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                                                                   Exhibit 10.26

                             STOCK OPTION AGREEMENT
                                       FOR
                              NONEMPLOYEE DIRECTORS
                              ---------------------

      AGREEMENT dated this 22nd day of May, 1997,  between Oriole Homes Corp., a
Florida  corporation  (hereinafter  called the  "Company"),  and Paul R.  Lehrer
(hereinafter called the "Eligible Director").

                              W I T N E S S E T H:
                              --------------------

      WHEREAS, the Company's shareholders approved (on May 9, 1994) the adoption
of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") pursuant to
which each  Eligible  Director is entitled to receive a grant to purchase  1,200
Shares per year, up to a maximum of 6,000 Shares:

      WHEREAS,  the Executive Committee of the Board of Directors of the Company
(the  "Committee")  has this day granted to each Eligible  Director an option to
purchase  1,200 shares of Class B Common Stock,  par value $.10 per share,  (the
"Shares") of the Company,  and at the option price,  all as hereinafter  stated,
such  option  to be  exercisable  not more  than ten (10)  years  after the date
hereof; and

      WHEREAS,  the Eligible Director is willing to accept said option and to be
bound by the terms and conditions thereof; and

      WHEREAS,  the  execution  and  delivery  of this  Agreement  has been duly
authorized by the Board of Directors of the Company;

      NOW,  THEREFORE,  in  consideration  of the  foregoing  and of the  mutual
covenants  herein  contained  and other good and  valuable  considerations,  the
receipt  whereof is hereby  acknowledged,  the parties  hereto,  including to be
legally bound hereby, agree as follows:

                           GRANT OF OPTION: ADJUSTMENT
                           OF SHARES COVERED BY OPTION
                           ---------------------------

      1.1 The  Company  hereby  grants  to the  Eligible  Director  an option to
purchase from the Company, upon the terms and conditions  hereinafter set forth,
1,200 shares of Class B Common Stock,  par value $.10 per share (the  "Shares"),
for a cash consideration of $7.375 per share.

      1.2 The number of Shares above stated, and the purchase price thereof, may
be subject to adjustment from time to time as provided herein.

                                    VESTING
                                    -------

      2.1 This  option  shall vest and become  nonforfeitable  on the day of the
Annual Meeting following the date hereof if the Eligible  Director  continues to
serve as a Director.







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                               PAYMENTS FOR SHARES
                               -------------------

      3.1 The  option  price of the  shares  to be  purchased  pursuant  to each
exercise  of the within  option  shall be paid to the  Company  by the  Eligible
Director in full in cash or by bank  certified,  cashier's or personal  check at
the time of exercise of the option.


                               EXERCISE OF OPTION
                               ------------------

      4.1  The  within  option  may be  exercised  according  to  the  following
schedule:

              4.1.1  Fifty  (50%)   percent  of  the  options   granted   become
exercisable on the date of the first Annual Meeting after the date hereof.

              4.1.2 The  remaining  fifty (50%)  percent of the options  granted
become  exercisable  on the date of the  second  Annual  Meeting  after the date
hereof.

                                 TERM OF OPTION
                                 --------------

      5.1 The options  granted shall expire ten years from the date hereof,  but
are subject to earlier termination as follows:

              5.1.1 In the event of the termination of the optionee's service as
a Director, other than by reason of retirement,  total and permanent disability,
or  death,  the  options  granted  herein  that  have not been  exercised  shall
automatically expire on the effective date of termination.

              5.1.2 In the event of  termination  of the  optionee  by reason of
retirement or total and permanent  disability,  all vested  options shall become
exercisable  to  the  full  extent  of  the  number  of  Shares  remaining  then
outstanding,  regardless of whether such options were previously exercisable and
each such option shall expire four years after the date of such  termination  or
on the stated grant expiration date whichever is earlier.

              5.1.3 In the event of the death of the optionee  while he is still
a Director,  vested options as per Section 2.1 hereof shall become  exercisable,
to the full extent of Shares  remaining  covered by such options,  regardless of
whether  such  options were  previously  exercisable  and each such option shall
expire  four  years  after the date of death of such  optionee  or on the stated
grant expiration, whichever is earlier.

                       RESTRICTIONS ON EXERCISE OF OPTION
                     AND SALE OF STOCK BY ELIGIBLE DIRECTOR
                     --------------------------------------

      6.1     The within option shall not be exercisable if:

              (a)  The  exercise   thereof  will  involve  a  violation  of  any
applicable federal or state securities law; or

              (b) The  exercise  thereof  will  require  registration  under the
Securities Act of 1933, as amended,  of the shares of stock or other  securities
of the  Company  to be  purchased  by the  Eligible  Director  pursuant  to such
exercise.

      6.2 The Company  hereby agrees to make such  reasonable  efforts to comply
with any applicable  state  securities law as the Committee of the Company shall
determine  are  reasonably  necessary  but such  efforts  shall not  subject the
Company to unreasonable expense or hardship.





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      6.3 At the  time  of any  exercise  of the  within  option,  the  Eligible
Director  shall  represent  to and agree with the Company in writing  that he is
acquiring  the shares in respect of which the option is being  exercised for the
purpose of investment and not with a view of distribution.

      6.4 The  Eligible  Director  agrees  that he will  not  sell or  otherwise
dispose of any shares of stock or other  securities of the Company  purchased by
him pursuant to the  exercise of all or any portion of the within  option at any
time unless  there is an  effective  Registration  Statement  in respect of such
shares or other  securities  under the provisions of the Securities Act of 1933,
as amended, or counsel for the Company is reasonably satisfied that an exemption
from such  registration  provisions is available to the Company and the Eligible
Director.

                                  MISCELLANEOUS
                                  -------------

      7.1 This  Agreement  shall be binding upon and inure to the benefit of the
Company  and  its  successors  and the  Eligible  Director  and  his  executors,
administrators or personal representatives provided that the within option shall
be  non-transferable  by the Eligible Director  otherwise than by will or by the
laws of  descent  and  distribution,  and during the  lifetime  of the  Eligible
Director the option shall be exercisable only by him.

      7.2 In the  event  there  are any  changes  in the  capitalization  of the
Company through merger, consolidation, recapitalization, stock dividend or other
change  in the  corporate  or  capital  structure  of the  Company,  appropriate
adjustments,  as may seem equitable to the Committee shall be made in the number
of shares and the exercise price per share of the options to prevent dilution of
the rights granted hereunder.

      7.3 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.

      7.4 This  Agreement  shall  become  effective  as of the date  hereof and,
unless sooner terminated,  shall remain in effect for a period of ten (10) years
from the date hereof.  This  Agreement  may be  terminated at any time by mutual
consent  of the  parties  hereto,  but no  modification  or  amendment  of  this
Agreement shall become effective until such modification or amendment shall have
been approved by the Committee.

      IN WITNESS WHEREOF,  the Company has caused this Stock Option Agreement to
be executed by its  President or Vice  President  and the Eligible  Director has
executed this Agreement, the day and year first above written.



                                        ORIOLE HOMES CORP.




                                        By: /S/ RICHARD D. LEVY
                                        -----------------------
                                        Richard D. Levy
                                        Chief Executive Officer



                                        /S/ PAUL R. LEHRER
                                        ------------------
                                        Eligible Director





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