FAIRFIELD COMMUNITIES, INC.
                          EMPLOYEE STOCK PURCHASE PLAN


PURPOSE

     The Fairfield  Communities,  Inc. Employee Stock Purchase Plan (the "Plan")
is  intended  to  give  employees  of  Fairfield   Communities,   Inc.  and  its
subsidiaries  (except  for  those  subsidiaries  the  participation  of which is
excluded  during such time as may be determined  by the Board of Directors  (the
"Board") of Fairfield  Communities,  Inc.)  (collectively,  the  "Company")  the
opportunity to purchase,  through regular payroll  deductions,  shares of common
stock of the Company  ("Common  Stock") at a 15% discount to the market price of
the Common Stock and without paying any brokerage commissions.

WHO IS ELIGIBLE

     All active full-time, commission sales and seasonal employees (in each case
as defined in the  Company's  employee  handbook)  of the Company  may  purchase
shares through the Plan, provided they are actively employed on the first day of
the fourth  calendar month of employment  with the Company and have attained the
age of  majority  in their  states.  Employees  whose  service  with the Company
terminates   (excluding  employees  who  return  to  active  employment  at  the
expiration of approved  leaves of absences) who  subsequently  are reemployed by
the Company will be considered to be new employees as of the effective  dates of
their reemployment.

PURCHASES THROUGH PAYROLL DEDUCTIONS

     The  Company  is making  its  payroll  deduction  facilities  available  to
eligible  employees to enable them to make purchases.  Use the accompanying Plan
Enrollment Form if you desire to authorize payroll deductions. The amount of the
deduction  will be the  amount of your  choice  between 1% and 10% of your gross
cash compensation (defined as salary, wages, commissions and cash bonus payments
(including  any  amounts  which  have been  deducted  for 401(k)  plans,  salary
reduction  deferral  agreements,   ss.  125  cafeteria-style  plans,  etc.,  but
excluding   moving  expenses,   severance  pay,   benefit  plan   distributions,
disability,  etc.))  (minimum of $5.00 per pay period),  rounded off to the next
highest even dollar. You may not, however,  purchase more than $25,000 of Common
Stock per year through payroll deductions under the Plan. The purchase price for
Common  Stock will be the closing  price on the  Composite  Tape of the New York
Stock Exchange (or such other  principal  exchange on which the Common Stock may
be listed for  trading  from time to time) on the last  trading day of the month
for which  deductions were  accumulated.  No interest will be paid on funds held
pending purchases of the Common Stock.

     You may  increase or decrease the amount of your  payroll  deductions  once
each  quarter  or  discontinue  deductions  entirely  at any time with  re-entry
permitted at the beginning of a subsequent quarter. Any changes will take effect
as soon as  possible  after  your  written  request  is  received  by the  Human
Resources Department of the Company.



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     Merrill Lynch, Pierce, Fenner & Smith Incorporated or a successor brokerage
firm selected by the Company (the "Broker") will act as the agent of the Plan to
purchase shares of Common Stock for the participants' accounts.

DIRECT PURCHASES

     In addition to the payroll deduction method of purchasing  shares,  you may
also make  "direct"  purchases of shares by sending a check,  along with written
instructions,  directly  to the  Broker.  Because  you  are a Plan  participant,
transaction fees and commissions  related to direct purchases will be discounted
from the Broker's regular rates.

     Orders for direct purchases of additional  Common Stock will be combined on
a daily basis with all orders received by the Broker for shares of the Company's
Common  Stock.  Orders  will  typically  be  entered on the first  business  day
following  acceptance  of your order by the  Broker,  or as soon as  practicable
thereafter.  Shares  purchased in the open market may be purchased over a period
of time.  In this case,  your price will be the average of all shares  purchased
over that period.

LISTING OF THE COMMON STOCK

     The Company's  Common Stock is traded on the New York Stock  Exchange.  The
price is listed in major  newspapers  every day under the trading  symbol "FFD."
The listing in the newspaper  typically  includes,  among other things, the high
price, the low price and the closing price for the prior day.

OWNERSHIP

     The shares  purchased  through the Plan will be allocated to each  employee
based upon the amount of his or her payroll  deduction  and the average  cost of
shares  purchased for the Plan on a given date. The  allocation  will be made in
whole shares and in fractions  calculated  to one  ten-thousandth  of a share (4
decimals). Upon allocation of shares to an employee's account, the employee will
acquire immediate and full ownership of such shares.

RECORD OF PURCHASE

     The Broker  will mail a quarterly  statement  of account to you showing the
status of your account including the number of shares  purchased,  the price per
share and the total number of shares, including fractions, held in your account.

COSTS OF INVESTMENT

     The brokerage  commissions on all purchases through payroll deductions,  as
well as the costs of administering the Plan, will be paid by the Company.


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REGISTRATION OF SHARES

     The certificates for shares purchased, whether through payroll deduction or
direct purchase,  will be registered in the name of a nominee of the Broker. The
certificates  will be held in safekeeping,  and the Broker will act as custodian
without charge to you.

     You may also  designate a co-owner to be a joint  tenant of your account by
completing a Joint Account Agreement available from your site or office benefits
coordinator.

SHAREHOLDER PRIVILEGES

     You are the legal  owner of the shares in your  account.  You will  receive
notices of  meetings,  proxy  statements,  annual and interim  reports and other
communications  sent to  shareholders.  You will  have the  right to vote  whole
shares and to receive any dividends paid with respect to your shares.

SALE OF SHARES

     You may  instruct  the Broker to arrange  for the sale of any or all of the
whole shares in your account. However, the Company will not pay the costs of the
sale of your shares. Promptly after executing the sale, the Broker will mail you
a check for the proceeds, less the normal commission and any transfer taxes that
may be applicable.

     You may, of course,  also sell your shares by requesting your certificates,
pursuant to the procedure described in "How To Obtain  Certificates"  below, and
selling them through the broker of your choice.

HOW TO OBTAIN CERTIFICATES

     You may  request  the Broker to issue a  certificate  for any or all of the
whole shares held in your account,  but you will be charged a certificate fee by
the Broker.

     The shares so issued will be  registered  in your name (or  jointly  with a
co-owner) and mailed to you.

TERMINATION

     You may  terminate  your  participation  in the  Plan at any  time.  If you
terminate  your  participation  in the Plan,  your  account with the Broker will
remain  open  unless you choose to close it.  You can  continue  to buy and sell
securities through your brokerage account, but different transaction fees and an
annual  account fee will apply.  If you wish to close your  account,  you should
instruct the Broker to:

     (1)  Issue a certificate  to you for the whole shares and sell any fraction
          in your account; or

     (2)  Sell all shares and any fraction in your account.  Promptly  after the
          sale,  the Broker will remit by check the total proceeds from the sale
          less the normal  commission and transfer taxes that may be applicable.
          A brokerage confirmation of the transaction will also be mailed.

CONTINUATION OF THE PLAN

     The Plan  became  effective  on or about  January 1, 1997.  The Company has
reserved 526,364 shares of Common Stock (as adjusted for the 3-for-2 share stock
split which became  effective  on July 15, 1997 and as further  adjusted for the
2-for-1  share stock split which  became  effective on January 30, 1998) held in
its  treasury to be  purchased  from the Company and sold  pursuant to the Plan.
Upon the sale of all 526,364 shares, the Plan will terminate, unless extended by
the Company.  Through  January 15, 1998,  48,662 shares of Common Stock had been
sold pursuant to the Plan. The Company  reserves the right to amend or terminate
the Plan at any  time.  Upon  termination  of the  Plan,  you will have the same
options for the  disposition  of your shares as if you had elected to  terminate
your participation in the Plan.

ADJUSTMENTS

     The Board may make or provide for such adjustments in the number or kind of
shares of the  Common  Stock that may be sold under the Plan as the Board in its
sole  discretion may determine is equitably  required in connection with (a) any
stock dividend,  stock split,  combination of shares,  recapitalization or other
change in the capital structure of the Company,  (b) any merger,  consolidation,
spin-off,   split-off,   spin-out,   split-up,    separation,    reorganization,
liquidation,  or other  distribution of assets or issuance of rights or warrants
to purchase Common Stock, or (c) any other corporate transaction or event having
an effect similar to any of the foregoing.

CONFLICTS

     In the event of any conflict or  inconsistency  between the  provisions  of
this Plan and any other  document,  the provisions of the Plan shall govern with
respect to the matter.

ADMINISTRATION

     This Plan will be administered by the Compensation  Committee of the Board.
The Compensation  Committee currently consists of three members of the Board who
are  selected  annually by the Board and may be removed at any time by action of
the Board. The Compensation Committee will have authority to interpret the Plan,
to  prescribe,  amend and  rescind  rules  relating to it, and to make all other
determinations  deemed  necessary or advisable in  administering  the Plan.  The
Compensation Committee's  determination with respect to any matter pertaining to
the  Plan  will  be  final,   absent  manifest  error.  No  trust  or  fiduciary
relationship  with the  Company is  created  hereby.  No  officer,  director  or
employee  of the Company  shall be liable to any person for any action  taken or
omitted  in  connection  with the  administration  of this  Plan,  nor shall the
Company be liable to any such person for any such omission.


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EMPLOYMENT RIGHTS

     Neither the  establishment  of this Plan nor the status of an employee as a
participant shall give any participant any right to be retained in the employ of
the Company.

GOVERNING LAW

     The  construction,  validity and  operation of the Plan will be governed by
the laws of the State of Arkansas.

ASSIGNMENT

     Participants may not assign or hypothecate their interests in the Plan.

HOW TO PARTICIPATE

     If you desire to participate in the Plan,  complete the  accompanying  Plan
Enrollment  Form  as  indicated  and  give it to your  site or  office  benefits
coordinator or mail it to the Company at the following address:

                                    Human Resources Department
                                    Employee Stock Purchase Plan
                                    Fairfield Communities, Inc.
                                    11001 Executive Center Drive
                                    Little Rock, Arkansas  72211