Document:

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                                                                    Exhibit 10.2

     AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") made as of
     September 7, 2001, by and between NetSilicon, Inc., a Massachusetts
     corporation (the "Company"), and Daniel J. Sullivan (the "Executive").

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     WHEREAS, the Company and Executive entered into an Employment Agreement
dated as of August 9, 2001 (the "Original Employment Agreement"), and the
Company and Executive desire to amend certain provisions of the Original
Employment Agreement; and

     WHEREAS, the Company wishes to secure the future services of the Executive
with the Company pursuant to the terms of this Agreement.

     NOW, THEREFORE, the parties agree as follows:

1)   TERM.

     a)   The Company hereby agrees to continue to employ the Executive and the
          Executive hereby agrees to continue employment with the Company, in
          the position set forth in Section 2 below, for the Term (as defined
          below), subject to the terms and conditions of this Agreement.

     b)   The term (the "Term") of this Agreement shall commence as of the date
          of the Original Employment Agreement (the "Effective Date") and shall
          continue until terminated in accordance with Section 4.

2)   POSITION, DUTIES AND RESPONSIBILITIES.

     a)   During the Term, the Executive shall be employed by the Company and
          shall serve the Company as its Executive Vice President of Finance and
          Operations and Chief Financial Officer (the "CFO"). The Executive
          shall have such duties and responsibilities as are incident to, or
          reasonably requested in connection with, such position, as well as
          such other comparable duties and responsibilities as may be assigned
          to him by the Company. The Executive shall report to the Chief
          Executive Officer (the "CEO") or to such comparable or higher level of
          authority and responsibility within the Company as the CEO or the
          Board of Directors (the "BOD") may reasonably determine.

     b)   During the Term, the Executive shall serve the Company faithfully,
          diligently and to the best of the Executive's ability, and shall
          devote substantially all of the Executive's business time and efforts
          to such service. The Executive also shall not engage in any other
          business activity without the written consent of the Company, except
          that Executive may (i) carry on charitable, civic, or other
          non-for-profit activities or (ii) manage his personal investments,
          provided that none of such activities may conflict with the
          Executive's duties under this Agreement and the Non-Disclosure,
          Proprietary Rights and Non-Solicitation Agreement dated as of March
          10, 2000 (the "Nondisclosure

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          Agreement"). If the Executive shall be elected to other offices of the
          Company or any of its affiliates, he shall serve in such positions
          without further compensation than provided for in this Agreement. The
          Executive shall perform his services under this Agreement at such
          locations as may be required by the Company from time to time, but the
          Company will not require the Executive to permanently relocate to an
          office more than 50 miles from the Company's Waltham, Massachusetts
          office.

     c)   The Executive agrees to comply with the policies and procedures of the
          Company applicable to its U.S. employees generally from time to time
          that are in force (which may be amended, revised or supplemented at
          any time in the Company's sole discretion), provided, however, that to
          the extent there is a conflict between the terms of this Agreement and
          the policies and procedures of the Company, the terms of this
          Agreement shall govern unless otherwise specified herein.

3)   COMPENSATION AND BENEFITS. During the term of this Agreement, the Company
     shall pay the Executive as compensation for his satisfactory performance of
     his duties and obligations hereunder, the following:

     a)   BASE SALARY. During the Term, the Company shall pay to the Executive a
          base salary at the rate of U.S. $12,500.00 per month ("Base Salary"),
          subject to annual change in the discretion of the Company in
          accordance with the Company's executive compensation practices, and
          payable in accordance with the regular payroll practices of the
          Company as may be modified or established from time to time.

     b)   INCENTIVE COMPENSATION. During the Term, the Executive shall be
          eligible to receive additional quarterly incentive compensation (the
          "Incentive Bonus"). The amount of the Incentive Bonus, if any, will be
          as determined by the BOD's Compensation Committee (which may put in
          place an Executive Incentive Plan), which may consider, among other
          things, the Executive's actual attainment of specific goals and the
          Company's overall performance. The BOD's Compensation Committee will
          make all determinations regarding the Executive's eligibility for the
          quarterly Incentive Bonus at its sole discretion. Subject to the
          provisions of Section 4 herein, the Executive must be employed by the
          Company in good standing (as determined by the BOD) as the Company's
          CFO to be eligible for any Incentive Bonus payments, which will be
          subject to applicable taxes and payable in accordance with the
          Company's normal bonus pay practices as may be established or modified
          from time to time.

     c)   STOCK OPTIONS. The Executive has received certain stock options as
          part of the Company's initial public offering as well as additional
          awards thereafter in accordance with Company option policy. The
          Executive shall be eligible to receive additional stock option awards
          as determined by the BOD in its sole discretion.

     d)   BENEFITS. Subject to any contribution therefor generally required of
          senior executives of the Company, the Executive shall be eligible to
          participate in all employee benefits plans, including the Company's
          health and dental plans, as adopted by the BOD and in effect for
          senior executives of the Company. Such participation shall be subject
          to (i) the terms of

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          the applicable plan documents, (ii) generally applicable Company
          policies and (iii) the discretion of the BOD or any administrative or
          other committee provided for in or contemplated by such plans.

     e)   EXPENSES. The Company shall pay or reimburse the Executive for all
          reasonable business expenses incurred or paid by the Executive in the
          performance of his responsibilities hereunder in accordance with the
          Company's prevailing policy and practice relating to reimbursements as
          established, modified or amended from time to time. The Executive must
          provide substantiation and documentation of these expenses to the
          Company in order to receive reimbursement, as required pursuant to
          Company policy.

     f)   CHANGE OF CONTROL. In the event of a Change of Control that occurs on
          or before January 1, 2002, or in the event that the Company and a
          third party have executed a binding agreement on or before such date
          to consummate a Change of Control and such Change of Control occurs
          within the three month period following January 1, 2002, where in each
          case the Company is or will be sold to a party that is unaffiliated
          with Sorrento Networks, Inc., or its successors and assigns
          ("Sorrento") and the Executive substantially contributes, as
          determined in good faith at the sole discretion of the BOD, to the
          success of the transaction, the Executive shall be entitled to receive
          one quarter (.25) of one percent of the Consideration (as hereinafter
          defined). Such fee shall be paid in the same form and at such time as
          the Company, or its stockholders, as the case may be, receives its
          Consideration pursuant to such transaction. In addition, after the
          consummation of a Change of Control which occurs at any time, the
          Executive's unvested stock options will vest immediately and become
          exercisable for a period of twenty-four (24) months from the date of
          the consummation of a Change of Control. "Consideration" shall mean
          the aggregate value, whether in cash or securities, paid to the
          shareholders of the Company in their capacity as such in respect of
          the shares of common stock of the Company held by them in connection
          with a Change of Control. The value of any Consideration and the
          payment to the Executive shall be determined in good faith by the BOD.

4)   TERMINATION OF EMPLOYMENT.

     a)   TERMINATION BY THE COMPANY FOR CAUSE. In the event that the Company
          terminates the Executive's employment and this Agreement for Cause (as
          defined in Section 5(a)), the Executive shall be entitled to no
          payments, salary continuation, severance or other benefits, except
          for: (i) Base Salary earned and accrued but unpaid through the date of
          Executive's termination of employment; (ii) payment for accrued but
          unused vacation time up to the Executive's termination of employment;
          (iii) statutory benefit continuation rights in accordance with the
          Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"),
          provided Executive makes the appropriate voluntary contribution
          payments and subject to applicable law and the requirements of the
          Company's health insurance plans then in effect; and (iv) all expenses
          reimbursable to the Executive and unpaid as of the date of Executive's
          termination of employment.

     b)   TERMINATION DUE TO DEATH OR PERMANENT DISABILITY. In the event of the
          termination of the Executive's employment and this Agreement due to
          the Executive's death or Disability,

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          the Executive, or the Executive's legal representative, shall be
          entitled to no payments, salary continuation, severance or other
          benefits, except for: (i) Base Salary to the extent earned and accrued
          but unpaid through the date of Executive's termination of employment,
          as well as a one time lump sum payment equivalent to six (6) times the
          Executive's monthly Base Salary, to be paid within a reasonable time
          after the Executive's death or Disability; (ii) payment for accrued
          but unused vacation time up to the Executive's termination of
          employment; (iii) statutory benefit continuation rights in accordance
          with COBRA, provided Executive makes the appropriate voluntary
          contribution payments and subject to applicable law and the
          requirements of the Company's health insurance plans then in effect;
          (iv) the Executive's unvested stock options shall vest as if the
          vesting start date with respect to such stock options were one year
          prior to the vesting start date set forth in the applicable option
          agreements and become exercisable for a period of ninety (90) days
          from the date of the Executive's death or Disability; and (v) all
          expenses reimbursable to the Executive and unpaid as of the date of
          Executive's termination of employment.

     c)   TERMINATION WITHOUT CAUSE. In the event that the Executive's
          employment and this Agreement are terminated by the Company without
          Cause, the Executive shall be entitled to no payments, salary
          continuation, severance or other benefits, except for: (i) severance
          payment in the form of continuation of his Base Salary for twelve (12)
          months at the same rate in effect as of the Executive's last day of
          employment with the Company, payable pursuant to the regular payroll
          practices of the Company over such twelve (12) month period; (ii)
          payment for accrued but unused vacation time up to the Executive's
          termination of employment; (iii) if the Executive elects after the
          termination of his employment and in accordance with COBRA to continue
          health coverage under the same plans available to active Company
          employees, under the same rules, restrictions and regulations
          applicable thereto, the Company shall make premium payments on his
          behalf until the earlier of (x) twelve (12) months from the last day
          of the Executive's employment or (y) the date on which the Executive
          becomes ineligible to receive COBRA benefits; and (iv) all expenses
          reimbursable to the Executive and unpaid as of the date of Executive's
          termination of employment. In addition, in the event the Executive's
          employment and this Agreement are terminated without Cause, the
          Executive's unvested stock options will vest immediately and become
          exercisable for a period of twenty-four (2) months from the date of
          the Executive's termination without Cause. The Executive shall be
          entitled to no other benefits or additional payments under this
          Agreement.

     d)   VOLUNTARY TERMINATION. The Executive may voluntarily terminate his
          employment (thereby effectuating a "Voluntary Termination") only upon
          sixty (60) days' written notice to the BOD. In the event of a
          Voluntary Termination, the Company may accelerate Executive's
          departure date (and terminate this Agreement) and will have no
          obligation to pay Executive after his actual departure date. In the
          event of a Voluntary Termination, and if no proceedings to terminate
          the Executive for Cause have been initiated, the Executive shall be
          entitled to no payments, salary continuation, severance or other
          benefits, except for those payments and benefits as set forth in
          Section 4(a).
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     e)   TERMINATION BY THE EXECUTIVE FOR GOOD REASON. In the event the
          Executive decides to terminate this Agreement and his employment for
          Good Reason (as defined in Section 5(e)), then the Executive must give
          notice of such termination to the Company and the BOD. If the basis
          for such Good Reason is not cured within thirty (30) days after the
          Company and the BOD receive written notice specifying the basis of
          such Good Reason (as determined by the BOD in good faith), this
          Agreement, and the Executive's employment, shall terminate. In the
          event of a termination by the Executive for Good Reason, the Executive
          shall be entitled to the severance payments as set forth in Section
          4(c).

     f)   EXECUTION OF RELEASE OF CLAIMS. In order to receive any of the
          severance payments and benefits outlined in Section 4(b), 4(c), 4(d)
          or 4(e), as the case may be, the Executive must execute a
          comprehensive release of all claims in favor of the Company and its
          officers, directors, employees, shareholders, agents and/or
          representatives.

     g)   CESSATION OF SEVERANCE PAYMENTS AND BENEFITS. If the Executive
          breaches in any material respect his obligations under this Agreement
          or the Nondisclosure Agreement, the Company may immediately cease
          payment of all severance and/or benefits described in this Agreement.
          This cessation of severance and/or benefits shall be in addition to,
          and not as an alternative to, any other remedies in law or in equity
          available to the Company, including the right to seek specific
          performance or an injunction.

5)   DEFINITIONS.

     For purposes of the Agreement, the following terms shall be defined as set
forth below:

     (a)  "Cause", which will be determined by the BOD at its sole discretion,
          is defined as:

          (i)   the continued failure or refusal of the Executive substantially
                to perform Executive's duties and obligations to the Company
                (other than any such failure resulting from the Executive's
                Disability) and which is not cured within fifteen (15) days of
                notice thereof from the Company;

          (ii)  gross negligence in the performance of the Executive's duties,
                willful misfeasance in connection with the Executive's work,
                dishonesty, disloyalty, or a breach of fiduciary duty by the
                Executive;

          (iii) the commission by the Executive of an act of fraud,
                embezzlement, misappropriation of any money or other assets or
                property (whether tangible or intangible), or any other illegal
                conduct in connection with the Executive's performance of his
                duties;

          (iv)  the Executive's conviction of or pleading of nolo contendere to
                a felony;

          (v)   disregard in any material respect of the rules or policies of
                the Company which, if curable, has not been cured within fifteen
                (15) days after notice thereof from the Company;

          (vi)  engagement by the Executive in misconduct which is injurious in
                any material respect to the Company; or
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          (vii) the commission of an act which constitutes unfair competition
                with the Company or which induces any customer of the Company to
                breach a contract with the Company, or the Executive's breach of
                this Agreement, the Nondisclosure Agreement, or any other
                written agreement with the Company.

     (b)  "Change of Control" means: (i) the merger or consolidation of the
          Company with or into any other corporation or entity, or the merger or
          consolidation of any other corporation or entity into or with the
          Company, which results in the Company or those persons who are
          shareholders of the Company as of the date hereof holding less than
          50% in voting power of the outstanding capital stock of the surviving
          corporation; (ii) any sale or transfer in a single transaction or
          series of related transactions of all or substantially all of the
          Company's assets as of the transaction date (or the date of the first
          transaction in a series of related transactions); (iii) a third
          "person," including a "group," becomes the "beneficial owner" (as
          these terms are defined in Section 13(d) of the Securities Exchange
          Act of 1934, as amended) of shares of the Company having more than 50%
          of the voting power of the outstanding capital stock of the Company;
          or (iv) any transaction or series of related transactions in which a
          third "person," including a "group" (as these terms are defined in
          Section 13(d) of the Securities Exchange Act of 1934, as amended),
          appoints or elects a majority of the Board of Directors of the
          Company.

     (c)  "Disability" means the Executive's inability, for a period of ninety
          (90) consecutive days, to perform, with or without a reasonable
          accommodation (that does not subject the Company to an undue
          hardship), the essential functions of his position by reason of mental
          or physical impairment.

     (d)  "Voluntary Termination" means a termination of employment during the
          Term by the Executive on the Executive's own initiative other than a
          termination for death or Disability under Section 4(b).

     (e)  "Good Reason" shall mean, without the Executive's approval,

          i)    a material diminution, without Cause (as defined in Section
                5(a)), in the material responsibilities of the Executive; and

          ii)   Executive's permanent relocation to an office more than 50 miles
                from the Company's Waltham, Massachusetts office.

6)   NONCOMPETITION AND NONSOLICITATION. As a condition of this Agreement, and
in consideration for the payments set forth herein, the Executive agrees that,
during the period of his employment by the Company and its subsidiaries and for
two (2) years after the termination of his employment, regardless of the reasons
for such termination, the Executive will not, directly or indirectly, alone or
as a partner, officer, director, employee, joint venturer, lender or stockholder
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of any entity (other than as a shareholder of less than 1% of stock of a
publicly traded corporation), without the prior written consent of the Company:

     a)   (i) accept employment with any business that competes with the
          products or services being created, developed, manufactured, marketed,
          distributed or sold by the Company, (ii) engage in any business or
          activity that competes with the products or services being created,
          developed, manufactured, marketed, distributed or sold by the Company,
          and (iii) become an officer, director of, or maintain a consulting or
          other professional relationship with, any business that competes with
          the products or services being created, developed, manufactured,
          marketed, distributed or sold by the Company.

     b)   solicit the business of any customer, investor or partner of the
          Company, or induce any such customer, investor or partner to terminate
          their relationship with the Company.

7)   INDEMNIFICATION. The Executive shall be entitled to indemnification from
the Company to the fullest extent permitted by the Company's Articles of
Organization, By-laws, shareholder resolutions and/or applicable law.

8)   ENTIRE AGREEMENT; CONFLICTS. This Agreement, the Nondisclosure Agreement,
and any stock option agreement between the Executive and the Company, contain
the entire agreement between the Company and the Executive concerning the
Executive's employment by the Company and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or
oral, between them with respect to the subject matter herein. The Executive and
the Company (except as may be required in the course of the Company doing
business) agree to keep the terms of this Agreement strictly confidential. The
Executive represents that he is not bound by any agreement or any other existing
or previous business relationship that conflicts with, or may conflict with, the
performance of his obligations hereunder or prevent the full performance of his
duties and obligations hereunder.

9)   AMENDMENTS OR WAIVER. This Agreement cannot be changed, modified or amended
without the consent in writing of both the Executive and the Company. No waiver
by either the Company or the Executive at any time of any breach by the other
party of any condition or provision of this Agreement shall be deemed a waiver
of a similar or dissimilar condition or provision at the same or at any prior or
subsequent time. Any waiver must be in writing and signed by the Executive or an
authorized officer of the Company, as the case may be (other than the
Executive).

10)  SEVERABILITY. In the event that any provision or portion of this Agreement
or the other agreements executed in connection with the transactions
contemplated hereby for any reason shall be determined to be invalid or
unenforceable for any reason, in whole or in part, such provisions will be
reformed to the extent possible so as to effectuate the intent of this
Agreement. In addition, the remaining provisions of this Agreement or such other
agreements shall be unaffected thereby and shall be construed, reformed and thus
remain in full force and effect to the fullest extent permitted by law.
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11)  SURVIVAL. The Executive agrees that Sections 4, 5, 6, 7, 8, 9, 10, 12, 13
and 14, any agreements between the Executive and the Company referenced herein,
and such other provisions to the extent necessary to the intended preservation
of such rights and obligations, shall survive any termination of this Agreement.

12)  GOVERNING LAW AND JURISDICTION; ARBITRATION. This Agreement shall be
governed by and construed and interpreted in accordance with the laws of
Massachusetts, USA, without reference to principles of conflict of laws. Any
dispute, controversy or claim arising out of or in connection with this
Agreement shall be exclusively subject to arbitration before the American
Arbitration Association ("AAA") in Boston, Massachusetts, before a single
arbitrator in accordance with the AAA's then current Employment Arbitration
Rules. Judgment upon any arbitration award may be entered in any court of
competent jurisdiction. All parties shall cooperate in the process of
arbitration for the purpose of expediting discovery and completing the
arbitration proceedings. Nothing contained in this Section or elsewhere in this
Agreement shall in any way deprive either party of its right to obtain
injunctive or other equitable relief in a court of competent jurisdiction.

13)  NOTICES; MISCELLANEOUS.

     a)   Any notice given to either party shall be in writing and shall be
          deemed to have been given when delivered personally or sent by
          certified or registered mail, postage prepaid, return receipt
          requested, duly addressed to the party concerned, if to the Company,
          addressed to the BOD at the Company's principal executive offices, and
          if to the Executive, at the address of the Executive shown on the
          Company's records, or at such other address as such party may give
          written notice of.

     b)   The headings of the Sections contained in this Agreement are for
          convenience only and shall not be deemed to control or affect the
          meaning or construction of any provision of this Agreement.

     c)   This Agreement may be executed in two or more counterparts.

     d)   the Company shall make such deductions and withhold such amounts from
          each payments and benefits made or provided to the Executive
          hereunder, as may be required from time to time by applicable law,
          governmental regulation or order.

14)  ASSIGNMENT; SUCCESSORS. The Company may assign this Agreement. This
Agreement is personal in its nature and therefore the Executive cannot assign
this Agreement without the consent of the BOD. This Agreement will inure to the
benefit of the Company's successors and assigns, and such successor or assign
shall discharge and perform all the promises, covenants, duties and obligations
of the Company hereunder, and all references herein to "NetSilicon" or "Company"
shall refer to such successor.

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15)  WITHHOLDING.

     (a)  Any payments made to the Executive pursuant to this Agreement
(including without limitation the acceleration of options pursuant to this
Agreement) shall be subject to all applicable federal, state and local taxes
and/or withholding.

     (b)  If the Company in its discretion determines that it is obligated to
withhold any tax in connection with any payment under this Agreement, or in
connection with the acceleration of any option pursuant to this Agreement, the
Executive hereby agrees that the Company may withhold from any amounts paid, or
to be paid, under this Agreement, including the Executive's wages or other
remuneration, the appropriate amount of such tax (as permitted under applicable
law). The Executive further agrees that, if the Company does not withhold an
amount from the Executive's wages or other remuneration (including any
remuneration paid pursuant to this Agreement) sufficient to satisfy the
withholding obligation of the Company, the Executive will make reimbursement on
demand, in cash, for the amount underwithheld.

IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated
Employment Agreement as of the date first above written as an instrument under
seal.

THE COMPANY                                  EXECUTIVE

By: /s/ Cornelius Peterson, VIII             /s/ Daniel J. Sullivan
   -------------------------------           -----------------------------------
                                             Signature
Title:
      ----------------------------           -----------------------------------
                                             Street Address

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                                             City         State         Zip Code<PAGE>   1

                                                                    EXHIBIT 10.1

                                          (As amended through June 5, 2001)(1)

                             THE TJX COMPANIES, INC.
                              STOCK INCENTIVE PLAN

---------------
(1) All share numbers reflect adjustments through February 2, 1999.

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                                TABLE OF CONTENTS

                                                                  PAGE
                                                                  ----

SECTION 1. NAME; EFFECTIVE DATE; GENERAL PURPOSE..................  2

SECTION 2. PLAN ADMINISTRATION....................................  2

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

SECTION 4. ELIGIBILITY............................................  4

SECTION 5. LIMITATIONS ON TERM AND DATES OF AWARDS................  4

SECTION 6. STOCK OPTIONS..........................................  4

SECTION 7. OTHER STOCK-BASED AWARDS...............................  8

SECTION 8. PERFORMANCE AWARDS....................................  10

SECTION 9. TRANSFER, LEAVE OF ABSENCE............................  11

SECTION 10. AMENDMENTS AND TERMINATION...........................  12

SECTION 11. STATUS OF PLAN.......................................  12

SECTION 12. CHANGE OF CONTROL PROVISIONS.........................  12

SECTION 13. GENERAL PROVISIONS...................................  13

SECTION 14. DEFINITIONS..........................................  14

                                       i
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                             THE TJX COMPANIES, INC.
                              STOCK INCENTIVE PLAN

SECTION 1.        NAME; EFFECTIVE DATE; GENERAL PURPOSE

         The name of the plan is The TJX Companies, Inc. Stock Incentive Plan
(the "Plan"). The Plan is an amendment and restatement, effective as to Awards
made on or after April 11, 2001, of The TJX Companies, Inc. 1986 Stock Incentive
Plan. In the case of an Award made prior to April 11, 2001, the terms of such
Award (including the applicable provisions of the Plan as in effect when such
Award was granted) shall apply.

         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 stock
ownership and the receipt of incentive awards by selected key employees and
directors 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 individuals by providing an opportunity for
capital appreciation and giving suitable recognition for services which
contribute materially to the success of the Company. Initially capitalized terms
used in the Plan shall have the meaning set forth in Section 14.

SECTION 2.        PLAN ADMINISTRATION

         The Plan shall be administered by a committee (the "Committee") of one
or more directors appointed by the Board and serving at the pleasure of the
Board. In respect of any action relating to an Award to an executive officer of
the Company for which compliance with the committee-composition requirements of
Rule 16b-3 promulgated under the Act or of Section 162(m)(3)(C)(i) of the Code
would be required to obtain exemption under Rule 16b-3 or Section 162(m), as the
case may be, with respect to the Award, the Committee shall consist of not less
than two directors, each of whom is both a Non-Employee Director and an Outside
Director. If at any time the Committee shall include one or more members who are
not Non-Employee Directors or Outside Directors, a subcommittee consisting
solely of two or more Non-Employee Directors and Outside Directors shall
constitute the Committee for purposes of the immediately preceding sentence.

         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 from among those eligible the persons to whom
                  Awards may from time to time be granted;

            (ii)  to determine the time or times of grant of any Awards;

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

            (iv)  to determine the terms and conditions of any Award; and

            (v)   to adopt 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; to prescribe such
                  forms and agreements as it deems advisable in connection with
                  any Award; to make all determinations it deems advisable for
                  the administration of the Plan; to decide all disputes arising
                  in connection with the Plan; and otherwise to 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 54,500,000, 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. The maximum number of shares of Stock which may be
issued pursuant to Awards of Restricted Stock or Performance Awards on or after
June 5, 2001 shall not exceed an aggregate of 2,187,500 shares. Shares issued
under the Plan may be authorized but unissued shares or shares reacquired by the
Company.

         The number of Stock Options or Performance Awards that shall be awarded
to any Participant during any consecutive three-year period commencing after
June 3, 1997 shall be limited to 4,000,000 shares calculated separately for each
of Stock Options 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

                                      -3-
<PAGE>   5

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 become employees or Eligible Directors of the Company or a
Subsidiary as described in the first sentence of Section 4 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 limitations set forth in Section
3(a) on the number of shares available for issuance under Awards, and such
substitute Awards shall not be subject to the per-participant Award limitation
described in the last sentence of Section 3(a).

SECTION 4.        ELIGIBILITY.

         Participants in the Plan will be (i) such full or part time officers
and other key employees of the Company and its Subsidiaries 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, and (ii) Eligible Directors. Persons who are not employees of
the Company or a subsidiary (within the meaning of Section 424 of the Code)
shall not be eligible to receive grants of ISOs.

SECTION 5.        LIMITATIONS ON TERM AND DATES OF AWARDS.

         (a) DURATION OF AWARDS. Subject to Sections 13(a) and 13(d) below, no
restrictions or limitations on Awards shall extend beyond 10 years from the
grant date (10 years and one day in the case of NSOs), 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.

                                      -4-
<PAGE>   6

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 ISOs or NSOs. Any Stock Option that is not expressly designated as
an ISO at time of grant shall be deemed to have been expressly designated at
time of grant as an NSO. Anything in the Plan to the contrary notwithstanding,
no term of this Plan relating to ISOs shall be interpreted, amended or altered,
nor shall any discretion or authority granted to the Committee under the Plan be
exercised, so as to disqualify the Plan or, without the consent of the optionee,
any ISO 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.

         (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) METHOD OF EXERCISE. The person holding a Stock Option may exercise
the Stock Option 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 NSOs,
after) grant, payment in full or in part of the exercise price or to pay
withholding taxes (as provided in Section 13(d)) may also be made in the form of
shares of Stock not then subject to restrictions under any Company plan. The
person holding a Stock Option 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, the
Plan does not permit the exercise of a Stock Option in successive stages
(pyramiding) using as payment at each stage shares which have been acquired
under the option in preceding stages.

                                      -5-
<PAGE>   7

         (e) NON-TRANSFERABILITY OF OPTIONS. No ISO (and, except as determined
by the Committee, no NSO) shall be transferable by the person to whom such Stock
Option was granted otherwise than by will or by the laws of descent and
distribution, and all ISOs (and, except as determined by the Committee, all
NSOs) shall be exercisable during the lifetime of the person to whom such Stock
Options were granted only by such person.

         (f) TERMINATION BY DEATH. If the employment by the Company and its
Subsidiaries of a person to whom a Stock Option was granted 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
decedent, for a period of five years (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.

         (g) TERMINATION BY REASON OF DISABILITY. If the employment by the
Company and its Subsidiaries of a person to whom a Stock Option was granted
terminates by reason of Disability, or if such person has been designated an
inactive employee by reason of Disability, any Stock Option previously granted
to such person 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 determine prior to
such termination or designation) for a period of five years (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 during the final year of such exercise period of
the person to whom such Stock Option was granted shall, if such person still
holds such Stock Option, 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.

         (h) TERMINATION BY REASON OF NORMAL RETIREMENT. If the employment by
the Company and its Subsidiaries of a person to whom a Stock Option has been
granted terminates by reason of Normal Retirement, the Stock Option 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 five years (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 during the final year of such exercise
period of the person to whom such Stock Option was granted shall, if such person
still holds such Stock Option, extend such period for one year following death,
subject to termination on the expiration of the stated term of the option, if
earlier.

                                      -6-
<PAGE>   8

         (i) TERMINATION BY REASON OF SPECIAL SERVICE RETIREMENT. If the
employment by the Company and its Subsidiaries of a person to whom a Stock
Option has been granted terminates by reason of a Special Service Retirement,
the Stock Option may thereafter be exercised (to the extent exercisable from
time to time during the extended exercise period as hereinafter determined) for
a period of five years (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 during the final year
of such exercise period of the person to whom such Stock Option was granted
shall, if such person still holds such Stock Option, extend such period for one
year following death, subject to termination on the expiration of the stated
term of the option, if earlier. A Stock Option that is outstanding but not yet
fully exercisable at the date of the Special Service Retirement of the person to
whom the Stock Option was granted shall continue to become exercisable, over the
period of three years following the Special Service Retirement Date (subject to
the stated term of the option, or on such accelerated or other basis as the
Committee shall at any time determine), on the same basis as if such person had
not retired.

         (j) OTHER TERMINATION. If the employment by the Company and its
Subsidiaries of a person to whom a Stock Option has been granted terminates for
any reason other than death, Disability, Normal Retirement, Special Service
Retirement or for Cause, the Stock Option 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 the
employment of such person terminates or is terminated for Cause, the unexercised
portion of any Stock Option previously granted to such person shall immediately
terminate.

         (k) FORM OF SETTLEMENT. Subject to Section 13(a) and Section 13(d)
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 shall be
issued on a deferred basis, or may reserve the right to so provide after time of
grant.

         (l) OPTIONS FOR CERTAIN DIRECTORS. Except as the Board may otherwise
determine, an NSO shall annually be granted hereunder to each Eligible Director.
Each such Award shall be granted in accordance with the generally applicable
provisions of this Section 6, subject to the following:

                                      -7-
<PAGE>   9

                  (i) The grant and all terms of the Award, including the number
         of shares of Stock subject to each Award shall, subject to the special
         provisions of this subsection (l), be determined by the Board rather
         than by the Committee.

                  (ii) Each Award shall vest and become exercisable one year
         after the date of grant, provided that the Award recipient is then
         still a Director or has ceased to be a Director and is still alive at
         such one-year anniversary.

                  (iii) The provisions of subsections (h) ("Termination by
         Reason of Normal Retirement"), (i) ("Termination by Reason of Special
         Service Retirement") and (j) ("Other Termination") shall not apply to
         Awards pursuant to this subsection (l). If an individual to whom an
         Award has been granted pursuant to this subsection (i) ceases to be a
         Director for any reason, such Award, to the extent then or thereafter
         vested, shall be exercisable for a period of five years from the date
         of such cessation of Board service or until the end of the stated term
         of the Award if earlier; provided, that if the former Director dies
         within the last year of such five-year period while holding the Award
         and before the Award has been exercised or has expired, the Award shall
         remain exercisable for a period of one year following death (or until
         the end of the stated term of the Award, if earlier).

         (m) DISCRETIONARY PAYMENTS. 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,
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 another form of payment acceptable both to the Committee and the
person exercising the option) 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 (m) only in the event
of a written request of the person exercising the option, which request shall
not be binding on the Committee.

SECTION 7.        OTHER STOCK-BASED AWARDS.

         (a) NATURE OF STOCK AWARDS. Awards under this Section 7 include Awards
other than Stock Options that entitle the recipient to acquire for a purchase
price (which may be zero) shares of Stock subject to restrictions under the Plan
(including a right on the part of the Company during a specified period to
repurchase such shares at their original purchase price, or to require
forfeiture if the purchase price was zero, upon the participant's

                                      -8-
<PAGE>   10

termination of employment) determined by the Committee ("Restricted Stock");
Awards that entitle the recipient to acquire for a purchase price (which may be
zero) shares of Stock not subject to any such restrictions; Awards that entitle
the recipient, with or without payment, to the future delivery of shares of
Stock, subject to such conditions and restrictions as may be determined by the
Committee; and other Awards under which Stock may be acquired or which are
otherwise based on the value of Stock. The same per-participant Award limitation
as is described in the last sentence of Section 3(a) shall be applied as a
separate limitation to any Other Stock-based Awards described in Treas. Regs.
ss. 1.162-27(e)(2)(vi).

         (b) RIGHTS AS A SHAREHOLDER. A participant shall have all the rights of
a shareholder, including voting and dividend rights, (i) only as to shares of
Stock actually received by the participant under an Other Stock-based Award, and
(ii) in any case, subject to such nontransferability restrictions, Company
repurchase or forfeiture rights, and other conditions as are made applicable to
the Award. 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.

         (c) RESTRICTIONS. The Committee may determine the conditions under
which an Other Stock-based Award, or Stock acquired under an Other Stock-based
Award, shall be forfeited, and may at any time accelerate, waive or, subject to
Section 10, amend any or all of such limitations or conditions. Each Award of
shares of Restricted Stock shall specify the terms on which such shares shall
vest (become free of restrictions under the Plan), which may include, without
limitation, terms that provide for vesting on a specified date or dates, vesting
based on the satisfaction of specified performance conditions, and accelerated
vesting in the event of termination of employment under specified circumstances;
provided, that no grants of Restricted Stock shall specify a vesting 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) 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 shares. Except as
otherwise determined by the Committee, (A) neither any Other Stock-based Award
nor any unvested Restricted Stock acquired under an Other Stock-based Award may
be sold, assigned, transferred, pledged or otherwise encumbered or disposed of
except as specifically provided herein, and (B) in the event of termination of
employment with the Company and its Subsidiaries for any reason, any shares of
Restricted Stock that are not then vested (taking into account any accelerated
vesting applicable to such shares under the terms of the Award or otherwise)
shall be resold to the Company at their purchase price or forfeited to the
Company if the purchase price was

                                      -9-
<PAGE>   11

zero. The Committee at any time may accelerate the vesting date or dates
for an Other Stock-based Award or for Restricted Stock, if any, granted
thereunder and may otherwise waive or, subject to Section 10, amend any
conditions of the Award.

         (d) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS; DIVIDEND
EQUIVALENTS. An Other Stock-based Award may require or permit the immediate
payment, waiver, deferral or investment of dividends paid on Stock delivered
under the Award and in the case of Stock subject to such an Award but not yet
delivered under the Award may provide for the payment, deferral or investment of
amounts determined by reference to dividends that would have been payable on
such Stock had it been outstanding.

SECTION 8.        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 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), 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 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

                                      -10-
<PAGE>   12

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) 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.

         (e) 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).

         (f) 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 10, amend any or all
of the goals, restrictions or conditions imposed under any Performance Award.

SECTION 9.        TRANSFER, LEAVE OF ABSENCE.

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

         (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, but in each
                  case only 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.

                                      -11-
<PAGE>   13

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 10.       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) effect a change which, in the determination of the
Committee, would jeopardize the qualification of an Award that the Committee has
determined is intended to qualify (and to continue to qualify) as an ISO or as
exempt performance based compensation under Section 162(m) of the Code.
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.

SECTION 11.       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 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 12.       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 shall automatically become fully exercisable
                  unless the Committee shall otherwise expressly provide at the
                  time of grant.

                                      -12-
<PAGE>   14

         (ii)     Restrictions and conditions on Other Stock-based Awards
                  (including without limitation Restricted Stock) and
                  Performance Awards shall automatically be deemed waived unless
                  the Committee shall otherwise expressly provide at the time of
                  grant.

The Committee may at any time prior to or after a Change of Control accelerate
the exercisability of any Stock Options and may waive restrictions, limitations
and conditions on Other Stock-based Awards (including without limitation
Restricted Stock) and Performance Awards to the extent it shall in its sole
discretion determine.

SECTION 13.       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) REFERENCES TO EMPLOYMENT. Wherever reference is made herein to
"employee," "employment" (or correlative) terms, except in Section 4, the term
shall be deemed to include both common law employees and others.

         (c) 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 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.

         (d) 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.

                                      -13-
<PAGE>   15

         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.

         (e) 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 14.        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 continuing operations and aggregate
         or per share basis; (iii) return on investment, capital, assets, sales
         or revenues; and (iv) stock price. In determining whether a performance
         goal based on one or more Approved Performance Criteria has been
         satisfied for any period, any extraordinary item, change in generally
         accepted accounting principles, or change in law (including
         regulations) that would affect the determination as to whether such
         performance goal had been achieved will automatically be disregarded or
         taken into account, whichever would cause such performance goal to be
         more likely to be achieved; provided, that nothing herein shall be
         construed as limiting the Committee's authority to reduce or eliminate
         a Performance Award (including, without limitation, by restricting
         vesting under any such Award) that would otherwise be deemed to have
         been earned.

                 (c) "Award" or "Awards" except where referring to a particular
         category of grant under the Plan shall include Stock Options, Other
         Stock-based Awards and Performance Awards.

                                      -14-
<PAGE>   16

                 (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) "Company" is defined in Section 1.

                 (i) "Director" means a member of the Board.

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

                 (k) "Eligible Director" means a Director who is not employed
         (other than as a Director) by the Company or by any Subsidiary.

                 (l) "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.

                 (m) "ISO" means a Stock Option intended to be and designated
         as an "incentive stock option" as defined in the Code.

                 (n) "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.

                 (o) "NSO" means any Stock Option that is not an ISO.

                 (p) "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.

                                      -15-
<PAGE>   17

                 (q) "Other Stock-based Award" means an Award of one of the
         types described in Section 7.

                 (r) "Outside Director" means a member of the Board who is
         treated as an "outside director" for purposes of Section 162(m) of the
         Code.

                 (s) "Performance Award" means an Award described in Section 8.

                 (t) "Plan" is defined in Section 1.

                 (u) "Restricted Stock" is defined in Section 7(a).

                 (v) "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.

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

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

                 (y) "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.

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

                                      -16-
<PAGE>   18

                                                                       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

                                      -17-
<PAGE>   19

                  (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.

                                      -18-
<PAGE>   20

         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 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.

                                      -19-

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