SEPARATION AGREEMENT AND GENERAL RELEASE


         THIS AGREEMENT made and entered by and between the undersigned Employee
and  Homestead  Village  Incorporated  (together  with is  directors,  officers,
shareholders  and other  affiliates,  collectively  referred to  hereinafter  as
"Employer").
         WHEREAS, Employee has been employed by the Employer; and
         WHEREAS,  the  parties  have  engaged in  discussions  resulting  in an
amicable and mutually satisfactory  separation of Employee's employment with the
Employer.
         NOW,  THEREFORE,  in consideration of the mutual covenants and promises
set forth below, the parties hereby agree as follows:
         1.  Employer  and  Employee  hereby  mutually  agree that  because of a
reorganization  of the  Finance  function,  the  effective  date  of  Employee's
separation of employment shall be the close of business on JANUARY 8, 1999.
         2. Upon  execution of this  Agreement by  Employee,  Employer  shall be
obligated to Employee as set forth  herein.  Employer  shall pay to Employee the
amount of Four Hundred Thousand  Dollars  ($400,000) which amount is referred to
herein  as  the  "Separation  Amount."  The  Separation  Amount  shall  be  paid
incrementally  as  follows.  AN INITIAL,  PAYMENT OF  $90,000,  SHALL BE PAID TO
EMPLOYEE ON JANUARY 15, 1999. An initial portion of the remaining unpaid balance
of the  Separation  Amount  shall be paid to  Employee  on an  annualized  basis
according to Employer's  normal payroll cycle for JANUARY,  FEBRUARY,  MARCH AND
THE FIRST WEEK OF APRIL 1999  (THROUGH  PAY  PERIOD  ENDING ON APRIL 10,  1999),
provided,  however,  THAT NO  PAYMENTS  SHALL BE BEFORE THE DATE THIS  AGREEMENT
BECOMES  BINDING UPON  EMPLOYEE IN  ACCORDANCE  WITH  PARAGRAPHS  23 AND 24. THE
FINAL,  REMAINING UNPAID BALANCE OF THE SEPARATION AMOUNT, AS OF APRIL 10, 1999,
SHALL BE PAID TO EMPLOYEE IN ONE LUMP SUM CASH  PAYMENT ON APRIL 10,  1999.  All
payments of the Separation Amount shall be subject to applicable  deductions for
state and federal taxes on such amounts.
         3. Employee will receive AN ADDITIONAL AMOUNT REPRESENTING  ACCRUED AND
UNUSED VACATION THROUGH THE DATE OF EMPLOYEE'S SEPARATION.
         4. Employee  shall be entitled to maintain his telephone  voice mailbox
         until  February 1, 1999.
         5.  Employee's  continuous  service under the Employer's  401(k) plan
shall cease as of the date of  resignation,  as set forth in Paragraph 1 herein.
Within four (4) to six (6) weeks of Employee's  written  request and pursuant to
the terms of the plan,  Employee shall be entitled to a  distribution  of all of
the  contributions to the Employee's  401(k) account made by the Employee,  plus
earnings  thereon,  or a transfer of such amount to another  plan at  Employee's
request. All distributions will be net of applicable  withholding taxes, if any.
Any options  granted  Employee under  Employer's  stock option plan or under any
Security  Capital  Group  Stock  Option  Plan  shall  expire on the third  month
anniversary of the date of separation, as set forth in Paragraph 1 herein.
         6. The Employer  shall extend to Employee the right to continue  health
insurance  at  Employee's  own expense as may be required by and pursuant to the
terms and conditions of the Consolidated  Omnibus Budget  Reconciliation  Act of
1986.
         7. Employer shall provide Employee WITH OUTPLACEMENT  SERVICES OF RIGHT
ASSOCIATES provided that such services shall not extend beyond July 30, 1999.

<PAGE>

         8. In  consideration of the promises  contained in this Agreement,  the
Employee and Employer hereby mutually agree to do the following:
                  A. Except for a claim  based upon a breach of this  Agreement,
Employee and Employer hereby release and forever discharge the other (including,
in the case of the Employer,  its related and affiliated  entities,  and each of
their officers, directors, shareholders,  representatives, agents, employees and
insurers   (Employee,   Employer  and  said  related   parties  are  hereinafter
collectively and individually "said Releases") from any and all rights,  claims,
demands,  debts,  dues, sums of money,  accounts,  attorneys' fees,  complaints,
judgements,  executions,  actions and causes of action of any nature whatsoever,
cognizable at law or equity, which Employee and Employer have or claim, or might
hereafter  have or claim against said  Releasee(s)  based upon or arising out of
any matter or thing  whatsoever,  from the  beginning  of the world  through the
effective  date of this  Agreement,  including  but not  limited to any  rights,
claims,  complaints or actions or causes of action which were or could have been
asserted  by  Employee  or  Employer  arising  out of or related  to  Employee's
employment  by  the  Employer  or  Employee's   separation  and/or   resignation
therefrom,  the purchase (or sale to  Employer)  of any Employer  securities  by
Employee,  or under any local,  state,  or federal law dealing  with  employment
discrimination including,  without limitation, Title VII of the Civil Rights Act
of 1964, and the Americans with Disabilities Act.  Notwithstanding the forgoing,
no such  release  shall  be  applicable  to any  existing  indemnity  agreements
including  those under the  indemnification  agreement  entered into between the
Employer and Employee or any insurance rights  including  directors and officers
policies in favor of Employee.
                  B.  Upon  written  request  of the  Employer,  Employee  shall
promptly  provide  the  Employer  with a written  report  and  verbal  briefings
concerning all current business  activities  engaged in by Employee on behalf of
the  Employer,  which  obligation  shall  expire 90 days  after the date of this
Agreement.
                  C. Employee shall  cooperate  reasonably  with the Employer in
the transition of Employee's responsibilities to other employees of the Employer
including,  without limitation,  responding within a week by telephone to answer
questions and to assist other employees or designees of the Employer, during the
term of severance payments.
                  D. Employee shall  promptly  submit to the Employer an expense
account report  accounting for all business  expenses charged by Employee to the
Employer and all advances received,  and repay the Employer for all advances and
all  non-business  related items  charged by Employee to the  Employer,  if any.
Employee hereby agrees that such advances and non-business related expenses may,
at the option of the  Employer,  be  deducted  by the  Employer  from any of its
payments to Employee under this Agreement.
                  E.  The  Employee  further  covenants  and  acknowledges  that
neither the Employee, nor any person, organization or other entity acting on the
Employee's  behalf has or will sue or cause or permit suit  against the Employer
upon any  claim  released  herein  or to  participate  in any way in any suit or
proceeding or to execute,  seek to impose,  collect or recover upon or otherwise
enforce or accept any judgment, decision, award, warranty or attachment upon any
claim released herein.
                  F. It is understood and agreed that this Agreement is executed
by  the  Employee   knowingly  and   voluntarily  and  is  not  based  upon  any
representations or statements of any kind by any person as to the merits,  legal
liabilities or value of the Employee's claim.
                  G.  The  Employee  also   acknowledges   that  no  promise  or
inducement  has been  offered or made except as herein set forth.  The  Employee
further acknowledges that consideration for this Agreement consists of financial
payments and benefits to which the Employee otherwise has no legal entitlement.

<PAGE>

         9. Confidential and Proprietary Information
                  A.  Employee  acknowledges  and  agrees  that in the course of
employment  with the Company,  Employee had access to certain  confidential  and
proprietary  information owned by and related to the Employer  (hereinafter such
information is referred to as  "Confidential  Information")  including,  but not
limited to Confidential Information relating to:

               (ii) the past and present clientele and customers of the Employer
                    as well as the persons, firms and corporation who are active
                    prospective clients for services;

               (ii) suppliers from which the Employer obtains products for their
                    clientele and customers;

               (iii) the types of services provided and the
                    internal  corporate  policies  related  thereto;

               (iv) the  individual  services  purchased by or for the clientele
                    and customers of the Employer.

               (v)  individual   client's  and  customer's   specifications   or
                    characteristics;

               (vi) Confidential  Information,  including  names,  addresses and
                    telephone numbers of clients, customers and suppliers of the
                    Employer;  and

            (viii)  information  relating  to the  Employer's  inventions  or
                    products,  research and development,  production  processes,
                    manufacturing  and  engineering   processes,   machines  and
                    equipment,  finances,  employees,  marketing, and production
                    and future business plans.

                  B. Employee  agrees and covenants  that  following  Employee's
termination,  Employee  will  not for one (1)  year  following  the date of this
Agreement  disseminate,  disclose,  communicate,  publish or otherwise  divulge,
directly or indirectly,  any Confidential Information of the Company. All duties
and  obligations  set forth  herein shall be in addition to those which exist at
common law and pursuant to statute.
         10.  Employee  hereby agrees to  immediately  turn over to Employer all
Confidential  Information,  notes, offering materials,  slide shows,  investment
summaries,  memoranda,  records, documents and all other information,  no matter
how produced or  reproduced,  kept by Employee or in  Employees'  possession  or
control,  used in or  pertaining to the business of the Employer it being hereby
acknowledged  that all of said items are the sole and exclusive  property of the
Employer.
         11.  Employee  further  agrees  that upon the  written  request  of the
Company Employee shall cooperate fully with Company and its counsel with respect
to any matter  (including  but not  limited  to  litigation,  investigation,  or
governmental  proceeding)  which  relates to matters  with  which  Employee  was
involved  during the term of his  employment  with the  Company.  Company  shall
reimburse  Employee for Employee's  time so expended at reasonably  agreed rates
and reasonable and verified  out-of-pocket costs and expenses incurred, but only
to the extent  expended or incurred  pursuant to such request of the Company and
subject  to  any  conditions  or  requirements  imposed  by  the  Company.  Such
cooperation  shall  include  attendance at  conferences  and  interviews  and in
general  providing  Company  and  its  counsel  with  the  full  benefit  of the
Employee's  knowledge  about  those  matters.  Employee  agrees to so  cooperate
promptly  and at times  reasonably  agreeable  to the  Company.  Employee  shall
provide these  services as an  independent  contractor and not as an employee of
the Company.

<PAGE>

         12.  Except as may be required to the  contrary by a final order issued
by a court of  competent  jurisdiction  and  except for any  communication  with
members of Employee's  immediate family and any attorney or accountant rendering
advice to  Employee  in  connection  with this  Agreement,  Employee  shall not,
directly or indirectly,  discuss or communicate the facts of this Agreement,  or
any of its terms and provisions with any third party.
         13. Employer agrees not to contest  Employee's  claim for  unemployment
benefits.
         14. From and after the date of presentment of this Agreement,  Employee
shall not,  directly  or  indirectly,  take any action  which is in fact,  or is
intended to be, contrary to the material  interests of Employer or any affiliate
of  Employer,  nor will  Employee  disparage  or make  negative,  derogatory  or
defamatory statements about Employer,  its related and affiliated entities,  its
directors, officers, employees,  shareholders,  agents or representative, or any
of them,  to any other person or business  entity,  except as may be required by
process  or court  order.  Employer  shall not  voluntarily  make any  negative,
derogatory or defamatory statements about Employee, except as may be required by
process or court order.
         15.  Nothing  in  this  Agreement  shall  be  deemed  an  admission  of
wrongdoing or any kind of liability by either party.
         16. In the event  Employee  engages in a material  breach of any of the
terms or  provisions of this  Agreement,  all of  Employee's  obligations  shall
remain  and shall be  enforceable,  but the  Employer's  obligations  under this
Agreement  shall  immediately  terminate,  including,  without  limitation,  all
remaining monetary obligations of the Employer to Employee which are outstanding
at the time of said breach. Similarly, Employee shall be relieved of any further
obligation under this Agreement if Employer materially breaches its covenants in
this Agreement.
         17. This  Agreement  shall be binding  upon and inure to the benefit of
both parties, their successor and assigns, and any affiliated or related entity,
as well as  Employee's  heirs,  assigns,  administrators,  executors  and  legal
representatives.
         18.  This  instrument  constitutes  the entire  Agreement  between  the
parties,  and may not be modified or amended in any way except by a  subsequent,
written agreement between the parties.
         19. If any  provision,  section,  subsection  or other  portion of this
Agreement  shall be  determined  by any court of  competent  jurisdiction  to be
invalid,  illegal or unenforceable  in whole or in part, and such  determination
shall become final,  such  provision or portion shall be deemed to be severed or
limited,  but only to the extent required to render the remaining provisions and
portions of this Agreement enforceable.  This Agreement as thus amended shall be
enforced so as to give effect to the intention of the parties insofar as this is
possible. In addition, the parties hereby expressly empower a court of competent
jurisdiction  to modify any term or  provision  of this  Agreement to the extent
necessary to comply with existing law and to enforce this Agreement as modified.
          20. This  Agreement  shall be construed in accordance  with the laws
of the State of Georgia.
          21.  The  language  used in this  Agreement  shall be deemed to be the
language  chosen by the parties  hereto to express their mutual  intent,  and no
rule of strict construction shall be applied against any person.

<PAGE>

         22.      This  Agreement  may be signed in multiple  counterparts, each
of which shall be deemed to be an original for all purposes.
         23. Employee may revoke this Agreement  within seven days of Employee's
executing this Agreement with his signature.
         24. EMPLOYEE  AFFIRMS THAT EMPLOYEE HAS BEEN GIVEN A REASONABLE  PERIOD
OF 21 DAYS WITHIN WHICH TO CONSIDER WHETHER TO EXECUTE THIS AGREEMENT,  AND THAT
EMPLOYEE HAS CAREFULLY READ AND REVIEWED ALL THE TERMS AND CONDITIONS  CONTAINED
IN THIS  AGREEMENT AND FULLY  UNDERSTANDS  THIS AGREEMENT TO BE A RELEASE OF ALL
CLAIMS,  KNOWN OR  UNKNOWN,  PRESENT OR FUTURE,  THAT  EMPLOYEE  HAS OR MAY HAVE
AGAINST  EMPLOYER  ARISING  OUT OF  EMPLOYEE'S  EMPLOYMENT  BY  EMPLOYER  OR ITS
TERMINATION.  EMPLOYEE  ALSO AFFIRMS  THAT  EMPLOYEE HAS BEEN ADVISED TO CONSULT
WITH AN ATTORNEY  PRIOR TO EXECUTING  THIS  AGREEMENT  AND THAT EMPLOYEE HAS, IN
FACT,  BEEN GIVEN FULL  OPPORTUNITY TO REVIEW THIS  AGREEMENT WITH COUNSEL,  AND
THAT  EMPLOYEE  SIGNS IT  VOLUNTARILY  OF HIS OWN  VOLITION,  WITHOUT  DURESS OR
COERCION. EMPLOYEE REPRESENTS THAT EMPLOYEE IS SIGNING THIS AGREEMENT BECAUSE OF
THE  COMPENSATION  TO BE PAID BY EMPLOYER  UNDER THIS  AGREEMENT  WHICH  EXCEEDS
SEPARATION COMPENSATION GENERALLY AVAILABLE UNDER EMPLOYER'S POLICIES.


<PAGE>


         IN WITNESS  THEREOF,  the parties have executed  this  Agreement on the
date(s) set forth below.

                                      HOMESTEAD VILLAGE INCORPORATED


                                      By

                                      Title

                                      Date



                                      Employee


                                      Employee


                                      (Signature)

                                      Date

State of Georgia

County of                                            )

     On ____________________, 19 _____, ____________________ personally appeared
before me,

           _____    who is personally known to me
           _____    whose identity I proved on the basis of ____________________
           _____    whose identity I proved on the oath/affirmation of
           ____________________, a credible witness

to be the signer of the above instrument, and he/she acknowledged that he/she
signed it.



                                  Notary Public

                                  My Commission expires





State of                                             )
                                      ) ss
County of                                            )

     On ____________________, 19 _____, ____________________ personally appeared
before me,

          _____    who is personally known to me
          _____    whose identity I proved on the basis of ____________________
          _____    whose identity I proved on the oath/affirmation of
          ____________________, a credible witness

to be the signer of the above instrument, and he/she acknowledged that he/she
signed it.



                                  Notary Public

                                  My Commission expires