.

                           (f) No fractional  shares may be delivered under this
Paragraph  6, but in lieu  thereof a cash or other  adjustment  shall be made as
determined by the Committee in its discretion.

                  7. Restricted  Stock. Each Award of Restricted Stock under the
Plan shall be evidenced by an  instrument  in such form as the  committee  shall
prescribe  from time to time in  accordance  with the Plan and shall comply with
the following terms and conditions,  and with such other terms and conditions as
the Committee, in its discretion, shall establish:

                           (a) The  Committee  shall  determine  the  number  of
Common  Shares to be issued to a  participant  pursuant  to the  Award,  and the
extent,  if any,  to which  they  shall be issued in  exchange  for cash,  other
consideration, or both.

                           (b)  Common  Shares   issued  to  a  participant   in
accordance  with the  Award  may not be sold,  assigned,  transferred,  pledged,
hypothecated or otherwise disposed of, except by will or the laws of descent and
distribution,  or as otherwise  determined by the Committee,  for such period as
the Committee shall determine,  from the date on which the Award is granted (the
"Restricted Period").  The Company will have the option to repurchase the shares
subject to the Award at such price as the  Committee  shall have  fixed,  in its
discretion, when the Award was made or amended thereafter,  which option will be
exercisable  (i) if the  participant's  continuous  employment or performance of
services  for the Company and its  Affiliates  shall  terminate  for any reason,
except  solely by  reason  of a period  of  Related  Employment  as  defined  in
Paragraph 14, or except as otherwise provided in subparagraph 7(c), prior to the
expiration of the Restricted  Period,  (ii) if, on or prior to the expiration of
the  Restricted  Period or the  earlier  lapse of such  repurchase  option,  the
participant  has not paid to the Company an amount equal to any federal,  state,
local or foreign income or other taxes which the Company  determines is required
to  be  withheld  in  respect  of  such  shares,   or  (iii)  under  such  other
circumstances as determined by the Committee in its discretion.  Such repurchase
option shall be exercisable on such terms, in such manner and during such period
as shall be  determined  by the  Committee  when the Award is made or as amended
thereafter.  Each  certificate for Common Shares issued pursuant to a Restricted
Stock  Award  shall  bear  an  appropriate  legend  referring  to the  foregoing
repurchase  option  and other  restrictions  and to the fact that the shares are
partly paid,  shall be deposited by the Award Holder with the Company,  together
with a stock power endorsed in blank, or shall be evidenced in such other manner
permitted by applicable  law as  determined by the Committee in its  discretion.
Any  attempt  to  dispose  of any such  Common  Shares in  contravention  of the
foregoing repurchase option shall be null and void and without effect. If Common
Shares issued pursuant to a Restricted Stock Award shall be repurchased pursuant
to the repurchase  option described  above, the participant,  or in the event of
his death, his personal representative, shall forthwith deliver to the Secretary
of  the  Company  the   certificates  for  the  Common  Shares  awarded  to  the
participant,  accompanied  by  such  instrument  of  transfer,  if  any,  as may
reasonably be required by the Secretary of the Company. If the repurchase option
described  above  is  not  exercised  by  the  Company,   such  option  and  the
restrictions  imposed pursuant to the first sentence of this  subparagraph  7(b)
shall terminate and be of no further force and effect.

                           (c) If a  participant  who  has  been  in  continuous
employment or performance of services for the Company or an Affiliate  since the
date on which a Restricted  Stock Award was granted to him shall,  while in such
employment or  performance  of services,  die, or terminate  such  employment or
performance of services by reason of disability as defined in Paragraph 12 or by
reason of early,  normal or deferred  retirement  under a  qualified  retirement
program of the Company or an Affiliate (or such other plan or arrangement as may
be approved by the  Committee in its  discretion,  for this  purpose) and any of
such events shall occur after the date on which the Award was granted to him and
prior to the end of the  Restricted  Period of such  Award,  the  Committee  may
determine to cancel the repurchase  option (and any and all other  restrictions)
on any or all of the Common  Shares  subject to such Award;  and the  repurchase
option shall become exercisable at such time as to the remaining shares, if any.

                  8. Performance Awards.

                           (a) Performance  Awards  Generally.  The Committee is
authorized to grant Performance Awards on the terms and conditions  specified in
this Section 8. Performance  Awards may be denominated as a cash amount,  number
of Common Shares,  or specified number of other Awards (or a combination)  which
may be  earned  upon  achievement  or  satisfaction  of  performance  conditions
specified by the  Committee.  In addition,  the  Committee  may specify that any
other Award shall constitute a Performance  Award by conditioning the right of a
Participant  to exercise the Award or have it settled,  and the timing  thereof,
upon  achievement  or  satisfaction  of such  performance  conditions  as may be
specified by the  Committee.  The Committee  may use such business  criteria and
other  measures of performance as it may deem  appropriate in  establishing  any
performance  conditions,  and may exercise its  discretion to reduce or increase
the amounts payable under any Award subject to performance conditions, except as
limited  under  Section  8(b) in the case of a  Performance  Award  intended  to
qualify as "performance-based compensation" under Section 162(m) of the Internal
Revenue Code.

                           (b) Performance  Awards Granted to Covered Employees.
If the  Committee  determines  that  a  Performance  Award  to be  granted  to a
participant  who is  designated  by the  Committee  as likely  to be a  "covered
employee"  under Code Section  162(m)  ("Covered  Employee")  should  qualify as
"performance-based compensation" for purposes of Code Section 162(m), the grant,
exercise and/or  settlement of such  Performance  Award shall be contingent upon
achievement of a  preestablished  performance  goal and other terms set forth in
this Section 8(b).

                           (i) Performance Goal Generally.  The performance goal
                  for  such  Performance  Awards  shall  consist  of one or more
                  business   criteria   and  a  targeted   level  or  levels  of
                  performance  with  respect  to  each  of  such  criteria,   as
                  specified by the Committee  consistent with this Section 8(b).
                  The  performance  goal shall be objective and shall  otherwise
                  meet  the   requirements   of  Code  Section  162(m)  and  the
                  regulations  thereunder  (including  Regulation  1. 162-27 and
                  successor regulations thereto), including the requirement that
                  the level or levels of  performance  targeted by the Committee
                  result  in  the   achievement  of   performance   goals  being
                  "substantially  uncertain."  The Committee may determine  that
                  such  Performance  Awards shall be granted,  exercised  and/or
                  settled upon  achievement of any one performance  goal or that
                  two or more of the  performance  goals must be  achieved  as a
                  condition  to  grant,   exercise  and/or  settlement  of  such
                  Performance   Awards.   Performance   goals  may   differ  for
                  Performance  Awards  granted  to  any  one  participant  or to
                  different participants.

                           (ii) Business Criteria.  One or more of the following
                  performance   measures  for  the  Company,   determined  on  a
                  consolidated  basis,  and/or  for  specified  subsidiaries  or
                  affiliates or other  business  units of the Company,  shall be
                  used by the Committee in  establishing  performance  goals for
                  such  Performance  Awards:  (1)  revenues,   net  revenues  or
                  comparable  sales;  (2)  earnings  from  operations,  earnings
                  before or after  taxes,  earnings  before  or after  interest,
                  depreciation,  amortization or extraordinary or special items;
                  (3)  earnings as  calculated  under any of the measures in (2)
                  above,  determined  on a per  common  share  basis  (basic  or
                  diluted);  (4) return on assets, return on investment,  return
                  on  capital,  or return on  equity;  (5)  operating  margin or
                  profit margin; and (6) stock price or stockholder  return. The
                  Compensation  Committee may specify that any such  performance
                  measures will be calculated  before or after  extraordinary or
                  nonrecurring  items,  before or after  changes  in  accounting
                  principles  or  standards,   before  or  after   restructuring
                  charges,  before or after  revenues,  operations,  earnings or
                  losses of discontinued  operations or acquisitions,  or before
                  or  after   Awards   under   this  plan  or  other   incentive
                  compensation. The targeted level or levels of performance with
                  respect to such business  criteria may be  established at such
                  levels and in such terms as the  Committee may  determine,  in
                  its  discretion,  including  in  absolute  terms,  as  a  goal
                  relative  to  performance  in  prior  periods,  or  as a  goal
                  compared  to  the   performance  of  one  or  more  comparable
                  companies or an index covering multiple companies.

                           (iii)  Performance  Period;  Timing for  Establishing
                  Performance Goals. Achievement of performance goals in respect
                  of  such   Performance   Awards  shall  be  measured   over  a
                  performance period of up to one year or more than one year, as
                  specified  by the  Committee.  A  performance  goal  shall  be
                  established  not later  than the  earlier of (A) 90 days after
                  the  beginning of any  performance  period  applicable to such
                  Performance  Award  or (B) the  time  25% of such  performance
                  period has elapsed.

                           (iv)  Performance   Award  Pool.  The  Committee  may
                  establish a Performance Award pool, which shall be an unfunded
                  pool, for purposes of measuring performance in connection with
                  Performance  Awards. The amount of such Performance Award pool
                  shall be based upon the  achievement of a performance  goal or
                  goals based on one or more of the business  criteria set forth
                  in Section 8(b)(ii) during the given  performance  period,  as
                  specified  by  the  Committee  in   accordance   with  Section
                  8(b)(iii).  The  Committee  may  specify  the  amount  of  the
                  Performance Award pool as a percentage of any of such business
                  criteria,  a  percentage  thereof  in  excess  of a  threshold
                  amount,  or as another  amount  which need not bear a strictly
                  mathematical relationship to such business criteria,

                           (v) Settlement of Performance  Awards;  Limitation on
                  Award  Amount;  Other Terms.  Settlement  of such  Performance
                  Awards shall be in cash, Common Shares,  other Awards or other
                  property,  in the discretion of the  Committee.  The Committee
                  may,  in its  discretion,  increase  or reduce the amount of a
                  settlement  otherwise  to be  made  in  connection  with  such
                  Performance   Awards,  but  may  not  exercise  discretion  to
                  increase  any such  amount  payable to a Covered  Employee  in
                  respect of a  Performance  Award subject to this Section 8(b).
                  Any  settlement  which  changes the form of payment  from that
                  originally  specified  shall be  implemented  in a manner such
                  that the  Performance  Award and other related  Awards do not,
                  solely for that reason, fail to qualify as  "performance-based
                  compensation"  for  purposes  of  Code  Section  162(m).   The
                  Committee  shall  specify  the  circumstances  in  which  such
                  Performance  Awards shall be paid or forfeited in the event of
                  termination  of employment by the  participant  or other event
                  (including  a  Change  in  Control)  prior  to  the  end  of a
                  performance  period or settlement of such Performance  Awards.
                  However, subject to adjustment in accordance with Paragraph 15
                  hereof, no Covered Employee may be granted a Performance Award
                  under  this  Paragraph  8(b) for an  amount  greater  than the
                  following limitation: (A) if the Award is for performance over
                  a period of one year or less, such Performance Award shall not
                  be for an amount greater than the lesser of $10 million or ten
                  times such  person's  annual  base  salary in effect as of the
                  date of the commencement of the performance  period and (B) if
                  the Award is for a performance  period of more than one fiscal
                  year,  such  Performance  Award  shall not be for an amount in
                  excess of the amount  determined under (A) above multiplied by
                  the number of years and  fractions  of a year  comprising  the
                  performance period.

                           (c)  Written  Determinations.  Determinations  by the
Committee as to the establishment of performance  goals, the amount  potentially
payable in respect of Performance Awards, the level of actual achievement of the
specified  performance goals relating to Performance  Awards,  and the amount of
any  final  Performance  Award  shall  be  recorded  in  writing  in the case of
Performance Awards intended to qualify under Code Section 162(m).  Specifically,
the  Committee  shall certify in writing,  in a manner  conforming to applicable
regulations  under  Code  Section  162(m),  prior  to  settlement  of each  such
Performance Award granted to a Covered Employee,  that the performance objective
relating to the  Performance  Award and other material terms of the  Performance
Award upon which  settlement of the Performance  Award was conditioned have been
satisfied.

                  9. Deferral of  Compensation.  The Committee  shall  determine
whether  or not an  Award  shall be made in  conjunction  with  deferral  of the
participant's  salary, bonus or other compensation,  or any combination thereof,
and whether or not such deferred amounts may be:

                           (i)   forfeited   to   the   Company   or  to   other
                  participants,   or  any  combination  thereof,  under  certain
                  circumstances  (which may include, but need not be limited to,
                  certain types of  termination  of employment or performance of
                  services for the Company and its Affiliates),

                           (ii)  subject to  increase or decrease in value based
                  upon the  attainment  of or failure  to attain,  respectively,
                  certain performance measures and/or

                           (iii)  credited  with income  equivalents  (which may
                  include,  but need not be limited to,  interest,  dividends or
                  other  rates of return)  until the date or dates of payment of
                  the Award, if any.

                  10. Deferred Payment of Awards. The Committee may specify that
the  payment  of all or any  portion  of  cash,  Common  Shares,  Other  Company
Securities  or  property,  or any  other  form of  payment,  or any  combination
thereof, under an Award shall be deferred until a later date. Deferrals shall be
for such periods or until the occurrence of such events, and upon such terms, as
the Committee shall determine in its discretion. Deferred payments of Awards may
be made by undertaking to make payment in the future based upon the  performance
of certain investment  equivalents  (which may include,  but need not be limited
to,  government  securities,  Common  Shares,  other  securities,   property  or
consideration,  or any  combination  thereof),  together  with  such  additional
amounts of income equivalents (which may be compounded and may include, but need
not be  limited  to,  interest,  dividends  or  other  rates of  return,  or any
combination  thereof) as may accrue  thereon until the date or dates of payment,
such investment equivalents and such additional amounts of income equivalents to
be determined by the Committee in its discretion.

                  11.  Amendment  of Awards  Under  the  Plan.  The terms of any
outstanding  Award  under  the  Plan  may be  amended  from  time to time by the
Committee in its discretion in any manner that it deems  appropriate  (including
but not limited  to,  acceleration  of the date of exercise of any Award  and/or
payments thereunder);  provided that no such amendment shall adversely affect in
a material manner any right of a participant under the Award without his written
consent  unless  the  Committee  determines  in its  discretion  that there have
occurred  or are  about  to  occur  significant  changes  in  the  participant's
position,  duties or  responsibilities,  or  significant  changes  in  economic,
legislative,  regulatory,  tax, accounting or cost/benefit  conditions which are
determined by the Committee in its  discretion to have or to be expected to have
a  substantial  effect on the  performance  of the company,  or any  subsidiary,
affiliate, division or department thereof, on the Plan or on any Award under the
Plan.

                  12.  Disability.  For the purposes of this Plan, a participant
shall be deemed to have terminated his employment or performance of services for
the Company and its affiliates by reason of disability,  if the Committee  shall
determine that the physical or mental  condition of the participant by reason of
which such  employment or  performance  of services  terminated was such at that
time as would entitle him to payment of monthly  disability  benefits  under the
Long Term  Disability  Benefit Plan in effect as of the date of adoption of this
Plan, or, if the  participant is not eligible for both benefits under such plan,
under any similar  disability plan of the Company or an Affiliate in which he is
a  participant.  If the  participant  is not  eligible  for  benefits  under any
disability plan of the Company or an Affiliate in which he is a participant,  he
shall be deemed to have terminated such employment or performance of services by
reason of  disability  if the  Committee  shall  determine  that his physical or
mental  condition  would entitle him to benefits  under the Company's  Long Term
Disability Benefit Plan if he were eligible therefor.

                  13.  Termination of a Participant.  For all purposes under the
Plan,  the  Committee  shall  determine  whether a  participant  has  terminated
employment by or the performance of services for the Company and its Affiliates;
provided,  however,  that  transfers  between the Company  and an  Affiliate  or
between  Affiliates,  and approved  leaves of absence shall not be deemed such a
termination.

                  14. Related Employment. For the purposes of this Plan, Related
Employment shall mean the employment or performance of services by an individual
for an employer that is neither the Company nor an Affiliate,  provided that (i)
such  employment or  performance  of services is undertaken by the individual at
the  request  of the  Company  or an  Affiliate,  (ii)  immediately  prior to an
undertaking of such  employment or  performance of services,  the individual was
employed  by or  performing  services  for the  Company or an  Affiliate  or was
engaged in Related  Employment  as herein  defined and (iii) such  employment or
performance  of  services  is in  the  best  interests  of  the  Company  and is
recognized  by the  Committee,  in its  discretion,  as Related  Employment  for
purposes of this Paragraph 14. The death or disability of an individual during a
period of Related Employment as herein defined shall be treated, for purposes of
this  Plan as if the  death  or onset  of  disability  has  occurred  while  the
individual  was  employed  by or  performing  services  for  the  Company  or an
Affiliate.

                  15. Dilution and Other Adjustments; Change in Control.

                           (a) In the  event of any  change  in the  outstanding
Common  Shares of the  Company  by reason of any stock  split,  stock  dividend,
split-up, split-off, spin-off,  recapitalization,  merger, consolidation, rights
offering,  reorganization,  combination  or  exchange  of shares,  a sale by the
Company of all or part of its assets,  any  distribution to  shareholders  other
than a normal cash dividend,  or other  extraordinary  or unusual event,  if the
Committee  shall  determine,  in its  discretion,  that  such  change  equitably
requires the adjustment in the terms of any Award or the number of Common Shares
available for Awards,  such adjustment may be made by the Committee and shall be
final, conclusive and binding for all purposes of the Plan.

                           (b)  With  respect  to   Restricted   Stock   Awards,
restrictions  on said  Restricted  Stock  Awards  shall  lapse  upon a Change in
Control Event. With respect to Stock Options and Stock Appreciation Rights, said
Stock Options and Stock Appreciation Rights shall become immediately exercisable
and fully vested upon a Change in Control  Event.  With  respect to  Performance
Grants, upon a Change in Control Event,  payment shall be made with respect to a
Performance  Grant  based on the  assumption  that the  performance  achievement
specified  in the Award would have been  attained by the end of the  performance
cycle. With respect to all other Awards, the effect of a Change in Control Event
thereon shall be as determined from time to time by the Committee.  For purposes
of this Plan,  a "Change in  Control  Event"  shall  mean:  (i) the  acquisition
(including  as a result of a merger)  by any  "person"  (as such term is used in
sections  3(a)(9),  13(d) and 14(d) of the Exchange  Act, or persons  "acting in
concert"  (which for  purposes of this Plan shall  include  two or more  persons
voting together on a consistent  basis pursuant to an agreement or understanding
between  them to act in  concert  and/or  as a "group"  within  the  meaning  of
Sections 13 (d) (3) and 14 (d) (2) of the Exchange Act),  other than the Company
or any of its subsidiaries,  or JUSCO (U.S.A.),  Inc. or any of its subsidiaries
or  "affiliates"  (as such term is defined in Rule 12b-2 under the Exchange Act)
(collectively,  an  "Acquiring  Person"),  of beneficial  ownership  (within the
meaning of Rule 13d-3  under the  Exchange  Act),  directly  or  indirectly,  of
securities  of the  Company  representing  more than 25 percent of the  combined
voting power of the then outstanding  securities of the Company entitled to then
vote  generally  in the  election  of  directors  of the  Company,  and no other
stockholder is the beneficial  owner (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, of a percentage of such securities higher
than that held by the Acquiring Person;  or (ii)  individuals,  who, as of 1993,
constitute the Board (the "Incumbent  Board") cease for any reason to constitute
at least a  majority  of the  Board;  provided  that any  individual  becoming a
director  subsequent to November 18, 1993,  whose  election,  or nomination  for
election  by the  Company's  stockholders,  was  approved  by a vote of at least
two-thirds  of the  directors  then  comprising  the  Incumbent  Board  shall be
considered as though such individual were a member of the incumbent  Board,  but
excluding, as a member of the Incumbent Board, any such individual whose initial
assumption  of office is in  connection  with an actual or  threatened  election
contest  relating to the election of the directors of the Company (as such terms
are used in Rule 14a-11 of  Regulation  14A under the Exchange  Act) and further
excluding any individual who is an  "affiliate",  "associate" (as such terms are
defined in Rule 12b-2 under the Exchange Act) or designee of an Acquiring Person
having or proposing to acquire beneficial  ownership (within the meaning of Rule
13d-3 under the Exchange  Act),  directly or  indirectly,  of  securities of the
Company  representing  more than 10 percent of the combined  voting power of the
then  outstanding  securities of the Company  entitled to then vote generally in
the election of directors of the Company.

                  16.  Designation of Beneficiary by Participant.  A participant
may name a  beneficiary  to receive  any  payment in which he may be entitled in
respect of any Award under the Plan in the event of his death, on a written form
to be provided by and filed with the  Committee,  and in a manner  determined by
the Committee in its discretion.  The Committee reserves the right to review and
approve beneficiary designations.  A participant may change his beneficiary from
time to time in the same manner, unless such participant has made an irrevocable
designation.  Any designation of beneficiary under the Plan (to the extent it is
valid and enforceable  under the applicable  law) shall be controlling  over any
other disposition,  testamentary or otherwise, as determined by the Committee in
its  discretion.  If no designated  beneficiary  survives the participant and is
living on the date on which any amount  becomes  payable  to such  participant's
beneficiary,  such  payment  will  be made to the  legal  representative  of the
participant's  estate,  and the term  "beneficiary" as used in the Plan shall be
deemed to include  such  person or persons.  If there is any  question as to the
legal right of any  beneficiary  to receive a  distribution  under the Plan, the
Committee in its discretion may determine that the amount in question be paid to
the legal  representatives of the estate of the participant,  in which event the
Company,  the Board  and the  Committee  and the  members  thereof  will have no
further liability to anyone with respect to such amount.

                  17.  Financial  Assistance.  If the Committee  determines that
such action is advisable, the Company may assist any person to whom an Award has
been  granted in  obtaining  financing  from the Company  under The Talbots Inc.
Stock  Purchase  Assistance  Plan (or other program of the Company or one of its
Affiliates  approved  pursuant to applicable law), or from a bank or other third
party,  on such terms as are determined by the Committee,  and in such amount as
is required to accomplish the purposes of the Plan,  including,  but not limited
to, to permit the exercise of an Award, the  participation  therein,  and/or the
payment of any taxes in respect thereof.  Such assistance may take any form that
the Committee deems  appropriate,  including,  but not limited to, a direct loan
from the Company or an Affiliate,  a guarantee of the  obligation by the Company
or an Affiliate,  or the  maintenance by the Company or an Affiliate of deposits
with such bank or third party.

                  18. Miscellaneous Provisions.

                           (a) No employee or other  person shall have any claim
or right to be  granted  an Award  under  the Plan.  Determinations  made by the
committee under the Plan need not be uniform and may be made  selectively  among
eligible  individuals under the Plan,  whether or not such eligible  individuals
are similarly situated. Neither the Plan nor any action taken hereunder shall be
construed  as giving any  employee  or other  person any right to continue to be
employed or perform services for the Company or any Affiliate,  and the right to
terminate the employment of or performance of service by any  participant at any
time and for any reason is specifically reserved.

                           (b) No  participant  or other  person  shall have any
right with respect to the Plan,  the Common Shares  reserved for issuance  under
the Plan or in any Award, contingent or otherwise, until written evidence of the
Award shall have been  delivered to the recipient and all the terms,  conditions
and provisions of the Plan and the Award  applicable to such recipient (and each
person claiming under or through him) have been met.

                           (c) Except as may be approved by the Committee  where
such approval shall not adversely affect  compliance of the Plan with Rule 16b-3
under the Exchange Act, a  participant's  rights and interest under the Plan may
not be assigned or  transferred,  hypothecated or encumbered in whole or in part
either  directly or by operation  of law or otherwise  (except in the event of a
participant's death) including, but not by way of limitation,  execution,  levy,
garnishment,  attachment,  pledge,  bankruptcy or in any other manner, provided,
however,  that any option or similar  right  (including,  but not  limited to, a
Stock Appreciation Right) offered pursuant to the Plan shall not be transferable
other  than  by will or the  laws of  descent  and  distribution  and  shall  be
exercisable during the participant's lifetime only by him.

                           (d) No Common  Shares,  Other  Company  Securities or
property,  other  securities  or  property,  or other forms of payment  shall be
issued  hereunder with respect to any Award unless counsel for the Company shall
be satisfied that such issuance will be in compliance with  applicable  federal,
state,  local and  foreign  legal,  securities  exchange  and  other  applicable
requirements.

                           (e) It is the  intent  of the  Company  that the Plan
comply  in all  respects  with  Rule  16b-3  under the  Exchange  Act,  that any
ambiguities or  inconsistencies  in  construction  of the Plan be interpreted to
give effect to such intention and that if any provision of the Plan is found not
to be in compliance  with Rule 16b-3,  such  provision  shall be deemed null and
void to the extent required to permit the Plan to comply with Rule 16b-3.

                           (f) The  Company  and its  Affiliates  shall have the
right to deduct from any payment made under the Plan any federal,  state,  local
or foreign  income or other taxes required by law to be withheld with respect to
such payment.  It shall be a condition to the obligation of the Company to issue
Common  Shares,  Other  Company  Securities  or property,  other  securities  or
property,  or other forms of payment, or any combination thereof, upon exercise,
settlement or payment of any Award under the Plan,  that the participant (or any
beneficiary or person entitled to act) pay to the Company, upon its demand, such
amount as may be  requested  by the Company for the  purpose of  satisfying  any
liability to withhold federal, state, local or foreign income or other taxes. If
the amount requested is not paid, the Company may refuse to issue Common Shares,
Other Company  Securities or property,  other  securities or property,  or other
forms of payment, or any combination  thereof.  Notwithstanding  anything in the
Plan to the contrary,  the Committee may, in its discretion,  permit an eligible
participant  (or any  beneficiary  or person  entitled to act) to elect to pay a
portion  or all of the  amount  requested  by the  Company  for such  taxes with
respect to such Award,  at such time and in such manner as the  Committee  shall
deem to be  appropriate  (including,  but not  limited  to, by  authorizing  the
Company to  withhold,  or agreeing to  surrender  to the Company on or about the
date such tax liability is determinable, Common Shares, Other Company Securities
or property,  other securities or property, or other forms of payment that would
otherwise be distributed, or have been distributed, as the case may be, pursuant
to such Award to such person,  having a fair market value equal to the amount of
such taxes).

                           (g) The  expenses  of the Plan  shall be borne by the
Company. However, if an Award is made to an individual employed by or performing
services for an Affiliate,

                           (i) if such  Award  results in payment of cash to the
                  participant, such Affiliate shall pay to the Company an amount
                  equal to such cash payment; and

                           (ii) if the  Award  results  in the  issuance  by the
                  Company to the  participant  of Common  Shares,  Other Company
                  Securities or property, other securities or property, or other
                  forms of payment, or any combination  thereof,  such Affiliate
                  shall pay to the  Company an amount  equal to the fair  market
                  value  thereof,  as determined by the  Committee,  on the date
                  such shares,  Other  Company  Securities  or  property,  other
                  securities  or  property,  or other forms of  payment,  or any
                  combination  thereof,  are  issued  (or,  in the  case  of the
                  issuance  of  Restricted  Stock  or of  Common  Shares,  Other
                  company  Securities  or  property,   or  other  securities  or
                  property,  or other forms of payment  subject to transfer  and
                  forfeiture conditions,  equal to the fair market value thereof
                  on the date on which they are no longer  subject to applicable
                  restrictions),  minus  the  amount,  if any,  received  by the
                  Company in  respect of the  purchase  of such  Common  Shares,
                  Other  Company  Securities  or property,  other  securities or
                  property  or  other  forms  of  payment,  or  any  combination
                  thereof.

                           (h) The Plan shall be unfunded. The Company shall not
be required to establish any special or separate fund or to make any segregation
of assets to assure the payment of any Award  under the Plan,  and the rights to
the  payment  of Awards  shall be no greater  than the  rights of the  Company's
general creditors.

                           (i) By accepting any Award or other benefit under the
Plan,  each  Participant  and each person claiming under or through him shall be
conclusively  deemed to have indicated his acceptance and  ratification  of, and
consent  to, any action  taken under the Plan by the  Company,  the Board or the
Committee or its delegates.

                           (j) Fair market  value in relation to Common  Shares,
Other  Company  Securities  or property,  other  securities or property or other
forms of payment of Awards under the Plan, or any combination  thereof as of any
specific time shall mean such value as determined by the Committee in accordance
with applicable law.

                           (k) The masculine  pronoun  includes the feminine and
the singular includes the plural wherever appropriate.

                           (l) The  appropriate  officers of the  Company  shall
cause to be filed any reports,  returns or other  information  regarding  Awards
hereunder  or any Common  Shares  issued  pursuant  hereto as may be required by
Section 13 or 15(d) of the  Exchange  Act (or any  successor  provision)  or any
other applicable statute, rule or regulation.

                           (m)  The  validity,   construction,   interpretation,
administration  and effect of the Plan,  and of its rules and  regulations,  and
rights  relating  to the Plan and to Awards  granted  under  the Plan,  shall be
governed  by the  substantive  laws,  but not the  choice of law  rules,  of the
Commonwealth of Massachusetts.

                  19. Plan Amendment or  Suspension.  The Plan may be amended or
suspended  in whole or in part at any time and from  time to time by the  Board,
but no  amendment  shall be  effective  unless and until the same is approved by
shareholders  of the Company  where the failure to obtain  such  approval  would
adversely  affect the  compliance of the Plan with Rule 16b-3 under the Exchange
Act and with other  applicable  law. No  amendment  of the Plan shall  adversely
affect in a material  manner any right of any  participant  with  respect to any
Award theretofore granted without such participant's written consent,  except as
permitted under Paragraph 11.

                  20.  Plan  Termination.  This Plan  shall  terminate  upon the
earlier of the following dates or events to occur:

                           (a) upon the  adoption of a  resolution  of the Board
terminating the Plan; or

                           (b) ten  years  from the  date the Plan is  initially
approved  and  adopted by the  shareholders  of the Company in  accordance  with
Paragraph  22  hereof;  provided,  however,  that the  Board  may,  prior to the
expiration  of  such  ten-year  period,  extend  the  term  of the  Plan  for an
additional  period  of up to five  years  for the  grant of  Awards  other  than
Incentive Stock Options.  No termination of the Plan shall  materially  alter or
impair any of the rights or  obligations  of any person,  without  his  consent,
under any Award  theretofore  granted under the Plan,  except that subsequent to
termination  of the Plan,  the Committee  may make  amendments  permitted  under
Paragraph 11.

                  21.  Registration  Rights. The Company covenants and agrees as
follows:

                           (a) Definitions. For purposes of this Paragraph 21:

                           (i)   the   term   "register,"    "registered,"   and
                  "registration"  refer to a registration  effected by preparing
                  and filing a  registration  statement  or similar  document in
                  compliance  with the  Securities  Act of 1933, as amended (the
                  "Act"),  and the declaration or ordering of  effectiveness  of
                  such registration statement or document;

                           (ii)  the term  "Registrable  Securities"  means  any
                  Common  Shares  issuable  pursuant to the grant of  Restricted
                  Stock or pursuant to the exercise of Stock Options.

                           (iii) the term  "Form  S-8" means such form under the
                  Act  as  in  effect  on  the  date  hereof  or  any  successor
                  registration statement form under the Act subsequently adopted
                  by the  Securities and Exchange  Commission  (the "SEC") which
                  permits inclusion or incorporation of substantial  information
                  by reference or other  documents filed by the Company with the
                  SEC to the same extent as Form S-8 on the date hereof.

                           (b) Form S-8 Registration.  The Company shall use its
best efforts to effect as soon as practicable  the  registration  on Form S-8 of
all Common Shares issuable pursuant to awards of Restricted Stock or pursuant to
exercise  of  Stock  options   granted   hereunder  in   connection   with  such
registration, the Company shall, as expeditiously as reasonably practicable:

                           (i)  Prepare and file with the SEC within 180 days of
                  the Company's initial public offering, a Form S-8 registration
                  statement with respect to the Registrable Securities,  and use
                  its best  efforts  to cause  such  registration  statement  to
                  become  effective  and to  keep  such  registration  statement
                  effective  until the  resale  restrictions  under the Form S-8
                  registration  statement  for all  shares of  Restricted  Stock
                  granted  hereunder  are no longer in effect and the earlier to
                  occur  of (A)  the  issuance  of  all  shares  authorized  for
                  issuance  hereunder,  or (B) the exercise in full of all Stock
                  Options awarded hereunder which shall have been outstanding on
                  the date this Plan shall  terminate,  or (C) the expiration of
                  the unexercised portion of all Stock Options awarded hereunder
                  which shall have been  outstanding on the date this Plan shall
                  terminate.

                           (ii)  Prepare  and file with the SEC such  amendments
                  and supplements and appendices to such registration  statement
                  and to amend and supplement the prospectus  used in connection
                  with such registration statement as may be necessary to comply
                  with the  provisions  of the Act with  respect to the grant of
                  the  issuance of the  Registrable  Securities  covered by such
                  registration statement.

                           (iii)  Prepare  and  file  with  the New  York  Stock
                  Exchange,   Inc.  (the   "Exchange")  an  additional   listing
                  application for the listing, upon official notice of issuance,
                  of such Registrable Securities for trading on the Exchange and
                  use  its  best  efforts  to  cause  such  additional   listing
                  application to be approved by the Exchange.

                           (c)  Expenses.  All expenses  incurred in  connection
with the registration,  filings and listing application  described in clause (b)
of  this  Paragraph  21  shall  be  borne  by the  Company,  including  (without
limitation) all registration and filing fees, printers, and accounting fees, and
fees and disbursements for counsel for the Company.

                  22. Shareholder  Adoption.  The Plan shall be submitted to the
shareholders  of the Company for their  approval and adoption at a meeting to be
held on or before May 30, 1993 or at any adjournment thereof. The Plan shall not
be effective and no Award shall be made hereunder  unless and until the Plan has
been so approved and adopted.  The shareholders shall be deemed to have approved
and  adopted  the Plan only if it is  approved  and  adopted at a meeting of the
shareholders duly held by vote taken, or approved and adopted by written consent
of shareholders, in each case in the manner required by the laws of the State of
Delaware.