THE 1996 EQUITY PARTICIPATION PLAN

 

                                                                    EXHIBIT 10.3

                      THE 1996 EQUITY PARTICIPATION PLAN
                                      OF
                            SIGNATURE RESORTS, INC.

          Signature Resorts, Inc., a Maryland corporation, has adopted The 1996
Equity Participation Plan of Signature Resorts, Inc. (the "Plan"), effective
June 13, 1996, for the benefit of its eligible employees, consultants and
directors.  The Plan consists of two plans, one for the benefit of key Employees
(as such term is defined below), Independent Directors (as such term is defined
below) and consultants and another solely for the benefit of Independent
Directors.

          The purposes of this Plan are as follows:

          (1) To provide an additional incentive for directors, key Employees
and consultants to further the growth, development and financial success of the
Company by personally benefiting through the ownership of Company stock and/or
rights which recognize such growth, development and financial success.

          (2) To enable the Company to obtain and retain the services of
directors, key Employees and consultants considered essential to the long range
success of the Company by offering them an opportunity to own stock in the
Company and/or rights which will reflect the growth, development and financial
success of the Company.

                                   ARTICLE I

                                  DEFINITIONS

          1.1    General.  Wherever the following terms are used in this Plan
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they shall have the meaning specified below, unless the context clearly
indicates otherwise.

          1.2    Award Limit.  "Award Limit" shall mean four hundred fifty
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thousand (450,000) shares of Common Stock.

          1.3    Board.  "Board" shall mean the Board of Directors of the
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Company.

          1.4    Change in Control.  "Change in Control" shall mean a change in
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ownership or control of the Company effected through either of the following
transactions:

          (a) any person or related group of persons (other than the Company or
     a person that directly or indirectly controls, is controlled by, or is
     under common control with, the Company) directly or indirectly acquires
     beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
     Act) of securities possessing more than fifty percent (50%) of the total
     combined voting power of the Company's outstanding securities pursuant to a
     tender or exchange offer made directly to the Company's stockholders which
     the Board does not recommend such stockholders to accept; or

          (b) there is a change in the composition of the Board over a period of
     twenty-four (24) consecutive months (or less) such that a majority of the
     Board members (rounded up to the nearest whole number) ceases, by reason of
     one or more proxy contests for the election of Board members, to be
     comprised of individuals who either (i) have been Board members
     continuously since the beginning of such period or (ii) have been elected
     or nominated for election as Board 

     members during such period by at least a majority of the Board members
     described in clause (i) who were still in office at the time such election
     or nomination was approved by the Board.

          1.5    Code.  "Code" shall mean the Internal Revenue Code of 1986, as
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amended.

          1.6    Committee.  "Committee" shall mean the Compensation Committee
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of the Board, or another committee, or a subcommittee of the Board, appointed as
provided in Section 9.1.

          1.7    Common Stock.  "Common Stock" shall mean the common stock of
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the Company, par value $.01 per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any preferred
stock and any warrants, options or other rights to purchase Common Stock.  Debt
securities of the Company convertible into Common Stock shall be deemed equity
securities of the Company.

          1.8    Company.  "Company" shall mean Signature Resorts, Inc., a
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Maryland corporation.

          1.9    Corporate Transaction.  "Corporate Transaction" shall mean any
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of the following stockholder-approved transactions to which the Company is a
party:

          (a) a merger or consolidation in which the Company is not the
     surviving entity, except for a transaction the principal purpose of which
     is to change the State in which the Company is incorporated, form a holding
     company or effect a similar reorganization as to form whereupon this Plan
     and all Options are assumed by the successor entity;

          (b) the sale, transfer, exchange or other disposition of all or
     substantially all of the assets of the Company, in complete liquidation or
     dissolution of the Company in a transaction not covered by the exceptions
     to clause (a), above; or

          (c) any reverse merger in which the Company is the surviving entity
     but in which securities possessing more than fifty percent (50%) of the
     total combined voting power of the Company's outstanding securities are
     transferred to a person or persons different from those who held such
     securities immediately prior to such merger.

          1.10   Deferred Stock.  "Deferred Stock" shall mean Common Stock
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awarded under Article VII of this Plan.

          1.11   Director.  "Director" shall mean a member of the Board.
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          1.12   Dividend Equivalent.  "Dividend Equivalent" shall mean a right
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to receive the equivalent value (in cash or Common Stock) of dividends paid on
Common Stock, awarded under Article VII of this Plan.

          1.13   Employee.  "Employee" shall mean any officer or other employee
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(as defined in accordance with Section 3401(c) of the Code) of the Company, or
of any corporation which is a Subsidiary.

          1.14   Exchange Act.  "Exchange Act" shall mean the Securities
                 ------------                                           
Exchange Act of 1934, as amended.

          1.15   Fair Market Value.  "Fair Market Value" of a share of Common
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Stock as of a given date shall be (i) the closing price of a share of Common
Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on the trading day previous to such date, or if shares were
not traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred, or (ii) if Common Stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system, the mean
between the closing representative bid and asked prices for the Common Stock on
the trading day previous to such date as reported by NASDAQ or such successor
quotation system; or (iii) if Common Stock is not publicly traded on an exchange
and not quoted on NASDAQ or a successor quotation system, the Fair Market Value
of a share of Common Stock as established by the Committee (or the Board, in the
case of grants to Independent Directors) acting in good faith.

          1.16   Grantee.  "Grantee" shall mean an Employee, Independent
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Director or consultant granted a Performance Award, Dividend Equivalent, Stock
Payment or Stock Appreciation Right, or an award of Deferred Stock, under this
Plan.

          1.17   Incentive Stock Option.  "Incentive Stock Option" shall mean
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an option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Committee.

          1.18   Independent Director.  "Independent Director" shall mean a
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member of the Board who is not an Employee of the Company.

          1.19   Non-Qualified Stock Option.  "Non-Qualified Stock Option"
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shall mean an Option which is not designated as an Incentive Stock Option by the
Committee.

          1.20   Option.  "Option" shall mean a stock option granted under
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Article III of this Plan.  An Option granted under this Plan shall, as
determined by the Committee, be either a Non-Qualified Stock Option or an
Incentive Stock Option; provided, however, that Options granted to Independent
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Directors and consultants shall be Non-Qualified Stock Options.

          1.21  Optionee.  "Optionee" shall mean an Employee, consultant or 
                --------          
Independent Director granted an Option under this Plan.

          1.22   Performance Award.  "Performance Award" shall mean a cash
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bonus, stock bonus or other performance or incentive award that is paid in cash,
Common Stock or a combination of both, awarded under Article VII of this Plan.

          1.23   Plan.  "Plan" shall mean The 1996 Equity Participation Plan of
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Signature Resorts, Inc.

          1.24   QDRO.  "QDRO" shall mean a qualified domestic relations order
                 ----                                                         
as defined by the Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the rules thereunder.

          1.25   Restricted Stock.  "Restricted Stock" shall mean Common Stock
                 ----------------                                             
awarded under Article VI of this Plan.

          1.26   Restricted Stockholder.  "Restricted Stockholder" shall mean
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an Employee, Independent Director or consultant granted an award of Restricted
Stock under Article VI of this Plan.

          1.27   Rule 16b-3.  "Rule 16b-3" shall mean that certain Rule 16b-3
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under the Exchange Act, as such Rule may be amended from time to time.

          1.28   Stock Appreciation Right.  "Stock Appreciation Right" shall
                 ------------------------                                   
mean a stock appreciation right granted under Article VIII of this Plan.

          1.29   Stock Payment.  "Stock Payment" shall mean (i) a payment in
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the form of shares of Common Stock, or (ii) an option or other right to purchase
shares of Common Stock, as part of a deferred compensation arrangement, made in
lieu of all or any portion of the compensation, including without limitation,
salary, bonuses and commissions, that would otherwise become payable to a key
Employee, Independent Director or consultant in cash, awarded under Article VII
of this Plan.

          1.30   Subsidiary.  "Subsidiary" shall mean (i) any corporation in an
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unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain and (ii) any
partnership or limited liability company in which the Company (A) directly or
indirectly holds a managing partner or managing member interest or (B) is
entitled to 50 percent or more of the profits or assets upon dissolution.

          1.31   Termination of Consultancy.   "Termination of Consultancy"
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shall mean the time when the engagement of an Optionee, Grantee or Restricted
Stockholder as a consultant to the Company or a Subsidiary is terminated for any
reason, with or without cause, including, but not by way of limitation, by
resignation, discharge, death or retirement; but excluding terminations where
there is a simultaneous commencement of employment with the Company or any
Subsidiary.  The Committee, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Consultancy,
including, but not by way of limitation, the question of whether a Termination
of Consultancy resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Terminations of Consultancy.
Notwithstanding any other provision of this Plan, the Company or any Subsidiary
has an absolute and unrestricted right to terminate a consultant's service at
any time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.

          1.32   Termination of Directorship.  "Termination of Directorship"
                 ---------------------------                                
shall mean the time when an Optionee who is an Independent Director ceases to be
a Director for any reason, including, but not by way of limitation, a
termination by resignation, failure to be elected, death or retirement.  The
Board, in its sole and absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Directorship with respect to
Independent Directors.

          1.33   Termination of Employment.  "Termination of Employment" shall
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mean the time when the employee-employer relationship between an Optionee,
Grantee or Restricted Stockholder and the Company or any Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding (i) terminations where there is a simultaneous
reemployment or continuing employment of an Optionee, Grantee or Restricted
Stockholder by the Company or any Subsidiary, (ii) at the discretion of the
Committee, terminations which result in a temporary severance of the employee-
employer relationship, and (iii) at the discretion of the Committee,
terminations which are followed by the 

simultaneous establishment of a consulting relationship by the Company or a
Subsidiary with the former employee. The Committee, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination
of Employment, including, but not by way of limitation, the question of whether
a Termination of Employment resulted from a discharge for good cause, and all
questions of whether particular leaves of absence constitute Terminations of
Employment; provided, however, that, with respect to Incentive Stock Options, a
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leave of absence, change in status from an employee to an independent contractor
or other change in the employee-employer relationship shall constitute a
Termination of Employment if, and to the extent that, such leave of absence,
change in status or other change interrupts employment for the purposes of
Section 422(a)(2) of the Code and the then applicable regulations and revenue
rulings under said Section. Notwithstanding any other provision of this Plan,
the Company or any Subsidiary has an absolute and unrestricted right to
terminate an Employee's employment at any time for any reason whatsoever, with
or without cause, except to the extent expressly provided otherwise in writing.

                                   ARTICLE II

                             SHARES SUBJECT TO PLAN

          2.1    Shares Subject to Plan.
                 ---------------------- 

          (a) The shares of stock subject to Options, awards of Restricted
Stock, Performance Awards, Dividend Equivalents, awards of Deferred Stock, Stock
Payments or Stock Appreciation Rights shall be Common Stock, initially shares of
the Company's Common Stock, par value $.01 per share.  The aggregate number of
such shares which may be issued upon exercise of such options or rights or upon
any such awards under the Plan shall not exceed one million seven hundred fifty
thousand (1,750,000) shares of Common Stock.  The shares of Common Stock
issuable upon exercise of such options or rights or upon any such awards may be
either previously authorized but unissued shares or treasury shares.

          (b) The maximum number of shares which may be subject to options or
Stock Appreciation Rights granted under the Plan to any individual in any fiscal
year shall not exceed the Award Limit.  To the extent required by Section 162(m)
of the Code, shares subject to Options which are canceled continue to be counted
against the Award Limit and if, after grant of an Option, the price of shares
subject to such Option is reduced, the transaction is treated as a cancellation
of the Option and a grant of a new Option and both the Option deemed to be
canceled and the Option deemed to be granted are counted against the Award
Limit.  Furthermore, to the extent required by Section 162(m) of the Code, if,
after grant of a Stock Appreciation Right, the base amount on which stock
appreciation is calculated is reduced to reflect a reduction in the Fair Market
Value of the Company's Common Stock, the transaction is treated as a
cancellation of the Stock Appreciation Right and a grant of a new Stock
Appreciation Right and both the Stock Appreciation Right deemed to be canceled
and the Stock Appreciation Right deemed to be granted are counted against the
Award Limit.

          2.2    Add-back of Options and Other Rights.  If any Option, or other
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right to acquire shares of Common Stock under any other award under this Plan,
expires or is canceled without having been fully exercised, or is exercised in
whole or in part for cash as permitted by this Plan, the number of shares
subject to such Option or other right but as to which such Option or other right
was not exercised prior to its expiration, cancellation or exercise may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1.  Furthermore, any shares subject to Options or other awards which are
adjusted pursuant to Section 10.3 and become exercisable with respect to shares
of 

stock of another corporation shall be considered cancelled and may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1.   Shares of Common Stock which are delivered by the Optionee or Grantee or
withheld by the Company upon the exercise of any Option or other award under
this Plan, in payment of the exercise price thereof, may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1.  If any
share of Restricted Stock is forfeited by the Grantee or repurchased by the
Company pursuant to Section 6.6 hereof, such share may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1.
Notwithstanding the provisions of this Section 2.2, no shares of Common Stock
may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an incentive stock option under
Section 422 of the Code.

                                   ARTICLE III

                              GRANTING OF OPTIONS

          3.1    Eligibility.  Any Employee, Independent Director or consultant
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selected by the Committee pursuant to Section 3.4(a)(i) shall be eligible to be
granted an Option.  In addition, each Independent Director of the Company shall
be eligible to be granted Options at the times and in the manner set forth in
Section 3.4(d).

          3.2    Disqualification for Stock Ownership.  No person may be
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granted an Incentive Stock Option under this Plan if such person, at the time
the Incentive Stock Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any then existing Subsidiary or parent corporation (within the
meaning of Section 422 of the Code) unless such Incentive Stock Option conforms
to the applicable provisions of Section 422 of the Code.

          3.3    Qualification of Incentive Stock Options.  No Incentive Stock
                 ----------------------------------------                     
Option shall be granted unless such Option, when granted, qualifies as an
"incentive stock option" under Section 422 of the Code.  No Incentive Stock
Option shall be granted to any person who is not an Employee.

          3.4    Granting of Options
                 -------------------

          (a)    The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of this Plan:

            (i)  Determine which Employees are key Employees and select from
among the key Employees, Independent Directors or consultants (including
Employees, Independent Directors or consultants who have previously received
Options or other awards under this Plan) such of them as in its opinion should
be granted Options;

            (ii) Subject to the Award Limit, determine the number of shares to
be subject to such Options granted to the selected key Employees, Independent
Directors or consultants;

            (iii) Determine whether such Options are to be Incentive Stock
Options or Non-Qualified Stock Options and whether such Options are to qualify
as performance-based compensation as described in Section 162(m)(4)(C) of the
Code; and

            (iv) Determine the terms and conditions of such Options, consistent
with this Plan; provided, however, that the terms and conditions of Options
                --------  -------
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall include, but not be limited to, such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code.

          (b)       Upon the selection of a key Employee, Independent Director
or consultant to be granted an Option, the Committee shall instruct the
Secretary of the Company to issue the Option and may impose such conditions on
the grant of the Option as it deems appropriate.  Without limiting the
generality of the preceding sentence, the Committee may, in its discretion and
on such terms as it deems appropriate, require as a condition on the grant of an
Option to an Employee, Independent Director or consultant that the Employee,
Independent Director or consultant surrender for cancellation some or all of the
unexercised Options, awards of Restricted Stock or Deferred Stock, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock Payments or
other rights which have been previously granted to him under this Plan or
otherwise.  An Option, the grant of which is conditioned upon such surrender,
may have an option price lower (or higher) than the exercise price of such
surrendered Option or other award, may cover the same (or a lesser or greater)
number of shares as such surrendered Option or other award, may contain such
other terms as the Committee deems appropriate, and shall be exercisable in
accordance with its terms, without regard to the number of shares, price,
exercise period or any other term or condition of such surrendered Option or
other award.

          (c)     Any Incentive Stock Option granted under this Plan may be
modified by the Committee to disqualify such option from treatment as an
"incentive stock option" under Section 422 of the Code.

          (d)     During the term of the Plan, each person who is an Independent
Director as of the date of the consummation of the initial public offering of
Common Stock automatically shall be granted (i) an Option to purchase fifteen
thousand (15,000) shares of Common Stock (subject to adjustment as provided in
Section 10.3) on the date of such initial public offering and (ii) an Option to
purchase fifteen thousand (15,000) shares of Common Stock (subject to adjustment
as provided in Section 10.3) on the third anniversary of such grant; provided
                                                                     --------
that such Independent Director serves as a member of the Board on such third
anniversary.  During the term of the Plan, a person who is initially elected to
the Board after the consummation of the initial public offering of Common Stock
and who is an Independent Director at the time of such initial election
automatically shall be granted (i) an Option to purchase fifteen thousand
(15,000) shares of Common Stock (subject to adjustment as provided in Section
10.3) on the date of such initial election and (ii) an Option to purchase
fifteen thousand (15,000) shares of Common Stock (subject to adjustment as
provided in Section 10.3) on the third anniversary of such grant; provided that
                                                                  --------     
such Independent Director serves as a member of the Board on such third
anniversary.  Members of the Board who are employees of the Company and who
subsequently retire from the Company but remain on the Board, to the extent that
they are eligible, will receive Options as described in clause (i) of the
preceding sentence upon retirement from the Company and shall be eligible to
receive additional Options as described in and pursuant to the terms of clause
(ii) of the preceding sentence.  All the foregoing Option grants authorized by
this Section 3.4(d) are subject to stockholder approval of the Plan.

                                   ARTICLE IV

                                TERMS OF OPTIONS

          4.1   Option Agreement.  Each Option shall be evidenced by a written
                ----------------                                              
Stock Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Committee (or the Board, in the case of grants to Independent
Directors) shall determine, consistent with this Plan.  Stock Option Agreements
evidencing Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code.  Stock Option Agreements evidencing Incentive Stock Options
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.

          4.2   Option Price.  The price per share of the shares subject to
                ------------                                               
each Option shall be set by the Committee; provided, however, that such price
                                           --------  -------                 
shall be no less than the par value of a share of Common Stock, unless otherwise
permitted by applicable state law, and (i) in the case of Incentive Stock
Options and Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code, such price shall not be less than
100% of the Fair Market Value of a share of Common Stock on the date the Option
is granted; (ii) in the case of Incentive Stock Options granted to an individual
then owning (within the meaning of Section 424(d) of the Code) more than 10% of
the total combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation thereof (within the meaning of Section 422 of
the Code) such price shall not be less than 110% of the Fair Market Value of a
share of Common Stock on the date the Option is granted; and (iii) in the case
of grants to Independent Directors, such price shall equal 100% of the Fair
Market Value of a share of Common Stock pursuant to Section 3.4(d) on the date
the Option is granted; provided, however, that the price of each share subject
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to each Option granted to Independent Directors on the date of the initial
public offering of Common Stock shall equal the initial public offering price
per share of Common Stock.

          4.3   Option Term.  The term of an Option shall be set by the
                -----------                                            
Committee in its discretion; provided, however, that, (i) in the case of grants
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to Independent Directors pursuant to Section 3.4(d), the term shall be ten (10)
years from the date the Option is granted, without variation or acceleration
hereunder, but subject to Section 5.6, and (ii) in the case of Incentive Stock
Options, the term shall not be more than ten (10) years from the date the
Incentive Stock Option is granted, or five (5) years from such date if the
Incentive Stock Option is granted to an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or any Subsidiary or parent
corporation thereof (within the meaning of Section 422 of the Code).  Except as
limited by requirements of Section 422 of the Code and regulations and rulings
thereunder applicable to Incentive Stock Options, the Committee may extend the
term of any outstanding Option in connection with any Termination of Employment
or Termination of Consultancy of the Optionee, or amend any other term or
condition of such Option relating to such a termination.

          4.4   Option Vesting
                --------------

          (a)   The period during which the right to exercise an Option in whole
or in part vests in the Optionee shall be set by the Committee and the Committee
may determine that an Option may not be exercised in whole or in part for a
specified period after it is granted; provided, however, that Options granted to
                                      --------  -------                         
Independent Directors pursuant to Section 3.4(d) shall become exercisable in
cumulative annual 

installments of 33 1/3% on each of the first, second and third anniversaries of
the date of Option grant, without variation or acceleration hereunder except as
provided in Section 10.3(b). At any time after grant of an Option, the Committee
may, in its sole and absolute discretion and subject to whatever terms and
conditions it selects, accelerate the period during which an Option (except an
Option granted to an Independent Director pursuant to Section 3.4(d)) vests.

          (b)   No portion of an Option which is unexercisable at Termination of
Employment, Termination of Directorship or Termination of Consultancy, as
applicable, shall thereafter become exercisable, except as may be otherwise
provided by the Committee in the case of Options granted to Employees,
Independent Directors or consultants either in the Stock Option Agreement or by
action of the Committee following the grant of the Option.

          (c)   To the extent that the aggregate Fair Market Value of stock with
respect to which "incentive stock options" (within the meaning of Section 422 of
the Code, but without regard to Section 422(d) of the Code) are exercisable for
the first time by an Optionee during any calendar year (under the Plan and all
other incentive stock option plans of the Company and any Subsidiary) exceeds
$100,000, such Options shall be treated as Non-Qualified Options to the extent
required by Section 422 of the Code.  The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in which
they were granted.  For purposes of this Section 4.4(c), the Fair Market Value
of stock shall be determined as of the time the Option with respect to such
stock is granted.

          4.5   Consideration.  In consideration of the granting of an Option,
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the Optionee shall agree, in the written Stock Option Agreement, to remain in
the employ of (or to consult for or to serve as an Independent Director of, as
applicable) the Company or any Subsidiary for a period of at least one year
after the Option is granted or, in the case of an Independent Director, to the
end of such Independent Director's current Board term (or such shorter period as
may be fixed in the Stock Option Agreement or by action of the Committee or the
Board following grant of the Option).  Nothing in this Plan or in any Stock
Option Agreement hereunder shall confer upon any Optionee any right to continue
in the employ of, or as a consultant for, the Company or any Subsidiary, or as a
director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or without
good cause.

                                   ARTICLE V

                              EXERCISE OF OPTIONS

          5.1   Partial Exercise.  An exercisable Option may be exercised in
                ----------------                                            
whole or in part.  However, an Option shall not be exercisable with respect to
fractional shares and the Committee (or the Board, in the case of Options
granted to Independent Directors) may require that, by the terms of the Option,
a partial exercise be with respect to a minimum number of shares.

          5.2   Manner of Exercise.  All or a portion of an exercisable Option
                ------------------                                            
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company or his office:

          (a)   A written notice complying with the applicable rules established
by the Committee (or the Board, in the case of Options granted to Independent
Directors pursuant to Section 3.4(d)) stating that the Option, or a portion
thereof, is exercised.  The notice shall be signed by the Optionee or other
person then entitled to exercise the Option or such portion;

          (b)   Such representations and documents as the Committee (or the
Board, in the case of Options granted to Independent Directors pursuant to
Section 3.4(d)), in its absolute discretion, deems necessary or advisable to
effect compliance with all applicable provisions of the Securities Act of 1933,
as amended, and any other federal or state securities laws or regulations.  The
Committee or Board may, in its absolute discretion, also take whatever
additional actions it deems appropriate to effect such compliance including,
without limitation, placing legends on share certificates and issuing stop-
transfer notices to agents and registrars;

          (c)   In the event that the Option shall be exercised pursuant to
Section 10.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option; and

          (d)   Full cash payment to the Secretary of the Company for the shares
with respect to which the Option, or portion thereof, is exercised.  However,
the Committee (or the Board, in the case of Options granted to Independent
Directors pursuant to Section 3.4(d)), may in its discretion (i) allow a delay
in payment up to thirty (30) days from the date the Option, or portion thereof,
is exercised; (ii) allow payment, in whole or in part, through the delivery of
shares of Common Stock owned by the Optionee, duly endorsed for transfer to the
Company with a Fair Market Value on the date of delivery equal to the aggregate
exercise price of the Option or exercised portion thereof; (iii) allow payment,
in whole or in part, through the delivery of property of any kind which
constitutes good and valuable consideration; (iv) allow payment, in whole or in
part, through the delivery of a full recourse promissory note bearing interest
(at no less than such rate as shall then preclude the imputation of interest
under the Code) and payable upon such terms as may be prescribed by the
Committee or the Board, or (v) allow payment through any combination of the
consideration provided in the foregoing subparagraphs (ii), (iii) and (iv).  In
the case of a promissory note, the Committee (or the Board, in the case of
Options granted to Independent Directors pursuant to Section 3.4(d)) may also
prescribe the form of such note and the security to be given for such note.  The
Option may not be exercised, however, by delivery of a promissory note or by a
loan from the Company when or where such loan or other extension of credit is
prohibited by law.

          5.3     Conditions to Issuance of Stock Certificates.  The Company
                  --------------------------------------------              
shall not be required to issue or deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:

          (a)   The admission of such shares to listing on all stock exchanges
on which such class of stock is then listed;

          (b)   The completion of any registration or other qualification of
such shares under any state or federal law, or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental regulatory
body which the Committee or Board shall, in its absolute discretion, deem
necessary or advisable;

          (c)   The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee (or Board, in the case of
Options granted to Independent Directors pursuant to Section 3.4(d)) shall, in
its absolute discretion, determine to be necessary or advisable;

          (d)   The lapse of such reasonable period of time following the
exercise of the Option as the Committee (or Board, in the case of Options
granted to Independent Directors pursuant to Section 3.4(d)) may establish from
time to time for reasons of administrative convenience; and

          (e)   The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax.

          5.4   Rights as Stockholders.  The holders of Options shall not be,
                -----------------------                                       
nor have any of the rights or privileges of, stockholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company to such holders.

          5.5   Ownership and Transfer Restrictions.  The Committee (or Board,
                ------------------------------------                           
in the case of Options granted to Independent Directors pursuant to Section
3.4(d)), in its absolute discretion, may impose such restrictions on the
ownership and transferability of the shares purchasable upon the exercise of an
Option as it deems appropriate.  Any such restriction shall be set forth in the
respective Stock Option Agreement and may be referred to on the certificates
evidencing such shares.  The Committee may require the Employee to give the
Company prompt notice of any disposition of shares of Common Stock acquired by
exercise of an Incentive Stock Option within (i) two years from the date of
granting such Option to such Employee or (ii) one year after the transfer of
such shares to such Employee.  The Committee may direct that the certificates
evidencing shares acquired by exercise of an Option refer to such requirement to
give prompt notice of disposition.

          5.6  Limitations on Exercise of Options Granted to Independent 
               ---------------------------------------------------------
Directors Pursuant to Section 3.4(d). No Option granted to an Independent
- ------------------------------------
Director pursuant to Section 3.4(d) may be exercised to any extent by anyone
after the first to occur of the following events:

          (a)   The expiration of twelve (12) months from the date of the
Optionee's death;

          (b)   the expiration of twelve (12) months from the date of the
Optionee's Termination of Directorship by reason of his permanent and total
disability (within the meaning of Section 22(e)(3) of the Code);

          (c)   the expiration of three (3) months from the date of the
Optionee's Termination of Directorship for any reason other than such Optionee's
death or his permanent and total disability, unless the Optionee dies within
said three-month period; or

          (d)   The expiration of ten years from the date the Option was
granted.

                                   ARTICLE VI

                           AWARD OF RESTRICTED STOCK

          6.1   Award of Restricted Stock
                ------------------------- 

          (a)   The Committee may from time to time, in its absolute discretion:

                (i) Select from among the key Employees, Independent Directors
or consultants (including Employees, Independent Directors or consultants who
have previously

received other awards under this Plan) such of them as in its opinion should be
awarded Restricted Stock; and

               (ii) Determine the purchase price, if any, and other terms and
conditions applicable to such Restricted Stock, consistent with this Plan.

          (b)  The Committee shall establish the purchase price, if any, and
form of payment for Restricted Stock; provided, however, that such purchase
                                      --------  -------
price shall be no less than the par value of the Common Stock to be purchased,
unless otherwise permitted by applicable state law. In all cases, legal
consideration shall be required for each issuance of Restricted Stock.

          (c)   Upon the selection of a key Employee, Independent Director or
consultant to be awarded Restricted Stock, the Committee shall instruct the
Secretary of the Company to issue such Restricted Stock and may impose such
conditions on the issuance of such Restricted Stock as it deems appropriate.

          6.2   Restricted Stock Agreement.  Restricted Stock shall be issued
                ---------------------------                                   
only pursuant to a written Restricted Stock Agreement, which shall be executed
by the selected key Employee, Independent Director or consultant and an
authorized officer of the Company and which shall contain such terms and
conditions as the Committee shall determine, consistent with this Plan.

          6.3   Consideration.  As consideration for the issuance of Restricted
                --------------                                                  
Stock, in addition to payment of any purchase price, the Restricted Stockholder
shall agree, in the written Restricted Stock Agreement, to remain in the employ
of (or to consult for or serve as an Independent Director of, as applicable) the
Company or any Subsidiary for a period of at least one year after the Restricted
Stock is issued or, in the case of an Independent Director, to the end of such
Independent Director's current Board term (or such shorter period as may be
fixed in the Restricted Stock Agreement or by action of the Committee or the
Board following grant of the Restricted Stock).  Nothing in this Plan or in any
Restricted Stock Agreement hereunder shall confer on any Restricted Stockholder
any right to continue in the employ of, or as a consultant for, the Company or
any Subsidiary, or as a director of the Company, or shall interfere with or
restrict in any way the rights of the Company and any Subsidiary, which are
hereby expressly reserved, to discharge any Restricted Stockholder at any time
for any reason whatsoever, with or without good cause.

          6.4   Rights as Stockholders.  Upon delivery of the shares of
                -----------------------                                 
Restricted Stock to the escrow holder pursuant to Section 6.7, the Restricted
Stockholder shall have, unless otherwise provided by the Committee, all the
rights of a stockholder with respect to said shares, subject to the restrictions
in his Restricted Stock Agreement, including the right to receive all dividends
and other distributions paid or made with respect to the shares; provided,
                                                                 -------- 
however, that in the discretion of the Committee, any extraordinary
- -------                                                            
distributions with respect to the Common Stock shall be subject to the
restrictions set forth in Section 6.5.

          6.5   Restriction.  All shares of Restricted Stock issued under this
                ------------                                                   
Plan (including any shares received by holders thereof with respect to shares of
Restricted Stock as a result of stock dividends, stock splits or any other form
of recapitalization) shall, in the terms of each individual Restricted Stock
Agreement, be subject to such restrictions as the Committee shall provide, which
restrictions may include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of employment with
the Company, Company performance and individual performance; provided, however,
                                                             --------  ------- 
that by action taken after the Restricted Stock is issued, the Committee 

may, on such terms and conditions as it may determine to be appropriate, remove
any or all of the restrictions imposed by the terms of the Restricted Stock
Agreement. Restricted Stock may not be sold or encumbered until all restrictions
are terminated or expire. Unless provided otherwise by the Committee, if no
consideration was paid by the Restricted Stockholder upon issuance, a Restricted
Stockholder's rights in unvested Restricted Stock shall lapse upon Termination
of Employment or, if applicable, upon Termination of Consultancy or Termination
of Directorship with the Company.

           6.6  Repurchase of Restricted Stock.  The Committee shall provide in
                -------------------------------                                 
the terms of each individual Restricted Stock Agreement that the Company shall
have the right to repurchase from the Restricted Stockholder the Restricted
Stock then subject to restrictions under the Restricted Stock Agreement
immediately upon a Termination of Employment or, if applicable, upon a
Termination of Consultancy or Termination of Directorship between the Restricted
Stockholder and the Company, at a cash price per share equal to the price paid
by the Restricted Stockholder for such Restricted Stock; provided, however, that
                                                         --------  -------      
provision may be made that no such right of repurchase shall exist in the event
of a Termination of Employment or Termination of Consultancy without cause, or
following a change in control of the Company or because of the Restricted
Stockholder's retirement, death or disability, or otherwise.

          6.7   Escrow.  The Secretary of the Company or such other escrow
                -------                                                    
holder as the Committee may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the restrictions imposed
under the Restricted Stock Agreement with respect to the shares evidenced by
such certificate expire or shall have been removed.

          6.8   Legend.  In order to enforce the restrictions imposed upon
                -------                                                    
shares of Restricted Stock hereunder, the Committee shall cause a legend or
legends to be placed on certificates representing all shares of Restricted Stock
that are still subject to restrictions under Restricted Stock Agreements, which
legend or legends shall make appropriate reference to the conditions imposed
thereby.

                                   ARTICLE VII

                   PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS,
                         DEFERRED STOCK, STOCK PAYMENTS

          7.1   Performance Awards.  Any key Employee, Independent Director or
                -------------------                                            
consultant selected by the Committee may be granted one or more Performance
Awards.  The value of such Performance Awards may be linked to the market value,
book value, net profits or other measure of the value of Common Stock or other
specific performance criteria determined appropriate by the Committee, in each
case on a specified date or dates or over any period or periods determined by
the Committee, or may be based upon the appreciation in the market value, book
value, net profits or other measure of the value of a specified number of shares
of Common Stock over a fixed period or periods determined by the Committee.  In
making such determinations, the Committee shall consider (among such other
factors as it deems relevant in light of the specific type of award) the
contributions, responsibilities and other compensation of the particular key
Employee, Independent Director or consultant.

          7.2   Dividend Equivalents.  Any key Employee, Independent Director
                ---------------------                                         
or consultant selected by the Committee may be granted Dividend Equivalents
based on the dividends declared on Common Stock, to be credited as of dividend
payment dates, during the period between the date an Option, Stock Appreciation
Right, Deferred Stock or Performance Award is granted, and the date such Option,
Stock Appreciation Right, Deferred Stock or Performance Award is exercised,
vests or expires, 

as determined by the Committee. Such Dividend Equivalents shall be converted to
cash or additional shares of Common Stock by such formula and at such time and
subject to such limitations as may be determined by the Committee. With respect
to Dividend Equivalents granted with respect to Options intended to be qualified
performance-based compensation for purposes of Section 162(m), such Dividend
Equivalents shall be payable regardless of whether such Option is exercised.

          7.3   Stock Payments.  Any key Employee, Independent Director or
                ---------------                                            
consultant selected by the Committee may receive Stock Payments in the manner
determined from time to time by the Committee.  The number of shares shall be
determined by the Committee and may be based upon the Fair Market Value, book
value, net profits or other measure of the value of Common Stock or other
specific performance criteria determined appropriate by the Committee,
determined on the date such Stock Payment is made or on any date thereafter.

          7.4   Deferred Stock.  Any key Employee, Independent Director or
                ---------------                                            
consultant selected by the Committee may be granted an award of Deferred Stock
in the manner determined from time to time by the Committee.  The number of
shares of Deferred Stock shall be determined by the Committee and may be linked
to the market value, book value, net profits or other measure of the value of
Common Stock or other specific performance criteria determined to be appropriate
by the Committee, in each case on a specified date or dates or over any period
or periods determined by the Committee.  Common Stock underlying a Deferred
Stock award will not be issued until the Deferred Stock award has vested,
pursuant to a vesting schedule or performance criteria set by the Committee.
Unless otherwise provided by the Committee, a Grantee of Deferred Stock shall
have no rights as a Company stockholder with respect to such Deferred Stock
until such time as the award has vested and the Common Stock underlying the
award has been issued.

          7.5   Performance Award Agreement, Dividend Equivalent Agreement,
                -----------------------------------------------------------
Deferred Stock Agreement, Stock Payment Agreement.  Each Performance Award,
- --------------------------------------------------                          
Dividend Equivalent, award of Deferred Stock and/or Stock Payment shall be
evidenced by a written agreement, which shall be executed by the Grantee and an
authorized Officer of the Company and which shall contain such terms and
conditions as the Committee shall determine, consistent with this Plan.

          7.6   Term.  The term of a Performance Award, Dividend Equivalent,
                -----                                                        
award of Deferred Stock and/or Stock Payment shall be set by the Committee in
its discretion.

          7.7   Exercise Upon Termination of Employment.  A Performance Award,
                ----------------------------------------                       
Dividend Equivalent, award of Deferred Stock and/or Stock Payment is exercisable
or payable only while the Grantee is an Employee, Independent Director or
consultant; provided that the Committee may determine that the Performance
Award, Dividend Equivalent, award of Deferred Stock and/or Stock Payment may be
exercised or paid subsequent to Termination of Employment or Termination of
Consultancy without cause, or following a change in control of the Company, or
because of the Grantee's retirement, death or disability, or otherwise.

          7.8   Payment on Exercise.  Payment of the amount determined under
                --------------------                                         
Section 7.1 or 7.2 above shall be in cash, in Common Stock or a combination of
both, as determined by the Committee.  To the extent any payment under this
Article VII is effected in Common Stock, it shall be made subject to
satisfaction of all provisions of Section 5.3.

          7.9   Consideration.  In consideration of the granting of a
                --------------                                        
Performance Award, Dividend Equivalent, award of Deferred Stock and/or Stock
Payment, the Grantee shall agree, in a 

written agreement, to remain in the employ of, or to consult for, the Company or
any Subsidiary for a period of at least one year after such Performance Award,
Dividend Equivalent, award of Deferred Stock and/or Stock Payment is granted (or
such shorter period as may be fixed in such agreement or by action of the
Committee following such grant). Nothing in this Plan or in any agreement
hereunder shall confer on any Grantee any right to continue in the employ of, or
as a consultant for, the Company or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company and any Subsidiary, which are
hereby expressly reserved, to discharge any Grantee at any time for any reason
whatsoever, with or without good cause.

                                   ARTICLE VIII

                           STOCK APPRECIATION RIGHTS

          8.1   Grant of Stock Appreciation Rights.  A Stock Appreciation Right
                -----------------------------------                             
may be granted to any key Employee, Independent Director or consultant selected
by the Committee.  A Stock Appreciation Right may be granted (i) in connection
and simultaneously with the grant of an Option, (ii) with respect to a
previously granted Option, or (iii) independent of an Option.  A Stock
Appreciation Right shall be subject to such terms and conditions not
inconsistent with this Plan as the Committee shall impose and shall be evidenced
by a written Stock Appreciation Right Agreement, which shall be executed by the
Grantee and an authorized officer of the Company.  The Committee, in its
discretion, may determine whether a Stock Appreciation Right is to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
and Stock Appreciation Right Agreements evidencing Stock Appreciation Rights
intended to so qualify shall contain such terms and conditions as may be
necessary to meet the applicable provisions of section 162(m) of the Code.
Without limiting the generality of the foregoing, the Committee may, in its
discretion and on such terms as it deems appropriate, require as a condition of
the grant of a Stock Appreciation Right to an Employee, Independent Director or
consultant that the Employee, Independent Director or consultant surrender for
cancellation some or all of the unexercised Options, awards of Restricted Stock
or Deferred Stock, Performance Awards, Stock Appreciation Rights, Dividend
Equivalents or Stock Payments, or other rights which have been previously
granted to him under this Plan or otherwise.  A Stock Appreciation Right, the
grant of which is conditioned upon such surrender, may have an exercise price
lower (or higher) than the exercise price of the surrendered Option or other
award, may cover the same (or a lesser or greater) number of shares as such
surrendered Option or other award, may contain such other terms as the Committee
deems appropriate, and shall be exercisable in accordance with its terms,
without regard to the number of shares, price, exercise period or any other term
or condition of such surrendered Option or other award.

          8.2   Coupled Stock Appreciation Rights
                --------------------------------- 

          (a) A Coupled Stock Appreciation Right ("CSAR") shall be related to a
particular Option and shall be exercisable only when and to the extent the
related Option is exercisable.

          (b) A CSAR may be granted to the Grantee for no more than the number
of shares subject to the simultaneously or previously granted Option to which it
is coupled.

          (c) A CSAR shall entitle the Grantee (or other person entitled to
exercise the Option pursuant to this Plan) to surrender to the Company
unexercised a portion of the Option to which the CSAR relates (to the extent
then exercisable pursuant to its terms) and to receive from the Company in
exchange therefor an amount determined by multiplying the difference obtained by
subtracting the Option 

exercise price from the Fair Market Value of a share of Common Stock on the date
of exercise of the CSAR by the number of shares of Common Stock with respect to
which the CSAR shall have been exercised, subject to any limitations the
Committee may impose.

          8.4   Independent Stock Appreciation Rights
                ------------------------------------- 

          (a) An Independent Stock Appreciation Right ("ISAR") shall be
unrelated to any Option and shall have a term set by the Committee.  An ISAR
shall be exercisable in such installments as the Committee may determine.  An
ISAR shall cover such number of shares of Common Stock as the Committee may
determine.  The exercise price per share of Common Stock subject to each ISAR
shall be set by the Committee.  An ISAR is exercisable only while the Grantee is
an Employee, Independent Director or consultant; provided that the Committee may
determine that the ISAR may be exercised subsequent to Termination of Employment
or Termination of Consultancy without cause, or following a change in control of
the Company, or because of the Grantee's retirement, death or disability, or
otherwise.

          (b) An ISAR shall entitle the Grantee (or other person entitled to
exercise the ISAR pursuant to this Plan) to exercise all or a specified portion
of the ISAR (to the extent then exercisable pursuant to its terms) and to
receive from the Company an amount determined by multiplying the difference
obtained by subtracting the exercise price per share of the ISAR from the Fair
Market Value of a share of Common Stock on the date of exercise of the ISAR by
the number of shares of Common Stock with respect to which the ISAR shall have
been exercised, subject to any limitations the Committee may impose.

          8.4   Payment and Limitations on Exercise
                ----------------------------------- 

          (a) Payment of the amount determined under Section 8.2(c) and 8.3(b)
above shall be in cash, in Common Stock (based on its Fair Market Value as of
the date the Stock Appreciation Right is exercised) or a combination of both, as
determined by the Committee.  To the extent such payment is effected in Common
Stock it shall be made subject to satisfaction of all provisions of Section 5.3
hereinabove pertaining to Options.

          (b) Grantees of Stock Appreciation Rights may, in the discretion of
the Board or Committee, be required to comply with any timing or other
restrictions including a window-period requirement deemed advisable or prudent
by the Board or Committee or otherwise with respect to the settlement or
exercise of a Stock Appreciation Right.

          8.5   Consideration.  In consideration of the granting of a Stock
                --------------                                              
Appreciation Right, the Grantee shall agree, in the written Stock Appreciation
Right Agreement, to remain in the employ of (or to consult for or serve as an
Independent Director of, as applicable) the Company or any Subsidiary for a
period of at least one year after the Stock Appreciation Right is granted or, in
the case of an Independent Director, to the end of such Independent Director's
current Board term (or such shorter period as may be fixed in the Stock
Appreciation Right Agreement or by action of the Committee or the Board
following grant of the Restricted Stock).  Nothing in this Plan or in any Stock
Appreciation Right Agreement hereunder shall confer on any Grantee any right to
continue in the employ of, or as a consultant for, the Company or any Subsidiary
or shall interfere with or restrict in any way the rights of the Company and any
Subsidiary, which are hereby expressly reserved, to discharge any Grantee at any
time for any reason whatsoever, with or without good cause.

                                   ARTICLE IX

                                 ADMINISTRATION

          9.1   Compensation Committee.  Prior to the closing of the Company's
                -----------------------                                        
initial public offering of equity securities (the "Offering"), the Compensation
Committee shall consist of the entire Board.  Following the closing of the
Offering, the Compensation Committee (or another committee or a subcommittee of
the Board assuming the functions of the Committee under this Plan) shall consist
solely of two or more Independent Directors appointed by and holding office at
the pleasure of the Board, each of whom is (i) a "non-employee director" (as
defined by Rule 16b-3), (ii) to the extent required by the applicable provisions
of Rule 16b-3, a "disinterested person" (as defined by Rule 16b-3) and (iii) an
"outside director" for purposes of Section 162(m) of the Code.  Appointment of
Committee members shall be effective upon acceptance of appointment.  Committee
members may resign at any time by delivering written notice to the Board.
Vacancies in the Committee may be filled by the Board.

          9.2   Duties and Powers of Committee.  It shall be the duty of the
                -------------------------------                              
Committee to conduct the general administration of this Plan in accordance with
its provisions.  The Committee shall have the power to interpret this Plan and
the agreements pursuant to which Options, awards of Restricted Stock or Deferred
Stock, Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments are granted or awarded, and to adopt such rules for the
administration, interpretation, and application of this Plan as are consistent
therewith and to interpret, amend or revoke any such rules.  Notwithstanding the
foregoing, the full Board, acting by a majority of its members in office, shall
conduct the general administration of the Plan with respect to grants to
Independent Directors.  Any such grant or award under this Plan need not be the
same with respect to each Optionee, Grantee or Restricted Stockholder.  Any such
interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code.  In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under this Plan except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee.

          9.3   Majority Rule; Unanimous Written Consent.  The Committee shall
                -----------------------------------------                      
act by a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.

          9.4   Compensation; Professional Assistance; Good Faith Actions.
                ----------------------------------------------------------  
Members of the Committee shall receive such compensation for their services as
members as may be determined by the Board.  All expenses and liabilities which
members of the Committee incur in connection with the administration of this
Plan shall be borne by the Company.  The Committee may, with the approval of the
Board, employ attorneys, consultants, accountants, appraisers, brokers, or other
persons.  The Committee, the Company and the Company's officers and Directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons.  All actions taken and all interpretations and determinations made by
the Committee or the Board in good faith shall be final and binding upon all
Optionees, Grantees, Restricted Stockholders, the Company and all other
interested persons.  No members of the Committee or Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to this Plan, Options, awards of Restricted Stock or Deferred Stock,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments, and all members of the Committee and the Board shall be fully
protected by the Company in respect of any such action, determination or
interpretation.

                                   ARTICLE X

                            MISCELLANEOUS PROVISIONS

          10.1  Not Transferable.  Options, Restricted Stock awards, Deferred
                -----------------                                             
Stock awards, Performance Awards, Stock Appreciation Rights, Dividend
Equivalents or Stock Payments under this Plan may not be sold, pledged,
assigned, or transferred in any manner other than by will or the laws of descent
and distribution or pursuant to a QDRO, unless and until such rights or awards
have been exercised, or the shares underlying such rights or awards have been
issued, and all restrictions applicable to such shares have lapsed.  No Option,
Restricted Stock award, Deferred Stock award, Performance Award, Stock
Appreciation Right, Dividend Equivalent or Stock Payment or interest or right
therein shall be liable for the debts, contracts or engagements of the Optionee,
Grantee or Restricted Stockholder or his successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.

          During the lifetime of the Optionee or Grantee, only he may exercise
an Option or other right or award (or any portion thereof) granted to him under
the Plan, unless it has been disposed of pursuant to a QDRO.  After the death of
the Optionee or Grantee, any exercisable portion of an Option or other right or
award may, prior to the time when such portion becomes unexercisable under the
Plan or the applicable Stock Option Agreement or other agreement, be exercised
by his personal representative or by any person empowered to do so under the
deceased Optionee's or Grantee's will or under the then applicable laws of
descent and distribution.

          10.2  Amendment, Suspension or Termination of this Plan.  Except as
                --------------------------------------------------            
otherwise provided in this Section 9.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee.  However, without approval of the
Company's stockholders given within twelve months before or after the action by
the Board or the Committee, no action of the Board or the Committee may, except
as provided in Section 10.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under this Plan or modify the Award
Limit, and no action of the Committee may be taken that would otherwise require
stockholder approval as a matter of applicable law, regulation or rule.  No
amendment, suspension or termination of this Plan shall, without the consent of
the holder of Options, Restricted Stock awards, Deferred Stock awards,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments, alter or impair any rights or obligations under any Options,
Restricted Stock awards, Deferred Stock awards, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments theretofore granted
or awarded, unless the award itself otherwise expressly so provides.  No
Options, Restricted Stock, Deferred Stock, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments may be granted or
awarded during any period of suspension or after termination of this Plan, and
in no event may any Incentive Stock Option be granted under this Plan after the
first to occur of the following events:

          (a)   The expiration of ten years from the date the Plan is adopted by
the Board; or

          (b)   The expiration of ten years from the date the Plan is approved
by the Company's stockholders under Section 10.4.

          10.3  Changes in Common Stock or Assets of the Company, Acquisition
                -------------------------------------------------------------
or Liquidation of the Company and Other Corporate Events.
- -------------------------------------------------------- 

          (a)   Subject to Section 10.3(d), in the event that the Committee (or
the Board, in the case of grants to Independent Directors) determines that any
dividend or other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, reclassification, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer, exchange
or other disposition of all or substantially all of the assets of the Company
(including, but not limited to a Corporate Transaction), or exchange of Common
Stock or other securities of the Company, issuance of warrants or other rights
to purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event, in the Committee's sole discretion (or in the
case of grants to Independent Directors, the Board's sole discretion), affects
the Common Stock such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to an Option, Restricted Stock award, Performance Award, Stock Appreciation
Right, Dividend Equivalent, Deferred Stock award or Stock Payment, then the
Committee (or the Board, in the case of grants to Independent Directors) shall,
in such manner as it may deem equitable, adjust any or all of

                (i) the number and kind of shares of Common Stock (or other
securities or property) with respect to which Options, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments may be granted under
the Plan, or which may be granted as Restricted Stock or Deferred Stock
(including, but not limited to, adjustments of the limitations in Section 2.1 on
the maximum number and kind of shares which may be issued and adjustments of the
Award Limit),

                (ii)  the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents, or Stock Payments, and in the
number and kind of shares of outstanding Restricted Stock or Deferred Stock, and

                (iii) the grant or exercise price with respect to any Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent or Stock
Payment.

          (b)   Subject to Sections 10.3(b)(vii) and 10.3(d), in the event of
any Corporate Transaction or other transaction or event described in Section
10.3(a) or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of the
Company or any affiliate, or of changes in applicable laws, regulations, or
accounting principles, the Committee (or the Board, in the case of grants to
Independent Directors) in its discretion is hereby authorized to take any one or
more of the following actions whenever the Committee (or the Board, in the case
of grants to Independent Directors) determines that such action is appropriate
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan or with respect to any
option, right or other award under this Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:

                (i)   In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the case of
grants to Independent Directors) may provide, either by the terms of the
agreement or by action taken prior to the occurrence of such transaction or
event and either automatically or upon the optionee's request, 

for either the purchase of any such Option, Performance Award, Stock
Appreciation Right, Dividend Equivalent, or Stock Payment, or any Restricted
Stock or Deferred Stock for an amount of cash equal to the amount that could
have been attained upon the exercise of such option, right or award or
realization of the optionee's rights had such option, right or award been
currently exercisable or payable or fully vested or the replacement of such
option, right or award with other rights or property selected by the Committee
(or the Board, in the case of grants to Independent Directors) in its sole
discretion;

                (ii)   In its sole and absolute discretion, the Committee (or
the Board, in the case of grants to Independent Directors) may provide, either
by the terms of such Option, Performance Award, Stock Appreciation Right,
Dividend Equivalent, or Stock Payment, or Restricted Stock or Deferred Stock or
by action taken prior to the occurrence of such transaction or event that it
cannot be exercised after such event;

                (iii)   In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee (or the Board, in the case
of grants to Independent Directors) may provide, either by the terms of such
Option, Performance Award, Stock Appreciation Right, Dividend Equivalent, or
Stock Payment, or Restricted Stock or Deferred Stock or by action taken prior to
the occurrence of such transaction or event, that for a specified period of time
prior to such transaction or event, such option, right or award shall be
exercisable as to all shares covered thereby, notwithstanding anything to the
contrary in (i) Section 4.4 or (ii) the provisions of such Option, Performance
Award, Stock Appreciation Right, Dividend Equivalent, or Stock Payment, or
Restricted Stock or Deferred Stock;

                (iv)   In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee (or the Board, in the case
of grant to Independent Directors) may provide, either by the terms of such
Option, Performance Award, Stock Appreciation Right, Dividend Equivalent, or
Stock Payment, or Restricted Stock or Deferred Stock or by action taken prior to
the occurrence of such transaction or event, that upon such event, such option,
right or award be assumed by the successor or survivor corporation, or a parent
or subsidiary thereof, or shall be substituted for by similar options, rights or
awards covering the stock of the successor or survivor corporation, or a parent
or subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices; and

                (v)   In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the case of
grants to Independent Directors) may make adjustments in the number and type of
shares of Common Stock (or other securities or property) subject to outstanding
Options, Performance Awards, Stock Appreciation Rights, Dividend Equivalents, or
Stock Payments, and in the number and kind of outstanding Restricted Stock or
Deferred Stock and/or in the terms and conditions of (including the grant or
exercise price), and the criteria included in, outstanding options, rights and
awards and options, rights and awards which may be granted in the future.

                (vi)  In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide either by the
terms of a Restricted Stock award or Deferred Stock award or by action taken
prior to the occurrence of such event that, for a specified period of time prior
to such event, the restrictions imposed under a Restricted Stock Agreement or a
Deferred Stock Agreement upon some or all shares of Restricted Stock or Deferred
Stock may be terminated, and, in the case of Restricted Stock, some or all
shares of 

such Restricted Stock may cease to be subject to repurchase under Section 6.6 or
forfeiture under Section 6.5 after such event.

                (vii)  None of the foregoing discretionary terms of this Section
10.3(b) shall be permitted with respect to Options granted under Section 3.4(d)
to Independent Directors to the extent that such discretion would be
inconsistent with the applicable exemptive conditions of Rule 16b-3. In the
event of a Change in Control or a Corporate Transaction, to the extent that the
Board does not have the ability under Rule 16b-3 to take or to refrain from
taking the discretionary actions set forth in Section 10.3(b)(iii) above, each
Option granted to an Independent Director shall be exercisable as to all shares
covered thereby upon such Change in Control or during the five days immediately
preceding the consummation of such Corporate Transaction and subject to such
consummation, notwithstanding anything to the contrary in Section 4.4 or the
vesting schedule of such Options. In the event of a Corporate Transaction, to
the extent that the Board does not have the ability under Rule 16b-3 to take or
to refrain from taking the discretionary actions set forth in Section
10.3(b)(ii) above, no Option granted to an Independent Director may be exercised
following such Corporate Transaction unless such Option is, in connection with
such Corporate Transaction, either assumed by the successor or survivor
corporation (or parent or subsidiary thereof) or replaced with a comparable
right with respect to shares of the capital stock of the successor or survivor
corporation (or parent or subsidiary thereof).

          (c)   Subject to Section 10.3(d) and 10.8, the Committee (or the
Board, in the case of grants to Independent Directors) may, in its discretion,
include such further provisions and limitations in any Option, Performance
Award, Stock Appreciation Right, Dividend Equivalent, or Stock Payment, or
Restricted Stock or Deferred Stock agreement or certificate, as it may deem
equitable and in the best interests of the Company.

          (d)   With respect to Incentive Stock Options and Options and Stock
Appreciation Rights intended to qualify as performance-based compensation under
Section 162(m), no adjustment or action described in this Section 10.3 or in any
other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to violate Section 422(b)(1) of the
Code or would cause such option or stock appreciation right to fail to so
qualify under Section 162(m), as the case may be, or any successor provisions
thereto.  Furthermore, no such adjustment or action shall be authorized to the
extent such adjustment or action would result in short-swing profits liability
under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the
Committee (or the Board, in the case of grants to Independent Directors)
determines that the option or other award is not to comply with such exemptive
conditions.  The number of shares of Common Stock subject to any option, right
or award shall always be rounded to the next whole number.

          (e)   In the event of any Corporate Transaction, each outstanding
Option, Performance Award, Stock Appreciation Right, Dividend Equivalent, Stock
Payment, Restricted Stock, or Deferred Stock award shall, immediately prior to
the effective date of the Corporate Transaction, automatically become fully
exercisable for all of the shares of Common Stock at the time subject to such
rights or fully vested, applicable, and may be exercised for any or all of those
shares as fully-vested shares of Common Stock.  However, an outstanding right
shall not so accelerate if and to the extent:  (i) such right is, in connection
with the Corporate Transaction, either to be assumed by the successor or
survivor corporation (or parent thereof) or to be replaced with a comparable
right with respect to shares of the capital stock of the successor or survivor
corporation (or parent thereof) or (ii) the acceleration of exercisability of
such right is subject to other limitations imposed by the Plan Administrator at
the time 

of grant. The determination of comparability of rights under clause (i) above
shall be made by the Plan Administrator, and its determination shall be final,
binding and conclusive.

          10.4  Approval of Plan by Stockholders.  This Plan will be submitted
                ---------------------------------                              
for the approval of the Company's stockholders within twelve months after the
date of the Board's initial adoption of this Plan.  Options, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments may be granted
and Restricted Stock or Deferred Stock may be awarded prior to such stockholder
approval, provided that such Options, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments shall not be exercisable and such
Restricted Stock or Deferred Stock shall not vest prior to the time when this
Plan is approved by the stockholders, and provided further that if such approval
has not been obtained at the end of said twelve-month period, all Options,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments previously granted and all Restricted Stock or Deferred Stock
previously awarded under this Plan shall thereupon be canceled and become null
and void.

          10.5  Tax Withholding.  The Company shall be entitled to require
                ----------------                                           
payment in cash or deduction from other compensation payable to each Optionee,
Grantee or Restricted Stockholder of any sums required by federal, state or
local tax law to be withheld with respect to the issuance, vesting or exercise
of any Option, Restricted Stock, Deferred Stock, Performance Award, Stock
Appreciation Right, Dividend Equivalent or Stock Payment.  The Committee (or the
Board, in the case of grants to Independent Directors) may in its discretion and
in satisfaction of the foregoing requirement allow such Optionee, Grantee or
Restricted Stockholder to elect to have the Company withhold shares of Common
Stock otherwise issuable under such Option or other award (or allow the return
of shares of Common Stock) having a Fair Market Value equal to the sums required
to be withheld.

          10.6  Loans.  The Committee may, in its discretion, extend one or
                ------                                                      
more loans to key Employees in connection with the exercise or receipt of an
Option, Performance Award, Stock Appreciation Right, Dividend Equivalent or
Stock Payment granted under this Plan, or the issuance of Restricted Stock or
Deferred Stock awarded under this Plan.  The terms and conditions of any such
loan shall be set by the Committee.

          10.7  Forfeiture Provisions.  Pursuant to its general authority to
                ----------------------                                       
determine the terms and conditions applicable to awards under the Plan, the
Committee (or the Board, in the case of grants to Independent Directors) shall
have the right (to the extent consistent with the applicable exemptive
conditions of Rule 16b-3) to provide, in the terms of Options or other awards
made under the Plan, or to require the recipient to agree by separate written
instrument, that (i) any proceeds, gains or other economic benefit actually or
constructively received by the recipient upon any receipt or exercise of the
award, or upon the receipt or resale of any Common Stock underlying such award,
must be paid to the Company, and (ii) the award shall terminate and any
unexercised portion of such award (whether or not vested) shall be forfeited, if
(a) a Termination of Employment, Termination of Consultancy or Termination of
Directorship occurs prior to a specified date, or within a specified time period
following receipt or exercise of the award, or (b) the recipient at any time, or
during a specified time period, engages in any activity in competition with the
Company, or which is inimical, contrary or harmful to the interests of the
Company, as further defined by the Committee (or the Board, as applicable).

          10.8  Limitations Applicable to Section 16 Persons and Performance-
                -------------------------------------------------------------
Based Compensation.  Notwithstanding any other provision of this Plan, this
- ------------------                                                         
Plan, and any Option, Performance Award, Stock Appreciation Right, Dividend
Equivalent or Stock Payment granted, or Restricted Stock or Deferred Stock
awarded, to any individual who is then subject to Section 16 of the Exchange
Act, shall 

be subject to any additional limitations set forth in any applicable exemptive
rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3
of the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan, Options, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents, Stock Payments,
Restricted Stock and Deferred Stock granted or awarded hereunder shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.
Furthermore, notwithstanding any other provision of this Plan, any Option or
Stock Appreciation Right intended to qualify as performance-based compensation
as described in Section 162(m)(4)(C) of the Code shall be subject to any
additional limitations set forth in Section 162(m) of the Code (including any
amendment to Section 162(m) of the Code) or any regulations or rulings issued
thereunder that are requirements for qualification as performance-based
compensation as described in Section 162(m)(4)(C) of the Code, and this Plan
shall be deemed amended to the extent necessary to conform to such requirements.

          10.9  Effect of Plan Upon Options and Compensation Plans.  The
                ---------------------------------------------------      
adoption of this Plan shall not affect any other compensation or incentive plans
in effect for the Company or any Subsidiary.  Nothing in this Plan shall be
construed to limit the right of the Company (i) to establish any other forms of
incentives or compensation for Employees, Independent Directors or consultants
of the Company or any Subsidiary or (ii) to grant or assume options or other
rights otherwise than under this Plan in connection with any proper corporate
purpose including but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, firm or association.

          10.10 Compliance with Laws.  This Plan, the granting and vesting of
                ---------------------                                         
Options, Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments under this
Plan and the issuance and delivery of shares of Common Stock and the payment of
money under this Plan or under Options, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments granted or Restricted Stock or
Deferred Stock awarded hereunder are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not limited to
state and federal securities law and federal margin requirements) and to such
approvals by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in connection
therewith.  Any securities delivered under this Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by
the Company, provide such assurances and representations to the Company as the
Company may deem necessary or desirable to assure compliance with all applicable
legal requirements.  To the extent permitted by applicable law, the Plan,
Options, Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.

          10.11 Titles.  Titles are provided herein for convenience only and
                -------                                                      
are not to serve as a basis for interpretation or construction of this Plan.

          10.12 Governing Law.  This Plan and any agreements hereunder shall be
                --------------                                                  
administered, interpreted and enforced under the internal laws of the State of
Maryland without regard to conflicts of laws thereof.

                                    *  *  *

          I hereby certify that the foregoing Plan was duly adopted by the Board
of Directors of Signature Resorts, Inc. on June 13, 1996.

          Executed on this 13th day of June, 1996.

                                     -------------------------------------
                                     Steven C. Kenninger
                                     Director, Chief Operating Officer and
                                     Secretary

                                 * * * * * * *

     I hereby certify that the foregoing Plan was approved by the stockholders
of Signature Resorts, Inc. on June 13, 1996.

     Executed at Los Angeles, California on this 13th day of June, 1996.

                                     -------------------------------------
                                     Steven C. Kenninger
                                     Director, Chief Operating Officer and
                                     Secretary

 

Basic Info X:

Name: THE 1996 EQUITY PARTICIPATION PLAN
Type: Equity Participation Plan
Date: July 23, 1996
Company: SUNTERRA CORP
State: Maryland

Other info:

Date:

  • June 13 , 1996
  • 13th day of June , 1996

Organization:

  • INC. Signature Resorts , Inc.
  • Equity Participation Plan of Signature Resorts , Inc.
  • Terminations of Consultancy
  • Company 's Common Stock
  • Qualification of Incentive Stock Options
  • Any Incentive Stock Option
  • Fair Market Value
  • Manner of Exercise
  • Issuance of Stock Certificates
  • Securities and Exchange Commission
  • Committee or Board
  • Exercise of Options Granted
  • Repurchase of Restricted Stock
  • Restricted Stock Agreements
  • Deferred Stock or Performance Award
  • Grantee of Deferred Stock
  • Dividend Equivalent Agreement
  • Deferred Stock Agreement
  • Stock Payment Agreement
  • Exercise Upon Termination of Employment
  • Grant of Stock Appreciation Rights
  • Stock Appreciation Right Agreements evidencing Stock Appreciation Rights
  • Termination of Employment or Termination of Consultancy
  • Board or Committee
  • Powers of Committee
  • Committee or Board
  • Incentive Stock Options and Options and Stock Appreciation Rights
  • Termination of Directorship
  • Plan Upon Options and Compensation Plans
  • the State of Maryland
  • Board of Directors of Signature Resorts , Inc.

Location:

  • Maryland
  • Los Angeles
  • California

Money:

  • $ .01
  • $ 100,000

Person:

  • Optionee
  • Steven C. Kenninger Director

Percent:

  • fifty percent
  • 50 %
  • 50 percent
  • ten percent
  • 110 %
  • 100 %
  • 13 %