FAIRFIELD COMMUNITIES, INC.
FOURTH AMENDED AND RESTATED 1997 STOCK OPTION PLAN
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Fairfield Communities, Inc., a Delaware corporation (the "Company"),
hereby establishes this 1997 Stock Option Plan (the "Plan"), effective as of
March 7, 1997, as amended and restated pursuant to action taken by the
Compensation Committee of the Board of Directors of the Company on June 5, 1997,
to reflect adjustments resulting from the 3-for-2 share split of the Company's
Common Stock which became effective on July 15, 1997, which action was approved
by the Board of Directors of the Company on June 5, 1997, and as further amended
and restated pursuant to action taken by the Compensation Committee of the Board
of Directors of the Company as of December 22, 1997, to reflect adjustments
resulting from the 2-for-1 share split of the Company's Common Stock which
became effective on January 30, 1998, and as further amended and restated by the
Board of Directors of the Company on March 31, 1998, subject to approval of the
stockholders of the Company, which was obtained on May 21, 1998, to increase the
number of authorized shares available under the Plan, and as further amended by
the Board of Directors of the Company on April 13, 2000, subject to approval of
the stockholders of the Company, which was obtained on May 18, 2000, to make
various changes to the Plan.
1. Purpose. The purpose of the Plan is to attract and retain the best
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available talent and encourage the highest level of performance by executive
officers, key employees, directors, advisors and consultants, and to provide
them with incentives to put forth maximum efforts for the success of the
Company's business, in order to serve the best interests of the Company and its
stockholders. All options granted under the Plan are intended to be nonstatutory
stock options.
2. Definitions. The following terms, when used in the Plan with initial
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capital letters, will have the following meanings:
(a) "Act" means the Securities Exchange Act of 1934, as in effect from
time to time.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as in effect from
time to time.
(d) "Common Stock" means the common stock, par value $.01 per share,
of the Company or any security into which such common stock may be changed
by reason of any transaction or event of the type described in Paragraph 6.
(e) "Compensation Committee" means the Compensation Committee which is
a committee of the Board whose members are appointed by the Board from time
to time. All of the members of the Compensation Committee, which may not be
less than two, are intended at all times to qualify as "outside directors"
within the meaning of Section 162(m) of the Code and as "Non-Employee
Directors" within the meaning of Rule 16b-3; provided, however, that the
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failure of a member of such committee to so qualify shall not be deemed to
invalidate any Stock Option granted by such committee.
(f) "Date of Grant" means the date specified by the Compensation
Committee or the Board, as applicable, on which a grant of Stock Options
will become effective (which date will not be earlier than the date on
which such committee or the Board takes action with respect thereto).
(g) "Market Value per Share" means the fair market value per share of
the Common Stock on the Date of Grant as determined by the Compensation
Committee or the Board, as applicable.
(h) "Option Price" means the purchase price per share payable on
exercise of a Stock Option.
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(i) "Participant" means a person who is selected by the Compensation
Committee or the Board, as applicable, to receive Stock Options under
Paragraph 5 of the Plan and who is at that time (i) an executive officer or
other key employee of the Company or any Subsidiary, (ii) an advisor or
consultant to the Company or any Subsidiary, or (iii) a member of the
Board.
(j) "Rule 16b-3" means Rule 16b-3 under Section 16 of the Act, as such
Rule is in effect from time to time.
(k) "Stock Option" means the right to purchase a share of Common Stock
upon exercise of an option granted pursuant to Paragraph 5.
(l) "Subsidiary" means any corporation, partnership, joint venture or
other entity in which the Company owns or controls, directly or indirectly,
not less than 50% of the total combined voting power or equity interests
represented by all classes of stock issued by such corporation,
partnership, joint venture or other entity.
3. Shares Available Under Plan. The shares of Common Stock which may be
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issued under the Plan will not exceed in the aggregate 2,650,000 shares, subject
to adjustment as provided in this Paragraph 3. Such shares may be shares of
original issuance or treasury shares or a combination of the foregoing.
(a) Any shares of Common Stock which are subject to Stock Options that
are terminated unexercised, forfeited or surrendered or that expire for any
reason will again be available for issuance under the Plan.
(b) The shares available for issuance under the Plan also will be
subject to adjustment as provided in Paragraph 6.
4. Individual Limitation on Stock Options. The maximum aggregate number of
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shares of Common Stock with respect to which Stock Options may be granted to any
Participant during any calendar year will not exceed 600,000 shares.
5. Grants of Stock Options. The Compensation Committee or the Board may
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from time to time authorize grants to any Participant of Stock Options upon such
terms and conditions as such committee or the Board, as applicable, may
determine in accordance with the provisions set forth below.
(a) Each grant will specify the number of shares of Common Stock to
which it pertains.
(b) Each grant will specify the Option Price, which will not be less
than 100% of the Market Value per Share on the Date of Grant.
(c) Each grant will specify whether the Option Price will be payable
(i) in cash or by check acceptable to the Company, (ii) by the transfer to
the Company of shares of Common Stock owned by the Participant for at least
six months (or, with the consent of the Compensation Committee or the
Board, as applicable, for less than six months) having an aggregate fair
market value per share at the date of exercise equal to the aggregate
Option Price, (iii) with the consent of the Compensation Committee or the
Board, as applicable, by authorizing the Company to withhold a number of
shares of Common Stock otherwise issuable to the Participant having an
aggregate fair market value per share on the date of exercise equal to the
aggregate Option Price or (iv) by a combination of such methods of payment;
provided, however, that the payment methods described in clauses (ii) and
(iii) will not be available at any time that the Company is prohibited from
purchasing or acquiring such shares of Common Stock. Any grant may provide
for deferred payment of the Option Price from the proceeds of sale through
a bank or broker of some or all of the shares to which such exercise
relates.
(d) Successive grants may be made to the same Participant whether or
not any Stock Options previously granted to such Participant remain
unexercised.
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(e) Each grant will specify the required period or periods (if any) of
continuous service by the Participant with the Company or any Subsidiary
and/or any other conditions to be satisfied before the Stock Options or
installments thereof will become exercisable, and any grant may provide, or
may be amended to provide, for the earlier exercise of the Stock Options in
the event of a change in control of the Company (as defined in the stock
option agreement evidencing such grant or in any agreement referred to in
such stock option agreement) or in the event of any other similar
transaction or event.
(f) Each Stock Option granted pursuant to this Paragraph 5 may be made
subject to such transfer restrictions as the Compensation Committee or the
Board, as applicable, may determine.
(g) Each grant will be evidenced by a stock option agreement executed
on behalf of the Company by the Chief Executive Officer (or another officer
designated by the Compensation Committee or the Board, as applicable) and
delivered to the Participant and containing such further terms and
provisions, consistent with the Plan, as such committee or the Board, as
applicable, may approve.
6. Adjustments. The Compensation Committee or the Board will make or
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provide for such adjustments in the maximum number of shares specified in
Paragraph 3 and Paragraph 4, in the number of shares of Common Stock covered by
outstanding Stock Options granted hereunder, in the Option Price applicable to
any such Stock Options, and/or in the kind of shares covered thereby (including
shares of another issuer), as such committee or the Board, as applicable, in its
sole discretion, exercised in good faith, may determine is equitably required to
prevent dilution or enlargement of the rights of Participants that otherwise
would result from any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Company,
merger, consolidation, spin-off, reorganization, partial or complete
liquidation, issuance of rights or warrants to purchase securities or any other
corporate transaction or event having an effect similar to any of the foregoing.
In the event the Compensation Committee disagrees with the Board with respect to
the foregoing adjustments, the Board's determination will be final and
conclusive. Any fractional shares resulting from the foregoing adjustments will
be eliminated.
7. Withholding of Taxes. To the extent that the Company is required to
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withhold federal, state, local or foreign taxes in connection with any benefit
realized by a Participant under the Plan, or is requested by a Participant to
withhold additional amounts with respect to such taxes, and the amounts
available to the Company for such withholding are insufficient, it will be a
condition to the realization of such benefit that the Participant make
arrangements satisfactory to the Company for payment of the balance of such
taxes required or requested to be withheld. In addition, if permitted by the
Compensation Committee or the Board, a Participant may elect to have any
withholding obligation of the Company satisfied with shares of Common Stock that
would otherwise be transferred to the Participant on exercise of the Stock
Option.
8. Administration of the Plan.
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(a) The Plan will be administered by the Compensation Committee and
the Board.
(b) The Compensation Committee and the Board have the full authority
and discretion to administer the Plan and to take any action that is
necessary or advisable in connection with the administration of the Plan,
including without limitation the authority and discretion to interpret and
construe any provision of the Plan or of any agreement, notification or
document evidencing the grant of a Stock Option. The interpretation and
construction by the Compensation Committee or the Board, as applicable, of
any such provision and any determination by the Compensation Committee or
the Board pursuant to any provision of the Plan or of any such agreement,
notification or document will be final and conclusive; provided, that in
the event the Compensation Committee disagrees with the Board with respect
to such interpretation, construction or determination, the Board's
determination will be final and conclusive. No member of the Compensation
Committee or the Board will be liable for any such action or determination
made in good faith.
(c) Notwithstanding any provision of the Plan to the contrary, the
Compensation Committee will have the exclusive authority and discretion to
take any action required or permitted to be taken under the provisions of
Paragraph 6, Paragraph 8(a), Paragraph 8(b), Paragraph 9(a) and Paragraph
9(b) with
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respect to Stock Options granted under the Plan that are intended to comply
with the requirements of Section 162(m) of the Code.
9. Amendments, Etc.
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(a) The Compensation Committee or the Board, as applicable, may,
without the consent of the Participant, amend any agreement evidencing a
Stock Option granted under the Plan, or otherwise take action, to
accelerate the time or times at which the Stock Option may be exercised, to
extend the expiration date of the Stock Option, to waive any other
condition or restriction applicable to such Stock Option or to the exercise
of such Stock Option, to reduce the exercise price of such Stock Option, to
amend the definition of a change in control of the Company (if such a
definition is contained in such agreement) to expand the events that would
result in a change in control of the Company and to add a change in control
provision to such agreement (if such provision is not contained in such
agreement) and may amend any such agreement in any other respect with the
consent of the Participant.
(b) The Plan may be amended from time to time by the Board or any duly
authorized committee thereof. In the event any law, or any rule or
regulation issued or promulgated by the Internal Revenue Service, the
Securities and Exchange Commission, the National Association of Securities
Dealers, Inc., any stock exchange upon which the Common Stock is listed for
trading, or any other governmental or quasi-governmental agency having
jurisdiction over the Company, the Common Stock or the Plan, requires the
Plan to be amended, or in the event Rule 16b-3 is amended or supplemented
(e.g., by addition of alternative rules) or any of the rules under Section
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16 of the Act are amended or supplemented, in either event to permit the
Company to remove or lessen any restrictions on or with respect to Stock
Options, the Compensation Committee and the Board each reserves the right
to amend the Plan to the extent of any such requirement, amendment or
supplement, and all Stock Options then outstanding will be subject to such
amendment.
(c) The Plan may be terminated at any time by action of the Board. The
termination of the Plan will not adversely affect the terms of any
outstanding Stock Option.
(d) The Plan will not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or
any Subsidiary, nor will it interfere in any way with any right the Company
or any Subsidiary would otherwise have to terminate a Participant's
employment or other service at any time.
(e) Neither the Board nor the Compensation Committee shall, without
the further approval of the shareholders of the Company, authorize the
amendment of any outstanding Stock Option to reduce the Option Price.
Furthermore, no outstanding Stock Option shall be canceled in consideration
for awards having a lower Option Price without further approval of the
shareholders of the Company. This Section 9(e) is intended to prohibit the
repricing of "underwater" Stock Options and shall not be construed to
prohibit the adjustments provided for in Section 6 of this Plan.
FAIRFIELD COMMUNITIES, INC.
By: /s/ Marcel J. Dumeny
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Marcel J. Dumeny
Secretary
