FAIRFIELD COMMUNITIES, INC.
               SECOND 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.

         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  failure  of a  member  of  such
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         committee  to so qualify  shall not be deemed to  invalidate  any Stock
         Option granted by such committee.
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                  (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.

                  (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 1,650,000 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
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of shares of Common Stock with respect to which Stock  Options may be granted to
any Participant during any calendar year will not exceed 300,000 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.


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                  (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.

                  (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 respect to Stock Options granted
         under the Plan that are  intended  to comply with the  requirements  of
         Section 162(m) of the Code.



<PAGE>


         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 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.

                                                FAIRFIELD COMMUNITIES, INC.



                                                 By:   /s/ Marcel J. Dumeny
                                                    -----------------------
                                                         Marcel J. Dumeny
                                                         Secretary