Document:

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                                                                    Exhibit 10.1

                              EMPLOYMENT AGREEMENT

                          DATED AS OF JANUARY 31, 2000

                BETWEEN ARNOLD BARRON AND THE TJX COMPANIES, INC.

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                                   INDEX                                    PAGE
                                   -----                                    ----

1.  EFFECTIVE DATE; TERM OF AGREEMENT .....................................   1

2.  SCOPE OF EMPLOYMENT ...................................................   1

3.  COMPENSATION AND BENEFITS .............................................   2

4.  TERMINATION OF EMPLOYMENT; IN GENERAL .................................   4

5.  BENEFITS UPON NON-VOLUNTARY TERMINATION OF EMPLOYMENT OR
      UPON EXPIRATION OF THE AGREEMENT ....................................   4

6.  OTHER TERMINATION; VIOLATION OF CERTAIN AGREEMENTS ....................   7

7.  BENEFITS UPON CHANGE IN CONTROL .......................................   7

8.  AGREEMENT NOT TO SOLICIT OR COMPETE ...................................   8

9.  ASSIGNMENT ............................................................   9

10. NOTICES ...............................................................   9

11. CERTAIN EXPENSES ......................................................   9

12. WITHHOLDING ...........................................................   9

13. GOVERNING LAW .........................................................   9

14. ARBITRATION ...........................................................   9

15. ENTIRE AGREEMENT ......................................................  10

EXHIBIT A

         Certain Definitions .............................................. A-1

EXHIBIT B

         Definition of "Change of Control" ................................ B-1

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EXHIBIT C

         Change of Control Benefits.......................................  C-1

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                                                            ARNOLD BARRON

                              EMPLOYMENT AGREEMENT

     AGREEMENT dated as of January 31, 2000 between ARNOLD BARRON of 4 Seneca
Road, Canton, MA 02021 ("Executive") and The TJX Companies, Inc., a Delaware
corporation whose principal office is in Framingham, Massachusetts 01701 (the
"Company").

                                    RECITALS

     The Company and Executive intend that Executive shall serve the Company as
a Senior Vice President of the Company and as Executive Vice President, Chief
Operating Officer of the Marmaxx Group of the Company (the "Group") on the terms
set forth below and, to that end, deem it desirable and appropriate to enter
into this Agreement.

                                    AGREEMENT

     The parties hereto, in consideration of the mutual agreements hereinafter
contained, agree as follows:

     1. EFFECTIVE DATE; TERM OF AGREEMENT. This Agreement shall become effective
as of January 31, 2000 (the "Effective Date"). Executive's employment shall
continue on the terms provided herein until January 31, 2004 (the "End Date"),
subject to earlier termination as provided herein (such period of employment
hereinafter called the "Employment Period").

     2. SCOPE OF EMPLOYMENT.

     (a) NATURE OF SERVICES. Executive shall diligently perform the duties and
responsibilities of Executive Vice President, Chief Operating Officer of the
Group and of Senior Vice President of the Company and such additional executive
duties and responsibilities as shall from time to time be assigned to him by the
President or the Chairman of the Group.

     (b) EXTENT OF SERVICES. Except for illnesses and vacation periods,
Executive shall devote substantially all his working time and attention and his
best efforts to the performance of his duties and responsibilities under this
Agreement. However, Executive may (i) make any

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passive investments where he is not obligated or required to, and shall not in
fact, devote any managerial efforts, (ii) participate in charitable or community
activities or in trade or professional organizations, or (iii) subject to Board
approval (which approval shall not be unreasonably withheld or withdrawn), hold
directorships in public companies, except only that the Board shall have the
right to limit such services as a director or such participation whenever the
Board shall believe that the time spent on such activities infringes in any
material respect upon the time required by Executive for the performance of his
duties under this Agreement or is otherwise incompatible with those duties.

     3. COMPENSATION AND BENEFITS.

     (a) BASE SALARY. Executive shall be paid a base salary of not less than
$9,615.30 per week ($500,000.28 per year). Executive's base salary shall be
reviewed by May 28, 2001 and thereafter at least annually and may be increased
but not decreased. Executive's base salary shall be paid in the same manner and
at the same times as the Company shall pay base salary to other executive
employees.

     (b) EXISTING AWARDS UNDER 1986 STOCK INCENTIVE PLAN (INCLUDING LRPIP).
Reference is made to the following awards previously made to Executive under the
Company's 1986 Stock Incentive Plan (including any successor, the "1986 Plan"),
including awards under the Long Range Performance Incentive Plan:

          (i) EXISTING OPTIONS: Grant Nos. 86-49, 86-53, 86-55 and 86-56 (also
     Grant Nos. 86-57 and 86-58 awarded in September 2000); and

          (ii) EXISTING RESTRICTED STOCK: 25,000 shares granted in September
     1999, scheduled to vest over three years; and

          (iii) LRPIP: Awards made prior to the date of this Agreement under the
     terms of LRPIP. For the avoidance of doubt, the parties hereto acknowledge
     and agree that (i) for the FYE 1998-2000 cycle, the performance measures
     applicable to Executive's award were based on Corporate TJX performance;
     (ii) for the FYE 1999-2001 cycle (total target bonus $160,000), the
     performance measures applicable to Executive's award are based on Corporate
     TJX performance; and (iii) for the FYE 2000-2002 cycle, performance for the
     first year of the cycle is based on Corporate TJX performance and
     performance for the second and third years of the cycle will be based on
     Group performance.

Each of the above-referenced awards shall continue for such period or periods
and in accordance with such terms as are set out in the grant and other
governing documents relating to such awards and shall not be affected by the
terms of this Agreement except as otherwise expressly provided herein.

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     (c) NEW STOCK AWARDS. Consistent with the terms of the 1986 Plan, Executive
will be entitled to awards under the 1986 Plan at levels commensurate with his
position and responsibilities but not less than 50,000 stock options annually,
beginning in 2000 (FYE 2001).

     (d) LRPIP. During the Employment Period, Executive will be eligible to
participate in annual grants under LRPIP. To the extent provided in Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), the terms
of any such award shall be established by the Committee. Subject to the
foregoing, Executive's target award for the FYE 2001-2003 cycle under LRPIP will
be $225,000 with a maximum award opportunity equal to $337,500, with the payment
potential ranging from zero dollars to $337,500; and Executive's target award
for subsequent LRPIP cycles will be not less than 45% of his Base Salary as in
effect at the beginning of the cycle and his maximum award opportunity for such
cycle will be not less than 67.5% of such Base Salary, with the payment
potential ranging from 0% to not less than 67.5% of such Base Salary. Payments,
if any, under LRPIP awards under this subsection will be based on Group
performance measures. To the extent the material terms of LRPIP are required to
be approved by stockholders, Executive's eligibility to receive awards under
LRPIP for any cycle to which such stockholder vote pertains shall be subject to
such stockholder approval.

     (e) MIP. During the Employment Period, Executive shall be eligible to
receive annual awards under the Company's Management Incentive Plan ("MIP"). To
the extent provided in Section 162(m) of the Code, the goals, scope and
conditions of any award shall be established annually by the Committee. Subject
to the foregoing, Executive's target award for each such award will be not less
than 45% of Executive's Base Salary for the year with a maximum award
opportunity of not less than 90% of such Base Salary, with the payment potential
ranging from 0% to not less than 90% of such Base Salary. Payments, if any,
under MIP awards under this subsection will be based on Group performance
measures. To the extent the material terms of MIP are required to be approved by
stockholders, Executive's eligibility to receive annual awards under MIP for any
year to which such stockholder vote pertains shall be subject to such
stockholder approval.

     (f) SERP. Except as provided in Exhibit C ("Change of Control Benefits")
and this subsection (f), Executive is entitled to Category B benefits determined
and made payable in accordance with the generally applicable provisions of the
Company's Supplemental Executive Retirement Plan; provided, that Executive shall
at all times have a fully vested right to his accrued benefit, including any
future accruals, under SERP based on his actual years of service.

     (g) ESP. Executive shall be entitled to participate in the Company's
Executive Savings Plan ("ESP") subject to the terms thereof; provided, that
Executive shall not be eligible to share in any matching credit amounts under
the ESP.

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     (h) QUALIFIED PLANS. Executive shall be entitled during the Employment
Period to participate in the Company's tax-qualified retirement and
profit-sharing plans in accordance with the terms of those plans.

     (i) POLICIES AND FRINGE BENEFITS. Executive shall be subject to Company
policies applicable to its executives generally and shall be entitled to receive
all such fringe benefits as the Company shall from time to time make available
to other executives generally (subject to the terms of any applicable fringe
benefit plan). Without limiting the foregoing, Executive shall be entitled
during the Employment Period and thereafter to the extent provided herein to a
Level 5 leased automobile.

     4. TERMINATION OF EMPLOYMENT; IN GENERAL.

     (a) The Company shall have the right to end Executive's employment at any
time and for any reason, with or without Cause.

     (b) The Employment Period shall terminate when Executive becomes Disabled.
In addition, if by reason of Incapacity Executive is unable to perform his
duties for at least six continuous months, upon written notice by the Company to
Executive the Employment Period will be terminated for Incapacity.

     (c) Whenever the Employment Period terminates, Executive shall resign all
offices or other positions he shall hold with the Company and any affiliated
corporations.

     5. BENEFITS UPON NON-VOLUNTARY TERMINATION OF EMPLOYMENT OR UPON EXPIRATION
OF THE AGREEMENT.

     (a) CERTAIN TERMINATIONS PRIOR TO THE END DATE. If the Employment Period
shall have terminated prior to the End Date by reason of (i) death, Disability
or Incapacity of Executive, (ii) termination by the Company for any reason other
than Cause or (iii) termination by Executive in the event that Executive is
required to report other than to the President or the Chairman of the Group or
is relocated more than 40 miles from the current corporate headquarters of the
Company, in either case without his prior written consent (a "Constructive
Termination"), then all compensation and benefits for Executive shall be as
follows:

          (i) For the longer of twelve (12) months after such termination or
     until the End Date (the "termination period"), the Company will pay to
     Executive or his legal representative continued Base Salary at the rate in
     effect at termination of employment, subject to the following:

               (A) If Executive is eligible for long-term disability
          compensation benefits under the Company's long-term disability plan or
          any successor Company long-term disability plan, the amount payable
          under this clause shall

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          be paid at a rate equal to the excess of (I) the rate of Base Salary
          in effect at termination of employment, over (II) the long-term
          disability compensation benefits for which Executive is eligible under
          such plan.

               (B) Payments pursuant to this clause (a)(i) shall be paid for the
          first twelve months of the termination period without reduction for
          compensation earned from other employment or self-employment, and
          shall thereafter be reduced by such compensation received by Executive
          from other employment or self-employment.

          (ii) Until the expiration of the termination period as defined at
     (a)(i) above and subject to such minimum coverage-continuation requirements
     as may be required by law, the Company will provide (except to the extent
     that Executive shall obtain the same from another employer or from
     self-employment) such medical and hospital insurance, long-term disability
     insurance and term life insurance for Executive and his family, comparable
     to the insurance provided for executives generally, as the Company shall
     determine, and upon the same terms and conditions as the same shall be
     provided for other Company executives generally; provided, however, that in
     no event shall such benefits or the terms and conditions thereof be less
     favorable to Executive than those afforded to him as of the date of
     termination. To the extent reasonably practicable under the Company's group
     health plans, the period of any so-called "COBRA" coverage continuation
     under such plans to which Executive may be entitled by reason of a
     termination described in this Section 5(a) shall commence at the expiration
     of the termination period as defined at (a)(i) above rather than upon
     termination of Executive's employment with the Company; but nothing herein
     shall be construed as requiring the Company to defer the date as of which
     Executive ceases to be an employee.

          (iii) The Company will pay to Executive or his legal representative,
     without offset for compensation earned from other employment or
     self-employment, (A) any amounts to which Executive is entitled under MIP
     for the fiscal year of the Company ended immediately prior to Executive's
     termination of employment, plus (B) any unpaid amounts owing with respect
     to LRPIP cycles in which Executive participated and which were completed
     prior to termination. These amounts will be paid at the same time as other
     awards for such prior year or cycle are paid.

          (iv) The Company will pay to Executive or his legal representative,
     without offset for compensation earned from other employment or
     self-employment, an amount in the nature of severance equal to the sum of
     (A) Executive's MIP Target Award, if any, for the year of termination,
     prorated for Executive's service during such year prior to termination,
     plus (B) in the event of a termination by reason of death, Disability, or
     Incapacity (but not in any other case), an additional amount equal to
     Executive's MIP Target Award for the year of termination, without
     proration, plus (C) with respect to each LRPIP cycle in which Executive
     participated and which had not ended prior to

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     termination of employment, 1/36 of an amount equal to Executive's LRPIP
     Target Award for such cycle multiplied by the number of full months in such
     cycle completed prior to termination of employment. The severance component
     described in clauses (a)(iv)(A) and (if applicable) (a)(iv)(B) above will
     be paid not later than MIP awards for the year of termination are paid. The
     severance component described in clause (a)(iv)(C) above, to the extent
     measured by the LRPIP Target Award for any cycle, will be paid not later
     than the date on which LRPIP awards for such cycle are paid or would have
     been paid. In no event shall the severance described in this paragraph be
     treated as paid under MIP or LRPIP.

          (v) In addition, the Company will pay to Executive or his legal
     representative such vested amounts as shall have been deferred for
     Executive's account (but not received) under GDCP in accordance with its
     terms plus such amounts, if any, as shall then remain credited to
     Executive's account under ESP.

          (vi) Executive or his legal representative shall be entitled to the
     benefits described in Sections 3(b)(i) (Existing Options), Section 3(c)
     (New Stock Awards), 3(f) (SERP), and 3(h) (Qualified Plans).

          (vii) If termination occurs by reason of Incapacity or Disability,
     Executive shall also be entitled to such compensation, if any, as is
     payable pursuant to the Company's long-term disability plan or any
     successor Company disability plan. If for any period Executive receives
     long-term disability compensation payments under a long-term disability
     plan of the Company as well as payments under (a)(i) above, and if the sum
     of such payments (the "combined salary/disability benefit") exceeds the
     payment for such period to which Executive is entitled under (a)(i) above
     (determined without regard to paragraph (A) thereof), he shall promptly pay
     such excess in reimbursement to the Company; provided, that in no event
     shall application of this sentence result in reduction of Executive's
     combined salary/disability benefit below the level of long-term disability
     compensation payments to which Executive is entitled under the long-term
     disability plan or plans of the Company.

     (b) TERMINATIONS ON OR AFTER THE END DATE. Unless earlier terminated or
except as otherwise mutually agreed by Executive and the Company, Executive's
employment with the Company shall terminate on the End Date. Unless the Company
in connection with such termination shall offer to Executive continued service
in a position acceptable to Executive and upon mutually and reasonably agreeable
terms, Executive shall be entitled upon such termination to receive, for the
one-year period following such termination, continuation of Base Salary at the
rate in effect at termination of employment plus medical, dental, life-insurance
and disability coverage (but not including continued participation in the
Company's retirement or 401(k) plan(s) or continued participation in SERP or any
other fringe benefit, other than a Company-provided automobile or automobile
allowance) comparable to the benefits of such type to which he was entitled at
time of termination; provided, that to the

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extent it is impossible or impracticable to provide any such benefits to
Executive under the Company's then existing employee benefit plans or
arrangements, the Company shall arrange for alternative comparable coverage or,
if such alternative coverage is not available, shall pay to Executive the cost
of such coverage, all as reasonably determined by the Committee. If the Company
in connection with such termination offers to Executive continued service in a
position acceptable to Executive and upon mutually and reasonably agreeable
terms, and Executive declines such service, he shall be treated for all purposes
of this Agreement as having terminated his employment voluntarily (other than
for Valid Reason) on the End Date and he shall be entitled only to those
benefits to which he would be entitled under Section 6(a) ("Voluntary
termination of employment"). For purposes of the two preceding sentences,
"service in a position acceptable to Executive" shall be deemed to mean service
as Executive Vice President, Chief Operating Officer of the Group or service in
such other position, if any, as may be acceptable to Executive.

     6. OTHER TERMINATION; VIOLATION OF CERTAIN AGREEMENTS.

          (a) VOLUNTARY TERMINATION OF EMPLOYMENT. If Executive terminates his
     employment voluntarily, Executive or his legal representative shall be
     entitled (in each case in accordance with and subject to the terms of the
     applicable arrangement) to the following: such vested amounts as are
     credited to Executive's account (but not received) under GDCP and ESP and
     any benefits described in Sections 3(b)(i) (Existing Options), Section 3(c)
     (New Stock Awards), 3(f) (SERP), and 3(h) (Qualified Plans). No other
     benefits shall be paid under this Agreement upon a voluntary termination of
     employment.

          (b) TERMINATION FOR CAUSE; VIOLATION OF CERTAIN AGREEMENTS. If the
     Company should end Executive's employment for Cause, or, notwithstanding
     Section 5 and Section 6(a) above, if Executive should violate the protected
     persons or noncompetition provisions of Section 8, all compensation and
     benefits otherwise payable pursuant to this Agreement shall cease, other
     than (x) such vested amounts as are credited to Executive's account (but
     not received) under GDCP and ESP in accordance with the terms of those
     programs; (y) any benefits to which Executive may be entitled under SERP
     (provided, that if Executive should end his employment voluntarily, such
     benefits shall be payable only if Executive does not violate the provisions
     of Section 8), and (z) benefits, if any, to which Executive may be entitled
     under Sections 3(b)(i) (Existing Options), 3(c) (New Stock Awards), and
     3(h) (Qualified Plans). The Company does not waive any rights it may have
     for damages or for injunctive relief.

     7. BENEFITS UPON CHANGE IN CONTROL. Notwithstanding any other provision of
this Agreement, in the event of a Change of Control, the determination and
payment of any benefits payable thereafter with respect to Executive shall be
governed exclusively by the provisions of Exhibit C.

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     8. AGREEMENT NOT TO SOLICIT OR COMPETE.

     (a) Upon the termination of employment at any time, then for a period of
two years after the termination of the Employment Period, Executive shall not
under any circumstances employ, solicit the employment of, or accept unsolicited
the services of, any "protected person" or recommend the employment of any
"protected person" to any other business organization. A "protected person"
shall be a person known by Executive to be employed by the Company or its
Subsidiaries or to have been employed by Company or its Subsidiaries within six
months prior to the commencement of conversations with such person with respect
to employment.

     As to (i) each "protected person" to whom the foregoing applies, (ii) each
subcategory of "protected person" as defined above, (iii) each limitation on (A)
employment, (B) solicitation and (C) unsolicited acceptance of services, of each
"protected person" and (iv) each month of the period during which the provisions
of this subsection (a) apply to each of the foregoing, the provisions set forth
in this subsection (a) are deemed to be separate and independent agreements and
in the events of unenforceability of any such agreement, such unenforceable
agreement shall be deemed automatically deleted from the provisions hereof and
such deletion shall not affect the enforceability of any other provision of this
subsection (a) or any other term of this Agreement.

     (b) During the course of his employment, Executive will have learned many
trade secrets of the Company and will have access to confidential information
and business plans for the Company. Therefore, upon termination of the
Employment Period on the End Date or if Executive should end his employment
voluntarily at any time, including by reason of retirement or disability but not
including a voluntary termination for Valid Reason, or if the Company should end
Executive's employment at any time for Cause, then for a period of two years
thereafter, Executive will not engage, either as a principal, employee, partner,
consultant or investor (other than a less-than-1% stock interest in a
corporation), in a business which is a competitor of the Company. A business
shall be deemed a competitor of the Company if and only (i) if it shall then be
so regarded by retailers generally or (ii) if it shall operate a promotional
off-price family apparel store within 10 miles of any "then existing T.J. Maxx
or Marshalls store" or (iii) if it shall operate an on-line, "e-commerce" or
other internet-based off-price family apparel business; provided, that a
business shall be deemed a competitor of the Company under clause (iii) only if
the Company is then also operating an on-line, "e-commerce" or other
internet-based off-price family apparel business. The term "then existing" in
the previous sentence shall refer to any such store that is, at the time of
termination of the Employment Period, operated by the Company or any
wholly-owned subsidiary of the Company or under lease for operation as
aforesaid. Nothing herein shall restrict the right of Executive to engage in a
business that operates a conventional or full mark-up department store.
Executive agrees that if, at any time, pursuant to action of any court,
administrative or governmental body or other arbitral tribunal, the operation of
any part of this paragraph shall be determined to be unlawful or otherwise
unenforceable, then the coverage of this paragraph

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shall be deemed to be restricted as to duration, geographical scope or
otherwise, to the extent, and only to the extent, necessary to make this
paragraph lawful and enforceable in the particular jurisdiction in which such
determination is made.

     (c) If the Employment Period terminates, Executive agrees (i) to notify the
Company immediately upon his securing employment or becoming self-employed
during any period when Executive's compensation from the Company shall be
subject to reduction or his benefits provided by the Company shall be subject to
termination as provided in Section 6 and (ii) to furnish to the Company written
evidence of his compensation earned from any such employment or self-employment
as the Company shall from time to time request. In addition, upon termination of
the Employment Period for any reason other than the death of Executive,
Executive shall immediately return all written trade secrets, confidential
information and business plans of the Company and shall execute a certificate
certifying that he has returned all such items in his possession or under his
control.

     9. ASSIGNMENT. The rights and obligations of the Company shall enure to the
benefit of and shall be binding upon the successors and assigns of the Company.
The rights and obligations of Executive are not assignable except only that
payments payable to him after his death shall be made by devise or descent.

     10. NOTICES. All notices and other communications required hereunder shall
be in writing and shall be given by mailing the same by certified or registered
mail, return receipt requested, postage prepaid. If sent to the Company the same
shall be mailed to the Company at 770 Cochituate Road, Framingham, Massachusetts
01701, Attention: Mark Jacobson, or other such address as the Company may
hereafter designate by notice to Executive; and if sent to the Executive, the
same shall be mailed to Executive at 4 Seneca Road, Canton, MA 02021 or at such
other address as Executive may hereafter designate by notice to the Company.

     11. CERTAIN EXPENSES. The Company shall bear the reasonable fees and costs
of Executive's legal and financial advisors (not to exceed $15,000 in the
aggregate) incurred in negotiating this Agreement.

     12. WITHHOLDING. Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to Executive shall be subject to
the withholding of such amounts, if any, relating to tax and other payroll
deductions as the Company may reasonably determine it should withhold pursuant
to any applicable law or regulation.

     13. GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereunder shall be governed by the laws of the Commonwealth of
Massachusetts.

     14. ARBITRATION. In the event that there is any claim or dispute arising
out of or relating to this Agreement, or the breach thereof, and the parties
hereto shall not have resolved

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such claim or dispute within 60 days after written notice from one party to the
other setting forth the nature of such claim or dispute, then such claim or
dispute shall be settled exclusively by binding arbitration in Boston,
Massachusetts in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association by an arbitrator
mutually agreed upon by the parties hereto or, in the absence of such agreement,
by an arbitrator selected according to such Rules. Notwithstanding the
foregoing, if either the Company or Executive shall request, such arbitration
shall be conducted by a panel of three arbitrators, one selected by the Company,
one selected by Executive and the third selected by agreement of the first two,
or, in the absence of such agreement, in accordance with such Rules. Judgment
upon the award rendered by such arbitrator(s) shall be entered in any Court
having jurisdiction thereof upon the application of either party.

     15. ENTIRE AGREEMENT. This Agreement, including Exhibits, represents the
entire agreement between the parties relating to the terms of Executive's
employment by the Company and supersedes all prior written or oral agreements
between them.

                                     /s/ Arnold Barron
                                     ------------------------------
                                         Executive

                                     THE TJX COMPANIES, INC.

                                     By /s/ Edmond J. English
                                        ----------------------------

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                                    EXHIBIT A

                              CERTAIN DEFINITIONS

     (a) "Base Salary" means, for any period, the amount described in
Section 3(a).

     (b) "Board" means the Board of Directors of the Company.

     (c) "Committee" means the Executive Compensation Committee of the Board.

     (d) "Cause" means dishonesty by Executive in the performance of his duties,
conviction of a felony (other than a conviction arising solely under a statutory
provision imposing criminal liability upon Executive on a per se basis due to
the Company offices held by Executive, so long as any act or omission of
Executive with respect to such matter was not taken or omitted in contravention
of any applicable policy or directive of the Board), gross neglect of duties
(other than as a result of Disability or death), or conflict of interest which
conflict shall continue for 30 days after the Company gives written notice to
Executive requesting the cessation of such conflict.

     In respect of any termination during a Standstill Period, Executive shall
not be deemed to have been terminated for Cause until the later to occur of (i)
the 30th day after notice of termination is given and (ii) the delivery to
Executive of a copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the Company's directors at a meeting called and held for
that purpose (after reasonable notice to Executive), and at which Executive
together with his counsel was given an opportunity to be heard, finding that the
Executive was guilty of conduct described in the definition of "Cause" above,
and specifying the particulars thereof in detail; provided, however, that the
Company may suspend Executive and withhold payment of his Base Salary from the
date that notice of termination is given until the earliest to occur of (A)
termination of Executive for Cause (in which case Executive shall not be
entitled to his Base Salary for such period), (B) a determination by a majority
of the Company's directors that Executive was not guilty of the conduct
described in the definition of "Cause" above (in which case Executive shall be
reinstated and paid any of his previously unpaid Base Salary for such period),
or (C) 90 days after notice of termination is given (in which case Executive
shall then be reinstated and paid any of his previously unpaid Base Salary for
such period). If Base Salary is withheld and then paid pursuant to clauses (B)
and (C) of the preceding sentence, the amount thereof shall be accompanied by
simple interest, calculated on a daily basis, at a rate per annum equal to the
prime or base lending rate, as in effect at the time, of the Company's principal
commercial bank.

     (c) "Change of Control" has the meaning given it in Exhibit B.

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     (f) "Change of Control Termination" means the termination of Executive's
employment during a Standstill Period (1) by the Company other than for Cause,
or (2) by Executive for good reason, or (3) by reason of death, Incapacity or
Disability.

     For purposes of this definition, termination for "good reason" shall mean
the voluntary termination by Executive of his employment (A) within 120 days
after the occurrence without Executive's express written consent of any one of
the events described in clauses (I), (II), (III), (IV), (V) or (VI) below,
provided that Executive gives notice to the Company at least 30 days in advance
requesting that the pertinent situation described therein be remedied, and the
situation remains unremedied upon expiration of such 30-day period; (B) within
120 days after the occurrence without Executive's express written consent of the
event described in clause (VII), provided that Executive gives notice to the
Company at least 30 days in advance of his intent to terminate his employment in
respect of such event; or (C) under the circumstances described in clause (VIII)
below, provided that Executive gives notice to the Company at least 30 days in
advance:

          (I)  the assignment to him of any duties inconsistent with his
               positions, duties, responsibilities, reporting requirements, and
               status with the Company immediately prior to the Change of
               Control, or any removal of Executive from or any failure to
               reelect him to such positions, except in connection with the
               termination of Executive's employment by the Company for Cause or
               by Executive other than for good reason, or any other action by
               the Company which results in a diminishment in such position,
               authority, duties or responsibilities, other than an
               insubstantial and inadvertent action which is remedied by the
               Company promptly after receipt of notice thereof given by
               Executive; or

          (II) if Executive's rate of Base Salary for any fiscal year is less
               than 100 percent of the rate of Base Salary paid to Executive in
               the completed fiscal year immediately preceding the Change of
               Control or if Executive's total cash compensation opportunities,
               including salary and incentives, for any fiscal year are less
               than 100 percent of the total cash compensation opportunities
               made available to Executive in the completed fiscal year
               immediately preceding the Change of Control; or

          (III) the failure of the Company to continue in effect any benefits or
               perquisites, or any pension, life insurance, medical insurance or
               disability plan in which Executive was participating immediately
               prior to the Change of Control unless the Company provides
               Executive with a plan or plans that provide substantially similar
               benefits, or the taking of any action by the Company that would
               adversely affect Executive's benefits under any of such plans or
               deprive Executive of any material

                                      A-2
<PAGE>   16

               fringe benefit enjoyed by Executive immediately prior to the
               Change of Control; or

          (IV) any purported termination of Executive's employment by the
               Company for Cause during a Standstill Period which is not
               effected in compliance with paragraph (d) above; or

          (V)  any relocation of Executive of more than 40 miles from the place
               where Executive was located at the time of the Change of Control;
               or

          (VI) any other breach by the Company of any provision of this
               Agreement; or

         (VII) the Company sells or otherwise disposes of, in one transaction
               or a series of related transactions, assets or earning power
               aggregating more than 30 percent of the assets (taken at asset
               value as stated on the books of the Company determined in
               accordance with generally accepted accounting principles
               consistently applied) or earning power of the Company (on an
               individual basis) or the Company and its Subsidiaries (on a
               consolidated basis) to any other Person or Persons (as those
               terms are defined in Exhibit B); or

        (VIII) The voluntary termination by Executive of his employment at any
               time within one year after the Change of Control. Notwithstanding
               the foregoing, the Board may expressly waive the application of
               this clause (VIII) if it waives the applicability of
               substantially similar provisions with respect to all persons with
               whom the Company has a written severance agreement (or may
               condition its application on any additional requirements or
               employee agreements which the Board shall in its discretion deem
               appropriate in the circumstances). The determination of whether
               to waive or impose conditions on the application of this clause
               (VIII) shall be within the complete discretion of the Board but
               shall be made prior to the Change of Control.

     (g) "Date of Termination" means the date on which Executive's employment
terminates.

     (h) "Disability" has the meaning given it in the Company's long-term
disability plan. Executive's employment shall be deemed to be terminated for
Disability on the date on which Executive is entitled to receive long-term
disability compensation pursuant to such long-term disability plan.

     (i) "End Date" has the meaning set forth in Section 1 of the Agreement.

                                      A-3
<PAGE>   17

     (j) "GDCP" means the Company's General Deferred Compensation Plan, or, if
the General Deferred Compensation Plan is no longer maintained by the Company, a
nonqualified deferred compensation plan or arrangement the terms of which are
not less favorable to Executive than the terms of the General Deferred
Compensation Plan as in effect on the Effective Date.

     (k) "ESP" means the Company's Executive Savings Plan.

     (l) "Incapacity" means a disability (other than Disability within the
meaning of (j) above) or other impairment of health that renders Executive
unable to perform his duties to the reasonable satisfaction of the Committee.

     (m) "Standstill Period" means the period commencing on the date of a Change
of Control and continuing until the close of business on the earlier of the day
immediately preceding the End Date or the last business day of the 24th calendar
month following such Change of Control.

     (n) "Stock" means the common stock, $1.00 par value, of the Company.

     (o) "Subsidiary" means any corporation in which the Company owns, directly
or indirectly, 50 percent or more of the total combined voting power of all
classes of stock.

     (p) "Valid Reason" means the voluntary termination by Executive of his
employment (A) within 120 days after the occurrence without Executive's express
written consent of any one of the events described in clauses (I), (II), (III),
(IV), or (V) below, provided that Executive gives notice to the Company at least
30 days in advance requesting that the pertinent situation described therein be
remedied, and the situation remains unremedied upon expiration of such 30-day
period; or (B) within 120 days after the occurrence without Executive's express
written consent of the event described in clause (VI) below:

          (I)  the assignment to him of any duties inconsistent with his
               positions, duties, responsibilities, reporting requirements, and
               status with the Company immediately prior to such assignment, or
               a substantive change in Executive's titles or offices as in
               effect immediately prior to such assignment, or any removal of
               Executive from or any failure to reelect him to such positions,
               except in connection with the termination of Executive's
               employment by the Company for Cause or by Executive other than
               for Valid Reason, or any other action by the Company which
               results in a diminishment in such position, authority, duties or
               responsibilities, other than an insubstantial and inadvertent
               action which is remedied by the Company promptly after receipt of
               notice thereof given by Executive; or

                                      A-4
<PAGE>   18

          (II) the failure of the Company to continue in effect any benefits or
               perquisites, or any pension, life insurance, medical insurance or
               disability plan in which Executive was participating immediately
               prior to such failure unless the Company provides Executive with
               a plan or plans that provide substantially similar benefits, or
               the taking of any action by the Company that would adversely
               affect Executive's benefits under any of such plans or deprive
               Executive of any material fringe benefit enjoyed by Executive
               immediately prior to such action, unless the elimination or
               reduction of any such benefit, perquisite or plan affects all
               other executives in the same organizational level (it being the
               Company's burden to establish this fact); or

         (III) any purported termination of Executive's employment by the
               Company for Cause which is not effected in compliance with
               paragraph (d) above; or

          (IV) any relocation of Executive of more than 40 miles from the place
               where Executive was located at the time of such relocation; or

          (V)  any other breach by the Company of any provision of this
               Agreement; or

          (VI) the Company sells or otherwise disposes of, in one transaction or
               a series of related transactions, assets or earning power
               aggregating more than 30 percent of the assets (taken at asset
               value as stated on the books of the Company determined in
               accordance with generally accepted accounting principles
               consistently applied) or earning power of the Company (on an
               individual basis) or the Company and its Subsidiaries (on a
               consolidated basis) to any other Person or Persons (as those
               terms are defined in Exhibit B).

                                      A-5

<PAGE>   19

                                   EXHIBIT B

                       DEFINITION OF "CHANGE OF CONTROL"

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

     (a) there occurs a change of control of the Company of a nature that would
be required to be reported in response to Item 1(a) of the Current Report on
Form 8-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") or in any other filing under the Exchange Act; PROVIDED,
HOWEVER, that no transaction shall be deemed to be a Change of Control (i) if
the person or each member of a group of persons acquiring control is excluded
from the definition of the term "Person" hereunder or (ii) unless the Committee
shall otherwise determine prior to such occurrence, if Executive or an Executive
Related Party is the Person or a member of a group constituting the Person
acquiring control; or

     (b) any Person other than the Company, any wholly-owned subsidiary of the
Company, or any employee benefit plan of the Company or such a subsidiary
becomes the owner of 20% or more of the Company's Common Stock and thereafter
individuals who were not directors of the Company prior to the date such Person
became a 20% owner are elected as directors pursuant to an arrangement or
understanding with, or upon the request of or nomination by, such Person and
constitute at least 1/4 of the Company's Board of Directors; PROVIDED, HOWEVER,
that unless the Committee shall otherwise determine prior to the acquisition of
such 20% ownership, such acquisition of ownership shall not constitute a Change
of Control if Executive or an Executive Related Party is the Person or a member
of a group constituting the Person acquiring such ownership; or

     (c) there occurs any solicitation or series of solicitations of proxies by
or on behalf of any Person other than the Company's Board of Directors and
thereafter individuals who were not directors of the Company prior to the
commencement of such solicitation or series of solicitations are elected as
directors pursuant to an arrangement or understanding with, or upon the request
of or nomination by, such Person and constitute at least 1/4 of the Company's
Board of Directors; or

     (d) the Company executes an agreement of acquisition, merger or
consolidation which contemplates that (i) after the effective date provided for
in the agreement, all or substantially all of the business and/or assets of the
Company shall be owned, leased or otherwise controlled by another Person and
(ii) individuals who are directors of the Company when such agreement is
executed shall not constitute a majority of the board of directors of the
survivor or successor entity immediately after the effective date provided for
in such agreement; PROVIDED, HOWEVER, that unless otherwise determined by the
Committee, no transaction shall constitute a Change of Control if, immediately

                                      B-1

<PAGE>   20
     after such transaction, Executive or any Executive Related Party shall own
     equity securities of any surviving corporation ("Surviving Entity") having
     a fair value as a percentage of the fair value of the equity securities of
     such Surviving Entity greater than 125% of the fair value of the equity
     securities of the Company owned by Executive and any Executive Related
     Party immediately prior to such transaction, expressed as a percentage of
     the fair value of all equity securities of the Company immediately prior to
     such transaction (for purposes of this paragraph ownership of equity
     securities shall be determined in the same manner as ownership of Common
     Stock); and PROVIDED, FURTHER, that, for purposes of this paragraph (d), if
     such agreement requires as a condition precedent approval by the Company's
     shareholders of the agreement or transaction, a Change of Control shall not
     be deemed to have taken place unless and until such approval is secured
     (but upon any such approval, a Change of Control shall be deemed to have
     occurred on the date of execution of such agreement).

In addition, for purposes of this Exhibit B the following terms have the
meanings set forth below:

     "Common Stock" shall mean the then outstanding Common Stock of the Company
plus, for purposes of determining the stock ownership of any Person, the number
of unissued shares of Common Stock which such Person has the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) upon the exercise of conversion rights, exchange rights, warrants or
options or otherwise. Notwithstanding the foregoing, the term Common Stock shall
not include shares of Preferred Stock or convertible debt or options or warrants
to acquire shares of Common Stock (including any shares of Common Stock issued
or issuable upon the conversion or exercise thereof) to the extent that the
Board of Directors of the Company shall expressly so determine in any future
transaction or transactions.

     A Person shall be deemed to be the "owner" of any Common Stock:

          (i) of which such Person would be the "beneficial owner," as such term
     is defined in Rule 13d-3 promulgated by the Securities and Exchange
     Commission (the "Commission") under the Exchange Act, as in effect on March
     1, 1989; or

          (ii) of which such Person would be the "beneficial owner" for purposes
     of Section 16 of the Exchange Act and the rules of the Commission
     promulgated thereunder, as in effect on March 1, 1989; or

          (iii) which such Person or any of its affiliates or associates (as
     such terms are defined in Rule 12b-2 promulgated by the Commission under
     the Exchange Act, as in effect on March 1, 1989), has the right to acquire
     (whether such right is exercisable immediately or only after the passage of
     time) pursuant to any agreement, arrangement

                                      B-2
<PAGE>   21

     or understanding or upon the exercise of conversion rights, exchange
     rights, warrants or options or otherwise.

     "Person" shall have the meaning used in Section 13(d) of the Exchange Act,
as in effect on March 1, 1989.

     An "Executive Related Party" shall mean any affiliate or associate of
Executive other than the Company or a majority-owned subsidiary of the Company.
The terms "affiliate" and "associate" shall have the meanings ascribed thereto
in Rule 12b-2 under the Exchange Act (the term "registrant" in the definition of
"associate" meaning, in this case, the Company).

                                      B-3

<PAGE>   22

                                    EXHIBIT C

                           CHANGE OF CONTROL BENEFITS

     C.1. BENEFITS UPON A CHANGE OF CONTROL TERMINATION.

     (a) The Company shall pay the following to Executive in a lump sum within
30 days following a Change of Control Termination:

          (i) an amount equal to (A) two times his Base Salary for one year at
     the rate in effect immediately prior to the Date of Termination or the
     Change of Control, whichever is higher, plus (B) the accrued and unpaid
     portion of his Base Salary through the Date of Termination, subject to the
     following. If Executive is eligible for long term disability compensation
     benefits under the Company's long-term disability plan or any successor
     Company long-term disability plan, the amount payable under (A) shall be
     reduced by the annual long-term disability compensation benefit for which
     Executive is eligible under such plan for the two-year period over which
     the amount payable under (A) is measured. If for any period Executive
     receives long-term disability compensation payments under a long-term
     disability plan of the Company as well as payments under the first sentence
     of this clause (i), and if the sum of such payments (the "combined Change
     of Control/disability benefit") exceeds the payment for such period to
     which Executive is entitled under the first sentence of this clause (i)
     (determined without regard to the second sentence of this clause (i)), he
     shall promptly pay such excess in reimbursement to the Company; provided,
     that in no event shall application of this sentence result in reduction of
     Executive's combined Change of Control/disability benefit below the level
     of long-term disability compensation payments to which Executive is
     entitled under the long-term disability plan or plans of the Company.

          (ii) in lieu of any other benefits under SERP, an amount equal to the
     present value of the payments that Executive would have been entitled to
     receive under SERP as a Category B participant, applying the following
     rules and assumptions:

               (A) Executive's Primary Social Security Benefit (as that term is
          defined in SERP) shall mean the annual primary insurance amount to
          which the Executive is entitled or would, upon application therefor,
          become entitled at age 65 under the provisions of the Federal Social
          Security Act as in effect on the Date of Termination assuming that
          Executive received annual income at the rate of his Base Salary from
          the Date of Termination until his 65th birth date which would be
          treated as wages for purposes of the Social Security Act;

               (B) the monthly benefit under SERP determined using the foregoing
          criteria shall be multiplied by 12 to determine an annual benefit; and

                                       C-1

<PAGE>   23

               (C) the present value of such annual benefit shall be determined
          by multiplying the result in (B) by the appropriate actuarial factor,
          using the most recently published interest and mortality rates
          published by the Pension Benefit Guaranty Corporation which are
          effective for plan terminations occurring on the Date of Termination,
          using Executive's age to the nearest year determined as of that date.
          If, as of the Date of Termination, the Executive has previously
          satisfied the eligibility requirements for Early Retirement under The
          TJX Companies, Inc. Retirement Plan, then the appropriate factor shall
          be that based on the most recently published "PBGC Actuarial Value of
          $1.00 Per Year Deferred to Age 60 and Payable for Life Thereafter --
          Healthy Lives," except that if the Executive's age to the nearest year
          is more than 60, then such higher age shall be substituted for 60. If,
          as of the Date of Termination, the Executive has not satisfied the
          eligibility requirements for Early Retirement under The TJX Companies,
          Inc. Retirement Plan, then the appropriate factor shall be based on
          the most recently published "PBGC Actuarial Value of $1.00 Per Year
          Deferred To Age 65 And Payable For Life Thereafter -- Healthy Lives."

               (D) the benefit determined under (C) above shall be reduced by
          the value of any portion of Executive's SERP benefit already paid or
          provided to him in cash or through the transfer of an annuity
          contract.

     (b) Until the second anniversary of the Date of Termination, the Company
shall maintain in full force and effect for the continued benefit of Executive
and his family all life insurance, medical insurance and disability plans and
programs in which Executive was entitled to participate immediately prior to the
Change of Control, provided that Executive's continued participation is possible
under the general terms and provisions of such plans and programs. In the event
that Executive is ineligible to participate in such plans or programs, the
Company shall arrange upon comparable terms to provide Executive with benefits
substantially similar to those which he is entitled to receive under such plans
and programs. Notwithstanding the foregoing, the Company's obligations hereunder
with respect to life, medical or disability coverage or benefits shall be deemed
satisfied to the extent (but only to the extent) of any such coverage or
benefits provided by another employer.

     (c) For a period of two years after the Date of Termination, the Company
shall make available to Executive the use of any automobile that was made
available to Executive prior to the Date of Termination, including ordinary
replacement thereof in accordance with the Company's automobile policy in effect
immediately prior to the Change of Control (or, in lieu of making such
automobile available, the Company may at its option pay to Executive the present
value of its cost of providing such automobile).

     C.2. INCENTIVE BENEFITS UPON A CHANGE OF CONTROL. Within 30 days following
a Change of Control, whether or not Executive's employment has terminated or
been terminated, the Company shall pay to the Executive, in a lump sum, the sum
of (i) and (ii), where:

                                      C-2
<PAGE>   24

          (i) is the sum of (A) the "Target Award" under the Company's
     Management Incentive Plan or any other annual incentive plan which is
     applicable to Executive for the fiscal year in which the Change of Control
     occurs, plus (B) an amount equal to such Target Award prorated for the
     period of active employment during such fiscal year through the Change of
     Control; and

          (ii) the sum of (A) for Performance Cycles not completed prior to the
     Change of Control, an amount with respect to each such cycle equal to the
     maximum Award under LRPIP specified for Executive for such cycle, plus (B)
     any unpaid amounts owing with respect to cycles completed prior to the
     Change of Control.

     C.3. Payments under Section C.1. and Section C.2. of this Exhibit shall be
made without regard to whether the deductibility of such payments (or any other
payments to or for the benefit of Executive) would be limited or precluded by
Internal Revenue Code Section 280G and without regard to whether such payments
(or any other payments) would subject Executive to the federal excise tax levied
on certain "excess parachute payments" under Internal Revenue Code Section 4999;
provided, that if the total of all payments to or for the benefit of Executive,
after reduction for all federal taxes (including the tax described in Internal
Revenue Code Section 4999, if applicable) with respect to such payments
("Executive's total after-tax payments"), would be increased by the limitation
or elimination of any payment under Section C.1. or Section C.2., amounts
payable under Section C.1. and Section C.2. shall be reduced to the extent, and
only to the extent, necessary to maximize Executive's total after-tax payments.
The determination as to whether and to what extent payments under Section C.1.
or Section C.2. are required to be reduced in accordance with the preceding
sentence shall be made at the Company's expense by PricewaterhouseCoopers LLC or
by such other certified public accounting firm as the Committee may designate
prior to a Change of Control. In the event of any underpayment or overpayment
under Section C.1. or Section C.2., as determined by PricewaterhouseCoopers LLC
(or such other firm as may have been designated in accordance with the preceding
sentence), the amount of such underpayment or overpayment shall forthwith be
paid to Executive or refunded to the Company, as the case may be, with interest
at the applicable Federal rate provided for in Section 7872(f)(2) of the
Internal Revenue Code.

     C.4. OTHER BENEFITS. In addition to the amounts described in Sections C.1.
and C.2., Executive shall be entitled to his benefits, if any, under Sections
3(b)(i) (Existing Options), 3(c) (New Stock Awards), and 3(g) (Qualified Plans).

     C.5. NONCOMPETITION; NO MITIGATION OF DAMAGES; ETC.

          (a) NONCOMPETITION. Upon a Change of Control, any agreement by
     Executive not to engage in competition with the Company subsequent to the
     termination of his employment, whether contained in an employment contract
     or other agreement, shall no longer be effective.

                                      C-3
<PAGE>   25

          (b) NO DUTY TO MITIGATE DAMAGES. Executive's benefits under this
     Exhibit C shall be considered severance pay in consideration of his past
     service and his continued service from the date of this Agreement, and his
     entitlement thereto shall neither be governed by any duty to mitigate his
     damages by seeking further employment nor offset by any compensation which
     he may receive from future employment.

          (c) LEGAL FEES AND EXPENSES. The Company shall pay all legal fees and
     expenses, including but not limited to counsel fees, stenographer fees,
     printing costs, etc. reasonably incurred by Executive in contesting or
     disputing that the termination of his employment during a Standstill Period
     is for Cause or other than for good reason (as defined in the definition of
     Change of Control Termination) or obtaining any right or benefit to which
     Executive is entitled under this Agreement following a Change of Control.
     Any amount payable under this Agreement that is not paid when due shall
     accrue interest at the prime rate as from time to time in effect at
     FleetBoston until paid in full.

          (d) NOTICE OF TERMINATION. During a Standstill Period, Executive's
     employment may be terminated by the Company only upon 30 days' written
     notice to Executive.

                                      C-4
<PAGE>   26
November 8, 2000

Dear Arnold,

     I refer to the proposed employment agreement dated as of January 31, 2000
between you and The TJX Companies, Inc. (the "Company"). That draft employment
agreement (the "Agreement") provides at Section 5(a)(i) for a minimum severance
period of one year upon termination of your employment under certain
circumstances prior to a change in control of the Company. It also provides a
Section C.3 (Exhibit C) that in connection with a change in control of the
Company, benefits payable to you could be subject to a cut-back if necessary to
maximize your after-tax benefits after taking into account the effects of the
so-called "golden parachute" excise tax, but it does not provide for any tax
"gross up" payment to reflect the effect of that excise tax.

     The one-year minimum severance period for specified types of pre-change in
control terminations and the absence of a golden parachute tax "gross up"
provision are both also features of the employment agreement between the Company
and Ted English, its Chief Executive Officer, as well as a number of other
executive employment agreements. If, following execution of the Agreement and
during the term of your employment under the Agreement, the Company enters into
an executive employment agreement with a similarly situated executive employee
that provides for either or both of (i) a longer minimum period of severance
benefits upon a termination of employment under the circumstances specified in
Section 5 (a)(i) of the Agreement, or (ii) a full or modified "gross up" in the
event that, in connection with a change in control of the Company, benefits are
subject in whole or in part to the golden parachute excise tax, the Company
agrees that your Agreement will be modified, consistent with such other
agreement, to include provisions for a longer minimum period of severance under
Section 5(a)(i) and/or full or modified "gross up" under Section C.3 of Exhibit
C, as the case may be. However, no adjustment to your Agreement pursuant to the
preceding sentence will be made to the extent the resulting minimum period of
severance under Section 5(a)(i) or the golden parachute provisions of Section
C.3 of Exhibit C would be more favorable than the corresponding provisions then
applicable to the Company's Chief Executive Officer under his agreement with the
Company.

     If the foregoing is agreeable to you, please sign the enclosed copy of this
letter in the space indicated below and return to Mark Jacobson.

                                               THE TJX COMPANIES, INC.

                                          By:  /s/ Edmond J. English
                                               ---------------------------

     Agreed as of the date set forth above:

     /s/ Arnold Barron
     ---------------------------------
     Arnold Barron<PAGE>   1
                                                                    Exhibit 10.2

                                          (As amended through September 5, 2000)

                             THE TJX COMPANIES, INC.
                            1986 STOCK INCENTIVE PLAN

<PAGE>   2

                                      INDEX

                                                                         Page

SECTION 1.  GENERAL PURPOSE OF THE PLAN                                    1

SECTION 2.  PLAN ADMINISTRATION                                            1

SECTION 3.  SHARES ISSUABLE UNDER THE PLAN; MERGERS;
                SUBSTITUTION                                               2

SECTION 4.  ELIGIBILITY                                                    3

SECTION 5.  LIMITATIONS ON TERM AND DATES OF AWARDS                        4

SECTION 6.  STOCK OPTIONS                                                  4

SECTION 7.  STOCK APPRECIATION RIGHTS;
                DISCRETIONARY PAYMENTS                                     7

SECTION 8.  RESTRICTED STOCK; UNRESTRICTED STOCK                           9

SECTION 9.  DEFERRED STOCK AWARDS                                         11

SECTION 10. PERFORMANCE AWARDS                                            12

SECTION 11. OTHER STOCK-BASED AWARDS                                      13

SECTION 12. TRANSFER, LEAVE OF ABSENCE                                    14

SECTION 13. AMENDMENTS AND TERMINATION                                    15

SECTION 14. STATUS OF PLAN                                                15

SECTION 15. CHANGE OF CONTROL PROVISIONS                                  15

SECTION 16. GENERAL PROVISIONS                                            16

SECTION 17.  DEFINITIONS                                                  17

DEFINITION OF "CHANGE OF CONTROL"                                         20

<PAGE>   3

                             THE TJX COMPANIES, INC.
                            1986 STOCK INCENTIVE PLAN

SECTION 1. GENERAL PURPOSE OF THE PLAN.

     The name of the plan is The TJX Companies, Inc. 1986 Stock Incentive Plan
(the "Plan"). The purpose of the Plan is to secure for The TJX Companies, Inc.
(the "Company") and its stockholders the benefit of the incentives inherent in
Common Stock ownership and the receipt of incentive awards by selected key
employees of the Company and its Subsidiaries who contribute to and will be
responsible for its continued long term growth. The Plan is intended to
stimulate the efforts of such key employees by providing an opportunity for
capital appreciation and giving suitable recognition for services which
contribute materially to the success of the Company.

SECTION 2. PLAN ADMINISTRATION.

     The Plan shall be administered by a Committee of not less than two
Non-Employee Directors, who shall be appointed by the Board and who shall serve
at the pleasure of the Board.

     The Committee shall have the power and authority to grant Awards consistent
with the terms of the Plan, including the power and authority:

     (i)  to select the officers and other key employees of the Company and its
          Subsidiaries to whom Awards may from time to time be granted;

     (ii) to determine the time or times of grant, and the extent, if any, of
          Incentive Stock Options, Non-Qualified Stock Options, Stock
          Appreciation Rights, Restricted Stock, Unrestricted Stock, Deferred
          Stock, Performance Awards and any Other Stock-based Awards, or any
          combination of the foregoing, granted to any one or more participants;

     (iii) to determine the number of shares to be covered by any Award;

     (iv) to determine the terms and conditions, including restrictions, not
          inconsistent with the terms of the Plan, of any Award, which terms and
          conditions may differ among individual Awards and participants;

     (v)  to determine whether, to what extent, and under what circumstances
          Stock and other amounts payable with respect to an Award shall be
          deferred either automatically or at the election of the participant
          and whether and to what extent the Company shall pay or credit amounts
          equal to interest (at

<PAGE>   4

          rates determined by the Committee) or dividends or deemed dividends on
          such deferrals; and

     (vi) to adopt, alter and repeal such rules, guidelines and practices for
          administration of the Plan and for its own acts and proceedings as it
          shall deem advisable; to interpret the terms and provisions of the
          Plan and any Award (including related Award Agreements); to make all
          determinations it deems advisable for the administration of the Plan;
          to decide all disputes arising in connection with the Plan; and to
          otherwise supervise the administration of the Plan.

     All decisions and interpretations of the Committee shall be binding on all
persons, including the Company and Plan participants.

SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION.

     (a)  SHARES ISSUABLE. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 42,000,000(1), including shares
issued in lieu of or upon reinvestment of dividends arising from Awards. For
purposes of this limitation, Awards and Stock which are forfeited, reacquired by
the Company or satisfied without the issuance of Stock shall not be counted and
such limitation shall apply only to shares which have become free of any
restrictions under the Plan, except that shares of Restricted Stock reacquired
by the Company, and shares withheld by the Company to satisfy tax withholding
requirements shall be counted to the extent required under Rule 16b-3 under the
Act or any successor rule. The maximum number of shares of Stock which may be
issued pursuant to awards of Restricted Stock or Performance Awards on or after
June 3, 1997 shall not exceed an aggregate of 6,300,000(2) shares. Subject to
the foregoing limitations in this paragraph (a), shares may be issued up to such
maximums pursuant to any type or types of Award, including Incentive Stock
Options. Shares issued under the Plan may be authorized but unissued shares or
shares reacquired by the Company.

 The number of Stock Options, Stock Appreciation Rights or Performance Awards
that shall be awarded to any Participant during any consecutive three-year
period

----------------------------

     (1)  Reflects adjustments under Section 3(b) through February 2, 1999.

     (2)  Reflects adjustments under Section 3(b) through February 2, 1999.

                                      -2-
<PAGE>   5

commencing after June 3, 1997 shall be limited to 4,000,000(3) shares calculated
separately for each of Stock Options, Stock Appreciation Rights and Performance
Awards.

     (b)  STOCK DIVIDENDS, MERGERS, ETC . In the event of a stock dividend,
stock split or similar change in capitalization, or extraordinary dividend or
distribution or restructuring transaction affecting the Stock, the Committee
shall make appropriate adjustments in the number and kind of shares of stock or
securities on which Awards may thereafter be granted and shall make such
adjustments in the number and kind of shares remaining subject to outstanding
Awards, and the option or purchase price in respect of such shares as it may
deem appropriate with a view toward preserving the value of outstanding awards.
In the event of any merger, consolidation, dissolution or liquidation of the
Company, the Committee in its sole discretion may, as to any outstanding Awards,
make such substitution or adjustment in the aggregate number of shares reserved
for issuance under the Plan and in the number and purchase price (if any) of
shares subject to such Awards as it may determine, or accelerate, amend or
terminate such Awards upon such terms and conditions as it shall provide (which,
in the case of the termination of the vested portion of any Award, shall require
payment or other consideration which the Committee deems equitable in the
circumstances), subject, however, to the provisions of Section 15.

     (c)  SUBSTITUTE AWARDS . The Company may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or a Subsidiary as
the result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances. The shares which may be delivered
under such substitute Awards shall be in addition to the maximum number of
shares provided for in Section 3(a).

SECTION 4. ELIGIBILITY.

     Participants in the Plan will be such full or part time officers and other
key employees of the Company and its Subsidiaries (excluding any director who is
not a full time employee) who are responsible for or contribute to the
management, growth or profitability of the Company and its Subsidiaries and who
are selected from time to time by the Committee, in its sole discretion. Persons
who are not employees of the

----------------------------

     (3)  Reflects adjustments under Section 3(b) through February 2, 1999.

                                      -3-
<PAGE>   6

Company or a subsidiary (within the meaning of Section 424 of the Code) shall
not be eligible to receive grants of Incentive Stock Options.

SECTION 5. LIMITATIONS ON TERM AND DATES OF AWARDS.

     (a)  DURATION OF AWARDS . Subject to Sections 16(a) and 16(c) below, no
restrictions or limitations on Awards shall extend beyond 10 years (or 10 years
and one day in the case of Non-Qualified Stock Options) from the grant date,
except that deferrals elected by participants of the receipt of Stock or other
benefits under the Plan may extend beyond such date.

     (b)  LATEST GRANT DATE. No Award shall be granted after April 8, 2007, but
then outstanding Awards may extend beyond such date.

SECTION 6. STOCK OPTIONS.

     Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.

     Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options. To the extent that any option does not qualify
as an Incentive Stock Option, it shall constitute a Non-Qualified Stock Option.

     Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted to the Committee under the Plan be
so exercised, so as to disqualify the Plan or, without the consent of the
optionee, any Incentive Stock Option under Section 422 of the Code.

     Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

     (a)  OPTION PRICE . The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee at the time of grant but shall
be not less than 100% of Fair Market Value on the date of grant.

     (b)  OPTION TERM . The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after the date the option is granted and no Non-Qualified Stock Option
shall be exercisable more than ten years and one day after the date the option
is granted.

                                      -4-
<PAGE>   7

     (c)  EXERCISABILITY . Stock Options shall be exercisable at such future
time or times, whether or not in installments, as shall be determined by the
Committee at or after the grant date. The Committee may at any time accelerate
the exercisability of all or any portion of any Stock Option.

     (d)  Intentionally omitted.

     (e)  METHOD OF EXERCISE . Stock Options may be exercised in whole or in
part, by giving written notice of exercise to the Company specifying the number
of shares to be purchased. Such notice shall be accompanied by payment in full
of the purchase price, either by certified or bank check or other instrument or
means acceptable to the Committee or by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price. As determined by the Committee, in
its discretion, at (or, in the case of Non-Qualified Stock Options, after)
grant, payment in full or in part of the exercise price or to pay withholding
taxes (as provided in Section 16(c)) may also be made in the form of shares of
Stock not then subject to restrictions under any Company plan. An optionee shall
have the rights of a shareholder only as to shares acquired upon the exercise of
a Stock Option and not as to unexercised Stock Options. Notwithstanding anything
to the contrary contained herein, this Plan does not permit the exercise of an
option in successive stages (pyramiding) using as payment at each stage shares
which have been acquired under the option in preceding stages.

     (f)  NON-TRANSFERABILITY OF OPTIONS . No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee.

     (g)  TERMINATION BY DEATH . If an optionee's employment by the Company and
its Subsidiaries terminates by reason of death, the Stock Option may thereafter
be exercised, to the extent then exercisable (or on such accelerated or other
basis as the Committee shall at any time determine prior to death), by the legal
representative or legatee of the optionee, for a period of three years (for
options granted prior to September 5, 2000) and for a period of five years (for
options granted on or after September 5, 2000), or such shorter period (as the
Committee shall specify at time of grant), from the date of death or until the
expiration of the stated term of the option, if earlier.

     (h)  TERMINATION BY REASON OF DISABILITY . Any Stock Option held by an
optionee whose employment by the Company and its Subsidiaries has terminated, or
who has been designated an inactive employee, by reason of Disability may
thereafter be exercised to the extent it was exercisable at the time of the
earlier of such termination or such designation (or on such accelerated or other
basis as the Committee shall at any time

                                      -5-
<PAGE>   8

determine prior to such termination or designation) for a period of three years
(for options granted prior to September 5, 2000) and for a period of five years
(for options granted on or after September 5, 2000), or such shorter period (as
the Committee shall specify at time of grant), from the date of such termination
of employment or designation or until the expiration of the stated term of the
option, if earlier. Except as otherwise provided by the Committee at the time of
grant, the death of an optionee during the final year of such exercise period
shall extend such period for one year following death, subject to termination on
the expiration of the stated term of the option, if earlier. The Committee shall
have the authority to determine whether a participant has been terminated or
designated an inactive employee by reason of Disability.

     (i)  TERMINATION BY REASON OF NORMAL RETIREMENT . If an optionee's
employment by the Company and its Subsidiaries terminates by reason of Normal
Retirement, any Stock Option held by such optionee may thereafter be exercised
to the extent that it was then exercisable (or on such accelerated or other
basis as the Committee shall at any time determine) for a period of three years
(for options granted prior to September 5, 2000) and for a period of five years
(for options granted on or after September 5, 2000), or such shorter period (as
the Committee shall specify at time of grant), from the date of Normal
Retirement or until the expiration of the stated term of the option, if earlier.
Except as otherwise provided by the Committee at the time of grant, the death of
an optionee during the final year of such exercise period shall extend such
period for one year following death, subject to earlier termination on the
expiration of the stated term of the option, if earlier.

     (j)  TERMINATION BY REASON OF SPECIAL SERVICE RETIREMENT . If an optionee's
employment by the Company and its Subsidiaries terminates by reason of a Special
Service Retirement, any Stock Option granted on or after February 2, 1999 that
is held by the optionee may thereafter be exercised (to the extent exercisable
from time to time during the extended exercise period as hereinafter determined)
for a period of three years (for options granted between February 2, 1999 to
September 5, 2000) and for a period of five years (for options granted on or
after September 5, 2000), or such shorter period (as the Committee shall specify
at time of grant), from the date of the Special Service Retirement or until the
expiration of the stated term of the option, if earlier. Except as otherwise
provided by the Committee at the time of grant, the death of an optionee during
the final year of such exercise period shall extend such period for one year
following death, subject to earlier termination on the expiration of the stated
term of the option, if earlier. For purposes of the first sentence of this
subsection (j), a Stock Option granted on or after February 2, 1999 that is held
by an optionee at the optionee's Special Service Retirement and that is not then
fully exercisable shall continue to vest for a period of three years after the
Special Service Retirement Date, subject to the stated term

                                      -6-
<PAGE>   9

of the option, or on such accelerated or other basis as the Committee shall at
any time determine.

     (k)  OTHER TERMINATION . Unless otherwise determined by the Committee, if
an optionee's employment by the Company and its Subsidiaries terminates for any
reason other than death, Disability, Normal Retirement, Special Service
Retirement or for Cause, any Stock Option held by such optionee may thereafter
be exercised to the extent it was exercisable on the date of termination of
employment (or on such accelerated basis as the Committee shall determine at or
after grant) for a period of three months (or such longer period up to three
years as the Committee shall specify at or after grant) from the date of
termination of employment or until the expiration of the stated term of the
option, if earlier. If an optionee's employment terminates for Cause, the
unexercised portion of any Stock Option then held by the optionee shall
immediately terminate.

     (l)  FORM OF SETTLEMENT . Subject to Section 16(a) and Section 16(c) below,
shares of Stock issued upon exercise of a Stock Option shall be free of all
restrictions under the Plan, except as provided in the following sentence. The
Committee may provide at time of grant that the shares to be issued upon the
exercise of a Stock Option shall be in the form of Restricted Stock or Deferred
Stock, or may reserve the right to so provide after time of grant.

SECTION 7.  STOCK APPRECIATION RIGHTS; DISCRETIONARY PAYMENTS.

     (a)  NATURE OF STOCK APPRECIATION RIGHT . A Stock Appreciation Right is an
Award entitling the recipient to receive an amount in cash or shares of Stock
(or in a form of payment permitted under paragraph (e) below) or a combination
thereof having a value equal to (or if the Committee shall so determine at time
of grant, less than) the excess of the Fair Market Value of a share of Stock on
the date of exercise over the Fair Market Value of a share of Stock on the date
of grant (or over the option exercise price, if the Stock Appreciation Right was
granted in tandem with a Stock Option) multiplied by the number of shares with
respect to which the Stock Appreciation Right shall have been exercised, with
the Committee having the right to determine the form of payment.

     (b)  GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS . Stock Appreciation
Rights may be granted in tandem with, or independently of, any Stock Option
granted under the Plan. In the case of a Stock Appreciation Right granted in
tandem with a Non-Qualified Stock Option, such Right may be granted either at or
after the time of the grant of such option. In the case of a Stock Appreciation
Right granted in tandem with an Incentive Stock Option, such Right may be
granted only at the time of the grant of the option.

                                      -7-
<PAGE>   10

     A Stock Appreciation Right or applicable portion thereof granted in tandem
with a given Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Stock Option, except that a Stock
Appreciation Right granted with respect to less than the full number of shares
covered by a related Stock Option shall not be reduced until the exercise or
termination of the related Stock Option exceeds the number of shares not covered
by the Stock Appreciation Right.

     (c)  TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS . Stock Appreciation
Rights shall be subject to such terms and conditions as shall be determined from
time to time by the Committee, subject to the following:

     (i)  Stock Appreciation Rights granted in tandem with Stock Options shall
          be exercisable only at such time or times and to the extent that the
          related Stock Options shall be exercisable.

     (ii) Upon the exercise of a Stock Appreciation Right, the applicable
          portion of any related Stock Option shall be surrendered.

    (iii) Stock Appreciation Rights granted in tandem with a Stock Option shall
          be transferable only with such Stock Option. Other Stock Appreciation
          Rights shall not be transferable otherwise than by will or the laws of
          descent and distribution. All Stock Appreciation Rights shall be
          exercisable during the participant's lifetime only by the participant
          or the participant's legal representative.

     (d)  DISCRETIONARY PAYMENTS. Notwithstanding that a Stock Option at the
time of exercise shall not be accompanied by a related Stock Appreciation Right,
if the market price of the shares subject to such Stock Option exceeds the
exercise price of such Stock Option at the time of its exercise, the Committee
may, in its discretion, cancel such Stock Option, in which event the Company
shall pay to the person exercising such Stock Option an amount equal to the
difference between the Fair Market Value of the Stock to have been purchased
pursuant to such exercise of such Stock Option (determined on the date the Stock
Option is canceled) and the aggregate consideration to have been paid by such
person upon such exercise. Such payment shall be by check, bank draft or in
Stock (or in a form of payment permitted under paragraph (e) below) having a
Fair Market Value (determined on the date the payment is to be made) equal to
the amount of such payments or any combination thereof, as determined by the
Committee. The Committee may exercise its discretion under the first sentence of
this paragraph (d) only in the event of a written request of the person
exercising the option, which request shall not be binding on the Committee.

                                      -8-
<PAGE>   11

     (e)  SETTLEMENT IN THE FORM OF RESTRICTED SHARES OR RIGHTS TO RECEIVE
DEFERRED STOCK. Subject to Sections 16(a) and 16(c) below, shares of Stock
issued upon exercise of a Stock Appreciation Right or as a Discretionary Payment
shall be free of all restrictions under the Plan, except as provided in the
following sentence. The Committee may provide at the time of grant in the case
of a Stock Appreciation Right (and at the time of payment in the case of a
Discretionary Payment) that such shares shall be in the form of shares of
Restricted Stock or rights to acquire Deferred Stock, or in the case of a Stock
Appreciation Right may reserve the right to so provide at any time after the
time of grant. Any such shares and any shares subject to rights to acquire
Deferred Stock shall be valued at Fair Market Value on the date of exercise of
the Stock Appreciation Right or the date the Stock Option is cancelled in the
case of Discretionary Payments.

SECTION 8. RESTRICTED STOCK; UNRESTRICTED STOCK.

     (a)  NATURE OF RESTRICTED STOCK AWARD . A Restricted Stock Award is an
Award entitling the recipient to acquire shares of Stock for a purchase price
(which may be zero), subject to such conditions, including a Company right
during a specified period or periods to repurchase such shares at their original
purchase price (or to require forfeiture of such shares, if the purchase price
was zero) upon participant's termination of employment, as the Committee may
determine at the time of grant.

     (b)  AWARD AGREEMENT . Unless the Committee shall otherwise determine, a
participant who is granted a Restricted Stock Award shall have no rights with
respect to such Award unless the participant shall have accepted the Award
within 60 days (or such shorter date as the Committee may specify) following the
award date by making payment to the Company by certified or bank check or other
instrument acceptable to the Committee in an amount equal to the specified
purchase price, if any, of the shares covered by the Award and by executing and
delivering to the Company a Restricted Stock Award Agreement in such form as the
Committee shall determine.

     (c)  RIGHTS AS A SHAREHOLDER . Upon complying with paragraph (b) above, a
participant shall have all the rights of a shareholder with respect to the
Restricted Stock including voting and dividend rights, subject to
nontransferability restrictions and Company repurchase or forfeiture rights
described in this Section and subject to any other conditions contained in the
Award Agreement. Unless the Committee shall otherwise determine, certificates
evidencing shares of Restricted Stock shall remain in the possession of the
Company until such shares are free of any restrictions under the Plan.

                                      -9-
<PAGE>   12

     (d)  RESTRICTIONS . Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. In the event of termination of employment with the
Company and its subsidiaries for any reason such shares shall be resold to the
Company at their purchase price, or forfeited to the Company if the purchase
price was zero, except as set forth below.

     (i)  The Committee at the time of grant shall specify the date or dates
          (which may depend upon or be related to the attainment of performance
          goals and other conditions) on which the nontransferability of the
          Restricted Stock and the obligation to resell such shares to the
          Company shall lapse. However, no grants of Restricted Stock made after
          September 8, 1993 shall specify such a date which is less than three
          years from the date of grant, except that (i) such a date may be one
          year or greater in the case of Restricted Stock granted subject to the
          attainment of performance goals, (ii) future shares of Restricted
          Stock may be granted which specify full vesting in no less than three
          years and partial vesting at a rate no faster than one-third of such
          shares each year, and (iii) shares of Restricted Stock may be granted
          which specify any vesting date provided that on a cumulative basis
          such shares granted after September 8, 1993, when no longer subject to
          restrictions under the Plan, do not exceed 800,000(4) shares. The
          Committee at any time may accelerate such date or dates and otherwise
          waive or, subject to Section 13, amend any conditions of the Award.

    (ii)  Except as may otherwise be provided in the Award Agreement, in the
          event of termination of employment by the Company and its Subsidiaries
          for any reason (including death), a participant or the participant's
          legal representative shall offer to resell to the Company, at the
          price paid therefor, all Restricted Stock, and the Company shall have
          the right to purchase the same at such price, or if the price was zero
          to require forfeiture of the same, provided that except as provided in
          the Award Agreement, the Company must exercise such right of
          repurchase or forfeiture not later than the 60th day following such
          termination of employment.

----------------------------

     (4)  Reflects adjustments under Section 3(b) through February 2, 1999.

                                      -10-
<PAGE>   13

     (e)  WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS . The Restricted Stock
Award Agreement may require or permit the immediate payment, waiver, deferral or
investment of dividends paid on the Restricted Stock.

     (f)  UNRESTRICTED STOCK . The Committee may, in its sole discretion, grant
or sell to any participant shares of Stock free of restrictions under the Plan
("Unrestricted Stock"). Shares of Unrestricted Stock may be granted or sold as
described in the preceding sentence in respect of past services or other valid
consideration.

SECTION 9. DEFERRED STOCK AWARDS.

     (a)  NATURE OF DEFERRED STOCK AWARD . A Deferred Stock Award is an award
entitling the recipient to acquire shares of Stock without payment in one or
more installments at a future date or dates, all as determined by the Committee.
The Committee may also condition such acquisition on the attainment of specified
performance goals.

     (b)  AWARD AGREEMENT . Unless the Committee shall otherwise determine, a
participant who is granted a Deferred Stock Award shall have no rights with
respect to such Award unless within 60 days of the grant of such Award or such
shorter period as the Committee may specify, the participant shall have accepted
the Award by executing and delivering to the Company a Deferred Stock Award
Agreement.

     (c)  RESTRICTIONS ON TRANSFER . Deferred Stock Awards and all rights with
respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered. Rights with respect to such Awards shall be exercisable
during the participant's lifetime only by the participant or the participant's
legal representative.

     (d)  RIGHTS AS A SHAREHOLDER . A participant receiving a Deferred Stock
Award will have rights of a shareholder only as to shares actually received by
the participant under the Plan and not with respect to shares subject to the
Award but not actually received by the participant. A participant shall be
entitled to receive a stock certificate for shares of Deferred Stock only upon
satisfaction of all conditions therefor specified in the Deferred Stock Award
Agreement.

     (e)  TERMINATION . Except as may otherwise be provided by the Committee at
any time prior to termination of employment, a participant's rights in all
Deferred Stock Awards shall automatically terminate upon the participant's
termination of employment by the Company and its Subsidiaries for any reason
(including death).

                                      -11-
<PAGE>   14

     (f)  ACCELERATION, WAIVER, ETC . At any time prior to the participant's
termination of employment the Committee may in its discretion accelerate, waive,
or, subject to Section 13, amend any or all of the restrictions or conditions
imposed under any Deferred Stock Award.

     (g)  PAYMENTS IN RESPECT OF DEFERRED STOCK . Without limiting the right of
the Committee to specify different terms, the Deferred Stock Award Agreement may
either make no provisions for, or may require or permit the immediate payment,
deferral or investment of amounts equal to, or less than, any cash dividends
which would have been payable on the Deferred Stock had such Stock been
outstanding, all as determined by the Committee in its sole discretion.

SECTION 10. PERFORMANCE AWARDS.

     (a)  NATURE OF PERFORMANCE AWARDS . A Performance Award is an award
entitling the recipient to acquire cash or shares of Stock, or a combination of
cash and Stock, upon the attainment of specified performance goals. If the
grant, vesting, or exercisability of a Stock Option, SAR, Restricted Stock,
Deferred Stock or Other Stock-Based Award is conditioned upon attainment of a
specified performance goal or goals, it shall be treated as a Performance Award
for purposes of this Section and shall be subject to the provisions of this
Section in addition to the provisions of the Plan applicable to such form of
Award.

     (b)  QUALIFYING AND NONQUALIFYING PERFORMANCE AWARDS . Performance Awards
may include Awards intended to qualify for the performance-based compensation
exception under Section 162(m)(4)(C) of the Code ("Qualifying Awards") and
Awards not intended so to qualify ("Nonqualifying Awards").

     (c)  TERMS OF PERFORMANCE AWARDS . The Committee in its sole discretion
shall determine whether and to whom Performance Awards are to be granted, the
performance goals applicable under each such Award, the periods during which
performance is to be measured, and all other limitations and conditions
applicable to the Award. Performance Awards may be granted independently or in
connection with the granting of other Awards. In the case of a Qualifying Award
(other than a Stock Option or SAR), the following special rules shall apply: (i)
the Committee shall preestablish the performance goals and other material terms
of the Award not later than the latest date permitted under Section 162(m) of
the Code; (ii) the performance goal or goals fixed by the Committee in
connection with the Award shall be based exclusively on one or more Approved
Performance Criteria; (iii) no payment (including, for this purpose, vesting or
exercisability where vesting or exercisability, rather than the grant of the
award, is linked to satisfaction of performance goals) shall be made unless the
preestablished

                                      -12-
<PAGE>   15

performance goals have been satisfied and the Committee has certified (pursuant
to Section 162(m) of the Code) that they have been satisfied; (iv) no payment
shall be made in lieu or in substitution for the Award if the preestablished
performance goals are not satisfied (but this clause shall not limit the ability
of the Committee or the Company to provide other remuneration to the affected
Participant, whether or not under the Plan, so long as the payment of such
remuneration would not cause the Award to fail to be treated as having been
contingent on the preestablished performance goals) and (v) in all other
respects the Award shall be construed and administered consistent with the
intent that any compensation under the Award be treated as performance-based
compensation under Section 162(m)(4)(C) of the Code.

     (d)  AWARD AGREEMENT . Unless the Committee shall otherwise determine, a
participant shall have no rights with respect to a Performance Award unless
within 60 days of the grant of such Award or such shorter period as the
Committee may specify, the participant shall have accepted the Award by
executing and delivering to the Company a Performance Award Agreement.

     (e)  RIGHTS AS A SHAREHOLDER . A participant receiving a Performance Award
will have rights of a shareholder only as to shares actually received by the
participant under the Plan and not with respect to shares subject to the Award
but not actually received by the participant. A participant shall be entitled to
receive a stock certificate evidencing the acquisition of shares of Stock under
a Performance Award (to the extent the Award provides for the delivery of shares
of Stock) only upon satisfaction of all conditions therefor specified in the
Performance Award Agreement.

     (f)  TERMINATION . Except as may otherwise be provided by the Committee
(consistent with Section 162(m), in the case of a Qualifying Award) at any time
prior to termination of employment, a participant's rights in all Performance
Awards shall automatically terminate upon the participant's termination of
employment by the Company and its Subsidiaries for any reason (including death).

     (g)  ACCELERATION, WAIVER, ETC. . At any time prior to the participant's
termination of employment by the Company and its Subsidiaries, the Committee may
in its sole discretion (but subject to Section 162(m), in the case of a
Qualifying Award) accelerate, waive or, subject to Section 13, amend any or all
of the goals, restrictions or conditions imposed under any Performance Award.

SECTION 11. OTHER STOCK-BASED AWARDS.

     (a)  NATURE OF AWARDS . The Committee may grant other Awards under which
Stock is or may in the future be acquired ("Other Stock-based Awards").

                                      -13-
<PAGE>   16

     (b)  PURCHASE PRICE; FORM OF PAYMENT . The Committee may determine the
consideration, if any, payable upon the issuance or exercise of an Other
Stock-based Award. The Committee may permit payment by certified check or bank
check or other instrument acceptable to the Committee or by surrender of other
shares of Stock (excluding shares then subject to restrictions under the Plan).

     (c)  FORFEITURE OF AWARDS; REPURCHASE OF STOCK; ACCELERATION OR WAIVER OF
RESTRICTIONS . The Committee may determine the conditions under which an Other
Stock-based Award shall be forfeited or, in the case of an Award involving a
payment by the recipient, the conditions under which the Company may or must
repurchase such Award or related Stock. At any time the Committee may in its
sole discretion accelerate, waive or, subject to Section 13, amend any or all of
the limitations or conditions imposed under any Other Stock-based Award.

     (d)  AWARD AGREEMENTS . Unless the Committee shall otherwise determine, a
participant shall have no rights with respect to any Other Stock-based Award
unless within 60 days after the grant of such Award (or such shorter period as
the Committee may specify) the participant shall have accepted the Award by
executing and delivering to the Company an Other Stock-based Award Agreement.

     (e)  NONTRANSFERABILITY . Other Stock-based Awards may not be sold,
assigned, transferred, pledged or encumbered except as may be provided in the
Other Stock-based Award Agreement. However, in no event shall any Other
Stock-based Award be transferred other than by will or by the laws of descent
and distribution or be exercisable during the participant's lifetime by other
than the participant or the participant's legal representative.

     (f)  RIGHTS AS A SHAREHOLDER . A recipient of any Other Stock-based Award
will have rights of a shareholder only at the time and to the extent, if any,
specified by the Committee in the Other Stock-based Award Agreement.

     (g)  DEEMED DIVIDEND PAYMENTS; DEFERRALS . Without limiting the right of
the Committee to specify different terms at or after grant, an Other Stock-based
Award Agreement may require or permit the immediate payment, waiver, deferral or
investment of dividends or deemed dividends payable or deemed payable on Stock
subject to the Award.

SECTION 12. TRANSFER, LEAVE OF ABSENCE.

     For purposes of the Plan, the following events shall not be deemed a
termination of employment:

                                      -14-
<PAGE>   17

     (a)  a transfer to the employment of the Company from a Subsidiary or from
          the Company to a Subsidiary, or from one Subsidiary to another;

     (b)  an approved leave of absence for military service or sickness, or for
          any other purpose approved by the Company, if the employee's right to
          reemployment is guaranteed either by a statute or by contract or under
          the policy pursuant to which the leave of absence was granted or if
          the Committee otherwise so provides in writing.

For purposes of the Plan, the employees of a Subsidiary of the Company shall be
deemed to have terminated their employment on the date on which such Subsidiary
ceases to be a Subsidiary of the Company.

SECTION 13. AMENDMENTS AND TERMINATION.

     The Board may at any time amend or discontinue the Plan and the Committee
may at any time amend or cancel any outstanding Award for the purpose of
satisfying changes in law or for any other lawful purpose, but no such action
shall adversely affect rights under any outstanding Award without the holder's
consent. However, no such amendment shall be effective unless approved by
stockholders if it would (i) reduce the exercise price of any option previously
granted hereunder or (ii) cause the Plan to fail to satisfy the incentive stock
option requirements of the Code or the requirements of Rule 16b-3 or any
successor rule under the Act as in effect on the date of such amendment.
Notwithstanding any provision of this Plan, the Board or the Committee may at
any time adopt any subplan or otherwise grant Stock Options or other Awards
under this Plan having terms consistent with applicable foreign tax or other
foreign regulatory requirements or laws; provided, however, that no person
subject to the restrictions of Section 16(b) of the Act may be eligible for or
be granted any such Stock Options or other Awards if such eligibility or grant
would cause the Plan to fail to satisfy the requirements of Rule 16b-3 or any
successor rule under the Act as in effect on the applicable date.

SECTION 14. STATUS OF PLAN.

     With respect to the portion of any Award which has not been exercised and
any payments in cash, stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make

                                      -15-
<PAGE>   18

payments with respect to awards hereunder, provided that the existence of such
trusts or other arrangements is consistent with the provision of the foregoing
sentence.

SECTION 15. CHANGE OF CONTROL PROVISIONS.

     As used herein, a Change of Control and related definitions shall have the
meanings set forth in Exhibit A to this Plan.

     Upon the occurrence of a Change of Control:

     (i)  Each Stock Option and Stock Appreciation Right shall automatically
          become fully exercisable unless the Committee shall otherwise
          expressly provide at the time of grant.

     (ii) Restrictions and conditions on Restricted Stock, Deferred Stock,
          Performance Units and Other Stock-based Awards shall automatically be
          deemed waived only if and to the extent, if any, specified (whether at
          or after time of grant) by the Committee.

The Committee may at any time prior to or after a Change of Control accelerate
the exercisability of any Stock Options and Stock Appreciation Rights and may
waive restrictions, limitations and conditions on Restricted Stock, Deferred
Stock, Performance Units and Other Stock-based Awards to the extent it shall in
its sole discretion determine.

SECTION 16. GENERAL PROVISIONS.

     (a)  NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS, ETC. The
Committee may require each person acquiring shares pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares without a view to distribution thereof.

     No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange requirements have
been satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Stock and Awards as it deems
appropriate.

     (b)  OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board of Directors from adopting other
or additional compensation arrangements, subject to stockholder approval if such
approval is required; and such arrangements may be either generally applicable
or applicable only in specific cases. The adoption of the Plan does not confer
upon any employee any right

                                      -16-
<PAGE>   19

to continued employment with the Company or a Subsidiary, nor does it interfere
in any way with the right of the Company or a Subsidiary to terminate the
employment of any of its employees at any time.

     (c)  TAX WITHHOLDING, ETC . Each participant shall, no later than the date
as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant. The Company may withhold or otherwise administer the Plan to comply
with tax obligations under any applicable foreign laws.

     The Committee may provide, in respect of any transfer of Stock under an
Award, that if and to the extent withholding of any Federal, state or local tax
is required in respect of such transfer or vesting, the participant may elect,
at such time and in such manner as the Committee shall prescribe, to (i)
surrender to the Company Stock not then subject to restrictions under any
Company plan or (ii) have the Company hold back from the transfer or vesting
Stock having a value calculated to satisfy such withholding obligation. In no
event shall Stock be surrendered under clause (i) or held back by the Company
under clause (ii) in excess of the minimum amount required to be withheld for
Federal, state and local taxes.

     (d)  DEFERRAL OF AWARDS. Participants may elect to defer receipt of Awards
or vesting of Awards only in such cases and to the extent that the Committee
shall determine at or after the grant date.

SECTION 17. DEFINITIONS.

     The following terms shall be defined as set forth below:

     (a)  "Act" means the Securities Exchange Act of 1934.

     (b)  "Approved Performance Criteria" means criteria based on any one or
          more of the following (on a consolidated, divisional, line of
          business, geographical or area of executive's responsibilities basis):
          one or more items of or within (i) sales, revenues, assets or
          expenses; (ii) earnings, income or margins, before or after deduction
          for all or any portion of interest, taxes, depreciation, or
          amortization, whether or not on a

                                      -17-
<PAGE>   20

          continuing operations and aggregate or per share basis; (iii) return
          on investment, capital, assets, sales or revenues; and (iv) stock
          price.

     (c)  "Award" or "Awards" except where referring to a particular category of
          grant under the Plan shall include Incentive Stock Options,
          Non-Qualified Stock Options, Stock Appreciation Rights, Restricted
          Stock Awards, Unrestricted Stock Awards, Deferred Stock Awards,
          Performance Awards and Other Stock-based Awards.

     (d)  "Board" means the Board of Directors of the Company.

     (e)  "Cause" means a felony conviction of a participant or the failure of a
          participant to contest prosecution for a felony, or a participant's
          willful misconduct or dishonesty, any of which is directly harmful to
          the business or reputation of the Company or any Subsidiary.

     (f)  "Code" means the Internal Revenue Code of 1986, as amended, and any
          successor Code, and related rules, regulations and interpretations.

     (g)  "Committee" means the Committee referred to in Section 2. If at any
          time no Committee shall be in office, the functions of the Committee
          shall be exercised by the Board.

     (h)  "Deferred Stock Award" is defined in Section 9(a).

     (i)  "Disability" means disability as determined in accordance with
          standards and procedures similar to those used under the Company's
          long term disability program.

     (j)  "Fair Market Value" on any given date means the last sale price
          regular way at which Stock is traded on such date as reflected in the
          New York Stock Exchange Composite Transactions Index or, where
          applicable, the value of a share of Stock as determined by the
          Committee in accordance with the applicable provisions of the Code.

     (k)  "Incentive Stock Option" means any Stock Option intended to be and
          designated as an "incentive stock option" as defined in the Code.

     (l)  "Non-Employee Director" shall have the meaning set forth in Rule
          16b-3(b)(3) promulgated under the Act, or any successor definition
          under the Act.

                                      -18-
<PAGE>   21

     (m)  "Non-Qualified Stock Option" means any Stock Option that is not an
          Incentive Stock Option.

     (n)  "Normal Retirement" means retirement from active employment with the
          Company and its Subsidiaries at or after age 65 with at least five
          years of service for the Company and its Subsidiaries as specified in
          The TJX Companies, Inc. Retirement Plan.

     (o)  "Other Stock-based Award" is defined in Section 11(a).

     (p)  "Performance Award" is defined in Section 10(a).

     (q)  "Restricted Stock Award" is defined in Section 8(a).

     (r)  "Special Service Retirement" means retirement from active employment
          with the Company and its Subsidiaries (i) at or after age 60 with at
          least twenty years of service for the Company and its Subsidiaries, or
          (ii) at or after age 65 with at least ten years of service for the
          Company and its Subsidiaries. The term "Special Service Retirement"
          applies only to Stock Options granted on or after February 2, 1999.

     (s)  "Stock" means the Common Stock, $1.00 par value, of the Company,
          subject to adjustments pursuant to Section 3.

     (t)  "Stock Appreciation Right" means a right described in Section 7(a) and
          granted, either independently of other Awards or in tandem with the
          grant of a Stock Option.

     (u)  "Stock Option" means any option to purchase shares of Stock granted
          pursuant to Section 6.

     (v)  "Subsidiary" means any corporation or other entity (other than the
          Company) in an unbroken chain beginning with the Company if each of
          the entities (other than the last entity in the unbroken chain) owns
          stock or other interests possessing 50% or more of the total combined
          voting power of all classes of stock or other interest in one of the
          other corporations or other entities in the chain.

     (w)  "Unrestricted Stock Award" is defined in Section 8(f).

                                      -19-
<PAGE>   22

                                                                       EXHIBIT A

                        DEFINITION OF "CHANGE OF CONTROL"

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

          (a)  there occurs a change of control of the Company of a nature that
     would be required to be reported in response to Item 1(a) of the Current
     Report on Form 8-K pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 (the "Exchange Act") or in any other filing under the
     Exchange Act; PROVIDED, HOWEVER, that if the Participant or a Participant
     Related Party is the Person or a member of a group constituting the Person
     acquiring control, a transaction shall not be deemed to be a Change of
     Control as to a Participant unless the Committee shall otherwise determine
     prior to such occurrence; or

          (b)  any Person other than the Company, any wholly-owned subsidiary of
     the Company, or any employee benefit plan of the Company or such a
     subsidiary becomes the owner of 20% or more of the Company's Common Stock
     and thereafter individuals who were not directors of the Company prior to
     the date such Person became a 20% owner are elected as directors pursuant
     to an arrangement or understanding with, or upon the request of or
     nomination by, such Person and constitute at least 1/4 of the Company's
     Board of Directors; PROVIDED, HOWEVER, that unless the Committee shall
     otherwise determine prior to the acquisition of such 20% ownership, such
     acquisition of ownership shall not constitute a Change of Control as to a
     Participant if the Participant or a Participant Related Party is the Person
     or a member of a group constituting the Person acquiring such ownership; or

          (c)  there occurs any solicitation or series of solicitations of
     proxies by or on behalf of any Person other than the Company's Board of
     Directors and thereafter individuals who were not directors of the Company
     prior to the commencement of such solicitation or series of solicitations
     are elected as directors pursuant to an arrangement or understanding with,
     or upon the request of or nomination by, such Person and constitute at
     least 1/4 of the Company's Board of Directors; or

                                      -20-
<PAGE>   23

          (d)  the Company executes an agreement of acquisition, merger or
     consolidation which contemplates that (i) after the effective date provided
     for in such agreement, all or substantially all of the business and/or
     assets of the Company shall be owned, leased or otherwise controlled by
     another Person and (ii) individuals who are directors of the Company when
     such agreement is executed shall not constitute a majority of the board of
     directors of the survivor or successor entity immediately after the
     effective date provided for in such agreement; PROVIDED, HOWEVER, that
     unless otherwise determined by the Committee, no transaction shall
     constitute a Change of Control as to a Participant if, immediately after
     such transaction, the Participant or any Participant Related Party shall
     own equity securities of any surviving corporation ("Surviving Entity")
     having a fair value as a percentage of the fair value of the equity
     securities of such Surviving Entity greater than 125% of the fair value of
     the equity securities of the Company owned by the Participant and any
     Participant Related Party immediately prior to such transaction, expressed
     as a percentage of the fair value of all equity securities of the Company
     immediately prior to such transaction (for purposes of this paragraph
     ownership of equity securities shall be determined in the same manner as
     ownership of Common Stock); and PROVIDED, FURTHER, that, for purposes of
     this paragraph (d), if such agreement requires as a condition precedent
     approval by the Company's shareholders of the agreement or transaction, a
     Change of Control shall not be deemed to have taken place unless and until
     such approval is secured (but upon any such approval, a Change of Control
     shall be deemed to have occurred on the date of execution of such
     agreement).

     In addition, for purposes of this Exhibit A the following terms have the
meanings set forth below:

     "Common Stock" shall mean the then outstanding Common Stock of the Company
plus, for purposes of determining the stock ownership of any Person, the number
of unissued shares of Common Stock which such Person has the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) upon the exercise of conversion rights, exchange rights, warrants or
options or otherwise. Notwithstanding the foregoing, the term Common Stock shall
not include shares of Preferred Stock or convertible debt or options or warrants
to acquire shares of Common Stock (including any shares of Common Stock issued
or issuable upon the conversion or exercise thereof) to the extent that the
Board of Directors of the Company shall expressly so determine in any future
transaction or transactions.

                                      -21-
<PAGE>   24

     A Person shall be deemed to be the "owner" of any Common Stock:

          (i)  of which such Person would be the "beneficial owner," as such
     term is defined in Rule 13d-3 promulgated by the Securities and Exchange
     Commission (the "Commission") under the Exchange Act, as in effect on March
     1, 1989; or

          (ii) of which such Person would be the "beneficial owner" for purposes
     of Section 16 of the Exchange Act and the rules of the Commission
     promulgated thereunder, as in effect on March 1, 1989; or

          (iii) which such Person or any of its affiliates or associates (as
     such terms are defined in Rule 12b-2 promulgated by the Commission under
     the ExchangeAct, as in effect on March 1, 1989) has the right to acquire
     (whether such right is exercisable immediately or only after the passage of
     time) pursuant to any agreement, arrangement or understanding or upon the
     exercise of conversion rights, exchange rights, warrants or options or
     otherwise.

     "Person" shall have the meaning used in Section 13(d) of the Exchange Act,
as in effect on March 1, 1989.

     A "Participant Related Party" shall mean, with respect to a Participant,
any affiliate or associate of the Participant other than the Company or a
Subsidiary of the Company. The terms "affiliate" and "associate" shall have the
meanings ascribed thereto in Rule 12b-2 under the Exchange Act (the term
"registrant" in the definition of "associate" meaning, in this case, the
Company).

     "Participant" means a participant in the Plan.

                                      -22-

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