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                             1995 STOCK OPTION PLAN
                                FOR KEY EMPLOYEES

                                       OF

                             THE CALDOR CORPORATION
                        (as amended on October 31, 1996)

            1. PURPOSES OF THE PLAN. This stock option plan (the "Plan") is
designed to provide an incentive to key employees (other than directors) of The
Caldor Corporation, a Delaware corporation (the "Company"), and its present and
future subsidiary corporations, as defined in Paragraph 19 ("Subsidiaries"), and
to offer an additional inducement in obtaining the services of such individuals.
The Plan provides for the grant of "incentive stock options" ("ISOs") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and nonqualified stock options ("NQSOs"), but the Company makes no
warranty as to the qualification of any option as an "incentive stock option"
under the Code. The options granted pursuant to this Plan are a matter of
separate inducement and are not in lieu of any salary or other compensation for
the services of key employees.

            2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Paragraph
12, the aggregate number of shares of Common Stock, $.01 par value per share, of
the Company ("Common Stock") for which options may be granted under the Plan
shall not exceed 400,000. Such shares of Common Stock may, in the discretion of
the Board of Directors of the Company (the "Board of Directors"), consist either
in whole or in part of authorized but unissued shares of Common Stock or shares
of Common Stock held in the treasury of the Company. The Company shall at all
times during the term of the Plan reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of the
Plan. Subject to the provisions of Paragraph 13, any shares of Common Stock
subject to an option which for any reason expires, is cancelled or is terminated
unexercised or which ceases for any reason to be exercisable shall again become
available for the granting of options under the Plan.

            3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Board of Directors or, to the extent the Board of Directors may determine, a
committee of the Board of Directors consisting of not less than two directors
(or such greater number as may be required by law) each of whom shall be a
"non-employee director" (the "Committee"), all within the meaning of Rule 16b-3
(or any successor rule or regulation) promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). References in the Plan to
determinations or actions by the Committee shall be deemed to include
determinations and actions by the Board of Directors. A majority of the members
of the Committee shall constitute a quorum, and the acts of a majority of the
members present at any meeting at which a quorum is present, and any acts
approved in writing by all members without a meeting, shall be the acts of the
Committee.
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            Subject to the express provisions of the Plan, the Committee shall
have the authority, in its sole discretion, to determine the key employees who
shall receive options; the times when they shall receive options; whether an
option shall be an ISO or a NQSO; the number of shares of Common Stock to be
subject to each option; the term of each option; the date each option shall
become exercisable; whether an option shall be exercisable in whole, in part or
in installments, and, if in installments, the number of shares of Common Stock
to be subject to each installment; whether the installments shall be cumulative;
the date each installment shall become exercisable and the term of each
installment; whether to accelerate the date of exercise of any installment;
whether shares of Common Stock may be issued on exercise of an option as partly
paid, and, if so, the dates when future installments of the exercise price shall
become due and the amounts of such installments; the exercise price of each
option; the form of payment of the exercise price; the fair market value of a
share of Common Stock; the amount, if any, necessary to satisfy the Company's
obligation to withhold taxes or other amounts; whether to restrict the sale or
other disposition of the shares of Common Stock acquired upon the exercise of an
option and to waive any such restriction; whether to subject the exercise of all
or any portion of an option to the fulfillment of contingencies as specified in
the contract referred to in Paragraph 11 (the "Contract"), including without
limitations, contingencies relating to entering into a covenant not to compete
with the Company and its Parent (as defined in Paragraph 19) and Subsidiaries,
to financial objectives for the Company, a Subsidiary, a division, a product
line or other category, and/or the period of continued employment of the
optionee with the Company or its Subsidiaries, and to determine whether such
contingencies have been met; to construe the respective Contracts and the Plan;
with the consent of the optionee, to cancel or modify an option, provided such
option as modified would be permitted to be granted on such date under the terms
of the Plan; to prescribe, amend and rescind rules and regulations relating to
the Plan; and to make all other determinations necessary or advisable for
administering the Plan. The determinations of the Committee on the matters
referred to in this Paragraph 3 shall be conclusive.

            The Committee may employ such legal counsel, consultants and agents
as it may deem desirable for the administration of the Plan and may rely upon
any opinion or computation received from any such counsel, consultant or agent.
Expenses incurred by the Committee in the engagement of such counsel, consultant
or agent shall be paid by the Company. No member or former member of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted hereunder.

            4. ELIGIBILITY. The Committee may, consistent with the purposes of
the Plan, grant options from time to time, to key employees of the Company or
any of its Subsidiaries; provided, however, that directors of the Company
(including directors who are employees of the Company or its Subsidiaries) are
not eligible to receive grants under the Plan. Options granted shall cover such
number of shares of Common Stock as the Committee may determine; provided,
however, that the maximum number of shares of Common Stock subject to options
which may be granted to any person under the Plan in any fiscal year of the
Company shall not exceed 250,000; and further provided that the aggregate market
value (determined at the time the option is granted) of the shares of Common
Stock for which any eligible person may be


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granted ISOs under the Plan or any other plan of the Company, or of a Parent or
a Subsidiary of the Company, which are exercisable for the first time by such
optionee during any calendar year shall not exceed $100,000. The $100,000 ISO
limitation shall be applied by taking ISOs into account in the order in which
they were granted. Any option (or the portion thereof) granted in excess of such
amount shall be treated as a NQSO.

            5. EXERCISE PRICE. The exercise price of the shares of Common Stock
under each option shall be determined by the Committee; provided, however, that
the exercise price of an ISO shall not be less than 100% of the fair market
value of the Common Stock subject to such option on the date of grant; and
further provided, that if, at the time an ISO is granted, the optionee owns (or
is deemed to own under 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,
of any of its Subsidiaries or of a Parent, the exercise price of such ISO shall
not be less than 110% of the fair market value of the Common Stock subject to
such ISO on the date of grant.

            The fair market value of a share of Common Stock on any day shall be
(a) if the principal market for the Common Stock is a national securities
exchange, the average between the high and low sales prices per share of the
Common Stock on such day as reported by such exchange or on a consolidated tape
reflecting transactions on such exchange, (b) if the principal market for the
Common Stock is not a national securities exchange and the Common Stock is
quoted on the National Association of Securities Dealers Automated Quotations
System ("NASDAQ"), and (i) if actual sales price information is available with
respect to the Common Stock, the average between the high and low sales prices
per share of the Common Stock on such day on NASDAQ, or (ii) if such information
is not available, the average between the highest bid and the lowest asked
prices per share for the Common Stock on such day on NASDAQ, or (c) if the
principal market for the Common Stock is not a national securities exchange and
the Common Stock is not quoted on NASDAQ, the average between the highest bid
and lowest asked prices per share for the Common Stock on such day as reported
on the NASDAQ OTC Bulletin Board Service or by National Quotation Bureau,
Incorporated or a comparable service; provided that if clauses (a), (b) and (c)
of this Paragraph are all inapplicable, or if no trades have been made or no
quotes are available for such day, the fair market value of the Common Stock
shall be determined by the Committee by any method consistent with applicable
regulations adopted by the Treasury Department relating to stock options.

            6. TERM. The term of each option granted pursuant to the Plan shall
be such term as is established by the Committee, in its sole discretion, at or
before the time such option is granted; provided, however, that the term of each
ISO granted pursuant to the Plan shall be for a period not exceeding 10 years
from the date of grant thereof, and further, provided, that if, at the time an
ISO is granted, the optionee owns (or is deemed to own under 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, of any of its Subsidiaries or of a Parent,
the term of the ISO shall be for a period not exceeding five years from the date
of grant. Options shall be subject to earlier termination as hereinafter
provided.


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            7. EXERCISE. An option (or any part or installment thereof), to the
extent then exercisable, shall be exercised by giving written notice to the
Company at its principal office (at present 20 Glover Avenue, Norwalk,
Connecticut 06852, Attn: Compensation Committee), stating which ISO or NQSO is
being exercised, specifying the number of shares of Common Stock as to which
such option is being exercised and accompanied by payment in full of the
aggregate exercise price therefor (or the amount due on exercise if the Contract
permits installment payments) (a) in cash or by certified check or (b) with the
authorization of the Committee, with previously acquired shares of Common Stock
having an aggregate fair market value, on the date of exercise, equal to the
aggregate exercise price of all options being exercised, or with any combination
of cash, certified check or shares of Common Stock. In such case, the fair
market value of the Common Stock shall be determined in accordance with
Paragraph 5.

            A person entitled to receive Common Stock upon the exercise of an
option shall not have the rights of a stockholder with respect to such shares of
Common Stock until the date of issuance of a stock certificate to him for such
shares; provided, however, that until such stock certificate is issued, any
optionee using previously acquired shares of Common Stock in payment of an
option exercise price shall continue to have the rights of a stockholder with
respect to such previously acquired shares.

            In no case may a fraction of a share of Common Stock be purchased or
issued under the Plan.

            8. TERMINATION OF EMPLOYMENT. Except as may otherwise be expressly
provided in the applicable Contract, any optionee whose employment with the
Company (and its Parent and Subsidiaries) has terminated for any reason other
than his death or Disability (as defined in Paragraph 19) may exercise such
option, to the extent exercisable on the date of such termination, at any time
within three months after the date of termination, but not thereafter and in no
event after the expiration of the term of the option; provided, however, that if
his employment shall be terminated either (a) for cause, or (b) without the
consent of the Company, said option shall terminate immediately. Except as may
otherwise be expressly provided in the applicable Contract, Options granted
under the Plan shall not be affected by any change in the status of the holder
so long as he continues to be a full-time employee of the Company, its Parent or
any of the Subsidiaries (regardless of having been transferred from one
corporation to another).

            For the purposes of the Plan, an employment relationship shall be
deemed to exist between an individual and a corporation if, at the time of the
determination, the individual was an employee of such corporation for purposes
of Section 422(a) of the Code. As a result, an individual on military, sick
leave or other bona fide leave of absence shall continue to be considered an
employee for purposes of the Plan during such leave if the period of the leave
does not exceed 90 days, or, if longer, so long as the individual's right to
reemployment with the Company (or a related corporation) is guaranteed either by
statute or by contract. If the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed by statute or


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by contract, the employment relationship shall be deemed to have terminated on
the 91st day of such leave.

            Nothing in the Plan or in any option granted under the Plan shall
confer on any individual any right to continue in the employ of the Company, its
Parent or any of its Subsidiaries, or interfere in any way with the right of the
Company, its Parent or any of its Subsidiaries to terminate the employee's
employment at any time for any reason whatsoever without liability to the
Company, its Parent or any of its Subsidiaries.

            9. DEATH OR DISABILITY OF AN OPTIONEE. Except as may otherwise be
expressly provided in the applicable Contract, if an optionee dies (a) while he
is employed by the Company, its Parent or any of its Subsidiaries, (b) within
three months after the termination of his employment (unless such termination
was for cause or without the consent of the Company) or (c) within one year
following the termination of his employment by reason of Disability, the option
may be exercised, to the extent exercisable on the date of his death, by his
executor, administrator or other person at the time entitled by law to his
rights under such option, at any time within one year after death, but not
thereafter and in no event after the expiration of the term of the option.

            Except as may otherwise be expressly provided in the applicable
Contract, any optionee whose employment has terminated by reason of Disability
may exercise his option, to the extent exercisable upon the effective date of
such termination, at any time within one year after such date, but not
thereafter and in no event after the expiration of the term of the option.

            10. COMPLIANCE WITH SECURITIES LAWS. The Committee may require, in
its discretion, as a condition to the exercise of any option that either (a) a
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the shares of Common Stock to be issued upon
such exercise shall be effective and current at the time of exercise, or (b)
there is an exemption from registration under the Securities Act for the
issuance of shares of Common Stock upon such exercise. Nothing herein shall be
construed as requiring the Company to register under the Securities Act the
shares subject to any option.

                  The Committee may require the optionee to execute and deliver
to the Company his representations and warranties, in form and substance
satisfactory to the Committee, that (a) the shares of Common Stock to be issued
upon the exercise of the option are being acquired by the optionee for his own
account, for investment only and not with a view to the resale or distribution
thereof, and (b) any subsequent resale or distribution of shares of Common Stock
by such optionee will be made only pursuant to (i) a Registration Statement
under the Securities Act which is effective and current with respect to the
shares of Common Stock being sold, or (ii) a specific exemption from the
registration requirements of the Securities Act, but in claiming such exemption,
the optionee shall prior to any offer of sale or sale of such shares of Common
Stock provide the Company with a favorable written opinion of counsel, in form
and substance satisfactory to the Company, as to the applicability of such
exemption to the proposed


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sale or distribution. The foregoing restriction, however, shall not apply with
respect to (x) issuances by the Company so long as the shares of Common Stock
being issued are registered under the Securities Act and a prospectus in respect
thereof is current, (y) reofferings of shares of Common Stock by persons who
are not affiliates (as defined in Rule 405 or any successor rule or regulation
promulgated under the Securities Act) of the Company if the shares of Common
Stock were so registered, or (z) reofferings of shares of Common Stock by
affiliates (as defined in Rule 405 or any successor rule or regulation
promulgated under the Securities Act) of the Company if the shares being
reoffered are registered for reoffer under the Securities Act and a prospectus
in respect thereof is current.

            In addition, if at any time the Committee shall determine in its
discretion that the listing or qualification of the shares of Common Stock
subject to such option on any securities exchange or under any applicable law,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of an option,
or the issue of shares of Common Stock thereunder, such option may not be
exercised in whole or in part unless such listing, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.

            11. STOCK OPTION CONTRACTS. Each option shall be evidenced by an
appropriate Contract which shall be duly executed by the Company and the
optionee and shall contain such terms and conditions not inconsistent herewith
as may be determined by the Committee.

            12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Not withstanding any
other provisions of the Plan, in the event of any change in the outstanding
Common Stock by reason of a stock dividend, recapitalization, merger in which
the Company is the surviving corporation, split-up, combination or exchange of
shares or the like, the aggregate number and kind of shares subject to the Plan,
the aggregate number and kind of shares subject to each outstanding option and
the exercise price thereof and the maximum number and kind of shares as to which
options may be granted to any person in any fiscal year shall be appropriately
adjusted by the Board of Directors, whose determination shall be conclusive.

            In the event of (a) the liquidation or dissolution of the Company,
(b) a merger in which the Company is not the surviving corporation or a
consolidation, or (c) any other capital reorganization in which more than 50% of
the shares of Common Stock of the Company entitled to vote are exchanged, any
outstanding options shall terminate, unless other provision is made therefor in
the transaction.

            13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by
the Board of Directors on February 22, 1995 and amended by the Board of
Directors on October 31, 1996. No option may be granted under the Plan after
February 21, 2005. The Board of Directors, without further approval of the
Company's stockholders, may at any time suspend or terminate the Plan, in whole
or in part, or amend it from time to time in such respects


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as it may deem advisable, including, without limitation, in order that ISOs
granted hereunder meet the requirements for "incentive stock options" under the
Code, to comply with the provisions of Section 162(m) of the Code or Rule 16b-3
promulgated under the Exchange Act, and to conform to any change in applicable
law or to regulations or rulings of administrative agencies; provided, however,
that no amendment shall be effective without the requisite prior or subsequent
stockholder approval which would (a) except as contemplated in Paragraph 12,
increase the maximum number of shares of Common Stock for which options may be
granted under the Plan or the maximum number of shares as to which options may
be granted to any person in any fiscal year, (b) materially increase the
benefits to participants under the Plan or (c) change the eligibility
requirements for individuals entitled to receive options hereunder. No
termination, suspension or amendment of the Plan shall, without the consent of
the holder of an existing option affected thereby, adversely affect his rights
under such option. The power of the Committee to construe and administer any
options granted under the Plan prior to the termination or suspension of the
Plan nevertheless shall continue after such termination or during such
suspension.

            14. NON-TRANSFERABILITY OF OPTIONS. No option granted under the Plan
shall be transferable otherwise than by will or the laws of descent and
distribution, and options may be exercised, during the lifetime of the holder
thereof, only by him or his legal representatives. Except to the extent provided
above, options may not be assigned, transferred, pledged, hypothecated or
disposed of in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process.

            15. WITHHOLDING TAXES. The Company may withhold cash and/or, with
the authorization of the Committee, shares of Common Stock to be issued with
respect thereto having an aggregate fair market value equal to the amount which
it determines is necessary to satisfy its obligation to withhold Federal, state
and local income taxes or other taxes incurred by reason of the grant or
exercise of an option, its disposition, or the disposition of the underlying
shares of Common Stock. Alternatively, the Company may require the holder to pay
to the Company such amount, in cash, promptly upon demand. The Company shall not
be required to issue any shares of Common Stock pursuant to any such option
until all required payments have been made. Fair market value of the shares of
Common Stock shall be determined in accordance with Paragraph 5.

            Notwithstanding anything in the Plan or in any Contract to the
contrary, the Company may not withhold shares of Common Stock to satisfy the tax
withholding consequences of the exercise of an option by a holder who is subject
to the reporting requirements of Section 16(a) of the Exchange Act (as it
constitutes a deemed exercise of a stock appreciation right ("SAR") under Rule
16b-3 under the Exchange Act), unless (a) the Company has filed all periodic
reports and statements required to be filed by it pursuant to Section 13(a) of
the Exchange Act for at least one year prior to the date of such exercise, (b)
the Company on a regular basis releases for publication quarterly and annual
summary statements of sales and earnings in the manner contemplated in the rules
promulgated under Section 16 of the Exchange Act, (c) except when the date of
exercise of such SAR is automatic or fixed in advance under the Plan and is
outside


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the control of the holder, the election by the holder to receive cash in full or
partial settlement of the SAR, as well as the exercise of the SAR for cash, is
made during the period beginning on the third business day following the date of
release of the summary statements referred to in clause (b) and ending on the
12th business day following such date, and (d) the option has been held for at
least six months from the date of grant to the date of cash settlement.

            16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such
legend or legends upon the certificates for shares of Common Stock issued upon
exercise of an option under the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such shares as it determines,
in its discretion, to be necessary or appropriate to (a) prevent a violation of,
or to perfect an exemption from, the registration requirements of the Securities
Act, (b) implement the provisions of the Plan or any agreement between the
Company and the optionee with respect to such shares of Common Stock, or (c)
permit the Company to determine the occurrence of a "disqualifying disposition,"
as described in Section 421(b) of the Code, of the shares of Common Stock
transferred upon the exercise of an ISO granted under the Plan.

            The Company shall pay all issuance taxes with respect to the
issuance of shares of Common Stock upon the exercise of an option granted under
the Plan, as well as all fees and expenses incurred by the Company in connection
with such issuance.

            17. USE OF PROCEEDS. The cash proceeds from the sale of shares of
Common Stock pursuant to the exercise of options under the Plan shall be added
to the general funds of the Company and used for its general corporate purposes.

            18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN CONSTITUENT
CORPORATIONS. Anything in this Plan to the contrary notwithstanding, the Board
of Directors may, without further approval by the stockholders, substitute new
options for prior options of a Constituent Corporation (as defined in Paragraph
19) or assume the prior options of such Constituent Corporation.

            19. DEFINITIONS.

                  (a) Subsidiary. The term "Subsidiary" shall have the same
definition as "subsidiary corporation" in Section 424(f) of the Code.

                  (b) Parent. The term "Parent" shall have the same definition
as "parent corporation" in Section 424(e) of the Code.

                  (c) Constituent Corporation. The term "Constituent
Corporation" shall mean any corporation which engages with the Company, its
Parent or any Subsidiary in a transaction to which Section 424(a) of the Code
applies (or would apply if the option assumed or substituted were an ISO), or
any Parent or any Subsidiary of such corporation.


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                  (d) Disability. The term "Disability" shall mean a permanent
and total disability within the meaning of Section 22(e)(3) of the Code.

            20. GOVERNING LAW. The Plan, such options as may be granted
hereunder and all related matters shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to conflict
of law provisions.

            21. PARTIAL INVALIDITY. The invalidity or illegality of any
provision herein shall not affect the validity of any other provision.

            22. STOCKHOLDER APPROVAL. The Plan shall be subject to approval by a
majority of the votes cast at the next meeting of the stockholders of the
Company at which a majority of the outstanding voting shares are present, in
person or by proxy, and voting on the amendment. No options granted hereunder
may be exercised prior to such approval, provided that the date of grant of any
options granted hereunder shall be determined as if the Plan had not been
subject to such approval. Notwithstanding the foregoing, if the Plan is not
approved by a vote of the stockholders of the Company on or before February 21,
1996, the Plan and any options granted pursuant to the Plan shall terminate.


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